Sample Business Contracts


Management Agreement - Primecore Mortgage Trust Inc. and Primecore Funding Group Inc.

Management Forms


                             Management Agreement


     This Agreement is dated as of March 30, 1999, by and among Primecore
Mortgage Trust, Inc., a Maryland corporation (the "Company"), and Primecore
Funding Group, Inc., a California corporation (the "Manager"), with respect to
the following:

     The Company intends to invest in construction and mixed use mortgage loans,
as well as land acquisition and development loans secured by undeveloped real
property and expects to qualify for the tax benefits accorded to a Real Estate
Investment Trust by Sections 856 through 860 of the Internal Revenue Code of
1986, as amended, and comparable provisions of state tax laws; and

     The Company desires to retain the Manager to manage the investments of the
Company and to perform certain administrative services for the Company in the
manner and on the terms set forth herein;

     In consideration of the following mutual agreements, the parties agree as
follows:

     Section 1.  Definitions:
                 ------------

     (a)  "affiliate" means, with respect to any person, another person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with such person.

     (b)  "Code" means the Internal Revenue Code of 1986, as amended.

     (c)  "governing instruments" means the articles or certificate of
incorporation or other charter, as the case may be, and bylaws of the Company
and its subsidiaries.

     (d)  "mortgage loans" means construction, mixed use, land acquisition and
development loans primarily secured by mortgages or deeds of trust on real
estate properties.

     (e)  "REIT" means Real Estate Investment Trust as defined under Section 856
of the Code.

     (f)  "REIT Provisions of the Code" means Sections 856 through 860 of the
Code.

     (g)  "unaffiliated directors" shall mean those members of the Board of
Directors of the Company, if any, who are not officers or employees of the
Company nor officers, directors or affiliates of the Manager.

                                       1
<PAGE>

     Section 2.  General Duties of the Manager.
                 -----------------------------

     (a)  Administrative Services Provided by the Manager.  The Manager will be
          -----------------------------------------------
responsible for the day-to-day operations of the Company and shall perform such
services and activities relating to the assets and operations of the Company as
may be appropriate, including:

          (1)  representing the Company in connection with the purchase of
     construction and other mortgage loans;

          (2)  in accordance with the directions of the Company's Board of
     Directors, investing or reinvesting any money of the Company;

          (3)  furnishing reports and statistical and economic research to the
     Company regarding the Company's real estate investment activities and the
     performance of its portfolio of mortgage loans;

          (4)  administering the day-to-day operations of the Company and
     performing administrative functions necessary in the management of the
     Company, including the collection of revenues, the payment of the Company's
     expenses, debts and obligations and the maintenance of appropriate computer
     services to perform such administrative functions;

          (5)  counseling the Company in connection with policy decisions to be
     made by the Board of Directors;

          (6)  assisting the Company in obtaining and using leverage to finance
     construction and other mortgage loan acquisitions;

          (7)  overseeing the servicing of the Company's construction and other
     mortgage loans;

          (8)  establishing underwriting, appraisal and quality control
     procedures for the construction and other mortgage loans acquired by the
     Company;

          (9)  conducting a legal document review of each mortgage loan acquired
     to verify the accuracy and completeness of the information contained in the
     security instruments and other pertinent documents in the mortgage loan
     file;

          (10) providing the Company with data processing, legal and
     administrative services to the extent required to implement the business
     strategy of the Company;

          (11) providing all actions necessary for compliance by the Company
     with all federal, state and local regulatory requirements applicable to the
     Company in respect of its business activities, including maintaining books
     and records and preparing or causing to be prepared all financial
     statements required under applicable regulations and contractual
     undertakings;

                                       2
<PAGE>

          (12) providing all actions necessary to enable the Company to make
     required federal, state and local tax filings and reports and generally
     enable the Company to maintain its status as a REIT, including, but not
     limited to, soliciting stockholders for required information to the extent
     required by the REIT provisions of the Code;

          (13) communicating on behalf of the Company with the stockholders of
     the Company as required to satisfy any reporting requirements and to
     maintain effective relations with such stockholders; and

          (14) performing such other services as may be required from time to
     time for management and other activities relating to the assets of the
     Company as the Board of Directors shall reasonably request or the Manager
     shall deem appropriate under the particular circumstances.

