1
EXHIBIT 10(k)
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
dated as of November 12, 1996
by and among
SOURCE ONE MORTGAGE SERVICES CORPORATION
and
THE MORTGAGE AUTHORITY, INC.
and
CENTRAL PACIFIC MORTGAGE COMPANY
and
THE FIRST NATIONAL BANK OF CHICAGO,
individually and as Administrative Agent
and
CERTAIN OTHER LENDERS
2
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RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
1.3 Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE II
BORROWINGS . . . . . . . . . . . . . . . . . . . . . . 28
2.1 Availability and Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.2 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.3 Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.4 Discount Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.5 Swingline Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.6 Bid Loans and Approved GNMA Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.7 Rate after Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.8 Interest Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.9 Method of Selecting Rate Options and Interest Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.10 Maximum Number of Eurodollar Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.11 Funding Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.12 Conversion and Continuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.13 Optional Principal Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.14 Required Principal Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.15 Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.16 Notes; Telephonic Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.17 General Provisions as to Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.18 Notification of Advances, Interest Rates and Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
2.19 Lending Installations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
2.20 Non-Receipt of Funds by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE III
CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . . . . . . 45
3.1 Yield Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.2 Availability of Rate Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
3.3 Funding Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.4 Lender Statements; Survival of Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.5 Lender Tax Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE IV
COLLATERAL AND BORROWING BASE . . . . . . . . . . . . . . . . . . 49
4.1 Eligible Collateral - Pledged Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.2 Eligible Collateral - Repurchased Agency Loans and Receivables . . . . . . . . . . . . . . . . . . . . . . . . 51
4.3 Eligible Collateral - Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.4 Eligible Collateral - Pledged Servicing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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4.5 Eligible Collateral - Servicing Sale Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.6 Borrowing Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.7 Special Representations as to Pledged Warehouse Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . 58
4.8 Special Representations as to Pledged Servicing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
4.9 Special Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
4.10 Release of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
4.11 Settlement Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
4.12 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
4.13 Abatement of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
4.14 Transition from Original Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE V
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . 68
5.1 Initial Advance (Company and Borrowing Subsidiaries) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
5.2 Initial Advance (Lenders) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
5.3 All Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
ARTICLE VI
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . 71
6.1 Organization, Corporate Powers, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
6.2 Corporate Authority, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
6.3 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.4 Government Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.5 Valid and Binding Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.6 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
6.8 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
6.9 Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
6.10 Accuracy of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
6.11 Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
6.12 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
6.13 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
6.14 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
6.15 GNMA, FHA, VA, FNMA, AND FHLMC Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
6.16 No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
ARTICLE VII
AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . 75
7.1 Payment of Debts, Taxes, Etc.; Maintenance of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
7.2 Preservation of Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
7.3 Compliance with Laws, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
7.4 Requested Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
7.5 Keeping of Records and Books of Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
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7.6 Maintenance of Approvals, Filings and Registrations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
7.7 Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
7.8 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
7.9 Maintenance of Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
7.10 Federal Agency Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
7.11 Approved Investor Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
7.12 Borrowing Base Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
7.13 Further Assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
7.14 Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
7.15 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
ARTICLE VIII
NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . 85
8.1 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
8.2 Compliance with Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
8.3 Mergers; Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
8.4 Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
8.5 Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
8.6 Ratably Secured Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
8.7 Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
8.8 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
8.9 Leverage Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
8.10 Recourse Servicing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
8.11 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
8.12 Credit Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
8.13 Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
8.14 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
8.15 FHA and other Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
8.16 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
8.17 Borrowing Subsidiary Liabilities and Secured Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
8.18 Funding of Borrowing Subsidiary Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
8.19 Subordinated Debt Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
8.20 Minimum Cash Flow Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
ARTICLE IX
THE AGENT . . . . . . . . . . . . . . . . . . . . . . 97
9.1 Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
9.2 Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
9.3 Action by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
9.4 Consultation with Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
9.5 Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
9.6 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
9.7 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
9.8 Resignation or Removal and Appointment of Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . 100
9.9 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
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9.10 Release of Collateral Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
9.11 Knowledge of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
9.12 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
ARTICLE X
DEFAULTS . . . . . . . . . . . . . . . . . . . . . . 101
10.1 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
10.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
10.3 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
10.4 Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
10.5 Letter of Credit Collateral Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
ARTICLE XI
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS . . . . . . . . . . . . 108
11.1 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
11.2 Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
11.3 Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
11.4 Dissemination of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
11.5 Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
ARTICLE XII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 112
12.1 Immediately Available Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
12.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
12.3 Survival and Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
12.4 Fees and Expenses of the Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
12.5 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
12.6 Modification of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
12.7 Non-Waiver of Rights by the Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
12.8 Dealings with the Company and its Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
12.9 Changes in GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
12.10 Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 115
12.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 116
12.12 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 116
12.13 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 116
12.14 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 117
12.15 Limitation on Recourse to Borrowing Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 117
12.16 Consent of Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 117
12.17 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 118
SCHEDULE 1 APPLICABLE MARGIN
SCHEDULE 2 FEE RATES
EXHIBIT A LIST OF APPROVED INVESTORS
EXHIBIT B BORROWING BASE CERTIFICATE
EXHIBIT C COMMITMENTS AND COMMITMENT PERCENTAGES
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EXHIBIT D FORM OF SECURITY AGREEMENT
EXHIBIT E-1 FORM OF NOTE
EXHIBIT E-2 FORM OF DISCOUNT NOTE
EXHIBIT F METHOD OF DETERMINING WEIGHTED AVERAGE
PURCHASE PRICES
EXHIBIT G FORM OF BID LOAN NOTICE
EXHIBIT H FORM OF NEW/MODIFIED COMMITMENT SUPPLEMENT
EXHIBIT I FORM OF NON-LENDER BALANCE BANK SUPPLEMENT
EXHIBIT J FORM OF AP NOTICE
EXHIBIT K FORM OF OPINION LETTER
EXHIBIT L MATERIAL LITIGATION NOT REFERENCED IN
ANNUAL/QUARTERLY REPORTS
EXHIBIT M FORM OF FUNDING AGREEMENT
EXHIBIT N FORM OF TRANSITION MEMORANDUM
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7
SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is dated as
of November 12, 1996 by and among SOURCE ONE MORTGAGE SERVICES CORPORATION, a
Delaware corporation (the "Company"), THE MORTGAGE AUTHORITY, INC., a Delaware
corporation ("TMA"), CENTRAL PACIFIC MORTGAGE COMPANY, a California corporation
("CPM"), the lenders identified on the signature pages hereof, and THE FIRST
NATIONAL BANK OF CHICAGO, a national banking association ("First Chicago"),
individually as a Lender and as administrative agent for the Lenders.
RECITALS
This Second Amended and Restated Revolving Credit Agreement
consolidates, amends and restates in its entirety that certain Amended and
Restated Revolving Credit Agreement dated as of March 24, 1995 by and among the
Company, TMA, First Chicago and certain other lenders, as amended by that
certain First Amendment to Amended and Restated Revolving Credit Agreement
dated as of September 27, 1995 (as so amended, the "Original Facility").
The revolving credit facility made available to the Company and the
Borrowing Subsidiaries pursuant to this Agreement shall be used (i) for
originating, acquiring, and/or holding residential mortgage loans, mortgage
backed securities, and mortgage servicing rights, (ii) as liquidity backup for
the Company's commercial paper program, and (iii) for general working capital
and corporate purposes. The Company will request Advances hereunder for the
purposes set forth in the preceding sentence, and the Company will distribute
the proceeds of some of the Advances to one or more Borrowing Subsidiaries for
purposes of mortgage loan originations by such Borrowing Subsidiaries. In
addition, up to $1,000,000 of Swingline Advances may be requested directly by
TMA, and up to $10,000,000 of Swingline Advances may be requested directly by
CPM, in each case to the extent available, subject to all of the terms and
conditions contained herein. Accordingly, the Borrowing Subsidiaries shall be
co-makers (with the Company) of the Notes executed in connection herewith and
shall pledge certain of the Collateral securing the Loans made pursuant to this
Agreement.
In consideration of the foregoing and for other good and valuable
consideration, the parties hereto agree as follows:
8
ARTICLE I
DEFINITIONS
1.1 Definitions.
Capitalized terms used in this Agreement shall have the
following meanings:
Acknowledgment Agreements: means, as of any date, acknowledgment
agreements executed by the Collateral Agent, the Company and FNMA, FHLMC and
any other Federal Agency which is a party to any Servicing Agreement included
in Collateral hereunder and which is then issuing such agreements in the form
required by such Federal Agency, recognizing and consenting to the security
interest created under the Security Agreement.
Additional Required Mortgage Documents: means the instruments and
documents described in Schedule B to the Security Agreement.
Adjusted Consolidated Tangible Net Worth: means, as of any date of
determination thereof, the net worth of the Company and its consolidated
Subsidiaries on a consolidated basis as determined in accordance with GAAP;
less the sum (without duplication) of (a) any assets of the Company and its
consolidated Subsidiaries which would be treated as intangibles under GAAP
including, without limitation, any write-up of assets, good-will, research and
development costs, trade-marks, trade names, copyrights, patents and
unamortized debt discount and expenses, and (b) loans or other extensions of
credit to officers of the Company or of any of its consolidated Subsidiaries
other than Mortgage Loans made to such Persons in the ordinary course of
business; plus one percent (1%) of the then-current aggregate outstanding
principal balance of all Mortgage Loans then being serviced by the Company
either for its own account with respect to Pledged Items or for others under
Servicing Agreements (excluding Subservicing Agreements) to the extent the
servicing rights relating to such Mortgage Loans have not been capitalized and
are thus not accounted for in the Company's net worth as computed in accordance
with GAAP.
Adjusted Commitment Percentage: means, for each Lender as of any date,
the quotient of (i) such Lender's General Commitment divided by (ii) the
Aggregate Commitment minus the Swingline Commitment, which Adjusted Commitment
Percentage shall initially be as set forth on Exhibit C for each Lender.
Advance: means a borrowing hereunder consisting of the aggregate amount
of Loans made to the Company or any Borrowing
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Subsidiary by one or more of the Lenders hereunder pursuant to Article II on
any given Advance Date.
Advance Date: means a date on which an Advance is made hereunder.
Advance Notice: is defined in Section 2.9.
Affiliate: means, as to any Person, any other Person directly or
indirectly Controlling, Controlled by or under direct or indirect common
Control with such Person.
Agent: means The First National Bank of Chicago in its capacity as
administrative agent for the Lenders hereunder, and any successor Agent
appointed pursuant to Article IX.
Aggregate Borrowing Base: is defined in Section 4.6.
Aggregate Commitment: means, as of any date, the aggregate of the
Lenders' then-current General Commitments and Swingline Commitments.
Agreement: means this Second Amended and Restated Revolving Credit
Agreement, as the same from time to time may be extended, amended,
supplemented, waived or modified.
Alternate Base Rate: means, on any day, a fluctuating rate of interest
per annum equal to the higher of (a) the Published Federal Funds Effective Rate
for such day plus the Applicable Margin, and (b) the Corporate Base Rate for
such day.
Alternate Base Rate Advance: means an Advance which bears interest at
the Alternate Base Rate.
Alternate Base Rate Loan: means a Loan which bears interest at the
Alternate Base Rate.
AP Mortgage: means, on any date, any Pledged Mortgage which has been
identified in an AP Notice and for which the Collateral Agent has not received
the Required Mortgage Documents by such date.
AP Notice: means a written pledge substantially in the form of Exhibit
J to this Agreement executed by the Company or a Borrowing Subsidiary and
delivered by facsimile to the Collateral Agent, specifically identifying all
Mortgage Loans with respect to which the Required Mortgage Documents are not
being delivered on or before the Pledge Date of such Mortgage Loan.
Applicable Margin: means, with respect to each Rate Option as of any
date, the applicable percentage per annum as set forth on Schedule 1 attached
hereto which is in effect on such date,
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changing as and when the Company's then-current unsecured long-term debt rating
by either S & P or Xxxxx'x changes as described therein.
Approved GNMA Letter of Credit: means a letter of credit issued by an
Issuing Lender in favor of GNMA as a result of the failure by the Company or
any Borrowing Subsidiary to satisfy all document submission requirements of
GNMA in connection with the certification or re- certification by GNMA of a
pool of Mortgage Loans, which letter of credit (and related reimbursement
agreement and other documentation) has been approved by the Agent pursuant to
Section 2.6(b).
Approved GNMA Letter of Credit Obligations: means, as of any date, all
liabilities, whether actual or contingent, as of such date of the Company and
the Borrowing Subsidiaries with respect to Approved GNMA Letters of Credit,
including, without limitation, the undrawn face amount of the then outstanding
Approved GNMA Letters of Credit and the sum of all drawn amounts for which the
Issuing Lenders have not yet been reimbursed.
Approved Investor: means, as of any time, any of the institutions
listed on Exhibit A attached hereto and any other institution approved by the
Agent, provided that any such institutions listed on Exhibit A or previously
approved by the Agent may be eliminated as an Approved Investor by notice to
the Company from the Agent.
Approved Investor Commitment: means a commitment issued by an Approved
Investor to purchase Mortgage Loans, to exchange Securities for Mortgage Loans
or to purchase Securities.
Approved MBS Custodian: is defined in Paragraph 7(b)(2)(iii) of the
Security Agreement.
Assignment: means a duly executed assignment for the benefit of the
Secured Parties of a Mortgage, of the indebtedness secured thereby, and of all
documents and rights related to the related Mortgage Loan secured by such
Mortgage in accordance with the requirements of the Security Agreement.
Authorized Officer: means, with respect to the Company or a Borrowing
Subsidiary, the president, chairman, chief financial officer, or other officer
of the Company or the Borrowing Subsidiary, as applicable, authorized in
writing to execute any particular statement, certificate or agreement on behalf
of the Company or the Borrowing Subsidiary.
Bailee Letter: means a Bailee Letter substantially in the form of
Exhibit 4 to the Security Agreement.
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Balance Bank: means any Lender or Non-Lender Balance Bank which makes a
Discount Advance.
Balance Bank Agreement: means (i) an agreement between each Balance Bank
and the Company which sets forth the fees, charges and other matters governing
Discount Loans requested from such Balance Bank in accordance with Section 2.4
herein, or (ii) an agreement between the Company and the Swingline Lender which
sets forth the fees, charges and other matters governing Swingline Buydown
Advances requested from the Swingline Lender in accordance with Section 2.5(b).
Bid Lender: is defined in Section 2.6(a).
Bid Loan: is defined in Section 2.6(a).
Bid Loan Notice: means, with respect to each Bid Loan, a notice
executed by the Company and the Bid Lender for such Bid Loan and delivered to
the Agent in the form of Exhibit G hereto.
Bid Rate: means the interest rate applicable to a Bid Loan which is to
be agreed upon by the Company and a Bid Lender and communicated to the Agent in
the Bid Loan Notice for such Bid Loan.
Borrowing Base Certificate: means a certificate executed by the Chief
Financial Officer or Treasurer of the Company or other employees of the Company
so authorized in writing, an original of which shall be delivered to the Agent,
by such Chief Financial Officer or Treasurer in substantially the form attached
hereto as Exhibit B.
Borrowing Base Sublimits: is defined in Section 4.6.
Borrowing Subsidiary: means either of The Mortgage Authority, Inc. or
Central Pacific Mortgage Company, each a wholly owned Subsidiary of the Company
in the business of originating, purchasing and selling Mortgage Loans.
Business Day: means (i) with respect to any borrowing, payment or rate
selection regarding a Eurodollar Advance or a Discount Advance, a day (other
than a Saturday or Sunday) on which banks are open for business in Chicago, Los
Angeles and New York and on which dealings in United States dollars are carried
on in the London interbank market and (ii) for all other purposes, a day (other
than a Saturday or Sunday) on which banks are open for business in Chicago, Los
Angeles, New York and Louisville, Kentucky.
Capital Securities: means liquid and readily marketable securities
contributed to the capital of the Company after the date hereof and investments
acquired with the income therefrom or
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the proceeds from any disposition thereof in the form of cash or Cash
Equivalents or liquid and marketable securities listed on the New York Stock
Exchange, the American Stock Exchange or NASDAQ to the extent such investments
are held in a separate trust, custodial or investment account and income
therefrom is accounted for separately as investment income and not consolidated
as income from operations.
Cash Equivalents: means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof, (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 maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having the highest rating obtainable
from either S&P or Xxxxx'x, (iii) commercial paper maturing no more than 90
days from the date of creation thereof and, at the time of acquisition, having
the highest rating obtainable from either S&P or Xxxxx'x, (iv) certificates of
deposit or bankers' acceptances maturing within one year from the date of
acquisition thereof issued by commercial banks organized under the laws of the
United States or any state thereof or the District of Columbia, each having
combined capital and surplus of not less than $500,000,000, and (v) reverse
repurchase obligations having terms not exceeding seven days entered into with
any financial institution meeting the qualifications specified in clause (iv)
above or with any securities dealer approved by the Agent, provided that there
is an investment agreement in effect pursuant to which the underlying
securities are held by a sub-agent for the Collateral Agent and all cash
proceeds are payable directly to the Settlement Account.
Change in Control: means the acquisition by any Person, or two or more
Persons (other than the Parent) acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of outstanding shares of voting
stock of the Company at any time if after giving effect to such acquisition (i)
such Person or Persons owns twenty percent (20%) or more of such outstanding
voting stock, and (ii) the Parent does not own more than fifty percent (50%) of
such outstanding shares of voting stock.
Code: means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
Collateral: means all right, title and interest of the Company or the
Borrowing Subsidiaries, as applicable, of every kind and nature, in and to all
of the following property, assets
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and rights of the Company or the Borrowing Subsidiaries wherever located,
whether now existing or hereafter arising, and whether now or hereafter owned,
acquired by or accruing or owing to the Company or any Borrowing Subsidiary,
and all proceeds and products thereof:
(i) all Pledged Mortgages;
(ii) all Pledged Securities;
(iii) any commitments or other agreements issued by any
private mortgage insurer or by the FHA or VA to insure or guarantee any
Pledged Mortgage;
(iv) all commitments of FNMA, FHLMC or other Persons to
purchase Pledged Items from the Company or any Borrowing Subsidiary or
exchange Securities with the Company or any Borrowing Subsidiary for
Pledged Items;
(v) any options to sell or purchase Securities, future
contracts, or any other interest rate protection products which directly
or indirectly protect the Company or any Borrowing Subsidiary against
reductions in value of such Pledged Items due to changes in mortgage
interest rates;
(vi) the Settlement Account and any Custodian Settlement
Accounts and any amounts standing to the credit of the Settlement
Account and any Custodian Settlement Accounts then in existence with
Approved MBS Custodians, as described in Paragraph 7(c) of the Security
Agreement;
(vii) all VA Mortgage Loans or FHA Mortgage Loans (plus any
REO or accounts receivable from FHA or VA resulting therefrom, including
guaranty claims against VA and insurance claims against FHA or HUD)
which are repurchased by the Company from Security holders and pledged
to the Collateral Agent as security for the Secured Debt;
(viii) Pledged Servicing;
(ix) Pledged Servicing Sale Receivables;
(x) cash and Cash Equivalents held by the Agent or Collateral
Agent as security for the Secured Debt; and
(xi) all property and proceeds related to the foregoing,
including without limitation, the right to service Pledged Mortgages
while owned by the Company or any Borrowing Subsidiary, all accounts and
general intangibles of whatsoever kind so related and all documents or
instruments delivered to the Agent or the Collateral Agent in respect of
any Pledged Item, including, without limitation, the right to
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receive all insurance proceeds and condemnation awards which may be
payable in respect of the premises encumbered by any Pledged Mortgage.
Collateral Agent: means National City Bank of Kentucky or its
successor, as Collateral Agent under the Security Agreement.
Collateral Agent Review Procedure: means the required review steps set
forth in Exhibit 1 to the Security Agreement.
Collateral Transmittal: means a transmittal from the Pledgor to the
Collateral Agent in electronic form and, if required by the Collateral Agent,
written form of the following information for the following submissions or
special treatment of different types of Collateral: (i) the information
described on Exhibit 7 to the Security Agreement for each AP Mortgage covered
by any AP Notice, (ii) the information described on Exhibit 7 to the Security
Agreement (other than the "AP Code") for each Pledged Mortgage not covered by
an AP Notice, or (iii) such information as may be required from time to time by
the Collateral Agent for the different types of Securities for any Pledged
Security.
Commitment: means either a General Commitment or a Swingline
Commitment.
Commitment Percentage: means, for each Lender as of any date, the
quotient of (i) the sum of such Lender's General Commitment and its Swingline
Commitment (if any), divided by (ii) the Aggregate Commitment, which Commitment
Percentage shall initially be as set forth on Exhibit C for each Lender.
Company: means Source One Mortgage Services Corporation, a Delaware
corporation.
Company Trust Receipt: means a trust receipt substantially in the form
of Exhibit 2 to the Security Agreement.
Conforming Mortgage Loan: means a Residential Mortgage Loan that meets
all applicable requirements for sale to FNMA or FHLMC or for guaranty by GNMA.
Consolidated Interest and Dividend Expense: means, for any period, the
sum of all "interest expense" (as reported on the Company's consolidated
financial statements) for such period (i) plus all interest credited to the
Company on escrow balances, (ii) minus amounts paid by the Company to Security
holders or mortgage pool investors for Mortgage Loan interest which is not
collected by the Company from the borrower of a Mortgage Loan due to early
payoff of such Mortgage Loan, (iii) plus all dividends paid on common or
preferred stock of the Company during such period other than dividends paid
pursuant to and in compliance with Section 8.16(b)(ii) below.
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Consolidated Operating Cash Flow: means, for any period, (i) the sum of
the following items for the Company and its consolidated Subsidiaries for such
period (with terms in quotes having the meanings given such terms in the
Company's consolidated financial statements): "net income", "amortization of
capitalized servicing" (including impairment expense), net losses on interest
rate contracts and other similar hedging instruments, "provision for loan
losses", "depreciation and amortization of good will", the increase in deferred
(but not current) taxes, Consolidated Interest and Dividend Expense, and other
non-cash losses or deductions included in the computation of net income; minus
(ii) the sum of the following items for the Company and its consolidated
Subsidiaries for such period (with terms in quotes having the meanings given
such terms in the Company's consolidated financial statements): "capitalized
excess servicing income", "originated mortgage servicing rights income", "gains
on the sale of servicing", net gains on interest rate contracts and other
similar hedging instruments, "amortization of deferred gain on sale of
servicing", the decrease in deferred (but not current) taxes, and other
non-cash gains included in the computation of "net income".
Control: means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of another entity,
whether through the ownership of voting securities, by contract or otherwise.
Controlled Group: means all members of a controlled group of
corporations and all trades or business (whether or not incorporated) under
common control which, together with the Company, are treated as a single
employer under Section 414(b) or 414(c) of the Code.
Conversion/Continuation Notice: is defined in Section 2.12(iii).
Corporate Base Rate: means a rate per annum equal to the corporate base
rate of interest announced by First Chicago from time to time, changing when
and as such corporate base rate changes.
Credit Documents: means this Agreement, the Security Agreement, the
Notes, the Balance Bank Agreements, any Approved GNMA Letters of Credit and any
related reimbursement agreements, and all other documents and instruments now
or hereafter delivered to the Agent or the Lenders pursuant to or in connection
with the transactions contemplated hereby, and any amendments, supplements,
modifications, renewals, replacements, consolidations, substitutions and
extensions of any of the foregoing.
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Credit Indebtedness: means, as of any date, the sum of (i) all amounts
owing under any of the Credit Documents (other than the Balance Bank
Agreements) to any of the Lenders, the Agent, or the Collateral Agent, plus
(ii) to the extent such fees have accrued within the three calendar months
immediately preceding such date, all deficiency fees owing to the Balance Banks
under the Balance Bank Agreements due to the Company's failure to maintain
sufficient deposits with such Balance Banks.
Credit Requirement: means, as of any date, the sum of (A) the aggregate
unpaid principal balance of all Loans then outstanding hereunder plus (B) the
aggregate principal amount of the outstanding Ratable Medium-Term Notes, plus
(C) the aggregate face amount of all Outstanding CPNs, plus (D) the then
current amount of Approved GNMA Letter of Credit Obligations.
Custodian Settlement Accounts: is defined in Paragraph 7(c) of the
Security Agreement.
Debt: means, with respect to any Person, as of any date of
determination thereof, without duplication, (i) all obligations of such Person
for borrowed money, including but not limited to money borrowed from any
parent, subsidiary or affiliate of such Person, whether or not evidenced by a
promissory note, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person to pay the deferred purchase price of property or services, including
without limitation the obligation of such Person to pay any deferred purchase
price for Servicing Agreements acquired, (iv) all obligations of such Person as
lessee under capital leases, (v) all Debt of others secured by a Lien on any
asset of such Person, whether or not such Debt is assumed by such Person, (vi)
all Debt of others Guaranteed by such Person, and (vii) all on-balance-sheet
obligations of such Person under repurchase agreements covering Securities or
pools of Mortgage Loans; provided that Debt shall not include Mortgage Related
Indebtedness.
Debt Threshold: is defined in Section 8.5.
Default: means an Event of Default or any event or condition that with
the giving of notice or the passage of time or both would constitute an Event
of Default.
Discount Advance: means an Advance made on a discounted basis by a
Balance Bank, a portion of which (or all of which, in the case of Discount
Advances made by Non-Lender Balance Banks) shall be simultaneously sold to the
other Lenders, all pursuant to Section 2.4 hereof, and to be repaid at the end
of the applicable Discount Loan Period.
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Discount Loan: means any Loan constituting a portion of a Discount
Advance.
