EXHIBIT 10.4
DRAFT OF AGREEMENT FOR PURCHASE AND SALE OF REAL ESTATE LOANS
THIS AGREEMENT FOR PURCHASE AND SALE OF REAL ESTATE LOANS (this
"Agreement"), is made and entered into as of October 1, 1997 (the "Effective
Date") by and between SOUTHERN PACIFIC BANK, a California corporation ("Seller")
and IMPERIAL CREDIT COMMERCIAL MORTGAGE INVESTMENT CORP., a Maryland corporation
("Buyer"). IMPERIAL CREDIT INDUSTRIES, INC., a California corporation ("ICII")
that owns all of the issued and outstanding stock of Seller, has executed and
delivered this Agreement solely for the purpose of confirming its representation
and warranty, and memorializing its covenant, set forth in Paragraph 5.3 below.
RECITALS
--------
A. Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller, on the terms and subject to the conditions set forth herein, certain
loans originated and held by Seller.
B. Buyer and Seller desire to enter into this Agreement to govern the
purchase by Buyer from Seller, and sale by Seller to Buyer, of those loans.
AGREEMENT
---------
Therefore, in consideration of the mutual covenants, terms, and conditions
set forth herein, the parties agree as follows:
1. Certain Material Definitions. As used in this Agreement, the following
terms shall have the meanings given to them below:
1.1. "Closing Date" shall mean October ____, 1997.
1.2. "Cut-Off Date" shall mean October 1, 1997.
1.3. "Loans" shall mean, collectively, all of those mortgage loans
described in the table attached as Exhibit A hereto (the "Loan Table"),
which mortgage loans have an aggregate outstanding principal balance as of
the Effective Date hereof of approximately $____________: and "Loan" means
one of such Loans.
1.4. "Purchase Price" shall mean $_______________.
2. Purchase and Sale of Loans; Right of First Offer.
------------------------------------------------
2.1. Purchase and Sale of Loans. On the Closing Date, Seller shall
--------------------------
convey, assign, transfer, set over and deliver to Buyer, and Buyer shall
purchase and take from Seller, all of Seller's right, title and interest in
each of the Loans, including, without limitation:
2.1.1. The outstanding principal balance thereof, accrued
interest and all other sums due as of and after the Cut-Off Date, all
related promissory notes or other writings evidencing the Loans (the
"Notes" or a "Note"), and the related original mortgages, deeds of
trust, security agreements and assignments ("Security Instruments");
2.1.2. Seller's right, title and interest as a holder of the
lien in all real property encumbered by one or more of the Security
Instruments (the "Subject
-1-
Real Property") and personal property (including without limitation
impound or holdback accounts) encumbered by one or more of the
Security Instruments (the "Subject Personal Property"; the Subject
Real Property and Subject Personal Property are sometimes collectively
referred to as the "Subject Property");
2.1.3. Any and all documents, instruments, powers of attorney,
surety agreements, guarantees and security agreements referred to in
the Loans, or related thereto, including without limitation written
copies of the complete payment history on each Loan, credit
applications, credit reports and appraisals, engineering reports (if
any), environmental reports and analyses (if any), financial
statements, borrower and guarantor organizational and authorizing
documents (including without limitation articles of incorporation,
statements of partnership, certificates of limited partnership, by-
laws, corporate resolutions, partnership agreements, operating
agreements, and the like), original insurance policies (or, if
policies have not been delivered to Seller, insurance certificates),
documentation regarding impound or holdback accounts (if any),
original title insurance policies and commitments, surveys, maps, site
plans, copies of permits and other entitlements, zoning letters,
utility service or "will serve" letters, files (including loan files
and correspondence), books, papers, ledger cards, and computer,
electronic and written reports and records (the "Related
Documentation"); and
2.1.4. Any and all rights, benefits, payments and proceeds
arising from or related to any of the foregoing, and funds in an
amount equal to any and all unapplied impounds and other unapplied
holdbacks and borrower deposits delivered to Seller (collectively, the
"Ancillary Rights").
2.2 Right of First Offer.
--------------------
2.2.1. Grant of Right of First Offer. Seller hereby grants and
-----------------------------
conveys to Buyer, in addition to the Loans and as additional
consideration for the Payment Price, a right of first offer to
purchase from Seller, in addition to those Loans being or to be
purchased pursuant hereto, those multifamily and commercial mortgage
loans typical of those originated and to be originated by Seller
("Typical Loans") and designated by Seller as loans to which the right
of first offer described in this Paragraph 2.2.1 applies; provided,
however, that during each 12 month period commencing with the
Effective Date and with each anniversary thereof, but only so long as
that certain Management Agreement entered into by and between Imperial
Credit Commercial Asset Management Corp., a California corporation,
and Buyer dated as of the Effective Date remains in effect, Seller
shall offer to sell to Buyer not less than $150 million in the
aggregate of Typical Loans (for that purpose, the amount of each such
Typical Loan shall be deemed to be equal to its then outstanding
principal balance) pursuant to the right of first offer described in
this Paragraph 2.2.1; and provided further, that
(a) if Seller fails to offer to sell to Buyer pursuant to such right
of first offer at least $150 million in the aggregate of such
Typical Loans during any such 12 month period in which Seller is
required to do so, Seller thereafter shall offer to sell to
Buyer all Typical Loans originated by Seller following the end
of such 12 month period until such time as the aggregate amount
of such Typical Loans that Seller shall have offered for sale to
Buyer pursuant to this further proviso is equal to the
difference obtained by subtracting (i) the aggregate amount of
all Typical Loans that were offered for sale by Seller to Buyer
pursuant to the right of first offer
-2-
described in this Paragraph 2.2.1 during such 12 month period
from (ii) $150 million,
and
(b) in determining the aggregate amount of Typical Loans offered by
Seller to Buyer pursuant to the right of first offer granted by
this Paragraph 2.2.1 in the immediately succeeding 12 month
period, the Typical Loans offered to Buyer pursuant to Seller's
obligations under clause (a) of this Paragraph 2.2.1 shall not
be included.
Notwithstanding the foregoing, Seller only shall be required to offer
Typical Loans to Buyer to the extent that Seller originates Typical
Loans substantially as contemplated by this Agreement and, therefore,
Buyer shall not exercise any remedies against Seller solely as a
result of Seller's failure thereafter to offer such Typical Loans to
Buyer; provided, however, that if Seller at any time thereafter again
is able to offer Typical Loans to Buyer substantially as contemplated
by this Agreement, Seller 's obligation to offer such Typical Loans to
Buyer shall recommence at that time.
2.2.2. Process to be Followed. The process by which Seller is
----------------------
to offer to Buyer the Typical Loans to which the right of first offer
described herein applies, and by which Buyer shall, if it chooses to
do so, purchase some or all of such Typical Loans pursuant to such
right of first offer, is as follows:
2.2.2.1. When Seller has identified specific Typical
Loans to which the right of first offer described in this
Paragraph 2.2 shall apply, it shall give a written notice to
Buyer (the "Offer Notice") (i) describing each of those Typical
Loans (including without limitation the material economic terms
thereof) and the Subject Property that has been pledged as
collateral security therefor, all in reasonable detail, (ii)
stating Seller's good faith estimate of the cash price at which
a willing and sophisticated buyer would purchase each of those
Typical Loans from a willing and sophisticated seller for the
purpose of securitizing such Typical Loans, and such a seller
would sell such Typical Loans to such a buyer for that purpose,
in a transaction in which no broker or other finder is involved
and as to which neither such buyer nor such seller is under any
actual or perceived compulsion to purchase or sell,
respectively, such Typical Loans (such price is referred to as
the "Offered Price"), and (iii) stating that such Typical Loans
are being offered for sale to Buyer pursuant to such right of
first offer.
