THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Exhibit 10.1
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.
This THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), is entered into as of April 29, 2022, by and among HOME POINT FINANCIAL CORPORATION, a New Jersey corporation, as borrower (the “Borrower”), HOME POINT CAPITAL INC., a Delaware corporation, as guarantor (the “Guarantor”), the financial institutions that are parties hereto, as lenders (each such financial institution, a “Lender” and collectively, the “Lenders”) and XXXXXXX XXXXX BANK USA, as administrative agent (the “Administrative Agent”).
WHEREAS, the Borrower, the Guarantor, the Administrative Agent and Xxxxxxx Sachs Bank USA, as the initial lender (the “Initial Lender”) have entered into that certain Second Amended and Restated Credit Agreement, dated as of May 4, 2021 (as previously amended, the “Existing Credit Agreement”);
WHEREAS, the Borrower, the Administrative Agent and the Lenders agree to amend the Existing Credit Agreement to make certain changes to the interest rate calculations (the Existing Credit Agreement, as amended by this Amendment, being referred to herein as the “Amended Credit Agreement”); and
WHEREAS, subject to the terms and conditions set forth in this Amendment, the Administrative Agent and the Lenders are willing to amend the Existing Credit Agreement pursuant to Section 10.2(a) of the Existing Credit Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereto agree as follows:
1. Definitions and Construction. Unless otherwise defined or provided herein, capitalized terms used herein have the respective meanings attributed thereto in, or by reference in, the Amended Credit Agreement. The rules of construction in Article I of the Amended Credit Agreement shall apply mutatis mutandis to this Amendment.
2. Amendment to the Existing Credit Agreement. Upon satisfaction of the conditions set forth in Section 3 hereof, the parties hereto hereby agree that the Existing Credit Agreement is hereby amended in its entirety to read as set forth on Exhibit A hereto.
3. Conditions to Effectiveness. This Amendment shall be effective as of the date first above written upon the Administrative Agent’s receipt of the following:
(a) counterparts of this Amendment executed by the Borrower, the Guarantor and the Lender;
(b) evidence, satisfactory in form and substance to the Administrative Agent that the Borrower has provided all notices required by the Agencies and the Acknowledgement Agreements for the Borrower’s execution and delivery of this Amendment and performance of the Amended Credit Agreement; and
(c) confirmation that the Administrative Agent shall have received payment in full of all fees and expenses (including reasonable accrued fees and expenses of counsel to the Administrative Agent), which are due and payable under the Transaction Documents on or before the date hereof.
4. Certain Representations and Warranties. In order to induce the Administrative Agent and the Lenders to enter into this Amendment, the Borrower and the Guarantor each hereby represent and warrant to the Administrative Agent and each Lender as of the date hereof, as follows:
(a) Authorization. It has the power and authority to execute and deliver this Amendment and perform its obligations under the Amended Credit Agreement. It has taken all necessary action to authorize its execution and delivery of this Amendment and performance of the Amended Credit Agreement.
(b) Consents. No consent, approval or authorization of, or declaration or filing with, any governmental authority, and no consent of any other Person, is required in connection with its execution and delivery of this Amendment and performance of the Amended Credit Agreement except for (x) those already obtained and (y) all consents, approvals and authorizations required by the Agencies and the Acknowledgement Agreements for the Borrower’s execution and delivery of this Amendment and performance of the Amended Credit Agreement.
(c) Execution, No Conflict. This Amendment has been duly executed and delivered by it and the Amended Credit Agreement constitutes a legal, valid and binding obligation of it, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally (regardless of whether such enforceability is considered in a proceeding in equity or at law). Its execution and delivery of the Amendment or performance of the Amended Credit Agreement does not conflict with, or constitute a violation or breach of, or constitute a default under, the terms of (i) any material contract, mortgage, lease, agreement or instrument to which it is a party or which is binding upon it, (ii) any law or regulation or order or decree of any court applicable to it in any material respect or (iii) the organizational documents of it.
(d) No Defaults. As of the date hereof and after giving effect to this Amendment, no Potential Event of Default or Event of Default has occurred and is continuing.
(e) Representations and Warranties. The representations and warranties made by the Borrower and the Guarantor in the Amended Credit Agreement and each of the other Transaction Documents to which either is a party are true and correct as of the date hereof (except to the extent such representations and warranties relate solely to an earlier date and then as of such earlier date).
5. Reference to, and Effect on, the Credit Agreement and the Transaction Documents.
(a) This Amendment constitutes a Transaction Document for all purposes of, or in connection with, the Amended Credit Agreement and the other Transaction Documents.
(b) Except as expressly set forth herein, all of the terms, conditions and covenants of the Existing Credit Agreement and the other Transaction Documents are hereby ratified and confirmed in all respects by each of the parties hereto and shall remain in full force and effect in accordance with its terms.
(c) On and after the effectiveness of this Amendment, each reference in the Amended Credit Agreement to “this Agreement”, “this Credit Agreement”, “hereunder”, “hereof” or words of like import referring to the Agreement, and each reference in each of the other Transaction Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Existing Credit Agreement as amended by this Amendment.
(d) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of or amendment to, any right, power or remedy of the Administrative Agent under, nor constitute a waiver of or amendment to, any other provision of, the Amended Credit Agreement or any other Transaction Document.
(e) The relationship of Administrative Agent and the Lender, on the one hand, and the Borrower, on the other hand, has been and shall continue to be, at all times, that of creditor and debtor and not as joint venturers or partners. Nothing contained in this Amendment, any instrument, document or agreement delivered in connection herewith or in the Amended Credit Agreement or any of the other Transaction Documents shall be deemed or construed to create a fiduciary relationship between or among the parties.
6. No Novation. This Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Amended Credit Agreement or any other Transaction Document or an accord and satisfaction in regard thereto and the Borrower reaffirms that the existing security interest created by the Existing Credit Agreement and each other Transaction Document is and remains in full force and effect.
7. Miscellaneous. The provisions of Section 10.9 (Governing Law), Section 10.10 (Jurisdiction) and Section 10.11 (Waiver of Jury Trial) of the Credit Agreement are incorporated into this Amendment as if fully set forth herein, mutatis mutandis.
8. Entire Agreement. This Amendment constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all other understandings, oral or written, with respect to the subject matter hereof.
9. Severability. In case any provision in or obligation under this Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
10. Section Headings. All Section headings are inserted for convenience of reference only and shall not affect any construction or interpretation of this Amendment.
11. General. This Amendment shall be binding on and shall inure to the benefit of the Borrower, the Guarantor, the Administrative Agent, the Lenders and their respective successors and permitted assigns under the Transaction Documents.
12. Execution. This Amendment may be executed in any number of counterparts and by each party hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by facsimile or by e-mail in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Amendment.
(Signature pages follow)
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to Second Amended and Restated Credit Agreement be executed by their respective officers thereunto duly authorized, as of the date first above written.
HOME POINT FINANCIAL CORPORATION, as Borrower By: /s/ Xxxxx Xxxxxxx Name: Xxxxx Xxxxxxx Title: Chief Investment Officer | |||||
HOME POINT CAPITAL, INC., as Guarantor By: /s/ Xxxxx Xxxxxxx Name: Xxxxx Xxxxxxx Title: Chief Investment Officer | |||||
XXXXXXX SACHS BANK USA, as Administrative Agent By: /s/ Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx Title: Authorized Person | |||||
XXXXXXX XXXXX BANK USA, as Lender By: /s/ Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx Title: Authorized Person | |||||
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
among
HOME POINT FINANCIAL CORPORATION
as Borrower,
as Borrower,
as Guarantor,
XXXXXXX SACHS BANK USA,
as Administrative Agent for the financial institutions
that may from time to time become parties hereto as Lenders,
as Administrative Agent for the financial institutions
that may from time to time become parties hereto as Lenders,
and
LENDERS
from time to time party hereto
from time to time party hereto
dated as of May 4, 2021
TABLE OF CONTENTS
Page
-i-
-ii-
-iii-
SCHEDULES
Schedule I Borrower’s Account, Collection Account and Administrative Agent’s Account
Schedule II Valuation Agents
Schedule III Dealers
Schedule IV Minimum Haircut Trigger Event
Schedule 4.1(c) Ownership Structure of the Borrower and its Subsidiaries
Schedule 4.1(q) Indebtedness of the Borrower and the Guarantor
Schedule 5.2(a) Liens
Schedule 10.3 Notice Addresses
EXHIBITS
EXHIBIT A -- Form of Compliance Certificate
EXHIBIT B -- Form of Notice of Borrowing
EXHIBIT C -- Form of Loan Note
EXHIBIT D -- Form Assignment and Assumption
EXHIBIT E -- Commitments
EXHIBIT F -- Form of Monthly Report
EXHIBIT G -- Form of Notice of Prepayment
-iv-
EXHIBIT A
to Third Amendment to Second Amended and Restated Credit Agreement
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is entered into as of May 4, 2021, by and among Home Point Financial Corporation a New Jersey corporation, as borrower (the “Borrower”), Home Point Capital Inc., a Delaware corporation (the “Guarantor”), the financial institutions that may from time to time become parties hereto (each such financial institution, a “Lender” and collectively, the “Lenders”) and XXXXXXX SACHS BANK USA (“GS Bank”), as administrative agent (the “Administrative Agent”).
RECITALS
WHEREAS, the Borrower, the financial institutions party thereto and GS Bank, as Administrative Agent, are parties to that certain Amended and Restated Credit Agreement, dated as of July 11, 2019 (the “Existing Credit Agreement”);
WHEREAS, the Borrower, the Lenders and the Administrative Agent desire to amend and restate the Existing Credit Agreement as set forth in this Agreement; and
WHEREAS, the parties hereto intend that this Agreement and the documents executed in connection herewith not effect a novation of the obligations of the Borrower or the Guarantor under the Existing Credit Agreement, but merely a restatement of and, where applicable, an amendment to the terms governing such obligations;
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
CERTAIN DEFINITIONS
Section 1.1 Certain Defined Terms. Capitalized terms used but not otherwise defined herein have the meanings set forth below:
“1940 Act” shall mean the Investment Company Act of 1940, as amended.
“5 Year Swap Rate” shall mean, as of any date of determination, the average of the mid-market par swap rates for interest rate swaps with a maturity of five years offered by the Dealers.
“Accepted Servicing Practices” shall mean (i) with respect to any Mortgage Loan, the customary and usual standards of mortgage servicing practices of prudent mortgage lending institutions servicing mortgage loans for itself or for other third-party portfolios of mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located; and (ii) with respect to all MSRs related to the Servicing Contract of any Agency, those practices required by such Agency (including the Xxxxxx Xxx Agency Guide, the Xxxxxxx Mac Agency Guide, and the Xxxxxx Xxx Agency Guide as applicable); provided, however, that in all cases the accepted servicing practices must (i) comply with the terms of Applicable Laws and the related loan documents and (ii) meet a standard of care not less than customary, reasonable and usual standards of practice for institutions that service loans that are similar to the Mortgage Loans.
“Account Bank” shall mean Merchants Bank of Indiana or such replacement financial institution, reasonably acceptable to the Administrative Agent, identified in writing to the Administrative Agent where the Collection Account is maintained.
“Account Control Agreement” shall mean a Deposit Account Agreement, dated as of March 7, 2019, by and among the Borrower, the Account Bank and the Administrative Agent, pursuant to which the Administrative Agent shall be granted “control” (as defined in Section 9-104 of the UCC) of the Collection Account.
“Acknowledgment Agreement” shall mean each of the Xxxxxx Mae Acknowledgment Agreement, the Xxxxxxx Mac Acknowledgment Agreement, and the Xxxxxx Mae Acknowledgment Agreement, as applicable.
“Activation Notice” shall have the meaning set forth in the Account Control Agreement.
“Additional Collateral” shall mean all right, title and interest in, to and under all personal property of the Borrower, including but not limited to the following, in each case whether now owned or existing or hereafter acquired or arising and wherever located: (a) Accounts, (b) Contracts; (c) Chattel Paper, (d) Documents, (e) General Intangibles, (f) Goods (including all of its Equipment, Fixtures and Inventory), together with all accessions, additions, attachments, improvements, substitutions and replacements thereto and therefor, (g) Instruments, (h) Insurance, (i) Intellectual Property, (j) Investment Related Property (including, without limitation, Deposit Accounts), (k) Letter of Credit Rights, (l) Money, (m) Receivables and Receivables Records, (n) Commercial Tort Claims, (o) any other investments and investment property, (p) to the extent not otherwise included in the foregoing, all other personal property of any kind and all Collateral Records, Collateral support and Supporting Obligations relating to any of the foregoing; and (q) to the extent not otherwise included in the foregoing, all Proceeds, products, accessions, rents and profits of or in respect of any of (a) through (p); provided, however, that Additional Collateral shall not include Excluded Collateral or (for so long as such remains applicable) any of the foregoing to the extent that a security interest therein is prohibited by or in violation of any law, rule, or regulation, or the contractual terms or provisions related thereto.
Capitalized terms used in this definition shall have the meaning given thereto in Article 9 of the UCC.
“Additional Guarantor Collateral” shall mean all right, title and interest in, to and under all personal property of the Guarantor, including but not limited to the following, in each case whether now owned or existing or hereafter acquired or arising and wherever located: (a) Accounts, (b) Contracts, (c) Chattel Paper, (d) Documents, (e) General Intangibles, (f) Goods (including all of its Equipment, Fixtures and Inventory), together with all accessions, additions, attachments, improvements, substitutions and replacements thereto and therefor, (g) Instruments, (h) Insurance, (i) Intellectual Property, (j) Investment Related Property (including, without limitation, Deposit Accounts), (k) Letter of Credit Rights, (l) Money, (m) Receivables and Receivables Records, (n) Commercial Tort Claims, (o) any other investments and investment property (including its interests in Longbridge Financial, LLC and the Borrower), (p) to the extent not otherwise included in the foregoing, all other personal property of any kind and all Collateral Records, Collateral support and Supporting Obligations relating to any of the foregoing, (q) to the extent not otherwise included in the foregoing, all other personal property of any kind and all Collateral Records, Collateral support and Supporting Obligations relating to any of the foregoing, and (r) to the extent not otherwise included in the foregoing, all Proceeds, products, accessions, rents and profits of or in respect of any of (a) through (q); provided,
-2-
however, that Additional Guarantor Collateral shall not include Excluded Collateral or (for so long as such remains applicable) any of the foregoing to the extent that a security interest therein is prohibited by or in violation of any law, rule, or regulation, or the contractual terms or provisions related thereto.
Capitalized terms used in this definition shall have the meaning given thereto in Article 9 of the UCC.
“Additional Principal Amortization Amount” shall mean an amount due and payable on each Additional Principal Amortization Date equal to the quotient of (i) the Advances outstanding on the Availability Period End Date divided by (ii) 12.
“Additional Principal Amortization Date” shall mean the Monthly Payment Date occurring in the calendar month in which the Availability Period End Date occurs, and each Monthly Payment Date thereafter through the Maturity Date, as applicable.
“Adjusted Tangible Net Worth” shall mean, as of any date of determination, an amount equal to, on a consolidated basis, the stockholder or members’ equity, including capital stock or member interests, additional paid-in capital, retained earnings, deferred income, capitalized mortgage loan servicing rights and capitalized excess mortgage loan servicing fees, but excluding treasury stock, if any, and any intangible assets of the Guarantor, the Borrower and its Subsidiaries, determined on a consolidated basis in accordance with GAAP.
“Administrative Agent” shall have the meaning set forth in the introductory paragraph hereof.
“Administrative Agent Asset Value” shall mean, as of any date of determination, the sum of (i) the Administrative Agent Xxxxxx Xxx Asset Value, (ii) the Administrative Agent Xxxxxxx Mac Asset Value, and (iii) the Administrative Agent Xxxxxx Xxx Asset Value; provided that the Administrative Agent Xxxxxx Mae Asset Value of Xxxxxx Xxx MSRs shall be reduced to the extent necessary such that the Xxxxxx Mae Borrowing Base remains at or below the Xxxxxx Xxx Concentration Limit.
“Administrative Agent Xxxxxx Mae Asset Value” shall mean, as of any date of determination, the product of (i) the Xxxxxx Xxx Advance Rate, (ii) the Administrative Agent Xxxxxx Mae Market Value Percentage, and (iii) the aggregate unpaid principal balance of the Mortgage Loans related to the Xxxxxx Xxx MSRs.
“Administrative Agent Xxxxxx Mae Market Value Percentage” shall mean, with respect to any Xxxxxx Xxx MSR as of any date of determination, the percentage to be applied to the unpaid principal balance of the applicable Mortgage Loans to arrive at the fair market value of such Xxxxxx Mae MSR, as most recently determined by the Administrative Agent pursuant to Section 2.6 and in accordance with the Administrative Agent Methodology; provided that, in no event shall the Administrative Agent Xxxxxx Xxx Market Value Percentage be greater than the market value thereof implying a zero option-adjusted spread.
“Administrative Agent Fee Letter” shall mean that certain side letter, dated as of the Closing Date, by and between the Borrower, Guarantor, and the Administrative Agent, with respect to certain pricing terms of the facility established hereby.
“Administrative Agent Xxxxxxx Mac Asset Value” shall mean, as of any date of determination, the product of (i) the Xxxxxxx Mac Advance Rate, (ii) the Administrative Agent
-3-
Xxxxxxx Mac Market Value Percentage, and (iii) the aggregate unpaid principal balance of the Mortgage Loans related to the Xxxxxxx Mac MSRs.
“Administrative Agent Xxxxxxx Mac Market Value Percentage” shall mean, with respect to any Xxxxxxx Mac MSR as of any date of determination, the percentage to be applied to the unpaid principal balance of the applicable Mortgage Loans to arrive at the fair market value of such Xxxxxxx Mac MSR, as most recently determined by the Administrative Agent pursuant to Section 2.6 and in accordance with the Administrative Agent Methodology; provided that, in no event shall the Administrative Agent Xxxxxxx Mac Market Value Percentage be greater than the market value thereof implying a zero option-adjusted spread.
“Administrative Agent Xxxxxx Mae Asset Value” shall mean, as of any date of determination, the product of (i) the Xxxxxx Xxx Advance Rate, (ii) the Administrative Agent Xxxxxx Mae Market Value Percentage, and (iii) the aggregate unpaid principal balance of the Mortgage Loans related to the Xxxxxx Xxx MSRs.
“Administrative Agent Xxxxxx Mae Market Value Percentage” shall mean, with respect to any Xxxxxx Xxx MSR as of any date of determination, the percentage to be applied to the unpaid principal balance of the applicable Mortgage Loans to arrive at the fair market value of such Xxxxxx Mae MSR, as most recently determined by the Administrative Agent pursuant to Section 2.6 and in accordance with the Administrative Agent Methodology; provided that, in no event shall the Administrative Agent Xxxxxx Xxx Market Value Percentage be greater than the market value thereof implying a zero option-adjusted spread.
“Administrative Agent Methodology” shall mean, with respect to any Administrative Agent Xxxxxx Mae Market Value Percentage, Administrative Agent Xxxxxxx Mac Market Value Percentage, or Administrative Agent Xxxxxx Mae Market Value Percentage calculated by the Administrative Agent, the assumptions, factors, parameters, methodology and calculations employed by the Administrative Agent in determining such Administrative Agent Xxxxxx Xxx Market Value Percentage, Administrative Agent Xxxxxxx Mac Market Value Percentage, or Administrative Agent Xxxxxx Xxx Market Value Percentage for purposes of determining the Borrowing Base, which assumptions, factors, parameters, methodology and calculations shall be determined by the Administrative Agent in its sole discretion. Without limiting the foregoing, if as a result of a change by the Administrative Agent of its Administrative Agent Methodology, the aggregate of the Administrative Agent Xxxxxx Mae Market Value Percentage, Administrative Agent Xxxxxxx Mac Market Value Percentage, and Administrative Agent Xxxxxx Mae Market Value Percentage changes by more than five percent (5%) over the course of one (1) Business Day, then upon request by the Borrower the Administrative Agent shall provide the Borrower with an explanation of the basis for such change; provided, however, that, except pursuant to a Borrowing Base Dispute under Section 2.6(b), neither such change in market value nor the Administrative Agent’s failure to provide information related thereto shall affect the validity of the Administrative Agent Methodology or Administrative Agent Asset Value.
“Administrative Agent’s Account” shall mean the Administrative Agent’s bank account, described on Schedule I attached hereto, designated by the Administrative Agent from time to time by written notice to the Borrower.
“Advance” shall have the meaning set forth in Section 2.2(a).
“Affected Financial Institution” shall mean (a) any EEA Financial Institution or (b) any UK Financial Institution.
-4-
“Affected Party” shall have the meaning set forth in Section 2.11(b).
“Affiliate” shall mean, with respect to a Person, any other Person that (i) directly or indirectly through one or more intermediaries, controls, is controlled by, or is under direct or indirect common control with such Person or (ii) is an officer or director of such Person; provided that each Agency shall be specifically excluded as an Affiliate of any Lender. Solely for purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 25% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise; provided that other than the Borrower, Guarantor, and their respective Subsidiaries (as applicable), no other portfolio company of Stone Point Capital LLC or its Affiliates shall be deemed to be an “Affiliate” of the Borrower or Guarantor.
“Agency” shall mean Xxxxxx Xxx, Xxxxxxx Mac, and/or Xxxxxx Mae, as applicable.
“Agency Approvals” shall have the meaning set forth in Section 5.1(l).
“Agency Fee Letter” shall mean that certain side letter, dated as of the Closing Date, between the Borrower, Guarantor, and the Administrative Agent, with respect to certain pricing terms of the facility created hereby.
“Agency Guide” shall mean the Xxxxxx Xxx Agency Guide, the Xxxxxxx Mac Agency Guide, and/or the Xxxxxx Xxx Agency Guide, as applicable.
“Agency Requirements” shall mean, collectively, the Xxxxxx Mae Requirements, the Xxxxxxx Mac Requirements, and the Xxxxxx Mae Requirements.
“Agency Servicing Rights” shall mean, with respect to each Mortgage Loan, all of the Borrower’s right, title and interest in, to and under the related Servicing Contracts, whether now or hereafter existing, acquired or created, whether or not yet accrued, earned, due or payable, as well as all other present and future right and interest under such Servicing Contracts.
“Aggregate Advance Rate Cap” shall have the meaning set forth in the Agency Fee Letter.
“Aggregate Commitment Amount” shall mean at any time, the sum of the Commitments then in effect. The Aggregate Commitment Amount as of the Closing Date shall be equal to $500,000,000.
“Aggregate Facility Amount” shall mean $1,000,000,000.
“Aggregate Outstandings” shall mean the aggregate outstanding principal amount of the Advances.
“Agreement” shall have the meaning set forth in the introductory paragraph hereof.
“Alternative Rate” shall mean, for any day, a rate per annum equal to the sum of (a) [***] and (b) the rate calculated by the Federal Reserve Bank of New York based on such day’s federal funds transactions by depositary institutions (as determined in such manner as the Federal Reserve Bank of New York shall set forth on its public website from time to time) and
-5-
published on the next succeeding Business Day by the Federal Reserve Bank of New York as the federal funds effective rate; provided that if such rate is not published for any day that is a Business Day, the rate for a federal funds transaction quoted at 11:00 a.m. on such day received to the Administrative Agent from a federal funds broker of recognized standing selected by it; provided, that if at any time the Alternative Rate shall be less than the Floor, then the Alternative Rate shall be deemed to be the Floor at such time.
“Ancillary Income” shall mean all income derived from a Mortgage Loan, other than payments or collections in respect of principal, interest, escrow payments and prepayment penalties.
“Applicable Law” shall mean all applicable laws of any Governmental Authority, including laws relating to consumer leasing and protection and any ordinances, judgments, decrees, injunctions, writs and orders or like actions of any Governmental Authority and rules and regulations of any federal, regional, state, county, municipal or other Governmental Authority.
“Applicable Percentage” shall mean, for any Lender at any time, a percentage equal to a fraction, (a) the numerator of which is the amount of such Lender’s Commitment at such time plus, the amount of any Advances of such Lender in excess of such Lender’s Commitment then outstanding and (b) the denominator of which is the Aggregate Commitment Amount at such time plus, the Uncommitted Advance Amount at such time (provided that if the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon such Lender’s share of the aggregate Advances at such time. When a Defaulting Lender shall exist, the Applicable Percentage shall be calculated without inclusion of such Defaulting Lender’s Commitment and Advances.
“Applicable Tenor” shall mean the tenor applicable to the Cost of Funds Rate prior to the applicable Benchmark Replacement Date.
“ARRC” shall mean the Alternative Reference Rates Committee convened by the Federal Reserve Board and the Federal Reserve Bank of New York.
“Asset” shall mean all Xxxxxx Xxx MSRs, Xxxxxxx Mac MSRs, and Xxxxxx Mae MSRs of the Borrower, all of which are pledged to the Administrative Agent (on behalf of and for the ratable benefit of each Secured Party) pursuant to the terms hereof. For the avoidance of doubt, the Assets shall be identified on the applicable Schedule of Assets and updated no less frequently than monthly.
“Asset Management Strategy” shall mean the off-balance sheet asset management strategy disclosed by the Borrower to the Administrative Agent prior to the Closing Date, which strategy may be updated, from time to time, upon Borrower disclosing such updated strategy to the Administrative Agent; provided, however, that if such proposed strategy is substantially inconsistent with the strategy disclosed prior to the Closing Date, then such proposed strategy shall not constitute the “Asset Management Strategy” for purposes of this Agreement without prior consent of the Administrative Agent (such consent not to be unreasonably withheld).
“Assignment and Assumption” shall mean an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 10.8), and accepted by the Administrative Agent, in substantially the form of Exhibit D hereto or any other form approved by the Administrative Agent.
-6-
“Availability Period” shall mean, unless otherwise extended pursuant to and in accordance with Section 2.14, the period from the Closing Date until the earlier to occur of (i) an Event of Default, and (ii) the Availability Period End Date.
“Availability Period End Date” shall mean the earlier of (a) May 4, 2024, as such date may be extended pursuant to Section 2.14 and (b) the date the Obligations are accelerated pursuant to the terms of this Agreement.
“Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation” shall mean (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Bankruptcy Code” shall mean the U.S. Bankruptcy Code, 11 U.S.C. § 101, et seq., as amended.
