FUNDING AGREEMENT
TERMS & CONDITIONS
CLIENT HEREBY AGREES AS FOLLOWS: ICS Partners, Inc., hereby referred to as “ICS Loans” or “ICS” is hereby contracted by Client, an authorized Borrower, Principal, Managing Member, Partner, or designated Loan Broker of the borrowing entity to process, underwrite, and arrange financing for the described project. In consideration of the efforts of ICS to arrange financing, Authorized Client, hereby grants ICS the right during the term of this agreement to arrange financing for the property/loan described herein.
SECTION A:
FUNDING ORIGINATION FEE: The ICS Funding Fee is a percentage of the gross loan amount arranged by ICS, due at loan closing, paid by the Borrower, also referred to as the "Borrowing Entity." (For example: A 2% Total Funding Origination Fee, or 2 points, is equal to 2% of the total loan amount.) The Total Funding Fee includes the total points paid to ICS and a 3rd Party Broker (if applicable). All Funding Origination Fees are paid directly to ICS at closing by the Borrowing Entity and will be outlined within the final settlement agreement issued by the escrow company of record. 3rd Party Brokers are paid at escrow closing or following closing directly by ICS once funds have been received by ICS from escrow. The Total Funding Origination Fee does not include any Lender points or other Lender fees, ICS Processing & Underwriting fees, or Lender paid yield spread premiums (if applicable).
BROKER COMPENSATION SPLITS: In the event there is a 3rd Party Independent Broker or 3rd Party Brokerage Group that is working with ICS, the Broker earns 100% of their total Funding Origination Fee (points) charged to the Borrower. The Total Funding Origination fee payable to ICS and Independent Broker(s) will be outlined within our Final Lender Term Sheet and/or a separate Funding Fee Agreement or LOI between Borrower, Broker, and ICS.
SECTION B:
ICS PROCESSING & UNDERWRITING FEES:
ICS Processing & Underwriting Fees cover the following:
• Borrower / Principal / Holding Entity Income & Asset Evaluation
• Property Income & Asset Evaluation
• Property Tenant Review
• Sponsor Soft Background Check
• Preliminary Title Report
• Vesting Deed
• Property Tax Evaluation
• Loan packing and submission to multiple institutional and private lenders
• Internal Multi-Lender Loan Underwriting
• Lender Term Sheet Origination & Negotiation
• Loan Processing
• Escrow/Title Set-up and Closing Management
ICS charges a Loan Processing & Underwriting Fee for certain loans which varies by property and loan type. The ICS Loan Processing & Underwriting Fee is due immediately upon Borrower/Partner acceptance of a Lender Term Sheet/LOI originated by ICS, unless waived until loan closing at the sole discretion of ICS. Client and Borrowing Entity agrees to complete the Loan Processing & Underwriting payment to ICS within one (1) business day following acceptance of a Lender Term Sheet/LOI.
ESTIMATED LENDER FEES & TERMS: The Final Funding Lender will have additional fees which will be due immediately following Borrower acceptance of a Lender Term Sheet and/or upon loan closing. Fees may include but are not limited to Lender Origination Points, a property appraisal fee, inspection, Lender underwriting, legal, 3rd party reports (phase 1 and/or phase 2 ), title & escrow, entity document review, loan document preparation, and other due diligence fees as determined by the Funding Lender. Lender fees and deposits are estimated by the Funding Lender and are credited against actual services ordered and performed by Lender and/or 3rd party service providers associated with the transaction. Lender fees and deposits are separate fees and additional to any funding, processing, and underwriting fees charged by ICS as outlined in sections A and B.
