LOAN PURCHASE AGREEMENT

 

 

                                                                     Exhibit 2.3

 

 

                             LOAN PURCHASE AGREEMENT

 

                                     between

 

                       THE FIRST NATIONAL BANK OF IPSWICH

 

                                        and

 

                         OMEGA COMMERCIAL MORTGAGE CORP.

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                                TABLE OF CONTENTS

 

                                                                            Page

 

SECTION I         Definitions.................................................1

SECTION II        Agreement to Purchase.......................................5

SECTION III       Purchase of REIT Loans......................................5

SECTION IV        Rights to Payments on the REIT Loans........................5

SECTION V         Closing.....................................................6

SECTION VI        Representations, Warranties and Covenants of REIT...........6

SECTION VII       Repurchase.................................................13

SECTION VIII      Representations, Warranties and Covenants of Purchaser.....14

SECTION IX        Closing Documents..........................................15

SECTION X         Costs......................................................16

SECTION XI        Post-Closing Matters.......................................16

SECTION XII       Indemnification............................................16

SECTION XIII      Confidentiality............................................17

SECTION XIV       Termination................................................17

SECTION XV        Notices....................................................17

SECTION XVI       Survival of Agreement......................................19

SECTION XVII      Severability...............................................19

SECTION XVIII     Counterparts...............................................19

SECTION XIX       Governing Law..............................................19

SECTION XX        Successors and Assigns.....................................20

SECTION XXI       Further Agreements.........................................20

SECTION XXII      Public Announcements.......................................20

SECTION XXIII     Amendments.................................................20

SECTION XXIV      Interpretation.............................................20

SECTION XXV       Intention of the Parties...................................21

SECTION XXVI      Modification...............................................21

SECTION XXVII     Waivers....................................................21

SECTION XXVIII    Schedules and Headings.....................................21

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                                    SCHEDULES

 

SCHEDULE I         Schedule of REIT Loans To Be Purchased at Par (including

                  Exceptions from REIT Loan policy and location of collateral)

 

SCHEDULE II        Schedule of REIT Loans To Be Purchased Below Par (including

                  Exceptions from REIT Loan policy and location of collateral)

 

SCHEDULE III       Delinquent Charges on Collateral

 

SCHEDULE IV        Hazardous Substances

 

SCHEDULE V         Revolving REIT Loans and approved but not yet funded

                  construction and other REIT Loans

 

SCHEDULE VI        Governmental Notifications

 

SCHEDULE VII       Litigation

 

SCHEDULE VIII      Material Information

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      This REIT Loan Purchase Agreement (this "Agreement") is entered into as of

February 22, 2005 by and between THE FIRST NATIONAL BANK OF IPSWICH, a national

bank ("Purchaser") and OMEGA COMMERCIAL MORTGAGE CORP., a Delaware corporation

("REIT").

 

                                    RECITALS

 

      WHEREAS, REIT desires to sell, and Purchaser desires to purchase, certain

of the loans of REIT on the terms and conditions described below.

 

      NOW, THEREFORE, in consideration of the premises and mutual agreements set

forth herein, and for other good and valuable consideration, the receipt and

sufficiency of which are hereby acknowledged, Purchaser and REIT agree as

follows:

 

       I.     DEFINITIONS.

 

      As used in this Agreement, the capitalized terms set forth below shall

have the respective meanings set forth below; terms importing the singular shall

include the plural and vice versa:

 

      "Assignment" means an individual assignment of a Mortgage or Security

Agreement, notice of transfer or equivalent instrument in recordable form,

sufficient under the laws of the jurisdiction wherein the related Real Property

Interest is located to reflect of record the sale or transfer of the related

REIT Loan.

 

      "Business Day" means any day other than a Saturday, Sunday or any other

day on which banking institutions in Massachusetts are permitted or required by

any applicable law or executive order to close.

 

      "Collateral" means (i) every item of collateral in which a security

interest, pledge, mortgage, or assignment is granted by an Obligor in connection

with a REIT Loan, including, without limitation, the Equipment, Real Property

Interests and Improvements pledged by such Obligor as collateral under the

related REIT Loan Documents and (ii) any property interest in which a security

interest or other interest has been granted under applicable federal or state

law in effect from time to time, including, without limitation, under the UCC

with respect to the REIT Loans. The foregoing shall include, without limitation,

REIT's rights (a) under investment or share owner certificates or other evidence

of the right to receive payment, (b) as lien holder of any item of personal

property the ownership of which is evidenced by a certificate of title and (c)

all proceeds of the foregoing (including all insurance proceeds).

