Exhibit 10.28
SIXTH AMENDMENT TO
FIRST AMENDED AND RESTATED
WAREHOUSING CREDIT AND SECURITY AGREEMENT
SIXTH AMENDMENT TO FIRST AMENDED AND RESTATED WAREHOUSING CREDIT AND SECURITY
AGREEMENT (this "Amendment") dated as of June 1, 2004, among Oak Street Mortgage
LLC, a Delaware limited liability company ("Oak Street LLC"), OAK STREET
MORTGAGE OF TENNESSEE LLC, a Tennessee limited liability company ("Oak Street of
TN"), OAK STREET MORTGAGE, INC., a Delaware corporation ("Oak Street Inc.") (Oak
Street LLC, Oak Street of TN and Oak Street Inc. are collectively referred to as
the "Borrower") and RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
("Lender").
A. Borrower and Lender have entered into a revolving mortgage warehousing
facility with a present Warehousing Commitment Amount of $200,000,000,
which is evidenced by a First Amended and Restated Warehousing
Promissory Note and a Sublimit Promissory Note, each dated August 31,
2002 (the "Notes"), and by a First Amended and Restated Warehousing
Credit and Security Agreement dated as of August 31, 2002 (as the same
may have been and may be amended or supplemented, the "Agreement").
B. Borrower has requested that Lender temporarily increase the Warehousing
Commitment Amount and amend certain terms of the Agreement, and Lender
has agreed to the temporary increase and amendments, subject to the
terms and conditions of this Amendment.
NOW, THEREFORE, the parties to this Amendment agree as follows:
1. Subject to Borrower's satisfaction of the conditions set forth in
Section 10, the effective date of this Amendment is May 1, 2004, except
that the effective date of the temporary increase is May 26, 2004
("Effective Date").
2. Unless otherwise defined in this Amendment, all capitalized terms have
the meanings given to those terms in the Agreement. Defined terms may
be used in the singular or the plural, as the context requires. The
words "include," "includes" and "including" are deemed to be followed
by the phrase "without limitation." Unless the context in which it is
used otherwise clearly requires, the word "or" has the inclusive
meaning represented by the phrase "and/or." References to Sections and
Exhibits are to Sections and Exhibits of this Amendment unless
otherwise expressly provided.
3. Article 7 of the Agreement is amended and restated in its entirety as
set forth in Article 7 attached to this Amendment. All references in
the Agreement and other Loan Documents to Article 7 (including each and
every Section in Article 7) are deemed to refer to the new Article 7.
4. Article 8 of the Agreement is amended and restated in its entirety as
set forth in Article 8 attached to this Amendment. All references in
the Agreement and other Loan Documents to Article 8 (including each and
every Section in Article 8) are deemed to refer to the new Article 8.
5. Article 10 of the Agreement is amended and restated in its entirety as
set forth in Article 10 attached to this Amendment. All references in
the Agreement and other Loan Documents to Article 10 (including each
and every Section in Article 10) are deemed to refer to the new Article
10.
6. Article 12 of the Agreement is amended and restated in its entirety as
set forth in Article 12 attached to this Amendment. All references in
the Agreement and other Loan Documents to Article 12 (including each
and every Section in Article 12) are deemed to refer to the new Article
12.
7. Exhibit E to the Agreement is amended and restated in its entirety as
set forth in Exhibit E to this Amendment. All references in the
Agreement and the other Loan Documents to Exhibit E are deemed to refer
to the new Exhibit E.
8. Exhibit H to the Agreement is amended and restated in its entirety as
set forth in Exhibit H to this Amendment. All references in the
Agreement and the other Loan Documents to Exhibit H are deemed to refer
to the new Exhibit H.
9. A new Exhibit K is added to the Agreement to read in its entirety as
set forth in Exhibit K to this Amendment. All references in the
Agreement and the other Loan Documents to Exhibit K are deemed to refer
to the new Exhibit K.
10. Borrower must deliver to Lender (a) two executed copies of this
Amendment and (b) a $350 document production fee.
11. Borrower represents, warrants and agrees that (a) there exists no
Default or Event of Default under the Loan Documents, (b) the Loan
Documents continue to be the legal, valid and binding agreements and
obligations of Borrower, enforceable in accordance with their terms, as
modified by this Amendment, (c) Lender is not in default under any of
the Loan Documents and Borrower has no offset or defense to its
performance or obligations under any of the Loan Documents, (d) except
for changes permitted by the terms of the Agreement, Borrower's
representations and warranties contained in the Loan Documents are
true, accurate and complete in all respects as of the Effective Date
and (e) there has been no material adverse change in Borrower's
financial condition from the date of the Agreement to the Effective
Date.
12. Except as expressly modified, the Agreement is unchanged and remains in
full force and effect, and Borrower ratifies and reaffirms all of its
obligations under the Agreement and the other Loan Documents.
13. This Amendment may be executed in any number of counterparts, each of
which will be deemed an original, but all of which shall together
constitute but one and the same instrument.
[END OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Borrower and Lender have caused this Amendment to be duly
executed on their behalf by their duly authorized officers as of the day and
year above written.
OAK STREET MORTGAGE LLC,
a Delaware limited liability company
By: /s/ Xxxxx Royal
Its: Chief Financial Officer
OAK STREET MORTGAGE OF TENNESSEE
LLC,
a Tennessee limited liability company
By: /s/ Xxxxx Royal
Its: Chief Financial Officer
OAK STREET MORTGAGE, INC.,
a Delaware corporation
By: /s/ Xxxxx Royal
Its: Chief Financial Officer
Closing Date: June 11, 2004 RESIDENTIAL FUNDING CORPORATION,
(to be completed by Lender) a Delaware corporation
By: /s/ Xxxxx X. Wesl
Its: Managing Director
7. AFFIRMATIVE COVENANTS
As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed under this Agreement or under any other Loan
Document, Borrower must:
7.1. PAYMENT OF OBLIGATIONS
Punctually pay or cause to be paid all Obligations, including the Obligations
payable under this Agreement and under the Warehousing Note and the Sublimit
Note, in accordance with their terms.
7.2. FINANCIAL STATEMENTS
Deliver to Lender:
7.2 (a) As soon as available and in any event within 30 days after the end
of each month, including the last month of Oak Street LLC's fiscal
year, an interim statement of income of Oak Street LLC (and, Oak Street
LLC's Subsidiaries, on a consolidated basis) for the immediately
preceding month and for the period from the beginning of the fiscal
year to the end of that month, and the related balance sheet as at the
end of the immediately preceding month, all in reasonable detail,
subject, however, to year-end audit adjustments.
7.2 (b) As soon as available and in any event within 90 days after the end
of each fiscal year of Oak Street LLC, fiscal year-end statements of
income, changes in Equity Interests and cash flow of Oak Street LLC
(and, Oak Street LLC's Subsidiaries, on a consolidated basis) and of
Borrower (on a consolidating basis) for that year, and the related
balance sheet as of the end of that year (setting forth in comparative
form the corresponding figures for the preceding fiscal year), all in
reasonable detail and accompanied by (1) an opinion as to those
financial statements in form and prepared by independent certified
public accountants of recognized standing acceptable to Lender and (2)
any management letters, management reports or other supplementary
comments or reports delivered by those accountants to Oak Street LLC or
Borrower, as applicable, or its respective management committee or
board of directors.
7.2 (c) Together with each delivery of financial statements required by
this Section, a Compliance Certificate substantially in the form of
Exhibit E.
7.2 (d) As soon as available and in all events within 30 days after the
beginning of each fiscal year of the Borrower, financial projections of
Borrower for such fiscal year consisting of projected income and cash
flow statements for each month during such fiscal year, projected
balance sheets as of the end of each month during such fiscal year, and
projected Mortgage Loan origination and sale reports for each month
during such fiscal year, all in reasonable detail and otherwise
reasonably acceptable to the Lender.
7.2 (e) Copies of all regular or periodic financial and other reports that
Borrower files with the Securities and Exchange Commission or any
successor governmental agency or other entity.
7.3. OTHER BORROWER REPORTS
Deliver to Lender:
7.3 (a) As soon as available and in any event within 30 days after the end
of each month, a consolidated loan production report as of the end of
that month, presenting the total dollar volume and the number of
Mortgage Loans originated and closed or purchased during that month and
for the fiscal year-to-date, specified by property type and loan type.
7.3 (b) As soon as available and in any event within 30 days after the end
of each month, a report ("Forward Commitment Report") as of the end of
that month, detailing the original amount of the commitment, the date
executed, the amount outstanding on the commitment and the amount of
the commitment used.
7.3 (c) As soon as available and in any event within 30 days after the end
of each Calendar Quarter, a report detailing all of the lines of credit
and other loan obligations of Borrower and Borrower's Subsidiaries and
any joint ventures.
7.3 (d) As soon as available and in any event within 30 days after the end
of each month, a report detailing all requests the Borrower repurchase
Pledged Assets from an Investor or out of an Eligible Mortgage Pool,
the status of each such request, and any indemnification or similar
agreement entered into by Borrower in connection with any such request.
7.3 (e) As soon as available and in any event within 30 days after the end
of each month, a report as of the end of that month, detailing all
investments in Affiliates, advances to and receivables from Affiliates
and amounts owed to Affiliates by Borrower.
7.3 (f) Other reports in respect of Pledged Assets, including copies of
purchase confirmations issued by Investors purchasing Pledged Loans
from Borrower, in such detail and at such times as Lender in its
discretion may reasonably request.
7.3 (g) With reasonable promptness, all further information regarding the
business, operations, properties or financial condition of Borrower as
Lender may reasonably request, including copies of any audits completed
by HUD, Xxxxxx Xxx, Xxxxxx Xxx or Xxxxxxx Mac.
7.4. MAINTENANCE OF EXISTENCE; CONDUCT OF BUSINESS
Preserve and maintain its existence as a limited liability company in good
standing and all of its rights, privileges, licenses and franchises necessary or
desirable in the normal conduct of its business, including its eligibility as
lender, seller/servicer and issuer described under Section 9.1; conduct its
business in an orderly and efficient manner; maintain a net worth of acceptable
assets as required for maintaining Borrower's eligibility as lender,
seller/servicer and issuer described under Section 9.1; and make no material
change in the nature or character of its business or engage in any business in
which it was not engaged on the date of this Agreement.
7.5. COMPLIANCE WITH APPLICABLE LAWS
Comply with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority, a breach of which could result in a
material adverse change in Borrower's business, operations, assets, or financial
condition as a whole or on the enforceability of this Agreement, the Warehousing
Note, the Sublimit Note, any other Loan Document or any Collateral, except where
contested in good faith and by appropriate proceedings.
7.6. INSPECTION OF PROPERTIES AND BOOKS; OPERATIONAL REVIEWS
Permit Lender or any Participant (and their authorized representatives) to
discuss the business, operations, assets and financial condition of Borrower and
its Subsidiaries with Borrower's managers and other management officials, agents
and employees, and to examine and make copies or extracts of Borrower's and its
Subsidiaries' books of account, all at such reasonable times as Lender or any
Participant may request. Provide its accountants with a copy of this Agreement
promptly after its execution and authorize and instruct them to answer candidly
all questions that the officers of Lender or any Participant or any authorized
representatives of Lender or any Participant may address to them in reference to
the financial condition or affairs of Borrower and its Subsidiaries. Borrower
may have its representatives in attendance at any meetings held between the
officers or other representatives of Lender or any Participant and Borrower's
accountants under this authorization. Permit Lender or any Participant (and
their authorized representatives) access to Borrower's premises and records for
the purpose of conducting a review of Borrower's general mortgage business
methods, policies and procedures, auditing its loan files and reviewing the
financial and operational aspects of Borrower's business.
