CONFORMED COPY
LOAN AND SECURITY AGREEMENT
dated as of February 28, 1997
between
IMC MORTGAGE COMPANY,
IMC CORPORATION OF AMERICA,
INDUSTRY MORTGAGE COMPANY, LP,
IMC INVESTMENT CORP.,
and COREWEST BANC,
jointly and severally, as Borrowers
and
XXXXX XXXXXX REAL ESTATE
SECURITIES INC., as Lender
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms................................................................ 1
1.2 Accounting Terms..................................................................... 8
1.3 Other Definitional Provisions........................................................ 8
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1 Representations and Warranties Relating to Borrower.................................. 9
A. Formation, Powers and Good Standing......................................... 9
B. Authorization of Borrowing, etc............................................. 9
C. Financial Condition......................................................... 10
D. Changes, etc................................................................ 10
E. Title to Properties; Liens.................................................. 10
F. Litigation; Adverse Facts................................................... 11
G. Payment of Taxes............................................................ 11
H. Other Agreements; Performance............................................... 11
I. Governmental Regulation..................................................... 12
J. Borrower's Securities Activities............................................ 12
K. Employee Benefit Plans...................................................... 12
L. Disclosure.................................................................. 12
M. Compliance with State Law................................................... 12
2.2 Representations and Warranties Relating to Pledged Loans............................. 13
2.3 Representations and Warranties Relating to Pledged MBS............................... 20
ARTICLE III
BORROWING AND REPAYMENTS; NOTE
3.1 Certifications; Advances............................................................. 21
A. Certifications.............................................................. 21
B. Advances.................................................................... 21
C. Netting of Payments......................................................... 22
D. Advances Optional........................................................... 22
3.2 Market Value; Margin Maintenance..................................................... 22
A. Market Value................................................................ 22
B. Margin Maintenance.......................................................... 23
3.3 Note; Interest....................................................................... 23
A. Note........................................................................ 23
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B. Rate of Interest............................................................ 23
C. Interest Payments........................................................... 23
D. Post-Maturity Interest...................................................... 24
E. Computation of Interest..................................................... 24
F. Breakage Fee................................................................ 24
3.4 Repayments and Payments.............................................................. 24
A. Repayment................................................................... 24
B. Manner and Time of Payment.................................................. 24
C. Payments on Non-Business Days............................................... 24
ARTICLE IV
CONDITIONS TO THE ADVANCES
4.1 Conditions to the Effective Date..................................................... 25
4.2 Conditions to All Advances........................................................... 26
ARTICLE V
SECURITY
5.1 Grant of Security Interest........................................................... 28
5.2 Release and Substitution of Collateral............................................... 29
5.3 Receipt of Pledged Loan Income and Pledged MBS Income................................ 29
5.4 Lender as Attorney-in-Fact........................................................... 30
5.5 Security for Obligations............................................................. 30
5.6 Joint and Several Liability of Borrowers............................................. 30
ARTICLE VI
COVENANTS OF BORROWER
6.1 Financial Statements and Other Reports............................................... 32
6.2 Existence; Franchises................................................................ 33
6.3 Payment of Taxes and Claims.......................................................... 33
6.4 Inspection........................................................................... 34
6.5 Compliance with Laws, etc............................................................ 34
6.6 Restriction on Fundamental Changes................................................... 34
6.7 Financial Covenants.................................................................. 34
A. Net Worth................................................................... 34
B. Indebtedness Ratio.......................................................... 34
6.8 Notice of Change in Articles, Bylaws or Seller's Guide............................... 35
6.9 Further Assurances................................................................... 35
6.10 Reports Regarding Collateral......................................................... 35
6.11 Borrower's Securities Activities..................................................... 35
6.12 Corporate Separation and Indebtedness................................................ 35
6.13 Other Agreements..................................................................... 36
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6.14 Independence of Covenants............................................................ 36
ARTICLE VII
EVENTS OF DEFAULT
7.1 Events of Default.................................................................... 37
A. Failure to Make Payments When Due........................................... 37
B. Default in Other Agreements................................................. 37
C. Breach of Covenants......................................................... 37
D. Breach of Warranty.......................................................... 37
E. Involuntary Bankruptcy: Appointment of Receiver, etc........................ 37
F. Voluntary Bankruptcy; Appointment of Receiver; Material Adverse
Change...................................................................... 38
G. Judgments and Attachments................................................... 38
H. Dissolution................................................................. 38
I. Other Defaults.............................................................. 38
7.2 Application of Proceeds.............................................................. 40
ARTICLE VIII
MISCELLANEOUS
8.1 Expenses............................................................................. 42
8.2 Indemnity by Borrower................................................................ 42
A. Indemnification by Borrower................................................. 42
B. Claims...................................................................... 43
8.3 Set-Off.............................................................................. 43
8.4 Amendments and Waivers............................................................... 43
8.5 Confidentiality; Non-Disclosure of Information....................................... 43
8.6 Notices.............................................................................. 43
8.7 Attorneys' Fees...................................................................... 43
8.8 Survival of Warranties and Certain Agreements........................................ 44
A. Agreement................................................................... 44
B. Termination................................................................. 44
8.9 Failure or Indulgence Not Waiver; Remedies Cumulative................................ 44
8.10 WAIVER OF TRIAL BY JURY.............................................................. 44
8.11 No Joint Venture..................................................................... 44
8.12 Lender's Discretion.................................................................. 44
8.13 Severability......................................................................... 44
8.14 Headings............................................................................. 44
8.15 Applicable Law....................................................................... 45
8.16 Transfers by Lender; Subsequent Holders of Note...................................... 45
8.17 No Assignment by Borrower............................................................ 45
8.18 Counterparts; Effectiveness.......................................................... 45
8.19 Entire Agreement..................................................................... 45
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8.20 Additional Borrowers................................................................. 45
EXHIBITS
Exhibit A Form of Compliance Certificate
Exhibit B Form of Promissory Note
Exhibit C Form of Borrower's Incumbency Certificate
Exhibit D Form of Borrower's Officer's Certificates
Exhibit E-1 Form of Request for Advance
Exhibit E-2 Form of Advance Request Confirmation
Exhibit F Form of Lender's Wire Transfer Instructions
Exhibit G List of Borrower's Affiliates
Exhibit H Form of Opinion of Borrower's Counsel
Exhibit I Form of Borrower Addition Agreement
SCHEDULE 1 Supplemental Schedule
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LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT (the "Agreement") is dated as of
February 28, 1997 by and among IMC Mortgage Company, a Florida corporation
("IMCC"), IMC Corporation of America, a Delaware corporation ("IMCA"), Industry
Mortgage Company, LP, a Delaware limited partnership ("IMC LP"), IMC Investment
Corp., an Illinois corporation ("IMCI") and CoreWest Banc, a California
corporation ("CWB") and each other affiliate of IMCC that becomes a party to
this Agreement pursuant to Section 8.20 below (jointly and severally, each a
"Borrower" and collectively "Borrowers"), and XXXXX XXXXXX REAL ESTATE
SECURITIES INC., a Delaware corporation ("Lender").
RECITALS
A. Borrower desires to finance certain Eligible Assets (as
defined below). Lender may from time to time agree to provide financing to
Borrower to enable Borrower to finance certain Eligible Assets.
B. The Eligible Assets pledged by Borrower to Lender shall be
held by Custodian (as defined below) in accordance with the Custodial Agreement
(as defined below).
NOW, THEREFORE, in consideration of the above Recitals and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the
following meanings:
"Advance" means any advance made by Lender pursuant to
subsection B of Section 3.1 and which is evidenced by the Advance Schedule
attached to the Note.
"Advance Date" means each date on which an Advance is made by
Lender to Borrower, which date shall be set forth in the related Advance Request
Confirmation.
"Advance Maturity Date" means, with respect to any Advance,
the date on which Borrower shall repay the entire outstanding amount of the
related Advance, which date shall be set forth in the related Advance Request
Confirmation.
"Advance Rate" means the percentage rate to be applied to the
Market Value of any Eligible Asset, at which rate Lender may make an Advance to
Borrower. Unless otherwise determined by Lender in its sole discretion, the
Advance Rate for any Advance shall be as set forth in Schedule 1 hereto.
"Advance Request Confirmation" means a confirmation from
Lender relating to a Request for Advance, substantially in the form of Exhibit
E-2 hereto, setting forth the terms and conditions of the related Advance.
"Advance Schedule" means any of the advance schedules attached
to the Note.
"Affiliate" means a Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with, Borrower; or (ii) five percent or more of the voting stock
or equity interest of which is beneficially owned or held by Borrower. Attached
hereto as Exhibit G is a list of all Affiliates of Borrower.
"Agreement" means this Loan and Security Agreement dated as of
February 28, 1997, as it may from time to time be supplemented, modified or
amended.
"Assignee" means The Chase Manhattan Bank, N.A., as agent for
certain beneficiaries pursuant to certain repurchase transaction tri-party
custody agreements.
"Borrower" means IMCC, IMCA, IMCIP, IMCI, CWB, as applicable,
and each other entity which becomes a party to this Agreement pursuant to
Section 8.20 hereof.
"Breakage Fee" means a fee paid by Borrower to Lender on each
Interest Payment Date equal to the imputed accrued interest on that portion of
any Advance requested by Borrower pursuant to a Request for Advance which has
been accepted by Lender pursuant to an Advance Request Confirmation but has not
been fully utilized by Borrower. Such imputed accrued interest shall accrue at
the related Interest Rate less the then prevailing LIBOR for the term set forth
in the related Advance Request Confirmation.
"Business Day" means any day other than (a) a Saturday, Sunday
or other day on which banks located in the City of New York, New York are
authorized or obligated by law or executive order to be closed, or (b) any other
day on which Lender is closed for business.
"Capital Lease" means, as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as lessee which
would, in conformity with GAAP, be required to be accounted for as a capital
lease on a balance sheet of that Person.
"Collateral" means (i) any Eligible Asset pledged by Borrower
and accepted by Lender in connection with either an Advance or a Margin Deficit;
(ii) the contractual right to receive payments, including the right to payments
of principal and interest and the right to enforce such payments, arising from
or under any of the Eligible Assets; (iii) the contractual
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right to service each Pledged Loan; and (iv) and any and all proceeds, payments,
income, profits and products thereof, and all files and records relating
thereto.
"Collateral Value" means, with respect to any Eligible Asset
pledged by Borrower to Lender, the product of the related Market Value and the
related Advance Rate.
"Compliance Certificate" means a certificate substantially in
the form of Exhibit A hereto delivered to Lender by Borrower pursuant to
subsection (iv) of Section 6.1.
"Contingent Obligation" means, as applied to any Person, any
liability, contingent or otherwise, of that Person with respect to any
Indebtedness, lease, dividend, letter of credit or other obligation of another,
including, without limitation, any such obligation guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business),
co-made or discounted or sold with recourse by that Person, or in respect of
which that Person is otherwise liable, including, without limitation, any such
obligation for which that Person is in effect liable through any agreement
(contingent or otherwise) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain the solvency or
any balance sheet item, level of income or other financial condition of the
obligor of such obligation, or to make payment for any products, materials or
supplies or for any transportation, services or lease regardless of the
non-delivery or nonfurnishing thereof, in any such case if the purpose or intent
of such agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected (in whole or in part)
against loss in respect thereof. The amount of any Contingent Obligation shall
be equal to the amount of the obligation so guaranteed or otherwise supported;
provided, however, that Contingent obligations shall not include any liability
between or among Borrowers or the obligations of one Borrower with respect to
the Indebtedness or obligations of any other Borrower.
"Contractual Obligation" means, as applied to any Person, a
provision of any security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it is or any of its properties is bound
or to which it or any of its properties is subject.
"Custodial Agreement" means the Custody Agreement dated as of
February 28, 1997, by and among Borrower, Lender and Custodian, as the same may
from time to time be supplemented, modified or amended.
"Custodian" means First National Bank of Boston, and its
permitted successors under the Custodial Agreement.
"Dollar" means lawful currency of the United States of
America.
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"Effective Date" means February 28, 1997.
"Eligible Asset" means any Pledged MBS or Pledged Loan.
"Employee Benefit Plan" means any pension plan, any employee
welfare benefit plan, or any other employee benefit plan which is described in
Section 3(3) of ERISA and is maintained for employees of Borrower or any ERISA
Affiliate.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" means, as applied to any Person, any trade
or business (whether or not incorporated) which is a member of a group of which
that Person is a member and is under common control within the meaning of the
regulations promulgated under Section 414 of the Internal Revenue Code of 1986.
"Event of Default" means any of the events set forth in
Section 7.1.
"FNMA" means the Federal National Mortgage Association and any
successor thereto.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination. In the event of a change in GAAP, Borrower and Lender
shall negotiate in good faith to revise any covenants of this Agreement affected
thereby in order to make such covenants consistent with GAAP then in effect.
"Incremental Interest Rate" means 200 basis points, which is
the amount by which the Interest Rate shall increase if Borrower fails to cure a
Margin Deficit after receipt by Borrower of notice from Lender in accordance
with Section 3.2 hereof.
"Indebtedness" means, as applied to any Person, (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases which is capitalized on a balance sheet in conformity with
GAAP, (iii) notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money, (iv) any obligation
owed for all or any part of the deferred purchase price of property or services
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, and (v) all indebtedness secured by any Lien existing on any
property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
non-recourse to the credit of that Person.
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"Interest Determination Date" means, with respect to any
Advance, initially the related Advance Date and thereafter each successive Reset
Date.
"Interest Payment Date" means, with respect to any Advance,
the applicable date(s) set forth in the related Advance Request Confirmation;
provided, however, that the final Interest Payment Date shall be on the related
Advance Maturity Date.
"Interest Period" means, with respect to any Advance, the
period from (and including) an Interest Payment Date to (but excluding) the
immediately succeeding Interest Payment Date; provided, however, that the first
Interest Period of any Advance shall commence on (and include) the related
Advance Date and continue until (but exclude) the first Interest Payment Date.
"Interest Rate" means, with respect to any Advance, the rate
at which such Advance shall bear interest on the unpaid principal thereof.
Unless otherwise determined by Lender in its sole discretion, the Interest Rate
for any Advance shall be as set forth in Schedule 1 hereto.