 

      "Due Date" means, with respect to any REIT Loan, the day of the month set

forth in the related Note on which each monthly payment on such REIT Loan is

scheduled to be due, without regard to grace periods.

 

      "Encumbrance" means any mortgage or deed of trust, pledge, hypothecation,

assignment, deposit arrangement, lien, charge, claim, security interest,

easement or encumbrance, or preference, priority or other security agreement or

preferential arrangement of any kind or nature whatsoever (including any lease

or title retention agreement, any financing lease having substantially the same

economic effect as any of the foregoing, and the filing of, or agreement to

give, any financing statement perfecting a security interest under the UCC or

comparable law of any jurisdiction).

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      "Environmental Laws" means all federal, state, and local laws, statutes,

ordinances and regulations, now or hereafter in effect, and in each case as

amended or supplemented from time to time, and any judicial or administrative

interpretation thereof, including, without limitation, any applicable judicial

or administrative order, consent decree or judgment, relative to any Real

Property Interest, relating to the regulation and protection of the environment

and natural resources (including, without limitation, ambient air, surface

water, groundwater, wetlands, land surface or subsurface strata, wildlife,

aquatic species and vegetation). Environmental Laws include but are not limited

to the Comprehensive Environmental Response, Compensation and Liability Act, as

amended, 42 U.S.C. 9601 et seq., the Resource Conservation and Recovery Act, as

amended, 42 U.S.C. 6901 et seq., the Toxic Substances Control Act, as amended,

15 U.S.C. 2601 et seq., the Hazardous Materials Transportation Act, as amended,

49 U.S.C. 1801 et seq., the Federal Insecticide, Fungicide, and Rodenticide Act,

as amended (7 U.S.C. 136 et seq.), the Clean Air Act, as amended (42 U.S.C. 740

et seq.), the Federal Water Pollution Control Act, as amended (33 U.S.C. 1251 et

seq.), the Occupational Safety and Health Act, as amended (29 U.S.C. 651 et

seq.), the Safe Drinking Water Act, as amended (42 U.S.C. 300(f) et seq.), the

Clean Water Act (33 U.S.C. 1251 et seq.), the National Environmental Policy Act

of 1969 (42 U.S.C. 4321), Title III of the Superfund Amendment and Authorization

Act (40 U.S.C. 1101 et seq.), Massachusetts Oil and Hazardous Material Release

Prevention and Response Act (M.G.L. c. 21E), and the Massachusetts Hazardous

Waste Management Act (M.G.L. c. 21C), and any and all regulations promulgated

thereunder, and all analogous state and local counterparts or equivalents and

any transfer of ownership or notification or approval statutes.

 

      "Equipment" means, with respect to any REIT Loan, any and all personal

property which would constitute "equipment" under the UCC securing such REIT

Loan, together with all accessories, attachments, accessions, parts, repairs,

substitutions, replacements and upgrades now or hereafter affixed to or used in

connection therewith and included in the Collateral for such REIT Loan.

 

      "Governmental Entity" means a federal, state, provincial, local, county or

municipal government, governmental, regulatory or administrative agency,

department, commission board, bureau or other authority or instrumentality,

domestic or foreign.

 

      "Guarantee" means a guarantee executed by any Person, guaranteeing payment

and/or performance of all or a part of a borrower's obligations under a REIT

Loan.

 

      "Hazardous Substances" means, without limitation: (a) those substances

included within the definitions of any one or more of the terms "hazardous

substances", "hazardous materials", "toxic substances", and "hazardous waste" in

the Comprehensive Environmental Response, Compensation and Liability Act, as

amended, 42 U.S.C. 9601 et seq., the Resource Conservation and Recovery Act, as

amended, 42 U.S.C. 6901 et seq., the Toxic Substances Control Act, as amended,

15 U.S.C. 2601 et seq., and the Hazardous Materials Transportation Act, as

amended, 49 U.S.C. 1801 et seq., and in the regulations promulgated pursuant to

 

 

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said laws; (b) those substances listed in the U.S. Department of Transportation

Table (49 CFR 172.101 and amendments thereto) or by the Environmental Protection

Agency (or any successor agency) as hazardous substances (40 CFR 302 and

amendments thereto); (c) such other substances, materials and wastes as are or

become regulated under applicable local, state or federal laws, or as are

classified as hazardous or toxic under federal, state or local laws or

regulations; and (d) any materials, wastes or substances that are (i) petroleum,

(ii) asbestos, (iii) polychlorinated biphenyls, (iv) within the definition of

"hazardous substance" set forth in Section 311 of the Clean Water Act, 13 U.S.C.