2.2.2.2. Buyer and its agents, representative and
designees may review and underwrite the loans identified in
Seller's Offer Notice and Seller's servicing and origination
operations, upon reasonable prior notice to Seller, and Seller
shall cooperate with such review and underwriting to the extent
Buyer or any such agents, representatives and designees request
information or documents that are reasonably available and can
be produced without unreasonable expense. Seller shall make the
loan files related to those loans available at Seller's offices
for review by Buyer and any such agents, representatives and
designees during normal business hours upon reasonable prior
notice to Seller, and Buyer may conduct property inspections (to
the extent that Seller could do so), obtain appraisal
recertification and otherwise underwrite the loans described in
the Offer Notice and to reject any such loan that, in Buyer's
opinion based on its reasonable business judgment
-3-
is not a Typical Loan, or that it determines is an unacceptable
investment based on customary practices in the industry. Any
loan so rejected by Buyer shall be deemed not to have been the
subject of a right of first offer pursuant to this Paragraph
2.2, and the price to be paid by Buyer to Seller for the
remaining Typical Loans described in Seller's Offer Notice shall
be recomputed to be equal to the cash price at which a willing
and sophisticated buyer would purchase each of those remaining
Typical Loans from a willing and sophisticated seller for the
purpose of securitizing such remaining Typical Loans, and such a
seller would sell such remaining Typical Loans to such a buyer
for that purpose, in a transaction in which no broker or other
finder is involved and as to which neither such buyer nor such
seller is under any actual or perceived compulsion to purchase
or sell, respectively, such remaining Typical Loans.
2.2.2.3. If Buyer desires to purchase some or all of the
Typical Loans described in Seller's Offer Notice, it shall give
a written notice to that effect to Seller (the "Acceptance
Notice") within thirty (30) days after Buyer's receipt of the
Offer Notice setting forth its intention to purchase those
Typical Loans for their Offered Price on a date (the "Purchase
Date") on which such purchase and sale is to occur, which
Purchase Date shall be a business day that is not fewer than
forty five (45) nor more than ninety (90) days after the date on
which it gives such Acceptance Notice. In addition, Buyer shall
enclose with the Acceptance Notice a completed Agreement for
Purchase and Sale of Real Estate Loans in the form of this
Agreement, except that this Paragraph 2.2 and the heading for
Paragraph 2 shall be deleted in their entirety therefrom;
Paragraphs 2.1, 2.1.1, 2.1.2, 2.1.3 and 2.1.4 shall be
renumbered as set forth in the following table:
Old Paragraph Number New Paragraph Number
-------------------- --------------------
Paragraph 2.1 Paragraph 2
Paragraph 2.1.1 Paragraph 2.1
Paragraph 2.1.2 Paragraph 2.2
Paragraph 2.1.3 Paragraph 2.3
Paragraph 2.1.4 Paragraph 2.4
and such conforming changes as are necessary to reflect the
identity of the Typical Loans in Exhibit A and the correct
information in Paragraph 1 shall be made.
2.2.2.4. On the Purchase Date, the Seller shall sell, and
the Buyer or its designee shall purchase, the Typical Loans
described in the Offer Notice (and not rejected by Buyer
pursuant to Paragraph 2.2.2.2) for the Offered Price pursuant to
the agreement described in the last sentence of Paragraph
2.2.2.3.
2.2.2.5. Each of the Seller and Buyer shall cooperate
with the other with respect to the purchase and sale of Typical
Loans pursuant to this Paragraph 2.2.
2.2.2.6. The obligations of the Seller set forth in this
Paragraph 2.2 (i.e., the covenant of the Seller to provide to
Buyer a right of first offer pursuant to the terms and
conditions set forth in this Agreement and to perform its
related obligations set forth herein) shall
-4-
survive the Closing of the sale of the Loans described in
Exhibit A annexed to this Agreement.
3. Purchase Price. Buyer shall pay to Seller at the time of the Closing
--------------
(as defined in Paragraph 4.1 below) the Purchase Price, increased by an amount
------------
equal to the accrued interest on the Loans at the mortgage loan interest rate,
and reduced by an amount equal to the servicing fee rate on the Loans, each such
----------
amount to be computed for the period of time commencing with and including the
Cut-Off Date and ending with and excluding the Closing Date. Buyer shall pay the
Purchase Price as so increased and decreased in United States Dollars in cash or
by federal funds wire transfer to such account or accounts as Seller may
designate in writing. Among other designations, Seller shall designate that an
amount equal to $________________ plus accrued interest (collectively, the "Pay-
Off Amount") be paid to the Federal Home Loan Bank of San Francisco ("FHLB"). At
the Closing, the parties shall calculate the Purchase Price based on the status
of each Loan on the Cut-Off Date.
4. Closing.
-------
4.1. Time and Place. The closing of the purchase and sale transaction
--------------
(the "Closing") shall be held at the offices of Seller or at such other
locations as the parties may agree in writing, on the Closing Date.
4.2. Delivery of Assignment and Other Documents. At Closing, Seller
------------------------------------------
shall deliver to Buyer, or as Buyer may direct in writing, the following
for each Loan:
4.2.1. Note, endorsed in such manner as Buyer reasonably may
request, and Security Instruments, together with individual assignments
in recordable form, in form satisfactory to Buyer in the exercise of
its reasonable business judgment, and otherwise sufficient under the
laws of the jurisdiction in which the Security Instruments are recorded
and filed to reflect of record or in the appropriate files, as
applicable, the sale or transfer of the Loan and of Seller's beneficial
interest in the Security Instruments, the Subject Property encumbered
thereby and all Related Documentation that may be assigned (such
assignments are referred to collectively as the "Assignments").
4.2.2. All Related Documentation.
4.2.3. An assignment of all insurance policies, including, but
not limited to, hazard insurance, and lender's policy of title
insurance.
4.2.4. Such other documents, instruments, agreements and
assurances as may be necessary or appropriate, or as Buyer reasonably
may request, to vest, or to confirm the vesting, in Buyer of the
ownership of each Loan.
Notwithstanding the foregoing, Buyer may request that Seller retain the
Note, so endorsed, the Security Instruments and Assignments thereof and the
Related Documentation or portions thereof if Buyer engages Seller to act as
servicer with respect to that Loan and such retention is consistent with
that engagement.
