Document:

Exhibit 10.3

 

	
  (Bilateral Form)

  	
  (ISDA Agreements Subject to New
  York Law Only)

  

 

ISDA®

International Swaps and
Derivatives Associations, Inc.

 

CREDIT SUPPORT ANNEX

 

to the Schedule to the

 

ISDA Master Agreement

 

dated as of August 6, 2004

 

between

 

	
  Deutsche Bank AG, New York (“Party A”) and CRIIMI Financing Co., Inc. (“Party B”)

  

 

This
Annex supplements, forms part of, and is subject to, the above-referenced
Agreement, is part of its Schedule and is a Credit Support Document under
this Agreement with respect to each party.

 

Accordingly,
the parties agree as follows:—

 

Paragraph 1. Interpretation

 

(a)                               Definitions and Inconsistency.  Capitalized terms not otherwise defined
herein or elsewhere in this Agreement have the meanings specified pursuant to
Paragraph 12, and all references in this Annex to Paragraphs are to Paragraphs
of this Annex.  In the event of any
inconsistency between this Annex and the other provisions of this Schedule,
this Annex will prevail, and in the event of any inconsistency between Paragraph
13 and the other provisions of this Annex, Paragraph 13 will prevail.

 

(b)                               Secured Party and Pledgor. 
All references in this Annex to the “Secured Party” will be to either
party when acting in that capacity and all corresponding references to the “Pledgor”
will be to the other party when acting in that capacity; provided,
however, that if Other Posted Support is held by a party to this
Annex, all references herein to that party as the Secured Party with respect to
that Other Posted Support will be to that party as the beneficiary thereof and
will not subject that support or that party as the beneficiary thereof to
provisions of law generally relating to security interests and secured parties.

 

Paragraph 2. Security Interest

 

Each party, as the
Pledgor, hereby pledges to the other party, as the Secured Party, as security
for its Obligations, and grants to the Secured Party a first priority
continuing security interest in, lien on and right of Set-off against all
Posted Collateral Transferred to or received by the Secured Party
hereunder.  Upon the Transfer by the
Secured Party to the Pledgor of Posted Collateral, the security interest and
lien granted hereunder on that Posted Collateral will be released immediately and,
to the extent possible, without any further action by either party.

 

Copyright © 1994 by
International Swaps and Derivatives Association, Inc.

 

 

Paragraph 3. Credit Support Obligations

 

(a)                               Delivery Amount. 
Subject to Paragraphs 4 and 5, upon a demand made by the Secured Party
on or promptly following a Valuation Date, if the Delivery Amount for that
Valuation Date equals or exceeds the Pledgor’s Minimum Transfer Amount, then
the Pledgor will Transfer to the Secured Party Eligible Credit Support having a
Value as of the date of Transfer at least equal to the applicable Delivery
Amount (rounded pursuant to Paragraph 13). 
Unless otherwise specified in Paragraph 13, the “Delivery
Amount” applicable to the Pledgor for any Valuation Date will equal
the amount by which:

 

(i) the Credit Support Amount

 

exceeds

 

(ii) the Value as of that Valuation Date of all Posted Credit
Support held by the Secured Party.

 

(b)                               Return Amount. 
Subject to Paragraphs 4 and 5, upon a demand made by the Pledgor on or
promptly following a Valuation Date, if the Return Amount for that Valuation
Date equals or exceeds the Secured Party’s Minimum Transfer Amount, then the
Secured Party will Transfer to the Pledgor Posted Credit Support specified by
the Pledgor in that demand having a Value as of the date of Transfer as close
as practicable to the applicable Return Amount (rounded pursuant to Paragraph
13).  Unless otherwise specified in
Paragraph 13, the “Return Amount”
applicable to the Secured Party for any Valuation Date will equal the amount by
which:

 

(i) the Value as of that Valuation Date of all Posted Credit
Support held by the Secured Party

 

exceeds

 

(ii) the Credit Support Amount.

 

“Credit
Support Amount” means, unless otherwise specified in
Paragraph 13, for any Valuation Date (i) the Secured Party’s Exposure for that
Valuation Date plus (ii) the aggregate of all Independent Amounts applicable to
the Pledgor, if any, minus (iii) all Independent Amounts applicable to the
Secured Party, if any, minus (iv) the Pledgor’s Threshold; provided,
however, that the Credit Support Amount will be deemed to be zero
whenever the calculation of Credit Support Amount yields a number less than
zero.

 

Paragraph 4. Conditions Precedent, Transfer Timing, Calculations and Substitutions

 

(a)                               Conditions Precedent. 
Each Transfer obligation of the Pledgor under Paragraphs 3 and 5 and of
the Secured Party under Paragraphs 3, 4(d)(ii), 5 and 6(d) is subject to the
conditions precedent that:

 

(i) no Event of
Default, Potential Event of Default or Specified Condition has occurred and is
continuing with respect to the other party; and

 

(ii) no Early
Termination Date for which any unsatisfied payment obligations exist has
occurred or been designated as the result of an Event of Default or Specified
Condition with respect to the other party.

 

(b)                               Transfer Timing. 
Subject to Paragraphs 4(a) and 5 and unless otherwise specified, if a
demand for the Transfer of Eligible Credit Support or Posted Credit Support is
made by the Notification Time, then the relevant Transfer will be made not
later than the close of business on the next Local Business Day; if a demand is
made after the Notification Time, then the relevant Transfer will be made not
later than the close of business on the second Local Business Day thereafter.

 

(c)                                Calculations.  All
calculations of Value and Exposure for purposes of Paragraphs 3 and 6(d) will
be made by the Valuation Agent as of the Valuation Time.  The Valuation Agent will notify each party
(or the other party, if the Valuation Agent is a party) of its calculations not
later than the Notification Time on the Local Business Day following the
applicable Valuation Date (or in the case of Paragraph 6(d), following the date
of calculation).

 

2

 

(d)                               Substitutions.

 

(i) Unless otherwise
specified in Paragraph 13, upon notice to the Secured Party specifying the
items of Posted Credit Support to be exchanged, the Pledgor may, on any Local
Business Day, Transfer to the Secured Party substitute Eligible Credit Support
(the “Substitute Credit Support”); and

 

(ii) subject to
Paragraph 4(a), the Secured Party will Transfer to the Pledgor the items of
Posted Credit Support specified by the Pledgor in its notice not later than the
Local Business Day following the date on which the Secured Party receives the
Substitute Credit Support, unless otherwise specified in Paragraph 13 (the “Substitution
Date”); provided that the Secured Party will
only be obligated to Transfer Posted Credit Support with a Value as of the date
of Transfer of that Posted Credit Support equal to the Value as of that date of
the Substitute Credit Support.

 

Paragraph 5. Dispute Resolution

 

If a party (a “Disputing
Party”) disputes (I) the Valuation Agent’s calculation of a Delivery Amount or
a Return Amount or (II) the Value of any Transfer of Eligible Credit Support or
Posted Credit Support, then (1) the Disputing Party will notify the other party
and the Valuation Agent (if the Valuation Agent is not the other party) not
later than the close of business on the Local Business Day following (X) the
date that the demand is made under Paragraph 3 in the case of (I) above or (Y)
the date of Transfer in the case of (II) above, (2) subject to Paragraph 4(a),
the appropriate party will Transfer the undisputed amount to the other party not
later than the close of business on the Local Business Day following (X) the
date that the demand is made under Paragraph 3 in the case of (I) above or (Y)
the date of Transfer in the case of (II) above, (3) the parties will consult
with each other in an attempt to resolve the dispute and (4) if they fail to
resolve the dispute by the Resolution Time, then:

 

(i) In the case of
a dispute involving a Delivery Amount or Return Amount, unless otherwise
specified in Paragraph 13, the Valuation Agent will recalculate the Exposure
and the Value as of the Recalculation Date by:

 

(A) utilizing
any calculations of Exposure for the Transactions (or Swap Transactions) that
the parties have agreed are not in dispute;

 

(B) calculating the
Exposure for the Transactions (or Swap Transactions) in dispute by seeking four
actual quotations at mid-market from Reference Market-makers for purposes of
calculating Market Quotation, and taking the arithmetic average of those
obtained; provided that if four quotations are not
available for a particular Transaction (or Swap Transaction), then fewer than
four quotations may be used for that Transaction (or Swap Transaction); and if
no quotations are available for a particular Transaction (or Swap Transaction),
then the Valuation Agent’s original calculations will be used for that
Transaction (or Swap Transaction); and

 

(C) utilizing
the procedures specified in Paragraph 13 for calculating the Value, if
disputed, of Posted Credit Support.