“Base Servicing Fee” shall mean, with respect to the Portfolio of Mortgage Loans for each Agency and each Collection Period, an amount equal to the product of (A) the aggregate outstanding principal balance of the Mortgage Loans for such Agency included in such Portfolio as of the first day of such Collection Period multiplied by (B) one-twelfth of the Base Servicing Fee Rate; provided, however, that (1) with respect to all Mortgage Loans in the Portfolio for such Agency, if the initial Collection Period is less than a full month, such fee for each such Mortgage Loan shall be an amount equal to the product of the fee otherwise described above multiplied by a fraction, the numerator of which is the number of days in such initial Collection Period and the denominator of which is 30; (2) if any Xxxxxx Xxx Mortgage Loan, Xxxxxxx Mac Mortgage Loan, or Xxxxxx Xxx Mortgage Loan, as applicable, ceases to be part of such Portfolio during such Collection Period as a result of a termination of the Borrower’s duties as servicer under the applicable Servicing Contract, the portion of such amount that is attributable to such Xxxxxx Mae Mortgage Loan, Xxxxxxx Mac Mortgage Loan, or Xxxxxx Mae Mortgage Loan, as applicable, shall be adjusted to an amount equal to the product of the fee otherwise described above multiplied by a fraction, the numerator of which is the number of days in such Collection Period during which such Mortgage Loan was included in such Portfolio and denominator of which is 30.
“Base Servicing Fee Rate” means (i) with respect to any Mortgage Loan serviced for Xxxxxx Xxx pursuant to the applicable Servicing Contract, unless otherwise adjusted pursuant to and in accordance with Section 2.22, [***] per annum, (ii) with respect to any Mortgage Loan serviced for Xxxxxxx Mac pursuant to the applicable Servicing Contract, unless otherwise adjusted pursuant to and in accordance with Section 2.22, [***] per annum, and (iii) with respect to any Mortgage Loan serviced for Xxxxxx Xxx pursuant to the applicable Servicing Contract, unless otherwise adjusted pursuant to and in accordance with Section 2.22, [***] per annum.
-7-
“Basel III” shall mean Basel III: A global regulatory framework for more resilient banks and banking systems prepared by the Basel Committee on Banking Supervision, and all national implementations thereof.
“Benchmark” shall mean, initially, the SOFR Rate; provided that, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any determination of the Benchmark on any date, then, pursuant to Section 2.11(d)(i), the Benchmark Replacement will replace the then-current Benchmark for all purposes hereunder in respect of such determination on such date and all determinations on all subsequent dates; provided further that if the Benchmark as determined would be less than the Floor for any calculation period under the Agreement, the Benchmark will be the Floor for such period. “Benchmark Replacement” shall mean, with respect to any Applicable Tenor, the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for Dollar denominated syndicated or bilateral credit facilities at such time and (b) the related Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as determined above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Transaction Documents.
“Benchmark Replacement Adjustment” shall mean, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Accrual Period and Applicable Tenor for any setting of such Unadjusted Benchmark Replacement the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent for the applicable Corresponding Tenor in its sole and absolute discretion.
“Benchmark Replacement Conforming Changes” shall mean, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Business Day,” the definition of “Interest Accrual Period,” the definition of “Collection Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Transaction Documents).
-8-
“Benchmark Replacement Date” shall mean the earliest to occur of the following events with respect to the then-current Benchmark:
(1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark permanently or indefinitely ceases to provide such Benchmark; or
(2) in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein.
For the avoidance of doubt, if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination.
“Benchmark Transition Event” shall mean the occurrence of one or more of the following events with respect to the then-current Benchmark:
(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark announcing that such administrator has ceased or will cease to provide such Benchmark, permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Benchmark;
(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark, the central bank for the currency of such Benchmark, an insolvency official with jurisdiction over the administrator for such Benchmark, a resolution authority with jurisdiction over the administrator for such Benchmark or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark, which states that the administrator of such Benchmark has ceased or will cease to provide such Benchmark permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Benchmark; or
(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark announcing that such Benchmark is no longer representative.
“Benchmark Unavailability Period” shall mean (a) if a Benchmark Transition Event has not occurred, unless and until a Benchmark Replacement is implemented with respect to the then-current Benchmark in accordance with Section 2.11(d), each (if any) Interest Accrual Period for which, Administrative Agent for any reason determines (which determination shall be conclusive and binding absent manifest error) that, other than as a result of a Benchmark Transition Event reasonable and adequate means do not exist for ascertaining the then-current Benchmark for an applicable Interest Accrual Period, (b) if a Benchmark Transition Event has occurred, the period (if any) (i) beginning at the time that a Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder in accordance with Section 2.11(d) and (ii) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark, or (c) at any time, (i) beginning at the time of the adoption of any requirement of law or any change therein or in the interpretation or application thereof that makes it unlawful for any Lender to maintain an Advance at the then current Benchmark as contemplated hereunder (such occurrence, an “Illegality Condition”) and (ii) ending at the time any such Illegality Condition is no longer in effect.
-9-
“Beneficial Ownership Certification” shall mean a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” shall mean 31 C.F.R. § 1010.230.
“BHC Act Affiliate” of a party shall mean an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
“Borrower” shall have the meaning set forth in the introductory paragraph hereof.
“Borrower’s Account” shall mean (i) the Borrower’s bank account, described on Schedule I attached hereto, for the account of the Borrower or (ii) such other account as may be designated by the Borrower from time to time by at least ten (10) Business Days’ prior written notice to the Administrative Agent and the Lenders, so long as such other account is acceptable to the Administrative Agent in its sole and absolute discretion.
“Borrower Collateral” shall have the meaning set forth in Section 2.17.
“Borrowing Base” shall mean, as of any date of determination, with respect to MSRs that are Eligible Assets, clause (a) or (b) below, as applicable:
(a) if a Borrowing Base Dispute has not been initiated with respect to such date, or a Borrowing Base Dispute has been initiated but the Valuation Agent Asset Value has not yet been determined pursuant to Section 2.6(b), the Administrative Agent Asset Value thereof; or
(b) if a Borrowing Base Dispute has been initiated and the Valuation Agent Asset Value has been determined pursuant to Section 2.6(b), the lesser of (1) the Valuation Agent Asset Value (provided that the value attributed to that portion of the Valuation Agent Asset Value pertaining to Xxxxxx Mae MSRs shall be reduced such that the Xxxxxx Xxx Borrowing Base remains at or below the Xxxxxx Mae Concentration Limit), and (2) the Borrowing Base Cap.
“Borrowing Base Advance Rate Cap Amount” shall mean the product of (a) the sum of (1) the product of (A) the most recently determined Administrative Agent Xxxxxx Xxx Market Value Percentage, and (B) the aggregate unpaid principal balance of the Mortgage Loans related to the Xxxxxx Mae MSRs, (2) the product of (A) the most recently determined Administrative Agent Xxxxxxx Mac Market Value Percentage, and (B) the aggregate unpaid principal balance of the Mortgage Loans related to the Xxxxxxx Mac MSRs, and (3) the product of (A) the most recently determined Administrative Agent Xxxxxx Xxx Market Value Percentage, and (B) the aggregate unpaid principal balance of the Mortgage Loans related to the Xxxxxx Mae MSRs; provided however, that the Administrative Agent Xxxxxx Xxx Asset Value of Xxxxxx Mae MSRs shall be reduced such that the Xxxxxx Xxx Borrowing Base remains at or below the Xxxxxx Mae Concentration Limit and (b) the Aggregate Advance Rate Cap.
“Borrowing Base Cap” shall mean the lesser of (a) the sum of (1) Borrowing Base Cap Fannie Amount, (2) the Borrowing Base Cap Xxxxxxx Amount, and (3) the Borrowing Base Cap Xxxxxx Amount and (b) the Borrowing Base Advance Rate Cap Amount.
“Borrowing Base Cap Fannie Amount” shall mean the product of (A) the most recently determined Administrative Agent Xxxxxx Xxx Market Value Percentage, (B) the
-10-
aggregate unpaid principal balance of the Mortgage Loans related to the Xxxxxx Mae MSRs, and (C) the Xxxxxx Xxx Advance Rate Cap.
“Borrowing Base Cap Xxxxxxx Amount” shall mean the product of (A) the most recently determined Administrative Agent Xxxxxxx Mac Market Value Percentage, (B) the aggregate unpaid principal balance of the Mortgage Loans related to the Xxxxxxx Mac MSRs, and (C) the Xxxxxxx Mac Advance Rate Cap.
“Borrowing Base Cap Xxxxxx Amount” shall mean the product of (A) the most recently determined Administrative Agent Xxxxxx Xxx Market Value Percentage, (B) the aggregate unpaid principal balance of the Mortgage Loans related to the Xxxxxx Mae MSRs, and (C) the Xxxxxx Xxx Advance Rate Cap; provided however, that the Administrative Agent Xxxxxx Mae Asset Value of Xxxxxx Xxx MSRs shall be reduced such that the Xxxxxx Mae Borrowing Base remains at or below the Xxxxxx Xxx Concentration Limit.
“Borrowing Base Certificate” shall mean the certificate in the form of Exhibit A attached to each Notice of Borrowing (a copy of which shall, at the request of Xxxxxx Mae, be delivered to Xxxxxx Xxx).
“Borrowing Base Deficiency” shall exist with respect to the Borrowing Base on any date on which:
(i) the aggregate amount of Advances exceeds the Aggregate Commitment Amount plus the Uncommitted Advance Amount,
(ii) if no Borrowing Base Dispute has been initiated and is outstanding, the Effective Advance Rate with respect to the Eligible Assets of any Agency exceeds the Xxxxxx Mae Advance Rate, Xxxxxxx Mac Advance Rate, or Xxxxxx Mae Advance Rate, as applicable, by [***] or more,
(iii) if a Borrowing Base Dispute has been initiated but the Valuation Agent Asset Value has not yet been determined pursuant to Section 2.6(b), the Effective Advance Rate with respect to the Eligible Assets of any Agency exceeds the Xxxxxx Xxx Advance Rate Cap, the Xxxxxxx Mac Advance Rate Cap or the Xxxxxx Xxx Advance Rate Cap, as applicable,
(iv) if a Borrowing Base Dispute has been initiated, the Valuation Agent Asset Value has been determined pursuant to Section 2.6(b), and the Borrowing Base is being calculated pursuant to clause (b) of the definition thereof, (a) the Effective Advance Rate with respect to the Eligible Assets of any Agency exceeds the Xxxxxx Mae Advance Rate, Xxxxxxx Mac Advance Rate, or the Xxxxxx Mae Advance Rate, as applicable, by [***] or more, or (b) the portion of Advances relating to the Eligible Assets of any Agency exceeds the Borrowing Base Cap Fannie Amount, the Borrowing Base Cap Xxxxxxx Amount or the Borrowing Base Cap Xxxxxx Amount, as applicable,
(v) the Effective Advance Rate of the Eligible Assets of all Agencies exceeds the Aggregate Advance Rate Cap or
(vi) there exists a Minimum Haircut Trigger Event.
“Borrowing Base Deficiency Notice” shall have the meaning set forth in Section 2.6.
“Borrowing Base Dispute” shall have the meaning set forth in Section 2.6(b).
-11-
“Borrowing Base Required Payment” shall mean the greater of an amount necessary to (a) cause the Aggregate Outstandings to equal the lesser of (i) the Aggregate Commitment Amount plus the Uncommitted Advance Amount as of such date and (ii) the Borrowing Base, or (b) eliminate any existing Minimum Haircut Trigger Event.
“Borrowing Date” shall mean, with respect to any Advance, the date of the making of such Advance, which date shall in any case be a Business Day.
“Business Day” shall mean (i) any day excluding Saturday, Sunday, any day which is a legal holiday under the laws of the State of New York, the State of Michigan or the State of Texas, any day on which banking institutions located in any such state are authorized or required by law or other governmental action to close, and any day on which the New York Stock Exchange or the Federal Reserve Bank of New York is authorized or obligated by law or executive order to be closed.
“Capital Stock” shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents, including membership interests (however designated, whether voting or non-voting) of equity of such Person, including, if such Person is a partnership, partnership interests (whether general or limited) or any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership, but in no event will Capital Stock include any debt securities convertible or exchangeable into equity unless and until actually converted or exchanged.
“Capitalized Lease Obligation” shall mean, for any Person, the amount of Indebtedness under a lease of property by such Person that would be shown as a liability on a balance sheet of such Person prepared for financial reporting purposes in accordance with GAAP.
“Cash” shall mean money, currency or a credit balance on hand or in any demand or deposit account.
“Cash Equivalents” shall mean, as at any date of determination, any of the following: (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (b) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one year after such date and having, at the time of the acquisition thereof, a rating of at least “A-1” from S&P or at least “P-1” from Moody’s; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within [***] after such date and having, at the time of the acquisition thereof, a rating of at least “A-1” from S&P or at least “P-1” from Moody’s; (iii) certificates of deposit or bankers’ acceptances maturing within [***] after such date and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (a) is at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator), (b) has Tier 1 capital (as defined in such regulations) of not less than [***] and (c) has a rating of at least “AA-“ from S&P and “Aa3” from Moody’s; and (iv) shares of any money market mutual fund that (a) has substantially all of its assets invested continuously in the types of investments referred to in clauses (i) and (ii) above, (b) has net assets of not less than [***] and (c) has the highest rating obtainable from either S&P or Moody’s.
“Change in Law” shall mean (i) the adoption or taking effect of any Law after the date of this Agreement, (ii) any change in Law or in the administration, interpretation,
-12-
application or implementation thereof by any Governmental Authority after the date of this Agreement, (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority after the date of this Agreement or (iv) compliance by any Affected Party, by any lending office of such Affected Party or by such Affected Party’s holding company, if any, with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that notwithstanding anything herein to the contrary, (a) the Xxxx-Xxxxx Act, (b) Basel III and (c) all requests, rules, guidelines and directives under either of the Xxxx-Xxxxx Act or Basel III or issued in connection therewith shall be deemed to be a “Change in Law”, regardless of the date implemented, enacted, adopted or issued.
“Change of Control” shall occur at any time the Permitted Holders fail to collectively own, directly or indirectly, at least (i) 50.01% of the Equity Interests of the Borrower and of the Guarantor, and (ii) a majority of the aggregate ordinary voting power for the election of directors (or persons performing similar functions) of the Borrower and of the Guarantor.
“Closing Date” shall mean May 4, 2021.
“Collateral” shall have the meaning set forth in Section 2.17.
“Collection Account” shall have the meaning set forth in Section 8.1.
“Collection Period” shall mean, with respect to a Monthly Payment Date, the calendar month preceding the month in which such Monthly Payment Date occurs.
“Collections” shall mean, with respect to any Asset and with respect to a Collection Period, any Servicing Income (other than retained yield, Ancillary Income and the applicable Base Servicing Fee) that the Borrower as servicer is entitled to receive free and clear of all Agency rights and other restrictions on transfer under applicable Agency guidelines, pursuant to the Servicing Contracts during such Collection Period. For the avoidance of doubt, Collections shall not include reimbursements of Servicing Advance Receivables.
“Committed Advance” shall have the meaning set forth in Section 2.2(a).
“Commitment” shall mean the commitment of a Lender to fund Advances, in an amount as set forth on Exhibit E or in the applicable Assignment and Assumption, subject to any increase, reduction or other adjustment in the amount thereof pursuant to the terms and conditions hereof.
“Commitment Percentage” shall mean, a percentage equal to a fraction, the numerator of which is the amount of such Lender’s Commitment at such time and the denominator of which is the Aggregate Commitment Amount at such time. In the case of Section 2.16, when a Defaulting Lender shall exist, the Commitment Percentage shall be calculated without inclusion of such Defaulting Lender’s Commitment.
“Compliance Certificate” shall mean a Compliance Certificate substantially in the form of Exhibit A.
“Compounded SOFR” shall mean the rate determined daily by the Administrative Agent, to be the “USD-SOFR-Compound” rate as defined in the ISDA Definitions; provided, however, that for purposes of such definition (i) the term “Calculation Period” shall mean, with respect to any date on which a payment is due, the period beginning on and including five (5) Business Days prior to the previous payment date and ending on and
-13-
including the fifth (5th) Business Day before such payment date, and (ii) the term “Reset Date” shall mean such payment date.
“Confidential Information” shall have the meaning set forth in Section 10.16.
“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. Controlling and Controlled have meanings correlative thereto.
“Corporate Debt” shall mean, as of any date of determination, the aggregate stated balance sheet amount of all Indebtedness of the Guarantor, the Borrower and its Subsidiaries (or, if higher, the par value of stated face amount of all such Indebtedness) determined on a consolidated basis in accordance with GAAP.
“Corporate Debt to Tangible Net Worth Ratio” shall mean the ratio as of the last day of each calendar month (commencing with the first full month ending after the Closing Date) of (a) Corporate Debt as of such date to (b) Adjusted Tangible Net Worth as of such date.
“Corresponding Tenor” with respect to a Benchmark Replacement, shall mean a tenor (including overnight) having approximately the same length (disregarding business day adjustment) as the Applicable Tenor for the applicable accrual period with respect to the then-current Benchmark.
“Cost of Funds” shall mean, with respect to any Interest Accrual Period, the amount of interest accrued during such Interest Accrual Period on the outstanding Advances at the Cost of Funds Rate.
“Cost of Funds Margin” shall mean (a) with respect to Advances in respect of Xxxxxxx Mac MSRs, the Xxxxxxx Mac Margin Rate, (b) with respect to Advances in respect of Xxxxxx Mae MSRs, the Xxxxxx Xxx Margin Rate and (c) with respect to Advances in respect of Xxxxxx Mae MSRs, the Xxxxxx Xxx Margin Rate.
“Cost of Funds Rate” shall mean, with respect to each Advance, the sum of (a) either the then applicable Benchmark or, during a Benchmark Unavailability Period, the Alternative Rate, and (b) the Cost of Funds Margin for such Advance.
“Covered Entity” shall mean any of the following:
(a) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(b) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R.§ 47.3(b); or
(c) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R.§ 382.2(b).
“Covered Party” shall have the meaning assigned to such term in Section 10.22.
-14-
“Credit Enhancement Agreement” shall mean, collectively, any documents, instruments, guarantees or agreements entered into by the Borrower, any of its Subsidiaries, or any Securitization Entity for the purpose of providing credit support (that is reasonably customary as determined by the Borrower’s senior management) with respect to any Indebtedness or Securitization.
“Credit Manager” shall mean Weston Portfolio Group, LLC and any successor thereto in such capacity.
“Credit Manager Agreement” shall mean the Credit Manager Agreement, dated as of the Closing Date among Credit Manager, the Borrower and Administrative Agent.
“Credit Manager Fees” shall mean the fees due and owing to the Credit Manager as set forth in the Credit Manager Agreement or in any successor agreement thereto, which shall not in any event exceed [***] per annum.
“Dealer” shall mean any mid-market dealer in hedging, swap or similar derivatives contracts identified on Schedule III hereto, as may be amended from time to time by the Administrative Agent, the Borrower and the Majority Lenders.
“Defaulting Lender” shall mean any Lender, as determined by the Administrative Agent, that has (a) failed to fund any portion of its Advances within three (3) Business Days of the date required to be funded by it hereunder, (b) notified the Borrower, the Administrative Agent, or any Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or under other agreements in which it commits to extend credit, (c) failed, within three (3) Business Days after request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Advances (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such confirmation in writing by the Administrative Agent and the Borrower), (d) otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within three (3) Business Days of the date when due, unless the subject of a good faith dispute or (e)(i) become or is insolvent or has a parent company that has become or is insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Lender shall not be a Defaulting Lender solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority of the United States of America or instrumentality thereof so long as such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person. For the avoidance of doubt, without any implication to the contrary, no determination by a Lender not to fund an Advance in excess of such Lender’s Commitment (which may be made in the sole and absolute discretion of such Lender) may cause such Lender to constitute a Defaulting Lender.
-15-
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“Derivatives Contract” shall mean any rate swap transaction, basis swap, credit derivative transaction, forward rate transaction, commodity swap, commodity option, futures contract, forward commodity contract, mortgage-related forward pools contracts, including derivatives or “TBA’s”, equity or equity index swap or option, bond or bond price or bond index swap or option or forward bond or forward bond price or forward bond index transaction, interest rate option, forward foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, spot contract, or any other similar transaction or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, including any obligations or liabilities thereunder. Notwithstanding anything herein to the contrary, neither Administrative Agent nor the Lenders shall have any rights in any Derivative Contract entered into between the Borrower and any Agency.
“Disposition” and “Disposed” shall mean, with respect to any Person, any sale or other whole or partial conveyance of all or any portion of such Person’s property, or any direct or indirect interest therein to a third party, including the granting of any purchase options, rights of first refusal, rights of first offer or similar rights in respect of any portion of such assets or the subjecting of any portion of such assets to restrictions on transfer.
“Distributable Amounts” shall mean, with respect to each Monthly Payment Date, (i) all costs, expenses, reimbursements and indemnification amounts required to be paid to the Administrative Agent and the Lenders pursuant to the terms of the Transaction Documents; (ii) the Credit Manager Fees with respect to such Monthly Payment Date and all costs, expenses, reimbursements and indemnification amounts of the Credit Manager; (iii) the Interest Distribution Amount with respect to such Monthly Payment Date and the Non-Usage Fee, if any, with respect to such Monthly Payment Date, and the Minimum Utilization Fee, if any, with respect to such Monthly Payment Date; (iv) to the extent a Borrowing Base Deficiency exists as of such Monthly Payment Date, the Borrowing Base Required Payment; (v) with respect to each Monthly Payment Date occurring after the Availability Period End Date, any Additional Principal Amortization Amounts due and payable on such Monthly Payment Date; and (vi) all amounts that are then due and payable pursuant to Section 2.11.
“Division Transaction” shall mean, with respect to any Person that is a limited liability company organized under the laws of the State of Delaware, that any such Person (a) divides into two or more Persons (whether or not the original Person or Subsidiary thereof survives such division) or (b) creates, or reorganizes into, one or more series, in each case, as contemplated under the laws of the State of Delaware, including Section 18-217 of the Delaware Limited Liability Company Act.
“Xxxx-Xxxxx Act” shall mean the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act.
“Dollar”, “Dollars”, “U.S. Dollars” and the symbol “$” shall mean the lawful currency of the United States.
“EEA Financial Institution” shall mean (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established
-16-
in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” shall mean any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” shall mean any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any credit institution or investment firm established in any EEA Member Country.
“Effective Advance Rate” shall mean, (a) with respect to the Eligible Assets of any Agency, the quotient of (i) the outstanding Advances with respect to the Eligible Assets of such Agency, divided by (ii) that portion of the Borrowing Base attributed to the value of Xxxxxx Mae MSRs, Xxxxxxx Mac MSRs, or Xxxxxx Mae MSRs, as applicable and (b) with respect to the Eligible Assets of all Agencies, (i) the Aggregate Outstandings, divided by (ii) the Borrowing Base. For the sake of clarity, the portion of Xxxxxx Xxx MSR, Xxxxxxx Mac MSR or Xxxxxx Mae MSR included in the Borrowing Base shall not be reduced by the application of the Xxxxxx Xxx Advance Rate, Xxxxxxx Mac Advance Rate or Xxxxxx Xxx Advance Rate, as applicable.
“Eligible Asset” shall mean, as of any date of determination, any Asset that satisfies each of the following criteria:
(a) for which the Borrower is acting in the capacity of servicer under a Servicing Contract, which Servicing Contract (i) is in full force and effect, and (ii) with respect to which the Borrower is not in default in any material respect thereunder;
(b) which complies with all Applicable Laws in all material respects;
(c) which is genuine and constitutes a legal, valid, binding and irrevocable payment obligation, enforceable in accordance with the terms of the related Servicing Contract, under which it has arisen, subject to no offsets, counterclaims or defenses;
(d) which provides for payment in Dollars;
(e) which was not originated in or subject to the Laws of a jurisdiction whose Laws would make such Asset, the related Servicing Contract or the financing thereof contemplated hereby unlawful, invalid or unenforceable; and is not subject to any legal limitation on transfer;
(f) which is owned solely by the Borrower, subject to a Servicing Contract, and is free and clear of all Liens other than Permitted MSR Collateral Liens and has not been sold, conveyed, pledged or assigned to any other lender, purchaser or Person;
(g) which is not an obligation of the United States of America, any State or any agency or instrumentality or political subdivision thereof (other than an Agency);
(h) in respect of which the information set forth in the Schedule of Eligible Assets and the related Servicing Contract is true and correct in all material respects;
(i) in respect of which, each of the representations and warranties set forth on Section 4.1(aa) are true and correct in all material respects;
-17-
(j) such Asset constitutes a “general intangible” as defined in the UCC and is not evidenced by an “instrument” or “security” as defined in the UCC as so in effect;
(k) the Borrower has all required licenses and registrations necessary to own the Asset and to service the Mortgage Loan (including to collect amounts owing with respect thereto) in the jurisdiction where the Mortgaged Property is located;
(l) other than pursuant to this Agreement, there exist no Liens, pledges, assignments, or financings of any kind secured by the MSRs (or any portion thereof) of the applicable Agency to which the respective Asset relates; provided, however, that nothing in this clause (l) shall cause any MSR to cease to be an Eligible Asset solely because Servicing Advance Receivables related to such MSR have been pledged in connection with Permitted Servicing Advance Facility Indebtedness;
(m) with respect to Xxxxxx Mae MSRs, the Xxxxxx Xxx Acknowledgment Agreement has been executed by the parties, and the pledge of such Asset is consented to thereunder;
(n) with respect to Xxxxxxx Mac MSRs, the Xxxxxxx Mac Acknowledgment Agreement has been executed by the parties, and the pledge of such Asset is consented to thereunder; and
(o) with respect to Xxxxxx Mae MSRs, the Xxxxxx Xxx Acknowledgment Agreement has been executed by the parties, and the pledge of such Asset is consented to thereunder.
“Environmental Claim” shall mean any investigation, notice, notice of violation, claim, action, suit, proceeding, demand, abatement order or other order or directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (i) pursuant to or in connection with any actual or alleged violation of any Environmental Law; or (ii) in connection with any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.