In addition to the foregoing, Seller shall deliver to Buyer on the
Closing Date an opinion of counsel to Seller, dated as of the Closing Date
and in form and substance satisfactory to the Buyer and its counsel in
their reasonable judgment to the effect that: (1) Seller is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, with full entity power and authority
under such laws to own its properties and to conduct its business; (2)
Seller is qualified to do business as a foreign corporation or depository
institution in all jurisdictions in which its activities as
-5-
originator and servicer of the Loans require such qualification; (3) this
Agreement has been duly authorized, executed and delivered on the part of
the Seller and is a legal, valid and binding obligation of the Seller
enforceable in accordance with its terms, subject to applicable bankruptcy,
reorganization, receivership, conservatorship, insolvency, moratorium and
other laws relating to or affecting creditors' rights generally and to
general principles of equity (whether such enforceability is considered in
a proceeding in equity or at law); (4) no consent of any other party or any
consent, license, approval or authorization, or filing or registration with
any governmental authority, bureau or agency is required to be obtained in
connection with the execution, delivery or performance of this Agreement or
the sale of the Loans that has not been duly obtained; and (5) the
execution, delivery and performance of this Agreement and the sale of the
Loans does not violate any provision of any existing federal, state or
local law or regulation applicable to the Seller, or, to the best knowledge
of such counsel, any order or decree of any court to which the Seller is
subject or the articles of incorporation or by-laws of the Seller, or any
mortgage, indenture, contract or other agreement for money borrowed, to
which the Seller is a party or by which it or any significant portion of
its properties is bound, other than violations, breaches or defaults which
individually and in the aggregate are not reasonably expected to have a
material adverse effect on the Seller and its subsidiaries, if any, taken
as a whole.
4.3. Recording and Filing of Assignments. At Buyer's request, the
-----------------------------------
Assignments promptly shall be recorded or filed, as applicable, in the name
of Buyer or in the name of a person or entity designated by Buyer in all
appropriate public offices, files and records. If any such Assignment is
lost or returned unrecorded or unfiled because of a defect therein, Seller
promptly shall prepare substitute Assignments to cure such defects and
thereafter cause each such substitute Assignment to be duly recorded or
filed, as applicable. Each of Seller and Buyer shall pay one half of all
recording and filing fees related to such a one-time recordation or filing,
as applicable, of the Assignments.
4.4. Status of Items Retained by Seller. Any Notes, Security
----------------------------------
Instruments, Related Documentation or Ancillary Rights with respect to one
or more of the Loans that are in Seller's possession from and after the
Closing shall be retained and maintained by the Seller in trust for the
benefit of Buyer and in a custodial capacity only, and subject in all
events to the will of Buyer. Seller shall segregate all of such Notes,
Security Instruments, Related Documentation and Ancillary Rights from
Seller's other books and records and shall appropriately xxxx each of them
to reflect clearly the sale of the related Loan to Buyer and the ownership
of each Loan by Buyer. Seller shall release its custody of the contents of
any thereof only in accordance with written instructions from Buyer except
where such release is required as incidental to the Seller's servicing of
the Loans (if and to the extent Seller is engaged to provide servicing with
respect thereto), or is in connection with a repurchase of any such Loan as
contemplated by Paragraph 8.1 below.
4.5. Seller's Books and Records. Seller shall reflect the sale of
--------------------------
each Loan sold pursuant to this Agreement on the Seller's balance sheet and
other financial statements as a sale of assets by Seller. Seller shall be
responsible for maintaining, and shall maintain, a complete set of books
and records for the Loans which shall be clearly marked to reflect the sale
of each Loan to Buyer and the ownership of each Loan by Buyer.
5. Representations and Warranties:
------------------------------
5.1. General Representations and Warranties of Seller. Seller hereby
------------------------------------------------
represents and warrants to Buyer as follows:
-6-
5.1.1. Seller is a corporation duly organized, existing and in
good standing under the laws of the state of its incorporation or
formation; and it possesses the requisite corporate or other authority
to enter into this Agreement and consummate all transactions
contemplated hereby.
5.1.2. The execution, delivery and performance of this
Agreement has been duly authorized and all corporate or other action
necessary to consummate the transactions contemplated by this
Agreement have been taken by Seller.
5.1.3. The execution and delivery of this Agreement and the
sale of any and all Loans hereunder are not and will not be a breach,
violation or event of default (or an event which would become an event
of default with the lapse of time or notice or both) under any
judgment, decree, agreement, or other instrument to which Seller is a
party or otherwise subject.
5.1.4. Neither the sale of Loans, nor the consummation of the
transactions contemplated by this Agreement, are or will result in
violation of any applicable federal, state or local law, rule or
regulation.
5.1.5. Upon execution and delivery of this Agreement, it shall
be a valid and binding obligation of Seller, and enforceable against
Seller in accordance with its terms.
5.1.6. To the best of Seller's knowledge, as of the date of
this Agreement, other than that certain Memorandum of Understanding
entered into as of September 26, 1996 by and among Seller, the Federal
Deposit Insurance Corporation and the California Department of
Corporations, a copy of which has been provided to Buyer, there is no
pending or threatened litigation, adverse claim or action of any kind
or nature which, if decided against Seller, would materially and
adversely affect Seller's ability to perform its obligations pursuant
to this Agreement. Seller agrees to promptly notify Buyer of the
subsequent existence of any such pending or threatened litigation,
adverse claim or action.
5.1.7. Seller has not, in connection with this transaction,
entered into any agreement, incurred any obligation, made any
commitment, or taken any action which might result in a claim for or
an obligation to pay a sales brokerage commission, finder's fee, or
similar fee in respect to the transactions described in this
Agreement. Seller agrees to indemnify and hold Buyer harmless from and
against any claims, liabilities, damages, or costs (including
reasonable attorneys' fees) relating to any broker, agent, or finder
or other person, who shall claim to have dealt on behalf of Seller in
connection with the transactions contemplated by this Agreement.
5.2 Representations and Warranties of Seller as to Each Loan. Seller
--------------------------------------------------------
represents and warrants to Buyer as of the Closing Date, with respect to
each Loan being purchased by Buyer pursuant hereto, that:
5.2.1. Seller has sole, full and complete title to each Loan,
free and clear of all claims of or assignments or pledges to any other
person or entity; and Seller has full power and authority to sell,
assign, transfer and convey the same to Buyer as provided herein.
5.2.2. Each Note, Security Instrument and other document,
instrument or agreement executed and delivered by Seller or the
borrower in connection with the Loan (individually, a "Loan Document"
and collectively, the "Loan Documents") for each Loan, including each
Note, Security Instrument, Related
-7-
Documentation and Ancillary Rights, is the legal, valid and binding
obligation of the parties thereto (subject to any non-recourse
provisions therein), enforceable in accordance with its terms, except
as such enforceability may be limited by anti-deficiency laws or
bankruptcy, reorganization or other similar laws affecting the
enforcement of creditors' rights generally, and by general principles
of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law), and except that certain provisions of
such Loan Documents are or may be unenforceable in whole or in part
under applicable federal or state laws, but the inclusion of such
provisions does not render any of the Loan Documents invalid as a
whole, and such Loan Documents taken as a whole are enforceable to the
extent necessary and customary for the practical realization of the
rights and benefits afforded thereby and, subject to the foregoing
qualifications, there is no offset, defense, counterclaim or right of
rescission with respect to any of such Loan Documents;
5.2.3. Each Loan purchased hereunder, including without
limitation, all forms and documents used in connection with that Loan,
is and as of the Closing Date will be in full compliance with all
federal and state laws and regulations.
5.2.4. In respect of each Loan, (A) in reliance on certified
copies of the incorporation or partnership or other entity documents,
as applicable, delivered in connection with the origination of such
Loan, the related borrower is an individual who is a permanent
resident of, or an entity organized under the laws of, a state of the
United States of America, and (B) to Seller's knowledge, the related
borrower is not a party to any bankruptcy, reorganization, insolvency
or similar proceeding.
