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EXHIBIT 10.1
AMENDED AND RESTATED MANAGEMENT AGREEMENT
AMENDED AND RESTATED MANAGEMENT AGREEMENT, dated as of May 19, 2000, by
and among SPECIALTY MORTGAGE TRUST, INC., a Maryland corporation (the
"Company"), and GONZO FINANCIAL, INC., a Nevada corporation (the "Manager"),
with respect to the following:
WITNESSETH:
WHEREAS, the Company intends to invest in mortgage loans and expects to
continue to qualify for the tax benefits accorded by Sections 856 through 860 of
the Internal Revenue Code of 1986, as amended; and
WHEREAS, the Company desires to retain the Manager to manage the
investments of the Company and to perform certain 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. Terms used but not defined herein shall have the
respective meanings assigned them below:
(a) "Affiliate" means, with respect to any person, another person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with such person.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Governing Instruments" means the articles or certificate of
incorporation or other charter, as the case may be, and bylaws of the Company
and its subsidiaries.
(d) "Mortgage loans" means loans secured by mortgages or deeds of trust
on real estate properties.
(e) "REIT" means Real Estate Investment Trust as defined under Section
856 of the Code.
(f) "REIT Provisions of the Code" means Sections 856 through 860 of the
Code.
(g) "Unaffiliated Directors" shall mean those members of the Board of
Directors of the Company who are not officers or employees of the Company nor
officers, directors or Affiliates of the Manager.
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SECTION 2. GENERAL DUTIES OF THE MANAGER.
(a) Administrative Services Provided by the Manager. The Manager will be
responsible for the day-to-day operations of the Company and will perform such
services and activities relating to the assets and operations of the Company as
may be appropriate, including:
(i) representing the Company in connection with the origination
or purchase of mortgage loans;
(ii) in accordance with the directions of the Board of
Directors, investing or reinvesting any money of the Company;
(iii) furnishing reports and statistical and economic research to
the Company regarding the Company's estate lending activities and the
performance of its portfolio of mortgage loans;
(iv) administering the day-to-day operations of the Company and
performing administrative functions necessary in the management of the
Company, including the collection of revenues, the payment of the
Company's expenses, debts and obligations and the maintenance of
appropriate computer services to perform such administrative functions;
(v) counseling the Company in connection with policy decisions
to be made by the Board of Directors;
(vi) assisting the Company in its use of leverage to finance
mortgage loan acquisitions;
(vii) overseeing the servicing of the Company's mortgage loans;
(viii) establishing underwriting, appraisal and quality control
procedures for the mortgage loans of the Company;
(ix) conducting a legal document review of each mortgage loan
acquired to verify the accuracy and completeness of the information
contained in the mortgage loans, security instruments and other
pertinent documents in the mortgage file;
(x) providing the Company with data processing, legal and
administrative services to the extent required to implement the business
strategy of the Company;
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(xi) providing all actions necessary for compliance by the
Company with all federal, state and local regulatory requirements
applicable to the Company in respect of its business activities,
including preparing or causing to be prepared all financial statements
required under applicable regulations and contractual undertakings;
(xii) providing all actions necessary to enable the Company to
make required federal, state and local tax filings and reports and
generally enable the Company to maintain its status as a REIT, including
soliciting stockholders for required information to the extent required
by the REIT Provisions of the Code;
(xiii) communicating on behalf of the Company with the
stockholders of the Company as required to satisfy any reporting
requirements and to maintain effective relations with such stockholders;
and
(xiv) performing such other services as may be required from time
to time for management and other activities relating to the assets of
the Company as the Board of Directors shall reasonably request or the
Manager shall deem appropriate under the particular circumstances.
(b) Administrative Services Provided by Subcontractors. The
Manager may enter into subcontracts with other parties to provide any
such services to the Company.
(c) Cooperation of the Company. The Company agrees to take all actions
reasonably required to permit the Manager to carry out its duties and
obligations hereunder. The Company further agrees to make available all
materials reasonably required to enable the Manager to satisfy its obligations
to deliver financial statements and any other information or reports with
respect to the Company pursuant to the Securities Purchase Agreement.
