Exhibit 10.2

 

(Multicurrency- Cross Border)

 

 

SCHEDULE

to the

ISDA Master Agreement

 

dated as of August 6, 2004

between

Deutsche Bank AG, New York Branch (“Party A”)

and

CRIIMI Financing Co., Inc. (“Party B”)

 

Part 1.  Termination Provisions.

 

(a)                                  “Specified Entity” means:

 

(i)                                     in relation to Party A: Not Applicable

 

(ii)                                  in relation to Party B: Not Applicable

 

(b)                                 “Specified Transaction” shall have the
meaning specified in Section 14 of this Agreement save that Section 14 shall be
hereby amended by adding the text “commodity transaction, credit derivative
transaction, repurchase or reverse repurchase transaction, securities lending
transaction” after the words “foreign exchange transaction” in the sixth line
thereof.

 

(c)                                  The “Cross Default” provisions of
Section 5(a)(vi) will apply to Party A and will apply to Party B subject to
amendment by adding at the end thereof the following words:

 

“provided, however, that, notwithstanding the foregoing, an Event of Default
shall not occur under either (1) or (2) above if (A) (I) the default, or other
similar event or condition referred to in (1) or the failure to pay referred to
in (2) is a failure to pay or deliver caused by an error or omission of an
administrative or operational nature, and (II) funds or the asset to be
delivered were available to such party to enable it to make the relevant payment
or delivery when due and (III) such payment or delivery is made within three (3)
Local Business Days following receipt of written notice from an interested party
of such failure to pay, or (B) such party was precluded from paying, or was
unable to pay, using reasonable means, through the office of the party through
which it was acting for purposes of the relevant Specified Indebtedness, by
reason of force majeure, act of State, illegality or impossibility.”

 

If such provisions apply:

 

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“Specified Indebtedness” shall mean any obligation (whether present or future,
contingent or otherwise, as principal or surety or otherwise) in respect of
borrowed money other than indebtedness in respect of bank deposits received in
the ordinary course of business.

 

With regard to Party A, “Threshold Amount” means 1% of its shareholders’ equity
(i.e., the sum of its capital and disclosed reserves.)

 

With regard to Party B, “Threshold Amount” means $10,000,000.

 

(d)                                 The “Credit Event Upon Merger” provision in
Section 5(b)(iv) will not apply to Party A and will not apply to Party B.

 

(e)                                  The “Automatic Early Termination” provision
of Section 6(a) will not apply to Party A and will not apply to Party B.

 

(f)                                    Payments on Early Termination.  For the
purpose of Section 6(e) of this Agreement:

 

(i)                                     Market Quotation will apply.

(ii)                                  The Second Method will apply.

 

(g)           “Termination Currency” means United States Dollars.

 

(h)                                 “Additional Termination Event” The following
shall constitute an Additional Termination Event with respect to Party B: the
occurrence of (i) a Change of Control, as such term is defined in the Master
Repurchase Agreement dated as of June 30, 2004 entered into between Party A
(acting through its Cayman Islands Branch) and Party B (the “Repurchase
Agreement”), to Party B, (ii) a termination of the Repurchase Agreement, in
which case the provisions of Section 6 will be automatically applied, or (iii)
an uncured Event of Default (as defined in the Repurchase Agreement) under the
Repurchase Agreement, in which case, either Party A or Party B has given notice
under Section 6 of the Agreement to the extent required thereunder.  Party B
shall be the Affected Party for purposes of calculating the payments due under
Section 6(e) of the Agreement with respect to any Additional Termination Event.

 

Part 2.  Tax Representations.

 

(a)                                  Payer Tax Representations.  For the
purposes of Section 3(e) of this Agreement, Party A and Party B will each make
the following representations to the other:

 

It is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to
be made by it to the other party under this Agreement.  In making this
representation, each party may rely on:

 

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(i)                                     the accuracy of any representations made
by the other party pursuant to Section 3(f) of this Agreement;

 

(ii)                                  the satisfaction of the agreement of the
other party contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the
accuracy and effectiveness of any document provided by the other party pursuant
to Section 4(a)(i) or 4(a)(iii) of this Agreement, and

 

(iii)                               the satisfaction of the agreement of the
other party contained in Section 4(d) of this Agreement,

 

provided that it shall not be a breach of this representation where reliance is
placed on clause (ii) and the other party does not deliver a form or document
under Section 4(a)(iii) by reason of material prejudice to its legal or
commercial position.

