Exhibit 10.2
MANAGEMENT AGREEMENT
THIS AGREEMENT, dated as of October 22, 1997 by and among IMPERIAL
CREDIT COMMERCIAL MORTGAGE INVESTMENT CORP., a Maryland corporation
("ICCMIC" and together with its subsidiaries, the "Company") , and IMPERIAL
CREDIT COMMERCIAL ASSET MANAGEMENT CORPORATION, a California corporation
(the "Manager") ;
WITNESSETH:
WHEREAS, the Company intends to invest in Mortgage Loans, MBS
Interests, Real Property and Non-Real Estate Assets ("REIT Investments")
and expects to qualify for the tax benefits of a real estate investment
trust (a "REIT") accorded by Sections 856 through 860 of the Internal
Revenue Code of 1986, as amended (the 'Code") ; and
WHEREAS, the Company desires to retain the Manager to advise and
counsel the Company as to the acquisition and sale of, and to otherwise
manage the investments of, the Company and to perform administrative
services for the Company in the manner and on the terms set forth herein;
NOW THEREFORE, in consideration of the mutual agreements herein set
forth, the parties hereto agree as follows:
SECTION 1. Definitions. Capitalized terms used but not defined
herein shall have the respective meanings assigned them in the Prospectus
of ICCMIC dated October 16, 1997, 1997. In addition, the following terms
shall have the following:
(a) "Agreement" means this Management Agreement, as amended from time
to time.
(b) "Closing Date" means the date of closing of the Company's initial
public offering of Common Stock.
(c) "Governing Instruments" means the charter and bylaws in the case
of a corporation, or the partnership agreement in the case of a
partnership.
(d) "Subsidiary" means any subsidiary of the Company and any
partnership, a general partner of which is the Company or any subsidiary of
the Company.
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SECTION 2. Duties of the Manager.
(a) The Manager at all times will be subject to the supervision of
ICCMIC's Board of Directors (the "Board of Directors") and will have only
such functions and authority as the Company delegates to it. The Manager
will advise the Board of Directors as to the activities and operations of
the Company. The Manager shall be responsible for the day-to-day business
affairs of the Company pursuant to the authority granted to it by the Board
of Directors under this Agreement, and the Manager will perform (or cause
to be performed) such services and activities relating to the assets and
operations of the Company as may be directed by the Board of Directors or
as the Manager otherwise considers appropriate, including:
(i) serving as the Company's consultant with respect to
formulation of investment criteria and preparation of policy
Guidelines by the Board of Directors;
(ii) advising and representing the Company in connection with the
acquisition and commitment to acquire assets, the sale and commitment
to sell assets, and the maintenance and administration of its
portfolio of assets;
(iii) advising the Company regarding, and arranging for, (a)
the issuance of CMOs collateralized by the Company's Mortgage Loans,
(b) reverse repurchase agreements on the Company's MBS Interests, and
(c) other borrowings, as appropriate;
(iv) furnishing reports and statistical and economic research to
the Company regarding the Company's activities and the services
performed for the Company by the Manager;
(v) monitoring and providing to the Board of Directors on an
ongoing basis price information and other data obtained from dealers
that maintain markets in assets identified by the Board of Directors
from time to time, and providing data and advice to the Board of
Directors in connection with the identification of such dealers;
(vi) providing executive and administrative personnel,
administering office space and office services required in rendering
services to the Company; administering the day-to-day operations of
the Company; and performing and supervising the performance of such
other administrative functions necessary in the management of the
Company, including the collection of revenues and the payment of the
Company's debts and obligations and maintenance of appropriate
computer services to perform such administrative functions;
(vii) communicating on behalf of the Company with the holders
of any equity or debt securities of the Company as required to satisfy
the reporting and other requirements of any governmental bodies or
agencies or trading markets and to maintain effective relations with
such holders;
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(viii) to the extent not otherwise subject to an agreement
executed by the Company, designating a servicer for mortgage loans
sold to the Company and arranging for the monitoring and administering
of such servicers;
(ix) counseling the Company in connection with policy decisions to
be made by the Board of Directors;
(x) engaging in hedging activities on behalf of the Company which
are consistent with the Company's status as a REIT and with the
Guidelines;
(xi) upon request by the Board of Directors and in accordance with
the Guidelines, investing or reinvesting any money of the Company;
(xii) counseling the Company regarding the maintenance of its
exemption from the Investment Company Act and monitoring compliance
with the requirements for maintaining exemption from that Act;
(xiii) counseling the Company regarding the maintenance of its
status as a REIT and monitoring compliance with the various REIT
qualification tests and other rules set out in the Code and the income
tax regulations promulgated thereunder (the "Treasury Regulations") ;
and
(xiv) counseling the Company as to compliance with all
applicable laws, including those that would require the Company to
qualify to do business in particular jurisdictions.