 

(ii) In the case
of a dispute involving the Value of any Transfer of Eligible Credit Support or
Posted Credit Support, the Valuation Agent will recalculate the Value as of the
date of Transfer pursuant to Paragraph 13.

 

Following a recalculation
pursuant to this Paragraph, the Valuation Agent will notify each party (or the
other party, if the Valuation Agent is a party) not later than the Notification
Time on the Local Business Day following the Resolution Time.  The appropriate party will, upon demand
following that notice by the Valuation Agent or a resolution pursuant to (3)
above and subject to Paragraphs 4(a) and 4(b), make the appropriate Transfer.

 

3

 

Paragraph 6. Holding and Using Posted Collateral

 

(a)                               Care of Posted Collateral. 
Without limiting the Secured Party’s rights under Paragraph 6(c), the
Secured Party will exercise reasonable care to assure the safe custody of all
Posted Collateral to the extent required by applicable law, and in any event
the Secured Party will be deemed to have exercised reasonable care if it
exercises at least the same degree of care as it would exercise with respect to
its own property.  Except as specified in
the preceding sentence, the Secured Party will have no duty with respect to
Posted Collateral, including, without limitation, any duty to collect any
Distributions, or enforce or present any rights pertaining thereto.

 

(b)                               Eligibility to Hold Posted Collateral; Custodians.

 

(i) General.  Subject to
the satisfaction of any conditions specified in Paragraph 13 for holding Posted
Collateral, the Secured Party will be entitled to hold Posted Collateral or to
appoint an agent (a “Custodian”) to hold Posted Collateral for the Secured
Party.  Upon notice by the Secured Party
to the Pledgor of the appointment of a Custodian, the Pledgor’s obligations to
make any Transfer will be discharged by making the Transfer to that
Custodian.  The holding of Posted
Collateral by a Custodian will be deemed to be the holding of that Posted
Collateral by the Secured Party for which the Custodian is acting.

 

(ii)  Failure to Satisfy
Conditions.  If the Secured
Party or its Custodian fails to satisfy any conditions for holding Posted
Collateral, then upon a demand made by the Pledgor, the Secured Party will, not
later than five Local Business Days after the demand, Transfer or cause its
Custodian to Transfer all Posted Collateral held by it to a Custodian that
satisfies those conditions or to the Secured Party if it satisfies those
conditions.

 

(iii)  Liability.  The Secured Party will be liable for the acts
or omissions of its Custodian to the same extent that the Secured Party would
be liable hereunder for its own acts or omissions.

 

(c)                                Use of Posted Collateral. 
Unless otherwise specified in Paragraph 13 and without limiting the
rights and obligations of the parties under Paragraphs 3, 4(d)(ii), 5, 6(d) and
8, if the Secured Party is not a Defaulting Party or an Affected Party with
respect to a Specified Condition and no Early Termination Date has occurred or
been designated as the result of an Event of Default or Specified Condition
with respect to the Secured Party, then the Secured Party will, notwithstanding
Section 9-207 of the New York Uniform Commercial Code, have the right to:

 

(i) sell, pledge,
rehypothecate, assign, invest, use, commingle or otherwise dispose of, or
otherwise use in its business any Posted Collateral it holds, free from any
claim or right of any nature whatsoever of the Pledgor, including any equity or
right of redemption by the Pledgor; and

 

(ii) register any Posted Collateral in the name of the Secured
Party, its Custodian or a nominee for either.

For purposes of the
obligation to Transfer Eligible Credit Support or Posted Credit Support
pursuant to Paragraphs 3 and 5 and any rights or remedies authorized under this
Agreement, the Secured Party will be deemed to continue to hold all Posted
Collateral and to receive Distributions made thereon, regardless of whether the
Secured Party has exercised any rights with respect to any Posted Collateral
pursuant to (i) or (ii) above.

 

(d)                               Distributions  and Interest Amount

 

(i)   Distributions.  Subject to Paragraph 4(a), if the Secured
Party receives or is deemed to receive Distributions on a Local Business Day,
it will Transfer to the Pledgor not later than the following Local Business Day
any Distributions it receives or is deemed to receive to the extent that a
Delivery Amount would not be created or increased by that Transfer, as
calculated by the Valuation Agent (and the date of calculation will be deemed
to be a Valuation Date for this purpose).

 

4

 

(ii)   Interest Amount.  Unless otherwise specified in Paragraph 13
and subject to Paragraph 4(a), in lieu of any interest, dividends or other
amounts paid or deemed to have been paid with respect to Posted Collateral in
the form of Cash (all of which may be retained by the Secured Party), the
Secured Party will Transfer to the Pledgor at the times specified in Paragraph
13 the Interest Amount to the extent that a Delivery Amount would not be
created or increased by that Transfer, as calculated by the Valuation Agent
(and the date of calculation will be deemed to be a Valuation Date for this
purpose).  The Interest Amount or portion
thereof not Transferred pursuant to this Paragraph will constitute Posted
Collateral in the form of Cash and will be subject to the security interest
granted under Paragraph 2.

 

Paragraph 7. Events of Default

 

For purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default will exist
with respect to a party if:

 

(i) that party
fails (or fails to cause its Custodian) to make, when due, any Transfer of
Eligible Collateral, Posted Collateral or the Interest Amount, as applicable,
required to be made by it and that failure continues for two Local Business
Days after notice of that failure is given to that party;

 

(ii) that party
fails to comply with any restriction or prohibition specified in this Annex
with respect to any of the rights specified in Paragraph 6(c) and that failure
continues for five Local Business Days after notice of that failure is given to
that party; or

 

(iii) that party fails to comply with or perform any agreement or
obligation other than those specified in Paragraphs 7(i) and 7(ii) and
that failure continues for 30 days after notice of that failure is given to
that party.

 

Paragraph 8. Certain Rights and Remedies

 

(a)                               Secured Party’s Rights and Remedies. If at any time (1) an
Event of Default or Specified Condition with respect to the Pledgor has
occurred and is continuing or (2) an Early Termination Date has occurred or
been designated as the result of an Event of Default or Specified Condition
with respect to the Pledgor, then, unless the Pledgor has paid in full all of
its Obligations that are then due, the Secured Party may exercise one or more
of the following rights and remedies:

 

(i) all rights and
remedies available to a secured party under applicable law with respect to
Posted Collateral held by the Secured Party;

 

(ii) any other rights and remedies available to the Secured Party
under the terms of Other Posted Support, if any;

 

(iii) the right to
Set-off any amounts payable by the Pledgor with respect to any Obligations
against any Posted Collateral or the Cash equivalent of any Posted Collateral
held by the Secured Party (or any obligation of the Secured Party to Transfer
that Posted Collateral); and

 

(iv) the right to
liquidate any Posted Collateral held by the Secured Party through one or more
public or private sales or other dispositions with such notice, if any, as may
be required under applicable law, free from any claim or right of any nature
whatsoever of the Pledgor, including any equity or right of redemption by the
Pledgor (with the Secured Party having the right to purchase any or all of the
Posted Collateral to be sold) and to apply the proceeds (or the Cash equivalent
thereof) from the liquidation of the Posted Collateral to any amounts payable
by the Pledgor with respect to any Obligations in that order as the Secured
Party may elect.