"LIBOR" means, unless otherwise agreed to by the parties
hereto pursuant to an Advance Request Confirmation, the London interbank offered
rate for one-month U.S. Dollar deposits as it appears on page five of the
Telerate screen at or about 9:00 a.m. (New York City time) on the related
Interest Determination Date.
"Lien" means any lien, mortgage, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest).
"Mandatory Repayment Interest Rate" means 100 basis points,
which is the amount by which the Incremental Interest Rate shall increase if
such Incremental Interest Rate has been in effect for 1 Business Day in
accordance with Section 3.2 hereof.
"Margin Call" has the meaning set forth in Section 3.2.
"Margin Deficit" has the meaning set forth in Section 3.2.
"Market Value" means the value of any Eligible Asset as
determined in accordance with subsection A of Section 3.2.
"Material Adverse Effect" shall mean, with respect to any
Borrower, any event, act or condition, or any series of events, acts or
conditions, which has, or could reasonably be expected to have, a material
adverse effect upon (i) the business, operations, properties, assets or
condition (financial or otherwise) of Borrower or (ii) the ability of Borrower
to perform, or of Lender to enforce, any of the Obligations.
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"Mortgage" means the mortgage, deed of trust or other
instrument creating a first [or second] lien on an estate in fee simple in real
property securing a Pledged Note.
"Mortgage File" has the meaning set forth in the Custodial
Agreement.
"Mortgage Loan" means any first-lien or second-lien
residential mortgage loan originated and serviced by Borrower in accordance with
the Seller's Guide.
"Mortgaged Property" means, with respect to any Pledged Loan,
the property subject to the lien of the Mortgage securing a Pledged Note.
"Mortgagor" means the obligor on a Pledged Note.
"Net Worth" means, as of any date of determination, the sum of
the capital stock and additional paid-in capital of IMCC plus retained earnings
(or minus accumulated deficits), as determined in accordance with GAAP.
"Note" means the promissory note executed by each Borrower in
favor of Lender pursuant to Section 3.3 and substantially in the form of Exhibit
B.
"Obligations" means all obligations of every nature of
Borrower from time to time owed to Lender under this Agreement.
"Officer's Certificate" means a certificate executed on behalf
of Borrower by the Chairman of the Board (if an officer) or President of
Borrower or one of its Vice Presidents or by its Chief Financial Officer or its
Treasurer or Controller.
"Person" means and includes natural persons, corporations,
limited liability companies, limited partnerships, general partnerships, joint
stock companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof.
"Pledged Loan" means any Mortgage Loan or Wet Mortgage Loan
that is pledged by Borrower and accepted by Lender in connection with an
Advance.
"Pledged Loan Schedule" means, with respect to any Advance
that will be secured by Collateral that consists of Pledged Loans, a detailed
listing to be provided by Borrower to Lender and attached to the related Request
for Advance, which schedule shall be in a form acceptable to Lender and shall
set forth the following: a schedule of Pledged Loans identifying each Pledged
Loan by Borrower's loan number, Mortgagor's name and state (and zip code, with
respect to any electronic transmissions) of the Mortgaged Property, whether such
Pledged Loan is secured by a first or second lien on the related Mortgaged
Property, the combined loan-to-value ratio, the appraised value of the Mortgaged
Property (if available), the outstanding
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principal amount as of a specified date, the initial interest rate borne by such
Pledged Loan, the original principal balance thereof, the current scheduled
monthly payment of principal and interest, the origination date of the related
Pledged Loan (available on electronic transmission only), the maturity of the
related Pledged Note, the property type, the program type of the related Pledged
Loan, the original term to maturity and such other information that Borrower and
Lender may mutually agree upon.
"Pledged MBS" means any residual, subordinated or interest
strip class of asset- backed security (i) issued in connection with a
securitization in which Lender or its designee acted as lead or co-lead
underwriter or placement agent and (ii) pledged by Borrower and accepted by
Lender in connection with an Advance.
"Pledged MBS File" has the meaning set forth in Section 5.1.E.
"Pledged MBS Schedule" means, with respect to any Advance that
will be secured by Collateral that consists of any Pledged MBS, a detailed
listing to be provided by Borrower to Lender and attached to the related Request
for Advance, which schedule shall be in a form acceptable to Lender and shall
set forth a description of the Pledged MBS that will secure the related Advance,
including without limitation, if applicable, the CUSIP number, the coupon rate,
the maturity date and the original face amount and the current face amount.
"Pledged Note" means the note or other evidence of
indebtedness of a Mortgagor and secured by a Mortgage.
"Potential Event of Default" means a condition or event which,
after notice or lapse of time or both, would constitute an Event of Default if
that condition or event were not cured or removed within any applicable grace or
cure period.
"Request for Advance" means a request by Borrower for an
Advance, substantially in the form of Exhibit E-1 hereto, setting forth the
requested terms of a proposed Advance.
"Request for Release" shall have the meaning set forth in the
Custodial Agreement.
"Required Documents" means, with respect to any Advance
secured by Pledged Loans, those documents that Borrower shall deliver to
Custodian as part of the related Mortgage File in accordance with the Custodial
Agreement.
"Reset Date" means each date on which the Interest Rate is to
be recalculated by Lender as set forth in the related Advance Request
Confirmation.
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"Seller's Guide" means the "IMC Mortgage Company Client
Operations Manual", together with the underwriting guidelines of Borrower, a
true and correct copy of which was previously provided to Lender by Borrower.
"Subsidiary" means any corporation, association, partnership,
trust or other business entity in which more than 50% of the total voting power
or shares of stock entitled to vote in the election of directors, managers or
trustees thereof, or more than 50% of the total equity interests (including
partnership interests) therein, is at the time owned or controlled, directly or
indirectly, by any Person or one or more of the other Subsidiaries of that
Person or a combination thereof.
"Trust Receipt" means a trust receipt and certification issued
by the Custodian to Lender in accordance with the Custodial Agreement,
indicating that with respect to any Eligible Asset listed on the schedule
attached thereto, the Custodian (i) has performed the applicable certification
procedures set forth in the Custodial Agreement and (ii) is holding such
Eligible Asset as bailee and custodian of Lender.
"Wet Loan List" shall have the meaning set forth in the
Custodial Agreement.
"Wet Mortgage Loan" means any residential mortgage loan
originated by Borrower in accordance with the Seller's Guide, with respect to
which all of the related Required Documents have not been deposited with the
Custodian on or prior to the related Advance Date.
1.2 Accounting Terms.
For purposes of this Agreement, all accounting terms not
otherwise defined herein shall have the meanings assigned to them in conformity
with GAAP.
1.3 Other Definitional Provisions.
References to "Sections", "subsections" and "Articles" shall
be to Sections, subsections, and Articles respectively, of this Agreement unless
otherwise specifically provided. Any of the terms defined in Section 1.1 may,
unless the context otherwise requires, be used in the singular or the plural
depending on the reference.
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ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1 Representations and Warranties Relating to Borrower.
Borrower represents, warrants to and covenants with Lender at the date of
execution of this Agreement and at the time any Advance is made to Borrower from
Lender that:
A. Formation, Powers and Good Standing.
(i) Formation and Powers. Borrower is a corporation,
limited partnership or limited liability company duly organized,
validly existing and in good standing under the laws of the state of
its formation. Borrower has all requisite corporate, partnership or
limited liability company power and authority to own and operate its
properties, to carry on its business as now conducted and proposed to
be conducted, to enter into this Agreement, to issue the Note and to
carry out the transactions contemplated hereby and thereby.
(ii) Good Standing. Borrower is in good standing
wherever necessary to carry on its business and operations, except in
jurisdictions in which the failure to be in good standing has and will
have no material adverse effect on the financial condition or results
of operation of Borrower.
(iii) Principal Place of Business. Each Borrower's
principal place of business is located at 0000 Xxxxxxxx Xxxx Xxxxx,
Xxxxx, Xxxxxxx 00000.
B. Authorization of Borrowing, etc.
(i) Authorization of Borrowing. The execution,
delivery and performance of this Agreement, and the issuance, delivery
and payment of the Note, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by all
necessary corporate action by Borrower.
(ii) No Conflict. The execution, delivery and
performance by Borrower of this Agreement and the issuance, delivery
and payment of the Note, and the consummation of the transactions
contemplated hereby and thereby, do not and will not (a) violate any
provision of law applicable to Borrower, articles or certificate of
incorporation or bylaws or similar documents governing the formation
and internal governance of Borrower, or any order, judgment or decree
of any court or other agency of government binding on Borrower, (b)
conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any Contractual Obligation of
Borrower, (c) result in or require the creation or imposition of any
Lien, charge or encumbrance of any nature whatsoever upon any of its
properties or assets except the Lien in favor of Lender pursuant to
Section 5.1, or (d) require any approval of
9
shareholders or any approval or consent of any Person under any
Contractual Obligation of Borrower other than approvals or consents
which have been obtained and disclosed in writing to Lender.
(iii) Governmental Consents. The execution, delivery
and performance by Borrower of this Agreement and the issuance,
delivery and payment of the Note, and the consummation of the
transactions contemplated hereby and thereby, do not and will not
require any registration with, consent or approval of, or notice to, or
other action to, with or by, any Federal, state or other governmental
authority or regulatory body or other Person by Borrower except those
that have been obtained and disclosed in writing to Lender.
(iv) Binding Obligation. This Agreement is, and the
Note when executed and delivered hereunder will be, the legally valid
and binding obligations of Borrower, enforceable against it in
accordance with their respective terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws or equitable principles relating to or limiting creditors'
rights generally.
C. Financial Condition. IMCC has heretofore delivered to
Lender a consolidated balance sheet of IMCC as of September 30, 1996,
and the related statements of income, shareholders' equity and
statement of cash flows for the fiscal year then ended. All such
consolidated statements were prepared in accordance with GAAP and
fairly present the financial position of IMCC, as at the date thereof,
and the results of operations and statement of cash flows of IMCC, for
the year then ended. As of the Effective Date, Borrower will not have
any material Contingent Obligation or liability for taxes, long-term
lease or unusual forward or long-term commitment, which in accordance
with GAAP is not reflected in the foregoing statements, or in the notes
thereto.
D. Changes, etc. Since the date of the most recent balance
sheet of Borrower that has been delivered to Lender and the related
statements of income, shareholders' equity and statement of cash flow
for the period then ended, there has not been, and no event has
occurred that would or could reasonably be expected to result in, a
Material Adverse Change, other than changes expressly contemplated by
or disclosed in this Agreement or otherwise disclosed by Borrower to
Lender prior to the date hereof.
E. Title to Properties; Liens. Borrower has good, sufficient,
marketable and legal title to all Collateral pledged pursuant to this
Agreement by Borrower. The pledge and assignment of the Collateral
pursuant to this Agreement create a valid security interest in the
Collateral and the Lien on the Collateral created by this Agreement
will be a first priority Lien thereon, superior to all other Liens.
Except for the making of an Advance, the due filing of any financing
statement and any applicable continuation statement with respect to the
Collateral (and except for (i) delivery to Lender or its designee of
any Collateral as to which possession is the only method of perfecting
a
10
security interest in such Collateral or (ii) transfer of any book-entry
security in accordance with Section 313 of Article 8 of the UCC), no
further action need be taken in order to create and perfect the
security interest of Lender in all the Collateral.
F. Litigation; Adverse Facts. There is no action, suit,
proceeding or arbitration (whether or not purportedly on behalf of
Borrower) at law or in equity or before or by any Federal, state,
municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, pending or, to the
knowledge of Borrower, threatened against or affecting Borrower, or any
of its properties, or any proposed tax assessment and there is no basis
known to Borrower for any action, suit or proceeding which would, in
either case if adversely determined, cause a Material Adverse Change.
Borrower is not (i) in violation of any applicable law which violation
causes or could reasonably be expected to cause a Material Adverse
Change, or (ii) subject to or in default with respect to any final
judgment, writ, injunction, decree, rule or regulation of any court or
Federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, which
would or could reasonably be expected to cause a Material Adverse
Change. There is no action, suit, proceeding or investigation pending
or, to the knowledge of Borrower, threatened against or affecting
Borrower which questions the validity or the enforceability of this
Agreement or the Note.
G. Payment of Taxes. Borrower has filed all tax returns that
are required to be filed by Borrower (subject to any permissible
extension obtained pursuant to an extension request), and all taxes,
assessments, fees and other governmental charges upon Borrower as set
forth in such returns and upon its properties and assets which are due
and payable have been paid when due and payable, except to the extent
permitted by Section 6.3.
H. Other Agreements; Performance.
(i) Agreements. Borrower is not, and on any Advance
Date will not be, a party to or subject to any Contractual Obligation
or charter or other internal restriction that has or could reasonably
be expected to have a Material Adverse Effect.
(ii) Performance. Borrower is not, and on any Advance
Date will not be, in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions
contained in any Contractual Obligation of Borrower, and no condition
exists which, with the giving of notice or the lapse of time or both,
would constitute such a default, except where the consequences, direct
or indirect, of such default or defaults, if any, would not have a
Material Adverse Effect. To the best knowledge of Borrower, the other
parties to each Contractual Obligation of Borrower are not in default
thereunder, except where the consequences, direct or indirect, of such
default or defaults, if any, would not or could not reasonably be
expected to have a Material Adverse Effect.
11
I. Governmental Regulation. Borrower is not, and at the
Effective Date will not be, an "investment company" or a company
"controlled" by an investment company within the meaning of the
Investment Company Act of 1940, as amended, or subject to any Federal
or state statute or regulation limiting its ability to incur
Indebtedness for money borrowed.
J. Borrower's Securities Activities. Borrower is not, and at
the Effective Date will not be, engaged in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
Neither Borrower nor any agent acting on its behalf has taken any
action which might cause this Agreement or the Note to violate
Regulation X or any other regulation of the Board of Governors of the
Federal Reserve System as in effect now or as may hereafter be in
effect on the date of any Advance.
K. Employee Benefit Plans. Borrower is in compliance in all
material respects with all applicable provisions of ERISA and the
Internal Revenue Code of 1986 and the regulations and published
interpretations thereunder with respect to all Employee Benefit Plans.
Neither Borrower nor any of Borrower's ERISA Affiliates has engaged in
any transaction prohibited by Section 408 of ERISA or Section 4975 of
the Code.
