Document:

Exhibit 10.4

 

CRIIMI
MAE Inc.

11200 Rockville Pike, Suite 400

Rockville, MD 20852

 

August 26, 2003

 

 

Cynthia O. Azzara

 

Dear Ms. Azzara:

 

On behalf of
CRIIMI MAE Inc. (the “Company”), we are delighted to offer you (“you”)
continued employment in the position of Executive Vice President of Finance,
Chief Financial Officer and Treasurer of the Company and as an employee of
CRIIMI MAE Management, Inc. (the “Employer”, together with the Company,
“CRIIMI”), in accordance with and pursuant to the following terms and
conditions of this letter (the “Agreement”):

 

	
  Provision

  	
   

  	
  Agreement

  
	
   

  	
   

  	
   

  
	
  1.  Effective Date

  	
   

  	
  August 26,
  2003 (the “Effective Date”).

  
	
   

  	
   

  	
   

  
	
  2.  Term

  	
   

  	
  For the
  avoidance of doubt, the termination of your Employment Agreement between you
  and the Company, dated July 25, 2001 as amended did not result in your
  termination of employment with CRIIMI and as such you shall be treated as a
  continuing employee for purposes of all employee benefit plans, paid time
  off, option and restricted stock agreements with no break in service; provided,
  that, if you ever become eligible for any severance or termination pay
  from the Company which is based on your length of service, for purposes of
  calculating any such severance or termination pay, you shall be deemed to
  have commenced employment with CRIIMI on the Effective Date with no prior
  service credit.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The term of
  your employment under this Agreement (the “Term”) shall commence on the
  Effective Date and shall have no specific time period and you shall be an “at
  will” employee of CRIIMI such that CRIIMI or you may terminate your
  employment with CRIIMI at any time and for any reason (or no reason).  Upon your termination of employment with
  CRIIMI, if requested by the Chairman or the President of the Company, you

  

 

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  shall resign
  all other officerships and directorships you hold with CRIIMI and their
  affiliates.

  
	
   

  	
   

  	
   

  
	
  3.  Position, Reports and Duties

  	
   

  	
  During the
  Term, you shall serve as an employee of the Employer and as the Executive
  Vice President of Finance, Chief Financial Officer and Treasurer of the
  Company and shall report to the President and Chief Operating Officer of the
  Company (the “COO”).  You shall have
  those powers and duties normally associated with your position and such other
  powers and duties as may be prescribed by the COO and/or the Board of
  Directors of the Company (the “Board”). 
  You shall devote all of your working time, attention and energies to
  the performance of your duties for CRIIMI.

  
	
   

  	
   

  	
   

  
	
  4.  Base Salary

  	
   

  	
  Beginning on
  the Effective Date and through December 31, 2003, you shall be paid a base
  salary of $37,800 (not subject to decrease) per month (pro rated for partial
  months) to be paid in accordance with the CRIIMI’s payroll practices.  Commencing on January 1, 2004, you shall
  be paid a base salary of $300,000 annually, subject to annual increase (but
  not decrease) by CRIIMI, to be paid in accordance with CRIIMI’s payroll
  practices (“Base Salary”).

  
	
   

  	
   

  	
   

  
	
  5.  Annual Bonus Target

  	
   

  	
  Commencing
  on January 1, 2004 and for each calendar year thereafter during the Term, you
  shall be eligible for an annual bonus upon the achievement of objective
  financial goals established by CRIIMI (the “Annual Bonus”) prior to the start
  of each calendar year during the Term.   CRIIMI shall establish the target amount of the Annual Bonus
  for which you are eligible prior to the start of each calendar year during
  the Term.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For the 2003
  calendar year, you shall be paid a guaranteed Annual Bonus of $53,024.  Provided you are still employed by CRIIMI,
  your guaranteed minimum Annual Bonus for the 2004, 2005 and 2006 calendar
  years shall be $100,000.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Any such
  Annual Bonus earned during a calendar year shall be paid at such time as
  CRIIMI customarily pays annual bonuses, but you shall receive the entirety of
  the Annual Bonus to which you are entitled if you are employed with CRIIMI as
  of December 31 of such calendar year.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If your
  employment is terminated (i) by CRIIMI for any reason other than Cause (as
  defined below) or (ii) due to your death or permanent and total disability
  within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986,
  as amended (the

  

 

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  “Code”), you
  shall be paid a pro-rated portion of your guaranteed minimum Annual Bonus for
  the year of termination based on the number of days you worked during the
  relevant calendar year divided by 365 or 366 in the case of a leap year
  (e.g., if you are terminated without Cause by CRIIMI on April 30, 2005, you
  shall be paid a pro-rated portion of the guaranteed minimum Annual Bonus that
  would have been paid for the year of termination equal to $100,000 X 120/365
  or $32,876.71).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If your
  employment should be terminated by you for any reason or by CRIIMI for Cause
  during any calendar year, no Annual Bonus, including a guaranteed minimum
  Annual Bonus, will be paid for such calendar year or any future calendar
  year.

  
	
   

  	
   

  	
   

  
	
  6.  Restricted Stock

  	
   

  	
  On the
  Effective Date, or as soon as feasible thereafter, subject to the approval of
  the Compensation and Stock Option Committee of the Board of Directors of the
  Company (the “Committee”), you shall be granted a restricted stock award of
  common stock, $.01 par value per share, of the Company (“Common Stock”) in an
  amount of whole shares equal to 13,055 (the “2003 Stock Award”).  The 2003 Stock Award shall be granted
  under the terms of the Company’s stock incentive plan as evidenced by a
  restricted stock award agreement substantially in the form attached hereto as
  Exhibit A.  The Company shall use its
  best efforts to have the Committee approve the 2003 Stock Award by September
  5, 2003.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Provided you
  are still then employed by CRIIMI, on each of December 31, 2004, December 31,
  2005 and December 31, 2006, subject to the approval of the Committee, you
  shall be granted a stock award in an amount of whole shares (fractional
  shares to be settled in cash) equal to $50,000 divided by the closing price
  of the Common Stock on the relevant December 31 (the “Additional Awards”).  Each such Additional Award shall vest as
  to 33-1/3% of the shares subject thereto on each of the first three
  anniversaries of the date of grant of the relevant Additional Award; provided,
  that, you are still then employed by CRIIMI on the relevant vesting
  dates.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If your
  employment is terminated at any time due to your death or permanent and total
  disability within the meaning of Section 22(e)(3) of the Internal Revenue
  Code of 1986, as amended (the “Code”) or your employment is terminated by
  CRIIMI without Cause, then, with respect to each Additional Award that has
  been granted to you prior to such date of termination of employment, all
  restrictions on any such Additional Award(s)

  

 

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  shall automatically
  lapse as of such date.  If your
  employment with CRIIMI terminates for any other reason, each Additional
  Award, or portion thereof, still subject to restriction, shall be forfeited.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For purposes
  of this Agreement, CRIIMI shall have “Cause” to terminate your employment
  upon your (i) conviction of, or plea of guilty or nolo contendere to, a
  felony; or (ii) material breach of the Agreement which is not cured, if
  curable, within ten (10) days following CRIIMI’s written notice to you of the
  event giving rise to such breach; or (iii) willful misconduct that is
  materially injurious to CRIIMI; or (iv) habitual drug or alcohol use which
  materially impairs your ability to perform your duties for CRIIMI; or (v)
  engaging in fraud, embezzlement or any other illegal conduct with respect to
  CRIIMI or any of their affiliates which is materially injurious to CRIIMI.

  
	
   

  	
   

  	
   

  
	
  7.  Employee Benefits

  	
   

  	
  During the
  Term, you shall be eligible to participate in all of CRIIMI’s benefit plans,
  in accordance with their terms, at a level equal to or greater than that made
  available to all other executives or employees of CRIIMI generally, except
  the Chief Executive Officer and President and COO.

  
	
   

  	
   

  	
   

  
	
  8.  Termination

  	
   

  	
  Except as
  provided in Sections 5 and 6 of this Agreement and the Letter Agreement dated
  August 26, 2003, between you and the Company (the “Letter Agreement”), upon
  your termination of employment with CRIIMI for any reason, you shall be paid
  any earned, but yet unpaid Base Salary through the date of termination of
  employment with CRIIMI, all accrued, but unused vacation pay through the date
  of termination of employment with CRIIMI and you shall not receive any other
  payments or benefits from CRIIMI except as otherwise required by (i)
  applicable law; (ii) the terms and conditions of any CRIIMI employee benefit
  or compensation plans (other than as noted in Section 2); or (iii) any other
  CRIIMI policy or practice (e.g., officer indemnification).

   

  
	
   

  	
   

  	
   

  
	
  9.  Governing Law

  	
   

  	
  This
  Agreement is governed by, and is to be construed and enforced in accordance
  with, the laws of the State of Maryland without regard to principles of
  conflicts of laws.

  
	
   

  	
   

  	
   

  
	
  10.  Miscellaneous

  	
   

  	
  (a)  Counterparts.  This Agreement may be executed in two or
  more-counterparts, each of which shall be deemed to be an original but all of
  which together will constitute one and the same instrument.

  

 

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  (b)  Entire Agreement.  Except for the Letter Agreement, this
  Agreement sets forth the entire agreement of the parties hereto in respect of
  the subject matter contained herein and supersede all prior agreements,
  promises, covenants, arrangements, communications, representations or
  warranties, whether oral or written, by any officer, employee or
  representative of any party hereto in respect of such subject matter.  Except for the Letter Agreement, any prior
  agreement of the parties hereto in respect of the subject matter contained
  herein, including, without limitation, the Employment Agreement between the
  Company and you, dated as of July 25, 2001, as amended is hereby terminated
  and canceled as of the Effective Date.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)  Section Headings.  The section headings in this Agreement are
  for convenience of reference only, and they form no part of this Agreement
  and shall not affect its interpretation.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (d)  Withholding.  All payments hereunder shall be subject to
  any required withholding of Federal, state and local taxes pursuant to any
  applicable law or regulation.

  
	
   

  	
   

  	
   

  
	
  11.  D&O Insurance

  	
   

  	
  During the
  Term, you shall be covered by any directors and officers insurance the
  Company maintains from time to time by the Company for its directors and
  officers.  In addition, you shall be
  entitled throughout the Term in your capacity as an officer and/or director
  of the Company the benefit of the indemnification provisions contained in the
  Certificate of Incorporation and/or By-laws of the Company as in effect from
  time to time, to the extent not prohibited by applicable law at the time of
  the assertion of any liability against you.

