ACQUISITION AGREEMENT
ACQUISITION AGREEMENT, dated as of February 19, 1999, by and
among Greenwich Street Capital Partners II, L.P., a Delaware limited partnership
("GSCP"), GSCP Offshore Fund, L.P., a Cayman Islands exempted limited
partnership ("Offshore"), Greenwich Fund, L.P., a Delaware limited partnership
("GF", and together with GSCP and Offshore, the "Initial GSCP Funds"), Greenwich
Street Employees Fund, L.P., a Delaware limited partnership ("GSEF"), and TRV
Executive Fund, L.P., a Delaware limited partnership ("TRV", and, together with
the Initial GSCP Funds and GSEF, the "GSCP Funds"), and IMC Mortgage Company, a
Florida corporation (the "Company").
WHEREAS, GSCP previously entered an Agreement and Plan of Merger
(the "Merger Agreement"), dated as of February 19, 1999, by and among GSCP, IMC
1999 Acquisition Co., Inc., a Delaware corporation and a wholly owned subsidiary
of the GSCP Funds ("IMC Acquisition") and the Company, pursuant to which IMC
Acquisition would be merged with and into the Company (the "Merger"), the GSCP
Funds would be issued common stock of the surviving corporation of the Merger
representing approximately 93.5% of the outstanding common stock of the
surviving corporation of the Merger and the 23,760.758 shares (the "Class C
Preferred Shares") of Class C Exchangeable Preferred Stock, par value $.01 per
share, of the Company (the "Class C Preferred Stock") held by the GSCP Funds
would be canceled and retired and would cease to exist.
WHEREAS, in connection with the Merger Agreement, (i) the Initial
GSCP Funds have entered into Amendment No. 1, dated February 11, 1999
("Amendment No. 1"), to the Loan Agreement, dated as of October 12, 1998 (the
"Initial Loan Agreement"), between the Company and the Initial GSCP Funds,
providing for the Initial GSCP Funds to extend to the Company additional
commitments (the "Interim Commitments") to loan in the aggregate an additional
$5,000,000 (the "Interim Loans") and (ii) the GSCP Funds have entered a
commitment letter (as amended, the "Commitment Letter") with IMC Acquisition,
dated as of February 19, 1999, obligating the GSCP Funds to enter into an
amendment and restatement of the Initial Loan Agreement (the "Amendment and
Restatement of the Loan Agreement"), pursuant to which the GSCP Funds would
agree to extend to the surviving corporation of the Merger commitments to loan
an additional $35,000,000 (the "Additional Advance"), subject to the terms and
conditions set forth in the Initial Loan Agreement, as amended and restated (the
"Loan Agreement").
WHEREAS, the GSCP Funds, IMC Acquisition and the Company desire
to terminate the Merger Agreement pursuant to Section 9.1 thereof in order to
enter into this Agreement and to consummate the transactions contemplated
hereby.
WHEREAS, the GSCP Funds and the Company desire that the GSCP
Funds transfer and deliver to the Company for cancellation the Class C Preferred
Shares and enter into the Amendment and Restatement of the Loan Agreement and
fund the Additional Advance, in consideration of which the Company will issue
and deliver to the GSCP Funds, common stock, par value $0.001 per share, of the
Company (the "Company Common Stock") representing approximately 93.5% of the
Company Common Stock outstanding after such issuance (the "Acquisition").
WHEREAS, the GSCP Funds, IMC Acquisition and the Company desire
to amend and restate the Commitment Letter and certain agreements related
thereto to substitute the Company for IMC Acquisition as party thereto and
otherwise to provide for this Agreement and the termination of the Merger
Agreement.
WHEREAS, the Board of Directors of the Company, acting upon the
unanimous recommendation of a special committee (the "Special Committee")
comprised solely of "disinterested directors" (as defined in Section 607.0901 of
the Florida 1989 Business Corporation Act (the "FBCA")) of the Company, which
Board consists solely of "disinterested directors", have each adopted this
Agreement and approved the Restated Articles of Incorporation (as hereinafter
defined), the Amendment (as hereinafter defined), the Restated Bylaws (as
hereinafter defined), the Acquisition, the termination of the Merger Agreement
and the other transactions contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto agree as follows:
ARTICLE I
THE ACQUISITION
Section 1.1 The Acquisition. Upon the terms and subject to the
conditions hereof, at the Closing (as hereinafter defined), the Company shall
issue and deliver to the GSCP Funds, and the GSCP Funds shall acquire from the
Company, as further set forth in Schedule 1.1 hereto, an aggregate of
491,604,500 shares of Company Common Stock representing approximately 93.5% of
the Company Common Stock outstanding after the Acquisition and the GSCP Funds
shall transfer and deliver to the Company for cancellation the Class C Preferred
Shares and perform their obligations under the Commitment Letter to enter into
the Amendment and Restatement of the Loan Agreement and fund the Additional
Advance thereunder.
Section 1.2 Closing. The Company shall as promptly as practicable
notify GSCP, and the GSCP Funds shall as promptly as practicable notify the
Company, when the conditions to such parties' obligations to consummate the
Acquisition contained in Article VII have been satisfied. The closing of the
Acquisition (the "Closing") shall take place at the offices of Debevoise &
Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New York
time, on the third business day after the later of these notices has been given
(the "Closing Date"), unless another date or place is agreed to in writing by
the parties hereto; provided, however, that the parties hereto agree to use all
reasonable efforts to consummate the Closing by June 30, 1999 or as soon as
practicable thereafter.
Section 1.3 Closing Deliveries. Upon the terms and subject to the
conditions hereof, at the Closing, (i) the Company shall deliver to each of the
GSCP Funds good and valid title to the number of duly authorized, validly
issued, fully paid and non assessable shares of Company Common Stock provided
for in Section 1.1 hereof subject to adjustment as provided in Section 1.6
hereof, by issuing to the GSCP Funds certificates for such shares registered in
such names and evidencing such number of shares as set forth in Schedule 1.1
hereto, free and clear of any liens, charges, encumbrances, security interests,
options or rights or claims of others with respect thereto; (ii) the GSCP Funds
shall transfer and deliver to the Company the Class C Preferred Shares, free and
clear of any liens, charges, encumbrances, security interests, options or rights
or claims of others with respect thereto, by delivering to the Company the
certificates representing such shares, duly endorsed in blank or accompanied by
stock powers or other proper instruments of assignment duly executed in blank,
and having all requisite stock transfer stamps attached; and (iii) the GSCP
Funds and the Company shall, pursuant to the Commitment Letter, enter into the
Amendment and Restatement of the Loan Agreement and perform their obligations
thereunder to fund the Additional Advance.
Section 1.4 Articles of Incorporation and By-Laws of the Company.
The Board of Directors of the Company, acting upon the unanimous recommendation
of the Special Committee, has approved (i) the amendment and restatement of the
Articles of Incorporation of the Company to read in their entirety as set forth
in the form attached hereto as Exhibit A (as so amended and restated, the
"Restated Articles of Incorporation"), (ii) the amendment to the Restated
Articles of Incorporation as set forth in the form attached hereto as Exhibit B
(the "Amendment"), and (iii) the amendment and restatement of the Bylaws of the
Company to read in their entirety as set forth in the form attached hereto as
Exhibit C (as so amended and restated, the "Restated Bylaws"). Upon the terms
and subject to the conditions hereof, including, without limitation, obtaining
the Shareholder Approval (as hereinafter defined), at, but not prior to, the
Closing the Company shall cause the Restated Articles of Incorporation to be
duly filed with the Secretary of State of Florida. If the Amendment shall have
been approved by the shareholders of the Company pursuant to the FBCA, upon the
terms and subject to the conditions hereof, at, but not prior to, the Closing
the Company shall cause the
Amendment to be duly filed with the Secretary of State of Florida immediately
after the filing of the Restated Articles of Incorporation.
Section 1.5 Directors and Officers of the Company. At the
Closing, the directors of the Company listed as resigning directors in a letter
from the GSCP Funds to the Company delivered prior to the Closing shall resign
(the "Resigning Directors"), and the directors remaining in office shall fill
the vacancies created thereby by electing the individuals listed as new
directors in a letter from the GSCP Funds to the Company delivered prior to the
Closing (the "New Directors") as directors of the Company to serve until their
successors shall have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the Articles of
Incorporation and Bylaws of the Company. The election of the New Directors shall
be conducted in accordance with the requirements of Section 607.0901(1)(h) of
the FBCA such that the New Directors shall be "disinterested directors" as
defined therein and pursuant thereto. At the Closing, the Resigning Directors
shall deliver to the Company their resignations effective as of the Closing.
Section 1.6 Certain Adjustments. If after the date hereof and on
or prior to the Closing the outstanding shares of Company Common Stock shall be
changed into a different number of shares by reason of any reclassification,
recapitalization, split-up, combination or exchange of shares, or any dividend
payable in stock or other securities shall be declared thereon with a record
date within such period, or any similar event shall occur (any such action, an
"Adjustment Event"), the number of shares to be issued to the GSCP Funds
pursuant to Section 1.1 hereof shall be adjusted to provide to the GSCP Funds
and the holders of Company Common Stock the same proportionate ownership as
contemplated by this Agreement prior to such Adjustment Event.
Section 1.7 Merger Agreement. GSCP and the Company hereby
terminate the Merger Agreement pursuant to Section 9.1 thereof.
ARTICLE II
SHAREHOLDER APPROVAL
Section 2.1 Shareholder Meeting. In order to consummate the
transactions contemplated hereby, the Company, acting through its Board of
Directors, shall, in accordance with applicable law, duly call, give notice of,
convene and hold a special meeting of its shareholders (the "Special Meeting"),
as soon as practicable, for the purpose of voting upon the adoption and approval
of this Agreement, the Restated Articles of Incorporation, the Amendment, the
Acquisition and the other transactions contemplated by this Agreement (the
"Shareholder Approval"). The Company shall include in the Proxy Statement (as
hereinafter defined) the recommendation of the Board of Directors of the
Company, acting upon the unanimous recommendation of the Special
Committee, that shareholders of the Company vote in favor of the adoption and
approval of this Agreement, the Restated Articles of Incorporation, the
Amendment, the Acquisition and the other transactions contemplated by this
Agreement. The GSCP Funds agree to vote all shares of capital stock of the
Company that they own and that may vote on such matters in favor of the adoption
and approval of this Agreement, the Restated Articles of Incorporation, the
Amendment, the Acquisition and the other transactions contemplated by this
Agreement.
Section 2.2 Proxy Statement. In connection with the solicitation
of the Shareholder Approval, the Company shall as promptly as practicable
prepare and file with the Securities and Exchange Commission (the "SEC") a
preliminary proxy statement relating to the Acquisition, the Restated Articles
of Incorporation, the Amendment, this Agreement and the other transactions
contemplated hereby and use all reasonable efforts to obtain and furnish the
information required to be included by the SEC in the Proxy Statement. The
Company, after consultation with GSCP, shall respond as promptly as reasonably
practicable to any comments made by the SEC with respect to the preliminary
proxy statement and shall cause a definitive proxy statement to be filed with
the SEC and mailed to its shareholders at the earliest reasonably practicable
date (such proxy statement is referred to herein as the "Proxy Statement"). The
GSCP Funds shall furnish all information concerning the GSCP Funds and the New
Directors as may reasonably be requested by the Company in connection with such
filings. The Company, after consulta tion with GSCP, shall also take any action
required to be taken, and make any other filings required, under the Securities
Act of 1933, as amended (the "Securities Act"), the Securities Exchange Act of
1934, as amended (the "Exchange Act") and applicable state securities laws in
connection with the issuance of the Company Common Stock in connection with the
Acquisition, and the GSCP Funds shall furnish all information concerning the
GSCP Funds as may be reasonably requested by the Company in connection with such
actions and filings.
