Exhibit 10(aa)
AMENDED AND RESTATED MORTGAGE LOAN ORIGINATION AND DISPOSITION
PROGRAM AGREEMENT
Made as of May 1, 1998
between
CITICORP REAL ESTATE, INC.
and
CRIIMI MAE INC.
2
TABLE OF CONTENTS
Page
ARTICLE I
Section 1.01 Definitions............................................ 1
ARTICLE II LOAN ORIGINATION
Section 2.01 Loan Sourcing and Underwriting by CRIIMI MAE........... 15
Section 2.02 CRE Underwriting; Mortgage Loan Pricing................ 15
Section 2.03 Loan Commitment, Rating Locking, Closing and Funding... 18
Section 2.04 Origination Fees....................................... 21
Section 2.05 Secondary Market Loan Acquisitions; CRE Originations... 21
Section 2.06 Delivery of Loan Documents and Preparation of Rating
Agency Materials....................................... 22
Section 2.07 Third Party Reports.................................... 23
Section 2.08 CRE's Ownership Interest............................... 23
ARTICLE III CRIIMI MAE's RECOURSE OBLIGATION
ARTICLE IV RESERVE ACCOUNTS
Section 4.01 Cash Collateral Reserve Account........................ 25
Section 4.02 Loan Pricing Reserve Account........................... 26
ARTICLE V AGGREGATION PERIOD
Section 5.01 Aggregation Period..................................... 29
Section 5.02 Hedging During Aggregation Period...................... 30
Section 5.03 Net Carry During Aggregation Period.................... 30
Section 5.04 Servicing of Mortgage Loans During Aggregation Period.. 31
ARTICLE VI CRIIMI MAE ACQUISITION OF MORTGAGE LOANS
Section 6.01 CRIIMI MAE'S Commitment to Purchase Mortgage Loans..... 31
Section 6.02 Sale of Mortgage Loans................................. 32
ARTICLE VII SECURITIZATION OF LOANS
Section 7.01 Securitization of Loans................................ 33
ARTICLE VIII DEFAULT
Section 8.01 Default by CRIIMI MAE; Rights and Remedies............. 35
ARTICLE IX REPRESENTATIONS AND WARRANTIES; DEFAULTS
Section 9.01 Representations and Warranties......................... 37
Section 9.02 Breach of Representation; Default...................... 37
Section 9.03 CRE's Representation and Warranties.................... 37
ARTICLE X MISCELLANEOUS
Section 10.01 Term of Agreement; Survival; Exclusivity.............. 38
Section 10.02 Indemnification....................................... 39
Section 10.03 Costs of Agreement Preparation........................ 39
Section 10.04 Notices............................................... 39
Section 10.05 No Joint Venture...................................... 41
Section 10.06 Actions Through Affiliates............................ 41
Section 10.07 CRE's Discretion...................................... 41
Section 10.08 Counterparts.......................................... 42
Section 10.09 Trial by Jury Waived.................................. 42
Section 10.10 Governing Law......................................... 42
Section 10.11 Amendments; Waivers................................... 42
Section 10.12 Press Releases........................................ 42
Section 10.13 Entire Agreement...................................... 43
Section 10.14 Successors and Assigns................................ 43
Section 10.15 Survival.............................................. 43
Section 10.16 Headings.............................................. 43
Section 10.17 General Interpretive Principles....................... 44
Section 10.18 Reproduction of Documents............................. 44
Section 10.19 Deduction of Amounts Owed to CRE...................... 45
Section 10.20 Obligation to Approve or Fund......................... 45
Section 10.21 Further Agreements.................................... 45
Signature......................................... 42
EXHIBITS
Exhibit A Eligible Loan Criteria
Exhibit B Representations and Warranties of CRIIMI MAE
Exhibit C Form of CRIIMI MAE Closing Certificate
Exhibit D Contents of Mortgage File
Exhibit E-1 Form of Commitment Letter
Exhibit E-2 Form of Commitment Letter
Exhibit F Sample Calculations
THIS AMENDED AND RESTATED MORTGAGE LOAN ORIGINATION AND DISPOSITION
PROGRAM AGREEMENT (this "Agreement") is made as of May 1, 1998 (the "Effective
Date") by and between CITICORP REAL ESTATE, INC., a Delaware corporation, having
an address at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and CRIIMI MAE
INC., a Maryland corporation, having an office at 00000 Xxxxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxx 00000.
RECITALS
A. CRE and CRIIMI MAE desire to develop a program for the
origination, funding and securitization of Mortgage Loans secured by multifamily
residential projects and commercial properties located throughout the United
States and meeting the requirements set forth herein in an amount not to exceed
$600,000,000 (the "Program").
B. CRE and CRIIMI MAE desire fully to amend and restate the
Amended and Restated Mortgage Loan Origination Program Agreement made as of the
30th day of September, 1997, previously executed by the parties, as amended (the
"Original Agreement").
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree that the Original Agreement is amended and restated as follows:
ARTICLE I
Section 1.01 DEFINITIONS. For purposes of this Agreement the following
capitalized terms shall have the respective meanings set forth below.
AFFILIATE: With respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct
the management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities (including, without limitation,
partnership interests), by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
AGREEMENT: This Amended and Restated Mortgage Loan
Origination and Disposition Program Agreement, including all amendments hereof
and exhibits, schedules and supplements hereto.
AGGREGATION PERIOD: As defined in Section 5.01.
ALTA: The American Land Title Association, or any successor
thereto.
APPRAISAL: An appraisal that conforms to FIRREA guidelines
and is performed by an "MAI" appraiser.
APPRAISED VALUE: With respect to any Mortgaged Property, the
value thereof as determined by the appraisal prepared at the time of origination
of the Mortgage Loan.
APPROVAL LETTER: A letter from CRE to CRIIMI MAE evidencing
CRE's approval of a Mortgage Loan to be funded under the Commitment.
APPROVED LOAN DOCUMENTATION: The forms of mortgage loan
documents, as such may be revised from time to time, that are acceptable to CRE,
CRIIMI MAE and the Rating Agencies and approved in advance by CRE.
ASSIGNMENT OF MORTGAGE: An assignment of the Mortgage, notice
of transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
give record notice of the assignment of the Mortgage to the assignee provided
for therein.
ASSIGNMENT OF LEASES AND RENTS: With respect to any Mortgaged
Property, any assignment of leases, rents and profits or similar instrument
executed by the Mortgagor,
assigning to the Mortgagee all of the income, rents and profits derived from the
ownership, operation, leasing or disposition of all or a portion of such
Mortgaged Property, in the form that was duly executed, acknowledged and
delivered, as amended, modified, renewed or extended through the date hereof and
from time to time hereafter.
BALLOON MORTGAGE LOAN: A Mortgage Loan that provided on the
date of origination (or modification) for an amortization schedule extending
beyond its maturity date.
BALLOON PAYMENT: With respect to any Balloon Mortgage Loan as
of any date of determination, the Monthly Payment payable on the maturity of
such Mortgage Loan.
BUILDING CONDITION REPORT: With respect to a particular
Mortgaged Property, a building condition report delivered to CRIIMI MAE,
together with any amendments or supplements thereto.
BUSINESS DAY: Any day other than a Saturday or Sunday, or a
day on which banking institutions in the State of New York or the State of
Maryland are authorized or obligated by law or executive order to remain closed.
CASH COLLATERAL RESERVE ACCOUNT: An account maintained at CRE,
in CRE's name, into which CRIIMI MAE shall deposit the Cash Collateral Reserve
Amount, as further described in Section 4.01.
CASH COLLATERAL RESERVE AMOUNT: The aggregate amount required
to be deposited by CRIIMI MAE into the Cash Collateral Reserve Account, as
provided in Section 4.01.
CERCLA: The Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 46 U.S.C. Section 9601 et seq., as
amended.
CLEAN AIR ACT: The Clean Air Act, 42 U.S.C. Section 7401
et seq.
CLEAN WATER ACT: The Clean Water Act, 33 U.S.C. Section 1251
et seq.
CLOSING DATE: With respect to each Mortgage Loan, the date on
which CRE funds such Mortgage Loan.
CLOSING STANDARDS: CRE's closing standards and guidelines for
the origination and closing of Mortgage Loans under the Program are contained in
the CitiMae Sellers'/Servicers' Guide (8/94), as amended from time to time upon
notice to CRIIMI MAE from CRE, except as expressly modified by this Agreement or
by the parties by separate agreement.
CMBS: Commercial mortgage backed securities.
CODE: The Internal Revenue Code of 1986, as amended, or any
successor statute.
COMMERCIAL PROPERTY: A single parcel of real property improved
by one or more retail, office, warehouse, industrial, self-storage, hotel or any
other income-producing improvements, as approved by CRE and specified in the
Mortgage Loan Schedule.
COMMITMENT LETTER: A commitment or approval letter to a
Mortgagor, issued by CRIIMI MAE, in the form attached hereto as Exhibit E-1 or
E-2 and as further described in Section 2.03(a).
COOPERATIVE MORTGAGE LOAN: A Mortgage Loan secured by an
underlying lien on a cooperative apartment building.
CRE: Citicorp Real Estate, Inc., its successors and assigns
(by any name known).
CRIIMI MAE: CRIIMI MAE Inc., its successors and permitted
assigns.
CRIIMI MAE CLOSING CERTIFICATE: With respect to any proposed
Mortgage Loan, a certificate substantially in the form of Exhibit C here, given
to CRIIMI MAE on or before the related Closing Date by the applicable loan
origination counsel.
CSI: Citicorp Securities, Inc., its successors and assigns
(by any name known).
DEBT SERVICE RATIO: With respect to any Mortgage Loan, as of
any date of calculation, the ratio specified as such and calculated in
accordance with the Underwriting Guidelines.
DEFAULTED MORTGAGE LOAN: A Mortgage Loan that is in monetary
or non-monetary default, as defined in the related Mortgage Loan documents, at
any time prior to Securitization thereof.
DUE DATE: With respect to any Mortgage Loan, the day of the
calendar month set forth in the related Mortgage Note on which each Monthly
Payment was scheduled to be first due, which shall be the first day of each
month.
DUE DILIGENCE FILE: With respect to any Mortgage Loan, a file
containing all credit and underwriting information and documentation and all
Third Party Reports.
EFFECTIVE DATE: May 1, 1998.
ELIGIBLE MORTGAGE LOAN: A Mortgage Loan that (a) complies with
all requirements set forth in the Eligible Mortgage Loan Criteria, or (b) does
not comply with one or more of the requirements set forth in the Eligible
Mortgage Loan Criteria, but any such non-compliance is disclosed by CRIIMI MAE
to CRE in a written exception report, identified as such, and specifically
approved by CRE in writing prior to issuance by CRIIMI MAE of a Commitment
Letter, which approval by CRE shall be subject to such additional conditions,
documentation, information and reserve requirements as CRE may require.
ELIGIBLE MORTGAGE LOAN CRITERIA: The criteria for Mortgage
Loans eligible for inclusion in the Program, as set forth in Exhibit A hereto,
as amended from time to time by CRE in its reasonable discretion and as modified
by CRE to reflect changes in Rating Agency requirements.
ENVIRONMENTAL ASSESSMENT OR ENVIRONMENTAL REPORT: A "Phase I
Assessment" (and a "Phase II Assessment", if necessary) conducted in accordance
with ASTM Standard E 1527-93 or any successor thereto published by ASTM
(formerly known as the American Society of Testing and Materials).
EVENT OF DEFAULT: Any one of the events enumerated in Section
8.01.
EXIT FEE: The fee to be paid by CRIIMI MAE to CRE with respect
to any Mortgage Loans sold by CRE hereunder (whether to CRIIMI MAE or to a third
party), other than (i) Mortgage Loans sold by CRE to CRIIMI MAE and included in
a Securitization, and (ii) Mortgage Loans sold solely because the Program
Termination Date has not been extended. Such fee shall be 37.5 basis points
multiplied by the aggregate outstanding principal balance of all of the Mortgage
Loans so sold.
FIXED RATE MORTGAGE LOAN: A Mortgage Loan as to which the
related Mortgage Note provides for a Mortgage Interest Rate that, as of the
Closing Date, remains fixed through the remaining term thereof.
GUARANTY: A guaranty in form and substance acceptable to CRE,
whereby CRIIMI MAE guaranties, for the benefit of CRE and CitiMae, Inc., payment
and performance of the Servicer's obligations under the Servicing Agreement.
HOLDBACK: A portion of the proceeds of any Mortgage Loan that
are funded at closing, but are to be held by CRIIMI MAE in an account acceptable
to, and for the benefit of, CRE, pursuant to an agreement providing that such
funds shall be released to the Mortgagor upon the satisfaction of conditions
specified in such agreement or used to pay down the Mortgage Note upon failure
to satisfy such conditions.
INDEPENDENT: When used with respect to any specified Person,
any such Person who (i) is in fact independent of CRIIMI MAE, the related
Mortgagor and any and all Affiliates
thereof, (ii) does not have any direct financial interest in or any material
indirect financial interest in any of CRIIMI MAE, the related Mortgagor or any
Affiliate thereof, and (iii) is not connected with CRIIMI MAE, the related
Mortgagor or any Affiliate thereof as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar functions;
PROVIDED, HOWEVER, that a Person shall not fail to be Independent of CRIIMI MAE,
the related Mortgagor or any Affiliate thereof merely because such Person is the
beneficial owner of 1% or less of any class of securities issued by CRIIMI MAE,
the related Mortgagor or any Affiliate thereof, as the case may be.
INSURANCE POLICY: With respect to any Mortgage Loan, any
hazard insurance policy, flood insurance policy, earthquake insurance policy,
hurricane insurance policy, title policy or other insurance policy that is
maintained from time to time in respect of such Mortgage Loan or the related
Mortgaged Property, which insurance policy complies with the Underwriting
Guidelines.
LOAN PRICING RESERVE ACCOUNT: With respect to any Mortgage
Loan, an account maintained at CRE, in CRE's name, as described in Section 4.02.
LOAN-TO-VALUE RATIO OR LTV: With respect to any Mortgage Loan,
the ratio of the principal balance of the Mortgage Loan to the Appraised Value
of the related Mortgaged Property.
MANAGEMENT AGREEMENT: With respect to each Mortgaged Property,
the agreement between the Manager and the related Mortgagor pursuant to which
the Manager operates and manages such Mortgaged Property as provided therein.
MANAGER: With respect to any Mortgage Loan and the related
Mortgaged Property, a management company that has entered into a Management
Agreement with the
related Mortgagor for the operation and management of such Mortgaged Property as
a Multifamily Property or a Commercial Property, as the case may be.
MARKET VALUE: With respect to any Mortgage Loan, as of any
date of determination, the value thereof taking into account (a) market
conditions (including rates, speeds and spreads) (b) the value of any hedge
transaction associated with such Mortgage Loan and (c) the value of the related
Loan Pricing Reserve Account, if any.
XXXX-TO-MARKET: As defined in Section 4.03.
XXXX-TO-MARKET RESERVE ACCOUNT: An account maintained at CRE,
in CRE's name, as described in Section 4.03.
MONTHLY PAYMENT: With respect to each Mortgage Loan, the
scheduled combined payment of principal and interest (including any Balloon
Payment) payable by a Mortgagor from time to time under the related Mortgage
Note, without regard to any acceleration of principal of such Mortgage Loan by
reason of default thereunder or any modification, waiver or amendment of such
Mortgage Loan granted or agreed to by CRIIMI MAE pursuant to this Agreement.
MORTGAGE: With respect to each Mortgage Loan, the mortgage(s),
deed(s) of trust or other instrument(s) securing the related Mortgage Note and
creating a lien on the related Mortgaged Property.
MORTGAGE FILE: The items pertaining to a particular Mortgage
Loan listed in Exhibit D hereto, and any additional documents required to be
added to the Mortgage File pursuant to this Agreement.
MORTGAGE INTEREST RATE: With respect to each Mortgage Loan,
the annual rate at which interest accrues thereon during the term thereof in
accordance with the provisions of the related Mortgage Note.
MORTGAGE LOAN: Each Mortgage Loan with respect to which
Origination Services are provided by CRIIMI MAE that is originated in the name
of CRE on the related Closing Date pursuant to this Agreement and the related
Commitment Letter and Approval Letter, is identified on the related Mortgage
Loan Schedule and is included in the Program.
MORTGAGE LOAN SCHEDULE: With respect to any Mortgage Loan, the
Underwriting Memorandum as amended or modified by agreement between CRE and
CRIIMI MAE prior to the Closing Date with respect thereto.