  
	
   

  	
   

  	
   

  
	
  12.  Resignation

  	
   

  	
  Intentionally
  Left Blank.

  
	
   

  	
   

  	
   

  
	
  13.  Place of Performance

  	
   

  	
  Your
  principal place of employment shall be at the Company’s offices in Rockville,
  Maryland.

  

 

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If you are in agreement
with the terms and conditions of this Agreement, please execute and date both
copies and return one to me at the address set forth above.

 

	
   

  	
  Sincerely,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CRIIMI MAE
  Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Barry S.
  Blattman

  	
   

  
	
   

  	
  Barry S.
  Blattman

  	
   

  
	
   

  	
  Chairman/President/CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CRIIMI MAE
  Management, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Barry S.
  Blattman

  	
   

  
	
   

  	
  Barry S.
  Blattman

  	
   

  
	
   

  	
  Chairman/President/CEO

  	
   

  

 

 

Signatures Continue
on Following Page

 

6

 

Accepted and agreed to:

 

 

	
  /s/ Cynthia
  Azzara

  	
   

  	
  August 26,
  2003

  	
   

  
	
  Cynthia
  Azzara

  	
  Date

  

 

7Exhibit 10.5

 

	
  

  	
  Master
  Repurchase Agreement

  

 

September 1996 Version

 

Dated as of June 26, 2003

 

Between: BEAR,
STEARNS & CO. INC., AS AGENT FOR BEAR, STEARNS INTERNATIONAL LIMITED

 

And : CRIIMI MAE ASSET ACQUISITION CORP.

 

1.     Applicability

From time to time the parties
hereto may enter into transactions in which one party (“Seller”)  agrees to transfer to the other (“Buyer”)
securities or other assets (“Securities”) against the transfer  of funds by Buyer, with a simultaneous agreement
by Buyer to transfer to Seller such Securities at a  date certain or on demand, against the transfer
of funds by Seller. Each such transaction shall be  referred to herein as a “Transaction” and, unless
otherwise agreed in writing, shall be governed by  this Agreement, including any supplemental terms
or conditions contained in Annex I hereto and  in any other annexes identified herein or therein as applicable
hereunder.

 

2.     Definitions

(a)   “Act of Insolvency”, with respect to any party,
(i) the commencement by such party as debtor of  any case or proceeding under any bankruptcy, insolvency, reorganization,
liquidation, moratorium, dissolution, delinquency or similar law, or such party
seeking the appointment or election  of
a receiver, conservator, trustee, custodian or similar official for such party
or any substantial  part of its
property, or the convening of any meeting of creditors for purposes of
commencing  any such case or
proceeding or seeking such an appointment or election, (ii) the commencement of
any such case or proceeding against such party, or another seeking such an
appointment or election, or the filing against a party of an application for a
protective decree under the  provisions
of the Securities Investor Protection Act of 1970, which (A) is consented to or
not  timely contested by such party,
(B) results in the entry of an order for relief, such an appointment or
election, the issuance of such a protective decree or the entry of an order
having a similar effect, or (C) is not dismissed within 15 days, (iii) the
making by such party of a general  assignment
for the benefit of creditors, or (iv) the admission in writing by such party of
such  party’s inability to pay such
party’s debts as they become due;

 

(b)   “Additional Purchased Securities”, Securities
provided by Seller to Buyer pursuant to Paragraph  4(a) hereof;

 

(c)   “Buyer’s Margin Amount”, with respect to any
Transaction as of any date, the amount  obtained by application of the Buyer’s Margin Percentage to the
Repurchase Price for

 

 

such Transaction as of such
date;

 

(d)         “Buyer’s Margin Percentage”, with respect to any
Transaction as of any date, a percentage  (which may be equal to the Seller’s Margin Percentage) agreed to by Buyer
and Seller or,  in the absence of any
such agreement, the percentage obtained by dividing the Market  Value of the Purchased Securities on the Purchase
Date by the Purchase Price on the  Purchase
Date for such Transaction;

 

(e)          “Confirmation”, the meaning specified in
Paragraph 3(b) hereof;

 

(f)            “Income”, with respect to any Security at any time,
any principal thereof and all interest,  dividends or other distributions thereon;

 

(g)         “Margin Deficit”, the meaning specified in
Paragraph 4(a) hereof;

 

(h)         “Margin Excess”, the meaning specified in
Paragraph 4(b) hereof;

 

(i)             “Margin Notice Deadline”, the time agreed to by
the parties in the relevant Confirmation,  Annex I hereto or otherwise as the deadline for giving notice requiring
same-day satisfaction of margin maintenance obligations as provided in
Paragraph 4 hereof (or, in the  absence
of any such agreement, the deadline for such purposes established in accordance
with market practice);

 

(j)             “Market Value”, with respect to any Securities as
of any date, the price for such Securities  on such date obtained from a generally recognized source agreed to by the
parties or the  most recent closing
bid quotation from such a source, plus accrued Income to the exten  not included therein (other than any Income
credited or transferred to, or applied to the  obligations of, Seller pursuant to Paragraph 5 hereof ) as of such date
(unless contrary to  market practice
for such Securities);

 

(k)          “Price Differential”, with respect to any
Transaction as of any date, the aggregate amount  obtained by daily application of the Pricing Rate for such Transaction to
the Purchase  Price for such
Transaction on a 360 day per year basis for the actual number of days during
the period commencing on (and including) the Purchase Date for such Transaction
and ending on (but excluding) the date of
determination (reduced by any amount of  such Price Differential previously paid by Seller to Buyer with respect
to such  Transaction);

 

(l)             “Pricing Rate”, the per annum percentage rate for
determination of the Price Differential;

 

(m)       “Prime Rate”, the prime rate of U.S. commercial
banks as published in The Wall Street Journal (or, if more than one such rate
is published, the average of such rates);

 

(n)         “Purchase Date”, the date on which Purchased
Securities are to be transferred by Seller to Buyer;

 

(o)         “Purchase Price”, (i) on the Purchase Date, the
price at which Purchased Securities are  transferred by Seller to Buyer, and (ii) thereafter, except where Buyer
and Seller agree otherwise, such price increased by the amount of any cash
transferred by Buyer to Seller pursuant to Paragraph 4(b) hereof and decreased
by the amount of any cash transferred by  Seller to Buyer pursuant to Paragraph 4(a) hereof or applied to reduce
Seller’s obligations

 

2

 

under clause (ii) of Paragraph 5
hereof;

 

(p)         “Purchased Securities”, the Securities
transferred by Seller to Buyer in a Transaction here-  under, and any Securities substituted therefor in
accordance with Paragraph 9 hereof. The  term “Purchased Securities” with respect to any Transaction at any time
also shall include  Additional
Purchased Securities delivered pursuant to Paragraph 4(a) hereof and shall
exclude Securities returned pursuant to
Paragraph 4(b) hereof;

 

(q)         “Repurchase Date”, the date on which Seller is to
repurchase the Purchased Securities from Buyer, including any date determined
by application of the provisions of Paragraph 3(c) or 11 hereof;

 

(r)            “Repurchase Price”, the price at which Purchased
Securities are to be transferred from Buyer to Seller upon termination of a
Transaction, which will be determined in each case (including Transactions
terminable upon demand) as the sum of the Purchase Price and the Price
Differential as of the date of such determination;

 

(s)          “Seller’s Margin Amount”, with respect to any
Transaction as of any date, the amount obtained by application of the Seller’s
Margin Percentage to the Repurchase Price for such Transaction as of such date;

 

(t)            “Seller’s Margin Percentage”, with respect to any
Transaction as of any date, a percentage (which may be equal to the Buyer’s
Margin Percentage) agreed to by Buyer and Seller or, in the absence of any such
agreement, the percentage obtained by dividing the Market Value of the
Purchased Securities on the Purchase Date by the Purchase Price on the Purchase
Date for such Transaction.

 

3.              Initiation; Confirmation; Termination

(a)          An agreement to enter into a Transaction may be
made orally or in writing at the initiation of either Buyer or Seller. On the
Purchase Date for the Transaction, the Purchased  Securities shall be transferred to Buyer or its agent against the
transfer of the Purchase  Price to an
account of Seller.

 

(b)         Upon agreeing to enter into a Transaction
hereunder, Buyer or Seller (or both), as shall  be agreed, shall promptly deliver to the other party a written confirmation
of each  Transaction (a
“Confirmation”). The Confirmation shall describe the Purchased  Securities (including CUSIP number, if any),
identify Buyer and Seller and set forth (i)  the Purchase Date, (ii) the Purchase Price, (iii) the Repurchase Date, unless
the  Transaction is to be terminable
on demand, (iv) the Pricing Rate or Repurchase Price  applicable to the Transaction, and (v) any
additional terms or conditions of the  Transaction not inconsistent with this Agreement. The Confirmation,
together with this  Agreement, shall
constitute conclusive evidence of the terms agreed between Buyer and  Seller with respect to the Transaction to which
the Confirmation relates, unless with respect to the Confirmation specific
objection is made promptly after receipt thereof. In the event of any conflict
between the terms of such Confirmation and this Agreement this Agreement shall
prevail.

 

(c)          In the case of Transactions terminable upon
demand, such demand shall be made by  Buyer
or Seller, no later than such time as is customary in accordance with market
practice, by telephone or otherwise on or prior to the business day on which
such termination  will be effective.
On the date specified in such demand, or on the date fixed for termination

 

3

 

in the case of Transactions
having a fixed term, termination of the Transaction will  be effected by transfer to Seller or its agent of
the Purchased Securities and any Income in  respect thereof received by Buyer (and not previously credited or
transferred to, or  applied to the
obligations of, Seller pursuant to Paragraph 5 hereof ) against the transfer
of the Repurchase Price to an account of
Buyer.

 

4.              Margin Maintenance

(a)          If at any time the aggregate Market Value of all
Purchased Securities subject to all  Transactions
in which a particular party hereto is acting as Buyer is less than the
aggregate Buyer’s Margin Amount for all such Transactions (a “Margin Deficit”),
then Buyer  may by notice to Seller
require Seller in such Transactions, at Seller’s option, to transfer to  Buyer cash or additional Securities reasonably
acceptable to Buyer (“Additional  Purchased
Securities”), so that the cash and aggregate Market Value of the Purchased
Securities, including any such Additional
Purchased Securities, will thereupon equal or  exceed such aggregate Buyer’s Margin Amount (decreased by the amount of
any Margin  Deficit as of such date
arising from any Transactions in which such Buyer is acting as  Seller).