L. Disclosure. No representation or warranty of Borrower
contained in this Agreement (other than any representation or warranty
contained in Section 2.2 or 2.3 hereof) or any other document,
certificate or written statement furnished to Lender by or on behalf of
Borrower for use in connection with the transactions contemplated by
this Agreement contains any untrue statement of a material fact or
omits to state a material fact (known to Borrower in the case of any
document not furnished by it) necessary in order to make the statements
contained herein or therein not misleading. As of the date of delivery
by Borrower to Lender of any report, statement or other certificate
pursuant to this Agreement, Borrower shall be deemed to certify that
any such report, statement or other certificate is accurate and
complete in all material respects. There is no fact known to Borrower
(other than matters of a general economic nature) which would have a
Material Adverse Effect and which has not been disclosed herein or in
such other documents, certificates and statements furnished to Lender
for use in connection with the transactions contemplated hereby.
M. Compliance with State Law. Borrower is in compliance with
the laws, regulations and rules of each State of the United States of
America, and with any other jurisdiction which may be applicable to
Borrower, to the extent necessary to ensure the enforceability of
Lender's security interest in the Collateral. Borrower has obtained all
permits and licenses necessary to carry on its business and operations
except in jurisdictions in which the failure to obtain a permit or
license has and will have no Material Adverse Effect.
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Section 2.2 Representations and Warranties Relating to Pledged
Loans. With respect to any Advance secured by Eligible Assets that consist of
Pledged Loans, Borrower represents and warrants to Lender that, as to each
Pledged Loan and the related Mortgage and Pledged Note:
A. The information set forth in the related Pledged
Loan Schedule and all other information or data furnished by, or on
behalf of, Borrower to Lender (i) is complete, true and correct in all
material respects, and Borrower acknowledges that Lender has not
verified the accuracy of such information or data and (ii) is identical
in all material respects to any related statement transmitted to
Custodian for the purpose of Custodian issuing the related Trust
Receipt.
B. As of the date of delivery by Borrower to Lender of
any report, statement or other certificate pursuant to this Agreement,
Borrower shall be deemed to certify that any such report, statement or
other certificate (including without limitation any collateral tapes or
reports delivered pursuant to Section 6.10) is complete, true and
correct in all material respect.
C. Borrower is the sole owner of record and holder of
the Pledged Loan. The Pledged Loan is not assigned or pledged, and
Borrower has good and marketable title thereto, and has full right and
authority to pledge or assign the Pledged Loan to Lender free and clear
of any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest, except for any warehouse lien to be
released concurrently with any Advance made by Lender to Borrower
hereunder.
D. With respect to any Pledged Loan, all payments
required to be made up to the Advance Date for the Pledged Loan under
the terms of the Mortgage Note have been made and credited within a
reasonable period of time. No payment required under any such Pledged
Loan is more than 89 days delinquent nor has any payment under the
Pledged Loan been delinquent at any time since the origination of the
Pledged Loan.
E. There are no defaults in complying with the terms
of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or
ground rents which previously became due and owing have been paid, or
an escrow of funds has been established in an amount sufficient to pay
for every such item which remains unpaid and which has been assessed
but is not yet due and payable. Except as expressly permitted by the
Seller's Guide, neither Borrower nor its respective designated servicer
has advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or
indirectly, for the payment of any amount required under the Pledged
Loan, except for interest accruing from the date of the Mortgage Note
or date of disbursement of the Pledged Loan proceeds, whichever is
greater, to the day which precedes by one month the Advance Date.
13
F. The terms of the Mortgage Note and the Mortgage
have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary,
to protect the interests of Lender and which has been delivered to
Lender. The substance of any such waiver, alteration or modification
has been approved by the issuer of any related primary mortgage
insurance policy and the title insurer, to the extent required by the
policy, and its terms are reflected on the Pledged Loan Schedule. No
Mortgagor has been released, in whole or in part, except in connection
with an assumption agreement approved by the issuer of any related
primary mortgage insurance policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part of the
Required Documents delivered to Lender or Custodian and the terms of
which are reflected in the Pledged Loan Schedule.
G. The Pledged Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, nor will the operation of any of the
terms of the Mortgage Note or the Mortgage, or the exercise of any
right thereunder, render either the Mortgage Note or the Mortgage
unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect
thereto.
H. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured
by a generally acceptable insurer against loss by fire, hazards of
extended coverage and such other hazards as are customary in the area
where the Mortgaged Property is located pursuant to insurance policies
conforming to the requirements of prudent lenders conducting business
in the area in which the Mortgaged property is located. If, upon
origination of the Pledged Loan, the Mortgaged Property was in an area
identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards (and such flood insurance has
been made available) a flood insurance policy meeting the requirements
of the current guidelines of the Federal Insurance Administration is in
effect which policy conforms to the requirements of prudent lenders
conducting business in the area in which the Mortgaged Property is
located. All individual insurance policies contain a standard mortgagee
clause naming Borrower or its designated servicer and its successors
and assigns as mortgagee, and all premiums thereon have been paid. The
Mortgage obligates the Mortgagor thereunder to maintain the hazard
insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Mortgagor's cost and
expense, and to seek reimbursement therefor from the Mortgagor. The
hazard insurance policy is the valid and binding obligation of the
insurer, is in full force and effect, and will be in full force and
effect and inure to the benefit of Lender upon the consummation of the
transactions contemplated by this Agreement. Borrower has not engaged
in, and has no knowledge of the Mortgagor's or any other party's having
engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or
the validity and binding effect of either.
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I. Any and all requirements of any federal, state or
local law including, without limitation, usury, truth-in-lending, real
estate settlement procedures, consumer credit protection, equal credit
opportunity or disclosure laws applicable to the Pledged Loan have been
complied with.
J. The Mortgage has not been satisfied, cancelled,
subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any
such release, cancellation, subordination or rescission.
K. The Mortgaged Property is located in the state
identified in the Pledged Loan Schedule and consists of a single parcel
of real property with a detached single family residence erected
thereon, or a two- to four-family dwelling, or an individual
condominium unit in a low-rise condominium project, or an individual
unit in a planned unit development, provided, however, that any
condominium unit or planned unit development shall conform with the
requirements set forth in the Seller's Guide regarding such dwellings
and that no residence or dwelling is a mobile home or a manufactured
dwelling unless it has been permanently affixed in accordance with the
laws of the applicable jurisdiction. At no time shall more than two
percent (2%) of the aggregate outstanding amount of Advances be secured
by Pledged Loans with respect to which the related Mortgaged Property
is used for mixed use purposes (i.e. commercial/residential purposes).
L. The Mortgage is a valid, subsisting and enforceable
first lien [or second lien] on the Mortgaged Property, including all
buildings on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems
located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The
lien of such Mortgage is subject only to (1) the lien of current real
property taxes and assessments not yet due and payable, (2) covenants,
conditions and restrictions, rights of way, easements and other matters
of the public record as of the date of recording acceptable to mortgage
lending institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of the
Pledged Loan and (I) referred to or to otherwise considered in the
appraisal made for the originator of the Pledged Loan or (II) which do
not adversely affect the appraised value of the Mortgaged Property set
forth in such appraisal, and (3) other matters to which like properties
are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related Mortgaged
Property.
M. Any security agreement, chattel mortgage or
equivalent document related to and delivered in connection with the
Pledged Loan establishes and creates a valid, subsisting and
enforceable first lien and first priority security interest on the
property described therein and Borrower has full right to assign or
pledge the same to
15
Lender. Except as expressly permitted by the Seller's Guide, the
related Mortgaged Property was not, as of the date of origination of
the Pledged Loan, subject to a mortgage, deed of trust, deed to secured
debt or other security instrument creating a lien subordinate to the
lien of the Mortgage.
N. The Mortgage Note and the Mortgage are genuine, and
each is the legal, valid and binding obligation of the maker thereof
enforceable in accordance with its terms. All parties to the Mortgage
Note and the Mortgage had legal capacity to enter into the Pledged Loan
and to execute and deliver the Mortgage Note and the Mortgage, and the
Mortgage Note and the Mortgage have been duly and properly executed by
such parties.
O. The proceeds of the Pledged Loan have been fully
disbursed and there is no requirement for future advances thereunder,
and any and all requirements as to completion of any on-site or
off-site improvements and as to disbursements of any escrow funds
therefor have been duly complied with. All costs, fees and expenses
incurred in making or closing the Pledged Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of
any amounts paid or due under the Mortgage Note or Mortgage.
P. All parties that have had any interest in the
Pledged Loan, whether as mortgagee, assignee, pledgee or otherwise, are
or, during the period in which they held and disposed of such interest,
were (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is
located, and (2) either (a) organized under the laws of such state, or
(b) qualified to do business in such state, or (c) federal savings and
loan associations or national banks having principal offices in such
state, or (d) not doing business in such state.
Q. The Pledged Loan has a loan-to-value ratio that is
in compliance with the requirements set forth in the Seller's Guide.
All provisions of any primary mortgage insurance policy have been and
are being complied with, such policy is in full force and effect, and
all premiums due thereunder have been paid. Any Pledged Loan subject to
a primary mortgage insurance policy obligates the Mortgagor thereunder
to maintain the primary mortgage insurance policy and to pay all
premiums and charges in connection therewith.
R. The Pledged Loan is covered by either (1) an
attorney's opinion of title and abstract of title, the form and
substance of which are acceptable to mortgage lending institutions
making mortgage loans in the area where the Mortgaged Property is
located or (2) an ALTA lender's title insurance policy or other
generally acceptable form of policy or insurance acceptable to FNMA or
FHLMC, issued by a title insurer acceptable to FNMA or FHLMC and
qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring Borrower or its designated Servicer, its
successors and assigns, as to the first priority lien of the Mortgage
in the original
16
principal amount of the Pledged Loan, subject only to the exceptions
contained in clauses (1), (2) and (3) of paragraph (K) of this Section
2.2. Borrower or its designated Servicer is the sole insured of such
lender's title insurance policy, and such lender's title insurance
policy is in full force and effect and will be in force and effect upon
the consummation of the transactions contemplated by this Agreement. No
claims have been made under such lender's title insurance policy, and
no prior holder of the Mortgage, including Borrower, has done, by act
or omission, anything that would impair the coverage of such lender's
title insurance policy.
S. There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no
event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach,
violation or event of acceleration. Neither Borrower nor its respective
predecessors have waived any material default, breach, violation or
event of acceleration.
T. There are no mechanics' or similar liens or claims
which have been filed for work, labor or material, and no rights are
outstanding that under the law could give rise to such liens, affecting
the related Mortgaged Property which are or may be liens prior to, or
equal or coordinate with, the lien of the related Mortgage.
U. All improvements which were considered in
determining the appraised value of the Mortgaged Property lay wholly
within the boundaries and building restriction lines of the Mortgaged
Property and no improvements on adjoining properties encroach upon the
Mortgaged Property. No improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or
regulation.
V. The Pledged Loan was originated by Borrower in
strict compliance with the requirements set forth in the Seller's
Guide. The Mortgage Note is payable in accordance with the requirements
set forth in the Seller's Guide, with an outstanding principal balance
of no more than $1 million (unless Lender has given Borrower its prior
written consent to any Pledged Loan in excess of such amount).
W. The Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of
the benefits of the security provided thereby, including, (1) in the
case of a Mortgage designated as a deed of trust, by trustee's sale,
and (2) otherwise by judicial foreclosure. Except where available under
applicable law, there is no homestead or other exemption available to a
Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage.
17
X. The Pledged Loan was underwritten in accordance
with the requirements set forth in Seller's Guide. Any such Pledged
Loan is in conformity with the underwriting standards set forth in the
Seller's Guide, and Borrower has provided Lender with a true and
correct copy of Seller's Guide. There has been no change or amendment
to Seller's Guide since the date of the most recent copy of Seller's
Guide that was delivered to Lender.
Y. The Mortgaged Property is lawfully occupied under
applicable law. All inspections, licenses and certificates required to
be made or issued with respect to all occupied portions of the
Mortgaged Property and, with respect to the use and occupancy of the
same, including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities.
Z. The Mortgage Note is not and has not been secured
by any collateral except the lien of the corresponding Mortgage and the
security interest of any applicable security agreement or chattel
mortgage referred to in (K) above.
AA. In the event the Mortgage constitutes a deed of
trust, a trustee, duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in
the Mortgage, and no fees or expenses are or will become payable by
Lender to the trustee under the deed of trust, except in connection
with a trustee's sale after default by the Mortgagor.
BB. Borrower has no knowledge of any circumstances or
conditions with respect to the Mortgage, the Mortgaged Property, the
Mortgagor or the Mortgagor's credit standing that can reasonably be
expected to cause private institutional investors to regard the Pledged
Loan as an unacceptable investment, cause the Pledged Loan to become
delinquent or adversely affect the value or marketability of the
Pledged Loan.
CC. The Required Documents and any other documents
required to be delivered under this Agreement have been delivered to
Custodian; provided, however, with respect to any Wet Mortgage Loan,
the related Required Documents shall be delivered in accordance with
the Custodial Agreement.
DD. If the Mortgaged Property is a condominium unit or
a unit in a planned unit development, other than a de minimis planned
unit development, such condominium or planned unit development project
satisfies the requirements set forth in the Seller's Guide and the
representations and warranties with respect to such condominium or
planned unit development have been made and remain true and correct in
all respects.
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EE. The Assignment of Mortgage is in recordable form
and is acceptable for recording under the laws of the jurisdiction in
which the Mortgaged Property is located and constitutes the legal,
valid and binding assignment of such Mortgage from Borrower.
FF. The Mortgage contains an enforceable provision for
the acceleration of the payment of the unpaid principal balance of the
Pledged Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the mortgagee
thereunder.
GG. If the Pledged Loan contains provisions pursuant to
which monthly payments of principal and interest are paid or partially
paid with funds deposited in any separate account established by
Borrower, the Mortgagor or anyone on behalf of the Mortgagor, or paid
by any source other than the Mortgagor, such provisions satisfy the
requirements of the Seller's Guide.
HH. Any future advances made prior to the Advance Date
have been consolidated with the outstanding principal amount secured by
the Mortgage, and the secured principal amount, as consolidated, bears
a single interest rate and single repayment term. The lien of the
Mortgage securing the consolidated principal amount is expressly
insured as having first lien or second lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to FNMA and
FHLMC. The consolidated principal amount does not exceed the original
principal amount of the Pledged Loan.