MORTGAGE NOTE: The original executed note(s) or other
evidence of the Mortgage Loan indebtedness of a Mortgagor.
MORTGAGED PROPERTY: With respect to each Mortgage Loan, all
property described in the related Mortgage, including the real property, all
improvements, fixtures, equipment and articles of personal property located on
such real property and all rents, issues, profits and income derived from the
operation of the real property.
MORTGAGEE: With respect to a Mortgage Loan, the mortgagee or
beneficiary named in the Mortgage and the successors and assigns of such
mortgagee or beneficiary, and the successors and assigns of such mortgagee or
beneficiary.
MORTGAGOR: The obligor or obligors on a Mortgage Note.
MORTGAGOR RESERVE PAYMENTS: As to any Mortgage Loan, any
payments made by the related Mortgagor pursuant to an agreement between CRE and
the related Mortgagor for the purpose of providing reserves for the costs
associated with repairs to and replacement of capital items, environmental costs
and lease rollover on the related Mortgaged Property.
MULTIFAMILY PROPERTY: A single parcel of real property
improved by one or more detached multifamily housing structures each comprising
five or more dwelling units, along with any related structures.
NET CARRY: As defined in Section 5.03.
NET CARRY RATE: With respect to any Mortgage Loan, as of any
date of determination, a rate per annum equal to the related Mortgage Interest
Rate then in effect minus (a) CRE's cost of funds, (b) CRE's hedging costs and
(c) the Servicing Fee Rate.
NET OPERATING INCOME: With respect to any Mortgaged Property,
for any twelve month period, the total operating revenues actually derived from
such Mortgaged Property during such period, minus the total fixed and variable
operating expenses incurred in respect of such Mortgaged Property during such
period other than (i) non-cash items such as depreciation and amortization, (ii)
capital expenditures and (iii) debt service on loans secured by the Mortgaged
Property.
OPINION OF COUNSEL: A written opinion of counsel for the
Person on behalf of whom the opinion is being given, acceptable to CRE in its
reasonable discretion.
ORIGINAL AGREEMENT: As defined in the Recitals.
ORIGINATION SERVICES: With respect to any Mortgage Loan, the
services provided by CRIIMI MAE in connection with the origination thereof,
which services shall include the following:
(i) sourcing and underwriting Mortgage Loans in a manner
consistent with the Underwriting Guidelines as they
relate thereto;
(ii) ordering any and all Third Party Reports that are
necessary or appropriate to underwrite the related
Mortgage Loan;
(iii) inspecting the Mortgaged Property prior to issuance
of a Commitment Letter;
(iv) furnishing to CRE all documentation, standard forms
and Third Party Reports necessary or appropriate to
the underwriting, origination and funding of the
related Mortgage Loan;
(v) closing the Mortgage Loan in the name of CRE in
accordance with the Closing Standards; and
(vi) performing all other services in connection with the
origination of the Mortgage Loan as specifically
provided herein or as reasonably requested by CRE.
ORIGINATION SERVICES STANDARD: The standard in accordance with
which CRIIMI MAE shall be obligated to provide Origination Services, which shall
be the standard of due care and diligence employed by prudent mortgage loan
originators in connection with mortgage loans of a type similar to the Mortgage
Loans.
PAR PRICE: As defined in Section 4.02.
PASS-THROUGH TRANSFER: The sale or transfer of some or all of
the Mortgage Loans to a trust to be formed as part of a publicly issued or
privately placed, rated or unrated mortgage pass-through transaction.
PERSON: An individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
PORTFOLIO: As of any date of determination, all Mortgage Loans
in the Program on such date, taken in the aggregate.
PORTFOLIO MARKET VALUE: As of any date of determination, the
aggregate Market Value of all Mortgage Loans in the Program and any unfunded
Mortgage Loan having an outstanding rate lock agreement plus any amounts in the
Xxxx-to-Market Reserve Account and the Pricing Reserve Account.
PREMIUM LOAN: A mortgage loan with respect to which the
mortgagee pays to the mortgagor consideration or "premium" at origination for
the mortgagor's acceptance of the mortgage loan.
PREPAYMENT PREMIUM: Any premium, consideration or fee paid or
payable, as the context requires, by a Mortgagor in connection with a Principal
Prepayment.
PRINCIPAL PREPAYMENT: Any payment of principal in full made
by the Mortgagor on a Mortgage Loan that is received in advance of its scheduled
Due Date.
PROGRAM: As defined in the Recitals.
PROGRAM PRICING MATRIX: The pricing matrix to be provided by
CRE to CRIIMI MAE from time to time with respect to the Mortgage Loans, which
pricing matrix shall be updated by CRE periodically, whenever changed, and
delivered to CRIIMI MAE whenever changed.
PROGRAM TERMINATION DATE: The date on which the Program
terminates, which shall be December 31, 1998.
PURCHASE PRICE: With respect to each Mortgage Loan purchased
by CRIIMI MAE hereunder, the purchase price with respect thereto, calculated as
provided in Section 6.01.
QUALIFIED INSURER: An insurance company or security or bonding
company qualified to write the related Insurance Policy in the relevant
jurisdiction and otherwise complying with the Insurance Requirements and
acceptable to the Rating Agencies.
RATING AGENCY: Each of Xxxxx'x Investors Service, Inc.,
Standard & Poor's Rating Services, Fitch IBCA, Inc. or Duff & Xxxxxx Credit
Rating Co., or any successor thereof, as selected by CRE in its sole discretion.
RECOURSE OBLIGATION: As defined in Article III.
REPRESENTATIONS AND WARRANTIES: The representations and
warranties, of CRIIMI MAE as set forth in Exhibit B hereto, as amended from time
to time by CRE as necessary or appropriate in the event of changes in Rating
Agency or investor requirements.
RESERVE ACCOUNT: Any of the Cash Collateral Reserve Account,
the Loan Pricing Reserve Account and the Xxxx-to-Market Reserve Account.
RESOURCE CONSERVATION AND RECOVERY ACT: The Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.
SECURITIZATION: A sale of some or all of the Mortgage Loans in
a rated Pass-Through Transfer as described in Section 7.01
SERVICER: CRIIMI MAE Services Limited Partnership or any
successor thereto.
SERVICING AGREEMENT: The CitiMae Commercial Servicer Contract,
effective as of July 22, 1996, between the Servicer and CitiMae, Inc. as agent
for CRE, as supplemented by the Supplemental Agreement, dated as of July 22,
1996, between CRE and the Servicer.
SERVICING FEE: With respect to each Mortgage Loan, the amount
of the fee to which the Servicer is entitled for servicing such Mortgage Loan
calculated at the Servicing Fee Rate in accordance with the Servicing Agreement.
SERVICING FEE RATE: With respect to each Mortgage Loan, the
rate per annum to be used in calculating the Servicing Fee for such Mortgage
Loan prior to Securitization thereof, which rate shall be 12.5 basis points.
THIRD PARTY REPORT: Any Appraisal, Building Condition Report,
Environmental Assessment or any other third party study, report or review
prepared in connection with the origination of a Mortgage Loan.
TOXIC SUBSTANCES CONTROL ACT: The Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq.
UNDERWRITING GUIDELINES: The CitiMae Underwriting Guidelines,
as amended from time to time upon notice to CRIIMI MAE from CRE. A copy of the
Underwriting Guidelines as in effect on the date hereof has been provided by CRE
to CRIIMI MAE.
WHOLE LOAN TRANSFER: The sale or transfer of some or all of
the ownership interest in the Mortgage Loans by CRE to one or more third parties
in a whole loan or participation format.
ARTICLE II
LOAN ORIGINATION
Section 2.01 LOAN SOURCING AND UNDERWRITING BY CRIIMI MAE. CRIIMI MAE shall
perform the Origination Services as set forth herein in accordance with the
Origination Standard. Commencing on or after the Effective Date, CRIIMI MAE
shall deliver to CRE for its consideration a comprehensive underwriting
memorandum for each Mortgage Loan that CRIIMI MAE proposes be included in the
Program. The form of underwriting memorandum must be pre-approved by CRE, shall
indicate in writing approval by CRIIMI MAE's Credit Committee and shall include
at a minimum: a description of the Mortgaged Property, a cap rate valuation, an
analysis of the historical and underwritten projected Mortgaged Property
operating performance, the Debt Service Ratio, rent roll and tenant information,
market information, maps, photographs, lease and sale comparables, and Mortgagor
credit history and an analysis of the Mortgagor's experience. The underwriting
memorandum must also disclose, in the form of an exception report (which report
is identified as such) any exception to the Underwriting Guidelines, the Closing
Standards, the Eligible Mortgage Loan Criteria and the Representations and
Warranties. In connection with the origination of each Mortgage Loan, CRIIMI
MAE, at its own or the Mortgagor's expense, shall engage or cause to be engaged,
third parties, acceptable to CRE, to appraise the related Mortgaged Property and
to conduct engineering and environmental reviews thereof, and to furnish Third
Party Reports with respect thereto in compliance with the requirements set forth
in Section 2.07.
Section 2.02 CRE UNDERWRITING; MORTGAGE LOAN PRICING.
(a) After receipt of the related underwriting memorandum
complying with Section 2.01, CRE may, in its sole discretion, either (x) notify
CRIIMI MAE that
CRE accepts or rejects the proposed Mortgage Loan submitted by CRIIMI MAE, or
(y) notify CRIIMI MAE that CRE requires (I) additional information or revisions
or (II) receipt and review of satisfactory Third Party Reports before it will
further evaluate the proposed Mortgage Loan, and shall notify CRIIMI MAE in
writing of its determination with respect thereto (i) not later than five (5)
Business Days after CRE's receipt of the related underwriting memorandum
(provided that CRE shall use reasonable efforts to notify CRIIMI MAE of such
determination within three (3) Business Days), or (ii) if CRE has notified
CRIIMI MAE that CRE requires (I) additional information or (II) revisions or
receipt and review of satisfactory Third Party Reports, not later than seven (7)
Business Days after CRE's receipt of either the additional information or
revisions or the satisfactory Third Party Reports, as the case may be, with
respect thereto. After CRE completes its initial underwriting, CRE shall
determine the subordination levels with respect to the Mortgage Loan in its
reasonable judgment. If and when CRE approves a Mortgage Loan, CRE shall issue
to CRIIMI MAE CRE's Approval Letter as set forth in Section 2.03. At any time
prior to issuance of its Approval Letter, CRE may in its sole discretion, for
any reason relating to the quality and/or value of such Mortgage Loan, as
determined by CRE in its discretion, reject the subject Mortgage Loan. CRE may,
in its discretion, review any Mortgage Loan to determine such Mortgage Loan's
compliance with the Eligible Mortgage Loan Criteria, the Underwriting
Guidelines, the Closing Standards, the Representations and Warranties and any
and all other requirements set forth herein, and may, in its sole discretion,
reject for funding any Mortgage Loan that is not in compliance with the
foregoing. In no event shall CRE accept for funding any Mortgage Loan if the
original principal balance thereof, when combined with the aggregate original
principal balance of all other Mortgage Loans funded by CRE under the Program,
would exceed $600,000,000 or would result in a violation of Section 2 of the
Eligible Mortgage Loan Criteria. With respect to any proposed
Mortgage Loan, CRE may, at its option, conduct its own inspection of the related
Mortgaged Property, and, if the original principal balance of such Mortgage Loan
is expected to exceed $10,000,000, CRIIMI MAE shall reimburse CRE for CRE's
reasonable out-of-pocket costs, not to exceed $3000 with respect to any
Mortgaged Property, with respect to such inspection.
(b) CRIIMI MAE shall quote prices to Mortgagors based upon the
most recent Program Pricing Matrix. The Program Pricing Matrix shall reflect
pricing (excluding any profit but including all CRE fees) for the Mortgage Loans
as determined by CRE in its sole discretion based upon the following:
SECURITIES TRANCHE SPREAD
------------------ ------
Investment grade CMBS market spreads and
premium for the Program, as
as determined by CRE in its
sole discretion.
Non-investment grade CMBS market spread, as
determined by CRE in its sole
discretion.
Interest only strip Margin over the interpolated
average life on U.S.
Treasury Securities of
underlying notional amount
of securities (assuming
spreads and speeds to be
determined by CRE in its
sole discretion).
The Par Price with respect to any Mortgage Loan having a term of ten (10) years
and an amortization schedule of twenty-five (25) or thirty (30) years shall be
20 basis points less than
the related Program Price Matrix percentage; the Par Price with respect to any
other types of Mortgage Loans shall be as set forth in the Program Pricing
Matrix or as otherwise prescribed by CRE in its discretion. It is understood and
agreed that CRE shall have no responsibility to CRIIMI MAE with respect to
CRIIMI MAE's making or failing to make a profit on any Mortgage Loan or Mortgage
Loans, and that CRE shall be entitled to all fees and other amounts payable to
CRE hereunder with respect to any Mortgage Loan, regardless of whether CRIIMI
MAE makes any profit with respect thereto. CRIIMI MAE shall notify CRE in
writing, at the address specified by CRE to CRIIMI MAE from time
to time, or electronically on a weekly basis, as to the Mortgage Loans to be
funded during the next week, provided that any such notice with respect to any
Mortgage Loan shall be given by CRIIMI MAE not less than two (2) Business Days
prior to such funding, and CRE shall inform CRIIMI MAE as to whether CRE
anticipates that the pricing on any such Mortgage Loan will be below the Par
Prices, which indication on the part of CRE shall be given in good faith but
shall be subject to change by CRE in its discretion as warranted by market
conditions as reflected in the Program Pricing Matrix. CRE shall, upon request
of CRIIMI MAE, discuss with CRIIMI MAE the manner in which the numbers set forth
in the Program Pricing Matrix were derived. CRIIMI MAE may vary the pricing of
any Mortgage Loan from the Program Pricing Matrix. In the event that the price
on any Mortgage Loan is below the Par Price with respect thereto, CRIIMI MAE
shall be required to deposit funds into the Loan Pricing Reserve Account with
respect thereto, in accordance with the provisions of Section 4.02.
Section 2.03 Loan Commitment, Rating Locking, Closing and Funding.
(a) CRE shall issue to CRIIMI MAE an Approval Letter, in CRE's
standard form, promptly after a Mortgage Loan has been approved by CRE for
inclusion in the Program. CRIIMI MAE shall promptly thereafter issue to the
related Mortgagor a Commitment
Letter having terms and conditions consistent with the Approval Letter. CRIIMI
MAE may send out a Commitment Letter prior to receipt of CRE's Approval Letter,
provided that it shall do so at its own risk, and the fact of CRIIMI MAE's
having sent out such Commitment Letter prior to receipt of CRE's Approval Letter
shall not in and of itself create any obligation on the part of CRE to fund any
Mortgage Loan.
(b) At a time mutually agreed upon by CRIIMI MAE and CRE
before funding of the Mortgage Loan, CRIIMI MAE may request a rate lock and at
such time shall provide to CRE a summary of the terms of each Mortgage Loan to
be rate-locked and a CRE approved form of rate lock agreement executed by CRIIMI
MAE. In no event may CRIIMI MAE request a rate lock later than four (4) hours
prior to the time at which the rate lock is to take effect. CRE will execute and
hedge the rate lock for such Mortgage Loan. CRIIMI MAE shall immediately (i)
notify CRE if a Mortgage Loan that has been rate locked will not be funded under
the Program, and (ii) pay to CRE the cost of unwinding the hedge. Any funds
received by CRIIMI MAE from a Mortgagor as a deposit for the rate lock
protection shall be deposited by CRIIMI MAE in a segregated account, maintained
at a bank acceptable to CRE, in trust for the benefit of the related Mortgagor.
No rate lock shall exceed 30 days.
(c) Each Mortgage Loan shall be documented with the most
current Approved Loan Documents for the type of related Mortgaged Property and
for the jurisdiction in which the related Mortgaged Property is located. CRIIMI
MAE acknowledges that it has reviewed the Approved Loan Documents and that such
documents, to the extent no modifications are made that would materially and
adversely affect the Mortgagee's interest thereunder, are acceptable to
CRIIMI MAE for the purposes of the Program and CRIIMI MAE's obligations under
this Agreement; PROVIDED, HOWEVER, that CRIIMI MAE shall be entitled to request
changes
to the Approved Loan Documents, and any changes shall be made subject to
CRE's reasonable approval and at CRIIMI MAE's sole cost and expense (which costs
and expenses shall include any and all reasonable fees and expenses of CRE's
legal counsel with respect to the review thereof).