 

(b)         If at any time the aggregate Market Value of all
Purchased Securities subject to all  Transactions
in which a particular party hereto is acting as Seller exceeds the aggregate
Seller’s Margin Amount for all such
Transactions at such time (a “Margin Excess”), then  Seller may by notice to Buyer require Buyer in
such Transactions, at Buyer’s option, to  transfer cash or Purchased Securities to Seller, so that the aggregate
Market Value of the  Purchased
Securities, after deduction of any such cash or any Purchased Securities so
transferred, will thereupon not exceed such
aggregate Seller’s Margin Amount (increased  by the amount of any Margin Excess as of such date arising from any
Transactions in  which such Seller is
acting as Buyer).

 

(c)          If any notice is given by Buyer or Seller under
subparagraph (a) or (b) of this Paragraph  at or before the Margin Notice Deadline on any business day, the party
receiving such  notice shall transfer
cash or Additional Purchased Securities as provided in such subparagraph no
later than the close of business in the relevant market on such day. If any
such  notice is given after the
Margin Notice Deadline, the party receiving such notice shall  transfer such cash or Securities no later than
the close of business in the relevant market  on the next business day following such notice.

 

(d)         Any cash transferred pursuant to this Paragraph
shall be attributed to such Transactions as shall be agreed upon by Buyer and
Seller.

 

(e)          Seller and Buyer may agree, with respect to any
or all Transactions hereunder, that the  respective rights of Buyer or Seller (or both) under subparagraphs (a)
and (b) of this  Paragraph may be
exercised only where a Margin Deficit or Margin Excess, as the case  may be, exceeds a specified dollar amount or a
specified percentage of the Repurchase  Prices for such Transactions (which amount or percentage shall be agreed
to by Buyer  and Seller prior to
entering into any such Transactions).

 

(f)            Seller and Buyer may agree, with respect to any
or all Transactions hereunder, that the  respective rights of Buyer and Seller under subparagraphs (a) and (b) of
this Paragraph  to require the
elimination of a Margin Deficit or a Margin Excess, as the case may be,  may be exercised whenever such a Margin Deficit
or Margin Excess exists with respect to  any single Transaction hereunder (calculated without regard to any other
Transaction

 

4

 

outstanding under this
Agreement).

 

5.              Income Payments

Seller shall be entitled to
receive an amount equal to all Income paid or distributed on or in  respect of the Securities that is not otherwise
received by Seller, to the full extent it would be  so entitled if the Securities had not been sold
to Buyer. Buyer shall, as the parties may agree  with respect to any Transaction (or, in the absence of any such
agreement, as Buyer shall reasonably determine in its discretion), on the date
such Income is paid or distributed either (i)  transfer to or credit to the account of Seller such Income with respect
to any Purchased   Securities subject to such Transaction or
(ii) with respect to Income paid in cash, apply the    Income
payment or payments to reduce the amount, if any, to be transferred to Buyer by
 Seller upon termination of such Transaction. Buyer shall not be
obligated to take any action   pursuant to the preceding sentence (A) to the
extent that such action would result in the creation of a Margin Deficit,
unless prior thereto or simultaneously therewith Seller transfers to   Buyer
cash or Additional Purchased Securities sufficient to eliminate such Margin
Deficit, or   (B) if an Event of Default with respect to
Seller has occurred and is then continuing at the   time such
Income is paid or distributed.

 

6.              Security Interest

Although the parties intend that
all Transactions hereunder be sales and purchases and not  loans, in the event any such Transactions are
deemed to be loans, Seller shall be deemed to  have pledged to Buyer as security for the performance by Seller of its
obligations under each  such
Transaction, and shall be deemed to have granted to Buyer a security interest
in, all of  the Purchased Securities
with respect to all Transactions hereunder and all Income thereon  and other proceeds thereof.

 

7.              Payment and Transfer

Unless otherwise mutually
agreed, all transfers of funds hereunder shall be in immediately  available funds. All Securities transferred by
one party hereto to the other party (i) shall be in  suitable form for transfer or shall be
accompanied by duly executed instruments of transfer  or assignment in blank and such other documentation
as the party receiving possession may  reasonably request, (ii) shall be transferred on the book-entry system of
a Federal Reserve  Bank, or (iii)
shall be transferred by any other method mutually acceptable to Seller and
Buyer.

 

8.              Segregation of Purchased Securities

To the extent required by
applicable law, all Purchased Securities in the possession of Seller   shall be
segregated from other securities in its possession and shall be identified as
subject to   this Agreement. Segregation may be accomplished
by appropriate identification on the books   and records of the holder,
including a financial or securities intermediary or a clearing corporation. All
of Seller’s interest in the Purchased Securities shall pass to Buyer on the
Purchase   Date and, unless otherwise agreed by Buyer and Seller, nothing in
this Agreement shall preclude Buyer from engaging in repurchase transactions
with the Purchased Securities or otherwise selling, transferring, pledging or
hypothecating the Purchased Securities, but no such   transaction shall relieve Buyer of its obligations to transfer
Purchased Securities to Seller pursuant to Paragraph 3, 4 or 11 hereof, or of
Buyer’s obligation to credit or pay Income to, or   apply
Income to the obligations of, Seller pursuant to Paragraph 5 hereof.

 

5

 

Required Disclosure for Transactions in
Which the Seller

Retains Custody of the Purchased
Securities

Seller is not permitted to
substitute other securities for those subject to this  Agreement and therefore must keep Buyer’s
securities segregated at all times, unless  in this Agreement Buyer grants Seller the right to substitute other
securities. If  Buyer grants the
right to substitute, this means that Buyer’s securities will likely be  commingled with Seller’s own securities during
the trading day. Buyer is advised  that,
during any trading day that Buyer’s securities are commingled with Seller’s
securities, they [will]* [may]** be subject
to liens granted by Seller to [its clearing  bank]* [third parties]** and may be used by Seller for deliveries on
other securities  transactions.
Whenever the securities are commingled, Seller’s ability to resegregate  substitute securities for Buyer will be subject
to Seller’s ability to satisfy [the clearing]* [any]** lien or to obtain
substitute securities.

 

* Language to be used under 17
C.F.R. ß403.4(e) if Seller is a government securities broker or dealer other
than a financial institution.

** Language to be used under 17
C.F.R. ß403.5(d) if Seller is a financial institution.

 

9.              Substitution

(a)          Seller may, subject to agreement with and
acceptance by Buyer, substitute other Securities  for any Purchased Securities. Such substitution shall be made by transfer
to Buyer of such  other Securities
and transfer to Seller of such Purchased Securities. After substitution, the
substituted Securities shall be deemed to
be Purchased Securities.

 

(b)         In Transactions in which Seller retains custody
of Purchased Securities, the parties  expressly
agree that Buyer shall be deemed, for purposes of subparagraph (a) of this
Paragraph, to have agreed to and accepted
in this Agreement substitution by Seller of  other Securities for Purchased Securities; provided, however, that such
other Securities  shall have a Market
Value at least equal to the Market Value of the Purchased Securities  for which they are substituted.

 

10.       Representations

Each
of Buyer and Seller represents and warrants to the other that (i) it is duly
authorized to  execute and deliver
this Agreement, to enter into Transactions contemplated hereunder and  to perform its obligations hereunder and has
taken all necessary action to authorize such execution, delivery and
performance, (ii) it will engage in such Transactions as principal (or, if
agreed in writing, in the form of an annex
hereto or otherwise, in advance of any Transaction  by the other party hereto, as agent for a
disclosed principal), (iii) the person signing this  Agreement on its behalf is duly authorized to do
so on its behalf (or on behalf of any such  disclosed principal), (iv) it has obtained all authorizations of any
governmental body  required in
connection with this Agreement and the Transactions hereunder and such
authorizations are in full force and effect and (v) the execution, delivery and
performance of this  Agreement and
the Transactions hereunder will not violate any law, ordinance, charter, by-law
or rule applicable to it or any agreement by which it is bound or by which any
of its  assets are affected. On the
Purchase Date for any Transaction Buyer and Seller shall each be  deemed to repeat all the foregoing
representations made by it.

 

6

 

11.       Events of Default

In the event that (i) Seller
fails to transfer or Buyer fails to purchase Purchased Securities  upon the applicable Purchase Date, (ii) Seller
fails to repurchase or Buyer fails to transfer  Purchased Securities upon the applicable Repurchase Date, (iii) Seller or
Buyer fails to comply with Paragraph 4 hereof, (iv) Buyer fails, after one
business day’s notice, to comply with  Paragraph 5 hereof, (v) an Act of Insolvency occurs with respect to
Seller or Buyer, (vi) any  representation
made by Seller or Buyer shall have been incorrect or untrue in any material
respect when made or repeated or deemed to
have been made or repeated, or (vii) Seller or  Buyer shall admit to the other its inability to, or its intention not to,
perform any of its obligations hereunder (each an “Event of Default”):

 

(a)          The nondefaulting party may, at its option (which
option shall be deemed to have been  exercised
immediately upon the occurrence of an Act of Insolvency), declare an Event of
Default to have occurred hereunder and,
upon the exercise or deemed exercise of such  option, the Repurchase Date for each Transaction hereunder shall, if it
has not already  occurred, be deemed
immediately to occur (except that, in the event that the Purchase  Date for any Transaction has not yet occurred as
of the date of such exercise or deemed  exercise, such Transaction shall be deemed immediately canceled). The
nondefaulting  party shall (except
upon the occurrence of an Act of Insolvency) give notice to the  defaulting party of the exercise of such option
as promptly as practicable.

 

(b)         In all Transactions in which the defaulting party
is acting as Seller, if the nondefaulting  party exercises or is deemed to have exercised the option referred to in
subparagraph (a)  of this Paragraph,
(i) the defaulting party’s obligations in such Transactions to repurchase
all Purchased Securities, at the Repurchase
Price therefor on the Repurchase Date determined in accordance with
subparagraph (a) of this Paragraph, shall thereupon become  immediately due and payable, (ii) all Income paid
after such exercise or deemed exercise  shall be retained by the nondefaulting party and applied to the aggregate
unpaid  Repurchase Prices and any
other amounts owing by the defaulting party hereunder, and  (iii) the defaulting party shall immediately
deliver to the nondefaulting party any  Purchased Securities subject to such Transactions then in the defaulting
party’s possession or control.

