FORECLOSURE/TRANSFER AGREEMENT

 Exhibit 10.2

                         FORECLOSURE/TRANSFER AGREEMENT

     This  Foreclosure/Transfer  Agreement ("Agreement"),  dated as of April 17,
2001 is among  CRIIMI MAE INC.  ("CMI"),  MERRILL  LYNCH  INTERNATIONAL,  ACTING
THROUGH ITS AGENT,  MERRILL LYNCH, PIERCE,  FENNER & SMITH INCORPORATED,  in its
capacity  as "Buyer"  (in such  capacity  the "Repo  Purchaser")  under the Repo
Agreement  (as  hereinafter  defined),  WELLS  FARGO  BANK  MINNESOTA,  NATIONAL
ASSOCIATION in its capacity as Trustee (in such capacity,  the "Note A Indenture
Trustee") under that certain  Indenture dated as of April 17, 2001,  between CMI
and the Note A  Indenture  Trustee  for the benefit of the holders of the 11.75%
Series A Senior  Secured Notes due 2006 (the "Series A Notes"),  and WELLS FARGO
BANK  MINNESOTA,  NATIONAL  ASSOCIATION  in its  capacity  as  Trustee  (in such
capacity, the "Note B Indenture Trustee", and together with the Note A Indenture
Trustee,  the "Indenture  Trustees")  under that certain  Indenture  dated as of
April 17, 2001  between CMI and the Note B Indenture  Trustee for the benefit of
the  holders of the 20% Series B Senior  Secured  Notes due 2007 (the  "Series B
Notes", and together with the Series A Notes, the "Notes").

                                    RECITALS

     WHEREAS,  on  October  5,  1998,  CRIIMI  MAE  Inc.  ("CMI"),   CRIIMI  MAE
Management,  Inc.  ("CMM") and CRIIMI MAE  Holdings  II, L.P.  ("Holdings"  and,
together with CMI and CMM, the "Debtors")  filed voluntary  petitions for relief
under Chapter 11 of title 11 of the United States Code (the "Bankruptcy Code").

     WHEREAS,   the  Debtors  filed   Debtors'   Third  Amended  Joint  Plan  of
Reorganization  dated July 21, 2000 (the "July 21st Plan") and  Debtors'  Second
Amended  Joint  Disclosure  Statement  dated  August 24,  2000 (the  "Disclosure
Statement")  with the United  States  Bankruptcy  Court,  District of  Maryland,
Greenbelt Division (the "Bankruptcy  Court").  The Bankruptcy Court approved the
adequacy of the Disclosure Statement,  and thereafter the July 21st Plan and the
Disclosure  Statement  were  distributed,  with the  requisite  ballots,  to the
holders of all claims and  interests  impaired  and  entitled  to vote under the
Plan, in order to solicit their acceptance of the Plan.

     WHEREAS,  a  hearing  (the  "Confirmation  Hearing")  was held  before  the
Bankruptcy Court on November 15, 2000 (the "Confirmation Date").

     WHEREAS,  the July 21st Plan was amended at the Confirmation  Hearing,  and
the July 21st Plan as so amended  (the "Plan") was  confirmed by the  Bankruptcy
Court pursuant to its Order dated November 22, 2000 (the "Confirmation Order").

     WHEREAS,  the Plan, as confirmed by the Confirmation  Order,  provides that
Merrill  Lynch  Mortgage  Capital Inc.  ("MLMCI")  and German  American  Capital
Corporation  ("GACC")  are to receive,  on the  effective  date of the Plan (the
"Effective Date") (i) in immediately available funds (a) $100 million on account
of the  principal  amount of their  aggregate  claims  against  CMI, and (b) any
accrued and unpaid interest  (calculated at the contract non-default rate) owing
to MLMCI and GACC in respect of

such claims as of the date  immediately  preceding the Effective  Date (the
aggregate  of all such  principal  claims of MLMCI and GACC  against CMI and all
such accrued and unpaid interest owing in respect of such principal claims as of
the date immediately  preceding the Effective Date is hereinafter referred to as
the  "MLMCI/GACC  Claim"),  (ii) any reasonable  legal fees and expenses (not to
exceed  $500,000)  incurred by MLMCI and GACC in  connection  with the drafting,
negotiating  and finalizing of the Repo Documents (as  hereinafter  defined) and
(iii) new  obligations  under the Repo Documents in an original  amount equal to
the  amount  by which  (a) the  aggregate  outstanding  principal  amount of the
indebtedness  owed by CMI to MLMCI and GACC, as of the Effective  Date,  exceeds
(b) $100 million.

