EXHIBIT 20.1.6
Senior Secured Note - Series B
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THIS SENIOR SECURED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY ITS
ACCEPTANCE HEREOF, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS NOTE MAY BE
OFFERED, SOLD OR OTHERWISE DISPOSED OF ONLY (1) TO THE COMPANY, (2) SO LONG AS
THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER", AS DEFINED IN RULE144A, THAT IS PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE SALE OR OTHER DISPOSITION IS BEING MADE IN RELIANCE ON RULE 144A,
(3) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE), (4) TO AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501 UNDER THE SECURITIES ACT ("ACCREDITED INVESTOR"), THAT IS ACQUIRING
THIS NOTE FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER ACCREDITED INVESTOR
FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, IF A SIGNED CERTIFICATION LETTER (A FORM OF WHICH MAY BE OBTAINED FROM THE
COMPANY) IS DELIVERED BY THE TRANSFEREE TO THE COMPANY, (5) AS OTHERWISE
PROVIDED IN THE MASTER RECAPITALIZATION AGREEMENT (AS DEFINED BELOW) OR (6)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. BY PURCHASING THIS NOTE, THE HOLDER HEREOF AGREES AND REPRESENTS
FOR THE BENEFIT OF THE COMPANY THAT (A) IT IS (1) A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN ACCREDITED INVESTOR ACQUIRING
THIS NOTE FOR INVESTMENT PURPOSES FOR ITS OWN ACCOUNT OR THE ACCOUNT OF ANOTHER
ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT AND (B) IT WILL NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE.
Original Principal Amount: $6,382,877.00
Original Issue Date: March 15, 2002
IMPERIAL CREDIT INDUSTRIES, INC.
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
SENIOR SECURED NOTE -SERIES B
IMPERIAL CREDIT INDUSTRIES, INC., a California corporation (together with
its permitted successors and assigns hereunder, the "Issuer" or the "Company"),
for value received hereby promises to pay to the Xxxxxxx Xxxxx Living Trust,
0000 Xxxxx Xxx Xxx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000, and registered assigns (the
"Holder") the unpaid balance of the principal sum of Six Million Three Hundred
Eighty-Two Thousand Eight Hundred Seventy-Seven and 00/100 Dollars
($6,382,877.00) on the Maturity Date (as hereinafter defined) and to pay
interest thereon as provided herein.
Section 1. Interest.
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(a) Interest (i) shall accrue upon the outstanding principal of this Note
at the Accrual Rate, and (ii) shall be payable in cash to the Holder (A) in
arrears, on the first day of each calendar month (each an "Interest Payment
Date") of each year commencing with April 1, 2002, and (B) at the Maturity Date
(or earlier to the extent provided in Section 6) to the extent accrued but
theretofore unpaid.
(b) Notwithstanding the terms of Section 1(a) above, with respect to
payments of interest payable on or before July 1, 2002, up to 50% of the
interest so payable on this Note may, at the election of the Issuer, be paid in
kind through the issuance of additional Notes having the terms set forth herein
and equal in principal amount to the portion of the interest on this Note so
payable.
(c) From and after the occurrence of a Event of Default, the Issuer agrees
to pay to the Holder, upon demand (and, in any event, not less frequently than
monthly in arrears, on each Interest Payment Date) interest at the Default Rate
on the outstanding principal hereunder and all interest accrued but unpaid
thereon.
(d) Interest hereunder shall be calculated on the basis of a 360-day year,
actual days elapsed, and, to the extent accrued but unpaid, shall be compounded
monthly on each Interest Payment Date. The interest accrued but unpaid on any
date, or payable on any Interest Payment Date, hereunder shall be calculated to
but excluding the date in question.
(e) Notwithstanding anything to the contrary contained herein, interest
accrued but unpaid on the first Interest Payment Date after issuance of this
Note shall be calculated for the period commencing on the date of issuance of
this Note to but excluding such Interest Payment Date.
Section 2. Issue; Priority.