1321 et seq. (33 U.S.C. 1321) or designated as "toxic pollutants" subject to

Chapter 26 of the Clean Water Act pursuant to Section 307 of the Clean Water Act

(33 U.S.C. 1317); (v) flammable explosives; or (vi) radioactive materials.

 

      "Improvements" means all buildings, structures, improvements, parking

areas, landscaping, Equipment, fixtures and articles of property now or

hereafter erected on, attached to, or used or adapted for use in the operation

of any Real Property Interests, including, without limitation, all heating, air

conditioning and incinerating apparatus and equipment, all boilers, engines,

motors, dynamos, generating equipment, piping and plumbing fixtures, water

heaters, ranges, cooking apparatus and mechanical kitchen equipment,

refrigerators, freezers, cooling, ventilating, sprinkling and vacuum cleaning

systems, fire extinguishing apparatus, gas and electric fixtures, carpeting,

floor covering, underpadding, elevators, escalators, partitions, mantels,

built-in mirrors, window shades, blinds, draperies, screens, storm sashes,

awnings, signs, furnishings of public spaces, halls and lobbies, and shrubbery

and plants.

 

      "Interest Accrual Period" means, with respect to each Due Date related to

any REIT Loan, the period commencing on the immediately preceding Due Date and

ending on the day immediately preceding such Due Date.

 

      "Interest Rate" means, with respect to any REIT Loan, the annualized rate

at which interest is scheduled (in the absence of a default) to accrue on such

REIT Loan from time to time during any Interest Accrual Period in accordance

with the related Note and applicable law.

 

      "Mortgage" means a mortgage, deed of trust, leasehold mortgage or

leasehold deed of trust given by an Obligor to secure the repayment to REIT of a

REIT Loan and the performance of any other obligations required under the

related REIT Loan Documents.

 

      "Note" means the original executed promissory note evidencing the

indebtedness of the Obligor under a REIT Loan, together with any rider, addendum

or amendment thereto, or any renewal, substitution or replacement of such

promissory note.

 

      "Obligor" means, with respect to any REIT Loan or credit enhancement, any

Person that is an obligor, borrower or guarantor under such REIT Loan or credit

enhancement or has granted a mortgage or security interest in Collateral to

secure such REIT Loan or credit enhancement, and shall include the successors

and assigns of such Persons.

 

 

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      "Payments" means, with respect to each REIT Loan, all monies due or to

become due under such REIT Loan, including, without limitation, all payments of

principal and interest, late fees, prepayment fees, collections, recoveries or

proceeds (including proceeds from insurance policies, condemnation or

liquidation) on or in respect of such REIT Loan.

 

      "Permitted Encumbrance" means (1) the lien of current real property taxes,

water charges, sewer rents and assessments not yet due and payable or payable

but not yet delinquent, (2) covenants, conditions and restrictions, rights of

way, easements and other matters of public record as of the date of recording

which are acceptable to mortgage lending institutions generally, which are

specifically referred to in the related Title Policy and which do not,

individually or in the aggregate, materially and adversely affect the current

use, value or marketability of the related Real Property Interest, or which are

insured over in the related title policy, (3) exceptions and exclusions

specifically referred to in such related Title Policy and (4) other matters to

which like properties are commonly subject which do not, individually or in the

aggregate, materially interfere with the benefits of the security intended to be

provided by the Mortgage or the current use of such Real Property Interest.

 

      "Person" means any individual, partnership, corporation, trust, limited

liability company, unincorporated organization, Governmental Entity or any other

entity.

 

      "Real Property Interest" means, with respect to each REIT Loan secured in

whole or in part by a Mortgage, the real property described in such Mortgage,

including all easements, rights, appurtenances, tenements, rents, royalties,

mineral, oil and gas rights and profits, water, water rights and water stock

appurtenant to such property described in such Mortgage.

 

      "REIT Loans" means the REIT Loans or extensions of credit identified on

the REIT Loan Schedules.

 

      "REIT Loan Amount" means the sum of (i) the aggregate amount of the

purchase price for all REIT Loans stated on Schedule II and (ii) the aggregate

amount of the unpaid principal balance and accrued and unpaid interest stated on

Schedule I for all other REIT Loans.

