Exhibit 10.5
THIS INITIAL INVESTMENTS SALE AGREEMENT (this "Agreement"), dated as of
October 22, 1997, by and between Imperial Credit Commercial Mortgage
Investment Corp., a Maryland corporation (the "Purchaser") and Imperial
Credit Industries, Inc., a California corporation (the "Seller"), recites
and provides as follows:
RECITALS
WHEREAS, the Seller owns certain commercial mortgage-backed securities
identified on Schedule 1 hereto (the "Initial Investments");
WHEREAS, the Seller desires to sell its right, title and interest in and
to the Initial Investments to the Purchaser pursuant to the terms hereof;
WHEREAS, capitalized terms used and not defined herein shall have the
meanings assigned to them in the Purchaser's Prospectus, dated October 16,
1997 (the "Prospectus");
AGREEMENT
NOW THEREFORE, in consideration of the premises and the mutual covenants,
representations and warranties herein made and other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION 1. Sale and Purchase.
(a) The Seller hereby sells, conveys, assigns and transfers, and the
Purchaser hereby purchases, all of the Seller's right, title and interest in
and to the Initial Investments, having the respective outstanding principal
balances as of the close of business on September 25, 1997 (the
"Information Date") set forth on Schedule 1, including the Seller's right
to any and all payments to be received on the Initial Investments beginning
in October 1997;
(b) The sale of the Initial Investments shall be effected by endorsement
and delivery of the Initial Investments.
SECTION 2. Purchase Price. On the Closing Date, as full consideration
for the Seller's sale of the Initial Investments to the Purchaser, the
Purchaser shall deliver to the Seller immediately available funds in the
amount of $49,302,009, which equals the aggregate of the purchase prices of
the related Classes of Certificates set forth on Schedule I hereto, plus
accrued interest from October 1, 1997. The Seller shall deliver to the
Purchaser in immediately available funds the full amount of the distribution
that will be payable on such Initial Investments on October 25, 1997, on the
same day that such amount is paid to the Seller.
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SECTION 3. Transfer of the Initial Investments and Endorsement of the
Initial Investments. Upon the closing of the sale of the Initial
Investments to the Purchaser by the Seller, ownership thereof shall be
vested in the Purchaser. As soon as possible prior to the Closing Date of
the sale of the Initial Investments to the Purchaser, the Seller shall
deliver to LaSalle National Bank, as trustee (the "Underlying Trustee") of
the underlying trusts pursuant to which the Initial Investments were issued
(the "Underlying Trusts"), the Initial Investments together with bond
powers executed in favor of "IMPERIAL CREDIT COMMERCIAL MORTGAGE INVESTMENT
CORP." and any transferor documents and opinions of counsel required by the
pooling and servicing agreements or other documents (the "Underlying
Agreements") under which the Initial Investments were issued.
SECTION 4. Representations and Warranties of the Seller. The Seller
hereby represents and warrants to the Purchaser, as of the date of this
Agreement or as of such other date as is specifically provided herein, as
follows:
(a) the Seller acquired the Initial Investments in the ordinary course
of its business, in good faith, for value and without notice of any claim
against or claim to any of the Initial Investments on the part of any
person;
(b) the Seller does not have any actual or constructive knowledge or
notice of any interest in the Initial Investments that upon sale to the
Purchaser and transfer in accordance herewith will be contrary to the
interest of the Purchaser;
(c) the Seller is duly organized and validly existing and in good
standing under the laws of the United States and has the full power,
authority and legal right to transfer and convey the Initial Investments to
the Purchaser and has the full power, authority (corporate and other) and
legal right to execute and deliver, engage in the transactions contemplated
by, and perform and observe the terms and conditions of, this Agreement;
(d) the execution and delivery by the Seller of this Agreement are
within the legal power of and have been duly authorized by all necessary
action on the part of the Seller; neither the execution and delivery of this
Agreement by the Seller, nor the consummation by the Seller of the
transactions contemplated hereby, nor compliance by the Seller with the
provisions hereof, will (i) conflict with or result in a breach of, or
constitute a default under, any of the provisions of the charter or bylaws
of, or any law, governmental rule or regulation, or any judgment, decree or
order binding on, the Seller or its properties, or any of the provisions of
any indenture, mortgage, deed of trust, contract or other instrument to
which it is a party or by which it is bound, or (ii) result in the creation
or imposition of any lien, charge or encumbrance upon any of its properties
pursuant to the terms of any such indenture, mortgage, deed of trust,
contract or other instrument;
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(e) this Agreement has been duly executed and delivered by the Seller
and constitutes a legal, valid and binding agreement of the Seller,
enforceable in accordance with its terms subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency or other
similar laws affecting creditors' rights generally from time to time in
effect, and to general principles of equity;
(f) no consent, approval, authorization or order of or registration or
filing with, or notice to, any governmental authority or court is required
for the execution, delivery and performance of or compliance by the Seller
with this Agreement or the consummation by the Seller of any other
transaction contemplated hereby;
(g) no certificate of an officer furnished pursuant hereto in writing