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(a) This Note (the "Note") is the second series of a duly authorized issue
of Senior Secured Notes (the "Senior Secured Notes"). The first series has been
issued in aggregate
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principal amount of $16,200,000 (the "Series A Notes") pursuant to the Master
Recapitalization Agreement dated as of March 29, 2001 among the Issuer and the
purchasers listed on the signature pages thereto, as amended, supplemented or
otherwise modified from time to time (the "Master Recapitalization Agreement").
This Note and the Holder hereof shall be secured by and entitled to the benefits
of the Security Agreement (as defined in the Master Recapitalization Agreement),
to which Agreement the Holder consents and, by the Holder's acceptance of this
Note, agrees to be bound. This Note is entitled to all of the rights, benefits
and preferences of Senior Secured Debt under the Security Agreement, except that
this Note is subordinated to the Series A Notes on the terms set forth in this
Section 2. Except for the Series A Notes, this Note shall not be subordinated in
right or priority of payment or security to any existing or future obligation of
the Issuer.
(b) Until all Series A Notes shall have been paid in full or otherwise
retired, except to the extent that payments of principal or interest are made to
(and are not disgorged by) holders of Exchange Notes, (i) the Holder shall not
be entitled to receive and, by acceptance of this Note, the Holder agrees not to
accept, any payment of principal or interest until all amounts owing in respect
of the Series A Notes shall have been paid in full, and (ii) all payments and
distributions of any kind or character (whether in cash, securities or property)
which, except for the provisions hereof, would have been payable or
distributable to the Holder, shall be made to and for the benefit of the holders
of the Series A Notes (who shall be entitled to make all necessary claims
therefore) in accordance with the priorities of payment set forth herein until
all Series A Notes shall have been paid in full. In the event that any payment
or distribution is made with respect to this Note in violation of the terms
hereof, such payment or distribution shall be held it in trust for the benefit
of, and shall be remitted to, the holders of the Series A Notes.
(c) Until this Note shall have been paid in full or otherwise retired,
subject to the provisions of subsection (b) above, in the event of:
(i) the occurrence of an Event of Default (not including the Alleged
Existing Defaults (as defined in the Standstill, Forbearance and
Amendment Agreement, dated as of February 19, 2002, between the Issuer
and the other parties named therein)) and continuance thereof beyond
any applicable grace period;
(ii) any acceleration of the maturity of any other indebtedness of
the Issuer, or
(iii) the institution of any liquidation, dissolution, bankruptcy,
insolvency or similar proceeding relating to the Issuer, its property,
or its creditors as such,
no holder or payee of any other indebtedness of the Issuer ("Subordinated Debt")
shall be entitled to receive and, by acceptance of the Subordinated Debt, the
holder thereof has agreed not to accept, any payment of principal or interest
until all amounts owing in respect of this Note shall have been paid in full;
and from and after the happening of any event described in clause (iii) of this
subsection (c), all payments and distributions of any kind or character (whether
in cash, securities or property) which, except for the provisions hereof, would
have been payable or distributable to any holder of Subordinated Debt, shall be
made to and for the benefit of the holders of this Note (who shall be entitled
to make all necessary claims therefore) in accordance with the priorities of
payment set forth herein until this Note shall have been paid in full. In the
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event that any payment or distribution is made with respect to any Subordinated
Debt in violation of the terms hereof, such payment or distribution shall be
held in trust for the benefit of, and shall be remitted to, the Holder of this
Note in accordance with the priorities of payment set forth in the Security
Agreement, it being understood and acknowledged that this Note and the
obligations of the Issuer hereunder constitute Senior Secured Debt for purposes
of the Security Agreement.
(d) Until all Series A Notes shall have been paid in full or otherwise
retired, all of the security interests, liens, and other collateral interests of
the holders of Series A Notes in the Collateral and all of the rights and
remedies, under law, agreement, or otherwise, of the holders of the Series A
Notes exercisable pursuant thereto (all of which interests and rights are herein
called the "Series A Rights") shall be senior and superior to all of the
security interests, liens and other collateral interests of the Holder in the
Collateral and all of the rights and remedies, under law, agreement or
otherwise, of the Holder exercisable pursuant thereto (all of which interests
and rights are herein called the "Series B Rights").