 

(b)                                 Payee Tax Representations.

 

(i)                                     For purposes of Section 3(f) of this
Agreement, Party A makes the following representations:

 

(A)                              It is a “foreign person” within the meaning of
the applicable U.S. Treasury Regulations concerning information reporting and
backup withholding tax (as in effect on January 1, 2001), unless Party A
provides written notice to Party B that it is no longer a foreign person.  In
respect of each Transaction it enters into through an office or discretionary
agent in the United States or which otherwise is allocated for United States
federal income tax purposes to such United States trade or business, each
payment received or to be received by it under such Transaction will be
effectively connected with its conduct of a trade or business in the United
States.

 

(B)                                In respect of all Transactions (other than
those described in (A) above), no payment received or to be received by it in
connection with this Agreement is attributable to a trade or business carried on
by it through a permanent establishment in the United States.

 

(ii)                                  For the purpose of Section 3(f) of this
Agreement, Party B represents that it is a corporation organized and existing
under the laws of the State of Maryland and its taxpayer identification number
is:  20-1316052.

 

Each payment received or to be received by Party B in connection with this
Agreement will be treated as effectively connected with the conduct of a trade
or business in the United States of America by Party B.

 

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Party B is a “United States person” for U.S. federal tax purposes as that term
is defined in Section 7701(a) (30) (or any applicable successor provision) of
the U.S. Internal Revenue Code of 1986, as amended.

 

Part 3.  Documents to be delivered.

 

(a)                                  For the purpose of Section 4(a)(i), the
documents to be delivered are:

 

Party required to
deliver document

 

Form/Document/
Certificate

 

Date by which to be
delivered

 

Section
3(d) Representation

 

 

 

 

 

 

 

Party A

 

An executed United States Internal Revenue Service Form W-8ECI (or any successor
thereto) and an executed United States Internal Revenue Service Form W-8BEN (or
any successor thereto).

 

(i) Upon execution of this Agreement, (ii) promptly upon reasonable demand by
Party B and (iii) promptly upon learning that any such form previously provided
by Party A has become obsolete or incorrect.

 

 

 

 

 

 

 

 

 

Party B

 

An executed United States Internal Revenue Service Form W-8ECI (or any successor
thereto), Form W-8BEN (or any successor thereto), or W-9 (or any successor
thereto), as applicable.

 

(i) Promptly upon reasonable demand by Party A and (ii) promptly upon learning
that any such form previously provided by Party B has become obsolete or
incorrect.

 

 

 

(b)                         For the purposes of Section 4(a)(ii), the other
documents to be delivered are as follows:

 

Party required to
deliver document

 

Form/Document/
Certificate

 

Date by which to be
delivered

 

Section 3(d)
representation:

 

 

 

 

 

 

 

Party A and Party B

 

Evidence of the authority, incumbency and specimen signature of each person
executing this Agreement or any Confirmation or other document entered into in
connection with this Agreement on its behalf or on behalf of a Credit Support
Provider or otherwise, as the case may be.

 

Upon or prior to the delivery of each such document by any such person.

 

Applicable

 

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Party A and Party B

 

A copy of the most recent annual report containing consolidated financial
statements of each party or its Credit Support Provider, if any, and such other
public information respecting the condition or operations, financial or
otherwise of such party or its Credit  Support Provider, if any, as the other
party may reasonably request from time to time.

 

Promptly after request by the other party.

 

Applicable

 

 

 

 

 

 

 

Party B

 

A copy of the resolution of Party B’s Board of Directors approving the entering
into of this Agreement and each subsequent Transaction hereunder, and a board
resolution delegating the powers to named individuals to enter into any
Transactions under this Agreement. Party B shall also deliver to Party A a copy
of its constituent documents, each certified by an appropriately authorized
officer of Party B to the effect that such documents are up to date and in full
force and effect and that Party A may continue to rely thereon.

