SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 19, 1999
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IMC MORTGAGE COMPANY
(Exact name of registrant as specified in its charter)
Florida 333-3954 59-3350574
(State or other (Commission file number) (I.R.S. employer
jurisdiction of identification no.)
incorporation or
organization)
5901 E. Fowler Avenue,
Tampa, Florida 33617
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (813) 984-2548
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Item 5. Other Events.
IMC Mortgage Company (the "Company") entered into an Agreement and Plan
of Merger (the "Merger Agreement") with Greenwich Street Capital Partners II,
L.P. ("Greenwich") and IMC 1999 Acquisition Co., Inc., a subsidiary owned by
Greenwich and certain of its affiliates ("Merger Sub"), on February 19, 1999.
Under the Merger Agreement, Merger Sub will merge with and into IMC
(the "Merger"). As a result of the Merger, Greenwich will receive newly issued
IMC common stock equal to 93.5% of the total common stock on a fully diluted
basis, leaving the existing common shareholders of IMC with 6.5% of the common
stock outstanding after the Merger. No payment will be made to IMC's common
shareholders in this transaction. Upon the consummation of the Merger, Greenwich
will enter into an amendment and restatement of its existing loan agreement with
IMC, pursuant to which Greenwich will make available to IMC an additional $40
million in working capital facilities, which includes $5 million that was made
available to IMC pursuant to an amendment, dated as of February 11, 1999 (the
"Amendment"), to the Greenwich Loan Agreement (as defined below).
The Merger is subject to a number of conditions including approval by
IMC's shareholders. There is no assurance that this transaction will be
consummated.
As previously announced, on October 16, 1998, IMC entered into a loan
agreement (the "Greenwich Loan Agreement") with Greenwich and certain of its
affiliates that provided IMC a $33 million standby revolving credit facility for
a period of up to 90 days. In consideration for providing the facility,
Greenwich received, among other things, exchangeable preferred stock
representing the equivalent of 40% of IMC's common stock. The Greenwich Loan
Agreement provides that under certain circumstances, upon IMC entering into a
definitive agreement which effectuates a change of control of IMC, Greenwich may
elect either to (a) receive repayment of the loan facility, plus accrued
interest at 10% per annum, and a take-out premium or (b) exchange its loans for
additional exchangeable preferred stock. The additional preferred stock that
would be issued to Greenwich would represent the equivalent of 50% of the IMC
common stock outstanding (in addition to the 40% issued to Greenwich on
execution of the Greenwich Loan Agreement). If Greenwich and IMC consummate the
transactions contemplated by the Merger Agreement, the Merger will supersede any
rights Greenwich has under the Greenwich Loan Agreement to exchange its loans
for equity in IMC or to receive the premium on repayment of the loan facility
contemplated by the Greenwich Loan Agreement.
Also as previously announced, on October 16, 1998, IMC had entered into
an intercreditor agreement with a lender under its revolving bank credit
facility. On February 18, 1999, Greenwich purchased at a discount from that
lender its interests in the revolving credit facility, which, on that date, had
a principal amount outstanding of $87.5 million.
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Simultaneously with the execution of the Merger Agreement, IMC entered
into amended and restated intercreditor agreements with three of its major
warehouse lenders and with Greenwich relating to the revolving credit bank
facility, the Greenwich Loan Agreement and the Amendment. Under those
agreements, the lenders agreed to keep their respective facilities in place for
a period of up to seventeen months if the Merger is consummated within five
months. If the Merger is not consummated within a five month period, after that
period, those lenders would no longer be subject to the requirements of the
amended and restated intercreditor agreements and would be free to take action,
if desired, under their respective loan agreements.
The foregoing discussion is qualified by reference to the full text of
the documents relating to the transactions described, including the Merger
Agreement, the Amendment and the amended and restated intercreditor agreements,
which are attached hereto as exhibits and are incorporated herein by reference
in their entirety.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits
10.62 Agreement and Plan of Merger dated as of February 19, 1999
among the Company, Greenwich Street Capital Partners II
L.P. and IMC 1999 Acquisition Co., Inc.
10.63 Amendment No. 1 dated as of February 11, 1999 to the Loan
Agreement dated as of October 12, 1998 among the Company,
Greenwich Street Capital Partners II L.P., Greenwich Fund,
L.P. and GSCP Offshore Fund, L.P.
10.64 Amendment No. 1 dated as of February 11, 1999 to the
Borrower Security Agreement dated as of October 12, 1998
among the Company, Greenwich Street Capital Partners II
L.P., Greenwich Fund, L.P. and GSCP Offshore Fund, L.P.
and Greenwich Street Capital Partners II L.P., as
collateral agent
2
<PAGE>
10.65 Amended and Restated Intercreditor Agreement dated as of
February 17, 1999 among the Company, Bear Stearns Home
Equity Trust, Bear, Stearns International Limited,
Greenwich Street Capital Partners II L.P., Greenwich Fund,
L.P. and GSCP Offshore Fund, L.P.
10.66 Amended and Restated Intercreditor Agreement dated as of
February 17, 1999 among the Company, Paine Webber Real
Estate Securities, Inc., Greenwich Street Capital Partners
II L.P., Greenwich Fund, L.P. and GSCP Offshore Fund, L.P.
10.67 Amended and Restated Intercreditor Agreement dated as of
February 17, 1999 among the Company, German American
Capital Corporation, Aspen Funding Corp., Greenwich Street
Capital Partners II L.P., Greenwich Fund, L.P. and GSCP
Offshore Fund, L.P.
10.68 Amended and Restated Forbearance and Intercreditor
Agreement dated as of February 17, 1999 among the Company,
Greenwich Street Capital Partners II L.P., Greenwich Fund,
L.P. and GSCP Offshore Fund, L.P.
3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, IMC
Mortgage Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: March 3, 1999 IMC MORTGAGE COMPANY
By: /s/
------------------------------------
Thomas G. Middleton
President, Chief Operating Officer and
Assistant Secretary
By: /s/
------------------------------------
Stuart D. Marvin
Chief Financial Officer
4
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
GREENWICH STREET CAPITAL PARTNERS II, L.P.,
IMC 1999 ACQUISITION CO., INC.
AND
IMC MORTGAGE COMPANY
DATED AS OF FEBRUARY 19, 1999
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<PAGE>
TABLE OF CONTENTS
2
ARTICLE I
THE MERGER
Section 1.1 The Merger...............................................2
Section 1.2 Closing..................................................2
Section 1.3 Effective Time of the Merger.............................2
Section 1.4 Directors and Officers of the Surviving Corporation......2
ARTICLE II
SHAREHOLDER APPROVAL
Section 2.1 Shareholder Meeting......................................3
Section 2.2 Proxy Statement/Prospectus; Registration Statement.......3
Section 2.3 No False or Misleading Statements........................4
ARTICLE III
CONVERSION AND EXCHANGE OF SECURITIES
Section 3.1 Conversion of Shares; Merger.............................4
Section 3.2 Dissenting Shares........................................6
Section 3.3 Exchange of Certificates.................................7
Section 3.4 Certain Adjustments......................................7
Section 3.5 No Liability.............................................8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GSCP
Section 4.1 Organization.............................................8
Section 4.2 Capitalization...........................................9
Section 4.3 Subsidiaries.............................................9
Section 4.4 Authority Relative to This Agreement.....................9
Section 4.5 Consents and Approvals; No Violations...................10
Section 4.6 Financial Statements....................................11
Section 4.7 Litigation..............................................11
Section 4.8 Absence of Undisclosed Liabilities......................11
Section 4.9 No Default..............................................11
Section 4.10 Information in Proxy Statement/Prospectus...............12
Section 4.11 Brokers.................................................12
Section 4.12 Disclosure..............................................12
Section 4.13 Funds Available.........................................12
Section 4.14 Investment Representation...............................12
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 5.1 Organization............................................13
Section 5.2 Capitalization..........................................14
Section 5.3 Company Subsidiaries....................................14
<PAGE>
Section 5.4 Authority Relative to This Agreement....................15
Section 5.5 Consents and Approvals: No Violations...................16
Section 5.6 Company SEC Reports.....................................17
Section 5.7 Absence of Certain Changes..............................17
Section 5.8 Litigation..............................................17
Section 5.9 Absence of Undisclosed Liabilities......................18
Section 5.10 No Default..............................................18
Section 5.11 Taxes...................................................18
Section 5.12 Property................................................20
Section 5.13 Compliance with Laws; Authorizations....................20
Section 5.14 Regulatory Filings......................................21
Section 5.15 Investments.............................................22
Section 5.16 Information in Proxy Statement..........................22
Section 5.17 Brokers.................................................22
Section 5.18 Employee Benefit Plans; ERISA...........................22
Section 5.19 Labor and Employee Relations............................25
Section 5.20 Environmental Matters...................................25
Section 5.21 Opinion of Financial Advisor............................26
Section 5.22 Contracts...............................................26
Section 5.23 Intellectual Property. ................................27
Section 5.24 Voting Requirements; Takeover Statutes..................28
Section 5.25 Disclosure..............................................28
Section 5.26 Transactions with Affiliates............................28
Section 5.27 Discontinued Operations.................................29
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.1 Conduct of Business by the Company Pending the Merger...29
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 Access and Information..................................32
Section 7.2 Solicitation............................................32
Section 7.3 Filings; Other Action...................................34
Section 7.4 Public Announcements....................................35
Section 7.5 NASDAQ Listing..........................................35
Section 7.6 Company Indemnification Provision.......................35
Section 7.7 Comfort Letter..........................................36
Section 7.8 Tax Matters.............................................36
Section 7.9 Additional Matters......................................36
Section 7.10 Shareholder Litigation..................................37
Section 7.11 Funding of Acquisition..................................37
<PAGE>
Section 7.12 Disclosure Letters......................................37
Section 7.13 Amendment to Preferred Stock Agreement..................37
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 8.1 Conditions to Each Party's Obligation to Effect
the Merger...........................................38
Section 8.2 Conditions to Obligation of the Company to Effect
the Merger...........................................38
Section 8.3 Conditions to Obligations of GSCP and Acquisition
to Effect the Merger.................................39
ARTICLE IX
TERMINATION
Section 9.1 Termination by Mutual Consent...........................40
Section 9.2 Termination by Either GSCP or the Company...............40
Section 9.3 Termination by the Company..............................41
Section 9.4 Termination by GSCP.....................................41
Section 9.5 Effect of Termination and Abandonment...................41
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Survival of Representations, Warranties and Agreements..42
Section 10.2 Notices.................................................42
Section 10.3 Descriptive Headings....................................43
Section 10.4 Entire Agreement; Assignment............................43
Section 10.5 Governing Law...........................................44
Section 10.6 Expenses................................................44
Section 10.7 Amendment...............................................44
Section 10.8 Waiver..................................................44
Section 10.9 Counterparts; Effectiveness.............................44
Section 10.10 Severability; Validity; Parties in Interest.............44
Section 10.11 Enforcement of Agreement................................44
SECTION 10.12 WAIVER OF JURY TRIAL....................................45
<PAGE>
TABLE OF DEFINED TERMS
Acquirors .................................................. Section 4.14
Acquisition ................................................ Preamble
Acquisition Balance Sheet .................................. Section 4.6
Acquisition Common Stock ................................... Section 3.1(a)
Acquisition Disclosure Letter .............................. Article IV
Acquisition Material Adverse Effect ........................ Section 4.1
Additional Advance ......................................... Recitals
Adjustment Event ........................................... Section 3.4
Affiliate .................................................. Section 5.26
Amendment No 1 ............................................ Recitals
Authorizations ............................................. Section 5.13(b)
Certificates ............................................... Section 3.1(e)
Closing .................................................... Section 1.2
Closing Date ............................................... Section 1.2
Code ....................................................... Recitals
Company .................................................... Preamble
Company Benefit Plan ....................................... Section 5.18(a)
Company Commonly Controlled Entity ......................... Section 5.18(a)
Company Common Stock ....................................... Section 3.1(b)
Company Contracts .......................................... Section 5.22(a)
Company Disclosure Letter .................................. Article V
Company Investments ........................................ Section 5.15
Company Material Adverse Effect ............................ Section 5.1
Company Preferred Stock .................................... Section 3.1(d)
Company SAR's .............................................. Section 5.18(e)
Company SEC Reports ........................................ Section 5.6
Company Stock Options ...................................... Section 5.2
Company Subsidiaries ....................................... Section 5.3(b)
Contracts .................................................. Section 5.22(a)
Control .................................................... Section 5.26
DGCL ....................................................... Section 1.1(a)
Dissenters Statute ......................................... Section 3.2(a)
Effective Time ............................................. Section 1.3
Encumbrance ................................................ Section 4.5
Environmental Laws ......................................... Section 5.20(a)
ERISA ...................................................... Section 5.18(b)
Exchange Act ............................................... Section 2.3
<PAGE>
FBCA ....................................................... Recitals
GAAP ....................................................... Section 4.6
Governmental Requirements .................................. Section 4.5
Government Entity .......................................... Section 4.5
GSCP ....................................................... Preamble
GSCP Funds ................................................. Recitals
HSR Act .................................................... Section 4.5
Indemnified Parties ........................................ Section 7.6
Initial GSCP Funds ......................................... Recitals
Initial Loan Agreement ..................................... Recitals
Interim Commitments ........................................ Recitals
Interim Loans .............................................. Recitals
Liabilities ................................................ Section 4.8
Loan Agreement ............................................. Recitals
Merger ..................................................... Recitals
Merger Consideration ....................................... Section 3.1(e)
Merger Conversion Ratio .................................... Section 3.1(b)
Mortgage Servicing Agreements .............................. Section 5.22(a)
Mortgage Loan .............................................. Section 6.1(o)
Person ..................................................... Section 3.5
Proxy Statement/Prospectus ................................. Section 2.2
Registration Statement ..................................... Section 2.2
Requisite Vote ............................................. Section 8.1(d)
SEC ........................................................ Section 2.2
Securities Act ............................................. Section 2.2
Shareholder Approval ....................................... Section 5.24(a)
Special Committee .......................................... Recitals
Special Meeting ............................................ Section 2.1
Subsidiary ................................................. Section 4.3(a)
Superior Proposal .......................................... Section 7.2(e)
Surviving Corporation ...................................... Section 1.1(a)
Surviving Corporation Common Stock ......................... Section 3.1(a)
Surviving Corporation Preferred Stock ...................... Section 3.1(d)
Takeover Proposal .......................................... Section 7.2(e)
Taxes ...................................................... Section 5.11(g)
Tax Returns ................................................ Section 5.11(g)
<PAGE>
EXHIBITS
Exhibit A: Form of Articles of Incorporation of the Surviving Corporation
Exhibit B: Form of By-laws of the Surviving Corporation
Exhibit C: Amendment No. 1 to Preferred Stock Purchase and Option
Agreement
Exhibit D: Commitment Letter re Loan Agreement
SCHEDULES
Schedule 6.1(f) Certain Assets of the Company and the Company Subsidiaries
Schedule 8.3(e) Certain Third-Party Consents
Schedule 8.3(g) Employment Agreements
Schedule 8.3(h) Certain Lenders
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of February 19, 1999, by and
among Greenwich Street Capital Partners II, L.P., a Delaware limited partnership
("GSCP"), IMC 1999 Acquisition Co., Inc., a Delaware corporation and a
wholly-owned subsidiary of GSCP and its affiliates ("Acquisition"), and IMC
Mortgage Company, a Florida corporation (the "Company").
WHEREAS, the Board of Directors of Acquisition and the Board of
Directors of the Company, acting upon the unanimous recommendation of a special
committee (the "Special Committee") comprised solely of "disinterested
directors" (as defined in Section 607.0901 of the Florida 1989 Business
Corporation Act (the "FBCA")) of the Company, which Board consists solely of
"disinterested directors", have each adopted this Agreement and approved the
merger of Acquisition with and into the Company (the "Merger");
WHEREAS, in connection with the Merger, (i) GSCP, GSCP Offshore Fund,
L.P. and Greenwich Fund, L.P. (collectively the "Initial GSCP Funds") have
entered into Amendment No. 1, dated February 11, 1999 ("Amendment No. 1"), to
the Loan Agreement, dated as of October 12, 1998 (the "Initial Loan Agreement"),
between the Company and the Initial GSCP Funds, providing for the Initial GSCP
Funds to extend to the Company additional Commitments (the "Interim
Commitments") to loan in the aggregate an additional $5,000,000 (the "Interim
Loans") from and after the date of execution and delivery of this Agreement and
(ii) the Initial GSCP Funds, Greenwich Street Employee Fund, L.P. and TRV
Executive Fund, L.P. (collectively, the "GSCP Funds") have entered a commitment
letter with Acquisition, dated as of February 19, 1999, obligating the GSCP
Funds, at the Effective Time (as hereinafter defined), to enter into an
amendment and restatement of the Initial Loan Agreement, between the Company, as
borrower, and the GSCP Funds, as lenders, pursuant to which such lenders will
agree to extend to the Surviving Corporation (as hereinafter defined)
commitments to loan in the aggregate an amount which, together with the Interim
Commitments, will equal an additional $40,000,000 (the "Additional Advance"),
subject to the terms and conditions set forth in the Initial Loan Agreement, as
amended and restated (the "Loan Agreement").
WHEREAS, GSCP, Acquisition and the Company intend that the Merger
qualify as a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing and the respective
<PAGE>
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. (a) Upon the terms and subject to the
conditions hereof, at the Effective Time (as defined in Section 1.3),
Acquisition shall be merged with and into the Company and the separate corporate
existence of Acquisition shall thereupon cease, and the Company shall be the
surviving corporation in the Merger (the "Surviving Corporation") and shall
retain its current name. The Merger shall have the effects set forth in the FBCA
and the General Corporation Law of the State of Delaware (the "DGCL"). Pursuant
to the Merger, (a) the Articles of Incorporation of the Surviving Corporation
shall be in the form attached hereto as Exhibit A, until thereafter amended as
provided by law and such Articles of Incorporation, and (b) the Bylaws of the
Surviving Corporation shall be in the form attached hereto as Exhibit B, until
thereafter amended as provided by law, such Bylaws, and the Articles of
Incorporation of the Surviving Corporation.
Section 1.2 Closing. The Company shall as promptly as practicable
notify GSCP and Acquisition, and GSCP shall as promptly as practicable notify
the Company, when the conditions to such party's obligation to effect the Merger
contained in Article VIII have been satisfied. The closing of the Merger (the
"Closing") shall take place at the offices of Debevoise & Plimpton, 875 Third
Avenue, New York, New York 10022, at 10:00 a.m., New York time, on the third
business day after the later of these notices has been given (the "Closing
Date"), unless another date or place is agreed to in writing by the parties
hereto; provided, however, that the parties hereto agree to use all reasonable
efforts to consummate the Closing by June 30, 1999 or as soon as practicable
thereafter.
Section 1.3 Effective Time of the Merger. The Merger shall become
effective when properly executed Articles of Merger meeting the requirements of
Section 607.1105 of the FBCA are duly filed with the Department of State of
Florida and when a properly executed Certificate of Merger meeting the
requirements of Section 252 of the DGCL is duly filed with the Secretary of
State of Delaware (the "Effective Time"), which filings shall be made at the
time of or immediately after the Closing.
Section 1.4 Directors and Officers of the Surviving Corporation. The
directors and officers of Acquisition immediately prior to the Effective Time
shall be the
<PAGE>
directors and officers of the Surviving Corporation at the Effective Time, and
shall hold office until their respective successors shall have been duly elected
or appointed and qualified or until their earlier death, resignation or removal
in accordance with the Articles of Incorporation and Bylaws of the Surviving
Corporation.
ARTICLE II
SHAREHOLDER APPROVAL
Section 2.1 Shareholder Meeting. In order to consummate the Merger, the
Company, acting through its Board of Directors, shall, in accordance with
applicable law, duly call, give notice of, convene and hold a special meeting of
its shareholders (the "Special Meeting"), as soon as practicable after the
Registration Statement (as hereinafter defined) is declared effective, for the
purpose of voting upon the adoption and approval of this Agreement and the
Merger. The Company shall include in the Proxy Statement/Prospectus (as
hereinafter defined) the recommendation of the Board of Directors of the
Company, acting upon the unanimous recommendation of the Special Committee, that
shareholders of the Company vote in favor of the adoption and approval of this
Agreement and the Merger. GSCP agrees to vote all shares of capital stock of the
Company that it owns and that may vote in favor of the adoption and approval of
this Agreement and the Merger, and to cause its controlled affiliates to do the
same.
Section 2.2 Proxy Statement/Prospectus; Registration Statement. In
connection with the solicitation of approval of the principal terms of this
Agreement and the Merger by the Company's shareholders, the Company and
Acquisition shall as promptly as practicable prepare and file with the
Securities and Exchange Commission (the "SEC") a preliminary proxy statement
relating to the Merger, this Agreement and the other transactions contemplated
hereby and use all reasonable efforts to obtain and furnish the information
required to be included by the SEC in the Proxy Statement/Prospectus. The
Company, after consultation with GSCP, shall respond as promptly as reasonably
practicable to any comments made by the SEC with respect to the preliminary
proxy statement and shall cause a definitive proxy statement to be filed with
the SEC and mailed to its shareholders at the earliest reasonably practicable
date. Such definitive proxy statement shall, if required, also constitute a
prospectus of the Surviving Corporation with respect to the Surviving
Corporation Common Stock (as hereinafter defined) to be issued in the Merger
(such proxy statement and/or prospectus are referred to herein as the "Proxy
Statement/Prospectus"), which prospectus is to be filed with the SEC as part of
a registration statement on Form S-4 (the "Registration Statement"), if
required, for the purpose of registering such shares of Common Stock under the
Securities Act of 1933, as amended (the "Securities Act"). The Company shall
prepare and as promptly as reasonably practicable file with the SEC the
Registration Statement. The Company, after consultation with GSCP, shall respond
as promptly as reasonably practicable to any comments made by the SEC with
respect to the Registration Statement, and shall use all reasonable efforts to
have the Registration Statement declared effective
<PAGE>
by the SEC. The Company shall also take any action required to be taken under
applicable state securities laws in connection with the issuance of Surviving
Corporation Common Stock in the Merger, and GSCP and Acquisition shall furnish
all information concerning GSCP and Acquisition as may be reasonably requested
by the Company in connection with such action and the filings.
Section 2.3 No False or Misleading Statements. The information provided
and to be provided by each of GSCP, Acquisition and the Company specifically for
use in the Registration Statement and the Proxy Statement/Prospectus shall not,
with respect to the information supplied by such party, in the case of the
Registration Statement, on the date the Registration Statement becomes
effective, and, in the case of the Proxy Statement/Prospectus, on the date upon
which the Proxy Statement/Prospectus is mailed to the shareholders of the
Company or on the date upon which approval of the Merger by the shareholders of
the Company is obtained, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. Each of GSCP, Acquisition and the Company agrees to
correct as promptly as reasonably practicable any such information provided by
it that shall have become false or misleading in any material respect. The
Company shall as promptly as practicable take all steps reasonably necessary to
file with the SEC and have declared effective or cleared by the SEC any
amendment or supplement to the Registration Statement or the Proxy
Statement/Prospectus so as to correct the same and to cause the Proxy
Statement/Prospectus as so corrected to be disseminated to the Company's
shareholders to the extent required by applicable law. The Registration
Statement and the Proxy Statement/Prospectus shall comply as to form in all
material respects with the provisions of the Securities Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and other applicable law.
ARTICLE III
CONVERSION AND EXCHANGE OF SECURITIES
Section 3.1 Conversion of Shares; Merger. At the Effective Time, by
virtue of the Merger and without any action on the part of any of the parties
hereto or any holder of any of the following securities:
(a) Each share of common stock, par value $.01 per share, of
Acquisition (the "Acquisition Common Stock") issued and outstanding immediately
prior to the Effective Time shall be converted into the right to receive
4,916.045 duly authorized, validly issued, fully paid and nonassessable shares
of common stock, par
<PAGE>
value $0.01 per share, of the Surviving Corporation (the "Surviving Corporation
Common Stock"), which shall represent in the aggregate approximately 93.5% of
the outstanding shares of Surviving Corporation Common Stock after giving effect
to the transactions contemplated hereby.
(b) Each share of common stock, par value $0.001 per share, of the
Company (the "Company Common Stock") issued and outstanding immediately prior to
the Effective Time, shall be converted into 0.01 share (the "Merger Conversion
Ratio") of Surviving Corporation Common Stock, which shall represent in the
aggregate approximately 6.5% of the outstanding shares of Surviving Corporation
Common Stock after giving effect to the transactions contemplated hereby.
Each Company Stock Option (as hereinafter defined) shall become
exercisable for a number of shares of Surviving Corporation Common Stock equal
to the product of the number of shares of Company Common Stock for which such
Company Stock Option was exercisable immediately prior to the Effective Time
multiplied by the Merger Conversion Ratio (as adjusted pursuant to Section 3.4
hereof only to the extent that the number of shares for which any such Company
Stock Option was exercisable had been adjusted similarly pursuant to an
Adjustment Event (as hereinafter defined)). Each Company Stock Option (as
hereinafter defined) shall become exercisable at the time specified in such
Company Stock Option and for an exercise price equal to the product of the
exercise price for which such Company Stock Option was exercisable immediately
prior to the Effective Time multiplied by the Merger Conversion Ratio (as
adjusted pursuant to Section 3.4 hereof only to the extent that the exercise
price for which any such Company Stock Option was exercisable had been adjusted
similarly pursuant to an Adjustment Event (as hereinafter defined)). The Company
shall take all reasonable actions necessary or advisable with regard to any
Company Benefit Plan (as hereinafter defined) or Company Stock Option (as
hereinafter defined) in order to implement the changes to such Company Stock
Options described in this Section 3.1(b). Any fractional shares of the Surviving
Corporation Common Stock resulting from the operation of this Section 3.1(b)
shall remain outstanding after the Merger.
(c) All shares of Company Common Stock that are owned by Acquisition
shall, at the Effective Time, be cancelled and retired and shall cease to exist
and no consideration shall be delivered in exchange therefor.
(d) Each share of preferred stock, par value $.01 per share, of the
Company (the "Company Preferred Stock") of any class issued and outstanding
immediately prior to the Effective Time shall be converted into duly authorized,
validly issued, fully paid and non-assessable share of preferred stock, par
value $.01 per share, of the Surviving Corporation (the "Surviving Corporation
Preferred Stock") or cancelled as follows:
<PAGE>
(i) Each share of Class A Company Preferred Stock shall be converted
into one share of Class A Preferred Stock, par value $.01 per share, of the
Surviving Corporation;
(ii) Each share of Class B Company Preferred Stock shall be converted
into one share of Class B Preferred Stock, par value $.01 per share, of the
Surviving Corporation;
(iii) Each share of Class C Exchangeable Company Preferred Stock shall
be cancelled and retired and shall cease to exist and no consideration shall be
delivered in exchange therefor;
(iv) Each share of Class D Company Preferred Stock shall be cancelled
and retired and shall cease to exist and no consideration shall be delivered in
exchange therefor.
(e) On and after the Effective Time, all shares of Acquisition Common
Stock or Company Common Stock converted into shares of Surviving Corporation
Common Stock as provided in this Section 3.1 (as adjusted pursuant to Section
3.3, the "Merger Consideration") shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each
certificate previously evidencing any such shares (the "Certificates") of
Acquisition Common Stock or Company Common Stock shall thereafter represent the
right to receive, upon the surrender of such Certificate in accordance with the
provisions of Section 3.2, only the Merger Consideration. The holders of such
Certificates previously evidencing such Shares of Acquisition Common Stock or
Company Common Stock outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such shares of Acquisition Common Stock
or Company Common Stock except as otherwise provided herein or by law.
Section 3.2 Dissenting Shares. (a) Notwithstanding anything in this
Agreement to the contrary, each share of Company Common Stock which is issued
and outstanding immediately prior to the Effective Time and which is held by a
shareholder who has properly exercised dissenters' rights with respect thereto,
if dissenters' rights are provided with respect to the transactions contemplated
hereby, in accordance with Sections 607.1301, 607.1302 and 607.1303 of the FBCA
(the "Dissenters Statute" and such shares "Dissenting Shares") shall not be
converted into or be exchangeable for the right to receive the Merger
Consideration, but holders of Dissenting Shares shall be entitled to receive
payment of the fair value of such Dissenting Shares in accordance with the
provisions of such Dissenters Statute, except that any Dissenting Shares held by
a
<PAGE>
shareholder who shall thereafter withdraw such demand for appraisal of such
Dissenting Shares or lose the right to such payment as provided in the
Dissenters Statute shall thereupon be deemed to have been converted into and to
have become exchangeable for, at the Effective Time, the right to receive the
Merger Consideration applicable to such Shares, without any interest thereon.
(b) The Company shall give GSCP (i) prompt notice of any written notice
or demand under the Dissenters Statute with respect to any Company Common Stock,
any withdrawal of any such notice or demand, and any other instruments delivered
pursuant to the Dissenters Statute and received by the Company, including in
each case details regarding the number of Dissenting Shares and the holders
thereof, and (ii) the right to participate in all negotiations and proceedings
with respect to any demands under the Dissenters Statute with respect to any
Company Common Stock. The Company shall cooperate with GSCP concerning, and
shall not, except with the prior written consent of GSCP, voluntarily make any
payment with respect to, or offer to settle or settle, any such demands.
Section 3.3 Exchange of Certificates. (a) Upon the surrender of each
Certificate representing shares of Acquisition Common Stock or Company Common
Stock, the Surviving Corporation shall issue to the holder of such Certificate
the Merger Consideration, and such Certificate shall forthwith be cancelled.
Until so surrendered and exchanged, each such Certificate that prior to the
Effective Time represented shares of Acquisition Common Stock or Company Common
Stock shall represent solely the right to receive the Merger Consideration. Upon
the surrender of each certificate representing shares of Class A Company
Preferred Stock, such certificate shall be cancelled, and the Surviving
Corporation shall issue to the holder of such certificate a new certificate
representing the same number of shares of Class A Preferred Stock.
(b) After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of any shares of Acquisition Common
Stock, Company Common Stock, Class A Company Preferred Stock or Class B Company
Preferred Stock. If, after the Effective Time, Certificates formerly
representing shares of Acquisition Common Stock, Company Common Stock, Class A
Company Preferred Stock or Class B Company Preferred Stock are presented to the
Surviving Corporation, they shall be cancelled and (subject to applicable
abandoned property, escheat and similar laws) exchanged for Merger Consideration
or Surviving Corporation Preferred Stock, as provided in this Article III.
(c) No dividends or other distributions declared or made after the
Effective Time with respect to shares of Surviving Corporation Common Stock
shall be paid to the holder of any unsurrendered Certificate with respect to the
shares of Surviving Corporation Common Stock such holder is entitled to receive
pursuant to Section 3.3 until the holder of such Certificate shall surrender
such Certificate, in accordance with the
<PAGE>
provisions of this Agreement.
Section 3.4 Certain Adjustments. If after the date hereof and on or
prior to the Effective Date the outstanding shares of Acquisition Common Stock
or Company Common Stock shall be changed into a different number of shares by
reason of any reclassification, recapitalization, split-up, combination or
exchange of shares, or any dividend payable in stock or other securities shall
be declared thereon with a record date within such period, or any similar event
shall occur, other than the recapitalization pursuant to the Merger as
contemplated hereby (any such action, an "Adjustment Event"), the Merger
Consideration and the Merger Conversion Ratio shall be adjusted to provide to
the holders of Acquisition Common Stock and Company Common Stock the same
proportionate ownership as contemplated by this Agreement prior to such
Adjustment Event.
Section 3.5 No Liability. Neither GSCP, Acquisition, the Company nor
the Surviving Corporation shall be liable to any holder of shares of Company
Common Stock for any Merger Consideration in respect of such shares (or
dividends or distributions with respect thereto) delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law. In the
event any Certificate shall have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the person claiming such Certificate to be lost,
stolen or destroyed and, if required by the Surviving Corporation, the posting
by such person of a bond in customary form and amount as indemnity against any
claim that may be made against it with respect to such Certificate, the
Surviving Corporation will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration, without any interest or other payments
thereon.
"Person" or "person" shall mean any natural person, firm, partnership,
association, corporation, company, trust, business trust, Governmental Entity
(as hereinafter defined) or other entity.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GSCP
Except as otherwise disclosed to the Company in a letter delivered to
it prior to the execution hereof (which letter contains appropriate references
to identify the representations and warranties to which the information in such
letter relates and which letter is incorporated herein and made a part hereof)
(the "Acquisition Disclosure Letter"), GSCP represents and warrants to the
Company as follows:
Section 4.1 Organization. Acquisition is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with the corporate power and authority and all necessary governmental approvals
to own, lease
<PAGE>
and operate its properties and to carry on its business as it is now being
conducted or presently proposed to be conducted. Acquisition is duly qualified
as a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities makes such qualification necessary, except where
the failure to be so qualified would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the business,
assets, liabilities, results of operations or financial condition of
Acquisition, or materially adversely affect the ability of GSCP or Acquisition
to consummate the transactions contemplated hereby (an "Acquisition Material
Adverse Effect"). Acquisition is a direct, wholly-owned, subsidiary of GSCP that
was incorporated on February 11, 1999. GSCP is a limited partnership, duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with the limited partnership power and authority and all necessary
governmental approvals, to own, lease and operate its properties and to carry on
its business as it is now being conducted or presently proposed to be conducted.
GSCP is duly qualified as a foreign limited partnership to do business, and is
in good standing, in each jurisdiction where the character of its properties
owned or held under lease or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified would not,
individually or in the aggregate, reasonably be expected to have an Acquisition
Material Adverse Effect.
Section 4.2 Capitalization. As of the date hereof: (i) the authorized
capital stock of Acquisition consists of 1,000 shares of Acquisition Common
Stock, and (ii) 1,000 shares of Acquisition Common Stock were issued,
outstanding and held by the GSCP Funds. All of the issued and outstanding shares
of capital stock of Acquisition are validly issued, fully paid and nonassessable
and free of preemptive rights. Except as set forth above, there are no shares of
capital stock of Acquisition issued or outstanding or any agreements or
commitments obligating Acquisition to issue or acquire any shares of its capital
stock.
Section 4.3 Subsidiaries. (a) Acquisition has no Subsidiaries.
"Subsidiary" or "subsidiary" shall mean each corporation or other
Person in which a Person owns or controls, directly or indirectly, capital stock
or other equity interests representing more than 50% of the outstanding voting
stock or other equity interests.
(b) Acquisition does not directly or indirectly own any equity or
similar interest in, or any interest convertible into or exchangeable or
exercisable for any equity
<PAGE>
or similar interest in, any corporation, partnership, joint venture or other
business association or entity.
Section 4.4 Authority Relative to This Agreement. Acquisition has the
corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by the Board of Directors of Acquisition, and by the GSCP Funds, and
no other corporate proceedings on the part of Acquisition are necessary to
authorize this Agreement or the transactions contemplated hereby. GSCP has the
limited partnership power and authority to enter into this Agreement and to
carry out its obligations hereunder. The execution, delivery and performance of
this Agreement by GSCP and the consummation by GSCP of the transactions
contemplated hereby have been duly authorized by the managing general partner of
GSCP, and no other proceedings on the part of GSCP are necessary to authorize
this Agreement or the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by Acquisition and GSCP and (assuming
this Agreement constitutes a valid and binding obligation of the Company)
constitutes a valid and binding agreement of Acquisition and GSCP, enforceable
against Acquisition and GSCP in accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium and other laws affecting
creditors' rights generally from time to time in effect and to general equitable
principles.
Section 4.5 Consents and Approvals; No Violations. Except (a) for
applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), the Securities Act, the Exchange Act, state or
foreign laws relating to takeovers, state securities or blue sky laws and the
regulations promulgated thereunder, state banking statutes and other state laws
in respect of change of control of mortgage bankers, mortgage loan originators
or mortgage loan servicers and the regulations promulgated thereunder, and
similar matters and the filing of the Certificate of Merger as required by the
DGCL and the filing of the Articles of Merger as required by the FBCA
(collectively, the "Governmental Requirements"), or (b) where the failure to
make any filing with, or to obtain any permit, authorization, consent or
approval of, any court or tribunal or administrative, governmental or regulatory
body, agency, commission, division, department, public body or other authority
(a "Government Entity") would not prevent or delay the consummation of the
Merger, or otherwise prevent GSCP or Acquisition from performing its obligations
under this Agreement, and would not individually or in the aggregate reasonably
be expected to have an Acquisition Material Adverse Effect, no filing with, and
no permit, authorization, consent or approval of, any Governmental Entity is
necessary for the execution, delivery and performance of this Agreement by GSCP
or Acquisition and the consummation of the transactions contemplated hereby.
Neither the execution, delivery or performance of this Agreement by GSCP or
Acquisition , nor the consummation by GSCP or Acquisition of the Merger and the
other transactions contemplated hereby, nor compliance by GSCP or Acquisition
<PAGE>
with any of the provisions hereof, will (i) conflict with or result in any
breach of any provisions of the Certificate of Incorporation or Bylaws of
Acquisition or similar organizational documents of GSCP, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation,
acceleration, vesting, payment, exercise, suspension or revocation) under, any
of the terms, conditions, or provisions of any note, bond, mortgage, deed of
trust, security interest, indenture, license, contract, agreement, plan or other
instrument or obligation to which GSCP or Acquisition is a party or by which
either of them or any of their properties or assets may be bound, (iii) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
GSCP or Acquisition or any of their properties or assets, (iv) result in the
creation or imposition of any Encumbrance on any asset of GSCP or Acquisition,
or (v) cause the suspension or revocation of any permit, license, governmental
authorization, consent or approval necessary for GSCP or Acquisition to conduct
its business as currently conducted, except in the case of clauses (ii), (iii),
(iv) and (v) for violations, breaches, defaults, terminations, cancellations,
accelerations, vestings, payments, exercises, creations, impositions,
suspensions or revocations which would not individually or in the aggregate
reasonably be expected to have an Acquisition Material Adverse Effect.
"Encumbrance" shall mean any mortgage, pledge, lien, charge, encumbrance,
defect, security interest, claim, option or restriction of any kind.
Section 4.6 Financial Statements. The balance sheet of Acquisition
(including any related notes and schedules) at February 11, 1999 (the
"Acquisition Balance Sheet"), fairly present, in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis (except as
may be indicated in the notes thereto), the financial position of Acquisition as
of the date thereof. Acquisition was organized on February 11, 1999 and has
conducted no business except in connection with the transactions contemplated
hereby and has no material liabilities.
Section 4.7 Litigation. Except as set forth in Section 4.7 of the
Acquisition Disclosure Letter, there is no suit, action, proceeding or
investigation (whether at law or equity, before or by any federal, state or
foreign court, tribunal, commission, board, agency or instrumentality, or before
any arbitrator) pending or, to the knowledge of GSCP, threatened against or
affecting GSCP or Acquisition, which, individually or in the aggregate, would
reasonably be expected to have an Acquisition Material Adverse Effect, nor is
there any judgment, decree, injunction, rule or order of any court, governmental
department, commission, agency, instrumentality or arbitrator outstanding
against GSCP or Acquisition having, or which, insofar as can reasonably be
foreseen, in the future would reasonably be expected to have an Acquisition
Material
<PAGE>
Adverse Effect.
Section 4.8 Absence of Undisclosed Liabilities. Except for liabilities
or obligations (i) which are accrued or reserved against in the Acquisition
Balance Sheet (or reflected in the notes thereto) or (ii) disclosed in Section
4.8 of the Acquisition Disclosure Letter, Acquisition does not have any
liabilities or obligations of any nature whatsoever (whether absolute, accrued,
contingent or otherwise) ("Liabilities") required by GAAP to be set forth on the
balance sheet of Acquisition.
Section 4.9 No Default. Except as set forth in Section 4.9 of the
Acquisition Disclosure Letter, neither GSCP nor Acquisition is in violation or
breach of, or default under (and no event has occurred which with notice or the
lapse of time or both would constitute a violation or breach of, or a default
under) any term, condition or provision of (a) its Certificate of Incorporation
or Bylaws or similar organization documents, (b) any note, bond, mortgage, deed
of trust, security interest, indenture, license, agreement, plan, contract,
lease, commitment or other instrument or obligation to which GSCP or Acquisition
is a party or by which they or any of their properties or assets may be bound or
affected, (c) any order, writ, injunction, decree, statute, rule or regulation
applicable to GSCP or Acquisition or any of their properties or assets, or (d)
any permit, license, governmental authorization, consent or approval necessary
for GSCP or Acquisition to conduct their respective businesses as currently
conducted, except in the case of clauses (b), (c) and (d) above for breaches,
defaults or violations which would not, individually or in the aggregate,
reasonably be expected to have an Acquisition Material Adverse Effect.
Section 4.10 Information in Proxy Statement/Prospectus. None of the
information supplied by GSCP or Acquisition for inclusion or incorporation by
reference in the Proxy Statement/Prospectus will, at the date mailed to
shareholders and at the time of the Special Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading.
Section 4.11 Brokers. No person is entitled to any brokerage, financial
advisory, finder's or similar fee or commission payable by GSCP or Acquisition
in connection with the Merger or the other transactions contemplated by this
Agreement based upon arrangements made by and on behalf of GSCP or Acquisition.
Section 4.12 Disclosure. No representation or warranty by GSCP or
Acquisition contained in or made pursuant to this Agreement, contains or will
contain any untrue statement of a material fact or omits or will omit to state
any material fact necessary, in light of the circumstances under which it was
made, to make the statements herein or therein not misleading. There is no fact
known to GSCP or Acquisition which
<PAGE>
would reasonably be expected to have an Acquisition Material Adverse Effect
which has not been set forth in this Agreement, including the Acquisition
Disclosure Letter.
Section 4.13 Funds Available. The GSCP Funds have available, without
resort to financing, all the capital resources necessary in order to effect the
transactions contemplated by this Agreement and will keep such funds available
until the Effective Time.
Section 4.14 Investment Representation. (a) Each of GSCP and its
affiliates that own shares in Acquisition (together with GSCP, the "Acquirors")
is either (i) an accredited investor as such term is defined in Rule 501
promulgated under the Securities Act, or (ii) by reason of its business or
financial experience, a sophisticated investor who has the capacity to protect
its interest in connection with the transactions contemplated hereunder and has
both appropriate knowledge and experience with the current business operations
and prospects of the Company and its Subsidiaries and in financial and business
matters to evaluate the merits and risks of the Surviving Corporation Common
Stock and the related transactions contemplated hereunder.
(b) The Surviving Corporation Common Stock is being acquired by each of
the Acquirors for its own account and not for any other Person, for investment
only and with no present intention of distributing or reselling such shares or
any part thereof or interest therein in any transaction that would violate the
securities laws of the United States of America or any state, without prejudice,
however, to the rights of each Acquiror at all times to sell or otherwise
dispose of all or any part of the Surviving Corporation Common Stock under an
effective registration statement or applicable exemption from registration under
the Securities Act and any applicable state securities law.
(c) The Company has made available to the Acquirors the opportunity to
ask questions of and receive answers from the Company concerning the Company and
the terms and conditions under which Surviving Corporation Common Stock will be
issued to them and to obtain any additional information which the Company
possesses or can acquire without unreasonable effort or expense that is
necessary to verify the accuracy of information furnished in connection with
this Agreement or in response to any request for information.
(d) To the extent the Surviving Corporation Common Stock is not
registered under the Securities Act, the Company may affix to the certificates
evidencing such shares legends in connection with the foregoing.
<PAGE>
(e) Nothing in Subsection (a) or (c) of this Section 4.14 shall change,
modify or otherwise affect any other provision of this Agreement, including
without limitation the representations and warranties in Article V hereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as otherwise disclosed to GSCP in a letter delivered to it prior
to the execution hereof (which letter contains appropriate references to
identify the representations and warranties herein to which the information in
such letter relates and which letter is incorporated herein and made a part
hereof) (the "Company Disclosure Letter"), the Company represents and warrants
to GSCP as follows:
Section 5.1 Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida and
has the corporate power and authority and all necessary governmental approvals
to own, lease and operate its properties and to carry on its business as it is
now being conducted or presently proposed to be conducted, except for such
government approvals, the failure of which to have, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect (as hereinafter defined). The Company is duly qualified as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the business, assets, liabilities, results of
operations or financial condition of the Company and the Company Subsidiaries,
taken as a whole, or materially adversely affect the ability of Company to
consummate the transactions contemplated hereby (a "Company Material Adverse
Effect"); provided, however, that Company Material Adverse Effect shall not
include any adverse effect resulting from (i) changes in general economic
conditions prior to the date of this Agreement, (ii) changes or developments in
the mortgage loan industry, generally, prior to the date of this Agreement, or
(iii) GSCP's unreasonably withholding its consent to any action by the Company
or a Company Subsidiary that is otherwise prohibited by Section 6.1 following a
request by the Company to take such action.
Section 5.2 Capitalization. As of the date hereof: (i) the authorized
capital stock of the Company consisted of 50,000,000 shares of Company Common
Stock and 10,000,000 shares of Company Preferred Stock, of which 500,000 shares
have been designated Class A Preferred Stock, 300,000 have been designated Class
B Preferred Stock, 800,000 have been designated Class C Exchangeable Preferred
Stock and 800,000 have been designated Class D Preferred Stock, (ii) 34,104,590
shares of Company
<PAGE>
Common Stock and 523,760.758 shares of Company Preferred Stock were issued and
outstanding, consisting of 500,000 shares of Class A Company Preferred Stock and
23,760.758 shares of Class C Exchangeable Company Preferred Stock, (iii) stock
options to acquire 1,556,384 shares of Company Common Stock were issued and
outstanding under the stock incentive plans of the Company (the "Company Stock
Options"), and (iv) such rights to acquire shares in order to effect a
conversion of preferred stock into shares as exist in favor of GSCP and its
affiliates pursuant to that $33 million loan agreement with IMC Mortgage Company
dated as of October 12, 1998 and the transactions contemplated thereby. All of
the issued and outstanding shares of Company Common Stock are validly issued,
fully paid and nonassessable and free of preemptive rights. Except as set forth
above and as set forth in Section 5.2 of the Company Disclosure Letter, there
are no shares of capital stock of the Company issued or outstanding, no options,
warrants or rights for, or other securities convertible into, capital stock of
the Company, and no agreements or commitments obligating the Company to issue,
sell or acquire any shares of its capital stock.
Section 5.3 Company Subsidiaries. (a) All of the shares of Surviving
Corporation Common Stock reserved for issuance in exchange for shares of
Acquisition Common Stock or Company Common Stock in accordance with this
Agreement will be, when so issued, duly authorized, validly issued, fully paid
and nonassessable and free of preemptive rights.
(b) Section 5.3 (b) of the Company Disclosure Letter sets forth the
name of each subsidiary of the Company (collectively, the "Company
Subsidiaries") and the state or jurisdiction of its incorporation or
organization. Each Company Subsidiary is a corporation or other entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has the corporate or other
similar power and authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its business as now being
conducted, except where any failure of the aforementioned to be the case would
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. Each Company Subsidiary is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except in such jurisdictions
where any failure of the aforementioned to be the case would not, individually
or in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.
(c) Except as set forth in Section 5.3(c) of the Company Disclosure
Letter, the Company is, directly or indirectly, the record and beneficial owner
of all of the outstanding shares of capital stock of each of the Company
Subsidiaries, there are no proxies with respect to any such shares, and no
equity securities of any Company Subsidiary are or may become required to be
issued, and there are no understandings or
<PAGE>
arrangements by which the Company or any Company Subsidiary is or may be bound
to issue, redeem, purchase or sell additional shares of capital stock of any
Company Subsidiary or securities convertible into or exchangeable or exercisable
for any such shares. Except as set forth in Section 5.3(c) of the Company
Disclosure Letter, all of such shares so owned by the Company are validly
issued, fully paid and nonassessable and are owned by it free and clear of any
Encumbrances or restrictions with respect to the transferability or
assignability thereof (other than restrictions on transfer imposed by federal or
state securities laws).
(d) Except for the Company Subsidiaries or as described in Section
5.3(d) of the Company Disclosure Letter, the Company does not directly or
indirectly own any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, joint venture or other business association or entity
that directly or indirectly conducts any activity which is material to the
Company.
Section 5.4 Authority Relative to This Agreement. The Company has the
corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by the Board of Directors of the
Company, acting upon the unanimous recommendation of the Special Committee, and
no other corporate proceedings on the part of the Company, other than the
Company obtaining shareholder approval pursuant to Section 2.1, are necessary to
authorize this Agreement, the Merger or the other transactions contemplated
hereby. Subject to the foregoing, this Agreement has been duly and validly
executed and delivered by the Company and (assuming this Agreement constitutes a
valid and binding obligation of GSCP and Acquisition) constitutes a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, reorganization, insolvency,
moratorium and other laws affecting creditors' rights generally from time to
time in effect and to general equitable principles.
Section 5.5 Consents and Approvals: No Violations. Except (a) for the
Governmental Requirements, (b) for the filings, permits, authorizations,
consents or approvals with, of or by Government Entities listed in Section 5.5
of the Company Disclosure Letter or (c) where the failure to make any filing
with, or to obtain any permit, authorization, consent or approval of, any
Governmental Entity would not prevent or delay the consummation of the Merger,
or otherwise prevent the Company from performing its obligations under this
Agreement, and would not, individually or in the
<PAGE>
aggregate, reasonably be expected to have a Company Material Adverse Effect, no
filing with, and no permit, authorization, consent or approval of, any
Governmental Entity is necessary for the execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the Merger
and the other transactions contemplated by this Agreement. Except as set forth
in Section 5.5 of the Company Disclosure Letter, no consent or approval of any
other party (including, but not limited to, any party to any Company Contracts
(as defined below)) is required to be obtained by the Company or any Company
Subsidiary for the execution, delivery or performance of this Agreement or the
performance by the Company of the transactions contemplated hereby, except for
such consents the failure of which to obtain would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
Except as set forth in Section 5.5 of the Company Disclosure Letter, neither the
execution, delivery or performance of this Agreement by the Company, nor the
consummation by the Company of the transactions contemplated hereby, nor
compliance by the Company with any of the provisions hereof, will (i) conflict
with or result in any breach of any provisions of the Articles of Incorporation
or Bylaws of the Company, or similar organizational documents of any of the
Company Subsidiaries, (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation, vesting, payment, exercise,
acceleration, suspension or revocation) under, any of the terms, conditions or
provisions of any note, bond, mortgage, deed of trust, security interest,
indenture, license, contract, agreement, plan or other instrument or obligation
to which the Company or any of the Company Subsidiaries is a party or by which
any of them or any of their properties or assets are bound (iii) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to the
Company or the Company Subsidiaries or any of their properties or assets, (iv)
result in the creation or imposition of any Encumbrance on any asset of the
Company or any Company Subsidiary or (v) cause the suspension or revocation of
any certificate of authority, permit, license, governmental authorization,
consent or approval necessary for the Company or any of the Company Subsidiaries
to conduct its business as currently conducted, except in the case of clauses
(ii), (iii), (iv) and (v) for violations, breaches, defaults, terminations,
cancellations, accelerations, vestings, payments, exercises, creations,
impositions, suspensions or revocations which would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
Section 5.6 Company SEC Reports. The Company has filed with the SEC and
made available to GSCP true and complete copies of each registration statement,
report and proxy or information statement (including exhibits and any amendments
thereto) filed or required to be filed by the Company with the SEC since January
1, 1997 (collectively, the "Company SEC Reports"). As of the respective dates
the Company SEC Reports were filed with the SEC or amended, each of the Company
SEC Reports (i) complied as to form in all material respects with all applicable
requirements of the Securities Act and Exchange Act, and the rules and
regulations
<PAGE>
promulgated thereunder and (ii) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Each of the audited consolidated
financial statements and unaudited interim consolidated financial statements of
the Company (including any related notes and schedules) included (or
incorporated by reference) in the Company SEC Reports fairly presents in all
material respects, in conformity with GAAP applied on a consistent basis (except
as may be indicated in the notes thereto), the consolidated financial position
of the Company and the Company Subsidiaries as of the dates thereof and the
consolidated results of their operations and changes in their financial position
for the periods then ended (subject to normal year-end adjustments, in the case
of any unaudited interim financial statements) except (x) as set forth in
Section 5.6 of the Company Disclosure Letter, and (y) that the interim,
financial statements do not include complete footnotes required by GAAP.
Section 5.7 Absence of Certain Changes. Since September 30, 1998,
except as set forth in Section 5.7 of the Company Disclosure Letter, there has
been no event, condition or set of circumstances which, individually or in the
aggregate, has had or is reasonably likely to result in a Company Material
Adverse Effect, and the Company and the Company Subsidiaries have in all
material respects conducted their businesses in the ordinary course.
Section 5.8 Litigation. Except as set forth in Section 5.8 of the
Company Disclosure Letter, there is no suit, action, proceeding or investigation
(whether at law or equity, before or by any federal, state or foreign court,
tribunal, commission, board, agency or instrumentality, or before any
arbitrator) pending or, to the knowledge of the Company, threatened against the
Company or any of the Company Subsidiaries, which, individually or in the
aggregate, would reasonably be expected to have a Company Material Adverse
Effect, nor is there any judgment, decree, injunction, rule or order of any
court, governmental department, commission, agency, instrumentality or
arbitrator outstanding against the Company or any of the Company Subsidiaries
having, or which, insofar as can reasonably be foreseen, in the future may
reasonably be expected to have, a Company Material Adverse Effect.
Section 5.9 Absence of Undisclosed Liabilities. Except for liabilities
or obligations (i) which are accrued or reserved against in the Company's
financial statements (or reflected in the notes thereto) included in the
Company's Quarterly Report on Form 10-Q for the nine months ended September 30,
1998 or (ii) disclosed in Section 5.9 of the Company Disclosure Letter, the
Company and the Company Subsidiaries do not have any Liabilities required by
GAAP to be set forth on the balance sheet of the Company or any Company
Subsidiary, other than Liabilities arising since September 30, 1998 in the
ordinary course of business that, individually or in the aggregate, are not
reasonably likely to have a Company Material Adverse Effect.
<PAGE>
Section 5.10 No Default. Except as set forth in Section 5.10 of the
Company Disclosure Letter, neither the Company nor any of the Company
Subsidiaries is in violation or breach of, or default under (and no event has
occurred which with notice or the lapse of time or both would constitute a
violation or breach of, or a default under) any term, condition or provision of
(a) its Articles or Certificate of Incorporation, as the case may be, or Bylaws,
(b) any note, bond, mortgage, deed of trust, security interest, indenture,
license, agreement, plan, contract, lease, commitment or other instrument or
obligation to which the Company or any of the Company Subsidiaries is a party or
by which they or any of their properties or assets are bound, (c) any order,
writ, injunction, decree, statute, rule or regulation applicable to the Company
or any of the Company Subsidiaries or any of their properties or assets, or (d)
any permit, license, governmental authorization, consent or approval necessary
for the Company or any of the Company Subsidiaries to conduct their respective
businesses as currently conducted, except in the case of clauses (b), (c) and
(d) above for breaches, defaults or violations which would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.
Section 5.11 Taxes. Except as set forth in the Company's Annual Report
on Form 10-K for the year ended December 31, 1997 or Section 5.11 of the Company
Disclosure Letter, to the knowledge of the Company:
(a) (i) all material Tax Returns relating to the Company and the
Company Subsidiaries required to be filed have been filed, (ii) all such Tax
Returns are true and correct in all material respects, (iii) all Taxes shown as
due and payable on such Tax Returns, and all material Taxes (whether or not
reflected on such Tax Returns) relating to the Company or any of the Company
Subsidiaries required to be paid have been paid, (iv) adequate reserves have
been made on the most recent financial statements included in the Company SEC
Reports in accordance with GAAP for all Taxes relating to the Company and the
Company Subsidiaries for all taxable periods or portions thereof accrued through
the date of such financial statements, and (v) the Company and the Company
Subsidiaries have duly and timely withheld all material Taxes required to be
withheld and such withheld Taxes have been either duly and timely paid or
properly set aside in accounts for such purpose and will be duly and timely
paid.
(b) no written agreement or other written document waiving or
extending, or having the effect of waiving or extending, the statute of
limitations or the period of assessment or collection of any Taxes relating to
the Company or any of the Company Subsidiaries and no power of attorney with
respect to any such Taxes has been
<PAGE>
filed or entered into with any taxing authority. The time for filing any Tax
Return relating to the Company or any of the Company Subsidiaries has not been
extended to a date later than the date of this Agreement.
(c) (i) no audits or other administrative proceedings or court
proceedings are presently pending with regard to any Taxes or Tax Return of the
Company or any of the Company Subsidiaries as to which any taxing authority has
asserted in writing any claim which, if adversely determined, would reasonably
be expected to have a Company Material Adverse Effect, and (ii) no taxing
authority is now asserting in writing any deficiency or claim for Taxes or any
adjustment to Taxes with respect to which the Company or any of the Company
Subsidiaries may be liable with respect to income and other material Taxes which
has not been fully paid or finally settled.
(d) none of the Company and the Company Subsidiaries (i) is a party to
or bound by or has any obligation under any written Tax sharing, Tax indemnity
or similar agreement or arrangement (including, without limitation, the Tax
indemnification provisions of any acquisition or disposition agreement), (ii) is
or has been a member of any consolidated, combined or unitary group for purposes
of filing Tax Returns or paying Taxes (other than such a group the common parent
of which is the Company) or (iii) has entered into a closing agreement pursuant
to Section 7121 of the Code, or any predecessor provision or any similar
provision of state or local law.
(e) none of the assets of the Company or any of the Company
Subsidiaries are subject to any Tax lien (other than liens for Taxes that are
not yet due or that are being contested in good faith by appropriate proceedings
and which have been properly reserved for in the books and records of the
Company).
(f) neither the Company nor any of the Company Subsidiaries is subject
to an election to have the provisions of Section 341(f) of the Code apply.