 

Each party acknowledges
and agrees that Posted Collateral in the form of securities may decline
speedily in value and is of a type customarily sold on a recognized market,
and, accordingly, the Pledgor is not entitled to prior notice of any sale of
that Posted Collateral by the Secured Party, except any notice that is required
under applicable law and cannot be waived.

 

5

 

(b)                               Pledgor’s Rights and Remedies.  If at any time an Early Termination Date has
occurred or been designated as the result of an Event of Default or Specified
Condition with respect to the Secured Party, then (except in the case of an
Early Termination Date relating to less than all Transactions (or Swap
Transactions) where the Secured Party has paid in full all of its obligations
that are then due under Section 6(e) of this Agreement):

 

(i) the Pledgor may exercise all rights and remedies available
to a pledgor under applicable law with respect to Posted Collateral held by the
Secured Party;

 

(ii) the Pledgor may exercise any other rights and remedies
available to the Pledgor under the terms of Other Posted Support, if any;

 

(iii) the Secured Party will be obligated immediately to Transfer
all Posted Collateral and the Interest Amount to the Pledgor; and

 

(iv) to the extent that Posted Collateral or the Interest Amount
is not so Transferred pursuant to (iii) above, the Pledgor may:

 

(A) Set-off any amounts
payable by the Pledgor with respect to any Obligations against any Posted
Collateral or the Cash equivalent of any Posted Collateral held by the Secured
Party (or any obligation of the Secured Party to Transfer that Posted
Collateral); and

 

(B) to the extent that
the Pledgor does not Set-off under (iv)(A) above, withhold payment of any
remaining amounts payable by the Pledgor with respect to any Obligations, up to
the Value of any remaining Posted Collateral held by the Secured Party, until
that Posted Collateral is Transferred to the Pledgor.

 

(c)                                Deficiencies and Excess Proceeds. The Secured Party will
Transfer to the Pledgor any proceeds and Posted Credit Support remaining after
liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b) after
satisfaction in full of all amounts payable by the Pledgor with respect to any
Obligations; the Pledgor in all events will remain liable for any amounts
remaining unpaid after any liquidation, Set-off and/or application under
Paragraphs 8(a) and 8(b).

 

(d)                               Final Returns. When no amounts are or thereafter may become
payable by the Pledgor with respect to any Obligations (except for any
potential liability under Section 2(d) of this Agreement), the Secured
Party will Transfer to the Pledgor all Posted Credit Support and the Interest
Amount, if any.

 

Paragraph 9. Representations

 

Each party represents to
the other party (which representations will be deemed to be repeated as of each
date on which it, as the Pledgor, Transfers Eligible Collateral) that:

 

(i) it has the power to grant a security interest in and lien on
any Eligible Collateral it Transfers as the Pledgor and has taken all necessary
actions to authorize the granting of that security interest and lien;

 

(ii) it is the
sole owner of or otherwise has the right to Transfer all Eligible Collateral it
Transfers to the Secured Party hereunder, free and clear of any security
interest, lien, encumbrance or other restrictions other than the security
interest and lien granted under Paragraph 2;

 

(iii) upon the
Transfer of any Eligible Collateral to the Secured Party under the terms of
this Annex, the Secured Party will have a valid and perfected first priority
security interest therein (assuming that any central clearing corporation or
any third-party financial intermediary or other entity not within the control
of the Pledgor involved in the Transfer of that Eligible Collateral gives the
notices and takes the action required of it under applicable law for perfection
of that interest); and

 

(iv) the
performance by it of its obligations under this Annex will not result in the
creation of any security interest, lien or other encumbrance on any Posted
Collateral other than the security interest and lien granted under Paragraph 2.

 

6

 

Paragraph 10. Expenses

 

(a)                               General.  Except as
otherwise provided in Paragraphs 10(b) and 10(c), each party will pay its own
costs and expenses in connection with performing its obligations under this
Annex and neither party will be liable for any costs and expenses incurred by
the other party in connection herewith.

 

(b)                               Posted Credit Support. 
The Pledgor will promptly pay when due all taxes, assessments or charges
of any nature that are imposed with respect to Posted Credit Support held by
the Secured Party upon becoming aware of the same, regardless of whether any
portion of that Posted Credit Support is subsequently disposed of under
Paragraph 6(c), except for those taxes, assessments and charges that result
from the exercise of the Secured Party’s rights under Paragraph 6(c).

 

(c)                                Liquidation/Application of Posted Credit Support.  All reasonable costs and expenses incurred by
or on behalf of the Secured Party or the Pledgor in connection with the
liquidation and/or application of any Posted Credit Support under Paragraph 8
will be payable, on demand and pursuant to the Expenses Section of this Agreement,
by the Defaulting Party or, if there is no Defaulting Party, equally by the
parties.

 

Paragraph 11. Miscellaneous

 

(a)                               Default Interest.  A
Secured Party that fails to make, when due, any Transfer of Posted Collateral
or the Interest Amount will be obligated to pay the Pledgor (to the extent
permitted under applicable law) an amount equal to interest at the Default Rate
multiplied by the Value of the items of property that were required to be
Transferred, from (and including) the date that Posted Collateral or Interest
Amount was required to be Transferred to (but excluding) the date of Transfer
of that Posted Collateral or Interest Amount. 
This interest will be calculated on the basis of daily compounding and
the actual number of days elapsed.

 

(b)                               Further Assurances. 
Promptly following a demand made by a party, the other party will
execute, deliver, file and record any financing statement, specific assignment
or other document and take any other action that may be necessary or desirable
and reasonably requested by that party to create, preserve, perfect or validate
any security interest or lien granted under Paragraph 2, to enable that party
to exercise or enforce its rights under this Annex with respect to Posted
Credit Support or an Interest Amount or to effect or document a release of a
security interest on Posted Collateral or an Interest Amount.

 

(c)                                Further Protection. 
The Pledgor will promptly give notice to the Secured Party of, and
defend against, any suit, action, proceeding or lien that involves Posted
Credit Support Transferred by the Pledgor or that could adversely affect the
security interest and lien granted by it under Paragraph 2, unless that suit,
action, proceeding or lien results from the exercise of the Secured Party’s
rights under Paragraph 6(c).

 

(d)                               Good Faith and Commercially Reasonable Manner.  Performance of all obligations under this
Annex, including, but not limited to, all calculations, valuations and
determinations made by either party, will be made in good faith and in a
commercially reasonable manner.

 

(e)                                Demands and Notices. 
All demands and notices made by a party under this Annex will be made as
specified in the Notices Section of this Agreement, except as otherwise
provided in Paragraph 13.

 

(f)                                   Specifications of Certain Matters.  Anything referred to in this Annex as being
specified in Paragraph 13 also may be specified in one or more Confirmations or
other documents and this Annex will be construed accordingly.

 

7

 

Paragraph 12.  Definitions

 

As used in this Annex:–

 

“Cash”
means the lawful currency of the United States of America.

 

“Credit
Support Amount” has the meaning specified in Paragraph 3.

 

“Custodian”
has the meaning specified in Paragraphs 6(b)(i) and
13.

 

“Delivery
Amount” has the meaning specified in Paragraph 3(a).

 

“Disputing
Party” has the meaning specified in Paragraph 5.

