EXHIBIT 10.9
FOURTEENTH AMENDMENT
TO
WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT
FOURTEENTH AMENDMENT TO WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT
(this "Amendment") dated as of January 23, 2003, between ACCREDITED HOME
LENDERS, INC., a California corporation ("AHL"), ACCREDITED HOME CAPITAL, INC.,
a Delaware corporation ("AHC") (AHL AND AHC are sometimes collectively referred
to as "Borrowers") and RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
("Lender").
A. Borrowers and Lender have entered into a single family revolving warehouse
facility and a term loan facility as evidenced by a Warehousing Promissory
Note dated March 28, 2002, a First Amended and Restated Sublimit Promissory
Note dated December 28, 2001, and a First Amended and Restated Term Loan
Promissory Note dated December 28, 2001 (the "Notes"), and by a Warehousing
Credit, Term Loan and Security Agreement dated as of March 17, 1999, as
amended by a First Amendment to Warehousing Credit, Term Loan and Security
Agreement dated as of February 24, 2000, a Second Amendment to Warehousing
Credit, Term Loan and Security Agreement dated as July 12, 2000, a Third
Amendment to Warehousing Credit, Term Loan and Security Agreement dated as
of January 31, 2001, a Fourth Amendment to Warehousing Credit, Term Loan
and Security Agreement dated as of April 26, 2001, a Fifth Amendment to
Warehousing Credit, Term Loan and Security Agreement dated as of April 27,
2001, a Sixth Amendment to Warehousing Credit, Term Loan and Security
Agreement dated as of September 26, 2001, a Seventh Amendment to
Warehousing Credit, Term Loan and Security Agreement dated as of December
19, 2001, an Eighth Amendment to Warehousing Credit, Term Loan and Security
Agreement dated as of December 28, 2001, a Ninth Amendment to Warehousing
Credit, Term Loan and Security Agreement dated as of January 2, 2002, a
Tenth Amendment to Warehousing Credit, Term Loan and Security Agreement
dated as of March 12, 2002, a letter agreement dated May 14, 2002, an
Eleventh Amendment to Warehousing Credit, Term Loan and Security Agreement
dated as of August 2, 2002, a Twelfth Amendment to Warehousing Credit, Term
Loan and Security Agreement dated as of September 16, 2002 and a Thirteenth
Amendment to Warehousing Credit, Term Loan and Security Agreement dated as
of October 18, 2002 (as amended, the "Agreement").
B. Borrowers and Lender have agreed to extend the Warehousing Maturity Date
and the Term Loan Commitment Date, to extend the temporary increase the
Warehousing Commitment Amount and to amend certain other terms of the
Agreement, subject to the terms and conditions of this Amendment.
NOW, THEREFORE, the parties to this Amendment agree as follows:
1. 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.
2. Subject to Borrowers' satisfaction of the conditions set forth in Section
7, the "Effective Date" of this Amendment is January 31, 2003.
3. The definitions of "Term Loan Commitment Termination Date." "Warehousing
Commitment Amount" and "Warehousing Maturity Date" set forth in Section
1.1. of the Agreement are amended to read in their entireties as follows:
Accredited (13/th/ Amendment)
"Term Loan Commitment Termination Date" means the earliest of (a) the
close of business on May 31, 2003, as such date may be extended from
time to time as agreed to in writing by Borrower and Lender, (b) the
date 30 days after the date Borrower makes an initial public offering
of any of its capital stock, (c) the date 30 days after the
commencement of Early Amortization, and (d) the date the obligation of
Lender to make further Term Loan Advances hereunder is terminated
pursuant to Section 8.2 below.
"Warehousing Commitment Amount" means $94,500,000. Notwithstanding the
foregoing, during the period from January 31, 2003, to and including
May 31, 2003, the Warehousing Commitment Amount will be temporarily
increased to $137,500,000. On the first Business Day following
expiration of the temporary increase of the Warehousing Commitment
Amount, Borrower must repay to Lender the amount by which the
outstanding Warehousing Advances exceed the Warehousing Commitment
Amount.
"Warehousing Maturity Date" means the earlier of: (a) the close of
business on May 31, 2003, as such date may be extended from time to
time in writing by Lender, in its sole discretion, on which date the
Warehousing Commitment shall expire of its own term and without the
necessity of action by Lender, (b) 30 days after the commencement of
Early Amortization, and (c) the date the Warehousing Advances become
due and payable pursuant to Section 8.2 below.
4. Section 1.1 of the Agreement is amended to add the following definitions in
appropriate alphabetical order:
"▇▇▇▇▇▇▇ ▇▇▇▇▇ Facility" means the facility (in an aggregate amount
not to exceed $300,000,000) provided for in the Master Repurchase
Agreement, as amended, to be executed by Borrower and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Capital Inc. after the date of the Fourteenth Amendment to
Warehousing Credit, Term Loan and Security Agreement.
"▇▇▇▇▇▇▇ Sachs Facility" means the facility (in an aggregate amount
not to exceed $300,000,000) provided for in the Master Repurchase
Agreement, as amended, to be executed by Borrower and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company after the date of the Fourteenth Amendment to
Warehousing Credit, Term Loan and Security Agreement.
5. Section 2.1(b)(8) of the Agreement is amended to read in its entirety as
follows:
(8) No Ordinary Warehousing Advance will be made if, after giving
effect thereto, the aggregate amount of Ordinary Warehousing
Advances outstanding would exceed (i) $125,000,000, during the
period from January 31, 2003, to and including May 31, 2003, or
(ii) $82,000,000, at any other time, plus in each case any portion
of the Uncommitted Warehousing Amount as Lender, in its sole and
absolute discretion, elects to make available to Borrower (the
"Ordinary Warehousing Sublimit").
6. Section 7.2 of the Agreement is amended to read in its entirety as follows:
7.2 Sale or Pledge of Assets. Sell or otherwise dispose of any
existing or future Servicing Contracts of Borrower, pledge or
otherwise grant any Lien on any of its properties or assets
(including, without limitation, the Collateral and any Servicing
Contracts) other than (a) to Lender, (b) Liens in connection with
deposits or pledges to secure payment of workers' compensation,
unemployment insurance, old age pensions or other social security
obligations, in the ordinary course of business of Borrower or any
Subsidiary (c) Liens for taxes, fees, assessments and governmental
charges not delinquent or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established in accordance with GAAP, (d) encumbrances consisting of
zoning regulations, easements, rights of way, survey exceptions and
other similar restrictions on the
Accredited (14/th/ Amendment)
-2-
use of real property and minor irregularities in title thereto which
do not materially impair its use in operation of its business, (e)
Liens on equipment to secure Debt incurred solely to acquire such
equipment up to an aggregate amount of $1,500,000 in addition to Liens
outstanding as of the Closing Date, or with the prior written consent
of Lender (f) Liens on Mortgage Loans financed pursuant to the ▇▇▇▇▇▇
Facility; (g) Liens on Mortgage Loans financed pursuant to the
Household Facility; (h) Liens on Mortgage Loans financed pursuant to
the ▇▇▇▇▇▇ Facility; (i) Liens on Mortgage Loans financed pursuant to
the CDC Facility; (j) Liens on Mortgage Loans and REO properties
financed pursuant to the ▇▇▇▇▇▇ REO Facility; (k) Liens on Mortgage
Loans financed pursuant to the CSFB Facility; (l) Liens on Mortgage
Loans financed pursuant to the ▇▇▇▇▇▇▇ Sachs Facility; or (m) Liens on
Mortgage Loans financed pursuant to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Facility, or
omit to take any action required to keep any Servicing Contracts in
full force and effect; provided, however, that if no Default or Event
of Default has occurred and is continuing, servicing on individual
Mortgage Loans may be sold concurrently with and incidental to the
sale of such Mortgage Loans (with servicing released) in the ordinary
course of Borrower's business.
7. On or prior to the Effective Date, Borrowers must deliver to Lender (a) 2
executed originals of this Amendment; (b) an extension fee of $5,000; and
(c) a document production fee of $350.
8. Borrowers represent, warrant and agree that (a) there exists no Default or
Event of Default under the Transaction Documents, (b) the Transaction
Documents continue to be the legal, valid and binding agreements and
obligations of Borrowers, enforceable in accordance with their terms, as
modified by this Amendment, (c) Lender is not in default under any of the
Transaction Documents and Borrowers have no offset or defense to their
performance or obligations under any of the Transaction Documents, (d)
except for changes permitted by the terms of the Agreement, Borrowers'
representations and warranties contained in the Transaction Documents are
true, accurate and complete in all respects as of the Effective Date and
(e) there has been no material adverse change in Borrowers' financial
condition of Borrower from the date of the Agreement to the Effective Date.
9. Except as expressly modified by this Amendment, the Agreement is unchanged
and remains in full force and effect, and Borrowers ratify and reaffirm all
of their obligations under the Agreement and the other Transaction
Documents.
10. This Amendment may be executed in any number of counterparts, each of which
will be deemed an original, but all of which together constitute but one
and the same instrument.
[Remainder of this page left blank intentionally]
Accredited (14/th/ Amendment)
-3-
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.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: /s/ [ILLEGIBLE]
-----------------------------
Its: Director of Operations
----------------------------
ACCREDITED HOME CAPITAL, INC.,
a Delaware corporation
By: /s/ [ILLEGIBLE]
-----------------------------
Its: General Counsel
----------------------------
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: DIRECTOR
-----------------------------
Accredited (14/th/ Amendment)
-4-
--------------------------------------------------------------------------------
CONSENT
OF
GUARANTOR
--------------------------------------------------------------------------------
The undersigned, being the Guarantor under a Guaranty dated September 16, 2002
(the "Guaranty"), consents to the foregoing Amendment and the transactions
contemplated by it, and ratifies and reaffirms that its obligations under the
Guaranty include within the term "Guaranteed Debt" the indebtedness, obligations
and liabilities of Borrowers under this Amendment, the Agreement as modified by
this Amendment, the Notes and the other Loan Documents. Guarantor reaffirms that
its obligations under the Guaranty are separate and distinct from Borrowers'
obligations to Lender, and that its obligations under the Guaranty are in full
force and effect. Finally, Guarantor waives and agrees not to assert any
anti-deficiency protections or other rights as a defense to its obligations
under the Guaranty, all as set forth in the Guaranty, the terms of which are
incorporated into this Consent as if fully set forth in it.
Dated: 1-23, 2003
ACCREDITED HOME LENDERS HOLDING CO.,
a Delaware corporation
By: /s/ [ILLEGIBLE]
-----------------------------------
Its: General Counsel
----------------------------------
Accredited (14/th/ Amendment)
-5-
THIRTEENTH AMENDMENT
TO
WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT
THIRTEENTH AMENDMENT TO WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT
(this "Amendment") dated as of October 18, 2002, between ACCREDITED HOME
LENDERS, INC., a California corporation ("AHL"), ACCREDITED HOME CAPITAL, INC.,
a Delaware corporation ("AHC") (AHL and AHC are sometimes collectively referred
to as "Borrowers") and RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
("Lender").
A. Borrowers and Lender have entered into a single family revolving warehouse
facility and a term loan facility as evidenced by a Warehousing Promissory
Note dated March 28, 2002, a First Amended and Restated Sublimit Promissory
Note dated December 28, 2001, and a First Amended and Restated Term Loan
Promissory Note dated December 28, 2001 (the "Notes"), and by a Warehousing
Credit, Term Loan and Security Agreement dated as of March 17, 1999, as
amended by a First Amendment to Warehousing Credit, Term Loan and Security
Agreement dated as of February 24, 2000, a Second Amendment to Warehousing
Credit, Term Loan and Security Agreement dated as July 12, 2000, a Third
Amendment to Warehousing Credit, Term Loan and Security Agreement dated as
of January 31, 2001, a Fourth Amendment to Warehousing Credit, Term Loan
and Security Agreement dated as of April 26, 2001, a Fifth Amendment to
Warehousing Credit, Term Loan and Security Agreement dated as of April 27,
2001, a Sixth Amendment to Warehousing Credit, Term Loan and Security
Agreement dated as of September 26, 2001, a Seventh Amendment to
Warehousing Credit, Term Loan and Security Agreement dated as of December
19, 2001, an Eighth Amendment to Warehousing Credit, Term Loan and Security
Agreement dated as of December 28, 2001, a Ninth Amendment to Warehousing
Credit, Term Loan and Security Agreement dated as of January 2, 2002, a
Tenth Amendment to Warehousing Credit, Term Loan and Security Agreement
dated as of March 12, 2002, a letter agreement dated May 14, 2002, an
Eleventh Amendment to Warehousing Credit, Term Loan and Security Agreement
dated as of August 2, 2002 and a Twelfth Amendment to Warehousing Credit,
Term Loan and Security Agreement dated as of September 16, 2002 (as
amended, the "Agreement").
B. Borrowers and Lender have agreed to extend the Warehousing Maturity Date
and the Term Loan Commitment Date, to extend the temporary increase the
Warehousing Commitment Amount and to amend certain other terms of the
Agreement, subject to the terms and conditions of this Amendment.
NOW, THEREFORE, the parties to this Amendment agree as follows:
1. 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.
2. Subject to Borrowers' satisfaction of the conditions set forth in Section
11, the "Effective Date" of this Amendment is October 18, 2002.
3. The definitions of "Term Loan Commitment Termination Date," "Warehousing
Commitment Amount" and "Warehousing Maturity Date" set forth in Section
1.1. of the Agreement are amended to read in their entireties as follows:
"Term Loan Commitment Termination Date" means the earliest of (a) the
close of business on January 31, 2003, as such date may be extended
from time to time as agreed to in
writing by Borrower and Lender, (b) the date 30 days after the date
Borrower makes an initial public offering of any of its capital stock,
(c) the date 30 days after the commencement of Early Amortization, and
(d) the date the obligation of Lender to make further Term Loan
Advances hereunder is terminated pursuant to Section 8.2 below.
"Warehousing Commitment Amount" means $94,500,000. Notwithstanding the
foregoing, during the period from October 31, 2002, to and including
January 31, 2003, the Warehousing Commitment Amount will be
temporarily increased to $137,500,000. On the first Business Day
following expiration of the temporary increase of the Warehousing
Commitment Amount, Borrower must repay to Lender the amount by which
the outstanding Warehousing Advances exceed the Warehousing Commitment
Amount.
Warehousing Maturity Date" means the earlier of: (a) the close of
business on January 31, 2003, as such date may be extended from time
to time in writing by Lender, in its sole discretion, on which date
the Warehousing Commitment shall expire of its own term and without
the necessity of action by Lender, (b) 30 days after the commencement
of Early Amortization, and (c) the date the Warehousing Advances
become due and payable pursuant to Section 8.2 below.
4. Section 1.1 of the Agreement is amended to add the following definitions in
appropriate alphabetical order:
"Discontinued Loan" has the meaning set forth in the GMAC-RFC Client
Guide.
"Electronic Tracking Agreement" means an Electronic Tracking
Agreement, on the form prescribed by Lender, among Borrower, Lender,
MERS, and MERCORP, Inc.
"GMAC-RFC Client Guide" means the applicable loan purchase guide
issued by Lender, as the same may be amended or replaced.
"MERS" means Mortgage Electronic Registration Systems, Inc. and any
successor entity.
"Restriction List" and "Restriction Lists" means each and every list
of Persons to whom the Government of the United States prohibits or
otherwise restricts the provision of financial services. For the
purposes of this Agreement, Restriction Lists include the list of
Specially Designated Nationals and Blocked Persons established
pursuant to Executive Order 13224 (September 23, 2001) and maintained
by the Office of Foreign Assets Control, U.S. Department of the
Treasury, current as of the day the Restriction List is used for
purposes of comparison in accordance with the requirements of this
Agreement.
5. Section 2.l(b)(8) of the Agreement is amended to read in its entirety as
follows:
(8) No Ordinary Warehousing Advance will be made if, after giving
effect thereto, the aggregate amount of Ordinary Warehousing
Advances outstanding would exceed (i) $125,000,000, during the
period from October 31, 2002, to and including January 31, 2003,
or (ii) $82,000,000, at any other time, plus in each case any
portion of the Uncommitted Warehousing Amount as Lender, in its
sole and absolute discretion, elects to make available to Borrower
(the "Ordinary Warehousing Sublimit).
6. Section 5.15 of the Agreement is amended by adding the following new
subsection:
5.15(m) None of the mortgagors, guarantors or other obligors of
any Pledged Loan is a Person named in any Restriction List and to whom
the provision of financial services is prohibited or otherwise
restricted by applicable law
-2-
7. Section 6.13 of the Agreement is amended by adding the following new
subsections:
6.13(g) Prior to the origination by Borrower of any Mortgage
Loan to be registered on the MERS system, obtain the approval of
Lender and enter into an Electronic Tracking Agreement.
6.13(h) Compare the names of every mortgagor, guarantor and
other obligor of every Mortgage Loan, together with appropriate
identifying information concerning those Persons obtained by Borrower,
against every Restriction List, and make certain that none of the
mortgagors, guarantors or other obligors of any Mortgage Loan is a
Person named in any Restriction List and to whom the provision of
financial services is prohibited or otherwise restricted by
applicable law.
8. Exhibit C-SF to the Agreement is amended and restated in its entirety as
set forth in Exhibit C-SF to this Amendment. All references in the
Agreement and the other Transaction Documents to Exhibit C-SF are deemed
to refer to this new Exhibit C-SF.
9. Exhibit D-NP/REO to the Agreement is amended and restated in its entirety
as set forth in Exhibit D-NP/REO to this Amendment. All references in the
Agreement and the other Transaction Documents to Exhibit D-NP/REO are
deemed to refer to this new Exhibit D-NP/REO.
10. Exhibit D-SF to the Agreement is amended and restated in its entirety as
set forth in Exhibit D-SF to this Amendment. All references in the
Agreement and the other Transaction Documents to Exhibit D-SF are deemed to
refer to this new Exhibit D-SF.
11. On or prior to the Effective Date, Borrowers must deliver to Lender (a) 4
executed originals of this Amendment; (b) an extension fee of $5,000; and
(c) a document production fee of $350.
12. Borrowers represent, warrant and agree that (a) there exists no Default or
Event of Default under the Transaction Documents, (b) the Transaction
Documents continue to be the legal, valid and binding agreements and
obligations of Borrowers, enforceable in accordance with their terms, as
modified by this Amendment, (c) Lender is not in default under any of the
Transaction Documents and Borrowers have no offset or defense to their
performance or obligations under any of the Transaction Documents, (d)
except for changes permitted by the terms of the Agreement, Borrowers'
representations and warranties contained in the Transaction Documents are
true, accurate and complete in all respects as of the Effective Date and
(e) there has been no material adverse change in Borrowers' financial
condition of Borrower from the date of the Agreement to the Effective Data.
13. Except as expressly modified by this Amendment, the Agreement is
unchanged and remains in full force and effect, and Borrowers ratify and
reaffirm all of their obligations under the Agreement and the other
Transaction Documents.
14. This Amendment may be executed in any number of counterparts, each of
which will be deemed an original, but all of which together constitute but
one and the same instrument.
[Remainder of this page left blank intentionally]
-3-
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.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Its: EVP
----------------------------
ACCREDITED HOME CAPITAL, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Its: GENERAL COUNSEL
----------------------------
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By: /s/ L.L. ▇▇▇▇▇▇▇▇▇▇▇▇
-----------------------------
Its: MANAGING DIRECTOR
----------------------------
-4-
CONSENT
OF
GUARANTOR
The undersigned, being the Guarantor under a Guaranty dated September 16, 2002
(the "Guaranty"), consents to the foregoing Amendment and the transactions
contemplated by it, and ratifies and reaffirms that its obligations under the
Guaranty include within the term "Guaranteed Debt" the indebtedness, obligations
and liabilities of Borrowers under this Amendment, the Agreement as modified by
this Amendment, the Notes and the other Loan Documents. Guarantor reaffirms that
its obligations under the Guaranty are separate and distinct from Borrowers'
obligations to Lender, and that its obligations under the Guaranty are in full
force and effect. Finally, Guarantor waives and agrees not to assert any
anti-deficiency protections or other rights as a defense to its obligations
under the Guaranty, all as set forth in the Guaranty, the terms of which are
incorporated into this Consent as if fully set forth in it.
Dated: October 18, 2002
ACCREDITED HOME LENDERS HOLDING CO.,
a Delaware corporation
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Its: EVP
---------------------------------
-5-
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CONSENT
and
TWELFTH AMENDMENT
TO
WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT
--------------------------------------------------------------------------------
CONSENT AND TWELFTH AMENDMENT TO WAREHOUSING CREDIT, TERM LOAN AND SECURITY
AGREEMENT (this "Amendment") dated as of September 16, 2002, between ACCREDITED
HOME LENDERS, INC., a California corporation ("AHL"), ACCREDITED HOME CAPITAL,
INC., a Delaware corporation ("AHC") (AHL and AHC are sometimes collectively
referred to as "Borrower"), ACCREDITED HOME LENDERS HOLDING CO., a Delaware
corporation ("Parent"), and RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation ("Lender").
A. AHL, AHC and Lender have entered into a single family revolving warehouse
facility and a term loan facility as evidenced by a Warehousing Promissory
Note dated March 28, 2002, a First Amended and Restated Sublimit Promissory
Note dated December 28, 2001, and a First Amended and Restated Term Loan
Promissory Note dated December 28, 2001 (the "Notes"), and by a Warehousing
Credit, Term Loan and Security Agreement dated as of March 17, 1999, as
amended by a First Amendment to Warehousing Credit, Term Loan and Security
Agreement dated as of February 24, 2000, a Second Amendment to Warehousing
Credit, Term Loan and Security Agreement dated as July 12, 2000, a Third
Amendment to Warehousing Credit, Term Loan and Security Agreement dated as
of January 31, 2001, a Fourth Amendment to Warehousing Credit, Term Loan
and Security Agreement dated as of April 26, 2001, a Fifth Amendment to
Warehousing Credit, Term Loan and Security Agreement dated as of April 27,
2001, a Sixth Amendment to Warehousing Credit, Term Loan and Security
Agreement dated as of September 26, 2001, a Seventh Amendment to
Warehousing Credit, Term Loan and Security Agreement dated as of December
19, 2001, an Eighth Amendment to Warehousing Credit, Term Loan and Security
Agreement dated as of December 28, 2001, a Ninth Amendment to Warehousing
Credit, Term Loan and Security Agreement dated as of January 2, 2002, a
Tenth Amendment to Warehousing Credit, Term Loan and Security Agreement
dated as of March 12, 2002, a letter agreement dated May 14, 2002, and an
Eleventh Amendment to Warehousing Credit, Term Loan and Security Agreement
dated as of August 2, 2002 (as amended, the "Agreement").
▇. ▇▇▇ has notified Lender that (i) Parent proposes to amend and restate its
Certificate of Incorporation, (ii) AHL proposes to engage in a corporate
reorganization in which AHL Merger Sub, a California corporation and a
wholly owned subsidiary of Parent, will merge with and into AHL, with AHL
as the surviving corporation (the "Merger"), as the result of which AHL and
AHC will become direct and indirect, respectively, wholly owned
subsidiaries of Parent, and (iii) following consummation of the Merger,
Parent proposes to make an initial public offering ("IPO") of shares of
Parent's common stock.
C. Under Section 7.3 of the Agreement, the Merger is subject to the prior
approval of Lender and, in the absence of a consent or waiver by Lender,
consummation of the Merger would result in one or more Events of Default
under the Agreement.
▇. ▇▇▇, AHC and Parent have requested that Lender consent to the Merger and,
in connection with such consent, to amend certain terms of the Agreement,
all as more fully set out in, and subject to the terms and conditions of,
this Amendment.
NOW, THEREFORE, the parties to this Amendment agree as follows:
Accredited (12/th/ Amendment) -1-
1. Lender consents to the Merger, subject to:
a. Satisfactory completion of a fairness hearing pursuant to Section
25142 of the California Corporate Securities Law of 1968, as amended
(the "Hearing"), by the California Commissioner of Corporations (the
"Commissioner");
b. The issuance of a permit by the Commissioner (the "Permit") that
states that Parent is qualified to offer, sell and issue the
securities described in the application for the Permit (the
"Application") and the issuance by the Commissioner of a Certificate
of Issuance of Permit (the "Certificate") that states that the terms
and conditions of the proposed offer and sale of securities as
described in the Application are fair and are approved;
c. Lender's receipt of a copy of the Permit and the Certificate;
d. Lender's receipt of a copy of Parent's amended and restated
Certificate of Incorporation, certified by the Delaware Secretary of
State;
e. Lender's receipt of documentation evidencing the fact that the
amendment and restatement of Parent's Certificate of Incorporation and
the Merger have been approved by Parent's and AHL's respective Boards
of Directors and shareholders;
f. Lender's receipt of four executed originals of this Amendment;
g. Lender's receipt of four executed originals Consent, Fifth Amendment
to Loan and Security Agreement (Convertible Debt) and First Amendment
to Floating-Rate Convertible Debenture;
h. Lender's receipt of four executed originals of the Parent Guaranty (as
defined below);
i. Lender's receipt of an amendment fee of $5,000; and
j. Lender's receipt of a document production fee of $1,500.
2. Effective simultaneously with the consummation of the Merger:
a. The definition of "Loan Documents" set forth in Section 1.1. of the
Agreement shall be amended to read in its entirety as follows:
"Loan Documents" means this Agreement, the Notes, any agreement
of Borrower relating to Subordinated Debt, the Parent Guaranty, and
each other document, instrument or agreement executed by Borrower in
connection herewith or therewith, as any of the same may be amended,
restated, renewed or replaced from time to time.
b. Section 1.1 of the Agreement shall be amended to add, in appropriate
alphabetical order, definitions of "Parent" and "Parent Guaranty" to
read in their entireties as follows:
"Parent" means Accredited Home Lenders Holding Co., a Delaware
corporation.
"Parent Guaranty" means the Guaranty of Parent dated September
16, 2002, as the same may be amended, restated, renewed or replaced
from time to time, pursuant to which Parent guarantees the payment and
performance of Borrower's Obligations under this Agreement, the
Debenture, and the other Transaction Documents.
3. In the event that Lender, in its sole discretion, executes and delivers an
underwriting agreement with respect to the IPO and the terms and conditions
of Lender's participation therein (the
"Underwriting Agreement"), then, simultaneously with the closing of the IPO
on the terms and conditions specified in the Underwriting Agreement (but
not otherwise), Lender shall be deemed to have consented to the
consummation of the IPO and the Agreement shall be amended as follows:
a. Section 8.1(e) of the Agreement shall be amended to read in its
entirety as follows:
8.1(e) Borrower shall default in the performance of or compliance
with any term contained in this Agreement or any other Transaction
Document (but excluding any Transaction Document that has expired or
been terminated and is no longer in effect) other than those referred
to above in Subsections 8.1(a), 8.1(c) or 8.1(d) and such default
shall not have been remedied or waived within thirty (30) days after
the earliest of (i) receipt by Borrower of Notice from Lender of such
default, (ii) receipt by Lender of Notice from Borrower of such
default, or (iii) the date Borrower should have notified Lender of
such default pursuant to Section 6.6(c); or
b. Section 8.1(n) of the Agreement shall be amended to read in its
entirety as follows:
8.1(n) [INTENTIONALLY OMITTED]
c. Article 12 of the Agreement shall be amended by adding new Sections
12.14 and 12.15 thereto, to read in their entireties as follows:
12.14 Confidentiality of Borrower Information
Lender will use reasonable efforts to assure that information about
Borrowers and their operations, affairs and financial condition, not
generally disclosed to the public or to trade and other creditors,
which is furnished to Lender pursuant to the provisions of this
Agreement is used only for the purposes of this Agreement and any
other relationship between Borrowers and Lender and will not be
divulged to any Person other than Lender, its Affiliates and their
respective officers, directors, employees and agents, except: (a) to
their attorneys and accountants, (b) in connection with the
enforcement of the rights of Lender under the Loan Documents, the
Transaction Documents or otherwise in connection with applicable
litigation, (c) in connection with assignments and participations and
the solicitation of prospective Participants referred to in Section
12.5, (d) if such information is generally available to the public
other than as a result of disclosure by Lender, (e) to any direct or
indirect contractual counterparty in any hedging arrangement or such
contractual counterparty's professional advisor, (f) to any rating
agency that requires information about Lender's loan portfolio in
connection with ratings issued with respect to Lender or an Affiliate
of Lender and (g) as may otherwise be required or requested by any
regulatory authority having jurisdiction over Lender or by any
applicable law, rule, regulation or judicial process. Neither Lender
nor its Affiliates nor any Participant will incur any liability to
Borrowers by reason of any disclosure permitted by this Section.
12.15 Waiver of Punitive, Consequential, Special or Indirect Damages
BORROWERS WAIVE ANY RIGHT THEY MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES FROM LENDER OR ANY OF
LENDER'S AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS WITH
RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING,
CLAIM OR COUNTERCLAIM BROUGHT BY BORROWERS AGAINST LENDER OR ANY OF
LENDER'S AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS WITH
RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT. THIS
WAIVER OF THE RIGHT TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL OR
INDIRECT DAMAGES IS KNOWINGLY AND VOLUNTARILY GIVEN BY BORROWERS, AND
IS INTENDED TO ENCOMPASS EACH INSTANCE AND EACH ISSUE FOR WHICH THE
RIGHT TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES
WOULD OTHERWISE APPLY. LENDER IS AUTHORIZED AND DIRECTED TO SUBMIT
THIS AGREEMENT TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT
MATTER AND THE PARTIES TO THIS AGREEMENT AS CONCLUSIVE EVIDENCE OF
THIS WAIVER OF THE RIGHT TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL OR
INDIRECT DAMAGES.
4. Each of AHL, AHC and Parent represents, warrants and agrees that:
a. There does not exist as of the date of this Amendment, and there will
not exist as of the consummation of the Merger, any Default or Event
of Default under the Transaction Documents;
b. The Transaction Documents continue as of the date of this Amendment,
and will continue as of the consummation of the Merger, to be the
legal, valid and binding agreements and obligations of AHL,
enforceable in accordance with their terms, as modified by this
Amendment;
▇. ▇▇▇ is not as of the date of this Amendment, and will not be as of
the consummation of the Merger, in default under any of the
Transaction Documents and AHL has as of the date of this Amendment,
and will have as of the consummation of the Merger, no offset or
defense to its performance or obligations under any of the
Transaction Documents;
d. Except for changes permitted by the terms of the Agreement, AHL's
representations and warranties contained in the Transaction Documents
are as of the date of this Amendment, and will as of the consummation
of the Merger be, true, accurate and complete in all respects; and
e. There has been as of the date of this Amendment, and will have been
as of the consummation of the Merger, no material adverse change in
AHL's financial condition from the date of the Agreement.
5. 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.
6. Except as expressly modified by this Amendment, the Agreement is unchanged
and remains in full force and effect, and each of AHL and AHC ratifies and
reaffirms all of its obligations under the Agreement and the other
Transaction Documents.
7. Except as specifically set forth in this Amendment, Lender's consent to the
Merger shall not be deemed a consent to the breach by AHL or AHC of any
other covenants or agreements contained in the Agreement or any other Loan
Document with respect to the Merger or any other transaction or matter.
AHL, AHC and Parent further agree that the consents set forth in this
Amendment are limited to the precise meaning of the words as written and
shall not be deemed (i) to be a consent or consents to any waiver or
modification of any other term or condition of the Agreement or any other
Loan Document or (ii) to prejudice any right or remedy that Lender may now
have or may in the future have under or in connection with the Agreement or
any other Loan Document other than with respect to the matters for which
the consents in this Amendment have been provided. Except
as expressly set forth in this Amendment, the consents described herein do
not alter, affect, release or prejudice in any way any of AHL's or AHC's
obligations under the Agreement and the other Loan Documents.
8. This Amendment may be executed in any number of counterparts, each of which
will be deemed an original, but all of which together constitute but one
and the same instrument.
IN WITNESS WHEREOF, AHL, AHC, Parent and Lender have caused this Amendment to be
duly executed on their behalf by their duly authorized officers as of the day
and year specified above.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Its: Executive Vice President
-------------------------------------------
ACCREDITED HOME CAPITAL, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Its: General Counsel, Assistant Vice President
and Assistant Secretary
-------------------------------------------
ACCREDITED HOME LENDERS HOLDING CO.,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Its: Chief Executive Officer
-------------------------------------------
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Director
--------------------------------------------------------------------------------
ELEVENTH AMENDMENT
TO
WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT
--------------------------------------------------------------------------------
ELEVENTH AMENDMENT TO WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT (this
"Amendment") dated as of July 31, 2002, between ACCREDITED HOME LENDERS, INC., a
California corporation ("AHL"), ACCREDITED HOME CAPITAL, INC., a Delaware
corporation ("AHC") (AHL and AHC are collectively referred to as "Borrower") and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation ("Lender").
A. Borrower and Lender have entered into a single family revolving warehouse
facility and a term loan facility as evidenced by a Warehousing Promissory
Note dated March 28, 2002, a First Amended and Restated Sublimit Promissory
Note dated December 28, 2001, and a First Amended and Restated Term Loan
Promissory Note dated December 28, 2001 (the "Notes"), and by a Warehousing
Credit, Term Loan and Security Agreement dated as of March 17, 1999, as
amended by a First Amendment to Warehousing Credit, Term Loan and Security
Agreement dated as of February 24, 2000, a Second Amendment to Warehousing
Credit, Term Loan and Security Agreement dated as July 12, 2000, a Third
Amendment to Warehousing Credit, Term Loan and Security Agreement dated as
of January 31, 2001, a Fourth Amendment to Warehousing Credit, Term Loan
and Security Agreement dated as of April 26, 2001, a Fifth Amendment to
Warehousing Credit, Term Loan and Security Agreement dated as of April 27,
2001, a Sixth Amendment to Warehousing Credit, Term Loan and Security
Agreement dated as of September 26, 2001, a Seventh Amendment to
Warehousing Credit, Term Loan and Security Agreement dated as of December
19, 2001, an Eighth Amendment to Warehousing Credit, Term Loan and Security
Agreement dated as of December 28, 2001, a Ninth Amendment to Warehousing
Credit, Term Loan and Security Agreement dated as of January 2, 2002, a
Tenth Amendment to Warehousing Credit, Term Loan and Security Agreement
dated as of March 12, 2002, and a letter agreement dated May 14, 2002 (as
amended, the "Agreement").
B. Borrower and Lender have agreed to extend the Warehousing Maturity Date and
the Term Loan Commitment Date, to extend the temporary increase the
Warehousing Commitment Amount and to amend certain other terms of the
Agreement, subject to the terms and conditions of this Amendment.
NOW, THEREFORE, the parties to this Amendment agree as follows:
1. 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.
2. Subject to Borrower's satisfaction of the conditions set forth in Section
9, the "Effective Date" of this Amendment is July 31, 2002.
3. The definitions of "Term Loan Commitment Termination Date," "Warehousinq
Commitment Amount" and "Warehousinq Maturity Date" set forth in Section
1.1. of the Agreement are amended to read in their entireties as follows:
"Term Loan Commitment Termination Date" means the earliest of (a) the
close of business on October 31, 2002, as such date may be extended
from time to time as agreed to in writing by Borrower and Lender, (b)
the date 30 days after the date Borrower makes an initial public
offering of any of its capital stock, (c) the date 30 days after the
commencement
-1-
of Early Amortization, and (d) the date the obligation of Lender to
make further Term Loan Advances hereunder is terminated pursuant to
Section 8.2 below.
"Warehousing Commitment Amount" means $94,500,000. Notwithstanding the
foregoing, during the period from July 31, 2002, to and including
October 31, 2002, the Warehousing Commitment Amount will be
temporarily increased to $137,500,000. On the first Business Day
following expiration of the temporary increase of the Warehousing
Commitment Amount, Borrower must repay to Lender the amount by which
the outstanding Warehousing Advances exceed the Warehousing Commitment
Amount.
"Warehousing Maturity Date" means the earlier of: (a) the close of
business on October 31, 2002, as such date may be extended from time
to time in writing by Lender, in its sole discretion, on which date
the Warehousing Commitment shall expire of its own term and without
the necessity of action by Lender, (b) 30 days after the commencement
of Early Amortization, and (c) the date the Warehousing Advances
become due and payable pursuant to Section 8.2 below.
4. Section 1.1 of the Agreement is amended to add, in appropriate alphabetical
order, definitions of "CDC Facility" and "▇▇▇▇▇▇ REO Facility" to read in
their entireties as follows:
"CDC Facility" means the facility provided for in the Master
Repurchase Agreement dated as of April 12, 2002, as amended, between
Borrower and CDC Mortgage Capital Inc.
"▇▇▇▇▇▇ REO Facility" means the facility provided for in the Master
Repurchase Agreement Governing Purchases and Sales of Mortgage Loans
dated as of March 1, 2002, as amended, between Borrower and ▇▇▇▇▇▇
Commercial Paper Inc.
5. Section 2.1 (b)(8) of the Agreement is amended to read in its entirety as
follows:
(8) No Ordinary Warehousing Advance will be made if, after giving
effect thereto, the aggregate amount of Ordinary Warehousing
Advances outstanding would exceed (i) $125,000,000, during the
period from March 17, 2002, to and including January 31, 2003, or
(ii) $82,000,000, at any other time, plus in each case any
portion of the Uncommitted Warehousing Amount as Lender, in its
sole and absolute discretion, elects to make available to
Borrower (the "Ordinary Warehousing Sublimit").
6. Section 7.2 of the Agreement is amended to read in its entirety as follows:
7.2 Sale or Pledge of Assets. Sell or otherwise dispose of any
existing or future Servicing Contracts of the Company; pledge or
otherwise grant any Lien on any of its properties or assets
(including, without limitation, the Collateral and any Servicing
Contracts) other than (a) to Lender, (b) Liens in connection with
deposits or pledges to secure payment of workers' compensation,
unemployment insurance, old age pensions or other social security
obligations, in the ordinary course of business of Borrower or any
Subsidiary, (c) Liens for taxes, fees, assessments and governmental
charges not delinquent or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established in accordance with GAAP, (d) encumbrances consisting of
zoning regulations, easements, rights of way, survey exceptions and
other similar restrictions on the use of real property and minor
irregularities in title thereto which do not materially impair its use
in operation of its business, (e) Liens on equipment to secure Debt
incurred solely to acquire such equipment up to an aggregate amount of
$1,500,000 in addition to Liens outstanding as of the Closing Date, or
with the prior written consent of Lender, (f) Liens on Mortgage Loans
financed pursuant to the ▇▇▇▇▇▇ Facility; (g) Liens on Mortgage Loans
financed pursuant to the Household Facility; (h) Liens on Mortgage
Loans financed pursuant to the ▇▇▇▇▇▇ Facility; (i) Liens on Mortgage
Loans financed pursuant to
-2-
the CDC Facility; or (j) Liens on Mortgage Loans and REO properties
financed pursuant to the ▇▇▇▇▇▇ REO Facility, or omit to take any
action required to keep any Servicing Contracts in full force and
effect; provided, however, that if no Default or Event of Default has
occurred and is continuing, servicing on individual Mortgage Loans may
be sold concurrently with and incidental to the sale of such Mortgage
Loans (with servicing released) in the ordinary course of the
Company's business.
7. Section 7.6 of the Agreement is amended to read in its entirety as follows:
7.6 Debt to Tangible Net Worth Ratio. Permit the ratio of Debt
(excluding, for this purpose only, (i) Debt arising under the Hedging
Arrangements, to the extent of assets arising under the same Hedging
Arrangements and (ii) Debt, other than any related Term Loan Advances,
associated with any Securitization Transaction for which Borrower
seeks and obtains financing treatment under FASB 140) to Tangible Net
Worth of the Company (and its Subsidiaries, on a consolidated basis)
at any time to exceed 11 to 1.
8. Borrower entered into master repurchase agreements (the "Repurchase
Aqreements") with ▇▇▇▇▇▇ Commercial Paper Inc. and CDC Mortgage Capital
Inc. on March 1, 2002 and April 12, 2002, respectively, without the prior
written consent of Lender in violation of Section 7.2 of the Agreement (the
"Existing Events of Default"). Pursuant to Section 8.1(c) of the Agreement,
Borrower's failure to obtain Lender's prior written consent before entering
into the Repurchase Agreements is an Event of Default entitled Lender to
exercise all rights, remedies and powers that it has under the Agreement
and the other Transaction Documents, including the right to cease making
Advances to Borrower and the right to accelerate the Obligations. Lender
agrees to waive its default rights with respect to the Existing Events of
Default. This waiver applies only to the Existing Events of Default; it is
not a waiver of any subsequent breach of the Section 7.2 of the Agreement,
nor is it a waiver of any breach of any other provision of the Agreement or
any other Transaction Document. Notwithstanding the foregoing, Lender
reserves all of the rights, remedies and powers available to Lender under
the Agreement, the Notes and the other Transaction Documents, including the
right to cease making Advances to Borrower and the right to accelerate the
Obligations, if any other Default or Event of Default occurs under the
Agreement or any other Transaction Document.
9. On or prior to the Effective Date, Borrower must deliver to Lender (a) 4
executed originals of this Amendment; (b) an extension fee of and
(c) a document production fee of
10. Borrower represents, warrants and agrees that (a) except for the Existing
Events of Default, there exists no Default or Event of Default under the
Transaction Documents, (b) the Transaction 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 Transaction Documents and
Borrower has no offset or defense to its performance or obligations under
any of the Transaction Documents, (d) except for changes permitted by the
terms of the Agreement, Borrower's representations and warranties contained
in the Transaction 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 of Borrower from the date
of the Agreement to the Effective Date.
11. Except as expressly modified by this Amendment, 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 Transaction
Documents.
12. This Amendment may be executed in any number of counterparts, each of which
will be deemed an original, but all of which together constitute but one
and the same instrument.
-3-
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.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By:_________________________
Its:________________________
ACCREDITED HOME CAPITAL, INC.,
a Delaware corporation
By:_________________________
Its:________________________
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:_________________________
Its:________________________
-4-
[LETTERHEAD OF ACCREDITED HOME LENDERS]
VIA FACSIMILE @ (▇▇▇) ▇▇▇-▇▇▇▇ AND REGULAR MAIL
May 15,2002
Residential Funding Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇ Nomura
Re: Warehousing Credit, Term Loan and Security Agreement Dated March 17, 1999,
as Amended (the "Agreement") Among Residential Funding Corporation ("RFC"),
Accredited Home Lenders, Inc. ("AHL") and Accredited Home Capital, Inc.
("AHC")
Dear ▇▇▇▇▇▇▇▇:
Included with the facsimile transmission of this letter is a copy of May 14,
2002 extension letter with respect to the above-referenced agreement, as
executed by an authorized officer of each of AHL and AHC. A copy bearing the
original signature of each such officer is enclosed with the original of this
letter.
Thank you for your courtesy in connection with this matter, and please call if
you have any questions.
Very truly yours,
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
General Counsel
Attachment/Enclosure
[LETTERHEAD OF GMAC Residential Funding]
May 14,2002
VIA FEDERAL EXPRESS
ACCREDITED HOME LENDERS, INC. and
ACCREDITED HOME CAPITAL, INC.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇, Executive Vice President
Re: Warehousing Credit, Term Loan and Security Agreement dated as of March
17, 1999, as amended or supplemented, the "Agreement") by and between
RESIDENTIAL FUNDING CORPORATION ("Lender") and ACCREDITED HOME
LENDERS, INC. and ACCREDITED HOME CAPITAL, INC. (collectively the
"Borrower")
Ladies and Gentlemen:
All capitalized terms used in this letter and not otherwise defined below
are defined in the Agreement.
The Borrower has requested that Lender extend the following:
(a) the Term Loan Commitment Termination Date to July 31,2002; and
(b) the Warehousing Maturity Date to July 31,2002; and
(c) the temporary increase of the Warehousing Commitment Amount to
$137,500,000 until July 30,2002; and
(d) the temporary increase of the Ordinary Warehousing Sublimit to
$125,000,000 until July 30, 2002.
In consideration of the mutual covenants, agreements and conditions set
forth herein and in the Agreement, and for other good and valuable
consideration, the Lender has agreed to these extensions.
Except as hereby expressly modified, the Agreement shall be otherwise
unchanged and shall remain in full force and effect.
This extension of the Term Loan Commitment Termination Date, the
Warehousing Maturity Date, the temporary increase of the Warehousing Commitment
Amount and the temporary increase of the Ordinary Warehousing Sublimit shall be
effective only upon receipt by Lender of a copy of this letter acknowledged by
Borrower.
Very truly yours,
RESIDENTIAL FUNDING CORPORATION
By: /s/ [ILLEGIBLE]
---------------------------
Its: Director
--------------------------
Accredited Home Lenders, Inc.
Accredited Home Capital, Inc.
May 14, 2002
Page 2
The 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 the
Borrower enforceable in accordance with their terms, as modified herein, (c) the
Lender is not in default under any of the Loan Documents and the Borrower has no
offset or defense to its performance or obligations under any of the Loan
Documents, (d) the representations contained in the Loan Documents remain true
and accurate in all respects, and (e) there has been no material adverse change
in the financial condition of the Borrower from the date of the Agreement to the
date of this letter agreement.
ACKNOWLEDGED AND ACCEPTED THIS
15th DAY OF MAY 2002.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: [ILLEGIBLE]
---------------------------
Its: Exec VP
--------------------------
ACCREDITED HOME CAPITAL, INC.,
a Delaware corporation
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Its: Ass't VP & Ass't Sec'y
--------------------------
--------------------------------------------------------------------------------
LEGAL FEE STATEMENT
--------------------------------------------------------------------------------
INVOICE DATE: May 10, 2002
CUSTOMER: ACCREDITED HOME LENDERS, INC. and ACCREDITED HOME CAPITAL, INC.
Re: Legal document preparation fee for the Extension Letter to July 31, 2002,
for the Warehousing Credit, Term Loan and Security Agreement dated March
17, 1999, by and between ACCREDITED HOME LENDERS, INC. and ACCREDITED HOME
CAPITAL, INC. and RESIDENTIAL FUNDING CORPORATION.
--------------------------------------------------------------------------------
TOTAL AMOUNT NOW DUE $125.00
--------------------------------------------------------------------------------
ALL PAYMENTS SHOULD BE WIRE TRANSFERRED TO:
BANK ONE, NA
ACCOUNT NO. ▇▇▇▇▇▇▇ - INTEREST AND FEE
ACCOUNT
ABA - ▇▇▇▇▇▇▇▇▇
ATTENTION: ▇▇▇▇ ▇▇▇▇▇
OR SENT TO:
RESIDENTIAL FUNDING CORPORATION
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, DIRECTOR
(LETTERHEAD OF GMAC Residential Funding)
March 21, 2002
Accredited Home Lenders, Inc.
Accredited Home Capital, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ #▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇, Executive Vice President
Re: Warehousing Credit, Term Loan and Security Agreement dated March 17,
1999 (the "Agreement") by and between ACCREDITED HOME LENDERS, INC., a
California corporation and ACCREDITED HOME CAPITAL, INC., a Delaware
corporation, and RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation as amended and restated (the "Agreement").
Gentlemen:
As we discussed, at the opening of business on March 28, 2002 (the "New
Note Date"), Lender will make new Warehousing Advances against all of the
Pledged Loans and Pledged Securities then being held as Collateral pursuant to
the Agreement, and use the proceeds of those Warehousing Advances to repay the
previously outstanding Warehousing Advances made against those Pledged Loans and
Pledged Securities. All Warehousing Advances made on or after the New Note Date
(including the new Warehousing Advances referred to above) will be evidenced by
the Warehousing Promissory Note enclosed with this letter (the "New Note"),
rather than the Fourth Amended and Restated Warehousing Promissory Note dated as
of December 31, 2001 (the "Existing Note"). Within 10 Business Days after the
New Note Date, the Existing Note will be marked cancelled and returned to you.
From and after the New Note Date, all references in the Agreement to the
"Warehousing Note" shall be deemed to refer to the New Note.
If the foregoing is acceptable to you, please execute the New Note and
forward it to ▇▇▇▇ ▇▇▇▇, Managing Director, Residential Funding Corporation,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ for delivery on or before
March 27, 2002. If we have not received the enclosed Warehousing Promissory Note
from you by that date, the transactions described in the preceding paragraph
will not occur, and we will notify you of that fact.
Thank you for your assistance with this transition, which will enable us to
continue providing for your warehouse lending needs. We look forward to
continuing our relationship with you.
Very truly yours,
RESIDENTIAL FUNDING CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Director
--------------------------
--------------------------------------------------------------------------------
WAREHOUSING PROMISSORY NOTE
--------------------------------------------------------------------------------
Date: March 28, 2002
FOR VALUE RECEIVED, the undersigned, ACCREDITED HOME LENDERS, INC,, a California
corporation ("AHL") and ACCREDITED HOME CAPITAL, INC., a Delaware corporation
("AHC") (AHL and AHC are collectively referred to as the "Borrower" and
individually, as "Co-Borrower") promise to pay to the order of RESIDENTIAL
FUNDING CORPORATION, a Delaware corporation ("Lender" or, together with its
successors and assigns, "Holder") whose principal place of business is ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other
place as the Holder may designate from time to time, (i) a principal sum equal
to the amount of Warehousing Advances outstanding under the Agreement (as that
term is defined below), (ii) interest on that amount from the date of each
Warehousing Advance until repaid in full, and (iii) all other fees, charges and
other Obligations due under the Agreement (including reasonable attorneys' fees
and expenses incurred in connection with the collection of this Note), at the
rates and at the times set forth in the Agreement. All payments under this Note
and the Agreement must be made in lawful money of the United States and in
immediately available funds.
This Note evidences a line of credit and is the Warehousing Note referred to in
that certain Warehousing Credit, Term Loan and Security Agreement dated March
17, 1999, between Borrower and Lender (as amended, restated, renewed or
replaced, the "Agreement"). Reference is made to the Agreement (which is
incorporated by reference as fully and with the same effect as if set forth at
length in this Note) for a description of the Collateral and a statement of (a)
the covenants and agreements made by Borrower, (b) the rights and remedies
granted to Lender and (c) the other matters governed by the Agreement.
Capitalized terms not otherwise defined in this Note have the meanings set forth
in the Agreement.
In addition to principal, interest, fees and other charges payable by Borrower
under this Note and the Agreement, Borrower must pay all out-of-pocket costs and
expenses of Lender, including reasonable fees, service charges and disbursements
of counsel (including allocated costs of internal counsel), in connection with
the enforcement and collection of this Note.
Borrower waives demand, notice, protest and presentment in connection with
collection of amounts outstanding under this Note.
The promises and agreements herein shall be construed to be and are hereby
declared to be the joint and several promises and agreements of each Co-Borrower
and shall constitute the joint and several obligation of each Co-Borrower and
shall be fully binding upon and enforceable against each Co-Borrower. The
release of any party to this Note shall not affect or release the joint and
several liability of any other party. The Lender may at its option enforce this
Note against one or all of the Co-Borrower, and the Lender shall not be required
to resort to enforcement against each Co-Borrower and the failure to proceed
against or join each Co-Borrower shall not affect the joint and several
liability of each Co-Borrower.
1
This Note is governed by the laws of the State of Minnesota, without reference
to its principles or conflicts of laws.
IN WITNESS WHEREOF, Borrower has executed this Note as of the day and year first
above written.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By:_________________________________
Its:________________________________
ACCREDITED HOME CAPITAL, INC..,
a Delaware corporation
By:_________________________________
Its:________________________________
2
TENTH AMENDMENT
TO
WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT
THIS TENTH AMENDMENT TO WAREHOUSING CREDIT, TERM LOAN AND SECURITY
AGREEMENT (this "Amendment") is entered into as of this 12th day of March 2002,
by and between ACCREDITED HOME LENDERS, INC., a California corporation ("AHL")
and ACCREDITED HOME CAPITAL, INC., a Delaware corporation ("AHC") (AHL and AHC
are collectively referred to as "Borrower") and RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation ("Lender").
WHEREAS, Borrower and Lender have entered into a single family revolving
warehouse facility and a term loan facility as evidenced by a Fourth Amended and
Restated Warehousing Promissory Note dated December 31, 2001, a First Amended
and Restated Sublimit Promissory Note dated December 28, 2001, and a First
Amended and Restated Term Loan Promissory Note dated December 28, 2001 (the
"Notes"), and by a Warehousing Credit, Term Loan and Security Agreement dated as
of March 17, 1999, as amended by that certain First Amendment to Warehousing
Credit, Term, Loan and Security Agreement dated as of February 24, 2000, that
certain Second Amendment to Warehousing Credit, Term Loan and Security Agreement
dated as July 12, 2000, that certain Third Amendment to Warehousing Credit, Term
Loan and Security Agreement dated as of January 31, 2001, that certain Fourth
Amendment to Warehousing Credit, Term Loan and Security Agreement dated as of
April 26, 2001, that certain Fifth Amendment to Warehousing Credit, Term Loan
and Security Agreement dated as of April 27, 2001, that certain Sixth Amendment
to Warehousing Credit, Term Loan and Security Agreement dated as of September
26, 2001, that certain Seventh Amendment to Warehousing Credit, Term Loan and
Security Agreement dated as of December 19, 2001, that certain Eighth Amendment
to Warehousing Credit, Term Loan and Security Agreement dated as of December 28,
2001, and that certain Ninth Amendment to Warehousing Credit, Term Loan and
Security Agreement dated as of January 2, 2002 (as amended hereby and as the
same may hereafter be amended, supplemented, or otherwise modified from time to
time, the "Agreement"); and
WHEREAS, Borrower has asked that Lender extend the Warehousing Maturity
Date, temporarily increase the Warehousing Commitment Amount and amend certain
terms of the Agreement, and Lender has agreed to such extension, temporary
increase and amendment, subject to the terms and conditions of this Amendment.
NOW, THEREFORE, for and in consideration of the foregoing and of the mutual
covenants, agreements and conditions hereinafter set forth and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
All capitalized terms used herein and not otherwise defined shall have
their respective meanings set forth in the Agreement.
1. Upon satisfaction of the conditions set forth in Section 8 of this
Amendment, the "Effective Date" of this Amendment shall be March 18, 2002,
except for Section 4 of this Amendment, the Effective Date of which shall
be December 31, 2001.
2 Section 1.1 of the Agreement is amended to delete the definitions of "Term
Loan Commitment Termination Date," "Warehousinq Commitment Amount" and
"Warehousing Maturity Date" in their entirety, replacing them with the
following definitions:
"Tern Loan Commitment Termination Date" means the earliest of (a) the
close of business on May 17, 2002, as such date may be extended from
time to time as agreed to in writing by Borrower and Lender, (b) the
date 30 days after the date Borrower makes an initial public offering
of any of its capital stock, (c) the date 30 days after the
1
commencement of Early Amortization, and (d) the date the obligation of
Lender to make further Term Loan Advances hereunder is terminated
pursuant to Section 8.2 below.
"Warehousinq Commitment Amount" means $94,500,000. Notwithstanding the
foregoing, during the period from March 17, 2002, to and including May
16, 2002, the Warehousing Commitment Amount will be temporarily
increased to $137,500,000. On the first Business Day following
expiration of the temporary increase of the Warehousing Commitment
Amount, Borrower must repay to Lender the amount by which the
outstanding Warehousing Advances exceed the Warehousing Commitment
Amount.
"Warehousing Maturity Date" shall mean the earlier of: (a) the close
of business on May 17, 2002, as such date may be extended from time to
time in writing by Lender, in its sole discretion, on which date the
Warehousing Commitment shall expire of its own term and without the
necessity of action by Lender, (b) 30 days after the commencement of
Early Amortization, and (c) the date the Warehousing Advances become
due and payable pursuant to Section 8.2 below.
2. Sections 2.1(b)(7) and 2.1(b)(8) of the Agreement are deleted in their
entirety and the following are substituted in lieu thereof:
(7) The aggregate amount of Wet Settlement Advances outstanding
at any one time shall not exceed 40% of the Ordinary Warehousing
Sublimit.
(8) No Ordinary Warehousing Advance shall be made if, after
giving effect thereto, the aggregate amount of Ordinary Warehousing
Advances outstanding would exceed (i) $125,000,000, during the period
from March 17, 2002, to and including May 16, 2002, or (ii)
$82,000,000, at any other time, plus in each case any portion of the
Uncommitted Warehousing Amount as Lender, in its sole and absolute
discretion, elects to make available to the Company (the "Ordinary
Warehousing Sublimit").
3. Section 2.11 of the Agreement is deleted in its entirety and the following
is substituted in lieu thereof:
2.11 Warehousing Fees. Borrower agrees, at the time of each
Warehousing Advance, except Warehousing Advances made as part of a
Bulk Financing of Mortgage Loans other than Seasoned Mortgage Loans,
Nonperforming Mortgage Loans or REO Properties, to pay to Lender a
Warehousing Fee (a) in the case of Advances against Seasoned Mortgage
Loans, Nonperforming Mortgage Loans or REO Properties, in the amount
of $400, and (b) in any other case, in the amount of $25 for each
Mortgage Loan pledged as Collateral for such Advance. Borrower further
agrees, at the time of each Bulk Financing of Mortgage Loans other
than Seasoned Mortgage Loans, Nonperforming Mortgage Loans or REO
Properties, to pay to Lender a Warehousing Fee in the amount of $15
for each Mortgage Loan pledged as Collateral for such Bulk Financing.
Warehousing Fees are due when incurred, but shall not be delinquent if
paid within 15 days after receipt of an invoice or an account analysis
statement from Lender.
4. Section 7.10 of the Agreement is deleted in its entirety and the following
is substituted in lieu thereof:
7.10 Transactions with Affiliates. Directly or indirectly (a)
make any loan, advance, extension of credit or capital contribution to
any of its Affiliates, other than (i) investments by AHL in AHC, (ii)
loans and advances between AHL and AHC and (iii) investments by AHL
totaling not more than $350,000, in the aggregate, in Vicon Financial
Services, Inc., and in one or more Vicon Affiliates, (b) transfer,
sell, pledge, assign or otherwise dispose of any of its assets to or
on behalf of such Affiliates, except for sales of Mortgage Loans in
the ordinary course of business from AHL to AHC, (c)
2
merge or consolidate with or purchase or acquire assets from such
Affiliates, except for purchases of Mortgage Loans in the ordinary
course of business by AHL (i) from one or more Vicon Affiliates and
(ii) from AHC, or (d) transfer, pledge or assign or otherwise pay
management fees to or on behalf of such Affiliates other than the
payment of management fees by AHC to AHL as long as the services to be
provided by AHL and the management fees to be paid by AHC for them are
no less favorable to AHL than those that AHC would have obtained in a
comparable transaction with an unrelated Person.
5. Exhibit M to the Agreement is hereby deleted in its entirety and replaced
with the new Exhibit M attached to this Amendment. All references in the
Agreement to Exhibit M will be deemed to refer to the new Exhibit M.
6. Upon execution of this Amendment, Borrower must pay to Lender an extension
fee equal to $15,000.
7. Borrower must pay all out-of-pocket costs and expenses of Lender,
including, without limitation, reasonable fees, service charges and
disbursements of counsel in connection with the amendment, enforcement and
administration of the Agreement.
8. Borrower must deliver to Lender (a) 4 executed originals of this Amendment;
(b) the $15,000 extension fee; and (c) the $350 document production fee.
9. Borrower represents, warrants and agrees that there exists no Default or
Event of Default under the Loan Documents, the Loan Documents continue to
be the legal, valid and binding agreements and obligations of Borrower
enforceable in accordance with their terms, as modified herein, 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, the representations contained in the Loan Documents remain true
and accurate in all respects, and there has been no material adverse change
in the financial condition of Borrower from the date of the Agreement to
the date of this Amendment.
10. Except as hereby expressly modified, the Agreement shall otherwise be
unchanged and shall remain in full force and effect, and Borrower ratifies
and reaffirms all of its obligations thereunder.
11. This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument.
[REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]
3
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.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: /s/ [ILLEGIBLE]
---------------------------------
Its: Executive Vice President
---------------------------------
ACCREDITED HOME CAPITAL, INC
a Delaware corporation
By: /s/ [ILLEGIBLE]
---------------------------------
Its: Ass't VP and Ass't Sec'y
---------------------------------
RESIDENTIAL FUNDING CORPORATION, a
Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Director
---------------------------------
4
EXHIBIT M
ELIGIBLE LOANS
For the purposes hereof, the following terms shall have the following meanings:
"Acquisition Price" has the meaning given to it in the Agreement.
"Closed Loan" means a Mortgage Loan that will be purchased by the Company
from a third party originator with the Advance requested against it.
"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.
"HUD 203(K) Mortgage Loan" means an FHA-insured close-end First Mortgage
Loan to an individual obligor the proceeds of which will be used for the purpose
of rehabilitating and repairing the related single family property, and which
satisfies the definition of "rehabilitation loan" in 24 C.F.R. 203.50(a).
"Loan-to-Value Ratio" means, in respect of any Mortgage Loan, the ratio of
(a) the maximum amount available to be borrowed thereunder (whether or not
borrowed) at the time of origination to (b) the Appraised Value of such related
improved real property.
"Title I Mortgage Loan" means an FHA co-insured closed-end First Mortgage
Loan or Second Mortgage Loan that is underwritten in accordance with HUD
underwriting standards for the Title I Property Improvement Program set forth
in, and that is reported for insurance under, the Mortgage Insurance Program
authorized and administered under Title I of the National Housing Act of 1934,
as amended, and the regulations related to that statute.
The following aggregate limitations shall apply to Advances against Eligible
Loans:
1. Wet Settlement Advances: 40% of the Ordinary
Warehousing Sublimit.
2. Advances against Second Mortgage Loans: $15,000,000
3. Closed Loan Advances: Permitted for Eligible
Loans other than
Seasoned Mortgage Loans.
The following specified types of Single Family Mortgage Loans are Eligible Loans
provided they conform in all respects with the terms of the Warehousing
Agreement (the restrictions set forth for each of the following categories of
Eligible Loans do not apply to either of the other categories:
-1-
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, other than a Government Mortgage Loan:
A. Underwritten substantially in accordance with ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ 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 amount by which such
Prime Mortgage Loan exceeds 80% is insured by or subject to
a commitment for mortgage insurance.
ii. For a Second Mortgage Loan:
A. The credit of the obligor has been underwritten
substantially in accordance with ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac
underwriting standards; and
B. Loan-to-Value Ratio not more than 100%.
iii. For a Government Mortgage Loan:
A. HUD/FHA insured (other than a HUD 203(K) Mortgage Loan or a
Title I Mortgage Loan); or
B. VA guaranteed.
b. Interest Rate: 1.25% over LIBOR.
c. Prime Sublimit: $10,000,000.
d. Committed/Uncommitted: Purchase Commitment required for
First Mortgage Loans only
e. Committed First Mortgage Loan 98% of the least of (i) the Mortgage
Advance Rate: Note Amount or (ii) the Committed
Purchase Price or (iii) the
Acquisition Price.
e. Uncommitted Second Mortgage 98% of the least of (i) the Mortgage
Loan Advance Rate: Note Amount or (ii) the Committed
Purchase Price or (iii) the
Acquisition Price.
f. Warehouse Period: 90 days; provided that Ordinary
Warehousing Advances in an aggregate
amount not to exceed 20% of the
Ordinary Warehousing Sublimit may
remain outstanding against Mortgage
Loans for 120 days.
-2-
2. Subprime Mortgage Loan
a. Definition: A First Mortgage Loan that is not a
Prime Mortgage Loan, which has a risk
rating of "A-", "B" or "C"
(determined using under-writing
standards which comply with industry
standards in the sole judgment of the
Lender), which is made to a mortgagor
with a FICO Score of no less than
500, and which is acceptable for
purchase by at least two Investors.
b. Interest Rate: 1.25% over LIBOR.
c. Subprime Sublimit: $50,000,000, during the period from
September 20, 2001, to and including
October 19, 2001; and $15,000,000, at
all other times.
d. Committed/Uncommitted: Purchase Commitment not required
unless First Mortgage Loan exceeds
$400,000
e. Committed First Mortgage Loan 98% of the least of (i) the Mortgage
Advance Rate: Note Amount or (ii) the Committed
Purchase Price or (iii) the
Acquisition Price.
f. Uncommitted First Mortgage Loan 98% of the Mortgage Note Amount.