(b) Portfolio Management. The Manager will perform portfolio
management services on behalf of the Company with respect to the Company's
investments. Such services will include, but not be limited to, consulting
the Company on purchase, sale and other opportunities, collection of
information and submission of reports pertaining to the Company's assets,
interest rates, and general economic conditions, periodic review and
evaluation of the performance of the Company's portfolio of assets, acting
as liaison between the Company and banking, mortgage banking, investment
banking and other parties with respect to the purchase, financing and
disposition of assets, and other customary functions related to portfolio
management. The Manager may enter into subcontracts with other parties,
including Imperial Credit and its affiliates, to provide any such services
to the Company.
(c) Monitoring of Primary Servicing. The Manager will monitor and
administer the loan servicing activities provided by servicers of the
Company's Mortgage Loans, other than loans pooled to collateralize MBS
Interests or pledged to secure MBS Interests. Such monitoring and
administrative services will include, but not be limited to, the following
activities: serving as the Company's consultant with respect to the
servicing of loans; collection of information and submission of reports
pertaining to the mortgage loans and to moneys remitted to the Manager or
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the Company by servicers; periodic review and evaluation of the performance
of each servicer to determine its compliance with the terms and conditions
of the servicing agreement and, if deemed appropriate, recommending to the
Company the termination of such servicing agreement; acting as a liaison
between servicers and the Company and working with servicers to the extent
necessary to improve their servicing performance; review of and
recommendations as to fire losses, easement problems and condemnation,
delinquency and foreclosure procedures with regard to the Mortgage Loans;
review of servicers' delinquency, foreclosing and other reports on Mortgage
Loans; advising as to and supervising claims filed under any mortgage
insurance policies; and enforcing the obligation of any servicer to
repurchase Mortgage Loans from the Company.
(d) Monitoring of Special Servicing. The Manager will perform
monitoring services on behalf of the Company with respect to loan servicing
activities provided by third parties and with respect to the Company's
rights to service the Company's portfolio of Special Servicing rights.
Such monitoring services will include, but not be limited to: negotiating
Special Servicing agreements; acting as liaison between the servicers of
the Mortgage Loans and the Company; review of servicer's delinquency,
foreclosures and other reports on Mortgage Loans; supervising claims filed
under any mortgage insurance policies; and enforcing the obligation of any
servicer to repurchase Mortgage Loans.
(e) Efforts. The Manager agrees to use commercially reasonable
efforts at all times in performing services for the Company hereunder.
SECTION 3. Additional Activities of Manager. Nothing herein shall
limit or restrict the right of the Manager or any of its officers,
directors, employees or Affiliates to engage in any business or to render
services of any kind to any other person including the purchase of, or
rendering advice to others purchasing, assets that meet the Company's
policies and criteria, except that the Manager may not manage or advise
another REIT or other entity that invests or intends to invest primarily in
commercial and multifamily Mortgage Loans or subordinated CMBS Interests.
Directors, officers, employees and agents of the Manager or Affiliates
of the Manager may serve as directors, officers, employees, agents,
nominees or signatories for the Company or any of its Subsidiaries, to the
extent permitted by their Governing Instruments, as from time to time
amended, or by any resolutions duly adopted by the Board of Directors
pursuant to the Company's or any of its Subsidiaries' Governing
Instruments. When executing documents or otherwise acting in such
capacities for the Company, such persons shall use their respective titles
in the Company.
SECTION 4. Commitments. In order to meet the investment requirements
of the Company, as determined by the Board of Directors from time to time,
the Manager agrees at the direction of the Board of Directors to issue on
behalf of the Company commitments on such terms as are established by the
Board of Directors, for the acquisition by the Company of assets.
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SECTION 5. Bank Accounts. At the direction of the Board of
Directors, the Manager may establish and maintain one or more bank accounts
in the name of ICCMIC or any of its subsidiaries, and may collect and
deposit funds into any such account or accounts, and disburse funds from
any such account or accounts, under such terms and Conditions as the Board
of Directors may approve; and the Manager shall from time to time render
appropriate accountings of such collections and payments to the Board of
Directors and, upon request, to the auditors of ICCMIC or any of its
subsidiaries.