 

As of execution of this Agreement

 

Applicable

 

 

 

 

 

 

 

Party B

 

A legal opinion in a form satisfactory to Party A with respect to itself and its
Credit Support Provider, if any.

 

As of execution of this Agreement and any Credit Support Document.

 

Applicable

 

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Part 4.  Miscellaneous.

 

(a)                                  Address for Notices.  For the purpose of
Section 12(a) of this Agreement, the addresses for notices and communications to
Party A and Party B shall be as follows:

 

TO PARTY A:

 

(i)                                     All notices to Party A under Sections 5
or 6 of the Agreement (other than notices under Section 5(a)(i)) shall be sent
to:

 

Deutsche Bank AG, Head Office

Taunusanlage 12

60262 Frankfurt

GERMANY

Attention:  Legal Department

Telex No:  411836 or 416731 or 41233

Answerback:   DBF-D

Fax No.:(49)(69) 910-38406

 

(ii)                                  All notices to Party A (other than those
provided for in paragraph (i) above) shall be sent directly to the office
through which Party A is acting for the relevant Transaction, using the address
and contact particulars specified in the Confirmation for the purposes of
confirming that Transaction. If no such particulars are so specified, such
notices shall be sent to:

 

Deutsche Bank AG, New York Branch

60 Wall Street

New York, New York 10005

USA

Attn:  Swap Group

Tel:  (1)(212) 469-4338

Fax:  (1)(212) 469-4654

Telex:  429166

Answerback:  DEUTNYK

 

TO PARTY B:

 

CRIIMI Financing Co., Inc.

11200 Rockville Pike, 4th Floor,

Rockville, MD  20852

Attn:  General Counsel

Tel:  301-255-0676

Fax: 301-255-0620

 

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(b)                                 Process Agent.  For the purposes of
Section 13(c) of this Agreement:

 

Party A appoints as its Process Agent:        Not applicable.

 

Party B appoints as its Process Agent:        Not applicable

 

(c)                                  Offices.  The provisions of Section 10(a)
will apply to this Agreement.

 

(d)                                 Multibranch Party.  For purposes of
Section 10(c) of this Agreement:

 

(i)  Party A is not a Multibranch Party and may act through the New York Branch.

 

(ii)  Party B is not a Multibranch Party.

 

(e)                                  The Calculation Agent shall be Party A
unless otherwise specified in the relevant Confirmation in relation to a
particular Transaction or unless an Event of Default has occurred and is
continuing with respect to Party A, in which case the Calculation Agent shall be
a recognized dealer designated by Party B to be the Calculation Agent.

 

(f)                                    Credit Support Document. Details of any
Credit Support Document:

 

Credit Support Annex and Master Netting Agreement, each dated as of the date
hereof, between Party A and Party B, as the same may be amended, modified,
supplemented, restated or replaced from time to time by agreement between Party
A and Party B.

 

(g)                                 Credit Support Provider.  Credit Support
Provider means in relation to Party A or Party B:

 

Not applicable

 

(h)                                 Governing Law.  This Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of New York (without reference to its choice of law doctrine).

 

(i)                                     Netting of Payments.   Subparagraph (ii)
of Section 2(c) of this Agreement will apply to all Transactions.

 

(j)                                     “Affiliate” will have the meaning
specified in Section 14 of this Agreement.

 

Part 5.  Other Provisions.

 

1.                                       Representations.  Section 3(a) is
amended by adding the following paragraphs (vi), (vii), (viii), (ix) and(x):

 

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“(vi)                        Non-Reliance, Etc.  Each party will be deemed to
represent to the other party on the date that it enters into a Transaction that
(absent a written agreement between the parties that expressly imposes
affirmative obligations to the contrary for that Transaction):

 

(a)                                  Non-Reliance.  It is acting for its own
account, and it has made its own independent decisions to enter into that
Transaction and as to whether that Transaction is appropriate or proper for it
based upon its own judgment and upon advice from such advisers as it has deemed
necessary. It is not relying on any communication (written or oral) of the other
party as investment advice or as a recommendation to enter into that
Transaction: it being understood that information and explanations related to
the terms and conditions of a Transaction shall not be considered to be
investment advice or a recommendation to enter into that Transaction. No
communication (written or oral) received from the other party shall be deemed to
be an assurance or guarantee as to the expected results of that Transaction.