(e) Until this Note shall have been paid in full or otherwise retired,
subject to the provisions of subsection (d) above, the Series B Rights shall be
senior and superior to all of the security interests, liens and other collateral
interests of the holder of any Subordinated Debt in the Collateral and all of
the rights and remedies, under law, agreement or otherwise, of the holder of any
Subordinated Debt exercisable pursuant thereto.
Section 3. Prepayment. The Issuer may prepay this Note (and any
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additional Notes issued pursuant to the provisions of Section 1(b) hereof) at
any time prior to or on the Maturity Date by payment to the Holder in the amount
of $3,382,877 plus the amount of interest that has accrued on $3,382,877 to the
date of prepayment and has not theretofore been paid in cash.
Section 4. Certain Terms Defined. The following terms for all purposes
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of this Note shall have the respective meanings specified below:
"Accrual Rate" means 12% per annum through and including April 30,
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2002, 16% per annum for the month of May 2002 and 20% per annum for the month of
June 2002 and thereafter.
"Affiliate" means, with respect to any Person, any Person that,
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directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with") shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or voting equity interests.
"Bank" means Southern Pacific Bank, a California industrial bank,
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together with its successors.
"Business Day" means any day except a Saturday, Sunday or other day on
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which commercial banks in the State of California are authorized by law to
close.
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"Capital Stock" of any Person means any and all shares or other equity
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interest of such Person.
"Collateral" has the meaning set forth in the Master Recapitalization
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Agreement.
"Collateral Agent" means Wilmington Trust Company in its capacity as
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agent for the benefit of the Holders pursuant to the terms of the Collateral
Agency Agreement.
"Debt" of any Person means at any date, without duplication, (a) all
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obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (c)
all obligations of such Person in respect of standby or direct pay letters of
credit or bankers' acceptances or other similar instruments (or reimbursement
obligations with respect thereto), (d) all obligations of such Person to pay the
deferred purchase price of property or services, and (e) all obligations of such
Person as lessee which are capitalized in accordance with generally accepted
accounting principles then in effect in the United States.
"Default" means any condition or event which constitutes an Event of
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Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Default Rate" means the per annum interest rate that is 5% per annum
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greater than the Accrual Rate.
"DFI" means the Department of Financial Institutions of the State of
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California.
"DFI Order" means the Final Order, dated December 27, 2000, issued by
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the DFI to the Issuer.
"Event of Default" has the meaning set forth in Section 6.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Exchange Notes" has the meaning set forth in the Master
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Recapitalization Agreement.
"FDIC" means the Federal Deposit Insurance Corporation and any
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successor thereto.
"FDIC Order" means the Cease and Desist Order, dated December 15, 2000,
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issued by the FDIC to the Issuer.
"Holder" means the Person identified hereinabove as the Holder of this
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Note.
"Interest Payment Date" has the meaning set forth in Section 1(a)(ii).
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"Lien" means, with respect to any asset, any mortgage, lien, pledge,
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encumbrance, charge or security interest of any kind in respect of such asset
(including any conditional sale or other title retention agreement and any lease
in the nature thereof).
"Master Recapitalization Agreement" has the meaning set forth in
---------------------------------
Section 2(a).
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"Material Adverse Effect" means a material adverse effect on the
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financial condition, business, assets or results of operations of (i) the Bank
or (ii) the Issuer and its Subsidiaries taken as a whole.
"Material Subsidiary" of any Person means, as of any date, any
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Subsidiary of such Person which, as of such date, is a "significant subsidiary"
of such Person, as the term "significant subsidiary" is defined in Regulation
S-X promulgated by the SEC under the Securities Act of 1933, as amended, as in
effect on the date hereof.
"Maturity Date" means (i) June 28, 2002, or (ii) July 15, 2002 if,
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prior to June 15, 2002, (A) the Issuer certifies in writing to the Holder that
payment of principal and interest on all other indebtedness of the Issuer which
is payable on or between July 15, 2002 and August 14, 2002 may be deferred from
the date due until at least August 14, 2002 without giving rise to an event of
default thereunder that would give rise to a right to exercise default remedies
(which certificate shall be supported by an opinion of counsel in form
reasonably satisfactory to the Issuer and (B) the Issuer delivers to the Holder
a contractually binding undertaking of the Issuer (together with an opinion of
counsel in form reasonably satisfactory to the Holder to the effect that such
undertaking is duly authorized and enforceable against the Issuer in accordance
with its terms) to defer payment of such principal and interest to a date no
earlier than August 14, 2002).