7.7. NOTICE
Give prompt Notice to Lender of (a) any action, suit or proceeding instituted by
or against Borrower or any of its Subsidiaries in any federal or state court or
before any commission or other regulatory body (federal, state or local,
domestic or foreign), which action, suit or proceeding has at issue in excess of
$250,000, or any such proceedings threatened against Borrower or any of its
Subsidiaries in a writing containing the details of that action, suit or
proceeding; (b) the filing, recording or assessment of any federal, state or
local tax Lien against Borrower, or any of its assets or any of its
Subsidiaries; (c) an Event of Default; (d) a Default that continues for more
than 4 days; (e) the suspension, revocation or termination of Borrower's
eligibility, in any respect, as lender, seller/servicer or issuer as described
under Section 9.1; (f) the transfer, loss, nonrenewal or termination of any
Servicing Contracts to which Borrower is a party, or which is held for the
benefit of Borrower, and the reason for that transfer, loss, nonrenewal or
termination; (g) any Prohibited Transaction with respect to any Plan, specifying
the nature of the Prohibited Transaction and what action Borrower proposes to
take with respect to it; and (h) any other action, event or condition of any
nature that could lead to or result in a material adverse change in the
business, operations, assets or financial condition of Borrower or any of its
Subsidiaries.
7.8. PAYMENT OF DEBT, TAXES AND OTHER OBLIGATIONS
Pay, perform and discharge, or cause to be paid, performed and discharged, all
of the obligations and indebtedness of Borrower and its Subsidiaries, all taxes,
assessments and governmental charges or levies imposed upon Borrower or its
Subsidiaries or upon their respective income, receipts or properties before
those taxes, assessments and governmental charges or levies become past due, and
all lawful claims for labor, materials and supplies or otherwise that, if
unpaid, could become a Lien or charge upon any of their respective properties or
assets. Borrower and its Subsidiaries are not required to pay, however, any
taxes, assessments and governmental charges or levies or claims for labor,
materials or supplies for which Borrower or its Subsidiaries have obtained an
adequate bond or insurance or that are being contested in good faith and by
proper proceedings that are being reasonably and diligently pursued and for
which proper reserves have been created.
7.9. INSURANCE
Maintain blanket bond coverage and errors and omissions insurance or mortgage
impairment insurance, with such companies and in such amounts as satisfy
prevailing requirements applicable to a lender, seller/servicer and issuer
described under Section 9.1, and liability insurance and fire and other hazard
insurance on its properties, in each case with responsible
insurance companies acceptable to Lender, in such amounts and against such risks
as is customarily carried by similar businesses operating in the same location.
Within 30 days after Notice from Lender, obtain such additional insurance as
Lender may reasonably require, all at the sole expense of Borrower. Copies of
such policies must be furnished to Lender without charge upon request of Lender.
7.10. CLOSING INSTRUCTIONS
Indemnify and hold Lender harmless from and against any loss, including
reasonable attorneys' fees and costs, attributable to the failure of any title
insurance company, agent or attorney to comply with Borrower's disbursement or
instruction letter relating to any Mortgage Loan. Lender has the right to
pre-approve Borrower's choice of title insurance company, agent or attorney and
Borrower's disbursement or instruction letter to them in any case in which
Borrower intends to obtain a Warehousing Advance against the Mortgage Loan to be
created at settlement or to pledge that Mortgage Loan as Collateral under this
Agreement. In any event, Borrower's disbursement or instruction letter must
include the following language:
Residential Funding Corporation has a security interest in any
amounts advanced by it to fund this mortgage loan and in the mortgage
loan funded with those amounts. You must promptly return any amounts
advanced by Residential Funding Corporation and not used to fund this
mortgage loan. You also must immediately return all amounts advanced
by Residential Funding Corporation if this mortgage loan does not
close and fund within 1 Business Day of your receipt of those funds.
7.11. SUBORDINATION OF CERTAIN INDEBTEDNESS
Cause any indebtedness of Borrower to any member, manager or Affiliate or any
shareholder, director or officer of any manager, member or Affiliate of
Borrower, which indebtedness has a term of more than 1 year or is in excess of
$25,000, to be subordinated to the Obligations by the execution and delivery to
Lender of a Subordination of Debt Agreement, on the form prescribed by Lender,
certified by the corporate secretary of Borrower to be true and complete and in
full force and effect.
7.12. OTHER LOAN OBLIGATIONS
Perform all material obligations under the terms of each loan agreement, note,
mortgage, security agreement or debt instrument by which Borrower is bound or to
which any of its property is subject, and promptly notify Lender in writing of a
declared default under or the termination, cancellation, reduction or nonrenewal
of any of its other lines of credit or agreements with any other lender. Exhibit
F is a true and complete list of all such lines of credit or agreements as of
the date of this Agreement. Borrower must give Lender at least 30 days Notice
before entering into any additional lines of credit or agreements. Notices to
Lender are for informational purposes only and Lender will not have the right to
approve any current or future lines of credit or agreements.
7.13. ERISA
Maintain (and, if applicable, cause each ERISA Affiliate to maintain) each Plan
in compliance with all material applicable requirements of ERISA and of the
Internal Revenue Code and with all applicable rulings and regulations issued
under the provisions of ERISA and of the Internal Revenue Code, and not (and, if
applicable, not permit any ERISA Affiliate to), (a) engage in any transaction in
connection with which Borrower or any ERISA Affiliate would be subject to either
a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by
Section 4975 of the Internal Revenue Code, in either case in an amount exceeding
$25,000 or (b) fail to make full payment when due of all amounts that, under the
provisions of any Plan, Borrower or any ERISA
Affiliate is required to pay as contributions to that Plan, or permit to exist
any accumulated funding deficiency (as such term is defined in Section 302 of
ERISA and Section 412 of the Internal Revenue Code), whether or not waived, with
respect to any Plan in an aggregate amount exceeding $25,000.
7.14. USE OF PROCEEDS OF WAREHOUSING ADVANCES
Use the proceeds of each Warehousing Advance solely for the purpose of funding
Eligible Loans or REO Properties and against the pledge of those Eligible Loans
and REO Properties as Collateral.
END OF ARTICLE 7
8. NEGATIVE COVENANTS
As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed, Borrower must not, either directly or
indirectly, without the prior written consent of Lender:
8.1. CONTINGENT LIABILITIES
Assume, guarantee, endorse or otherwise become contingently liable for the
obligation of any Person except by endorsement of negotiable instruments for
deposit or collection in the ordinary course of business, except for obligations
arising in connection with the sale of Mortgage Loans with recourse in the
ordinary course of Borrower's business, and except for a limited guaranty of
$2,500,000 given by Oak Street LLC to Bank One in connection with Bank One
providing a $15,000,000 line of credit to Oak Street Funding LLC.
8.2. PLEDGE OF SERVICING CONTRACTS
Pledge or grant a security interest in any existing or future Servicing
Contracts of Borrower other than to Lender or omit to take any action required
to keep all of Borrower's Servicing Contracts in full force and effect.
8.3. RESTRICTIONS ON FUNDAMENTAL CHANGES
8.3 (a) Consolidate, merge or enter into any analogous reorganization or
transaction with any Person.
8.3 (b) Amend or otherwise modify Borrower's articles of organization or
operating agreement in any way which will have an adverse impact on
Lender.
8.3 (c) Liquidate, wind up or dissolve (or suffer any liquidation or
dissolution).
8.3 (d) Cease actively to engage in the business of originating or
acquiring Mortgage Loans or make any other material change in the
nature or scope of the business in which Borrower engages as of the
date of this Agreement.
8.3 (e) Sell, assign, lease, convey, transfer or otherwise dispose of
(whether in one transaction or a series of transactions) all or any
substantial part of Borrower's business or assets, whether now owned or
acquired after the Closing Date, other than, in the ordinary course of
business and to the extent not otherwise prohibited by this Agreement,
sales of (1) Mortgage Loans, (2) Mortgage-backed Securities and (3)
Servicing Contracts.
8.3 (f) Acquire by purchase or in any other transaction all or
substantially all of the business or property of, or stock or other
ownership interests of, any Person; provided, however, Borrower may
purchase all or substantially all of the business or property of a
Person whose primary business is directly related to mortgage banking
if (1) the purchase price is no greater than $500,000, (2) the business
or property is consolidated into the Borrower, and (3) Borrower gives
at least five 5 Business Days advance written Notice of such purchase.
8.3 (g) Permit any Subsidiary of Borrower to do or take any of the
foregoing actions.
8.4. SUBSIDIARIES
Form or acquire, or permit any Subsidiary of Borrower to form or acquire, any
Person that would thereby become a Subsidiary.
8.5. DEFERRAL OF SUBORDINATED DEBT
Pay any Subordinated Debt of Borrower in advance of its stated maturity or,
after a Default or Event of Default under this Agreement has occurred, make any
payment of any kind on any Subordinated Debt of Borrower until all of the
Obligations have been paid and performed in full and any applicable preference
period has expired.
8.6. LOSS OF ELIGIBILITY
Take any action that would cause Borrower to lose all or any part of its status
as an eligible lender, seller/servicer or issuer as described under Section 9.1.
8.7. ACCOUNTING CHANGES
Make, or permit any Subsidiary of Borrower to make, any significant change in
accounting treatment or reporting practices, except as required by GAAP, or
change its fiscal year or the fiscal year of any Subsidiary of Borrower.
8.8. LEVERAGE RATIO
Permit Oak Street LLC's Leverage Ratio at any time to exceed 20 to 1.
8.9. MINIMUM TANGIBLE NET WORTH
Permit Oak Street LLC's Tangible Net Worth at any time to be less than (a) from
May 1, 2004 through June 30, 2004, $11,000,000; (b) from July 1, 2004 through
September 30, 2004, $13,000,000; and (c) on and after October 1, 2004,
$15,000,000.
8.10. CURRENT RATIO
Permit Oak Street LLC's Current Ratio at any time to be less than 1.03 to 1.
8.11. LIQUID ASSETS
Permit Oak Street LLC's Liquid Assets at any time to be less than $5,000,000.
8.12. NET INCOME/LOSS
Permit Oak Street LLC's monthly net income to be less than zero for three
consecutive months on a consolidated basis.
8.13. TRANSACTIONS WITH AFFILIATES
Directly or indirectly (a) make any loan, advance, extension of credit or
capital contribution to any of Borrowers' Affiliates, except Oak Street LLC may
(i) loan H&K Collections, LLC $1,000,000 to fund the initial start up of the
joint venture, (ii) contribute $2,500,000 to Oak Street Funding LLC to initially
capitalize this entity, and (iii) contribute $700,000 to initially capitalize
H&K Collections, LLC, (b) sell, transfer, pledge or assign any of its assets to
or on behalf of those Affiliates,
(c) merge or consolidate with or purchase or acquire assets from those
Affiliates, or (d) pay management fees to or on behalf of those Affiliates.