SECTION C:
AUTHORIZED LENDING PARTNER: ICS is an Authorized Correspondent Lending Partner with numerous institutional and private lenders. As a Commercial Mortgage Lending Company, ICS leverages our strong, long-term relationships with all sources of capital, including Agency Lenders (Fannie Mae, Freddie Mac, FHA/HUD) SBA, Life Companies, Bridge Lenders, Banks, Credit Unions, REITs, and CMBS Lenders. ICS structures, packages, and processes loans which are simultaneously underwritten through multiple institutional and private Lenders for funding. Our Lenders meet, beat, or counteroffer our asking rate and terms, ensuring our clients attain the best financing available through a competitive bidding process. ICS arranges loans through the most competitive Lender. *All Borrower and property information is confidential and only made available to specific approved Lenders that meet the funding request criteria. *Any loan terms, rates, and/or fees quoted by ICS to Principal, Borrower, and/or Representing Broker are subject to loan underwriting and due diligence performed by ICS and participating partner Lenders, including a property evaluation, which may include a BPO and/or appraisal. Terms may be restructured or negotiated at any time prior to a Final Lender Loan Commitment. There is no guarantee on any estimated terms until a Final Loan Commitment has been issued by the participating Lender. Estimated rates are based on the Federal Prime Rate, SOFR, Treasuries, and Swaps, and may be subject to change daily until a Final Loan Commitment is issued.
LOAN PROCESSING & UNDERWRITING: The Borrowing Entity agrees to pay Loan Processing and Underwriting fees to be determined and outlined by ICS and/or participating partner Lender. Lender Deposits will be applied to Lender’s out of pocket underwriting costs including but not limited to all items noted in sections B above. Actual underwriting costs including legal fees, valuation analysis, third party appraisal, escrow costs, title insurance costs, inspection costs, and other related expenses vary and must be paid by Client to Lender. An ICS Loan Processing & Underwriting fee is required to cover upfront due diligence expenses incurred by ICS, noted in section B above. In the event an appraisal is required, Borrower/Principal will be required to pay for the appraisal upfront. Appraisal fees vary by location and property type. The ICS Processing & Underwriting Fee does not include the appraisal fee, any additional loan fees, other loan processing, or underwriting fees charged by any other participating third-party Bank, Lender, or other lending party associated with the transaction. The ICS Loan Processing & Underwriting Fee is due immediately upon Borrower acceptance of a Lender Term Sheet/LOI originated by ICS. Client agrees to complete the Loan Processing & Underwriting payment to ICS within one (1) business day following acceptance of a Lender Term Sheet/LOI. The Loan Processing & Underwriting Fee covers due diligence costs including but not limited to a preliminary title report, lien reports, property operating income analysis, borrower credit and background review, market analysis, property tax assessment review, loan term structuring, loan packaging, and third-party escrow and title closing arrangement. Additional lender underwriting deposits may be required to cover appraisal, inspection, environmental reports, legal, and other third-party closing services once a Final Lender Term Sheet has been mutually executed between all parties.
ICS LOAN FUNDING & ORIGINATION FEE: Client and Borrowing Entity agree to pay to ICS the Loan Funding Origination Fee as outlined in Section A above. The Loan Funding & Origination fee is paid at closing. The funding fee will be paid to ICS by Borrowing Entity at closing and is separate from any third-party participating Lender points or fees (if applicable). In the event project funding is arranged by ICS, affiliates, or a Lender or Investor brought forth by ICS directly or indirectly during the term of this agreement or within 6 months following agreement expiration and/or termination, Borrowing Entity agrees to pay ICS the Loan Funding Fee, as outlined in Section A of this agreement. The Funding Fee does not include any additional loan fees or other fees allocated to any other third-party Bank, Lender, or other party (if involved in transaction). The Funding Fee does not include any ICS Loan Processing or Loan Underwriting Fees charged by ICS or a participating Lender (if applicable).
TAXES AND INSURANCE: Taxes and assessments shall be current at closing and an annual insurance policy in place. Lender shall withhold at closing an escrow reserve for taxes, insurance and assessments and require a monthly payment of approximately one twelfth of the annual obligation providing sufficient funds to pay these items as they become due.