5.2.5. Each Loan sold hereunder is and as of the Closing Date
will be an adjustable rate loan secured by a mortgage, deed of trust,
deed to secure debt or similar instrument (each, a "Mortgage") that is
and as of the Closing Date will be a valid and subsisting first
priority lien on the Subject Real Property purported to be encumbered
thereby free and clear of any liens, claims, encumbrances,
participation interests, pledges, charges or security interests,
subject only to certain permitted encumbrances described in Schedule D
annexed hereto and certain encumbrances previously disclosed in
writing to Buyer, if any; except for ___________________, no Subject
Real Property is in whole or in part a leasehold estate; except as set
forth in Schedule A annexed hereto, no Loan is secured by any
collateral other than the Mortgage and any separate security documents
related thereto or as otherwise set forth on the Loan Table; and
except as set forth in Schedule B annexed hereto, no portion of any
Subject Property secures any other mortgage loan not represented by
the related Note; and, with respect to each Loan, either (i)
substantially all of the proceeds of such Loan were used to acquire or
improve or protect an interest in real property (as that term is used
in United States Treasury Regulations Section 1.860G-2(a)(4)) that, at
date of origination (or, if the Loan has been significantly modified
within the meaning of United States Treasury Regulations Section
1.860G-2(b)(1), at the time of such modification), was the only
security for such Loan, or (ii) the fair market value of such interest
in real property was at least equal to 80% of the principal amount of
such Loan at origination (or such modification);
5.2.6. Except as disclosed in the Loan Table, no Loan is cross-
defaulted with any loan (other than a Loan), and no Loan is secured by
any property that secures another loan (other than a Loan);
-8-
5.2.7. Each such Mortgage, together with any separate security
agreements and related documents, establishes a perfected first
priority security interest in favor of the Seller in all the related
borrower's fixtures and personal property used in, and reasonably
necessary to operate, the Subject Real Property and, to the extent a
security interest may be created therein, the proceeds arising from
the Subject Real Property and any other collateral securing such
Mortgage, subject only to certain encumbrances described in Schedule D
annexed hereto and other encumbrances previously disclosed in writing
to Buyer, if any;
5.2.8. There is an assignment of leases and rents provision in
the Security Instruments for each Loan creating a perfected first
priority security interest in leases and rents arising in respect of
the related Subject Real Property, subject only to certain permitted
encumbrances set forth in Schedule D annexed hereto and certain other
encumbrances previously disclosed in writing to Buyer, if any;
5.2.9. There are no mechanics' or other similar liens which have
been filed for work, labor or materials (nor, to Seller's knowledge,
are any rights outstanding that under applicable law could give rise
to any such lien) affecting any Subject Real Property which are or may
be prior or equal to the lien of the related Mortgage, except those
insured against pursuant to the applicable title insurance policy;
5.2.10. The mortgagor specified in each Mortgage has and as of
the Closing Date will have good and indefeasible title to the related
Subject Real Property;
5.2.11. With respect to each Mortgage that is a deed of trust, a
trustee, duly qualified under applicable law to serve as such (if such
qualification is required), currently so serves and is named in the
deed of trust or has been substituted of record in accordance with
applicable law, and no fees or expenses are or will become payable to
the trustee thereunder except in connection with a trustee's sale or
reinstatement after default under the related Loan or in connection
with a release of the related Subject Property upon satisfaction of
the Loan;
5.2.12. Each Subject Real Property securing a Loan is covered by
a title insurance policy insuring that the Mortgage recorded against
that Subject Real Property is a valid and perfected first lien in the
fee interest therein, subject only to certain permitted encumbrances;
no claims have been or, as of the Closing Date, will have been made
under the related title insurance policy; and such policy is and as of
the Closing Date will be in full force and effect and insures and will
as of the Closing Date insure the Seller as the owner of the Loan;
5.2.13. Seller has and, at the time of the assignment of each
Loan to Buyer, Seller will have, good title to and was and, at the
time of the assignment of each Loan to Buyer, will be, the sole owner
of such Loan free and clear of any pledge, lien or encumbrance, other
than an encumbrance against certain of the Loans in favor of FHLB,
which encumbrance will terminate upon payment by Buyer, on behalf of
Seller, of the Pay-Off Amount to FHLB, and Seller hereby authorizes
Buyer to (i) withhold the Pay-Off Amount from the net proceeds of sale
that, but for Seller's grant of such authority to Buyer, Buyer would
be required to pay over and deliver to Seller pursuant to this
Agreement, and (ii) to pay over and deliver the Pay-Off Amount to the
FHLB on Seller's behalf; and upon such payment by Buyer the related
Assignment will validly transfer
-9-
ownership of such Loan to Buyer or its designee free and clear of any
pledge, lien or encumbrance;
5.2.14. Each Assignment to be executed and delivered, recorded
or filed by or on behalf of Seller pursuant hereto is and will be in
recordable form and legal, valid and binding and will be recorded or
filed, or submitted for recording or filing, in the appropriate
records or files of the applicable jurisdiction;
5.2.15. Seller's endorsement of the Note evidencing each Loan,
which Note is secured by the related Mortgage, will constitute the
legal and binding assignment of such Note and together with an
Assignment of mortgage and Assignment of the assignment of leases and
rents, legally and validly will convey all right, title and interest
in such Loan to Buyer;
5.2.16. Each Loan Document is and as of the Closing Date will be
a legal, valid and binding obligation of the party or parties thereto,
enforceable in accordance with its terms, except as the enforceability
thereof may be limited by applicable state law and bankruptcy,
insolvency, reorganization or other loss relating to creditors' rights
and general equitable principles, and while certain provisions of such
Loan Documents are and may be unenforceable in whole or in part, the
inclusion of such provisions does not render any of those Loan
Documents invalid as a whole, and such Loan Documents taken as a whole
are enforceable to the extent necessary and customary for the
practical realization of the rights and benefits (including
realization on the related Subject Property) purported to be afforded
thereby, and there is no exemption available to the related borrower
that would interfere with such realization through foreclosure except
any statutory right of redemption or as may be limited by anti-
deficiency laws or by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally,
and by general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law);
5.2.17. The principal amount of each Loan stated on the related
Note has been fully disbursed as of the origination date specified
therein, there are no future advances required to be made by the
lender under any of the related Loan Documents, all requirements under
the related Loan Documents, if any, for disbursements of additional
Loan proceeds have been satisfied fully, and any construction of
improvements on the related Subject Real Property that has not been
completed will not impair the value of that Subject Real Property
relative to the value reflected in the most recent appraisal thereof;
5.2.18. Other than as set forth in the Loan Table, no Loan is as
of the date hereof, will be as of the Closing Date, or shall have been
at any time during the 12 month period preceding the Cut-Off Date,
more than 30 days delinquent in payments of principal or interest; no