Section 2.3 No False or Misleading Statements. The information
provided and to be provided by each of the GSCP Funds and the Company
specifically for use in the Proxy Statement and any other filings with the SEC
shall not, with respect to the information supplied by such party, in the case
of the Proxy Statement, on the date the Proxy Statement becomes effective, and,
in the case of the Proxy Statement and any other filings with the SEC, on the
date upon which the Proxy Statement is mailed to the shareholders of the Company
or on the date upon which approval of this Agreement by the shareholders of the
Company is obtained, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Each of the GSCP Funds and the Company agrees to correct
as promptly as reasonably practicable any such information provided by it that
shall have become false or misleading in any material respect. The Company shall
as promptly as practicable take all steps reasonably necessary to file with the
SEC and have cleared by the SEC any
amendment or supplement to the Proxy Statement so as to correct the same and to
cause the Proxy Statement as so corrected to be disseminated to the Company's
shareholders to the extent required by applicable law. The Proxy Statement shall
comply as to form in all material respects with the provisions of the Exchange
Act and other applicable law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE GSCP FUNDS
Except as otherwise disclosed to the Company in a letter
delivered to it prior to the execution hereof (which letter contains appropriate
references to identify the representations and warranties to which the
information in such letter relates and which letter is incorporated herein and
made a part hereof) (the "GSCP Disclosure Letter"), the GSCP Funds represent and
warrant to the Company as follows:
Section 3.1 Organization. GSCP, GF, GSEF and TRV are limited
partnerships duly organized, validly existing and in good standing under the
laws of the State of Delaware, and Offshore is an exempted limited partnership
duly organized, validly existing and in good standing under the laws of the
Cayman Islands, each with the limited partnership power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted or presently proposed to be
conducted. Each of the GSCP Funds is duly qualified to do business, and is in
good standing, in each jurisdiction where the character of its properties owned
or held under lease or the nature of its activities makes such qualification
necessary, except where the failure to be so qualified would not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on
the business, assets, liabilities, results of operations or financial condition
of any of the GSCP Funds, or materially adversely affect the ability of any of
the GSCP Funds to consummate the transactions contemplated hereby (a "GSCP
Material Adverse Effect").
Section 3.2 Authority Relative to This Agreement. The GSCP Funds
have the limited partnership power and authority to enter into this Agreement
and to carry out their obligations hereunder. The execution, delivery and
performance of this Agree ment by the GSCP Funds and the consummation by the
GSCP Funds of the transactions contemplated hereby have been duly authorized by
the managing general partner of each of the GSCP Funds, and no other proceedings
on the part of any of the GSCP Funds are necessary to authorize this Agreement
or the transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by the GSCP Funds and (assuming this Agreement
constitutes a valid and binding obligation of the Company) constitutes a valid
and binding agreement of each of the GSCP Funds, enforceable against each of the
GSCP Funds in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally from time to time in effect and to general equitable
principles.
Section 3.3 Consents and Approvals; No Violations. Except (a) for
applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"), the Securities Act, the Exchange Act, state or
foreign laws relating to takeovers, state securities or blue sky laws and the
regulations promulgated thereunder, state banking statutes and other state laws
in respect of change of control of mortgage bankers, mortgage loan originators
or mortgage loan servicers and the regula tions promulgated thereunder, and
similar matters (collectively, the "Governmental Requirements"), or (b) where
the failure to make any filing with, or to obtain any permit, authorization,
consent or approval of, any court or tribunal or administrative, government al
or regulatory body, agency, commission, division, department, public body or
other authority (a "Government Entity") would not prevent or delay the
consummation of the Acquisition, or otherwise prevent the GSCP Funds from
performing their obligations under this Agreement, and would not individually or
in the aggregate reasonably be expected to have a GSCP Material Adverse Effect,
no filing with, and no permit, authorization, consent or approval of, any
Governmental Entity is necessary for the execution, delivery and performance of
this Agreement by the GSCP Funds and the consummation of the transactions
contemplated hereby. Neither the execution, delivery or performance of this
Agreement by the GSCP Funds, nor the consummation by the GSCP Funds of the
Acquisition and the other transactions contemplated hereby, nor compliance by
the GSCP Funds with any of the provisions hereof, will (i) conflict with or
result in any breach of any provisions of the organizational documents of the
GSCP Funds, (ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation, acceleration, vesting, payment, exercise,
suspension or revocation) under, any of the terms, conditions, or provisions of
any note, bond, mortgage, deed of trust, security interest, indenture, license,
contract, agreement, plan or other instrument or obligation to which the GSCP
Funds are a party or by which any of them or any of their properties or assets
may be bound, (iii) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to the GSCP Funds or any of their properties or assets,
(iv) result in the creation or imposition of any Encumbrance on any asset of the
GSCP Funds, or (v) cause the suspension or revocation of any permit, license,
governmental authorization, consent or approval necessary for the GSCP Funds to
conduct their businesses as currently conducted, except in the case of clauses
(ii), (iii), (iv) and (v) for violations, breaches, defaults, terminations,
cancellations, accelerations, vestings, payments, exercises, creations,
impositions, suspensions or revocations which would not individually or in the
aggregate reasonably be expected to have a GSCP Material Adverse Effect.
"Encumbrance" shall mean any mortgage, pledge, lien, charge, encumbrance,
defect, security interest, claim, option or restriction of any kind.
Section 3.4 Litigation. Except as set forth in Section 3.4 of the
GSCP Disclosure Letter, there is no suit, action, proceeding or investigation
(whether at law or equity, before or by any federal, state or foreign court,
tribunal, commission, board, agency or instrumentality, or before any
arbitrator) pending or, to the knowledge of the
GSCP Funds, threatened against or affecting the GSCP Funds, which, individually
or in the aggregate, would reasonably be expected to have a GSCP Material
Adverse Effect, nor is there any judgment, decree, injunction, rule or order of
any court, governmental department, commission, agency, instrumentality or
arbitrator outstanding against the GSCP Funds having, or which, insofar as can
reasonably be foreseen, in the future would reasonably be expected to have a
GSCP Material Adverse Effect.
Section 3.5 No Default. Except as set forth in Section 3.5 of the
GSCP Disclosure Letter, none of the GSCP Funds are in violation or breach of, or
default under (and no event has occurred which with notice or the lapse of time
or both would constitute a violation or breach of, or a default under) any term,
condition or provision of (a) its organizational documents, (b) any note, bond,
mortgage, deed of trust, security interest, indenture, license, agreement, plan,
contract, lease, commitment or other instrument or obligation to which any of
the GSCP Funds is a party or by which any of them or any of their properties or
assets may be bound or affected, (c) any order, writ, injunction, decree,
statute, rule or regulation applicable to any of the GSCP Funds or any of their
properties or assets, or (d) any permit, license, governmental authorization,
consent or approval necessary for any of the GSCP Funds to conduct their
respective businesses as currently conducted, except in the case of clauses (b),
(c) and (d) above for breaches, defaults or violations which would not,
individually or in the aggregate, reasonably be expected to have a GSCP Material
Adverse Effect.
Section 3.6 Information in Proxy Statement. None of the
information supplied by any of the GSCP Funds for inclusion or incorporation by
reference in the Proxy Statement will, at the date mailed to shareholders and at
the time of the Special Meeting, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading.
Section 3.7 Brokers. No person is entitled to any brokerage,
financial advisory, finder's or similar fee or commission payable by the GSCP
Funds in connection with the Acquisition or the other transactions contemplated
by this Agreement based upon arrangements made by and on behalf of the GSCP
Funds.
Section 3.8 Disclosure. No representation or warranty by any of
the GSCP Funds contained in or made pursuant to this Agreement, contains or will
contain any untrue statement of a material fact or omits or will omit to state
any material fact necessary, in light of the circumstances under which it was
made, to make the statements herein or therein not misleading. There is no fact
known to any of the GSCP Funds which would reasonably be expected to have an
GSCP Material Adverse Effect which has not been set forth in this Agreement,
including the GSCP Disclosure Letter.
Section 3.9 Funds Available. The GSCP Funds have available,
without resort to financing, all the capital resources necessary in order to
effect the transactions contemplated by this Agreement and will keep such funds
available until the Closing.
Section 3.10 Investment Representation. (a) Each of the GSCP
Funds is either (i) an accredited investor as such term is defined in Rule 501
promulgated under the Securities Act, or (ii) by reason of its business or
financial experience, a sophisticated investor who has the capacity to protect
its interest in connection with the transactions contemplated hereunder and has
both appropriate knowledge and experience with the current business operations
and prospects of the Company and its Subsidiaries and in financial and business
matters to evaluate the merits and risks of the Company Common Stock and the
related transactions contemplated hereunder.
(b) The Company Common Stock is being acquired by each of the
GSCP Funds for its own account and not for any other Person, for investment only
and with no present intention of distributing or reselling such shares or any
part thereof or interest therein in any transaction that would violate the
securities laws of the United States of America or any state, without prejudice,
however, to the rights of each of the GSCP Funds at all times to sell or
otherwise dispose of all or any part of the Company Common Stock under an
effective registration statement or applicable exemption from registration under
the Securities Act and any applicable state securities law. "Person" or "person"
shall mean any natural person, firm, partnership, association, corporation,
company, trust, business trust, Governmental Entity (as hereinafter defined) or
other entity.
(c) The Company has made available to the GSCP Funds the
opportunity to ask questions of and receive answers from the Company concerning
the Company and the terms and conditions under which Company Common Stock will
be issued to them and to obtain any additional information which the Company
possesses or can acquire without unreasonable effort or expense that is
necessary to verify the accuracy of information furnished in connection with
this Agreement or in response to any request for information.
(d) To the extent the Company Common Stock is not registered
under the Securities Act, the Company may affix to the certificates evidencing
such shares legends in connection with the foregoing.
(e) Nothing in Subsection (a) or (c) of this Section 3.10 shall
change, modify or otherwise affect any other provision of this Agreement,
including without limitation the representations and warranties in Article IV
hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as otherwise disclosed to the GSCP Funds in a letter
delivered to them prior to the execution hereof (which letter contains
appropriate references to identify the representations and warranties herein to
which the information in such letter relates and which letter is incorporated
herein and made a part hereof) (the "Company Disclosure Letter"), the Company
represents and warrants to the GSCP Funds as follows:
Section 4.1 Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida and has the corporate power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as it is now being conducted or presently proposed to be conducted, except for
such government approvals, the failure of which to have, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect (as hereinafter defined). The Company is duly qualified as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the business, assets, liabilities, results of
operations or financial condition of the Company and the Company Subsidiaries,
taken as a whole, or materially adversely affect the ability of Company to
consummate the transactions contemplated hereby (a "Company Material Adverse
Effect"); provided, however, that Company Material Adverse Effect shall not
include any adverse effect resulting from (i) changes in general economic
conditions prior to the date of this Agreement, (ii) changes or developments in
the mortgage loan industry, generally, prior to the date of this Agreement, or
(iii) GSCP's unreasonably withholding its consent to any action by the Company
or a Company Subsidiary that is otherwise prohibited by Section 5.1 following a
request by the Company to take such action.
Section 4.2 Capitalization. As of the date hereof: (i) the
authorized capital stock of the Company consisted of 50,000,000 shares of
Company Common Stock and 10,000,000 shares of preferred stock, par value $.01
per share, of the Company (the "Company Preferred Stock"), of which 500,000
shares have been designated Class A Preferred Stock, 300,000 have been
designated Class B Preferred Stock, 800,000 have been designated Class C
Exchangeable Preferred Stock and 800,000 have been designated Class D Preferred
Stock, (ii) 34,104,590 shares of Company Common Stock and 523,760.758 shares of
Company Preferred Stock were issued and outstanding, consisting of 500,000
shares of Class A Company Preferred Stock and 23,760.758 shares of Class C
Exchangeable Company Preferred Stock, (iii) stock options to acquire 1,556,384
shares of Company Common Stock were issued and outstanding under the stock
incentive plans of the Company (the "Company Stock Options"), and (iv) such
rights to acquire shares in
order to effect a conversion of preferred stock into shares as exist in favor of
GSCP and its affiliates pursuant to the Initial Loan Agreement, as amended by
Amendment No. 1, and the transactions contemplated thereby. All of the issued
and outstanding shares of Company Common Stock are validly issued, fully paid
and nonassessable and free of preemptive rights. Except as set forth above and
as set forth in Section 4.2 of the Company Disclosure Letter, there are no
shares of capital stock of the Company issued or outstanding, no options,
warrants or rights for, or other securities convertible into, capital stock of
the Company, and no agreements or commitments obligating the Company to issue,
sell or acquire any shares of its capital stock.