 

“Distributions”
means with respect to Posted Collateral other than Cash, all principal,
interest and other payments and distributions of cash or other property with
respect thereto, regardless of whether the Secured Party has disposed of that
Posted Collateral under Paragraph 6(c). 
Distributions will not include any item of property acquired by the
Secured Party upon any disposition or liquidation of Posted Collateral or, with
respect to any Posted Collateral in the form of Cash, any distributions on that
collateral, unless otherwise specified herein.

 

“Eligible
Collateral” means, with respect to a party, the items, if
any, specified as such for that party in Paragraph 13.

 

“Eligible
Credit Support” means Eligible Collateral and Other Eligible
Support.

 

“Exposure”
means for any Valuation Date or other date for which Exposure is calculated and
subject to Paragraph 5 in the case of a dispute, the amount, if any, that would
be payable to a party that is the Secured Party by the other party (expressed
as a positive number) or by a party that is the Secured Party to the other
party (expressed as a negative number) pursuant to Section 6(e)(ii)(2)(A)
of this Agreement as if all Transactions (or Swap Transactions) were being
terminated as of the relevant Valuation Time; provided
that Market Quotation will be determined by the Valuation Agent using its
estimates at mid-market of the amounts that would be paid for Replacement
Transactions (as that term is defined in the definition of “Market Quotation”).

 

“Independent
Amount” means, with respect to a party, the amount specified
as such for that party in Paragraph 13; if no amount is specified, zero.

 

“Interest
Amount” means, with respect to an Interest Period, the
aggregate sum of the amounts of interest calculated for each day in that
Interest Period on the principal amount of Posted Collateral in the form of
Cash held by the Secured Party on that day, determined by the Secured Party for
each such day as follows:

 

(x)           the amount of that Cash on that day; multiplied by

 

(y)         the Interest Rate in effect for that day; divided by

 

(z)           360.

 

“Interest
Period” means the period from (and including) the last Local
Business Day on which an Interest Amount was Transferred (or, if no Interest
Amount has yet been Transferred, the Local Business Day on which Posted
Collateral in the form of Cash was Transferred to or received by the Secured
Party) to (but excluding) the Local Business Day on which the current Interest
Amount is to be Transferred.

 

“Interest
Rate” means the rate specified in Paragraph 13.

 

“Local
Business Day”, unless otherwise specified in Paragraph 13,
has the meaning specified in the Definitions Section of this Agreement,
except that references to a payment in clause (b) thereof will be deemed to
include a Transfer under this Annex.

 

8

 

“Minimum
Transfer Amount” means, with respect to a party, the amount
specified as such for that party in Paragraph 13; if no amount is specified,
zero.

 

“Notification
Time” has the meaning specified in Paragraph 13.

 

“Obligations”
means, with respect to a party, all present and future obligations of that
party under this Agreement and any additional obligations specified for that
party in Paragraph 13.

 

“Other
Eligible Support” means, with respect to a party, the items,
if any, specified as such for that party in Paragraph 13.

 

“Other
Posted Support”  means all
Other Eligible Support Transferred to the Secured Party that remains in effect
for the benefit of that Secured Party.

 

“Pledgor”
means either party, when that party (i) receives a demand for or is required to
Transfer Eligible Credit Support under Paragraph 3(a) or (ii) has Transferred
Eligible Credit Support under Paragraph 3(a).

 

“Posted
Collateral” means all Eligible Collateral, other property,
Distributions, and all proceeds thereof that have been Transferred to or
received by the Secured Party under this Annex and not Transferred to the
Pledgor pursuant to Paragraph 3(b), 4(d)(ii) or 6(d)(i) or released by the
Secured Party under Paragraph 8. Any Interest Amount or portion thereof not
Transferred pursuant to Paragraph 6(d)(ii) will
constitute Posted Collateral in the form of Cash.

 

“Posted
Credit Support” means Posted Collateral and Other Posted
Support.

 

“Recalculation
Date” means the Valuation Date that gives rise to the dispute
under Paragraph 5; provided, however,
that if a subsequent Valuation Date occurs under Paragraph 3 prior to the
resolution of the dispute, then the “Recalculation Date” means the most recent
Valuation Date under Paragraph 3.

 

“Resolution
Time” has the meaning specified in Paragraph 13.

 

“Return
Amount” has the meaning specified in Paragraph 3(b).

 

“Secured
Party” means either party, when that party (i) makes a demand
for or is entitled to receive Eligible Credit Support under Paragraph 3(a) or
(ii) holds or is deemed to hold Posted Credit Support.

 

“Specified
Condition” means, with respect to a party, any event
specified as such for that party in Paragraph 13.

 

“Substitute
Credit Support” has the meaning specified in Paragraph 4(d)(i).

 

“Substitution
Date” has the meaning specified in Paragraph 4(d)(ii).

 

“Threshold”
means, with respect to a party, the amount specified as such for that party in
Paragraph 13; if no amount is specified, zero.

 

“Transfer”
means, with respect to any Eligible Credit Support, Posted Credit Support or
Interest Amount, and in accordance with the instructions of the Secured Party,
Pledgor or Custodian, as applicable:

 

(i) in the case of Cash, payment or delivery by wire transfer
into one or more bank accounts specified by the recipient;

 

(ii) in the case
of certificated securities that cannot be paid or delivered by book-entry,
payment or delivery in appropriate physical form to the recipient or its
account accompanied by any duly executed instruments of transfer, assignments
in blank, transfer tax stamps and any other documents necessary to constitute a
legally valid transfer to the recipient;

 

(iii) in the case
of securities that can be paid or delivered by book-entry, the giving of
written instructions to the relevant depository institution or other entity
specified by the recipient, together with a written copy thereof to the
recipient, sufficient if complied with to result in a legally effective
transfer of the relevant interest to the recipient; and

 

(iv) in the case of Other Eligible Support or Other Posted
Support, as specified in Paragraph 13.

 

9

 

“Valuation
Agent” has the meaning specified in Paragraph 13.

 

“Valuation
Date” means each date specified in or otherwise determined
pursuant to Paragraph 13.

 

“Valuation
Percentage” means, for any item of Eligible Collateral, the
percentage specified in Paragraph 13.

 

“Valuation
Time” has the meaning specified in Paragraph 13.

 

“Value”
means for any Valuation Date or other date for which Value is calculated and
subject to Paragraph 5 in the case of a dispute, with respect to:

 

(i) Eligible
Collateral or Posted Collateral that is:

 

(A) Cash, the amount
thereof; and

 

(B) a
security, the bid price obtained by the Valuation Agent multiplied by the
applicable Valuation Percentage, if any;

 

(ii) Posted
Collateral that consists of items that are not specified as Eligible
Collateral, zero; and

 

(iii) Other
Eligible Support and Other Posted Support, as specified in Paragraph 13.

 

10Exhibit 10.4

 

MASTER NETTING AGREEMENT

 

Master
Netting Agreement, dated as of August 6, 2004 (as
amended, modified and supplemented from time to time, this “Master Agreement”)
between CRIIMI Financing Co., Inc. (the “Counterparty”)
and Deutsche Bank  AG (“Deutsche
Bank”).  Capitalized terms used herein
and not otherwise defined shall have the meaning set forth in Section 13
hereof.

 

WITNESSETH:

 

WHEREAS,
Deutsche Bank and the Counterparty have entered, or may from time to time
enter, into transactions and Agreements to govern such transactions;

 

WHEREAS, Deutsche
Bank and the Counterparty desire to (i) reduce operational expense and credit
risk in respect of the Agreements and (ii) set forth the rights of each party
to cause the termination or liquidation of Agreements in the event of the
occurrence of certain circumstances affecting the other party.

