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MASTER LOAN AND SECURITY AGREEMENT
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Dated as of March 31, 1998
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CRIIMI MAE INC.
as Borrower
and
GERMAN AMERICAN CAPITAL CORPORATION
as Lender
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TABLE OF CONTENTS
RECITALS 3
SECTION 1 Definitions and Accounting Matters 3
1.01 Certain Defined Terms 3
1.02 Accounting Terms and Determinations 11
SECTION 2 Advances, Note and Prepayments 11
2.01 Advances 11
2.02 Notes 11
2.03 Procedure for Borrowing 11
2.05 Establishment of Prepayment Account 12
2.04 Repayment of Advances; Interest 13
2.06 Limitation on Types of Advances; Illegality 13
2.07 Mandatory Prepayments or Pledge 14
2.08 Substitution 14
2.09 Optional Prepayments; Termination by Demand 15
2.10 Requirements of Law 15
2.11 Taxes 16
2.12 Curtailment or Extension of Termination Date 17
SECTION 3 Payments; Computations; Etc. 17
3.01 Payments 17
3.02 Computations 18
3.03 Fees 18
SECTION 4 Collateral Security 18
4.01 Collateral; Security Interest 18
4.02 Further Documentation 19
4.03 Changes in Locations, Name, etc. 19
4.04 Lender's Appointment as Attorney-in-Fact 19
4.05 Performance by Lender of Borrower's Obligations 20
4.06 Proceeds 21
4.07 Remedies 21
4.08 Limitation on Duties Regarding Presentation of
Collateral 23
4.09 Powers Coupled with an Interest 23
4.10 Release of Security Interest 23
SECTION 5 Conditions Precedent 23
5.01 Initial Advance 23
5.02 Initial and Subsequent Advances 25
SECTION 6 Representations and Warranties 26
SECTION 7 Covenants of the Borrower 27
SECTION 8 Events of Default 28
SECTION 9 Remedies Upon Default 31
SECTION 10 No Duty of Lender 32
SECTION 11 Miscellaneous 32
11.01 Waiver 32
11.02 Notices 32
11.03 Indemnification and Expenses 33
11.04 Amendments 33
11.05 Successors and Assigns 33
11.06 Survival 34
11.07 Captions 34
11.08 Counterparts 34
11.09 Governing Law; etc. 34
11.10 Consent to Jurisdiction and Arbitration 34
11.11 Waiver of Jury Trial 35
11.12 Hypothecation and Pledge of Collateral 35
11.13 Recording of Communications 35
11.14 Single Agreement 35
11.15 Entire Agreement; Severability 35
11.16 Assignability 36
11.17 Intent 36
11.18 Disclosures Relating to Certain Federal
Protections 36
11.19 Netting 36
11.20 No Reliance 37
11.21 Miscellaneous 37
EXHIBITS
EXHIBIT A Form of Promissory Note
EXHIBIT B Form of Opinion of Counsel to Borrower
EXHIBIT C Form of Notice of Borrowing and Pledge
EXHIBIT D Form of Confirmation Letter
EXHIBIT E Authorized Representatives of Borrower
MASTER LOAN AND SECURITY AGREEMENT
MASTER LOAN AND SECURITY AGREEMENT, dated as of March 31, 1998, between CRIIMI
MAE INC., a Maryland corporation (the "Borrower"), and GERMAN AMERICAN CAPITAL
CORPORATION, a Delaware corporation (the "Lender").
RECITALS
Heretofore, the Borrower and the Lender have entered into that certain
Committed Master Repurchase Agreement, dated as of March 28, 1996 (the "Existing
Agreement"), pursuant to which the Borrower pledged to the Lender certain
Securities. The Borrower and the Lender are entering into this Loan Agreement,
which supersedes the Existing Agreement and is a continuation of the agreement
set forth therein, as amended and modified herein.
The Borrower has requested that the Lender from time to time make
revolving credit loans to it to finance certain Securities (as defined
below), and the Lender is prepared to make such loans upon the terms and
conditions hereof. Accordingly, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby 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 (all terms defined in this Section 1.01 or in other
provisions of this Loan Agreement in the singular to have the same meanings when
used in the plural and vice versa):
"Act of Insolvency" means, with respect to any party, (i) and its
Affiliates, the filing of a petition, commencing, or authorizing the
commencement of any case or proceeding under any bankruptcy, insolvency,
reorganization, liquidation, dissolution or similar law relating to the
protection of creditors, or suffering any such petition or proceeding to be
commenced by another which is consented to, not timely contested or results in
entry of an order for relief; (ii) seeking the appointment of a receiver,
trustee, custodian or similar official for such party or an Affiliate or any
substantial part of the property of either, (iii) the appointment of a receiver,
conservator, or manager for such party or an Affiliate by any governmental
agency or authority having the jurisdiction to do so; (iv) the making or
offering by such party or an Affiliate of a composition with its creditors or a
general assignment for the benefit of creditors, (v) the admission by such party
or an Affiliate of such party's or such Affiliate's inability to pay its debts
or discharge its obligations as they become due or mature; or (vi) any
governmental authority or agency or any person, agency or entity acting or
purporting to act under governmental authority shall have taken any action to
condemn, seize or appropriate, or to assume custody or control of, all or any
substantial part of the property of such party or of any of its Affiliates, or
shall have taken any action to displace the management of such party or of any
of its Affiliates or to curtail its authority in the conduct of the business of
such party or of any of its Affiliates.
"Additional Collateral" shall have the meaning provided in Section
2.07(a) hereof.
"Advance" shall have the meaning provided in Section 2.01 hereof.
"Affiliate" means an affiliate of a party as such term is defined in
the United States Bankruptcy Code in effect from time to time.
"Applicable Margin" shall mean 1.50%.
"Approved Underwriter" means any of the following underwriters: Xxxxxx
Brothers Inc., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Xxxxxxx Xxxxx
Barney Inc., Citicorp Securities Markets, Inc, Xxxxxxxxx Xxxxxx & Xxxxxxxx
Securities Corporation, X.X. Xxxxxx Inc., Xxxxxx Xxxxxxx & Co. Incorporated.,
Deutsche Xxxxxx Xxxxxxxx Inc., First Union, NationsBank, The Chase Manhattan
Bank, Xxxxxxx, Xxxxx & Company, and Nomura Securities International, Inc.
"Bankruptcy Code" shall mean the United States Bankruptcy Code of
1978, as amended from time to time.
"Borrower" shall have the meaning provided in the heading hereof.
"Business Day" means a day other than (i) a Saturday or Sunday, or
(ii) a day in which the New York Stock Exchange or banks in the State of New
York or Commonwealth of Virginia are authorized or obligated by law or executive
order to be closed.
"Cash Equivalents" shall mean (a) securities with maturities of 90
days or less from the date of acquisition issued or fully guaranteed or insured
by the United States Government or any agency thereof, (b) certificates of
deposit and eurodollar time deposits with maturities of 90 days or less from the
date of acquisition and overnight bank deposits of any commercial bank having
capital and surplus in excess of $500,000,000, (c) repurchase obligations of any
commercial bank satisfying the requirements of clause (b) of this definition,
having a term of not more than seven days with respect to securities issued or
fully guaranteed or insured by the United States Government, (d) commercial
paper of a domestic issuer rated at least A-1 or the equivalent thereof by
Standard and Poor's Ratings Group ("S&P") or P-1 or the equivalent thereof by
Xxxxx'x Investors Service, Inc. ("Moody's") and in either case maturing within
90 days after the day of acquisition, (e) securities with maturities of 90 days
or less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody's, (f) securities with maturities of 90
days or less from the date of acquisition backed by standby letters of credit
issued by any commercial bank satisfying the requirements of clause (b) of this
definition or (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"CMO Match Funded Non-Recourse Debt" means debt of a special purpose,
bankruptcy remote subsidiary as to which no recourse exists to the Company on
which (i) the principal amortization and maturity of such debt are based upon
the aggregate principal amortization and maturity of a like or greater amount of
the funded assets, and (ii) the interest rate of such debt is at a fixed rate;
provided, however, that the interest rate of such debt may be a floating rate if
(x) the funded assets include adjustable rate assets or (y) the funded assets
have been effectively swapped under an interest rate agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" shall have the meaning provided in Section 4.01(b)
hereof.
"Collateral Amount" means, with respect to any Advance, the amount
obtained by application of the Collateral Percentage to the Market Value of the
Collateral for such Advance.
"Collateral Deficit" shall have the meaning provided in Section
2.07(a) hereof.
"Collateral Excess" shall have the meaning provided in Section
2.07(b) hereof.
"Collateral Percentage" means the applicable percentage as determined
by Lender in its sole discretion and as set forth in the Confirmation.
"Commercial Conduit Type Loan" shall mean commercial Mortgage Loans
which (i) conform to traditional conduit quality securities standards, (ii) are
intended for either sale into a third party conduit program or for
securitization into a similar program, (iii) have a remaining term of at least
seven years and (iv) generally have a principal balance between $1,500,000 and
$30,000,000 at origination,(v) are ratable under rating agency standards, and
(vi) are either fixed rate or adjustable rate mortgage loans.
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"CRIIMI MAE Holdings Master Loan and Security Agreement" shall mean
that certain Master Loan and Security Agreement, dated as of March 31, 1998,
between the Lender and CRIIMI MAE Holdings, L.P., a limited partnership of which
the Borrower is the general partner, as amended, supplemented or otherwise
modified from time to time.
"Default" shall mean an Event of Default or an event that with notice
or lapse of time or both would become an Event of Default.
"Defaulting Party" shall have the meaning provided in Section
11.20(b).
"Dollars" and "$" shall mean lawful money of the United States of
America.
"Effective Date" shall mean the date upon which the conditions
precedent set forth in Section 5.01 shall have been satisfied.
"Eligible Security" shall mean a rated or non-rated "B" piece
subordinate commercial mortgage-backed security, including commercial
mortgage-backed securities created from resecuritizations and interest only
commercial mortgage-backed securities.
"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 that
is a member of any group of organizations (i) described in Section 414(b) or (c)
of the Code of which the Borrower is a member and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which the
Borrower is a member.
"Event of Default" shall have the meaning provided in Section 8
hereof.
"Facility Fee" shall have the meaning provided in Section 3.03(a)
hereof.
"Federal Funds Rate" shall mean, for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Lender from three
federal funds brokers of recognized standing selected by it.
"Filings" shall have the meaning given in Section 4.01.
"Funding Date" shall mean the date on which an Advance is made
hereunder.
"GAAP" shall mean generally accepted accounting principles as in
effect from time to time in the United States of America.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any court or arbitrator having jurisdiction over the Borrower,
any of its Subsidiaries or any of its properties.
"HUD" shall mean the U.S. Department of Housing and Urban Development, or any
federal agency or official thereof which may from time to time succeed to the
functions thereof.
"Indebtedness" shall mean, of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money (whether by
loan or the issuance and sale of debt securities) or for the deferred purchase
price of property or services (other than current trade liabilities incurred in
the ordinary course of business and payable in accordance with customary
practices), (b) any other indebtedness of such Person which is evidenced by a
note, bond, debenture or similar instrument, (c) all obligations of such Person
under financing leases, (d) all obligations of such Person in respect of letters
of credit, acceptances or similar instruments issued or created for the account
of such Person and (e) all liabilities secured by any Lien on any property owned
by such Person even though such Person has not assumed or otherwise become
liable for the payment thereof.
"Indemnified Party" shall have the meaning provided in Section 11.03
hereof.
"Interest Period" shall mean, with respect to any Advance, (i)
initially, the period commencing on the Funding Date with respect to such
Advance and ending on the date one month or three months thereafter when the
original LIBO Rate period expires (the "Reset Date"), and (ii) thereafter, each
period from the preceding Reset Date until the current LIBO Rate period expires.
Notwithstanding the foregoing, each Interest Period that 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 calendar month when the
Interest Period expires) shall end on the last Business Day of the appropriate
calendar month. Notwithstanding the foregoing: (i) no Interest Period may
begin before and end after the Termination Date or the Maturity Date; and
(ii) each Interest Period that would otherwise end on a day that 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).
"Lender" shall have the meaning provided in the heading hereof.
"LIBO Base Rate" shall mean for any Advance, with respect to each day
during each Interest Period pertaining to such Advance, either (a) the rate per
annum equal to the rate appearing at page 5 of the Telerate Screen as one-month
LIBOR on the first day of such Interest Period, and if such rate shall not be so
quoted, the rate per annum at which the Lender is offered Dollar deposits at or
about 11:00 a.m., New York City time, on such date by prime banks in the
interbank eurodollar market where the eurodollar and foreign currency exchange
operations in respect of its Advances are then being conducted for delivery on
such day for a period of one month and in an amount comparable to the amount of
the Advances to be outstanding on such day or (b) the rate per annum equal to
the rate appearing at page 5 on the Telerate Screen as three-month LIBOR on the
first day of such Interest Period, and if such rate shall not be so quoted, the
rate per annum at which the Lender is offered Dollar deposits at or about 11:00
a.m., New York City time, on such date by prime banks in the interbank
eurodollar market where the eurodollar and foreign currency exchange operations
in respect of its Advances are then being conducted for delivery on such day for
a period of three months, and in an amount comparable to the amount of the
Advances to be outstanding on such day, as selected at the outset of each
Advance by the Borrower, as set forth by the Lender in either case in the
Confirmation.