Section 4.3 Company Common Stock; Company Subsidiaries. (a) All
of the shares of Company Common Stock to be transferred and delivered to the
GSCP Funds in accordance with this Agreement will be, when so transferred and
delivered, duly authorized, validly issued, fully paid and nonassessable and
free of preemptive rights. Upon the delivery of such shares of Company Common
Stock to the GSCP Funds at the Closing, as provided for in this Agreement, the
Company will transfer to the GSCP Funds good and valid title to such shares,
free and clear of any lien, pledge, charge, security interest, encumbrance,
title retention agreement, adverse claim, option or other restriction
whatsoever, except such restrictions placed thereon by any of the GSCP Funds or
any person claiming by, through or under any of the GSCP Funds.
(b) Section 4.3(b) of the Company Disclosure Letter sets forth
the name of each subsidiary of the Company (collectively, the "Company
Subsidiaries") and the state or jurisdiction of its incorporation or
organization. Each Company Subsidiary is a corporation or other entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has the corporate or other
similar power and authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its business as now being
conducted, except where any failure of the aforementioned to be the case would
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. Each Company Subsidiary is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except in such jurisdictions
where any failure of the aforementioned to be the case would not, individually
or in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.
(c) Except as set forth in Section 4.3(c) of the Company
Disclosure Letter, the Company is, directly or indirectly, the record and
beneficial owner of all of the outstanding shares of capital stock of each of
the Company Subsidiaries, there are no proxies with respect to any such shares,
and no equity securities of any Company Subsidiary are or may become required to
be issued, and there are no understandings or arrangements by which the Company
or any Company Subsidiary is or may be bound to issue, redeem, purchase or sell
additional shares of capital stock of any Company
Subsidiary or securities convertible into or exchangeable or exercisable for any
such shares. Except as set forth in Section 4.3(c) of the Company Disclosure
Letter, all of such shares so owned by the Company are validly issued, fully
paid and nonassessable and are owned by it free and clear of any Encumbrances or
restrictions with respect to the transferability or assignability thereof (other
than restrictions on transfer imposed by federal or state securities laws).
(d) Except for the Company Subsidiaries or as described in
Section 4.3(d) of the Company Disclosure Letter, the Company does not directly
or indirectly own any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, joint venture or other business association or entity
that directly or indirectly conducts any activity which is material to the
Company.
Section 4.4 Authority Relative to This Agreement. The Company has
the corporate power and authority to enter into this Agreement and to carry out
its obligations hereunder. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by the Board of Directors of the
Company, acting upon the unanimous recommendation of the Special Committee, and
no other corporate proceed ings on the part of the Company, other than the
Company obtaining the Shareholder Approval pursuant to Section 2.1, are
necessary to authorize this Agreement, the Restated Articles of Incorporation,
the Amendment, the Restated Bylaws, the Acquisition or the other transactions
contemplated hereby. Subject to the foregoing, this Agreement has been duly and
validly executed and delivered by the Company and (assuming this Agreement
constitutes a valid and binding obligation of each of the GSCP Funds)
constitutes a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally from time to time in effect and to general equitable
principles.
Section 4.5 Consents and Approvals: No Violations. Except (a) for
the Governmental Requirements, (b) for the filings, permits, authorizations,
consents or approvals with, of or by Government Entities listed in Section 4.5
of the Company Disclosure Letter or (c) where the failure to make any filing
with, or to obtain any permit, authorization, consent or approval of, any
Governmental Entity would not prevent or delay the consummation of the
Acquisition, or otherwise prevent the Company from performing its obligations
under this Agreement, and would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, no filing
with, and no permit, authorization, consent or approval of, any Governmental
Entity is necessary for the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the Acquisition
and the other transactions contemplated by this Agreement. Except as set forth
in Section 4.5 of the Company
Disclosure Letter, no consent or approval of any other party (including, but not
limited to, any party to any Company Contracts (as defined below)) is required
to be obtained by the Company or any Company Subsidiary for the execution,
delivery or performance of this Agreement or the performance by the Company of
the transactions contemplated hereby, except for such consents the failure of
which to obtain would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect. Except as set forth in
Section 4.5 of the Company Disclosure Letter, neither the execution, delivery or
performance of this Agreement by the Company, nor the consummation by the
Company of the transactions contemplated hereby, nor compliance by the Company
with any of the provisions hereof, will (i) conflict with or result in any
breach of any provisions of the Articles of Incorporation or Bylaws of the
Company, or similar organizational documents of any of the Company Subsidiaries,
(ii) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation, vesting, payment, exercise, acceleration, suspension
or revocation) under, any of the terms, conditions or provisions of any note,
bond, mortgage, deed of trust, security interest, indenture, license, contract,
agreement, plan or other instrument or obligation to which the Company or any of
the Company Subsidiaries is a party or by which any of them or any of their
properties or assets are bound, (iii) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the Company or the Company
Subsidiaries or any of their properties or assets, (iv) result in the creation
or imposition of any Encumbrance on any asset of the Company or any Company
Subsidiary or (v) cause the suspension or revocation of any certificate of
authority, permit, license, governmental authorization, consent or approval
necessary for the Company or any of the Company Subsidiaries to conduct its
business as currently conducted, except in the case of clauses (ii), (iii), (iv)
and (v) for violations, breaches, defaults, terminations, cancellations,
accelerations, vestings, payments, exercises, creations, impositions,
suspensions or revocations which would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
Section 4.6 Company SEC Reports. The Company has filed with the
SEC and made available to GSCP true and complete copies of each registration
statement, report and proxy or information statement (including exhibits and any
amendments thereto) filed or required to be filed by the Company with the SEC
since January 1, 1997 (collectively, the "Company SEC Reports"). As of the
respective dates the Company SEC Reports were filed with the SEC or amended,
each of the Company SEC Reports (i) complied as to form in all material respects
with all applicable requirements of the Securities Act and Exchange Act, and the
rules and regulations promulgated thereunder and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Each of the
audited consolidated financial statements and unaudited interim consolidated
financial statements of the Company (including any related notes and schedules)
included (or incorporated by reference) in the Company SEC Reports fairly
presents in all material
respects, in conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis (except as may be indicated in the notes thereto),
the consolidated financial position of the Company and the Company Subsidiaries
as of the dates thereof and the consolidated results of their operations and
changes in their financial position for the periods then ended (subject to
normal year-end adjustments, in the case of any unaudited interim financial
statements) except (x) as set forth in Section 4.6 of the Company Disclosure
Letter, and (y) that the interim, financial statements do not include complete
footnotes required by GAAP.
Section 4.7 Absence of Certain Changes. Since September 30, 1998,
except as set forth in Section 4.7 of the Company Disclosure Letter, there has
been no event, condition or set of circumstances which, individually or in the
aggregate, has had or is reasonably likely to result in a Company Material
Adverse Effect, and the Company and the Company Subsidiaries have in all
material respects conducted their businesses in the ordinary course.
Section 4.8 Litigation. Except as set forth in Section 4.8 of the
Company Disclosure Letter, there is no suit, action, proceeding or investigation
(whether at law or equity, before or by any federal, state or foreign court,
tribunal, commission, board, agency or instrumentality, or before any
arbitrator) pending or, to the knowledge of the Company, threatened against the
Company or any of the Company Subsidiaries, which, individually or in the
aggregate, would reasonably be expected to have a Company Material Adverse
Effect, nor is there any judgment, decree, injunction, rule or order of any
court, governmental department, commission, agency, instrumentality or
arbitrator outstanding against the Company or any of the Company Subsidiaries
having, or which, insofar as can reasonably be foreseen, in the future may
reasonably be expected to have, a Company Material Adverse Effect.
Section 4.9 Absence of Undisclosed Liabilities. Except for
liabilities or obligations (i) which are accrued or reserved against in the
Company's financial statements (or reflected in the notes thereto) included in
the Company's Quarterly Report on Form 10-Q for the nine months ended September
30, 1998 or (ii) disclosed in Section 4.9 of the Company Disclosure Letter, the
Company and the Company Subsidiaries do not have any liabilities or obligations
of any nature whatsoever (whether absolute, accrued, contingent or otherwise)
("Liabilities") required by GAAP to be set forth on the balance sheet of the
Company or any Company Subsidiary, other than Liabilities arising since
September 30, 1998 in the ordinary course of business that, individually or in
the aggregate, are not reasonably likely to have a Company Material Adverse
Effect.
Section 4.10 No Default. Except as set forth in Section 4.10 of
the Company Disclosure Letter, neither the Company nor any of the Company
Subsidiaries is in violation or breach of, or default under (and no event has
occurred which with notice or the lapse of time or both would constitute a
violation or breach of, or a default under) any
term, condition or provision of (a) its Articles or Certificate of
Incorporation, as the case may be, or Bylaws, (b) any note, bond, mortgage, deed
of trust, security interest, indenture, license, agreement, plan, contract,
lease, commitment or other instrument or obligation to which the Company or any
of the Company Subsidiaries is a party or by which they or any of their
properties or assets are bound, (c) any order, writ, injunction, decree,
statute, rule or regulation applicable to the Company or any of the Company
Subsidiaries or any of their properties or assets, or (d) any permit, license,
governmental authorization, consent or approval necessary for the Company or any
of the Company Subsidiaries to conduct their respective businesses as currently
conducted, except in the case of clauses (b), (c) and (d) above for breaches,
defaults or violations which would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
Section 4.11 Taxes. Except as set forth in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997 or Section 4.11 of the
Company Disclosure Letter, to the knowledge of the Company:
(a) (i) all material Tax Returns relating to the Company and the
Company Subsidiaries required to be filed have been filed, (ii) all such Tax
Returns are true and correct in all material respects, (iii) all Taxes shown as
due and payable on such Tax Returns, and all material Taxes (whether or not
reflected on such Tax Returns) relating to the Company or any of the Company
Subsidiaries required to be paid have been paid, (iv) adequate reserves have
been made on the most recent financial statements included in the Company SEC
Reports in accordance with GAAP for all Taxes relating to the Company and the
Company Subsidiaries for all taxable periods or portions thereof accrued through
the date of such financial statements, and (v) the Company and the Company
Subsidiaries have duly and timely withheld all material Taxes required to be
withheld and such withheld Taxes have been either duly and timely paid or
properly set aside in accounts for such purpose and will be duly and timely
paid.
(b) no written agreement or other written document waiving or
extending, or having the effect of waiving or extending, the statute of
limitations or the period of assessment or collection of any Taxes relating to
the Company or any of the Company Subsidiaries and no power of attorney with
respect to any such Taxes has been filed or entered into with any taxing
authority. The time for filing any Tax Return relating to the Company or any of
the Company Subsidiaries has not been extended to a date later than the date of
this Agreement.
(c) (i) no audits or other administrative proceedings or court
proceed ings are presently pending with regard to any Taxes or Tax Return of the
Company or any of the Company Subsidiaries as to which any taxing authority has
asserted in writing any claim which, if adversely determined, would reasonably
be expected to have a Company Material Adverse Effect, and (ii) no taxing
authority is now asserting in writing any
deficiency or claim for Taxes or any adjustment to Taxes with respect to which
the Company or any of the Company Subsidiaries may be liable with respect to
income and other material Taxes which has not been fully paid or finally
settled.
(d) none of the Company and the Company Subsidiaries (i) is a
party to or bound by or has any obligation under any written Tax sharing, Tax
indemnity or similar agreement or arrangement (including, without limitation,
the Tax indemnification provisions of any acquisition or disposition agreement),
(ii) is or has been a member of any consolidated, combined or unitary group for
purposes of filing Tax Returns or paying Taxes (other than such a group the
common parent of which is the Company) or (iii) has entered into a closing
agreement pursuant to Section 7121 of the Code, or any predecessor provision or
any similar provision of state or local law.