“Environmental Laws” shall mean any and all current or future federal or state (or any subdivision of either of them), statutes, ordinances, orders, rules, regulations, judgments, Governmental Authorizations, or any other requirements of Governmental Authorities relating to (i) environmental matters; (ii) the generation, use, storage, transportation or disposal of Hazardous Materials; or (iii) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health or welfare, in any manner applicable to the Guarantor, the Borrower or any of their Subsidiaries or any Mortgaged Property.
“Equity Interests” shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA, as in effect at the Closing Date and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.
-18-
“ERISA Affiliate” shall mean each Person (as defined in Section 3(9) of ERISA), which together with the Borrower is a “single employer” within the meaning of Sections 414(b), (c), (m) or (o) of the Internal Revenue Code or Sections 4001(a)(14) or 4001(b)(1) of ERISA.
“ERISA Event” shall mean (i) that a Reportable Event has occurred with respect to any Single-Employer Plan; (ii) the institution of any steps by the Borrower, the Guarantor, or any ERISA Affiliate, the Pension Benefit Guaranty Corporation or any other Person to terminate any Single-Employer Plan or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, a Single-Employer Plan; (iii) the institution of any steps by the Borrower, the Guarantor, or any ERISA Affiliate to withdraw from any Multi-Employer Plan or written notification of the Borrower or any ERISA Affiliate concerning the imposition of withdrawal liability; (iv) a non-exempt “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue Code in connection with any Single-Employer Plan or Multi-Employer Plan; (v) the cessation of operations at a facility of the Borrower or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (vi) with respect to a Single-Employer Plan, a failure to satisfy the minimum funding standard under Section 412 of the Internal Revenue Code or Section 302 of ERISA, whether or not waived; (vii) the conditions for imposition of a lien under Section 303(k) of ERISA shall have been met with respect to a Single-Employer Plan; (viii) a determination that a Single-Employer Plan is or is expected to be in “at-risk” status (within the meaning of Section 430(i)(4) of the Internal Revenue Code or Section 303(i)(4) of ERISA); (ix) the insolvency of a Multi-Employer Plan, written notification that a Multi-Employer Plan is in “endangered” or “critical” status (within the meaning of Section 432 of the Internal Revenue Code or Section 305 of ERISA), or any failure by the Borrower or any ERISA Affiliate to make any required payment or contribution to a Multi-Employer Plan; or (x) the taking of any action by, or the threatening of the taking of any action by, the IRS, the Department of Labor or the Pension Benefit Guaranty Corporation with respect to any of the foregoing.
“Escrow Account” shall mean any account established by the Borrower into which it deposits and retains therein all collections from mortgagors of the related mortgage loans for the payment of taxes, assessments, insurance premiums or comparable items for the account of such mortgagors.
“EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“Event of Default” shall have the meaning set forth in Section 6.1.
“Excluded Accounts” shall mean (i) all Related Principal and Interest Custodial Accounts (ii) Escrow Accounts and (iii) any segregated deposit accounts or securities account containing solely deposits that constitute pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation, in each case, to the extent and for so long as the contract or other agreement in which such Lien is granted validly prohibits the creation of any other Lien on such property.
“Excluded Collateral” shall mean (i) all Warehoused Mortgage Loans, all ancillary rights, including Agency Servicing Rights relating to such Warehoused Mortgage Loans, all collection accounts and rights to proceeds relating to such Warehoused Mortgage Loans, all hedge agreements relating to such Warehoused Mortgage Loans, and all purchase agreements relating to such Warehoused Mortgage Loans, in each case, that are subject to a Permitted Warehouse Financing with a warehousing party, during such time, but only for such
-19-
time, as such Warehoused Mortgage Loans are subject to such Permitted Warehouse Financing; (ii) all Servicing Advance Receivables securing or backing Permitted Servicing Advance Facility Indebtedness, all collection accounts and rights to proceeds relating solely to the securing or backing of Permitted Servicing Advance Facility Indebtedness, and all hedge agreements relating to Permitted Servicing Advance Facility Indebtedness entered into in the ordinary course of business; (iii) any of the Borrower’s or such Subsidiary’s right, title or interest in any lease, permit, license, license agreement, contract or agreement to which the Borrower or such Subsidiary is a party as of the Closing Date or any of its right, title or interest thereunder to the extent, but only to the extent, that such a grant would, under the express terms of such lease, permit, license, license agreement, contract or agreement on the Closing Date result in a breach of the terms of, or constitute a default under, such lease, permit, license, license agreement, contract or agreement (other than to the extent that (A) any such term has been waived, (B) the consent of the other party to such lease, permit, license, license agreement, contract or agreement has been obtained, or (C) any such term would be rendered ineffective pursuant to Sections 9-406, 9-408, 9-409 of the UCC or other applicable provisions of the UCC of any relevant jurisdiction or any other Applicable Law (including the Bankruptcy Code) or principles of equity); provided, that (x) immediately upon the ineffectiveness, lapse, termination or waiver of any such provision, the Collateral shall include, and the Borrower or the Guarantor shall be deemed to have granted a security interest in, all such right, title and interest as if such provision had never been in effect and (y) the foregoing exclusion shall in no way be construed so as to limit, impair or otherwise affect the Administrative Agent’s unconditional continuing security interest in and liens upon any rights or interests of the Borrower or the Guarantor in or to (1) the proceeds of, or any monies due or to become due under, any such lease, permit, license, license agreement, contract or agreement (including any Accounts, proceeds of Inventory or Equity Interests), and (2) the proceeds from the sale, license, lease, or other dispositions of any such lease, permit, license, license agreement, contract or agreement; (iv) any intent-to-use United States trademark applications for which an amendment to allege use or statement of use has not been filed under 15 U.S.C. § 1051(c) or 15 U.S.C. § 1051(d), respectively, or if filed, has not been deemed in conformance with 15 U.S.C. § 1051(a) or examined and accepted, respectively, by the United States Patent and Trademark Office, provided, that, upon such filing and acceptance, such intent-to-use applications shall be included in the definition of Collateral; (v) any Excluded Accounts; and (vi) any fee owned real property and all leasehold property interests (including REO Assets).
“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (i) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (a) imposed as a result of such Recipient being organized under the Laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (b) that are Other Connection Taxes, (ii) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in an Advance or Commitment pursuant to a Law in effect on the date on which (a) such Lender acquires such interest in the Advance or Commitment or (b) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.15, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (iii) Taxes attributable to such Recipient’s failure to comply with Section 2.15(g) and (iv) any withholding Taxes imposed under FATCA.
“Existing Credit Agreement” shall have the meaning given such term in the Recitals.
-20-
“Exit Fee” shall have the meaning set forth in the Administrative Agent Fee Letter.
“Xxxxxx Xxx” shall mean the Federal National Mortgage Association, its successors and permitted assigns.
“Xxxxxx Mae Acknowledgment Agreement” shall mean the Second Amended and Restated Acknowledgment Agreement to be entered into by and among Xxxxxx Xxx, the Borrower and the Administrative Agent on or about the Closing Date, pursuant to which Xxxxxx Mae acknowledges the pledge of the Fannie MSRs under this Agreement.
“Xxxxxx Mae Advance Rate” shall have the meaning set forth in the Agency Fee Letter.
“Xxxxxx Xxx Advance Rate Cap” shall have the meaning set forth in the Agency Fee Letter.
“Xxxxxx Mae Agency Guide” shall mean with respect to any Xxxxxx Xxx Mortgage Loan, the Xxxxxx Mae Selling Guide and the Xxxxxx Xxx Servicing Guide, as amended from time to time, and any related announcements, directives and correspondence issued by Xxxxxx Mae.
“Xxxxxx Xxx Lender Contract” shall mean the Mortgage Selling and Servicing Contract (as mentioned in the Xxxxxx Mae Acknowledgment Agreement), the Xxxxxx Xxx Selling Guide (as defined as Selling Guide in the Xxxxxx Mae Acknowledgment Agreement), the Xxxxxx Xxx Servicing Guide and all supplemental servicing instructions or directives provided by Xxxxxx Mae, all applicable master agreements, recourse agreements, repurchase agreements, indemnification agreements, loss-sharing agreements, and any other agreements between Xxxxxx Xxx and the Borrower, which rights include the right of Xxxxxx Mae to terminate the Xxxxxx Xxx Lender Contract with or without cause and the right to sell, or have transferred, the Xxxxxx Mae MSRs.
“Xxxxxx Xxx Margin Rate” shall have the meaning set forth in the Agency Fee Letter.
“Xxxxxx Mae Mortgage Loan” shall mean the mortgage loans underlying Xxxxxx Xxx MSRs, which shall be identified as “Xxxxxx Mae Mortgage Loans” on the applicable Schedule of Assets.
“Xxxxxx Xxx MSRs” shall mean MSRs held by the Borrower with respect to Mortgage Loans owned, or that have been securitized in mortgage-backed Securitization transactions guaranteed by, Xxxxxx Mae and pledged to the Administrative Agent, for the benefit of the Lenders, pursuant to this Agreement.
“Xxxxxx Xxx Requirements” shall mean the rights and interests of Xxxxxx Mae in and to the Assets arising under the Servicing Contract, Xxxxxx Xxx Acknowledgment Agreement, the Xxxxxx Mae Agency Guide, or any other agreement between the Borrower and Xxxxxx Xxx.
“Xxxxxx Xxx Servicing Guide” shall have the meaning of Servicing Guide as set forth in the Xxxxxx Mae Acknowledgment Agreement.
-21-
“FATCA” shall mean Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code, and any intergovernmental agreements entered into in connection with the implementation of such sections of the Internal Revenue Code, and any fiscal or regulatory legislation, rules or practices adopted pursuant to such intergovernmental agreements, treaty or convention among Governmental Authorities and implementing such sections of the Internal Revenue Code.
“Federal Reserve Bank of New York’s Website” shall mean the website of the Federal Reserve Bank of New York at xxxx://xxx.xxxxxxxxxx.xxx, or any successor source.
“Fee Letter” shall mean the Agency Fee Letter and the Administrative Agent Fee Letter.
“FHA” shall mean The Federal Housing Administration.
“Financial Covenants” shall mean those financial covenants set forth in Section 5.1(a).
“Floor” shall mean [***].
“Xxxxxxx Mac” shall mean the Federal Home Loan Mortgage Corporation, its successors and permitted assigns.
“Xxxxxxx Mac Acknowledgment Agreement” shall mean the Amended and Restated Acknowledgment Agreement, as amended from time to time, entered into by and among Xxxxxxx Mac, the Borrower and the Administrative Agent.
“Xxxxxxx Mac Advance Rate” shall have the meaning set forth in the Agency Fee Letter.
“Xxxxxxx Mac Advance Rate Cap” shall have the meaning set forth in the Agency Fee Letter.
“Xxxxxxx Mac Agency Guide” shall mean with respect to any Xxxxxxx Mac Mortgage Loan, the Xxxxxxx Mac Single-Family Seller/Servicer Guide, as it may be amended from time to time.
“Xxxxxxx Mac MSR Collateral” shall mean that portion of the MSR Collateral related to the Xxxxxxx Mac MSRs.
“Xxxxxxx Mac MSRs” shall mean MSRs held by the Borrower with respect to Mortgage Loans owned by, or that have been securitized in mortgage-backed Securitization transactions guaranteed by, Xxxxxxx Mac and pledged to the Administrative Agent, for the benefit of the Lenders, pursuant to this Agreement and subject to the Xxxxxxx Mac Acknowledgment Agreement.
“Xxxxxxx Mac Margin Rate” shall have the meaning set forth in the Agency Fee Letter.
-22-
“Xxxxxxx Mac Mortgage Loan” shall mean the mortgage loans underlying Xxxxxxx Mac MSRs, which shall be identified as “Xxxxxxx Mac Mortgage Loans” on the applicable Schedule of Assets.
“Xxxxxxx Mac Purchase Documents” has the meaning given to the term “Purchase Documents” in the Xxxxxxx Mac Agency Guide.
“Xxxxxxx Mac Requirements” shall mean the rights and interests of Xxxxxxx Mac in and to the Assets arising under the Xxxxxxx Mac Servicing Contract or the Xxxxxxx Mac Acknowledgment Agreement, any VPC Agreement, the Xxxxxxx Mac Agency Guide, or any other agreement between the Borrower and Xxxxxxx Mac.
“Xxxxxxx Mac Servicing Contract” shall mean collectively, with respect to each Xxxxxxx Mac Mortgage Loan, (i) the unitary, indivisible master servicing agreement described in the Xxxxxxx Mac Agency Guide entered into between Xxxxxxx Mac and the Borrower, (ii) the Xxxxxxx Mac Purchase Documents, (iii) the Xxxxxxx Mac Agency Guide, (iv) any Bulletins (as defined in the Xxxxxxx Mac Agency Guide, (v) any agreement pursuant to which the Borrower provides a guaranty or any form of credit enhancement in connection with the sale of Xxxxxxx Mac Mortgage Loans to Xxxxxxx Mac (vi) the Servicer Success Scorecard (as defined in the Xxxxxxx Mac Agency Guide), (vii) any other document designated to be a Xxxxxxx Mac Purchase Document by Xxxxxxx Mac, (viii) the Guide Plus Additional Provisions (as defined in the Xxxxxxx Mac Agency Guide) and (ix) any other additional terms applicable to the sale of Xxxxxxx Mac Mortgage Loans, such as written waivers, amendments or supplements to the Xxxxxxx Mac Agency Guide that are made available to the Borrower by Xxxxxxx Mac through electronic means including sources designated by Xxxxxxx Mac for distribution of the Xxxxxxx Mac Agency Guide, as any or all of the items in (i) through (ix) inclusive may be amended, modified, restated, supplemented or replaced from time to time..
“Funding Base Deficiency” shall exist with respect to the Borrowing Base on any date on which the Aggregate Outstandings exceeds the lesser of (a) the Aggregate Commitment Amount plus the Uncommitted Advance Amount on such date and (b) the Borrowing Base.
“Futures Account” shall mean an account, if any, opened in the name of Borrower under an agreement governing futures and options on futures transactions between Borrower and a financial institution to be determined by the Borrower and for which an account control agreement shall be entered into by and among the Borrower, such financial institution and the Administrative Agent, pursuant to which the Administrative Agent shall be granted control (as defined in Section 9-106(b) of the UCC) and the ability to direct such financial institution with respect to permitted withdrawals from the Futures Account following an Event of Default hereunder.
“GAAP” shall mean generally accepted accounting principles as are in effect from time to time and applied on a consistent basis (except for changes in application in which the Borrower’s or Guarantor’s, as applicable, independent certified public accountants and the Administrative Agent reasonably agree) both as to classification of items and amounts.
“Xxxxxx Mae” shall mean the Government National Mortgage Association, its successors and permitted assigns.
“Xxxxxx Xxx Acknowledgment Agreement” shall mean the Amended and Restated Acknowledgment Agreement dated May 20, 2021 by and among Xxxxxx Mae, the Borrower and the Administrative Agent.
-23-
“Xxxxxx Xxx Advance Rate” shall have the meaning set forth in the Agency Fee Letter.
“Xxxxxx Mae Advance Rate Cap” shall have the meaning set forth in the Agency Fee Letter.
“Xxxxxx Xxx Agency Guide” shall mean the Xxxxxx Xxx Mortgage-Backed Securities Guide, Handbook 5500.3, Rev. 1, as amended from time to time, and any related announcements, directives and correspondence issued by Xxxxxx Mae.
“Xxxxxx Xxx Borrowing Base” shall have the meaning set forth in the Agency Fee Letter.
“Xxxxxx Mae Concentration Limit” shall have the meaning set forth in the Agency Fee Letter.
“Xxxxxx Xxx Contract” shall have the meaning set forth in Section 2.20.
“Xxxxxx Mae Margin Rate” shall have the meaning set forth in the Agency Fee Letter.
“Xxxxxx Xxx Mortgage Loans” shall mean the mortgage loans underlying Xxxxxx Mae MSRs, which shall be identified as “Xxxxxx Xxx Mortgage Loans” on the applicable Schedule of Assets.
“Xxxxxx Mae MSRs” shall mean MSRs held by the Borrower with respect to Mortgage Loans that have been securitized in mortgage-backed Securitization transactions guaranteed by Xxxxxx Xxx and pledged to the Administrative Agent, for the benefit of the Lenders, pursuant to this Agreement and the Xxxxxx Mae Acknowledgment Agreement.
“Xxxxxx Xxx Requirements” shall mean the rights and interests of Xxxxxx Mae under the Xxxxxx Xxx Servicing Contract, the Acknowledgment Agreement, or any other agreement between the Borrower and Xxxxxx Mae.
“Xxxxxx Xxx Servicing Contract” shall mean the Xxxxxx Mae Contract as defined in the Xxxxxx Xxx Acknowledgment Agreement.
“GLB Act” has the meaning set forth in Section 10.16(b).
“Governmental Authority” shall mean any national, federal, state, local or other government or political subdivision or any agency, authority, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
“Governmental Authorization” shall mean any permit, license, authorization, plan, directive, consent order or consent decree of or from any Governmental Authority.
“GS Bank” shall have the meaning set forth in the introductory paragraph hereof.
“Guarantee” shall mean, as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or in any manner providing for the payment of any Indebtedness of any other Person or otherwise protecting the holder of such Indebtedness against loss (whether by virtue of partnership arrangements, by agreement to keep-
-24-
well, to purchase assets, goods, securities or services, or to take-or-pay or otherwise); provided that the term “Guarantee” shall not include (i) endorsements for collection or deposit in the ordinary course of business, or (ii) obligations to make servicing advances for delinquent taxes and insurance or other obligations in respect of a mortgaged property. The amount of any Guarantee of a Person shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. The terms “Guarantee” and “Guaranteed” used as verbs shall have correlative meanings.
“Guaranteed Obligations” shall mean, (i) the Borrower’s obligation to repay the Advances, all accrued interest thereon, all required principal payments, and all other amounts payable by the Borrower to the Lenders pursuant to this Agreement, the Loan Note or any other Transaction Document; (ii) in the event of any proceeding for the collection or enforcement of the Borrower’s indebtedness, obligations or liabilities referred to in clause (i), the expenses of retaking, holding, collecting, preparing for sale, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Administrative Agent of its rights under the Transaction Documents, including without limitation, attorneys’ fees and disbursements and court costs; (iii) all of the Borrower’s indemnity obligations to the Indemnitees pursuant to the Transaction Documents; and (iv) to the extent not otherwise included in (i)-(iii) above, any other Obligations under the Transaction Documents.
“Guarantor” shall have the meaning set forth in the introductory paragraph hereof.
“Guaranty” shall mean the Guarantee of the Guaranteed Obligations pursuant to the terms set forth in Article IX hereof.
“Hazardous Materials” shall mean any substances or materials (a) which are or become defined as hazardous wastes, hazardous substances, pollutants, contaminants, chemical substances or mixtures or toxic substances under any Environmental Law, (b) which are toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human health or the environment and are or become regulated by any Governmental Authority, (c) the presence of which require investigation or remediation under any Environmental Law or common law, (d) the discharge or emission or release of which requires a permit or license under any Environmental Law or other Governmental Authorization, (e) which are deemed to constitute a nuisance or a trespass which pose a health or safety hazard to Persons or neighboring properties, (f) which consist of underground or aboveground storage tanks, whether empty, filled or partially filled with any substance or (g) which contain, without limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.
“Hedge Agreement” shall mean any and all master securities forward transaction agreement(s) between Borrower and a financial institution to be determined by the Borrower, as such agreement(s) may be amended, restated or otherwise modified from time to time, or any ISDA agreement entered into by the Borrower and any other financial institution on or after the date of this Agreement that the Borrower and the Administrative Agent agree in writing constitutes a replacement thereto.
“HUD” shall mean the United States Department of Housing and Urban Development or any successor thereto.
-25-
“Indebtedness” shall mean, as to any Person at any time, as to any Person, (i) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (ii) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business; (iii) indebtedness of others secured by a Lien on the property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (iv) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person; (v) Capitalized Lease Obligations of such Person; (vi) obligations of such Person under repurchase agreements or like arrangements; (vii) indebtedness of others guaranteed by such Person; (viii) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person; (ix) indebtedness of general partnerships of which such Person is a general partner; and (x) any other indebtedness of such Person by a note, bond, debenture or similar instrument.
“Indemnified Taxes” shall mean (i) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Transaction Document and (ii) to the extent not otherwise described in clause (i), Other Taxes.
“Indemnitees” shall have the meaning set forth in Section 10.5.
“Insolvency Event” shall mean, with respect to any Person:
(i) the commencement of: (a) a voluntary case by such Person under the Bankruptcy Code or (b) the seeking of relief by such Person under other debtor relief Laws in any jurisdiction outside of the United States;
(ii) the commencement of an involuntary case against such Person under the Bankruptcy Code (or other debtor relief Laws) and the petition is not controverted or dismissed within [***] after commencement of the case;
(iii) a custodian (as defined in the Bankruptcy Code) (or equal term under any other debtor relief Law) is appointed for, or takes charge of, all or substantially all of the property of such Person;
(iv) such Person commences (including by way of applying for or consenting to the appointment of, or the taking of possession by, a rehabilitator, receiver, custodian, trustee, conservator or liquidator (or any equal term under any other debtor relief Laws) (collectively, a “conservator”) of such Person or all or any substantial portion of its property) any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency, liquidation, rehabilitation, conservatorship or similar law of any jurisdiction whether now or hereafter in effect relating to such Person;
(v) such Person is adjudicated by a court of competent jurisdiction to be insolvent or bankrupt;
(vi) any order of relief or other order approving any such case or proceeding referred to in clauses (i) or (ii) above is entered;
-26-
(vii) such Person suffers any appointment of any conservator or the like for it or any substantial part of its property that continues undischarged or unstayed for a period of [***]; or
(viii) such Person makes a compromise, arrangement or assignment for the benefit of creditors or generally does not pay its debts as such debts become due.
“Interest Accrual Period” shall mean for each Monthly Payment Date, the calendar month preceding the month in which such Monthly Payment Date occurs.
“Interest Distribution Amount” shall mean an amount equal to (A) the Cost of Funds Rate for the related Interest Accrual Period with respect to each Lender, as such amount is reported to the Borrower by the Administrative Agent, and (B) any unpaid Interest Distribution Amounts from prior Monthly Payment Dates plus, to the extent permitted by law, interest thereon at the Cost of Funds Rate for the related Interest Accrual Period.
“Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, or any successor statute, and the rules and regulations thereunder, as the same are from time to time in effect.
“Investment” shall mean (i) any direct or indirect purchase or other acquisition by the Borrower, the Guarantor, or any of their Subsidiaries of, or of a beneficial interest in, any of the Securities of any other Person (other than the Borrower or any Subsidiary); (ii) any direct or indirect loan, advance (other than mortgage loans in the ordinary course of business, warehouse loans secured by mortgage loans and related assets, advances to employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contributions by the Borrower, the Guarantor, or any of their Subsidiaries to any other Person (other than the Borrower or any Subsidiary), including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise from sales to that other Person in the ordinary course of business, (iii) all investments consisting of any exchange traded or over the counter derivative transaction, including any Derivatives Contract, whether entered into for hedging or speculative purposes, and (iv) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of any Person. The amount of any Investment of the type described in clauses (i), (ii) and (iv) shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment.
“ISDA Definitions” shall mean the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.
“IRS” shall mean the Internal Revenue Service of the United States of America.
“Law” shall mean any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, order, guideline, judgment, injunction, writ, decree or award of any Governmental Authority.
“Lenders” shall have the meaning set forth in the introductory paragraph hereof.
-27-
“Lien” shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or involuntarily given, including any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security and any filed financing statement or other notice of any of the foregoing (whether or not a lien or other encumbrance is created or exists at the time of the filing).
“Loan Note” shall mean each Loan Note of the Borrower in the form of Exhibit C attached hereto, payable to a Lender.
“Majority Lenders” shall mean, as of any date of determination, Lenders (other than Defaulting Lenders) having Applicable Percentages of more than 50%.
“Margin Stock” shall have the meaning set forth in Regulation U.
“Material Adverse Change” shall mean the occurrence of an event or a change in circumstances that had or is reasonably likely to have a Material Adverse Effect.
“Material Adverse Effect” shall mean, any event or circumstance having a material adverse effect on any of the following: (i) the business, property, assets, operations or financial condition of the Borrower or the Guarantor, taken as a whole, (ii) the ability of the Borrower or the Guarantor to perform its respective obligations under the Transaction Documents, (iii) the validity or enforceability of this Agreement or any other Transaction Document to which the Borrower or the Guarantor is a party, or (iv) the existence, perfection, priority or enforceability of the Administrative Agent’s security interest in a material portion of the Collateral.
“Material Debt Facility” shall have the meaning set forth in Section 6.1(j).
“Maturity Date” shall mean the earlier of (a) the Monthly Payment Date that occurs on the twelfth (12th) month following the Availability Period End Date and (b) the date the Obligations are accelerated pursuant to the terms of this Agreement.
“Maximum Fannie/Xxxxxxx DQ Rate” shall mean [***].
“Maximum Xxxxxx DQ Rate” shall mean [***].
“Minimum Haircut Trigger Event” shall exist at any time that (i) the sum of (1) the product of the most recently determined Administrative Agent Xxxxxx Xxx Market Value Percentage and the aggregate unpaid principal balance of the Mortgage Loans related to the Xxxxxx Mae MSRs, (2) the product of the most recently determined Administrative Agent Xxxxxxx Mac Market Value Percentage and the aggregate unpaid principal balance of the Mortgage Loans related to the Xxxxxxx Mac MSRs, and (3) the product of the most recently determined Administrative Agent Xxxxxx Xxx Market Value Percentage and the aggregate unpaid principal balance of the Mortgage Loans related to the Xxxxxx Mae MSRs; less (ii) the Aggregate Outstandings, does not exceed (iii) [***] of the aggregate unpaid principal balance of the Mortgage Loans related to the Xxxxxx Xxx MSRs, Xxxxxxx Mac MSRs, and Xxxxxx Mae MSRs (as reflected in the most recently delivered Monthly Report), calculated as set forth on Schedule V hereto.
“Minimum Utilization Fee” shall have the meaning set forth in the Agency Fee Letter.
-28-
“Minimum Utilization Fee Payment Date” shall mean each of the following Monthly Payment Dates: (a) during the Availability Period, (i) the twelfth Monthly Payment Date after the Third Amendment Closing Date; and (ii) each Monthly Payment Date during the Availability Period that is the twelfth Monthly Payment Date after the previous Minimum Utilization Fee Payment Date; and (b) to the extent the Availability Period ends in a month that is not a Monthly Payment Date described in clause (a), the Monthly Payment Date occurring in the calendar month in which the Availability Period End Date occurs.