Advance Rate:
g. Warehouse Period First Mortgage 90 days; provided, that Ordinary
Loan: Warehousing Advances in an aggregate
amount not to exceed 20% of the
Ordinary Warehousing Sublimit may
remain outstanding against Mortgage
Loans for 120 days.
-3-
3. Eligible Subject Loan
a. Definition: As defined in the Agreement.
b. Interest Rate: 1.25% over LIBOR.
c. Committed/Uncommitted: Purchase Commitment required, if
applicable.
d. Committed Advance Rate: 100% of the least of (i) the
Mortgage Note Amount, (ii) the
Committed Purchase Price, or
(iii) the Acquisition Price.
e. Warehouse Period: 90 days; provided, that Ordinary
Warehousing Advances in an
aggregate amount not to exceed
20% of the Ordinary Warehousing
Sublimit may remain outstanding
against Mortgage Loans for 120
days.
4. Seasoned Mortgage Loan
a. Definition: A First Mortgage Loan that (i)
at the time of its origination,
the Company in good faith
believed would otherwise qualify
as a Prime Mortgage Loan or a
Subprime Mortgage Loan under
this Agreement, (ii) as of the
date of the Advance, the most
recent contractual payment
required by the terms of the
Mortgage Loan has been paid in
full or, if not paid, is not
more than 20 days past its
contractual due date, (iii) has
not been a Nonperforming
Mortgage Loan or REO Property as
defined in the Agreement, (iv)
is not currently and has not in
the past been included in any
bankruptcy plan or forbearance
program, (v) does not involve a
refinancing out of a
foreclosure, (vi) was originated
by and closed in the name of the
Company, and (vii) is not
subject to a colorable claim of
fraud.
b. Interest Rate: 2.75% over LIBOR.
c. Seasoned Mortgage Loan Sublimit: $7,000,000.
d. Committed/Uncommitted: Purchase Commitment not required.
e. Seasoned Mortgage Loan Advance An amount equal to the lesser
Rate: of (i) 85% of the Mortgage Note
Amount of the related Seasoned
Mortgage Loan or (ii) 90% of the
BPO Value of the improved real
property securing the Seasoned
Mortgage Loan.
f. Warehouse Period: 300 days.
-4-
NINTH AMENDMENT
TO
WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT
THIS NINTH AMENDMENT TO WAREHOUSING CREDIT, TERM LOAN AND SECURITY
AGREEMENT (this "Amendment") is entered into as of this 2nd day of January 2002,
by and between ACCREDITED HOME LENDERS, INC., a California corporation ("AHL")
and ACCREDITED HOME CAPITAL, INC., a Delaware corporation ("AHC") (AHL and AHC
are collectively referred to as the "Borrower") and RESIDENTIAL FUNDING
CORPORATION, a Delaware corporation (the "Lender").
WHEREAS, the Borrower and the Lender have entered into a single family
revolving warehouse facility and a term loan facility as evidenced by a Third
Amended and Restated Warehousing Promissory Note dated December 28, 2001, a
First Amended and Restated Sublimit Promissory Note dated December 28, 2001, and
a First Amended and Restated Term Loan Promissory Note dated December 28, 2001
(the "Notes"), and by a Warehousing Credit, Term Loan and Security Agreement
dated as of March 17, 1999, as amended by that certain First Amendment to
Warehousing Credit, Term Loan and Security Agreement dated as of February 24,
2000, that certain Second Amendment to Warehousing Credit, Term Loan and
Security Agreement dated as July 12, 2000, that certain Third Amendment to
Warehousing Credit, Term Loan and Security Agreement dated as of January 31,
2001, that certain Fourth Amendment to Warehousing Credit, Term Loan and
Security Agreement dated as of April 26, 2001, that certain Fifth Amendment to
Warehousing Credit, Term Loan and Security Agreement dated as of April 27, 2001,
that certain Sixth Amendment to Warehousing Credit, Term Loan and Security
Agreement dated as of September 26, 2001, that certain Seventh Amendment to
Warehousing Credit, Term Loan and Security Agreement dated as of December
19, 2001, and that certain Eighth Amendment to Warehousing Credit, Term Loan and
Security Agreement dated as of December 28, 2001, (as amended hereby and as the
same may hereafter be amended, supplemented, or otherwise modified from time to
time, the "Agreement"); and
WHEREAS, the Borrower has asked the Lender to further temporarily increase
the Warehousing Commitment Amount and to amend certain terms of the Agreement,
and the Lender has agreed to such temporary increase and such amendment, subject
to the terms and conditions of this Amendment.
NOW, THEREFORE, for and in consideration of the foregoing and of the mutual
covenants, agreements and conditions hereinafter set forth and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall have
their respective meanings set forth in the Agreement.
2. The effective date ("Effective Date") of this Amendment shall be
December 31, 2001.
3. Section 1.1 of the Agreement is amended to delete the definition of
"Warehousing Commitment Amount" in its entirety, replacing it with the following
definition:
Warehousing Commitment Amount" means $94,500,000. Notwithstanding the
foregoing, during the period from December 31, 2001, to and including
January 15, 2002, the Warehousing Commitment Amount will be temporarily
increased to $167,500,000. On the first Business Day following expiration
of the temporary increase of the Warehousing Commitment Amount, the
Borrower must repay to the Lender the amount by which the outstanding
Warehousing Advances exceed the Warehousing Commitment Amount.
4. Section 2.1(b)(8) of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
(8) No Ordinary Warehousing Advance shall be made if, after
giving effect thereto, the aggregate amount of Ordinary
Warehousing Advances outstanding would exceed (i)
$155,000,000, during the period from December 31, 2001, to
and including January 15, 2002, or (ii) $82,000,000, at any
other time, plus in each case any portion of the Uncommitted
Warehousing Amount as the Lender, in its sole and absolute
discretion, elects to make available to the Company (the
"Ordinary Warehousing Sublimit").
5. The Wet Settlement Sublimit set forth in Exhibit M to the Agreement is
hereby temporarily deleted and replaced for the period December 31, 2001, to and
including January 15, 2002, with $95,000,000.
6. The Third Amended and Restated Warehousing Promissory Note is amended
and restated in its entirety as set forth the Fourth Amended and Restated
Warehousing Promissory Note. All references in this Amendment and in the
Agreement to the Note shall be deemed to refer to the Fourth Amended and
Restated Warehousing Promissory Note delivered in connection with this
Amendment.
7. Upon execution of this Amendment, the Borrower agrees to pay to the
Lender a commitment fee equal to $10,000.
8. The Borrower must pay all out-of-pocket costs and expenses of the
Lender, including, without limitation, reasonable fees, service charges and
disbursements of counsel in connection with the amendment, enforcement and
administration of the Agreement.
9. The Borrower must deliver to the Lender (a) four executed originals of
this Amendment; (b) the Fourth Amended and Restated Warehousing Promissory Note;
(b) the $10,000 Commitment Fee; and (c) the $350 document production fee.
10. The Borrower represents, warrants and agrees that there exists no
Default or Event of Default under the Loan Documents, the Loan Documents
continue to be the legal, valid and binding agreements and obligations of the
Borrower enforceable in accordance with their terms, as modified herein, the
Lender is not in default under any of the Loan Documents and the Borrower has no
offset or defense to its performance or obligations under any of the Loan
Documents, the representations contained in the Loan Documents remain true and
accurate in all respects, and there has been no material adverse change in the
financial condition of the Borrower from the date of the Agreement to the date
of this Amendment.
11. Except as hereby expressly modified, the Agreement shall otherwise be
unchanged and shall remain in full force and effect, and the Borrower ratifies
and reaffirms all of its obligations thereunder.
12. This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
[Remainder of this page left blank intentionally]
-2-
IN WITNESS WHEREOF, the Borrower and the 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.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: /s/ [ILLEGIBLE]
-------------------------------
Its: Exec VP
-------------------------------
RESIDENTIAL FUNDING CORPORATION, a
Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Direcotr
-------------------------------
EIGHTH AMENDMENT
TO
WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT
THIS EIGHTH AMENDMENT TO WAREHOUSING CREDIT, TERM LOAN AND SECURITY
AGREEMENT (this "Amendment") is entered into as of this 28th day of
December, 2001, by and between ACCREDITED HOME LENDERS, INC., a California
corporation ("AHL"), ACCREDITED HOME CAPITAL, INC., a Delaware corporation
("UAHC") (AHL and AHC are collectively referred to as the "Borrower") and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender").
WHEREAS, AHL and the Lender have entered into a single family revolving
warehouse facility and a term loan facility as evidenced by a Second Amended and
Restated Warehousing Promissory Note in the principal sum of $208,000,000 dated
September 26, 2001, a Sublimit Promissory Note in the principal amount of
$10,500,000 dated March 17, 1999, and a Term Loan Promissory Note in the
principal amount of $40,000,000 dated March 17, 1999 (the "Notes"), and by a
Warehousing Credit, Term Loan and Security Agreement dated as of March 17, 1999,
as amended by that certain First Amendment to Warehousing Credit, Term Loan and
Security Agreement dated as of February 24, 2000, that certain Second Amendment
to Warehousing Credit, Term Loan and Security Agreement dated as July 12, 2000,
that certain Third Amendment to Warehousing Credit, Term Loan and Security
Agreement dated as of January 31, 2001, that certain Fourth Amendment to
Warehousing Credit, Term Loan and Security Agreement dated as of April 26, 2001,
and that certain Fifth Amendment to Warehousing Credit, Term Loan and Security
Agreement dated as of April 27, 2001, that certain Sixth Amendment to
Warehousing Credit, Term Loan and Security Agreement dated as of September 26,
2001 and that certain Seventh Amendment to Warehousing Credit, Term Loan and
Security Agreement dated as of December 19, 2001 (as amended hereby and as the
same may hereafter be amended, supplemented, or otherwise modified from time to
time, the "Agreement"); and
WHEREAS, AHL has requested that the Lender consent to the addition of its
wholly owned subsidiary, AHC, as a co-borrower under the Agreement, and the
Lender has agreed to the addition of AHC as a co-borrower, subject to the terms
and conditions of this Amendment.
NOW, THEREFORE, for and in consideration of the foregoing and of the mutual
covenants, agreements and conditions hereinafter set forth and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. The effective date ("Effective Date") of this Amendment is December 28,
2001.
2. All capitalized terms used in this Amendment and not otherwise defined
in it have the meanings given to those terms in the Agreement.
3. All references to the "Company" in the Agreement and the other Loan
Documents are amended to refer to the "Borrower."
4. Except as otherwise provided in this Amendment, all references in the
Agreement to the Borrower shall mean and refer to "the Borrowers," "either
Borrower" or "each Borrower," as the context may require. All references in
Sections 4.1, 5.13, 7.6 and 7.8 of the Agreement to "the Borrower" mean and
refer to AHL only.
5. Section 1.1 of the Agreement is amended by adding the following
definitions in appropriate alphabetical order:
"AHC" means Accredited Home Capital, Inc., a Delaware corporation.
"AHC Guaranty" means the Guaranty dated December 28, 2001 of AHC in
favor of the Lender in which AHC guarantees the payment and performance of
AHL's obligations under the Convertible Debt Agreement, the Debenture and
the other Convertible Debt Documents.
"AHL" means Accredited Home Lenders, Inc., a California corporation.
"Eighth Amendment" means that Eighth Amendment to Warehousing Credit,
Term Loan and Security Agreement dated as of December 28, 2001 among AHL,
AHC and the Lender.
"Household Facility" means the facility provided for in the Amended
and Restated Credit Agreement dated as of December 28, 2001, as amended,
among AHL, AHC and Household Commercial Financial Services, Inc.
6. Section 1.1. of the Agreement is amended to delete the following
definitions in their entirety, replacing them with the following definitions:
"Borrower" means AHL, AHC or AHL and AHC, as determined pursuant to
Section 4 of the Eighth Amendment.
"Loan Documents" means this Agreement, the Notes, any agreement of the
Company relating to Subordinated Debt, the AHC Guaranty and each other
document, instrument or agreement executed by the Borrowers in connection
herewith or therewith, as any of the same may be amended, restated, renewed
or replaced from time to time.
7. Section 2.1(a) of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
2.1(a) Subject to the terms and conditions of this Agreement and
provided no Default or Event of Default has occurred and is continuing, the
Lender agrees from time to time during the period from the Closing Date to,
but not including, the Warehousing Maturity Date, to make Warehousing
Advances to the Borrower, provided the total aggregate principal amount
outstanding at any one time of all such Warehousing Advances shall not
exceed the Warehousing Commitment Amount plus such portion of the
Uncommitted Warehousing Amount as the Lender, in its sole and absolute
discretion, elects to make available to the Borrower. The obligation of the
Lender to make Warehousing Advances hereunder up to the Warehousing
Commitment Amount is hereinafter referred to as the "Warehousing
Commitment." Within the Warehousing Commitment, the Borrower may borrow,
repay and reborrow. All Warehousing Advances under this Agreement shall
constitute a single indebtedness, and all of the Collateral shall be
security for the Notes and for the performance of all the Obligations.
Warehousing Advances will be made either to AHL or AHC, as requested by
either AHL or AHC in the applicable Advance Request, but each Warehousing
Advance, whether made to AHL or AHC, will be deemed made to or for the
benefit of AHL and AHC, and AHL and AHC, jointly and severally, are
obligated to repay any Warehousing Advances made to either Borrower under
the Warehousing Commitment. With respect to its obligation to repay
Warehousing Advances made to the other Borrower, each Borrower agrees to
the terms set forth in Exhibit P attached to this Agreement.
8. Section 2.3(a) of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
2.3(a) Subject to the terms and conditions of this Agreement and
provided no Default or Event of Default has occurred and is continuing, the
Lender agrees from time to time during the period from the Closing Date to,
but not including, the Term Loan Commitment Termination Date, to make Term
Loan Advances to the Borrower, provided the total aggregate principal
amount outstanding at any one time of all such Term Loan Advances shall not
exceed the Term Loan Commitment Amount. The obligation of the Lender to
make Term Loan Advances hereunder up
-2-
to the Term Loan Commitment Amount is hereinafter referred to as the "Term
Loan Commitment." All Term Loan Advances under this Agreement shall
constitute a single indebtedness, and all of the Collateral shall be
security for the Term Loan Promissory Note and for the performance of all
the Obligations. Term Loan Advances will be made either to AHL or AHC, as
requested by either AHL or AHC in the applicable Advance Request, but each
Term Loan Advance, whether made to AHL or AHC, will be deemed made to or
for the benefit of AHL and AHC, and AHL and AHC, jointly and severally, are
obligated to repay any Term Loan Advances made to either Borrower under the
Term Loan Commitment. With respect to its obligation to repay Term Loan
Advances made to the other Borrower, each Borrower agrees to the terms set
forth in Exhibit P attached to this Agreement.
9. Section 5.1 of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
5.1 Organization; Good Standing; Subsidiaries. Each Borrower and each
Subsidiary of each Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation, has the full legal power and authority to own its property and
to carry on its business as currently conducted and is duly qualified as a
foreign corporation to do business and is in good standing in each
jurisdiction in which the transaction of its business makes such
qualification necessary, except in jurisdictions, if any, where a failure
to be in good standing has no material adverse effect on the business,
operations, assets or financial condition of either Borrower or any such
Subsidiary. For the purposes hereof, good standing shall include
qualification for any and all licenses and payment of any and all taxes
required in the jurisdiction of its formation and in each jurisdiction in
which the Borrower transact business. The Borrowers have no Subsidiaries
except as set forth on Exhibit G hereto. Exhibit G sets forth with respect
to each such Subsidiary, its name, address, place of formation, each state
in which it is qualified as a foreign corporation, and the percentage
ownership of its capital stock by the Borrowers.
10. Sections 6.2(a) and 6.2(b) of the Agreement are deleted in their
entirety and the following is substituted in lieu thereof:
6.2(a) As soon as available and in any event not later than the last
day of each month, consolidated and consolidating statements of income and
changes in stockholders' equity of AHL and its Subsidiaries for the
immediately preceding month and for the period from the beginning of the
fiscal year to the end of such immediately preceding month, and the related
consolidated and consolidating balance sheets of AHL and its Subsidiaries
as of the end of the immediately preceding month, all in reasonable detail
and certified as to the fairness of presentation by the chief financial
officer of each Borrower, subject, however, to year-end audit adjustments.
6.2(b) As soon as available and in any event within ninety (90) days
after the close of each fiscal year of AHL, consolidated and consolidating
statements of income, changes in stockholders' equity and cash flow of AHL
and its Subsidiaries for such year, and the related consolidated and
consolidating balance sheets of AHL and its Subsidiaries as of the end of
such year (setting forth in comparative form the corresponding figures for
the preceding fiscal year), all in reasonable detail and accompanied by an
opinion in form and substance satisfactory to the Lender and prepared by
Deloitte & Touche or another accounting firm of recognized standing
selected by the Borrowers and acceptable to the Lender, as to said
financial statements and a certificate signed by the chief financial
officer of each Borrower stating that said financial statements fairly
present the financial condition and results of operations of each Borrower
and its Subsidiaries as of the end of, and for, such year.
-3-
11. Section 7.3 of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
7.3 Merger; Sale of Assets; Acquisitions; Business Activities.
7.3(a) Consolidate, merge or enter into any analogous reorganization
or transaction with any Person or, in the case of AHC, issue its capital
stock or securities convertible into its capital stock to any Person other
than AHL or (ii) engage in an initial public offering of its capital stock
or securities convertible into its capital stock.
7.3(b) Amend or otherwise modify its articles of incorporation or
by-laws.
7.3(c) Liquidate, wind up or dissolve (or suffer any liquidation or
dissolution).
7.3(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 the Borrowers engage as of the date of the
Eighth Amendment. For purposes of this Section, AHC's business consists
solely of buying and selling Mortgage Loans from AHL and holding certain
intellectual property rights associated with the Borrowers' businesses.
7.3(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 Borrowers' respective businesses or assets, whether now
owned or acquired after the date of the Eighth Amendment, 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.
7.3(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.
7.3(g) Permit any Subsidiary of Borrowers to do or take any of the
foregoing actions.
12. Section 7.7 of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
7.7 Tangible Net Worth.
7.7(a) Permit Tangible Net Worth of AHL (and its Subsidiaries on a
consolidated basis) at any time to be less than the sum of (i) $6,000,000
plus (ii) for each completed fiscal quarter of AHL ended after the date
hereof, 50% of positive net income of AHL for such fiscal quarter.
7.7(b) Permit Tangible Net Worth of AHC (and its Subsidiaries on a
consolidated basis) at any time to be less than or equal to $0.
13. Section 7.10 of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
7.10 Transactions with Affiliates. Directly or indirectly (a) make any
loan, advance, extension of credit or capital contribution to any of its
Affiliates, other than (i) investments by AHL in AHC and (ii) investments
by AHL totaling not more than Three Hundred Fifty Thousand Dollars
($350,000), in the aggregate, in Vicon Financial Services, Inc., and in one
or more Vicon Affiliates, (b) transfer, sell, pledge, assign or otherwise
dispose of any of its assets to or on behalf of such Affiliates, except for
sales of Mortgage Loans in the ordinary course of business from AHL to AHC,
(c) merge or consolidate with or purchase or acquire assets from such
Affiliates, except for purchases of Mortgage Loans in the ordinary course
of business by AHL (i) from one or more
-4-
Vicon Affiliates or (ii) from AHC, or (d) transfer, pledge or assign or
otherwise pay management fees to or on behalf of such Affiliates other than
the payment of management fees by AHC to AHL as long as the services to be
provided by AHL and the management fees to be paid by AHC for them are no
less favorable to AHL than those that AHC would have obtained in a
comparable transaction with an unrelated Person.
14. Consents and Waivers. Subject to Borrowers' satisfaction of the
requirements of Section 27 of this Amendment, the Lender (i) consents to the
transfer by AHL to AHC on December 28, 2001 of beneficial title to all Pledged
Loans subject to the Agreement on that date, (ii) agrees that upon the
consummation of such transfer AHC will be deemed to be the "Borrower" with
respect to such Pledged Loans, and (iii) waives any Default or Event that would
otherwise have arisen under the terms of the Agreement, including, without
limitation, under Section 7.3 of the Agreement, in the absence of such consent.
In addition, the Lender acknowledges that all additional Mortgage Loans to be
financed by AHC with the Lender will be simultaneously purchased by AHC from
AHL, and consents to such procedure notwithstanding anything to the contrary in
the Agreement.
15. Exhibits A-l, A-2 and A-3 to the Agreement are hereby deleted in their
entirety and replaced with the new Exhibits A-l, A-2 and A-3 attached to this
Amendment. All references in the Agreement to Exhibits A-l, A-2 and A-3 will be
deemed to refer to the new Exhibits A-l, A-2 and A-3.
16. Exhibit C-SF to the Agreement is hereby deleted in its entirety and
replaced with the new Exhibit C-SF attached to this Amendment. All references in
the Agreement to Exhibit C-SF will be deemed to refer to the new Exhibit C-SF.
17. Exhibit C-PRE to the Agreement is hereby deleted in its entirety and
replaced with the new Exhibit C-PRE attached to this Amendment. All references
in the Agreement to Exhibit C-PRE will be deemed to refer to the new Exhibit
C-PRE.
18. Exhibit C-REO to the Agreement is hereby deleted in its entirety and
replaced with the new Exhibit C-REO attached to this Amendment. All references
in the Agreement to Exhibit C-REO will be deemed to refer to the new Exhibit
C-REO.
19. Exhibit C-TL to the Agreement is hereby deleted in its entirety and
replaced with the new Exhibit C-TL attached to this Amendment. All references in
the Agreement to Exhibit C-TL will be deemed to refer to the new Exhibit C-TL.
20. Exhibit D-NP/REO to the Agreement is hereby deleted in its entirety and
replaced with the new Exhibit D-NP/REO attached to this Amendment. All
references in the Agreement to Exhibit D-NP/REO will be deemed to refer to the
new Exhibit D-NP/REO.
21. Exhibit D-SF to the Agreement is hereby deleted in its entirety and
replaced with the new Exhibit D-SF attached to this Amendment. All references in
the Agreement to Exhibit D-SF will be deemed to refer to the new Exhibit D-SF.
22. Exhibit G to the Agreement is hereby deleted in its entirety and
replaced with the new Exhibit G attached to this Amendment. All references in
the Agreement to Exhibit G will be deemed to refer to the new Exhibit G.
23. Exhibit I-SF to the Agreement is hereby deleted in its entirety and
replaced with the new Exhibit I-SF attached to this Amendment. All references in
the Agreement to Exhibit I-SF will be deemed to refer to the new Exhibit I-SF.
24. Exhibit N to the Agreement is hereby deleted in its entirety and
replaced with the new Exhibit N-1 and Exhibit N-2 attached to this Amendment.
All references in the Agreement to Exhibit N will be deemed to refer to the new
Exhibit N-1 and Exhibit N-2, as applicable.
-5-
25. The Agreement is amended to add a new Exhibit P in the form of Exhibit
P attached to this Amendment.
26. The Second Amended and Restated Warehousing Promissory Note is amended
and restated in its entirety as set forth in the Third Amended and Restated
Warehousing Promissory Note, in the form of Exhibit A-l to this Amendment. The
Sublimit Promissory Note is amended and restated in its entirety as set forth in
the First Amended and Restated Sublimit Promissory Note, in the form of Exhibit
A-2 to this Amendment. The Term Loan Promissory Note is amended and restated in
its entirety as set forth in the First Amended and Restated Term Loan Promissory
Note, in the form of Exhibit A-3 to this Amendment. All references in this
Amendment, the Agreement and the other Loan Documents to the Warehousing
Promissory Note, the Sublimit Note and the Term Loan Promissory Note will be
deemed to refer to the Third Amended and Restated Warehousing Promissory Note,
the First Amended and Restated Sublimit Promissory Note and the First Amended
and Restated Term Loan Promissory Note, respectively, delivered in connection
with this Amendment. For convenience, the Third Amended and Restated Warehousing
Promissory Note, the First Amended and Restated Sublimit Promissory Note and the
First Amended and Restated Term Loan Promissory Note are collectively referred
to as the "Replacement Notes."
27. The effectiveness of this Amendment and the obligation of Lender to
fund Advances under the Agreement as amended hereby is-subject to Lender's
receipt of the following, in form and substance satisfactory to Lender: -
(a) Certified copies of AHC's Certificate of Incorporation, By-Laws, and
certificates of good standing dated no less recently that 90 days
prior to the date of this Amendment;
(b) Copies of the resolutions of the Boards of Directors of AHL and AHC,
certified as of the date of this Amendment by the Secretaries of AHL
and AHC, authorizing the execution, delivery and performance of this
Amendment, the Replacement Notes and all other instruments or
documents to be delivered by AHL and AHC pursuant to this Amendment,
certified by the Secretary or Assistant Secretary of AHL and AHC,
respectively;
(c) Certificates of the Secretaries of AHL and AHC as to the incumbency
and authenticity of the signatures of the officers of AHL and AHC
executing this Amendment, the Replacement Notes and all other
instruments or documents to be delivered by AHL and AHC pursuant to
this Amendment (the Lender being entitled to rely thereon until a new
such certificate has been furnished to the Lender);
(d) A favorable written opinion of counsel to AHL and AHC, dated as of the
date of this Amendment, substantially in the form of Exhibit Q to this
Amendment, addressed to the Lender;
(e) A tax, lien and judgment search of the appropriate public records for
AHC in the State of California, including a search of Uniform
Commercial Code financing statements, which search shall not have
disclosed the existence of any prior Liens on the Collateral, other
than in favor of the Lender or as permitted hereunder;
(f) Copies of AHC's errors and omissions insurance policy or mortgage
impairment insurance policy and blanket bond coverage policy, or
certificates in lieu of policies, all in form and content satisfactory
to the Lender, showing compliance by AHC as of the date of this
Amendment with the related provisions of Section 6.8 of the Agreement;
(g) Four executed originals of this Amendment;
(h) Executed originals of the Replacement Notes;
-6-
(i) A copy of the Master Sale and Purchase Agreement dated December 29,
2001 between AHL and AHC governing the purchase and sale of Mortgage
Loans between them, certified by the Secretary or Assistant Secretary
of AHL;
(j) An executed original of the AHC Guaranty;
(k) A $20,000 modification fee; and
(l) A $1,500 document production fee.
28. The Borrowers must pay all out-of-pocket costs and expenses of the
Lender, including, without limitation, reasonable fees, service charges and
disbursements of counsel in connection with the amendment, enforcement and
administration of this Amendment and the Agreement.
29. Each Borrower represents, warrants and agrees that there exists no
Default or Event of Default under the Transaction Documents, the Transaction
Documents continue to be the legal, valid and binding agreements and obligations
of each Borrower to the extent such Borrower is a party thereto, enforceable in
accordance with their terms, as modified herein, the Lender is not in default
under any of the Transaction Documents and the Borrowers have no offset or
defense to its performance or obligations under any of the Transaction
Documents, the representations contained in the Transaction Documents remain
true and accurate in all respects, and there has been no material adverse change
in the financial condition of the Borrowers from the date of the Agreement to
the date of this Amendment.
30. Except as hereby expressly modified, the Agreement shall otherwise be
unchanged and shall remain in full force and effect, and each Borrower ratifies
and reaffirms all of its obligations thereunder.
31. This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
[Remainder of this page left blank intentionally]
-7-
IN WITNESS WHEREOF, the Borrowers and the 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.
ACCREDITED HOME LENDERS, INC., a California
corporation
By: /s/ [ILLEGIBLE]
---------------------------------
Its: Executive Vice President
--------------------------------
ACCREDITED HOME CAPITAL, INC., a Delaware
corporation
By: /s/ [ILLEGIBLE]
---------------------------------
Its: Chief Financial Officer
--------------------------------
RESIDENTIAL FUNDING CORPORATION, a
Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Director
--------------------------------
S-1
EXHIBIT A-l
THIRD AMENDED AND RESTATED
WAREHOUSING PROMISSORY NOTE
$208,000,000 Date: December _, 2001
FOR VALUE RECEIVED, the undersigned, ACCREDITED HOME LENDERS, INC., a
California corporation, and ACCREDITED HOME CAPITAL, INC., a Delaware
corporation (collectively, the "Borrowers" and individually, as "Co-Borrower"),
hereby promise to pay to the order of RESIDENTIAL FUNDING CORPORATION, a
Delaware corporation ("Lender" or, together with its successors and assigns,
"Holder") whose principal place of business is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as the Holder may
designate from time to time, the principal sum of $208,000,000 or so much
thereof as may be outstanding from time to time pursuant to the Warehousing
Credit and Security Agreement described below, and to pay interest on said
principal sum or such part thereof as shall remain unpaid from time to time,
from the date of each Advance until repaid in full, and all other fees and
charges due under the Agreement, at the rates and at the times set forth in the
Agreement. All payments hereunder shall be made in lawful money of the United
States and in immediately available funds.
This Note is given to evidence an actual warehouse line of credit in the
above amount and is the Warehousing Promissory Note referred to in that certain
Warehousing Credit and Security Agreement dated as of March 17, 1999, between
the Borrowers and Lender, as the same has been and in the future may be amended
or supplemented from time to time (as so amended or supplemented, the
"Agreement"), and is entitled to the benefits thereof. Reference is hereby made
to the Agreement (which is incorporated herein by reference as fully and with
the same effect as if set forth herein at length) for a description of the
Collateral, a statement of the covenants and agreements, a statement of the
rights and remedies and securities afforded thereby and other matters contained
therein. Capitalized terms used herein, unless otherwise defined herein, shall
have the meanings given them in the Agreement.
This Note is given in replacement for, and not in satisfaction of, that
certain Second Amended and Restated Warehousing Promissory Note dated September
26, 2001 (the "Existing Note"), and is issued by the Borrowers to evidence their
Obligations under the Agreement. All amounts owed by the Borrowers under the
Existing Note (including, without limitation, the unpaid principal thereunder,
interest accrued thereon and fees accrued under the Agreement whether or not yet
due and owing) as of the date hereof, shall be owed hereunder.
This Note may be prepaid in whole or in part at any time without premium or
penalty.
Should this Note be placed in the hands of attorneys for collection, the
Borrowers agree to pay, in addition to principal and interest, fees and charges
due under the Agreement, any and all costs of collecting this Note, including
reasonable attorneys' fees and expenses.
The Borrowers hereby waive demand, notice, protest and presentment.
The promises and agreements in this Note are the joint and several promises
and agreements of each Co-Borrower and constitute the joint and several
obligation of each Co-Borrower. The release of any party to this Note does not
affect or release the joint and several liability of any other party. The Lender
may at its option enforce this Note against one Co-Borrower or all of the
Co-Borrowers, and the Lender is not required to resort to enforcement against
each Co-Borrower and the Lender's failure to proceed against or join each
Co-Borrower does not affect the joint and several liability of each Co-Borrower.
This Note shall be construed and enforced in accordance with the laws of
the State of Minnesota, without reference to its principles of conflicts of law.
IN WITNESS WHEREOF, each Co-Borrower has executed this Note as of the
day and year first above written.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: ________________________________
Its:________________________________
ACCREDITED HOME CAPITAL, INC.,
a Delaware corporation
By: ________________________________
Its:________________________________
-2-
EXHIBIT A-2
FIRST AMENDED AND RESTATED
SUBLIMIT PROMISSORY NOTE
$10,500,000 Date: December _, 2001
FOR VALUE RECEIVED, the undersigned, ACCREDITED HOME LENDERS, INC., a
California corporation, and ACCREDITED HOME CAPITAL, INC., a Delaware
corporation (collectively, the "Borrowers" and individually, as "Co-Borrower"),
hereby promise to pay to the order of RESIDENTIAL FUNDING CORPORATION, a
Delaware corporation ("Lender" or, together with its successors and assigns,
"Holder") whose principal place of business is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as the Holder may
designate from time to time, the principal sum of $10,500,000 or so much thereof
as may be outstanding from time to time pursuant to the Warehousing Credit and
Security Agreement described below, and to pay interest on said principal sum or
such part thereof as shall remain unpaid from time to time, from the date of
each Advance until repaid in full, and all other fees and charges due under the
Agreement, at the rates and at the times set forth in the Agreement. All
payments hereunder shall be made in lawful money of the United States and in
immediately available funds.
This Note is given to evidence an actual line of credit in the above amount
and is the Sublimit Promissory Note referred to in that certain Warehousing
Credit and Security Agreement dated as of March 17, 1999, between the Borrowers
and Lender, as the same has been and in the future may be amended or
supplemented from time to time (as so amended or supplemented, the "Agreement"),
and is entitled to the benefits thereof. Reference is hereby made to the
Agreement (which is incorporated herein by reference as fully and with the same
effect as if set forth herein at length) for a description of the Collateral,
a statement of the covenants and agreements, a statement of the rights and
remedies and securities afforded thereby and other matters contained therein.
Capitalized terms used herein, unless otherwise defined herein, shall have the
meanings given them in the Agreement.
This Note is given in replacement for, and not in satisfaction of, that
certain Sublimit Promissory Note dated March 17, 1999 (the "Existing Note"), and
is issued by the Borrowers to evidence their Obligations under the Agreement.
All amounts owed by the Borrowers under the Existing Note (including, without
limitation, the unpaid principal thereunder, interest accrued thereon and fees
accrued under the Agreement whether or not yet due and owing) as of the date
hereof, shall be owed hereunder.
This Note may be prepaid in whole or in part at any time without premium or
penalty.
Should this Note be placed in the hands of attorneys for collection, the
Borrowers agree to pay, in addition to principal and interest, fees and charges
due under the Agreement, any and all costs of collecting this Note, including
reasonable attorneys' fees and expenses.
The Borrowers hereby waive demand, notice, protest and presentment.
The promises and agreements in this Note are the joint and several promises
and agreements of each Co-Borrower and constitute the joint and several
obligation of each Co-Borrower. The release of any party to this Note does not
affect or release the joint and several liability of any other party. The Lender
may at its option enforce this Note against one Co-Borrower or all of the
Co-Borrowers, and the Lender is not required to resort to enforcement against
each Co-Borrower and the Lender's failure to proceed against or join each
Co-Borrower does not affect the joint and several liability of each Co-Borrower.
This Note shall be construed and enforced in accordance with the laws of
the State of Minnesota, without reference to its principles of conflicts of law.
IN WITNESS WHEREOF, each Co-Borrower has executed this Note as of the day
and year first above written.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: ________________________________
Its:________________________________
ACCREDITED HOME CAPITAL, INC.,
a Delaware corporation
By: ________________________________
Its:________________________________
-2-
EXHIBIT A-3
FIRST AMENDED AND RESTATED
TERM LOAN PROMISSORY NOTE
$40,000,000 Date: December _, 2001
FOR VALUE RECEIVED, the undersigned, ACCREDITED HOME LENDERS, INC., a
California corporation, and ACCREDITED HOME CAPITAL, INC., a Delaware
corporation (collectively, the "Borrowers" and individually, as "Co-Borrower"),
hereby promise to pay to the order of RESIDENTIAL FUNDING CORPORATION, a
Delaware corporation ("Lender" or, together with its successors and assigns,
"Holder") whose principal place of business is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as the Holder may
designate from time to time, the principal sum of $40,000,000 or so much thereof
as may be outstanding from time to time pursuant to the Warehousing Credit and
Security Agreement described below, and to pay interest on said principal sum or
such part thereof as shall remain unpaid from time to time, from the date of
each Advance until repaid in full, and all other fees and charges due under the
Agreement, at the rates and at the times set forth in the Agreement. All
payments hereunder shall be made in lawful money of the United States and in
immediately available funds.
This Note is given to evidence an actual line of credit in the above amount
and is the Term Loan Promissory Note referred to in that certain Warehousing
Credit and Security Agreement dated as of March 17, 1999, between the Borrowers
and Lender, as the same has been and in the future may be amended or
supplemented from time to time (as so amended or supplemented, the "Agreement"),
and is entitled to the benefits thereof. Reference is hereby made to the
Agreement (which is incorporated herein by reference as fully and with the same
effect as if set forth herein at length) for a description of the Collateral, a
statement of the covenants and agreements, a statement of the rights and
remedies and securities afforded thereby and other matters contained therein.
Capitalized terms used herein, unless otherwise defined herein, shall have the
meanings given them in the Agreement.
This Note is given in replacement for, and not in satisfaction of, that
certain Term Loan Promissory Note dated March 17, 1999 (the "Existing Note"),
and is issued by the Borrowers to evidence their Obligations under the
Agreement. All amounts owed by the Borrowers under the Existing Note (including,
without limitation, the unpaid principal thereunder, interest accrued thereon
and fees accrued under the Agreement whether or not yet due and owing) as of the
date hereof, shall be owed hereunder.
This Note may be prepaid in whole or in part at any time without premium or
penalty.
Should this Note be placed in the hands of attorneys for collection, the
Borrowers agree to pay, in addition to principal and interest, fees and charges
due under the Agreement, any and all costs of collecting this Note, including
reasonable attorneys' fees and expenses.
The Borrowers hereby waive demand, notice, protest and presentment.
The promises and agreements in this Note are the joint and several promises
and agreements of each Co-Borrower and constitute the joint and several
obligation of each Co-Borrower. The release of any party to this Note does not
affect or release the joint and several liability of any other party. The Lender
may at its option enforce this Note against one Co-Borrower or all of the
Co-Borrowers, and the Lender is not required to resort to enforcement against
each Co-Borrower and the Lender's failure to proceed against or join each
Co-Borrower does not affect the joint and several liability of each Co-Borrower.
This Note shall be construed and enforced in accordance with the laws of
the State of Minnesota, without reference to its principles of conflicts of law.
IN WITNESS WHEREOF, each Co-Borrower has executed this Note as of the
day and year first above written.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: ________________________________
Its:________________________________
ACCREDITED HOME CAPITAL, INC.,
a Delaware corporation
By: ________________________________
Its:________________________________
-2-
EXHIBIT C-SF
REQUEST FOR ADVANCE
_____ ACCREDITED HOME LENDERS, INC.
_____ ACCREDITED HOME CAPITAL, INC.
Loan Number: ___________________________ Reviewed By: __________________
Warehouse
Mortgagor: ___________________________ Date: __________________
Address: ___________________________ Effective
___________________________ Date: __________________
Zip Code: ___________________________
Status: [_] Committed Loan Type: [_] Prime [_] FHA [_] VA
[_] Uncommitted [_] Subprime/Grade
[_] Wet Settlement [_] Received [_] RFC
[_] Repurchased [_] Non-performing
[_] Closed-end Second [_] Seasoned Mortgage Loan
[_] Section 32 [_] Eligible Subject Loan
[_] Closed Loan Term: [_] Fixed ______ Years
[_] ARM _______ Adjustment Period
[_] Balloon
Mortgage Note Amount:_____________________ Interest Rate:____________________________________
Mortgage Note Date:_______________________ Requested Warehouse Advance Amount: ______________
Investor:_________________________________ Title Company:____________________________________
Investor Contact:_________________________ Title Company Contact:____________________________
Investor Phone:___________________________ Title Company Phone:______________________________
Committed Purchase Price:_________________ Expiration Date:__________________________________
Purchase Commitment No.:__________________ Acquisition Price (if applicable):________________
FUNDING INSTRUCTIONS
[_] Wire Funding
Account to Debit:_______________________ Date of Wire:__________________________________
Amount of Wire:________________________________
Credit Acct. Name:______________________
Bank Name:______________________________ Credit Acct. No.:______________________________
City and State:_________________________ ABA No.:_______________________________________
Ref:____________________________________ Advise:________________________________________
-1-
REQUIRED DOCUMENTATION
The following documents in connection with the above request are enclosed:
RIGHT
[_] Original and 1 copy of Mortgage Note
[_] Certified copy of Mortgage
[_] Section 32 Compliance Documents (if applicable)
[_] *Copy of Investor Purchase Commitment (or satisfactory evidence thereof)
LEFT
[_] *Request for Advance (original and 1 copy)
[_] *Copy of settlement or funding check (if applicable)
[_] Recordable assignment of Mortgage
[_] Certified copies of interim assignments of Mortgage (if applicable)
Please Note: Items designated with the "*" are required prior to a Wet
Settlement Advance.
For the new value this day received, ____ACCREDITED HOME LENDERS, INC./
____ACCREDITED HOME CAPITAL, INC. (individually, a "Borrower" and collectively,
the "Borrowers"), hereby creates and grants in favor and for the benefit of
RESIDENTIAL FUNDING CORPORATION (the "Lender"), a security interest in and to
the Mortgage Loan described above, together with all related "Collateral," as
more particularly described in the Warehousing Credit and Security Agreement (as
amended, supplemented or otherwise modified) between the Borrowers and the
Lender.
ACCREDITED HOME LENDERS, INC. ACCREDITED HOME CAPITAL, INC.
Authorized Signature:______________________ Authorized Signature:______________________
-2-
EXHIBIT C-PRE
PREMIUM ADVANCE REQUEST
Date:______________
Reference is made to that certain Warehousing Credit, Term Loan and
Security Agreement, dated as of March 17, 1999, between ACCREDITED HOME LENDERS,
INC., a California corporation, ACCREDITED HOME CAPITAL, INC., a Delaware
corporation (individually a "Borrower" and collectively, the "Borrowers") and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender") (as the
same has been may be further amended, modified, supplemented, renewed or
restated from time to time, the "Agreement"). All capitalized terms used herein
and all Section numbers given herein refer to those terms and Sections set forth
in the Agreement. This Premium Advance Request is submitted to the Lender
pursuant to Section 2.2(a) of the Agreement.
The undersigned Borrower hereby requests a Premium Advance in the aggregate
principal amount of $________ to be made on ________________, 200_. After giving
effect to such Premium Advance, the aggregate principal balance of all
outstanding Premium Advances will be $________.
The aggregate Mortgage Note Amount of all Eligible Subject Loans pledged
under the Agreement as of the date hereof is $________. Two and one-half percent
of such amount is $________ ("Amount A"). [The Residual Income Value of the
amount by which the Aggregate Payment Obligation would increase upon the sale of
such Eligible Subject Loans pursuant to a Shared Execution Forward Commitment is
__% (the percentage value of the most recent addition to the Residual Income
Value of the Aggregate Payment Obligation in a Qualifying Sale), or $________
("Amount B"). Sixty percent of Amount B is $________ ("Amount c").] [The
Residual Income Value of the amount by which the Aggregate Payment Obligation
would increase upon the sale of such Eligible Subject Loans pursuant to a Shared
Execution Forward Commitment is __% (the lesser of(i) __%, the percentage value
of the most recent addition to the Residual Income Value of the Aggregate
Payment Obligation or (ii) __%, the most recent percentage value of the entire
Aggregate Payment Obligation) of the aggregate Mortgage Note Amount of all
Eligible Subject Loans pledged under the Agreement, or $________ ("Amount B").
Sixty percent of Amount B is $________ ("Amount C").] The lesser of Amount A or
Amount C is $________. The undersigned Borrower represents and warrants that it
has no reason to believe that such amounts are incorrect. The amount of the
Premium Advances requested are not more than the amount permitted by the
Agreement to be borrowed pursuant to this Advance Request.
The undersigned Borrower hereby certifies that no Default or Event of
Default has occurred and is continuing and that all of such Borrower's
representations and warranties in this Advance Request and the Agreement are
currently true and correct and (to the extent applicable on or after their
respective dates) are hereby republished. Since the Statement Date, there has
been no material adverse change in the business, financial condition or results
of operation of the Borrowers and their Subsidiaries, taken as a whole. The
undersigned Borrower acknowledges that the Lender will rely on the truth of each
statement in this Advance Request in making the requested Premium Advances.
-1-
METHOD OF ADVANCE
Account to Debit:____________________ Date of Wire:_________________________
Amount of Wire:_______________________
Credit Acct. Name:___________________
Bank Name:___________________________ Credit Acct. No.:_____________________
City and State:______________________ ABA No.:______________________________
Ref:_________________________________ Advise:_______________________________
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: ___________________________
Its: ___________________________
ACCREDITED HOME CAPITAL, INC.,
a Delaware corporation
By: ___________________________
Its: ___________________________
FOR RFC INTERNAL USE ONLY
Repetitive Code:_____________________
Date:________________________________
Wire Initiator's Initials:___________ Wire Verifier's Initials:_____________
-2-
EXHIBIT C-REO
REQUEST FOR ADVANCE REO MORTGAGE OR RECEIVABLE
Mortgage Companies: ACCREDITED HOME LENDERS, INC.
ACCREDITED HOME CAPITAL, INC.
REO Property Address: Loan Number:_____________________________
_____________________________________ Reviewed By:_____________________________
_____________________________________ Warehouse Date:__________________________
_____________________________________ Effective Date:__________________________
Requested Warehousing Amt:_______________
METHOD OF ADVANCE
Account to Debit:____________________ Date of Wire:____________________________
Credit Acct. Name:___________________ Amount of Wire:__________________________
Bank Name:___________________________ Credit Acct. No.:________________________
City and State:______________________ ABA No.:_________________________________
Ref:_________________________________ Advise:__________________________________
REQUIRED DOCUMENTATION
Attached please find the following documents in connection with the above
request (Please check attached documents below):
Right
( ) Original recorded or certified copy of REO Mortgage in favor of Lender,
together with recording information or recording instructions (REO
Advance only)
( ) Original property appraisal
Left
( ) Request for Advance (original and one (1) copy)
( ) BPO
( ) Copies of checks for recording fees and registration taxes
( ) Proposed disposition plan for REO Property
-1-
EXHIBIT C-REO
For the new value this day received, ___ ACCREDITED HOME LENDERS, INC./ ___
ACCREDITED HOME CAPITAL, INC.(individually, a "Borrower" and collectively, the
"Borrowers"), hereby creates and grants in favor and for the benefit of
RESIDENTIAL FUNDING CORPORATION (the "Lender"), a security interest in and to
the REO Property described above, together with all related "Collateral," as
more particularly described in the Warehousing Credit and Security Agreement (as
amended, supplemented or otherwise modified) between the Borrowers and the
Lender.
ACCREDITED HOME LENDERS, INC. ACCREDITED HOME CAPITAL, INC.
Authorized Signature: ________________ Authorized Signature: ________________
FOR RFC INTERNAL USE ONLY
-------------------------
Repetitive Code: ___________________ Date: ___________________________
Wire Initiator's Initials: _________ Wire Verifier's Initials: _______
-2-
EXHIBIT C-TL
TERM LOAN ADVANCE REQUEST
-------------------------
Date:___________________, 200_
Reference is made to that certain Warehousing Credit, Term Loan and
Security Agreement, dated as of March 17, 1999, between ACCREDITED HOME LENDERS,
INC., a California corporation, ACCREDITED HOME CAPITAL, INC., a Delaware
corporation (individually a "Borrower" and collectively, the "Borrowers") and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender") (as the
same has been may be further amended, modified, supplemented, renewed or
restated from time to time, the "Agreement"). All capitalized terms used herein
and all Section numbers given herein refer to those terms and Sections set forth
in the Agreement. This Term Loan Advance Request is submitted to the Lender
pursuant to Section 2.3(a).
The undersigned Borrower hereby requests a Term Loan Advance in the
aggregate principal amount of $___________ to be made on __________, 200_, of
which $__________ will be used to repay Premium Advances.
The Term Loan Collateral Value of the Aggregate Payment Obligation and
Interest-Only Certificates arising from the sale of Eligible Subject Loans to
the Lender since the date of the preceding Term Loan Advance is $_________ . The
Term Loan Collateral Value of all of the Aggregate Payment Obligation and
Interest-Only Certificates included in the Collateral is $__________ . The
outstanding principal balance of all Term Loan Advances, before giving effect to
the requested Term Loan Advance, is $__________. The outstanding principal
balance of all Premium Advances, before giving effect to the repayment of
Premium Advances with the proceeds of the requested Term Loan Advance, is
$__________ . The undersigned Borrower represents and warrants that it has no
reason to believe that any of the foregoing amounts are incorrect. The principal
amount of the Term Loan Advance will not exceed any of the limitations set forth
in the Agreement.
The undersigned Borrower hereby certifies that no Default or Event of
Default has occurred and is continuing and that all of such Borrower's
representations and warranties in this Advance Request and the Agreement are
currently true and correct and (to the extent applicable on or after their
respective dates) are hereby republished. Since the Statement Date, there has
been no material adverse change in the business, financial condition or results
of operation of the Borrowers and their Subsidiaries, taken as a whole. The
undersigned Borrower acknowledges that the Lender will rely on the truth of each
statement in this Advance Request in making the requested Term Loan Advance.
-1-
METHOD OF ADVANCE
-----------------
Account to Debit:_____________________ Date of Wire:___________________________
Amount of Wire:_________________________
Credit Acct. Name:____________________
Bank Name:____________________________ Credit Acct. No.:_______________________
City and State:_______________________ ABA No.:________________________________
Ref:__________________________________ Advise:_________________________________
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: ___________________________________
Its: ___________________________________
ACCREDITED HOME CAPITAL, INC.,
a Delaware corporation
By: ___________________________________
Its: ___________________________________
-2-
EXHIBIT D-NP/REO
PROCEDURES AND DOCUMENTATION FOR WAREHOUSING
NON-PERFORMING MORTGAGE LOANS AND REO
PROPERTIES
ACCREDITED HOME LENDERS, INC.
ACCREDITED HOME CAPITAL, INC.
The following procedures and documentation requirements must be observed in all
respects by the Borrower. All documents must be satisfactory to the Lender in
its sole discretion. Terms used below, which are not otherwise defined, shall
have the meanings given them in the Agreement. The HUD, ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇
Mac form numbers referred to herein are for convenience only and the Borrower
shall use the equivalent forms required at the time of delivery of the Mortgage
Loans or Mortgage-backed Securities. All Requests for Advance (Exhibit C-SF or
Exhibit C-REO) and Collateral Documents, should be submitted to the Lender in a
top tabbed, legal size manila file folder, hole-punched and acco-fastened in the
order specified in the Request for Advance (Exhibit C-SF or Exhibit C-REO). Each
folder should be labeled with the mortgagor name(s), Borrower loan number and
Borrower name.
I. Prior to making a Nonperforming Advance, the Lender must receive the
following SEVENTEEN (17) Days prior to such Nonperforming Advance.
(1) Original Request for Advance against Single Family Mortgage
Loans (Exhibit C-SF) and one (1) copy of same.
(2) Investor repurchase demand letter (if applicable).
(3) Summary of Mortgage Loan documentation or Investor problems,
expected cure period, and servicing records (including payment
history).
(4) If not previously delivered to the Lender, original signed
Mortgage Note, endorsed by the Borrower in blank with
corresponding interim endorsements, if applicable, and one copy
of same.
(5) If not previously delivered to the Lender, original or certified
true (by recorder's office or escrow/title company) copy of the
Mortgage.
(6) If not previously delivered to the Lender, original or certified
true (by recorder's office or escrow/title company) copies of all
interim assignments of the Mortgage. (If an interim assignment
has not been recorded or sent for recordation, such original
interim assignment). Mortgage Note must bear corresponding
endorsements.
-1-
(7) If not previously delivered to the Lender, an assignment of the
Mortgage, endorsed by the Borrower in blank, in recordable form
but unrecorded.
(8) Original or copy of ALTA Mortgagee's Policy of Title Insurance
or equivalent thereto, together with a copy of the preliminary
title report for the Mortgage Loan.
(9) Original VA Loan Guaranty Certificate, FHA Mortgage Insurance
Certificate, or copy of Private Mortgage Insurance Certificate
(if applicable).
(10) Original Appraisal of Mortgaged Property.
(11) Proof of all required tax payments.
(12) Proof of acceptable fire and casualty insurance.
(13) Completed Borrower Worksheet Concerning Applicability of Section
32 of Regulation Z (12 CFR Section 226.32) and, if Section 32
applies, copies of the disclosure and other related documentation
delivered to the mortgagor, or executed by the mortgagor,
evidencing compliance with Section 32 (if applicable).
(14) All other documentation required by the Lender.
II. Prior to the making of an REO Advance, the Lender must receive the
following SEVENTEEN (17) Days prior to such REO Advance.
(1) Original Request for Advance against REO Property(Exhibit C-REO).
(2) Original or certified true (by recorder's office) copy of REO
Mortgage in favor of Lender, together with recording information
or recording instructions.
(3) Original Appraisal of Mortgaged Property.
(4) Proof of all required tax payments.
(5) Proof of acceptable fire and casualty insurance.
(6) Servicing records (including previous payment history).
(7) Proposed disposition plan for REO Property.
(8) Evidence that recording fees and registration taxes have been
paid.
(9) ALTA Mortgagee's Policy of Title Insurance or equivalent thereto
obtained in connection with the loan closing.
(10) Preliminary title report (or the equivalent) dated no more than
30 days prior to the date of REO Advance evidencing Borrower's
ownership of REO Property.
-2-
(11) All other documentation required by the Lender.
III. The Lender exclusively shall deliver the Mortgage Notes and other
original Collateral Documents evidencing Pledged Mortgages or Pledged
Securities and related pool documents to the Investor, pool custodian
or attorneys conducting foreclosure sales. Unless otherwise agreed in
writing the procedures set forth in Exhibit D-SF are to be followed
for deliveries of Pledged Mortgages to Investors or Pool Custodian.
The following procedures are to be followed for deliveries of Pledged
Mortgages to attorneys conducting a foreclosure sale:
No later than one (1) Business Day prior to the requested
shipment date and no later than one (1) Business Day prior to
required delivery date to the Attorney conducting the foreclosure
sale, the Lender must receive signed shipping instructions for
the delivery of the Pledged Mortgages including the following:
(1) Name and address of the office of the attorney to which the
Collateral Documents are to be shipped, the desired shipping
date and the preferred method of delivery;
(2) Names of Mortgagor and Mortgage Note Amounts of Pledged
Mortgages to be shipped; and
(3) Confirmation that the attorney will execute and return the
bailee letter (acknowledged instructions from the Borrower
to do so).
Upon instruction by the Borrower, the Lender will complete the endorsement of
the Mortgage Note and make arrangements for the delivery of the original
Collateral Documents evidencing Pledged Mortgages or Pledged Securities and
related original pool documents with the appropriate bailee letter to the
Investor, Approved Custodian, other pool custodian or attorney conducting a
foreclosure sale. Upon receipt of Mortgage-backed Securities, the Lender will
cause such Mortgage-backed Securities to be delivered to the Investor which
issued the Purchase Commitment. Mortgage-backed Securities will be released to
the Investor only upon payment of the purchase proceeds to the Lender. Cash
proceeds of sales of Pledged Mortgages and Pledged Securities shall be applied
to related Advances outstanding under the Commitment. Provided no Default
exists, the Lender shall return any excess proceeds of the sale of Mortgage
Loans or Mortgage-backed Securities to the Borrower, unless otherwise instructed
in writing.
-3-
EXHIBIT D-SF
PROCEDURES AND DOCUMENTATION FOR WAREHOUSING
SINGLE FAMILY MORTGAGE LOANS
ACCREDITED HOME LENDERS, INC.
ACCREDITED HOME CAPITAL, INC.
The following procedures and documentation requirements must be observed in all
respects by the Borrower. All documents must be satisfactory to the Lender in
its sole discretion. The HUD, ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac form numbers referred
to in this Exhibit are for convenience only. The Borrower must use the
equivalent forms required at the time of delivery of the Mortgage Loans or
Mortgage-backed Securities. Except for documents submitted through RFConnects
Delivery, all Advance Requests and Collateral Documents must be submitted to the
Lender in a manner satisfactory to the Lender. If a Wet Settlement Advance is
being requested, the Advance Request and required collateral Documents should be
submitted in accordance with the above instructions. The remaining Collateral
Documents must be submitted with a cover letter identifying the mortgagor
name(s) and the Borrower's loan number.
I. PRIOR TO MAKING A WET SETTLEMENT ADVANCE, THE LENDER MUST RECEIVE THE
FOLLOWING:
(1) An estimate of the amount of the requested Advance 1 Business Day
prior to the date the requested Advance is to be made.
(2) A copy of settlement or funding check issued to the escrow/title
company, if applicable.
(3) Either an electronic Advance Request (including RFConnects Pledge
Agreement and list of Mortgage Loans) or a written Request for
Advance against Single Family Mortgage Loans (Exhibit C-SF) and 1 copy
of same.
The following must be received by the Lender within 7 Business Days of the
date the Wet Settlement Advance is to be made:
(4) The original signed Mortgage Note, endorsed by the Borrower in blank
with corresponding interim endorsements, if applicable, and 1 copy of
same.
(5) A copy of the Mortgage sent for recording certified true by the
Borrower or the escrow/title company.
(6) Copies of all interim assignments of the Mortgage certified true by
the Borrower or the escrow/title company (recorded or sent for
recordation). Mortgage Note must bear corresponding endorsements.
-1-
(7) An assignment of the Mortgage, endorsed by the Borrower in blank, in
recordable form but unrecorded.
(8) Completed Borrower Worksheet Concerning Applicability of Section 32
of Regulation Z (12 CFR Section 226.32) and, if Section 32 applies,
copies of the disclosure and other related documentation delivered to
the mortgagor, or executed by the mortgagor, evidencing compliance
with Section 32 (if applicable).
II. PRIOR TO MAKING AN ADVANCE (OTHER THAN A WET SETTLEMENT ADVANCE OR AN
ADVANCE AGAINST A SEASONED MORTGAGE LOAN), THE LENDER MUST RECEIVE ALL OF
THE COLLATERAL DOCUMENTS LISTED IN SECTION I ABOVE.
III. AT LEAST SEVENTEEN (17) DAYS PRIOR TO MAKING AN ADVANCE AGAINST A SEASONED
MORTGAGE LOAN, THE LENDER MUST RECEIVE THE FOLLOWING COLLATERAL DOCUMENTS:
(1) All of the Collateral Documents listed in Section I above (if
applicable).
(2) A copy of the preliminary title report and title insurance policy for
the Mortgage Loan.
(3) Proof of all required tax payments.
(4) A copy of the original appraisal related to the Mortgage Loan.
(5) Proof of acceptable fire and casualty insurance.
(6) Servicing records.
(7) All other documentation required by the Lender.
IV. ONLY THE LENDER WILL DELIVER THE MORTGAGE NOTES AND OTHER ORIGINAL
COLLATERAL DOCUMENTS EVIDENCING PLEDGED MORTGAGES OR PLEDGED SECURITIES AND
RELATED POOL DOCUMENTS TO THE INVESTOR OR POOL CUSTODIAN, UNLESS
OTHERWISE AGREED IN WRITING.
A. The following procedures must be followed for deliveries of Pledged
Mortgages:
No later than 1 Business Day prior to the requested shipment date, the
Lender must receive the following:
(1) Signed shipping instructions or authenticated shipping instructions
sent via RFConnects Delivery for the delivery of the Pledged Mortgages
including the following:
-2-
(a) Name and address of the office of the Investor to which the loan
documents are to be shipped, the desired shipping date and the
preferred method of delivery;
(b) Instructions for endorsement of the Mortgage Note;
(c) Names of mortgagor(s), Mortgage Note Amounts of Pledged Mortgages
to be shipped and the Borrower's loan number; and
(d) Commitment number and expiration date of the Purchase Commitment.
(2) For deliveries of Pledged Mortgages to ▇▇▇▇▇▇ Mae for cash purchase,
the following additional documents are required:
(a) Copy of Loan Schedule (▇▇▇▇▇▇ ▇▇▇ Form 1068 or 1069) showing the
Lender's designated ▇▇▇▇▇▇ Mae payee code as recipient of the
loan purchase proceeds.
(3) For deliveries of Pledged Mortgages to ▇▇▇▇▇▇▇ Mac for cash purchase,
the following additional documents are required:
(a) Original completed Warehouse Lender Release of Security Interest
(▇▇▇▇▇▇▇ Mac Form 996) to be executed by the Lender, designating
the Lender as the Warehouse Lender and showing the Cash
Collateral Account designated by the Lender as the receiving
account for loan purchase proceeds; and
(b) Copy of Wire Transfer Authorization for a Cash Warehouse Delivery
(▇▇▇▇▇▇▇ Mac Form 987), designating the Lender as the Warehouse
Lender and showing the Cash Collateral Account designated by the
Lender as the receiving account for loan purchase proceeds.
B. In the event Pledged Mortgages are delivered to a pool custodian, other
than an Approved Custodian, payment of the related Advance is required
within 2 Business Days of shipment.
The following procedures are to be followed for deliveries of Pledged
Mortgages to Approved Custodians:
No later than 1 Business Day prior to the requested shipment date, the
Lender must receive the following:
(1) Signed shipping instructions or authenticated shipping instructions
sent via RFConnects Delivery for the delivery of the Pledged Mortgages
to the Approved Custodian including the following:
-3-
(a) Name and address of the office of the Approved Custodian to which the
loan document are to be shipped, the desired shipping date and the
preferred method of delivery;
(b) Instructions for endorsement of the Mortgage Note;
(c) Name(s) of mortgagor(s) and Mortgage Note Amounts of Pledged Mortgages
to be shipped and the Borrower's loan number; and
(d) Commitment number and expiration date of the Purchase Commitment for
the Pledged Securities.
(2) For ▇▇▇▇▇▇ Mae Mortgage-backed Securities issuance, the following
additional documents are required:
(a) Copy of Schedule of Mortgages (▇▇▇▇▇▇ ▇▇▇ Form 2005 or 2025); and
(b) Copy of Delivery Schedule (▇▇▇▇▇▇ Mae Form 2014), instructing ▇▇▇▇▇▇
Mae to issue the Mortgage-backed Securities in the name of the
Borrower with the Lender as pledgee and to deliver the Mortgage-backed
Securities to the Lender's custody account at The Chase Manhattan Bank
(CHASE NYC/CUST/G55026) and bearing the following instructions: "These
instructions may not be changed without the prior written consent of
Residential Funding Corporation, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Managing Director
or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Director."
(3) For ▇▇▇▇▇▇▇ Mac Mortgage-backed Securities issuance, the following
additional documents are required:
(a) Copy of Settlement Information and Delivery Authorization (▇▇▇▇▇▇▇ Mac
Form 939), designating the Lender as the Warehouse Lender and
instructing ▇▇▇▇▇▇▇ Mac to deliver the Mortgage-backed Securities to
the Lender's custody account at The Chase Manhattan Bank
(CHASE/NYC/CUST/G55026); and
(b) Original Warehouse Lender Release of Security Interest (▇▇▇▇▇▇▇ Mac
Form 996) to be executed by the Lender, designating the Lender as the
Warehouse Lender and instructing ▇▇▇▇▇▇▇ Mac to deliver the
Mortgage-backed Securities to the Lender's custody account at The
Chase Manhattan Bank (CHASE/NYC/CUST/G55026).
(4) For ▇▇▇▇▇▇ ▇▇▇ Mortgage-backed Securities issuance, the following
additional documents are required:
(a) Signed copy of schedule of Mortgages (HUD Form 11706);
(b) Signed copy of Schedule of Subscribers (HUD Form 11705) instructing
▇▇▇▇▇▇ Mae to issue the Mortgage-backed Securities in the name of the
-4-
Borrower and designating The Chase Manhattan bank as Agent for the
Lender as the subscriber, using the following language: THE CHASE
MANHATTAN BANK AS AGENT FOR RESIDENTIAL FUNDING CORPORATION SEG ACCT
MANUF/CUST/G55026). The following instructions must also be included
on the form: "These instructions may not be changed without the prior
written consent of Residential Funding Corporation, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Managing Director or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Director;" and
(c) Completed Original Release of Security Interest (HUD Form 117llA) to
be executed by the Lender.