     WHEREAS,  the Plan, as confirmed by the Confirmation  Order,  provides that
the Class A9 and Class A10 (as defined in the Plan)  unsecured  creditors of CMI
("Unsecured  Creditors"),  on account of both old senior note claims and general
Class A10 unsecured claims,  are to receive on the Effective Date $75 million in
immediately  available  funds on account of all allowed  claims in the Class A10
Convenience Class (as provided in the Plan) and in reduction, pari passu, of the
allowed claims of the remaining  Unsecured  Creditors against CMI, which allowed
claims shall include  prepetition and postpetition  interest as set forth in the
Plan. The remaining  balance owing to the Unsecured  Creditors is referred to as
"New Debt".  The New Debt is represented by the Series A Notes, in the aggregate
amount of $105 million,  and the Series B Notes, in the aggregate  amount of the
balance of the New Debt. The principal amount of the New Debt represented by the
Notes may change from time to time as  provided  for in the Notes and the Note A
Indenture and the Note B Indenture.

     WHEREAS,  pursuant  to the  Repo  Agreement,  and in  consideration  of the
MLMCI/GACC  Claim (to the extent not  previously  paid by CMI to MLMCI and GACC)
CMI has sold the CBO REIT Stock Collateral (as hereinafter  defined) to the Repo
Purchaser subject to the entitlement and obligation of CMI to repurchase the CBO
REIT  Stock  Collateral  from the Repo  Purchaser  at the  Repurchase  Price (as
hereinafter defined).

     WHEREAS,  the Repo Purchaser and CMI have entered into the Repo  Agreement,
the  Security  Agreement  (as  hereinafter  defined)  and the other RP  Security
Instruments (as hereinafter defined) to secure the Repo Obligations.

     WHEREAS, the Note A Indenture Trustee and the Note B Indenture Trustee have
entered into the Note A Indenture  and the Note B Indenture,  respectively,  and
the IT Security Instruments (as hereinafter defined).

     WHEREAS,  the Repo  Purchaser,  the Note A  Indenture  Trustee,  the Note B
Indenture Trustee and CMI have agreed herein on a manner,  method and procedures
to be followed for the purpose of determining any deficiency claim that the Repo
Purchaser, the Note A Indenture Trustee or the Note B Indenture Trustee may have
against CMI on account of the Repo  Obligations and the outstanding  obligations
on account of the  Series A Notes and the Series B Notes,  respectively,  in the
event of a Disposition Default (as

hereinafter  defined) and a foreclosure on the liens and security interests
in and on the Combined Collateral or the CBO REIT Stock Collateral,  as the case
may be.

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereto hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

     The  parties  agree  that  the  following  capitalized  terms  used in this
Agreement without definition shall have the respective meanings assigned to such
terms below:

     (a)  Arm's-Length  Sale:  Any sale of the CBO-2  Collateral,  the  Combined
Collateral  or the CBO REIT Stock  Collateral,  as  applicable,  in a bona fide,
arm's-length transaction to a third party buyer not affiliated with the Debtors,
or the Repo Purchaser or an entity which is a Beneficial  Purchaser,  as defined
in the Repo Agreement, at the time of such sale.

     (b) Business  Day: Any day other than a Saturday,  a Sunday,  or a day when
the New York Stock Exchange is closed.

     (c) CBO-1/Nomura  Collateral:  Collectively,  the Nomura Bond and the QRS 1
Stock.

     (d) CBO REIT: A limited purpose,  bankruptcy remote captive REIT subsidiary
of CMI.

     (e) CBO REIT Stock Collateral:  All of the outstanding capital stock of CBO
REIT.

     (f) CBO-2  Collateral:  Collectively,  the Current CBO-2 Collateral and the
CMBS Corp. Stock.

     (g) CMBS Corp.:  CRIIMI MAE CMBS Corp., the Delaware  corporation that owns
the Incremental CBO-2 Equity.

     (h) Collateral Agent: Merrill Lynch,  Pierce,  Fenner & Smith Incorporated,
as collateral agent for the benefit of the Repo Purchaser,  the Note A Indenture
Trustee and the Note B Indenture Trustee under the Security Documents.

     (i)  Combined  Collateral:  Collectively,  the  CBO-2  Collateral  and  the
CBO-1/Nomura Collateral.

     (j) Current CBO-2 Collateral:  Collectively,  CMM 1998-C1, Bond Classes D1,
D2, E, F, G, H1, H2 and J.

     (k) Deemed Sale: Any sale of the CBO-2 Collateral,  the Combined Collateral
or the CBO REIT Stock  Collateral,  as applicable,  to the Repo  Purchaser,  any
entity which is a Beneficial  Purchaser at the time of such sale,  the Indenture
Trustees  (except to the extent either or both of the Indenture  Trustees  elect
not to  participate  in the  Deemed  Sale of the CBO-2  Collateral  pursuant  to
Article VII, Section (b)(ii)(A) of the Intercreditor  Agreement) or any of their
respective  affiliates,  as  acquirors  thereof,  by and  through a Deemed  Sale
Entity.