“Monthly Payment Date” shall mean the 20th day of each calendar month or, if such 20th day is not a Business Day, the next succeeding Business Day.
“Monthly Report” shall have the meaning set forth in Section 5.1(v).
[***]
“Mortgage Loan” shall mean the mortgage loans underlying each Asset, which shall be listed on a Schedule of Assets.
“Mortgaged Property” shall mean the real property (including all improvements, buildings, fixtures and building equipment thereon and all additions, alterations and replacements made at any time with respect to the foregoing) and all other collateral securing repayment of the related Mortgage Loan.
“MSR Collateral” shall have the meaning set forth in Section 2.17.
“MSRs” shall mean mortgage servicing rights, excluding any rights to Servicing Advance Receivables, of the Borrower with respect to Mortgage Loans owned, or that have been securitized in mortgage-backed Securitization transactions guaranteed by, any Agency, provided that with respect to Xxxxxxx Mac MSRs, “MSRs” means the indivisible, conditional, non-delegable right and obligation of Servicer to service the Mortgage Loans for and on behalf of Xxxxxxx Mac.
“Multi-Employer Plan” shall mean a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which the Borrower or any of its ERISA Affiliates has contributed, or has been obligated to contribute.
“Nationally Recognized Accounting Firm” shall mean (A) any of PricewaterhouseCoopers LLP, Ernst & Young LLP, KPMG LLC, Deloitte LLP, BDO USA LLC and any successors to any such firm and (B) any other public accounting firm designated by the Borrower and approved by the Administrative Agent, such approval not to be unreasonably withheld or delayed.
“NHA” shall mean the National Housing Act.
“Non-Usage Fee” shall have the meaning set forth in Section 2.5.
“Non-Usage Fee Percentage” shall have the meaning set forth in the Agency Fee Letter.
“Notice of Borrowing” shall have the meaning set forth in Section 2.4(a).
“Obligations” shall mean and include, with respect to the Borrower, all loans, advances, debts, liabilities, obligations, covenants and duties owing to the Administrative Agent,
-29-
any Lender or any other Person by the Borrower of any kind or nature, present or future, arising under this Agreement, the Loan Notes or any of the other Transaction Documents, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising. The term includes the principal amount of all Advances, together with interest, charges, expenses, fees and expenses chargeable to the Borrower pursuant to this Agreement or any other Transaction Document.
“OFAC” shall have the meaning set forth in Section 4.1(w).
“Optional Prepayment” shall have the meaning set forth in Section 2.10.
“Optional Prepayment Amount” shall have the meaning set forth in Section 2.10.
“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Transaction Document, or sold or assigned an interest in any Asset or Transaction Document).
“Other Taxes” shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Transaction Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.
“Participant” shall have the meaning set forth in Section 10.8.
“Participant Register” shall have the meaning set forth in Section 10.8.
“Patriot Act” shall have the meaning set forth in Section 10.19.
“Permitted Collateral Liens” shall mean: (i) the security interest granted hereunder in favor of the Administrative Agent; (ii) interests of any Agency in the Collateral which are pursuant and/or subject to the Agency Guides, Servicing Contracts or the Acknowledgment Agreements; (iii) banker’s Liens in the nature of rights of setoff arising in the ordinary course of business of the Borrower or the Guarantor, as applicable; (iv) Liens for Taxes (x) not yet due and payable or (y) that are being contested in good faith by appropriate actions diligently conducted and for which adequate reserves have been provided in accordance with GAAP; (v) Liens securing judgments not constituting an Event of Default under Section 6.1(f); (vi) Liens on Excluded Collateral of the type described in clause (i) of such definition securing any Permitted Warehouse Financing; (vii) Liens on Excluded Collateral of the type described in clause (ii) of such definition relating to any Permitted Servicing Advance Facility Indebtedness; (viii) Liens described on Schedule 5.2(a); provided that any such Liens shall only secure the Indebtedness that it secured on the Closing Date and an permitted refinancing thereof; (ix) purchase money Liens on equipment acquired or held by the Borrower or a Subsidiary in the ordinary course of its business to secure Permitted Purchase Money Indebtedness so long as such Lien only (a) attaches to such property and (b) secures the Indebtedness that was incurred to acquire such property or any permitted refinancing in respect thereof; (x) deposits and pledges of cash securing (a) obligations incurred in respect of workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits, (b) the performance of bids,
-30-
tenders, leases, contracts (other than for the payment of money) and statutory obligations or (c) obligations on surety or appeal bonds, but only to the extent such deposits or pledges are made or otherwise arise in the ordinary course of business and secure obligations not past due; (xi) Liens of landlords and mortgagees of landlords (a) arising by statute or under any lease or related contractual obligation entered into in the ordinary course of business, (b) on fixtures and movable tangible property located on the real property leased or subleased from such landlord, (c) for amounts not yet due or that are being contested in good faith by appropriate proceedings diligently conducted and (d) for which adequate reserves or other appropriate provisions are maintained on the books of such Person in accordance with GAAP; (xii) the title and interest of a lessor or sublessor in and to property leased or subleased (other than through a Capitalized Lease Obligation in the ordinary course of business), in each case extending only to such property; (xiii) Liens that are customary contractual rights of setoff relating to pooled deposit or sweep accounts of any of the Borrower, the Guarantor, or any of their respective Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business; (xiv) following execution of Acknowledgment Agreements with all Agencies, other Liens securing Indebtedness or other obligations in an aggregate principal amount not to exceed [***], which (a) are not on assets included in the Borrowing Base, and (b) are subordinated to the Liens securing the Obligations created pursuant to the terms of this Agreement on terms reasonably acceptable to the Administrative Agent; (xv) easements, rights-of-way, restrictions (including zoning restrictions), encroachments, protrusions, matters which would be disclosed by an accurate survey or inspection of any real property and other, similar encumbrances and minor title defects affecting real property that do not in the aggregate materially interfere with the ordinary conduct of the business of the Borrower, the Guarantor, or any of their respective Subsidiaries; (xvi) statutory or common law Liens of warehousemen, mechanics, materialmen, repairmen, construction contractors or other like Liens arising in the ordinary course of business securing obligations that are not overdue by more than 90 days or that are being contested in good faith by appropriate proceedings, and in respect of which, if applicable, the Borrower, the Guarantor, or any of their respective Subsidiaries shall have set aside on its books reserves in accordance with GAAP; and (xvii) leases, licenses, subleases or sublicenses granted to others in the ordinary course of business in an aggregate amount at any time not to exceed [***]; provided that any such leases, licenses, subleases or sublicenses do not (x) interfere in any material respect with the business of the Borrower, the Guarantor, or any of their respective Subsidiaries or (y) secure any Indebtedness.
“Permitted Disposition” shall mean (i) subject to Section 2.10, sales of Agency Servicing Rights (including sales of delinquent Agency Servicing Rights); (ii) Dispositions of Mortgage Loans and other assets in the ordinary course of business on market terms; provided that no less than [***] the consideration received for such assets shall be paid in cash; (iii) subject to Section 2.10 (to the extent relating to any Collateral), Dispositions of Collateral to the extent required by any Agency if the failure to comply with such requirement could result in the loss of eligibility to service Mortgage Loans for the related Agency; (iv) any involuntary loss, damage or destruction of property; (v) any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property; (vi) Dispositions of obsolete or worn-out equipment in the ordinary course of business; (vii) Dispositions in connection with a Permitted Warehouse Financing or Permitted Servicing Advance Facility Indebtedness; (viii) Dispositions pursuant to the Asset Management Strategy and (ix) other Dispositions of assets as long as the value of the assets Disposed does not exceed [***] in any fiscal year.
“Permitted Holders” shall mean Stone Point Capital LLC and/or its Affiliates.
“Permitted Indebtedness” shall mean (i) any Indebtedness owing to the Administrative Agent or any Lender under this Agreement and the other Transaction Documents,
-31-
(ii) existing Indebtedness and any permitted refinancing of such Indebtedness; provided that such Indebtedness shall be listed on Schedule 4.1(q) if such Indebtedness is borrowed money, or the aggregate principal amount of such Indebtedness exceeds [***], (iii) Permitted Purchase Money Indebtedness and any permitted refinancing in respect of such Indebtedness, (iv) Indebtedness in connection with any Permitted Warehouse Financing, (v) Permitted Servicing Advance Facility Indebtedness, (vi) Indebtedness under Hedge Agreements that are incurred for the bona fide purpose of hedging the interest rate, commodity, or foreign currency risks associated with the Borrower’s or a Subsidiary’s operations and not for speculative purposes, (vii) Indebtedness in the form of Capitalized Lease Obligations and Equipment and/or loans to finance capital expenditures, (viii) cash management obligations and Indebtedness incurred by the Borrower or any Subsidiary in respect of netting services, overdraft protections, commercial credit cards and treasury management services, automated clearing-house arrangements, employee credit card programs, controlled disbursement, ACH transactions, return items, interstate deposit network services, dealer incentive, in each case entered into in the ordinary course of business in connection with cash management, (ix) Indebtedness between the Borrower and the Guarantor, (x) intercompany Indebtedness among Persons not a party to this Agreement, (xi) following execution of Acknowledgment Agreements with all Agencies, intercompany Indebtedness between the Borrower, the Guarantor, or their respective Subsidiaries and any Person not a party to this Agreement in an aggregate outstanding amount not to exceed [***]as long as such Indebtedness cannot be repaid prior to payments due under this Agreement upon the occurrence and continuation of an Event of Default (and such Indebtedness is subordinated to the Liens securing the Obligations created pursuant to the terms of this Agreement on terms reasonably acceptable to the Administrative Agent) and (xii) following execution of Acknowledgment Agreements with all Agencies, unsecured Indebtedness in an aggregate principal amount not to exceed [***], as long as such unsecured Indebtedness cannot be repaid prior to payments due under this Agreement upon the occurrence and continuation of an Event of Default.
“Permitted MSR Collateral Liens” shall mean: (i) the security interest granted hereunder in favor of the Administrative Agent; (ii) interests of any Agency in the Collateral which are pursuant and/or subject to the applicable Servicing Contract, applicable Acknowledgment Agreement or applicable Agency Requirements; (iii) banker’s Liens in the nature of rights of setoff arising in the ordinary course of business of the Borrower or the Guarantor, as applicable; (iv) Liens for Taxes not yet due and payable; (v) Liens securing judgments not constituting an Event of Default under Section 6.1(f) that are, expressly or by operation of law, subordinate to the Administrative Agent’s Lien; and (vi) Liens securing Permitted Servicing Advance Facility Indebtedness.
“Permitted Purchase Money Indebtedness” shall mean, as of any date of determination, Indebtedness (other than the Obligations, but including Capitalized Lease Obligations) incurred to finance the acquisition of any fixed assets secured by a Lien permitted under clause (ix) of the definition of “Permitted Collateral Liens”; provided, that (a) such Indebtedness is incurred within 20 days after such acquisition, (b) such Indebtedness when incurred shall not exceed the purchase price of the asset financed and (c) the aggregate principal amount of all such Indebtedness shall not exceed [***] at any time outstanding.
“Permitted Servicing Advance Facility Indebtedness” shall mean any Indebtedness of the Borrower incurred under a Servicing Advance Facility.
“Permitted Warehouse Financing” shall mean any warehouse, purchase, repurchase, participation or other similar financing transaction (including any new or existing early buyout line) whereby the warehousing party extends a facility to the Borrower or any Subsidiary to finance the funding or acquisition of mortgage loans, on an interim basis, pending the repurchase of such mortgage loans by the Borrower or such Subsidiary or the subsequent sale
-32-
and delivery of such mortgage loans, or interests therein, to a third party investor or through a mortgage backed security, which facility is secured by such mortgage loans, or interest therein, or through purchase of such mortgage loans, or interests therein, from the Borrower or such Subsidiary by such warehousing party, but only for such time as such mortgage loan remains financed under such Permitted Warehouse Financing, and which financing is made on prevailing market terms, including with respect to advance rates, financial covenants, and interest rates.
“Person” shall mean any individual, corporation (including a business trust), partnership, limited liability company, joint-stock company, trust, unincorporated organization or association, joint venture, government or political subdivision or agency thereof, or any other entity.
“Pool” shall mean a group of Mortgage Loans, which are the security for a mortgage-backed security issued or guaranteed by an Agency, or otherwise owned by an Agency.
“Portfolio” shall mean, with respect to any Agency, all of the Mortgage Loans owned by such Agency and serviced by the Borrower pursuant to the terms of the related Servicing Contract.
“Portfolio Delinquency Rate” means, as of any date of determination, the ratio of (i) the unpaid principal balance of all residential mortgage loans which are serviced by the Borrower for any Agency that have monthly payments that are 60 days or more past due (calculated in accordance with the relevant Agency delinquency calculation methodology) to (ii) the unpaid principal balance of all residential mortgage loans which are serviced by the Borrower for any Agency, in each case, as of the last calendar day of the immediately preceding month.
“Portfolio Xxxxxx” shall mean (i) transactions entered into pursuant to a Hedge Agreement, if any; (ii) transactions entered into in the Futures Account, if any; and (iii) such other transactions as Administrative Agent and Borrower may agree constitute Portfolio Xxxxxx; provided, however, that the term “Portfolio Xxxxxx” shall not include any of the foregoing to the extent such is subject to netting or set-off provisions pursuant to transactions referenced as Excluded Collateral.
“Potential Event of Default” shall mean any occurrence or event that, with the giving of notice, the passage of time or both, would constitute an Event of Default.
“Prepayment Premium” shall have the meaning set forth in the Agency Fee Letter.
“Proceeding” shall mean any claim, litigation, investigation or proceeding.
“Proceeds” shall mean “proceeds” as defined in Section 9-102(a)(64) of the UCC.
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
“QFC Credit Support” shall have the meaning assigned to such term in Section 10.22.
-33-
“Recipient” shall mean the Administrative Agent, the Lenders or any other recipient of any payment to be made by or on account of any obligation of the Borrower or the Guarantor under this Agreement or any other Transaction Document.
“Records” shall mean all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information maintained by the Borrower, or any other person or entity with respect to the Assets.
“Redemption Date” shall have the meaning set forth in Section 10.8.
“Reference Time” with respect to any setting of the then-current Benchmark shall mean the time determined by the Administrative Agent in accordance with the Benchmark Replacement Conforming Changes.
“Register” shall have the meaning set forth in Section 10.8.
“Related Parties” shall mean, with respect to any Person, such Person’s Affiliates and the directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.
“Related Principal and Interest Custodial Accounts” means all principal and interest custodial accounts (other than the Collection Account) maintained in the ordinary course of business by the Borrower as servicer that (I)(a) relate solely to any Mortgage Loan that is subject to a Permitted Warehouse Financing, (b) are accounts into which the Borrower is required to remit principal and interest collections on Mortgage Loans in accordance with the applicable Agency Guide and Servicing Contract maintained in accordance with an applicable Servicing Contract, or (c) are accounts that are maintained in connection with the servicing of third party mortgage loans, and (II) do not have deposited therein, with respect to any Assets, any servicing fees or subservicing fees (other than retained yield, Ancillary Income and, after the occurrence of an Event of Default, the applicable Base Servicing Fee) that the Borrower as servicer is entitled to receive free and clear of all Xxxxxx Mae rights and other restrictions on transfer under applicable Xxxxxx Xxx guidelines, pursuant to the Servicing Contracts.
“Related Security” shall mean with respect to any Asset, (a) all security interests or Liens and property subject thereto from time to time, if any, purporting to secure payment of such Asset, whether pursuant to the Servicing Contract related to such Asset or otherwise, together with all financing statements covering any collateral securing such Asset; (b) all guarantees, indemnities, letters of credit, insurance or other agreements or arrangements of any kind from time to time supporting or securing payment of such Asset whether pursuant to the Servicing Contract related to such Asset or otherwise; and (c) any and all Proceeds of the foregoing.
“Relevant Governmental Body” shall mean the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.
“REO Assets” shall mean any real property owned by any Person and acquired as a result of the foreclosure or other enforcement of a lien on such asset securing a Mortgage Loan.
“Reportable Event” shall mean a reportable event as defined in Section 4043 of ERISA and the regulations issued under such Section, with respect to a Single-Employer Plan, excluding, however, such events as to which the Pension Benefit Guaranty Corporation by
-34-
regulation or by public notice waived the requirement of Section 4043(a) of ERISA that it be notified within thirty (30) days of the occurrence of such event.
“Resolution Authority” shall mean an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer” shall mean, with respect to any corporation, limited liability company or partnership, the chief executive officer, chief financial officer, any executive vice president or any senior vice president (the duties of which vice president include the administration of this Agreement, the Transaction Documents or the transactions contemplated hereby or thereby), and the treasurer.
“Schedule of Assets” shall mean the Schedule of Eligible Assets and the Schedule of Ineligible Assets.
“Schedule of Eligible Assets” shall mean the schedule of MSR Collateral that meets the criteria of an Eligible Assets and which includes identifying information relating to such MSR Collateral as agreed to between the Borrower and the Administrative Agent, which Schedule may be updated from time to time in accordance with the terms of this Agreement.
“Schedule of Ineligible Assets” shall mean the schedule of MSR Collateral that does not meet the criteria of an Eligible Assets, which Schedule may be updated from time to time in accordance with the terms of this Agreement.
“Secured Parties” shall mean the Administrative Agent and each Lender.
“Securities” shall mean any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.
“Securitization” shall mean a public or private transfer, sale or financing of (i) Servicer Advances or MSRs, (ii) mortgage loans, (iii) installment contracts, (iv) deferred servicing fees; (v) other loans and related assets, and/or (vi) any other assets capable of being securitized, (clauses (i) – (vi) above, collectively, the “Securitization Assets”) by which the Borrower, the Guarantor, or any of their Subsidiaries directly or indirectly securitizes a pool of specified Securitization Assets including, without limitation, any such transaction involving the sale of specified Servicer Advances or mortgage loans to a Securitization Entity.
“Securitization Assets” shall have meaning specified in the definition of “Securitization.”
“Securitization Entity” shall mean (i) any Person other than the Borrower or the Guarantor (whether or not a Subsidiary of the Borrower or the Guarantor) established for the purpose of issuing asset-backed or mortgaged-backed or mortgage pass-through securities of any kind (including collateralized mortgage obligations and net interest margin securities), (ii) any special purpose Subsidiary established for the purpose of selling, depositing or contributing Securitization Assets into a Person described in clause (i) or holding securities in any related Securitization Entity, regardless of whether such person is an issuer of securities; provided that such Person is not an obligor with respect to any Indebtedness of the Borrower, the Guarantor, or
-35-
any Subsidiary and (iii) any special purpose Subsidiary of the Borrower or the Guarantor formed exclusively for the purpose of satisfying the requirements of Credit Enhancement Agreements and regardless of whether such Subsidiary is an issuer of securities; provided that such Person is not an obligor with respect to any Indebtedness of the Borrower, the Guarantor, or any of their Subsidiaries other than under Credit Enhancement Agreements.
“Servicer Advance” shall mean advances made or required to be made by the Borrower or any of its Subsidiaries in its capacity as servicer under a Servicing Contract to fund principal, interest, escrow, foreclosure, insurance, tax or other payments or advances when the obligor on the underlying Mortgage Loan is delinquent in making payments on such receivable; to enforce remedies, manage and liquidate REO Assets; or that the Borrower or any of its Subsidiaries otherwise advances in its capacity as servicer under such Servicing Contract.
“Servicer Termination Event” shall mean any default, event of default or similar occurrence under the terms of a Servicing Contract, pursuant to which the Borrower may be terminated in its capacity as servicer in accordance with and pursuant to the terms of such Servicing Contract.
“Servicing Advance Facility” shall mean any funding arrangement with a lender, lenders or an indenture trustee, acting on behalf of noteholders, secured by the right to be reimbursed for Servicer Advances made by the Borrower or a special purpose subsidiary of the Borrower as servicer under one or more Servicing Contracts under which financing advances are made to the Borrower based on such advance reimbursement rights (whether or not covered by an Acknowledgment Agreement).
“Servicing Advance Receivable” shall mean the contractual right with respect to each Mortgage Loan (a) to reimbursement pursuant to the terms of a Servicing Contract and the applicable Agency Guide, for a Servicer Advance made by or on behalf of the Borrower as servicer (or any predecessor servicer) with respect to Mortgage Loans in a Pool, which Servicer Advance has not previously been reimbursed, and including all rights of the Borrower as servicer (or any predecessor servicer) to enforce payment of such obligation under the related Servicing Contract, and (b) to amounts to be paid as consideration for any purchase of the contractual right to reimbursement described under clause (a).
“Servicing Contract” shall mean each of the Xxxxxx Mae Lender Contract, the Xxxxxxx Mac Servicing Contract, and the Xxxxxx Mae Servicing Contract, as applicable.
“Servicing Fee” shall mean, with respect to any Mortgage Loan, the aggregate monthly fee payable to the Borrower in servicing such Mortgage Loan pursuant to the related Servicing Contract, not including any Ancillary Income or Servicing Advance Receivables.
“Servicing Income” shall mean, with respect to any Mortgage Loan, all Servicing Fees and Ancillary Income payable to the Borrower as servicer (as applicable) pursuant to the applicable Servicing Contract. For the avoidance of doubt, Servicing Income shall not include reimbursements of Servicing Advance Receivables.
“Shared Net Servicing Revenue” shall have the meaning given such term in the Xxxxxxx Mac Acknowledgment Agreement.
“Single-Employer Plan” shall mean any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multi-Employer Plan, that is subject to Title IV of ERISA or Section 412 of the Internal Revenue Code and is sponsored or maintained by the Borrower or any ERISA Affiliate or for which the Borrower or any ERISA
-36-
Affiliate may have or have had liability within five (5) plan years preceding the date of this Agreement by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.
“SOFR Adjustment” shall mean 0.26161%.
“SOFR Rate” shall mean, the sum of: (a) Compounded SOFR, and (b) the SOFR Adjustment.
“Specified Contribution” shall have the meaning assigned to such term in Section 6.3.
“Stone Point” shall mean Trident VI, L.P., Trident VI Parallel Fund L.P., Trident VI DE Parallel Fund, L.P. or Trident VI Professionals Fund, L.P.
“Subsidiary” shall mean, with respect to any Person at any time, (i) any corporation or trust of which 50% or more (by number of shares or number of votes) of the outstanding Capital Stock or shares of beneficial interest normally entitled to vote for the election of one or more directors, managers or trustees (regardless of any contingency which does or may suspend or dilute the voting rights) is at such time owned directly or indirectly by such Person or one or more of such Person’s subsidiaries, or any partnership of which such Person or any of such Person’s subsidiaries is a general partner or of which 50% or more of the partnership interests is at the time directly or indirectly owned by such Person or one or more of such Person’s subsidiaries and (ii) any corporation, trust, partnership or other entity which is Controlled or capable of being Controlled by such Person or one or more of such Person’s subsidiaries.
“Supported QFC” shall have the meaning assigned to such term in Section 10.22.
“Surplus Proceeds” shall have the meaning given such term in the Xxxxxxx Mac Acknowledgment Agreement.
“Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, and including any interest, additions to tax or penalties applicable thereto.
“Termination Fee” shall have the meaning given such term in the Xxxxxxx Mac Acknowledgment Agreement.
“Third Amendment Closing Date” shall mean April 29, 2022.
“Transactions” shall mean, collectively, the transactions to occur on or prior to the Closing Date and thereafter on each Borrowing Date pursuant to the Transaction Documents, including (a) the execution, delivery and performance of the Transaction Documents and the Advances hereunder and (b) the payment of all fees and expenses due and owing in connection with the foregoing.
“Transaction Documents” shall mean this Agreement, the Loan Notes, the Fee Letters, the Account Control Agreement, the Acknowledgment Agreements and any other agreements, instruments, certificates or documents delivered or contemplated to be delivered hereunder or thereunder or in connection herewith or therewith, as the same may be
-37-
supplemented or amended from time to time hereafter in accordance herewith or therewith, and “Transaction Document” shall mean any of the Transaction Documents.
“Trigger Event” shall mean the occurrence and continuation of any of the following:
(i) The average of the three (3) most recent monthly Portfolio Delinquency Rates with respect to the Borrower’s servicing portfolio relating to Xxxxxx Xxx and Xxxxxxx Mac is greater than the Maximum Fannie/Xxxxxxx DQ Rate;
(ii) The average of the three (3) most recent monthly Portfolio Delinquency Rates with respect to the Borrower’s servicing portfolio relating to Xxxxxx Mae is greater than the Maximum Xxxxxx DQ Rate; or
(iii) Two year “compare ratio” assigned to the Borrower by FHA under its “Neighborhood Watch” program exceeds one hundred ninety-five percent (195%);
provided that the Trigger Event shall be deemed to be cured if (a) in the case of (i) and (ii) above, the foregoing delinquency rates returning and remaining below the specified Maximum Fannie/Xxxxxxx DQ Rate or Maximum Xxxxxx DQ Rate, as applicable for a period of [***] and (b) in the case of (iii) above during any period when clause (iii) is applicable, immediately upon the foregoing “compare ratio” decreasing below [***]; provided further that in no event will such Trigger Event be deemed to have been satisfied at any time when an Event of Default shall have occurred and be continuing.
“UCC” shall mean the Uniform Commercial Code as from time to time in effect in any applicable jurisdiction.
“UK Financial Institution” shall mean any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” shall mean the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unadjusted Benchmark Replacement” shall mean the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
“Uncommitted Advances” shall mean any Advances in excess of the Aggregate Commitment Amount.
“Uncommitted Advance Amount” shall mean, as of any date, the amount of outstanding Uncommitted Advances.
“United States” shall mean the United States of America.
-38-
“Unused Portion” shall mean, as of 5:00 P.M. (New York City time) on any day, the amount, if any, by which the amount of Aggregate Outstandings on such day is less than the Aggregate Commitment Amount on such day.
“Upfront Fee” shall have the meaning set forth in the Administrative Agent Fee Letter.
“U.S. Government Securities Business Day” shall mean any day except for a Saturday, a Sunday or a day on which the Securities Industry and Financial Markets Association, or any successor thereto, recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“U.S. Person” shall mean any Person who is a U.S. person within the meaning of Section 7701(a)(30) of the Internal Revenue Code.