SECTION 6. Records; Confidentiality. The Manager shall maintain
appropriate books of accounts and records relating to services performed
hereunder, and such books of account and records shall be accessible for
inspection by representatives of the Company or any of its Subsidiaries at
any time during normal business hours. The Manager shall keep confidential
any and all information obtained in connection with the services rendered
hereunder and shall not disclose any such information to nonaffiliated
third parties except with the prior written consent of the Board of
Directors or as may be required by law or order of a court or other
tribunal having requisite jurisdiction.
SECTION 7. Obligations of Manager.
(a) The Manager shall require each seller or transferor of assets to
be acquired by the Company to make such representations and warranties
regarding such assets as may be directed by the Board of Directors, or, if
no such directions are given, as may, in the judgment of the Manager, be
necessary and appropriate. In addition, the Manager shall take such other
action as may be directed by the Board of Directors, or, if no such
directions are given, as it deems necessary or appropriate with regard to
the protection of the Company's assets.
(b) The Manager shall refrain from any action that, in its sole
judgment made in good faith, would adversely affect the status of ICCMIC as
a REIT, or as exempt from regulation under the Investment Company Act or
that, in its sole judgment made in good faith, would violate any law, rule
or regulation of any governmental body or agency having jurisdiction over
the Company or any of its Subsidiaries or that would otherwise not be
permitted by their respective Governing Instruments. If the Manager is
ordered to take any such action by the Board of Directors, the Manager
shall promptly notify the Board of Directors of the Manager's judgment that
such action would adversely affect such status or violate any such law,
rule or regulation or the Governing Instruments. Notwithstanding the
foregoing, the Manager, its directors, officers, stockholders and employees
shall not be liable to the Company or any of its Subsidiaries, the
Independent Directors, or ICCMIC's or any of its subsidiaries' stockholders
or partners for any act or omission by the Manager, its directors,
officers, stockholders or employees except as provided in Section 11 of
this Agreement.
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(c) Absent written direction from the Board of Directors, the Manger
shall use reasonable efforts to comply with the Guidelines, as they may be
revised from time to time.
SECTION 8. Compensation.
(a) Commencing with the first fiscal quarter after the Closing Date,
the Company shall pay to the Manager, for services rendered under this
Agreement, a base management fee, calculated as a percentage of the Average
Invested Assets of the Company for such quarter (pro rated based on the
number of days elapsed during any partial fiscal quarter) , and equal to 1 %
per annum of the first $1 billion of such Average Invested Assets, 0.75% of
the next $250 million of such Average Invested Assets, and 0.50% Average
Invested Assets above $1.25 billion.
(b) The Company shall pay to the Manager incentive compensation for
each fiscal quarter in an amount equal the product of (A) 25 % of the
dollar amount by which (1) (a) Funds from Operations of the Company (before
the incentive fee) per share of Common Stock (based on the weighted average
number of shares outstanding) plus (b) gains (or minus losses) from debt
restructuring and sales of property per share of Common Stock (based on the
weighted average number of shares outstanding) , exceed (2) an amount equal
to (a) the weighted average of the price per share at the initial offering
and the prices per share at any secondary offerings by the Company
multiplied by (b) the Ten-year U.S. Treasury Rate plus four percent per
annum multiplied by (B) the weighted average number of shares of Common
Stock outstanding during such quarter. "Funds from Operations' as defined
by the National Association of Real Estate Investment Trusts ("NAREIT")
means net income (computed in accordance with GAAP) excluding gains (or
losses) from debt restructuring and sales of property, plus depreciation
and amortization on real estate assets, and after adjustments for
unconsolidated partnerships and joint ventures. Funds from Operations does
not represent cash generated from operating activities in accordance with
GAAP and should not be considered as an alternative to net income as an
indication of the Company's performance or to cash flows as a measure of
liquidity or ability to make distributions. As used in calculating the
Manager's compensation, the term "Ten Year U.S. Treasury Rate" means the
arithmetic average of the weekly average yield to maturity for actively
traded current coupon U.S. Treasury fixed interest rate securities
(adjusted to constant maturities of ten years) published by the Federal
Reserve Board during a quarter, or, if such rate is not published by the
Federal Reserve Board, any Federal Reserve Bank or agency or department of
the federal government selected by the Company. If the Company determines
in good faith that the Ten Year U.S. Treasury Rate cannot be calculated as
provided above, then the rate shall be the arithmetic average of the per
annum average yields to maturities, based upon closing asked prices on each
business day during a quarter, for each actively traded marketable U.S.
