Exhibit 10.81
SECOND AMENDED AND RESTATED INTERCREDITOR AGREEMENT
(Xxxxx Xxxxxx)
SECOND AMENDED AND RESTATED INTERCREDITOR AGREEMENT, dated as
of November 10, 1999, between IMC MORTGAGE COMPANY, a Florida corporation (the "
Company"), GREENWICH STREET CAPITAL PARTNERS II, L.P., a Delaware limited
partnership ("GSCP"), GREENWICH FUND, L.P., a Delaware limited partnership, GSCP
OFFSHORE FUND, L.P., a Cayman Islands exempted limited partnership, GREENWICH
STREET EMPLOYEES FUND, L.P., a Delaware limited partnership, TRV EXECUTIVE FUND,
L.P., a Delaware limited partnership (each a "Facility Lender" and collectively,
the "Facility Lenders"), and XXXXX XXXXXX REAL ESTATE SECURITIES INC., a
Delaware corporation (the "Existing Lender"). Capitalized terms used in this
Agreement without definition have the meanings given to them in the Loan
Agreement (as hereinafter defined) as such terms are defined in the Loan
Agreement on the date hereof (or as amended by any amendment thereto approved by
the Existing Lender).
RECITALS
A. The Company has entered into a Loan Agreement, dated as of
October 12, 1998, amended by Amendment No. 1 thereto, dated as of February 11,
1999 (as the same may be further modified, supplemented or restated from time to
time, the "Loan Agreement"), between the Company, as borrower, and the Facility
Lenders, pursuant to which the Facility Lenders have extended to the Company
loans in the aggregate principal amount of $38,000,000 (the "Loans"), subject to
the terms and conditions set forth in the Loan Agreement, which Loans are
evidenced by the Notes and entitled to the benefit of certain guarantees and
security provided to the Facility Lenders or to GSCP, as collateral agent (the
"Collateral Agent") under certain of the other Loan Documents.
B. The Facility Lenders have made certain additional loans to
the Company pursuant to Note Purchase and Amendment Agreement No. 6, dated as of
October 18, 1999, in the original principal amount of $61,500,000 (the "Facility
Lender Advances") to fund certain monthly delinquent interest servicing advances
in respect of the Company's securitizations.
C. Pursuant to a Loan and Security Agreement, dated as of
February 28,
1998, as amended from time to time, by and among the Company and certain of its
Subsidiaries, (the "Existing Loan Agreement"), and other related agreements in
favor of the Existing Lender (collectively with the Existing Loan Agreement, the
"Existing Loan Documents"), the Existing Lender has agreed to provide financing
to the Company from time to time, to enable the Company to finance certain
mortgage loans and for other purposes provided therein; and the Company and
certain of its Subsidiaries have granted a security interest in the Collateral
(as hereinafter defined) in order to secure their respective obligations under
the Existing Loan Documents (the "Existing Obligations").
D. The Company entered into an Acquisition Agreement (the
"Acquisition Agreement"), dated as of February 19, 1999, by and among each of
the Facility Lenders and the Company, pursuant to which the Company would issue
and deliver to the Facility Lenders common stock, par value $0.001 per share, of
the Company representing approximately 93.5% of the Common Stock outstanding
after such issuance.
E. The Company has (i) terminated the Acquisition Agreement
and (ii) entered into an Asset Purchase Agreement, dated as of July 13, 1999, as
amended by Addendum No. 1 thereto, dated September 7, 1999 and a Delinquency and
Servicing Advance Purchase Agreement (collectively, the "Asset Purchase
Agreement"), between the Company and CitiFinancial Mortgage Company, a Delaware
corporation ("CMC "), pursuant to which CMC would acquire certain assets and
assume certain liabilities of the Company (the "Asset Sale").
F. The Company, the Facility Lenders and the Existing Lender
have previously entered into an Intercreditor Agreement, dated as of October 12,
1998, amended and restated by the Amended and Restated Intercreditor Agreement,
dated as of February 18, 1999 and amended further by Amendment No. 1 to Amended
and Restated Intercreditor Agreements, dated as of March 31, 1999, and letter
agreements dated as of July 15, 1999, August 11, 1999, September 14, 1999 and
October 15, 1999 (as so amended and restated, the "Original Intercreditor
Agreement"). In connection with the entry by the Company into the Asset Purchase
Agreement, the Facility Lenders, the Company and the Existing Lender have agreed
to enter into this agreement amending and restating the Original Intercreditor
Agreement (as so amended and restated, the "Agreement").
G. The Company issued a Promissory Note, dated as of July 1,
1997, in the amount of $12,975,864.30 (as amended and including any additional
Promissory
Notes delivered pursuant to the Xxxxxxxx Intercreditor Agreement (defined
below), the "NH Note") to Xxxx Xxxxxxxx ("NH"), and a Promissory Note, dated as
of July 1, 1997, in the amount of $1,441,762.70 (as amended and including any
additional Promissory Notes delivered pursuant to the Xxxxxxxx Intercreditor
Agreement, the "JH Note", and, together with the NH Note, the "Notes") to
Xxxxxxx X. Xxxxxxxx ("JH", and together with NH, the "Henschels"), pursuant to
which the Company has certain unsecured payment obligations to the Henschels
(the "Xxxxxxxx Note Obligations").
H. The Company, the Facility Lenders, NH and JH have entered
into an Intercreditor Agreement, dated as of the date hereof (the "Xxxxxxxx
Intercreditor Agreement"), pursuant to which the Henschels have agreed not to
take certain actions specified therein and the Company has agreed to make
certain payments to amortize the Xxxxxxxx Note Obligations as provided therein.
NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company, the
Existing Lender and the Facility Lenders agree to amend and restate the Original
Intercreditor Agreement to read in its entirety as follows:
Section 1. Standstill. (a) Each of the Facility Lenders and
the Existing Lender agrees, subject to the terms of this Agreement, that for the
Standstill Period, it shall not:
(i) file or join in the filing of any involuntary petition in
bankruptcy with respect to the Company or its Subsidiaries, or initiate
or participate in any similar proceedings for the benefit of creditors,
including any proceeding for the appointment of a trustee, receiver,
conservator or liquidator of the Company or its Subsidiaries or any
portion of its assets;
(ii) seek to collect or enforce by litigation or otherwise,
any payment obligations under the Existing Loan Documents or the Loan
Documents; provided that nothing in this Section 1 shall prohibit the
Facility Lenders from exercising their Exchange Option;
(iii) make any Margin Calls or other demands for payment in
respect of, or additional collateral to secure the Existing
Obligations; provided, however, that this clause shall not adversely
affect the right of the Existing Lender to take any actions to
preserve, protect or perfect its liens in the Collateral;
(iv) declare a default or event of default under, or exercise
or enforce any right or remedy under, or accelerate the maturity of any
Existing Obligation or Loan under, any Existing Loan Document or Loan
Document; or
(v) seek to attach, sequester or otherwise proceed against any
of the Collateral, except as provided in Section 8(f) hereof.
(b) The Standstill Period may be terminated by the Existing
Lender or the Facility Lenders by written notice to the Company and each other
Creditor upon the occurrence of any of the following:
(i) a failure by the Company under the Existing
Loan Agreement to make to the Existing Lender any scheduled payment of
interest, which failure continues unremedied for two days;
(ii) any intentional fraud or misrepresentation by
the Company;
(iii) immediately in the event any Other Existing
Lender takes any of the actions described in Section 1(a) of its Other
Intercreditor Agreement or either of the Henschels takes any of the
actions described in Section 1(a) of the Xxxxxxxx Intercreditor
Agreement, or, in the case of the Existing Lender, immediately in the
event any Facility Lender takes any of the actions described in Section
1(a) of this Agreement, or, in the case of the Facility Lenders,
immediately in the event the Existing Lender takes any of the actions
described in Section 1(a) of this Agreement or either of the Henschels
takes any of the actions described in Section 1(a) of the Xxxxxxxx
Intercreditor Agreement, in each case whether or not it shall have
given notice of termination of the Standstill Period;
(iv) a Change of Control or payment of the Take-Out
Premium, except to the extent payable in accordance with Section 5
hereof;
(v) an event shall occur and be continuing for a
period of ten Business Days which permits (x) any holder of
indebtedness for borrowed money of the Company or the Designated
Subsidiary outstanding (other than the Company or any Creditor or
Residential Funding Corporation) to accelerate the
maturity of such indebtedness or (y) any holder of such indebtedness or
any holder of any guarantee or other obligation of the Company or the
Designated Subsidiary to exercise remedies with respect to property of
the Company or the Designated Subsidiary (other than the Company or
Residential Funding Corporation solely with respect to the Mortgage
Loans held by it as collateral for its existing loan), without such
indebtedness being paid or the rights of such holder to take such
action being waived, stayed or subjected to a standstill or other
agreement of such holder to forbear from exercising remedies,
reasonably satisfactory to the Creditors;
(vi) the Company shall, at any time on or after the
date of the closing of the Asset Sale, repay all or any portion of the
Loans, except any such repayment of the Loans in accordance with
Section 5 hereof;
(vii) The Company shall fail to make any payment
required to be made in accordance with Section 5 or 14 hereof;
(viii) The Company shall incur or pay any Operating
Expenses or incur or pay any obligations, except as expressly
contemplated hereby or by the Monthly Statement.