"LIBO Rate" shall mean with respect to each day during each Interest
Period pertaining to an Advance, a rate per annum determined by the Lender in
accordance with the following formula (rounded upwards to the nearest 1/100th of
one percent), which rate as determined by the Lender shall be conclusive absent
manifest error by the Lender:
the applicable LIBO Base Rate
1.00 - LIBO Reserve Requirements
"LIBO Reserve Requirements" shall mean for any Interest Period for any
Advance, the aggregate (without duplication) of the rates (expressed as a
decimal fraction) of reserve requirements in effect on such day or during such
Interest Period, as applicable (including, without limitation, basic,
supplemental, marginal and emergency reserves under any regulations of the Board
of Governors of the Federal Reserve System or other Governmental Authority
having jurisdiction with respect thereto), dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of such Board) maintained by a member bank of such
Governmental Authority.
"Lien" shall mean any mortgage, lien, pledge, charge, security
interest or similar encumbrance.
"Loan Agreement" shall mean this Master Loan and Security Agreement,
as the same may be amended, supplemented or otherwise modified from time to
time.
"Loan Documents" shall mean this Loan Agreement and the Note.
"Market Value" shall mean as of any date with respect to the
Securities, the price at which such Securities could readily be sold as
determined by the Lender in its good faith discretion. In the event that, for
any date (each a "Determination Date") the Borrower disputes the Lender's
determination of the Market Value of any Securities, and the Borrower delivers
to the Lender, at or before 1:00 p.m. (eastern time) a Written Offer (as defined
below) to purchase such Security, then the Lender shall accept the purchase
price set forth in such Written Offer as the Market Value of such Security on
such Determination Date; provided, however, that such Written Offer shall only
be determinative of the Market Value of the Security on such Determination Date
and not on any other date. On the day next succeeding such Determination Date,
the Lender shall once again be entitled to determine Market Value in accordance
with the first sentence of this definition, unless and until the Borrower
delivers a new Written Offer at or before 1:00 p.m. (eastern time) on such
succeeding day. "Written Offer" means, with respect to any Securities, a
legally binding and enforceable, unconditional offer to purchase all of such
Securities, at a stated price that is expressed as a spread over a point of the
U.S. Treasury Securities curve and that is (a) made by an Approved Underwriter;
(b) set forth in writing on such Approved Underwriter's letterhead; and (c) is
open and binding for at least three (3) Business Days. In all events, in
determining Market Value, Lender shall not take into account any Securities with
respect to which (1) there is a breach of a representation, warranty or covenant
made by Borrower in this Loan Agreement that materially adversely affects
Lender's interest in such Security and which breach has not been cured or (ii)
for which a default exists in payment of interest or principal otherwise
required to be paid under the applicable Pooling and Servicing Agreement for
more than 30 days. Absent manifest error, Lender's determination in accordance
with this definition shall be conclusive for purposes of this Loan Agreement.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the business, assets, property, business, condition (financial or otherwise)
or prospects of the Borrower, (b) the ability of the Borrower to perform its
obligations under any of the Loan Documents to which it is a party, (c) the
validity or enforceability of any of the Loan Documents, (d) the rights and
remedies of the Lender under any of the Loan Documents, (e) the timely payment
of the principal of or interest on the Advances or other amounts payable in
connection therewith or (f) the Collateral.
"Maturity Date" shall mean the date set forth in the related
Confirmation as the date on which such Advance is due and payable.
"Maximum Credit" shall mean $ 500,000,000 minus the outstanding principal
balance of all Advances under the CRIIMI MAE Holdings Master Loan and Security
Agreement.
"Mortgage Warehouse Debt" shall mean debt of any person under any
warehouse line of credit, mortgage loan repurchase agreement or similar facility
or under any commercial paper program (i) that is incurred for the purpose of
funding the origination of mortgage loans or mortgage notes that are intended to
be sold to investors or securitized; and (ii) that in the case of any warehouse
line of credit or similar facility is, or, in the case of any commercial paper
program, the letters of credit or revolving credit facility providing credit
enhancement or liquidity backup for such commercial paper program are, secured
by collateral consisting of Commercial Conduit Type Loans owned by such person,
and (c) under which no Commercial Conduit Type Loan shall be pledged to secure
indebtedness for a period in excess of 90 days and (d) the outstanding amount of
which shall not exceed 90% of the market value of the Commercial Conduit Type
Loans securing such debt. No warehouse line of credit, mortgage loan repurchase
agreement or similar facility or commercial paper program shall commingle
Commercial Conduit Type Loans and mortgage backed securities as collateral.
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"Nondefaulting Party" shall have the meaning provided in Section
11.20(b).
"Non-Excluded Taxes" shall have the meaning provided in Section
2.11(a) hereof.
"Non-Use Fee" shall have the meaning provided in Section 3.03.
"Note" shall mean the promissory note provided for by Section 2.02(a)
hereof for Advances and any promissory note delivered in substitution or
exchange therefor, in each case as the same shall be modified and supplemented
and in effect from time to time.
"Notice of Borrowing and Pledge" shall have the meaning provided in
Section 2.03(a) hereof.
"Payment Account" shall have the meaning set forth in Section 2.04.
"Payment Account Bank" shall have the meaning set forth in Section
2.04.
"Payment Date" shall mean the 26th day of each calendar month, or if
such day is not a Business Day, the next succeeding Business Day.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, limited liability company, trust,
unincorporated association, government (or any agency, instrumentality or
political subdivision thereof) or any other entity of whatever nature.
"Plan" shall mean at a particular time, any employee benefit plan
which is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Pooling and Servicing Agreement" means any pooling and servicing
agreement governing the underlying mortgage loans which comprise any of the
Securities.
"Post-Default Rate" shall mean, in respect of any principal of any
Advance or any other amount under this Loan Agreement, the Note or any other
Loan Document that is not paid when due to the Lender (whether at stated
maturity, by acceleration, by optional or mandatory prepayment 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 the applicable
LIBO Rate plus the Applicable Margin plus $100 per day.
"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.
"Reportable Event" shall mean any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.
Section 2615.
"Reset Date" shall have the meaning set forth in the definition of
Interest Period.
"Requirement of Law" shall mean as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Secured Obligations" shall mean the unpaid principal amount of, and
interest on the Advances, and all other obligations and liabilities of the
Borrower to the Lender, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise under,
out of or in connection with this Loan Agreement, the Note, any other Loan
Document and any other document made, delivered or given in connection herewith
or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without limitation,
all fees and disbursements of counsel to the Lender that are required to be paid
by the Borrower pursuant to the terms hereof or thereof) or otherwise. For
purposes hereof, "interest" shall include, without limitation, interest accruing
after the maturity of the Advances and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding.
"Security" shall mean an Eligible Security which has been pledged to
the Lender or additional securities pledged as Additional Collateral to the
Lender.
"Security Schedule" shall mean a schedule of Securities containing
information with respect to each Security, to be delivered by the Borrower to
the Lender pursuant to Section 2.03(a) as shall be mutually agreed upon by the
Lender and the Borrower.
"Single Employer Plan" shall mean any Plan which is covered by Title
IV of ERISA, but which is not a Multiemployer Plan.
"Subsidiary" shall mean, with respect to any Person, any other Person
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 Date" shall mean December 20, 1999 or such earlier date
on which this Loan Agreement shall terminate in accordance with the provisions
hereof or by operation of law, as same may be extended in accordance with
Section 2.12 hereof.
"Underlying Mortgage Loans" means mortgage loans represented by and
underlying each Security.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in
effect on the date hereof in the State of New York; provided that if by reason
of mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than New York,
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.
1.02 Accounting Terms and Determinations Except as otherwise
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Lender hereunder shall be
prepared, in accordance with GAAP.
SECTION 2 Advances, Note and Prepayments
2.01 Advances Subject to the terms and conditions of this Loan
Agreement, the Lender agrees to make loans (individually, an "Advance";
collectively, the "Advances") to the Borrower, from time to time on any Business
Day from and including the Effective Date to but excluding the Termination Date,
in an aggregate principal amount at any one time outstanding up to but not
exceeding the Maximum Credit. Subject to the terms and conditions of this Loan
Agreement, the Borrower may borrow, repay and reborrow hereunder.
2.02 Notes
(a) The Advances made by the Lender shall be evidenced by a
single promissory note of the Borrower substantially in the form of Exhibit A
hereto (the "Note"), dated the date hereof, payable to the Lender in a principal
amount equal to the amount of the Maximum Credit and otherwise duly completed.
The Lender shall have the right to have its Note subdivided, by exchange for
promissory notes of lesser denominations or otherwise.
(b) The date, amount and interest rate of each Advance made by
the Lender to the Borrower, and each payment made on account of the principal
and interest thereof, shall be recorded by the Lender on its books and, prior to
any transfer of the Note, endorsed by the Lender on the schedule attached to the
Note or any continuation thereof; provided that the failure of the Lender to
make any such recordation or endorsement shall not affect the obligations of the
Borrower to make a payment when due of any amount owing hereunder or under the
Note in respect of the Advances.
2.03 Procedure for Borrowing
(a) The Borrower may request a borrowing hereunder, on any Business
Day during the period from and including the Effective Date to and including the
Termination Date, by delivering to the Lender an irrevocable written Notice of
Borrowing and Pledge substantially in the form of Exhibit C hereto (a "Notice of
Borrowing and Pledge"), appropriately completed which Notice of Borrowing and
Pledge must be received by the Lender: (1) with respect to Securities which
Lender has already underwritten, 2 Business Days prior to the requested Funding
Date or (2) with respect to Securities which Lender has not previously
underwritten, 20 Business Days prior to the requested Funding Date. Such Notice
of Borrowing and Pledge shall (i) include a Security Schedule in respect of the
Securities that the Borrower proposes to pledge to the Lender in connection with
such Advance, (ii) contain the amount of the requested Advances, which shall in
all events be at least equal to $1,000,000, to be made on such Funding Date
(setting forth the amount of the Advance allocable to each Security set forth on
the attached Security Schedule), (iii) specify the requested Funding Date, and
(iv) contain (by attachment) such other information reasonably requested by the
Lender from time to time. Upon receiving such Notice of Borrowing and Pledge,
the Lender shall promptly deliver to Borrower a written confirmation in the form
of Exhibit D attached hereto (a "Confirmation"). Such Confirmation shall
describe the Securities (including CUSIP number, if any), identify Lender and
Borrower and set forth (i) the Funding Date, (ii) the amount of the Advance
(iii) the applicable Maturity Date (unless such advance matures on demand), (iv)
the LIBO Base Rate applicable to the Advance; (v) the Collateral Amount, (vi)
the Applicable Margin and any additional terms or conditions not inconsistent
with this Loan Agreement. Each Confirmation, together with this Loan Agreement,
shall be conclusive evidence of the terms of the Advance covered thereby unless
objected to in writing by the Borrower no more than two (2) Business Days after
the date the Confirmation was received by the Borrower or unless a corrected
Confirmation is sent by Lender. An objection sent by the Borrower must state
specifically that the writing is an objection, must specify the provision(s)
being objected to by the Borrower, must set forth such provision(s) in the
manner that the Borrower believes they should be stated, and must be received by
Lender no more than two (2) Business Days after the Confirmation was received by
the Borrower. Subject to Section 5 hereof, such Advance will then be made
available to the Borrower by the Lender transferring, via wire transfer
(pursuant to wire transfer instructions provided by the Borrower on or prior to
such Funding Date) the aggregate amount of such Advance in immediately available
funds.
(b) On the Maturity Date, termination of the Advance will be effected
by transfer to Borrower or its designee of the Securities in transferable form
(and any Income in respect thereof received by Lender not previously credited or
transferred to, or applied to the obligations of, Borrower pursuant to Section
2.04(b)) against the simultaneous transfer of the outstanding principal amount,
plus any accrued interest and all other amounts due with respect to the Advance
to an account of Lender. Notwithstanding the foregoing, unless the Borrower is
notified in writing by the Lender at least five (5) Business Days prior to any
Maturity Date, and provided that no Event of Default exists and is continuing,
such Securities shall automatically become subject to a new Advance with the
same terms and conditions as the original Advance, and the Maturity Date with
respect thereto shall be the date determined by the same number of days from the
initial Funding Date to the initial Maturity Date for the original Advance.
Subject to the preceding sentence, each Advance shall continue to be
automatically renewed for the same period of time as the original Advance,
provided that, if the Maturity Date determined in accordance with the preceding
sentence is later than the Termination Date, the Maturity Date for any such
Advance shall be automatically reset to the Termination Date.
2.04 Establishment of Payment Account". On each Payment Date, all
Income in respect of the Collateral shall be paid to and distributed by Lender
as follows: first, to accrued but unpaid interest on the Advances, second, to
the amount of any Collateral Deficit described in Section 2.07(a) (provided
that, at Borrower's option, Borrower may deliver additional Securities to Lender
within the time periods required in Section 2.07(a) in lieu of having Lender
apply Income to such Collateral Deficit), third, to the amount of any Commitment
or Non-Use Fee due and owing, and fourth, to the Borrower on such Payment Date.