Treasury fixed interest rate security with a final maturity date not less
than eight nor more than twelve years from the date of the closing asked
prices as chosen and quoted for each business day in each such quarter in
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New York City by at least three recognized dealers in U.S. government
securities selected by the Company.
(c) The Manager shall compute the compensation payable under Sections
8(a) and 8(b) of this Agreement within 45 days after the end of each fiscal
quarter. A copy of the computations made by the Manager to calculate its
compensation shall thereafter promptly be delivered to the Board of
Directors and, upon such delivery, payment of the compensation earned under
Sections 8(a) and 8(b) of this Agreement shown therein shall be due and
payable within 60 days after the end of such fiscal quarter.
(d) The Manager may charge the Company for any out of pocket expenses
that the Manager incurs in connection with employing third parties to
conduct due diligence on assets considered for purchase by the Company.
(e) The Company is granting to the Manager and directors and
executive officers of the Manager and certain other persons options (the
"Options") to purchase shares of common stock of the Company at a price per
share equal to the initial offering price therefor pursuant to the terms of
the Company's 1997 Stock Option Plan. The number of shares of common stock
to be subject to the Options will be 10% of the number of shares to be
issued pursuant to the initial offering, assuming that the underwriters
fully exercise their over-allotment option. One-third of the Options so
granted to the Manager and its directors and executive officers will be
exercisable by them on each of the first three anniversaries of the Closing
Date of the initial public offering of the Company's Common Stock, and
unexercised Options shall expire on the tenth anniversary of that Closing
Date.
SECTION 9. Expenses of the Company. The Company or any Subsidiary
shall pay all of its expenses and shall reimburse the Manager for
documented expenses of the Manager incurred on its behalf.
SECTION 10. Calculations of Expenses. Expenses incurred by the
Manager on behalf of the Company shall be reimbursed quarterly to the
Manager within 60 days after the end of each quarter. The Manager shall
prepare a statement documenting the expenses of the Company and those
incurred by the Manager on behalf of the Company during each quarter, and
shall deliver such statement to the Company within 45 days after the end of
each quarter.
SECTION 11. Limits of Manager Responsibility. The Manager assumes
no responsibility under this Agreement other than to render the services
called for hereunder in good faith and shall not be responsible for any
action of the Board of Directors in following or declining to follow any
advice or recommendations of the Manager, including as set forth in Section
7(b) of this Agreement. The Manager, its directors, officers, stockholders
and employees will not be liable to the Company, any Subsidiary, the
Independent Directors, the Company's stockholders or any of the Company's
Subsidiaries' stockholders or partners for any acts or omissions by the
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Manager, its directors, officers, stockholders or employees under or in
connection with this Agreement, except by reason of acts constituting bad
faith, willful misconduct, gross negligence or reckless disregard of their
duties. The Company and its Subsidiaries shall reimburse, indemnify,
defend and hold harmless the Manager, its stockholders, directors, officers
and employees of and from any and all expenses, losses, damages,
liabilities, demands, charges and claims of any nature whatsoever,
(including attorneys' fees) in respect of or arising from any acts or
omissions of the Manager, its stockholders, directors, officers and
employees made in good faith in the performance of the Manager's duties
under this Agreement and not constituting bad faith, willful misconduct,
gross negligence or reckless disregard of its duties.
SECTION 12. No Joint Venture. The Company and the Manager are not
partners or joint venturers with each other and nothing herein shall be
construed to make them such partners or joint venturers or impose any
liability as such on either of them.
SECTION 13. Term. This Agreement shall continue in force and effect
until October 22, 1999, subject to being terminated for cause as provided
in Section 14 herein. After October 22, 1999, the term of this Agreement
may be extended with the consent of the Manager and with the affirmative
vote of a majority of the Independent Directors. Each extension shall be
executed in writing by all parties hereto before the expiration of this
Agreement or, if applicable, the most recent extension thereof. Each such
extension shall be effective for a period of one year. At any time after
October 22, 1999, this Agreement may be terminated without cause by a
majority vote of the Independent Directors, which termination shall first
become effective as of the 60th day after the receipt by the Manager of a
written notice of such termination from the Company. A failure to extend
the term of this Agreement at the expiration of its term (or, if the term
of this Agreement shall have been extended pursuant to this Section 13, at
the expiration of the most recent extension) shall be deemed for all
purposes of this Agreement to be a termination of this Agreement pursuant
to this Section 13. If this Agreement is terminated pursuant to this
Section 13, the unvested Options granted to the Manager and directors and
executive officers of the Manager pursuant to Section 8(e) shall continue
to vest in the manner described in Section 8(e) and in the Company's 1997
Stock Option Plan.