II. The Mortgaged Property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property
as security for the Pledged Loan or the use for which the premises were
intended.
JJ. The origination and collection practices used with
respect to the Pledged Loan have been in accordance with Seller's Guide
and generally accepted servicing practices in the industry, and have
been in all respects legal and proper. With respect to escrow deposits
and escrow payments, all such payments are in the possession of
Borrower or its designated servicer and there exist no deficiencies in
connection therewith for which customary arrangements for repayment
thereof have not been made. No escrow deposits or escrow payments or
other charges or payments due the related Borrower have been
capitalized under the Mortgage or the Mortgage Note.
KK. Unless expressly waived by Lender in its sole
discretion, the aggregate principal Dollar amount of outstanding
Advances secured by Wet Mortgage Loans does not at any one time exceed
the lesser of (i) $25 million and (ii) ten percent (10%) of the total
principal Dollar amount of the prior three-month average of outstanding
Advances under this Loan Agreement; provided, however, that Borrower
19
shall have 60 days from the date of the initial non-compliance with
this Section 2.2 KK(ii) to satisfy such percentage limitation
requirement.
Section 2.3 Representations and Warranties Relating to Pledged
MBS. In the case of any Advance secured by Collateral that consists of Pledged
MBS, Borrower represents and warrants to Lender that, as to each Pledged MBS:
A. The information set forth in the related Pledged
MBS Schedule and all other information or data furnished by, or on
behalf of, Borrower to Lender (i) is complete, true and correct in all
material respects, and Borrower acknowledges that Lender has not
verified the accuracy of such information or data; and (ii) is
identical in all material respects to any related statement transmitted
to Custodian for the purpose of Custodian issuing the related Trust
Receipt.
B. Borrower is the sole owner of record and holder of
the Pledged MBS. The Pledged MBS is not assigned or pledged, and
Borrower has good and marketable title thereto, and has full right and
authority to pledge or assign the Pledged MBS to Lender pursuant to
this Agreement free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest, and subject
to no interest or participation of, or agreement with, any other party,
except with respect to any restrictions or limitations relating to the
pledge or assignment of the Pledged MBS set forth in the documents
providing for the issuance of the Pledged MBS.
C. The documents contained in the Pledged MBS File
and any other documents required to be delivered under this Agreement
have been delivered to Lender or its designee.
D. Unless expressly waived by Lender in its sole
discretion, the aggregate principal Dollar amount of outstanding
Advances secured by Pledged MBS does not at any one time exceed the
lesser of (i) $50 million and (ii) twenty percent (20%) of the total
principal Dollar amount of the prior three-month average of outstanding
Advances under this Loan Agreement; provided, however, that Borrower
shall have 60 days from the date of the initial non-compliance with
this Section 2.3 D(ii) to satisfy such percentage limitation
requirement.
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ARTICLE III
BORROWING AND REPAYMENTS; NOTE
Section 3.1 Certifications; Advances.
A. Certifications. On each Advance Date, Borrower shall be
deemed to certify that (i) the representations and warranties of
Borrower contained herein are accurate and complete in all material
respects to the same extent as though made on and as of the date of
such Advance; (ii) no Event of Default or Potential Event of Default
has occurred and is continuing hereunder or will result from the
proposed borrowing; (iii) Borrower has delivered or will cause to be
delivered to Lender all documents required to be delivered to Lender
pursuant to this Agreement; and (iv) Borrower has performed in all
material respects all agreements and satisfied all conditions hereunder
provided to be performed or satisfied by it on or before the date of
such Advance.
B. Advances.
(i) With respect to any Advance to be secured by
Pledged MBS, not later than 5:00 P.M. New York City
time on the date that is five Business Days prior to
the related Advance Date, Borrower may request that
Lender, by notice in the form of a Request for
Advance, make an Advance to or for the account of
Borrower.
(ii) With respect to any Advance to be secured by
Mortgage Loans, not later than 5:00 P.M. New York
City time on the date that is one Business Day prior
to the related Advance Date, Borrower may request
that Lender, by notice in the form of a Request for
Advance, make an Advance to or for the account of
Borrower. In connection with any such Requests for
Advance, Lender shall have received the related Trust
Receipt not later than 2:00 P.M. New York City time
on the related Advance Date.
(iii) With respect to any Advance to be secured by
Wet Mortgage Loans, not later than 5:00 P.M. New York
City time on the date that is one Business Day prior
to the related Advance Date, Borrower may request
that Lender (by notice in the form of a Request for
Advance which specifies the anticipated amount of Wet
Mortgage Loans to be pledged by Borrower) make an
Advance to or for the account of Borrower. In
connection with any Advance Request Confirmation
relating to Wet Mortgage Loans, not later than 10:00
A.M. New York City time on the related Advance Date,
Lender shall have received (A) from Borrower, a final
Request for Advance, and (B) from Custodian, the
related Wet Loan List.
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(iv) Lender may, in its sole discretion, by
confirmation in the form of an Advance Request
Confirmation, agree to make Advances to or for the
account of Borrower in amounts not to exceed in the
aggregate the aggregate Collateral Value of the
related Eligible Assets. If all conditions set forth
in Section 4.1 and 4.2 of this Agreement have been
satisfied, Lender may make an Advance to Borrower by
causing an amount of immediately available funds
equal to the amount of the proposed Advance to be
paid in accordance with Borrower's wire instructions.
Lender will send, via facsimile transmission, a copy
of the Advance Request Confirmation updated to
reflect any such Advance, the applicable Interest
Rate, the Advance Date, the Interest Payment Date(s),
the Interest Determination Date(s) and the Advance
Maturity Date.
(v) Notwithstanding any provision hereof to the
contrary, Borrower may provide Lender with additional
Requests for Advances on any Business Day.
C. Netting of Payments. To the extent that an Advance is made
by Lender to Borrower on an Interest Payment Date or an Advance
Maturity Date, Lender shall calculate the net amount payable and shall
send Borrower a confirmation detailing Lender's calculation and setting
forth the net amount to be received or paid by Borrower, including,
without limitation, amounts payable under the Note. Without limiting
any rights or remedies of Lender hereunder, any interest due and
payable shall be excluded from any netting calculation by Lender
pursuant to this Section 3.1.C; provided, however; that Borrower shall
remit any such interest, in immediately available funds, to Lender not
later than one Business Day after the related Interest Payment Date.
D. Advances Optional. Notwithstanding any other provision of
this Agreement to the contrary, the determination to make any Advance
to or for the account of Borrower is subject to the approval of Lender
in its sole discretion. Lender may, in its sole discretion, reject any
Eligible Asset from inclusion as Collateral for an Advance for any
reason.
3.2 Market Value; Margin Maintenance.
A. Market Value. The Market Value of any Eligible Asset shall
be as determined, from time to time, by Lender in its sole discretion
using reasonable business judgment taking into consideration the level
of prevailing interest rates, the financial condition of Borrower, the
characteristics of the related Collateral and general market
conditions; provided, however, that (i) any Wet Mortgage Loan with
respect to which the related Required Documents have not been certified
by the Custodian within the time limitations set forth in the Custodial
Agreement) shall have a Market Value of $0; (ii) any Pledged Loan with
respect to which the related Mortgagor has been delinquent in payment
of principal or interest for more than 60 days shall have a Market
Value of not
22
more than 50% of the then-outstanding principal balance of such Pledged
Loan; (iii) any Pledged Loan with respect to which the related
Mortgagor has been delinquent in payment of principal or interest for
more than 89 days shall have a Market Value of $0; (iv) any Pledged
Loan that has been pledged by Borrower to Lender as Collateral for more
than 210 days shall have a Market Value of $0; (v) any Pledged Loan or
Pledged MBS that does not conform in any material respect to the
representations, warranties and covenants set forth in Sections 2.2 or
2.3, respectively, shall have a Market Value of $0; and (vi) any
Eligible Asset with respect to which Lender's security interest therein
shall become impaired or unenforceable shall have a Market Value of $0.
B. Margin Maintenance. If at any time the aggregate Collateral
Value of all Eligible Assets subject to Advances is less than the total
outstanding amount of such Advances (a "Margin Deficit"), then Lender
may by notice to Borrower delivered not later than 11:00 a.m. (New York
City time) on a Business Day (a "Margin Call") require Borrower to
transfer to Lender cash or additional Collateral in an amount which is
not less than the amount of the Margin Deficit. Any Margin Call made by
Lender to Borrower after 11:00 a.m. (New York City time) shall be
deemed to have been made on the next succeeding Business Day. In the
event that Borrower fails to transfer the requisite amount of
additional Collateral to Lender one Business Day after the date of any
such Margin Call from Lender as provided herein, the Interest Rate
applicable to the Advances shall increase by the Incremental Interest
Rate. If Borrower thereafter fails to transfer the requisite additional
Collateral to Lender within 2 Business Days after application of the
Incremental Interest Rate as provided herein, the Interest Rate
applicable to the Advances shall increase by the Mandatory Repayment
Interest Rate.
3.3 Note; Interest.
A. Note.
(i) Borrower shall execute and deliver to Lender,
not later than the Effective Date, the Note.
(ii) Upon repayment in full of all amounts due and
payable under the Note, Lender shall promptly cancel the Note and
return the cancelled Note to Borrower.
B. Rate of Interest. Subject to subsection E of this Section
3.3, each Advance shall bear interest on the unpaid principal amount
thereof from the related Advance Date through maturity (whether by
acceleration or otherwise) at a rate per annum equal to the applicable
Interest Rate. The Interest Rate shall be adjusted on each Interest
Determination Date to account for any changes in LIBOR.
23
C. Interest Payments. Subject to subsection E of this Section
3.3, the interest accrued on all Advances during any Interest Period
shall be payable on the Interest Payment Date immediately following the
end of such Interest Period.
D. Post-Maturity Interest. Any principal amount of any Advance
not repaid by Borrower when due and, to the extent permitted by
applicable law, any interest payments on such Advance or any Breakage
Fee not paid when due or within any applicable grace period, in each
case whether at stated maturity, by notice of prepayment, by
acceleration or otherwise, shall thereafter bear interest payable on
demand, at Lender's sole discretion, at a default interest rate equal
to 300 basis points above the applicable Interest Rate.
E. Computation of Interest. Interest on each Advance shall be
computed on the basis of a 360-day year and the actual number of days
elapsed in the period during which it accrues. In computing interest on
each Advance, the Advance Date shall be included and the Advance
Maturity Date shall be excluded.
F. Breakage Fee. With respect to any Advance Request
Confirmation, in the event that (i) Borrower declines to accept payment
of the related Advance or (ii) Lender does not receive the related
Trust Receipt prior to 2:00 P.M. New York City time on the related
Advance Date, then, notwithstanding that no Advance may have been made
to Borrower, Borrower shall pay to Lender a Breakage Fee. Any such
Breakage Fee shall be payable to Lender on the Interest Payment Date
immediately following the accrual of any such Breakage Fee.
3.4 Repayments and Payments.
A. Repayment. Borrower shall repay the entire amount
outstanding of each Advance on the related Advance Maturity Date.
B. Manner and Time of Payment. All payments of principal,
interest and fees hereunder and under the Note shall be made in
immediately available funds and delivered to Lender in accordance with
its wire transfer instructions as set forth in the form of Exhibit F
hereto, not later than 3:00 p.m. (New York City time) on a Business
Day; funds received by Lender after that time shall be deemed to have
been paid by Borrower on the next succeeding Business Day.
C. Payments on Non-Business Days. Whenever any payment to be
made hereunder or under the Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in
the computation of the payment of interest hereunder or under the Note.
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ARTICLE IV
CONDITIONS TO THE ADVANCES
4.1 Conditions to the Effective Date. The obligation of Lender
to make or maintain any Advance on or after the Effective Date is, in addition
to the conditions precedent specified in Section 4.2, subject to prior or
concurrent satisfaction of the following conditions:
A. On or before the Effective Date (unless otherwise specified
herein), Borrower shall deliver to Lender:
(i) certified copies of the Articles of Incorporation
of Borrower, with all amendments thereto, together with a good standing
certificate from the Secretary of State of the State of Delaware, each
to be dated within 5 days of the Effective Date;
(ii) copies of the Bylaws of Borrower with all
amendments thereto, certified as of the Effective Date or as soon as
practicable thereafter by the corporate secretary or an assistant
secretary;
(iii) resolutions of the Board of Directors of
Borrower and approving and authorizing the execution, delivery and
performance of this Agreement, and approving and authorizing the
execution, delivery and payment of the Note, certified as of the
Effective Date by the corporate secretary or an assistant secretary;
(iv) signature and incumbency certificates of the
respective officer of Borrower executing this Agreement and the Note
and of the representatives authorized to request the Advance, to
transfer funds, and to make any payments on the Obligations hereunder;
(v) executed copies of this Agreement and the
executed Note with appropriate insertions on any Advance Schedule; and
(vi) such executed financing statements as Lender may
require for filing pursuant to the Uniform Commercial Code.
B. Lender and its counsel shall have received one or more
favorable written opinions of Borrower's counsel, equivalent in form
and substance to Exhibit H hereto, satisfactory to Lender and its
counsel, dated as of the Effective Date.
C. Borrower shall have performed in all material respects all
agreements which this Agreement provides shall be performed on or
before the Effective Date.
D. All actions and documents required to create and perfect
the first priority security interest and Liens in the Collateral shall
have been duly authorized and executed
25
and delivered or taken (all in a manner satisfactory to Lender and its
counsel) and all filings with governmental agencies shall have been
made or taken and completed.
E. Lender shall have received written instructions from
Borrower regarding the wire instructions for all Advances.