8.14. RECOURSE SERVICING CONTRACTS
Acquire or enter into Servicing Contracts under which Borrower must repurchase
or indemnify the holder of the Mortgage Loans as a result of defaults on the
Mortgage Loans at any time during the term of those Mortgage Loans.
8.15. GESTATION AGREEMENTS
Directly or indirectly sell or finance a Mortgage Loan under any Gestation
Agreement if the Mortgage Loan is or was previously pledged to Lender as
Collateral under this Agreement if the aggregate amount of Warehousing Advances
outstanding is less than 60% of the Warehousing Commitment Amount.
END OF ARTICLE 8
10. DEFAULTS; REMEDIES
10.1. EVENTS OF DEFAULT
The occurrence of any of the following is an event of default ("Event of
Default"):
10.1 (a) Borrower fails to pay the principal of any Warehousing Advance when
due, whether at stated maturity, by acceleration, or otherwise; or
fails to pay any installment of interest on any Warehousing Advance
within 9 days after the date of Lender's invoice or, if applicable,
within 2 days after the date of Lender's account analysis statement; or
fails to pay, within any applicable grace period, any other amount due
under this Agreement or any other Obligation of Borrower to Lender.
10.1 (b) Borrower or any of its Subsidiaries fails to pay, or defaults in
the payment of any principal or interest on, any other indebtedness or
any contingent obligation within any applicable grace period; breaches
or defaults with respect to any other material term of any other
indebtedness or of any loan agreement, mortgage, indenture or other
agreement relating to that indebtedness, if the effect of that breach
or default is to cause, or to permit the holder or holders of that
indebtedness (or a trustee on behalf of such holder or holders) to
cause, indebtedness of Borrower or its Subsidiaries in the aggregate
amount of $50,000 or more to become or be declared due before its
stated maturity (upon the giving or receiving of notice, lapse of time,
both, or otherwise).
10.1 (c) Borrower fails to perform or comply with any term or condition
applicable to it contained in Sections 7.4 or 7.14 or in any Section of
Article 8.
10.1 (d) Any representation or warranty made or deemed made by Borrower
under this Agreement, in any other Loan Document or in any written
statement or certificate at any time given by Borrower is inaccurate or
incomplete in any material respect on the date as of which it is made
or deemed made.
10.1 (e) Borrower defaults in the performance of or compliance with any term
contained in this Agreement or any other Loan Document other than those
referred to in Sections 10.1(a), 10.1 (c) or 10.1 (d) and such default
has not been remedied or waived within 5 days with respect to Section
7.2 of this Agreement or within 30 days with respect to any other term
of this Agreement after the earliest of (1) receipt by Borrower of
Notice from Lender of that default, (2) receipt by Lender of Notice
from Borrower of that default or (3) the date Borrower should have
notified Lender of that default under Section 7.7(c) or 7.7(d).
10.1 (f) An "event of default" (however defined) occurs under any agreement
between Borrower and Lender other than this Agreement and the other
Loan Documents.
10.1 (g) A case (whether voluntary or involuntary) is filed by or against
Borrower or Oak Street Operations, LLC or any Subsidiary of Borrower or
Oak Street Operations, LLC under any applicable bankruptcy, insolvency
or other similar federal or state law; or a court of competent
jurisdiction appoints a receiver (interim or permanent), liquidator,
sequestrator, trustee, custodian or other officer having similar powers
over Borrower or Oak Street Operations, LLC or any Subsidiary of
Borrower or Oak Street Operations, LLC, or over all or a substantial
part of their respective properties or assets; or Borrower or Oak
Street Operations, LLC or any Subsidiary of Borrower or Oak Street
Operations, LLC (1) consents to the appointment of or possession by a
receiver (interim or permanent), liquidator, sequestrator, trustee,
custodian or other officer having similar powers over Borrower or Oak
Street Operations, LLC or any Subsidiary of Borrower or Oak Street
Operations, LLC, or over all or a substantial part of their respective
properties or assets, (2) makes an assignment for the benefit of
creditors, or (3) fails, or admits in writing its inability, to pay its
debts as those debts become due.
10.1 (h) Borrower fails to perform any contractual obligation to repurchase
Mortgage Loans, if such obligations in the aggregate exceed $500,000.
10.1 (i) Any money judgment, writ or warrant of attachment or similar
process involving in an amount in excess of $250,000 is entered or
filed against Borrower or any of its Subsidiaries or any of their
respective assets and remains undischarged, unvacated, unbonded or
unstayed for a period of 30 days or 5 days before the date of any
proposed sale under that money judgment, writ or warrant of attachment
or similar process.
10.1 (j) Any order, judgment or decree decreeing the dissolution of Borrower
is entered and remains undischarged or unstayed for a period of 20
days.
10.1 (k) Borrower purports to disavow the Obligations or contests the validity
or enforceability of any Loan Document.
10.1 (l) Lender's security interest on any portion of the Collateral becomes
unenforceable or otherwise impaired.
10.1 (m) A material adverse change occurs in Borrower's financial condition,
business, properties, operations or prospects, or in Borrower's ability
to repay the Obligations.
10.1 (n) Any Lien for any taxes, assessments or other governmental charges
(1) is filed against Borrower or any of its property, or is otherwise
enforced against Borrower or any of its property, or (2) obtains
priority that is equal to greater than the priority of Lender's
security interest in any of the Collateral.
10.1 (o) Xxxxxx Xxxxxx ceases to be the Chief Executive Officer of Oak
Street LLC unless a substitute reasonably acceptable to Lender has been
elected within 90 days thereafter; or
10.1 (p) Xxxxxx Xxxxxx ceases to be the Managing Member of Oak Street LLC
unless a substitute reasonably acceptable to Lender has been elected
within 90 days thereafter; or
10.1 (q) Xxxxx Royal ceases to be the Chief Financial Officer of Oak Street
LLC unless a substitute reasonably acceptable to Lender has been
elected within 90 days thereafter; or
10.1 (r) Xxxx X. Xxxxxx, Xxxxx Xxxxxx Xxxxxxxx, a Xxxxxx family trust,
Xxxxxx Xxxxxx and the Sotseks Corp. or any heirs of the foregoing who
are individuals, collectively, cease to own, directly or indirectly, a
majority of the Equity Interests of Oak Street Operations, LLC; or
10.1 (s) Oak Street Operations, LLC ceases to own, directly or indirectly,
all of the Equity Interests of Oak Street LLC.
10.2. REMEDIES
10.2 (a) If an Event of Default described in Section 10.1 (g) occurs with
respect to Borrower, the Warehousing Commitment will automatically
terminate and the unpaid principal amount of and accrued interest on
the Warehousing Note, the Sublimit Note and all other Obligations will
automatically become due and payable, without presentment, demand or
other Notice or requirements of any kind, all of which Borrower
expressly waives.
10.2 (b) If any other Event of Default occurs, Lender may, by Notice to
Borrower, terminate the Warehousing Commitment and declare the
Obligations to be immediately due and payable.
10.2 (c) If any Event of Default occurs, Lender may also take any of the
following actions:
(1) Foreclose upon or otherwise enforce its security interest in
any Lien on the Collateral to secure all payments and
performance of the Obligations in any manner permitted by law
or provided for in the Loan Documents.
(2) Notify all obligors under any of the Collateral that the
Collateral has been assigned to Lender (or to another Person
designated by Lender) and that all payments on that Collateral
are to be made directly to Lender (or such other Person);
settle, compromise or release, in whole or in part, any
amounts any obligor or Investor owes on any of the Collateral
on terms acceptable to Lender; enforce payment and prosecute
any action or proceeding involving any of the Collateral; and
where any Collateral is in default, foreclose on and enforce
any Liens securing that Collateral in any manner permitted by
law and sell any property acquired as a result of those
enforcement actions.
(3) Prepare and submit for filing Uniform Commercial Code
amendment statements evidencing the assignment to Lender or
its designee of any Uniform Commercial Code financing
statement filed in connection with any item of Collateral.
(4) Act, or contract with a third party to act, at Borrower's
expense, as servicer or subservicer of Collateral requiring
servicing, and perform all obligations required under any
Collateral, including Servicing Contracts and Purchase
Commitments.
(5) Require Borrower to assemble and make available to Lender the
Collateral and all related books and records at a place
designated by Lender.
(6) Enter onto property where any Collateral or related books and
records are located and take possession of those items with or
without judicial process; and obtain access to Borrower's data
processing equipment, computer hardware and software relating
to the Collateral and use all of the foregoing and the
information contained in the foregoing in any manner Lender
deems necessary for the purpose of effectuating its rights
under this Agreement and any other Loan Document.
(7) Before the disposition of the Collateral, prepare it for
disposition in any manner and to the extent Lender deems
appropriate.
(8) Exercise all rights and remedies of a secured creditor under
the Uniform Commercial Code of Minnesota or other applicable
law, including selling or otherwise disposing of all or any
portion of the Collateral at one or more public or private
sales, whether or not the Collateral is present at the place
of sale, for cash or credit or future delivery, on terms and
conditions and in the manner as Lender may determine,
including sale under any applicable Purchase Commitment.
Borrower waives any right it may have to prior notice of the
sale of all or any portion of the Collateral to the extent
allowed by applicable law. If notice is required under
applicable law, Lender will give Borrower not less than 10
days' notice of any public sale or of the date after which any
private sale may be held. Borrower agrees that 10 days' notice
is reasonable notice. Lender may, without notice or
publication, adjourn any public or private sale one or more
times by announcement at the time and place fixed for the
sale, and the sale may be
held at any time or place announced at the adjournment. In the
case of a sale of all or any portion of the Collateral on
credit or for future delivery, the Collateral sold on those
terms may be retained by Lender until the purchaser pays the
selling price or takes possession of the Collateral. Lender
has no liability to Borrower if a purchaser fails to pay for
or take possession of Collateral sold on those terms, and in
the case of any such failure, Lender may sell the Collateral
again upon notice complying with this Section.
(9) Instead of or in conjunction with exercising the power of sale
authorized by Section (8), Lender may proceed by suit at law
or in equity to collect all amounts due on the Collateral, or
to foreclose Lender's Lien on and sell all or any portion of
the Collateral pursuant to a judgment or decree of a court of
competent jurisdiction.
(10) Proceed against Borrower on the Warehousing Note and the
Sublimit Note.
(11) Retain all excess proceeds from the sale or other disposition
of the Collateral, and apply them to the payment of the
Obligations under Section 10.3.
10.2 (d) Lender will incur no liability as a result of the commercially
reasonable sale or other disposition of all or any portion of the
Collateral at any public or private sale or other disposition. Borrower
waives (to the extent permitted by law) any claims it may have against
Lender arising by reason of the fact that the price at which the
Collateral may have been sold at a private sale was less than the price
that Lender might have obtained at a public sale, or was less than the
aggregate amount of the outstanding Warehousing Advances, accrued and
unpaid interest on those Warehousing Advances, and unpaid fees, even if
Lender accepts the first offer received and does not offer the
Collateral to more than one offeree. Borrower agrees that any sale of
Collateral under the terms of a Purchase Commitment, or any other
disposition of Collateral arranged by Borrower, whether before or after
the occurrence of an Event of Default, will be deemed to have been made
in a commercially reasonable manner.