to the Purchaser or the Trustee by the Seller contains any untrue statement
of a material fact, or omits a material fact necessary to make the
certificate not misleading;
(h) the Seller has not dealt with any broker, investment banker, or
agent or other person that may be entitled to any commission or compensation
in connection with the sale of the Initial Investments to the Purchaser;
(i) there is no litigation pending or, to the Seller's knowledge,
threatened against the Seller, which would reasonably be expected to affect
adversely the transfer of the Initial Investments or the execution,
delivery, performance or enforceability of this Agreement;
(j) no default exists on the part of the Seller, and no event has
occurred which, with notice, lapse of time or both, would constitute a
default on the part of the Seller in the due performance and observance of
any term, covenant or condition of any agreement to which the Seller is a
party or by which it is bound, which default would have a have a materially
adverse effect on the Seller's performance of this Agreement;
(k) the transfer of the Initial Investments to the Purchaser will be
classified as a sale under generally accepted accounting principles on the
books and records of the Seller;
(l) immediately prior to the sale of the Initial Investments to the
Purchaser, the Seller will be the sole owner of, and will have good and
marketable title to, the Initial Investments, subject to no prior lien,
mortgage, security interest, pledge, charge or other encumbrance or any such
encumbrance will be discharged, and on the Closing Date, the Seller shall
duly and validly endorse the Initial Investments as described in Section 3
hereof and deliver the Initial Investments as described in Section 3 hereof,
together with any other documents or certificates as may be required by this
Agreement. Following the sale of the Initial Investments to the Purchaser,
the Purchaser will own such Initial Investments free and clear of any prior
lien, mortgage, security interest, pledge, charge or other encumbrance;
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(m) the transfer, assignment and conveyance of the Initial Investments
by the Seller pursuant to this Agreement is not subject to bulk transfer
laws or any similar statutory provisions in effect in any applicable
jurisdiction;
(n) the information set forth in Schedule 1 hereto is true and correct
in all material respects as of the Information Date;
(o) all conditions precedent and any restrictions upon the transfer of
the Initial Investments provided for in the Underlying Agreements have been
satisfied and the transfer of the Initial Investments to the Purchaser will
be complete upon the execution and delivery of this Agreement by the parties
hereto (provided that transfer of registered ownership will only be complete
after the Underlying Trustees have issued new certificates, representing the
Initial Investments, registered in the name of the Purchaser);
(p) the Seller intends to relinquish all ownership rights in the
Initial Investments sold pursuant to this Agreement; after the Closing Date,
the Seller will have no right to the Initial Investments, and the Seller
will have no right or obligation to repurchase or substitute any Initial
Investments;
(q) the Seller's principal place of business and chief executive office
are located in Los Angeles, California; and
(r) the Seller is not a "benefit plan investor" described in or
subject to the Department of Labor Regulations set forth in 29 C.F.R.
section 2510.3-101.
SECTION 5. The Seller hereby covenants to the Purchaser as follows:
(a) the Seller shall reflect and treat its transfer of the Initial
Investments to the Purchaser as a sale of its entire interest therein under
generally accepted accounting principles; and
(b) the Seller will cooperate with the Purchaser and perform all acts
necessary to enable the Purchaser to cause the Initial Investments to be
registered in the name of the Purchaser.
SECTION 6. Representations, Warranties and Covenants of the Purchaser.
As of the date of this Agreement, the Purchaser represents and warrants to
the Seller as follows:
(a) the Purchaser has been duly incorporated and is validly existing
and in good standing under the laws of the State of Maryland;
(b) the execution and delivery by the Purchaser of this Agreement are
within the legal power of the Purchaser and have been duly authorized by all
necessary action on the part of the Purchaser; neither the execution and
delivery of this Agreement by the Purchaser, nor the consummation by the
Purchaser of the transactions contemplated hereby, nor compliance by the
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Purchaser with the provisions hereof, will (i) conflict with or result in a
breach of, or constitute a default under, any of the provisions of the
Purchaser's articles of incorporation or bylaws, or any law, governmental
rule or regulation, or any judgment, decree or order binding on, the
Purchaser or its properties, or any of the provisions of any indenture,
mortgage, deed of trust, contract or other instrument to which it is a party
or by which it is bound, or (ii) result in the creation or imposition of any
lien, charge or encumbrance upon any of its properties pursuant to the terms
of any such indenture, mortgage, deed of trust, contract or other
instrument;
(c) this Agreement has been duly executed and delivered by the
Purchaser and constitutes a legal, valid and binding agreement of the
Purchaser, enforceable in accordance with its terms, subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency or other similar laws affecting creditors' rights generally from
time to time in effect, and to general principles of equity; and
(d) no consent, approval, authorization or order of any court or
governmental agency or body or official is required for the consummation by
the Purchaser of the transactions contemplated hereby, except such as have
been obtained.