(d) In closing a Mortgage Loan, CRIIMI MAE shall follow the
Closing Standards. Without limiting the generality of the foregoing, in
connection with the closing and funding of each Mortgage Loan, CRIIMI MAE shall
deliver to CRE not less than two (2) Business Days prior to the closing and
funding of any Mortgage Loan the following funding package with respect thereto:
a notice to the Mortgagor setting forth the amount of the advance and executed
by an authorized officer of CRIIMI MAE, a Mortgage Loan Schedule providing the
terms of the Mortgage Loan and approved by an authorized officer of CRIIMI MAE,
wiring instructions and a receipt and acknowledgment from a title insurance
company of documents required for funding. With respect to title insurance
companies, CRIIMI MAE shall require the Mortgagor to appoint an escrow agent, or
failing such approval to provide to CRE a closing protection letter from a title
insurance company approved by CRE, acknowledging such company to be an
authorized agent of the approved title insurance company. CRIIMI MAE shall
designate counsel, subject to CRE's approval, to assist CRIIMI MAE in connection
with the closing and funding of each Mortgage Loan, and no Mortgage Loan shall
be closed and funded without the prior approval of such counsel and CRE. Upon
satisfaction of CRIIMI MAE and the related Mortgagor of all of the conditions
set forth herein and in the Approval Letter, or in the related Commitment
Letter, as applicable, and subject to CRE's receipt of a satisfactory CRIIMI MAE
Closing Certificate from CRIIMI MAE, CRE shall fund the Mortgage Loan in
accordance with the terms of the Approval Letter.
(e) All costs and expenses associated with the origination,
preparation of Mortgage Loan documents, title review and closing costs of any
Mortgage Loan, including, without limitation, legal and brokerage fees, shall be
paid by the Mortgagor as provided in the related Commitment Letter, or otherwise
paid by CRIIMI MAE, unless otherwise agreed in writing by CRE and CRIIMI MAE.
Section 2.04 ORIGINATION FEES.
(a) Simultaneously with the closing and funding of each
Mortgage Loan, a loan origination fee (together with the Cash Collateral Reserve
Amount to be deposited in the Cash Collateral Reserve Account pursuant to
Section 4.01) shall be paid by CRIIMI MAE to CRE in accordance with the
following schedule, regardless of whether CRIIMI MAE collects the related amount
from the Mortgagor:
(i) For Mortgage Loans that are secured by
either Multifamily Property or manufactured housing projects,
CRE shall receive an amount equal to the greater of (a)
$5,000.00 and (b) 0.25% of the original principal amount
of the Mortgage Loan.
(ii) For Mortgage Loans that are secured by
any other type of Mortgaged Property, CRE shall receive an
amount equal to the greater of (a) $7,500.00 and (b) 0.25% of
the original principal amount of the Mortgage Loan.
(a) In the event CRIIMI MAE receives payment of a loan
origination fee from a Mortgagor that is in excess of the origination fee due to
CRE pursuant to Section 2.04(a), CRIIMI MAE shall be entitled to retain such
excess amount; PROVIDED, HOWEVER, that in no event shall CRIIMI MAE be permitted
to charge an origination fee with respect to any Mortgage Loan that exceeds 2%
of the original principal amount of such Mortgage Loan.
Section 2.05 SECONDARY MARKET LOAN ACQUISITIONS; CRE ORIGINATIONS.
(a) In the event that CRIIMI MAE proposes that CRE acquire any
existing mortgage loan or loans from an unrelated third party for inclusion in
the Program, CRE and CRIIMI MAE shall establish in advance a written procedure
for the acquisition of such loan or loans consistent with the terms of this
Agreement, including the requirement for the establishment of the Reserve
Accounts with respect thereto pursuant to Article IV hereof, the payment of an
origination fee pursuant to Section 2.04, any additions to or deletions from the
Representations and Warranties that CRIIMI MAE will be required to make with
respect thereto and the appropriate forms of loan documents with respect
thereto. The origination fee payable in connection with such acquisition shall
be calculated based upon the acquisition price for the loan or loans in lieu of
the then current principal amount thereof. The costs and expenses related to all
secondary market acquisitions shall be paid by CRIIMI MAE.
(b) CRE may originate Mortgage Loans for the Program, subject
to CRIIMI MAE's underwriting and approval, and subject to agreement between the
parties with respect thereto. With respect to each Mortgage Loan so originated
by CRE, CRE shall be entitled to receive compensation as agreed by the parties.
All such Mortgage Loans originated by CRE shall otherwise be subject to all of
the terms and conditions thereof, including the Recourse Obligation and the
obligations with respect to the Reserve Accounts.
Section 2.06 DELIVERY OF LOAN DOCUMENTS AND PREPARATION OF RATING AGENCY
MATERIALS. CRIIMI MAE shall deliver or cause to be delivered to CRE, not
later than three (3) Business Days after the Closing Date with respect to any
Mortgage Loan, the original Mortgage Note and a copy of the related Mortgage.
CRIIMI MAE shall prepare, or cause to be prepared, a comprehensive closing
file for each Mortgage Loan in accordance with the Closing Standards. The
closing file shall include all customary and usual documentation required in
connection with
closing, recording, assigning and endorsing a multifamily or commercial mortgage
loan, as the case may be (which assignment and endorsement documents shall
include assignments and endorsements to CRE, if necessary, and assignments and
endorsements from CRE in blank), including without limitation all documents
required to be contained in the Mortgage File and all documentation required to
be contained in the Due Diligence File. The complete closing file with respect
to each Mortgage Loan, except for such documents as are required to be delivered
earlier as described above, shall be delivered to CRE not later than two weeks
after the Closing Date. With respect to each Mortgage Loan, CRIIMI MAE and CRE
shall work together for the assembly of all Rating Agency materials.
Section 2.07 THIRD PARTY REPORTS. Each Third Party Report shall be (a) based on
a scope of work mutually agreeable to CRE and CRIIMI MAE, (b) be in a form
acceptable to, or otherwise provided by, CRIIMI MAE and CRE, (c) be acceptable
in substance (including any conclusions contained therein) to CRE, (d) be
prepared by an Independent Person, (e) meet minimum Rating Agency requirements
and (f) be addressed to CRE and provide that CRE may rely thereon.
Section 2.08 CRE's OWNERSHIP INTEREST. Notwithstanding any other provision
set forth herein, the parties intend that CRE is the owner of all right,
title and interest in and to the Mortgage Loans; PROVIDED, HOWEVER, that in
the event that CRE is deemed not to be the owner of the Mortgage Loans,
CRIIMI MAE shall be deemed to have granted to CRE, and CRE shall be deemed to
have, as security for the performance by CRIIMI MAE of its obligations
hereunder, a valid and perfected security interest in, all of the Mortgage
Loans, whether now owned or existing, hereafter acquired or arising, or in
which CRIIMI MAE now or hereafter has any rights, and wherever located, and
to the extent not included in the foregoing, all proceeds, products,
offspring, rents, revenues, issues, profits, royalties, income, benefits,
accessions, additions, substitutions and replacements of and to any and all of
the foregoing.
ARTICLE III
CRIIMI MAE's RECOURSE OBLIGATION
In addition to, and without regard to the amounts of, the
Reserve Accounts described in Article IV, CRIIMI MAE hereby agrees that it shall
be subject to an unconditional irrevocable recourse obligation equal to 5% of
the aggregate original principal balance of all Mortgage Loans funded by CRE
hereunder (the "Recourse Obligation"). The Recourse Obligation shall be
available to CRE to satisfy any and all amounts due to CRE hereunder and not
otherwise paid, shall be paid by CRIIMI MAE to CRE promptly upon CRE's notice to
CRIIMI MAE with respect thereto, and shall not be subject to offset,
counterclaim or defense of any kind by CRIIMI MAE. In the event of a downgrade
of CRIIMI MAE's rating (currently BB for Fitch and S&P and B1 for Xxxxx'x) by
one or more of the Rating Agencies, CRIIMI MAE shall deposit an amount equal to
the full outstanding amount of the Recourse Obligation, in the Xxxx-to-Market
Reserve Account, in accordance with all of the requirements with respect thereto
as set forth in Article IV, on the next Business Day after the Business Day upon
which CRIIMI MAE receives notice of any such downgrade and in any event no later
than the next Business Day after the Business Day on which it received notice
from CRE to make such deposit, provided that any such notice received by CRIIMI
MAE after 10:30 A.M. New York time on a Business Day shall be deemed received on
the next succeeding Business Day. After such deposit, CRIIMI MAE shall,
simultaneously with the funding of each new Mortgage Loan thereafter, deposit in
the Xxxx-to-Market Reserve Account, in addition to any other amounts required to
be deposited therein or in any other Reserve Account, an amount equal to 5.0% of
the original principal balance of such new Mortgage Loan.
CRIIMI MAE shall provide to CRE: (a) financial statements
(including balance sheets and related statements of income and retained
earnings) quarterly within 50 days of the quarter end for CRIIMI MAE for both
the quarter ended and year to date and annual audited financial statements
within 120 days of the CRIIMI MAE fiscal year end, and monthly, within 10 days
of month's end, in-house summary liquidity position and summary sources and uses
of cash and such other interim financial information as may be reasonably
requested by CRE; and (b) affirmation that such documents which are furnished to
CRE shall fairly present the financial condition of the CRIIMI MAE and its
subsidiaries at such date and results of the operations of CRIIMI MAE and its
subsidiaries for the period ended on such date, all in accordance with generally
accepted accounting principles consistently applied, and that there has been no
material adverse changed in such condition or operations. The shareholders'
equity of CRIIMI MAE shall at all times exceed $550,000,000.
ARTICLE IV
RESERVE ACCOUNTS
Section 4.01 CASH COLLATERAL RESERVE ACCOUNT. Concurrently with the funding of
each Mortgage Loan, CRIIMI MAE shall deposit with CRE, in the Cash Collateral
Reserve Account, the related Cash Collateral Reserve Amount determined as
provided in this Section 4.01. The Cash Collateral Reserve Amount with respect
to any Mortgage Loan shall be subject to subordination levels generated via the
CRE model, and shall be not less than 5% of the greater of the outstanding
principal balance and the purchase price paid by CRE for Mortgage Loans with
less than a 16% subordination level to the BBB using the CRE model. For Mortgage
Loans with a subordination level above 16% to the BBB using the CRE model, the
Cash Collateral Reserve Amount will equal 5% plus half the difference between
the level generated via the CRE model and 16% (e.g., for a 20% subordination
level to the BBB it would be 20%-16% times 50% equals 2.0% additional
subordination reserve for a total of 7.0%). In the event that any Mortgage Loan,
while in the Program, performs in such a manner that this subordination model
reflects a subordination level below 16% to the BBB, and provided that no Event
of Default shall have occurred and be continuing, any excess Cash Collateral
Reserve Amounts shall be promptly refunded to CRIIMI MAE; PROVIDED, HOWEVER,
that in no event shall the Cash Collateral Reserve Amount at any time be less
than 5% of the outstanding principal balance of the Portfolio. Upon the sale by
CRE of any Mortgage Loan, CRE may apply amounts in the Cash Collateral Reserve
Account in satisfaction in whole or in part of CRIIMI MAE's obligation to pay
the Purchase Price and other amounts due CRE with respect thereto. Any amounts
remaining in the Cash Collateral Reserve Account with respect to any Mortgage
Loan after disposition thereof by CRE and the satisfaction by CRIIMI MAE of all
of its obligations hereunder, with respect thereto, including any amounts
representing interest on such funds, shall be promptly released by CRE to
CRIIMI MAE. The Cash Collateral Reserve Account shall also be subject to the
general provisions regarding Reserve Accounts as set forth in Section 4.04.
Section 4.02 LOAN PRICING RESERVE ACCOUNT. In the event that a Mortgage Loan is
funded at a price below the par price with respect thereto as established by CRE
pursuant to the Program Pricing Matrix (the "Par Price"), concurrently with the
funding of the related Mortgage Loan, CRIIMI MAE shall deposit with CRE, in the
Loan Pricing Reserve Account, an amount equal to the excess of the Par Price
over the funding price. If at any time during the period in which a Mortgage
Loan as to which a deposit has been made into the Loan Pricing Reserve Account
remains subject to the Program, the Program Pricing Matrix is revised by CRE and
as a result of such revision the Par Price for the related Mortgage Loan would
be, at such date of determination, lower than the Par Price thereof on the
Closing Date, CRE shall, provided that no Event of Default shall have occurred
and be continuing, promptly release to CRIIMI MAE from the Loan Pricing Reserve
Account an amount equal to the excess of the Par Price on the Closing Date over
the Par Price at such date of determination. Upon the sale by CRE of any
Mortgage Loan as to which a deposit continues to be held in the Loan Pricing
Reserve Account as of the date of such sale, CRE may apply any amounts in the
Loan Pricing Reserve Account in satisfaction in whole or in part of CRIIMI MAE's
obligation to pay the Purchase Price and other amounts due to CRE with respect
thereto. Any amounts remaining in the Loan Pricing Reserve Account with respect
to a Mortgage Loan after disposition thereof by CRE and the satisfaction by
CRIIMI MAE of all of its obligations hereunder with respect thereto, including
any amounts representing interest on such funds, shall, provided that no Event
of Default shall have occurred and be continuing, be released promptly by CRE to
CRIIMI MAE. The Loan Pricing Reserve Account shall also be subject to the
general provisions regarding Reserve Accounts as set forth in Section 4.04.
Section 4.03 XXXX-TO-MARKET; XXXX-TO-MARKET RESERVE ACCOUNT.
CRE shall value the Portfolio periodically, as determined by CRE in its
sole discretion, but in no event less frequently than monthly, based upon
characteristics of the Mortgage Loans and market conditions generally (including
interest rates, spreads and speeds) (such valuation, "Xxxx-to- Market"). When,
as a result of a Xxxx-to-Market, the Portfolio Market Value is less than 97.5%
of the aggregate principal balance of the Portfolio, CRE shall so notify CRIIMI
MAE. CRIIMI MAE shall, on the Business Day on which CRIIMI MAE receives such
notice if received by 10:00 A.M. New York time or not later than
the next succeeding Business Day after receipt of such notice if received after
10:00 A.M. New York time, remit to CRE, for deposit in the Xxxx-to-Market
Reserve Account, an amount, up to the amount of the Recourse Obligation, that,
when added to the Portfolio Market Value, equals an amount not less than 97.5%
of the aggregate principal balance of the Portfolio; PROVIDED, HOWEVER, that (i)
upon depletion of the Recourse Obligation and (ii) the decline in the Portfolio
Market Value below 97.5%, CRE shall have such remedies as described in the last
sentence of Section 6.02, subject to the limitations set forth therein. In the
event that at the time of any Xxxx-to-Market, the Portfolio Market Value exceeds
97.5% of the aggregate principal balance thereof, CRE shall, assuming that (i)
no Event of Default has occurred and is continuing, and (ii) no downgrade has
occurred and is continuing, release to CRIIMI MAE within one (1) Business Day
after such determination, such excess amounts in the Xxxx-to-Market Reserve
Account and the Recourse Obligation of CRIIMI MAE shall increase by an amount
equal to the amount released by CRE, but in no event shall such increase exceed
the maximum amount of the Recourse Obligation. Upon the sale by CRE of any
Mortgage Loan, CRE may apply amounts in the Xxxx-to-Market Reserve Account in
satisfaction in whole or in part of CRIIMI MAE's obligation to pay the Purchase
Price and other amounts due to CRE with respect thereto. Any amounts remaining
in the Xxxx-to- Market Reserve Account after disposition by CRE of all of the
Mortgage Loans and the satisfaction by CRIIMI
MAE of all of its obligations hereunder, including any amounts representing
interest on such funds, shall be released promptly by CRE to CRIIMI MAE. The
Xxxx-to-Market Reserve Account shall also be subject to the general provisions
regarding Reserve Accounts set forth in Section 4.04.
Section 4.04 GENERAL REQUIREMENTS REGARDING RESERVE ACCOUNTS.
(a) All deposits in the Reserve Accounts shall be in cash or
in U.S. Treasury Securities with original maturities not exceeding six (6)
months or such other investments as the parties may agree.