     (b)  Administrative Services Provided by Subcontractors.  The Manager may
          --------------------------------------------------
enter into subcontracts with other parties to provide any such services to the
Company, so long as it exercises reasonable care in the selection of such
subcontractors.

     (c)  Cooperation of the Company.  The Company agrees to take all actions
          --------------------------
reasonably required to permit the Manager to carry out its duties and
obligations.  The Company further agrees to make available all materials
reasonably required to enable the Manager to satisfy its obligations to deliver
financial statements and any other information or reports with respect to the
Company.

     Section 3.  Additional Activities of Manager.  Nothing in this agreement
                 --------------------------------
shall prevent the Manager or any of its officers, directors, employees or
affiliates from engaging in other businesses or from rendering services of any
kind to any other person or entity, including the purchase of, or advisory
service to others investing in, any type of real estate investment, including
investments which meet the principal investment objectives of the Company,
except that the Manager and its officers, directors and employees shall not
provide any such services to any mortgage REIT other than the Company or another
REIT sponsored by the Manager or its affiliates which has operating policies and
strategies different in one or more material respects from those of the Company.
Directors, officers, employees and agents of the Manager or affiliates of the
Manager may serve as trustees, directors, officers, employees, agents, nominees
or signatories for the Company or any subsidiary of the Company, to the extent
permitted by their governing instruments, as from time to time amended, or by
any resolutions duly adopted by the Board of Directors pursuant to the Company's
governing instruments.

     Section 4.  Bank Accounts.  At the direction of the Board of Directors, the
                 -------------
Manager may establish and maintain one or more bank accounts in the name of the
Company or any subsidiary of the Company, and may collect and deposit into any
such account or accounts, and disburse funds from any such account or accounts,
under such terms and conditions as the Board of Directors may approve; and the
Manager shall from time to time render appropriate accountings of such
collections and payments to the Board of Directors and, upon request, to the
auditors of the Company or any subsidiary of the Company.

                                       3
<PAGE>

     Section 5.  Records.  The Manager shall maintain appropriate books of
                 -------
account and records relating to services performed, and such books of account
and records shall be accessible for inspection by representatives of the Company
or any subsidiary of the Company at any time during normal business hours.

     Section 6.  Compensation of the Manager.
                 ---------------------------

     (a)  Management Fee. The Manager shall receive a monthly management fee
          --------------
equal to the sum of (1) .22% per month, or 2.64% per annum, of the total amount
of the Company's interest in the face amount of the notes which evidence the
outstanding mortgage loan portfolio balance, payable monthly and (2) any
extension fees, prepayment penalties and late payment charges paid by borrowers,
payable monthly.

     (b)  Payment. The Manager shall calculate the Manager's fees within 15 days
          -------
after the end of each month, and such calculation shall be promptly delivered.
The Company is obligated to pay the fees within 30 days after the end of each
month.

     Section 7.  Expenses of the Company.
                 -----------------------

     (a)  Expenses Borne by the Manager.  Without regard to the compensation
          -----------------------------
received by the Manager, the Manager shall bear the following expenses:

          (1)  Employment expenses of the personnel employed by the Manager,
     including, but not limited to, salaries, wages, payroll taxes, and the cost
     of employee benefit plans;

          (2)  Rent, telephone, utilities, office furniture, equipment and
     machinery (including computers, to the extent utilized) and other office
     expenses (such as asset/liability software, modeling software and other
     software and hardware) of the Manager needed in order to perform its duties
     as set forth herein;