SECTION 3. ADDITIONAL ACTIVITIES OF MANAGER. Nothing herein shall
prevent the Manager or any of its officers, directors, employees or Affiliates
from engaging in other businesses or from rendering services of any kind to any
other person or entity, including the purchase of, or advisory service to others
investing in, any type of real estate investment, including investments which
meet the principal investment objectives of the Company, except that the Manager
and its officers, directors and employees shall not provide any such services to
any mortgage REIT other than the Company or another REIT sponsored by the
Manager or its Affiliates which has operating policies and strategies different
in one or more material respects from those of the Company, as confirmed by a
majority of the Unaffiliated Directors. Directors, officers, employees and
agents of the Manager or Affiliates of the
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Manager may serve as trustees, directors, officers, employees, agents, nominees
or signatories for the Company or any subsidiary of the Company, 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
Governing Instruments.
SECTION 4. 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
the Company or any subsidiary of the Company, and may collect and deposit 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 the Company or any subsidiary of the Company.
SECTION 5. RECORDS. The Manager shall maintain appropriate books of
account 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 subsidiary of the Company at any time during normal business
hours.
SECTION 6. COMPENSATION OF THE MANAGER.
(a) Base Management Fee. The Manager will receive a management fee
consisting of:
(i) For mortgage loans or the portion thereof purchased by the
Company, the mortgage loan origination fees or points, usually charged
to a borrower for and upon the origination, extension or financing of a
mortgage loan, up to 2.5% of the loan balance (i.e., 2.5 points) with
any additional fees or points paid to the benefit of the Company. The
amount of this fee is determined by competitive conditions, may vary and
may have a direct effect on the interest rate a borrower is willing to
pay the Company.
(ii) A fee for loan servicing, equal to one-half of one percent
of the total mortgage loan portfolio held by the Company. Payment of
this fee, in effect, lowers the yield retained by the Company on its
loans.
(iii) All late payment charges from payments made by borrowers.
(b) Incentive Compensation. The Company will also pay to the Manager as
incentive compensation for each fiscal quarter, an amount equal to 50% of the
net income of the Company, before
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deduction of such incentive compensation, in excess of the annualized return to
the Company equal to 12%. The incentive compensation calculation and payment
will be made quarterly in arrears. The term "return to the Company" is
calculated for the quarter by dividing the Company's Taxable Income for the
quarter by the Net Worth for the quarter. For such calculations, the "Taxable
Income" of the Company means the taxable income of the Company before the
Manager's incentive compensation, the deduction for dividends paid and net
operating loss deductions arising from losses in prior periods. A deduction for
the Company's interest expenses for borrowed money is taken when calculating
Taxable Income. "Net Worth" for any period means the arithmetic average of the
sum of the gross proceeds from any offering of its equity securities by the
Company, after deducting expenses and costs relating to the offering (not to
exceed $150,000 in this Offering), plus the Company's beginning retained
earnings (without taking into account any losses incurred in prior periods and
excluding amounts reflecting taxable income to be distributed as dividends and
amounts reflecting valuation allowance adjustments). The definition "Return to
the Company" is used only for purposes of calculating the incentive compensation
payable, and is not related to the actual distributions received by
stockholders. The incentive compensation payments to the Manager will be made
before any income distributions are made to the stockholders of the Company.
(c) Payment. The Manager's base fee shall be calculated by the Manager
within 15 days after the end of each month, and such calculation shall be
promptly delivered to the Company. The Company is obligated to pay the amount of
the final base fee in excess of the amount paid to Manager at the beginning of
the month pursuant to the Manager's good faith estimate within 30 days after the
end of each month. The Company shall pay the incentive fee with respect to each
fiscal quarter within 15 days following the delivery to the Company of the
Manager's written statement setting forth the computation of the incentive fee
for such quarter. The Manager shall re-compute the quarterly incentive fee
within 45 days after the end of each fiscal year, and any required adjustments
shall be paid by the Company or the Manager within 15 days after the delivery of
the Manager's written computation to the Company.
SECTION 7. EXPENSES OF THE COMPANY.