(5) No later than 2 Business Days prior to the Settlement Date for the
Mortgage-backed Securities, the Lender must receive signed Securities
Delivery Instructions form attached hereto as Schedule I.
Upon instruction by the Borrower, the Lender will complete the endorsement of
the Mortgage Note and make arrangements for the delivery of the original
Collateral Documents evidencing Pledged Mortgages or Pledged Securities and
related original pool documents with the appropriate bailee letter to the
Investor, Approved Custodian, or other pool custodian. Upon receipt of
Mortgage-backed Securities, the Lender will cause those Mortgage-backed
Securities to be delivered to the Investor that issued the Purchase Commitment.
Mortgage-backed Securities will be released to the Investor only upon payment of
the purchase proceeds to the Lender. Cash proceeds of sales of Pledged Mortgages
and Pledged Securities will be applied to related Advances outstanding under the
Commitment. Provided no Default exists, the Lender will return any excess
proceeds of the sale of Mortgage Loans or Mortgage-backed Securities to the
Borrower, unless otherwise instructed in writing.
-5-
SCHEDULE I TO EXHIBIT D-SF
RESIDENTIAL FUNDING CORPORATION
WAREHOUSE LENDING DIVISION
SECURITY DELIVERY INSTRUCTIONS
--------------------------------------------------------------------------------
INSTRUCTIONS MUST BE RECEIVED 2 BUSINESS DAYS IN ADVANCE OF PICK-UP/DELIVERY
BOOK-ENTRY DATE: ______________________ SETTLEMENT DATE: ___________________
ISSUER: _______________________________ SECURITY: $ ________________________
NO. OF CERTIFICATES: __________________ 1) _________________________________
2) _________________________________
3) _________________________________
CUSIP NO. _________________
Pool No.: _________________ MI No.: ____________ Coupon Rate: _________________
Issue Date (M/D/Y):______________________________ Maturity Date (M/D/Y) ________
POOL TYPE (circle one):
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ MAE I ▇▇▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇ Mac: FIXED ARM DISCOUNT NOTE
▇▇▇▇▇▇ Mae: FIXED ARM DISCOUNT NOTE DEBENTURES REMIC
DELIVER TO: ( ) Versus Payment
_________________________
DVP AMOUNT $_____________
_________________________
( ) Free Delivery
_________________________
DELIVER TO: ( ) Versus Payment
_________________________
DVP AMOUNT $_____________
_________________________
( ) Free Delivery
_________________________
DELIVER TO: ( ) Versus Payment
_________________________
DVP AMOUNT $____________
_________________________
( ) Free Delivery
AUTHORIZED SIGNATURE: __________________________________________________________
TITLE: _________________________________________________________________________
-6-
EXHIBIT G
SUBSIDIARIES
States in Which
Subsidiary Qualified to do Percentage
Borrower Name State of Formation Business Owned
-------- ---------- ------------------ ---------------- -----------
Accredited Home Accredited Home Delaware California 100%
Lenders, Inc. Capital, Inc.
Accredited Home Delaware California 100%
Acceptance, Inc.
Accredited Home
Capital, Inc. None
G-1
EXHIBIT I-SF
OFFICER'S CERTIFICATE
This Officer's Certificate is submitted to the Lender pursuant to Section 6.2(c)
of the Warehousing Credit, Term Loan and Security Agreement between ACCREDITED
HOME LENDERS, INC., a California corporation ("AHL"), and ACCREDITED HOME
CAPITAL, INC., a Delaware corporation ("AHC") (AHL and AHC sometimes referred to
individually as a "Borrower" and are collectively referred to as "Borrowers")
and RESIDENTIAL FUNDING CORPORATION ("Lender"), dated as of March 17, 1999 (as
amended, restated, renewed or replaced, "Agreement"). Capitalized terms and
Section numbers used in this Officer's Certificate without further definition
refer to those terms and Sections set forth in the Agreement.
The undersigned hereby certify to Lender that as of the close of business on
______________ 20__ ("Statement Date") and with respect to the Borrowers (and,
if applicable, the Borrowers' Subsidiaries on a consolidated basis):
1) As demonstrated by the attached calculations supporting this Officer's
Certificate, each of the Borrowers satisfied the covenants set forth in
Sections 7.7, 7.9 and 7.10 and AHL satisfied the covenants set forth in
Sections 7.6 and 7.8 or, if the Borrowers or AHL 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 the Borrowers or AHL has taken, is taking or proposes to take
with respect to that Default or Event of Default.
2) The 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) The Borrowers have not made any payments in advance of the scheduled
maturity date on any Subordinated Debt, and the Borrowers have not incurred
any additional Debt that must be subordinated under the terms of Section
6.10.
4) The Borrowers were in full compliance with all applicable Investor net
worth requirements, and in good standing with each Investor.
5) The undersigned have reviewed the terms of the Agreement and have made, or
caused to be made under our supervision, a review in reasonable detail of
the transactions and conditions of the Borrowers (and; if applicable, the
Borrowers' Subsidiaries). That review has not disclosed, and the
undersigned 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 the
Borrowers have taken, are taking or propose to take with respect that
Default or Event of Default.
-1-
6) Pursuant to Section 6.2 of the Agreement, enclosed are the financial
statements of the Borrowers 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 the Borrowers (and, if
applicable, the Borrowers' Subsidiaries on consolidated basis) as of the
Statement Date.
Dated: ________________________ , 200_
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: _______________________________
Its: _______________________________
ACCREDITED HOME CAPITAL, INC.,
a Delaware corporation
By: _______________________________
Its: _______________________________
-2-
CALCULATIONS SUPPORTING OFFICER'S CERTIFICATE
Borrowers Names: ACCREDITED HOME LENDERS, INC. and ACCREDITED HOME
CAPITAL, INC. (and, if applicable, its Subsidiaries)
Statement Date: ___________________________
All financial calculations set forth in this Officer's Certificate are as of the
Statement Date.
I. TANGIBLE NET WORTH
A. The Tangible Net Worth of each Borrower is:
AHL AHC
-------------------------------------
Excess of total assets over total liabilities: $______________ $______________
Plus: Subordinated Debt not due within one
year of the Statement Date (or any portion
of that Subordinated Debt): $______________ $______________
Minus: Advances or loans to shareholders,
directors, officers, employees or
Affiliates: $______________ $______________
Minus: Investments in Affiliates: $______________ $______________
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. TANGIBLE NET WORTH (AS SET FORTH IN IMMEDIATELY
PRIOR OFFICER'S CERTIFICATE)
C. Net Income of the Borrowers for Fiscal
Quarters ending after Closing Date:
March 31, 1999: $______________
June 30, 1999: $______________
September 30, 1999: $______________
-3-
December 31, 1999: $______________
March 31, 2000: $______________
June 30, 2000: $______________
September 30, 2000: $______________
December 31, 2000: $______________
March 31, 2001: $______________
June 30, 2001: $______________
September 30, 200l: $______________
December 31, 200l: $______________
C. Requirements of Section 7.7 of the Agreement:
AHL'S TANGIBLE NET WORTH MUST BE AT LEAST $6,000,000, PLUS 50% OF
ALL POSITIVE QUARTERLY NET INCOME SINCE THE DATE OF THIS
AGREEMENT.
REQUIRED MINIMUM AT STATEMENT DATE: $______________
AHC'S TANGIBLE NET WORTH MUST NOT AT ANY TIME BE LESS THAN OR EQUAL
TO $0.
D. Covenant Satisfied: ______ Covenant Not Satisfied: _______
II. DEBT OF AHL
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: Deferred taxes arising from capitalized
excess servicing fees and capitalized
servicing rights: $__________
Minus: Subordinated Debt not due within one
year of the Statement Date (or any portion
of that Subordinated Debt): $__________
A. DEBT (Total): $__________
Minus: Debt arising under Hedging Arrangements
(to the extent of assets arising
under those Hedging Arrangements): $__________
B. DEBT (adjusted for Hedging Arrangements): $__________
-4-
III. RATIO OF AHL'S DEBT TO TANGIBLE NET WORTH
A. The ratio of AHL's Debt to Tangible Net Worth is ______________ to 1
(II.B. to I.A.):
B. Requirements of Section 7.6 of the Agreement:
AHL'S RATIO OF DEBT TO TANGIBLE NET WORTH (CALCULATED ON A
CONSOLIDATED BASIS) MUST NOT EXCEED 17 TO 1.
C. Covenant Satisfied: ____ Covenant Not Satisfied: ____
IV. LIQUID ASSETS OF AHL
AHL has the following unrestricted unencumbered assets:
Cash $_____________
Funds on deposit in any United States bank: $_____________
Investment grade commercial paper: $_____________
Money market funds: $_____________
Marketable securities: $_____________
B. Plus: Mortgage Loans and Mortgage-backed
Securities held for sale (valued in
accordance with GAAP): $_____________
C. Minus: Outstanding principal of Debt against
which those Mortgage Loans and Mortgage-
backed Securities are pledged as collateral: $_____________
D. LIQUID ASSETS $_____________
E. Requirements of Section 7.8 of the Agreement:
AHL'S LIQUID ASSETS MUST NOT BE LESS THAN $1,000,000.
F. Covenant Satisfied: ____ Covenant Not Satisfied: _____
V. QUARTERLY NET INCOME OF THE BORROWERS
AHL AHC
--------------------------
A. Net Income of the Borrowers for the most
recently completed fiscal quarter dated: $___________ $__________
___________:
-5-
B. Requirements of Section 7.9 of the Agreement:
THE NET INCOME OF THE BORROWERS FOR ANY FISCAL QUARTER ENDED AFTER THE DATE
OF THIS AGREEMENT SHALL NOT BE LESS THAN ZERO.
C. Covenant Satisfied: ___ Covenant Not Satisfied: ___
VI. TRANSACTIONS WITH AFFILIATES
AHL AHC
------------------------------------
A. Loans, advances, and extensions
of credit by Borrowers to their
Affiliates during the current
fiscal year: $___________ $____________
B. Capital contributions made by the
Borrowers during the current fiscal
year to Affiliates other than AHC
and the Vicon Affiliates: $___________ $____________
C. Transfers, sales, pledges,
assignments or other dispositions
of assets made by the Borrowers
during the current fiscal year to
or on behalf of Affiliates other
than sales of Mortgage Loans from
AHL to AHC and purchases of Mortgage
Loans by AHL from AHC and the Vicon
Affiliates: $___________ $____________
D. Management fees paid by the
Borrowers during the current
fiscal year to Affiliates other
than by AHC to AHL: $___________ $____________
E. Requirements of Section 7.10 of
the Agreement:
1. THE BORROWERS MAY NOT MAKE ANY LOANS, ADVANCES, EXTENSIONS OF
CREDIT OR CAPITAL CONTRIBUTIONS TO THEIR AFFILIATES OTHER THAN
(I) INVESTMENTS BY AHL IN AHC AND (II) INVESTMENTS BY AHL
TOTALING NOT MORE THAN $350,000, IN THE AGGREGATE, IN VICON
FINANCIAL SERVICES, INC. AND IN ONE OR MORE VICON AFFILIATES.
Covenant Satisfied: ___ Covenant Not Satisfied: ___
2. THE BORROWERS MAY NOT TRANSFER, SELL, PLEDGE, ASSIGN OR MAKE ANY
OTHER DISPOSITION OF ASSETS TO OR ON BEHALF OF THEIR AFFILIATES
OTHER THAN SALES OF MORTGAGE LOANS IN THE ORDINARY COURSE OF
BUSINESS FROM AHL TO AHC.
Covenant Satisfied: ___ Covenant Not Satisfied: ___
3. BORROWER MAY NOT MERGE OR CONSOLIDATE WITH, OR PURCHASE OR
ACQUIRE ANY ASSETS FROM, ITS AFFILIATES OTHER THAN PURCHASES OF
MORTGAGE LOANS IN THE ORDINARY COURSE OF BUSINESS BY AHL (I) FROM
ONE OR MORE VICON AFFILIATES OR (II) FROM AHC.
Covenant Satisfied: ___ Covenant Not Satisfied: ___
-6-
4. BORROWER MAY NOT PAY ANY MANAGEMENT FEES TO ITS AFFILIATES OTHER
THAN THE PAYMENT OF MANAGEMENT FEES BY AHC TO AHL AS LONG AS
THE SERVICES TO BE PROVIDED BY AHL AND THE MANAGEMENT FEES TO BE
PAID BY AHC FOR THEM ARE NO LESS FAVORABLE TO AHL THAN THOSE AHC
WOULD HAVE OBTAINED IN A COMPARABLE TRANSACTION WITH AN UNRELATED
PERSON.
Covenant Satisfied: ___ Covenant Not Satisfied: ___
-7-
EXHIBIT N-l
THE RFCONNECTS PLEDGE AGREEMENT
FOR VALUABLE CONSIDERATION, ACCREDITED HOME LENDERS, INC., a California
corporation ("Borrower") grants to RESIDENTIAL FUNDING CORPORATION ("Lender") a
security interest in the Mortgage Loans described on the list attached to this
Pledge Agreement and all notes and documents evidencing, creating or securing
the same (the "Pledged Loans") to secure the payment of all of the Obligations
of Borrower, including, without limitation, all Obligations of Borrower under
that Warehousing Credit and Security Agreement dated March 17, 1999, as amended,
between Borrower, Accredited Home Capital, Inc., a Delaware corporation, and
Lender (as amended or supplemented, the "Agreement").
Borrower will deliver the Pledged Mortgages to Lender as required by the
Agreement.
Borrower agrees that this Pledge Agreement is binding upon and will inure
to the benefit of the legal representatives, successors and assigns of Lender.
All rights, interest, duties and liabilities of Borrower and Lender under
this Pledge Agreement will be determined according to the laws of the State of
Minnesota.
All capitalized terms used in this Pledge Agreement that are not otherwise
defined above are defined in the Agreement.
IN WITNESS WHEREOF, Borrower has caused this Pledge Agreement to be
executed by its duly authorized officers or agents as of this ____ day of _____,
200_.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: ______________________________
Its: ______________________________
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By: ______________________________
Its: ______________________________
-1-
EXHIBIT N-2
THE RFCONNECTS PLEDGE AGREEMENT
FOR VALUABLE CONSIDERATION, ACCREDITED HOME CAPITAL, INC., a Delaware
corporation ("Borrower") grants to RESIDENTIAL FUNDING CORPORATION ("Lender") a
security interest in the Mortgage Loans described on the list attached to this
Pledge Agreement and all notes and documents evidencing, creating or securing
the same (the "Pledged Loans") to secure the payment of all of the Obligations
of Borrower, including, without limitation, all Obligations of Borrower under
that Warehousing Credit and Security Agreement dated March 17, 1999, as amended,
between Borrower, Accredited Home Lenders, Inc., a California corporation, and
Lender (as amended or supplemented, the "Agreement").
Borrower will deliver the Pledged Mortgages to Lender as required by the
Agreement.
Borrower agrees that this Pledge Agreement is binding upon and will inure
to the benefit of the legal representatives, successors and assigns of Lender.
All rights, interest, duties and liabilities of Borrower and Lender under
this Pledge Agreement will be determined according to the laws of the State of
Minnesota.
All capitalized terms used in this Pledge Agreement that are not otherwise
defined above are defined in the Agreement.
IN WITNESS WHEREOF, Borrower has caused this Pledge Agreement to be
executed by its duly authorized officers or agents as of this ____ day of _____,
200_.
ACCREDITED HOME CAPITAL, INC.,
a Delaware corporation
By: ______________________________
Its: ______________________________
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By: ______________________________
Its: ______________________________
-1-
EXHIBIT P
TERMS OF GUARANTEED OBLIGATIONS
Each Borrower agrees to the following terms with respect to Advances made by
Lender to the other Borrower:
1. Each Borrower irrevocably, unconditionally and absolutely guarantees to
Lender the due and prompt payment, and not just the collectibility, of the
principal of, and interest, fees and late charges and all other indebtedness, if
any, on the Advances made to the other Borrower when due, whether at maturity,
by acceleration or otherwise all at the times and places and at the rates
described in, and otherwise according to the terms of the Notes and the
Agreement, whether now existing or hereafter created or arising.
2. Each Borrower further hereby irrevocably, unconditionally and absolutely
guarantees to Lender the due and prompt performance by the other Borrower of all
duties, agreements and obligations of the other Borrower contained in the Notes
and the Agreement, and the due and prompt payment of all costs and expenses
incurred, including, without limitation, attorneys' fees, court costs and all
other litigation expenses (including but not limited to expert witness fees,
exhibit preparation, and courier, postage, communication and document copying
expenses), in enforcing the payment and performance of the Notes and the
Agreement from the other Borrower (the payment and performance of the items set
forth in Paragraphs 1 and 2 of this Exhibit P are collectively referred to as
the "Other Borrower Debt").
3. In the event the other Borrower at any time fails to pay Lender any Other
Borrower Debt when due, whether by acceleration or otherwise, each Borrower
promises to pay such amount to Lender immediately, together with all collection
costs and expenses, including, without limitation, attorneys' fees, court costs
and all other litigation expenses (including but not limited to expert witness
fees, exhibit preparation, and courier, postage, communication and document
copying expenses).
4. Each Borrower (a) agrees to any modifications of any terms or conditions of
any Other Borrower Debt and/or to any extensions or renewals of time of payment
or performance by the other Borrower; (b) agrees that it is not necessary for
Lender to resort to legal remedies against the other Borrower, nor to take any
action against any other Person obligated (an "Obliger") on or against any
collateral for payment or performance of the Other Borrower Debt before
proceeding against such Borrower; (c) agrees that no release of the other
Borrower or any other guarantor or Obligor, or of any collateral, for the Other
Borrower Debt, whether by operation of law or by any act of Lender, with or
without notice to such Borrower, shall release such Borrower; and (d) waives
notice of demand, dishonor, notice of dishonor, protest, and notice of protest
and waive, to the extent permitted by law, all benefit of valuation,
appraisement, and exemptions under the laws of the state of Minnesota or any
other state or territory of the United States.
5. The obligations of each Borrower for the Other Borrower Debt shall be
primary, absolute and unconditional, and shall remain in full force and effect
without regard to, and shall not be impaired or affected by: (a) the
genuineness, validity, regularity or enforceability of, or any amendment or
change in the Agreement or the Notes, or any change in or extension of the
manner, place or terms of payment of, all or any portion of the Other Borrower
Debt; (b) the taking or failure to take any action to enforce the Agreement or
the Notes, or the exercise or failure to exercise any remedy, power or privilege
contained therein or available at law or otherwise, or the waiver by Lender of
any provisions of the Agreement or the Notes; (c) any impairment, modification,
change, release or limitation in any manner of the liability of the other
Borrower or its estate in bankruptcy, or of any remedy for the enforcement of
the other Borrower's liability, resulting from the operation of any present or
future provision of the bankruptcy laws or any other statute or regulation, or
the
P-1
dissolution, bankruptcy, insolvency, or reorganization of the other Borrower;
(d) the merger or consolidation of the other Borrower, or any sale or transfer
by the other Borrower of all or part of its assets or property; (e) any claim
such Borrower may have against the other Borrower or any other Obligor,
including any claim of contribution; (f) the release, in whole or in part, of
any other guarantor (if more than one), the other Borrower or any other Obligor;
(g) any other action or circumstance which (with or without notice to or
knowledge of such Borrower) might in any manner or to any extent vary the risks
of such Borrower or otherwise constitute a legal or equitable discharge or
defense, it being understood and agreed by each Borrower that its obligations
for the Other Borrower Debt will not be discharged except by the full payment
and performance of the Other Borrower Debt.
6. Lender shall have the right to determine how, when and what application of
payments and credits, if any, whether derived from either Borrower or from any
other source, shall be made on the Obligations and any other indebtedness owed
by either Borrower and/or any other Obligor to Lender.
7. The obligations of each Borrower hereunder will continue to be effective, or
will be automatically reinstated, as the case may be, if at any time the
performance or the payment, as the case may be, in whole or in part, of any of
the Other Borrower Debt is rescinded or must otherwise be restored or returned
by Lender (as a preference, fraudulent conveyance or otherwise) upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of either
Borrower or any other person or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to either Borrower or any other Person, or any substantial part of its property,
or otherwise, all as though such payments had not been made. If an Event of
Default shall at any time have occurred and be continuing or shall exist and
declaration of default or acceleration under or with respect to the Other
Borrower Debt shall at such time be prevented by reason of the pendency against
either Borrower or any other Person of a case or proceeding under a bankruptcy
or insolvency law, each Borrower agrees that its obligations for the Other
Borrower Debt shall be deemed to have been declared in default or accelerated
with the same effect as if such obligations had been declared in default and
accelerated in accordance with their respective terms and each Borrower shall
forthwith perform or pay, as the case may be, as required hereunder in
accordance with the terms hereunder without further notice or demand.
8. Each Borrower hereby irrevocably waives any claim or other rights that it may
now or hereafter acquire against the other Borrower that arises from the
existence, payment, performance or enforcement of such Borrower's obligations
for the Other Borrower Debt, including any right of subrogation, reimbursement,
exoneration or indemnification, any right to participate in any claim or remedy
of Lender against the other Borrower or any collateral that Lender now has or
hereafter acquires, whether or not such claim, remedy or right arises in equity
or under contract, statute or common law, including the right to take or receive
from the other Borrower directly or indirectly, in cash or other property or by
set-off or in any manner, payment or security on account of such claim or other
rights. If any amount shall be paid to either Borrower in violation of the
preceding sentence and the Other Borrower Debt shall not have been paid and
performed in full, such amount shall be deemed to have been paid to such
Borrower for the benefit of, and held in trust for, Lender and shall immediately
be paid to Lender to be credited and applied to the Other Borrower Debt, whether
matured or unmatured. Notwithstanding the blanket waiver of subrogation rights
as set forth above, each Borrower hereby specifically acknowledges that any
subrogation rights that it may have against the other Borrower or any collateral
that Lender now has or hereafter acquires may be destroyed by a nonjudicial
foreclosure of the collateral. This may give such Borrower a defense to a
deficiency judgment against it. Such Borrower hereby irrevocably waives such
defense. Each Borrower acknowledges that it will receive direct and indirect
benefits from the arrangements contemplated by the Agreement and the Notes and
that the waivers set forth in this Section are knowingly made in contemplation
of such benefits.
9. No postponement or delay on the part of Lender in the enforcement of any
right with respect to the Obligations of either Borrower, including, without
limitation, the Other Borrower Debt, shall constitute a waiver of such right and
all rights of Lender hereunder shall be cumulative
P-2
and not alternative and shall be in addition to any other rights granted to
Lender in any other agreement or by law.
10. Any indebtedness of either Borrower now or hereafter held by the other
Borrower is hereby subordinated to the indebtedness of the Borrowers to Lender,
and such indebtedness of either Borrower to the other Borrower shall, if Lender
so requests, be collected, enforced and received by the Borrower to which it is
owed as trustee for Lender and be paid over to Lender on account of the
indebtedness of the other Borrower to Lender.
P-3
SEVENTH AMENDMENT
TO
WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT
THIS SEVENTH AMENDMENT TO WAREHOUSING CREDIT, TERM LOAN AND SECURITY
AGREEMENT (this "Amendment") is entered into as of this 19th day of December,
2001, by and between ACCREDITED HOME LENDERS, INC., a California corporation
(the "Borrower") and RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the "Lender").
WHEREAS, the Borrower and the Lender have entered into a single family
revolving warehouse facility and a term loan facility as evidenced by a Second
Amended and Restated Warehousing Promissory Note in the principal sum of
$208,100,000 dated September 26, 2001, a Sublimit Promissory Note in the
principal amount of $10,500,000 dated March 17, 1999, and a Term Loan
Promissory Note in the principal amount of $40,000,000 dated March 17, 1999
(the "Notes"), and by a Warehousing Credit, Term Loan and Security Agreement
dated as of March 17, 1999, as amended by that certain First Amendment to
Warehousing Credit, Term Loan and Security Agreement dated as of February 24,
2000, that certain Second Amendment to Warehousing Credit, Term Loan and
Security Agreement dated as July 12, 2000, that certain Third Amendment to
Warehousing Credit, Term Loan and Security Agreement dated as of January 31,
200l, that certain Fourth Amendment to Warehousing Credit, Term Loan and
Security Agreement dated as of April 26, 2001, and that certain Fifth Amendment
to Warehousing Credit, Term Loan and Security Agreement dated as of April 27,
2001, and that certain Sixth Amendment to Warehousing Credit, Term Loan and
Security Agreement dated as of September 26, 2001 (as amended hereby and as the
same may hereafter be amended, supplemented, or otherwise modified from time to
time, the "Agreement"); and
WHEREAS, the Borrower has asked the Lender to temporarily increase the
Warehousing Commitment Amount and to amend certain terms of the Agreement, and
the Lender has agreed to such temporary increase and such amendment, subject to
the terms and conditions of this Amendment.
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual covenants, agreements and conditions hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined
shall have their respective meanings set forth in the Agreement. The effective
date ("Effective Date") of this Amendment shall be December 12, 2001.
2. Section 1.1 of the Agreement is amended to delete the
definition of "Warehousing Commitment Amount" in its entirety, replacing it
with the following definitions:
"Warehousinq Commitment Amount" means $94,500,000.
Notwithstanding the foregoing, during the period from December 12,
2001, to and including January 15, 2002, the Warehousing Commitment
Amount wiil be temporarily increased to $137,500,000. On the first
Business Day following expiration of the temporary increase of the
Warehousing Commitment Amount, the Borrower must repay to the Lender
the amount by which the outstanding Warehousing Advances exceed the
Warehousing Commitment Amount.
3. Section 2.1(b)(8) of the Agreement is deleted in its entirety
and the following is substituted in lieu thereof:
(8) No Ordinary Warehousing Advance shall be made if,
after giving effect thereto, the aggregate amount of Ordinary
Warehousing Advances outstanding would exceed (i) $125,000,000, during
the period from December 12, 2001, to and including
January 15, 2002, or (ii) $82,000,000, at any other time, plus in
each case any portion of the Uncommitted Warehousing Amount as the
Lender, in its sole and absolute discretion, elects to make
available to the Company (the "Ordinary Warehousing Sublimit").
4. Upon execution of this Amendment, the Borrower agrees to pay to
the Lender a commitment fee equal to $15,000.
5. The Borrower must pay all out-of-pocket costs and expenses of the
Lender, including, without limitation, reasonable fees, service charges and
disbursements of counsel in connection with the amendment, enforcement and
administration of the Agreement.
6. The Borrower must deliver to the Lender (a) four executed originals
of this Amendment; (b) the $15,000 Commitment Fee; and (c) the $350 document
production fee.
7. The Borrower represents, warrants and agrees that there exists no
Default or Event of Default under the Loan Documents, the Loan Documents
continue to be the legal, valid and binding agreements and obligations of the
Borrower enforceable in accordance with their terms, as modified herein, the
Lender is not in default under any of the Loan Documents and the Borrower has
no offset or defense to its performance or obligations under any of the Loan
Documents, the representations contained in the Loan Documents remain true and
accurate in all respects, and there has been no material adverse change in the
financial condition of the Borrower from the date of the Agreement to the date
of this Amendment.
8. Except as hereby expressly modified, the Agreement shall otherwise
be unchanged and shall remain in full force and effect, and the Borrower
ratifies and reaffirms all of its obligations thereunder.
9. This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
[Remainder of this page left blank intentionally]
-2-
IN WITNESS WHEREOF, the Borrower and the 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.
ACCREDITED HOME LENDERS, INC., a California
corporation
By: /s/ [ILLEGIBLE]
-----------------------------------
Its: Exec vp
-----------------------------------
RESIDENTIAL FUNDING CORPORATION, a
Delaware corporation
By: /s/ [ILLEGEBLE]
-----------------------------------
Its: Director
-----------------------------------
SIXTH AMENDMENT
TO
WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT
THIS SIXTH AMENDMENT TO WAREHOUSING CREDIT, TERM LOAN AND SECURITY
AGREEMENT (this "Amendment") is entered into as of this 26th day of September,
2001, by and between ACCREDITED HOME LENDERS, INC., a California corporation
(the "Company") and RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the "Lender").
WHEREAS, the Company and the Lender have entered into a single family
revolving warehouse facility and a term loan facility as evidenced by a First
Amended and Restated Warehousing Promissory Note in the principal sum of
$165,000,000 dated April 27, 1999, a Sublimit Promissory Note in the principal
amount of $10,500,000 dated March 17, 1999, and a Term Loan Promissory Note in
the principal amount of $40,000,000 dated March 17, 1999 (the "Notes"), and by
a Warehousing Credit, Term Loan and Security Agreement dated as of March 17,
1999, as amended by that certain First Amendment to Warehousing Credit, Term
Loan and Security Agreement dated as of February 24, 2000, that certain Second
Amendment to Warehousing Credit, Term Loan and Security Agreement dated as July
12, 2000, that certain Third Amendment to Warehousing Credit, Term Loan and
Security Agreement dated as of January 31, 2001, that certain Fourth
Amendment to Warehousing Credit, Term Loan and Security Agreement dated as of
April 26, 2001, and that certain Fifth Amendment to Warehousing Credit, Term
Loan and Security Agreement dated as of April 27, 200l (as amended hereby and
as the same may hereafter be amended, supplemented, or otherwise modified from
time to time, the "Agreement"); and
WHEREAS, the Company has asked the Lender to increase temporarily the
Warehousing Commitment Amount and to amend certain terms of the Agreement, and
the Lender has agreed to such temporary increase and such amendment, subject to
the terms and conditions of this Amendment.
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual covenants, agreements and conditions hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined
shall have their respective meanings set forth in the Agreement.
2. The effective date ("Effective Date") of this Amendment shall
be September 20, 2001.
3. Section 1.1 of the Agreement is amended to delete the
definition of "Warehousing; Commitment Amount" in its entirety, replacing it
with the following definitions:
"Warehousine Commitment Amount" means $94,500,000.
Notwithstanding the foregoing, during the period from September 20, 2001, to
and including October 19,
2001, the Warehousing Commitment Amount will be temporarily increased
to $137,500,000. On the first Business Day following expiration of the
temporary increase of the Warehousing Commitment Amount, the Company
must repay to the Lender the amount by which the outstanding
Warehousing Advances exceed the Warehousing Commitment Amount.
4. Section 2.1(b)(8) of the Agreement is deleted in its entirety
and the following is substituted in lieu thereof:
(8) No Ordinary Warehousing Advance shall be made if, after
giving effect thereto, the aggregate amount of Ordinary Warehousing
Advances outstanding would exceed (i) $125,000,000, during the
period from September 20, 2001, to and including October 19, 2001 or
(ii) $82,000,000, at any other time, plus in each case any portion
of the Uncommitted Warehousing Amount as the Lender, in its sole and
absolute discretion, elects to make availabie to the Company (the
"Ordinary Warehousing Sublimit").
5. Exhibit A-l and Exhibit M to the Agreement are deleted in their
entirety and replaced with new Exhibit A-l and Exhibit M attached to this
Amendment. All references in the Agreement to Exhibit A-1 or Exhibit M will be
deemed to refer to new Exhibit A-l and Exhibit M.
6. The First Amended and Restated Warehousing Promissory Note is
amended and restated in its entirety as set forth in the Second Amended and
Restated Promissory Note, in the form of Exhibit A-l attached to this
Amendment. All references in this Amendment and in the Agreement to the
Warehousing Promissory Note will be deemed to refer to the Second Amended and
Restated Promissory Note delivered in connection with this Amendment.
7. Upon execution of this Amendment, the Company agrees to pay to
the Lender a commitment fee equal to $2,000.
8. The Company must pay all out-of-pocket costs and expenses of the
Lender, including, without limitation, reasonable fees, service charges and
disbursements of counsel in connection with the amendment, enforcement and
administration of the Agreement.
9. The Company must deliver to the Lender (a) four executed originals
of this Amendment; (b) an executed original of the Second Amended and
Restated Promissory Note; and (c) four executed Certificates of Secretary
with corporate resolutions and certificate of incumbency of the Company.
10. The Company represents, warrants and agrees that there exists no
Default or Event of Default under the Loan Documents, the Loan Documents
continue to be the legal, valid and binding agreements and obligations of the
Company enforceable in accordance with their terms, as modified herein, the
Lender is not in default under any of the Loan Documents and the Company has
no offset or defense to its performance or obligations under any of the Loan
Documents, the representations contained in the Loan Documents remain true
and accurate in all respects, and there has been no material adverse change
in the financial condition of the Company from the date of the Agreement to
the date of this Amendment.
11. Except as hereby expressly modified, the Agreement shall otherwise
be unchanged and shall remain in full force and effect, and the Company ratifies
and reaffirms all of its obligations thereunder.
12. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
[Remainder of this page left blank intentionally]
IN WITNESS WHEREOF, the Company and the 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.
ACCREDITED HOME LENDERS, INC., a
California corporation
By: /s/
-----------------------------
Its: Executive Vice President
----------------------------
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Director
----------------------------
EXHIBIT A-l
SECOND AMENDED AND RESTATED WAREHOUSING PROMISSORY NOTE
$208,000,000 Date: September _, 2001
FOR VALUE RECEIVED, the undersigned, ACCREDITED HOME LENDERS, INC., a
California corporation (the "Borrower"), hereby promises to pay to the order of
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation ("Lender" or, together
with its successors and assigns, "Holder") whose principal place of business is
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such
other place as the Holder may designate from time to time, the principal sum of
$208,000,000 or so much thereof as may be outstanding from time to time pursuant
to the Warehousing Credit and Security Agreement described below, and to pay
interest on said principal sum or such part thereof as shall remain unpaid from
time to time, from the date of each Advance until repaid in full, and all other
fees and charges due under the Agreement, at the rates and at the times set
forth in the Agreement. All payments hereunder shall be made in lawful money of
the United States and in immediately available funds.
This Note is given to evidence an actual warehouse line of credit in the
above amount and is the Promissory Note referred to in that certain Warehousing
Credit and Security Agreement (the "Agreement") dated as of March 17, 1999,
between Borrower and Lender, as the same may be amended or supplemented from
time to time, and is entitled to the benefits thereof. Reference is hereby made
to the Agreement (which is incorporated herein by reference as fully and with
the same effect as if set forth herein at length) for a description of the
Collateral, a statement of the covenants and agreements, a statement of the
rights and remedies and securities afforded thereby and other matters contained
therein. Capitalized terms used herein, unless otherwise defined herein, shall
have the meanings given them in the Agreement.
This Note is given in replacement for, and not in satisfaction of, that
certain First Amended and Restated Warehousing Promissory Note dated April 27,
200l (the "Existing Note"), and is issued by Borrower to evidence its
Obligations under the Agreement. All amounts owed by Borrower under the Existing
Note (including, without limitation, the unpaid principal thereunder, interest
accrued thereon and fees accrued under the Agreement whether or not yet due and
owing) as of the date hereof, shall be owed hereunder.
This Note may be prepaid in whole or in part at any time without premium or
penalty.
Should this Note be placed in the hands of attorneys for collection,
Borrower agrees to pay, in addition to principal and interest, fees and charges
due under the Agreement, any and all costs of collecting this Note, including
reasonable attorneys' fees and expenses.
Borrower hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the laws of
the State of Minnesota, without reference to its principles of conflicts of law.
IN WITNESS WHEREOF, Borrower has executed this Note as of the day and year
first above written.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: _______________________________
Its: _______________________________
-2-
EXHIBIT M
ELIGIBLE LOANS
For the purposes hereof, the following terms shall have the following meanings:
"Acquisition Price" has the meaning given to it in the Agreement.
"Closed Loan" means a Mortgage Loan that will be purchased by the
Company from a third party originator with the Advance requested against it.
"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.
"HUD 203(K) Mortgage Loan" means an FHA-insured close-end First
Mortgage Loan to an individual obligor the proceeds of which will be used for
the purpose of rehabilitating and repairing the related single family property,
and which satisfies the definition of "rehabilitation loan" in 24 C.F.R.
203.50(a).
"Loan-to-Value Ratio" means, in respect of any Mortgage Loan, the
ratio of (a) the maximum amount available to be borrowed thereunder (whether or
not borrowed) at the time of origination to (b) the Appraised Value of such
related improved real property.
"Title I Mortgage Loan" means an FHA co-insured closed-end First
Mortgage Loan or Second Mortgage Loan that is underwritten in accordance with
HUD underwriting standards for the Title I Property Improvement Program set
forth in, and that is reported for insurance under, the Mortgage Insurance
Program authorized and administered under Title I of the National Housing Act of
1934, as amended, and the regulations related to that statute.
The following aggregate limitations shall apply to Advances against Eligible
Loans:
1. Wet Settlement Advances: 35% of the Ordinary
Warehousing Sublimit.
2. Advances against Second Mortgage Loans: $25,000,000, during the
period from September
20, 2001, to and
including October 19,
2001; and $9,000,000,
at all other times.
3. Closed Loan Advances: Permitted for Eligible
Loans other than
Seasoned Mortgage Loans.
The following specified types of Single Family Mortgage Loans are Eligible Loans
provided they conform in all respects with the terms of the Warehousing
Agreement (the restrictions set forth for each of the following categories of
Eligible Loans do not apply to either of the other categories:
-1-
1. Prime Mortgage Loan
a. Definition: A First Mortgage Loan with the following
characteristics:
i. For a First Mortgage Loan, other than a Government Mortgage Loan:
A. Underwritten substantially in accordance with ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ 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 amount by which such Prime Mortgage
Loan exceeds 80% is insured by or subject to a commitment for
mortgage insurance.
ii. For a Government Mortgage Loan:
A. HUD/FHA insured (other than a HUD 203(K) Mortgage Loan or a
Title I Mortgage Loan); or
B. VA guaranteed.
b. Interest Rate: 1.25% over LIBOR.
c. Prime Sublimit: $10,000,000.
d. Committed/Uncommitted: Purchase Commitment required.
e. Committed First Mortgage Loan 98% of the least of (i) the Mortgage
Advance Rate: Note Amount or (ii) the Committed
Purchase Price or (iii) the
Acquisition Price.
f. Warehouse Period First 90 days; provided that Ordinary
Mortgage Loan: Warehousing Advances in an aggregate
amount not to exceed 20% of the
Ordinary Warehousing Sublimit may
remain outstanding against Mortgage
Loans for 120 days.
2. Subprime Mortgage Loan
a. Definition: A First Mortgage Loan that is not a
Prime Mortgage Loan, which has a risk
rating of "A-", "B" or "C"
(determined using under-writing
standards which comply with industry
standards in the sole judgment of the
Lender), which is made to a mortgagor
with a FICO Score of no less than
500, and which is acceptable for
purchase by at least two Investors.
-2-
b. Interest Rate: 1.25% over LIBOR.
c. Subprime Sublimit: $50,000,000, during the period from
September 20, 2001, to and including
October 19, 2001; and $15,000,000, at
all other times.
d. Committed/Uncommitted: Purchase Commitment not required
unless First Mortgage Loan exceeds
$400,000
e. Committed First Mortgage Loan 98% of the least of(i) the Mortgage
Advance Rate: Note Amount or (ii) the Committed
Purchase Price or (iii) the
Acquisition Price.
f. Uncommitted First Mortgage 98% of the Mortgage Note Amount.
Loan Advance Rate:
g. Warehouse Period First 90 days; provided, that Ordinary
Mortgage Loan: Warehousing Advances in an aggregate
amount not to exceed 20% of the
Ordinary Warehousing Sublirnit may
remain outstanding against Mortgage
Loans for 120 days.
3. Eligible Subject Loan
a. Definition: As defined in the Agreement.
b. Interest Rate: 1.25% over LIBOR.
c. Committed/Uncommitted: Purchase Commitment required, if
applicable.
d. Committed Advance Rate: 100% of the least of (i) the Mortgage
Note Amount, (ii) the Committed
Purchase Price, or (iii) the
Acquisition Price.
e. Warehouse Period: 90 days; provided, that Ordinary
Warehousing Advances in an aggregate
amount not to exceed 20% of the
Ordinary Warehousing Sublimit may
remain outstanding against Mortgage
Loans for 120 days.
-3-
4. Seasoned Mortgage Loan
a. Definition: A First Mortgage Loan that (i) at the
time of its origination, the Company
in good faith believed would
otherwise qualify as a Prime Mortgage
Loan or a Subprime Mortgage Loan
under this Agreement, (ii) as of the
date of the Advance, the most recent
contractual payment required by the
terms of the Mortgage Loan has been
paid in full or, if not paid, is not
more than 20 days past its
contractual due date, (iii) has not
been a Nonperforming Mortgage Loan or
REO Property as defined in the
Agreement, (iv) is not currently and
has not in the past been included in
any bankruptcy plan or forbearance
program, (v) does not involve a
refinancing out of a foreclosure,
(vi) was originated by and closed in
the name of the Company, and (vii) is
not subject to a colorable claim of
fraud.
b. Interest Rate: 2.75% over LIBOR.
c. Seasoned Mortgage Loan $7,000,000.
Sublimit:
d. Committed/Uncommitted: Purchase Commitment not required.
e. Seasoned Mortgage Loan An amount equal to the lesser of
Advance Rate: (i) 85% of the Mortgage Note Amount
of the related Seasoned Mortgage Loan
or (ii) 90% of the BPO Value of the
improved real property securing the
Seasoned Mortgage Loan.
f. Warehouse Period: 300 days.
-4-
FIFTH AMENDMENT
TO
WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT
THIS FIFTH AMENDMENT TO WAREHOUSING CREDIT, TERM LOAN AND SECURITY
AGREEMENT (this "Amendment") is entered into as of this 27th day of April, 2001,
by and between ACCREDITED HOME LENDERS, INC., a California corporation (the
"Company") and RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender").
WHEREAS, the Company and the Lender have entered into a single family
revolving warehouse facility and a term loan facility as evidenced by a
Warehousing Promissory Note in the principal sum of $158,000,000 dated as of
March 17, 1999, a Sublimit Promissory Note in the principal amount of
$10,500,000 dated as of March 17, 1999, and a Term Loan Promissory Note in the
principal amount of $40,000,000 dated as March 17, 1999 (the "Notes"), and by a
Warehousing Credit, Term Loan and Security Agreement dated as of March 17, 1999,
as amended by that certain First Amendment to Warehousing Credit, Term Loan and
Security Agreement dated as of February 24, 2000, that certain Second Amendment
to Warehousing Credit, Term Loan and Security Agreement dated as July 12, 2000,
that certain Third Amendment to Warehousing Credit, Term Loan and Security
Agreement dated as of January 31, 2001, and that certain Fourth Amendment to
Warehousing Credit, Term Loan and Security Agreement dated as of April 26, 2001
(as amended hereby and as the same may hereafter be amended, supplemented, or
otherwise modified from time to time, the "Agreement"); and
WHEREAS, the Company has asked the Lender to amend certain terms of
the Agreement, and the Lender has agreed to such amendment subject to the terms
and conditions of this Amendment.
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual covenants, agreements and conditions hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1 . All capitalized terms used herein and not otherwise defined
shall have their respective meanings set forth in the Agreement.
2. Upon the satisfaction of the conditions set forth in Sections
25, 26, and 27 of this Amendment, the "Effective Date" of this Amendment shall
be April 30, 2001.
3. Section 1.1 of the Agreement is amended to delete the
definitions of "BPO Value," "Collateral Value," "Fair Market Value," "Ordinary
Warehousing Sublimit" and "Warehousing Commitment Amount" in their entirety,
replacing them with the following definitions:
"BPO Value" means, with respect to the improved real property
securing any Mortgage Loan or any REO Property, 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 the Lender as to the value of such improved real
property if sold within a 60-day marketing period. Each such broker price
opinion shall be obtained by the Lender from a real estate broker selected by
the Lender in its sole discretion 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.
"Collateral Value" means (a) with respect to any Eligible Loan
as of the date of determination, the lesser of (i) the amount of any Advance
made against such Eligible Loan under Section 2.1(c) hereof or (ii) the Fair
Market Value of such Eligible Loan; (b) in the event Pledged Mortgages have
been exchanged for Agency Securities, the lesser of (i) the amount of any
Advances outstanding against the Eligible Loans backing such Agency
Securities or (ii) the Fair Market Value of such Pledged Securities; (c) with
respect to an REO Property, the lesser of (i) the amount of an Advance made
against such REO Property under Section 2.1(c) hereof or (ii) the Fair Market
Value of such REO Property; and (d) with respect to cash, the amount of
such cash.
"Fair Market Value" means at any time for an Eligible Loan
(other than a Seasoned Mortgage Loan) or the related Agency Security (if such
Eligible Loan is to be used to back an Agency Security), (a) if such Eligible
Loan or the related Agency Security is covered by a Purchase Commitment, the
Committed Purchase Price, or (b) otherwise, the market price for such
Eligible Loan or Agency Security, determined by the Lender based on market
data for similar Mortgage Loans or Agency Securities (including, with respect
to Mortgage Loans, any price recently obtained by the Company for a similar
Mortgage Loan in an arms-length, whole loan sale transaction) and such other
criteria as the Lender deems appropriate. For a Seasoned Mortgage Loan or a
Nonperforming Mortgage Loan, Fair Market Value means at any time the lesser
of: (a) if such Seasoned Mortgage Loan or Nonperforming Mortgage Loan is
covered by a Purchase Commitment, the Committed Purchase Price, (b) the BPO
Value of the related property, (c) the Appraised Property Value of the
related property or (d) the market price for such Seasoned Mortgage Loan or
Nonperforming Mortgage Loan, determined by the Lender based on market data
for similar Mortgage Loans (including, with respect to Mortgage Loans, any
price recently obtained by the Company for a similar Mortgage Loan in an
arms-length, whole loan sale transaction) and such other criteria as the
Lender deems appropriate. For an REO Property, Fair Market Value means at any
time the lesser of: (a) the BPO Value of the related property, or (b) the
Appraised Property Value of the related property. As long as no Default or
Event of Default exists, any appraisal required to determine the Appraised
Property Value of Seasoned Mortgage Loan, Nonperforming Mortgage Loan, or
REO Property shall be at the expense of the Lender, but any such appraisals
made while any Default or Event of Default is continuing shall be at the
expense of the Company.
"Ordinary Warehousing Sublimit" has the meaning set forth in
Section 2.1(b)(8) hereof.
"Warehousing Commitment Amount" means $94,500,000.
-2-
4. Section 1.l of the Agreement is hereby amended by adding the
following definitions in appropriate alphabetical order:
"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.
"Seasoned Mortgage Loan" has the meaning set forth in Exhibit
M.
5. Section 2.1(b) of the Agreement is deleted in its entirety and
the following is substituted in lieu thereof:
2.1(b) Ordinary Warehousing Advances shall be used by the
Company solely for the purpose of funding the acquisition, origination
and retention of Eligible Loans and shall be made at the request of the
Company, in the manner hereinafter provided in Section 2.2 hereof,
against the pledge of such Eligible Loans as Collateral therefor.
Nonperforming Advances and REO Advances shall be used by the Company
solely for the purpose of financing a Nonperforming Mortgage Loan or a
REO Property; provided, however, Nonperforming Advances and REO
Advances may not be used to finance Nonperforming Mortgage Loans or REO
Properties previously financed, as either a Nonperforming Mortgage Loan
or an REO Property, under another warehouse facility, except for
Advances against Nonperforming Mortgage Loans and REO Properties
financed under the ▇▇▇▇▇▇ Facility and pledged hereunder on or before
the ninetieth (90th) day after the Closing Date in an aggregate amount
not to exceed $2,000,000. Premium Advances shall be used by the Company
for the purpose of funding the acquisition or origination of Eligible
Subject Loans and for general corporate purposes: The limitations on
the use of Ordinary Warehousing Advances set forth on Exhibit M
attached hereto and made a part hereof shall be applicable. In
addition, the following limitations on the use of Warehousing Advances
shall be applicable:
(1) Except for Advances against Seasoned Mortgage
Loans, no Ordinary Warehousing Advance or Premium Advance
shall be made against any Mortgage Loan which was closed more
than ninety (90) days prior to the date of the requested
Advance.
(2) No Ordinary Warehousing Advance shall be made
against any Seasoned Mortgage Loan which was closed more than
one hundred eighty (180) days prior to the date of the
requested Advance.
(3) No Warehousing Advance shall be made against a
Mortgage Loan other than an Eligible Loan or a Nonperforming
Mortgage Loan or an REO Property.
(4) No Nonperforming Advance shall be made against a
Mortgage Loan that is not a First Mortgage Loan.
-3-
(5) No Nonperforming Advance shall be made against any Mortgage Loan
unless (i) such Mortgage Loan was originated by the Company, (ii) such
Mortgage Loan was acquired by the Company within 90 days after its
origination, (iii) such Mortgage Loan is secured by a First Mortgage on
property which also secures a Second Mortgage Loan originated by the
Company and such Second Mortgage Loan is an Eligible Subject Loan pledged
to the Lender together with such First Mortgage Loan, or (iv) such Mortgage
Loan is secured by a First Mortgage on property which also secures a Second
Mortgage Loan acquired by the Company within 90 days after its origination,
and such Second Mortgage Loan is an Eligible Subject Loan pledged to the
Lender together with such First Mortgage Loan.
(6) No Wet Settlement Advances shall be made against Seasoned
Mortgage Loans, Nonperforming Mortgage Loans or REO Properties.
(7) The aggregate amount of Wet Settlement Advances outstanding at
any one time shall not exceed 35% of the Ordinary Warehousing Sublimit.
(8) No Ordinary Warehousing Advance shall be made if, after giving
effect thereto, the aggregate amount of Ordinary Warehousing Advances
outstanding would exceed $82,000,000 plus any portion of the Uncommitted
Warehousing Amount as the Lender, in its sole and absolute discretion,
elects to make available to the Company (the "Ordinary Warehousing
Sublimit").
(9) The aggregate amount of Premium Advances outstanding at any one
time shall not exceed $4,500,000.
(10) The aggregate amount of Warehousing Advances against ▇▇▇▇▇▇
Mortgage Loans outstanding at any one time shall not exceed $50,000,000.
(11) The aggregate amount of REO Advances outstanding at any one time
shall not exceed $6,000,000.
(12) The aggregate amount of REO Advances and Nonperforming Advances
outstanding at any one time shall not exceed $8,000,000.
(13) No Premium Advance may be made against any Mortgage Loan that is
not an Eligible Subject Loan pledged hereunder.
(14) Advances made against Seasoned Mortgage Loans secured by
properties located in any one zip code may not exceed 20% of the applicable
Sublimit.
(15) The aggregate amount of Warehousing Advances against Seasoned
Mortgage Loans outstanding at any one time shall not exceed $7,000,000.
-4-
6. The introductory paragraph of Section 2.2 of the Agreement is
deleted in its entirety and the following is substituted in lieu thereof:
2.2(a) The Company may obtain a Warehousing Advance hereunder,
subject to the satisfaction of the conditions set forth in Sections 4.1
and 4.2 hereof, upon compliance with the procedures set forth in this
Section 2.2 and in Exhibit D-SF with respect to Ordinary Warehousing
Advances and Exhibit D-NP/REO with respect to Nonperforming Advances
and REO Advances, attached hereto and made a part hereof, including the
delivery of all documents listed in Exhibit D-SF or Exhibit D-NP/REO,
as applicable (the "Collateral Documents") to the Lender. Requests for
Advances shall be initiated by the Company by delivering to the Lender,
no later than (i) in the case of requests for Premium Advances, 2
Business Days prior to the Business Day on which the Company desires to
borrow hereunder, (ii) in the case of requests for Nonperforming
Advances, REO Advances and Advances against Seasoned Mortgage Loans, 17
calendar days prior to the Business Day on which the Company desires to
borrow hereunder, and (iii) in all other cases, the time provided by
the Lender to the Company by Notice on the same Business Day on which
the Company desires to borrow hereunder, a completed and signed request
for an Advance (a "Warehousing Advance Request") on the then current
form approved by the Lender. The current forms in use by the Lender are
Exhibit C-PRE with respect to Premium Advances, Exhibit C-REO with
respect to REO Advances, and Exhibit C-SF with respect to other
Warehousing Advances attached hereto and made a part hereof (except,
with respect to Ordinary Warehousing Advances, in the case of
Warehousing Advance Requests submitted by RFConnects). The Lender shall
have the right, on not less than three (3) Business Days' prior Notice
to the Company, to modify any of said Exhibits to conform to current
legal requirements or Lender practices, and, as so modified, said
Exhibits shall be deemed a part hereof.
7. Section 2.7(a) of the Agreement is deleted in its entirety and
the following is substituted in lieu thereof:
2.7(a) The outstanding principal amount of all Ordinary
Warehousing Advances other than Ordinary Warehousing Advances against
Seasoned Mortgage Loans shall be payable in full on the Warehousing
Maturity Date. The outstanding principal amount of all Ordinary
Warehousing Advances against Seasoned Mortgage Loans shall be payable
in full on the later of (i) the Warehousing Maturity Date or (ii) the
date on which the number of days set forth for Seasoned Mortgage Loans
on Exhibit M attached hereto and made a part hereof as the "Warehouse
Period" elapse from the date of the initial Advance made by the Lender
against each Seasoned Mortgage Loan.
8. Section 2.7(e) of the Agreement is amended to add the
following sections after Section 2.7(e)(8):
(9) The payment of a hazard insurance claim relating to
a Nonperforming Mortgage Loan or REO Property if the improved
real property related thereto will not be rebuilt or repaired
within ninety (90) days of the Company's receipt of such funds.
-5-
(10) With respect to any Nonperforming Mortgage Loan shipped
to a foreclosure attorney or servicer under a bailee letter, ten (10)
Business Days elapse without the Lender receiving a copy of such
bailee letter acknowledged by such foreclosure attorney or servicer.
9. Section 2.7(h) of the Agreement is amended to add the following
sections after Section 2.7(h)(3):
(4) On the 15/th/ day of each month occurring 240 days or more
after the date of an Ordinary Warehousing Advance against a Seasoned
Mortgage Loan, the Company must prepay the outstanding principal
amount of such Advance by five percent (5%) of the original amount of
such Advance.
(5) Within fifteen (15) days after the Lender's receipt of a
broker's price opinion with respect to the improved real property
securing a Seasoned Mortgage Loan, the Company shall prepay the
outstanding principal amount of the related Ordinary Warehousing
Advance by the amount, if any, by which such outstanding principal
amount exceeds the amount that would be advanced against such Seasoned
Mortgage Loan given the new BPO Value thereof.
(6) Within fifteen (15) days after the payment of any private
mortgage insurance claim relating to a Nonperforming Mortgage Loan or
an REO Property, the Company shall prepay the outstanding principal
amount of the related Ordinary Warehousing Advance by the amount of
such private mortgage insurance payment.
10. Section 2.7 of the Agreement is amended to add the following section
after Section 2.7(i):
2.7(j) The Lender reserves the right to determine the Fair Market
Value of any Pledged Loan except for a Pledged Loan that is covered by a
Purchase Commitment from ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, or that is to be
exchanged for an Agency Security if that Agency Security is not covered by
a Purchase Commitment. The Company must pay to the Lender, without the
necessity of prior demand or Notice from the Lender, and the Company
authorizes the Lender to cause the Funding Bank to charge the Company's
Operating Account for, any amount required after any such determination to
reduce the principal amount of the Advance outstanding against the revalued
Pledged Loan to an amount equal to the Advance Rate for the applicable
Eligible Loan type multiplied by the Fair Market Value of the Mortgage
Loan.
11. Section 2.11 of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
2.11 Warehousing Fees. The Company agrees, at the time of each
Warehousing Advance, except Warehousing Advances made as part of a Bulk
Financing of Mortgage Loans other than Seasoned Mortgage Loans,
Nonperforming Mortgage Loans or REO Properties, to pay to the Lender a
Warehousing Fee (a) in the case of Advances against Seasoned Mortgage
Loans, Nonperforming Mortgage Loans or REO
-6-
Properties, in the amount of $400, and (b) in any other case, in the amount
of $22.00, for each Mortgage Loan pledged as Collateral for such Advance.
The Company further agrees, at the time of each Bulk Financing of Mortgage
Loans other than Seasoned Mortgage Loans, Nonperforming Mortgage Loans or
REO Properties, to pay to the Lender a Warehousing Fee in the amount of
$15.00 for each Mortgage Loan pledged as Collateral for such Bulk
Financing. Warehousing Fees are due when incurred, but shall not be
delinquent if paid within fifteen (15) days after receipt of an invoice or
an account analysis statement from the Lender.
12. Section 2.12 of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
2.12 Miscellaneous Charges. The Company agrees to reimburse the
Lender for miscellaneous charges and expenses (collectively, "Miscellaneous
Charges") incurred by or on behalf of the Lender in connection with the
handling and administration of Advances and the Collateral. For the
purposes hereof, Miscellaneous Charges shall include, but not be limited
to, costs for UCC, tax lien and judgment searches conducted by the Lender,
filing fees, charges for additional wire transfers, check processing
charges, charges for security delivery fees, charges for overnight delivery
of Collateral to Investors, the costs and expenses of broker's price
opinions and, after and during the existence of a Default or Event of
Default, appraisals obtained by the Lender, recording fees for REO
Mortgages, the Funding Bank's service charges and Designated Bank Charges.
Miscellaneous Charges are due when incurred, but shall not be delinquent if
paid within fifteen (15) days after receipt of an invoice or an account
analysis statement from the Lender.
13. Section 5.15(c) of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
5.15(c) Any Mortgage Loan and any related document included in the
Pledged Mortgages (1) has been duly executed and delivered by the parties
thereto at a closing held not more than ninety (90) days prior to the date
of the Advance Request for Mortgage Loans other than Seasoned Mortgage
Loans and, in the case of Seasoned Mortgage Loans, not more than one
hundred eighty (180) days prior to the date of the related Advance, (2) has
been made in compliance with all requirements of the Real Estate Settlement
Procedures Act, Equal Credit Opportunity Act, the federal Truth-In-Lending
Act and all other applicable laws and regulations, (3) is and will continue
to be valid and enforceable in accordance with its terms, without defense
or offset, (4) has not been modified or amended except in writing, which
writing is part of the Collateral Documents, nor any requirements thereof
waived, (5) has been evaluated or appraised in accordance with Title XI of
FIRREA, and (6) complies and will continue to comply with the terms of this
Agreement and, if applicable, with the related Purchase Commitment held by
the Company. Each Mortgage Loan has been fully advanced in the face amount
thereof, and each First Mortgage is a first Lien on the premises described
therein and each Second Mortgage is secured by a second Lien on the
premises described therein (subject in all cases to encumbrances permitted
pursuant to the RFC Guide), and has or will have (except, in the case of an
Eligible Subject Loan, as otherwise permitted
-7-
in the RFC Guide) a title insurance policy, in American Land Title
Association form or equivalent thereof, from a recognized title insurance
company, insuring the priority of the Lien of the Mortgage and meeting the
usual requirements of Investors purchasing such Mortgage Loans.
14. Section 5.15 of the Agreement is amended to add the following sections
immediately after Section 5.15(j):
5.15(k) Each property securing a Mortgage Loan and each REO Property
against which an Advance is made hereunder is free from any environmental,
lien, title, compliance, regulatory or survey defect, seizure or
condemnation proceeding, or liability.
5.15(l) None of the Pledged Mortgages consisting of Seasoned Mortgage
Loans is secured by a Mortgage on a Manufactured Home, mobile home, or
leasehold.
15. Section 6.2(m) of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
6.2(m) As soon as available and in any event not later than the last
day of each month, a report detailing the current performance, maintenance,
marketing strategy, servicing and delinquency of each REO Property, each
Nonperforming Mortgage Loan and each Seasoned Mortgage Loan as of the end
of the immediately preceding month.
16. Section 6.6 of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
6.6 Notice. Give prompt Notice to the Lender of (a) any action, suit
or proceeding instituted by or against the Company 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 involves a potential loss or liability to the
Company or any Subsidiary in excess of $200,000, or any such proceedings
threatened against the Company or any of its Subsidiaries in a writing
containing the details thereof; (b) the filing, recording or assessment of
any federal, state or local tax Lien against the Company, or any of its
assets or any of its Subsidiaries; (c) the occurrence of any Event of
Default hereunder or the occurrence of any Default and continuation thereof
for five (5) days; (d) the suspension, revocation or termination of the
Company's eligibility, in any respect, as approved lender, seller/servicer
or issuer as described under Section 5.13 hereof; (e) the transfer, loss or
termination of any Servicing Contract to which the Company is a party, or
which is held for the benefit of the Company, and the reason for such
transfer, loss or termination, if known to the Company; (f) a report
detailing any of the following events: (i) any Nonperforming Mortgage Loan
with respect to which the Company has commenced foreclosure proceedings by
action, by advertisement, or by power of sale by sending a notice of
default or notice of lis pendens, publishing or filing a notice of sale,
filing a foreclosure action, or otherwise taking appropriate self-help,
administrative or judicial action against the real property and (ii) and
any Nonperforming Mortgage Loan that becomes an REO Property; and (g) any
other action, event or condition of any nature which may lead to or result
in a material
-8-
adverse effect upon the business, operations, assets, or financial
condition of the Company and its Subsidiaries or which, with or without
notice or lapse of time or both, would constitute a default under any other
agreement, instrument or indenture to which the Company or any of its
Subsidiaries is a party or to which the Company or any of its Subsidiaries,
its properties, or assets may be subject.
17. Article 6 of the Agreement is amended to add the following section
immediately after Section 6.14:
6.15 Option to Purchase Seasoned Mortgage Loans. Promptly notify the
Lender of any proposal or offer from any Person that the Company intends to
accept that involves the sale by the Company of any pool of loans 90% or
more of the aggregate unpaid principal balance of which consists of
Seasoned Mortgage Loans. Such Notice must be accompanied by a summary of
the consideration and other material terms of such proposal or offer and
such other information as the Lender may reasonably request. Such Notice
shall constitute an offer by the Company to sell the pool of loans subject
to such Notice to the Lender for the consideration and upon the terms set
forth therein. Within two (2) Business Days after its receipt of such
Notice, the Lender shall give written Notice to the Company as to whether
the Lender accepts the offer of the Company to sell such pool of loans to
the Lender. The offer described in this Section 6.15 shall be irrevocable
until the time period within which the Lender may accept any such offer has
elapsed.
18. Section 7.13(a) of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
7.13(a) Except in the case of a Mortgage Loan against which a
Nonperforming Advance is outstanding, the Company shall not amend or
modify, or waive any of the terms and conditions of, or settle or
compromise any claim in respect of, any Pledged Mortgages or Pledged
Securities; provided, however, that the Company may amend or modify the
terms and conditions of a Seasoned Mortgage Loan as long as such amendment
or modification does not adversely affect the Fair Market Value of such
Seasoned Mortgage Loan.
19. Sections 8.1(f) and 8.1(g) of the Agreement are deleted in their
entirety and the following are substituted in lieu thereof:
8.1(f) A case (whether voluntary or involuntary) is filed by or
against the Company or any Subsidiary of the Company 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 the Company or any Subsidiary of the Company, or over
all or a substantial part of their respective properties or assets; or the
Company or any Subsidiary of the Company (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 the Company or any Subsidiary of the Company, or over all or a
substantial part of their respective properties or assets, (2) makes an
-9-
assignment for the benefit of creditors, or (3) fails, or admits in
writing its inability, to pay its debts as those debts become due; or
8.1(g) [INTENTIONALLY OMITTED.]
20. Section 8.2(a) of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
8.2(a) Upon the occurrence of any Event of Default described in
Section 8.1(f), the Commitment shall be terminated and the unpaid
principal amount of and accrued interest on the Notes and all other
Obligations shall automatically become due and payable, without
presentment, demand or other requirements of any kind, all of which are
hereby expressly waived by the Company.
21. Section 8.2(e) of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
8.2(e) The Company 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. The Company waives any
right it may have to prior notice of the sale of Pledged Securities, and
agrees that the Lender may purchase Pledged Loans and Pledged Securities
at a private sale of such Collateral.