     (l) Deemed Sale Entity: Either (x) a securities account with the Collateral
Agent held for the benefit of the Repo Purchaser,  the Note A Indenture  Trustee
and the Note B Indenture Trustee,  or (y) at the election of the Repo Purchaser,
a  real  estate  investment  trust,  limited  liability  company,   partnership,
corporation  or other legal entity formed by the Repo  Purchaser and  reasonably
satisfactory to the Note A Indenture Trustee and the Note B Indenture Trustee in
which each of the Repo  Purchaser,  the Note A Indenture  Trustee and the Note B
Indenture  Trustee  holds a  beneficial  interest (in either case subject to the
election of either or both of the Indenture  Trustees not to  participate in the
Deemed Sale of the CBO-2 Collateral  pursuant to Article VII, Section (b)(ii)(A)
of the  Intercreditor  Agreement)  to take title to and  possession of the CBO-2
Collateral,  the  Combined  Collateral  or the CBO  REIT  Stock  Collateral,  as
applicable,  in  connection  with any Deemed Sale of any of such assets,  in any
such case in a manner  consistent with the respective  rights and obligations of
such parties relative to such assets as set forth in this Agreement.

     (m)  Disposition   Default:  The  occurrence  of  any  default  beyond  the
expiration  of any  applicable  notice and cure period under the Plan,  the Repo
Agreement,  the Security  Agreement,  the RP Security  Instruments  or otherwise
which gives rise to a right in the Repo  Purchaser  to foreclose on or otherwise
dispose of any or all of the CBO-2  Collateral,  the Combined  Collateral or the
CBO REIT Stock Collateral.

     (n) CBO-2 Equity:  Collectively,  CMM 1998-C1,  Owner Trust Certificate and
Classes A and R.

     (o)  Intercreditor  Agreement:  That certain Agreement dated as of the date
hereof among  Merrill  Lynch  International,  acting  through its agent  Merrill
Lynch, Pierce,  Fenner & Smith Incorporated,  as buyer under the Repo Agreement,
the Note A  Indenture  Trustee  and the Note B  Indenture  Trustee,  and Merrill
Lynch, Pierce, Fenner & Smith Incorporated, as Collateral Agent.

     (p)  IT  Security   Instruments:   Collectively,   the  pledges  and  other
instruments pursuant to which CMI and CBO REIT grant and reaffirm the respective
security  interests  of the Note A  Indenture  Trustee  and the Note B Indenture
Trustee  in the  Combined  Collateral  and the CBO  REIT  Stock  Collateral,  as
collateral security for the Series A Notes and the Series B Notes.

     (q) New CBO-1  Equity:  Collectively,  CMM 1996-C1,  Bond Class F and Owner
Trust Certificate Classes P, R and XS.

(r)  Note A Indenture:  That certain Indenture dated as of April 17, 2001,
by and  between  CMI and the Note A  Indenture  Trustee  for the  benefit of the
holders of the Series A Notes.

     (s) Note B Indenture: That certain Indenture dated as of April 17, 2001, by
and between CMI and the Note B Indenture  Trustee for the benefit of the holders
of the Series B Notes.

     (t)  Note  A  Indenture  Trustee:  Wells  Fargo  Bank  Minnesota,  National
Association,  or any  successor  thereto,  in its  capacity  as Trustee  for the
holders of the Series A Notes under the Note A Indenture.

     (u)  Note  B  Indenture  Trustee:  Wells  Fargo  Bank  Minnesota,  National
Association,  or any  successor  thereto,  in its  capacity  as Trustee  for the
holders of the Series B Notes under the Note B Indenture.

     (v)  Noteholders:  Collectively,  the holders of the Series A Notes and the
holders of the Series B Notes.

     (w)  Notes:  Collectively,  the  Series  A Notes  and the  Series  B Notes.

     (x) Proceeds: As defined in the Security Agreement.

     (y) QRS 1: CRIIMI MAE QRS 1, Inc., the Delaware  corporation  that owns the
CBO-1 Equity.

     (z) Qualified CMBS Institution:  Any of the five (5) institutions qualified
to value the Combined  Collateral and the CBO REIT Stock Collateral,  and listed
on Exhibit A attached to this Agreement.

     (aa) Repo Agreement:  The "master repurchase  agreement" (together with all
applicable annexes thereto) dated as of the date hereof, between CMI, as seller,
and the  Repo  Purchaser,  as  buyer.  Repo  Documents:  Collectively,  the Repo
Agreement and the RP Security Instruments.