(a) Expenses Borne by the Manager. Without regard to the compensation
received hereunder by the Manager, the Manager shall bear the following
expenses:
(i) Employment expenses of the personnel employed by the
Manager, including, but not limited to, salaries, wages, payroll taxes,
and the cost of employee benefit plans;
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(ii) Rent, telephone, utilities, office furniture, equipment and
machinery (including computers, to the extent utilized) and other office
expenses (such as asset/liability software, modeling software and other
software and hardware) of the Manager needed in order to perform its
duties as set forth herein;
(iii) Bookkeeping fees and expenses including any costs of
computer services, other than in connection with communications to
security holders of the Company;
(iv) Miscellaneous administrative expenses incurred in
supervising and monitoring the Company's investments or any subsidiary's
investments or relating to performance by the Manager of its functions
hereunder;
(v) Fees and expenses paid to advisors and independent
contractors, consultants, managers, and other agents engaged by the
Manager for the account of the Company or any subsidiary of the Company;
(vi) Expenses connected with the acquisition of the Company's
assets and mortgage loans;
(vii) Expenses related to the servicing and subservicing of
mortgage loans; and
(viii) Travel and related expenses of personnel of the Manager
when attending meetings or performing other business activities which
relate to the Company or any subsidiary of the Company.
(b) Expenses Borne by the Company. The Company or any subsidiary of the
Company shall pay all of its expenses except those which are the specific
responsibility of the Manager pursuant to this Agreement; and, without limiting
the generality of the foregoing, it is specifically agreed that the following
expenses of the Company or any subsidiary of the Company shall not be paid by
the Manager:
(i) The cost of the borrowed money;
(ii) All taxes applicable to the Company or any subsidiary of
the Company including interest and penalties thereon;
(iii) Legal, accounting and auditing fees and expenses relating
to the Company's or any subsidiary's operations;
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(iv) Expenses relating to any office or office facilities
maintained by the Company or any subsidiary of the Company exclusive of
the office of the Manager;
(v) Expenses connected with the ownership and disposition of the
Company's or any subsidiary's assets, including, but not limited to,
costs of foreclosure, maintenance, repair and improvement of property
and premiums for insurance on property owned by the Company or any
subsidiary of the Company;
(vi) Legal, audit, accounting, underwriting, brokerage, listing,
rating agency, registration and other fees, printing, engraving and
other expenses and taxes incurred in connection with the issuance,
distribution, transfer, registration and stock exchange listing of the
Company's or any subsidiary's equity securities or debt securities;
(vii) The expenses of organizing, modifying or dissolving the
Company or any subsidiary of the Company;
(viii) All insurance costs incurred in connection with the
Company or any subsidiary of the Company;
(ix) Expenses connected with payments of dividends or interest
or distributions in any other form made or caused to be made by the
Board of Directors to holders of the securities of the Company or any
subsidiary of the Company;
(x) Expenses connected with the structuring of the issuance of
mortgage securities by the Company or any subsidiary of the Company,
including but not limited to trustee's fees, insurance premiums, and
costs of required credit enhancements;
(xi) Travel and related expenses of the directors of the Company
when attending meetings or performing other business activities which
relate to the Company;
(xii) All expenses of third parties connected with
communications to holders of equity securities or debt securities of the
Company or any subsidiary of the Company and the other bookkeeping and
clerical work necessary in maintaining relations with holders of such
securities and in complying with the continuous reporting and other
requirements of governmental bodies or agencies, including any costs of
computer services in connection with this function, the cost of printing
and mailing certificates for such securities and proxy solicitation
materials and reports to holders of the Company's or any subsidiary's
securities and reports to third parties required under any indenture to
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which the Company or any subsidiary of the Company is a party;
(xiii) Transfer agent's and registrar's fees and charges;
(xiv) Fees and expenses paid to trustees or directors of the
Company or any subsidiary of the Company, the cost of director and
officer liability insurance and premiums for fidelity and errors and
omissions insurance;
(xv) Any judgment rendered against the Company or any subsidiary
of the Company, or against any trustee or director of the Company or any
subsidiary of the Company in his capacity as such for which the Company
or any subsidiary of the Company is required to indemnify such trustee
or director, or any court or governmental agency; and
(xvi) Other miscellaneous expenses of the Company or any
subsidiary of the Company which are not specified expenses of the
Manager under this Agreement.
SECTION 8. LIMITS OF MANAGER RESPONSIBILITY; INDEMNIFICATION.