          (3)  Bookkeeping fees and expenses including any costs of computer
     services, other than in connection with communications to security holders
     of the Company;

          (4)  Miscellaneous administrative expenses incurred in supervising and
     monitoring the Company's investments or any subsidiary's investments or
     relating to performance by the Manager of its functions;

          (5)  Fees and expenses paid to advisors and independent contractors,
     consultants, managers, and other agents engaged by the Manager for the
     account of the Company or any subsidiary of the Company;

          (6)  Expenses connected with the acquisition of the Company's assets
     and mortgage loans;

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<PAGE>

          (7)  Expenses related to the servicing and subservicing of the
     Company's mortgage loans; and

          (8)  Travel and related expenses of personnel of the Manager when
     attending meetings or performing other business activities which relate to
     the Company or any subsidiary of the Company.

     (b)  Expenses Borne by the Company.  The Company or any subsidiary of the
          -----------------------------
Company shall pay all of its expenses except those which are the specific
responsibility of the Manager pursuant to this agreement; and, without limiting
the generality of the foregoing, it is specifically agreed that the following
expenses of the Company or any subsidiary of the Company shall not be paid by
the Manager:

          (1)  The cost of borrowed money;

          (2)  All taxes applicable to the Company or any subsidiary of the
     Company including interest and penalties;

          (3)  Legal, accounting and auditing fees and expenses relating to the
     Company's or any subsidiary's operations;

          (4)  Expenses relating to any office or office facilities maintained
     by the Company or any subsidiary of the Company exclusive of the office of
     the Manager;

          (5)  Expenses connected with the ownership and disposition of the
     Company's or any subsidiary's assets, including, but not limited to, costs
     of completion, foreclosure, maintenance, repair and improvement of property
     and premiums for insurance on property owned by the Company or any
     subsidiary of the Company;

          (6)  Legal, audit, accounting, underwriting, brokerage, listing,
     rating agency, registration and other fees, printing, engraving and other
     expenses and taxes incurred in connection with the issuance, distribution,
     transfer, registration and stock exchange listing of the Company's or any
     subsidiary's equity securities or debt securities;

          (7)  The expenses of organizing, modifying or dissolving the Company
     or any subsidiary of the Company;

          (8)  All insurance costs incurred in connection with the Company or
     any subsidiary of the Company;

          (9)  Expenses connected with payments of dividends or interest or
     distributions in any other form made or caused to be made by the Board of
     Directors to holders of the securities of the Company or any subsidiary of
     the Company;

                                       5
<PAGE>

          (10) Expenses connected with the structuring and issuance of mortgage
     securities by the Company or any subsidiary of the Company, including but
     not limited to trustee's fees, insurance premiums, and costs of required
     credit enhancements;

          (11) Travel and related expenses of the directors of the Company when
     attending meetings or performing other business activities which relate to
     the Company;

          (12) All expenses of third parties connected with communications to
     holders of equity securities or debt securities of the Company or any
     subsidiary of the Company and the other bookkeeping and clerical work
     necessary in maintaining relations with holders of such securities and in
     complying with the continuous reporting and other requirements of
     governmental bodies or agencies, including any costs of computer services
     in connection with this function, the cost of printing and mailing
     certificates for such securities and proxy solicitation materials and
     reports to holders of the Company's or any subsidiary's securities and
     reports to third parties required under any indenture to which the Company
     or any subsidiary of the Company is a party;

          (13) Transfer agent's and registrar's fees and charges;

          (14) Fees and expenses paid to trustees or directors of the Company or
     any subsidiary of the Company, the cost of director and officer liability
     insurance and premiums for fidelity and errors and omissions insurance;

          (15) Any judgment rendered against the Company or any subsidiary of
     the Company, or against any trustee or director of the Company or any
     subsidiary of the Company in his capacity as such for which the Company or
     any subsidiary of the Company is required to indemnify such trustee or
     director, or any court or governmental agency; and

          (16) Other miscellaneous expenses of the Company or any subsidiary of
     the Company which are not specified expenses of the Manager under this
     agreement.