 

NOW,
THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties hereto agree as follows:

 

1.                                      Cross Margining

 

(A)  Calculation of Deficit and
Excess

 

On
each Business Day on which a transaction under any Agreement is outstanding,
Deutsche Bank shall use reasonable efforts to determine whether there exists a
Deficit or an Excess with respect to each Agreement and, if so, use reasonable
efforts to determine the amount of each such Deficit or Excess, which amount
shall be determined in accordance with the provisions of the relevant
Agreement.

 

(B)
Application of Excesses to Deficits

 

(i)  In
the event that, on any Business Day, there is an Excess under any Agreement and
a Deficit under any Agreement, Deutsche Bank shall, notwithstanding the minimum
transfer provisions of any Agreement, apply the aggregate of such Excesses to
reduce the aggregate of such Deficits (a) in the event that such Excess does
not include any Positive Exposure in the Swap Agreement, by transferring such
Excesses (to the extent of such Deficits) to satisfy the obligations of
Counterparty under the other Agreement and (b) in the event that such Excess
includes Positive Exposure, by crediting on its records such Positive Exposure.
In the event any such transfer or application of Positive Exposure is made,
Deutsche Bank shall determine in its discretion the priority within or among
one or more DB Entities for application of Excesses to reduce Deficits.

 

Such
transfers (if any) shall be deemed to be, as the case may be, (x) a delivery by
the DB Entity having such Excess to the Counterparty of (i) a return of excess
collateral posted to such DB Entity pursuant to the relevant Agreement, or (ii)
Cash Collateral and (y) a simultaneous delivery by the

 

 

Counterparty to the DB
Entity having such Deficit as a delivery of collateral in accordance with the
terms of the relevant Agreement.

 

If
after giving effect to any such application (i) any Deficit remains,
Counterparty shall transfer collateral in the amount of the remaining Deficit
to the Relevant DB Entity in accordance with the provisions of the relevant
Agreement or (ii) any Excess remains unapplied, Deutsche Bank on behalf of the
Relevant DB Entity shall return collateral in the amount of such unapplied
Excess to Counterparty in accordance with the provisions of the relevant
Agreement; provided, that for purposes of this subsection (ii), it
is understood that no collateral shall be returned if and to the extent that
the unapplied Excess is based upon a Positive Exposure.

 

2.                                      Termination
of the Agreements

 

(A)  Termination
Events

 

Deutsche
Bank and the Counterparty hereby agree that if a Termination Event shall occur
with respect to any Agreement, then all (but not less than all) of the
Agreements shall be deemed to be terminated simultaneously with the first
Agreement.

 

(B)  Termination
Amounts

 

(i)  Upon
the occurrence of a Termination Event, with respect to each Agreement, Deutsche
Bank shall determine the amount of the Deficit Termination Amount or Excess
Termination Amount, as applicable, by (a) calculating the termination amount in
accordance with the provisions of the relevant Agreement, or (b) if no such
provisions are specified, by following such procedures Deutsche Bank determines
are commercially reasonable and in accordance with industry practice.  Deutsche Bank shall provide notice to the
Counterparty of any Deficit Termination Amount, Excess Termination Amount or
any reduction or set-off pursuant to this Section 2(B).

 

(ii)  Notwithstanding
anything to the contrary in any of the Agreements, in the event Deutsche Bank
on the date on which the Agreements terminate because of a Termination Event
(the “Termination Date”) determines there exists both Excess Termination
Amounts and Deficit Termination Amounts, such Excess Termination Amounts shall
be reduced by and set-off against Deficit Termination Amounts and the
obligations under each of the relevant Agreements shall be deemed discharged
and satisfied in all respects to the extent they are so set-off.  In the event any such set-off is made,
Deutsche Bank shall determine in its discretion the priority within Deutsche
Bank for application of Excess Termination Amount to reduce Deficit Termination
Amounts.

 

(iii) If after giving effect to any such set-off, (a)
the sum of the Deficit Termination Amounts exceeds the Excess Termination
Amounts, the Counterparty shall pay to the Relevant DB Entity the amount of
such excess, or (b) the sum of the Excess Termination Amounts exceeds the
Deficit Termination Amounts, Deutsche Bank on behalf of the Relevant DB Entity
shall pay to the Counterparty the amount of such excess.  The excess amount calculated as being payable
in accordance with the preceding sentences shall be due on the first Business
Day after the Termination Date.  Such
amount shall be payable by the relevant party together with (to the extent permitted
under applicable law) interest thereon from, and including, the Termination
Date, but excluding, the date of

 

2

 

payment
at the overnight federal funds rate from time to time in effect calculated on
the basis of a year of 360 days and paid for actual days elapsed.

 

(iv)
If the exercise of any right to reduce and set-off pursuant to this Master
Agreement shall be avoided or set aside by a court or shall be restrained,
stayed or enjoined under applicable law, the obligations in respect thereof
shall be reinstated or, in the event of restraint, stay or injunction,
preserved in at least the amounts as of the date of restraint, stay or
injunction between the applicable DB Entities, on the one hand, and the
Counterparty on the other, until such time as such restraint, stay or
injunction shall no longer prohibit exercise of such right.

 

(C)  Collateral

 

(i) Subject to the
limitations set forth in any of the Agreements, upon the occurrence of a
Termination Event, Deutsche Bank (a) shall have all rights and remedies
available to a secured party under applicable law with respect to the  Collateral, (b) may take any  action
to effect  the collection of  amounts
owing from the Counterparty with respect to any  Collateral,
including any remedies available in respect of any security for such amounts,
and (c) without prior notice to or demand upon the Counterparty, may liquidate
all  or any  part
of the Collateral in a commercially reasonable manner with the proceeds of such
liquidation constituting additional Collateral hereunder.

 

(ii)  Proceeds
of any sale or other disposition of all or any part of the Collateral shall be
applied, in the following order:

 

(a)                                  first,
to the payment of the reasonable costs and expenses (including without
limitation attorneys’ fees and expenses but excluding consequential damages and
any lost profit or opportunity) incurred in collecting or liquidating any
Collateral, or in otherwise enforcing any of the rights hereunder;

 

(b)                                 second,
to the payment of Secured Obligations owing to Deutsche Bank, until such
amounts have been paid in full; and

 

(c)                                  third, to the payment to the Counterparty of any
surplus then remaining from such proceeds together with any unsold Collateral.

 

If the proceeds of
sale or other disposition of the Collateral are insufficient to pay in full all
expenses and other amounts described above, then Deutsche Bank shall determine
to  which of such expenses or other
amounts, as the case may be, such proceeds shall be  applied
(taking into account the priority therefor), and the Counterparty shall remain
liable to the DB Entities for any deficiency. 
Deutsche Bank shall provide notice within two (2) Business Days to the
Counterparty of any such application.

 

3.                                      Discharge of Obligations Under
the Agreements

 

Upon
payment in full by the Counterparty or Deutsche Bank, as the case may be, of
all amounts specified in Section 2 hereof, all obligations of the
Counterparty and Deutsche Bank under the Agreements shall be satisfied in all
respects and no further payments shall be due and owing from Deutsche Bank and
the Counterparty in respect of the Agreements.

 

3

 

4.                                      Non-Exclusive Remedies

 

The
parties hereto agree that the terms and provisions set forth in this Master
Agreement are not exclusive and nothing herein shall prevent either party
hereto from exercising any right such party may have under the Agreement or
other agreement to cause the termination, liquidation or acceleration of any Agreement
to exercise any right under any security relating to any Agreement or any right
to net or set-off payments which may arise under any Agreement or other
agreement or under applicable law.

 

5.                                      Master Agreement

 

This
Master Agreement, together with each Agreement and any supplements,
modifications or amendments hereto or thereto, shall constitute a single
business and contractual relationship among the parties with respect to the
subject matter hereof.