4.2 Conditions to All Advances. At and as of each Advance
Date, the obligation of Lender to make any Advance is subject to the
following further conditions precedent:
(i) the representations and warranties of Borrower
contained herein shall be accurate and complete to the same extent as
though made on and as of that date;
(ii) no event shall have occurred and be continuing
or would result from the consummation of the proposed Advance which
would constitute an Event of Default or a Potential Event of Default;
(iii) Borrower shall have performed all agreements
and satisfied all conditions which this Agreement provides shall be
performed by it on or before the related Advance Date;
(iv) no order, judgment or decree of any court,
arbitrator or governmental authority shall purport to enjoin or
restrain Lender from making that Advance;
(v) there shall not be pending or, to the knowledge
of Borrower threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Borrower or any
property of Borrower, which has not been disclosed by such Borrower to
Lender in writing prior to the execution of this Agreement or prior to
the making of the last preceding Advance, and there shall have occurred
no development not disclosed by Borrower to Lender in writing prior to
the execution of this Agreement or prior to the making of the last
preceding Advance in any such action, suit, proceeding, governmental
investigation or arbitration so disclosed, which, in either event, in
the opinion of Lender, would reasonably be expected (a) to have a
Material Adverse Effect or, (b) to impair the ability of Borrower to
perform the Obligations or of Lender to enforce the Obligations;
(vi) (A) on or prior to the related Advance Date,
Borrower shall have delivered to Custodian, for its review and
certification, any Required Documents in accordance with the Custodial
Agreement; and (B) not later than 2:00 P.M. New York City time on the
related Advance Date, Lender shall have received the Trust Receipt for
any Eligible Assets other than Wet Mortgage Loans;
26
(vii) With respect to any Advance to be secured by a
Wet Mortgage Loan, Lender shall have received by not later than 2:00
P.M. New York City time on
the related Advance Date, a final Wet Loan List from Custodian.
(viii) all actions and documents required to create
and perfect the first priority security interest and Liens in the
Collateral shall have been duly authorized and executed and delivered
(to Lender, if applicable) or taken, in each case in a manner
satisfactory to Lender and its counsel; and
(ix) all filings with respect to the Collateral with
governmental agencies shall have been made or taken and completed.
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ARTICLE V
SECURITY
5.1 Grant of Security Interest.
A. Security Interest. To secure the payment of the Advances
and the performance of the other Obligations, Borrower pledges and
hypothecates to Lender and grants a first priority security interest in
favor of Lender, in all of Borrower's right, title and interest in and
to the Collateral and (ii) pledges and hypothecates to Lender and
grants a security interest in favor of Lender, in all of Borrower's
property at any time held for any purpose by Lender or any affiliate of
Lender, including, but not limited to, property held in any other
accounts of Borrower with Lender or any affiliate of Lender, whether or
not Lender has made advances in connection with such property. Lender
may, without notice, transfer and retransfer from time to time any
money or other property between any such accounts.
B. Pledged Loans and Pledged Loan Schedules. With respect
to any Advance secured by Collateral that consists of Pledged Loans:
(i) the Pledged Loans shall be identified by
Borrower on a Pledged Loan Schedule attached to the related Request for
Advance;
(ii) each Pledged Loan Schedule shall specify all
required information and shall identify the type of the related Pledged
Loan as either a [first-lien] [second lien] Mortgage Loan or Wet
Mortgage Loan, as the case may be;
(iii) all Required Documents shall be delivered to
the Custodian and held by the Custodian pursuant to the terms of the
Custodial Agreement; and
(iv) the Pledged Loans shall be serviced for the
benefit of Lender by Borrower or Borrower's agent in accordance with
Accepted Servicing Practices. "Accepted Servicing Practices" shall mean
those servicing practices of prudent mortgage servicers, servicing
mortgage loans of the same type as the Pledged Loans in those
jurisdictions in which the related Mortgage Properties are located, but
in no event shall such standards or practices be lower than the
standards and practices set forth in the Seller's Guide.
C. Delivery to Custodian of Required Documents. With respect
to any Advance secured by Collateral that consists of Pledged Loans,
the transfer of such Pledged Loans for the purposes of this Section 5.1
shall include the delivery to Lender or its designee of the Required
Documents with respect to each Pledged Loan.
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D. Pledged MBS and Pledged MBS Schedule. With respect to any
Advance secured by Collateral that consists of an Pledged MBS:
(i) the Pledged MBS shall be identified by Borrower on
an Pledged MBS Schedule attached to the related Request for
Advance, which Pledged MBS Schedule shall specify all
information reasonably required by Lender; and
(ii) the documents contained in the Pledged MBS File
shall be delivered by Borrower to Lender or its designee and
held by Lender or its designee.
E. Delivery to Lender of Pledged MBS File. With respect to any
Advance secured by Collateral that consists of an Pledged MBS, the
transfer of such Pledged MBS of the purposes of this Section 5.1 shall
include the delivery to Lender or its designee of the following
documents (the "Pledged MBS File") with respect to each Pledged MBS:
(i) the Pledged MBS and, if applicable, the
CUSIP number;
(ii) a duly executed bond or securities power in
blank;
(iii) if applicable, transferor certificate; and
(iv) appropriate corporate resolutions.
Lender agrees to execute and deliver any documents that are required
under the agreements providing for the issuance of such Pledged MBS in
connection with the pledge thereof hereunder, including, if applicable,
an investment letter for such Pledged MBS.
5.2 Release and Substitution of Collateral. Borrower may
obtain the release from Lender of the security interest in and lien on all or
any part of the Collateral either: (i) by paying to Lender as a repayment in
accordance with Section 3.4 on the Advance Maturity Date the amount of the
Advance outstanding with respect to such Collateral to be so released, or (ii)
from time to time by substituting new Collateral of an equal or greater
Collateral Value for existing Collateral pursuant to this Section 5.2. Any such
release of the security interest in and lien on all or any part of the
Collateral shall be evidenced by the execution and delivery by Lender of
appropriate documentation to evidence such release, including without limitation
Borrower's current form of Repayment and Receipt attached as Exhibit I to the
Custodial Agreement.
5.3 Receipt of Pledged Loan Income and Pledged MBS Income. So
long as no Potential Event of Default or an Event of Default shall have occurred
and be continuing, Borrower shall receive and retain for its own account all
principal and interest collected by Borrower from the Pledged Loans (the
"Pledged Loan Income") and all distributions received
29
by Borrower from the Pledged MBS (the "Pledged MBS Income"). Upon such receipt
by Borrower all such Pledged Loan Income and Pledged MBS Income shall be
released from the security interest and lien of Lender hereunder and shall no
longer constitute Collateral hereunder.
If a Potential Event of Default or an Event of Default shall
have occurred and be continuing, Lender may, in its sole discretion, (i) require
that Borrower establish one or more segregated trust accounts, that shall be
maintained for the benefit of Lender with a state or federally chartered
depository institution selected by Lender, into which all Pledged Loan Income
shall be deposited within two (2) Business Days of receipt by Borrower and all
Pledged MBS Income shall be deposited upon distribution, and (ii) terminate
Borrower as the servicer of the Pledged Loans, with or without cause, and in
either case without payment of any termination fee or compensation for such
servicing rights.
5.4 Lender as Attorney-in-Fact. Lender is hereby appointed the
attorney-in-fact of Borrower for the purpose of carrying out the provisions of
this Agreement and taking any action and executing any instruments with respect
to the Collateral hereunder that Lender may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. Without limiting the generality of the
foregoing, Lender shall have the right and power during the occurrence and
continuation of an Event to Default (i) to receive, endorse and collect all
checks made payable to the order of Borrower representing any payment on account
of the principal of or interest on any Pledged Loans and any distribution on any
Pledged MBS; and (ii) to execute, in connection with any sale as provided for in
Section 7.1 hereof, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
5.5 Security for Obligations. This Agreement shall create a
continuing security interest in the Collateral and shall (i) remain in full
force and effect until payment in full of all Obligations, (ii) be binding upon
Borrower, its successors and assigns, and (iii) inure to the benefit of Lender
and its successors, transferees and assigns. Upon the payment in full of the
Obligations, Borrower shall be entitled to the return, upon its request and at
its expense, of such of the Collateral as shall not have been sold or otherwise
applied in connection with an Event of Default pursuant to the terms hereof.
5.6 Joint and Several Liability of Borrowers. The Borrowers
agree to be jointly and severally liable for the obligations of each Borrower
hereunder and all representations, warranties, covenants and agreements made by
or on behalf of any Borrower in this Agreement, any Advance Request Confirmation
or any other document, instrument or certificate delivered pursuant hereto shall
be deemed to have been made by each Borrower, jointly and severally. The joint
and several obligations of each of IMCC, IMCA, IMC LP, IMCI and CWB hereunder
are absolute, unconditional, irrevocable, present and continuing and, with
respect to any Obligation to Lender, is a guaranty of performance of such
Obligation and is in no way conditional or contingent upon the continued
existence of any Borrower and is not and will not be subject to any setoffs by
any Borrower. Any notice or other communication
30
provided to one Borrower pursuant to this Agreement shall be deemed to have been
given to all Borrowers and failure to be sent any notice or communication
contemplated hereby shall not relieve a Borrower from its joint and several
liability for the Obligations of any other Borrower hereunder.
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ARTICLE VI
COVENANTS OF BORROWER
Borrower covenants and agrees that until the payment in full
of all Obligations, unless Lender shall otherwise give express prior written
consent, each Borrower will perform all covenants (other than those covenants
specified in Section 6.1(i)-(iii), 6.6 and 6.7 to be solely performed by IMCC)
in this Article VI.
6.1 Financial Statements and Other Reports. Borrower will
maintain a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP. Borrower will deliver, or cause to be delivered, to Lender
the following:
(i) as soon as practicable and in any event within 60
days after the end of each calendar quarter, a balance sheet of IMCC as
at the end of such period and the related statements of income,
shareholders' equity and statement of cash flows of IMCC for such
quarter and for the period from the beginning of the current fiscal
year to the end of such quarter, setting forth in each case in
comparative form the figures for the corresponding periods of the
previous fiscal year, all in reasonable detail and certified by the
chief financial officer or vice president of finance of IMCC that they
fairly present the financial condition and results of operations of
IMCC, subject to changes resulting from audit and normal year-end
adjustments as at the end of and for the period covered thereby. The
delivery by IMCC to Lender of IMCC's Form 10-Q for such period shall
satisfy the requirements of this subdivision (i);
(ii) as soon as practicable and in any event within
105 days after the end of each fiscal year, a balance sheet of IMCC as
at the end of such fiscal year and the related statements of income,
shareholders' equity and statement of cash flows of Borrower for such
fiscal year, setting forth in each case in comparative form the figures
for the previous year, all in reasonable detail and certified by the
chief financial officer or vice president of finance of IMCC and
accompanied by a report thereon of independent certified public
accountants of recognized national standing selected by Borrower and
satisfactory to Lender which report shall state that such financial
statements present fairly the financial position of Borrower as at the
dates indicated and the results of its operations and statement of cash
flows for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years (except as otherwise stated therein)
and that the examination by such accountants in connection with such
financial statements has been made in accordance with generally
accepted auditing standards. The delivery by IMCC to Lender of IMCC's
Form 10-K for such period shall satisfy the requirements of this
subdivision (ii);
(iii) concurrent with the delivery of the applicable
financial statements specified in subdivision (i) and (ii) above,
Borrower will deliver to Lender a consolidated
32
balance sheet as of the same dates as the financial statements
specified in subdivision (i) and (ii) above, prepared in accordance
with GAAP.
(iv) together with each delivery of consolidated
financial statements of IMCC pursuant to subdivisions (i), (ii) and
(iii) above, a Compliance Certificate, (a) stating that the signers of
the Compliance Certificate have reviewed the terms of this Agreement
and the Note and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and
condition of Borrower during the accounting period covered by such
financial statements and that such review has not disclosed the
existence during or at the end of such accounting period, and that the
signers do not have knowledge of the existence as at the date of the
Compliance Certificate, of any condition or event which constitutes an
Event of Default or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
Borrower has taken, is taking and proposes to take with respect thereto
and (b) demonstrating in reasonable detail compliance during and at the
end of such accounting periods with the restrictions contained in
Section 6.7;
(v) promptly upon becoming available to Borrower,
copies of any press releases issued by Borrower; and
(vi) promptly upon any officer of Borrower obtaining
knowledge (a) of any condition or event which constitutes an Event of
Default or Potential Event of Default, (b) that any Person has given
any notice to Borrower or taken any other action with respect to a
claimed default or event or condition of the type referred to in
subsection B of Section 7.1, or (c) of the institution of any
litigation involving an alleged liability of Borrower equal to or
greater than $10 million, or any adverse determination in any
litigation involving a potential liability of Borrower equal to or
greater than $5 million, or any adverse determination in any litigation
which would or could reasonably be expected to have a Material Adverse
Effect, or the validity or enforceability of this Agreement or
Borrower's ability to perform the Obligations, an Officers' Certificate
specifying the nature and period of existence of any such condition or
event, or specifying the notice given or action taken by such holder or
Person and the nature of such claimed default, Event of Default,
Potential Event of Default, event or condition, and what action
Borrower has taken, is taking and proposes to take with respect
thereto.
6.2 Existence; Franchises. Borrower will at all times preserve
and keep in full force and effect its corporate existence and all rights,
licenses and franchises material to its business.
6.3 Payment of Taxes and Claims. Borrower will pay all taxes,
assessments and other governmental charges imposed upon it or any of its
properties or assets before any penalty accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
may become a Lien upon any of its properties or assets, prior to the time when
any penalty
33
or fine shall be incurred with respect thereto; provided that no such charge or
claim need be paid if being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor.
6.4 Inspection. Borrower will permit any authorized
representatives of Lender to visit and inspect any of the properties of Borrower
including its financial and accounting records, and to make copies and take
extracts therefrom, and to discuss its affairs, finances and accounts with its
officers and, with the permission of Borrower (which may not be unreasonably
withheld), its independent public accountants, all upon reasonable notice and at
such reasonable times during normal business hours and as often as may be
reasonably requested; provided, however, that no permission of Borrower shall be
required in order to discuss Borrower's affairs, finances and accounts during an
Event of Default or Potential Event of Default; provided, further, that Lender
shall use any non-public information obtained during such visit or inspection
only for the purposes contemplated by this Agreement and shall not disclose any
such non-public information to any person without Borrower's prior consent.
6.5 Compliance with Laws, etc. Borrower will exercise all due
diligence in order to comply with the requirements of all applicable laws,
rules, regulations and orders of any governmental authority, noncompliance with
which would have a Material Adverse Effect.
6.6 Restriction on Fundamental Changes. Borrower will not,
without the prior written consent of Lender, enter into any transaction of
merger or consolidation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or, except in the ordinary course of business,
convey, sell, lease, transfer or otherwise dispose of, in one transaction or a
series of transactions, all or any substantial part of its business, property or
assets, whether now owned or hereafter acquired unless (A) any successor entity
(i) is a corporation organized under the laws of the United States or any
jurisdiction thereof, (ii) expressly assumes all Obligations of Borrower under
this Agreement and (iii) is solvent and (B) no Event of Default existed
immediately before or would exist after the consummation of such transaction,
merger or consolidation.