     Section 8.  Limits of Manager Responsibility; Indemnification.
                 -------------------------------------------------

     The Manager assumes no responsibility under this agreement other than to
render the services called for in good faith and shall not be responsible for
any action of the Board of Directors in following or declining to follow any
advice or recommendations of the Manager.  The Manager, its directors, officers,
stockholders and employees will not be liable to the Company, any subsidiary of
the Company, its subsidiary's stockholders or the unaffiliated directors for any
acts or omissions by the Manager, its directors, officers, stockholders or
employees under or in connection with this agreement, except by reason of acts
or omissions constituting bad faith, willful misconduct, gross negligence or
reckless disregard of their duties under this agreement.  The Company and its
subsidiaries shall reimburse, indemnify and hold harmless the Manager, its
directors, officers, stockholders and employees of and from any and all
expenses, losses, damages, liabilities, demands, charges and claims of any
nature whatsoever, including, without limitation, attorneys' fees, in respect of
or arising from any acts or omissions

                                       6
<PAGE>

of the Manager, its stockholders, directors, officers and employees made in good
faith in the performance of the Manager's duties under this agreement and not
constituting bad faith, willful misconduct, gross negligence or reckless
disregard of its duties.

     Section 9.  Term; Termination Fee.
                 ---------------------

     (a)  This agreement shall commence on the date of the first closing of the
Company's private placement and shall continue in force until the third
anniversary of such date, and thereafter it shall be renewed automatically for
successive one-year periods unless a notice of non-renewal is timely delivered
as described below.

     (b)  In addition to such further liability or obligation of either party to
the other due upon termination of this agreement, if this agreement is
terminated without cause (as "cause" is defined below), the Company shall pay
the Manager a termination fee in an amount equal to the greater of (1) the fair
market value of this agreement determined by an independent appraisal or (2)
four percent (4%) of the total face amount of the notes evidencing the mortgage
loan portfolio of the Company, each determined as of the date of notice of non-
renewal.  Such appraisal shall be conducted by a nationally-recognized appraisal
firm mutually agreed upon by the parties and the costs of such appraisal shall
be borne equally by the parties.  If the parties are unable to agree upon such
appraisal firm within 30 days following delivery of the notice of non-renewal,
then each party shall, as soon as reasonably practicable, but in no event more
than 45 days following delivery of the notice of non-renewal, choose a
nationally-recognized independent appraisal firm to conduct an appraisal.  In
such event, (1) the fair market value amount shall be deemed to be the average
of the appraisals as conducted by each party's chosen appraiser and (2) each
party shall pay the costs of its appraiser so chosen.  Any appraisal shall be
performed no later than 45 days following selection of the appraiser or
appraisers.  The termination fee payable by the Company shall be paid within 30
days following receipt of the final appraisal to be obtained.

     Section 10.  Termination by Company for Cause.  At the option of the
                  --------------------------------
Company, this agreement shall be and become terminated upon written notice of
termination to the Manager if any of the following events shall occur.
Termination for any of these events shall constitute termination for "cause":

     (a)  if a majority of the unaffiliated directors, if any, determines that
the Manager has violated this agreement in any material respect and, after
notice of such violation, the Manager has failed to cure such violation within
60 days; or

     (b)  there is entered an order for relief or similar decree or order with
respect to the Manager by a court having competent jurisdiction in an
involuntary case under the federal bankruptcy laws as now or hereafter
constituted or under any applicable federal or state bankruptcy, insolvency or
other similar laws; or the Manager:

          (1)  ceases, or admits in writing its inability, to pay its debts as
     they become due and payable, or makes a general assignment for the benefit
     of, or enters into any composition or arrangement with, creditors;