2.05 Repayment of Advances; Interest
(a) The Borrower hereby promises to repay in full on the
applicable Maturity Date the outstanding principal amount of the Advance due on
such Maturity Date; provided, that, if the Advance is automatically extended as
provided in Section 2.03(b), payment of the outstanding principal amount of the
Advance shall be due on the Maturity Date of said renewed Advance.
(b) The Borrower hereby promises to pay to the Lender interest on the unpaid
principal amount of each Advance for the period from and including the Funding
Date of such Advance to but excluding the date such Advance shall be paid in
full, at a rate per annum equal to the applicable LIBO Rate plus the Applicable
Margin. Notwithstanding the foregoing, the Borrower hereby promises to pay to
the Lender interest at the applicable Post-Default Rate on any principal of any
Advance and on any other amount payable by the Borrower hereunder or under the
Note that shall not be paid in full when due (whether at stated maturity, by
acceleration or by mandatory prepayment 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 Advance shall be payable monthly on each Payment
Date and on the Termination Date. Notwithstanding the foregoing, interest
accruing at the Post-Default Rate shall be payable to the Lender on demand.
Promptly after the determination of any interest rate provided for herein or any
change therein, the Lender shall give notice thereof to the Borrower.
2.06 Limitation on Types of Advances; Illegality. Anything herein to
the contrary notwithstanding, if, on or prior to the determination of any LIBO
Base Rate:
(a) the Lender determines, which determination shall be
conclusive, that quotations of interest rates for the relevant deposits referred
to in the definition of "LIBO Base Rate" in Section 1.01 hereof are not being
provided in the relevant amounts or for the relevant maturities for purposes of
determining rates of interest for Advances as provided herein; or
(b) the Lender determines, which determination shall be
conclusive, that the relevant rate of interest referred to in the definition of
"LIBO Base Rate" in Section 1.01 hereof upon the basis of which the rate of
interest for Advances is to be determined is not likely adequately to cover the
cost to the Lender of making or maintaining Advances; or
(c) it becomes unlawful for the Lender to honor its obligation
to make or maintain Advances hereunder using a LIBO Rate;
then the Lender shall give the Borrower prompt notice thereof and, so long as
such condition remains in effect, the Lender shall be under no obligation to
make additional Advances, and the Borrower shall, at its option, either prepay
all such Advances as may be outstanding or pay interest on such Advances at a
rate per annum equal to the Federal Funds Rate plus the Applicable Margin plus
0.25%.
2.07 Mandatory Prepayments or Pledge
a) If at any time the aggregate Market Value of all Securities
subject to all Advances is less than the aggregate Collateral Amount for all
such Advances (a "Collateral Deficit"), then Lender may, by written notice to
Borrower, require Borrower to transfer to Lender or its designee within 48 hours
following receipt of such written notice additional Securities reasonably
acceptable to Lender and/or cash ("Additional Collateral"), so that the cash and
aggregate Market Value of the Securities, including any such Additional
Collateral, will thereupon equal or exceed the aggregate Collateral Amount. For
purposes of this paragraph, United States guaranteed treasury securities, and
GNMA, FHLMC or FNMA guaranteed securities shall be deemed Securities reasonably
acceptable to Lender.
(b) If at any time the aggregate Market Value of all Securities
subject to all Advances exceeds the aggregate Collateral Amount for all such
Advances (a "Collateral Excess"), then Borrower may, by written notice to
Lender, require Lender to transfer to Borrower or its designee within 48 hours
following receipt of such written notice Securities and/or cash so that the cash
and aggregate Market Value of the Securities, after deduction of any such
Securities and/or cash so transferred, will thereupon not exceed the aggregate
Collateral Amount.
(c) Notice required pursuant to subsections (a) or (b) above may
be given by any means of telecopier or telegraphic transmission. A notice for
the payment or delivery in respect of a Collateral Deficit or Collateral Excess,
as the case may be, received before 1:00 p.m. on a Business Day, local time of
the party receiving the notice, must be met not later than 5:00 p.m. (New York
time) on the Business Day following the date on which notice was given. Any
notice given on a Business Date after 1:00 p.m., New York time of the party
receiving the notice, shall be met not later than 5:00 p.m., (New York time) on
the second Business Day following the date on which notice was given. The
failure of Lender or Borrower, on any one or more occasions, to exercise its
rights under subsections (a) or (b) of this Section, respectively, shall not
change or alter the terms and conditions to which this Loan Agreement is subject
or limit the right of the Lender or Borrower to do so at a later date. Lender
and Borrower agree that a failure or delay to exercise its rights under
subsections (a) or (b) of this Section shall not limit either party's rights
under this Loan Agreement or otherwise existing by law or in any way create
additional rights for the other party.
2.08 Substitution
(a) Subject to Section 2.08(b), Borrower may, upon fifteen (15)
Business Days written notice to Lender, substitute other Securities for any
pledged Securities, provided, however, that the fifteen (15) Business Days
written notice requirement shall not apply to any substitution made for the
purpose of satisfying a Collateral Deficit pursuant to Section 2.07(a). Such
substitution shall be made by (i) the transfer to the Lender of such substituted
Securities, and (ii) the transfer to Borrower or its designee of the Securities
requested for release. Upon substitution, the substituted Securities shall be
pledged to the Lender hereunder.
(b) Notwithstanding anything to the contrary in this Loan
Agreement, Borrower may not substitute other Securities for any Securities if
(i) Lender does not consent to such substitution, which
consent shall not be unreasonably withheld,
(ii) after taking into account such substitution, a
Collateral Deficit were to occur, and
(iii) such substitution would impact or adversely affect
Borrower's status as a "real estate investment
trust." Upon Lender's reasonable request,
Borrower shall deliver to Lender an opinion of
Xxxxxxx & Berlin or other nationally recognized
tax counsel that such substitution will not impact
or adversely affect Borrower's status as a "real
estate investment trust."
2.09 Optional Prepayments; Termination by Demand
(a) Borrower has the right in its sole discretion to prepay
Advances on a Reset Date or such other date that the Borrower and Lender may
agree upon prior to the Maturity Date set forth on the applicable Confirmation,
provided, Borrower (i) must prepay the full amount of an Advance and (ii) must
notify Lender in writing of such intent no later than five Business Days prior
to the related Reset Date. Such notice shall set forth the Reset Date and the
related Advance to be prepaid on such Reset Date. If such notice is given, the
amount specified in such notice will be due and payable on the date specified
therein, together with accrued interest to such date on the amount prepaid.
(b) In the case of Advances terminable upon demand, such demand
shall be made by Borrower or Lender by telephone or otherwise, no later than
10:00 a.m. on the Business Day prior to the day on which such termination will
be effective.
2.10 Requirements of Law
(a) If any Requirement of Law (other than with respect to any
amendment made to the Lender's certificate of incorporation and by-laws or other
organizational or governing documents) or any change in the interpretation or
application thereof or compliance by the Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall subject the Lender to any tax of any kind
whatsoever with respect to this Loan Agreement, the
Note or any Advance made by it (excluding net income
taxes) or change the basis of taxation of payments to
the Lender in respect thereof;
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory Advance or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances,
Advances or other extensions of credit by, or any other
acquisition of funds by, any office of the Lender which
is not otherwise included in the determination of the
LIBO Base Rate hereunder;
(iii) shall impose on the Lender any other condition;
and the result of any of the foregoing is to increase the cost to the Lender, by
an amount which the Lender deems to be material, of making, continuing or
maintaining any Advance or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay the Lender such
additional amount or amounts as will compensate the Lender for such increased
cost or reduced amount receivable.
(b) If the Lender shall have determined that the adoption of or
any change in any Requirement of Law (other than with respect to any amendment
made to the Lender's certificate of incorporation and by-laws or other
organizational or governing documents) regarding capital adequacy or in the
interpretation or application thereof or compliance by the Lender or any
corporation controlling the Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on the Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which the Lender
or such corporation (taking into consideration the Lender's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
the Lender to be material, then from time to time, the Borrower shall promptly
pay to the Lender such additional amount or amounts as will compensate the
Lender for such reduction.
(c) If the Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the Borrower of
the event by reason of which it has become so entitled. A certificate as to any
additional amounts payable pursuant to this subsection submitted by the Lender
to the Borrower shall be conclusive in the absence of manifest error.
2.11 Taxes
(a) All payments made by the Borrower under this Loan Agreement
and the Note shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Lender as a result of a present or
former connection between the Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from the
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Loan Agreement or any Note). If any such
non-excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Lender hereunder or under the Note, the amounts so payable to the
Lender shall be increased to the extent necessary to yield to the Lender (after
payment of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Loan Agreement;
provided, however, that the Borrower shall not be required to increase any such
amounts payable to the Lender that is not organized under the laws of the United
States of America or a state thereof if the Lender fails to comply with the
requirements of clause (b) of this Section. Whenever any Non-Excluded Taxes are
payable by the Borrower, as promptly as possible thereafter the Borrower shall
send to the Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the Borrower fails
to pay any Non-Excluded Taxes when due to the appropriate taxing authority or
fails to remit to the Lender the required receipts or other required documentary
evidence, the Borrower shall indemnify the Lender for any incremental taxes,
interest or penalties that may become payable by the Lender as a result of any
such failure. The agreements in this Section shall survive the termination of
this Loan Agreement and the payment of the Advances and all other amounts
payable hereunder.
(b) If the Lender hereunder (or an assignee or participant that
acquires an interest hereunder) that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i) deliver to the Borrower (A) two duly completed copies
of United States Internal Revenue Service Form 1001 or
4224, or successor applicable form, as the case may be,
and (B) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be;
(ii) deliver to the Borrower two further copies of any such
form or certification on or before the date that any
such form or certification expires or becomes obsolete
and after the occurrence of any event requiring a
change in the most recent form previously delivered by
it to the Borrower; and
(iii) obtain such extensions of time for filing and
complete such forms or certifications as may
reasonably be requested by the Borrower;
unless in any such case 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 such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower. Such Lender
shall certify (i) in the case of a Form 1001 or 4224, that it is entitled to
receive payments under this Loan Agreement without deduction or withholding of
any United States federal income taxes and (ii) in the case of a Form W-8 or
W-9, that it is entitled to an exemption from United States backup withholding
tax. Each Person that shall become a Lender or a participant hereof shall, upon
the effectiveness of the related transfer, be required to provide all of the
forms and statements required pursuant to this Section, provided that in the
case of a participant, such participant shall furnish all such required forms
and statements to the Lender from which the related participation shall have
been purchased.
2.12 Curtailment or Extension of Termination Date At the request of
the Borrower at least three months prior to the then current Termination Date,
the Lender shall renew the Facility until December 20, 2002, provided however,
that (a) the Lender, in its sole discretion, may terminate the facility on
December 20, 1998, and shall be required to enter into renewed agreements with
the same terms and conditions set forth herein, each for a period of 364 days
(or a portion thereof) thereafter, until finally terminated on the Termination
Date (as same may be extended hereunder); or (b) the Lender, in its sole
discretion, may terminate the facility on December 20, 2000, and shall be
required to enter into renewed agreements with the same terms and conditions set
forth herein, each for a period of 364 days (or a portion thereof) thereafter,
until finally terminated on the Termination Date (as same may be extended
hereunder).
SECTION 3 Payments; Computations; Etc.
3.01 Payments
(a) Except to the extent otherwise provided herein, all payments
of principal, interest and other amounts to be made by the Borrower under this
Loan Agreement and the Note, shall be made in Dollars, in immediately available
funds, without deduction, set-off or counterclaim, to the Lender at the
following account maintained by the Lender: German American Capital Corporation,
For the A/C of CRIIMI MAE INC, Attn: Xxxxxx Xxxxxxx, at The Bank of New York.,
Account #IOC 569, GSCS, DBC, ABA # 000000000 not later than 5:00 p.m., New York
City time, on the date on which such payment shall become due (and each such
payment made after such time on such due date shall be deemed to have been made
on the next succeeding Business Day). The Borrower acknowledges that it has no
rights of withdrawal from the foregoing account.
(b) Except to the extent otherwise expressly provided herein, if
the due date of any payment under this Loan Agreement or the Note would
otherwise fall on a day that 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.
3.02 Computations. Interest on the Advances shall be computed on the
basis of a 360-day year for the actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable.
3.03 Fees. In addition to other fees and expenses to be paid herein,
the Borrower shall pay the Lender:
a) a Facility Fee equal to 0.125% per year of the Maximum
Credit, payable each year on March 20. In the event that there occurs an Event
of Default under this Agreement, the Lender shall be entitled to retain and
and/or collect (in addition to Lender's other remedies) any Facility Fee
previously collected under the Agreement plus any Facility Fee owing for the
term remaining under the facility, as applicable.
b) a Non-use Fee equal to 0.125% per year of the Maximum
Credit, payable each year on March 20. Each month the Lender shall calculate
the average amount of the Facility utilized in the preceding month and shall
refund to the Borrower a portion of the Non-use Fee equal to one-twelfth of the
utilized portion of the Facility multiplied by 0.125%. In the event there is an
Event of Default, the Lender shall be entitled to retain and/or collect (in
addition to the Lender's other remedies) any Non-use Fee previously collected
under the facility, plus any Non-use Fee owing for the term remaining under the
Facility.