Discount Loan Period: means, with respect to a Discount Loan, a period
of one month commencing on the Advance Date for such Discount Loan and ending
on the corresponding day in the next month. If a Discount Loan Period would
otherwise end on a day which is not a Business Day, such Discount Loan Period
shall end on the next succeeding Business Day, provided, however, (i) if said
next succeeding Business Day falls in a new calendar month, such Discount Loan
Period shall end on the immediately preceding Business Day, and (ii) no
Discount Loan Period shall extend beyond the Termination Date.
Discount Note: means, a Note executed and delivered by the Company and
the Borrowing Subsidiaries to each Lender in the form of Exhibit E-2 hereof
which shall evidence the Discount Loans described in Section 2.4 hereof.
Discount Rate: means, with respect to any Discount Loan Period, a fixed
rate of interest equal to the Applicable Margin for Eurodollar Advances in
effect at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Discount Loan Period.
Eligible AP Mortgage: is defined in Section 4.1(c).
Eligible Collateral: means, as of any date without duplication, (i)
Eligible Delivered Mortgages, (ii) Eligible AP Mortgages, (iii) Eligible
Pledged Securities, (iv) Eligible Pledged Servicing, (v) Eligible Servicing
Sale Receivables, (vi) Eligible Repurchased Agency Loans and Receivables, (vii)
the balance to the credit of the Company in the Settlement Account, and (viii)
cash and Cash Equivalents held by the Agent or Collateral Agent as security for
the Secured Debt.
Eligible Delivered Mortgage: is defined in Section 4.1(b).
Eligible Mortgage Loan: is defined in Section 4.1(a).
Eligible Pledged Security: is defined in Section 4.3.
Eligible Pledged Servicing: is defined in Section 4.4.
Eligible Repurchased Agency Loans and Receivables: is defined in
Section 4.2.
Eligible Servicing Sale Receivables: is defined in Section 4.5.
ERISA: means the Employment Retirement Income Security Act of 1974, as
amended from time to time.
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ERISA Affiliate: means any corporation or trade or business which is a
member of the same Controlled Group as the Company.
Eurodollar Advance: means an Advance which bears interest at the
Eurodollar Rate.
Eurodollar Base Rate: means, with respect to a Eurodollar Interest
Period or a Discount Loan Period, the rate determined by the Agent to be the
rate at which deposits in U.S. dollars are offered by First Chicago to
first-class banks in the London interbank market at approximately 11 a.m.
(London time) two Business Days prior to the first day of such Eurodollar
Interest Period or Discount Loan Period, in the approximate amount of (i) the
amount of the Eurodollar Advance or Discount Advance divided by (ii) the number
of Lenders making Loans in connection with such Advance, and having a maturity
approximately equal to such Eurodollar Interest Period or Discount Loan Period.
Eurodollar Interest Period: means, with respect to a Eurodollar
Advance, a period of one, two or three months, as selected by the Company,
commencing on a Business Day selected by the Company pursuant to this
Agreement. Such Eurodollar Interest Period shall end on (but exclude) the day
which corresponds numerically to such date one, two or three months thereafter,
as applicable; provided, however, that if there is no such numerically
corresponding day in such next month, such Eurodollar Interest Period shall end
on the last Business Day of such next month. If a Eurodollar Interest Period
would otherwise end on a day which is not a Business Day, such Eurodollar
Interest Period shall end on the next succeeding Business Day, provided,
however, that (i) if said next succeeding Business Day falls in a new calendar
month, such Eurodollar Interest Period shall end on the immediately preceding
Business Day, and (ii) no Eurodollar Interest Period shall extend beyond the
Termination Date.
Eurodollar Loan: means a Loan which bears interest at a Eurodollar
Rate.
Eurodollar Rate: means, with respect to a Eurodollar Advance and
Eurodollar Loan for the relevant Eurodollar Interest Period, and with respect
to the calculation of the Purchase Price with respect to any Discount Loan
Period, the sum of (i) the quotient of (a) the Eurodollar Base Rate applicable
to such Eurodollar Interest Period or Discount Loan Period, divided by (b) one
minus the Reserve Requirement (expressed as a decimal) applicable to that
Eurodollar Interest Period or Discount Loan Period, plus (ii) the Applicable
Margin in effect two Business Days prior to the first day of such Eurodollar
Interest Period or Discount Loan Period.
Event of Default: means any of the events described in Section 10.1.
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Facility: means the facility comprised of the Commitments made
available to the Company and (to the extent permitted hereunder) the Borrowing
Subsidiaries pursuant to this Agreement, which facility has an original term of
three years and an initial Aggregate Commitment of $750,000,000.
Facility Fee Rate: means, as of any date, the percentage per annum set
forth on Schedule 2 attached hereto which is in effect on such date, changing
as and when the Company's long-term unsecured debt rating by either S&P or
Xxxxx'x changes as described therein.
Federal Agency: means FHLMC, FNMA, GNMA, FHA or VA.
Federal Funds Advance: means an Advance bearing interest at the Federal
Funds Rate.
Federal Funds Funding Rate: means, with respect to any Federal Funds
Loan for any day, the rate per annum equal to the consensus (or if no consensus
exists, the arithmetic average) of the rates at which reserves are offered by
first-class banks to other first-class banks (at approximately the time at
which the applicable Advance Notice or Conversion/Continuation Notice is
received or the time at which an automatic continuation is deemed to have
occurred) on such day (or if such day is not a Business Day, on the immediately
preceding Business Day) on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, based on quotes
received by the Agent from three federal funds brokers of recognized standing
selected by the Agent in its sole discretion; provided, however, that in lieu
of determining the rate in the foregoing manner, the Agent may substitute
therefor the consensus (or if no consensus exists, the arithmetic average) of
the rates at which reserves are offered by first-class banks to other
first-class banks at 10:00 a.m. (Chicago time) on such day (or if such day is
not a Business Day, on the immediately preceding Business Day) on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, received by the Agent from three federal funds
brokers of recognized standing selected by the Agent in its sole discretion.
Federal Funds Loan: means any Loan constituting a portion of a Federal
Funds Advance.
Federal Funds Rate: means, for any day, an interest rate per annum
equal to (i) the Federal Funds Funding Rate for such day, plus (ii) 0.125% per
annum, plus (iii) the Applicable Margin.
Fees: is defined in Section 2.2.
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FHA: means the Federal Housing Administration or other agency,
corporation or instrumentality of the United States to which the powers and
duties of the Federal Housing Administration have been transferred.
FHA-Approved Mortgagee: means an institution that is approved by the
FHA to act as a servicer and mortgagee of record with respect to a Mortgage
Loan insured by the FHA.
FHA Mortgage Loan: means a Mortgage Loan that is secured by a first
lien on land and the Single Family Residence constructed thereon and is insured
by FHA.
FHLMC: means the Federal Home Loan Mortgage Corporation or other
agency, corporation or instrumentality of the United States to which the powers
and duties of the Federal Home Loan Mortgage Corporation have been transferred.
FHLMC-Approved Lender: means an institution that is approved by the
FHLMC to act as a lender in connection with the origination of any Mortgage
Loan purchased by the FHLMC.
FHLMC Security: means a security representing an undivided fractional
interest in a pool of Mortgage Loans, which security is issued and guaranteed
as to full and timely payment of interest and full collection of principal by
FHLMC.
First Chicago: means The First National Bank of Chicago, in its
corporate capacity and not as Agent, and its successors and assigns.
FNMA: means the Federal National Mortgage Association or other agency,
corporation or instrumentality of the United States to which the powers and
duties of the Federal National Mortgage Association have been transferred.
FNMA-Approved Lender: means an institution that is approved by the FNMA
to act as a lender in connection with the origination of any Mortgage Loan
purchased by the FNMA.
FNMA Security: means a security representing an undivided fractional
interest in a pool of Mortgage Loans, which security is issued and guaranteed
as to full and timely payment of principal and interest by FNMA.
Fundamental Change: is defined in Section 8.4.
Fundamental Change/Investment Calculation Period: means, in respect of
any Fundamental Change or Investment, the period ending on the date of
consummation of such Fundamental Change or Investment and including the four
most recent consecutive fiscal
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quarters ending on or prior to the date of consummation of such Fundamental
Change or Investment.
Funded Debt: means as of any date of determination thereof, all Debt of
the Company and its consolidated Subsidiaries (including without limitation all
amounts payable by the Company in connection with the acquisition of any
Servicing Agreements and the amount of all checks, drafts or other items issued
by the Company or any of its consolidated Subsidiaries to fund Mortgage Loans
to the extent such checks, drafts or other items have not been collected upon
and paid), minus (i) all Debt of others Guaranteed by the Company or any of its
consolidated Subsidiaries and (ii) all Debt of others secured by a Lien on any
asset of the Company or any of its consolidated Subsidiaries, unless such Debt
is assumed by the Company or any of its consolidated Subsidiaries.
Funding Agreement: means an agreement by and between the Company and a
Borrowing Subsidiary relating to the methods by which the Company directly
funds certain Mortgage Loans made in such Borrowing Subsidiary's name, the form
of which is attached hereto as Exhibit M.
GAAP: means generally accepted accounting principles as in effect from
time to time.
General Commitment: means, for each Lender as of any date, the
obligation of such Lender to make Loans not exceeding the amount set forth as
its total commitment (excluding any Swingline Commitment) on Exhibit C attached
hereto, as such amount may be modified from time to time pursuant to the terms
hereof, or the amount established in any assignment to a new Lender pursuant to
the terms hereof.
GNMA: means the Government National Mortgage Association or other
agency, corporation or instrumentality of the United States as to which the
powers and duties of the Governmental National Mortgage Association have been
transferred.
GNMA Security: means a security representing an undivided fractional
interest in a pool of Mortgage Loans, which security is issued by the Company
and guaranteed as to full and timely payment of principal and interest by GNMA
without regard as to whether the Company collects any payments on such Mortgage
Loans.
Guaranty: means, with respect to any Person, any obligation, contingent
or otherwise, of such Person directly or indirectly guaranteeing any Debt of
any other Person (a "primary obligor") or in any manner providing for the
payment of any Debt of any primary obligor or otherwise protecting the holder
of such Debt against loss (whether by agreement to keep-well, to purchase
assets, goods, securities or services, to advance or supply funds
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to the primary obligor to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, 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, (ii) obligations of the Company pursuant to
Recourse Servicing, (iii) commitments by the Company or any Borrowing
Subsidiary to purchase Mortgage Loans in the ordinary course of business, and
(iv) obligations in the Company's capacity as servicer of Mortgage Loans. The
term "Guarantee" used as a verb has a correlative meaning.
Hazardous Substance: means any hazardous, toxic or dangerous waste,
substance or material subject to regulation under the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, and
federal, state or local so-called "Superfund" or "Superlien" laws, or any other
federal, state or local laws, ordinances, rules or regulations governing or
regulating hazardous materials, pollution, the environment or public health, as
now or at any time hereafter in effect.
HUD: means the United States Department of Housing and Urban
Development or other agency, corporation or instrumentality of the United
States to which the powers and duties of the United States Department of
Housing and Urban Development have been transferred.
Investment: means, as applied to any Person, any direct or indirect
purchase or other acquisition by that Person of, or a beneficial interest in,
stock or other securities of any other Person or any option, contract,
certificate or other financial product (including, but not limited to, interest
rate swaps and other hedging instruments), or any direct or indirect loan,
advance or capital contribution by that Person to any other Person, including
all indebtedness and accounts receivable from that other Person which are not
current assets or did not arise from sales to that other Person in the ordinary
course of business. The amount of any Investment shall be determined in
accordance with GAAP.
Issuing Lender: is defined in Section 2.6(b).
Jumbo Mortgage Loan: means a Residential Mortgage Loan that (i) meets
all applicable requirements for sale to FNMA or FHLMC or for guaranty by GNMA
except that the amount of such Mortgage Loan exceeds the amounts permitted by
such requirements, (ii) at the time of origination had a principal balance that
did not exceed 80% of the appraised value of the real estate and improvements
securing such Mortgage Loan, unless private mortgage insurance was obtained
covering such Mortgage Loan, in which case it may have an original principal
balance in excess of 80% but not in excess of 95% of such appraised value,
(iii) has a term of
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not more than 30 years, (iv) meets all of the then-current requirements for
sale to an Approved Investor purchasing such type of Mortgage Loan from the
Company or Borrowing Subsidiary, and (v) has an outstanding principal balance
on the Pledge Date thereof of less than $1,000,000 in any event.
Lender: means, at any time, any party having a Commitment hereunder and
its successors and permitted assigns.
Lending Installation: means, with respect to a Lender, any office,
branch, subsidiary or affiliate of any Lender.
Lending Sublimits: is defined in Section 2.1(a).
Lien: means, with respect to any asset of any Person, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect
of such asset. For the purposes of this Agreement, such Person shall be deemed
to hold subject to a Lien any asset that it has acquired or holds subject to
the interest of a vendor or lessor under any conditional sales agreement,
capital lease or other title retention agreement relating to such asset.
Loan: means a loan of money in any amount to the Company or any
Borrowing Subsidiary by a Lender pursuant to this Agreement.
MBS Value: means, with respect to any Security, the lowest of (a) the
face amount of such Security, (b) the weighted average purchase price committed
to under those Approved Investor Commitments which could cover such Security,
determined in the manner set forth in Exhibit F, and (c) if so required from
time to time by the Agent, the then-current market value of such Security as
conclusively determined by a third party broker of nationally recognized
standing selected by the Collateral Agent.
Moody's: means Xxxxx'x Investors Service, Inc. or any successor to its
business.
Mortgage: means a mortgage, deed of trust, security deed or similar
instrument purporting to create a first lien or similar interest in real estate
and improvements thereon.
Mortgage Collateral Value: means, with respect to any Mortgage Loan,
the lowest of (A) the unpaid principal balance of such Mortgage Loan on the
Pledge Date therefor, (B) the net acquisition cost of such Mortgage Loan, if
acquired by the Pledgor, (C) the weighted average purchase price (determined on
a weekly basis and expressed as a percentage of par) committed to under those
Approved Investor Commitments which could cover such Mortgage Loan applied to
the unpaid principal balance (as of the Pledge Date) of such Mortgage Loan
determined in the manner set forth in Exhibit F, and (D) the then-current
market value of such
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Mortgage Loan as conclusively determined by a third party broker of nationally
recognized standing selected by the Collateral Agent.
Mortgage Loan: means a loan of money evidenced by a Mortgage Note and
secured by a Mortgage.
Mortgage Note: means a note evidencing the indebtedness secured by a
Mortgage.
Mortgage-Related Indebtedness: means, with respect to the Company and
its Subsidiaries, any amount arising out of the issuance in the ordinary course
of the mortgage banking business of the Company and its Subsidiaries of (i)
mortgage pools, pass-throughs, participation certificates and other
mortgage-related securities to the extent that such amount would not, in
accordance with GAAP, be shown as indebtedness on a consolidated balance sheet
of the Company and its Subsidiaries as at such date and (ii) collateralized
mortgage obligations and other mortgage-related securities issued by a
Subsidiary of the Company, the payment of principal and interest in respect of
which is secured by a Lien on mortgage loans or other mortgage-related
securities (or other securities in which the Company invests in the ordinary
course of its mortgage banking business) conveyed to such Subsidiary in an
amount reasonably anticipated by the Company to approximate the amount required
to pay the principal and interest in respect of such collateralized mortgage
obligations or other mortgage-related securities (whether or not such amount
would, in accordance with GAAP, be shown as indebtedness on a consolidated
balance sheet of the Company and its Subsidiaries as at such date).
Negative Security Event: means any date following a Positive Security
Event on which any of the following events occurs: (i) the Company's long term
unsecured debt ratings decrease to a level below "A-", as rated by S&P, or a
level below "A3", as rated by Moody's, or (ii) the Company's long-term
unsecured debt is no longer rated by both S&P and Moody's, or (iii) an Event of
Default occurs hereunder, or (iv) any of the Positive Security Conditions shall
cease to be satisfied.
Nonconforming Mortgage Loan: means a Residential Mortgage Loan that (i)
is neither a Conforming Mortgage Loan nor a Jumbo Mortgage Loan, (ii) at the
time of origination had a principal balance that did not exceed 80% of the
appraised value of the real estate and improvements securing such Mortgage
Loan, unless private mortgage insurance was obtained covering such Mortgage
Loan, in which case it may have an original principal balance in excess of 80%
but not in excess of 95% of such appraised value, (iii) has a term of not more
than 30 years, (iv) meets all of the then-current requirements for sale to an
Approved Investor purchasing such type of Mortgage Loan from the Company or any
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Borrowing Subsidiary, and (v) has an original principal balance of less than
$200,000 in any event.
Non-Lender Balance Bank: means any bank or other financial institution
approved in advance by the Agent and the Company which is not a Lender
hereunder but which is an Affiliate of a Lender and which has executed a
Balance Bank Agreement pursuant to which it has agreed to make Discount
Advances hereunder and sell such Discount Advances to the Lenders pursuant to
Section 2.4.
Note: means promissory notes evidencing amounts that may be advanced
from time to time under this Agreement, (i) in substantially the form of
Exhibit E-1 attached hereto with respect to Loans other than Discount Loans and
Bid Loans, (ii) in substantially the form of Exhibit E-2 attached hereto with
respect to Discount Loans, and (iii) in a form mutually agreed to between the
Company and each Bid Lender with respect to Bid Loans, each duly executed by
the Company and each Borrowing Subsidiary and payable to the order of a Lender,
including any amendment, modification, renewal or replacement of such
promissory notes.
Notice Address: means, as to any Person, the address of such Person
specified in or pursuant to Section 12.2.
Obligations: means any and all amounts due from the Company or any
Borrowing Subsidiary to any of the Lenders, the Agent or the Collateral Agent
hereunder or under the Notes, the Security Agreement or any other Credit
Document.
Original Facility: is defined in the first recital of this Agreement.
Outstanding CPN: means, as of any date, each commercial paper note
issued by the Company which has not been presented for payment or for which
payment has not been made in full; provided, however, that as long as there has
not occurred an Event of Default, which Event of Default has not been waived by
the Required Lenders, "Outstanding CPN" shall not include on any date any such
commercial paper note which matures on such date but shall include all such
commercial paper notes to be issued on such date.
Overnight Transaction Advance: means a Swingline Advance which bears
interest at the Overnight Transaction Rate.
Overnight Transaction Effective Rate: means, as of any day for any
Overnight Transaction Advance, a rate of interest per annum determined by First
Chicago in its sole discretion as its overnight transaction loan rate (at
approximately the time at which the applicable Advance Notice or
Conversion/Continuation
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Notice is received or the time at which an automatic continuation is deemed to
have occurred) for such day (or if such day is not a Business Day, on the
immediately preceding Business Day) for advances in such amount.
Overnight Transaction Rate: means, with respect to an Overnight
Transaction Advance, a per annum interest rate equal to the sum of the
Overnight Transaction Effective Rate plus the Applicable Margin plus one
quarter of one percent (0.25%).
Parent: means Fund American Enterprises, Inc.
Participants: is defined in Section 11.2(a).
PBGC: means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
Person: means an individual, corporation, limited liability company,
partnership, joint venture, trust or unincorporated organization, or a
government or any agency or political subdivision thereof.
Plan: means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of
the Code as to which the Company or any member of the Controlled Group may have
any liability.
Pledge Date: means the date on which a Mortgage Loan or a Security is
first delivered in pledge to the Collateral Agent, provided that (i) the date
of delivery of a Mortgage Loan covered by an AP Notice shall be deemed to be
the date of delivery of such AP Notice even after subsequent delivery of the
related Required Mortgage Documents, and (ii) the "Pledge Date" for all
Collateral previously held by the Collateral Agent under the Original Facility
shall be deemed to be the date on which such Collateral was first delivered to
the Collateral Agent under the Original Facility even though such date is prior
to the date of this Agreement.
Pledged Item: means any Pledged Mortgage or Pledged Security.
Pledged Mortgages: means Mortgage Loans that are from time to time
designated by the Company or any Borrowing Subsidiary and the Required Mortgage
Documents in respect of which are required to be delivered to the Collateral
Agent pursuant to any of this Agreement or the Security Agreement, including
all Required Mortgage Documents related thereto.
Pledged Securities: means Securities that are from time to time
designated by the Company or any Borrowing Subsidiary and required to be
delivered to the Collateral Agent pursuant to
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either this Agreement or the Security Agreement, whether or not such Pledged
Securities are Eligible Pledged Securities.
Pledged Servicing: means, as of any date of determination thereof, all
right, title and interest of the Company, of every kind and nature, whether now
existing or hereafter arising, in and to all Servicing Agreements, together
with all accounts receivable arising therefrom, now or hereafter existing,
including without limitation all rights of the Company to sell or assign its
interest therein and all amounts payable to the Company thereunder arising out
of any termination thereof, and all files, surveys, certificates,
correspondence, appraisals, computer programs, tapes, disks, cards, accounting
records and other records and data of the Company related to the Mortgage Loans
covered by such Servicing Agreements and all proceeds and products thereof.
Pledged Servicing Sale Receivables: means Servicing Sale Receivables
which are from time to time designated by the Company and pledged to the
Collateral Agent in accordance with this Agreement and the Security Agreement.
Pledgor: is defined in Section 4.7.
Positive Security Conditions: is defined in Section 4.13(a).
Positive Security Event: means any date on which the Agent has
acknowledged in writing that (i) the Company's long-term unsecured debt ratings
are at a level equal to or above "A-", as rated by S&P, and a level equal to or
above "A3", as rated by Moody's, when either such ratings were previously below
such respective level, and (ii) the Positive Security Conditions are satisfied,
after which date the Lenders' security interest in the Collateral may be abated
at the Company's request pursuant to Section 4.13.
Published Federal Funds Effective Rate: means, for any day, an interest
rate per annum equal to the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published for such day (or, if such day
is not a Business Day, for the immediately preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations at approximately
10:00 a.m. (Chicago time) on such day on such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by the
Agent in its sole discretion.
Purchase Price: is defined in Section 2.4(d).
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Ratable Medium-Term Notes: means those certain notes issued by the
Company which are required to be ratably secured with any other secured debt of
the Company pursuant to the terms of (i) an Indenture, dated as of September
15, 1986, between Fireman's Fund Mortgage Corporation (predecessor in interest
to the Company) and National Bank of Detroit, as trustee, as supplemented by
certain supplemental indentures and (ii) an Indenture, dated as of November 21,
1988, between Fireman's Fund Mortgage Corporation and The First National Bank
of Chicago, as trustee, as supplemented by certain supplemental indentures.
The current trustee under each of the indentures relating to the Ratable
Medium-Term Notes is Norwest Bank Minnesota, N.A., a national banking
association.
Rate Option: means the Eurodollar Rate, the Overnight Transaction Rate,
the Federal Funds Rate, the Discount Rate, the Alternate Base Rate, the
Swingline Buydown Rate, or, if available, any Bid Rate.
Recourse Servicing: means any servicing rights under a Servicing
Agreement (other than any Servicing Agreement with GNMA) which obligates the
Company to repurchase Mortgage Loans upon default by the borrower thereunder or
indemnify any party having an interest in such Mortgage Loans against any
principal loss arising from such a default, unless (i) the Company has obtained
and maintains in effect insurance with coverages satisfactory to Agent from an
insurance company having a AAA rating covering the risk of being required to so
indemnify any such party, or (ii) the Company's obligation to indemnify any
party against any principal loss is limited to 10% or less of any such loss.
Regulation D: means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors relating
to reserve requirements applicable to member banks of the Federal Reserve
System.
Regulation U: means Regulation U of the Board of Governors of the
Federal Reserve System from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to
the extension of credit by banks for the purpose of purchasing or carrying
margin stocks applicable to member banks of the Federal Reserve System.
Reinstated Repurchased Agency Loans and Receivables: means Eligible
Repurchased Agency Loans and Receivables which have been reinstated and as to
which (i) the Company shall have delivered to the Collateral Agent the Required
Mortgage Documents and a copy of the insurance or guaranty certificate (and, if
requested by the Agent or Collateral Agent, an original of such certificate and
any other Additional Required Mortgage Documents) related
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thereto and (ii) no more than two installments of principal or interest are
past due since the reinstatement of the Mortgage Loan.
REO: means any interest in real property and the improvements thereon
owned by the Company as a result of the foreclosure or transfer in lieu of
foreclosure of a Mortgage Loan.
Reportable Event: means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified of the occurrence
of such event, provided, however, that a failure to meet the minimum funding
standard of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
Repurchased Agency Loans and Receivables: means all VA Mortgage Loans
or FHA Mortgage Loans (plus any REO or accounts receivable from FHA or VA
resulting therefrom, including guaranty claims against VA and insurance claims
against FHA or HUD) which were originally repurchased by the Company from
Security holders. In each case such Mortgage Loans (and the REO or accounts
receivable resulting therefrom) shall be valued based solely on (i) the amount
of principal last due under such Mortgage Loan, even after conversion of such
Mortgage Loan to REO, plus (ii) the amount of past-due interest advanced by the
Company on account of such Loan which is guaranteed by VA or insured by FHA;
provided, however, that 90 days after written notice to the Company that the
Required Lenders have elected to exclude past-due interest from such valuation,
such valuation shall cease to include the past-due interest described under
clause (ii).
Required Lenders: means (i) the lenders having two-thirds of the
Aggregate Commitment then in effect, or (ii) if the Commitments have been
terminated, Lenders having at least two-thirds of the aggregate Loans then
outstanding.
Required Mortgage Documents: means the instruments and documents
described in Schedule A to the Security Agreement, as applicable to the
particular Mortgage Loan, which are required to be delivered to the Collateral
Agent and such other instruments and documents described therein as the Agent
or Collateral Agent may request.