SECTION 14. Termination for Cause. This Agreement, or any extension
hereof, may be terminated by either party for cause immediately upon
written notice, (i) by a majority vote of the Independent Directors in the
case of termination by the Company, or (ii) by a majority vote of the
directors of the Manager, in the case of termination by the Manager.
Grounds for termination for cause will occur with respect to a party if:
(i) Such party shall have violated any provision of this
Agreement and, after notice of such violation, shall not have cured
such default within 30 days; or
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(ii) There is entered an order for relief or similar decree or
order with respect to the other party by a court having jurisdiction
in an involuntary case under the federal bankruptcy laws as now or
hereafter constituted or under any applicable federal or state
bankruptcy, insolvency or other similar laws; or the other party (A)
admits in writing its inability to pay its debts as they become due
and payable, or makes a general assignment for the benefit of, or
enters into any composition or arrangement with, creditors; (B)
applies for, or consents (by admission of material allegations of a
petition or otherwise) to the appointment of a receiver, trustee,
assignee, custodian, liquidator or sequestrator (or other similar
official) of the other party or of any substantial part of its
properties or assets, or authorizes such an application or consent, or
proceedings seeking such appointment are commenced without such
authorization, consent or application against the other party and
continue undismissed for 30 days; (C) authorizes or files a voluntary
petition in bankruptcy, or applies for or consents (by admission of
material allegations of a petition or otherwise) to the application of
any bankruptcy, reorganization, arrangement, readjustment of debt,
insolvency, dissolution, liquidation or other similar law of any
jurisdiction, or authorizes such application or consent, or
proceedings to such end are instituted against the other party without
such authorization, application or consent and are approved as
properly instituted and remain undismissed for 30 days or results in
adjudication of bankruptcy or insolvency; or (D) permits or suffers
all or any substantial part of its properties or assets to be
sequestered or attached by court order and the order remains
undismissed for 30 days.
Each party agrees that if any of the events specified in this Section
14 shall occur, it will give prompt written notice thereof to the other
party's Board of Directors after the happening of such event.
If this Agreement is terminated pursuant to this Section 14, such
termination shall be without any further ability or obligation of either
party to the other, except as provided in Section 16 of this Agreement.
Upon the proper termination of this Agreement pursuant to this Section 14,
the Options granted to the Manager and directors and executive officers of
the Manager pursuant to Section 8(e) that are unvested as of the date of
termination shall expire.
SECTION 15. Buyout of Agreement. If, at any time after October 22,
1999, this Agreement is not renewed by the Company, or if this Agreement is
terminated by the Company at any time pursuant to Section 13 of this
Agreement, then the Company, in addition to its obligations under Section
16, shall pay the Manager a termination fee determined by an independent
appraisal. Such appraisal shall be conducted by a nationally-recognized
appraisal firm mutually agreed upon by the parties and the costs of such
appraisal shall be borne equally by the parties. If the parties are unable
to agree upon such appraisal firm within 30 days following notice of
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termination or, in the event of non-renewal, the termination date, then
each party shall as soon as reasonably practicable, but in no event more
than 45 days following notice of termination or, in the event of
non renewal, the termination date, choose an independent appraisal firm to
conduct an appraisal. In such event, (i) if the appraisals prepared by the
two appraisers so selected are the same or differ by an amount that does
not exceed 20% of the higher of the two appraisals, the termination fee
shall be deemed to be the average of the appraisals as prepared by each
party's chosen appraiser, and (ii) if these two appraisals differ by more
than 20% of such higher amount, the two appraisers together shall, as soon
thereafter as is reasonably practicable but in no event more than 45 days
after the date of the later of such two appraisals, select a third
appraisal firm to conduct an appraisal. If they are unable to agree as to
the identity of such third appraiser within such 45 day period, either
party can request that the American Arbitration Association ("AAA") select
the third appraiser, and in that event the appraiser selected by the AAA
shall be the third appraiser. The termination fee shall be the amount
determined by such third appraiser, but in no event less than the lower of
the two initial appraisals or more than the higher of such two initial
appraisals. Each party shall pay the costs of the appraiser chosen by it,
and each party shall pay one half of the costs of the third appraiser. Any
appraisal conducted hereunder shall be performed no later than 45 days
following selection of the appraiser or appraisers. The Company's
obligation to pay the termination fee pursuant to this Section 15 shall
survive the expiration or earlier termination of this Agreement.
SECTION 16. Assignment, Subcontract.