22. Section 8.3 of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
8.3 The Lender may apply the proceeds of any sale, disposition
or other enforcement of the Lender's Lien on all or any portion of the
Collateral to the payment of the Obligations in the order the Lender
determines in its sole discretion. From and after the indefeasible
payment to the Lender of all of the Obligations, any remaining proceeds
of the Collateral will be paid to the Company, 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,
the Company is liable for the deficiency.
23. Exhibit A-l, Exhibit C-SF Exhibit D-NP/REO, Exhibit D-SF and
Exhibit M to the Agreement are deleted in their entirety and replaced with new
Exhibit A-l, Exhibit C-SF, Exhibit D-NP/REO, Exhibit D-SF and Exhibit M attached
to this Amendment. All references in the Agreement to Exhibit A-l, Exhibit C-SF,
Exhibit D-NP/REO, Exhibit D-SF and Exhibit M will be deemed to refer to new
Exhibit A-l, Exhibit C-SF, Exhibit D-NP/REO, Exhibit D-SF and Exhibit M.
24. The Warehousing Promissory Note is amended and restated in its
entirety as set forth in the First Amended and Restated Promissory Note, in the
form of Exhibit A-l attached to this Amendment. All references in this Amendment
and in the Agreement to the Warehousing
-10-
Promissory Note will be deemed to refer to the First Amended and Restated
Promissory Note delivered in connection with this Amendment.
25. Upon execution of this Amendment, the Company agrees to pay to the
Lender a commitment fee equal to $8,750.
26. The Company must pay all out-of-pocket costs and expenses of the
Lender, including, without limitation, reasonable fees, service charges and
disbursements of counsel in connection with the amendment, enforcement and
administration of the Agreement.
27. The Company must deliver to the Lender (a) four executed originals
of this Amendment; (b) an executed original of the First Amended and Restated
Promissory Note; (c) four executed Certificates of Secretary with corporate
resolutions and certificate of incumbency of the Company; (d) a current
certified tax lien and judgment searches of the appropriate public records for
each Borrower and the Guarantor, including a search of Uniform Commercial Code
financing statements, which search will not have disclosed the existence of any
prior Lien on the Collateral other than in favor of Lender or as permitted
hereunder; (e) four original copies of a favorable written opinion of counsel to
the Company, addressed to the Lender and dated as of the date of this Amendment,
covering such matters as the Lender may reasonably request; and (f) current
insurance information for the Company.
28. The Company represents, warrants and agrees that there exists no
Default or Event of Default under the Loan Documents, the Loan Documents
continue to be the legal, valid and binding agreements and obligations of the
Company enforceable in accordance with their terms, as modified herein, the
Lender is not in default under any of the Loan Documents and the Company has no
offset or defense to its performance or obligations under any of the Loan
Documents, the representations contained in the Loan Documents remain true and
accurate in all respects, and there has been no material adverse change in the
financial condition of the Company from the date of the Agreement to the date of
this Amendment.
29. Except as hereby expressly modified, the Agreement shall otherwise
be unchanged and shall remain in full force and effect, and the Company ratifies
and reaffirms all of its obligations thereunder.
30. This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
-11-
IN WITNESS WHEREOF, the Company and the 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.
ACCREDITED HOME LENDERS, INC., a
California corporation
By: /s/ [SIGNATURE ILLEGIBLE]
--------------------------------
Its: Executive Vice President
-------------------------------
RESIDENTIAL FUNDING
CORPORATION, a Delaware corporation
By:/s/ [SIGNATURE ILLEGIBLE]
----------------------------------
Its: Director
----------------------------------
-12-
STATE OF CALIFORNIA )
) ss.
COUNTY OF SAN DIEGO )
On April 30, 2001, before me, a Notary Public, personally appeared ▇▇▇
▇. ▇▇▇▇▇▇▇, the Executive V.P. of ACCREDITED HOME LENDERS, INC., a California
corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument:
WITNESS my hand and official seal.
[SEAL STAMP] /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Notary Public
My Commission Expires: 01/02/04
---------
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
On May 9, 2001, before me, a Notary Public, personally appeared ▇▇▇▇
▇▇▇▇, the DIRECTOR of RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
[SEAL STAMP] /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Notary Public
My Commission Expires: 1-31-05
-13-
Exhibit A-l
--------------------------------------------------------------------------------
FIRST AMENDED AND RESTATED WAREHOUSING
PROMISSORY NOTE
--------------------------------------------------------------------------------
$165,000,000 Date: April__, 2001
FOR VALUE RECEIVED, the undersigned, ACCREDITED HOME LENDERS, INC., a California
corporation (the "Borrower"), hereby promises to pay to the order of RESIDENTIAL
FUNDING CORPORATION, a Delaware corporation ("Lender" or, together with its
successors and assigns, "Holder") whose principal place of business is ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other
place as the Holder may designate from time to time, the principal sum of
$165,000,000 or so much thereof as may be outstanding from time to time pursuant
to the Warehousing Credit and Security Agreement described below, and to pay
interest on said principal sum or such part thereof as shall remain unpaid from
time to time, from the date of each Advance until repaid in full, and all other
fees and charges due under the Agreement, at the rates and at the times set
forth in the Agreement. All payments hereunder shall be made in lawful money of
the United States and in immediately available funds.
This Note is given to evidence an actual warehouse line of credit in the above
amount and is the Promissory Note referred to in that certain Warehousing Credit
and Security Agreement (the "Agreement") dated as of March 17, 1999, between
Borrower and Lender, as the same may be amended or supplemented from time to
time, and is entitled to the benefits thereof. Reference is hereby made to the
Agreement (which is incorporated herein by reference as fully and with the same
effect as if set forth herein at length) for a description of the Collateral, a
statement of the covenants and agreements, a statement of the rights and
remedies and securities afforded thereby and other matters contained therein.
Capitalized terms used herein, unless otherwise defined herein, shall have the
meanings given them in the Agreement.
This Note is given in replacement for, and not in satisfaction of, that certain
Warehousing Promissory Note dated March 17, 1999 (the "Existing Note"), and is
issued by Borrower to evidence its Obligations under the Agreement. All amounts
owed by Borrower under the Existing Note (including, without limitation, the
unpaid principal thereunder, interest accrued thereon and fees accrued under the
Agreement whether or not yet due and owing) as of the date hereof, shall be owed
hereunder.
This Note may be prepaid in whole or in part at any time without premium or
penalty.
Should this Note be placed in the hands of attorneys for collection, Borrower
agrees to pay, in addition to principal and interest, fees and charges due under
the Agreement, any and all costs of collecting this Note, including reasonable
attorneys' fees and expenses.
Borrowers hereby waive demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the laws of the
State of Minnesota, without reference to its principles of conflicts of law.
Accredited/Warehousing Promissory Note
Revised: 4/27/2001
IN WITNESS WHEREOF, Borrower has executed this Note as of the day and year first
above written.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: _______________________________________
Its:_______________________________________
STATE OF ________________)
) ss.
COUNTY OF _______________)
On April ___, 2001, before me, a Notary Public, personally appeared ____________
_____________, the ________________________________of ACCREDITED HOME LENDERS,
INC., a California corporation, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
___________________________________________
Notary Public
(SEAL) My Commission Expires: _____________
EXHIBIT C-SF
REQUEST FOR ADVANCE
ACCREDITED HOME LENDERS, INC.
Loan Number: __________________________________________ Reviewed ____________________________________
By:
Warehouse
Mortgagor: ______________________ Date: ____________________________________
Address: ______________________ Effective
______________________ Date: ____________________________________
Zip Code: ______________________
Status: [_] Committed [_] Uncommitted Loan Type: [_] Prime [_] FHA [_] VA
[_] Wet Settlement [_] Received [_] Subprime/Grade______
[_] Repurchased [_] RFC
[_] Closed-end Second [_] Nonperforming
[_] Closed Loan [_] Seasoned Mortgage Loan
[_] Section 32 [_] Eligible Subject Loan
Term: [_] Fixed _________ Years
[_] ARM _________Adjustment Period
[_] Balloon
Mortgage Note Amount: ____________________________ Interest Rate: ____________________________________
Mortgage Note Date: ____________________________ Requested Warehouse Advance Amount: ________________
Investor: ________________________________________ Title Company: ____________________________________
Investor Contact: ________________________________ Title Company Contact: ____________________________
investor Phone: __________________________________ Title Company Phone: _______________________________
Committed Purchase Price: ________________________ Expiration Date: ___________________________________
Purchase Commitment No.: _________________________ Acquisition Price (if applicable): _________________
------------------------------------------------------------------------------------------------------------
FUNDING INSTRUCTIONS
[_] Wire Funding
Account to Debit: _______________________ Date of Wire: _________________________________
Credit Acct. Name: _______________________ Amount of Wire: _________________________________
Bank Name: _______________________________ Credit Acct. No.: _________________________________
ABA No.: ___________________________________________
City and State: _____________________________
Ref: ________________________________________ Advise: ____________________________________________
____________________________________________________________________________________________________________
C-1
REQUIRED DOCUMENTATION
The following documents in connection with the above request are enclosed:
RIGHT
[_] Original and 1 copy of Mortgage Note
[_] Certified copy of Mortgage
[_] Section 32 Compliance Documents (if applicable)
[_] *Copy of Investor Purchase Commitment (or satisfactory evidence thereof)
LEFT
[_] *Request for Advance (original and 1 copy)
[_] *Copy of settlement or funding check (if applicable)
[_] Recordable assignment of Mortgage
[_] Certified copies of interim assignments of Mortgage (if applicable)
NOTE: Items designated with the "*" are required prior to a Wet Settlement
Advance.
For the new value this day received, Accredited Home Lenders, Inc. (the
"Company"), grants a security interest to Residential Funding Corporation
(the "Lender") in all of the Company's right, title and interest in and to the
Mortgage Loan described above, together with all related "Collateral," as more
particularly described in the Warehousing Credit, Term Loan and Security
Agreement (as amended, supplemented or otherwise modified) between the Company
and Lender.
ACCREDITED HOME LENDERS, INC.
Authorized Signature: ______________________
C-2
EXHIBIT D-NP/REO
PROCEDURES AND DOCUMENTATION FOR WAREHOUSING
NONPERFORMING MORTGAGE LOANS AND REO
PROPERTIES
The following procedures and documentation requirements must be observed in all
respects by the Company. All documents must be satisfactory to the Lender in its
sole discretion. Terms used below, which are not otherwise defined, shall have
the meanings given them in the Agreement. The HUD, ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac
form numbers referred to herein are for convenience only and the Company shall
use the equivalent forms required at the time of delivery of the Mortgage Loans
or Mortgage-backed Securities. All Requests for Advance (Exhibit C-SF or Exhibit
C-REO) and Collateral Documents, should be submitted to the Lender in a top
tabbed, legal size manila file folder, hole-punched and acco-fastened in the
order specified in the Request for Advance (Exhibit C-SF or Exhibit C-REO). Each
folder should be labeled with the mortgagor name(s), Company loan number and
Company name.
I. PRIOR TO MAKING A NONPERFORMING ADVANCE, THE LENDER MUST RECEIVE THE
FOLLOWING SEVENTEEN (17) DAYS PRIOR TO SUCH NONPERFORMING ADVANCE.
(1) Original Request for Advance against Single Family Mortgage Loans
(Exhibit C-SF) and one (1) copy of same.
(2) Investor repurchase demand letter (if applicable).
(3) Summary of Mortgage Loan documentation or Investor problems, expected
cure period, and servicing records (including payment history).
(4) If not previously delivered to the Lender, original signed Mortgage
Note, endorsed by the Company in blank with corresponding interim
endorsements, if applicable, and one copy of same.
(5) If not previously delivered to the Lender, original or certified true
(by recorder's office or escrow/title company) copy of the Mortgage.
(6) If not previously delivered to the Lender, original or certified true
(by recorder's office or escrow/title company) copies of all interim
assignments of the Mortgage. (If an interim assignment has not been
recorded or sent for recordation, such original interim assignment).
Mortgage Note must bear corresponding endorsements.
(7) If not previously delivered to the Lender, an assignment of the
Mortgage, endorsed by the Company in blank, in recordable form but
unrecorded.
(8) Original or copy of ALTA Mortgagee's Policy of Title Insurance or
equivalent thereto, together with a copy of the preliminary title
report for the Mortgage Loan.
(9) Original VA Loan Guaranty Certificate, FHA Mortgage Insurance
Certificate, or copy of Private Mortgage Insurance Certificate (if
applicable).
(10) Original Appraisal of Mortgaged Property.
(11) Proof of all required tax payments.
1
(12) Proof of acceptable fire and casualty insurance.
(13) Completed Company Worksheet Concerning Applicability of Section
32 of Regulation Z (12 CFR Section 226.32) and, if Section 32 applies,
copies of the disclosure and other related documentation delivered to
the mortgagor, or executed by the mortgagor, evidencing compliance
with Section 32 (if applicable).
(14) All other documentation required by the Lender.
II. PRIOR TO THE MAKING OF AN REO ADVANCE, THE LENDER MUST RECEIVE THE
FOLLOWING SEVENTEEN (17) DAYS PRIOR TO SUCH REO ADVANCE.
(1) Original Request for Advance against REO Property (Exhibit C-REO).
(2) Original or certified true (by recorder's office) copy of REO Mortgage
in favor of Lender, together with recording information or recording
instructions.
(3) Original Appraisal of Mortgaged Property.
(4) Proof of all required tax payments.
(5) Proof of acceptable fire and casualty insurance.
(6) Servicing records (including previous payment history).
(7) Proposed disposition plan for REO Property.
(8) Evidence that recording fees and registration taxes have been paid.
(9) ALTA Mortgagee's Policy of Title Insurance, or equivalent thereto
obtained in connection with the loan closing.
(10) Preliminary title report (or the equivalent) dated no more than 30
days prior to the date of REO Advance evidencing Company's ownership
of REO Property.
(11) All other documentation required by the Lender.
III. THE LENDER EXCLUSIVELY SHALL DELIVER THE MORTGAGE NOTES AND OTHER ORIGINAL
COLLATERAL DOCUMENTS EVIDENCING PLEDGED MORTGAGES OR PLEDGED SECURITIES AND
RELATED POOL DOCUMENTS TO THE INVESTOR, POOL CUSTODIAN OR ATTORNEYS
CONDUCTING FORECLOSURE SALES. UNLESS OTHERWISE AGREED IN WRITING THE
PROCEDURES SET FORTH IN EXHIBIT D-SF ARE TO BE FOLLOWED FOR DELIVERIES OF
PLEDGED MORTGAGES TO INVESTORS OR POOL CUSTODIAN.
The following procedures are to be followed for deliveries of Pledged
Mortgages to attorneys conducting a foreclosure sale:
No later than one (1) Business Day prior to the requested shipment
date and no later than one (1) Business Day prior to required delivery
date to the Attorney conducting the foreclosure sale, the Lender must
receive signed shipping instructions for the delivery of the Pledged
Mortgages including the following:
2
(1) Name and address of the office of the attorney to which the
Collateral Documents are to be shipped, the desired shipping date
and the preferred method of delivery;
(2) Names of Mortgagor and Mortgage Note Amounts of Pledged Mortgages
to be shipped; and
(3) Confirmation that the attorney will execute and return the bailee
letter (acknowledged instructions from the Company to do so).
Upon instruction by the Company, the Lender will complete the endorsement of the
Mortgage Note and make arrangements for the delivery of the original Collateral
Documents evidencing Pledged Mortgages or Pledged Securities and related
original pool documents with the appropriate bailee letter to the Investor,
Approved Custodian, other pool custodian or attorney conducting a foreclosure
sale. Upon receipt of Mortgage-backed Securities, the Lender will cause such
Mortgage-backed Securities to be delivered to the Investor which issued the
Purchase Commitment. Mortgage-backed Securities will be released to the Investor
only upon payment of the purchase proceeds to the Lender. Cash proceeds of sales
of Pledged Mortgages and Pledged Securities shall be applied to related Advances
outstanding under the Commitment. Provided no Default exists, the Lender shall
return any excess proceeds of the sale of Mortgage Loans or Mortgage-backed
Securities to the Company, unless otherwise instructed in writing.
3
EXHIBIT D-SF
PROCEDURES AND DOCUMENTATION FOR WAREHOUSING
SINGLE FAMILY MORTGAGE LOANS
ACCREDITED HOME LENDERS, INC.
The following procedures and documentation requirements must be observed in all
respects by the Company. All documents must be satisfactory to the Lender in its
sole discretion. The HUD, ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac form numbers referred to in
this Exhibit are for convenience only. The Company must use the equivalent forms
required at the time of delivery of the Mortgage Loans or Mortgage-backed
Securities. Except for documents submitted through RFConnects Delivery, all
Advance Requests and Collateral Documents must be submitted to the Lender in a
manner satisfactory to the Lender. If a Wet Settlement Advance is being
requested, the Advance Request and required collateral Documents should be
submitted in accordance with the above instructions. The remaining Collateral
Documents must be submitted with a cover letter identifying the mortgagor
name(s) and the Company's loan number.
I. PRIOR TO MAKING A WET SETTLEMENT ADVANCE, THE LENDER MUST RECEIVE THE
FOLLOWING:
(1) An estimate of the amount of the requested Advance 1 Business Day prior
to the date the requested Advance is to be made.
(2) A copy of settlement or funding check issued to the escrow/title
company, if applicable.
(3) Either an electronic Advance Request (including RFConnects Pledge
Agreement and list of Mortgage Loans) or a written Request for Advance
against Single Family Mortgage Loans (Exhibit C-SF) and 1 copy of same.
The following must be received by the Lender within 7 Business Days of the
date the Wet Settlement Advance is to be made:
(4) The original signed Mortgage Note, endorsed by the Company in blank
with corresponding interim endorsements, if applicable, and 1 copy of
same.
(5) A copy of the Mortgage sent for recording certified true by the Company
or the escrow/title company.
(6) Copies of all interim assignments of the Mortgage certified true by
the Company or the escrow/title company (recorded or sent for
recordation). Mortgage Note must bear corresponding endorsements.
(7) An assignment of the Mortgage, endorsed by the Company in blank, in
recordable form but unrecorded.
(8) Completed Company Worksheet Concerning Applicability of Section 32 of
Regulation Z (12 CFR Section 226.32) and, if Section 32 applies, copies
of the, disclosure and other related documentation delivered to the
mortgagor, or executed by the mortgagor, evidencing compliance with
Section 32 (if applicable).
1
II. PRIOR TO MAKING AN ADVANCE (OTHER THAN A WET SETTLEMENT ADVANCE OR AN
ADVANCE AGAINST A SEASONED MORTGAGE LOAN), THE LENDER MUST RECEIVE ALL
OF THE COLLATERAL DOCUMENTS LISTED IN SECTION I ABOVE.
III. AT LEAST SEVENTEEN (17) DAYS PRIOR TO MAKING AN ADVANCE AGAINST A
SEASONED MORTGAGE LOAN, THE LENDER MUST RECEIVE THE FOLLOWING
COLLATERAL DOCUMENTS:
(1) All of the Collateral Documents listed in Section I above (if
applicable).
(2) A copy of the preliminary title report and title insurance policy
for the Mortgage Loan.
(3) Proof of all required tax payments.
(4) A copy of the original appraisal related to the Mortgage Loan.
(5) Proof of acceptable fire and casualty insurance.
(6) Servicing records.
(7) All other documentation required by the Lender.
IV. ONLY THE LENDER WILL DELIVER THE MORTGAGE NOTES AND OTHER ORIGINAL
COLLATERAL DOCUMENTS EVIDENCING PLEDGED MORTGAGES OR PLEDGED SECURITIES
AND RELATED POOL DOCUMENTS TO THE INVESTOR OR POOL CUSTODIAN, UNLESS
OTHERWISE AGREED IN WRITING.
A. The following procedures must be followed for deliveries of Pledged
Mortgages:
No later than 1 Business Day prior to the requested shipment date, the
Lender must receive the following:
(1) Signed shipping instructions or authenticated shipping
instructions sent via RFConnects Delivery for the delivery of the
Pledged Mortgages including the following:
(a) Name and address of the office of the Investor to which the
loan documents are to be shipped, the desired shipping date
and the preferred method of delivery;
(b) Instructions for endorsement of the Mortgage Note;
(c) Names of mortgagor(s), Mortgage Note Amounts of Pledged
Mortgages to be shipped and the Company's loan number; and
(d) Commitment number and expiration date of the Purchase
Commitment
(2) For deliveries of Pledged Mortgages to ▇▇▇▇▇▇ Mae for cash
purchase, the following additional documents are required:
(a) Copy of Loan Schedule (▇▇▇▇▇▇ ▇▇▇ Form 1068 or 1069) showing
the Lenders designated ▇▇▇▇▇▇ Mae payee code as recipient of
the loan purchase proceeds.
(3) For deliveries of Pledged Mortgages to ▇▇▇▇▇▇▇ Mac for cash
purchase, the following additional documents are required:
2
(a) Original completed Warehouse Lender Release of Security Interest
(▇▇▇▇▇▇▇ Mac Form 996) to be executed by the Lender, designating
the Lender as the Warehouse Lender and showing the Cash
Collateral Account designated by the Lender as the receiving
account for loan purchase proceeds; and
(b) Copy of Wire Transfer Authorization for a Cash Warehouse
Delivery (▇▇▇▇▇▇▇ Mac Form 987), designating the Lender as the
Warehouse Lender and showing the Cash Collateral Account
designated by the Lender as the receiving account for loan
purchase proceeds.
B. In the event Pledged Mortgages are delivered to a pool custodian, other
than an Approved Custodian, payment of the related Advance is required
within 2 Business Days of shipment.
The following procedures are to be followed for deliveries of Pledged
Mortgages to Approved Custodians:
No later than 1 Business Day prior to the requested shipment date, the
Lender must receive the following:
(1) Signed shipping instructions or authenticated shipping instructions
sent via RFConnects Delivery for the delivery of the Pledged
Mortgages to the Approved Custodian including the following:
(a) Name and address of the office of the Approved Custodian to
which the loan document are to be shipped, the desired shipping
date and the preferred method of delivery;
(b) Instructions for endorsement of the Mortgage Note;
(c) Name(s) of mortgagor(s) and Mortgage Note Amounts of Pledged
Mortgages to be shipped and the Company's loan number; and
(d) Commitment number and expiration date of the Purchase Commitment
for the Pledged Securities.
(2) For ▇▇▇▇▇▇ Mae Mortgage-backed Securities issuance, the following
additional documents are required:
(a) Copy of Schedule of Mortgages (▇▇▇▇▇▇ ▇▇▇ Form 2005 or 2025);
and
(b) Copy of Delivery Schedule (▇▇▇▇▇▇ Mae Form 2014), instructing
▇▇▇▇▇▇ ▇▇▇ to issue the Mortgage-backed Securities in the name
of the Company with the Lender as pledgee and to deliver the
Mortgage-backed Securities to the Lender's custody account at
The Chase Manhattan Bank (CHASE NYC/CUST/G55026) and bearing the
following instructions: "These instructions may not be changed
without the prior written consent of Residential Funding
Corporation, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Managing Director or ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, Director."
(3) For ▇▇▇▇▇▇▇ Mac Mortgage-backed Securities issuance, the following
additional documents are required:
(a) Copy of Settlement Information and Delivery Authorization
(▇▇▇▇▇▇▇ Mac Form 939), designating the Lender as the Warehouse
Lender and instructing ▇▇▇▇▇▇▇ Mac to deliver the
Mortgage-backed Securities to the Lender's custody account at
The Chase Manhattan Bank (CHASE/NYC/CUST/G55026); and
3
(b) Original Warehouse Lender Release of Security Interest
(▇▇▇▇▇▇▇ Mac Form 996) to be executed by the Lender,
designating the Lender as the Warehouse Lender and
instructing ▇▇▇▇▇▇▇ Mac to deliver the Mortgage-backed
Securities to the Lender's custody account at The Chase
Manhattan Bank (CHASE NYC/CUST/G55026).
(4) For ▇▇▇▇▇▇ ▇▇▇ Mortgage-backed Securities issuance, the following
additional documents are required:
(a) Signed copy of schedule of Mortgages (HUD Form 11706);
(b) Signed copy of Schedule of Subscribers (HUD Form 11705)
instructing ▇▇▇▇▇▇ Mae to issue the Mortgage-backed
Securities in the name of the Company and designating The
Chase Manhattan bank as Agent for the Lender as the
subscriber, using the following language: THE CHASE
MANHATTAN BANK AS AGENT FOR RESIDENTIAL FUNDING CORPORATION
SEG ACCT MANUF/CUST/G55026). The following instructions
must also be included on the form: "These instructions may
not be changed without the prior written consent of
Residential Funding Corporation, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Managing Director or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Director;" and
(c) Completed Original Release of Security Interest (HUD Form
11711A) to be executed by the Lender.
(5) No later than 2 Business Days prior to the Settlement Date for the
Mortgage-backed Securities, the Lender must receive signed
Securities Delivery Instructions form attached hereto as Schedule
I.
Upon instruction by the Company, the Lender will complete the endorsement
of the Mortgage Note and make arrangements for the delivery of the
original Collateral Documents evidencing Pledged Mortgages or Pledged
Securities and related original pool documents with the appropriate
bailee letter to the Investor, Approved Custodian, or other pool
custodian. Upon receipt of Mortgage-backed Securities, the Lender will
cause those Mortgage-backed Securities to be delivered to the Investor
that issued the Purchase Commitment. Mortgage-backed Securities will be
released to the Investor only upon payment of the purchase proceeds to
the Lender. Cash proceeds of sales of Pledged Mortgages and Pledged
Securities will be applied to related Advances outstanding under the
Commitment. Provided no Default exists, the Lender will return any excess
proceeds of the sale of Mortgage Loans or Mortgage-backed Securities to
the Company, unless otherwise instructed in writing.
4
SCHEDULE I TO EXHIBIT D-SF
RESIDENTIAL FUNDING CORPORATION
WAREHOUSE LENDING DIVISION
SECURITY DELIVERY INSTRUCTIONS
INSTRUCTIONS MUST BE RECEIVED 2 BUSINESS DAYS IN ADVANCE OF PICK-UP/DELIVERY
BOOK-ENTRY DATE:______________________ SETTLEMENT DATE:______________________
ISSUER:_______________________________ SECURITY: $___________________________
NO. OF CERTIFICATES:__________________ 1)____________________________________
2)____________________________________
3)____________________________________
CUSIP NO.____________________
Pool No. ______________ MI No.____________ Coupon Rate:___________________________
Issue Date (M/D/Y):____________________ Maturity Date (M/D/Y):_________________
POOL TYPE (circle one):
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ MAE I ▇▇▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇ Mac: FIXED ARM DISCOUNT NOTE
▇▇▇▇▇▇ Mae: FIXED ARM DISCOUNT NOTE DEBENTURES REMIC
DELIVER TO: _____________________ ( ) Versus Payment
_____________________ DVP AMOUNT $_________________________
_____________________ ( ) Free Delivery
DELIVER TO: _____________________ ( ) Versus Payment
_____________________ DVP AMOUNT $_________________________
_____________________ ( ) Free Delivery
DELIVER TO: _____________________ ( ) Versus Payment
_____________________ DVP AMOUNT $_________________________
_____________________ ( ) Free Delivery
AUTHORIZED SIGNATURE:___________________________________________________________________
TITLE:__________________________________________________________________________________
5
EXHIBIT M
ELIGIBLE LOANS
For the purposes hereof, the following terms shall have the following meanings:
"Acquisition Price" has the meaning given to it in the Agreement.
"Closed Loan" means a Mortgage Loan that will be purchased by the
Company from a third party originator with the Advance requested against
it.
"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.
"HUD 203(K) Mortgage Loan" means an FHA-insured close-end First
Mortgage Loan to an individual obligor the proceeds of which will be used
for the purpose of rehabilitating and repairing the related single family
property, and which satisfies the definition of "rehabilitation loan" in
24 C.F.R. 203.50(a).
"Loan-to-Value Ratio" means, in respect of any Mortgage Loan, the
ratio of (a) the maximum amount available to be borrowed thereunder
(whether or not borrowed) at the time of origination to (b) the Appraised
Value of such related improved real property.
"Title I Mortgage Loan" means an FHA co-insured closed-end First
Mortgage Loan or Second Mortgage Loan that is underwritten in accordance
with HUD underwriting standards for the Title I Property Improvement
Program set forth in, and that is reported for insurance under, the
Mortgage Insurance Program authorized and administered under Title I of
the National Housing Act of 1934, as amended, and the regulations related
to that statute.
The following aggregate limitations shall apply to Advances against Eligible
Loans:
1. Wet Settlement Advances: 35% of the Ordinary
Warehousing Sublimit.
2. Advances against Second Mortgage Loans: $9,000,000.
3. Closed Loan Advances: Permitted for Eligible
Loans other than Seasoned
Mortgage Loans.
The following specified types of Single Family Mortgage Loans are Eligible Loans
provided they conform in all respects with the terms of the Warehousing
Agreement (the restrictions set forth for each of the following categories of
Eligible Loans do not apply to either of the other categories:
1. Prime Mortgage Loan
a. Definition: A First Mortgage Loan with the following
characteristics:
(i) For a First Mortgage Loan, other than a Government Mortgage
Loan:
A. Underwritten substantially in accordance with ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ 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 amount by which
such Prime Mortgage Loan exceeds 80% is insured by or
subject to a commitment for mortgage insurance.
(ii) For a Government Mortgage Loan:
A. HUD/FHA insured (other than a HUD 203(K) Mortgage Loan
or a Title I Mortgage Loan); or
B. VA guaranteed.
b. Interest Rate: 1.25% over LIBOR.
C. Prime Sublimit: $10,000,000.
d. Committed/Uncommitted: Purchase Commitment required.
e. Committed First Mortgage
Loan Advance Rate: 98% of the least of (i) the Mortgage
Note Amount or (ii) the Committed
Purchase Price or (iii) the
Acquisition Price.
f. Warehouse Period First
Mortgage Loan: 90 days; provided that Ordinary
Warehousing Advances in an aggregate
amount not to exceed 20% of the
Ordinary Warehousing Sublimit may
remain outstanding against Mortgage
Loans for 120 days.
-2-
2. Subprime Mortgage Loan
a. Definition: A First Mortgage Loan that is not a Prime Mortgage Loan,
which has a risk rating of "A-", "B" or "C" (determined
using underwriting standards which comply with industry
standards in the sole judgment of the Lender), which is
made to a mortgagor with a FICO Score of no less than 500,
and which is acceptable for purchase by at least two
Investors.
b. Interest Rate: 1.25% over LIBOR.
C. Subprime Sublimit: $15,000,000.
d. Committed/Uncommitted: Purchase Commitment not required unless
First Mortgage Loan exceeds $400,000
e. Committed First Mortgage
Loan Advance Rate: 98% of the least of (i) the Mortgage Note
Amount or (ii) the Committed Purchase
Price or (iii) the Acquisition Price.
f. Uncommitted First
Mortgage Loan Advance
Rate: 98% of the Mortgage Note Amount.
g. Warehouse Period First
Mortgage Loan: 90 days; provided, that Ordinary
Warehousing Advances in an aggregate
amount not to exceed 20% of the Ordinary
Warehousing Sublimit may remain
outstanding against Mortgage Loans for 120
days.
3. Eligible Subject Loan
a. Definition: As defined in the Agreement.
b. Interest Rate: 1.25% over LIBOR.
C. Committed/Uncommitted: Purchase Commitment required, if
applicable.
d. Committed Advance Rate: 100% of the least of (i) the Mortgage Note
Amount, (ii) the Committed Purchase Price,
or (iii) the Acquisition Price.
-3-
e. Warehouse Period: 90 days; provided, that Ordinary Warehousing
Advances in an aggregate amount not to
exceed 20% of the Ordinary Warehousing
Sublimit may remain outstanding against
Mortgage Loans for 120 days.
4. Seasoned Mortgage Loan
a. Definition: A First Mortgage Loan that (i) at the time of its
origination, the Company in good faith believed would
otherwise qualify as a Prime Mortgage Loan or a
Subprime Mortgage Loan under this Agreement, (ii) as
of the date of the Advance, the most recent
contractual payment required by the terms of the
Mortgage Loan has been paid in full or, if not paid,
is not more than 20 days past its contractual due
date, (iii) has not been a Nonperforming Mortgage
Loan or RYEO Property as defined in the Agreement,
(iv) is not currently and has not in the past been
included in any bankruptcy plan or forbearance
program, (v) does not involve a refinancing out of a
foreclosure, (vi) was originated by and closed in the
name of the Company, and (vii) is not subject to a
colorable claim of fraud.
b. Interest Rate: 2.75% over LIBOR.
C. Seasoned Mortgage
Loan Sublimit: $7,000,000.
d. Committed/Uncommitted: Purchase Commitment not required.
e. Seasoned Mortgage
Loan Advance Rate: An amount equal to the lesser of (i) 85%
of the Mortgage Note Amount of the related
Seasoned Mortgage Loan or (ii) 90% of the
BPO Value of the improved real property
securing the Seasoned Mortgage Loan.
f. Warehouse Period: 300 days.
FOURTH AMENDMENT
TO
WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT
THIS FOURTH AMENDMENT TO WAREHOUSING CREDIT, TERM LOAN AND SECURITY
AGREEMENT (this "Amendment") is entered into as of this 26th day of April, 2001,
by and between ACCREDITED HOME LENDERS, INC., a California corporation (the
"Company") and RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender").
WHEREAS, the Company and the Lender have entered into a single family
revolving warehouse facility and a term loan facility as evidenced by a
Warehousing Promissory Note in the principal sum of S158,000,000 dated as of
March 17, 1999, a Sublimit Promissory Note in the principal amount of
$10,500,000 dated as of March 17, 1999, and a Term Loan Promissory Note in the
principal amount of $40,000,000 dated as March 17, 1999 (the "Notes"), and by a
Warehousing Credit, Term Loan and Security Agreement dated as of March 17, 1999,
as amended by that certain First Amendment to Warehousing Credit, Term Loan and
Security Agreement dated as of February 24, 2000, that certain Second Amendment
to Warehousing Credit, Term Loan and Security Agreement dated as July 12, 2000,
and that certain Third Amendment to Warehousing Credit, Term Loan and Security
Agreement dated as of January 31, 2001 (as amended hereby and as the same may
hereafter be amended, supplemented, or otherwise modified from time to time, the
"Agreement"); and
WHEREAS, the Company has asked the Lender to amend certain terms of the
Agreement, and the Lender has agreed to such amendment subject to the terms and
conditions of this Amendment.
NOW, THEREFORE, for and in consideration of the foregoing and of the mutual
covenants, agreements and conditions hereinafter set forth and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall have
their respective meanings set forth in the Agreement.
2. Upon the satisfaction of the conditions set forth in Section 10 of this
Amendment, the "Effective Date" of this Amendment shall be April 27, 2001,
except for (a) Section 4 of this Amendment, the Effective Date of which shall be
March 1, 200l and (b) Sections 5, 6, and 8 of this Amendment, the Effective Date
of which shall be March 29, 2001.
3. Section 1.1 of the Agreement is amended to delete the definition of
Bank United Facility" in its entirety.
4. Section 1.1. of the Agreement is to delete the definition of "▇▇▇▇▇▇
Facility" in its entirety, replacing it with the following definition:
"▇▇▇▇▇▇ Facility" means the facility provided for in the Master
Repurchase Agreement Governing Purchases and Sales of Mortgage Loans dated
as of March 1, 2001, as amended, between the Company and ▇▇▇▇▇▇ Brothers
Bank, FSB.
5. Section 1.1 of the Agreement is hereby amended by adding the following
definitions in appropriate alphabetical order:
"Household Facility" means the facility provided for in the Warehouse
Line Revolving Credit Agreement dated as of April 6, 2001, as amended,
between the Company and Household Commercial Financial Services, Inc.
"▇▇▇▇▇▇ Facility" means the facility provided for in the Master Loan
and Security Agreement dated as of March 29, 2001, as amended, between the
Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Mortgage Capital Inc.
6. Section 7.2 of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
7.2 Sale or Pledge of Assets. Sell or otherwise dispose of any
existing or future Servicing Contracts of the Company; pledge or otherwise
grant any Lien on any of its properties or assets (including, without
limitation, the Collateral and any Servicing Contracts) other than (a) to
the Lender, (b) Liens in connection with deposits or pledges to secure
payment of workers' compensation, unemployment insurance, old age pensions
or other social security obligations, in the ordinary course of business of
the Company or any Subsidiary, (c) Liens for taxes, fees, assessments and
governmental charges not delinquent or which are being contested in good
faith by appropriate proceedings and for which appropriate reserves have
been established in accordance with GAAP, (d) encumbrances consisting of
zoning regulations, easements, rights of way, survey exceptions and other
similar restrictions on the use of real property and minor irregularities
in title thereto which do not materially impair its use in operation of its
business, (e) Liens on equipment to secure Debt incurred solely to acquire
such equipment up to an aggregate amount of $1,500,000 in addition to Liens
outstanding as of the Closing Date, or with the prior written consent of
Lender, (f) Liens on Mortgage Loans financed pursuant to the ▇▇▇▇▇▇
Facility; (g) Liens on Mortgage Loans financed pursuant to the Household
Facility; or (h) Liens on Mortgage Loans financed pursuant to the ▇▇▇▇▇▇
Facility, or omit to take any action required to keep any Servicing
Contracts in full force and effect; provided, however, that if no Default
or Event of Default has occurred and is continuing, servicing on individual
Mortgage Loans may be sold concurrently with and incidental to the sale of
such Mortgage Loans (with servicing released) in the ordinary course of the
Company's business.
7. Section 7.6 of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
-2-
7.6 Debt to Tangible Net Worth Ratio. Permit the ratio of Debt
(excluding, for this purpose only, Debt arising under the Hedging
Arrangements, to the extent of assets arising under the same Hedging
Arrangements) to Tangible Net Worth of the Company (and its Subsidiaries,
on a consolidated basis) at any time to exceed (i) from the Closing Date,
to and including December 30, 1999, 20 to 1; and (ii) from and after
December 31, 1999, 17 to 1.
8. Section 7.12 of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
7.12 Gestation Facilities. Directly or indirectly sell or finance
Pledged Mortgages under any Gestation Agreements other than the ▇▇▇▇▇▇
Facility, the Household Facility or the ▇▇▇▇▇▇ Facility; provided, that no
Ordinary Warehousing Advance shall be made against any Pledged Mortgage
sold or financed under the ▇▇▇▇▇▇ Facility, the Household Facility or the
▇▇▇▇▇▇ Facility after initially being pledged hereunder.
9. The Company must pay all out-of-pocket costs and expenses of the
Lender, including, without limitation, reasonable fees, service charges and
disbursements of counsel in connection with the amendment, enforcement and
administration of the Agreement.
10. The Company must deliver to the Lender (a) four executed originals of
this Amendment; and (b) four executed Certificates of Secretary with corporate
resolutions and certificate of incumbency of the Company.
11. The Company represents, warrants and agrees that as of the Effective
Date there exists no Default or Event of Default under the Loan Documents, the
Loan Documents continue to be the legal, valid and binding agreements and
obligations of the Company enforceable in accordance with their terms, as
modified herein, the Lender is not in default under any of the Loan Documents
and the Company has no offset or defense to its performance or obligations under
any of the Loan Documents, the representations contained in the Loan Documents
remain true and accurate in all respects, and there has been no material adverse
change in the financial condition of the Company from the date of the Agreement
to the date of this Amendment.
12. Except as hereby expressly modified, the Agreement shall otherwise be
unchanged and shall remain in full force and effect, and the Company ratifies
and reaffirms all of its obligations thereunder.
13. This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
-3-
IN WITNESS WHEREOF, the Company and the 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.
ACCREDITED HOME LENDERS, INC., a
California corporation
By: /s/ [ILLEGIBLE]
---------------------------
Its: Executive Vice President
--------------------------
RESIDENTLAL FUNDING
CORPORATION, a Delaware corporation
By: /s/ [ILLEGIBLE]
---------------------------
Its: Director
--------------------------
-4-
STATE OF CALIFORNIA )
)ss.
COUNTY OF SAN DIEGO )
On April 30, 2001, before me, a Notary Public, personally appeared
▇▇▇ ▇. ▇▇▇▇▇▇▇ the Executive V.P. of ACCREDITED HOME LENDERS, INC., a California
corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
[SEAL] /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
[STAMP] Notary Public
My Commission Expires: 01/02/04
-----------
STATE OF MINNESOTA )
)ss.
COUNTY OF HENNIPIN )
On May 9, 2001, before me, a Notary Public, personally appeared
▇▇▇▇ ▇▇▇▇ the DIRECTOR of RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
[SEAL] /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
[STAMP] Notary Public
My Commission Expires: 1-31-05
------------
-5-
THIRD AMENDMENT
TO
WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT
THIS THIRD AMENDMENT TO WAREHOUSING CREDIT, TERM LOAN AND SECURITY
AGREEMENT (this "Amendment") is entered into as of this 31/st day of January,
2001, by and between ACCREDITED HOME LENDERS, INC., a California corporation
(the "Company") and RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender").
WHEREAS, the Company and the Lender have entered into a single family
revolving warehouse facility and a term loan facility as evidenced by a
Warehousing Promissory Note in the principal sum of $158,000,000 dated as of
March 17, 1999, a Sublimit Promissory Note in the principal amount of
$10,500,000 dated as of March 17, 1999, and a Term Loan Promissory Note in the
principal amount of $40,000,000 dated as March 17, 1999 (the "Notes"), and by a
Warehousing Credit, Term Loan and Security Agreement dated as of March 17, 1999,
as amended by that certain First Amendment to Warehousing Credit, Term Loan and
Security Agreement dated as of February 24, 2000 and by that certain Second
Amendment to Warehousing Credit, Term Loan and Security Agreement dated as July
12, 2000 (as amended hereby and as the same may hereafter be amended,
supplemented, or otherwise modified from time to time, the "Agreement"); and
WHEREAS, the Company has asked the Lender to amend certain terms of the
Agreement, and the Lender has agreed to such amendment subject to the terms and
conditions of this Amendment.
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual covenants, agreements and conditions hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall
have their respective meanings set forth in the Agreement.
2. The Effective Date of this Amendment shall be January 31, 2001,
the date on which the Company has complied with all the terms and conditions of
this Amendment.
3. The definition of "Eligible Securitization Transaction" set forth
in Section 1.1 of the Agreement is amended to read in its entirety as follows:
"Eligible Securitization Transaction" means a Securitization
Transaction in which (a) the Company enters into an agreement whereby an
Affiliate of the Lender shall sponsor, through one of its trusts or
subsidiaries, such Securitization Transaction and an Affiliate of the
Lender shall function as sole lead manager or lead manager in the
distribution of the resulting securities; or (b) an Affiliate of the
Lender functions (at such Affiliate's option and on terms and conditions
acceptable to the Lender and such Affiliate) as sole lead manager, lead
manager, co-lead manager or syndicate
underwriter in the distribution of the securities resulting from such
Securitization Transaction. In addition, if the Lender has provided
written notice to the Company that none of the Lender's Affiliates
desires to act as sole lead manager, lead manager, co-lead manager or
syndicate underwriter in the distribution of the securities resulting
from a Securitization Transaction proposed by the Company (as
contemplated by clauses (a) and (b), above), such Securitization
Transaction shall be deemed to be an "Eligible Securitization
Transaction" if its structure, including, without limitation, the
structure of the Mortgage Pool backing such Securitization Transaction,
and the structure of the resulting Interest-only Certificate, are
acceptable to the Lender, in its sole and absolute discretion.
4. Subsection (1) of Section 2.3(b) of the Agreement is hereby
amended to read in its entirety as follows:
(1) No Term Loan Advance shall be made if, after giving effect
thereto, (i) the initial principal amount of such Term Loan Advance, plus
the initial principal amount of all prior Term Loan Advances, would
exceed $40,000,000, or (ii) the aggregate outstanding principal balance
of all Term Loan Advances would exceed the Term Loan Collateral Value.
5. Section 2.3(b) of the Agreement is hereby amended by adding a new
Subsection (4) that reads in its entirety as follows:
(4) The initial principal amount of all Term Loan Advances
against Pledged Interest-Only Certificates issued in Eligible
Securitization Transactions shall not exceed $20,000,000.
6. Exhibit E, Exhibit G and Exhibit O to the Agreement are hereby
deleted in their entirety and replaced with new Exhibit E, Exhibit G and Exhibit
O attached to this Amendment. All references in the Agreement Exhibit E, Exhibit
G and Exhibit O will be deemed to refer to the new Exhibit E, Exhibit G and
Exhibit O.
7. The Company shall pay a document production fee of $350 and all
out-of-pocket costs and expenses of the Lender, including, without limitation,
reasonable fees, service charges and disbursements of counsel in connection with
the amendment, enforcement and administration of the Agreement.
8. The Company represents, warrants and agrees that there exists no
Default or Event of Default under the Loan Documents, the Loan Documents
continue to be the legal, valid and binding agreements and obligations of the
Company enforceable in accordance with their terms, as modified herein, the
Lender is not in default under any of the Loan Documents and the Company has no
offset or defense to its performance or obligations under any of the Loan
Documents, the representations contained in the Loan Documents remain true and
accurate in all respects, and there has been no material adverse change in the
financial condition of the Company from the date of the Agreement to the date of
this Amendment.
9. Except as hereby expressly modified, the Agreement shall otherwise
be unchanged and shall remain in full force and effect, and the Company ratifies
and reaffirms all of its obligations thereunder.
2
10. This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the 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,
ACCREDITED HOME LENDERS, INC., a
California corporation
By: /s/ ILLEGIBLE
----------------------------------
Its: Executive Vice President
---------------------------------
RESIDENTIAL FUNDING CORPORATION, a
Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Its: Director
---------------------------------
3
STATE OF CALIFORNIA )
)ss.
COUNTY OF SAN DIEGO )
On January 31, 2001, before me, a Notary Public, personally appeared ▇▇▇
▇. ▇▇▇▇▇▇▇, the Executive VP of ACCREDITED HOME LENDERS, INC., a California
corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
[STAMP] Notary Public
My Commission Expires: March 11, 04
------------
STATE OF California )
)ss.
COUNTY OF Los Angeles )
On February 12, 2001, before me, a Notary Public, personally appeared
▇▇▇▇ ▇. Skev, the Director of RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ ▇▇▇▇▇ ▇▇▇
-----------------------------------
Notary Public
My Commission Expires: 2/19/04
------------
(SEAL)
[STAMP]
4
EXHIBIT E
SCHEDULE OF SERVICING CONTRACTS
FOR
THE BORROWER'S SERVICING PORTFOLIO
Pooling and Servicing Agreement dated as of September 1, 1996, as amended by
Amendment No. 1 to Pooling and Servicing Agreement dated as of July 1, 1998,
each between the Borrower and Bankers Trust Company and each relating to
Accredited Mortgage Loan Trust 1996-1.
Pooling and Servicing Agreement dated as of February 1, 2000, among the
Borrower, Accredited Mortgage Loan Trust 2000-1, Advanta Mortgage Corp. USA, and
▇▇▇▇▇ Fargo Bank Minnesota, National Association f/k/a Norwest Bank Minnesota,
National Association.
EXHIBIT G
SUBSIDIARIES
Accredited Home Capital, Inc., a Delaware corporation whose principal place of
business is located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
which is qualified as a corporation in California, in and the outstanding
capital stock of which is owned entirely by the Borrower.
Accredited Home Acceptance, Inc., a Delaware corporation whose principal place
of business is located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇, which is qualified as a corporation in California, and the outstanding
capital stock of which is owned entirely by the Borrower.
EXHIBIT O
ASSUMED NAMES
Axiom Financial Services, a division of
Accredited Home Lenders, Inc.
Home Funds Direct
SECOND AMENDMENT
TO
WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO WAREHOUSING CREDIT, TERM LOAN AND SECURITY
AGREEMENT (this "Amendment") is entered into as of this 12th day of July, 2000,
by and between ACCREDITED HOME LENDERS, INC., a California corporation (the
"Company") and RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender").
WHEREAS, the Company and the Lender have entered into a single family
revolving warehouse facility and a term loan facility as evidenced by a
Warehousing Promissory Note in the principal sum of $158,000,000 dated as of
March 17, 1999, a Sublimit Promissory Note in the principal amount of
$10,500,000 dated as of March 17, 1999, and a Term Loan Promissory Note in the
principal amount of $40,000,000 dated as March 17, 1999 (the "Notes"), and by a
Warehousing Credit, Term Loan and Security Agreement dated as of March 17, 1999,
as the same may have been amended or supplemented (the "Agreement"); and
WHEREAS, the Company has requested the Lender to amend the terms of the
Agreement, and the Lender has agreed to such amendment subject to the terms and
conditions of this Amendment.
NOW, THEREFORE, for and in consideration of the foregoing and of the mutual
covenants, agreements and conditions hereinafter set forth and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall have
their respective meanings set forth in the Agreement.
2. The Effective Date of this Amendment shall be July 12, 2000, the date on
which the Company has complied with all the terms and conditions of this
Amendment.
3. Section 1.1 of the Agreement is hereby amended by adding the following
definitions in appropriate alphabetical order:
"Estimated APO Increase" has the meaning set forth in Section 2.1(c)(4)
hereof.
"Qualifying Sale" has the meaning set forth in Section 2.1(c)(4)
hereof.
4. Section 2,1(c)(4) of the Agreement is hereby amended to read in its
entirety as follows:
(4) For the aggregate amount of Premium Advances at any time
outstanding, an amount equal to the lesser of (i) 2.5% of the aggregate
Mortgage Note Amount of all Eligible Subject Loans pledged hereunder, or
(ii) 60% of the Residual Income Value of the Estimated APO Increase. As
used in this Agreement, the term "Estimated APO Increase" means the amount
by which the Lender estimates the Aggregate Payment Obligation would
increase if those Eligible Subject Loans were sold to Lender pursuant to a
Shared Execution Forward Commitment. The Estimated APO Increase shall be
calculated based on the most recent determination of the increase in the
Aggregate Payment Obligation resulting from a sale of Eligible Subject
Loans pursuant to a Shared Execution Forward Commitment (expressed as a
percentage of the outstanding principal balance of the underlying Mortgage
Loans) that satisfies the following requirements (a "Qualifying Sale"):
(A) it involved Eligible Subject Loans with an aggregate principal balance
of at least $10 million and (B) it was consummated not more than sixty (60)
days prior to the most recent determination of the Residual Income Value of
the entire Aggregate Payment Obligation. In the absence of a Qualifying
Sale, the Estimated APO Increase shall be calculated based on the lesser of
the following (expressed as a percentage of the outstanding principal
balance of the underlying Mortgage Loan): (Y) the most recent determination
of the increase in the Aggregate Payment Obligation resulting from a sale
of Eligible Subject Loans pursuant to a Shared Execution Forward
Commitment, or (Z) the most recent determination of the Residual Income
Value of the entire Aggregate Payment Obligation.
5. Clause (e) of Section 7.2 of the Agreement is hereby amended to read in
its entirety as follows:
(e) Liens on equipment to secure Debt incurred solely to acquire such
equipment up to an aggregate amount of $1,000,000 in addition to
Liens outstanding as of the Closing Date, or with the prior written
consent of Lender,
6. Exhibit C-PRE to the Agreement is hereby deleted and replaced by Exhibit
C-PRE to this Amendment.
7. The Company shall pay a document production fee of $350 and all
out-of-pocket costs and expenses of the Lender, including, without limitation,
reasonable fees, service charges and disbursements of counsel in connection with
the amendment, enforcement and administration of the Agreement.
8. The Company represents, warrants and agrees that there exists no Default
or Event of Default under the Loan Documents, the Loan Documents continue to be
the legal, valid and binding agreements and obligations of the Company
enforceable in accordance with their terms, as modified herein, the Lender is
not in default under any of the Loan Documents and the Company has no offset or
defense to its performance or obligations under any of the Loan Documents, the
representations contained in the Loan Documents remain true and accurate in all
respects, and there
2
has been no material adverse change in the financial condition of the Company
from the date of the Agreement to the date of this Amendment.
9. Except as hereby expressly modified, the Agreement shall otherwise be
unchanged and shall remain in full force and effect, and the Company ratifies
and reaffirms all of its obligations thereunder.
10. This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the 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.
ACCREDITED HOME LENDERS, INC., a
California corporation
By: /s/ [ILLEGIBLE]
---------------------------------
Its: Executive Vice President
--------------------------------
RESIDENTIAL FUNDING
CORPORATION, a Delaware corporation
By: /s/ [ILLEGIBLE]
---------------------------------
Its: Director
--------------------------------
STATE OF CALIFORNIA )
) ss.
COUNTY OF SAN DIEGO )
On July 12, 2000, before me, a Notary Public, personally appeared ▇▇▇ ▇.
▇▇▇▇▇▇▇, the Executive Vice President of ACCREDITED HOME LENDERS, INC., a
California corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Notary Public
My Commission Expires: ____________
(SEAL)
STATE OF CALIFORNIA )
) ss. [STAMP]
COUNTY OF LOS ANGELES )
On July 17th, 2000, before me, a Notary Public, personally appeared ▇▇▇▇
▇▇▇▇▇▇ ???, the Director of RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation, (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he executed the same in his authorized capacity, and that by his signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal.
/s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Notary Public
My Commission Expires: Sept 17-2003
-------------
(SEAL)
[STAMP]
4
EXHIBIT C-PRE
PREMIUM ADVANCE REQUEST
Date:___________________
Reference is made to that certain Warehousing Credit, Term Loan and
Security Agreement between ACCREDITED HOME LENDERS, INC., a California
corporation (the "Company") and RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation (the "Lender"), dated as of March 17, 1999 (as the same may be
amended, modified, supplemented, renewed or restated from time to time, the
"Agreement"). All capitalized terms used herein and all Section numbers given
herein refer to those terms and Sections set forth in the Agreement. This
Premium Advance Request is submitted to the Lender pursuant to Section 2.2(a) of
the Agreement.
The undersigned hereby requests a Premium Advance in the aggregate
principal amount of $_______ to be made on ___________, 200__. After giving
effect to such Premium Advance, the aggregate principal balance of all
outstanding Premium Advances will be $________.
The aggregate Mortgage Note Amount of all Eligible Subject Loans pledged
under the Agreement as of the date hereof is $________. Two and one-half percent
of such amount is $_______ ("Amount A"). [The Residual Income Value of the
amount by which the Aggregate Payment Obligation would increase upon the sale of
such Eligible Subject Loans pursuant to a Shared Execution Forward Commitment is
__% (the percentage value of the most recent addition to the Residual Income
Value of the Aggregate Payment Obligation in a Qualifying Sale), or $________
("Amount B"). Sixty percent of Amount B is $_________ ("Amount").] [The
Residual Income Value of the amount by which the Aggregate Payment Obligation
would increase upon the sale of such Eligible Subject Loans pursuant to a Shared
Execution Forward Commitment is __% (the lesser of (i) __%, the percentage value
of the most recent addition to the Residual Income Value of the Aggregate
Payment Obligation or (ii) __%, the most recent percentage value of the entire
Aggregate Payment Obligation) of the aggregate Mortgage Note Amount of all
Eligible Subject Loans pledged under the Agreement, or $________ ("Amount B").
Sixty percent of Amount B is $________ ("Amount C").] The lesser of Amount A or
Amount C is $_________. The Company represents and warrants that it has no
reason to believe that such amounts are incorrect. The amount of the Premium
Advances requested are not more than the amount permitted by the Agreement to be
borrowed pursuant to this Advance Request.
The Company hereby certifies that no Default or Event of Default has
occurred and is continuing and that all of the Company's representations and
warranties in this Advance Request and the Agreement are currently true and
correct and (to the extent applicable on or after their respective dates) are
hereby republished. Since the Statement Date, there has been no material adverse
change in the business, financial condition or results of operation of the
Company and its Subsidiaries, taken as a whole. The Company acknowledges that
the Lender will rely on the truth of each statement in this Advance Request in
making the requested Premium Advances.
METHOD OF ADVANCE
[_] Wire Transfer
Amount of Wire: ________________ Date of Wire: ______________
Credit Acct. No.: ______________ Credit Acct. Name:_______________
ABA No.: ______________________ Bank Name: ___________________
Account to Debit: ______________ City & State:____________________
Ref: ________________ Advise: ___________________ Phone:___________________
ACCREDITED HOME LENDERS, INC.,
a California corporation
By:_____________________________________
Its:____________________________________
================================================================================
FOR RFC INTERNAL USE ONLY
Repetitive Code:______________________________ Date:_______________________
Wire Initiator's Initials:______________ Wire Verifier's Initials:__________
================================================================================
FIRST AMENDMENT TO
WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO WAREHOUSING CREDIT, TERM LOAN AND SECURITY
AGREEMENT (this "Amendment") is entered into as of this 24th day of February,
2000, by and between ACCREDITED HOME LENDERS, INC., a California corporation
(the "Company") and RESIDENTIAL, FUNDING CORPORATION, a Delaware corporation
(the "Lender").
WHEREAS, the Company and the Lender have entered into a single family
revolving warehouse facility and a term loan facility as evidenced by a
Warehousing Promissory Note in the principal sum of $158,000,000 dated as of
March 17, 1999, a Sublimit Promissory Note in the principal amount of
$10,500,000 dated as of March 17, 2999, and a Term Loan Promissory Note in the
principal amount of $40,000,000 dated as March 17, 1999 (the "Notes"), and by a
Warehousing Credit, Term Loan and Security Agreement dated as of March 17, 1999,
as the same may have been amended or supplemented (the "Agreement"); and
WHEREAS, the Company has requested the Lender to amend the terms of
the Agreement, and the Lender has agreed to such amendment subject to the terms
and conditions of this Amendment-
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual covenants, agreements and conditions hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall
have their respective meanings set forth in the Agreement.
2. The Effective Date of this Amendment shall be February 25,
2000, the date on which the Company has complied with all the terms and
conditions of this Amendment.
3. Section 1.1 of the Agreement is hereby amended to delete the
following definitions in their entirety and to substitute the following in lieu
thereof:
"Closing Date" means March 18, 1999.
"Eligible Securitization Transaction" means a Securitization
Transaction (a) in which the Company enters into an agreement whereby
an Affiliate of the Lender shall sponsor, through one of its trusts
or subsidiaries, such Securitization Transaction and an Affiliate of
the Lender shall function as lead manager in the distribution of the
resulting securities; (b) in which an Affiliate of the Lender functions, on
terms and conditions acceptable to such Affiliate and the Company, as lead
manager in the distribution of the securities resulting from such
Securitization Transaction or such Affiliate functions as lead manager with
▇▇▇▇▇▇ Brothers as co-lead manager, on terms and conditions acceptable to
such Affiliate, the Company and ▇▇▇▇▇▇ Brothers, in the distribution of the
securities resulting from such Securitization Transaction; provided,
however, that ▇▇▇▇▇▇ Brother's role as co-lead manager shall be contingent
upon the ▇▇▇▇▇▇ Facility remaining available to the Company at the time of
such Securitization Transaction; or (c) which the Lender, in its sole and
absolute discretion, otherwise approves as an "Eligible Securitization
Transaction" notwithstanding its failure to satisfy the requirements of
clauses (a) or (b) above; provided, that in any such case the structure of
the Securitization Transaction, the Mortgage Pool backing such
Securitization Transaction, and the resulting Interest-only Certificate is
acceptable to the Lender, in its role discretion.
"Interest-Only Certificate" means a subordinated interest-only
certificate, residual certificate or similar interest issued to the Company
in connection with an Eligible Securitization Transaction.
"Term Loan Commitment Termination Date" means the earliest of (a) the
close of business on March 18, 2002, as such date may be extended from time
to time as agreed to in writing by the Company and the Lender, (b) the date
30 days after the date the Company makes an initial public offering of any
of its capital stock, (c) the date 30 days after the commencement of Early
Amortization, and (d) the date the obligation of the Lender to make further
Term Loan Advances hereunder is terminated pursuant to Section 8.2 below.
"Warehousing Maturity Date" shall mean the earlier of: (a) the close
of business on March 18, 2002, as such date may be extended from time to
time in writing by the Lender, in its sole discretion, on which date the
Warehousing Commitment shall expire of its own term and without the
necessity of action by the Lender, (b) 30 days after the commencement of
Early Amortization, and (c) the date the Warehousing Advances become due
and payable pursuant to Section 8.2 below.
4. The Company shall (a) deliver to the Lender an executed original of this
Amendment and an executed original UCC-2 Financing Statement in recordable form,
and (b) pay a document production fee
2
of $350 and all out-of-pocket costs and expenses of the Lender, including,
without limitation, reasonable fees, service charge and disbursements of
counsel in connection with the amendment, enforcement and administration of the
Agreement.
5. The Company 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 the
Company enforceable in accordance with their terms, as modified herein, (c) the
Lender is not in default under any of the Loan Documents and the Company has no
offset or defense to its performance or obligations under any of the Loan
Documents, (d) the representations contained in the Loan Documents remain true
and accurate in all respects, and (e) there has been no material adverse change
in the financial condition of the Company from the date of the Agreement to the
date of this Amendment.
6. Except as hereby expressly modified, the Agreement shall otherwise be
unchanged and shall remain in full force and effect, and the Company ratifies
and reaffirms a11 of its obligations thereunder.
7. This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the 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.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: /s/ [ILLEGIBLE]
----------------------------------
Its: Executive Vice President
---------------------------------
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By: ________________________________
Its: ________________________________
3
of $350 and all out-of-pocket costs and expenses of the Lender, including,
without limitation, reasonable fees, service charges and disbursements of
counsel in connection with the amendment, enforcement and administration of the
Agreement.
5. The Company 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 the Company enforceable in accordance with their terms, as modified herein,
(c) the Lender is not in default under any of the Loan Documents and the
Company has no offset or defense to its performance or obligations under any of
the Loan Documents, (d) the representations contained in the Loan Documents
remain true and accurate in all respects, and (e) there has been no material
adverse change in the financial condition of the Company from the date of the
Agreement to the date of this Amendment.
6. Except as hereby expressly modified, the Agreement shall otherwise
be unchanged and shall remain in full force and effect, and the Company ratifies
and reaffirms all of its obligations thereunder.
7. This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the 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.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: _____________________________
Its: ____________________________
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By: /s/ [ILLEGIBLE]
------------------------------
Its: Director
-----------------------------
3
STATE OF CALIFORNIA )
---------------
) ss.
COUNTY OF SAN DIEGO )
--------------
On February 25, 2000, before me, a Notary Public, personally
appeared ▇▇▇ ▇. ▇▇▇▇▇▇▇, the Executive Vice President of ACCREDITED HOME
LENDERS, INC., a California corporation, personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person whose name is subscribed
to the within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
[SEAL] /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Notary Public
My Commission Expires: Dec 26, 2000
STATE OF ______________ )
) ss.
COUNTY OF _____________ )
On ___________________, 2000, before me, a Notary Public, personally
appeared ________________________________, the Director of RESIDENTIAL FUNDING
CORPORATION, a Delaware corporation, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
_________________________________________
Notary public
(SEAL) My Commission Expires:
4
STATE OF ____________ )
) ss.
COUNTY OF ___________ )
On __________________, 2000, before me, a Notary Public, personally
appeared ______________________________________________ the ____________________
of ACCREDITED HOME LENDERS, INC., a California corporation, personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed the same in his/her authorized capacity, and that by his/her
signature on the instrument the person, or the entity upon behalf of which the
person acted, executed the instrument.
WITNESS my hand and official seal.
____________________________________________
Notary Public
(SEAL) My Commission Expires: _____________________
STATE OF California
----------------- )
)ss.