"Note" has the meaning set forth in Section 2(a).
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"Officers' Certificate" means a certificate signed by a Responsible
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Officer.
"Person" means an individual, a corporation, a partnership, an
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association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Responsible Officer" means, with respect to any Person, the chief
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executive officer, president or any executive vice president or senior vice
president of such Person, or, with respect to financial matters, the chief
financial officer or treasurer of such Person or any other officer authorized by
such Person to deliver documents with respect to financial matters.
"SEC" means the Securities and Exchange Commission and any successor
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thereto.
"Security Agreement" has the meaning set forth in the Master
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Recapitalization Agreement.
"Senior Secured Notes" has the meaning set forth in Section 2(a).
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"Series A Notes" has the meaning set forth in Section 2(a).
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"Series A Rights" has the meaning set forth in Section 2(d).
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"Series B Rights" has the meanings set forth in Section 2(d).
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"Subordinated Debt" has the meaning set forth in Section 2(c).
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"Subsidiary" of any Person means any entity of which securities or other
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ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are owned
directly or indirectly by such Person.
"Wholly-Owned Subsidiary" of any Person means any Subsidiary all of the
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Capital Stock or ownership interests of which (except director's qualifying
shares) are at the time owned directly, or, through one or more Wholly-Owned
Subsidiaries, indirectly by such Person.
Section 5. Covenants. So long as this Note is outstanding or any amount
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payable in respect of this Note remains unpaid:
(a) The Issuer shall pay or cause to be paid the principal of and interest
on this Note on the dates and in the manner provided in this Note.
(b) The Issuer shall, so long as this Note is outstanding, deliver to the
Holder thereof, forthwith upon becoming aware of (i) any Default or Event of
Default or (ii) any event of default under any other mortgage, indenture or
instrument which permits an acceleration that could become an Event of Default,
an Officers' Certificate specifying such Default, Event of Default or event of
default and what action the Issuer is taking or proposes to take with respect
thereto.
(c) The Issuer shall, and shall cause each of its Subsidiaries to, pay
prior to delinquency all material taxes, assessments, and governmental levies
except as contested in good faith and by appropriate proceedings.
(d) The Issuer covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Note; and the Issuer (to the extent it may lawfully
do so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it shall not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Holders, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
(e) The Issuer will not, and will not permit the Bank to, consolidate with,
merge with or into, or sell, lease or otherwise transfer all or substantially
all of its assets (as an entirety in one transaction or a series of related
transactions) to, any Person (other than a Wholly-Owned Subsidiary of the
Issuer) unless, in the case of the Issuer, the surviving or acquiring entity (if
other than the Issuer) (i) is organized and existing under the laws of the
United States of America or any state thereof or the District of Columbia, (ii)
shall expressly assume all obligations of the Issuer under this Note, the Master
Recapitalization Agreement and the Related Documents, and (iii) at the time of
such consolidation, merger, sale or transfer and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing.
(f) The Issuer will not and will not permit any Subsidiary to:
(i) sell, transfer or otherwise convey any shares of the Bank's Capital
Stock that are legally or beneficially owned by the Issuer or any Subsidiary;
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(ii) incur, create, assume or otherwise cause or suffer to exist
(directly, indirectly or contingently) any Lien on any shares of Capital
Stock of the Bank that are legally or beneficially owned by the Issuer or
any Subsidiary, except for (x) Liens for taxes, assessments, government
charges or claims (I) that are being contested in good faith by appropriate
proceedings, and with respect to which a reserve or other appropriate
provision, if any, as shall be required in conformity with generally
accepted accounting principles then in effect in the United States shall
have been made, or (II) that are not yet due and payable, or (y) any Lien
arising out of an attachment, judgment or award as to which an appeal or
other appropriate proceeding or contest or review has been promptly
commenced (and as to which foreclosure or similar proceedings shall not
have commenced); or
(iii) incur any indebtedness except as contemplated under the Master
Recapitalization Agreement.
