SRE FEE AGREEMENT
THIS FEE AGREEMENT (this “Agreement”) is entered into effective as of July 24,
2014 (the “Effective Date”), by and between IMH Financial Corporation, a
Delaware corporation (“IMH”), and SRE Monarch, LLC, a Delaware limited liability
company (“SRE”).
In consideration of the covenants and promises contained in this Agreement, and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1.    Initial Term. The initial term of this fee arrangement shall commence on
the Effective Date and expire on the earlier of (a) the third (3rd) anniversary
of the Effective Date, or (b) the first day hereafter on which neither SRE nor
any of its affiliates owns or controls, directly or indirectly, any shares of
Series B-2 cumulative convertible preferred stock, whether on account of the
redemption, conversion or transfer of such shares (the “Initial Term”). As used
in this Agreement, the “Term” shall mean the Initial Term, together with any
Renewal Term (as defined below).
2.    Renewal Term. Upon the expiration of the Initial Term, provided this
Agreement has not been terminated by IMH or SRE pursuant to the terms of this
Agreement, the Initial Term shall be automatically extended for successive two
(2) year terms (each, a “Renewal Term”) unless either IMH or SRE gives the other
a written notice of non-renewal at least two hundred and seventy days (270) days
prior to the expiration of the Initial Term or the applicable Renewal Term (the
“Non-Renewal Notice”). If any such Non-Renewal Notice is not given, this
Agreement shall immediately and automatically renew and shall terminate at the
end of the then applicable Renewal Term. Any such Non-Renewal Notice shall be
communicated by written notice (a “Notice of Termination”) from one party hereto
to the other party hereto in accordance with Section 7.10.
3.    Fees.    If during the Term, IMH or any of its affiliates, directly or
indirectly, make or enter into any loan or investment in preferred equity or
mezzanine securities and such loan or investment arose from an opportunity
originated or identified by SRE: IMH shall pay or cause to be paid to SRE: (i) a
fee equal to 1.5% of the total amount or gross amount of any such investment or
loan that has a scheduled maturity date of greater than two (2) years; and (ii)
a fee equal to 1% of the total amount or gross amount of any such loan that has
a scheduled maturity date of two (2) years or less. If any third party broker or
other financial intermediary is involved in any such loan or investment, then
SRE shall only be entitled to fifty percent (50%) of the applicable fee
described above. Any fees due to SRE under this Agreement shall be paid
immediately upon closing of the corresponding loan or investment. The fees due
to SRE hereunder shall not include any fees the receipt of which requires a
license as a registered broker-dealer, investment adviser or underwriter. To the
extent that IMH elects to implement or effect any securities transaction, IMH
shall do so independent of SRE and through, including, without limitation, legal
counsel, auditors, financial advisors and underwriters, as applicable, among
other qualified experts.
4.    Representations, Warranties and Covenants.

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4.1    SRE. SRE represents, warrants and covenants to IMH as follows:
4.1.1    Organization. SRE is duly organized, validly existing and in good
standing under the laws of its organization and has the requisite power and
authority to carry on its business as now being conducted.
4.1.2    Authority; Binding Obligation. SRE has all requisite power and
authority to enter into this Agreement and perform the Services. The execution
and delivery of this Agreement has been duly authorized by all necessary action
on the part of SRE. This Agreement has been duly executed and delivered by SRE
and, assuming due execution and delivery by IMH, constitutes the valid and
binding obligation of SRE, enforceable against SRE in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally
and by general principles of equity.
4.1.3    Conduct. SRE shall perform the Services in a diligent, timely and
competent manner. SRE has not held itself out as (x) a broker-dealer, or as a
person qualified to render the services of a broker-dealer, or (y) a party
willing or able to execute trades or assist others in routing or completing
securities transactions. Upon the expiration or earlier termination of the Term,
at the request of IMH, SRE shall return to IMH all property received by SRE in
connection with providing Services hereunder then in SRE’s possession.
4.2    The Company. IMH represents, warrants and covenants to SRE as follows:
4.2.1    Organization. IMH is duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the requisite corporate
power and authority to carry on IMH’s business as now being conducted.
4.2.2    Authority; Binding Obligation. IMH has all requisite corporate power
and authority to enter into this Agreement and perform its obligations
hereunder. The execution and delivery of this Agreement has been duly authorized
by all necessary action on the part of IMH. This Agreement has been duly
executed and delivered by IMH, and, assuming due execution and delivery by SRE,
constitutes the valid and binding obligation of IMH, enforceable against IMH in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally and by general principles of equity.