(ix) The Company shall breach the covenant set
forth in Section 8(g) or Section 5(h) hereof.
(c) The Standstill Period shall terminate automatically
without notice or other action by any Creditor upon the occurrence of any of the
following:
(i) the Company or any Designated Subsidiary shall
consent to the appointment of or taking possession by a receiver,
assignee, custodian, sequestrator, trustee or liquidator (or other
similar official) of itself or of a substantial part of its property;
or the Company or any Designated Subsidiary shall admit in writing (to
any creditor, governmental authority or judicial court or tribunal) its
inability to pay its debts generally as they come due or shall fail
generally to pay its debts as they become due, or shall make a general
assignment for the benefit of its creditors; or the Company or any
Designated Subsidiary shall file a voluntary petition in bankruptcy or
a voluntary petition or answer seeking liquidation, reorganization or
other relief with respect to itself or its debts under the Federal
bankruptcy laws, as now or hereafter constituted or any other
applicable Federal or State bankruptcy, insolvency or other similar
law, or shall consent to the entry of an order for relief in an
involuntary case under any such law; or the Company or any Designated
Subsidiary shall file an answer admitting the material allegations of
a petition filed against the Company or such Designated Subsidiary in
any such proceeding, or otherwise seek relief under the provisions of
any existing or future Federal or State bankruptcy, insolvency or other
similar law providing for the reorganization or winding-up of
corporations, or providing for an arrangement, agreement,
composition, extension or adjustment with its creditors; or the
Company or any Designated Subsidiary shall take or publicly announce
its intention to take corporate action in furtherance of any of the
foregoing; or
(ii) an order, judgment or decree shall be entered in
any proceeding by any court of competent jurisdiction appointing,
without the consent of the Company, a receiver, trustee or liquidator
of the Company or any Designated Subsidiary or of any substantial part
of their respective property, or any substantial part of the property
of the Company or any Designated Subsidiary shall be sequestered, and
any such order, judgment or decree of appointment or sequestration
shall remain in force undismissed, unstayed or unvacated for a period
of 30 days after the date of entry thereof; or
(iii) an involuntary petition against the Company or
any Designated Subsidiary in a proceeding under the Federal bankruptcy
laws or other insolvency laws, as now or hereafter in effect, shall be
filed and shall not be withdrawn or dismissed within 30 days
thereafter, or a decree or order for relief in respect of the Company
or any Designated Subsidiary shall be entered by a court of competent
jurisdiction in an involuntary case under the Federal bankruptcy laws,
as now or hereafter constituted, or, under the provisions of any law
providing for reorganization or winding-up of corporations which may
apply to the Company or any Designated Subsidiary, any court of
competent jurisdiction shall assume jurisdiction, custody or control
of the Company or any Designated Subsidiary or of any substantial part
of their respective property and such jurisdiction, custody or
control shall remain in force unrelinquished, unstayed or
unterminated for a period of 30 days.
Section 2. Grant of Security Interest. (a) In order to secure
full and timely payment of the Obligations under the Loan Agreement, and to
secure the performance of all of the other obligations of the Company under the
Loan Documents, the Company and each Subsidiary hereby mortgages, pledges and
assigns and transfers to the Facility Lenders, and grants to the Facility
Lenders, a continuing perfected security interest in, and a lien in the
Collateral. The Facility Lenders agree to release their lien in respect of any
Pledged Loan, which is sold by the Company (i) to the Existing Lender for a
purchase price not less than the advance rate (or, in the case of any Sixty Day
Mortgage Loans or Ninety Day Mortgage Loans, at not less than 80% or 68.6% of
the principal outstanding on such Mortgage Loans, respectively) in respect of
such Pledged Loan, (ii) pursuant to Section 8(f) hereof, (iii) pursuant to a
securitization of Mortgage Loans, or (iv) in a sale to an unaffiliated third
party.
(b) The Facility Lenders agree for the benefit of the Existing Lender
that during the continuance of the Standstill Period and thereafter until the
earlier of (i) 91 days after the satisfaction of the Existing Obligations in
full, (ii) the exercise by the Existing Lender of any right to attach,
sequester, foreclose or otherwise exercise remedies with respect to the
Collateral, and (iii) 180 days after the expiration or earlier termination of
the Standstill Period, the Facility Lenders will not seek to attach, sequester,
foreclose, levy on or otherwise exercise remedies with respect to the
Collateral, provided that nothing in this Section 2(b) shall restrict the
Facility Lenders from commencing suit on its Notes or for payment of its Loan,
the BankBoston Debt, the Facility Lender Advances or enforcement (other than by
exercising remedies with respect to the Collateral) of any other obligation
owing to it under the Loan Documents or otherwise by the Company.
Section 3. Acknowledgment and Priorities. (a) The Existing
Lender hereby acknowledges and consents to the entrance by the Company into the
Loan Documents and the granting of the lien in the Collateral granted pursuant
to Section 2; provided, however , notwithstanding anything to the contrary
contained in the Loan Agreement, the Notes or any of the Loan Documents, the
parties hereto acknowledge and agree that any security interest in or other
rights with respect to any Collateral granted to secure the Existing Obligations
under the Existing Loan Agreement or otherwise has and shall have priority over
any security interest in such Collateral granted pursuant to this Agreement, the
Loan Agreement or the other Loan Documents irrespective of:
(i) the time, order or method of attachment or perfection of
the security interest created by this Agreement, the Loan Agreement or
any Loan Document;
(ii) the time or order of filing or recording of financing
statements or other documents filed or recorded to perfect security
interests in any Collateral;
(iii) anything contained in any filing or agreement to which
the Facility Lenders, the Company, or the Collateral Agent under the
Security Documents now or hereafter may be a party, and
(iv) the rules for determining priority under the UCC or other
laws governing the relative priorities of secured creditors.
(b) The Existing Lender hereby agrees, and the Company
acknowledges, that, promptly following the expiration of 91 days after payment
in full of all the Existing Obligations hereunder, any Collateral, including any
books and records (including, without limitation, computer files, printouts and
other computer materials and records) relating to the Collateral, as well as all
proceeds and products of such Collateral, held by it shall be held for the
benefit of the Facility Lenders, provided that if such Collateral is then
subject to the prior lien of another creditor, the Existing Lender may hold it
for the benefit of such other creditor and the Facility Lenders as their
interests may appear. If the Existing Lender has elected not to hold such
Collateral following payment in full of the Existing Obligations, it shall
promptly forward any Collateral, including any books and records (including,
without limitation, computer files, printouts and other computer materials and
records) relating to the Collateral, as well as all proceeds and products of
such Collateral, to the Collateral Agent, provided that if such Collateral is
then subject to the prior lien of another creditor, the Existing Lender may
forward such Collateral, proceeds and products thereof to such other creditor
or, in the event of a dispute, to such party as a court of competent
jurisdiction may direct.
(c) Nothing contained in this Agreement shall alter or impair
the Existing Lender's rights under the Existing Loan Documents from and after
the termination of the Standstill Period in accordance herewith or be
interpreted to mean that the Existing Lender has any obligation under the
Existing Loan Documents or otherwise to return any proceeds received on a sale
or deemed sale of any Pledged MBS or Pledged Loan to the Company or any
Subsidiary, except as expressly provided herein.
(d) Each of the parties hereto consents to the transactions
contemplated by the Asset Purchase Agreement.
Section 4. Reserved Rights. (a) Notwithstanding anything in
this Agreement to the contrary, the Company and the Facility Lenders agree that
this Agreement shall in no manner impair any right of the Existing Lender under
the Existing Loan Agreement to enforce any condition precedent to any obligation
it may have thereunder to make future Advances to the Company and its
Subsidiaries, nor shall this Agreement limit the right of the Existing Lender to
make Margin Calls in respect of the hedging transactions with respect to U.S.
treasury securities that the Company may have entered into with the Existing
Lender outside of the Existing Loan Documents. All rights and obligations of the
Existing Lender under the Existing Loan Documents to make Advances or not make
Advances shall not be affected by this Agreement.