(e) none of the assets of the Company or any of the Company
Subsidiaries are subject to any Tax lien (other than liens for Taxes that are
not yet due or that are being contested in good faith by appropriate proceedings
and which have been properly reserved for in the books and records of the
Company).
(f) neither the Company nor any of the Company Subsidiaries is
subject to an election to have the provisions of Section 341(f) of the Code
apply.
(g) "Taxes" shall mean all federal, state, local or foreign
income, alternative minimum, accumulated earnings, personal holding company,
franchise, capital stock, profits, windfall profits, gross receipts, sales, use,
value added, transfer, registra tion, stamp, premium, excise, customs duties,
severance, environmental (including taxes under Section 59A of the Code), real
property, personal property, ad valorem, occupancy, license, occupation,
employment, payroll, social security, disability, unemployment, workers'
compensation, withholding, estimated or other similar taxes, duties, fees,
assess ments or other governmental charges or deficiencies thereof (including
all interest and penalties thereon and additions thereto). "Tax Returns" shall
mean all federal, state, local and foreign tax returns, declarations,
statements, reports, schedules, forms and informa tion returns and any
amendments to any of the foregoing relating to Taxes.
Section 4.12 Property. (a) Except as set forth in Section 4.12(a)
of the Company Disclosure Letter, each of the Company and the Company
Subsidiaries (i) has good and valid title to all of its properties, assets and
other rights that do not constitute real property free and clear of all
Encumbrances, except for such Encumbrances that are not, individually or in the
aggregate, reasonably expected to have a Company Material Adverse Effect, and
(ii) owns, has valid leasehold interests in or valid contractual rights to use,
(x) each of the assets identified in Schedule 5.1(f) and (y) all of the assets,
tangible and intangible, used by, or necessary for the conduct of, its business,
except where the failure to have such valid leasehold interests or such valid
contractual rights are not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
(b) Except as set forth in Section 4.12(b) of the Company
Disclosure Letter or as would not reasonably be expected to result in a Company
Material Adverse Effect, each of the Company and the Company Subsidiaries owns
and has good and valid title to the real property owned by such party and used
in its business, free and clear of all Encumbrances, except for (A) minor
imperfections of title, easements and rights of way, none of which, individually
or in the aggregate, materially detracts from the value of or impairs the use of
the affected property or impairs the operation of the Company or any of the
Company Subsidiaries and (B) liens for current taxes not yet due and payable.
(c) Section 4.12(c) of the Company Disclosure Letter sets forth a
list, which is accurate and complete in all material respects, of each material
real property lease under which the Company or any of the Company Subsidiaries
is a tenant, and the Company has made a true and complete copy of each such
lease available to GSCP. The Company and each Company Subsidiary is in peaceful
and undisturbed possession of the space and/or estate under each lease under
which it is a tenant, and there are no defaults by it as tenant thereunder,
except for such disturbances or defaults that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
Section 4.13 Compliance with Laws; Authorizations. (a) The
business of the Company and each of the Company Subsidiaries is being conducted
in compliance with all applicable laws, including, without limitation, all
insurance codes, laws, usury, truth in lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, disclosure
laws, ordinances, rules, regulations, decrees and orders of any Governmental
Entity, and any other codes, laws, ordinances, rules, regulations, decrees and
orders of any Governmental Entity relating to the offer and sale of the
Company's and the Company Subsidiaries' products or services, the marketing of
any such products or services to potential purchasers or subscribers thereto, or
any joint venture with any other party relating to the foregoing, and all
material notices, reports, documents and other information required to be filed
thereunder within the last three years were properly filed and were in
compliance with such laws, except, in each case, for such non-compliance as
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect. The representations and warranties contained in
this Section 4.13 do not cover any matters covered by Sections 4.18, 4.19 or
4.20.
(b) The Company, and each of the Company Subsidiaries, has all
certificates of authority, approvals, authorizations, permits and licenses,
including, without limitation, mortgage banking licenses, the use and exercise
of which are necessary for the conduct of its business as now conducted
("Authorizations"), other than such Authorizations the absence of which would
not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. The business
of the Company and each of the Company Subsidiaries has been and is being
conducted in compliance with all such Authorizations, except for such
non-compliance as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect. To the knowledge of the
Company after due inquiry or as would not reasonably be likely, individually or
in the aggregate, to result in a Company Material Adverse Effect, all such
Authorizations are in full force and effect, and there is no proceeding or
investigation pending or threatened and no communication, whether written or
oral, which would reasonably be expected to lead to the revocation, amendment,
failure to renew, limitation, suspension or restriction of any such
Authorization. Section 4.13(b) of the Company Disclosure Letter sets forth a
list of each material Authorization.
(c) Except as set forth in Section 4.13(c) of the Company
Disclosure Letter, neither the Company nor any Company Subsidiary has entered
into any agreements or stipulations with any Governmental Entity, and no
judgments, decrees, injunctions, fines or orders of any Governmental Entity have
been issued with respect to the Company and the Company Subsidiaries, which,
individually or in the aggregate, has had or would reasonably be expected to
have a Company Material Adverse Effect.
Section 4.14 Regulatory Filings. The Company has made available
for inspection by GSCP complete copies of all material registrations, filings
and submissions made since January 1, 1997 by the Company or any of the Company
Subsidiaries with any Governmental Entity and any reports of examinations issued
since January 1, 1997 by any such Governmental Entity that relate to the Company
or any of the Company Subsidiaries. The Company and the Company Subsidiaries
have filed all reports, statements, documents, registrations, filings or
submissions required to be filed by any of them with any Governmental Entity,
except where the failure to file, in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect; and all such reports,
statements, documents, registrations, filings or submissions were true, complete
and accurate and complied with applicable law when filed except for such
inaccuracies and noncompliance as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect and, except as
set forth in Section 4.14 of the Company Disclosure Letter, no material
deficiencies have been asserted by any such Governmental Entity with respect to
such reports, statements, documents, registrations, filings or submissions that
have not been satisfied, except for such deficiencies as would not, individually
or in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.
Section 4.15 Investments. (a) Section 4.15 of the Company
Disclosure Letter sets forth a materially accurate and complete list of
investments, including, without limitation, any securities, derivative
instruments, repurchase agreements, options, forwards, futures or hybrid
securities ("Company Investments") owned by the Company and the Company
Subsidiaries as of September 30, 1998, together with the cost basis,
book or amortized value, as the case may be, and investment rating as of
September 30, 1998 of each such Company Investment. Except as set forth in
Section 4.15 of the Company Disclosure Letter, the Company and the Company
Subsidiaries have good and marketable title to the Company Investments.
Section 4.16 Information in Proxy Statement. None of the
information supplied by the Company for inclusion or incorporation by reference
in the Proxy Statement will, and the Proxy Statement (or any amendment thereof
or supplement thereto) will not, at the date it becomes effective and at the
time of the Special Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading , except that no representation is made by the
Company with respect to statements made therein based on information supplied by
the GSCP Funds in writing for inclusion in the Proxy Statement. The Proxy
Statement will comply as to form in all material respects with the provisions of
the Exchange Act and the rules and regulations thereunder.
Section 4.17 Brokers. Except as set forth in Section 4.17 of the
Company Disclosure Letter, no person is entitled to any brokerage, financial
advisory, finder's or similar fee or commission payable by the Company or any
Company Subsidiary in connection with the Acquisition or the other transactions
contemplated hereby based upon arrangements made by and on behalf of the
Company.
Section 4.18 Employee Benefit Plans; ERISA. (a) Section 4.18(a)
of the Company Disclosure Letter sets forth a complete and accurate list of: (i)
all severance, employment, consulting, change of control, retention and all
other similar agreements between the Company or any Company Subsidiary and any
current or former employee, agent, independent contractor, officer or director,
(ii) all severance programs, policies and practices of the Company and each of
the Company Subsidiaries, (iii) all plans or arrangements of the Company and
each of the Company Subsidiaries relating to its respective current or former
employees, agents, independent contractors, officers or directors that contain
change in control provisions, including in all cases any and all amendments
thereto, and (iv) all Company Benefit Plans. For purposes of this Agreement,
"Company Benefit Plan" shall mean any pension, post-retirement benefit, profit
sharing, deferred compensation, incentive compensation, stock ownership, stock
purchase, stock option, phantom stock, equity-based award, retirement, vacation,
disability, death benefit, hospitalization or other medical, dental, accident,
disability, life or other insurance, supplemental unemployment benefits,
material bonus, fringe and other welfare benefit plan, program, policy,
agreement or arrangement, and each other employee benefit plan, program,
agreement, arrangement or understanding providing benefits to any current or
former employee, agent, independent contractor, officer or director of the
Company or any of the Company Subsidiaries, whether written or unwritten, that
is or has been maintained or established by the Company or any other Person
that, together with the
Company, is treated as a single employer under Section 414 of the Code (each a
"Company Commonly Controlled Entity"), or to which the Company or any Company
Commonly Controlled Entity contributes or is obligated or required to contribute
or with regard to which the Company or any of its Company Commonly Controlled
Entities has knowledge of any event, transaction or condition that would
reasonably be expected to result in any material liability at the Closing.
(b) With respect to each Company Benefit Plan, to the extent
applic able, the Company and the Company Subsidiaries have heretofore made
available or have caused to be made available to GSCP true and complete copies
of the following documents: (i) a copy of each written Company Benefit Plan and
a summary of the essential terms of each unwritten Company Benefit Plan, (ii) a
copy of the most recent annual report on Form 5500 and actuarial report, if
required under the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), (iii) a copy of the most recent Summary Plan Description required
under ERISA with respect thereto, (iv) if the Company Benefit Plan is funded
through a trust or any third party funding vehicle, a copy of the trust or other
funding agreement and the latest financial statements thereof, and (v) the most
recent determination letter received from the IRS with respect to each Company
Benefit Plan intended to qualify under Section 401 of the Code.
(c) Except as set forth in Section 4.18(c) of the Company
Disclosure Letter, (i) with respect to the Company Benefit Plans, no event has
occurred and there exists no condition or set of circumstances, in connection
with which the Company or any Company Commonly Controlled Entity could be
subject to any liability under ERISA, the Code or any other applicable law
(either directly or indirectly, including as a result of an indemnification
obligation or any joint and several liability obligations) that, individually or
in the aggregate, would result in a material liability to the Company or any of
the Company Subsidiaries, (ii) no Company Benefit Plan is a multi-employer plan
within the meaning of Section 3(37) of ERISA, (iii) each Company Benefit Plan
has been administered substantially in accordance with its terms, and all the
Company Benefit Plans have been operated and are in material compliance with the
applicable provisions of ERISA, the Code and all other applicable laws and the
terms of all applicable collective bargaining agreements except in so far as a
failure to so comply, whether individually or collectively, would not result in
a material liability to the Company or any of the Company Subsidiaries, (iv)
with respect to each plan intended to be a qualified plan under Section 401(a)
of the Code, the IRS has issued a favorable determination letter with respect to
the qualification of each such Company Benefit Plan and its related trust, if
any, and the IRS has not taken any action to revoke any such letter and the
Company knows of no event that has occurred since the date of such determination
that would reasonably be expected to result in the disqualification of such plan
and (v) there are no pending or, to the knowledge of the Company, threatened or
anticipated actions, suits, claims, assessments, complaints, proceedings or
investigations of any kind in any court or governmental agency with respect to
any Company Benefit Plan (other than routine claims for benefits) that
could reasonably be expected to result in a material liability to the Company or
the Company Subsidiaries.
