Exhibit 10.3
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 22, 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 $104,000,000: and "Loan" means
one of such Loans.
1.4. "Purchase Price" shall mean $109,128,177.
2. Purchase and Sale of Loans; Right of First Offer.
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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 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
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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 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 described in this Paragraph 2.2.1 during such 12 month period from
(ii) $150 million, and 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
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seller, and such a seller would sell such Typical Loans to such a buyer, 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 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, and such a
seller would sell such remaining Typical Loans to such a buyer, 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:
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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 survive the
Closing of the sale of the Loans described in Exhibit A annexed to this
Agreement.
3. Payment of Purchase Price; Adjustments to 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. 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:
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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 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
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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 ▇▇▇▇ 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:
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
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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.
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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 Documentation and Ancillary Rights, is the legal, valid and binding
obligation of the parties thereto (subject to any nonrecourse 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; 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
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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);
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;
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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;
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
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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 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, canceled, 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;
12
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 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
13
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 coinsurer 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;
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
14
(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 Schedule 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
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
15
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
16
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 in 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, and
(v) providing to Buyer 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
17
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.
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
18
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 (i.e., the then outstanding principal
balance of the Loan plus the unamortized portion of any premium paid by
Buyer therefor), 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.
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.
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
19
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 ▇▇▇▇ ▇▇▇▇▇▇ 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:
20
If to Seller: Southern Pacific Bank
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: 310/▇▇▇-▇▇▇▇
Telefax: 310/442-5160
With a copy to: ▇▇▇▇▇ & Wood, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Telephone: 212/▇▇▇-▇▇▇▇
Telefax: 212/839-5598
If to Buyer: Imperial Credit Commercial Mortgage Investment Corp.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇
Telephone: 310/▇▇▇-▇▇▇▇
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.
21
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 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."
22
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.
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.
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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 /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Seller: SOUTHERN PACIFIC BANK, a California corporation
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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 /s/ H. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Exhibit A
[ATTACH LOAN TAPE]
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