Required Servicing Collateral Amount: means, on any date, the positive
amount, if any, equal to (1) the lesser of (a) the amount by which the Credit
Requirement on such date exceeds the Warehouse Borrowing Base on such date and
(b) the principal
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amount of all Loans other than Bid Loans outstanding on such date, multiplied
by (2) a fraction having a numerator equal to the principal amount of all Loans
other than Bid Loans outstanding on such date and a denominator equal to the
sum of the principal amount of all Loans other than Bid Loans outstanding on
such date plus the unpaid principal amount of the Ratable Medium-Term Notes on
such date.
Reserve Requirement: means, with respect to the Eurodollar Rate
applicable to a Discount Loan Period or a Eurodollar Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on
eurocurrency liabilities on the date of determination of such Eurodollar Rate.
Residential Mortgage Loan: means a Mortgage Loan secured by a Mortgage
on a Single Family Residence.
Restricted Payment: means: (i) with respect to the Company, any payment
of any dividends upon any shares of the Company's stock now or hereafter
outstanding, except dividends payable in the stock of the Company, and any
other distribution of assets to its stockholders, as such, (including any
repurchase of the Company's stock) whether in cash, property, or securities,
other than the exchange of Subordinated Debt for Series A Preferred Stock; and
(ii) any payment of principal of or interest on the Subordinated Debt, and any
amounts deposited with the trustee under the Subordinated Debt Indenture or
otherwise irrevocably set aside for the benefit of the holders of the
Subordinated Debt for the purpose of defeasance of the Subordinated Debt.
Resulting Entity: means the Company and its consolidated Subsidiaries
after giving effect to any Fundamental Change or Investment.
S&P: means Standard & Poor's Ratings Group or any successor to its
business.
SEC: means the Securities and Exchange Commission (or any successor
entity).
Secured Debt: means the sum of the Credit Indebtedness and all amounts
outstanding under the Ratable Medium-Term Notes.
Secured Parties: means, collectively, the Lenders, the Non-Lender
Balance Banks (to the extent of any Credit Indebtedness owed to such Non-Lender
Balance Banks), the Agent, the Collateral Agent and the holders of the Ratable
Medium-Term Notes.
Security: means any FHLMC Security, FNMA Security or GNMA Security.
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Security Agreement: means the Second Amended and Restated Security and
Collateral Agency Agreement as of even date herewith, substantially in the form
of Exhibit D attached hereto, by and among the Company, each Borrowing
Subsidiary, the Agent, the trustee under the indentures relating to the Ratable
Medium-Term Notes, and the Collateral Agent, pursuant to which a security
interest is created in favor of the Collateral Agent for the Secured Parties in
certain Collateral to be pledged pursuant to this Agreement, as the same may,
from time to time, be further supplemented, modified or amended.
Series A Preferred Stock: means the Company's 8.42% Cumulative
Preferred Stock, Series A.
Servicing Agreement: means a written contract of the Company with
another Person to act on behalf of such other Person to, among other things,
receive payments in respect of Mortgage Loans and to service Mortgage Loans,
but shall not include the servicing rights related to (i) any Residential
Mortgage Loans while they constitute Collateral, (ii) any commercial Mortgage
Loans, or (iii) any other Mortgage Loans held for investment by the Company,
Parent or any of their respective Subsidiaries.
Servicing Collateral Fee Rate: means, as of any date the percentage per
annum set forth on Schedule 2 attached hereto which is in effect on such date,
changing as and when the Company's long-term unsecured debt rating by either
S&P or Moody's changes as described therein.
Servicing Purchaser: means a Person which has purchased Servicing
Agreements from the Company.
Servicing Sale Receivables: means funds due to the Company from a
Servicing Purchaser in connection with a sale of Servicing Agreements from the
Company to such Servicing Purchaser.
Settlement Account: means the account established pursuant to Section
4.11.
Single Family Residence: means a one to four family dwelling unit,
which may be a condominium unit but which shall not be a mobile home (unless
qualified under a Federal Agency program) or a dwelling unit in a cooperative
apartment building.
Subordinated Debt: means the principal amount of (but not any interest
on) the unsecured subordinated Debt of the Company outstanding from time to
time (which amount shall not exceed $100,000,000) evidenced by the Quarterly
Income Capital Securities (Subordinated Interest Deferrable Debentures, Due
2025) of the Company issued in exchange for certain of the Series A Preferred
Stock, the terms of which unsecured subordinated Debt are set forth in the
Subordinated Debt Indenture; but shall not
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include any such unsecured subordinated Debt with respect to which any amounts
shall have been deposited with the trustee under the Subordinated Debt
Indenture or otherwise irrevocably set aside for the benefit of the holders of
such Debt for the purpose of defeasance of such Debt.
Subordinated Debt Indenture: means that certain Subordinated Indenture,
dated as of December 1, 1995, as amended or supplemented from time to time, by
and between the Company and IBJ Xxxxxxxxx, as trustee, pursuant to which the
Company has issued or will issue the Subordinated Debt.
Subservicing Agreement: means a Servicing Agreement between the Company
and a Person which does not own the Mortgage Loans being serviced thereunder
but only has servicing or other non-ownership rights with respect thereto.
Subsidiary: of a Person means (i) any corporation more than 50% of the
outstanding voting securities having ordinary voting power of which shall at
the time be owned or controlled, directly or indirectly, by such Person or by
one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any partnership, association, joint venture or similar
business organization more than 50% of the ownership interests having ordinary
voting power of which shall at the time be so owned or controlled. Unless
otherwise expressly provided, all references herein to a "Subsidiary" shall
mean a Subsidiary of the Company.
Swingline Advances: means all Advances made by the Swingline Lender
which are designated by the Company or a Borrowing Subsidiary as Swingline
Advances in the applicable Advance Notice, which Advances may be Overnight
Transaction Advances, Alternate Base Rate Advances or Swingline Buydown
Advances.
Swingline Buydown Advance: means a Loan made pursuant to Section 2.5(b)
by the Swingline Lender at the Swingline Buydown Rate.
Swingline Buydown Rate: means a rate to be agreed upon by the Company
and the Swingline Lender to apply to Swingline Buydown Advances pursuant to a
Balance Bank Agreement between the Swingline Lender and the Company.
Swingline Commitment: means, the obligation of the Swingline Lender to
make Swingline Advances hereunder not exceeding $10,000,000.
Swingline Lender: means First Chicago.
Termination Date: means November 11, 1999, or if any such day is not a
Business Day, the next preceding Business Day.
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Transferee: is defined in Section 11.4.
Unsecured Leverage Ratio: means as of any date, the applicable maximum
leverage ratio (which changes as and when the Aggregate Commitment changes) set
forth in Section 8.9(b).
VA: means the Veterans Administration or other agency, corporation or
instrumentality of the United States as to which the powers and duties of the
Veterans Administration have been transferred.
VA-Approved Lender: means an institution that is approved by the VA to
act as a lender in connection with the origination of any Mortgage Loan
guaranteed by the VA.
VA Mortgage Loan: means a Mortgage Loan that is secured by a first lien
on land and the Single Family Residence constructed thereon and is guaranteed
by the VA.
Warehouse Borrowing Base: means, for any date, that portion of the
Aggregate Borrowing Base on such date attributable to Eligible Collateral other
than Eligible Pledged Servicing.
1.2 Interpretation.
(a) Words of the masculine gender include correlative words
of the feminine and neuter genders.
(b) Unless the context shall otherwise indicate, words
importing the singular include the plural and vice versa.
(c) Articles and Sections referred to by number mean the
corresponding Articles and Sections of this Agreement.
(d) The terms "hereby," "hereof," "hereto," "herein,"
"hereunder" and any similar terms as used in this Agreement, refer to
this Agreement as a whole unless otherwise expressly stated.
1.3 Accounting Terms and Determinations.
Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be
prepared, in accordance with GAAP, applied on a basis consistent (except for
changes concurred in by the Company's independent public accountants) with the
most recent audited consolidated financial statements of the Company delivered
to the Lenders. To enable the ready and consistent determination of compliance
with the covenants set forth herein, neither the Company nor any Borrowing
Subsidiary will change its fiscal year from a calendar year without (i) advance
written
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notice to the Lenders, (ii) providing interim financial reports certified by
the Company, by the dates that such reports would have been required prior to
such change, and (iii) providing an interim audited financial statement if more
than fifteen (15) months will have elapsed between annual audited financial
statements as a result of such change.
ARTICLE II
BORROWINGS
2.1 Availability and Adjustments.
(a) Agreement to Lend. Subject to subparagraphs (1)
through (4) below (the "Lending Sublimits"), each Lender severally
agrees to make Loans to the Company and participate in purchases of
Discount Advances (and, to the extent and not to exceed the amounts
provided in the second Recital of this Agreement, the Swingline Lender
agrees to make Swingline Advances to the Borrowing Subsidiaries) on the
terms and conditions set forth in this Agreement from time to time
through the Business Day immediately preceding the Termination Date,
provided that, on any date, after giving effect to such Loans and all
other Loans that the Company or any Borrowing Subsidiary has requested
be made on such date:
(1) the aggregate principal balance then outstanding
under all Loans made by any Lender under this Agreement
(excluding the aggregate principal balance then outstanding of
any Bid Loans made by such Lender and any portion of Discount
Advances made by such Lender which have been sold or, will on
such date be simultaneously sold, to the other Lenders under
Section 2.4) shall not at any time exceed the sum of (i) such
Lender's then-current General Commitment, and (ii) such Lender's
then-current Swingline Commitment, if any;
(2) the aggregate principal balance of all Loans
outstanding under this Agreement plus the aggregate face amount
of all Outstanding CPNs plus the amount of all outstanding
(whether currently due or contingent) Approved GNMA Letter of
Credit Obligations shall not at any time exceed the then-current
Aggregate Commitment;
(3) the Credit Requirement shall not exceed the
Aggregate Borrowing Base;
(4) except as otherwise set forth in Section 2.5(c),
the aggregate principal balance of all Swingline Advances
outstanding under this Agreement at any time shall not exceed
the Swingline Commitment.
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Subject to the terms hereof, the Company and the Borrowing Subsidiaries
may borrow, repay and reborrow amounts hereunder.
(b) Optional Increases in Aggregate Commitments. The
Company shall have the right to increase the Aggregate Commitment, but
not to an amount in excess of $1,250,000,000, by obtaining additional
Commitments, either from one or more of the Lenders or another lending
institution provided that (A) the Agent has approved the identity of any
such new Lender, (B) any such new Lender assumes all of the rights and
obligations of a "Lender" hereunder, and (C) the Agent has received a
"New/Modified Commitment Supplement" in the form of Exhibit H attached
hereto, which supplement shall be executed by the Company, each
Borrowing Subsidiary, the Agent and any Lender modifying its Commitment
thereby. Each New/Modified Commitment Supplement shall be deemed to
amend Exhibit C to the extent necessary to reflect any changes in the
Commitments hereunder, and the Agent shall promptly deliver a copy of
such supplement to each Lender whose Commitment Percentage is affected
thereby.
(c) Optional Reductions in Aggregate Commitments. The
Company shall have the right to reduce the Aggregate Commitment upon ten
Business Days' prior written notice to the Agent, provided that such
voluntary reductions shall be made only in multiples of $10,000,000.
Upon a reduction of the Aggregate Commitment pursuant to the preceding
sentence, each Lender's General Commitment shall be decreased pro rata
in accordance with such Lender's Adjusted Commitment Percentage. On or
before the effective date of any such reduction, the Company shall, if
necessary, repay sufficient Loans to prevent the remaining outstanding
Loans hereunder, after giving effect to such permanent reduction, from
exceeding the Lending Sublimits.
2.2 Fees.
The Company shall pay the following fees (the "Fees"):
(a) Facility Fee. A facility fee based on the Aggregate
Commitment from time to time, calculated at the Facility Fee Rate,
changing when and as such rate changes, expressed as a per diem rate on
the actual Aggregate Commitment for each day during the preceding full
or partial calendar quarter, payable in arrears, on or before the fifth
Business Day of each calendar quarter and on the Termination Date. This
fee shall be allocated among the Lenders on a pro rata basis in
accordance with their respective Commitments (including any Swingline
Commitment) on each day during such quarter.
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(b) Servicing Margin/Servicing Collateral Fee. A servicing
collateral fee based on the Required Servicing Collateral Amount, which
fee shall be calculated at the Servicing Collateral Fee Rate, changing
as and when such rate changes, expressed as a per diem rate on the
actual Required Servicing Collateral Amount for each day during the
preceding full or partial calendar quarter, payable in arrears on or
before the fifth business day of each calendar quarter and on the
Termination Date. This fee shall be allocated among the Lenders on a
pro rata basis in accordance with the principal balance of their
respective outstanding Loans other than Bid Loans on those days during
such quarter on which there was a Required Servicing Collateral Amount.
(c) Amendment Fee. An amendment fee of $1,000 to each
Lender for each amendment to this Agreement requested solely by the
Company in excess of two (2) amendments during any calendar year.
(d) Other Fees Payable to Agent. Any fees payable to the
Agent pursuant to the Company's prior letter agreement with the Agent.
(e) Up Front Fees Payable to Lenders. Up-front fees
payable to the Lenders, based on each Lender's accepted allocated
Commitment, in the amounts set forth on the schedule of up-front fees
dated October 2, 1996 previously delivered to the Lenders by the Agent.
(f) Collateral Agent Fees. Collateral Agent fees payable
to Collateral Agent for its services rendered pursuant to the Security
Agreement as agreed to by the Company and the Collateral Agent from time
to time.
(g) Fees Payable in Connection with Discount Loans or
Swingline Buydown Advances. Any deficiency fees owing to the Balance
Banks or the Swingline Lender under the Balance Bank Agreements due to
the Company's failure to maintain sufficient deposits with such Balance
Banks or the Swingline Lender and any other fees owing under the Balance
Bank Agreements.
2.3 Advances.
(a) Types of Advances. Each Advance hereunder shall
consist of Loans made from one or more of the Lenders and requested by the
Company or a Borrowing Subsidiary in accordance with Section 2.9. Subject to
the terms and conditions herein, Eurodollar Advances, Alternate Base Rate
Advances and Federal Funds Advances shall be generally available as permitted
by the Lending Sublimits. Discount Advances shall be available only as
provided in Section 2.4. Swingline Advances shall be available
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as provided in Section 2.5. Bid Loans shall be available as provided in
Section 2.6. Notwithstanding anything to the contrary contained in this
Agreement, at any time during the continuance of a Default the Agent may (and
at the direction of the Required Lenders shall) declare by notice to the
Company that no Advance may be made as, converted into or continued as a
Eurodollar Advance or a Discount Advance, and each such Advance shall
automatically be converted into a Federal Funds Advance at the expiration of
the interest period applicable thereto.
(b) Rate Options. Eurodollar Advances, Alternate Base Rate
Advances, Federal Funds Advances, Swingline Buydown Advances and Overnight
Transaction Advances shall accrue interest at the Eurodollar Rate, the
Alternate Base Rate, the Federal Funds Rate, the Swingline Buydown Rate and the
Overnight Transaction Rate, respectively. Discount Advances shall not bear
interest but shall be made on a discounted basis by one or more Balance Banks
and shall be sold to the other Lenders in accordance with Section 2.4.
(c) Funding of Advances. Discount Advances, Swingline
Advances and Bid Loans shall be funded by the Lenders as provided in Sections
2.4, 2.5 and 2.6, respectively. All other Advances shall be funded on a pro
rata basis among all Lenders in accordance with each Lender's Adjusted
Commitment Percentage.
(d) Reallocation of Swingline Advances. Upon the election
of the Swingline Lender at any time, all outstanding Swingline Advances
(including Swingline Advances made pursuant to Section 2.5(c) below) designated
by the Swingline Lender shall be reallocated among all Lenders in accordance
with each Lender's Adjusted Commitment Percentage, and each such Swingline
Advance shall thereafter be deemed for all purposes a Federal Funds Advance.
Notwithstanding the preceding sentence or any other provision of this
Agreement, no portion of any Swingline Advance shall be reallocated to any
Lender to the extent such reallocation would cause such Lender's share of the
aggregate unpaid principal amount of all Loans (other than Bid Loans) then
outstanding under this Agreement to exceed its General Commitment hereunder.
(e) Reallocation Upon Default. Automatically after the
occurrence of an Event of Default described in Section 10.1(k) and upon the
request of any Lender during the continuance of any other Event of Default, (i)
all Swingline Advances made in accordance with this Agreement, Federal Funds
Advances and Alternate Base Rate Advances (excluding Bid Loans) shall be
immediately reallocated among all Lenders in accordance with each Lender's
Commitment Percentage, and each Swingline Advance shall thereafter be deemed
for all purposes a Federal Funds Advance, and (ii) each Eurodollar Advance and
Discount Advance shall, upon the expiration of the interest period applicable
thereto,
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automatically be converted into a Federal Funds Advance and reallocated among
all Lenders in accordance with each Lender's Commitment Percentage. Each
Lender holding less than its Commitment Percentage of all Advances (excluding
Bid Loans) shall at the times set forth for reallocations in the preceding
sentence immediately purchase for cash and at face value such participations in
the Notes held by other Lenders, and make such other adjustments, as may be
needed to cause each Lender to hold its Commitment Percentage of the Advances
hereunder (other than Bid Loans made by such Lender). Notwithstanding the
preceding provisions of this Section 2.3(e) or any other provision of this
Agreement, no Lender shall be required to so purchase such participations to
the extent that such purchase would cause such Lender's share of the aggregate
unpaid principal amount of all Loans (other than Bid Loans) then outstanding
under this Agreement to exceed its Commitment hereunder.
2.4 Discount Advances.
(a) Funding of Discount Loans. Subject to the terms and
conditions herein (including the Lending Sublimits) and the terms and
conditions of any Balance Bank Agreement, the Company may request a Discount
Advance from any Balance Bank; provided that Discount Advances shall be made
only on the tenth day of each calendar month or, if such tenth day is not a
Business Day, on the next succeeding Business Day thereafter.
(b) Discounted Advance. Each Discount Loan made available
hereunder shall not bear interest but shall instead be funded to the Company at
a discount ("Balance Bank Discount") from the principal amount repayable by the
Company at the end of the applicable Discount Loan Period (the "Face Amount")
calculated to yield to the Balance Bank, when the Face Amount is repaid in full
at the end of the applicable Discount Loan Period, a per annum return on the
amount advanced equal to the Discount Rate for the applicable Discount Loan
Period. The full Face Amount of each Discount Advance shall then be repaid by
the Company at the expiration of the applicable Discount Loan Period.
Accordingly, each Discount Advance shall bear no interest prior to the
expiration of the applicable Discount Loan Period. The amount of the Discount
Advance actually disbursed to the Company on the Advance Date therefor (which
amount shall necessarily be less than the Face Amount) shall be equal to the
amount requested by the Company in the Advance Notice requesting such Discount
Advance, and the Face Amount shall be determined by the Agent based on the
Balance Bank Discount. From and after the expiration of such Discount Loan
Period, each Discount Loan constituting a portion of such Discount Advance not
repaid shall bear interest on its Face Amount at the rate set forth in Section
2.7.
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(c) Balance Bank Agreement. Discount Advances are based upon
the expectation that the Company will maintain average daily qualifying
balances with the applicable Balance Bank during the applicable Discount Loan
Period. The Agent will collect and disburse the Discount Advances, but shall
not be obligated to confirm any matters with respect to balances maintained
with Balance Banks or to collect any fees or amounts charged by Balance Banks
with regard to such balances. Each Balance Bank shall with the Company's
agreement impose its own requirements upon the Company in dealing with
deviations in actual balances from projected balances. All such matters shall
be governed by separate Balance Bank Agreements between each such Balance Bank
and the Company, and the Agent shall have no responsibility therefor. No
Discount Advance shall be available from a particular Balance Bank until (i)
the Company and such Balance Bank have executed and delivered a Balance Bank
Agreement and so advised the Agent in writing, and (ii) in the case of a
Non-Lender Balance Bank, such Non-Lender Balance Bank shall have executed
either this Agreement or a Non-Lender Balance Bank Supplement in the form of
Exhibit I hereto agreeing to be bound by the terms of this Section 2.4.
(d) Ratable Purchase by All Lenders. A portion of each
Discount Advance (or, in the case of Non-Lender Balance Banks, the entire
Discount Advance made in accordance with the terms of this Agreement), shall be
sold simultaneously with the funding by the Balance Bank to the other Lenders
(each a "Purchasing Lender") on a pro rata basis in accordance with each such
Lender's Adjusted Commitment Percentage. Each Purchasing Lender hereby agrees
to purchase and acquire, prior to funding, for cash at the Purchase Price and
without recourse to the Balance Bank, its Adjusted Commitment Percentage share
of such Discount Advance (as to each Purchasing Lender, such amount shall be a
Discount Loan by such Lender). The purchase price ("Purchase Price") payable
by each Purchasing Lender shall be calculated to yield such Lender upon payment
at the end of the applicable Discount Loan Period of its Discount Loan a per
annum return on the Purchase Price equal to the Eurodollar Rate which would
have been applicable for a one month Eurodollar Interest Period ending on the
same date as such Discount Loan Period. Each Balance Bank hereby irrevocably
agrees to sell and assign, without recourse, such portion of every Discount
Advance made by such Balance Bank (or, in the case of Non-Lender Balance Banks,
the entire amount of each such Discount Advance) to each Purchasing Lender at
the applicable Purchase Price. Each Balance Bank (other than Non-Lender
Balance Banks) shall retain its Adjusted Commitment Percentage share of the
Face Amount of each Discount Advance, which shall constitute a Discount Loan
owing to the Balance Bank.
(e) Minimum Amounts; Funding. Each Discount Advance shall be
requested by the Company in accordance with Section 2.9. On the Advance Date
for each such Discount Advance, subject to
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the other provisions hereof and upon receipt by the Agent for the account of
the Balance Bank from each of the Purchasing Lenders of the aggregate Purchase
Price required to be made available by such Lenders, the Balance Bank will make
the full Discount Advance available to the Agent for the account of the Company
in the manner specified in Section 2.11. On the Advance Date for each such
Discount Advance, each Purchasing Lender will make available to the Agent for
the account of the Balance Bank in immediately available funds an amount equal
to the Purchase Price for the share of such Discount Advance being purchased by
such Lender from the Balance Bank.
(f) Consent to Assignment. The Company hereby acknowledges and
consents to the assignment of Discount Loans by each Balance Bank to the other
Lenders, as contemplated by this Section 2.4. The Company and the Agent shall
treat each Purchasing Lender with respect to its share of each Discount Advance
as if such share of such Discount Advance had originally been made by such
Purchasing Lender directly to the Company as a Discount Loan.
(g) Discount Notes. The Discount Loans owing to each Lender
shall be evidenced by a single master promissory note of the Company in the
full amount of such Lender's Commitment, substantially in the form of Exhibit
E-2 (a "Discount Note") executed and delivered prior to the initial Discount
Advance, payable to the order of such Lender and representing from time to time
the obligation of the Company to pay the aggregate Face Amount of all Discount
Loans then owed to such Lender.
2.5 Swingline Advances.
(a) In General. Subject to the terms and conditions
herein, the Company and each Borrowing Subsidiary may request Swingline
Advances from the Swingline Lender on a non-pro rata basis, and such Swingline
Advance shall be funded to the Company or a Borrowing Subsidiary, as
applicable, by the Swingline Lender on the Advance Date therefor. As set forth
in, but subject to the provisions of, Sections 2.3(d) and (e), Swingline
Advances shall be reallocated among the Lenders (i) automatically after the
occurrence of an Event of Default described in Section 10.1(k), (ii) upon the
request of any Lender during the continuance of any other Event of Default, and
(iii) upon the election of the Swingline Lender made at any time.
(b) Swingline Buydown Advances. Swingline Buydown Advances
are based upon the expectation that the Company will maintain average daily
qualifying balances with the Swingline Lender while any Swingline Buydown
Advance is outstanding. The Swingline Lender shall with the Company's
agreement impose its own requirements upon the Company in dealing with
deviations in actual balances from projected balances. All such matters shall
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be governed by a Balance Bank Agreement between the Swingline Lender and the
Company.
(c) Swingline Advances to Pay Amounts Due to Swingline Lender.
If any amounts are advanced by the Swingline Lender to cover checks or wire
transfers from Company or Borrowing Subsidiary accounts maintained with the
Swingline Lender when there are insufficient funds in such accounts to cover
the applicable check or wire transfer and sufficient funds are not deposited in
the applicable account before the close of business on the day on which the
applicable check or wire transfer request is honored, then the Company shall be
deemed to have requested, and the Swingline Lender may (but shall not be
obligated to) elect to make, a Swingline Advance at the Alternate Base Rate to
pay such overdraft amount (even if such a Swingline Advance would cause the
aggregate amount of all outstanding Swingline Advances to exceed the Swingline
Commitment); provided however, that (i) the Swingline Lender shall not make any
such Swingline Advance to the extent such Advance would cause the Credit
Requirement to exceed the Aggregate Borrowing Base, and (ii) the reallocations
of any such Swingline Advances among the Lenders shall be as set forth in, but
subject to the provisions of, Sections 2.3(d) and (e).
2.6 Bid Loans and Approved GNMA Letters of Credit.
(a) Special Bids. The Company may, at any time, solicit a bid
from any Lender on a non-pro rata basis for a loan (a "Bid Loan") in such
amount and accruing interest at such rate as may be bid to the Company by such
Lender for interest periods of 1 to 45 days. Such Lender, in its sole
discretion, may make such a bid for a Bid Loan. The Company will be under no
obligation to accept any such bid, but may accept any one, or more than one, of
such bids. A Lender whose bid has been accepted by the Company shall be
referred to as a "Bid Lender". The Company and each Bid Lender shall execute
and submit a Bid Loan Notice in the form of Exhibit G hereto to the Agent
concurrently with the Advance Notice for such Bid Loan.