 

(c)          In all Transactions in which the defaulting party
is acting as Buyer, upon tender by the  nondefaulting party of payment of the aggregate Repurchase Prices for all
such  Transactions, all right, title
and interest in and entitlement to all Purchased Securities  subject to such Transactions shall be deemed
transferred to the nondefaulting party, and  the defaulting party shall deliver all such Purchased Securities to the
nondefaulting party.

 

(d)         If the nondefaulting party exercises or is deemed
to have exercised the option referred to  in subparagraph (a) of this Paragraph, the nondefaulting party, without
prior notice to  the defaulting
party, may:

 

(i)             as to Transactions in which the defaulting party
is acting as Seller, (A) immediately  sell,
in a recognized market (or otherwise in a commercially reasonable manner) at
such price or prices as the nondefaulting
party may reasonably deem satisfactory, any  or all Purchased Securities subject to such Transactions and apply the
proceeds  thereof to the aggregate
unpaid Repurchase Prices and any other amounts owing by  the defaulting party hereunder or (B) in its sole
discretion elect, in lieu of selling all  or a portion of such Purchased Securities, to give the defaulting party
credit for such

 

7

 

Purchased Securities in an
amount equal to the price therefor on such date, obtained  from a generally recognized source or the most
recent closing bid quotation from  such
a source, against the aggregate unpaid Repurchase Prices and any other  amounts owing by the defaulting party hereunder;
and

 

(ii)          as to Transactions in which the defaulting party
is acting as Buyer, (A) immediately  purchase,
in a recognized market (or otherwise in a commercially reasonable manner) at
such price or prices as the nondefaulting party may reasonably deem
satisfactory, securities (“Replacement Securities”) of the same class and
amount as any  Purchased Securities
that are not delivered by the defaulting party to the nondefaulting party as
required hereunder or (B) in its sole discretion elect, in lieu of purchasing
Replacement Securities, to be deemed to have purchased Replacement Securities
at the price therefor on such date,
obtained from a generally recognized source or the  most recent closing offer quotation from such a
source.

 

Unless otherwise provided in
Annex I, the parties acknowledge and agree that (1) the  Securities subject to any Transaction hereunder
are instruments traded in a recognized  market, (2) in the absence of a generally recognized source for prices or
bid or offer quotations for any Security, the nondefaulting party may establish
the source therefor in its  sole
discretion and (3) all prices, bids and offers shall be determined together
with  accrued Income (except to the
extent contrary to market practice with respect to the relevant Securities).

 

(e)          As to Transactions in which the defaulting party
is acting as Buyer, the defaulting party  shall be liable to the nondefaulting party for any excess of the price
paid (or deemed  paid) by the
nondefaulting party for Replacement Securities over the Repurchase Price
for the Purchased Securities replaced
thereby and for any amounts payable by the  defaulting party under Paragraph 5 hereof or otherwise hereunder.

 

(f)            For purposes of this Paragraph 11, the Repurchase
Price for each Transaction hereunder in respect of which the defaulting party
is acting as Buyer shall not increase above the amount of such Repurchase Price
for such Transaction determined as of the date of the exercise or deemed
exercise by the nondefaulting party of the option referred to in sub-paragraph
(a) of this Paragraph.

 

(g)         The defaulting party shall be liable to the
nondefaulting party for (i) the amount of all  reasonable legal or other expenses incurred by the nondefaulting party in
connection  with or as a result of an
Event of Default, (ii) damages in an amount equal to the cost  (including all fees, expenses and commissions) of
entering into replacement transactions  and entering into or terminating hedge transactions in connection with or
as a result of  an Event of Default,
and (iii) any other loss, damage, cost or expense directly arising or  resulting from the occurrence of an Event of
Default in respect of a Transaction.

 

(h)         To the extent permitted by applicable law, the
defaulting party shall be liable to the nondefaulting party for interest on any
amounts owing by the defaulting party hereunder,  from the date the defaulting party becomes liable for such amounts
hereunder until such  amounts are (i)
paid in full by the defaulting party or (ii) satisfied in full by the exercise
of the nondefaulting party’s rights
hereunder. Interest on any sum payable by the defaulting party to the
nondefaulting party under this Paragraph 11(h) shall be at a rate equal to
the greater of the Pricing Rate for the
relevant Transaction or the Prime Rate.

 

8

 

(i)             The nondefaulting party shall have, in addition
to its rights hereunder, any rights otherwise available to it under any other
agreement or applicable law.

 

12.       Single Agreement

Buyer and Seller acknowledge
that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in
reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and
have been made in consideration of
each other. Accordingly, each of Buyer and Seller agrees (i) to perform all of
its obligations in respect of each Transaction
hereunder, and that a default in the performance of any such obligations shall
constitute a default by it in respect of all Transactions hereunder, (ii) that each of them shall be
entitled to set off claims and apply property held by them in respect of any Transaction against
obligations owing to them in respect of any other Transactions hereunder and (iii) that payments,
deliveries and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in
consideration of payments,
deliveries and other transfers in respect of any other Transactions hereunder,
and the obligations to make any such
payments, deliveries and other transfers may be applied against each other and netted.

 

13.       Notices and Other Communications

Any and all notices, statements,
demands or other communications hereunder may be given  by a party to the other by mail, facsimile,
telegraph, messenger or otherwise to the address  specified in Annex II hereto, or so sent to such party at any other place
specified in a notice of  change of
address hereafter received by the other. All notices, demands and requests
hereunder may be made orally, to be confirmed promptly in writing, or by other
communication as  specified in the
preceding sentence.

 

14.       Entire Agreement; Severability

This Agreement shall supersede
any existing agreements between the parties containing general terms and
conditions for repurchase transactions. Each provision and agreement herein
shall be treated as separate and
independent from any other provision or agreement herein  and shall be enforceable notwithstanding the
unenforceability of any such other provision or  agreement.

 

15.       Non-assignability; Termination

(a)          The rights and obligations of the parties under
this Agreement and under any  Transaction
shall not be assigned by either party without the prior written consent of the
other party, and any such assignment
without the prior written consent of the other  party shall be null and void. Subject to the foregoing, this Agreement and
any  Transactions shall be binding
upon and shall inure to the benefit of the parties and their  respective successors and assigns.  This Agreement may be terminated by either
party  upon giving written notice to
the other, except that this Agreement shall, notwithstanding  such notice, remain applicable to any
Transactions then outstanding.

 

(b)         Subparagraph (a) of this Paragraph 15 shall not
preclude a party from assigning, charging or otherwise dealing with all or any
part of its interest in any sum payable to it under Paragraph 11 hereof.

 

16.       Governing Law

This Agreement shall be governed
by the laws of the State of New York without giving effect

 

9

 

to the conflict of law
principles thereof.

 

17.       No Waivers, Etc.

No express or implied waiver of
any Event of Default by either party shall constitute a waiver  of any other Event of Default and no exercise of
any remedy hereunder by any party shall  constitute a waiver of its right to exercise any other remedy hereunder.
No modification or  waiver of any
provision of this Agreement and no consent by any party to a departure
here-from shall be effective unless and until such shall be in writing and duly
executed by both of  the parties
hereto. Without limitation on any of the foregoing, the failure to give a
notice pursuant to Paragraph 4(a) or 4(b) hereof will not constitute a waiver
of any right to do so at a  later
date.

 

18.       Use of Employee Plan Assets

(a)          If assets of an employee benefit plan subject to
any provision of the Employee Retirement  Income Security Act of 1974 (“ERISA”) are intended to be used by either
party hereto  (the “Plan Party”) in a
Transaction, the Plan Party shall so notify the other party prior to  the Transaction. The Plan Party shall represent
in writing to the other party that the  Transaction does not constitute a prohibited transaction under ERISA or
is otherwise  exempt therefrom, and
the other party may proceed in reliance thereon but shall not be  required so to proceed.

 

(b)         Subject to the last sentence of subparagraph (a)
of this Paragraph, any such Transaction  shall proceed only if Seller furnishes or has furnished to Buyer its most
recent available  audited statement
of its financial condition and its most recent subsequent unaudited  statement of its financial condition.

 

(c)          By entering into a Transaction pursuant to this
Paragraph, Seller shall be deemed (i) to  represent to Buyer that since the date of Seller’s latest such financial
statements, there has  been no
material adverse change in Seller’s financial condition which Seller has not
disclosed to Buyer, and (ii) to agree to provide Buyer with future audited and
unaudited  statements of its
financial condition as they are issued, so long as it is a Seller in any
outstanding Transaction involving a Plan Party.

 

19.       Intent

(a)          The parties recognize that each Transaction is a
“repurchase agreement” as that term is  defined in Section 101 of Title 11 of the United States Code, as amended
(except insofar  as the type of
Securities subject to such Transaction or the term of such Transaction  would render such definition inapplicable), and a
“securities contract” as that term is  defined in Section 741 of Title 11 of the United States Code, as amended
(except insofar  as the type of
assets subject to such Transaction would render such definition inapplicable).

 

(b)         It is understood that either party’s right to
liquidate Securities delivered to it in connection with Transactions hereunder
or to exercise any other remedies pursuant to  Paragraph 11 hereof is a contractual right to liquidate such Transaction
as described in  Sections 555 and 559
of Title 11 of the United States Code, as amended.

 

(c)          The parties agree and acknowledge that if a party
hereto is an “insured depository institution,” as such term is defined in the
Federal Deposit Insurance Act, as amended  (“FDIA”), then each Transaction hereunder is a “qualified financial
contract,” as that term  is defined
in FDIA and any rules, orders or policy statements thereunder (except insofar

 

10

 

as the type of assets subject to
such Transaction would render such definition inapplicable).

 

(d)         It is understood that this Agreement constitutes
a “netting contract” as defined in and  subject to Title IV of the Federal Deposit Insurance Corporation
Improvement Act of  1991 (“FDICIA”)
and each payment entitlement and payment obligation under any  Transaction hereunder shall constitute a “covered
contractual payment entitlement” or  “covered
contractual payment obligation”, respectively, as defined in and subject to
FDICIA (except insofar as one or both of the parties is not a “financial
institution” as that  term is defined
in FDICIA).