(g) "Taxes" shall mean all federal, state, local or foreign income,
alternative minimum, accumulated earnings, personal holding company, franchise,
capital stock, profits, windfall profits, gross receipts, sales, use, value
added, transfer, registration, stamp, premium, excise, customs duties,
severance, environmental (including taxes under Section 59A of the Code), real
property, personal property, ad valorem, occupancy, license, occupation,
employment, payroll, social security, disability, unemployment, workers'
compensation, withholding, estimated or other similar taxes, duties, fees,
assessments or other governmental charges or deficiencies thereof (including all
interest and penalties thereon and additions thereto). "Tax Returns" shall mean
all federal, state, local and foreign tax returns, declarations, statements,
reports, schedules, forms and information returns and any amendments to any of
the foregoing relating to Taxes.
<PAGE>
Section 5.12 Property. (a) Except as set forth in Section 5.12(a) of
the Company Disclosure Letter, each of the Company and the Company Subsidiaries
(i) has good and valid title to all of its properties, assets and other rights
that do not constitute real property free and clear of all Encumbrances, except
for such Encumbrances that are not, individually or in the aggregate, reasonably
expected to have a Company Material Adverse Effect, and (ii) owns, has valid
leasehold interests in or valid contractual rights to use, (x) each of the
assets identified in Schedule 6.1(f) and (y) all of the assets, tangible and
intangible, used by, or necessary for the conduct of, its business, except where
the failure to have such valid leasehold interests or such valid contractual
rights are not, individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect.
(b) Except as set forth in Section 5.12(b) of the Company Disclosure
Letter or as would not reasonably be expected to result in a Company Material
Adverse Effect, each of the Company and the Company Subsidiaries owns and has
good and valid title to the real property owned by such party and used in its
business, free and clear of all Encumbrances, except for (A) minor imperfections
of title, easements and rights of way, none of which, individually or in the
aggregate, materially detracts from the value of or impairs the use of the
affected property or impairs the operation of the Company or any of the Company
Subsidiaries and (B) liens for current taxes not yet due and payable.
(c) Section 5.12(c) of the Company Disclosure Letter sets forth a list,
which is accurate and complete in all material respects, of each material real
property lease under which the Company or any of the Company Subsidiaries is a
tenant, and the Company has made a true and complete copy of each such lease
available to GSCP. The Company and each Company Subsidiary is in peaceful and
undisturbed possession of the space and/or estate under each lease under which
it is a tenant, and there are no defaults by it as tenant thereunder, except for
such disturbances or defaults that would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
Section 5.13 Compliance with Laws; Authorizations. (a) The business of
the Company and each of the Company Subsidiaries is being conducted in
compliance with all applicable laws, including, without limitation, all
insurance codes, laws, usury, truth in lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, disclosure
laws, ordinances, rules, regulations, decrees and orders of any Governmental
Entity, and any other codes, laws, ordinances, rules, regulations, decrees and
orders of any Governmental Entity relating to the offer and sale of the
Company's and the Company Subsidiaries' products or services, the marketing of
any such products or services to potential purchasers or subscribers thereto, or
any joint venture with any other party relating to the foregoing, and all
material notices, reports, documents and other information required to be filed
thereunder within the last three
<PAGE>
years were properly filed and were in compliance with such laws, except, in each
case, for such non-compliance as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. The
representations and warranties contained in this Section 5.13 do not cover any
matters covered by Sections 5.18, 5.19 or 5.20.
(b) The Company, and each of the Company Subsidiaries, has all
certificates of authority, approvals, authorizations, permits and licenses,
including, without limitation, mortgage banking licenses, the use and exercise
of which are necessary for the conduct of its business as now conducted
("Authorizations"), other than such Authorizations the absence of which would
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. The business of the Company and each of the Company
Subsidiaries has been and is being conducted in compliance with all such
Authorizations, except for such non-compliance as would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect.
To the knowledge of the Company after due inquiry or as would not reasonably be
likely, individually or in the aggregate, to result in a Company Material
Adverse Effect, all such Authorizations are in full force and effect, and there
is no proceeding or investigation pending or threatened and no communication,
whether written or oral, which would reasonably be expected to lead to the
revocation, amendment, failure to renew, limitation, suspension or restriction
of any such Authorization. Section 5.13(b) of the Company Disclosure Letter sets
forth a list of each material Authorization.
(c) Except as set forth in Section 5.13(c) of the Company Disclosure
Letter, neither the Company nor any Company Subsidiary has entered into any
agreements or stipulations with any Governmental Entity, and no judgments,
decrees, injunctions, fines or orders of any Governmental Entity have been
issued with respect to the Company and the Company Subsidiaries, which,
individually or in the aggregate, has had or would reasonably be expected to
have a Company Material Adverse Effect.
Section 5.14 Regulatory Filings. The Company has made available for
inspection by GSCP complete copies of all material registrations, filings and
submissions made since January 1, 1997 by the Company or any of the Company
Subsidiaries with any Governmental Entity and any reports of examinations issued
since January 1, 1997 by any such Governmental Entity that relate to the Company
or any of the Company Subsidiaries. The Company and the Company Subsidiaries
have filed all reports, statements, documents, registrations, filings or
submissions required to be filed by any of them with any Governmental Entity,
except where the failure to file, in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect; and all such reports,
statements, documents, registrations, filings or submissions were true, complete
and accurate and complied with applicable law when filed except for such
inaccuracies and noncompliance as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect and, except as
set forth in Section 5.14 of the Company Disclosure Letter, no material
deficiencies have been asserted by any such Governmental Entity with respect to
such reports, statements, documents, registrations, filings or submissions that
have not been satisfied, except for such deficiencies as would not, individually
or in the aggregate,
<PAGE>
reasonably be expected to have a Company Material Adverse Effect.
Section 5.15 Investments. (a) Section 5.15 of the Company Disclosure
Letter sets forth a materially accurate and complete list of investments,
including, without limitation, any securities, derivative instruments,
repurchase agreements, options, forwards, futures or hybrid securities ("Company
Investments") owned by the Company and the Company Subsidiaries as of September
30, 1998, together with the cost basis, book or amortized value, as the case may
be, and investment rating as of September 30, 1998 of each such Company
Investment. Except as set forth in Section 5.15 of the Company Disclosure
Letter, the Company and the Company Subsidiaries have good and marketable title
to the Company Investments.
Section 5.16 Information in Proxy Statement. None of the information
supplied by the Company for inclusion or incorporation by reference in the Proxy
Statement/Prospectus will, and the Proxy Statement/Prospectus (or any amendment
thereof or supplement thereto) will not, at the date it becomes effective and at
the time of the Special Meeting, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading , except that no representation is made by the
Company with respect to statements made therein based on information supplied by
GSCP or Acquisition in writing for inclusion in the Proxy Statement/Prospectus.
The Proxy Statement/Prospectus will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations
thereunder.
Section 5.17 Brokers. Except as set forth in Section 5.17 of the
Company Disclosure Letter, no person is entitled to any brokerage, financial
advisory, finder's or similar fee or commission payable by the Company or any
Company Subsidiary in connection with the Merger or the other transactions
contemplated hereby based upon arrangements made by and on behalf of the
Company.
Section 5.18 Employee Benefit Plans; ERISA. (a) Section 5.18(a) of the
Company Disclosure Letter sets forth a complete and accurate list of: (i) all
severance, employment, consulting, change of control, retention and all other
similar agreements between the Company or any Company Subsidiary and any current
or former employee, agent, independent contractor, officer or director, (ii) all
severance programs, policies and practices of the Company and each of the
Company Subsidiaries, (iii) all plans or arrangements of the Company and each of
the Company Subsidiaries relating to
<PAGE>
its respective current or former employees, agents, independent contractors,
officers or directors that contain change in control provisions, including in
all cases any and all amendments thereto, and (iv) all Company Benefit Plans.
For purposes of this Agreement, "Company Benefit Plan" shall mean any pension,
post-retirement benefit, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom stock,
equity-based award, retirement, vacation, disability, death benefit,
hospitalization or other medical, dental, accident, disability, life or other
insurance, supplemental unemployment benefits, material bonus, fringe and other
welfare benefit plan, program, policy, agreement or arrangement, and each other
employee benefit plan, program, agreement, arrangement or understanding
providing benefits to any current or former employee, agent, independent
contractor, officer or director of the Company or any of the Company
Subsidiaries, whether written or unwritten, that is or has been maintained or
established by the Company or any other Person that, together with the Company,
is treated as a single employer under Section 414 of the Code (each a "Company
Commonly Controlled Entity"), or to which the Company or any Company Commonly
Controlled Entity contributes or is obligated or required to contribute or with
regard to which the Company or any of its Company Commonly Controlled Entities
has knowledge of any event, transaction or condition that would reasonably be
expected to result in any material liability at the Effective Time.
(b) With respect to each Company Benefit Plan, to the extent
applicable, the Company and the Company Subsidiaries have heretofore made
available or have caused to be made available to GSCP true and complete copies
of the following documents: (i) a copy of each written Company Benefit Plan and
a summary of the essential terms of each unwritten Company Benefit Plan, (ii) a
copy of the most recent annual report on Form 5500 and actuarial report, if
required under the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), (iii) a copy of the most recent Summary Plan Description required
under ERISA with respect thereto, (iv) if the Company Benefit Plan is funded
through a trust or any third party funding vehicle, a copy of the trust or other
funding agreement and the latest financial statements thereof, and (v) the most
recent determination letter received from the IRS with respect to each Company
Benefit Plan intended to qualify under Section 401 of the Code.
(c) Except as set forth in Section 5.18(c) of the Company Disclosure
Letter, (i) with respect to the Company Benefit Plans, no event has occurred and
there exists no condition or set of circumstances, in connection with which the
Company or any Company Commonly Controlled Entity could be subject to any
liability under ERISA, the Code or any other applicable law (either directly or
indirectly, including as a result of an indemnification obligation or any joint
and several liability obligations) that,
<PAGE>
individually or in the aggregate, would result in a material liability to the
Company or any of the Company Subsidiaries, (ii) no Company Benefit Plan is a
multi-employer plan within the meaning of Section 3(37) of ERISA, (iii) each
Company Benefit Plan has been administered substantially in accordance with its
terms, and all the Company Benefit Plans have been operated and are in material
compliance with the applicable provisions of ERISA, the Code and all other
applicable laws and the terms of all applicable collective bargaining agreements
except in so far as a failure to so comply, whether individually or
collectively, would not result in a material liability to the Company or any of
the Company Subsidiaries, (iv) with respect to each plan intended to be a
qualified plan under Section 401(a) of the Code, the IRS has issued a favorable
determination letter with respect to the qualification of each such Company
Benefit Plan and its related trust, if any, and the IRS has not taken any action
to revoke any such letter and the Company knows of no event that has occurred
since the date of such determination that would reasonably be expected to result
in the disqualification of such plan and (v) there are no pending or, to the
knowledge of the Company, threatened or anticipated actions, suits, claims,
assessments, complaints, proceedings or investigations of any kind in any court
or governmental agency with respect to any Company Benefit Plan (other than
routine claims for benefits) that could reasonably be expected to result in a
material liability to the Company or the Company Subsidiaries.
(d) Except as set forth in Section 5.18(d) of the Company Disclosure
Letter, (i) no Company Benefit Plan provides for medical benefits (whether or
not insured) to be made available with respect to current or former employees,
agents, officers, directors or independent contractors (or any dependent of any
of them) after retirement or other termination of service (other than (x)
coverage mandated by applicable law or (y) benefits the full cost of which is
borne by the current or former employee, agent, officer, director or independent
contractor), and (ii) the consummation of the transactions contemplated by this
Agreement will not (x) entitle any current or former employee, agent,
independent contractor, director or officer of the Company or any of the Company
Subsidiaries or any Company Commonly Controlled Entity to severance pay, golden
parachute payment, or any other payment from the Company or a Company
Subsidiary, except as expressly provided in this Agreement, (y) accelerate the
time of payment or vesting, or increase the amount of compensation due any such
employee, agent, independent contractor, director or officer, or (z) constitute
a "change in control" under any Company Benefit Plan.
(e) Section 5.18(e) of the Company Disclosure Letter sets forth a
complete and accurate list of all Company Stock Options outstanding as of the
date of this Agreement (including the name of the Company Stock Option holder
and such person's relationship to the Company and the Company Subsidiaries, the
vesting schedules, exercise periods and exercise prices thereof and of all
Company stock appreciation rights ("Company SAR's") outstanding as of the date
of this Agreement (including the name of the Company SAR holder and such
person's relationship to the
<PAGE>
Company and the Company Subsidiaries) and the reference market prices thereof.
Section 5.19 Labor and Employee Relations. Except as disclosed in
Section 5.19 of the Company Disclosure Letter, none of the employees of the
Company or the Company Subsidiaries are represented by any labor organization
and, to the knowledge of the Company, no union claims to represent these
employees have been made. Neither the Company nor any of the Company
Subsidiaries is a party to any collective bargaining or other labor union
contract applicable to persons employed by the Company or any of the Company
Subsidiaries, and no collective bargaining agreement is being negotiated by the
Company or Company Subsidiaries. There is no labor dispute, strike or work
stoppage against the Company or Company Subsidiaries pending, or to the
knowledge of the Company, threatened except for such routine disputes and
grievances as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect. To the knowledge of the
Company, the Company and Company Subsidiaries are not, and have not been,
engaged in any unfair labor practices as defined in the National Labor Relations
Act or similar applicable law, ordinance or regulation, nor is there pending any
unfair labor practice charge, except for such as would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect.
Section 5.20 Environmental Matters. (a) Except as disclosed in Section
5.20(a) of the Company Disclosure Letter or as would not reasonably be likely to
have a Company Material Adverse Effect, (i) each of the Company and the Company
Subsidiaries is and has been in compliance in all respects with and, has no
existing liabilities under, and (ii) there are no written claims or notice by
any person received by the Company or any of the Company Subsidiaries that any
of the Company or the Company Subsidiaries has not been in compliance in all
respects with or has any existing liabilities under all applicable laws, rules,
regulations, common law, ordinances, decrees, orders and other binding legal
requirements relating to pollution, the preservation of the environment, and the
exposure to materials in the environment or the work place ("Environmental
Laws") with respect to property owned, leased or operated by the Company or any
of the Company Subsidiaries. Except as would not reasonably be likely to have a
Company Material Adverse Effect, neither the Company nor any of the Company
Subsidiaries is subject to any decrees, orders, decisions of arbitrators or
judgments that impose requirements, restrictions or liabilities under, or
penalties for violations of, any Environmental Laws or the aforementioned
requirements or restrictions.
(b) Except as disclosed in Section 5.20(b) of the Company Disclosure
Letter, with respect to currently owned property and all property formerly
owned, leased or operated by the Company or any of the Company Subsidiaries,
including foreclosure property, to the knowledge of the Company after due
inquiry, there are no past or present actions, conditions or occurrences that
could form the basis of any claim under
<PAGE>
Environmental Laws against, or liability under such laws of, the Company or any
of the Company Subsidiaries, except for such claims or liabilities which in the
aggregate would not reasonably be expected to result in a Company Material
Adverse Effect.
Section 5.21 Opinion of Financial Advisor. The Company has received a
written opinion from Donaldson, Lufkin & Jenrette Securities Corporation and the
Special Committee of the Board of Directors has received a written opinion from
J.P. Morgan Securities Inc., both dated as of the date hereof, to the effect
that the investment to be made by GSCP or its affiliates in the Company pursuant
to the terms of this Agreement, the Initial Loan Agreement, Amendment No. 1 and
the Loan Agreement is fair to the shareholders of the Company from a financial
point of view, and the Company has received the permission of Donaldson, Lufkin
& Jenrette Securities Corporation and J.P. Morgan Securities Inc. to include
such opinions in the Proxy Statement/Prospectus.
Section 5.22 Contracts. (a) Section 5.22 of the Company Disclosure
Letter sets forth a list of all contracts, agreements, arrangements or
understandings (written or oral) ("Contracts") to which the Company or any of
the Company Subsidiaries is a party or by which it or any of them is bound and
which are not set forth as exhibits to any of the Company SEC Reports and which:
(i) require the payment by or to the Company or the Company
Subsidiaries of amounts in excess of $50,000 per annum or are joint venture or
strategic alliance or similar agreements, except for (x) mortgage loans
purchased or originated in the ordinary course of business, (y) Contracts of the
types specified in clauses (i) - (iv) of Section 5.18(a), or (z) agency, dealer,
correspondent, sales representative, marketing and similar agreements entered
into in the ordinary course of business;
(ii) restrict the Company or any of the Company Subsidiaries from
engaging in any line of business in any geographic area or competing with any
person or entity or restricting the ability of the Company or the Company
Subsidiaries to acquire equity securities of any person or entity;
(iii) are employment, consulting or severance contracts applicable to
any employee, officer, director, consultant or shareholder of the Company or the
Company Subsidiaries, other than any contract which by its terms the Company or
any Company Subsidiary may terminate on not more than 60 days' notice without
liability;
(iv) were entered into in connection with an acquisition, sale, lease,
license, disposition or similar agreement of or regarding another entity, block
of business,
<PAGE>
real property or other assets or property by the Company or any Company
Subsidiary either not in the ordinary course of business (separately identifying
any such Contract which includes a continuing payment or indemnity obligation),
or which pertain to any such assets or property which have a value greater than
$500,000, except for mortgage loans purchased or originated in the ordinary
course of business;
(v) is an evidence of any indebtedness for borrowed money of the
Company or any of the Company Subsidiaries, including without limitation, any
note, bond, mortgage, deed of trust, credit agreement, loan agreement, security
agreement, or indenture;
(vi) is an intercompany agreement, including without limitation, any
tax sharing, expense sharing, employee leasing or other similar agreement;
(vii) were entered into in connection with securitizations or pools of
mortgage loans, including, without limitation, any mortgage sale agreement or
mortgage servicing agreement to which the Company or any Company Subsidiary is a
party (the "Mortgage Servicing Agreements") relating thereto and any
documentation evidencing the rights in respect of interest only or residual
certificates owned by the Company or any Company Subsidiary; any such agreements
described in the preceding clause that were entered into in the ordinary course
of business may be described in Section 5.22 of the Company Disclosure Letter in
summary form but shall be subject to Section 5.22(b) hereof; or
(viii) is a management, administrative services, data processing or
software licensing Contract, excluding off-the-shelf software licenses; (the
contracts in clause (i)-(viii), together with the Contracts filed as exhibits to
the Company SEC Reports, collectively, the "Company Contracts").
(b) With respect to each of the Company Contracts, to the knowledge of
the Company, except as disclosed in Section 5.22 of the Company Disclosure
Letter: such contract is (assuming due power and authority of, and due execution
and delivery by, the other party or parties thereto) valid and binding upon the
Company or any Company Subsidiary party thereto and, to the Company's knowledge,
the other party thereto and is in full force and effect.
Section 5.23 Intellectual Property. The Company and/or each of the
Company Subsidiaries owns, or is licensed or otherwise possesses legally
enforceable rights to use all patents, trademarks, trade names, service marks,
copyrights, and any applications therefor, technology, know-how, computer
software programs or applications, and tangible or intangible proprietary
information or materials that are used in the business of the Company and the
Company Subsidiaries as currently conducted, except for any such failures to
own, be licensed or possess that are not, individually or in the aggregate,
reasonably likely to have a Company Material Adverse Effect, and to the
<PAGE>
knowledge of the Company all patents, trademarks, trade names, service marks and
copyrights held by the Company and/or the Company Subsidiaries are valid and
subsisting. The Company does not know of any claim or any infringement or
similar violation that could give rise to any claim against the use by the
Company or any of the Company Subsidiaries of any trademarks, trade names, trade
secrets, copyrights, patents, technology, know-how or computer software programs
and applications used in the business of the Company or any of the Company
Subsidiaries as currently conducted or as proposed to be conducted which would
reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect.
Section 5.24 Voting Requirements; Takeover Statutes. (a) The
affirmative vote of the holders of a majority of the voting power of all
outstanding shares of the Company Common Stock, voting as a single class, at the
Special Meeting (the "Shareholder Approval") and the approval of the GSCP Funds
and Travelers Casualty and Surety Company as holders of the Company Preferred
Stock are the only votes of the holders of any class or series of the Company's
capital stock necessary to approve and adopt this Agreement, the Merger and the
other transactions contemplated by this Agreement.
(b) The Board of Directors of the Company, acting on the unanimous
recommendation of the Special Committee, has approved the terms of this
Agreement and the consummation of the Merger, and such approval is sufficient to
render inapplicable to the Merger the provisions of Sections 607.0901 and
607.0902 of the FBCA. No other state takeover statute or similar statute or
regulation applies or purports to apply to the Merger, this Agreement, or any of
the other transactions contemplated hereby, and no provision of the Articles of
Incorporation, By-laws or other governing instruments of the Company or any of
the Company Subsidiaries would, directly or indirectly, restrict or impair the
ability of GSCP to vote, or otherwise to exercise the rights of a shareholder
with respect to, shares of the Company and the Company Subsidiaries that may be
acquired or controlled by GSCP.
Section 5.25 Disclosure. To the Company's knowledge, no representation
or warranty by the Company or the Company Subsidiaries contained in or made in
any certificate delivered pursuant to this Agreement contains or will contain
any untrue statement of a material fact or omits or will omit to state any
material fact necessary, in light of the circumstances under which it was made,
to make the statements herein or therein not misleading.
Section 5.26 Transactions with Affiliates. Except as set forth in
Section
<PAGE>
5.26 of the Company Disclosure Letter or as disclosed in any of the Company SEC
Reports, neither the Company nor any Company Subsidiary has entered into any
material transaction, contract or arrangement with an Affiliate (other than the
Company, any Company Subsidiary, GSCP or the GSCP Funds) (i) since January 1,
1998 or (ii) prior to January 1, 1998 and in respect of which either the Company
or a Company Subsidiary has or may in the future have continuing obligations.
"Affiliate" or "affiliate" shall mean a Person that directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, the first Person, including but not limited to a
subsidiary of the first Person, a Person of which the first Person is a
subsidiary, or another subsidiary of a Person of which the first Person is also
a subsidiary. "Control" (including the terms "controls" "controlled by" and
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management policies of a
Person, whether through the ownership of voting securities, by contract or
credit arrangement, as trustee or executor, or otherwise.
Section 5.27 Discontinued Operations. Section 5.27 of the Company
Disclosure Letter accurately describes all of the businesses and operations that
(i) have been dissolved, sold, transferred or otherwise disposed of by the
Company, any Company Subsidiary or any former subsidiary of the Company, any
Company Subsidiary, or any predecessor thereto and (ii) were businesses and
operations of the Company, any Company Subsidiary or any former subsidiary of
the Company or any predecessor thereto, in either case, in respect of which any
of them may have any continuing material liability or obligation.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.1 Conduct of Business by the Company Pending the Merger. From
the date hereof until the Effective Time, unless GSCP shall otherwise agree in
writing, or except as set forth in Section 6.1 of the Company Disclosure Letter
or as otherwise contemplated by this Agreement, the Company and the Company
Subsidiaries shall conduct their respective businesses solely in the ordinary
course and shall use all commercially reasonable efforts to preserve intact
their business organizations and relationships with third parties (including but
not limited to their respective relationships with policyholders and agents), to
keep available the services of their present officers and key employees, subject
to the terms of this Agreement. Except as set forth in Section 6.1 of the
Company Disclosure Letter or as otherwise provided in this Agreement, from the
date hereof until the Effective Time, without the prior written consent of GSCP:
(a) the Company shall not and shall not permit any Company
<PAGE>
Subsidiary to adopt or propose any change in its Articles of Incorporation or
Bylaws;
(b) the Company shall not declare, set aside or pay any dividend or
other distribution with respect to or acquire any shares of capital stock of the
Company, or split, combine or reclassify any of the Company's capital stock, and
the Company and the Company Subsidiaries shall not repurchase, redeem or
otherwise acquire any shares of capital stock or other securities of, or other
ownership interests in, the Company;
(c) the Company shall not, and shall not permit any Company Subsidiary
to, merge or consolidate with any other person or (except in the ordinary course
of business after notice to GSCP) acquire a material amount of assets of any
other person;
(d) the Company shall not, and shall not permit any Company Subsidiary
to, enter into or terminate any material contract, agreement, commitment, or
understanding other than agreements entered into with unaffiliated third
parties, on an arms-length basis and in the ordinary course of business
constituting marketing affiliation and sales agreements on terms comparable with
its existing agreements of such nature;
(e) the Company shall not, and shall not permit any Company Subsidiary
to, sell, lease, license or otherwise surrender, relinquish or dispose of (i)
any material facility owned or leased by the Company or any Company Subsidiary
or (ii) any assets or property which are material to the Company and the Company
Subsidiaries, taken as a whole, except pursuant to existing contracts or
commitments, or in the ordinary course of business after notice to GSCP;
(f) the Company shall not, and shall not permit any Company Subsidiary
to, sell, lease, license or otherwise surrender, relinquish or dispose of the
assets described on Schedule 6.1(f) hereto;
(g) the Company shall not, and shall not permit any Company Subsidiary
to, settle any material audit, make or change any material Tax election or file
amended Tax Returns unless required by law or such settlement results in a
refund to the Company and in each case the Company notifies GSCP at least five
days prior to the date any such action is taken;
(h) the Company and the Company Subsidiaries shall not issue any
capital stock or other securities or enter into any amendment of any material
term of any outstanding security of the Company, except upon the exercise of
stock options existing on the date hereof, and the Company and the Company
Subsidiaries shall not incur any material indebtedness except in the ordinary
course of business pursuant to existing credit facilities or arrangements, amend
or otherwise increase, accelerate the payment or vesting of the amounts payable
or to become payable under or fail to make any required
<PAGE>
contribution to, any Company Benefit Plan or materially increase any non-salary
benefits payable to any employee or former employee, except in the ordinary
course of business consistent with past practice, as required by applicable law
or as otherwise permitted by this Agreement;
(i) except in the ordinary course of business consistent with past
practice, as may be required by applicable law or as may be necessary for
compliance under Section 401(a) of the Code, if applicable, the Company shall
not, and shall not permit any Company Subsidiary to (i) grant Options, Company
SAR's or other equity-related awards; (ii) grant any increase in the
compensation, bonus, severance, termination pay or other benefits of any former
or current employee, agent, consultant, officer or director of the Company or
any Company Subsidiary; (iii) enter into or amend any employment agreement,
deferred compensation, consulting, severance, termination, indemnification or
any other such agreement with any such former or current employee, agent,
consultant, officer or director of the Company or any Company Subsidiary; or
(iv) amend, adopt or terminate any Company Benefit Plan;
(j) the Company shall not change any method of accounting or accounting
practice by the Company or any Company Subsidiary, except for any such change
required by GAAP;
(k) the Company shall not, and shall not permit any Company Subsidiary
to, conduct material transactions in Company Investments except in compliance in
all material respects with the investment policies of the Company and any such
Company Subsidiary established from time to time in the ordinary course of
business and in all material respects all applicable laws and regulations;
(l) the Company shall not, and shall not permit any Company Subsidiary
to, enter into any agreement to purchase, or to lease for a term in excess of
one year, any real property, provided that the Company, or any Company
Subsidiary, (i) may as a tenant, or a landlord, renew any existing lease for a
term not to exceed eighteen months and (ii) nothing herein shall prevent the
Company, in its capacity as a landlord, from renewing any lease pursuant to an
option granted prior to the date hereof;
(m) the Company shall not, and shall not permit any Company Subsidiary
to, enter into any transaction, contract or arrangement whatsoever with an
Affiliate (other than the Company or any Company Subsidiary), except
transactions in the ordinary course of business consistent with past practice
pursuant to pre-existing contracts disclosed in Section 5.26 of the Company
Disclosure Letter or disclosed in the
<PAGE>
Company SEC Reports;
(n) the Company shall not release any third party from any material
obligation, or grant any consent, under any confidentiality or other agreement,
or fail to fully enforce any such agreement, except in the ordinary course of
business;
(o) without the prior consent of GSCP, which shall not be unreasonably
withheld or delayed, enter into any securitization or pool of mortgage loans
purchased, originated or serviced by the Company or any Company Subsidiary
("Mortgage Loans") or sale of whole Mortgage Loans in bulk transactions; and
(p) the Company shall not, and shall not permit any Company Subsidiary
to, agree or commit to do any of the foregoing.
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 Access and Information. The Company shall afford to GSCP
and its financial advisors, legal counsel, accountants, consultants, financing
sources, and other authorized representatives access upon reasonable notice and
during normal business hours throughout the period prior to the Effective Time
to all of the books, records, properties, plants and personnel of the Company
and the Company Subsidiaries and, during such period, shall furnish as promptly
as practicable to GSCP (a) a copy of each report, schedule and other document
filed or received by it pursuant to the requirements of federal securities laws,
and (b) all other information as such other party reasonably may request,
provided that no investigation pursuant to this Section 7.1 shall affect any
representations or warranties made herein or the conditions to the obligations
of GSCP and Acquisition to consummate the Merger.
Section 7.2 Solicitation. (a) Unless the Company complies with Section
7.2(c), the Company shall not, nor shall it permit any of the Company
Subsidiaries to, nor shall it authorize or permit any officer, director or
employee of or any investment banker, attorney or other advisor or
representative of, the Company or any of the Company Subsidiaries to, directly
or indirectly, (i) solicit, initiate or encourage the submission of any Takeover
Proposal (as defined in Section 7.2(e)), (ii) enter into any agreement with
respect to any Takeover Proposal or give any approval of the type referred to in
Section 5.24(b) with respect to any Takeover Proposal or (iii) continue or
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any Takeover Proposal. At any time prior to, but at no
time subsequent to, the receipt of the Shareholder Approval, the Company may,
subject to compliance with Section 7.2(c), (i)
<PAGE>
solicit, initiate or encourage a Takeover Proposal of the sort referred to in
clause (x) of Section 7.2(e) that involves consideration to the Company's
shareholders with a value that the Company's Board of Directors reasonably
believes, based on advice from the Company's independent outside financial
advisor, is superior to the consideration to the Company provided for in the
Merger, and (ii) furnish information with respect to the Company pursuant to a
customary confidentiality agreement to any person making such proposal and (iii)
participate in negotiations or discussions regarding, or furnish to any person
any information with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes, or may reasonably be
expected to lead to, any Takeover Proposal.
(b) Neither the Board of Directors of the Company nor any committee
thereof (including the Special Committee) shall (x) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to GSCP, the approval or
recommendation by such Board of Directors or such committee (including the
Special Committee) of this Agreement or the Merger or (y) approve or recommend,
or propose to approve or recommend, any Takeover Proposal except in connection
with a Superior Proposal (as defined in Section 7.2(e)) and then only at or
after the termination of this Agreement pursuant to and in accordance with
Section 9.3.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 7.2, the Company promptly shall advise
GSCP orally and in writing of any Takeover Proposal, the identity of the person
making any such Takeover Proposal, and all the material terms and conditions
thereof and promptly shall provide GSCP with a true and complete copy of such
Takeover Proposal, if in writing. The Company shall keep GSCP fully informed of
the status and material details (including material amendments or proposed
amendments) of any such Takeover Proposal.
(d) Nothing contained in this Section 7.2 shall prohibit the Company
from taking and disclosing to its shareholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act; provided, however, neither the
Company nor its Board of Directors nor any committee thereof (including the
Special Committee) shall, except as permitted by Section 7.2(b), withdraw or
modify, or propose to withdraw or modify, its position with respect to this
Agreement or the Merger or approve or recommend, or propose to approve or
recommend, a Takeover Proposal.
(e) As used in this Agreement: "Superior Proposal" means a bona fide
written Takeover Proposal (x) to acquire, directly or indirectly, for
consideration
<PAGE>
consisting of cash and/or securities and/or the contribution or combination of
assets by merger or otherwise, more than 50% of the shares and/or voting power
of Company Common Stock then outstanding or all or substantially all the assets
of the Company, (y) otherwise on terms which the Board of Directors of the
Company decides in its good faith reasonable judgment to be more favorable to
the Company's shareholders than the Merger (based on the advice with only
customary qualifications, of the Company's independent financial advisor that
the value of the consideration provided for in such proposal is superior to the
value of the consideration provided for in the Merger), for which financing, to
the extent required, is then committed or which, in the good faith reasonable
judgment of the Board of Directors, based on advice from the Company's
independent financial advisor, is reasonably capable of being obtained by such
third party and (z) which the Board of Directors determines, in its good faith
reasonable judgment, is reasonably likely to be consummated without undue delay;
and "Takeover Proposal" means any written proposal for a merger, consolidation
or other business combination involving the Company or any proposal or offer to
acquire in any manner, directly or indirectly, an equity interest in any more
than 15% of the voting power of, or a substantial portion of the assets of, the
Company and/or the Company Subsidiaries, taken as a whole, other than the Merger
and the other transactions contemplated by this Agreement.
Section 7.3 Filings; Other Action. Subject to the terms and conditions
herein provided, as promptly as practicable, the Company, Acquisition and GSCP
shall: (i) promptly make all filings and submissions under the HSR Act and all
filings required by the regulatory authorities of any of the several states, the
District of Columbia and the Commonwealth of Puerto Rico, and deliver notices
and consents to jurisdiction to Governmental Entities, each as reasonably may be
required to be made in connection with this Agreement, the Merger and the other
transactions contemplated hereby, (ii) use all reasonable efforts to cooperate
with each other in (A) determining which filings are required to be made prior
to the Effective Time with, and which material consents, approvals, permits,
notices or authorizations are required to be obtained prior to the Effective
Time from, Governmental Entities of the United States, the several states or the
District of Columbia, the Commonwealth of Puerto Rico and foreign jurisdictions
in connection with the execution and delivery of this Agreement and the
consummation of the Merger and the other transactions contemplated hereby and
(B) timely making all such filings and timely seeking all such consents,
approvals, permits, notices or authorizations, and (iii) use all reasonable
efforts to take, or cause to be taken, all other action and do, or cause to be
done, all other things necessary or appropriate to consummate the Merger and the
other transactions contemplated hereby as soon as practicable. In connection
with the foregoing, the Company will, and will cause each Company Subsidiary to,
provide GSCP and Acquisition, and GSCP and Acquisition will provide the Company,
with copies of correspondence, filings or communications (or memoranda setting
forth the substance thereof) between such party or any of its representatives,
on the one hand, and any Governmental Entity or members of their
<PAGE>
respective staffs, on the other hand, with respect to this Agreement, the Merger
and the other transactions contemplated hereby and thereby. Each of GSCP,
Acquisition and the Company acknowledge that certain actions may be necessary
with respect to the foregoing in making notifications and obtaining clearances,
consents, approvals, waivers or similar third party actions which are material
to the consummation of the Merger and the other transactions contemplated
hereby, and each of GSCP, Acquisition and the Company agree to take such action
as is necessary to complete such notifications and obtain such clearances,
approvals, waivers or third party actions, provided, however, that nothing in
this Section 7.3 or elsewhere in this Agreement shall require any party hereto
to incur expenses in connection with the Merger and the other transactions
contemplated hereby which are not reasonable under the circumstances in relation
to the size of the Merger and the other transactions contemplated hereby or
require GSCP, Acquisition, the Surviving Corporation, the Company or any Company
Subsidiary to hold separate, or make any divestiture of, any asset or otherwise
agree to any material restriction on their operations in order to obtain any
waiver, consent or approval required by this Agreement if, in the case of the
Company or any Company Subsidiary, such divestiture or restriction would
reasonably be likely to have a Company Material Adverse Effect.
Section 7.4 Public Announcements. GSCP and Acquisition, on the one
hand, and the Company, on the other hand, agree that they will not issue any
press release or otherwise make any public statement with respect to this
Agreement or the Merger and the other transactions contemplated hereby without
the prior approval of the other party (which approval will not be unreasonably
withheld or delayed), except as may be required by applicable law.
Section 7.5 NASDAQ Listing. The Company shall as promptly as reasonably
practicable prepare and submit to the NASDAQ National Market System a listing
application covering the shares of Surviving Corporation Common Stock to be
issued in connection with the Merger and this Agreement and shall use all
reasonable efforts to obtain, prior to the Effective Time, approval for the
listing of such shares, subject to official notice of issuance. The Company
shall use all reasonable efforts to maintain its current listing on the NASDAQ
National Market System. If within 30 days of the date hereof the closing bid
price of the Company Common Stock on the NASDAQ National Market System is not
equal to or greater than $1.00 for at least ten consecutive trading days, the
Board of Directors of the Company shall effect a combination of the Company
Common Stock pursuant to Section 607.10025 of the FBCA (the "Reverse Split")
pursuant to which each share of Company Common Stock outstanding prior to the
Reverse Split shall represent 0.2 shares of Company Common Stock subsequent to
the Reverse Split. In connection with the Reverse Split, the Board of Directors
of the Company shall amend the Articles of Incorporation of the Company to
decrease the
<PAGE>
number of authorized shares of Company Common Stock so that the percentage of
authorized shares of Company Common Stock remaining unissued after the Reverse
Split does not exceed the percentage of authorized shares of Company Common
Stock that were unissued before the Reverse Split. Any fractional shares of the
Company Common Stock resulting from the Reverse Split shall remain outstanding.
For the avoidance of doubt, any such Reverse Split shall constitute an
Adjustment Event pursuant to Section 3.4 hereof.
Section 7.6 Company Indemnification Provision. Acquisition agrees that
all rights to indemnification existing in favor of the present or former
directors, officers, employees, fiduciaries and agents of the Company or any of
the Company Subsidiaries (collectively, the "Indemnified Parties") as provided
in the Company's Articles of Incorporation or Bylaws or the Certificate or
Articles of Incorporation, Bylaws or similar organizational documents of any of
the Company Subsidiaries as in effect as of the date hereof or pursuant to the
terms of any indemnification agreements entered into between the Company and any
of the Indemnified Parties with respect to matters occurring prior to the
Effective Time shall survive the Merger and shall continue in full force and
effect (without modification or amendment, except as required by applicable law
or except to make changes permitted by law that would enlarge the Indemnified
Parties' right of indemnification), to the fullest extent and for the maximum
term permitted by law, and shall be enforceable by the Indemnified Parties
against the Surviving Corporation. At the Closing the Surviving Corporation
shall expressly and directly assume by written instrument all such obligations.
GSCP shall cause to be maintained in effect for not less than six years from the
Effective Time the current policies of the directors' and officers' liability
insurance maintained by the Company (provided that GSCP may substitute therefor
policies of at least equivalent coverage containing terms and conditions which
are not materially less advantageous) with respect to matters occurring prior to
the Effective Time, provided that in no event shall GSCP or the Surviving
Corporation be required to expend to maintain or procure insurance coverage
pursuant to this Section 7.6 any amount per annum in excess of 300% of the
aggregate premiums paid in 1998 on an annualized basis for such policies. In the
event the payment of such amount for any year is insufficient to maintain such
insurance or equivalent coverage cannot otherwise be obtained, the Surviving
Corporation shall purchase as much insurance as may be purchased for the amount
indicated. The provisions of this Section 7.6 shall survive the consummation of
the Merger and expressly are intended to benefit each of the Indemnified
Parties.
Section 7.7 Comfort Letter. The Company shall use all reasonable
efforts to cause PricewaterhouseCoopers LLP or their successor, the Company's
independent accountants, and/or any other relevant auditors, to deliver to GSCP
a letter dated as of the date of the Proxy Statement/Prospectus and addressed to
GSCP, in form and substance reasonably satisfactory to GSCP, in connection with
the procedures undertaken by them with respect to the financial statements and
other financial
<PAGE>
information of the Company and the Company Subsidiaries contained in the
Registration Statement and the other matters contemplated by AICPA Statement No.
72 and customarily included in comfort letters relating to transactions similar
to the Merger.
Section 7.8 Tax Matters. The parties intend the Merger to qualify as a
reorganization under Section 368(a)(1)(E) of the Code; each party and its
affiliates shall use all reasonable efforts to cause the Merger to so qualify;
neither party nor any affiliate shall take any action that would reasonably be
expected to cause the Merger not to so qualify; and the parties will take the
position for all purposes that the Merger so qualifies, unless required to do
otherwise pursuant to a determination within the meaning of Section 1313(a) of
the Code. The Company and GSCP shall each reasonably cooperate in connection
with obtaining the opinions of special counsel described in Sections 8.2(b) and
8.3(b) including, without limitation, providing to special counsel such
representations as are reasonably required by special counsel to enable them to
render such opinions.
Section 7.9 Additional Matters. (a) Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all reasonable efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including using all reasonable efforts to obtain all necessary waivers, consents
and approvals in connection with the Governmental Requirements and any other
third party consents and to effect all necessary registrations and filings. In
case at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers
and/or directors of GSCP, Acquisition, the Company and the Surviving Corporation
shall take all such necessary action.
(b) At all times prior to the Closing, (i) the Company shall promptly
notify GSCP in writing of any fact, condition, event or occurrence that could
reasonably be expected to result in the failure of any of the conditions
contained in Sections 8.1 and 8.3 to be satisfied, promptly upon becoming aware
of the same and (ii) GSCP shall promptly notify the Company in writing of any
fact, condition, event or occurrence that could reasonably be expected to result
in the failure of any of the conditions contained in Sections 8.1 and 8.2 to be
satisfied, promptly upon becoming aware of the same.
Section 7.10 Shareholder Litigation. Each of the Company and GSCP shall
give the other the reasonable opportunity to participate at its sole cost and
expense in the defense of any shareholder litigation against the Company or
GSCP, as applicable, and its directors relating to the transactions contemplated
by this Agreement.
Section 7.11 Funding of Acquisition. The GSCP Funds shall, at the
Effective Time, enter into the Loan Agreement with the Surviving Corporation
pursuant to the commitment letter in the form attached hereto as Exhibit D and
perform their
<PAGE>
respective obligations thereunder to fund the Additional Advance.
Section 7.12 Disclosure Letters. From time to time prior to the
Effective Time, each of GSCP and the Company may supplement or amend the
Acquisition Disclosure Letter or the Company Disclosure Letter, as the case may
be, with respect to any matter hereafter arising that, if existing or occurring
at the date of this Agreement, would have been required to be set forth or
described therein or that is necessary to complete or correct any information
therein that is or has been rendered untrue, inaccurate, incomplete or
misleading. Delivery of such supplements shall be for informational purposes
only and shall not expand or limit the rights or affect the obligations of any
party hereunder, and such supplements shall not constitute a part of the
Acquisition Disclosure Letter or Company Disclosure Letter, as the case may be,
for purposes of this Agreement.
Section 7.13 Amendment to Preferred Stock Agreement. At or prior to the
Effective Time, the Company and the GSCP Funds shall enter into Amendment No. 1
to the Preferred Stock Purchase and Option Agreement, dated July 14, 1998, among
GSCP, GSCP Offshore Fund, L.P., Greenwich Fund, L.P., Travelers Casualty and
Surety Company and the Company, which shall be in the form attached hereto as
Exhibit C.
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 8.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction, or written waiver by such party, at or prior to the
Effective Time of the following conditions:
(a) any waiting period applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated, and no action shall
have been instituted by the Department of Justice or Federal Trade Commission
challenging or seeking to enjoin the consummation of this transaction, which
action shall not have been withdrawn or terminated;
(b) no statute, rule, regulation, executive order, decree, ruling or
preliminary or permanent injunction shall have been enacted, entered,
promulgated or enforced by any federal or state court or governmental authority
having jurisdiction which prohibits, restrains, enjoins or restricts
consummation of the Merger;
<PAGE>
(c) each of the Company, the Company Subsidiaries, Acquisition and GSCP
shall have made such filings, and obtained such material permits,
authorizations, consents, or approvals, required by Governmental Requirements to
consummate the transactions contemplated hereby, and the appropriate forms shall
have been executed, filed and approved as required by the Governmental
Requirements; and
(d) this Agreement, the Merger and the other transactions contemplated
hereby shall have been adopted and approved by the requisite vote of the
shareholders of the Company in accordance with the applicable provisions of the
FBCA (the "Requisite Vote").
Section 8.2 Conditions to Obligation of the Company to Effect the
Merger. The obligation of the Company to effect the Merger shall be subject to
the satisfaction at or prior to the Effective Time of the following additional
conditions:
(a) Each of GSCP and Acquisition shall have performed in all material
respects its obligations under this Agreement required to be performed by it at
or prior to the Effective Time, including the obligations pursuant to Section
7.11 hereof; the representations and warranties of GSCP and Acquisition
contained in this Agreement which are qualified with respect to materiality
shall be true and correct in all respects, and such representations and
warranties that are not so qualified shall be true and correct in all material
respects, in each case as of the date of this Agreement and at and as of the
Effective Time as if made at and as of such time except as contemplated by the
Acquisition Disclosure Letter and this Agreement; and the Company shall have
received a certificate of the Chairman of the Board, the President or the Chief
Financial Officer of the general partner of GSCP as to the satisfaction of this
condition; and
(b) The Company shall have received an opinion from Kramer Levin
Naftalis & Frankel LLP, special counsel to the Company, dated the Effective
Time, to the effect that, on the basis of certain facts, representations and
assumptions set forth in such opinion, the Merger will be treated for Federal
income tax purposes as a reorganization within the meaning of Section 368(a) of
the Code. In rendering the opinion described in the preceding sentence, such
counsel may require and rely upon representations contained in certificates of
officers of GSCP and the Company and their respective subsidiaries.
Section 8.3 Conditions to Obligations of GSCP and Acquisition to Effect
the Merger. The obligations of GSCP and Acquisition to effect the Merger shall
be subject to the satisfaction at or prior to the Effective Time of the
following additional conditions:
(a) the Company shall have performed in all material respects its
obligations under this Agreement required to be performed by it at or prior to
the
<PAGE>
Effective Time; and the representations and warranties of the Company contained
in this Agreement which are qualified with respect to materiality shall be true
and correct in all respects, and such representations and warranties that are
not so qualified shall be true and correct in all material respects, in each
case as of the date of this Agreement and at and as of the Effective Time as if
made at and as of such time, except as contemplated by the Company Disclosure
Letter or this Agreement and except that representations and warranties that are
made as of a specific date shall have been true and correct in all material
respects as of such specified date; and GSCP shall have received a certificate
of the Chairman of the Board, the President or the Chief Financial Officer of
the Company as to the satisfaction of this condition;
(b) GSCP shall have received an opinion from Debevoise & Plimpton,
special counsel to GSCP, dated the Effective Time, to the effect that, on the
basis of certain facts, representations and assumptions set forth in such
opinion, the Merger will be treated for Federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code. In rendering
the opinion described in the preceding sentence, such counsel may require and
rely upon representations contained in certificates of officers of GSCP and the
Company and their respective subsidiaries;
(c) each person serving as a director of the Company immediately prior
to the Effective Time, shall have delivered to the Company an irrevocable
resignation from such position, effective as of the Effective Time;
(d) since the date of this Agreement, there shall not have occurred or
be continuing any event, condition or set of circumstances which, individually
or in the aggregate, has had or is reasonably likely to result in a Company
Material Adverse Effect;
(e) the third party consents listed on Schedule 8.3(e) hereto shall
have been obtained and all other third party consents shall have been obtained
other than consents the failure of which to be obtained would not reasonably be
expected to have a Company Material Adverse Effect;
(f) holders of the Company Common Stock representing, in the aggregate,
not more than 10% of the Company Common Stock outstanding, shall have exercised
dissenters' rights by delivering notice to the Company of an intent to demand
payment for such shares pursuant to the Dissenters Statute;
(g) the Company shall have entered into employment agreements with the
employees identified on Schedule 8.3(g) hereto effective as of the Effective
Time, in form and substance satisfactory to GSCP; and
(h) each of the Amended and Restated Intercreditor Agreements listed
<PAGE>
on Schedule 8.3(h) hereto shall remain in full force and effect and the
Standstill Period (as defined therein) shall not have terminated, and there
shall not have occurred any event which, after notice or passage of time or
both, would permit the termination of the Standstill Period thereunder.
ARTICLE IX
TERMINATION
Section 9.1 Termination by Mutual Consent. This Agreement may be
terminated at any time prior to the Effective Time by mutual written agreement
of GSCP and the Company.
Section 9.2 Termination by Either GSCP or the Company. This Agreement
may be terminated and the Merger may be abandoned by action of either GSCP or
the Board of Directors of the Company if (a) this Agreement, the Merger and the
other transactions contemplated hereby shall fail to receive the Requisite Vote
for approval and adoption by the shareholders of the Company at the Special
Meeting, (b) the Merger shall not have been consummated on or before June 30,
1999; provided, however, that this Agreement may be extended (i) by the mutual
written agreement of GSCP and the Company, or (ii) by written notice of either
GSCP or the Company to a date no later than September 30, 1999, if the Merger
shall not have been consummated as a direct and principal result of the
conditions in Sections 8.1(a) or 8.1(c) not having been satisfied by such date,
or (c) a United States federal or state court of competent jurisdiction or
United States federal or state governmental, regulatory or administrative agency
or commission shall have issued an order, decree or ruling or taken any other
action permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree, ruling or
other action shall have become final and non-appealable; provided, that the
party seeking to terminate this Agreement pursuant to clause (b) shall not be in
material violation of any of its representations, warranties or covenants set
forth in this Agreement, and the party seeking to terminate this Agreement
pursuant to clause (c) shall have used all reasonable efforts to remove such
injunction, order or decree.
Section 9.3 Termination by the Company. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time, before or after the adoption and approval of the Merger and this Agreement
by the shareholders of the Company referred to in Section 2.1, by action of the
Board of Directors of the Company, if prior to the Special Meeting, the Board of
Directors of the
<PAGE>
Company has withdrawn, or modified or changed in a manner adverse to GSCP and
Acquisition its approval or recommendation of this Agreement or the Merger in
order to approve and permit the Company to execute a definitive agreement
relating to a Superior Proposal; provided, however, that prior to any such
withdrawal, modification, change or termination, the Company shall, and shall
cause its respective financial and legal advisors to, negotiate in good faith
with GSCP and Acquisition to make such adjustments in the terms and conditions
of this Agreement as would enable the Company to proceed with the transactions
contemplated herein on such adjusted terms.
Section 9.4 Termination by GSCP. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time by action of
GSCP, if (a) there has been a breach by the Company or a Company Subsidiary of
any representation or warranty contained in this Agreement which would have or
would reasonably be likely to have a Company Material Adverse Effect and is not
cured, if curable within thirty (30) days after notice; (b) there has been a
material breach of any of the covenants or agreements set forth in this
Agreement on the part of the Company or a Company Subsidiary, which breach is
not curable or, if curable, is not cured within thirty (30) days after written
notice of such breach given by GSCP to the Company; or (c) the Board of
Directors of the Company shall have withdrawn, modified or changed in a manner
adverse to GSCP and Acquisition its approval or recommendation of this Agreement
or the Merger or shall have recommended a Takeover Proposal, or shall have
executed an agreement in principle (or similar agreement) or definitive
agreement providing for a Takeover Proposal or other business combination with a
person or entity other than Acquisition.
Section 9.5 Effect of Termination and Abandonment. (a) In the event of
termination of this Agreement and the abandonment of the Merger pursuant to this
Article IX, written notice thereof shall as promptly as practicable be given to
the other party to this Agreement and this Agreement shall terminate and the
transactions contemplated hereby shall be abandoned, without further action by
any of the parties hereto. If this Agreement is terminated as provided herein:
(i) there shall be no liability or obligation on the part of GSCP, Acquisition,
the Company or the Company Subsidiaries or their respective officers and
directors, and all obligations of the parties shall terminate, except for the
obligations of the parties pursuant to this Section 9.5, except for the
provisions of Sections 4.11, 5.17, 7.4, 10.4, 10.5, 10.6, 10.10, 10.11 and 10.12
and except that a party who is in material breach of its representations,
warranties, covenants or agreements set forth in this Agreement shall be liable
for damages occasioned by such breach, including without limitation any expenses
incurred by the other party in connection with this Agreement and the
transactions contemplated hereby, and (ii) all filings, applications and other
submissions made pursuant to the transactions contemplated by this Agreement
shall, to the extent practicable, be withdrawn from the agency or person to
which made.
<PAGE>
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Survival of Representations, Warranties and Agreements. No
representations, warranties, covenants or agreements in this Agreement or in any
instrument delivered pursuant to this Agreement, shall survive beyond the
Effective Time, other than those covenants and agreements which by their express
terms apply in whole or in part after the Effective Time.
Section 10.2 Notices. All notices, claims, demands and other communi
cations hereunder shall be in writing and shall be deemed given upon (a)
confirmation of receipt of a facsimile transmission, (b) confirmed delivery by a
standard overnight carrier or when delivered by hand or (c) the expiration of
five business days after the day when mailed by registered or certified mail
(postage prepaid, return receipt requested), addressed to the respective parties
at the following addresses (or such other address for a party as shall be
specified by like notice):
(a) If to GSCP, to:
Greenwich Street Capital Partners II, L.P.
c/o Greenwich Street Capital Partners Inc.
388 Greenwich Street, 36th Floor
New York, New York 10013
Telecopy: (212) 816-0166
Attention: Sanjay Patel
With copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Telecopy: (212) 909-6836
Attention: Steven Ostner, Esq.
(b) If to the Company, to:
IMC Mortgage Company
5901 E. Fowler Avenue
<PAGE>
Tampa, Florida 33617
Telecopy: (813) 984-2593
Attention: President
With copies to:
Mitchell W. Legler, Esq.
300A Wharfside Way
Jacksonville, Florida 32207
Telecopy: (904) 346-3299
-and-
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
Telecopy: (212) 715-8000
Attention: Peter S. Kolevzon, Esq.
Section 10.3 Descriptive Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 10.4 Entire Agreement; Assignment. This Agreement (including
the Exhibits, the Schedules, the Company Disclosure Letter, the Acquisition
Disclosure Letter and the other documents and instruments referred to herein)
constitutes the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, among the parties or any of them, with
respect to the subject matter hereof, including, without limitation, any
transaction between or among the parties hereto. This Agreement shall not be
assigned by operation of law or otherwise.
Section 10.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the provisions thereof relating to conflicts of law, except to the
extent that it is mandatorily governed by the laws of the States of Florida and
Delaware.
Section 10.6 Expenses. Except as provided in Section 9.5, whether or
not the Merger is consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby and thereby shall
be paid by the party incurring such expenses.
Section 10.7 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
<PAGE>
Section 10.8 Waiver. At any time prior to the Effective Time, the
parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
Section 10.9 Counterparts; Effectiveness. This Agreement may be
executed in two or more counterparts, each of which shall be deemed to be an
original but all of which shall constitute one and the same agreement. This
Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
Section 10.10 Severability; Validity; Parties in Interest. If any
provision of this Agreement, or the application thereof to any person or
circumstance, is held invalid or unenforceable, the remainder of this Agreement,
and the application of such provision to other persons or circumstances, shall
not be affected thereby, and to such end, the provisions of this Agreement are
agreed to be severable. Nothing in this Agreement, express or implied, is
intended to confer upon any person not a party to this Agreement any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
Section 10.11 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any provision of this Agreement
was not performed in accordance with its specific terms or was otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of competent
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
SECTION 10.12 WAIVER OF JURY TRIAL. EACH PARTY AC KNOWLEDGES AND AGREES
THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS
<PAGE>
AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SEC TION 10.12(B).
<PAGE>
IN WITNESS WHEREOF, each of GSCP, Acquisition and the Company has
caused this Agreement to be executed as of the date first above written.
GREENWICH STREET CAPITAL
PARTNERS II, L.P.
By: Greenwich Street Investments II,
L.L.C., its General Partner
By: /s/
--------------------------------------
Name:
Title: Managing Member
IMC 1999 ACQUISITION CO., INC.
By: /s/
--------------------------------------
Name:
Title:
IMC MORTGAGE COMPANY
By: /s/
--------------------------------------
Name:
Title:
<PAGE>
The obligations set forth in Section 7.11 are accepted and agreed.
GSCP OFFSHORE FUND, L.P.
GREENWICH FUND, L.P.
GREENWICH STREET EMPLOYEES FUND, L.P.
TRV EXECUTIVE FUND, L.P.
By: Greenwich Street Investments II, L.L.C.,
their General Partner
By: /s/
-----------------------------
Name:
Title: Managing Member
<PAGE>
Exhibit A to Merger Agreement
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
IMC MORTGAGE COMPANY
The undersigned, for the purpose of forming a Corporation for profit
under the laws of Florida, adopts the following Articles of Incorporation.
ARTICLE I
NAME AND ADDRESS
Section 1.1 Name. The name of the corporation is IMC Mortgage Company
(the "Corporation").
Section 1.2 Address of Principal Office. The address of the principal
office of the Corporation is 3450 Buschwood Park Drive, Suite 250, Tampa,
Florida 33618.
ARTICLE II
DURATION
Section 2.1 Duration. This Corporation shall exist perpetually.
ARTICLE III
PURPOSES
Section 3.1 Purposes. This Corporation is organized for the purposes of
transacting any or all lawful business permitted under the laws of the United
States and of the State of Florida.
ARTICLE IV
CAPITAL
Section 4.1. Authorized Capital. The maximum number of shares of stock
which the Corporation is authorized to have outstanding at any one time is sixty
million (60,000,000) shares (the "Capital Stock") divided into classes as
follows:
1. Ten million (10,000,000) shares of preferred stock having a par
value of $0.01 per share (the "Preferred Stock"), and which may be issued in one
or more
<PAGE>
classes or series as further described in Section 4.2; and
2. Fifty million (50,000,000) shares of common stock having a par value
of $0.001 per share (the "Common Stock").
All such shares shall be issued fully paid and nonassessable.
Section 4.2. Preferred Stock. Article V herein provides for the Class A
Preferred Stock. Article VI herein provides for the Class B Preferred Stock.
Other than the Class A Preferred Stock and the Class B Preferred Stock, no other
class of Preferred Stock has been authorized, issued or provided for as of the
date these Articles of Incorporation are first duly filed with the Department of
State of Florida. The Board of Directors is authorized from time to time to
provide for the issuance of Preferred Stock in one or more classes and in one or
more series within a class and, by filing the appropriate Articles of Amendment
with the Secretary of State of Florida which shall be effective without
shareholder action, is authorized to establish the number of shares to be
included in each class and each series and the preferences, limitations and
relative rights of each class and each series. Such preferences must include the
preferential right to receive distributions of dividends or the preferential
right to receive distributions of assets upon the dissolution of the Corporation
before shares of Common Stock are entitled to receive such distributions. Shares
of a class of Preferred Stock may have preference over shares of other classes
of Preferred Stock to the extent determined by the Board of Directors at the
time of establishing such class.
Section 4.3. Common Stock. Holders of Common Stock are entitled to one
vote per share on all matters required by Florida law to be approved by the
shareholders. Subject to the rights of any outstanding classes or series of
Preferred Stock having preferential dividend rights, holders of Common Stock are
entitled to such dividends as may be declared by the Board of Directors out of
funds lawfully available therefor. Upon the dissolution of the Corporation,
holders of Common Stock are entitled to receive, pro rata in accordance with the
number of shares owned by each, the net assets of the Corporation remaining
after the holders of any outstanding classes or series of Preferred Stock having
preferential rights to such assets have received the distributions to which they
are entitled.
ARTICLE V
CLASS A PREFERRED STOCK
The class, designated as Class A Preferred Stock, will have the
designations,
<PAGE>
preferences, voting powers, relative, participating, optional or other special
rights and privileges, and the qualifications, limitations and restrictions as
follows:
Section 5.1 Designation, Rank. This series of Preferred Stock shall be
designated the "Class A Preferred Stock," with a par value of $0.01 per share.
The Class A Preferred Stock will rank, with respect to rights on liquidation,
winding-up and dissolution, (i) senior to all classes of Common Stock of the
Corporation, as they exist on the date hereof or as such stock may be
constituted from time to time, and each other class of Capital Stock or class or
series of Preferred Stock established by the Board of Directors to the extent
the terms of such stock do not expressly provide that it ranks on a parity with
the Class A Preferred Stock as to rights on liquidation, winding-up and
dissolution (collectively, together with the Common Stock, the "Junior
Securities"); (ii) on a parity with each class of Capital Stock or class or
series of Preferred Stock established by the Board of Directors to the extent
the terms of such stock expressly provide that it will rank on a parity with the
Class A Preferred Stock as to rights on liquidation, winding-up and dissolution
(collectively, the "Parity Securities"); and (iii) junior to each other class of
Capital Stock or class or series of Preferred Stock established by the Board of
Directors to the extent the terms of such stock expressly provide that it will
rank senior to the Class A Preferred Stock as to rights on liquidation,
winding-up and dissolution (collectively, the "Senior Securities"). The Class A
Preferred Stock and Class B Preferred Stock provided for in Article VI herein
are Parity Securities.
Section 5.2. Authorized Number. The authorized number of shares
constituting the Class A Preferred Stock shall be 500,000 shares.
Section 5.3. Dividends. Holders of Class A Preferred Stock will not be
entitled to any dividends.
Section 5.4. Liquidation Rights. The liquidation value of each share of
Class A Preferred Stock shall be $100.00 (the "Liquidation Value"). In the event
of any voluntary or involuntary liquidation, dissolution or winding-up of the
Corporation, after satisfaction of the claims of creditors and before any
payment or distribution of assets is made on any Junior Securities, including,
without limitation, the Common Stock, but after any payment or distribution of
assets to holders of Senior Securities, if any, (i) the holders of Class A
Preferred Stock shall receive a liquidation preference equal to the Liquidation
Value of their shares and (ii) the holders of any Parity Securities shall be
entitled to receive an amount equal to the full respective liquidation
preferences (including any premium) to which they are entitled and shall receive
an
<PAGE>
amount equal to all accrued and unpaid dividends with respect to their
respective shares through and including the date of distribution (whether or not
declared). If, upon such a voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation, the assets of the Corporation are insufficient to
pay in full the amounts described above as payable with respect to the Class A
Preferred Stock and any Parity Securities, the holders of the Class A Preferred
Stock and such Parity Securities will share ratably in any distribution of
assets of the Corporation in proportion to their respective liquidation
preferences. After payment of the Liquidation Value, the Class A Preferred Stock
will not be entitled to any further participation in any distribution of assets
by the Corporation. Neither the sale or transfer of all or any part of the
assets of the Corporation, nor the merger or consolidation of the Corporation
into or with any other corporation or a merger of any other corporation with or
into the Corporation, will be deemed to be a liquidation, dissolution or
winding-up of the Corporation.
Section 5.5. Voting Rights. Except as provided below or as may be
required by the law of the State of Florida or provided by the resolution
creating any other series of Preferred Stock, the holders of Class A Preferred
Stock will not be entitled to vote. So long as any shares of Class A Preferred
Stock are outstanding, the vote or consent of the holders of 66 2/3% of the
outstanding shares of Class A Preferred Stock, voting together as a single
class, shall be necessary to (i) increase or decrease the par value of the
shares of Class A Preferred Stock or (ii) amend Article IV of these Articles of
Incorporation, except with respect to changes in the par value of, or the number
of authorized shares of Common Stock, or alter or change the powers,
preferences, or special rights of the shares of Class A Preferred Stock, so as
to affect them adversely, either directly or indirectly, or through a merger or
consolidation with any person, or (iii) authorize or issue any additional class
or series of Parity Securities or Senior Securities, or any security convertible
into Parity Securities or Senior Securities; provided, however, that the
Corporation may amend such Article IV to authorize Parity Securities not to
exceed, in the aggregate, $100 million in liquidation value without the consent
of holders of 66 2/3% of the outstanding shares of Class A Preferred Stock.
Section 5.6. Mandatory Redemption. (a) The Corporation shall be
required to redeem (x) 33 1/3% of the Class A Preferred Stock outstanding on
July 14, 2008, (y) 50% of the Class A Preferred Stock outstanding on July 14,
2009 and (z) the balance of the Class A Preferred Stock outstanding on July 14,
2010, at a redemption price per share equal to the Liquidation Value. In
addition, the Corporation shall be required to redeem, in the event of a Change
of Control, all of the Class A Preferred Stock then outstanding no later than 30
days following the occurrence of such Change of Control, at a redemption price
per share equal to 110% of the Liquidation Value (such payment, together with
each of the redemption payments required to be made pursuant to the
<PAGE>
immediately preceding sentence, a "Redemption Payment"). In accord ance with
subsection (b) below, the Corporation shall mail to each record holder of Class
A Preferred Stock written notice of its requirement to redeem shares of Class A
Preferred Stock held by such holder. For purposes of this Section 5.6, "Change
of Control" means the occurrence of any of the following events (other than as a
consequence of the issuance of Capital Stock of the Corporation to, or a merger
of the Corporation with an entity controlled by any of, the initial holder or
holders of the Class A Preferred Stock, or any change of directors resulting
from any such merger): (i) any "Person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all shares that any such Person has the right to acquire within
one year except for a right to acquire shares pursuant to an agreement between
any initial holder or holders of the Class A Preferred Stock and an affiliate of
any such holder or holders), directly or indirectly, of more than 50% of the
voting stock of the Corporation; (ii) individuals who on the date hereof
constituted the Board of Directors (together with any such individuals whose
election by the Board of Directors or whose nomination for election by the
shareholders of the Corporation was approved by a majority of the directors then
still in office who were directors on the date hereof or persons whose election
as directors or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors then in office;
(iii) the Corporation or any of its subsidiaries consummates any sale, lease,
exchange or other disposition of all or substantially all of the assets of the
Corporation and its subsidiaries, taken as a whole, in any transaction or series
of transactions not in the ordinary course of business; or (iv) the Corporation
engages in a merger, consolidation or similar business combination with any
third party.
(b) Mechanics of Redemption. In the event the Corporation shall be
required to redeem shares of Class A Preferred Stock, notice of such redemption
shall be given by first class mail, postage prepaid, mailed not less than 10
days nor more than 30 days prior to the redemption date, to the holder of record
of the shares to be redeemed at such holder's address as the same appears on the
stock register of the Corporation. Each such notice shall state: (i) the
redemption date; (ii) the redemption price; and (iii) the place or places where
certificates for such shares are to be surrendered for payment of the redemption
price. The redeemed shares of Class A Preferred Stock shall no longer be deemed
to be outstanding and shall be canceled and shall not be available for reissue
or redesignation, and all rights of the holders thereof as a shareholder of the
Corporation (except the right to receive from the Corporation the redemption
price) shall cease.
<PAGE>
Section 5.7. Status of Reacquired Shares. If shares of Class A
Preferred Stock are redeemed pursuant to Section 5.6 hereof, the shares so
redeemed shall, upon compliance with any statutory requirements, assume the
status of authorized but unissued shares of Preferred Stock of the Corporation,
but may not be reissued as Class A Preferred Stock.
Section 5.8. Preemptive Rights. The Class A Preferred Stock is not
entitled to any preemptive or subscription rights in respect of any securities
of the Corporation.
Section 5.9. Notices. Except as otherwise provided herein, all notices,
requests, demands, and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered by and when sent by telex
or telecopier (with receipt confirmed) on the business day following receipt,
provided a copy is also sent by express (overnight, if possible) courier,
addressed (i) in the case of a holder of Class A Preferred Stock, to such
holder's address as it appears on the books of the Corporation, and (ii) in the
case of the Corporation, to the Corporation's principal executive offices to the
attention of the Corporation's Chief Financial Officer.
Section 5.10. Severability of Provisions. Whenever possible, each
provision hereof shall be interpreted in a manner as to be effective and valid
under applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
ARTICLE VI
CLASS B PREFERRED STOCK
The class, designated as Class B Preferred Stock, will have the
designations, preferences, voting powers, relative, participating, optional or
other special rights and privileges, and the qualifications, limitations and
restrictions as follows:
Section 6.1. Designation, Rank. This series of Preferred Stock shall be
designated the "Class B Preferred Stock," with a par value of $0.01 per share.
The
<PAGE>
Class B Preferred Stock will rank, with respect to rights on liquidation,
winding-up and dissolution, (i) senior to all classes of Common Stock of the
Corporation, as they exist on the date hereof or as such stock may be
constituted from time to time, and each other class of Capital Stock or class or
series of Preferred Stock established by the Board of Directors to the extent
the terms of such stock do not expressly provide that it ranks on a parity with
the Class B Preferred Stock as to rights on liquidation, winding-up and
dissolution (collectively, together with the Common Stock, the "Class B Junior
Securities"); (ii) on a parity with each class of Capital Stock or class or
series of Preferred Stock established by the Board of Directors to the extent
the terms of such stock expressly provide that it will rank on a parity with the
Class B Preferred Stock as to rights on liquidation, winding-up and dissolution
(collectively, the "Class B Parity Securities"); and (iii) junior to each other
class of Capital Stock or class or series of Preferred Stock established by the
Board of Directors to the extent the terms of such stock expressly provide that
it will rank senior to the Class B Preferred Stock as to rights on liquidation,
winding-up and dissolution (collectively, the "Class B Senior Securities").
Section 6.2. Authorized Number. The authorized number of shares
constituting the Class B Preferred Stock shall be 300,000 shares.
Section 6.3. Dividends. Holders of Class B Preferred Stock will not be
entitled to any dividends.
Section 6.4. Liquidation Rights. The liquidation value of each share of
Class B Preferred Stock shall be $100.00 (the "Class B Liquidation Value"). In
the event of any voluntary or involuntary liquidation, dissolution or winding-up
of the Corporation, after satisfaction of the claims of creditors and before any
payment or distribution of assets is made on any Class B Junior Securities,
including, without limitation, the Common Stock but after any payment or
distribution of assets to holders of Class B Senior Securities, if any, (i) the
holders of Class B Preferred Stock shall receive a liquidation preference equal
to the Class B Liquidation Value of their shares and (ii) the holders of any
Class B Parity Securities shall be entitled to receive an amount equal to the
full respective liquidation preferences (including any premium) to which they
are entitled and shall receive an amount equal to all accrued and unpaid
dividends with respect to their respective shares through and including the date
of distribution (whether or not declared). If, upon such a voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation, the
assets of the Corporation are insufficient to pay in full the amounts described
above as payable with respect to the Class B Preferred Stock and any Class B
Parity Securities, the holders of the Class B
<PAGE>
Preferred Stock and such Class B Parity Securities will share ratably in any
distribution of assets of the Corporation in proportion to their respective
liquidation preferences. After payment of the Class B Liquidation Value, the
Class B Preferred Stock will not be entitled to any further participation in any
distribution of assets by the Corporation. Neither the sale or transfer of all
or any part of the assets of the Corporation, nor the merger or consolidation of
the Corporation into or with any other corporation or a merger of any other
corporation with or into the Corporation, will be deemed to be a liquidation,
dissolution or winding-up of the Corporation.
Section 6.5. Voting Rights. Except as provided below or as may be
required by the law of the State of Florida or provided by the resolution
creating any other series of Preferred Stock, the holders of Class B Preferred
Stock will not be entitled to vote. So long as any shares of Class B Preferred
Stock are outstanding, the vote or consent of the holders of 66 2/3% of the
outstanding shares of Class B Preferred Stock, voting together as a single
class, shall be necessary to (i) increase or decrease the par value of the
shares of Class B Preferred Stock or (ii) amend Article IV of these Articles of
Incorporation, except with respect to changes in the par value of, or the number
of authorized shares of Common Stock, or alter or change the powers,
preferences, or special rights of the shares of Class B Preferred Stock, so as
to affect them adversely, either directly or indirectly, or through a merger or
consolidation with any person, or (iii) authorize or issue any additional class
or series of Class B Parity Securities or Class B Senior Securities, or any
security convertible into Class B Parity Securities or Class B Senior
Securities; provided, however, that the Corporation may amend such Article IV to
authorize Class B Parity Securities not to exceed, in the aggregate, $100
million in liquidation value without the consent of holders of 66 2/3% of the
outstanding shares of Class B Preferred Stock.
Section 6.6. Mandatory Redemption.
(a) The Corporation shall be required to redeem (x) 33 1/3% of the
Class B Preferred Stock outstanding on July 14, 2008, (y) 50% of the Class B
Preferred Stock outstanding on July 14, 2009 and (z) the balance of the Class B
Preferred Stock outstanding on July 14, 2010, at a redemption price per share
equal to the Class B Liquidation Value. In addition, the Corporation shall be
required to redeem, in the event of a Change of Control, all of the Class B
Preferred Stock then outstanding no later than 30 days following the occurrence
of such Change of Control, at a redemption price per share equal to 110% of the
Class B Liquidation Value (such payment, together with each of the redemption
payments required to be made pursuant to the immediately preceding sentence, a
"Class B Redemption Payment"). In accordance with subsection (b) below, the
Corporation shall mail to each record holder of Class B
<PAGE>
Preferred Stock written notice of its requirement to redeem shares of Class B
Preferred Stock held by such holder. For purposes of this Section 6.6, "Change
of Control" means the occurrence of any of the following events (other than as a
consequence of the issuance of Capital Stock of the Corporation to, or a merger
of the Corporation with an entity controlled by any of, the initial holder or
holders of the Class B Preferred Stock, or any change of directors resulting
from any such merger): (i) any "Person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all shares that any such Person has the right to acquire within
one year except for a right to acquire shares pursuant to an agreement between
any initial holder or holders of the Class B Preferred Stock and an affiliate of
any such holder or holders), directly or indirectly, of more than 50% of the
voting stock of the Corporation; (ii) individuals who on the date hereof
constituted the Board of Directors (together with any such individuals whose
election by the Board of Directors or whose nomination for election by the
shareholders of the Corporation was approved by a majority of the directors then
still in office who were directors on the date hereof or persons whose election
as directors or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors then in office;
(iii) the Corporation or any of its subsidiaries consummates any sale, lease,
exchange or other disposition of all or substantially all of the assets of the
Corporation and its subsidiaries, taken as a whole, in any transaction or series
of transactions not in the ordinary course of business; or (iv) the Corporation
engages in a merger, consolidation or similar business combination with any
third party.
(b) Mechanics of Redemption. In the event the Corporation shall be
required to redeem shares of Class B Preferred Stock, notice of such redemption
shall be given by first class mail, postage prepaid, mailed not less than 10
days nor more than 30 days prior to the redemption date, to the holder of record
of the shares to be redeemed at such holder's address as the same appears on the
stock register of the Corporation. Each such notice shall state: (i) the
redemption date; (ii) the redemption price; and (iii) the place or places where
certificates for such shares are to be surrendered for payment of the redemption
price. The redeemed shares of Class B Preferred Stock shall no longer be deemed
to be outstanding and shall be canceled and shall not be available for reissue
or redesignation, and all rights of the holders thereof as a shareholder of the
Corporation (except the right to receive from the Corporation the redemption
price) shall cease.
Section 6.7. Status of Reacquired Shares. If shares of Class B
Preferred
<PAGE>
Stock are redeemed pursuant to Section 6.6 hereof, the shares so redeemed shall,
upon compliance with any statutory requirements, assume the status of authorized
but unissued shares of Preferred Stock of the Corporation, but may not be
reissued as Class B Preferred Stock.
Section 6.8. Preemptive Rights. The Class B Preferred Stock is not
entitled to any preemptive or subscription rights in respect of any securities
of the Corporation.
Section 6.9. Notices. Except as otherwise provided herein, all notices,
requests, demands, and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered by and when sent by telex
or telecopier (with receipt confirmed) on the business day following receipt,
provided a copy is also sent by express (overnight, if possible) courier,
addressed (i) in the case of a holder of Class B Preferred Stock, to such
holder's address as it appears on the books of the Corporation, and (ii) in the
case of the Corporation, to the Corporation's principal executive offices to the
attention of the Corporation's Chief Financial Officer.
Section 6.10. Severability of Provisions. Whenever possible, each
provision hereof shall be interpreted in a manner as to be effective and valid
under applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
ARTICLE VII
INITIAL REGISTERED OFFICE AND AGENT
Section 7.1 Name and Address. The street address of the initial
registered office of this Corporation is One Independent Drive, Suite 3104,
Jacksonville, Florida 32202, and the name of the initial registered agent of
this Corporation at that address is Mitchell W. Legler.
ARTICLE VIII
DIRECTORS
<PAGE>
Section 8.1 Number; Term. The number and term of office of directors
shall be establish by the bylaws and may be increased or diminished from time to
time by the bylaws, but shall never be less than one. Successors of the
directors whose terms expire shall be elected at the annual meeting of
shareholders as provided in the bylaws.
Section 8.2 Vacancies. Any vacancy on the Board of Directors resulting
from removal or otherwise shall be filled only by vote of a majority of the
directors then in office, although less than a quorum, and any director so
chosen shall hold office until the next meeting of shareholders at which
directors are elected, and until his or her successor shall have been elected
and qualified, or until any such director's earlier death, resignation or
removal.
ARTICLE IX
MEETINGS OF SHAREHOLDERS
Section 9.1 Special Meetings. Special meetings of shareholders may be
called at any time, but only by (a) the Chairman of the Board of the
Corporation, (b) a majority of the directors in office, although less than a
quorum, and (c) the holders of not less than thirty-five percent (35%) of the
total number of votes of the then outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class.
Section 9.2 Shareholder Action by Written Consent. Any action required
or permitted to be taken by the shareholders of the Corporation must be effected
at a duly called annual or special meeting of the shareholders, and may not be
effected by any consent in writing by such shareholders, unless such written
consent is by the holders of ninety percent (90%) of the outstanding shares of
capital stock of the Corporation entitled to vote generally in the election of
directors, voting together as a single class (unless separate voting by classes
is required by law, in which case, the written consent by the holders of ninety
percent (90%) of the outstanding shares of each class or series entitled to vote
as a class shall be required).
ARTICLE X
BYLAWS
Section 10.1 Bylaws. The initial bylaws of this Corporation shall be
adopted by
<PAGE>
the Board of Directors. Bylaws may be amended or repealed from time to time by
either the Board of Directors or the shareholders, but the Board of Directors
shall not alter, amend or repeal any bylaw adopted by the shareholders if the
shareholders specifically provide that such bylaw is not subject to amendment or
repeal by the Board of Directors.
ARTICLE XI
INDEMNIFICATION
Section 11.1 Indemnification. The Board of Directors is hereby
specifically authorized to make provision for indemnification of directors,
officers, employees and agents to the full extent permitted by law.
ARTICLE XII
AMENDMENT
Section 12.1 Amendment. This Corporation reserves the right to amend or
repeal any provision contained in these Articles of Incorporation, and any right
conferred upon the shareholders is subject to this reservation.
Section 12.2 Required Vote. The affirmative vote of the holders of a
majority of the outstanding shares of Capital Stock of the Corporation entitled
to vote generally in the election of directors, voting together as a single
class, shall be required (unless separate voting by classes is required by law,
in which case, the affirmative vote of the holders of a majority of the
outstanding shares of each class or series entitled to vote as a class shall be
required) in order to amend or repeal, or to adopt any provision inconsistent
with the purpose or intent of Article VIII ("Directors") or this Article XII
("Amendment").
ARTICLE XIII
AFFILIATE TRANSACTIONS AND CONTROL-SHARE ACQUISITIONS
Section 13.1 Affiliate Transactions and Control-Share Acquisitions.
Pursuant to the authority granted in Subsection (5)(c) of Section 607.0901 of
the Florida 1989 Business Corporation Act (the "FBCA"), the Corporation elects
not to be governed by the aforementioned Section 607.0901 entitled "Affiliated
Transactions". Pursuant to the authority granted in Subsections (5) and (11) of
Section 607.0902 of the FBCA, the aforementioned Section 607.0902 entitled
"Control-Share Acquisitions" shall not apply to
<PAGE>
control-share acquisitions of shares of the Corporation, and shareholders of the
Corporation shall not have dissenters' rights as provided in Sections 607.1301,
607.1302 and 607.1320 of the FBCA in the event control shares acquired in a
control-share acquisition are accorded full voting rights.
<PAGE>
IN WITNESS WHEREOF, the [ ] of the Corporation has executed these
Amended and Restated Articles the ____ day of ________________, 1999.
[ ]
<PAGE>
Draft--February 18, 1999
Exhibit B to Merger Agreement
AMENDED AND RESTATED
BYLAWS
OF
IMC MORTGAGE COMPANY
(a Florida corporation)
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1
Definitions
Section 1.1 Definitions......................................................1
ARTICLE 2
Offices
Section 2.1 Principal and Business Offices...................................1
Section 2.2 Registered Office................................................1
ARTICLE 3
Shareholders
Section 3.1 Annual Meeting...................................................2
Section 3.2 Special Meetings.................................................3
Section 3.3 Place of Meeting.................................................3
Section 3.4 Notice of Meeting................................................3
Section 3.5 Waiver of Notice.................................................4
Section 3.6 Fixing of Record Date............................................4
Section 3.7 Shareholders' List for Meetings..................................5
Section 3.8 Quorum...........................................................6
Section 3.9 Voting of Shares.................................................7
Section 3.10 Vote Required...................................................7
Section 3.11 Conduct of Meeting..............................................7
Section 3.12 Inspectors of Election..........................................7
Section 3.13 Proxies.........................................................8
Section 3.14 Action by Shareholders Without Meeting..........................8
Section 3.15 Acceptance of Instruments Showing Shareholder Action............9
<PAGE>
ARTICLE 4
Board of Directors
Section 4.1 General Powers and Number........................................10
Section 4.2 Qualifications...................................................10
Section 4.3 Term of Office and Election......................................10
Section 4.4 Resignation......................................................11
Section 4.5 Vacancies........................................................11
Section 4.6 Compensation.....................................................12
Section 4.7 Regular Meetings.................................................12
Section 4.8 Special Meetings.................................................12
Section 4.9 Notice...........................................................12
Section 4.10 Waiver of Notice................................................12
Section 4.11 Quorum and Voting...............................................13
Section 4.12 Conduct of Meetings.............................................13
Section 4.13 Committees......................................................13
Section 4.14 Action Without Meeting..........................................14
ARTICLE 5
Officers
Section 5.1 Number...........................................................15
Section 5.2 Election and Term of Office......................................15
Section 5.3 Removal..........................................................15
Section 5.4 Resignation......................................................15
Section 5.5 Vacancies........................................................15
Section 5.6 Chairman of the Board............................................15
Section 5.7 President........................................................16
Section 5.8 Vice Presidents..................................................16
Section 5.9 Secretary........................................................17
Section 5.10 Treasurer.......................................................17
Section 5.11 Assistant Secretaries and Assistant Treasurers..................17
Section 5.12 Other Assistants and Acting Officers............................18
Section 5.13 Salaries........................................................18
ARTICLE 6
Contracts, Checks and Deposits; Special Corporate Acts
Section 6.1 Contracts........................................................18
Section 6.2 Checks, Drafts, etc..............................................18
Section 6.3 Deposits.........................................................19
Section 6.4 Voting of Securities Owned by Corporation........................19
ARTICLE 7
Certificates for Shares; Transfer of Shares
<PAGE>
Section 7.1 Consideration for Shares.........................................19
Section 7.2 Certificates for Shares..........................................20
Section 7.3 Transfer of Shares...............................................20
Section 7.4 Restrictions on Transfer.........................................20
Section 7.5 Lost, Destroyed, or Stolen Certificates..........................21
Section 7.6 Stock Regulations................................................21
ARTICLE 8
Seal
Section 8.1 Seal.............................................................21
ARTICLE 9
Books and Records
Section 9.1 Books and Records................................................21
Section 9.2 Shareholders' Inspection Rights..................................22
Section 9.3 Distribution of Financial Information............................22
Section 9.4 Other Reports....................................................22
ARTICLE 10
Indemnification
Section 10.1 Provision of Indemnification....................................22
ARTICLE 11
Amendments
Section 11.1 Power to Amend..................................................23
<PAGE>
ARTICLE 1
Definitions
Section 1.1 Definitions. The following terms shall have the following
meanings for purposes of these bylaws:
"Act" means the Florida Business Corporation Act, as it may be amended
from time to time, or any successor legislation thereto.
"Deliver" or "delivery" includes delivery by hand; United States mail;
facsimile, telegraph, teletype or other form of electronic transmission; and
private mail carriers handling nationwide mail services.
"Distribution" means a direct or indirect transfer of money or other
property (except shares in the corporation) or an incurrence of indebtedness by
the corporation to or for the benefit of shareholders in respect of any of the
corporation's shares. A distribution may be in the form of a declaration or
payment of a dividend, a purchase, redemption, or other acquisition of shares, a
distribution of indebtedness, or otherwise.
"Principal office" means the office (within or without the State of
Florida) where the corporation's principal executive offices are located, as
designated in the articles of incorporation or other initial filing until an
annual report has been filed with the Florida Department of State, and
thereafter as designated in the annual report.
ARTICLE 2
Offices
Section 2.1 Principal and Business Offices. The corporation may have
such principal and other business offices, either within or without the State of
Florida, as the Board of Directors may designate or as the business of the
corporation may require from time to time.
Section 2.2 Registered Office. The registered office of the corporation
required by the Act to be maintained in the State of Florida may but need not be
identical with the principal office if located in the State of Florida, and the
address of the registered office may be changed from time to time by the Board
of Directors or by the registered agent. The business office of the registered
agent of the corporation shall be identical to such registered office.
<PAGE>
ARTICLE 3
Shareholders
Section 3.1 Annual Meeting. (a) Time and Place. The annual meeting of
shareholders shall be held within four months after the close of each fiscal
year of the corporation on a date and at a time and place designated by the
Board of Directors, for the purpose of electing directors and for the
transaction of such other business as may come before the meeting. If the
election of directors shall not be held on the day fixed as herein provided for
any annual meeting of shareholders, or at any adjournment thereof, the Board of
Directors shall cause the election to be held at a special meeting of
shareholders as soon thereafter as is practicable. The failure to hold the
annual meeting of the shareholders within the time stated in these bylaws shall
not affect the terms of office of the officers or directors of the corporation
or the validity of any corporate action.
(b) Business At Annual Meeting. At an annual meeting of the
shareholders of the corporation, only such business shall be conducted as shall
have been properly brought before the meeting. To be properly brought before an
annual meeting, business must be (1) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors, (2)
otherwise properly brought before the meeting by or at the direction of the
Board of Directors, or (3) otherwise properly brought before the meeting by a
shareholder. For business to be properly brought before an annual meeting by a
shareholder, the shareholder must have given timely notice thereof in writing to
the Secretary of the corporation. To be timely, a shareholder's notice shall be
received at the principal business office of the corporation no later than the
date designated for receipt of shareholders' proposals in a prior public
disclosure made by the corporation. If there has been no such prior public
disclosure, then to be timely, a shareholder's notice must be delivered to or
mailed and received at the principal business office of the corporation not less
than sixty (60) days nor more than ninety (90) days prior to the annual meeting
of shareholders; provided, however, that in the event that less than seventy
(70) days' notice of the date of the meeting is given to shareholders by notice
or prior public disclosure, notice by the shareholder, to be timely, must be
received by the corporation not later than the close of business on the tenth
day following the day on which the corporation gave notice or made a public
disclosure of the date of the annual meeting of the shareholders. A
shareholder's notice to the Secretary shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (a) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (b) the name and address, as
they appear on the corporation's stock books, of the shareholder proposing such
business,
<PAGE>
(c) the class and number of shares of the corporation which are beneficially
owned by the shareholder, (d) any material interest of the shareholder in such
business, and (e) the same information required by clauses (b), (c) and (d)
above with respect to any other shareholder that, to the knowledge of the
shareholder proposing such business, supports such proposal. Notwithstanding
anything in these bylaws to the contrary, no business shall be conducted at an
annual meeting except in accordance with the procedures set forth in this
Section 3. l(b), and if the Chairman shall so determine, the Chairman shall so
declare at the meeting and any such business not properly brought before the
meeting shall not be transacted.
Section 3.2 Special Meetings. (a) Call by Directors or President.
Special meetings of shareholders, for any purpose or purposes, may be called by
the Board of Directors, the Chairman of the Board (if any) or the President.
(b) Call by Shareholders. The corporation shall call a special meeting
of shareholders in the event that the holders of at least thirty-five percent of
the total number of votes of the then outstanding shares of capital stock of the
corporation entitled to vote generally in the election of directors, voting
together as a single class, sign, date, and deliver to the Secretary one or more
written demands for the meeting describing one or more purposes for which it is
to be held. The corporation shall give notice of such a special meeting within
sixty days after the date that the demand is delivered to the corporation.
Section 3.3 Place of Meeting. The Board of Directors may designate any
place, either within or without the State of Florida, as the place of meeting
for any annual or special meeting of shareholders. If no designation is made,
the place of meeting shall be the principal office of the corporation.
Section 3.4 Notice of Meeting. (a) Content and Delivery. Written notice
stating the date, time, and place of any meeting of shareholders and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called, shall be delivered not less than ten days nor more than sixty days
before the date of the meeting by or at the direction of the President or the
Secretary, or the officer or persons duly calling the meeting, to each
shareholder of record entitled to vote at such meeting and to such other persons
as required by the Act. Unless the Act requires otherwise, notice of an annual
meeting need not include a description of the purpose or purposes for which the
meeting is called. If mailed, notice of a meeting of shareholders shall be
deemed to be delivered when deposited in the United States mail, addressed to
the shareholder at his or her address as it appears on the stock record books of
the corporation, with postage
<PAGE>
thereon prepaid.
(b) Notice of Adjourned Meetings. If an annual or special meeting of
shareholders is adjourned to a different date, time, or place, the corporation
shall not be required to give notice of the new date, time, or place if the new
date, time, or place is announced at the meeting before adjournment; provided,
however, that if a new record date for an adjourned meeting is or must be fixed,
the corporation shall give notice of the adjourned meeting to persons who are
shareholders as of the new record date who are entitled to notice of the
meeting.
(c) No Notice Under Certain Circumstances. Notwithstanding the other
provisions of this Section, no notice of a meeting of shareholders need be given
to a shareholder if: (1) an annual report and proxy statement for two
consecutive annual meetings of shareholders, or (2) all, and at least two checks
in payment of dividends or interest on securities during a twelve-month period,
have been sent by first-class, United States mail, addressed to the shareholder
at his or her address as it appears on the share transfer books of the
corporation, and returned undeliverable. The obligation of the corporation to
give notice of a shareholders' meeting to any such shareholder shall be
reinstated once the corporation has received a new address for such shareholder
for entry on its share transfer books.
Section 3.5 Waiver of Notice. (a) Written Waiver. A shareholder may
waive any notice required by the Act or these bylaws before or after the date
and time stated for the meeting in the notice. The waiver shall be in writing
and signed by the shareholder entitled to the notice, and be delivered to the
corporation for inclusion in the minutes or filing with the corporate records.
Neither the business to be transacted at nor the purpose of any regular or
special meeting of shareholders need be specified in any written waiver of
notice.
(b) Waiver by Attendance. A shareholder's attendance at a meeting, in
person or by proxy, waives objection to all of the following: (1) lack of notice
or defective notice of the meeting, unless the shareholder at the beginning of
the meeting objects to holding the meeting or transacting business at the
meeting; and (2) consideration of a particular matter at the meeting that is not
within the purpose or purposes described in the meeting notice, unless the
shareholder objects to considering the matter when it is presented.
Section 3.6 Fixing of Record Date. (a) General. The Board of Directors
may fix in advance a date as the record date for the purpose of determining
shareholders entitled to notice of a shareholders' meeting, entitled to vote, or
take any other action. In
<PAGE>
no event may a record date fixed by the Board of Directors be a date preceding
the date upon which the resolution fixing the record date is adopted or a date
more than seventy days before the date of meeting or action requiring a
determination of shareholders.
(b) Special Meeting. The record date for determining shareholders
entitled to demand a special meeting shall be the close of business on the date
the first shareholder delivers his or her demand to the corporation.
(c) Shareholder Action by Written Consent. If no prior action is
required by the Board of Directors pursuant to the Act, the record date for
determining shareholders entitled to take action without a meeting shall be the
close of business on the date the first signed written consent with respect to
the action in question is delivered to the corporation, but if prior action is
required by the Board of Directors pursuant to the Act, such record date shall
be the close of business on the date on which the Board of Directors adopts the
resolution taking such prior action unless the Board of Directors otherwise
fixes a record date.
(d) Absence of Board Determination for Shareholders' Meeting. If the
Board of Directors does not determine the record date for determining
shareholders entitled to notice of and to vote at an annual or special
shareholders' meeting, such record date shall be the close of business on the
day before the first notice with respect thereto is delivered to shareholders.
(e) Adjourned Meeting. A record date for determining shareholders
entitled to notice of or to vote at a shareholders' meeting is effective for any
adjournment of the meeting unless the Board of Directors fixes a new record
date, which it must do if the meeting is adjourned to a date more than 120 days
after the date fixed for the original meeting.
(f) Certain Distributions. If the Board of Directors does not determine
the record date for determining shareholders entitled to a distribution (other
than one involving a purchase, redemption, or other acquisition of the
corporation's shares or a share dividend), such record date shall be the close
of business on the date on which the Board of Directors authorizes the
distribution.
Section 3.7 Shareholders' List for Meetings. (a) Preparation and
Availability. After a record date for a meeting of shareholders has been fixed,
the corporation shall prepare an alphabetical list of the names of all of the
shareholders entitled to notice of the meeting. The list shall be arranged by
class or series of shares, if any, and show the address of and number of shares
held by each shareholder. Such list shall be available for inspection by any
shareholder for a period of ten days prior to the meeting or such shorter
<PAGE>
time as exists between the record date and the meeting date, and continuing
through the meeting, at the corporation's principal office, at a place
identified in the meeting notice in the city where the meeting will be held, or
at the office of the corporation's transfer agent or registrar, if any. A
shareholder or his or her agent may, on written demand, inspect the list,
subject to the requirements of the Act, during regular business hours and at his
or her expense, during the period that it is available for inspection pursuant
to this Section. A shareholder's written demand to inspect the list shall
describe with reasonable particularity the purpose for inspection of the list,
and the corporation may deny the demand to inspect the list if the Secretary
determines that the demand was not made in good faith and for a proper purpose
or if the list is not directly connected with the purpose stated in the
shareholder's demand, all subject to the requirements of Section 607.1602(3) of
the Act. Notwithstanding anything herein to the contrary, the corporation shall
make the shareholders' list available at any annual meeting or special meeting
of shareholders and any shareholder or his or her agent or attorney may inspect
the list at any time during the meeting or any adjournment thereof.
(b) Prima Facie Evidence. The shareholders' list is prima facie
evidence of the identity of shareholders entitled to examine the shareholders'
list or to vote at a meeting of shareholders.
(c) Failure to Comply. If the requirements of this Section have not
been substantially complied with, or if the corporation refuses to allow a
shareholder or his or her agent or attorney to inspect the shareholders' list
before or at the meeting, on the demand of any shareholder, in person or by
proxy, who failed to get such access, the meeting shall be adjourned until such
requirements are complied with.
(d) Validity of Action Not Affected. Refusal or failure to prepare or
make available the shareholders' list shall not affect the validity of any
action taken at a meeting of shareholders.
Section 3.8 Quorum. (a) What Constitutes a Quorum. Shares entitled to
vote as a separate voting group may take action on a matter at a meeting only if
a quorum of those shares exists with respect to that matter. If the corporation
has only one class of stock outstanding, such class shall constitute a separate
voting group for purposes of this Section. Except as otherwise provided in the
Act, a majority of the votes entitled to be cast on the matter shall constitute
a quorum of the voting group for action on that matter.
(b) Presence of Shares. Once a share is represented for any purpose at
a meeting, other than for the purpose of objecting to holding the meeting or
transacting
<PAGE>
business at the meeting, it is considered present for purposes of determining
whether a quorum exists for the remainder of the meeting and for any adjournment
of that meeting unless a new record date is or must be set for the adjourned
meeting.
(c) Adjournment in Absence of Quorum. Where a quorum is not present,
the holders of a majority of the shares represented and who would be entitled to
vote at the meeting if a quorum were present may adjourn such meeting from time
to time.
Section 3.9 Voting of Shares. Except as set forth in the Articles of
Incorporation or the Act, each outstanding share, regardless of class, is
entitled to one vote on each matter voted on at a meeting of shareholders.
Section 3.10 Vote Required. (a) Matters Other Than Election of
Directors. If a quorum exists, except in the case of the election of directors,
action on a matter shall be approved if the votes cast within the voting group
favoring the action exceed the votes cast opposing the action, unless the Act
requires a greater number of affirmative votes.
(b) Election of Directors. Each director shall be elected by a
plurality of the votes cast by the shares entitled to vote in the election of
directors at a meeting at which a quorum is present. Each shareholder who is
entitled to vote at an election of directors has the right to vote the number of
shares owned by him or her for as many persons as there are directors to be
elected. Shareholders do not have a right to cumulate their votes for directors.
Section 3.11 Conduct of Meeting. The Chairman of the Board of
Directors, and if there be none, or in his or her absence, the President, and in
his or her absence, a Vice President in the order provided under the Section of
these bylaws titled "Vice Presidents," and in their absence, any person chosen
by the shareholders present shall call a shareholders' meeting to order and
shall act as presiding officer of the meeting, and the Secretary of the
corporation shall act as secretary of all meetings of the shareholders, but, in
the absence of the Secretary, the presiding officer may appoint any other person
to act as secretary of the meeting. The presiding officer of the meeting shall
have broad discretion in determining the order of business at a shareholders'
meeting. The presiding officer's authority to conduct the meeting shall include,
but in no way be limited to, recognizing shareholders entitled to speak, calling
for the necessary reports, stating questions and putting them to a vote, calling
for nominations, and announcing the results of voting. The presiding officer
also shall take such actions as are necessary and appropriate to preserve order
at the meeting. The rules of parliamentary procedure need not be observed in the
conduct of shareholders' meeting.
<PAGE>
Section 3.12 Inspectors of Election. Inspectors of election may be
appointed by the Board of Directors to act at any meeting of shareholders at
which any vote is taken. If inspectors of election are not so appointed, the
presiding officer of the meeting may, and on the request of any shareholder
shall, make such appointment. Each inspector, before entering upon the discharge
of his or her duties, shall take and sign an oath faithfully to execute the
duties of inspector at such meeting with strict impartiality and according to
the best of his or her ability. The inspectors of election shall determine the
number of shares outstanding, the voting rights with respect to each, the shares
represented at the meeting, the existence of a quorum, and the authenticity,
validity, and effect of proxies; receive votes, ballots, consents, and waivers;
hear and determine all challenges and questions arising in connection with the
vote; count and tabulate all votes, consents, and waivers; determine and
announce the result; and do such acts as are proper to conduct the election or
vote with fairness to all shareholders. No inspector, whether appointed by the
Board of Directors or by the person acting as presiding officer of the meeting,
need be a shareholder. The inspectors may appoint and retain other persons or
entities to assist the inspectors in the performance of the duties of the
inspectors. On request of the person presiding at the meeting, the inspectors
shall make a report in writing of any challenge, question or matter determined
by them and execute a certificate of any fact found by them.
Section 3.13 Proxies. (a) Appointment. At all meetings of shareholders,
a shareholder may vote his or her shares in person or by proxy. A shareholder
may appoint a proxy to vote or otherwise act for the shareholder by signing an
appointment form, either personally or by his or her attorney-in-fact. If an
appointment form expressly provides, any proxy holder may appoint, in writing, a
substitute to act in his or her place. A telegraph, telex, or a cablegram, a
facsimile transmission of a signed appointment form, or a photographic,
photostatic, or equivalent reproduction of a signed appointment form is a
sufficient appointment form.
(b) When Effective. An appointment of a proxy is effective when
received by the Secretary or other officer or agent of the corporation
authorized to tabulate votes. An appointment is valid for up to eleven months
unless a longer period is expressly provided in the appointment form. An
appointment of a proxy is revocable by the shareholder unless the appointment
form conspicuously states that it is irrevocable and the appointment is coupled
with an interest.
Section 3.14 Action by Shareholders Without Meeting. (a) Any action
required or permitted by the Act to be taken at any annual or special meeting of
shareholders may be taken without a meeting, without prior notice, and without a
vote if, one or more written consents describing the action taken shall be
signed and dated by the holders of
<PAGE>
ninety percent (90%) of the outstanding capital stock of the corporation
entitled to vote generally in the election of directors. Such consents must be
delivered to the principal office of the corporation in Florida, the
corporation's principal place of business, the Secretary, or another officer or
agent of the corporation having custody of the books in which proceedings of
meetings of shareholders are recorded. No written consent shall be effective to
take the corporate action referred to therein unless, within sixty days of the
date of the earliest dated consent delivered in the manner required herein,
written consents signed by the number of holders required to take action are
delivered to the corporation by delivery as set forth in this Section.
(b) Revocation of Written Consents. Any written consent may be revoked
prior to the date that the corporation receives the required number of consents
to authorize the proposed action. No revocation is effective unless in writing
and until received by the corporation at its principal office in Florida or its
principal place of business, or received by the Secretary or other officer or
agent having custody of the books in which proceedings of meetings of
shareholders are recorded.
(c) Notice to Nonconsenting Shareholders. Within ten days after
obtaining such authorization by written consent, notice must be given in writing
to those shareholders who have not consented in writing or who are not entitled
to vote on the action. The notice shall fairly summarize the material features
of the authorized action and, if the action be such for which dissenters' rights
are provided under the Act, the notice shall contain a clear statement of the
right of shareholders dissenting therefrom to be paid the fair value of their
shares upon compliance with the provisions of the Act regarding the rights of
dissenting shareholders.
Section 3.15 Acceptance of Instruments Showing Shareholder Action. If
the name signed on a vote, consent, waiver, or proxy appointment corresponds to
the name of a shareholder, the corporation, if acting in good faith, may accept
the vote, consent, waiver, or proxy appointment and give it effect as the act of
a shareholder. If the name signed on a vote, consent, waiver, or proxy
appointment does not correspond to the name of a shareholder, the corporation,
if acting in good faith, may accept the vote, consent, waiver, or proxy
appointment and give it effect as the act of the shareholder if any of the
following apply:
(a) The shareholder is an entity and the name signed purports to be
that of an officer or agent of the entity;
(b) The name signed purports to be that of an administrator, executor,
guardian,
<PAGE>
personal representative, or conservator representing the shareholder and, if the
corporation requests, evidence of fiduciary status acceptable to the corporation
is presented with respect to the vote, consent, waiver, or proxy appointment;
(c) The name signed purports to be that of a receiver or trustee in
bankruptcy, or assignee for the benefit of creditors of the shareholder and, if
the corporation requests, evidence of this status acceptable to the corporation
is presented with respect to the vote, consent, waiver, or proxy appointment;
(d) The name signed purports to be that of a pledgee, beneficial owner,
or attorney-in-fact of the shareholder and, if the corporation requests,
evidence acceptable to the corporation of the signatory's authority to sign for
the shareholder is presented with respect to the vote, consent, waiver, or proxy
appointment; or
(e) Two or more persons are the shareholder as co-tenants or
fiduciaries and the name signed purports to be the name of at least one of the
co-owners and the person signing appears to be acting on behalf of all
co-owners.
The corporation may reject a vote, consent, waiver, or proxy appointment if the
Secretary or other officer or agent of the corporation who is authorized to
tabulate votes, acting in good faith, has reasonable basis for doubt about the
validity of the signature on it or about the signatory's authority to sign for
the shareholder.
ARTICLE 4
Board of Directors
Section 4.1 General Powers and Number. All corporate powers shall be
exercised by or under the authority of, and the business and affairs of the
corporation managed under the direction of, the Board of Directors. The
corporation shall have [__] directors initially. The number of directors may be
increased or decreased from time to time by resolution of the Board of
Directors, but shall never be less than one.
Section 4.2 Qualifications. Directors must be natural persons who are
eighteen years of age or older but need not be residents of this state or
shareholders of the corporation.
Section 4.3 Term of Office and Election. Each Director (whenever
elected) shall hold office until his successor has been duly elected and
qualified, or until his earlier death, resignation or removal. At each annual
meeting of the shareholders of the
<PAGE>
corporation, the date of which shall be fixed by or pursuant to the bylaws of
the corporation, the directors shall be elected to hold office for a term
expiring at the next annual meeting of shareholders. Except as otherwise
provided pursuant to the provisions of the Articles of Incorporation or Articles
of Amendment relating to the rights of the holders of any class or series of
Preferred Stock, voting separately by class or series, to elect directors under
specified circumstances, nominations of persons for election to the Board of
Directors may be made by the Chairman of the Board on behalf of the Board of
Directors or by any shareholder of the corporation entitled to vote for the
election of directors at the annual meeting of the shareholders who complies
with the notice provisions set forth in this Section 4.3. To be timely, a
shareholder's notice shall be received at the principal business office of the
corporation no later than the date designated for receipt of shareholders'
proposals in a prior public disclosure made by the corporation. If there has
been no such prior public disclosure, then to be timely, a shareholder's
nomination must be delivered to or mailed and received at the principal business
office of the corporation not less than sixty (60) days nor more than ninety
(90) days prior to the annual meeting of shareholders; provided, however, that
in the event that less than seventy (70) days' notice of the date of the meeting
is given to the shareholders or prior public disclosure of the date of the
meeting is made, notice by the shareholder to be timely must be so received not
later than the close of business on the tenth day following the day on which
such notice of the date of the annual meeting was mailed or such public
disclosure was made. A shareholder's notice to the Secretary shall set forth (a)
as to each person the shareholder proposes to nominate for election or
re-election as a director (i) the name, age, business address and residence
address of such proposed nominee, (ii) the principal occupation or employment of
such person, (iii) the class and number of shares of capital stock of the
corporation which are beneficially owned by such person, and (iv) any other
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended (including without limitation such person's written consent to being
named in the proxy statement as a nominee and to serving as a director if
elected); and (b) as to the shareholder giving notice (i) the name and address,
as they appear on the corporation's books, of the shareholder proposing such
nomination, and (ii) the class and number of shares of stock of the corporation
which are beneficially owned by the shareholder. No person shall be eligible for
election as a director of the corporation unless nominated in accordance with
the procedures set forth in this Section 4.3. The Chairman of the meeting shall,
if the facts warrant, determine and declare to the annual meeting that a
nomination was not made in accordance with the provisions of this Section 4.3,
and if the Chairman shall so determine, the Chairman shall so declare at the
meeting and the defective nomination shall be disregarded.
<PAGE>
Section 4.4 Resignation. A director may resign at any time by
delivering written notice to the Board of Directors or its Chairman (if any) or
to the corporation. A director's resignation is effective when the notice is
delivered unless the notice specifies a later effective date.
Section 4.5 Vacancies. (a) Who May Fill Vacancies. Whenever any vacancy
occurs on the Board of Directors, including a vacancy resulting from an increase
in the number of directors, it shall be filled only by the affirmative vote of a
majority of the remaining directors even though less than a quorum of the Board
of Directors. Any director elected in accordance with the preceding sentence
shall hold office until his or her successor is duly elected and qualified at
the next meeting of shareholders of which directors are elected, and such
successor shall complete such director's remaining term.
(b) Prospective Vacancies. A vacancy that will occur at a specific
later date, because of a resignation effective at a later date or otherwise, may
be filled before the vacancy occurs, but the new director may not take office
until the vacancy occurs.
Section 4.6 Compensation. The Board of Directors, irrespective of any
personal interest of any of its members, may establish reasonable compensation
of all directors for services to the corporation as directors, officers, or
otherwise, or may delegate such authority to an appropriate committee. The Board
of Directors also shall have authority to provide for or delegate authority to
an appropriate committee to provide for reasonable pensions, disability or death
benefits, and other benefits or payments, to directors, officers, and employees
and to their families, dependents, estates, or beneficiaries on account of prior
services rendered to the corporation by such directors, officers, and employees.
Section 4.7 Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this bylaw immediately after
the annual meeting of shareholders and each adjourned session thereof. The place
of such regular meeting shall be the same as the place of the meeting of
shareholders which precedes it, or such other suitable place as may be announced
at such meeting of shareholders. The Board of Directors may provide, by
resolution, the date, time, and place, either within or without the State of
Florida, for the holding of additional regular meetings of the Board of
Directors without other notice than such resolution.
Section 4.8 Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board (if any), the President or
not less than one-third of the members of the Board of Directors. The person or
persons calling the meeting may
<PAGE>
fix any place, either within or without the State of Florida, as the place for
holding any special meeting of the Board of Directors, and if no other place is
fixed, the place of the meeting shall be the principal office of the corporation
in the State of Florida.
Section 4.9 Notice. Special meetings of the Board of Directors must be
preceded by at least two days' notice of the date, time, and place of the
meeting. The notice need not describe the purpose of the special meeting.
Section 4.10 Waiver of Notice. Notice of a meeting of the Board of
Directors need not be given to any director who signs a waiver of notice either
before or after the meeting. Attendance of a director at a meeting shall
constitute a waiver of notice of such meeting and waiver of any and all
objections to the place of the meeting, the time of the meeting, or the manner
in which it has been called or convened, except when a director states, at the
beginning of the meeting or promptly upon arrival at the meeting, any objection
to the transaction of business because the meeting is not lawfully called or
convened.
Section 4.11 Quorum and Voting. A quorum of the Board of Directors
consists of a majority of the number of directors prescribed by these bylaws (or
if no number is prescribed, the number of directors in office immediately before
the meeting begins). If a quorum is present when a vote is taken, the
affirmative vote of a majority of directors present is the act of the Board of
Directors. A director who is present at a meeting of the Board of Directors or a
committee of the Board of Directors when corporate action is taken is deemed to
have assented to the action taken unless: (a) he or she objects at the beginning
of the meeting (or promptly upon his or her arrival) to holding it or
transacting specified business at the meeting; or (b) he or she votes against or
abstains from the action taken.
Section 4.12 Conduct of Meetings. (a) Presiding Officer. The Board of
Directors may elect from among its members a Chairman of the Board of Directors,
who shall preside at meetings of the Board of Directors. The Chairman, and if
there be none, or in his or her absence, the President, and in his or her
absence, a Vice President in the order provided under the Section of these
bylaws titled "Vice Presidents," and in their absence, any director chosen by
the directors present, shall call meetings of the Board of Directors to order
and shall act as presiding officer of the meeting.
(b) Minutes. The Secretary of the corporation shall act as secretary of
all meetings of the Board of Directors but in the absence of the Secretary, the
presiding officer may appoint any other person present to act as secretary of
the meeting. Minutes of any regular or special meeting of the Board of Directors
shall be prepared and distributed to each director.
<PAGE>
(c) Adjournments. A majority of the directors present, whether or not a
quorum exists, may adjourn any meeting of the Board of Directors to another time
and place. Notice of any such adjourned meeting shall be given to the directors
who are not present at the time of the adjournment and, unless the time and
place of the adjourned meeting are announced at the time of the adjournment, to
the other directors.
(d) Participation by Conference Call or Similar Means. The Board of
Directors may permit any or all directors to participate in a regular or a
special meeting by, or conduct the meeting through the use of, any means of
communication by which all directors participating may simultaneously hear each
other during the meeting. A director participating in a meeting by this means is
deemed to be present in person at the meeting.
Section 4.13 Committees. The Board of Directors, by resolution adopted
by a majority of the full Board of Directors, may designate from among its
members an Executive Committee and one or more other committees each of which
may include, by way of example and not as a limitation, a Compensation Committee
(for the purpose of establishing and implementing an executive compensation
policy) and an Audit Committee (for the purpose of examining and considering
matters relating to the financial affairs of the corporation). Each committee
shall have two or more members, who serve at the pleasure of the Board of
Directors. To the extent provided in the resolution of the Board of Directors
establishing and constituting such committees, such committees shall have and
may exercise all the authority of the Board of Directors, except that no such
committee shall have the authority to:
(a) approve or recommend to shareholders actions or proposals required
by the Act to be approved by shareholders;
(b) fill vacancies on the Board of Directors or any committee thereof;
(c) adopt, amend, or repeal these bylaws;
(d) authorize or approve the reacquisition of shares unless pursuant to
a general formula or method specified by the Board of Directors; or
(e) authorize or approve the issuance or sale or contract for the sale
of shares, or determine the designation and relative rights, preferences, and
limitations of a voting group except that the Board of Directors may authorize a
committee (or a senior executive officer of the corporation) to do so within
limits specifically prescribed by
<PAGE>
the Board of Directors.
The Board of Directors, by resolution adopted in accordance with this Section,
may designate one or more directors as alternate members of any such committee,
who may act in the place and stead of any absent member or members at any
meeting of such committee. The provisions of these bylaws which govern meetings,
notice and waiver of notice, and quorum and voting requirements of the Board of
Directors apply to committees and their members as well.
Section 4.14 Action Without Meeting. Any action required or permitted
by the Act to be taken at a meeting of the Board of Directors or a committee
thereof may be taken without a meeting if the action is taken by all members of
the Board or of the committee. The action shall be evidenced by one or more
written consents describing the action taken, signed by each director or
committee member and retained by the corporation. Such action shall be effective
when the last director or committee member signs the consent, unless the consent
specifies a different effective date. A consent signed under this Section has
the effect of a vote at a meeting and may be described as such in any document.
ARTICLE 5
Officers
Section 5.1 Number. The principal officers of the corporation shall be
a Chairman, a President, the number of Vice Presidents, if any, as authorized
from time to time by the Board of Directors, a Secretary, and a Treasurer, each
of whom shall be elected by the Board of Directors. Such other officers and
assistant officers as may be deemed necessary may be elected or appointed by the
Board of Directors. The Board of Directors may also authorize any duly appointed
officer to appoint one or more officers or assistant officers. The same
individual may simultaneously hold more than one office.
Section 5.2 Election and Term of Office. The officers of the
corporation to be elected by the Board of Directors shall be elected annually by
the Board of Directors at the first meeting of the Board of Directors held after
each annual meeting of the shareholders. If the election of officers shall not
be held at such meeting, such election shall be held as soon thereafter as is
practicable. Each officer shall hold office until his or her successor shall
have been duly elected or until his or her prior death, resignation, or removal.
<PAGE>
Section 5.3 Removal. The Board of Directors may remove any officer and,
unless restricted by the Board of Directors, an officer may remove any officer
or assistant officer appointed by that officer, at any time, with or without
cause and notwithstanding the contract rights, if any, of the officer removed.
The appointment of an officer does not of itself create contract rights.
Section 5.4 Resignation. An officer may resign at any time by
delivering notice to the corporation. The resignation shall be effective when
the notice is delivered, unless the notice specifies a later effective date and
the corporation accepts the later effective date. If a resignation is made
effective at a later date and the corporation accepts the future effective date,
the pending vacancy may be filled before the effective date but the successor
may not take office until the effective date.
Section 5.5 Vacancies. A vacancy in any principal office because of
death, resignation, removal, disqualification, or otherwise, shall be filled as
soon thereafter as practicable by the Board of Directors for the unexpired
portion of the term.
Section 5.6 Chairman of the Board. The Chairman of the Board (the
"Chairman") shall be a member of the Board of Directors of the corporation and
shall preside over all meetings of the Board of Directors and shareholders of
the corporation. The Chairman shall have authority, subject to such rules as may
be prescribed by the Board of Directors, to appoint such agents and employees of
the corporation as he or she shall deem necessary, to prescribe their powers,
duties and compensation, and to delegate authority to them. Such agents and
employees shall hold office at the direction of the Chairman. The Chairman shall
have authority to sign certificates for shares of the corporation the issuance
of which shall have been authorized by resolution of the Board of Directors, and
to execute and acknowledge, on behalf of the corporation, all deeds, mortgages,
bonds, contracts, leases, reports, and all other documents or instruments
necessary or proper to be executed in the course of the corporation's regular
business, or which shall be authorized by resolution of the Board of Directors;
and, except as otherwise provided by law or the Board of Directors, the Chairman
may authorize the President or any Vice President or other officer or agent of
the corporation to execute and acknowledge such documents or instruments in his
or her place and stead. In general, he or she shall perform all duties as may be
prescribed by the Board of Directors from time to time.
Section 5.7 President. The President shall be the chief executive
officer of the corporation and, subject to the direction of the Board of
Directors, shall in general supervise and control all of the business and
affairs of the corporation. If the Chairman of the Board is not present, the
President shall preside at all meetings of the shareholders
<PAGE>
and the Board of Directors. The President shall have authority, subject to such
rules as may be prescribed by the Board of Directors, to appoint such agents and
employees of the corporation as he or she shall deem necessary, to prescribe
their powers, duties and compensation, and to delegate authority to them. Such
agents and employees shall hold office at the discretion of the President. The
President shall have authority to sign certificates for shares of the
corporation the issuance of which shall have been authorized by resolution of
the Board of Directors, and to execute and acknowledge, on behalf of the
corporation, all deeds, mortgages, bonds, contracts, leases, reports, and all
other documents or instruments necessary or proper to be executed in the course
of the corporation's regular business, or which shall be authorized by
resolution of the Board of Directors; and, except as otherwise provided by law
or the Board of Directors, the President may authorize any Vice President or
other officer or agent of the corporation to execute and acknowledge such
documents or instruments in his or her place and stead. In general he or she
shall perform all duties incident to the office of President and such other
duties as may be prescribed by the Board of Directors from time to time.
Section 5.8 Vice Presidents. In the absence of the President or in the
event of the President's death, inability or refusal to act, or in the event for
any reason it shall be impracticable for the President to act personally, the
Vice President, if any (or in the event there be more than one Vice President,
the Vice Presidents in the order designated by the Board of Directors, or in the
absence of any designation, then in the order of their election), shall perform
the duties of the President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President. Any Vice President
may sign certificates for shares of the corporation the issuance of which shall
have been authorized by resolution of the Board of Directors; and shall perform
such other duties and have such authority as from time to time may be delegated
or assigned to him or her by the President or by the Board of Directors. The
execution of any instrument of' the corporation by any Vice President shall be
conclusive evidence, as to third parties, of his or her authority to act in the
stead of the President. The corporation may have one or more Executive Vice
Presidents and one or more Senior Vice Presidents, who shall be Vice Presidents
for purposes hereof.
Section 5.9 Secretary. The Secretary shall: (a) keep, or cause to be
kept, minutes of the meetings of the shareholders and of the Board of Directors
(and of committees thereof) in one or more books provided for that purpose
(including records of actions taken by the shareholders or the Board of
Directors (or committees thereof) without a meeting); (b) be custodian of the
corporate records and of the seal of the corporation, if any, and if the
corporation has a seal, see that it is affixed to all documents the execution of
which on behalf of the corporation under its seal is duly authorized;
<PAGE>
(c) authenticate the records of the corporation; (d) maintain a record of the
shareholders of the corporation, in a form that permits preparation of a list of
the names and addresses of all shareholders, by class or series of shares and
showing the number and class or series of shares held by each shareholder; (e)
have general charge of the stock transfer books of the corporation; and (f) in
general perform all duties incident to the office of Secretary and have such
other duties and exercise such authority as from time to time may be delegated
or assigned by the President or by the Board of Directors.
Section 5.10 Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the corporation;
(b) maintain appropriate accounting records; (c) receive and give receipts for
moneys due and payable to the corporation from any source whatsoever, and
deposit all such moneys in the name of the corporation in such banks, trust
companies, or other depositaries as shall be selected in accordance with the
provisions of these bylaws; and (d) in general perform all of the duties
incident to the office of Treasurer and have such other duties and exercise such
other authority as from time to time may be delegated or assigned by the
President or by the Board of Directors. If required by the Board of Directors,
the Treasurer shall give a bond for the faithful discharge of his or her duties
in such sum and with such surety or sureties as the Board of Directors shall
determine.
Section 5.11 Assistant Secretaries and Assistant Treasurers. There
shall be such number of Assistant Secretaries and Assistant Treasurers as the
Board of Directors may from time to time authorize. The Assistant Treasurers
shall respectively, if required by the Board of Directors, give bonds for the
faithful discharge of their duties in such sums and with such sureties as the
Board of Directors shall determine. The Assistant Secretaries and Assistant
Treasurers, in general, shall perform such duties and have such authority as
shall from time to time be delegated or assigned to them by the Secretary or the
Treasurer, respectively, or by the President or the Board of Directors.
Section 5.12 Other Assistants and Acting Officers. The Board of
Directors shall have the power to appoint, or to authorize any duly appointed
officer of the corporation to appoint, any person to act as assistant to any
officer, or as agent for the corporation in his or her stead, or to perform the
duties of such officer whenever for any reason it is impracticable for such
officer to act personally, and such assistant or acting officer or other agent
so appointed by the Board of Directors or an authorized officer shall have the
power to perform all the duties of the office to which he or she is so appointed
to be an assistant, or as to which he or she is so appointed to act, except as
such power may be otherwise defined or restricted by the Board of Directors or
the appointing officer.
Section 5.13 Salaries. The salaries of the principal officers shall be
fixed from
<PAGE>
time to time by the Board of Directors or by a duly authorized committee
thereof, and no officer shall be prevented from receiving such salary by reason
of the fact that he or she is also a director of the corporation.
ARTICLE 6
Contracts, Checks and Deposits; Special Corporate Acts
Section 6.1 Contracts. The Board of Directors may authorize any officer
or officers, or any agent or agents to enter into any contract or execute or
deliver any instrument in the name of and on behalf of the corporation, and such
authorization may be general or confined to specific instances. In the absence
of other designation, all deeds, mortgages, and instruments of assignment or
pledge made by the corporation shall be executed in the name of the corporation
by the President or one of the Vice Presidents; the Secretary or an Assistant
Secretary, when necessary or required, shall attest and affix the corporate
seal, if any, thereto; and when so executed no other party to such instrument or
any third party shall be required to make any inquiry into the authority of the
signing officer or officers.
Section 6.2 Checks, Drafts, etc. All checks, drafts or other orders for
the payment of money, notes, or other evidences of indebtedness issued in the
name of the corporation, shall be signed by such officer or officers, agent or
agents of the corporation and in such manner as shall from time to time be
determined by or under the authority of a resolution of the Board of Directors.
Section 6.3 Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies, or other depositaries as may be selected by or
under the authority of a resolution of the Board of Directors.
Section 6.4 Voting of Securities Owned by Corporation. Subject always
to the specific directions of the Board of Directors, (a) any shares or other
securities issued by any other corporation and owned or controlled by this
corporation may be voted at any meeting of security holders of such other
corporation by the President of this corporation if he or she be present, or in
his or her absence by any Vice President of this corporation who may be present,
and (b) whenever, in the judgment of the President, or in his or her absence, of
any Vice President, it is desirable for this corporation to execute a proxy or
written consent in respect of any such shares or other securities, such proxy or
consent shall be executed in the name of this corporation by the President or
one of the Vice Presidents of this corporation, without necessity of any
authorization by the Board of
<PAGE>
Directors, affixation of corporate seal, if any, or countersignature or
attestation by another officer. Any person or persons designated in the manner
above stated as the proxy or proxies of this corporation shall have full right,
power, and authority to vote the shares or other securities issued by such other
corporation and owned or controlled by this corporation the same as such shares
or other securities might be voted by this corporation.
ARTICLE 7
Certificates for Shares; Transfer of Shares
Section 7.1 Consideration for Shares. The Board of Directors may
authorize shares to be issued for consideration consisting of any tangible or
intangible property or benefit to the corporation, including cash, promissory
notes, services performed, promises to perform services evidenced by a written
contract, or other securities of the corporation. Before the corporation issues
shares, the Board of Directors shall determine that the consideration received
or to be received for the shares to be issued is adequate. The determination of
the Board of Directors is conclusive insofar as the adequacy of consideration
for the issuance of shares relates to whether the shares are validly issued,
fully paid, and nonassessable. The corporation may place in escrow shares issued
for future services or benefits or a promissory note, or make other arrangements
to restrict the transfer of the shares, and may credit distributions in respect
of the shares against their purchase price, until the services are performed,
the note is paid, or the benefits are received. If the services are not
performed, the note is not paid, or the benefits are not received, the
corporation may cancel, in whole or in part, the shares escrowed or restricted
and the distributions credited.
Section 7.2 Certificates for Shares. Every holder of shares in the
corporation shall be entitled to have a certificate representing all shares to
which he or she is entitled unless the Board of Directors authorizes the
issuance of some or all shares without certificates. Any such authorization
shall not affect shares already represented by certificates until the
certificates are surrendered to the corporation. If the Board of Directors
authorizes the issuance of any shares without certificates, within a reasonable
time after the issue or transfer of any such shares, the corporation shall send
the shareholder a written statement of the information required by the Act or
the Articles of Incorporation to be set forth on certificates, including any
restrictions on transfer. Certificates representing shares of the corporation
shall be in such form, consistent with the Act, as shall be determined by the
Board of Directors. Such certificates shall be signed (either manually or in
facsimile) by the President or any Vice President or any other persons
designated by the Board of Directors and may be sealed with the seal of the
<PAGE>
corporation or a facsimile thereof. All certificates for shares shall be
consecutively numbered or otherwise identified. The name and address of the
person to whom the shares represented thereby are issued, with the number of
shares and date of issue, shall be entered on the stock transfer books of the
corporation. Unless the Board of Directors authorizes shares without
certificates, all certificates surrendered to the corporation for transfer shall
be canceled and no new certificate shall be issued until the former certificate
for a like number of shares shall have been surrendered and canceled, except as
provided in these bylaws with respect to lost, destroyed, or stolen
certificates. The validity of a share certificate is not affected if a person
who signed the certificate (either manually or in facsimile) no longer holds
office when the certificate is issued.
Section 7.3 Transfer of Shares. Prior to due presentment of a
certificate for shares for registration of transfer, the corporation may treat
the registered owner of such shares as the person exclusively entitled to vote,
to receive notifications, and otherwise to have and exercise all the rights and
power of an owner. Where a certificate for shares is presented to the
corporation with a request to register a transfer, the corporation shall not be
liable to the owner or any other person suffering loss as a result of such
registration of transfer if (a) there were on or with the certificate the
necessary endorsements, and (b) the corporation had no duty to inquire into
adverse claims or has discharged any such duty. The corporation may require
reasonable assurance that such endorsements are genuine and effective and
compliance with such other regulations as may be prescribed by or under the
authority of the Board of Directors.
Section 7.4 Restrictions on Transfer. The face or reverse side of each
certificate representing shares shall bear a conspicuous notation as required by
the Act or the Articles of Incorporation of the restriction imposed by the
corporation upon the transfer of such shares.
Section 7.5 Lost, Destroyed, or Stolen Certificates. Unless the Board
of Directors authorizes shares without certificates, where the owner claims that
certificates for shares have been lost, destroyed, or wrongfully taken, a new
certificate shall be issued in place thereof if the owner (a) so requests before
the corporation has notice that such shares have been acquired by a bona fide
purchaser, (b) files with the corporation a sufficient indemnity bond if
required by the Board of Directors or any principal officer, and (c) satisfies
such other reasonable requirements as may be prescribed by or under the
authority of the Board of Directors.
Section 7.6 Stock Regulations. The Board of Directors shall have the
power and authority to make all such further rules and regulations not
inconsistent with law as they may deem expedient concerning the issue, transfer,
and registration of shares of the
<PAGE>
corporation.
ARTICLE 8
Seal
Section 8.1 Seal. The Board of Directors may provide for a corporate
seal for the corporation.
ARTICLE 9
Books and Records
Section 9.1 Books and Records. (a) The corporation shall keep as
permanent records minutes of all meetings of the shareholders and Board of
Directors, a record of all actions taken by the shareholders or Board of
Directors without a meeting, and a record of all actions taken by a committee of
the Board of Directors in place of the Board of Directors on behalf of the
corporation.
(b) The corporation shall maintain accurate accounting records.
(c) The corporation or its agent shall maintain a record of the
shareholders in a form that permits preparation of a list of the names and
addresses of all shareholders in alphabetical order by class of shares showing
the number and series of shares held by each.
(d) The corporation shall keep a copy of all written communications
within the preceding three years to all shareholders generally or to all
shareholders of a class or series, including the financial statements required
to be furnished by the Act, and a copy of its most recent annual report
delivered to the Department of State.
Section 9.2 Shareholders' Inspection Rights. Shareholders are entitled
to inspect and copy records of the corporation as permitted by the Act.
Section 9.3 Distribution of Financial Information. The corporation
shall prepare and disseminate financial statements to shareholders as required
by the Act.
Section 9.4 Other Reports. The corporation shall disseminate such other
reports to shareholders as are required by the Act, including reports regarding
indemnification in certain circumstances and reports regarding the issuance or
authorization for issuance of
<PAGE>
shares in exchange for promises to render services in the future.
ARTICLE 10
Indemnification
Section 10.1 Provision of Indemnification. The corporation shall, to
the fullest extent permitted or required by the Act, including any amendments
thereto (but in the case of any such amendment, only to the extent such
amendment permits or requires the corporation to provide broader indemnification
rights than prior to such amendment), indemnify its Directors against any and
all Liabilities, and advance any and all reasonable Expenses, incurred thereby
in any Proceeding to which any such Director is a party or in which such
Director is deposed or called to testify as a witness because he or she is or
was a Director of the corporation. The rights to indemnification granted
hereunder shall not be deemed exclusive of any other rights to indemnification
against Liabilities or the advancement of Expenses which a Director may be
entitled under any written agreement, Board of Directors' resolution, vote of
shareholders, the Act, or otherwise. The corporation may, but shall not be
required to, supplement the foregoing rights to indemnification against
Liabilities and advancement of Expenses by the purchase of insurance on behalf
of any one or more of its Directors whether or not the corporation would be
obligated to indemnify or advance Expenses to such Director under this Article.
For purposes of this Article, the term "Directors" includes former directors of
the corporation and any directors who are or were serving at the request of the
corporation as directors, officers, employees, or agents of another corporation,
partnership, joint venture, trust, or other enterprise, including, without
limitation, any employee benefit plan (other than in the capacity as agents
separately retained and compensated for the provision of goods or services to
the enterprise, including, without limitation, attorneys-at-law, accountants,
and financial consultants). All other capitalized terms used in this Article and
not otherwise defined herein shall have the meaning set forth in Section
607.0850, Florida Statutes (1995). The provisions of this Article are intended
solely for the benefit of the indemnified parties described herein, their heirs
and personal representatives and shall not create any rights in favor of third
parties. No amendment to or repeal of this Article shall diminish the rights of
indemnification provided for herein prior to such amendment or repeal.
ARTICLE 11
Amendments
Section 11.1 Power to Amend. These bylaws may be amended or repealed by
<PAGE>
either the Board of Directors or the shareholders, unless the Act reserves the
power to amend these bylaws generally or any particular bylaw provision, as the
case may be, exclusively to the shareholders or unless the shareholders, in
amending or repealing these bylaws generally or any particular bylaw provision,
provide expressly that the Board of Directors may not amend or repeal these
bylaws or such bylaw provision, as the case may be.
<PAGE>
Draft -- February 17, 1999
Exhibit C to Merger Agreement
FORM OF
AMENDMENT NO. 1
This Amendment No. 1, dated as of ____, 1999, is to the Preferred Stock
Purchase and Option Agreement, dated July 14, 1998, among Greenwich Street
Capital Partnes II, L.P., a Delaware limited partnership, GSCP Offshore Fund,
L.P., a Cayman Islands exempted limited partnership, Greenwich Fund, L.P.,
Travelers Casualty and Surety Company and the IMC Mortgage Company, a Florida
corporation (such agreement, the "Preferred Stock Agreement"). Any capitalized
term used herein without definition shall have the meaning assigned thereto in
the Preferred Stock Agreement.
1. Amendment to Article IX. Article IX of the Preferred Stock Agreement
is hereby amended by deleting it in its entirety and is hereby replaced by the
notation "[intentionally omitted]".
2. Full Force and Effect. Except as provided in this Amendment No. 1,
the Preferred Stock Agreement shall continue in full force and effect in
accordance with the provisions thereof.
3. Governing Law. This Amendment No. 1 shall be governed by, and
construed in accordance with, the laws of the State of New York without giving
effect to the conflicts of laws principles thereof.
4. Miscellaneous. The section headings contained in this Amendment No.
1 are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Amendment No. 1. This Amendment No. 1 may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1
as of the date first above written.
IMC MORTGAGE COMPANY
By /s/
------------------------
Name:
Title:
GREENWICH STREET CAPITAL PARTNERS II, L.P.
GSCP OFFSHORE FUND, L.P.
GREENWICH FUND, L.P.
By: GREENWICH STREET INVESTMENTS II,
L.L.C., their General Partner
By: /s/
------------------------
Name:
Title: Managing Member
TRAVELERS CASUALTY AND SURETY COMPANY
By
------------------------
Name:
Title:
<PAGE>
Exhibit D to Merger Agreement
February 19, 1999
IMC 1999 Acquisition Co., Inc.
5901 E. Fowler Avenue
Tampa, Florida 33617
Amended and Restated Loan Agreement
Ladies and Gentlemen:
Reference is made to the Merger Agreement, dated as of February 11,
1999, among Greenwich Street Capital Partners II, L.P., a Delaware limited
partnership ("GSCP"), IMC 1999 Acquisition Co., Inc., a Delaware corporation
("Acquisition") and IMC Mortgage Company, a Florida corporation ("IMC"),
pursuant to which Acquisition will be merged with and into IMC, and GSCP and its
affiliates would be issued common stock of the surviving corporation
representing approximately 93.5% of the outstanding common stock of the
surviving corporation (the "Merger").
GSCP and the undersigned affiliates of GSCP hereby agree, immediately
upon consummation of the Merger, to (i) enter into the Amended and Restated Loan
Agreement in the form attached hereto as Exhibit A (the "Loan Agreement") and
(ii) fund the Additional Advances (as defined in the Loan Agreement) in an
aggregate principal amount, which, together with the Interim Loans (as defined
in the Loan Agreement, dated as of October 12, 1998, as amended by Amendment No.
1 thereto, dated February 11, 1999, among IMC, GSCP and the other lenders party
thereto) would represent $40 million, to the surviving corporation of the
Merger, on the terms and subject to the conditions, set forth in the Loan
Agreement.
This Letter Agreement may not be assigned or otherwise transferred to
any other person without the prior written consent of the undersigned. The terms
of this Letter Agreement may not be modified or otherwise amended, or waived,
except pursuant to a written agreement signed by Acquisition and the
undersigned. This Letter Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York. This Letter
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which shall constitute one instrument.
Very truly yours,
GREENWICH STREET CAPITAL PARTNERS II, L.P.
GSCP OFFSHORE FUND, L.P.
GREENWICH FUND, L.P.
GREENWICH STREET EMPLOYEES FUND, L.P.
TRV EXECUTIVE FUND, L.P.
By: GREENWICH STREET
INVESTMENTS II, L.L.C.,
their General Partner
<PAGE>
By:
----------------------------
Name:
Title: Managing Member
Agreed to as of the date
first above written.
IMC 1999 ACQUISITION CO., INC.
By:
-----------------------
Name:
Title:
<PAGE>
EXHIBIT A
- --------------------------------------------------------------------------------
IMC MORTGAGE COMPANY
as Borrower,
and
GREENWICH STREET CAPITAL PARTNERS II, L.P.,
GREENWICH FUND, L.P.,
GSCP OFFSHORE FUND, L.P.
GREENWICH STREET EMPLOYEES FUND, L.P.
TRV EXECUTIVE FUND, L.P.
as Lenders
AMENDED AND RESTATED
LOAN AGREEMENT
$[73,000,000+Capitalized Interest]
---------------
Dated as of ________ __, 1999
---------------
- --------------------------------------------------------------------------------
Draft -- February 17, 1999
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions...................................................2
SECTION 1.2 Accounting Terms and Determinations...........................9
ARTICLE II
THE LOAN
SECTION 2.1 Loans........................................................10
SECTION 2.2 The Notes; Repayment of Principal............................10
SECTION 2.3 Loan Record..................................................10
SECTION 2.4 Interest Rate................................................10
SECTION 2.5 Mandatory Prepayment of the Loans............................11
SECTION 2.6 Change of Control Prepayment of the Loan.....................11
SECTION 2.7 Manner and Time of Payments..................................11
SECTION 2.8 Use of Proceeds..............................................12
SECTION 2.9 Borrowings...................................................12
ARTICLE III
CONDITIONS
SECTION 3.1 Conditions Precedent to the Capitalized Interest Advances;
Additional Advances..........................................12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 Corporate Organization, Etc..................................14
SECTION 4.2 Due Authorization............................................15
SECTION 4.3 Litigation...................................................15
SECTION 4.4 Absence of Undisclosed Liabilities...........................15
SECTION 4.5 Taxes........................................................16
SECTION 4.6 Title to Certain Properties..................................16
SECTION 4.7 No Default...................................................16
SECTION 4.8 Investment Company...........................................16
SECTION 4.9 Legal, Valid and Binding Agreements..........................16
SECTION 4.10 Compliance with ERISA........................................16
SECTION 4.11 Disclosure; Financial Statements.............................16
SECTION 4.12 Compliance with Law..........................................17
SECTION 4.13 Consents.....................................................17
SECTION 4.14 Patents, Copyrights, Permits and Trademarks..................17
ARTICLE V
COVENANTS
SECTION 5.1 Performance of Obligations...................................18
<PAGE>
SECTION 5.2 Compliance with Laws.........................................18
SECTION 5.3 Notice of Default and Event of Default.......................18
SECTION 5.4 Report on Proceedings........................................18
SECTION 5.5 Financial Statements and Other Reports.......................19
SECTION 5.6 Conduct of Business and Preservation of Corporate
Existence, Etc.........................................20
SECTION 5.7 Inspection of Property; Books and Records....................20
SECTION 5.8 Maintenance of Property; Insurance...........................21
SECTION 5.9 Further Assurances; Additional Collateral Security...........21
SECTION 5.10 Indebtedness.................................................21
SECTION 5.11 Limitation on Liens..........................................21
SECTION 5.12 No Dividends.................................................22
SECTION 5.13 Limitation on Investments....................................22
SECTION 5.14 Contingent Liabilities.......................................23
SECTION 5.15 Limitation on Leases.........................................23
SECTION 5.16 Prohibition on Sale of Assets................................23
SECTION 5.17 Limitation on Prepayments of Debt............................24
SECTION 5.18 Subsidiaries.................................................24
SECTION 5.19 Mergers, Disposition of Assets, Etc..........................24
SECTION 5.20 Fiscal Year..................................................24
SECTION 5.21 No Inconsistent Agreements...................................24
SECTION 5.22 Use of Proceeds..............................................24
SECTION 5.23 Transactions with Affiliates.................................25
SECTION 5.24 Ordinary Course..............................................25
ARTICLE VI
DEFAULTS
SECTION 6.1 Events of Default............................................25
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Notices......................................................29
SECTION 7.2 No Waivers; Remedies Cumulative..............................30
SECTION 7.3 Expenses; Documentary Taxes; Indemnification.................30
SECTION 7.4 Amendments and Waivers.......................................32
SECTION 7.5 Successors and Assigns.......................................32
SECTION 7.6 GOVERNING LAW; VENUE AND JURISDICTION........................32
SECTION 7.7 WAIVER OF JURY TRIAL.........................................33
SECTION 7.8 Limitation on Interest.......................................33
SECTION 7.9 Severability.................................................33
SECTION 7.10 Counterparts; Integration; Section Headings..................34
SECTION 7.11 Confidentiality of Information...............................34
<PAGE>
SCHEDULES:
Schedule 1.1(a) - Commitments
Schedule 3.1(h) - Consents from Other Creditors
EXHIBITS:
Exhibit A - Form of Note
Exhibit B - Form of Amendment Agreement
<PAGE>
Exhibit D to Merger Agreement
<PAGE>
AMENDED AND RESTATED LOAN AGREEMENT
AMENDED AND RESTATED LOAN AGREEMENT, dated as of ______ __, 1999,
between IMC MORTGAGE COMPANY, a Delaware corporation (the "Borrower"); and
GREENWICH STREET CAPITAL PARTNERS II, L.P., a Delaware limited partnership
("GSCP"), GREENWICH FUND, L.P., a Delaware limited partnership, and GSCP
OFFSHORE FUND, L.P., a Cayman Islands exempted limited partnership, GREENWICH
STREET EMPLOYEES FUND, L.P., a Delaware limited partnership, and TRV EXECUTIVE
FUND, L.P., a Delaware limited partnership, (each, a "Lender", and collectively,
the "Lenders").
RECITALS
A. IMC Mortgage Company, a Florida corporation ("Original IMC") entered
into a Loan Agreement, dated as of October 12, 1998 (the "Original Loan
Agreement"), between Original IMC, as borrower, and the Lenders, pursuant to
which the Lenders extended to Original IMC commitments to loan, in the
aggregate, $33,000,000 (the "Initial Loans"), subject to the terms and
conditions set forth in the Original Loan Agreement, which Loans are evidenced
by the Initial Notes (as defined herein) and entitled to the benefit of certain
guarantees and security provided under certain of the other Loan Documents (as
defined therein).
B. Original IMC entered into the Agreement and Plan of Merger, dated as
of February __, 1999 (the "Merger Agreement"), by and among GSCP, Original IMC,
IMC 1999 Acquisition Co., Inc., a Delaware corporation and a wholly owned
subsidiary of GSCP ("Acquisition"), pursuant to which Acquisition would be
merged (the "Merger") with and into the Borrower pursuant to which GSCP and
certain of its affiliates would be issued common stock of the surviving
corporation representing approximately 93.5% of the outstanding common stock of
the surviving corporation.
C. In connection with the Merger Agreement, (i) certain of the Lenders
entered into Amendment No. 1, dated as of February 11, 1999, (the "Amendment")
to the Original Loan Agreement (as so amended, the "Initial Loan Agreement"),
providing for the Lenders to extend to the Company additional Commitments (the
"Interim Commitments") to loan in the aggregate $5,000,000 (the "Interim Loans")
and (ii) the Lenders entered into an agreement (the "Additional Commitment
Agreement") with Acquisition, dated as of February __, 1999, obligating the
Lenders, upon consummation of the Merger, to amend and restate the Initial Loan
Agreement, pursuant to which the Lenders will agree to extend to the Borrower
commitments to loan, in the aggregate, an amount which, together with the
Interim Commitments, will equal an additional
Draft -- February 17, 1999
<PAGE>
$40,000,000 (the "Additional Advances"), to capitalize the accrued interest on
the Initial Loans as of the date of consummation of the Merger (the "Capitalized
Interest") and to extend the term for repayment of the Initial Loans, the
Interim Loans, the Additional Advances and the Capitalized Interest until the
third anniversary of the consummation of the Merger.
D. As of _______, 1999, the date the Merger was consummated, the unpaid
principal amount of the Initial Loans amounted to $[38,000,000] and the
Capitalized Interest thereon amounted to $________.
The parties hereto hereby amend and restate the Initial Loan Agreement
to read in its entirety as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. The following terms, as used herein, have the
following meanings:
"Additional Advances" means the Advances in an aggregate principal
amount of [$35,000,000] to be made by the Lenders in the manner set forth in
Sections 2.1 and 2.9.
"Additional Commitment Agreement" has the meaning specified in the
Recitals.
"Advances" means the Initial Advances, the Capitalized Interest
Advances and the Additional Advances.
"Affiliate" means, as to any Person, any other Person directly or
indirectly controlling, or controlled by or under common control with such
Person, including without limitation any Person owning 5% or more of any class
of voting securities of such Person ("control" meaning the power to direct the
management of a Person, whether by the ownership of securities or by contract or
otherwise).
"Agreement" means this Agreement, as the same may be amended, modified
or supplemented from time to time.
Draft -- February 17, 1999
<PAGE>
"Aggregate Additional Commitment Amount" shall mean $[35,000,000].
"Amendment" has the meaning specified in the Recitals.
"Amendment Agreement" shall mean Amendment Agreement No. 2, dated as of
_______, 1999, among the Borrower, the Guarantors, the Lenders and the
Collateral Agent, substantially in the form of Exhibit B hereto.
"Applicable Law" means all applicable laws, treaties, judgments,
decrees, injunctions, writs and orders of any court, governmental agency or
authority and rules, regulations, orders, directives, licenses and permits of
any governmental body, instrumentality, agency or authority.
"Average Amount Outstanding" shall mean an amount equal to (x) the sum
of the aggregate principal amount of all Loans outstanding on each day beginning
on the Closing Date and ending on the Prepayment Date, divided by (y) the number
of days beginning on and including the date of the Closing Date, and ending on
the Prepayment Date.
"BankBoston Forbearance Agreement" means the Forbearance and
Intercreditor Agreement, dated as of October 12, 1998, between the Borrower, the
Lenders and BankBoston, N.A., as assigned to and assumed by the Lenders and
amended and restated as of February ___, 1999, as the same may from time to time
be amended, modified or supplemented.
"Board" means the Board of Directors of the Borrower or a committee of
directors lawfully exercising relevant powers of the Board.
"Borrower" has the meaning set forth in the first paragraph of this
Agreement, and includes, where applicable, its predecessors in interest and
successors.
"Borrower Security Agreement" shall mean the security agreement, dated
as of October 12, 1998, as amended by the Initial Amendment Agreement and the
Amendment Agreement, made by the Borrower in favor of the Collateral Agent for
the benefit of the Lenders, as the same may from time to time be further
amended, modified or supplemented.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in Tampa, Florida or New York, New York are authorized by
law to close.
Draft -- February 17, 1999
<PAGE>
"Business Plan" shall mean the business plan of the Borrower and its
Subsidiaries included in the Disclosure Letter.
"Capitalized Interest" has the meaning specified in the Recitals.
"Capitalized Interest Advances" has the meaning set forth in Section
2.1.
"Change of Control" means the occurrence of any of the following events
(other than as a consequence of the Merger):
(i) any "Person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a Person shall not be deemed
to have "beneficial ownership" of all shares that any such Person has the right
to acquire unless and until such Person acquiring such shares), directly or
indirectly, of more than 50% of the Voting Stock of the Company; or
(ii) individuals who at the date hereof constituted the Board of
Directors of the Borrower cease for any reason to constitute a majority of the
Board of Directors then in office; or
(iii) Borrower or any of its Subsidiaries consummates any sale, lease,
exchange or other disposition of all or substantially all of the assets of the
Borrower and its Subsidiaries, taken as a whole, in any transaction or series of
transactions not in the ordinary course of business; or
(iv) Borrower engages in a merger, consolidation or similar business
combination with any third party.
"Closing Date" shall mean the date on which all of the conditions set
forth in Section 3.1 are satisfied.
"Collateral Agent" means Greenwich Street Capital Partners II, L.P.,
acting as Collateral Agent for the Lenders.
"Commitments" means the commitment of each of the Lenders to make
Advances in accordance with its Commitment Percentage.
Draft -- February 17, 1999
<PAGE>
"Commitment Percentage" shall mean, with respect to each Lender, the
percentage of the Aggregate Commitment Amount set forth beside such Lender's
name on Schedule 1.1(a).
"Common Stock" means the Borrower's common stock, par value $0.01 per
share.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee under capital leases,
(v) all Debt of others secured by a Lien on any asset of such Person, whether or
not such Debt is assumed by such Person and (vi) all Debt of others Guaranteed
by such Person.
"Default" means any condition or event that constitutes an Event of
Default or that with the giving of notice or lapse of time or both would, unless
cured or waived, become an Event of Default.
"Disclosure Letter" means the letter from the Borrower to the Lenders
making certain disclosures with respect to the representations and warranties
contained herein.
"Dollars," "United States dollars," "U.S.$" or "$" means United States
of America dollars.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Event of Default" has the meaning set forth in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Creditors" means each of Bear Stearns Home Equity Trust, Bear
Stearns International Limited, Paine Webber Real Estate Securities, Inc., German
American Capital Corporation and Aspen Funding Corp. and their respective
successors and assigns.
Draft -- February 17, 1999
<PAGE>
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantee Agreement" shall mean the Guarantee Agreement, dated as of
October 12, 1998, as amended by the Initial Amendment Agreement and the
Amendment Agreement, made by the Guarantors in favor of the Lenders, as the same
may from time to time be further amended, modified or supplemented.
"Guarantors" shall mean each of IMC Corporation of America, IMC Credit
Card, Inc., IMC Mortgage Company, Canada Ltd., IMC Securities Inc., American
Home Equity Corporation, IMC Investment Corporation, IMC Investment Limited
Partnership, ACG Financial Services (IMC), Inc., American Mortgage Reduction,
Inc., Central Money Mortgage Co. (IMC), Inc., Corewest Banc, Equity Mortgage
Co., (IMC), Inc., IMCC International, Inc., Mortgage America (IMC), Inc.,
National Lending Center, Inc., National Lending Center TILT, Inc., National
Lending Group, Inc., and Residential Mortgage Corporation (IMC), Inc., each a
wholly owned subsidiary of the Borrower.
"Guaranty" by any Person means any obligation, contingent or otherwise,
of such Person directly or indirectly guaranteeing any Debt or other obligation
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements
or by agreement to keep-well, to purchase assets, goods, securities or services,
to take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other manner the obligee of
such Debt or other obligation of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part); provided that the term
Guaranty shall not include endorsements for collection or deposit or obligations
under repurchase agreements and mortgage loan sale agreements, relating to
representations and warranties made therein, in each case in the ordinary course
of business. The term "Guarantee" used as a verb has a corresponding meaning.
"Initial Advances" shall mean the Advances from the Lenders to the
Borrower made pursuant to the Original Loan Agreement or the Initial Loan
Agreement and outstanding on the Closing Date.
"Initial Amendment Agreement" shall mean Amendment Agreement No. 1,
dated as of February 11, 1999, among the Borrower, the Guarantors, the Lenders
and the Collateral Agent, amending the Security Agreements, the Guarantee
Agreement
Draft -- February 17, 1999
<PAGE>
and the Pledge Agreement.
"Initial Loan Agreement" has the meaning specified in the Recitals.
"Initial Loans" has the meaning specified in the Recitals.
"Initial Notes" shall mean the promissory notes of the Borrower
delivered under the Initial Loan Agreement and evidencing the Initial Loans.
"Intercreditor Agreements" shall mean the separate Intercreditor
Agreements, each dated as of October 12, 1998, as amended and restated as of
February __, 1999, among the Borrower, the Lenders, and each of the Existing
Creditors.
"Interim Loans" has the meaning given in the recitals to the Amendment.
"Interim Note" shall mean any promissory note of the Borrower in the
form of Exhibit 1 to the Amendment, evidencing an Interim Loan, as the same may
from time to time be amended, modified or supplemented.
"Lender" has the meaning set forth in the first paragraph of this
Agreement.
"Lien" means, with respect to any asset or property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect of
such asset or property.
"Loans" shall have the meaning set forth in Section 2.1.
"Loan Documents" means (i) this Agreement, (ii) the Guarantee
Agreement, (iii) the Notes, (iv) the Security Agreements, (v) the Pledge
Agreement, (vi) the Registration Rights Agreement, (vii) the Intercreditor
Agreements, (viii) the BankBoston Forbearance Agreement, and (ix) any other
agreement entered into pursuant to Section 5.9 hereof or Sec tion 4 of the
Security Agreements, in each case as the same may from time to time be amended,
modified or supplemented, and "Loan Document" means any one of them.
"Merger" has the meaning specified in the Recitals.
"Note" shall mean any promissory note of the Borrower in the form of
Exhib it A hereto, evidencing the Loans, as the same may from time to time be
amended,
Draft -- February 17, 1999
<PAGE>
modified or supplemented.
"Officer's Certificate" means a certificate signed by the president, a
vice president, the secretary or the treasurer of the Borrower.
"Original Loan Agreement" has the meaning specified in the Recitals.
"Permitted Liens" shall have the meaning set forth in Section 5.11.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Pledge Agreement" means the Pledge Agreement, dated as of October 12,
1998, as amended, as amended by the Initial Amendment Agreement and the
Amendment Agreement, made by the Borrower in favor of the Collateral Agent for
the benefit of the Lenders, as the same may from time to time be further
amended, modified or supplemented.
"Prepayment Date" shall have the meaning set forth in Section 2.6.
"Registration Rights Agreement" means the Registration Rights
Agreement, entered into as of October 15, 1998, among the Borrower and the
Lenders, as the same may be amended or modified from time to time.
"Responsible Officer" means, with respect to any Person, the president
or any vice president of such Person.
"SEC" means the U.S. Securities and Exchange Commission.
"SEC Reports" shall mean the annual report on Form 10-K of Borrower for
its fiscal year ended December 31, 1997 (as amended prior to the date hereof),
the quarterly reports on Form 10-Q of Borrower for its fiscal quarter ended
March 31, 1998, June 30, 1998 and September 30, 1998, the definitive proxy
statement on Schedule 14A filed by the Borrower with respect to its annual
meeting of shareholders held in 1998 and any other report, registration
statement, proxy statement or other filing with the SEC made after December 31,
1997 and prior to the date of the Additional Commitment Agreement.
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<PAGE>
"Securitization Transaction" means any transaction, however named,
between the Borrower and any one or more purchasers and/or investors which
provides for the monetization of a discrete pool of mortgage loans and/or
mortgage notes through debt securities or ownership interests issued by a
special purpose vehicle supported or backed by mortgage loans and/or mortgage
notes that have been transferred to the special purpose vehicle by the Borrower.
"Security Agreements" shall mean the Borrower Security Agreement and
the Subsidiary Security Agreement.
"Settlement Date" shall have the meaning specified in Section 7.1(b).
"Signing Date" shall mean the date of execution and delivery hereof by
the parties hereto.
"Standstill Period" shall have the meanings given in the BankBoston
Forbearance Agreement and each Intercreditor Agreement, respectively.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned by
such Person.
"Subsidiary Security Agreement" shall mean the security agreement,
dated as of October 12, 1998, as amended by the Initial Amendment Agreement and
the Amendment Agreement, made by the Guarantors in favor of the Collateral Agent
for the benefit of the Lenders, as the same may from time to time be further
amended, modified or supplemented.
"Take-Out Premium" shall mean, with respect to the number of days which
shall have elapsed from and including the Closing Date to the Prepayment Date,
an amount equal to (x) 10%, multiplied by (y) the Average Amount Outstanding.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect on the date hereof in the State of New York; provided, that if by reason
of mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest granted hereunder in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than New York, "UCC" shall mean the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the
Draft -- February 17, 1999
<PAGE>
provisions hereof relating to such perfection or effect of perfection or
non-perfection.
"Voting Stock" of an entity means all classes of capital stock of such
entity then outstanding and normally entitled to vote in the election of
directors or all interests in such entity with the ability to control the
management or actions of such entity.
"Warehouse Facility" means those certain credit and financing
facilities obtained by the Borrower and the Guarantors from various lenders from
time to time to fund the acquisition and origination of mortgage loans, as the
same may be amended from time to time.
SECTION 1.2 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a consistent basis.
ARTICLE II
THE LOAN
SECTION 2.1 Loans. Each Lender has heretofore made Initial Advances to
the Borrower which remain outstanding on the Closing Date and, at the Borrower's
request and subject to the terms and conditions hereof, agrees (i) to capitalize
and add to principal the Capitalized Interest on such Initial Advances as of the
Closing Date (each a "Capitalized Interest Advance") (ii) to extend the maturity
of the Initial Advances to the date provided in Section 2.2 hereof and (iii) to
make Additional Advances to the Borrower on the Closing Date in an amount equal
to such Lender's Commitment Percentage of the Aggregate Additional Commitment
Amount (the Initial Advances, Capitalized Interest Advances and Additional
Advances made by each Lender being referred to collectively as a "Loan" and,
collectively, as to all Lenders, the "Loans"). The Borrower may prepay such
Loans, subject to the terms of this Article II and may not reborrow any amounts
repaid. Such Additional Advances will be made available to or at the written
direction of the Borrower in immediately available funds.
SECTION 2.2 The Notes; Repayment of Principal. The obligation of the
Borrower to repay the unpaid principal amount of the Loans shall be evidenced by
the Notes in the form of Exhibit A hereto, payable to the Lenders and their
registered assigns,
Draft -- February 17, 1999
<PAGE>
duly executed and delivered by the Borrower to the Lenders and bearing interest,
maturing and subject to optional and mandatory prepayment as provided herein.
The Borrower shall repay the Loans, together with all accrued interest thereon,
on ____________, 2002 [third anniversary of the Merger], subject to Section 2.5
and 2.6 hereof.
SECTION 2.3 Loan Record. (a) The Lenders shall maintain a loan record
in which it shall record the date and amount of each Loan and payment or
prepayment of principal of the Loans and the interest paid with respect thereto,
which record may be kept by recordations on the Notes.
(b) The failure of any Lender to make an entry in the loan register or
any error made in any such entry shall not in any way affect the obligations of
the Borrower under this Agreement or any other Loan Document, including without
limitation the Borrower's obliga tion to repay the principal amount of the Loans
and the interest accrued from the actual date on which the Loans are made. The
Borrower shall not be bound by any entry in the loan register not made in
accordance with the terms hereof.
SECTION 2.4 Interest Rate. (a) The Loans shall bear interest on the
outstanding principal amount from the Closing Date at a rate of 20% per annum.
Interest on the Loans shall be payable in arrears on the date that principal
becomes due, whether at maturity, by acceleration or by prepayment. Interest
shall be calculated on the basis of a 365 (or 366, as the case may be) day year
for the actual days elapsed.
(b) Any overdue principal of and overdue interest on the Loans or any
other overdue amount payable under this Agreement shall bear interest, payable
on demand, for each day until paid (to the extent permitted by applicable law
after as well as before judgment) at a rate per annum equal to 2% above the
interest rate otherwise payable for such day pursuant to Section 2.4(a).
SECTION 2.5 Mandatory Prepayment of the Loans. The Borrower shall repay
the Loans in whole, together with all accrued interest and, in the case of
prepayment pursuant to clause (a) below, Take-Out Premium, if any, thereon, on
the first to occur of: (a) a Prepayment Date upon a Change of Control in
accordance with Section 2.6, and (b) ______________, 2002 [third anniversary of
the Merger]. Whether or not the Loans shall have been paid in full, the Borrower
shall pay to the Lenders the Takeout Premium, if any, on the Prepayment Date.
SECTION 2.6 Change of Control Prepayment of the Loan. In the event
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<PAGE>
the Borrower or any Subsidiary shall have executed and delivered a definitive
agreement in respect of a transaction which would, upon consummation, constitute
a Change of Control or a Change of Control otherwise occurs, the Borrower shall,
within 10 days thereafter, offer to repay the Loan to the Lenders by giving the
Lenders written notice of such intention to repay the Loans upon such Change of
Control. Such notice shall specify the date (which date shall be not less than
twenty (20) days after such notice) upon which the Change of Control is expected
to occur (such date, the "Prepayment Date"). In the event the date upon which
the Change of Control is to occur is delayed or rescheduled, the Borrower shall
give the Lenders prompt written notice thereof specifying the delayed or
rescheduled date on which the Change of Control is expected to occur. The
Lenders shall notify the Borrower, not less than five (5) Business Days prior to
the date then scheduled for the Change of Control whether such offer is accepted
or not. Failure to respond to such notice within such period by the Lenders
shall be deemed an acceptance of such offer.
The amount of any such prepayment shall be equal to all principal
amounts outstanding, if any, together with all interest accrued thereon to the
Prepayment Date, plus Take-Out Premium. If such notice is given, the Borrower
shall make such prepayment and the payment amount specified in such notice shall
be due and payable on the Prepayment Date, together with all accrued interest to
such date on the amount prepaid, plus the Take-Out Premium.
SECTION 2.7 Manner and Time of Payments. (a) All payments of principal,
interest, Take-Out Premium and all other amounts payable hereunder shall be in
United States dollars in Federal or other immediately available funds and shall
be made not later than 1:00 p.m. (New York time) on the date due to the Lenders
at such account of such bank or banks as the Lenders may from time to time
designate. Funds received by a Lender after such time shall be deemed to have
been paid by the Borrower on the next succeeding Business Day.
(b) Whenever any payment to be made hereunder shall be stated to be due
on a day which is not a Business Day, the payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder.
SECTION 2.8 Use of Proceeds. The Borrower shall use the proceeds of the
Loans only for general corporate purposes, and in accordance with the Business
Plan.
SECTION 2.9 Borrowings. (a) The Capitalized Interest Advances and the
Additional Advances shall be made, subject to Section 3.1, on the Closing Date.
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<PAGE>
(b) Each borrowing of Additional Advances shall be advanced by each
Lender in accordance with its Commitment Percentage, provided that, if any
Lender fails to advance all or any portion of any requested Additional Advance,
any other Lender may, but shall have no obligation to, advance all or any
portion of the amounts to be advanced by such Lender.
ARTICLE III
CONDITIONS
SECTION 3.1 Conditions Precedent to the Capitalized Interest Advances;
Additional Advances. The obligation of the Lenders to make the Capitalized
Interest Advances and the Additional Advances to be made by them hereunder is
subject to the satisfaction of the following conditions precedent (or the waiver
thereof in the sole discretion of the Lenders):
(a) Each Lender shall have received its Note, conforming to the
requirements hereof and duly executed and delivered by a duly authorized
Responsible Officer of the Borrower and duly endorsed by each Guarantor against
surrender to the Borrower of its Initial Note and its Interim Note;
(b) The representations and warranties of the Borrower contained in
this Agreement and the other Loan Documents and those otherwise made in writing
by or on behalf of the Borrower pursuant to the provisions of this Agreement
shall be correct in all material respects when made and at and as of the Closing
Date, as if made at and as of the Closing Date; no Event of Default or Default
shall have occurred and be continuing; and the Borrower shall have delivered to
the Lenders a certificate of a Responsible Officer of the Borrower, dated the
Closing Date, certify ing that the conditions specified in this paragraph (b)
have been fulfilled;
(c) The Lenders shall have received an opinion of counsel to the
Borrower, which counsel is satisfactory to the Lenders, and which opinion is in
form and substance satisfactory to the Lenders and covers such matters incident
to the transactions contemplated by this Agreement and the other Loan Documents
as the Lenders may request, addressed to the Lenders and dated the Closing Date;
(d) The Lenders shall have received the Amendment Agreement, in the
form of Exhibit B hereto, duly executed and delivered on behalf of the Borrower
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<PAGE>
by a duly authorized Responsible Officer of the Borrower, duly executed and
delivered on behalf of each Guarantor by a duly authorized Responsible Officer
of such Guarantor; and such Amendment Agreement shall be in full force and
effect;
(e) the BankBoston Forbearance Agreement and the Intercreditor
Agreements shall be in full force and effect and the Standstill Period shall not
have terminated under any such Agreement;
(f) the Borrower shall have obtained all consents to the Borrower's
entering into this Agreement (including, without limitation, all consents from
its other creditors listed on Schedule 3.1(h));
(g) The Lenders shall receive from the Borrower a certificate, dated
the Closing Date, of its Secretary or Assistant Secretary as to (i) resolutions
of its Board then in full force and effect authorizing the execution, delivery
and performance of this Agreement, the Notes and each of the Loan Documents to
be executed by it and (ii) the incumbency and signatures of those of its
officers authorized to act with respect to this Agreement, the Notes and each of
the Loan Documents executed by it; and (iii) by-laws and Articles of
Incorporation of the Borrower;
(h) Borrower shall be in compliance in all material respects with the
Business Plan;
(i) the Lenders shall have received all documents it may reasonably
request relating to the existence of the Borrower and its Subsidiaries, the
corporate authority for and the validity of this Agreement and the other Loan
Documents and any other matters relevant hereto, all in form and substance
satisfactory to the Lenders;
(j) the Lenders shall have received the Disclosure Letter, which shall
be satisfactory to the Lenders in substance and form;
(k) the Borrower shall have delivered to the Lenders a certificate of a
Responsible Officer of the Borrower, dated the Closing Date, certifying that the
foregoing conditions specified in paragraphs (a) through (l), inclusive, have
been fulfilled.
ARTICLE IV
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<PAGE>
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
SECTION 4.1 Corporate Organization, Etc. (a) The Borrower is a
corporation duly organized and validly existing and in good standing under the
laws of the State of Delaware, and has the corporate power and authority to own
or hold under lease its properties and to enter into and perform its obligations
under this Agreement and all other Loan Documents.
(b) The Borrower is duly qualified to do business as a foreign
corporation in each state of the United States in which it has an office or in
which failure to so qualify would, individually or in the aggregate, have a
material adverse effect on the business, assets, liabilities, condition
(financial or otherwise), results of operations or prospects of Borrower and its
Subsidiaries taken as a whole or on its ability to perform its obligations under
this Agreement, the Note or any other Loan Document (a "Material Adverse
Effect").
(c) Each Subsidiary of Borrower is a corporation or limited partnership
duly organized and validly existing and in good standing under the laws of the
state of its incorporation, and has the corporate or partnership power and
authority to own or hold under lease its properties and assets and to enter into
and perform its obligations under each of the Loan Documents to which it is a
party. Each such Subsidiary is duly qualified to do business as a foreign
corporation in each state of the United States in which it has an office or in
which the failure to be so qualified would have a Material Adverse Effect.
(d) Set forth on Schedule 4.1 to the Disclosure Letter is a list of all
of the Subsidiaries of the Borrower and a true and correct description of the
authorized, issued and outstanding capital stock of each such Subsidiary. The
Borrower owns all of the outstanding capital stock of each such Subsidiary, free
and clear of any Liens, except as specified in Schedule 4.1 to the Disclosure
Letter.
SECTION 4.2 Due Authorization. The execution, delivery and performance
by the Borrower of this Agreement, and the execution, delivery and performance
by the Borrower and the Guarantors of each of the other Loan Documents to which
any of them is a party:
(a) have been duly authorized by all necessary corporate action and do
not require any stockholder approval or the approval or consent of or notice to
any
Draft -- February 17, 1999
<PAGE>
trustee or holder of any indebtedness or obligations of the Borrower or any
Subsidiary;
(b) do not conflict with or result in any violation of the certificate
of incorporation or by-laws of the Borrower or any Subsidiary;
(c) do not and will not contravene any Applicable Law or conflict with
or constitute a default under, or result in the creation of any Lien (other than
as permitted under this Agreement or the Security Agreement) upon the property
of the Borrower or any Subsidiary under any indenture, mortgage, lease,
instrument or other agreement to which the Borrower or any Subsidiary is a party
or by which it may be bound or affected; and
(d) do not require the authorization, consent or approval of, the
giving of notice to, the registration with or the taking of any other action by
or in respect of, any Federal, state or foreign governmental authority, agency
or judicial body, or the taking of any other action under any Applicable Law,
except for those that have been or, on or before the Closing Date, will have
been, duly made, given or accomplished, including without limitation the filing
of Uniform Commercial Code financing statements referred to in the Security
Agreements.
SECTION 4.3 Litigation. Except as disclosed in its SEC Reports,
complete and correct copies of which have been furnished to the Lenders, there
are no pending or, to the knowledge of the Borrower, threatened actions, suits,
proceedings or investigations before any court or administrative agency or
arbitrator which would, if adversely determined, individually or in the
aggregate, have a Material Adverse Effect.
SECTION 4.4 Absence of Undisclosed Liabilities. Except as disclosed in
the SEC Reports or in Schedule 4.4 to the Disclosure Letter and for liabilities
arising since September 30, 1998 in the ordinary course of business and
consistent with past practice, none of which have had or could reasonably be
expected to have any Material Adverse Effect, neither Borrower nor any of its
Subsidiaries has any liability, obligation, claim or cause of action of any kind
or nature whatsoever, whether absolute, accrued, contingent or other, known or
unknown.
SECTION 4.5 Taxes. Each of the Borrower and its Subsidiaries has filed
or caused to be filed all tax returns which are required to be filed by it and
has paid or caused to be paid all taxes which have been shown to be due and
payable by such returns or (except to the extent being contested in good faith
and for the payment of which adequate reserves have been provided) tax
assessments received by the Borrower or such
Draft -- February 17, 1999
<PAGE>
Subsidiary to the extent that such taxes have become due and payable.
SECTION 4.6 Title to Certain Properties. Each of the Borrower and the
Guarantors has good and marketable title to all of its material properties and
assets free and clear of any Lien, except as disclosed on Schedule 4.6 to the
Disclosure Letter.
SECTION 4.7 No Default. No Event of Default or Default has occurred and
is continuing or has occurred or will occur as a result of the execution and
delivery of this Agreement or the other Loan Documents or the consummation of
the transactions contemplated hereby or thereby, other than defaults as may
result from creating junior liens on assets without the consent of prior lien
holders.
SECTION 4.8 Investment Company. Neither the Borrower nor any Guarantor
is an "investment company" or a company controlled by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
SECTION 4.9 Legal, Valid and Binding Agreements. This Agreement, the
Notes and each other Loan Document constitute or, when executed and delivered by
each of the Borrower and the Guarantors which is a party thereto, will
constitute, the legal, valid and binding obligation of each of the Borrower and
the Guarantors which is a party thereto, en forceable against the Borrower or
such Guarantor, as the case may be, in accordance with the respective terms
hereof and thereof, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
rights of creditors generally and by general principles of equity.
SECTION 4.10 Compliance with ERISA. Neither the Borrower nor any
Subsidiary has breached the fiduciary rules of ERISA or engaged in any
prohibited transaction in connection with which the Borrower or such Subsidiary
could be subjected to (in the case of any such breach) liability for damages or
(in the case of any such prohibited transaction) either a civil penalty assessed
under ERISA or a tax, which liability, penalty or tax, in any case, would
reasonably be expected to have a Material Adverse Effect.
SECTION 4.11 Disclosure; Financial Statements. (a) The SEC Reports, as
of their date of filing, do not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made therein,
in the light of the cir cumstances under which they were made, not misleading.
(b) The consolidated balance sheets of Borrower and its consolidated
Subsidiaries and the related consolidated statements of operations, changes in
shareholders' equity and cash flows contained in the SEC Reports, present fairly
the
Draft -- February 17, 1999
<PAGE>
financial condition of the Borrower and its Subsidiaries as at the dates
thereof, and the consolidated results of its operations, changes in
shareholders, equity and cash flows for the periods presented therein in
accordance with generally accepted accounting principles consistently applied.
There has been no material adverse change in the business, operations, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole from that reflected on the most recent
consolidated balance sheet of the Borrower and its subsidiaries contained in the
SEC Reports, except as disclosed in Schedule 4.11 to the Disclosure Letter.
SECTION 4.12 Compliance with Law. Each of the Borrower and its
subsidiaries is in compliance with Applicable Law, except to the extent that the
failure to comply therewith would not, individually or in the aggregate, have a
Material Adverse Effect.
SECTION 4.13 Consents. No consent of any other Person and no consent or
authorization of, filing with or other act by or in respect of any Governmental
Authority is required in connection with the borrowing hereunder or with the
execution, delivery or performance by Borrower or any Guarantor, or the validity
or enforceability of, this Agree ment or any other Loan Document, except as set
forth on Schedule 4.13 to the Disclosure Letter and except for such consents,
authorizations, filings or acts the failure of which to obtain or to undertake
would not, individually or in the aggregate, have a Material Adverse Effect.
SECTION 4.14 Patents, Copyrights, Permits and Trademarks. Each of
Borrower and its Subsidiaries owns, or has a valid license or sublicense in, all
domestic and foreign letters patent, patents, patent applications, and know-how,
licenses, inventions, technology, permits, trademark registrations and
applications, trademarks, tradenames, trade secrets, service marks, copyrights,
product designs, applications, formulae, computer software and programs,
processes and industrial property rights (collectively "proprietary rights")
used in the operation of its business in the manner in which it is currently
being conducted and which are material to the business, operations, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole. Neither the Borrower nor any of its
Subsidiaries is aware of any existing or threatened infringement or
misappropriation of any proprietary rights of others by the Borrower or any of
its Subsidiaries or of any proprietary rights of the Borrower or any of its
Subsidiaries by others, except for such as would not, individually or in the
aggregate, have Material Adverse Effect.
Draft -- February 17, 1999
<PAGE>
ARTICLE V
COVENANTS
The Borrower covenants and agrees that, so long as this Agreement shall
be in effect or any amount payable hereunder shall remain unpaid or any
obligation required to be performed hereunder shall remain unperformed, and
unless the Lenders shall otherwise consent in writing:
SECTION 5.1 Performance of Obligations. (a) The Borrower shall perform,
and shall cause each Guarantor to perform, promptly and faithfully all of its
obligations under this Agreement, the Notes and the other Loan Documents.
(b) The Borrower shall, and shall cause each Subsidiary to, pay and
discharge, at or before maturity, all of its obligations and liabilities,
including, without limitation, tax liabilities, except where the same may be
contested in good faith by appropriate proceedings, and maintain in accordance
with generally accepted accounting principles appropriate reserves for the
accrual of any of the same; provided that the failure of the Borrower and its
Subsidiaries to pay and discharge their obligations or liabilities with respect
to the matters set forth in Schedule 5.1 to the Disclosure Letter, or to pay and
discharge their accounts payable within 60 days of their presentment to the
Borrower or its Subsidiaries shall not be deemed a breach or nonperformance by
the Borrower of its covenants in this Section 5.1(b).
SECTION 5.2 Compliance with Laws. The Borrower shall, and shall cause
each Subsidiary to, comply with Applicable Law except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings.
SECTION 5.3 Notice of Default and Event of Default. (a) No later than
two Business Days after becoming aware of the existence of any condition or
event which constitutes a Default or an Event of Default hereunder, the Borrower
shall provide the Lenders with an Officer's Certificate specifying the nature
and period of existence thereof and what action the Borrower is taking or
proposes to take with respect thereto.
(b) Immediately upon the receipt of notice from any creditor of a
margin call or demand for repayment in respect of on a Securitization
Transaction or a Warehouse Facility, the Borrower shall immediately notify the
Lenders of the nature and amount of such margin call or demand for repayment,
and the name of the creditor which made such margin call or demand.
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<PAGE>
SECTION 5.4 Report on Proceedings. No later than two Business Days
after becoming aware of any investigation of the Borrower or any Subsidiary by
any governmental authority or agency or any court or administrative proceeding
or arbitration which, if adversely determined, would reasonably involve a
possibility of an adverse effect on the ability of the Borrower to perform its
obligations under this Agreement, the Note or any other Loan Document, the
Borrower shall provide the Lenders with an Officer's Certificate specifying the
nature of such investigation or proceeding and what action the Borrower is
taking or proposes to take with respect thereto.
SECTION 5.5 Financial Statements and Other Reports. The Borrower shall
furnish to the Lenders the following described financial statements, reports,
notices and information:
(a) Monthly Financial Statements. Within 35 days after the end of the
month, consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries at the end of such month and the related consolidated and
consolidating statements of income and cash flows of the Borrower and its
Subsidiaries for such month, and the general ledger trial balance of the
Borrower and its Subsidiaries for such month, all in reasonable detail and in
form reasonably satisfactory to the Lenders, together with such other
information as is customarily prepared by Borrower as part of its monthly report
to management.
(b) Quarterly Financial Statements. Within 45 days after the end of
each fiscal quarter of the Borrower, consolidated and consolidating balance
sheets of the Borrower and its Subsidiaries at the end of such quarter and the
related consolidated and consolidating statements of income, stockholders'
equity and cash flow of the Borrower and its Subsidiaries for such fiscal
quarter, setting forth, in the case of the consolidated statements, in
comparative form the figures for the previous quarter of the Borrower, all in
reasonable detail and certified by a principal financial officer of the Borrower
as presenting fairly the financial position of the Borrower and its Subsidiaries
as of the dates indicated and the results of their operations, changes in
shareholders' equity and cash flows for the periods indicated in conformity with
generally accepted accounting principles applied on a consistent basis with
prior periods (except as otherwise stated therein); provided that the delivery
of the Borrower's Quarterly Report on Form 10-Q for such fiscal quarter prepared
in accordance with the requirements of the SEC and U.S. securities regulations
shall be sufficient to satisfy the Borrower's obligations under this Section
5.5(c).
(c) Other Reports. Promptly upon their becoming available, copies of
all
Draft -- February 17, 1999
<PAGE>
other financial statements, reports, notices and proxy statements sent or made
available by the Borrower to its shareholders or filed with the SEC.
(d) Officer's Certificate. Together with each delivery of financial
statements or reports required by clauses (a), (b) and (c) above, a certificate
from a Responsible Officer of the Borrower to the effect that the signer is
familiar with or has reviewed the relevant terms of this Agreement and has made,
or caused to be made under his or her supervision, a review of the transactions
and condition of the Borrower during the period covered by such financial
statements, and that such review has not disclosed the existence during such
period, nor does the signer have knowledge of the existence as at the date of
such certificate, of any condition or event that constitutes an Event of Default
or Default hereunder or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action the
Borrower has taken, is taking or proposes to take with respect thereto.
(e) Other Information. Such other data or information regarding the
business affairs or financial condition of the Borrower as the Lenders may from
time to time reasonably request, promptly upon receipt of such request.
SECTION 5.6 Conduct of Business and Preservation of Corporate
Existence, Etc. (a) The Borrower shall, and shall cause each Subsidiary to,
maintain and preserve at all times its corporate existence.
(b) The Borrower shall, and shall cause each Subsidiary to, continue to
engage in business of the same general type as now conducted by the Borrower or
such Sub sidiary and will do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its corporate existence and
its rights, powers, privileges and franchises, except for any corporate right,
power, privilege or franchise that it determines is no longer necessary or
desirable in the conduct of its business.
(c) The Borrower shall not, without the prior written consent of the
Lenders, enter into the ownership, active management or operation of any
business other than businesses presently conducted in the geographic locations
presently conducted (and except as otherwise permitted hereby the Borrower shall
not effect or permit a change in its corporate organization existing on the date
hereof).
(d) Except as provided in Section 5.24, the Borrower shall not, and
shall not permit any Subsidiary to, amend or modify its Certificate of
Incorporation or By-laws
Draft -- February 17, 1999
<PAGE>
without the prior written consent of the Lenders.
SECTION 5.7 Inspection of Property; Books and Records. The Borrower
shall, and shall cause each Subsidiary to, keep proper books of record and
account in which full, true and correct entries are made in accordance with
generally accepted accounting principles and Applicable Law; and shall permit
representatives of the Lenders to visit and inspect any of its properties, and
examine and make abstracts from any of its books and records at the Borrower's
expense, at any reasonable time and as often as may reasonably be requested, and
to discuss the business, operations, properties and financial and other
condition of the Borrower and its Subsidiaries with officers and employees of
the Borrower and its Subsidiaries.
SECTION 5.8 Maintenance of Property; Insurance. The Borrower shall, and
shall cause each Subsidiary to, keep all property useful and necessary in its
business in good working order and condition, and maintain with financially
sound and reputable insurance companies insurance on all its property in at
least such amounts and against such risks as are usually insured against in the
same general area by Persons engaged in the same or a similar business.
SECTION 5.9 Further Assurances; Additional Collateral Security. The
Borrower shall, and shall cause each Subsidiary to, execute and file all such
further documents and instruments, and perform such other acts, as the Lenders
may reasonably determine are necessary or advisable to maintain or perfect the
Liens granted to the Lenders in connection with this Agreement and the other
Loan Documents and to maintain the priority and perfection of such Liens
purported to be granted pursuant to this Agreement and the other Loan Documents
(including any Liens on property rights). With respect to any real property,
fixtures, equipment or securities identified as collateral under any Security
Agreement acquired and held by the Borrower or any Guarantor at any time after
the Closing Date, upon request of the Lenders, the Borrower shall, or shall
cause such Guarantor to, grant the Lenders a Security Interest (as defined in
the Security Agreement) of record on all such real property, fixtures and
equipment and a pledge of all such securities, upon the terms set forth in the
applicable Security Agreement, as appropriate, and satisfactory in form and
substance to the Lenders.
SECTION 5.10 Indebtedness. The Borrower shall not, and shall not permit
any Subsidiary to, create, incur, assume, Guarantee or suffer to exist any Debt
except:
(a) Debt under the Loan Documents; and
Draft -- February 17, 1999
<PAGE>
(b) Debt listed on Schedule 5.10 to the Disclosure Letter, and any
extensions or renewals thereof;
SECTION 5.11 Limitation on Liens. The Borrower shall not and shall not
permit any Subsidiary to, create, incur, assume or suffer to exist any Lien on
any of its property, assets or revenues, whether now owned or hereafter
acquired, except the following (the "Permitted Liens"):
(a) Liens in favor of the Lenders under the Loan Documents;
(b) Liens existing on the date hereof and set forth on Schedule 5.11 to
the Disclosure Letter;
(c) Liens for taxes and special assessments not yet due or which are
being contested in good faith and by appropriate proceedings if adequate
reserves with respect thereto are maintained on the books of the Borrower in
accordance with generally accepted accounting principles;
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 90 days or which are being contested in good
faith by appropriate proceedings;
(e) pledges or deposits in connection with workmen's compensation,
unemployment insurance and other social security legislation or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
performance and return-of-money bonds and similar obligations;
(i) Liens resulting from judgments of any court or governmental
proceeding; provided that such judgments in the aggregate do not constitute an
Event of Default under Section 6.1(j); and
(f) Liens of landlords or of mortgagees of landlords, arising solely by
operation of law, on fixtures located on premises leased in the ordinary course
of business; provided that the rental payments secured thereby are not more than
30 days over due.
SECTION 5.12 No Dividends. The Borrower shall not, and shall not permit
any Subsidiary to, declare any dividends on, or make any payment on account of,
Draft -- February 17, 1999
<PAGE>
or set apart assets for a sinking or other analogous fund for, the purchase,
redemption, retirement or other acquisition of, any shares of any class of stock
of the Borrower, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Borrower or any Subsidiary.
SECTION 5.13 Limitation on Investments. The Borrower shall not, and
shall not permit any Subsidiary to, make or permit to exist any loans or cash
advances to, or capital investments in, any other Person, including any
Affiliate, except that:
(a) the Borrower and any Subsidiary may make cash advances to, or
investments in, any wholly-owned Subsidiary of the Borrower or, in the case of
advances or investments by any Subsidiary, the Borrower, and may make advances
to Preferred Mortgages, Ltd., a United Kingdom company, as contemplated by the
Business Plan;
(b) the Borrower and any Subsidiary may purchase or otherwise acquire
and own (i) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed or insured by the United States of
America or any agency thereof, (ii) commercial paper issued by domestic issuers
rated at least A-1 by Standard & Poor's Corporation or P-1 by Moody's Investors
Service, Inc. or (iii) certificates of deposit, Eurodollar time deposits,
overnight bank deposits and bankers acceptances, each with maturities of one
year or less from the date of the ac quisition thereof, of any commercial bank
having capital and surplus in excess of $100,000,000; and
(c) the Borrower and its Subsidiaries may acquire investments in notes
and other securities received in settlement of overdue debts and accounts
payable in the ordinary course of business and mortgage loans, servicing
contracts and rights and certificates evidencing its participation in
securitization of mortgage loans and the servicing of mortgage loans or
securitizations in the ordinary course of business.
SECTION 5.14 Contingent Liabilities. The Borrower shall not, and shall
not permit any Subsidiary to, become liable for any Guaranties, except for (i)
the endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business, (ii) Guaranties existing as of
the date hereof and listed on Schedule 5.14 to the Disclosure Letter, (iii)
Guaranties in respect of Debt permitted under Section 5.10 or Liens permitted
under Section 5.11 and (iv) Guaranties (other than Guaranties of Debt) arising
in the ordinary course of business of the Borrowers and the
Draft -- February 17, 1999
<PAGE>
Subsidiaries consistent with past practice.
SECTION 5.15 Limitation on Leases. The Borrower shall not, and shall
not permit any Subsidiary to, enter into any agreement, or become liable under
any agreement, for the lease, hire or use of any real or personal property for a
period in excess of one year and an aggregate rental or other payment in excess
of $500,000, except with the prior written approval of the Lenders, such
approval not to be unreasonably withheld.
SECTION 5.16 Prohibition on Sale of Assets. The Borrower shall not, and
shall not permit any Subsidiary to, except as permitted or contemplated under
this Agreement or any other Loan Document, sell, lease, assign, transfer or
otherwise dispose of any of its assets, including any disposition of its capital
stock (except for issuances of shares if its capital stock required under the
acquisition agreements listed in Schedule 5.16 to the Disclosure Letter),
whether now owned or hereafter acquired, except for dispositions of assets in
the ordinary course of business consistent with past practice that, taken
together, do not constitute any material portion of the assets of the Borrower
and its Subsidiaries.
SECTION 5.17 Limitation on Prepayments of Debt. The Borrower shall not,
and shall not permit any Subsidiary to, directly or indirectly prepay, purchase,
redeem, retain or otherwise acquire any of its Debt except for prepayments of
the Notes in accordance with the terms of this Agreement, payments required
under the terms of the BankBoston Forbearance Agreement or the Intercreditor
Agreements and except as otherwise expressly provided herein; provided, however,
that scheduled payments of interest and principal and mandatory prepayments of
Debt which do not violate the Intercreditor Agreements or BankBoston Forbearance
Agreement shall not be deemed to violate this Section.
SECTION 5.18 Subsidiaries. The Borrower shall not, and shall not permit
any Subsidiary to, without the prior written consent of the Lenders, create any
Subsidiary.
SECTION 5.19 Mergers, Disposition of Assets, Etc. The Borrower shall
not, and shall not permit any Subsidiary to, merge, combine or consolidate with
or into any Person, or sell, assign, lease or otherwise dispose of (whether in
one transaction or in a series of transactions, whether or not related) all or
any substantial portion of its assets (whether now owned or hereafter acquired)
to any Person, except with the prior written approval of the Lenders, provided
that dispositions of assets in the ordinary course of business that are not
material to the business of the Borrower and its Subsidiaries shall
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<PAGE>
not violate this Section 5.19.
SECTION 5.20 Fiscal Year. The Borrower shall not, and shall not permit
any Subsidiary to, permit its fiscal year to end on a day other than December 31
without the prior written consent of the Lenders.
SECTION 5.21 No Inconsistent Agreements. The Borrower shall not, and
shall not permit any Subsidiary to, enter into any agreement containing any term
or provision which will be violated, contravened or breached by (i) the
Borrower's execution or delivery of this Agreement or any Loan Document, (ii)
the Borrower's performance of its obligations hereunder or (iii) the
consummation of the transactions contemplated hereby.
SECTION 5.22 Use of Proceeds. The Borrower agrees to apply the proceeds
of the Loan solely and exclusively for the general corporate purposes of the
Borrower and its Subsidiaries consistent in all material respects with the
Business Plan and to repay amounts owed to the Existing Creditors or BankBoston
N.A. as required by the Intercreditor Agreements or the BankBoston Forbearance
Agreement, respectively.
SECTION 5.23 Transactions with Affiliates. The Borrower shall not, and
shall not permit any Subsidiary to, directly or indirectly, enter into or,
except for such existing transactions as are disclosed in the SEC Reports or
Schedule 5.23 to the Disclosure Letter, permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any Affiliate of the Borrower
(other than its wholly-owned Subsidiaries) or any director or executive officer
of the Borrower or its Subsidiaries, on terms that are less favorable to the
Borrower or such Subsidiary than those which might be obtained at the time from
Persons who are not Affil iates, directors or executive officers.
SECTION 5.24 Ordinary Course. Notwithstanding anything herein to the
contrary, the following actions taken in the ordinary course of the Borrower's
business consistent with past practice and the Business Plan will not constitute
a breach of any of the covenants in the Agreement: (i) purchase, repurchase or
origination of residential mortgage loans, (ii) whole loan sales or
securitization of residential mortgage loans (including, without limitation,
sales of all or any portion of Borrower's residential mortgage loans to any
Existing Creditor and which will comprise a portion of the Collateral (as
defined in the Intercreditor Agreement with such Existing Creditor)), (iii)
borrowing under warehouse loan facilities to finance the acquisition and
origination of residential mortgage loans and the granting of security interest
in such loans, (iv) the sale or borrowing against the value of residual
certificates and interest only certificates generated by securitization of
residential mortgage loans and the granting of a security
Draft -- February 17, 1999
<PAGE>
interest in such certificates, (v) borrowing to finance the funding of monthly
remittance advances under the Borrower's servicing agreements and the grant of a
security interest in (or sale of) the right to receive a repayment of such
advances, (vi) sales and purchases of loans and securities under repurchase
agreements and (vii) related Guarantees by the Borrower or its Subsidiaries in
respect of the foregoing.
ARTICLE VI
DEFAULTS
SECTION 6.1 Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to make any payment of any principal of the
Loans required to be made under this Agreement when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
acceleration or otherwise;
(b) the Borrower shall fail to make any payment of any other amount
payable under this Agreement or any Note for more than five Business Days after
the same becomes due and payable;
(c) the Borrower shall fail to perform or comply with any covenant set
forth in Section 5.3 ("Notice of Default or Event of Default"), 5.6 ("Conduct of
Business and Preservation of Corporate Existence, Etc."), 5.12 ("No Dividends"),
5.17 ("Limitation on Prepayments of Debt"), 5.19 ("Mergers, Disposition of
Assets, Etc."), or 5.22 ("Use of Proceeds");
(d) the Borrower shall fail to perform or comply with any other
covenant or agreement to be performed or observed by it under this Agreement or
any other Loan Document and such failure shall continue unremedied for a period
of two days after written notice thereof shall have been given by the Lenders to
the Borrower provided, that if such failure shall not be capable of being
remedied within such two-day period, such period shall be extended for such
additional reasonable period of time, not to exceed 30 days, as may be required
to effect such remedy, further provided that Borrower is diligently pursuing
such remedy;
(e) any representation or warranty of the Borrower or any Guarantor
contained in this Agreement or any other Loan Document or in any document or
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<PAGE>
certificate delivered in connection herewith or therewith or pursuant hereto or
thereto shall at any time prove to have been incorrect or incomplete in any
material respect at the time made or deemed to have been made, shall remain
material at the time in question and shall either be incapable of being cured or
shall not be cured within 20 days after notice thereof by the Lenders to the
Borrower;
(f) the Borrower or any Subsidiary shall consent to the appointment of
or taking possession by a receiver, assignee, custodian, sequestrator, trustee
or liquidator (or other similar official) of itself or of a substantial part of
its property; or the Borrower or any Subsidiary shall admit in writing (to any
creditor, governmental authority or judicial court or tribunal) its inability to
pay its debts generally as they come due or shall fail generally to pay its
debts as they become due (except to the extent contemplated by the proviso
clause of Section 5.1(b) hereof), or shall make a general assignment for the
benefit of its creditors; or the Borrower or any Subsidiary shall file a
voluntary petition in bankruptcy or a voluntary petition or answer seeking
liquidation, reorganization or other relief with respect to itself or its debts
under the Federal bankruptcy laws, as now or hereafter constituted or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or
shall consent to the entry of an order for relief in an involuntary case under
any such law; or the Borrower or any Subsidiary shall file an answer admitting
the material allegations of a petition filed against the Borrower in any such
proceeding, or otherwise seek relief under the provisions of any existing or
future Federal or State bankruptcy, insolvency or other similar law providing
for the reorganization or winding-up of corporations, or providing for an
arrangement, agreement, composition, extension or adjustment with its creditors;
or the Borrower or any Subsidiary shall take or publicly announce its intention
to take corporate action in furtherance of any of the foregoing;
(g) an order, judgment or decree shall be entered in any proceeding by
any court of competent jurisdiction appointing, without the consent of the
Borrower, a receiver, trustee or liquidator of the Borrower or any Subsidiary or
of any substantial part of its property, or any substantial part of the property
of the Borrower or any Subsidiary shall be sequestered, and any such order,
judgment or decree of appointment or sequestration shall remain in force
undismissed, unstayed or un vacated for a period of 30 days after the date of
entry thereof;
(h) a petition against the Borrower or any Subsidiary in a proceeding
Draft -- February 17, 1999
<PAGE>
under the Federal bankruptcy laws or other insolvency laws, as now or hereafter
in effect, shall be filed and shall not be withdrawn or dismissed within 30 days
thereafter, or a decree or order for relief in respect of the Borrower or any
Subsidiary shall be entered by a court of competent jurisdiction in an
involuntary case under the Federal bankruptcy laws, as now or hereafter
constituted or, under the provisions of any law providing for reorganization or
winding-up of corporations which may apply to the Borrower, any court of
competent jurisdiction shall assume jurisdiction, custody or control of the
Borrower or any Subsidiary or of any substantial part of its property and such
jurisdiction, custody or control shall remain in force unrelinquished, unstayed
or unterminated for a period of 30 days;
(i) the Borrower or any Subsidiary shall fail to pay when due and
payable (after any applicable grace period) the principal of or interest on any
Debt in excess of $100,000 in respect of which it is obligated to make payment
(other than Debt under this Agreement or the Note) or the maturity of such Debt
shall have been accelerated in accordance with the provisions of the instrument
providing for the creation of or concerning such Debt, or any event shall have
occurred or failed to occur and be continuing which, with the giving of notice
or the passage of time or both, would permit any holder or holders thereof or
any agent or trustee on its or their behalf to accelerate such maturity,
provided that the foregoing shall not constitute an Event of Default or a
Default for so long as the holders of such Debt are prohibited from taking
action with respect to such default under the terms of any Intercreditor
Agreement or the BankBoston Forbearance Agreement;
(j) an uninsured final judgment in the amount, or final judgments in
related proceedings in an aggregate amount, in excess of $100,000 shall be
entered against the Borrower or any Subsidiary and such judgment shall continue
unsatisfied and unstayed for a period of ten days;
(k) the Borrower or any Subsidiary shall fail to pay when due an amount
or amounts aggregating in excess of $100,000 which it shall have become liable
to pay to the Pension Benefit Guaranty Corporation ("PBGC") or to an employee
benefit plan under Title IV of ERISA; or notice of intent to terminate a plan or
plans having aggregate unfunded vested liabilities in excess of $100,000 shall
be filed under Title IV of ERISA by the Borrower or any Subsidiary, any plan
administrator or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or cause a trustee to be
appointed to administer an employee benefit plan; or a proceeding shall be
instituted by a fiduciary of any employee benefit plan against the Borrower or
any
Draft -- February 17, 1999
<PAGE>
Subsidiary to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding
shall not have been dismissed within 30 days thereafter; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any plan must be terminated; or
(l) any Loan Document shall cease for any reason to be in full force
and effect in accordance with its terms or the Borrower or any Subsidiary shall
so assert in writing or the Borrower or any Subsidiary shall in any way
challenge, or any proceedings shall be brought to challenge, the validity,
binding effect or enforceability of such Loan Document or any of the Liens
purported to be granted pursuant to any Loan Document shall cease for any reason
to be legal, valid and enforceable Liens on the collateral purported to be
covered thereby or to have the priority purported to be granted thereby;
then, and in every such event, any Lender may by notice to the Borrower declare
the Loans to be, and the Loans shall thereupon become, immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower; provided that in the case of any of the
Events of Default specified in clause (f), (g) or (h) above, without any notice
to the Borrower or any other act by any Lender, the Loans shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, facsimile
transmission or similar writing) and shall be given to such party at its address
or facsimile number set forth below:
If to the Lenders:
Greenwich Street Capital Partners II, L.P.
c/o Greenwich Street Capital Partners, Inc.
388 Greenwich Street
38th Floor
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<PAGE>
New York, NY 10033
Attn: Sanjay Patel
Tel: 212-816-1149
Fax: 212-816-0166
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
Attention: Steven Ostner
Tel: 212-909-6000
Fax: 212-909-6836
If to the Borrower:
IMC Mortgage Company
5901 E. Fowler Avenue
Tampa, Florida 33617
Attn: President
Tel: 813-984-2533
Fax: 813-984-2593
with a copy to:
Mitchell W. Legler
300 A Wharfside Way
Jacksonville, Florida 32207
Tel: 904-346-3200
Fax: 904-346-3299
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other party. Each such notice, request or other
communication shall be effective (i) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (ii) if given by any other means, when delivered at
the address specified in this Section 7.1.
SECTION 7.2 No Waivers; Remedies Cumulative. No failure or delay by the
Lender in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further
Draft -- February 17, 1999
<PAGE>
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 7.3 Expenses; Documentary Taxes; Indemnification. (a) The
Borrower shall be liable to pay on demand (i) all out-of-pocket expenses of the
Lenders, including the fees and disbursements of counsel to the Lenders, in
connection with the preparation of any waiver or consent under the Loan
Documents or any amendment of any of the Loan Documents, or any Default or
alleged Default hereunder and (ii) if an Event of Default occurs, all
out-of-pocket expenses incurred by the Lenders, including fees and dis
bursements of counsel, in connection with such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings resulting therefrom.
The Borrower shall indemnify the Lenders from and hold it harmless against any
transfer taxes, documentary taxes, assessments or other similar charges made by
any governmental authority by reason of the execution and delivery of any Loan
Document.
(b) (i) The Borrower shall indemnify, defend and hold harmless the
Lenders and their officers, directors, employees and agents (collectively, the
"Indemnitees") from and against, and pay or reimburse the Indemnitees for, (i)
any and all taxes, and all other assessments or charges made by any governmental
authority, relating to the execution and delivery of this Agreement or the other
Loan Documents, and (ii) any and all liabilities, losses, damages, penalties,
judgments, suits, claims, costs and expenses of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of a
single counsel) in connection with any investigative, administrative or judicial
proceeding, whether or not such Indemnitee shall be designated a party thereto,
which may be imposed on, incurred by or asserted against such Indemnitee, in any
manner relating to or arising out of or in connection with this Agreement or the
other Loan Documents (collectively, the "Indemnified Liabilities"), and to
reimburse each Indemnitee, upon its demand as incurred for any cost or expenses
(including, without limitation, the reasonable fees, expenses and disbursements
of a single counsel) incurred in connection with investigating, defending or
preparing to defend or participating (including as a witness) in any
investigative, ad ministrative or judicial proceeding whether or not such
Indemnitee shall be designated a party thereto, whether commenced or threatened,
with respect to any such actual, alleged or threatened liability, loss, damage,
penalty, judgment, suit, claim, cost or expense; provided that no Indemnitee
shall have a right to be indemnified hereunder for its own gross negligence or
willful misconduct as determined by a court of competent jurisdiction.
(ii) If any investigative, judicial or administrative proceeding or
Draft -- February 17, 1999
<PAGE>
arbitration arising from any of the foregoing is brought against any Indemnitee,
the Borrower shall assume the defense thereof on behalf of such Indemnitee,
including the employment of counsel reasonably satisfactory to such Indemnitee
and payment of all expenses relating thereto. The Indemnitee shall have the
right to employ separate counsel in any such proceeding or arbitration and
participate in the defense thereof; provided, that the fees and expenses of such
separate counsel shall be at the expense of the Indemnitee, rather than the
Borrower, unless (A) the employment of such separate counsel has been
specifically authorized by the Borrower or (B) the named parties to any such
action (or any impleaded parties), or the Indemnitee, shall have been advised by
its counsel that there may be one or more legal defenses available to the
Indemnitee which are different from or additional to those available to the
Borrower. If the provisions of clause (B) immediately above are met, the
Borrower shall not have the right to assume the defense of such action on behalf
of the Indemnitee. The Borrower shall not be liable for any settlement of any
such proceeding effected without the written consent of the Borrower, but if
settled with the written consent of the Borrower or if there is a final judgment
for the plaintiff in any such action, the Borrower shall indemnify and hold
harmless the Indemnitee from and against any loss or liability by reason of such
settlement or judgment. The Borrower shall not enter into any settlement of, or
consent to the entry of any judgment with respect to, any actual or alleged
Indemnified Liabilities without the prior written consent of the Indemnitee,
unless such settlement or judgement (x) includes an unconditional release of the
Indemnitees from all liabilities arising out of such actual or alleged
Indemnified Liability and (y) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any Indemnitee.
(iii) At any time after the Borrower has assumed the defense of any
proceeding in respect of which indemnity has been sought hereunder against the
Borrower, the Indemnitee may elect, by written notice to the Borrower, to
withdraw its request for indemnity and thereafter the defense of such proceeding
shall be maintained by counsel of the Indemnitee's choosing and at the
Indemnitee's expense.
(iv) To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding provisions may be unenforceable because it
is violative of any law or public policy, the Borrower shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under Applicable Law. All Indemnified
Liabilities shall be payable on demand.
(c) The obligations of the Borrower under this Section 8.3 shall
survive the termination of this Agreement and the discharge of the Borrower's
other obligations hereunder and the other Loan Documents.
Draft -- February 17, 1999
<PAGE>
SECTION 7.4 Amendments and Waivers. Neither this Agreement nor any
provision hereof may be amended, modified, waived or supplemented except by an
instrument in writing signed by the Borrower and the Lenders.
SECTION 7.5 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement without the prior
written consent of the Lenders.
SECTION 7.6 GOVERNING LAW; VENUE AND JURISDICTION. THE VALIDITY OF THIS
AGREEMENT, THE CONSTRUCTION, INTERPRETATION AND ENFORCEMENT HEREOF AND THE
RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES THEREOF. THE BORROWER AGREES THAT
ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND EACH
OTHER "LOAN DOCUMENT" SHALL BE TRIED AND LITIGATED IN FEDERAL OR, IN THE ABSENCE
OF FEDERAL SUBJECT MATTER JURISDICTION, STATE COURTS LOCATED IN THE COUNTY OF
NEW YORK, STATE OF NEW YORK, UNLESS SUCH ACTIONS OR PROCEEDINGS ARE REQUIRED TO
BE BROUGHT IN ANOTHER COURT TO OBTAIN SUBJECT MATTER JURISDICTION OVER THE
MATTER IN CONTROVERSY. EACH OF THE BORROWER AND THE LENDER WAIVES, TO THE
FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO ASSERT
BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE THE DOCTRINE OF FORUM NON CONVENIENS
OR TO OBJECT TO VENUE IN ANY PROCEEDING BROUGHT IN ACCORDANCE WITH THE
IMMEDIATELY PRECEDING SENTENCE. SERVICE OF PROCESS, SUFFICIENT FOR PERSONAL
JURISDICTION IN ANY ACTION AGAINST THE BORROWER, MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS ADDRESS INDICATED IN SECTION
7.1.
SECTION 7.7 WAIVER OF JURY TRIAL. EACH OF THE LENDERS AND THE BORROWER
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL OR
EQUITABLE ACTION, SUIT OR PRO CEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE OTHER "LOAN DOCUMENTS" OR ANY TRANSACTION CONTEMPLATED
Draft -- February 17, 1999
<PAGE>
HEREBY OR THEREBY OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THERE UNDER.
SECTION 7.8 Limitation on Interest. Each provision in this Agreement
and each other Loan Document is expressly limited so that in no event whatsoever
shall the amount paid, or otherwise agreed to be paid, by the Borrower for the
use, forbearance or detention of the proceeds of the Loans under this Agreement
or any other Loan Document or otherwise (including any sums paid as required by
any covenant or obligation contained herein or in any other Loan Document which
are for the use, forbearance or detention of such money), exceed that amount of
money which would cause the effective rate of interest to exceed the highest
lawful rate permitted by applicable law (the "Highest Lawful Rate"), and all
amounts owed under this Agreement and each other Loan Document shall be held to
be subject to reduction to the effect that such amounts so paid or agreed to be
paid which are for the use, forbearance or detention of money under this
Agreement or such Loan Document shall in no event exceed that amount of money
which would cause the effective rate of interest to exceed the Highest Lawful
Rate. Notwithstanding any provision in this Agreement or any other Loan Document
to the contrary, if the maturity of the Loans or the Notes are accelerated for
any reason, or in the event of any prepayment of all or any portion of the Loan
or the Notes by the Borrower or in any other event, earned interest on the Loans
or the Notes may never exceed the Highest Lawful Rate, and any unearned interest
otherwise payable under the Notes that is in excess of the Highest Lawful Rate
shall be canceled automatically as of the date of such acceleration or
prepayment or other such event and, if theretofore paid, shall, at the option of
the holder of the Notes, be either refunded to the Borrower or credited to the
principal of the Notes. In determining whether or not the interest paid or
payable, under any specific contingency, exceeds the Highest Lawful Rate, the
Borrower and the Lenders shall, to the maximum extent permitted by Applicable
Law, amortize, prorate, allocate and spread, in equal parts during the period of
the actual term of this Agreement, all interest at any time contracted for,
charged, received or reserved in connection with this Agreement.
SECTION 7.9 Severability. Any provision of this Agreement which is
illegal, invalid, prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such illegality, invalidity,
prohibition or unenforceability without invalidating or impairing the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
SECTION 7.10 Counterparts; Integration; Section Headings. This Agree
ment may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same
Draft -- February 17, 1999
<PAGE>
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as otherwise indicated, references herein to any "Section" means a "Section" of
this Agreement, and the table of contents and section headings in this Agreement
are for purposes of reference only and shall not limit or define the meaning
hereof.
SECTION 7.11 Confidentiality of Information. The Lenders agree (for
themselves as Lenders hereunder and in their capacity as collateral agent or
pledgee under any other Loan Document and for any assignee of the Lenders'
rights hereunder or under any other Loan Documents) that any information
concerning the Borrower or any of its Subsidiaries furnished to the Lenders
(including the capacity of Greenwich Street Capital Partners II, L.P. as
collateral agent or pledgee under any other Loan Documents) by or on behalf of
the Borrower or any of its Subsidiaries pursuant to the terms of this Agreement
or any other Loan Document will be kept strictly confidential; provided that the
foregoing shall not apply to information which (i) is already in possession of
the Lenders, if such information is not known to the Lenders to be subject to
another confidentiality agreement with or another obligation of secrecy to the
Borrower, any of its Subsidiaries or another Person, (ii) is or becomes
generally available to the public other than as a result of a disclosure by the
Lenders or any of their directors, officers, employees, agents, representatives
or advisers, (iii) becomes available to the Lenders on a non-confidential basis
from a source other than the Borrower or any of its Subsidiaries or their
respective directors, officers, employees, agents, representatives or advisers,
if such source is not known by the Lenders to be bound by a confidentiality
agreement with or other obligation of secrecy to the Borrower or any of their
Subsidiaries, or another Person, or (iv) is disclosed to a prospective assignee
of the Lenders in connection with the transfer or assignment of the Loans or any
rights of the Lenders under the Loan Documents, provided that such prospective
transferee agree in advance to keep such information strictly confidential in
accordance with the provisions of this Section 8.11. Notwithstanding the
foregoing, the Borrower acknowledges that the Lenders may be required to
disclose such information or portions thereof, and if so required, will disclose
such information (A) at the request of governmental or self-regulatory agencies
or other authorities, (B) pursuant to subpoena or other court process, (C) to
its independent auditors or (D) otherwise as required by law; provided that if
the Lenders are requested or required to disclose any such information to
governmental or self-regulatory agencies or other authorities, pursuant to
subpoena or other court process or otherwise as required by law, the Lenders
shall, if and to the extent reasonably practicable, provide the Borrower with
prompt notice of such request or requirement, so that the Borrower may seek an
appropriate protective order or other relief from such request or requirement.
Draft -- February 17, 1999
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
IMC MORTGAGE COMPANY
By
------------------------
Name:
Title:
GREENWICH STREET CAPITAL PARTNERS II, L.P.
GSCP OFFSHORE FUND, L.P.
GREENWICH FUND, L.P.
GREENWICH STREET EMPLOYEES FUND, L.P.
TRV EXECUTIVE FUND, L.P.
By: GREENWICH STREET
INVESTMENTS II, L.L.C.,
their General Partner
By:
------------------------
Name:
Title: Managing Member
Draft -- February 17, 1999
<PAGE>
Schedule 1.01(a)
Commitment Percentage
Lender Percentage
- ------ ----------
Greenwich Street Capital Partners II, L.P. 89.434%
Greenwich Fund, L.P. 3.0295%
GSCP Offshore Fund, L.P. 1.8645%
Greenwich Street Employees Fund, L.P. 5.2312%
TRV Executive Fund, L.P. 0.4408%
Draft -- February 17, 1999
<PAGE>
Schedule 3.1(h)
Consents Required
Master Repurchase Agreement, dated as of March 29, 1996, as amended from time to
time, by and among Bear Stearns Home Equity Trust and the Borrower and certain
of the Borrower's Subsidiaries.
Master Repurchase Agreement, dated as of May 1, 1997, between Bear, Stearns
International Limited and Industry Mortgage Company, L.P.
Institutional Account Agreement, dated October 23, 1996, between and among
Industry Mortgage Company, L.P. and Bear Stearns.
Loan and Security Agreement, dated March 17, 1998, by and among IMC Mortgage
Company, IMC Corporation of America, ACG Financial Services (IMC), Inc.,
American Mortgage Reduction, Inc., Central Money Mortgage Co. (IMC), Inc.,
Corewest Banc, Equity Mortgage Co., (IMC), Inc., Mortgage America (IMC), Inc.,
National Lending Center, Inc., National Lending Center TILT, Inc, and
Residential Mortgage Corporation (IMC), Inc., as borrowers, and German American
Capital Corporation, as lender.
Loan and Security Agreement, dated March 17, 1998, by and among IMC Mortgage
Company, IMC Corporation of America, ACG Financial Services (IMC), Inc.,
American Mortgage Reduction, Inc., Central Money Mortgage Co. (IMC), Inc.,
Corewest Banc, Equity Mortgage Co., (IMC), Inc., Mortgage America (IMC), Inc.,
National Lending Center, Inc., National Lending Center TILT, Inc, and
Residential Mortgage Corporation (IMC), Inc., as borrowers, and Aspen Funding
Corp., as lender
Loan and Security Agreement, dated as of February 28, 1997, between IMC Mortgage
Company, IMC Corporation of America, ACG Financial Services (IMC), Inc.,
American Mortgage Reduction, Inc., Industry Mortgage Company, L.P., Corewest
Banc, IMC Investment Corp., and IMC Investment Limited Partnership, as
borrowers, and Paine Webber Real Estate Securities, Inc., as lender.
Bridge Loan and Security Agreement, dated as of October 10, 1997, as amended
from time to time, between the Borrower, certain of its Subsidiaries and
BankBoston, N.A.
Loan and Security Agreement, dated March 18, 1994, as amended from time to time,
by
Draft -- February 17, 1999
<PAGE>
Schedule 3.1(h)
and among the Borrower, certain of its Subsidiaries and Bank Boston, N.A.
Draft -- February 17, 1999
AMENDMENT NO. 1 TO LOAN AGREEMENT
Amendment No. 1 (this "Amendment"), dated as of February 11, 1999, to
the Loan Agreement (the "Loan Agreement"), dated as of October 12, 1998, among
IMC MORTGAGE COMPANY, a Delaware corporation (the "Borrower"), and GREENWICH
STREET CAPITAL PARTNERS II, L.P., a Delaware limited partnership ("GSCP"),
GREENWICH FUND, L.P., a Delaware limited partnership, and GSCP OFFSHORE FUND,
L.P., a Cayman Islands exempted limited partnership, (each, a "Lender", and
collectively, the "Lenders"). Capitalized terms used in this Amendment without
definition shall have the meaning assigned thereto in the Loan Agreement.
RECITALS
A. The Borrower and the Lenders have entered into the Loan Agreement,
pursuant to which the Lenders have agreed to extend to the Borrower Commitments
to loan, in the aggregate, $33,000,000, subject to the terms and conditions set
forth in the Loan Agreement (the "Initial Loans"), which Initial Loans are
evidenced by the Initial Notes (as defined herein) and entitled to the benefit
of certain guarantees and security provided under certain of the other Loan
Documents.
B. The Borrower is contemplating entering into an Agreement and Plan of
Merger (the "Merger Agreement") by and among GSCP, the Borrower, IMC 1999
Acquisition Co., Inc., a Delaware corporation and a wholly owned subsidiary of
GSCP and its affiliates ("Acquisition"), pursuant to which Acquisition would be
merged with and into the Borrower and GSCP and its affiliates would be issued
common stock of the surviving corporation representing approximately 93.5% of
the outstanding common stock of the surviving corporation (the "Merger").
C. The Lenders and the Borrower desire to enter into this Amendment,
providing for the Lenders to extend to the Borrower additional Commitments to
loan in the aggregate an additional $5,000,000 (the "Interim Loans"), which
Interim Loans are to be evidenced by the Interim Notes (as defined herein) and
entitled to the benefit of certain guarantees and security provided under
certain of the other Loan Documents.
The Borrower and the Lenders hereby agree to amend the Loan Agreement
as follows:
<PAGE>
1. Amendment to Section 1.1. (i) Section 1.1 is hereby amended by
deleting therefrom each of the defined terms set forth below and replacing it in
its entirety with its corresponding defined terms as follows:
"Aggregate Commitment Amount" shall mean $38,000,000.
"BankBoston Forbearance Agreement" means the Forbearance and
Intercreditor Agreement, dated as of October 12, 1998, among the Borrower,
the Lenders and BankBoston, N.A., as the same may from time to time be
further amended, modified or supplemented.
"Commitment Period" shall mean the period beginning on the Closing
Date and ending on the first to occur of (i) the consummation of the Merger
and (ii) the termination of the Standstill Period.
"Intercreditor Agreements" shall mean the separate Intercreditor
Agreements, dated as of October 12, 1998, among the Borrower, the Lenders
and each of the Existing Creditors, as the same may from time to time be
further amended, modified or supplemented.
"Note" shall mean any Initial Note or any Interim Note.
(ii) Section 1.1 is further amended by adding the following definitions
thereto in alphabetical order:
"Initial Loan" has the meaning given in the recitals to Amendment No.
1 hereto.
"Interim Loan" has the meaning given in the recitals to Amendment No.
1 hereto
"Initial Note" shall mean any promissory note of the Borrower in the
form of Exhibit A hereto, evidencing any Initial Loan, as the same may from
time to time be amended, modified or supplemented.
"Interim Note" shall mean any promissory note of the Borrower in the
form of Exhibit 1 to Amendment No. 1 hereto, evidencing an Interim Loan, as
the same may from time to time be amended, modified or supplemented.
"Merger" has the meaning set forth in the recitals to Amendment No. 1
hereto.
"Standstill Period" means the Standstill Period as defined in any
Intercreditor Agreement or the BankBoston Forbearance Agreement.
<PAGE>
2. Amendment to Section 2.2. Section 2.2 is hereby amended by deleting it
in its entirety and replacing it with the following:
SECTION 2.2 The Notes; Repayment of Principal. The obligation of the
Borrower to repay the unpaid principal amount of the Loans shall be
evidenced by the Notes, payable to the Lenders and their registered
assigns, duly executed and delivered by the Borrower to the Lenders and
bearing interest, maturing and subject to optional and mandatory prepayment
as provided herein. The Initial Loans, together with all accrued interest
thereon, matured and became due and payable on January 10, 1999. The
Interim Loans, together with all accrued interest thereon, are due and
payable on demand, subject to Section 2.5 and 2.6 hereof.
3. Governing Law. This Amendment shall be governed by the laws of the
State of New York (regardless of the laws that might otherwise govern under
applicable principles of conflicts of law) as to all matters, including, but not
limited to, matters of validity, construction, effect, performance and remedies.
4. Full Force and Effect. Except as expressly provided in this
Amendment, the Loan Agreement shall continue in full force and effect in
accordance with the provisions thereof.
5. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date first above written.
IMC MORTGAGE COMPANY
By /s/
--------------------------------------
Name:
Title:
GREENWICH STREET CAPITAL PARTNERS II, L.P.
GSCP OFFSHORE FUND, L.P.
GREENWICH FUND, L.P.
By: GREENWICH STREET
INVESTMENTS II, L.L.C.,
their General Partner
By: /s/
------------------------------
Name:
Title: Managing Member
AMENDMENT AGREEMENT NO. 1
Amendment Agreement No. 1 (this "Agreement"), dated as of February 11,
1999, amending each of (i) the Borrower Security Agreement (the "Borrower
Security Agreement"), dated as of October 12, 1998, among IMC MORTGAGE COMPANY,
a Delaware corporation (the "Borrower"), and GREENWICH STREET CAPITAL PARTNERS
II, L.P., a Delaware limited partnership ("GSCP"), GREENWICH FUND, L.P., a
Delaware limited partnership, and GSCP OFFSHORE FUND, L.P., a Cayman Islands
exempted limited partnership, (each, a "Lender", and collectively, the
"Lenders"), and GSCP, as Collateral Agent (the "Collateral Agent"); (ii) the
Subsidiary Security Agreement, dated as of October 12, 1998 (the "Subsidiary
Security Agreement"), among the undersigned subsidiaries of the Borrower party
thereto (the "Subsidiary Grantors"), the Lenders and the Collateral Agent; (iii)
the Guarantee Agreement, dated as of October 12, 1998 (the "Guarantee
Agreement"), among the undersigned subsidiaries of the Borrower party thereto
(the "Subsidiary Guarantors") and the Lenders; and (iv) the Pledge Agreement,
dated as of October 12, 1998 (the "Pledge Agreement", and, collectively with the
Borrower Security Agreement, the Subsidiary Security Agreement and the Guarantee
Agreement, the "Subject Agreements"), among the Borrower, the Lenders and the
Collateral Agent.
RECITALS
A. The Borrower entered into a Loan Agreement, dated as of October 1
(the "Initial Loan Agreement"), among the Borrower and the Lenders, pursuant to
which the Lenders have agreed to extend to the Borrower Commitments to loan, in
the aggregate, $33,000,000, subject to the terms and conditions set forth in the
Initial Loan Agreement (the "Initial Loans").
B. In order to induce the Lenders to enter into the Initial Loan
Agreement and to extend the Initial Loans, the Borrower, the Subsidiary Grantors
and the Subsidiary Guarantors agreed to enter into each of the Subject
Agreements to which they are party.
C. The Borrower is contemplating entering into an Agreement and Plan of
Merger (the "Merger Agreement"), by and among GSCP, the Borrower, IMC 1999
Acquisition Co., Inc., a Delaware corporation and a wholly owned subsidiary of
GSCP and its affiliates ("Acquisition"), pursuant to which Acquisition would be
merged with
<PAGE>
and into the Borrower and GSCP and its affiliates would be issued common stock
of the surviving corporation representing approximately 93.5% of the outstanding
common stock of the surviving corporation (the "Merger").
D. The Lenders and the Borrower desire to enter into Amendment No.1
(the "Amendment") to the Initial Loan Agreement (as so amended, and as the same
may be modified, supplemented or restated from time to time, the "Loan
Agreement"), providing for the Lenders to extend to the Borrower additional
Commitments to loan in the aggregate an additional $5,000,000 (the "Interim
Loans"), which Interim Loans are to be evidenced by the Interim Notes (as
defined in the Amendment) and entitled to the benefit of certain guarantees and
security provided under certain of the other Loan Documents (as defined in the
Loan Agreement").
The Borrower, the Subsidiary Guarantors, the Subsidiary Grantors, the
Collateral Agent, and the Lenders hereby agree to amend the Subject Agreements
as follows:
1. Amendment to the Subject Agreements. Each reference in the Subject
Agreements to the Loan Agreement, the Loans and the Notes shall refer to such
terms as defined in the Loan Agreement as amended by the Amendment.
2. Governing Law. This Agreement shall be governed by the laws of the
State of New York (regardless of the laws that might otherwise govern under
applicable principles of conflicts of law) as to all matters, including, but not
limited to, matters of validity, construction, effect, performance and remedies.
3. Full Force and Effect. Except as expressly provided in this
Agreement, each of the Subject Agreements shall continue in full force and
effect in accordance with the provisions thereof.
4. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
IMC MORTGAGE COMPANY
IMC CORPORATION OF AMERICA
IMC CREDIT CARD, INC.
IMC MORTGAGE COMPANY CANADA, LTD.
AMERICAN HOME EQUITY CORPORATION
IMC INVESTMENT CORPORATION
IMC INVESTMENT LIMITED PARTNERSHIP
ACG FINANCIAL SERVICES (IMC), INC.
AMERICAN MORTGAGE REDUCTION, INC.
CENTRAL MONEY MORTGAGE CO. (IMC), INC.
COREWEST BANC
EQUITY MORTGAGE CO. (IMC), INC.
IMCC INTERNATIONAL, INC.
MORTGAGE AMERICA (IMC), INC.
NATIONAL LENDING CENTER, INC.
NATIONAL LENDING CENTER TILT, INC.
NATIONAL LENDING GROUP, INC.
RESIDENTIAL MORTGAGE CORPORATION (IMC), INC.
By /s/
--------------------------
Name:
Title:
GREENWICH STREET CAPITAL PARTNERS II, L.P.
GSCP OFFSHORE FUND, L.P.
GREENWICH FUND, L.P.
By: GREENWICH STREET
INVESTMENTS II, L.L.C.,
their General Partner
By: /s/
--------------------------
Name:
Title:
<PAGE>
GREENWICH STREET CAPITAL PARTNERS II, L.P.,
as Collateral Agent
By: GREENWICH STREET
INVESTMENTS II, L.L.C.,
its General Partner
By: /s/
-----------------------------------
Name:
Title:
AMENDED AND RESTATED INTERCREDITOR AGREEMENT
(Bear Stearns)
AMENDED AND RESTATED INTERCREDITOR AGREEMENT, dated as of February 17,
1999, between IMC MORTGAGE COMPANY, a Florida corporation (the "Company"),
GREENWICH STREET CAPITAL PARTNERS II, L.P., a Delaware limited partnership,
GREENWICH FUND, L.P., a Delaware limited partnership, GSCP OFFSHORE FUND, L.P.,
a Cayman Islands exempted limited partnership (each a "Facility Lender" and
collectively, the "Facility Lenders"), and BEAR STEARNS HOME EQUITY TRUST
("BSTrust"), BEAR, STEARNS INTERNATIONAL LIMITED ("BSIL"), and any of their
affiliates which are or become party to the Institutional Account Agreement (as
hereinafter defined). BSTrust, BSIL and any such affiliates are referred to
herein collectively as "Bear Stearns". Capitalized terms used in this Agreement
without definition have the meanings given to them in the Loan Agreement (as
hereinafter defined) as such terms are defined in the Loan Agreement on the date
hereof (or as amended by any amendment thereto approved by Bear Stearns).
RECITALS
A. The Company has entered into a Loan Agreement, dated as of October
12, 1998 the "Initial Loan Agreement"), between the Company, as borrower, and
the Facility Lenders, pursuant to which the Facility Lenders have agreed to
extend to the Company Commitments to loan, in the aggregate, $33,000,000 (the
"Initial Loans"), subject to the terms and conditions set forth in the Initial
Loan Agreement, which Initial Loans are evidenced by the Notes (as defined in
the Initial Loan Agreement) and entitled to the benefit of certain guarantees
and security provided under certain of the other Loan Documents (as defined in
the Initial Loan Agreement).
B. Pursuant to (a) a Master Repurchase Agreement, dated as of March 29,
1996, as amended from time to time, by and among BSTrust, the Company and
certain of the Company's Subsidiaries (the "Whole Loan Repurchase Agreement"),
and other related agreements with BSTrust (collectively with the Whole Loan
Repurchase Agreement, the "Whole Loan Repurchase Documents"); (b) the Master
Repurchase Agreement, dated as of May 1, 1997, as amended from time to time
(together with annexes, confirmations and transactions thereunder, collectively
the "Residuals Repurchase Agreement") between BSIL and Industry Mortgage
Company, L.P., the predecessor to the Company ("IMCLP"); and (c) the
Institutional Account Agreement,
<PAGE>
dated October 23, 1996, as amended from to time, between and among IMCLP and
Bear Stearns (the "Institutional Account Agreement"; and together with the Whole
Loan Repurchase Agreement, the Whole Loan Repurchase Documents and the Residuals
Repurchase Agreement, collectively, the "Existing Agreements"), BSTrust and BSIL
have entered into transactions with the Company from time to time, pursuant to
which the Company has sold mortgage loans to BSTrust and securities to BSIL, in
each case subject to an obligation to repurchase such assets and for other
purposes provided therein; and the Company and certain of its Subsidiaries have
granted to BSTrust and BSIL a security interest in the Collateral (as
hereinafter defined) in order to secure the respective obligations of the
Company and the Subsidiaries under the Existing Agreements (the "Existing
Obligations").
C. The Company intends to enter into an Agreement and Plan of Merger
(the "Merger Agreement"), dated as of February __, 1999, by and among Greenwich
Street Capital Partners II, L.P., a Delaware limited partnership ("GSCP"), the
Company, IMC 1999 Acquisition Co., Inc., a Delaware corporation and a wholly
owned subsidiary of GSCP and its affiliates ("Acquisition"), pursuant to which
Acquisition would be merged with and into the Company and GSCP and its
affiliates would be issued common stock of the surviving corporation
representing approximately 93.5% of the outstanding common stock of the
surviving corporation (the "Merger").
D. In connection with the Merger Agreement, the Facility Lenders have
or intend to enter into (i) Amendment No. 1 to the Initial Loan Agreement
("Amendment No. 1"), providing for the Facility Lenders to extend to the Company
additional Commitments (the "Interim Commitments") to loan in the aggregate not
less than an additional $5,000,000 (the "Interim Loans") and (ii) an agreement
with Acquisition, dated as of February__, 1999, obligating the Facility Lenders,
upon consummation of the Merger, to enter into an amendment to the Initial Loan
Agreement, as amended (the "Amendment"), pursuant to which the Facility Lenders
will agree to extend to the Company Commitments to loan, in the aggregate, an
amount which, together with the Interim Commitments, will equal an additional
$40,000,000 (the "Additional Loans" and, together with the Initial Loans and the
Interim Loans, the "Loans"), subject to the terms and conditions set forth in
the Initial Loan Agreement, as amended by Amendment No. 1 and the Amendment (as
the same may be further modified, supplemented or restated from time to time,
the "Loan Agreement"), which Loans are evidenced by the Notes (as defined in the
Loan Agreement) and entitled to the benefit of certain guarantees and security
provided under certain of the other Loan Documents (as defined in the Loan
Agreement).
E. The Company, the Facility Lenders and Bear Stearns have previously
<PAGE>
entered into an Intercreditor Agreement, dated as of October 12, 1998 (the
"Original Intercreditor Agreement"). In order to induce the Facility Lenders to
enter into the Amendment and GSCP to enter into the Merger Agreement, the
Facility Lenders, the Company, and Bear Stearns have agreed to enter into this
agreement amending and restating the Original Intercreditor Agreement (as so
amended and restated, the "Intercreditor Agreement").
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company, Bear Stearns and the
Facility Lenders agree to amend and restate the Original Intercreditor Agreement
to read in its entirety as follows:
Section 1. Standstill. (a) Each of the Facility Lenders and Bear
Stearns agrees, subject to the terms of this Agreement, that for the Standstill
Period, it shall not:
(i) file or join in the filing of any involuntary petition in
bankruptcy with respect to the Company or its Subsidiaries, or initiate or
participate in any similar proceedings for the benefit of creditors,
including any proceeding for the appointment of a trustee, receiver,
conservator or liquidator of the Company or its Subsidiaries or any portion
of its assets;
(ii) seek to collect or enforce by litigation or otherwise, any
repurchase or payment obligations under the Existing Agreements or the Loan
Documents; provided that nothing in this Section 1 shall prohibit the
Facility Lenders from exercising their Exchange Option;
(iii) make any Margin Calls or other demands for payment in respect
of, or additional collateral to secure, the Existing Obligations; provided,
however, that this clause shall not adversely affect the right of Bear
Stearns to take any actions to preserve, protect or perfect its liens in
the Collateral;
(iv) declare a default or event of default under, or exercise or
enforce any right or remedy under, or accelerate the maturity of any
Existing Obligation or Loan under, any Existing Agreement or Loan Document;
or
(v) seek to attach, sequester or otherwise proceed against any of the
Collateral.
<PAGE>
(b) The Standstill Period may be terminated by Bear Stearns or the Facility
Lenders by written notice to the Company and each other Creditor upon the
occurrence of any of the following:
(i) a failure by the Company under the Existing Agreements to make to
Bear Stearns any scheduled payment of interest, which failure continues
unremedied for two days, or any payment of principal due in respect of
payoffs or prepayments of mortgage loans comprising any portion of the
Collateral consisting of Purchased Loans or any payment of principal due
pursuant to Section 5 hereof;
(ii) any intentional fraud or misrepresentation by the Company;
(iii) immediately upon a failure of the Facility Lenders to make (x)
an Advance (as defined in the Initial Loan Agreement) under the Initial
Loan Agreement following a request of the Company thereunder, (y) an
Interim Loan under the Initial Loan Agreement as amended by Amendment No. 1
following a request by the Company thereunder or (z) immediately upon
consummation of the Merger, the Additional Loans under the Loan Agreement;
(iv) immediately in the event any Other Existing Lender takes any of
the actions described in Section 1(a) of its Other Intercreditor Agreement,
or, in the case of Bear Stearns, immediately in the event any Facility
Lender takes any of the actions described in Section 1(a) of this
Agreement, or, in the case of the Facility Lenders, immediately in the
event Bear Stearns takes any of the actions described in Section 1(a) of
this Agreement, in each case whether or not it shall have given notice of
termination of the Standstill Period;
(v) the condition contained in subclause (y) of clause (i) of the
definition of "Standstill Period" to the extension of the Standstill Period
beyond the date which is 150 days from and after the date hereof shall not
have been satisfied on or before such date;
(vi) a Change of Control or payment of the Take-Out Premium;
(vii) an event shall occur and be continuing for a period of ten
Business Days which permits any holder of indebtedness for borrowed money
of the Company or any Subsidiary outstanding (other than any Creditor) to
<PAGE>
accelerate the maturity of such indebtedness or exercise remedies with
respect to property of the Company or any Subsidiary, without such
indebtedness being paid or the rights of such holder to take such action
being waived, stayed or subjected to a standstill or other agreement of
such holder to forbear from exercising remedies, reasonably satisfactory to
the Creditors;
(viii) the Company shall not have entered into the Merger Agreement
and Amendment No. 1 on or before February 19, 1999;
(ix) the independent servicer described in Section 5(g) of this
Agreement shall not have been retained on or before the date which is 30
days after the date of consummation of the Merger; and
(x) the Company shall, at any time on or after the date of
consummation of the Merger, repay all or any portion of the Loans.
(c) The Standstill Period shall terminate automatically without notice or
other action by any Creditor upon the occurrence of any of the following:
(i) the Company or any Subsidiary shall consent to the appoint ment of
or taking possession by a receiver, assignee, custodian, sequestrator,
trustee or liquidator (or other similar official) of itself or of a
substantial part of its property; or the Company or any Subsidiary shall
admit in writing (to any creditor, governmental authority or judicial court
or tribunal) its inability to pay its debts generally as they come due or
shall fail generally to pay its debts as they become due, or shall make a
general assignment for the benefit of its creditors; or the Company or any
Subsidiary shall file a voluntary petition in bankruptcy or a volun tary
petition or answer seeking liquidation, reorganization or other relief with
respect to itself or its debts under the Federal bankruptcy laws, as now or
hereafter constituted or any other applicable Federal or State bankruptcy,
insolvency or other similar law, or shall consent to the entry of an order
for relief in an involun tary case under any such law; or the Company or
any Subsidiary shall file an answer admitting the material allegations of a
petition filed against the Company in any such proceeding, or otherwise
seek relief under the provisions of any existing or future Federal or State
bankruptcy, insolvency or other similar law providing for the
reorganization or winding-up of corporations, or providing for an
arrangement, agreement, composition, extension or adjustment
<PAGE>
with its creditors; or the Company or any Subsidiary shall take or publicly
announce its intention to take corporate action in furtherance of any of
the foregoing; or
(ii) an order, judgment or decree shall be entered in any
proceeding by any court of competent jurisdiction appointing, without the
consent of the Company, a receiver, trustee or liquidator of the Company
or any Subsidiary or of any substantial part of its property, or any
substantial part of the property of the Company or any Subsidiary shall be
sequestered, and any such order, judgment or decree of appointment or
sequestration shall remain in force undismissed, unstayed or unvacated for
a period of 30 days after the date of entry thereof; or
(iii) an involuntary petition against the Company or any
Subsidiary in a proceeding under the Federal bankruptcy laws or other
insolvency laws, as now or hereafter in effect, shall be filed and shall
not be withdrawn or dismissed within 30 days thereafter, or a decree or
order for relief in respect of the Company or any Subsidiary shall be
entered by a court of competent jurisdiction in an involuntary case under
the Federal bankruptcy laws, as now or hereafter constituted, or, under
the provisions of any law providing for reorganization or winding-up of
corporations which may apply to the Company, any court of com petent
jurisdiction shall assume jurisdiction, custody or control of the Company
or any Subsidiary or of any substantial part of its property and such
jurisdiction, custody or control shall remain in force unrelinquished,
unstayed or unterminated for a period of 30 days.
Section 2. Grant of Security Interest. (a) In order to secure full
and timely payment of the Obligations under the Loan Agreement, and to secure
the performance of all of the other obligations of the Company under the Loan
Documents, the Company and each Subsidiary hereby mortgages, pledges and assigns
and transfers to the Facility Lenders, and grants to the Facility Lenders, a
continuing perfected security interest in, and a lien in the Collateral. The
Facility Lenders agree to release their lien in respect of any whole loan
mortgage, which is sold by the Company to Bear Stearns for a purchase price not
less than the advance rate in respect of such mortgage.
(b) The Facility Lenders agree for the benefit of Bear Stearns that
during the continuance of the Standstill Period and thereafter until the earlier
of (i) the satisfaction of the Existing Obligations in full, (ii) the exercise
by Bear Stearns of any right to attach, sequester, foreclose or otherwise
exercise remedies with respect to the Collateral, and (iii) 180 days after the
expiration or earlier termination of the Standstill Period, the Facility Lenders
will not seek to attach, sequester, foreclose, levy on or otherwise exercise
remedies with respect to the
<PAGE>
Collateral, provided that nothing herein shall restrict the Facility Lenders
from commencing suit on its Notes or for payment of its Loan or enforcement of
any other obligation owing to it under the Loan Documents.
Section 3. Acknowledgment and Priorities. (a) Bear Stearns hereby
acknowledges and consents to the entrance by the Company into the Loan Documents
and the granting of the lien in the Collateral granted pursuant to Section 2;
provided, however, notwithstanding anything to the contrary contained in the
Loan Agreement, the Notes or any of the Loan Documents, the parties hereto
acknowledge and agree that any security interest in or other rights with respect
to any Collateral granted to secure the Existing Obligations under the Existing
Agreements or otherwise has and shall have priority over any security interest
in such Collateral granted pursuant to this Agreement, the Initial Loan
Agreement, the Loan Agreement or the other Loan Documents irrespective of:
(i) the time, order or method of attachment or perfection of the
security interest created by this Agreement, the Initial Loan Agreement,
the Loan Agreement or any Loan Document;
(ii) the time or order of filing or recording of financing
statements or other documents filed or recorded to perfect security
interests in any Collateral;
(iii) anything contained in any filing or agreement to which the
Facility Lenders, the Company or the Collateral Agent under the Security
Documents now or hereafter may be a party, and
(iv) the rules for determining priority under the U.C.C. or other
laws governing the relative priorities of secured creditors.
(b) Bear Stearns hereby agrees that, following payment in full of
all the Existing Obligations hereunder, any Collateral, including any books and
records (including, without limitation, computer files, printouts and other
computer materials and records) relating to the Collateral, as well as all
proceeds and products of such Collateral, held by it shall be held for the
benefit of the Facility Lenders, provided that if such Collateral is then
subject to the prior lien of another creditor, Bear Stearns may hold it for
<PAGE>
the benefit of such other creditor and the Facility Lenders as their interests
may appear. If Bear Stearns has elected not to hold such Collateral following
payment in full of the Existing Obligations, it shall promptly forward any
Collateral, including any books and records (including, without limitation,
computer files, printouts and other computer materials and records) relating to
the Collateral, as well as all proceeds and products of such Collateral, to the
Collateral Agent, provided that if such Collateral is then subject to the prior
lien of another creditor, Bear Stearns may forward such Collateral, proceeds and
products thereof to such other creditor or, in the event of a dispute, to such
party as a court of competent jurisdiction may direct.
(c) Nothing contained in this Agreement shall alter or impair Bear
Stearns' rights under the Existing Agreements from and after the termination of
the Standstill Period in accordance herewith or be interpreted to mean that Bear
Stearns has any obligation under the Existing Agreements or otherwise to return
any proceeds received on a sale or deemed sale of any Purchased MBS or Purchased
Loan to the Company or any Subsidiary, except as expressly set forth herein.
Section 4. Reserved Rights. (a) Notwithstanding anything in this
Agreement to the contrary, the Company and the Facility Lenders agree that this
Agreement shall in no manner impair any right of Bear Stearns under the Existing
Agreements to enforce any condition precedent to any obligation it may have
thereunder to engage in future Repurchase Transactions with the Company and its
Subsidiaries, nor shall this Agreement limit the right of Bear Stearns to make
Margin Calls in respect of the hedging transactions with respect to U.S.
treasury securities that the Company may have entered into with Bear Stearns
outside of the Existing Agreements. All rights and obligations of Bear Stearns
under the Existing Agreements to enter into Repurchase Transactions or not shall
not be affected by this Agreement.
(b) In addition and notwithstanding anything to the contrary
contained herein, this Agreement shall not (i) apply to any Advances made from
and after the date hereof, or any other obligation of the Company or any of its
Subsidiaries to Bear Stearns or any of its Affiliates incurred from and after
the date hereof or (ii) limit the rights of Bear Stearns or any Affiliate
thereof (x) to receive principal and/or interest at the applicable mortgage rate
on mortgage loans purchased by Bear Stearns or any such Affiliate from the
Company or any of its Subsidiaries or (y) to sell mortgage loans to the Company
or any of its Subsidiaries.
Section 5. Fees; Amortization. (a) From and after the date this
Agreement becomes effective, (i) within five days following the effective date
hereof, in
<PAGE>
the case of any Available Cash Flow from Securitization Receivables received
prior to the effective date hereof for January and February 1999 and (ii) within
five days following receipt by Bear Stearns each month of Available Cash Flow
from Securitization Receivables, Bear Stearns shall apply the Applicable
Percentage of such Available Cash Flow from Securitization Receivables to
partial payment of the Existing Obligations under the Residuals Repurchase
Agreement and shall remit the balance of such Available Cash Flow from
Securitization Receivables to the Company, which may use such funds for general
corporate purposes.
(b) Upon consummation of the first to occur of (i) the Merger or (ii) a
Change in Control, the Company shall pay Bear Stearns a fee of $1,000,000 in the
aggregate payable in immediately available funds to such account at such bank as
Bear Stearns may direct.
(c) Upon consummation of the Merger, the Company shall pay $2,500,000
to Bear Stearns for application to payment of the Existing Obligations under the
Residuals Repurchase Agreement (other than the Price Differential accrued
thereon).
(d) The Company shall use its best efforts to sell or otherwise
liquidate each Purchased Loan which as of the date of consummation of the Merger
is a Delinquent Mortgage Loan and shall apply the proceeds thereof to payment of
the Existing Obligations under the Whole Loan Repurchase Documents (other than
to the Price Differential accrued thereon) promptly upon receipt thereof. In the
event more than two-thirds in aggregate principal amount of all such Delinquent
Mortgage Loans remain outstanding and have not been sold or liquidated by
September 30, 1999, the Company shall pay to Bear Stearns for application to the
Existing Obligations under the Whole Loan Repurchase Agreement in respect of a
portion of such Delinquent Mortgage Loans which, together with such Delinquent
Mortgage Loans that are no longer outstanding or have been sold or liquidated by
September 30, 1999, represent one-third of all such Delinquent Mortgage Loans an
amount equal to the Mortgage Loan Differential. In the event any such Delinquent
Mortgage Loan remains outstanding and is not sold or liquidated by December 31,
1999, the Company shall pay to Bear Stearns for application to payment of the
Existing Obligations under the Whole Loan Repurchase Documents an amount equal
to the Mortgage Loan Differential in respect of such Delinquent Mortgage Loan.
(e) Within 15 days following the end of the month in which the Merger
is
<PAGE>
consummated and each month thereafter, the Company shall pay Bear Stearns for
application to the Existing Obligations under the Whole Loan Repurchase
Agreement (other than the Price Differential) an amount equal to the Mortgage
Loan Differential in respect of each Purchased Loan which during such calendar
month and after the date of consummation of the Merger first became, and as of
the last day of such calendar month remained, a Delinquent Mortgage Loan.
(f) The Company shall immediately pay Bear Stearns for application to
the Existing Obligations under the Residuals Repurchase Agreement an amount
equal to the Net Proceeds of Sale of Securitization Receivables sold or
otherwise disposed of by the Company or any Subsidiary. The Company shall not
sell or otherwise dispose of any Purchased MBS without Bear Stearns' consent,
such consent not to be unreasonably withheld or delayed. The parties agree that
it would be reasonable for Bear Stearns to withhold its consent to the sale of
any Purchased MBS if, in its sole discretion, Bear Stearns concludes that such
sale will impair its ability to be paid the Existing Obligations, the selling
price for the Purchased MBS should be higher or the Purchased MBS has not been
adequately marketed.
(g) The Company shall use best efforts to retain the services of a
rated and approved independent servicer with expertise in servicing delinquent
mortgage loans to assist it in servicing Delinquent Mortgage Loans.
(h) Bear Stearns or an affiliate thereof designated by Bear Stearns
shall have the right, subject to the provisions of the following sentence, to
act as co-lead or lead managing underwriter or placement agent with respect to
any and all mortgage-backed or asset-backed securities offerings involving loans
or other financial assets now owned or hereafter acquired or originated by the
Company or any Subsidiary thereof during the Standstill Period, provided that
the right to act as a lead managing underwriter or placement agent may, at the
Company's discretion, be shared equally, in the aggregate as to all such
offerings, among Bear Stearns (or such affiliate) and each other lender which is
then a provider of in excess of $200,000,000 of warehouse financing to the
Company and its Subsidiaries. The right of Bear Stearns (or such affiliate)
pursuant to this Section 5(h) is subject to the condition that Bear Stearns has
outstanding, at any time during the calender quarter in which such offering
occurs, at least $200,000,000 of the Existing Obligations under the Whole Loan
Repurchase Documents or other warehouse facilities and provides residual
financing on market terms on those offerings on which they act as a lead
underwriter or agent. The Company shall
<PAGE>
compensate Bear Stearns for acting as underwriter or agent in accordance with
prevailing market terms at the time of any such offering.
(i) The Company shall, on or prior to the date three months after the
date hereof, pay Bear Stearns for application to the Existing Obligations under
the Whole Loan Repurchase Agreement an amount equal to the purchase price paid
in respect of any Mortgage Loans (other than Delinquent Mortgage Loans) which
Mortgage Loans were outstanding as of October 12, 1998. With respect to each
Mortgage Loan (other than Delinquent Mortgage Loans) purchased under the
Existing Loan Agreements on or after October 12, 1998, the Company shall pay
Bear Stearns for application to the Existing Obligations under the Whole Loan
Repurchase Agreement an amount equal to the purchase price therefor on or prior
to the date which is six months after such purchase was made. The Company may
sell such Mortgage Loans and apply the proceeds thereof to satisfaction of its
obligations pursuant to this Section 5(i), provided that, simultaneously
therewith, the Company repays the related Existing Obligations.
(j) In the event the Company shall fail to pay when due any amount due
to Bear Stearns under this Agreement, Bear Stearns may set off such amount
against Available Cash Flow from Securitization Receivables or payments on
Purchased Loans otherwise payable to the Company hereunder.
Section 6. Conditions Precedent. The effectiveness of this Agreement
shall be subject to the condition that each of the other Existing Lenders listed
on Schedule I (the "Other Existing Lenders") shall have entered into an Other
Intercreditor Agreement in the form annexed hereto. The Company shall furnish
complete and correct copies of each such Other Intercreditor Agreement within
one business day of its execution.
Section 7. Certain Definitions.
"Applicable Percentage" means (i) for January 1999, 46.67%, (ii) for
each calendar month commencing on or after February 1, 1999 to the date of
consummation of the Merger, 70%, (iii) for the first three calendar months
commencing on or after the date of the consummation of the Merger, 70% and (iv)
for the next three calendar months, 75% and (v) for the next six calendar
months, 80%. For purposes of applying the foregoing, if the date of consummation
of the Merger occurs on or before the fifteenth day of a month, the Merger shall
be deemed to have been consummated as of the first day of such month, and if the
date of consummation of the Merger occurs after the fifteenth day of a month,
then the Merger shall be deemed to have been consummated as of the first day of
the succeeding month.
<PAGE>
"Available Cash Flow from Securitization Receivables" means the amount
of each distribution with respect to, and each prepayment of, any Purchased MBS.
"Change of Control" means the occurrence of any of the following events
(other than as a consequence of the issuance of the Preferred Stock to the
Facility Lenders upon exercise of the Exchange Option or the consummation of the
Merger):
(i) any "Person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have "beneficial ownership" of all shares that any such Person
has the right to acquire within one year), directly or indirectly, of more
than 50% of the Voting Stock of the Company; or
(ii) the Company consummates any sale, lease, exchange or other
disposition of all or substantially all of the assets of the Company and
its Subsidiaries, taken as a whole, in any transaction or series of
transactions not in the ordinary course of business; or
(iii) the Company engages in a merger, consolidation or similar
business combination with any third party.
"Collateral" means (i) any rights of the Company in any Eligible Asset
transferred by the Company or its Subsidiaries to Bear Stearns in connection
with either a Repurchase Transaction or in response to a Margin Call; (ii) all
rights of the Company under the Existing Agreements, including the Company's
right to reacquire the Eligible Assets pursuant to the terms of the Existing
Agreements, the contractual right to receive payments, including the right to
payments of principal and interest and the right to enforce such payments,
arising from or under any of the Eligible Assets; (iii) the Company's
contractual right to service Purchased HELs (as defined in the Whole Loan
Repurchase Agreement); (iv) any other right, interest or property of the Company
or any Subsidiary now or hereafter securing the performance by the Company or
any Subsidiary of the Existing Obligations and (v) any and all proceeds,
payments, income, profits and products thereof, and all files and records
relating thereto.
"Common Stock" means the Company's common stock, par value $0.01
<PAGE>
per share.
"Company" means IMC Mortgage Company, a Florida corporation, and any
successor by merger and any entity purchasing all or substantially all of the
assets of the Company.
"Creditor" means any of the Facility Lenders, Bear Stearns or any Other
Existing Lender.
"Delinquent Mortgage Loan" means any Mortgage Loan which, as of any
date of determination, is more than 90 days delinquent in payment of any
principal or interest due thereunder.
"Eligible Asset" means any Purchased HELs under the Whole Loan
Repurchase Agreement, Purchased MBS under the Residuals Repurchase Agreement, or
asset held on repurchase under the Existing Agreements and any assets
transferred by the Company or its Subsidiaries to Bear Stearns pursuant to a
Margin Call.
"Margin Call" means the right of Bear Stearns to give notice to require
the Company to transfer to Bear Stearns cash or additional collateral.
"Mortgage Loan" means any first-lien or second-lien residential
mortgage loan originated or serviced by the Company or its Subsidiaries.
"Mortgage Loan Differential" means, with respect to any Delinquent
Mortgage Loan, the excess of the purchase price paid by Bear Stearns in
connection with the Repurchase Transaction under which such Mortgage Loan was
transferred to Bear Stearns, reduced by any amount previously applied in
reduction of the amount outstanding under the applicable Existing Agreement
(other than in respect of Price Differential) in respect of such Delinquent
Mortgage Loan pursuant to Section 5(d) hereof or Section 5(e) hereof, over an
amount equal to 80% of the original principal amount of such Mortgage Loan.
"Net Proceeds of Sale of Securitization Receivables" means the
proceeds, net of any reasonable out-of-pocket costs of sale or disposition,
realized by the Company or any Subsidiary from any sale, lease or other
disposition of any Purchased MBS.
"Original BankBoston Forbearance Agreement" means the Forbearance and
Intercreditor Agreement, dated as of October 12, 1998, between the Company, the
<PAGE>
Facility Lenders and BankBoston, N.A.
"Other Existing Lenders" has the meaning specified in Section 6.
"Other Intercreditor Agreements" means the separate intercreditor
agreements among the Company, an Other Existing Lender and the Facility Lenders.
"Price Differential" has the meaning given in the applicable Existing
Agreement.
"Purchased Loan" means any Mortgage Loan or Wet Mortgage Loan that is
transferred by the Company or its Subsidiaries to Bear Stearns in connection
with a Repurchase Transaction.
"Purchased MBS" means any security transferred to Bear Stearns by the
Company or any Subsidiary in connection with a Repurchase Transaction.
"Repurchase Transaction" means any transaction made by Bear Stearns
under the Existing Agreements.
"Seller's Guide" means the "IMC Mortgage Company Client Operations
Manual", together with the underwriting guidelines of the Company and its
Subsidiaries, a true and correct copy of which was previously provided to Bear
Stearns by the Company and its Subsidiaries.
"Standstill Period" means a period ending on the first to occur of (i)
the later of (x) 150 days from and after the date hereof and (y) one year from
and after the date of consummation of the Merger, if the Company shall have, on
or before the 150th day from and after the date hereof, consummated the Merger
and delivered (by facsimile transmission or otherwise in accordance with Section
16 hereof) to each Creditor confirmation thereof, (ii) termination of the
Standstill Period in accordance with Section 1(b) or 1(c) hereof or (iii)
termination of the Merger Agreement.
Section 8. Notice of Advances under the Loan Agreement, etc. (a) The
Company shall give prior written notice to Bear Stearns of each request for an
Additional Advance under Section 2.10 of the Initial Loan Agreement as amended
by Amendment No. 1 contemporaneously with making such request to the Facility
Lenders. The
<PAGE>
Company shall give written notice to Bear Stearns immediately upon either the
funding of an Additional Advance (together with such evidence thereof as Bear
Stearns may reasonably request) or the refusal of Facility Lender to fund such
Additional Advance, as the case may be.
(b) The Company shall give each Creditor prompt written notice of any
event which upon notice or lapse of time or both would constitute an event of
default in respect of any of its outstanding Debt.
(c) The Company shall give Bear Stearns and the Facility Lenders prompt
written notice of any event that would permit termination of the Standstill
Period pursuant to clauses (iii), (iv), (vi), (vii), (viii), (ix) or (x) of
Section 1(b) hereof.
(d) The Company shall give Bear Stearns prompt written notice of the
entering into of the Merger Agreement and Amendment No. 1, the consummation of
the Merger, the entering into of the Amendment and the funding by the Facility
Lenders of the advances thereunder.
(e) Notwithstanding the provisions of the Existing Agreements, during
the Standstill Period, the Company shall pay the Price Differential accrued
under the Existing Agreements to Bear Stearns weekly on Friday of each week or,
if Friday is not a Business Day, on the next Business Day.
(f) The Company shall not repay any principal outstanding under the
Loan Agreement during the Standstill Period.
(g) During the Standstill Period (without limiting any obligations
under the Existing Agreements), the Company shall deliver to Bear Stearns at the
same time it delivers to the Facility Lenders, the Disclosure Letter, the
Three-Month Business Plan, any Updated Business Plan and all other financial
statements and reports required to be provided to the Facility Lenders pursuant
to Section 5.5 of the Loan Agreement.
Section 9. Acknowledgment of Obligations. The Company acknowledges that
its obligations under the Existing Agreements and Bear Stearns' rights under the
Existing Obligations remain in full force and effect, and that the Company has
no defenses, counterclaims or offsets to its obligations under the Existing
Agreements and that to the extent such rights include liens on the Collateral,
such liens are valid, perfected and enforceable. The Company hereby waives the
application of the automatic stay in any bankruptcy proceeding in respect of the
Existing Obligations and the obligations
<PAGE>
under the Loan Documents and the Company and each Creditor consents to the
modification of the stay to permit the exercise by Bear Stearns or the Facility
Lenders of their rights in respect of the Collateral, provided that the
foregoing shall not be construed to modify the provisions of Sections 2(b) and 3
hereof. This document shall not constitute a waiver, amendment or modification
of the Existing Agreements, the Existing Obligations or the Loan Documents
except as expressly referred to herein and shall not be construed as a waiver or
consent to any future action on the part of the Company that would require a
waiver or consent of Bear Stearns or the Facility Lenders, respectively, except
to the extent expressly provided herein. The Company acknowledges that BSTrust
and BSIL are affiliates for purposes of the Institutional Account Agreement.
Section 10. Amendments, Etc. No amendment, modification, supplement,
termination, consent or waiver of this Agreement or any term or provision of
this Agreement shall be effective and binding unless in writing and signed by
Bear Stearns, the Other Existing Lenders and the Facility Lenders. Any such
waiver will be effective only in the specific instance and for the specific
purpose for which it is given.
Section 11. Severability. Any provision of this Agreement which is
illegal, invalid, prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such illegality, invalidity,
prohibition or unenforceability without invalidating or impairing the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
Section 12. Additional Payments. In the event that the Company or any
Affiliate proposes to sell or otherwise liquidate any Purchased MBS (or any
securitization receivables pledged or transferred to any Other Existing Lender
having the right to receive all or a portion of the proceeds of such sale or
liquidation) at a time when the amount of the Existing Obligations subject to
repurchase obligations in respect of such Purchased MBS (or the amount of the
Existing Obligations (as defined in an Other Intercreditor Agreement) owing to
such an Other Existing Lender secured by, or subject to repurchase obligations
in respect of, such other securitization receivables) remaining outstanding is
or would, after giving effect to any payment required to be made upon such sale
or liquidation, be less than 40% of such Existing Obligations as of the date
this Agreement became effective and which is in addition to the payments
contemplated under the provisions of Section 5 of this Agreement or Section 5 of
any Other Intercreditor Agreement or the Original Forbearance and Intercreditor
Agreement, each as may be amended from time to time, the Company shall not
effect any such sale or
<PAGE>
liquidation unless it shall take such steps as may be necessary to cause
payments to be made in respect of the Existing Obligations and the Existing
Obligations (as defined in the Other Intercreditor Agreements) owing to such
Other Existing Lenders on a pro rata basis calculated based on the respective
outstanding principal balance of such Existing Obligations owing to each
Existing Lender and each such Other Existing Lender.
Section 13. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL OR EQUITABLE
ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY
TRANSACTION CONTEMPLATED HEREBY OR THE RELATIONSHIP ESTABLISHED HEREUNDER.
Section 14. GOVERNING LAW; VENUE AND JURISDICTION. THE VALIDITY OF THIS
AGREEMENT, THE CONSTRUCTION, INTERPRETATION AND ENFORCEMENT HEREOF AND THE
RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES THEREOF. EACH OF THE PARTIES HERETO
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF, AND AGREES THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT MAY BE TRIED AND LITIGATED
IN, FEDERAL OR, IN THE ABSENCE OF FEDERAL SUBJECT MATTER JURISDICTION, STATE
COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK UNLESS SUCH ACTIONS
OR PROCEEDINGS ARE REQUIRED TO BE BROUGHT IN ANOTHER COURT TO OBTAIN SUBJECT
MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF THE PARTIES WAIVES,
TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO
ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE IN ANY PROCEEDING BROUGHT IN ACCORDANCE WITH
THE IMMEDIATELY PRECEDING SENTENCE. SERVICE OF PROCESS, SUFFICIENT FOR PERSONAL
JURISDICTION IN ANY ACTION AGAINST SUCH PARTY, MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS ADDRESS INDICATED IN SECTION
17.
Section 15. Expenses. In addition to the foregoing, the Company will
also reimburse Bear Stearns and the Facility Lenders promptly for their
reasonable out-of-pocket costs and expenses incurred by such Persons or their
respective employees,
<PAGE>
agents or advisors in connection with the performance of their respective
obligations and duties hereunder and to the extent the Existing Agreements so
provide, under the Existing Agreements, and for any reasonable fees and expenses
of legal or other professional advisors to Bear Stearns and the Facility Lenders
engaged in connection with the preparation and negotiation of this Agreement and
review and negotiation of all related documents, including the Merger Agreement,
Loan Agreement, and monitoring performance of all related documents. If such
fees are not paid by the Company within 30 days of submission, Bear Stearns may
pay such fees from Available Cash Flow from Securitization Receivables and
payments on Purchased Loans.
Section 16. Agreement May Constitute Financing Statement. The Company
and Bear Stearns consents to the filing of this Agreement or a photocopy thereof
as a financing statement under the UCC as in effect in any jurisdiction in which
the Facility Lenders may determine such filing to be necessary or desirable.
Section 17. Notices. All notices, requests and other communications to
any party hereunder shall be in writing and shall be given to such party by
facsimile transmission or by hand delivery at the following address or facsimile
number, or such other address or facsimile number as such party may hereafter
specify for the purpose by notice to the other party and each other creditor,
(a) if to the Facility Lenders, Greenwich Street Capital Partners II, L.P., c/o
Greenwich Street Capital Partners, Inc., 388 Greenwich Street, New York, New
York 10013, Attn.: Sanjay Patel; Tel: (212) 816- 1149, Fax: (212) 816-0166; with
a copy to Debevoise & Plimpton, 875 Third Avenue, New York, New York 10022,
attention: Steven Ostner, tel: (212) 909-6000, fax: (212) 909-6836; (b) if to
the Company, IMC Mortgage Company, 5901 E. Fowler Avenue, Tampa, Florida 33617,
Attn.: President, Tel: 813-984-2533, Fax: (813) 984-2593; with a copy to
Mitchell W. Legler, 300A Wharfside Way, Jacksonville, Florida 3220; and (c) and
if to Bear, Stearns: Bear Stearns & Co. Inc., 245 Park Avenue, New York, New
York 10167, Attn: Philip M. Cedar, Tel.: (212) 272-6768, Fax: (212) 272-4933 and
Paul Friedman, Tel.: (212) 272-3516, Fax: (212) 272-6550, with a copy to;
Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New York 10038, Attn.
Barry J. Dichter, Esq., Tel.: (212) 504-6000, Fax: (212) 504-6666; and if to any
of the Other Existing Lenders, to such person and at the address and facsimile
number provided in Schedule II hereof. Each such notice, request or other
communication shall be effective when sent by facsimile transmission to the
facsimile number or when delivered by hand to the address specified in this
Section 17 or Schedule II hereto, provided that a facsimile transmission shall
be deemed to have been sent only so long as the transmitting machine
<PAGE>
has provided an electronic confirmation of such transmission.
Section 18. Binding Effect; Third Party Beneficiaries. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
successors and permitted assigns, including any successor of the Company by
merger or any entity which purchases all or substantially all of the assets of
the Company, and to each of the other Creditors, each of which is an intended
third-party beneficiary hereof. Neither the Facility Lenders nor Bear Stearns
may sell, assign, participate or otherwise transfer or dispose of all or any
portion of the Loan or the Existing Obligations to any Person unless such Person
shall have assumed and agreed to be bound by the terms hereof by written
instrument in form reasonably satisfactory to the Company and each other
Creditor.
Section 19. Interpretation; Transaction Intended as Purchases and
Sales. The parties specifically acknowledge and recognize that certain language
and use of words in this Agreement may erroneously suggest that transactions
under the Existing Agreements are intended by them to be characterized as loans
or other secured financing arrangements and not as absolute purchases and sales
of mortgage loans and hereby reaffirm that all such transactions are intended to
constitute absolute purchases and sales.
Section 20. Counterparts; Section Headings. This Agreement may be
executed in any number of counterparts, each of which is an original, but all of
which together constitute but one instrument. Except as otherwise indicated,
references herein to any "Section" means a "Section" of this Agreement, and the
section headings in this Agreement are for purposes of reference only and shall
not limit or define the meaning hereof.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
IMC MORTGAGE COMPANY
By /s/
--------------------------------
Name:
Title:
BEAR STEARNS HOME EQUITY TRUST
By /s/
--------------------------------
Name:
Title:
BEAR STEARNS INTERNATIONAL
LIMITED
By /s/
--------------------------------
Name:
Title:
<PAGE>
GREENWICH STREET CAPITAL PARTNERS II, L.P.
GSCP OFFSHORE FUND, L.P.
GREENWICH FUND, L.P.
By: GREENWICH STREET
INVESTMENTS II, L.L.C.,
their General Partner
By: /s/
-----------------------------------
Name:
Title:
<PAGE>
This Intercreditor Agreement is hereby acknowledged and agreed to by:
IMC CORPORATION OF AMERICA
IMC CREDIT CARD, INC.
IMC MORTGAGE COMPANY CANADA, LTD.
AMERICAN HOME EQUITY CORPORATION
IMC INVESTMENT CORPORATION
IMC INVESTMENT LIMITED PARTNERSHIP
ACG FINANCIAL SERVICES (IMC), INC.
AMERICAN MORTGAGE REDUCTION, INC.
CENTRAL MONEY MORTGAGE CO. (IMC), INC.
COREWEST BANC
EQUITY MORTGAGE CO. (IMC), INC.
IMCC INTERNATIONAL, INC.
MORTGAGE AMERICA (IMC), INC.
NATIONAL LENDING CENTER, INC.
NATIONAL LENDING CENTER TILT, INC.
NATIONAL LENDING GROUP, INC.
RESIDENTIAL MORTGAGE CORPORATION (IMC), INC.
By /s/
--------------------------------
Name:
Title:
PAINE WEBBER REAL ESTATE SECURITIES INC.
By /s/
--------------------------------
Name:
Title:
<PAGE>
GERMAN AMERICAN CAPITAL CORPORATION
By /s/
--------------------------------
Name:
Title:
By /s/
--------------------------------
Name:
Title:
ASPEN FUNDING CORP.
By /s/
--------------------------------
Name:
Title:
<PAGE>
Schedule I
to the
Bear Stearns Intercreditor Agreement
Other Existing Lenders
Loan and Security Agreement, dated March 17, 1998, by and among IMC Mortgage
Company, IMC Corporation of America, ACG Financial Services (IMC), Inc.,
American Mortgage Reduction, Inc., Central Money Mortgage Co. (IMC), Inc.,
Corewest Banc, Equity Mortgage Co., (IMC), Inc., Mortgage America (IMC), Inc.,
National Lending Center, Inc., National Lending Center TILT, Inc, and
Residential Mortgage Corporation (IMC), Inc., as borrowers, and German American
Capital Corporation, as lender.
Loan and Security Agreement, dated March 17, 1998, by and among IMC Mortgage
Company, IMC Corporation of America, ACG Financial Services (IMC), Inc.,
American Mortgage Reduction, Inc., Central Money Mortgage Co. (IMC), Inc.,
Corewest Banc, Equity Mortgage Co., (IMC), Inc., Mortgage America (IMC), Inc.,
National Lending Center, Inc., National Lending Center TILT, Inc, and
Residential Mortgage Corporation (IMC), Inc., as borrowers, and Aspen Funding
Corp.
Loan and Security Agreement, dated as of February 28, 1997, between IMC Mortgage
Company, IMC Corporation of America, ACG Financial Services (IMC), Inc.,
American Mortgage Reduction, Inc., Industry Mortgage Company, L.P., Corewest
Banc, IMC Investment Corp., and IMC Investment Limited Partnership, as
borrowers, and Paine Webber Real Estate Securities, Inc., as lender.
(i) Bridge Loan and Security Agreement, dated as of October 10, 1997, as amended
from time to time, by and among the Company, certain of its Subsidiaries and
BankBoston N.A., to which the Facility Lenders have succeeded by assignment, and
(ii) a Loan and Security Agreement, dated December 31, 1996, as amended from
time to time, by and among the Company, certain of its Subsidiaries and
BankBoston N.A., to which the Facility Lenders have succeeded by assignment.
<PAGE>
Schedule II
to the
Bear Stearns Intercreditor Agreement
Notice Address for Other Existing Lenders
Paine Webber
if to Paine Webber, to: PaineWebber Real Estate Securities, Inc., 1285 Avenue of
the Americas, New York, New York 10019, Attn.: George Mangiaracina, Tel: (212)
713- 3734, Fax: (212) 265-3881; with a copy to Cadwalader, Wickersham & Taft,
100 Maiden Lane, New York, New York 10038, Attn.: Michael S. Gambro, Esq., Tel:
(212) 504- 6825; Fax: (212) 504-6666
Deutsche Lenders
if to Aspen Funding, to: Aspen Funding Corp. c/o Amacar Group, 6707D Fairview
Road, Charlotte, North Carolina 28210, Attn.: Douglas Johnson, tel.: (704)
375-0569, fax: (704) 365-1362, with a copy to: Deutsche Bank A.G., as agent, 31
West 52nd Street, New York, New York 10019, Attn.: Greg Amoroso, Tel.: (212)
469-3987, Fax: (212) 469-5160 and Richard Uhlig, Tel.: (212) 469-7730, Fax:
(212) 469-5103; and with a copy to Cadwalader, Wickersham & Taft, 100 Maiden
Lane, New York, New York 10038, Attn.: Karen Gelernt, Esq., Tel: (212) 504-6000,
Fax: (212) 504-6666
if to German American Corporation, to: German American Capital Corporation, 31
West 52nd Street, New York, New York 10019, Attn.: Vijay Radhakishun, Tel.:
(212) 469- 8925, Fax: (212) 469-5923, with a copy to: Deutsche Bank A.G., as
agent, 31 West 52nd Street, New York, New York 10019, Attn.: Greg Amoroso, Tel.:
(212) 469-3987, Fax: (212) 469-5160, and Richard Uhlig, Tel.: (212) 469-7730,
Fax: (212) 469-5103; and in either case described in clause (i) or (ii) above;
with a copy to Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New
York 10038, Attn.: Karen Gelernt, Esq., Tel: (212) 504-6000, Fax: (212) 504-6666
BankBoston Facility
<PAGE>
Schedule II
to the
Bear Stearns Intercreditor Agreement
if to the Facility Lenders, as successors in interest to BankBoston, to: the
address provided for notice to the Facility Lenders pursuant to Section 17 of
the foregoing Agreement
AMENDED AND RESTATED INTERCREDITOR AGREEMENT
(Paine Webber)
AMENDED AND RESTATED INTERCREDITOR AGREEMENT, dated as of February 17,
1999, between IMC MORTGAGE COMPANY, a Florida corporation (the "Company"),
GREENWICH STREET CAPITAL PARTNERS II, L.P., a Delaware limited partnership,
GREENWICH FUND, L.P., a Delaware limited partnership, GSCP OFFSHORE FUND, L.P.,
a Cayman Islands exempted limited partnership (each a "Facility Lender" and
collectively, the "Facility Lenders"), and PAINE WEBBER REAL ESTATE SECURITIES
INC., a Delaware corporation (the "Existing Lender"). Capitalized terms used in
this Agreement without definition have the meanings given to them in the Loan
Agreement (as hereinafter defined) as such terms are defined in the Loan
Agreement on the date hereof (or as amended by any amendment thereto approved by
the Existing Lenders).
RECITALS
A. The Company has entered into a Loan Agreement, dated as of October
12, 1998 (the "Initial Loan Agreement"), between the Company, as borrower, and
the Facility Lenders, pursuant to which the Facility Lenders have agreed to
extend to the Company Commitments to loan, in the aggregate, $33,000,000 (the
"Initial Loans"), subject to the terms and conditions set forth in the Initial
Loan Agreement, which Initial Loans are evidenced by the Notes (as defined in
the Initial Loan Agreement) and entitled to the benefit of certain guarantees
and security provided under certain of the other Loan Documents (as defined in
the Initial Loan Agreement).
B. Pursuant to a Loan and Security Agreement, dated as of February 28,
1998, as amended from time to time, by and among the Company and certain of its
Subsidiaries, (the "Existing Loan Agreement"), and other related agreements in
favor of the Existing Lender (collectively with the Existing Loan Agreement, the
"Existing Loan Documents"), the Existing Lender has agreed to provide financing
to the Company from time to time, to enable the Company to finance certain
mortgage loans and for other purposes provided therein; and the Company and
certain of its Subsidiaries have granted a security interest in the Collateral
(as hereinafter defined) in order to secure their respective obligations under
the Existing Loan Documents (the "Existing Obligations").
C. The Company intends to enter into an Agreement and Plan of Merger
<PAGE>
(the "Merger Agreement"), dated as of February __, 1999, by and among Greenwich
Street Capital Partners II, L.P., a Delaware limited partnership ("GSCP"), the
Company, IMC 1999 Acquisition Co., Inc., a Delaware corporation and a wholly
owned subsidiary of GSCP and its affiliates ("Acquisition"), pursuant to which
Acquisition would be merged with and into the Company and GSCP and its
affiliates would be issued common stock of the surviving corporation
representing approximately 93.5% of the outstanding common stock of the
surviving corporation (the "Merger").
D. In connection with the Merger Agreement, the Facility Lenders have
or intend to enter into (i) Amendment No. 1 to the Initial Loan Agreement
("Amendment No. 1"), providing for the Facility Lenders to extend to the Company
additional Commitments (the "Interim Commitments") to loan in the aggregate not
less than an additional $5,000,000 (the "Interim Loans") and (ii) an agreement
with Acquisition, dated as of February __, 1999, obligating the Facility
Lenders, upon consummation of the Merger, to enter into an amendment to the
Initial Loan Agreement, as amended (the "Amendment"), pursuant to which the
Facility Lenders will agree to extend to the Company Commitments to loan, in the
aggregate, an amount which, together with the Interim Commitments, will equal an
additional $40,000,000 (the "Additional Loans" and, together with the Initial
Loans and the Interim Loans, the "Loans"), subject to the terms and conditions
set forth in the Initial Loan Agreement, as amended by Amendment No. 1 and the
Amendment (as the same may be further modified, supplemented or restated from
time to time, the "Loan Agreement"), which Loans are evidenced by the Notes (as
defined in the Loan Agreement) and entitled to the benefit of certain guarantees
and security provided under certain of the other Loan Documents (as defined in
the Loan Agreement).
E. The Company, the Facility Lenders and the Existing Lender have
previously entered into an Intercreditor Agreement, dated as of October 12, 1998
(the "Original Intercreditor Agreement"). In order to induce the Facility
Lenders to enter into the Amendment and GSCP to enter into the Merger Agreement,
the Facility Lenders, the Company and the Existing Lender have agreed to enter
into this agreement amending and restating the Original Intercreditor Agreement
(as so amended and restated, the "Intercreditor Agreement").
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company, the Existing Lender
and the Facility Lenders agree to amend and restate the Original Intercreditor
Agreement to read in its entirety as follows:
<PAGE>
Section 1. Standstill. (a) Each of the Facility Lenders and the
Existing Lender agrees, subject to the terms of this Agreement, that for the
Standstill Period, it shall not:
(i) file or join in the filing of any involuntary petition in
bankruptcy with respect to the Company or its Subsidiaries, or initiate or
participate in any similar proceedings for the benefit of creditors,
including any proceeding for the appointment of a trustee, receiver,
conservator or liquidator of the Company or its Subsidiaries or any portion
of its assets;
(ii) seek to collect or enforce by litigation or otherwise, any
payment obligations under the Existing Loan Documents or the Loan
Documents; provided that nothing in this Section 1 shall prohibit the
Facility Lenders from exercising their Exchange Option;
(iii) make any Margin Calls or other demands for payment in respect
of, or additional collateral to secure the Existing Obligations; provided,
however, that this clause shall not adversely affect the right of the
Existing Lender to take any actions to preserve, protect or perfect its
liens in the Collateral;
(iv) declare a default or event of default under, or exercise or
enforce any right or remedy under, or accelerate the maturity of any
Existing Obligation or Loan under, any Existing Loan Document or Loan
Document; or
(v) seek to attach, sequester or otherwise proceed against any of the
Collateral.
(b) The Standstill Period may be terminated by the Existing Lender or
the Facility Lenders by written notice to the Company and each other Creditor
upon the occurrence of any of the following:
(i) a failure by the Company under the Existing Loan Agreement to make
to the Existing Lender any scheduled payment of interest, which failure
continues unremedied for two days, or any payment of principal due in
respect of payoffs or prepayments of mortgage loans comprising any portion
of the Collateral or any payment of principal due pursuant to Section 5
hereof;
<PAGE>
(ii) any intentional fraud or misrepresentation by the Company;
(iii) immediately upon a failure of the Facility Lenders to make (x)
an Advance (as defined in the Initial Loan Agreement) under the Initial
Loan Agreement following a request of the Company thereunder, (y) an
Interim Loan under the Initial Loan Agreement as amended by Amendment No. 1
following a request by the Company thereunder or (z) immediately upon
consummation of the Merger, the Additional Loans under the Loan Agreement;
(iv) immediately in the event any Other Existing Lender takes any of
the actions described in Section 1(a) of its Other Intercreditor Agreement,
or, in the case of the Existing Lender, immediately in the event any
Facility Lender takes any of the actions described in Section 1(a) of this
Agreement, or, in the case of the Facility Lenders, immediately in the
event the Existing Lender takes any of the actions described in Section
1(a) of this Agreement, in each case whether or not it shall have given
notice of termination of the Standstill Period;
(v) the condition contained in subclause (y) of clause (i) of the
definition of "Standstill Period" to the extension of the Standstill Period
beyond the date which is 150 days from and after the date hereof shall not
have been satisfied on or before such date;
(vi) a Change of Control or payment of the Take-Out Premium;
(vii) an event shall occur and be continuing for a period of ten
Business Days which permits any holder of indebtedness for borrowed money
of the Company or any Subsidiary outstanding (other than any Creditor) to
accelerate the maturity of such indebtedness or exercise remedies with
respect to property of the Company or any Subsidiary, without such
indebtedness being paid or the rights of such holder to take such action
being waived, stayed or subjected to a standstill or other agreement of
such holder to forbear from exercising remedies, reasonably satisfactory to
the Creditors;
(viii) the Company shall not have entered into the Merger
<PAGE>
Agreement and Amendment No. 1 on or before February 19, 1999;
(ix) the independent servicer described in Section 5(f) of this
Agreement shall not have been retained on or before the date which is 30
days after the date of consummation of the Merger; and
(x) the Company shall, at any time on or after the date of
consummation of the Merger, repay all or any portion of the Loans.
(c) The Standstill Period shall terminate automatically without notice
or other action by any Creditor upon the occurrence of any of the following:
(i) the Company or any Subsidiary shall consent to the appointment of
or taking possession by a receiver, assignee, custodian, sequestrator,
trustee or liquidator (or other similar official) of itself or of a
substantial part of its property; or the Company or any Subsidiary shall
admit in writing (to any creditor, governmental authority or judicial court
or tribunal) its inability to pay its debts generally as they come due or
shall fail generally to pay its debts as they become due, or shall make a
general assignment for the benefit of its creditors; or the Company or any
Subsidiary shall file a voluntary petition in bankruptcy or a volun tary
petition or answer seeking liquidation, reorganization or other relief with
respect to itself or its debts under the Federal bankruptcy laws, as now or
hereafter constituted or any other applicable Federal or State bankruptcy,
insolvency or other similar law, or shall consent to the entry of an order
for relief in an involun tary case under any such law; or the Company or
any Subsidiary shall file an answer admitting the material allegations of a
petition filed against the Company in any such proceeding, or otherwise
seek relief under the provisions of any existing or future Federal or State
bankruptcy, insolvency or other similar law providing for the
reorganization or winding-up of corporations, or providing for an
arrangement, agreement, composition, extension or adjustment with its
creditors; or the Company or any Subsidiary shall take or publicly announce
its intention to take corporate action in furtherance of any of the
foregoing; or
(ii) an order, judgment or decree shall be entered in any proceeding
by any court of competent jurisdiction appointing, without the consent of
the Company, a receiver, trustee or liquidator of the Company or any
Subsidiary or of any substantial part of its property, or any substantial
part of the
<PAGE>
property of the Company or any Subsidiary shall be sequestered, and any
such order, judgment or decree of appointment or sequestration shall remain
in force undismissed, unstayed or unvacated for a period of 30 days after
the date of entry thereof; or
(iii) an involuntary petition against the Company or any Subsidiary in
a proceeding under the Federal bankruptcy laws or other insolvency laws, as
now or hereafter in effect, shall be filed and shall not be withdrawn or
dismissed within 30 days thereafter, or a decree or order for relief in
respect of the Company or any Subsidiary shall be entered by a court of
competent jurisdiction in an involuntary case under the Federal bankruptcy
laws, as now or hereafter constituted, or, under the provisions of any law
providing for reorganization or winding-up of corporations which may apply
to the Company, any court of com petent jurisdiction shall assume
jurisdiction, custody or control of the Company or any Subsidiary or of any
substantial part of its property and such jurisdiction, custody or control
shall remain in force unrelinquished, unstayed or unterminated for a period
of 30 days.
Section 2. Grant of Security Interest. (a) In order to secure full and
timely payment of the Obligations under the Loan Agreement, and to secure the
performance of all of the other obligations of the Company under the Loan
Documents, the Company and each Subsidiary hereby mortgages, pledges and assigns
and transfers to the Facility Lenders, and grants to the Facility Lenders, a
continuing perfected security interest in, and a lien in the Collateral. The
Facility Lenders agree to release their lien in respect of any whole loan
mortgage, which is sold by the Company to the Existing Lender for a purchase
price not less than the advance rate in respect of such mortgage.
(b) The Facility Lenders agree for the benefit of the Existing Lender
that during the continuance of the Standstill Period and thereafter until the
earlier of (i) the satisfaction of the Existing Obligations in full, (ii) the
exercise by the Existing Lender of any right to attach, sequester, foreclose or
otherwise exercise remedies with respect to the Collateral, and (iii) 180 days
after the expiration or earlier termination of the Standstill Period, the
Facility Lenders will not seek to attach, sequester, foreclose, levy on or
otherwise exercise remedies with respect to the Collateral, provided that
nothing herein
<PAGE>
shall restrict the Facility Lenders from commencing suit on its Notes or for
payment of its Loan or enforcement of any other obligation owing to it under the
Loan Documents.
Section 3. Acknowledgment and Priorities. (a) The Existing Lender
hereby acknowledges and consents to the entrance by the Company into the Loan
Documents and the granting of the lien in the Collateral granted pursuant to
Section 2; provided, however, notwithstanding anything to the contrary contained
in the Loan Agreement, the Notes or any of the Loan Documents, the parties
hereto acknowledge and agree that any security interest in or other rights with
respect to any Collateral granted to secure the Existing Obligations under the
Existing Loan Agreement or otherwise has and shall have priority over any
security interest in such Collateral granted pursuant to this Agreement, the
Initial Loan Agreement, the Loan Agreement or the other Loan Documents
irrespective of:
(i) the time, order or method of attachment or perfection of the
security interest created by this Agreement, the Initial Loan Agreement,
the Loan Agreement or any Loan Document;
(ii) the time or order of filing or recording of financing statements
or other documents filed or recorded to perfect security interests in any
Collateral;
(iii) anything contained in any filing or agreement to which the
Facility Lenders, the Company, or the Collateral Agent under the Security
Documents now or hereafter may be a party, and
(iv) the rules for determining priority under the U.C.C. or other laws
governing the relative priorities of secured creditors.
(b) The Existing Lender hereby agrees that, following payment in full
of all the Existing Obligations hereunder, any Collateral, including any books
and records (including, without limitation, computer files, printouts and other
computer materials and records) relating to the Collateral, as well as all
proceeds and products of such Collateral, held by it shall be held for the
benefit of the Facility Lenders, provided that if such Collateral is then
subject to the prior lien of another creditor, the Existing Lender may hold it
for the benefit of such other creditor and the Facility Lenders as their
interests may appear. If the Existing Lender has elected not to hold such
Collateral following payment in full of the Existing Obligations, it shall
promptly forward any Collateral, including any books and records (including,
without limitation, computer files, printouts and other
<PAGE>
computer materials and records) relating to the Collateral, as well as all
proceeds and products of such Collateral, to the Collateral Agent.
(c) Nothing contained in this Agreement shall alter or impair the
Existing Lender's rights under the Existing Loan Documents from and after the
termination of the Standstill Period in accordance herewith or be interpreted to
mean that the Existing Lender has any obligation under the Existing Loan
Documents or otherwise to return any proceeds received on a sale or deemed sale
of any Pledged MBS or Pledged Loan to the Company or any Subsidiary, except as
expressly provided herein.
Section 4. Reserved Rights. (a) Notwithstanding anything in this
Agreement to the contrary, the Company and the Facility Lenders agree that this
Agreement shall in no manner impair any right of the Existing Lender under the
Existing Loan Agreement to enforce any condition precedent to any obligation it
may have thereunder to make future Advances to the Company and its Subsidiaries,
nor shall this Agreement limit the right of the Existing Lender to make Margin
Calls in respect of the hedging transactions with respect to U.S. treasury
securities that the Company may have entered into with the Existing Lender
outside of the Existing Loan Documents. All rights and obligations of the
Existing Lender under the Existing Loan Documents to make Advances or not make
Advances shall not be affected by this Agreement.
(b) In addition and notwithstanding anything to the contrary contained
herein, this Agreement shall not (i) apply to any Advances made from and after
the date hereof, or any other obligation of the Company or any of its
Subsidiaries to the Existing Lender or any of its Affiliates incurred from and
after the date hereof or (ii) limit the rights of the Existing Lender or any
Affiliate thereof (x) to receive principal and/or interest at the applicable
mortgage rate on mortgage loans purchased by the Existing Lender or any such
Affiliate from the Company or any of its Subsidiaries or (y) to sell mortgage
loans to the Company or any of its Subsidiaries, in each case including without
limitation the rights of the Existing Lender under (A) the Mortgage Loan
Purchase Agreement, dated as of October 9, 1998, among the Existing Lender, the
Company and certain of its Subsidiaries and (B) the Mortgage Loan Purchase
Agreement, dated as of December 9, 1998, between the Company and the Existing
Lender.
<PAGE>
Section 5. Amortization (a) From and after the date this Agreement
becomes effective, (i) within five days following the effective date hereof, in
the case of any Available Cash Flow from Securitization Receivables received
prior to the effective date hereof for January and February 1999 and (ii) within
five days following receipt by the Existing Lender each month of Available Cash
Flow from Securitization Receivables, the Existing Lender shall apply the
Applicable Percentage of such Available Cash Flow from Securitization
Receivables to repayment of principal of the Existing Obligations under the
Existing Loan Documents secured by the Pledged MBS's generating such Available
Cash Flow from Securitization Receivables and shall remit the balance of such
Available Cash Flow from Securitization Receivables to the Company.
(b) Upon consummation of the Merger, the Company shall (i) repay
$5,000,000 of the Existing Obligations to be applied to the principal amount
outstanding under the Existing Loan Documents and (ii) repay the principal
amount outstanding under the Existing Loan Documents in respect of each Pledged
Loan financed thereunder which as of the date of consummation of the Merger is a
Delinquent Mortgage Loan in an amount equal to the Mortgage Loan Differential.
In the event any such Delinquent Mortgage Loan remains outstanding and is not
sold or liquidated by the date which is four months after the date of
consummation of the Merger, the Company shall repay the principal amount
outstanding under the Existing Loan Documents in respect of such Delinquent
Mortgage Loan in an amount equal to the Increased Mortgage Loan Differential.
(c) Within 15 days following the end of each month from and after the
consummation of the Merger, the Company shall repay the principal amount
outstanding under the Existing Loan Documents in respect of each Pledged Loan
financed thereunder (i) which during such calendar month and after the date of
consummation of the Merger first became, and as of the last day of such calendar
month remained, a Delinquent Mortgage Loan in an amount equal to the Mortgage
Loan Differential, and (ii) which after the date of consummation of the Merger
first became, and as of the last day of such calendar month had remained for a
period of four months, a Delinquent Mortgage Loan in an amount equal to the
Increased Mortgage Loan Differential.
(d) The Company shall immediately repay the amount outstanding under
the Existing Loan Documents by the amount equal to the Net Proceeds of Sale of
Securitization Receivables in respect of any Pledged MBS sold or otherwise
disposed of by the Company or any Subsidiary. The Company shall not sell or
otherwise dispose of any Pledged MBS without the Existing Lender's consent and
without reaching agreement
<PAGE>
with the Existing Lender as to an appropriate reduction of the Minimum Repayment
Amount, such consent and agreement not to be unreasonably withheld or delayed by
the Existing Lender or the Company. The parties agree that it would be
reasonable for the Existing Lender to withhold its consent to the sale of any
Pledged MBS if, in its sole discretion, the Existing Lender concludes that such
sale will impair its ability to be paid the Existing Obligations, the selling
price for the Pledged MBS should be higher or the Pledged MBS has not been
adequately marketed.
(e) Within one day following the end of each calendar month commencing
with the calendar month in which the effective date hereof occurs, the Company
shall repay the principal amount outstanding under the Existing Loan Documents
by an amount equal to the excess, if any, of the Minimum Repayment Amount for
the applicable period specified in clause (i), (ii) or (iii) of the definition
of "Minimum Repayment Amount" ending at the end of such calendar month over the
aggregate amount applied to such repayment in respect of such period pursuant to
Section 5(a) and this Section 5(e).
(f) The Company shall use best efforts to retain the services of a
rated and approved independent servicer with expertise in servicing delinquent
mortgage loans to assist it in servicing Delinquent Mortgage Loans.
(g) The Existing Lender or an affiliate thereof designated by the
Existing Lender shall have the right, subject to the provisions of the following
sentence to act as co-lead or lead managing underwriter or placement agent with
respect to any and all mortgage-backed or asset-backed securities offerings
involving loans or other financial assets now owned or hereafter acquired or
originated by the Company or any Subsidiary thereof during the Standstill
Period, provided that the right to act as a lead managing underwriter or
placement agent may, at the Company's discretion, be shared equally, in the
aggregate as to all such offerings, among the Existing Lender (or such
affiliate) and each other lender which is then a provider of in excess of
$200,000,000 of warehouse financing to the Company and its Subsidiaries. The
right of the Existing Lender (or such affiliate) pursuant to this Section 5(g)
is subject to the condition that the Existing Lender (or such affiliate) has
outstanding, at any time during the calendar quarter in which such offering
occurs, at least $200,000,000 of warehouse financing to the Company and provides
residual financing on market terms on those offerings on which they act as a
lead underwriter or agent. The Company shall compensate the Existing Lender for
acting as underwriter or agent in accordance with prevailing market terms at the
time of any such offering.
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(h) The Company shall, on the date three months after the date hereof,
repay any existing Advances, which Advances were outstanding as of October 12,
1998, secured by Mortgage Loans other than Delinquent Mortgage Loans. With
respect to each Advance secured by Mortgage Loans other than Delinquent Mortgage
Loans made under the Existing Loan Agreements on or after October 12, 1998, the
Company shall repay such Advance on the date which is six months after such
Advance was made. Upon payment of any such Advance in full, the Existing Lenders
shall release the related Mortgage Loan from the lien of the Existing Loan
Documents. In the event the Company realizes net proceeds from the sale of any
such Mortgage Loans so released in excess of the aggregate amount of Advances so
repaid pursuant to this Section 5(h), the Company will promptly apply such
excess to the repayment of other Advances then outstanding.
(i) In the event the Company shall fail to pay when due any amount due
to the Existing Lender under this Agreement, the Existing Lender may set off
such amount against Available Cash Flow from Securitization Receivables or
payments on Pledged Loans otherwise payable to the Company hereunder.
Section 6. Conditions Precedent. The effectiveness of this Agreement
shall be subject to the condition that each of the other existing lenders listed
on Schedule I (the "Other Existing Lenders") shall have entered into an Other
Intercreditor Agreement in the form annexed hereto. The Company shall furnish
the Existing Lender complete and correct copies of each such Other Intercreditor
Agreement within one business day of its execution.
Section 7. Certain Definitions.
"Advance" means any advance made by the Existing Lender under the
Existing Loan Agreement.
"Advance Rate" means the percentage rate to be applied to the Market
Value of any Eligible Asset, at which rate Lender may make an Advance to the
Borrower or its Subsidiaries.
<PAGE>
"Applicable Percentage" means (i) for January 1999, (x) in respect of
Pledged MBS's relating to the Company's Series 1998-7 transaction, 53.34% and
(y) with respect to Pledged MBS's relating to all other transactions, 26.6%,
(ii) for each calendar month commencing on or after February 1, 1999 to the date
of consummation of the Merger, (x) in respect of Pledged MBS's relating to the
Company's Series 1998-7 transaction, 80% and (y) with respect to Pledged MBS's
relating to all other transactions (A) during the first three calendar months of
such period, 40% and (B) with respect to the balance, if any, of such period,
80%, (iii) for the first three calendar months commencing on or after the date
of the consummation of the Merger, 40%, (iv) for the next six calendar months,
50%, and (v) for the next three calendar months, 60%. For purposes of applying
the foregoing, if the date of consummation of the Merger occurs on or before the
fifteenth day of a month, the Merger shall be deemed to have been consummated as
of the first day of such month, and if the date of consummation of the Merger
occurs after the fifteenth day of a month, then the Merger shall be deemed to
have been consummated as of the first day of the succeeding month.
"Available Cash Flow from Securitization Receivables" means the amount
of any distribution with respect to, or prepayment of, any Pledged MBS.
"Change of Control" means the occurrence of any of the following events
(other than as a consequence of the issuance of the Preferred Stock to the
Facility Lenders upon exercise of the Exchange Option or the consummation of the
Merger):
(i) any "Person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have "beneficial ownership" of all shares that any such Person
has the right to acquire within one year), directly or indirectly, of more
than 50% of the Voting Stock of the Company; or
(ii) the Company consummates any sale, lease, exchange or other
disposition of all or substantially all of the assets of the Company and
its Subsidiaries, taken as a whole, in any transaction or series of
transactions not in the ordinary course of business; or
(iii) the Company engages in a merger, consolidation or similar
business combination with any third party.
<PAGE>
"Collateral" means (i) any Eligible Asset pledged by the Borrower or
its Subsidiaries and accepted by the Existing Lender in connection with either
an Advance or in response to a Margin Call; (ii) the contractual right to
receive payments, including the right to payments of principal and interest and
the right to enforce such payments, arising from or under any of the Eligible
Assets; (iii) the contractual right to service each Pledged Loan; (iv) any other
right, interest or property of the Company or any Subsidiary now or hereafter
securing the performance by the Company or any Subsidiary of the Existing
Obligations; and (v) any and all proceeds, payments, income, profits and
products thereof, and all files and records relating thereto.
"Collateral Value" means, with respect to any Eligible Asset pledged by
Borrower and its Subsidiaries to the Existing Lender, the product of the related
Market Value and the related Advance Rate.
"Common Stock" means the Company's common stock, par value $0.01 per
share.
"Company" means IMC Mortgage Company, a Florida corporation, and any
successor by merger and any entity purchasing all or substantially all of the
assets of the Company.
"Creditor" means any of the Facility Lenders, the Existing Lender or
any Other Existing Lender.
"Delinquent Mortgage Loan" means any Mortgage Loan which, as of any
date of determination, is more than 90 days delinquent in payment of any
principal or interest due thereunder.
"Eligible Asset" means any Pledged MBS or Pledged Loan.
"Increased Mortgage Loan Differential" means, with respect to any
Delinquent Mortgage Loan which is a Pledged Loan, the excess of the amount
originally advanced in respect of such Pledged Loan made by the Existing Lender
in connection with the transaction under which such Pledged Loan was financed,
reduced by any
<PAGE>
amount previously applied in reduction of the amount outstanding under the
applicable Existing Loan Documents in respect of such Delinquent Mortgage Loan
pursuant to clause (ii) of the first sentence of Section 5(b) hereof, the last
sentence of Section 5(b) hereof or Section 5(c) hereof, over an amount equal to
65% of the unpaid principal amount of such Mortgage Loan at the time of such
advance.
"Margin Call" means the right of the Existing Lender to give notice to
require the Company to transfer to the Existing Lender cash or additional
Collateral.
"Market Value" means the value of any Eligible Asset as determined by
the Existing Lender in its sole discretion.
"Minimum Repayment Amount" means (i) for January 1999, $667,000, (ii)
for each of the one- through five-month periods commencing with February 1, 1999
and prior to the date of the consummation of the Merger, the applicable amount
as follows: (a) first month, $1,000,000, (b) first two months, $2,000,000, (c)
first three months, $3,000,000, (d) first four months, $5,000,000, (e) first
five months, $7,000,000, and (iii) for each of the one-through twelve-month
periods commencing with the calendar month in which the date of the consummation
of the Merger is deemed to occur, the applicable amount as follows: (a) first
month, $1,666,667, (b) first two months, $3,333,333, (c) first three months,
$5,000,000, (d) first four months, $7,666,667, (e) first five months,
$10,333,333, (f) first six months, $13,000,000, (g) first seven months,
$16,000,000, (h) first eight months, $19,000,000, (i) first nine months,
$22,000,000, (j) first ten months, $25,666,667, (k) first eleven months,
$29,333,333, and (l) first twelve months, $33,000,000. For purposes of applying
the foregoing, if the date of consummation of the Merger occurs on or before the
fifteenth day of a month, then the Merger shall be deemed to have been
consummated as of the first day of such month, and, if the date of consummation
of the Merger occurs after the fifteenth day of a month, then the Merger shall
be deemed to have been consummated as of the first day of the succeeding month.
"Mortgage Loan" means any first-lien or second-lien residential
mortgage loan originated or serviced by the Company or its Subsidiaries.
"Mortgage Loan Differential" means with respect to any Delinquent
Mortgage Loan which is a Pledged Loan, the excess of the amount originally
advanced in respect of such Pledged Loan made by the Existing Lender in
connection with the transaction under which such Pledged Loan was financed,
reduced by any amount
<PAGE>
previously applied in reduction of the principal amount outstanding under the
Existing Loan Documents in respect of such Delinquent Mortgage Loan pursuant to
clause (ii) of the first sentence of Section 5(b) hereof, the last sentence of
Section 5(b) hereof or Section 5(c) hereof, over an amount equal to 80% of the
unpaid principal amount of such Mortgage Loan at the time of such advance.
"Net Proceeds of Sale of Securitization Receivables" means the
proceeds, net of any reasonable out-of-pocket costs of sale or disposition,
realized by the Company or any Subsidiary from any sale, lease or other
disposition of any Pledged MBS.
"Original BankBoston Forbearance Agreement" means the Forbearance and
Intercreditor Agreement, dated as of October 12, 1998, between the Company, the
Facility Lenders and BankBoston, N.A.
"Other Existing Lenders" has the meaning specified in Section 6.
"Other Intercreditor Agreements" means the separate intercreditor
agreements among the Company, an Other Existing Lender and the Facility Lenders.
"Pledged Loan" means any Mortgage Loan or Wet Mortgage Loan that is
pledged by the Company or its Subsidiaries and accepted by the Existing Lender
in connection with an Advance.
"Pledged MBS" means any residual, subordinated or interest strip class
of asset-backed security (i) issued in connection with a securitization in which
Existing Lender or its designee acted as lead or co-lead underwriter or
placement agent and (ii) pledged by Company and its Subsidiaries and accepted by
Lender in connection with an Advance.
"Seller's Guide" means the "IMC Mortgage Company Client Operations
Manual", together with the underwriting guidelines of the Company and its
Subsidiaries, a true and correct copy of which was previously provided to the
Existing Lender by the Company and its Subsidiaries.
<PAGE>
"Standstill Period" means a period ending on the first to occur of (i)
the later of (x) 150 days from and after the date hereof and (y) one year from
and after the date of consummation of the Merger, if the Company shall have, on
or before the 150th day from and after the date hereof, consummated the Merger
and delivered (by facsimile transmission or otherwise in accordance with Section
16 hereof) to each Creditor confirmation thereof, (ii) termination of the
Standstill Period in accordance with Section 1(b) or 1(c) hereof or (iii)
termination of the Merger Agreement.
"Wet Mortgage Loan" means any residential mortgage loan originated by
the Company and its Subsidiaries in accordance with the Seller's Guide, with
respect to which all of the related documents required to be delivered in
connection with any Advance have not been deposited with the custodian on or
prior to the related Advance Date.
Section 8. Notice of Advances under the Loan Agreement; etc. (a) The
Company shall give prior written notice to the Existing Lender of each request
for an Additional Advance under Section 2.10 of the Initial Loan Agreement as
amended by Amendment No. 1 contemporaneously with making such request to the
Facility Lenders. The Company shall give written notice to the Existing Lender
immediately upon either the funding of an Additional Advance (together with such
evidence thereof as the Existing Lender may reasonably request) or the refusal
of Facility Lender to fund such Additional Advance, as the case may be.
(b) The Company shall give each Creditor prompt written notice of any
event which upon notice or lapse of time or both would constitute an event of
default in respect of any of its outstanding Debt.
(c) The Company shall give the Existing Lender and the Facility Lenders
prompt written notice of any event that would permit termination of the
Standstill Period pursuant to clauses (iii), (iv), (vi), (vii), (viii), (ix) or
(x) of Section 1(b) hereof.
(d) The Company shall give the Existing Lender prompt written notice of
the entering into of the Merger Agreement and Amendment No. 1, the consummation
of the Merger, the entering into of the Amendment and the funding by the
Facility Lenders of the advances thereunder.
(e) Notwithstanding the provisions of the Existing Loan Agreement,
during the Standstill Period, the Company shall pay interest on the principal
amount
<PAGE>
outstanding under the Existing Loan Agreement to the Existing Lender weekly on
Friday of each week or, if Friday is not a Business Day, on the next Business
Day.
(f) The Company shall not repay any principal outstanding under the
Loan Agreement during the Standstill Period.
(g) During the Standstill Period (without limiting any obligations
under the Existing Loan Agreement), the Company shall deliver to the Existing
Lender at the same time it delivers to the Facility Lenders, the Disclosure
Letter, the Three-Month Business Plan, any Updated Business Plan and all other
financial statements and reports required to be provided to the Facility Lenders
pursuant to Section 5.5 of the Loan Agreement.
Section 9. Acknowledgment of Obligations. The Company acknowledges that
its obligations under the Existing Loan Documents and the lien on the Collateral
securing the Existing Obligations remain in full force and effect, and that the
Company has no defenses, counterclaims or offsets to its obligations under the
Existing Loan Documents and that such liens are valid, perfected and
enforceable. The Company hereby waives the application of the automatic stay in
any bankruptcy proceeding in respect of the Existing Obligations and the
obligations under the Loan Documents and the Company and each Creditor consents
to the modification of the stay to permit the exercise by the Existing Lender or
the Facility Lenders of their rights in respect of the Collateral, provided that
the foregoing shall not be construed to modify the provisions of Sections 2(b)
and 3 hereof. This document shall not constitute a waiver, amendment or
modification of the Existing Loan Documents, the Existing Obligations or the
Loan Documents except as expressly referred to herein and shall not be construed
as a waiver or consent to any future action on the part of the Company that
would require a waiver or consent of the Existing Lender or the Facility
Lenders, respectively, except to the extent expressly provided herein.
Section 10. Amendments, Etc. No amendment, modification, supplement,
termination, consent or waiver of this Agreement or any term or provision of
this Agreement shall be effective and binding unless in writing and signed by
the Existing Lender, the Other Existing Lenders and the Facility Lenders. Any
such waiver will be
<PAGE>
effective only in the specific instance and for the specific purpose for which
it is given.
Section 11. Severability. Any provision of this Agreement which is
illegal, invalid, prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such illegality, invalidity,
prohibition or unenforceability without invalidating or impairing the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
Section 12. Additional Payments. In the event that the Company or any
Affiliate proposes to sell or otherwise liquidate any Pledged Securities (or any
securitization receivables pledged or transferred to any Other Existing Lender
having the right to receive all or a portion of the proceeds of such sale or
liquidation) at a time when the amount of the Existing Obligations secured by
such Pledged Securities (or the amount of the Existing Obligations (as defined
in an Other Intercreditor Agreement) owing to such an Other Existing Lender
secured by, or subject to repurchase obligations in respect of, such other
securitization receivables) remaining outstanding is or would, after giving
effect to any payment required to be made upon such sale or liquidation, be less
than 40% of such Existing Obligations as of the date this Agreement became
effective and which is in addition to the payments contemplated under the
provisions of Section 5 of this Agreement or Section 5 of any Other
Intercreditor Agreement or the Original Forbearance and Intercreditor Agreement,
each as may be amended from time to time (including, without limitation, any
amounts received on account of sales of Pledged Securities (or such
securitization receivables) pursuant to Section 5(d) which cause the amount
received pursuant to Section 5(a) and 5(d) in a given month to exceed the
Minimum Repayment Amount), the Company shall not effect any such sale or
liquidation unless it shall take such steps as may be necessary to cause
payments to be made in respect of the Existing Obligations and the Existing
Obligations (as defined in the Other Intercreditor Agreements) owing to such
Other Existing Lenders on a pro rata basis calculated based on the respective
outstanding principal balance of such Existing Obligations owing to each
Existing Lender and each such Other Existing Lender.
Section 13. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL OR EQUITABLE
ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY
TRANSACTION CONTEMPLATED HEREBY OR THE RELATIONSHIP ESTABLISHED HEREUNDER.
Section 14. GOVERNING LAW; VENUE AND JURISDICTION. THE
<PAGE>
VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION AND ENFORCEMENT
HEREOF AND THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES THEREOF. EACH OF THE
PARTIES HERETO SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF, AND AGREES THAT ALL
ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT MAY BE TRIED
AND LITIGATED IN, FEDERAL OR, IN THE ABSENCE OF FEDERAL SUBJECT MATTER
JURISDICTION, STATE COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK
UNLESS SUCH ACTIONS OR PROCEEDINGS ARE REQUIRED TO BE BROUGHT IN ANOTHER COURT
TO OBTAIN SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF
THE PARTIES WAIVES, TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE IN ANY PROCEEDING BROUGHT
IN ACCORDANCE WITH THE IMMEDIATELY PRECEDING SENTENCE. SERVICE OF PROCESS,
SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST SUCH PARTY MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS ADDRESS
INDICATED IN SECTION 17.
Section 15. Expenses. In addition to the foregoing, the Company will
also reimburse the Existing Lender and the Facility Lenders promptly for their
reasonable out-of-pocket costs and expenses incurred by such Persons or their
respective employees, agents or advisors in connection with the performance of
their respective obligations and duties hereunder and, to the extent the
Existing Loan Documents so provide, under the Existing Loan Documents, and for
any reasonable fees and expenses of legal or other professional advisors to the
Existing Lender and the Facility Lenders engaged in connection with the
preparation and negotiation of this Agreement and review and negotiation of all
related documents, including the Merger Agreement, Loan Agreement, and
monitoring performance of all related documents. If such fees are not paid by
the Company within 30 days of submission, the Existing Lender may pay such fees
from Available Cash Flow from Securitization Receivables and payments on Pledged
Loans.
Section 16. Agreement May Constitute Financing Statement. The Company
and the Existing Lender consents to the filing of this Agreement or
<PAGE>
a photocopy thereof as a financing statement under the UCC as in effect in any
jurisdiction in which the Facility Lenders may determine such filing to be
necessary or desirable.
Section 17. Notices. All notices, requests and other communications to
any party hereunder shall be in writing and shall be given to such party by
facsimile transmission or by hand delivery at the following address or facsimile
number, or such other address or facsimile number as such party may hereafter
specify for the purpose by notice to the other party and each other Creditor.
(a) if to the Facility Lenders, Greenwich Street Capital Partners II, L.P., c/o
Greenwich Street Capital Partners, Inc., 388 Greenwich Street, New York, New
York 10013, Attn.: Sanjay Patel; Tel: (212) 826- 1149, Fax: (212) 816-0166; with
a copy to Debevoise & Plimpton, 875 Third Avenue, New York, New York 10022,
Attn.: Steven Ostner, Tel: (212) 909-6000, Fax: (212) 909- 6836; (b) if to the
Company, IMC Mortgage Company, 5901 E. Fowler Avenue, Tampa, Florida 33617,
Attn.: President, Tel: (813) 984-2533, Fax: (813) 984-2593; with a copy to
Mitchell W. Legler, 300A Wharfside Way, Jacksonville, Florida 32207; and (c) and
if to the Existing Lender: PaineWebber Real Estate Securities, Inc., 1285 Avenue
of the Americas, New York, New York 10019, Attn.: George Mangiaracina, Tel:
(212) 713- 3734, Fax: (212) 265-3881; with a copy to Cadwalader, Wickersham &
Taft, 100 Maiden Lane, New York, New York 10038, Attn.: Michael S. Gambro, Esq.,
Tel: (212) 504- 6825; Fax: (212) 504-6666; and if to any of the Other Existing
Lenders, to such person and at the address and facsimile number provided in
Schedule II hereto. Each such notice, request or other communication shall be
effective when sent by facsimile transmission to the facsimile number or when
delivered by hand to the address specified in this Section 17 or Schedule II
hereto, provided that a facsimile transmission shall be deemed to have been sent
only so long as the transmitting machine has provided an electronic confirmation
of such transmission.
Section 18. Binding Effect; Third Party Beneficiaries. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
successors and permitted assigns, including any successor of the Company by
merger or any entity which purchases all or substantially all of the assets of
the Company, and to each of the other Creditors, each of which is an intended
third-party beneficiary hereof. Neither the Facility Lenders nor the Existing
Lender may sell, assign, participate or otherwise transfer or dispose of all or
any portion of the Loan or the Existing Obligations to any
<PAGE>
Person unless such Person shall have assumed and agreed to be bound by the terms
hereof by written instrument in form reasonably satisfactory to the Company and
each other Creditor.
Section 19. Counterparts; Section Headings. This Agreement may be
executed in any number of counterparts, each of which is an original, but all of
which together constitute but one instrument. Except as otherwise indicated,
references herein to any "Section" means a "Section" of this Agreement, and the
section headings in this Agreement are for purposes of reference only and shall
not limit or define the meaning hereof.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
IMC MORTGAGE COMPANY
By /s/
--------------------------------
Name:
Title:
PAINE WEBBER REAL ESTATE
SECURITIES INC.
By /s/
--------------------------------
Name:
Title:
<PAGE>
GREENWICH STREET CAPITAL PARTNERS II, L.P.
GSCP OFFSHORE FUND, L.P.
GREENWICH FUND, L.P.
By: GREENWICH STREET
INVESTMENTS II, L.L.C.,
their General Partner
By /s/
--------------------------------
Name:
Title:
<PAGE>
This Intercreditor Agreement is hereby acknowledged and agreed to by:
IMC CORPORATION OF AMERICA
IMC CREDIT CARD, INC.
IMC MORTGAGE COMPANY CANADA, LTD.
AMERICAN HOME EQUITY CORPORATION
IMC INVESTMENT CORPORATION
IMC INVESTMENT LIMITED PARTNERSHIP
ACG FINANCIAL SERVICES (IMC), INC.
AMERICAN MORTGAGE REDUCTION, INC.
CENTRAL MONEY MORTGAGE CO. (IMC), INC.
COREWEST BANC
EQUITY MORTGAGE CO. (IMC), INC.
IMCC INTERNATIONAL, INC.
MORTGAGE AMERICA (IMC), INC.
NATIONAL LENDING CENTER, INC.
NATIONAL LENDING CENTER TILT, INC.
NATIONAL LENDING GROUP, INC.
RESIDENTIAL MORTGAGE CORPORATION (IMC), INC.
By /s/
--------------------------------
Name:
Title:
GERMAN AMERICAN CAPITAL CORPORATION
By /s/
--------------------------------
Name:
Title:
By /s/
--------------------------------
Name:
Title:
<PAGE>
ASPEN FUNDING CORP.
By /s/
--------------------------------
Name:
Title:
BEAR STEARNS HOME EQUITY TRUST
By /s/
--------------------------------
Name:
Title:
By /s/
--------------------------------
Name:
Title:
<PAGE>
Schedule I
to the
Paine Webber Intercreditor Agreement
Other Existing Lenders
Master Repurchase Agreement, dated as of March 29, 1996, as amended from time to
time, by and among Bear Stearns Home Equity Trust and the Company and certain of
the Company's Subsidiaries.
Master Repurchase Agreement, dated as of May 1, 1997 Between Bear, Stearns
International Limited and Industry Mortgage Company, L.P.
Institutional Account Agreement, dated October 23, 1996, between and among
Industry Mortgage Company, L.P. and Bear Stearns.
Loan and Security Agreement, dated March 17, 1998, by and among IMC Mortgage
Company, IMC Corporation of America, ACG Financial Services (IMC), Inc.,
American Mortgage Reduction, Inc., Central Money Mortgage Co. (IMC), Inc.,
Corewest Banc, Equity Mortgage Co., (IMC), Inc., Mortgage America (IMC), Inc.,
National Lending Center, Inc., National Lending Center TILT, Inc, and
Residential Mortgage Corporation (IMC), Inc., as borrowers, and German American
Capital Corporation, as lender.
Loan and Security Agreement, dated March 17, 1998, by and among IMC Mortgage
Company, IMC Corporation of America, ACG Financial Services (IMC), Inc.,
American Mortgage Reduction, Inc., Central Money Mortgage Co. (IMC), Inc.,
Corewest Banc, Equity Mortgage Co., (IMC), Inc., Mortgage America (IMC), Inc.,
National Lending Center, Inc., National Lending Center TILT, Inc, and
Residential Mortgage Corporation (IMC), Inc., as borrowers, and Aspen Funding
Corp., as lender.
(i) Bridge Loan and Security Agreement, dated as of October 10, 1997, as amended
from time to time, by and among the Company, certain of its Subsidiaries and
BankBoston N.A., to which the Facility Lenders have succeeded by assignment, and
(ii) a Loan and Security Agreement, dated December 31, 1996, as amended from
time to time, by and among the Company, certain of its Subsidiaries and
BankBoston N.A., to which the Facility Lenders have succeeded by assignment.
<PAGE>
Schedule II
to the
Paine Webber Intercreditor Agreement
Notice Address for Other Existing Lenders
Bear, Stearns & Co., Inc.
if to Bear, Stearns: Bear Stearns & Co. Inc., 245 Park Avenue, New York, New
York 10167, Attn: Philip M. Cedar, Tel.: (212) 272-6768, Fax: (212) 272-4933 and
Paul Friedman, Tel.: (212) 272-3516, Fax: (212) 272-6550, with a copy to;
Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New York 10038, Attn.
Barry J. Dichter, Esq., Tel.: (212) 504-6000, Fax: (212) 504-6666;
Deutsche Lenders
if to Aspen Funding, to: Aspen Funding Corp. c/o Amacar Group, 6707D Fairview
Road, Charlotte, North Carolina 28210, Attn.: Douglas Johnson, tel.: (704)
375-0569, fax: (704) 365-1362, with a copy to: Deutsche Bank A.G., as agent, 31
West 52nd Street, New York, New York 10019, Attn.: Greg Amoroso, Tel.: (212)
469-3987, Fax: (212) 469-5160 and Richard Uhlig, Tel.: (212) 469-7730, Fax:
(212) 469-5103; and with a copy to Cadwalader, Wickersham & Taft, 100 Maiden
Lane, New York, New York 10038, Attn.: Karen Gelernt, Esq., Tel: (212) 504-6000,
Fax: (212) 504-6666
if to German American Corporation, to: German American Capital Corporation, 31
West 52nd Street, New York, New York 10019, Attn.: Vijay Radhakishun, Tel.:
(212) 469- 8925, Fax: (212) 469-5923, with a copy to: Deutsche Bank A.G., as
agent, 31 West 52nd Street, New York, New York 10019, Attn.: Greg Amoroso, Tel.:
(212) 469-3987, Fax: (212) 469-5160, and Richard Uhlig, Tel.: (212) 469-7730,
Fax: (212) 469-5103; and in either case described in clause (i) or (ii) above;
with a copy to Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New
York 10038, Attn.: Karen Gelernt, Esq., Tel: (212) 504-6000, Fax: (212) 504-6666
BankBoston Facility
if to the Facility Lenders, as successors in interest to BankBoston, to: the
address provided for notice to the Facility Lenders pursuant to Section 17 of
the foregoing Agreement
AMENDED AND RESTATED INTERCREDITOR AGREEMENT
(Deutsche Lenders)
AMENDED AND RESTATED INTERCREDITOR AGREEMENT, dated as of February 17,
1999, between IMC MORTGAGE COMPANY, a Florida corporation (the "Company"),
GREENWICH STREET CAPITAL PARTNERS II, L.P., a Delaware limited partnership,
GREENWICH FUND, L.P., a Delaware limited partner ship, GSCP OFFSHORE FUND, L.P.,
a Cayman Islands exempted limited partnership (each a "Facility Lender" and
collectively, the "Facility Lenders"), and GERMAN AMERICAN CAPITAL CORPORATION
("GAC") and ASPEN FUNDING CORP. ("Aspen", and collectively with GAC, the
"Existing Lenders"). Capitalized terms used in this Agreement without definition
have the meanings given to them in the Loan Agreement (as hereinafter defined)
as such terms are defined in the Loan Agreement on the date hereof (or as
amended by any amendment thereto approved by the Existing Lenders).
RECITALS
A. The Company has entered into a Loan Agreement, dated as of Octo ber
1 the Facility Lenders, pursuant to which the Facility Lenders have agreed to
extend to the Company Commitments to loan, in the aggregate, $33,000,000 (the
"Initial Loans"), subject to the terms and conditions set forth in the Initial
Loan Agreement, which Initial Loans are evidenced by the Notes (as defined in
the Initial Loan Agreement) and entitled to the benefit of certain guarantees
and security provided under certain of the other Loan Documents (as defined in
the Initial Loan Agreement).
B. Pursuant to (i) the Loan and Security Agreement, dated March 17,
1998, as amended from time to time, by and among the Company, IMC Corporation of
America, ACG Financial Services (IMC), Inc., American Mortgage Reduction, Inc.,
Central Money Mortgage Co. (IMC), Inc., Corewest Banc, Equity Mortgage Co.,
(IMC), Inc., Mortgage America (IMC), Inc., National Lending Center, Inc.,
National Lending Center TILT, Inc, and Residential Mortgage Corporation (IMC),
Inc., as borrowers, and GAC, as lender (the "GAC Agreement", and (ii) the Loan
and Security Agreement, dated March 17, 1998, as amended from time to time, by
and among the Company, IMC Corporation of America, ACG Financial Services (IMC),
Inc., American Mortgage Reduction, Inc., Central Money Mortgage Co. (IMC), Inc.,
Corewest Banc, Equity Mortgage Co., (IMC), Inc., Mortgage America (IMC), Inc.,
National Lending Center, Inc., National Lending Center TILT, Inc, and
Residential Mortgage Corporation (IMC), Inc., as borrowers, and Aspen Funding
Corp., as lender, (the "Aspen Loan Agreement", and collectively with the "GAC
Agreement", the "Existing Loan Agreements"), and other related agreements in
favor of the Existing Lenders (collectively with the Existing Loan Agreements,
the "Existing Loan Documents"), the Existing Lenders have agreed to provide on
an uncommitted basis, collateralized interim financing to the Company from
<PAGE>
time to time, to enable the Company to finance certain mortgage loans and for
other purposes provided therein; and the Company and certain of its Subsidiaries
have granted a security interest in the Collateral (as hereinafter defined) in
order to secure their respective obligations under the Existing Loan Documents
(the "Existing Obligations").
C. The Company intends to enter into an Agreement and Plan of Merger
(the "Merger Agreement"), dated as of February __, 1999, by and among Greenwich
Street Capital Partners II L.P., a Delaware limited partnership ("GSCP"), the
Company, IMC 1999 Acquisition Co., Inc., a Delaware corporation and a wholly
owned subsidiary of GSCP and its affiliates ("Acquisition"), pursuant to which
Acquisition would be merged with and into the Company and GSCP and its
affiliates would be issued common stock of the surviving corporation
representing approximately 93.5% of the outstanding common stock of the
surviving corporation (the "Merger").
D. In connection with the Merger Agreement, the Facility Lenders have
or intend to enter into (i) Amendment No. 1 to the Initial Loan Agreement
("Amendment No. 1"), providing for the Facility Lenders to extend to the Company
additional Commitments (the "Interim Commitments") to loan in the aggregate not
less than an additional $5,000,000 (the "Interim Loans") and (ii) an agreement
with Acquisition, dated as of February __, 1999, obligating the Facility
Lenders, upon consummation of the Merger, to enter into an amendment to the
Initial Loan Agreement, as amended (the "Amendment"), pursuant to which the
Facility Lenders will agree to extend to the Company Commitments to loan, in the
aggregate, an amount which, together with the Interim Commitments, will equal an
additional $40,000,000 (the "Additional Loans" and, together with the Initial
Loans and the Interim Loans, the "Loans"), subject to the terms and conditions
set forth in the Initial Loan Agreement, as amended by Amendment No. 1 and the
Amendment (as the same may be further modified, supplemented or restated from
time to time, the "Loan Agreement"), which Loans are evidenced by the Notes (as
defined in the Loan Agreement) and entitled to the benefit of certain guarantees
and security provided under certain of the other Loan Documents (as defined in
the Loan Agreement).
E. The Company, the Facility Lenders and the Existing Lenders have
previously entered into an Intercreditor Agreement, dated as of October 12, 1998
(the "Original Intercreditor Agreement"). In order to induce the Facility
Lenders to enter into the Amendment and GSCP to enter into the Merger Agreement,
the Facility Lenders, the Company, and the Existing Lenders have agreed to enter
into this agreement amending and restating the Original Intercreditor Agreement
(as so amended and restated, the "Intercreditor Agreement").
NOW THEREFORE, for good and valuable consideration, the receipt and
<PAGE>
sufficiency of which are hereby acknowledged, the Company, the Existing Lenders
and the Facility Lenders agree to amend and restate the Original Intercreditor
Agreement to read in its entirety as follows:
Section 1. Standstill. (a) Each of the Facility Lenders and the
Existing Lender agrees, subject to the terms of this Agreement, that for the
Standstill Period, it shall not:
(i) file or join in the filing of any involuntary petition in
bankruptcy with respect to the Company or its Subsidiaries, or initiate or
participate in any similar proceedings for the benefit of creditors,
including any proceeding for the appointment of a trustee, receiver,
conservator or liquidator of the Company or its Subsidiaries or any portion
of its assets;
(ii) seek to collect or enforce by litigation or otherwise, any
payment obligations under the Existing Loan Documents or the Loan
Documents; provided that nothing in this Section 1 shall prohibit the
Facility Lenders from exercising their Exchange Option;
(iii) make any Margin Calls or other demands for payment in respect
of, or additional collateral to secure the Existing Obligations; provided,
however, that this clause shall not adversely affect the right of the
Existing Lenders to take any actions to preserve, protect or perfect their
liens in the Collateral;
(iv) declare a default or event of default under, or exercise or
enforce any right or remedy under, or accelerate the maturity of any
Existing Obligation or Loan under, any Existing Loan Document or Loan
Document; or
(v) seek to attach, sequester or otherwise proceed against any of the
Collateral.
(b) The Standstill Period may be terminated by the Existing Lenders or
the Facility Lenders by written notice to the Company and each other Creditor
upon the occurrence of any of the following:
(i) a failure by the Company under the Existing Loan Agreement to make
to the Existing Lenders any scheduled payment of interest, which failure
continues unremedied for two days, or any payment of principal due in
respect of payoffs or prepayments of mortgage loans comprising any portion
of the Collateral or any payment of principal due pursuant to Section 5
hereof;
<PAGE>
(ii) any intentional fraud or misrepresentation by the Company;
(iii) immediately upon a failure of the Facility Lenders to make (x)
an Advance (as defined in the Initial Loan Agreement) under the Initial
Loan Agreement following a request of the Company thereunder, (y) an
Interim Loan under the Initial Loan Agreement as amended by Amendment No. 1
following a request by the Company thereunder or (z) immediately upon
consummation of the Merger, the Additional Loans under the Loan Agreement;
(iv) immediately in the event any Other Existing Lender takes any of
the actions described in Section 1(a) of its Other Intercreditor Agreement,
or, in the case of the Existing Lenders, immediately in the event any
Facility Lender takes any of the actions described in Section 1(a) of this
Agreement, or, in the case of the Facility Lenders, immediately in the
event either Existing Lender takes any of the actions described in Section
1(a) of this Agreement, in each case whether or not it shall have given
notice of termination of the Standstill Period.
(v) the condition contained in subclause (y) of clause (i) of the
definition of "Standstill Period" to the extension of the Standstill Period
beyond the date which is 150 days from and after the date hereof shall not
have been satisfied on or before such date;
(vi) a Change of Control or payment of the Take-Out Premium;
(vii) an event shall occur and be continuing for a period of ten
Business Days which permits any holder of indebtedness for borrowed money
of the Company or any Subsidiary outstanding (other than any Creditor) to
accelerate the maturity of such indebtedness or exercise remedies with
respect to property of the Company or any Subsidiary, without such
indebtedness being paid or the rights of such holder to take such action
being waived, stayed or subjected to a standstill or other agreement of
such holder to forbear from exercising remedies, reasonably satisfactory to
the Creditors;
(viii) the Company shall not have entered into the Merger Agreement
and Amendment No. 1 on or before February 19, 1999;
(ix) the independent servicer described in Section 5(h) of this
Agreement shall not have been retained on or before the date which is 30
days after the date of consummation of the Merger; and
<PAGE>
(x) the Company shall, at any time on or after the date of
consummation of the Merger, repay all or any portion of the Loans.
(c) The Standstill Period shall terminate automatically without notice
or other action by any Creditor upon the occurrence of any of the following:
(i) the Company or any Subsidiary shall consent to the appointment of
or taking possession by a receiver, assignee, custodian, sequestrator,
trustee or liquidator (or other similar official) of itself or of a
substantial part of its property; or the Company or any Subsidiary shall
admit in writing (to any creditor, governmental authority or judicial court
or tribunal) its inability to pay its debts generally as they come due or
shall fail generally to pay its debts as they become due, or shall make a
general assignment for the benefit of its creditors; or the Company or any
Subsidiary shall file a voluntary petition in bankruptcy or a volun tary
petition or answer seeking liquidation, reorganization or other relief with
respect to itself or its debts under the Federal bankruptcy laws, as now or
hereafter constituted or any other applicable Federal or State bankruptcy,
insolvency or other similar law, or shall consent to the entry of an order
for relief in an involun tary case under any such law; or the Company or
any Subsidiary shall file an answer admitting the material allegations of a
petition filed against the Company in any such proceeding, or otherwise
seek relief under the provisions of any existing or future Federal or State
bankruptcy, insolvency or other similar law providing for the
reorganization or winding-up of corporations, or providing for an
arrangement, agreement, composition, extension or adjustment with its
creditors; or the Company or any Subsidiary shall take or publicly announce
its intention to take corporate action in furtherance of any of the
foregoing; or
(ii) an order, judgment or decree shall be entered in any proceeding
by any court of competent jurisdiction appointing, without the consent of
the Company, a receiver, trustee or liquidator of the Company or any
Subsidiary or of any substantial part of its property, or any substantial
part of the property of the Company or any Subsidiary shall be sequestered,
and any such order, judgment or decree of appointment or sequestration
shall remain in force undismissed, unstayed or unvacated for a period of 30
days after the date of entry thereof; or
(iii) an involuntary petition against the Company or any Subsidiary in
a proceeding under the Federal bankruptcy laws or other insolvency
<PAGE>
laws, as now or hereafter in effect, shall be filed and shall not be
withdrawn or dismissed within 30 days thereafter, or a decree or order for
relief in respect of the Company or any Subsidiary shall be entered by a
court of competent jurisdiction in an involuntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or, under the provisions
of any law providing for reorganization or winding-up of corporations which
may apply to the Company, any court of com petent jurisdiction shall assume
jurisdiction, custody or control of the Company or any Subsidiary or of any
substantial part of its property and such jurisdiction, custody or control
shall remain in force unrelinquished, unstayed or unterminated for a period
of 30 days.
Section 2. Grant of Security Interest. (a) In order to secure full and
timely payment of the Obligations under the Loan Agreement, and to secure the
performance of all of the other obligations of the Company under the Loan
Documents, the Company and each Subsidiary hereby mortgages, pledges and assigns
and transfers to the Facility Lenders, and grants to the Facility Lenders, a
continuing perfected security interest in, and a lien in the Collateral. The
Facility Lenders agree to release their lien in respect of any whole loan
mortgage, which is sold by the Company to either Existing Lender for a purchase
price not less than the advance rate in respect of such mortgage.
(b) The Facility Lenders agree for the benefit of the Existing Lenders
that during the continuance of the Standstill Period and thereafter until the
earlier of (i) the satisfaction of the Existing Obligations in full, (ii) the
exercise by the Existing Lenders of any right to attach, sequester, foreclose or
otherwise exercise remedies with respect to the Collateral, and (iii) 180 days
after the expiration or earlier termination of the Standstill Period, the
Facility Lenders will not seek to attach, sequester, foreclose, levy on or
otherwise exercise remedies with respect to the Collateral, provided that
nothing herein shall restrict the Facility Lenders from commencing suit on its
Notes or for payment of its Loan or enforcement of any other obligation owing to
it under the Loan Documents.
Section 3. Acknowledgment and Priorities. (a) Each Existing Lender
hereby acknowledges and consents to the entrance by the Company into the Loan
Documents and the granting of the lien in the Collateral granted pursuant to
Section 2; provided, however, notwithstanding anything to the contrary contained
in the Loan Agreement, the Notes or any of the Loan Documents, the parties
hereto acknowledge and agree that any security interest in or other rights with
respect to any Collateral granted to secure the Existing Obligations under the
Existing Loan Agreements or otherwise has and shall have priority over any
security interest in such Collateral granted pursuant to this Agreement, the
Initial Loan Agreement, the Loan Agreement or the other Loan
<PAGE>
Documents irrespective of:
(i) the time, order or method of attachment or perfection of the
security interest created by this Agreement, the Initial Loan Agreement,
the Loan Agreement or any Loan Document;
(ii) the time or order of filing or recording of financing statements
or other documents filed or recorded to perfect security interests in any
Collateral;
(iii) anything contained in any filing or agreement to which the
Facility Lenders, the Company, the Collateral Agent under the Security
Documents now or hereafter may be a party, and
(iv) the rules for determining priority under the U.C.C. or other laws
governing the relative priorities of secured creditors.
(b) Each Existing Lender hereby agrees that, following payment in full
of all the Existing Obligations hereunder, any Collateral, including any books
and records (including, without limitation, computer files, printouts and other
computer materials and records) relating to the Collateral, as well as all
proceeds and products of such Collateral, held by it shall be held for the
benefit of the Facility Lenders, provided that if such Collateral is then
subject to the prior lien of another creditor, the Existing Lender may hold it
for the benefit of such other creditor and the Facility Lenders as their
interests may appear. If the Existing Lender has elected not to hold such
Collateral following payment in full of the Existing Obligations, it shall
promptly forward any Collateral, including any books and records (including,
without limitation, computer files, printouts and other computer materials and
records) relating to the Collateral, as well as all proceeds and products of
such Collateral, to the Collateral Agent.
(c) Nothing contained in this Agreement shall alter or impair the
Existing Lenders' rights under the Existing Loan Documents from and after the
termination of the Standstill Period in accordance herewith or be interpreted to
mean that the Existing Lenders have any obligation under the Existing Loan
Documents or otherwise to return any proceeds received on a sale or deemed sale
of any Pledged Securities or Mortgage Loans to the Company or any Subsidiary,
except as expressly provided herein.
Section 4. Reserved Rights. (a) Notwithstanding anything in this
Agreement to the contrary, the Company and the Facility Lenders agree that this
Agreement shall in no manner impair any right of the Existing Lenders under the
Existing Loan Agreements to enforce any condition precedent to any obligation it
may have
<PAGE>
thereunder to make future Advances to the Company and its Subsidiaries, nor
shall this Agreement limit the right of the Existing Lenders to make Margin
Calls in respect of the hedging transactions with respect to U.S. treasury
securities that the Company may have entered into with either Existing Lender
outside of the Existing Loan Documents. All rights and obligations of the
Existing Lenders under the Existing Loan Documents to make Advances or not make
Advances shall not be affected by this Agreement.
(b) In addition and notwithstanding anything to the contrary contained
herein, this Agreement shall not (i) apply to any Advances made from and after
the date hereof, or any other obligation of the Company or any of its
Subsidiaries to either Existing Lender or any of its Affiliates incurred from
and after the date hereof or (ii) limit the rights of either Existing Lender or
any Affiliate thereof (x) to purchase mortgage loans from the Company or any of
its Subsidiaries, (y) to receive principal and/or interest at the applicable
mortgage rate on mortgage loans purchased by such Existing Lender or any such
Affiliate from the Company or any of its Subsidiaries or (z) to sell mortgage
loans to the Company or any of its Subsidiaries.
Section 5. Fees; Amortization. (a) From and after the date this
Agreement becomes effective, (i) within five days following the effective date
hereof, in the case of any Available Cash Flow from Securitization Receivables
received prior to the effective date hereof for January and February 1999 and
(ii) within five days following the receipt by the Existing Lender each month of
Available Cash Flow from Securitization Receivables, the Existing Lender shall
apply the Applicable Percentage of such Available Cash Flow from Securitization
Receivables to repayment of principal of the Existing Obligations under the
Existing Loan Documents secured by the Pledged Securities generating such
Available Cash Flow from Securitization Receivables and shall remit the balance
of such Available Cash Flow from Securitization Receivables to the Company,
which may use such funds for general corporate purposes.
(b) Upon consummation of the first to occur of (i) the Merger or (ii) a
Change in Control, the Company shall pay the Existing Lenders a fee of
$1,000,000 in the aggregate payable in immediately available funds to such
account at such bank as the Existing Lenders may direct.
(c) Upon consummation of the Merger, the Company shall repay $1,500,000
of the principal of the Existing Obligations.
(d) The Company shall use its best efforts to sell or otherwise
liquidate each Mortgage Loan financed under the Existing Loan Documents which as
of the date of consummation of the Merger was a Delinquent Mortgage Loan and
apply the proceeds
<PAGE>
thereof to repayment of the amount advanced under the Existing Loan Documents
promptly upon receipt thereof. The Company shall repay the principal amount
outstanding under the Existing Loan Documents in an amount equal to the Mortgage
Loan Differential in respect of one third of such Delinquent Mortgage Loans on
the date of consummation of the Merger. In the event more than one-third in
aggregate principal amount of all such Delinquent Mortgage Loans remain
outstanding and have not been sold or liquidated by September 30, 1999, the
Company shall repay the principal amount outstanding under the Existing Loan
Documents in respect of a portion of such Delinquent Mortgage Loans which,
together with such Delinquent Mortgage Loans that are no longer outstanding or
have been sold or liquidated by September 30, 1999, represent two-thirds of all
such Delinquent Mortgage Loans in an amount equal to the Mortgage Loan
Differential. In the event any such Delinquent Mortgage Loan remains outstanding
and is not sold or liquidated by December 31, 1999, the Company shall repay the
principal amount outstanding under the Existing Loan Documents in respect of
such Delinquent Mortgage Loan in an amount equal to the Mortgage Loan
Differential.
(e) Within 15 days following the end of each month from and after the
consummation of the Merger, the Company shall repay the principal amount
outstanding under the Existing Loan Documents in respect of each Mortgage Loan
financed there under which during such calendar month and after the consummation
of the Merger first became, and as of the last day of such calendar month
remained, a Delinquent Mortgage Loan in an amount equal to the Mortgage Loan
Differential.
(f) The Company shall immediately repay the amount outstanding under
the Existing Loan Documents by the amount equal to the Net Proceeds of Sale of
Securi tization Receivables in respect of any Pledged Securities sold or
otherwise disposed of by the Company or any Subsidiary during such calendar
month. The Company shall not sell or otherwise dispose of any Pledged Securities
without the Existing Lenders' consent and without reaching agreement with the
Existing Lenders as to an appropriate reduction of the Minimum Repayment Amount,
such consent and agreement not to be unreasonably withheld or delayed by the
Existing Lenders or the Company. The parties agree that it would be reasonable
for either Existing Lender to withhold its consent to the sale of any Pledged
Securities if, in its sole discretion, the Existing Lender concludes that such
sale will impair its ability to be paid the Existing Obligations, the selling
price for the Pledged Securities should be higher or the Pledged Securities have
not been adequately marketed.
(g) Within one day following the end of each calendar month commencing
with the calendar month in which the date of the consummation of the
<PAGE>
Merger is deemed to occur, the Company shall repay the principal amount
outstanding under the Existing Loan Documents by an amount equal to the excess,
if any, of the Minimum Repayment Amount for the applicable period specified in
clause (a) through (l), both inclusive, of the definition of "Minimum Repayment
Amount", over the aggregate amount applied to such repayment in respect of such
period pursuant to Section 5(a) and this Section 5(g).
(h) The Company shall use best efforts to retain the services of a
rated and approved independent servicer with expertise in servicing delinquent
mortgage loans to assist it in servicing Delinquent Mortgage Loans.
(i) The Company shall, on the date three months after the date hereof,
repay any existing Advances, which Advances were outstanding as of October 12,
1998, secured by Mortgage Loans other than Delinquent Mortgage Loans. With
respect to each Advance secured by Mortgage Loans other than Delinquent Mortgage
Loans made under the Existing Loan Agreements on or after October 12, 1998, the
Company shall repay such Advance on the date which is six months after such
Advance was made. Upon payment of any such Advance in full, the Existing Lenders
shall release the related Mortgage Loan from the lien of the Existing Loan
Documents. In the event the Company realizes net proceeds from the sale of any
such Mortgage Loans so released in excess of the aggregate amount of Advances so
repaid pursuant to this Section 5(i), the Company will promptly apply such
excess to the repayment of other Advances then outstanding.
(j) In the event the Company shall fail to pay when due any amount due
to the Existing Lender under this Agreement, the Existing Lender may set off
such amount against Available Cash Flow from Securitization Receivables or
payments on Pledged Loans otherwise payable to the Company hereunder.
Section 6. Condition Precedent. The effectiveness of this Agreement
shall be subject to the condition that each of the other existing lenders listed
on Schedule I (the "Other Existing Lenders") shall have entered into an Other
Intercreditor Agreement in the form annexed hereto. The Company shall furnish
the Existing Lenders complete and correct copies of each such Other
Intercreditor Agreement within one business day of its execution.
Section 7. Certain Definitions.
"Additional Collateral" means cash or additional collateral reasonably
acceptable to the Existing Lenders transferred to either Existing Lender
pursuant to the applicable Existing Loan Agreement.
<PAGE>
"Advance" means advances made by either Existing Lender to the Company
or any Borrower, pursuant to the terms and conditions of the applicable Existing
Loan Agreement.
"Affiliate" means, with respect to any Person, any other Person which,
directly or indirectly controls, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" (together with the
correlative meanings of "controlled by" and "under common control with") means
possession, directly or indirectly, of the power (a) to vote 20% or more of the
securities (on a fully diluted basis) having ordinary voting power for the
directors or managing general partners (or their equivalent) of such Person, or
(b) to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by contract, or
otherwise.
"Applicable Percentage" means (i) for January 1999, 43.33%, (ii) for
each calendar month commencing on or after February 1, 1999 to the date of
consummation of the Merger, 65%, (iii) for the first six calendar months
commencing on or after the date of the consummation of the Merger, 65%, and (iv)
for the next six months, 70%. For purposes of applying the foregoing, if the
date of consummation of the Merger occurs on or before the fifteenth day of a
month, the Merger shall be deemed to have been consummated as of the first day
of such month, and if the date of consummation of the Merger occurs after the
fifteenth day of a month, then the Merger shall be deemed to have been
consummated as of the first day of the succeeding month.
"Assets" means the collective reference to Mortgage Loans, Lender
Mortgage and Pledged Securities.
"Available Cash Flow from Securitization Receivables" means the amount
of any distribution with respect to, or prepayment of, any Pledged Securities.
"Borrowers" means any of IMC Mortgage Company, IMC Corporation of
America, ACG Financial Services (IMC), Inc., American Mortgage Reduction, Inc.,
Central Money Mortgage Co. (IMC), Inc., CoreWest Banc, Equity Mortgage Co.
(IMC), Inc., American Home Equity Corporation, Mortgage America (IMC), Inc.,
National Lending Center, Inc., National Lending Center TILT, Inc., National
Lending Group, Inc. and any additional Persons that may become Borrowers under
either Existing Loan Agreement.
"Cash Collateral Account" means a cash collateral account established
and
<PAGE>
maintained by the Existing Lenders pursuant to the terms and conditions of the
Existing Loan Agreements.
"Change of Control" means the occurrence of any of the following events
(other than as a consequence of the issuance of the Preferred Stock to the
Facility Lenders upon exercise of the Exchange Option or the consummation of the
Merger):
(i) any "Person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have "beneficial ownership" of all shares that any such Person
has the right to acquire within one year), directly or indirectly, of more
than 50% of the Voting Stock of the Company; or
(ii) the Company consummates any sale, lease, exchange or other
disposition of all or substantially all of the assets of the Company and
its Subsidiaries, taken as a whole, in any transaction or series of
transactions not in the ordinary course of business; or
(iii) the Company engages in a merger, consolidation or similar
business combination with any third party.
"Collateral" means all of the Company's or any Borrower's right, title
and interest in, to and under each of the following items of property, whether
now owned or hereafter acquired, now existing or hereafter created and wherever
located:
all Assets;
all Collateral Documents, including without limitation all promissory
notes relating to or evidencing the Assets, and all Servicing Records, servicing
agreements and any other collateral pledged or otherwise relating to such
Collateral, together with all files, documents, instruments, surveys,
certificates, correspondence, appraisals, computer programs, computer storage
media, accounting records and other books and records relating thereto;
all securities, monies or property representing dividends or interest
on any of the foregoing, or representing a distribution in respect of the
foregoing, or resulting from a split-up, revision, reclassification or other
like change of the foregoing or otherwise received in exchange therefor, and any
subscription warrants, rights or options issued to the holders of, or otherwise
in respect of, the foregoing;
<PAGE>
all Pooling and Servicing Agreements;
all Collection Accounts and amounts on deposit therein;
all Cash Collateral Accounts and amounts on deposit therein;
all guaranties and insurance (issued by governmental agencies or
otherwise including without limitation, FHA Mortgage Insurance) and any
insurance certificate or other document evidencing such guaranties or insurance
relating to any item of Collateral and all claims and payments thereunder;
all other insurance policies and insurance proceeds relating to any
item of Collateral;
all Interest Rate Protection Agreements;
all Additional Collateral provided to the Existing Lenders;
all of the Company's or any Borrower's rights, but not their
obligations, under any purchase agreements and servicing agreements and all
servicing rights covering or relating to any item of the Collateral to which the
Company or any of the Borrowers are a party;
all "general intangibles" as defined in the Uniform Commercial Code
relating to or constituting any and all of the items listed in the foregoing
items;
any other right, interest or property of the Company or any Subsidiary
now or hereafter securing the performance by the Company or any Subsidiary of
the Existing Obligations; and
any and all replacements, substitutions, distributions on or proceeds
of any and all of the foregoing.
"Collateral Documents" means, with respect to the items of Collateral,
the documents comprising the Collateral File for such Collateral.
"Collateral File" means, with respect to each Mortgage Loan, those
documents that are delivered to the Custodian or which at any time come into the
possession of the Custodian, pursuant to the terms and conditions of either
Custodial
<PAGE>
Agreement.
"Collection Account" means a collection account established and
maintained by the Existing Lenders pursuant to the terms and conditions of the
Existing Loan Agreements.
"Common Stock" means the Company's common stock, par value $0.01 per
share.
"Company" means IMC Mortgage Company, a Florida corporation, and any
successor by merger and any entity purchasing all or substantially all of the
assets of the Company.
"Creditor" means any of the Facility Lenders, the Existing Lenders or
any Other Existing Lender.
"Custodial Agreements" means separate Custodial Agreements by among the
Company, certain of its Subsidiaries, Custodian and each Existing Lender, as the
same shall be modified and supplemented and in effect from time to time.
"Custodian" means BankBoston, N.A., as custodian under the Custodial
Agreements, and its successors and permitted assigns thereunder.
"Delinquent Mortgage Loan" means any Mortgage Loan which, as of any
date of determination, is more than 90 days delinquent in payment of any
principal or interest due thereunder.
"FHA" means the Federal Housing Administration, an agency within the
United States Department of Housing and Urban Development, or any successor
thereto and including the Federal Housing Commissioner and the Secretary of
Housing and Urban Development where appropriate under the FHA Regulations.
"FHA Loan" means a Mortgage Loan which is the subject of FHA Mortgage
Insurance.
"FHA Mortgage Insurance" means mortgage insurance authorized under the
National Housing Act, as amended from time to time, and provided by the FHA.
<PAGE>
"FHA Regulations" means regulations promulgated by HUD under the
National Housing Act, codified in 24 Code of Federal Regulations, and other HUD
issuances relating to FHA Loans, including the related handbooks, circulars,
notices and mortgagee letters.
"FNMA" means the Federal National Mortgage Association, or any
successor thereto.
"HUD" means the Department of Housing and Urban Development, or any
federal agency or official thereof which may from time to time succeed to the
functions thereof with regard to FHA Mortgage Insurance, including subdivisions
thereof such as the FHA.
"Interest Rate Protection Agreement" means, with respect to any or all
of the Mortgage Loans, any short sale of a US Treasury Security, or futures
contract, or mortgage related security, or Eurodollar futures contract, or
options related contract, or interest rate swap, cap or collar agreement or
similar arrangements providing for protection against fluctuations in interest
rates or the exchange of nominal interest obligations, either generally or under
specific contingencies.
"Lender Mortgage" means, with respect to any REO Property owned or to
be owned by the Borrowers a duly executed and recorded mortgage, deed of trust
or similar instrument in favor of either Existing Lender on such REO Property,
which Lender Mortgage shall (A) name either Existing Lender as the mortgagee
thereon or the benefi ciary thereof and (B) be on a FNMA uniform instrument (or
another form acceptable to the Existing Lenders).
"Lien" means, as defined in the Uniform Commercial Code in effect in
any jurisdiction, with respect to the mortgages, liens, pledges, charges,
security interests or similar encumbrances created pursuant to the applicable
Existing Loan Agreement.
"Margin Call" means the right of the Existing Lenders to give notice to
require the Company or any Subsidiary to transfer to the Existing Lenders cash
or additional collateral.
"Minimum Repayment Amount" means for each of the one- through
twelve-month periods commencing with the calendar month in which the date of the
consummation of the Merger is deemed to occur, the applicable amount as follows:
(a) first month, $333,000 (b) first two months, $666,000, (c) first three
months, $1,000,000, (d) first four months, $2,000,000, (e) first five months,
$3,000,000, (f) first
<PAGE>
six months, $4,000,000, (g) first seven months, $5,166,000, (h) first eight
months, $6,333,000, (i) first nine months, $7,500,000, (j) first ten months,
$8,666,000, (k) first eleven months, $9,833,000, and (l) twelve months,
$11,000,000. For purposes of applying the foregoing, if the date of consummation
of the Merger occurs on or before the fifteenth day of a month, then the Merger
shall be deemed to have been consummated as of the first day of such month, and,
if the date of consummation of the Merger occurs after the fifteenth day of a
month, then the Merger shall be deemed to have been consummated as of the first
day of the succeeding month.
"Mortgage" means the mortgage, deed of trust or other instrument
securing a Mortgage Note, which creates a first lien on the fee in real property
securing the Mortgage Note.
"Mortgage Loan" means a mortgage loan which the Custodian has been
instructed to hold for the applicable Existing Lender pursuant to a Custodial
Agreement, and which Mortgage Loan includes, without limitation, (i) a Mortgage
Note and related Mortgage and (ii) all of the Company's or any Borrowers' right,
title and interest in and to the Mortgaged Property covered by such Mortgage.
"Mortgage Loan Differential" means, with respect to any Delinquent
Mortgage Loan, the excess of the amount originally advanced by the applicable
Existing Lender to the Company under the applicable Existing Loan Agreement in
respect of such Delinquent Mortgage Loan, reduced by any amount previously
applied in reduction of the principal amount outstanding under the applicable
Existing Loan Agreement in respect of such Delinquent Mortgage Loan pursuant to
Section 5(d) and Section 5(e) hereof, over an amount equal to 80% of the unpaid
principal amount of such Mortgage Loan at the time of such advance.
"Mortgage Note" means the original executed promissory note or other
evidence of the indebtedness of a mortgagor/borrower with respect to a Mortgage
Loan.
"Mortgaged Property" means the real property (including all
improvements, buildings, fixtures, building equipment and personal property
thereon and all additions, alterations and replacements made at any time with
respect to the foregoing) and all other collateral securing repayment of the
debt evidenced by a Mortgage Note.
"Mortgagor" means the obligor on a Mortgage Note.
"Net Proceeds of Sale of Securitization Receivables" means the
proceeds, net of any reasonable out-of-pocket costs of sale or disposition,
realized by the Company
<PAGE>
or any Subsidiary from any sale, lease or other disposition of any Pledged
Securities.
"Original BankBoston Forbearance Agreement" means the Forbearance and
Intercreditor Agreement, dated as of October 12, 1998, between the Company, the
Facility Lenders and BankBoston, N.A.
"Other Existing Lenders" has the meaning specified in Section 6.
"Other Intercreditor Agreements" means the separate intercreditor
agreements among the Company, an Other Existing Lender and the Facility Lenders.
"Person" means any individual, corporation, company, voluntary
association, partnership, joint venture, limited liability company, trust,
unincorporated association or government (or any agency, instrumentality or
political subdivision thereof).
"Pledged Securities" means the Subordinated Securities pledged to an
Existing Lender from time to time and held by such Existing Lender as Collateral
under the applicable Existing Loan Agreement.
"Pooling and Servicing Agreement" means any pooling and servicing
agreement, sale and servicing agreement, trust agreement or other agreement
pursuant to which the Mortgage Loans ultimately underlying any of the Pledged
Securities are serviced or administered or the Pledged Securities are issued or
exchanged.
"REO Property" means a fee in real property acquired by the Borrowers
pursuant to or in connection with a purchase agreement, including a Mortgaged
Property acquired through foreclosure of a Mortgage Loan or by deed in lieu of
such foreclosure.
"Securitization Transaction" means all underwritings or private
placements of (1) securities issued by or sponsored by and (2) backed by
Mortgage Loans or substantially similar assets acquired by or owned by Borrowers
or the Company (or any of their respective Affiliates), including without
limiting the generality of the foregoing, any of either entity's securitization
and other collateralized term financing transactions that involve Mortgage Loans
or substantially similar assets.
"Servicing Records" means any and all servicing agreements, files,
documents, records, data bases, computer tapes, copies of computer tapes, proof
of insurance coverage, insurance policies, appraisals, other closing
documentation, payment
<PAGE>
history records, and any other records relating to or evidencing the servicing
of Collateral.
"Standstill Period" means a period ending on the first to occur of (i)
the later of (x) 150 days from and after the date hereof and (y) one year from
and after the date of consummation of the Merger, if the Company shall have, on
or before the 150th day from and after the date hereof, consummated the Merger
and delivered (by facsimile transmission or otherwise in accordance with Section
16 hereof) to each Creditor confirmation thereof, (ii) termination of the
Standstill Period in accordance with Section 1(b) or (c) hereof or (iii)
termination of the Merger Agreement.
"Subordinated Securities" means interest-only strips, residual
interests, subordinated interests or reserve certificates issued and transferred
to the Debtor or Borrowers in connection with any Securitization Transaction or
any other collateral as the Secured Party may deem appropriate.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect on the date hereof in the State of New York.
Section 8. Notice of Advances under the Loan Agreement, etc. (a) The
Company shall give prior written notice to the Existing Lenders of each request
for an Additional Advance under Section 2.10 of the Initial Loan Agreement as
amended by Amendment No. 1 contemporaneously with making such request to the
Facility Lenders. The Company shall give written notice to the Existing Lenders
immediately upon either the funding of an Additional Advance (together with such
evidence thereof as the Existing Lenders may reasonably request) or the refusal
of Facility Lender to fund such Additional Advance, as the case may be.
(b) The Company shall give each Creditor prompt written notice of any
event which upon notice or lapse of time or both would constitute an event of
default in respect of any of its outstanding Debt.
(c) The Company shall give the Existing Lenders and the Facility
Lenders prompt written notice of any event that would permit termination of the
Standstill Period pursuant to clauses (iii), (iv), (vi), (vii), (viii), (ix) or
(x) of Section 1(b) hereof.
(d) The Company shall give the Existing Lenders prompt written notice
of the entering into of the Merger Agreement and Amendment No. 1, the
consummation of the Merger, the entering into of the Amendment and the funding
by the Facility Lenders
<PAGE>
of the advances thereunder.
(e) Notwithstanding the provisions of the Existing Loan Agreement,
during the Standstill Period, the Company shall pay interest on the principal
amount outstanding under the Existing Loan Agreement to the Existing Lenders
weekly on Friday of each week or, if Friday is not a Business Day, on the next
Business Day.
(f) The Company shall not repay any principal outstanding under the
Loan Agreement during the Standstill Period.
(g) During the Standstill Period (without limiting any obligations
under the Existing Loan Documents), the Company shall deliver to the Existing
Lenders at the same time it delivers to the Facility Lenders, the Disclosure
Letter, the Three-Month Business Plan, any Updated Business Plan and all other
financial statements and reports required to be provided to the Facility Lenders
pursuant to Section 5.5 of the Loan Agreement.
Section 9. Acknowledgment of Obligations. The Company acknowledges that
its obligations under the Existing Loan Documents and the lien on the Collateral
securing the Existing Obligations remain in full force and effect, and that the
Company has no defenses, counterclaims or offsets to its obligations under the
Existing Loan Documents and that such liens are valid, perfected and
enforceable. The Company hereby waives the application of the automatic stay in
any bankruptcy proceeding in respect of the Existing Obligations and the
obligations under the Loan Documents and the Company and each Creditor consents
to the modification of the stay to permit the exercise by the Existing Lenders
or the Facility Lenders of their rights in respect of the Collateral, provided
that the foregoing shall not be construed to modify the provisions of Sections
2(b) and 3 hereof. This document shall not constitute a waiver, amendment or
modification of the Existing Loan Documents, the Existing Obligations or the
Loan Documents except as expressly referred to herein and shall not be construed
as a waiver or consent to any future action on the part of the Company that
would require a waiver or consent of the Existing Lenders or the Facility
Lenders, respectively, except to the extent expressly provided herein.
Section 10. Amendments, Etc. No amendment, modification, supplement,
termination, consent or waiver of this Agreement or any term or provision of
this Agreement shall be effective and binding unless in writing and signed by
the Existing Lenders, the Other Existing Lenders and the Facility Lenders. Any
such waiver will be effective only in the specific instance and for the specific
purpose for which it is given.
<PAGE>
Section 11. Severability. Any provision of this Agreement which is
illegal, invalid, prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such illegality, invalidity,
prohibition or unenforceability without invalidating or impairing the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
Section 12. No Bankruptcy Suits. The Facility Lenders agree that they
will not institute against or join any other person in instituting against Aspen
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding, or other proceeding under any federal or state bankruptcy or similar
law, for one year and a day after the latest maturing commercial paper note
issued by Aspen is paid in full.
Section 13. Letter Agreement. The Company and the Facility Lenders
agree that notwithstanding any of the provisions of this Agreement, this
Agreement does not supersede the provisions of the (i) the Letter Agreement
regarding certain issues in connection with the Existing Loan Agreements, dated
as of October 12, 1998 by and between the Company and the Existing Lenders and
(ii) the Letter Agreement re: DBS Underwriting Mandate, dated October 12, 1998,
as amended, between Deutsche Bank Securities and IMC Mortgage Company and each
such Letter Agreement shall remain in full force and effect in conformance with
the terms thereof.
Section 14. Additional Payments. In the event that the Company or any
Affiliate proposes to sell or otherwise liquidate any Pledged Securities (or any
securitization receivables pledged or transferred to any Other Existing Lender
having the right to receive all or a portion of the proceeds of such sale or
liquidation) at a time when the amount of the Existing Obligations secured by
such Pledged Securities (or the amount of the Existing Obligations (as defined
in an Other Intercreditor Agreement) owing to such an Other Existing Lender
secured by, or subject to repurchase obligations in respect of, such other
securitization receivables) remaining outstanding is or would, after giving
effect to any payment required to be made upon such sale or liquidation, be less
than 40% of such Existing Obligations as of the date this Agreement became
effective and which is in addition to the payments contemplated under the
provisions of Section 5 of this Agreement or Section 5 of any Other
Intercreditor Agreement or the Original Forbearance and Intercreditor Agreement,
each as may be amended from time to time (including, without limitation, any
amounts received on account of sales of Pledged Securities (or such
securitization receivables) pursuant to Section 5(f) which cause the amount
received pursuant to Section 5(a) and 5(f) in a given month to exceed the
Minimum Repayment Amount), the Company shall not effect any such sale or
liquidation unless it shall take such steps as may be necessary to cause
payments to be made in
<PAGE>
respect of the Existing Obligations and the Existing Obligations (as defined in
the Other Intercreditor Agreements) owing to such Other Existing Lenders on a
pro rata basis calculated based on the respective outstanding principal balance
of such Existing Obligations owing to each Existing Lender and each such Other
Existing Lender.
Section 15. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL OR EQUITABLE
ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY
TRANSACTION CONTEMPLATED HEREBY OR THE RELATIONSHIP ESTABLISHED HEREUNDER.
Section 16. GOVERNING LAW; VENUE AND JURISDICTION. THE VALIDITY OF THIS
AGREEMENT, THE CONSTRUCTION, INTERPRETATION AND ENFORCEMENT HEREOF AND THE
RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES THEREOF. EACH OF THE PARTIES HERETO
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF, AND AGREES THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT MAY BE TRIED AND LITIGATED
IN, FEDERAL OR, IN THE ABSENCE OF FEDERAL SUBJECT MATTER JURISDICTION, STATE
COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK UNLESS SUCH ACTIONS
OR PROCEEDINGS ARE REQUIRED TO BE BROUGHT IN ANOTHER COURT TO OBTAIN SUBJECT
MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF THE PARTIES WAIVES,
TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO
ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE IN ANY PROCEEDING BROUGHT IN ACCORDANCE WITH
THE IMMEDIATELY PRECEDING SENTENCE. SERVICE OF PROCESS, SUFFICIENT FOR PERSONAL
JURISDICTION IN ANY ACTION AGAINST SUCH PARTY MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS ADDRESS INDICATED IN SEC TION
19.
Section 17. Expenses. In addition to the foregoing, the Company will
also reimburse the Existing Lenders and the Facility Lenders promptly for their
reasonable out-of-pocket costs and expenses incurred by such Persons or their
respective employees, agents or advisors in connection with the performance of
their respective
<PAGE>
obligations and duties hereunder and, to the extent the Existing Loan Documents
so provide, under the Existing Loan Documents, and for any reasonable fees and
expenses of legal or other professional advisors to the Existing Lenders and the
Facility Lenders engaged in connection with the preparation and negotiation of
this Agreement and review and negotiation of all related documents, including
the Merger Agreement, Loan Agreement, and monitoring performance of all related
documents. If such fees are not paid by the Company within 30 days of
submission, the Existing Lenders may pay such fees from Available Cash Flow from
Securitization Receivables and payments on Mortgage Loans.
Section 18. Agreement May Constitute Financing Statement. The Company
and the Existing Lenders consent to the filing of this Agreement or a photocopy
thereof as a financing statement under the UCC as in effect in any jurisdiction
in which the Facility Lenders may determine such filing to be necessary or
desirable.
Section 19. Notices. All notices, requests and other communications to
any party hereunder shall be in writing and shall be given to such party by
facsimile transmission or by hand delivery at the following address or facsimile
number, or such other address or facsimile number as such party may hereafter
specify for the purpose by notice to the other party and each other Creditor,
(a) if to the Facility Lenders, Greenwich Street Capital Partners II, L.P., c/o
Greenwich Street Capital Partners, Inc., 388 Greenwich Street, New York, New
York 10013, Attn.: Sanjay Patel; Tel: (212) 816- 1149, Fax: (212) 816-0166; with
a copy to Debevoise & Plimpton, 875 Third Avenue, New York, New York 10022,
attention: Steven Ostner, Tel: (212) 909-6000, Fax: (212) 909-6836; (b) if to
the Company, IMC Mortgage Company, 5901 E. Fowler Avenue, Tampa, Florida
33617,Attn.: President, Tel: (813) 984-2533, Fax: (813) 984-2593; with a copy to
Mitchell W. Legler, 300A Wharfside Way, Jacksonville, Florida 32207.; and (c)
and if to the Existing Lenders: (i) in the case of Aspen, to: Aspen Funding
Corp. c/o Amacar Group, 6707D Fairview Road, Charlotte, North Carolina 28210,
Attn.: Douglas Johnson, tel.: (704) 375-0569, fax: (704) 365-1362, with a copy
to: Deutsche Bank A.G., as agent, 31 West 52nd Street, New York, New York 10019,
Attn.: Greg Amoroso, Tel.: (212) 469-3987, Fax: (212) 469-5160 and Richard
Uhlig, Tel.: (212) 469-7730, Fax: (212) 469-5103; (ii) in the case of GAC, to:
German American Capital Corporation, 31 West 52nd Street, New York, New York
10019, Attn.: Vijay Radhakishun, Tel.: (212) 469-8925, Fax: (212) 469-5923, with
a copy to: Deutsche Bank A.G., as agent, 31 West 52nd Street, New York, New York
10019, Attn.: Greg Amoroso, Tel.: (212) 469-3987, Fax: (212) 469-5160, and
Richard Uhlig, Tel.: (212) 469-7730, Fax: (212) 469-5103; and in either case
described in clause (i) or (ii) above; with a copy to Cadwalader, Wickersham &
Taft, 100 Maiden Lane, New York, New York 10038, Attn.: Karen Gelernt, Esq.,
Tel: (212) 504-6000, Fax: (212) 504-6666; and if to any of the
<PAGE>
Other Existing Lenders, to such person and at the address and facsimile number
provided in Schedule II hereto. Each such notice, request or other communica
tion shall be effective when sent by facsimile transmission to the facsimile
number or when delivered by hand to the address specified in this Section 19 or
such section of Schedule II hereto, provided that a facsimile transmission shall
be deemed to have been sent only so long as the transmitting machine has
provided an electronic confirmation of such transmission.
Section 20. Binding Effect; Third Party Beneficiaries. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
successors and permitted assigns, including any successor of the Company by
merger or any entity which purchases all or substantially all of the assets of
the Company, and to each of the other Creditors, each of which is an intended
third-party beneficiary hereof. Neither the Facility Lenders nor the Existing
Lenders may sell, assign, participate or otherwise transfer or dispose of all or
any portion of the Loan or the Existing Obligations to any Person unless such
Person shall have assumed and agreed to be bound by the terms hereof by written
instrument in form reasonably satisfactory to the Company and each other
Creditor.
Section 21. Counterparts; Section Headings. This Agreement may be
executed in any number of counterparts, each of which is an original, but all of
which together constitute but one instrument. Except as otherwise indicated,
references herein to any "Section" means a "Section" of this Agreement, and the
section headings in this Agreement are for purposes of reference only and shall
not limit or define the meaning hereof.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
IMC MORTGAGE COMPANY
By /s/
--------------------------------
Name:
Title:
By /s/
--------------------------------
Name:
Title:
GERMAN AMERICAN CAPITAL
CORPORATION
By /s/
--------------------------------
Name:
Title:
By /s/
--------------------------------
Name:
Title:
ASPEN FUNDING CORP.
By /s/
--------------------------------
Name:
Title:
<PAGE>
GREENWICH STREET CAPITAL PARTNERS II, L.P.
GSCP OFFSHORE FUND, L.P.
GREENWICH FUND, L.P.
By: GREENWICH STREET
INVESTMENTS II, L.L.C.,
their General Partner
By: /s/
----------------------------
Name:
Title: Managing Member
<PAGE>
This Intercreditor Agreement is hereby
acknowledged and agreed to by:
IMC CORPORATION OF AMERICA
IMC CREDIT CARD, INC.
IMC MORTGAGE COMPANY CANADA, LTD.
IMC SECURITIES INC.
AMERICAN HOME EQUITY CORPORATION
IMC INVESTMENT CORPORATION
IMC INVESTMENT LIMITED PARTNERSHIP
ACG FINANCIAL SERVICES (IMC), INC.
AMERICAN MORTGAGE REDUCTION, INC.
CENTRAL MONEY MORTGAGE CO. (IMC), INC.
COREWEST BANC
EQUITY MORTGAGE CO. (IMC), INC.
IMCC INTERNATIONAL, INC.
MORTGAGE AMERICA (IMC), INC.
NATIONAL LENDING CENTER, INC.
NATIONAL LENDING CENTER TILT, INC.
NATIONAL LENDING GROUP, INC.
RESIDENTIAL MORTGAGE CORPORATION (IMC), INC.
By /s/
----------------------------------
Name:
Title:
PAINE WEBBER REAL ESTATE SECURITIES INC.
By: /s/
----------------------------------
Name:
Title:
<PAGE>
BEAR STEARNS HOME EQUITY TRUST
By: /s/
----------------------------------
Name:
Title:
BEAR STEARNS INTERNATIONAL LIMITED
By: /s/
----------------------------------
Name:
Title:
<PAGE>
Schedule I
to the
Deutsche Lenders Intercreditor Agreement
Other Existing Lenders
Master Repurchase Agreement, dated as of March 29, 1996, as amended from time to
time, by and among Bear Stearns Home Equity Trust and the Company and certain of
the Company's Subsidiaries.
Master Repurchase Agreement, dated as of May 1, 1997 between Bear, Stearns
International Limited and Industry Mortgage Company, L.P.
Institutional Account Agreement, dated October 23, 1996, between and among
Industry Mortgage Company, L.P. and Bear Stearns.
Loan and Security Agreement, dated as of February 28, 1997, between IMC Mortgage
Company, IMC Corporation of America, ACG Financial Services (IMC), Inc.,
American Mortgage Reduction, Inc., Industry Mortgage Company, L.P., Corewest
Banc, IMC Investment Corp., and IMC Investment Limited Partnership, as
borrowers, and Paine Webber Real Estate Securities, Inc., as lender.
(i) Bridge Loan and Security Agreement, dated as of October 10, 1997, as amended
from time to time, by and among the Company, certain of its Subsidiaries and
BankBoston N.A., to which the Facility Lenders have succeeded by assignment, and
(ii) a Loan and Security Agreement, dated December 31, 1996, as amended from
time to time, by and among the Company, certain of its Subsidiaries and
BankBoston N.A., to which the Facility Lenders have succeeded by assignment.
<PAGE>
Schedule II
to the
Deutsche Lenders Intercreditor Agreement
Notice Address for Other Existing Lenders
Bear, Stearns & Co., Inc.
if to Bear, Stearns: Bear Stearns & Co. Inc., 245 Park Avenue, New York, New
York 10167, Attn: Philip M. Cedar, Tel.: (212) 272-6768, Fax: (212) 272-4933 and
Paul Friedman, Tel.: (212) 272-3516, Fax: (212) 272-6550, with a copy to;
Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New York 10038, Attn.
Barry J. Dichter, Esq., Tel.: (212) 504-6000, Fax: (212) 504-6666;
Deutsche Lenders
if to Aspen Funding, to: Aspen Funding Corp. c/o Amacar Group, 6707D Fairview
Road, Charlotte, North Carolina 28210, Attn.: Douglas Johnson, tel.: (704)
375-0569, fax: (704) 365-1362, with a copy to: Deutsche Bank A.G., as agent, 31
West 52nd Street, New York, New York 10019, Attn.: Greg Amoroso, Tel.: (212)
469-3987, Fax: (212) 469-5160 and Richard Uhlig, Tel.: (212) 469-7730, Fax:
(212) 469-5103; and with a copy to Cadwalader, Wickersham & Taft, 100 Maiden
Lane, New York, New York 10038, Attn.: Karen Gelernt, Esq., Tel: (212) 504-6000,
Fax: (212) 504-6666
if to German American Corporation, to: German American Capital Corporation, 31
West 52nd Street, New York, New York 10019, Attn.: Vijay Radhakishun, Tel.:
(212) 469- 8925, Fax: (212) 469-5923, with a copy to: Deutsche Bank A.G., as
agent, 31 West 52nd Street, New York, New York 10019, Attn.: Greg Amoroso, Tel.:
(212) 469-3987, Fax: (212) 469-5160, and Richard Uhlig, Tel.: (212) 469-7730,
Fax: (212) 469-5103; and in either case described in clause (i) or (ii) above;
with a copy to Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New
York 10038, Attn.: Karen Gelernt, Esq., Tel: (212) 504-6000, Fax: (212) 504-6666
BankBoston Facility
if to the Facility Lenders, as successors in interest to BankBoston, to: the
address provided for notice to the Facility Lenders pursuant to Section 19 of
the foregoing Agreement
AMENDED AND RESTATED FORBEARANCE
AND INTERCREDITOR AGREEMENT
(Greenwich Street)
AMENDED AND RESTATED FORBEARANCE AND INTERCREDITOR AGREEMENT, dated as
of February 17, 1999, between IMC MORTGAGE COMPANY, a Florida corporation (the
"Company"), GREENWICH STREET CAPITAL PARTNERS II, L.P., a Delaware limited
partnership, GREENWICH FUND, L.P., a Delaware limited partnership, GSCP OFFSHORE
FUND, L.P., a Cayman Islands exempted limited partnership (each a "Facility
Lender" and collectively, the "Facility Lenders"), and the Facility Lenders as
successors to the right, title and interest of BANKBOSTON, N.A. in, to and under
the Existing Loan Documents (as defined below) (the "Existing Lenders").
Capitalized terms used in this Agreement without definition have the meanings
given to them in the Loan Agreement (as hereinafter defined) as such terms are
defined in the Loan Agreement on the date hereof (or as amended by any amendment
thereto approved by the Existing Lenders).
RECITALS
A. The Company has entered into a Loan Agreement, dated as of October
12, 1998 (the "Initial Loan Agreement"), between the Company, as borrower, and
the Facility Lenders, pursuant to which the Facility Lenders extended to the
Company Commitments to loan, in the aggregate, $33,000,000 (the "Initial
Loans"), subject to the terms and conditions set forth in the Initial Loan
Agreement, which Initial Loans are evidenced by the Notes (as defined in the
Initial Loan Agreement) and entitled to the benefit of certain guarantees and
security provided under certain of the other Loan Documents (as defined in the
Initial Loan Agreement).
B. Pursuant to (i) a Bridge Loan and Security Agreement, dated as of
October 10, 1997, as amended from time to time, by and among the Company,
certain of its Subsidiaries and BankBoston, N.A. (the "Bridge Loan Agreement"),
(ii) a Loan and Security Agreement, dated December 31, 1996, as amended from
time to time, by and among the Company, certain of its Subsidiaries and
BankBoston, N.A. (the "1996 Agreement"), and together with the Bridge Loan
Agreement, (the "Existing Loan Agreements"), and other related agreements in
favor of BankBoston, N.A. (collectively with the Existing Loan Agreements, the
"Existing Loan Documents"), the Existing Lender has agreed to provide financing
to the Company from time to time, to enable the
<PAGE>
Company to finance certain mortgage loans and for other purposes provided
therein; and the Company and certain of its Subsidiaries have granted a security
interest in the Collateral (as hereinafter defined) in order to secure their
respective obligations under the Existing Loan Documents (the "Existing
Obligations").
C. The Facility Lenders and the Company have entered into Amendment No.
1 to the Initial Loan Agreement ("Amendment No. 1"), providing for the Facility
Lenders to extend to the Company additional Commitments (the "Interim
Commitments") to loan in the aggregate not less than an additional $5,000,000
(the "Interim Loans").
D. The Facility Lenders have succeeded by assignment to the right,
title and interest of BankBoston N.A. in, to and under the Existing Loan
Agreements and have assumed the obligations of BankBoston, N.A. thereunder and
under the Original Forbearance Agreement (as hereinafter defined).
E. The Company intends to enter into an Agreement and Plan of Merger,
dated as of February __, 1999, by and among Greenwich Street Capital Partners II
L.P., a Delaware limited partnership ("GSCP"), the Company, IMC 1999 Acquisition
Co., Inc., a Delaware corporation and a wholly owned subsidiary of GSCP and its
affiliates ("Acquisition") pursuant to which Acquisition would be merged with
and into the Company and GSCP and its affiliates would be issued common stock of
the surviving corporation representing approximately 93.5% of the outstanding
common stock of the surviving corporation (the "Merger").
F. In connection with the Merger Agreement, GSCP intends to enter into
an agreement with Acquisition, dated as of February __, 1999, obligating the
Facility Lenders, upon consummation of the Merger, to enter into an amendment to
the Initial Loan Agreement, as amended (the "Amendment"), pursuant to which the
Facility Lenders will agree to extend to the Company Commitments to loan, in the
aggregate, an amount which, together with the Interim Commitments, will equal an
additional $40,000,000 (the "Additional Loans" and, together with the Initial
Loans and the Interim Loans, the "Loans"), subject to the terms and conditions
set forth in the Initial Loan Agreement, as amended by Amendment No. 1 and the
Amendment (as the same may be further modified, supplemented or restated from
time to time, the "Loan Agreement"), which Loans are evidenced by the Notes (as
defined in the Loan Agreement) and entitled to the benefit of certain guarantees
and security provided under certain of the other Loan Documents (as defined in
the Loan Agreement).
G. The Company, the Facility Lenders and BankBoston N.A. have
<PAGE>
previously entered into a Forbearance and Intercreditor Agreement, dated as of
October 12, 1998, as amended (the "Original Forbearance Agreement"). In order to
induce the Facility Lenders to enter into the Amendment and GSCP to enter into
the Merger Agreement, the Facility Lenders, the Company and the Existing Lenders
have agreed to enter into this agreement amending and restating the Original
Forbearance Agreement (as so amended and restated, the "Forbearance Agreement").
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company, the Existing Lenders
and the Facility Lenders agree to amend and restate the Original Forbearance
Agreement to read in its entirety as follows:
Section 1. Standstill. (a) Each of the Facility Lenders and the
Existing Lenders agrees, subject to the terms of this Agreement, that for the
Standstill Period, it shall not:
(i) file or join in the filing of any involuntary petition in
bankruptcy with respect to the Company or its Subsidiaries, or initiate or
participate in any similar proceedings for the benefit of creditors,
including any proceeding for the appointment of a trustee, receiver,
conservator or liquidator of the Company or its Subsidiaries or any portion
of its assets;
(ii) seek to collect or enforce by litigation or otherwise, any
payment obligations under the Existing Loan Documents or the Loan
Documents; provided that nothing in this Section 1 shall prohibit the
Facility Lenders from exercising their Exchange Option or the Existing
Lenders from collecting payments in respect of the Standstill Advances;
(iii) make any Margin Calls or other demands for payment in respect
of, or additional collateral to secure the Existing Obligations;
(iv) declare a default or event of default under, or exercise or
enforce any right or remedy under, or accelerate the maturity of any
Existing Obligation or Loan under, any Existing Loan Document or Loan
Document; or
(v) seek to attach, sequester or otherwise proceed against any of the
Collateral.
<PAGE>
(b) The Standstill Period may be terminated by the Existing Lenders or
the Facility Lenders by written notice to the Company and each other Creditor
upon the occurrence of any of the following:
(i) a failure by the Company under any Existing Loan Agreement to make
to the Existing Lender any scheduled payment of interest, which failure
continues unremedied for two days, or any payment of principal due pursuant
to Section 5 hereof;
(ii) any intentional fraud or misrepresentation by the Company;
(iii) immediately upon a failure of the Facility Lenders to make (x)
an Advance (as defined in the Initial Loan Agreement) under the Initial
Loan Agreement following a request of the Company thereunder, (y) an
Interim Loan under the Initial Loan Agreement as amended by Amendment No. 1
following a request by the Company thereunder or (z) immediately upon
consummation of the Merger, the Additional Loans under the Loan Agreement;
(iv) immediately in the event any Other Existing Lender takes any of
the actions described in Section 1(a) of its Other Intercreditor Agreement,
or, in the case of the Existing Lender, immediately in the event any
Facility Lender takes any of the actions described in Section 1(a) of this
Agreement, or, in the case of the Facility Lenders, immediately in the
event the Existing Lenders take any of the actions described in Section
1(a) of this Agreement, in each case whether or not it shall have given
notice of termination of the Standstill Period;
(v) the condition contained in subclause (y) of clause (i) of the
definition of "Standstill Period" to the extension of the Standstill Period
beyond the date which is 150 days from and after the date hereof shall not
have been satisfied on or before such date;
(vi) a Change of Control or payment of the Take-Out Premium;
(vii) an event shall occur and be continuing for a period of ten
Business Days which permits any holder of indebtedness for borrowed money
of the Company or any Subsidiary outstanding (other than any Creditor) to
accelerate the maturity of such indebtedness or exercise remedies with
respect to property of the Company or any Subsidiary, without such
indebtedness being paid
<PAGE>
or the rights of such holder to take such action being waived, stayed or
subjected to a standstill or other agreement of such holder to forbear from
exercising remedies, reasonably satisfactory to the Creditors;
(viii) the Company shall not have entered into the Merger Agreement
and Amendment No. 1 on or before February 19, 1999;
(ix) the Company shall, at any time on or after the date of
consummation of the Merger, repay all or any portion of the Loans;
(c) The Standstill Period shall terminate automatically without notice
or other action by any Creditor upon the occurrence of any of the following:
(i) the Company or any Subsidiary shall consent to the appointment of
or taking possession by a receiver, assignee, custodian, sequestrator,
trustee or liquidator (or other similar official) of itself or of a
substantial part of its property; or the Company or any Subsidiary shall
admit in writing (to any creditor, govern mental authority or judicial
court or tribunal) its inability to pay its debts generally as they come
due or shall fail generally to pay its debts as they become due, or shall
make a general assignment for the benefit of its creditors; or the Company
or any Subsidiary shall file a voluntary petition in bankruptcy or a
voluntary petition or answer seeking liquidation, reorganization or other
relief with respect to itself or its debts under the Federal bankruptcy
laws, as now or hereafter constituted or any other applicable Federal or
State bankruptcy, insolvency or other similar law, or shall consent to the
entry of an order for relief in an involuntary case under any such law; or
the Company or any Subsidiary shall file an answer admitting the material
allegations of a petition filed against the Company in any such proceeding,
or otherwise seek relief under the provisions of any existing or future
Federal or State bankruptcy, insolvency or other similar law providing for
the reorganization or winding-up of corporations, or providing for an
arrangement, agreement, composition, extension or adjustment with its
creditors; or the Company or any Subsidiary shall take or publicly announce
its intention to take corporate action in furtherance of any of the
foregoing; or
(ii) an order, judgment or decree shall be entered in any proceeding
by any court of competent jurisdiction appointing, without the consent of
the Company, a receiver, trustee or liquidator of the Company or any
Subsidiary or of any substantial part of its property, or any substantial
part of the property of the Company or any Subsidiary shall be sequestered,
and any such
<PAGE>
order, judgment or decree of appointment or sequestration shall remain in
force undismissed, unstayed or unvacated for a period of 30 days after the
date of entry thereof; or
(iii) an involuntary petition against the Company or any Subsidiary in
a proceeding under the Federal bankruptcy laws or other insolvency laws, as
now or hereafter in effect, shall be filed and shall not be withdrawn or
dismissed within 30 days thereafter, or a decree or order for relief in
respect of the Company or any Subsidiary shall be entered by a court of
competent jurisdiction in an involuntary case under the Federal bankruptcy
laws, as now or hereafter constituted, or, under the provisions of any law
providing for reorganization or winding-up of corporations which may apply
to the Company, any court of com petent jurisdiction shall assume
jurisdiction, custody or control of the Company or any Subsidiary or of any
substantial part of its property and such jurisdiction, custody or control
shall remain in force unrelinquished, unstayed or unterminated for a period
of 30 days.
Section 2. Grant of Security Interest. In order to secure full and
timely payment of the Obligations under the Loan Agreement, and to secure the
performance of all of the other obligations of the Company under the Loan
Documents, the Company and each Subsidiary hereby mortgages, pledges and assigns
and transfers to the Facility Lenders, and grants to the Facility Lenders, a
continuing perfected security interest in, and a lien in the Collateral. The
Facility Lenders agree to release their lien in respect of any whole loan
mortgage, which is sold by the Company to the Existing Lenders for a purchase
price not less than the advance rate in respect of such mortgage.
Section 3. Acknowledgment and Priorities. (a) The Existing Lenders
hereby acknowledge and consent to the entrance by the Company into the Loan
Documents and the granting of the lien in the Collateral granted pursuant to
Section 2; provided, however, notwithstanding anything to the contrary contained
in the Loan Agreement, the Notes or any of the Loan Documents, the parties
hereto acknowledge and agree that any security interest in or other rights with
respect to any Collateral granted to secure the Existing Obligations under the
Existing Loan Agreements or otherwise has and shall have priority, to the extent
of the Existing Obligations, over any security interest in such Collateral
granted pursuant to this Agreement, the Initial Loan Agreement, the Loan
Agreement or the other Loan Documents irrespective of:
<PAGE>
(i) the time, order or method of attachment or perfection of the
security interest created by this Agreement, the Initial Loan Agreement,
the Loan Agreement or any Loan Document;
(ii) the time or order of filing or recording of financing statements
or other documents filed or recorded to perfect security interests in any
Collateral;
(iii) anything contained in any filing or agreement to which the
Facility Lenders, the Company, or the Collateral Agent under the Security
Documents now or hereafter may be a party; and
(iv) the rules for determining priority under the U.C.C. or other laws
governing the relative priorities of secured creditors.
(b) The Existing Lenders hereby agree that, following payment in full
of all the Existing Obligations hereunder, any Collateral, including any books
and records (including, without limitation, computer files, printouts and other
computer materials and records) relating to the Collateral, as well as all
proceeds and products of such Collateral, held by it shall be held for the
benefit of the Facility Lenders, provided that if such Collateral is then
subject to the prior lien of another creditor, the Existing Lenders may hold it
for the benefit of such other creditor and the Facility Lenders as their
interests may appear. If the Existing Lenders have elected not to hold such
Collateral following payment in full of the Existing Obligations, it shall
promptly forward any Collateral, including any books and records (including,
without limitation, computer files, printouts and other computer materials and
records) relating to the Collateral, as well as all proceeds and products of
such Collateral, to the Collateral Agent, provided that if such Collateral is
then subject to the prior lien of another creditor, the Existing Lenders may
forward such Collateral, proceeds and products thereof to such other creditor
or, in the event of a dispute, to such party as a court of competent
jurisdiction may direct.
(c) Nothing contained in this Agreement shall alter or impair the
Existing Lenders' rights under the Existing Loan Documents from and after the
termination of the Standstill Period in accordance herewith or be interpreted to
mean that the Existing Lenders have any obligation under the Existing Loan
Documents or otherwise to return any proceeds received on a sale or deemed sale
of any Securitization Receivables to the Company or any Subsidiary, except as
expressly provided herein.
<PAGE>
Section 4. Reserved Rights. Notwithstanding anything in this Agreement
to the contrary, but subject to Section 8 hereof, the Company and the Facility
Lenders agree that this Agreement (except as expressly provided in Section 8)
shall in no manner impair any right of the Existing Lenders or the Facility
Lenders under any Existing Loan Agreement or the Loan Agreement, respectively,
to enforce any condition precedent to any obligation it may have thereunder to
make future Advances or Facility Advances to the Company and its Subsidiaries,
nor shall this Agreement limit the right of the Existing Lenders to make Margin
Calls in respect of the hedging transactions with respect to U.S. treasury
securities that the Company may have entered into with the Existing Lenders
outside of the Existing Loan Documents. All rights and obligations of the
Existing Lenders under the Existing Loan Documents to make Advances or not make
Advances and all rights of the Facility Lenders to make Facility Advances or not
make Facility Advances shall not be affected by this Agreement, except as
otherwise provided in Section 8 hereof.
Section 5. Additional Interest. (a) From and after the date this
Agreement becomes effective, within five days following receipt by the Company
each month of Available Cash Flow from Securitization Receivables, the Company
shall pay to the Existing Lenders the Applicable Percentage of such Available
Cash Flow from Securitization Receivables in repayment of principal of the
Existing Obligations under the Existing Loan Documents secured by the
Securitization Receivables generating such Available Cash Flow from
Securitization Receivables and may retain the balance of such Available Cash
Flow from Securitization Receivables and use such funds for general corporate
purposes.
(b) Within one day following the end of each of the first three-, six-,
nine- and twelve- month periods commencing with the date the Merger is deemed to
have been consummated for purposes of calculating the Minimum Repayment Amount,
the Company shall repay the principal amount outstanding under the Existing Loan
Documents by an amount equal to the excess, if any, of the Minimum Repayment
Amount applicable to such period over the aggregate amount applied to such
repayment in respect of such period, pursuant to Section 5(a) and this Section
5(b).
(c) The Company shall repay the principal amount outstanding under the
Existing Loan Documents by an amount equal to 100% of any Net Income Tax Refund
within five business days of receipt of such Refund.
(d) The Company shall immediately repay the amount outstanding under
the Existing Loan Documents by the amount equal to the Net Proceeds of Sale of
Servicing Rights or Subsidiaries sold or otherwise disposed of by the Company or
any
<PAGE>
Subsidiary. The Company shall not sell or otherwise dispose of any Servicing
Rights or any Subsidiary without the Existing Lender's consent and without
reaching agreement with the Existing Lenders as to an appropriate reduction of
the Minimum Repayment Amount and adjustment to the Business Plan, such consent
and agreement not to be unreasonably withheld or delayed by the Existing Lenders
or the Company. The parties agree that it would be reasonable for the Existing
Lenders to withhold their consent to the sale of any Servicing Rights or stock
of Subsidiaries if, in their sole discretion, the Existing Lenders conclude that
such sale will impair their ability to be paid the Existing Obligations, the
selling price for the Servicing Rights or stock of Subsidiaries should be higher
or the Servicing Rights or stock of Subsidiaries have not been adequately
marketed.
(e) The Existing Lender acknowledges and consents to the payments to be
made by the Company from Available Cash Flow from Securitization Receivables and
Net Proceeds of Sale of Securitization Receivables and in respect of Delinquent
Mortgage Loans securing financing provided under Warehouse Facilities required
to be made to the Other Existing Lenders under the Other Intercreditor
Agreements.
Section 6. Conditions Precedent. The effectiveness of this Agreement
shall be subject to the condition that each of the other existing lenders listed
on Schedule I (the "Other Existing Lenders") shall have entered into an Other
Intercreditor Agreement in the form annexed hereto. The Company shall furnish
the Existing Lenders complete and correct copies of each such Other
Intercreditor Agreement within one business day of its execution.
Section 7. Certain Definitions.
"Advance" means any advance made by the Existing Lenders under the
Existing Loan Agreements.
"Applicable Percentage" means (i) for the period from and after the
effective date hereof to the end of the calendar month in which such effective
date occurs, 1.67%, (ii) for the period from and after the calendar month in
which the effective date hereof occurs to the date of consummation of the
Merger, 2.5%, (iii) for the first six calendar months commencing on or after the
date of the consummation of the Merger, 5%, and (iv) for the next six calendar
months, 10%. For purposes of applying the foregoing, if the date of consummation
of the Merger occurs on or before the fifteenth
<PAGE>
day of a month, the Merger shall be deemed to have been consummated as of the
first day of such month, and if the date of consummation of the Merger occurs
after the fifteenth day of a month, then the Merger shall be deemed to have been
consummated as of the first day of the succeeding month.
"Available Cash Flow from Securitization Receivables" means the
proceeds, net of any costs of collection, to the Company or any Subsidiary of
any distribution with respect to, or prepayment of any Securitization
Receivables owned by the Company or any Subsidiary and pledged as security for,
or sold by the Company or any Subsidiary subject to an obligation to repurchase,
obligations owing to any Other Existing Lender.
"Change of Control" means the occurrence of any of the following events
(other than as a consequence of the issuance of the Preferred Stock to the
Facility Lenders upon exercise of the Exchange Option or the consummation of the
Merger):
(i) any "Person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have "beneficial ownership" of all shares that any such Person
has the right to acquire within one year), directly or indirectly, of more
than 50% of the Voting Stock of the Company; or
(ii) the Company consummates any sale, lease, exchange or other
disposition of all or substantially all of the assets of the Company and
its Subsidiaries, taken as a whole, in any transaction or series of
transactions not in the ordinary course of business; or
(iii) the Company engages in a merger, consolidation or similar
business combination with any third party.
"Collateral" means (i) all of the Company's or any Subsidiary's rights
to payment of money arising out of, related to, or created in connection with
(whether such rights are classified under the applicable Uniform Commercial Code
as general intangibles, accounts, certificated securities, uncertificated
securities or otherwise): (a) all Securitiza tion Receivables and any other
interest of the Company or any Subsidiary, in the Securiti zation Transactions
(other than cash paid to or for the account of the Company in respect of the
transfer by the Company or any Subsidiary of mortgage loans to the
<PAGE>
Trustee in respect of a Securitization Transaction) and similar rights or
interests of the Company or any Subsidiary, (b) all payments to be paid to the
Company or any Subsidiary pursuant to such Securitization Transactions (other
than cash paid to or for the account of the Company in respect of the transfer
by the Company of mortgage loans to the Trustee in respect of a Securitization
Transaction) and (c) all Servicing Fees, Servicing Rights, Servicing Advances
and any similar rights or interests of the Company or any Subsidiary in respect
of any of the foregoing (a) through (c); (ii) all business records, computer
tapes, software, microfiche, or recorded data of any kind or nature, regardless
of the medium, necessary to identify, locate and collect the foregoing; (iii)
all cash from time to time deposited in any deposit account of any of the
Company or any Subsidiary with the Existing Lender, in connection with this
Agreement, including, without limitation, the Loan Collateral Account; (iv) all
other collateral described in Schedule II hereto, includ ing, without
limitation, all accounts, inventory, equipment, general intangibles, investment
property (including the capital stock of the Subsidiaries), (v) any other right,
interest or property of the Company or any Subsidiary now or hereafter securing
the performance by the Company or any Subsidiary of the Existing Obligations;
and (vi) any and all replacements, substitutions, distributions on or proceeds
of any and all of the foregoing.
"Common Stock" means the Company's common stock, par value $0.01 per
share.
"Creditor" means any of the Facility Lenders, the Existing Lenders or
any Other Existing Lender.
"Delinquent Mortgage Loan" means any Mortgage Loan which, as of any
date of determination, is more than 90 days delinquent in payment of principal
or interest due thereunder.
"Facility Advance" means any advance made by the Facility Lenders under
the Loan Agreement.
"Loan Collateral Account" means the demand deposit account established
by the Company with the Existing Lenders pursuant to the Existing Loan
Agreements for collection of the cash flow from the Collateral (other than cash
flow from Servicing Rights) and into which the Company has instructed all
relevant parties to deposit all Cash Flow from Collateral (other than cash flow
from Servicing Rights).
<PAGE>
"Margin Call" means the right of the Existing Lenders or the Facility
Lender to give notice to require the Company to transfer to the Existing Lenders
or the Facility Lender cash or additional Collateral.
"Minimum Repayment Amount" means for each of the first three-, six-,
nine- and twelve-month periods from and after the date of the consummation of
the Merger, the applicable amount as follows: (a) first three months,
$1,300,000, (b) first six months, $3,000,000, (c) first nine months, $5,500,000,
(d) first twelve months, $8,000,000. For purposes of applying the foregoing, if
the date of consummation of the Merger occurs on or before the fifteenth day of
a month, then the Merger shall be deemed to have been consummated as of the
first day of such month, and, if the date of consum mation of the Merger occurs
after the fifteenth day of a month, then the Merger shall be deemed to have been
consummated as of the first day of the succeeding month.
"Mortgage Loan" means any mortgage loan originated or purchased by the
Company or any Subsidiary.
"Net Income Tax Refund" means any U.S. Federal income tax refund
received by the Company during the Standstill Period net of any U.S. Federal
income taxes paid or payable by the Company (in its good faith estimate) during
the tax year in which such refund is received.
"Net Proceeds of Sale of Securitization Receivables" means the
proceeds, net of any costs of sale or disposition, realized by the Company or
any Subsidiary from any sale, lease or other disposition of any Securitization
Receivables.
"Other Existing Lenders" has the meaning specified in Section 6.
"Other Intercreditor Agreements" means the separate intercreditor
agreements among the Company, an Other Existing Lender and the Facility Lenders.
"Securitization Receivables" means all rights of the Company or any
Subsidiary to receive payments (including, without limitation, assets classified
as residual strips, certificates, or interest only strips on the Company's
financial statements) under a Securitization Transaction but excluding rights to
receive payments in respect of Servicing Fees.
"Securitization Transaction" means any transaction, however named,
between the Company or any Subsidiary and any one or more purchasers and/or
investors
<PAGE>
which provides for the monetization of a discrete pool of mortgage loans and/or
mortgage notes through debt securities or ownership interests issued by a
special purpose vehicle supported or backed by mortgage loans and/or mortgage
notes that have been transferred to the special purpose vehicle by the Company
or any such Subsidiary.
"Servicing Advances" means all remittances advanced by the Company or
any Subsidiary to a Trustee under the Company's or any such Subsidiary's
servicing agreement, and the right to receive a payment of such advances.
"Servicing Fees" means all payments arising out of, related to, or
created in connection with a Person's duties and obligations as a servicer
pursuant to the terms of a Securitization Transaction.
"Servicing Rights" means all of any Company's and any Subsidiary's
rights to payment arising out of, related to, or created in connection with its
role as servicer under any of the Securitization Transactions or in connection
with its performance of a similar role with respect to any other transaction or
arrangement.
"Standstill Period" means a period ending on the first to occur of (i)
the later of (x) 150 days from and after the date hereof and (y) one year from
and after the date of consummation of the Merger, if the Company shall have, on
or before the 150th day from and after the date hereof, consummated the Merger
and delivered (by facsimile transmission or otherwise in accordance with Section
16 hereof) to each Creditor confirmation thereof, (ii) termination of the
Standstill Period in accordance with Section 1(b) or 1(c) hereof or (iii)
termination of the Merger Agreement.
"Subsidiary" or "Subsidiaries" means those Subsidiaries which are
signatories hereto and any other entities which hereafter become a subsidiary of
the Company (or of any of the Company's Subsidiaries).
"Trustee" means the trustee under the trust established for the benefit
of the purchasers under a Securitization Transaction.
"Warehouse Facility" means any loan agreement, repurchase agreement or
other credit facility for the purpose of financing the purchase or ownership of
Mortgage Loans by the Company or any Subsidiary.
<PAGE>
Section 8. Notice of Advances under the Loan Agreement, Etc. (a) The
Company shall not be entitled to receive, and the Existing Lenders shall have no
obligation to make any loans and advances under any of the Existing Loan
Documents.
(b) The Company shall give each Creditor prompt written notice of any
event which upon notice or lapse of time or both would constitute an event of
default in respect of any of its outstanding Debt.
(c) Notwithstanding the provisions of the Existing Loan Agreement,
during the Standstill Period, the Company shall pay interest on the principal
amount outstanding under the Existing Loan Agreements to the Existing Lenders
weekly on Friday of each week or, if Friday is not a Business Day, on the next
Business Day.
(d) During the Standstill Period (without limiting any obligations
under the Existing Loan Documents), the Company shall deliver to the Existing
Lenders at the same time it delivers to the Facility Lenders, the Disclosure
Letter, the Three-Month Business Plan, any Updated Business Plan and all other
financial statements and reports required to be provided to the Facility Lenders
pursuant to Section 5.5 of the Loan Agreement. The Company shall cooperate with
the Existing Lenders and its financial consultants and provide the Existing
Lenders and such consultants with such information and the opportunity to
consult with its executive officers and accountants as the Existing Lenders may
reasonably request.
(e) The Company shall give the Existing Lenders and the Facility
Lenders prompt written notice of any event that would permit termination of the
Standstill Period pursuant to clauses (iii), (iv), (vi), (vii), (viii) or (ix)
of Section 1(b) hereof.
Section 9. Acknowledgment of Obligations. The Company and each
Subsidiary acknowledges that, as of the date hereof, the principal balance of
the obligations under the Existing Loan Agreements are as follows: (a) the
Bridge Loan Agreement: $45,000,000; and (b) the 1996 Agreement: $42,500,000. The
Company and each Subsidiary acknowledges that its obligations under the Existing
Loan Documents and the liens on the Collateral securing the Existing Obligations
remain in full force and effect, that the Existing Obligations under the 1996
Agreement and the Bridge Loan Agreement matured on October 10, 1998 and have not
been paid, and that the Company and each such Subsidiary have no defenses,
counterclaims or offsets to its obligations
<PAGE>
under the Existing Loan Documents and that such liens are valid, perfected and
enforceable. The Company and each Subsidiary hereby waives the application of
the automatic stay in any bankruptcy proceeding in respect of the Existing
Obligations and the obligations under the Loan Documents and the Company, each
Subsidiary and each Creditor consents to the modification of the stay to permit
the exercise by the Existing Lenders or the Facility Lenders of their rights in
respect of the Collateral, provided that the foregoing shall not be construed to
modify the provisions of Sections 2(b) and 3 hereof. This document shall not
constitute a waiver, amendment or modification of the Existing Loan Documents,
the Existing Obligations, any defaults by the Company under the Existing Loan
Documents or the Loan Documents and shall not be construed as a waiver or
consent to any future action on the part of the Company or any Subsidiary that
would require a waiver or consent of the Existing Lenders or the Facility
Lenders. The Company and each Subsidiary hereby releases the Existing Lenders,
their respective officers, directors and participants from any and all claims in
respect of the Existing Loan Documents and in respect of actions taken or not
taken on or prior to the date of execution and delivery hereof.
Section 10. Amendments, Etc. No amendment, modification, supplement,
termination, consent or waiver of this Agreement or any term or provision of
this Agree ment shall be effective and binding unless in writing and signed by
the Existing Lenders, the Other Existing Lenders and the Facility Lenders. Any
such waiver will be effective only in the specific instance and for the specific
purpose for which it is given.
Section 11. Severability. Any provision of this Agreement which is
illegal, invalid, prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such illegality, invalidity,
prohibition or unenforceability without invalidating or impairing the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
Section 12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL OR EQUITABLE
ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY
TRANSACTION CONTEMPLATED HEREBY OR THE RELATIONSHIP ESTABLISHED HEREUNDER.
Section 13. GOVERNING LAW; VENUE AND JURISDICTION. THE
<PAGE>
VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION AND ENFORCEMENT
HEREOF AND THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS WITHOUT GIVING EFFECT OT CONFLICTS OF LAW PRINCIPLES THEREOF. EACH
OF THE PARTIES HERETO SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF, AND AGREES
THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT MAY BE
TRIED AND LITIGATED IN, FEDERAL OR, IN THE ABSENCE OF FEDERAL SUBJECT MATTER
JURISDICTION, STATE COURTS LOCATED IN THE CITY OF NEW YORK, STATE OF NEW YORK
UNLESS SUCH ACTIONS OR PROCEEDINGS ARE REQUIRED TO BE BROUGHT IN ANOTHER COURT
TO OBTAIN SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF
THE PARTIES WAIVES, TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE IN ANY PROCEEDING BROUGHT
IN ACCORDANCE WITH THE IMMEDIATELY PRECEDING SENTENCE. SERVICE OF PROCESS,
SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST SUCH PARTY MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS ADDRESS
INDICATED IN SECTION 18.
Section 14. Expenses. In addition to the foregoing, the Company will
also reimburse the Existing Lenders and the Facility Lenders promptly for their
reasonable out-of-pocket costs and expenses incurred by such Persons or their
respective employees, agents or advisors in connection with the performance of
their respective obligations and duties hereunder and, to the extent the
Existing Loan Documents so provide, under the Existing Loan Documents, and for
any reasonable fees and expenses of legal or other professional advisors to the
Existing Lenders and the Facility Lenders engaged in connection with the
preparation and negotiation of this Agreement and review and negotiation of all
related documents, including the Merger Agreement, Loan Agreement, and
monitoring performance of all related documents, such reimbursement to be made,
promptly and in any event within 30 days after presentation of an invoice
therefor accompanied by such documentation with respect to such costs and
expenses in reasonable detail as the Company may reasonably request.
<PAGE>
Section 15. Agreement May Constitute Financing Statement. The Company
and the Existing Lenders consent to the filing of this Agreement or a photocopy
thereof as a financing statement under the UCC as in effect in any jurisdiction
in which the Facility Lenders may determine such filing to be necessary or
desirable.
Section 16. Notices. All notices, requests and other communications to
any party hereunder shall be in writing and shall be given to such party by
facsimile transmission or by hand delivery at the following address or facsimile
number, or such other address or facsimile number as such party may hereafter
specify for the purpose by notice to the other party and each other Creditor:
(a) if to the Facility Lenders, or the Existing Lenders, Greenwich Street
Capital Partners II, L.P., c/o Greenwich Street Capital Partners, Inc., 388
Greenwich Street, New York, New York 10013, Attn.: Sanjay Patel; Tel: (212)
826-1149, Fax: (212) 816-0166; with a copy to Debevoise & Plimpton, 875 Third
Avenue, New York, New York 10022, Attn.: Steven Ostner, Tel: (212) 909-6000,
Fax: (212) 909-6836; and (b) if to the Company, IMC Mortgage Company, 5901 E.
Fowler Avenue, Tampa, Florida 33617, Attn.: President, Tel: (813) 984-2533, Fax:
(813) 984-2593; with a copy to Mitchell W. Legler, 300A Wharfside Way,
Jacksonville, Florida 32207; and if to any of the Other Existing Lenders, to
such person and at the address and facsimile number provided in Schedule III
hereto. Each such notice, request or other communication shall be effective when
sent by facsimile transmission to the facsimile number or when delivered by hand
to the address specified in this Section 16 or Schedule III hereto, provided
that a facsimile transmission shall be deemed to have been sent only so long as
the transmitting machine has provided an electronic confirmation of such
transmission.
Section 17. Binding Effect; Third Party Beneficiaries. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
successors and permitted assigns, including any successor of the Company by
merger or any entity which purchases all or substantially all of the assets of
the Company, and to each of the other Creditors, each of which is an intended
third-party beneficiary hereof. Neither the Facility Lenders nor the Existing
Lenders may sell, assign, participate or otherwise transfer or dispose of all or
any portion of the Loan or the Existing Obligations to any Person unless such
Person shall have assumed and agreed to be bound by the terms hereof by written
instrument in form reasonably satisfactory to the Company and each other
Creditor.
Section 18. Counterparts; Section Headings. This Agreement may be
executed in any number of counterparts, each of which is an original, but all of
which together constitute but one instrument. Except as otherwise indicated,
references herein
<PAGE>
to any "Section" means a "Section" of this Agreement, and the section headings
in this Agreement are for purposes of reference only and shall not limit or
define the meaning hereof.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
IMC MORTGAGE COMPANY
By /s/
-----------------------------
Name:
Title:
<PAGE>
GREENWICH STREET CAPITAL PARTNERS II, L.P.
GSCP OFFSHORE FUND, L.P.
GREENWICH FUND, L.P.
By: GREENWICH STREET
INVESTMENTS II, L.L.C.,
their General Partner
By: /s/
---------------------------
Name:
Title:
<PAGE>
This Forbearance and Intercreditor Agreement is hereby
acknowledged and agreed to by:
IMC CORPORATION OF AMERICA
IMC CREDIT CARD, INC.
IMC MORTGAGE COMPANY CANADA, LTD.
AMERICAN HOME EQUITY CORPORATION
IMC INVESTMENT CORPORATION
IMC INVESTMENT LIMITED PARTNERSHIP
ACG FINANCIAL SERVICES (IMC), INC.
AMERICAN MORTGAGE REDUCTION, INC.
CENTRAL MONEY MORTGAGE CO. (IMC), INC.
COREWEST BANC
EQUITY MORTGAGE CO. (IMC), INC.
IMCC INTERNATIONAL, INC.
MORTGAGE AMERICA (IMC), INC.
NATIONAL LENDING CENTER, INC.
NATIONAL LENDING CENTER TILT, INC.
NATIONAL LENDING GROUP, INC.
RESIDENTIAL MORTGAGE CORPORATION (IMC), INC.
By: /s/
---------------------------
Name:
Title:
GERMAN AMERICAN CAPITAL CORPORATION
By: /s/
---------------------------
Name:
Title:
By: /s/
---------------------------
Name:
Title:
<PAGE>
ASPEN FUNDING CORP.
By: /s/
---------------------------
Name:
Title:
BEAR STEARNS HOME EQUITY TRUST
By: /s/
---------------------------
Name:
Title:
BEAR STEARNS INTERNATIONAL LIMITED
By: /s/
---------------------------
Name:
Title:
PAINE WEBBER REAL ESTATE SECURITIES INC.
By: /s/
---------------------------
Name:
Title:
<PAGE>
Schedule I to the Forbearance
and Intercreditor Agreement
Other Existing Lenders
Master Repurchase Agreement, dated as of March 29, 1996, as amended from time to
time, by and among Bear Stearns Home Equity Trust and the Company and certain of
the Company's Subsidiaries.
fMaster Repurchase Agreement, dated as of May 1, 1997 Between Bear, Stearns
International Limited and Industry Mortgage Company, L.P.
Institutional Account Agreement, dated October 23, 1996, between and among
Industry Mortgage Company, L.P. and Bear Stearns.
Loan and Security Agreement, dated March 17, 1998, by and among IMC Mortgage
Company, IMC Corporation of America, ACG Financial Services (IMC), Inc.,
American Mortgage Reduction, Inc., Central Money Mortgage Co. (IMC), Inc.,
Corewest Banc, Equity Mortgage Co., (IMC), Inc., Mortgage America (IMC), Inc.,
National Lending Center, Inc., National Lending Center TILT, Inc, and
Residential Mortgage Corporation (IMC), Inc., as borrowers, and German American
Capital Corporation, as lender.
Loan and Security Agreement, dated March 17, 1998, by and among IMC Mortgage
Company, IMC Corporation of America, ACG Financial Services (IMC), Inc.,
American Mortgage Reduction, Inc., Central Money Mortgage Co. (IMC), Inc.,
Corewest Banc, Equity Mortgage Co., (IMC), Inc., Mortgage America (IMC), Inc.,
National Lending Center, Inc., National Lending Center TILT, Inc, and
Residential Mortgage Corporation (IMC), Inc., as borrowers, and Aspen Funding
Corp., as lender
Loan and Security Agreement, dated as of February 28, 1997, between IMC Mortgage
Company, IMC Corporation of America, ACG Financial Services (IMC), Inc.,
American Mortgage Reduction, Inc., Industry Mortgage Company, L.P., Corewest
Banc, IMC Investment Corp., and IMC Investment Limited Partnership, as
borrowers, and Paine Webber Real Estate Securities, Inc., as lender.
<PAGE>
Schedule II to the Forbearance and
Intercreditor Agreement
Additional Collateral
All of the collateral granted under the following agreements:
1. Bridge Loan and Security Agreement, dated as of October 10, 1997, as
amended from time to time by and among the Company, certain of its
Subsidiaries and BankBoston, N.A.;
2. Loan and Security Agreement, dated December 31, 1996, as amended from
time to time by and among the Company, certain of its Subsidiaries and
BankBoston, N.A.;
3. Loan Agreement, dated October 15, 1998, by and among the Company,
certain of its Subsidiaries and BankBoston, N.A. ;
4. Pledge and Security Agreement, dated October 14, 1998, between the
Company and BankBoston, N.A.;
5. Stock Pledge Agreement, made as of December 31, 1997, by and between
the Company and BankBoston, N.A., as amended by the First Amendment to
Stock Pledge Agreement, dated October __, 1998; and
6. Security Agreement, made October 10, 1997, by the Company and certain
of its Subsidiaries in favor of BankBoston, N.A., as amended by the
First Amendment to Security Agreement made October __, 1998, between
BankBoston, N.A., the Company and certain of its Subsidiaries.
<PAGE>
Schedule III to the Forbearance and
Intercreditor Agreement
Notice Address for Other Existing Lenders
Bear, Stearns & Co., Inc.
if to Bear, Stearns: Bear Stearns & Co. Inc., 245 Park Avenue, New York, New
York 10167, Attn: Philip M. Cedar, Tel.: (212) 272-6768, Fax: (212) 272-4933 and
Paul Friedman, Tel.: (212) 272-3516, Fax: (212) 272-6550, with a copy to;
Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New York 10038, Attn.
Barry J. Dichter, Esq., Tel.: (212) 504-6000, Fax: (212) 504-6666;
Deutsche Lenders
if to Aspen Funding, to: Aspen Funding Corp. c/o Amacar Group, 6707D Fairview
Road, Charlotte, North Carolina 28210, Attn.: Douglas Johnson, tel.: (704)
375-0569, fax: (704) 365-1362, with a copy to: Deutsche Bank A.G., as agent, 31
West 52nd Street, New York, New York 10019, Attn.: Greg Amoroso, Tel.: (212)
469-3987, Fax: (212) 469-5160 and Richard Uhlig, Tel.: (212) 469-7730, Fax:
(212) 469-5103; and with a copy to Cadwalader, Wickersham & Taft, 100 Maiden
Lane, New York, New York 10038, Attn.: Karen Gelernt, Esq., Tel: (212) 504-6000,
Fax: (212) 504-6666
if to German American Corporation, to: German American Capital Corporation, 31
West 52nd Street, New York, New York 10019, Attn.: Vijay Radhakishun, Tel.:
(212) 469- 8925, Fax: (212) 469-5923, with a copy to: Deutsche Bank A.G., as
agent, 31 West 52nd Street, New York, New York 10019, Attn.: Greg Amoroso, Tel.:
(212) 469-3987, Fax: (212) 469-5160, and Richard Uhlig, Tel.: (212) 469-7730,
Fax: (212) 469-5103; and in either case described in clause (i) or (ii) above;
with a copy to Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New
York 10038, Attn.: Karen Gelernt, Esq., Tel: (212) 504-6000, Fax: (212) 504-6666
Paine Webber
if to Paine Webber, to: PaineWebber Real Estate Securities, Inc., 1285 Avenue of
the Americas, New York, New York 10019, Attn.: George Mangiaracina, Tel: (212)
<PAGE>
713-3734, Fax: (212) 265-3881; with a copy to Cadwalader, Wickersham & Taft, 100
Maiden Lane, New York, New York 10038, Attn.: Michael S. Gambro, Esq., Tel:
(212) 504- 6825; Fax: (212) 504-6666