SECTION 7. Further Assurances. Upon request from time to time, the
Seller shall execute and deliver all documents, make all truthful oaths,
testify in any proceedings and do all other acts that may be reasonably
necessary or desirable, in the reasonable opinion of the Purchaser, to carry
out the terms of this Agreement and to effect the sale of the Initial
Investments to the Purchaser.
SECTION 8. Conditions to Obligations of the Purchaser. The obligation of
the Purchaser hereunder to purchase the Initial Investments is subject to:
(a) the accuracy in all material respects of all of the representations
and warranties of the Seller under this Agreement and compliance in all
material respects by the Seller with all of its covenants and obligations
under this Agreement;
(b) except as otherwise provided herein, the Seller shall have
delivered to the Purchaser, in escrow, all documents required to be
delivered hereunder and shall have released its interest therein to the
Purchaser or its designee; and
(c) the Seller shall have delivered to the Purchaser, letters from each
of the legal counsel that delivered opinions (the "Underlying Opinions")
in connection with the issuance of the Initial Investments pursuant to the
Underlying Agreements, which letters permit reliance on the Underlying
Opinions by (i) the Purchaser and (ii) each of Friedman, Billings, Xxxxxx &
Co., Inc. and Xxxxxxxxx & Company, Inc., as representatives of the
underwriters of the Purchaser's shares of common stock, which are being sold
pursuant to the Prospectus.
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SECTION 9. Conditions to Obligations of the Seller. The obligation of
the Seller hereunder to sell the Initial Investments is subject to receipt
of the Purchase Price in immediately available funds.
SECTION 10. Indemnification; Assignment of Claims. In the event the
Seller breaches its representations, warranties, covenants or obligations
set forth herein in any material respect, the Seller shall indemnify and
hold harmless the Purchaser from and against any loss, damages, penalties,
fines, forfeiture, legal fees and related costs, judgments, and other costs
and expenses resulting from any claim, demand, defense or assertion based on
or grounded upon, or resulting from, such breach. Promptly after receipt by
the Purchaser of notice of the commencement of any such action, the
Purchaser will, if a claim in respect thereof is to be made against the
Seller under this Section, notify the Seller in writing of the commencement
thereof, but the omission so to notify the Seller will not relieve the
Seller from any liability hereunder unless such omission materially
prejudices the rights of the Seller. In case any such action is brought
against the Purchaser, and the Purchaser notifies the Seller of the
commencement thereof, the Seller will be entitled to participate therein,
and to assume the defense thereof, with counsel reasonably satisfactory to
the Purchaser, and after notice from the Seller to the Purchaser of its
election so to assume the defense thereof, the Seller will not be liable to
the Purchaser under this Section for any legal or other expenses
subsequently incurred by the Purchaser in connection with the defense
thereof other than reasonable costs of investigation.
SECTION 11. Repurchase Obligation. It is understood and agreed that the
representations and warranties set forth in Section 4 herein shall survive
delivery of the Initial Investments to the Purchaser, and shall inure to the
benefit of the Purchaser notwithstanding any restrictive or qualified
endorsement or assignment. Upon the discovery by a party hereto of a breach
of any of the foregoing representations and warranties that materially and
adversely affects the interests of the Purchaser, the party discovering such
breach shall give prompt written notice to the other parties thereto,
whereupon the Seller shall promptly take such action as is necessary to cure
such breach. Within 90 days of its discovery or its receipt of notice of
any breach of the representations and warranties contained in Section 4
above, the Seller shall cause such breach to be cured in all material
respects or, in the event the Seller is unable to cure such breach, the
Seller shall repurchase the affected Initial Investment at its Purchase
Price plus accrued interest through the date of repurchase and reimburse the
Purchaser for any out-of-pocket loss incurred by the Purchaser as a result
of such breach.
The obligations of the Seller set forth in this Section 11 with respect to
a breach of a representation contained in Section 4 hereof shall constitute
the sole remedy respecting such breach available to the Purchaser.
SECTION 12. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
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transmitted by telex or telegraph and confirmed by a similar mailed writing,
as follows:
(a) If to the Purchaser:
Imperial Credit Commercial Mortgage Investment Corp.
00000 Xxxxxxxx Xxxx., Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxxx Xxxxxxx, Esq.
(b) If to the Seller:
Imperial Credit Industries, Inc.
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxxx, Esq.