(b) Approved GNMA Letters of Credit. The Company may, at any
time, request that any Lender issue a letter of credit in favor of GNMA as a
result of the failure by the Company or any Borrowing Subsidiary to satisfy all
document submission requirements of GNMA in connection with the certification
or re-certification by GNMA of a pool of Mortgage Loans. If a Lender agrees to
issue such a letter of credit and desires that such letter of credit be ratably
secured (along with the other Credit Indebtedness) by the Collateral, such
Lender shall submit to the Agent a copy of the proposed letter of credit and
copies of any related reimbursement agreement or other related documentation.
If (i) the Agent approves such letter of credit and other documentation (which
approval shall not be unreasonably
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withheld), and (ii) the letter of credit expires by its terms on a date which
is prior to the Termination Date, then such letter of credit shall constitute
an Approved GNMA Letter of Credit and such Lender shall constitute an "Issuing
Lender". No such letter of credit shall be considered an Approved GNMA Letter
of Credit if its inclusion as an Approved GNMA Letter of Credit would, at the
time of issuance, cause any Lending Sublimit to be exceeded. The Company and
the applicable Issuing Lender shall promptly notify the Agent upon (i) the
expiration, cancellation or honoring of any Approved GNMA Letter of Credit, and
(ii) the payment by the Company or the applicable Borrowing Subsidiary of any
amounts due to the Issuing Lender in respect of any Approved GNMA Letter of
Credit Obligations. No Issuing Lender nor the Company shall amend or renew any
Approved GNMA Letter of Credit or any related reimbursement agreement or other
related document without the prior written consent of the Agent (which consent
shall not be unreasonably withheld).
(c) Additional Commitment. Each Bid Lender's commitment under
an accepted special bid and each Issuing Lender's issuance of an Approved GNMA
Letter of Credit shall be in addition to such Lender's Commitment and shall not
reduce such Lender's obligation to continue to fund its Adjusted Commitment
Percentage of any other Advance.
(d) Notes. Each Bid Loan owing to each Bid Lender shall not be
evidenced by the Notes executed and delivered in the form of Exhibit E-1 and
E-2, but shall instead be evidenced by an additional promissory note or notes
in a form mutually agreed to by the Company and such Bid Lender. The Agent
shall have no responsibility to confirm the existence or substance of such
additional promissory notes.
2.7 Rate after Maturity.
Any Advance not paid at maturity, whether by acceleration or
otherwise, and any other amount not paid when due hereunder shall bear interest
until paid in full at a rate per annum equal to the Alternate Base Rate plus
two percent (2.0%) per annum; provided, however, that such interest rate after
maturity shall in no event be less than the interest rate that was in effect
with respect to such Advance prior to maturity.
2.8 Interest Payment Dates.
Interest shall accrue at the relevant rate for each day from the
day on which the proceeds of such Advance are made available to the Company or
a Borrowing Subsidiary. Interest accrued on each Advance other than a
Eurodollar Advance or a Discount Loan (which does not accrue interest prior to
maturity) shall be payable on the first to occur of (i) the first Business Day
of the immediately following calendar month, commencing with
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the first such date to occur after the date hereof, or (ii) at maturity,
whether due to acceleration or otherwise. Interest accrued on each Eurodollar
Advance shall be payable on the first to occur of (i) the last day of each
Eurodollar Interest Period, or (ii) any date on which any such Eurodollar
Advance is prepaid, whether due to acceleration or otherwise, or (iii) the
Termination Date. Interest and Fees shall be calculated for actual days
elapsed on the basis of a 360-day year. Interest shall be payable for the day
an Advance is made. Interest shall not be payable for the day of any payment
on the amount paid if payment is received prior to noon (Chicago time) at the
place of payment. If any payment of principal of or interest on an Advance
shall become due on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day and, in the case of a principal
payment, such extension of time shall be included in computing interest in
connection with such payment.
2.9 Method of Selecting Rate Options and Interest Periods.
Subject to the terms hereof, for each Advance hereunder the
Company (or a Borrowing Subsidiary or the Company on behalf of a Borrowing
Subsidiary in the case of Swingline Advances to be borrowed by a Borrowing
Subsidiary) shall give the Agent irrevocable notice (an "Advance Notice") not
later than (i) 10:00 a.m. (Chicago time) on the proposed Advance Date for each
Bid Loan or Federal Funds Advance, (ii) noon (Chicago time) on the proposed
Advance Date for each Alternate Base Rate Advance (other than Swingline
Advances), (iii) 3:00 p.m. (Chicago time) on the proposed Advance Date for
each Overnight Transaction Advance, (iv) 4:00 p.m. (Chicago time) on the
proposed Advance Date for each Swingline Advance which is an Alternate Base
Rate Advance or a Swingline Buydown Advance, and (v) 11:00 a.m. (Chicago time)
three (3) Business Days before the Advance Date for each Eurodollar Advance and
each Discount Advance, specifying:
(a) the Advance Date, which shall be a Business Day, of
such Advance,
(b) the aggregate amount of such Advance, which shall be in
an amount equal to $5,000,000 or a whole multiple of
$1,000,000 in excess thereof, except that (i) Swingline
Advances other than Overnight Transaction Advances
shall have no minimum amount and need not be in
multiples of $1,000,000, and (ii) Overnight Transaction
Advances shall be in a minimum amount equal to $100,000
but need not be in multiples of $1,000,000.
(c) the type of such Advance,
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(d) the interest period applicable to such Advance, if
applicable,
(e) if such Advance is a Discount Advance, the Balance Bank
or Balance Banks for such Advance and, if applicable,
the portion of such Discount Advance allocated to each
such Balance Bank,
(f) if such Advance is a Bid Loan, the Bid Lender for such
Bid Loan,
(g) if such Advance is a Swingline Advance, which entity
(i.e. the Company or a particular Borrowing Subsidiary)
is the borrower of such Advance, and
(h) what portion, if any, of such Advance is to be used
solely for the purpose of repaying maturing commercial
paper.
Notwithstanding the foregoing, the Agent may also agree, in its sole
discretion, to accept (A) an Advance Notice requesting a Swingline Advance
which is an Alternate Base Rate Advance or Swingline Buydown Advance or (B) a
Bid Loan Notice at any time up until the close of the Agent's business day.
Delivery of an Advance Notice, whether by telephone or in writing, shall
constitute a representation and warranty that, after giving effect to the
amount of the Advance being requested, (i) the then-current Aggregate Borrowing
Base is equal to or greater than the Credit Requirement, and (ii) no Lending
Sublimit shall be exceeded. Changes in the rate of interest on that portion of
any Advance maintained as an Alternate Base Rate Advance will take effect
simultaneously with each change in the Alternate Base Rate. The interest rate
on each Overnight Transaction Advance or Federal Funds Advance shall be
recalculated daily for each day that such Overnight Transaction Advance or
Federal Funds Advance is continued under Section 2.12(ii). Each Eurodollar
Advance shall bear interest for each day from and including the first day of
the Eurodollar Interest Period applicable thereto to (but not including) the
last day of such Eurodollar Interest Period at the interest rate determined as
applicable to such Advance. The Company shall select Eurodollar Interest
Periods and Discount Loan Periods with respect to Eurodollar Advances and
Discount Loans so that it is not necessary to pay a Eurodollar Advance or
Discount Loan prior to the last day of the applicable Eurodollar Interest
Period or Discount Loan Period, as the case may be, in order to make the
mandatory repayment on the Termination Date. Any change in the Applicable
Margin shall be effective immediately with respect to the interest rates on any
Loans outstanding other than Discount Loans. Changes in the Applicable Margin
relating to Discount Loans shall not affect Discount Loans outstanding at the
time of any such change but shall be effective
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with respect to any Discount Loans made after the date of any such change.
2.10 Maximum Number of Eurodollar Loans.
The Company may not request an additional Eurodollar Advance if
the making of such Advance would result in any Lender holding Eurodollar Loans
having more than six (6) different Eurodollar Interest Periods at any given
time.
2.11 Funding Procedures.
Not later than 2:00 p.m. (Chicago time) on each Advance Date,
each Lender shall make available its Loan or Loans (including Bid Loans), in
funds immediately available in Chicago to the Agent at its address specified
pursuant to Article XII, provided that Swingline Advances may be funded at any
time up to (i) the close of the Swingline Lender's business day so long as
First Chicago is both the Agent and the sole Swingline Lender, or (ii) 4:00
p.m. (Chicago time) if First Chicago is not both the Agent and the sole
Swingline Lender. The Agent will make the funds so received from the Lenders
available to the Company or a Borrowing Subsidiary, as applicable, at the
Agent's aforesaid address, subject to the provisions of Article V.
Notwithstanding the foregoing, the Agent may also agree, in its sole
discretion, to accept delivery of Bid Loan funds and to make such funds
available to the Company at any time up to the close of the Agent's business
day.
2.12 Conversion and Continuation.
(i) The Company may elect from time to time, subject to
the provisions of Sections 2.3(a), 2.9 and 2.10 and the Lending
Sublimits to convert all or any part of any Advance (other than a Bid
Loan or Discount Advance) into a different type of Advance, provided
that any conversion of any such Eurodollar Advance shall be made on, and
only on, the last day of the applicable Eurodollar Interest Period.
Discount Advances and Bid Loans are payable on the last day of the
applicable Discount Loan Period or Bid Loan period and may be repaid out
of new Advances hereunder but may not be converted directly to a
different type of Advance.
(ii) Alternate Base Rate Advances shall continue as the
same type of Advances unless and until such Advances are converted into
a different form of Advance in accordance with the terms hereof.
Federal Funds Advances shall continue as Federal Funds Advances unless
and until (a) such Advances are converted into a different form of
Advance in accordance with the terms hereof or (b) the Company has paid
any such Federal Funds Advance prior to 10:00 a.m. (Chicago time) on any
Business Day or given the Agent written notice before 10:00
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a.m. (Chicago time) on any Business Day that such Federal Funds Advance
will be repaid on such Business Day. Overnight Transaction Advances and
Swingline Buydown Advances shall continue as Overnight Transaction
Advances and Swingline Buydown Advances, respectively, unless and until
(a) such Advances are converted into a different form of Advance in
accordance with the terms hereof or (b) the Company or a Borrowing
Subsidiary, as applicable, has paid any such Overnight Transaction
Advance or Swingline Buydown Advance prior to 3:00 p.m. (Chicago time)
on any Business Day or given the Agent written notice before 3:00 p.m.
(Chicago time) on any Business Day that such Overnight Transaction
Advance or Swingline Buydown Advance will be repaid on such Business
Day. If the Company so notifies the Agent that it will be paying a
Federal Funds Advance, Overnight Transaction Advance or Swingline
Buydown Advance on any Business Day and fails to do so, such Advance
shall be converted into an Alternate Base Rate Advance. Eurodollar
Advances shall continue until the end of the then-applicable Eurodollar
Interest Period therefor, at which time each such Advance shall be
automatically converted to a Federal Funds Advance, unless the Company
shall have given the Agent notice in accordance with Section 2.12(iii)
requesting that, at the end of such Eurodollar Interest Period, such
Advance continue as a Eurodollar Advance for a specified Eurodollar
Interest Period or be converted to a different type of Advance.
(iii) The Company shall give the Agent irrevocable notice
(a "Conversion/Continuation Notice") of each conversion of an Alternate
Base Rate Advance, a Federal Funds Advance, a Swingline Buydown Advance
or an Overnight Transaction Advance or conversion or continuation of a
Eurodollar Advance not later than (i) 10:00 a.m. (Chicago time) on the
date of the requested conversion or continuation, in the case of a
conversion into a Federal Funds Advance, Alternate Base Rate Advance,
Overnight Transaction Advance or Swingline Buydown Advance, or (ii)
11:00 a.m. (Chicago time) at least three Business Days prior to the date
of the requested conversion into or continuation of a Eurodollar Loan,
specifying: (1) the requested date (which shall be a Business Day) of
such conversion or continuation; (2) the amount and type of the Advance
to be converted or continued; (3) the amount and type(s) of Advance(s)
into which such Advance is to be converted or continued; and (4) in the
case of a conversion into or continuation of a Eurodollar Advance, the
duration of the Eurodollar Interest Period applicable thereto.
2.13 Optional Principal Payments.
All or any portion of Alternate Base Rate Advances, Overnight
Transaction Advances, Swingline Buydown Advances and
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Federal Funds Advances may be paid without penalty or premium on any Business
Day provided that such repayments are made by (i) 10:00 a.m. (Chicago time)
with respect to Federal Funds Advances, (ii) noon (Chicago time) with respect
to Alternate Base Rate Advances, or (iii) 3:00 p.m. (Chicago time) with respect
to Overnight Transaction Advances and Swingline Buydown Advances. A Eurodollar
Advance or Discount Loan may not be paid prior to the last day of the
applicable Eurodollar Interest Period or Discount Loan Period, as the case may
be; provided, however, that the Company shall compensate the Lenders for any
funding losses and/or loss of profits incurred as a result of any voluntary
prepayment (if accepted) or involuntary prepayment of any such Advance prior to
the last day of the applicable Eurodollar Interest Period or Discount Loan
Period. Bid Loans may not be prepaid unless the applicable Bid Lender has
agreed otherwise and notified the Agent of such agreement. All optional
principal payments shall be applied to the type of Advance designated by the
Company when making such payment, provided that any payments received during
the continuance of an Event of Default shall be applied on a pro rata basis to
all Advances then outstanding (with the portion applicable to Eurodollar Loans
or Discount Loans to be applied to such Loans either immediately or at the end
of the relevant Eurodollar Interest Period or Discount Loan Period at the
option of the Company).
2.14 Required Principal Payments.
(a) Payments Related to Aggregate Borrowing Base. On any
date that the Credit Requirement is in excess of the then-current Aggregate
Borrowing Base, the Company shall make a mandatory payment to the Agent for the
benefit of the Lenders in the amount of such excess. Such payment shall be
allocated pro rata among the Lenders in accordance with the amounts of their
outstanding Loans hereunder.
(b) Final Payment on Termination Date. The outstanding
principal balance of all Advances not repaid earlier, together with any accrued
and unpaid interest and Fees, unless required to be paid earlier pursuant to
the terms hereof, shall be due and payable on the Termination Date.
2.15 Method of Payment.
All payments of principal, interest, and Fees hereunder
(including any payments related to Bid Loans) shall be made in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Company on the date due by 1:00 p.m. (Chicago time)
with respect to all Advances other than Swingline Advances and by 3:00 p.m.
(Chicago time) with respect to Swingline Advances. Notwithstanding the
foregoing, if the Company or a Borrowing
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Subsidiary fails to repay or give the Agent notice of repayment of a Federal
Funds Advance before 10:00 a.m. (Chicago time) or an Overnight Transaction
Advance before 3:00 p.m. (Chicago time) on the Business Day that the Company or
the Borrowing Subsidiary intends to repay such Advance, any payment of such
Advance received by the Agent on such Business Day after the time required for
payment or notice shall be deemed to have been received by the Agent at the
opening of business on the following Business Day. Each payment delivered to
the Agent for the account of any Lender shall be delivered promptly by the
Agent to such Lender in the same type of funds which the Agent received at its
address specified pursuant to Article XII or at any Lending Installation
specified in a notice received by the Agent from such Lender. The Agent is
hereby authorized to charge the account of the Company maintained with First
Chicago for each payment of principal, interest and fees as it becomes due
hereunder.
2.16 Notes; Telephonic Notices.
Each Lender is hereby authorized to record the principal amount
of each of its Loans and each repayment on the schedules attached to its Notes
provided, however, that the failure to so record or any error in such recording
shall not affect the Company's or any Borrowing Subsidiary's obligations
hereunder or under such Notes. The Company and each Borrowing Subsidiary each
hereby authorizes the Lenders and the Agent to extend, continue or convert
Advances, effect Rate Option selections and to transfer funds to or for the
account of the Company or the applicable Borrowing Subsidiary based on
telephonic notices (confirmed promptly thereafter by facsimile) made by any
person or persons the Agent or any Lender in good faith believes to be acting
on behalf of the Company or the applicable Borrowing Subsidiary. The Company
and each Borrowing Subsidiary each agrees to deliver promptly to the Agent a
written confirmation, if such confirmation is requested by the Agent or any
Lender, of each telephonic notice signed by an officer of the Company or the
Borrowing Subsidiary, as applicable, authorized in writing to do so. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall
govern absent manifest error.
2.17 General Provisions as to Payments.
(a) The Company (or the applicable Borrowing Subsidiary
with respect to Loans borrowed by a Borrowing Subsidiary) shall make
each payment of principal or interest on the Loans and shall pay all
Fees not later than the times stated in Section 2.15. The Agent shall
promptly distribute to each Lender its share of each payment of
principal or interest or fees received by the Agent for the account of
such Lender.
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(b) Amounts paid to or held by the Agent for the payment of
Loans shall not be deemed paid to a Lender until received by such Lender
by the later of 3:00 p.m. (Chicago time) or the close of business on
such date. If amounts are received by the Agent from the Company or a
Borrowing Subsidiary prior to the applicable times stated in Section
2.15 and the Agent fails to make a Lender's portion of such amount
available to such Lender by close of business on such date, neither the
Company nor such Borrowing Subsidiary shall have any obligation to pay
any further interest on such payment and the Agent shall pay to such
Lender interest on such payment to the date paid to such Lender by the
Agent at a rate per annum equal to the then-current Published Federal
Funds Effective Rate.
2.18 Notification of Advances, Interest Rates and Prepayments.
Promptly after receipt thereof, the Agent will notify each
Lender by facsimile of the contents of each Advance Notice,
Conversion/Continuation Notice, and repayment notice received by it hereunder.
Not later than one Business Day prior to the Advance Date for each Eurodollar
Advance or Discount Loan, the Agent will notify by facsimile each Lender and
the Company of the interest rate applicable to each Eurodollar Advance, the
Face Amount of each Discount Advance and the Purchase Price to be paid by each
Lender for its share of such Discount Advance promptly upon determination of
such interest rate, Face Amount and Purchase Price. When any Advances are
outstanding or have been requested at the Federal Funds Rate or the Alternate
Base Rate the Agent will give each Lender and the Company prompt notice by
facsimile of each change in such rate.
2.19 Lending Installations.
Each Lender may book its Loans at any Lending Installation
selected by such Lender and may change its Lending Installation from time to
time. All terms of this Agreement shall apply to any such Lending Installation
and the Notes shall be deemed held by each Lender for the benefit of such
Lending Installation. Each Lender may, by facsimile or written notice to the
Agent and the Company, designate a Lending Installation through which Loans
will be made by it and for whose account Loan payments are to be made.
Notwithstanding the foregoing, no Lender may transfer its Loans to another
Lending Installation if such transfer would cause the Company to incur
additional indemnification costs under Section 3.1 hereof, and if after a
Lender transfers its Loans to another Lending Installation the Company incurs
additional indemnification costs under Section 3.1 hereof as a result of such
transfer, such Loans shall be transferred back to the original Lending
Installation.
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2.20 Non-Receipt of Funds by Agent.
(a) Unless the Company, a Borrowing Subsidiary or a Lender, as
the case may be, notifies the Agent prior to the close of business on the
Business Day immediately preceding the date on which it is required to make
payment to the Agent of (i) in the case of a Lender, the proceeds of a Loan or
(ii) in the case of the Company or a Borrowing Subsidiary, a payment of
principal, interest or fees to the Agent for the account of the Lenders, that
it does not intend to make such payment, the Agent may assume that such payment
has been made or will be made on the date required. The Agent may, but shall
not be obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. If such Lender, the Company or the
Borrowing Subsidiary, as the case may be, has not in fact made or does not make
when due such payment to the Agent, the recipient of such payment shall, on
demand by the Agent, repay to the Agent the amount so made available together
with interest thereon in respect of each day during the period commencing on
the date such amount was so made available by the Agent until the date the
Agent recovers such amount at a rate per annum equal to (i) in the case of
repayment by a Lender, the Published Federal Funds Effective Rate for such day
or (ii) in the case of repayment by the Company or a Borrowing Subsidiary, the
interest rate applicable to the relevant Loan. If a Lender fails to pay the
Agent as provided in the preceding sentence, the Company shall pay such amount
to the Agent upon demand plus interest (at the rate applicable to the
applicable Advance) to the date of repayment (but not including such date if
payment is received prior to the deadlines established in Section 2.15).
(b) Neither the Agent nor any Lender shall incur any
liability to the Company or any Borrowing Subsidiary in acting upon any
telephonic notice referred to in this Agreement which the Agent or such Lender
believes in good faith to have been given by a duly authorized officer or other
person authorized to borrow on behalf of Company or the Borrowing Subsidiary or
for otherwise acting in good faith under this Section 2.20. Upon the funding
of Loans by the Lenders in accordance with this Agreement (including
satisfaction of all conditions thereto) pursuant to any telephonic notice (with
confirmation promptly thereafter by facsimile), the Company (or the applicable
Borrowing Subsidiary with respect to Advances borrowed by a Borrowing
Subsidiary) shall have effected a borrowing hereunder. An Advance Notice (or
telephonic notice in lieu thereof) shall be irrevocable and the Company or the
Borrowing Subsidiary, as applicable, shall be bound to effect a borrowing in
accordance therewith.
(c) If the Agent fails to make any Loan funds received from
a Lender available to the Company for any reason and does not return such Loan
funds to such Lender on the same Business Day such funds were received by the
Agent, the Agent shall pay to
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such Lender, upon demand, interest from the date such funds are received by the
Agent from such Lender, provided such funds were received prior to the
deadlines for receipt set forth in Section 2.11 until the date such
corresponding amount is either made available by the Agent to the Company
within the time limits of Section 2.11 or so returned to such Lender, at the
rate per annum equal to the then-current Published Federal Funds Effective Rate
and the Company shall have no responsibility to such Lender with respect to
such funds until they are so made available to the Company by the Agent.
(d) Nothing in this Section 2.20 shall relieve any Lender
from its obligation to fund its share of any Advance, prejudice any rights the
Company may have against any Lender as a result of such Lender's failure to
make the amount of its Loan available to the Company or obligate any Lender to
fund any other Lender's share of any Advance.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1 Yield Protection.
If, after the date of this Agreement, the adoption of any law or
any governmental or quasi-governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any change in any
existing or future law, rule, regulation, policy, guideline or directive or the
interpretation or administration thereof, or the compliance of any Lender
therewith,
(i) subjects any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding on or from payments
due from the Company or any Borrowing Subsidiary, or changes the basis
of taxation of payments to any Lender in respect of its Loans or other
amounts due it hereunder (excluding any tax imposed with respect to the
overall net income of any Lender or its Lending Installation, any
franchise taxes imposed on any such Lender or Lending Installation to
the extent such franchise taxes are in lieu of net income taxes), or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation (other
than reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Advances or Discount Loans), or
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(iii) affects the amount of capital required or expected to
be maintained by any Lender or Lending Installation or any corporation
controlling any Lender or Lending Installation and such Lender
determines the amount of capital required is increased by or based upon
the existence of this Agreement or its obligation to make or maintain
Loans hereunder or of commitments of this type, or
(iv) imposes any other condition which requires any Lender
or any applicable Lending Installation to make any payment calculated by
reference to the amount of loans held or interest received by it in an
amount deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender
or Lending Installation of making, renewing or maintaining its Commitment or
any Loan or to reduce any amount receivable in respect thereof or to reduce the
rate of return on the capital of such Lender or Lending Installation or any
Person controlling such Lender or Lending Installation as it relates to credit
facilities in the nature of that evidenced by this Agreement, then the Company
shall pay such Lender that portion of such increased expense incurred
(including, in the case of Section 3.1(iii), any reduction in the rate of
return on capital to an amount below that which it could have achieved but for
such law, rule, regulation, policy, guideline or directive and after taking
into account such Lender's policies as to capital adequacy) or reduction in an
amount received which such Lender determines is attributable to making, funding
and maintaining its Loans and its Commitment to the extent such expenses or
reductions arise from and after the date which is 90 days before receipt by the
Company of demand for payment by such Lender. Notwithstanding the foregoing,
if any of the foregoing circumstances otherwise giving rise to the yield
protection provisions of this Section are imposed solely against a single
Lender as a result of circumstances or conditions which apply solely to that
Lender and not generally to lenders domiciled in the jurisdiction of such
Lender's domicile, then the yield protection provisions of this Section shall
not apply with respect to such circumstances.
3.2 Availability of Rate Options.
If any Lender determines that maintenance of any of its
Eurodollar Loans or Discount Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation or directive, whether or not
having the force of law, the Agent shall suspend the availability of the
affected Rate Option and require any Eurodollar Advances or Discount Loans
outstanding at the affected Rate Option to be repaid immediately upon demand;
or if the Required Lenders determine that deposits of a type or maturity
appropriate to match fund Eurodollar Advances or
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Discount Loans are not available, the Agent shall suspend the availability of
the affected Rate Option with respect to any such Loans or Advances made after
the date of any such determination. If the Required Lenders determine that the
Eurodollar Rate or the Discount Rate does not accurately reflect the cost of
making a Eurodollar Advance or Discount Loan at such Rate Option, then, if for
any reason whatsoever the provisions of Section 3.1 are inapplicable, the Agent
shall suspend the availability of the affected Rate Option with respect to any
Eurodollar Advance or Discount Loan made after the date of any such
determination.