(b) The Reserve Accounts (if cash) shall be interest-bearing
cash reserve or money market accounts, as directed by CRIIMI MAE, held at
Citibank, N.A. in the name of CRE. CRE shall not be responsible for any losses
resulting from such investment or for obtaining any specific level or percentage
of earnings. The amounts deposited into the Reserve Accounts plus any earnings
thereon shall serve as security for the obligation of CRIIMI MAE to purchase the
Mortgage Loans in accordance with the provisions of Article VI and the other
obligations of CRIIMI MAE as set forth in this Agreement.
(c) CRE shall have sole dominion and control over the Reserve
Accounts subject to the terms of this Agreement. Except as otherwise expressly
provided in this Agreement, neither CRIIMI MAE nor CRE shall grant or permit any
liens or claims to arise with respect to the Reserve Accounts. CRIIMI MAE hereby
grants a first priority security interest in the Reserve Accounts to CRE as
security for CRIIMI MAE's obligation to purchase the Mortgage Loans in
accordance with the terms of this Agreement and the performance by CRIIMI MAE of
all of its other obligations pursuant to this Agreement and CRIIMI MAE agrees to
execute any agreement reasonably requested by CRE in furtherance of such
security interest.
(d) Except as otherwise provided in this Agreement, all
investment earnings on amounts on deposit in the Reserve Accounts shall be added
to and become a part of the Reserve Accounts. CRIIMI MAE and CRE agree that the
investment earnings that accrue on amounts on deposit in the Reserve Account may
be applied towards the Purchase Price of the Mortgage Loans.
(e) For tax purposes, notwithstanding anything contained
herein, all investment earnings on Reserve Account funds shall be deemed to be
income of CRIIMI MAE and CRIIMI MAE shall indemnify and hold CRE harmless from
and against any tax liability resulting therefrom, which indemnification shall
survive the expiration or earlier termination of this Agreement.
(f) Provided that no Event of Default has occurred and is
continuing, all interest, if any, on any Reserve Account remaining therein, and
not previously released or applied as provided herein, shall be released by CRE
to CRIIMI MAE on or before December 1, 1998.
ARTICLE V
AGGREGATION PERIOD
Section 5.01 AGGREGATION PERIOD. All Mortgage Loans shall be held by CRE in
accordance with the terms and conditions contained herein until the earliest to
occur of (i) the Program Termination Date, (ii) the date on which the aggregate
principal amount of Mortgage Loans as CRE and CRIIMI MAE mutually agree is
sufficient for a Securitization have been aggregated by CRE for the Program and
the Mortgage Loans are sold in a Securitization and (iii) the date of
disposition of the Mortgage Loans (other than through a Securitization) in
accordance with this Agreement (the "Aggregation Period"). Notwithstanding
anything to the contrary set forth herein, it is expressly understood that
effective as of 30 days prior to the end of the Aggregation Period, CRE may, in
its sole discretion, cease funding any additional Mortgage Loans under the
Program pursuant to any new Approval Letters or extension of the term of any
then existing Approval Letters.
Section 5.02 HEDGING DURING AGGREGATION PERIOD. CRE shall be responsible, in
accordance with the procedures set forth herein, for executing an interest rate
hedge with respect to each of the Mortgage Loans held by CRE during the
Aggregation Period, such hedging
strategy to be mutually agreed upon by CRE and CRIIMI MAE. If the parties fail
to reach agreement with respect thereto, CRE shall hedge the Mortgage Loans in
accordance with its then-standard hedging strategy. CRIIMI MAE shall be
prohibited from advocating an alternative hedging strategy that permits the
lender self-insurance against interest rate risk. CRE agrees to discuss and
coordinate its hedging strategy with CRIIMI MAE. CRE agrees to provide to CRIIMI
MAE timely monthly position reporting (including cost of hedge) and,
periodically, any additional information on the position reasonably requested by
CRIIMI MAE, including the cost of unwinding any hedge.
Section 5.03 NET CARRY DURING AGGREGATION PERIOD. On the last business day of
each month, CRE shall distribute (together with an accounting therefor) one-half
of the Net Carry (if positive) received during the calendar month ended
immediately preceding the month in which the date of distribution occurs;
PROVIDED, HOWEVER, that if at any time cumulative Net Carry losses exist, CRIIMI
MAE shall remit 100% of such losses to CRE immediately, and that no Net Carry
remittances to CRIIMI MAE shall be made until negative Net Carry losses are
remitted by CRIIMI MAE to CRE. In the event that the Portfolio Market Value is
less than 97.5% of the aggregate principal balance thereof, Net Carry
remittances will be retained by CRE until settlement of the related
Securitization. "Net Carry" for a calendar month means interest at the Net Carry
Rate.
Section 5.04 SERVICING OF MORTGAGE LOANS DURING AGGREGATION PERIOD. During the
Aggregation Period, CRIIMI MAE shall cause the Servicer to service each Mortgage
Loan pursuant to the Servicing Agreement for the related Servicing Fee, which
Servicing Fee shall be payable monthly, only out of the interest portion of the
Monthly Payment received by CRIIMI MAE with respect to the related Mortgage
Loan. In the event of a conflict between the Servicing Fee Rate set forth herein
and the servicing fee rate as set forth in the Servicing Agreement, the
Servicing Fee Rate set forth herein shall be deemed to control. After the
Securitization with respect to any Mortgage Loan, CRIIMI MAE shall cause the
Servicer to continue to service such Mortgage Loan for a servicing fee
calculated at a rate per annum acceptable to the Rating
Agencies plus broker strips. The payment and performance of the obligations of
the Servicer under the Servicing Agreement with respect to the Mortgage Loans
prior to the related Securitization shall be guaranteed to CRE and CitiMae, Inc.
by CRIIMI MAE pursuant to the Guaranty.
ARTICLE VI
CRIIMI MAE ACQUISITION OF MORTGAGE LOANS
Section 6.01 CRIIMI MAE'S COMMITMENT TO PURCHASE MORTGAGE LOANS. CRIIMI MAE
hereby agrees to purchase the Mortgage Loans from CRE in accordance with the
terms hereof upon the earliest to occur of: (i) the end of the Aggregation
Period, (ii) a date mutually agreeable to the parties to this Agreement and
(iii) otherwise as required hereunder. The Purchase Price of each Mortgage Loan
shall be equal to the sum of: (i) the outstanding principal balance of such
Mortgage Loan (or the purchase price thereof, for any Loans acquired pursuant to
Section 2.05(a), reduced by any amortization of the principal balance of such
Mortgage Loan after the date of acquisition), (ii) 50% of the accrued and unpaid
positive Net Carry on the Mortgage Loan (after taking into account any
unallocated negative Net Carry realized for any preceding monthly periods),
(iii) the amount, if any, advanced by the Servicer with respect to a monetary
default or a non-monetary default with respect to such Mortgage Loan pursuant to
the terms of the Servicing Agreement (which sums shall be reimbursed directly to
the Servicer), (iv) 50% of the aggregate amount of any excess negative Net Carry
with respect to such Mortgage Loan not taken into account pursuant to clause
(ii) above, (v) any loss associated with the hedge position on the Mortgage Loan
during the time it is included in the Program that is not otherwise recognized
as positive Net Carry pursuant to Section 6.01 (ii) or negative Net Carry
pursuant to Section 6.01 (iv), and (vi) the related Exit Fee, if applicable. If
the hedge position on a Mortgage Loan during
the period that is included in the Program results in a gain that is not
otherwise recognized as positive Net Carry pursuant to Section 6. 01 (ii) or
negative Net Carry pursuant to Section 6.01(iv), such gain shall be deducted
from the Purchase Price for such Mortgage Loan. The amounts on deposit in the
Reserve Accounts, including amounts representing investment earnings, may be
credited towards the Purchase Price of the Mortgage Loans, and the balance shall
be payable in cash.
Section 6.02 SALE OF MORTGAGE LOANS. If, by the Program Termination Date or an
earlier mutually agreed upon date, the parties have determined not to proceed
with a Securitization and have not otherwise disposed of the Mortgage Loans in a
mutually satisfactory manner, and in such other instances as are provided
herein, CRIIMI MAE shall be obligated to purchase the Mortgage Loans (or some of
the Mortgage Loans if so provided herein). In the event that CRIIMI MAE fails to
purchase any Mortgage Loan or Mortgage Loans required to be purchased by CRIIMI
MAE hereunder, CRE may sell such Mortgage Loan or Mortgage Loans. In connection
with any sale of the Mortgage Loans hereunder other than to CRIIMI MAE, CRIIMI
MAE shall pay all costs and expenses of CRE in connection with such sale up to a
maximum amount of $500,000. In the event the net sales price realized from the
disposition of such Mortgage Loan is less than the Purchase Price allocable
thereto plus any costs and expenses of CRE (up to the limit set forth above) in
connection therewith, CRE shall have the right to apply amounts in the Reserve
Accounts to cover any shortfall. To the extent that funds in the Reserve
Accounts are inadequate with respect thereto, CRIIMI MAE shall, promptly upon
request by CRE, remit funds under the Recourse Obligation up to the amount
available thereunder, to cover any remaining shortfall. If at any time (i) the
Portfolio Market Value is less than 97.5% and (ii) there are no further amounts
remaining available under the Recourse Obligation, CRE may, at its sole
discretion, terminate the Program and exercise all other remedies as set forth
in Section 8.01
(b), (c) and (d) as though an Event of Default had occurred, and all of the
provisions of such sections shall be applicable with respect thereto; PROVIDED,
HOWEVER, that CRE shall not exercise such right in the event that CRIIMI MAE
elects, at its option, to deposit funds in the Xxxx-to-Market Reserve Account in
accordance with Section 4.03, without regard to the limited nature of the
Recourse Obligation. An illustration of certain calculations is attached hereto
as Exhibit F.
ARTICLE VII
SECURITIZATION OF LOANS
Section 7.01 SECURITIZATION OF LOANS. The parties agree that, it is anticipated
that upon the accumulation of up to an aggregate principal amount of Mortgage
Loans as deemed sufficient, by mutual agreement of CRIIMI MAE and CRE, for a
Securitization, CRIIMI MAE shall purchase the Mortgage Loans from CRE in an
amount equal to the Purchase Price in conjunction with a Securitization. CRIIMI
MAE shall separately engage CSI for the structuring and underwriting of the
investment grade bonds in connection with any Securitization in accordance with
the terms of a separate engagement letter. CRIIMI agrees to pay to CSI for
services as underwriter/placement agent on Mortgage Loans originated by CRIIMI
MAE, funded by CRE under the Program and included in a Securitization, a 75
basis point underwriting/placement fee on the aggregate outstanding principal
balance of the Mortgage Loans included in such Securitization. CRIIMI MAE will
have the right to name a co-underwriter to sell up to 25% of the investment
grade bonds in any Securitization. The amount due to the co-underwriter shall
not exceed 50 basis points on the 25% investment grade bond allocation. The
foregoing amount shall be paid out of CSI's underwriting fee. CRIIMI MAE shall
be responsible for all, or in the case of a joint transaction with another
issuer its pro-rata share of, issuance expenses associated with a
Securitization, which shall include legal counsel for both issuer and
underwriter/placement agent, accounting firms, trustee legal expenses, printing
expenses, and the up-front rating and surveillance monetary fees as well as
legal expenses for at least two Rating Agencies or such greater or lesser number
of Rating Agencies as future market conditions require. In connection with any
Securitization, CRE shall obtain, for the benefit of CRE, an opinion reasonably
acceptable in form and substance to CRE, from legal counsel reasonably
acceptable to CRE, that the transfer of the related Mortgage Loans from CRE to
CRIIMI MAE as provided in this Section 7.01 constitutes a "true sale" for
bankruptcy purposes. CRIIMI MAE shall pay
reasonable legal and counsel fees incurred by CSI and CRE in connection with a
Securitization (including the "true sale" opinion described above), not to
exceed the lesser of $100,000 and 1.75 basis points on the securitized pool
balance and all other costs incurred by CRIIMI MAE, CSI or CRE in connection
with any such Securitization (including the transfer or the Mortgage Loans from
CRE to CRIIMI MAE in connection therewith).
ARTICLE VIII
DEFAULT
Section 8.01 DEFAULT BY CRIIMI MAE; RIGHTS AND REMEDIES.
(a) Any of the following shall constitute an "Event of
Default" by CRIIMI MAE:
(i) any failure by CRIIMI MAE to remit to
CRE any payment required to be made under the terms of this
Agreement (including any amounts required to be paid or other
material obligation to be performed by CRIIMI MAE pursuant to
CRIIMI MAE's guaranty of the Servicer's obligations under the
Servicing Agreement);
(ii) any failure, other than as provided in
(i) above, on the part of CRIIMI MAE duly to observe or
perform in any material respect any other of the covenants or
agreements on the part of CRIIMI MAE, set forth in this
Agreement, that continues unremedied for a period of 30 days
after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to
CRIIMI MAE by CRE;
(iii) a decree or order of a court or agency
or supervisory authority having jurisdiction for the
appointment of a conservator or receiver or liquidator in any
insolvency, bankruptcy, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been
entered against CRIIMI MAE and such decree or order shall have
remained in force undischarged or unstayed for a period of 30
days;
(iv) CRIIMI MAE shall consent to the
appointment of a conservator or receiver or liquidator in any
insolvency, bankruptcy, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating
to CRIIMI MAE or of or relating to all or substantially all of
its property; or
(v) CRIIMI MAE shall admit in writing its
inability to pay its debts generally as they become due, file
a petition to take advantage of any applicable bankruptcy,
insolvency or reorganization statute, make an assignment for
the benefit of its creditors, or voluntarily suspend payment
of its obligations.
(b) The parties hereto agree that during the continuance of
any Event of Default hereunder, CRE (x) shall have the right, at its sole
option, to terminate the Program and remove all Mortgage Loans from the terms of
this Agreement, thereby terminating any and all of CRIIMI MAE's rights and
obligations concerning such Mortgage Loans, except as otherwise specifically
provided in Section 8.01(c) and (y) may, without notice to CRIIMI MAE or any
other party, elect to exercise all or any of its remedies under this Agreement
and under applicable law, including the right to sell the Mortgage Loans, to
apply all or part of the Reserve Accounts towards the obligations of CRIIMI MAE
hereunder, and the right to require payment by CRIIMI MAE under the Recourse
Obligation.
(c) Any termination of the Program pursuant to Section 8.01(b)
shall not relieve CRIIMI MAE of its obligation to purchase Mortgage Loans as
provided hereunder if so requested by CRE (PROVIDED, HOWEVER, that CRE shall
have no obligation to sell the Mortgage
Loans to CRIIMI MAE and that neither CRE nor CSI shall have any obligation to
undertake a Securitization) , and shall not affect the rights or obligations of
the parties arising out of any action, event on failure to act occurring prior
to the termination of the Program.
(d) In the event of any event of default, as defined therein,
by CRIIMI MAE under any other agreement between CRE and CRIIMI MAE, which
default is continuing, CRE shall have no further obligation to fund Mortgage
Loans under the Program.
(e) Except as otherwise expressly provided in this Agreement,
all rights and remedies under this Agreement are distinct and cumulative, not
only as to each other, but as to any rights and remedies afforded by law or
equity and may be exercised together, separately and successively, for the
benefit of CRE, its successors and assigns.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES; DEFAULTS
Section 9.01 REPRESENTATIONS AND WARRANTIES. CRIIMI MAE hereby makes and agrees
to make, for the benefit of CRE, its successors and assigns, all of the
Representations and Warranties. In connection with a Securitization, CRIIMI MAE
agrees to make, as of the date of the Securitization, all of the representations
and warranties required by the Rating Agencies and/or the underwriter of the
securities. Each representation made "to CRIIMI MAE's knowledge" shall refer to
such knowledge of CRIIMI MAE after due inquiry by such personnel of CRIIMI MAE
whose positions and responsibilities would require such inquiry in the course of
their duties.
Section 9.02 BREACH OF REPRESENTATION; DEFAULT. In the event that during the
Aggregation Period a breach of any Representation or Warranty is discovered or a
Mortgage Loan becomes a Defaulted Mortgage Loan, CRIIMI MAE shall be obligated,
upon request by CRE, to purchase at the related Purchase Price all Mortgage
Loans affected by such breach and all such Defaulted
Mortgage Loans in accordance with Article VI, and all of the terms of Article VI
shall apply with respect thereto.