 

6.                                      Cross Default

 

In
addition to and not in limitation of any other provision hereof, each party to
this Master Agreement agrees that, upon the occurrence of any Termination Event
or the occurrence or existence of a default, event of default or other similar
condition or event with respect to any agreement between the Counterparty or
any of its Affiliates, on the one hand, and Deutsche Bank or any of its
Affiliates, on the other, then the non-defaulting party shall have the right,
but not the obligation, to (a) liquidate any Transaction or terminate any Agreement,
(b) reduce any amounts due and owing to it under any Transaction by setting off
against such amounts any amounts due and owing to it by the other party or its
Affiliates, or (c) treat all security for, and all amounts due and owing to the
defaulting party or its affiliates under any Transaction as security for all
transactions between the defaulting party or any of its Affiliates and the
non-defaulting party or any of its affiliates.

 

7.                                      Security Interest

 

(i)  The
Counterparty hereby pledges, assigns, conveys and transfers to Deutsche Bank,
individually and collectively, a security interest in and to, and general lien
upon, the Collateral to secure ratably the prompt and complete payment when due
of the Secured Obligations (which security interest shall be subordinate only
to the security interest, if any, in favor of Deutsche Bank with respect to
particular amounts of Collateral under or in respect of the relevant
Agreements), provided that, at any time prior
to the occurrence of a Termination Event, or a Specified Condition (as set
forth in the ISDA Credit Support Annex described in Schedule I annexed
hereto) (a) if Collateral is at the time an Excess, (b) there are no Deficits
to which such Excess may be applied pursuant to this Master Agreement and (c)
no other restrictions on such return then exist (whether under applicable law,
any Agreement or otherwise), then, at the request of the Counterparty, such
Collateral shall be returned to Counterparty, free of the lien created hereby.  The DB Entities’ rights against the
Collateral provided hereunder shall be  absolute and
subject to no counterclaim, set-off, deduction or defense in favor of
Counterparty, except as contemplated herein and in the Agreements.

 

(ii)  So
long as this Master Agreement is in effect, the Counterparty covenants with
respect to Collateral pledged by it that it shall (a) defend the Collateral
from and against the claims and demands of all  parties
other than Deutsche Bank, (b) keep such Collateral free and clear from all

 

4

 

security
interests, liens or other encumbrances except the security interests, liens or
other encumbrances created by the Agreements or hereunder, (c) notify Deutsche
Bank promptly of any change in its address specified previously, and (d)
execute and deliver to Deutsche Bank, and appoints Deutsche Bank as its
attorney-in-fact, coupled with an interest to execute and deliver such
financing statements, assignments and other instruments and documents and do
such other things relating to the Collateral as Deutsche Bank may reasonably
deem necessary or desirable for the purpose of obtaining the full benefit for
Deutsche Bank of this Master Agreement and the rights and powers granted
hereunder.  Notwithstanding anything to
the contrary contained in this Master Agreement, unless a Termination Event
shall have occurred and be continuing, Counterparty (i) shall have the rights
relating to direct the exercise of all voting, consent and other control rights
with respect to Purchased Securities (as defined in the Repurchase Agreement)
and as described in Section 7(e) of the Repurchase Agreement and (ii)
Income with respect to Purchased Securities (as defined in the Repurchase
Agreement) shall be paid in accordance with Section 5 of the Repurchase
Agreement.

 

(iii)  The
Counterparty represents and warrants, and shall be deemed to represent and
warrant as of the time it enters into any Transaction and as of the time it
delivers or pledges any Collateral hereunder, to Deutsche Bank that (a) the DB
Entities have a valid and enforceable security interest in, and lien on, the
Collateral on behalf of, and for the benefit of, the DB Entities, (b) the
Counterparty has the right to pledge the Collateral as set herein and (c)
except for security interests or encumbrances in favor of the DB Entities, no
person has (or, in the case of after-acquired Collateral, at the time
Counterparty delivers or pledges rights therein, will have) any right, title,
claim or interest (by way of lien, mortgage, pledge, charge, security interest
or other encumbrance, or otherwise) in, against or to the Collateral.

 

(iv)  The
Counterparty and Deutsche Bank each agrees that all property credited to a
securities account on the books of Deutsche Bank shall be treated as a “financial
asset” for purposes of Article 8 of the Uniform Commercial Code as in
effect in the State of New York.

 

(v)  The
Counterparty and each DB Entity acknowledge that each transfer of Collateral
hereunder is a transfer under a “swap agreement”, within the meaning of Section 546(g)
of the U.S. Bankruptcy Code.

 

8.                                      Counterparty Acknowledgment

 

The
Counterparty hereby acknowledges that any such transfers, determinations or
set-off made by Deutsche Bank hereunder shall be made by Deutsche Bank in a manner
to minimize its regulatory capital costs and economic risks and the impact on
it of any insolvency or bankruptcy of the Counterparty (including, without
limitation, application of any safe harbor provisions for financial Agreements
under the U.S. Bankruptcy Code, as amended or other applicable insolvency
laws).

 

9.                                      Representations and Warranties

 

Each
party hereto represents and warrants to the other party as follows:

 

(i)  it has full power and authority to execute and deliver this
Agreement and each Agreement and to perform and observe the provisions hereof
and thereof;

 

5

 

(ii)  the
execution, delivery and performance of this Agreement and each Agreement either
have been or will be, prior to entering into each Agreement, duly authorized by
all necessary corporate action and do not and will not contravene any
requirement of law or any Agreement restriction or agreement binding on or
affecting such party or its assets; and

 

(iii)  this
Agreement has been, and each Agreement has been or will be at the time it is
entered into, duly and properly executed and delivered by such party and
constitutes and will constitute the legal, valid and binding obligation of such
party enforceable in accordance with its terms, subject to bankruptcy,
insolvency, and other limitations on creditors’ rights generally and to
equitable principles.

 

 

10.                               Notices

 

All notices, consents,
approvals and requests required or permitted hereunder shall be given in
writing and shall be effective for all purposes if hand delivered or sent by
(a) hand delivery, with proof of attempted delivery, (b) certified or
registered United States mail, postage prepaid, (c) expedited prepaid delivery
service, either commercial or United States Postal Service, with proof of
attempted delivery, or (d) by telecopier (with answerback acknowledged)
provided that such telecopied notice must also be delivered by one of the means
set forth in (a), (b) or (c) above, to the address specified in Schedule II
hereto (or in the case of an additional DB Entity added hereunder pursuant to Section 14(A),
at the address specified in the relevant notice) or at such other address and
person as shall be designated from time to time by any party hereto, as the
case may be, in a written notice to the other parties hereto in the manner
provided for in this Section 10.  A
copy of all notices, consents, approvals and requests directed to the
Counterparty (other than confirmations under the Swap Agreement) shall be
delivered concurrently to the following: 
Bilzin Sumberg Dunn Baena Price & Axelrod LLP, 2500 First Union
Financial Center, Miami, Florida 33131, Facsimile No.
(305) 374-7593, Attention: Brian L. Bilzin, Esq.  A notice shall be deemed to have been given:
(a) in the case of hand delivery, at the time of delivery, (b) in the case of
registered or certified mail, when delivered or the first attempted delivery on
a Business Day, (c) in the case of expedited prepaid delivery upon the first
attempted delivery on a Business Day, or (d) in the case telecopier, upon
receipt of answerback confirmation, provided that such telecopied notice was
also delivered as required in this Section 10.  A party receiving a notice which does not
comply with the technical requirements for notice under this Section 10
may elect to waive any deficiencies and treat the notice as having been
properly given.

 

11.                               Amendments

 

No
amendment, modification, supplement or waiver in respect of this Agreement will
be effective unless in writing and signed by each of the parties.