(b) In addition and notwithstanding anything to the contrary
contained herein (but subject to Section 8(f) hereof), this Agreement shall not
(i) apply to any Advances made from and after the date hereof, or any other
obligation of the Company or any of its Subsidiaries to the Existing Lender or
any of its Affiliates incurred from and after the date hereof or (ii) limit the
rights of the Existing Lender or any Affiliate thereof (x) subject to Section
8(f) hereof, to purchase Mortgage Loans from the Company or any of its
Subsidiaries, (y) to receive principal and/or interest at the applicable
mortgage rate on mortgage loans purchased by the Existing Lender or any such
Affiliate from the Company or any of its Subsidiaries or (z) to sell mortgage
loans to the Company or any of its Subsidiaries, in each case including without
limitation the rights of the Existing Lender under (A) the Mortgage Loan
Purchase Agreement, dated as of October 9, 1998, among the Existing Lender, the
Company and certain of its Subsidiaries and (B) the Mortgage Loan Purchase
Agreement, dated as of December 9, 1998, between the Company and the Existing
Lender.
Section 5. Amortization. During the Standstill Period, the
following provisions contained in this Section 5 shall apply:
(a) From and after the date this Agreement becomes effective
and prior to the date of the closing of the Asset Sale, within five days
following receipt by the Existing Lender each month of Available Cash Flow from
Securitization Receivables, the Existing Lender shall apply ninety percent (90%)
of such Available Cash Flow from Securitization Receivables to the repayment of
principal of the Existing Obligations under the Existing Loan Documents secured
by the Pledged MBS's generating such Available Cash Flow from Securitization
Receivables and shall remit the balance of such Available Cash Flow from
Securitization Receivables to the Company.
(b) Upon the closing of the Asset Sale, the Company shall pay
to the Existing Lender the sum of (x) its Pro-Rata Share of the product of (A)
seventy percent (70%) and (B) the Transaction Proceeds Amount, plus (y) the
Warehouse Debt Shortfall with respect to the Existing Lender and minus (z) the
Xxxxxxxx Make-Up Amount, in each case to be applied to repayment of principal of
the Existing Obligations under the Existing Loan Documents.
(c) Upon the closing of the Asset Sale, the Company shall pay
to the Facility Lenders and the Henschels, as their interests may appear
pursuant to the Xxxxxxxx Intercreditor Agreement, the sum of (x) the product of
(A) thirty percent (30%) and (B) the Transaction Proceeds Amount plus (y) the
product of (A) three (3) and (B) the Xxxxxxxx Make-Up Amount, in the case of the
Facility Lenders, to be applied to repayment of principal of the BankBoston Debt
until such Debt is paid in full, and then to repayment of the Loans and any
other obligations due the Facility Lenders, and, in the case of the Henschels,
to be applied to repayment of the Xxxxxxxx Note Obligations.
(d) Upon the closing of the Asset Sale, the Company shall pay
to the Facility Lenders the sum of the CMC Advance Proceeds and the Delinquent
Interest Advance Shortfall Amount, in each case to be applied to repayment of
all obligations owing in respect of any outstanding Facility Lender Advances.
(e) Upon the closing of the Asset Sale, the Company shall pay
or reimburse the Existing Lender and the Facility Lenders for any Transaction
Expenses and Professional Fees then due and owing.
(f) Upon the closing of the Asset Sale, the Company shall
cause CMC to pay the Tax Escrow Amount to the escrow agent under the Tax Escrow
Agreement for deposit thereunder and application in accordance with the terms
thereof.
(g) Upon the closing of the Asset Sale, the Company shall
cause CMC to pay the Securitization Escrow Amount to the escrow agent under the
Securitization Escrow Agreement for deposit thereunder and application in
accordance with the terms thereof.
(h) Upon the closing of the Asset Sale, the Company shall
cause CMC to deposit a portion of the sale proceeds in an amount equal to the
NLC Amount in a separate bank account with a bank reasonably satisfactory to the
Creditors, solely for the benefit of the Creditors (and not for the benefit of
the Company), and not commingled with any funds of the Company, which shall be
applied from time to time solely for the purpose of making advances for
warehouse financing to National Lending Center, Inc., such warehouse financing
to mature not later than 90 days after the closing of the Asset Sale and to be
on terms and pursuant to documentation reasonably satisfactory to the Creditors,
which financing shall provide for all repayments in respect of such financing to
be paid directly for deposit to such account. Upon the date which is 90 days
after the closing of the Asset Sale and from time to time thereafter upon
receipt of the net proceeds of such warehouse financing, the amount on deposit
in such account shall, pursuant to irrevocable instructions given by the Company
at or before the closing of the Asset Sale, be immediately paid to the escrow
agent under the NLC Escrow Agreement for deposit and application thereunder.
(i) Upon the closing of the Asset Sale, the Company shall
apply the SafeCo Shortfall Amount to payment of the insurance premiums payable
to SafeCo.
(j) Upon the closing of the Asset Sale, the Company shall pay
to the Existing Lender and the Facility Lenders any accrued and unpaid interest
on the Existing Obligations, the BankBoston Debt and the Loan Agreement to but
not including the date of such closing.
(k) Any Reserve Release shall be made by the relevant escrow
agent pursuant to the Securitization Escrow Agreement, the NLC Escrow Agreement
or the Tax Escrow Agreement, as the case may be, to the Existing Lender, the
Other Existing Lenders, the Facility Lenders and the Henschels, as their
interests may appear pursuant to such escrow agreements.
(l) Promptly upon receipt by the Company of any Mortgage Sale
Excess Proceeds, the Company shall pay (x) to the Existing Lender an amount
equal to its Pro-Rata Share of the product of seventy percent (70%) and any
Mortgage Sale Excess Proceeds, to be applied to repayment of principal of the
Existing Obligations under the Existing Loan Documents, and (y) to the Facility
Lenders and the Henschels, as their interests may appear pursuant to the
Xxxxxxxx Intercreditor Agreement, the product of thirty percent (30%) and any
Mortgage Sale Excess Proceeds, in the case of the Facility Lenders, to be
applied to repayment of principal of the BankBoston Debt until such Debt
is paid in full, and then to repayment of the Loans and any other obligations
due the Facility Lenders, and, in the case of the Henschels, to be applied to
repayment of the Xxxxxxxx Note Obligations.
(m) Promptly upon the sale of any Mortgage Loan securing (or
purchased subject to a repurchase obligation comprising) any Existing
Obligations that gives rise to a Mortgage Sale Shortfall, the Company shall pay
the Existing Lender the amount of such Mortgage Sale Shortfall.
(n) Within five days following receipt by the Existing Lender
of Available Cash Flow from Securitization Receivables during the month in which
the closing of the Asset Sale occurs, the Existing Lender shall (a) apply ninety
percent (90%) of the Available Cash Flow from Securitization Receivables for
such month to the repayment of principal of the Existing Obligations under the
Existing Loan Documents and (b) remit the balance of such Available Cash Flow
from Securitization Receivables to the Facility Lenders for payment to the
Facility Lenders and the Henschels, as their interests may appear pursuant to
the Xxxxxxxx Intercreditor Agreement, in the case of the Facility Lenders, for
application to the repayment of principal of the BankBoston Debt, until such
Debt is paid in full, and then to repayment of principal of the Loans and any
other obligations due the Facility Lenders, and, in the case of the Henschels,
to be applied to repayment of the Xxxxxxxx Note Obligations.