Section 9.03 CRE'S REPRESENTATION AND WARRANTIES. With respect to any Mortgage
Loan purchased by CRIIMI MAE from CRE hereunder, CRE shall be deemed to
represent and warrant to CRIIMI MAE, as of such purchase date, that CRE owns
such Mortgage Loan and has the right to sell such Mortgage Loan to CRIIMI MAE
free and clear of all liens thereon. In addition, with respect to any Mortgage
Loan purchased by CRIIMI MAE from CRE that was purchased by CRE from a third
party, CRE shall assign to CRIIMI MAE all representations and warranties (which
shall be standard securitization representations and warranties) received by CRE
from such third party with respect thereto.
ARTICLE X
MISCELLANEOUS
Section 10.01 TERM OF AGREEMENT; SURVIVAL; EXCLUSIVITY.
(a) The term of this Agreement shall commence on the Effective
Date and terminate on the Program Termination Date or such earlier
date that CRE may elect to terminate this Agreement upon the occurrence and
during the continuance of an Event of Default.
(b) The parties agree that for the period from the Effective
Date through the end of the Aggregation Period, all Mortgage Loans that are
sourced by CRIIMI MAE and meet the criteria set forth in herein shall,
notwithstanding any other agreements, contracts or arrangements CRIIMI MAE may
have with third parties, be offered first to CRE for review in accordance with
Section 2.01 herein. Notwithstanding anything set forth hereinabove, this
arrangement shall not apply with respect to loans sourced by CRIIMI MAE for the
AIM funds and any already existing CRIIMI MAE or CRI affiliate. If CRE declines
to include any mortgage
loan offered by CRIIMI MAE in the Program, such mortgage loan may be dealt with
freely by CRIIMI MAE. Notwithstanding the foregoing, nothing herein shall be
deemed to restrict in any manner the ability of CRE or any Affiliate thereof to
make or purchase loans meeting some or all of the requirements thereof in
transactions unrelated to this Agreement.
(c) Notwithstanding anything contained herein, the
obligations, representations and warranties of CRIIMI MAE and CRE under this
Agreement shall commence on the Effective Date.
Section 10.02 INDEMNIFICATION. CRIIMI MAE shall indemnify CRE and hold CRE
harmless against all losses, damages, penalties, fines, legal expenses,
judgments and any other costs, fees and expenses that CRE may sustain in any way
related to CRIIMI MAE's failure to perform, keep or observe any of its
obligations, covenants, representations or warranties under this Agreement,
including any lender liability claims; it being understood, however, that CRE's
sole recourse resulting from CRIIMI MAE's failure to purchase the Mortgage Loans
in accordance with the provisions of Section 6.01 shall be to sell the Mortgage
Loans and retain the proceeds of such sale, to apply the sums held in the
Reserve Accounts and to enforce the Recourse Obligations, all as set forth
herein.
Section 10.03 COSTS OF AGREEMENT PREPARATION. CRIIMI MAE shall pay all
reasonable legal fees and disbursements of CRE's legal counsel in connection
with the drafting and negotiation of this Agreement.
Section 10.04 NOTICES. Whenever it is provided in this Agreement that notice,
demand, request or other communication shall be given to or served upon one of
the parties hereto by another, any such notice, demand, request or communication
shall be in writing (except with respect to method (v) described below) and
shall be delivered (i) personally to the recipient at the address listed below,
(ii) by certified or registered mail, return receipt requested, (iii) by
overnight
commercial courier service, (iv) by electronic transfer device or (v)
with respect to notices concerning funds required to be deposited into a Reserve
Account only, by telephone.
If to CRIIMI MAE, at the following address:
CRIIMI MAE Inc.
The CRI Building
00000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
CRIIMI MAE Inc.
The CRI Building
00000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to CRE, at the following address:
Citicorp Real Estate, Inc.
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: General Counsel
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Citicorp Securities, Inc.
000 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Managing Director
Telephone: (000) 000-0000
Fax: (000) 000-0000
Such notice, demand, request or communication shall be deemed (except as
otherwise provided herein) delivered (a) in the case of method (v),
simultaneously with the giving of notice, (b) in the case of methods (i) and
(iv), on the same day if received by 4:00 P.M. New York time on a Business Day
or on the next Business Day if received after such time, (c) in the case of
method (iii), on the next Business Day and (d) in the case of method (ii), on
the third (3rd) day, or if such day is not a Business Day, the next Business Day
after such third (3rd) day. Either party may at any time give notice in writing
to the other party of a change of its address or Fax number for purposes of this
Section 10.04.
Section 10.05 NO JOINT VENTURE. CRIIMI MAE and CRE are not partners or joint
venturers with each other, and nothing herein shall be construed so as to make
them such or impose any liability as such on either of them. Each party shall
perform its obligations hereunder as an independent contractor and not as an
agent of the other.
Section 10.06 ACTIONS THROUGH AFFILIATES. CRIIMI MAE agrees that any action or
performance stated to be taken or performed by CRE hereunder may in CRE's
discretion be taken or performed by any Affiliate of CRE, and such action or
performance shall be in satisfaction of any obligation hereunder as fully as if
taken by CRE. CRE agrees that any action or performance stated to be taken or
performed by CRIIMI MAE hereunder may in CRIIMI MAE'S discretion be taken or
performed by any entity in which CRIIMI MAE owns a majority interest, and such
action or performance shall be in satisfaction of any obligation hereunder as
fully as if taken by CRIIMI MAE.
Section 10.07 CRE'S DISCRETION. Unless otherwise explicitly stated herein, any
action, consent or waiver to be taken, granted, or given hereunder in CRE's
discretion or otherwise optionally by CRE shall be taken by CRE in its sole and
absolute discretion, using its business judgment in good faith under the
circumstances known to it at the time; PROVIDED, HOWEVER, that in the event
that CRIIMI MAE challenges such judgment, CRIIMI MAE shall have the burden of
proving that CRE had no business basis for such decision and acted solely in bad
faith.
Section 10.08 COUNTERPARTS. This Agreement may be executed in counterparts by
the parties hereto, and all such counterparts shall constitute one and the same
instrument.
Section 10.09 TRIAL BY JURY WAIVED. EACH PARTY HERETO HEREBY WAIVES TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT (INCLUDING ANY AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH) OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREUNDER. EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT IT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENDORSE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THIS WAIVER.
Section 10.10 GOVERNING LAW. This Agreement shall be construed in accordance
with and governed by the laws of the State of New York, without regard to its
conflicts of law principles.
Section 10.11 AMENDMENTS; WAIVERS. No amendment or waiver hereto shall be
effective unless evidenced by a writing executed by the parties hereto. Any
waiver shall be limited to the particular terms of such waiver. No act, course
of dealing or waiver shall be deemed to constitute an amendment hereto.
Section 10.12 PRESS RELEASES. Neither CRE nor CRIIMI MAE nor any of their
respective affiliates or subsidiaries shall issue any press release or make any
other formal public
announcement related to this Agreement or the transactions contemplated hereby
unless such press release or announcement shall have been approved in writing in
advance by the other party to this Agreement. This provision shall not preclude
either party from publicly disclosing any facts with respect to the transactions
contemplated by this Agreement if such disclosure is required by law.
Section 10.13 ENTIRE AGREEMENT. This Agreement, taken together with the
Servicing Agreement and the Guaranty, set forth the entire agreement between the
parties with respect to the subject matter thereof, and such agreements
supersede and replace any agreement or understanding that may have existed
between the parties prior to the date hereof in respect of such subject matter,
including, but not limited to the Original Agreement which is fully amended and
restated hereby.
Section 10.14 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the
benefit of and be enforceable by CRE and CRIIMI MAE and their respective
successors and assigns. CRE may assign this Agreement in whole or in part to any
Person to whom any Mortgage Loan is transferred whether pursuant to a sale or
financing. Upon any such assignment, the Person to whom such assignment is made
shall succeed to all rights and obligations of CRE under this Agreement with
respect to such Mortgage Loan. In the event of a merger involving CRE or its
Affiliates, CRE shall have the right to assign this Agreement to such other
business entity in Citigroup Inc. or any successor thereto by any name known.
CRIIMI MAE may not assign this Agreement without the prior written consent of
CRE.
Section 10.15 SURVIVAL. Except as otherwise provided herein, all warranties,
representations, covenants, obligations and agreements contained in this
Agreement shall survive the Closing Dates hereunder and transfer and conveyance
of the Mortgage Loans hereunder, and any and all performances hereunder.
Section 10.16 HEADINGS. Section headings are for reference purposes only,
and shall have no substantive effect.
Section 10.17 GENERAL INTERPRETIVE PRINCIPLES. For purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings
assigned to them in this Agreement and include the plural as well as the
singular, and the use of any gender herein shall be deemed to include the other
gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(c) references herein to "Articles," "Sections,"
"Subsections," "Paragraphs," and other subdivisions without reference to a
document are to designated Articles, Sections, Sections, Paragraphs and other
subdivisions of this Agreement;
(d) reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 10.18 REPRODUCTION OF DOCUMENTS. This Agreement and all documents
relating thereto, including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, (b) documents received by any
party at the closing, and (c) financial statements, certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
Section 10.19 DEDUCTION OF AMOUNTS OWED TO CRE. Prior to paying to CRIIMI MAE
any amounts due to CRIIMI MAE from CRE under the Program, CRE may deduct
therefrom any amounts due to CRE from CRIIMI MAE under the Program and that have
not yet been paid.
Section 10.20 OBLIGATION TO APPROVE. CRE shall have no obligation to approve any
Mortgage Loan in the event that it determines that due to secondary market
conditions, it may not be able to sell, transfer or assign the Mortgage Loan,
grant participations in the Mortgage Loan or issue mortgage pass-through
certificates or other securities evidencing a beneficial interest in the
Mortgage Loan in a rated or unrated public offering or private placement.
Section 10.21 FURTHER AGREEMENTS. CRE and CRIIMI MAE each agrees to execute and
deliver to the other such reasonable and appropriate additional documents,
instruments or agreements as may be necessary or appropriate to effectuate the
purposes of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the Effective Date.
CITICORP REAL ESTATE, INC.
By:
Name:
Title:
CRIIMI MAE INC.
By:
Name:
Title:
EXHIBIT A
ELIGIBLE MORTGAGE LOAN CRITERIA
1. Each Mortgage Loan shall:
(1) comply in all respects with the Underwriting Guidelines;
(2) be secured by a first lien on a fee simple or leasehold interest in the
Mortgage Property, which Mortgaged Property shall be a Multifamily
Property or a Commercial Property;
(3) be a Fixed Rate Mortgage Loan;
(4) have an original principal balance of not less than $1,000,000 or more
than $40,000,000; and no group of Mortgage Loans to the same mortgagor
or sponsor, (a) shall have an aggregate principal balance exceeding
$60,000,000, or (b) be comprised of two or more cross-collateralized
Mortgage Loans with combined principal balances or more than
$40,000,000;
(5) have an original term to maturity of not less than 5 years or more than
15 years;
(6) have an amortized maturity not exceeding 30 years;
(7) have a Due Date of the first day of each calendar month, with interest
payable in arrears;
(8) provide that the outstanding principal balance thereof, together with
all accrued and unpaid interest and other outstanding amounts
thereunder, be payable upon written notice under CRIIMI MAE's "3-2-1
no-lock program" (i.e., subject to Prepayment Premiums as follows: 3%
during the first 3 years of the Mortgage Loan term; 2% during the years
4, 5 and 6 of the Mortgage Loan Term; 1% for prepayment during years 7,
8 and 9 of the Loan term, and no penalty thereafter), or locked with a
yield maintenance or defeasance provision conforming to CRE's then
applicable requirement;
(9) not have a Fitch Stressed Rate below 1.00x (based on the CRE model);
and
(10) be a loan that is not a Premium Loan.
2. With respect to all Mortgage Loans funded by CRE under the Program, not more
than 20% by aggregate original principal balance may be secured by either hotel
properties or by self-storage facilities.
EXHIBIT B
REPRESENTATIONS AND WARRANTIES OF CRIIMI MAE
Section I. REPRESENTATIONS AND WARRANTIES OF CRIIMI MAE.
CRIIMI MAE hereby represents and warrants to CRE, as of the date hereof and as
of each Closing Date:
(i) DUE ORGANIZATION; QUALIFICATION; REIT STATUS. CRIIMI MAE
is a corporation duly organized, validly existing and in good standing
under the law of the State of Maryland, is duly qualified to transact
business as a foreign corporation, and is in good standing and
licensed, in each state in which the nature of its business or property
owned by it requires such qualification and licensure. CRIIMI MAE has,
at all relevant times, maintained its qualification as a Real Estate
Investment Trust under the Internal Revenue Code of 1986, as amended.
(ii) AUTHORITY. CRIIMI MAE has the full power, authority and
legal right to execute and deliver this Agreement (and all agreements
executed and delivered by CRIIMI MAE in connection herewith) and to
perform all transactions contemplated by this Agreement (and all
agreements executed and delivered by CRIIMI MAE in connection
herewith). CRIIMI MAE has duly authorized the execution, delivery and
performance of this Agreement (and all agreements executed and
delivered by CRIIMI MAE in connection herewith), and has duly executed
and delivered this Agreement (and all agreements executed and delivered
by CRIIMI MAE in connection herewith). This Agreement (and each
agreement executed and delivered by CRIIMI MAE in connection herewith),
assuming due authorization, execution and delivery by the other party
or parties hereto or thereto, constitutes the legal, valid and binding
obligation of CRIIMI MAE enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws relating to or
affecting the rights of creditors generally and by general principles
of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(iii) NO CONFLICTS. Neither the execution and delivery of this
Agreement nor the fulfillment, of or compliance with the terms and
conditions of this Agreement by CRIIMI MAE will (a) conflict with or
result in a breach of any of the terms, conditions or provisions of
CRIIMI MAE's certificate of incorporation, as amended, or other
organizational documents or any agreement or instrument to which CRIIMI
MAE is now a party or by which it (or any of its properties) is bound,
or constitute a default or result in an acceleration of indebtedness
under any of the foregoing; (b) conflict with or result in a breach of
any legal restriction if compliance therewith is necessary (1) to
ensure the enforceability of this Agreement, or (2) for CRIIMI MAE to
perform its duties and obligations under this Agreement
(or any agreement executed and delivered by CRIIMI MAE in connection
herewith); (c) result in the violation of any law, rule, regulation,
order, judgment or decree to which CRIIMI MAE or its property is
subject if compliance therewith is necessary (1) to ensure the
enforceability of this Agreement or any Mortgage Loan, or (2) for
CRIIMI MAE to perform its duties and obligations under this Agreement
(or any agreement executed and delivered by CRIIMI MAE in connection
herewith); or (d) result in the creation or imposition of any lien,
charge or encumbrance that would have a material adverse effect upon
any of its properties pursuant to the terms of any mortgage, contract,
deed of trust or other instrument or materially impair the ability of
CRE to acquire, hold, administer or dispose of or otherwise to realize
on the Mortgage Loans.
(iv) SOLVENCY. CRIIMI MAE is solvent and the execution,
delivery and performance of this Agreement (1) will not cause CRIIMI
MAE to become insolvent, and (2) is not intended by CRIIMI MAE to
hinder, delay or defraud any of its creditors.
(v) NO CONSENT REQUIRED. No consent, approval, authorization
or order of, or registration or filing with, or notice to, any court or
governmental agency or body having jurisdiction or regulatory
authority, over CRIIMI MAE is required for (a) CRIIMI MAE's execution
and delivery of this Agreement (and each agreement executed and
delivered by CRIIMI MAE in connection herewith), (b) the consummation
by CRIIMI MAE of the transactions contemplated by this Agreement (and
each agreement executed and delivered by CRIIMI MAE in connection
herewith) or, to the extent so required, such consent, approval,
authorization, order, registration, filing or notice has been obtained,
made or given (as applicable), except that (x) CRIIMI MAE may not be
duly qualified to transact business as a foreign corporation or
licensed in one or more states if such qualification or licensing is
not necessary (1) to ensure the enforceability of any Mortgage Loan, or
(2) for CRIIMI MAE to perform its duties and obligations under this
Agreement (or any agreement executed and delivered by CRIIMI MAE in
connection herewith), and (y) CRIIMI MAE makes no representation with
respect to any required registration under the federal Securities Act
of 1933, as amended (the "SECURITIES ACT"), or any state securities or
blue sky law in connection with a Securitization. Without limitation of
the foregoing, CRIIMI MAE represents and warrants that it is licensed
as a mortgage broker and as a lender in each jurisdiction in which such
license is necessary in connection with the execution, delivery and
performance of this Agreement.
(vi) ABILITY TO PERFORM. CRIIMI MAE does not believe, nor does
it have any reason or cause to believe, that it cannot perform each and
every covenant of CRIIMI MAE contained in this Agreement (or any
agreement executed and delivered by CRIIMI MAE in connection herewith).