10.2 (e) Borrower acknowledges that Mortgage Loans are collateral of a type
that is the subject of widely distributed standard price quotations and
that Mortgage-backed Securities are collateral of a type that is
customarily sold on a recognized market. Borrower waives any right it
may have to prior notice of the sale of Pledged Securities, and agrees
that Lender may purchase Pledged Loans and Pledged Securities at a
private sale of such Collateral.
10.2 (f) Borrower specifically waives and releases (to the extent permitted
by law) any equity or right of redemption, stay or appraisal that
Borrower has or may have under any rule of law or statute now existing
or adopted after the date of this Agreement, and any right to require
Lender to (1) proceed against any Person, (2) proceed against or
exhaust any of the Collateral or pursue its rights and remedies against
the Collateral in any particular order, or (3) pursue any other remedy
within its power. Lender is not required to take any action to preserve
any rights of Borrower against holders of mortgages having priority to
the Lien of any Mortgage or Security Agreement included in the
Collateral or to preserve Borrower's rights against other prior
parties.
10.2 (g) Lender may, but is not obligated to, advance any sums or do any act
or thing necessary to uphold or enforce the Lien and priority of, or
the security intended to be afforded by, any Mortgage or Security
Agreement included in the Collateral, including payment of delinquent
taxes or assessments and insurance premiums. All advances, charges,
costs and expenses, including reasonable attorneys' fees and
disbursements, incurred or paid by Lender in exercising any right,
power or remedy conferred by this Agreement, or in the enforcement of
this Agreement, together with interest on those amounts at the
Default Rate, from the time paid by Lender until repaid by Borrower,
are deemed to be principal outstanding under this Agreement, the
Warehousing Note and the Sublimit Note.
10.2 (h) No failure or delay on the part of Lender to exercise any right,
power or remedy provided in this Agreement or under any other Loan
Document, at law or in equity, will operate as a waiver of that right,
power or remedy. No single or partial exercise by Lender of any right,
power or remedy provided under this Agreement or any other Loan
Document, at law or in equity, precludes any other or further exercise
of that right, power, or remedy by Lender, or Lender's exercise of any
other right, power or remedy. Without limiting the foregoing, Borrower
waives all defenses based on the statute of limitations to the extent
permitted by law. The remedies provided in this Agreement and the other
Loan Documents are cumulative and are not exclusive of any remedies
provided at law or in equity.
10.2 (i) Borrower grants Lender a license or other right to use, without
charge, Borrower's computer programs, other programs, labels, patents,
copyrights, rights of use of any name, trade secrets, trade names,
trademarks, service marks and advertising matter, or any property of a
similar nature, as it pertains to the Collateral, in advertising for
sale and selling any of the Collateral and Borrower's rights under all
licenses and all other agreements related to the foregoing inure to
Lender's benefit until the Obligations are paid in full.
10.3. APPLICATION OF PROCEEDS
Lender may apply the proceeds of any sale, disposition or other enforcement of
Lender's Lien on all or any portion of the Collateral to the payment of the
Obligations in the order Lender determines in its sole discretion. From and
after the indefeasible payment to Lender of all of the Obligations, any
remaining proceeds of the Collateral will be paid to Borrower, or to its
successors or assigns, or as a court of competent jurisdiction may direct. If
the proceeds of any sale, disposition or other enforcement of the Collateral are
insufficient to cover the costs and expenses of that sale, disposition or other
enforcement and payment in full of all Obligations, Borrower is liable for the
deficiency.
10.4. LENDER APPOINTED ATTORNEY-IN-FACT
Borrower appoints Lender its attorney-in-fact, with full power of substitution,
for the purpose of carrying out the provisions of this Agreement, the
Warehousing Note, the Sublimit Note and the other Loan Documents and taking any
action and executing any instruments that Lender deems necessary or advisable to
accomplish that purpose. Borrower's appointment of Lender as attorney-in-fact is
irrevocable and coupled with an interest. Without limiting the generality of the
foregoing, Lender may give notice of its Lien on the Collateral to any Person,
either in Borrower's name or in its own name, endorse all Pledged Loans or
Pledged Securities payable to the order of Borrower, change or cause to be
changed the book-entry registration or name of subscriber or Investor on any
Pledged Security, prepare and submit for filing Uniform Commercial Code
amendment statements with respect to any Uniform Commercial Code financing
statements filed in connection with any item of Collateral or receive, endorse
and collect all checks made payable to the order of Borrower representing
payment on account of the principal of or interest on, or the proceeds of sale
of, any of the Pledged Loans or Pledged Securities and give full discharge for
those transactions.
10.5. RIGHT OF SET-OFF
If Borrower defaults in the payment of any Obligation or in the performance of
any of its duties under the Loan Documents, Lender may, without Notice to or
demand on Borrower (which Notice
or demand Borrower expressly waives), set-off, appropriate or apply any property
of Borrower held at any time by Lender, or any indebtedness at any time owed by
Lender to or for the account of Borrower, against the Obligations, whether or
not those Obligations have matured.
END OF ARTICLE 10
12. DEFINITIONS
12.1. DEFINED TERMS
Capitalized terms defined below or elsewhere in this Agreement have the
following meanings or, as applicable, the meanings given to those terms in
Exhibits to this Agreement:
"Advance Rate" means, with respect to any Eligible Loan and REO Property, the
Advance Rate set forth in Exhibit H for that type of Eligible Loan or REO
Property.
"Affiliate" means, when used with reference to any Person, (a) each Person that,
directly or indirectly, controls, is controlled by or is under common control
with, the Person referred to, (b) each Person that beneficially owns or holds,
directly or indirectly, 5% or more of any class of voting Equity Interests of
the Person referred to, (c) each Person, 5% or more of the voting Equity
Interests of which is beneficially owned or held, directly or indirectly, by the
Person referred to, and (d) each of such Person's officers, directors, joint
venturers and partners. For these purposes, the term "control" (including the
terms "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 and policies of the Person in question.
"Aged Mortgage Loans" means Mortgage Loans against which a Warehousing Advance
has been outstanding for longer than the Standard Warehouse Period, provided
that Aged Mortgage Loans are permitted for such type of Mortgage Loan.
"Aged Warehouse Period" means the maximum number of days a Warehouse Advance
against Aged Mortgage Loans of a particular type may remaining outstanding.
"Agency Security" means a Mortgage-backed Security issued or guaranteed by
Xxxxxx Xxx, Xxxxxxx Mac or Xxxxxx Mae.
"Agreement" means this First Amended and Restated Warehousing Credit and
Security Agreement, either as originally executed or as it may be amended,
restated, renewed or replaced.
"Appraised Property Value" means with respect to an interest in real property,
the then current fair market value of the real property and any improvements on
it as of recent date determined in accordance with Title XI of FIRREA by a
qualified appraiser who is a member of the American Institute of Real Estate
Appraisers or other group of professional appraisers.
"Approved Custodian" means a pool custodian or other Person that Lender deems
acceptable, in its sole discretion, to hold Mortgage Loans for inclusion in a
Mortgage Pool or to hold Mortgage Loans as agent for an Investor that has issued
a Purchase Commitment for those Mortgage Loans.
"Audited Statement Date" means the date of Borrower's most recent audited
financial statements (and, if applicable, Borrower's Subsidiaries, on a
consolidated basis) delivered to Lender under the Existing Agreement or this
Agreement.
"Bank One" means Bank One, National Association, or any successor bank.
"Bank One Prime Rate" means, as of any date of determination, the highest prime
rate quoted by Bank One and most recently published by Bloomberg L.P. If the
prime rate for Bank One is not quoted or published for any period, then during
that period the term "Bank One Prime Rate"
means the highest prime rate published in the most recent edition of The Wall
Street Journal in its regular column entitled "Money Rates."
"Borrower" has the meaning set forth in the first paragraph of this Agreement.
"BPO Value" means, with respect to the improved real property securing any
Mortgage Loan, the lowest fair market value for such real property or ownership
interest and occupancy rights as set forth in an opinion of a real estate broker
acceptable to Lender, in its sole discretion, as to the value of such improved
real property if sold within a 60-day marketing period. Each such broker price
opinion must be obtained from a real estate broker with substantial experience
in the purchase and sale of similar properties in the geographic area in which
the real property or ownership interest and occupancy rights to be valued is
located and should be as of a date not more than 30 days prior to the date of
the related Advance.
"Business Day" means any day other than Saturday, Sunday or any other day on
which national banking associations are closed for business.
"Buydown" has the meaning set forth in Section 3.4.
"Calendar Quarter" means the 3 month period beginning on each January 1, April
1, July 1 or October 1.
"Cash Collateral Account" means a demand deposit account maintained at the
Funding Bank in Lender's name and designated for receipt of the proceeds of the
sale or other disposition of Collateral.
"Check Disbursement Account" means a demand deposit account maintained at the
Funding Bank in Borrower's name and under the control of Lender for clearing
checks written by Borrower to fund Mortgage Loans funded by Warehousing
Advances.
"Closing Date" has the meaning set forth in the Recitals to this Agreement.
"Collateral" has the meaning set forth in Section 4.1.
"Collateral Documents" means, with respect to each Mortgage Loan, (a) the
Mortgage Note, the Mortgage and all other documents including, if applicable,
any Security Agreement, executed in connection with or relating to the Mortgage
Loan; (b) as applicable, the original lender's ALTA Policy of Title Insurance or
its equivalent, documents evidencing the FHA Commitment to Insure, the VA
Guaranty or private mortgage insurance, the appraisal, the Regulation Z
statement, the environmental assessment, the engineering report, certificates of
casualty or hazard insurance, credit information on the maker of the Mortgage
Note, the HUD-1 or corresponding purchase advice; (c) any other document listed
in Exhibit B; and (d) any other document that is customarily desired for
inspection or transfer incidental to the purchase of any Mortgage Note by an
Investor or that is customarily executed by the seller of a Mortgage Note to an
Investor.
"Committed Purchase Price" means for an Eligible Loan (a) the dollar price as
set forth in the Purchase Commitment or, if the price is not expressed in
dollars, the product of the Mortgage Note Amount multiplied by the price
(expressed as a percentage) as set forth in the Purchase Commitment for the
Eligible Loan, or (b) if the Eligible Loan is to be used to back an Agency
Security, the dollar price as set forth in a Purchase Commitment or, if the
price is not expressed in dollars the product of the Mortgage Note Amount
multiplied by the price (expressed as a percentage) as set forth in the Purchase
Commitment for the Agency Security.
"Compliance Certificate" means a certificate executed on behalf of Borrower by
its manager having principal financial accounting responsibilities,
substantially in the form of Exhibit E.
"Credit Score" means a mortgagor's overall consumer credit rating, represented
by a single numeric credit score using the Fair, Xxxxx consumer credit scoring
system, provided by a credit repository acceptable to Lender and the Investor
that issued the Purchase Commitment covering the related Mortgage Loan (if a
Purchase Commitment is required by Exhibit H).
"Current Assets" means a Person's (and, if applicable, the Person's
Subsidiaries, on a consolidated basis) assets that in the regular course of
business will be readily and quickly realized, or converted into cash, all in
accordance with GAAP, within 1 year, together with those additional assets that
may readily be converted into cash without impairing the business of Borrower.
Current Assets include (a) cash, (b) temporary investments, (c) Mortgage Loans
and Mortgage-backed Securities held for sale (net of any loan loss reserves),
(d) accounts and accrued interest receivable (net of allowance for doubtful
accounts), (e) servicing advances made on behalf of mortgagors and (f) any other
assets that would be Current Assets in accordance with GAAP.