(o) Not later than the 15th calendar day (or the next business
day, if the 15th is not a business day) after the end of each calendar month
ending on or after the closing of the Asset Sale, the Company shall prepare and
deliver to the Existing Lender a Monthly Statement and, following the receipt of
such Monthly Statement by the Existing Lender, the Available Post-Transaction
Cash Flow with respect to such month shall be distributed in each such month as
follows:
(i) within five days following receipt by the Existing Lender of
the Monthly Statement for such month but not sooner than one
business day after receipt by the Existing Lender of the
Available Cash Flow from Securitization Receivables paid to
the Existing Lender that month, the Existing Lender or the
Collateral Agent, if it shall have received the
Collateral pursuant to Section 3(b) hereof, shall remit to the
Company the Existing Lender's Allocable Share of the Monthly
Cash Flow Shortfall Amount, if any, from such Available Cash
Flow from Securitization Receivables, if any; provided , that
in the event there is a dispute (including any dispute arising
from the failure of the requisite Creditors to approve any
Monthly Statement) with respect to the calculation of the
Monthly Cash Flow Shortfall Amount, the Existing Lender shall
remit to the Company such portion of the Monthly Cash Flow
Shortfall Amount as calculated by the Company as is not in
dispute and shall remit any balance promptly upon resolution
of such dispute (it being understood and agreed that the
Existing Lender's obligation under this clause (i) for any
month shall not exceed the Available Cash Flow from
Securitization Receivables actually received that month);
(ii) until such time as the Existing Obligations have been repaid
in full:
(A) the Existing Lender shall (a) apply ninety percent (90%)
of the Available Cash Flow from Securitization Receivables for
such month remaining after the payment, if any, of the
Existing Lender's Allocable Share of the Monthly Cash Flow
Shortfall Amount pursuant to subsection (i) above, to the
repayment of principal of the Existing Obligations under the
Existing Loan Documents and (b) remit the balance, if any, of
such Available Cash Flow from Securitization Receivables to
the Facility Lenders for payment to the Facility Lenders and
the Henschels, as their interests may appear pursuant to the
Xxxxxxxx Intercreditor Agreement, in the case of the Facility
Lenders, for application to the repayment of principal of the
BankBoston Debt, until such Debt is paid in full, and then to
repayment of principal of the Loans and any other obligations
due the Facility Lenders, and, in the case of the Henschels,
to be applied to repayment of the Xxxxxxxx Note Obligations;
and
(B) the Company shall (a) remit to the Existing Lender for
application to the repayment of principal of the Existing
Obligations under the Existing Loan Documents the Existing
Lender's Allocable Share of an amount equal to 90% of the
Monthly Free Cash Flow Amount, if any, and (b) remit an amount
equal to 10% of the Monthly Free Cash Flow Amount to the
Facility Lenders for payment to the Facility Lenders and the
Henschels, as their interests may appear pursuant to the
Xxxxxxxx Intercreditor Agreement, in the case of the Facility
Lenders, to be applied
to repayment of principal of the BankBoston Debt until such
Debt is paid in full, and then to repayment of principal of
the Loans and any other obligations due the Facility Lenders,
and, in the case of the Henschels, to be applied to repayment
of the Xxxxxxxx Note Obligations.
(iii) after such time as the Existing Obligations shall have been
repaid in full and until all obligations due to the Facility
Lenders and the Henschels have been paid in full:
(A) the Existing Lender, or the Collateral Agent, if it shall
have received the Collateral pursuant to Section 3(b) hereof,
shall remit the Existing Lender's Allocable Share of the
Monthly Cash Flow Shortfall Amount to the Company as provided
in subsection (i) above and remit 100% of the Available Cash
Flow from Securitization Receivables remaining after the
remittance, if any, in respect of the Monthly Cash Flow
Shortfall Amount pursuant to subsection (i) above, to the
Facility Lenders for payment to the Facility Lenders and the
Henschels, as their interests may appear pursuant to the
Xxxxxxxx Intercreditor Agreement, in the case of the Facility
Lenders, to be applied to repayment of principal of the
BankBoston Debt until such Debt is paid in full, and then to
repayment of principal of the Loans and any other obligations
due the Facility Lenders, and, in the case of the Henschels,
to be applied to repayment of the Xxxxxxxx Note Obligations,
and
(B) the Company shall remit 100% of the Monthly Free Cash Flow
Amount, if any, to the Facility Lenders and the Henschels, as
their interests may appear pursuant to the Xxxxxxxx
Intercreditor Agreement, in the case of the Facility Lenders,
to be applied to repayment of principal of the BankBoston Debt
until such Debt is paid in full, and then to repayment of
principal of the Loans any other obligations due the Facility
Lenders, and, in the case of the Henschels, to be applied to
repayment of the Xxxxxxxx Note Obligations.
(p) The Company shall immediately repay the amount outstanding
under
the Existing Loan Documents by the amount equal to the Net Proceeds of Sale of
Securitization Receivables in respect of any Pledged MBS and the net proceeds of
any sale of Mortgage Loans comprising a portion of the Collateral, in each case
which are sold or otherwise disposed of by the Company or any Subsidiary. The
Company shall not sell or otherwise dispose of any Pledged MBS or any such
Mortgage Loan without the Existing Lender's and, in the case of any Pledged MBS,
each other Creditor's consent, such consent not to be unreasonably withheld or
delayed by the Existing Lender, such other Creditors or the Company (it being
understood and agreed that the delivery by the Existing Lender of a release of
its lien in respect of a Mortgage Loan being sold shall constitute conclusive
evidence of such consent). The parties agree that it would be reasonable for the
Existing Lender and each other Creditor to withhold its consent to any such sale
if, in its sole discretion, the Existing Lender or, in the case of any sale of
any Pledged MBS, such other Creditor concludes that (i) such sale will impair
its ability to be paid the Existing Obligations or the obligations due such
other Creditor, (ii) such sale will adversely affect the Available Cash Flow
from Securitization Receivables or Available Cash Flow from Other Creditor
Residuals, as the case may be, (iii) the selling price for the Pledged MBS or
any such Mortgage Loan should be higher or (iv) the Pledged MBS or any such
Mortgage Loan has not been adequately marketed.
(q) In the event the Company shall fail to pay when due any
amount due to the Existing Lender under this Agreement, the Existing Lender may
set off such amount against Available Cash Flow from Securitization Receivables
or payments on Pledged Loans otherwise payable to the Company hereunder.
Section 6. Conditions Precedent. The effectiveness of this
Agreement shall be subject to the condition that each of the other existing
lenders listed on Schedule I (the "Other Existing Lenders") shall have entered
into an Other Intercreditor Agreement in the form annexed hereto, and the
Company, the Facility Lenders and the Henschels shall have entered into the
Xxxxxxxx Intercreditor Agreement and the Company, the Creditors and the
applicable escrow agents shall have entered into the Tax Escrow Agreement, the
NLC Escrow Agreement and the Securitization Escrow Agreement. The Company shall
furnish the Existing Lender complete and correct copies of each such Other
Intercreditor Agreement and the Xxxxxxxx Intercreditor Agreement within one
business day of its execution.
Section 7. Certain Definitions.
"Advance" means any advance made by the Existing Lender under
the Existing Loan Agreement.
"Allocable Share" means, with respect to the Monthly Cash Flow
Shortfall Amount, the percentage obtained by dividing (i) Available Cash Flow
from Securitization Receivables for such month by (ii) the sum of Available Cash
Flow from Securitization Receivables and Available Cash Flow from Other Creditor
Residuals for such month and, with respect to any Monthly Free Cash Flow Amount,
means the percentage determined by dividing (i) the aggregate amount of Residual
Debt then outstanding owing to the Existing Lender by (ii) the aggregate amount
of Residual Debt then outstanding owing to the Existing Lender or any Other
Residual Lender.
"Asset Sale" has the meaning specified in the recitals.
"Available Cash Flow from Other Creditor Residuals" means the
amount of any distribution with respect to, or repayment of, the Residuals
pledged or sold, subject to repurchase obligations, by the Company and its
Subsidiaries to any Other Existing Lender and accepted by such Lender in
connection with the financing of such Residuals.
"Available Cash Flow from Securitization Receivables" means
the amount of any distribution with respect to, or prepayment of, any Pledged
MBS.
"Available Post-Transaction Cash Flow" means the sum of (i)
the Available Cash Flow from Securitization Receivables, (ii) the Available Cash
Flow from Other Creditor Residuals, (iii) the Non-Residual Cash Proceeds, and
(iv) plus or minus the Operating Expense Differential, (v) minus the Operating
Expenses for the third succeeding month (except for any such month to which the
Initial Operating Expenses Amount relates) and (vi) minus for each of the months
of January and February, 2000, the cash interest payable to Creditors for that
month.
"BankBoston Debt" means the indebtedness of the Company owing
to the Facility Lenders in respect of the (i) Bridge Loan and Security
Agreement, dated as of October 10, 1997, as amended from time to time, by and
among the Company, certain of its Subsidiaries and BankBoston N.A., to which the
GSCP Funds have succeeded by assignment and (ii) a Loan and Security Agreement,
dated December 31, 1996, as amended from time to time, by and among the Company,
certain of its Subsidiaries and BankBoston N.A., to which the GSCP Funds have
succeeded by assignment.
"Business Plan" means a business plan of the Company and its
Subsidiaries prepared each month, which shall not provide for the conduct of any
business except that permitted pursuant to Section 8(g) hereof, and showing on a
monthly basis (a) an estimate of all Operating Expenses for the succeeding
twelve month period, and (b) actual Operating Expenses for the prior three
months (or such shorter period commencing on the day of the closing of the Asset
Sale), which plan shall have been prepared by the Company and approved, in the
case of the Initial Business Plan and the Business Plan for each successive
twelve-month period succeeding that covered by the Initial Business Plan (each
such Business Plan so approved, a "Subsequent Approved Business Plan"), by GSCP
and two of the other Creditors, or, if there are at least one but fewer than
three other Creditors with outstanding Existing Obligations (as defined herein
or in their respective Other Intercreditor Agreements), by GSCP and at least one
such Other Creditor and, in the case of each other Business Plan, by GSCP, such
approval not to be unreasonably withheld or delayed.