(a) This Agreement shall terminate automatically in the event of
its assignment, in whole or in part, by the Manager, unless such
assignment is to a corporation, association, trust or other
organization which shall acquire the property and carry on the
business of the Manager, if at the time of such assignment a majority
of the voting stock of such assignee organization shall be owned,
directly or indirectly, by Imperial Credit or unless such assignment
is consented to in writing by the Company with the consent of a
majority of the Independent Directors. Such an assignment shall bind
the assignee hereunder in the same manner as the Manager is bound
hereunder and, to further evidence its obligations hereunder, the
assignee shall execute and deliver to the Company a counterpart of
this Agreement. This Agreement shall not be assignable by the Company
without the consent of the Manager, except in the case of assignment
by the Company to a REIT or other organization which is a successor
(by merger, consolidation or purchase of assets) to the Company, in
which case such successor organization shall be bound hereunder and by
the terms of said assignment in the same manner as the Company is
bound hereunder.
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(b) Notwithstanding the foregoing, the Company and the Manager
agree that the Manager may enter into a subcontract with any third
party, which third party shall be approved by the Company's Board of
Directors, pursuant to which such third party will provide such of the
management services required hereunder as the Manager deems necessary,
and the Company hereby consents to the entering into and performance
of such subcontract; provided, however, that no such arrangement
between the Manager and any third party shall relieve the Manager of
any of its duties or obligations hereunder.
SECTION 17. Action Upon Termination. From and after the effective date of
termination of this Agreement pursuant to Sections 13 or 14 hereof, the Manager
shall not be entitled to compensation for further services hereunder, but
shall be paid all compensation accruing to the date of termination and,
if such termination is not pursuant to Section 14, the termination fee
determined pursuant to Section 15 and, if applicable, the unvested Options
granted to the Manager and directors and executive officers of the
Manager pursuant to Section 8(e) shall vest in the manner described in
Section 8(e) and in the Company's 1997 Stock Option Plan. The Manager shall
forthwith upon such termination deliver to the Board of Directors all funds
and property, documents, corporate records, reports and software of the
Company or any Subsidiary of the Company then in the custody of Manager.
SECTION 18. Release of Money or Other Property Upon Written Request.
The Manager agrees that any money or other property of the Company and its
Subsidiaries held by the Manager under this Agreement shall be held by the
Manager as custodian for the Company and its Subsidiaries, and the
Manager's records shall be appropriately marked clearly to reflect the
ownership of such money or other property by the Company and its
Subsidiaries. Upon the receipt by the Manager of a written request signed
by a duly authorized officer of the Company requesting the Manager to
release to the Company or any such Subsidiary, respectively, any money or
other property then held by the Manager for the account of the Company or
any such Subsidiary under this Agreement, the Manager shall release such
money or other property to the Company or any of its Subsidiaries within a
reasonable period of time, but in no event later than 60 days following
such request. The Manager shall not be liable to the Company, the
Independent Directors, or the Company's or any of its Subsidiaries'
stockholders or partners for any acts performed or omissions to act by the
Company or any of its Subsidiaries in connection with the money or other
property released to the Company or any of its Subsidiaries in accordance
with this Section. The Company and its Subsidiaries jointly and severally
shall indemnify, defend and hold harmless the Manager, its directors,
officers, stockholders and employees against any and all expenses, losses,
damages, liabilities, demands, charges and claims of any nature whatsoever,
which arise in connection with the Manager's release of such money or other
property to the Company or any of its Subsidiaries in accordance with the
terms of this Section 17 of this Agreement. Indemnification pursuant to
this provision shall be in addition to any right of the Manager to
indemnification under Section 11 of this Agreement.
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SECTION 19. Representations and Warranties.
(a) The Company hereby represents and warrants to the Manager as follows:
(i) Each of ICCMIC and ICMSC is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its respective
incorporation, each of them has the corporate power to own its assets and
to transact the business in which it is now engaged and is duly qualified
as a foreign corporation and in good standing under the laws of each
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, except for failures to be so
qualified, authorized or licensed that could not in the aggregate have a
material adverse effect on the business operations, assets or financial
condition of the Company and its Subsidiaries. taken as a whole. The
Company does not do business under any fictitious business name.