other material default or breach under any Loan either has been waived
by Seller or on its behalf; no such other material default now exists
and is continuing beyond the cure period, if any, applicable thereto;
no Loan has been accelerated and no foreclosure or proceeding under a
power of sale has been initiated under any Mortgage;
5.2.19. Seller has not modified, and shall not on or prior to
the Closing Date modify, the terms of any Loan and none of the Loan
Documents have been modified or waived, or shall be modified or waived
on or prior to the Closing Date, in each case in any material respect
except as previously disclosed in writing by Seller to Buyer; with
respect to each Loan, the applicable interest rate and the related
monthly payment have been calculated correctly (or have been
-10-
recalculated correctly, in the case of certain Loans for which one or
both of such amounts previously was calculated incorrectly, each of
which incorrect calculations previously has been disclosed to Buyer in
writing) pursuant to the terms of the applicable Loan Documents for
all purposes; and all information set forth in the Loan Table with
respect to each Loan is true and correct in all material respects;
5.2.20. No Loan has capitalized interest included in its
principal balance, or provides for any shared appreciation rights or
other equity participation therein;
5.2.21. No Loan is an interest-only loan the documents governing
which provide only for interest accruing on that Loan to be paid on a
periodic basis, with no periodic payment on account of amortization of
principal;
5.2.22. No Loan has been, and as of the Closing Date no Loan
shall be, satisfied, cancelled, subordinated, released or rescinded,
in whole or in part, and the related mortgagor has not been and shall
not be released by Seller from any of such mortgagor's obligations
under any Loan Documents;
5.2.23. None of the Loan Documents is or, on or prior to the
Closing Date, will be subject to any right of rescission, set-off,
valid counterclaim or defense, no exercise of any of the rights and
remedies under the Loan Documents and in accordance with procedures
permitted under applicable law will render any of such Loan Documents
subject to any right of rescission, set-off, valid counterclaim or
defense, and no right of rescission, set-off, valid counterclaim or
defense has been asserted with respect to any Loan;
5.2.24. All of the Subject Property securing each Loan being or
to be sold by Seller pursuant to this Agreement is, and as of the
Closing Date will be, in all material respects, in compliance with,
and is used and occupied in accordance with, all applicable statutes,
rules, laws, regulations and ordinances and all restrictive covenants
of record applicable to the Subject Property; and all inspections,
licenses and certificates of occupancy required by any of such
statutes, rules, laws, regulations and ordinances to be made or issued
with regard to the Subject Property have been obtained and are in full
force and effect (except to the extent the failure to obtain and
maintain any thereof do not materially impair the current use of the
Subject Property or the rights of a holder of the related Loan);
5.2.25. All of the Subject Property securing each Loan being or
to be sold by Seller pursuant to this Agreement is, and as of the
Closing Date will be, in good repair and free and clear of any damage
or condition that would materially adversely affect the value of such
Subject Real Property as security for the related Mortgage, other than
damage and conditions that have been fully repaired; each Subject Real
Property is comprised of one or more separate and lawfully created
parcels; each Subject Real Property securing a Loan abuts or has
access to, and as of the Closing Date will abut or will have access
to, a dedicated, physically open road; each Subject Real Property is
served by public utilities and services generally available in the
surrounding community; each Subject Real Property is serviced by well
or public water and sewer systems (or septic facilities); each Subject
Real Property has parking required under applicable law for the
operation of the businesses currently conducted thereon; no part of
any improvement that is a part of a Subject Real Property lies outside
the boundaries of, or building setback and other restriction lines
applicable to, that Subject Real Property; no improvements on
adjoining properties encroach
-11-
onto any Subject Real Property except for encroachments that do not
materially adversely affect the security intended to be provided by
the related Mortgage or the use, enjoyment, value or marketability of
such Subject Real Property; Seller has no knowledge of any
condemnation proceedings with respect to any Subject Real Property
securing a Loan that are or as of the Closing Date will be pending;
and each Subject Real Property is owned by the borrower named as the
mortgagor in the Mortgage and is used and occupied for income
producing purposes;
5.2.26. There are no delinquent property taxes, ground rents,
water charges, sewer rents, assessments including assessments payable
in future installments, or other outstanding charges materially
adversely affecting the related Subject Property, and premiums for all
insurance policies required to be maintained pursuant to each Mortgage
with respect to each Subject Real Property have been, and through the
Closing Date will be, paid to the extent such amounts have become or
shall become due;
5.2.27. Seller either has received no notice of cancellation or
non-renewal with respect to any of the insurance policies required to
be maintained pursuant to the Mortgage or has provided for insurance
coverage against the perils and in the amounts required by such
Mortgage to be covered by insurance through one or more insurance
policies maintained by the Seller, with respect to each Subject Real
Property; Seller has no knowledge that any action, omission,
misrepresentation, negligence, fraud or other similar occurrence has
taken place that reasonably would be expected to result in the failure
or impairment of full and timely coverage under any such insurance
policy; and each such insurance policy contains a clause providing
that it is not terminable and may not be reduced without 30 days'
prior written notice to the mortgagee;
5.2.28. Each Mortgage requires that the related Subject Real
Property and all improvements thereon be covered by insurance policies
reasonably prescribed by the related mortgagee or providing coverage
against loss or damage sustained by (A) fire and extended perils
included within the classification "All Risk of Physical Loss" in an
amount sufficient to prevent the mortgagor from being deemed a co-
insurer and to provide coverage on a full replacement cost basis (in
some cases exclusive of foundations and footings) or some other
predetermined value basis; such policies contain a standard mortgagee
clause naming mortgagee and its successor in interest as additional
insureds; (B) business interruption or rental loss insurance in an
amount at least equal to 12 months of operations (or in some cases all
rents and additional rents); (C) flood insurance (if any portion of
the improvements on a Subject Real Property is located in an area
identified by the Federal Emergency Management Agency, with respect to
certain Loans, and the Secretary of Housing and Urban Development,
with respect to other Loans, as having special flood hazards); (D)
worker's compensation; (E) comprehensive general liability insurance
in amounts as generally are required by commercial mortgage lenders;
all such insurance policies contain clauses providing they are not
terminable and may not be terminated or expire without 30 days' prior
written notice to the mortgagee (except where applicable law requires
a shorter period), and all premiums due and payable through the
Closing Date have been made; and no notice of termination,
cancellation or non-renewal with respect to any of such policies has
been received by Seller;
5.2.29. Seller has inspected or caused to be inspected each
Subject Real Property within the last 12 months;
-12-
5.2.30. Seller did not engage in an adverse selection process in
selecting the Loans for sale, assignment and transfer to Buyer.