                                       7
<PAGE>

          (2)  applies for, or consents, by admission of material allegations of
     a petition or otherwise, to the appointment of a receiver, trustee,
     assignee, custodian, liquidator or sequestrator, or other similar official,
     of the Manager or of any substantial part of its properties or assets, or
     authorizes such an application or consent, or proceedings seeking such
     appointment are commenced without such authorization, consent or
     application against the Manager and continue undismissed for 60 days;

          (3)  authorizes or files a voluntary petition in bankruptcy, or
     applies for or consents, by admission of material allegations of a petition
     or otherwise, to the application of any bankruptcy, reorganization,
     arrangement, readjustment of debt, insolvency, dissolution, liquidation or
     other similar law of any jurisdiction, or authorizes such application or
     consent, or proceedings to such end are instituted against the Manager
     without such authorization, application or consent and are approved as
     properly instituted and remain undismissed for 60 days or result in
     adjudication of bankruptcy or insolvency; or

          (4)  permits or suffers all or any substantial part of its properties
     or assets to be sequestered or attached by court order and the order
     remains undismissed for 60 days. If any of the events specified above shall
     occur, the Manager shall give prompt written notice thereof to the Board of
     Directors upon the happening of such event.

     Section 11.  Action Upon Termination.  From and after the effective date of
                  -----------------------
termination of this agreement, except as otherwise specified, the Manager shall
not be entitled to compensation for further services, but shall be paid all
compensation accruing to the date of termination.  Upon such termination, the
Manager shall:

     (a)  after deducting any accrued compensation and reimbursement for its
expenses to which it is then entitled, pay over to the Company or any subsidiary
of the Company all money collected and held for the account of the Company or
any subsidiary of the Company pursuant to this agreement;

     (b)  deliver to the Board of Directors a full accounting, including a
statement showing all payments collected by it and a statement of all money held
by it, covering the period following the date of the last accounting furnished
to the Board of Directors with respect to the Company or any subsidiary of the
Company; and

     (c)  deliver to the Board of Directors all property and documents of the
Company or any subsidiary of the Company then in the custody of the Manager.

     Section 12.  Release of Money or Other Property Upon Written Request.  The
                  -------------------------------------------------------
Manager agrees that any money or other property of the Company or any subsidiary
of the Company held by the Manager under this agreement shall be held by the
Manager as custodian for the Company or such subsidiary, and the Manager's
records shall be appropriately marked clearly to reflect the ownership of such
money or other property by the Company or such subsidiary.  Upon the receipt by
the Manager of a written request signed by a duly authorized

                                       8
<PAGE>

officer of the Company requesting the Manager to release to the Company or any
subsidiary of the Company any money or other property then held by the Manager
for the account of the Company or any subsidiary of the Company under this
Agreement, the Manager shall release such money or other property to the Company
or such subsidiary of the Company within a reasonable period of time, but in no
event later than the later to occur of (1) 30 days following such request and
(2) the earliest time following such request that remittance will not cause the
Manager to violate any law or breach any agreement to which it or the Company is
a party. The Manager shall not be liable to the Company, any subsidiaries of the
Company, the unaffiliated directors, or the Company's or its subsidiaries'
stockholders for any acts performed or omissions to act by the Company or any
subsidiary of the Company in connection with the money or other property
released to the Company or any subsidiary of the Company and not constituting
bad faith, willful misconduct, gross negligence or reckless disregard of its
duties. The Company and any subsidiary of the Company shall indemnify the
Manager, its directors, officers, stockholders and employees against any and all
expenses, losses, damages, liabilities, demands, charges and claims of any
nature whatsoever, which arise in connection with the Manager's release of such
money or other property to the Company or any subsidiary of the Company unless
such expenses, losses, damages, liabilities, demands, charges and claims arise
in connection with acts or omissions which constitute bad faith, willful
misconduct, gross negligence or reckless disregard of its duties.
Indemnification pursuant to this provision shall be in addition to any right of
the Manager to indemnification under this agreement.