COUNTY OF Los Angeles
---------------- )
On February 29, 2000, before me, a Notary Public, personally appeared ▇▇▇▇
▇▇▇▇, the Director of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
Notary Public
(SEAL) My Commission Expires: Nov. 11, 2003
---------------------
4
FOURTH AMENDED AND RESTATED
WAREHOUSING PROMISSORY NOTE
Date: December 31, 2001
FOR VALUE RECEIVED, the undersigned, ACCREDITED HOME LENDERS, INC., a California
corporation ("AHL") and ACCREDITED HOME CAPITAL, INC., a Delaware corporation
("AHC") (AHL and AHC are collectively referred to as the "Borrower" and
individually, as "Co-Borrower") promise to pay to the order of RESIDENTIAL
FUNDING CORPORATION, a Delaware corporation ("Lender" or, together with its
successors and assigns, "Holder") whose principal place of business is ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other
place as the Holder may designate from time to time, (i) a principal sum equal
to the amount of Warehousing Advances outstanding under the Agreement (as that
term is defined below), (ii) interest on that amount from the date of each
Warehousing Advance until repaid in full, and (iii) all other fees, charges and
other Obligations due under the Agreement (including reasonable attorneys' fees
and expenses incurred in connection with the collection of this Note), at the
rates and at the times set forth in the Agreement. All payments under this Note
and the Agreement must be made in lawful money of the United States and in
immediately available funds.
This Note evidences a line of credit and is the Warehousing Note referred to in
that certain Warehousing Credit, Term Loan and Security Agreement dated March
17, 1999, between Borrower and Lender (as amended, restated, renewed or
replaced, the "Agreement"). Reference is made to the Agreement (which is
incorporated by reference as fully and with the same effect as if set forth at
length in this Note) for a description of the Collateral and a statement of (a)
the covenants and agreements made by Borrower, (b) the rights and remedies
granted to Lender and (c) the other matters governed by the Agreement.
Capitalized terms not otherwise defined in this Note have the meanings set forth
in the Agreement.
Borrower is issuing this Note in replacement for, and not in satisfaction of,
that certain Second Amended and Restated Warehousing Promissory Note dated
December 28, 2001 (the "Existing Note") to evidence its Obligations under the
Agreement. All amounts owed by Borrower under the Existing Note (including the
unpaid principal of the Existing Note, accrued and unpaid interest on that
principal and any accrued and unpaid fees and charges payable by Borrower under
the Agreement, whether or not any of those amounts are currently due and
payable) as of the date of this Note are owed under and evidenced by this Note.
In addition to principal, interest, fees and other charges payable by Borrower
under this Note and the Agreement, Borrower must pay all out-of-pocket costs and
expenses of Lender, including reasonable fees, service charges and disbursements
of counsel (including allocated costs of internal counsel), in connection with
the enforcement and collection of this Note.
Borrower waives demand, notice, protest and presentment in connection with
collection of amounts outstanding under this Note.
The promises and agreements herein shall be construed to be and are hereby
declared to be the joint and several promises and agreements of each Co-Borrower
and shall constitute the joint and several obligation of each Co-Borrower and
shall be fully binding upon and enforceable
1
against each Co-Borrower. The release of any party to this Note shall not affect
or release the joint and several liability of any other party. The Lender may at
its option enforce this Note against one or all of the Co-Borrower, and the
Lender shall not be required to resort to enforcement against each Co-Borrower
and the failure to proceed against or join each Co-Borrower shall not affect the
joint and several liability of each Co-Borrower.
This Note is governed by the laws of the State of Minnesota, without reference
to its principles or conflicts of laws.
IN WITNESS WHEREOF, Borrower has executed this Note as of the day and year first
above written.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: /s/ [ILLEGIBLE]
----------------------------
Its: Exec VP
----------------------------
ACCREDITED HOME CAPITAL, INC.,
a Delaware corporation
By: /s/ [ILLEGIBLE]
----------------------------
Its: CEO
----------------------------
2
WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT
(SINGLE FAMILY MORTGAGE LOANS)
BETWEEN
ACCREDITED HOME LENDERS, INC.,
a California corporation
AND
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
Dated as of March 17, 1999
TABLE OF CONTENTS
PAGE
----
1. DEFINITIONS ...................................................... 1
1.1 Defined Terms ............................................. 1
1.2 Other Definitional Provisions ............................. 19
2. THE CREDIT ....................................................... 20
2.1 The Warehousing Commitment ................................ 20
2.2 Procedures for Obtaining Ordinary Warehousing Advances .... 24
2.3 The Term Loan Commitment .................................. 27
2.4 Procedures for Obtaining Term Loan Advance ................ 28
2.5 Notes ..................................................... 29
2.6 Interest .................................................. 29
2.7 Principal Payments ........................................ 32
2.8 Expiration of Commitment .................................. 38
2.9 Method of Making Payments ................................. 38
2.10 Non-Usage Fees ............................................ 39
2.11 Warehousing Fees .......................................... 39
2.12 Miscellaneous Charges ..................................... 40
2.13 Interest Limitation ....................................... 40
2.14 Increased Costs; Capital Requirements ..................... 41
3. COLLATERAL ....................................................... 42
i
3.1 Grant of Security Interest .................................. 42
3.2 Release of Security Interest in Collateral .................. 46
3.3 Delivery of Additional Collateral or Mandatory Prepayment ... 48
3.4 Release of Collateral ....................................... 49
3.5 Collection and Servicing Rights ............................. 49
3.6 Return of Collateral at End of Commitment ................... 50
4. CONDITIONS PRECEDENT .............................................. 50
4.1 Initial Advance ............................................. 50
4.2 Each Advance ................................................ 51
5. REPRESENTATIONS AND WARRANTIES .................................... 52
5.1 Organization; Good Standing; Subsidiaries ................... 52
5.2 Authorization and Enforceability ............................ 53
5.3 Approvals ................................................... 53
5.4 Financial Condition ......................................... 54
5.5 Litigation .................................................. 54
5.6 Compliance with Laws ........................................ 54
5.7 Regulation U ................................................ 55
5.8 Investment Company Act ...................................... 55
5.9 Payment of Taxes ............................................ 55
5.10 Agreements .................................................. 55
5.11 Title to Properties ......................................... 56
5.12 ERISA ....................................................... 56
ii
5.13 Eligibility ............................................ 57
5.14 Place of Business ...................................... 57
5.15 Special Representations Concerning Collateral .......... 57
5.16 Servicing .............................................. 60
5.17 Special Representations Concerning REO Properties ...... 60
5.18 No Adverse Selection ................................... 61
5.19 Year 2000 Compliance ................................... 61
5.20 Assumed Names .......................................... 61
6. AFFIRMATIVE COVENANTS ....................................... 62
6.1 Payment of Notes ....................................... 62
6.2 Financial Statements and Other Reports ................. 62
6.3 Maintenance of Existence; Conduct of Business .......... 66
6.4 Compliance with Applicable Laws ........................ 67
6.5 Inspection of Properties and Books ..................... 67
6.6 Notice ................................................. 67
6.7 Payment of Debt, Taxes, etc ............................ 68
6.8 Insurance .............................................. 69
6.9 Closing Instructions ................................... 69
6.10 Subordination of Certain Indebtedness .................. 69
6.11 Other Loan Obligations ................................. 69
6.12 Use of Proceeds of Advances ............................ 70
iii
6.13 Special Affirmative Covenants Concerning Collateral ......... 70
7. NEGATIVE COVENANTS ............................................... 72
7.1 Contingent Liabilities ...................................... 72
7.2 Sale or Pledge of Assets .................................... 72
7.3 Merger; Sale of Assets; Acquisitions; Business Activities ... 73
7.4 Deferral of Subordinated Debt ............................... 73
7.5 Loss of Eligibility ......................................... 74
7.6 Debt to Tangible Net Worth Ratio ............................ 74
7.7 Minimum Tangible Net Worth .................................. 74
7.8 Liquidity ................................................... 74
7.9 Quarterly Net Income ........................................ 74
7.10 Transactions with Affiliates ................................ 74
7.11 Acquisition of Recourse Servicing Contracts ................. 75
7.12 Gestation Facilities ........................................ 75
7.13 Special Negative Covenants Concerning Collateral ............ 75
8. DEFAULTS; REMEDIES ............................................... 76
8.1 Events of Default ........................................... 76
8.2 Remedies .................................................... 80
8.3 Application of Proceeds ..................................... 85
8.4 Lender Appointed Attorney-in-Fact ........................... 86
8.5 Right of Set-Off ............................................ 87
iv
9. NOTICES ............................................................ 87
10. REIMBURSEMENT OF EXPENSES; INDEMNITY ............................... 88
11. FINANCIAL INFORMATION .............................................. 89
12. MISCELLANEOUS ...................................................... 89
12.1 Terms Binding Upon Successors; Survival of Representations .... 89
12.2 Assignment .................................................... 89
12.3 Amendments .................................................... 90
12.4 Governing Law ................................................. 90
12.5 Participations ................................................ 90
12.6 Relationship of the Parties ................................... 91
12.7 Severability .................................................. 91
12.8 Operational Reviews ........................................... 92
12.9 Consent to Credit References .................................. 92
12.10 Consent to Jurisdiction ...................................... 92
12.11 Counterparts ................................................. 92
12.12 Entire Agreement ............................................. 93
12.13 WAIVER OF JURY TRIAL ......................................... 93
v
EXHIBITS
Exhibit A-l Warehousing Promissory Note
Exhibit A-2 Sublimit Promissory Note
Exhibit A-3 Term Loan Promissory Note
Exhibit B INTENTIONALLY OMITTED
Exhibit C-PRE Request for Premium Advances
Exhibit C-REO Request for Advance Against REO Properties
Exhibit C-SF Request for Advance Against Single Family Mortgage Loans
Exhibit C-TL Request for Term Loan Advance
Exhibit D-NP/REO Procedures and Documentation for Warehousing
Nonperforming Mortgage Loans and REO Properties
Exhibit D-SF Procedures and Documentation for Warehousing Single Family
Mortgage Loans
Exhibit E Schedule of Servicing Contracts
Exhibit F Subordination of Debt Agreement
Exhibit G Subsidiaries
Exhibit H Legal Opinion
Exhibit I-SF Officer's Certificate
Exhibit J Schedule of Existing Warehouse Lines
Exhibit K Funding Bank Agreement (Wire)
Exhibit L Commitment Summary Report
vi
"Commitment Period" has the meaning set forth in the Loan Sale
Commitment.
"Commitment Summary Report" has the meaning set forth in Section
6.2(h) of this Agreement.
"Committed Purchase Price" means for an Eligible Loan the product of
the Mortgage Note Amount multiplied by (a) the price (expressed as a
percentage) as set forth in a Purchase Commitment for such Eligible Loan
(exclusive of any "Payment Obligation" payable under a Shared Execution
Forward Commitment or of an Interest-only Certificate issued in an Eligible
Securitization Transaction), or (b) in the event such Eligible Loan is to
be used to back an Agency Security, the price (expressed as a percentage)
as set forth in a Purchase Commitment for such Agency Security.
"Company" has the meaning set forth in the first paragraph of this
Agreement.
"Convertible Debt" means the outstanding principal balance of the
loans made by the Lender to the Company under the Convertible Debt
Agreement.
"Convertible Debt Agreement" means the Loan and Security Agreement
(Convertible Debt) of even date herewith between the Company and the
Lender, pursuant to which the Lender has agreed to make a loan to the
Company and the Company has agreed to issue the Debenture to the Lender, as
the same may be amended, supplemented, restated or otherwise modified and
in effect from time to time.
"Debenture" has the meaning set forth in the Convertible Debt
Agreement.
"Debt" means, with respect to any Person at any date, (a) all
indebtedness or other obligations of such Person which, in accordance with
GAAP, would be included in determining total liabilities as shown on the
liabilities side of a balance sheet of such Person at such date, and (b)
all indebtedness or other obligations of such Person for borrowed money or
for the deferred purchase price of property or services; provided that for
purposes of this Agreement, there shall be excluded from Debt at any date
4
"Affiliate" has the meaning set forth in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act.
"Agency Security" means a Mortgage-backed Security issued or
guarantied by ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae.
"Agreement" means this Warehousing Credit, Term Loan and Security
Agreement (Single Family Mortgage Loans), either as originally executed or
as it may from time to time be supplemented, modified or amended.
"Aggregate Payment Obligation" means, with respect to all Eligible
Subject Loans purchased by the Lender under Shared Execution Forward
Commitments, the amount payable to the Company by the Lender as the
"Aggregate Payment Obligation" (as defined in each such Shared Execution
Forward Commitment).
"Approved Custodian" means a pool custodian or other Person which is
deemed acceptable to the Lender from time to time in its sole discretion to
hold a Mortgage Loan for inclusion in a Mortgage Pool or to hold a Mortgage
Loan as agent for an Investor who has issued a Purchase Commitment for such
Mortgage Loan.
"Bank United Facility" means a reactivation of the expired facility
provided for in the Warehousing Credit and Security Agreement dated as of
August 29, 1996, as amended, between the Company and Bank United, in an
amount not to exceed $30,000,000.
"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 the Lender as to the value of such
improved real property if sold within a 30-day marketing period. Each such
broker price opinion shall 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.
2
"Bulk Financing" means Ordinary Warehousing Advances made against a
package of ▇▇▇▇▇▇ Mortgage Loans funded with one wire transfer by the
Lender, the aggregate amount of which is not less than $5,000,000.
"Business Day" means any day excluding Saturday or Sunday and
excluding any day on which national banking associations are closed for
business.
"Carqill Facility Agreement" has the meaning set forth in the
Convertible Debt Agreement.
"Cash Collateral Account" means a demand deposit account maintained at
the Funding Bank in the name of the Lender and designated for receipt of
the proceeds of the sale or other disposition of the Collateral and Term
Loan Advances.
"Closing Date" means March ____ 1999.
"Closing Schedule" means the schedule of conditions precedent to the
initial Advance and the initial Debenture Advance (as defined in the
Convertible Debt Agreement) agreed to between the Company and the Lender.
"Collateral" has the meaning set forth in Section 3.1 hereof.
"Collateral Documents" has the meaning set forth in Section 2.2(a)
hereof.
"Collateral Value" means (a) with respect to any Eligible Loan as of
the date of determination, the lesser of (i) the amount of any Advance made
against such Eligible Loan under Section 2.1(c) hereof or (ii) the Fair
Market Value of such Eligible Loan; (b) in the event Pledged Mortgages have
been exchanged for Agency Securities, the lesser of (i) the amount of any
Advances outstanding against the Eligible Loans backing such Agency
Securities or (ii) the Fair Market Value of such Pledged Securities; (c)
with respect to an REO Property, the amount of an Advance made against such
REO Property under Section 2.1(c) hereof; and (d) with respect to cash, the
amount of such cash.
3
Exhibit M Terms Applicable to Advances Against Eligible Loans
Exhibit N Bailee Pledge Agreement
Exhibit O Assumed Names
vii
THIS WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT, dated as of
March 17, 1999 between ACCREDITED HOME LENDERS, INC., a California corporation
(the "Company"), having its principal office at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation (the "Lender"), having its principal office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, the Company and the Lender desire to set forth herein the terms
and conditions upon which the Lender shall provide warehouse and term loan
financing to the Company;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINITIONS.
1.1 Defined Terms. Capitalized terms defined below or elsewhere in
this Agreement (including the Exhibits hereto) shall have the following
meanings:
"Acknowledgment Agreement" has the meaning set forth in Section 8.2(i)
hereof.
"Acquisition Price" means, with respect to any Mortgage Loan acquired
by the Company from an unrelated Person (other than by repurchase from an
Investor or a Mortgage Pool), the cash purchase price paid by the Company
to acquire such Mortgage Loan minus any portion thereof attributable to
amounts other than principal and interest payable with respect to such
Mortgage Loan.
"Advance" means a Warehousing Advance or a Term Loan Advance.
"Advance Request" means a Warehousing Advance Request or a Term Loan
Advance Request.
"Advanta" means Advanta Mortgage Corp. USA and its Affiliates.
"Advanta Securitization Transaction" means Advanta Mortgage Loan Trust
1995-2, Advanta Mortgage Loan Trust 1995-3, and Advanta Mortgage Loan Trust
1996-1.
1
Subordinated Debt not due within one year of such date and deferred taxes
arising from capitalized excess servicing fees and capitalized servicing
rights.
"Default" means the occurrence of any event or existence of any
condition which, but for the giving of Notice, the lapse of time, or both,
would constitute an Event of Default.
"Delinquency Report" has the meaning set forth in Section 6.2(d) of
this Agreement.
"Depository Benefit" shall mean the compensation received by the
Lender, directly or indirectly, as a result of the Company's maintenance of
Eligible Balances with a Designated Bank.
"Designated Bank" means any bank(s) designated from time to time by
the Lender as a Designated Bank, but only for as long as the Lender has an
agreement under which the Lender can receive a Depository Benefit.
"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 a Designated Bank, including Federal
Deposit Insurance Corporation insurance premiums, service charges and such
other charges as may be imposed by governmental authorities from time to
time.
"Early Amortization" means the commencement of early amortization of
the outstanding principal balance of the Debenture pursuant to Section 2.6
of the Convertible Debt Agreement.
"Eligible Balances" means all funds of or maintained by the Company in
accounts at a Designated Bank, less balances to support float, reserve
requirements, and such other reductions as may be imposed by governmental
authorities from time to time.
"Eligible Loan" means a Single Family Mortgage Loan secured by a
Mortgage on real property located in one of the states of the United States
or the District of Columbia that
5
is designated as such on Exhibit M attached hereto and made a part hereof.
"Eligible Mortgage Pool" means a Mortgage Pool for which (a) an
Approved Custodian has issued its initial certification (on the basis of
which an Agency Security is to be issued), (b) there exists a Purchase
Commitment covering such Agency Security, and (c) such Agency Security will
be delivered to the Lender.
"Eligible Securitization Transaction" means a Securitization
Transaction in which (a) the Company enters into an agreement whereby an
Affiliate of the Lender shall sponsor, through one of its trusts or
subsidiaries, such Securitization Transaction and an Affiliate of the
Lender shall function as lead manager in the distribution of the resulting
securities; or (b) an Affiliate of the Lender functions, on terms and
conditions acceptable to such Affiliate and the Company, as lead manager in
the distribution of the securities resulting from such Securitization
Transaction or such Affiliate functions as lead manager with ▇▇▇▇▇▇
Brothers as co-lead manager, on terms and conditions acceptable to such
Affiliate, the Company and ▇▇▇▇▇▇ Brothers, in the distribution of the
securities resulting from such Securitization Transaction; provided,
however, that ▇▇▇▇▇▇ Brothers' role as co-lead manager shall be contingent
upon the ▇▇▇▇▇▇ Facility remaining available to the Company at the time of
such Securitization Transaction; and, provided further, that in either case
the structure of the Securitization Transaction, the Mortgage Pool backing
such Securitization Transaction, and the resulting Interest-only
Certificate is acceptable to the Lender, in its sole discretion.
"Eligible Subject Loan" has the meaning set forth in the Loan Sale
Commitment.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
all rules and regulations promulgated thereunder, as amended from time to
time and any successor statute.
"Event of Default" means any of the conditions or events set forth in
Section 8.1 hereof.
6
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Fair Market Value" means at any time for an Eligible Loan or the
related Agency Security (if such Eligible Loan is to be used to back an
Agency Security), (a) if such Eligible Loan or the related Agency Security
is covered by a Purchase Commitment, the Committed Purchase Price, or (b)
otherwise, the market price for such Eligible Loan or Agency Security,
determined by the Lender based on market data for similar Mortgage Loans or
Agency Securities (including, with respect to Mortgage Loans, any price
recently obtained by the Company for a similar Mortgage Loan in an
arms-length, whole loan sale transaction) and such other criteria as the
Lender deems appropriate.
"▇▇▇▇▇▇ Mae" means ▇▇▇▇▇▇ ▇▇▇, a corporation created under the laws of
the United States, and any successor thereto.
"FHA" means the Federal Housing Administration and any successor
thereto.
"FICA" means the Federal Insurance Contributions Act.
"FIRREA" means the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"First Mortgage" means a Mortgage which constitutes a first Lien on
the property covered thereby.
"First Mortgage Loan" means a Mortgage Loan secured by a First
Mortgage.
"▇▇▇▇▇▇▇ Mac" means ▇▇▇▇▇▇▇ Mac, a corporation created under the laws
of the United States, and any successor thereto.
"Funding Bank" means The First National Bank of Chicago or any other
bank designated from time to time by the Lender.
7
"Funding Bank Agreement" means the letter agreement substantially in
the form of Exhibit K hereto.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession, which are applicable to the circumstances as
of the date of determination.
"Gestation Agreement" means an agreement under which the Company
agrees to sell or finance (a) a Pledged Mortgage prior to the date of
purchase by an Investor, or (b) a Mortgage Pool prior to the date an Agency
Security backed by such Mortgage Pool is issued.
"▇▇▇▇▇▇ Mae" means the Government National Mortgage Association, an
agency of the United States government, and any successor thereto.
"Hedging Arrangements" means, with respect to any Person, any
agreements or other arrangement (including, without limitation, interest
rate swap agreements, interest rate cap agreements and forward sale
agreements) entered into by such Person to protect itself against changes
in interest rates or the market value of assets.
"HUD" means the Department of Housing and Urban Development and any
successor thereto.
"Indemnified Liabilities" has the meaning set forth in Article 10
hereof.
"Interest-Only Certificate" means a subordinated interest-only
certificate or similar interest issued to the Company in connection with an
Eligible Securitization Transaction.
"Internal Revenue Code" means the Internal Revenue Code of 1986, or
any subsequent federal income tax law or laws,
8
as any of the foregoing have been or may from time to time be amended.
"Investor" means ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or a financially responsible
private institution which is deemed acceptable by the Lender from time to
time in its sole discretion with respect to a particular category of
Pledged Mortgages.
"▇▇▇▇▇▇ Brothers" means ▇▇▇▇▇▇ Brothers Inc., a Delaware corporation.
"▇▇▇▇▇▇ Facility" means the facility provided for in the Master
Repurchase Agreement Governing Purchases and Sales of Mortgage Loans dated
as of October 1, 1997, as amended, between the Company and ▇▇▇▇▇▇
Commercial Paper Inc.
"▇▇▇▇▇▇ Mortgage Loan" means an Eligible Subject Loan originated by
the Company and initially funded under the ▇▇▇▇▇▇ Facility.
"Lender" has the meaning set forth in the first paragraph of this
Agreement.
"LIBOR" means, for each calendar week, the rate of interest per annum
which is equal to the arithmetic mean of the U.S. Dollar London Interbank
Offered Rates for one (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 Bridge Information Services on
its MoneyCenter system. LIBOR shall be rounded, if necessary, to the next
higher one sixteenth of one percent (l/16%). If such U.S. dollar LIBOR
rates are not so offered or published for any period, then during such
period LIBOR shall mean the London Interbank Offered Rate for one (1) month
periods published on the first Business Day of each week on which the
London Interbank market is open, in the Wall Street Journal in its regular
column entitled "Money Rates."
"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
9
agreement, any lease in the nature thereof, and any agreement to give any
security interest).
"Liquid Assets" means, with respect to any Person at any date, the
following unrestricted and unencumbered assets owned by such Person on such
date: cash, funds on deposit in any bank located in the United States,
investment grade commercial paper, money market funds, and other marketable
securities acceptable to the Lender.
"Loan Documents" means this Agreement, the Notes, any agreement of the
Company relating to Subordinated Debt, and each other document, instrument
or agreement executed by the Company in connection herewith or therewith,
as any of the same may be amended, restated, renewed or replaced from time
to time.
"Loan Production Report" has the meaning set forth in Section 6.2(l)
of this Agreement.
"Loan Sale Commitment" means the agreement of the Company to sell
Eligible Subject Loans to the Lender set forth in the letter of even date
herewith from the Lender to the Company and acknowledged by the Company, as
the same may be amended, supplemented, restated or otherwise modified and
in effect from time to time.
"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 and
which has been built in compliance with the National Manufactured Housing
Construction and Safety Standards established by HUD.
"Margin Stock" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from
time to time.
"Miscellaneous Charges" has the meaning set forth in Section 2.12
hereof.
"Mortgage" means a mortgage or deed of trust on improved and
substantially completed real property (including, without limitation, real
property to which a
10
Manufactured Home has been affixed in a manner such that the Lien of a
mortgage or deed of trust would attach to such manufactured home under
applicable real property law).
"Mortgage Loan" means any loan evidenced by a Mortgage Note and
secured by a Mortgage.
"Mortgage Note" means a promissory note secured by a Mortgage.
"Mortgage Note Amount" means, as of the date of determination, the
then outstanding unpaid principal amount of a Mortgage Note or other note
evidencing an Eligible Loan (whether or not an additional amount is
available to be drawn thereunder).
"Mortgage Pool" means a pool of one or more Pledged Mortgages and/or
other Mortgage Loans originated or acquired (at a time when such Mortgage
Loan was not a Nonperforming Mortgage Loan) by the Company, on the basis of
which there has been or is to be issued a Mortgage-backed Security.
"Mortgage-backed Securities" means securities that are secured or
otherwise backed by Mortgage Loans.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA which is maintained for employees of the
Company or a Subsidiary of the Company.
"Nonperforming Advance" means an Advance made against a Nonperforming
Mortgage Loan.
"Nonperforming Mortgage Loan" means a Mortgage Loan that is 60 days or
more delinquent, determined pursuant to the Mortgage Bankers' Association
of America method for determining delinquency status as in effect on the
date hereof.
"Non-Usage Fee" has the meaning set forth in Section 2.10 hereof.
"Notes" has the meaning set forth in Section 2.5 hereof.
11
"Notices" has the meaning set forth in Article 9 hereof.
"Obligations" means any and all indebtedness, obligations and
liabilities of the Company to the Lender (whether now existing or hereafter
arising, voluntary or involuntary, whether or not jointly owed with others,
direct or indirect, absolute or contingent, liquidated or unliquidated, and
whether or not from time to time decreased or extinguished and later
increased, created or incurred), whether or not arising out of or related
to the Loan Documents.
"Officer's Certificate" means a certificate executed on behalf of the
Company by its chief executive officer, president, executive vice
president, chief financial officer or treasurer, or by such other officer
as may be designated herein, and substantially in the form of Exhibit I-SF
attached hereto.
"Operating Account" means a demand deposit account maintained at the
Funding Bank in the name of the Company and designated for funding that
portion of each Eligible Loan not funded by an Advance made against such
Eligible Loan and for returning any excess payment from an Investor for a
Pledged Mortgage or Pledged Security.
"Ordinary Warehousing Advance" means a Warehousing Advance that is not
a Nonperforming Advance, an REO Advance or a Premium Advance.
"Ordinary Warehousing Sublimit" has the meaning set forth in Section
2.1(b)(7) hereof.
"Participant" has the meaning set forth in Section 12.5 hereof.
"Person" means and includes natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, joint
stock companies, joint ventures, associations, companies, trusts, banks,
trust companies, land trusts, business trusts or other organizations,
whether or not legal entities, and governments and agencies and political
subdivisions thereof.
12
"Plans" has the meaning set forth in Section 5.12 hereof.
"Pledged Interest-Only Certificate" has the meaning set forth in
Section 3.1(g) hereof.
"Pledged Mortgages" has the meaning set forth in Section 3.1(a)
hereof.
"Pledged Securities" has the meaning set forth in Section 3.1(b)
hereof.
"Premium Advance" means an Advance against an Eligible Subject Loan in
the amount described in Section 2.1(c)(4) hereof.
"Premium Advance Rate" means a floating rate of interest equal to
3.00% per annum over LIBOR. The Premium Advance Rate shall be adjusted on
and as of the effective date of each weekly change in LIBOR. The Lender's
determination of the Premium Advance Rate as of any date of determination
shall be conclusive and binding, absent manifest error.
"Purchase Commitment" means a written commitment, in form and
substance satisfactory to the Lender, issued in favor of the Company by an
Investor pursuant to which that Investor commits to purchase Mortgage Loans
or Mortgage-backed Securities.
"Receivables" has the meaning set forth in Section 3.1(i) hereof.
"Release Amount" has the meaning set forth in Section 3.2(g) hereof.
"REO Advance" means an Advance made against an REO Property against
which an REO Mortgage has been filed. The Lender shall have the right to
pre-approve each REO Advance in its sole and absolute discretion.
"REO Mortgage" means a First Mortgage covering an REO Property which
has been executed and delivered by the Company, as trustor or mortgagor,
for the benefit of the
13
Lender, in appropriate recordable form in the relevant jurisdiction
acceptable to the Lender.
"REO Property" means improved real property containing a one to four
family residence, which property is owned by the Company 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 the Company to the investor.
"RFConnects Delivery" means the Lender's proprietary service to
support the electronic exchange of information between the Lender and the
Company, including, but not limited to, Warehousing Advance Requests,
activity reports and exception reports.
"Residual Income Value" means, with respect to the Aggregate Payment
Obligation or any Pledged Interest-Only Certificate, the present value of
the expected payments under the Aggregate Payment Obligation or such
Pledged Interest-Only Certificate, based on assumptions concerning discount
rates, default frequency, severity of loss, prepayment speeds and other
relevant factors determined by the Lender in its sole discretion in a
manner consistent with the Lender's then current procedures for valuing
similar interests and the historical performance of the Mortgage Loans
underlying the Aggregate Payment Obligation or such Pledged Interest-Only
Certificate.
"RFC Guide" means the GMAC/RFC Consumer Finance Acquisition Guide, as
now in effect and as the same may be amended, supplemented, restated or
otherwise modified by the Lender from time to time.
"Second Mortgage" means a Mortgage which constitutes a second Lien on
the property covered thereby.
"Second Mortgage Loan" means a Mortgage Loan secured by a Second
Mortgage.
"Securities Delinquency Report" has the meaning set forth in Section
6.2(e) of this Agreement.
14
"Securitization Transaction" means a transaction in which a
Mortgage-backed Security secured or otherwise backed by a Mortgage Pool is
issued.
"Servicing Contract" means, with respect to any Person, the
arrangement, whether or not in writing, pursuant to which such Person has
the right to service Mortgage Loans.
"Servicing Portfolio" means, as to any Person, the unpaid principal
balance of Mortgage Loans serviced by such Person under Servicing
Contracts.
"Servicing Portfolio Report" has the meaning set forth in Section
6.2(i) of this Agreement.
"Shared Execution Forward Commitment" has the meaning set forth in the
Loan Sale Commitment.
"Single Family Mortgage Loan" means a Mortgage Loan secured by a
Mortgage covering improved real property containing one to four family
residences.
"Statement Date" means the date of the most recent financial
statements of the Company (and, if applicable, its Subsidiaries, on a
consolidated basis) delivered to the Lender under the terms of this
Agreement.
"Sub-commitment" has the meaning set forth in any Shared Execution
Forward Commitment.
"Sublimit Promissory Note" means the promissory note evidencing the
Company's Obligations with respect to REO Advances and Premium Advances in
the form of Exhibit A-2 attached hereto.
"Sublimit Rate" means a floating rate of interest which is equal to
3.00% per annum over LIBOR. The Sublimit Rate will be adjusted as of the
effective date of each weekly change in LIBOR. The Lender's determination
of the Sublimit Rate as of any date of determination shall be conclusive
and binding, absent manifest error.
"Subordinated Debt" means (a) all indebtedness of the Company for
borrowed money which is effectively subordinated
15
in right of payment to all other present and future Obligations either (i)
pursuant to a Subordination of Debt Agreement in the form of Exhibit F
hereto or (ii) otherwise on terms acceptable to the Lender, and (b) solely
for purposes of Section 7.4 hereof, all indebtedness of the Company which
is required to be subordinated by Section 4.1(b) or Section 6.10 hereof.
"Subsidiary" means any corporation, association or other business
entity in which more than fifty percent (50%) of the total voting power or
shares of stock entitled to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more of the other Subsidiaries of that
Person or a combination thereof.
"Tangible Net Worth" means at any date, the excess of the total assets
of the Company and its consolidated Subsidiaries, on a consolidated basis,
over total liabilities of the Company and its consolidated Subsidiaries, on
a consolidated basis, on such date, each to be determined in accordance
with GAAP consistent with those applied in the preparation of the financial
statements referred to in clause (c) of the Closing Schedule, plus that
portion of Subordinated Debt not due within one year of such date; provided
that, for purposes of calculating Tangible Net Worth, there shall be
excluded from total assets advances or loans to shareholders, officers,
employees or Affiliates, investments in Affiliates, assets pledged to
secure any liabilities not included in the Debt of the Company, intangible
assets, those other assets which would be deemed by HUD to be
non-acceptable in calculating adjusted net worth in accordance with its
requirements in effect as of such date, as such requirements appear in the
"Audit Guide for Audit of Approved Non-Supervised Mortgagees," and other
assets deemed unacceptable by the Lender in its sole discretion.
"Term Loan Advance" means the disbursement by the Lender pursuant to
Section 2.3 of this Agreement.
"Term Loan Advance Request" has the meaning set forth in Section
2.4(a) hereof.
16
"Term Loan Collateral" means the Collateral described in Sections
3.1(d), 3.1(e), 3.1(f) and 3.1(g) hereof and all Collateral described in
Sections 3.1(h), 3.1(i) 3.1(j), 3.1(k), 3.1(l) and 3.1(m) hereof that
constitutes proceeds of or is otherwise related to such Collateral.
"Term Loan Collateral Value" means as of the date of determination the
sum of seventy-five percent (75%) of the Residual Income Value of the
Aggregate Payment Obligation and sixty-five percent (65%) of the Residual
Income Value of the Pledged Interest-Only Certificates; provided, that
there shall be excluded from such calculation any Term Loan Collateral in
which the Lender does not have a perfected, first priority security
interest, and any portion of the Aggregate Payment Obligation or any
Pledged Interest-Only Certificate with respect to which the Lender has not
determined the Residual Income Value.
"Term Loan Commitment" has the meaning set forth in Section 2.3(a)
hereof.
"Term Loan Commitment Amount" means $40,000,000.
"Term Loan Commitment Termination Date" means the earliest of (a) the
close of business on __________, 2002, as such date may be extended from
time to time as agreed to in writing by the Company and the Lender, (b) the
date 30 days after the date the Company makes an initial public offering of
any of its capital stock, (c) the date thirty (30) days after the
commencement of Early Amortization, and (d) the date the obligation of the
Lender to make further Term Loan Advances hereunder is terminated pursuant
to Section 8.2 below.
"Term Loan Maturity Date" means the earliest of: (a) the close of
business on the date twelve months after the Term Loan Commitment
Termination Date, as such date may be extended from time to time as agreed
to in writing by the Company and the Lender, and (b) the date the Term Loan
Advances become due and payable pursuant to Section 8.2 below.
17
"Term Loan Promissory Note" means the Term Loan Promissory Note
described in Section 2.5 of this Agreement.
"Transaction Documents" means the Loan Documents, the Convertible Debt
Agreement, the Debenture, the Loan Sale Commitment and any other agreement
referred to in, or entered into pursuant to, any of the foregoing.
"Trust Receipt" means a trust receipt in a form approved by and
pursuant to which the Lender may deliver any document relating to the
Collateral to the Company for correction or completion.
"Uncommitted Warehousinq Amount" means $75,000,000.
"Unused Portion" has the meaning set forth in Section 2.10 hereof.
"Used Portion" has the meaning set forth in Section 2.10 hereof.
"VA" means the U.S. Department of Veterans Affairs and any successor
thereto.
"Vicon Affiliates" means one or more limited liability companies
established by the Borrower and Vicon Financial Services, Inc. pursuant to
Section 2 of that certain Agreement dated as of October 16, 1998 by and
between Vicon Financial Services, Inc. and the Company, as the same may
from time to time be amended, supplemented, restated, renewed, or otherwise
modified or replaced, or, if terminated, than as in effect immediately
preceding such termination.
"Warehousinq Advance" means a disbursement by the Lender pursuant to
Section 2.1 of this Agreement.
"Warehousinq Advance Request" has the meaning set forth in Section
2.2(a) hereof.
"Warehousing Commitment" has the meaning set forth in Section 2.1(a)
hereof.
"Warehousinq Commitment Amount" means $87,500,000.
18
"Warehousinq Fee" has the meaning set forth in Section 2.11 hereof.
"Warehousinq Maturity Date" shall mean the earlier of: (a) the close
of business on ______________, 2002, as such date may be extended from time to
time in writing by the Lender, in its sole discretion, on which date the
Warehousing Commitment shall expire of its own term and without the necessity of
action by the Lender, (b) thirty (30) days after the commencement of Early
Amortization, and (c) the date the Warehousing Advances become due and payable
pursuant to Section 8.2 below.
"Warehousing Promissory Note" means the promissory note evidencing the
Company's Obligations with respect to Advances made against Eligible Loans and
Nonperforming Advances, in the form of Exhibit A-l attached hereto.
"Wet Settlement Advance" means an Advance pursuant to Section 2.2(b)
of this Agreement in respect of the closing or settlement of a Mortgage Loan,
from the time of such Advance until the time of subsequent delivery of the
Collateral Documents as provided in such Section and the Exhibit referenced
therein.
"Wire Disbursement Account" means a demand deposit account maintained
at the Funding Bank in the name of the Lender for the clearing of wire
transfers requested by the Company to fund Advances.
"Year 2000 Problem" means the risk that computer applications may not
be able to properly perform date-sensitive functions after December 31, 1999.
1.2 Other Definitional Provisions.
1.2(a) Accounting terms not otherwise defined herein shall have
the meanings given the terms under GAAP.
1.2(b) Defined terms may be used in the singular or the plural,
as the context requires.
19
1.2(c) All references to time of day shall mean the then
applicable time in Chicago, Illinois, unless expressly provided to the
contrary.
2. THE CREDIT.
2.1 The Warehousinq Commitment.
2.1(a) Subject to the terms and conditions of this Agreement and
provided no Default or Event of Default has occurred and is
continuing, the Lender agrees from time to time during the period from
the Closing Date to, but not including, the Warehousing Maturity Date,
to make Warehousing Advances to the Company, provided the total
aggregate principal amount outstanding at any one time of all such
Warehousing Advances shall not exceed the Warehousing Commitment
Amount plus such portion of the Uncommitted Warehousing Amount as the
Lender, in its sole and absolute discretion, elects to make available
to the Company. The obligation of the Lender to make Warehousing
Advances hereunder up to the Warehousing Commitment Amount is
hereinafter referred to as the "Warehousing Commitment." Within the
Warehousing Commitment, the Company may borrow, repay and reborrow.
All Warehousing Advances under this Agreement shall constitute a
single indebtedness, and all of the Collateral shall be security for
the Notes and for the performance of all the Obligations.
2.1(b) Ordinary Warehousing Advances shall be used by the
Company solely for the purpose of funding the acquisition or
origination of Eligible Loans and shall be made at the request of the
Company, in the manner hereinafter provided in Section 2.2 hereof,
against the pledge of such Eligible Loans as Collateral therefor.
Nonperforming Advances and REO Advances shall be used by the Company
solely for the purpose of financing a Nonperforming Mortgage Loan or a
REO Property; provided, however, Nonperforming Advances and REO
Advances may not be used to finance Nonperforming Mortgage Loans or
REO Properties previously financed, as either a Nonperforming Mortgage
Loan or an REO Property, under another warehouse facility, except for
20
Advances against Nonperforming Mortgage Loans and REO Properties financed
under the ▇▇▇▇▇▇ Facility and pledged hereunder on or before the ninetieth
(90th) day after the Closing Date in an aggregate amount not to exceed
$2,000,000. Premium Advances shall be used by the Company for the purpose
of funding the acquisition or origination of Eligible Subject Loans and for
general corporate purposes. The limitations on the use of Ordinary
Warehousing Advances set forth on Exhibit M attached hereto and made a part
hereof shall be applicable. In addition, the following limitations on the
use of Warehousing Advances shall be applicable:
(1) No Ordinary Warehousing Advance or Premium Advance shall
be made against any Mortgage Loan which was closed more than ninety
(90) days prior to the date of the requested Advance.
(2) No Warehousing Advance shall be made against a Mortgage
Loan other than an Eligible Loan or a Nonperforming Mortgage Loan or
an REO Property.
(3) No Nonperforming Advance shall be made against a Mortgage
Loan that is not a First Mortgage Loan.
(4) No Nonperforming Advance shall be made against any
Mortgage Loan unless (i) such Mortgage Loan was originated, or
acquired within 90 days after origination, by the Company, or (ii)
such Mortgage Loan is secured by a First Mortgage on property which
also secures a Second Mortgage Loan originated, or acquired within 90
days after origination, by the Company, which is an Eligible Subject
Loan, and which is pledged to the Lender together with such First
Mortgage Loan.
(5) No Wet Settlement Advances shall be made against
Nonperforming Mortgage Loans or REO Properties.
21
(6) The aggregate amount of Wet Settlement Advances
outstanding at any one time shall not exceed 35% of the Ordinary
Warehousing Sublimit.
(7) No Ordinary Warehousing Advance shall be made if, after
giving effect thereto, the aggregate amount of Ordinary Warehousing
Advances outstanding would exceed $75,000,000 plus any portion of the
Uncommitted Warehousing Amount as the Lender, in its sole and absolute
discretion, elects to make available to the Company (the "Ordinary
Warehousing Sublimit").
(8) The aggregate amount of Premium Advances outstanding at
any one time shall not exceed $4,500,000.
(9) The aggregate amount of Warehousing Advances against
▇▇▇▇▇▇ Mortgage Loans outstanding at any one time shall not exceed
$50,000,000.
(10) The aggregate amount of REO Advances outstanding at any
one time shall not exceed $6,000,000.
(11) The aggregate amount of REO Advances and Nonperforming
Advances outstanding at any one time shall not exceed $8,000,000.
(12) No Premium Advance may be made against any Mortgage Loan
that is not an Eligible Subject Loan pledged hereunder.
2.1(c) No Warehousing Advance shall exceed the following amount
applicable to the type of Eligible loan at the time it is pledged to secure
an Advance hereunder:
(1) For an Ordinary Warehousing Advance against an Eligible
Loan pledged hereunder, the amount set forth on Exhibit M attached
hereto and made a part hereof.
22
(2) For an REO Advance, an amount equal to the lesser of (i)
65% of the BP0 Value of the REO Property with respect to which such REO
Advance is to be made or (ii) 80% of the outstanding principal amount
of the Mortgage Loan that encumbered the REO Property prior to the
foreclosure sale or acceptance by the Company of a deed in lieu of
foreclosure.
(3) For a Nonperforming Advance, an amount equal to the lesser
of (i) 65% of the BP0 Value of the property securing the related
Nonperforming Mortgage Loan or (ii) 80% of the Mortgage Note Amount of
the related Nonperforming Mortgage Loan.
(4) For the aggregate amount of Premium Advances at any time
outstanding, an amount equal to the lesser of (i) 3% of the aggregate
Mortgage Note Amount of all Eligible Subject Loans pledged hereunder,
or (ii) except in the case of Premium Advances made prior to the
initial sale of Eligible Subject Loans by the Company to the Lender
pursuant to a Shared Execution Forward Commitment, 60% of the Residual
Income Value of the amount by which the Aggregate Payment Obligation
would increase upon a current sale of such Eligible Subject Loans
pursuant to a Shared Execution Forward Commitment; such amount shall be
calculated based on the lesser of the following (expressed as a
percentage of the outstanding principal balance of the underlying
Mortgage Loan): (A) the most recent determination of Residual Income
Value of the increase in the Aggregate Payment Obligation resulting
from a sale of such Eligible Subject Loans pursuant to a Shared
Execution Forward Commitment, and (B) the most recent determination of
the Residual Income Value of the entire Aggregate Payment Obligation.
2.1(d) The Lender may, at any time in its sole and absolute
discretion, increase or decrease the portion of the Uncommitted Warehousing
Amount available to the Company by Notice to the Company. If the Lender, in its
sole and absolute discretion exercised
23
at any time, elects to reduce the amount of the Uncommitted
Warehousing Amount available to the Company, such reduction shall take
effect immediately (or at the effective time specified in the Lender's
Notice), and the Company shall not be permitted to borrow further
Ordinary Warehousing Advances unless the limitations set forth in
Section 2.1(b) (7) hereof would be satisfied (after giving effect to
such reduction).
2.2 Procedures for Obtaining Ordinary Warehousing Advances.
2.2(a) The Company may obtain a Warehousing Advance hereunder,
subject to the satisfaction of the conditions set forth in Sections
4.1 and 4.2 hereof, upon compliance with the procedures set forth in
this Section 2.2 and in Exhibit D-SF with respect to Ordinary
Warehousing Advances and Exhibit D-NP/REO with respect to
Nonperforming Advances and REO Advances, attached hereto and made a
part hereof, including the delivery of all documents listed in Exhibit
D-SF or Exhibit D-NP/REO, as applicable (the "Collateral Documents")
to the Lender. Requests for Advances shall be initiated by the Company
by delivering to the Lender, no later than (i) in the case of requests
for Premium Advances or Nonperforming Advances, 2 Business Days prior
to the Business Day on which the Company desires to borrow hereunder,
(ii) in the case of requests for REO Advances, 5 Business Days prior
to the Business Day on which the Company desires to borrow hereunder,
and (iii) in all other cases, the time provided by the Lender to the
Company by Notice on the same Business Day on which the Company
desires to borrow hereunder, a completed and signed request for an
Advance (a "Warehousing Advance Request") on the then current form
approved by the Lender. The current forms in use by the Lender are
Exhibit C-PRE with respect to Premium Advances, Exhibit C-REO with
respect to REO Advances, and Exhibit C-SF with respect to other
Warehousing Advances attached hereto and made a part hereof (except,
with respect to Ordinary Warehousing Advances, in the case of
Warehousing Advance Requests submitted by RFConnects). The Lender
shall have the right, on not less than three (3) Business Days' prior
24
Notice to the Company, to modify any of said Exhibits to conform to
current legal requirements or Lender practices, and, as so modified,
said Exhibits shall be deemed a part hereof.
2.2(b) In the case of a Wet Settlement Advance, the Company shall
follow the procedures and, at or prior to the Lender's making of such
Wet Settlement Advance, shall deliver to the Lender the documents set
forth in Exhibit D-SF hereto and, in the case of a Wet Settlement
Advance requested using RFConnects, a bailee pledge agreement in the
form of Exhibit N attached hereto and made a part hereof (by facsimile
transmission). In the case of an Eligible Loan financed through a Wet
Settlement Advance, the Company shall cause all Collateral Documents
required to be delivered to the Lender pursuant to Exhibit D-SF within
seven (7) Business Days after the date of the Wet Settlement Advance
relating thereto.
2.2(c) Before funding, the Lender shall have a reasonable time to
examine such Advance Request and the Collateral Documents to be
delivered prior to such requested Advance, as set forth in the
applicable Exhibit hereto, and may reject such of the Collateral
Documents as do not meet the requirements of this Agreement or of the
related Purchase Commitment.
2.2(d) The Company shall hold in trust for the Lender, and the
Company shall deliver to the Lender promptly upon request, or if the
recorded Collateral Documents have not yet been returned from the
recording office, immediately upon receipt by the Company of such
recorded Collateral Documents, unless the Pledged Mortgage is being
held by an Investor for purchase or has been redeemed from pledge, the
following: (1) the originals of the Collateral Documents for which
copies are required to be delivered to the Lender pursuant to Exhibit
D-SF or Exhibit D-NP/REO, (2) the original lender's ALTA Policy of
Title Insurance or an equivalent thereto, and (3) any other documents
relating to a Pledged Mortgage which the Lender may request,
including, without limitation, documentation evidencing the FHA
Commitment to Insure or the VA
25
Guaranty of any Pledged Mortgage which is either FHA insured or VA
guaranteed, the appraisal, Private Mortgage Insurance Certificate, if
applicable, the Regulation Z Statement, certificates of casualty or
hazard insurance, credit information on the maker of each such
Mortgage Note, a copy of a HUD-l or corresponding purchase advice and
other documents of all kinds which are customarily desired for
inspection or transfer incidental to the purchase of any Mortgage Note
by an Investor and any additional documents which are customarily
executed by the seller of a Mortgage Note to an Investor.
2.2(e) To make an Advance, the Lender shall cause the Funding
Bank to credit the Wire Disbursement Account upon compliance by the
Company with the terms of the Loan Documents. To make an Ordinary
Warehousing Advance, or a Nonperforming Advance or REO Advance to be
used to repurchase a Mortgage Loan or REO Property from an Investor or
out of a Mortgage Pool, the Lender shall cause the Funding Bank to
credit the Wire Disbursement Account upon satisfaction of all
applicable conditions hereunder. The Lender shall cause the Funding
Bank to disburse such Advance, and other amounts on deposit in the
Wire Disbursement Account or the Operating Account, to fund the
related Pledged Mortgage or REO Property in accordance with the
instructions of the Company set forth in the Advance Request, and
credit the Operating Account with any remaining balance, upon
satisfaction of all applicable conditions hereunder. To make any other
Advance, the Lender shall apply such Advance to the extent necessary
to repay any Advance to be refunded or repaid with the proceeds of
such Advance, and credit the Operating Account with any remaining
balance, upon satisfaction of all applicable conditions hereunder.
2.2(f) If, pursuant to the authorization given by the Company in
the Funding Bank Agreement, for the purpose of funding a Mortgage Loan
against which the Lender has made an Advance in accordance with an
Advance Request the Lender debits the Company's Operating Account at
the Funding Bank to the extent necessary to cover a wire to be
initiated by the
26
Lender, and such debit or direction results in an overdraft, the
Lender may make an additional Advance to fund such overdraft.
2.3 The Term Loan Commitment.
2.3(a) Subject to the terms and conditions of this Agreement and
provided no Default or Event of Default has occurred and is
continuing, the Lender agrees from time to time during the period from
the Closing Date to, but not including, the Term Loan Commitment
Termination Date, to make Term Loan Advances to the Company, provided
the total aggregate principal amount outstanding at any one time of
all such Term Loan Advances shall not exceed the Term Loan Commitment
Amount. The obligation of the Lender to make Term Loan Advances
hereunder up to the Term Loan Commitment Amount is hereinafter
referred to as the "Term Loan Commitment." All Term Loan Advances
under this Agreement shall constitute a single indebtedness, and all
of the Collateral shall be security for the Term Loan Promissory Note
and for the performance of all the Obligations.
2.3(b) The Term Loan Advances shall be used by the Company for
the purposes of first, repaying Premium Advances to the extent
required pursuant to Section 2.7(h) (3) on the date such Term Loan
Advance is made, and thereafter, expanding the Company's wholesale
origination network, expanding the Company's direct retail Mortgage
Loan origination operation, and providing working capital to finance
the retention by the Company of the Aggregate Payment Obligation and
Pledged Interest-Only Certificates, and shall be made at the request
of the Company in the manner hereinafter provided in Section 2.4
hereof. The following limitations on the Term Loan Advances shall be
applicable:
(1) No Term Loan Advance shall be made if, after giving
effect thereto, the aggregate outstanding principal balance of
all Term Loan Advances would exceed the lesser of (i) the Term
27
Loan Commitment Amount or (ii) the Term Loan Collateral Value.
(2) Each Term Loan Advance shall be in an amount not less
than $100,000.
(3) Each Term Loan Advance made after the Closing Date shall
be made on either (i) the first Business Day of a month or (ii)
the closing date of an Eligible Securitization Transaction
against the pledge of an Interest-Only Certificate issued in such
Securitization Transaction.
2.3(c) The Lender shall calculate the Residual Income Value of
the Aggregate Payment Obligation no less frequently than once in each
calendar month, and shall calculate the Residual Income Value of each
Pledged Interest-Only Certificate at the time it is pledged hereunder;
provided, that the Lender shall have no obligation to make any such
calculation if, in the Lender's reasonable determination, it is unable
for any reason at such time to value similar interests using the
methodology described in the definition of Residual Income Value.
Nothing in this Section 2.3(c) shall restrict the right of the Lender
to calculate or recalculate the Residual Income Value of the Aggregate
Payment Obligation or any Pledged Interest-Only Certificate at any
time.
2.4 Procedures for Obtainins Term Loan Advances.
2.4(a) The Company may obtain Term Loan Advances, subject to the
satisfaction of the conditions set forth in Sections 2.3, 4.1 and 4.2
hereof, upon compliance with the procedures set forth in this Section
2.4. A request for a Term Loan Advance shall be initiated by the
Company by delivering to the Lender, no later than one (1) Business
Day prior to any Business Day that the Company desires to borrow under
the Term Loan Commitment, a completed and signed request for such Term
Loan Advance (a "Term Loan Advance Request") on the then current form
approved by the Lender. The current form in use by the Lender is
Exhibit C-TL, attached hereto and made a part hereof.
28
The Lender shall have the right, on not less than three (3) Business
Days' prior Notice to the Company, to modify said Exhibit to conform to
current legal requirements or Lender practices, and, as so modified,
said Exhibits shall be deemed a part hereof.
2.4(b) To make a Term Loan Advance, the Lender shall cause the
Funding Bank to credit the amount thereof to the Cash Collateral
Account, and shall disburse such amount (i) to the Lender, to the
extent of any payments due to the Lender as of the date of such Term
Loan Advance that have not otherwise been paid, and (ii) to the
Operating Account, to the extent of any remaining portion thereof.
2.5 Notes. The Company's Obligations in respect of Ordinary Warehousing
Advances and Nonperforming Advances shall be evidenced by a Warehousing
Promissory Note of the Company substantially in the form of Exhibit A-l attached
hereto, the Company's Obligations in respect of REO Advances and Premium
Advances shall be evidenced by a Sublimit Promissory Note of the Company
substantially in the form of Exhibit A-2 attached hereto, and the Company's
Obligations in respect of Term Loan Advances shall be evidenced by a Term Loan
Promissory Note of the Company substantially in the form of Exhibit A-3 attached
hereto. Each note shall be dated as of the date hereof. The Warehousing
Promissory Note, the Sublimit Promissory Note and the Term Loan Promissory Note
are collectively referred to as the "Notes." The terms "Warehousing Promissory
Note," "Sublimit Promissory Note," "Term Loan Promissory Note," "Note" or
"Notes" shall include all extensions, renewals and modifications of the Notes
and all substitutions therefor. All terms and provisions of the Notes are hereby
incorporated herein.
2.6 Interest.
2.6(a) Except as otherwise provided in Section 2.6(h) hereof, the
unpaid amount of each Ordinary Warehousing Advance against an Eligible
Loan shall bear interest at the rate(s) per annum set forth on Exhibit
M attached hereto and made a part hereof.
29
2.6(b) Except as otherwise provided in Section 2.6(h) hereof, the unpaid
amount of each REO Advance or Nonperforming Advance shall bear interest, from
the date of such Advance until paid in full, at the Sublimit Rate.
2.6(c) Except as otherwise provided in Section 2.6(h) hereof, the unpaid
amount of each Premium Advance shall bear interest, from the date of such
Advance until paid in full, at the Premium Advance Rate.
2.6(d) Except as otherwise provided in Section 2.6(h), the unpaid amount of
each Term Loan Advance made against the Aggregate Payment Obligation shall bear
interest, from the date of such Advance until paid in full, at a floating rate
per annum equal to 3.50% over LIBOR, and the unpaid amount of each Term Loan
Advance made against Pledged Interest-Only Certificates shall bear interest,
from the date of such Advance until paid in full, at a floating rate per annum
equal to 4.00% over LIBOR.
2.6(e) The Company is entitled to receive a benefit in the form of an
"Earnings Credit" on the portion of the Eligible Balances maintained in time
deposit accounts with a Designated Bank, and the Company is entitled to receive
a benefit in the form of an "Earnings Allowance" on the portion of the Eligible
Balances maintained in demand deposit accounts with a Designated Bank. Any
Earnings Allowance shall be used first and any Earnings Credit shall be used
second as a credit against accrued Designated Bank Charges, any other
Miscellaneous Charges and fees, including, but not limited to Non-Usage Fees,
Warehousing Fees, and may be used, at the Lender's option, to reduce accrued
interest. Any Earnings Allowance not used during the month in which the benefit
was received shall be accumulated for use and must be used within six (6) months
of the month in which the benefit was received. Any Earnings Credit not used
during the month in which the benefit was received shall be used to provide a
cash benefit to the Company. The Lender's determination of the Earnings Credit
and the Earnings
30
Allowance for any month shall be determined by the Lender in its sole discretion
and shall be conclusive and binding absent manifest error. In no event shall the
benefit received by the Company exceed the Depository Benefit.
Either party hereto may terminate the benefits provided for in this Section
effective immediately upon Notice to the other party, if the terminating party
shall have determined (which determination shall be conclusive and binding
absent manifest error) at any time that any applicable law, rule, regulation,
order or decree or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by such party with any request or directive (whether or
not having the force of law) of any such authority, shall make it unlawful or
impossible for such party to continue to offer or receive the benefits provided
for in this Section.
2.6(f) Interest shall be computed on the basis of a 360-day year and
applied to the actual number of days elapsed in each interest calculation period
and shall be payable monthly in arrears, on the first day of each month,
commencing with the first month following the Closing Date and on the
Warehousing Maturity Date.
2.6(g) If, for any reason, no interest is due on an Ordinary Warehousing
Advance, the Company agrees to pay to the Lender an administrative fee equal to
one day of interest on such Ordinary Warehousing Advance at the rate of interest
applicable to such Ordinary Warehousing Advance, as in effect on the date of
such Ordinary Warehousing Advance. Administrative and other fees shall be due
and payable in the same manner as interest is due and payable hereunder.
2.6(h) Upon Notice to the Company, after the occurrence and during the
continuation of an Event of Default, the unpaid amount of each Warehousing
Advance or Term Loan Advance shall bear interest until paid in full at a per
annum rate of interest (the "Default
31
Rate") equal to four percent (4%) in excess of the rate of interest otherwise
applicable to such Advance pursuant to any other subsection of this Section 2.6
or, if no rate is applicable, the highest rate then applicable to any
outstanding Advances.
2.6(i) The floating rates of interest provided for in this Section 2.6 will
be adjusted as of the effective date of each change in the applicable index. The
Lender's determination of such rates as of any date of determination shall be
conclusive and binding, absent manifest error.
2.7 Principal Payments.
2.7(a) The outstanding principal amount of all Ordinary Warehousing
Advances shall be payable in full on the Warehousing Maturity Date.
2.7(b) Subject to the prepayment requirements set forth below in this
Section 2.7, (i) the outstanding principal amount of each Term Loan Advance
shall be payable in monthly installments equal to 1/36th of the original
principal amount of such Term Loan Advance, due on the first Business Day of
each month beginning in the first month after the date such Term Loan Advance
was made, (ii) the aggregate outstanding principal balance of the Term Loan
Advances as of the Term Loan Commitment Termination Date shall be payable in
monthly installments equal to 1/12th of such aggregate outstanding principal
balance, due on the first Business Day of each month beginning in the first
month after the Term Loan Commitment Termination Date, and (iii) the remaining
principal balance of the Term Loan Advances shall be payable on the Term Loan
Maturity Date.
2.7(c) The Company shall have the right to prepay the outstanding
Warehousing Advances in whole or in part, from time to time, without premium or
penalty. The Company shall have the right to prepay the outstanding Term Loan
Advance in whole or in part, from time to time, without premium or penalty. No
principal prepayment of the Term Loan Advance shall reduce any
32
monthly principal payment required under Section 2.7(b).
2.7(d) On the fifth Business Day after the Lender provides the
Company with a notice of the Term Loan Collateral Value as of the 26th day of
any month, the Company shall be obligated to pay to the Lender, without the
necessity of prior demand or notice from the Lender, and the Company authorizes
the Lender to cause the Funding Bank to charge the Company's Operating Account
for, any amount by which the outstanding principal balance of the Term Loan
Promissory Note exceeds the Term Loan Collateral Value, calculated by the Lender
as of such date. The Lender shall promptly notify the Company of any charge made
to the Company's Operating Account under this Section 2.7(d).
2.7(e) The Company shall pay the Lender, without the necessity of
prior demand or notice from the Lender, and the Company authorizes the Lender
to cause the Funding Bank to charge the Company's Operating Account for, the
amount of any outstanding Warehousing Advance (other than a Premium Advance)
against a specific Pledged Mortgage or REO Property, upon the earliest
occurrence of any of the following events:
(1) Two (2) Business Days elapse from the date a Warehousing
Advance was made and the Pledged Mortgage which was to have been
funded by such Warehousing Advance is not closed and funded.
(2) Ten (10) Business Days elapse from the date a Collateral
Document was delivered to the Company for correction or completion
under a Trust Receipt, if such Collateral Document has not been
returned to the Lender.
(3) On the date on which a Pledged Mortgage is determined to
have been originated based on untrue, incomplete or inaccurate
information, whether or not the Company had knowledge of such
misrepresentation or incorrect information or,
33
except in the case of Pledged Mortgage securing a Nonperforming
Advance, the Pledged Mortgage is 60 days or more delinquent,
determined pursuant to the Mortgage Bankers Association of
America method for determining delinquency status as in effect on
the date hereof.
(4) For a Mortgage Loan covered by a Purchase Commitment at
the time pledged hereunder, three (3) Business Days after the
mandatory delivery date of the related Purchase Commitment and
the specific Pledged Mortgage or the Pledged Security backed
thereby was not delivered under the Purchase Commitment prior to
such mandatory delivery date, or the Purchase Commitment is
terminated; unless in each case, such Pledged Mortgage or Pledged
Security is eligible for delivery to an Investor under a
comparable Purchase Commitment acceptable to the Lender.
(5) Upon sale or other disposition of the Pledged Mortgage
or REO Property or, if a Pledged Mortgage is included in an
Eligible Mortgage Pool, upon sale or other disposition of the
related Agency Securities.
(6) One (1) day prior to the foreclosure or trustee sale of
the real property and the improvements thereon securing a
Nonperforming Mortgage Loan, unless the Company requests and the
Lender agrees to reclassify the Advance as an REO Advance and the
Company delivers all of the Collateral Documents required
pursuant to Exhibit D-NP/REO.
(7) On the date on which the Company knows, or has reason
to know, or receives notice from the Lender, that one or more of
the representations and warranties set forth in Section 5.15
(with respect to a particular Pledged Mortgage) or Section 5.17
(with respect to a particular REO Property) were inaccurate or
incomplete in any material respect on any date when made or
deemed made.
34
(8) On the date on which the Company knows, or has reason
to know, or receives notice from the Lender, that it has failed
to comply with its agreements in Section 6.13 (with respect to
one or more Pledged Mortgages) or Section 6.14 (with respect to
one or more REO Properties).
2.7(f) Upon Notice to the Company by the Lender, the Company
shall pay to the Lender, and the Company authorizes the Lender to
cause the Funding Bank to charge the Company's Operating Account for,
the amount of any outstanding Warehousing Advance (other than a
Premium Advance) against a specific Pledged Mortgage or REO Property
upon the earliest occurrence of any of the following events:
(1) For any Pledged Mortgage, the number of days set forth
for the applicable type of Eligible Loan on Exhibit M attached
hereto and made a part hereof as the "Warehouse Period" elapse
from the date of the initial Advance made by the Lender against
such Pledged Mortgage.
(2) For any Pledged Mortgage secured by a Second Mortgage,
payment of any Lien prior to such Pledged Mortgage is 60 days or
more delinquent, determined pursuant to a Mortgage Bankers
Association of America method for determining delinquency status
as in effect on the date hereof.
(3) Forty-five (45) days elapse from the date the Mortgage
Note evidencing the Pledged Mortgage was initially delivered to
an Investor or an Approved Custodian for examination and purchase
or inclusion in a Mortgage Pool, without the Pledged Mortgage
being purchased or an Eligible Mortgage Pool including such
Pledged Mortgage being initially certified.
(4) Upon a second rejection of the Pledged Mortgage as
unsatisfactory by an Investor or an Approved Custodian after
shipment of the related Mortgage Note.
35
(5) Seven (7) Business Days elapse from the date a Wet
Settlement Advance was made without receipt by the Lender of all
Collateral Documents relating to such Pledged Mortgage, or such
Collateral Documents, upon examination by the Lender, are found
not to be in compliance with the requirements of this Agreement
or the related Purchase Commitment.