 

20.       Disclosure Relating to Certain Federal Protections

The parties acknowledge that they
have been advised that:

 

(a)          in the case of Transactions in which one of the
parties is a broker or dealer registered  with the Securities and Exchange Commission (“SEC”) under Section 15 of
the Securities  Exchange Act of 1934
(“1934 Act”), the Securities Investor Protection Corporation has  taken the position that the provisions of the
Securities Investor Protection Act of 1970  (“SIPA”) do not protect the other party with respect to any Transaction
hereunder;

 

(b)         in the case of Transactions in which one of the
parties is a government securities broker  or a government securities dealer registered with the SEC under Section
15C of the 1934  Act, SIPA will not
provide protection to the other party with respect to any Transaction  hereunder; and

 

(c)          in the case of Transactions in which one of the
parties is a financial institution, funds  held by the financial institution pursuant to a Transaction hereunder are
not a deposit  and therefore are not
insured by the Federal Deposit Insurance Corporation or the  National Credit Union Share Insurance Fund, as
applicable.

 

 

	
  BEAR, STEARNS & Co., Inc.

  as agent for

  	
  CRIIMI MAE ASSET ACQUISITION

  CORP.

  
	
  BEAR, STEARNS INTERNATIONAL LIMITED

  	
   

  
	
   

  	
   

  
	
  BY:

  	
  /s/ Timothy Greene

  	
   

  	
  By:

  	
  /s/ Barry Blattman

  	
   

  
	
   

  	
  Name: 

  	
  Timothy Greene

  	
   

  	
   

  	
  Name: 

  	
  Barry Blattman

  	
   

  
	
   

  	
  TITLE : 

  	
  Senior Managing Director

  	
   

  	
   

  	
  Title: 

  	
  Chairman, President and CEO

  	
   

  
												

 

11

 

ANNEX II

 

Names and Addresses for
Communications Between Parties

 

BEAR, STEARNS & CO.
INC.

GOVERNMENT OPERATIONS

1 METROTECH CENTER NORTH

7TH FLOOR

BROOKLYN, NY 11201-3859

 

ATTENTION: SR. MANAGING
DIRECTOR

TELEPHONE: (212) 272-1203

 

12

 

Annex III

 

International Transactions

 

This Annex III (including any Schedules hereto)
forms a part of the Master Repurchase Agreement dated as
of                        
(the “Agreement”) between                     
and
                    
..Capitalized terms used but not defined in this Annex III shall have the
meanings ascribed to them in the Agreement.

 

1.              Definitions.For purposes of the Agreement and this Annex III:

(a)          The following terms shall have the following meanings:

 

“Base Currency”, United States
dollars or such other currency as Buyer and Seller may agree in the Confirmation
with respect to any International Transaction or otherwise in writing;

 

“Business Day” or “business day”:

 

(i)                                     in relation to any International Transaction
which (A) involves an International Security and (B) is to be settled through
CEDEL or Euroclear, a day on which CEDEL or, as the case may be, Euroclear is
open to settle business in the currency in which the Purchase Price and the
Repurchase Price are denominated;

 

(ii)                                  in relation to any International Transaction
which (A) involves an International Security and (B) is to be settled through a
settlement system other than CEDEL or Euroclear, a day on which that settlement
system is open to settle such International Transaction;

 

(iii)                               in relation to any International Transaction
which involves a delivery of Securities not falling within (i) or (ii) above, a
day on which banks are open for business in the place where delivery of the
relevant Securities is to be effected; and

 

(iv)                              in relation to any International Transaction
which involves an obligation to make a payment not falling within (i) or (ii)
above, a day other than a Saturday or Sunday on which banks are open for
business in the principal financial center of the country of which the currency
in which the payment is denominated is the official currency and, if different,
in the place where any account designated by the parties for the making or
receipt of the payment is situated (or, in the case of ECU, a day on which ECU
clearing operates);

 

“CEDEL”,CEDEL Bank, société
anonyme;

 

“Contractual Currency”, the
currency in which the International Securities subject to any International
Transaction are denominated or such other currency as may be specified in the
Confirmation with respect to any International Transaction;

 

“Euroclear”, Morgan Guaranty Trust
Company of New York, Brussels Branch, as operator of the Euroclear System;

 

13

 

“International Security”, any
Security that (i) is denominated in a currency other  than United States dollars or (ii) is capable of
being cleared through a clearing facility  outside the United States or (iii) is issued by an issuer organized under
the laws of a  jurisdiction other
than the United States (or any political subdivision thereof );

 

“International Transaction”, any
Transaction involving (i) an International Security  or (ii) a party organized under the laws of a
jurisdiction other than the United States  (or any political subdivision thereof ) or having its principal place of
business outside  the United States
or (iii) a branch or office outside the United States designated in  Annex I by a party organized under the laws of
the United States (or any political  subdivision
thereof ) as an office through which that party may act;

 

“LIBOR”, in relation to any sum
in any currency, the offered rate for deposits for such  sum in such currency for a period of three months
which appears on the Reuters  Screen
LIBO page as of 11:00 A.M., London time, on the date on which it is to be
determined (or, if more than one such rate
appears, the arithmetic mean of such  rates);

 

“Spot Rate”, where an amount in
one currency is to be converted into a second currency  on any date, the spot rate of exchange of a
comparable amount quoted by a  major
money-center bank in the New York interbank market, as agreed by Buyer and
Seller, for the sale by such bank of such
second currency against a purchase by it of  such first currency.

 

(b)         Notwithstanding Paragraph 2 of the Agreement, the
term “Prime Rate” shall mean, with respect to any International Transaction,
LIBOR plus a spread, as may be specified in the Confirmation with respect to
any International Transaction or otherwise in writing.

 

2.              Manner of Transfer. All transfers of International Securities (i)
shall be in suitable form for  transfer
and accompanied by duly executed instruments of transfer or assignment in blank
(where required for transfer) and such
other documentation as the transferee may reasonably  request, or (ii) shall be transferred through the
book-entry system of Euroclear or CEDEL, or  (iii) shall be transferred through any other agreed securities clearing
system or (iv) shall be  transferred
by any other method mutually acceptable to Seller and Buyer.

 

3.              Contractual Currency.

(a)          Unless otherwise mutually agreed, all funds
transferred in respect of the Purchase Price or the Repurchase Price in any
International Transaction shall be in the Contractual Currency.

 

(b)         Notwithstanding subparagraph (a) of this
Paragraph 3, the payee of any payment may, at  its option, accept tender thereof in any other currency; provided,
however, that, to the  extent
permitted by applicable law, the obligation of the payor to make such payment
will  be discharged only to the
extent of the amount of the Contractual Currency that such  payee may, consistent with normal banking
procedures, purchase with such other currency  (after deduction of any premium and costs of exchange) for delivery
within the customary  delivery period
for spot transactions in respect of the relevant currency.

 

(c)          If for any reason the amount in the Contractual
Currency so received, including amounts  received after conversion of any recovery under any judgment or order
expressed in a  currency other than
the Contractual Currency, falls short of the amount in the

 

14

 

Contractual Currency due in
respect of the Agreement, the party required to make the  payment shall (unless an Event of Default has
occurred and such party is the nondefault-ing  party) as a separate and independent obligation (which shall not merge
with any  judgment or any payment or
any partial payment or enforcement of payment) and to the  extent permitted by applicable law, immediately
pay such additional amount in the  Contractual
Currency as may be necessary to compensate for the shortfall.

 

(d)         If for any reason the amount of the Contractual
Currency received by one party hereto  exceeds the amount in the Contractual Currency due such party in respect
of the  Agreement, then (unless an
Event of Default has occurred and such party is the non-defaulting  party) the party receiving the payment shall
refund promptly the amount of such  excess.

 

4.              Notices. Any and all notices, statements, demands or other communications with
respect to  International
Transactions shall be given in accordance with Paragraph 13 of the Agreement
and shall be in the English language.

 

5.              Taxes.

(a)          Transfer taxes, stamp taxes and all similar costs
with respect to the transfer of Securities shall be paid by Seller.

 

(b) (i)                   Unless
otherwise agreed, all money payable by one party (the “Payor”) to the other
(the “Payee”) in respect of any
International Transaction shall be paid free and clear  of, and without withholding or deduction for, any
taxes or duties of whatsoever  nature
imposed, levied, collected, withheld or assessed by any authority having power
to tax (a “Tax”), unless the withholding or
deduction of such Tax is required by law.  In that event, unless otherwise agreed, Payor shall pay such additional
amounts as  will result in the net
amounts receivable by Payee (after taking account of such with-holding  or deduction) being equal to such amounts as
would have been received by  Payee
had no such Tax been required to be withheld or deducted; provided that for
purposes of Paragraphs 5 and 6 the term
“Tax” shall not include any Tax that would  not have been imposed but for the existence of any present or former
connection  between Payee and the
jurisdiction imposing such Tax other than the mere receipt of  payment from Payor or the performance of Payee’s
obligations under an  International
Transaction. The parties acknowledge and agree, for the avoidance of  doubt, that the amount of Income required to be
transferred, credited or applied by  Buyer
for the benefit of Seller under Paragraph 5 of the Agreement shall be deter-mined
without taking into account any Tax
required to be withheld or deducted  from
such Income, unless otherwise agreed.

 

(ii)          In the case of any Tax required to be withheld or
deducted from any money payable  to a
party hereto acting as Payee by the other party hereto acting as Payor, Payee
agrees to deliver to Payor (or, if
applicable, to the authority imposing the Tax) any  certificate or document reasonably requested by
Payor that would entitle Payee to an  exemption
from, or reduction in the rate of, withholding or deduction of Tax from  money payable by Payor to Payee.

 

(iii)       Each party hereto agrees to notify the other
party of any circumstance known or rea-sonably  known to it (other than a Change of Tax Law, as defined in Paragraph 6
hereof ) that causes a certificate or
document provided by it pursuant to subpara-graph  (b)(ii) of this Paragraph to fail to be true.

 

15

 

(iv)      Notwithstanding subparagraph (b)(i) of this
Paragraph, no additional amounts shall  be payable by Payor to Payee in respect of an International Transaction
to the extent  that such additional
amounts are payable as a result of a failure by Payee to comply  with its obligations under subparagraph (b)(ii)
or (b)(iii) of this Paragraph with  respect
to such International Transaction.