“U.S. Special Resolution Regime” shall have the meaning assigned to such term in Section 10.19.
“U.S. Tax Compliance Certificate” shall have the meaning set forth in Section 2.15(g)(ii)(B)(3).
“VA” shall mean the U.S. Department of Veterans Affairs.
“Valuation Agent” shall mean the valuation service providers identified on Schedule III hereto, as may be amended from time to time by the Administrative Agent, the Borrower and the Majority Lenders.
“Valuation Agent Asset Value” shall mean, as of any date of determination, the sum of (i) the Valuation Agent Xxxxxx Xxx Asset Value, (ii) the Valuation Agent Xxxxxxx Mac Asset Value, and (iii) the Valuation Agent Xxxxxx Xxx Asset Value.
“Valuation Agent Xxxxxx Mae Asset Value” shall mean, as of any date of determination, the product of (i) the Xxxxxx Xxx Advance Rate, (ii) the Valuation Agent Xxxxxx Mae Market Value Percentage, and (iii) the aggregate unpaid principal balance of the Mortgage Loans related to the Xxxxxx Xxx MSRs.
“Valuation Agent Xxxxxx Mae Market Value Percentage” shall mean, with respect to any Xxxxxx Xxx MSR as of any date of determination, the percentage to be applied to the unpaid principal balance of the applicable Mortgage Loans, to arrive at the fair market value of such Xxxxxx Mae MSR, as most recently determined by a Valuation Agent in accordance with Section 2.6, provided that, in no event shall the Valuation Agent Xxxxxx Xxx Market Value Percentage be greater than (i) an amount equal to the market value thereof implying a discount rate which is the sum of the 5 Year Swap Rate and [***] (if using a static model), or (ii) the market value thereof implying a zero option-adjusted spread.
“Valuation Agent Xxxxxxx Mac Asset Value” shall mean, as of any date of determination, the product of (i) the Xxxxxxx Mac Advance Rate, (ii) the Valuation Agent Xxxxxxx Mac Market Value Percentage, and (iii) the aggregate unpaid principal balance of the Mortgage Loans related to the Xxxxxxx Mac MSRs.
“Valuation Agent Xxxxxxx Mac Market Value Percentage” shall mean, with respect to any Xxxxxxx Mac MSR as of any date of determination, the percentage to be applied to the unpaid principal balance of the applicable Mortgage Loans, to arrive at the fair market value
-39-
of such Xxxxxxx Mac MSR, as most recently determined by a Valuation Agent in accordance with Section 2.6, provided that, in no event shall the Valuation Agent Xxxxxxx Mac Market Value Percentage be greater than (i) an amount equal to the market value thereof implying a discount rate which is the sum of the 5 Year Swap Rate and [***] (if using a static model), or (ii) the market value thereof implying a zero option-adjusted spread.
“Valuation Agent Xxxxxx Mae Asset Value” shall mean, as of any date of determination, the product of (i) the Xxxxxx Xxx Advance Rate, (ii) the Valuation Agent Xxxxxx Mae Market Value Percentage, and (iii) the aggregate unpaid principal balance of the Mortgage Loans related to the Xxxxxx Xxx MSRs.
“Valuation Agent Xxxxxx Mae Market Value Percentage” shall mean, with respect to any Xxxxxx Xxx MSR as of any date of determination, the percentage to be applied to the unpaid principal balance of the applicable Mortgage Loans, to arrive at the fair market value of such Xxxxxx Mae MSR, as most recently determined by a Valuation Agent in accordance with Section 2.6, provided that, in no event shall the Valuation Agent Xxxxxx Xxx Market Value Percentage be greater than (i) an amount equal to the market value thereof implying a discount rate which is the sum of the 5 Year Swap Rate and [***] (if using a static model), or (ii) the market value thereof implying a zero option-adjusted spread.
“Valuation Agent Market Value Percentage” means the Valuation Agent Xxxxxx Mae Market Value Percentage, the Valuation Agent Xxxxxxx Mac Market Value Percentage, or the Valuation Agent Xxxxxx Mae Market Value Percentage, as applicable.
“VPC Agreement” shall mean any bulk or flow purchase Voluntary Partial Cancellation of Servicing Contract Rights Agreement by and between Xxxxxxx Mac and the Borrower presently in effect or executed in the future, whereby the Borrower relinquishes Xxxxxxx Mac MSRs to Xxxxxxx Mac, as amended, modified, restated or supplemented from time to time.
“VPC Servicing Transfer Date” shall have the meaning given to the term “Servicing Transfer Date” in a VPC Agreement.
“Warehoused Mortgage Loans” shall mean Mortgage Loans which have been pledged to or purchased by a warehousing party or in which the warehousing party has acquired a participation interest pursuant to a Permitted Warehouse Financing.
“Write-Down and Conversion Powers” shall mean, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
Section 1.2 Computation of Time Periods. In this Agreement, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each means “to but excluding” and the word “through” means “through and including.”
-40-
Section 1.3 Construction. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (A) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, amended and restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth therein), (B) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, (C) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (D) all references herein to Sections, Schedules and Exhibits shall be construed to refer to Sections of, and Schedules and Exhibits to, this Agreement, (E) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all real property, tangible and intangible assets and properties, including cash, securities, accounts and contract rights, and interests in any of the foregoing, (F) any reference to a statute, rule or regulation is to that statute, rule or regulation as now enacted or as the same may from time to time be amended, re-enacted or expressly replaced, (G) “or” is not exclusive, and (H) capitalized terms used herein and not defined, but which are defined in the Agency Fee Letter or the Administrative Agent Fee Letter shall have the meaning specified in such Fee Letter.
Section 1.4 Accounting Terms. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the audited financial statements, except as otherwise specifically prescribed herein; provided that if the Borrower notifies the Administrative Agent that the Borrower or the Guarantor wishes to amend any Financial Covenant to eliminate the effect of any change in GAAP on the operation of such covenant, then the Borrower’s or Guarantor’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower or Guarantor, as applicable, and the Administrative Agent.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.1 Establishment of the Credit Facility. Subject to and upon the terms and conditions set forth in this Agreement and the other Transaction Documents, the Administrative Agent and the Lenders agree to establish the credit facility set forth in this Agreement for the benefit of the Borrower.
Section 2.2 The Advances.
(a) Upon the terms and subject to the conditions hereinafter set forth, the Lenders, severally but not jointly, shall from time to time during the Availability Period, make loans (each an “Advance”) to the Borrower on a revolving basis in an aggregate amount outstanding up to but not exceeding (i) the amount of such Lender’s Commitment (each such Advance, a “Committed Advance”) or (ii) such amount as maybe agreed to in the sole discretion of each Lender as provided in clause (c) below; provided, that no such Advance shall
-41-
cause (x) a Borrowing Base Deficiency or a Funding Base Deficiency or (y) the Aggregate Outstandings to exceed the Aggregate Facility Amount;
(b) Following the Closing Date and the initial Advance, no Advance shall cause [***] or more of the Aggregate Commitment Amount to be drawn in any rolling thirty (30) day period, unless otherwise agreed by the Administrative Agent. Within the limits of each Lender’s Commitment, to the extent the aggregate outstanding principal balance of any Advance is prepaid, such amount may be reborrowed under Section 2.2(a).
(c) To the extent any Notice of Borrowing requests Advances, the making of which would cause the Aggregate Outstandings to be in excess of the Aggregate Commitment Amount on the relevant Borrowing Date, upon the terms and subject to the conditions hereinafter set forth, each Lender may, in its sole and absolute discretion, from time to time during the Availability Period, with respect to the amount of such requested Advances that would cause the Aggregate Outstandings to be in excess of the Aggregate Commitment Amount on the relevant Borrowing Date, make such Advance to the Borrower that is secured by the Collateral: provided, however, that no such Advance shall cause (i) the Aggregate Outstandings to exceed the sum of the Aggregate Facility Amount or (ii) a Borrowing Base Deficiency or a Funding Base Deficiency. The Borrower hereby acknowledges and agrees that, notwithstanding any provision of this Agreement, or any other Transaction Document, no Lender has any obligation to make any Advances in excess of the Aggregate Commitment Amount or such Lender’s Commitment and this Agreement does not create, and shall not be construed to create, any contractual or other commitment by any Lender to make any Advance in excess of the Aggregate Commitment Amount or such Lender’s Commitment.
Section 2.3 Use of Proceeds. Except as otherwise provided in Section 2.18, Section 2.19, and Section 2.20 herein, proceeds of Advances shall only be used by the Borrower to (A) purchase, in the ordinary course of business, Agency eligible MSRs and related assets, (B) pay certain fees and expenses incurred in connection with the establishment of the credit facility set forth in this Agreement, (C) subject to Section 2.19, make cash distributions from time to time pursuant to Section 5.2(c) in an amount not exceeding the excess of the Borrowing Base over the Aggregate Outstandings and (D) for general corporate purposes.
Section 2.4 Making the Advances. (a) Except as otherwise provided herein, the Borrower may request the Lenders to make Advances to the Borrower no more frequently than [***] by the delivery to the Administrative Agent, not later than [***] (New York City time) on any Business Day of a written notice of such request substantially in the form of Exhibit B attached hereto (each such notice, a “Notice of Borrowing”), together with a duly completed Borrowing Base Certificate, signed by a Responsible Officer and including a Schedule of Eligible Assets and Schedule of Ineligible Assets. Any Notice of Borrowing or Borrowing Base Certificate received by the Administrative Agent after the time specified in the immediately preceding sentence shall be deemed to have been received by the Administrative Agent on the next Business Day, and to the extent that results in the proposed Borrowing Date being earlier than three (3) Business Days after the date of delivery of such Notice of Borrowing, then the date specified in such Notice of Borrowing as the proposed Borrowing Date of an Advance shall be deemed to be the Business Day immediately succeeding the proposed Borrowing Date of such Advance originally specified in such Notice of Borrowing. The proposed Borrowing Date specified in a Notice of Borrowing shall be no earlier than three (3) Business Days after the date of delivery of such Notice of Borrowing and may be up to a maximum of thirty (30) days after the date of delivery of such Notice of Borrowing. Unless otherwise provided herein, each Notice of Borrowing shall be irrevocable and shall specify (i) the aggregate principal amount of the Advance requested, and (ii) the Borrowing Date (which shall be a Business Day).
-42-
(b) The aggregate principal amount of each Advance shall not be less than [***].
(c) Upon receipt by the Administrative Agent of a Notice of Borrowing and a Borrowing Base Certificate from the Borrower, the Administrative Agent shall promptly (on the date of its deemed receipt of the Notice of Borrowing and the related Borrowing Base Certificate) deliver to each Lender a copy of such Notice of Borrowing and a written notice specifying each Lender’s Commitment Percentage of the amount requested by the Borrower pursuant to the applicable Notice of Borrowing. Thereafter, each Lender shall make Advances in an aggregate amount equal to its Commitment Percentage of the amount requested by the Borrower pursuant to the applicable Notice of Borrowing; provided that to the extent the Notice of Borrowing requests Advances, the making of which would cause the aggregate amount of Advances to be in excess of the Aggregate Commitment Amount on the relevant Borrowing Date, each Lender may, in its sole and absolute discretion, with respect to the portion of such requested Advance that would constitute an Uncommitted Advance Amount on the relevant Borrowing Date, make such portion of the Advance in an amount equal to its Commitment Percentage, provided further, that if any Lender elects, in its sole and absolute discretion, not to provide all or any portion of a requested Advance that would constitute an Uncommitted Advance Amount, the other Lenders (on a pro rata basis or such other basis as may be agreed by the Lenders) may agree to provide all or any portion of such Advance. The Lenders shall make such Advances to the Administrative Agent’s Account by no later than [***] (New York City time) on the Borrowing Date specified or deemed specified in such Notice of Borrowing. The Administrative Agent shall promptly make such Advance available to the Borrower in U.S. Dollars to the Borrower’s Account. For avoidance of doubt, nothing herein shall be deemed to oblige any Lender to fund any Advance in excess of the Aggregate Commitment Amount or such Lender’s Commitment.
Section 2.5 Fees.
(a) Non-Usage Fee. On each Monthly Payment Date during the Availability Period, the Borrower agrees to pay to the Administrative Agent, for the ratable benefit of the Lenders and as consideration for each Lender’s Commitment hereunder, a non-usage fee in Dollars (the “Non-Usage Fee”) in an amount equal to the (1) the applicable Non-Usage Fee Percentage as described in the Agency Fee Letter, if any, multiplied by (2) the daily average Unused Portion of the Aggregate Commitment Amount in the immediately preceding calendar month. Accrued Non-Usage Fees shall be due and payable in arrears on each Monthly Payment Date, and on the last day of the Availability Period. Computations of the Non-Usage Fee shall be made by the Administrative Agent on the basis of a year of 360 days and for the actual number of days elapsed, and, with respect to each Lender, pro rata based on such Lender’s Commitment.
(b) Minimum Utilization Fee. On each Minimum Utilization Fee Payment Date, the Borrower agrees to pay to the Administrative Agent, for the ratable benefit of the Lenders and as consideration for each Lender’s Commitment hereunder, the Minimum Utilization Fee. Accrued Minimum Utilization Fees shall be due and payable in arrears on each Minimum Utilization Fee Payment Date. Computations of the Minimum Utilization Fee shall be made by the Administrative Agent.
Section 2.6 Borrowing Base.
(a) The Administrative Agent may, in its sole and absolute discretion, and shall, at the request of the Majority Lenders, on any date, calculate the Borrowing Base and shall provide written notice thereof to the Borrower. To the extent any such calculation results in a
-43-
Borrowing Base Deficiency, the Administrative Agent shall deliver a notice to the Borrower and each Lender (a “Borrowing Base Deficiency Notice”), setting forth the calculation thereof (which shall be conclusive absent manifest error), and the Borrowing Base Required Payment to be made by the Borrower as a result of such calculation (which amount shall be paid in accordance with Section 2.9). At the Administrative Agent’s discretion, the Administrative Agent may obtain valuation reports with respect to the Administrative Agent Asset Value from a Valuation Agent, at any time and from time to time on a non-binding basis; provided that the Borrower shall not be responsible for payment of any costs, expenses, fees or other amounts in connection with such valuation report except in connection with a Borrowing Base Dispute pursuant to Section 2.6(b).
(b) Notwithstanding the foregoing or anything to the contrary contained herein, the Borrower shall have the right to dispute the Administrative Agent’s calculation of the Administrative Agent Asset Value by notifying the Administrative Agent and the Lenders within three (3) Business Days after the Borrower receives a Borrowing Base Deficiency Notice (a “Borrowing Base Dispute”). If the Borrower initiates a Borrowing Base Dispute, then the Administrative Agent, on one hand, and the Borrower, on the other hand, shall each promptly direct separate Valuation Agents, to prepare a valuation report with respect to such Administrative Agent Asset Value. The average of the midpoint values indicated in the two valuation reports submitted by the Valuation Agents shall become the conclusive Valuation Agent Market Value Percentage of the related MSRs that constitute Eligible Assets, binding upon all parties hereto, absent manifest error.
(c) Any costs, expenses, fees and other amounts due and owing to any Valuation Agent or Dealer in connection with the engagement of such Valuation Agent or Dealer in connection with a Borrowing Base Dispute pursuant to Section 2.6(b) shall be an Obligation of the Borrower and shall become due and payable on the immediately succeeding Monthly Payment Date in accordance with Section 2.7.
Section 2.7 Repayment of the Advances. (a) The outstanding principal balance of the Advances and the other Obligations owing under this Agreement, together with all accrued but unpaid interest thereon, shall be due and payable on the Maturity Date.
(b) On each Monthly Payment Date, except following the occurrence and during the continuation of an Event of Default, the Borrower shall cause the payment in full of all Distributable Amounts to the Administrative Agent for payment to the applicable Person; provided that the Borrower shall pay the Credit Manager Fees directly to the Credit Manager on or prior to each Monthly Payment Date as provided in the Credit Manager Agreement.
(c) On each Monthly Payment Date following the occurrence and during the continuation of an Event of Default, amounts on deposit in the Collection Account, including Collections deposited therein during the related Collection Period shall, at the direction of the Administrative Agent, be disbursed by the Account Bank from the Collection Account and applied on such Monthly Payment Date in the following order of priority:
(i) first, to the Borrower, any Base Servicing Fee inadvertently deposited into the Collection Account by the Borrower;
(ii) second, ratably (a) to the Administrative Agent, all costs, expenses, reimbursements and indemnification amounts owed to the Administrative Agent pursuant to the terms hereof, and (b) to the Credit Manager, the Credit Manager Fees with respect to such Monthly Payment Date and all costs, expenses, reimbursements and
-44-
indemnification amounts owed to the Credit Manager pursuant to the terms of the Credit Manager Agreement;
(iii) third, to the Administrative Agent, on behalf of the Lenders, the Interest Distribution Amount with respect to such Monthly Payment Date;
(iv) fourth, to the Administrative Agent, on behalf of the Lenders, the payment of the Non-Usage Fee and any Minimum Utilization Fee with respect to such Monthly Payment Date;
(v) fifth, to the Administrative Agent, on behalf of the Lenders, pro rata, based on the Advances held by such Lender, all remaining amounts to be applied to the reduction of such Advances to zero on such date;
(vi) sixth, to the Administrative Agent, on behalf of the applicable party, all amounts that are then due and payable pursuant to Section 2.11;
(vii) seventh, to the Administrative Agent, on behalf of the applicable party, all fees, expenses, indemnitees and other amounts that are due and payable by the Borrower and incurred in connection with this Agreement and required to be paid or reimbursed hereunder, the financing, management, operation or maintenance of the Collateral or the Transaction Documents, including to consultants and experts retained by the Borrower (including attorneys and accountants) and verification agents and Dealers retained pursuant to the terms hereof;
(viii) eighth, to the Administrative Agent, on behalf of any applicable party, the ratable payment of all other Obligations that are past due or payable on such date; and
(ix) ninth, all remaining amounts to the Borrower’s Account on such date.
Notwithstanding anything to the contrary in this Agreement or any of the other Transaction Documents, all terms and provisions of this Agreement and the other Transaction Documents are and shall be subject to the terms and provisions of each Acknowledgment Agreement. To the extent that any conflict necessarily exists or shall be adjudged to exist between the terms and provisions of this Agreement and those of the applicable Acknowledgment Agreement, solely with respect to the relationship and agreements between Borrower and/or Administrative Agent, on the one hand, and the applicable Agency, on the other hand, the terms and provisions of the applicable Acknowledgment Agreement shall govern and control.
(d) Notwithstanding the foregoing, following the occurrence and during the continuation of an Event of Default, in the event that amounts available for distribution from the Collection Account pursuant to Section 2.7(c) are insufficient to pay in full all Obligations then due and owing on any day, then the Borrower shall cause the payment in full of the applicable deficiency to the Administrative Agent for payment to the applicable parties hereto.
Section 2.8 Application of Prepayment of Advances. Each repayment of Advances pursuant to Section 2.7 and each prepayment of Advances pursuant to Section 2.9 or 2.10 shall be applied to prepay the Advances outstanding on a pro rata basis until paid in full.
Section 2.9 Mandatory Prepayments of Advances; Borrowing Base Deficiency.
-45-
(a) If a Borrowing Base Deficiency exists on any date, the Borrower shall pay to the Administrative Agent, for the account of the Lenders, the Borrowing Base Required Payment, together with accrued but unpaid interest on the amount required to be so prepaid to the date of such prepayment. All such amounts shall become due and payable (i) no later than 5:00 p.m. (New York City time) on the Business Day following the Borrower’s receipt of a Borrowing Base Deficiency Notice, or (ii) if Stone Point provides the Lenders a guarantee of payment for the amounts due hereunder, in such form as is acceptable to the Lenders in their sole discretion, then such amounts shall be due and payable no later than 5:00 p.m. (New York City time) on such date that is [***] following the Borrower’s receipt of a Borrowing Base Deficiency Notice. For the avoidance of doubt, the [***] period during which the Borrower may dispute the Administrative Agent’s determination of the Administrative Agent Asset Value set forth in Section 2.6 shall not operate to extend the cure periods referenced in the preceding sentence.
(b) In lieu of making any prepayment in accordance with clause (i) above to eliminate a Borrowing Base Deficiency, if such Borrowing Base Deficiency occurs during the Availability Period the Borrower may identify as Collateral additional Eligible Assets in an amount equal to the Borrowing Base Required Payment. Upon such identification, such MSRs shall be Collateral hereunder without any further action by the Administrative Agent or the Lenders; provided that, immediately prior to and immediately after giving effect to such contribution, (i) no Event of Default exists, and (ii) each of the representations, warranties, covenants and agreements made or deemed to be made by the Borrower under or in connection with this Agreement and the Transaction Documents is true and correct in all material respects as of such date.
Section 2.10 Optional Prepayments; Removal of Collateral.
(a) Optional Prepayments. At any time, the Borrower may, at its option, prepay all or any portion of the Advances outstanding (an “Optional Prepayment”) on any date (the “Redemption Date”) upon prior written notice delivered to the Administrative Agent not later than 12:00 p.m. (New York City time) [***] prior to the date of such payment; provided that the Borrower shall be permitted to deliver such notice no more frequently than two (2) times during any week. Each such notice shall be in the form attached hereto as Exhibit G and shall specify (i) the aggregate amount of the prepayment to be made on the Advances outstanding (such amount, if applicable, the “Optional Prepayment Amount”), (ii) the Redemption Date, and (iii) if applicable, the Collateral to be released on such Redemption Date and a duly completed Borrowing Base Certificate containing information accurate as of such date. Each Optional Prepayment shall be in a minimum principal amount equal to [***] and in integral multiples of [***] in excess thereof. Any prepayment of the Advances outstanding shall be accompanied by a payment of all accrued and unpaid interest on the amount prepaid, together with any additional amounts required pursuant to Section 2.11, any Exit Fees, any applicable Prepayment Premiums and all outstanding indemnity Obligations of the Borrower, then due and owing under this Agreement through such Redemption Date; provided that the Prepayment Premium shall only be payable on the dates as set forth in the definition thereof.
(b) Removal of Collateral. Notwithstanding language herein to the contrary, after giving effect to any release of Collateral (whether in connection with an Optional Prepayment pursuant to Section 2.10(a) above or pursuant to any other provision of this Agreement), the following conditions must be satisfied:
(i) no selection procedures are used with respect to identification of Assets to be released or retained that are materially adverse to the Secured Parties;
-46-
(ii) no Borrowing Base Deficiency, Potential Event of Default or Event of Default shall exist either prior to, or after giving effect to the prepayment of the applicable portion of the Advances outstanding and/or the release of the related Collateral (unless, in the case of a Borrowing Base Deficiency or Funding Base Deficiency, (x) the amount of such deficiency is eliminated as a result of such prepayment and release or (y) the release is in connection with a sale to an unaffiliated third-party purchaser and the following conditions are satisfied (i) the purchaser has agreed to pay the purchase price for the released Collateral to the Administrative Agent as a prepayment of the Advances, and (ii) after giving effect to such prepayment, the weighted average of the Effective Advance Rates for the Agencies is the same or lower as it had been prior to the release of the related Collateral); and
(iii) the representations and warranties set forth in Article IV are true and correct as of such Redemption Date (except to the extent such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall have been true and correct as of such earlier date) after giving effect to the prepayment of the applicable portion of the Advances outstanding and release of the related Collateral.
(c) Notwithstanding anything in this Agreement to the contrary, any release of Xxxxxxx Mac MSRs shall be subject in all respects to the terms and provisions of the Xxxxxxx Mac Acknowledgment Agreement, the Xxxxxxx Mac Servicing Contract and any VPC Agreement.
Section 2.11 Determination of Interest Rate.
(a) Interest Rate. Interest on the outstanding principal balance of the Advances shall accrue at the Cost of Funds Rate. Any change in the rate of interest hereunder due to a change in the Cost of Funds Rate shall become effective as of the opening of business on the first day on which such change in the Cost of Funds Rate shall become effective. Each determination by the Administrative Agent of the Cost of Funds Rate shall be conclusive and binding for all purposes, absent manifest error. The Cost of Funds Rate applicable to an Interest Accrual Period shall be determined by the Administrative Agent as set forth herein.
(b) Increased Costs. If any Change in Law, (i) shall subject any Lender or the Administrative Agent (each of which, an “Affected Party”) to any Taxes (other than (x) Indemnified Taxes, (y) Excluded Taxes and (z) Connection Income Taxes) on its loans, loan principal, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto or (ii) shall impose, modify or deem applicable any reserve requirement (including any reserve requirement imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Affected Party or (iii) shall impose any other condition affecting the rights of any Lender and the Administrative Agent hereunder, and in each case the result of which is to increase the cost to any Affected Party under this Agreement or to reduce the amount of any sum received or receivable by an Affected Party under this Agreement below that which such Affected Party would have received but for such occurrence, then within 30 days following the receipt of written demand by such Affected Party (provided that such Affected Party shall provide the Borrower with notice within a reasonable period of time following such Affected Party’s discovery of such increased costs or reductions and shall include calculations of such compensation in reasonable detail), the Borrower shall pay directly to such Affected Party such additional amount or amounts as will compensate such Affected Party for such additional or increased cost incurred or such reduction suffered to the extent such additional or increased costs or reduction are incurred or suffered in connection with any obligation to make Advances
-47-
hereunder, any of the rights of such Lender or the Administrative Agent hereunder, or any payment made hereunder.
(c) Capital Adequacy. If any Change in Law regarding capital adequacy or liquidity by any Governmental Authority, central bank or comparable agency charged by Applicable Law with the interpretation or administration thereof, or compliance by such Lender or its parent corporation with any request or directive regarding capital adequacy or liquidity (whether or not having the force of law) of any such authority, central bank, or comparable agency, in each case made subsequent to the date hereof, has or would have effect of reducing the rate of return on the capital of any Affected Party as a consequence of its obligations hereunder or arising in connection herewith to a level below that which any such Affected Party could have achieved but for such introduction, change, compliance or change (taking into consideration the policies of such Affected Party with respect to capital adequacy or liquidity) by an amount deemed by such Affected Party to be material, then within 30 days following the receipt of written demand by such Affected Party (which written demand shall be accompanied by a statement setting forth the basis for such demand in reasonable detail), the Borrower shall pay directly to such Affected Party such additional amount or amounts as will compensate such Affected Party for such reduction.