(d) Except as set forth in Section 4.18(d) of the Company
Disclosure Letter, (i) no Company Benefit Plan provides for medical benefits
(whether or not insured) to be made available with respect to current or former
employees, agents, officers, directors or independent contractors (or any
dependent of any of them) after retirement or other termination of service
(other than (x) coverage mandated by applicable law or (y) benefits the full
cost of which is borne by the current or former employee, agent, officer,
director or independent contractor), and (ii) the consummation of the
transactions contemplated by this Agreement will not (x) entitle any current or
former employee, agent, independent contractor, director or officer of the
Company or any of the Company Subsidiaries or any Company Commonly Controlled
Entity to severance pay, golden parachute payment, or any other payment from the
Company or a Company Subsidiary, except as expressly provided in this Agreement,
(y) accelerate the time of payment or vesting, or increase the amount of
compensation due any such employee, agent, independent contractor, director or
officer, or (z) constitute a "change in control" under any Company Benefit Plan.
(e) Section 4.18(e) of the Company Disclosure Letter sets forth a
complete and accurate list of all Company Stock Options outstanding as of the
date of this Agreement (including the name of the Company Stock Option holder
and such person's relationship to the Company and the Company Subsidiaries, the
vesting schedules, exercise periods and exercise prices thereof and of all
Company stock appreciation rights ("Company SAR's") outstanding as of the date
of this Agreement (including the name of the Company SAR holder and such
person's relationship to the Company and the Company Subsidiaries) and the
reference market prices thereof.
Section 4.19 Labor and Employee Relations. Except as disclosed in
Section 4.19 of the Company Disclosure Letter, none of the employees of the
Company or the Company Subsidiaries are represented by any labor organization
and, to the knowledge of the Company, no union claims to represent these
employees have been made. Neither the Company nor any of the Company
Subsidiaries is a party to any collective bargaining or other labor union
contract applicable to persons employed by the Company or any of the Company
Subsidiaries, and no collective bargaining agreement is being negotiated by the
Company or Company Subsidiaries. There is no labor dispute, strike or work
stoppage against the Company or Company Subsidiaries pending, or to the
knowledge of the Company, threatened except for such routine disputes and
grievances as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect. To the knowledge of the
Company, the Company and Company Subsidiaries are not, and have not been,
engaged in any unfair labor practices as defined in the National Labor Relations
Act or similar applicable law, ordinance or regulation, nor is
there pending any unfair labor practice charge, except for such as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
Section 4.20 Environmental Matters. (a) Except as disclosed in
Section 4.20(a) of the Company Disclosure Letter or as would not reasonably be
likely to have a Company Material Adverse Effect, (i) each of the Company and
the Company Subsidiaries is and has been in compliance in all respects with and,
has no existing liabilities under, and (ii) there are no written claims or
notice by any person received by the Company or any of the Company Subsidiaries
that any of the Company or the Company Subsidiaries has not been in compliance
in all respects with or has any existing liabilities under all applicable laws,
rules, regulations, common law, ordinances, decrees, orders and other binding
legal requirements relating to pollution, the preservation of the environment,
and the exposure to materials in the environment or the work place
("Environmental Laws") with respect to property owned, leased or operated by the
Company or any of the Company Subsidiaries. Except as would not reasonably be
likely to have a Company Material Adverse Effect, neither the Company nor any of
the Company Subsidiaries is subject to any decrees, orders, decisions of
arbitrators or judgments that impose requirements, restrictions or liabilities
under, or penalties for violations of, any Environmental Laws or the
aforementioned requirements or restrictions.
(b) Except as disclosed in Section 4.20(b) of the Company
Disclosure Letter, with respect to currently owned property and all property
formerly owned, leased or operated by the Company or any of the Company
Subsidiaries, including foreclosure property, to the knowledge of the Company
after due inquiry, there are no past or present actions, conditions or
occurrences that could form the basis of any claim under Environmental Laws
against, or liability under such laws of, the Company or any of the Company
Subsidiaries, except for such claims or liabilities which in the aggregate would
not reasonably be expected to result in a Company Material Adverse Effect.
Section 4.21 Opinion of Financial Advisor. The Company has
received a written opinion from Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation and the Special Committee of the Board of Directors has received a
written opinion from X.X. Xxxxxx Securities Inc., both dated as of the date
hereof, and acknowledgements of such opinions, both dated March 31, 1999, to the
effect that the investment to be made by the GSCP Funds in the Company pursuant
to the terms of this Agreement, the Initial Loan Agreement, Amendment No. 1 and
the Loan Agreement is fair to the public shareholders of the Company from a
financial point of view, and the Company has received the permission of
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and X.X. Xxxxxx Securities
Inc. to include such opinions in the Proxy Statement.
Section 4.22 Contracts. (a) Section 4.22 of the Company
Disclosure Letter sets forth a list of all contracts, agreements, arrangements
or understandings (written or oral) ("Contracts") to which the Company or any of
the Company Subsidiaries
is a party or by which it or any of them is bound and which are not set forth as
exhibits to any of the Company SEC Reports and which:
(i) require the payment by or to the Company or the Company
Subsidiaries of amounts in excess of $50,000 per annum or are joint venture or
strategic alliance or similar agreements, except for (x) mortgage loans
purchased or originated in the ordinary course of business, (y) Contracts of the
types specified in clauses (i) - (iv) of Section 4.18(a), or (z) agency, dealer,
correspondent, sales representative, marketing and similar agreements entered
into in the ordinary course of business;
(ii) restrict the Company or any of the Company Subsidiaries from
engaging in any line of business in any geographic area or competing with any
person or entity or restricting the ability of the Company or the Company
Subsidiaries to acquire equity securities of any person or entity;
(iii) are employment, consulting or severance contracts
applicable to any employee, officer, director, consultant or shareholder of the
Company or the Company Subsidiaries, other than any contract which by its terms
the Company or any Company Subsidiary may terminate on not more than 60 days'
notice without liability;
(iv) were entered into in connection with an acquisition, sale,
lease, license, disposition or similar agreement of or regarding another entity,
block of business, real property or other assets or property by the Company or
any Company Subsidiary either not in the ordinary course of business (separately
identifying any such Contract which includes a continuing payment or indemnity
obligation), or which pertain to any such assets or property which have a value
greater than $500,000, except for mortgage loans purchased or originated in the
ordinary course of business;
(v) is an evidence of any indebtedness for borrowed money of the
Company or any of the Company Subsidiaries, including without limitation, any
note, bond, mortgage, deed of trust, credit agreement, loan agreement, security
agreement, or indenture;
(vi) is an intercompany agreement, including without limitation,
any tax sharing, expense sharing, employee leasing or other similar agreement;
(vii) were entered into in connection with securitizations or
pools of mortgage loans, including, without limitation, any mortgage sale
agreement or mortgage servicing agreement to which the Company or any Company
Subsidiary is a party (the "Mortgage Servicing Agreements") relating thereto and
any documentation evidencing the rights in respect of interest only or residual
certificates owned by the Company or any Company Subsidiary; any such agreements
described in the preceding clause that were entered into in the ordinary course
of business may be described in Section 4.22 of the
Company Disclosure Letter in summary form but shall be subject to Section
4.22(b) hereof; or
(viii) is a management, administrative services, data processing
or software licensing Contract, excluding off-the-shelf software licenses; (the
contracts in clause (i)-(viii), together with the Contracts filed as exhibits to
the Company SEC Reports, collectively, the "Company Contracts").
(b) With respect to each of the Company Contracts, to the
knowledge of the Company, except as disclosed in Section 4.22 of the Company
Disclosure Letter: such contract is (assuming due power and authority of, and
due execution and delivery by, the other party or parties thereto) valid and
binding upon the Company or any Company Subsidiary party thereto and, to the
Company's knowledge, the other party thereto and is in full force and effect.
Section 4.23 Intellectual Property. The Company and/or each of
the Company Subsidiaries owns, or is licensed or otherwise possesses legally
enforceable rights to use all patents, trademarks, trade names, service marks,
copyrights, and any applications therefor, technology, know-how, computer
software programs or applications, and tangible or intangible proprietary
information or materials that are used in the business of the Company and the
Company Subsidiaries as currently conducted, except for any such failures to
own, be licensed or possess that are not, individually or in the aggregate,
reasonably likely to have a Company Material Adverse Effect, and to the
knowledge of the Company all patents, trademarks, trade names, service marks and
copyrights held by the Company and/or the Company Subsidiaries are valid and
subsisting. The Company does not know of any claim or any infringement or
similar violation that could give rise to any claim against the use by the
Company or any of the Company Subsidiaries of any trademarks, trade names, trade
secrets, copyrights, patents, technology, know-how or computer software programs
and applications used in the business of the Company or any of the Company
Subsidiaries as currently conducted or as proposed to be conducted which would
reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect.
Section 4.24 Voting Requirements; Takeover Statutes. (a) The only
votes of the holders of any class or series of the Company's capital stock
necessary to approve and adopt this Agreement, the Restated Articles of
Incorporation, the Acquisition and the other transactions contemplated by this
Agreement excluding the Amendment are as follows: (i) if a quorum consisting of
the majority of the voting power of the Company Common Stock exists, the votes
of the Company Common Stock that favor approval and adoption exceeding the votes
cast opposing approval and adoption in accordance with Sections 607.0725 and
607.1003 of the FBCA; and (ii) the affirmative votes of the holders of at least
66 2/3% of the Company's Class A Preferred Stock and Class C Preferred Stock,
voting separately as a class. The only vote of the holders of any class or
series of
the Company's capital stock necessary to approve and adopt the Amendment is, if
a quorum exists, the majority of the voting power of the Company Common Stock,
excluding any voting shares held by the GSCP Funds, their affiliates and
associates, in accordance with Section 607.0901(5)(c) of the FBCA.
(b) The Board of Directors of the Company, acting on the
unanimous recommendation of the Special Committee, has approved the terms of
this Agreement, the Restated Articles of Incorporation, the Amendment, the
Restated Bylaws, the consummation of the Acquisition and the other transactions
contemplated by this Agreement, and such approval is sufficient to render
inapplicable to this Agreement, the Acquisition and the other transactions
contemplated hereby the provisions of Sections 607.0901 and 607.0902 of the
FBCA. No other state takeover statute or similar statute or regulation applies
or purports to apply to this Agreement, the Restated Articles of Incorporation,
the Amendment, the Restated Bylaws, the Acquisition or any of the other
transactions contemplated hereby, and no provision of the Articles of
Incorporation, Bylaws or other governing instruments of the Company or any of
the Company Subsidiaries would, directly or indirectly, restrict or impair the
ability of the GSCP Funds to vote, or otherwise to exercise the rights of
shareholders with respect to, shares of the Company and the Company Subsidiaries
that may be acquired or controlled by the GSCP Funds.
Section 4.25 Disclosure. To the Company's knowledge, no
representa tion or warranty by the Company or the Company Subsidiaries contained
in or made in any certificate delivered pursuant to this Agreement contains or
will contain any untrue statement of a material fact or omits or will omit to
state any material fact necessary, in light of the circumstances under which it
was made, to make the statements herein or therein not misleading.
Section 4.26 Transactions with Affiliates. Except as set forth in
Section 4.26 of the Company Disclosure Letter or as disclosed in any of the
Company SEC Reports, neither the Company nor any Company Subsidiary has entered
into any material transaction, contract or arrangement with an Affiliate (other
than the Company, any Company Subsidiary or the GSCP Funds) (i) since January 1,
1998 or (ii) prior to January 1, 1998 and in respect of which either the Company
or a Company Subsidiary has or may in the future have continuing obligations.
"Affiliate" or "affiliate" shall mean a Person that directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, the first Person, including but not limited to a
subsidiary of the first Person, a Person of which the first Person is a
subsidiary, or another subsidiary of a Person of which the first Person is also
a subsidiary. "Control" (including the terms "controls" "controlled by" and
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management policies of a
Person, whether
through the ownership of voting securities, by contract or credit arrangement,
as trustee or executor, or otherwise.