3.3 Funding Indemnification.
If any payment of a Eurodollar Advance or Discount Loan occurs
on a date which is not the last day of the applicable Eurodollar Interest
Period or Discount Loan Period, whether because of acceleration, prepayment or
otherwise, or if a Eurodollar Advance, Overnight Transaction Advance, Federal
Funds Advance, Swingline Buydown Advance or Discount Loan is not made,
continued or established by conversion on the date specified by the Company or
a Borrowing Subsidiary for any reason other than default by the Lenders, the
Company will indemnify each Lender for any loss or cost incurred by it
resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain such Eurodollar
Advance or Discount Loan.
3.4 Lender Statements; Survival of Indemnity.
To the extent reasonably possible, each Lender shall designate
an alternate Lending Installation with respect to its Eurodollar Advances and
Discount Loans to reduce any liability of the Company to such Lender under
Section 3.1 or to avoid the unavailability of a Rate Option under Section 3.2,
so long as such designation is not to the economic detriment of such Lender and
does not impose any increased regulatory burdens on such Lender. Each Lender
shall deliver to the Agent and the Company a written statement of such Lender
as to the amount due, if any, under Section 3.1 or 3.3. Such written statement
shall set forth in reasonable detail the calculations upon which such Lender
determined such amount and shall be final, conclusive and binding on the
Company in the absence of manifest error. Determination of amounts payable
under such Sections in connection with a Eurodollar Advance or Discount Loan
shall be calculated as though each Lender funded its related Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit
used as a reference in determining the Eurodollar Rate or Discount Rate
applicable to such Loan, whether in fact that is the case or not. The amount
specified in the written statement shall be payable within 15 days after
receipt by the Company of the written statement. The obligations of the
Company under Sections 3.1 and 3.3 shall survive payment of the Obligations and
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termination of this Agreement. In the event any Lender is affected by any of
the events described in Section 3.1 or 3.2 the Company shall have the right, if
no Default then exists, to repay in full all Credit Indebtedness owed to such
Lender provided that the Company has, with the approval of the Agent (not to be
unreasonably withheld), arranged to substitute a replacement lender for the
full amount of such Lender's Commitment.
3.5 Lender Tax Agreement.
Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i) deliver to the Company and the Agent (A) two duly
completed copies of the United States Internal Revenue Service Form 1001
or 4224, or successor applicable form, as the case may be, and (B) an
Internal Revenue Service Form W-8 or W-9, or successor applicable form,
as the case may be;
(ii) deliver to the Company and the Agent two further copies
of any such form or certification on or before the date that any such
form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Company; and
(iii) obtain such extension of time for filing and complete
such forms or certifications as may reasonably be requested by the
Company or the Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms or any
certifications required hereby inapplicable or which would prevent such Lender
from duly completing and delivering any such form or making such certification
with respect to it and such Lender so advises the Company and the Agent. Such
Lender shall certify (i) in the case of Form 1001 or 4224 delivered in
accordance with this Section 3.5, that it is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes and (ii) in the case of a Form W-8 or W-9, that it is entitled to
an exemption from United States backup withholding tax. Each Person that shall
become a Lender or a Participant pursuant to Article XI shall, upon the
effectiveness of the related transfer, be required to provide all of the forms
and statements required pursuant to this Section, provided that in the case of
a Participant such Participant shall also furnish all such required forms and
statements to the Lender from which the related participation shall have been
purchased as well as to the Company and the Agent.
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ARTICLE IV
COLLATERAL AND BORROWING BASE
4.1 Eligible Collateral - Pledged Mortgages.
(a) "Eligible Mortgage Loan" means a Pledged Mortgage
which:
(i) has been originated less than 360 days prior to inclusion
in the Aggregate Borrowing Base;
(ii) is a Conforming Mortgage Loan, a Jumbo Mortgage Loan or a
Nonconforming Mortgage Loan;
(iii) has been included in the Aggregate Borrowing Base for
180 days or less after the Pledge Date thereof;
(iv) is not financed under an agreement to repurchase or
otherwise pledged to secure any Debt other than the Credit Indebtedness
and the Ratable Medium-Term Notes pursuant to the Security Agreement;
(v) has been duly executed and delivered by the parties
thereto at a closing;
(vi) is valid and enforceable in accordance with its terms,
without defense or offset;
(vii) has not been modified or amended and has not had any
requirements thereof waived except as permitted by Federal Agency
requirements;
(viii) is subject to and complies with the delivery
requirements of an Approved Investor Commitment to purchase such Pledged
Mortgage;
(ix) has been correctly described in the Collateral
Transmittal submitted to the Collateral Agent in respect of such Pledged
Mortgage; and
(x) has been fully funded to the mortgagor or to an
escrow or closing agent by wire transfer, transmittal through the
"Automated Clearing House" or any similar private clearing house for
interbank transfers of funds, cashier's check or a cleared check or
draft;
and as to which the representations and warranties contained in Section 4.7
relating thereto are true and correct as of the Pledge Date of such Mortgage
Loan and as of each day thereafter as if made on each such date.
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(b) "Eligible Delivered Mortgage" means an Eligible
Mortgage Loan as to which:
(i) the Collateral Agent has received and continues to hold
the Required Mortgage Documents and, if requested by the Agent or the
Collateral Agent, the Additional Required Mortgage Documents for such
Pledged Mortgage, other than those documents and instruments which are
in the possession of a Person to whom delivery was made pursuant to a
Bailee Letter or a Company Trust Receipt;
(ii) not more than 45 days have passed after the day on which
the Mortgage Note for such Pledged Mortgage was delivered, pursuant to a
Bailee Letter, to an Approved Investor other than one created under a
government housing program which is not a Federal Agency for examination
and purchase without such Mortgage Note being returned to the Collateral
Agent; and not more than 75 days have passed after the day on which the
Mortgage Note for such Pledged Mortgage was delivered, pursuant to a
Bailee Letter, to an Approved Investor created under a government
housing program which is not a Federal Agency for examination and
purchase without such Mortgage Note being returned to the Collateral
Agent;
(iii) no Approved Investor has paid the purchase price or
delivered the Securities due to the Company on account of such Pledged
Mortgage;
(iv) not more than 15 days have passed after the date on which
any document relating to such Pledged Mortgage was sent, pursuant to a
Company Trust Receipt, to the Company or a Borrowing Subsidiary for
correction of clerical or other non-substantial documentation problems
in preparation of such document without such documentation being
returned to the Collateral Agent properly corrected;
(v) no installment of principal or interest on such Pledged
Mortgage is more than one payment past due; and
(vi) such Mortgage Loan constitutes a first lien on the
premises described therein.
(c) "Eligible AP Mortgage" means an AP Mortgage which is an
Eligible Mortgage Loan and as to which:
(i) the information described on Exhibit 7 to the Security
Agreement regarding such AP Mortgage was contained in a Collateral
Transmittal submitted to the Collateral Agent on the same date as the
applicable AP Notice;
(ii) the proceeds thereof have been funded (or, on the date of
the Advance supported by the applicable AP Notice,
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are being funded) by wire transfer or cashier's check, cleared check or
draft or other form of immediately available funds to the escrow or
closing agent for such AP Mortgage;
(iii) the Pledgor expects such AP Mortgage to close and become
a valid lien securing actual indebtedness by funding to the order of the
mortgagor thereunder;
(iv) not more than ten (10) Business Days have passed since
the delivery of the AP Notice therefor (and if more than five (5)
Business Days have passed since the delivery of such AP Notice, the
Borrowing Base Sublimit set forth in Section 4.6(x) has been satisfied);
(v) neither the Company nor the applicable Borrowing
Subsidiary has delivered to the Collateral Agent any documents which
purport to be Required Mortgage Documents for such AP Mortgage;
(vi) the proceeds thereof have not been returned to the
Company or a Borrowing Subsidiary from the escrow or closing agent for
such Pledged Mortgage;
(vii) neither the Company nor any Borrowing Subsidiary has
learned that such AP Mortgage will not be closed and funded to the order
of the mortgagor; and
(viii) upon recordation such Mortgage Loan will constitute a
first lien on the premises described therein.
4.2 Eligible Collateral - Repurchased Agency Loans and Receivables.
"Eligible Repurchased Agency Loans and Receivables" means
Repurchased Agency Loans and Receivables as to which:
(i) payments are more than 90 days past due when repurchased
by the Company;
(ii) no notice or other indication has been given by FHA or
VA challenging the obligation of FHA or VA to pay the full amount due on
any insurance or guaranty certificate in connection with such Mortgage
Loans (and in the good-faith estimation of the Company, no such
challenge is forthcoming);
(iii) the repurchased Mortgage Loan does not have any
payments more than 720 days past due (unless the borrower of such
repurchased Mortgage Loan filed a voluntary bankruptcy petition or had
an involuntary bankruptcy petition filed against it while the payments
on such Mortgage Loan were past due, in which case such 720 day period
shall be extended to 1080 days);
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(iv) not more than 120 days have passed since the foreclosure
sale or transfer in lieu of foreclosure with respect to the repurchased
Mortgage Loan;
(v) not more than 180 days have passed since the
reinstatement of the repurchased Mortgage Loan; and
(vi) the repurchased Mortgage Loan shall not be a Mortgage
Loan which in the good faith estimation of the Company is deemed to be a
"no bid" candidate under the current VA practice, provided that such
estimation by the Company may take into account the amount of any buy
down of the principal balance of such Mortgage Loan which (i) has
actually been made by the Company, or (ii) is anticipated to be made by
the Company, provided that the amount of any such anticipated buy down
shall be deducted from the Mortgage Collateral Value of such Repurchased
Agency Loan and Receivable for determining the portion of the Aggregate
Borrowing Base attributable to such Repurchased Agency Loans and
Receivables.
4.3 Eligible Collateral - Securities.
"Eligible Pledged Security" means a Pledged Security:
(i) which is covered by an Approved Investor Commitment;
(ii) as to which the Collateral Agent has received such
evidence as may be required under the Security Agreement to confirm the
existence of the security interest in favor of the Collateral Agent for
the benefit of the Lenders in such Pledged Security; and
(iii) which has been included in Collateral for 90 days or
less after the Pledge Date therefor.
4.4 Eligible Collateral - Pledged Servicing.
"Eligible Pledged Servicing" means Pledged Servicing as to
which:
(i) the applicable Servicing Agreement is between the Company
and a Federal Agency;
(ii) the Company has delivered to the Collateral Agent fully
executed copies of an Acknowledgment Agreement related to such Pledged
Servicing (unless the Pledged Servicing is with GNMA, in which case
receipt of an Acknowledgment Agreement related thereto shall be required
only in the event the Agent or the Required Lenders request that such an
Acknowledgment Agreement be obtained);
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(iii) the representations contained in Section 4.8 as to the
applicable Servicing Agreement are true and correct as of the date such
Servicing Agreement becomes Collateral hereunder and as of each day
thereafter as if made on that date;
(iv) the Mortgage Loans covered by the applicable Servicing
Agreement shall be Conforming Mortgage Loans, Jumbo Mortgage Loans or
Nonconforming Mortgage Loans;
(v) the applicable Servicing Agreement is not a Subservicing
Agreement; and
(vi) the applicable Servicing Agreement does not constitute
Recourse Servicing.
4.5 Eligible Collateral - Servicing Sale Receivables.
"Eligible Servicing Sale Receivables" means Pledged Servicing
Sale Receivables as to which:
(i) the Agent and Collateral Agent have received a complete
executed copy of the related purchase agreement and written confirmation
from the Servicing Purchaser as to the amount of such Servicing Sale
Receivable;
(ii) the Servicing Purchaser of the applicable sold Servicing
Agreements either (A) has a long term unsecured debt rating of at least
A- from S&P or A3 from Xxxxx'x, or (B) has been approved by the Required
Lenders;
(iii) the Agent has reasonably determined that the
counterparties to the sold Servicing Agreements have or will consent to
the sale of such Servicing Agreements to the Servicing Purchaser, if
such consent is required;
(iv) the Company has assigned its rights to such Servicing
Sale Receivables to the Collateral Agent for the benefit of the Secured
Parties pursuant to an assignment in form and content satisfactory to
the Required Lenders;
(v) the Servicing Purchaser of the applicable sold Servicing
Agreements has executed an agreement in form and content satisfactory to
the Required Lenders pursuant to which the Servicing Purchaser has
agreed to (A) pay such Servicing Sale Receivables directly to the
Collateral Agent for the benefit of the Secured Parties, and (B) provide
simultaneous written notice to the Agent and the Collateral Agent of any
claims made against or notices given to the Company which would
constitute an offset to or reduction in the amount of such Servicing
Sale Receivable; and
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(vi) the Servicing Sale Receivables have been included in
Eligible Collateral for 120 days or less;
provided, however, that (1) Eligible Servicing Sale Receivables shall not
include any "holdback" amounts or deferred installments of the purchase price
payable by such Servicing Purchaser which are not payable to the Company within
120 days after the initial payment to the Company for the sale of such
Servicing Agreements to such Servicing Purchaser, (2) Eligible Servicing Sale
Receivables shall not include any "holdback" amounts or deferred installments
of the purchase price payable by such Servicing Purchaser which are subject to
withholding or offset on account of the performance of the servicing being sold
or any failure, breach or other deficiency in the performance of the Company
after the date of such sale other than any such deferred payments which are
conditioned only on (x) the Company obtaining consents from the counterparty to
the sold Servicing Agreements approving the sale of such Servicing Agreements
to the Servicing Purchaser or (y) the Company's continuing to take customary
ordinary-course actions relating to origination and servicing of Mortgage Loans
(e.g. obtaining pool certifications, refraining from defaulting under Servicing
Agreements, etc.), and (3) any offset to or reduction in the amount of such
Servicing Sale Receivable claimed by the Servicing Purchaser (to the extent not
already deducted from Eligible Servicing Sale Receivables pursuant to the
preceding provisions) shall, at the election of the Agent, the Collateral Agent
or the Required Lenders, reduce the amount of such Servicing Sale Receivable
which qualifies as an Eligible Servicing Sale Receivable, with such reduction
to be effective immediately unless the Company in good faith contests the
amount or validity of such offset or reduction, and with such reduction to be
effective 30 days after the claim of offset or reduction with respect to any
amount which is contested in good faith by the Company.
4.6 Borrowing Base.
The term "Aggregate Borrowing Base" means, as of any date, the
sum of the amounts determined by applying the percentages set forth below to
the respective values of the categories of Collateral described in
subparagraphs (a) - (h) below (without duplication as any asset is converted
from one category to another):
(a) one hundred percent (100%) of the balance to the credit
of the Company in the Settlement Account;
(b) one hundred percent (100%) of the value of the cash and
Cash Equivalents held by the Collateral Agent (or a sub-agent of the
Collateral Agent) and in which the Collateral Agent has a perfected
first priority security interest as security for the Secured Debt, as
conclusively
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determined by the Collateral Agent and reported to the Agent daily based
on the value of such cash and Cash Equivalents as of the close of
trading on the preceding Business Day;
(c) ninety-eight percent (98%) of the Mortgage Collateral
Value of each Eligible Delivered Mortgage;
(d) ninety-eight percent (98%) of the Mortgage Collateral
Value of each Eligible AP Mortgage;
(e) ninety-eight percent (98%) of the MBS Value of each
Eligible Pledged Security;
(f) ninety percent (90%) of the value of Eligible
Repurchased Agency Loans and Receivables (as determined in accordance
with the definition of Repurchased Agency Loans and Receivables) as
determined pursuant to information provided by the Company to the
Collateral Agent on the first Business Day of each week based on the
value of such Eligible Repurchased Agency Loans and Receivables as of
the close of trading on the preceding Business Day;
(g) seventy-five percent (75%) of the amount of Eligible
Servicing Sale Receivables; and
(h) the lesser of:
(1) fifty percent (50%) of the sum of (A) for Eligible
Pledged Servicing not covered by the then most recent appraisal
of the Company's Pledged Servicing pursuant to clause (B)
immediately below, the lesser of acquisition price or the
appraised market value (which shall be as set forth in an
appraisal dated no more than 30 days prior to acquisition of
such Eligible Pledged Servicing by a qualified third-party
appraiser approved by the Agent, with such appraisal to be
obtained and paid for by the Company and delivered to the Agent)
of such Eligible Pledged Servicing (i.e. such Pledged Servicing
shall be valued at zero unless such an appraisal was obtained),
and (B) for all other Eligible Pledged Servicing, the appraised
market value (which shall be determined every three months (or
more frequently at the request of the Company, or if reasonably
deemed advisable by the Agent, the Agent) by a qualified
third-party appraiser approved by the Agent, with such
appraisals to be obtained and paid for by the Company and
delivered to the Agent) of such Eligible Pledged Servicing
(provided that if any Eligible Pledged Servicing has been sold
by the Company since the date of the most recent appraisal, then
the appraised value of the Company's Eligible Pledged Servicing
shall be deemed reduced by an amount obtained by multiplying (i)
the
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appraised market value of all Eligible Pledged Servicing prior to
such servicing sale by (ii) a fraction having a numerator equal
to the aggregate principal outstanding balance of the Mortgage
Loans serviced under the sold Servicing Agreements as of the date
of sale and a denominator equal to the aggregate principal
outstanding balance of the Mortgage Loans serviced pursuant to
all of the Servicing Agreements (including the sold Servicing
Agreements) covered by the most recent servicing appraisal as of
the date of sale); or
(2) the sum of (A) three quarters of one percent
(0.75%) of the aggregate principal outstanding balance of the
Mortgage Loans serviced by the Company pursuant to Servicing
Agreements with FNMA or FHLMC constituting Eligible Pledged
Servicing and (B) one percent (1.00%) of the aggregate principal
outstanding balance of the Mortgage Loans serviced by the
Company pursuant to Servicing Agreements with GNMA constituting
Eligible Pledged Servicing.
The maximum amount that can be credited toward the Aggregate
Borrowing Base from certain categories of assets shall be limited as follows
(collectively, the "Borrowing Base Sublimits") so that the portion of the
Aggregate Borrowing Base:
(i) attributable to Jumbo Mortgage Loans shall not exceed
twenty-five percent (25%) of the Aggregate Commitment;
(ii) attributable to Nonconforming Mortgage Loans shall
not exceed five percent (5%) of the Aggregate Commitment;
(iii) attributable to Jumbo Mortgage Loans with Mortgage
Collateral Values on the Pledge Date therefor in excess of $600,000
shall not exceed two percent (2%) of the Aggregate Commitment;
(iv) attributable to Repurchased Agency Loans and
Receivables other than Reinstated Repurchased Agency Loans and
Receivables shall not exceed at any time the lesser of (A) $200,000,000,
and (B) twenty-seven percent (27%) of the Aggregate Commitment;
(v) attributable to Reinstated Repurchased Agency Loans
and Receivables shall not exceed at any time three percent (3%) of the
Aggregate Commitment;
(vi) attributable to REO and accounts receivable
(including proceeds of FHA insurance or VA guaranties) acquired in
connection with a foreclosure sale or a transfer in lieu of foreclosure
of Repurchased Agency Loans and
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Receivables shall not exceed five percent (5%) of the Aggregate
Commitment;
(vii) for the first five and last five Business Days in any
calendar month, attributable to AP Mortgages shall not exceed
thirty-five percent (35%) of the Aggregate Commitment;
(viii) for any day other than the first five and last five
Business Days of any calendar month, attributable to AP Mortgages shall
not exceed twenty-five percent (25%) of the Aggregate Commitment;
(ix) attributable to Eligible Delivered Mortgages which
were sent, pursuant to a Company Trust Receipt, to the Company or a
Borrowing Subsidiary for correction of clerical or other non-substantial
documentation problems in preparation of such document without such
documentation being returned to the Collateral Agent properly corrected
shall not exceed two percent (2%) of the Aggregate Commitment;
(x) attributable to AP Mortgages as to which the
Collateral Agent has not received the Required Mortgage Documents within
five Business Days of the Pledge Date therefor shall not exceed one
percent (1%) of the Aggregate Commitment;
(xi) attributable to Eligible Mortgage Loans which have
been included in the Aggregate Borrowing Base for more than 90 days
shall not exceed five percent (5%) of the Aggregate Commitment;
(xii) attributable to Eligible Mortgage Loans which were
originated more than 180 days prior to the Pledge Date therefor shall
not exceed five percent (5%) of the Aggregate Commitment;
(xiii) attributable to Eligible Pledged Servicing shall not
exceed the lesser of (1) $250,000,000 and (2) thirty-three and one-third
percent (33 - 1/3%) of the Aggregate Commitment; and
(xiv) attributable, as of any date, to any Eligible
Servicing Sale Receivable which is payable only upon the obtaining of a
consent to the transfer of the subject Servicing Agreements shall not
exceed the amount credited toward the Aggregate Borrowing Base on
account of such Servicing Agreements immediately prior to their transfer
less any portion of the purchase price for such Servicing Agreements
received by the Company prior to such date.
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4.7 Special Representations as to Pledged Warehouse Collateral.
By delivering or causing the delivery of any Mortgage Loan,
Security or AP Notice to the Collateral Agent in pledge under the Security
Agreement the Company or the applicable Borrowing Subsidiary, as applicable
(each such entity, with respect to any Pledged Item delivered or caused to be
delivered by such entity, is referred to herein as the "Pledgor"), shall be
deemed to have represented and warranted with respect to such Pledged Item,
that:
(1) Such Pledged Item constitutes Eligible Collateral;
(2) The Pledgor is the legal and equitable owner and holder
of such Pledged Item and has full power and authority to pledge such
Pledged Item. Such Pledged Item constitutes Eligible Collateral, has
been duly and validly pledged to the Collateral Agent, is subject to no
contractual restriction on the creation of a Lien thereon (other than
the provisions of the indentures relating to the Ratable Medium-Term
Notes which require such notes to be ratably secured), and is subject to
no Lien other than the lien of the Security Agreement in favor of the
Secured Parties. Each commitment of a Person to purchase Pledged Items
from the Pledgor (including Approved Investor Commitments) has been duly
and validly issued to the Pledgor, has been duly and validly pledged to
the Collateral Agent and is subject to no Lien other than the lien of
the Security Agreement in favor of the Secured Parties.
(3) Each Pledged Mortgage has been or will be promptly duly
recorded where necessary and complies with all applicable state or local
recording, registration and filing laws and regulations.
(4) There are no defenses, counterclaims or offsets of any
nature whatsoever with respect to such Pledged Mortgage or the
indebtedness evidenced and secured thereby or with respect to any
Required Mortgage Document and, other than the related Required Mortgage
Documents and Additional Required Mortgage Documents, there are no
instruments or documents evidencing, securing or guaranteeing payment of
the indebtedness constituting such Pledged Mortgage.
(5) Each requirement of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit
opportunity or disclosure laws (including environmental disclosure laws
imposing obligations on mortgagees) applicable to such Pledged Item has
been complied with in all material respects.
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(6) The Company is the servicer for each such Pledged
Mortgage (unless the Agent has been advised to the contrary in writing
and the Agent approved such other arrangement).
(7) The representation set forth in Section 6.15 is
reaffirmed as of the Pledge Date.
(8) Each Assignment (i) has been duly authorized by all
necessary corporate action by the Pledgor, duly executed and delivered
by the Pledgor and is the legal, valid and binding obligation of the
Pledgor enforceable in accordance with its terms and (ii) complies with
all applicable laws including all applicable recording, filing and
registration laws and regulations and is adequate and legally sufficient
for the purpose intended to be accomplished thereby, including, without
limitation, the assignment of all of the rights, powers and benefits of
the Pledgor as mortgagee.
(9) So long as the Collateral Agent complies with the
procedures set forth in the Security Agreement relating to possession of
Collateral (and assuming recordation of Assignments in states in which
such recordation is necessary for the perfection of the Collateral
Agent's security interest in the applicable Mortgage Loans) and, in the
case of book-entry Securities, notations of ownership related thereto,
the Collateral Agent, for the benefit of the Secured Parties, will have
a valid and perfected first priority security interest in such Pledged
Item and all proceeds, products and profits derived therefrom,
including, without limitation, all moneys, goods, insurance proceeds and
other tangible or intangible property received upon liquidation thereof.
(10) The Pledgor has complied with all laws, rules and
regulations in respect of such Pledged Mortgage if it is insured by FHA
or guaranteed by VA and the related insurance or guarantee is in full
force and effect. All such Mortgage Loans comply in all respects with
all applicable requirements for purchase under the FNMA standard form of
selling contract for FHA insured and VA guaranteed loans and any
supplement thereto then in effect.
(11) To the extent that any applicable requirements of any law
or any governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law), or any interpretation thereof,
including, without limitation, the provisions of Title XI of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, as
amended, reformed or otherwise modified from time to time, and any rules
promulgated to implement such provisions (collectively, "Appraisal
Regulations") require Pledgor to have received (or require that the
Lenders require Pledgor to receive) an appraisal on the property
underlying such Pledged Mortgage, such an appraisal has been be obtained
and such
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appraisal meets the requirements of all such Appraisal Regulations.
(12) All fire and casualty policies covering the premises
encumbered by each Pledged Mortgage (i) name the Pledgor as the insured
under a standard mortgagee clause not less favorable in coverage to the
mortgagee than is customarily used in the state where such premises is
located, (ii) are in full force and effect, and (iii) afford insurance
against fire and such other risks as are usually insured against in the
broad form of extended coverage insurance from time to time available,
as well as insurance against flood hazards as required by FHA or VA.
(13) To the best of the Pledgor's knowledge without
investigation, no Person has transported, released, emitted, discharged,
leached, dumped or disposed of any Hazardous Substance onto or into any
portion of the premises encumbered by a Pledged Mortgage except in
material compliance with all applicable federal, state, foreign and
local laws, rules, regulations and orders.