(6) With respect to any Pledged Mortgage, any of the items
described in Section 2.2(d), upon examination by the Lender, are
found not to be in compliance with the requirements of this
Agreement or the related Purchase Commitment.
(7) 335 days after the date of the Nonperforming Advance
made by the Lender against a Nonperforming Mortgage Loan, even if
the Pledged Mortgage has been converted to an REO Property.
(8) 270 days after the date of the REO Advance.
(9) 35 days after the date of any Ordinary Warehousing
Advance against a ▇▇▇▇▇▇ Mortgage Loan.
2.7(g) The outstanding amount of any Advance made pursuant to
Section 2.2(f) shall be payable in full within one (1) Business Day
after the date of such Warehousing Advance.
2.7(h) In addition to the payments required pursuant to
Sections 2.5(e) and 2.5(f), the Company shall be obligated to pay to
the Lender, without the necessity of prior demand or notice from the
Lender, and the Company authorizes the Lender to cause the Funding
Bank to charge the Company's Operating Account for, the following
amounts in respect of outstanding Advances in the following
circumstances:
(1) If the principal amount of any Pledged Mortgage is
prepaid in whole or in part while an Advance is outstanding
against such Pledged
36
Mortgage, the amount of such prepayment to be applied to such
Advance (provided, that if such prepayment has been received by
the Company's subservicer and such subservicer has agreed, in an
agreement satisfactory to the Lender, in its sole discretion, to
remit such prepayments to the Lender, such payment to the Lender
may be made upon the Lender's receipt of such prepayments from
the subservicer as long as such prepayments are received within 5
Business Days).
(2) On the fifteenth day of each month occurring more than
60 days after the date of a Nonperforming Advance or an REO
Advance, the Company shall prepay the outstanding principal
amount of such Advance by 5% of the original amount of such
Advance (provided, that if such Advance is an REO Advance, made
to refinance a Nonperforming Advance, such 60-day period shall be
calculated from the date of the Nonperforming Advance and such
curtailment amount shall be 5% of the original principal amount
of such Nonperforming Advance).
(3) In the case of any sale of Eligible Subject Loans
pursuant to a Shared Execution Forward Commitment, on the first
Business Day of the following month, and in the case of any other
sale of Eligible Subject Loans, on the date of such sale, the
Company shall reduce the outstanding principal balance of Premium
Advances to the amount set forth in Section 2.1(c)(4) (after
giving effect to such sale), and the Company authorizes the
Lender to apply all or any part of any Term Loan Advance made on
such date to such reduction.
2.7(i) The proceeds of the sale or other disposition of
Pledged Mortgages, Pledged Securities and REO Properties shall be paid
directly by the Investor to the Cash Collateral Account. The Company
shall give Notice to the Lender (telephonically, to be followed by
written notice) of the Pledged Mortgages, Pledged Securities or REO
Properties for which proceeds
37
have been received. Upon receipt of such Notice the Advances against
such Pledged Mortgages, Pledged Securities or REO Properties shall be
repaid from such proceeds and such Pledged Mortgages, Pledged
Securities or REO Properties shall be considered to have been redeemed
from pledge. The Lender is entitled to rely upon the Company's
affirmation that deposits in the Cash Collateral Account represent
payment from Investors for the purchase of Pledged Mortgages, Pledged
Securities or REO Properties as specified by the Company. In the event
that the payment from an Investor for the purchase of Pledged
Mortgages, Pledged Securities or REO Properties is less than the
outstanding Advances against such Pledged Mortgages or the Mortgage
Loans backing Pledged Securities or REO Properties, the Lender is
authorized to cause the Funding Bank to charge the Company's Operating
Account for an amount equal to such deficiency. Provided no Default or
Event of Default exists, the Lender shall return any excess payment
from an Investor for Pledged Mortgages, Pledged Securities or REO
Properties to the Company.
2.8 Expiration of Commitment. The Warehousing Commitment shall expire
on the Warehousing Maturity Date. The Term Loan Commitment shall expire on
the Term Loan Commitment Termination Date.
2.9 Method of Making Payments.
2.9(a) Except as otherwise specifically provided herein, all
payments hereunder shall be made to the Lender not later than the
close of business on the date when due unless such date is a
non-Business Day, in which case, such payment shall be due on the
first Business Day thereafter, and shall be made in lawful money of
the United States of America in immediately available funds
transferred via wire to accounts designated by the Lender from time to
time.
2.9(b) After the occurrence and during the continuance of an
Event of Default, and without the necessity of prior demand or notice
from the Lender, the Company authorizes the Lender to cause the
Funding
38
Bank to charge the Company's Operating Account for any Obligations due
and owing the Lender.
2.10 Non-Usage Fees. At the end of each calendar quarter, during the
term hereof commencing with the calendar quarter beginning on April 1,
1999, the Lender shall determine the average outstanding amount of Ordinary
Warehousing Advances by calculating the arithmetic daily average of such
Advances outstanding during such calendar quarter. The Lender shall then
subtract such quarterly average usage (the "Used Portion") from an amount
equal to 50% of the arithmetic daily average of the Ordinary Warehousing
Sublimit (and the result thereof shall be known as the "Unused Portion"),
and the Company shall pay in arrears, within thirty (30) days after the end
of each calendar quarter, a Non-Usage Fee (the "Non-Usage Fee") equal to
0.125% per annum on the total amount of the Unused Portion during such
calendar quarter. Within thirty (30) days of the end of the current
quarter, the Company shall pay the prorated portion of the quarterly
Non-Usage Fee due from the date of the first Advance hereunder to March 31,
1999. If the Warehousing Maturity Date is other than the last day of a
quarter, the Company shall pay the prorated portion of the quarterly
Non-Usage Fee due from the beginning of the then current quarter to and
including the Warehousing Maturity Date. For the purposes hereof, quarters
shall be defined as beginning April 1, July 1, October 1 and January 1. In
the absence of manifest error, the calculation by the Lender of the amount
of any Non-Usage Fee shall be conclusive. If the Warehousing Commitment
terminates at the request of the Company or as a result of an Event of
Default, the Non-Usage Fee shall be due and owing through the last day of
the current quarter.
2.11 Warehousing Fees. The Company agrees, at the time of each
Warehousing Advance, except Warehousing Advances made as part of a Bulk
Financing, to pay to the Lender a Warehousing Fee in the amount of $22.00
for each Mortgage Loan pledged as Collateral for such Advance. The Company
further agrees, at the time of each Bulk Financing, to pay to the Lender a
Warehousing Fee in the amount of $15.00 for each Mortgage Loan pledged as
Collateral for such Bulk Financing. Warehousing Fees are due when incurred,
but shall not be delinquent if paid within fifteen (15) days
39
after receipt of an invoice or an account analysis statement from the
Lender.
2.12 Miscellaneous Charges. The Company agrees to reimburse the Lender
for miscellaneous charges and expenses (collectively, "Miscellaneous
Charges") incurred by or on behalf of the Lender in connection with the
handling and administration of Advances, and to reimburse the Lender for
Miscellaneous Charges incurred by or on behalf of the Lender in connection
with the handling and administration of the Collateral. For the purposes
hereof, Miscellaneous Charges shall include, but not be limited to, costs
for UCC, tax lien and judgment searches conducted by the Lender, filing
fees, charges for additional wire transfers, check processing charges,
charges for security delivery fees, charges for overnight delivery of
Collateral to Investors, the Funding Bank's service charges and Designated
Bank Charges. Miscellaneous Charges are due when incurred, but shall not be
delinquent if paid within fifteen (15) days after receipt of an invoice or
an account analysis statement from the Lender.
2.13 Interest Limitation. All agreements between the Company and the
Lender are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of this Agreement
or the Notes or otherwise, shall the amount paid or agreed to be paid to
the Lender for the use, forbearance, loaning or retention of the Advances
secured by this Agreement exceed the maximum permissible under applicable
law. If from any circumstances whatsoever, fulfillment of any provisions
hereof or of the Notes, or any other document securing this Agreement at
any time given shall involve transcending the limit of validity prescribed
by law, then, the obligation to be fulfilled shall automatically be reduced
to the limit of such validity, and if from any circumstances the Lender
should ever receive as interest an amount which would exceed the highest
lawful rate of interest, such amount which would be in excess of interest
shall be applied to the reduction of the principal balance secured by the
Notes and not to the payment of interest thereunder. This provision shall
control every other provision of all agreements between the Company and
Lender and shall also be binding upon and available to any subsequent
holder of the Notes.
40
2.14 Increased Costs; Capital Requirements. In the event any
applicable law, order, regulation or directive issued by any governmental
or monetary authority, or any change therein or in the governmental or
judicial interpretation or application thereof, or compliance by the Lender
with any request or directive (whether or not having the force of law) by
any governmental or monetary authority:
2.14(a) Does or shall subject the Lender to any tax of any kind
whatsoever with respect to this Agreement or any Advances made
hereunder, or change the basis of taxation on payments to the Lender
of principal, fees, interest or any other amount payable hereunder
(except for change in the rate of tax on the overall gross or net
income of the Lender by the jurisdiction in which the Lender's
principal office is located);
2.14(b) Does or shall impose, modify or hold applicable any
reserve, capital requirement, special deposit, compulsory loan or
similar requirement against assets held by, or deposits or other
liabilities in or for the account of, advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office
of the Lender which are not otherwise included in the determination of
the interest rate as calculated hereunder;
and the result of any of the foregoing is to increase the cost to the
Lender of making, renewing or maintaining any Advance or to reduce any
amount receivable in respect thereof or to reduce the rate of return on the
capital of the Lender or any Person controlling the Lender as it relates to
credit facilities in the nature of that evidenced by this Agreement, then,
in any such case, the Company shall promptly pay any additional amounts
necessary to compensate the Lender for such additional cost or reduced
amounts receivable or reduced rate of return as determined by the Lender
with respect to this Agreement or Advances made hereunder; provided, that
the Company shall not be responsible pursuant to this Section 2.14 for any
fines or other penalties incurred by the Lender as a result of the Lender's
violation of any such law, order, regulation or direction. If the Lender
becomes entitled to claim any
41
additional amounts pursuant to this Section, it shall notify the Company of
the event by reason of which it has become so entitled and the Company
shall pay such amount within fifteen (15) days thereafter. A certificate as
to any additional amount payable pursuant to the foregoing sentence
containing the calculation thereof in reasonable detail submitted by the
Lender to the Company shall be conclusive in the absence of manifest error.
The obligations of the Company under this Section shall survive the payment
of all other Obligations and the termination of this Agreement.
3. COLLATERAL.
3.1 Grant of Security Interest. As security for the payment of the
Notes and for the performance of all of the Company's Obligations, the
Company hereby assigns and transfers to the Lender all right, title and
interest in and to and grants a security interest to the Lender in the
following described property (the "Collateral"):
3.1(a) All Mortgage Loans, including all Mortgage Notes and
Mortgages evidencing or securing such Mortgage Loans, which from time
to time are delivered or caused to be delivered to the Lender
(including delivery to a third party on behalf of the Lender), come
into the possession, custody or control of the Lender for the purpose
of assignment or pledge or in respect of which an Advance has been
made by the Lender hereunder, including without limitation all
Mortgage Loans in respect of which Wet Settlement Advances have been
made by the Lender (the "Pledged Mortgages").
3.1(b) All Mortgage-backed Securities which are from time to time
created in whole or in part on the basis of the Pledged Mortgages or
are delivered or caused to be delivered to, or are otherwise in the
possession of the Lender or its agent, bailee or custodian as
assignee, or pledged to the Lender, or for such purpose are registered
by book-entry in the name of the Lender (including delivery to or
registration in the name of a third party on behalf of the Lender)
hereunder or in respect of which from time to time an
42
Advance has been made by the Lender hereunder (the "Pledged
Securities").
3.1(c) All Servicing Contracts now or hereafter owned by the
Company with respect to Mortgage Loans (i) sold pursuant to Shared
Execution Forward Commitments or (ii) backing Mortgage-backed
Securities issued in Eligible Securitization Transactions in which a
Pledged Interest-Only Certificate was issued.
3.1(d) All rights of the Company to receive payments under or by
virtue of the Servicing Contracts described in Section 3.1(c) and the
Acknowledgment Agreements, whether as servicing fees, servicing
income, damages, amounts payable upon the cancellation or termination
of any such Servicing Contract, interest on the foregoing, or
otherwise.
3.1(e) Any agreement pursuant to which any Servicing Contract
described in Section 3.1(c) was acquired or is sold by the Company,
and all documents and instruments executed or delivered in connection
with any such acquisition or sale.
3.1(f) All private mortgage insurance and all commitments issued
by the FHA or VA to insure or guarantee any Mortgage Loans included in
the Pledged Mortgages; all Purchase Commitments held by the Company
covering the Pledged Mortgages or the Pledged Securities and all
proceeds resulting from the sale thereof to Investors pursuant
thereto; and all personal property, contract rights, servicing and
servicing fees and income or other proceeds, amounts and payments
payable to the Company as compensation or reimbursement, accounts and
general intangibles of whatsoever kind relating to the Pledged
Mortgages, the Pledged Securities, said FHA commitments or VA
commitments and the Purchase Commitments, and all other documents or
instruments relating to the Pledged Mortgages and the Pledged
Securities, including, without limitation, any interest of the Company
in any fire, casualty or hazard insurance policies and any awards made
by any public body or decreed by any court of competent jurisdiction
for a taking or for
43
degradation of value in any eminent domain proceeding as the same
relate to the Pledged Mortgages.
3.1(g) The Aggregate Payment Obligation, all Interest-Only
Certificates against which the Company requests, and the Lender makes,
a Term Loan Advance hereunder, or which the Company otherwise delivers
to the Lender as Collateral (each, a "Pledged Interest-Only
Certificate"), and all rights of the Company (including, without
limitation, rights to payment) arising under any Shared Execution
Forward Commitments, under any agreements, documents and instruments
relating to any Eligible Securitization Transaction in which a Pledged
Interest-Only Certificate was issued, or otherwise relating to the
Aggregate Payment Obligation, any Pledged Interest-Only Certificate or
Mortgage Loans sold by the Company to the Lender or any Affiliate of
the Lender.
3.1(h) All right, title and interest of the Company in and to any
Hedging Arrangements entered into to protect the Company against
changes in the value of Pledged Mortgages, Pledged Securities, the
Aggregate Payment Obligation, any Pledged Interest-Only Certificate or
any other Collateral, including, without limitation, all rights to
payment arising under such Hedging Arrangements.
3.1(i) All accounts or general intangibles owned by the Company
("Receivables") for the payment of money against (i) VA under a VA
guaranty of, FHA or a private mortgage insurer under an FHA or private
insurer's mortgage insurance policy insuring payment of, or any other
Person under any other agreement (including a Servicing Contract)
relating to, all or part of a defaulted Mortgage Loan repurchased by
the Company from an investor or out of a pool of Mortgage Loans
serviced by the Company and pledged hereunder, (ii) obligors and their
accounts, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇ or any other investor
under a Servicing Contract covering, or out of the proceeds of any sale
of or foreclosure sale in respect of, any Mortgage Loan (A) repurchased
by the Company out of a pool of Mortgage Loans serviced by the Company
and pledged
44
hereunder, or (B) being serviced by the Company pursuant to a Servicing
Contract pledged hereunder, in either case, for the reimbursement of
real estate taxes or assessments, or casualty or liability insurance
premiums, paid by the Company in connection with Mortgage Loans, and
(iii) obligors and their accounts, or ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇
Mae or any other investor under or in respect of any Mortgage Loans
serviced by the Company pursuant to a Servicing Contract pledged
hereunder, for repayment of advances made by the Company to cover
shortages in principal and interest payments.
3.1(j) All right, title and interest of the Company in and to all
escrow accounts, documents, instruments, files, surveys, certificates,
correspondence, appraisals, computer programs, tapes, discs, cards,
accounting records (including all information, records, tapes, data,
programs, discs and cards necessary or helpful in the administration or
servicing of the Collateral) and other information and data of the
Company relating to the Collateral.
3.1(k) All now existing or hereafter acquired cash delivered to
or otherwise in the possession of the Lender or its agent, bailee or
custodian or designated on the books and records of the Company as
assigned and pledged to the Lender.
3.1(l) All cash and non-cash proceeds of the Collateral,
including all dividends, distributions and other rights in connection
with, and all additions to, modifications of and replacements for, the
Collateral, and all products and proceeds of the Collateral, together
with whatever is receivable or received when the Collateral or proceeds
thereof are sold, collected, exchanged or otherwise disposed of,
whether such disposition is voluntary or involuntary, including,
without limitation, all rights to payment with respect to any cause of
action affecting or relating to the Collateral or proceeds thereof.
3.1(m) All real property, fixtures and personal property
described in any REO Mortgage, including all
45
rents, leases and profits now due or which may hereafter become due
under or by virtue of any lease, license, sublease, or agreement,
whether written or verbal, for the use or occupancy of the property or
any part thereof, and all proceeds of any fire loss or other insurable
casualty and all awards or compensation made by any governmental or
other lawful authorities for the taking or damaging by eminent domain
of the whole or any part of the property, including any awards for a
temporary taking, change of grade of streets or taking of access.
3.2 Release of Security Interest in Collateral.
3.2(a) Pledged Mortgages and REO Property shall be released from
the Lender's security interest only against payment to the Lender of
the Release Amount in connection with such Pledged Mortgages or REO
Property.
3.2(b) If Pledged Mortgages are to be transferred to a pool
custodian or to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae for inclusion in a Mortgage
Pool, the Lender's security interest in such Pledged Mortgages shall be
released only against payment to the Lender of the Release Amount in
connection with such Pledged Mortgages. If the Lender's security
interest in the Pledged Mortgages comprising the Mortgage Pool is not
released prior to the issuance of the Mortgage-backed Security, then
the Mortgage-backed Security, when issued, shall be a Pledged Security.
The Lender's security interest shall continue in such Pledged Mortgages
and the Pledged Security. The Lender shall be entitled to possession of
such Pledged Security in the manner provided below.
3.2(c) If Pledged Mortgages are transferred to an Approved
Custodian and included in an Eligible Mortgage Pool, the Lender's
security interest in the Pledged Mortgages comprising the Eligible
Mortgage Pool shall be released upon the issuance of the Agency
Security, which shall be a Pledged Security. The Lender's security
interest in such Pledged Security shall be released only against
payment to the Lender of the Release Amount in connection with the
Pledged
46
Mortgages backing such Pledged Security. The Lender shall be entitled
to possession of such Pledged Security in the manner provided below.
3.2(d) The Lender shall have the exclusive right to the possession
of the Pledged Securities or, if the Pledged Securities are issued in
book-entry form or issued in certificated form and delivered to a
clearing corporation (as such term is defined in the Uniform Commercial
Code of Minnesota) or its nominee, the Lender shall have the right to
have the Pledged Securities registered in the name of a securities
intermediary (as such term is defined in the Uniform Commercial Code of
Minnesota) in an account containing only customer securities and
credited to an account of the Lender. The Lender shall have the right
to cause delivery of the Pledged Securities to be made to the Investor
or the Pledged Securities credited to the account of the Investor or
the Investor's designee only against payment therefor. The Company
acknowledges that the Lender may enter into one or more standing
arrangements with other financial institutions with respect to Pledged
Securities issued in book entry form or issued in certificated form and
delivered to a clearing corporation, pursuant to which such Pledged
Securities are registered in the name of such financial institution, as
agent or securities intermediary for the Lender, and the Company agrees
upon request of the Lender to execute and deliver to such other
financial institutions the Company's written concurrence in any such
standing arrangements.
3.2(e) Prior to the occurrence of an Event of Default, the Company
may redeem a Pledged Mortgage, Pledged Security or REO Property from
the Lender's security interest by notifying the Lender of its intention
to redeem such Pledged Mortgage, Pledged Security or REO Property from
pledge and either (a) paying, or causing an Investor to pay, to the
Lender, for application to prepayment of the principal balance of the
Note, the Release Amount in connection with such Pledged Mortgage,
Pledged Security or REO Property, or (b) delivering substitute
Collateral which, in addition to being acceptable to the Lender in its
sole
47
discretion will, when included with the Collateral, result in a
Collateral Value of all Collateral held by the Lender which is at least
equal to the aggregate outstanding Warehousing Advances.
3.2(f) Following the occurrence of a Default or Event of Default,
the Lender may, with no liability to the Company or any Person,
continue to release its security interest in any Pledged Mortgage,
Pledged Security or REO Property against payment of the Release Amount
in connection with such Pledged Mortgage, Pledged Security or REO
Property.
3.2(g) The amount (the "Release Amount") to be paid by the Company
to obtain the release of the Lender's security interest in a Pledged
Mortgage or REO Property shall be (i) prior to the occurrence of an
Event of Default, the sum of (A) the principal amount of the
Warehousing Advances (other than Premium Advances) made against such
Pledged Mortgage or REO Property and (B) in the case of an Eligible
Subject Loan, the amount of any prepayment of Premium Advances that
will be required under Section 2.7(h) (3) hereof after giving effect to
such sale, and (ii) from and after the occurrence and during the
continuance of an Event of Default, the Committed Purchase Price of a
Pledged Mortgage or, if there is no Purchase Commitment for a Pledged
Mortgage and in the case of an REO Property the amount paid to the
Lender in a commercially reasonable disposition thereof.
3.3 Delivery of Additional Collateral or Mandatory Prepayment. At any
time that the aggregate Collateral Value of the Pledged Mortgages, Pledged
Securities and REO Property then pledged hereunder is less than the aggregate
amount of the Warehousing Advances then outstanding hereunder, the Lender may
request, and the Company shall within two (2) Business Days after Notice by the
Lender (a) deliver to the Lender for pledge hereunder additional Mortgage Loans,
and/or cash, with a Collateral Value sufficient to cover the difference between
the Collateral Value of the Pledged Mortgages, Pledged Securities and REO
Property pledged and the aggregate amount of Warehousing Advances outstanding
hereunder, and/or (b) repay the
48
Warehousing Advances in an amount sufficient to reduce the aggregate
balance thereof outstanding to or below the Collateral Value of the Pledged
Mortgages, Pledged Securities and REO Properties pledged hereunder.
3.4 Release of Collateral.
3.4(a) The Lender may deliver documents relating to the Collateral
to the Company for correction or completion pursuant to a Trust
Receipt.
3.4(b) Prior to the occurrence of a Default or Event of Default,
upon delivery by the Company to the Lender of shipping instructions
pursuant to Exhibit D-SF or Exhibit D-NP/REO, the Lender will transmit
Pledged Mortgages or Pledged Securities and all related loan documents
or pool documents to the applicable Investor, Approved Custodian or
other party.
3.4(c) Upon receipt of Notice from the Company under Section 2.7(i)
hereof, and repayment of the Release Amount with respect to a Pledged
Mortgage identified by the Company, any Collateral Documents relating
to the redeemed Pledged Mortgage or Mortgage Loan backing a Pledged
Security which have not been delivered to an Investor or Approved
Custodian shall be released by the Lender to the Company.
3.4(d) Upon payment of the Release Amount for an REO Property, the
Lender agrees to provide a satisfaction for the related REO Mortgage.
3.5 Collection and Servicing Rights. So long as no Event of Default
shall have occurred and be continuing, the Company shall be entitled to
service and receive and collect directly all sums payable to the Company in
respect of the Collateral other than proceeds of any Purchase Commitment or
proceeds of the sale of any Collateral. Following the occurrence of any
Event of Default, the Lender or its designee shall thereafter be entitled
to service and receive and collect all sums payable to the Company in
respect of the Collateral, and in such case (a) the Lender or its designee
in its discretion may, in its own name, in the name of the Company or
otherwise, demand, ▇▇▇ for, collect or
49
receive any money or property at any time payable or receivable on account
of or in exchange for any of the Collateral, but shall be under no
obligation to do so, (b) the Company shall, if the Lender so requests, hold
in trust for the benefit of the Lender and forthwith pay to the Lender at
its office designated by Notice hereunder, all amounts thereafter received
by the Company upon or in respect of any of the Collateral, advising the
Lender as to the source of such funds, and (c) all amounts so received and
collected by the Lender shall be held by it as part of the Collateral.
3.6 Return of Collateral at End of Commitment. If (a) both the
Warehousing Commitment and the Term Loan Commitment shall have expired or
been terminated, and (b) no Advances, interest or other Obligations shall
be outstanding and unpaid, the Lender shall deliver or release its security
interest and shall deliver all Collateral in its possession to the Company
at the Company's expense. The receipt of the Company for any Collateral
released or delivered to the Company pursuant to any provision of this
Agreement shall be a complete and full acquittance for the Collateral so
returned, and the Lender shall thereafter be discharged from any liability
or responsibility therefor.
4. CONDITIONS PRECEDENT.
4.1 Initial Advance. The obligation of the Lender to make the
initial Advance under this Agreement is subject to the satisfaction, in the
sole discretion of the Lender, on or before the date thereof of the
following conditions precedent:
4.1(a) The requirements set forth in the Closing Schedule shall
have been satisfied.
4.1(b) All directors, officers and shareholders of the Company,
and all Affiliates of the Company or of any Subsidiary of the
Company to whom or to any of whom the Company shall be indebted as
of the date of this Agreement, which indebtedness has a term of
more than one (1) year or is in excess of Twenty-Five Thousand
Dollars ($25,000) shall have subordinated such indebtedness to the
Obligations, by executing a
50
Subordination of Debt Agreement, in the form of Exhibit E hereto;
and the Lender shall have received an executed copy of any such
Subordination of Debt Agreement, certified by the corporate
secretary of the Company to be true and complete and in full force
and effect as of the date of the Advance.
4.2 Each Advance. The obligation of the Lender to make the initial
and each subsequent Advance under this Agreement is subject to the
satisfaction, in the sole discretion of the Lender, as of the date of
each such Advance, of the following additional conditions precedent:
4.2(a) The Company shall have delivered to the Lender the
Advance Request, Collateral Documents, and documents relating to
Wet Settlement Advances, called for under, and shall have satisfied
the procedures set forth in, Section 2.2 hereof and the applicable
Exhibits hereto described in that Section, according to the type of
the requested Advance. All items delivered to the Lender shall be
satisfactory to the Lender in form and content, and the Lender may
reject such of them as do not meet the requirements of this
Agreement or of the related Purchase Commitment, if any.
4.2(b) The Lender shall have received evidence satisfactory to
it as to the making and/or continuation of any book entry or the
due filing and recording in all appropriate offices of all
financing statements and other instruments as may be necessary to
perfect the security interest of the Lender in the Collateral under
the Uniform Commercial Code or other applicable law.
4.2(c) The representations and warranties of the Company
contained in Article 5 hereof shall be accurate and complete in all
material respects as if made on and as of the date of each Advance.
4.2(d) The Company shall have performed all agreements to be
performed by it hereunder, and after giving effect to the requested
Advance, there shall exist no Default or Event of Default
hereunder.
51
4.2(e) The Company shall not have incurred any material
liabilities, direct or contingent, other than in the ordinary
course of its business, since the Statement Date.
4.2(f) The Lender shall have received from counsel for the
Company, if requested by the Lender in its sole discretion, an
updated opinion, in form and substance satisfactory to the Lender,
addressed to the Lender and dated as of the date of such Advance,
covering such of the matters as the Lender may reasonably request.
Delivery of an Advance Request by the Company shall be deemed a
representation by the Company that all conditions set forth in this Section
4.2 shall have been satisfied as of the date of such Advance.
5. REPRESENTATIONS AND WARRANTIES.
The Company hereby represents and warrants to the Lender, as of the
date of this Agreement and as of the date of each Advance Request and the
making of each Advance, that:
5.1 Organization; Good Standing; Subsidiaries. The Company and each
Subsidiary of the Company is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation, has the full legal power and authority to own its property
and to carry on its business as currently conducted and is duly qualified
as a foreign corporation to do business and is in good standing in each
jurisdiction in which the transaction of its business makes such
qualification necessary, except in jurisdictions, if any, where a failure
to be in good standing has no material adverse effect on the business,
operations, assets or financial condition of the Company or any such
Subsidiary. For the purposes hereof, good standing shall include
qualification for any and all licenses and payment of any and all taxes
required in the jurisdiction of its incorporation and in each jurisdiction
in which the Company transacts business. The Company has no Subsidiaries
except as set forth on Exhibit G hereto. Exhibit G sets forth with respect
to each such Subsidiary, its name,
52
address, place of incorporation, each state in which it is qualified as
a foreign corporation, and the percentage ownership of its capital
stock by the Company.
5.2 Authorization and Enforceability. The Company has the power and
authority to execute, deliver and perform this Agreement, the Notes and
all other Loan Documents to which the Company is party and to make the
borrowings hereunder. The execution, delivery and performance by the
Company of this Agreement, the Notes and all other Loan Documents to
which the Company is party and the making of the borrowings hereunder
and thereunder, have been duly and validly authorized by all necessary
corporate action on the part of the Company (none of which actions has
been modified or rescinded, and all of which actions are in full force
and effect) and do not and will not conflict with or violate any
provision of law, of any judgments binding upon the Company, or of the
articles of incorporation or by-laws of the Company, conflict with or
result in a breach of or constitute a default or require any consent
under, or result in the creation of any Lien upon any property or
assets of the Company other than the Lien on the Collateral granted
hereunder, or result in or require the acceleration of any indebtedness
of the Company pursuant to any agreement, instrument or indenture to
which the Company is a party or by which the Company or its property
may be bound or affected. This Agreement, the Notes and all other Loan
Documents contemplated hereby or thereby constitute legal, valid, and
binding obligations of the Company, enforceable in accordance with
their respective terms, except as limited by bankruptcy, insolvency or
other such laws affecting the enforcement of creditors' rights and by
general principles of equity.
5.3 Approvals. The execution and delivery of this Agreement, the
Notes and all other Loan Documents and the performance of the Company's
obligations hereunder and thereunder and the validity and
enforceability hereof and thereof do not require any license, consent,
approval or other action of any state or federal agency or governmental
or regulatory authority other than those which have been obtained and
remain in full force and effect.
53
5.4 Financial Condition. The balance sheet of the Company (and, if
applicable, its Subsidiaries, on a consolidated basis) as of the
Statement Date, and the related statements of income and changes in
stockholders' equity for the fiscal period ended on the Statement Date,
heretofore furnished to the Lender, fairly present the financial
condition of the Company (and its Subsidiaries) as of the Statement Date
and the results of its operations for the fiscal period ended on the
Statement Date. The Company had, on the Statement Date, no known material
liabilities, direct or indirect, fixed or contingent, matured or
unmatured, or liabilities for taxes, long-term leases or unusual forward
or long-term commitments not disclosed by, or reserved against in, said
balance sheet and related statements, and at the present time there are
no material unrealized or anticipated losses from any loans, advances or
other commitments of the Company except as heretofore disclosed to the
Lender in writing. Said financial statements were prepared in accordance
with GAAP applied on a consistent basis throughout the periods involved.
Since the Statement Date, there has been no material adverse change in
the business, operations, assets or financial condition of the Company
(and its Subsidiaries), nor is the Company aware of any state of facts
which (with or without notice or lapse of time or both) would or could
result in any such material adverse change.
5.5 Litigation. There are no actions, claims, suits or proceedings
pending or, to the knowledge of the Company, threatened or reasonably
anticipated against or affecting the Company or any Subsidiary of the
Company in any court or before any arbitrator or before any government
commission, board, bureau or other administrative agency which, if
adversely determined, may reasonably be expected to result in any
material and adverse change in the business, operations, assets or
financial condition of the Company as a whole, or which would affect the
validity or enforceability of this Agreement, the Notes or any other Loan
Document.
5.6 Compliance with Laws. Neither the Company nor any Subsidiary
of the Company is in violation of any provision of any law, or of any
judgment, award, rule, regulation, order, decree, writ or injunction of
any court or public
54
regulatory body or authority which might have a material adverse effect
on the business, operations, assets or financial condition of the Company
as a whole or which would affect the validity or enforceability of this
Agreement, the Notes or any other Loan Document.
5.7 Regulation U. The Company is not engaged principally, or as
one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying Margin Stock, and no part of the
proceeds of any Advances made hereunder will be used to purchase or carry
any Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock.
5.8 Investment Company Act. The Company is not an "investment
company" or controlled by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
5.9 Payment of Taxes. The Company and each of its Subsidiaries
has filed or caused to be filed all federal, state and local income,
excise, property and other tax returns with respect to the operations of
the Company and its Subsidiaries which are required to be filed, all such
returns are true and correct, and the Company and each of its
Subsidiaries has paid or caused to be paid all taxes as shown on such
returns or on any assessment, to the extent that such taxes have become
due, including, but not limited to, all FICA payments and withholding
taxes, if appropriate. The amounts reserved, as a liability for income
and other taxes payable, in the financial statements described in Section
5.4 hereof are sufficient for payment of all unpaid federal, state and
local income, excise, property and other taxes, whether or not disputed,
of the Company and its Subsidiaries accrued for or applicable to the
period and on the dates of such financial statements and all years and
periods prior thereto and for which the Company and its Subsidiaries may
be liable in its own right or as transferee of the assets of, or as
successor to, any other Person. No tax Liens have been filed and no
material claims are being asserted with respect to any such taxes, fees
or charges.
5.10 Agreements. Neither the Company nor any Subsidiary of the
Company is a party to any agreement,
55
instrument or indenture or subject to any restriction materially and
adversely affecting its business, operations, assets or financial
condition, except as disclosed in the financial statements described in
Section 5.4 hereof. Neither the Company nor any Subsidiary of the Company
is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement,
instrument, or indenture which default could have a material adverse
effect on the business, operations, properties or financial condition of
the Company as a whole. No holder of any indebtedness of the Company or
of any of its Subsidiaries has given notice of any asserted default
thereunder, and no liquidation or dissolution of the Company or of any of
its Subsidiaries and no receivership, insolvency, bankruptcy,
reorganization or other similar proceedings relative to the Company or of
any of its Subsidiaries or any of its properties is pending, or to the
knowledge of the Company, threatened.
5.11 Title to Properties. The Company and each Subsidiary of the
Company has good, valid, insurable (in the case of real property) and
marketable title to all of its properties and assets (whether real or
personal, tangible or intangible) reflected on the financial statements
described in Section 5.4 hereof, except for such properties and assets as
have been disposed of since the date of such financial statements as no
longer used or useful in the conduct of its business or as have been
disposed of in the ordinary course of business, and all such properties
and assets are free and clear of all Liens except as disclosed in such
financial statements.
5.12 ERISA. All plans ("Plans") of a type described in Section
3(3) of ERISA in respect of which the Company or any Subsidiary of the
Company is an "Employer," as defined in Section 3(5) of ERISA, are in
substantial compliance with ERISA, and none of such Plans is insolvent or
in reorganization, has an accumulated or waived funding deficiency within
the meaning of Section 412 of the Internal Revenue Code, and neither the
Company nor any Subsidiary of the Company has incurred any material
liability (including any material contingent liability) to or on account
of any such Plan pursuant to Sections 4062, 4063, 4064, 4201 or 4204 of
ERISA; and no proceedings have been instituted to
56
terminate any such Plan, and no condition exists which presents a
material risk to the Company or a Subsidiary of the Company of incurring
a liability to or on account of any such Plan pursuant to any of the
foregoing Sections of ERISA. No Plan or trust forming a part thereof has
been terminated since September 1, 1974.
5.13 Eligibility. The Company is approved and qualified and in
good standing as a mortgagee or seller/servicer, as set forth below, and
meets all requirements applicable to its status as such:
5.13(a) HUD approved mortgagee, eligible to
originate, purchase, hold, sell and service FHA fully insured
Mortgage Loans.
5.13(b) RFC approved seller/servicer of Mortgage
Loans, eligible to originate, purchase, hold, sell and service
Mortgage Loans to be sold to RFC.
5.14 Place of Business. The principal place of business of the
Company is ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
5.15 Special Representations Concerning Collateral.
The Company hereby represents and warrants to the Lender, as of the date
of this Agreement and as of the date of each Advance Request and the
making of each Advance, that:
5.15(a) The Company is the legal and equitable owner
and holder, free and clear of all Liens (other than Liens granted
hereunder), of the Pledged Mortgages, the Pledged Securities, the
Aggregate Payment Obligation and any Pledged Interest-Only
Certificates. All Pledged Mortgages, Pledged Securities and
Purchase Commitments have been duly authorized and validly issued
to the Company. All of the foregoing items of Collateral comply
with all of the requirements of this Agreement, and have been and
will continue to be validly pledged or assigned to the Lender,
subject to no other Liens.
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5.15(b) The Company has, and will continue to have, the
full right, power and authority to pledge the Collateral pledged
and to be pledged by it hereunder.
5.15(c) Any Mortgage Loan and any related document
included in the Pledged Mortgages (1) has been duly executed and
delivered by the parties thereto at a closing held not more than
ninety (90) days prior to the date of the Advance Request for such
Mortgage Loan, (2) has been made in compliance with all
requirements of the Real Estate Settlement Procedures Act, Equal
Credit Opportunity Act, the federal Truth-In-Lending Act and all
other applicable laws and regulations, (3) is and will continue to
be valid and enforceable in accordance with its terms, without
defense or offset, (4) has not been modified or amended except in
writing, which writing is part of the Collateral Documents, nor
any requirements thereof waived, (5) has been evaluated or
appraised in accordance with Title XI of FIRREA, and (6) complies
and will continue to comply with the terms of this Agreement and,
if applicable, with the related Purchase Commitment held by the
Company. Each Mortgage Loan has been fully advanced in the face
amount thereof, and each First Mortgage is a first Lien on the
premises described therein and each Second Mortgage is secured by
a second Lien on the premises described therein (subject in all
cases to encumbrances permitted pursuant to the RFC Guide), and
has or will have (except, in the case of an Eligible Subject Loan,
as otherwise permitted in the RFC Guide) a title insurance policy,
in American Land Title Association form or equivalent thereof,
from a recognized title insurance company, insuring the priority
of the Lien of the Mortgage and meeting the usual requirements of
Investors purchasing such Mortgage Loans.
5.15(d) No Mortgage Loan included in the Pledged
Mortgages is 60 days or more delinquent, determined pursuant to
the Mortgage Bankers Association of America method for determining
delinquency status as in effect on the date hereof, without the
Advance against such Pledged Mortgage having been repaid in
accordance with Section 2.7(e)(3) hereof, except with respect to
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Pledged Mortgages which have already been pledged as Collateral for
Nonperforming Advances hereunder.
5.15(e) The Company has complied and will continue to comply with
all laws, rules and regulations in respect of the FHA insurance or VA
guaranty of each Mortgage Loan included in the Pledged Mortgages
designated by the Company as an FHA insured or VA guaranteed Mortgage
Loan, and such insurance or guarantee is and will continue to be in
full force and effect.
5.15(f) All fire and casualty policies covering the premises
encumbered by each Mortgage included in the Pledged Mortgages (1) name
and will continue to name the Company or its subservicer, and its
successors and assigns, as the insured under a standard mortgagee
clause, (2) are and will continue to be in full force and effect, and
(3) afford and will continue to afford insurance against fire and such
other risks as are usually insured against in the broad form of
extended coverage insurance from time to time available.
5.15(g) Pledged Mortgages secured by premises located in a special
flood hazard area designated as such by the Director of the Federal
Emergency Management Agency are and shall continue to be covered by
special flood insurance under the National Flood Insurance Program.
5.15(h) Each Pledged Mortgage, against which an Advance is made on
the basis of a Purchase Commitment, meets all requirements of such
Purchase Commitment. The Company shall assure that Pledged Mortgages
which are intended to be used in the formation of Mortgage-backed
Securities shall comply or, prior to the formation of any such
Mortgage-backed Security, shall comply with the requirements of the
governmental instrumentality, department, agency or other Person
issuing or guaranteeing such Mortgage-backed Security. The Company
shall assure that all Mortgage Loans pledged hereunder that are not
covered by a Purchase Commitment, other than Nonperforming Mortgage
Loans, meet all requirements of one or more Investors with
59
which the Company has agreements or other arrangements to sell similar
Mortgage Loans.
5.15(i) For Pledged Mortgages which will be used to back ▇▇▇▇▇▇
Mae Mortgage-backed Securities, the Company has received from ▇▇▇▇▇▇
Mae a Confirmation Notice or Confirmation Notices for Request
Additional Commitment Authority and for Request Pool Numbers, and there
remains available thereunder a commitment on the part of ▇▇▇▇▇▇ ▇▇▇
sufficient to permit the issuance of ▇▇▇▇▇▇ Mae Mortgage-backed
Securities in an amount at least equal to the amount of such Pledged
Mortgages designated by the Company as the Mortgage Loans to be used to
back such ▇▇▇▇▇▇ ▇▇▇ Mortgage-backed Securities; each such Confirmation
Notice is in full force and effect; each of such Pledged Mortgages has
been assigned by the Company to one of such Pool Numbers and a portion
of the available ▇▇▇▇▇▇ Mae Commitment has been allocated thereto by
the Company, in an amount at least equal to such Pledged Mortgages; and
each such assignment and allocation has been reflected in the books and
records of the Company.
5.15(j) Each Pledged Mortgage secured by real property to which a
Manufactured Home is affixed will create a valid Lien on such
Manufactured Home that will have priority over any other Lien on such
Manufactured Home, whether or not arising under applicable real
property law.
5.16 Servicinq. Attached hereto as Exhibit E is a true and complete
list of the Company's Servicing Portfolio. All of the Company's Servicing
Contracts are in full force and effect and, except as otherwise indicated,
are unencumbered by Liens. No default or event which, with notice or lapse
of time or both, would become a default, exists under any such Servicing
Contract.
5.17 Special Representations Concerning REO Properties. The Company
hereby represents and warrants to the Lender, as of the date of this
Agreement and as of the date of each Advance Request for an REO Advance and
the making of each REO Advance, that:
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5.17(a) The Company is the legal and equitable owner and holder,
free and clear of all Liens (other than Liens granted hereunder and
under the REO Mortgages and encumbrances permitted pursuant to the RFC
Guide), of the REO Properties for which an REO Advance is being or has
been requested. All REO Mortgages have been duly authorized and validly
executed and delivered by the Company, and the REO Properties for which
an REO Advance has been made have been and will continue to be subject
to a security interest in favor of the Lender, subject to no other
Liens.
5.17(b) Each REO Mortgage is in full force and effect, is legal,
valid and enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency or other laws affecting the
enforcement of creditors' rights and by general principles of equity,
and no default or event which, with notice or lapse of time or both,
would become a default, exists under any such REO Mortgage.
5.18 No Adverse Selection. The Company has not selected the Collateral
in a manner so as to affect adversely the Lender's interests.
5.19 Year 2000 Compliance. The Company has conducted a comprehensive
review and assessment of the Company's computer applications and made
inquiry of the Company's key suppliers, vendors, customers, and Investors
with respect to the "Year 2000 Problem" and, based on that review and
inquiry, the Company does not believe the Year 2000 Problem will result in
a material adverse change in the Company's business condition (financial or
otherwise), operations, properties or prospects, or ability to repay the
credit.
5.20 Assumed Names. The Company does not originate Mortgage Loans or
otherwise conduct business under any names other than its legal name and
the assumed names set forth on Exhibit O attached hereto. The Company has
made all filings and taken all other action as may be required under the
laws of any jurisdiction in which it originates Mortgage Loans or otherwise
conducts business under any assumed name. To the
61
best of the Company's knowledge, the Company's use of the assumed names set
forth on Exhibit O attached hereto does not conflict with any other
Person's legal rights to any such name, nor otherwise give rise to any
liability by the Company to any other Person, except as disclosed on
Exhibit E to the Convertible Debt Agreement.
6. AFFIRMATIVE COVENANTS.
The Company hereby covenants and agrees that, so long as the
Warehousing Commitment or the Term Loan Commitment is outstanding or there
remain any Obligations to be paid or performed under this Agreement or
under any other Loan Document, the Company shall:
6.1 Payment of Notes. Punctually pay or cause to be paid all
Obligations payable hereunder and under the Notes in accordance with the
terms hereof and thereof.
6.2 Financial Statements and Other Reports. Deliver to the Lender:
6.2(a) As soon as available and in any event not later than the
last day of each month, statements of income and changes in
stockholders' equity of the Company (and, if applicable, its
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 such immediately preceding month, and the related balance sheet
as of the end of the immediately preceding month, all in reasonable
detail and certified as to the fairness of presentation by the chief
financial officer of the Company, subject, however, to year-end audit
adjustments.
6.2(b) As soon as available and in any event within ninety (90)
days after the close of each fiscal year of the Company, statements of
income, changes in stockholders' equity and cash flow of the Company
(and, if applicable, its Subsidiaries, on a consolidated basis) for
such year, and the related balance sheet as of the end of such year
(setting forth in comparative form the corresponding figures for the
preceding fiscal year), all in reasonable detail and accompanied by an
62
opinion (which opinion shall not be qualified due to possible failure
to take all appropriate steps to successfully address the Year 2000
Problem) in form and substance satisfactory to the Lender and prepared
by Deloitte & Touche or another accounting firm of recognized standing
selected by the Company and acceptable to the Lender, as to said
financial statements and a certificate signed by the chief financial
officer of the Company stating that said financial statements fairly
present the financial condition and results of operations of the
Company (and, if applicable, its Subsidiaries) as of the end of, and
for, such year.
6.2(c) Together with each delivery of financial statements required
in this Section 6.2, an Officer's Certificate substantially in the form
of Exhibit I-SF hereto: (1) setting forth in reasonable detail all
calculations necessary to show that the Company is in compliance with
the requirements of Sections 7.6, 7.7, 7.8, 7.9, and 7.10 hereof as of
the end of such month or year (or, if the Company is not in compliance,
showing the extent of non-compliance and specifying the period of
non-compliance and what actions the Company has taken, is taking or
proposes to take with respect thereto); (2) certifying that the Company
was, as of the end of the period, in compliance and in good standing
with applicable HUD, ▇▇▇▇▇▇ ▇▇▇, or Investor net worth requirements;
(3) certifying that the representation set forth in Section 5.19 hereof
is true and correct as of the date of such certificate or, if such
representation is not true and correct as of such date, specifying the
nature of the problem and what action the Company has taken, is taking
and proposes to take with respect thereto, and (4) stating that the
signers have reviewed the terms of this Agreement and have made, or
caused to be made under their supervision, a review in reasonable
detail of the transactions and conditions of the Company (and, if
applicable, its Subsidiaries) during the accounting period covered by
such financial statements and that such review has not disclosed the
existence during or at the end of such accounting period, and that the
signer does not have knowledge of the existence as of
63
the date of the Officer's Certificate, of any Default or Event of Default,
or if any Default or Event of Default existed or exists, specifying the
nature and period of the existence thereof and what action the Company has
taken, is taking and proposes to take with respect thereto.
6.2(d) As soon as available and in any event not later than the last
day of each month, a consolidated report (the "Delinquency Report") as of
the end of the immediately preceding month detailing, as to all Mortgage
Loans (i) owned by the Company or (ii) the servicing rights to which are
owned by the Company (specified by investor, type, recourse and
non-recourse) regardless of whether such Mortgage Loans are Pledged
Mortgages, which report shall indicate Loans which (1) are current and in
good standing, (2) are more than 30, 60 or 90 days past due, respectively,
determined using the Office of Thrift Supervision method, (3) are more than
360 days past due, determined using the Office of Thrift Supervision
method, (4) are the subject of pending bankruptcy or foreclosure
proceedings, or (5) have been converted (through foreclosure or other
proceedings in lieu thereof) by the Company into real estate owned by the
Company. Such report will include an estimate of the net liquidation
proceeds on any Pledged Mortgages which are 60 days or more delinquent,
determined under the Mortgage Bankers Association of America method for
determining delinquency status as in effect on the date hereof. The
Delinquency Report must segregate the information relating to the Pledged
Mortgages and REO Properties from other information.
6.2(e) As soon as available and in any event not later than the last
day of each month, a report (the "Securities Delinquency Report") as of the
end of the immediately preceding month detailing the delinquency and loss
performance of the Mortgage Loans serviced by the Company or Advanta that
back, and the cash flow of, (i) Accredited Mortgage Loan Trust 1996-1, (ii)
each Eligible Securitization-Transaction, and (iii) each [Advanta
Securitization Transaction].
64
6.2(f) As soon as available and in any event within 10 days after
filing of the returns, the Company's annual corporate tax returns.
6.2(g) As soon as available and in any event within 15 days of
receipt, all reports, notices and correspondence from regulatory agencies
pertaining to the performance of the Company or the Company's compliance
with applicable state or federal laws.
6.2(h) As soon as available and in any event not later than the last
day of each month, a commitment summary and pipeline report substantially
in the form of Exhibit L (the "Commitment Summary Report") as of the end of
the immediately preceding month.
6.2(i) Reports in respect of the Pledged Mortgages and Pledged
Securities, in such detail and at such times as the Lender in its
discretion may reasonably request at any time or from time to time.
6.2(j) Copies of all regular or periodic financial and other
reports, if any, which the Company shall file with the Securities and
Exchange Commission or any governmental agency successor thereto, copies of
any audits completed by ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and copies of
the Mortgage Bankers' Financial Reporting Forms (▇▇▇▇▇▇▇ Mac Form
1055/▇▇▇▇▇▇ ▇▇▇ Form 1002) which the Company is required to have filed, as
the Lender may reasonably request.
6.2(k) As soon as available and in any event not later than the last
day of each month, a consolidated report (the "Loan Production Report") as
of the end of the immediately preceding month, presenting the total dollar
volume and the number of Mortgage Loans originated or purchased during the
fiscal year, specified by property type and loan type or Investor (e.g.
FHA, ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac, Eligible Subject Loans, etc.),
and by regional production office.
6.2(l) As soon as available and in all events within 60 days after
the beginning of each fiscal year
65
of the Company, financial projections of the Company 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, in reasonable detail,
the form of which must be reasonably acceptable to the Lender.
6.2(m) As soon as available and in any event not later than the last
day of each month, a report detailing the current status of each REO
Property and each Nonperforming Mortgage Loan as of the end of the
immediately preceding month.
6.2(n) As soon as available and in any event not later than the last
day of each month, a report detailing all requests that the Company
repurchase Mortgage Loans 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 the Company in connection with any such request.
6.2(o) As soon as available and in any event not later than the last
day of each month, a report detailing all actions, suits, or proceedings
instituted by or against the Company 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 have at issue an
amount in excess of $25,000 (except for those previously disclosed pursuant
to Section 6.6 hereof), indicating the amount of any loss or liability the
Company may occur as a result.
6.2(p) From time to time, with reasonable promptness, such further
information regarding the business, operations, properties or financial
condition of the Company as the Lender may reasonably request.
6.3 Maintenance of Existence; Conduct of Business. Preserve and maintain
its corporate existence in good standing and all of its rights, privileges,
licenses and franchises necessary or desirable in the normal conduct of
66
its business, including, without limitation, its eligibility as lender,
seller/servicer and issuer described under Section 5.13 hereof; conduct its
business in an orderly and efficient manner; maintain a net worth of
acceptable assets as required for maintaining the Company's eligibility as
lender, seller/servicer and issuer described under Section 5.13 hereof; and
make no 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.
6.4 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 materially adversely affect its
business, operations, assets, or financial condition, except where
contested in good faith and by appropriate proceedings.
6.5 Inspection of Properties and Books. Permit authorized
representatives of the Lender or any Participant to discuss the business,
operations, assets and financial condition of the Company and its
Subsidiaries with its officers and employees and to examine its books of
account and make copies or extracts thereof, all at such reasonable times
as the Lender or any Participant may request. The Company will provide its
accountants with a copy of this Agreement promptly after the execution
hereof and will instruct its accountants to answer candidly any and all
questions that the officers of the Lender or any Participant or any
authorized representatives of the Lender or any Participant may address to
them in reference to the financial condition or affairs of the Company and
its Subsidiaries. The Company may have its representatives in attendance at
any meetings between the officers or other representatives of the Lender or
any Participant and the Company accountants held in accordance with this
authorization.
6.6 Notice. Give prompt Notice to the Lender of (a) any action, suit
or proceeding instituted by or against the Company 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 involves a potential loss or liability to the
Company or any Subsidiary in excess of $200,000, or any
67
such proceedings threatened against the Company or any of its Subsidiaries
in a writing containing the details thereof, (b) the filing, recording or
assessment of any federal, state or local tax Lien against the Company, or
any of its assets or any of its Subsidiaries, (c) the occurrence of any
Event of Default hereunder or the occurrence of any Default and
continuation thereof for five (5) days, (d) the suspension, revocation or
termination of the Company's eligibility, in any respect, as approved
lender, seller/servicer or issuer as described under Section 5.13 hereof,
(e) the transfer, loss or termination of any Servicing Contract to which
the Company is a party, or which is held for the benefit of the Company,
and the reason for such transfer, loss or termination, if known to the
Company, and (f) any other action, event or condition of any nature which
may lead to or result in a material adverse effect upon the business,
operations, assets, or financial condition of the Company and its
Subsidiaries or which, with or without notice or lapse of time or both,
would constitute a default under any other agreement, instrument or
indenture to which the Company or any of its Subsidiaries is a party or to
which the Company or any of its Subsidiaries, its properties, or assets may
be subject.
6.7 Payment of Debt, Taxes, etc. Pay and perform all obligations and
indebtedness of the Company, and cause to be paid and performed all
obligations and indebtedness of its Subsidiaries, promptly and in
accordance with the terms thereof and pay and discharge or cause to be paid
and discharged promptly all taxes, assessments and governmental charges or
levies imposed upon the Company or its Subsidiaries or upon their
respective income, receipts or properties before the same shall become past
due, as well as all lawful claims for labor, materials and supplies or
otherwise which, if unpaid, might become a Lien or charge upon such
properties or any part thereof; provided, however, that the Company and its
Subsidiaries shall not be required to pay any obligations, indebtedness,
taxes, assessments, governmental charges, levies or claims for labor,
materials or supplies for which the Company or its Subsidiaries shall have
obtained an adequate bond or adequate insurance or which are being
contested in good faith and by proper proceedings which are being
reasonably and diligently pursued and for which proper reserves have been
created.
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6.8 Insurance. Maintain (a) errors and omissions insurance or mortgage
impairment insurance and blanket bond coverage, with such companies and in such
amounts as satisfy prevailing requirements applicable to a lender,
seller/servicer and issuer described under Section 5.13 hereof, and (b)
liability insurance and fire and other hazard insurance on its properties, with
responsible insurance companies approved by the Lender, in such amounts and
against such risks as is customarily carried by similar businesses operating in
the same vicinity; and (c) within thirty (30) days after Notice from the Lender,
obtain such additional insurance as the Lender shall reasonably require, all at
the sole expense of the Company. Copies of such policies shall be furnished to
the Lender without charge upon request of the Lender.
6.9 Closing Instructions. Indemnify and hold the Lender harmless from
and against any loss, including reasonable attorneys' fees and costs,
attributable to the failure of a title insurance company, agent or approved
attorney to comply with the disbursement or instruction letter or letters of the
Company relating to any Mortgage Loan.
6.10 Subordination of Certain Indebtedness. Cause any indebtedness of
the Company, incurred after the date of this Agreement, to any shareholder,
director or officer of the Company, or to any Affiliate of the Company or of any
Subsidiary of the Company, or to any guarantor, which indebtedness has a term of
more than one (1) year or is in excess of Twenty-Five Thousand Dollars ($25,000)
to be subordinated to all Obligations by the execution of a Subordination of
Debt Agreement in the form of Exhibit F hereto and deliver to the Lender an
executed copy of said Agreement, certified by the corporate secretary of the
Company to be true and complete and in full force and effect.
6.11 Other Loan Obligations. Perform all material obligations under the
terms of each loan agreement, note, mortgage, security agreement or debt
instrument by which the Company is bound or to which any of its property is
subject, and promptly notify the Lender in writing of a declared default under
or the termination, cancellation, reduction or
69
nonrenewal of any of its other lines of credit or agreements with any other
lender. Exhibit J hereto is a true and complete list of all such lines of credit
or agreements as of the date hereof. The Company hereby agrees not to enter into
any secured financing facilities after the date hereof with a commitment amount
in excess of $100,000 without the prior written consent of the Lender, and to
give the Lender at least thirty (30) days Notice before entering into any
additional financing facilities.
6.12 Use of Proceeds of Advances. Use the proceeds of each Warehousing
Advance solely for the purposes set forth in Section 2.1(b) of that type, and
use the proceeds of each Term Loan Advance solely for the purposes set forth in
Section 2.3(b) hereof.
6.13 Special Affirmative Covenants Concerninq Collateral.
6.13(a) Warrant and defend the right, title and interest of the
Lender in and to the Collateral against the claims and demands of all
Persons whomsoever.
6.13(b) Service or cause to be serviced all Mortgage Loans in
accordance with the standard requirements of the issuers of Purchase
Commitments covering the same and all applicable FHA and VA requirements,
including without limitation taking all actions necessary to enforce the
obligations of the obligors under such Mortgage Loans. The Company shall
service or cause to be serviced all Mortgage Loans backing Pledged
Securities and Pledged Interest-Only Certificates and all Mortgage Loans
sold to the Lender pursuant to Shared Execution Forward Commitments in
accordance with applicable governmental requirements, the applicable
Servicing Contracts and requirements of issuers of Purchase Commitments
covering any Pledged Securities. The Company shall hold all escrow funds
collected in respect of Pledged Mortgages and Mortgage Loans backing
Pledged Securities, the Aggregate Payment obligation and Pledged
Interest-Only Certificates in trust, without commingling the same with
non-custodial funds, and apply the same for the purposes for which such
funds were collected.
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6.13(c) Execute and deliver to the Lender such Uniform Commercial
Code financing statements with respect to the Collateral as the Lender
may request. The Company shall also execute and deliver to the Lender
such further instruments of sale, pledge or assignment or transfer, and
such powers of attorney, as required by the Lender, and shall do and
perform all matters and things necessary or desirable to be done or
observed, for the purpose of effectively creating, maintaining and
preserving the security and benefits intended to be afforded the Lender
under this Agreement. The Lender shall have all the rights and remedies
of a secured party under the Uniform Commercial Code of Minnesota, or any
other applicable law, in addition to all rights provided for herein.
6.13(d) Notify the Lender within two (2) Business Days of any
default under, or of the termination of, any Purchase Commitment relating
to any Pledged Mortgage, Eligible Mortgage Pool or Pledged Security.
6.13(e) Promptly comply in all respects with the terms and
conditions of each Shared Execution Forward Commitment, all Purchase
Commitments, and all extensions, renewals and modifications or
substitutions thereof or thereto. The Company will cause to be delivered
to the Investor the Pledged Mortgages and Pledged Securities to be sold
under each Purchase Commitment not later than three (3) Business Days
prior to the mandatory delivery date thereof.
6.13(f) Maintain, at its principal office, in a regional office
approved by the Lender, in the office of a computer service bureau
engaged by the Company and approved by the Lender or in Advanta's office
or the office of another subservicer approved by the Lender, and, upon
request, make available to the Lender the originals, or copies in any
case where the originals have been delivered to the Lender or to an
Investor, of its Mortgage Notes and Mortgages included in Pledged
Mortgages, Mortgage-backed Securities delivered to the Lender as Pledged
Securities, Purchase Commitments, and all related Mortgage Loan documents
and instruments,
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and all files, surveys, certificates, correspondence, appraisals,
computer programs, tapes, discs, cards, accounting records and
other information and data relating to the Collateral.
6.14 Special Affirmative Covenants Concerninq REO Mortgages.
6.14(a) Record in the appropriate recording office to
perfect a security interest in the REO Property an REO Mortgage
with respect to each REO Property for which an REO Advance is
being requested, including the payment of all recording fees or
taxes.
6.14(b) Immediately upon execution thereof, deliver to the
Lender a copy of any contract entered into by the Company for the
sale, transfer or other disposition of an REO Property for which
an REO Advance has been made.
6.14(c) Instruct the purchaser of any REO Property for
which an REO Advance has been made to wire transfer the purchase
proceeds for the REO Property to the Cash Collateral Account.
7. NEGATIVE COVENANTS.
The Company hereby covenants and agrees that, so long as the
Warehousing Commitment or the Term Loan Commitment is outstanding or
there remain any Obligations to be paid or performed, the Company shall
not, either directly or indirectly, without the prior written consent of
the Lender:
7.1 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.
7.2 Sale or Pledge of Assets. Sell or otherwise dispose of any
existing or future Servicing Contracts of the Company; pledge or
otherwise grant any Lien on any of its properties or assets (including,
without limitation, the
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Collateral and any Servicing Contracts) other than (a) to the Lender, (b)
Liens in connection with deposits or pledges to secure payment of
workers' compensation, unemployment insurance, old age pensions or other
social security obligations, in the ordinary course of business of the
Company or any Subsidiary, (c) Liens for taxes, fees, assessments and
governmental charges not delinquent or which are being contested in good
faith by appropriate proceedings and for which appropriate reserves have
been established in accordance with GAAP, (d) encumbrances consisting of
zoning regulations, easements, rights of way, survey exceptions and other
similar restrictions on the use of real property and minor irregularities
in title thereto which do not materially impair its use in operation of
its business, (e) Liens on equipment to secure Debt incurred solely to
acquire such equipment up to an aggregate amount of $500,000 in addition
to Liens outstanding as of the Closing Date, or with the prior written
consent of Lender, (f) Liens on Mortgage Loans financed pursuant to the
▇▇▇▇▇▇ Facility; and (g) Liens on Mortgage Loans financed pursuant to the
Bank United Facility; or omit to take any action required to keep any
Servicing Contracts in full force and effect; provided, however, that if
no Default or Event of Default has occurred and is continuing, servicing
on individual Mortgage Loans may be sold concurrently with and incidental
to the sale of such Mortgage Loans (with servicing released) in the
ordinary course of the Company's business.
7.3 Merger; Sale of Assets; Acquisitions; Business Activities.
Liquidate, dissolve, consolidate or merge, sell any substantial part of
its assets except in the ordinary course of business, acquire any
substantial part of the assets of another, or engage in any business
activities substantially different from those engaged in by the Company
on the date hereof.
7.4 Deferral of Subordinated Debt. Pay in advance of the stated
maturity thereof any Subordinated Debt of the Company or, if a Default or
Event of Default hereunder shall have occurred, make any payment of any
kind thereafter on such Subordinated Debt until all Obligations have been
paid and performed in full and any applicable preference period has
expired.
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7.5 Loss of Eligibility. Take any action that would cause the
Company to lose all or any part of its status as an eligible lender,
seller/servicer and issuer as described under Section 5.13 hereof.
7.6 Debt to Tangible Net Worth Ratio. Permit the ratio of Debt
(excluding, for this purpose only, Debt arising under the Hedging
Arrangements, to the extent of assets arising under the same Hedging
Arrangements) to Tangible Net Worth of the Company (and its Subsidiaries,
on a consolidated basis) at any time to exceed (i) from the Closing Date,
to and including December 30, 1999, 20 to 1; (ii) from December 31, 1999,
to and including December 30, 2000, 17 to 1; (iii) from and after
December 31, 2000 to December 30, 2001, 14 to 1; and (iv) from and after
December 31, 2001, 11 to 1.
7.7 Minimum Tangible Net Worth. Permit Tangible Net Worth of
the Company (and its Subsidiaries, on a consolidated basis) at any time
to be less than the sum of (a) $6,000,000 plus (b) for each completed
fiscal quarter of the Company ended after the date hereof, 50% of
positive net income of the Company for such fiscal quarter.
7.8 Liquidity. Permit Liquid Assets of the Company at any time
to be less than $1,000,000.
7.9 Quarterly Net Income. Permit the net income of the Company
for any fiscal quarter ended after the date hereof to be less than zero.