     (bb) Repo  Obligations:  Collectively,  (i) the obligation of CMI under the
Repo  Agreement  to pay the  Repurchase  Price in the  amount and at the time or
times specified under the Repo Agreement,  (ii) all other obligations to be paid
or performed by CMI under the Repo Agreement, and (iii) all obligations required
to be paid or performed by the pledgor(s) under the RP Security Agreements.

     (cc)    Repurchase    Price:    As   defined   in   the   Repo   Agreement.

     (dd) RP Security Instruments: Collectively, the pledge agreements and other
instruments  pursuant to which CMI and CBO REIT grant and  reaffirm the security
interests  of the Repo  Purchaser  in the  Combined  Collateral,  as  collateral
security for the Repo Obligations.

     (ee) Sale  Collateral:  As defined in the first  paragraph  of Article  II.

     (ff) Security  Agreement:  That certain Security and Pledge Agreement dated
as of the date hereof,  by CMI in favor of the Collateral  Agent for the benefit
of the Repo  Purchaser,  the Note A  Indenture  Trustee  for the  benefit of the
holders of the Series A Notes and the Note B  Indenture  Trustee for the benefit
of the holders of the Series B Notes, as their respective  interests may appear.
For purposes of this Agreement,  the Security Agreement shall constitute both an
"IT Security Instrument" and an "RP Security Instrument".

     (gg) Security Documents:  Collectively, the IT Security Instruments and the
RP Security Instruments.

     (hh)  Series A Notes:  The 11.75%  Series A Senior  Secured  Notes due 2006
issued under the Note A Indenture.

     (ii) Series B Notes:  The 20% Series B Senior Secured Notes due 2007 issued
under the Note B Indenture.

     (jj) Surplus: As defined in Article III, Section (c).

     (kk) Total  Secured  Obligations:  The total of the amount of any remaining
balance owing on account of the Repurchase  Price and any other amounts owing on
account of the Repo  Obligations  (including the  reasonable  costs and expenses
incurred by the Collateral Agent in connection with any Disposition  Default and
attendant disposition of the Sale Collateral),  the then outstanding obligations
evidenced by the Series A Notes and the outstanding obligations evidenced by the
Series B Notes.

                                  ARTICLE II

                             DETERMINATION OF VALUE

     Subject to Article III  hereinafter,  in connection with any disposition of
the Combined  Collateral  or, to the extent  disposed of by  foreclosure  on the
respective  liens and security  interests  thereon (but not by means of a remedy
exercised  pursuant to Section 14(a) of Annex I of the Repo Agreement),  the CBO
REIT Stock  Collateral  (as  applicable,  the "Sale  Collateral")  incident to a
Disposition  Default,  whether such  disposition  is  effectuated by means of an
Arm's Length Sale or a Deemed  Sale,  the Repo  Purchaser,  the Note A Indenture
Trustee,  the Note B Indenture  Trustee and CMI hereby  (subject to the optional
election set forth in Article III herein) agree to the  following  procedures in
order  to  determine  the  value  of  their  respective  interests  in the  Sale
Collateral  solely for the purpose of determining (i) any deficiency  claim that
the  Repo  Purchaser,  the Note A  Indenture  Trustee  or the  Note B  Indenture
Trustee,  as the case may be,  shall then and  thereafter  have  against  CMI on
account of the  Repurchase  Price and any other  amounts owing on account of the
Repo  Obligations,  the then outstanding  obligations  evidenced by the Series A
Notes and the then  outstanding  obligations  evidenced by the Series B Notes or
(ii) any surplus amounts owing to CMI.

     (a) Arm's Length Sale. In the event that the Sale  Collateral is foreclosed
on and  disposed of by means of an Arm's  Length Sale upon the  occurrence  of a
Disposition  Default,  an amount of the  proceeds of such sale not to exceed the
Total Secured Obligations shall be allocated among the Repo Purchaser,  the Note
A Indenture  Trustee and the Note B Indenture Trustee as provided for in Article
VI, Section (b)(i) or Section (c)(i) of the  Intercreditor  Agreement,  with any
remaining proceeds to be paid to CMI as Surplus,  as provided for in Article II,
Section (c) herein.  The value of the  respective  interests of each of the Repo
Purchaser,  the Note A Indenture Trustee and the Note B Indenture Trustee in the
Sale Collateral for the purpose of determining any deficiency  claim that any of
the Repo Purchaser, the Note A Indenture Trustee or the Note B Indenture Trustee
shall then and  thereafter  have  against  CMI shall be equal to the actual cash
proceeds  received by each of the Repo Purchaser,  the Note A Indenture  Trustee
and the Note B Indenture Trustee resulting from such sale.