SECTION 4 Collateral Security
4.01 Collateral; Security Interest. The Securities shall be delivered
to, and held by the Lender.
Each of the following items of property is hereinafter referred to as the
"Collateral":
(i) Securities, Underlying Mortgage Loans, all related
servicing agreements, Pooling and Servicing Agreements,
servicing records, insurance, income, custodial
accounts, escrow accounts, and any other contract
rights, general intangibles and other assets relating
to such Underlying Mortgage Loans;
(ii) all "accounts", "chattel paper" and "general
intangibles" as defined in the Uniform Commercial Code
relating to or constituting any and all of the
foregoing; and
(iii) any and all replacements, substitutions,
distributions on or proceeds of any and all of the
foregoing.
(c) The Borrower hereby pledges to the Lender, and grants a
security interest in favor of the Lender in, all of the Borrower's right, title
and interest in, to and under the Collateral, whether now owned or hereafter
acquired, now existing or hereafter created and wherever located, to secure the
Secured Obligations. The Borrower agrees to xxxx its computer records and tapes
to evidence the interests granted to the Lender hereunder.
(d) Borrower, at its sole cost and expense, shall cause to be
filed in such locations as may be necessary to perfect and maintain perfection
and priority of the security interest in the Collateral granted hereby, UCC-1
financing statements and continuation statements (collectively, the "Filings"),
and shall forward copies of such Filings to Lender upon completion thereof.
(e) The Lender shall be permitted to receive all cash dividends
and distributions paid in respect of the Securities and shall apply same in
accordance with Section 2.04 hereof. Unless an Event of Default shall have
occurred and be continuing, Borrower shall be entitled to exercise all voting
and corporate rights with respect to the Securities, and Lender shall exercise
such rights on Borrower's behalf during the time in which Lender is the
registered holder of such Securities, provided, however, that no vote shall be
cast or corporate right exercised or other action taken which, in Lender's
reasonable judgment, would impair the Securities or which would be inconsistent
with or result in any violation of any provision of this Agreement.
(f) Borrower shall from time to time take such further actions as may be
reasonably requested by Lender to maintain and continue the perfection and
priority of the security interest granted hereby.
4.02 Further Documentation. At any time and from time to time, upon
the written request of the Lender, and at the sole expense of the Borrower, the
Borrower will promptly and duly execute and deliver, or will promptly cause to
be executed and delivered, such further instruments and documents and take such
further action as the Lender may reasonably request for the purpose of obtaining
or preserving the full benefits of this Loan Agreement and of the rights and
powers herein granted, including, without limitation, the filing of any
financing or continuation statements under the Uniform Commercial Code in effect
in any jurisdiction with respect to the Liens created hereby. The Borrower also
hereby authorizes the Lender to file any such financing or continuation
statement without the signature of the Borrower to the extent permitted by
applicable law. A carbon, photographic or other reproduction of this Loan
Agreement shall be sufficient as a financing statement for filing in any
jurisdiction.
4.03 Changes in Locations, Name, etc. The Borrower shall not (i)
change the location of its chief executive office/chief place of business from
that specified on the signature page hereof or (ii) change its name, identity or
corporate structure (or the equivalent) or change the location where it
maintains its records with respect to the Collateral unless it shall have given
the Lender at least 30 days prior written notice thereof and shall have
delivered to the Lender all Uniform Commercial Code financing statements and
amendments thereto as the Lender shall request and taken all other actions
deemed necessary by the Lender to continue its perfected status in the
Collateral with the same or better priority.
4.04 Lender's Appointment as Attorney-in-Fact.
(a) The Borrower hereby irrevocably constitutes and appoints the
Lender and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of the Borrower and in the name of the Borrower or in its
own name, from time to time in the Lender's discretion, for the purpose of
carrying out the terms of this Loan Agreement, to take any and all appropriate
action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Loan Agreement, and,
without limiting the generality of the foregoing, the Borrower hereby gives the
Lender the power and right, on behalf of the Borrower, without assent by, but
with notice to, the Borrower, if an Event of Default shall have occurred and be
continuing, to do the following:
(i) in the name of the Borrower or its own name, or
otherwise, to take possession of and endorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys due under any
mortgage insurance or with respect to any other Collateral and to file any claim
or to take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Lender for the purpose of collecting any and
all such moneys due under any such mortgage insurance or with respect to any
other Collateral whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed on
or threatened against the Collateral; and
(iii) (A) to direct any party liable for any payment
under any Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Lender or as the Lender shall direct; (B) to ask or
demand for, collect, receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (C) to sign and endorse any invoices,
assignments, verifications, notices and other documents in connection with any
of the Collateral; (D) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any thereof and to enforce any other right in respect
of any Collateral; (E) to defend any suit, action or proceeding brought against
the Borrower with respect to any Collateral; (F) to settle, compromise or adjust
any suit, action or proceeding described in clause (E) above and, in connection
therewith, to give such discharges or releases as the Lender may deem
appropriate; and (G) generally, to sell, transfer, pledge and make any agreement
with respect to or otherwise deal with any of the Collateral as fully and
completely as though the Lender were the absolute owner thereof for all
purposes, and to do, at the Lender's option and the Borrower's expense, at any
time, and from time to time, all acts and things which the Lender deems
necessary to protect, preserve or realize upon the Collateral and the Lender's
Liens thereon and to effect the intent of this Loan Agreement, all as fully and
effectively as the Borrower might do.
The Borrower hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.
(b) The powers conferred on the Lender are solely to protect the
Lender's interests in the Collateral and shall not impose any duty upon the
Lender to exercise any such powers. The Lender shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers,
and neither the Lender nor any of its officers, directors, or employees shall be
responsible to the Borrower for any act or failure to act hereunder, except for
its own gross negligence or willful misconduct.
4.05 Performance by Lender of Borrower's Obligations. If the Borrower
fails to perform or comply with any of its agreements contained in the Loan
Documents and the Lender may itself perform or comply, or otherwise cause
performance or compliance, with such agreement, the expenses of the Lender
incurred in connection with such performance or compliance, together with
interest thereon at a rate per annum equal to the Post-Default Rate, shall be
payable by the Borrower to the Lender on demand and shall constitute Secured
Obligations.
4.06 Proceeds. If an Event of Default shall occur and be continuing,
(a) all proceeds of Collateral received by the Borrower consisting of cash,
checks and other near-cash items shall be held by the Borrower in trust for the
Lender, segregated from other funds of the Borrower, and shall forthwith upon
receipt by the Borrower be turned over to the Lender in the exact form received
by the Borrower (duly endorsed by the Borrower to the Lender, if required) and
(b) any and all such proceeds received by the Lender (whether from the Borrower
or otherwise) may, in the sole discretion of the Lender, be held by the Lender
as collateral security for, and/or then or at any time thereafter may be applied
by the Lender against, the Secured Obligations (whether matured or unmatured),
such application to be in such order as the Lender shall elect. Any balance of
such proceeds remaining after the Secured Obligations shall have been paid in
full and this Loan Agreement shall have been terminated shall be paid over to
the Borrower or to whomsoever may be lawfully entitled to receive the same. For
purposes hereof, proceeds shall include, but not be limited to, all principal
and interest payments, all prepayments and payoffs, insurance claims,
condemnation awards, sale proceeds, real estate owned rents and any other income
and all other amounts received with respect to the Collateral.
4.07 Remedies.
(a) If an Event of Default shall occur and be continuing, the
Lender may exercise, in addition to all other rights and remedies granted to it
in this Loan Agreement and in any other instrument or agreement securing,
evidencing or relating to the Secured Obligations, all rights and remedies of a
secured party under the Uniform Commercial Code. Without limiting the
generality of the foregoing, the Lender without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon the Borrower or any other
Person (each and all of which demands, presentments, protests, advertisements
and notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell (on a servicing released basis, at the Lender's
option), lease, assign, give option or options to purchase, or otherwise dispose
of and deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels or as an entirety at public or private sale
or sales, at any exchange, broker's board or office of the Lender or elsewhere
upon such terms and conditions as it may deem advisable and at such prices as it
may deem best, for cash or on credit or for future delivery without assumption
of any credit risk. The Lender shall have the right upon any such public sale
or sales, and, to the extent permitted by law, upon any such private sale or
sales, to purchase the whole or any part of the Collateral so sold, free of any
right or equity of redemption in the Borrower, which right or equity is hereby
waived or released. Additionally, the Lender may, in its sole discretion elect,
in lieu of selling all or a portion of such Securities, give the Borrower credit
for such Securities in an amount equal to the Market Value of the Securities
against the aggregate unpaid principal balance and any other amounts owing by
the Borrower hereunder. The Borrower further agrees, at the Lender's request,
to assemble the Collateral and make it available to the Lender at places which
the Lender shall reasonably select, whether at the Borrower's premises or
elsewhere. The Lender shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred therein or incidental to
the care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Lender hereunder, including without limitation
reasonable attorneys' fees and disbursements, to the payment in whole or in part
of the Secured Obligations. To the extent permitted by applicable law, the
Borrower waives all claims, damages and demands it may acquire against the
Lender arising out of the exercise by the Lender of any of its rights hereunder,
other than those claims, damages and demands arising from gross negligence or
willful misconduct of the Lender. The proceeds of any disposition of Securities
shall be applied first to the costs and expenses incurred by the Lender in
connection with the Borrower's default; second to consequential damages,
including but not limited to costs of cover and/or related hedging transactions,
provided, however, that Lender shall act in good faith and in a timely manner to
mitigate damages to the extent practicable; third to the outstanding principal
balance and accrued interest; and fourth to any other outstanding obligation of
the Borrower to the Lender or its Affiliates. If any notice of a proposed sale
or other disposition of Collateral shall be required by law, such notice shall
be deemed reasonable and proper if given at least 10 days before such sale or
other disposition. The Borrower shall remain liable for any deficiency (plus
accrued interest thereon as contemplated pursuant to Section 2.04(b) hereof) if
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay the Secured Obligations and the fees and disbursements of any attorneys
employed by the Lender to collect such deficiency.
(b) The parties recognize that it may not be possible to
purchase or sell all of the Securities on a particular Business Day, or in a
transaction with the same purchaser, or in the same manner because the market
for such Securities may not be liquid. In view of the nature of the Securities,
the parties agree that liquidation of an Advance or the Securities does not
require a public purchase or sale and that a good faith private purchase or sale
shall be deemed to have been made in a commercially reasonable manner.
Accordingly, Lender may elect, in its sole discretion, the time and manner of
liquidating any Securities and nothing contained herein shall (A) obligate
Lender to liquidate any Securities on the occurrence of an Event of Default or
to liquidate all Securities in the same manner or on the same Business Day or
(B) constitute a waiver of any right or remedy of Lender. However, in
recognition of the parties' agreement that the Advances hereunder have been
entered into in consideration of and in reliance upon the fact that all Advances
hereunder constitute a single business and contractual relationship and that
each Advance has been entered into in consideration of the other Advances, the
parties further agree that Lender shall use its best efforts to liquidate all
Advances hereunder upon the occurrence of an Event of Default as quickly as is
prudently possible in the reasonable judgment of Lender.
(c) Borrower shall be liable to Lender for (A) the amount of all
expenses, including reasonable legal or other expenses incurred by Lender in
connection with or as a consequence of an Event of Default, and (B)
consequential damages including, without limitation, all costs incurred in
connection with hedging or covering transactions, provided, however, that Lender
shall act in good faith and in a timely manner to mitigate damages to the extent
practicable.
(d) Lender shall have all the rights and remedies provided
herein, provided by applicable federal, state, foreign, and local laws
(including, without limitation, the rights and remedies of a secured party under
the Uniform Commercial Code of the State of New York, to the extent that the
Uniform Commercial Code is applicable, and the right to offset any mutual debt
and claim), in equity, and under any other agreement between Lender and
Borrower.
(e) In addition to its rights hereunder, Lender shall have the
right to proceed against any assets of Borrower which may be in the possession
of Lender or its designee, including the right to liquidate such assets and to
set off the proceeds against monies owed by Borrower to Lender pursuant to this
Agreement. Lender may set off cash, the proceeds of the liquidation of the
Securities, any Collateral or its proceeds, and all other sums or obligations
owed by Borrower to Lender against all of Borrower's obligations to Lender,
whether under this Agreement, under an Advance, or under any other agreement
between the parties, or otherwise, whether or not such obligations are then due,
without prejudice to Lender's right to recover any deficiency. Any cash,
proceeds, or property in excess of any amounts due, or which Lender reasonably
believes may become due, to it from Borrower shall be returned to Borrower after
satisfaction of all obligations of Borrower to Lender.
4.08 Limitation on Duties Regarding Presentation of Collateral. The
Lender's duty with respect to the custody, safekeeping and physical preservation
of the Collateral in its possession, under Section 9-207 of the Uniform
Commercial Code or otherwise, shall be to deal with it in the same manner as the
Lender deals with similar property for its own account. Neither the Lender nor
any of its directors, officers or employees shall be liable for failure to
demand, collect or realize upon all or any part of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of the Borrower or otherwise.