7.10 Transactions with Affiliates. Directly or indirectly (a)
make any loan, advance, extension of credit or capital contribution to
any of its Affiliates, other than (i) investments in Accredited Home
Capital, Inc. to the extent required to comply with Section 7.1(a) of the
Cargill Facility Agreement [and (ii) investments totaling not more than
Three Hundred Fifty Thousand Dollars ($350,000), in the aggregate, in
Vicon Financial Services, Inc., and in one or more Vicon Affiliates], (b)
transfer, sell, pledge, assign or otherwise dispose of any of its assets
to or on behalf of such Affiliates, (c) merge or consolidate with or
purchase or acquire assets from such Affiliates [other than purchases of
Mortgage Loans in the ordinary course of business from
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Vicon Affiliates], or (d) transfer, pledge or assign or otherwise pay
management fees to or on behalf of such Affiliates.
7.11 Acquisition of Recourse Servicing Contracts. Acquire or
enter into Servicing Contracts under which the Company is obligated to
repurchase or indemnify the holder of the Mortgage Loans as a result of
defaults on the Mortgage Loans occurring at any time after the first
payment is made on such Mortgage Loans.
7.12 Gestation Facilities. Directly or indirectly sell or
finance Pledged Mortgages under any Gestation Agreements other than the
▇▇▇▇▇▇ Facility; provided, that no Ordinary Warehousing Advance shall be
made against any Pledged Mortgage sold or financed under the ▇▇▇▇▇▇
Facility after initially being pledged hereunder.
7.13 Special Negative Covenants Concerning Collateral.
7.13(a) Except in the case of a Mortgage Loan against
which a Nonperforming Advance is outstanding, the Company shall
not amend or modify, or waive any of the terms and conditions of,
or settle or compromise any claim in respect of, any Pledged
Mortgages or Pledged Securities.
7.13(b) The Company shall not sell, assign, transfer or
otherwise dispose of, or grant any option with respect to, or
pledge or otherwise encumber (except pursuant to this Agreement or
as permitted herein) any of the Collateral or any interest
therein.
7.13(c) Except in the case of a Mortgage Loan against
which a Nonperforming Advance is outstanding, the Company shall
not make any compromise, adjustment or settlement in respect of
any of the Collateral or accept other than cash in payment or
liquidation of the Collateral.
7.13(d) The Company will not guarantee the debt of any
other parties.
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8. DEFAULTS; REMEDIES.
8.1 Events of Default. The occurrence of any of the following
conditions or events shall be an event of default ("Event of Default"):
8.1(a) Failure to pay the principal of any Advance when
due, whether at stated maturity, by acceleration, or otherwise; or
failure to pay any installment of interest on any Advance or any
other amount due under this Agreement within ten (10) days after
the due date; or failure to pay, within any applicable grace
period, the principal or interest on any other indebtedness of the
Company due the Lender, including but not limited to indebtedness
under the Convertible Debt Agreement; or
8.1(b) Failure of the Company or any of its Subsidiaries to
pay, or any default in the payment of any principal or interest
on, any other indebtedness or in the payment of any contingent
obligation within any period of grace provided; breach or default
with respect to any other material term of any other indebtedness
or of any loan agreement, mortgage, indenture or other agreement
relating thereto, if the effect of such breach or default is to
cause, or to permit the holder or holders thereof (or a trustee on
behalf of such holder or holders) to cause, indebtedness of the
Company or its Subsidiaries in the aggregate amount of $75,000 or
more to become or be declared due prior to its stated maturity
(upon the giving or receiving of notice, lapse of time, both, or
otherwise); or
8.1(c) Failure of the Company to perform or comply with any
term or condition applicable to it contained in Sections 6.3 and
6.12 or in any Section of Article 7 of this Agreement; or
8.1(d) Any of the Company's representations or warranties
made or deemed made herein or in any other Transaction Document
(other than the representations and warranties set forth in
Section 5.15 or Section 5.17 hereof), or in any statement or
certificate at any
76
time given by the Company in writing pursuant hereto or thereto
shall be inaccurate or incomplete in any material respect on the
date as of which made or deemed made; or
8.1(e) The Company shall default in the performance of
or compliance with any term contained in this Agreement or any
other Transaction Document (including without limitation, any
covenant contained in the Convertible Debt Agreement, whether or
not the Convertible Debt Agreement or such covenant remains in
effect) other than those referred to above in Subsections 8.1(a),
8.1(c) or 8.1(d) and such default shall not have been remedied or
waived within thirty (30) days after the earliest of (i) receipt
by the Company of Notice from the Lender of such default, (ii)
receipt by the Lender of Notice from the Company of such default,
or (iii) the date the Company should have notified the Lender of
such default pursuant to Section 6.6(c); or
8.1(f) (1) A court having jurisdiction shall enter a decree
or order for relief in respect of the Company or any Subsidiary of
the Company in an involuntary case under any applicable
bankruptcy, insolvency or other similar law in respect of the
Company or any Subsidiary of the Company now or hereafter in
effect, which decree or order is not stayed; the Company or any
Subsidiary of the Company shall consent to the entry of any such
decree or order; or a filing of a voluntary case under any
applicable bankruptcy, insolvency or other similar law in respect
of the Company or any Subsidiary of the Company has occurred; or
any other similar relief shall be granted under any applicable
federal or state law; or (2) the filing of an involuntary case in
respect of the Company or any Subsidiary of the Company under any
applicable bankruptcy, insolvency or other similar law; or a
decree or order of a court having jurisdiction for the appointment
of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over the Company or any
Subsidiary of the Company, or over all or a substantial part of
their respective property, shall have been entered; or the
involuntary appointment of an interim
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or permanent receiver, trustee or other custodian of the Company
or any Subsidiary of the Company for all or a substantial part of
their respective property; or the issuance of a warrant of
attachment, execution or similar process against any substantial
part of the property of the Company or any Subsidiary of the
Company, and the continuance of any such events in Subsection (2)
above for sixty (60) days unless dismissed, bonded off or
discharged; or
8.1(g) The Company or any Subsidiary of the Company shall
consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its
property; the making by the Company or any Subsidiary of the
Company of any assignment for the benefit of creditors; or the
inability or failure of the Company or any Subsidiary of the
Company, or the admission by the Company or any Subsidiary of the
Company in writing of its inability, to pay its debts as such
debts become due; or
8.1(h) Failure of the Company to perform any contractual
obligations which it may have to repurchase Mortgage Loans, if
such obligations in the aggregate exceed $500,000; or
8.1(i) Any money judgment, writ or warrant of attachment,
or similar process involving in any case an amount in excess of
$75,000 shall be entered or filed against the Company or any of
its Subsidiaries or any of their respective assets and shall
remain undischarged, unvacated, unbonded or unstayed for a period
of thirty (30) days or in any event later than five (5) days prior
to the date of any proposed sale thereunder; or
8.1(j) Any order, judgment or decree shall be entered
against the Company or any Subsidiary of the Company decreeing the
dissolution or split up of the Company or such Subsidiary and such
order shall remain undischarged or unstayed for a period in excess
of twenty (20) days; or
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8.1(k) Any Plan maintained by the Company or any of its
Subsidiaries shall be terminated within the meaning of Title IV of
ERISA or a trustee shall be appointed by an appropriate United
States district court to administer any Plan, or the Pension
Benefit Guaranty Corporation (or any successor thereto) shall
institute proceedings to terminate any Plan or to appoint a
trustee to administer any Plan if as of the date thereof the
Company's liability or any such Subsidiary's liability (after
giving effect to the tax consequences thereof) to the Pension
Benefit Guaranty Corporation (or any successor thereto) for
unfunded guaranteed vested benefits under the Plan exceeds the
then current value of assets accumulated in such Plan by more than
$25,000 (or in the case of a termination involving the Company or
any of its Subsidiaries as a "substantial employer" (as defined in
Section 4001(a)(2) of ERISA) the withdrawing employer's
proportionate share of such excess shall exceed such amount); or
8.1(l) The Company or any of its Subsidiaries as employer
under a Multiemployer Plan shall have made a complete or partial
withdrawal from such Multiemployer Plan and the plan sponsor of
such Multiemployer Plan shall have notified such withdrawing
employer that such employer has incurred a withdrawal liability in
an annual amount exceeding $25,000; or
8.1(m) The Company shall purport to disavow its obligations
hereunder, or shall contest the validity or enforceability hereof;
or the Lender's security interest on any portion of the Collateral
shall become unenforceable or otherwise impaired; provided that,
subject to the Lender's approval, no Event of Default shall occur
as a result of such impairment if such impairment shall be cured
or all Advances made against any such Collateral shall be paid in
full within ten (10) days of the date of such impairment; or
8.1(n) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall cease to be the Chairman and
Chief Executive Officer, ▇▇▇ ▇. ▇▇▇▇▇▇▇ shall cease to be the
Executive Vice President, or
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇ shall cease to be the President in each case of
the Company; or
8.1(o) Any Lien for any taxes, assessments or other
governmental charges (i) is filed against the Company or any of
its property, or is otherwise enforced against the Company or any
of its property, or (ii) obtains priority that is equal or greater
than the priority of the Lender's security interest in any of the
Collateral; or
8.1(p) A material adverse change occurs, or is reasonably
likely to occur, in the business condition (financial or
otherwise), operations, properties or prospects of the Company, or
in the ability of the Company to repay the Obligation.
8.1(q) An "Event of Default" shall occur under the
Convertible Debt Agreement or any other Convertible Debt Document.
8.1(r) An "Event of Default" shall occur under the Loan
Sale Commitment.
8.2 Remedies.
8.2(a) Upon the occurrence of any Event of Default
described in Sections 8.1(f) or 8.1(g), the Commitment shall be
terminated and the unpaid principal amount of and accrued interest
on the Notes and all other Obligations shall automatically become
due and payable, without presentment, demand or other requirements
of any kind, all of which are hereby expressly waived by the
Company.
8.2(b) Upon the occurrence of any Event of Default, other
than those described in Sections 8.1(f) and 8.1(g), the Lender
may, by Notice to the Company, terminate the Commitment and/or
declare all Obligations to be immediately due and payable,
whereupon the same shall forthwith become due and payable,
together with all accrued interest thereon, and the obligation of
the Lender to make any Advances shall thereupon terminate.
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8.2(c) Upon the occurrence of any Event of Default, the
Lender may also do any of the following:
(1) Foreclose upon or otherwise enforce its security
interest in and Lien on the Collateral to secure all
payments and performance of the Obligations in any manner
permitted by law or provided for hereunder.
(2) Notify all obligors in respect of Collateral that
the Collateral has been assigned to the Lender and that all
payments thereon are to be made directly to the Lender or
such other party as may be designated by the Lender;
settle, compromise, or release, in whole or in part, any
amounts owing on the Collateral, any such obligor or any
Investor or any portion of the Collateral, on terms
acceptable to the Lender; enforce payment and prosecute any
action or proceeding with respect to any and all
Collateral; and where any such Collateral is in default,
foreclose on and enforce security interests in such
Collateral by any available judicial procedure or without
judicial process and sell property acquired as a result of
any such foreclosure.
(3) Act, or contract with a third party to act, as
servicer or subservicer of each item of Collateral
requiring servicing and perform all obligations required in
connection with Servicing Contracts and Purchase
Commitments, such third party's fees to be paid by the
Company.
(4) Require the Company to assemble the Collateral
and/or books and records relating thereto and make such
available to the Lender at a place to be designated by the
Lender.
(5) Enter onto property where any Collateral or books
and records relating thereto are located and take
possession thereof with or without judicial process; and
obtain access to the Company's data processing equipment,
computer hardware and software relating to the Collateral
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and to use all of the foregoing and the information
contained therein in any manner the Lender deems necessary
for the purpose of effectuating its rights under this
Agreement and any other Loan Document.
(6) Prior to the disposition of the Collateral, prepare
it for disposition in any manner and to the extent the
Lender deems appropriate.
(7) Exercise all rights and remedies of a secured
creditor under the Uniform Commercial Code of Minnesota or
other applicable law, including, but not limited to,
selling or otherwise disposing of the Collateral, or any
part thereof, at one or more public or private sales,
whether or not such Collateral is present at the place of
sale, for cash or credit or future delivery, on such terms
and in such manner as the Lender may determine, including,
without limitation, sale pursuant to any applicable
Purchase Commitment. If notice is required under such
applicable law, the Lender will give the Company not less
than ten (10) days' notice of any such public sale or of
the date after which any private sale may be held. The
Company agrees that ten (10) days' notice shall be
reasonable notice. The Lender may, without notice or
publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may
be made at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the
Collateral on credit or for future delivery, the Collateral
so sold may be retained by the Lender until the selling
price is paid by the purchaser thereof, but the Lender
shall not incur any liability in case of the failure of
such purchaser to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may
again be sold upon like notice. The Lender may, however,
instead of exercising the power of sale herein conferred
upon it, proceed by
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a suit or suits at law or in equity to collect all amounts
due upon the Collateral or to foreclose the pledge of and
sell the Collateral or any portion thereof under a judgment
or decree of a court or courts of competent jurisdiction,
or both.
(8) Proceed against the Company on the Notes.
(9) Exercise any or all of the rights and remedies
available to the Lender under the REO Mortgages or
otherwise under applicable law.
8.2(d) The Lender shall incur no liability as a result of
the sale or other disposition of the Collateral, or any part
thereof, at any public or private sale or disposition. The Company
hereby waives (to the extent permitted by law) any claims it may
have against the Lender arising by reason of the fact that the
price at which the Collateral may have been sold at such private
sale was less than the price which might have been obtained at a
public sale or was less than the aggregate amount of the
outstanding Advances and the unpaid interest accrued thereon, even
if the Lender accepts the first offer received and does not offer
the Collateral to more than one offeree. Any sale of Collateral
pursuant to the terms of a Purchase Commitment, or any other
disposition of Collateral arranged by the Company, whether before
or after the occurrence of an Event of Default, shall be deemed to
have been made in a commercially reasonable manner.
8.2(e) The Company acknowledges that Mortgage Loans and
Mortgage-backed Securities are collateral of a type which is
customarily sold on a recognized market. The Company waives any
right it may have to prior notice of the sale of any Pledged
Mortgage or Pledged Security, and agrees that the Lender may
purchase any Pledged Mortgages or Pledged Securities at a private
sale of such Collateral.
8.2(f) The Company specifically waives and releases (to the
extent permitted by law) any equity or
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right of redemption, all rights of redemption, stay or appraisal
which the Company has or may have under any rule of law or statute
now existing or hereafter adopted, and any right to require the
Lender to (1) proceed against any Person, (2) proceed against or
exhaust any of the Collateral or pursue its rights and remedies as
against the Collateral in any particular order, or (3) pursue any
other remedy in its power. The Lender shall not be required to
take any steps necessary to preserve any rights of the Company
against holders of mortgages prior in lien to the Lien of any
Mortgage included in the Collateral or to preserve rights against
prior parties.
8.2(g) The Lender may, but shall not be obligated to,
advance any sums or do any act or thing necessary to uphold and
enforce the Lien and priority of, or the security intended to be
afforded by, any Mortgage included in the Collateral, including,
without limitation, 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 the Lender in exercising any right, power or remedy
conferred by this Agreement, or in the enforcement hereof,
together with interest thereon, at the Default Rate, from the time
of payment until repaid, shall become a part of the principal
balance outstanding hereunder and under the Notes.
8.2(h) No failure on the part of the Lender to exercise,
and no delay in exercising, any right, power or remedy provided
hereunder, at law or in equity shall operate as a waiver thereof;
nor shall any single or partial exercise by the Lender of any
right, power or remedy provided hereunder, at law or in equity
preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. Without intending to limit the
foregoing, all defenses based on the statute of limitations are
hereby waived by the Company to the extent permitted by law. The
remedies herein provided are cumulative and are not exclusive of
any remedies provided at law or in equity.
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8.2(i) The Company acknowledges that the Company and the
Lender have entered into, and may from time to time hereafter
enter into, agreements ("Acknowledgment Agreements") with any
Investor in order to obtain the consent of any other Investor to
the assignment of and security interest granted in the Servicing
Contracts pursuant to Section 3 hereof, as the same may be amended
from time to time. The Company further acknowledges that the
Acknowledgment Agreements may contain certain provisions
concerning the enforcement by the Lender of the security interest
of the Lender in the Servicing Contracts subject thereto. The
Company agrees that the disposition of its rights in any Servicing
Contract pursuant to the terms of the applicable Acknowledgment
Agreement shall be deemed commercially reasonable within the
meaning of Section 9-504(3) of the Uniform Commercial Code of
Minnesota. The Company hereby waives any claims it might otherwise
have against the Lender as a result of the Lender's compliance
with the terms of any Acknowledgment Agreement.
8.2(j) The Lender is hereby granted a license or other
right to use, without charge, the Company'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 Collateral, and the Company's rights under all licenses and
all other agreements related to the foregoing shall inure to the
Lender's benefit until the Obligations are paid in full.
8.3 Application of Proceeds. The proceeds of any sale,
disposition or other enforcement of the Lender's security interest in all
or any part of the Collateral shall be applied by the Lender:
First, to the payment of the costs and expenses of such sale or
enforcement, including reasonable compensation to the Lender's agents and
counsel, and all expenses, liabilities and advances made or incurred by
or on behalf of the Lender in connection therewith;
85
Second, to the payment of interest accrued and unpaid on the
Notes;
Third, to the payment of any other Obligations due (other than
principal and interest) under this Agreement and the Loan Documents;
Fourth, to the payment of the outstanding principal balance of the
Notes;
Fifth, to any remaining Obligations; and
Finally, to the payment to the Company, or to its successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
If the proceeds of any such sale, disposition or other enforcement
are insufficient to cover the costs and expenses of such sale, as
aforesaid, and the payment in full of all Obligations, the Company shall
remain liable for any deficiency.
8.4 Lender Appointed Attorney-in-Fact. The Lender is hereby
appointed the attorney-in-fact of the Company, with full power of
substitution, for the purpose of carrying out the provisions hereof and
taking any action and executing any instruments which the Lender may deem
necessary or advisable to accomplish the purposes hereof, which
appointment as attorney-in-fact is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing, the Lender
shall have the right and power to give notices of its security interest
in the Collateral to any Person, either in the name of the Company or in
its own name, to endorse all Pledged Mortgages or Pledged Securities
payable to the order of the Company, to change or cause to be changed the
book-entry registration or name of subscriber or Investor on any Pledged
Security, or to receive, endorse and collect all checks made payable to
the order of the Company representing any payment on account of the
principal of or interest on, or the proceeds of sale of, any of the
Pledged Mortgages or Pledged Securities and to give full discharge for
the same.
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8.5 Right of Set-Off. If the Company shall default in the payment
of the Notes, any interest accrued thereon, or any other sums which may
become payable hereunder when due, or in the performance of any of its
other obligations or liabilities under this Agreement, the Lender shall
have the right, at any time and from time to time, without notice, to
set-off and to appropriate or apply any and all property or indebtedness
of any kind at any time held or owing by the Lender to or for the credit
or the account of the Company against and on account of the Obligations
of the Company under the Notes and this Agreement, irrespective of
whether or not the Lender shall have made any demand hereunder and
whether or not said Obligations shall have matured.
9. NOTICES.
All notices, demands, consents, requests and other communications
required or permitted to be given or made hereunder (collectively,
"Notices") shall, except as otherwise expressly provided hereunder, be in
writing and shall be delivered in person or telecopied or mailed, first
class or delivered by overnight courier, return receipt requested,
postage prepaid, addressed to the respective parties hereto at their
respective addresses hereinafter set forth or, as to any such party, at
such other address as may be designated by it in a Notice to the other.
All Notices shall be conclusively deemed to have been properly given or
made when duly delivered, in person, by telecopy or by overnight courier,
or if mailed, on the date of receipt as noted on the return receipt,
addressed as follows:
if to the Company: Accredited Home Lenders, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier No.:(▇▇▇) ▇▇▇-▇▇▇▇
if to the Lender: Residential Funding Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇, Director
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
87
10. REIMBURSEMENT OF EXPENSES; INDEMNITY.
The Company shall: (a) pay a documentation production fee of $5,000 to
the Lender, and all out-of-pocket costs and expenses (including, without
limitation, the reasonable fees, disbursements and service charges of ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ LLP, special counsel to the Lender) of the Lender, in connection with
the preparation and negotiation of this Agreement; (b) pay such additional
documentation production fees as the Lender may require and all out-of-pocket
costs and expenses of the Lender, including, without limitation, reasonable fees
and disbursements of counsel (including allocated costs of internal counsel), in
connection with the amendment, enforcement and administration of this Agreement,
the Notes, and other Loan Documents and the making and repayment of the Advances
and the payment of interest thereon; (c) indemnify, pay, and hold harmless the
Lender and any holder of the Notes from and against, any and all present and
future stamp, documentary and other similar taxes with respect to the foregoing
matters and save the Lender and the holder or holders of the Notes harmless from
and against any and all liabilities with respect to or resulting from any delay
or omission to pay such taxes; and (d) indemnify, pay and hold harmless the
Lender and any of its officers, directors, employees or agents and any
subsequent holder of the Notes (collectively called the "Indemnitees") from and
against any and all liabilities, obligations, losses, damages, penalties,
judgments, suits, costs, expenses and disbursements of any kind or nature
whatsoever (including without limitation, the reasonable fees and disbursements
of counsel of the Indemnitees (including allocated costs of internal counsel) in
connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated a party thereto) which may
be imposed upon, incurred by or asserted against such Indemnitees in any manner
relating to or arising out of this Agreement, the Notes, or any other Loan
Document or any of the transactions contemplated hereby or thereby (the
"Indemnified Liabilities"); provided, however, that the Company shall have no
obligation hereunder with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of any such Indemnitees. To the extent
that the undertaking to indemnify, pay and hold harmless as set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, the Company shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the
88
payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them. The agreement of the Company contained in this
Subsection (d) shall survive the expiration or termination of this Agreement and
the payment in full of the Notes. Attorneys' fees and disbursements incurred in
enforcing, or on appeal from, a judgment pursuant hereto shall be recoverable
separately from and in addition to any other amount included in such judgment,
and this clause is intended to be severable from the other provisions of this
Agreement and to survive and not be merged into such judgment.
11. FINANCIAL INFORMATION.
All financial statements and reports furnished to the Lender hereunder
shall be prepared in accordance with GAAP, applied on a basis consistent with
that applied in preparing the financial statements as at the end of and for the
last fiscal year ended (except to the extent otherwise required to conform to
good accounting practice).
12. MISCELLANEOUS.
12.1 Terms Binding Upon Successors; Survival of Representations.
The terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns. All representations, warranties, covenants and
agreements herein contained on the part of the Company shall survive the
making of any Advance and the execution of the Notes, and shall be
effective so long as the Commitment is outstanding hereunder or there
remain any Obligations to be paid or performed.
12.2 Assignment. This Agreement may not be assigned by the
Company. This Agreement and the Notes, along with the Lender's security
interest in any or all of the Collateral, may, at any time, be
transferred or assigned, in whole or in part, by the Lender with the
prior written consent of the Company, which shall not be unreasonably
withheld, and any assignee thereof may enforce this Agreement, the Notes
and such security interest. Notwithstanding the foregoing or anything in
Section 12.5 below, nothing contained in this Agreement shall in any
manner or to any extent affect the right of the Lender to assign, pledge
or participate the
89
Notes and its right to receive and retain payments on the Notes in
connection with any arrangement maintained by the Lender to fund credit
facilities provided by the Lender, provided the Lender remains primarily
and directly liable to perform all of its obligations under this
Agreement.
12.3 Amendments. Except as otherwise provided in this Agreement,
this Agreement may not be amended, modified or supplemented unless such
amendment, modification or supplement is set forth in a writing signed by
the parties hereto.
12.4 Governing Law. This Agreement and the other Loan Documents
shall be governed by the laws of the State of Minnesota, without
reference to its principles of conflicts of laws.
12.5 Participations. The Lender may at any time sell, assign or
grant participations in, or otherwise transfer to any other Person (a
"Participant"), all or part of the Obligations. Without limitation of the
exclusive right of the Lender to collect and enforce such Obligations,
the Company agrees that each disposition will give rise to a
debtor-creditor relationship of the Company to the Participant, and the
Company authorizes each Participant, upon the occurrence of an Event of
Default, to proceed directly by right of setoff, banker's lien, or
otherwise, against any assets of the Company which may be in the hands of
such Participant. Notwithstanding the sale by the Lender of any
participation hereunder, (i) no participant shall be deemed to be or have
the rights and obligations of the Lender hereunder except as provided in
the preceding sentence and (ii) the Lender shall not in connection with
selling any such participation condition the Lender's rights in
connection with consenting to amendments or granting waivers concerning
any matter under any Loan Document upon obtaining the consent of such
participant other than on matters relating to (A) any reduction in the
amount of any principal of, or the amount of or rate of interest on, the
Notes or any Advances in which such participation is sold, (B) any
postponement of the date fixed for any payment of principal of or
interest on the Notes or any Advance, or the termination of the
Warehousing Commitment or the Term Loan Commitment, or (C) the release or
subordination of any
90
material portion of the Collateral. The Company authorizes the Lender to
disclose to any prospective Participant and any Participant any and all
information in the Lender's possession concerning the Company, this
Agreement and the Collateral.
12.6 Relationship of the Parties. This Agreement provides for the
making of Advances by the Lender, in its capacity as a lender, to the
Company, in its capacity as a borrower, and for the payment of interest,
repayment of principal by the Company to the Lender, and for the payment
of certain fees by the Company to the Lender. The relationship between
the Lender and the Company is limited to that of creditor/secured party,
on the one hand, and debtor, on the other hand. The provisions herein for
compliance with financial covenants and delivery of financial statements
are intended solely for the benefit of the Lender to protect its
interests as lender in assuring payments of interest and repayment of
principal and payment of certain fees, and nothing contained in this
Agreement shall be construed as permitting or obligating the Lender to
act as a financial or business advisor or consultant to the Company, as
permitting or obligating the Lender to control the Company or to conduct
the Company's operations, as creating any fiduciary obligation on the
part of the Lender to the Company, or as creating any joint venture,
agency, or other relationship between the parties hereto other than as
explicitly and specifically stated in this Agreement. The Company
acknowledges that it has had the opportunity to obtain the advice of
experienced counsel of its own choosing in connection with the
negotiation and execution of this Agreement and to obtain the advice of
such counsel with respect to all matters contained herein. The Company
further acknowledges that it is experienced with respect to financial and
credit matters and has made its own independent decisions to apply to the
Lender for credit and to execute and deliver this Agreement.
12.7 Severability. If any provision of this Agreement shall be
declared to be illegal or unenforceable in any respect, such illegal or
unenforceable provision shall be and become absolutely null and void and
of no force and effect as though such provision were not in fact set
forth herein, but all other covenants, terms, conditions and
91
provisions hereof shall nevertheless continue to be valid and
enforceable.
12.8 Operational Reviews. From time to time upon request made,
except while an Event of Default or Default has occurred and is
continuing, at least 2 Business Days in advance, the Company shall permit
the Lender or its representative access to its premises and records
during normal business hours, for the purpose of conducting a review of
the Company's general mortgage business methods, policies, and
procedures, auditing loan files and reviewing financial and operational
aspects of the Company's business.
12.9 Consent to Credit References. The Company hereby consents to
the disclosure of information regarding the Company and its relationships
with the Lender to Persons making credit inquiries to the Lender. This
consent is revocable by the Company at any time upon Notice to the Lender
as provided in Section 9 hereof.
12.10 Consent to Jurisdiction. The Company hereby agrees that any
action or proceeding under the Loan Documents, the Notes or any document
delivered pursuant hereto may be commenced against it in any court of
competent jurisdiction within the State of Minnesota, by service of
process upon the Company by first class registered or certified mail,
return receipt requested, addressed to the Company at its address last
known to the Lender. The Company agrees that any such suit, action or
proceeding arising out of or relating to this Agreement or any other such
document may be instituted in the Hennepin County State District Court or
in the United States District Court for the District of Minnesota at the
option of the Lender; and the Company hereby waives any objection to the
jurisdiction or venue of any such court with respect to, or the
convenience of any court as a forum for, any such suit, action or
proceeding. Nothing herein shall affect the right of the Lender to
accomplish service of process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Company in
any other jurisdiction or court.
12.11 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an
92
original, but all such counterparts shall together constitute but one and
the same instrument.
12.12 Entire Agreement. This Agreement, the Notes and the other
Loan Documents represent the final agreement among the parties hereto and
thereto with respect to the subject matter hereof and thereof, and may
not be contradicted by evidence of prior or contemporaneous oral
agreements among such parties. There are no oral agreements among the
parties with respect to the subject matter hereof and thereof.
12.13 WAIVER OF JURY TRIAL. THE COMPANY AND THE LENDER EACH HEREBY
(a) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE
TRIABLE OF RIGHT BY A JURY, AND (b) WAIVES ANY RIGHT TO TRIAL BY JURY
FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST.
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN, KNOWINGLY AND
VOLUNTARILY, BY THE COMPANY AND THE LENDER, AND THIS WAIVER IS INTENDED
TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE
RIGHT OF A JURY TRIAL WOULD OTHERWISE ACCRUE. THE LENDER AND THE COMPANY
IS EACH HEREBY AUTHORIZED AND REQUESTED TO SUBMIT THIS AGREEMENT TO ANY
COURT HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES HERETO,
SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF THE FOREGOING WAIVER OF THE
RIGHT TO JURY TRIAL. FURTHER, THE COMPANY AND THE LENDER EACH HEREBY
CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE OTHER PARTY, INCLUDING
THE OTHER PARTY'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO
ANY OF ITS REPRESENTATIVES OR AGENTS THAT THE OTHER PARTY WILL NOT SEEK
TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
93
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Its: Executive Vice President
------------------------------------
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:_____________________________________
Its: Director
STATE OF CALIFORNIA )
) ss
COUNTY OF SAN DIEGO )
On March 17, 1999 before me, a Notary Public, personally appeared ▇▇▇ ▇.
▇▇▇▇▇▇▇, the Executive Vice President of ACCREDITED HOME LENDERS, INC., a
California corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ [ILLEGIBLE]
----------------------------------------
Notary Public
(SEAL) My Commission Expires: Dec 29, 2000
[STAMP]
94
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By:_____________________________________
Its:____________________________________
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By: /s/ [ILLEGIBLE]
-------------------------------------
Its: Director
STATE OF __________________________ )
) ss
COUNTY OF _________________________ )
On _____________________, 1999 before me, a Notary Public, personally
appeared ____________________________________, the ________________ of
ACCREDITED HOME LENDERS, INC., a California corporation, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person whose
name is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal.
________________________________________
Notary Public
(SEAL) My Commission Expires:__________________
94
STATE OF California )
) ss
COUNTY OF Los Angeles )
On 03-23-99, 1999 before me, a Notary Public, personally appeared ▇▇▇▇
▇▇▇▇▇▇ ?????, the Director RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ [ILLEGIBLE]
-----------------------------------
Notary Public
(SEAL) My Commission Expires: Sept 17-1999
[STAMP]
95
EXHIBIT A-l
WAREHOUSING PROMISSORY NOTE
$158,000,000 Date: March 17, 1999
FOR VALUE RECEIVED, the undersigned, ACCREDITED HOME LENDERS, INC., a
California corporation (herein called the "Company"), hereby promises to pay to
the order of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender" or, together with its successors and assigns, the "Holder") whose
principal place of business is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as the Holder may designate
from time to time, the principal sum of $158,000,000 or so much thereof as may
be outstanding from time to time pursuant to the Warehousing Credit, Term Loan
and Security Agreement described below, and to pay interest on said principal
sum or such part thereof as shall remain unpaid from time to time, from the date
of each Advance until repaid in full, and all other fees and charges due under
the Agreement, at the rates and at the times set forth in the Agreement. All
payments hereunder shall be made in lawful money of the United States and in
immediately available funds.
This Note is given to evidence an actual warehouse line of credit in the
above amount and is the Warehousing Promissory Note referred to in that certain
Warehousing Credit, Term Loan and Security Agreement (the "Agreement") dated the
date hereof between the Company and the Lender, as the same may be amended or
supplemented from time to time, and is entitled to the benefits thereof.
Reference is hereby made to the Agreement (which is incorporated herein by
reference as fully and with the same effect as if set forth herein at length)
for a description of the Collateral, a statement of the covenants and
agreements, a statement of the rights and remedies and securities afforded
thereby and other matters contained therein. Capitalized terms used herein,
unless otherwise defined herein, shall have the meanings given them in the
Agreement.
This Note may be prepaid in whole or in part at any time without premium or
penalty.
Should this Note be placed in the hands of attorneys for collection, the
Company agrees to pay, in addition to principal and
1
interest, fees and charges due under the Agreement, any and all costs of
collecting this Note, including reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the laws of
the State of Minnesota, without reference to its principles of conflicts of law.
IN WITNESS WHEREOF, the Company has executed this Note as of the day and
year first above written.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By:_____________________________________
Its:____________________________________
STATE OF ___________________ )
) ss
COUNTY OF __________________ )
On _______________________, _____________, before me, a Notary Public,
personally appeared ____________________________________, the
____________________ of ACCREDITED HOME LENDERS, INC., a California corporation,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
________________________________________
Notary Public
(SEAL) My Commission Expires:__________________
2
EXHIBIT A-2
SUBLIMIT PROMISSORY NOTE
$10,500,000 Date: March 17, 1999
FOR VALUE RECEIVED, the undersigned, ACCREDITED HOME LENDERS, INC., a
California corporation (herein called the "Company"), hereby promises to pay to
the order of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender" or, together with its successors and assigns, the "Holder") whose
principal place of business is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as the Holder may designate
from time to time, the principal sum of $10,500,000 or so much thereof as may be
outstanding from time to time pursuant to the Warehousing Credit, Term Loan and
Security Agreement described below, and to pay interest on said principal sum or
such part thereof as shall remain unpaid from time to time, from the date of
each Advance until repaid in full, and all other fees and charges due under the
Agreement, at the rates and at the times set forth in the Agreement. All
payments hereunder shall be made in lawful money of the United States and in
immediately available funds.
This Note is given to evidence an actual line of credit in the above amount
and is the Sublimit Promissory Note referred to in that certain Warehousing
Credit, Term Loan and Security Agreement (the "Agreement") dated the date hereof
between the Company and the Lender, as the same may be amended or supplemented
from time to time, and is entitled to the benefits thereof. Reference is hereby
made to the Agreement (which is incorporated herein by reference as fully and
with the same effect as if set forth herein at length) for a description of the
Collateral, a statement of the covenants and agreements, a statement of the
rights and remedies and securities afforded thereby and other matters contained
therein. Capitalized terms used herein, unless otherwise defined herein, shall
have the meanings given them in the Agreement.
This Note may be prepaid in whole or in part at any time without premium or
penalty.
Should this Note be placed in the hands of attorneys for collection, the
Company agrees to pay, in addition to principal and interest, fees and charges
due under the Agreement, any and all
1
costs of collecting this Note, including reasonable attorneys' fees and
expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the laws of
the State of Minnesota, without reference to its principles of conflicts of law.
IN WITNESS WHEREOF, the Company has executed this Note as of the day and
year first above written.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: ____________________________
Its: ___________________________
STATE OF _____________ )
) ss
COUNTY OF ____________ )
On ________________, ______________, before me, a Notary Public, personally
appeared ____________________, the ______________________of ACCREDITED HOME
LENDERS, INC., a California corporation, personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person whose name is subscribed
to the within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
________________________________
Notary Public
(SEAL) My Commission Expires: _________
2
EXHIBIT A-3
TERM LOAN PROMISSORY NOTE
$40,000,000 Date: March 17, 1999
FOR VALUE RECEIVED, the undersigned, ACCREDITED HOME LENDERS, INC., a
California corporation (herein called the "Company"), hereby promises to pay to
the order of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender" or, together with its successors and assigns, the "Holder") whose
principal place of business is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as the Holder may designate
from time to time, the principal sum of $40,000,000 or so much thereof as may be
outstanding from time to time pursuant to the Warehousing Credit, Term Loan and
Security Agreement described below, and to pay interest on said principal sum or
such part thereof as shall remain unpaid from time to time, from the date of
each Advance until repaid in full, and all other fees and charges due under the
Agreement, at the rates and at the times set forth in the Agreement. All
payments hereunder shall be made in lawful money of the United States and in
immediately available funds.
This Note is given to evidence an actual warehouse line of credit in the
above amount and is the Term Loan Promissory Note referred to in that certain
Warehousing Credit, Term Loan and Security Agreement (the "Agreement") dated the
date hereof between the Company and the Lender, as the same may be amended or
supplemented from time to time, and is entitled to the benefits thereof.
Reference is hereby made to the Agreement (which is incorporated herein by
reference as fully and with the same effect as if set forth herein at length)
for a description of the Collateral, a statement of the covenants and
agreements, a statement of the rights and remedies and securities afforded
thereby and other matters contained therein. Capitalized terms used herein,
unless otherwise defined herein, shall have the meanings given them in the
Agreement.
This Note may be prepaid in whole or in part at any time without premium or
penalty.
Should this Note be placed in the hands of attorneys for collection, the
Company agrees to pay, in addition to principal and
1
interest, fees and charges due under the Agreement, any and all costs of
collecting this Note, including reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the laws of
the State of Minnesota, without reference to its principles of conflicts of law.
IN WITNESS WHEREOF, the Company has executed this Note as of the day and
year first above written.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: ____________________________
Its: ___________________________
STATE OF ____________)
) SS
COUNTY OF ___________)
On ________________, __________, before me, a Notary Public, personally
appeared __________________________________ the _____________________ of
ACCREDITED HOME LENDERS, INC., a California corporation, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person whose
name is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal.
________________________________
Notary Public
(SEAL) My Commission Expires: _________
2
EXHIBIT B
INTENTIONALLY OMITTED
EXHIBIT C-PRE
PREMIUM ADVANCE REQUEST
Date:____________
Reference is made to that certain Warehousing Credit, Term Loan and
Security Agreement between ACCREDITED HOME LENDERS, INC., a California
corporation (the "Company") and RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation (the "Lender"), dated as of March 17, 1999 (as the same may be
amended, modified, supplemented, renewed or restated from time to time, the
"Agreement"). All capitalized terms used herein and all Section numbers given
herein refer to those terms and Sections set forth in the Agreement. This
Premium Advance Request is submitted to the Lender pursuant to Section 2.2(a) of
the Agreement.
The undersigned hereby requests a Premium Advance in the aggregate
principal amount of $_________ to be made on ________, 199__. After giving
effect to such Premium Advance, the aggregate principal balance of all
outstanding Premium Advances will be $___________.
The aggregate Mortgage Note Amount of all Eligible Subject Loans pledged
under the Agreement as of the date hereof is $____________. Three percent of
such amount is $___________ ("Amount A"). The Residual Income Value of the
amount by which the Aggregate Payment Obligation will increase upon the sale of
such Eligible Subject Loans pursuant to a Shared Execution Forward Commitment is
___% (the lesser of (i) ___%, the percentage value of the most recent addition
to the Residual Income Value of the Aggregate Payment Obligation or (ii) ___%,
the most recent percentage value of the entire Aggregate Payment Obligation) of
the aggregate Mortgage Note Amount of all Eligible Subject Loans pledged under
the Agreement, or $________ ("Amount B"). Sixty percent of Amount B is $_______
("Amount C"). The lesser of Amount A or Amount C is $_________. The Company
represents and warrants that it has no reason to believe that such amounts are
incorrect. The amount of the Premium Advances requested are not more than the
amount permitted by the Agreement to be borrowed pursuant to this Advance
Request.
The Company hereby certifies that no Default or Event of Default has
occurred and is continuing and that all of the Company's representations and
warranties in this Advance Request and the Agreement are currently true and
correct and (to the extent applicable on or after their respective dates) are
hereby republished. Since the Statement Date, there has been no material adverse
change in the business, financial condition or results of operation of the
Company and its Subsidiaries, taken as a whole. The Company acknowledges that
the Lender will rely on the truth of each statement in this Advance Request in
making the requested Premium Advances.
METHOD OF ADVANCE
[_] Wire Transfer
Amount of Wire: _______________ Date of Wire: ______________________
Credit Acct. No.: _____________ Credit Acct. Name: _________________
ABA No.: ______________________ Bank Name: _________________________
Account to Debit: _____________ City & State: ______________________
Ref: _______________ Advise: ___________________ Phone: __________________
ACCREDITED HOME LENDERS, INC.,
a California corporation
By: _______________________________________
Its: ______________________________________
================================================================================
FOR RFC INTERNAL USE ONLY
-------------------------
Repetitive Code:____________________________ Date:_____________________________
Wire Initiator's Initials: Wire Verifier's Initials:
================================================================================
EXHIBIT C-REO
REQUEST FOR ADVANCE REO MORTGAGE OR RECEIVABLE
Mortgage Company: ACCREDITED HOME LENDERS, INC.
REO Property Loan Number: _______________________
Address: _________________________ Reviewed By: _______________________
_________________________ Warehouse Date:_______________________
_________________________ Effective Date:_______________________
Requested Warehouse Amt:____________
METHOD OF ADVANCE
[_] Wire Transfer
Amount of Wire: _____________________ Date of Wire: _________________
Credit Acct. No.: ___________________ Credit Acct. Name: ____________
ABA No.: ____________________________ Bank Name: ____________________
City & State:__________________
Account to Debit: ___________________
Ref: __________________ Advise: ___________________ Phone: _____________
REQUIRED DOCUMENTATION
Attached please find the following documents in connection with the above
request (Please check attached documents below):
Right
[_] Original recorded or certified copy of REO Mortgage in favor of Lender,
together with recording information or recording instructions (REO Advance
only)
[_] Original property appraisal
Left
[_] Request for Advance (original and one (1) copy)
[_] BPO
[_] Copies of checks for recording fees and registration taxes
[_] Proposed disposition plan for REO Property
For the new value this day received, ACCREDITED HOME LENDERS, INC. (the
"Company"), hereby creates and grants in favor and for the benefit of
RESIDENTIAL FUNDING CORPORATION (the "Lender"), a security interest in and to
the REO Property described above, together with all related Collateral, as more
particularly described in the Warehousing Credit, Term Loan and Security
Agreement (as amended, supplemented or otherwise modified) between the Company
and the Lender.
ACCREDITED HOME LENDERS, INC.
Authorized Signature:
================================================================================
FOR RFC INTERNAL USE ONLY
-------------------------
Repetitive Code:___________________________ Date: _________________________
Wire Initiator's Initials:_________________ Wire Verifier's Initials:______
================================================================================
EXHIBIT C-SF
REQUEST FOR ADVANCE SINGLE FAMILY MORTGAGE LOAN
Mortgage Company: ACCREDITED HOME LENDERS, INC. and ACCREDITED HOME CAPITAL,
INC.
Mortgagor: _______________________ Loan Number: _______________________
_______________________ Reviewed By: _______________________
Address: _______________________ Warehouse Date: _______________________
_______________________ Effective Date: _______________________
Status: Committed ______________ Loan Type: Prime _________________________
Uncommitted ____________ Subprime __________ Grade _____
Wet Settlement _________ "D" ___________________________
Received _______________ Government: FHA _____ VA _____
Open-end Second ________ Credit Score ____
Closed-end Second ______ RFC ___________________________
3rd Party Originated ___ Fixed _________ Term _________
Section 32 _____________ ARM ___________ Type _________
Balloon _______ Type _________
Nonperforming _________________
Eligible Subject Loan _________
Mortgage Note Amount: ____________ Interest Rate: ___________________________
Mortgage Note Date: ______________ Requested Warehouse Amt: _________________
Investor: ________________________ Expiration Date: _________________________
Purchase Commitment No: __________ Title Company: ___________________________
Committed Purchase Price: ________
METHOD OF ADVANCE
( ) Wire Transfer
Amount of Wire: ______________ Date of Wire: ______________________
Credit Acct. No.: ____________ Credit Acct. Name: _________________
ABA No.: _____________________ Bank Name: _________________________
Account to Debit: ____________ City & State: ______________________
Ref: _______________ Advise: _________________ Phone: __________________
REQUIRED DOCUMENTATION
Attached please find the following documents in connection with the above
request (Please check attached documents below):
Right
( ) Original and 1 copy of Mortgage Note
( ) Certified copy of Mortgage
( ) Section 32 Compliance Documents (if applicable)
( ) *Copy of Investor Purchase Commitment (or satisfactory evidence thereof)
Left
( ) *Request for Advance (original and 1 copy)
( ) *Copy of settlement or funding check (if applicable)
( ) Recordable assignment of Mortgage
( ) Certified copies of interim assignments of Mortgage (if applicable)
Please Note: Items designated with the "*" are required prior to a Wet
Settlement Advance.
For the new value this day received, ACCREDITED HOME LENDERS, INC. (the
"Company"), hereby creates and grants in favor and for the benefit of
RESIDENTIAL FUNDING CORPORATION (the "Lender"), a security interest in and to
the Mortgage Loan described above, together with all related Collateral, as more
particularly described in the Warehousing Credit, Term Loan and Security
Agreement (as amended, supplemented or otherwise modified) between the Company
and the Lender.
ACCREDITED HOME LENDERS, INC.
Authorized Signature: _____________________________
EXHIBIT C-TL
TERM LOAN ADVANCE REQUEST
Date:______________, 19____
Reference is made to that certain Warehousing Credit, Term Loan and
Security Agreement between ACCREDITED HOME LENDERS, INC., a California
corporation (the "Company") and RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation (the "Lender"), dated as of March 17, 1999 (as the same may be
amended, modified, supplemented, renewed or restated from time to time, the
"Agreement"). All capitalized terms used herein and all Section numbers given
herein refer to those terms and Sections set forth in the Agreement. This Term
Loan Advance Request is submitted to the Lender pursuant to Section 2.3(a).
The undersigned hereby requests a Term Loan Advance in the aggregate
principal amount of $___________ to be made on _______________, 19____, of which
$___________ will be used to repay Premium Advances.
The Term Loan Collateral Value of the Aggregate Payment Obligation and
Interest Only Certificates arising from the sale of Eligible Subject Loans to
RFC since the date of the preceding Term Loan Advance is $___________. The Term
Loan Collateral Value of all Aggregate Payment Obligation and Interest Only
Certificates included in the Collateral is $___________. The outstanding
principal balance of all Term Loan Advances, before giving effect to the
requested Term Loan Advance, is $___________. The outstanding principal balance
of all Premium Advances, before giving effect to the repayment of Premium
Advances with the proceeds of the requested Term Loan Advance, is $___________.
The Company represents and warrants that it has no reason to believe that any of
the foregoing amounts are incorrect. The principal amount of the Term Loan
Advance will not exceed any of the limitations set forth in the Agreement.
The Company hereby certifies that no Default or Event of Default has
occurred and is continuing and that all of the Company's representations and
warranties in this Advance Request and the Agreement are currently true and
correct and (to the extent applicable on or after their respective dates) are
hereby republished. Since the Statement Date, there has been no material adverse
change in the business, financial condition or results of operation of the
Company and its Subsidiaries, taken as a whole. The Company acknowledges that
the Lender will rely on the truth of each statement in this Advance Request in
making the requested Premium Advances.
EXHIBIT C-TL
Page 2
METHOD OF ADVANCE
( ) Wire Transfer
Amount of Wire:_____________________ Date of Wire:______________________
Credit Acct. No.:___________________ Credit Acct. Name:_________________
ABA No.:____________________________ Bank Name:_________________________
Account to Debit:___________________ City & State:______________________
Ref: _____________ Advise:________________Phone:___________________________
ACCREDITED HOME LENDERS, INC.,
a California corporation
By:________________________________
Its:_______________________________
EXHIBIT D-NP/REO
PROCEDURES AND DOCUMENTATION FOR WAREHOUSING
NONPERFORMING MORTGAGE LOANS AND REO PROPERTIES
The following procedures and documentation requirements must be observed in
all respects by the Company. All documents must be satisfactory to the Lender in
its sole discretion. Terms used below, which are not otherwise defined, shall
have the meanings given them in the Agreement. The HUD, ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇
Mac form numbers referred to herein are for convenience only and the Company
shall use the equivalent forms required at the time of delivery of the Mortgage
Loans or Mortgage-backed Securities. All Requests for Advance (Exhibit C-SF or
Exhibit C-REO) and Collateral Documents, should be submitted to the Lender in a
top tabbed, legal size manila file folder, hole-punched and acco-fastened in the
order specified in the Request for Advance (Exhibit C-SF or Exhibit C-REO). Each
folder should be labelled with the mortgagor name(s), Company loan number and
Company name.
I. Prior to making a Nonperforming Advance, the Lender must receive the
following two (2) Business Days prior to such Nonperforming Advance.
(1) Original Request for Advance against Single Family Mortgage Loans
(Exhibit C-SF) and one (1) copy of same.
(2) Investor repurchase demand letter (if applicable).
(3) Summary of Mortgage Loan documentation or Investor problems, expected
cure period, and current payment history.
(4) If not previously delivered to the Lender, original signed
Mortgage Note, endorsed by the Company in blank with corresponding
interim endorsements, if applicable, and one copy of same.
(5) If not previously delivered to the Lender, original or certified true
(by recorder's office or escrow/title company) copy of the Mortgage.
1
(6) If not previously delivered to the Lender, original or certified true
(by recorder's office or escrow/title company) copies of all interim
assignments of the Mortgage. (If an interim assignment has not been
recorded or sent for recordation, such original interim assignment).
Mortgage Note must bear corresponding endorsements.
(7) If not previously delivered to the Lender, an assignment of the
Mortgage, endorsed by the Company in blank, in recordable form but
unrecorded.
(8) Original or copy of ALTA Mortgagee's Policy of Title Insurance or
equivalent thereto.
(9) Original VA Loan Guaranty Certificate, FHA Mortgage Insurance
Certificate, or copy of Private Mortgage Insurance Certificate (if
applicable).
(10) Original Appraisal of Mortgaged Property.
(11) Brokers Price Opinion.
II. Prior to the making of an REO Advance, the Lender must receive the
following five (5) Business Days prior to such REO Advance.
(1) Original Request for Advance against REO Property (Exhibit C-REO).
(2) Original or certified true (by recorder's office) copy of REO Mortgage
in favor of Lender, together with recording information or recording
instructions.
(3) Original Appraisal of Mortgaged Property.
(4) Brokers Price Opinion.
(5) Proposed disposition plan for REO Property.
(6) Evidence that recording fees and registration taxes have been paid.
2
(7) ALTA Mortgagee's Policy of Title Insurance or equivalent thereto
obtained in connection with the loan closing.
(8) Preliminary title report (or the equivalent) dated no more than 30
days prior to the date of REO Advance evidencing Company's ownership
of REO Property.
III. The Lender exclusively shall deliver the Mortgage Notes and other original
Collateral Documents evidencing Pledged Mortgages or Pledged Securities and
related pool documents to the Investor, pool custodian or attorneys
conducting foreclosure sales. Unless otherwise agreed in writing the
procedures set forth in Exhibit D-SF are to be followed for deliveries of
Pledged Mortgages to Investors or Pool Custodian.
The following procedures are to be followed for deliveries of Pledged
Mortgages to attorneys conducting a foreclosure sale:
No later than one (1) Business Day prior to the requested shipment
date and no later than one (1) Business Day prior to required delivery
date to the Attorney conducting the foreclosure sale, the Lender must
receive signed shipping instructions for the delivery of the Pledged
Mortgages including the following:
(1) Name and address of the office of the attorney to which the
Collateral Documents are to be shipped, the desired shipping date
and the preferred method of delivery;
(2) Names of Mortgagor and Mortgage Note Amounts of Pledged Mortgages
to be shipped; and
(3) Confirmation that the attorney will execute and return the bailee
letter (acknowledged instructions from the Company to do so).
Upon instruction by the Company, the Lender will complete the endorsement of the
Mortgage Note and make arrangements for the delivery of the original Collateral
Documents evidencing Pledged Mortgages or Pledged Securities and related
original pool documents with the appropriate bailee letter to the Investor,
Approved Custodian, other pool custodian or attorney conducting a
3
foreclosure sale. Upon receipt of Mortgage-backed Securities, the Lender will
cause such Mortgage-backed Securities to be delivered to the Investor which
issued the Purchase Commitment. Mortgage-backed Securities will be released to
the Investor only upon payment of the purchase proceeds to the Lender. Cash
proceeds of sales of Pledged Mortgages and Pledged Securities shall be applied
to related Advances outstanding under the Commitment. Provided no Default
exists, the Lender shall return any excess proceeds of the sale of Mortgage
Loans or Mortgage-backed Securities to the Company, unless otherwise instructed
in writing.
4
EXHIBIT D-SF
PROCEDURES AND DOCUMENTATION FOR
WAREHOUSING SINGLE FAMILY MORTGAGE LOANS
The following procedures and documentation requirements must be observed in
all respects by the Company. All documents must be satisfactory to the Lender in
its sole discretion. Terms used below, which are not otherwise defined, shall
have the meanings given them in the Agreement. The HUD, ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇
Mac form numbers referred to herein are for convenience only and the Company
shall use the equivalent forms required at the time of delivery of the Mortgage
Loans or Mortgage-backed Securities. All Requests for Advance and Collateral
Documents, should be submitted to the Lender in a manner satisfactory to the
Lender. If a Wet Settlement Advance is being requested, the Request for Advance
and required Collateral Documents should be submitted in accordance with the
above instructions. The remaining Collateral Documents should be submitted with
a cover letter identifying the mortgagor name(s) and Company loan number.
I. Prior to making a Wet Settlement Advance, the Lender must receive the
following:
(1) Estimate of the amount of the requested Advance one (1) Business Day
prior to such Advance.
(2) copy of settlement or funding check issued to the escrow/title
company, if applicable.
(3) Original Request for Advance against Single Family Mortgage Loans
(Exhibit C-SF) and one (1) copy of same.
(4) Copy of the Purchase Commitment or satisfactory evidence thereof, if
applicable.
The following must be received by the Lender within seven (7) Business Days
of the date of the Wet Settlement Advance:
(5) Original signed Mortgage Note, endorsed by the Company in blank with
corresponding interim endorsements, if applicable, and one copy of
same.
1
(6) Copy of the Mortgage certified true by the escrow/title company.
(7) Copies of all interim assignments of the Mortgage certified true by
the escrow/title company (recorded or sent for recordation). Mortgage
Note must bear corresponding endorsements.
(8) An assignment of the Mortgage, endorsed by the Company in blank, in
recordable form but unrecorded.
(9) Completed Company Worksheet Concerning Applicability of Section 32 of
Regulation Z (12 CFR Section 226.32) and, if Section 32 applies,
copies of the disclosure and other related documentation delivered to
the mortgagor, or executed by the mortgagor, evidencing compliance
with Section 32 (if applicable).
II. Prior to the making of an Advance (other than a Wet Settlement Advance),
the Lender must receive all of the Collateral Documents listed in Section I
above.
III. The Lender exclusively shall deliver the Mortgage Notes and other original
Collateral Documents evidencing Pledged Mortgages or Pledged Securities and
related pool documents to the Investor or pool custodian, unless otherwise
agreed in writing.
A. The following procedures are to be followed for deliveries of Pledged
Mortgages:
No later than one (1) Business Dav prior to the requested shipment date and
no later than one (1) Business Dav prior to the expiration date of the
Purchase Commitment, the Lender must receive the following:
(1) Signed shipping instructions for the delivery of the Pledged Mortgages
including the following:
(a) Name and address of the office of the Investor to which the loan
documents are to be shipped, the desired shipping date and the
preferred method of delivery;
(b) Instructions for endorsement of the Mortgage Note;
2
(c) Names of mortgagor(s), Mortgage Note Amounts of Pledged Mortgages
to be shipped and the Company's loan number; and
(d) Commitment number and expiration date of the Purchase Commitment.
(2) For deliveries of Pledged Mortgages to ▇▇▇▇▇▇ Mae for cash purchase,
the following additional documents are required:
(a) Copy of Loan Schedule (▇▇▇▇▇▇ ▇▇▇ Form 1068 or 1069) showing the
Lender's designated ▇▇▇▇▇▇ Mae payee code as recipient of the
loan purchase proceeds.
(3) For deliveries of Pledged Mortgages to ▇▇▇▇▇▇▇ Mac for cash purchase,
the following additional documents are required:
(a) Original completed Warehouse Lender Release of Security Interest
(▇▇▇▇▇▇▇ Mac Form 996) to be executed by the Lender, designating
the Lender as the Warehouse Lender and showing the Cash
Collateral Account designated by the Lender as the receiving
account for loan purchase proceeds.
(b) Copy of Wire Transfer Authorization for a Cash Warehouse Delivery
(▇▇▇▇▇▇▇ Mac Form 987), designating the Lender as the Warehouse
Lender and showing the Cash Collateral Account designated by the
Lender as the receiving account for loan purchase proceeds.
B. In the event Pledged Mortgages are delivered to a pool custodian, other
than an Approved Custodian, payment of the related Advance is required
within two (2) Business Days of shipment.
The following procedures are to be followed for deliveries of Pledged
Mortgages to Approved Custodians:
No later than one (1) Business Day prior to the requested shipment date
and no later than one (1) Business Day prior to required delivery date to
the Approved Custodian, the Lender must receive the following:
3
(1) Signed shipping instructions for the delivery of the Pledged Mortgages
to the Approved Custodian including the following:
(a) Name and address of the office of the Approved Custodian to which
the loan documents are to be shipped, the desired shipping date
and the preferred method of delivery;
(b) Instructions for endorsement of the Mortgage Note;
(c) Names of mortgagor(s) and Mortgage Note Amounts of Pledged
Mortgages to be shipped and the Company's loan number; and
(d) Commitment number and expiration date of the Purchase Commitment
for the Pledged Securities.
(2) For ▇▇▇▇▇▇ Mae Mortgage-backed Securities issuance, the following
additional documents are required:
(a) Copy of Schedule of Mortgages (▇▇▇▇▇▇ ▇▇▇ Form 2005 or 2025).
(b) Copy of Delivery Schedule (▇▇▇▇▇▇ Mae Form 2014), instructing
▇▇▇▇▇▇ ▇▇▇ to issue the Mortgage-backed Securities in the name of
the Company with the Lender as pledgee and to deliver the
Mortgage-backed Securities to the Lender's custody account at The
Chase Manhattan Bank (CHASE NYC/CUST/G54026) and bearing the
following instructions: "These instructions may not be changed
without the prior written consent of Residential Funding
Corporation, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Director or ▇▇▇▇▇ ▇▇▇▇▇,
Director."
(3) For ▇▇▇▇▇▇▇ Mac Mortgage-backed Securities issuance, the following
additional documents are required:
(a) Copy of Settlement Information and Delivery Authorization
(▇▇▇▇▇▇▇ Mac Form 939), designating the Lender as the Warehouse
Lender and instructing ▇▇▇▇▇▇▇ Mac to deliver the Mortgage-backed
Securities to the Lender's custody account at The Chase Manhattan
Bank (CHASE NYC/CUST/G54026).
(b) Original Warehouse Lender Release of Security Interest (▇▇▇▇▇▇▇
Mac Form 996) to be executed by the Lender, designating the
Lender as the Warehouse Lender and instructing ▇▇▇▇▇▇▇ Mac to
deliver the Mortgage-backed Securities to the Lender's custody
account at The Chase Manhattan Bank (CHASE NYC/CUST/G54026).
4
(4) For ▇▇▇▇▇▇ ▇▇▇ Mortgage-backed Securities issuance, the following
additional documents are required:
(a) Signed original Schedule of Mortgages (HUD Form 11706).
(b) Signed original Schedule of Subscribers (HUD Form 11705)
instructing ▇▇▇▇▇▇ Mae to issue the Mortgage-backed Securities in
the name of the Company and designating The Chase Manhattan Bank
as Agent for the Lender as the subscriber, using the following
language: THE CHASE MANHATTAN BANK AS AGENT FOR RESIDENTIAL
FUNDING CORPORATION SEG ACCT MANUF/CUST/G54026). The following
instructions must also be included on the form: "These
instructions may not be changed without the prior written consent
of Residential Funding Corporation, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Director
or ▇▇▇▇▇ ▇▇▇▇▇, Director."
(c) Completed original Release of Security Interest (HUD Form 11711A)
to be executed by the Lender.
(5) No later than two (2) Business Days prior to the Settlement Date for
the Mortgage-backed Securities, the Lender must receive signed
Securities Delivery Instructions form attached hereto as Schedule I.
Upon instruction by the Company, the Lender will complete the endorsement of the
Mortgage Note and make arrangements for the delivery of the original Collateral
Documents evidencing Pledged Mortgages or Pledged Securities and related
original pool documents with the appropriate bailee letter to the Investor,
Approved Custodian, or other pool custodian. Upon receipt of Mortgage-backed
Securities, the Lender will cause such Mortgage-backed Securities to be
delivered to the Investor which issued the Purchase Commitment. Mortgage-backed
Securities will be released to the Investor only upon payment of the purchase
proceeds to the Lender. Cash proceeds of sales of Pledged Mortgages and Pledged
Securities shall be applied to related Advances outstanding under the
Commitment. Provided no Default exists, the Lender shall return any excess
proceeds of the sale of Mortgage Loans or Mortgage-backed Securities to the
Company, unless otherwise instructed in writing.
5
SCHEDULE I
RESIDENTIAL FUNDING CORPORATION
WAREHOUSING LENDING DIVISION
Security Delivery Instructions
INSTRUCTIONS MUST BE RECEIVED TWO (2) BUSINESS DAYS IN ADVANCE OF
PICK-UP/DELIVERY
BOOK-ENTRY DATE: ____________________ SETTLEMENT DATE: __________________
ISSUER: _____________________________ SECURITY: $ _______________________
NO. OF CERTIFICATES: ________________ 1) ____________
2) ____________
3) ____________
CUSIP # ___________
Pool # ___________ MI# ___________ Coupon Rate: ___________________________
Issue Date:(M/D/Y) __________________ Maturity Date:(M/D/Y) _________________
POOL TYPE (circle one):
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ ▇▇▇ I ▇▇▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇ Mac: FIXED ARM
DISCOUNT NOTE
▇▇▇▇▇▇ Mae: FIXED ARM
DISCOUNT NOTE DEBENTURES REMIC
________________________________________________________________________________
DELIVER TO: _________________________ ( ) Versus Payment
_________________________ DVP AMT. $ ___________________________
_________________________ ( ) Free Delivery
DELIVER TO: _________________________ ( ) Versus Payment
_________________________ DVP AMT. $ ___________________________
_________________________ ( ) Free Delivery
DELIVER TO: _________________________ ( ) Versus Payment
_________________________ DVP AMT. $ ___________________________
_________________________ ( ) Free Delivery
________________________________________________________________________________
AUTHORIZED SIGNATURE: __________________________________________________________
TITLE: _________________________________________________________________
EXHIBIT E
SCHEDULE OF SERVICING CONTRACTS
FOR
THE BORROWER'S SERVICING PORTFOLIO
Pooling and Servicing Agreement dated as of September 1, 1996, as amended by
Amendment No. 1 to Pooling and Servicing Agreement dated as of July 1, 1998,
each between the Borrower and Bankers Trust Company and each relating to
Accredited Mortgage Loan Trust 1996-1.
EXHIBIT F
RESIDENTIAL FUNDING CORPORATION
SUBORDINATION OF DEBT AGREEMENT
____________________________, 19______
To: Residential Funding Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as the "Lender")
The undersigned (hereinafter referred to as the "Creditor"), creditor of
ACCREDITED HOME LENDERS, INC., a California corporation (hereinafter referred to
as the "Company"), desires that the Lender extend or continue to extend such
financial accommodations to the Company as the Company may require and as the
Lender may deem proper. For the purpose of inducing the Lender to grant,
continue or renew such financial accommodations, and in consideration thereof,
the Creditor agrees as follows:
1. That at the present time the Company is indebted to the Creditor in the
principal amounts set forth below:
TYPE OF FACILITY OR LOAN PRINCIPAL AMOUNT OF DEBT
FROM THE COMPANY
________________________ _______________________
________________________ _______________________
________________________ _______________________
________________________ _______________________
________________________ _____________________________________
(Notes, if any, are to be delivered to the Lender)
2. That all claims of the Creditor against the Company now or hereafter
existing are and shall be at all times subject and
1
subordinate to any and all claims now or hereafter which the Lender may
have against the Company (and all extensions, renewals, modifications,
replacements and substitutions of or for the same), for so long as any such
claim or claims of the Lender shall exist.