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5.    Relationship. IMH and SRE intend (a) that this Agreement shall not be an
employment agreement, and (b) that SRE shall be an independent contractor and
not an employee. SRE (and all employees and members thereof) shall operate at
all times as an independent contractor of IMH. Without limiting the generality
of the foregoing, nothing in this Agreement shall be construed as creating an
employer/employee relationship, partnership, joint venture, or other business
group between SRE and IMH.
6.    Confidentiality. SRE agrees that neither it nor its directors, officers,
employees, members, managers, partners, agents or representatives (collectively,
its “Representatives” and together with SRE, the “SRE Parties”) shall use or
disclose at any time, either during the term of this Agreement or thereafter,
any Confidential Information of which any such SRE Party is or becomes aware
pursuant to this Agreement, provided that any SRE Party may disclose any such
information to any other SRE Party, and use such information, in connection with
customary activities incident to SRE’s investment in IMH, including monitoring,
reporting or analysis with respect thereto, but not in connection with effecting
any transactions in securities of IMH.  Notwithstanding the foregoing, any SRE
Party may truthfully respond to a lawful and valid subpoena or other legal
process, but shall give IMH prior written notice thereof (to the extent lawfully
permitted to do so), and any SRE Party may disclose such Confidential
Information to the extent necessary or appropriate in connection with any audit
or review by any governmental or regulatory authority.  As used in this
Agreement, the term “Confidential Information” means information not generally
known to the public that any such SRE Party obtains from IMH, any of its
affiliates or any of their authorized representatives or agents regarding the
business, operations, financial condition, prospects or plans of IMH or any of
its affiliates.  Confidential Information, however, at any time, shall not
include any information that is generally available to the public as of such
date (other than as a result of any breach hereof by an SRE Party), nor shall it
include any information that any SRE Party obtained from any Person other than
IMH, its affiliates and their representatives or agents, provided that any such
Person was not known by the corresponding SRE Party to be subject to a duty or
contractual obligation to maintain such information in confidence. In any event,
SRE will be responsible for any breach of this Section 6 by any of its
Representatives and SRE agrees, at its sole expense, to take all reasonable
measures to assure that its Representatives do not make any prohibited or
unauthorized disclosure or use (including in legal proceedings) of the
Confidential Information.
7.    Miscellaneous.
7.1    Successors; No Assignment by SRE. This Agreement shall not, without the
prior written consent of IMH be assignable by SRE, other than to a controlled
affiliate of SRE. This Agreement may only be assigned by IMH to a successor to
all or substantially all of the business or assets of IMH and shall be binding
upon, and inure to the benefit of, such successor. IMH shall require any such
successor to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that IMH would be required to perform it if no
such succession had taken place. As used herein, “successor” or “assignee” shall
include any person, firm, corporation or other business entity which at any
time, whether by purchase, merger or otherwise, directly or indirectly acquires
the ownership of IMH or to which IMH assigns this Agreement by operation of law
of otherwise.

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7.2    Waiver. 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 binding unless in writing and signed by the party
asserted to have granted such waiver.
7.3    Modification. This Agreement may not be amended or modified other than by
a written agreement executed by IMH and SRE.
7.4    Complete Agreement. This Agreement (including, without limitation, the
Schedules attached hereto), together with the Transaction Documents (as defined
in the Series B-2 Cumulative Convertible Preferred Stock Subscription Agreement,
dated as of the date hereof, by and between IMH and SRE), now or hereafter in
effect, contains the entire agreement and final understanding between the
parties hereto with respect to the subject matter addressed herein between the
parties, and supersedes and replaces all prior negotiations and all agreements
proposed or executed, whether written or oral, with SRE and IMH concerning the
subject matter hereof. Any representation, promise or agreement not specifically
included in this Agreement shall not be binding upon or enforceable against any
party hereto. This Agreement constitutes an integrated agreement.
7.5    Severability. It is the desire and intent of the parties hereto that the
provisions of this Agreement be enforced to the fullest extent permissible under
the laws and public policies applied in each jurisdiction in which enforcement
is sought. Accordingly, if any particular provision of this Agreement shall be
adjudicated by a court of competent jurisdiction or an arbitrator, as the case
may be, to be invalid, prohibited or unenforceable under any present or future
law, and if the rights and obligations of any party under this Agreement shall
not be materially and adversely affected thereby, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction, and to this end, the provisions of this
Agreement are declared to be severable. Furthermore, in lieu of such invalid or
unenforceable provision, there shall be added automatically as a part of this
Agreement, a legal, valid and enforceable provision as similar in terms to such
invalid or unenforceable provision as may be possible. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
7.6    Governing Law. This Agreement shall, without regard to principles of
conflict of laws, be governed by the laws of the State of Delaware as to all
matters, including, without limitation, matters of validity, construction,
effect and performance.
7.7    Counterparts. This Agreement may be executed in counterparts, and each
counterpart, when executed, shall have the efficacy of a signed original.
Photographic copies of such signed counterparts may be used in lieu of the
originals for any purpose.