     Section 13.  Representations and Warranties.
                  ------------------------------

     (a)  The Company represents and warrants to the Manager as follows:

          (1)  The Company is duly organized, validly existing and in good
     standing under the laws of Maryland, has the power to own its assets and to
     transact the business in which it is now engaged and is duly qualified and
     in good standing under the laws of each jurisdiction where its ownership or
     lease of property or the conduct of its business requires such
     qualification, except for failures to be so qualified, authorized or
     licensed that could not in the aggregate have a material adverse effect on
     the business operations, assets or financial condition of the Company and
     its subsidiaries, taken as a whole. The Company does not do business under
     any fictitious business name.

          (2)  The Company has the power and authority to execute, deliver and
     perform this agreement and all obligations required and has taken all
     necessary action to authorize this agreement and the execution, delivery
     and performance of this agreement and all obligations required. Except as
     shall have been obtained, no consent of any other person including, without
     limitation, stockholders and creditors of the Company, and no license,
     permit, approval or authorization of, exemption by, notice or report to, or
     registration, filing or declaration with, any governmental authority is
     required by the Company in connection with this agreement or the execution,
     delivery, performance, validity or enforceability of this agreement and all
     obligations required. This agreement has been, and each instrument or
     document required will be, executed and delivered by a duly authorized
     officer of the Company, and this agreement constitutes, and each instrument

                                       9
<PAGE>

     or document required when executed and delivered hereunder will constitute,
     the legally valid and binding obligation of the Company enforceable against
     the Company in accordance with its terms.

          (3)  The execution, delivery and performance of this agreement and the
     documents or instruments required will not violate any provision of any
     existing law or regulation binding on the Company, or any order, judgment,
     award or decree of any court, arbitrator or governmental authority binding
     on the Company, or the governing instruments of, or any securities issued
     by, the Company or of any mortgage, indenture, lease, contract or other
     agreement, instrument or undertaking to which the Company is a party or by
     which the Company or any of its assets may be bound, the violation of which
     would have a material adverse effect on the business operations, assets or
     financial condition of the Company and its subsidiaries, taken as a whole,
     and will not result in, or require, the creation or imposition of any lien
     on any of its property, assets or revenues pursuant to the provisions of
     any such mortgage, indenture, lease, contract or other agreement,
     instrument or undertaking (other than the pledge of amounts payable to the
     Manager to secure the Manager's obligations to its lenders).

     (c)  The Manager represents and warrants to the Company that:

          (1)  The Manager is duly organized, validly existing and in good
     standing under the laws of California, has the corporate power to own its
     assets and to transact the business in which it is now engaged and is duly
     qualified to do business and is in good standing under the laws of each
     jurisdiction where its ownership or lease of property or the conduct of its
     business requires such qualification, except for failures to be so
     qualified, authorized or licensed that could not in the aggregate have a
     material adverse effect on the business operations, assets or financial
     condition of the Manager and its subsidiaries, taken as a whole. The
     Manager does not do business under any fictitious business name

          (2)  The Manager has the corporate power and authority to execute,
     deliver and perform this agreement and all obligations required and has
     taken all necessary corporate action to authorize this agreement and the
     execution, delivery and performance of this agreement and all obligations
     required. Except as shall have been obtained, no consent of any other
     person including, without limitation, stockholders and creditors of the
     Manager, and no license, permit, approval or authorization of, exemption
     by, notice or report to, or registration, filing or declaration with, any
     governmental authority is required by the Manager in connection with this
     agreement or the execution, delivery, performance, validity or
     enforceability of this Agreement and all obligations required. This
     agreement has been and each instrument or document required will be
     executed and delivered by a duly authorized officer of the Manager, and
     this agreement constitutes, and each instrument or document required when
     executed and delivered will constitute, the legally valid and binding
     obligation of the Manager enforceable against the Manager in accordance
     with its terms.