4.09 Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
4.10 Release of Security Interest. Upon termination of this Loan
Agreement and repayment to the Lender of all Secured Obligations and the
performance of all obligations under the Loan Documents the Lender shall release
its security interest in any remaining Collateral; provided that if any payment,
or any part thereof, of any of the Secured Obligations is rescinded or must
otherwise be restored or returned by the Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or a
trustee or similar officer for, the Borrower or any substantial part of its
Property, or otherwise, this Loan Agreement, all rights hereunder and the Liens
created hereby shall continue to be effective, or be reinstated, as though such
payments had not been made.
SECTION 5 Conditions Precedent.
5.01 Initial Advance. The agreement of the Lender to make the initial
Advance requested to be made by it hereunder is subject to the satisfaction,
immediately prior to or concurrently with the making of such Advance, of the
following conditions precedent:
(a) Loan Agreement. The Lender shall have received this Loan
Agreement, executed and delivered by a duly authorized officer of the Borrower.
(b) Note. The Lender shall have received the Note, conforming
to the requirements hereof and executed by a duly authorized officer of the
Borrower.
(c) Filings, Registrations, Recordings. Any documents
(including, without limitation, financing statements) required to be filed,
registered or recorded in order to create, in favor of the Lender, a perfected,
first-priority security interest in the Collateral, subject to no Liens other
than those created hereunder, shall have been properly prepared and executed for
filing (including the applicable county(ies) if the Lender determines such
filings are necessary in its sole discretion), registration or recording in each
office in each jurisdiction in which such filings, registrations and
recordations are required to perfect such first-priority security interest.
(d) Corporate Proceedings. The Lender shall have received a
certificate of the Secretary or Assistant Secretary of the Borrower, dated as of
the date hereof, and certifying (A) that attached thereto is a true, complete
and correct copy of (i) the articles of incorporation of the Borrower, (ii) the
by-laws of the Borrower, and (iii) resolutions duly adopted by the Board of
Directors of the Borrower authorizing the execution, delivery and performance of
this Loan Agreement, the Notes and the other Loan Documents to which it is a
party, and the borrowings contemplated hereunder, and that such resolutions have
not been amended, modified, revoked or rescinded, and (B) as to the incumbency
and specimen signature of each officer executing any Loan Documents on behalf of
the Borrower and authorized to execute any Notice of Borrowing, and such
certificate and the resolutions attached thereto shall be in form and substance
satisfactory to the Lender.
(e) Good Standing Certificates. The Lender shall have received
copies of certificates evidencing the good standing of the Borrower, dated as of
a recent date, from the Secretary of State (or other appropriate authority) of
the State of Maryland and of each other jurisdiction where the ownership, lease
or operation of property, or the conduct of business, requires the Borrower to
qualify as a foreign corporation, except where the failure to qualify would not
have a Material Adverse Effect.
(f) Legal Opinions. The Lender shall have received the executed
legal opinions of the Borrower addressing the matters set forth in the form
attached hereto as Exhibit B, dated the initial Funding Date and otherwise in
form and substance acceptable to the Lender and covering such other matters
incident to the transactions contemplated by this Loan Agreement as the Lender
shall reasonably request.
(g) Fees and Expenses. The Lender shall have received all fees
and expenses required to be paid by the Borrower on or prior to the initial
Funding Date pursuant to Section 3.03.
(h) Financial Statements. The Lender shall have received the
financial statements referenced in Section 8(a)(xiii).
(i) Consents, Licenses, Approvals, etc. The Lender shall have
received copies certified by the Borrower of all consents, licenses and
approvals, if any, required in connection with the execution, delivery and
performance by the Borrower of, and the validity and enforceability of, the Loan
Documents, which consents, licenses and approvals shall be in full force and
effect.
(j) Other Documents. The Lender shall have received such other
documents as the Lender or its counsel may reasonably request.
5.02 Initial and Subsequent Advances. The making of each Advance to
the Borrower (including the initial Advance) on any Business Day is subject to
the satisfaction of the following further conditions precedent, both immediately
prior to the making of such Advance and also after giving effect thereto and to
the intended use thereof:
(a) No Default. No Default or Event of Default shall have
occurred and be continuing.
(b) Representations and Warranties. Each representation and
warranty made by the Borrower in Section 6 hereof and elsewhere in each of the
Loan Documents, shall be true and correct on and as of the date of the making of
such Advance with the same force and effect as if made on and as of 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). The Borrower shall also
be in compliance with all governmental licenses and authorizations and qualified
to do business and in good standing in all required jurisdictions where the
failure to be so qualified should reasonably be expected to have a Material
Adverse Effect.
(c) Notice of Borrowing and Pledge. The Lender shall have
received a Notice of Borrowing and Pledge in accordance with Section 2.03(a)
hereof, appropriately completed.
(d) Additional Matters. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection with the
transactions contemplated by this Loan Agreement and the other Loan Documents
shall be reasonably satisfactory in form and substance to the Lender, and the
Lender shall have received such other documents and legal opinions in respect of
any aspect or consequence of the transactions contemplated hereby or thereby as
it shall reasonably request.
(e) No Material Adverse Effect. There shall not have occurred
one or more events that, in the reasonable judgment of the Lender, constitutes
or should reasonably be expected to constitute a Material Adverse Effect.
(f) Reregistration of Securities. All Securities transferred
from Borrower to Lender
(i) shall be in suitable form for transfer or shall be
accompanied by duly executed instruments of transfer or
assignment in blank and such other documentation as the
party receiving possession may reasonable request,
(ii) shall be transferred on the book-entry system of a
Federal Reserve bank or the Depository Trust Company,
as applicable, or
(iii) shall be transferred by any other method mutually
acceptable to Borrower and Lender. As used herein
with respect to Securities, "transfer" is intended
to have the same meaning as when used in Section
8-313 of the New York Uniform Commercial Code or,
where applicable, in any federal regulation
governing transfers of Securities.
Notwithstanding and in addition to the foregoing, all transfers of
certificated securities from Borrower to Lender shall be effected by
physical delivery to Lender or its designee of the Securities, registered
in the name of Lender or with appropriate assignment documentation. No
Securities, whether certificated or uncertificated, shall remain in the
name, or possession, of Borrower or any of its agents or in any account in
the name of the Borrower or any of its agents (other than an account
maintained for Borrower on the books of Lender). In addition to the
foregoing, and as a condition to Lender's performance on each Funding Date,
Borrower shall deliver to Lender on or prior to each Funding Date, (A) a
copy of the executed Pooling and Servicing Agreement governing the
Securities and/or any supplements thereto, and the offering documents
related to the Securities, each certified by Borrower or the Trustee or
master servicer under such Pooling and Servicing Agreement as a true,
correct and complete copy of the original, and all ancillary documents
required to be delivered to the certificateholders under the Pooling and
Servicing Agreement, (B) an officer's certificate as may be requested by
Lender, (C) opinions of counsel as may be requested by Lender, (D) the
Securities in accordance with this Paragraph, (E) an irrevocable letter to
the Trustee, instructing the Trustee to remit all remittances required to
be distributed to the holder of the Securities under the Pooling and
Servicing Agreement to an account designated by Lender and (F) copies of
distribution statements delivered to the Trustee for two months prior to
the month in which the related Funding Date occurs, if any, certified by
the applicable servicer or master servicer as true and correct.
Notwithstanding the foregoing, in the event that the Borrower fails to
deliver the items set forth in (A) or (F) above on or prior to the Funding
Date, but the Borrower has otherwise complied with all other conditions
precedent to the Lender's performance and no Event of Default has occurred
and is continuing hereunder, the Lender shall nevertheless purchase the
Securities on the related Funding Date and the Borrower shall have thirty
(30) days following such Funding Date to cure such failure. Nothing set
forth herein shall be deemed a waiver of any of the Borrower's obligations
hereunder.
SECTION 6 Representations and Warranties.
(a) Each of Lender and Borrower represents and warrants to the other
that (i) it is duly authorized to execute and deliver this Agreement, to enter
into the transactions contemplated hereunder and to perform its obligations
hereunder and has taken all necessary action to authorize such execution,
delivery and performance; (ii) it will engage in such transactions as principal
(or, if agreed in writing in advance of any transaction by the other party
hereto, as agent for a disclosed principal); (iii) the person signing this
Agreement on its behalf is duly authorized to do so on its behalf (or on behalf
of any such disclosed principal); (iv) no approval, consent or authorization of
the transactions contemplated by this Agreement from any federal, state, or
local regulatory authority having jurisdiction over it is required or, if
required, such approval, consent or authorization has been or will, prior to the
initial Funding Date, be obtained; (v) the execution, delivery, and performance
of this Agreement and the transactions hereunder will not violate any law,
regulation, order, judgment, decree, ordinance, charter, by-law, or rule
applicable to it or its property or constitute a default (or an event which,
with notice or lapse of time, or both would constitute a default) under or
result in a breach of any agreement or other instrument by which it is bound or
by which any of its assets are affected; (vi) it has received approval and
authorization to enter into this Agreement and each and every transaction
actually entered into hereunder pursuant to its internal policies and
procedures; and (vii) neither this Agreement nor any transaction pursuant hereto
are entered into in contemplation of insolvency or with intent to hinder, delay
or defraud any creditor.
(b) The Borrower represents and warrants to the Lender that as of the
Funding Date for each Advance and as of the date of this Agreement and any
transaction hereunder and at all times while this Agreement and any Advance
thereunder is outstanding:
(i) Organization. The Borrower is duly organized, validly
existing and in good standing under the laws and regulations of the state of
Borrower's organization and is duly licensed, qualified, and in good standing in
every state where such licensing or qualification is necessary for the
transaction of Borrower's business.
(ii) No Litigation. There is no action, suit, proceeding,
investigation, or arbitration pending or threatened against the Borrower, which
may result in any material adverse change in the business, operations, financial
condition, properties, or assets of the Borrower, or which may have an adverse
effect on the validity of this Agreement or the Security or any action taken or
to be taken in connection with the obligations of the Borrower contemplated
herein.
(iii) No Broker. The Borrower has not dealt with any broker,
investment banker, agent, or other person, except for the Lender, who may be
entitled to any commission or compensation in connection with the sale of
Security pursuant to this Agreement.
(iv) Good Title to Collateral. Security shall be free and clear
of any lien, encumbrance or impediment to transfer, and Borrower has good, valid
and marketable title or right to sell and transfer such Security to Lender and
upon transfer of such Security to Lender, Lender shall (A) be the owner of such
Securities free of any adverse claim and (B) obtain a valid, perfected first
priority security interest in such Securities.
(v) Unencumbered Assets. Borrower shall maintain cash, cash
equivalents and other assets acceptable to Lender in its sole discretion
(the value of which shall be determined by Lender in its sole discretion)
equal to $5,000,000 or more. For purposes of the foregoing sentence, the
term "cash equivalents" shall include amounts available under lines of
credit (which lines of credit shall in no event exceed $30,000,000 in the
aggregate), and the term "other assets acceptable to the Lender in its sole
discretion" shall include the unencumbered common stock of CRI Liquidating
REIT, Inc. owned and held by Borrower, but shall exclude any hedge
contracts owned by Borrower.
(vi) Selection Process. The Securities were selected from among
the outstanding Securities in the Borrower's portfolio as to which the
representations and warranties set forth in this Agreement could be made and
such selection was not made in a manner so as to affect adversely the interests
of the Lender.
(c) On the Funding Date for any Advance, Lender and Borrower shall
each be deemed to have made all the foregoing representations, as applicable,
with respect to itself as of such Funding Date.
SECTION 7 Covenants of the Borrower. The Borrower covenants and
agrees with the Lender that, so long as any Advance is outstanding and until the
later to occur of the payment in full of all Secured Obligations and the
termination of this Loan Agreement:
(a) Borrower covenants that it will promptly notify Lender
of any material adverse change in its business operations and/or financial
condition, provided, however, that nothing in this Section 7 shall relieve
Borrower of its obligations pursuant to Section 6(b)(v) or pursuant to any other
Section of this Agreement.
(b) Borrower shall provide Lender with copies of such
documentation as Lender may reasonably request evidencing the truthfulness of
the representations set forth in Section 6(b), including but not limited to
resolutions evidencing the approval of this Agreement by Borrower's board of
directors or loan committee, and copies of the minutes of the meetings of
Borrower's board of directors or loan committee at which this Agreement and the
transactions contemplated by this Agreement were approved.
(c) Borrower shall, at Lender's request, take all action
necessary to ensure that Lender will have a first priority security interest in
the Securities.
(d) Borrower covenants that it will not create, incur or
permit to exist any lien, encumbrance or security interest in or on any of the
Collateral without the prior express written consent of Lender.
(e) Borrower shall notify Lender as soon as possible, but
in no event later than three (3) Business Days after obtaining actual knowledge
thereof, if any event has occurred that constitutes an Event of Default with
respect to Borrower or any event that with the giving of notice or lapse of
time, or both, would become an Event of Default with respect to Borrower.
(f) Any Pooling and Servicing Agreement shall not have been
amended or supplemented with respect to any of the Securities without the prior
written approval of Lender, except to the extent that Borrower's consent or
assent is not required to amend or supplement same.
(g) The Borrower shall, at all times that this Agreement is
in effect or any amounts are owing by the Borrower hereunder, comply in all
respects with all provisions of each instrument, agreement or other document
evidencing or governing any indebtedness of the Borrower or any of its
Affiliates, including without limitation, any affirmative or negative covenants
set forth therein, and all of such affirmative and negative covenants are hereby
(to the extent not otherwise in all material respects set forth in this
Agreement) incorporated herein as if set forth herein in full.