(ii) Each of ICCMIC and ICMSC has the corporate power and
authority to execute, deliver and perform this Agreement and all
obligations required hereunder and has taken all necessary corporate action
to authorize this Agreement on the terms and conditions hereof and the
execution, delivery and performance of this Agreement and all obligations
required hereunder. No consent of any other person including, without
limitation, stockholders and creditors of the Company, and no license,
permit, approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is
required by the Company in connection with this Agreement or the execution,
delivery, performance, validity or enforceability of this Agreement and all
obligations required hereunder. This Agreement has been, and each
instrument or document required hereunder will be, executed and delivered
by a duly authorized officer of each of ICCMIC and ICMSC, and this Agreement
constitutes, and each instrument or document required hereunder when
executed and delivered hereunder will constitute, the legally valid and
binding obligation of the Company enforceable against the Company in
accordance with its terms.
(iii) The execution, delivery and performance of this Agreement
and the documents or instruments required hereunder will not violate any
provision of any existing law or regulation binding on ICCMIC or any of its
subsidiaries, or any order, judgment, award or decree of any court,
arbitrator or governmental authority binding on ICCMIC or any of its
subsidiaries, or the Governing Instruments of, or any securities issued by
ICCMIC or any of its subsidiaries, or of any mortgage, indenture, lease,
contract or other agreement, instrument or undertaking to which ICCMIC or
any of its subsidiaries is a party or by which ICCMIC or any of its
subsidiaries, or any of their respective assets, may be bound, the
violation of which would have a material adverse effect on the business
operations, assets or financial condition of ICCMIC and its subsidiaries,
taken as a whole, and will not result in, or require, the creation or
imposition of any lien on any of its property, assets or revenues pursuant
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to the provisions of any such mortgage, indenture, lease, contract or other
agreement, instrument or undertaking.
(b) The Manager hereby represents and warrants to the Company as
follows:
(i) the Manager is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power to own its assets and to transact the business in which it
is now engaged and is duly qualified to do business and is in good standing
under the laws of each jurisdiction where its ownership or lease of
property or the conduct of its business requires such qualification, except
for failures to be so qualified, authorized or licensed that could not in
the aggregate have a material adverse effect on the business operations,
assets or financial condition of the Manager and its subsidiaries, taken as
a whole. The Manager does not do business under any fictitious business
name.
(ii) The Manager has the corporate power and authority to
execute, deliver and perform this Agreement and all obligations required
hereunder and has taken all necessary corporate action to authorize,
execute and deliver this Agreement and perform all obligations required
hereunder. No consent of any other person including, without limitation,
stockholders and creditors of the Manager, and no license, permit, approval
or authorization of, exemption by, notice or report to, or registration,
filing or declaration with, any governmental authority is required by the
Manager in connection with this Agreement or the execution and delivery of
this Agreement and the performance of all of the obligations required
hereunder. This Agreement has been, and each instrument or document
required hereunder will be, executed and delivered by a duly authorized
agent of the Manager, and this Agreement constitutes, and each instrument
or document required hereunder when executed and delivered hereunder will
constitute, the legally valid and binding obligation of the Manager
enforceable against the Manager in accordance with its terms.
(iii) The execution, delivery and performance of this Agreement
and the documents or instruments required hereunder will not violate any
provision of any existing law or regulation binding on the Manager, or any
order, judgment, award or decree of any court, arbitrator or governmental
authority binding on the Manager, or the Governing Instruments of, or any
securities issued by, the Manager or of any mortgage, indenture, lease,
contract or other agreement, instrument or undertaking to which the Manager
is a party or by which the Manager or any of its assets may be bound, the
violation of which would have a material adverse effect on the business
operations, assets or financial condition of the Manager and its
subsidiaries, taken as a whole, and will not result in, or require, the
creation or imposition of any lien on any of its property, assets or
revenues pursuant to the provisions of any such mortgage, indenture, lease,
contract or other agreement, instrument or undertaking.
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SECTION 20. Notices. Unless expressly provided otherwise herein, all
notices, requests, demands and other communications required or permitted
under this Agreement shall be in writing and shall be deemed to have been
duly given, made and received when delivered against receipt or upon actual
receipt of registered or certified mail, postage prepaid, return receipt
requested, addressed as set forth below:
(a) If to the Company:
Imperial Credit Commercial Mortgage Investment Corp.
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, President
with a copy given in the manner prescribed above to:
Xxx X. Xxxxxxx, Esq.
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
(b) If to the Manager:
Imperial Credit Commercial Asset Management Corp.
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, President
with a copy given in the manner prescribed above to:
X. X. Xxxxxxx, Esq.
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Either party may alter the address to which communications or copies
are to be sent by giving notice of such change of address in conformity
with the provisions of this Section 20 for the giving of notice.