6.7 Financial Covenants.
A. Net Worth. IMCC will not permit its Net Worth at
any time to be less than the greater of $70 million or 80% of IMCC's
Net Worth as of the most recent calendar quarter.
B. Indebtedness Ratio. Borrower will not permit the
ratio of its total liabilities to its Net Worth to equal or exceed 20
to 1, provided, however, that solely for purposes of calculating the
ratios of its total liabilities to its Net Worth, liabilities shall
exclude securities that Borrower has sold but which have not yet been
purchased to the extent of securities purchased under agreements to
resell.
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6.8 Notice of Change in Articles, Bylaws or Seller's Guide.
Borrower shall notify Lender of any proposed change or amendment in the
provisions of Borrower's Articles of Incorporation, Bylaws or Seller's Guide.
Subsequent to the effective date of any such proposed change, amendment or
addition to the Seller's Guide, Borrower shall not send to Lender a Request for
Advance with respect to any Collateral affected by such change, amendment or
addition to the Seller's Guide without Lender's prior written consent to any
such change, amendment or addition. Without the prior written consent of Lender,
Borrower shall not amend or otherwise modify the Seller's Guide.
6.9 Further Assurances. Borrower shall, at Borrower's expense,
do all such further acts, and execute, acknowledge and deliver all such further
documents as Lender reasonably shall require to more fully or effectively carry
out the intention or facilitate the performance of this Agreement.
6.10 Reports Regarding Collateral. Borrower shall provide to
Lender, not later than the 5th Business Day of each month during the term of
Agreement, any statements, reports or other information that Lender may require
for the purpose of determining the Market Value of any Eligible Assets,
including, but not limited to, collateral tapes and yield tables, servicing
reports, trustee and remittance reports, and aging reports.
6.11 Borrower's Securities Activities. No part of the proceeds
of any Advance made hereunder will be used for "purchasing" or "carrying" Margin
Stock or for any purpose which violates, or would be inconsistent with, the
provisions of the Regulations of the Board of Governors of the Federal Reserve
System.
6.12 Corporate Separation and Indebtedness.
So long as the Obligations are outstanding, Borrower covenants
and agrees, for the benefit of Lender, that:
A. It will maintain corporate records and books of
account separate from those of any Affiliate of Borrower.
B. Its Board of Directors will hold all appropriate
meetings to authorize and approve its corporate actions.
C. In all matters relating to the operation of
Borrower and an Affiliate of Borrower, neither Borrower nor any agent
acting on behalf of Borrower will hold out or represent that Borrower
and any Affiliate constitute a single entity or that either has the
authority to act on behalf of the other.
D. It will not commingle its funds or assets with
those of any other Person.
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E. It shall not be liable for or issue, incur, or
assume any other indebtedness, or guaranty any indebtedness of any
Person other than a subsidiary or in connection with a securitization
relating to Pledged Loans.
6.13 Other Agreements:
A. Borrower will not request or permit any Person to
take any action which might adversely affect Lender's interest in the
Collateral or the value of the Collateral without obtaining the prior
written consent of Lender.
B. Borrower will not consent to any amendment to any
documents relating to Collateral which could adversely affect the
Market Value of such Collateral without obtaining the prior written
consent of Lender.
6.14 Independence of Covenants. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of an Event of Default or Potential Event of Default if
such action is taken or condition exists.
36
ARTICLE VII
EVENTS OF DEFAULT
7.1 Events of Default. If any of the following conditions or
events ("Events of Default") shall occur:
A. Failure to Make Payments When Due. Failure to pay
the principal of an Advance when due, whether at stated maturity, by
acceleration, by notice of prepayment or otherwise; or failure to pay
any installment of interest on any Advance or any other amount due
under this Agreement, including, but not limited to, any Breakage Fee,
on the due date thereof; or
B. Default in Other Agreements. Failure of Borrower
to pay or any default in the payment of any amount of principal of or
interest on any other Indebtedness in the aggregate principal amount of
$1 million or more, or in the payment of any Contingent Obligation in
the aggregate principal amount of $1 million_ or more, beyond any
period of grace provided unless a bond or other provision for payment
thereof reasonably satisfactory to Lender has been made; or breach or
default with respect to any other material term of any evidence of any
other Indebtedness or of any loan agreement, mortgage, indenture or
other agreement relating thereto, or any Contingent Obligation, if the
effect of such default or breach is to cause Indebtedness of Borrower
in the aggregate amount of $1 million or more to be declared due prior
to its stated maturity; or
C. Breach of Covenants. Failure of Borrower to
perform or comply with any material term or condition applicable to it
contained in this Agreement, including without limitation the
obligations set forth in Section 6.1(vi); provided, however, that with
respect to the covenants contained in subsections (i), (ii) or (iv) of
Section 6.1 Lender shall give such Borrower three Business Days' notice
before such failure shall become an Event of Default; or
D. Breach of Warranty. Any of Borrower's
representations or warranties made or deemed made herein (other than
any representation or warranty contained in Section 2.2 or 2.3 hereof)
or in any statement, notice or certificate at any time given by
Borrower in writing pursuant hereto or in connection herewith shall be
incorrect, incomplete or misleading in any respect on the date as of
which made or deemed made; provided, however, that a breach of any
representation or warranty contained in Section 2.2 or 2.3 hereof shall
constitute an Event of Default if any such breach of a representation
or warranty was previously known to any executive officer of Borrower
or other officer of Borrower involved in the performance of this
Agreement, in either case after due inquiry; or
E. Involuntary Bankruptcy: Appointment of Receiver,
etc. (i) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of
37
Borrower, in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, which
decree or order is not stayed; or (ii) any other similar relief shall
be granted under any applicable Federal or state law; or (iii) a decree
or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian
or other officer having similar powers over Borrower, or over all or a
substantial part of their respective property, shall have been entered;
or (iv) the involuntary appointment shall be made of an interim
receiver, trustee or other custodian of Borrower, for all or a
substantial part of their respective property (by petition,
application, answer, consent or otherwise); or (v) a warrant of
attachment, execution or similar process shall be issued against any
substantial part of the property of Borrower; or
F. Voluntary Bankruptcy; Appointment of Receiver;
Material Adverse Change. Borrower shall have an order for relief
entered with respect to it or commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion to an involuntary case, under
any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a
substantial part of its or his property; the making by Borrower of any
assignment for the benefit of creditors; the inability or failure of
Borrower, or the admission by Borrower in writing of its or his
inability, to pay its or his debts as such debts become due or the
Board of Directors of Borrower (or any committee thereof) adopts any
resolution or otherwise authorizes action to approve any of the
foregoing; or Lender determines in its sole discretion using reasonable
business judgment that there has been, or an event or series of events
have occurred that could reasonably be expected to result in, a
Material Adverse Effect; or
G. Judgments and Attachments. Any money judgment,
writ or warrant of attachment, or similar process involving in any case
an amount in excess of $1 million shall be entered or filed against
Borrower or any of its assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of fifteen days or in any event later
than five days prior to the date of any proposed sale thereunder; or
H. Dissolution. Any order, judgment or decree shall
be entered against Borrower decreeing the dissolution or splitting up
of Borrower; or
I. Other Defaults. Borrower shall default in the
performance of or compliance with any term contained in this Agreement
other than those referred to above in this Section 7.1; provided,
however, that Lender shall give such Borrower five Business Days notice
before any such default shall become an Event of Default unless
Borrower has failed to promptly notify Lender in accordance with
Section 6.1(vi) hereof;
THEN
(i) Upon the occurrence of any Event of Default
described in subsections
38
E or F of Section 7.1 the unpaid principal amount of and accrued
interest on the Note and any fees due hereunder shall automatically
become due and payable, without presentment, demand, notice or other
requirements of any kind, all of which are hereby expressly waived by
Borrower, and the obligation (if any) of Lender to make any further
Advances shall thereupon terminate.
(ii) Upon the occurrence of any Event of Default
(other than those described in subsection E or F of Section 7.1) Lender
may, by written notice to Borrower, declare the unpaid principal amount
of and accrued interest on the Note and any fees or any other amounts
due hereunder to be due and payable whereupon the same shall forthwith
become due and payable, without presentment, demand, notice or other
requirements of any kind, all of which are hereby expressly waived by
Borrower, and the obligation of Lender to make any further Advances
shall thereupon terminate.
(iii) Upon the occurrence of any Event of Default
Lender may do any of the following:
(a) Collect by legal proceedings all interest,
principal payments and other sums payable with respect to any
outstanding Advance.
(b) Foreclose upon or otherwise enforce its security
interest in and Lien on the Collateral pursuant to this Agreement.
(c) Sell the Collateral in one or more lots, at one
or more times, at public or private sales, in an established market
therefor or otherwise, as Lender may elect, at such prices and on such
terms, as to cash or credit, as Lender may deem proper. Any sale may be
made at any place designated by Lender, and Lender shall have the right
to become the purchaser at any such sale which is open to the public
and, to the extent permitted by law, private sales. If notice is given
of the sale of any Collateral, it is agreed that notice shall be
satisfactorily given for all purposes if Lender sends, via facsimile
transmission, a copy of such notice to Borrower not less than one day
prior to such sale. The foregoing notice provisions shall not preclude
Lender's rights to foreclose upon the Collateral in any other manner
permitted under the Uniform Commercial Code of the State of New York;
provided that a sale of the Collateral in accordance with such notice
requirements shall be deemed a disposal of the Collateral in a
commercially reasonable manner. Lender shall have the right in
connection with the Collateral either to sell the same as above
provided, or to foreclose, xxx upon, or otherwise seek to enforce the
same in its own name or in the name of Borrower as provided herein.
Subject to the foregoing provisions of this paragraph, after an Event
of Default shall occur and be continuing, Lender shall have the right
to renew, extend the time of payment of, or otherwise amend,
supplement, settle or compromise, in any manner, any obligations for
the payment of money included in the Collateral, any security therefor
and any other agreements, instruments, claims or chooses in action of
any kind which may be included in the Collateral. Each purchaser at any
sale or other disposition shall hold the Collateral
39
free from any claim or right of whatever kind, including any equity or
right of redemption of Borrower, and Borrower specifically waives (to
the extent permitted by law) all rights of redemption, stay or
appraisal which it has or may have under any rule of law or statute now
existing or hereafter adopted.
(d) Take possession of all or any portion of the
Collateral that is not already in the possession of Lender, and
Borrower agrees to assemble and make available, or cause to be made
available, the Collateral to Lender at a convenient location. Lender
may manage and protect the Collateral, do any acts which Lender deems
proper to protect the Collateral as security hereunder, and xxx upon
any contract or claim relating to the Collateral and receive any
payments due thereon or any damages thereunder, and apply all sums
received to the payment of the Obligations secured hereby in accordance
with Section 7.2.
(e) Be entitled, without regard to the adequacy of
the security for the Obligations secured hereby, to the appointment of
a receiver by any court having jurisdiction, and without notice, to
take possession of and protect, collect, manage, liquidate and sell the
Collateral or any portion thereof, collect the payments due with
respect to the Collateral or any portion thereof, and do anything that
Lender is authorized with respect thereto to do.
(f) Grant extensions of time, make any compromise or
settlement it deems desirable with respect to the Collateral, or waive
or release any security interest in Collateral.
(g) Exercise all rights and remedies of a secured
creditor under the Uniform Commercial Code.
(h) Require Borrower to pursue, to the extent
applicable, in its own name but for the benefit of Lender, any one or
more of the remedies described in (a) through (g) above.
(i) All remedies are cumulative. Any failure on the
part of Lender to exercise or any delay in exercising any right
hereunder shall not operate as a waiver thereof, nor shall any single
or partial exercise by Lender of any right hereunder preclude any other
exercise thereof or the exercise of any other right.
7.2 Application of Proceeds. Any money collected by Lender
pursuant to this Article VII (whether upon voluntary payment, foreclosure or
otherwise) shall be promptly applied as follows unless otherwise required by
provisions of applicable law:
(i) first, to the payment of all reasonable expenses
incurred by Lender under this Agreement and in enforcing its rights and
the rights of Lender hereunder,
40
including all costs and expenses of collection, attorneys' fees, court
costs, and foreclosure expenses;
(ii) next, to the payment of all principal and
interest due and unpaid on any Advance;
(iii) next, to the payment of any other Obligations
owed by Borrower to Lender; and
(iv) next, to Borrower or as a court of competent
jurisdiction may direct.
41
ARTICLE VIII
MISCELLANEOUS
8.1 Expenses. Whether or not the transactions contemplated
hereby shall be consummated, Borrower agrees to pay on demand (i) all the
reasonable costs of furnishing all opinions by counsel for Borrower (including
without limitation any opinions requested by Lender as to any legal matters
arising hereunder), and of Borrower's performance of and compliance with all
agreements and conditions contained herein on its part to be performed or
complied with; (ii) the reasonable fees, expenses and disbursements of counsel
to Lender in connection with the establishment and administration of this
Agreement, not to exceed $10,000; (iii) all the actual costs and expenses of
creating and perfecting Liens in favor of Lender, pursuant to this Agreement,
including filing and recording fees and expenses; and (iv) after the occurrence
of an Event of Default, all costs and expenses (including reasonable attorneys'
fees and costs of settlement) incurred by Lender in enforcing any Obligations of
or in collecting any payments due from Borrower hereunder and under the Note by
reason of such Event of Default. Attorneys' fees, expenses and disbursements
incurred in enforcing, or on appeal from, a judgment pursuant hereto shall be
recoverable separately from and in addition to any other amount included in such
judgment, and this clause is intended to be severable from the other provisions
of this Agreement and to survive and not be merged into such judgment.
