Strategic Alliance Agreement (27K)
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STRATEGIC ALLIANCE AGREEMENT
This Strategic Alliance Agreement (this "Agreement") is entered into as of the
15th day of October, 2003 (hereinafter referred to as the "Effective Date"), by
and between Sunset Capital investments, Inc., a Maryland corporation
(hereinafter referred to as "SCI"), Sunset Mortgage Company, L.P., a
Pennsylvania limited partnership ("SMC"), Sunset Commercial Group, LLC, a
Pennsylvania limited liability company ("SCL") and Sunset Direct Lending LLC, a
Delaware limited liability company ("SDL" and together with SCL and SMC
collectively referred to herein as "Sunset Mortgage").
WITNESSETH:
WHEREAS, Sunset Mortgage is regularly and actively engaged in the business of
originating residential and commercial mortgage loans (collectively, "Mortgage
Loans");
WHEREAS, SCI is a real estate investment trust that intends to invest in
residential and commercial mortgage loans; and
WHEREAS, Sunset Mortgage and SCI wish to enter into a strategic alliance
regarding the origination of Mortgage Loans by Sunset Mortgage and the purchase
of Mortgage Loans by SCI.
NOW, THEREFORE, in consideration of the foregoing and of the mutual premises
hereinafter expressed, the parties hereto do mutually agree as follows:
ARTICLE I. SCOPE OF STRATEGIC ALLIANCE.
A. Sunset Mortgage shall continue to originate Mortgage Loans in
accordance with its historical practices. Commencing as of January 1, 2004, on a
monthly basis, SCI shall provide Sunset Mortgage with one or more pricing sheets
("Pricing Sheets") in which SCI shall provide loan parameters (including loan to
value ratio, credit scores and other criteria) applicable to Mortgage Loans and
the applicable pricing for such Mortgage Loans. Sunset Mortgage agrees and
acknowledges that as to any and all Mortgage Loans originated by Sunset Mortgage
or its affiliates that are within the parameters set forth in the applicable
Pricing Sheets, SCI shall have a right of first refusal to purchase such
Mortgage Loans as set forth herein.
B. On a regular basis (but no less frequently than monthly), Sunset
Mortgage shall send a written report (a "Mortgage Loan Report") to SCI setting
forth in reasonable detail all Mortgage Loans within the parameters set forth in
the applicable Pricing Sheets. No later than 2 days following its receipt of a
Mortgage Loan Report (the "Initial Election Period"), SCI shall send written
notice to Sunset Mortgage specifying the Mortgage Loans set forth in the
Mortgage Loan Report that SCI is interested in purchasing (a "Preliminary
Purchase Notice"). The Preliminary Purchase Notice shall constitute an offer by
SCI to purchase the Mortgage Loans set forth therein at the price set forth in
the applicable Pricing Sheets and upon the terms set forth herein. In the event
that SCI shall fail to deliver a Preliminary Purchase Notice to Sunset Mortgage
prior to the expiration of the Initial Election Period, then Sunset Mortgage may
sell the Mortgage Loans set forth in the applicable Mortgage Loan Report to one
or more third parties without regard to this Agreement.
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C. No later than two Business Days after its receipt of a Preliminary
Purchase Notice (the "Election Period"), Sunset Mortgage shall elect to sell the
Mortgage Loans described in the Preliminary Purchase Notice for the purchase
price set forth in the applicable Pricing Sheets (a "Sale Election") or elect to
offer the Mortgage Loans to SCI at a higher price than set forth in the
applicable Pricing Sheets (a "Repricing Election"). Sunset Mortgage shall make a
Sale Election or a Repricing Election by delivery of written notice to SCI
during the Election Period. In the event that Sunset Mortgage shall fail to
deliver such written notice to SCI prior to the expiration of the Election
Period, then Sunset Mortgage shall be deemed to have made a Sale Election with
regard to all of the Mortgage Loans set forth in the Preliminary Purchase
Notice. For purposes hereof "Business Day" shall mean any day other than
Saturday or Sunday or other day on which national banks in Jacksonville, Florida
are required or permitted by applicable law to close.
D. SCI may, by delivery of written notice to Sunset Mortgage on or
before the expiration of two Business Days after receipt by SCI of the Repricing
Election (the "Repricing Election Period"), elect to purchase all or any portion
of the Mortgage Loans originally set forth in the Preliminary Purchase Notice at
the price set forth in the Repricing Election. In the event that SCI shall fail
to deliver such written notice prior to the expiration of the Repricing Election
Period, then SCI shall be deemed to have elected not to purchase the Mortgage
Loans that are subject to such Repricing Election. As to any Mortgage Loans that
are subject to a Repricing Election that SCI does not elect to purchase
hereunder (collectively, "Market Mortgage Loans"), Sunset Mortgage may, after
expiration of the Repricing Election Period (or, if sooner, receipt of written
notice from SCI that it shall not purchase such Market Mortgage Loans), market
and sell such Market Mortgage Loans to one or more third parties at the price
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