5.2.31. No more than 5% of the aggregate outstanding principal
amount of the Loans have the same borrower or, to Seller's best
knowledge, are to borrowers, which are affiliates of each other;
5.2.32. Except as set forth on Schedule C annexed hereto, each
Mortgage (A) contains a "due-on-sale" clause, which provides for the
acceleration of the payment of the unpaid principal balance of the
related Loan if, without the prior written consent of the holder, the
related Subject Real Property or any interest therein is directly or
indirectly transferred or sold (except that the Mortgage may provide
for a one-time assignment subject to the holder's approval of the
transferee); and (B) prohibits any further pledge or lien on the
Subject Real Property, whether of equal or subordinate priority to the
lien of the Mortgage, unless the prior written consent of the holder
is obtained or certain conditions set forth in the Mortgage are
satisfied;
5.2.33. If so indicated to Buyer in writing on or prior to the
date hereof, with respect to each Loan, either an environmental site
assessment was prepared in connection with the origination of such
Loan or Seller has reviewed a compilation of data bases made available
by several regulatory agencies constructed by a private service with
respect to an area within a certain radius surrounding the related
Subject Real Property, and no such assessment or review revealed any
known circumstances or conditions and the Seller has no knowledge of
any circumstances or conditions with respect to such Subject Real
Property (including any Subject Real Property with respect to which
neither an assessment was prepared nor was a review performed as
described above), that would constitute or result in a material
violation of any environmental laws or require any expenditure
material in relation to the principal balance of such Loan to achieve
or maintain compliance in all material respects with any and all
environmental laws;
5.2.34. The Seller's loan file for each Loan contains the
insurance policy with respect to the related Subject Property required
by the relevant Loan Documents, or a certificate of insurance for such
insurance policy;
5.2.35. All amounts required to be deposited by the borrower
with respect to each Loan at the origination of such Loan have been
deposited, and there are no deficiencies with regard thereto;
5.2.36. To Seller's best knowledge, all significant leases with
respect to each Subject Real Property are and as of the Closing Date
will be in full force and effect, there has been and as of the Closing
Date will be no material default by the related borrower or, to
Seller's knowledge, except as disclosed on Schedlue D, the lessee, and
no person or entity other than the related borrower owns any interest
in any payments due or to become due under the related leases;
5.2.37. To Seller's best knowledge, there are and as of the
Closing Date will be no pending or threatened actions, suits or
proceedings by or before any court or other governmental authority
against or affecting the related borrower under each Loan or the
Subject Real Property securing such Loan which, if determined against
such mortgagor or Subject Real Property, would materially and
adversely affect the value of such Subject Real Property or the
ability of the borrower to pay principal, interest and other amounts
due under such Loan; and
-13-
5.2.38. Each appraisal obtained in connection with the
origination of a Loan was obtained from an independent third-party
appraiser in the business of making appraisals of real properties such
as the Subject Real Property securing that Loan.
5.3. Representation, Warranty and Covenant of ICII. For the purpose
---------------------------------------------
of inducing Buyer to enter into this Agreement, with the intent that Buyer
rely hereon, and with the understanding and expectation that Buyer will
rely hereon, ICII hereby represents and warrants to Buyer that, as of the
Closing Date, there are no circumstances or conditions with respect to any
Subject Real Property securing any Loan that would constitute or result in
a material violation of any applicable environmental laws or require an
expenditure material in relation to the principal balance of that Loan to
achieve or maintain compliance in all material respects with all such
environmental laws. If the representation and warranty of ICII set forth in
the preceding sentence is breached and if such breach materially and
adversely affects the interests of the Buyer in that Loan, ICII shall
purchase the Loan from the Buyer, within 30 days after receipt of written
notice from the Buyer of such breach and requesting that ICII complete such
purchase.
5.4. General Representations and Warranties of Buyer. Buyer
-----------------------------------------------
represents and warrants to Seller as follows:
5.4.1. Buyer is a corporation duly organized, existing and in
good standing under the laws of the state of its incorporation or
formation; and it possesses the requisite corporate or other authority
to enter into this Agreement and consummate all transactions
contemplated hereby.
5.4.2. The execution, delivery and performance of this
Agreement has been duly authorized and all corporate or other action
necessary to consummate the transactions contemplated by this
Agreement have been taken by Buyer.
5.4.3. The execution and delivery of this Agreement and the
sale of any and all Loans hereunder are not and will not be a breach,
violation or event of default (or an event which would become an event
of default with the lapse of time or notice or both) under any
judgment, decree, agreement, or other instrument to which Buyer is a
party or otherwise subject.
5.4.4. Neither the sale of Loans, nor the consummation of the
transactions contemplated by this Agreement, are or will result in a
violation of any applicable federal, state or local law, rule or
regulation.
5.4.5. Upon execution and delivery of this Agreement, it shall
be a valid and binding obligation of Buyer, and enforceable against
Buyer in accordance with its terms.
5.4.6. To the best of Buyer's knowledge, as of the date of this
Agreement, there is no pending or threatened litigation, adverse claim
or action of any kind or nature, which, if decided against Buyer,
would materially and adversely affect Buyer's ability to perform its
obligation pursuant to this Agreement. Buyer agrees to promptly notify
Seller of the subsequent existence of any such pending or threatened
litigation, adverse claim or action.
5.4.7. Buyer has not, in connection with this transaction,
entered into any agreement, incurred any obligation, made any
commitment, or taken any action which might result in a claim for or
an obligation to pay a sales brokerage commission, finder's fee, or
similar fee in respect to the transactions described
-14-
this Agreement. Buyer agrees to indemnify and hold Seller harmless
from and against any claims, liabilities, damages, or costs (including
reasonable attorneys' fees) relating to any broker, agent, or finder
or other person, who shall claim to have dealt on behalf of Buyer in
connection with the transactions contemplated by this Agreement.
6. Certain Covenants of Seller.
---------------------------
6.1. Assistance in Securitization. Seller shall take all reasonable
----------------------------
steps, at Buyer's sole expense, to assist Buyer if Buyer so requests in
securitizing the Loans and selling undivided interests in such Loans in a
public offering or private placement or selling participating interests in
such Loans, which steps shall include, but not be limited to, (i) providing
any information relating to the Loans necessary to assist in the
preparation of any disclosure documents, (ii) providing information
(including accounting comfort thereon) relating to delinquencies and
defaults with respect to Seller's servicing portfolio (or such portion
thereof as is similar to the Loans), (iii) entering into any other
servicing, custodial or other similar agreements, that are consistent with
Seller's servicing obligations to Buyer (if any), together with such
changes as may be customary in securitizations rated "AAA" (including
without limitation, a securitization involving a REMIC) (a
"Securitization"), (iv) providing as of the date of such Securitization an
opinion of counsel to Seller in form and substance satisfactory to Buyer
and its counsel to the effect that the sale of the Loans by Seller to Buyer
as contemplated by this Agreement constitutes a true sale of the Loans,
[Seller requests deletion of the remainder of this Section 6.1] and (v)
providing as of the date of such Securitization representations and
warranties as to Seller and the Loans, which are consistent with the
representations and warranties contained in this Agreement, together with
such changes therein as are customary in a Securitization, subject only to
events, conditions or changes in the characteristics of the Loans occurring
or arising after the Closing Date that (A) are specified in writing by
Seller, and (B) did not result in whole or in part from the failure of
Seller to perform its obligations under this Agreement or under any
servicing agreement to which it may be a party. If any of the
representations and warranties contemplated in clause (v) above is
breached, Buyer shall have, in addition to any other remedies which may be
available to it, the remedies provided in Paragraph 8.1 hereof.
6.2. No Solicitation of Prepayments. For a period of one (1) year
------------------------------
from the date of sale, Seller shall not actively solicit any borrowers with
respect to any of the Loans (in writing or otherwise) to refinance any of
the Loans; provided that neither mass advertising (such as placing
advertisements on television, on radio, in magazines or in newspapers), nor
responding to an inquiry initiated by a borrower without active inducement
from Seller, shall constitute "direct solicitation" in violation of this
covenant.
6.3. Maintenance of Seller's Status; Successors. Seller will keep in
------------------------------------------
full effect its existence, rights and franchises as a corporation under the
laws of the state of its incorporation, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction
in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, or any of the Loans and to
perform its duties under this Agreement. Any person or entity into which
Seller may be merged or consolidated, or any corporation resulting from any
merger, conversion or consolidation (including, without limitation, by
means of the sale of substantially all of the Seller's assets to such
corporation) to which the Seller shall be a party, or any person or entity
succeeding to the business of the Seller, shall be the successor of the
Seller hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding; provided, however, that the successor or
surviving entity shall have a net worth of at least $25 million and shall
not cause a rating on any security backed by a Loan to be downgraded by any
rating agency of recognized standing.