"Change of Control" means the occurrence of any of the
following events (other than as a consequence of the issuance of the Preferred
Stock to the Facility Lenders upon exercise of the Exchange Option or the
closing of the Asset Sale):
(i) the Company consummates any sale, lease, exchange
or other disposition of all or substantially all of the assets
of the Company, in any transaction or series of transactions
not in the ordinary course of business and not contemplated by
a Business Plan; or
(ii) the Company engages in a merger, consolidation
or similar business combination with any third party.
"CMC Advance Proceeds" means any payments received by the
Company from CMC upon the closing of the Asset Sale in connection with CMC's
purchase from the Company of certain delinquent interest servicing advances
funded by and securing the Facility Lender Advances.
"Collateral" means (i) any Eligible Asset pledged by the
Borrower or its Subsidiaries and accepted by the Existing Lender in connection
with either an Advance or in response to a Margin Call; (ii) the contractual
right to receive payments, including the right to payments of principal and
interest and the right to enforce such payments, arising
from or under any of the Eligible Assets; (iii) the contractual right to service
each Pledged Loan; (iv) any other right, interest or property of the Company or
any Subsidiary now or hereafter securing the performance by the Company or any
Subsidiary of the Existing Obligations; and (v) any and all proceeds, payments,
income, profits and products thereof, and all files and records relating
thereto.
"Common Stock" means the Company's common stock, par value
$0.001 per share.
"Company" means IMC Mortgage Company, a Florida corporation,
and any successor by merger and any entity purchasing all or substantially all
of the assets of the Company (other than pursuant to the Asset Purchase
Agreement).
"Creditor" means any of the Facility Lenders, the Existing
Lender or any Other Existing Lender.
"Delinquent Interest Advance Shortfall Amount" means the
amount of any obligations owing to the Facility Lenders in respect of the
Facility Lender Advances after giving effect to the payment by the Company to
the Facility Lenders of the CMC Advance Proceeds, which is estimated to be
approximately the amount set forth on Schedule III hereto corresponding to the
line entitled "Delinquent interest advance shortfall."
"Delinquent Mortgage Loan" means any Mortgage Loan which, as
of any date of determination, is more than 90 days delinquent in payment of any
principal or interest due thereunder.
"Designated Subsidiary" means National Lender Center until 366
days after the date on which any remaining advances made by the Company to
National Lending Center, Inc. shall have been repaid or written off and the net
proceeds thereof paid to the escrow agent under the NLC Escrow Agreement
pursuant to Section 5(h) hereof.
"Eligible Asset" means any Pledged MBS or Pledged Loan.
"Xxxxxxxx Make-Up Amount" means the product of (i) 25% and
(ii) the excess if any of (A) $600,000 over (B) the amount the Henschels would
have received pursuant to Section 7(a) of the Henschels Intercreditor Agreement
if the Facility Lenders
had no obligation to pay the Minimum Payment (as defined in Section 7(a) of the
Henschels Intercreditor Agreement).
"Initial Business Plan" means the initial Business Plan, a
copy of which is attached hereto as Schedule IV.
"Initial Operating Expenses Amount" means a good faith
estimate of the Company of Operating Expenses for the period commencing with the
day of the closing of the Asset Sale and ending on the last day of the third
full calendar month thereafter (except for cash interest payable to the
Creditors for the months of January and February, 2000).
"LIBOR" means 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).
"Margin Call" means the right of the Existing Lender to give
notice to require the Company to transfer to the Existing Lender cash or
additional Collateral.
"Monthly Free Cash Flow Amount" means, for any month, the
amount, if any, by which (i) the sum of (x) the Non-Residual Cash Proceeds, and
(y) any negative Operating Expense Differential exceeds (ii) the sum of (a) the
Operating Expenses for the third succeeding month (but only to the extent not
provided for in the Initial Operating Expenses Amount), (b) any positive
Operating Expense Differential, in each case, as set forth on the Monthly
Statement and (c) for each of the months of January and February, 2000, the cash
interest payable to the Creditors for that month.
"Monthly Cash Flow Shortfall Amount" means, for any month, the
amount, if any, by which (i) the sum of (a) the Operating Expenses projected by
the Company for the third succeeding month (but only to the extent not provided
for in the Initial Operating Expenses Amount), (b) any positive Operating
Expense Differential, and (c) for each of the months of January and February,
2000, the cash interest payable to the Creditors for that month exceeds (ii) the
sum of (x) the Non-Residual Cash Proceeds, and (y ) any negative Operating
Expense Differential, in each case, as set forth on the Monthly
Statement.
"Monthly Statement" means a monthly cash flow statement and
projection prepared by the Company and approved in advance by GSCP or, if GSCP
declines to approve such statement, by two of the three other Creditors (and, if
the Operating Expenses (other than taxes, cash interest payable on any
obligations of the Company and any Mortgage Sale Shortfall) to be incurred in
any month are greater than the Operating Expenses (other than taxes, cash
interest payable on any obligations of the Company and any Mortgage Sale
Shortfall) for such month contained in the Initial Business Plan or any
Subsequently Approved Business Plan by more than (i) 10%, by two of the three
other Creditors, and (ii) 25%, by each Creditor), setting forth the following:
(i) the Available Cash Flow from Securitization Receivables received during the
prior month, (ii) the Available Cash Flow from Other Creditor Residuals received
during the prior month, (iii) the Non-Residual Cash Proceeds received by the
Company during the prior month, (iv) the amount of any Reserve Release during
the prior month, (v) the amount remaining on deposit under the Tax Escrow
Agreement, the NLC Escrow Agreement and the Securitization Escrow Agreement,
respectively, (vi) the estimated Operating Expenses to be incurred by the
Company and its Subsidiaries during the current month and the third succeeding
month, consistent with the Business Plan, (vii) the Operating Expense
Differential, (viii) any Mortgage Sale Excess Proceeds received or Mortgage Sale
Shortfall incurred, as the case may be, during the prior month, (ix) any Monthly
Cash Flow Shortfall Amount or Monthly Free Cash Flow Amount, as the case may be,
and, in the case of the Monthly Cash Flow Shortfall Amount, the Existing
Lender's and each Other Residual Lender's Allocable Share thereof, (x) the
Business Plan, and (xi) a capitalization table showing the indebtedness owing to
each creditor of the Company both as of the end of the prior month and after the
application of all amounts to be paid to such creditor pursuant to this Monthly
Statement and Section 5 hereof.
"Mortgage Loan" means any first-lien or second-lien
residential mortgage loan originated or serviced by the Company or its
Subsidiaries.
"Mortgage Sale Excess Proceeds" means (i) with respect to any
Sixty Day Mortgage Loan, the amount of any proceeds from the sale or other
disposition of such loan in excess of eighty percent (80%) of the principal
outstanding on such Sixty Day Mortgage Loan as of November 5, 1999, and (ii)
with respect to any Ninety Day Mortgage Loan, the amount of any proceeds from
the sale or other disposition of such loan in excess of sixty-eight and 60/100's
percent (68.6%) of the principal outstanding on such Ninety Day Mortgage Loan as
of November 5, 1999.
"Mortgage Sale Shortfall" means (i) with respect to any Sixty
Day Mortgage Loan, the amount of any deficit of any proceeds from the sale or
other disposition of such loan relative to eighty percent (80%) of the principal
outstanding on such Sixty Day Mortgage Loan as of November 5, 1999, (ii) with
respect to any Ninety Day Mortgage Loan, the amount of any deficit of any
proceeds from the sale or other disposition of such loan relative to sixty-eight
and 60/100's percent (68.6%) of the principal outstanding on such Ninety Day
Mortgage Loan as of November 5, 1999 and (iii) with respect to any Mortgage Loan
(other than any Sixty Day Mortgage Loan or Ninety Day Mortgage Loan) sold or
otherwise disposed of after the closing of the Asset Sale and not included in
the proposed securitization of Mortgage Loans to which the Securitization Escrow
Agreement relates, any amount remaining outstanding on the applicable Creditor's
advances in respect of such Mortgage Loan after applying the net proceeds of the
sale of such Mortgage Loan (and after applying any amount distributed to the
applicable Creditor under the Securitization Escrow Agreement in respect of such
Mortgage Loan to repayment of the related advance) to repayment of the related
advance.
"Net Asset Sale Proceeds" means the cash proceeds received by
the Company upon the closing of the Asset Sale (including, without limitation,
the proceeds from the purchase by CMC of the servicing advances), net of any
Transaction Expenses and Professional Fees, and exclusive of the CMC Advance
Proceeds.
"Net Proceeds of Sale of Securitization Receivables" means the
proceeds, net of any reasonable out-of-pocket costs of sale or disposition,
realized by the Company or any Subsidiary from any sale, lease or other
disposition of any Pledged MBS.