(g) The Borrower covenants that it will not take any action which would
directly or indirectly impair or adversely affect the Lender's title to or the
value of the Security; or
(h) The Borrower covenants that it will not pledge, assign,
convey, grant, bargain, sell, set over, deliver or otherwise transfer any
interest in the Security to any person not a party to this Agreement nor will
the Borrower create, incur or permit to exist any lien, encumbrance or security
interest in or on the Security except as described in Section 4 of this Loan
Agreement.
(i) The Borrower covenants that it will at all times
maintain its status as a qualified "REIT" and will take all actions necessary
under the Code to maintain such status.
SECTION 8 Events of Default.
(a) Each of the following events shall constitute an event of default
(an "Event of Default") hereunder:
(i) Borrower or Lender fails to satisfy or perform any material
obligation or covenant under this Loan Agreement, other than the covenant set
forth in Section 7(b);
(ii) Borrower fails to satisfy or perform the covenant set forth
in Section 7(b) within thirty (30) days after Lender gives Borrower written
notice of such failure;
(iii) any representation made by Borrower or Lender, other
than the representation set forth in Section 6(b)(v), shall have been incorrect
or untrue in any material respect when made or repeated or deemed to have been
made or repeated;
(iv) Borrower fails to cure any breach of the representation set
forth in Section 6(b)(v) within five (5) days after Lender gives Borrower
written notice of such breach.
(v) an Act of Insolvency occurs with respect to Lender or
Borrower;
(vi) Lender or Borrower shall admit its inability to, or its
intention not to, perform any of its obligations hereunder;
(vii) any governmental, regulatory, or self-regulatory
authority takes any action to remove, limit, restrict, suspend or terminate the
rights, privileges, or operations of the Borrower or any of its Affiliates,
including suspension as an issuer or lender of mortgage loans, which suspension
has a Material Adverse Effect on the ordinary business operations of Borrower or
Borrower's Affiliate, and which continues for more than 24 hours;
(viii) Borrower or any of its Affiliates dissolves, merges or
consolidates with another entity unless it is the surviving party, or sells,
transfers, or otherwise disposes of a material portion of its business or
assets, provided, however, that a merger shall not constitute an Event of
Default if Borrower obtains the prior written consent of the Lender; Lender
dissolves, merges or consolidates with another entity unless it is the surviving
party, or sells, transfers, or otherwise disposes of a material portion of its
business or assets, provided, however, that such action shall not constitute an
Event of Default if any surviving entity legally bound hereunder has the ability
to perform the obligations set forth in this Loan Agreement;
(ix) Lender, in its good faith judgment, has reasonable cause to
believe that
(A) there has been a material adverse change in the
business, operations, corporate structure or financial
condition, creditworthiness or prospects of the
Borrower or any Affiliate;
(B) Borrower will not meet any of its obligations under
this Loan Agreement, or any other agreement between the
parties; or
(C) a material adverse change in the financial or legal
condition of Borrower may occur due to the pendency or
threatened pendency of a material legal action against
Borrower or any of its Affiliates, and Borrower fails
to provide Lender with adequate assurances (including
without limitation performance guarantees), within 24
hours of a written request therefor, of its ability to
perform its obligations hereunder or under any other
agreement between the parties;
(D) any act, event, or circumstance has occurred which,
would have a material adverse impact on (1) the
characterization, convertibility, marketability,
liquidity or value of any Security, or (2) the
economic, political or financial stability of the
United States;
(x) Except with respect to Borrower's obligation under Section
3.01, Borrower or any of its Affiliates shall fail to pay when due (including
any grace period provided under the applicable documents) any amount in excess
of $100,000 in respect of indebtedness for money borrowed or for the deferred
purchase price of property created, issued, guaranteed, incurred or assumed by
any of them, or any other event shall occur or any condition shall exist in
respect of any such indebtedness the effect of which is to cause (or permit any
holder thereof or a trustee to cause) such indebtedness to become due prior to
its stated maturity;
(xi) Borrower shall fail to pay within five (5) Business Days of
each Payment Date any and all amounts payable pursuant to Section 3.01;
(xii) Borrower or any of its Affiliates shall default or fail
to perform under any note, indenture, loan agreement, guaranty, swap agreement
or any other contract, agreement or transaction to which it is a party, which
default (A) involves the failure to pay a matured obligation in excess of
$100,000, or (B) permits the acceleration of the maturity of obligations by any
other party to or beneficiary of such note, indenture, loan agreement, guaranty,
swap agreement or other contract agreement or transaction, or Borrower or any of
its Affiliates shall breach any covenant or condition, shall fail to perform,
admit its inability to perform or state its intention not to perform its
obligations hereunder or in respect of any repurchase agreement, reverse
repurchase agreement, securities contract or derivative transaction with any
party provided, however, that any such default, failure to perform or breach
shall not constitute an Event of Default if Borrower or any of its Affiliates
cures such default, failure to perform or breach, as the case may be, within the
grace period, if any, provided under the applicable agreement;
(xiii) Borrower fails to provide quarterly unaudited and
annual audited financial statements within 50 and 95 days, respectively, after
the date on which such period ends, or fails to deliver in a timely manner such
financial or other information as Lender may from time to time reasonably
request, in either case, within five (5) days after Lender gives Borrower
written notice of such failure;
(xiv) Subject to Section 8(a)(xv) Borrower's ratio of
consolidated total liabilities (excluding payables in the normal course of
business) to consolidated shareholders' equity (both computed in accordance with
GAAP) exceeds five to one (5 to 1);
(xv) Borrower pledges, directly or indirectly, hypothecates or
encumbers any of its assets or engages in repurchase transactions or similar
transactions with any of its assets (excluding (i) assets already pledged under
existing facilities, (ii) any assets required to be pledged for purposes of
collateral maintenance under such facilities, (iii) subordinated debt securities
subject to master repurchase agreements or other substantially similar financing
facilities secured by like collateral with financial institutions provided that
the aggregate indebtedness pursuant to such repurchase agreements or other
similar financing facilities shall not exceed $700,000,000 and provided that the
pledge of any other assets of Borrower pursuant to such repurchase agreements or
similar financing facilities shall not cause an Event of Default hereunder (iv)
Mortgage Warehouse Debt; (v) CMO Match Funded Non-Recourse Debt (vi) assets
pledged by Borrower or its affiliates to secure debt not in excess of $9,200,000
to Signet/Maryland, its successors or assigns, and (vii) pledge of a promissory
note from C.R.I., Inc. in the approximate amount of $5,200,000 to secure certain
deferred compensation arrangements) before notification to and written approval
by Lender, which approval shall not be unreasonably withheld;
(xvi) Borrower fails to maintain consolidated shareholders
equity (computed in accordance with GAAP) of at least $125,000,000 (one hundred
and twenty five million dollars);
(xvii) Borrower incurs three (3) consecutive quarters of
consolidated net losses on either a GAAP or tax basis;
(xviii) Borrower fails to maintain interest rate xxxxxx, reasonably acceptable
to Lender, on at least 75% of its floating rate liabilities;
(xix) Borrower fails to promptly certify at Lender's request
that no Event of Default has occurred or is continuing at the time of the
certification, provided, however, that such certification shall be made in any
event by Borrower no later than fifty days following the end of each calendar
quarter for the first three calendar quarters of the year and no later than
ninety-five days following the end of the last calendar quarter of the year;
(xx) A judgment by any competent court in the United States of America for the
payment of money in an amount of at least $100,000 is rendered against the
Borrower, and the same remains undischarged or unpaid for a period of thirty
(30) days during which execution of such judgment is not effectively stayed;
(xxi) This Loan Agreement shall for any reason cease to
create a valid first priority security interest in favor of Lender in any of the
Collateral purported to be covered hereby;
(xxii) Any change or development involving a prospective
change in taxation or other applicable law or regulation or interpretation
thereof in the United States directly affecting the Collateral or the
consequences of the Lender owning, or holding a security interest in, the
Collateral; the imposition of exchange controls by the United States, that
directly affects the Collateral or the consequences of the Lender owning, or
holding a security interest in, the Collateral; or the imposition of exchange
controls by the United States, that directly affects the financial markets of
the United States, and makes it, in the sole judgment of the Lender, inadvisable
or impracticable to enter into transactions hereunder with the Securities as
Collateral.
(b) In making a determination as to whether an Event of Default has
occurred, the Lender shall be entitled to rely on reports published or broadcast
by media sources believed by the Lender to be generally reliable and on
information provided to it by any other sources believed by it to be generally
reliable, provided that the Lender reasonably and in good faith believes such
information to be accurate and has taken such steps as may be reasonable in the
circumstances to attempt to verify such information.
SECTION 9 Remedies Upon Default.
(a) Upon the occurrence of one or more Events of Default other than
those referred to in Sections 8(a)(v), and in addition to the remedies provided
in Section 4.07 hereof and otherwise provided in this Loan Agreement, the Lender
may immediately declare the principal amount of the Advances then outstanding
under the Note to be immediately due and payable, together with all interest
thereon and fees and expenses accruing under this Loan Agreement. Upon the
occurrence of an Event of Default referred to in Sections 8(a)(v), and in
addition to the remedies provided in Section 4.07 hereof and otherwise provided
in this Loan Agreement, such amounts shall immediately and automatically become
due and payable without any further action by any Person. Upon such declaration
or such automatic acceleration, the balance then outstanding on the Note shall
become immediately due and payable, without presentment, demand, protest or
other formalities of any kind, all of which are hereby expressly waived by the
Borrower.
(b) Upon the occurrence of one or more Events of Default, and in
addition to the remedies provided in Section 4.07 hereof and otherwise provided
in this Loan Agreement, the Lender shall have the right to obtain all files of
the Borrower relating to the Collateral and all documents relating to the
Collateral which are then or may thereafter come in to the possession of the
Borrower or any third party acting for the Borrower and the Borrower shall
deliver to the Lender such assignments as the Lender shall request. The Lender
shall be entitled to specific performance of all agreements of the Borrower
contained in this Loan Agreement.
SECTION 10 No Duty of Lender. The powers conferred on the Lender
hereunder are solely to protect the Lender's interests in the Collateral and
shall not impose any duty upon it to exercise any such powers. The Lender shall
be accountable only for amounts that it actually receives as a result of the
exercise of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to the Borrower for any act or failure
to act hereunder, except for its or their own gross negligence or willful
misconduct.
SECTION 11 Miscellaneous.
11.01 Waiver. No failure on the part of the Lender to exercise
and no delay in exercising, and no course of dealing with respect to, any right,
power or privilege under any Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or privilege under
any Loan Document 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 as otherwise expressly permitted by this
Loan Agreement, all notices, requests and other communications provided for
herein (including without limitation any modifications of, or waivers, requests
or consents under, this Loan Agreement) shall be given or made in writing
(including without limitation by telex or telecopy) delivered to the intended
recipient at the "Address for Notices" specified below its name on the signature
pages hereof or thereof); or, as to any party, at such other address as shall be
designated by such party in a written notice to each other party. Except as
otherwise provided in this Loan Agreement and except for notices given under
Section 2 (which shall be effective only on receipt), all such communications
shall be deemed to have been duly given when transmitted by telex or telecopy or
personally delivered or, in the case of a mailed notice, upon receipt, in each
case given or addressed as aforesaid. Lender shall be authorized to accept
orders and take any other action affecting any accounts of the Borrower in
response to instructions given in writing or orally by telephone or otherwise by
any person set forth in Exhibit E hereto, and the Borrower shall indemnify
Lender, defend, and hold Lender harmless from and against any and all
liabilities, losses, damages, costs, and expenses of any nature arising out of
or in connection with any action taken by Lender in response to such
instructions received or reasonably believed to have been received from the
Borrower. From time to time, Borrower may, by delivering to Lender a revised
exhibit, change the information previously given pursuant to this Section, but
the Lender shall be entitled to rely conclusively on the current exhibit until
receipt of the superseding exhibit.
11.03 Indemnification and Expenses.
(a) The Borrower agrees to hold the Lender and each of its officers,
directors, agents and employees (each, an "Indemnified Party") harmless from and
indemnify each Indemnified Party against all liabilities, losses, damages,
judgments, costs and expenses of any kind which may be imposed on, incurred by
or asserted against such Indemnified Party in any suit, action, claim or
proceeding relating to or arising out of this Loan Agreement, the Note, any
other Loan Document or any transaction contemplated hereby or thereby, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, this Loan Agreement, the Note, any other Loan Document or any
transaction contemplated hereby or thereby, except, in each case, to the extent
arising from such Indemnified Party's gross negligence or willful misconduct.