"Current Liabilities" means a Person's (and, if applicable, the Person's
Subsidiaries, on a consolidated basis) liabilities, or any portion of a Person's
liabilities, the maturity of which will not extend beyond 1 year from the date
of determination.
"Current Ratio" means the ratio of a Person's Current Assets to Current
Liabilities.
"Daily Outstanding Balances" has the meaning set forth in Section 3.11.
"Debt" means (a) all indebtedness or other obligations of a Person that, in
accordance with GAAP, would be included in determining total liabilities as
shown on the liabilities side of a balance sheet of the Person on the date of
determination, plus (b) all indebtedness or other obligations of the Person for
borrowed money or for the deferred purchase price of property or services, and
minus, (c) for purposes of calculating Borrower's Debt, all indebtedness or
other obligations of a Diversified Business that, in accordance with GAAP, would
be included in determining total liabilities as shown on the liabilities side of
a balance sheet of the Diversified Business on the date of determination. For
purposes of calculating a Person's Debt, Subordinated Debt not due within 1 year
of that date and deferred taxes arising from capitalized excess servicing fees
and capitalized servicing rights may be excluded from a Person's indebtedness.
"Default" means the occurrence of any event or existence of any condition that,
but for the giving of Notice or the lapse of time, would constitute an Event of
Default.
"Default Rate" means, for any Warehousing Advance, the Interest Rate applicable
to that Warehousing Advance plus 4% per annum. If no Interest Rate is applicable
to a Warehousing Advance, "Default Rate" means, for that Warehousing Advance,
the highest Interest Rate then applicable to any outstanding Warehousing Advance
plus 4% per annum.
"Depository Benefit" means the compensation received by Lender, directly or
indirectly, as a result of Borrower's maintenance of Eligible Balances with a
Designated Bank.
"Designated Bank" means any bank designated by Lender as a Designated Bank, but
only for as long as Lender has an agreement under which Lender receives
Depository Benefits from that bank.
"Designated Bank Charges" means any fees, interest or other charges that would
otherwise be payable to a Designated Bank in connection with Eligible Balances
maintained at the Designated Bank, including deposit insurance premiums, service
charges and any other charges that may be imposed by governmental authorities
from time to time.
"Discontinued Loan" has the meaning set forth in the GMAC-RFC Client Guide.
"Diversified Business" means each Subsidiary or Affiliate of Borrower listed on
Exhibit K to this Agreement, including H&K Collections, LLC and Oak Street
Funding LLC, and any other Subsidiary, Affiliate, investment or asset not
engaged in or supporting Borrower's mortgage banking business.
"Earnings Allowance" has the meaning set forth in Section 3.1(b).
"Earnings Credit" has the meaning set forth in Section 3.1(b).
"Electronic Advance Request" means an electronic transmission through RFConnects
Delivery containing the same information as Exhibit A to this Agreement.
"Electronic Tracking Agreement" means an Electronic Tracking Agreement, on the
form prescribed by Lender, among Borrower, Lender, MERS and MERCORP, Inc.,
pursuant to which Lender will have the authority to, among other things,
withdraw a Mortgage from the MERS system, if either the Mortgage Loan has been
registered on the MERS system naming Borrower as servicer or subservicer, or the
Mortgage Loan has not yet been registered on the MERS system.
"Eligible Balances" means all funds of or maintained by Borrower (and, if
applicable, Borrower's Subsidiaries) in demand deposit or time deposit accounts
at a Designated Bank, minus balances to support float, reserve requirements and
any other reductions that may be imposed by governmental authorities from time
to time.
"Eligible Loan" means a Single Family Mortgage Loan that satisfies the
conditions and requirements set forth in Exhibit H.
"Eligible Mortgage Pool" means a Mortgage Pool for which (a) an Approved
Custodian has issued its initial certification, (b) there exists a Purchase
Commitment covering the Agency Security to be issued on the basis of that
certification and (c) the Agency Security will be delivered to Lender.
"Equity Interests" means all shares, interests, participations or other
equivalents, however, designated, of or in a Person (other than a natural
person), whether or not voting, including common stock, membership interests,
warrants, preferred stock, convertible debentures and all agreements,
instruments and documents convertible, in whole or in part, into any one or more
of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974 and all rules
and regulations promulgated under that statute, as amended, and any successor
statute, rules, and regulations.
"ERISA Affiliate" means any trade or business (whether or not incorporated) that
is a member of a group of which Borrower is a member and that is treated as a
single employer under Section 414 of the Internal Revenue Code.
"Event of Default" means any of the conditions or events set forth in Section
10.1.
"Excess Buydown" has the meaning set forth in Section 3.4.
"Excess Usage Day" has the meaning set forth in Section 3.11.
"Excess Usage Fee" has the meaning set forth in Section 3.11.
"Exchange Act" means the Securities Exchange Act of 1934 and all rules and
regulations promulgated under that statute, as amended, and any successor
statute, rules, and regulations.
"Exhibit B" means Exhibit B-SF or Exhibit B-REP/NP/REO, as applicable to the
type of Eligible Loan or REO Property against which a Warehousing Advance is to
be made.
"Existing Agreement" means the Warehousing Credit and Security Agreement dated
as of June 30, 2000, as amended, between Oak Street Mortgage LLC f/k/a Cresleigh
Financial Services LLC and Lender.
"Fair Market Value" means, at any time for an Eligible Loan or a related Agency
Security (if the Eligible Loan is to be used to back an Agency Security) as of
any date of determination, (a) the Committed Purchase Price if the Eligible Loan
is covered by a Purchase Commitment from Xxxxxx Mae or Xxxxxxx Mac or the
Eligible Loan is to be exchanged for an Agency Security and that Agency Security
is covered by a Purchase Commitment from an Investor, or (b) otherwise, the
market price for such Eligible Loan or Agency Security, determined by Lender
based on market data for similar Mortgage Loans or Agency Securities and such
other criteria as Lender deems appropriate in its sole discretion.
"Xxxxxx Mae" means Xxxxxx Xxx, a corporation created under the laws of the
United States, and any successor corporation or other entity.
"FHA" means the Federal Housing Administration and any successor agency or other
entity.
"FICA" means the Federal Insurance Contributions Act and all rules and
regulations promulgated under that statute, as amended, and any successor
statute, rules and regulations.
"FIRREA" means the Financial Institutions Reform, Recovery and Enforcement Act
of 1989 and all rules and regulations promulgated under that statute, as
amended, and any successor statute, rules, and regulations.
"First Mortgage" means a Mortgage that constitutes a first Lien on the real
property covered by the Mortgage.
"First Mortgage Loan" means a Mortgage Loan secured by a First Mortgage.
"Xxxxxxx Mac" means Xxxxxxx Mac, a corporation created under the laws of the
United States, and any successor corporation or other entity.
"Funding Bank" means Bank One or any other bank designated by Lender as a
Funding Bank.
"Funding Bank Agreement" means a letter agreement on the form prescribed by
Lender between the Funding Bank and Borrower authorizing Lender's access to the
Operating Account and the Check Disbursement Account.
"GAAP" means generally accepted accounting principles set forth in opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and in statements and pronouncements of the
Financial Accounting Standards Board, or in opinions, statements or
pronouncements of any other entity approved by a significant segment of the
accounting profession, which are applicable to the circumstances as of the date
of determination.
"Gestation Agreement" means an agreement under which Borrower agrees to sell or
finance (a) a Mortgage Loan prior to the date of purchase by an Investor or (b)
a Mortgage Pool prior to the date a Mortgage-backed Security backed by the
Mortgage Pool is issued.
"Xxxxxx Xxx" means the Government National Mortgage Association, an agency of
the United States government, and any successor agency or other entity.
"GMAC-RFC Client Guide" means the applicable loan purchase guide issued by
Lender, as the same may be amended or replaced.
"Government Mortgage Loan" means a closed-end First Mortgage Loan that is either
HUD/FHA insured (other than a HUD 203(K) Mortgage Loan or a Title I Mortgage
Loan) or VA guaranteed.
"Hedging Arrangements" means, with respect to any Person, any agreements or
other arrangements (including interest rate swap agreements, interest rate cap
agreements and forward sale agreements) entered into to protect that Person
against changes in interest rates or the market value of assets.
"High LTV Mortgage Loan" has the meaning set forth in Exhibit H.
"HUD" means the Department of Housing and Urban Development, and any successor
agency or other entity.
"Indemnified Liabilities" has the meaning set forth in Section 11.2.
"Indemnitees" has the meaning set forth in Section 11.2.
"Interest Rate" means, for any Warehousing Advance, the floating rate of
interest specified for that Warehousing Advance in Exhibit H.
"Interim Statement Date" means the date of the most recent unaudited financial
statements of Borrower (and, if applicable, Borrower's Subsidiaries, on a
consolidated basis) delivered to Lender under the Existing Agreement or this
Agreement.
"Internal Revenue Code" means the Internal Revenue Code of 1986, Title 26 of the
United States Code, and all rules, regulations and interpretations issued under
those statutory provisions, as amended, and any subsequent or successor federal
income tax law or laws, rules, regulations and interpretations.
"Investment Company Act" means the Investment Company Act of 1940 and all rules
and regulations promulgated under that statute, as amended, and any successor
statute, rules, and regulations.
"Investor" means Xxxxxx Mae, Xxxxxxx Mac or a financially responsible private
institution that Lender deems acceptable, in its sole discretion, to issue
Purchase Commitments with respect to a particular category of Eligible Loans.
"Lender" has the meaning set forth in the first paragraph of this Agreement.
"Leverage Ratio" means the ratio of a Person's (and, if applicable, the Person's
Subsidiaries, on a consolidated basis) Debt to Tangible Net Worth. For purposes
of calculating a Person's Leverage Ratio, Debt arising under Hedging
Arrangements, to the extent of assets arising under those Hedging Arrangements,
may be excluded from a Person's Debt.
"LIBOR" means, for each week, the rate of interest per annum that is equal to
the arithmetic mean of the U.S. Dollar London Interbank Offered Rates for 1
month periods of certain U.S. banks as of 11:00 a.m. (London time) on the first
Business Day of each week on which the London Interbank market is open, as
published by Bloomberg L.P. If those interest rates are not offered or published
for any period, then during that period LIBOR means the London Interbank
Offered Rate for 1 month periods as published in The Wall Street Journal in its
regular column entitled "Money Rates" on the first Business Day of each week on
which the London Interbank market is open.
"Lien" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature of such an agreement and any
agreement to give any security interest).
"Liquid Assets" means the following assets owned by a Person (and, if
applicable, that Person's Subsidiaries, on a consolidated basis) as of any date
of determination: (a) unrestricted and unencumbered cash, (b) funds on deposit
in accounts with any bank located in the United States (net of the aggregate
amount payable under all outstanding and unpaid checks, drafts and similar items
drawn by a Person against those accounts), (c) investment grade commercial
paper, (d) money market funds and (e) marketable securities, plus, in the case
of Borrower and in the absence of a Default or Event of Default, (f) the amount
of any Buydowns and Excess Buydowns.
"Loan Documents" means this Agreement, the Warehousing Note, the Sublimit Note,
any agreement of Borrower relating to Subordinated Debt, any Security Agreement,
if applicable, and each other document, instrument or agreement executed by
Borrower in connection with any of those documents, instruments and agreements,
as originally executed or as any of the same may be amended, restated, renewed
or replaced.