"Ninety Day Mortgage Loans" means Mortgage Loans financed
(including by purchase subject to a repurchase obligation) by a Creditor which
are more than 90 days delinquent on November 5, 1999.
"NLC Amount" means the amount set forth on Schedule III hereto
corresponding to the line entitled "NLC 90-day warehouse financing", which
represents the amount required to be reserved for warehouse financing to be
provided by the Company to National Lending Center, Inc. for a period not to
exceed 90 days following
the closing of the Asset Sale.
"NLC Escrow Agreement" means an escrow agreement among the
Company, each of the Creditors, and a bank acting as escrow agent, reasonably
acceptable to each Creditor, which agreement is satisfactory in form and
substance to each Creditor, providing for the deposit of the proceeds of the
warehouse financing to be provided by the Company to National Lending Center,
Inc. upon the closing of the transactions contemplated by the Asset Purchase
Agreement into escrow thereunder.
"Non-Residual Cash Proceeds" means any cash inflow to the
Company other than the Available Cash from Securitization Receivables, the
Available Cash from Other Creditor Residuals and the cash proceeds received upon
the closing of the Asset Sale, but only to the extent such cash proceeds are
applied or remain in reserve for application to the purpose for which such
proceeds were reserved as contemplated by Schedule III hereto.
"One-Time Working Capital Amount" means an amount representing
the Company's good faith estimate of the amount required to be reserved for the
payment of certain expenses and the run off of certain working capital items and
set forth on Schedule III hereto corresponding to the line entitled "One-time
working capital amount."
"Operating Expenses" means, for any period, the operating
expenses of the Company and its Subsidiaries incurred or to be incurred in
accordance with the current Monthly Statement or Initial Operating Expenses
Amount estimate, as the case may be, including, without limitation, any Mortgage
Sale Shortfall and any cash interest payable on any obligations of the Company.
"Operating Expense Differential" means, with respect to any
Monthly Statement, the difference (positive or negative) between the actual
Operating Expenses for the prior month and the estimated Operating Expenses for
such month reflected in the prior Monthly Statement (or, for the first such
statement, in the Initial Business Plan).
"Other Existing Lenders" has the meaning specified in Section
6.
"Other Intercreditor Agreements" means the separate
intercreditor agreements among the Company, an Other Existing Lender and the
Facility Lenders.
"Other Residual Lenders" means the Other Existing Lenders
which are
owed Residual Debt.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Pledged Loan" means any Mortgage Loan or Wet Mortgage Loan
that is pledged by the Company or its Subsidiaries and accepted by the Existing
Lender in connection with an Advance.
"Pledged MBS" means any residual, subordinated or interest
strip class of asset-backed security (i) issued in connection with a
securitization in which the Existing Lender or its designee acted as lead or
co-lead underwriter or placement agent and (ii) pledged by Company and its
Subsidiaries and accepted by the Existing Lender in connection with an Advance.
"Pro-Rata Share" means the fraction derived by dividing (A)
the Residual Debt owing to the Existing Lender by (B) the aggregate amount of
the Company's obligations in respect of Residual Debt, determined as of the date
of the closing of the Asset Sale.
"Reserve Release" means any release of funds to the Existing
Lender, the Other Existing Lenders, the Facility Lenders or the Henschels
pursuant to the Securitization Escrow Agreement, the Tax Escrow Agreement or the
NLC Escrow Agreement.
"Residual" means any residual, subordinated or interest strip
class of asset-backed security (i) issued in connection with a securitization in
which any Creditor or its designee acted as lead or co-lead underwriter or
placement agent and (ii) pledged or sold, subject to repurchase obligation, by
the Company and its Subsidiaries and accepted by such Creditor in connection
with the financing of such security.
"Residual Debt" the amount of any indebtedness of the Company
or any Subsidiary owing to the Existing Lender or any Other Existing Lender and
incurred in
connection with the financing of any Residual.
"SafeCo Shortfall Amount" means the shortfall in the amount
received from CMC in connection with CMC's purchase of certain insurance
receivables of the Company in connection with the Asset Sale compared with the
corresponding insurance premium payables, an estimate of which is set forth on
Schedule III hereto corresponding to the line entitled "SafeCo shortfall."
"Securitization Escrow Agreement" means an escrow agreement
among the Company, each of the Creditors, and a bank acting as escrow agent,
reasonably acceptable to each Creditor, which agreement is satisfactory in form
and substance to each Creditor, providing for the deposit of the Securitization
Escrow Amount upon the closing of the transactions contemplated by the Asset
Purchase Agreement into escrow thereunder.
"Securitization Escrow Amount" means the amount set forth on
Schedule III hereto corresponding to the line entitled "Securitization Escrow
Amount."
"Seller's Guide" means the "IMC Mortgage Company Client
Operations Manual", together with the underwriting guidelines of the Company and
its Subsidiaries, a true and correct copy of which was previously provided to
the Existing Lender by the Company and its Subsidiaries.
"Sixty Day Mortgage Loans" means Mortgage Loans financed
(including by purchase subject to a repurchase obligation) by a Creditor which
are more than 60 days but not more than 90 days delinquent on November 5, 1999.
"Sold Mortgage Loan" means any Mortgage Loan (other than any
Sixty Day Mortgage Loan or Ninety Day Mortgage Loan), sold or otherwise disposed
of by the Company prior to the closing of the Asset Sale.
"Standstill Period" means a period ending on the first to
occur of (i) the repayment in full of all Existing Obligations, all obligations
owed to the Facility Lenders and the Xxxxxxxx Note Obligations, (ii) termination
of the Standstill Period in accordance with Section 1(b) or 1(c) hereof, ( iii)
termination of the Asset Purchase Agreement or (iv) December 3, 1999, if the
closing of the Asset Sale shall not have occurred by such date.
"Subsidiary" means, with respect to any Person, any
corporation or other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time directly or
indirectly owned by such Person.
"Tax Escrow Agreement" means an escrow agreement among the
Company, each of the Creditors, and a bank acting as escrow agent, reasonably
acceptable to each Creditor, which agreement is satisfactory in form and
substance to each Creditor, providing for the deposit of the Tax Escrow Amount
upon the closing of the transactions contemplated by the Asset Purchase
Agreement into escrow thereunder.
"Tax Escrow Amount" means the amount set forth on Schedule III
hereto corresponding to the line entitled "Tax Escrow Amount", which, together
with the NLC Amount, represents the Company's good faith estimate of the amount
required to be reserved for the payment of tax liabilities of the Company
associated with Federal and state income taxes payable with respect to the year
ended December 31, 1999.
"Transaction Expenses and Professional Fees" means any unpaid
transaction expenses or professional fees payable in connection with the Asset
Sale, the preparation or negotiation of the various intercreditor agreements,
the documentation relating to the Facility Lender Advances and any prior monthly
servicing advances, the Acquisition Agreement, the Asset Purchase Agreement, any
transactions contemplated by or related to such agreements or transactions or
otherwise, an estimate of which is set forth in Schedule III hereto,
corresponding to the line entitled "Transaction expenses and professional fees."
"Transaction Proceeds Amount" means the amount derived by
subtracting from the Net Asset Sale Proceeds (A) the Tax Escrow Amount, (B) the
Securitization Escrow Amount, (C) the One-Time Working Capital Amount, (D) the
Delinquent Interest Advance Shortfall Amount, (E) the SafeCo Shortfall Amount,
(F) the Initial Operating Expenses Amount, (G) the Warehouse Debt Shortfall and
(H) the NLC Amount.
"Warehouse Debt Shortfall" means the amount representing (i)
with respect to Sixty Day Mortgage Loans, the excess, if any, of the principal
outstanding on
the applicable Creditor's advances in respect of such Sixty Day Mortgage Loans
on November 5, 1999 over 80% of the outstanding principal amount of such Sixty
Day Mortgage Loan; (ii) with respect to Ninety Day Mortgage Loans, the excess,
if any, of the principal outstanding on the applicable Creditor's advances in
respect of such Ninety Day Mortgage Loans on November 5, 1999 over 68.6% of the
outstanding principal amount of such Ninety Day Mortgage Loan and (iii) with
respect to Sold Mortgage Loans, any amount remaining outstanding on the
applicable Creditor's advances in respect of such Sold Mortgage Loan after
applying the net proceeds of the sale of such Sold Mortgage Loan to repayment of
the related advance.
"Wet Mortgage Loan" means any residential mortgage loan
originated by the Company and its Subsidiaries in accordance with the Seller's
Guide, with respect to which all of the related documents required to be
delivered in connection with any Advance have not been deposited with the
custodian on or prior to the related Advance Date.
Section 8. Notice of Advances under the Loan Agreement; etc.