(14) If a Borrowing Subsidiary is the Pledgor, the Pledged Item
was funded by the Company and is shown on the Company's (rather than the
Borrowing Subsidiary's) balance sheet pursuant to the Funding Agreement.
By pledging any Repurchased Agency Loans and Receivables to the
Collateral Agent under the Security Agreement the Company shall be deemed to
have represented and warranted that such Repurchased Agency Loans and
Receivables were purchased by the Company in compliance with all regulations of
the Federal Agency which issued or guaranteed the Security relating to the pool
from which the Repurchased Agency Loans and Receivables were repurchased.
If any representation or warranty contained in this Section is
inaccurate or shall cease to be true with respect to any Pledged Item to which
such representation and warranty applies, such Pledged Item shall not
constitute an Eligible Mortgage Loan or an Eligible Pledged Security, but the
breach of such representation and warranty shall not constitute an Event of
Default.
4.8 Special Representations as to Pledged Servicing.
By granting a security interest to the Collateral Agent in the
Collateral under the Security Agreement, the Company shall be deemed to have
represented and warranted with respect to each Servicing Agreement included in
the Pledged Servicing, that:
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(1) The Company is the legal and equitable owner
and holder of such Servicing Agreement and the rights thereunder and has
full power and authority to grant a security interest in such
Collateral. Such Servicing Agreement has been duly and validly made
subject to the lien of the Security Agreement and is subject to no Lien
other than the liens created pursuant to this Agreement and any lien of
the applicable Investor as described in the Acknowledgement Agreement
related thereto.
(2) Such Servicing Agreement has been duly executed
and delivered by the parties thereto and is valid and enforceable in
accordance with its terms, without defense or offset.
(3) No default, nor any event which with notice or
lapse of time or both would become a default, has occurred and is
continuing under such Servicing Agreement and no action has been taken
to terminate such Servicing Agreement.
(4) The Company has complied, and will continue to
comply, with all laws, rules and regulations, including but not limited
to all applicable Federal Agency requirements, in respect of such
Servicing Agreement.
(5) Such Servicing Agreement is subject to, and
will continue to be subject to, no liens other than the liens created
pursuant to the Credit Documents (including the lien in favor of the
Secured Parties created by the Security Agreement) or described in the
Acknowledgement Agreement related thereto.
(6) Such Servicing Agreement does not, and will
continue to not, contain any restrictions on the pledging of such
Servicing Agreement or the rights thereunder to any other Person (or if
the Servicing Agreement contains any restrictions requiring the consent
of any Person, such consent has been obtained), and such Servicing
Agreement will continue to be in substantially the same form as the
Company's now-existing Servicing Agreements, with such material changes
as are approved in advance by the Required Lenders.
If any representation or warranty contained in this Section is inaccurate or
shall cease to be true with respect to any Pledged Servicing, such Pledged
Servicing shall not constitute Eligible Pledged Servicing, but the breach of
such representation and warranty shall not constitute an Event of Default.
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4.9 Special Covenants.
(a) The Pledgor warrants and will defend the right, title
and interest of the Agent and the Collateral Agent in and to all Pledged
Items, Pledged Servicing and all other items of Collateral against the
claims and demands of all other Persons.
(b) The Pledgor shall not materially amend or modify, or
waive any of the material terms and conditions of, or settle or
compromise any material claim in respect of, any Collateral or any
rights related to any of the foregoing.
(c) The Pledgor shall not sell, assign, transfer or
otherwise dispose of, or grant any option with respect to, or pledge or
otherwise encumber (except pursuant to this Agreement or the Security
Agreement), any of the Collateral or any interest therein, except as
provided in Section 4.10 with respect to releases of Collateral.
(d) The Pledgor shall service all Pledged Mortgages which
are the subject of Approved Investor Commitments in accordance with the
standard requirements of the issuers of such Approved Investor
Commitments and all applicable FHA and VA requirements. The Pledgor
shall service all Mortgage Loans which are the subject of Pledged
Securities in accordance with the standard requirements of the Federal
Agency issuing or guaranteeing such Securities and all applicable FHA
and VA requirements. The Company shall service all Mortgage Loans which
are the subject of any Servicing Agreements in accordance with the
standard requirements of the other party to such Servicing Agreements
and all applicable FHA and VA requirements.
(e) The Company shall promptly notify the Agent and the
Collateral Agent of any material default under any Servicing Agreement,
and in its normal daily reporting to the Collateral Agent, the Company
will include information identifying to the best knowledge of the
Company defaults under any Pledged Mortgages.
(f) The Company shall, at the request of the Agent or the
Required Lenders, promptly deliver to the Collateral Agent fully
executed copies of Acknowledgement Agreements with GNMA covering all
Pledged Servicing with GNMA.
(g) The Pledgor shall hold all escrow funds collected in
respect of Pledged Mortgages and Mortgage Loans which are the subject of
Pledged Securities in trust, in accordance with all Federal Agency
requirements and standards relating thereto, and apply the same for the
purposes for which such funds were collected.
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(h) The Pledgor shall observe and perform all of its
obligations in connection with each Approved Investor Commitment related
to any Pledged Item. Within forty-eight (48) hours after a request
therefor by the Collateral Agent or Agent, a copy of each Approved
Investor Commitment certified by the Pledgor, or if requested by the
Collateral Agent or Agent at any time after an Event of Default has
occurred, the originals of such Approved Investor Commitments shall be
delivered to the Collateral Agent or Agent.
(i) The Company or the applicable Borrowing Subsidiary, as
applicable, shall promptly notify the Agent and the Collateral Agent if
and when the Company or the applicable Borrowing Subsidiary receives any
prepayment arising from or relating to any Pledged Mortgage and hold the
same in trust, as security for the Secured Parties, until such Mortgage
Loan is removed from the Aggregate Borrowing Base in accordance with
this Agreement or, if an Event of Default has occurred and is continuing
under this Agreement, then immediately remit to the Collateral Agent
such prepayments (and all interest and earnings thereon or with respect
thereto).
(j) The Pledgor shall not withdraw or seek to withdraw or
substitute or seek to substitute any Pledged Item or Pledged Servicing
except as provided herein and in the Security Agreement.
(k) The Pledgor shall cooperate with the Agent, the Lenders
and the Collateral Agent and any of their respective representatives in
any review or inspection of the Pledged Mortgages, the property subject
to any Pledged Mortgage or the Servicing Agreements constituting Pledged
Servicing, and make available to such person any books and records
relating to such Collateral as well as the appropriate employees of the
Pledgor for the purpose of discussing the same, all at such time during
business hours as may be reasonably requested by the Agent, any Lender
or the Collateral Agent.
(l) The Pledgor shall not cease to have the approval of any
Federal Agency or any private mortgage insurer (unless, in the case of a
private mortgage insurer, such failure to maintain such approval shall
not cause any Eligible Collateral which is required for the Company to
be in compliance with Section 8.12 to cease to qualify as Eligible
Collateral) which it has on the date hereof or become ineligible as a
FHA-Approved Mortgagee, FHLMC-Approved Lender, FNMA-Approved Lender or
VA-Approved Lender.
(m) The Pledgor shall not waive or otherwise modify any
material term of, or fail to perform its material obligations under, any
Required Mortgage Document or Pledged Mortgage or release any security
or obligor, or, through any activity or
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inactivity, cause any Pledged Mortgage which shall have been eligible
for FHA insurance to become ineligible for FHA insurance or for purchase
in accordance with an Approved Investor Commitment related to such
Pledge Mortgage.
(n) The Pledgor shall do, execute, acknowledge and deliver,
or cause to be done, executed, acknowledged and delivered, all such
other acts, instruments and transfers (including, without limitation,
Assignments) as the Agent or the Collateral Agent may reasonably request
from time to time in order to create and maintain a perfected first
priority security interest in the Collateral in favor of the Secured
Parties and to create, maintain and preserve the security and benefits
intended to be afforded by this Agreement and the Security Agreement,
subject to no prior or equal security interest, lien, charge or
encumbrance, or agreement purporting to grant to any Person a security
interest in the Collateral (provided, however, that unless an Event of
Default is continuing or the Required Lenders have requested otherwise,
consents to assignments of options, futures contracts or other interest
rate protection products in favor of the Lenders from the counterparties
thereto shall not be required to be obtained).
(o) With respect to Repurchased Agency Loans and
Receivables, upon the request of the Collateral Agent or Agent the
Company shall have executed and provided any and all documentation
required by the Collateral Agent or Agent (including, but not limited
to, all Required Mortgage Documents, the insurance or guaranty
certificate applicable to such Mortgage Loan, and evidence satisfactory
to the Collateral Agent and Agent of the amounts advanced by the Company
in connection with such Mortgage Loan) to perfect the Lenders' security
interest in such Repurchased Agency Loans and Receivables.
(p) Upon the request of the Required Lenders, the Company
and each Borrowing Subsidiary agree that the Company and each Borrowing
Subsidiary shall require the closing agents for AP Mortgages to enter
into escrow or other agreements regarding the monies used to fund such
AP Mortgages.
(q) If the Collateral Agent releases any Pledged Servicing
in connection with a sale of Servicing Agreements to a Servicing
Purchaser and for any reason such sale does not close or the Company is
obligated to repurchase any such Servicing Agreements (whether because
the requisite consents to such sale are not obtained or otherwise), then
the Company shall execute such UCC financing statements and other
documents as the Agent or Collateral Agent may request in
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order to re-perfect the Collateral Agent's security interest in such
Servicing Agreements.
4.10 Release of Collateral.
In addition to the releases of Collateral provided for in
Sections 7(a)-(e) of the Security Agreement, upon the request of the Company
delivered from time to time to the Agent and the Collateral Agent, the Agent
shall authorize the Collateral Agent to release Collateral specified in such
notice from the lien of this Agreement, if, but only if, (i) at the time of
such release no Event of Default exists and no notice of a Default has been
issued that has not been cured, (ii) any payment under Section 2.14(a) which
may be required (based on information relating to the Aggregate Borrowing Base
supplied to the Agent by the Collateral Agent) as a result of such release has
been made (or contemporaneously with such release shall be made) so that the
release of such Collateral will not create a violation of any Lending Sublimit
or Borrowing Base Sublimit, and (iii) if the Collateral to be released is
Pledged Servicing, such release is made in connection with the sale of such
Pledged Servicing by the Company. Notwithstanding the foregoing, following an
Event of Default pledged Cash Equivalents which are the subject of reverse
repurchase obligations can be released in connection with the terms of the
applicable reverse repurchase agreement, and Pledged Items can be released in
connection with the sale of such Pledged Items pursuant to an Approved Investor
Commitment existing at the time of occurrence of the Event of Default if, in
either case, the proceeds of such sale are deposited into the Settlement
Account.
4.11 Settlement Account.
There has been established with the Agent, for the benefit of
the Secured Parties, a "cash collateral" account of the Company #19-19210
("Settlement Account") into which shall be deposited all cash proceeds from the
sale of any Pledged Item and any payments made by a Servicing Purchaser in
connection with Pledged Servicing Sale Receivables. Only the Agent shall have
access to the Settlement Account. Prior to the occurrence of a Default, to the
extent that, as determined by the Agent, the amounts in the Settlement Account
are not needed to keep the Aggregate Borrowing Base equal to or greater than
the Credit Requirement, the Company may request that the Agent release funds
from the Settlement Account, which funds shall be applied by the Agent as
directed by the Company. Upon the occurrence of an Event of Default (and
during the continuance thereof) all amounts then on deposit in the Settlement
Account, and any deposits made in the Settlement Account during the continuance
of such Event of Default, shall be withdrawn by the Agent from the Settlement
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Account and shall be applied to the Credit Indebtedness in accordance with the
provisions of Paragraph 18 of the Security Agreement and Section 10.4 of this
Agreement.
4.12 Termination.
If all Commitments shall have expired or been terminated
pursuant to the express terms hereof and no Credit Indebtedness shall be
outstanding, the Agent shall promptly deliver or cause to be delivered all cash
in the Settlement Account and all other Collateral to the Company. The receipt
by the Company of any cash in the Settlement Account and of all Pledged Items
and Pledged Servicing returned or delivered to the Company pursuant to any
provision of this Agreement shall be a complete and full acquittance for the
Pledged Items and Pledged Servicing so delivered, and the Agent, Collateral
Agent and the Lenders shall thereafter be discharged from any liability or
responsibility therefor.
4.13 Abatement of Security Interest.
(a) Positive Security Event. If a Positive Security Event
occurs prior to the Termination Date and no Event of Default has occurred and
is continuing, the security interest created under the Security Agreement and
this Agreement in the Collateral shall be abated at the request of the Company
and shall not be effective so long as no Event of Default exists and each of
the following conditions exist: (i) the Company shall have and maintain a
ratio of (1) Funded Debt less Subordinated Debt to (2) Adjusted Consolidated
Tangible Net Worth plus Subordinated Debt, calculated monthly on a three-month
rolling average basis, of not more than the applicable Unsecured Leverage
Ratio; (ii) the total Debt of the Company, excluding Subordinated Debt, shall
not exceed the Debt Threshold; and (iii) neither the Company nor either
Borrowing Subsidiary shall have, or permit to occur, any Lien upon their assets
other than as permitted under Section 8.11 (other than Section 8.11(o)). The
conditions under clauses (i) - (iii) of the preceding sentence are referred to
herein collectively as the "Positive Security Conditions". The Collateral
Agent shall, at the request of the Company and after the Agent has confirmed to
the Collateral Agent that a Positive Security Event has occurred and all
Positive Security Conditions are satisfied, execute and deliver such UCC-3
financing statements as may be required to evidence the abatement of any
security interest that shall previously have been perfected by means of the
filing of financing statements. As a condition to such abatement, the Company
and each Borrowing Subsidiary shall execute such UCC-1 financing statements and
other documentation as the Collateral Agent may request to permit the security
interest in the Collateral to be reinstated and perfected by the Collateral
Agent without further action by the Company or any Borrowing Subsidiary if a
Negative Security Event should occur
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thereafter. Although the Company and Borrowing Subsidiaries shall continue to
deliver Mortgage Loan files and other information and documents to the
Collateral Agent (in a custodial capacity) as set forth in the Security
Agreement even while the security interest is abated, so long as the security
interest is abated the Company shall perform all of the obligations of the
Collateral Agent as set forth in the Security Agreement with respect to
determining the Aggregate Borrowing Base and the Warehouse Borrowing Base. If
any of the Positive Security Conditions shall cease to exist at any time after
a Positive Security Event, such occurrence shall constitute a Negative Security
Event.
(b) Negative Security Event. If, following a Positive Security
Event, a Negative Security Event occurs, the Facility shall again be secured in
accordance with the terms herein unless and until the Required Lenders agree to
the contrary. If the Facility again becomes secured pursuant to the preceding
sentence, the Company (with respect to Collateral owned by the Company) and
each Borrowing Subsidiary (with respect to Collateral owned by such Borrowing
Subsidiary) shall be deemed to have automatically (i) re-pledged and re-granted
to the Collateral Agent for the benefit of the Secured Parties a first priority
security interest in the Collateral to secure payment of the Secured Debt, (ii)
consented to the Collateral Agent's filing of the UCC-1 financing statements
and dating and otherwise completing, filing and/or recording, if necessary, any
other documentation previously provided by the Company or such Borrowing
Subsidiary pursuant to the provisions of Section 4.13(a) above, and (iii)
reaffirmed its appointment of the Collateral Agent to act as its bailee
pursuant to the provisions of Section 9-305 of the Uniform Commercial Code of
any applicable state, and the Collateral Agent (upon receipt of notice from the
Credit Agent that a Negative Security Event has occurred) shall be deemed to
have been informed of and accepted such appointment. Notwithstanding the
foregoing, the Company may, in accordance with the terms of the succeeding
sentence, request that the Required Lenders consent to the Facility again
becoming unsecured despite the occurrence of a Negative Security Event. If the
Company so desires that the Facility again become unsecured following a
Negative Security Event (even though no Positive Security Event has occurred
since the occurrence of the Negative Security Event), it shall notify each
Lender in writing of such desire within thirty days after the occurrence of the
Negative Security Event (which notice shall identify the facts giving rise to
the Negative Security Event), and the Facility shall again become unsecured (A)
if and only if the Required Lenders so consent within thirty days after such
notification from the Company (a "Negative Event Waiver") and (B) only so long
as no further Negative Security Event (i.e. no Negative Security Event other
than the event referred to in the Company's notice) has occurred and is
continuing. If the Company's long term unsecured
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debt ratings decline further below "A-" as rated by S&P or "A3" as rated by
Xxxxx'x, or if any other Negative Security Event occurs after the Company has
obtained a Negative Event Waiver, the Facility shall again become secured in
accordance with this Section unless the Company obtains another Negative Event
Waiver in accordance with the terms of the preceding sentence. Finally, if a
Positive Security Event occurs subsequent to the occurrence of a Negative
Security Event, the Facility shall become unsecured at the request of the
Company, subject to and in accordance with the terms and conditions set forth
in Section 4.13(a) above.
(c) Lending Restrictions. If and during such time as the
Credit Indebtedness hereunder may be unsecured in accordance with Section
4.13(a), all Advances requested by the Company or any Borrowing Subsidiary
shall continue to meet the Lending Sublimits and shall be subject to the
conditions precedent set forth in Article V (other than conditions precedent
requiring the Collateral Agent to have a perfected security interest in the
Collateral).
4.14 Transition from Original Facility.
The Pledge Date and all other relevant delivery dates and time
periods with respect to the determination of Eligible Collateral shall be
calculated to include any delivery dates or holding periods prior to the date
hereof during which Collateral was being held by the Collateral Agent (or was
the subject of an AP Notice), had been delivered to an Approved Investor or had
been redelivered to the Company under the Original Facility.
ARTICLE V
CONDITIONS PRECEDENT
Each Advance may be made only if the following conditions
precedent are met:
5.1 Initial Advance (Company and Borrowing Subsidiaries).
Prior to the initial Advance hereunder, the Company and each
Borrowing Subsidiary shall have delivered, or caused to be delivered, to the
Agent:
(a) Copies of this Agreement duly executed by the Company
and each Borrowing Subsidiary for each Lender and the Agent.
(b) A Security Agreement duly executed by the Company and
each Borrowing Subsidiary in the form attached hereto as Exhibit D.
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(c) Notes payable to the order of each Lender duly executed
by the Company and each Borrowing Subsidiary in the form attached hereto
as Exhibits E-1 and E-2, respectively plus, in the case of a Bid Lender,
in the form approved by such Lender.
(d) Certificates of the Secretaries of the Company and each
Borrowing Subsidiary dated such date, (i) accompanied by and certifying
true and correct copies of the Articles of Incorporation and By-laws of
the Company and each Borrowing Subsidiary and resolutions of their
Boards of Directors authorizing the Company and the Borrowing
Subsidiaries to execute, deliver and perform this Agreement, the
Security Agreement and all other documents executed by the Company or
any Borrowing Subsidiary in connection herewith and (ii) confirming the
incumbency and signatures of those officers of the Company and each
Borrowing Subsidiary authorized to execute this Agreement, the Security
Agreement and the Notes and otherwise act on behalf of the Company or
any Borrowing Subsidiary hereunder or under the Security Agreement.
(e) The opinion of counsel to the Company and the Borrowing
Subsidiaries, in substantially the same form and substance as the
opinion letter attached hereto as Exhibit K attached hereto and covering
such other matters as the Agent may reasonable request, together with
appropriate good standing certificates for the Company and each
Borrowing Subsidiary.
(f) Executed UCC-1 and UCC-3 Financing Statements as the
Agent may reasonably request.
(g) A letter from the Company to each lender under the
Original Facility which is not a Lender hereunder providing for the
terms of payment of the loans outstanding under the Original Facility
payable to such lenders.
(h) If there are any Advances outstanding under the
Original Facility on the date hereof, an agreement in substantially the
form of Exhibit N hereto between the Company and the Agent on behalf of
the lenders under the Original Facility and the Lenders under this
Agreement as to the repayment or conversion of loans outstanding to the
Company under the Original Facility, the treatment of any interest and
fees accrued thereon, and the cancellation of all commitments under the
Original Facility.
(i) Evidence that the Company and each Borrowing Subsidiary
have paid all fees required to be paid hereunder and under the Security
Agreement on or before the date of the first Advance.
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(j) Such other documents as the Agent may reasonably
request.
Within thirty (30) days after the date hereof, the Company shall also
deliver to the Agent copies of such amendments to existing Acknowledgement
Agreements as the Agent may request to account for or recognize the amendment
and restatement of the Original Facility.
5.2 Initial Advance (Lenders).
On or before the date of the initial Advance hereunder, the
Lenders shall have delivered, or caused to be delivered, to the Agent and the
Agent shall in turn, have delivered, or caused to be delivered, to the Company
and each Borrowing Subsidiary one or more counterparts of this Agreement
executed by the Lenders.
5.3 All Advances.
On the date of each Advance, the Company and each Borrowing
Subsidiary shall be in compliance with all the terms and provisions set forth
herein and in the Security Agreement on their part to be observed or performed;
the representations and warranties of the Company and the Borrowing
Subsidiaries set forth in Articles IV and VI shall be true and correct in all
material respects on such date as if made on and as of such date (provided,
however that the representation and warranty contained in Section 6.6(c) shall
not apply to (i) conversions or continuations of Advances pursuant to Section
2.12, or (ii) Advances requested by the Company solely for the purpose of
repaying maturing commercial paper); and no Default shall have occurred and be
continuing on such date. On each Advance Date the Company and each Borrowing
Subsidiary shall be deemed to have represented and warranted to the Lenders
that no violation of the requirements set forth in the preceding sentence
exists on such date after giving effect to the requested Advance. Prior to
making an Advance (including any Bid Loan) available to the Company or any
Borrowing Subsidiary under Section 2.11 on any day, the Agent shall have (i)
received notice from the Collateral Agent of the amount of the Aggregate
Borrowing Base for such day, (ii) received notice from the issuing and paying
agent for the Outstanding CPNs as described in Section 7.7(p) confirming the
aggregate face amount of Outstanding CPNs for such day, and (iii) confirmed,
based solely upon the information contained in such notices, the amount of
Advances then-outstanding, and the Company's and the Borrowing Subsidiaries'
certifications contained in the preceding sentence as to all other facts, that
the Aggregate Borrowing Base will be greater than or equal to the Credit
Requirement on such date after giving effect to such Advance.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Company and each Borrowing Subsidiary represents and
warrants to the Lenders that:
6.1 Organization, Corporate Powers, Etc.
The Company and each Borrowing Subsidiary is a corporation duly
incorporated, validly existing, in good standing and authorized to exercise its
corporate powers, rights and privileges under the laws of the jurisdiction in
which it is incorporated, is qualified to do business and is in good standing
in all jurisdictions where failure to be so qualified and in good standing
would have a material adverse effect upon its business, operations or financial
condition, and has all requisite corporate power and authority, to conduct its
business, to own its properties and to execute and deliver, and to perform all
of its obligations under, this Agreement, the Security Agreement and the Notes;
and each Borrowing Subsidiary is a wholly-owned Subsidiary of the Company.
6.2 Corporate Authority, Etc.
The execution, delivery and performance by the Company and each
Borrowing Subsidiary of this Agreement, the Security Agreement and the Notes
have been duly authorized by all necessary corporate action and do not and will
not (i) violate any existing provision of any law, rule, regulation (including,
without limitation, Regulation U or X of the Board of Governors of the Federal
Reserve System or the rules and regulations of the SEC or any regulatory
commission of any jurisdiction), order, writ, judgment, injunction, decree,
determination or award currently in effect having applicability to the Company
or any of its Affiliates or of the charter or by-laws of the Company or of any
of its Affiliates, (ii) result in a breach of or constitute a default under any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Company or any of its Affiliates is a party or by which
the Company or any of its Affiliates or any of their respective properties may
be bound or affected, or (iii) result in, or require, the creation or
imposition of any mortgage, deed of trust, assignment, pledge, lien, security
interest or other charge or encumbrance of any nature upon or with respect to
any of the respective properties of the Company or any of its Affiliates (other
than that arising hereunder or under the Security Agreement or the Ratable
Medium-Term Notes with respect to the Collateral); and neither the Company nor
any of its Affiliates is in material default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
or any such indenture, agreement, lease or instrument.
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6.3 Compliance with Laws.
The Company and each of its Affiliates are in compliance with
the requirements of all applicable laws, rules, regulations and orders of any
governmental authority, non-compliance with which would, singly or in the
aggregate, materially and adversely affect their respective business or credits
including but not limited to financial condition and operations.
6.4 Government Approvals.
No authorization, consent, approval, license, exemption of or
filing or registration with any existing court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, is
or will be necessary for the valid execution, delivery and performance by the
Company and each Borrowing Subsidiary of, or the enforceability of, this
Agreement, the Security Agreement and the Notes.
6.5 Valid and Binding Obligations.
This Agreement, the Security Agreement and the Notes constitute
legal, valid and binding obligations of the Company and each Borrowing
Subsidiary enforceable against the Company and each Borrowing Subsidiary in
accordance with their respective terms, subject to bankruptcy and similar laws
and other general restrictions on creditor's rights and equitable principles
(whether applied in an action at law or a suit in equity).
6.6 Financial Statements.
(a) The balance sheet of the Company and its Subsidiaries
as of December 31, 1995 (which is presented in the Company's annual
report) and the related statements of income and changes in financial
position for the fiscal year then ended, copies of which have been
heretofore furnished to each of the Lenders, fairly present, in
conformity with GAAP, the financial condition of the Company and its
Subsidiaries as of such date and the results of the operations and
changes in financial position of the Company and its Subsidiaries for
such fiscal year.
