EXHIBIT 10.5
CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT (THIS "AGREEMENT") entered into and made
effective as of July ___, 1997, the closing date (THE "CLOSING DATE") of the
rights offering of Common Stock, &.01 par value per share, (THE "OFFERING") on a
Form S-11 Registration Statement (THE "REGISTRATION STATEMENT") of IMPERIAL
CREDIT COMMERCIAL HOLDINGS, INC., a Maryland corporation (THE "COMPANY"), is by
and between the Company and IMPERIAL CREDIT MORTGAGE HOLDINGS, INC., a Maryland
corporation ("IMH").
BACKGROUND
A. In January 1997, Imperial Commercial Capital Corporation was
incorporated under the laws of the state of California ("ICCC").
B. In February 1997, IMH purchased all of the non-voting Preferred Stock
(THE "PREFERRED STOCK") of ICCC, which represents 95% of the economic interest
in ICCC, for $500,000.
C. ICCC, through three divisions, operates as the conduit operations of
the Company by originating, purchasing, and selling or securitizing Commercial
Mortgages, as defined in the Registration Statement.
D. In furtherance of the foregoing, on the Closing Date, IMH will
contribute to the Company, and the Company will accept, 100% of the Preferred
Stock presently owned by IMH in exchange for that number of shares of the
Company's Class A Common Stock (THE "CLASS A STOCK") equal to the product of 95%
of the estimated fair value of ICCC on the Closing Date divided by the
Subscription Price (as defined in the Registration Statement) of the Company's
Common Stock issued in the Offering.
E. This Agreement is intended to accomplish and memorialize the above
contribution, to provide certain agreements applicable to the relationship
between the Company and IMH, and thereby effectuate the intent of the parties
hereto.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of the mutual
covenants and conditions hereof, the parties agree as follows:
1. Contribution. Subject to and upon the terms and conditions hereof, on
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the date hereof, (a) IMH shall contribute (THE "CONTRIBUTION") to the Company,
and the Company agrees to accept from IMH, free and clear of all liens, claims
and encumbrances thereon, all of the Preferred Stock of ICCC presently owned by
IMH and (b) in consideration therefor, the Company hereby covenants that on the
date hereof, the Company shall issue or cause to be issued to IMH, _________
validly issued, fully paid and nonassessable shares of its Class A Stock, which
number is equal to the
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product of 95% of the estimated fair value of ICCC on the date hereof divided by
the Subscription Price of the Company's Common Stock issued in the Offering.
2. Transfer of Stock.
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(a) On the Closing Date, IMH conveys, assigns, transfers and delivers
to the Company and the Company hereby acquires from IMH all of its rights, title
and interest in and to the Preferred Stock.
(b) The Contribution in Subsection (a) above, shall only be effective
upon the issuance by the Company to IMH of _______ shares of its Class A Stock,
as determined in Section 1 on the Closing Date.
(c) Following the Contribution, IMH shall take all necessary steps to
register the transfer of the Preferred Stock in the shareholder ledger of ICCC.
Any stock transfer or other taxes payable in connection with the Contribution
pursuant to this Agreement shall be paid by IMH. IMH shall also provide the
Company with such further documents as the Company may reasonably request to
effectuate the Contribution. From time to time, at the request of the Company
whether at or after the Closing Date, IMH shall execute and deliver such
instruments of conveyance of the Preferred Stock as the Company may need in
order to more effectively convey the Preferred Stock to the Company.
3. Indemnification.
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(a) The Company shall indemnify and hold harmless IMH against and in
respect of any and all damages, claims, losses, liabilities and expenses
incurred by IMH which arise out of or relate to (i) any breach or violation of
this Agreement by the Company, (ii) any breach of any of the representations or
warranties made in this Agreement by the Company, and (iii) the ownership of the
Preferred Stock on or after the Closing Date.
(b) IMH shall indemnify and hold harmless the Company against and in
respect of any and all damages, claims, losses, liabilities and expenses
incurred by the Company which arise out of or relate to (i) any breach or
violation of this Agreement by IMH, (ii) any breach of any of the
representations or warranties made in this Agreement by IMH, and (iii) the
ownership of the Class A Stock on or after the Closing Date.