In any suit, proceeding or action brought by the Lender in connection with any
Securities for any sum owing thereunder, or to enforce any provisions of any
such Security, the Borrower will save, indemnify and hold the Lender harmless
from and against all expense, loss or damage suffered by reason of any defense,
set-off, counterclaim, recoupment or reduction or liability whatsoever of the
account debtor or obligor thereunder, arising out of a breach by the Borrower of
any obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such account debtor or obligor or
its successors from the Borrower. The Borrower also agrees to reimburse the
Lender as and when billed by the Lender for all the Lender's costs and expenses
incurred in connection with the enforcement or the preservation of the Lender's
rights under this Loan Agreement, the Note, any other Loan Document or any
transaction contemplated hereby or thereby, including without limitation the
fees and disbursements of its counsel (including all fees and disbursements
incurred in any action or proceeding between the Borrower and an Indemnified
Party or between an Indemnified Party and any third party relating hereto). The
Borrower hereby acknowledges that, notwithstanding the fact that the Note is
secured by the Collateral, the obligation of the Borrower under the Note is a
recourse obligation of the Borrower.
(b) The Borrower agrees to pay as and when billed by the Lender all
of the out-of-pocket costs and expenses incurred by the Lender in connection
with any amendment, supplement or modification to this Loan Agreement, the Note,
any other Loan Document or any other documents prepared in connection herewith
or therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including without limitation (i) all the
reasonable fees, disbursements and expenses of counsel to the Lender and (ii)
all the due diligence, inspection, testing and review costs and expenses
incurred by the Lender with respect to Collateral under this Loan Agreement.
11.04 Amendments. Except as otherwise expressly provided in this
Loan Agreement, any provision of this Loan Agreement may be modified or
supplemented only by an instrument in writing signed by the Borrower and the
Lender and any provision of this Loan Agreement may be waived by the Lender.
11.05 Successors and Assigns. This Loan Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
11.06 Survival. The obligations of the Borrower under Section
11.03 hereof shall survive the repayment of the Advances and the termination of
this Loan Agreement. In addition, each representation and warranty made or
deemed to be made by a request for a borrowing herein or pursuant hereto shall
survive the making of such representation and warranty, and the Lender shall not
be deemed to have waived, by reason of making any Advance, any Default that may
arise because any such representation or warranty shall have proved to be false
or misleading, notwithstanding that the Lender may have had notice or knowledge
or reason to believe that such representation or warranty was false or
misleading at the time such Advance was made.
11.07 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 Loan
Agreement.
11.08 Counterparts. This Loan 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 Loan Agreement
by signing any such counterpart.
11.09 GOVERNING LAW; ETC. THIS LOAN AGREEMENT SHALL BE GOVERNED
BY THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE
(BUT WITH REFERENCE TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW,
WHICH BY ITS TERMS APPLIES TO THIS LOAN AGREEMENT), AND SHALL CONSTITUTE A
SECURITY AGREEMENT WITHIN THE MEANING OF THE UNIFORM COMMERCIAL CODE.
11.10 CONSENT TO JURISDICTION AND ARBITRATION. THE PARTIES
IRREVOCABLY AGREE TO SUBMIT TO THE PERSONAL JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, THE PARTIES IRREVOCABLY
WAIVING ANY OBJECTION THERETO. IF, FOR ANY REASON, FEDERAL JURISDICTION IS NOT
AVAILABLE, AND ONLY IF FEDERAL JURISDICTION IS NOT AVAILABLE, THE PARTIES
IRREVOCABLY AGREE TO SUBMIT TO THE PERSONAL JURISDICTION OF THE SUPREME COURT OF
THE STATE OF NEW YORK, THE PARTIES IRREVOCABLY WAIVING ANY OBJECTION THERETO.
NOTWITHSTANDING THE FOREGOING TWO SENTENCES, AT EITHER PARTY'S SOLE OPTION
EXERCISABLE AT ANY TIME NOT LATER THAN THIRTY (30) DAYS AFTER AN ACTION OR
PROCEEDING HAS BEEN COMMENCED, THE PARTIES AGREE THAT THE MATTER MAY BE
SUBMITTED TO BINDING ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL RULES OF THE
AMERICAN ARBITRATION ASSOCIATION THEN IN EFFECT IN THE STATE OF NEW YORK AND
JUDGMENT UPON ANY AWARD RENDERED BY THE ARBITRATOR MAY BE ENTERED IN ANY COURT
HAVING JURISDICTION THEREOF WITHIN THE CITY, COUNTY AND STATE OF NEW YORK,
PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL NOT AMEND, SUPPLEMENT, OR REFORM IN
ANY REGARD THIS LOAN AGREEMENT OR THE TERMS OF ANY CONFIRMATION, THE RIGHTS OR
OBLIGATIONS OF ANY PARTY HEREUNDER OR THEREUNDER, OR THE ENFORCEABILITY OF ANY
OF THE TERMS HEREOF OR THEREOF. ANY ARBITRATION SHALL BE CONDUCTED BEFORE A
SINGLE ARBITRATOR WHO SHALL BE REASONABLY FAMILIAR WITH LOAN TRANSACTIONS AND
THE SECONDARY MORTGAGE MARKET IN XXX XXXX, XXXXXX, XXX XXXXX XX XXX XXXX.
11.11 WAIVER OF JURY TRIAL. EACH OF THE BORROWER AND THE LENDER
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS LOAN AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
11.12 Hypothecation and Pledge of Collateral. The Lender shall
have free and unrestricted use of all Collateral and nothing in this Loan
Agreement shall preclude the Lender from engaging in repurchase transactions
with the Collateral or otherwise pledging, repledging, transferring,
hypothecating, or rehypothecating the Collateral. Nothing contained in this
Loan Agreement shall obligate the Lender to segregate any Collateral delivered
to the Lender by the Borrower.
11.13 Recording of Communications Lender and Borrower shall have
the right (but not the obligation) from time to time to make or cause to be made
tape recordings of communications between its employees and those of the other
party with respect to transactions, provided, however, such right to record
communications shall be limited to communications of employees taking place on
the trading floor of Lender and/or Borrower. Lender and Borrower consent to the
admissibility of such tape recordings in any court, arbitration, or other
proceedings. The parties agree that a duly authenticated transcript of such a
tape recording shall be deemed to be a writing conclusively evidencing the
parties' agreement.
11.14 Single Agreement Lender and Borrower acknowledge that, and
have entered hereinto and will enter into each transaction hereunder in
consideration of and in reliance upon the fact that, all transactions hereunder
constitute a single business and contractual relationship and that each has been
entered into in consideration of the other transactions. Accordingly, each of
Lender and Borrower agrees (i) to perform all of its obligations in respect of
each transaction hereunder, and that a default in the performance of any such
obligations shall constitute a default by it in respect of all transactions
hereunder, (ii) that each of them shall be entitled to set off claims and apply
property held by them in respect of any transaction against obligations owing to
them in respect of any other transactions hereunder and (iii) that payments,
deliveries, and other transfers made by either of them in respect of any
transaction shall be deemed to have been made in consideration of payments,
deliveries, and other transfers in respect of any other transactions hereunder,
and the obligations to make any such payments, deliveries, and other transfers
may be applied against each other and netted.
11.15 Entire Agreement; Severability This constitutes the entire
understanding between Lender and Borrower with respect to the subject matter it
covers and shall supersede any existing agreements between the parties
containing general terms and conditions for repurchase transactions involving
Securities. By acceptance of this Loan Agreement, Lender and Borrower
acknowledge that they have not made, and are not relying upon, any statements,
representations, promises or undertakings not contained in this Loan Agreement.
Each provision and agreement herein shall be treated as separate and independent
from any other provision or agreement herein and shall be enforceable
notwithstanding the unenforceability of any such other provision or agreement.
11.16 Assignability The rights and obligations of the parties
under this Loan Agreement and under any transaction shall not be assigned by
either party without the prior written consent of the other party, provided,
however, that Lender may assign its rights and obligations under this Loan
Agreement and/or under any transaction to an Affiliate that is subject to
Deutsche Bank AG's "declaration of backing", without the prior written consent
of the other party. Subject to the foregoing, this Loan Agreement and any
transactions shall be binding upon and shall inure to the benefit of the parties
and their respective successors and assigns. Nothing in this Loan Agreement
express or implied, shall give to any person, other than the parties to this
Loan Agreement and their successors hereunder, any benefit or any legal or
equitable right, power, remedy or claim under this Loan Agreement.
11.17 Intent The parties understand and intend that this Loan
Agreement and each transaction hereunder constitute a "securities contract" as
that term is defined in Section 741 of Title 11 of the United States Code, as
amended.
11.18 Disclosure Relating to Certain Federal Protections The
parties acknowledge that they have been advised that in the case of transactions
in which one of the parties is an "insured depository institution" as that term
is defined in Section 1831(a) of Title 12 of the United States Code, as amended,
funds held by the financial institution pursuant to a transaction hereunder are
not a deposit and therefore are not insured by the Federal Deposit Insurance
Corporation, the Savings Association Insurance Fund or the Bank Insurance Fund,
as applicable.
11.19 Netting If Lender and Borrower are "financial institutions"
as now or hereinafter defined in Section 4402 of Title 12 of the United States
Code ("Section 4402") and any rules or regulations promulgated thereunder:
(a) All amounts to be paid or advanced by one party to or
on behalf of the other under this Loan Agreement or any transaction hereunder
shall be deemed to be "payment obligations" and all amounts to be received by or
on behalf of one party from the other under this Loan Agreement or any
transaction hereunder shall be deemed to be "payment entitlements" within the
meaning of Section 4402, and this Loan Agreement shall be deemed to be a
"netting contract" as defined in Section 4402.
(b) The payment obligations and the payment entitlements of
the parties hereto pursuant to this Loan Agreement and any transaction hereunder
shall be netted as follows. In the event that either party (the "Defaulting
Party") shall fail to honor any payment obligation under this Loan Agreement or
any transaction hereunder, the other party (the "Nondefaulting Party") shall be
entitled to reduce the amount of any payment to be made by the Nondefaulting
Party to the Defaulting Party by the amount of the payment obligation that the
Defaulting Party failed to honor.
11.20 No Reliance Lender and Borrower each hereby represents and
warrants to the other that in connection with the negotiation of, the entering
into, and the performance under, the Loan Agreement and each transaction:
(a) It is not relying (for purposes of making any
investment decision or otherwise) upon any advice, counsel or representations
(whether written or oral) of the other party to the Loan Agreement, other than
the representations expressly set forth in the Loan Agreement;
(b) It has consulted with its own legal, regulatory, tax,
business, investment, financial and accounting advisors to the extent that it
has deemed necessary, and it has made its own investment, hedging and trading
decisions (including decisions regarding the suitability of any transaction)
based upon its own judgment and upon any advice from such advisors as it has
deemed necessary and not upon any view expressed by the other party to the Loan
Agreement;
(c) It is a sophisticated and informed institution that has
a full understanding of all the terms, conditions and risks (economic and
otherwise) of the Loan Agreement and each transaction and is capable of assuming
and willing to assume (financially and otherwise) those risks;
(d) It is entering into the Loan Agreement and each
transaction for the purposes of managing its borrowings or investments or
hedging its underlying assets or liabilities and not for purposes of
speculation;
(e) It is not acting as a fiduciary or financial,
investment or commodity trading advisor for the other party to the Loan
Agreement, and has not given the other party to the Loan Agreement (directly or
indirectly through any other person) any assurance, guaranty or representation
whatsoever as to the merits (either legal, regulatory, tax, business,
investment, financial accounting or otherwise) of the Loan Agreement or any
transaction hereunder.
11.21 Miscellaneous
(a) Time is of the essence under this Loan Agreement and
all transactions and all references to a time shall mean New York time in effect
on the date of the action unless otherwise expressly stated in this Loan
Agreement.
(b) If there is any conflict between the terms of a
Confirmation or a corrected Confirmation issued by the Lender and this Loan
Agreement, the Confirmation shall prevail.
(c) This Loan Agreement may be executed in counterparts,
each of which so executed shall be deemed to be an original, but all of such
counterparts shall together constitute but one and the same instrument.
(d) The headings in this Loan Agreement are for convenience of reference only
and shall not affect the interpretation or construction of this Loan Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be
duly executed and delivered as of the day and year first above written.
BORROWER
CRIIMI MAE INC.
By:_______________________
Title:
Address for Notices:
CRIIMI MAE Inc.
00000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Telecopier No.: 000 000-0000
Telephone No.: 000 000-0000
With a Copy to:
Attention: General Counsel
Telecopier No.:________________
Telephone No.:________________
LENDER
GERMAN AMERICAN CAPITAL CORPORATION
By:_______________________
Title:
By:_______________________
Title:
Address for Notices:
German American Capital Corporation
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mr. Xxxxxxxx Xxxxxx
Telecopier No.: 469-7973
Telephone No.: 000-0000
EXHIBIT A
[FORM OF PROMISSORY NOTE]
$500,000,000 March 31, 0000
Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, CRIIMI MAE INC., a Maryland corporation (the "Borrower"),
hereby promises to pay to the order of GERMAN AMERICAN CAPITAL CORPORATION a
Delaware corporation (the "Lender"), at the principal office of the Lender at 00
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, in lawful money of the United
States, and in immediately available funds, the principal sum of FIVE HUNDRED
MILLION DOLLARS ($500,000,000) (or such lesser amount as shall equal the
aggregate unpaid principal amount of the Advances made by the Lender to the
Borrower under the Loan Agreement as defined below), on the dates and in the
principal amounts provided in the Loan Agreement, and to pay interest on the
unpaid principal amount of each such Advance, at such office, in like money and
funds, for the period commencing on the date of such Advance until such Advance
shall be paid in full, at the rates per annum and on the dates provided in the
Loan Agreement.