-15-
7. Survival of Representations, Warranties and Covenants. All of the
-----------------------------------------------------
representations, warranties and covenants contained in Paragraphs 5 and 6 of
this Agreement shall survive Closing for all purposes.
8. Breach of Representations and Repurchase:
----------------------------------------
8.1. Remedy for Breach. In addition to rights or remedies Buyer may
-----------------
have at law or in equity, if at any time any material representation or
warranty set forth in this Agreement proves to be inaccurate or incomplete
in any material respect, or if any signature, name, address, amount, Loan
balance or other statement of fact appearing on the Note, Security
Instrument or Related Documentation is not true and correct or the obligors
and guarantors named thereon are not of majority age, or do not have legal
capacity to enter into the transaction purported to be governed thereby,
and provided Buyer has not modified or altered the terms of the relevant
obligation so as to materially impair the collectibility thereof, Seller
shall, upon demand of Buyer, either (a) cure the defect within thirty (30)
days; provided, that if such defect is curable, Seller has commenced to
cure such defect within ten (10) days after its receipt of Buyer's demand,
and thereafter Seller vigorously and continuously prosecutes such cure to
completion, such thirty (30) day period shall be extended for an additional
sixty (60) days if, during such sixty (60) day period each of those
conditions is met, and thereafter for additional successive periods of
sixty (60) days so long as each of such conditions continues to be met and
Seller has obtained Buyer's written consent to each such additional cure
period, such consent of Buyer not to be unreasonably withheld, conditioned
or delayed, or (b) repurchase the Loan affected by such defect for the Buy-
Back Price (as that term is defined in Paragraph 8.3 below), such
obligation of Seller to survive the Closing.
8.2. Reassignment. Upon receipt of the Buy-Back Price, in full, in
------------
immediately available funds, Buyer shall reassign the Loan to Seller free
and clear of all liens, encumbrances, claims or interests of any person or
entity (except those that existed at the time that the Loan was assigned to
Buyer), without recourse, and shall execute and deliver to the Seller an
assignment of Buyer's interest in the Loan, as well as other documents
necessary to reflect the reassignment of any insurance policies.
8.3. Buy-Back Price. The term "Buy-Back Price" shall mean an amount
--------------
equal to the sum of (i) the product of the Purchase Price (including any
premium) paid for the Loan by Buyer multiplied by the quotient obtained by
dividing (x) the then outstanding principal balance of the Loan by (y) the
outstanding principal balance of the Loan at the time it was purchased by
Buyer pursuant to this Agreement, plus (ii) all amounts reasonably paid or
incurred by Buyer with respect to or reasonably allocable to the Loan
(including amounts reasonably paid to preserve the collateral securing
repayment of the Loan) and not previously reimbursed to Buyer from any
source, plus (iii) all accrued but unpaid interest on the amounts described
in clauses (i) and (ii) hereof, computed at the rate at which interest
accrues on the Loan from time to time. [Seller still reviewing 8.3]
8.4. Indemnity by Seller. Seller shall indemnify, defend and hold
-------------------
harmless Buyer from and against any and all losses, damages, liabilities,
costs, claims and expenses (including attorneys' fees and costs) arising
from or related to any untruth or inaccuracy in any representation or
warranty of Seller, act or omission of Seller, or violation of any law or
regulation in connection with the origination (or other handling of the
Loan prior to the Closing Date) of any Loan.
8.5. Indemnity of Buyer. Buyer shall indemnify, defend and hold Seller
------------------
harmless against any and all losses, damages, liabilities or expenses
(including attorneys' fees and costs) arising from any act or omission of
Buyer, or violation of any law or regulation in connection with the
handling by Buyer of any Loan after Closing Date.
-16-
8.6. Tender of Defense. Before asserting any claim or pursuing any
-----------------
remedy provided in this Paragraph 8, the indemnified party shall give the
indemnifying party fifteen (15) days prior written notice of any event for
which indemnity may be required or requested and an opportunity, by tender
of defense where applicable, to cure or defend the action or alleged
breach, misrepresentation, or other claim; provided such defense shall be
with counsel reasonably acceptable to the indemnified party. Additionally,
without the prior written consent of the indemnifying party, which consent
shall not be unreasonably withheld, the indemnified party shall not settle
or compromise any claim for which the indemnified party seeks indemnity
hereunder so long as the indemnifying party is performing its indemnity
responsibilities hereunder.
9. Buyer's Collection Rights.
-------------------------
9.1. Collections. Unless Buyer engages Seller in writing to act as
-----------
servicer of the Loans or some portion thereof, Buyer or another party
designated by Buyer shall have the sole right to make collections on all
Loans, and Seller shall execute and deliver to Buyer or another party
designated by Buyer and each obligor and guarantor of each Loan a notice in
a form satisfactory to Buyer advising each such party of the assignment and
directing all future payments made to Buyer. Seller will not solicit or
accept any collections with respect to any Loan sold to Buyer hereunder
unless requested to do so by Buyer in writing. Seller shall hold in trust
for the benefit of Buyer and promptly deliver to Buyer in the form
received, all checks, drafts, money orders, insurance proceeds and other
instruments relating to any Loan sold hereunder that may come into the
possession of Seller from and after the Cut-Off Date.
9.2. Limited Power of Attorney. Seller irrevocably constitutes and
-------------------------
appoints Buyers as its lawful attorney-in-fact, with the power to sign
Seller's name to all checks, money orders, drafts or payment of money
issued in connection with the Loans, to exercise all rights and remedies as
holder of the Loans, and to take all other acts with respect to the Loans
which Buyer deems proper to protect its rights hereunder.
10. Further Assurances. At any time and from time to xxxx Xxxxxx shall
------------------
take such further actions as Buyer reasonably deems to be necessary or desirable
to carry out the intent of this Agreement and the transactions contemplated
hereby, including, without limitation, the execution and delivery of such
agreements, documents, certificates, instruments and notifications as may be
necessary to evidence the vesting in Buyer of its rights, titles and interests
as contemplated by this Agreement.
11. Default by Obligor. In the event of any default by the obligor on any
------------------
Loan, Buyer shall have all rights against such defaulting obligor or its
guarantor, if any, provided for under the Loan Documents and permitted by law,
including, but not limited to, imposition of late charges, commencing of suit,
and/or foreclosure. Buyer may, in its sole discretion, and without the consent
of Seller grant extensions, and other indulgences in the collection of all Loan
payments and other sums due or to become due under the Loans. The foregoing
shall be without limitation of Buyer's other rights under this Agreement or as
provided by law.
12. Notices. Any notices or other communications with respect to the
-------
matters set forth in this Agreement shall be in writing and shall be delivered
to the parties at the following addresses, or such other address or addresses as
may be specified in a notice served in accordance herewith:
-17-
If to Seller: Southern Pacific Bank
00000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xx. Xxxxxxx X. Xxxxxxxxx
Telephone: 310/000-0000
Telefax: 310/442-5160
With a copy to: Xxxxx & Wood, LLP
Xxx Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxxx, Esq.
Telephone: 212/000-0000
Telefax: 212/839-5598
If to Buyer: Imperial Credit Commercial Mortgage Investment Corp.