8.2 Indemnity by Borrower.
A. Indemnification by Borrower. In addition to the
payment of expenses pursuant to Section 8.1, whether or not the
transactions contemplated hereby shall be consummated, Borrower agrees
to indemnify, pay and hold harmless Lender and the officers, directors,
employees and agents of Lender (collectively called the "Indemnitees"),
from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements (including, without limitation, the reasonable fees
and disbursements of counsel for such Indemnitees in connection with
any investigative, administrative or judicial proceeding, whether or
not such Indemnitee shall be designated a party thereto), which may be
imposed on, incurred by, or asserted against such Indemnitee, as a
result of, or arising in any manner out of, or in any way related to or
by reason of, (i) any of the Advances or on account of any Collateral
pledged hereunder, (ii) the breach of any of Borrower's representations
and warranties or covenants hereunder, or (iii) the exercise by Lender
of any of its rights and remedies (including, without limitation,
foreclosure); provided that Borrower shall have no obligation hereunder
with respect to indemnified liabilities arising from the gross
negligence or willful misconduct of any such Indemnitee. To the extent
that the undertaking to indemnify, pay and hold harmless set forth in
the preceding sentence may be unenforceable because it violates any law
or public policy, Borrower shall contribute the maximum portion which
it is permitted to pay and satisfy under applicable law, to the payment
and satisfaction of all indemnified liabilities incurred by the
Indemnitees or any of them.
42
B. Claims. If any claim is made, or any action, suit
or proceeding is brought against any Person indemnified pursuant to
this Section 8.2, the Indemnitee shall notify Borrower of such claim or
of the commencement of such action, suit or proceeding, and Borrower
will assume the defense of such action, suit or proceeding, employing
counsel selected by Borrower and reasonably satisfactory to such
Indemnitee and pay the fees and expenses of such counsel; provided,
however, that if counsel to the Indemnitee shall reasonably determine
that, due to conflicts in the liabilities or defenses of Borrower and
Lender, Lender should retain its own counsel, Lender shall have the
right to retain counsel and the reasonable fees and expenses of such
counsel shall be for the account of Borrower.
8.3 Set-Off. Borrower hereby grants to Lender a right of
set-off against the payment of any amounts that may be due and payable to Lender
from Borrower, such right to be upon any and all monies or other property of
Borrower held or received by Lender (or any Affiliate of Lender) or due and
owing from Lender to Borrower or any Affiliate.
8.4 Amendments and Waivers. No amendment, modification,
termination or waiver of any provision of this Agreement or of the Note, or
consent to any departure by Borrower therefrom, shall in any event be effective
without the written concurrence of Lender.
8.5 Confidentiality; Non-Disclosure of Information. Each party
hereto shall treat this Agreement, the Custody Agreement and the transactions
contemplated hereby as confidential; provided, however, that such confidential
information may be disclosed (a) as required by law or pursuant to generally
accepted accounting procedures; (b) upon the written consent of the party whose
otherwise confidential information would be disclosed; or (c) if such
information was or becomes available to Lender from a third party on a
non-confidential basis.
8.6 Notices. Unless otherwise specifically provided herein,
any notice or other communication herein required or permitted to be given shall
be in writing and may be personally served, telecopied, telexed or sent by
overnight courier and shall be deemed to have been given when delivered in
person, upon receipt of telecopy or telex or two Business Days after deposit
with an overnight courier. For the purposes hereof, the addresses of the parties
hereto shall be as set forth under each party's name on the signature pages
hereof.
8.7 Attorneys' Fees. Subject to Sections 8.1, 8.2 and 8.3, if
any party hereto commences litigation for the interpretation, enforcement,
termination, cancellation or rescission hereof, or for damages for the breach
hereof, the prevailing party in such action shall be entitled to its reasonable
attorneys' fees and court and other costs incurred, to be paid by the losing
party as fixed by the court or in a separate action brought for that purpose.
43
8.8 Survival of Warranties and Certain Agreements.
A. Agreement. All covenants, agreements,
representations and warranties made herein shall survive the execution
and delivery of this Agreement, the making of the Advances hereunder
and the execution and delivery of the Note.
B. Termination. Notwithstanding anything in this
Agreement or implied by law to the contrary, the agreements of Borrower
set forth in Sections 8.1, 8.2 and 8.3 shall survive the payment of the
Advances and the Note and the termination of this Agreement.
8.9 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of Lender in the exercise of any power, right or
privilege hereunder or under the Note shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or
privilege. All rights and remedies existing under this Agreement or the Note are
cumulative to and not exclusive of, any rights or remedies otherwise available.
8.10 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, BORROWER AND LENDER EACH HEREBY IRREVOCABLY WAIVES ALL RIGHT OF
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY MATTER ARISING HEREUNDER.
8.11 No Joint Venture. Notwithstanding anything to the
contrary herein contained, Lender by entering into this Agreement or by taking
any action pursuant hereto, will not be deemed a partner or joint venturer with
Borrower and Borrower agrees to hold Lender harmless from any damages and
expenses resulting from such a construction of the relationship of the parties
hereto or any assertion thereof.
8.12 Lender's Discretion. Whenever pursuant to this Agreement,
Lender exercises any rights given to it to approve or disapprove, or any
arrangement or term is to be satisfactory to Lender, the decision of Lender to
approval or disapprove or to decide whether arrangements or terms are
satisfactory or not satisfactory shall (except as is otherwise specifically
herein provided) be in the sole discretion of Lender and shall be final and
conclusive.
8.13 Severability. In case any provision in or obligation
under this Agreement or the Note shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligations in any other
jurisdiction, shall not in any way be affected or impaired thereby.
8.14 Headings. Article, section and subsection headings in
this Agreement are
44
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
8.15 Applicable Law. This Agreement and the Note shall be
governed by, and shall be construed and enforced in accordance with, the laws of
the State of New York.
8.16 Transfers by Lender; Subsequent Holders of Note. Lender
may, in its sole discretion, assign all of its right, title and interest in or
grant a security interest in any Pledged Loan or Pledged MBS pledged by Borrower
hereunder and all rights of Lender under this Agreement and the Custodial
Agreement in respect of such Pledged Loan or Pledged MBS to Assignee, subject
only to an obligation on the part of Assignee to deliver each such Pledged Loan
or Pledged MBS to Lender to permit Lender or its designee to make delivery
thereof to Borrower pursuant to Section 5.4. It is anticipated that such
assignment to Assignee will be made by Lender, and Borrower hereby irrevocably
consents to such assignment. No notice of such assignment shall be given by
Lender to Borrower. Assignment by Lender of Pledged Loans or Pledged MBS as
provided in this Section 8.16 shall not release Lender from its obligations
otherwise under this Agreement.
8.17 No Assignment by Borrower. Borrower's rights, obligations
or any interest therein hereunder may not be assigned without the express
written consent of Lender.
8.18 Counterparts; Effectiveness. This Agreement and any
amendments, waivers, consents, or supplements may be executed in any number of
counterparts, and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
8.19 Entire Agreement. This Agreement the Advance Request
Confirmations and the Custodial Agreement contain the entire agreement between
the parties hereto with respect to the subject matter hereof, and supersede all
prior and contemporaneous agreements between them, oral or written, of any
nature whatsoever with respect to the subject matter hereof.
8.20 Additional Borrowers. At the request of Borrowers and
upon the prior written consent of Lender, any affiliate of IMCC may be added as
a "Borrower" under this Agreement by execution and delivery to the Lender of a
Borrower Addition Agreement substantially in the form of Exhibit I hereto.
45
WITNESS the due execution hereof by the respective duly
authorized officers of the undersigned as of the date first written above.
IMC MORTGAGE COMPANY
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
IMC CORPORATION OF AMERICA
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
INDUSTRY MORTGAGE COMPANY, LP
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
IMC INVESTMENT CORPORATION
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
COREWEST BANC
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
Notice Address:
XXXXX XXXXXX REAL ESTATE
SECURITIES INC.
By ________________________________________
Name: Xxxxxx Xxxxxxxxxxxx
Title: First Vice President
Notice Address:
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxxxxx
Telephone: (000) 000-0000
Facsimile No: (000) 000-0000
47
EXHIBIT A
FORM OF COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFY THAT:
(i) we are the duly elected [Title] and [Title] of_______
________________________________________________ ("Borrower");
(ii) in such capacities, we have reviewed the terms of the
Loan and Security Agreement dated as of ________ __, 1997 (as amended, extended
or restated from time to time, the "Agreement"), between Borrower and Xxxxx
Xxxxxx Real Estate Securities Inc. as Lender ("Lender"), and we have made, or
have caused to be made under our supervision, a detailed review of the
transactions and conditions of Borrower during the accounting period covered by
the attached financial statements;
(iii) the examinations described in paragraph (ii) did not
disclose, and we have no knowledge of, the existence of any condition or event
which constitutes an Event of Default or Potential Event of Default (each as
defined in the Agreement) during or at the end of the accounting period covered
by the attached financial statements or as of the date of this Certificate,
except as set forth below; and
(iv) as of the date of this Certificate, Borrower is not in
default under any covenant set forth in Article VI of the Agreement.
Described below (or in a separate attachment to this
Certificate) the exceptions, if any, to paragraph (iii) by listing, in detail,
the nature of the condition or event, the period during which it has existed and
the action which Borrower has taken, is taking, or proposes to take with respect
to each such condition or event:
________________________________________________________________________________
________________________________________________________________________________
1
The foregoing certifications, together with the computations
set forth in the Attachment hereto and the financial statements delivered with
this Certificate in support hereof, are made and delivered this ____ day of
________, 19__ pursuant to subsection (iii) of Section 6.1 of the Agreement.
-----------------------------
By ___________________________
Title: _______________________
By ___________________________
Title: _______________________
2
ATTACHMENT
TO COMPLIANCE CERTIFICATE
The Certificate attached hereto is as of ___________
and pertains to the period from ___________ to ___________.
Capitalized terms used herein shall have the meanings
set forth in the Loan and Security Agreement dated as February 28, 1997 (as
amended, extended or restated from time to time, the "Agreement"), by and among
IMC Mortgage Company, IMC Corporation of America, Industry Mortgage Company, LP,
IMC Investment Corp., and CoreWest Banc Inc. (jointly and severally, each a
"Borrower") and PaineWebber Real Estate Securities Inc. ("PWRES"). Section and
subsection references herein relate to the subsections of the Agreement.
6.7A Net Worth of [IMCC]
(i) Net Worth: $____________
(ii) Minimum Net Worth required
under subsection A of Section 6.7: $____________
(iii) Difference between (i) and (ii): $____________
6.7B Indebtedness Ratio of [IMCC]
(i) Total Liabilities: $____________
(ii) Total Net Worth: $____________
(iii) Maximum Ratio of Total Liabilities
to Total Net Worth required
under subsection B of Section 6.7: ____
(iv) Actual ratio (i):(ii) _______:______
1
EXHIBIT B
PROMISSORY NOTE
$400,000,000_____________ New York, New York
Dated: February 28, 1997
FOR VALUE RECEIVED, the undersigned IMC Mortgage Company, a
Florida corporation, IMC Corporation of America, a Delaware corporation,
Industry Mortgage Company, LP, a Delaware limited partnership, IMC Investment
Corp., an Illinois corporation and CoreWest Banc Inc., a California corporation,
each having its principal place of business at 0000 Xxxxxxxx Xxxx Xxxxx, Xxxxx
Xxx, Xxxxxxx 00000 (jointly and severally, each a "Borrower" and collectively
"Borrowers"), promise to pay to the order of XXXXX XXXXXX REAL ESTATE SECURITIES
INC., a Delaware corporation, with its principal office at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Lender"), at Lender's principal office or
at such other place as the holder hereof may designate, in lawful money of the
United States of America and in immediately available funds, the lesser of (i)
the principal sum of FOUR HUNDRED MILLION DOLLARS ($400,000,000) or (ii) the sum
of the unpaid principal amounts of the advances ("Advances") made by Lender to
Borrower and recorded on any of the "Advance Schedules" attached hereto, plus
interest, as provided herein.
As used herein or in the Advance Schedules attached to the
Note, the following terms shall have the following meanings:
"Advance Date" means any date on which an Advance is made by Lender to
Borrower.
"Business Day" means any day other than (A) a Saturday, Sunday or other
day on which banks located in the City of New York, New York are
authorized or obligated by law or executive order to be closed, or (B)
any other day on which Lender is closed for business, seven days notice
of which shall be given by Lender to Borrower.
"Interest Determination Date" means, with respect to any Advance, the
date(s) set forth in the related Advance Request Confirmation;
provided, however, that any such date(s) shall be either (i) the
related Advance Date, or (ii) the related Advance Date and thereafter
each successive Interest Payment Date.
"Interest Payment Date" means, with respect to any Advance, the
applicable date(s) set forth in the related Advance Request
Confirmation; provided, however, that the final Interest Payment Date
shall be on the related Advance Maturity Date.
"Interest Period" means, with respect to any Advance, the period from
(and including) an Interest Payment Date to (but excluding) the
immediately succeeding Interest Payment Date; provided, however, that
the first Interest Period of any Advance shall commence
1
on (and include) the related Advance Date and continue until (but
exclude) the first Interest Payment Date.
"Interest Rate" means, with respect to any Advance, the rate at which
such Advance shall bear interest on the unpaid principal thereof, which
rate shall be set forth in the related Advance Request Confirmation.
"LIBOR" means, unless otherwise agreed to by the parties hereto
pursuant to an Advance Request Confirmation, the London interbank
offered rate for one-month U.S. Dollar deposits as it appears on page
five of the Telerate screen at or about 9:00 a.m. (New York City time)
on the related Interest Determination Date.
Borrower shall pay to Lender interest on each Advance from
time to time outstanding at a rate per annum equal to that rate set forth in the
"Interest Rate" column on the applicable Advance Schedule attached hereto (the
"Interest Rate"). Each Advance shall bear interest on the unpaid principal
amount thereof from and including the Advance Date through maturity, whether by
acceleration or otherwise.
With respect to each Advance, Borrower shall pay to Lender (i)
on each Interest Payment Date, in full, the accrued and unpaid interest on such
Advance and (ii) on the date set forth in the "Advance Maturity Date" column of
the applicable Advance Schedule attached hereto (the "Advance Maturity Date"),
in full, the outstanding principal amount of such Advance.
All Advances made by Lender hereunder and all payments made on
account of the principal hereof shall be recorded by Lender on the Advance
Schedules attached to this Note (provided that any failure by Lender to make any
such notation on such Advance Schedules shall not affect the obligations of
Borrower hereunder).
If any amount due hereunder is not paid when due (whether at
stated maturity, by acceleration or otherwise) a rate per annum during the
period commencing on the due date until such amount is paid in full equal to 300
basis points above the otherwise applicable rate, to the extent permitted by
applicable law, shall be imposed on said amount.