     (b) Deemed Sale. In the event that the Sale  Collateral is foreclosed on by
means of a Deemed Sale upon the occurrence of a Disposition  Default,  the value
of the respective interests of each of the Repo Purchaser,  the Note A Indenture
Trustee and the Note B Indenture Trustee in such Sale Collateral for the purpose
of determining the deficiency  claim that any of the Repo Purchaser,  the Note A
Indenture Trustee or the Note B Indenture Trustee shall then and thereafter have
against CMI or surplus amounts owing to CMI shall be determined as follows:

     (i) Within five (5) Business Days after the date of the  applicable  Deemed
Sale of the Sale  Collateral,  the Repo  Purchaser  shall  deliver to the Note A
Indenture  Trustee and the Note B  Indenture  Trustee a written  statement  (the
"Repo  Purchaser's  Deficiency  Statement")  setting forth the Repo  Purchaser's
proposed  valuation of the Sale Collateral,  and the valuation of the respective
interests of each of the

Repo  Purchaser,  the Note A  Indenture  Trustee  and the Note B  Indenture
Trustee therein, disposed of by such Deemed Sale, as if the Sale Collateral was,
in fact, disposed of by means of an Arm's Length Sale on the date of such Deemed
Sale with the proceeds  thereof  allocated among the Repo Purchaser,  the Note A
Indenture  Trustee  and the Note B  Indenture  Trustee  pursuant  to Article VI,
Sections  (b)(ii) and (c)(ii) of the  Intercreditor  Agreement,  as  applicable.
Within  fifteen  (15)  Business  Days  after  receipt  of the  Repo  Purchaser's
Deficiency  Statement,  the Note A  Indenture  Trustee  and the Note B Indenture
Trustee shall jointly  deliver to the Repo  Purchaser a written  statement  (the
"Indenture Trustees' Deficiency Statement") notifying the Repo Purchaser whether
the  Indenture  Trustees  accept  or  dispute  the Repo  Purchaser's  Deficiency
Statement.  If the Indenture  Trustees  fail to deliver the Indenture  Trustees'
Deficiency Statement within such fifteen (15) Business Day period, the Indenture
Trustees  shall be  deemed  to have  accepted  the Repo  Purchaser's  Deficiency
Statement.  If the  Indenture  Trustees  timely  dispute  the  Repo  Purchaser's
Deficiency Statement,  the Repo Purchaser,  the Note A Indenture Trustee and the
Note B Indenture  Trustee shall, in good faith,  proceed to negotiate a mutually
acceptable  valuation  of the  Sale  Collateral,  and  the  valuation  of  their
respective  interests  therein  (provided  that if  such  dispute  shall  not be
resolved  by the Repo  Purchaser,  the Note A  Indenture  Trustee and the Note B
Indenture  Trustee within  twenty-five  (25) Business Days after the delivery of
the Purchaser's Deficiency Statement, such dispute shall not be resolved by said
parties  and the  valuation  of the Sale  Collateral  shall be  resolved  by the
Qualified CMBS  Institution  pursuant to the provisions of this Article II), for
the purpose of determining  any deficiency  claim that any of such parties shall
then and thereafter have against CMI or surplus amounts owing to CMI.

     (ii) At such time as the Repo Purchaser,  the Note A Indenture Trustee, and
the Note B Indenture  Trustee  have agreed on the value of the Sale  Collateral,
and the  valuation of their  respective  interests  therein,  for the purpose of
determining  any  deficiency  claim  that  any of such  parties  shall  then and
thereafter  have  against CMI or any surplus  amounts  owing to CMI (the "Agreed
Upon  Collateral  Values"),  said parties shall jointly deliver to CMI a written
statement  setting  forth the Agreed  Upon  Collateral  Values and such  back-up
information as determined by said parties to be reasonably  necessary for CMI to
evaluate said parties'  determination of the Agreed Upon Collateral  Values. CMI
shall advise each of the Repo  Purchaser,  the Note A Indenture  Trustee and the
Note B Indenture Trustee,  in writing,  within fifteen (15) Business Days of its
receipt of the written statement setting forth the Agreed Upon Collateral Values
and  proffered  back-up  information  whether CMI accepts or disputes the Agreed
Upon Collateral Values. If CMI fails to deliver its written response within said
fifteen  (15)  Business  Day period,  CMI shall be deemed to have  accepted  the
Agreed Upon Collateral  Values. If CMI accepts or is deemed to have accepted the
Agreed Upon Collateral Values relative to the value of the Sale Collateral,  and
the valuation of the  respective  interests of each of the Repo  Purchaser,  the
Note A Indenture