(vii) NO LITIGATION PENDING. There are no actions. suits or
proceedings pending or to CRIIMI MAE's knowledge threatened against
CRIIMI MAE which draw into question the validity of this Agreement or
which (if decided adversely to CRIIMI MAE), either in any one instance
or in the aggregate, would result in any material adverse change in the
business, operations, or financial condition of CRIIMI MAE or would
impair materially the ability of CRIIMI MAE to perform its duties and
obligations under this Agreement (or any agreement executed and
delivered by CRIIMI MAE in connection herewith).
(viii) NO BROKERS. CRIIMI MAE has not dealt with any person
(other than, CRE and its Affiliates) that may be entitled, by reason of
any act or omission of CRIIMI MAE,
to any commission or compensation from, CRE or any of its Affiliates
in common with this Agreement or the transactions contemplated
hereby.
(ix) NO UNTRUE INFORMATION. No statement, report or other
document relating to any Mortgage Loan furnished by or on behalf of
CRIIMI MAE or any Affiliate thereof in writing (including electronic
media) in connection with CRIIMI MAE's underwriting of and origination
of the Mortgage Loans will contain any material untrue statement by
CRIIMI MAE or any affiliate thereof of any material fact or any
omission by CRIIMI MAE or any affiliate thereof of a material fact
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not materially misleading.
(x) NO DEFAULT. CRIIMI MAE is not in default or breach of any
agreement or instrument to which CRIIMI MAE is now a party or by which
it (or any of its properties) is bound which breach or default would
materially and adversely affect the ability of CRIIMI MAE to perform
its obligations under this Agreement.
Section II. CRIIMI MAE hereby represents and warrants to CRE,
with respect to each Mortgage Loan as of the Closing Date (except as otherwise
stated), that:
(i) ORIGINATION. Such Mortgage Loan was originated in
accordance with the Underwriting Standards, the Closing Standards and
all other requirements set forth in this Agreement, and the Origination
Services were performed in accordance with the Origination Services
Standard. All Insurance Policies were written by Qualified Insurers.
(ii) MORTGAGE LOAN SCHEDULE. The information with respect to
such Mortgage Loan set forth in the Mortgage Loan Schedule is true and
correct in all material respects.
(iii) UNDERWRITING MEMORANDUM. The information set forth in
the underwriting memorandum delivered to CRE is true and correct in all
material respects.
(iv) DELINQUENCIES AND DEFAULTS. Such Mortgage Loan is not 30
days or more delinquent in respect of any Monthly Payment of principal
and/or interest required thereunder, without giving effect to any
applicable grace period. There is no material default, breach or event
of acceleration existing under the related Mortgage or Mortgage Note,
and CRIIMI MAE has not received actual notice of any event (other than
payments due but not yet delinquent) that, with the passage of time or
with notice and the expiration of any grace or cure period, would
constitute such a material default, breach or event of acceleration;
provided, however, that this representation and warranty does not cover
any default, breach or event of acceleration that specifically pertains
to any matter otherwise covered by any other representation and
warranty made by CRIIMI MAE herein. CRIIMI MAE has not waived any
material default, breach, violation or event of acceleration existing
under the related Mortgage or Mortgage Note.
(v) EQUITY PARTICIPATION OR PARTICIPATION INTEREST. Excerpt as
disclosed in the related underwriting memorandum, such Mortgage Loan
does not contain any equity participation by CRIIMI MAE or any other
Person and is a whole loan and not a
participation certificate; neither the related Mortgage Note nor the
related Mortgage provides for negative amortization or any contingent
or additional interest in the form of participation in the cash flow of
the related Mortgaged Property. Except as so disclosed, CRIIMI MAE has
no ownership interest in such Mortgaged Property or the related
Mortgagor.
(vi) COMPLIANCE WITH APPLICABLE LAWS. Such Mortgage Loan
either complies with or is exempt from applicable state or federal
laws, regulations and other requirements pertaining to usury. CRIIMI
MAE has complied in all material respects, with the requirements of any
and all other federal, state or local laws applicable to the
origination, servicing and collection of such Mortgage Loan, including
without limitation, if applicable, truth-in-lending, real estate
settlement procedures, equal credit opportunity and disclosure laws.
(vii) PROCEEDS FULLY DISBURSED. Except as disclosed in the
related underwriting memorandum, the proceeds of such Mortgage Loan
will be fully disbursed as of the closing Date, and there is no
requirement for future advances thereunder. All costs, fees and
expenses incurred in connection with the origination and closing of
such Mortgage Loan, including, without limitation, recording costs and
fees, have been paid to the appropriate person or arrangements have
been made for their payment to the appropriate person on a timely basis
by the related Mortgagor.
(viii) DOCUMENTS VALID. Each of the related Mortgage Note, the
related Mortgage and any other related Mortgage Loan document is the
legal, valid and binding obligation of the related borrower, the
related guarantor or other party executing such document, enforceable
in accordance with its terms, subject to any non-recourse provisions in
the Mortgage Loan documents and applicable state anti-deficiency laws,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws relating to or
affecting the rights of creditors generally and by general principles
of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law). There is no valid offset, defense,
counterclaim or right of rescission with respect to such Mortgage Note,
Mortgage or other Mortgage Loan document, nor will the operation of any
of the terms of such Mortgage Note or such Mortgage, or the exercise of
any right thereunder, render either such Mortgage or such Mortgage Note
unenforceable or subject to any valid right of rescission, offset,
counterclaim or defense, including without limitation the defense of
usury, and to CRIIMI MAE's knowledge, no such right of rescission,
offset, counterclaim or defense has been asserted or is available with
respect thereto.
(ix) ASSIGNMENT OF MORTGAGE; MORTGAGE NOTE ENDORSEMENT. The
related Assignment of Mortgage is in recordable form and shall, upon
completion in the name of CRE's transferee, evidence CRE's valid and
binding assignment to such transferee of the related Mortgage and any
related assignment of leases, rents and profits.
(x) FIRST LIEN. The related Mortgage is a legal, valid and
enforceable first lien on the related Mortgaged Property (including all
buildings and improvements on such Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating
and air conditioning systems located in or annexed to such buildings,
and all additions, alterations and replacements made at any time prior
to the Closing Date of such Mortgage Loan with respect to the
foregoing, but excluding any related personal property), which
Mortgaged Property is free and clear of all encumbrances and liens
having priority over the first lien of such Mortgage, except for (1)
the lien of current real estate taxes and special assessments not yet
delinquent or accruing interest or penalties, (2) covenants, conditions
and restrictions, rights of way, easements and other matters of public
record as of the date of recording of such mortgage that do not or will
not materially and adversely (A) affect the value of such Mortgaged
Property as security for such Mortgage Loan, or (B) interfere with the
related Mortgagor's ability to make required principal and interest
payments or to make use of such Mortgaged Property for the intended
purposes therefor, (3) leases and subleases pertaining to such
Mortgaged Property that are not required pursuant to the Underwriting
Guidelines to be subordinated to the lien of such Mortgage, and (4)
other matters to which like properties are commonly subject which do
not or will not, individually or in the aggregate, materially and
adversely (A) affect the value of such Mortgaged Property as security
for such Mortgage Loan, or (B) interfere with the related Mortgagor's
ability to make required principal and interest payments or to make use
of such Mortgaged Property for the intended purposes therefor.
(xi) APPROVED LOAN DOCUMENTS. The Mortgage Loan was originated
on approved Loan Documents.
(xii) MODIFICATIONS AND WAIVERS. The terms of the Mortgage and
the Mortgage Note for such Mortgage Loan have not been impaired,
waived, altered or modified in any manner which materially interferes
with the security intended to be provided by the Mortgage or the
benefits intended to be provided by the Mortgage Note.
(xiii) NO TAXES OR ASSESSMENTS DELINQUENT. Based upon the
applicable laws, rules and regulations of the taxing authorities having
jurisdiction over the related Mortgaged Property (excluding any related
personal property), no tax or governmental assessment, or if payable in
installments, no installment thereof, that became due and owing prior
to the closing date in respect of such Mortgaged Property and that, if
left unpaid, would be, or might become, a lien on such Mortgaged
Property having priority over the related mortgage, has become
delinquent such that (a) such tax, assessment or installment has
commenced to accrue interest or penalties, or (b) any such taxing
authority may commence proceedings to collect such tax, assessment or
installment, as applicable.
(xiv) ESCROW DEPOSITS. The related escrow account(s), if any,
contains all escrow deposits and other escrow payments required by the
terms of the related Mortgage Loan documents (inclusive of any
applicable grace or cure period) to be held by the Mortgagee as of the
Closing Date. To the extent not being transferred to CRE, all escrow
deposits and other escrow payments required under the related Mortgage
Note, the related Mortgage and any other related Mortgage Loan
documents have been applied in accordance with their intended purposes
by CRIIMI MAE or its agent.
(xv) NO CONDEMNATION OR DAMAGES. No proceedings for the total
or partial condemnation of the related Mortgaged Property (1) have
occurred or (2) to CRIIMI MAE's knowledge, are pending or threatened
other than, each such case, proceedings as to partial condemnation
which do not materially and adversely affect the value of such
Mortgaged Property as security for such Mortgage Loan. Such Mortgaged
Property is being used for the purpose(s) set forth in the Commitment
Letter executed by the related Mortgagor (or an Affiliate thereof) in
connection with the origination of such Mortgage Loan and, to CRIIMI
MAE's knowledge, is in good repair and free of any damage, waste or
defective condition that would materially and adversely affect the
value of such Mortgaged Property as security for such Mortgage Loan or
the use for which such Mortgaged Property was intended at the time of
origination of such Mortgage Loan.
(xvi) NO MECHANICS' LIENS. The related Mortgaged Property
(excluding any related personal property) is free and clear of any
mechanics' and materialmen's liens or liens in the nature thereof, and
no rights are outstanding that, under law, could give rise to any such
liens, if any of such liens are or may be prior to, or equal with, the
lien of the related mortgage, except those which are insured against by
the related lender's title insurance policy referred to in Section II
(xviii) below.
(xvii) TITLE SURVEY; IMPROVEMENTS. The related Mortgage File
includes an as-built survey, a survey recertification, a site plan, a
recorded plat or the like, with respect to the related Mortgaged
Property, that satisfied the requirements of the related title
insurance company for deletion of the standard general exceptions for
encroachments, boundary and other survey matters and for easements not
shown by the public records from the related title insurance policy,
except with respect to any of the Mortgaged Properties located in the
State of Texas where the exception for "Shortages in area" and
easements not shown by the public records could not be deleted and is
customarily accepted by prudent commercial mortgage lenders in such
jurisdiction. Except for encroachments and similar matters which do not
materially and adversely affect the value of such Mortgaged Property as
security for such Mortgage Loan, (i) none of the improvements which
were included for the purpose of determining the Appraised Value of
such Mortgaged Property lies outside the boundaries and building
restriction lines of such Mortgaged Property (unless affirmatively
covered by the title insurance referenced in (xix) below), and (ii) no
improvements on adjoining properties materially encroach upon such
Mortgaged Property so as to materially and adversely affect the value
of such Mortgaged Property as security for such Mortgage Loan.
(xviii) COMPLIANCE WITH LAWS. To CRIIMI MAE's knowledge (based
upon a letter or letters from governmental authorities, a legal
opinion, an endorsement or endorsements to the related title insurance
policy, a representation of the related borrower at the time of
origination of such Mortgage Loan, a representation or opinion obtained
from the seller or borrower or other information acceptable to CRIIMI
MAE at the time of such purchase), (1) no improvements located on or
forming a part of the related Mortgaged Property are in violation of
any applicable zoning and building laws or ordinances, (2) the related
Mortgaged Property complies with all other laws and regulations
pertaining to the use and occupancy thereof, excluding Environmental
Laws (as defined and addressed in (xxxvii) and (xxxviii) below), and
all applicable insurance
requirements, (3) the Mortgagor has obtained all inspections, licenses,
permits, authorizations, and certificates necessary for such
compliance, including, but not limited to, certificates of occupancy,
and (4) no governmental authority has issued any notification that such
Mortgaged Property violates or does not comply with such laws or
regulations or is being used, operated or occupied unlawfully or that
such Mortgagor has failed to obtain such inspections, licenses or
certificates, except (in the case of any of clauses (1), (2), (3) or
(4)) for such violation or non-compliance (A) which does not materially
and adversely affect the value of such Mortgaged Property as security
for such Mortgage Loan or the use for which such Mortgaged Property was
intended at the time of origination of such Mortgage Loan, (B) which is
specifically addressed by the appraiser in the determination of the
related Appraised Value, or (C) for which an escrow account held for
the Mortgagee has been established in an amount sufficient to pay for
the estimated costs to correct such violations or non-compliance.
(xix) TITLE INSURANCE. The lien of the related Mortgage is
insured by an ALTA lender's title insurance policy or, if an ALTA
lender's title insurance policy is unavailable, another state-approved
form of lender's title insurance policy issued in an amount not less
than the stated principal amount of such Mortgage Loan (after all
advances of principal) insuring CRE and its successors and assigns that
the related Mortgage as a valid first lien on the related Mortgaged
Property, subject only to exceptions described in Section II (x) above
(or, if such a title insurance policy has not yet been issued in
respect of any Mortgage Loan, such a policy will be issued and is
currently evidenced by a pro forma, or specimen policy or by a
"marked-up" commitment for title insurance which was furnished by the
related title insurance company for purposes of closing such Mortgage
Loan). Such title insurance policy is (or, when issued, will be) in
full force and effect, and upon payment of any required additional
premium, issuance of the related Mortgage Note to CRE and recording of
the related mortgage or assignment of mortgage in favor of CRE in the
applicable real estate records, such title insurance policy will inure
to the benefit of CRE. Such title insurance policy (1) does not contain
the standard general exceptions for encroachments, boundary or other
survey matters and for easements not shown by the public records, other
than such exceptions as are customarily accepted by prudent commercial
mortgage lenders in the related jurisdiction, and (2) contains only
such exceptions for boundary, encroachments and survey matters as are
customarily accepted by prudent commercial mortgage lenders. CRIIMI MAE
will not take, or omit to take, any action, and to CRIIMI MAE's
knowledge, no other person has taken, or omitted to take, any action,
that would materially impair the coverage benefits of any such title
insurance policy.
(xx) APPRAISAL. CRIIMI MAE has obtained an Appraisal of the
related Mortgage Property by an MAI-certified appraiser duly appointed
by CRIIMI MAE who had no interest, direct or indirect in such Mortgaged
Property or in any loan made on the security thereof, whose
compensation under the terms of the appraiser's engagement was not
(directly or indirectly) based upon the approval or disapproval of such
Mortgage Loan (other than a reduction of such compensation due to any
early termination of the engagement). Such Appraisal satisfies all
requirements of this Agreement. The market
value used by CRIIMI MAE in calculating the Loan-to-Value Ratio of such
Mortgage Loan was not greater than the appraised value as set forth in
the Appraisal.
(xxi) INSURANCE RELATED TO MORTGAGED PROPERTY. The related
Mortgaged Property is insured by (a) a fire and extended perils
insurance policy providing coverage on a full replacement cost basis in
an amount not less than the lesser of (1) the full replacement cost of
all improvements to such Mortgaged Property and (2) the outstanding
principal balance of such Mortgage Loan, but in any event in an amount
sufficient to avoid the operation of any co-insurance provisions
contained in such insurance policy, which policy contains a standard
mortgagee clause naming the Mortgagee and its successors as additional
insureds; (b) an insurance policy providing business interruption or
rental continuation coverage in an amount not less than 12 months of
operations of such Mortgaged Property; (c) a comprehensive general
liability insurance policy in an amount not less than $1 million per
occurrence; and (d) if any material improvement on such Mortgaged
Property is located in an area identified by the Federal Emergency
Management Agency as having special flood hazards under the National
Flood Insurance Act of 1968, as amended, a flood insurance policy
providing coverage in an amount not less than the lesser of (A) the
stated principal amount of the related Mortgage Note, and (B) the
maximum amount of insurance available under the Flood Disaster
Protection Act of 1973, as amended. Each such insurance policy contains
a clause providing that it is not terminable and may not be reduced
without 30 days prior written notice to the mortgagee, and no such
notice has been received by any person. With respect to each such
insurance policy, either the seller or CRIIMI MAE has received a
certificate of insurance or similar document dated within the last 12
months to the effect that such policy is in full force and effect.