(b) The quarterly financial statements of the Company and
its Subsidiaries submitted to the SEC or the Agent since the date of the
December 31, 1995 annual financial statements referred to in clause (a)
above fairly present, in conformity with GAAP, the financial condition
of the Company and its Subsidiaries as of the applicable dates of such
statements and the results of the operations and changes in financial
position of the Company and its Subsidiaries for the periods to which
such statements relate.
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(c) Since the date of the December 31, 1995 statements
there has been no material adverse change, taken as a whole, in the
business, financial position, or operations of either the Company or any
Subsidiary.
6.7 Litigation.
Except as disclosed on Exhibit L attached hereto and as
otherwise set forth in the Company's annual report referred to in Section
6.6(a), there are no actions, suits or proceedings pending or, to the knowledge
of the Company or any Borrowing Subsidiary after reasonable investigation,
threatened against or affecting the Company or any of its Affiliates or any of
their respective properties before any court, arbitrator or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign (including, without limitation, the SEC or any regulatory commission of
any jurisdiction), which, if determined adversely to the Company or any
Affiliate, as the case may be, would be reasonably likely to, singly or in the
aggregate, have a material adverse effect on the financial condition, or on the
respective properties or operations, of the Company and its Affiliates or the
transactions contemplated by this Agreement, the Security Agreement and the
Notes.
6.8 Use of Proceeds.
The Company and the Borrowing Subsidiaries will use the proceeds
of the Loans solely for (i) the purposes described in the recitals hereto, (ii)
the funding or purchasing of Mortgage Loans, (iii) the payment of principal,
interest, fees, expenses, and other obligations described in or contemplated by
this Agreement, (iv) payment of Debt of the Company existing on the date
hereof, and (v) such other purposes as may be permitted under this Agreement.
No part of the proceeds of any Loan will be used to purchase or carry, or to
reduce or retire, any indebtedness incurred to purchase or carry, any margin
stock (within the meaning of Regulations U and X of the Board of Governors of
the Federal Reserve System) or to extend credit to others for the purpose of
purchasing or carrying any margin stock and neither the Company nor any
Borrowing Subsidiary is engaged in purchasing or carrying margin stock.
6.9 Accuracy of Information.
All written information supplied by the Company or any Borrowing
Subsidiary to the Lenders relating to the Company and its Affiliates was true,
complete and accurate in all material respects when made, and there has been no
material adverse change in the financial condition of the Company and its
Affiliates from the time such information was provided to the Lenders.
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6.10 Accuracy of Representations and Warranties.
The representations and warranties of the Company and the
Borrowing Subsidiaries contained in each other document delivered in connection
with this Agreement are, or when such document is delivered will be, true and
correct in all material respects when made.
6.11 Investment Company.
Neither the Company nor any Borrowing Subsidiary is an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or an
"investment adviser" within the meaning of the Investment Advisers' Act of
1940, as amended.
6.12 ERISA.
Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and any other applicable Federal or
state law; and to the best of its knowledge no event or condition is occurring
or exists with respect to any Plan concerning which the Company or any
Borrowing Subsidiary would be under an obligation to furnish a report to the
Lenders in accordance with Section 7.7(i).
6.13 Tax Returns.
The Company and each of its Affiliates has filed or caused to be
filed all material federal, state and local tax returns which, to its
knowledge, are required to be filed and has paid or caused to be paid all
material taxes as shown on such returns or on any assessment received by it, to
the extent that such taxes have become due, except taxes the validity of which
is being contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on its books.
6.14 Full Disclosure.
No event has occurred and no circumstance exists as a result of
which any information, statement, or representation concerning the Company or
any Borrowing Subsidiary that has been provided to the Lender by the Company or
any Borrowing Subsidiary in connection herewith would include an untrue
statement of a material fact or omit to state any material fact or any fact
necessary to make the information, statements or representation contained
therein, in the light of the circumstances under which they were made, not
misleading.
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6.15 GNMA, FHA, VA, FNMA, AND FHLMC Eligibility.
(a) The Company is: (i) an FHA-Approved Mortgagee in good
standing, a VA-Approved Lender, a FHLMC-Approved Lender and a
FNMA-Approved Lender and meets all eligible requirements of law and
governmental regulation so as to be eligible to originate, purchase,
hold and service Mortgage Loans insured by FHA and to issue any
Security; (ii) an approved seller and servicer in good standing of
Mortgage Loans to each Federal Agency; and (iii) an approved issuer and
servicer in good standing of FHLMC, FNMA and GNMA Securities and meets
all FHLMC, FNMA and GNMA requirements, requirements of law and
governmental regulations so as to be able to issue FHLMC, FNMA and GNMA
Securities and to service the Mortgage Loans that secure such
Securities.
(b) Each Borrowing Subsidiary is: (i) an FHA-Approved
Mortgagee in good standing, a VA-Approved Lender, a FHLMC-Approved
Lender and a FNMA-Approved Lender and meets all eligible requirements of
law and governmental regulation so as to be eligible to originate,
purchase and hold Mortgage Loans insured by FHA and to issue any
Security; (ii) an approved seller in good standing of Mortgage Loans to
each Federal Agency; and (iii) an approved issuer in good standing of
FHLMC, FNMA and GNMA Securities and meets all FHLMC, FNMA and GNMA
requirements, requirements of law and governmental regulations so as to
be able to issue FHLMC, FNMA and GNMA Securities.
6.16 No Defaults.
No Default has occurred and is continuing.
ARTICLE VII
AFFIRMATIVE COVENANTS
The Company and the Borrowing Subsidiaries covenant and agree
with the Lenders that, so long as this Agreement shall remain in effect and so
long as any amounts are outstanding under the Notes or this Agreement, unless
the Required Lenders shall otherwise consent in writing, the Company will, and
the Borrowing Subsidiaries (except with respect to the covenants set forth in
Sections 7.7 (other than subsections (a), (f), (h), (q) and (r) of Section
7.7), 7.9 and 7.12, which shall apply only to the Company) will:
7.1 Payment of Debts, Taxes, Etc.; Maintenance of Insurance.
(a) Pay all debts and perform all obligations, and cause
each of its Subsidiaries to pay all debts and perform all obligations,
promptly and in accordance with the terms
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thereof and pay and discharge, and cause each of its Subsidiaries to pay
and discharge, all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits, or upon any properties
belonging to it, prior to the date on which penalties attach thereto,
and all lawful claims, which, if unpaid, might become a lien or charge
upon any properties of the Company, a Borrowing Subsidiary or of such
other Subsidiary, provided that none of the Company, any Borrowing
Subsidiary or any other Subsidiary shall be required to pay any such
tax, assessment, charge, levy or claim which is being contested in good
faith and by appropriate proceedings and such contest shall operate to
stay any material adverse effect of such lien or charge;
(b) Use its best efforts to adhere to customary practices
and standards in the industry insofar as adherence to such practices and
standards would require the Company or a Borrowing Subsidiary, as
applicable, to cause obligors whose indebtedness is secured by Pledged
Mortgages to comply with the provisions of such Pledged Mortgages with
respect to the payment of real estate taxes and insurance premiums in
connection with the real estate securing such indebtedness; and
(c) Maintain, and cause each of its Subsidiaries to
maintain, insurance on its properties and other insurance in amounts and
types and with provisions and insurers as shall be satisfactory to the
Required Lenders, and at all times furnish to any Lender (upon written
request by such Lender) copies of its, and each of its Subsidiaries',
current Mortgage Bankers Blanket Bond and of its, and each of its
Subsidiaries', insurance policy containing errors and omissions coverage
or mortgage impairment coverage, and providing, in the case of Mortgage
Bankers Blanket Bonds, to the extent possible, that they are not
cancelable without thirty days' prior written notice to the Agent.
7.2 Preservation of Corporate Existence.
Preserve and maintain, and cause each of its Subsidiaries which
is a material part of the Company's overall business operations to preserve and
maintain, its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified as a
foreign corporation in each jurisdiction in which such qualification is
necessary in view of its business operations or the ownership of its
properties.
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7.3 Compliance with Laws, Etc.
Comply, and cause each of its Subsidiaries to comply, with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority, non-compliance with which would be reasonably likely
to, singly or in the aggregate, materially adversely affect its business or
credit, unless the same shall be contested by the Company, a Borrowing
Subsidiary or such other Subsidiary, as the case may be, in good faith and by
appropriate proceedings and such contest shall operate to stay the material
adverse effect of any such non-compliance.
7.4 Requested Information. At any reasonable time and from time to
time, on reasonable prior notice furnish to the Agent, any requesting Lender or
any agents or representatives thereof, or permit such agents or representatives
to examine and make copies of, the records and books of account of, and visit
the properties of, the Company, the Borrowing Subsidiaries or any of their
Subsidiaries and, so long as representatives of the Company (as chosen by
senior management of the Company) accompany the Agent or any such other Lender,
the Company's Affiliates, and to discuss the affairs, finances and accounts of
the Company, its Subsidiaries and such Affiliates with any of its officers.
7.5 Keeping of Records and Books of Account.
Keep or cause to be kept adequate records and books of account
in which complete entries will be made in accordance with generally accepted
accounting principles, consistently applied (except for changes concurred in by
the Company's independent auditors) reflecting all financial transactions of
the Company and its Subsidiaries.
7.6 Maintenance of Approvals, Filings and Registrations.
At all times maintain in effect, renew and comply with, and
cause each of its Subsidiaries to effect, renew and comply with all the terms
and conditions of all consents, licenses, approvals and authorizations as may
be necessary under any applicable law or regulation for the execution, delivery
and performance of this Agreement, the Security Agreement and the Notes and to
make this Agreement and such other documents legal, valid, binding and
enforceable.
7.7 Reporting Requirements.
Furnish to the Agent for distribution to each Lender:
(a) As soon as possible after becoming aware (i) of the
occurrence of any Default, or (ii) that any of the representations and
warranties contained in Article IV or Article VI has ceased to be true
and correct at any time
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since the last Advance hereunder (or, if no Advance has taken place, the
execution and delivery of this Agreement), telephone advice confirmed in
writing within three (3) Business Days by a statement of the president
or other Authorized Officer of the Company setting forth the details
thereof and the action which the Company proposes to take with respect
thereto.
(b) As soon as available and in any event within ninety
(90) days after the end of each fiscal year of the Company, a
consolidating and consolidated balance sheet of the Company and its
Subsidiaries as of the end of such fiscal year and the related
statements of income and changes in financial position of the Company
and its Subsidiaries including cash flow statements for such fiscal year
on a consolidating and consolidated basis, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported
in accordance with GAAP and audited and unqualified by Ernst & Young or
other independent public accountants of nationally recognized standing.
(c) As soon as available and in any event within forty-five
(45) days after the end of each fiscal quarter of the Company, a
consolidating and consolidated balance sheet of the Company and its
Subsidiaries as of the end of such quarter and the related statements of
income for such quarter and for the portion of the Company's fiscal year
ended at the end of such quarter, all certified (subject to normal
quarter-end adjustments) as to fairness of presentation, generally
accepted accounting principles and consistency by the chief financial
officer of the Company.
(d) Simultaneously with the delivery of each set of
financial statements referred to in clauses (b) and (c) above, a
certificate of the chief financial officer of the Company (A) setting
forth in reasonable detail the calculations required to establish
whether the Company was in compliance with the requirements of Sections
7.9, 8.5, 8.6, 8.9, 8.10, 8.16, 8.17 and 8.20 and, if then applicable,
the Positive Security Conditions and (B) stating whether there exists on
the date of such certificate any Default and, if any Default then
exists, setting forth the details thereof and the action which the
Company is taking or proposes to take with respect thereto.
(e) Within forty-five (45) days after the end of each
fiscal quarter of the Company (or more frequently if reasonably deemed
advisable by the Agent), an appraisal of the value of the Company's
rights under its Servicing Agreements, which appraisal shall (i) be
performed by a third-party appraiser approved by Agent and which shall
itemize the value of such Servicing Agreements in such a
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manner as to allow the computation of the value of the Eligible Pledged
Servicing as set forth in Section 4.6(h)(1), and (ii) be concurrently
sent by the Company to the Collateral Agent.
(f) Promptly after the commencement thereof, notice of (i)
any action or proceeding which has more than a remote possibility of a
determination adverse to the Company or its Subsidiaries (a
"Non-Frivolous Action") instituted by or against the Company or any of
its Subsidiaries in any Federal or state court or before any commission
or other regulatory body (Federal, state or local, domestic or foreign),
or any such Non-Frivolous Action threatened against the Company or any
of its Subsidiaries in writing, which, if adversely determined, would
have a material adverse effect upon the business, assets or financial
condition of the Company, any Borrowing Subsidiary or any other mortgage
banking affiliate of the Company, and (ii) any other action, event or
condition of any nature which may lead to or result in a material
adverse effect upon the business, assets or financial condition of the
Company or any Borrowing Subsidiary or which, with or without notice or
lapse of time or both, would constitute a default under any other
material contract, instrument or agreement to which the Company or any
Borrowing Subsidiary is a party or by which the Company, any Borrowing
Subsidiary or their properties or assets may be bound or subject.
(g) As soon as possible after becoming aware of any change
in the Company's long-term unsecured debt ratings as rated by S&P or
Xxxxx'x, a copy of the S&P or Xxxxx'x publication of such ratings or
other written confirmation of such ratings.
(h) Such other information, financial or otherwise,
respecting the Collateral and the Company's or any Borrowing
Subsidiary's financial statements and condition as the Agent or any
Lender may from time to time reasonably request.
(i) As soon as possible, and in any event within thirty
(30) days after the Company knows or has reason to know that any of the
events or conditions enumerated below with respect to any Plan have
occurred or exist, a statement signed by an Authorized Officer of the
Company setting forth details respecting such event or condition and the
action, if any, which the Company or, to the best knowledge of the
Company, any ERISA Affiliate proposes to take with respect thereto;
provided, however, that if such event or condition is required to be
reported or notice thereof given to PBGC, such statement, together with
a copy of the relevant report or notice to PBGC, shall be furnished to
the Agent within ten
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(10) days after it is reported or notice thereof given to PBGC:
(i) the occurrence of any Reportable Event;
(ii) the filing under Section 4041 of ERISA of a
notice of intent to terminate any Plan or the termination of any
Plan;
(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan; or
(iv) the complete or partial withdrawal by the
Company, any Subsidiary or any ERISA Affiliate from a Plan, or
the receipt by the Company, any Subsidiary or any ERISA
Affiliate of notice from a Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or that it
intends to terminate or has terminated under Section 4041A of
ERISA, if such withdrawal, reorganization, insolvency or
termination has resulted or may reasonably be expected to result
in any liability of the Company, any Subsidiary or any ERISA
Affiliate to the PBGC in connection with such Plan or to such
Plan.
(j) Promptly after the request of the Agent, copies of each
annual report filed pursuant to Section 104 of ERISA with respect to
each Plan (including, to the extent required by Section 104 of ERISA,
the related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information
referred to in Section 103 of ERISA) and each annual report filed with
respect to each Plan under Section 4065 of ERISA.
(k) As soon as available but in any event within thirty
(30) days after the end of each calendar quarter, a servicing report and
analysis which shall show the status of all mortgages serviced by the
Company or any Borrowing Subsidiary including those which are
delinquent, all in such form and detail and including such additional
information as the Agent may reasonably request. Such servicing report
shall show separately information concerning any mortgages or securities
with respect to which there is recourse to the Company or any Borrowing
Subsidiary.
(l) As soon as available but in any event within thirty
(30) days after the end of each calendar quarter, a production
information report and a secondary marketing report for such quarter
satisfactory to the Agent.
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(m) Promptly upon receipt, a copy of any notice from any
Federal Agency or any private mortgage insurer to the effect that it is
or is contemplating withdrawing its approval of the Company or any
Borrowing Subsidiary as a FHA-Approved Mortgagee, FHLMC-Approved
Lender, FNMA-Approved Lender or VA-Approved Lender or as an approved
seller and servicer for FNMA, FHLMC and GNMA.
(n) Promptly after the Company's or any Subsidiary's
acquisition or creation of a new Subsidiary, written notice of such
event, which notice shall set forth the details of such event, the
percentage of capital stock owned by the Company or any other
Subsidiary, and the jurisdiction of incorporation of such new
Subsidiary.
(o) Promptly after the sending or filing thereof, copies of
all such proxy statements, financial statements and reports which the
Company sends to its stockholders, and copies of all regular, periodic
and special reports (other than Form 8-K reports containing only the
distribution reports relating to the Fireman's Fund Mortgage Corporation
Agency MBS Multi-Class Pass-Through Certificates, which the Company need
send to the Agent only and which the Agent shall make available to the
other Lenders upon request) and all final prospectuses which the Company
files with the SEC (if applicable), or any governmental authority which
may be substituted therefor, any Federal Agency, or any other
governmental agency.
(p) On each Business Day, a statement from the issuing and
paying agent for the Outstanding CPNs setting forth the aggregate face
amount of the Outstanding CPNs being issued on such Business Day, being
repaid on such Business Day and remaining outstanding at the end of such
Business Day, all in a form satisfactory to the Agent, which statement
need be transmitted to the Agent only.
(q) As soon as available and in any event within forty-five
(45) days after the end of each fiscal quarter of the Company and each
Borrowing Subsidiary, a list showing (i) each individual Guaranty in
excess of $1,000,000 of the Company or any Borrowing Subsidiary then in
effect (and the amounts thereof) and (ii) the aggregate amount of all
other Guarantees of the Company or any Borrowing Subsidiary then in
effect, certified as true and correct by Authorized Officers of the
Company and Borrowing Subsidiary.
(r) Such other information respecting the business,
properties or the condition or operation of the Company or its
Subsidiaries, financial or otherwise, as the Agent or any Lender may
from time to time reasonably request.
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(s) Notice of the occurrence of any of the following events,
immediately upon the Company's acquisition of knowledge thereof: (i) the
occurrence of an "Event of Default" (as defined in Article Five of the
Subordinated Debt Indenture), (ii) the deferral by the Company of any
quarterly installment of interest on the Subordinated Debt, (iii) the
acceleration of the entire principal amount of any series of securities
issued under the Subordinated Debt Indenture, (iv) the execution of any
amendment or supplement to the Subordinated Debt Indenture, or (v) the
resignation or removal of the trustee under the Subordinated Debt
Indenture, or any change in the notice address of such trustee.
7.8 Indemnification.
Pay, and protect, indemnify and save harmless, the Agent, the
Collateral Agent, each of the Lenders and the Affiliates of each of the
foregoing and, in their capacity as such, their respective officers, directors,
shareholders, controlling persons, employees, agents and servants from and
against all liabilities, losses, claims, damages, penalties, causes of action,
suits, costs and expenses (including, without limitation, attorneys' fees and
expenses) or judgments of any nature arising from the default of the Company or
any Borrowing Subsidiary in the performance of their respective agreements,
rights or obligations contained in this Agreement, the Security Agreement, the
Notes or any other instrument or agreement entered into by the Company or any
Borrowing Subsidiary in connection herewith or therewith or arising out of this
Agreement or the transactions contemplated herein; provided, that neither the
Company nor any Borrowing Subsidiary shall have any obligation hereunder to the
Agent, the Collateral Agent or any Lender or any other Person indemnified
pursuant to this Section 7.8 with respect to indemnified liabilities arising
from (1) the gross negligence or willful misconduct of such Person indemnified
pursuant to this Section 7.8, or (2) legal proceedings commenced against the
Agent, the Collateral Agent or any Lender by any other Lender or any
Participant. If any action, suit or proceeding arising from any of the
foregoing is brought against the Agent, the Collateral Agent or any Lender or
any other person indemnified pursuant to this Section 7.8, the Company and each
Borrowing Subsidiary will, if within a reasonable time requested in writing to
do so and at its expense, resist and defend such action, suit or proceeding or
cause the same to be resisted and defended by counsel designated by the Company
or Borrowing Subsidiary (which counsel shall be satisfactory to the party being
indemnified). The obligations of the Company and the Borrowing Subsidiaries
under this Section 7.8 shall survive any termination of this Agreement.
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7.9 Maintenance of Net Worth.
At all times, maintain the sum of (x) Adjusted Consolidated
Tangible Net Worth plus (y) Subordinated Debt in an amount at least equal to
the sum of:
(i) $280,000,000, plus
(ii) fifty percent (50%) of the positive cumulative quarterly increases,
if any, in Adjusted Consolidated Tangible Net Worth of the Company after
July 1, 1996 (computed without regard to any increase or decrease
resulting from (1) the contribution or distribution of Capital
Securities, (2) cash equity contributions to the Company, (3) the
receipt of proceeds of issuances of stock of the Company, (4) the
exchange of Subordinated Debt for Series A Preferred Stock, (5) the
payment of Restricted Payments) for each calendar quarter beginning with
calendar quarter beginning July 1, 1996.
7.10 Federal Agency Approvals.
Maintain its status as a FHA-Approved Mortgagee, remain eligible to
obtain VA guaranties of Mortgage Loans and remain approved by each Federal
Agency as a seller/servicer.
7.11 Approved Investor Commitments.
Maintain all of its Mortgage Loans included in Collateral and
all other Mortgage Loans owned by the Company or any Borrowing Subsidiary, as
applicable, which satisfy the delivery requirements of any then-current
Approved Investor Commitments to purchase Mortgage Loans or to exchange
Securities for Mortgage Loans held by the Company or any Borrowing Subsidiary
(in each case, other than any Mortgage Loans held by the Company or a Borrowing
Subsidiary solely for investment) in compliance with such Approved Investor
Commitments and perform all of its obligations in connection with such
commitments.
7.12 Borrowing Base Certificate.
Within the first ten (10) days of each month, and within three
Business Days after any request therefor by the Agent, deliver to the Agent a
Borrowing Base Certificate (which shall include the Company's reconciliation of
any discrepancies from the Collateral Agent's reports on the status of Eligible
Collateral at the end of the preceding month), together with a certificate of
the chief financial officer or other Authorized Officer of the Company
confirming compliance with Sections 7.9, 8.5, 8.9, 8.12 and 8.20 and, if then
applicable, with the Positive Security Conditions. Each regular monthly
Borrowing Base Certificate shall contain information as of the close of
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business on the final Business Day of the preceding month. Any Borrowing Base
Certificate delivered pursuant to the request of the Agent shall contain
information as of the close of business on the day on which the Agent requested
such Borrowing Base Certificate. Notwithstanding the two preceding sentences,
information contained in such Borrowing Base Certificates relating to Eligible
Repurchased Agency Loans and Receivables or Eligible Pledged Servicing may be
as of the latest dates on which the Company calculated the value of Eligible
Repurchased Agency Loans and Receivables and Eligible Pledged Servicing;
provided that such calculations shall be made (A) at least once per week with
respect to Repurchased Agency Loans and Receivables, and (B) at least once per
month and also immediately after any purchase or sale of any Servicing
Agreements with an aggregate unpaid principal balance of $1,000,000,000 or more
with respect to Eligible Pledged Servicing. An Authorized Officer of each
Borrowing Subsidiary shall certify as to the accuracy of each Borrowing Base
Certificate with respect to Collateral reflected therein which is owned by such
Borrowing Subsidiary.
7.13 Further Assurance.
As from time to time requested by the Agent and agreed upon by
the Required Lenders, at the cost and expense of the Company, execute and
deliver to the Agent all such documents and instruments and do all such other
acts and things as may be reasonably required to enable the Lenders to exercise
and enforce their rights under this Agreement and to realize thereon, and as
may be necessary to validate, preserve and protect the position of the Lenders
under this Agreement. With respect to those elements of Collateral as to which
the Lenders' security interest may not be perfected by delivery to the
Collateral Agent with the Security Agreement or the filing of a UCC-1 financing
statement, including but not limited to the Approved Investor Commitments and
any options, futures contracts or other interest rate protection products, the
Company and/or the applicable Borrowing Subsidiary, as requested by the Agent
at the direction of the Required Lenders, shall execute and deliver possession
of such elements of the Collateral to the Agent, have the interest of the
Lenders therein recorded on the books of any institution holding such assets
for the Company or the applicable Borrowing Subsidiary, obtain consents to
assignment in favor of the Lenders from the counterparties thereto or take such
other actions as may be necessary to perfect the security interest of the
Lenders therein (provided, however, that unless an Event of Default is
continuing or the Required Lenders have requested otherwise, consents to
assignments of options, futures contracts or other interest rate protection
products in favor of the Lenders from the counterparties thereto shall not be
required).
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7.14 Maintenance of Properties.
Do all things necessary to maintain, preserve, protect and keep
its properties in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times.
7.15 Payment of Taxes.
On demand pay, or reimburse the Agent and Lenders for, all
stamp, documentation, intangible, or similar taxes, and all penalties or
interest that may be due with respect thereto, that may be imposed or asserted
by the State of Florida or any other jurisdiction in connection with the
execution and delivery of the Credit Documents or the making of the Loans
contemplated by this Agreement.
ARTICLE VIII
NEGATIVE COVENANTS
The Company covenants and agrees (and each Borrowing Subsidiary
covenants and agrees with respect to Sections 8.1, 8.2, 8.3, 8.4, 8.6, 8.7,
8.8, 8.11, 8.13, 8.14, 8.15, 8.17 and 8.18) with the Lenders that so long as
this Agreement shall remain in effect or any amounts are outstanding under the
Notes or this Agreement, unless the Required Lenders (or all Lenders, if
expressly required) shall otherwise consent in writing, the Company (or the
Borrowing Subsidiaries where applicable) (on a consolidated basis with its
Subsidiaries) shall not, directly or indirectly:
8.1 Use of Proceeds.
Use the amounts obtained under this Agreement for any purposes
other than (i) the purposes described in the recitals hereto, (ii) the funding
or purchasing of Mortgage Loans, (iii) the payment of principal, interest,
fees, expenses and other obligations described in or contemplated by this
Agreement, (iv) payment of Debt of the Company existing on the date hereof, and
(v) such other purposes permitted under this Agreement. Neither the Company
nor any Borrowing Subsidiary is engaged, nor will they engage, principally or
materially in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" (within the meanings of each of the quoted
terms under Regulation U). If requested by a Lender, the Company and each
Borrowing Subsidiary shall each furnish to the Agent for the benefit of the
Lenders a statement in conformity with the requirements of Federal Reserve Form
U-1 referred to in Regulation U. No part of the proceeds of any Loan will be
used for any purpose which violates, or which would be inconsistent
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with, the provisions of the Regulations of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect.