Trustee  and  the  Note B  Indenture  Trustee  therein,  such  Agreed  Upon
Collateral  Values  shall be  dispositive  for the  purpose of  determining  any
deficiency claim that any of the Repo Purchasers,  the Note A Indenture  Trustee
or the Note B Indenture  Trustee shall then and  thereafter  have against CMI or
any  surplus  amounts  owing to CMI. If CMI shall fail to accept or be deemed to
have  accepted the Agreed Upon  Collateral  Values  relative to the value of the
Sale  Collateral,  and the valuation of the respective  interests of each of the
Repo Purchaser,  the Note A Indenture Trustee,  and the Note B Indenture Trustee
therein, or if the Repo Purchaser and the Indenture Trustees are unable to agree
upon a mutually acceptable  valuation of the Sale Collateral pursuant to Article
II,  Section  (b)(i)  above,  the Repo  Purchaser  and the  Indenture  Trustees,
jointly,  shall,  within five (5) Business Days thereafter select and advise CMI
in  writing  of their  selection  of three (3) then  designated  Qualified  CMBS
Institutions acceptable to arbitrate the dispute as to the valuation of the Sale
Collateral, and the valuation of the respective interests of the Repo Purchaser,
the Note A Indenture Trustee and the Note B Indenture Trustee therein; provided,
however, that in the event the Repo Purchaser,  the Note A Indenture Trustee and
the Note B  Indenture  Trustee are unable to reach  agreement  on such three (3)
Qualified CMBS  Institutions  within three (3) Business Days of CMI's failure to
accept or deemed failure to accept the Agreed Upon Collateral Values relative to
the value of the Sale Collateral, or in the event the Repo Purchaser, the Note A
Indenture  Trustee and the Note B Indenture Trustee are unable to agree upon the
Agreed Upon Collateral Values, the Repo Purchaser,  the Note A Indenture Trustee
and the Note B Indenture  Trustee  hereby  agree that the Repo  Purchaser  shall
designate two (2) Qualified CMBS  Institutions and the Note A Indenture  Trustee
and the Note B Indenture  Trustee,  jointly,  shall designated one (1) Qualified
CMBS  Institutions,   and  the  resulting  list  of  three  (3)  Qualified  CMBS
Institutions  shall be  submitted to CMI.  Within five (5)  Business  Days after
receipt of such  notification of the designation of the three (3) Qualified CMBS
Institutions deemed acceptable by the Repo Purchaser and the Indenture Trustees,
CMI shall advise the Repo Purchaser and the Indenture  Trustees,  in writing, of
its  selection  of  one  (1)  of  such  three  (3)  designated   Qualified  CMBS
Institutions  (the  "Valuation  Arbitrator")  that will  arbitrate  the  dispute
regarding  the  valuation  of the  Sale  Collateral,  and the  valuation  of the
respective interests of the Repo Purchaser, the Note A Indenture Trustee and the
Note B Indenture Trustee in such collateral,  for the purpose of determining the
parties respective deficiency claims against CMI or any surplus amounts owing to
CMI.

     (iii) The Valuation  Arbitrator  shall promptly  conduct such due diligence
and  investigations as such Valuation  Arbitrator may deem appropriate,  and may
consider  such  factors  as  such  Valuation  Arbitrator  may  deem  appropriate
(provided such Valuation  Arbitrator  shall consider the number and dollar value
of the  loans  underlying  the  Combined  Collateral  and  the  CBO  REIT  Stock
Collateral),  and  any  changes  over  time to such  loans,  including,  without
limitation,  the  dollar  amount  and  number of  "watch  list"  loans,  special
servicing  loans,  defaulted  loans  and loan  losses  underlying  the  Combined
Collateral and the CBO REIT Stock Collateral, and shall, within thirty (30) days
after  the date of  designation  of the  Valuation  Arbitrator  advise  the Repo
Purchaser, the Note A Indenture Trustee, the Note B Indenture Trustee and CMI of
the Valuation Arbitrator's determination of the valuation of the Sale Collateral
as a whole,  and the allocations of such valuation of the Sale Collateral  among
the respective interests of the Repo Purchaser, the Note A Indenture Trustee and
the Note B  Indenture  Trustee  therein,  for the  purpose  of  determining  the
parties'  respective  deficiency claims against CMI or any surplus owing to CMI,
which  determination  shall be binding on all the parties to this Agreement.  In
this regard,  the Valuation  Arbitrator  shall determine the market value of the
Sale  Collateral  as a whole and shall then  ascribe a value to each rated class
and all unrated classes of securities  constituting the Combined  Collateral and
the CBO REIT Stock  Collateral.  To the extent that the market value of the Sale
Collateral  exceeds the

Total  Secured  Obligations,  CMI  shall  be paid an  amount  equal  to any
Surplus, as provided for in this Article II, Section (c).