Section 4.27 Discontinued Operations. Section 4.27 of the Company
Disclosure Letter accurately describes all of the businesses and operations that
(i) have been dissolved, sold, transferred or otherwise disposed of by the
Company, any Company Subsidiary or any former subsidiary of the Company, any
Company Subsidiary, or any predecessor thereto and (ii) were businesses and
operations of the Company, any Company Subsidiary or any former subsidiary of
the Company or any predecessor thereto, in either case, in respect of which any
of them may have any continuing material liability or obligation.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE ACQUISITION
Section 5.1 Conduct of Business by the Company Pending the
Acquisition. From the date hereof until the Closing, unless GSCP shall otherwise
agree in writing, or except as set forth in Section 5.1 of the Company
Disclosure Letter or as otherwise contemplated by this Agreement, the Company
and the Company Subsidiaries shall conduct their respective businesses solely in
the ordinary course and shall use all commercially reasonable efforts to
preserve intact their business organizations and relationships with third
parties (including but not limited to their respective relationships with
policyholders and agents), to keep available the services of their present
officers and key employees, subject to the terms of this Agreement. Except as
set forth in Section 5.1 of the Company Disclosure Letter or as otherwise
provided in this Agreement, from the date hereof until the Closing, without the
prior written consent of GSCP:
(a) the Company shall not and shall not permit any Company
Subsidiary to adopt or propose any change in its Articles of Incorporation or
Bylaws;
(b) the Company shall not declare, set aside or pay any dividend
or other distribution with respect to or acquire any shares of capital stock of
the Company, or split, combine or reclassify any of the Company's capital stock,
and the Company and the Company Subsidiaries shall not repurchase, redeem or
otherwise acquire any shares of capital stock or other securities of, or other
ownership interests in, the Company;
(c) the Company shall not, and shall not permit any Company
Subsidiary to, merge or consolidate with any other person or (except in the
ordinary course of business after notice to GSCP) acquire a material amount of
assets of any other person;
(d) the Company shall not, and shall not permit any Company
Subsidiary to, enter into or terminate any material contract, agreement,
commitment, or understanding other than agreements entered into with
unaffiliated third parties, on an arms-length basis and in the ordinary course
of business constituting marketing affiliation and sales agreements on terms
comparable with its existing agreements of such nature;
(e) the Company shall not, and shall not permit any Company
Subsidiary to, sell, lease, license or otherwise surrender, relinquish or
dispose of (i) any material facility owned or leased by the Company or any
Company Subsidiary or (ii) any assets or property which are material to the
Company and the Company Subsidiaries, taken as a whole, except pursuant to
existing contracts or commitments, or in the ordinary course of business after
notice to GSCP;
(f) the Company shall not, and shall not permit any Company
Subsidiary to, sell, lease, license or otherwise surrender, relinquish or
dispose of the assets described on Schedule 5.1(f) hereto;
(g) the Company shall not, and shall not permit any Company
Subsidiary to, settle any material audit, make or change any material Tax
election or file amended Tax Returns unless required by law or such settlement
results in a refund to the Company and in each case the Company notifies GSCP at
least five days prior to the date any such action is taken;
(h) the Company and the Company Subsidiaries shall not issue any
capital stock or other securities or enter into any amendment of any material
term of any outstanding security of the Company, except upon the exercise of
stock options existing on the date hereof, and the Company and the Company
Subsidiaries shall not incur any material indebtedness except in the ordinary
course of business pursuant to existing credit facilities or arrangements, amend
or otherwise increase, accelerate the payment or vesting of the amounts payable
or to become payable under or fail to make any required contribu tion to, any
Company Benefit Plan or materially increase any non-salary benefits payable to
any employee or former employee, except in the ordinary course of business
consistent with past practice, as required by applicable law or as otherwise
permitted by this Agreement;
(i) except in the ordinary course of business consistent with
past practice, as may be required by applicable law or as may be necessary for
compliance under Section 401(a) of the Code, if applicable, the Company shall
not, and shall not permit any Company Subsidiary to (i) grant Options, Company
SAR's or other equity-related awards; (ii) grant any increase in the
compensation, bonus, severance, termination pay or other benefits of any former
or current employee, agent, consultant, officer or director of the Company or
any Company Subsidiary; (iii) enter into or amend any employment agreement,
deferred compensation, consulting, severance, termination,
indemnification or any other such agreement with any such former or current
employee, agent, consultant, officer or director of the Company or any Company
Subsidiary; or (iv) amend, adopt or terminate any Company Benefit Plan;
(j) the Company shall not change any method of accounting or
accounting practice by the Company or any Company Subsidiary, except for any
such change required by GAAP;
(k) the Company shall not, and shall not permit any Company
Subsidiary to, conduct material transactions in Company Investments except in
compliance in all material respects with the investment policies of the Company
and any such Company Subsidiary established from time to time in the ordinary
course of business and in all material respects all applicable laws and
regulations;
(l) the Company shall not, and shall not permit any Company
Subsidiary to, enter into any agreement to purchase, or to lease for a term in
excess of one year, any real property, provided that the Company, or any Company
Subsidiary, (i) may as a tenant, or a landlord, renew any existing lease for a
term not to exceed eighteen months and (ii) nothing herein shall prevent the
Company, in its capacity as a landlord, from renewing any lease pursuant to an
option granted prior to the date hereof;
(m) the Company shall not, and shall not permit any Company
Subsidiary to, enter into any transaction, contract or arrangement whatsoever
with an Affiliate (other than the Company or any Company Subsidiary), except
transactions in the ordinary course of business consistent with past practice
pursuant to pre-existing contracts disclosed in Section 4.26 of the Company
Disclosure Letter or disclosed in the Company SEC Reports;
(n) the Company shall not release any third party from any
material obligation, or grant any consent, under any confidentiality or other
agreement, or fail to fully enforce any such agreement, except in the ordinary
course of business;
(o) without the prior consent of GSCP, which shall not be
unreasonably withheld or delayed, enter into any securitization or pool of
mortgage loans purchased, originated or serviced by the Company or any Company
Subsidiary ("Mortgage Loans") or sale of whole Mortgage Loans in bulk
transactions; and
(p) the Company shall not, and shall not permit any Company
Subsidiary to, agree or commit to do any of the foregoing.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Access and Information. The Company shall afford to
GSCP and its financial advisors, legal counsel, accountants, consultants,
financing sources, and other authorized representatives access upon reasonable
notice and during normal business hours throughout the period prior to the
Closing to all of the books, records, properties, plants and personnel of the
Company and the Company Subsidiaries and, during such period, shall furnish as
promptly as practicable to GSCP (a) a copy of each report, schedule and other
document filed or received by it pursuant to the requirements of federal
securities laws, and (b) all other information as such other party reasonably
may request, provided that no investigation pursuant to this Section 6.1 shall
affect any representations or warranties made herein or the conditions to the
obligations of the GSCP Funds to consummate the Acquisition and the other
transactions contemplated hereby.
Section 6.2 Solicitation. (a) Unless the Company complies with
Section 6.2(c), the Company shall not, nor shall it permit any of the Company
Subsidiaries to, nor shall it authorize or permit any officer, director or
employee of or any investment banker, attorney or other advisor or
representative of, the Company or any of the Company Subsidiaries to, directly
or indirectly, (i) solicit, initiate or encourage the submission of any Takeover
Proposal (as defined in Section 6.2(e)), (ii) enter into any agreement with
respect to any Takeover Proposal or give any approval of the type referred to in
Section 4.24(b) with respect to any Takeover Proposal or (iii) continue or
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any Takeover Proposal. At any time prior to, but at no
time subsequent to, the receipt of the Shareholder Approval, the Company may,
subject to compliance with Section 6.2(c), (i) solicit, initiate or encourage a
Takeover Proposal of the sort referred to in clause (x) of Section 6.2(e) that
involves consideration to the Company's shareholders with a value that the
Company's Board of Directors reasonably believes, based on advice from the
Company's independent outside financial advisor, is superior to the
consideration to the Company provided for pursuant to this Agreement, and (ii)
furnish information with respect to the Company pursuant to a customary
confidentiality agreement to any person making such proposal and (iii)
participate in negotiations or discussions regarding, or furnish to any person
any information with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes, or may reasonably be
expected to lead to, any Takeover Proposal.
(b) Neither the Board of Directors of the Company nor any
committee thereof (including the Special Committee) shall (x) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to any of the GSCP
Funds, the approval or
recommendation by such Board of Directors or such committee (including the
Special Committee) of this Agreement or the Acquisition or (y) approve or
recommend, or propose to approve or recommend, any Takeover Proposal except in
connection with a Superior Proposal (as defined in Section 6.2(e)) and then only
at or after the termination of this Agreement pursuant to and in accordance with
Section 8.3.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 6.2, the Company promptly shall advise
GSCP orally and in writing of any Takeover Proposal, the identity of the person
making any such Takeover Proposal, and all the material terms and conditions
thereof and promptly shall provide GSCP with a true and complete copy of such
Takeover Proposal, if in writing. The Company shall keep GSCP fully informed of
the status and material details (including material amendments or proposed
amendments) of any such Takeover Proposal.
(d) Nothing contained in this Section 6.2 shall prohibit the
Company from taking and disclosing to its shareholders a position contemplated
by Rule 14e-2(a) promulgated under the Exchange Act; provided, however, neither
the Company nor its Board of Directors nor any committee thereof (including the
Special Committee) shall, except as permitted by Section 6.2(b), withdraw or
modify, or propose to withdraw or modify, its position with respect to this
Agreement or the Acquisition or approve or recommend, or propose to approve or
recommend, a Takeover Proposal.
(e) As used in this Agreement: "Superior Proposal" means a bona
fide written Takeover Proposal (x) to acquire, directly or indirectly, for
consideration consist ing of cash and/or securities and/or the contribution or
combination of assets by merger or otherwise, more than 50% of the shares and/or
voting power of Company Common Stock then outstanding or all or substantially
all the assets of the Company, (y) otherwise on terms which the Board of
Directors of the Company decides in its good faith reasonable judgment to be
more favorable to the Company's shareholders than the transactions provided for
pursuant to this Agreement (based on the advice with only customary
qualifications, of the Company's independent financial advisor that the value of
the consideration provided for in such proposal is superior to the value of the
consideration provided for in the transactions provided for pursuant to this
Agreement), for which financing, to the extent required, is then committed or
which, in the good faith reasonable judgment of the Board of Directors, based on
advice from the Company's independent financial advisor, is reasonably capable
of being obtained by such third party and (z) which the Board of Directors
determines, in its good faith reasonable judgment, is reasonably likely to be
consummated without undue delay; and "Takeover Proposal" means any written
proposal for a merger, consolidation or other business combination involving the
Company or any proposal or offer to acquire in any manner, directly or
indirectly, an equity interest in any more than 15% of the voting power of, or a
substantial portion of the assets of, the Company and/or the Company
Subsidiaries, taken as a whole, other than the Acquisition and the other
transactions contemplated by this Agreement.
Section 6.3 Filings; Other Action. Subject to the terms and
conditions herein provided, as promptly as practicable, the Company and the GSCP
Funds shall: (i) promptly make all filings and submissions under the HSR Act and
all filings required by the regulatory authorities of any of the several states,
the District of Columbia and the Commonwealth of Puerto Rico, and deliver
notices and consents to jurisdiction to Governmental Entities, each as
reasonably may be required to be made in connection with this Agreement, the
Acquisition and the other transactions contemplated hereby, (ii) use all
reasonable efforts to cooperate with each other in (A) determining which filings
are required to be made prior to the Closing with, and which material consents,
approvals, permits, notices or authorizations are required to be obtained prior
to the Closing from, Governmental Entities of the United States, the several
states or the District of Columbia, the Commonwealth of Puerto Rico and foreign
jurisdictions in connection with the execution and delivery of this Agreement
and the consummation of the Acquisition and the other transactions contemplated
hereby and (B) timely making all such filings and timely seeking all such
consents, approvals, permits, notices or authorizations, and (iii) use all
reasonable efforts to take, or cause to be taken, all other action and do, or
cause to be done, all other things necessary or appropriate to consummate the
Acquisition and the other transactions contemplated hereby as soon as
practicable. In connection with the foregoing, the Company will, and will cause
each Company Subsidiary to, provide GSCP, and the GSCP Funds will provide the
Company, with copies of correspondence, filings or communications (or memoranda
setting forth the substance thereof) between such party or any of its
representatives, on the one hand, and any Governmental Entity or members of
their respective staffs, on the other hand, with respect to this Agreement, the
Acquisition and the other transactions contemplated hereby and thereby. Each of
the GSCP Funds and the Company acknowledge that certain actions may be necessary
with respect to the foregoing in making notifications and obtaining clearances,
consents, approvals, waivers or similar third party actions which are material
to the consummation of the Acquisition and the other transactions contemplated
hereby, and each of the GSCP Funds and the Company agree to take such action as
is necessary to complete such notifications and obtain such clearances,
approvals, waivers or third party actions, provided, however, that nothing in
this Section 6.3 or elsewhere in this Agreement shall require any party hereto
to incur expenses in connection with the Acquisition and the other transactions
contemplated hereby which are not reasonable under the circumstances in relation
to the size of the Acquisition and the other transactions contemplated hereby or
require the GSCP Funds, the Company or any Company Subsidiary to hold separate,
or make any divestiture of, any asset or otherwise agree to any material
restriction on their operations in order to obtain any waiver, consent or
approval required by this Agreement if, in the case of the Company or any
Company Subsidiary, such divestiture or restriction would reasonably be likely
to have a Company Material Adverse Effect.