LEGAL REPRESENTATION: Client and Borrowing Entity acknowledges that the party is advised to engage appropriate legal representation for this transaction to review loan documents and prepare an opinion letter addressed to the Lender which will at a minimum address the validity and enforceability of the loan documents and the authority of the Borrowing Entity to sign and complete the transaction.
DUE DILIGENCE: Borrowing Entity and Client acknowledges that ICS must perform “DUE DILIGENCE” procedures. Therefore, this agreement is not to be construed as a commitment to lend money. This agreement is intended as a summary of the terms and conditions under which ICS is authorized by Client and Borrowing Entity to provide financing for the project, and omits specific terms and conditions, which will be included in the final Lender loan documents.
FINANCING RELATIONSHIP: Client, who is an authorized Borrower, Managing Member, Partner, or designated Loan Broker of the Borrowing Entity authorizes ICS, its affiliates, and any other Commercial Lending Professionals, Underwriters, and Loan Processors appointed by ICS to arrange financing for the described project. This Agreement creates a financing relationship between ICS, the Client, and the Borrowing Entity, and no other person(s) or companies not a party to this agreement. Client agrees ICS is authorized to arrange financing through any private, institutional, and/or corporate capital source for the transaction, including submission of loan applications and documents to prospective lenders on Principal’s behalf, and to negotiate on Principal’s behalf all funding terms, fees, interest rates, and arrange escrow closing.
CLIENT & BORROWING ENTITY RESPONSIBILITIES: Client and Borrowing Entity agree to provide the financial and property information requested by ICS necessary to underwrite the loan within five (5) business of acceptance of this agreement, which may include, but not limited to tax returns, property operating statements, rent rolls, financial statements, property photos, and other documents necessary to attain funding approval. A document checklist will be provided to Client by ICS within three (3) business days following acceptance of this agreement.
NO GUARANTEE OF FUNDING SUCCESS: ICS agrees to use reasonable commercial efforts to arrange financing for the Project. ICS does not guarantee that financing can or will be obtained. Client and Borrowing Entity agree that ICS and those Commercial Lending Professionals, Underwriters, and Loan Processors appointed by ICS will not be liable to Client for any losses or damages whatsoever in the event financing is not obtained. The ICS Loan Processing Fee is non-refundable regardless of funding success.
PAYMENT FROM CLOSING PROCEEDS: Client and Borrowing Entity agree that ICS has the right to require that payment of the funding fee, processing, and underwriting fees be made directly from the funding proceeds and disbursed directly from escrow/closing, and Client and Borrowing Entity hereby irrevocably authorize ICS to issue instructions to the Escrow/Closing Holder to pay the funding fee, processing, and underwriting fees directly to ICS as outlined within this agreement. Client and Borrowing Entity further agree that ICS may use this executed agreement as a demand in escrow/closing, directing Escrow/Closing Holder to pay and remit the fee to ICS. All Funding Fees, processing, and underwriting fees outlined within this agreement will be paid directly to ICS Partners, Inc. at closing. Any associated Broker(s) will be paid directly by ICS following closing and/or at closing as determined by ICS on a discretionary basis.
DURATION OF AGREEMENT: This agreement shall be valid for a period of 120 days from the date hereof. Unless cancelled in writing by Client and/or Borrowing Entity at the end of said period, this agreement will automatically be renewed month-to-month until cancelled by either party given 10-days written notice.
GOVERNED BY LAWS OF STATE OF ORIGIATION: All services rendered to Client and Borrowing Entity (no matter what state the Project is in) are provided within the state and conform with all state regulations regarding commercial real estate financing. The funding fees paid to ICS by the Borrowing Entity will be paid as outlined within this agreement, regardless of our involvement in the funding process if the project is financed. This agreement shall be governed by and construed in accordance with the laws of the state in which the loan originated.