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. The Manager, its
directors, officers, stockholders and employees will not be liable to the
Company, any subsidiary of the Company, its subsidiary's stockholders or the
Unaffiliated Directors for any acts or omissions by the Manager, its directors,
officers, stockholders or employees under or in connection with this Agreement,
except by reason of acts or omissions constituting bad faith, willful
misconduct, gross negligence or reckless disregard of their duties under this
Agreement. The Company and its subsidiaries shall reimburse, indemnify and hold
harmless the Manager, its directors, officers, stockholders and employees of and
from any and all expenses, losses, damages, liabilities, demands, charges and
claims of any nature whatsoever (including, without limitation, 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.
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SECTION 9. TERM; TERMINATION FEE.
(a) This Agreement shall commence on the date of the first closing of
the Company's private placement and shall continue in force until the third
anniversary of such date, and thereafter it shall be renewed automatically for
successive one-year periods unless a notice of non-renewal is timely delivered
as described below.
(b) In addition to such further liability or obligation of either party
to the other due upon termination of this Agreement, if this Agreement is
terminated without cause (as "cause" is defined below), the Company shall pay
the Manager a termination fee in an amount equal to the greater of (i) the fair
market value of this Agreement determined by an independent appraisal or (ii)
four percent (4%) of the mortgage loan portfolio of the Company. 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 delivery of the notice of non-renewal, then each party shall,
as soon as reasonably practicable, but in no event more than 45 days following
delivery of the notice of non-renewal, choose a nationally-recognized
independent appraisal firm to conduct an appraisal. In such event, (i) the fair
market value amount shall be deemed to be the average of the appraisals as
conducted by each party's chosen appraiser and (ii) each party shall pay the
costs of its appraiser so chosen. Any appraisal conducted hereunder shall be
performed no later than 45 days following selection of the appraiser or
appraisers. The termination fee payable by the Company shall be paid within 30
days following receipt of the final appraisal to be obtained hereunder.
SECTION 10. TERMINATION BY COMPANY FOR CAUSE. At the option of the
Company, this Agreement shall be and become terminated upon written notice of
termination to the Manager if any of the following events shall occur
(termination for any of such events shall constitute termination for "cause"):
(a) if a majority of the Unaffiliated Directors determines that the
Manager has violated this Agreement in any material respect and, after notice of
such violation, the Manager has failed to cure such violation within 60 days; or
(b) there is entered an order for relief or similar decree or order with
respect to the Manager by a court having competent 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 Manager (i) ceases, or admits in writing its
inability, to pay
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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; (ii)
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 Manager 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 Manager and continue
undismissed for 60 days; (iii) 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 Manager without such
authorization, application or consent and are approved as properly instituted
and remain undismissed for 60 days or result in adjudication of bankruptcy or
insolvency; or (iv) 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 60 days. If any of the events specified above shall
occur, the Manager shall give prompt written notice thereof to the Board of
Directors upon the happening of such event.
SECTION 11. ACTION UPON TERMINATION. From and after the effective date
of termination of this Agreement, except as otherwise specified in of this
Agreement, the Manager shall not be entitled to compensation for further
services hereunder, but shall be paid all compensation accruing to the date of
termination, including accrued and unpaid incentive compensation. Upon such
termination, the Manager shall forthwith:
(a) after deducting any accrued compensation and reimbursement for its
expenses to which it is then entitled, pay over to the Company or any subsidiary
of the Company all money collected and held for the account of the Company or
any subsidiary of the Company pursuant to this Agreement;
(b) deliver to the Board of Directors a full accounting, including a
statement showing all payments collected by it and a statement of all money held
by it, covering the period following the date of the last accounting furnished
to the Board of Directors with respect to the Company or any subsidiary of the
Company; and
(c) deliver to the Board of Directors all property and documents of the
Company or any subsidiary of the Company then in the custody of the Manager.
