INTERCREDITOR AGREEMENTIntercreditor Agreement |
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Lead Lenders and OWENS FINANCIAL GROUP, INC | VESTIN FUND I, LLC VESTIN FUND II, LLC | VESTIN FUND III, LLC | VESTIN ORIGINATIONS, INC, VESTIN MORTGAGE, INC | VESTIN REALTY MORTGAGE I, Inc | VESTIN REALTY MORTGAGE II, Inc. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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Exhibit 10.10
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT, dated as of October 13, 2006 (this "Agreement"), is entered into by and between VESTIN MORTGAGE, INC., a Nevada corporation ("Vestin"), VESTIN ORIGINATIONS, INC., a Nevada corporation ("Originations"), VESTIN REALTY MORTGAGE I, Inc., a Maryland corporation
("VRM I"), VESTIN REALTY MORTGAGE II, Inc., a Maryland corporation ("VRM II") and VESTIN FUND III, LLC, a Nevada limited liability company ("VF III") whose principal place of business and post office address is 8379 West Sunset Road, Las Vegas, Nevada. 89113, (individually, "Lead Lender, or collectively, "Lead Lenders" and OWENS FINANCIAL GROUP, INC.., a California corporation ("Owens Financial") and OWENS MORTGAGE INVESTMENT FUND, a California Limited Partnership ("Owens Mortgage Investment Fund") whose principal place of business and post office address is 2221 Olympic Boulevard, Walnut Creek, California 94595, (individually, a "Lender", or collectively, "Lenders")RECITALS:
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A. |
VRM I is a publicly traded Mortgage REIT that provides financing secured by deeds of trust or mortgages on real property. |
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B. |
VRM II is a publicly traded Mortgage REIT that provides financing secured by deeds of trust or mortgages on real property. |
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C. |
Vestin Fund III is a SEC registered direct participation program that provides financing secured by deeds of trust or mortgages on real property. |
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D. |
VESTIN is a duly formed Nevada corporation, and is responsible for the daily operations of VRM I and VRM II and is the Manager of VF III. |
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E. |
Originations is a licensed Mortgage Broker that arranges loans for the benefit of VRM I, VRM II, VF III and other commercial real estate lenders. |
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D. |
Owens Mortgage Investment Fund is a SEC registered public partnership that provides financing and owns notes secured by deeds of trust or mortgages on real property. |
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F. |
Owens Financial is the General Partner of Owens Mortgage Investment Fund. |
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G. |
Owens Financial and Owens Mortgage Investment Fund have agreed to fund a $20,000,000.00 portion of a $31,250,000.00 loan to Cliff Shadows Properties, LLC, a Nevada limited liability company, a loan originated by Originations. |
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H. |
The Lead Lenders and Lenders enter into this Agreement to, among other things, further define their respective rights, duties, authorities and responsibilities regarding their proposed shared interests in the and to define the priority of payment for all of the proceeds from the assigned participation in the loan. |
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and based upon the foregoing Recitals which are an integral part of this Agreement, as well as the mutual covenants and promises contained herein, Originations, Vestin, VRM 1, VRM II, VF III, Owens Financial, and Owens Mortgage Investment Fund hereby agree as follows:
SECTION 1. DEFINITIONS
Section 1.1. Definitions. All capitalized terms used in this Agreement shall have the meanings assigned to them below in this Section 1 or in the provisions of this Agreement referred to below:
"Agreement" shall mean this lntercreditor Agreement as amended, modified or restated in accordance with the terms hereof.
"Assignment" shall mean the actual recorded assignment of a specific percentage interest in a "Loan".
"Bankruptcy Proceeding" shall mean, with respect to any Person, a general assignment by such Person for the benefit of its creditors, or the institution by or against such Person of any proceeding seeking its relief as debtor, or seeking to adjudicate such Person as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or composition of such Person or its debts, under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking appointment of a receiver, trustee, custodian or other similar official for such Person or for any substantial part of its property.
"Borrowers" shall mean any person or entity that obligates itself or its property as security for a "Loan".
"Collateral" shall mean all the real and personal property collateral under the Loan Documents.
"Default" shall mean any event or condition, the occurrence of which would, with the lapse of time or the giving of notice, or both, pursuant, to the "Loan Documents" constitute an Event of Default.
"Interest Rate" shall mean the rate of interest paid to Owens Financial or Owens Mortgage Investment Fund for their "Participation Interest" in the "Loan". This rate shall be a fixed rate of Eleven Percent (11.0%) for the duration of the Loan.
"Late Charges" shall mean the late charges and or default rate charged to Borrowers in the event of default or late payments under the "Loan Documents".
"Lead Lender and Lead Lenders" shall mean Originations, Vestin, VRM I, VRM II, VF III or any successor lead lender.
"Lender and Lenders" shall mean Owens Financial or Owens Mortgage Investment Fund or their assignee.
"Loan Documents" shall mean of all the various notes, deeds of trusts, guarantees, title policies, security agreements, loan agreements, assignment of rents and profits, and whatever documents are in existence to protect and secure the repayment of the Borrowers obligations under the note.
"Loan" shall mean the note, and all of the documents and agreements that evidence and secure the debt of the "Borrowers".
"Priority of Payment" shall mean the order in which payments are made to the
"Lead Lender" and to the "Lender".
"Participation Interest" shall signify amount in dollars of the "Assignment" owned by Owens Financial and Owens Mortgage Investment Fund in the "Loan".
1.2 Effectiveness of this Agreement The effectiveness of this Agreement is conditioned upon (a) the execution and delivery of this Agreement by the Lead Lenders and the Lenders, (b) the execution, delivery and effectiveness of the Loan Documents by the Lead Lenders, and the payment of the Participation Interest by Lenders to the Lead Lenders.