"Loan Package Fee" has the meaning set forth in Section 3.5.
"Loan-to-Value Ratio" means, for any Mortgage Loan, the ratio of (a) the maximum
amount that may be borrowed under the Mortgage Loan (whether or not borrowed) at
the time of origination, plus the Mortgage Note Amounts of all other Mortgage
Loans secured by the related Property, to (b) the Appraised Property Value of
the related Property.
"Manufactured Home" means a structure that is built on a permanent chassis
(steel frame) with the wheel assembly necessary for transportation in one or
more sections to a permanent site or semi-permanent site.
"Margin Stock" has the meaning assigned to that term in Regulation U of the
Board of Governors of the Federal Reserve System, as amended.
"MERS" means Mortgage Electronic Registrations Systems, Inc. and any successor
entity.
"Miscellaneous Fees and Charges" means the miscellaneous fees set forth on
Lender's collateral operations fees schedule (either as originally delivered to
Borrower or as it may be amended, restated, renewed or replaced after the date
of this Agreement) and all miscellaneous disbursements, charges and expenses
incurred by or on behalf of Lender for the handling and administration of
Warehousing Advances and Collateral, including costs for Uniform Commercial
Code, tax lien and judgment searches conducted by Lender, filing fees, charges
for wire transfers and check processing charges, charges for security delivery
fees, charges for overnight delivery of Collateral to Investors, recording fees
for REO Mortgages, Funding Bank service fees and overdraft charges and
Designated Bank Charges.
"Mortgage" means a mortgage or deed of trust on real property that is improved
and substantially completed (including real property to which a Manufactured
Home has been affixed in a manner such that the Lien of a mortgage or deed of
trust would attach to the Manufactured Home under applicable real property law).
"Mortgage-backed Securities" means securities that are secured or otherwise
backed by Mortgage Loans.
"Mortgage Loan" means any loan evidenced by a Mortgage Note and secured by a
Mortgage and, if applicable, a Security Agreement.
"Mortgage Note" means a promissory note secured by one or more Mortgages and, if
applicable, one or more Security Agreements.
"Mortgage Note Amount" means, as of any date of determination, the then
outstanding and unpaid principal amount of a Mortgage Note (whether or not an
additional amount is available to be drawn under that Mortgage Note).
"Mortgage Pool" means a pool of one or more Pledged Loans on the basis of which
a Mortgage-backed Security is to be issued.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA, to which either Borrower or any ERISA Affiliate of Borrower
has any obligation with respect to its employees.
"Non-Usage Fee" has the meaning set forth in Section 3.6.
"Notices" has the meaning set forth in Section 11.1.
"Obligations" means all indebtedness, obligations and liabilities of Borrower to
Lender and Lender's Subsidiaries (whether now existing or arising after the date
of this Agreement, voluntary or involuntary, joint or several, direct or
indirect, absolute or contingent, liquidated or unliquidated, or decreased or
extinguished and later increased and however created or incurred), including
Borrower's obligations and liabilities to Lender under the Loan Documents and
disbursements made by Lender for Borrower's account.
"Operating Account" means a demand deposit account maintained at the Funding
Bank in Borrower's name and designated for funding that portion of each Eligible
Loan or REO Property not funded by a Warehousing Advance made against that
Eligible Loan or REO Property and for returning any excess payment from an
Investor for a Pledged Loan or Pledged Security.
"Overdraft Advance" has the meaning set forth in Section 3.9.
"Participant" has the meaning set forth in Section 11.8.
"Person" means and includes natural persons, corporations, limited liability
companies, limited liability partnerships, limited partnerships, general
partnerships, joint stock companies, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions of those governments.
"Plan" means each employee benefit plan (whether in existence on the date of
this Agreement or established after that date), as that term is defined in
Section 3 of ERISA, maintained for the benefit of directors, officers or
employees of Borrower or any ERISA Affiliate.
"Pledged Assets" means, collectively, Pledged Loans, Pledged Securities and REO
Properties.
"Pledged Hedging Accounts" has the meaning set forth in Section 4.1 (i).
"Pledged Hedging Arrangements" has the meaning set forth in Section 4.1 (i).
"Pledged Loans" has the meaning set forth in Section 4.1 (b).
"Pledged Securities" has the meaning set forth in Section 4.1 (c).
"Prime Mortgage Loan" has the meaning set forth in Exhibit H.
"Prohibited Transaction" has the meanings set forth for such term in Section
4975 of the Internal Revenue Code and Section 406 of ERISA.
"Purchase Commitment" means a written commitment, in form and substance
satisfactory to Lender, issued in favor of Borrower by an Investor under which
that Investor commits to purchase Mortgage Loans or Mortgage-backed Securities.
"Receivables" has the meaning set forth in Section 4.1(e).
"Release Amount" has the meaning set forth in Section 4.3 (f).
"REO Mortgage" means a First Mortgage in form and substance approved by Lender
covering an REO Property which has been executed and delivered by Borrower for
the benefit of Lender.
"REO Property" has the meaning set forth in Exhibit H.
"Repurchased Mortgage Loan" has the meaning set forth in Exhibit H.
"RFC Mortgage Loan" means a Mortgage Loan covered by a Purchase Commitment
issued by Lender.
"RFConnects Delivery" means Lender's proprietary service to support the
electronic exchange of information between Lender and Borrower, including
Advance Requests, shipping requests, payoff requests, activity reports and
exception reports.
"RFConnects Pledge Agreement" means an agreement (on the then current form
prescribed by Lender) granting Lender a security interest in Mortgage Loans for
which Borrower has requested Warehousing Advances using RFConnects Delivery.
"Second Mortgage" means a Mortgage that constitutes a second Lien on the
property covered by the Mortgage.
"Second Mortgage Loan" means a Mortgage Loan secured by a Second Mortgage.
"Security Agreement" means a security agreement or other agreement that creates
a Lien on personal property, including furniture, fixtures and equipment, to
secure repayment of a Mortgage Loan.
"Servicing Contract" means, with respect to any Person, the arrangement, whether
or not in writing, under which that Person has the right to service Mortgage
Loans.
"Servicing Portfolio" means, as to any Person, the unpaid principal balance of
Mortgage Loans serviced by that Person under Servicing Contracts, minus the
principal balance of all Mortgage Loans that are serviced by that Person for
others under subservicing arrangements.
"Single Family Mortgage Loan" means a Mortgage Loan secured by a Mortgage on
improved real property on which is located a 1-to-4 family residence.
"Standard Warehouse Period" means, for any Mortgage Loan or REO Property, the
maximum number of days a Warehousing Advance against that type of Mortgage Loan
or REO Property, other than against an Aged Mortgage Loan, may remain
outstanding, as set forth in Exhibit H.
"Statement Date" means the Audited Statement Date or the Interim Statement Date,
as applicable.
"Sublimit" means the aggregate amount of Warehousing Advances (expressed as a
dollar amount or as a percentage of the Warehousing Commitment Amount) that is
permitted to be outstanding at any one time against a specific type of Eligible
Loan or REO Property.
"Sublimit Note" has the meaning set forth in Section 1.3.
"Subordinated Debt" means (a) all indebtedness of Borrower for borrowed money
that is effectively subordinated in right of payment to all present and future
Obligations either (1) under a Subordination of Debt Agreement on the form
prescribed by Lender or (2) otherwise on terms acceptable to Lender, and (b)
solely for purposes of Section 8.5, all indebtedness of Borrower that is
required to be subordinated by Sections 5.1 (b) and 7.11.
"Subprime Mortgage Loan" has the meaning set forth in Exhibit H.
"Subsidiary" means any corporation, partnership, association or other business
entity in which more than 50% of the shares of stock or other ownership
interests having voting power for the election of directors, managers, trustees
or other Persons performing similar functions is at the time owned or controlled
by any Person either directly or indirectly through one or more Subsidiaries of
that Person.
"Tangible Net Worth" means the excess of a Person's (and, if applicable, the
Person's Subsidiaries, on a consolidated basis) total assets over total
liabilities as of the date of determination, each determined in accordance with
GAAP, applied in a manner consistent with the most recent audited financial
statements delivered to Lender under the Existing Agreement, plus that portion
of Subordinated Debt not due within 1 year of that date. For purposes of
calculating a Person's Tangible Net Worth, advances or loans to managers,
members, employees or Affiliates, investments in Affiliates, assets pledged to
secure any liabilities not included in the Debt of the Person, intangible
assets, those other assets that would be deemed by HUD to be non-acceptable in
calculating adjusted net worth in accordance with its requirements in effect as
of that date, as those requirements appear "Consolidated Audit Guide for Audits
of HUD Programs," other assets Lender deems unacceptable, in its sole
discretion, and, for purposes of calculating Borrower's Tangible Net Worth, an
amount equal to the book net worth of each Diversified Business, must be
excluded from a Person's total assets.
"Third Party Originated Loan" means a Mortgage Loan originated and funded by a
third party (other than with funds provided by Borrower at closing to purchase
the Mortgage Loan) and subsequently purchased by Borrower.
"Trust Receipt" means a trust receipt in a form approved by and under which
Lender may deliver any document relating to the Collateral to Borrower for
correction or completion.
"Usage Target" has the meaning set forth in Section 3.11.
"Unused Portion" has the meaning set forth in Section 3.6.
"Used Portion" has the meaning set forth in Section 3.6.
"Warehousing Advance" means a disbursement by Lender to fund the origination or
acquisition of a Mortgage Loan.
"Warehousing Advance Request" has the meaning set forth in Section 2.1.
"Warehousing Collateral Value" means, as of any date of determination, (a) with
respect to any Eligible Loan or REO Property, the lesser of (1) the amount of
any Warehousing Advance made, or that could be made, against such Eligible Loan
or REO Property under Exhibit H or (2) an amount equal to the Advance Rate for
the applicable type of Eligible Loan or REO Property multiplied by the Fair
Market Value of such Eligible Loan or REO Property; (b) if Eligible Loans or REO
Properties have been exchanged for Agency Securities, the lesser of (1) the
amount of any Warehousing Advances outstanding against the Eligible Loans or REO
Properties backing the Agency Securities or (2) an amount equal to the Advance
Rates for the applicable types of Eligible Loans backing the Agency Securities
multiplied by the Fair Market Value of the Agency Securities; and (c) with
respect to cash, the amount of the cash.
"Warehousing Commitment" means the obligation of Lender to make Warehousing
Advances to Borrower under Section 1.1.
"Warehousing Commitment Amount" means $200,000,000. Notwithstanding the
foregoing, during the period from May 26, 2004, to and including June 4, 2004,
the Warehousing Commitment Amount will be temporarily increased to $250,000,000.
On the first Business Day following the expiration of the temporary increase of
the Warehousing Commitment Amount, Borrower will repay to Lender the amount by
which the outstanding Warehousing Advances exceed the Warehousing Commitment
Amount.
"Warehousing Commitment Fee" has the meaning set forth in Section 3.5.
"Warehousing Fee" has the meaning set forth in Section 3.7.
"Warehousing Maturity Date" has the meaning set forth in Section 1.2.
"Warehousing Note" has the meaning set forth in Section 1.3.