If as a result of any event or circumstance similar to those described in Sections 2.11(b) or 2.11(c), any Affected Party is required to compensate a bank or other financial institution providing liquidity support, credit enhancement or other similar support to such Affected Party in connection with this Agreement or the funding or maintenance of Advances hereunder, then within 30 days following the receipt of written demand by such Affected Party (which written demand shall be accompanied by a statement setting forth the basis for such demand in reasonable detail), the Borrower shall pay to such Affected Party such additional amount or amounts as may be necessary to reimburse such Affected Party for any amounts actually paid by it.
In determining any amount provided for in this Section 2.11, the Affected Party may use any reasonable averaging and attribution methods. Any Affected Party making a claim or demand under this Section 2.11 shall submit to the Borrower a certificate as to such additional or increased cost or reduction, which certificate shall be conclusive absent manifest error.
(d) Effect of Benchmark Transition Event.
(i) Benchmark Replacement. Notwithstanding anything to the contrary in this Agreement or in any other Transaction Document, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any determination of the Benchmark on any date, the Benchmark Replacement will replace the then-current Benchmark for all purposes hereunder or under any Transaction Document in respect of such determination on such date and all determinations on all subsequent dates. If the Benchmark Replacement is determined in accordance with clause (1) or (2) of the definition of “Benchmark Replacement,” in connection with a Benchmark Transition Event, such Benchmark Replacement will become effective as of the Reference Time on the applicable Benchmark Replacement Date without any amendment to, or further action or consent of any other party to, this Agreement. If the Benchmark Replacement is determined in accordance with clause (3) of the definition of “Benchmark Replacement,” such Benchmark Replacement will become effective at 5:00 p.m. on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the parties without any amendment to this Agreement or further action or consent of any other party to this Agreement.
-48-
(ii) Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Transaction Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement.
(iii) Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower and the Lenders of (i) any occurrence of a Benchmark Transition Event and its related Benchmark Replacement Date, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes and (iv) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent pursuant to this Section 2.11(d), including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its sole discretion and without consent from any other party hereto.
(e) Indemnification. The Borrower agrees to indemnify each Lender and to hold each Lender harmless from any loss or expense which such Lender sustains or incurs as a consequence of (i) any default by the Borrower in payment of the principal of or interest on an Advance, including any such loss or expense arising from interest or fees payable by a Lender to lenders of funds obtained by it in order to maintain its Advances based on the applicable Benchmark hereunder or (ii) any failure to borrow any Advance (other than an Advance bearing interest at the Alternative Rate) on the date specified in any Notice of Borrowing (including as a result of the Borrower’s failure to satisfy any conditions precedent to such borrowing); provided, however, the Borrower shall not indemnify any applicable Lender from any loss or expense arising from such Lender’s willful misconduct or gross negligence. This provision shall survive payment of the Advances and the satisfaction of all other Obligations of the Borrower and termination of this Agreement.
(f) Illegality. Notwithstanding any other provision of this Agreement, in the event that any Lender shall have reasonably determined in good faith and is advised by counsel that any Change in Law shall make it unlawful for such Lender to fund or maintain any Advance by compliance by such Lender in good faith with any Law, then such Lender shall promptly notify the Administrative Agent and the Borrower, following which (i) such Lender’s obligation to fund any Advance shall be suspended until such time as such Lender may again fund and maintain its Advances hereunder, (ii) if a Notice of Borrowing has been submitted pursuant to Section 2.4(a) but the affected Advance has not been funded, the applicable Borrower may revoke such Notice of Borrowing by giving written notice to the Administrative Agent thereof on the same day that the Borrower was notified by the Lender pursuant to this Section 2.11(f) and (iii) if such Law shall so mandate, such Lender’s outstanding Advances shall be prepaid by the Borrower, together with accrued and unpaid interest thereon and all other amounts payable by the Borrower to such Lender under this Agreement (in each case, without the imposition of any penalty, breakage costs, or exit fees), on the last day of the Interest Accrual Period with respect to such Advances (or before such date as shall be mandated by such Law), it being acknowledged that any amounts prepaid pursuant to clause (iii) above may be paid with an Advance or Advances made with an interest rate calculated by reference to the Alternative Rate.
Section 2.12 Payments and Computations. (a) The Borrower (through the Administrative Agent pursuant to Section 2.7) shall make each payment and prepayment
-49-
hereunder and under the Loan Notes in respect of principal, interest, expenses, indemnities, fees or other Obligations due from the Borrower to the Administrative Agent or any Lender not later than [***] (New York City time) on the day when due in U.S. Dollars to the Administrative Agent at its address referred to in Section 10.3 or to the Administrative Agent’s Account in immediately available, same-day funds. The Administrative Agent will promptly thereafter cause like funds to be distributed (i) if such payment by the Borrower is in respect of principal, interest, commitment fees or any other Obligation then payable hereunder and under the other Transaction Documents to more than one Lender, then to such Lenders ratably in accordance with the amounts of such respective Obligations then payable to such Lenders and (ii) if such payment by the Borrower is in respect of any Obligation then payable hereunder to one Lender, then to such Lender, in each case to be applied in accordance with Section 2.7. All computations of interest based on the Alternative Rate shall be made by the Administrative Agent on the basis of a year of 365 or 366 days, as the case may be, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. Each determination by the Administrative Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.
(b) All payments to be made in respect of fees due hereunder to the Administrative Agent or any Lender from the Borrower shall be made pursuant to Section 2.7, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower, and without setoff, counterclaim or other deduction of any nature (other than with respect to Taxes pursuant to Section 2.15), and an action therefor shall immediately accrue.
Section 2.13 Payment on Non-Business Days. Whenever any payment hereunder or under the Loan Notes shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest.
Section 2.14 Extension of Availability Period. (a) The Borrower may, by notice to the Administrative Agent following the two year anniversary of the Closing Date, request the Administrative Agent to extend the Availability Period End Date.
(b) The Administrative Agent, with the written consent of each Lender (other than any Defaulting Lender), shall advise the Borrower whether the Lenders agree to any requested extension of the Availability Period End Date within thirty (30) days after the Borrower has given notice to the Administrative Agent that it requests an extension of the Availability Period End Date; provided, that if the Lenders do not agree to any requested extension, the Borrower may renew its request for an extension at any time or from time to time prior to the end of the Availability Period End Date then in effect; provided further, that the Administrative Agent’s failure to respond within such period shall constitute the Administrative Agent’s denial of the requested extension.
(c) Any such request to extend the Availability Period End Date shall be effective only upon the written agreement of the Administrative Agent, the Lenders, the Borrower, and the Guarantor. Upon entering into such written agreement, the date referenced in the definition of “Availability Period End Date” shall be automatically extended for the amount of time agreed to by the Administrative Agent, the Lenders, the Borrower, and the Guarantor. This Section shall supersede any provisions in Section 10.2 to the contrary.
Section 2.15 Taxes.
-50-
(a) Defined Terms. For purposes of this Section 2.15 the term “applicable Law” includes FATCA.
(b) Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower under any Transaction Document shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(c) Payment of Other Taxes by the Borrower. The Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable Law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
(d) Indemnification by the Borrower. The Borrower shall indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Recipient (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Recipient, shall be conclusive absent manifest error.
(e) Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.8 relating to the maintenance of the Participant Register, and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Transaction Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Transaction Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this Section 2.15(e).
(f) Evidence of Payments. As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section 2.15, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
-51-
(g) Status of Recipients.
(i) Any Recipient that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Transaction Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Recipient, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Recipient is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Sections 2.15(g)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Recipient’s reasonable judgment such completion, execution or submission would subject such Recipient to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Recipient.
(ii) Without limiting the generality of the foregoing,
(A) any Recipient that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Recipient is exempt from U.S. federal backup withholding tax;
(B) any Recipient that is not a U.S. Person shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the Borrower or Administrative Agent) on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
(1) in the case of a Recipient claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Transaction Document, executed copies of IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Transaction Document, IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(2) executed copies of IRS Form W-8ECI;
(3) in the case of a Recipient claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Internal Revenue Code, (x) a certificate (in a form reasonably acceptable to the Borrower) to the effect that such Recipient is not a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the
-00-
Xxxxxxxx Xxxxxxx Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN or W-8BEN-E, as applicable; or
(4) to the extent a Recipient is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or W-8BEN-E, a U.S. Tax Compliance Certificate, IRS Form W-9 or other certification documents from each beneficial owner, as applicable; provided that if the Recipient is a partnership and one or more direct or indirect partners of such Recipient are claiming the portfolio interest exemption, such Recipient may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner;
(C) any Recipient which is not a U.S. Person shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and
(D) if a payment made to a Recipient under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Recipient were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such Recipient shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by Law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Recipient has complied with such Recipient’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (d), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
Each Recipient agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
(h) Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.15 (including by the payment of additional amounts pursuant to this Section 2.15), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this Section 2.15(i) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this
-53-
Section 2.15(i), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 2.15(i) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This Section 2.15(i) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(i) Survival. Each party’s obligations under this Section 2.15 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Transaction Document.
Section 2.16 Defaulting Lenders. (a) Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:
(i) The Non-Usage Fee and the Minimum Utilization Fee shall cease to accrue on the Commitment of such Defaulting Lender pursuant to Section 2.5; and
(ii) the Commitments and Advances of such Defaulting Lender shall not be included in determining whether all Lenders or the Majority Lenders, as applicable, have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 10.2); provided that any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender which affects such Defaulting Lender differently than other affected Lenders shall require the consent of such Defaulting Lender.
(b) If the Borrower and the Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent shall so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender shall purchase at par such of the Advances of the other Lenders as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Advances in accordance with its Commitment, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender having been a Defaulting Lender.
Section 2.17 Security Interest. (a) Subject to the terms of the Acknowledgment Agreements (as applicable) and the subordination described in Section 2.18, Section 2.19 and Section 2.20, the Borrower hereby grants, pledges and assigns to the Administrative Agent (on behalf of and for the ratable benefit of each Secured Party) as security for the payment and performance by the Borrower of the Obligations, a security interest in all of the Borrower’s right, title and interest in, to and under, in any case, whether now held or hereafter acquired (i) all Xxxxxx Xxx MSRs; (ii) all Xxxxxxx Mac MSRs; (iii) all Xxxxxx Xxx MSRs; (iv) the Borrower’s rights (but not its obligations) under the Transaction Documents including without limitation, any rights to receive payments thereunder or any rights to collateral thereunder whether now held or hereafter acquired, now existing or hereafter created; (v) all collateral however defined or
-54-
described under the Transaction Documents to the extent not otherwise included above; (vi) all Related Security; (vii) all Records relating to and all proceeds of the foregoing (collectively, (i)-(vii), the “MSR Collateral”), and (viii) all Additional Collateral (collectively, the “Borrower Collateral”). Notwithstanding anything herein to the contrary, the term “Borrower Collateral” shall not include, and the grant, pledge and assignment of a security interest contained in this Section 2.17 shall not include a security interest in any Excluded Collateral.
(b) Additionally, the Guarantor hereby grants, pledges and assigns to the Administrative Agent (on behalf of and for the ratable benefit of each Secured Party) as security for the payment and performance by the Borrower of the Obligations and the Guarantor of the Guaranteed Obligations, a security interest in all of the Guarantor’s right, title and interest in, to and under, in any case, whether now owned or hereafter acquired, all Additional Guarantor Collateral (together with the Borrower Collateral, the “Collateral”). For the avoidance of doubt, each grant, pledge, or assignment of the Collateral hereunder shall, subject to the rights of Xxxxxxx Mac under the Xxxxxxx Mac Acknowledgment Agreement, include all of the Borrower’s and Guarantor’s rights, but not its obligations, with respect to such Collateral.
(c) The parties acknowledge that the Agencies have certain rights under the Acknowledgment Agreements and the Servicing Contracts (as applicable), including the right to cause the Borrower to transfer servicing to a transferee servicer under certain circumstances as more particularly set forth therein and to terminate the Borrower, with or without cause. The transferee servicer shall have all the rights and remedies against the Borrower and the Collateral as set forth herein and under the UCC.
(d) Each of the Borrower and the Guarantor will promptly, at its respective expense, execute and deliver such instruments, financing and continuation statements and documents and take such other actions as the Administrative Agent may reasonably request from time to time in order to perfect, protect, evidence, exercise and enforce the Administrative Agent’s and each Lender’s interests, rights and remedies under and with respect to the Transaction Documents, the Advances and the Collateral. To the extent the Borrower or the Guarantor has filed or caused the filing of any document as provided above, the Borrower or the Guarantor, as applicable, shall deliver to the Administrative Agent file-stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following such recording, registration or filing.
(e) If the Borrower fails to perform any of its Obligations, then the Administrative Agent may (but shall not be required to) perform or cause to be performed such Obligation, and the costs and expenses incurred by the Administrative Agent in connection therewith shall be payable by the Borrower. Without limiting the generality of the foregoing, if the Borrower fails to perform any of its Obligations, the Borrower authorizes the Administrative Agent, at the option of the Administrative Agent and the expense of the Borrower, at any time and from time to time, to take all actions and pay all amounts that the Administrative Agent reasonably deems necessary or appropriate to protect, enforce, preserve, insure, service, administer, manage, perform, maintain, safeguard, collect or realize on the Collateral, including the right to liquidate the Collateral, and the Administrative Agent’s Liens and interests therein or thereon and to give effect to the intent of the Transaction Documents. No Potential Event of Default or Event of Default shall be cured by the payment or performance of any Obligation by the Administrative Agent on behalf of the Borrower. The Administrative Agent may make any such payment in accordance with any xxxx, statement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such xxxx, statement or estimate or into the validity of any tax assessment, sale, forfeiture, Tax Lien, title or claim except to the extent such payment is being contested in good faith by the Borrower
-55-
in appropriate proceedings and against which adequate reserves are being maintained in accordance with GAAP.
(f) Upon termination of this Agreement and payment in full of all Obligations (other than contingent obligations not then due), Administrative Agent shall release its security interests in the Collateral and promptly file termination statements with respect to each financing statement filed pursuant to this Section 2.17 and take such other action as may reasonably be requested by the Borrower or Guarantor to evidence such release. If evidence of filing such termination statements has not been delivered to the Borrower or Guarantor, as applicable, within ten (10) days of termination of this Agreement and payment in full of all Obligations (other than contingent obligations not then due), the Administrative Agent hereby authorizes the Borrower or the Guarantor, as applicable, to file such termination statements.
Section 2.18 Limited Pledge of Xxxxxx Xxx Servicing. Notwithstanding anything to the contrary contained herein or in any of the other Transaction Documents, the pledge of the Borrower’s right, title and interest in the Xxxxxx Mae MSRs under the Xxxxxx Xxx Lender Contract identified on each Schedule of Assets shall only secure the Borrower’s indebtedness and obligations to the Administrative Agent and each Lender incurred for (i) the purposes of securing (a) a warehouse line of credit and used for one of the purposes set forth in clauses (b) or (c), (b) a loan whose proceeds have been or will be used to acquire or retain through its origination activities rights in the Xxxxxx Mae Lender Contract in accordance with the provisions of the Xxxxxx Xxx Selling Guide and the Xxxxxx Mae Servicing Guide by the Borrower, (c) a loan whose proceeds have been or will be used to purchase from another mortgage banking company the contract right to service Mortgage Loans, or to purchase assets of, or stock issued by, such company, or (ii) any other purpose which Xxxxxx Xxx, in its sole and absolute discretion, considers to be consistent with the purposes of the Xxxxxx Mae Acknowledgment Agreement to be executed among the Borrower, the Administrative Agent and Xxxxxx Xxx; provided, that the foregoing provisions of this paragraph shall be deemed automatically supplemented or amended if and to the extent Xxxxxx Mae supplements or amends the corresponding requirement, whether in its rules, regulations, guides, Xxxxxx Xxx Lender Contract, Xxxxxx Mae Acknowledgment Agreement or published announcements or otherwise waives or grants exceptions from such requirement, and in each instance, with the same substantive force and effect; and provided further that the security interest created hereby is and shall be subject to the following condition and such provision below shall be included in each financing statement filed in respect hereof (defined terms used below shall have the meaning set forth in the Xxxxxx Xxx Acknowledgment Agreement):
“The Security Interest described in this financing statement is subordinate to all rights of Xxxxxx Mae under (i) the terms of an Acknowledgment Agreement, with respect to the Security Interest among Xxxxxx Xxx, Home Point Financial Corporation (the “Debtor”) and Xxxxxxx Sachs Bank USA, as Administrative Agent for Lenders and (ii) the Mortgage Selling and Servicing Contract, the Xxxxxx Xxx Selling Guide, the Xxxxxx Mae Servicing Guide and all supplemental servicing instructions or directives provided by Xxxxxx Xxx, all applicable master agreements, recourse agreements, repurchase agreements, indemnification agreements, loss-sharing agreements, and any other agreements between Xxxxxx Mae and the Debtor, and all as amended, restated or supplemented from time to time (collectively, the “Xxxxxx Xxx Lender Contract”), which rights include the right of Xxxxxx Mae to terminate the Xxxxxx Xxx Lender Contract with or without cause and the right to sell, or have transferred, the Servicing Rights.”
-56-
Section 2.19 Limited Pledge of Xxxxxxx Mac Servicing. Notwithstanding anything to the contrary contained herein or in any of the other Transaction Documents, the pledge of the Borrower’s right, title and interest in the Xxxxxxx Mac MSRs under the Xxxxxxx Mac Servicing Contract identified on each Schedule of Assets shall only secure the Borrower’s indebtedness and obligations to the Administrative Agent and each Lender incurred for the following limited purposes: (i) to fund the Borrower’s purchase of additional servicing portfolios; (ii) to effect the Borrower’s purchase of a mortgage banking company; (iii) to fund the Borrower’s working capital consistent with its residential mortgage business operations or (iv) any other purpose which Xxxxxxx Mac, in its sole and absolute discretion, considers to be consistent with the purposes of the Xxxxxxx Mac Acknowledgment Agreement; provided, that the foregoing provisions of this paragraph shall be deemed automatically supplemented or amended if and to the extent Xxxxxxx Mac supplements or amends the corresponding requirement, whether in its rules, regulations, guides, Xxxxxxx Mac Servicing Contract, the Xxxxxxx Mac Acknowledgment Agreement or published announcements or otherwise waives or grants exceptions from such requirement, and in each instance, with the same substantive force and effect; and provided further that the security interest created hereby shall, following execution of the Xxxxxxx Mac Acknowledgment Agreement, be subject to the following condition and such provision below shall be included in each financing statement filed in respect hereof after execution of the Xxxxxxx Mac Acknowledgment Agreement (defined terms used below shall have the meaning set forth in the Xxxxxxx Mac Acknowledgment Agreement):
“Notwithstanding anything to the contrary herein, the security interest publicized or perfected by this financing statement is subject and subordinate in each and every respect (a) to all rights, powers and prerogatives of the Federal Home Loan Mortgage Corporation (“Xxxxxxx Mac”) under and in connection with the Purchase Documents, as that term is defined in the Xxxxxxx Mac Single-Family Seller/Servicer Guide, which rights include, without limitation, the right of Xxxxxxx Mac to disqualify (in whole or in part) the debtor named herein as an approved Xxxxxxx Mac Seller/Servicer, with or without cause, and the right to terminate (in whole or in part) the unitary, indivisible master servicing contract and to transfer and sell all or any portion of said servicing contract rights, as provided in the Purchase Documents; and (b) to all claims of Xxxxxxx Mac arising out of or relating to any and all breaches, defaults and outstanding obligations of the debtor to Xxxxxxx Mac.”
Section 2.20 Limited Pledge of Xxxxxx Xxx Servicing. The Administrative Agent and each additional Lender acknowledge and agree that (x) the Borrower is entitled to servicing income with respect to a given mortgage pool only so long as Borrower is a Xxxxxx Mae approved issuer; (y) upon the Borrower’s loss of such approved issuer status, the Administrative Agent and each additional Lender’s rights to any servicing income related to a given mortgage pool also terminate; and (z) the pledge of the Borrower’s rights to servicing income conveys no rights (such as a right to become a substitute servicer or issuer) that are not otherwise specifically provided for in the Xxxxxx Xxx Contract, provided that this sentence shall automatically be deemed amended or modified if and to the extent Xxxxxx Mae amends the Xxxxxx Xxx Contract, the applicable Acknowledgment Agreement, if any, or published announcements and provided further that the security interest created hereby is subject to the following provision to be included in each financing statement filed in respect hereof:
Notwithstanding anything to the contrary set forth herein:
-57-
(a) The property subject to the security interest reflected in this instrument includes all of the right, title and interest of Home Point Financial Corporation (“Debtor”) in certain mortgages and/or participation interests related to such mortgages (“Pooled Mortgages”), and pooled under the mortgage-backed securities program of the Government National Mortgage Association (“Xxxxxx Mae”), pursuant to section 306(g) of the National Housing Act, 12 U.S.C. § 1721(g);
(b) To the extent that the security interest reflected in this instrument relates in any way to the Pooled Mortgages, such security interest is subject and subordinate to all rights, powers and prerogatives of Xxxxxx Xxx, whether now existing or hereafter arising, under and in connection with: (i) 12 U.S.C. § 1721(g) and any implementing regulations; (ii) the terms and conditions of that certain Acknowledgment Agreement, dated as of July 11, 2019, with respect to the Security Interest, by and among Xxxxxx Mae, Debtor and Xxxxxxx Xxxxx Bank USA, as administrative agent; (iii) applicable Guaranty Agreements and contractual agreements between Xxxxxx Mae and the Debtor; and (iv) the Xxxxxx Xxx Mortgage-Backed Securities Guide, Handbook 5500.3 Rev. 1, and other applicable guides (items (i), (iii) and (iv), collectively, the “Xxxxxx Mae Contract”);
(c) Such rights, powers and prerogatives of Xxxxxx Xxx include, but are not limited to, Xxxxxx Mae’s right, by issuing a letter of extinguishment to Debtor, to effect and complete the extinguishment of all redemption, equitable, legal or other right, title or interest of the Debtor in the Pooled Mortgages, in which event the security interest as it relates in any way to the Pooled Mortgages shall instantly and automatically be extinguished as well; and
(d) For purposes of clarification, “subject and subordinate” in clause (2) above means, among other things, that any cash held by Xxxxxxx Xxxxx Bank USA as collateral and any cash proceeds received by Xxxxxxx Sachs Bank USA in respect of any sale or other disposition of, collection from, or other realization upon, all or any part of the collateral may only be applied by Xxxxxxx Xxxxx Bank USA to the extent that such proceeds have been received by, or for the account of, the Debtor free and clear of all Xxxxxx Mae rights and other restrictions on transfer under applicable Xxxxxx Xxx guidelines; provided that this clause (4) shall not be interpreted as establishing rights in favor of Xxxxxx Mae except to the extent that such rights are reflected in, or arise under, the Xxxxxx Xxx Contract.
Section 2.21 Commitment Increase. Following execution of Acknowledgment Agreements with all Agencies, the Borrower may request an increase to the Aggregate Commitment Amount, provided that any such request shall be subject to the following conditions: (a) any such increase of the Aggregate Commitment Amount will be effective only upon the written agreement of the Administrative Agent, the applicable Lenders that will commit to the increase, the Borrower, and the Guarantor, and (b) the Administrative Agent shall have the right to elect to take all or any portion of the amount of such requested increase notwithstanding its percentage of the Aggregate Commitment Amount at the time of such request. The Administrative Agent will respond to any such request, on behalf of the applicable Lenders, within fifteen (15) Business Days; provided, that the Administrative Agent’s failure to respond within such period shall be deemed to be a rejection of the requested increase. In the event that an increase requested in accordance with the terms of this Section 2.21 shall be rejected, or deemed rejected, then an additional Lender identified by the Borrower may be made party to this Agreement; provided, however, that (i) GS Bank shall retain majority voting rights hereunder, and (ii) the addition of such Lender must be consented to in writing by the Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed).
Section 2.22 Base Servicing Fee Increases. Upon written notice to the Borrower by any Agency of the need to improve or maintain adequate performance of servicing activities or to
-58-
comply with the applicable Agency Requirements, the Borrower shall deliver such notice to the Administrative Agent within five (5) Business Days of receipt. Such notice from the Borrower shall include a request to increase the Base Servicing Fee Rate. The Base Servicing Fee Rate shall be adjusted to address the necessary additional costs required to comply with such notice from the applicable Agency. The Base Servicing Fee Rate shall become effective on the next Monthly Payment Date, but no less than thirty (30) days after delivery of such notice from Borrower to the Administrative Agent and no more than sixty (60) days from the date of delivery of such notice from such Agency. Upon request therefor by the Administrative Agent, the Borrower shall deliver to the Administrative Agent a written notice setting forth in reasonable detail the basis for any such proposed increase.
Section 2.23 Increase in Commitment Amounts.
(a) Request for Increase. The Borrower may from time to time request to effect an increase in the Aggregate Commitment Amount (each such increase, an “Incremental Commitment”) by obtaining additional Commitments from one or more Lenders that have, in their sole and absolute discretion agreed to such increase; provided that (i) after giving effect to any such Incremental Commitment, the Aggregate Commitment Amount shall not exceed the Aggregate Facility Amount; (ii) any request for an Incremental Commitment shall be in a minimum amount of [***] or a higher integral multiple of [***]; and (iii) after giving effect to such Incremental Commitment and the Advances in connection therewith, no Potential Event of Default, Event of Default or Borrowing Base Deficiency shall exist.
(b) Increase Effective Date and Allocations. Any increase in the Aggregate Commitment Amount pursuant to this Section 2.23 shall become effective one (1) Business Day after the date on which the Administrative Agent has received notice from the applicable Lender(s) of their agreement to increase their Commitment or on such other date as is agreed among the Borrower, the Administrative Agent and the increasing Lender(s). The Administrative Agent shall promptly notify the Lenders of any increase in the Aggregate Commitment Amount pursuant to this Section 2.23.
No Lender shall be obligated to increase the amount of its Commitment.