 

(b)                                 Assessment and Understanding.  It is capable
of assessing the merits of and understanding (on its own behalf or through
independent professional advice), and understands and accepts the terms and
conditions and risks of that Transaction. It is also capable of assuming, and
assumes, the risks of that Transaction.

 

(c)                                  Status of Parties.  The other party is not
acting as a fiduciary for or adviser to it in respect of that Transaction.”

 

(vii)                           Commodity Exchange Act.  Each party represents
to the other party on and as of the date hereof and on each date on which a
Transaction is entered into between them that:

 

(a)                                  each Transaction is intended to be exempt
from, or otherwise not subject to regulation under, the Commodity Exchange Act;
and

 

(b)                                 such party is an “eligible contract
participant” within the meaning of the Commodity Exchange Act, Section 1a(12).

 

(viii)                        No Agency. It is entering into this Agreement and
each Transaction as principal (and not as agent or in any other capacity,
fiduciary or otherwise).

 

(ix)                                Negotiated. The material terms of this
Agreement and each Transaction have been and will be individually tailored and
negotiated.”

 

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2.                                       Consent to Recording.

 

Each party (i) consents to the recording of the telephone conversations of
trading and marketing and/or other personnel of the parties and their Affiliates
in connection with this Agreement or any potential Transaction (ii) agrees to
obtain any necessary consent of and give notice of such recording to such
personnel of it and its Affiliates; and (iii) agrees that recordings may be
submitted in evidence in any Proceedings relating to this Agreement.

 

3.                                 Tax Provisions.

 

(a)                                  The definition of Tax Event,
Section 5(b)(ii), is hereby modified by (i) adding the following provision at
the end thereof: “provided, however, that the parties acknowledge that the
proposal of laws, regulations or guidelines, shall not, prior to the actual
adoption or enactment thereof, constitute a Termination Event hereunder;” and
(ii) adding before the words “there is a substantial likelihood that” the
following words: “in the written opinion of tax counsel of recognized standing”.

 

(b)                                 The definition of term “Indemnifiable Tax”
is amended by adding the following provisions at the end thereof:

 

“Notwithstanding the foregoing, “Indemnifiable Tax” also means any Tax imposed
in respect of a payment under this Agreement by reasons of a Change in Tax Law
by a government or taxing authority of a Relevant Jurisdiction of the party
making such payment, unless the other party is incorporated, organized, managed
and controlled or considered to have its seat in such jurisdiction, or is acting
for purposes of this Agreement through a branch or office located in such
jurisdiction.”

 

4.                                       Set Off.

 

Section 6 of this Agreement is amended by the addition of the following
Section 6(f):

 

“(f)                              Upon the designation of any Early Termination
Date, the party that is not the Defaulting Party or Affected Party (“X”) may,
without prior notice to the Defaulting or Affected Party (“Y”), set off any sum
or obligation (whether or not arising under this Agreement, whether matured or
unmatured, whether or not contingent and irrespective of the currency, place of
payment or booking office of the sum or obligation) owed by Y to X or any
Affiliate of X (the “X Set Off Amount”) against any sum or obligation (whether
or not arising under this Agreement, whether matured or unmatured, whether or
not contingent and irrespective of the currency, place of payment or booking
office of the sum or obligation) owed by X or any Affiliate of X to Y (the “Y
Set Off Amount”).  X will give notice to the other party of any set off effected
under this Section 6(f).

 

For this purpose, either the X Set Off Amount or the Y Set Off Amount (or the
relevant portion of such set off amounts) may be converted by X into the
currency in which the other set off amount is denominated at the rate of
exchange at which X would be able,

 

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acting in a reasonable manner and in good faith, to purchase the relevant amount
of such currency.

 

If a sum or obligation is unascertained, X may in good faith estimate that
obligation and set-off in respect of the estimate, subject to the relevant party
accounting to the other when the obligation is ascertained.

 

Nothing in this Section 6(f) shall be effective to create a charge or other
security interest.  This Section 6(f) shall be without prejudice and in addition
to any right of set-off, combination of accounts, lien or other rights to which
any party is at any time otherwise entitled (whether by operation of law,
contract or otherwise).”

 

5.                                       Escrow.

 

On any date on which both parties are required to make payments hereunder,
either party may at its option and in its sole discretion notify the other party
that payments on that date are to be made in escrow.  In this case deposit of
the payment due earlier on that date shall be made by 2:00 p.m. (local time at
the place for the earlier payment if there is a time difference between the
cities in which payments are to be made) on that date with an escrow agent
selected by the party giving the notice and reasonably acceptable to the other
party, accompanied by irrevocable payment instructions (a) to release the
deposited payment to the intended recipient upon receipt by the escrow agent of
the required deposit of the corresponding payment from the other party on the
same date accompanied by irrevocable payment instructions to the same effect or
(b) if the required deposit of the corresponding payment is not made on that
same date, to return the payment deposited to the party that paid it into escrow
at such party’s request.  The party that elects to have payments made in escrow
shall pay the costs of the escrow arrangements and shall cause those
arrangements to provide that the intended recipient of the payment due to be
deposited first shall be entitled to interest on that deposited payment for each
day in the period of its deposit at the rate offered by the escrow agent for
that day for overnight deposits in the relevant currency in the office where it
holds that deposited payment (at 11:00 a.m. local time on that day) if that
payment is not released by 5:00 p.m. local time on the date it is deposited for
any reason other than the intended recipient’s failure to make the escrow
deposit it is required to make hereunder in a timely fashion.

 

6.                                       Transfer.

 

Notwithstanding Section 7 of this Agreement, this Agreement, any interest or
obligation in or under this Agreement or any Transaction may not be transferred
by (a) Party A without the written consent from Party B, provided however that
(i) Party A may transfer all, but not less than all, of its interests and
obligations in and under this Agreement and all Transactions without such
consent to an affiliate of Party A if no Event of Default with respect to Party
A is then continuing or will result from such transfer and the obligations and
rights of Party B are not increased or diminished, respectively, as a result of
such transfer, (ii) Party A agrees to only transfer to a transferee in a
‘netting” jurisdiction in which netting under this Agreement shall be
enforceable, (iii) it would not

 

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as of the date of such transfer be unlawful for either party to perform any
obligation under this Agreement as a result of such transfer and ((iv) the
rights and obligations of Party A under the Repurchase Agreement are transferred
to the same entity to which Party A transferred this Agreement; or (b) by Party
B without the written consent from Party A, in either case, such written consent
not to be unreasonably withheld or delayed and any transfer without such
required written consent shall be void and of no force or effect .

 

7.                                       Additional Acknowledgments and
Agreements of the Parties.

 

(a)                                  Deutsche Bank Securities Inc.  Each party
acknowledges and agrees that (i) Deutsche Banc Alex. Brown Inc. or another
designated Affiliate of Party A (the “Designated Agent”) will act as agent for
Party A in connection with certain Transactions when so specified in the
Transaction Confirmation; and (ii) the Designated Agent is acting solely as
agent and shall have no liability for the performance of either party’s
obligations under this Agreement or any Transaction, or for costs, expenses,
damages or claims arising out of the failure of either party to perform any such
obligation.

 

(b)           Bankruptcy Code.  Without limiting the applicability if any, of
any other provision of the U.S. Bankruptcy Code as amended (the “Bankruptcy
Code”) (including without limitation Sections 362, 546, 556, and 560 thereof and
the applicable definitions in Section 101 thereof), the parties acknowledge and
agree that all Transactions entered into hereunder will constitute “forward
contracts” or “swap agreements” as defined in Section 101 of the Bankruptcy Code
or “commodity contracts” as defined in Section 761 of the Bankruptcy Code, that
the rights of the parties under Section 6 of this Agreement will constitute
contractual rights to liquidate Transactions, that any margin or collateral
provided under any margin, collateral, security, pledge, or similar agreement
related hereto will constitute a “margin payment” as defined in Section 101 of
the Bankruptcy Code, and that the parties are entities entitled to the rights
under, and protections afforded by, Sections 362, 546, 556, and 560 of the
Bankruptcy Code.