(g) The Issuer will furnish to each Holder of a Note:
(i) within 90 days after the end of each fiscal year of the Issuer,
audited consolidated financial statements for such fiscal year of each of
the Issuer and its consolidated Subsidiaries, including consolidated
balance sheets and statements of operations, statements of changes in
stockholders' equity and statements of cash flows, accompanied by the
reports thereon of the Issuer's independent public accountants, which
financial statements shall be prepared in accordance with generally
accepted accounting principles then in effect in the United States applied
consistently throughout the period reflected therein (except as disclosed
therein),
(ii) within 45 days after the end of the first, second and third
fiscal quarters of the Issuer, unaudited consolidated financial statements
for such fiscal quarter and (in the case of the second and third quarters)
for the portion of the fiscal year ending with such quarter of each of the
Issuer and its consolidated Subsidiaries, including consolidated balance
sheets and statements of operations, statements of changes in stockholders'
equity and statements of cash flows, which financial statements shall be
prepared in accordance with generally accepted accounting principles then
in effect in the United States applied consistently throughout the period
reflected therein (except that such statements may be presented in
condensed form, with no notes to such financial statements being required,
and except as otherwise disclosed therein),
(iii) promptly upon their becoming available, (x) each report, notice,
proxy statement or other communication sent by the Issuer to its
stockholders generally and (y) each regular or periodic report filed by the
Issuer with the SEC pursuant to the Exchange Act and each registration
statement and prospectus filed by the Issuer with the SEC under the
Securities Act of 1933, as amended, and
(iv) concurrently with the delivery of the financial statements
referred to in paragraphs (i) and (ii) above, with respect to the relevant
reporting periods, a certificate of a Responsible Officer of the Issuer
stating that, to the best of such Responsible Officer's knowledge after due
inquiry, (x) all such financial statements have been
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prepared in accordance with generally accepted accounting principles in
effect in the United States applied consistently throughout the period(s)
reflected therein (except as otherwise disclosed therein) and (y) such
Responsible Officer has obtained no knowledge of any Default.
The requirement to deliver the financial statements referred to in
paragraphs (i) and (ii) above shall be deemed to be satisfied to the extent that
they are contained in reports filed by the Issuer with the SEC under the
Securities Exchange Act of 1934, as amended, and such reports are delivered to
each Holder of a Note within the time specified in such paragraphs (i) and (ii).
(h) If this Note is transferred and there is more than one holder of the
Note, the Issuer will not, and will not permit any of its Subsidiaries to,
purchase any Notes other than pursuant to a repurchase offer made to each Holder
of a Note pro rata in accordance with the aggregate principal amount of Notes
held by such Holder.
(i) The Issuer will not, and will not permit any of its Subsidiaries to,
make any payment or distribution in respect of any Common Stock or other
security of the Issuer or make any payments on or in respect of any other
indebtedness of the Company if such payment would be inconsistent with any
subordination provisions of any such indebtedness or with the provisions of the
Security Agreement. Notwithstanding the foregoing, Holder agrees that the
Alleged Existing Defaults shall not be asserted as the basis for preventing the
Company from making the payments due under the Company's 10.25% Remarketed
Redeemable Par Securities, Series B, in accordance with their terms.