     (iv) Each of the Repo Purchaser,  the Note A Indenture Trustee,  the Note B
Indenture  Trustee  and CMI  shall  pay its  own  costs  and  fees,  if any,  in
connection  with any arbitration  hereunder,  with the costs and expenses of the
Valuation Arbitrator to be shared equally by all of said parties.

     (c)  Surplus.  In the event of either (x) any Arm's  Length Sale  occurring
upon a Disposition  Default,  as provided for in this Article II, Section (a) or
(y) any Deemed Sale  occurring  upon a Disposition  Default,  as provided for in
this Article II, Section (b), in which the proceeds  received (in the case of an
Arm's Length Sale) or the market value of the Sale  Collateral (in the case of a
Deemed Sale) results in cash or market  value,  as the case may be, in excess of
the Total Secured  Obligations  (the amount of such excess being the "Surplus"),
such Surplus shall be paid to CMI by the Repo Purchaser within five (5) Business
Days after the completion of the applicable Arm's Length Sale or Deemed Sale.

                                ARTICLE III

                         RATIFICATION AND AGREEMENT

     Upon  the   occurrence  of  a  Disposition   Default,   and  prior  to  the
implementation  of the  procedures  set  forth  in  Article  II  above  the Repo
Purchaser,  the Note A Indenture  Trustee,  or the Note B Indenture  Trustee may
give prompt written notice to the other parties of their election to utilize the
procedures set forth herein for  determining  the deficiency  claims (or surplus
amounts);  provided,  however,  that such valuation procedures shall be utilized
only if all parties hereto provide written consent to the use of such procedures
to all parties to this  Agreement  within ten (10)  Business  Days of receipt of
such  election.  To do so,  each  party  hereto  must  execute  and  deliver  an
agreement,  acknowledgement,  consent, confirmation and waiver (the "Consent and
Waiver") as may be reasonably requested jointly by the Repo Purchaser,  the Note
A Indenture Trustee and the Note B Indenture  Trustee,  and CMI and as otherwise
may be  necessary  or  required,  to both  ratify  and affirm  their  collective
agreement  to determine  such  deficiency  claims (or  surplus)  pursuant to the
terms,  conditions  and  procedures  of said Article II and to waive any and all
rights to otherwise determine such deficiency claims of the Repo Purchaser,  the
Note A  Indenture  Trustee  and the Note B  Indenture  Trustee,  or any  surplus
amounts  owing to CMI whether  under the  applicable  provisions  of the Uniform
Commercial Code or in any manner other than as set forth in said Article II. Any
party's  failure to execute and  deliver the Consent and Waiver  within ten (10)
Business Days after receipt  thereof  following the  occurrence of a Disposition
Default  shall  constitute a waiver and  termination  of the rights and benefits
provided for under this Agreement and the Repo  Purchaser,  the Note A Indenture
Trustee  the  Note B  Indenture  Trustee,  and CMI  shall be  released  from any
obligations hereunder and shall thereupon be free to pursue the determination of
their  respective  deficiency  claims  against or right to any  surplus  amounts
without  regard to this  Agreement.  This Agreement and all terms and conditions

hereof are intended to be an optional  method of  determining  and resolving any
disputes among the parties hereto regarding valuation of the Sale Collateral and
the respective interests of the Repo Purchaser, the Note A Indenture Trustee and
the Note B Indenture Trustee therein and the determination of (i) any deficiency
claims  that the Repo  Purchaser,  the Note A  Indenture  Trustee  or the Note B
Indenture  Trustee,  as the case may be, shall then and thereafter  have against
CMI on account of the Repurchase Price and any other amounts owing on account of
the Repo Obligations, the then outstanding obligations evidenced by the Series A
Notes and the then  outstanding  obligations  evidenced by the Series B Notes or
(ii) any surplus owing to CMI upon any  disposition  of the Combined  Collateral
or, to the extent  applicable,  the CBO REIT  Stock  Collateral,  incident  to a
Disposition  Default.  If any party hereto  shall fail to execute the  requisite
Consent and Waiver,  as set forth above,  this Agreement  shall be null and void
and shall not be admissible or used for any purpose in any  proceeding and shall
not  be  interpreted  as an  admission  by any  party  regarding  the  valuation
methodology  set  forth  herein  or  the  qualification  of any  Qualified  CMBS
Institution.

                                   ARTICLE IV

                                  MISCELLANEOUS

     (a) This Agreement  contains the entire  agreement  between with respect to
this subject, and may be modified only by an instrument in writing signed by all
parties hereto.

     (b) Any  parties  failure  to  exercise  any right  hereunder  shall not be
construed  as a waiver of the right to  exercise  the same or any other right at
any  other  time and from  time to time  thereafter,  and such  rights  shall be
cumulative and not exclusive.