 

      "REIT Loan Documents" means, with respect to each REIT Loan, (i) any and

all agreements between REIT (or any of its predecessors in interest) and any

third-party with respect to the REIT Loan or the Collateral described in the

REIT Loan and (ii) any and all documents connected with the REIT Loan executed

by any Obligor with respect to such REIT Loan, including, without limitation,

originally executed copies of any and all notes, pledge and security agreements,

schedules, Mortgages, assignments of rents, subordination agreements, amendments

(including any documents amending, modifying or otherwise altering any REIT Loan

Document), addenda, riders, UCC financing statements, consents by landlords or

other persons, indemnity agreements, environmental reports and assessments with

respect to any Real Property Interests, any appraisals and surveys with respect

to any Real Property Interests, any Guarantees, any opinions of counsel, all

insurance certificates and policies, including, but not limited to, real estate

and leasehold title insurance policies, and any documents evidencing any credit

enhancements.

 

 

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      "REIT Loan Files" means the REIT Loan Documents and all other information

in the possession of REIT or ABNY pertaining to the REIT Loans.

 

      "Lost Note Affidavit and Indemnity" means an affidavit and indemnity

executed by an authorized officer of the REIT, together with a copy of the

related Note.

 

      "Security Agreement" means, with respect to any REIT Loan secured by

Collateral other than Real Property Interests and Improvements, the pledge,

security agreement or similar instrument that secures the related Note and

creates a lien on the related Collateral.

 

      "Title Policy" has the meaning set forth in Section VI. B. 16 of this

Agreement.

 

      "UCC" means the Uniform Commercial Code as in effect from time to time in

each applicable jurisdiction.

 

      All capitalized terms not defined in this Agreement shall have the

meanings provided in the Purchase and Assumption Agreement by and between

Purchase and Atlantic Bank of New York, dated the date hereof (the "P&A

Agreement").

 

      II.    AGREEMENT TO PURCHASE.

 

      On the Closing Date, REIT agrees to sell, and Purchaser agrees to

purchase, on the terms and conditions stated below, the REIT Loans described in

the schedules attached hereto as Schedule I and Schedule II (which shall

hereafter be referred to as the "REIT Loan Schedules") as updated as of a date

no more than two (2) Business Days prior to the Closing Date. The REIT Loan

Schedules shall be agreed to and signed by the REIT and Purchaser and shall set

forth the names of the Obligors and the date of the Note for each REIT Loan and

as of the date of the REIT Loan Schedule, the aggregate principal balance of

each REIT Loan, the accrued and unpaid interest of each REIT Loan as of that

date and the purchase price for each REIT Loan. Purchaser shall be under no

obligation to purchase a REIT Loan which is not included in the REIT Loan

Schedules. Specifically, Purchaser shall not be obligated to purchase a REIT

Loan approved or acquired by REIT after the date hereof unless Purchaser has

specifically agreed to purchase such REIT Loan in writing, subject to such REIT

Loans' compliance with the terms and conditions of this Agreement at the time of

the Closing.

 

      III.   PURCHASE OF REIT LOANS.

 

      A. At the Effective Time, subject to the terms and conditions set forth

herein, REIT will sell, convey, assign and transfer to Purchaser and Purchaser

shall purchase from REIT, at the price and upon the terms and conditions set

forth herein, all of REIT's right, title and interest, as of the Effective Time,

in and to the REIT Loans, free and clear of all Encumbrances.

 

 

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      B. Purchaser shall pay REIT the REIT Loan Amount.

 

      IV.    RIGHTS TO PAYMENTS ON THE REIT LOANS.

 

      Purchaser shall be entitled to all payments of principal and interest and

other recoveries on the REIT Loans received by REIT prior to the Closing Date

and not reflected in the REIT Loan Schedules and all payments of principal and

interest and other recoveries on the REIT Loans made on and after the Closing

Date within two (2) Business Days after receipt thereof.

 

      V.     CLOSING.

 

      The closing of the purchase and sale of the REIT Loans shall take place on

the Closing Date and shall be subject to the conditions set forth in the P&A

Agreement and the consummation of all of the transactions contemplated

thereunder and the purchase of the Premises.

 

      The obligation of Purchaser to purchase the REIT Loans as contemplated by

this Agreement shall also be subject to each of the following additional

conditions:

 

            A. all of the representations and warranties under this Agreement

(including, without limitation, in the attached Schedules) by REIT shall be true

and correct in all material respects as of the Closing Date, and no default by

REIT or event which, with the giving of notice or the passage of time or both,

would constitute an event of default by REIT under this Agreement shall have

occurred;

 

             B. Purchaser shall have received executed originals of the Closing

Documents specified in Section 9 of this Agreement; and

 

            C. all other terms and conditions of the REIT under this Agreement

shall have been complied with in all material respects.

