EXHIBIT 10.27
March 10, 2004
Sunset Financial Resources, Inc.
0000 Xxxxxx Xxxx, Xxxxx 0-X
Xxxxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
Bridge Capital (USVI), LLC ("Bridge") hereby agrees to sell to Sunset Financial
Resources, Inc. ("Purchaser") and Purchaser hereby agrees to purchase from
Bridge the undivided Participation Interests (herein so called) listed on
Exhibit A attached hereto and incorporated herein by reference, subject to the
following terms and conditions:
PURCHASE PRICE: The purchase price for each Participation
Interest shall be equal to the outstanding principal
balance of the underlying loan on the date of closing
pro rated in accordance with Bridge's ownership
interest in such loan.
RECOURSE: The Participation Interests shall be conveyed to
Purchaser without recourse as to the future
performance of any borrower.
EXCEPTIONS FROM
CONVEYANCE: Bridge shall reserve from the conveyance of each
Participation Interest all servicing rights on all
underlying loans and all rights to receive all
interest and fees realized on the underlying loans in
excess of interest at the rate of 10% per annum. All
conveyances of Participation Interests shall be
subject to any existing third party participation
agreements.
DUE DILIGENCE
DOCUMENTATION: Within five (5) days of the date of this letter,
Bridge shall provide to Purchaser the following
documents:
1. Copy of original note
2. Copy of all collateral documents including
original mortgage or deed of trust
3. Amortization table
4. Copy of mortgagee's title policy
5. Copy of borrower's certificate of hazard
insurance
6. Payment history (affidavit form)
7. Copies of all underlying notes, mortgages,
deeds of trust, and/or other liens, along
with payoff amounts for each.
8. Copy of original closing statement
9. Photos of real property (if any)
10. Borrowing resolution
11. Copy of legal opinion
12. Copy of any third party participation
agreement.
DOCUMENTATION: At Closing Bridge and Purchaser shall execute and
deliver a Master Acceptance Agreement and
Participation Agreements for each Participation
Interest in form and substance reasonably
satisfactory to Bridge and Purchaser. The obligations
of Bridge and Purchaser hereunder are subject to the
closing of the initial public offering of Purchaser's
common stock.
CLOSING: Unless this agreement shall be extended in writing by
Bridge and Purchaser, the Closing of the transactions
contemplated herein shall occur on or before March
31, 2004, at which time the obligations of the
parties hereunder shall terminate. In the event that
Purchaser fails to close on any Participation
Interest listed on Exhibit A and presented by Bridge
for conveyance, then Xxxxxxxxx agrees to reimburse
Bridge for all costs and expenses incurred by Bridge
in connection with the documentation of such
Participation Interest, including, without
limitation, reasonable attorneys fees.
BRIDGE CAPITAL (USVI), LLC
By: /s/ Xxxx X. Xxxxxxx
--------------------------------
Title: Manager
AGREED:
SUNSET FINANCIAL RESOURCES
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------------
Title: Secretary and Executive Vice President-
Compliance and Operations
EXHIBIT "A"
FACE AMOUNT
BORROWER/LOCATION/COLLATERAL OF LOAN BRIDGE INTEREST
---------------------------- ------- ---------------
Pacific Islandia California, Inc., Anaheim, $23,000,000 50% Participation Interest, pari passu
CA, First Lien Deed of Trust in Hotel Property with all other participants
Xxxxxx/KW Kohanaiki LLC, Kona, HI, First $15,000,000 Existing loan; Purchase of entire loan by
Mortgage in Mixed Use Development Bridge pending
RightStar International, Inc., HI, Mortgage in $34,000,000 20.3% Second Loss Participation Interest
Cemetery pari passu with Vestin Mortgage, Inc.
North Idaho Resorts, LLC, Pend Oreille, ID, $8,000,000 Pending loan to be 100% owned by Bridge
Deed of Trust Lien in Master Planned Community