     (c) The knowledge by any party of any breach or other non-observance by any
other party of the terms of this Agreement shall not constitute a waiver thereof
or of any obligations to be performed by any other party hereunder.

     (d) Section  headings used herein are for  convenience  only, and shall not
affect the meaning of any provision of this Agreement.

     (e) This  Agreement  shall be governed by and construed in accordance  with
the laws of the State of New York.  Wherever  possible,  each  provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under  applicable law, such provision shall be ineffective to the extent
of such  prohibition or invalidity,  without  invalidating the remainder of such
provision or the remaining provisions of this Agreement.

     (f)  All  notices,  requests  and  other  communications  pursuant  to this
Agreement  shall be in  writing,  by  letter  (delivered  by hand or  commercial
messenger  service or sent by  certified  or  registered  mail,  return  receipt
requested),  addressed to each party hereto as follows,  or to such other person
and at such other place as each such party may from time to time  designate in a
notice given in accordance with the provisions of this Subsection (i):

                  (i)      If to the Repo Purchaser

                           Merrill Lynch International (Acting through its
                           Agent, Merrill Lynch, Pierce, Fenner & Smith
                           Incorporated)
                           c/o Merrill Lynch, Pierce, Fenner & Smith
                           Incorporated
                           4 World Financial Center, 22nd Floor
                           New York, NY  10080
                           Attention:  Joshua A. Green
                           Global Asset Lending & Finance

                           with copies to:

                           Deutsche Bank AG, New York Branch
                           c/o Deutsche Banc Alex. Brown Inc.
                           31 West 52nd Street
                           New York, NY  10019
                           Attention:  Messrs. Jon A. Vaccaro and Eric M.
                           Schwartz

                           and to

                           Wachtell, Lipton, Rosen & Katz
                           51 West 52nd Street
                           New York, NY  10019
                           Attention:  Michael B. Benner, Esq.

                           and to

                           Brown & Wood, L.L.P.
                           One World Trade Center
                           New York, NY  10048
                           Attention:  Jonathan Williams, Esq.
                           William M. Goldman, Esq.

                  (ii)     If to the Note A Indenture Trustee:

                           Wells Fargo Bank Minnesota, National Association
                           Sixth and Marquette; MAC N9303-120
                           Minneapolis, MN  55479
                           Attention:  Corporate Trust Services

                           with copies to:

                           Pillsbury Winthrop LLP
                           One Battery Park Plaza
                           New York, NY  10004
                           Attention:  Jeffrey J. Delaney, Esq.

                  (iii)    If to the Note B Indenture Trustee:

                           Wells Fargo Bank Minnesota, National Association
                           Sixth and Marquette; MAC N9303-120
                           Minneapolis, MN  55479
                           Attention:  Corporate Trust Services

                           with copies to:

                           Pillsbury Winthrop LLP
                           One Battery Park Plaza
                           New York, NY  10004
                           Attention:  Jeffrey J. Delaney, Esq.

                  (i)      If to Criimi Mae Inc.:

                           11200 Rockville Pike
                           Rockville, MD  20852
                           Attention:  Cynthia Azzarra

                           with copies to:

                           Criimi Mae Inc.
                           11200 Rockville Pike
                           Rockville, MD  20852
                           Attention:  Legal Department

                           and to

                           Venable, Baetjer & Howard, LLP
                           1800 Mercantile Bank and Trust Building
                           2 Hopkins Plaza
                           Baltimore, MD  21201
                           Attention:  Gregory A. Cross, Esq.

     (g) This  Agreement  shall be  binding  upon and  inure to the  benefit  of
parties hereto and their respective successors and permitted assigns.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

         MERRILL LYNCH INTERNATIONAL
           By MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED As Agent for
           Merrill Lynch International

         By____________________________
                  Name:
                  Title:

                  Title:

         WELLS FARGO BANK MINNESOTA, NATIONAL
         ASSOCIATION, as   Trustee under the Note A Indenture
         dated as of April 17, 2001

         By_____________________________
                  Name:
                  Title:

         WELLS FARGO BANK MINNESOTA, NATIONAL
         ASSOCIATION, as Trustee under the Note B Indenture
         dated as of April 17, 2001

         By______________________________
                  Name:
                  Title:

         CRIIMI MAE INC.

         By______________________________
                  Name:
                  Title:

                                    EXHIBIT A

                          QUALIFIED CMBS INSTITUTIONS

                                            Lehman Brothers
                                            Morgan Stanley
                                            C.S. First Boston
                                            J.P. Morgan Chase
                                            Bear Stearns 

Basic Info X:

Name: FORECLOSURE/TRANSFER AGREEMENT
Type: Foreclosure/transfer Agreement
Date: June 1, 2001
Company: CRIIMI MAE INC
State: Maryland

Other info: