SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): July 13, 1999
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IMC MORTGAGE COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
Florida 333-3954 59-3350574
<S> <C> <C>
(State or other jurisdiction of (Commission file number) (I.R.S. employer
incorporation or organization) identification no.)
5901 E. Fowler Avenue,
Tampa, Florida 33617
(Address of principal executive offices) (Zip code)
</TABLE>
Registrant's telephone number, including area code: (813) 984-2548
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Item 5. Other Events.
On July 13, 1999 IMC Mortgage Company (the "Company") entered into an
Asset Purchase Agreement (the "Agreement") with CitiFinancial Mortgage Company
("CitiFinancial Mortgage"), an indirectly wholly-owned subsidiary of Citigroup
Inc. ("Citigroup").
Under the Agreement, the Company will receive $100 million from
CitiFinancial Mortgage for the sale of its mortgage servicing rights related to
the mortgage loans which have been securitized, real property consisting of the
Company's Tampa, Florida headquarters building and the Company's leased
facilities at its Ft. Washington, Pennsylvania, Cherry Hill, New Jersey and
Cincinnati, Ohio office locations. Additionally, all furniture, fixtures and
equipment and other personal property located at the premises described above
will be included in the purchase. It is anticipated that substantially all of
the employees at the locations referred to above at the time the Agreement is
consummated will be offered employment by CitiFinancial Mortgage.
The Agreement is subject to a number of conditions, including (i)
approval by the Boards of Directors of the Company, CitiFinancial Mortgage and
Citigroup, (ii) receipt of a valuation opinion from an independent financial
advisor that the Company has received reasonably equivalent value in exchange
for the assets being transferred to CitiFinancial Mortgage, which opinion is
satisfactory in form and content to CitiFinancial Mortgage, (iii) approval by
the Company's common and preferred stockholders, including a separate vote in
favor of the transaction by the majority of the Company's common stockholders
other than the Company's management, and (iv) approval by certain state and
federal regulatory bodies and third parties.
There can be no assurance that the respective Boards of Directors will
approve the transaction, that a valuation opinion will be obtained, that the
stockholders of the Company will approve the transaction or that the other
conditions will be met. If the Company's Board of Directors does not approve the
Agreement by July 31, 1999, CitiFinancial Mortgage can terminate the Agreement.
The proceeds from the sale will be used to repay certain indebtedness
secured by certain assets of the Company. No payment is expected to be made to
the Company's common stockholders as a result of this transaction, nor are any
payments to common stockholders likely in the future.
If the transaction contemplated by the Agreement is completed, it will
result in the sale of the Company's servicing platform, substantially all its
correspondent origination loan business and its broker originated loan business
conducted at the locations referred to above. The remaining loan origination
business, which primarily consists of broker and direct originations, is
performed by eight operating subsidiaries. The Company is currently evaluating
several alternatives relating to these operating subsidiaries, although none of
these alternatives is expected to provide any significant value to common
stockholders.
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As previously announced, on October 16, 1998, the Company entered into
a loan agreement (the "Greenwich Loan Agreement") with Greenwich Street Capital
Partners II, L.P. and certain of its affiliates ("Greenwich Funds") that
provided the Company a $33 million standby revolving credit facility for a
period of up to 90 days, which was subsequently extended and increased to $38
million. In consideration for providing the facility, the Greenwich Funds
received exchangeable preferred stock representing the equivalent of 40% of the
Company's equity, and, under certain conditions, the Greenwich Funds could elect
either to (a) receive repayment of the loan facility, plus accrued interest at
20% per annum, and a take-out premium of up to 200% of the outstanding amount of
the loan facility or (b) exchange its loans for additional exchangeable
preferred stock, representing an additional 50% of the Company's equity
outstanding.
The Company has also announced that it had entered into an Agreement
and Plan of Merger with the Greenwich Funds which was subsequently recast as an
Acquisition Agreement (the "Acquisition Agreement"). Under the Acquisition
Agreement, the Greenwich Funds would provide $35 million of additional secured
loans and receive newly issued Company common stock equal to 93.5% of the
Company's total common stock on a fully diluted basis, leaving the existing
common stockholders of the Company with 6.5% of the common stock outstanding
after the Acquisition. No payment would be made to the Company's common
stockholders in this transaction.
If the Company's Board of Directors approves the Agreement with
CitiFinancial Mortgage, the Acquisition Agreement with the Greenwich Funds would
be terminated and the Greenwich Funds would not be obligated to provide an
additional $35 million of loans to the Company. If the transaction with
CitiFinancial Mortgage is approved, the Greenwich Funds will release their liens
on the assets to be sold and remain a secured creditor.
The Company, its major warehouse lenders and the Greenwich Funds have
extended the previously announced amended and restated intercreditor agreements,
which will expire on the earlier of August 16, 1999 or termination of the
Agreement or as provided in the amended and restated intercreditor agreements.
There can be no assurance that the Company will be successful in obtaining
extensions of these agreements. If these agreements are not extended, the
lenders would be entitled to seek remedies under their loan agreements with the
Company, including actions to realize upon the collateral that secure their
loans.
On June 18, 1999, the Company entered into a Note Purchase and
Amendment Agreement No. 2 (the "Amendment No. 2") with the Greenwich Funds.
Under the Amendment No. 2, the Greenwich Funds loaned the Company an aggregate
of $36,000,000. In consideration for these loans, the Company agreed to pay the
Greenwich Funds a $1,000,000 commitment fee. The loans bore interest at a rate
of 20% per annum. These loans have been repaid in full.
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On July 16, 1999, IMC Mortgage Company (the "Company") entered into a
Note Purchase and Amendment Agreement No. 3 (the "Amendment No. 3") with the
Greenwich Funds. Under the Amendment No. 3, the Greenwich Funds loaned the
Company an aggregate of $46,250,000. In consideration for these loans, the
Company agreed to pay the Greenwich Funds a $1,250,000 commitment fee. The loans
bear interest at a rate of 20% per annum.
The foregoing discussion is qualified by reference to the full text of
the documents relating to the transactions described, including the Agreement,
the Amendment No. 2 and the Amendment No. 3, 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
10.78 Asset Purchase Agreement dated as of July 13, 1999
between the Company and CitiFinancial Mortgage Company.
10.79 Note Purchase and Amendment Agreement No. 2 dated as of June
18, 1999 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
10.80 Note Purchase and Amendment Agreement No. 3 dated as of July
16, 1999 among the Company, Greenwich Street Capital Partners
II L.P., Greenwich Fund, L.P., GSCP Offshore Fund, L.P.,
Greenwich Street Employees Fund L.P. and TRV Executive Fund,
L.P. and Greenwich Street Capital Partners II L.P., as
collateral agent
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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: July 21, 1999 IMC MORTGAGE COMPANY
By: /s/
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Thomas G. Middleton
President, Chief Operating Officer and
Assistant Secretary
By: /s/
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Stuart D. Marvin
Chief Financial Officer
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ASSET PURCHASE AGREEMENT
Dated as of
July 13, 1999
by and between
IMC Mortgage Company,
as Seller,
and
CitiFinancial Mortgage Company,
as Purchaser
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated as of July 13, 1999, by and between IMC
Mortgage Company, a Florida corporation (the "Seller"), and CitiFinancial
Mortgage Company, a Delaware corporation (the "Purchaser").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of this
Agreement, the Seller desires to sell, convey, assign, transfer and deliver to
the Purchaser, and the Purchaser desires to purchase and acquire from the
Seller, certain assets, subject to certain of the liabilities, relating to the
Seller's business of origination, selling and servicing of residential mortgage
loans excluding such activities conducted by Seller's Acquired Affiliates or
Foreign Operations provided such certain assets are not shared between Seller
and the Acquired Affiliates or Foreign Operations (collectively, the
"Business");
NOW, THEREFORE, in consideration of the premises and the mutual
promises and covenants contained herein, the parties hereby agree as follows:
ARTICLE I
Certain Definitions
Section 1.01 Certain Definitions. As used in this Agreement, unless the
context requires otherwise, the following terms shall have the meanings
indicated, and additional capitalized terms shall have the meanings assigned
elsewhere in this Agreement (with terms being defined in the singular having a
corresponding meaning in the plural and vice versa):
"Acquired Affiliates" shall mean Mortgage America, CoreWest Banc,
American Mortgage Reduction, Equity Mortgage, National Lending Center, Central
Money Mortgage, Residential Mortgage and Alternative Capital.
"Affiliate" of any Person means any other Person, existing or future,
directly or indirectly, Controlling, Controlled by or under common Control with
the former Person. For Seller, this would include the Acquired Affiliates.
"Approvals" means franchises, licenses, permits, certificates of
occupancy and other approvals, authorizations, consents and waivers.
"Assumed Liabilities" has the meaning assigned in Section 2.03.
"Assumption Agreement" means a duly executed assumption agreement in
substantially the form to be agreed upon.
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"Bill of Sale" means a duly executed bill of sale in substantially the
form to be agreed upon.
"Business" has the meaning assigned in the preamble to this Agreement.
"Business Day" means any day on which commercial banks in New York City
and Tampa, Florida are open for business.
"Business Records" shall mean all of Seller's books and records
relating to the Purchased Assets, including, without limitation, all account
applications, statements, mortgage documents and other related files, marketing
materials, financial information, tax filings, any reports or records relating
to the securitized transactions identified in Section 2.01(a)(i) of the
Disclosure Schedule, including any trustee reports, current and previous
customer information, including servicing and collection records, information
relating to correspondents and brokers, information relating to origination
history and practice, comments and correspondence, whether in documentary form
or on microfilm, microfiche, magnetic tape, computer disk or other form.
"Closing" means the closing of the transactions contemplated by this
Agreement.
"Closing Date" means the date on which the Closing actually occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contract" means any note, bond, mortgage, indenture, deed of trust,
license agreement, franchise, contract, agreement, Lease, instrument or
guarantee.
"Control" means the power to direct or cause the direction of the
management and policies of another Person, whether through the ownership of
voting securities, by contract or otherwise.
"Custodial Account" means the payment clearing accounts, principal and
interest accounts, Escrow Account or any other accounts that include any funds
held or controlled by the Seller pursuant to the Servicing Agreements or
obligations thereunder with respect to any Mortgage Loan, including, but not
limited to, all principal and interest funds, buydown funds and any other funds
held by Seller on behalf of others, or due private investors or others.
"Disclosure Schedule" means the disclosure schedule attached hereto as
Schedule 1.01.
"Employees" has the meaning assigned in Section 6.01.
"Employee Benefit Plans" shall include pension and profit sharing
plans, retirement and post retirement welfare benefits, health insurance
benefits (medical, dental and vision), disability, life and accident insurance,
sickness benefits, vacation, employee loans and any bonus, incentive, deferred
compensation, stock purchase, stock option, severance, employment, or fringe
benefit plan, program or agreement.
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"Employer" has the meaning assigned in Section 6.01.
"Escrow Account" means the account or accounts that includes all funds
due third parties other than private investors held or controlled by Seller with
respect to Mortgage Loan escrows/impounds relating to the Servicing Rights,
including, but not limited to, accounts for real estate taxes and PMI, flood and
hazard insurance premiums.
"Excluded Assets" has the meaning assigned in Section 2.01(b).
"Foreign Operations" shall mean Seller's Affiliates or investments or
operations outside of the United States of America.
"GAAP" means generally accepted accounting principles, applied
consistently with the Seller's past practices (to the extent such past practices
are consistent with generally accepted accounting principles).
"Governmental Agency" means any governmental body or other regulatory
or administrative agency or commission.
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
polychlorinated biphenyls and radon gas; (b) any chemicals, materials or
substances defined as or included in the definition of "hazardous substances,"
"hazardous waste," "hazardous materials," "extremely hazardous substances,"
"toxic substances," "toxic pollutants," "contaminants," or "pollutants," or
words of similar import, under any applicable Laws; and (c) any materials which
could be or are defined by any applicable Law to be hazardous to human health.
"Indemnifiable Loss" means a Purchaser Indemnifiable Loss or a Seller
Indemnifiable Loss, as such terms are defined in Section 12.02 and Section
12.03, respectively.
"Indemnified Party" means a party having indemnification rights
pursuant to Article XII.
"Indemnifying Party" means a party having indemnification obligations
pursuant to Article XII.
"Intellectual Property Rights or IPR" means any and all of the
following used in or related to the Business: (i) trade secrets, inventions,
ideas and conceptions of inventions, whether or not patentable, whether or not
reduced to practice, and whether or not yet made the subject of a patent
application or applications, (ii) United States patents, patent applications and
statutory invention registrations, all rights therein provided by international
treaties or conventions and all improvements thereto, (iii) copyrightable works,
copyrights, whether or not registered, and registrations and applications for
registration thereof in the United States, and all rights therein provided by
international treaties or conventions, (iv) Software, (v) technical and business
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information, including know-how, manufacturing and production processes and
techniques, research and development information, technical data, financial,
marketing and business data, pricing and cost information, business and
marketing plans, business forms, and customer and supplier lists and
information, whether or not confidential, (vii) copies and tangible embodiments
of all the foregoing, in whatever form or medium, (viii) licenses and
sublicenses (whether as licensee, sublicensee, licensor or sublicensor) in
connection with any of the foregoing, and (ix) all goodwill associated with the
foregoing and all rights to sue or recover and retain damages and costs and
attorneys' fees for past, present, and future infringement or breach of any of
the foregoing; provided that Intellectual Property Rights shall not include
readily available commercial products such as off-the-shelf or publicly vended
software programs.
"Judgment" means any judgment, ruling, order or decree.
"Knowledge" means as to any party the actual knowledge, after
reasonable investigation, of any executive officer or vice president of such
party. Reasonable investigation shall include, but not be limited to, inquiry of
appropriate employees who directly report to such executive officer or vice
president.
"Law" means any order, writ, injunction, decree, judgment, ruling, law,
decision, opinion, statute, rule or regulation of any governmental, judicial,
legislative, executive, administrative or regulatory authority of the United
States, or of any state or local government or any subdivision thereof, or of
any Governmental Agency, including, without limitation, any federal, state or
local fair lending laws.
"Lease" means any lease, sublease, easement, license, right-of-way or
similar interest in real or personal property.
"Lien" means any lien, easement, encumbrance, mortgage, liability
(actual or contingent) or other conflicting ownership or security interest in
favor of any third party.
"Litigation" means any action, suit, claim, arbitration or other
proceeding, investigation or written inquiry by or before any Governmental
Agency, court or arbitrator.
"Material Adverse Effect" or "Material Adverse Change", with respect to
the Seller or with respect to the Business or Purchased Assets, means any
change, occurrence or effect, direct or indirect, that could reasonably be
expected to have a material adverse effect on the business, prospects,
operations, properties (including tangible properties), condition (financial or
otherwise) of the assets, obligations or liabilities (whether absolute, accrued
or contingent) of the Seller or of the Business or the Purchased Assets, as the
case may be, taken as a whole.
"Mortgage" means the mortgage, deed of trust or other instrument
creating a lien on Mortgaged Property securing a Mortgage Note.
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"Mortgage Loans" means the mortgage loans for which Seller owns the
related Servicing Rights, in each case as identified on the Mortgage Loan
Schedule, and all of Seller's rights and benefits with respect thereto.
"Mortgage Loan Schedule" has the meaning assigned in Section 4.08(a).
"Mortgage Note" means the original executed note or other evidence of
the Mortgage Loan indebtedness of a Mortgagor.
"Mortgaged Property" means the Mortgagor's real property securing
repayment of a related Mortgage Note.
"Mortgagor" means the obligor on a Mortgage Note, the owner of the
Mortgaged Property and the grantor or mortgagor named in the related Mortgage
and such grantor's or mortgagor's successors in title to the Mortgaged Property.
"Person" means an individual, a corporation, a limited liability
company, a partnership, an unincorporated association, a joint venture, a
government or Governmental Agency or another entity or group.
"PMI" means the default insurance provided by private mortgage
insurance companies on certain Mortgage Loans.
"Pre-Closing Servicing Obligations" includes any obligations with
respect to (i) customary representations and warranties made in connection with
Mortgage Loans sold prior to the Closing Date with Servicing Rights retained by
the Seller and (ii) performance by the Seller prior to the Closing Date of its
duties under the Servicing Rights in accordance with their terms.
"Principal Stockholders" means those directors, executive officers,
principal stockholders and others identified on Exhibit A hereto.
"Purchased Assets" has the meaning assigned in Section 2.01(a).
"Real Property" means the lands and premises, together with the
buildings and improvements thereon, owned by the Seller and more particularly
described in Section 1.01 of the Disclosure Schedule together with:
(a) all furniture, fixtures, building equipment, telephone exchange
numbers, and other articles of personal property related thereto to the extent
of the Seller's ownership or other interest therein;
(b) all easements, rights of way, reservations, privileges, appurtenances,
and other estates and rights of the Seller pertaining to such land and the
buildings;
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(c) all rights of ingress and egress to and from such land and buildings;
(d) to the extent in the possession and control of the Seller, any and all
original and supplemental site plans, blue prints, plans, specifications,
surveys, engineering, inspection or similar reports, operating manuals,
warranties, guaranties, licenses, franchises, permits, certificates, contracts,
books, records, accounts and files relating to the ownership, construction, use,
leasing, service, management, operation, maintenance and repair of such land and
buildings; and
(e) any and all rights to the present or future use of water rights,
wastewater, wastewater capacity, drainage, water or other utility facilities to
the extent same pertain to or benefit such real property, including, without
limitation, all reservations of or commitments or letters covering any such use
in the future.
"Related Documents" means all other agreements and instruments
described in this Agreement that are to be executed and delivered at or prior to
the Closing in connection with the transactions contemplated hereby.
"Retained Liabilities" has the meaning assigned in Section 2.04.
"Seller IPR" means all Intellectual Property Rights owned by or
licensed to the Seller to the extent such licensed rights are assignable.
"Servicing Agreement" has the meaning assigned to it in Section 4.08(h).
"Servicing Rights" means all right, title and interest of the Seller in
and to the servicing of the Mortgage Loans.
"Software" means computer software and subsequent versions thereof
developed or currently being developed, manufactured, sold or marketed by the
Seller or acquired by Seller from third parties, including without limitation,
source code, object code, objects, comments, screens, user interfaces, report
formats, templates, menus, buttons and icons, and all files, data materials,
manuals, design notes and other items and documentation related thereto or
associated therewith owned by or licensed to Seller.
"Taxes" (including, with correlative meaning, or derivation of the word
"Taxes") the term "Taxable") means all taxes, charges, fees, duties, levies, or
other assessments imposed by any federal, state or local taxing authority,
including without limitation federal, state and local income, profits,
franchise, gross receipts, environmental, customs duty, severances, stamp,
payroll, sales, use, employment, unemployment, disability, property,
withholding, backup withholding, excise, production, occupation, service,
service use, leasing and leasing use, ad valorem, value added, occupancy,
transfer, and other taxes, of any nature whatsoever, together with all interest,
penalties and additions imposed with respect to such amounts and any interest in
respect of such penalties and additions.
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"Tax Returns" means all returns and reports, information returns, or
payee statements (including, but not limited to elections, declarations,
filings, forms, statements, disclosures, schedules, estimates and information
returns) required to be supplied to a Tax authority relating to Taxes.
"Third Party IPR" means the rights possessed by the Seller in any other
Person's Intellectual Property Rights which relate to or are used in the
Business and which are not owned by the Seller to the extent assignable.
"Year 2000 Compliant" means, with respect to an internal system, that
at all times before, during and after January 1, 2000, such internal system
accurately processes and handles date and time data from, into and between the
twentieth and twenty-first centuries, and the years 1999 and 2000, including,
without limitation, leap year calculations, to the extent that other information
technology used in combination with such internal systems and such products and
services properly exchange date and time data with it.
ARTICLE II
Transfer of Assets and Assumption of Liabilities
Section 2.01 Assets to be Sold.
a) Upon the terms and subject to the conditions of this Agreement, at the
Closing, the Seller shall sell, convey, assign, transfer and deliver to the
Purchaser all of the following:
(i) all Servicing Rights related to the Mortgage Loans which have
been securitized in the transactions identified in Section
2.01(a)(i) of the Disclosure Schedule (the "Purchased Servicing
Rights");
(ii) the Real Property and the Leases identified in Section
2.01(a)(ii) of the Disclosure Schedule (the "Transferred
Leases");
(iii) all furniture, fixtures and other fixed assets and other
articles of personal property related thereto to the extent of
the Seller's ownership or other interests therein located on the
premises leased pursuant to the Transferred Leases, in all
material cases as identified in Section 2.01(a) (iii) of the
Disclosure Schedule;
(iv) all right, title and interest of Seller in the Contracts listed
in Section 2.01(a) (iv) of the Disclosure Schedule relating to
the Business and any other Contract entered into by the Seller
between the date hereof and Closing which the Purchaser
hereafter agrees shall become a Purchased Asset;
(v) all Business Records, including, without limitation, the
customer lists owned exclusively by the Seller or shared with
Affiliates, broker and correspondent lists and any related
mailing lists relating to the Business and all records relating
to the sale of loans by the Seller;
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(vi) all Seller IPR and any rights in any Third Party IPR which are
identified in Section 2.01(a) (vi) of the Disclosure Schedule;
(vii) all right, title and interest of Seller in the Custodial
Accounts listed in Section 2.01(a)(vii) of the Disclosure
Schedule; and
(viii) any and all rights and claims of Seller relating to any of the
foregoing.
All the assets to be transferred pursuant to this Agreement are
referred to collectively herein as the "Purchased Assets".
(b) Notwithstanding anything to the contrary in this Agreement, the
Purchased Assets shall not include any assets not specifically set forth in this
Section 2.01 (the "Excluded Assets").
(c) The Purchased Assets shall not include any cash or cash equivalents
owned by Seller at the time of the Closing.
(d) The sale, conveyance, assignment, transfer and delivery of the
Purchased Assets shall be effected by delivery by the Seller to the Purchaser at
the Closing of (i) the Bill of Sale, (ii) good and sufficient warranty deeds in
recordable or registrable form, with respect to all Real Property owned by the
Seller and included in the Purchased Assets, and (iii) such other instruments of
conveyance and transfer as the Purchaser shall reasonably request.
Section 2.02 Nonassignable Leases and Contracts.
(a) To the extent that any Contract, except Contracts conveying
Servicing Rights to the Seller, to be included in the Purchased Assets would be
subject to termination or restriction or is not capable of being assigned,
transferred, subleased or sublicensed without the consent or waiver of the
issuer thereof or the other party thereto or any third party, or if such
assignment, transfer or sublease would constitute a breach thereof or a
violation of any Law, this Agreement shall not constitute an assignment,
transfer, sublease or sublicense thereof.
(b) The Seller agrees to use its reasonable commercial efforts prior to
the Closing to obtain the consents and waivers and to resolve any
impracticalities of assignment referred to in Section 2.02(a) and to obtain any
other consents and waivers necessary to sell, convey, assign, transfer and
deliver title to such Purchased Assets to the Purchaser at the Closing, subject
to Section 10.05(b).
(c) To the extent that the consents and waivers referred to in Section
2.02(a) are not obtained by the Seller, or until the impracticalities of
transfer referred to therein are resolved, and subject to Sections 8.04 and
10.05(b) , (i) the Seller shall use its reasonable commercial efforts (x)
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at Purchaser's request, to provide to the Purchaser the benefits of any Contract
intended to be included in the Purchased Assets, (y) at Purchaser's request and
expense, to cooperate in any arrangement, reasonable and lawful as to the Seller
and the Purchaser, designed to provide such benefits to the Purchaser and (z) at
the Purchaser's request, to enforce for the account and at the expense of the
Purchaser any rights of the Seller arising from the Contracts intended to be
included among the Purchased Assets, including the right to elect to terminate
or not renew in accordance with the terms thereof on the advice of the
Purchaser, which termination shall, upon becoming effective, relieve the Seller
of any further obligation under this Section 2.02(c) with respect to such
Contract. At Purchaser's option and subject to Section 8.04, the Seller and the
Purchaser shall cooperate with each other to take such actions as are reasonably
calculated to effectuate the intent of the preceding sentence. Notwithstanding
anything to the contrary in the foregoing, the Purchaser may determine, in its
reasonable discretion, that any material Contract for which the required
consents and waivers referred to in Section 2.02(a) are not obtained by the
Seller, or the impracticalities of transfer referred to therein are not
resolved, by the Business Day prior to the Closing Date, shall not be a
Purchased Asset, and in that event all rights and obligations with respect to
such material Contract shall be retained by the Seller and the parties shall
agree to an equitable adjustment to the Purchase Price to reflect the reduced
value of the Purchased Assets.
Section 2.03 Liabilities Assumed by the Purchaser. Upon the terms and
subject to the conditions of this Agreement, the Purchaser agrees to assume as
of the Closing Date (i) any liabilities and obligations accruing and arising
after the Closing Date under any mortgage relating to the Real Property and
under any Transferred Lease, which amounts shall be prorated as of the Closing
Date, and (ii) the liabilities and obligations of the Seller that accrue with
respect to any Purchased Asset on or after the Closing Date or that accrue based
on services performed after the Closing Date under all Contracts and Purchased
Servicing Rights included in the Purchased Assets, subject to Section 2.04
(collectively, the "Assumed Liabilities"). The assumption of the Assumed
Liabilities shall be effected by delivery by the Purchaser to the Seller at the
Closing of the Assumption Agreement, whereby the Purchaser shall assume and
agree to pay and discharge in accordance with their terms the Assumed
Liabilities.
Section 2.04 Liabilities Not Assumed by the Purchaser. All obligations
and liabilities of the Seller not constituting Assumed Liabilities, including
any obligations and liabilities that accrue or arise before, on or after the
Closing Date based on or arising out of an act or omission occurring before the
Closing Date (whether or not disclosed to the Purchaser), are hereinafter
referred to as the "Retained Liabilities". The Purchaser shall not assume or be
liable with respect to the Retained Liabilities.
ARTICLE III
Purchase Price; Payment
Section 3.01 The Purchase Price. The Purchase Price (the "Purchase
Price") for the Purchased Assets will be $100 million, which shall be payable as
set forth herein. The Purchase Price shall be payable as follows:
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(a) The Purchaser shall pay the Seller $96 million on the Closing Date;
and
(b) Subject to the next succeeding sentences, the Purchaser shall pay
the Seller $2 million on the first anniversary of the Closing Date and $2
million on the second anniversary of the Closing Date (the two payments set
forth in this clause (b) are hereinafter referred to as the "Contingent Purchase
Price"). Payment of the Contingent Purchase Price shall only be required if
Seller has complied with the material terms of this Agreement and if the number
of Mortgage Loans being serviced by Purchaser as of the Closing Date has not
been reduced by 40% per annum or more on either the first anniversary date of
the Closing Date or the second anniversary of the Closing Date. In addition, the
Contingent Purchase Price payments shall be subject to setoff by and in
satisfaction of the amount of any liquidated claim (and may be withheld pending
resolution of any pending claim, to the extent that such withheld amounts become
payable to Seller such amounts shall bear interest at 5% per annum from the date
such amounts are withheld to the date paid) which has been asserted under
Article XII on or prior to the payment due dates. Any reduction of the
Contingent Purchase Price shall be applied first to the portion of the
Contingent Purchase Price otherwise payable on the first anniversary of the
Closing Date, then to the portion of the Contingent Purchase Price otherwise
payable on the second anniversary of the Closing Date.
ARTICLE IV
Representations and Warranties of the Seller
The Seller represents and warrants to the Purchaser as follows:
Section 4.01 Organization of the Seller. The Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Florida, with the requisite corporate power and authority to own,
operate and lease its properties and to carry on its business as now being or
has been conducted.
Section 4.02 Power and Authority. The Seller has the requisite
corporate power and authority to execute and deliver this Agreement and the
Related Documents to which it is or will be a party and to perform the
transactions contemplated hereby and thereby to be performed by it. Except for
the satisfaction of the conditions precedent set forth in Section 9.05 hereof,
all corporate action on the part of the Seller or the Seller's shareholders,
necessary to approve or to authorize the execution and delivery of this
Agreement and the Related Documents to which it is a party, and the performance
of the transactions contemplated hereby and thereby to be performed by it, has
been duly taken and this Agreement is, and the Related Documents shall be, valid
and binding obligations of the Seller, enforceable against Seller in accordance
with their respective terms.
Section 4.03 No Conflicts. Except as set forth in Section 4.03 of the
Disclosure Schedule, neither the execution or delivery by the Seller of this
Agreement or any Related Document to which it is or will be a party nor the
performance by Seller of the transactions contemplated hereby or thereby to be
performed by it shall:
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(i) conflict with or result in a breach of any provision of
the Articles of Incorporation (or other charter documents) or Bylaws of
the Seller ;
(ii) violate any Law applicable to the Seller or by which the
Seller or any of its properties is bound; or
(iii) constitute an event of default under, permit the
termination of, give rise to a right to accelerate any indebtedness
under, or otherwise violate, breach or conflict with, any Contract or
Approval binding on the Seller, or by which any material asset which
will be a Purchased Asset is bound, or result in the creation of any
Lien upon any asset which will be a Purchased Asset, other than such
Liens that may be imposed by or as a result of any action of the
Purchaser or any of its Affiliates; or require any consent, approval,
authorization or other order or action of, or notice to, or
declaration, filing or registration by Seller with any Governmental
Agency or other third party, except in the case of clause (iii) for
defaults, terminations, accelerations, violations, breaches or
conflicts, that would not reasonably be expected to have a Material
Adverse Effect on the Business.
Section 4.04 Litigation; Compliance with Laws.
(a) The Seller (i) is not in violation of, or has not received any
notice alleging a violation of, any applicable Law or any Approval issued or
required to be obtained thereunder or (ii) has no unsatisfied liability or
obligation in respect of any such violation, except for such violations,
liabilities or obligations that would not reasonably be expected to have a
Material Adverse Effect on the Business. The Seller and its Affiliates own or
possess in the operation of the Business all material Approvals which are
necessary for the conduct of the Business.
(b) Except as set forth in Section 4.04(b) and 4.06(d)(ii) of the Disclosure
Schedule, there is no pending or, to the knowledge of the Seller, threatened
Litigation by or before any Governmental Agency, court or arbitrator, to which
the Seller is a party or by which any asset that will be a Purchased Asset may
be bound or affected which is reasonably expected by the Seller to have a
Material Adverse Effect on the Business. Except as set forth in Section 4.04(b)
of the Disclosure Schedule, since January 1, 1996, no Governmental Agency has
initiated any proceeding or, to the Seller's knowledge, any investigation into
the business or operations of the Seller except pursuant to normal licensing
application and extension inquiries. There are no unresolved written violations,
citations or exceptions by any Governmental Agency with respect to any
examinations of the Seller or any of its Affiliates.
(c) Except as set forth in Section 4.04(c) of the Disclosure Schedule,
on the date hereof, neither the Seller nor any of its Affiliates is a party to
any consent decree and, to the knowledge of the Seller, none are threatened,
pending or contemplated.
Section 4.05 Financial Statements; SEC Reports
(a) Since January 1, 1997, the Seller has filed all required reports,
schedules, forms,
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statements and other documents (including exhibits and all other information
incorporated therein) with the Securities and Exchange Commission (the "SEC").
As of their respective dates, such documents (the "Seller SEC Documents")
complied as to form in all material respects with the applicable requirements of
the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934,
as amended, and the rules of the SEC applicable to such Seller SEC Documents,
and no Seller SEC Document when filed contained any untrue statement of a
material fact or omitted 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.
(b) The financial statements included in the Seller SEC Documents (the
"Financial Statements") fairly present, in all material respects the
consolidated financial position and the consolidated results of operations and
cash flows of the Seller and its consolidated subsidiaries for the period
therein identified in conformity with GAAP (except for the omission of footnotes
and, with respect to interim periods, normal year end adjustments).
(c) The Seller has previously delivered to the Purchaser copies of the
Seller's internally prepared accounting reports for each month since March 31,
1999, and will deliver such reports for June 30, 1999 when available (such
reports collectively, the "Internal Reports"). The statements of income for the
months ended April 30 and May 31 and the balance sheets as of April 30, May 31
and June 30 included in the Internal Reports were or will be prepared
consistently with the Financial Statements in accordance with GAAP as
appropriate for the preparation of interim reports of that type (except for the
omission of footnotes and, with respect to interim periods, normal year end
adjustments).
(d) Since December 31, 1998, except as identified on Section 4.05(d) of
the Disclosure Schedule, there has been no action taken by the Seller of the
type described in Section 10.04(a).
(e) As to their respective dates, the Seller had no liabilities of any
nature, known or unknown, fixed or contingent of a type required to be set forth
on a balance sheet in accordance with GAAP which were not reflected in the
Financial Statements or the Internal Reports and has not incurred any since the
date of the last Internal Report, except for liabilities incurred in the
ordinary course of business.
Section 4.06 Purchased Assets; Real Property; Leases and Other
Contracts; Insurance.
(a) Except as described in Section 4.06(a) of the Disclosure Schedule,
the Seller owns, in its sole name and stead, good and indefeasible title to, a
leasehold interest in or the right to use all Purchased Assets, and at the
Closing will (subject to Section 2.02) have the right to convey and transfer to
the Purchaser, all Purchased Assets free and clear of all Liens, except for
Liens for Taxes not yet due and payable or which are being contested in good
faith by appropriate proceedings and Liens disclosed in Section 4.06(a) of the
Disclosure Schedule. All of the tangible assets which will be Purchased Assets
and the assets leased or licensed under Contracts which will be Purchased Assets
are in good operating condition and repair, reasonable wear and tear excepted.
The assets that will be Purchased Assets, taken together, include all material
properties, Contracts, rights and assets which are being used in the conduct of
the Business. The Purchased Assets comprise all the
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material properties, Contracts, rights and assets required by the Seller to
conduct the Business and to service the Mortgage Loans. The Purchased Assets are
not subject to any option to purchase or right of first refusal.
(b) Section 4.06(b) of the Disclosure Schedule contains a brief
description of all Real Property owned in fee simple or held pursuant to a Lease
by the Seller that will be included in the Purchased Assets. Except for the Real
Property and Transferred Leases, no other real property, or interest in real
property, is used in the operation of the Business. To the knowledge of Seller,
the Real Property and Transferred Leases include all material easements and
rights-of-way necessary for present access to and use, as currently utilized, of
the Real Property and the real property subject to the Transferred Leases,
including, but not limited to easements for all utilities servicing the Real
Property and the real property subject to the Transferred Leases. To the
knowledge of Seller, the Real Property and the real property subject to the
Transferred Leases conform in all material respects to all applicable zoning
laws and regulations, and no written notice of violation of any Laws or
Judgments relating to the Real Property or the real property held pursuant to
the Transferred Leases has been received by the Seller. To the knowledge of
Seller, no condemnation proceedings are pending, proposed or threatened, which
would have a Material Adverse Effect on the Real Property or the real property
held pursuant to the Transferred Leases.
In addition, the Seller represents and warrants that:
(i) No tenant, licensee or other entity has any rights to use or
occupy any part of the Real Property or the real property held
pursuant to the Transferred Leases.
(ii) No assessment (general or specific) exists or is pending as to
all or any part of the Real Property or the real property held
pursuant to the Transferred Leases.
(iii) The improvements on the Real Property and the real property held
pursuant to the Transferred Leases are currently in good repair
(ordinary wear and tear excepted) and have been maintained in
accordance with past practice.
(iv) There has been no material or labor furnished to or on the Real
Property or the real property held pursuant to the Transferred
Leases for which payment to be made by Seller has not been made,
to the knowledge of the Seller there are no mechanic's or
materialmen's liens or claims filed against the Real Property or
the real property held pursuant to the Transferred Leases, and
Seller has received no notices of any claims of non-payment or
claims of liens by any contractors, subcontractors, suppliers,
mechanics, materialmen or artisans with respect to any work
performed on or materials furnished to the Real Property or the
real property held pursuant to the Transferred Leases at the
request of Seller.
(v) Except as set forth in Section 4.06(b)(v) of the Disclosure
Schedule, there are no material agreements, guarantees,
indemnities or offers, either written or oral, affecting the
Real Property or, to the Seller's Knowledge, the real property
held pursuant to the Transferred Leases.
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(vi) The parking facilities at the Real Property contain spaces for
automobiles, which spaces, are sufficient to comply in all
material respects with all local ordinances and with all parking
commitments made by Seller under any documents.
(vii) To Seller's knowledge, there are no pending or, threatened
actions or proceedings to alter the current zoning for the Real
Property or the real property held pursuant to the Transferred
Leases.
(c) All Contracts included in the Purchased Assets are in full force
and effect and are valid and binding obligations of the Seller and, to the
Seller's knowledge, of the other parties thereto, except for such Contracts, the
failure of which to be in full force and effect or valid and binding would not
reasonably be expected to have a Material Adverse Effect on the Business. The
Seller has provided to the Purchaser true and complete copies of all such
Contracts. Except as set forth in Section 4.06(c) of the Disclosure Schedule, no
party to any such Contract is in default in any material respect under any such
Contract, nor to the knowledge of the Seller, does there presently exist any
event or condition which, with the passage of time or giving of notice or both,
could be reasonably expected to constitute such a material default. The Seller
has not received any written notice that any party to any Contract has
determined to or intends to terminate such agreement. Section 4.06(c)(i) and
Section 2.01(a)(ii) of the Disclosure Schedule accurately set forth all payment
obligations under any Transferred Leases, expiration dates of Transferred Leases
and options to renew or cancel such Transferred Leases.
(d) Section 4.06(d) on the Disclosure Schedule contains a complete and
correct list of (i) all material insurance policies under which the Seller is a
named insured and that provide coverage with respect to the Purchased Assets and
(ii) any outstanding claims under such insurance policies related to the
Purchased Assets. Seller has not received notice of cancellation of any such
policies.
Section 4.07 Labor Relations. With respect to any employees of the
Business, the Seller is not a party to any collective bargaining agreement with
a labor organization certified by the National Labor Relations Board (the
"NLRB"), and (a) there is no unfair labor practice charge or complaint against
the Seller pending before, or to the knowledge of the Seller, threatened to be
brought before, the NLRB, (b) there is no labor strike, or organized dispute,
slowdown, work stoppage or other form of collective labor activity actually
pending or, to the knowledge of the Seller , threatened against or affecting the
Seller, (c) there is no union representation claim or petition pending before
the NLRB and (d) Seller has not experienced any organized dispute, slowdown,
work stoppage or other form of collective activity in the past three years.
Section 4.08 Mortgage Loans.
(a) In connection with the execution of this Agreement, Seller has
delivered to Purchaser in a computer tape format reasonably acceptable to
Purchaser, a report that identifies the Mortgage Loans (the "Mortgage Loan
Schedule," which term includes, except where the context requires otherwise, the
updated schedule to be prepared and delivered in accordance with Section
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10.15 (Updated Mortgage Loan Schedule)). The Mortgage Loan Schedule identifies
each Mortgage Loan, and sets forth the following information with respect to
each such Mortgage Loan as of the close of business on the last day of the
preceding month (the "Cut-off Date"): (1) the Seller's mortgage loan identifying
number; (2) the mortgagor's first and last name; (3) the original term to
maturity in months; (4) the original date of the mortgage; (5) the mortgage
interest rate in effect on the Cut-off-Date and (6) the stated maturity date.
The information set forth in the Mortgage Loan Schedule is complete, true and
correct in all material respects as of the date hereof.
(b) The Mortgage Loans have been underwritten, originated, held and
serviced in compliance in all material respects with (i) all applicable
contractual requirements (including contractual requirements of private
investors), (ii) all applicable Laws, (iii) all requirements of any insurer, and
(iv) all requirements of the Servicing Agreements.
(c) The brokers and correspondents involved in the origination of any
Mortgage Loan have complied in all material respects with all internal policies
and procedures of the Seller with respect to the origination of such Mortgage
Loans and all applicable Laws, except for such non-compliance as would not
reasonably be expected to have a Material Adverse Effect on the Business.
(d) Except as disclosed in Section 4.08 of the Disclosure Schedule, the
files relating to a the Mortgage Loan contain all documentation necessary for
the Purchaser to service such Mortgage Loan following the Closing, except for
the failure of such files to contain documentation as would not reasonably be
expected to have a Material Adverse Effect on the Business.
(e) Each Mortgage Loan included in a mortgage loan pool met at the time
of its inclusion all the eligibility requirements of the investor for inclusion
in such mortgage pool., except for such Mortgage Loans as would not reasonably
be expected to have a Material Adverse Effect on the Business.
(f) Except as set forth in Section 4.08(f) of the Disclosure Schedule,
except for Mortgage Loans that are delinquent or in default, or which have been
foreclosed, the Seller has no knowledge of any circumstances or conditions with
respect to any Mortgage, any Mortgaged Property, any Mortgagor or any
Mortgagor's credit standing that can reasonably be expected to cause
institutional investors investing in loans of the same type as a Mortgage Loan
to regard such Mortgage Loan to be an unacceptable investment or adversely
affect the value of the Mortgage Loan.
(g) All of the Mortgage Loans are being serviced without recourse to
the Seller (other than for breaches of customary representations and warranties
and other than for recourse to the excess servicing rights which are retained by
the Seller).
(h) The Mortgage Loans are being serviced in compliance in all material
respects with the provisions of any applicable agreements (the "Servicing
Agreements").
(i) The Seller has not, and the Seller has no knowledge that any other
person has, taken
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any action or omitted to take any reasonably required action, which action or
omission would impair the rights of the Seller or (after the Closing) the
Purchaser in the Mortgage Loans or prevent any such person from collecting any
amounts due thereunder, except for such actions or omissions that would not
reasonably be expected to have a Material Adverse Effect on the Business.
(j) Except as set forth in Section 4.08(j) of the Disclosure Schedule,
the Seller has not received any written request that remains outstanding from
any investor, trustee or insurer to repurchase any of the Mortgage Loans.
(k) Except as set forth in Section 4.08(k) of the Disclosure Schedule,
no Person other than the Seller has serviced any of the Mortgage Loans.
Section 4.09 Vote Required. The affirmative vote of the holders of each
of (a) a majority of the outstanding common stock of the Seller and any
outstanding Class D Preferred Stock of the Seller, voting together as class,
entitled to vote thereon, (b) two-thirds of the outstanding Series A Preferred
Stock entitled to vote thereon and (c) two-thirds of the outstanding Series C
Preferred Stock entitled to vote thereon are the only votes of the holders of
any class or series of the Seller's capital stock necessary to approve the
transaction contemplated hereby.
Section 4.10 Transactions with Affiliates. Since January 1, 1997,
except as set forth in Section 4.10 of the Disclosure Schedule with respect to
the Purchased Assets, the Seller has not purchased, acquired or leased any
property or services from or sold, transferred or leased any property or
services to, or lent or advanced any money to, or borrowed any money from, or
acquired any capital stock, obligations or securities of, or made any management
consulting or similar fee agreement with any officer, director or employee of
the Seller or of any Affiliate of the Seller.
Section 4.11 Intellectual Property.
(a) The Seller is the sole owner of all right, title and interest in,
or a valid right to use, the Seller IPR, free and clear of all Liens. All
renewal fees and actions reasonably required to be taken for the maintenance or
protection of the Seller IPR have been paid and taken, except for fees and
actions that would not reasonably be expected to have a Material Adverse Effect
on the Business. The Seller or an Affiliate has the exclusive, unqualified right
to use the Seller IPR and Third Party IPR and to transfer the Seller IPR and
Third Party IPR as set forth in Section 2.01(a)(vi) of the Disclosure Schedule,
subject to Third Party IPR licensing requirements, to the Purchaser. The Seller
has not received any written charge, complaint, claim, demand or notice alleging
that the ownership or use of the Seller IPR or Third Party IPR constitutes any
interference with or infringement or misappropriation of any rights of any
Person, and the Seller has no knowledge of any reasonable basis therefor. To the
Seller's knowledge, no Person has interfered with, infringed or misappropriated
any material Seller IPR. Except as set forth in Section 2.01(a)(vi) of the
Disclosure Schedule, neither the Seller IPR nor the Third Party IPR, is subject
to any outstanding Judgment or Contract to which Seller is a party prohibiting
or restricting the use thereof by the Seller with respect to the Business or
prohibiting or restricting the licensing or transfer thereof by the Seller to
the Purchaser or any other Person, or restricting the use thereof by
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the Purchaser or any other Person.
(b) Except to the extent set forth in Section 4.11(b) of the Disclosure
Schedule, the Seller has not entered into any agreement to indemnify any Person
against any charge of infringement of any Intellectual Property Right or
misappropriation of any trade secret.
(c) All Software, computer hardware and other systems currently used in
the Business are Year 2000 Compliant. Each third party whose systems interface
with the Business' internal systems has advised the Seller that such third
party's systems will be Year 2000 Compliant, and by the Closing Date, the Seller
will have used its reasonable best efforts to verify the accuracy of such
advice.
(d) Except as set forth in Section 4.11(d) of the Disclosure Schedule,
all records and systems (including without limitation computer systems but
excluding Third Party IPR) and all data and information of the Business which
are Purchased Assets are owned by the Seller , and are recorded, stored,
maintained or operated or otherwise held by the Seller and are not wholly or
partly dependent on any facilities which are not under the exclusive ownership
or control of the Seller.
(e) None of the operations of the Business involve the unlicensed or
unauthorized use of confidential information which is not owned by Seller or its
Affiliates. To the Seller's knowledge, the processes employed, the services
provided, the business conducted and the products used or dealt in by the Seller
in the conduct of the Business do not infringe any Intellectual Property Rights
of any unaffiliated Person, except for such infringement that would not
reasonably be expected to have a Material Adverse Effect on the Business. Except
as set forth in Section 4.11(e) of the Disclosure Schedule, none of the
operations of the Business give rise to any material royalty or like payment
obligation for the use of any Third Party IPR.
(f) The Seller has taken all reasonable customary and usual precautions
to protect the secrecy, confidentiality, and value of its trade secrets. The
Seller has good title and an absolute right to use the trade secrets. To the
Seller's knowledge, none of the trade secrets are part of the public knowledge
or literature, or have been used, divulged, or appropriated either for the
benefit of any Person (other than the Seller or its Affiliates) or to the
detriment of the Seller or any of its Affiliates, except for trade secrets the
disclosure of which would not reasonably be expected to have a Material Adverse
Effect on the Business. No material trade secret is subject to any adverse claim
or, to the Seller's knowledge, has been challenged or threatened in writing.
Section 4.12 Environmental Liability. Neither the Seller nor, to the
Seller's knowledge, any third party has engaged in the generation, use,
manufacture, treatment, transportation, storage or disposal of any Hazardous
Material on any of the properties included in the Purchased Assets, and the
Seller has no knowledge that any such properties, as currently used and
occupied, do not comply in all material respects with applicable Laws and
Approvals, including those relating to land use, pollution, Hazardous Materials
and the environment. There is no Litigation and, to the knowledge of the Seller,
there are no private investigations or remediation activities or governmental
investigations pending or, to the Seller's knowledge threatened, seeking to
impose, or
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that would reasonably be expected to result in the imposition, on the Seller or
any Affiliate any obligation or liability under any Law relating to pollution,
Hazardous Materials or the environment which would reasonably be expected to
have a Material Adverse Effect on the Seller, nor does the Seller know of any
reasonable basis therefor.
Section 4.13 Brokers. The Seller has not retained any broker other than
Donaldson, Lufkin and Jenrette ("DLJ") as a broker, in connection with this
Agreement or the transactions provided for hereby, and the fees due DLJ are
solely the responsibility of Seller.
Section 4.14 Information Supplied; Accuracy of Data.
(a) All information (including information on computer tapes and disks)
provided by or on behalf of the Seller to the Purchaser or any of its Affiliates
including any cut-off date information, payment and remittance information and
service fee information and any other information provided in connection with
the negotiation of this Agreement and the consummation of the transactions
contemplated hereby was, as of the date provided, true, complete and correct in
all material respects.
(b) The records (including computer records), files and other
information in written or recorded form relating to, or used by the Seller in
connection with, the Business accurately reflect in all material respects the
information supplied to the Seller by third parties and the actions taken by the
Seller. All servicing accounts maintained by or on behalf of Seller accurately
reflect all material transactions in such accounts and all material information
supplied to the Seller by third parties.
(c) All representations and warranties given by the Seller in
connection with the securitization transactions identified on Section 2.01(a)(i)
of the Disclosure Schedule were true and correct as of the closing date of each
such related securitization.
Section 4.15 Taxes. (a) With respect to Taxes:
(i) each of the Seller and its Affiliates has filed all Tax
Returns that it was required to file. All such Tax Returns were correct
and complete in all respects. All Taxes owed by any of the Seller or
its Affiliates (whether or not shown on any Tax Return) have been paid.
None of the Seller and its Affiliates currently is the beneficiary of
any extension of time within which to file any Tax Return, except as
disclosed in Section 4.15(a)(i) of the Disclosure Schedule. No claim
has ever been made by an authority in a jurisdiction where any of the
Seller and Affiliates does not file Tax Returns that is or may be
subject to taxation by that jurisdiction;
(ii) except to the extent disclosed on Section 4.15(a)(ii) of
the Disclosure Schedule, no adjustments relating to Taxes of the
Affiliates have been proposed by the Internal Revenue Service or any
state, local or foreign taxing authority, whether informally or in
writing, and to the Seller's knowledge no basis exists for such an
adjustment;
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(iii) there are no Tax liens on any of the assets of any of
the Seller and its Affiliates that arose in connection with any failure
(or alleged failure) to pay any Tax other than for taxes that are not
yet due and payable, or for taxes that are being contested in good
faith;
(iv) to the Seller's knowledge, there are no proposed
reassessments of the Purchased Assets or any property owned by the
Affiliates, or other proposals that could increase the amount of Tax to
which the Seller and its Affiliates would be subject; and
(v) each of the Seller and its Affiliates has withheld and
paid all Taxes required to have been withheld and paid in connection
with amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party;
(vi) except as disclosed in Section 4.15(vi) of the Disclosure
Schedule, no penalties under Section 6721, 6722 or 6723 of the Code
have been assessed against the Seller or any of the Affiliates, or if
penalties have been assessed, all such penalties have been abated; and
(vii) none of the Seller and its Affiliates has waived any
statute of limitations in respect of Taxes or agreed to any extension
of time with respect to a Tax assessment or deficiency.
Section 4.16 Title to the Servicing and Escrow Accounts. The Seller is
the sole and lawful owner of the Servicing Rights, is responsible for the
maintenance of the Escrow Accounts, has the sole right and authority, subject to
obtaining the Approvals set forth in Section 4.16 of the Disclosure Schedule, to
transfer the Purchased Servicing Rights as contemplated hereby, and is not
contractually obligated to sell or subcontract the Purchased Servicing Rights to
any other party.
Section 4.17 Escrow Accounts. All Escrow Accounts have been and are
being maintained in all material respects in accordance with applicable Law and
in accordance with the Servicing Agreements and the terms of all documents
related to the Mortgage Loans. All balances required by any documents related to
the Mortgage Loans and paid to the Seller for the account of the Mortgagors are
on deposit in the appropriate Escrow Account. The Seller has credited or caused
to be credited to the account of each Mortgagor all interest required to be paid
to a Mortgagor on any escrowed amounts in the Escrow Account in accordance with
all applicable requirements.
Section 4.18 Custodial Accounts. All Custodial Accounts have been and
are being maintained in all material respects in accordance with applicable Law
and in accordance with the Servicing Agreements and related obligations. All
balances paid to the Seller for the account of the Mortgagors and required by
the Servicing Agreements or any other documents related to the Mortgage Loans to
be held by the Seller in Custodial Accounts are on deposit in the appropriate
Custodial Account.
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Section 4.19 Servicing Agreements. The Servicing Agreements set forth
all of the terms and conditions of the Seller's rights and obligations to any
investor or trustee that is a party thereto, and there are no other agreements,
written or oral, that modify or affect the Servicing Agreements in any material
respect. The Seller has delivered to the Purchaser true, correct and complete
copies of the Servicing Agreements.
Section 4.20 Solvency. On the date hereof, the Seller believes that
both immediately before and after, and giving effect to consummation of the
transactions contemplated by this Agreement, including, but not limited to, the
transfer of the Purchased Assets to the Purchaser, (i) the book value of the
Seller's assets will exceed its liabilities (after estimating the value of the
cash flows on interest only and residual certificates on an undiscounted cash
flow basis), and (ii) the Seller will be able to pay its debts and other
liabilities (including, but not limited to the reasonably anticipated amount of
subordinated, unmatured, unliquidated and contingent liabilities (collectively,
the "Contingent Liabilities")), as they mature; provided, however, that this
representation and warranty in clause (ii) is based upon the assumptions that
the Seller will be able to liquidate its assets in an orderly process for full
book value, and that the maturity and amount of liabilities (including but not
limited to the Contingent Liabilities) will be renegotiated to match the amounts
and timing of the orderly liquidation of such assets.
ARTICLE V
Representations and Warranties of the Purchaser
The Purchaser represents and warrants to the Seller as follows:
Section 5.01 Organization of the Purchaser. The Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the requisite power and authority to own,
operate and lease its properties and to carry on its business as now being
conducted.
Section 5.02 Power and Authority. The Purchaser has the requisite power
and authority to execute and deliver this Agreement and the Related Documents to
which it is or will be a party and to perform the transactions contemplated
hereby and thereby to be performed by it. Except for the satisfaction of the
conditions precedent set forth in Section 8.11 hereof, all corporate action on
the part of the Purchaser necessary to approve or to authorize the execution and
delivery of this Agreement and the Related Documents to which it is or will be a
party and the performance of the transactions contemplated hereby and thereby to
be performed by it has been duly taken. This Agreement is a valid and binding
obligation of the Purchaser, enforceable in accordance with its terms.
Section 5.03 No Conflicts. Except as set forth in Section 5.03 of the
Disclosure Schedule, neither the execution or delivery by the Purchaser of this
Agreement or the Related Documents to which it is or will be a party nor the
performance by the Purchaser of the transactions contemplated hereby or thereby
to be performed by it, shall:
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(i) conflict with or result in a breach of any provision of
the Certificate of Incorporation or Bylaws of the Purchaser;
(ii) violate any Law applicable to the Purchaser or by which
the Purchaser or any of its properties is bound; or
(iii) require any consent, approval, authorization or other
order or action of, or notice to, or declaration, filing or
registration with, any Governmental Agency or other third party.
Section 5.04 Litigation. Except as set forth in Section 5.04 of the
Disclosure Schedule, there is no pending or, to the knowledge of the Purchaser,
threatened Litigation, by or before any Governmental Agency, court or arbitrator
to which Purchaser is a party which may affect or delay Purchaser's ability to
fulfill the terms of its obligations under this Agreement.
Section 5.05 Brokers. The Purchaser has not retained any broker or
finder, and no broker or finder has acted on behalf of the Purchaser, in
connection with this Agreement or the transactions provided for hereby.
ARTICLE VI
Employees and Employee-Related Matters
Section 6.01 Basic Employment Matters.
(a) Effective as of the Closing Date, the Purchaser or an Affiliate of
the Purchaser (the "Employer") shall offer to employ substantially all of the
employees of the Seller employed in the Business on the day before the Closing
Date and who have been working in offices of the Seller located on the Real
Property and the Transferred Leases for a majority of the Business Days for one
year prior to the date of this Agreement or, with respect to employees who have
not been employed for one year, who have been working in offices of the Seller
located on the Real Property and the Transferred Leases for a majority of the
Business Days during the time they have been employed and were not previous
employees of any Affiliate. The Purchaser agrees to deliver to the Seller at
least ten Business Days before the Closing Date a list of employees to whom it
will offer employment. Purchaser may offer such employees salaries, bonuses and
benefits, which Purchaser, in its sole discretion, deems appropriate. The
employees to whom the Employer elects to offer employment pursuant to the
preceding sentence and who accept such employment are referred to collectively
herein as the "Employees." The employment of the Employees shall not be
construed to limit the ability of Purchaser to terminate the employment of any
Employee at any time for any reason, and the employment of the Employees shall
be subject to all of the Purchaser's practices and policies, including its
policy of employment-at-will. Such Employees will be offered employment as new
Employees of the Purchaser (a) at a location of not more than fifty (50) miles
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distant from their present employment site; (b) at a level comparable to their
present position with Seller and (c) with benefits in accordance with the
Purchaser's plans now or thereafter in effect. Such Employees shall receive
credit for years of employment with Seller for (i) calculating vacation benefits
and (ii) calculating benefits under Purchaser's severance benefits. Purchaser
shall waive pre-existing condition requirements, evidence of insurability
provisions, waiting period requirements or any similar provisions applicable as
of the Closing Date under any Employee Welfare Benefit Plans maintained,
sponsored or contributed to by the Purchaser for Employees after the Closing
Date; and the Purchaser shall apply toward any deductible requirements and
out-of-pocket maximum limits under such Employee Welfare Benefit Plans any
amounts paid (or accrued) by each Employee under Seller's Employee Welfare
Benefit Plans during the current plan year; provided, however, that the
foregoing shall apply only to the extent that Seller provides the Purchaser with
such information as Purchaser reasonably requires to administer such provisions.
For the purposes of this Agreement, "Employee Welfare Benefit Plan" means any
employee welfare benefit plan within the meaning of Section 3(1) of ERISA,
regardless of whether any such plan is subject to ERISA.
(b) None of the Employee Benefit Plans of Seller or its Affiliates is
being assumed by or transferred to Purchaser and Purchaser shall have no rights
or liabilities with respect to any such Employee Benefit Plan.
ARTICLE VII
Closing
Section 7.01 The Closing. The Closing shall be held at 10:00 a.m. on
the earliest date that is five Business Days after the satisfaction or waiver of
all of the conditions to Closing set out in Articles VIII and IX hereto (other
than any condition to be satisfied or waived at the Closing) at the offices of
the Purchaser at 300, St. Paul Place, Baltimore, Maryland 21202, or at such
other time and place as may mutually be agreed upon by the parties hereto. At
the Closing, the appropriate parties shall take all other actions not previously
taken but required to be taken hereunder on or prior to the Closing Date. The
transfer of the Purchased Assets to the Purchaser and the assumption of the
Assumed Liabilities by the Purchaser shall be deemed to occur at 12:01 a.m. on
the Closing Date.
ARTICLE VIII
Conditions to Obligations of the Purchaser
to Consummate the Transaction
The obligations of the Purchaser to be performed at the Closing shall
be subject to the satisfaction or waiver, at or prior to the Closing, of the
following conditions:
Section 8.01 Representations and Warranties; Compliance with Covenants.
The representations and warranties of the Seller contained in this Agreement
shall be true and correct in
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all material respects (other than those qualified as to materiality, Material
Adverse Effect or Material Adverse Change which shall be true and correct) on
and as of the Closing Date with the same force and effect as though such
representations and warranties were made at the Closing Date. The covenants
required to be performed by the Seller at or prior to the Closing pursuant to
the terms of this Agreement shall have been duly performed in all material
respects. The Purchaser shall have received a certificate of the President of
the Seller, executed on behalf of the Seller, to the effect (i) of the preceding
two sentences and (ii) that the Seller believes that after Closing Date the
Seller will not have unreasonably small capital for the limited business in
which the Seller reasonably expects to be engaged. In addition, the Purchaser
shall have received a certificate from the Chief Financial Officer, executed on
behalf of the Seller, that the representation and warranties in Sections 4.20(i)
and (ii) are true and correct in all respects on and as of the Closing Date as
if made on and as of the Closing Date.
Section 8.02 No Proceedings. No proceedings have been instituted before
a court of competent jurisdiction in the United States or any other Governmental
Agency, which has had the effect or which could reasonably be expected to lead
to a Judgment, which has the effect, or shall have the effect, of enjoining the
consummation of the transactions contemplated by this Agreement.
Section 8.03 Approvals. All Approvals (not including mortgage lending
Approvals) required from any Governmental Agency in order to consummate the
transactions contemplated by this Agreement and to conduct the Business
following the Closing and as set forth in Section 8.03 on the Disclosure
Schedule shall have been obtained and all applicable waiting periods under any
applicable Laws shall have expired or been terminated, without the imposition of
any materially burdensome restrictions or conditions on the Purchaser.
Section 8.04 Third Party Consents. Each of the Approvals necessary from
any person not a Governmental Agency for the transfer of the Purchased Assets
to, or assumption of the Assumed Liabilities by, the Purchaser and as set forth
in Section 8.04 on the Disclosure Schedule shall have been obtained. Without
limiting the foregoing, this Agreement shall have been approved, and the
transactions contemplated herein, including, but not limited to, the transfer of
the Purchased Assets to the Purchaser, consented to, by more than 90% of the
creditors, based on amount due, of the Seller known by the Seller to exist as of
the date of Closing.
Section 8.05 Bill of Sale, etc. The Seller shall have duly authorized,
executed and delivered to the Purchaser the Bill of Sale dated as of the Closing
Date, and the deeds and other instruments of conveyance referred to in Section
2.01(d).
Section 8.06 Survey; Title Policies. The Purchaser shall have received
the surveys and commitments to issue title policies with respect to the Real
Property as specified in Section 10.12.
Section 8.07 Employment. Those persons identified in Section 8.07 of
the Disclosure Schedule shall have accepted employment with the Purchaser
effective as of the Closing Date, on terms and conditions reasonably
satisfactory to the Purchaser.
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Section 8.08 Transfer Instructions. The transfer instructions for the
transfer of the Purchased Servicing Rights and the related Mortgage Loans
identified on Schedule 8.08 to be completed prior to the Closing Date shall have
been completed in all material respects.
Section 8.09 Corporate and Other Approval. This Agreement and the
transactions contemplated hereby shall have been approved and adopted by (i) the
stockholders of the Seller by (a) the vote required by the Florida Business
Corporation Act, (b) the affirmative vote of the holders (other than the
Principal Stockholders) of a majority of the shares of the common stock of the
Seller outstanding and owned by such holders entitled to vote thereon, and (c)
the affirmative vote of the holders of two-thirds of the shares of each class
preferred stock of the Seller outstanding entitled to vote thereon, and (ii) by
a majority of the members of the Seller's board of directors and the special
committee of independent directors.
Section 8.10 Valuation Opinion. The Seller shall have received, at its
sole cost and expense, the opinion of a business valuation expert reasonably
satisfactory to the Purchaser, dated the Closing Date, addressed to the
Purchaser and reasonably satisfactory as to form and content to the Purchaser to
the effect that Seller has received reasonably equivalent value in exchange for
the transfer of the Purchased Assets and the Seller shall have delivered such
opinion to the Purchaser.
Section 8.11 Board Approval. This Agreement and the transactions
contemplated hereby shall have been approved by the Board of Directors of each
of the Purchaser and Citigroup Inc.
Section 8.12 No Material Adverse Change. There shall have been no
Material Adverse Change in the Business or the Purchased Assets.
Section 8.13 Release of Liens; UCC Filings. The Seller shall have
obtained or filed all documents or instruments or taken all actions necessary to
release any material Liens on the Purchased Assets, including the filing of
UCC's, other than Liens that constitute Assumed Liabilities.
Section 8.14 Inapplicability of Florida Control Share and Affiliated
Transactions Statutes. The Seller shall have taken the actions necessary so that
the provisions of Florida Statutes section 607.0901 and 607.0902 do not apply to
the transactions contemplated herein.
Section 8.15 Transition Services Agreement. Purchaser and Seller shall
have entered into a transition services agreement in form and substance
reasonably satisfactory to Purchaser and Seller.
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ARTICLE IX
Conditions to Obligations of the Seller
to Consummate the Transaction
The obligations of the Seller to be performed at the Closing shall be
subject to the satisfaction or waiver, at or prior to the Closing, of the
following conditions:
Section 9.01 Representations and Warranties; Compliance with Covenants.
The representations and warranties of the Purchaser contained in this Agreement
shall be true and correct in all material respects on and as of the Closing Date
with the same force and effect as though such representations and warranties
were made at the Closing Date; the covenants required to be performed by the
Purchaser at or prior to the Closing pursuant to the terms of this Agreement
shall have been duly performed in all material respects; and the Seller shall
have received a certificate of the President or a Vice President of the
Purchaser to such effect.
Section 9.02 No Injunction. No Judgment shall have been rendered in any
Litigation which has the effect of enjoining the consummation of the
transactions contemplated by this Agreement.
Section 9.03 Approvals. All Approvals required from any Governmental
Agency in order to consummate the transactions contemplated by this Agreement
shall have been obtained and all applicable waiting periods under any applicable
Laws shall have expired or been terminated, without the imposition of any
materially burdensome restrictions or conditions on the Seller.
Section 9.04 Assumption Agreement. The Purchaser shall have duly
authorized, executed and delivered to the Seller the Assumption Agreement, dated
as of the Closing Date, and shall have acknowledged the Bill of Sale.
Section 9.05 Corporate and Other Approval. This Agreement and the
transactions contemplated hereby shall have been approved and adopted by (i) the
stockholders of the Seller by (a) the vote required by the Florida Business
Corporation Act, (b) the affirmative vote of the holders other than the
Principal Stockholders of a majority of the shares of the common stock of the
Seller outstanding entitled to vote thereon, and (c) the affirmative vote of the
holders of two-thirds of the shares of each class preferred stock of the Seller
outstanding entitled to vote thereon, and (ii) by a majority of the members of
the Seller's board of directors and the special committee of independent
directors.
Section 9.06 Payment. The Purchaser shall have paid to the Seller, in
immediately available funds, the Purchase Price less the Contingent Purchase
Price.
Section 9.07 Transition Services Agreement. Purchaser and Seller shall
have entered into a transition services agreement in form and substance
reasonably satisfactory to Purchaser and Seller.
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ARTICLE X
Covenants
Section 10.01 Regulatory Filings. As soon as practicable after the
execution of this Agreement, the parties shall make all filings with the
appropriate Governmental Agencies of the information and documents required or
contemplated by any applicable Law with respect to the transactions contemplated
by this Agreement. The Seller, on the one hand, and the Purchaser, on the other
hand, shall use their commercially reasonable efforts to comply as expeditiously
as possible with all lawful requests of such Governmental Agencies for
additional information and documents.
Section 10.02 Injunctions. If any court having jurisdiction over any of
the parties hereto issues or otherwise promulgates any restraining order,
injunction, decree or similar order which prohibits the consummation of any of
the transactions contemplated hereby or by any Related Document, the parties
hereto shall use reasonable efforts to have such restraining order, injunction,
decree or similar order dissolved or otherwise eliminated as promptly as
possible and to pursue the underlying Litigation diligently and in good faith.
Notwithstanding anything to the contrary contained in this Agreement, nothing
contained in this Section 10.02 shall limit the respective rights of the parties
to terminate this Agreement pursuant to Section 13.01 or shall limit or
otherwise affect the respective conditions to the obligations of the parties set
forth in Articles VIII and IX hereof.
Section 10.03 Access to Information. Between the date of this Agreement
and the Closing Date, the Seller shall, and shall cause its Affiliates to, upon
reasonable request by the Purchaser, (i) provide the Purchaser and its
accountants, counsel and other authorized representatives access, during normal
business hours and under reasonable circumstances, to any and all premises,
properties, Contracts, commitments, books, records and other information of or
relating to the Business and to the officers, employees and agents of the
Business and (ii) cause its officers to furnish to the Purchaser and its
authorized representatives any financial, environmental, health and safety,
technical and operating data and other information pertaining to the Business,
as the Purchaser shall from time to time reasonably request and which is either
normally available to the Seller in the ordinary and usual course of business or
which may be obtained or produced by the Seller at a de minimis cost and effort
to the Seller.
Section 10.04 No Extraordinary Actions by the Seller.
(a) In each case except as (x) consented to or approved by the
Purchaser in writing (which consent shall not be unreasonably withheld, bearing
in mind the Purchaser's plans to operate the Business after the Closing), (y)
required by this Agreement or the Related Documents or (z) related to the
Excluded Assets or the Retained Liabilities, from the date hereof until the
Closing, the Seller shall not take any action that would cause its
representations and warranties herein to be untrue in any material respect
(except for the representation and warranty in Section 4.20 which shall remain
true in all respects) and shall conduct the Business only in the ordinary course
and substantially in accordance with its present policies and procedures
(including without limitation
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loan collection and chargeoff practices) and use reasonable commercial efforts
to preserve intact its present organization relating to the Business, keep
available the services of its present management and employees and preserve its
relationships with suppliers and customers and others having business dealings
with it (including, to the extent consistent with the provisions of this
Agreement, its Affiliates) so that the Business shall not be impaired in any
material respect, and the Seller and its Affiliates will not:
(i) Permit or allow any of the assets that will be Purchased
Assets to be subjected to any Lien, except for Liens for Taxes not yet
due and payable or which are being contested in good faith by
appropriate proceedings and except for Liens that are part of the
Assumed Liabilities as of the date of this Agreement and except for
Liens provided in connection with the financing of servicing advances;
(ii) Sell, transfer, license, lease or otherwise dispose of or
agree to dispose of, or acquire or agree to acquire, any material
assets that would be Purchased Assets except in the ordinary course of
business, or sell, transfer, license, lease or otherwise dispose of or
agree to dispose of any Servicing Rights except for Liens provided in
connection with the financing of servicing advances;
(iii) Except as required by Contract or applicable Law, grant
any general increase or implement any general decrease in the
compensation of officers or employees (including any such increase
pursuant to any bonus, pension, profit-sharing or other plan or
commitment) or grant any increase in the compensation payable or to
become payable to any officer or employee, except for increases in
compensation payable to employees (but not officers) in the ordinary
course of business consistent with past practice;
(iv) Make any single capital expenditure or commitment in
excess of $25,000 for additions to property, plant, equipment or
intangible capital assets that would be included in the Purchased
Assets or make aggregate capital expenditures and commitments for such
purposes in excess of $100,000;
(v) Enter into any agreement (other than Mortgage Loans or
commitments to make Mortgage Loans) for, or modify or amend any
existing agreements with, a non-cancelable term in excess of one year
or involving aggregate payments by the Seller in excess of $50,000,
except for modifications or amendments to the Seller's existing
intercreditor agreements with its significant warehouse and other
significant lenders; or
(vi) Hire any person who would become an Employee, provided
that the Seller may hire any non-exempt employee to fill a vacancy or
enter into or amend any employment agreement.
(b) The Seller agrees to cooperate with the Purchaser throughout the
period prior to the Closing to meet with employees of the Business at such times
as shall be reasonably approved by a representative of the Seller, for purposes
of retaining such employees.
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(c) Except as provided in clauses (d) through (h) below, from the date
hereof until the Closing or the earlier termination of this Agreement, the
Seller will not, and will cause its officers, directors, employees and agents
not to, initiate contact with, solicit any inquiries from, request or invite
submission of any proposal or offer from, or provide any confidential
information to, or participate in any negotiations with, any third party in
connection with any possible proposal by such third party regarding a sale of
all or any substantial portion of the assets of the Business, provided that the
provisions of this paragraph shall not apply to any assets that would be
Excluded Assets.
(d) At any time prior to, but at no time subsequent to, the receipt of
the Seller's corporate approval in accordance with Sections 8.09 and 9.05, the
Seller may, subject to compliance with Section 10.04(e), (i) solicit, initiate
or encourage a Takeover Proposal of the sort referred to in Section 10.04(h)
that involves consideration to the Seller's shareholders with a value that the
Seller's Board of Directors reasonably believes, based on advice from the
Seller's independent outside financial advisor, is superior to the consideration
to the Seller provided for pursuant to this Agreement, and (ii) furnish
information with respect to the Seller 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 Superior Proposal.
(e) Neither the Board of Directors of Seller nor any committee thereof
shall (x) withdraw or modify, or propose to withdraw or modify any approval or
recommendation by such Board of Directors or such committee of this Agreement or
(y) approve or recommend, or propose to approve or recommend, any Takeover
Proposal except (i) in connection with a Superior Proposal (as defined in
Section 10.04(h)) and then only at or after the termination of this Agreement
pursuant to and in accordance with Section 13.02 or (ii) in connection with any
Takeover Proposal involving the acquisition of all or a portion of the common
stock of the Seller by an acquirer which agrees to vote in favor of this
Agreement.
(f) In addition to the obligations of the Company set forth in
paragraphs (d) and (e) of this Section 10.04, the Seller promptly shall advise
Purchaser 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 Purchaser with a true and complete
copy of such Takeover Proposal, if in writing. The Seller shall keep Purchaser
fully informed of the status and material details (including material amendments
or proposed amendments) of any such Takeover Proposal.
(g) Nothing contained in this Section 10.04 shall prohibit the Seller
from taking and disclosing to its shareholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act; provided, however, neither the
Seller nor its Board of Directors nor any committee thereof shall, except as
permitted by Section 10.04(e), withdraw or modify, or propose to withdraw or
modify, its position with respect to this Agreement or approve or recommend, or
propose to approve or recommend, a Takeover Proposal.
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(h) As used in this Agreement: "Superior Proposal" means a bona fide
written Takeover Proposal (x) to acquire, directly or indirectly, for
consideration consisting of cash and/or securities and/or the contribution or
combination of assets by merger or otherwise all or substantially all the assets
of the Company, (y) otherwise on terms which the Board of Directors of the
Seller decides in its good faith reasonable judgment to be more favorable to the
Seller's shareholders than the transactions provided for pursuant to this
Agreement (based on the advice with only customary qualifications, of the
Seller'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 transactions provided for pursuant to this Agreement), 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
Seller'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 Seller or the purchase
of all or substantially all of the assets of the Seller that include the
Purchased Assets.
Section 10.05 Further Assurances.
(a) Upon the terms and subject to the conditions hereof, the Seller,
and the Purchaser, agree to use reasonable commercial efforts to take or cause
to be taken all actions, and to do or cause to be done all things, necessary,
proper or advisable to ensure that the conditions set forth in Articles VIII and
IX are satisfied and to consummate and make effective the transactions
contemplated by this Agreement and the Related Documents, insofar as such
matters are within their respective control.
(b) Except as otherwise expressly provided for in this Agreement,
through the date which is 180 days after the Closing Date (i) each of the
Purchaser and the Seller shall, and shall cause each of their respective
Affiliates to, use reasonable commercial efforts to obtain at the earliest
practicable date, whether before or after the Closing Date, all consents
required to be obtained by it for the performance of the transactions
contemplated by this Agreement and the Related Documents, (ii) the Seller shall
use commercial reasonable efforts to obtain, whether before or after the Closing
Date, any amendments, novations, releases, waivers, consents or approvals with
respect to all outstanding Contracts of the Seller which are necessary either to
cure any material defaults thereunder existing immediately prior to the Closing
Date or for the consummation of the transactions contemplated by this Agreement
and the Related Documents, and (iii) each party hereto shall execute and deliver
such instruments, certificates and other documents and take such other actions
as any other party hereto may reasonably request in order to carry out this
Agreement or any of the Related Documents and the transactions contemplated
hereby and thereby; provided, however, that (A) in obtaining any such
amendments, novations, releases, waivers, consents or approvals, no party hereto
shall, or shall permit any of its Affiliates to, agree to any amendment of any
such instrument which imposes any obligation or liability on another party
without the prior written consent of such other party, and (B) except as
otherwise expressly provided by this Agreement, no party hereto shall be
obligated to execute any guarantees or undertakings or otherwise incur or assume
any expense or liability (other than for filing fees and similar costs
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required in connection with the purchase and sale of the Purchased Assets) in
obtaining any such release, novation, approval, consent, authorization or
waiver.
(c) The Purchaser, on the one hand, and the Seller, on the other hand,
shall provide such information and cooperate fully with each other party hereto
in making such applications, filings and other submissions which may be required
or reasonably necessary in order to obtain all approvals, consents,
authorizations and waivers as may be required from any Governmental Agency or
other third party in connection with the transactions contemplated by this
Agreement and the Related Documents and shall promptly use reasonable commercial
efforts to make each such application, filing or other submission, including
without limitation, any supplemental filing.
(d) If, prior to Closing, the Seller should become aware of events or
issues that would lead to the reasonable belief that the opinion set forth in
Section 8.10 may not be obtained by Seller, the Seller shall promptly advise the
Purchaser of such events or issues.
Section 10.06 Insurance and Benefits Contracts. The Seller shall use
reasonable commercial efforts to maintain all insurance policies and binders
relating to the Business in full force and effect at all times up to and
including the Closing Date and shall pay all premiums, deductibles and
retro-adjustment billings, if any, with respect thereto covering all periods,
and ensuring coverage of the Business, up to and including the Closing Date.
Section 10.07 Preparation of a Proxy Statement; Stockholder Meeting.
(a) As soon as practicable following the date of this Agreement the
Seller shall prepare and file with the SEC a Proxy Statement relating to the
vote described in Section 8.09. Prior to such filing, the Seller shall allow the
Purchaser to review the Proxy Statement. The Seller will use all reasonable
efforts to cause the Proxy Statement to be mailed to its stockholders as
promptly as practicable. None of the information included or incorporated by
reference in the Proxy Statement will at the time the Proxy Statement is first
mailed to the Seller's stockholders 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; provided that the Seller's
representation in this sentence does not extend to information, if any, supplied
by the Purchaser. The Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act. If at any time prior to the
Closing Date any information relating to the Seller, the Purchaser or any of
their respective Affiliates, officers or directors, should be discovered by the
Seller or the Purchaser which should be set forth in an amendment or supplement
to the Proxy Statement, so that such document would not include any misstatement
of a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, the party which discovers such information shall promptly notify
the other party hereto and an appropriate amendment or supplement describing
such information shall be promptly filed with the SEC and, to the extent
required by law, disseminated to the stockholders of the Seller.
(b) The Seller shall, as soon as practicable following the clearance of
the Proxy Statement by the SEC, duly call, give notice of, convene and hold a
meeting of its stockholders (the
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"Stockholders Meeting") for the purpose of obtaining the approval of its
stockholders of this Agreement and the transactions contemplated hereby and
shall, through its Board of Directors, once approved by its board of directors
and its special committee of independent directors, recommend to its
stockholders the approval and adoption of this Agreement and the transactions
contemplated hereby.
Section 10.08 Mail Received After Closing; Power of Attorney.
(a) Following the Closing, (i) the Purchaser may receive and open all
mail addressed or directed to the Seller at the offices of the Business, (ii) to
the extent that such mail and the contents thereof relate to the Purchased
Assets, the Business or to any of the Assumed Liabilities, the Purchaser may
deal with the contents thereof in its sole discretion and (iii) the Purchaser
shall promptly forward any other such mail to the Seller.
(b) On the Closing Date, the Seller shall furnish the Purchaser with a
Power of Attorney reasonably acceptable to the Purchaser to enable the Purchaser
to endorse any check or other instrument made payable to the Seller on account
of the Purchased Assets or take any other action consistent with this
transaction.
Section 10.09 Confidentiality; Publicity. Each party shall hold, and
shall use reasonable efforts to cause its employees and agents to hold, in
strict confidence all information concerning another party furnished to it by
such other party. Any release to the public of information with respect to the
matters contemplated by this Agreement (including without limitation any
termination of this Agreement) shall be made only in the form and manner
approved by the Purchaser and the Seller, provided that if a party is required
by law, regulations or rules or requests of any stock exchange to make any
disclosure concerning such matters, such party shall discuss in good faith with
the other party the form and content of such disclosure prior to its release.
Section 10.10 Transition Services. The parties shall negotiate in good
faith and execute and deliver on or prior to the Closing Date, a transitional
services agreement in form and substance reasonably satisfactory to Purchaser
and Seller.
Section 10.11 Access to Records After the Closing.
(a) The Seller and the Purchaser recognize that subsequent to the
Closing they may have information and documents which relate to the Business,
its employees, its properties, the Purchased Assets, the Excluded Assets, the
Retained Liabilities, the Excluded Liabilities and Taxes and to which the other
party may need access subsequent to the Closing. Each party shall provide the
other party access, during normal business hours on reasonable notice, to all
such information and documents, and to such of its employees, which such other
party reasonably requests. The Purchaser and the Seller agree that prior to the
destruction or disposition of any such documents or any books or records
pertaining to or containing such information at any time within five years (or,
in any matter involving Taxes, until the later of the expiration of all
applicable statutes of limitations (including extensions thereof) or the
conclusion of all litigation (including exhaustion of all appeals relating
thereto) with respect to such Taxes) after the Closing Date, each party shall
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provide not less than 30 calendar days prior written notice to the other of any
such proposed destruction or disposal. If the recipient of such notice desires
to obtain any such documents, it may do so by notifying the other party in
writing at any time prior to the scheduled date for such destruction or
disposal. Such notice must specify the documents which the requesting party
wishes to obtain. The parties shall then promptly arrange for the delivery of
such documents. All out-of-pocket costs associated with the delivery of the
requested documents shall be paid by the requesting party.
(b) With respect to audits conducted by federal, state and local taxing
authorities, Purchaser agrees to cooperate with Seller to the extent it has any
information required by Seller to respond to information document requests
presented by such taxing authorities as promptly as practicable. Such
information document requests may include, but shall not be limited to, all tax
matters related to Seller and Affiliates for all tax years currently open under
the relevant jurisdictions' statute of limitation.
Section 10.12 Title Commitments; Surveys.
(a) The Seller shall, not less than 30 days prior to the Closing Date,
deliver to the Purchaser a commitment of a title insurance company selected by
Seller and reasonably satisfactory to the Purchaser to issue an owner's policy
of title insurance on a standard American Land Title Association form covering
title to each parcel of real property owned by the Seller described in Section
4.07(b) in an amount reasonably satisfactory to the Purchaser naming the
Purchaser as the insured. The Seller agrees to pay the cost of such title
insurance commitments.
(b) As soon as reasonably practicable after the execution of this
Agreement, the Seller shall, at its expense, furnish to the Purchaser a current
on-the-ground staked "as-built" survey of the owned premises included in the
Purchased Assets made in accordance with the "Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys" jointly established by ALTA and
ACSM in 1992 and meeting the accuracy requirements of an Urban Class Survey, as
defined therein, including Items 1-44, 6-11 and 13 on Table A contained therein
(the "Survey") prepared by a registered land surveyor licensed in the state
where such premise is located (the "Surveyor"), and which survey shall otherwise
be acceptable to the Purchaser, in its reasonable discretion, and the title
company for deletion of the exceptions pertaining to areas and boundaries. The
Survey (including specifically the certificate of the Surveyor forming a part
thereof) shall be in form and substance acceptable to the Purchaser, in its
reasonable discretion, and to the title insurance company and shall locate all
existing improvements, easements and rights-of-way (which shall show recording
data, if applicable), encroachments, conflicts and protrusions affecting such
premises, water, sewer, gas and electric lines, telephone and television cable
lines and the size and capacity thereof, parking spaces and the size of each,
shall set forth the outside perimeter of the premises, shall contain a metes and
bounds description of the premises and shall set forth the acres included within
the premises. The Survey shall contain a statement on the face thereof
certifying as to the Zone Designation by the Secretary of Housing and Urban
Development with reference to the appropriate Flood Insurance Rate Map Number
(which Flood Insurance Rate Map Number shall be the current Flood Insurance Rate
Map for the community in which the premises is located). In the event the Survey
shows any easement, right-of-way, encroachment, conflict or protrusion affecting
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the premises that is unacceptable to the Purchaser, in its reasonable
discretion, the Purchaser shall within 20 days after receipt of such Survey, the
title commitment and a legible copy of each exception document, notify the
Seller in writing of such fact. The Seller shall then promptly undertake to
eliminate or modify such unacceptable matters to the satisfaction of the
Purchaser, as determined in its reasonable discretion. In the event the Seller
is unable to do so prior to the Closing, the Purchaser may either decline to
acquire such premises or accept such title to the premises as the Seller can
deliver and receive a credit against the purchase price in an amount reasonably
acceptable to the Purchaser.
Section 10.13 Agreement Not to Compete; Non-Solicitation.
(a) The Seller agrees that during the period ending on the fifth
anniversary of the Closing Date, neither the Seller nor any other entity of
which the Seller owns, directly or indirectly, 51% or more of the voting stock
or other similar equity interests (collectively, the "Seller's Affiliates"),
will engage in the business of originating, selling or servicing residential
mortgage loans in the United States (the "mortgage business")provided, however,
that the business conducted by the Acquired Affiliates and Foreign Operations
may continue.
(b) The Seller agrees that (i) from the date of this Agreement to the
Closing Date, it will not solicit any customers of the Business or use or
provide any of its Affiliates any list of customers, suppliers, brokers,
correspondents or other business contacts of the Business maintained by the
Seller for any purpose except to promote the Business, and from and after the
date of this Agreement it will not allow any unaffiliated party to use such
lists or information for any purpose, (ii) from and after the Closing Date,
Seller will not solicit any person who became a customer of the Seller or any of
its Affiliates in connection with the Business or use any list of customers,
suppliers, brokers, correspondents or other business contacts maintained by the
Seller or any of its Affiliates in connection with the Business and (iii) from
the date of this Agreement until the third anniversary of the Closing Date,
Affiliates of the Seller not engaged in the Business will not, and from the
Closing Date until the third anniversary of the Closing Date, the Seller will
not, solicit for employment or employ any employee of the Business, other than
any such employee who will not be or has not been offered post-closing
employment pursuant to Section 6.01 or whose employment with the Seller or the
Purchaser has otherwise been terminated, whether voluntarily or involuntarily;
provided that this provision shall not be violated by any general solicitation
or advertising not directed at any such employee or group of employees.
(c) Purchaser shall not intentionally solicit any Mortgagors for the
purpose of refinancing such Mortgagor's Mortgage Loan. The preceding sentence is
not intended to prohibit the Purchaser from soliciting such Mortgagors through
direct mail lists, telemarketing lists or similar lists already in use by
Purchaser or acquired by Purchaser after the Closing Date or through any mass
marketing media.
Section 10.14. Qualifying Loans. The Purchaser understands that between
the date hereof and the Closing Date the Seller will be originating mortgage
loans with respect to which the Seller agrees to use reasonable commercial
efforts to comply with the underwriting standards of the Purchaser. On or prior
to the Closing Date, the Purchaser, in its sole and absolute discretion, may
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determine to purchase such loans at a purchase price to be agreed upon by the
parties. Any purchase of loans pursuant to this Section 10.14 shall be subject
to such other terms and conditions as the Purchaser and Seller mutually agree to
be contained in a purchase agreement to be negotiated by the parties.
Section 10.15 Updated Mortgage Loan Schedule. Within five Business Days
after the Closing Date, the Seller shall deliver to the Purchaser an updated
copy of the Mortgage Loan Schedule as of the Closing Date. The information set
forth in such updated Mortgage Loan Schedule shall be complete, true and correct
in all material respects as of its date.
Section 10.16 Additional Agreements. Seller and Purchaser shall prepare
and execute all forms, documents and other information reasonably requested by
the Purchaser, any investor, rating agency or trustee or any other applicable
entities in connection with the transfer of the Servicing Rights or Purchased
Assets.
Section 10.17 No Financing Obligation. The Seller acknowledges and
agrees that none of this Agreement, any Related Documents or any transactions
contemplated hereby or thereby create any obligation on the part of the
Purchaser or any of its Affiliates to provide to the Seller or any of its
Affiliates any form of financing.
Section 10.18 Updated Disclosure Schedule. In the event that any
information required to be disclosed on any section of the Disclosure Schedule
changes or becomes incorrect prior to Closing, Seller shall promptly supplement
or amend the relevant section of the Disclosure Schedule by notice to Purchaser
in accordance with Section 14.03 hereof. No such supplement or amendment to
Disclosure Schedule shall be deemed to be a cure of any breach of any
representation, warranty or covenant of the Seller contained in this Agreement
or any Related Document or a waiver of any condition set forth in Article VIII.
ARTICLE XI
Tax Matters
Section 11.01 Allocation of Responsibility.
(a) The Seller and it Affiliates shall pay or cause to be paid to the
relevant Governmental Agency all Taxes with respect to pre-Closing Date
activities, including any Taxes for which the Seller or any of its Affiliates
may be held liable as a member of the Sellers' consolidated group pursuant to
section 1.1502-6(a) of the Treasury Regulations or as a member of any combined,
consolidated or unitary group of which the Seller, any of its Affiliates is or
was a member pursuant to any similar provision of any state, local or foreign
law with respect to Taxes.
(b) All Taxes based on the ownership of property (other than any sales,
use, transfer, income or franchise Taxes) imposed with respect to the Purchased
Assets for a tax or assessment
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period that included the Closing Date shall be apportioned between the Seller
and Purchaser with the Seller bearing the portion of such taxes based on the
number of days in the tax or assessment period prior to the Closing Date and the
Purchaser bearing a portion of such Taxes based on the number of days in the tax
or assessment period on or after the Closing Date.
(c) Seller shall pay all sales, use, transfer, real property transfer,
recording, gains, stock transfer and other similar taxes and fees ("Transfer
Taxes") arising out of or in connection with the transactions effected pursuant
to this agreement, and shall indemnify, defend, and hold harmless the Purchaser
(and its Affiliates) against Transfer Taxes in excess of such amount. Seller
shall file all necessary documentation and Tax Returns with respect to such
Transfer Taxes, and Purchaser shall cooperate with Seller with respect to such
filings.
(d) After the Closing Date, Seller and Affiliates shall have the sole
responsibility for preparing and filing any Tax Returns required to be filed
relating to Taxes with respect to pre-Closing Date activities and any related
Taxes due will be paid by Seller and its Affiliates.
(e) Seller agrees to make Tax records and other reasonable information
and resources available to allow Purchaser to accurately complete its Tax
Returns that are due on or after the Closing Date, including, without
limitation, resources required to prepare federal and state information returns.
Section 11.02 Allocation of Purchase Price. Purchaser shall provide
Seller an initial allocation of the Purchase Price (as set forth in Section
3.01) for Tax purposes not later than 180 days following the Closing Date.
Seller will have 45 days from receipt of Purchaser's initial allocation of the
Purchase Price to object to any allocation set forth therein. Thereafter, the
parties shall negotiate in good faith to agree on a final form of the Purchase
Price allocation. If Seller does not object within 45 days following receipt of
Purchaser's initial allocation, such allocation shall become the final form of
the Purchase Price allocation. Purchaser and Seller shall use the allocations
contained in the final form of the Purchase Price allocation in preparing all
returns or material reports or forms required to be filed with a governmental
authority with respect to any Tax. If the Purchaser and Seller cannot agree on
the final form of the Purchase Price allocation within 30 days following an
objection by Seller to the initial allocation of the Purchase Price, neither
Buyer nor Seller shall remain under any obligation to agree on the Purchase
Price allocation or to report such allocation in a consistent manner with the
other party.
Section 11.03 Designation Agreement. Purchaser shall prepare, file and
distribute all federal and state information returns for all amounts paid in
connection with the Purchased Assets in 1999, provided that the Seller shall, on
or before December 31, 1999, furnish to Purchaser correct information respecting
all such payments. For this purpose, Purchaser is the designee of the Seller,
within the meaning of Treasury Regulation Section 1.6050H-2(d), for all amounts
paid to Seller during 1999 with respect to the Purchased Assets. Seller shall
remain liable for any information return penalties that result from errors in
the information that is provided to Purchaser by Seller.
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ARTICLE XII
Survival and Indemnification
Section 12.01 Survival. The representations and warranties in Article
IV and Article V hereof shall survive the Closing but shall terminate and be of
no further force and effect on the anniversary of the Closing Date falling in
the 30th month after Closing. Unless a specific period is set forth in this
Agreement (in which event such specified period shall control), all other
covenants and agreements contained in this Agreement shall survive the Closing
and remain in effect indefinitely.
Section 12.02 Indemnification by the Seller. On the terms and subject
to the limitations set forth herein, the Seller shall indemnify, defend and hold
harmless the Purchaser, each of its Affiliates and each of their respective
past, present and future directors, officers, agents and representatives
(together, the "Purchaser Indemnitees") from and against any and all
liabilities, obligations, claims, suits, damages, civil and criminal penalties
and fines, out-of-pocket costs and expenses, including without limitation any
reasonable and necessary attorney's and other professional fees, after deducting
any insurance proceeds received by the Purchaser Indemnitees in connection
therewith ("Purchaser Indemnifiable Losses"), relating to, resulting from or
arising out of the following:
(a) any breach of any representation, warranty, covenant or undertaking
by the Seller contained in this Agreement or any Related Document;
(b) any Retained Liabilities or any matters related to the Excluded
Assets;
(c) any claim by any Employee based on or arising out of matters
occurring before the Closing Date or any other claim of an employee under
Seller's Employee Benefit Plans;
(d) any Pre-Closing Servicing Obligations; or
(e) any claim of any Person related to the failure of the Seller to
comply with the provisions of the "bulk sales" or similar laws of any applicable
jurisdiction other than in respect of Assumed Liabilities and all bulk sales tax
provisions in all states.
The items described in clauses (a) through (e) of this Section 12.02
are collectively referred to herein as "Purchaser Claims".
Section 12.03 Indemnification by the Purchaser. On the terms set forth
herein, the Purchaser shall indemnify, defend and hold harmless the Seller, each
of its Affiliates, and each of their respective past, present and future
directors, officers, agents and representatives (together, the "Seller
Indemnitees"), from and against any and all liabilities, obligations, claims,
suits, damages, civil and criminal penalties and fines, out-of-pocket costs and
expenses, including without limitation any reasonable and necessary attorney's
and other professional fees, after deducting any insurance proceeds received by
the Seller Indemnitees in connection therewith ("Seller
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Indemnifiable Losses") relating to, resulting from or arising out of any of the
following:
(a) any breach of any representation, warranty, covenant or undertaking
of the Purchaser contained in this Agreement, the Assumption Agreement or any
Related Document;
(b) any Assumed Liabilities;
(c) any matters related to the Purchased Assets based on or arising out
of matters occurring on or after the Closing Date; and
(d) any claim by any Employee based on or arising out of matters
occurring on or after the Closing Date relating to Purchaser's Employee Benefit
Plans.
The items described in clauses (a) through (d) of this Section 12.03
are collectively referred to herein as "Seller Claims".
Section 12.04 Procedures for Making Claims Against Indemnifying Party.
(a) From time to time on or before the expiration, if any, of the
applicable indemnification obligation, in the case of Section 12.02 or Section
12.03, the Purchaser Indemnitee or the Seller Indemnitee, as the case may be (a
"claimant"), may give notice to the Seller or the Purchaser, as the case may be,
specifying in reasonable detail the nature and dollar amount of any claim under
Section 12.02 or Section 12.03 of this Agreement (each a "claim"); a claimant
may make more than one claim (including any supplements thereto) with respect to
any underlying state of facts. If the Seller or Purchaser, as the case may be,
gives notice disputing any claim (a "counter notice") within 30 days following
receipt of the notice regarding such claim, such claim shall be resolved as
provided in Section 12.04(b). If no counter notice is received by the claimant
within such 30-day period, then the dollar amount of the claim as set forth in
the original notice shall be deemed established for purposes of this Agreement
and, at the end of such 30-day period, in the case of a claim under Section
12.02 or Section 12.03, the Indemnifying Party shall make a payment to the
Indemnified Party in the dollar amount claimed in the notice. Any claim pending
at the expiration of the indemnification period under Section 12.01 shall
survive until such claim has been resolved and the Indemnifying Party has made
any required payments to the Indemnified Party.
(b) If the counter notice as described in Section 12.04(a) is timely
received with respect to a claim, the parties shall attempt in good faith to
agree on resolution of the disputed amount. The Indemnifying Party shall pay to
Indemnified Party all non-disputed amounts in accordance with the time period
specified in Section 12.04(a). Any amount mutually agreed upon or awarded to the
Indemnified Party under a final and non-appealable Judgment of a court of
competent jurisdiction shall be paid by the Indemnifying Party within five
Business Days following agreement or Judgment, as applicable. If the parties'
agreement or the Judgment determines that a deduction of monies from the
Contingent Purchase Price under Section 3.01(b) was not appropriate, the
Purchaser shall reverse such deduction or if the time for maintaining the
Contingent Purchase Price has expired under Section 3.01(b), pay those monies
directly to Seller within five Business Days after such determination.
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Section 12.05 Defense of Claims.
(a) If an Indemnified Party shall receive written notice of the
assertion of any third party claim with respect to which an Indemnifying Party
is obligated under this Agreement to provide indemnification, such Indemnified
Party shall give the Indemnifying Party prompt notice thereof; provided,
however, that the failure of any Indemnified Party to give such notice shall not
relieve any Indemnifying Party of its obligations under this Article XII, except
to the extent that such Indemnifying Party is actually prejudiced by such
failure to give notice. Such notice shall describe the claim in reasonable
detail, and, if practicable, shall indicate the estimated amount of the
Indemnifiable Loss that has been or may be sustained by such Indemnified Party.
(b) An Indemnifying Party, at such Indemnifying Party's own expense and
through counsel chosen by such Indemnifying Party (which counsel shall be
reasonably satisfactory to the Indemnified Party), may elect to defend any third
party claim; and if it so elects, it shall, within 20 Business Days after
receiving notice of such third party claim (or sooner, if the nature of such
third party claim so requires), notify the Indemnified Party of its intent to do
so, and such Indemnified Party shall cooperate in the defense of such third
party claim. Such Indemnifying Party shall pay such Indemnified Party's
reasonable out-of-pocket expenses incurred in connection with such cooperation.
After notice from an Indemnifying Party to an Indemnified Party of its election
to assume the defense of a third party claim, such Indemnifying Party shall not
be liable to such Indemnified Party under this Article XII for any legal or
other expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof; provided, however, that such Indemnified Party shall
have the right to employ one counsel to represent such Indemnified Party and all
other persons entitled to indemnification in respect of such claim hereunder
(which counsel shall be reasonably acceptable to the Indemnifying Party) if, in
such Indemnified Party's reasonable judgment, either a conflict of interest
between such Indemnified Party and such Indemnifying Party exists in respect of
such claim or there may be defenses available to such Indemnified Party which
are different from or in addition to those available to such Indemnifying Party,
and in that event (i) the reasonable fees and expenses of such separate counsel
shall be paid by such Indemnifying Party and (ii) each of such Indemnifying
Party and such Indemnified Party shall have the right to direct its own defense
in respect of such claim. If any Indemnifying Party elects not to defend against
a third party claim, or fails to notify an Indemnified Party of its election
within a reasonable period of time, such Indemnified Party may defend,
compromise and settle such third party claim; provided, however, that no such
Indemnified Party may, without the prior written consent of the Indemnifying
Party (which consent shall not be unreasonably withheld), settle or compromise
any third party claim or consent to the entry of any Judgment which does not
include as an unconditional term thereof the delivery by such third party to the
Indemnifying Party of a written release from all liability in respect of such
third party claim. The Indemnifying Party may defend, compromise and settle any
third party claim on such terms as it deems appropriate, provided, however, that
no Indemnifying Party may, without the prior written consent of the Indemnified
Party (which consent shall not be unreasonably withheld), settle or compromise
any third party claim or consent to the entry of any Judgment which does not
include as an unconditional term thereof the delivery by such third party to the
Indemnified Party of a written release from all liability in respect of such
third party claim. If any Indemnifying Party elects to defend against a
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third party claim, no Indemnified Party shall settle or compromise on such claim
or consent to the entry of a judgment without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld.
Section 12.06 Remedies Exclusive. The remedies provided to the parties
in this Article XII for the matters set forth in this Article XII shall be
exclusive and shall preclude assertion by them of all other rights and the
seeking of all other remedies for such matters against any other party hereto;
provided that any party hereto shall not be precluded from (i) seeking specific
performance or any other available remedy for a breach of a covenant or
agreement contained in this Agreement or in any Related Document, (ii) seeking
any other remedy explicitly provided by any other provision of this Agreement or
a Related Document or (iii) pursuing remedies under applicable law for fraud or
willful misconduct.
Section 12.07 Limitation of Seller's Obligations to Indemnify.
(a) Notwithstanding the other provisions of this Article XII, Seller
shall have liability to Purchaser with respect to breaches of representations
and warranties only if and to the extent that the sum of Purchaser's
Indemnification Losses related to such breaches exceed $1,000,000 in the
aggregate.
(b) Notwithstanding the other provisions of this Article XII, the
Seller's aggregate liability pursuant to this Article XII for breaches of
representations and warranties shall be limited to an amount equal to
$50,000,000.
ARTICLE XIII
Termination
Section 13.01 Termination. This Agreement may be terminated at any time
(including before or after the Seller receives stockholder approval) prior to
the Closing:
(a) by mutual consent of the parties hereto;
(b) upon written notice by any party hereto, if (i) a court or
Governmental Agency shall have issued a Judgment or taken any other action
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and (ii) such Judgment or other action shall have become final
and nonappealable;
(c) upon written notice at any time on or after, October 15, 1999 by
the Purchaser or the Seller, if the Closing has not occurred by such date,
provided that the failure to close is not the result of a material breach of
this Agreement by the terminating party;
(d) upon written notice by the Purchaser or Seller if the approval of
the directors or stockholders of Seller as contemplated by Sections 8.09 and
9.05 hereof shall have not been
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obtained at meetings duly convened therefor or at any adjournment or
postponement thereof;
(e) by the Purchaser if there shall be any Material Adverse Change in
the Business or the Purchased Assets or in the condition, financial or
otherwise, of the Seller;
(f) by the Purchaser if the conditions set forth in Section 8.09(c)(ii)
shall not have been met by July 31, 1999;
(g) by the Seller if the condition set forth in Section 8.11 with
respect to the Purchaser shall not have been met by July 31, 1999; or
(h) by the Purchaser if the Seller should advise the Purchaser that
Seller has become aware of events or issues that would lead to the reasonable
belief that the opinion set forth in Section 8.10 may not be obtained by Seller.
Section 13.02 Fiduciary Termination. This Agreement may be terminated
at any time prior to the Closing, before or after the adoption and approval of
this Agreement by the shareholders of the Seller referred to in Sections 8.09
and 9.05, if the Board of Directors of the Seller has withdrawn, or modified or
changed in a manner adverse to Purchaser its approval or recommendation of this
Agreement in order to approve and permit the Seller to execute a definitive
agreement relating to a Superior Proposal; provided, however, that prior to any
such withdrawal, modification, change or termination, the Seller shall, and
shall cause its respective financial and legal advisors to, negotiate in good
faith with the Purchaser to make such adjustments in the terms and conditions of
this Agreement as would enable the Seller to proceed with the transactions
contemplated herein on such adjusted terms. In the event of termination
hereunder, the Seller shall immediately pay the Purchaser $10,000,000.00.
Section 13.03 Obligations Shall Cease. In the event that this Agreement
shall be terminated pursuant to Section 13.01 or 13.02 hereof, all obligations
of the parties hereto under this Agreement shall terminate and there shall be no
liability of any party hereto to any other party except (a) for the obligations
with respect to confidentiality and publicity contained in Section 10.09 hereof
and (b) as set forth in Section 13.02 and 13.04; provided that nothing contained
in this Section shall relieve any party of liability for its bad faith or
willful violation of the provisions of this Agreement.
Section 13.04 Fees and Expenses. Except as otherwise specifically
provided herein, each party hereto shall pay all of the fees and expenses
incurred by it in connection herewith.
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ARTICLE XIV
Miscellaneous
Section 14.01 Complete Agreement. This Agreement, and the Related
Documents, and the exhibits and schedules attached hereto and thereto and the
documents referred to herein and therein shall constitute the entire agreement
between the parties hereto with respect to the subject matter hereof and thereof
and shall supersede all previous negotiations, commitments and writings with
respect to such subject matter.
Section 14.02 Waiver, Discharge, etc. This Agreement may not be
released, discharged, abandoned, waived, changed or modified in any manner,
except by an instrument in writing signed on behalf of each of the parties
hereto by their duly authorized representatives. The failure of any party hereto
to enforce at any time any of the provisions of this Agreement shall in no way
be construed to be a waiver of any such provision, nor in any way be construed
to affect the validity of this Agreement or any part thereof or the right of any
party thereafter to enforce each and every such provision. No waiver of any
breach of this Agreement shall be held to be a waiver of any other or subsequent
breach. If any provision of this Agreement shall be declared by any court of
competent jurisdiction to be illegal or unenforceable, the other provisions
shall not be affected, but shall remain in full force and effect.
Section 14.03 Notices. All notices, requests and demands to or upon the
respective parties hereto shall be in writing, including by telecopy, and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made (a) if delivered by hand (including by courier), when delivered,
(b) in the case of mail, three Business Days after deposit in United States
first class mail, postage prepaid and (c) in the case of telecopy notice, when
receipt has been confirmed by the transmitting telecopy operator. In each case
notice shall be sent to the address of the party to be notified, as follows, or
to such other address, telecopy number or person's attention as may be hereafter
designated by the respective parties hereto in accordance with these notice
provisions:
If to the Purchaser, to:
CitiFinancial Mortgage Company
300 St. Paul Place
Baltimore, MD 21202
Telecopy: (410) 332-3319
Attention: Raymond L. Fischer, Jr.
With a copy to:
Citigroup Inc.
Corporate Legal Department
425 Park Avenue - 2nd Floor
New York, New York 10043
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Telecopy: (212) 793-4401
Attention: Stephen Dietz
CitiFinancial Mortgage Company
Office of General Counsel
300 St. Paul Place
Baltimore, Maryland 21202
Telecopy: (410) 332-3734
Attention: Martin J. Wong
If to the Seller or Parent, to:
IMC Mortgage Company
5901 East Fowler Avenue
Tampa, Florida 336197-2522
Telecopy: (813) 984-2593
Attention: George Nicholas
With a copy to:
Mitchell Legler, P.A.
300A Wharfside Way
Jacksonville, Florida 32207
Telecopy: (904) 346-3299
Attention: Mitchell Legler
With a copy to:
Kramer Levin Naftalis & Frankel, LLP
919 Third Avenue
New York, New York 10022-3903
Telecopy: (212) 715-8000
Attention: Peter S. Kolevzon
Section 14.04 Governing Law; Waiver of Jury Trial.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to conflict of law
principles.
(b) Each party waives, to the fullest extent permitted by applicable
Law, any right it may have to a trial by jury in respect of any action, suit or
proceeding arising out of or relating to this Agreement or any Related Document.
-43-
<PAGE>
Section 14.05 Headings. The descriptive headings of the several
Articles and Sections of this agreement are inserted for convenience only and do
not constitute a part of this Agreement.
Section 14.06 Successors. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto except with the prior written consent of the other parties
or by operation of law, provided that without such consent, the Purchaser may
assign its rights and obligations hereunder to Citigroup Inc. or any of
Citigroup Inc.'s direct or indirect wholly owned subsidiaries, in which event
such assignee shall be substituted for the assignor for purposes of this
Agreement to the extent appropriate, but without affecting any liability of the
assignor hereunder.
Section 14.07 Third Parties. Except as specifically set forth or
referred to herein (including, without limitation, in Article XII), nothing
herein expressed or implied is intended or shall be construed to confer upon or
give any person or entity, other than the parties hereto and their successors
and permitted assigns, any rights or remedies under or by reason of this
Agreement.
Section 14.08 Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same instrument
and each of which shall be deemed an original.
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized representatives as of the day
and year first above written.
IMC MORTGAGE COMPANY,
as Seller
By:/s/
-------------------------------
Name:
Title:
CITIFINANCIAL MORTGAGE COMPANY
as Purchaser
By:/s/
-------------------------------
Name:
Title:
NOTE PURCHASE AND AMENDMENT AGREEMENT NO. 2
Note Purchase and Amendment Agreement No. 2 (this
"Agreement"), dated as of June 18, 1999, among IMC MORTGAGE COMPANY, a Delaware
corporation (the "Borrower"), GREENWICH STREET CAPITAL PARTNERS, L.P., a
Delaware limited partnership ("GSCP"), GREENWICH FUND, L.P., a Delaware limited
partnership ("Greenwich Fund"), GSCP OFFSHORE FUND, L.P., a Cayman Islands
exempted limited partnership ("Offshore" and, together with GSCP and Greenwich
Fund, the "Lenders"), GREENWICH STREET EMPLOYEES FUND, L.P., a Delaware limited
partnership ("GSEF"), TRV EXECUTIVE FUND, L.P., a Delaware limited partnership
(together with GSEF, the "New GSCP Funds", and, collectively, with the Lenders,
the "GSCP Funds"), GSCP, as Collateral Agent (the "Collateral Agent"), and each
of the subsidiaries of the Borrower signatory hereto, amending each of (i) the
Borrower Security Agreement (the "Borrower Security Agreement"), dated as of
October 12, 1998, among the Borrower, the Lenders and 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, as each such agreement has been heretofore amended by Amendment
Agreement No. 1, dated as of February 11, 1999 ("Amendment Agreement No. 1") and
Amendment No. 2, dated as of April 19, 1999 ("Amendment Agreement No. 2"),
Amendment Agreement No. 3, dated as of May 20, 1999 and the Note Purchase and
Amendment Agreement, dated as of May 18, 1999 (the "Note Purchase and Amendment
Agreement"), thereto, the "Subject Agreements"), among the Borrower, the Lenders
and the Collateral Agent.
RECITALS
A. The Borrower has entered into a Loan Agreement, dated as of
October 12, 1998 (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 entered into each of the Subject
Agreements to which they are party.
<PAGE>
C. The Lenders and the Borrower have also entered into (i)
Amendment No.1 (the "Amendment") to the Initial Loan Agreement, dated as of
February 11, 1999, providing for the Lenders to extend to the Borrower
additional commitments to loan in the aggregate an additional $5,000,000 (the
"Interim Loans"), and, together with the Subsidiary Guarantors, (ii) Amendment
Agreement No. 1, amending each of the Subject Agreements in connection with the
Amendment.
D. The Borrower, the Lenders, Greenwich Street Employees Fund,
L.P. ("GSEF"), and TRV Executive Fund, L.P. (together with GSEF, the "New GSCP
Funds", and, collectively with the Lenders, the "GSCP Funds") have entered into
an Acquisition Agreement, dated as of February 19, 1999 (the "Acquisition
Agreement"), pursuant to which the Borrower will issue and deliver to the GSCP
Funds common stock representing approximately 93.5% of the common stock of the
Borrower outstanding after such issuance and the New GSCP Funds have succeeded
by assignment to interests of the Lenders in the Initial Loans and the Interim
Loans.
E. At the Borrower's request, the GSCP Funds have made certain
additional loans to the Borrower to fund monthly servicing advances in respect
of its securitizations pursuant to Amendment Agreement No. 2, and certain
secured promissory notes, dated April 19, 1999, in the aggregate amount of
$14,959,676 and pursuant to the Note Purchase and Amendment Agreement in the
aggregate amount of $33,000,000, which the Borrower has repaid in the ordinary
course and in accordance with the terms of such agreements and promissory notes.
F. At the Borrower's request, the GSCP Funds are willing to
provide on the date hereof additional loans to the Borrower in the aggregate
amount of $36,000,000 (the "June Interim Loans"), which June Interim Loans are
to be evidenced by secured promissory notes of the Borrower in the form attached
hereto as Exhibit A (the "June Interim Notes") and are to be entitled to the
benefit of the guarantees and security provided under the Subject Documents.
G. Pursuant to the Borrower Security Agreement and the
Subsidiary Security Agreement, Borrower and the Subsidiary Grantors have granted
the Collateral Agent a continuing perfected security interest in, and a lien
upon, all of the Collateral (as defined therein), including all of the
Borrower's and such Subsidiary Grantors' rights to payment of money arising out
of, relating to, or created in connection with all Securitization Receivables,
any other interests of the Borrower or such Subsidiary Grantors in the
Securitization Transactions (with certain exceptions), all Servicing Fees,
Servicing Rights, Servicing Advances (as such capitalized terms are defined in
such agreements) and all cash from time to time deposited in any deposit account
of any of the Company or any Subsidiary Grantor with the Lenders in connection
with such agreements.
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H. All collections in respect of Securitization Transactions
are paid to National City Bank as the Designated Depository Institution (within
the meaning of the various Pooling and Servicing Agreements governing the
Securitization Transactions) (the "Securitization Bank") for deposit to various
principal and interest or other accounts (collectively "Securitization
Accounts") established at the Securitization Bank in respect of the
Securitization Transactions. The Borrower is authorized under Pooling and
Servicing Agreements with the Trustee for such Securitization Transactions to
withdraw funds from time to time from the Securitization Accounts in payment of
Servicing Fees and in repayment of Servicing Advances made by the Borrower as
servicer in respect of such Securitization Transactions.
I. On the date hereof, the Borrower is entering into a letter
agreement (together with any subsequent letter agreement from a Securitization
Bank pursuant to Section 2 below, a "Payment Blockage Letter") with the
Securitization Bank pursuant to which the Securitization Bank acknowledges the
GSCP Funds' perfected security interest in and lien upon the Collateral,
including the right to payment of money arising out of, relating to or created
in connection with all Securitization Transactions, including all Servicing
Fees, Servicing Rights and Servicing Advances, and agrees not to honor any
withdrawal or payment requests by Borrower or any Subsidiary Grantor from such
Securitization Accounts (other than payments to or for the benefit of the
beneficiaries of such Securitizations) without written confirmation from the
Collateral Agent.
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the Borrower, the Subsidiary Guarantors, the Subsidiary Grantors,
the Collateral Agent, and the GSCP Funds hereby agree as follows:
1. Repayment of June Interim Loans. So long as any amounts are
outstanding under the June Interim Notes, the Borrower (i) shall provide the
Collateral Agent with written notice each Business Day of amounts becoming
available in any Securitization Account to be withdrawn or received by the
Borrower or any Subsidiary Grantor in respect of any Securitization Transaction,
including in respect of any Servicing Advances, Servicing Fees and Servicing
Rights ("Available Funds"), (ii) shall cause such Available Funds immediately
upon becoming available for withdrawal, to be wire transferred to an account or
accounts of such bank or banks as may be specified by the Collateral Agent for
application to repayment of amounts owed by the Borrower to the GSCP Funds in
respect of the June interim loans, and (iii) shall, in the event any such
Available Funds are, notwithstanding the provisions of the foregoing clause
(ii), withdrawn or received by the Borrower or any Subsidiary Grantor, cause
such funds to be held by the Borrower or such Subsidiary Grantor, as the case
may be, in trust for the benefit of GSCP Funds, separate and apart from, and not
commingled with, its general funds and applied solely as provided in the
foregoing clause (ii).
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<PAGE>
2. Notice of Change in Securitization Bank or Securitization
Accounts; Payment Blockage Letter, etc. The Borrower represents and warrants to
the GSCP Funds (i) that National City Bank serves as the Designated Depository
Institution (as defined in the various Pooling and Servicing Agreements with
respect to each Securitization Transaction) with respect to the Securitization
Accounts established by the Borrower pursuant to each Securitization
Transaction, (ii) that the accounts listed in Annex A hereto are the only
Securitization Accounts established in respect of the Securitization
Transactions and (iii) that no consent or approval is required to be obtained
from the Trustee or Certificate Insurer in respect of any Securitization
Transaction or any other person in connection with the entry into the Payment
Blockage Letter. The Borrower shall, prior to establishing any new
Securitization Account or designating any depository institution to serve as a
Securitization Bank at which any Securitization Account is to be established,
(i) notify the GSCP Funds of such proposed change and (ii) obtain a letter
agreement from the Securitization Bank or with respect to the new Securitization
Account pursuant to which the Securitization Bank acknowledges the GSCP Funds'
perfected security interest in and lien upon the Collateral, including the right
to payment of money arising out of, or relating to or created in connection
with, all Securitization Transactions, including all Servicing Fees, Servicing
Rights and Servicing Advances, and agrees not to honor any withdrawal or payment
requests by Borrower or any Subsidiary Grantor from such Securitization Account
(other than payments to specified permitted payees to or for the beneficiaries
of such Securitizations) without written confirmation from the Collateral Agent,
which letter agreement shall be satisfactory to the Collateral Agent in
substance and form. In the event it is determined that any consent is required
from the Trustee or Certificate Insurer or any other person in connection with
the entrance by the Securitization Bank into any Payment Blockage Letter, the
Borrower and each Subsidiary Grantor shall use its best efforts to obtain any
such required consent.
3. Commitment Fee. In connection with the June Interim Loans,
the Borrower shall pay to the GSCP Funds on the date of such borrowing a
commitment fee equal to $1,000,000 and hereby directs the GSCP Funds to apply
that portion of the borrowings to payment of the fee.
4. Amendment to Borrower Security Agreement. Section 1 of the
Borrower Security Agreement is hereby amended by deleting therefrom the defined
term "Secured Obligations" and replacing it in its entirety with the following:
"Secured Obligations" means (i) the full and prompt
payment of the Reimbursement Obligations, the principal of and premium
(including, without limitation, Take-Out Premium) and interest on the
Loans and the loans evidenced by the New Interim Notes, the May Interim
Notes and the June Interim Notes (including, without limitation,
interest accruing after the date of any filing by the Company of any
petition in bankruptcy or the commencement of any bankruptcy,
4
<PAGE>
insolvency or similar proceeding with respect to the Company), as and
when the same becomes due and payable in accordance with the terms of
the Loan Agreement, such New Interim Notes, May Interim Notes or June
Interim Notes, as the case may be, (ii) the payment of all other
indebtedness and other amounts payable by the Company under the
Reimbursement Agreement, the Loan Agreement, the Notes, the New Interim
Notes, the May Interim Notes, the June Interim Notes, this Agreement
(including, without limitation, amounts due under Sections 10, 13 and
15 of this Agreement), and the other Loan Documents (including, without
limitation, interest accruing after the date of any filing by the
Company of any petition in bankruptcy or the commencement of any
bankruptcy, insolvency or similar proceeding with respect to the
Company), (iii) the due and punctual performance by the Company of and
compliance by the Company with all its obligations under the
Reimbursement Agreement, the Loan Agreement, the Notes, the New Interim
Notes, the May Interim Notes, the June Interim Notes, this Agreement
and all other Loan Documents, and (iv) any renewals or extensions of
any of the foregoing.
5. Amendment to Subsidiary Security Agreement. Section 1 of
the Subsidiary Security Agreement is hereby amended by deleting therefrom the
defined term "Secured Obligations" and replacing it in its entirety with the
following:
"Secured Obligations" means (i) the full and prompt
payment of the Reimbursement Obligations, the principal of and premium
(including, without limitation, Take-Out Premium) and interest on the
Loans and the loans evidenced by the New Interim Notes, the May Interim
Notes and the June Interim Notes (including, without limitation,
interest accruing after the date of any filing by the Borrower or any
Grantor of any petition in bankruptcy or the commencement of any
bankruptcy, insolvency or similar proceeding with respect to the
Borrower or any Grantor), as and when the same becomes due and payable
in accordance with the terms of the Loan Agreement, such New Interim
Notes, May Interim Notes or June Interim Notes, as the case may be,
(ii) the payment of all other indebtedness and other amounts payable by
the Borrower, or the Grantors under the Reimbursement Agreement, the
Guarantee, the Loan Agreement, the Notes, the New Interim Notes, the
May Interim Notes, the June Interim Notes, this Agreement (including,
without limitation, amounts due under Sections 10, 13 and 15 of this
Agreement), and the other Loan Documents (including, without
limitation, interest accruing after the date of any filing by the
Borrower or any Grantor of any petition in bankruptcy or the
commencement of any bankruptcy, insolvency or similar proceeding with
respect to the Borrower or any Grantor), (iii) the due and punctual
performance by the Borrower and the Grantors of and compliance by such
Persons with all their respective obligations under the Reimbursement
Agreement, the Guarantee, Loan Agreement, the Notes, the New
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<PAGE>
Interim Notes, the May Interim Notes, the June Interim Notes, this
Agreement and all other Loan Documents, and (iv) any renewals or
extensions of any of the foregoing.
6. Amendment to Pledge Agreement. The Pledge Agreement is
hereby amended by deleting Section 1 therefrom and replacing it in its entirety
with the following:
Section 1. Security for Obligations. This Agreement
is entered into to secure (a) the payment of the Reimbursement
Obligations, the principal of and premium and interest on the Loans and
the loans evidenced by the New Interim Notes, the May Interim Notes and
the June Interim Notes (including, without limitation, interest
accruing after the date of any filing by Pledgor of any petition in
bankruptcy or the commencement of any bankruptcy, insolvency or similar
proceeding with respect to Pledgor) as and when the same becomes due
and payable in accordance with the terms of the Loan Agreement, the New
Interim Notes, the May Interim Notes or the June Interim Notes, as the
case may be, whether at maturity or by prepayment, acceleration,
declaration of default or otherwise, (b) the payment of all other
indebtedness and other amounts payable by the Pledgor under the
Reimbursement Agreement, the Loan Agreement, the Notes, the New Interim
Notes, the May Interim Notes, the June Interim Notes, this Agreement
and the other Loan Documents, (c) the due and punctual performance by
Pledgor of and compliance by the Pledgor with all its obligations under
the Reimbursement Agreement, the Loan Agreement, the Notes, the New
Interim Notes, the May Interim Notes, the June Interim Notes, this
Agreement and all other Loan Documents, and (d) all extensions and
renewals of any of the foregoing (all of the payment and performance
obligations referred to in this Section 1 being referred to
collectively as the "Secured Obligations").
7. Amendment to Security Agreements. Each of the Borrower
Security Agreement, the Subsidiary Security Agreement and the Pledge Agreement
are hereby amended by inserting in Section 1 thereof the following definitions:
"June Interim Notes" mean the separate secured promissory
notes, dated as of June 18, 1999, between IMC Mortgage Company and each
of the GSCP Funds.
"Loan Documents" means (i) the Loan Agreement, (ii) the
Guarantee Agreement, (iii) the Notes, (iv) the New Interim Notes, (v)
the May Interim Notes, (vi) the June Interim Notes, (vii) the Note
Purchase and Amendment Agreement, (viii) the Note Purchase and
Amendment Agreement No. 2, (ix) the Security Agreements, (x) the Pledge
Agreement, (xi) the Registration Rights Agreement, (xii) the
Intercreditor Agreements and (xiii) any other agreement entered into
pursuant to Section 5.9 of the Loan Agreement or Section 4 hereof, in
each case as
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<PAGE>
the same may from time to time be amended, modified or supplemented,
and "Loan Document" means any one of them.
"Note Purchase and Amendment Agreement No. 2" means the Note
Purchase and Amendment Agreement No. 2, dated as of June 18, 1999,
among IMC Mortgage Company, certain of its subsidiaries, and the GSCP
Funds.
8. Amendment to Guarantee Agreement. The Guarantee Agreement
is hereby amended by deleting Recital D therefrom and replacing it in its
entirety with the following:
D. In order to induce Lenders to enter into the Loan
Agreement and the New Interim Notes (as defined in Amendment Agreement
No. 2 hereto), the May Interim Notes (as defined in the Note Purchase
and Amendment Agreement) and the June Interim Notes (as defined in the
Note Purchase and Amendment Agreement No. 2) and to extend to the
Company the loans provided for thereunder and to induce the Lenders to
enter into an indemnification agreement with issuers of certain surety
bonds in respect of the Company and its subsidiaries, and in
consideration of the substantial benefits the Guarantors expect to
derive from the use of the proceeds of such loans, each Guarantor is
willing to enter into this Guarantee Agreement, providing for the
guarantee by such Guarantor, jointly and severally with each other
Guarantor, of the Company's obligations under the Reimbursement
Agreement (as defined in Amendment Agreement No. 3 hereto), the Loan
Agreement, the Note, the New Interim Notes, the May Interim Notes, the
June Interim Notes, the Borrower Security Agreement, the Pledge
Agreement, the Note Purchase and Amendment Agreement, the Note Purchase
and Amendment Agreement No. 2 and the Registration Rights Agreement
(collectively, the "Principal Documents").
9. Further Amendments. If, upon the occurrence of the
Acquisition (as defined in the Acquisition Agreement), all amounts outstanding
under the June Interim Notes have not been repaid in full, the Lenders may apply
all or any portion of the amounts owing to them under the June Interim Notes in
satisfaction of all or any portion of their obligation under the Commitment
Letter, dated as of March 31, 1999, to make Additional Advances in the aggregate
principal amount of $35,000,000 to the Borrower by giving written notice to the
Borrower to such effect and delivering the June Interim Notes in the amount to
be so applied to the Borrower against receipt from the Borrower of Notes
evidencing the Additional Advances under the Amended and Restated Loan Agreement
and replacement notes evidencing any portion of the June Interim Notes remaining
outstanding after giving effect to such application. The parties hereto
undertake to amend the Amended and Restated Loan Agreement attached as Exhibit A
to the Commitment Letter, dated as of
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<PAGE>
March 31, 1999, from the GSCP Funds to the Borrower, as necessary in order to
preserve the rights of the GSCP Funds hereunder and under the Subject Documents.
10. Acknowledgment of Obligations; Solvency. The Borrower,
each Subsidiary Guarantor and each Subsidiary Grantor acknowledges that its
obligations under the Subject Agreements and the lien on the Collateral securing
its obligations thereunder remain in full force and effect, and that the
Borrower, each Subsidiary Guarantor and each Subsidiary Grantor have no
defenses, counterclaims or offsets to its obligations under the Subject
Agreements and that such liens are valid, perfected and enforceable. The
Borrower, each Subsidiary Guarantor and each Subsidiary Grantors hereby waives
the application of the automatic stay in any bankruptcy proceeding in respect of
its obligations under the Subject Agreements and consents to the modification of
the stay to permit the exercise by the GSCP Funds of their rights in respect of
the Collateral. This document shall not constitute a waiver, amendment or
modification of the Subject Agreements except as expressly set forth herein and
shall not be construed as a waiver or consent to any future action on the part
of the Borrower, any Subsidiary Guarantor and any Subsidiary Grantors that would
require a waiver or consent of the GSCP Funds except to the extent expressly
provided herein. The Borrower, each Subsidiary Guarantor and each Subsidiary
Grantor represents, warrants and confirms that it is not insolvent and after
giving effect to the borrowings contemplated hereby will not be rendered
insolvent, it is not engaged or about to engage in a business or transaction for
which its remaining property is an unreasonably small capital and it does not
intend to incur debts beyond its ability to repay as such debts mature.
11. 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 GSCP Funds. Any such waiver will be effective only in the specific instance
and for the specific purpose for which it is given.
12. 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.
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.
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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
15.
15. 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, (a) if to the GSCP Funds,
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 Borrower or any
Subsidiary Guarantor or Subsidiary Grantors, 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. 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 15, 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.
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<PAGE>
16. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors and assigns.
17. Expenses. The Borrower shall pay or reimburse the GSCP
Funds for all costs and expenses (including reasonable attorneys' fees) incurred
in preparing and enforcing this Agreement and perfecting the security interests
granted hereby.
18. 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.
19. 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.
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<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:
<PAGE>
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: /s/
------------------------------------------
Name:
Title:
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:
NOTE PURCHASE AND AMENDMENT AGREEMENT NO. 3
Note Purchase and Amendment Agreement No. 3 (this "Agreement"),
dated as of July 16, 1999, among IMC MORTGAGE COMPANY, a Delaware corporation
(the "Borrower"), GREENWICH STREET CAPITAL PARTNERS, L.P., a Delaware limited
partnership ("GSCP"), GREENWICH FUND, L.P., a Delaware limited partnership
("Greenwich Fund"), GSCP OFFSHORE FUND, L.P., a Cayman Islands exempted limited
partnership ("Offshore" and, together with GSCP and Greenwich Fund, the
"Lenders"), GREENWICH STREET EMPLOYEES FUND, L.P., a Delaware limited
partnership ("GSEF"), TRV EXECUTIVE FUND, L.P., a Delaware limited partnership
(together with GSEF, the "New GSCP Funds", and, collectively, with the Lenders,
the "GSCP Funds"), GSCP, as Collateral Agent (the "Collateral Agent"), and each
of the subsidiaries of the Borrower signatory hereto, amending each of (i) the
Borrower Security Agreement (the "Borrower Security Agreement"), dated as of
October 12, 1998, among the Borrower, the Lenders and 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, as each such agreement has been heretofore amended by Amendment
Agreement No. 1, dated as of February 11, 1999 ("Amendment Agreement No. 1"),
Amendment No. 2, dated as of April 19, 1999 ("Amendment Agreement No. 2"),
Amendment Agreement No. 3, dated as of May 20, 1999, the Note Purchase and
Amendment Agreement, dated as of May 18, 1999 (the "Note Purchase and Amendment
Agreement") and the Note Purchase and Amendment Agreement No. 2, dated June 18,
1999 ("Note Purchase and Amendment Agreement No. 2"), thereto, the "Subject
Agreements"), among the Borrower, the Lenders and the Collateral Agent.
RECITALS
A. The Borrower has entered into a Loan Agreement, dated as of
October 12, 1998 (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 entered into each of the Subject Agreements to
which they are party.
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C. The Lenders and the Borrower have also entered into (i)
Amendment No.1 (the "Amendment") to the Initial Loan Agreement, dated as of
February 11, 1999, providing for the Lenders to extend to the Borrower
additional commitments to loan in the aggregate an additional $5,000,000 (the
"Interim Loans"), and, together with the Subsidiary Guarantors, (ii) Amendment
Agreement No. 1, amending each of the Subject Agreements in connection with the
Amendment.
D. The Borrower, the Lenders, Greenwich Street Employees Fund,
L.P. ("GSEF"), and TRV Executive Fund, L.P. (together with GSEF, the "New GSCP
Funds", and, collectively with the Lenders, the "GSCP Funds") have entered into
an Acquisition Agreement, dated as of February 19, 1999 (the "Acquisition
Agreement"), pursuant to which the Borrower will issue and deliver to the GSCP
Funds common stock representing approximately 93.5% of the common stock of the
Borrower outstanding after such issuance and the New GSCP Funds have succeeded
by assignment to interests of the Lenders in the Initial Loans and the Interim
Loans.
E. At the Borrower's request, the GSCP Funds have made certain
additional loans to the Borrower to fund monthly servicing advances in respect
of its securitizations pursuant to Amendment Agreement No. 2, and certain
secured promissory notes, dated April 19, 1999, in the aggregate amount of
$14,959,676, pursuant to the Note Purchase and Amendment Agreement in the
aggregate amount of $33,000,000, and pursuant to the Note Purchase and Amendment
Agreement No. 2 in the aggregate amount of $36,000,000, which the Borrower has
repaid in the ordinary course and in accordance with the terms of such
agreements and promissory notes.
F. At the Borrower's request, the GSCP Funds are willing to
provide on the date hereof additional loans to the Borrower in the aggregate
amount of $46,250,000 (the "July Interim Loans"), which June Interim Loans are
to be evidenced by secured promissory notes of the Borrower in the form attached
hereto as Exhibit A (the "July Interim Notes") and are to be entitled to the
benefit of the guarantees and security provided under the Subject Documents.
G. Pursuant to the Borrower Security Agreement and the Subsidiary
Security Agreement, Borrower and the Subsidiary Grantors have granted the
Collateral Agent a continuing perfected security interest in, and a lien upon,
all of the Collateral (as defined therein), including all of the Borrower's and
such Subsidiary Grantors' rights to payment of money arising out of, relating
to, or created in connection with all Securitization Receivables, any other
interests of the Borrower or such Subsidiary Grantors in the Securitization
Transactions (with certain exceptions), all Servicing Fees, Servicing Rights,
Servicing Advances (as such capitalized terms are defined in such agreements)
and all cash from time to time deposited in any deposit account of any of the
Company or any Subsidiary Grantor with the Lenders in connection with such
agreements.
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<PAGE>
H. All collections in respect of Securitization Transactions are
paid to National City Bank as the Designated Depository Institution (within the
meaning of the various Pooling and Servicing Agreements governing the
Securitization Transactions) (the "Securitization Bank") for deposit to various
principal and interest or other accounts (collectively "Securitization
Accounts") established at the Securitization Bank in respect of the
Securitization Transactions. The Borrower is authorized under Pooling and
Servicing Agreements with the Trustee for such Securitization Transactions to
withdraw funds from time to time from the Securitization Accounts in payment of
Servicing Fees and in repayment of Servicing Advances made by the Borrower as
servicer in respect of such Securitization Transactions.
I. The Borrower has entered into a letter agreement, dated June
21, 1999 (together with any subsequent letter agreement from a Securitization
Bank pursuant to Section 2 below, a "Payment Blockage Letter"), with the
Securitization Bank pursuant to which the Securitization Bank acknowledges the
GSCP Funds' perfected security interest in and lien upon the Collateral,
including the right to payment of money arising out of, relating to or created
in connection with all Securitization Transactions, including all Servicing
Fees, Servicing Rights and Servicing Advances, and agrees not to honor any
withdrawal or payment requests by Borrower or any Subsidiary Grantor from such
Securitization Accounts (other than payments to or for the benefit of the
beneficiaries of such Securitizations) without written confirmation from the
Collateral Agent.
NOW, THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Borrower, the Subsidiary Guarantors, the Subsidiary Grantors, the Collateral
Agent, and the GSCP Funds hereby agree as follows:
1. Repayment of July Interim Loans. So long as any amounts are
outstanding under the July Interim Notes, the Borrower (i) shall provide the
Collateral Agent with written notice each Business Day of amounts becoming
available in any Securitization Account to be withdrawn or received by the
Borrower or any Subsidiary Grantor in respect of any Securitization Transaction,
including in respect of any Servicing Advances, Servicing Fees and Servicing
Rights ("Available Funds"), (ii) shall cause such Available Funds immediately
upon becoming available for withdrawal, to be wire transferred to an account or
accounts of such bank or banks as may be specified by the Collateral Agent for
application to repayment of amounts owed by the Borrower to the GSCP Funds in
respect of the June interim loans, and (iii) shall, in the event any such
Available Funds are, notwithstanding the provisions of the foregoing clause
(ii), withdrawn or received by the Borrower or any Subsidiary Grantor, cause
such funds to be held by the Borrower or such Subsidiary Grantor, as the case
may be, in trust for the benefit of GSCP Funds, separate and apart from, and not
commingled with, its general funds and applied solely as provided in the
foregoing clause (ii).