(xxii) UCC FINANCING STATEMENTS. One or more Uniform
Commercial Code financing statements covering all furniture, fixtures,
equipment and other personal property (1) which are collateral under
the related Mortgage or under a security or similar agreement executed
and delivered in connection with such Mortgage Loan, and (2) in which a
security interest can be perfected by the filing of Uniform Commercial
Code financing statement(s) under applicable law have been filed or
recorded (or have been sent for filing or recording) in all Uniform
Commercial Code filing offices necessary to the perfection under
applicable law, of a security interest in such furniture, fixtures,
equipment and other personal property.
(xxiii) LITIGATION. To CRIIMI MAE's knowledge, there are no
pending or threatened actions, suits or proceedings by or before any
court or governmental authority against or affecting the Mortgagor
under any Mortgage Loan or the related Mortgaged Property that, if
determined adversely to such Mortgagor or Mortgaged Property, would
materially and adversely affect the value of the Mortgaged Property or
the ability of the Mortgagor to pay principal, interest or any other
amounts due under such Mortgage Loan.
(xxiv) BANKRUPTCY AND INSOLVENCY. To CRIIMI MAE's knowledge,
no Mortgagor under the Mortgage Loan is a debtor in any state or
federal bankruptcy or insolvency proceeding.
(xxv) CUSTOMARY PROVISIONS. The related Mortgage Note and the
related Mortgage contain customary and enforceable provisions such as
to render the rights and remedies of the holder thereof adequate for
the practical realization against the related Mortgaged Property of the
benefits of the security, including, but not limited to, judicial or,
if applicable, nonjudicial foreclosure.
(xxvi) ACCESS ROUTES. Surveys, title insurance reports, the
title insurance policy and other relevant documents contained in the
related Mortgage File indicate that (1) the Mortgagor has sufficient
rights with respect to amenities, ingress and egress and similar
matters identified in the appraisal of the related Mortgaged Property
as being critical to the Appraised Value thereof, and (2) such
Mortgaged Property is receiving adequate services from public or
private water, sewer and other utilities, none of which is subject to
revocation as a result of a foreclosure or change in ownership of an
adjacent property.
(xxvii) RELEASE OF LIEN. The related Mortgage Note or Mortgage
does not require the Mortgagee to release all of the related Mortgaged
Properties from the lien of the related Mortgage except upon payment in
full of all amounts due under such Mortgage Loan.
(xxviii) APPLICATION OF INSURANCE PROCEEDS. Any insurance
proceeds in respect of a casualty loss or taking, will be applied
either to the repair or restoration of all or part of the related
Mortgaged Property, with the mortgagee or a trustee appointed by it
having the right to hold and disburse such proceeds as the repair or
restoration progresses, or to the payment of the outstanding principal
balance of such mortgage loan together with any accrued interest
thereon.
(xxix) SERVICING. The servicing and collection practices used
with respect to the Mortgage Loan have complied with all applicable law
in all material respects and are consistent with the standards applied
by prudent servicers of Mortgage Loans of the same type as the Mortgage
Loan.
(xxx) DELINQUENCY ADVANCES. No holder of such Mortgage Loan
has, to CRIIMI MAE's knowledge, advanced funds or induced, solicited or
knowingly received any advance of funds from a party other than the
owner of the related Mortgaged Property, directly or indirectly, for
the payment of any amount required by such Mortgage Loan.
(xxxi) MORTGAGE LOANS SECURED BY GROUND LEASE AND NOT BY FEE
INTEREST. With respect to each Mortgage Loan that is secured in whole
or in part by the interest of the related Mortgagor as lessee under a
ground lease of all or a portion of the related Mortgaged Property (a
"Ground Lease"), but the related fee interest in the portion of such
Mortgaged Property covered by such Ground Lease (the "Fee Interest") is
not subject or subordinate to the lien of the related mortgage, CRIIMI
MAE hereby represents and warrants that:
(1) to CRIIMI MAE's knowledge: (A) such Ground Lease
is in full force and effect, (B) such Ground Lease or a
memorandum thereof has been
recorded in the applicable real estate records, (C) such
Ground Lease does not prohibit the interest of the related
lessee thereunder from being encumbered by the related
Mortgage, or a separate written agreement permitting such
encumbrance has been obtained, and (D) there have been no
material changes in the terms of such Ground Lease except as
so forth in written instruments which are part of the related
Mortgage File;
(2) except as may be indicated in the related title
insurance policy or commitment, the related lessee's leasehold
interest in the portion of the related Mortgaged Property
covered by such Ground Lease is not subject to any liens or
encumbrances superior to, or of equal priority with, the
related Mortgage and the lessor has not entered into any
agreement to subordinate the Ground Lease to future mortgages
or liens on the Fee Interest;
(3) the related lessee's interest in such Ground
Lease may be transferred to CRE and its successors and assigns
through foreclosure of the related mortgage or conveyance in
lieu of foreclosure and, thereafter, may be transferred to
another person by the Mortgagee and its successors and
assigns, upon notice to, but without the consent of, the
related lessor (or, if any such consent is required, either
(A) it has been obtained prior to the Closing Date, or (B) it
is not to be unreasonably withheld) provided that such Ground
Lease has not been terminated and all amounts owed thereunder
have been paid;
(4) the related lessor is required to give notice of
any default under such Ground Lease by the related lessee to
the Mortgagee either under the terms of such Ground Lease (the
related lessor having received notice of the related Mortgage)
or under the terms of a separate written agreement;
(5) the Mortgagee is entitled, under the terms of
such Ground Lease or a separate written agreement, to receive
notice of any default by the related lessee under such Ground
Lease, and after any such notice is entitled to the time
provided to the related lessee under such Ground Lease to cure
such default;
(6) the currently effective term of such Ground Lease
(excluding any extension or renewal which is not binding on
the lessor thereunder) extends not less than 10 years beyond
the maturity date of the related Mortgage Loan;
(7) such Ground Lease does not impose any
restrictions on subletting that CRIIMI MAE considers to be
commercially unreasonable at the time of its origination;
(8) the lessee has not received any notice that (A)
the related lessor under such Ground Lease is asserting a
default by the related lessee or an event of default
thereunder, or (B) any event has occurred which, with the
passage of time, the giving of notice, or both (other than
rental or other payments being due, but not yet delinquent),
would result in a default or an event of default under the
terms of such Ground Lease;
(9) the related lessor has agreed in a writing which
is included in the related mortgage file that such Ground
Lease may not be amended, modified, canceled or terminated
without the prior written consent of the Mortgagee and that
any such action without such consent is not binding upon the
Mortgagee; and
(10) under the terms of such Ground Lease and the
related Mortgage, any related insurance proceeds or
condemnation award (other than in respect of a total or
substantially total loss or taking) will be applied either to
the repair or restoration of all or part of the related
Mortgaged Property covered by such Ground Lease, with the
Mortgagee or a trustee appointed by it having the right to
hold and disburse such proceeds as such repair or restoration
progresses, or to the payment of the outstanding principal
balance of or accrued interest on such Mortgage Loan.
(xxxii) MORTGAGE LOANS SECURED BY BOTH GROUND LEASE AND FEE
INTEREST. With respect to each Mortgage Loan that is secured in whole
or in part by the interest of the related Mortgagor as lessee under a
Ground Lease of all or a portion of the related Mortgaged Property, and
as to which the related Fee Interest is subject or subordinate to the
lien of the related mortgage, (1) such fact is set forth in the
mortgage file or the underwriting memorandum, and (2):
(A) such Fee Interest is subject or subordinated of
record to such mortgage; and such Mortgage does not by its
terms provide that it will be subordinated to the lien of any
other mortgage or encumbrance upon such Fee Interest; and
(B) except as disclosed in writing in the related
Mortgage File and as approved in writing by CRE, upon
occurrence of a default under the terms of such Mortgage by
the related Mortgagor, any right of the related lessor to cure
such default (granted to such lessor under any agreement
binding upon the originator or its successors and assigns)
would entitle such lessor, prior to acceleration of the
maturity of such Mortgage Loan and the commencement of
foreclosure of such Mortgage, to be given notice of such
default and (I) no more than 30 days after such notice, to
cure any default in the payment of principal or interest or
other monetary default under such Mortgage, and (II) no more
than 60 days after such notice, to cure any other default or,
alternatively, to commence proceedings to recover possession
of such Mortgage Property plus a reasonable opportunity to
cure such default after such lessor's recovery of possession
if such lessor pursues such proceedings in good faith and with
due diligence.
(xxxiii) DEED OF TRUST. With respect to any related Mortgage
that is a deed of trust or trust deed, a trustee, duly qualified under
applicable law to serve as such, either has been properly designated
and currently so saves or may be substituted in accordance with
applicable law. Except in connection with a trustee's sale after
default by the related Mortgagor or in connection with the release of
the related Mortgaged Property following
the payment of such Mortgage Loan in full, no fees or expenses are or
will be payable by the Mortgagee to such trustee.
(xxxiv) CROSS-SECURITY. Except as disclosed in the related
underwriting memorandum, the related Mortgaged Property is not
collateral or security for the payment or performance of any other
obligations owed to any Person other than the Mortgagee thereunder,
except for security interests in personal property and fixtures.
(xxxv) ASSIGNMENT OF LEASES, RENTS AND PROFITS. Unless the
related Mortgaged Property is occupied by the related Mortgagor, the
related Mortgage Loan documents contain the provisions of any
assignment of leases, rents and profits or include a separate
assignment of leases, rents and profits. Any related assignment of
leases, rents and profits incorporated within the related Mortgage or
set forth in a separate Mortgage Loan document creates a valid first
priority assignment of, or security interest in, the right to receive
all payments due under the related leases, if any.
(xxxvi) QUALIFIED MORTGAGE. (1) Such Mortgage Loan is
principally secured by an interest in real property and either (A) the
fair market value of such real property was at least equal to 80% of
the adjusted issue price of such Mortgage Loan on the date of
origination or, if such Mortgage Loan has been "significantly modified"
within the meaning of Section 1001 of the Code, on the date of such
modification (unless such modification may be disregarded under Treas.
Reg. Sec. 1.860G-2(b)(3)), or (B) substantially all of the proceeds of
such Mortgage Loan were used to acquire or improve or protect an
interest in real property that, at origination, was the only security
for such Mortgage Loan; (2) except as disclosed in the related
underwriting memorandum, such Mortgage Loan contains no equity
participation by the Mortgage, and neither the related Mortgage Note
nor the related Mortgage provides for any contingent or additional
interest in the form of participation in the cash flow or proceeds
realized on disposition of the related Mortgaged Property; and (3) such
Mortgage Loan is a "qualified mortgage" as defined in, and for purposes
of, Section 860G of the Code.
(xxxvii) ENVIRONMENTAL ASSESSMENT. (1) In connection with the
origination of such Mortgage Loan, a Phase I Environmental Report and,
if recommended by the Phase I Environmental Report, a Phase II
Environmental Report were obtained with respect to the related
Mortgaged Property from an independent environmental engineer or
consultant; and (2) such Environmental Report(s) did not indicate the
existence of conditions or circumstances respecting such Mortgaged
Property that would (A) constitute or result in a material violation of
any applicable Environmental Law, (B) impose any material constraint on
the operation of such Mortgaged Property or require material change in
the use thereof, or (C) require clean-up, remedial action or other
response with respect to Hazardous Materials on or affecting such
Mortgaged Property under any applicable Environmental Law, with the
exception of conditions or circumstances (I) which such Environmental
Report(s) indicated could be cleaned up, remediated or brought into
compliance with applicable Environmental Law by the taking of certain
actions, and (II) either (a) for which a hold-back or other escrow of
funds not less than the costs of taking such clean-up, remediation or
compliance actions have been taken, or (b) for which an environmental
insurance policy (which policy shall be issued by an insurance company
which is duly qualified as such under the laws of the states in which
the mortgaged
properties (including the Mortgaged Property) insured by such company
are located, duly authorized and licensed in such states to transact
the applicable insurance business and write the insurance provided, and
whose claims-paying ability with respect to hazard and flood insurance
is rated A:V or better (or the equivalent in any successor rating
system) by Best's Key Rating Guide) in an amount satisfactory to CRIIMI
MAE has been obtained by the related borrower or an indemnity for such
costs has been obtained from a potentially culpable party, or (c) such
clean up, remediation or compliance actions in compliance with
applicable Environmental law have been completed prior to the closing
of such Mortgage Loan. To CRIIMI MAE's knowledge, neither the borrower
nor, in the case of a Section 1.06 Loan, the seller, has taken any
action which would cause either such Mortgaged Property to become
subject to liability under CERCLA. For purposes of this Agreement, the
term "ENVIRONMENTAL LAW" shall mean any environmental law, ordinance,
rule, regulation or order of a federal, state or local governmental
authority, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability act of 1980, as
amended (42 U.S.C. xx.xx. 9601 ET SEQ.) ("CERCLA"), the Hazardous
Material Transportation Act, as amended (49 U.S.C. xx.xx. 1801 ET
SEQ.), the Resource Conservation and Recovery Act, as amended (42
U.S.C. xx.xx. 6901 ET SEQ.), the Federal Water Pollution Control Act,
as amended (33 U.S.C. xx.xx. 1251 ET. SEQ.), the Clean Air Act, as
amended (42 U.S.C. xx.xx. 7401 ET. SEQ.) and the regulations
promulgated pursuant thereto. For purposes of this Agreement,
"HAZARDOUS MATERIALS" shall mean any dangerous, toxic or hazardous
pollutants, chemicals, wastes or substances, including, without
limitation, those so identified pursuant to CERCLA or any including,
without limitation, asbestos and asbestos-containing materials,
polychlorinated biphenyls ("PCBs"), radon gas, petroleum and petroleum
products, urea formaldehyde and any substances classified as being "in
inventory", "usable work in process" or similar classification which
would, if classified as unusable, be included in the foregoing
definition.
(xxxviii) NOTICE OF ENVIRONMENTAL PROBLEM. Other than with
respect to any conditions identified in the Phase I and/or Phase II
Environmental Reports referred to in Section (xxxi) above: (1) has
received actual notice form any federal, state or other governmental
authority of (A) any failure of the related Mortgaged Property to
comply with any applicable Environmental Laws, or (B) any known or
threatened release of Hazardous Materials on or from such Mortgaged
Property in violation of Environmental Laws; or (2) has received actual
notice from the related Mortgagor that (A) such borrower has received
any such notice from any such governmental authority, (B) such
Mortgaged Property fails to comply with Environmental Laws, or (C) has
received actual notice that there is any known or threatened release of
Hazardous Materials on or from such Mortgaged Property in violation of
Environmental Laws; or (3) has any actual knowledge that (A) the
related Mortgaged Property fails to materially or significantly comply
with any applicable Environmental Law or (B) there has been any known
or threatened material or significant release of Hazardous Materials on
or from such Mortgaged Property in violation of any applicable
Environmental Law.
(xxxix) RECOURSE. Except as set forth in the related
underwriting memorandum, the related Mortgage Loan documents contain
standard provisions providing for recourse
against the related Mortgagor for damages sustained in connection with
the borrower's fraud, intentional misrepresentation, or
misappropriation of any tenant security deposits or rent. Except as set
forth in the related underwriting memorandum, the related Mortgage Loan
documents contain provisions pursuant to which the related Mortgagor
has agreed to indemnify the Mortgagee for damages resulting from
violations of Environmental Laws.
(xxxx) LEASES. With respect to each Mortgage Loan: (1) prior
to either the origination of such Mortgage Loan or the funding of such
Mortgage Loan by CRE, or CRIIMI MAE obtained tenant estoppel
certificates from all tenants whose leases covered more than 10% of the
net leaseable area of the related Mortgaged Property; and based upon
such tenant estoppel certificates, no defaults with respect to any such
lease existed as of the date of the related tenant estoppel
certificate; and (2) neither CRIIMI MAE nor the originator has received
any notice of the existence of any default under any such lease or of
the existence of any condition which but for the passage of time or the
giving or notice, or both, would result in such a default.
(xxxxi) ENVIRONMENTAL COMPLIANCE. One or more of the related
Mortgage Loan documents contains either a representation, warranty or
covenant that the related borrower will not use, cause or permit to
exist on the related Mortgaged Property any Hazardous Materials in
violation of Environmental Law or an indemnity with respect to any such
violation in favor of the mortgagee.