 

12.                               Enforceability; Entire Agreement

 

This Master
Agreement, together with the Agreements, shall constitute the entire and
exclusive understanding and agreement by the parties with respect to the
matters addressed herein.  Each Agreement
shall remain in full force and effect and shall not be affected by this Master
Agreement  except to the extent provided
herein.  In the event of any
inconsistency between the terms of this Master Agreement and any Agreement, the
terms of this Master Agreement shall prevail. 
To the extent that this Master Agreement is not enforceable as to any
Agreement, this Master Agreement shall

 

6

 

remain
in full force and effect and be enforceable in accordance with its terms as to
all other Agreements.

 

13.                               Defined Terms

 

As used in this
Master Agreement, the following words and phrases shall have the following
meanings ascribed thereto:

 

“Affiliate”
means, in relation to Deutsche Bank, (i) any entity controlled, directly or
indirectly, by the person, (ii) any entity that controls, directly or
indirectly, the person or (iii) any entity under common control with the
person.  For this purpose, “control” of
any entity or person means ownership of a majority of the voting power of the
entity or person.

 

“Agreement”
means the Swap Agreement, the Repurchase Agreement and any other agreement
between the Counterparty and a DB Entity identified on Schedule I hereto
below and any other agreement designated by a party and accepted in writing by
the other parties (including terms and conditions incorporated by reference
therein, and any master agreement together with all supplements and
confirmations thereunder), and any related security agreements (other than this
Master Agreement), as the same may be supplemented or amended from time to
time.

 

“Business
Day” means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized by law to close.

 

“Cash
Collateral” shall mean cash transferred as collateral for all
or a portion of an Excess in circumstances where the Agreement giving rise to
such Excess does not provide for the posting or return of collateral by either
the relevant DB Entity or the Counterparty. 
The interest rate and all other terms relating to such transfer of Cash
Collateral shall be specified by Deutsche Bank at the time of making such
transfer.

 

“Collateral”
refers individually and collectively to all right, title and interest of the
Counterparty in and to all  of the
following (whether now owned or hereafter acquired by the Counterparty):  (i) the Agreements, (ii) all amounts owing to
the Counterparty under the Agreements and hereunder; (iii) each deposit,
custody or other account maintained with Deutsche Bank and all amounts and property
from time to time credited to each such account; (iv) any property pledged by
Counterparty to Deutsche Bank under any Agreement (howsoever held); and (vi)
all powers and rights of the Counterparty now or hereafter acquired by the
Counterparty, including rights of enforcement, under any or all of the
foregoing.

 

“DB
Entity” means each and every one, singularly or collectively,
of the following entities, as required to suit the context:  (i) Deutsche Bank AG, Head Office, and the
Cayman Island, New York, London, Tokyo, Singapore, Brussels, Paris and Sydney
Branches of Deutsche Bank AG, (ii) Deutsche Bank Securities Inc. and (iii) any
other Branch or Affiliate of Deutsche Bank that becomes a DB Entity pursuant to
Section 14(A) of this Master Agreement, collectively.

 

“Deficit”
means, at any time and in each case expressed in U.S. Dollars or the U.S.
Dollar Equivalent:  (a) with respect to
the Swap Agreement, the Delivery Amount (as such term is defined in, and
determined in accordance with, the Swap Agreement) in respect of Counterparty,
if

 

7

 

any, at such time;
(b) with respect to the Repurchase Agreement, the Margin Deficit (as such term
is defined in, and determined in accordance with, the Repurchase Agreement), if
any, at such time; and (c) with respect to any other Agreement, the amount of
collateral, if any, required to be delivered by Counterparty at such time to
the Relevant DB Entity pursuant to the terms of such Agreement.

 

“Deficit
Termination Amount” means, at any time and in each case
expressed in U.S. Dollars or the U.S. Dollar Equivalent:  (a) with respect to the Swap Agreement, the
amount, if any, calculated as payable by Counterparty to the Relevant DB Entity
pursuant to Section 6(e) of the Swap Agreement as a result of the
occurrence or deemed occurrence of an Early Termination Date in respect of all
transactions thereunder; (b) with respect to the Repurchase Agreement, the
amount, if any, payable by Counterparty to the Relevant DB Entity as a result
of the occurrence or deemed occurrence of the Repurchase Date in respect of all
Transactions thereunder less the market value of the Purchased Securities held
by the Relevant DB Entity thereunder; and (c) with respect to any other
Agreement, the amount, if any, payable by Counterparty to the Relevant DB
Entity as a result of the termination of such Agreement.

 

“Deutsche
Bank” means any one or more DB Entities and/or any one or
more Affiliates thereof, as required to suit the context.

 

“Excess” means, at any time and in each case expressed in
U.S. Dollars or the U.S. Dollar Equivalent, (a) with respect to the Swap
Agreement, (i) the Return Amount (as such term is defined in, and determined in
accordance with, the Swap Agreement) in respect of Counterparty, if any, at
such time and / or (ii) the Positive Exposure, if any, at such time, as the
case may be; (b) with respect to the Repurchase Agreement, the excess, if any,
of (i) the aggregate Market Value at such time of all of such Purchased
Securities (as each such term is defined in, and determined in accordance with,
the Repurchase Agreement) over (ii) the Buyer’s Margin Amount at such time for
the Transactions relating to all of the Purchased Securities; provided, that
with respect to the Eligible GNMA Securities (as such term is defined in the
Repurchase Agreement) the Buyer’s Margin Percentage for purpose of this Master
Agreement only shall be 115.6069% and (c) with respect to any other Agreement,
the amount of collateral, if any, required to be returned to Counterparty at
such time by the Relevant DB Entity pursuant to the terms of such Agreement.

 

“Excess
Termination Amount” means, at any time and in each case
expressed in U.S. Dollars or the U.S. Dollar Equivalent:  (a) with respect to the Swap Agreement, the
amount, if any, calculated as payable by the Relevant DB Entity to Counterparty
pursuant to Section 6(e) of the Swap Agreement as a result of the
occurrence or deemed occurrence of an Early Termination Date in respect of all
transactions thereunder; (b) with respect to the Repurchase Agreement, the
amount, if any, payable by the Relevant DB Entity to the Counterparty as a
result of the occurrence or deemed occurrence of the Repurchase Date in respect
of all Transactions thereunder; and (c) with respect to any other Agreement,
the amount, if any, payable by the Relevant DB Entity to Counterparty as a
result of the termination of such Agreement.

 

“Positive
Exposure” means, at any given time that it is calculated, the
amount, if any, that would be payable to the Counterparty by Deutsche Bank
pursuant to Section 6(e)(ii)(2)(A) of the Swap Agreement as if all
Transactions under the Swap Agreement were being terminated as of such time,
provided, that Market Quotation (as defined in the Swap Agreement) will be
determined by Deutsche Bank in respect of any Transaction type (including,
without limitation, equity-related option)

 

8

 

using
its good faith estimate at mid-market of the amounts that would be payable for
Replacement Transactions (as that term is defined in the definition of “Market
Quotation”) and the foregoing determination shall be subject to Paragraph 5 of
the Credit Support Annex to the Swap Agreement in the event of a dispute.

 

“Relevant
DB Entity” means, with respect to any Agreement, the DB
Entity that is party thereto.

 

“Repurchase
Agreement” means the Master Repurchase Agreement dated as of June 30,
2004 between Counterparty and Deutsche Bank AG, Cayman Island Branch.

 

“Swap
Agreement” means the ISDA Master Agreement dated as of the
date hereof between Counterparty and Deutsche Bank AG, New York Branch,
together with the schedules thereto.

 

“Secured
Obligations” means all obligations of the Counterparty under
the Agreement and hereunder.

 

“Termination
Date” shall be the date of or as specified in the notice
given pursuant to Section 2(A).