"Wet Settlement Advance" means with respect to any Warehousing Advance, the time
from the date the Warehousing Advance is made until the date of Lender's receipt
of the Collateral Documents required by Article 2 and the Exhibits and documents
referenced in that Article.
"Wire Disbursement Account" means a demand deposit account maintained at the
Funding Bank in Lender's name for clearing wire transfers requested by Borrower
to fund Warehousing Advances.
"Wire Fee" has the meaning set forth in Section 3.7.
12.2. OTHER DEFINITIONAL PROVISIONS; TERMS OF CONSTRUCTION
12.2(a) Accounting terms not otherwise defined in this Agreement have the
meanings given to those terms under GAAP.
12.2(b) Defined terms may be used in the singular or the plural, as the
context requires.
12.2(c) All references to time of day mean the then applicable time in
Chicago, Illinois, unless otherwise expressly provided.
12.2(d) References to Sections, Exhibits, Schedules and like references are
to Sections, Exhibits, Schedules and the like of this Agreement unless
otherwise expressly provided.
12.2(e) The words "include," "includes" and "including" are deemed to be
followed by the phrase "without limitation."
12.2(f) Unless the context in which it is used otherwise clearly requires,
the word "or" has the inclusive meaning represented by the phrase
"and/or."
12.2(g) All incorporations by reference of provisions from other agreements
are incorporated as if such provisions were fully set forth into this
Agreement, and include all necessary definitions and related provisions
from those other agreements. All provisions from other agreements
incorporated into this Agreement by reference survive any termination
of those other agreements until the Obligations of Borrower under this
Agreement, the Warehousing Note and the Sublimit Note are irrevocably
paid in full and the Warehousing Commitment is terminated.
12.2(h) All references to the Uniform Commercial Code shall be deemed to be
references to the Uniform Commercial Code in effect on the date of this
Agreement in the applicable jurisdiction.
12.2(i) Unless the context in which it is used otherwise clearly requires,
all references to days, weeks and months mean calendar days, weeks and
months.
END OF ARTICLE 12
EXHIBIT E
COMPLIANCE CERTIFICATE
This Compliance Certificate is submitted to the Lender pursuant to Section
7.2(c) of the First Amended and Restated Warehousing Credit and Security
Agreement among Oak Street Mortgage LLC ("Oak Street LLC"), OAK STREET MORTGAGE
OF TENNESSEE LLC ("Oak Street of TN") and OAK STREET MORTGAGE, INC. ("Oak Street
Inc.") (Oak Street LLC, Oak Street of TN and Oak Street Inc. are collectively
referred to as the "Borrowers") and RESIDENTIAL FUNDING CORPORATION ("Lender"),
dated as of August 31, 2002 (as amended, restated, renewed or replaced,
"Agreement"). Capitalized terms and Section numbers used in this Compliance
Certificate without further definition refer to those terms and Sections set
forth in the Agreement.
The undersigned hereby certifies to Lender that as of the close of business
on _______, ("Statement Date") and with respect to Oak Street LLC (and Oak
Street LLC's Subsidiaries on a consolidated basis):
1. As demonstrated by the attached calculations supporting this Compliance
Certificate, Borrowers satisfied the covenants set forth in Sections
8.8, 8.9, 8.10, 8.11, 8.12 and 8.13 or, if Borrowers did not satisfy
any of those covenants, a detailed explanation is attached setting
forth the nature and the period of existence of any Default or Event of
Default and the action Borrowers have taken, are taking or propose to
take with respect to that Default or Event of Default.
2. Borrowers have not transferred (by sale or otherwise), pledged or
granted a security interest in any Servicing Contracts, except as
permitted under the terms of the Agreement.
3. Borrowers have not made any payments in advance of the scheduled
maturity date on any Subordinated Debt, and Borrowers have not incurred
any additional Debt that must be subordinated under the terms of
Section 7.11.
4. Borrowers were in full compliance with all applicable Investor net
worth requirements, and in good standing with each Investor.
5. I have reviewed the terms of the Agreement and have made, or caused to
be made under my supervision, a review in reasonable detail of the
transactions and conditions of Borrowers (and Borrowers' Subsidiaries).
That review has not disclosed, and I have no other knowledge of the
existence of, any Default or Event of Default, or if any Default or
Event of Default existed or exists, a detailed explanation is attached
setting forth the nature and the period of existence of the Default or
Event of Default and the action Borrowers have taken, are taking or
propose to take with respect to that Default or Event of Default.
6. Pursuant to Section 7.2 of the Agreement, enclosed are the financial
statements of Oak Street LLC as of the Statement Date. The financial
statements for the period ending on the Statement Date fairly present
the financial condition and results of operations of Oak Street LLC
(and Oak Street LLC's Subsidiaries on consolidated basis) as of the
Statement Date.
Dated:______________________________ OAK STREET MORTGAGE LLC,
a Delaware limited liability company
By:___________________________________
Its:__________________________________
CALCULATIONS SUPPORTING COMPLIANCE CERTIFICATE
Borrower Name: Oak Street Mortgage LLC (and, if applicable, its Subsidiaries)
Statement Date: ________________________________
All financial calculations set forth in this Compliance Certificate are as of
the Statement Date.
1. TANGIBLE NET WORTH
A. Net Worth of is:
Excess of total assets over total liabilities: $ ________________________
Plus: Subordinated Debt (or any portion of that
Subordinated Debt) due (must be more
than 6 months after the Warehousing
Maturity Date): $ ________________________
Minus: Advances or loans to or receivables due from,
members, managers or Affiliates or any
shareholder, director or officer of any manager,
member or Affiliate that Lender deems
intangible: $ ________________________
Minus: Investments in Affiliates deemed intangible
by Lender: $ ________________________
Minus: Assets pledged to secure liabilities not
included in Debt: $ ________________________
Minus: Intangible assets: $ ________________________
Minus: Other assets that HUD deems non-acceptable: $ ________________________
Minus: Other assets that Lender deems unacceptable: $ ________________________
TANGIBLE NET WORTH $ ________________________
B. Requirements of Section 8.9 of the Agreement:
PERMIT OAK STREET LLC'S TANGIBLE NET WORTH AT ANY TIME TO BE
LESS THAN (A) FROM MAY 1, 2004 THROUGH JUNE 30, 2004,
$11,000,000; (B) FROM JULY 1, 2004 THROUGH SEPTEMBER 30, 2004,
$13,000,000; AND (C) ON AND AFTER OCTOBER 1, 2004,
$15,000,000.
C. COVENANT SATISFIED: _____ COVENANT NOT SATISFIED: _____
2. DEBT OF BORROWER
A. Borrower's total liabilities calculated in accordance with
GAAP, plus all indebtedness or other obligations for borrowed
money or for the deferred purchase price
of property or services: $ ________________________
Minus: Debt of Diversified Businesses: $ ________________________
Minus: Subordinated Debt (or any portion of that
Subordinated Debt) due (must be more than
6 months after the Warehousing
Maturity Date): $ ________________________
B. DEBT (Total): $ ________________________
Minus: Debt arising under Hedging Arrangements
(to the extent of assets arising under those
Hedging Arrangements): $ ________________________
C. DEBT (adjusted for Hedging Arrangements): $ ________________________
3. LEVERAGE RATIO
A. The ratio of Debt (adjusted for Hedging Arrangements)
to Tangible Net Worth is (2.C. to 1.A.): _________ to 1
B. Requirements of Section 8.8 of the Agreement:
BORROWER'S leverage ratio MUST not exceed 20 to 1.
C. COVENANT SATISFIED: ____ COVENANT NOT SATISFIED: ____
4. LIQUID ASSETS OF BORROWER
A. The following unrestricted and unencumbered assets:
Cash: $ ________________________
Funds on deposit in any United States bank
(net of all outstanding checks, drafts and
similar items): $ ________________________
Investment grade commercial paper: $ ________________________
Money market funds: $ ________________________
Marketable securities: $ ________________________
Buydown: $ ________________________
Excess Buydown: $ ________________________
B. LIQUID ASSETS $ ________________________
Requirements of Section 8.11 of the Agreement:
BORROWER'S LIQUID ASSETS MUST NOT BE LESS THAN $5,000,000.
C. COVENANT SATISFIED: ____ COVENANT NOT SATISFIED: ____
5. NET INCOME/LOSS
A. Net income (loss) for month ended on Statement Date: $ ________________________
B. Net income (loss) as of end of prior month: $ ________________________
C. Net income (loss) as of end of month immediately
preceding prior month: $ ________________________
D. Requirements of Section 8.12 of the Agreement:
OAK STREET LLC'S MONTHLY NET INCOME MAY NOT BE LESS THAN ZERO
FOR THREE CONSECUTIVE MONTHS.
E. COVENANT SATISFIED: ____ COVENANT NOT SATISFIED: ____
6. TRANSACTIONS WITH AFFILIATES
A. Loans, advances, and extensions of credit by
Borrower to its Affiliates during the current fiscal year: $ ________________________
B. Capital contributions made by Borrower to
its Affiliates during the current fiscal year: $ ________________________
C. Transfers, sales, pledges, assignments or other dispositions
of assets made by Borrower or on behalf of its Affiliates: $ ________________________
D. Management fees paid by Borrower to Affiliates
during the current fiscal year: $ ________________________
E. Requirements of Section 8.13 of the Agreement:
(1) CONTRIBUTIONS BY OAK STREET LLC TO H&K COLLECTIONS
LLC MUST NOT EXCEED A LOAN IN THE AMOUNT OF
$1,000,000 AND A CAPITAL CONTRIBUTION IN THE AMOUNT
OF $700,000.
COVENANT SATISFIED: ____ COVENANT NOT SATISFIED: ____
(2) CONTRIBUTIONS BY OAK STREET LLC TO OAK STREET FUNDING
LLC MUST NOT EXCEED A CAPITAL CONTRIBUTION IN THE
AMOUNT OF $2,500,000.
COVENANT SATISFIED: ____ COVENANT NOT SATISFIED: ____
(3) BORROWER MAY NOT TRANSFER, SELL, PLEDGE, ASSIGN OR
MAKE ANY OTHER DISPOSITION OF ASSETS TO OR ON BEHALF
OF ITS AFFILIATES.
COVENANT SATISFIED: ____ COVENANT NOT SATISFIED: ____
(4) BORROWER MAY NOT MERGE OR CONSOLIDATE WITH, OR
PURCHASE OR ACQUIRE ANY ASSETS FROM, ITS AFFILIATES.
COVENANT SATISFIED: ____ COVENANT NOT SATISFIED: ____
(5) BORROWER MAY NOT PAY ANY MANAGEMENT FEES TO ITS
AFFILIATES.
COVENANT SATISFIED: ____ COVENANT NOT SATISFIED: ____
7. CURRENT RATIO
A. Current Assets:
Cash: $ ________________________
Temporary investments: $ ________________________
Mortgage Loans and Mortgage-backed Securities
held for sale (net of any loan loss reserves): $ ________________________
Accounts and accrued interest receivable
(net of any allowance for doubtful accounts): $ ________________________
Servicing advances made on behalf of mortgagors: $ ________________________
Any other "Current Assets" under GAAP: $ ________________________
Minus: Loans/advances to or receivables from
employees, officers or owners and
Affiliates: $ ________________________
Minus: Deferred assets, other than prepaid
items for insurance, taxes and rent: $ ________________________
TOTAL CURRENT ASSETS: $ ________________________
B. Current Liabilities (liabilities or any portion maturing
within 1 year):
Warehouse notes payable: $ ________________________
Other notes payable: $ ________________________
Repurchase agreements: $ ________________________
Accounts payable and accrued expenses: $ ________________________
TOTAL CURRENT LIABILITIES: $ ________________________
C. Current Ratio: ___________ to 1
D. Requirements of Section 8.10 of the Agreement:
BORROWER'S CURRENT RATIO MUST NOT EXCEED 1.03 TO 1.