00000 Xxxxxxxx Xxxx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xx. Xxxx Xxxxxx
Telephone: 310/000-0000
Telefax: 310/231-1281
All such notices may be hand delivered to the addresses, sent by certified U.S.
mail, with return receipt requested and postage prepaid, sent by overnight
courier, or sent by facsimile transmission with an original copy mailed the same
day, and shall be deemed received upon the earlier of actual receipt by the
addressee or four (4) business days from the date so sent.
13. Independent Contractors. This Agreement shall not be deemed to
-----------------------
constitute the parties hereto as partners or joint venturers, nor shall any
party be deemed to constitute the other party as its agents.
14. Entire Agreement. This Agreement (including the Schedules and Exhibits
----------------
annexed hereto or referred to herein) and the documents submitted in connection
herewith contain the entire Agreement among the parties hereto with respect to
the subject matter hereof and supersedes any and all prior arrangements,
proposals or understandings, written or oral, by or between the parties hereto
with respect to all transactions contemplated under this Agreement. In the event
of any conflict or inconsistency between any provision of this Agreement and any
provision of any other document or writing executed by Buyer and Seller, the
provision of this Agreement shall take precedence and shall control, unless the
conflicting or inconsistent provision in such other document or writing
specifically refer to this Agreement and specifically state that it shall
prevail. No amendment or modification of this Agreement shall be effective for
any purpose unless the same in writing and duly executed by the parties hereto.
15. Successors. This Agreement shall bind and benefit the respective
----------
successors and assigns of Buyer and Seller. No other person or entity is
intended to be benefited hereby.
16. Remedies Cumulative. The rights and remedies of the parties hereunder
-------------------
shall be cumulative and Buyer may exercise any right or remedy, whether against
the Borrowers under Loans, guarantors or the security thereof, any sums withheld
or retained by Seller hereunder, Seller, or any combination of the foregoing, in
such order as Buyer shall determine in its absolute discretion without thereby
releasing any other right Buyer may have.
17. Amendment; Waiver. This Agreement may be amended, superseded,
-----------------
canceled, renewed or extended and the terms hereof may be waived, only by a
written instrument signed by authorized representatives of the parties or, in
the case of a waiver, by an authorized representative of the party waiving
compliance. No such written instrument shall be effective unless it expressly
recites that it is intended to amend, supersede, cancel, renew or extend this
Agreement or to waive compliance with one or more of the terms hereof, as the
case may be. Buyer's omission or delay to exercise any of its optional or
absolute rights or remedies, or other rights, powers or privileges, under this
Agreement shall not constitute a waiver by Buyer, nor operate to bar Buyer from
the exercise of any such rights, powers or privileges. Any waiver of
-18-
Buyer of any default, right, power or privilege shall not operate as a waiver of
any other subsequent default, right, power or privilege, respectively. The
rights and remedies herein provided are cumulative and are not exclusive of any
rights or remedies that any party may otherwise have at law or in equity.
18. Choice of Law. The validity of this Agreement, its construction,
-------------
interpretation and enforcement, and the rights of the parties hereunder, shall
be determined under, governed by and construed in accordance with the laws of
the State of California.
19. Interpretation of Agreement.
---------------------------
19.1. Number, Gender. The terms defined in this Agreement have the
--------------
meanings assigned to them in this Agreement and include the plural as well
as the singular, and the use of any gender herein shall be deemed to
include the other gender.
19.2. Accounting Terms. Accounting terms not otherwise defined herein
----------------
have the meanings assigned to them in accordance with generally accepted
accounting principles.
19.3. References to Paragraphs, etc. References herein to "Articles",
-----------------------------
"Sections", "Paragraphs", and other subdivisions without reference to a
document are to designated Paragraphs and other subdivisions of this
Agreement, unless the context shall otherwise require.
19.4. Construction of Certain Terms. The words "herein", "hereof",
-----------------------------
"hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular provision, and the term "include" or
"including" shall mean "include without limitation" and "including without
limitation."
19.5. Fully Negotiated Agreement. Neither this Agreement nor any
--------------------------
uncertainty or ambiguity herein or of any provision hereof shall be
construed or resolved against Buyer or Seller, whether under any rule of
construction or otherwise. The terms and conditions contained in this
Agreement have been fully negotiated and reviewed by all parties and their
respective counsel, and shall be construed and interpreted according to the
ordinary meanings of the words used so as to fairly accomplish the purposes
and intentions of all parties hereto.
19.6. Headings and Captions. All section headings and captions
---------------------
contained in this Agreement or in any Schedule or Exhibit annexed hereto or
referred to herein are for convenience only, shall not be deemed a part of
this Agreement and shall not affect the meaning or interpretation of this
Agreement.
20. Severability of Provisions. Any provision of this Agreement which is
--------------------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
21. Counterparts. This Agreement may be executed in any number of
------------
counterparts, and by the different parties hereto on the same or separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original instrument and all of which counterparts, taken
together, shall constitute one and the same Agreement.
22. Setoff. Buyer hereby irrevocably and unconditionally waives all
------
rights of setoff that it may have under contract (including this Agreement),
applicable law or otherwise with respect to any funds or moneys of Seller at any
time held by or in the possession of Buyer.
-19-
23. Amendment. Any provision of this Agreement may be amended,
---------
supplemented, restated, discharged, waived or terminated, in writing duly
executed by Seller and Buyer.
24. Attorneys' Fees. If any legal action, arbitration or other proceeding
---------------
is brought for the enforcement or interpretation of this Agreement, or because
of an alleged dispute, breach, default or misrepresentation in connection with
any of the provisions of this Agreement, the successful or prevailing party or
parties shall be entitled to recover reasonable attorneys' fees and any other
relief to which it or they may be entitled. The court or arbitrator before which
such action or proceeding is brought shall determine which party is the
successful or prevailing party within the meaning of this section, taking into
account all bona fide settlement offers of all parties, and such determination
shall be binding upon the parties hereto.
25. Arbitration. Any dispute between the parties arising out of or by
-----------
reason of this Agreement or regarding its construction shall be submitted for
arbitration in Los Angeles, California, and shall be settled in accordance with
the rules and regulations then existing of the American Arbitration Association,
to which shall be added the provisions of the California Civil Discovery Act.
Judgment upon any award rendered in such proceedings may be obtained by either
party in any court of competent jurisdiction.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their respective duly authorized representatives on the date first
above set forth.
Buyer: IMPERIAL CREDIT COMMERCIAL MORTGAGE
INVESTMENT CORP., a Maryland corporation
By_______________________________________
Seller: SOUTHERN PACIFIC BANK, a California
corporation
By_______________________________________
IMPERIAL CREDIT INDUSTRIES, INC. has executed and delivered this Agreement
in the space indicated below solely to confirm its representation, warranty and
covenant set forth in Paragraph 5.3 above. IMPERIAL CREDIT INDUSTRIES, INC. has
so executed and delivered this Agreement solely for the purpose of inducing
Buyer to enter into this Agreement, with the intent that Buyer rely on the
representation, warranty and covenant of IMPERIAL CREDIT INDUSTRIES, INC. set
forth in said Paragraph 5.3, and with the understanding and expectation that
Buyer will rely thereon.
ICII: IMPERIAL CREDIT INDUSTRIES, INC., a
California corporation
By_______________________________________
-20-
EXHIBIT A
[ATTACH LOAN TAPE]
-21-