 

“Termination
Event” means (i)  a default, event of default or
termination event under any Agreement shall occur and be continuing and the
Non-Defaulting Party reasonably believes that the Defaulting Party is unable or
unwilling to cure such default; or (ii) the Defaulting Party otherwise (1) is
dissolved; (2) becomes insolvent or fails or is unable or admits in writing its
inability generally to pay its debts as they become due; (3) makes a general
assignment, arrangement or composition with or for the benefit of its
creditors; (4) institutes or has instituted against it a proceeding seeking a
judgment of insolvency or bankruptcy or any other relief under any bankruptcy
or insolvency law or other similar law affecting creditors’ rights, or a
petition is presented for the winding-up or liquidation of the party, and, in
the case of any such proceeding or petition instituted or presented against it,
such proceeding or petition (A) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making of an order for
the winding-up or liquidation of the party or (B) is not dismissed, discharged,
stayed or restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its winding-up or
liquidation; (6) seeks or becomes subject to the appointment of an
administrator, conservator, receiver, trustee, custodian or other similar
official for it or for all or substantially all of its assets (regardless of
how brief such appointment may be, or whether any obligations are promptly
assumed by another entity or whether any other event described in this clause
(6) has occurred and is continuing); (7) any event occurs with respect to the
party which, under the applicable laws of any jurisdiction, has an analogous
effect to any of the events specified in clauses (1) to (6) (inclusive); or (8)
takes any action in furtherance of, or indicating its consent to, approval of,
or acquiescence in, any of the foregoing acts.

 

“Transaction”
means a transaction between the Counterparty and a DB Entity that is governed
by an Agreement.

 

“U.S.
Dollar Equivalent” of an amount, as of any date, means: (i)
in respect of an amount denominated in U.S. Dollars, such amount; and (ii) in
respect of any amount denominated in a currency, including a composite currency
such as ECU, other than U.S. Dollars (an “Other Currency”),

 

9

 

the amount
expressed in U.S. Dollars, as determined by Deutsche Bank, that would be
required to purchase or sell, as appropriate, such amount of such Other
Currency as of such date with U.S. Dollars at the rate equal to the spot
exchange rate of a foreign exchange agent (selected in good faith by Deutsche
Bank) at or about 11:00 a.m. (in the city in which such foreign exchange agent
is located) or such later time as Deutsche Bank in its reasonable good faith
discretion shall determine.

 

14.                               Miscellaneous

 

(A)  Additional DB Entities

 

Deutsche Bank and
the Counterparty agree that any other Branch or Affiliate of Deutsche Bank
designated by Deutsche Bank to become a “DB Entity” pursuant to this Master
Agreement shall become a DB Entity hereunder upon notice by Deutsche Bank to
the Counterparty (any such notice to include the information referred to in Section 10).

 

(B)
Headings and Subheadings.

 

The headings and
subheadings of this Master Agreement are for convenience of reference only, and
shall not affect the meaning or construction of any provision hereof.

 

(C)
Governing Law and Jurisdiction.

 

THIS
MASTER AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS CONFLICTS OF LAW DOCTRINE.  DEUTSCHE BANK AND THE COUNTERPARTY AGREE THAT
ANY APPROPRIATE STATE OR FEDERAL COURT LOCATED IN THE CITY OF NEW YORK, BOROUGH
OF MANHATTAN SHALL HAVE EXCLUSIVE JURISDICTION OVER ANY CASE OR CONTROVERSY
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND SHALL BE A PROPER AND
CONVENIENT FORUM IN WHICH TO ADJUDICATE SUCH CASE OR CONTROVERSY.  ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO
ANY CLAIM OR ACTION ARISING OUT OF THIS AGREEMENT IS HEREBY WAIVED.

 

(D)  Counterparts,
Etc.

 

This
Master Agreement may be executed in any number of counterparts, each of which
when so executed and delivered shall be deemed an original instrument, all such
counterparts together shall constitute but one and the same agreement.  Neither this Master Agreement nor any terms
hereof may be changed, waived or terminated unless such change, waiver or
termination is in writing signed by Deutsche Bank and the Counterparty.  No failure or delay on the part of Deutsche
Bank or the Counterparty in exercising any right, power or privilege hereunder
or under any Agreement shall operate as a waiver thereof.  The rights, powers, and remedies herein are
cumulative and not exclusive of any rights, powers, and remedies herein or any
other Agreement or any other rights which a party may otherwise have.

 

10

 

(E)
Bankruptcy.

 

The
parties hereto agree and acknowledge that each Agreement is a “repurchase
agreement,” “swap agreement,” “securities contract,” “forward contract” or “commodity
contract”, that all obligations of the parties thereunder and hereunder are
obligations to make “margin Payments” or “settlement payments”, that all such
agreements, contracts and payments are made in consideration of each other, and
that all such payments due from a party or parties to the other “margin,” “guarantee”
and “secure” all such payments due to such party or parties from the other, in
each case within the meaning of the U.S. Bankruptcy Code.  The parties also agree that this Master
Agreement is a “netting contract” within the meaning of the Federal Deposit
Insurance Corporation Improvement Act of 1991.

 

(F)
Successors and Assigns

 

DeutscheBank
and Counterparty hereby agree that this Master Agreement shall extend to and be binding upon all of the parties hereto (whether now existing
or hereafter added) and their respective successors and permitted assigns.  This Master Agreement shall not be assigned
by Deutsche Bank (other than to a DB Entity) without the prior written consent
of Counterparty except that Deutsche Bank may without the prior written consent
of Counterparty transfer this Master Agreement pursuant to a consolidation or
amalgamation with, or merger with or into, or transfer of all or substantially
all of its assets to, another entity (but without prejudice to any other right
or remedy under this Master Agreement).

 

(G)
Termination.

 

This
Master Agreement, including the security interests granted hereby, shall
terminate upon satisfaction by Counterparty of all of its obligations to
Deutsche Bank under all Agreements.  This
Master Agreement shall terminate if any of the Agreements is assigned by
Deutsche Bank to a non-DB Entity in violation of this Master Agreement.

 

11

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the date first above
written.

 

	
   

  	
  CRIIMI
  FINANCING CO., INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Libera

  	
   

  
	
   

  	
  Title:

  	
  Acting General
  Counsel/VP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE
  BANK AG

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kathleen
  Yohe

  	
   

  
	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Carlo-Edoardo Cohen

  	
   

  
	
   

  	
  Title: Vice
  President & Counsel

  
						

 

12

 

SCHEDULE I

 

Schedule of
Agreements Between Deutsche Bank and Counterparty,

as
each such Agreement is amended, modified or supplemented from time to time

 

Deutsche Bank AG-
Cayman Islands Branch

 

Master Repurchase
Agreement dated as of June 30, 2004 (the “Repurchase Agreement), together
with Annexes, Exhibits and Schedules thereof.

 

Deutsche Bank AG-
New York Branch

 

ISDA Master
Agreement (Multicurrency-Cross Border) dated as of August 6, 2004 (the “Swap
Agreement”) including the schedule thereto and the Credit Support Annex
dated as of August 6, 2004 (“Credit Support Annex”).

 

13

 

SCHEDULE II

 

ADDRESSES FOR NOTICES

 

Counterparty:

 

CRIIMI
Financing Co., Inc. 

11200 Rockville Pike, Suite 400,

Rockville, MD 
20852

Attn:  General
Counsel

Tel:  301-255-0676

Fax:  301-255-0620

 

Deutsche
Bank

 

Deutsche
Bank AG, New York Branch

60
Wall Street

New
York, New York 10005

USA

Attention:  Swap Group

Tel:  (212) 474 8000

Fax:  (212) 474-6753

Telex:  429166

Answerback:  DEUTNYK

 

14

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