4. Representations and Warranties.
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a. IMH hereby represents and warrants to the Company as
follows:
(1) Corporate Existence. IMH is duly organized, validly
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existing and in good standing under the laws of Maryland, 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
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good standing under the laws of such jurisdictions 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 IMH and its subsidiaries, taken as a whole.
(2) Corporate Power; Authorization; Enforceable Obligations. IMH has
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the power, authority and legal right 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 IMH, 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 IMH 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 IMH 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 IMH enforceable against IMH in accordance with
its terms, except as such enforcement may be limited by bankruptcy, insolvency,
moratorium or similar laws now or hereafter in effect relating to the rights and
remedies of creditors generally, and general principles of equity.
(3) No Legal Bar to This Agreement. The execution, delivery and
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performance of this Agreement and the documents or instruments required
hereunder, will not violate any provision of any existing law or regulation
binding on IMH, or any order, judgment, award or decree of any court, arbitrator
or governmental authority binding IMH, or the charter or bylaws of, or any
securities issued by IMH, or of any mortgage, indenture, lease, contract, or
other agreement, instrument, undertaking or other arrangement of any character
or nature whatsoever to which IMH is a party or by which it or its assets may be
bound, the violation of which would have a material adverse effect on the
business operations, assets or financial condition of IMH 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.
(4) Marketable Title. Upon consummation of the transaction
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contemplated by this Agreement, the Company will have good and marketable title
in and to the Preferred Stock, free and clear of all liens, charges, claims,
pledges, options, security interests, encumbrances and restrictions of every
kind.
(5) Issued and Outstanding Preferred Stock. The issued and
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outstanding Preferred Stock of ICCC consists of 9,500 shares, of which, prior
to the Closing Date, IMH is the sole lawful record and beneficial owner. The
Preferred Stock has been duly authorized
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and validly issued and is free of any pre-emptive rights and is entitled to the
rights, privileges and preferences set forth in ICCC's Articles of Incorporation
attached as Exhibit "A" hereto.
b. The Company hereby represents and warrants to IMH as
follows:
(1) Corporate Existence. The Company is duly organized,
validly existing and in good standing under the laws of Maryland, 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.
(2) Corporate Power; Authorization; Enforceable Obligations.
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The Company has the corporate power, authority and legal right 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 its 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 the Company, 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.
(3) No Legal Bar to This Agreement. The execution, delivery
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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 Company, or any order, judgment, award or decree of any court,
arbitrator or governmental authority binding on the Company, or the charter or
bylaws of, or any securities issued by the Company, or of any mortgage,
indenture, lease, contract or other agreement, instrument or undertaking to
which the Company is a party or by which the Company 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 Company 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 provision of any such mortgage, indenture, lease, contract or other
agreement, instrument or undertaking.
(4) Validly Issued. The Class A Stock has been duly
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authorized, validly issued and, upon consummation of the transaction
contemplated by this Agreement, fully paid and non-assessable.
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5. Arbitration.
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(a) Each controversy, dispute or claim between the parties arising
out of or relating to this Agreement, which controversy, dispute or claim is not
settled in writing within thirty (30) days after the "Claim Date" (defined as
the date on which a party subject to this Agreement gives written notice to the
other that a controversy, dispute or claim exists), will be settled by binding
arbitration in Orange County, California in accordance with the provisions of
the Judicial Arbitration and Mediation Services, which shall constitute the
exclusive remedy for the settlement of any controversy, dispute or claim, and
the parties waive their rights to initiate any legal proceedings against each
other in any court or jurisdiction other than the Superior Court of Orange
County (THE "COURT"). Any decision rendered by the arbitrator and such
arbitration will be final, binding and conclusive and judgment shall be entered
pursuant to the California Code of Civil Procedure Section 644 in any court in
the State of California having jurisdiction.
(b) Except as expressly set forth in this Agreement, the arbitrator
shall determine the manner in which the proceeding is conducted, including the
time and place of all hearings, the order of presentation of evidence, and all
other questions that arise with respect to the course of the proceeding. All
proceedings and hearings conducted before the arbitrator, except for trial,
shall be conducted without a court reporter, except that when any party so
requests, a court reporter will be used at any hearing conducted before the
arbitrator. The party making such a request shall have the obligation to
arrange for any pay for the court reporter. The costs of the court reporter
shall be borne equally by the parties.