 

      The obligation of REIT to sell the REIT Loans as contemplated by this

Agreement shall also be subject to each of the following additional conditions:

 

            A. all of the representations and warranties under this Agreement by

Purchaser shall be true and correct in all material respects as of the Closing

Date, and no default by Purchaser or event which, with the giving of notice or

the passage of time or both, would constitute an event of default by Purchaser

under this Agreement shall have occurred; and

 

            B. all other terms and conditions of the Purchaser under this

Agreement shall have been complied with in all material respects.

 

      VI.    REPRESENTATIONS, WARRANTIES AND COVENANTS OF REIT.

 

            A. REIT represents and warrants to Purchaser as of the date of this

Agreement, and shall be deemed to restate on the Closing Date, as follows:

 

 

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                  1. The execution and delivery of this Agreement by REIT, and

             the performance and compliance with the terms of this Agreement by

            REIT, will not violate REIT's organizational documents or constitute

            an event which, with notice or lapse of time or both, would

            constitute a default under, or result in the breach of, any material

            agreement or other instrument to which REIT is a party or by which

            it is bound.

 

                  2. REIT has the full power and authority to enter into and

            consummate all transactions contemplated by this Agreement, has duly

            authorized the execution, delivery and performance of this Agreement

            and has duly executed and delivered this Agreement.

 

                  3. Assuming due authorization, execution and delivery by

            Purchaser, this Agreement constitutes a valid, legal and binding

            obligation of REIT, enforceable against REIT in accordance with its

            terms, subject to (A) applicable conservatorship, receivership and

            other laws affecting the enforcement of creditors' rights generally

            and (B) general principles of equity, regardless of whether such

            enforcement is considered in a proceeding in equity or at law.

 

                  4. REIT is not in violation of, and its execution and delivery

            of this Agreement and its performance and compliance with the terms

            of this Agreement will not constitute a violation of, any law, any

            order or decree of any court or arbiter, or any order, regulation or

            demand of any federal, state or local governmental authority, which

            violation is likely to adversely affect the ability of REIT to

            perform its obligations under this Agreement or to materially and

            adversely affect the financial condition of REIT.

 

                  5. No litigation is pending or, to REIT's knowledge,

            threatened against REIT that, if determined adversely to REIT, would

            prohibit REIT from entering into this Agreement or that is likely to

            adversely affect the ability of REIT to perform its obligations

            under this Agreement or to materially and adversely affect the

            financial condition of REIT.

 

                  6. REIT has not dealt with any broker, investment banker,

            agent or other person that may be entitled to any commission or

            compensation in connection with the sale of the REIT Loans by REIT

            or the consummation of any other transactions contemplated hereby.

 

            B. REIT represents and warrants to, and covenants with, Purchaser

with respect to each REIT Loan, that as of the date of each initial REIT Loan

Schedule and shall be deemed to restate on the Closing Date:

 

                  1. The information concerning each REIT Loan set forth on each

            schedule attached hereto is true and correct as of the date

            indicated thereon. All information in the REIT Loan Files has been

             provided to Purchaser and is true and correct in all material

            respects as of the date indicated therein. All information on

            Schedule VIII has been provided to Purchaser and is true and correct

            in all material respects as of the date indicated therein.

 

 

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                  2. All of the REIT Loan Documents and all signatures therein

            are genuine and represent the legal, valid and binding obligation of

             the Obligor to REIT, enforceable against each Obligor in accordance

            with their terms except as such enforcement may be limited by the

            application of bankruptcy, insolvency, reorganization or other

            similar laws affecting the enforcement of creditors' rights

            generally and by general equity principles (regardless of whether

            such enforcement is considered in a proceeding in equity or at law).

            No REIT Loan has been satisfied, subordinated, assigned or

            rescinded, in whole or in part, or impaired, altered, waived,

            canceled or modified, nor, to the knowledge of REIT, has any

            Equipment, Improvement or Real Property Interest been subleased

            since the origination of the REIT Loan, in whole or in part.

 

                  3. Each of the REIT Loans is free and clear of all

            Encumbrances and, to REIT's knowledge, the related Collateral is

            free and clear of all Encumbrances. REIT is the sole owner of the

            right to receive all principal, interest and all other amounts

            required to be paid to the lender under such REIT Loan. REIT is the