3. That the Creditor shall not (a) except to the extent expressly permitted in
Section 4 hereof, receive payment of or collect, in whole or in part, or
▇▇▇ upon, any claim or claims now or hereafter existing which the Creditor
may hold against the Company; (b) sell, assign, transfer, pledge,
hypothecate or encumber such claim or claims except subject expressly to
this Agreement; (c) enforce any lien the Creditor may now or in the future
have on any debt owing by the Company to the Creditor; and/or (d) join in
any petition in bankruptcy, assignment for the benefit of creditors or
creditors' agreement, except as directed by the Lender, so long as any
claim of the Lender against the Company, or commitment of the Lender to
extend credit to the Company, is in existence.
4. So long as no event described in clauses (a) through (d) of Section 6 below
(a "Liquidation Event") shall have occurred and no default shall have
occurred in payment or performance of any obligation of the Company to the
Lender, regularly scheduled payments of interest and principal on the
claims of the Creditor may be made as and when the same become due and
payable (it being understood that no prepayment shall be made of such
claims and no modification or acceleration, for default or otherwise, of
such maturity dates shall be permitted). After the occurrence of a
Liquidation Event or of default in payment or performance of any obligation
of the Company to the Lender, no interest and no principal payments on the
claims of the Creditor shall be made without the prior written consent of
the Lender. The subordination of claims of the Creditor hereunder shall
remain in effect so long as there shall be outstanding any obligation of
the Company to the Lender (for this purpose, the Company shall be deemed
obligated to the Lender so long as the Lender shall have outstanding any
commitment to make any loan to the Company, whether or not any such loan
shall have been made or advanced).
5. In the event that any Creditor receives a payment from the Company in
violation of the terms of this Agreement, such
2
Creditor (a) shall hold such money in trust for the benefit of Lender, (b)
shall segregate such payment from (and shall not commingle such payment
with any of) the other funds of such Creditor, and (c) shall forthwith
remit such payment to Lender in the exact form received (but with any
necessary endorsement).
6. In case of (a) any assignment by the Company for the benefit of creditors,
(b) any bankruptcy proceedings instituted by or against the Company, (c)
the appointment of any receiver for the Company's business or assets, or
(d) any dissolution or winding up of the affairs of the Company, the
Company and any assignee, trustee in bankruptcy, receiver, or other person
or persons in charge, are hereby directed to pay to the Lender the full
amount of the Lender's claim against the Company before making any payment
of principal or interest to the Creditor and the Creditor hereby sells,
transfers, sets over and assigns to the Lender all claims the Creditor may
now or hereafter have against the Company and in any security therefor, and
the proceeds thereof, and all rights to any payments, dividends or other
distributions arising therefrom. If the Creditor does not file a proper
claim or proof of debt in the form required in such proceeding prior to
thirty (30) days before the expiration of the time to file such claim in
such proceedings, then the Lender has the right (but no obligation) to do
so and is hereby authorized to file an appropriate claim or claims for and
on behalf of the Creditor.
7. For violation of this Agreement, the Creditor shall be liable to the Lender
for all loss and damage sustained by reason of such breach, and upon any
such violation, the Lender may accelerate the maturity of its claims
against the Company, at the Lender's option.
8. The Creditor will, at any time and from time to time, promptly execute and
deliver all further instruments and documents, and take all further action,
that may be reasonably necessary in order to protect any right or interest
granted hereby or to enable the Lender to exercise and enforce its rights
and remedies hereunder.
9. The Creditor will not amend, extend or in any way modify the terms of its
claims against the Company, as such terms exist as of the date of this
Agreement, without the prior written
3
consent of the Lender. The Creditor agrees to provide to the Lender, upon
the occurrence thereof, notice of the existence of any event of default
(however defined or described) under any document or agreement relating to
its claims against the Company, or any condition, act or event, which with
the giving of notice or the passage of time or both would constitute an
event of default (however defined or described) thereunder.
10. All rights and interest of the Lender hereunder, and all agreements and
obligations of the Creditor hereunder, shall remain in full force and
effect irrespective of:
(a) any sale, assignment, pledge, encumbrance or other disposition of
the claims of the Lender against the Company (the "Senior Claims") and/or
any document or instrument executed in connection therewith;
(b) any change in the time, manner or place of payment of, or in any
other terms of, all or any of the Senior Claims, or any refinancing
thereof, or any other amendment, modification, extension or renewal of or
waiver of or any consent to departure from any document or instrument
relating thereto, including, without limitation, changes in the terms of
the repayment of loan proceeds, modifications, extensions or renewals of
payment dates, changes in interest rate or the advancement of additional
funds by the Lender in its discretion; or
(c) any exchange, release or nonperfection of any collateral, or any
release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Senior Claims.
11. This Agreement shall continue to be effective or be reinstated, as the case
may be, if at any time any payment or performance of all or any portion of
the Senior Claims is rescinded or must otherwise be returned by the Lender
or any other party to the documents relating thereto upon the insolvency,
bankruptcy or reorganization of any such party or otherwise, all as though
such payment had not been made.
12. The Creditor hereby waives promptness, diligence, notice of acceptance and
any other notice with respect to this Agreement and any requirement that
the Lender protect, secure, perfect
4
or insure any security interest or lien or any property subject thereto or
exhaust any right or take any action against the Creditor or any other
person or entity or any collateral.
13. No failure on the part of the Lender to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
14. No amendment or waiver of any provision of this Agreement nor consent to
any departure by the Creditor therefrom shall in any event be effective
unless the same shall be in writing and signed by the Lender, and then such
waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
15. The Creditor agrees to pay upon demand, to the Lender the amount of any and
all expenses, including the reasonable fees and expenses of its counsel and
all court costs and other reasonable litigation expenses, including but not
limited to expert witness fees, document copying expenses, exhibit
preparation costs, and courier, postage and communication expenses, which
the Lender may incur in connection with the exercise or enforcement of any
of its rights or interest hereunder.
16. All notices, request and demands that may be required or otherwise provided
for or contemplated under the terms of this Agreement shall, whether or not
so stated, be in writing, and shall be given by any of the following means:
(a) personal delivery; (b) reputable overnight courier service; or (c)
registered or certified first class mail, return receipt requested. Any
notice, request or demand sent pursuant to clause (a) above shall be deemed
received upon personal delivery, and if sent pursuant to clause (b) shall
be deemed received on the next business day following delivery to the
courier service, and if sent pursuant to clause (c) shall be deemed
received three (3) days following deposit in the mail.
The addresses for notices are as follows:
Accredited: 3/17/99
5
If to the Creditor, addressed to:
______________________________________
______________________________________
______________________________________
If to the Lender, addressed to:
Residential Funding Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇.,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇, Director
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Such addresses may be changed by written notice to the other parties given
in the manner provided above.
17. This Agreement shall be governed in all respects by the laws of the State
of Minnesota and shall be binding upon and shall inure to the benefit of
the Creditor, the Lender and the Company, and their respective heirs,
executors, administrators, personal representatives, successors and
assigns. This Agreement and any claim or claims of the Lender pursuant
hereto may be assigned by the Lender, in whole or in part, at any time,
without notice to the Creditor or the Company.
_______________________________
(Creditor)
6
[THE FOLLOWING ACKNOWLEDGEMENT IS TO BE USED FOR A CORPORATION.]
STATE OF _______________ )
) ss
COUNTY OF ______________ )
On _____________________, 19___ before me, a Notary Public, personally
appeared __________________________, the ____________________ of
_____________________, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
_________________________________
Notary Public
(SEAL)
My Commission Expires:___________
[THE FOLLOWING ACKNOWLEDGEMENT IS TO BE USED FOR AN INDIVIDUAL.]
STATE OF _______________ )
) ss
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this ____ day of
_______________, 19__, by _______________________.
_________________________________
Notary Public
My Commission Expires:___________
7
ACCEPTANCE OF SUBORDINATION OF DEBT
AGREEMENT BY THE COMPANY
The Company named in the Subordination of Debt Agreement set forth
hereinbefore, hereby (i) represents and warrants to the Lender that it is
presently indebted to the Creditor executing said Subordination of Debt
Agreement in the aggregate principal amount of ______________________________
Dollars ($_______________________); and (ii) accepts and consents to the
Subordination of Debt Agreement, and agrees to be bound by all of the provisions
thereof and to recognize all priorities and other rights granted thereby to
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation, its successors and
assigns, and to perform in accordance therewith.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By:_____________________________________________________________
Its:____________________________________________________________
Dated:_________________________________
8
EXHIBIT G
SUBSIDIARIES
The Borrower's sole Subsidiary is Accredited Home Capital, Inc., a Delaware
corporation whose principal place of business is located ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, which is qualified as a corporation in
California, and the outstanding capital stock of which is owned entirely by the
Borrower.
EXHIBIT H
FORM OF OPINION OF COUNSEL
Residential Funding Corporation
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: (1) $87,500,000 Warehousing Loan (the "Warehousing Loan") and $40,000,000
Term Loan (the "Term Loan") under Warehousing Credit, Term Loan and
Security Agreement (the "Credit and Term Loan Agreement") by and between
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender") and
ACCREDITED HOME LENDERS, INC., a California corporation (the "Company") and
secured by the "Collateral" (as defined in the Agreement).
(2) $_________ multiple advance convertible loan (the "Convertible Debt")
under Loan and Security Agreement (Convertible Debt) (the "Convertible Debt
Agreement") by and between the Lender and the Company, convertible into the
Applicable Conversion Percentage (as defined in the Convertible Debt
Agreement) of the capital stock of the Company and secured by the
Collateral.
(3) Letter agreement (the "Shared Execution Forward Commitment") pursuant
to which the Lender agrees to purchase from the Company, and the Company
agrees to sell to the Lender, "Eligible Subject Loans" (as defined therein)
on the terms and subject to the conditions set forth therein.
Ladies and Gentlemen:
We are special counsel to the Company in connection with the Warehousing
Loan, the Term Loan, the Convertible Debt and the Shared Execution Forward
Commitment (collectively, the "Transactions"). As counsel, we have prepared
and/or examined the following documents:
1
1. Executed copy of the Warehousing Promissory Note, dated March _____,
1999, made by the Company payable to the order of the Lender, in the
principal amount of $87,500,000.
2. Executed copy of the Sublimit Promissory Note, dated March _____, 1999,
made by the Company payable to the order of the Lender, in the principal
amount of $10,500,000.
3. Executed copy of the Term Loan Promissory Note, dated March _____, 1999,
made by the Company payable to the order of the Lender, in the principal
amount of $40,000,000.
4. Executed copy of the Warehousing Credit, Term Loan and Security Agreement
by and between the Company and the Lender, dated March _____, 1999 (the
"Credit and Term Loan Agreement").
5. Undated Amended UCC Financing Statements perfecting a security interest
in collateral, tangible and intangible.
6. Executed copy of the Floating Rate Convertible Debenture dated March
_____, 1999, made by the Company and payable to the order of the Lender
in the principal amount of $_______.
7. Executed copy of the Convertible Debt Agreement.
8. Executed copy of the Shared Execution Forward Commitment.
9. The Articles of Incorporation of the Company, together with amendments
thereto, as certified by the Secretary of State of the State of Delaware.
10. The By-laws of the Company, as certified on ____________________________,
19____ by the Secretary of the Company as then being complete, accurate
and in effect.
11. Shareholder approval of the Convertible Debt Agreement and Resolutions of
the Board of Directors of the Company adopted at a meeting held on
_______________, 19____, as certified by the Secretary of the Company on
___________________, 19____ as then being complete, accurate and in
effect, authorizing the Transactions and the execution and delivery of
and performance under the Transaction Documents.
2
12. Certificate of Good Standing for the Company, dated ____________________,
19____, issued by the Secretary of State of the State of Delaware./1/
The above enumerated items, numbered 1, 2, 3, 4 and 5 are collectively
referred to as the "Loan Documents." The above enumerated items numbered 6 and 7
are collectively referred to as the "Convertible Debt Documents." The Loan
Documents, the Convertible Debt Documents and the Shared Execution Forward
Commitment are collectively referred to as the "Transaction Documents." Terms
capitalized and used herein without being defined shall have the meanings given
to them in the Credit and Term Loan Agreement.
The opinions which follow are subject to the following assumptions,
limitations and qualifications:
A. We have assumed the genuineness of all signatures, other than of the
Company, the authenticity of all documents submitted to us as originals,
and the conformity with the original documents of all documents submitted
to us as reproduced copies, and the authenticity of all such latter
documents.
B. We have assumed the organization, existence, good standing and capacity
of all persons and entities other than the Company, and that such
parties, other than the Company, have the right, power and authority to
execute and deliver the Transaction Documents and to perform thereunder.
C. We have assumed that the Lender's obligations under the Transaction
Documents are within the powers of the Lender and have been duly and
validly authorized and that the Transaction Documents have been duly
executed and validly delivered by the Lender.
D. As to various questions of fact material to this opinion, we have made
such factual inquiries of the Company, and have
___________________
/1/A certificate of good standing, dated as of a date within ninety (90)
days of the date of the Agreement, for the state where the Company is
incorporated and for each state where the Company is transacting business as a
foreign corporation should be listed.
3
examined such other documents and made such examinations of applicable
laws, as we have deemed necessary for purposes of the opinions expressed
herein. However, where we state that a matter is to the best of our
knowledge, we have relied upon the written statements of the officers of
the Company, with no inquiry as to the facts other than as necessary to
establish that such reliance was reasonable on our part.
Based upon such examinations and investigations, and such other
investigations and examinations as we have deemed necessary for the purposes of
the opinions expressed herein, and subject to the assumptions stated above in
paragraphs A through D, inclusive, and in our capacity as special counsel for
the Company, we are of the opinion that:
[Opinions Concerning Company]
1. The Company and each Subsidiary of the Company/2/ is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and has the full legal power and
authority to own its property and to carry on its business as currently
conducted.
2. The Company and each Subsidiary of the Company is duly qualified to do
business as a foreign corporation and is in good standing in all
jurisdictions where the ownership of its property or the conduct of its
business makes such qualification necessary.
3. The Company has the power and authority to execute, deliver and perform the
Transaction Documents. The execution, delivery and performance of the
Transaction Documents by the Company, including without limitation, the
borrowings under the Credit and Term Loan Agreement and the Convertible
Debt Agreement and the pledge of the Collateral, have been duly and validly
authorized by all necessary actions on the part of the Company.
______________________
/2/ In the alternative, state that the Company has no Subsidiaries.
4
4. The Transaction Documents have been duly executed and delivered by the
Company. The Transaction Documents constitute the legal, valid and binding
obligations of the Company and are enforceable in accordance with their
respective terms against the Company, except that enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting the rights of creditors, and general principles of
equity.
5. The authorized capital stock of the Company consists of [_____]. At the
date hereof (i) ____ shares of ___________ Stock are issued and
outstanding. Except for the rights of the Company under the Convertible
Debt Agreement and except as described on Exhibit D to the Convertible Debt
Agreement, there are no outstanding options or warrants to purchase shares
of capital stock of the Company, outstanding securities convertible into or
exchangeable for such capital stock, or other outstanding rights to acquire
such capital stock from the Company. All of the issued and outstanding
shares of stock referred to above have been duly authorized and validly
issued and are fully paid and nonassessable.
6. The "Conversion Shares" (as defined in the Convertible Debt Agreement) to
be issued by the Company have been duly authorized and reserved for
issuance and, when issued and delivered by the Company in accordance with
the terms of the Convertible Debt Agreement, will have been validly issued
and will be fully paid and nonassessable.
7. Upon delivery to the Lender of those items of Collateral, consisting of
promissory notes secured by mortgages or deeds of trust ("Pledged
Mortgages") or mortgage-backed securities ("Pledged Securities"), or in the
case of Pledged Securities issued in book-entry form or issued in
certificated form and delivered to a clearing corporation (as such term is
defined in the Uniform Commercial Code) or its nominee, upon (a)
registration of such Pledged Securities in the name of a securities
intermediary (as such term is defined in the Uniform Commercial Code) in an
account containing only customer securities, (b) the notation of Lender's
security interest in such Pledged Securities on the records of such
securities intermediary, by book entry or otherwise, and (c) the sending by
such securities intermediary to the Lender of confirmation of such
notation, the Lender will have a valid
5
and perfected first security interest therein. We assume, in giving this
opinion, that such items of Collateral will be owned by the Company and
that, at the time the Lender's security interest is noted on the records of
any securities intermediary, such Pledged Securities will be free of any
interest created through the Federal Reserve Bank, clearing corporation
and/or securities intermediary. With respect to Pledged Mortgages, the laws
of certain jurisdictions may require the recordation of an assignment of
such deeds of trust or mortgages in order to perfect a security interest in
the deed of trust or mortgage (as opposed to the notes secured thereby). If
the Lender does not record its assignment of deeds of trust or mortgages in
such jurisdictions, we express no opinion as to the Lender's perfected
security interest in such deeds of trust and mortgages (as opposed to the
notes secured thereby) constituting part of the Collateral.
8. The execution, delivery and performance by the Company of the Transaction
Documents, will not (i) conflict with or violate any provision of the
Articles of Incorporation or Bylaws of the Company; (ii) require any
license, approval or other action by any governmental authority that has
not been obtained; (iii) to the best of our knowledge, result in the
creation of any lien, charge or encumbrance upon any property or assets of
the Company other than in favor of the Lender; (iv) to the best of our
knowledge, result in a violation or breach of any term or provision,
constitute a default under, or result in or require the acceleration of any
indebtedness of the Company pursuant to, any agreement or other instrument
to which the Company may be bound or to which the Company or any of its
property may be subject; or (v) result in any violation of the provisions
of any law or any order of any court or, to the best of our knowledge, any
governmental agency, to which the Company may be bound or to which the
Company or any of its property may be subject.
9. To the best of our knowledge, there are no actions, suits, or proceedings
pending or threatened against or affecting the Company, in any court or
before any arbitrator or governmental authority which, if adversely
determined, may reasonably be expected to result in any material and
adverse change in the business, operations, assets or financial condition
of the Company as a whole.
6
10. The making of the Advances as contemplated by the Credit and Term Loan
Agreement will not violate Regulation G of the Board of Governors of the
Federal Reserve System.
11. The Company is not an "investment company" or "controlled" by an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
12. The Term Loan, the Warehousing Loan and the Convertible Debt as reflected
in the Transaction Documents, are not contractually usurious under Texas
law.
13. In reliance upon Section 35.51(b) of the Texas Business and Commerce Code,
a Texas court, in a properly presented case, should give effect to the
choice of law provisions contained in the Transaction Documents.
Subject to the accuracy of the Lender's representations and agreements
contained in Section 3.4 of the Convertible Debt Agreement, the issuance of the
"Conversion Shares" (as defined in the Convertible Debt Agreement) by the
Company to the Lender upon exercise of the conversion rights provided for in the
Convertible Debt Agreement by the Lender are transactions which do not require
registration under the Securities Act of 1933, as amended, or registration or
qualification under Delaware securities laws.
This opinion may be relied upon by you and your successors and assigns and
by any participant in the Transactions.
All capitalized terms used herein, not otherwise defined herein, shall have
the meanings given such terms in the Credit and Term Loan Agreement.
Very truly yours,
_____________________________
By: _________________________
7
EXHIBIT I-SF
OFFICER'S CERTIFICATE
Reference is made to that certain Warehousing Credit, Term Loan and
Security Agreement (Single Family Mortgage Loans) between ACCREDITED HOME
LENDERS, INC., a California corporation (the "Company") and RESIDENTIAL FUNDING
CORPORATION, a Delaware corporation (the "Lender"), dated as of March 17, 1999
(as the same may be amended, modified, supplemented, renewed or restated from
time to time, the "Agreement"). All capitalized terms used herein and all
Section numbers given herein refer to those terms and Sections set forth in the
Agreement. This Officer's Certificate is submitted to the Lender pursuant to
Section 6.2(c) of the Agreement.
The undersigned hereby certifies to the Lender that as of the close of
business on _________________________, 19____ ("Statement Date"), and with
respect to the Company and its Subsidiaries on a consolidated basis:
1. As illustrated in the attached calculations supporting this Officer's
Certificate, the Company met the covenants set forth in Sections 7.6, 7.7,
7.8, 7.9, 7.10 and 7.10, or if the Company did not meet any of such
covenants, a detailed explanation is attached setting forth the nature and
period of the existence of the Default and the action the Company has
taken, is taking, and proposes to take with respect thereto.
2. No Servicing Contracts have been sold or pledged by the Company except as
permitted under the terms of the Agreement.
3. No recourse Servicing Contracts have been acquired by the Company.
4. No payments in advance of the scheduled maturity date have been made with
respect to any Subordinated Debt. The Company has incurred no Debt required
to be subordinated pursuant to Section 6.10.
1
5. The Company was in compliance with the applicable HUD, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇
▇▇▇ or ▇▇▇▇▇▇▇ Mac net worth requirements, and in good standing with VA,
HUD, ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac, as applicable.
6. The representation set forth in Section 5.19 of the Agreement is true and
correct as of the date of this Officer's Certificate, or, if such
representation is not true and correct as of such date, the nature of the
problem and the action the Company has taken, is taking and proposes to
take with respect thereto are specified in the statement attached hereto.
7. 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 the Company (and, if applicable, its
Subsidiaries) and such review has not disclosed the existence, and I have
no 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 specifying the nature and period of the existence of the
Default and the action the Company has taken, is taking and proposes to
take with respect thereto.
8. Pursuant to Section 6.2 of the Agreement, enclosed are the financial
statements of the Company 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 the Company (and, if
applicable, its Subsidiaries) as of the Statement Date.
Dated:______________________________________
ACCREDITED HOME LENDERS, INC.,
a California corporation
By:___________________________________
Its:__________________________________
2
CALCULATIONS SUPPORTING OFFICER'S CERTIFICATE
Company Name: ACCREDITED HOME LENDERS, INC. and its Subsidiaries
Statement Date:____________________________________
All financial calculations set forth herein are as of the Statement Date.
I. TANGIBLE NET WORTH
A. Tangible Net Worth of the Company is:
Excess of total assets over total liabilities: $___________
Plus: Subordinated Debt not due within one year
of the Statement Date (or any portion
thereof): $___________
Minus: Advances to owners, officers, employees or
Affiliates: $___________
Minus: Investments in Affiliates: $___________
Minus: Assets pledged to secure liabilities not
included in Debt: $___________
Minus: Intangible assets: $___________
Minus: Any other HUD nonacceptable assets: $___________
Minus: Other assets unacceptable to the Lender: $___________
TANGIBLE NET WORTH $________________
B. Net Income of the Company for Fiscal Quarters Ending After Closing
Date:
March 31, 1999
$_________
June 30, 1999
$_________
September 30, 1999
$_________
December 31, 1999
$_________
3
C. Requirements of Section 7.7 of the Agreement:
Minimum Tangible Net Worth of $6,000,000 plus 50% of all positive
quarterly net income since the date of this Agreement.
D. Covenant Satisfied:_____ Covenant Not Satisfied:_____
II. DEBT OF THE COMPANY
Total liabilities $___________
Minus: Debt arising under Hedging Arrangements
(to the extent of offsetting assets) $___________
Minus: Subordinated Debt not due within one year
of the Statement Date (or any portion
thereof): $___________
Minus: Deferred taxes arising from capitalized
excess servicing fees and capitalized
servicing rights: $___________
DEBT $_________________
III. RATIO OF DEBT TO TANGIBLE NET WORTH
A. The ratio of Debt to Tangible Net Worth (II to 1.A) is: ______ to 1
B. Requirements of Section 7.6 of the Agreement:
The ratio of Debt to Tangible Net Worth shall not exceed (i) from the
Closing Date, to and including December 30, 1999, 20 to 1; (ii) from
December 31, 1999, to and including December 30, 2000, 17 to 1; (iii)
from December 31, 2000, to and including December 30, 2001, 14 to 1;
and (iv) from and after December 31, 2001, 11 to 1.
C. Covenant Satisfied:_____ Covenant Not Satisfied:_____
IV. LIQUID ASSETS OF THE COMPANY
Unrestricted and Unencumbered Cash $___________
Plus: Funds on deposit in any United States bank $___________
4
Plus: Investment grade commercial paper $___________
Plus: Money market funds $___________
Plus: Marketable securities $___________
LIQUID ASSETS $_______________
V. LIQUIDITY
A. Liquid Assets are: $___________
B. Requirements of Section 7.8 of the Agreement:
Liquid Assets shall not be less than $l,000,000.
C. Covenant Satisfied:_____ Covenant Not Satisfied:_____
VI. QUARTERLY NET INCOME
A. Net Income of the Company for the most recently completed fiscal
quarter: $___________
B. Requirements of Section 7.9 of the Agreement:
The net income of the Company for any fiscal quarter ended after the
date of this Agreement shall not be less than zero.
C. Covenant Satisfied:_____ Covenant Not Satisfied:_____
VII. TRANSACTIONS WITH AFFILIATES
A. Loans, advances, and extensions of credit made by the Company to its
Affiliates total: $___________
B. Capital contributions made by the Company to its Affiliates total:
$___________
C. Management fees paid to Affiliates during the current fiscal year
total: $___________
D. Transfers, sales, pledges, assignments or other dispositions of assets
made by the Company to its Affiliates total: $___________
5
E. Requirements of Section 7.10 of the Agreement:
1. No loans, advances, extensions of credit or capital contributions
shall be made by the Company to Affiliates.
Covenant Satisfied:_____ Covenant Not Satisfied:_____
2. No transfers, sales, pledges assignments or other dispositions of
assets by the Company to Affiliates.
Covenant Satisfied:_____ Covenant Not Satisfied:_____
3. No merger, consolidation, purchase or acquisition of assets by the
Company to Affiliates.
Covenant Satisfied:_____ Covenant Not Satisfied:_____
4. No Management fees shall be paid by the Company to Affiliates.
Covenant Satisfied:_____ Covenant Not Satisfied:_____
6
EXHIBIT J
SCHEDULE OF EXISTING WAREHOUSE LINES
Amended and Restated Facility Agreement dated as of October 1, 1997, as amended
by Amendment No. 1 to Amended and Restated Facility Agreement dated as of
January 30, 1998 and as amended by Amendment No. 2 to Amended and Restated
Facility Agreement dated as of the Closing Date, each among Cargill Financial
Services Corporation, the Borrower, Accredited Home Capital, Inc. and Bankers
Trust Company of California, N.A.
Master Repurchase Agreement Governing Purchases and Sales of Mortgage Loans
dated as of October 1, 1997 between the Borrower and ▇▇▇▇▇▇ Commercial Paper
Inc.
EXHIBIT K
FORM FOR FUNDING BANK
LETTER AGREEMENT
(Letterhead of the Company)
March _____, 1999
The First National Bank of Chicago
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen:
The undersigned, ACCREDITED HOME LENDERS, INC. (the "Company"), hereby
authorizes The First National Bank of Chicago (the "Funding Bank") to permit
Residential Funding Corporation (the "Lender") to debit and access information
on the Company's accounts held by the Funding Bank as outlined below. The
Company hereby directs and authorizes the Funding Bank to follow the directions
of the Lender in debiting such accounts.
The Company authorizes the Lender to access account information from time
to time for the Company's operating account no. ____________________ (the
"Operating Account") for the purpose of verifying balance information. In
addition, the Company requests that the Lender, and the Company hereby
authorizes the Lender, to debit the Operating Account to the extent necessary to
cover (a) wires to be initiated by the Lender in accordance with the Company's
instructions as set forth in the Request for Advance for the purposes permitted
in the Warehousing Credit, Term Loan and Security Agreement (the "Agreement") by
and between the Company and the Lender; and (b) amounts due and owing to the
Lender, including but not limited to principal, interest and fees.
Upon the termination or expiration of the Agreement, the Company requests
that the Lender, and the Company hereby authorizes the Lender to (a) close the
Operating Account and any other accounts which have been established by the
Company and the Lender to facilitate transactions under the Agreement, and (b)
withdraw any funds remaining in the Operating Account and remit such funds to
the Company after all amounts due and owing the Lender have been paid.
The Company hereby directs and authorizes the Funding Bank to follow all of
the foregoing instructions of the Lender.
Very truly yours,
ACCREDITED HOME LENDERS, INC.,
a California corporation
By:_____________________________
Its:____________________________
ACKNOWLEDGED AND AGREED THIS
______ DAY OF ___________, 19____.
THE FIRST NATIONAL BANK OF CHICAGO
By: _____________________________
Its: ____________________________
-2-
EXHIBIT L
FORM OF COMMITMENT SUMMARY REPORT
Loan or Unfilled
Issue or Security Security Rate/ Mandatory/ Commitment Commitment Delivery/Settlement
Investor Comm. No. Trade Date Type Loan Term Net Yield Optional Amount Remaining Expiration Date Price
-------- --------- ---------- -------- --------- -------------- ---------- ---------- ---------- ------------------- -----
TOTAL ---------- ----------
Certification
The undersigned hereby certifies to Residential Funding Corporation that as of
the date set forth below:
1. The Company has the foregoing Purchase Commitments (as defined in the
Agreement).
ACCREDITED HOME LENDERS, INC.,
a California corporation
By:_____________________________________
Its:____________________________________
ACCREDITED HOME CAPITAL, INC.,
a California corporation
By:_____________________________________
Its:____________________________________
Date: _______________, 19__
EXHIBIT L
Page 2
MORTGAGE POSITION REPORT Report Date: ________
------------------------
Total Locked and Unfilled
Loan Type Applications Locked Pipeline Closed Warehouse Closed Loans Commitments Net Position
--------- ------------ --------------- ---------------- ---------------- ----------- ------------
EXHIBIT M
ELIGIBLE LOANS
For the purposes hereof, the following terms shall have the following meanings:
"Acquisition Price" has the meaning given to it in the Agreement.
"Closed Loan" means a Mortgage Loan that will be purchased by the
Company from a third party originator with the Advance requested against
it.
"Loan-to-Value Ratio" means, in respect of any Mortgage Loan, the
ratio of (a) the maximum amount available to be borrowed thereunder
(whether or not borrowed) at the time of origination to (b) the Appraised
Value of such related improved real property.
The following aggregate limitations shall apply to Advances against Eligible
Loans:
1. Wet Settlement Advances: 35% of the Ordinary
Warehousing Sublimit.
2. Advances against Second Mortgage Loans
not including High LTV Mortgage Loans
or Title I Mortgage Loans): $9,000,000.
3. Closed Loan Advances: Permitted.
The following specified types of Single Family Mortgage Loans are Eligible Loans
provided they conform in all respects with the terms of the Warehousing
Agreement (the restrictions set forth for each of the following categories of
Eligible Loans do not apply to either of the other categories:
1. Prime Mortgage Loan
a. Definition: A First Mortgage Loan with the following
characteristics:
(i) For a First Mortgage Loan, other than a Government Mortgage
Loan:
A. Underwritten substantially in accordance with ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ 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 amount by which
such Prime Mortgage Loan exceeds 80% is insured by
or subject to a commitment for mortgage insurance.
(ii) For a Government Mortgage Loan:
A. HUD/FHA insured (other than a HUD 203(K) Mortgage
Loan or a Title I Mortgage Loan); or
B. VA guaranteed.
b. Interest Rate: 1.25% over LIBOR.
c. Prime Sublimit: $10,000,000.
d. Committed/Uncommitted: Purchase Commitment required.
e. Committed First Mortgage
Loan Advance Rate: 98% of the least of (i) the
Mortgage Note Amount or (ii) the
Committed Purchase Price or (iii)
the Acquisition Price.
f. Warehouse Period First
Mortgage Loan: 90 days; provided that Ordinary
Warehousing Advances in an
aggregate amount not to exceed
20% of the Ordinary Warehousing
Sublimit may remain outstanding
against Mortgage Loans for 120
days.
2. Subprime Mortgage Loan
a. Definition: A First Mortgage Loan that is not a Prime Mortgage
Loan, which has a risk rating of "A-", "B" or "C"
(determined using underwriting standards which comply
with industry standards in the sole judgement of the
Lender), which is made to a mortgagor with a FICO
Score of no less than 500, and which is acceptable for
purchase by at least two Investors.
b. Interest Rate: 1.25% over LIBOR.
C. Subprime Sublimit: $15,000,000.
d. Committed/Uncommitted: Purchase Commitment not required
unless First Mortgage Loan
exceeds $400,000
e. Committed First Mortgage
Loan Advance Rate: 98% of the least of (i) the
Mortgage Note Amount or (ii) the
Committed Purchase Price or (iii)
the Acquisition Price.
f. Uncommitted First
Mortgage Loan Advance
Rate: 98% of the Mortgage Note Amount.
g. Warehouse Period First
Mortgage Loan: 90 days; provided, that Ordinary
Warehousing Advances in an
aggregate amount not to exceed
20% of the Ordinary Warehousing
sublimit may remain outstanding
against Mortgage Loans for 120
days.
3. Eligible Subject Loan
a. Definition: As defined in the Agreement.
b. Interest Rate: 1.25% over LIBOR.
c. Committed/Uncommitted: Purchase Commitment required, if
applicable.
d. Committed Advance Rate: 100% of the least of (i) the Mortgage
Note Amount, (ii) the Committed
Purchase Price, or (iii) the
Acquisition Price.
e. Warehouse Period: 90 days; provided, that Ordinary
Warehousing Advances in an aggregate
amount not to exceed 20% of the
Ordinary Warehousing Sublimit may
remain outstanding against Mortgage
Loans for 120 days.
EXHIBIT N
SECURITY AGREEMENT AS PROVIDED FOR
BY THE UNIFORM COMMERCIAL CODE OF MINNESOTA
(Form of Bailee Pledge Agreement)
For new value this day received, and as collateral security for the payment
of any and all indebtedness and liability of ACCREDITED HOME LENDERS, INC., a
California corporation (the "Company") under that certain Warehousing Credit and
Security Agreement dated as of March 17, 1999, as may be amended from time to
time, by and between the Company and RESIDENTIAL FUNDING CORPORATION (the
"Lender"), the Company creates and grants in favor and for the benefit of the
Lender a security interest in and to the instruments and documents described in
Exhibit C-SF attached to this Agreement.
(LIST OF MORTGAGE LOANS)
[for each Mortgage Loan identified herein, attach
a completed Exhibit C-SF]
The Company has given to ________________________________________ (escrow
or title company), who has possession of such instruments and documents, notice
of the foregoing described security interest in favor of the Lender or the
Company has possession of such instruments and documents and acknowledges the
foregoing described security interest in favor of the Lender.
The Company further agrees to deliver the documents described in the
Advance Request to the Lender, immediately upon the request of the Lender
(whether written or oral), but in any event, on or before five (5) days from the
date hereof unless otherwise requested by the Lender.
1
The Company further agrees that this Agreement shall be binding upon and
inure to the benefit of the legal representatives, successors or assigns of the
Lender.
The Company further agrees that all rights, interests, duties and
liabilities arising hereunder shall be determined according to the laws of the
State of Minnesota.
IN WITNESS WHEREOF, the Company has caused this Bailee Pledge Agreement to
be executed by the respective officers or agents thereunto duly authorized, as
of this _________ day of ______________, 19_____.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By:_______________________________
Its:______________________________
2
EXHIBIT O
ASSUMED NAMES
Accolade Mortgage Company
Axiom Financial Services, a division of Accredited Home Lenders, Inc.
1
[THE FOLLOWING ACKNOWLEDGEMENT IS TO BE USED FOR A CORPORATION.]
STATE OF __________________ )
) ss
COUNTY OF _________________ )
On __________________ , 19__ before me, a Notary Public, personally
appeared _______________________ , the ___________________ of __________________
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
_____________________________________
Notary Public
(SEAL)
My Commission Expires: ______________
[THE FOLLOWING ACKNOWLEDGEMENT IS TO BE USED FOR AN INDIVIDUAL.]
STATE OF __________________ )
) ss
COUNTY OF _________________ )
The foregoing instrument was acknowledged before me this __________ day of
_______________, 19__, by _____________________________________________.
_____________________________________
Notary Public
My Commission Expires: ______________
Accredited: 3/17/99 7
ACCEPTANCE OF SUBORDINATION OF DEBT
AGREEMENT BY THE COMPANY
The Company named in the Subordination of Debt Agreement set forth
hereinbefore, hereby (i) represents and warrants to the Lender that it is
presently indebted to the Creditor executing said Subordination of Debt
Agreement in the aggregate principal amount of __________ Dollars ($ _______);
and (ii) accepts and consents to the Subordination of Debt Agreement, and agrees
to be bound by all of the provisions thereof and to recognize all priorities and
other rights granted thereby to RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation, its successors and assigns, and to perform in accordance therewith.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By:_________________________________________________________________
Its:________________________________________________________________
Dated:______________________
Accredited: 3/17/99 8
EXHIBIT G
SUBSIDIARIES
The Borrower's sole Subsidiary is Accredited Home Capital, Inc., a Delaware
corporation whose principal place of business is located ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, which is qualified as a corporation in
California, and the outstanding capital stock of which is owned entirely by the
Borrower.
EXHIBIT H
FORM OF OPINION OF COUNSEL
Residential Funding Corporation Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: (1) $87,500,000 Warehousing Loan (the "Warehousing Loan") and $40,000,000
Term Loan (the "Term Loan") under Warehousing Credit, Term Loan and
Security Agreement (the "Credit and Term Loan Agreement") by and between
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender") and
ACCREDITED HOME LENDERS, INC., a California corporation (the "Company") and
secured by the "Collateral" (as defined in the Agreement).
(2) $ _______ multiple advance convertible loan (the "Convertible Debt")
under Loan and Security Agreement (Convertible Debt) (the "Convertible Debt
Agreement") by and between the Lender and the Company, convertible into the
Applicable Conversion Percentage (as defined in the Convertible Debt
Agreement) of the capital stock of the Company and secured by the
Collateral.
(3) Letter agreement (the "Shared Execption Forward Commitment") pursuant
to which the Lender agrees to purchase from the Company, and the Company
agrees to sell to the Lender, "Eligible Subject Loans" (as defined therein)
on the terms and subject to the conditions set forth therein.
Ladies and Gentlemen:
We are special counsel to the Company in connection with the Warehousing
Loan, the Term Loan, the Convertible Debt and the Shared Execution Forward
Commitment (collectively, the "Transactions"). As counsel, we have prepared
and/or examined the following documents:
1
1. Executed copy of the Warehousing Promissory Note, dated March __, 1999,
made by the Company payable to the order of the Lender, in the principal
amount of $87,500,000.
2. Executed copy of the Sublimit Promissory Note, dated March __, 1999, made
by the Company payable to the order of the Lender, in the principal amount
of $10,500,000.
3. Executed copy of the Term Loan Promissory Note, dated March __, 1999, made
by the Company payable to the order of the Lender, in the principal amount
of $40,000,000.
4. Executed copy of the Warehousing Credit, Term Loan and Security Agreement
by and between the Company and the Lender, dated March __, 1999 (the
"Credit and Term Loan Agreement").
5. Undated Amended UCC Financing Statements perfecting a security interest in
collateral, tangible and intangible.
6. Executed copy of the Floating Rate Convertible Debenture dated March __,
1999, made by the Company and payable to the order of the Lender in the
principal amount of $________.
7. Executed copy of the Convertible Debt Agreement.
8. Executed copy of the Shared Execution Forward Commitment.
9. The Articles of Incorporation of the Company, together with amendments
thereto, as certified by the Secretary of State of the State of Delaware.
10. The By-laws of the Company, as certified on ________, 19___ by the
Secretary of the Company as then being complete, accurate and in effect.
11. Shareholder approval of the Convertible Debt Agreement and Resolutions of
the Board of Directors of the Company adopted at a meeting held on
___________, 19__, as certified by the Secretary of the Company on _______,
19__ as then being complete, accurate and in effect, authorizing the
Transactions and the execution and delivery of and performance under the
Transaction Documents.
2
12. Certificate of Good Standing for the Company, dated __________,19__, issued
by the Secretary of State of the State of Delaware./1/
The above enumerated items, numbered 1, 2, 3, 4 and 5 are collectively
referred to as the "Loan Documents." The above enumerated items numbered 6 and 7
are collectively referred to as the "Convertible Debt Documents." The Loan
Documents, the Convertible Debt Documents and the Shared Execution Forward
Commitment are collectively referred to as the "Transaction Documents." Terms
capitalized and used herein without being defined shall have the meanings given
to them in the Credit and Term Loan Agreement.
The opinions which follow are subject to the following assumptions,
limitations and qualifications:
A. We have assumed the genuineness of all signatures, other than of the
Company, the authenticity of all documents submitted to us as originals,
and the conformity with the original documents of all documents submitted
to us as reproduced copies, and the authenticity of all such latter
documents.
B. We have assumed the organization, existence, good standing and capacity of
all persons and entities other than the Company, and that such parties,
other than the Company, have the right, power and authority to execute and
deliver the Transaction Documents and to perform thereunder.
C. We have assumed that the Lender's obligations under the Transaction
Documents are within the powers of the Lender and have been duly and
validly authorized and that the Transaction Documents have been duly
executed and validly delivered by the Lender.
D. As to various questions of fact material to this opinion, we have made such
factual inquiries of the Company, and have
____________
/1/A certificate of-good standing, dated as of a date within ninety (90)
days of the date of the Agreement, for the state where the Company is
incorporated and for each state where the Company is transacting business as a
foreign corporation should be listed.
3
examined such other documents and made such examinations of applicable
laws, as we have deemed necessary for purposes of the opinions expressed
herein. However, where we state that a matter is to the best of our
knowledge, we have relied upon the written statements of the officers of
the Company, with no inquiry as to the facts other than as necessary to
establish that such reliance was reasonable on our part.
Based upon such examinations and investigations, and such other
investigations and examinations as we have deemed necessary for the purposes of
the opinions expressed herein, and subject to the assumptions stated above in
paragraphs A through D, inclusive, and in our capacity as special counsel for
the Company, we are of the opinion that:
[opinions Concerning Company]
1. The Company and each Subsidiary of the Cornpany /2/ is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and has the full legal power and
authority to own its property and to carry on its business as currently
conducted.
2. The Company and each Subsidiary of the Company is duly qualified to do
business as a foreign corporation and is in good standing in all
jurisdictions where the ownership of its property or the conduct of its
business makes such qualification necessary.
3. The Company has the power and authority to execute, deliver and perform the
Transaction Documents. The execution, delivery and performance of the
Transaction Documents by the Company, including without limitation, the
borrowings under the Credit and Term Loan Agreement and the Convertible
Debt Agreement and the pledge of the Collateral, have been duly and validly
authorized by all necessary actions on the part of the Company.
____________
/2/ In the alternative, state that the Company has no Subsidiaries.
4
4. The Transaction Documents have been duly executed and delivered by the
Company.The Transaction Documents constitute the legal, valid and binding
obligations of the Company and are enforceable in accordance with their
respective terms against the Company, except that enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting the rights of creditors, and general principles of
equity.
5. The authorized capital stock of the Company consists of [__]. At the date
hereof (i) ___ shares of____________ Stock are issued and outstanding.
Except for the rights of the Company under the Convertible Debt Agreement
and except as described on Exhibit D to the Convertible Debt Agreement,
there are no outstanding options or warrants to purchase shares of capital
stock of the Company, outstanding securities convertible into or
exchangeable for such capital stock, or other outstanding rights to acquire
such capital stock from the Company. All of the issued and outstanding
shares of stock referred to above have been duly authorized and validly
issued and are fully paid and nonassessable.
6. The "Conversion Shares" (as defined in the Convertible Debt Agreement) to
be issued by the Company have been duly authorized and reserved for
issuance and, when issued and delivered by the Company in accordance with
the terms of the Convertible Debt Agreement, will have been validly issued
and will be fully paid and nonassessable.
7. Upon delivery to the Lender of those items of Collateral, consisting of
promissory notes secured by mortgages or deeds of trust ("Pledged
Mortgages") or mortgage-backed securities ("Pledged Securities"), or in the
case of Pledged Securities issued in book-entry form or issued in
certificated form and delivered to a clearing corporation (as such term is
defined in the Uniform Commercial Code) or its nominee, upon (a)
registration of such Pledged Securities in the name of a securities
intermediary (as such term is defined in the Uniform Commercial Code) in an
account containing only customer securities, (b) the notation of Lender's
security interest in such Pledged Securities on the records of such
securities intermediary, by book entry or otherwise, and (c) the sending by
such securities intermediary to the Lender of confirmation of such
notation, the Lender will have a valid
5
and perfected first security interest therein. We assume, in giving this
opinion, that such items of Collateral will be owned by the Company and
that, at the time the Lender's security interest is noted on the records of
any securities intermediary, such Pledged Securities will be free of any
interest created through the Federal Reserve Bank, clearing corporation
and/or securities intermediary. With respect to Pledged Mortgages, the laws
of certain jurisdictions may require the recordation of an assignment of
such deeds of trust or mortgages in order to perfect a security interest in
the deed of trust or mortgage (as opposed to the notes secured thereby). If
the Lender does not record its assignment of deeds of trust or mortgages in
such jurisdictions, we express no opinion as to the Lender's perfected
security interest in such deeds of trust and mortgages (as opposed to the
notes secured thereby) constituting part of the Collateral.
8. The execution, delivery and performance by the Company of the Transaction
Documents, will not (i) conflict with or violate any provision of the
Articles of Incorporation or Bylaws of the Company; (ii) require any
license, approval or other action by any governmental authority that has
not been obtained; (iii) to the best of our knowledge, result in the
creation of any lien, charge or encumbrance upon any property or assets of
the Company other than in favor of the Lender; (iv) to the best of our
knowledge, result in a violation or breach of any term or provision,
constitute a default under, or result in or require the acceleration of any
indebtedness of the Company pursuant to, any agreement or other instrument
to which the Company may be bound or to which the Company or any of its
property may be subject; or (v) result in any violation of the provisions
of any law or any order of any court or, to the best of our knowledge, any
governmental agency, to which the Company may be bound or to which the
Company or any of its property may be subject.
9. To the best of our knowledge, there are no actions, suits, or proceedings
pending or threatened against or affecting the Company, in any court or
before any arbitrator or governmental authority which, if adversely
determined, may reasonably be expected to result in any material and
adverse change in the business, operations, assets or financial condition
of the Company as a whole.
6
10. The making of the Advances as contemplated by the Credit and Term Loan
Agreement will not violate Regulation G of the Board of Governors of the
Federal Reserve System.
11. The Company is not an "investment company" or "controlled" by an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
12. The Term Loan, the Warehousing Loan and the Convertible Debt as reflected
in the Transaction Documents, are not contractually usurious under Texas
law.
13. In reliance upon Section 35.51(b) of the Texas Business and Commerce Code,
a Texas court, in a properly presented case, should give effect to the
choice of law provisions contained in the Transaction Documents.
Subject to the accuracy of the Lender's representations and agreements
contained in Section 3.4 of the Convertible Debt Agreement, the issuance of the
"Conversion Shares" (as defined in the Convertible Debt Agreement) by the
Company to the Lender upon exercise of the conversion rights provided for in the
Convertible Debt Agreement by the Lender are transactions which do not require
registration under the Securities Act of 1933, as amended, or registration or
qualification under Delaware securities laws.
This opinion may be relied upon by you and your successors and assigns and
by any participant in the Transactions.
All capitalized terms used herein, not otherwise defined herein, shall have
the meanings given such terms in the Credit and Term Loan Agreement.
Very truly yours,
______________________________
By: __________________________
7
EXHIBIT I-SF
OFFICER'S CERTIFICATE
Reference is made to that certain Warehousing Credit, Term Loan and
Security Agreement (Single Family Mortgage Loans) between ACCREDITED HOME
LENDERS, INC., a California corporation (the "Company") and RESIDENTIAL FUNDING
CORPORATION, a Delaware corporation (the "Lender"), dated as of March 17, 1999
(as the same may be amended, modified, supplemented, renewed or restated from
time to time, the "Agreement"). All capitalized terms used herein and all
Section numbers given herein refer to those terms and Sections set forth in the
Agreement. This Officer's Certificate is submitted to the Lender pursuant to
Section 6.2(c) of the Agreement.
The undersigned hereby certifies to the Lender that as of the close of
business on __________, 19__ ("Statement Date"), and with respect to the Company
and its Subsidiaries on a consolidated basis:
1. As illustrated in the attached calculations supporting this Officer's
Certificate, the Company met the covenants set forth in Sections 7.6, 7.7,
7.8, 7.9, 7.10 and 7.10, or if the Company did not meet any of such
covenants, a detailed explanation is attached setting forth the nature and
period of the existence of the Default and the action the Company has
taken, is taking, and proposes to take with respect thereto.
2. No Servicing Contracts have been sold or pledged by the Company except as
permitted under the terms of the Agreement.
3. No recourse Servicing Contracts have been acquired by the Company.
4. No payments in advance of the scheduled maturity date have been made with
respect to any Subordinated Debt. The Company has incurred no Debt required
to be subordinated pursuant to Section 6.10.
1
5. The Company was in compliance with the applicable HUD, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇
▇▇▇ or ▇▇▇▇▇▇▇ Mac net worth requirements, and in good standing with VA,
HUD, ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac, as applicable.
6. The representation set forth in Section 5.19 of the Agreement is true and
correct as of the date of this Officer's Certificate, or, if such
representation is not true and correct as of such date, the nature of the
problem and the action the Company has taken, is taking and proposes to
take with respect thereto are specified in the statement attached hereto.
7. 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 the Company (and, if applicable, its
Subsidiaries) and such review has not disclosed the existence, and I have
no 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 specifying the nature and period of the existence of the
Default and the action the Company has taken, is taking and proposes to
take with respect thereto.
8. Pursuant to Section 6.2 of the Agreement, enclosed are the financial
statements of the Company 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 the Company (and, if
applicable, its Subsidiaries) as of the Statement Date.
Dated: _________________
ACCREDITED HOME LENDERS, INC.,
a California corporation
By:___________________________
Its:__________________________
2
CALCULATIONS SUPPORTING OFFICER'S CERTIFICATE
Company Name: ACCREDITED HOME LENDERS, INC. and its Subsidiaries
Statement Date: ____________________________________
All financial calculations set forth herein are as of the Statement Date.
I. TANGIBLE NET WORTH
A. Tangible Net Worth of the Company is:
Excess of total assets over total liabilities: $____________
Plus: Subordinated Debt not due within one year of
the Statement Date (or any portion thereof): $____________
Minus: Advances to owners, officers, employees
or Affiliates: $____________
Minus: Investments in Affiliates: $____________
Minus: Assets pledged to secure liabilities
not included in Debt: $____________
Minus: Intangible assets: $____________
Minus: Any other HUD nonacceptable assets: $____________
Minus: Other assets unacceptable to the
Lender: $____________
TANGIBLE NET WORTH $____________________
B. Net Income of the Company for Fiscal Quarters
Ending After Closing Date:
March 31, 1999
$____________
June 30, 1999
$____________
September 30, 1999
$____________
December 31, 1999
$____________
3
C. Requirements of Section 7.7 of the Agreement:
Minimum Tangible Net Worth of $6,000,000 plus 50% of all positive
quarterly net income since the date of this Agreement.
D. Covenant Satisfied:________ Covenant Not Satisfied:________
II. DEBT OF THE COMPANY
Total liabilities $____________
Minus: Debt arising under Hedging Arrangements
(to the extent of offsetting assets) $____________
Minus: Subordinated Debt not due within one year
of the Statement Date(or any portion thereof): $____________
Minus: Deferred taxes arising from capitalized
excess servicing fees and capitalized servicing
rights: $____________
DEBT $____________________
III. RATIO OF DEBT TO TANGIBLE NET WORTH
A. The ratio of Debt to Tangible Net Worth (II to I.A) is:
_____ to 1
B. Requirements of Section 7.6 of the Agreement:
The ratio of Debt to Tangible Net Worth shall not exceed (i) from the
Closing Date, to and including December 30, 1999, 20 to 1; (ii) from
December 31, 1999, to and including December 30, 2000, 17 to 1; (iii)
from December 31, 2000, to and including December 30, 2001, 14 to 1;
and (iv) from and after December 31, 2001, 11 to 1.
C. Covenant Satisfied:________ Covenant Not Satisfied:________
IV. LIQUID ASSETS OF THE COMPANY
Unrestricted and Unencumbered Cash $____________
Plus: Funds on deposit in any United States bank $____________
4
Plus: Investment grade commercial paper $____________
Plus: Money market funds $____________
Plus: Marketable securities $____________
LIQUID ASSETS $____________________
V. LIQUIDITY
A. Liquid Assets are: $____________
B. Requirements of Section 7.8 of the Agreement:
Liquid Assets shall not be less than $l,OOO,OOO.
C. Covenant Satisfied:______ Covenant Not Satisfied:________
VI. QUARTERLY NET INCOME
A. Net Income of the Company for the most recently
completed fiscal quarter: $____________
B. Requirements of Section 7.9 of the Agreement:
The net income of the Company for any fiscal quarter ended after the
date of this Agreement shall not be less than zero.
C. Covenant Satisfied:______ Covenant Not Satisfied:________
VII. TRANSACTIONS WITH AFFILIATES
A. Loans, advances, and extensions of credit made by
the Company to its Affiliates total: $____________
B. Capital contributions made by the Company to its
Affiliates total: $____________
C. Management fees paid to Affiliates during the
current fiscal year total: $____________
D. Transfers, sales, pledges, assignments or other
dispositions of assets made by the Company to
its Affiliates total: $____________
5
E. Requirements of Section 7.10 of the Agreement:
1. No loans, advances, extensions of credit or capital contributions
shall be made by the Company to Affiliates.
Covenant Satisfied:_____ Covenant Not Satisfied:_____
2. No transfers, sales, pledges assignments or other dispositions of
assets by the Company to Affiliates.
Covenant Satisfied:_____ Covenant Not Satisfied:_____
3. No merger, consolidation, purchase or acquisition of assets by the
Company to Affiliates.
Covenant Satisfied:_____ Covenant Not Satisfied:_____
4. No Management fees shall be paid by the Company to Affiliates.
Covenant Satisfied:_____ Covenant Not Satisfied:_____
6
EXHIBIT J
SCHEDULE OF EXISTING WAREHOUSE LINES
Amended and Restated Facility Agreement dated as of October 1, 1997, as amended
by Amendment No. 1 to Amended and Restated Facility Agreement dated as of
January 30. 1998 and as amended by Amendment No. 2 to Amended and Restated
Facility Agreement dated as of the Closing Date, each among Cargill Financial
Services Corporation, the Borrower, Accredited Home Capital, Inc. and Bankers
Trust Company of California, N.A.
Master Repurchase Agreement Governing Purchases and Sales of Mortgage Loans
dated as of October 1, 1997 between the Borrower and ▇▇▇▇▇▇ Commercial Paper
Inc.
EXHIBIT K
FORM FOR FUNDING BANK
LETTER AGREEMENT
(Letterhead of the Company)
March __, 1999
The First National Bank of Chicago
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen:
The undersigned, ACCREDITED HOME LENDERS, INC. (the 'Company"), hereby
authorizes The First National Bank of Chicago (the 'Funding Bank") to permit
Residential Funding Corporation (the 'Lender') to debit and access information
on the Company's accounts held by the Funding Bank as outlined below. The
company hereby directs and authorizes the Funding Bank to follow the directions
of the Lender in debiting such accounts.
The Company authorizes the Lender to access account information from time
to time for the Company's operating account no. __________________ (the
"Operating Account") for the purpose of verifying balance information. In
addition, the Company requests that the Lender, and the Company hereby
authorizes the Lender, to debit the Operating Account to the extent necessary to
cover (a) wires to be initiated by the Lender in accordance with the Company's
instructions as set forth in the Request for Advance for the purposes permitted
in the Warehousing Credit, Term Loan and Security Agreement (the "Agreement") by
and between the Company and the Lender; and (b) amounts due and owing to the
Lender, including but not limited to principal, interest and fees.
Upon the termination or expiration of the Agreement, the Company requests
that the Lender, and the Company hereby authorizes the Lender to (a) close the
Operating Account and any other accounts which have been established by the
Company and the Lender to facilitate transactions under the Agreement, and (b)
withdraw any funds remaining in the Operating Account and remit such funds to
the Company after all amounts due and owing the Lender have been'paid.
The Company hereby directs and authorizes the Funding Bank to follow all of
the foregoing instructions of the Lender.
Very truly yours,
ACCREDITED HOME LENDERS, INC.,
a California corporation
By:_______________________________
Its:______________________________
ACKNOWLEDGED AND AGREED THIS
__________ DAY OF ___________, 19__.
THE FIRST NATIONAL BANK OF CHICAGO
By:__________________________
Its: ________________________
-2-
EXHIBIT L
FORM OF COMMITMENT SUMMARY REPORT
Loan or Unfilled
Issue or Security Security Rate/ Mandatory/ Commitment Commitment Delivery/Settlement
Investor Comm. No. Trade Date Type Loan Term Net Yield Optional Amount Remaining Expiration Date Price
-------- --------- ---------- --------- --------- -------------- ---------- ----------- ---------- -------------------- -----
TOTAL ----------- ----------
Certificatron
The undersigned hereby certifies to Residential Funding Corporation that as of
the date set forth below:
I. The Company has the foregoing Purchase Commitments (as defined in the
Agreement).
ACCREDITED HOME LENDERS, INC.,
a California corporation
By:______________________________
Its:_____________________________
ACCREDITED HOME CAPITAL. INC
a California corporation
By:______________________________
Its:_____________________________
Date: __________, 19__
EXHIBIT L
Page 2
MORTGAGE POSITION REPORT REPORT DATE: ______________
Total Locked and Unfilled
Loan Type Applications Locked Pipeline Closed Warehouse Closed Loans Commitments Net Position
--------- ------------ --------------- ---------------- ---------------- ----------- ------------
EXHIBIT M
ELIGIBLE LOANS
For the purposes hereof, the following terms shall have the following meanings:
"Acquisition Price" has the meaning given to it in the Agreement.
"Closed Loan" means a Mortgage Loan that will be purchased by the
Company from a third party originator with the Advance requested against
it.
"Loan-to-Value Ratio" means, in respect of any Mortgage Loan, the
ratio of (a) the maximum amount available to be borrowed thereunder
(whether or not borrowed) at the time of origination to (b) the Appraised
Value of such related improved real property.
The following aggregate limitations shall apply to Advances against Eligible
Loans:
1. Wet Settlement Advances: 35% of the Ordinary
Warehousing Sublimit.
2. Advances against Second Mortgage Loans
not including High LTV Mortgage Loans
or Title I Mortgage Loans): $9,000,000.
3. Closed Loan Advances: Permitted.
The following specified types of Single Family Mortgage Loans are Eligible Loans
provided they conform in all respects with the terms of the Warehousing
Agreement (the restrictions set forth for each of the following categories of
Eligible Loans do not apply to either of the other categories:
1. Prime Mortgage Loan
a. Definition: A First Mortgage Loan with the following characteristics:
(i) For a First Mortgage Loan, other than a Government Mortgage Loan:
A. Underwritten substantially in accordance with ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ 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 amount by which such
Prime Mortgage Loan exceeds 80% is insured by or subject to
a commitment for mortgage insurance.
(ii) For a Government Mortgage Loan:
A. HUD/FHA insured (other than a HUD 203(K) Mortgage Loan or a
Title I Mortgage Loan); or
B. VA guaranteed.
b. Interest Rate: over LIBOR.
c. Prime Sublimit: $10,000,000.
d. committed/Uncommitted: Purchase Commitment required.
e. Committed First Mortgage
Loan Advance Rate: 98% of the least of (i) the
Mortgage Note Amount or (ii)
the Committed Purchase Price
or (iii) the Acquisition
Price.
f. Warehouse Period First
Mortgage Loan: 90 days; provided that
Ordinary Warehousing Advances
in an aggregate amount not to
exceed 20% of the Ordinary
Warehousing Sublimit may
remain outstanding against
Mortgage Loans for 120 days.
2. Subprime Mortgage Loan
a. Definition: A First Mortgage Loan that is not a Prime Mortgage
Loan, which has a risk rating of "A-", "B" or "C"
(determined using underwriting standards which comply
with industry standards in the sole judgement of the
Lender), which is made to a mortgagor with a FICO
Score of no less than 500, and which is acceptable
for purchase by at least two Investors.
b. Interest Rate: over LIBOR.
C. Subprime Sublimit: $15,000,000.
d. Committed/Uncommitted: Purchase Commitment not
required unless First
Mortgage Loan exceeds
$400,000
e. Committed First Mortgage
Loan Advance Rate: 98% of the least of (i) the
Mortgage Note Amount or
(ii) the Committed Purchase
Price or (iii) the
Acquisition Price.
f. Uncommitted First
Mortgage Loan Advance
Rate: 98% of the Mortgage Note
Amount.
g. Warehouse Period First
Mortgage Loan: 90 days; provided, that
Ordinary Warehousing Advances
in an aggregate amount not to
exceed 20% of the Ordinary
Warehousing Sublimit may
remain outstanding against
Mortgage Loans for 120 days.
3. Eligible Subject Loan
a. Definition: As defined in the Agreement.
b. Interest Rate: over LIBOR.
C. Committed/Uncommitted: Purchase Commitment required,
if applicable.
d. Committed Advance Rate: 100% of the least of (i) the
Mortgage Note Amount, (ii)
the Committed Purchase Price,
or (iii) the Acquisition
Price.
e. Warehouse Period: 90 days; provided, that
Ordinary Warehousing Advances
in an aggregate amount not to
exceed 20% of the Ordinary
Warehousing Sublimit may
remain outstanding against
Mortgage Loans for 120 days.
EXHIBIT N
SECURITY AGREEMENT AS PROVIDED FOR
BY THE UNIFORM COMMERCIAL CODE OF MINNESOTA
(Form of Bailee Pledge Agreement)
For new value this day received, and as collateral security for the payment
of any and all indebtedness and liability of ACCREDITED HOME LENDERS, INC., a
California corporation (the "Company") under that certain Warehousing Credit and
Security Agreement dated as of March 17, 1999, as may be amended from time to
time, by and between the Company and RESIDENTIAL FUNDING CORPORATION (the
"Lender"), the Company creates and grants in favor and for the benefit of the
Lender a security interest in and to the instruments and documents described in
Exhibit C-SF attached to this Agreement.
(LIST OF MORTGAGE LOANS)
[for each Mortgage Loan identified herein, attach
a completed Exhibit C-SF]
The Company has given to _______________________ (escrow or title company),
who has possession of such instruments and documents, notice of the foregoing
described security interest in favor of the Lender or the Company has possession
of such instruments and documents and acknowledges the foregoing described
security interest in favor of the Lender.
The Company further agrees to deliver the documents described in the
Advance Request to the Lender, immediately upon the request of the Lender
(whether written or oral), but in any event, on or before five (5) days from the
date hereof unless otherwise requested by the Lender.
1
The Company further agrees that this Agreement shall be binding upon and
inure to the benefit of the legal representatives, successors or assigns of the
Lender.
The Company further agrees that all rights, interests, duties and
liabilities arising hereunder shall be determined according to the laws of
the.State of Minnesota.
IN WITNESS WHEREOF, the Company has caused this Bailee Pledge Agreement to
be executed by the respective officers or agents thereunto duly authorized, as
of this day _____ of ______________ 19___.
ACCREDITED HOME LENDERS, INC.,
a California corporation
By:____________________________
Its:___________________________
2
EXHIBIT O
ASSUMED NAMES
Accolade Mortgage Company
Axiom Financial Services, a division of Accredited Home Lenders, Inc.
1