ARTICLE III
CONDITIONS OF LENDING AND CLOSING
CONDITIONS OF LENDING AND CLOSING
Section 3.1 Conditions Precedent to Closing. The effectiveness of this Agreement and the obligations of the parties hereto are subject to the condition precedent that the Lenders shall have received or waived receipt of the following on or prior to the Closing Date (unless otherwise noted):
(a) Transaction Documents and other Closing Documents. Each of the Transaction Documents (other than the Xxxxxxx Mac Acknowledgment Agreement and the Xxxxxx Mae Acknowledgment Agreement) shall be executed on or before the Closing Date, shall be in full force and effect and all consents, waivers and approvals necessary for the consummation of the transactions contemplated thereby shall have been obtained and shall be in full force and effect, and the Administrative Agent shall have received a duly executed counterpart thereof; provided that, to the extent the Borrower has used commercially reasonable efforts to obtain the Account Control Agreement prior to the Closing Date and is unable to do so without undue burden or expense, the Account Control Agreement may be delivered no later than thirty (30) days (or such later date as may be reasonably agreed by the Administrative Agent) after the Closing Date.
-59-
(b) Receipt of Loan Notes. The Administrative Agent shall have received a duly executed Loan Note for each Lender that has requested the same.
(c) Know Your Customer Information. The Administrative Agent shall have received (i) all documentation and other information required by regulatory authorities under applicable “Know Your Customer” and anti-money laundering rules and regulations, including the Patriot Act and (ii) to the extent any Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, any Lender that has requested, in a written notice to the Borrower at least five days prior to the Closing Date (or such shorter period as may be agreed by the Administrative Agent), a Beneficial Ownership Certification in relation to such Borrower shall have received such Beneficial Ownership Certification (provided that, upon the execution and delivery by such Lender of its signature page to this Agreement, the condition set forth in this clause (ii) shall be deemed to be satisfied).
(d) Payment of Fees. On or prior to the Closing Date, the Borrower shall have paid all fees, including the Upfront Fee, previously agreed in writing to be paid on or prior to the Closing Date.
(e) Enforceability of Loan Note. Each Loan Note shall be entitled to the benefit of the security provided herein and shall constitute the legal, valid and binding agreement of the Borrower, enforceable against the Borrower in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally or general principals of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law)).
(f) Evidence of Insurance. The Administrative Agent shall have received certification evidencing coverage under the insurance policies referred to in Section 5.1(t) and evidence that the Borrower and the Guarantor have added Administrative Agent as an additional loss payee under the insurance policies referred to in Section 5.1(t).
(g) Security Interest. Evidence that all other actions necessary or, in the opinion of Administrative Agent, desirable to perfect and protect Administrative Agent’s interest in the Assets have been taken, including, without limitation, duly authorized and filed Uniform Commercial Code financing statements on Form UCC-1.
(h) Organizational Documents. A certificate of the corporate secretary of the Borrower and of the Guarantor in form and substance acceptable to Administrative Agent, attaching certified copies of the Borrower’s and the Guarantor’s charter, bylaws and corporate resolutions approving the Transaction Documents and Transactions thereunder (either specifically or by general resolution), and all documents evidencing other necessary corporate action or governmental approvals as may be required in connection with the Transaction Documents.
(i) Good Standing Certificate. A certified copy of a good standing certificate or equivalent from the jurisdiction of organization of the Borrower and the Guarantor, dated no earlier than the date ten (10) Business Days prior to the Closing Date.
(j) Incumbency Certificate. An incumbency certificate of the corporate secretary of the Borrower and of the Guarantor, certifying the names, true signatures and titles of the representatives duly authorized to request transactions hereunder and to execute the Transaction Documents.
-60-
(k) Due Diligence Review. The Administrative Agent shall have completed, to its satisfaction, its due diligence review of the Borrower, the Guarantor, the Assets, the Agencies and such other matters as the Administrative Agent and the Lenders shall have determined in the exercise of their reasonable discretion are necessary and proper for the execution, delivery and performance under this Agreement and the other Transaction Documents.
(l) Legal Opinions. The Administrative Agent shall have received usual and customary legal opinions in form and substance satisfactory to Administrative Agent and its counsel (including, but not limited to, those regarding corporate matters, enforceability and security interest perfection).
Section 3.2 Conditions Precedent to All Advances. The obligation of each Lender to make or participate in each Advance (including the initial Advances hereunder) shall be subject, at the time thereof, to the satisfaction of the following conditions:
(a) Representations and Warranties. All of the representations and warranties of the Borrower and of the Guarantor contained in this Agreement and the other Transaction Documents shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality, in which case such representations and warranties shall be true and correct in all respects) with the same effect as though such representations and warranties had been made on and as of the date of such Advance, except to the extent that such representations and warranties expressly relate to an earlier specified date or period, in which case such representations and warranties shall have been true and correct in all material respects (except for those representations and warranties that are qualified by materiality, in which case such representations and warranties shall be true and correct in all respects) as of the date when made or for the respective period, as the case may be.
(b) No Event of Default; No Potential Event of Default. No Potential Event of Default or Event of Default has occurred and is continuing or would occur or be continuing immediately after giving effect to such Advance.
(c) No Borrowing Base Deficiency or Funding Base Deficiency. No Borrowing Base Deficiency or Funding Base Deficiency shall exist immediately prior and after giving effect to such Transaction.
(d) Availability Period. The Availability Period shall not have terminated, nor shall it have terminated immediately after giving effect to such Advance.
(e) Notice of Borrowing. In accordance with Section 2.4, the Administrative Agent shall have received a properly completed Notice of Borrowing and a Borrowing Base Certificate, including a Schedule of Eligible Assets and Schedule of Ineligible Assets from the Borrower.
(f) Requirements of Law. None of the Administrative Agent or any Lender shall have determined that the introduction of any Applicable Law or a Change in Law or in the interpretation or administration of any Applicable Law applicable to the Administrative Agent or such Lender has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for the Administrative Agent or such Lender to make any Advance.
(g) No Material Adverse Change. Since the Closing Date, there has been no Material Adverse Change.
-61-
(h) Fees. The Administrative Agent and each Lender shall have received payment in full of all fees and expenses which are due and payable hereunder to the Administrative Agent or such Lender on or before such date.
(i) Maximum Draw. After the Closing Date and the initial Advance, no more than [***] of the Aggregate Commitment Amount may be drawn in any rolling thirty (30) day period, unless otherwise agreed by the Administrative Agent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of the Borrower and the Guarantor. Each of the Borrower and the Guarantor represents and warrants to the Administrative Agent and each Lender as of the Closing Date, as of each Borrowing Date, as of each Monthly Payment Date or any other date on which the representations and warranties are required to be made hereunder, as follows:
(a) Organization; Corporate Powers. Each of the Borrower and the Guarantor (i) is a duly organized and validly existing corporation, in good standing under the laws of the State of New Jersey and the State of Delaware, as applicable, (ii) has the corporate power and authority to own its property and assets and to transact the business in which it is engaged and presently proposes to engage, and (iii) is duly qualified, in good standing and is authorized to do business in every jurisdiction where its assets are located and wherever necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or in good standing has not had, and would not be reasonably expected to have, a Material Adverse Effect.
(b) Authority and Enforceability. Each of the Borrower and the Guarantor has the corporate or other organizational power and authority to execute, deliver and carry out the terms and provisions of the Transaction Documents to which it is party and has taken all necessary company or other organizational action to authorize the execution, delivery and performance of the Transaction Documents to which it is party. Each of the Borrower and the Guarantor has duly executed and delivered each Transaction Document to which it is party and each Transaction Document to which it is party constitutes the legal, valid and binding agreement and obligation of it enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).
(c) Equity Interests and Ownership. Schedule 4.1(c) correctly sets forth the ownership interest of the Borrower, the Guarantor, and each of their Subsidiaries in their respective Subsidiaries as of the Closing Date. Except as set forth on Schedule 4.1(c), as of the Closing Date, there is no existing option, warrant, call, right, commitment or other agreement to which the Borrower or the Guarantor is a party requiring, and there is no membership interest or other Equity Interests of the Borrower or the Guarantor outstanding which upon conversion, exchange or exercise would require, the issuance by the Borrower or the Guarantor of any additional membership interests or other Equity Interests of the Borrower or the Guarantor or other Securities convertible into or exchangeable or exercisable for or evidencing the right to subscribe for or purchase, a membership interest or other Equity Interests of the Borrower or the Guarantor, and no Securities or obligations evidencing any such rights are authorized, issued or outstanding.
-62-
(d) No Conflict. The execution, delivery and performance by each of the Borrower and the Guarantor of the Transaction Documents to which it is a party and the consummation of the transactions contemplated by the Transaction Documents do not and shall not (a) violate (i) any Applicable Law which violation would reasonably be expected to have a Material Adverse Effect, (ii) any of the organizational documents of the Borrower or the Guarantor, (iii) any order, judgment, injunction or decree of any court or other agency of government binding on the Borrower or the Guarantor, or (iv) any indenture, loan agreement, warehouse line of credit, repurchase agreement, mortgage, deed of trust, servicing contract or any other material contractual obligation of the Borrower or the Guarantor except to the extent such violation would not reasonably be expected to have a Material Adverse Effect; (b) result in or require the creation or imposition of any Lien upon any of the properties or assets of the Borrower or the Guarantor (other than any Liens created under any of the Transaction Documents in favor of the Administrative Agent on behalf of the Secured Parties); or (c) require any approval of stockholders, members or partners or any approval or consent of any Person under any material contractual obligation of the Borrower or the Guarantor, except for such approvals or consents which have been obtained on or before the Closing Date.
(e) Government Approvals. Except any which have been obtained, no order, consent, authorization, approval, license, or validation of, or filing recording, registration with, or exemption by, any Governmental Authority is required to authorize or is required as a condition to: (i) the execution, delivery and performance by the Borrower or the Guarantor of any Transaction Document to which it is a party or any of its obligations thereunder or (ii) the legality, validity, binding effect or enforceability of any Transaction Document to which the Borrower or the Guarantor is a party.
(f) Solvency. Each of the Borrower and the Guarantor is solvent and will not be rendered insolvent as a result of entering into any Transaction and, after giving effect to each Transaction, will not be left with an unreasonably small amount of capital with which to engage in its business. Neither Borrower nor the Guarantor intend to incur, nor believe that it has incurred, debts beyond its ability to pay such debts as they mature and is not contemplating, and is not aware of any Person threatening, the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official in respect of such entity or any of its assets. Neither the Borrower nor the Guarantor is selling and/or pledging any Assets with any intent to hinder, delay or defraud any of its creditors.
(g) True and Complete Disclosure.
(i) All information, reports, exhibits, schedules, financial statements or certificates of the Borrower, the Guarantor, or any Affiliate thereof furnished or to be furnished to the Administrative Agent in connection with the initial or any ongoing due diligence of the Borrower, the Guarantor, or any Affiliate thereof, or the negotiation, preparation, or delivery of the Transaction Documents, are true and complete in all material respects. The written information (other than financial projections, forward looking statements, and information of a general economic or industry specific nature) that has been made available to the Administrative Agent or any Lender by or on behalf of the Borrower, the Guarantor, or any Affiliate thereof in connection with the Transactions hereunder, when taken as a whole, does not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in the light of the circumstances under which such statements are made; provided that with respect to projected financial information, the Borrower represents on behalf of itself and each Subsidiary, only that such information was prepared in good faith based upon
-63-
assumptions believed to be reasonable at the time, it being understood that such projections as to future events are not to be viewed as facts and that actual financials during the period or periods covered by any such projections may differ from the projected results.
(ii) As of the Closing Date, to the best knowledge of the Borrower, the information included in the Beneficial Ownership Certification provided on or prior to the Closing Date to any Lender in connection with this Agreement is true and correct in all respects.
(h) Financial Statements. The financial statements of the Borrower and of the Guarantor delivered to the Administrative Agent on or prior to the Closing Date fairly present in all material respects on a consolidated basis the assets, liabilities and financial position of the Borrower and the Guarantor as at the dates of such financial statements, and the results of the operations and changes of financial position for the periods then ended (other than customary year-end adjustments for unaudited financial statements). For the avoidance of doubt, the financial statements described in the preceding sentence (the receipt of which is hereby acknowledged by the Administrative Agent) consist of copies of each of the Borrower’s and Guarantor’s balance sheets for the fiscal years of Borrower and Guarantor ended December 31, 2019 and December 31, 2020 and the related statements of income, cash flows, and shareholders’ equity for Borrower and Guarantor for such fiscal years, with the opinion thereon of Borrower’s and Guarantor’s independent accountants. All such financial statements are complete and correct and fairly present, in all material respects, the financial condition of the Borrower and the Guarantor and the results of their respective operations as at such dates and for such fiscal periods, all in accordance with GAAP applied on a consistent basis. Since the date of the most recent financial statements referenced above for each of the Borrower and the Guarantor, there has been no Material Adverse Change in the consolidated business, operations or financial condition of the Borrower or the Guarantor from that set forth in such financial statements nor is the Borrower or the Guarantor aware of any state of facts which (with notice or the lapse of time) would or could result in any such Material Adverse Change. The Borrower and the Guarantor each have, on the date of the statements delivered pursuant to this clause (h) no material liabilities, direct or indirect, fixed or contingent, matured or unmatured, known or unknown, or material 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 Borrower or the Guarantor except as heretofore disclosed to the Administrative Agent in writing.
(i) Litigation. There is no action, proceeding or investigation pending involving the Borrower or the Guarantor or, to the best of its knowledge, threatened against the Borrower or the Guarantor before any Governmental Authority or Agency (A) asserting the invalidity of this Agreement, any Transaction Document or any transaction contemplated hereunder, (B) seeking to prevent the consummation of any of the transactions contemplated by this Agreement, any Transaction Document or any transaction contemplated hereunder, (C) making a claim individually or in the aggregate that would reasonably be expected to result in a Material Adverse Effect if adversely determined, (D) which requires filing with the SEC in accordance with the Exchange Act or any rules thereunder or (E) which might materially and adversely affect the validity of the Assets, the Servicing Contracts or the performance by it of its obligations under, or the validity or enforceability of, this Agreement, any Transaction Document or any Transaction contemplated hereunder.
(j) Use of Proceeds. Each Advance will be used to (A) purchase, in the ordinary course of business, Agency eligible MSRs and related assets, (B) pay certain fees and
-64-
expenses incurred in connection with the establishment of the credit facility set forth in this Agreement, (C) subject to the provisions of Section 2.19, make cash distributions from time to time pursuant to Section 5.2(c) in an amount not exceeding the excess of the Borrowing Base over the outstanding principal amount of the Advances and (D) for general corporate purposes. The Borrower will only use the proceeds of any Advance as permitted under Section 2.3. No part of the proceeds of any Advance will be used directly or indirectly to purchase or carry Margin Stock, or to extend credit to others for the purpose of purchasing or carrying any Margin Stock, in violation of any of the provisions of Regulations T, U or X of the Board of Governors of the Federal Reserve System. Neither the Borrower nor the Guarantor is engaged in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. At no time would more than 25% of the value of the assets of the Borrower or the Guarantor that are subject to any “arrangement” (as such term is used in Section 221.2(g) of such Regulation U) hereunder be represented by Margin Stock. The Borrower shall not, to its actual knowledge, use the proceeds of any Transaction to purchase any asset or securities from, or otherwise transfer the proceeds of the Transaction to, an “affiliate” of any Lender, as such term is defined in 12 C.F.R. Part 223.
(k) Accounts. The account number of the Borrower’s Account is specified on Schedule I attached hereto, as updated pursuant to Section 8.1. Borrower will keep the Collection Account and the Borrower’s Account segregated and such accounts will not be commingled.
(l) ERISA. Except as would not reasonably be expected to result in a Material Adverse Effect, no ERISA Event has occurred or is reasonably expected to occur. Neither the Borrower nor the Guarantor is (i) an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code or a “governmental plan” within the meaning of Section 3(32) of ERISA, (ii) subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans or (iii) holding assets that constitute “plan assets” within the meaning of 29 C.F.R. Section 2510.3-101, as modified in application by Section 3(42) of ERISA.
(m) The Servicing Contracts. The Borrower has delivered to the Administrative Agent a copy of (x) each of the Servicing Contracts and (y) all amendments, restatements, supplements or other modifications thereto that could reasonably be expected to adversely affect the Collateral or the Administrative Agent’s interest therein or result in a Material Adverse Effect, and the Borrower hereby certifies that the copies delivered to the Administrative Agent by the Borrower are true, correct and complete. Each such document to which the Borrower is a party has been duly executed and delivered by the Borrower and is in full force and effect, and no default or event of default (howsoever defined) has occurred and is continuing thereunder, except where the occurrence and continuance of such default or event of default would not reasonably be expected to result in a Material Adverse Effect.
(n) Forms of Servicing Contracts. Each of the Servicing Contracts have been executed on the respective Agency’s standard forms, which incorporates the related Agency Guide with no amendment to such Servicing Contract that would grant the related Agency additional or more favorable rights to terminate the servicer from those rights specified in the related Agency Guide.
(o) Taxes. Each of the Borrower, the Guarantor, and their respective Subsidiaries have duly and timely filed or caused to be duly and timely filed all material federal, state, provincial, territorial, foreign and other tax returns and reports required to be filed under applicable law, and has timely paid all material federal, state, provincial, territorial, foreign and other Taxes levied or imposed upon it or its properties, income or assets otherwise due and
-65-
payable, except those which are being contested in good faith by appropriate actions diligently conducted and for which adequate reserves have been provided in accordance with GAAP. No material tax lien or similar adverse claim has been filed, and no claim is being asserted, with respect to any material amount of such Tax.
(p) Agreements. None of the Borrower, the Guarantor, nor any Subsidiary of the Borrower is a party to any agreement, 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 4.1(h). None of the Borrower, the Guarantor, nor any Subsidiary of the Borrower is in breach or 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 Borrower or the Guarantor. There are no breaches or defaults under the Transaction Documents to which it is a party or the Servicing Contracts. No holder of any indebtedness of the Borrower, the Guarantor, or any of their Subsidiaries has given notice of any asserted default thereunder.
(q) Other Indebtedness. All Indebtedness (other than Indebtedness evidenced by this Agreement) of Borrower and of the Guarantor existing on the Closing Date is as described in Schedule 4.1(q).
(r) No Material Adverse Effect. Since December 31, 2020, there has been no event or circumstance, either individually or in the aggregate, that has had or would reasonably be expected to have a Material Adverse Effect.
(s) Investment Company Act. Neither the Borrower nor the Guarantor is required to register as an “investment company” within the meaning of the 1940 Act. Borrower and Guarantor are relying on Section 3(c)(5)(c) or Section 3(c)(6) as the exemption from the definition of “investment company” of the 1940 Act.
(t) Covered Fund. Neither the Borrower nor the Guarantor is a “covered fund” under Section 13 of the Bank Holding Company Act of 1956, as amended.
(u) Properties; Security Interest. Each of the Borrower and Guarantor has good title to, valid leasehold interests in, or valid licenses to use, all of its properties and assets necessary in the ordinary conduct of its business, including all of the Collateral, and (i) the MSR Collateral is free and clear of Liens other than Permitted MSR Collateral Liens, and (ii) all other Collateral is free and clear of Liens other than Permitted Collateral Liens. Once executed and delivered, this Agreement creates, as security for the Obligations, a valid and enforceable and (coupled with the Account Control Agreement and the taking of all actions required hereunder and thereunder) perfected security interest in and Lien on all of the Collateral, in favor of the Administrative Agent, for the benefit of the Secured Parties, superior to and prior to the rights of all third persons and subject to no other Liens, except that the Collateral may be subject to the Agency Requirements.
(v) Environmental Matters. None of the Borrower, the Guarantor, nor any of their respective facilities or operations are subject to any outstanding written order, consent decree or settlement agreement with any Person relating to any Environmental Law, any Environmental Claim, or any Hazardous Materials activity that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. Neither the Borrower nor the Guarantor has received any letter or request for information under Section 104 of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9604) or any comparable state law. To each of the Borrower’s and the Guarantor’s knowledge, there are and have been no conditions, occurrences, or Hazardous Materials activities which would
-66-
reasonably be expected to form the basis of an Environmental Claim against the Borrower or the Guarantor that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. None of the Borrower, the Guarantor, or to their knowledge, any of their respective predecessors, have filed any notice under any Environmental Law indicating past or present treatment of Hazardous Materials at any Mortgaged Property, and none of the Borrower’s or Guarantor’s operations involves the generation, transportation, treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any state equivalent. Compliance with all current or reasonably foreseeable future requirements pursuant to or under Environmental Laws could not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. To each of the Borrower’s and Guarantor’s knowledge, no event or condition has occurred or is occurring with respect to the Borrower or the Guarantor relating to any Environmental Law, any release of Hazardous Materials or any Hazardous Materials activity which individually or in the aggregate has had, or would reasonably be expected to have, a Material Adverse Effect. No Lien imposed pursuant to any Environmental Law has attached to any Collateral or MSRs and, to the knowledge of the Borrower and the Guarantor, no conditions exist that would reasonably be expected to result in the imposition of such a Lien on any Collateral or MSRs.
(w) OFAC and PATRIOT Act. None of the Borrower, the Guarantor, nor any of their officers, directors or employees appears on the Specially Designated Nationals and Blocked Persons List published by the Office of Foreign Assets Control (“OFAC”) or is otherwise a person with which any U.S. person is prohibited from dealing under the laws of the United States, unless authorized by OFAC. Neither the Borrower nor the Guarantor conducts business or complete transactions with the governments of, or persons within, any country under economic sanctions administered and enforced by OFAC. Neither the Borrower nor the Guarantor will directly or indirectly use the proceeds from this Agreement, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person to fund any activities of or business with any person that, at the time of such funding, is the subject of economic sanctions administered or enforced by OFAC, or is in any country or territory that, at the time of such funding or facilitation, is the subject of economic sanctions administered or enforced by OFAC. Neither the Borrower nor the Guarantor is in violation of Executive Order No. 13224 or the PATRIOT Act.
(x) Foreign Corrupt Practices Act. None of the Borrower, the Guarantor, or any director, officer, agent or employee of the Borrower or Guarantor, has used any of the proceeds of any Advance (i) for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, (ii) to make any direct or indirect unlawful payment to any government official or employee from corporate funds, (iii) to violate any provision of the U.S. Foreign Corrupt Practices Act of 1977 or similar law of a jurisdiction in which the Borrower or Guarantor conducts its business and to which they are lawfully subject or (iv) to make any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
(y) Servicing Contracts. Each Servicing Contract is in full force and effect, and Borrower has not been terminated as the servicer under any Servicing Contract.
(z) Risk Management Policy. The Borrower has duly adopted, in accordance with its internal risk policies, a risk management policy, which is in full force and effect. A copy of such risk management policy has been previously delivered to Administrative Agent (for distribution to Lenders), and certified by a Responsible Officer of the Borrower as being a true and correct copy in full force and effect.
(aa) Agency Approvals; Servicing Facilities. The Borrower has adequate financial standing, servicing facilities, procedures and experienced personnel necessary for the
-67-
sound servicing of mortgage loans of the same types as may from time to time constitute Mortgage Loans and in accordance with Accepted Servicing Practices. The Borrower is approved by each of Xxxxxx Xxx and Xxxxxxx Mac as an approved seller/servicer, approved by Xxxxxx Mae as an approved issuer, and, to the extent necessary, approved by the Secretary of HUD pursuant to Sections 203 and 211 of the National Housing Act, as amended. In each such case, the Borrower is in good standing, with no event having occurred, including a change in insurance coverage which would either make the Borrower unable to comply with the eligibility requirements for maintaining all such applicable approvals or require notification to any Agency or to HUD, FHA or VA. Should the Borrower for any reason cease to possess all such applicable approvals, or should notification to any Agency or to HUD, FHA or VA be required, the Borrower shall immediately notify Administrative Agent immediately in writing.
(bb) Representations Concerning the Collateral. (1) Neither the Borrower nor the Guarantor has assigned, pledged, conveyed, or encumbered any Collateral hereunder to any other Person (except to the extent any such pledge has been released prior to the grant of any security interest thereon hereunder), and immediately prior to the pledge of any such Collateral, the Borrower or the Guarantor, as applicable, was the sole owner of such Collateral and had good and marketable title thereto, free and clear of all Liens other than a first priority Lien in favor of the Administrative Agent.
(i) All information concerning all Collateral set forth on each Schedule of Assets were, are or will be (as applicable) pledged to the Administrative Agent, for the benefit of the Lenders will be complete and correct in all material respects as of the date of such Schedule of Assets.
(ii) Upon the filing of financing statements on Form UCC-1 naming the Administrative Agent as “Secured Party” and the Borrower or the Guarantor (as applicable) as “Debtor”, and describing the Collateral, in the appropriate jurisdictions, the Administrative Agent, for the benefit of the Lenders, will have a duly perfected first priority security interest under the UCC in all right, title, and interest of the Borrower and the Guarantor in, to and under, subject, in all cases, to the Agency Requirements, the Collateral to the extent a security interest therein can be perfected by a UCC filing.
(iii) All filings and other actions necessary to perfect the security interest in the Collateral created under this Agreement under the UCC have been duly made or taken and are in full force and effect. Subject to the Agency Requirements, the Borrower and the Guarantor are the legal and beneficial owners of the Collateral hereunder free and clear of any Lien, other than as permitted by and any rights retained by the Agencies pursuant to the Agency Requirements.
(iv) Subject only to the Agency Requirements, the Borrower and the Guarantor have the full right, power and authority to pledge the Collateral.
ARTICLE V
COVENANTS
COVENANTS
Section 5.1 Affirmative Covenants. Each of the Borrower and the Guarantor covenants and agrees that, until each Loan Note and all other Obligations (other than contingent obligations not then due) hereunder have been paid in full and the Commitments have been terminated:
(a) Financial Covenants.
-68-
(i) Minimum Liquidity. Each of the Borrower and its Subsidiaries and the Guarantor shall ensure that, as of the last day of each calendar month ending after the Closing Date, it has Cash and Cash Equivalents at such time in an amount not less than [***].
(ii) Minimum Adjusted Tangible Net Worth.
(A) The Borrower and its Subsidiaries shall maintain, as of the last day of each calendar month ending after the Closing Date, Adjusted Tangible Net Worth not less than [***].
(B) The Guarantor shall maintain, as of the last day of each calendar month ending after the Closing Date, Adjusted Tangible Net Worth not less than [***].
(iii) Corporate Debt to Tangible Net Worth.
(A) Each of the Borrower and its Subsidiaries shall maintain, as of the last day of each calendar month ending after the Closing Date, a Corporate Debt to Tangible Net Worth Ratio not to exceed [***].