E. COVENANT SATISFIED: ____ COVENANT NOT SATISFIED: ____
8. LOAN PRODUCTION VOLUME
Loan Type Number of Mortgage Loans Aggregate Mortgage Note Amount
--------- ------------------------ ------------------------------
Prime Mortgage Loans
Subprime Mortgage Loans
High LTV Mortgage Loans
9. INVESTMENTS IN AFFILIATES
K, S, & K, LLC $ ________________________
Creations Title LLC $ ________________________
Great Western Loan & Investments LP $ ________________________
Oak Street Funding LLC $ ________________________
H&K Collections LLC $ ________________________
10. ADVANCES TO & RECEIVABLES FROM AFFILIATES
K, S, & K, LLC $ ________________________
Creations Title LLC $ ________________________
Great Western Loan & Investments LP $ ________________________
Oak Street Funding LLC $ ________________________
H&K Collections LLC $ ________________________
11. AMOUNTS OWED TO AFFILIATES
K, S, & K, LLC $ ________________________
Creations Title LLC $ ________________________
Great Western Loan & Investments LP $ ________________________
Oak Street Funding LLC $ ________________________
H&K Collections LLC $ ________________________
12. THIRD PARTY ORIGINATED LOANS
A. Total amount of Third Party Originated Loans is: $ ________________________
B. THE AMOUNT OF BORROWER'S THIRD PARTY ORIGINATED LOANS MAY NOT
EXCEED $10,000,000.
C. SATISFIED: ______ NOT SATISFIED: ____
EXHIBIT H
ELIGIBLE LOANS AND OTHER ASSETS
Oak Street Mortgage LLC
Oak Street Mortgage, Inc.
Oak Street Mortgage of Tennessee LLC
LIMITATIONS ON WAREHOUSING ADVANCES AGAINST MORTGAGE LOANS
Lender's obligation to make Warehousing Advances under the Agreement is subject
to the following limitations:
1. No Warehousing Advance will be made against any Mortgage Loan
that has been previously sold or pledged to obtain financing
(whether or not such financing constitutes Debt) under another
warehousing financing arrangement or a gestation agreement.
2. No Warehousing Advance will be made against any Mortgage Loan
that Lender believes may be based on untrue, incomplete or
inaccurate or fraudulent information or may otherwise be
subject to fraud.
3. No Warehousing Advance will be made against a Mortgage Loan if
any of the limitations set forth in this Exhibit H would be
exceeded after giving effect to the Warehousing Advance.
4. No Warehousing Advance will be made against a Mortgage Loan
with an original principal balance in excess of $2,000,000.
5. No Warehousing Advance will be made against a Third Party
Originated Loan that was closed more than 45 days prior to the
date on which the requested Warehousing Advance is to be made.
SUBLIMITS
These general limitations apply to all Warehousing Advances against Eligible
Loans:
1. Wet Settlement Advances: 40% of the Warehousing
Commitment Amount.
2. Third Party Originated Loans: $25,000,000 (Wet Settlement
Advances not permitted)
ELIGIBLE LOANS AND TERMS OF WAREHOUSING ADVANCES
Subject to compliance with the terms and limitations set forth below and the
terms, representations and warranties and the covenants in the Agreement, each
of the following Mortgage Loans is an Eligible Loan for purposes of the
Agreement:
1. PRIME MORTGAGE LOAN
(a) Definition: A First Mortgage Loan or a Second Mortgage Loan with the
following characteristics:
(i) For a First Mortgage Loan:
A. Underwritten substantially in accordance with Xxxxxx Xxx or
Xxxxxxx Mac underwriting standards (except as to maximum amount);
and
B. Loan-to-Value Ratio not to exceed 80% or, if the Loan-to-Value
Ratio exceeds 80%, the Prime Mortgage Loan is insured by or
subject to a commitment for mortgage insurance in an amount and on
terms and conditions that satisfy the underwriting standards of
Xxxxxx Xxx or Xxxxxxx Mac; or
C. A Government Mortgage Loan.
(ii) For a Second Mortgage Loan:
A. The credit of the obligor has been underwritten substantially
in accordance with Xxxxxx Mae or Xxxxxxx Mac underwriting
standards; and
B. Loan-to-Value Ratio not more than 100%.
(b) Interest Rate:
(i) Other Mortgage Loans: [***] over LIBOR
(ii) Aged Mortgage Loans: [***] over LIBOR
(c) Prime Sublimit: $24,000,000
(i) First Mortgage Loan: $24,000,000
(ii) Second Mortgage Loan: $12,000,000
(iii) Aged Mortgage Loans: $600,000
(d) Committed/Uncommitted:
(i) First Mortgage Loans: Purchase Commitment required
(ii) Second Mortgage Loans: Purchase Commitment NOT required
(e) Wet Settlement Advances: Permitted
(f) Aged Mortgage Loans: Permitted for First Mortgage Loans only
(g) Committed Advance Rate:
(i) First Mortgage Loan: [***] of the lesser of (i) the Mortgage
Note Amount or (ii) the Committed
Purchase Price
(ii) RFC Mortgage Loan: [***] of the lesser of (i) of the
Mortgage Note Amount or (ii) the
Committed Purchase Price
(h) Uncommitted Advance Rate: [***] of the Mortgage Note Amount
(i) Standard Warehouse Period: 90 days
(j) Aged Warehouse Period: 120 days
(k) Required Prepayments: All Mortgage Loans in warehouse 45 days
will be reduced by [***] of the
Mortgage Note Amount.
On the day a Pledged Loan becomes an
Aged Mortgage Loan, the Warehousing
Advance against such Pledged Loan
must be (a) repaid in full, to the
extent the Aged Mortgage Loan
Sublimit would be exceeded, or (b)
otherwise, reduced by of the [***]
Mortgage Note Amount.
2. SUBPRIME MORTGAGE LOAN
(a) Definition: A First Mortgage Loan or Second Mortgage Loan that has a risk
rating of "A-," "B" or "C" (determined using underwriting standards that comply
with industry standards in the sole judgment of Lender), and that is acceptable
for purchase by at least two Investors.
(b) Interest Rate:
(ii) Other Mortgage Loans: [***] over LIBOR
(ii) Aged Mortgage Loans: [***] over LIBOR
(c) Subprime Sublimit: (A) from May 26, 2004, to and including
June 4, 2004, $250,000,000, and
(B) thereafter, $200,000,000
(i) First Mortgage Loan: (A) from May 26, 2004, to and including
June 4, 2004, $250,000,000, and
(B) thereafter, $200,000,000
(ii) Second Mortgage Loan: $40,000,000
(iii) Aged Mortgage Loans: $10,000,000
(d) Committed/Uncommitted: Purchase Commitment NOT required
(e) Wet Settlement Advances: Permitted
(f) Aged Mortgage Loans: Permitted for First Mortgage Loans only
(g) Committed Advance Rate:
(i) RFC Mortgage Loan: [***] of the lesser of (i) of the
Mortgage Note Amount or (ii) the
Committed Purchase Price
(h) Uncommitted Advance Rate:
(i) First Mortgage Loan: [***] of the Mortgage Note Amount
(ii) Second Mortgage Loan: [***] of the Mortgage Note Amount
(i) Standard Warehouse Period: 90 days
(j) Aged Warehouse Period: 180 days
(k) Required Prepayments: All Mortgage Loans in warehouse 45 days
will be reduced by [***] of the
Mortgage Note Amount.
On the day a Pledged Loan becomes an
Aged Mortgage Loan, the Warehousing
Advance against such Pledged Loan
must be (a) repaid in full, to the
extent the Aged Mortgage Loan
Sublimit would be exceeded, or (b)
otherwise, reduced by [***] of the
Mortgage Note Amount. Thereafter,
the Warehousing Advance must be
reduced by [***] of the Mortgage Note
Amount.
3. HIGH LTV MORTGAGE LOAN
(a) Definition: A Second Mortgage Loan that meets the 125 Loan Program
eligibility criteria set forth in the GMAC-RFC Client Guide and for which an
AssetWise Certificate has been issued, and a First Mortgage Loan that meets the
Home Solution Program eligibility criteria set forth in the GMAC-RFC Client
Guide and for which an AssetWise Certificate has been issued.
(b) Interest Rate: [***] over LIBOR
(c) High LTV Sublimit: $1,000,000
(d) Committed/Uncommitted: Purchase Commitment from Lender
required
(e) Wet Settlement Advances: Permitted
(f) Aged Mortgage Loans: Not Permitted
(g) Committed Advance Rate:
(i) First Mortgage Loan: [***] of the lesser of (i) of the
Mortgage Note Amount or (ii) the
Committed Purchase Price
(ii) Second Mortgage Loan: [***] of the lesser of (i) of the
Mortgage Note Amount or (ii) the
Committed Purchase Price
(h) Standard Warehouse Period: 45 days
4. REPURCHASED MORTGAGE LOAN/NONPERFORMING MORTGAGE LOAN/REO PROPERTY
(a) Definitions:
Repurchased Mortgage Loan: A Mortgage Loan that has been repurchased
from an Investor or a Mortgage Pool pursuant to a Servicing
Contract.
Nonperforming Mortgage Loan: A First Mortgage Loan or a Second
Mortgage Loan that is not a High LTV Mortgage Loan and (i) is in the
process of foreclosure, (ii) is 60 days or more delinquent or (iii)
with respect to which the Warehousing Period has expired.
REO Property: An improved real property containing a 1- to 4-family
residence, which property is owned by Borrower as the result of a
foreclosure proceeding or the acceptance of a deed in lieu of
foreclosure, or has been purchased from an Investor to satisfy a
repurchase obligation of Borrower to the Investor.
(b) Interest Rate: [***] over LIBOR
(c) Sublimit: $2,400,000
(d) Committed/Uncommitted: Purchase Commitment NOT required
(e) Wet Settlement Advances: Not Permitted
(f) Aged Mortgage Loans: Not Permitted
(g) Advance Rate for Repurchased and
Nonperforming Mortgage Loans: [***] of the lesser of (i) Lender's
initial Warehousing Advance, (ii)
the unpaid principal balance, (iii)
the repurchase price, or (iv) the
Appraised Property Value or BPO
Value
(h) Advance Rate for REO Property: The lesser of (i) [***] Lender's
initial Warehousing Advance or (ii)
[***] of the Appraised Property Value
or BPO Value
(i) Standard Warehouse Period: 365 days
(j) Required Prepayments for Repurchased
and Nonperforming Mortgage Loans: [***] of the Mortgage Note Amount, paid
each month occurring more than 90 days
after the date of the Warehousing
Advance
(k) Required Prepayments for REO
Property: [***] of the initial Warehousing
Advance against an REO Property paid
each month occurring more than 90
days after the date of the
Warehousing Advance
EXHIBIT K
DIVERSIFIED BUSINESSES
H & K Collections, LLC
Oak Street Funding, LLC