Section 6. Event of Default Defined; Remedies. In case one or more of the
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following events (each an "Event of Default") shall have occurred and be
continuing:
(a) default in the payment of any interest under Section 1 as and when the
payment shall become due and payable, if the Issuer shall have failed to cure
such default in full within 5 calendar days after the occurrence of any such
default; or
(b) default in the payment of all or any part of the principal on this
Note as and when the same shall become due and payable, whether on the Maturity
Date, by acceleration or otherwise; or
(c) the occurrence of an "Event of Default" as defined in the Series A
Notes; or
(d) unconsolidated Debt of the Issuer in an amount equal to or exceeding
$500,000 in the aggregate outstanding at any time shall not be paid within 30
calendar days after the maturity date thereof or the maturity date of any such
Debt aggregating $500,000 or more shall be accelerated upon default of the
Issuer; or
(e) any Debt of any Material Subsidiary or Material Subsidiaries of the
Issuer in an aggregate principal amount equal to or exceeding $500,000 in the
aggregate outstanding at any time shall not be paid within 30 calendar days
after the maturity date thereof, or the maturity of any such Debt aggregating
$500,000 or more shall be accelerated upon default of any Material Subsidiary or
Material Subsidiaries; or
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(f) the Bank shall
(i) have a conservator or receiver appointed for it, or
(ii) become or be deemed by the FDIC to be "critically
undercapitalized" within the meaning of Section 38(b) of the Federal
Deposit Insurance Act (12 U.S.C. 1811 et seq.), any successor statute
thereto, or any regulations promulgated thereunder; or
(g) the Issuer or any of its Material Subsidiaries shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall be unable to, admit its inability to, or
shall fail generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing or any other action
indicating its consent to, or approval of, or acquiescence in, or furtherance of
any of the foregoing; or
(h) an involuntary case or other proceeding shall be commenced against the
Issuer or any of its Material Subsidiaries seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Issuer or any of its Material Subsidiaries
under the federal bankruptcy laws as now or hereafter in effect; or
(i) a final judgment for the payment of money, together with all other
outstanding final judgments for the payment of money against the Issuer or any
of its Material Subsidiaries (to the extent that such judgments are not covered
by insurance from insurers that are not Affiliates of the Issuer or any of its
Subsidiaries) in an aggregate amount in excess of $500,000, shall be rendered
against the Issuer or any Material Subsidiary by a court of competent
jurisdiction and such judgment shall remain undischarged, unstayed or unvacated
for a period of 30 calendar days after such judgment becomes final and
unappealable; or
(j) failure on the part of the Issuer to duly observe or perform in any
material respect any covenant contained in this Note; or
(k) any warranty, representation or other statement by or on behalf of the
Issuer contained in this Note, the Security Agreement, the Master
Recapitalization Agreement or any of the Related Agreements or in any instrument
furnished in compliance with or in reference to any such agreement or instrument
is false or misleading in any material respect; or
(l) [Intentionally omitted]; or
(m) the Issuer shall assert or contest in writing or in any court or with
or before any governmental agency or authority that any provision or all of the
Notes, the agreement pursuant
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to which the Note was issued or any other instrument delivered in connection
therewith is invalid or void; or the Issuer denies that it has the full
obligation to pay the Note or that the Note is not secured or that the security
interest in favor of the Holder is not a first, prior, perfected security
interest;
then, at any time thereafter during the continuance of any such Event of
Default, other than (x) in the case of an Event of Default specified in Sections
6(f), (g) or (h), in any of which events the unpaid principal of and accrued
interest on the Note shall become and be immediately due and payable without any
declaration or any other act on the part of the Holder and (y) in the case of an
Event of Default specified in Section 6(j), in which event such declaration may
be made 30 days after notice of such default, the Holder of this Note may, by
written notice to the Issuer, declare this Note to be forthwith due and payable,
whereupon this Note shall become forthwith due and payable both as to unpaid
principal and accrued interest without presentment, demand, or protest or other
notice of any kind, all of which are hereby expressly waived, anything contained
herein to the contrary notwithstanding. Such remedy shall be in addition to any
other remedy available to the Holder pursuant to applicable law or otherwise.
The Holder, solely by express written notice to the Issuer, may waive all
Defaults and rescind any acceleration of the Note and the consequences of such
acceleration.
Section 7. [Intentionally omitted]
Section 8. Modification of Note.
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(a) No provision of the Note may be amended, modified, supplemented or
waived without notice to and the written consent of the Issuer and the Holders
of not less than a majority of the aggregate principal amount of the Note then
outstanding, provided that no such amendment, modification, supplement or waiver
shall, unless signed by each Holder of a Note affected thereby, (i) reduce the
amount or rate of, or postpone the date fixed for, any payment of principal of
or interest on such Note, (ii) make such Note payable in money other than that
stated in such Note or (iii) amend the provisions of this Section 8. The Holder
may waive compliance by the Issuer with any provision of the Note. No failure or
delay on the part of the Holder in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to the Holder at law or in equity or otherwise.