SECTION 2. RELATIONSHIP AMONG LENDERS
2.1 Restrictions on Actions. Lead Lenders agree that, so long as any portion of a Loan is outstanding or unpaid they shall, for the benefit of Lenders, except as permitted under this Agreement:
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(a) |
Notify Lenders before taking or filing any action, judicial or otherwise, to enforce any rights or pursue any remedy under the Loan Documents, except for delivering notices hereunder. |
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(b) |
Refrain from (1) selling any portion of the Loan to the Borrowers or any affiliate of the Borrowers and (2) accepting any substitute guaranty or any other security for, the Loan from the Borrowers or any Affiliate of the Borrowers, without Lenders consent. In the event Lender refuses to consent to such requested action, Lead Lenders shall be entitled to either repurchase Lenders Participation Interest for the amount of principal and accrued interest outstanding or offer the Lenders a Substitution of Security. |
2.2 Representations and Warranties. Lead Lenders and Lenders represent and warrant to each other that:
(a)
It (1) is a legal entity duly organized, existing and in good standing under the laws and governmental authority of the jurisdiction of its domicile, and (ii) has all requisite corporate power to own its property and conduct its business as now conducted and as presently contemplated.(b)
The execution, delivery and performance by such Lead Lenders or Lenders of this Agreement has been authorized by all necessary proceedings (corporate or otherwise) and does not and will not contravene any provision of law, its charter or by-laws or operating agreement or any amendment thereof, or of any indenture, agreement, instrument or undertaking binding upon such Lead Lenders or Lenders.(c)
The execution, delivery and performance by such Lead Lenders or Lenders of this Agreement will result in a valid and legally binding obligation of such Lead Lenders or Lenders enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance and similar laws affecting creditors rights generally, and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law).(d)
It has received and approved, as to form and content, sample copies of the Loan Documents and Assignments, however, such approval shall not operate as a warranty or representation of the adequacy, validity or binding effect of any of the Loan Documents or Assignments.2.3 Cooperation: Accountings. Lead Lenders will, upon the reasonable request of Lenders, from time to time execute and deliver or cause to be executed and delivered in a timely fashion such further instruments, and do and cause to be done such further acts as may be necessary or proper to carry out more effectively the provisions of this Agreement The Lead Lenders agree to provide to Lenders upon reasonable request, but in no event more frequently than once a month, a statement of all payments received in respect of the Loan.
2.4 Reliance on Lead Lenders. The Lead Lenders shall promptly provide to Lenders a copy of all financial statements and reports of operating results and other documents and information received by the Lead Lenders in its capacity as such pursuant to the Loan Documents. The Lead Lenders shall have a duty and responsibility to provide Lenders with any credit or other information concerning the affairs, financial condition or business of the Borrowers which may come into the possession of the Lead Lenders, including financial statements, credit reports and any other documents and information.
2.5
Limitation on Lead Lenders Liability.(a)
In addition to the Lead Lenders failure to comply with the terms of this Agreement, including the Priority of Payment, the Lenders shall have full recourse against Lead Lenders for the amounts payable by the terms of this agreement. Lead Lenders obligation with respect to such payments shall be to remit to the Lenders a monthly payment based on the agreed Interest Rate calculated on the Participation Interest and the principal amount of the Participation interest when a Loan pays off or matures in accordance with this Agreement.(b)
Although Lead Lenders will exercise the same care in administering the Loan as if the Loan were made entirely for Lead Lenders own account, Lead Lenders liability shall be limited to the Lenders Participation Interest and the amount payable on that at the Interest Rate, except for a loss due to Lead Lenders own gross negligence, willful acts or misconduct(c)
Lead Lenders shall be entitled to rely upon any certification, notice or other communication (including any thereof by telephone, telex, telegram, cable or telecopy) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the Lenders. Should approval of any action, any inaction or any proposed course of conduct in administering the Loan (either before or after the occurrence of an Event of Default) be requested in writing by the Lead Lenders from Lenders, such Lenders shall approve or deny such request in writing and shall deliver the writing to the Lead Lenders within ten (10) calendar days after the Lenders receipt of the Lead Lenders request. Any Lenders failure to respond within the ten (10) calendar days shall be deemed consent by such Lender to such request(d)
Lead Lenders do not assume and shall have no responsibility or liability, express or implied, for (i) the collectibility of the Loan made to Borrowers under, or the enforceability of, any of the Loan Documents, or (ii) the financial condition or creditworthiness of the Borrowers, or (iii) any credit or other information furnished by the Borrowers to Lead Lenders, or (iv) the value of any collateral for the Loan.2.6 Lead Lender Rights as Lender. The Lead Lender in its capacity as a lender hereunder shall have the same rights, powers and obligations hereunder as all other Lenders and may exercise the same as though it were not acting as the Lead Lender.
SECTION 3. ADMINISTRATION OF LOAN
3.1 Administration and Servicing of Loan. In administering and servicing the Loan, Lead Lenders shall act in its own behalf as to its interest in the Loan and shall act as an independent contractor (and not as an agent or trustee) for the Lenders with respect to their respective interests in the Loan. The Lenders hereby appoint and authorize Lead Lenders to act for and on behalf of the Lenders with regard to the Loan, subject to the restrictions set forth in this Agreement Lead Lenders shall utilize its own facilities and equipment and its own employees and other persons authorized under the Loan Documents in the administering and servicing of the Loans, all without cost to the Lenders.
In its administering and servicing of the Loan, Lead Lenders shall perform the following duties (the enumeration of said duties not being intended to limit the duties to be performed by Lead Lenders in accordance with the foreg