Interest shall be computed for the actual number of days
elapsed on the basis of a 360-day year. In no event shall interest be chargeable
or collectible hereunder in excess of the maximum lawful rate under applicable
law.
Borrower promises to pay the holder hereof all reasonable
costs and expenses of collection of this Note and to pay all reasonable
attorney's fees incurred in such collection or in any suit or action to collect
this Note and any appeal thereof.
The provisions of this Note shall inure to the benefit of
Lender and its successors and assigns and be binding on Borrower and its
successors and assigns. This Note shall in all
2
respects be governed by, and construed in accordance with, the laws of the State
of New York, including all matters of construction, performance and validity.
Borrower waives presentment and demand for payment, notice of dishonor, protest
and notice of protest of this Note. No failure or delays by Lender in the
exercise of any power or right under this Note shall operate as a waiver
thereof, and no exercise or waiver of any single power or right, or the partial
exercise thereof, shall affect Lender's rights with respect to any and all other
rights and powers.
Borrower hereby irrevocably consents and submits to the
nonexclusive jurisdiction and venue of any State or Federal Court sitting in New
York County over any action or proceeding arising out of or relating to this
Note or any document or instrument delivered in connection herewith, and
Borrower hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such State or Federal Court. Borrower
waives any objection to any action or proceeding in any State or Federal Court
sitting in New York County on the basis of forum non conveniens. Borrower hereby
waives the right to trial by jury, rights of set-off and rights to interpose
counterclaims of any nature, except for compulsory counterclaims. Borrower
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Borrower further agrees that any action or
proceeding brought against Lender shall be brought only in any State or Federal
Court sitting in New York County. Borrower further agrees that in Lender's
discretion, it may serve legal process in any other manner permitted by law and
may bring any action or proceeding against Borrower or its property in the
courts of any other jurisdiction.
The unenforceability or invalidity of any provision or
provisions of this Note shall not render any other provision or provisions
herein contained unenforceable or invalid.
The Borrowers agree to be jointly and severally liable for the
obligations of each Borrower hereunder and all representations, warranties,
covenants and agreements made by or on behalf of any Borrower in this Note or
any other document, instrument or certificate delivered pursuant hereto shall be
deemed to have been made by each Borrower, jointly and severally. The joint and
several obligations of each of IMCC, IMCA, IMC LP, IMCI and CWB hereunder are
absolute, unconditional, irrevocable, present and continuing and, with respect
to any obligation to Lender, is a guaranty of performance of such obligation and
is in no way conditional or contingent upon the continued existence of any
Borrower and is not and will not be subject to any setoffs by any Borrower. Any
notice or other communication provided to one Borrower pursuant to this
Agreement shall be deemed to have been given to all Borrowers and failure to be
sent any notice or communication contemplated hereby shall not relieve a
Borrower from its joint and several liability for the Obligations of any other
Borrower hereunder.
3
This Note cannot be amended, modified or changed in any way
except by a written instrument executed by Borrower and Lender.
IMC MORTGAGE COMPANY
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
IMC CORPORATION OF AMERICA
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
INDUSTRY MORTGAGE COMPANY, LP
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
IMC INVESTMENT CORPORATION
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
COREWEST BANC INC.
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
4
State of _________________ )
):ss
County of ________________ )
On this ________ day of ________, 1997, before me personally
appeared ___________________________ to me known who, being duly sworn did
depose and say that he/she is the of ____________, the corporation described in
and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal and
that it was so affixed by order of the Board of Directors of said corporation,
and that he signed his name thereto by like order.
---------------------------
Notary Public
5
ADVANCE SCHEDULE
[TYPE OF ELIGIBLE ASSET]
ADVANCE MATURITY PRINCIPAL AMOUNT
BORROWER ADVANCE DATE DATE OF ADVANCE INTEREST RATE
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6
EXHIBIT C
FORM OF INCUMBENCY CERTIFICATE
------------
Secretary's Certificate
I, ____________________________________________, Secretary of
________________________________, A __________________________ corporation (the
"Company"), DO HEREBY CERTIFY as follows:
The below-named persons have been duly elected, have
duly qualified and at all subsequent times to and
including the date hereof, have been officers of the
Company, holding the office set opposite their names,
and the signature below set opposite their names are
genuine signatures or true facsimiles thereof:
Name Office Signature
-------------------- -------------------- -------------------
-------------------- -------------------- -------------------
Attached hereto as Exhibit A is a true and correct
copy of the By-Laws of the Company in effect as of
___________, and at all subsequent times to and
including the date hereof.
Attached hereto as Exhibit B is a true and correct
copy of the resolutions of the Board of Directors of
the Company adopted on __________.
IN WITNESS WHEREOF I have hereunto set my hand and affixed the
seal of the Corporation this ___ day of _______, 199_.
-----------------------
Secretary
1
EXHIBIT D
BORROWER'S OFFICER'S CERTIFICATE
I, ________________________, hereby certify that I am the duly
elected ______________ of ____________________________________, a ___________
corporation (the "Borrower"), and further certify, on behalf of Borrower as
follows:
1. Attached hereto as Attachment I are a true and correct copy
of the Articles and By-laws of Borrower as are in full force and effect
on the date hereof. No event has occurred since ___________________,
199__ which has affected the good standing of Borrower under the laws
of _______________________.
2. No proceedings looking toward merger, liquidation,
dissolution or bankruptcy of Borrower are pending or contemplated.
3. Each person who, as an officer or attorney-in-fact of
Borrower, signed (a) the Loan and Security Agreement (the "Agreement"),
dated as of February 28, 1997, between Borrower and Xxxxx Xxxxxx Real
Estate Securities Inc. (the "Lender"); and (b) any other document
delivered prior hereto or on the date hereof in connection with the
Agreement was, at the respective times of such signing and delivery,
and is as of the date hereof, duly elected or appointed, qualified and
acting as such officer or attorney-in-fact, and the signatures of such
persons appearing on such documents are their genuine signatures.
4. Attached hereto as Attachment II is a true and correct copy
of the resolutions duly adopted by the board of directors of Borrower
on ________________, 199_ (the "Resolutions") with respect to the
authorization and approval of the transactions contemplated in the
Agreement; said Resolutions have not been amended, modified, annulled
or revoked and are in full force and effect on the date hereof.
5. All of the representations and warranties of Borrower
contained in Section 2.1 of the Agreement were true and correct in all
material respects as of the date of the Agreement and are true and
correct in all material respects as of the date hereof.
6. Borrower has performed all of its duties and has satisfied
all the material conditions on its part to be performed or satisfied
pursuant to the Agreement.
All capitalized terms used herein and not otherwise defined
shall have the meaning assigned to them in the Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed
the seal of the Buyer.
Dated: _______________
[Seal]
__________________________________
By: ______________________________
Name: ____________________________
Title: ___________________________
I, ________________________, Secretary of ____________, hereby
certify that _________________________ is the duly elected, qualified and acting
____________ of Borrower and that the signature appearing above is his genuine
signature.
1
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: ________________
[Seal]
-----------------------------
By: __________________________
Name: ________________________
Title: _______________________
2
Exhibit E-1
FORM OF REQUEST OF ADVANCE
Xxxxx Xxxxxx Real Estate Securities Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxxxxxxxxx
Facsimile: (000) 000-0000
Pursuant to the Loan and Security Agreement, dated February 28, 1997,
between you, and the undersigned (as amended from time to time, the
"Agreement"), the undersigned hereby gives notice of its request to borrow from
you an Advance, and, in connection therewith, sets forth below the following
information (each capitalized term used herein shall have the meaning specified
therefor in the Agreement):
1. The type of Eligible Asset for the requested Advance is ______________.
2. The principal amount of the requested Advance is $____________________.
3. The Advance Date of the requested Advance is _________________, 199_.
4. The Advance Maturity Date of the requested Advance is _____________ , 199_.
5. The Interest Payment Date(s) for the requested Advance is/are _______, 199_.
6. The Interest Determination Date(s) for the requested Advance is/are __, 199_.
7. The applicable Interest Rate as of the Advance Date for such Advance(s)
is/are _____%.
The undersigned hereby certifies that the following statements are true
and correct on the date hereof and shall be true and correct on the date of any
Advance requested herein, before and after giving effect thereto: (a) each of
the representations and warranties contained in the Agreement are true and
correct in all material respects, (b) no Event of Default or Potential Event of
Default has occurred and is continuing, and (c) Borrower has satisfied all of
the conditions precedent in Sections 4.1 and 4.2 of the Agreement.
The Advance amount should be disbursed as follows:
[Wire transfer instructions to be inserted]
______________________________, as Borrower
By:_________________________________
Name: ______________________________
Title: _____________________________
Date: ______________________________, 199_
3
Exhibit E-2
FORM OF ADVANCE REQUEST CONFIRMATION
Xxxxx Xxxxxx Real Estate Securities Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxxxxxxxxx
Facsimile: (000) 000-0000
Pursuant to the Loan and Security Agreement, dated February 28, 1997,
between you, and the undersigned (as amended from time to time, the
"Agreement"), the undersigned hereby gives notice of its request to borrow from
you an Advance, and, in connection therewith, sets forth below the following
information (each capitalized term used herein shall have the meaning specified
therefor in the Agreement):
1. The type of Eligible Asset for the requested Advance is_______________.
2. The principal amount of the requested Advance is $ _________________ .
3. The Advance Date of the requested Advance is _________________ , 199_.
4. The Advance Maturity Date of the requested Advance is _____________ , 199_.
5. The Interest Payment Date(s) for the requested Advance
is/are __________, 199_.
6. The Interest Determination Date(s) for the requested Advance
is/are _________, 199_.
7. The applicable Interest Rate as of the Advance Date for such Advance(s)
is/are _____%.
The undersigned hereby certifies that the following statements are true
and correct on the date hereof and shall be true and correct on the date of any
Advance requested herein, before and after giving effect thereto: (a) each of
the representations and warranties contained in the Agreement are true and
correct in all material respects, (b) no Event of Default or Potential Event of
Default has occurred and is continuing, and (c) Borrower has satisfied all of
the conditions precedent in Sections 4.1 and 4.2 of the Agreement.
The Advance amount should be disbursed as follows:
[Wire transfer instructions to be inserted]
______________________________, as Borrower
By: _______________________________
Name: _____________________________
Title: ____________________________
Date: ________________________, 199_
4
AGREED AND ACCEPTED (pursuant to the terms specified below) BY:
XXXXX XXXXXX REAL ESTATE SECURITIES INC., as Lender
By: _____________________________________
Name: ___________________________________
Title: __________________________________
Date: ______________________________, 199_
1. The type of Eligible Asset for this Advance is ______.
2. The principal amount of this Advance is $____________.
3. The Advance Date of this Advance is ___________, 199_.
4. The Advance Maturity Date for this Advance is ________, 199_.
5. The Interest Payment Date(s) for the requested Advance
is/are __________, 199_.
6. The Interest Determination Date(s) for this Advance
is/are _________, 199_.
7. The applicable Interest Rate for this Advance is ____% (based
on an index of ____% for ____ LIBOR plus a spread
of ____ basis points).
8. The Advance Rate for this Advance is ____% .
9. The Collateral Value in connection with this Advance, as of
the date hereof, is $_____.
5
EXHIBIT F
Form Of Lender's Wire Transfer Instructions
1
EXHIBIT G
List Of Borrower's Affiliates
1
EXHIBIT H
[Form of Opinion of Borrower's Counsel]
[Date]
Xxxxx Xxxxxx Real Estate Securities Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
RE: Loan and Security Agreement dated February 28, 1997
(the "Agreement") by and between Xxxxx Xxxxxx Real
Estate Securities Inc., a Delaware corporation (the
"Lender"), and ___________________, a ________
corporation (the "Company"), and secured by the
"Collateral" (as defined in the Agreement)
Gentlemen:
We are special counsel to the Company in connection with the
above-referenced Agreement. Each capitalized term used herein shall have the
meaning specified in the Agreement. We are of the opinion that:
1. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction in
which it is incorporated and has the full legal power and
authority to own its property and to carry on its business as
currently conducted.
2. The Company has the power and authority to execute, deliver
and perform the Agreement, the Note and the applicable UCC
financing statements (collectively, the "Loan Documents"). The
execution, delivery and performance of the Loan Documents by
the Company, including without limitation, the Advances under
the Agreement and the pledge of the Collateral, have been duly
and validly authorized by all necessary actions on the part of
the Company.
3. The Loan Documents have been duly executed and delivered by
the Company. The Loan Documents constitute the legal, valid
and binding obligations of the Company and are enforceable in
accordance with their respective terms against the Company.
4. Upon delivery to the Lender or its designee of the Collateral,
the Lender will have a valid and perfected first priority
security interest therein.
Very truly yours,
[Borrower's Counsel]
1
EXHIBIT I
BORROWER ADDITION AGREEMENT
Reference is made to the Loan Agreement dated as of February 28, 1997
(as amended from time, the "Loan Agreement") by and among IMC CORPORATION OF
AMERICA, INDUSTRY MORTGAGE COMPANY, L.P., IMC INVESTMENT CORP. and COREWEST
BANC, INC. (jointly and severally, each a "Borrower" and collectively
"Borrowers"), XXXXX XXXXXX REAL ESTATE SECURITIES INC. ("Lender"), such other
"Borrowers" (as defined therein) which may from time to time become a party
thereto. Capitalized terms not defined herein have the respective meanings
assigned thereto in the Loan Agreement.
By their signatures below, _____________, Lender and Borrowers agree
that effective as of ___________ __, 199_, ______________ will become a
"Borrower" under the Loan Agreement with all the rights and obligations of a
Borrower thereunder on and after such date.
IN WITNESS WHEREOF, the parties have signed this Borrower Addition
Agreement as of _____________ __, 1997.
IMC MORTGAGE COMPANY
By:________________________________
Name:
Title:
IMC CORPORATION OF AMERICA
By: ________________________________
Name:
Title:
INDUSTRY MORTGAGE COMPANY, L.P.
By: ________________________________
Name:
Title:
IMC INVESTMENT CORP.
By:_____________________________
Name:
Title:
COREWEST BANC, INC.
2
By: ________________________________
Name:
Title:
XXXXX XXXXXX REAL ESTATE
SECURITIES INC.
By: ________________________________
Name:
Title:
3