Section 6.4 Public Announcements. The GSCP Funds, on the one
hand, and the Company, on the other hand, agree that they will not issue any
press release or otherwise make any public statement with respect to this
Agreement and the transactions
contemplated hereby without the prior approval of the other party (which
approval will not be unreasonably withheld or delayed), except as may be
required by applicable law.
Section 6.5 Company Indemnification Provision. The GSCP Funds and
the Company agree that all rights to indemnification existing in favor of the
present or former directors, officers, employees, fiduciaries and agents of the
Company or any of the Company Subsidiaries (collectively, the "Indemnified
Parties") as provided in the Company's Articles of Incorporation or Bylaws or
the Certificate or Articles of Incorpora tion, Bylaws or similar organizational
documents of any of the Company Subsidiaries as in effect as of the date hereof
or pursuant to the terms of any indemnification agreements entered into between
the Company and any of the Indemnified Parties with respect to matters occurring
prior to the Closing shall survive the Closing and shall continue in full force
and effect (without modification or amendment, except as required by applicable
law or except to make changes permitted by law that would enlarge the
Indemnified Parties' right of indemnification), to the fullest extent and for
the maximum term permitted by law, and shall be enforceable by the Indemnified
Parties against the Company. At the Closing the Company shall expressly and
directly assume by written instrument all such obliga tions. The GSCP Funds and
the Company shall cause to be maintained in effect for not less than six years
from the Closing the current policies of the directors' and officers' liability
insurance maintained by the Company (provided that the Company may substitute
therefor policies of at least equivalent coverage containing terms and
conditions which are not materially less advantageous) with respect to matters
occurring prior to the Closing, provided that in no event shall the GSCP Funds
or the Company be required to expend to maintain or procure insurance coverage
pursuant to this Section 6.6 any amount per annum in excess of 300% of the
aggregate premiums paid in 1998 on an annualized basis for such policies. In the
event the payment of such amount for any year is insufficient to maintain such
insurance or equivalent coverage cannot otherwise be obtained, the Company shall
purchase as much insurance as may be purchased for the amount indicated. The
provisions of this Section 6.6 shall survive the Closing and expressly are
intended to benefit each of the Indemnified Parties.
Section 6.6 Comfort Letter. The Company shall use all reasonable
efforts to cause PricewaterhouseCoopers LLP or their successor and Xxxxx
Xxxxxxxx LLP, the Company's independent accountants, and/or any other relevant
auditors, to deliver to the GSCP Funds a letter dated as of the date of the
Proxy Statement and addressed to the GSCP Funds, in form and substance
reasonably satisfactory to GSCP, in connection with the procedures undertaken by
them with respect to the financial statements and other financial information of
the Company and the Company Subsidiaries contained in the Proxy Statement and
the other matters contemplated by AICPA Statement No. 72 and customarily
included in comfort letters relating to transactions similar to the transactions
contemplated hereby.
Section 6.7 Additional Matters. (a) Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including using all reasonable efforts to obtain all necessary
waivers, consents and approvals in connection with the Governmental Requirements
and any other third party consents and to effect all necessary registrations and
filings. In case at any time after the Closing any further action is necessary
or desirable to carry out the purposes of this Agreement, the proper officers
and/or directors of the GSCP Funds and the Company shall take all such necessary
action.
(b) At all times prior to the Closing, (i) the Company shall
promptly notify GSCP in writing of any fact, condition, event or occurrence that
could reasonably be expected to result in the failure of any of the conditions
contained in Sections 7.1 and 7.3 to be satisfied, promptly upon becoming aware
of the same and (ii) GSCP shall promptly notify the Company in writing of any
fact, condition, event or occurrence that could reasonably be expected to result
in the failure of any of the conditions contained in Sections 7.1 and 7.2 to be
satisfied, promptly upon becoming aware of the same.
Section 6.8 Shareholder Litigation. Each of the Company and the
GSCP Funds shall give the other the reasonable opportunity to participate at its
sole cost and expense in the defense of any shareholder litigation against the
Company or the GSCP Funds, as applicable, and its directors relating to the
transactions contemplated by this Agreement.
Section 6.9 Funding of the Loan Agreement. The GSCP Funds shall,
at the Closing, enter into the Amendment and Restatement of the Loan Agreement
with the Company pursuant to the Commitment Letter and perform their respective
obligations thereunder to fund the Additional Advance.
Section 6.10 Disclosure Letters. From time to time prior to the
Closing, each of the GSCP Funds and the Company may supplement or amend the GSCP
Disclosure Letter or the Company Disclosure Letter, as the case may be, with
respect to any matter hereafter arising that, if existing or occurring at the
date of this Agreement, would have been required to be set forth or described
therein or that is necessary to complete or correct any information therein that
is or has been rendered untrue, inaccurate, incomplete or misleading. Delivery
of such supplements shall be for informational purposes only and shall not
expand or limit the rights or affect the obligations of any party hereunder, and
such supplements shall not constitute a part of the GSCP Disclosure Letter or
Company Disclosure Letter, as the case may be, for purposes of this Agreement.
Section 6.11 Amendment to Preferred Stock Agreement. At or prior
to the Closing, the Company and the GSCP Funds shall enter into Amendment No. 1
to the Preferred Stock Purchase and Option Agreement, dated July 14, 1998, among
GSCP, GSCP Offshore Fund, L.P., Greenwich Fund, L.P., Travelers Casualty and
Surety Company and the Company, which shall be in the form attached hereto as
Exhibit C.
Section 6.12 Dissenters Statute. If dissenters' rights are
provided with respect to the transactions contemplated hereby, in accordance
with Sections 607.1301, 607.1302 and 607.1303 of the FBCA (the "Dissenters
Statute"), the Company shall give GSCP (i) prompt notice of any written notice
or demand under the Dissenters Statute with respect to any Company Common Stock,
any withdrawal of any such notice or demand, and any other instruments delivered
pursuant to the Dissenters Statute and received by the Company, including in
each case details regarding the number of dissenting shares and the holders
thereof, and (ii) the right to participate in all negotiations and proceedings
with respect to any demands under the Dissenters Statute with respect to any
Company Common Stock. The Company shall cooperate with GSCP concerning, and
shall not, except with the prior written consent of GSCP, voluntarily make any
payment with respect to, or offer to settle or settle, any such demands.
Section 6.13 Filing Restated Articles of Incorporation and
Amendment. Even if the Company obtains Shareholder Approval for the Restated
Articles of Incorporation or the Amendment, as the case may be, the Company
shall not cause the Restated Articles of Incorporation and/or the Amendment to
be filed with the Secretary of State of Florida unless the Closing occurs. This
Section 6.13 shall survive any termination of this Agreement.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE ACQUISITION
Section 7.1 Conditions to Each Party's Obligation to Effect the
Acquisition. The respective obligations of each party to effect the Acquisition
shall be subject to the satisfaction, or written waiver by such party, at or
prior to the Closing of the following conditions:
(a) any waiting period applicable to the consummation of the
Acquisition under the HSR Act shall have expired or been terminated, and no
action shall have been instituted by the Department of Justice or Federal Trade
Commission challenging or seeking to enjoin the consummation of this
transaction, which action shall not have been withdrawn or terminated;
(b) no statute, rule, regulation, executive order, decree, ruling
or preliminary or permanent injunction shall have been enacted, entered,
promulgated or
enforced by any federal or state court or governmental authority having
jurisdiction which prohibits, restrains, enjoins or restricts consummation of
the Acquisition;
(c) each of the Company, the Company Subsidiaries and GSCP shall
have made such filings, and obtained such material permits, authorizations,
consents, or approvals, required by Governmental Requirements to consummate the
transactions contemplated hereby, and the appropriate forms shall have been
executed, filed and approved as required by the Governmental Requirements; and
(d) this Agreement, the Restated Articles of Incorporation, the
Acquisition and the other transactions contemplated hereby shall have been
adopted and approved by the requisite vote of the shareholders of the Company in
accordance with the applicable provisions of the FBCA (the "Requisite Vote"),
provided, however, that the obligations of the parties hereto shall not be
conditioned on the approval of the Amendment by the shareholders of the Company.
Section 7.2 Conditions to Obligation of the Company to Effect the
Acquisition. The obligation of the Company to effect the Acquisition shall be
subject to the satisfaction at or prior to the Closing of the following
additional condition:
Each of the GSCP Funds shall have performed in all material
respects their obligations under this Agreement required to be performed by them
at or prior to the Closing, including the obligations pursuant to Section 6.10
hereof; the representations and warranties of each of the GSCP Funds contained
in this Agreement which are qualified with respect to materiality shall be true
and correct in all respects, and such representations and warranties that are
not so qualified shall be true and correct in all material respects, in each
case as of the date of this Agreement and at and as of the Closing as if made at
and as of such time except as contemplated by the GSCP Disclosure Letter and
this Agreement; and the Company shall have received a certificate of the
Chairman of the Board, the President or the Chief Financial Officer of the
general partner of each of the GSCP Funds as to the satisfaction of this
condition.
Section 7.3 Conditions to Obligations of the GSCP Funds to Effect
the Acquisition. The obligations of the GSCP Funds to effect the Acquisition
shall be subject to the satisfaction at or prior to the Closing of the following
additional conditions:
(a) the Company shall have performed in all material respects its
obligations under this Agreement required to be performed by it at or prior to
the Closing; and the representations and warranties of the Company contained in
this Agreement which are qualified with respect to materiality shall be true and
correct in all respects, and such representations and warranties that are not so
qualified shall be true and correct in all material respects, in each case as of
the date of this Agreement and at and as of the Closing as if made at and as of
such time, except as contemplated by the Company
Disclosure Letter or this Agreement and except that representations and
warranties that are made as of a specific date shall have been true and correct
in all material respects as of such specified date; and GSCP shall have received
a certificate of the Chairman of the Board, the President or the Chief Financial
Officer of the Company as to the satisfaction of this condition;
(b) the GSCP Funds shall have received favorable opinions,
addressed to the GSCP Funds and dated as of the Closing, from each of Xxxxxx
Xxxxx Xxxxxxxx & Xxxxxxx LLP, special counsel to the Company, and special
Florida counsel to the Company satisfactory to the GSCP Funds, to the effect set
forth in Exhibit E and Exhibit F hereto, respectively, and otherwise
satisfactory in substance and form to the GSCP Funds.