                                       10
<PAGE>

          (3)  The execution, delivery and performance of this agreement and the
     documents or instruments required, will not violate any provision of any
     existing law or regulation binding on the Manager, or any order, judgment,
     award or decree of any court, arbitrator or governmental authority binding
     on the Manager, or the governing instruments of, or any securities issued
     by, the Manager or of any mortgage, indenture, lease, contract or other
     agreement, instrument or undertaking to which the Manager is a party or by
     which the Manager or any of its assets may be bound, the violation of which
     would have a material adverse effect on the business operations, assets, or
     financial condition of the Manager and its subsidiaries, taken as a whole,
     and will not result in, or require, the creation or imposition of any lien
     on any of its property, assets or revenues pursuant to the provisions of
     any such mortgage indenture, lease, contract or other agreement, instrument
     or undertaking.

     Section 14.  Notices.  Unless expressly provided otherwise, all notices,
                  -------
requests, demands and other communications required or permitted under this
agreement shall be in writing and shall be deemed to have been duly given, made
and received when (1) delivered by hand or (2)  upon actual receipt of
registered or certified mail, postage prepaid.  The parties may deliver to each
other notice by electronically transmitted facsimile copies provided that such
facsimile notice is followed within twenty-four hours by any type of notice
otherwise provided for in this paragraph.  Any notice shall be duly addressed to
the parties as follows:

     (a)  If to the Company:

          99 El Camino Real
          Menlo Park, CA 94025
          Attn:  Board of Directors
          Fax:  (650) 328-3066

     (b)  If to the Manager:

          99 El Camino Real
          Menlo Park, CA 94025
          Attn:  Susan Fox, President
          Fax:  (650) 328-3066

     Any party may alter the address to which communications or copies are to be
sent by giving notice of such change of address.

     Section 15.  Assignments.  Except as set forth in this section, this
                  -----------
agreement shall terminate automatically in the event of its assignment, in whole
or in part, by the Manager, other than the pledge of amounts payable to the
Manager to secure the Manager's obligations to its lenders, unless such
assignment is consented to in writing by the Company.  Any such consented
assignment shall bind the assignee in the same manner as the Manager is bound.
In addition, the assignee shall execute and deliver to the Company a counterpart
of this agreement naming such assignee as Manager.  This agreement shall not be
assigned by the Company without the prior

                                       11
<PAGE>

written consent of the Manager, except in the case of assignment by the Company
to a REIT or other organization which is a successor, by merger, consolidation
or purchase of assets, to the Company, in which case such successor organization
shall be bound by this agreement and by the terms of such assignment in the same
manner as the Company is bound.

     Section 16.  Entire Agreement.  This agreement contains the entire
                  ----------------
agreement and understanding among the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter.  The express terms
hereof control and supersede any course of performance or usage of the trade
inconsistent with any of the terms.  This agreement may not be modified or
amended other than by an agreement in writing.

     Section 17.  Controlling Law.  This agreement and all questions relating to
                  ---------------
its validity, interpretation, performance and enforcement shall be governed by
and construed, interpreted and enforced in accordance with the laws of the State
of California.

     Section 18.  Waivers.  Neither the failure nor any delay on the part of a
                  -------
party to exercise any right, remedy, power or privilege under this agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any right, remedy, power or privilege, nor shall any waiver of
any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence.  No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.

     Section 19.  Execution in Counterparts.  This agreement may be executed in
                  -------------------------
any number of counterparts.

                                       12
<PAGE>

     Section 20.  Provisions Separable.  The provisions of this agreement are
                  --------------------
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.

     The parties hereto have executed this agreement as of the date first
written above.

                              Primecore Mortgage Trust, Inc.,
                              a Maryland corporation


                              By /s/ Michael Heren
                                 -----------------------------
                                Michael Heren, Vice President

                              Primecore Funding Group, Inc.
                              a California corporation


                              By /s/ Susan Fox
                                 -----------------------------
                                Susan Fox, President

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