Any party may alter the address to which communications or copies are to
be sent by giving notice of such change of address in conformity with the
provisions of this Section for the giving of notice.
SECTION 13. Severability of Provisions. Any part, provision,
representation or warranty contained in this Agreement that is prohibited or
that is held to be void or unenforceable shall be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
parts, provisions, representations or warranties hereof. Any part,
provision, representation or warranty contained in this Agreement that is
prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
parts, provisions, representations or warranties hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the
extent permitted by applicable law, the parties hereto waive any provision
of law which prohibits or renders void or unenforceable any provision
hereof.
SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA,
NOTWITHSTANDING ANY CALIFORNIA OR OTHER CONFLICT OF LAWS PROVISIONS TO THE
CONTRARY.
SECTION 15. Survival. Each of the Seller and the Purchaser agrees that
the representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed
have been relied upon by the Purchaser or the Seller, respectively,
notwithstanding any investigation heretofore or hereafter made by the other
party or on the other party's behalf, and that the representations,
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warranties and agreements made by the Seller herein or in any such
certificate or other instrument shall survive the delivery of and payment
for the Initial Investments.
SECTION 16. Miscellaneous.
(a) This Agreement may be executed in two or more counterparts, each of
which when so executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns.
(b) Any person into which the Seller may be merged or consolidated or any
person resulting from a merger or consolidation involving the Seller or any
person succeeding to the business of the Seller shall be considered the
successor of the Seller hereunder, without the further act or consent of
either party. This Agreement cannot be assigned, pledged or hypothecated by
any party without the written consent of each other party to this Agreement.
(c) This Agreement supersedes all prior agreements and understandings
relating to the subject matter hereof. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought. The headings in this
Agreement are for purposes of reference only and shall not limit or
otherwise affect the meaning hereof.
(d) The Purchaser shall immediately effect the redelivery of the Initial
Investments, and any security interest deemed to be created by this Section
16 shall be released if, on the Closing Date, each of the conditions set
forth in Section 8 hereof shall not have been satisfied or waived and the
Purchaser shall not have paid the Purchase Price.
(e) It is the express intent of the parties hereto that the conveyance of
the Initial Investments by the Seller to the Purchaser as contemplated by
this Agreement be construed as a sale of the Initial Investments by the
Seller to the Purchaser. Further, it is not the intention of the parties
that such conveyances be deemed a pledge of the Initial Investments by the
Seller to the Purchaser to secure a debt or other obligation of the Seller.
However, in the event that, notwithstanding the intent of the parties, the
Initial Investments are held to continue to be property of the Seller, then
(i) this Agreement shall also be a security agreement within the meaning of
the Uniform Commercial Code of the State of California and any other state
as is necessary; (ii) the Seller hereby grants to the Purchaser a security
interest in all of the Seller's right, title and interest in and to the
Initial Investments; (iii) the possession by the Purchaser or its agent of
the Initial Investments and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to
be "possession by the secured party" for purposes of perfecting the
security interest pursuant to Section 9-305 of the Uniform Commercial Code
of the State of California; and (iv) notifications to, and acknowledgments,
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receipts or confirmations from, persons holding such property shall be
deemed notifications to, or acknowledgments, receipts or confirmations from,
financial intermediaries, bailees or agents (as applicable) of the Purchaser
for the purpose of perfecting such security interest under applicable law.
Any assignment of the interest of the Purchaser pursuant to any provision
hereof shall also be deemed to be an assignment of any security interest
created hereby. The Seller and the Purchaser shall, to the extent
consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in
the Initial Investments, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will
be maintained as such throughout the term of this Agreement.
IN WITNESS WHEREOF, Imperial Credit Commercial Mortgage Investment Corp.
and Imperial Credit Industries, Inc. have caused their names to be signed to
this Initial Investment Sales Agreement by their respective officers
thereunto duly authorized as of the first date above written.
IMPERIAL CREDIT COMMERCIAL MORTGAGE INVESTMENT CORP.,
a Maryland corporation
By: /s/ Xxxx X. Xxxxxx
Its: President
IMPERIAL CREDIT INDUSTRIES, INC.,
a California corporation
By: /s/ Xxxxx Xxxxxxx
Its: Chief Financial Officer
LIST OF SCHEDULES AND EXHIBITS
SCHEDULE I: Initial Investments
SCHEDULE 1
Initial Investments
Series
Class / Original Principal Purchase Proceeds Accrued Gross
Principal Balance or Price Interest Proceeds
Balance or Notional
Notional Amount
Amount (As of
September
25, 1997)
X.X. Xxxxxx Commercial Mortgage Finance Corp.,
Commercial Mortgage Pass-Through Certificates, Series 1997-SPTL-C1
X2 40,689,605 39,738,361 13.8800% 5,517,558 180,589 5,698,147