The date, amount and interest rate of each Advance made by the Lender to the
Borrower, and each payment made on account of the principal and interest
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; provided, that the failure of the Lender to make any such
recordation or endorsement shall not affect the obligations of the Borrower to
make a payment when due of any amount owing under the Loan Agreement or
hereunder in respect of the Advances made by the Lender.
This Note is the Note referred to in the Master Loan and Security Agreement
dated as of March 31, 1998 (as amended, supplemented or otherwise modified and
in effect from time to time, the "Loan Agreement") between the Borrower and the
Lender, and evidences Advances made by the Lender thereunder. Terms used but
not defined in this Note have the respective meanings assigned to them in the
Loan Agreement.
The Borrower agrees to pay all the Lender's costs of collection and enforcement
(including attorneys' fees and disbursements of Lender's counsel) in respect of
this Note when incurred, including, without limitation, attorneys' fees through
appellate proceedings.
Notwithstanding the pledge of the Collateral, the Borrower hereby acknowledges,
admits and agrees that the Borrower's obligations under this Note are recourse
obligations of the Borrower to which the Borrower pledges its full faith and
credit.
The Borrower, and any indorsers hereof, (a) severally waive diligence,
presentment, protest and demand and also notice of protest, demand, dishonor and
nonpayments of this Note, (b) expressly agree that this Note, or any payment
hereunder, may be extended from time to time, and consent to the acceptance of
further Collateral, the release of any Collateral for this Note, the release of
any party primarily or secondarily liable hereon, and (c) expressly agree that
it will not be necessary for the Lender, in order to enforce payment of this
Note, to first institute or exhaust the Lender's remedies against the Borrower
or any other party liable hereon or against any Collateral for this Note. No
extension of time for the payment of this Note, or any installment hereof, made
by agreement by the Lender with any person now or hereafter liable for the
payment of this Note, shall affect the liability under this Note of the
Borrower, even if the Borrower is not a party to such agreement; provided,
however, that the Lender and the Borrower, by written agreement between them,
may affect the liability of the Borrower.
Any reference herein to the Lender shall be deemed to include and apply to every
subsequent holder of this Note. Reference is made to the Loan Agreement for
provisions concerning optional and mandatory prepayments, Collateral,
acceleration and other material terms affecting this Note.
Any enforcement action relating to this Note may be brought by motion for
summary judgment in lieu of a complaint pursuant to Section 3213 of the New York
Civil Practice Law and Rules. The Borrower hereby submits to New York
jurisdiction with respect to any action brought with respect to this Note and
waives any right with respect to the doctrine of forum non conveniens with
respect to such transactions.
This Note shall be governed by and construed under the laws of the State of New
York (without reference to choice of law doctrine but with reference to Section
5-1401 of the New York General Obligations Law, which by its terms applies to
this Note) whose laws the Borrower expressly elects to apply to this Note. The
Borrower agrees that any action or proceeding brought to enforce or arising out
of this Note may be commenced in the Supreme Court of the State of New York,
Borough of Manhattan, or in the District Court of the United States for the
Southern District of New York.
CRIIMI MAE INC.
By:_______________________
Name:
Title:
SCHEDULE OF ADVANCES
This Note evidences Advances made under the within-described Loan Agreement to
the Borrower, on the dates, in the principal amounts and bearing interest at the
rates set forth below, and subject to the payments and prepayments of principal
set forth below:
Date Made ____________________ Principal Amount of Advance __________________ Interest Rate ________________
Amount Paid or Prepaid _______ Unpaid Principal ______________ Amount ______________ Notation ____________
Made by _____________________________
EXHIBIT B
[FORM OF OPINION OF COUNSEL TO BORROWER]
(date)
German American Capital Corporation
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
You have requested [our] [my] opinion, as counsel to CRIIMI MAE INC., a Maryland
corporation (the "Borrower"), with respect to certain matters in connection with
that certain Master Loan and Security Agreement, dated as of March 31, 1998 (the
"Loan and Security Agreement"), by and between the Borrower and German American
Capital Corporation (the "Lender"), being executed contemporaneously with a
Promissory Note dated March 31, 1998 from the Borrower to the Lender (the
"Note"). Capitalized terms not otherwise defined herein have the meanings set
forth in the Loan and Security Agreement.
[We] [I] have examined the following documents:
1. the Loan and Security Agreement;
2. the Note;
3. unfiled copies of the financing statements listed on
Schedule 1 (collectively, the "Financing Statements")
naming the Borrower as Debtor and the Lender as Secured
Party and describing the Collateral (as defined in the
Loan and Security Agreement) as to which security
interests may be perfected by filing under the Uniform
Commercial Code of the States listed on Schedule 1 (the
"Filing Collateral"), which I understand will be filed
in the filing offices listed on Schedule 1 (the "Filing
Offices");
4. the reports listed on Schedule 2 as to UCC financing
statements (collectively, the "UCC Search Report"); and
5. such other documents, records and papers as we have
deemed necessary and relevant as a basis for this
opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I] have relied
upon the representations and warranties of the Borrower contained in the Loan
and Security Agreement. [We] [I] have assumed the authenticity of all documents
submitted to me as originals, the genuineness of all signatures, the legal
capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Borrower is a Maryland corporation duly organized, validly existing and
in good standing under the laws of Maryland and is qualified to transact
business in, and is in good standing under, the laws of the state of Maryland.
2. The Borrower has the corporate power to engage in the transactions
contemplated by the Loan and Security Agreement and the Note, and all requisite
corporate power, authority and legal right to execute and deliver the Loan and
Security Agreement, and the Note and observe the terms and conditions of such
instruments. The Borrower has all requisite corporate power to borrow under the
Loan and Security Agreement and to grant a security interest in the Collateral
pursuant to the Loan and Security Agreement.
3. The execution, delivery and performance by the Borrower of the Loan and
Security Agreement and the Note, and the borrowings by the Borrower and the
pledge of the Collateral under the Loan and Security Agreement have been duly
authorized by all necessary corporate action on the part of the Borrower. Each
of the Loan and Security Agreement and the Note have been executed and delivered
by the Borrower and are legal, valid and binding agreements enforceable in
accordance with their respective terms against the Borrower, subject to
bankruptcy laws and other similar laws of general application affecting rights
of creditors and subject to the application of the rules of equity, including
those respecting the availability of specific performance, none of which will
materially interfere with the realization of the benefits provided thereunder or
with the Lender's security interest in the Collateral.
4. No consent, approval, authorization or order of, and no filing or
registration with, any court or governmental agency or regulatory body is
required on the part of the Borrower for the execution, delivery or performance
by the Borrower of the Loan and Security Agreement and the Note or for the
borrowings by the Borrower under the Loan and Security Agreement or the granting
of a security interest to the Lender in the Collateral, pursuant to the Loan and
Security Agreement.
5. The execution, delivery and performance by the Borrower of, and the
consummation of the transactions contemplated by, the Loan and Security
Agreement and the Note do not and will not (a) violate any provision of the
Borrower's charter or by-laws, (b) violate any applicable law, rule or
regulation, (c) violate any order, writ, injunction or decree of any court or
governmental authority or agency or any arbitral award applicable to the
Borrower of which I have knowledge (after due inquiry) or (d) result in a breach
of, constitute a default under, require any consent under, or result in the
acceleration or required prepayment of any indebtedness pursuant to the terms
of, any agreement or instrument of which I have knowledge (after due inquiry) to
which the Borrower is a party or by which it is bound or to which it is subject,
or (except for the Liens created pursuant to the Loan and Security Agreement)
result in the creation or imposition of any Lien upon any Property of the
Borrower pursuant to the terms of any such agreement or instrument.
6. There is no action, suit, proceeding or investigation pending or, to the
best of [our] [my] knowledge, threatened against the Borrower which, in [our]
[my] judgment, either in any one instance or in the aggregate, would be
reasonably likely to result in any material adverse change in the properties,
business or financial condition, or prospects of the Borrower or in any material
impairment of the right or ability of the Borrower to carry on its business
substantially as now conducted or in any material liability on the part of the
Borrower or which would draw into question the validity of the Loan and Security
Agreement and the Note or the Mortgage Loans or of any action taken or to be
taken in connection with the transactions contemplated thereby, or which would
be reasonably likely to impair materially the ability of the Borrower to perform
under the terms of the Loan and Security Agreement, the Note, or the Collateral.
7. The Loan and Security Agreement is effective to create, in favor of the
Lender, a valid security interest under the Uniform Commercial Code in all of
the right, title and interest of the Borrower in, to and under the Collateral as
collateral security for the payment of the Secured Obligations (as defined in
the Loan and Security Agreement), except that (a) such security interests will
continue in Collateral after its sale, exchange or other disposition only to the
extent provided in Section 9-306 of the Uniform Commercial Code, (b) the
security interests in Collateral in which the Borrower acquires rights after the
commencement of a case under the Bankruptcy Code in respect of the Borrower may
be limited by Section 552 of the Bankruptcy Code.
8. (a) The filing of financing statements on Form UCC-1 naming the Lender as
"Secured Party" and the Borrower as "Debtor", and describing the Collateral, in
the jurisdictions and recording offices listed on Schedule 1 attached hereto
will create fully perfected security interests under the Uniform Commercial Code
in all right, title and interest of the Borrower in, to and under such
Collateral, which can be perfected by filing under the Uniform Commercial Code.
(b) The UCC Search Report sets forth the proper filing offices and the
proper debtors necessary to identify those Persons who have on file in the
jurisdictions listed on Schedule 1 financing statements covering the Filing
Collateral as of the dates and times specified on Schedule 2. Except for the
matters listed on Schedule 2, the UCC Search Report identifies no Person who has
filed in any Filing Office a financing statement describing the Filing
Collateral prior to the effective dates of the UCC Search Report.
Very truly yours,
EXHIBIT C
FORM OF NOTICE OF BORROWING AND PLEDGE
[insert date]
German American Capital Corporation
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxx
Notice of Borrowing and Pledge No.:_____________________
Ladies/Gentlemen:
Reference is made to the Master Loan and Security Agreement, dated as of March
31, 1998 (the "Loan Agreement"; capitalized terms used but not otherwise defined
herein shall have the meaning given them in the Loan Agreement), between CRIIMI
MAE Inc. (the "Borrower") and German American Capital Corporation (the
"Lender").
In accordance with Section 2.03(a) of the Loan Agreement, the undersigned
Borrower hereby requests that you, the Lender, make Advances to us in an
aggregate principal amount of $_________________ [insert requested Advance
amount] on ____________________ [insert requested Funding Date, which must be at
least [one (1)] Business Day following the date of the request], in connection
with which we shall pledge to you as Collateral the Securities set forth on the
Securities Schedule attached hereto.
The Borrower hereby certifies, as of such Funding Date, that:
(a) no Default or Event of Default has occurred and is continuing on the date
hereof nor will occur after giving effect to such Advance as a result of such
Advance;
(b) each of the representations and warranties made by the Borrower in or
pursuant to the Loan Documents is true and correct in all material respects on
and as of such date (in the case of the representations and warranties in
respect of Securities, solely with respect to Securities being included the
Borrowing Base on the Funding Date) as if made on and as of the date hereof (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
(c) the Borrower is in compliance with all governmental licenses and
authorizations and is qualified to do business and is in good standing in all
required jurisdictions.
Very truly yours,
CRIIMI MAE INC.
By:______________________________________
Name:
Title:
Schedule I
to Notice of Borrowing and Pledge
[SECURITIES PROPOSED TO BE PLEDGED TO LENDER ON FUNDING DATE]
[attach Securities Loan Schedule]
EXHIBIT D
[Form of Confirmation Letter]
(date)
CRIIMI MAE Inc.
Attention: Xxxxxxx X. Xxxxxx, Chief Financial Officer/Senior Vice President
00000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Confirmation No.:_____________________
Ladies/Gentlemen:
This letter confirms our oral agreement to make an Advance to you in exchange
for a pledge of the Securities listed in Appendix I hereto, pursuant to the
Master Loan and Security Agreement between German American Capital Corporation
and CRIIMI MAE Inc., dated as of March 31, 1998, (the "Agreement"), as follows:
Funding Date:
Securities to be Pledged: See Appendix I hereto.
Aggregate Principal Amount of Securities:
Advance Amount:
Applicable Margin:
Market Value of Securities:
Applicable Collateral Percentage:
LIBO Base Rate:
Names and addresses for communications:
Lender: Mr. Xxxxxxxx Xxxxxx
German American Capital Corporation
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
with legal matters to:
Xxxxxx X. Link, Jr., Esquire
Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Borrower: Xxxxxxx X. Xxxxxx
Chief Financial Officer/Senior Vice President
CRIIMI MAE Inc.
00000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Agreement.
GERMAN AMERICAN
CAPITAL CORPORATION
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
Agreed and Acknowledged:_________________________
CRIIMI MAE INC.
By: ____________________________
Name:
Title:
APPENDIX 1 to EXHIBIT D
PLEDGED SECURITIES
EXHIBIT E
AUTHORIZED REPRESENTATIVES OF BORROWER
Name Specimen Signature
Xxxxxxx X. Xxxxxxx
H. Xxxxxxx Xxxxxxxxxx
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxxx
Xxxxxxxxx Xxxxxxxx