(a) The Company shall give each Creditor prompt written notice of any event
which upon notice or lapse of time or both would constitute an event of default
in respect of any of its outstanding Debt.
(b) The Company shall give the Existing Lender and the
Facility Lenders prompt written notice of any event that would permit
termination of the Standstill Period pursuant to Section 1(b) hereof.
(c) The Company shall give the Existing Lender prompt written
notice of the entering into any amendment to the Asset Purchase Agreement and
the closing of the Asset Sale.
(d) Notwithstanding the provisions of the Existing Loan
Agreement, during the Standstill Period, the Company shall pay interest on the
principal amount outstanding under the Existing Loan Agreement to the Existing
Lender weekly on Friday of each week or, if Friday is not a Business Day, on the
next Business Day and from and after the closing of the Asset Sale, the interest
rate applicable to the Existing Obligations shall be equal to LIBOR plus 300
basis points.
(e) The Company shall not repay any principal outstanding
under the Loan Agreement during the Standstill Period, except pursuant to
Section 5 hereof.
(f) In the event all remaining Mortgage Loans securing (or
purchased subject to a repurchase obligation comprising) any Existing
Obligations have not been sold by the Company on or before the date which is 180
days following the closing of the Asset Sale, the Existing Lender may buy such
Mortgage Loans at their then fair market value (as determined by independent
third-party bid) or arrange for the sale of such Mortgage Loans to third parties
at such fair market value, and the Company shall take such actions and execute
such customary agreements and instruments as may be necessary to effect such
sale and transfer good and marketable title to such Mortgage Loans to the
purchaser thereof.
(g) Until all of the Company's obligations under this
Agreement, the Other Intercreditor Agreements, the Existing Loan Documents and
the Loan Agreement have been satisfied in full, the Company shall not conduct
any business or engage in any activities other than (a) liquidating its assets
in an orderly fashion and performing its obligations under (i) the Asset
Purchase Agreement, (ii) this Agreement (including its obligations under the
Existing Loan Documents), (iii) the Other Intercreditor Agreements and the
Xxxxxxxx Intercreditor Agreement and the agreements evidencing the indebtedness
owing to such other Creditors and the Henschels, (iv) the Tax Escrow Agreement,
the NLC Escrow Agreement and the Securitization Escrow Agreement, (v) any other
agreements existing on the date hereof and (v) satisfying its other obligations
and liabilities, (b) transacting any other lawful business under its certificate
of incorporation and by-laws that is incident, necessary and appropriate to
accomplish the foregoing, including defending any actions or proceedings. The
Company shall maintain not more than a commercially reasonable number of
employees necessary to conduct the foregoing activities. The Company shall not
incur any indebtedness for borrowed money other than liabilities incurred in the
ordinary course of its business (as such business is limited under the preceding
provision), and not grant any new liens (except as may be incidental to the
foregoing permitted activities).
Section 9. Acknowledgment of Obligations. The Company
acknowledges that its obligations under the Existing Loan Documents and the lien
on the Collateral securing the Existing Obligations remain in full force and
effect, and that the Company has no defenses, counterclaims or offsets to its
obligations under the Existing Loan
Documents and that such liens are valid, perfected and enforceable. The Company
hereby waives the application of the automatic stay in any bankruptcy proceeding
in respect of the Existing Obligations and the obligations under the Loan
Documents and the Company and each Creditor consents to the modification of the
stay to permit the exercise by the Existing Lender or the Facility Lenders of
their rights in respect of the Collateral, provided that the foregoing shall not
be construed to modify the provisions of Sections 2(b) and 3 hereof. This
document shall not constitute a waiver, amendment or modification of the
Existing Loan Documents, the Existing Obligations or the Loan Documents except
as expressly referred to herein and shall not be construed as a waiver or
consent to any future action on the part of the Company that would require a
waiver or consent of the Existing Lender or the Facility Lenders, respectively,
except to the extent expressly provided herein. The Company and each Subsidiary
hereby releases the Existing Lender, its officers, directors and participants
from any and all claims in respect of the Existing Loan Documents and in respect
of actions taken or not taken in connection therewith on or prior to the date of
execution and delivery hereof, excluding, however, any obligation under any
agreement by such person for the payment of money, return of property or any
contractual obligations. Effective upon the closing of the Asset Sale and the
receipt by the Creditors of the payments to be received hereunder from the
proceeds of the Asset Sale, the Existing Lender hereby releases the executive
officers and the directors of the Company from any and all claims in respect of
the Existing Loan Documents and in respect of the actions taken or not taken in
connection therewith on or prior to the date of execution and delivery hereof,
excluding, however, any obligations under any agreement by such person for the
payment of money, return of property or any contractual obligations, and also
excluding any claims in respect of fraud or intentional misconduct.
Section 10. Amendments, Etc. No amendment, modification,
supplement, termination, consent or waiver of this Agreement or any term or
provision of this Agreement shall be effective and binding unless in writing and
signed by the Existing Lender, the Other Existing Lenders and the Facility
Lenders. Any such waiver will be effective only in the specific instance and for
the specific purpose for which it is given.
Section 11. Severability. Any provision of this Agreement
which is illegal, invalid, prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such illegality,
invalidity, prohibition or unenforceability without invalidating or impairing
the remaining provisions hereof or affecting the validity or enforceability of
such provision in any other jurisdiction.
Section 12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL OR
EQUITABLE ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR ANY TRANSACTION CONTEMPLATED HEREBY OR THE RELATIONSHIP
ESTABLISHED HEREUNDER.
Section 13. GOVERNING LAW; VENUE AND JURISDICTION. THE
VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION AND ENFORCEMENT
HEREOF AND THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES THEREOF. EACH OF THE
PARTIES HERETO SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF, AND AGREES THAT ALL
ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT MAY BE TRIED
AND LITIGATED IN, FEDERAL OR, IN THE ABSENCE OF FEDERAL SUBJECT MATTER
JURISDICTION, STATE COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK
UNLESS SUCH ACTIONS OR PROCEEDINGS ARE REQUIRED TO BE BROUGHT IN ANOTHER COURT
TO OBTAIN SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF
THE PARTIES WAIVES, TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE IN ANY PROCEEDING
BROUGHT IN ACCORDANCE WITH THE IMMEDIATELY PRECEDING SENTENCE. SERVICE OF
PROCESS, SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST SUCH PARTY
MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS
ADDRESS INDICATED IN SECTION 16.
Section 14. Expenses. In addition to the foregoing, the
Company will also reimburse the Existing Lender and the Facility Lenders
promptly for their reasonable out-of-pocket costs and expenses incurred by such
Persons or their respective employees, agents or advisors in connection with the
performance of their respective obligations and duties hereunder and, to the
extent the Existing Loan Documents so provide, under the Existing Loan
Documents, and for any reasonable fees and expenses of legal or other
professional advisors to the Existing Lender and the Facility Lenders engaged in
connection with the preparation and negotiation of this Agreement and review and
negotiation of all related documents, including the Asset Purchase Agreement and
the Loan Agreement, and monitoring performance of all related documents. If such
costs and expenses are not paid by the Company within 30 days of submission, the
Existing Lender may pay such costs and expenses from Available Cash Flow from
Securitization Receivables and payments on Pledged Loans, in which event
appropriate adjustments shall be made to such Existing Lender's and each Other
Residual Lender's Allocable Share of Available Cash Flow from Securitization
Receivables as if such costs and expenses were paid by the Company as Operating
Expenses.
Section 15. Agreement May Constitute Financing Statement. The
Company and the Existing Lender consents to the filing of this Agreement or a
photocopy thereof as a financing statement under the UCC as in effect in any
jurisdiction in which the Facility Lenders may determine such filing to be
necessary or desirable.
Section 16. Notices. All notices, requests and other
communications to any party hereunder shall be in writing and shall be given
to such party by facsimile transmission or by hand delivery at the following
address or facsimile number, or such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the other party and
each other Creditor. (a) if to the Facility Lenders, Greenwich Street Capital
Partners II, L.P., c/o Greenwich Street Capital Partners, Inc., 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn.: Xxxxxx Xxxxx; Tel: (000) 000-0000, Fax:
(000) 000-0000; with a copy to Debevoise & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attn.: Xxxxxx Xxxxxx, Esq., Tel: (000) 000-0000, Fax: (212)
000-0000; (b) if to the Company, IMC Mortgage Company, 0000 X. Xxxxxx Xxxxxx,
Xxxxx, Xxxxxxx 00000, Attn.: President, Tel: (000) 000-0000, Fax: (813)
000-0000; with a copy to Xxxxxxxx X. Xxxxxx, 000X Xxxxxxxxx Xxx, Xxxxxxxxxxxx,
Xxxxxxx 00000, Tel: (000) 000-0000, Fax: (000) 000-0000; and (c) and if to the
Existing Lender: Xxxxx Xxxxxx Real Estate Securities Inc., 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn.: Xxxxxx Xxxxxxxxxxxx, Tel: (212)
000-0000, Fax: (000) 000-0000; with a copy to Cadwalader, Xxxxxxxxxx & Xxxx, 000
Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn.: Xxxxxxx X. Xxxxxx, Esq., Tel:
(000) 000-0000; Fax: (000) 000-0000; and if to any of the Other Existing
Lenders, to such person and at the address and facsimile number provided in
Schedule II hereto. Each such notice, request or other communication shall be
effective when sent by facsimile transmission to the facsimile
number or when delivered by hand to the address specified in this Section 16 or
Schedule II hereto, provided that a facsimile transmission shall be deemed to
have been sent only so long as the transmitting machine has provided an
electronic confirmation of such transmission.