 

(c)                                  Waiver of Right to Trial by Jury.  Each of
the parties hereby irrevocably waives any and all right to a trial by jury with
respect to any legal proceeding arising out of or relating to this Agreement or
any Transaction.

 

8.                                       Change of Account. Section 2(b) is
hereby amended by adding the following at the end thereof:

 

“and provided that, unless the other party consents (which consent shall not be
unreasonably be withheld), such new account shall be in the same tax
jurisdiction as the original account.”

 

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9.                                       Default under Specified Transactions.
The provisions of Section 5(a)(v) of this Agreement are modified by adding,
immediately prior to the semicolon at the end thereof, the following: 
“provided, however, that it shall not constitute an Event of Default under
Section 5(a)(v) if (A) such event of default or failure to pay arises in the
ordinary course of business by mistake, oversight, or transfer difficulties, (B)
funds were available to such party to enable it to make the relevant payment
when due, and (C) such event of default or failure to pay is remedied on or
before the fifth Business Day after the occurrence or existence of such event of
default or failure to pay.”

 

10.                                 Cross Default. The provisions of
Section 5(a)(vi) of this Agreement are modified by adding, immediately prior to
the semicolon at the end thereof, the following:  “provided, however, that it
shall not constitute an Event of Default under Section 5(a)(vi) if (A) such
event of default or failure to pay arises in the ordinary course of business by
mistake, oversight, or transfer difficulties, (B) funds were available to such
party to enable it to make the relevant payment when due and (C) such event of
default or failure to pay is remedied on or before the fifth Business Day after
the occurrence or existence of such event of default or failure to pay.”

 

11.                                 Payment Date During Transfer Period. If the
parties are required by Section 6(b)(ii) to make efforts to transfer certain
obligations under this Agreement in connection with a Termination Event, and a
Payment Date (as defined in the related Confirmation) will occur under the
relevant Affected Transaction during the period specified in Section 6(b) for
those efforts, then the payment(s) due to be made on that Payment Date shall be
postponed until the earlier of (i) the Business Day following the day on which a
transfer is affected in consequence of such efforts; (ii) the Business Day
following the day on which such period ends, if an Early Termination Date is not
designated by a party on such day; and (iii) the Early Termination Date for the
relevant Affected Transaction, with such postponed amounts then being treated as
Unpaid Amounts.  In either case, the postponed payment(s) shall bear interest
(before as well as after judgment) at the Applicable Rate from (and including)
such Payment Date to (but excluding) the date of actual payment.

 

12.                                 All Confirmations. Promptly after the Trade
Date of each Transaction, the parties will confirm the terms and conditions of
any Transaction entered into between them pursuant to the terms of this
Agreement by means of an exchange of telexes or facsimile transmissions in
substantially the form set out as Exhibit I to the Definitions (or such other
form as may be agreed by the parties). The parties hereby agree that any such
exchange of telexes or facsimile transmissions shall constitute a Confirmation
for all purposes hereunder.  For the avoidance of doubt, this Agreement relates
to all Confirmations, whether by telex, facsimile or letter, entered between
Party A and Party B on or after the date of this Agreement, including, without
limitation, those entered into prior to actual execution of this Agreement.

 

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DEUTSCHE BANK AG,

CRIIMI FINANCING CO., INC.

NEW YORK BRANCH

 

 

 

By:

/s/ Kathleen Yohe

 

By:

/s/ Mark A. Libera

 

Name: Kathleen Yohe

Name: Mark A. Libera

Title: Vice President

Title: Acting General Counsel/VP

Date:

Date:

 

 

By:

/s/ Carlo-Edoardo Carlon

 

By:

 

 

Name: Carlo-Edoardo Carlon

Name:

Title: Vice President & Counsel

Title:

Date:

Date:

 

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