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2. Notice of Change in Securitization Bank or Securitization
Accounts; Payment Blockage Letter, etc. The Borrower represents and warrants to
the GSCP Funds (i) that National City Bank serves as the Designated Depository
Institution (as defined in the various Pooling and Servicing Agreements with
respect to each Securitization Transaction) with respect to the Securitization
Accounts established by the Borrower pursuant to each Securitization
Transaction, (ii) that the accounts listed in Annex A hereto are the only
Securitization Accounts established in respect of the Securitization
Transactions and (iii) that no consent or approval is required to be obtained
from the Trustee or Certificate Insurer in respect of any Securitization
Transaction or any other person in connection with the entry into the Payment
Blockage Letter. The Borrower shall, prior to establishing any new
Securitization Account or designating any depository institution to serve as a
Securitization Bank at which any Securitization Account is to be established,
(i) notify the GSCP Funds of such proposed change and (ii) obtain a letter
agreement from the Securitization Bank or with respect to the new Securitization
Account pursuant to which the Securitization Bank acknowledges the GSCP Funds'
perfected security interest in and lien upon the Collateral, including the right
to payment of money arising out of, or relating to or created in connection
with, all Securitization Transactions, including all Servicing Fees, Servicing
Rights and Servicing Advances, and agrees not to honor any withdrawal or payment
requests by Borrower or any Subsidiary Grantor from such Securitization Account
(other than payments to specified permitted payees to or for the beneficiaries
of such Securitizations) without written confirmation from the Collateral Agent,
which letter agreement shall be satisfactory to the Collateral Agent in
substance and form. In the event it is determined that any consent is required
from the Trustee or Certificate Insurer or any other person in connection with
the entrance by the Securitization Bank into any Payment Blockage Letter, the
Borrower and each Subsidiary Grantor shall use its best efforts to obtain any
such required consent.
3. Commitment Fee. In connection with the July Interim Loans, the
Borrower shall pay to the GSCP Funds on the date of such borrowing a commitment
fee equal to $1,250,000 and hereby directs the GSCP Funds to apply that portion
of the borrowings to payment of the fee.
4. Amendment to Borrower Security Agreement. Section 1 of the
Borrower Security Agreement is hereby amended by deleting therefrom the defined
term "Secured Obligations" and replacing it in its entirety with the following:
"Secured Obligations" means (i) the full and prompt
payment of the Reimbursement Obligations, the principal of and premium
(including, without limitation, Take-Out Premium) and interest on the
Loans and the loans evidenced by the New Interim Notes, the May Interim
Notes, the June Interim Notes and the July Interim Notes (including,
without limitation, interest accruing after the date of any filing by
the Company of any petition in bankruptcy or the commencement
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<PAGE>
of any bankruptcy, insolvency or similar proceeding with respect to the
Company), as and when the same becomes due and payable in accordance
with the terms of theLoan Agreement, such New Interim Notes, May Interim
Notes, June Interim Notes or July Interim Notes, as the case may be,
(ii) the payment of all other indebtedness and other amounts payable by
the Company under the Reimbursement Agreement, the Loan Agreement, the
Notes, the New Interim Notes, the May Interim Notes, the June Interim
Notes, the July Interim Notes, this Agreement (including, without
limitation, amounts due under Sections 10, 13 and 15 of this Agreement),
and the other Loan Documents (including, without limitation, interest
accruing after the date of any filing by the Company of any petition in
bankruptcy or the commencement of any bankruptcy, insolvency or similar
proceeding with respect to the Company), (iii) the due and punctual
performance by the Company of and compliance by the Company with all its
obligations under the Reimbursement Agreement, the Loan Agreement, the
Notes, the New Interim Notes, the May Interim Notes, the June Interim
Notes, the July Interim Notes, this Agreement and all other Loan
Documents, and (iv) any renewals or extensions of any of the foregoing.
5. Amendment to Subsidiary Security Agreement. Section 1 of the
Subsidiary Security Agreement is hereby amended by deleting therefrom the
defined term "Secured Obligations" and replacing it in its entirety with the
following:
"Secured Obligations" means (i) the full and prompt
payment of the Reimbursement Obligations, the principal of and premium
(including, without limitation, Take-Out Premium) and interest on the
Loans and the loans evidenced by the New Interim Notes, the May Interim
Notes, the June Interim Notes, the July Interim Notes (including,
without limitation, interest accruing after the date of any filing by
the Borrower or any Grantor of any petition in bankruptcy or the
commencement of any bankruptcy, insolvency or similar proceeding with
respect to the Borrower or any Grantor), as and when the same becomes
due and payable in accordance with the terms of the Loan Agreement, such
New Interim Notes, May Interim Notes, June Interim Notes or July Interim
Notes, as the case may be, (ii) the payment of all other indebtedness
and other amounts payable by the Borrower, or the Grantors under the
Reimbursement Agreement, the Guarantee, the Loan Agreement, the Notes,
the New Interim Notes, the May Interim Notes, the June Interim Notes,
the July Interim Notes, this Agreement (including, without limitation,
amounts due under Sections 10, 13 and 15 of this Agreement), and the
other Loan Documents (including, without limitation, interest accruing
after the date of any filing by the Borrower or any Grantor of any
petition in bankruptcy or the commencement of any bankruptcy, insolvency
or similar proceeding with respect to the Borrower or any Grantor),
(iii) the due and punctual performance by the Borrower and the Grantors
of and compliance by such Persons with all their
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respective obligations under the Reimbursement Agreement, the Guarantee,
Loan Agreement, the Notes, the New Interim Notes, the May Interim Notes,
the JuneInterim Notes, the July Interim Notes, this Agreement and all
other Loan Documents, and (iv) any renewals or extensions of any of the
foregoing.
6. Amendment to Pledge Agreement. The Pledge Agreement is hereby
amended by deleting Section 1 therefrom and replacing it in its entirety with
the following:
Section 1. Security for Obligations. This Agreement is
entered into to secure (a) the payment of the Reimbursement Obligations,
the principal of and premium and interest on the Loans and the loans
evidenced by the New Interim Notes, the May Interim Notes, the June
Interim Notes, the July Interim Notes (including, without limitation,
interest accruing after the date of any filing by Pledgor of any
petition in bankruptcy or the commencement of any bankruptcy, insolvency
or similar proceeding with respect to Pledgor) as and when the same
becomes due and payable in accordance with the terms of the Loan
Agreement, the New Interim Notes, the May Interim Notes, the June
Interim Notes or the July Interim Notes, as the case may be, whether at
maturity or by prepayment, acceleration, declaration of default or
otherwise, (b) the payment of all other indebtedness and other amounts
payable by the Pledgor under the Reimbursement Agreement, the Loan
Agreement, the Notes, the New Interim Notes, the May Interim Notes, the
June Interim Notes, the July Interim Notes, this Agreement and the other
Loan Documents, (c) the due and punctual performance by Pledgor of and
compliance by the Pledgor with all its obligations under the
Reimbursement Agreement, the Loan Agreement, the Notes, the New Interim
Notes, the May Interim Notes, the June Interim Notes, the July Interim
Notes, this Agreement and all other Loan Documents, and (d) all
extensions and renewals of any of the foregoing (all of the payment and
performance obligations referred to in this Section 1 being referred to
collectively as the "Secured Obligations").
7. Amendment to Security Agreements. Each of the Borrower
Security Agreement, the Subsidiary Security Agreement and the Pledge Agreement
are hereby amended by inserting in Section 1 thereof the following definitions:
"July Interim Notes" mean the separate secured promissory notes,
dated as of July 16, 1999, between IMC Mortgage Company and each of the
GSCP Funds.
"Loan Documents" means (i) the Loan Agreement, (ii) the Guarantee
Agreement, (iii) the Notes, (iv) the New Interim Notes, (v) the May
Interim Notes, (vi) the June Interim Notes, (vii) the July Interim
Notes, (viii) the Note Purchase and Amendment Agreement, (ix) the Note
Purchase and Amendment Agreement No. 2, (x) the Note Purchase and
Amendment Agreement No. 3, (xi) the Security
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Agreements, (xii) the Pledge Agreement, (xiii) the Registration Rights
Agreement, (xiv) the Intercreditor Agreements and (xv) any other
agreement entered into pursuant to Section 5.9 of the Loan Agreement or
Section 4 hereof, in each case as the same may from time to time be
amended, modified or supplemented, and "Loan Document" means any one of
them.
"Note Purchase and Amendment Agreement No. 3" means the Note
Purchase and Amendment Agreement No. 3, dated as of July 16, 1999, among
IMC Mortgage Company, certain of its subsidiaries, and the GSCP Funds.
8. Amendment to Guarantee Agreement. The Guarantee Agreement is
hereby amended by deleting Recital D therefrom and replacing it in its entirety
with the following:
D. In order to induce Lenders to enter into the Loan
Agreement and the New Interim Notes (as defined in Amendment Agreement
No. 2 hereto), the May Interim Notes (as defined in the Note Purchase
and Amendment Agreement), the June Interim Notes (as defined in the Note
Purchase and Amendment Agreement No. 2) and the July Interim Notes (as
defined in the Note Purchase and Amendment Agreement No. 3) and to
extend to the Company the loans provided for thereunder and to induce
the Lenders to enter into an indemnification agreement with issuers of
certain surety bonds in respect of the Company and its subsidiaries, and
in consideration of the substantial benefits the Guarantors expect to
derive from the use of the proceeds of such loans, each Guarantor is
willing to enter into this Guarantee Agreement, providing for the
guarantee by such Guarantor, jointly and severally with each other
Guarantor, of the Company's obligations under the Reimbursement
Agreement (as defined in Amendment Agreement No. 3 hereto), the Loan
Agreement, the Notes, the New Interim Notes, the May Interim Notes, the
June Interim Notes, the July Interim Notes, the Borrower Security
Agreement, the Pledge Agreement, the Note Purchase and Amendment
Agreement, the Note Purchase and Amendment Agreement No. 2, the Note
Purchase and Amendment Agreement No. 3 and the Registration Rights
Agreement (collectively, the "Principal Documents").
9. Further Amendments. If, upon the occurrence of the Acquisition
(as defined in the Acquisition Agreement), all amounts outstanding under the
July Interim Notes have not been repaid in full, the Lenders may apply all or
any portion of the amounts owing to them under the July Interim Notes in
satisfaction of all or any portion of their obligation under the Commitment
Letter, dated as of March 31, 1999, to make Additional Advances in the aggregate
principal amount of $35,000,000 to the Borrower by giving written notice to the
Borrower to such effect and delivering the July Interim Notes in the amount to
be so applied to the Borrower against receipt from the Borrower of Notes
evidencing the Additional Advances under the Amended and Restated Loan Agreement
and replacement notes
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evidencing any portion of the July Interim Notes remaining outstanding after
giving effect to such application. The parties hereto undertake to amend the
Amended and Restated Loan Agreement attached as Exhibit A to the Commitment
Letter, dated as of March 31, 1999, from the GSCP Funds to the Borrower, as
necessary in order to preserve the rights of the GSCP Funds hereunder and under
the Subject Documents.
10. Acknowledgment of Obligations; Solvency. The Borrower, each
Subsidiary Guarantor and each Subsidiary Grantor acknowledges that its
obligations under the Subject Agreements and the lien on the Collateral securing
its obligations thereunder remain in full force and effect, and that the
Borrower, each Subsidiary Guarantor and each Subsidiary Grantor have no
defenses, counterclaims or offsets to its obligations under the Subject
Agreements and that such liens are valid, perfected and enforceable. The
Borrower, each Subsidiary Guarantor and each Subsidiary Grantors hereby waives
the application of the automatic stay in any bankruptcy proceeding in respect of
its obligations under the Subject Agreements and consents to the modification of
the stay to permit the exercise by the GSCP Funds of their rights in respect of
the Collateral. This document shall not constitute a waiver, amendment or
modification of the Subject Agreements except as expressly set forth herein and
shall not be construed as a waiver or consent to any future action on the part
of the Borrower, any Subsidiary Guarantor and any Subsidiary Grantors that would
require a waiver or consent of the GSCP Funds except to the extent expressly
provided herein. The Borrower, each Subsidiary Guarantor and each Subsidiary
Grantor represents, warrants and confirms that it is not insolvent and after
giving effect to the borrowings contemplated hereby will not be rendered
insolvent, it is not engaged or about to engage in a business or transaction for
which its remaining property is an unreasonably small capital and it does not
intend to incur debts beyond its ability to repay as such debts mature.
11. 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 GSCP Funds. Any such waiver will be effective only in the specific instance
and for the specific purpose for which it is given.
12. 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.
13. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
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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.
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
15.
15. 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, (a) if to the GSCP Funds,
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 Borrower or any
Subsidiary Guarantor or Subsidiary Grantors, 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. Each such notice, request or other communication
shall be effective when sent by
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<PAGE>
facsimile transmission to the facsimile number or when delivered by hand to the
address specified in this Section 15, 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.
16. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors and assigns.
17. Expenses. The Borrower shall pay or reimburse the GSCP Funds
for all costs and expenses (including reasonable attorneys' fees) incurred in
preparing and enforcing this Agreement and perfecting the security interests
granted hereby.
18. 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.
19. 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.
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<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:
<PAGE>
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: /s/
-------------------------------------
Name:
Title:
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:
<PAGE>
EXHIBIT A
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL (I) THIS NOTE
HAS BEEN REGISTERED UNDER THE SECURITIES ACT, OR (II) AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE THEREFOR.
IMC MORTGAGE COMPANY
SECURED PROMISSORY NOTE
$[ ] July __, 1999
FOR VALUE RECEIVED, the undersigned, IMC MORTGAGE COMPANY, 5901
E. Fowler Avenue, Tampa, Florida 33617 (the "Borrower"), a Florida corporation,
hereby promises to pay to GREENWICH STREET CAPITAL PARTNERS II, L.P. (the
"Lender"), c/o GSCP, Inc., 388 Greenwich Street, New York, New York 10013, or
registered assigns, the principal sum of [ ] DOLLARS ($[ ]), payable on demand,
with interest on the unpaid balance thereof at 20% per annum from the date
hereof, payable weekly in arrears.
Payments of principal of and interest on this Note are to be made
at the main office of the holder, or at such other place as the holder shall
designate to the Borrower hereof in writing, in lawful money of the United
States of America.
All repayments of interest or principal shall be recorded by the
registered holder hereof and appropriate notations to evidence the foregoing
information with respect to the principal amount then outstanding shall be
endorsed by such registered holder on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof; provided that
the failure of such registered holder to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder.
3. Prepayment. The Borrower may at any time and from time to
time, upon notice to the registered holder of this Note, without the payment of
any premium or fee, prepay all or any portion of the indebtedness represented by
this Note, with interest accrued to the date fixed for prepayment.
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4. Registration, Transfer and Exchange of Notes. a. The Borrower
shall keep at its principal executive office a register for the registration and
registration of transfers of this Note and any Notes issued upon the transfer or
exchange hereof ("Notes"). The name and address of each holder of one or more
Notes, each transfer thereof and the name and address of each transferee of one
or more Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Borrower shall not be affected by any notice or knowledge to the
contrary.
b. Upon surrender of any Note at the principal executive office
of the Borrower for registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of such
Note or his attorney duly autho rized in writing and accompanied by the address
for notices of each transferee of such Note or part thereof), the Borrower shall
execute and deliver, at the holders' expense, one or more new Notes (as
requested by the holder thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered Note. Each such
new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of this Note. Each such new Note shall be dated and
bear interest from the date to which interest shall have been paid on the surren
dered Note or dated the date of the surrendered Note if no interest shall have
been paid thereon.
5. Representations and Warranties of the Borrower. The Borrower
hereby represents and warrants to the registered holders from time to time of
this Note, as follows:
a. Corporate Existence and Power. The Borrower is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Florida, and has all corporate power required to carry on its business
as now conducted and to execute, deliver and perform its obligations under this
Note.
b. Authority Relative to this Note; No Contravention. The
execution and delivery of this Note and the consummation of the transactions
contemplated hereby and thereby have been duly authorized and approved by all
necessary action on the part of the Borrower. This Note has been duly and
validly executed and delivered by the Borrower and constitutes a valid and
binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms. The execution, delivery and performance by the
Borrower of this Note does not violate or conflict with any applicable law,
rule, regulation, order or decree or contravene, or constitute a default under,
any
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provision of the Borrower's Certificate of Incorporation or By-Laws or any
mortgage, deed of trust, loan agreement or other instrument or agreement binding
upon the Borrower or its assets and property.
6. Events of Default. If any of the following "Events of Default"
shall occur and be continuing:
a. Any representation and warranty made by the Borrower hereunder
shall prove to have been inaccurate in any material respect;
b. The Borrower shall (i) file, or consent by answer or otherwise
to the filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy or insolvency law of any jurisdiction, (ii) make an
assignment for the benefit of its creditors, (iii) consent to the appointment of
a custodian, receiver, trustee or other officer with similar powers of itself or
of any substantial part of its property, (iv) be adjudicated insolvent or (v)
take corporate action for the purpose of any of the foregoing;
c. A court or other governmental authority of competent
jurisdiction shall enter an order appointing, without consent by the Borrower, a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, or an order for
relief shall be entered in any case or proceeding for liquidation or a
reorganization or otherwise to take advantage of any bankruptcy or insolvency
law of any jurisdiction, or ordering the dissolution, winding up or liquidation
of the Borrower, or any petition for any such relief shall be filed against the
Borrower and such petition shall not be dismissed within 30 days; then, in the
case of any Event of Default the entire unpaid principal amount of and any
accrued interest on the sums evidenced by this Note shall automatically become
due and payable, in either case, without presentment, demand, protest or further
notice of any kind, all of which are expressly waived by the Borrower. No delay
or omission of the holder hereof to exercise any right or remedy hereunder,
whether before or after the happening of any breach or Event of Default, shall
impair any such right or shall operate as a waiver thereof or as a waiver of any
such breach or Event of Default. No single or partial exercise by the holder
hereof of any right or remedy shall preclude any other or further exercise
thereof, or preclude any other right or remedy. The rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies provided
by law or in equity. The Borrower shall pay, and shall indemnify and hold
harmless the holder of this Note from and against, all costs and expenses of
collection or enforcement hereof incurred by the holder hereof, including
reasonable attorneys' fees and disbursements.
7. Security, Guarantee. This Note is entitled to the benefits of
the Borrower Security Agreement, the Subsidiary Security Agreement, the
Guarantee
3
<PAGE>
Agreement and the Pledge Agreement, each dated as of October 12, 1998, each
among the Borrower, the subsidiaries of the Borrower party thereto, the Lender
and the affiliates of Lender party thereto, as each such agreement is amended by
the Amendment Agreement No. 1 thereto, dated as of February 11, 1999, the
Amendment Agreement No. 2 thereto, dated as of April 19, 1999, the Note Purchase
and Amendment Agreement, dated as of May 18, 1999, the Note Purchase and
Amendment Agreement No. 2, dated as of June 18, 1999, and the Note Purchase and
Amendment Agreement No. 3, dated as of July 16, 1999, which contain provisions
for the securing and guaranteeing of this Note and the Loan evidenced hereby
upon the terms and conditions specified therein.
8. Governing Law. This Note shall be governed by and construed
and enforced in accordance with the law of the State of New York.
IMC MORTGAGE COMPANY
By:____________________________
Name:
Title:
4
<PAGE>
ENDORSEMENT
This Note is entitled to the benefit of the Guarantee of the
undersigned pursuant to the Guarantee Agreement.
IMC CORPORATION OF AMERICA
IMC CREDIT CARD, INC.
IMC MORTGAGE COMPANY, CANADA
LTD.
AMERICAN HOME EQUITY
CORPORATION
IMC INVESTMENT CORPORATION
IMC INVESTMENT LIMITED
PARTNERSHIP
IMCC INTERNATIONAL, INC.
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.
NATIONAL LENDING GROUP, INC.
RESIDENTIAL MORTGAGE
CORPORATION (IMC), INC.
By:__________________________________
Name:
Title:
5
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<TABLE>
<CAPTION>
ADVANCES AND PAYMENTS
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<S> <C> <C> <C> <C> <C>
Amount of Amount of Unpaid Notation
Date Amount of Advance Principal Paid Interest Paid Principal Balance Made by
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</TABLE>