MEDIATION OF DISPUTES: In the event any dispute or controversy arises with respect to the subject matter of this agreement, or the transaction contemplated herein (including, but not limited to, the party’s rights with respect to payment of commissions as provided herein) which the parties are unable to resolve among themselves after a good faith effort to do so, at the request of either party. All parties to this agreement agree to attempt to resolve such dispute or controversy through mediation in the state of noted above pursuant to a mediation conducted by a mediator appointed by the American Arbitration Association in accordance with its mediation rules.
ARBITRATION OF DISPUTES: In the event any dispute or controversy arises with respect to the subject matter of this agreement or the transaction contemplated herein (including, but not limited to, the parties rights with respect to payment of funding fees as provided herein) that is not resolved as provided in paragraph “Mediation of Disputes”, Client and Borrowing Entity and ICS agree that such dispute or controversy shall be settled by final, binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator may be entered in any court that has jurisdiction thereof.
AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE.
CREDIT REPORT AUTHORIZATION & ACKNOWLEDGEMENT
Authorization is hereby granted to ICS Partners, Inc. and/or an associated Lender authorized by ICS to obtain a consumer credit report through a credit reporting agency chosen by ICS Loans Commercial Lending and/or an associated Lender authorized by ICS. I understand and agree that ICS Loans Commercial Lending and/or associated Lender intends to use the consumer credit report for the purposes of evaluating my financial readiness to obtain a loan. I understand that this credit report will be retained on file at ICS Loans Commercial Lending and/or an associated Lender authorized by ICS for use only by ICS and/or the authorized Lender staff. This information will not be disclosed to anyone by ICS Loans Commercial Lending and/or an associated Lender authorized by ICS without my written consent. Furthermore, I understand that, should I choose to apply for financing through ICS Loans Commercial Lending and/or an associated Lender authorized by ICS, a revised credit report costing an additional fee may be required. My signature below authorizes the release to the credit reporting agency of financial information which I have supplied to ICS Loans Commercial Lending and/or an associated Lender authorized by ICS in connection with such an evaluation. Authorization is further granted to the credit reporting agency to use photostatic reproduction of this form if required to obtain any information necessary to complete my consumer credit report. PERMISSION HAS BEEN GRATED FOR THE RELEASE OF FINANCIAL INFORMATION TO THE CREDIT REPORTING AGENCY AND GRANTS PERMISSION FOR LENDER AND/OR MORTGAGE BROKER TO OBTAIN A COPY OF YOUR CREDIT REPORT. Each of the undersigned specifically represents to ICS and/or associated Lender and to actual or potential agents, brokers, processors, attorneys, insurers, servicers, successors and assigns and agrees and acknowledges that: (1) the information provided in this application is true and correct as of the date this loan application was submitted. (2) the loan requested pursuant to this application (the "Loan") will be secured by a mortgage or deed of trust on the property described in this application; (3) the property will not be used for any illegal or prohibited purpose or use (4) all statements made in this application are made for the purpose of obtaining a commercial, multifamily, or investment property mortgage loan; (5) the property will not be occupied by the borrower as a residence; (6) the Lender, its servicers, successors or assigns may retain the original and/or an electronic record of this application, whether or not the Loan is approved; (7) the Lender and its agents, brokers, insurers, servicers, successors, and assigns may continuously rely on the information contained in the application, and I am obligated to amend and/or supplement the information provided in this application if any of the material facts that I have represented herein should change prior to closing of the Loan; (8) ownership of this loan application, funding package, Loan and/or administration of the Loan account may be transferred with written notice to borrower (9) neither Lender nor its agents, brokers, insurers, servicers, successors or assigns has made any representation or warranty, express or implied, to me regarding the property or the condition or value of the property; and (10) my transmission of this application as an "electronic record" containing my " electronic signature," as those terms are defined in applicable federal and/or state laws (excluding audio and video recordings), or my facsimile transmission of this application containing a facsimile of my signature, shall be as effective, enforceable and valid as if a paper version of this application were delivered containing my original written signature. Each of the undersigned hereby acknowledges that any owner of the Loan, its servicers, successors, and assigns, may verify or reverify any information contained in this application.