(c) the Resigning Directors shall have delivered to the Company
an irrevocable resignation from such position, effective as of the Closing, and
the New Directors shall have been duly elected as directors of the Company;
(d) since the date of this Agreement, there shall not have
occurred or be continuing any event, condition or set of circumstances which,
individually or in the aggregate, has had or is reasonably likely to result in a
Company Material Adverse Effect;
(e) the third party consents listed on Schedule 7.3(e) hereto
shall have been obtained and all other third party consents shall have been
obtained other than consents the failure of which to be obtained would not
reasonably be expected to have a Company Material Adverse Effect;
(f) there shall not have been an exercise of dissenters' rights
by delivery of notice to the Company of an intent to demand payment for such
shares pursuant to the Dissenters Statute by holders of Company Common Stock
representing, in the aggregate, more than 10% of the Company Common Stock
outstanding;
(g) the Company shall have entered into employment agreements
with the employees identified on Schedule 7.3(g) hereto effective as of the
Closing, in form and substance satisfactory to GSCP; and
(h) each of the Amended and Restated Intercreditor Agreements
listed on Schedule 7.3(h) hereto shall remain in full force and effect and the
Standstill Period (as defined therein) shall not have terminated, and there
shall not have occurred any event which, after notice or passage of time or
both, would permit the termination of the Standstill Period thereunder.
ARTICLE VIII
TERMINATION
Section 8.1 Termination by Mutual Consent. This Agreement may be
terminated at any time prior to the Closing by mutual written agreement of GSCP
and the Company.
Section 8.2 Termination by Either GSCP or the Company. This
Agreement may be terminated and the Acquisition and the other transactions
contemplated hereby may be abandoned by action of either GSCP or the Board of
Directors of the Company if (a) (x) this Agreement, the Acquisition and the
other transaction contemplated hereby or (y) the Restated Articles of
Incorporation shall fail to receive the Requisite Vote for approval and adoption
by the shareholders of the Company at the Special Meeting, provided, however,
that the parties may not terminate this Agreement if the shareholders of the
Company fail to approve the Amendment, (b) the Acquisition shall not have been
consummated on or before June 30, 1999; provided, however, that this Agreement
may be extended (i) by the mutual written agreement of GSCP and the Company, or
(ii) by written notice of either GSCP or the Company to a date no later than
September 30, 1999, if the Acquisition shall not have been consummated as a
direct and principal result of the conditions in Sections 7.1(a) or 7.1(c) not
having been satisfied by such date, or (c) a United States federal or state
court of competent jurisdiction or United States federal or state governmental,
regulatory or administrative agency or commission shall have issued an order,
decree or ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and
non-appealable; provided, that the party seeking to terminate this Agreement
pursuant to clause (b) shall not be in material violation of any of its
representations, warranties or covenants set forth in this Agreement, and the
party seeking to terminate this Agreement pursuant to clause (c) shall have used
all reasonable efforts to remove such injunction, order or decree.
Section 8.3 Termination by the Company. This Agreement may be
terminated and the Acquisition and the other transactions contemplated hereby
may be abandoned at any time prior to the Closing, before or after the adoption
and approval of the Acquisition and this Agreement by the shareholders of the
Company referred to in Section 2.1, by action of the Board of Directors of the
Company, if prior to the Special Meeting, the Board of Directors of the Company
has withdrawn, or modified or changed in a manner adverse to GSCP its approval
or recommendation of this Agreement or the Acquisition in order to approve and
permit the Company to execute a definitive agreement relating to a Superior
Proposal; provided, however, that prior to any such withdrawal, modification,
change or termination, the Company shall, and shall cause its respective
financial and legal advisors to, negotiate in good faith with the GSCP Funds to
make such adjustments in the terms and conditions of this Agreement as would
enable the Company to proceed with the transactions contemplated herein on such
adjusted terms.
Section 8.4 Termination by GSCP. This Agreement may be terminated
and the Acquisition may be abandoned at any time prior to the Closing by action
of GSCP, if (a) there has been a breach by the Company or a Company Subsidiary
of any representation or warranty contained in this Agreement which would have
or would reasonably be likely to have a Company Material Adverse Effect and is
not cured, if curable within thirty (30) days after notice; (b) there has been a
material breach of any of the covenants or agreements set forth in this
Agreement on the part of the Company or a Company Subsidiary, which breach is
not curable or, if curable, is not cured within thirty (30) days after written
notice of such breach given by GSCP to the Company; or (c) the Board of
Directors of the Company shall have withdrawn, modified or changed in a manner
adverse to GSCP its approval or recommendation of this Agreement or the
Acquisition or shall have recommended a Takeover Proposal, or shall have
executed an agreement in principle (or similar agreement) or definitive
agreement providing for a Takeover Proposal or other business combination with a
person or entity other than GSCP.
Section 8.5 Effect of Termination and Abandonment. (a) In the
event of termination of this Agreement and the abandonment of the Acquisition
pursuant to this Article VIII, written notice thereof shall as promptly as
practicable be given to the other party to this Agreement and this Agreement
shall terminate and the transactions contem plated hereby shall be abandoned,
without further action by any of the parties hereto. If this Agreement is
terminated as provided herein: (i) there shall be no liability or obligation on
the part of the GSCP Funds, the Company or the Company Subsidiaries or their
respective officers and directors, and all obligations of the parties shall
terminate, except for the obligations of the parties pursuant to this Section
8.5, except for the provisions of Sections 3.7, 4.17, 6.4, 6.13, 9.4, 9.5, 9.6,
9.10, 9.11 and 9.12 and except that a party who is in material breach of its
representations, warranties, covenants or agreements set forth in this Agreement
shall be liable for damages occasioned by such breach, including without
limitation any expenses incurred by the other party in connection with this
Agreement and the transactions contemplated hereby, and (ii) all filings,
applications and other submissions made pursuant to the transactions
contemplated by this Agreement shall, to the extent practicable, be withdrawn
from the agency or person to which made.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Survival of Representations, Warranties and
Agreements. No representations, warranties, covenants or agreements in this
Agreement or in any instrument delivered pursuant to this Agreement, shall
survive beyond the Closing, other than those covenants and agreements which by
their express terms apply in whole or in part after the Closing.
Section 9.2 Notices. All notices, claims, demands and other
communi cations hereunder shall be in writing and shall be deemed given upon (a)
confirmation of receipt of a facsimile transmission, (b) confirmed delivery by a
standard overnight carrier or when delivered by hand or (c) the expiration of
five business days after the day when mailed by registered or certified mail
(postage prepaid, return receipt requested), addressed to the respective parties
at the following addresses (or such other address for a party as shall be
specified by like notice):
(a) If to the GSCP Funds, to:
Greenwich Street Capital Partners II, L.P.
x/x Xxxxxxxxx Xxxxxx Capital Partners Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxx
With copy to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxxx, Esq.
(b) If to the Company, to:
IMC Mortgage Company
0000 X. Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Attention: President
With copies to:
Xxxxxxxx X. Xxxxxx, Esq.
000X Xxxxxxxxx Xxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
-and-
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Section 9.3 Descriptive Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 9.4 Entire Agreement; Assignment. This Agreement
(including the Exhibits, the Schedules, the Company Disclosure Letter, the GSCP
Disclosure Letter and the other documents and instruments referred to herein)
constitutes the entire agree ment and supersedes all other prior agreements and
understandings, both written and oral, among the parties or any of them, with
respect to the subject matter hereof, including, without limitation, any
transaction between or among the parties hereto. This Agreement shall not be
assigned by operation of law or otherwise.
Section 9.5 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
giving effect to the provisions thereof relating to conflicts of law, except to
the extent that it is mandatorily governed by the laws of the State of Florida.
Section 9.6 Expenses. Except as provided in Section 8.5, whether
or not the Acquisition is consummated, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby and
thereby shall be paid by the Company.
Section 9.7 Amendment. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties hereto.
Section 9.8 Waiver. At any time prior to the Closing, the parties
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
Section 9.9 Counterparts; Effectiveness. This Agreement may be
executed in two or more counterparts, each of which shall be deemed to be an
original but all of which shall constitute one and the same agreement. This
Agreement shall become
effective when each party hereto shall have received counterparts hereof signed
by all of the other parties hereto.
Section 9.10 Severability; Validity; Parties in Interest. If any
provision of this Agreement, or the application thereof to any person or
circumstance, is held invalid or unenforceable, the remainder of this Agreement,
and the application of such provision to other persons or circumstances, shall
not be affected thereby, and to such end, the provisions of this Agreement are
agreed to be severable. Nothing in this Agreement, express or implied, is
intended to confer upon any person not a party to this Agreement any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
Section 9.11 Enforcement of Agreement. The parties hereto agree
that irreparable damage would occur in the event that any provision of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accord ingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of competent
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
Section 9.12 WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND
AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS
AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH
SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C)
EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 9.12.
IN WITNESS WHEREOF, each of GSCP, Offshore, GF, GSEF, TRV and the
Company has caused this Agreement to be executed as of the date first above
written.
GREENWICH STREET CAPITAL PARTNERS II, L.P.
GSCP OFFSHORE FUND, L.P.
GREENWICH FUND, L.P.
GREENWICH STREET EMPLOYEES FUND, L.P.
TRV EXECUTIVE FUND, L.P.
By: Greenwich Street Investments II, L.L.C., their General
Partner
By:
Name:
Title: Managing Member
IMC MORTGAGE COMPANY
By:
Name:
Title:
TABLE OF DEFINED TERMS
Acquisition ..............Recitals
Additional Advance ..............Recitals
Adjustment Event ...........Section 1.6
Affiliate ..........Section 4.26
Amendment ...........Section 1.4
Amendment and Restatement of the Loan Agreement ..............Recitals
Amendment No. 1 ..............Recitals
Authorizations .......Section 4.13(b)
Closing ...........Section 1.2
Class C Preferred Shares ..............Recitals
Class C Preferred Stock ..............Recitals
Closing Date ...........Section 1.2
Code ..............Recitals
Company ..............Preamble
Company Benefit Plan .......Section 4.18(a)
Company Commonly Controlled Entity .......Section 4.18(a)
Company Common Stock ..............Recitals
Company Contracts .......Section 4.22(a)
Company Disclosure Letter ............Article IV
Company Investments ..........Section 4.15
Company Material Adverse Effect ...........Section 4.1
Company Preferred Stock ...........Section 4.2
Company SAR's .......Section 4.18(e)
Company SEC Reports ...........Section 4.6
Company Stock Options ...........Section 4.2
Company Subsidiaries ........Section 4.3(b)
Contracts .......Section 4.22(a)
Control ..........Section 4.26
Dissenters Statute ..........Section 6.14
Encumbrance ...........Section 3.3
Environmental Laws .......Section 4.20(a)
ERISA .......Section 4.18(b)
Exchange Act ...........Section 2.2
FBCA ..............Recitals
GAAP ...........Section 4.6
GF ..............Preamble
Governmental Requirements ...........Section 3.3
Government Entity ...........Section 3.3
GSCP ..............Preamble
GSCP Disclosure Letter ...........Article III
GSC Funds ..............Preamble
GSC Material Adverse Effect ...........Section 3.1
GSEF ..............Preamble
HSR Act ...........Section 3.3
IMC Acquisitions ..............Recitals
Indemnified Parties ...........Section 6.6
Initial GSCP Funds ..............Preamble
Initial Loan Agreement ..............Recitals
Interim Commitments ..............Recitals
Interim Loans ..............Recitals
Liabilities ...........Section 4.9
Loan Agreement ..............Recitals
Merger ..............Recitals
Mortgage Servicing Agreements .......Section 4.22(a)
Mortgage Loan ........Section 5.1(o)
New Directors ...........Section 1.5
Offshore ..............Preamble
Person .......Section 3.10(b)
Proxy Statement ...........Section 2.2
Requisite Vote ........Section 7.1(d)
Resigning Directors ...........Section 1.5
Restated Articles of Incorporation ...........Section 1.4
Restated Bylaws ...........Section 1.4
SEC ...........Section 2.2
Securities Act ...........Section 2.2
Shareholder Approval ...........Section 2.1
Special Committee ..............Recitals
Special Meeting ...........Section 2.1
Superior Proposal ........Section 6.2(e)
Takeover Proposal ........Section 6.2(e)
Taxes .......Section 4.11(g)
Tax Returns .......Section 4.11(g)
TRV .............Preamble