SECTION 21. Entire Agreement. This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous
agreements, understandings, inducements and conditions, express or implied,
oral or written, of any nature whatsoever with respect to the subject
matter hereof. The express terms hereof control and supersede any course
of performance and/or usage of the trade inconsistent with any of the terms
hereof. This Agreement may not be modified or amended other than by an
agreement in writing.
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SECTION 22. Binding Nature of Agreement, Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, personal representatives,
successors and assigns as provided herein.
SECTION 23. Third Party Beneficiaries. This Agreement shall be
binding upon and inure solely to the benefit of the parties hereto, and
nothing this Agreement, express or implied, is intended to confer upon any
other rights or remedies of any nature whatsoever under or by reason of
this Agreement.
SECTION 24. Schedules and Exhibits. All Schedules and Exhibits
referred to herein or attached hereto are hereby incorporated by reference
into, and made a part of, this Agreement.
SECTION 25. Indulgences, Not Waivers. Neither the failure nor any
delay on the part of a party to exercise any right, remedy, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, remedy, power or privilege
preclude any other or further exercise of the same or of any other right,
remedy, power or privilege, nor shall any waiver of any right, remedy,
power or privilege with respect to any occurrence be construed as a waiver
of such right, remedy, power or privilege with respect to any other
occurrence. No waiver shall be effective unless it is in writing and is
signed by the party asserted to have granted such waiver.
SECTION 26. Costs and Expenses. Each party hereto shall bear its own
costs and expenses (including the fees and disbursements of counsel and
accountants) incurred in connection with the negotiations and preparation
of and the closing under this Agreement, and all matters incidental
thereto.
SECTION 27. Not to Affect Interpretation. The titles of paragraphs
and subparagraphs contained in this Agreement are for convenience only, and
they neither form a part of this Agreement nor are they to be used in the
construction or interpretation hereof.
SECTION 28. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be
an original as against any party whose signature appears thereon, and all
of which shall together constitute one and the same instrument. This
Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of the
parties reflected hereon as the signatories.
SECTION 29. Provisions Separable. The provisions of this Agreement
are independent of and separable from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact that
for any reason any other or others of them may be invalid or unenforceable
in whole or in part.
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SECTION 30. Gender. Words used herein regardless of the number and
gender specifically used, shall be deemed and construed to include any
other number, singular or plural, and any other gender, masculine, feminine
or neuter, as the context requires.
SECTION 31. Computation of Interest. Interest will be computed on
the basis of a 360-day year consisting of twelve months of thirty days
each.
SECTION 32. Professional Fees. If any party becomes involved in
litigation (including bankruptcy proceedings) or arbitration against any
other party arising out of or relating to this Agreement, the court in the
litigation (including bankruptcy proceedings) or arbitrator in the
arbitration shall award legal expenses (including, but not limited to
attorneys' fees, court costs and other legal expenses) to the prevailing
party. The award for legal expenses shall not be computed in accordance
with any court schedule, but shall be as necessary to fully reimburse all
attorneys' fees and other legal expenses actually incurred in good faith,
regardless of the size of the judgment, it being the intention of the
parties to fully compensate for all the attorneys' fees and other legal
expenses paid in good faith. For the purpose of this Agreement, the terms
"attorneys' fees" or "attorneys' fees and costs" shall mean the reasonable
fees and expenses of counsel to the parties hereto (including, without
limitation, the cost of in-house counsel employed by such party, such cost
to be determined by imputing a cost for those services commensurate with
such counsel's skills and experience) , which may include printing,
duplicating and other expenses, air freight charges, and fees billed for
law clerks, paralegals, librarians and others not admitted to the bar but
performing services under the supervision of an attorney. The terms
"attorneys' fees" or "attorneys' fees and costs" shall also include,
without limitation, all reasonable fees and expenses incurred with respect
to appeals, arbitrations and bankruptcy proceedings, and whether or not any
action or proceeding is brought with respect to the matter for which said
fees and expenses were incurred.
SECTION 33. Controlling Law. This Agreement and all questions
relating to its validity, interpretation, performance and enforcement shall
be governed by and construed, interpreted and enforced in accordance with
the laws of the State of California, notwithstanding any California or
other conflict-of-law provisions to the contrary.
16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
IMPERIAL CREDIT COMMERCIAL MORTGAGE INVESTMENT CORP.
By: /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
President
IMPERIAL CREDIT MORTGAGE SECURITIZATION CORP.
By: /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
President
IMPERIAL CREDIT COMMERCIAL ASSET MANAGEMENT CORPORATION
By: /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
President
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