Section 17. Binding Effect; Third Party Beneficiaries. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their successors and permitted assigns, including any successor of the
Company by merger or any entity which purchases all or substantially all of the
assets of the Company (other than pursuant to the Asset Sale), and to each of
the other Creditors, and, as to Section 3(d) hereto, CMC, each of which is an
intended third-party beneficiary hereof. Neither the Facility Lenders nor the
Existing Lender may sell, assign, participate or otherwise transfer or dispose
of all or any portion of the Loan or the Existing Obligations to any Person
unless such Person shall have assumed and agreed to be bound by the terms hereof
by written instrument in form reasonably satisfactory to the Company and each
other Creditor.
Section 18. Counterparts; Section Headings. This Agreement may
be executed in any number of counterparts, each of which is an original, but all
of which together constitute but one instrument. Except as otherwise indicated,
references herein to any "Section" means a "Section" of this Agreement, and
the section headings in this Agreement are for purposes of reference only and
shall not limit or define the meaning hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the date first above written.
IMC MORTGAGE COMPANY
By: /s/
---------------------------------
Name:
Title:
XXXXX XXXXXX REAL ESTATE SECURITIES INC.
By: /s/
---------------------------------
Name:
Title:
GREENWICH STREET CAPITAL PARTNERS II, L.P.
GSCP OFFSHORE FUND, L.P.
GREENWICH FUND, L.P.
GREENWICH STREET EMPLOYEES FUND, L.P.
TRV EXECUTIVE FUND, L.P.
By: GREENWICH STREET INVESTMENTS
II, L.L.C., their General Partner
By: /s/
---------------------------------
Name:
Title: Managing Member
This Intercreditor Agreement is hereby acknowledged and agreed to by:
IMC CORPORATION OF AMERICA
IMC CREDIT CARD, INC.
IMC MORTGAGE COMPANY CANADA, LTD.
AMERICAN HOME EQUITY CORPORATION
IMC INVESTMENT CORPORATION
IMC INVESTMENT LIMITED PARTNERSHIP
ACG FINANCIAL SERVICES (IMC), INC.
AMERICAN MORTGAGE REDUCTION, INC.
CENTRAL MONEY MORTGAGE CO. (IMC), INC.
COREWEST BANC
EQUITY MORTGAGE CO. (IMC), INC.
IMCC INTERNATIONAL, INC.
MORTGAGE AMERICA (IMC), INC.
NATIONAL LENDING CENTER, INC.
NATIONAL LENDING CENTER TILT, INC.
NATIONAL LENDING GROUP, INC.
RESIDENTIAL MORTGAGE CORPORATION (IMC), INC.
By: /s/
----------------------------------
Name:
Title:
GERMAN AMERICAN CAPITAL CORPORATION
By: /s/
----------------------------------
Name:
Title:
By: /s/
----------------------------------
Name:
Title:
BEAR XXXXXXX HOME EQUITY TRUST
By: /s/
----------------------------------
Name:
Title:
BEAR XXXXXXX INTERNATIONAL LIMITED
By: /s/
----------------------------------
Name:
Title:
Schedule I
to the
Xxxxx Xxxxxx Intercreditor Agreement
Other Existing Lenders
1. Master Repurchase Agreement, dated as of March 29, 1996, as amended from time
to time, by and among Bear Xxxxxxx Home Equity Trust and the Company and certain
of the Company's Subsidiaries.
2. Master Repurchase Agreement, dated as of May 1, 1997 Between Bear, Xxxxxxx
International Limited and Industry Mortgage Company, L.P.
3. Institutional Account Agreement, dated October 23, 1996, between and among
Industry Mortgage Company, L.P. and Bear Xxxxxxx.
4. Loan and Security Agreement, dated March 17, 1998, by and among IMC Mortgage
Company, IMC Corporation of America, ACG Financial Services (IMC), Inc.,
American Mortgage Reduction, Inc., Central Money Mortgage Co. (IMC), Inc.,
Corewest Banc, Equity Mortgage Co., (IMC), Inc., Mortgage America (IMC), Inc.,
National Lending Center, Inc., National Lending Center TILT, Inc, and
Residential Mortgage Corporation (IMC), Inc., as borrowers, and German American
Capital Corporation, as lender.
5. Loan and Security Agreement, dated March 17, 1998, by and among IMC Mortgage
Company, IMC Corporation of America, ACG Financial Services (IMC), Inc.,
American Mortgage Reduction, Inc., Central Money Mortgage Co. (IMC), Inc.,
Corewest Banc, Equity Mortgage Co., (IMC), Inc., Mortgage America (IMC), Inc.,
National Lending Center, Inc., National Lending Center TILT, Inc, and
Residential Mortgage Corporation (IMC), Inc., as borrowers, and German American
Capital Corporation, as successor by assignment to Aspen Funding Corp., as
lender.
6. (i) Bridge Loan and Security Agreement, dated as of October 10, 1997, as
amended from time to time, by and among the Company, certain of its Subsidiaries
and BankBoston N.A., to which the Facility Lenders have succeeded by assignment,
and (ii) a Loan and Security Agreement, dated December 31, 1996, as amended from
time to time, by and among the Company, certain of its Subsidiaries and
BankBoston N.A., to which the Facility Lenders have succeeded by assignment.
Notice Address for Other Existing Lenders
Bear, Xxxxxxx & Co., Inc.
if to Bear, Xxxxxxx: Bear Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attn: Xxxxxx X. Cedar, Tel.: (000) 000-0000, Fax: (000) 000-0000 and
Xxxx Xxxxxxxx, Tel.: (000) 000-0000, Fax: (000) 000-0000, with a copy to;
Cadwalader, Xxxxxxxxxx & Xxxx, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn.
Xxxxx X. Xxxxxxx, Esq., Tel.: (000) 000-0000, Fax: (000) 000-0000;
Deutsche Lenders
if to German American Corporation, to: German American Capital Corporation, 00
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn.: Xxxxx Xxxxxxxxxxx, Tel.:
(000) 000-0000, Fax: (000) 000-0000, with a copy to: Deutsche Bank A.G., as
agent, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn.: Xxxx Xxxxxxx, Tel.:
(000) 000-0000, Fax: (000) 000-0000, and Xxxxxxx Xxxxx, Tel.: (000) 000-0000,
Fax: (000) 000-0000; and in either case described in clause (i) or (ii) above;
with a copy to Cadwalader, Xxxxxxxxxx & Xxxx, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attn.: Xxxxx Xxxxxxx, Esq., Tel: (000) 000-0000, Fax: (000) 000-0000
BankBoston Facility
if to the Facility Lenders, as successors in interest to BankBoston, to: the
address provided for notice to the Facility Lenders pursuant to Section 16 of
the foregoing Agreement
Sources and Uses of Cash from Asset Sale
($ 000)
Sources:
Proceeds from Asset Sale $____
Reimbursement of corporate servicing advances $____
Less discount 10.45% $____
Reimbursement of delinquent interest advance
Less discount
Net reimbursement $____
Total net sources of cash $____
Uses:
Transaction expenses and professional fees:
Debevoise & Xxxxxxxx
DLJ
Xxxxxx, Xxxxx
Bear, Xxxxxxx
Bear, Xxxxxxx
DMG
Greenwich Capital
Commercial Credit
CoreWest settlement
Others (proxy solicitation,
accountants, etc.) $____
Total transaction expenses and professional fees
Tax Escrow Amount
NLC 90-day warehouse financing
Securitization Escrow Amount
SafeCo shortfall
Delinquent interest advance shortfall
Warehouse shortfall
One-time working capital amount:
Vacation pay
Interest expense on November 15, 1999
Litigation costs
Accounts payable and accrued expenses estimated at
November 15, 1999 (IMC parent)
Accounts payable and accrued expenses estimated at
November 15, 1999 (subsidiaries)
Miscellaneous/unknown/working capital $____
Total one-time working capital amount $____
Total uses of cash $____
Excess of sources over uses of cash $____