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SECTION 12. RELEASE OF MONEY OR OTHER PROPERTY UPON WRITTEN REQUEST. The
Manager agrees that any money or other property of the Company or any subsidiary
of the Company held by the Manager under this Agreement shall be held by the
Manager as custodian for the Company or such subsidiary, and the Manager's
records shall be appropriately marked clearly to reflect the ownership of such
money or other property by the Company or such subsidiary. 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 subsidiary of
the Company any money or other property then held by the Manager for the account
of the Company or any subsidiary of the Company under this Agreement, the
Manager shall release such money or other property to the Company or such
subsidiary of the Company within a reasonable period of time, but in no event
later than the later to occur of (i) 30 days following such request and (ii) the
earliest time following such request that remittance will not cause the Manager
to violate any law or breach any agreement to which it or the Company is a
party. The Manager shall not be liable to the Company, any subsidiaries of the
Company, the unaffiliated Directors, or the Company's or its subsidiaries'
stockholders for any acts performed or omissions to act by the Company or any
subsidiary of the Company in connection with the money or other property
released to the Company or any subsidiary of the Company and not constituting
bad faith, willful misconduct, gross negligence or reckless disregard of its
duties. The Company and any subsidiary of the Company shall indemnify 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 subsidiary of the Company unless
such expenses, losses, damages, liabilities, demands, charges and claims arise
in connection with acts or omissions which constitute bad faith, willful
misconduct, gross negligence or reckless disregard of its duties.
Indemnification pursuant to this provision shall be in addition to any right of
the Manager to indemnification under this Agreement.
SECTION 13. REPRESENTATIONS AND WARRANTIES.
(a) The Company hereby represents and warrants to the Manager
as follows:
(i) The Company is duly organized, validly existing and in good
standing under the laws of Maryland, has the power to own its assets and
to transact the business in which it is now engaged and is duly
qualified 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
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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) The Company has the power and authority to execute, deliver
and perform this Agreement and all obligations required hereunder and
has taken all necessary 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. Except as shall
have been obtained, 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.
(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 Company, or
any order, judgment, award or decree of any court, arbitrator or
governmental authority binding on the Company, or the governing
instruments 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 provisions of
any such mortgage, indenture, lease, contract or other agreement,
instrument or undertaking (other than the pledge of amounts payable to
the Manager hereunder to secure the Manager's obligations to its
lenders).
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(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 Nevada, 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 this
Agreement on the terms and conditions hereof and the execution, delivery
and performance of this Agreement and all obligations required
hereunder. Except as shall have been obtained, 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, 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 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
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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.
SECTION 14. 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 (1) delivered by hand, (2) otherwise delivered against
receipt therefore or (3) upon actual receipt of registered or certified mail,
postage prepaid. The parties may deliver to each other notice by electronically
transmitted facsimile copies ("FAX") provided that such FAX notice is followed
within twenty-four (24) hours by any type of notice otherwise provided for in
this paragraph. Any notice shall be duly addressed to the parties as follows:
(a) If to the Company:
0000 Xxxxxx Xxxxxx
Xxxx, Xxxxxx 00000
Attn: Board of Directors
Fax: (000) 000-0000
(b) If to the Manager:
0000 Xxxxxx Xxxxxx
Xxxx, Xxxxxx 00000
Attn: Xxxxx Xxxxxxxxxxx
Fax: (000) 000-0000
Any party may alter the address to which communications or copies are to
be sent by giving notice of such change of address.
SECTION 15. ASSIGNMENTS. Except as set forth in this section, this
Agreement shall terminate automatically in the event of its assignment, in whole
or in part, by the Manager (other than the pledge of amounts payable to the
Manager hereunder to secure the Manager's obligations to its lenders), unless
such assignment is consented to in writing by the Company with the consent of a
majority of the Unaffiliated Directors. Any such assignment shall bind the
assignee hereunder in the same manner as the Manager is bound. In addition, the
assignee shall execute and deliver to the Company a counterpart of this
Agreement naming such assignee as Manager. This Agreement shall not be assigned
by the Company without the prior written 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
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assets) to the Company, in which case such successor organization shall be bound
hereunder and by the terms of such assignment in the same manner as the Company
is bound hereunder.
SECTION 16. 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.
SECTION 17. 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 Nevada.
SECTION 18. 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 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 19. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts.
SECTION 20. 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.
[ Signature Page to Follow ]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
SPECIALTY MORTGAGE TRUST, INC.
/s/ Xxxxx Xxxxxxxxxxx III
--------------------------------------
By: Xxxxx Xxxxxxxxxxx III
Its: President
GONZO FINANCIAL, INC.
/s/ Xxxxx X. Xxxxxxx
--------------------------------------
By: Xxxxx X. Xxxxxxx
Its: Corporate Secretary & Manager
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