(b) The Issuer will not solicit, request or negotiate for or with respect
to any proposed amendment, modification, supplement or waiver of any of the
terms or provisions of any of the Note unless each of the Holders of Note then
outstanding (irrespective of the outstanding aggregate principal amount of Note
then owned by each such Holder) shall be informed thereof by the Issuer and
shall be afforded the opportunity of considering the same for the same period of
time and shall be supplied by the Issuer with a brief written statement
regarding the reasons for any such proposed amendment, modification, supplement
or waiver, a copy of the proposed amendment, modification, supplement or waiver
and such other information as such Holder shall reasonably request regarding
such amendment, modification, supplement or waiver to enable it to make an
informed decision with respect thereto. The Issuer will not, directly or
indirectly, pay
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or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fees, additional securities or otherwise, to any Holder of
the Note as consideration for or as an inducement to the entering into by any
such Holder of any amendment, modification, supplement or waiver of any of the
terms and provisions of any of the Note unless such remuneration is offered to
all Holders of Notes then outstanding on the same terms, ratably in proportion
to the aggregate principal amount of Notes then owned by each such Holder who
enters into such amendment, modification, supplement or waiver.
Section 9. Method and Application of Payments. Payments hereunder shall be
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made at a bank specified in writing by the Holder, in immediately available
funds in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts. If
the Maturity Date, any Interest Payment Date or any other day on which a payment
is due hereunder is not a Business Day the payment due on such date shall be
made on the next succeeding Business Day. All payments made pursuant to this
Note shall be applied first to accrued and unpaid interest and thereafter to
unpaid principal.
Section 10. Assignment. This Note and the rights and obligations of the
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Issuer hereunder may not be assigned or otherwise transferred by the Issuer
without the prior written consent of the Holder hereof. This Note may not be
assigned or otherwise transferred by any Holder to any Person, other than an
Affiliate of such Holder, unless the Holder has complied with the applicable
requirements set forth in Section 3.2 of the Master Recapitalization Agreement,
except that, notwithstanding the foregoing, this Note may be pledged or
otherwise assigned as collateral to a bank or other financial institution as
security for a bona fide loan for money borrowed. Except as so limited, this
Note shall be binding upon and inure to the benefit of the Issuer and the Holder
and their respective successors and permitted assigns hereunder.
Section 11. Communications. All notices, demands and other communications
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provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telex, telecopier, or air courier guaranteeing
overnight delivery:
(a) if to the Holder, initially at the address set forth above, and
thereafter at such other address, notice of which is given in accordance with
this Section 11;
(b) if to the Issuer, initially at 23550 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxx 0,
Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx 00000, and thereafter at such other address,
notice of which is given in accordance with this Section 11.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being sent by certified mail, return receipt requested, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next Business Day if timely delivered to an air courier guaranteeing
overnight delivery.
Section 12. Miscellaneous. This Note shall be deemed to be a contract under
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the laws of the State of California and shall be governed by and construed in
accordance with the laws of said State, without regard to principles of conflict
of laws. The parties hereto hereby waive presentment, demand, notice, protest
and all other demands and notices in connection with the
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delivery, acceptance, performance and enforcement of this Note, except as
specifically provided herein. The Holder by acceptance of this Note agrees to be
bound by the provisions hereof and of the Master Recapitalization Agreement.
Except as otherwise required by mandatory provisions of applicable law, the
Issuer may deem and treat the Person in whose name this Note is registered as
the Holder and owner hereof for all purposes. The Section headings herein are
for convenience only and shall not modify, restrict or otherwise affect the
construction of any of the terms and provisions hereof. In case any provisions
of this Note or the Master Recapitalization Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions of this Note and the Master Recapitalization Agreement shall not in
any way be affected or impaired thereby.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed.
IMPERIAL CREDIT INDUSTRIES, INC.
By:___________________________________________
Name:
Title:
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