(c) The arbitrator shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the state
of California will be applicable to the proceeding. The arbitrator shall be
empowered to enter equitable as well as legal relief, to provide all temporary
and/or provisional remedies and to enter equitable orders that will be binding
upon the parties. The arbitrator shall issue a single judgment at the close of
the proceeding which shall dispose of all of the claims of the parties that are
the subject of the proceeding. The parties hereto expressly reserve the right
to contest or appeal from the final judgment or any appealable order or
appealable judgment entered by the arbitrator. The parties hereto expressly
reserve the right to findings of fact, conclusions of law, a written statement
of decision, and the right to move for a new trial or a different judgment,
which new trial, if granted, is also to be a proceeding governed under this
provision.
6. Notices. All notices, requests, demands and other communications
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provided for hereunder shall be in writing (including telegraphic or facsimile
communications) and shall be in mailed (return receipt requested), telegraphed,
sent by facsimile, overnight courier or hand delivered to each party at the
address set forth as follows, or at such other address as either party may
designate by notice to the others, and any such notice, request, demand or other
communication shall be effective upon receipt:
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The Company: Imperial Credit Commercial Holdings, Inc.
00000 Xxxxxx Xxxxxx
Xxxxx Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx
Chief Executive Officer
IMH: Imperial Credit Mortgage Holdings, Inc.
00000 Xxxxxx Xxxxxx
Xxxxx Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
President
7. Amendments. This Agreement shall not be amended, changed, modified,
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terminated or discharged in whole or in part except by an instrument in writing
signed by all parties hereto, or their respective successors or assigns, or
otherwise as provided herein. The parties hereto agree that in no event shall
an oral modification of this Agreement be enforceable or valid.
8. Attorneys' Fees. In the event that any party shall bring an action or
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proceeding in connection with the performance, breach or interpretation hereof,
then the prevailing party in such action as determined by the court or other
body having jurisdiction shall be entitled to recover from the losing party in
such action, as determined by the court or other body having jurisdiction, all
reasonable costs and expense of litigation or arbitration, including reasonable
attorney's fees, court costs, costs of investigation and other costs reasonably
related to such proceeding.
9. Successors and Assigns. This Agreement shall become effective when it
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is executed by all parties and thereafter shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns.
10. Entire Agreement. This Agreement contains the entire agreement of the
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parties relating to the subject matter hereof, and the parties hereto have made
no agreements, representations or warranties relating to the subject matter of
this Agreement that are not set forth otherwise herein. This Agreement
supersedes any and all prior agreements, written or oral, between the parties
hereto.
11. Waiver. Any forbearance by a party to this Agreement in exercising
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any right or remedy under this Agreement or otherwise afforded by applicable law
shall not be a waiver of or preclude the exercise of that or any other right or
remedy.
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12. Headings and Cross References. The section headings hereof have been
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inserted for convenience of reference only and shall not be construed to affect
the meaning, construction or effect of this Agreement. Any reference in this
Agreement to a "Section" or "Subsection" shall be construed, respectively, as
referring to a section of this Agreement or a subsection of a section of this
Agreement.
13. Severability. The invalidity or unenforceability of any provision of
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this Agreement shall not affect the validity of any other provision, and all
other provisions shall remain in full force and effect.
14. Choice of Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of California applicable to contracts made
and performed in said State, without regard to conflicts of laws principals.
15. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which when so executed shall be deemed an original, and
which taken together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement is executed on behalf of the parties by
duly authorized representatives as of the date first above written.
IMPERIAL CREDIT COMMERCIAL HOLDINGS, INC.
By:_______________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
IMPERIAL CREDIT MORTGAGE HOLDINGS, INC.
By:_______________________________
Name: Xxxxxxx X. Xxxxxxx
Title: President
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EXHIBIT A
IMPERIAL COMMERCIAL CAPITAL CORPORATION
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ARTICLES OF INCORPORATION
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