(xxxxii) INSPECTION. CRIIMI MAE has inspected the related
Mortgaged Property or caused such Mortgaged Property to be inspected in
connection with the origination of the Mortgage Loan.
(xxxxiii) SUBORDINATE DEBT. Except as has been specifically
disclosed in writing to CRE on or before the Closing Date, the related
Mortgage contains a provision for the acceleration of the payment of
the unpaid principal balance of such Mortgage Loan in the event that
the related Mortgagor encumbers the related Mortgaged Property without
the prior written consent of the Mortgagee thereunder.
(xxxxiv) COMMON OWNERSHIP. No two properties securing a
Mortgage Loan are directly or indirectly under common ownership except
to the extent that such common ownership and the ownership structure
has been specifically disclosed in writing to CRE.
(xxxxv) OPERATING OR FINANCIAL STATEMENT. The related Mortgage
Loan documents require the related Mortgagor to furnish to the
mortgagee at lease annually an operating statement with respect to the
related Mortgaged Property or, in the case of a borrower- occupied
Mortgaged Property, a financial statement with respect to the related
borrower.
EXHIBIT C
FORM OF CRIIMI MAE CLOSING CERTIFICATE
EXHIBIT D
CONTENTS OF MORTGAGE FILE
NO. DOCUMENT NAME
-- -------------
BORROWER ORGANIZATIONAL DOCUMENTS
Corporate Borrower
1 Certificate of Incorporation and all amendments thereto,
certified as filed by Secretary of State where incorporated
2 By-Laws certified by Borrower
3 Certificate of Good Standing issued by Secretary of State
where incorporated
4 Certificate of Good Standing issued by Secretary of State
where property is located
5 Certificate of Corporate Resolutions and Incumbency
6 Receipt of current year's Franchise Tax payment (if required)
7 Affidavit of Corporate Borrower re ownership of stock (if
required)
General Partnership Borrower
8 Partnership Agreement and all amendments thereto, certified
by Borrower
9 Partnership Certificate and all amendments thereto, certified as
filed by appropriate office in state where organized
10 Evidence of qualification in state where property is located
11 Partner consents to the loan and the execution of the loan
documents by the executing partner (if required)
Limited Partnership Borrower
12 Certificate of Limited Partnership and all amendments
thereto, certified as filed by appropriate office in state
where organized
13 Limited Partnership Agreement and all amendments thereto,
certified by Borrower
14 Evidence of Publication
15 Fictitious Name Affidavit or Certificate of Limited
Partnership certified as filed by appropriate office in state
where property is located
16 Limited Partner consents to the loan and the execution of the loan
documents by the executing partner (if required)
Corporate General Partner of Borrower
17 Certificate of Incorporation and all amendments thereto, certified
as filed by Secretary of State where incorporated
18 By-laws, certified by corporate general partner of Borrower
19 Certificate of Good Standing issued by Secretary of State
where incorporated
20 Certificate of Corporate Resolutions and Incumbency
21 Receipt of current year's Franchise Tax payment (if required)
22 Affidavit of Corporate General Partner of Borrower re:
ownership of stock (if required)
Partnership General Partner of Borrower
23 Partnership Agreement and all amendments thereto, certified by
General Partner of Borrower
24 Partnership Certificate and all amendments thereto, certified as
filed by appropriate office in state where organized
25 Partner consents to the loan and the execution of the loan
documents by the executing partner (if required)
Corporate Guarantor
26 Certificate of Incorporation and all amendments thereto, certified
as filed by Secretary of State where incorporated
27 By-Laws, certified by Guarantor
28 Certificate of Good Standing issued by Secretary of State
where incorporated
29 Certificate of Corporate Resolutions and Incumbency
30 Receipt of current year's Franchise Tax payment (if required)
31 Affidavit of Corporate Guarantor re ownership of stock (if
required)
Partnership Guarantor
32 Partnership Agreement and all amendments thereto, certified
by Guarantor
33 Partnership Certificate and all amendments thereto, certified as
filed by appropriate office in state where organized
34 Partner consents to the loan and the execution of the Guaranty of
Payment by the executing partner (if required)
Corporate General Partner of Guarantor
35 Certificate of Incorporation and all amendments thereto, certified
as filed by Secretary of State where incorporated
36 By-Laws, certified by corporate general partner of Guarantor
37 Certificate of Good Standing issued by Secretary of State
where incorporated
38 Certificate of Corporate Resolutions and Incumbency
39 Receipt of current year's Franchise Tax payment (if required)
40 Affidavit of Corporate General Partner of Guarantor re
ownership of stock (if required)
Partnership General Partner of Guarantor
41 Partnership Agreement and all amendments thereto, certified by
General Partner of Guarantor
42 Partnership Certificate and all amendments thereto, certified as
filed by appropriate office in state where organized
43 Partner consents to the loan and the execution of the Guaranty of
Payment by the executing partner (if required)
FINANCIAL STATEMENTS
44 Financial Statement of Borrower (audited by a nationally recognized
firm of certified public accountants, if required)
45 Financial Statement of General Partner of Borrower (audited
by a nationally recognized firm of certified public
accountants, if required)
46 Financial Statement of Guarantor (audited by a nationally
recognized firm of certified public accountants, if required)
47 Financial Statement of General Partner of Guarantor (audited
by a nationally recognized firm of certified public
accountants, if required)
48 Operating Statement of property, prepared and certified by
Borrower
APPRAISAL, INVENTORY AND INSPECTION
49 Appraisal of property
50 Inspection of property
51 Evidence of required Borrower equity in property
52 Inventory of personal property
GROUND LEASES
53 Ground Lease, including all amendments, modifications and mesne
assignments into Borrower
54 Recorded memorandum of Ground Lease
55 Estoppel Letter of Ground Lessor
56 Notice from Lender to Ground Lessor (if required)
57 Subordination of existing fee mortgages to current leasehold
mortgage
SPACE LEASES
58 Space leases, including all modifications and amendments
thereto
59 Form of residential space lease
60 Form of commercial space lease
61 Tenant estoppel letters
62 Subordination Agreements (if required)
63 Subordination, Non Disturbance and Attornment Agreements (if
required)
64 Certified Rent Roll or Occupancy Statement
65 291-F Notices to space tenants
ACQUISITION DOCUMENTS
66 Contract of Sale
67 Proposed Deed
68 Proposed purchase money mortgage/deed of trust and note (if
applicable)
69 Closing Statement of Sale
70 Affidavit of Seller that it is not a foreign person
LAND TRUST DOCUMENTS
71 Deed in Trust from Borrower to Trustee, certified by Borrower
72 Beneficiary Agreement among principals of Borrower, certified
by Borrower
73 Form of General Authorization from Borrower to Trustee
74 Trust Agreement between Borrower and Trustee, certified by
Borrower
75 Security Agreement and Assignment of Beneficial Interest in Trust
from Borrower to Lender, as acknowledged by Trustee
76 UCC-1 to be filed in connection with the Security Agreement
HOTEL DOCUMENTS
77 Franchise Agreement
78 Management Agreement
79 Other service and operating agreements
80 License and concessionaire agreements
81 Permits, licenses and approvals required for the use of the
property as a hotel
82 Evidence that service and operating agreements, permits,
licenses, approvals, bank accounts and accounts receivable
are in the name of Borrower
83 Estoppel/Recognition Letter from Franchisor
84 Estoppel/Recognition Letter from Management Company
85 Estoppel/Recognition Letters from parties to other service and
operating agreements (if required)
86 Estoppel Letters from parties to license and concessionaire
agreements
87 Assignment of Franchise and Management Agreements, Contracts
and Permits
88 List of Personal Property
89 Leases and financing agreements with respect to furniture, fixtures
and equipment
90 Subordination of prior financing agreements covering furniture,
fixtures and equipment (if required)
91 Key employee agreements (if required)
UNDERLYING COOPERATIVE LOAN DOCUMENTS
92 Copy of offering plan and all documents relating to creation of
cooperative form of ownership
93 Form of proprietary lease and all amendments thereto,
certified by Borrower
94 Rent Roll showing maintenance for leased units, names of
tenants, commencement and expiration dates of leases, number
of shares attributable to each unit, and amounts of any
security deposits or prepaid rents, certified to by Borrower
COMMERCIAL CONDOMINIUM DOCUMENTS
95 Copy of offering plan and all documents relating to creation of
cooperative form of ownership
96 Copy of recorded declaration of condominium
97 Estoppel Letter from condominium board of managers
ZONING, ENVIRONMENTAL, USE AND OCCUPANCY
98 Evidence that the property complies with all zoning laws
99 Evidence that the property complies with all environmental
laws
100 Hazardous Waste inspection by environmental consultant (if
required)
101 Asbestos Inspection by environmental consultant (if required)
102 Letter from architect with respect to completion of
Improvements and compliance with building and zoning laws (if
required)
103 Board of Fire Underwriters Certificate
104 Permanent Certificate of Occupancy
105 Other licenses, permits and approvals required for the use
and operation of the property
106 Nonapplicability letter from New Jersey Bureau of Industrial
Site Evaluation confirming that the Premises is not subject
to the Environmental Cleanup Responsibility Act (New Jersey
loan only)
107 Negative Declaration of Borrower as submitted to the New
Jersey Department of Environmental Protection (New Jersey
loan only)
108 Approval of Negative Declaration by New Jersey Department of
Environmental Protection (New Jersey loan only)
109 Superlien search with the Clerk of the Superior Court (New
Jersey loan only)
MANAGEMENT AGREEMENTS
110 Management Agreement
111 Other service and operating agreements
112 Evidence that service and operating agreements are in the
name of Borrower
113 Estoppel/Recognition Letter from Management Company
114 Estoppel/Recognition Letters from parties to other service and
operating agreements (if required)
115 Key employee agreements (if required)
116 Key employee insurance (if required)
CASUALTY INSURANCE POLICIES
117 All Risk
118 Boiler Damage and Liability Insurance
119 Business/Rental Interruption Insurance
120 Public Liability Insurance
121 Umbrella Insurance
122 Flood Insurance policy or evidence that premises are not
located in flood zone
123 Builder's Risk (construction loan only)
TITLE INSURANCE/SURVEYS
124 Title Insurance Commitment
125 Copies of all recorded easements, rights of way, restrictive
covenants, leases and other instruments of record
126 Approval of title company, co-insuring title insurance
companies and/or reinsuring title insurance companies (if
any), and amounts taken
127 Evidence that required co-insurance title policies will be issued
by companies and in amounts satisfactory to Lender
128 Evidence that required ALTA Direct Facultative Reinsurance
Agreements will be issued by companies and in amounts
satisfactory to Lender
129 UCC-1 Financing Statement search, tax lien search and
judgment search (Secretary of State and county where property
located and, if required by Lender, where Borrower is
organized)
130 Real Estate Tax Search
131 Municipal departmental violation searches, including environmental
lien searches
132 Survey (See Exhibit A attached hereto for survey
instructions)
133 Reciprocal easement agreements and restrictions, if any
134 Estoppel letter from parties to reciprocal easements and
restrictions, if any
135 Subordination Agreement from holders of all mortgages
encumbering adjacent tracts subject to reciprocal easements
and restrictions, if any
136 Subdivision Plat of property, as approved by all appropriate
governmental authorities
137 Planned Unit Development Documents, as approved by all appropriate
governmental authorities
138 Evidence of required affirmative insurance and special endorsements
required by Lender
139 Insured Closing Letter from title insurance company (if
required)
140 Title Insurance Policy
141 Co-insurance Policies
142 Reinsurance Agreements
SUBORDINATE MORTGAGES
143 Copies of all Existing Mortgages and Notes to be subordinated
to the Mortgage
144 Copies of all proposed subordinate mortgages and notes
145 Subordination Agreement subordinating Existing Mortgages and
Notes to the Mortgage
146 Estoppel letters from holders of subordinate mortgages
EXISTING MORTGAGES TO BE ASSIGNED
147 Recorded originals of all Existing Mortgages being assigned
to Lender and all amendments, modifications, consolidations
and mesne assignments relating thereto
148 Originals of all Notes secured by the Existing Mortgages being
assigned to Lender
149 Assignment(s) of the Existing Mortgages and the Notes secured
thereby to Lender
150 Borrower's Statement Under Oath for Assignment of Mortgage
151 UCC-3 Financing Statements assigning or terminating existing
UCC-1 Financing Statements
EXISTING MORTGAGES TO BE SATISFIED
152 Estoppel Certificate(s) or Pay-out letter(s) from the holder(s) of
the Existing Mortgages being assigned to Lender
153 Instructions from holder(s) of the Existing Mortgages as to
method of payment
154 Estoppel Certificate(s) or Pay-out letter(s) from the holder(s) of
the Existing Mortgages not assigned to Lender
155 Instructions from holder(s) of the Existing Mortgages not assigned
to Lender as to method of payment
156 Satisfactions of Existing Mortgages not assigned to Lender
157 UCC-3 Financing Statements terminating existing UCC-1 Financing
Statements
LOAN DOCUMENTS
158 Note
159 Mortgage and Security Agreement/Deed of Trust and Security
Agreement
160 Agreement of Consolidation and Modification of Mortgage/Deed
of Trust
161 Affidavit with respect to Section 255 of the New York Tax Law
with respect to the above document
162 Assignment of Leases and Rents
163 Affidavit with respect to Section 255 of the New York Tax Law
with respect to the above document
Other Loan Documents
164 Guaranty of Payment
165 Non-transfer of assets letter of spouse of Guarantor
166 Loan Agreement
167 Security Agreement with respect to furniture, fixtures and
equipment and other items of personal property
168 UCC-1 Financing Statements
169 Affidavit of Title
170 Assignment of Permits and Contracts with respect to the
property
171 Letter of Credit
172 Evidence of required confirming bank with respect to the
Letter of Credit
173 Subordination Agreement subordinating loans to Borrower by general
partner or stockholder of Borrower (if required)
174 Disbursement Letter from Borrower to Lender
175 Receipt of Title Company
176 Escrow Security Agreement
177 Tax Escrow Statements
178 IRS Form 1099B
179 ERISA Certification
OPINION LETTERS
180 Counsel for Borrower with respect to the due execution of the
loan documents and other matters
181 Counsel for General Partner of Borrower with respect to the due
execution of the loan documents and other matters
182 Counsel for Guarantor with respect to the due execution of
the Guaranty of Payment
183 Counsel for General Partner of Guarantor with respect to the due
execution of the Guaranty of Payment
184 Opinion Letter of Borrower's counsel with respect to
cooperative documents and the creation of cooperative form of
ownership
185 Opinion of Borrower's counsel with respect to condominium documents
and the creation of condominium regime
186 Counsel for Borrower with respect to zoning and environmental
matters (if required)
MISCELLANEOUS DOCUMENTS
187 Check Authorization Letter
188 Lender's Closing Statement
189 Lender's Closing Memorandum
190 Lender's Servicing Statement
191 Tax Authorization
192 Confirmation of billing address of Borrower
193 Borrower taxpayer identification number
EXHIBIT E-1
FORM OF COMMITMENT LETTER
EXHIBIT E-2
FORM OF COMMITMENT LETTER
58
EXHIBIT F
SAMPLE CALCULATIONS
INITIAL PRICING (%):
Loan Recourse Cash Collateral Xxxx -to-Market Loan Pricing
Value Obligation* Reserve Account * Reserve Account Reserve Account Citi Cushion**
100 5 5 0 0 10
97 5 5 0 3 10
93 5 5 0 7 10
XXXX TO MARKET ON LOANS INITIALLY PRICED AT PAR (%):
Loan Recourse Cash Collateral Xxxx -to-Market Loan Pricing
Value Obligation* Reserve Account * Reserve Account Reserve Account Citi Cushion**
96 3 1/2 5 1 1/2 0 6
93 1/2 5 4 1/2 0 3
90 0 5 7 1/2 0 2 1/2
85 0 5 12 1/2 0 2 1/2
XXXX TO MARKET ON LOANS INITIALLY PRICED BELOW PAR (%):
Initial Loan Recourse Cash Collateral Xxxx -to-Market Loan Pricing
Pricing Value Obligation* Reserve Account * Reserve Account Reserve Account Citi Cushion**
97 87 0 5 7 1/2 3 2 1/2
92 82 0 5 7 1/2 8 2 1/2
92 80 0 5 9 1/2 8 2 1/2
*Assumes subordination to BBB less than 16% and eligible loan. **" Citi Cushion"
refers to sum of reserves and recourse obligation held by CRE net of any
difference in the loan value and the par value of the loans, but not to decrease
below 2 1/2% in any case.