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7.8    Attorneys’ Fees. IMH shall reimburse SRE for any and all attorneys’ fees
and costs relating to the negotiation and execution of this Agreement. In the
event of a legal dispute between the parties hereto, the prevailing party shall
be entitled to receipt from the losing party of all attorneys’ fees and costs
related thereto.
7.9    Jurisdiction; Waiver of Jury Trial. Any judicial proceeding seeking to
enforce any provision of, or based on any right arising out of, this Agreement
may be brought only in the state or federal courts of the State of Arizona, and
by the execution and delivery of this Agreement, each of the parties hereto
accepts for themselves the exclusive jurisdiction of the aforesaid courts and
irrevocably consents to the jurisdiction of such courts (and the appropriate
appellate courts) in any such proceedings, waives any objection to venue laid
therein and agrees to be bound by the judgment rendered thereby in connection
with this Agreement or any agreement identified herein. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF THIS AGREEMENT.
7.10    Notices. Any notice to be given hereunder by any party to the other may
be effected by personal delivery, in writing, or by mail, registered or
certified, postage prepaid with return receipt requested. Mailed notices shall
be addressed to the parties at the addresses set forth on the signature page
hereof, but each party may change its address by written notice in accordance
with this Section 7.10. Notices shall be deemed communicated as of the actual
receipt or refusal of receipt.
7.11    Headings; Construction. The section and paragraph headings and titles
contained in this Agreement are inserted for convenience only, and they neither
form a part of this Agreement nor are they to be used in the construction or
interpretation of this Agreement. Where the context requires, the singular shall
include the plural, the plural shall include the singular, and any gender shall
include all other genders. Where specific language is used to clarify by example
a general statement contained herein, such specific language shall not be deemed
to modify, limit or restrict in any manner the construction of the general
statement to which it relates.

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8.    Indemnification. To the maximum extent permitted by law, IMH and its
respective successors and assigns (the “Indemnitor”) shall indemnify, protect,
defend and hold harmless SRE (and its members, employees, representatives and
agents) (the “Indemnitee”) from, for, and against any and all claims,
liabilities, liens, fines, demands, lawsuits, actions, losses, damages,
injuries, judgments, settlements, costs or expenses whether asserted in law or
in equity and including any claims made by regulatory agencies asserted against
the Indemnitee arising out of, in whole or in part, the actions or commissions
of the Indemnitor, this Agreement or the services contemplated hereby, other
than those which have arisen from the Indemnitee’s gross negligence, willful
misconduct or material breach of this Agreement (hereinafter, collectively,
“Claims”). The Indemnitor shall provide a legal defense with counsel reasonably
approved by the Indemnitee upon the first notice the Indemnitee sends to the
Indemnitor and the Indemnitor shall continue to provide such defense to the
Indemnitee until the matter is fully resolved by either final judgment,
settlement, or other release executed by the Indemnitee. The Indemnitor shall
indemnify the Indemnitee from, for and against all Claims, including, without
limitation, all legal fees, costs and expert fees and costs that the Indemnitee
may directly or indirectly sustain, suffer or incur as a result thereof. The
Indemnitor shall and does hereby assume on behalf of the Indemnitee, upon the
Indemnitee’s written demand, the amount of any costs allowed by law, and costs
identified herein, any settlement reached or any judgment that may be entered
against the Indemnitee, as a result of such Claims. The obligations of the
Indemnitor pursuant to this Section 8 shall survive the expiration or earlier
termination of this Agreement.

[Remainder of page intentionally left blank; signature pages follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the Effective Date.

“IMH”
 
 
IMH Financial Corporation,
a Delaware corporation
 
 
By:
/s/ Steven T. Darak
 
Name: Steven T. Darak
 
Its: Chief Financial Officer
 
 
Address for the Purpose of Notice:
 
 
4900 N. Scottsdale Rd #5000
Scottsdale, AZ 85251
 
 
 
 
“SRE”
 
 
SRE Monarch, LLC,
a Delaware limited liability company
 
 
By:
Singerman Real Estate Management Company, L.P.,
a Delaware limited partnership
Its:
Manager
 
 
By:
/s/ Seth Singerman
 
Name: Seth Singerman
 
Its: Manager
 
 
Address for the Purpose of Notice:
 
 
980 N. Michigan Ave.
Suite 1660
Chicago, IL 60611

[Signature Page to SRE Fee Agreement]