 

6.              Tax Event.

(a)          This Paragraph 6 shall apply if either party
notifies the other, with respect to a Tax required to be collected by
withholding or deduction, that —

 

(i)             any action taken by a taxing authority or brought
in a court of competent jurisdic-tion  after the date an International Transaction is entered into, regardless
of whether such action is taken or
brought with respect to a party to the Agreement; or

 

(ii)          a change in the fiscal or regulatory regime after
the date an International Transaction is entered into, (each, a “Change of Tax
Law”) has or will, in the notifying party’s reasonable opinion, have a material
adverse effect on such party in the context of an International Transaction.

 

(b)         If so requested by the other party, the notifying
party will furnish the other party with an opinion of a suitably qualified
adviser that an event referred to in subparagraph (a)(i) or (a)(ii) of this
Paragraph 6 has occurred and affects the notifying party.

 

(c)          Where this Paragraph 6 applies, the party giving
the notice referred to in subparagraph  (a) above may, subject to subparagraph (d) below, terminate the
International  Transaction effective
from a date specified in the notice, not being earlier (unless so  agreed by the other party) than 30 days after the
date of such notice, by nominating such  date as the Repurchase Date.

 

(d)         If the party receiving the notice referred to in
subparagraph (a) of this Paragraph 6 so  elects, it may override such notice by giving a counter-notice to the
other party. If a  counter-notice is
given, the party which gives such counter-notice will be deemed to have  agreed to indemnify the other party against the
adverse effect referred to in subparagraph  (a) of this Paragraph 6 so far as it relates to the relevant
International Transaction and  the
original Repurchase Date will continue to apply.

 

(e)          Where an International Transaction is terminated
as described in this Paragraph 6, the  party which has given the notice to terminate shall indemnify the other
party against any  reasonable legal
and other professional expenses incurred by the other party by reason of
the termination, but the other party may
not claim any sum constituting consequential  loss or damage in respect of a termination in accordance with this
Paragraph 6.

 

(f)            This Paragraph 6 is without prejudice to
Paragraph 5 of this Annex III; but an obligation  to pay additional amounts pursuant to Paragraph 5 of this Annex III may,
where appro-priate,  be a
circumstance which causes this Paragraph 6 to apply.

 

7.              Margin. In the calculation of “Margin Deficit” and “Margin Excess” pursuant to
Paragraph 4  of the Agreement, all
sums not denominated in the Base Currency shall be deemed to be con-verted
into the Base Currency at the Spot Rate on
the date of such calculation.

 

16

 

8.              Events of Default.

(a)          In addition to the Events of Default set forth in
Paragraph 11 of the Agreement, it shall  be an additional “Event of Default” if either party fails, after one
business day’s notice, to  perform
any covenant or obligation required to be performed by it under this Annex III,
including, without limitation, the payment
of taxes or additional amounts as required by  Paragraph 5 of this Annex III.

 

(b)         In addition to the other rights of a
nondefaulting party under Paragraph 11 of the  Agreement, following an Event of Default, the nondefaulting party may, at
any time at its  option, effect the
conversion of any currency into a different currency of its choice at the
Spot Rate on the date of the exercise of
such option and offset obligations of the defaulting  party denominated in different currencies against
each other.

 

17

 

Schedule III.A

International Transactions Relating to [Relevant Country]

This Schedule III.A forms a part of Annex III to
the Master Repurchase Agreement dated as
of                     
,     (the “Agreement”) between
                     
and
                     
..Capitalized terms used but not defined in this Schedule III.A shall have the
meanings ascribed to them in Annex III.

 

 

[Insert provisions applicable to
relevant country.]

 

18

 

Annex IV

 

Party Acting as Agent

 

This Annex IV forms a part of
the Master Repurchase Agreement dated as of
                    
,     (the “Agreement”) between                     
and
                    
..This Annex IV sets forth the terms and conditions governing all transactions
in which a party selling securities or buying securities, as the case may be
(“Agent”),in a Transaction is acting as agent for one or more third parties
(each, a “Principal”).Capitalized terms used but not defined in this Annex IV
shall have the meanings ascribed to them in the Agreement.

 

1.                                      Additional Representations.  In addition to the representations set forth in Paragraph 10 of the
Agreement, Agent hereby makes the following representations, which shall
continue during the term of any Transaction: Principal has duly authorized
Agent to execute and deliver the Agreement on its behalf, has the power to so
authorize Agent and to enter into the Transactions contemplated by the
Agreement and to perform the obligations of Seller or Buyer, as the case may
be, under such Transactions, and has taken all necessary action to authorize
such execution and delivery by Agent and such performance by it.

 

2.                                      Identification of Principals.  Agent agrees (a) to provide the other party, prior to the date on  which the parties agree to enter into any
Transaction under the Agreement, with a written list  of Principals for which it intends to act as
Agent (which list may be amended in writing from  time to time with the consent of the other party),and (b) to provide the
other party, before  the close of business
on the next business day after orally agreeing to enter into a Transaction,
with notice of the specific Principal or
Principals for whom it is acting in connection with  such Transaction. If(i) Agent fails to identify
such Principal or Principals prior to the close of  business on such next business day or (ii) the
other party shall determine in its sole discretion  that any Principal or Principals identified by
Agent are not acceptable to it, the other party  may reject and rescind any Transaction with such Principal or Principals,
return to Agent any  Purchased
Securities or portion of the Purchase Price, as the case may be, previously
transferred  to the other party and
refuse any further performance under such Transaction, and  Agent shall immediately return to the other party
any portion of the Purchase Price or  Purchased
Securities, as the case may be, previously transferred to Agent in connection
with  such Transaction; provided,
however, that (A) the other party shall promptly (and in any  event within one business day) notify Agent of
its determination to reject and rescind such  Transaction and (B) to the extent that any performance was rendered by
any party under any  Transaction
rejected by the other party, such party shall remain entitled to any Price
Differential or other amounts that would
have been payable to it with respect to such performance if such Transaction
had not been rejected. The other party acknowledges that Agent  shall not have any obligation to provide it with
confidential information regarding the financial  status of its Principals; Agent agrees, however, that it will assist the
other party in obtaining  from
Agent’s Principals such information regarding the financial status of such
Principals  as the other party may
reasonably request.

 

3.                                      Limitation of Agent’s Liability. The parties expressly acknowledge that if the
representations  of Agent under the
Agreement, including this Annex IV, are true and correct in all material
respects during the term of any Transaction
and Agent otherwise complies with the provisions  of this Annex IV, then (a) Agent’s obligations under the Agreement shall
not include a  guarantee of
performance by its Principal or Principals and (b) the other party’s remedies

 

19

 

shall not include a right of
setoff in respect of rights or obligations, if any, of Agent arising in  other transactions in which Agent is acting as
principal.

 

4.                                      Multiple Principals.

(a) In the event that Agent
proposes to act for more than one Principal hereunder, Agent and  the other party shall elect whether (i) to treat
Transactions under the Agreement as transactions  entered into on behalf of separate Principals or (ii) to aggregate such
Transactions as if they were transactions
by a single Principal. Failure to make such an  election in writing shall be deemed an election to treat Transactions
under the Agreement  as transactions
on behalf of separate Principals.

 

(b) In the event that Agent and
the other party elect (or are deemed to elect) to treat  Transactions under the Agreement as transactions
on behalf of separate Principals, the  parties agree that (i) Agent will provide the other party, together with
the notice  described in Paragraph
2(b) of this Annex IV, notice specifying the portion of each  Transaction allocable to the account of each of
the Principals for which it is acting (to the  extent that any such Transaction is allocable to the account of more than
one Principal);  (ii) the portion of
any individual Transaction allocable to each Principal shall be deemed  a separate Transaction under the Agreement; (iii)
the margin maintenance obligations of  Buyer and Seller under Paragraph 4 of the Agreement shall be determined
on a  Transaction-by-Transaction
basis (unless the parties agree to determine such obligations  on a Principal-by-Principal basis); and (iv)
Buyer’s and Seller’s remedies under the  Agreement upon the occurrence of an Event of Default shall be determined
as if Agent  had entered into a
separate Agreement with the other party on behalf of each of its  Principals.

 

(c) In the event that Agent and
the other party elect to treat Transactions under the  Agreement as if they were transactions by a
single Principal, the parties agree that (i)  Agent’s notice under Paragraph 2(b) of this Annex IV need only identify
the names of its  Principals but not
the portion of each Transaction allocable to each Principal’s account;  (ii) the margin maintenance obligations of Buyer
and Seller under Paragraph 4 of the  Agreement
shall, subject to any greater requirement imposed by applicable law, be
deter-mined  on an aggregate basis
for all Transactions entered into by Agent on behalf of any  Principal; and (iii) Buyer’s and Seller’s
remedies upon the occurrence of an Event of  Default shall be determined as if all Principals were a single Seller or
Buyer, as the case  may be.

 

(d) Notwithstanding any other
provision of the Agreement (including, without limitation,  this Annex IV), the parties agree that any
Transactions by Agent on behalf of an employee  benefit plan under ERISA shall be treated as Transactions on behalf of
separate  Principals in accordance
with Paragraph 4(b) of this Annex IV (and all margin maintenance  obligations of the parties shall be determined on
a Transaction-by-Transaction  basis).

 

5.                                      Interpretation of Terms. All references to “Seller” or “Buyer”, as the
case may be, in the  Agreement shall,
subject to the provisions of this Annex IV (including, among other provisions,
the limitations on Agent’s liability in
Paragraph 3 of this Annex IV), be construed to  reflect that (i) each Principal shall have, in connection with any
Transaction or Transactions  entered
into by Agent on its behalf, the rights, responsibilities, privileges and
obligations of a  “Seller” or
“Buyer”, as the case may be, directly entering into such Transaction or
Transactions

 

20

 

with the other party under the
Agreement, and (ii) Agent’s Principal or Principals have designated Agent as
their sole agent for performance of Seller’s obligations to Buyer or Buyer’s
obligations to Seller, as the case may be,
and for receipt of performance by Buyer of its obligations to Seller or Seller
of its obligations to Buyer, as the case may be, in connection with any
Transaction or Transactions under the Agreement (including, among other things,
as Agent  for each Principal in
connection with transfers of Securities, cash or other property and as  agent for giving and receiving all notices under
the Agreement). Both Agent and its Principal  or Principals shall be deemed “parties” to the Agreement and all
references to a “party” or  “either
party” in the Agreement shall be deemed revised accordingly (and any Act of
Insolvency with respect to Agent or any
other Event of Default by Agent under Paragraph 11  of the Agreement shall be deemed an Event of
Default by Seller or Buyer, as the case may be).