(B) The Guarantor shall maintain, as of the last day of each calendar month ending after the Closing Date, a Corporate Debt to Tangible Net Worth Ratio not to exceed [***].
(b) Reporting Requirements. The Borrower and the Guarantor will furnish to the Administrative Agent for delivery to each Lender:
(i) within (A) 120 days after the close of each fiscal year of the Borrower and the Guarantor, the unqualified audited consolidated balance sheet of the Borrower and of the Guarantor and their consolidated Subsidiaries as of the end of such fiscal year and the related consolidated statements of income, of stockholders’ equity (which shall be on a consolidated basis and there shall be no consolidating statements of stockholders’ equity required hereunder) and of cash flows for such fiscal year (which shall be on a consolidated basis and there shall be no consolidating statements of cash flows required hereunder), in each case, setting forth comparative figures for the preceding fiscal year, prepared in accordance with GAAP prepared by a Nationally Recognized Accounting Firm and (B) forty-five (45) days after the end of each of its fiscal quarters other than the fiscal quarter ending December 31 of each fiscal year, the unaudited consolidated balance sheets and income statements for such fiscal quarter on a year-to-date basis for the Borrower and the Guarantor and their consolidated subsidiaries;
(ii) promptly, copies of any annual financial projections prepared by or on behalf of the Borrower or Guarantor and approved by the board of directors of the Borrower or Guarantor, as applicable; and
(iii) at the time of delivery of the financial statements described pursuant to clause (i), the Borrower and Guarantor shall deliver to the Administrative Agent and each Lender a Compliance Certificate that (w) attaches an updated Schedule of Eligible Assets as of the preceding fiscal quarter or date of such Advance, (x) certifies as to whether a Potential Event of Default or Event of Default has occurred and is continuing, (x) certifies that the representations and warranties set forth in Section 4.1 are true and correct in all material respects on and as of the date of such certification and (y) sets forth reasonably detailed calculations demonstrating compliance with Section 5.1(a); provided
-69-
that, with the consent of the Administrative Agent not to be unreasonably withheld the Borrower may, but shall not be obligated to, deliver to the Administrative Agent updated versions of the Schedule of Assets on a more frequent basis if it chooses to do so.
(c) Acknowledgment Agreements. The Borrower shall make commercially reasonable efforts to enter into the Acknowledgment Agreements with each Agency as soon as possible. Such Acknowledgment Agreements shall be in form and substance reasonably satisfactory to the Lender.
(d) Servicing Contract and Acknowledgment Agreement Amendments. Within five (5) Business Days after a Responsible Officer of the Borrower or the Guarantor becomes aware of an amendment to any Servicing Contract or any Acknowledgment Agreements that could reasonably be expected to materially and adversely affect the Collateral or the Administrative Agent’s interest therein or result in a Material Adverse Effect, to the extent permitted by the applicable Agency, the Borrower shall deliver to the Administrative Agent for delivery to each Lender copies of any such amendments; provided that the Borrower shall cooperate with any requests by the Administrative Agent to deliver copies of each amendment, restatement, supplement or other modification to any Servicing Contract or Acknowledgment Agreement that the Administrative Agent shall reasonably request, to the extent permitted by the applicable Agency.
(e) Change in Responsible Officer. Promptly, but in any event within ten (10) days after there is any change in any of the chief executive officer, chief financial officer, or the head of servicing operations of the Borrower or the Guarantor, the Borrower or the Guarantor, as applicable, shall notify the Administrative Agent thereof.
(f) Notice of Default. Promptly (but in any event within [***] upon a Responsible Officer of the Borrower or of the Guarantor obtaining knowledge (i) of any condition or event that constitutes an Event of Default or that notice has been given to the Borrower or the Guarantor with respect thereto; (ii) of any condition or event that constitutes an “event of default” under any Indebtedness or that notice has been given to any party thereunder with respect thereto; (iii) of the occurrence of any ERISA Event that, either individually or together with any other ERISA Events, could reasonably be expected have a Material Adverse Effect or (iv) of the occurrence of any event or change that has results in or could reasonably be expected to result in a Material Adverse Effect, a certificate of a Responsible Officer specifying the nature and period of existence of such condition, event or change, or specifying the notice given and action taken by any such Person and the nature of such claimed Event of Default, Potential Event of Default, default, event or condition, and what action the Borrower and/or the Guarantor has taken, is taking and proposes to take with respect thereto.
(g) Maintenance of List Assets. Borrower shall at all times maintain a current list (which may be stored in electronic form) of all Assets.
(h) Records. Borrower shall collect and maintain or cause to be collected and maintained all Records relating to the Assets in accordance with industry custom and practice for assets similar to the Assets, including those maintained pursuant to Section 5.1(i), and all such Records shall be in the Borrower’s (or its custodian’s) possession unless otherwise consented to in writing by the Administrative Agent. The Borrower will not allow any such papers, records or files that are an original or an only copy to leave the Borrower’s possession, except for individual items removed in connection with servicing a specific Mortgage Loan, in which event Borrower will obtain or cause to be obtained a bailee letter from a financially responsible person for any such paper, record or file. The Borrower will maintain all such Records in good and complete
-70-
condition in accordance with industry practices for assets similar to the Assets and preserve them against loss.
(i) For so long as the Administrative Agent has an interest in or lien on any Collateral, Borrower will hold or cause to be held all related Records in trust for the Administrative Agent. The Borrower shall notify, or cause to be notified, every other party holding any such Records of the interests and liens in favor of Administrative Agent granted hereby.
(ii) Upon reasonable advance notice from the Administrative Agent, Borrower shall (x) make any and all such Records available to the Administrative Agent to examine any such Records, either by its own officers or employees, or by agents or contractors, or both, and make copies of all or any portion thereof, and (y) permit the Administrative Agent or its authorized agents to discuss the affairs, finances and accounts of the Borrower with its chief operating officer, chief financial officer and the independent certified public accountants of the Borrower.
(i) Books. Borrower and Guarantor shall keep or cause to be kept in reasonable detail books and records of account of its assets and business.
(j) UCC Matters; Protection and Perfection of Security Interests. Each of the Borrower and the Guarantor agree promptly to notify the Administrative Agent in writing of any change (i) in its legal name, (ii) in its identity or type of organization or corporate structure or (iii) in the jurisdiction of its organization, in each case, within ten (10) days of such change. The Borrower and the Guarantor agree that from time to time, at the Borrower’s cost and expense, to promptly execute and deliver all further instruments and documents, and take all further action reasonably required by the Administrative Agent (a) to perfect, protect or more fully evidence the Administrative Agent’s security interest in the Assets acquired by the Borrower or (b) to enable the Administrative Agent to exercise or enforce any of its rights hereunder, under any other Transaction Document. Without limiting the Borrower’s obligation to do so, the Borrower and the Guarantor hereby irrevocably authorize the filing of such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as the Administrative Agent may reasonably require. Each of the Borrower and the Guarantor hereby authorizes the Administrative Agent to file one or more financing or continuation statements, and amendments thereto and assignments thereof, naming the Borrower or the Guarantor as debtor, relative to all or any of the Collateral now existing or hereafter arising without the signature of the Borrower or the Guarantor where permitted by law. A carbon, photographic or other reproduction of this Agreement, or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement.
(k) Access to Certain Documentation and Information Regarding the Assets. The Borrower and Guarantor shall permit the Administrative Agent or its duly authorized representatives or independent contractors, upon reasonable advance notice to the Borrower or Guarantor, as applicable, and subject to all applicable Agency procedures and restrictions, (i) access to documentation that the Borrower or Guarantor may possess regarding the Eligible Assets, (ii) to visit the Borrower or Guarantor, and to discuss its affairs, finances and accounts (as they relate to their respective obligations under this Agreement and the other Transaction Documents) with the Borrower, the Guarantor, their respective officers, and independent accountants (subject to such accountants’ customary policies and procedures) and (iii) to examine the books of account and records of the Borrower and the Guarantor, as they relate to the Assets, to make copies thereof or extracts therefrom, all at such reasonable times and during regular business hours of the Borrower or the Guarantor (as applicable). The Administrative Agent may perform the functions set forth above no more than once per year for each of the
-71-
Borrower and Guarantor, or at any time following a Potential Event of Default or an Event of Default, at the Administrative Agent’s determination, and under any circumstance, at the cost and expense of the Borrower. Such representatives or independent contractors shall use commercially reasonable efforts to avoid interruption of the normal business operations of the Borrower and Guarantor. Notwithstanding anything to the contrary in this Section 5.1(k), (A) the Borrower and Guarantor, will not be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter that (x) constitutes non-financial trade secrets or nonfinancial proprietary information, (y) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by law or any binding confidentiality agreement or (z) is subject to attorney-client or similar privilege or constitutes attorney work product and (B) so long as an Event of Default has not occurred, the Borrower and the Guarantor shall have the opportunity to participate in any discussions with the Borrower’s and the Guarantor’s independent accountants.
(l) Existence and Rights; Compliance with Laws; Agency Approvals. Each of the Borrower and the Guarantor shall (i) preserve and keep in full force and effect its corporate existence, and any material rights, permits, patents, franchises, licenses, approvals and qualifications required for it to conduct its business activities, and (ii) maintain adequate financial standing, servicing facilities, procedures, and experienced personnel necessary for the sound servicing of mortgage loans of the same types as may from time to time constitute Mortgage Loans and in accordance, in all material respects, with Accepted Servicing Practices and the terms of the Servicing Contracts. Each of the Borrower and the Guarantor shall comply with all Applicable Laws except to the extent that the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect. The Borrower shall maintain its status with each Agency as an approved seller/servicer, and shall be in good standing with each Agency in accordance with Applicable Law and all rules, policies, procedures and standards of such Agency (collectively, “Agency Approvals”). The Borrower shall service all Assets in accordance with the Agency Guides in all material respects. Should the Borrower, (A) receive written notice of any default or notice of termination of servicing for cause under a Servicing Contract, or (B) for any reason, cease to possess all such applicable Agency Approvals, or should notification to the relevant Agency or to HUD, FHA or VA as described in Section 4.1(aa) be required, the Borrower shall so notify Administrative Agent in writing within three (3) Business Days. Notwithstanding the preceding sentence, the Borrower shall take all necessary action to maintain all of its applicable Agency Approvals at all times during the term of this Agreement.
(m) Taxes. Each of the Guarantor, the Borrower and its Subsidiaries shall duly and timely file or cause to be duly and timely filed, all material federal, state, provincial, territorial, foreign and other income Tax returns and all other material tax returns required to be filed under Applicable Law, and shall pay when due all Taxes imposed upon it or any of its respective properties or which it is required to withhold and pay over, and provide evidence of such payment to the Administrative Agent if requested; provided that neither the Borrower nor the Guarantor shall be required to pay any such Tax that is being contested in good faith by proper actions diligently conducted if (i) it has maintained adequate reserves with respect thereto in accordance with GAAP and (ii) in the case of a Tax that has or may become a Lien that is not a Lien permitted hereunder against any of the Collateral, such proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such Tax.
(n) Maintenance of Properties. Each of the Borrower and the Guarantor shall ensure that its material properties and equipment used or useful in its business in whosoever’s possession they may be, are kept in reasonably good repair, working order and condition, normal wear and tear and casualty excepted, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.
-72-
(o) Servicing Portfolio. Borrower shall not permit the Portfolio Delinquency Rate with respect to any three-month period for its Xxxxxx Xxx or Xxxxxxx Mac servicing portfolios to exceed [***]. Borrower shall not permit the Portfolio Delinquency Rate with respect to any three-month period for its Xxxxxx Mae servicing portfolios to exceed [***]
(p) Trigger Event Asset Sale. The Borrower shall, within one (1) Business Day notify the Administrative Agent in the event that it has voluntarily relinquished or delivered notice of its intent to sell or transfer Servicing Contract rights constituting more than [***] of the aggregate Servicing Contract rights of the Borrower with respect to any Agency, in any event without the Administrative Agent’s prior express written consent.
(q) Modification of the Servicing Contracts. Unless required by an Agency or to the extent necessary to maintain Agency Approvals pursuant to Section 5.1(l), the Borrower shall not consent with respect to the Servicing Contract related to any Asset to amend, modify, waive any provision of or otherwise change any Servicing Contract or enter into any new Servicing Contract related to any Asset, except any such amendments, modifications, waivers or changes or any such new agreements or arrangements that could not reasonably be expected, individually or in the aggregate, to materially and adversely affect the Collateral or the Administrative Agent’s interest therein or result in a Material Adverse Effect.
(r) No Subservicing. Borrower shall not permit any of the Assets to be subject to any servicing contract or subservicing arrangement, other than as permitted by a Servicing Contract and subject to the prior written consent of Administrative Agent.
(s) Quality Control. Borrower shall maintain an internal quality control program that verifies, on a regular basis, the existence and accuracy of all legal documents, credit documents, property appraisals, and underwriting decisions related to MSRs and Servicing Advance Receivables. Such program shall be capable of evaluating and monitoring the overall quality of the Borrower’s servicing activities. Such program shall guard against (i) dishonest, fraudulent, or negligent acts; and (ii) errors and omissions by officers, employees, or other authorized persons.
(t) Insurance. The Borrower and the Guarantor shall maintain or cause to be maintained, at its own expense, insurance coverage as is customary, reasonable and prudent in light of the size and nature of the Borrower’s and Guarantor’s business as of any date after the Closing Date. Each of the Borrower and the Guarantor shall be deemed to have complied with this provision if one of its Affiliates has such policy coverage and, by the terms of any such policies, the coverage afforded thereunder extends to the Borrower or the Guarantor, as applicable. Upon the request of the Administrative Agent at any time subsequent to the Closing Date, the Borrower and the Guarantor shall cause to be delivered to the Administrative Agent, a certification evidencing the Borrower’s and the Guarantor’s coverage under any such policies.
(u) [***]
(v) Monthly Report. No later than the thirtieth (30th) day of each calendar month or, if such thirtieth (30th) day is not a Business Day, the next succeeding Business Day, Borrower shall deliver to the Administrative Agent (and at the request of Xxxxxx Xxx, to Xxxxxx Xxx) a report substantially in the form set forth on Exhibit F attached hereto (the “Monthly Report”) which shall contain:
(i) a detailed accounting of Collections for the immediately preceding Collection Period, as applicable;
-73-
(ii) the number of Mortgage Loans contained in each Portfolio subject to this Agreement as of the last date of the calendar month preceding the delivery of such Monthly Report;
(iii) the unpaid principal balance of all Portfolios serviced by the Borrower;
(iv) the payments made with respect to each Portfolio and, upon request from the Administrative Agent, the Mortgage Loans contained therein, shown as a change in their unpaid principal balance;
(v) the payoff with respect to the existing Portfolios serviced by the Borrower and, upon request from the Administrative Agent, the Mortgage Loans contained therein, shown as a change in their unpaid principal balance;
(vi) the number of Mortgage Loans contained in each Portfolio that have been added or paid off, including their paid off principal balance;
(vii) a detailed calculation of the Financial Covenants, and accompanying Compliance Certificate;
(viii) copies of all internal and external valuations of the Borrower’s Xxxxxx Mae MSRs, Xxxxxxx Mac MSRs, and Xxxxxx Mae MSRs since delivery of the prior Monthly Report; for the avoidance of doubt, this includes the results of all third-party valuation reports prepared by or on behalf of the Borrower upon which any internal valuations of the Borrower’s Xxxxxx Xxx MSRs, Xxxxxxx Mac MSRs, and Xxxxxx Mae MSRs were made;
(ix) compliance with the Events of Default hereunder as of the last day of the immediately preceding month; and
(x) if an Event of Default exists, a copy of the most recently received monthly account statement relating to the Collection Account.
With respect to Section 5.1(v)(vii), Section 5.1(v)(viii) such financial calculation shall be based on the Borrower’s most recently available unaudited monthly financial statements, which shall be as of the end of the last day of the second immediately preceding month. Notwithstanding the foregoing, the Monthly Report provided to an Agency shall be based upon, and shall include information only with respect to Mortgage Loans included in the applicable Portfolio subject to the Servicing Contract with such Agency, except that the portions of such report referred to in clauses (ii) and (iv) above shall apply to all Mortgage Loans included in any portfolio.
Section 5.2 Negative Covenants. Each of the Borrower and the Guarantor covenants and agrees that, until each Loan Note and all other Obligations (other than contingent obligations not then due) hereunder have been paid in full and the Commitments have been terminated, the Borrower and the Guarantor will not:
(a) Sales, Liens, Etc. Except as permitted hereunder, sell, assign (by operation of law or otherwise) or otherwise Dispose of, or create or suffer to exist any Lien upon or with respect to, the Collateral; provided that notwithstanding anything to the contrary herein, this Section 5.2(a) shall not prohibit (i) (x) any Lien on MSR Collateral that constitutes a Permitted MSR Collateral Lien, or (y) any Lien on any other Collateral that constitutes a
-74-
Permitted Collateral Lien, (ii) any sale, assignment or disposition that is not expressly restricted pursuant to the terms hereof, or (iii) any Permitted Disposition.
(b) Additional Indebtedness. Neither the Borrower nor the Guarantor shall enter into any Indebtedness other than Permitted Indebtedness.
(c) Dividends, Etc. Make, directly or indirectly, declare or pay any dividends or make any other payment or distribution (in cash, property, or obligations) on account of the Borrower’s or the Guarantor’s Equity Interests, or redeem, purchase, retire, or otherwise acquire any of its Equity Interests, or set apart any money for a sinking or other analogous fund for any dividend or other distribution on its Equity Interests or for any redemption, purchase, retirement, or other acquisition of any of its Equity Interests, or undertake any new obligation (contingent or otherwise) to do any of the foregoing if any Potential Event of Default or Event of Default exists or will exist after giving effect thereto.
(d) Prohibition of Fundamental Changes. (i) Merge or consolidate or amalgamate, or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution) unless (x) such merger, consolidation or amalgamation does not result in a Change of Control or (y) the Borrower or the Guarantor (as applicable) is the sole surviving entity of such merger, consolidation or amalgamation, (ii) enter into (or agree to enter into) any Division Transaction or (iii) sell all or substantially all of its assets.
(e) Material Change in Business. Make any material change in the nature of its business as carried on at the Closing Date and business activities that are reasonably related, ancillary or complementary thereto or reasonable developments or extensions thereof or in connection with the Asset Management Strategy.
(f) Change in Organizational Documents. Amend, modify or otherwise change any of its organizational documents in any material respect, except any such amendments, modifications or changes or any such new agreements or arrangements that could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; provided that, the Borrower and the Guarantor shall deliver written notice to the Administrative Agent within thirty (30) days of any material amendment to its organizational documents.
(g) Transactions with Affiliates. Enter into, or be a party to, any transaction with any of its Affiliates, except (i) the transactions contemplated by the Transaction Documents, (ii) any other transactions (including the lease of office space or computer equipment or software by the Borrower or the Guarantor from an Affiliate and the sharing of employees and employee resources and benefits) (a) in the ordinary course of business or as otherwise permitted hereunder, (b) pursuant to the reasonable requirements and purposes of the Borrower’s business or the Guarantor’s business, as applicable, (c) upon fair and reasonable terms (and, to the extent material, pursuant to written agreements) that are consistent with market terms for any such transaction and (d) permitted by Sections 5.2(a), (c), (d) or (e), (iii) employment and severance arrangements and health, disability and similar insurance or benefit plans between the Borrower or the Guarantor and their respective directors, officers, employees in the ordinary course of business, (iv) transactions pursuant to the Asset Management Strategy and (v) the payment of customary fees and reasonable out of pocket costs to, and indemnities provided on behalf of, directors, managers, consultants, officers and employees of the Borrower or the Guarantor to the extent attributable to the ownership or operation of the Borrower or the Guarantor.
(h) Sale and Lease-Backs. Enter into any arrangement, directly or indirectly, with any Person whereby the Borrower or the Guarantor shall sell or transfer any property used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease
-75-
such property or other property that it intends to use for substantially the same purpose or purposes as the property being sold or transferred if any Potential Event of Default or Event of Default exists or will exist after giving effect thereto (including that no Borrowing Base Deficiency or Funding Base Deficiency shall have occurred and be continuing at such time).
(i) Amendments to Transaction Documents. Amend, modify, supplement or otherwise change, waive or grant any consent in respect of any of the terms or provisions of any Transaction Document other than amendments, modifications, supplements or other changes made in accordance with the terms of the applicable Transaction Document.
(j) Fiscal Year. Change its fiscal year-end from December 31 or change its method of determining fiscal quarters.
(k) Collection Account. (i) Close the Collection Account, (ii) permit (x) any property that is not Collateral to be deposited in the Collection Account or (y) any Collateral (other than the Base Servicing Fee) to be deposited into an account other than the Collection Account, free and clear of all Xxxxxx Xxx rights and other restrictions on transfer under applicable Xxxxxx Mae guidelines, or (iii) following (x) delivery of an Activation Notice by the Administrative Agent, or (y) the occurrence and during the continuation of an Event of Default, withdraw funds from the Collection Account for any purpose without the Administrative Agent’s consent.
(l) Assignment. Except as expressly permitted herein and in the Transaction Documents, sell, assign, transfer or otherwise dispose of, or grant any option with respect to, or pledge, hypothecate or grant a security interest in or lien on or otherwise encumber (except as otherwise permitted by this Agreement and the other Transaction Documents), any of the Assets or any interest therein, provided, that the Borrower may encumber, sell, transfer or otherwise dispose of any MSRs or other Assets which have been released from the Collateral. Notwithstanding the foregoing, but subject to Section 2.10, (A) (i) the Borrower shall have the right to sell, assign or otherwise transfer to any Person any and all Mortgage Loans on a “servicing-released” basis, (ii) the servicing rights related thereto shall not be MSRs, and (iii) the servicing and other rights related thereto shall in no event be included as Collateral or in a Portfolio or be subject to the Liens of the Administrative Agent, and (B) the Borrower shall have the right to sell, assign or otherwise transfer to any Person the servicing rights related to any and all Mortgage Loans (and the servicing rights thereto shall not be MSRs and shall in no event be included as Collateral or be subject to the Liens of the Administrative Agent), to the extent such transaction is a voluntary partial cancellation of the applicable Servicing Contract pertaining to delinquent Mortgage Loans (including but not limited to in accordance with the terms and provisions of any VPC Agreement).
(m) Investments. None of the Borrower, the Guarantor, or their respective Subsidiaries shall enter into any new Investments in the event that a Borrowing Base Deficiency has occurred and is continuing or would occur after giving effect to any new Investment.
ARTICLE VI
EVENTS OF DEFAULT
EVENTS OF DEFAULT
Section 6.1 Events of Default. The occurrence of any of the following specified events shall constitute an event of default under this Agreement (each, an “Event of Default”):
(a) Non-Payment. The Borrower or the Guarantor shall fail to (i) make any payment required pursuant to Section 2.9(a) beyond the applicable dates on which such payment
-76-
is due (after giving effect to any grace or cure period set forth in Section 2.9), (ii) make any required payment of principal when due hereunder and such failure remains unremedied for a period of [***] after the earlier of (a) written notice of such failure shall have been given to the Borrower or the Guarantor by the Administrative Agent or any Lender or (b) the date upon which a Responsible Officer of the Borrower or the Guarantor obtained knowledge of such failure, (iii) make any required payment of any interest or Non-Usage Fee or Minimum Utilization Fee when due and such failure remains unremedied for a period [***] after the earlier of (a) written notice of such failure shall have been given to the Borrower or the Guarantor by the Administrative Agent or any Lender or (b) the date upon which a Responsible Officer of the Borrower or the Guarantor obtained knowledge of such failure, or (iv) make any required payment of any other fee or other amount payable hereunder or under any other Transaction Document when due and such failure remains unremedied for a period of [***] after the earlier of (a) written notice of such failure shall have been given to the Borrower or the Guarantor by the Administrative Agent or any Lender or (b) the date upon which a Responsible Officer of the Borrower or the Guarantor obtained knowledge of such failure.
(b) Representations. Any representation or warranty made or deemed made by any of the Borrower or Guarantor herein or in any other Transaction Document (after giving effect to any qualification as to materiality set forth therein, if any) shall prove to have been false and misleading when made or any Monthly Report or Compliance Certificate delivered hereunder shall prove to have been false and misleading in any material respect when made (other than the representations and warranties set forth in Section 4.1(bb) which shall be considered solely for the purpose of determining the Administrative Agent Asset Value of the Eligible Assets, unless the Borrower or the Guarantor shall have made any such representations and warranties with knowledge that they were materially false or misleading at the time made).
(c) Covenants. (i) The Borrower or the Guarantor shall fail to perform or observe the Financial Covenants (subject to Section 6.3) or any negative covenant under Section 5.2, (ii) the Borrower or the Guarantor shall fail to perform or observe the covenants set forth in Sections 5.1(b), (d)-(f), (j), (l) (solely with respect to any notice requirements therein), (p), or (v), and such failure shall continue unremedied for [***] after the earlier of (A) a written notice of such failure shall have been given to the Borrower or the Guarantor by the Administrative Agent or any Lender or (B) the date upon which a Responsible Officer of the Borrower or Guarantor obtained knowledge of such failure (and giving effect to any grace or other cure periods set forth therein), or (iii) except as set forth in clauses (i) and (ii) hereof, the Borrower or the Guarantor shall fail to perform or observe any other term, covenant or agreement contained in this Agreement or in any other Transaction Document, and, such failure shall continue unremedied for [***] after the earlier of (A) a written notice of such failure shall have been given to the Borrower or the Guarantor by the Administrative Agent or any Lender or (B) the date upon which a Responsible Officer of the Borrower or Guarantor obtained knowledge of such failure.
(d) Insolvency Event. An Insolvency Event shall have occurred with respect to the Borrower or the Guarantor.
(e) Security Interest. The Administrative Agent, for the benefit of the Lenders, ceases to have a first priority perfected security interest in any portion of the Collateral.
(f) Judgments. There shall remain in force, undischarged (or provisions shall not be made for such discharge), unsatisfied, unbonded and unstayed for more than [***], or, if a stay of execution is procured, thirty (30) days from the date such stay is lifted, any final non-appealable monetary judgment against the Borrower or the Guarantor in excess of [***] over and above the amount of insurance coverage available from a financially sound insurer that has not denied coverage.