 

21

 

Annex V

 

Margin for Forward Transactions

 

This Annex V forms a part of the
Master Repurchase Agreement dated as of
                     ,     (the “Agreement”)
between
                    
and
                     .Capitalized terms used but not defined in this
Annex V shall have  the meanings
ascribed to them in the Agreement.

 

1.                                      Definitions. For purposes of the Agreement and this Annex V, the following terms shall
have the following meanings:

 

“Forward Exposure”, the amount
of loss a party would incur upon canceling a Forward  Transaction and entering into a replacement
transaction, determined in accordance with  market practice or as otherwise agreed by the parties;

 

“Forward Transaction”, any
Transaction agreed to by the parties as to which the Purchase Date has not yet
occurred;

 

“Net Forward Exposure”, the
aggregate amount of a party’s Forward Exposure to the other  party under all Forward Transactions hereunder
reduced by the aggregate amount of any  Forward Exposure of the other party to such party under all Forward
Transactions hereunder;

 

“Net Unsecured Forward
Exposure”, a party’s Net Forward Exposure reduced by the Market  Value of any Forward Collateral transferred to
such party (and not returned) pursuant to  Paragraph 2 of this Annex V.

 

2.                                      Margin Maintenance.

(a)     If at any time a party (the “In-the-Money Party”)
shall have a Net Unsecured Forward  Exposure
to the other party (the “Out-of-the-Money Party”) under one or more Forward
Transactions, the In-the-Money Party may by
notice to the Out-of-the-Money Party  require
the Out-of-the-Money Party to transfer to the In-the-Money Party Securities or
cash reasonably acceptable to the
In-the-Money-Party (together with any Income thereon  and proceeds there of, “Forward Collateral”)
having a Market Value sufficient to eliminate  such Net Unsecured Forward Exposure. The Out-of-the-Money Party may by
notice to  the In-the-Money Party
require the In-the-Money Party to transfer to the Out-of-the-Money  Party Forward Collateral having a Market Value
that exceeds the In-the-Money  Party’s
Net Forward Exposure (“Excess Forward Collateral Amount”).The rights of the
parties under this subparagraph shall be in
addition to their rights under subparagraphs  (a) and (b) of Paragraph 4 and any other provisions of the Agreement.

(b)The parties may agree, with
respect to any or all Forward Transactions hereunder, that  the respective rights of the parties under
subparagraph (a) of this Paragraph may be exercised  only where a Net Unsecured Forward Exposure or
Excess Forward Collateral  Amount, as
the case may be, exceeds a specified dollar amount or other specified threshold
for such Forward Transactions (which amount
or threshold shall be agreed to by the  parties prior to entering into any such Forward Transactions).

 

(c)     The parties may agree, with respect to any or all
Forward Transactions hereunder, that  the
respective rights of the parties under subparagraph (a) of this Paragraph to
require  the elimination of a Net
Unsecured Forward Exposure or Excess Forward Collateral

 

22

 

Amount, as the case may be, may
be exercised whenever such a Net Unsecured Forward  Exposure or Excess Forward Collateral Amount
exists with respect to any single Forward Transaction hereunder
(calculated without regard to any other Forward Transaction outstanding
hereunder).

 

(d)    The parties may agree, with respect to any or all
Forward Transactions hereunder, that (i)  one party shall transfer to the other party Forward Collateral having a
Market Value  equal to a specified
dollar amount or other specified threshold no later than the Margin  Notice Deadline on the day such Forward
Transaction is entered into by the parties or (ii)  one party shall not be required to make any
transfer otherwise required to be made  under this Paragraph if, after giving effect to such transfer, the Market
Value of the  Forward Collateral held
by such party would be less than a specified dollar amount or  other specified threshold (which amount or
threshold shall be agreed to by the parties  prior to entering into any such Forward Transactions).

 

(e)     If any notice is given by a party to the other
under subparagraph (a) of this Paragraph at  or before the Margin Notice Deadline on any business day, the party
receiving such  notice shall transfer
Forward Collateral as provided in such subparagraph no later than  the close of business in the relevant market on
such business day. If any such notice is  given after the Margin Notice Deadline, the party receiving such notice
shall transfer such  Forward
Collateral no later than the close of business in the relevant market on the
next  business day.

 

(f)       Upon the occurrence of the Purchase Date for any
Forward Transaction and the performance  by the parties of their respective obligations to transfer cash and
Securities on  such date, any Forward
Collateral in respect of such Forward Transaction, together with  any Income thereon and proceeds thereof, shall be
transferred by the party holding such  Forward Collateral to the other party; provided, however, that neither
party shall be  required to transfer
such Forward Collateral to the other if such transfer would result in  the creation of a Net Unsecured Forward Exposure
of the transferor.

 

(g)    The Pledgor (as defined below) of Forward
Collateral may, subject to agreement with and  acceptance by the Pledgee (as defined below) thereof, substitute other
Securities reason-ably  acceptable to
the Pledgee for any Securities Forward Collateral. Such substitution  shall be made by transfer to the Pledgee of such
other Securities and transfer to the  Pledgor
of such Securities Forward Collateral. After substitution, the substituted
Securities shall constitute Forward
Collateral.

 

3.                                      Security Interest.

(a)     In addition to the rights granted to the parties
under Paragraph 6 of the Agreement, each party (“Pledgor”) hereby
pledges to the other party (“Pledgee”) as security for the performance of its
obligations hereunder, and grants Pledgee a security interest in and right of
setoff against, any Forward Collateral and any other cash, Securities or
property, and all proceeds of any of the
foregoing, transferred by or on behalf of Pledgor to Pledgee or due  from Pledgee to Pledgor in connection with the
Agreement and the Forward Transactions  hereunder.

 

(b)    Unless otherwise agreed by the parties, a party
to whom Forward Collateral has been  transferred
shall have the right to engage in repurchase transactions with Forward  Collateral or otherwise sell, transfer, pledge or
hypothecate Forward Collateral, including  in respect of loans or other extensions of credit to such party that may
be in amounts  greater than the
Forward Collateral such party is entitled to as security for obligations

 

23

 

hereunder, and that may extend
for periods of time longer than the periods during which  such party is entitled to Forward Collateral as
security for obligations hereunder; provid-ed,  however, that no such transaction shall relieve such party of its
obligations to transfer  Forward
Collateral pursuant to Paragraph 2 or 4 of this Annex V or Paragraph 11 of the
Agreement.

 

4.                                    Events of Default.

(a)     In addition to the Events of Default set forth in
Paragraph 11 of the Agreement, it shall  be an additional “Event of Default” if either party fails, after one
business day’s notice, to  perform
any covenant or obligation required to be performed by it under Paragraph 2 or
any other provision of this Annex.

 

(b)    In addition to the other rights of a
nondefaulting party under Paragraphs 11 and 12 of  the Agreement, if the nondefaulting party
exercised or is deemed to have exercised the  option referred to in Paragraph 11(a) of the Agreement:

 

(i)             The nondefaulting party, without prior notice to
the defaulting party, may (A) immediately sell, in a recognized market (or
otherwise in a commercially reasonable manner)  at such price or prices as the nondefaulting party may reasonably deem
satisfactory,  any or all Forward
Collateral subject to any or all Forward Transactions hereunder  and apply the proceeds thereof to any amounts
owing by the defaulting party  hereunder
or (B) in its sole discretion elect, in lieu of selling all or a portion of such
Forward Collateral, to give the defaulting
party credit for such Forward Collateral in  an amount equal to the price therefor on such date, obtained from a
generally recognized  source or the
most recent closing bid quotation from such a source, against any  amounts owing by the defaulting party hereunder.

 

(ii)          Any Forward Collateral held by the defaulting
party, together with any Income there-on  and proceeds thereof, shall be immediately transferred by the defaulting
party to  the nondefaulting party.
The nondefaulting party may, at its option (which option  shall be deemed to have been exercised
immediately upon the occurrence of an Act of  Insolvency), and without prior notice to the defaulting party, (i)
immediately purchase,  in a
recognized market (or otherwise in a commercially reasonable manner) at  such price or prices as the nondefaulting party
may reasonably deem satisfactory,  securities
(“Replacement Securities”) of the same class and amount as any Securities
Forward Collateral that is not delivered by
the defaulting party to the nondefaulting  party as required hereunder or (ii) in its sole discretion elect, in lieu
of purchasing  Replacement
Securities, to be deemed to have purchased Replacement Securities at  the price therefor on such date, obtained from a
generally recognized source or the  most
recent closing offer quotation from such a source, whereupon the defaulting
party shall be liable for the price of such
Replacement Securities together with the  amount of any cash Forward Collateral not delivered by the defaulting
party to the  nondefaulting party as
required hereunder.

 

Unless otherwise provided in
Annex I, the parties acknowledge and agree that (1) the  Forward Collateral subject to any Forward
Transaction hereunder are instruments traded in a recognized market, (2) in the
absence of a generally recognized source for prices or bid quotations for any
Forward Collateral, the nondefaulting party may establish the source therefor
in its sole discretion and (3) all prices and bids shall be determined together
with accrued Income (except to the extent contrary to market practice with
respect to the relevant Forward Collateral).

 

24

 

5.                                      No Waivers, Etc. Without limitation of the provisions of Paragraph
17 of the Agreement, the  failure to
give a notice pursuant to subparagraph (a), (b), (c) or (d) of Paragraph 2 of
this  Annex V will not constitute a
waiver of any right to do so at a later date.

 

25

 

Annex VI

 

Buy/Sell Back Transactions

 

This Annex VI forms a part of the Master
Repurchase Agreement dated as of
               
,     (the “Agreement”) between
                    
and
                    
..Capitalized terms used but not defined in this Annex VI shall have the
meanings ascribed to them in the Agreement.

 

1.              In the event of any conflict between the terms of
this Annex VI and any other term of the Agreement, the terms of this Annex VI
shall prevail.

 

2.              Each Transaction shall be identified at the time it
is entered into and in the relevant Confirmation as either a Repurchase
Transaction or a Buy/Sell Back Transaction.

 

3.              In the case of a Buy/Sell Back Transaction, the
Confirmation delivered in accordance with  Paragraph 3 of the Agreement may consist of a single document in respect
of both of the  transfers of funds
against Securities which together form the Buy/Sell Back Transaction or  separate Confirmations may be delivered in
respect of each such transfer.

 

4.              Definitions.The following definitions shall apply to Buy/Sell Back Transactions:

(a)                                  “Accrued Interest”, with respect to any Purchased
Securities subject to a Buy/Sell Back  Transaction, unpaid Income that has accrued during the period from (and
including) the  issue date or the
last Income payment date (whichever is later) in respect of such  Purchased Securities to (but excluding) the date
of calculation. For these purposes  unpaid
Income shall be deemed to accrue on a daily basis from (and including) the
issue  date or the last Income
payment date (as the case may be) to (but excluding) the next  Income payment date or the maturity date
(whichever is earlier);

 

(b)                                 “Sell Back Differential”, with respect to any
Buy/Sell Back Transaction as of any date, the  aggregate amount obtained by daily application of the Pricing Rate for
such Buy/Sell  Back Transaction to
the Purchase Price for such Buy/Sell Back Transaction on a 360 day  per year basis (unless otherwise agreed by the
parties for the Transaction) for the actual  number of days during the period commencing on (and including) the
Purchase Date for  such Buy/Sell Back
Transaction and ending on (but excluding) the date of determination;

 

(c)                                  “Sell Back Price”, with respect to any Buy/Sell
Back Transaction:

 

(i)              in
relation to the date originally specified by the parties as the Repurchase Date
pursuant  to Paragraph 2(q) of the
Agreement, the price agreed by the Parties in relation  to such Buy/Sell Back Transaction, and

 

(ii)           in any
other case (including for the purposes of the application of Paragraph 4 or
Paragraph 11 of the Agreement),the product
of the formula (P + D) - (IR + C),  where
—

 

P =        the
Purchase Price

 

D =      the Sell Back
Differential

 

IR =   the amount of
any Income in respect of the Purchased Securities paid by the issuer on any
date falling between the Purchase Date and the Repurchase Date

 

26

 

C =       the
aggregate amount obtained by daily application of the Pricing Rate for such
Buy/Sell Back Transaction to any such Income from (and including) the date of
pay-ment by the issuer to (but excluding) the date of calculation.

 

5.              When entering into a Buy/Sell Back Transaction
the parties shall also agree on the Sell Back  Price and the Pricing Rate to apply in relation to such Buy/Sell Back
Transaction on the  scheduled
Repurchase Date. The parties shall record the Pricing Rate in at least one
Confirmation applicable to such Buy/Sell
Back Transaction.

 

6.              Termination of a Buy/Sell Back Transaction shall
be effected on the Repurchase Date by  transfer to Seller or its agent of Purchased Securities against the
payment by Seller of (i) in a  case
where the Repurchase Date is the date originally agreed to by the parties
pursuant to  Paragraph 2(q) of the
Agreement, the Sell Back Price referred to in Paragraph 4(c)(i) of this  Annex; and (ii) in any other case, the Sell Back
Price referred to in Paragraph 4(c)(ii) of this  Annex.

 

7.              For the avoidance of doubt, the parties
acknowledge and agree that the Purchase Price and  the Sell Back Price in Buy/Sell Back Transactions
shall include Accrued Interest (except to the  extent contrary to market practice with respect to the Securities subject
to such Buy/Sell Back  Transaction,
in which event (i) an amount equal to the Purchase Price plus Accrued Interest
to the Purchase Date shall be paid to
Seller on the Purchase Date and shall be used, in lieu of  the Purchase Price, for calculating the Sell Back
Differential, (ii) an amount equal to the Sell  Back Price plus the amount of Accrued Interest to the Repurchase Date
shall be paid to Buyer  on the
Repurchase Date, and (iii) the formula in Paragraph 4(c)(ii) of this Annex VI
shall be  replaced by the formula “(P
+ AI + D) - (IR + C)”, where “AI” equals Accrued Interest to the  Purchase Date).

 

8.              Unless the parties agree in Annex I to the Agreement
that a Buy/Sell Back Transaction is not  to be repriced, they shall at the time of repricing agree on the Purchase
Price, the Sell Back  Price and the
Pricing Rate applicable to such Transaction.

 

9.              Paragraph 5 of the Agreement shall not apply to Buy/Sell
Back Transactions. Seller agrees, on  the
date such Income is received, to pay to Buyer any Income received by Seller in
respect of  Purchased Securities that
is paid by the issuer on any date falling between the Purchase Date  and the Repurchase Date.

 

10.       References to “Repurchase Price” throughout the Agreement shall be
construed as references  to
“Repurchase Price or the Sell Back Price, as the case may be.”

 

11.       In 11 of the Agreement, references to the “Repurchase Prices” shall be
construed as references  to
“Repurchase Prices and Sell Back Prices.”

 

27

 

Annex VII

 

Transactions Involving Registered Investment Companies

 

This Annex VII (including any Schedules hereto)
forms a part of the Master Repurchase  Agreement dated as
of                    
,     (the “Agreement”) between
                     (“Counterparty”) and each investment company
identified on  Schedule VII.A hereto
(as such schedule may be amended from time to time) acting on  Behalf of its respective series or portfolios
identified on such Schedule VII.A, or in the case of  those investment companies for which no separate
series or portfolios are identified on such  Schedule VII.A, acting for and on behalf of itself(each such series,
portfolio or investment  company, as
the case may be, hereinafter referred to as a “Fund”).In the event of any
conflict  between the terms of this
Annex VII and any other term of the Agreement, the terms of this  Annex VII shall prevail. Capitalized terms used
but not defined in this Annex VII shall have  the meanings ascribed to them in the Agreement.

 

1.                                      Multiple Funds. For any Transaction in which a Fund is acting as
Buyer (or Seller, as the case  may
be),each reference in the Agreement and this Annex VII to Buyer (or Seller, as
the case  may be) shall be deemed a
reference solely to the particular Fund to which such Transaction  relates, as identified to Seller (or Buyer, as
the case may be) by the Fund and as may be specified  in the Confirmation therefor. In no circumstances
shall the rights, obligations or remedies  of either party with respect to a particular Fund constitute a right,
obligation or remedy  applicable to
any other Fund. Specifically, and without otherwise limiting the scope of this
Paragraph:(a) the margin maintenance
obligations of Buyer and Seller specified in Paragraph  4 or any other provisions of the Agreement and
the single agreement provisions of Paragraph  12 of the Agreement shall be applied based solely upon Transactions
entered into by a particular  Fund,(b)
Buyer’s and Seller’s remedies under the Agreement upon the occurrence of an
Event of Default shall be determined as if
each Fund had entered into a separate Agreement  with Counterparty, and (c) Seller and Buyer shall have no right to set
off claims related to  Transactions
entered into by a particular Fund against claims related to Transactions
entered  into by any other Fund.

 

2.                                      Margin Percentage. For any Transaction in which a Fund is acting as
Buyer, the Buyer’s  Margin Percentage
shall always be equal to at least    %,or such other percentage
as the parties hereto may from time to time mutually determine; provided, that
in no event shall such  percentage be
less than 100%.For any Transaction in which a Fund is acting as Seller, the
Buyer’s Margin Percentage shall be such
percentage as the parties hereto may from time to  time mutually determine; provided, that in no
event shall such percentage be less than 100%.

 

3.                                      Confirmations. Unless otherwise agreed, Counterparty shall promptly issue a Confirmation
to the Fund pursuant to Paragraph 3 of the
Agreement. Upon the transfer of substituted or  Additional Purchased Securities by either party, Counterparty shall
promptly provide notice  to the Fund
confirming such transfer.

 

4.                                      Financial Condition. Each party represents that it has delivered the
following financial  information to
the other party to the Agreement :in the case of a party that is a registered
broker-dealer, its most recent statements
required to be furnished to customers by  Rule 17a-5(c) under the 1934 Act; in the case of a party that is a Fund,
its most recent audited or unaudited financial statements required to be
furnished to its shareholders by Rule 30d-1 under  the Investment Company Act of 1940; in the case
of any other party, its most recent audited  or unaudited statements of financial condition or other comparable
information concerning  its financial
condition.

 

28

 

Each party represents that the
financial statements or information so delivered fairly reflect  its financial condition and, if applicable, its
net capital ratio, on the date as of which such  financial statements or information were prepared. Each party agrees that
it will make avail-able  and deliver
to the other party, promptly upon request, all such financial statements that
subsequently are required to be delivered
to its customers or shareholders pursuant to Rule  17a-5(c) or Rule 30d-1, as the case may be, or,
in the case of a party that is neither a registered  broker-dealer nor a Fund, all such financial
information that subsequently becomes  available to the public.

 

Each Fund acknowledges and
agrees that it has made an independent evaluation of the creditworthiness of
the other party that is required pursuant to the Investment Company Act of
1940 or the regulations thereunder. Each
Fund agrees that its agreement to enter into each Transaction hereunder shall
constitute an acknowledgment and agreement that it has made  such an evaluation.

 

5.                                      Segregation of Purchased Securities. Unless otherwise agreed by the parties, any
transfer of  Purchased Securities to
a Fund shall be effected by delivery or other transfer (in the manner  Agreed upon pursuant to Paragraph 7 of the
Agreement) to the custodian or subcustodian  designated for such Fund in Schedule VII.A hereto (“Custodian”) for
credit to the Fund’s custodial account with such Custodian. If the party
effecting such transfer is the Fund’s  Custodian, such party shall, unless otherwise directed by the Fund, (a)
transfer and maintain  such Purchased
Securities to and in the Fund’s custodial account with such party and (b) so
indicate in a notice to the Fund.

 

29

 

Schedule VII.A

 

Supplemental Terms and Conditions of Transactions

 

Involving Registered Investment Companies

 

This Schedule VII.A forms a part of Annex VII to
the Master Repurchase Agreement dated as  of                    
,     (the “Agreement”) between
                    
and
                    
..Capitalized terms used but not defined in this Schedule VII.A  shall have the meanings ascribed to them in Annex
VII.

 

1.                                      This Agreement is entered into by or on behalf of
the following Funds, and unless otherwise  indicated by the appropriate Fund in connection with a Transaction, the following
Custodians are designated to receive
transfers of Purchased Securities on behalf of such  Funds for credit to the appropriate Fund’s
custodial account:

 

	
  Name of Fund

  	
   

  	
  Custodian

  
	
   

  	
   

  	
   

  

 

 

o.Limitation of Liability. If the Fund is
organized as a business trust (or a series thereof), the  parties agree as follows:[insert appropriate
language limiting liability of trustees, officers and  others].

 

40 Broad Street

New York, NY 10004-2373

Telephone 212.440.9400

Fax 212.440.5260

www.bondmarkets.com

 

30

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