8.2 Compliance with Security Agreement.
Enter into any collateral custodial agreement similar to the
Security Agreement for Mortgage Loans not included in Collateral with any
entity other than the Collateral Agent or fail to duly perform any of its
obligations under the Security Agreement; provided, however, that this Section
shall not prohibit the Company or any Borrowing Subsidiary from entering into
other custodial agreements relating to the possession of Mortgage Loans not
included in Collateral so long as such agreements are not made for the purpose
of or in connection with the granting of a security interest in such Mortgage
Loans. Security interests in Mortgage Loans given for confirmatory purposes in
connection with the sale of such Mortgage Loans by the Company or a Borrowing
Subsidiary to investors shall not be considered agreements "made for the
purpose of or in connection with the granting of a security interest in such
Mortgage Loans" within the meaning of the preceding sentence.
8.3 Mergers; Subsidiaries.
Merge or consolidate with any Person, or sell or otherwise
dispose of (whether in one transaction or in a series of transactions) the
shares of any of its Subsidiaries to any Person, provided that the Company may,
after prior written notice to the Agent and Lenders, (i) undertake such a
merger or consolidation so long as the Company shall be the surviving or
resulting company and (ii) take such action with respect to any Subsidiary
which is not a material part of the Company's overall business operations.
8.4 Sales.
Sell, assign, lease or otherwise dispose of (collectively,
"Transfer"), whether in one transaction or a series of transactions, all or
substantially all of its assets (whether now owned or hereafter acquired) to
any Person, or allow any Subsidiary to Transfer substantially all of its assets
to any Person (other than another Subsidiary or a Parent), provided that the
Company may after prior written notice to the Agent and Lenders allow such
action with respect to any Subsidiary which is not a material part of the
Company's overall business operations. Transfers described in this Section 8.4
and the mergers, consolidations and dispositions described in Section 8.3
(whether or not permitted by the provisions of such Sections) are referred to
herein as "Fundamental Changes."
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8.5 Debt. Allow the total Debt (excluding Subordinated Debt) of the
Company and its Subsidiaries (on a consolidated basis) to exceed the sum of the
following (the "Debt Threshold"):
(a) one hundred percent (100%) of the value of the
Company's cash and "short-term investments";
(b) ninety-eight percent (98%) of the value of the
Company's "mortgage loans receivable";
(c) ninety percent (90%) of the value of the Company's
"pool loan purchases" and "mortgage claims receivable", to the extent
such assets represent VA Mortgage Loans and FHA Mortgage Loans
repurchased by the Company from GNMA Security holders;
(d) seventy-five percent (75%) of the amount of Servicing
Sale Receivables which would qualify as Eligible Pledged Servicing Sale
Receivables if such Servicing Sale Receivables were pledged as
Collateral;
(e) seventy-five percent (75%) of "loans held for
investment"; and
(f) the lesser of:
(1) sixty-five percent (65%) of the sum of (A) for
Servicing Agreements not covered by the then most recent
appraisal of the value of the Company's Servicing Agreements
pursuant to clause (B) immediately below, the lesser of
acquisition price or the appraised market value (which shall be
as set forth in an appraisal dated no more than 30 days prior to
acquisition of such Servicing Agreements by a qualified
third-party appraiser approved by the Agent, with such appraisal
to be obtained and paid for by the Company and delivered to the
Agent) of such Servicing Agreements (i.e. such Servicing
Agreements shall be valued at zero unless such an appraisal has
been obtained), and (B) for all other Servicing Agreements, the
appraised market value (which shall be determined every three
months (or more frequently at the request of the Company, or if
reasonably deemed advisable by the Agent, the Agent) by a
qualified third-party appraiser approved by the Agent, with such
appraisals to be obtained and paid for by the Company and
delivered to the Agent) of such Servicing Agreements (provided
that if any Servicing Agreements have been sold by the Company
since the date of the most recent appraisal, then the appraised
value of the Company's Servicing Agreements shall be deemed
reduced by an amount obtained by multiplying (i) the appraised
market value of all Servicing Agreements prior to such
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servicing sale by (ii) a fraction having a numerator equal to
the aggregate principal outstanding balance of the Mortgage
Loans serviced under the sold Servicing Agreements as of the
date of sale and a denominator equal to the aggregate principal
outstanding balance of the Mortgage Loans serviced pursuant to
all of the Servicing Agreements (including the sold Servicing
Agreements) covered by the most recent servicing appraisal as of
the date of sale); and
(2) the sum of (A) one percent (1.00%) of the
aggregate outstanding principal balance of the Mortgage Loans
serviced by the Company pursuant to Servicing Agreements with
FNMA, FHLMC or any other Person other than GNMA, FHA or VA and
(B) one and one-quarter percent (1.25%) of the aggregate
outstanding principal balance of the Mortgage Loans serviced by
the Company pursuant to Servicing Agreements with GNMA, FHA or
VA.
Terms set forth in quotes in this Section shall have the meanings given such
terms in the Company's consolidated financial statements.
8.6 Ratably Secured Debt. Increase the amount of or extend the
maturity of the Ratable Medium-Term Notes or incur any other Debt which may be
entitled to a security interest in any of the Collateral which would be equal
or superior to the security interest of Collateral Agent as agent for the
Secured Parties.
8.7 Guarantees.
Create, incur, assume or suffer to exist any Guarantee of the
Company or a Borrowing Subsidiary except Guarantees in an aggregate combined
amount for the Company and the Borrowing Subsidiaries not to exceed $25,000,000
at any one time outstanding.
8.8 Investments.
Make or own any Investment in any Person, except:
(a) Investments in the ordinary course of its mortgage
banking business in connection with mortgage loans, collateralized
mortgage obligations and other mortgage-related securities;
(b) Investments in the ordinary course of its mortgage
banking business in connection with puts, calls, swaps and other
interest rate hedging products, options and futures contracts to provide
protection from interest rate fluctuation;
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(c) Investments in the ordinary course of its mortgage
banking business in connection with real estate acquired by foreclosure;
(d) Investments in the ordinary course of the Company's
mortgage banking business in connection with servicing rights;
(e) Investments in the ordinary course of its mortgage
banking business in connection with commitments from investors to
purchase Mortgage Loans or mortgage-related securities;
(f) the acquisition of the Mortgage Loans, Securities and
mortgage servicing contracts of another Person engaged in
mortgage-related businesses;
(h) Investments in Cash Equivalents;
(i) those Investments in existence on the date hereof and
disclosed in the financial statements referred to in Section 6.6;
(j) loans to officers of the Company in an aggregate
principal amount at any time outstanding not to exceed $5,000,000;
(k) loans and advances to employees of the Company, or its
Subsidiaries for (i) travel and entertainment in the ordinary course of
business in an aggregate amount for the Company and its Subsidiaries not
to exceed $100,000 at any one time outstanding and (ii) relocation
expenses in the ordinary course of business in an aggregate amount for
the Company and its Subsidiaries not to exceed $1,000,000 at any one
time outstanding;
(l) Investments of up to 10% of the Company's net worth (as
determined in accordance with GAAP) by the Company in its Subsidiaries
and investments by such Subsidiaries in the Company and in other
Subsidiaries;
(m) Investments made by any Subsidiary in the ordinary
course of its business;
(n) Investments in equity securities which (1) are traded
on the New York Stock Exchange, the American Stock Exchange or NASDAQ,
(2) are subject to no transfer restrictions, and (3) have a readily
determinable market value, in an aggregate market value amount not to
exceed $25,000,000 (which market value shall be determined by the
Company and reported to the Agent on a monthly basis, or more frequently
at the request of the Agent);
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(o) repurchase and reverse repurchase contracts incidental
to the mortgage-related businesses of the Company and its Subsidiaries
in an aggregate dollar amount not to exceed $250,000,000 and 25,000,000
respectively; and
(p) other Investments if, after giving effect to any such
Investment, the consolidated net revenues (determined in accordance with
GAAP) of all business segments that constitute mortgage-related
businesses of the Resulting Entity for the Fundamental Change/Investment
Calculation Period are at least 75 percent of the total net revenues
(determined in accordance with GAAP) of the Resulting Entity for the
Fundamental Change/Investment Calculation Period.
8.9 Leverage Ratios.
Permit the ratio of (1) Funded Debt less Subordinated Debt to
(2) Adjusted Consolidated Tangible Net Worth plus Subordinated Debt to exceed
the following:
(a) while the Facility is secured:
Level of Aggregate Commitment Maximum Leverage Ratio
----------------------------- ----------------------
0 - $750,000,000 5.0 to 1
$750,000,001 - $850,000,000 5.5 to 1
$850,000,001 - $950,000,000 6.0 to 1
$950,000,001 - $1,050,000,000 6.5 to 1
$1,050,000,001 - $1,150,000,000 7.0 to 1
$1,150,000,001 - $1,250,000,000 7.5 to 1
(b) while the Facility is unsecured pursuant to Section
4.13(a):
Level of Aggregate Commitment Maximum Leverage Ratio
----------------------------- ----------------------
0 - $750,000,000 4.0 to 1
$750,000,001 - $850,000,000 4.5 to 1
$850,000,001 - $950,000,000 5.0 to 1
$950,000,001 - $1,050,000,000 5.5 to 1
$1,050,000,001 - $1,150,000,000 6.0 to 1
$1,150,000,001 - $1,250,000,000 6.5 to 1
8.10 Recourse Servicing.
Permit the principal balance of Mortgage Loans covered by
Recourse Servicing to exceed the lesser of:
(i) the sum of (A) the aggregate principal balance of all Mortgage Loans
covered by Recourse Servicing owned by the Company as of September 30,
1996 plus (B) the aggregate principal balance of all Mortgage Loans
covered by Recourse
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Servicing acquired by the Company from and after October 1, 1996 as a
part of a larger acquisition of Servicing Agreements, but not in excess
of an additional $100,000,000 in principal balance of Mortgage Loans
covered by Recourse Servicing less (C) all reductions in such aggregate
principal balances, whether by reason of prepayment or amortization from
and after October 1, 1996 (or the date of later acquisition, as the case
may be) and less (D) the aggregate principal balance of any Mortgage
Loans covered by any such Recourse Servicing sold by the Company after
September 30, 1996; or
(ii) eleven and one-half percent (11.5%) of the aggregate outstanding
principal balance of all Mortgage Loans covered by the Company's
Servicing Agreements other than Subservicing Agreements, whether or not
such Servicing Agreements qualify as Eligible Pledged Servicing;
except that from and after the date that the principal balance of Mortgage
Loans covered by Recourse Servicing first falls below an amount equal to (a)
ten percent (10%) of the aggregate outstanding principal balance of all
Mortgage Loans then covered by the Company's Servicing Agreements other than
Subservicing Agreements minus (b) $100,000,000, the principal balance of
Mortgage Loans covered by Recourse Servicing shall not exceed ten percent (10%)
of the aggregate outstanding principal balance of all Mortgage Loans then
covered by the Company's Servicing Agreements other than Subservicing
Agreements.
8.11 Liens.
Permit, or permit any Subsidiary to permit, any Lien to exist on
any of its property or assets (including, without limitation, the Company's
rights under any contracts relating to mortgage sales and under any Servicing
Agreements) other than:
(a) Liens for taxes, assessments and other governmental
impositions not yet due or which are being contested in good faith by
appropriate proceedings, provided, that adequate reserves with respect
thereto are maintained on the books of the Company or its Subsidiaries,
as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business and securing obligations which are not overdue for a period of
more than 60 days or which are being contested in good faith by
appropriate proceedings, provided, that adequate reserves with respect
thereto are maintained on the books of the Company or its Subsidiaries,
as the case may be, in accordance with GAAP;
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(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business which,
in the aggregate, are not substantial in amount and which do not in any
case materially detract from the value of the property subject thereto
or interfere with the ordinary conduct of the business of the Company or
such Subsidiary;
(f) Liens of landlords, arising solely by operation of law
and which are not avoidable as a matter of law, on fixtures and moveable
property located on premises leased in the ordinary course of business,
provided, that the rental payments secured thereby are not yet due;
(g) Liens arising out of judgments or awards against the
Company or any Subsidiary with respect to which the Company or such
Subsidiary is prosecuting an appeal or proceeding for review and the
Company or such Subsidiary is maintaining adequate reserves in
accordance with GAAP;
(h) Liens which were in existence on December 31, 1995 and
which secured obligations reflected in the financial statements referred
to in Section 6.6;
(i) Liens upon real and/or tangible personal property,
which property was acquired after December 31, 1995 (by purchase,
construction or otherwise) by the Company or its Subsidiaries, each of
which Liens either (A) existed on such property before the time of its
acquisition and was not created in anticipation thereof at the request
or direction of the Company, or (B) was created solely for the purpose
of securing Debt representing, or incurred to finance, refinance or
refund, the cost (including the cost of construction) of the respective
property; provided, that no such Lien shall extend to or cover any
property of the Company or such Subsidiary other than the respective
property so acquired and improvements thereon;
(j) Liens incidental to the conduct of the Company's or a
Borrowing Subsidiary's mortgage-related businesses or the ownership of
its property or arising out of transactions entered in the ordinary
course of the Company's or a
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Borrowing Subsidiary's mortgage-related businesses which do not secure
Debt and do not, in the aggregate, materially detract from the value of
its properties in the aggregate or materially impair the use thereof in
the ordinary course of the Company's or such Borrowing Subsidiary's
business;
(k) Liens on assets of corporations which become
Subsidiaries after the date of this Agreement; provided, that (i) such
Liens existed at the time such corporation became a Subsidiary and were
not created in anticipation thereof, (ii) any such Lien is not spread to
cover any property or assets of such corporation after the time such
corporation becomes a Subsidiary (other than any such spreading
resulting from "after-acquired property" clauses in existence on the
date such corporation became a Subsidiary) and (iii) the amount of Debt
secured thereby is not increased;
(l) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any Lien
referred to in the foregoing clauses; provided, that the principal
amount of Debt secured thereby shall not exceed the principal amount of
Debt so secured immediately prior to the time of such extension, renewal
or replacement, and that such extension, renewal, or replacement Lien
shall be limited to all or a part of the property which secured the Lien
so extended, renewed or replaced (plus improvements on such property);
(m) Liens (not otherwise permitted hereunder) which secure
obligations not exceeding (as to the Company and all Subsidiaries)
$15,000,000 in an aggregate principal amount at any one time
outstanding;
(n) Liens (not otherwise permitted hereunder) which secure
obligations (as to the Company and all Subsidiaries) (1) incidental to
forward delivery contracts or repurchase agreements in the ordinary
course of the Company's or a Borrowing Subsidiary's mortgage-related
businesses or (2) incidental to Investments by the Company in the
ordinary course of its mortgage banking business in connection with
puts, calls, swaps and other interest rate hedging products, options and
futures contracts to provide protection from interest rate fluctuation;
and
(o) the Liens arising under the Security Agreement
(including the Liens in favor of the holders of the Ratable Medium-Term
Debt as Secured Parties) or any other Credit Document;
provided, however, that so long as no Event of Default has occurred and is
continuing and the security interest in favor of the Collateral Agent is in
effect and is not abated pursuant to
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Section 4.13(a), the Company may also permit Liens on Securities and Mortgage
Loans owned by the Company (other than Securities or Mortgage Loans
constituting Collateral) to secure Debt incurred from sources other than the
Secured Parties for the purpose of originating or purchasing such Securities or
Mortgage Loans.
8.12 Credit Requirement.
Permit the Aggregate Borrowing Base to be less than the Credit
Requirement.
8.13 Affiliate Transactions.
Enter, or permit any Subsidiary to enter, into any transactions
with the Company's Parent or Affiliates that is not an arm's-length transaction
or that in any material respect is less advantageous to the Company or such
Subsidiary than a similar typical transaction with an unrelated third-party;
make any loans or advances to the Parent or any Affiliates with financial terms
more advantageous to the Parent or Affiliate than the terms of loans and
advances made to the Company from any such Parent or Affiliate; or make any net
loans or advances to the Parent or any Affiliates which would cause any
violation of Sections 7.9 or 8.9.
8.14 Conduct of Business.
Except as permitted under Section 8.8:
(a) enter into any material line of new business other than
businesses related to its current businesses, materially change the
nature of its business, cease to carry on its business as now conducted,
or
(b) fail to maintain its corporate existence, licenses,
franchises and privileges.
8.15 FHA and other Approvals.
Cause any Federal Agency which insures any material portion of
the Mortgage Loans owned or serviced by the Company or any Borrowing Subsidiary
to withdraw its approval of the Company or any Borrowing Subsidiary, or become
ineligible or allow any Borrowing Subsidiary to become ineligible as a lender
under the VA loan guaranty program.
8.16 Restricted Payments.
Make any Restricted Payments; provided, however, so long as no
Default arising from the Company's failure to comply with Section 7.9 has
occurred and is continuing (or would result from any such payment) and no Event
of Default has occurred and is
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continuing (or would result from any such payment), the Company may make
Restricted Payments as expressly permitted by subparagraphs (a) and (b) below:
(a) The Company may make Restricted Payments:
(i) through June 30, 1997, in an amount which, when added to
all other Restricted Payments (including Restricted Payments
made pursuant to Section 8.16(b)(i) below) made subsequent to
June 30, 1996, does not exceed fifty percent (50%) of the
increase, if any, in Adjusted Consolidated Tangible Net Worth
from June 30, 1996 through the completed calendar quarter
preceding any such Restricted Payment; and
(ii) from and after July 1, 1997, in an amount which, when
added to all other Restricted Payments made in the calendar
quarter when any such Restricted Payment is made and all
Restricted Payments made during the prior three completed
calendar quarters, does not exceed fifty percent (50%) of the
increase, if any, in Adjusted Consolidated Tangible Net Worth
during the most recent four consecutive calendar quarters
completed prior to any such Restricted Payment.
The increase in Adjusted Consolidated Tangible Net Worth
referenced in this Subsection (a) shall be computed without regard to
any increase or decrease resulting from the following activities: (1)
the contribution or distribution of Capital Securities, (2) cash equity
contributions to the Company, (3) the receipt of proceeds of issuances
of stock of the Company, (4) increases or decreases in the amount of
Subordinated Debt, or (5) the payment of permitted Restricted Payments.
(b) The Company may, without regard to the maximum limit on
Restricted Payments established by Subsection (a) above:
(i) pay dividends required to be paid on its Series A Preferred
Stock and pay interest that is due and payable on the
Subordinated Debt, provided that all payments made pursuant to
this clause (i) shall still be included for purposes of
determining the maximum amount of dividends and distributions
payable under Subsection (a);
(ii) make additional Restricted Payments during the fourth
calendar quarter of 1996 not to exceed $60,000,000 in value in
the aggregate, which additional Restricted Payments made
pursuant to this clause (ii)
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shall not be included in determining the maximum amount of
Restricted Payments made under Subsection (a);
(iii) distribute Capital Securities; and
(iv) distribute the proceeds (whether cash or non-cash proceeds)
of issuances of stock (whether in connection with a public
offering, a merger or otherwise) of the Company made after the
date hereof.
At the time the Company pays or makes any such Restricted Payment, it
shall notify the Agent in writing of the amount of such payment, which notice
shall (1) specify under which subparagraph and clause above the Restricted
Payment is being made and (2) contain such information as is necessary to
demonstrate that such dividend is permissible under the applicable subparagraph
and clause.
8.17 Borrowing Subsidiary Liabilities and Secured Debt. Allow (i)
TMA's total liabilities (as defined by GAAP), other than liabilities to the
Company or its Affiliates, to exceed at any time $5,000,000, (ii) CPM's total
liabilities for borrowed money other than money borrowed by CPM under this
Agreement or borrowed from the Company or its Affiliates to exceed at any time
$10,000,000, or (iii) any Borrowing Subsidiary to create or suffer any Liens on
any of its assets to secure the repayment of borrowed money.
8.18 Funding of Borrowing Subsidiary Mortgage Loans. Discontinue the
method by which the Company directly funds Mortgage Loans pledged by the
Borrowing Subsidiaries as Collateral or amend or terminate any Funding
Agreement without the prior written consent of the Required Lenders, which
consent shall not be unreasonably withheld.
8.19 Subordinated Debt Indenture.
(a) Enter into, without the prior written consent of
the Required Lenders, any amendment or modification of the Subordinated
Debt Indenture or other documents evidencing or governing the terms of
the Subordinated Debt if such amendment or modification would change (i)
the principal amount of or rate of interest on the Subordinated Debt,
(ii) the terms of repayment of the Subordinated Debt, (iii) the
provisions relating to the deferral of interest on the Subordinated
Debt, (iv) any terms or provisions of Article 12 (Subordination) of the
Subordinated Debt Indenture, (v) the definition of "Event of Default" in
the Subordinated Debt Indenture, or (vi) the provision of the
Subordinated Debt Indenture which requires the trustee to give certain
holders of senior indebtedness notices of defaults, accelerations and
certain other events; provided, however, that the Lenders
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hereby consent to that certain First Supplemental Indenture dated
December 1, 1995; or
(b) Enter into, without the prior written consent of
the Agent, any material amendment or modification of the Subordinated
Debt Indenture or other documents evidencing or governing the terms of
the Subordinated Debt other than the amendments or modifications
requiring the consent of the Required Lenders pursuant to clause (a)
above; or
(c) Consent, without prior written notice to the Agent,
to any change in the trustee under the Subordinated Debt Indenture.
8.20 Minimum Cash Flow Coverage Ratio. Permit the ratio of (1)
Consolidated Operating Cash Flow for any four consecutive calendar quarters to
(2) Consolidated Interest and Dividend Expense for such four consecutive
calendar quarters, to be less than 1.75 to 1.00. Such ratio shall be
calculated at the end of each calendar quarter beginning with the calendar
quarter ending December 31, 1996 using Consolidated Operating Cash Flow and
Consolidated Interest and Dividend Expense for the four most recently completed
calendar quarters.
ARTICLE IX
THE AGENT
9.1 Appointment and Authorization.
(a) Each Lender irrevocably appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such
powers under this Agreement as are delegated to the Agent by the terms
hereof together with all such powers as are reasonably incidental
thereto.
(b) The Agent is hereby authorized to enter into the
Security Agreement on behalf of the Lenders and all obligations of the
Lenders thereunder shall be binding upon each Lender as if such Lender
had executed the Security Agreement. Each Lender hereby appoints and
authorizes the Collateral Agent to act on its behalf in the capacity
described in the Security Agreement and authorizes the Collateral Agent
to act on such Lender's behalf in all respects with regard to
performance under the Security Agreement.
(c) Unless and until the Agent shall have received the
directions of the Required Lenders as provided in Section 10.2(1) or (2)
or of all Lenders, if expressly required hereunder, the Agent may (but
shall not be obligated to) take or refrain from taking such action, or
direct the
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Collateral Agent to take or refrain from taking such action with respect
to an Event of Default as it shall deem advisable in the best interests
of the Lenders.
(d) The Agent shall not be required to take any action
hereunder if it shall reasonably determine that by so doing it may incur
criminal or civil liability.
9.2 Agent and Affiliates.
The Agent shall have the same rights and powers under this
Agreement as any other Lender and may exercise or refrain from exercising the
same as though it were not the Agent, and the Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with, the Company, any Subsidiary or Affiliate of the Company as if it
were not the Agent hereunder.
9.3 Action by Agent.
The obligations of the Agent hereunder are only those expressly
set forth herein. Without limiting the generality of the foregoing, the Agent
shall not be required to take any action with respect to any Default, except as
expressly provided in this Article IX or in Article X.
9.4 Consultation with Experts.
The Agent may consult with legal counsel (who may be counsel for
the Company), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.
9.5 Liability of Agent.
(a) Neither the Agent nor any of its directors, officers,
agents, or employees shall be liable for any action taken or not taken
by it in connection herewith (i) with the consent or at the request of
the Required Lenders or of all Lenders, if required or (ii) in the
absence of its own gross negligence or willful misconduct.
(b) Neither the Agent (except as otherwise provided in this
Agreement) nor any of its directors, officers, agents or employees shall
be responsible for or have any duty to ascertain, inquire into or verify
(i) any statement, warranty or representation made in
connection with this Agreement or any Advance hereunder;
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(ii) the performance or observance of any of the
covenants or agreements of the Company or any Borrowing
Subsidiary;
(iii) the satisfaction of any condition specified
in Article V, except receipt of items required to be delivered
to the Agent and the determination of the amount of the Credit
Requirement; or
(iv) the validity, effectiveness or genuineness of
this Agreement, the Notes or any other instrument or writing
furnished in connection herewith.
(c) The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex or similar writing) or
telephone communication believed by it to be genuine or, in the case of
a writing, to be signed by the proper party or parties.
9.6 Indemnification.
(a) Each Lender shall, ratably in accordance with its share
of the Aggregate Commitment (or, if the Commitments have been
terminated, then in accordance with its share of aggregate Loans then
outstanding) at the time the Agent or the Collateral Agent incurred such
liability, indemnify the Agent and the Collateral Agent (to the extent
not reimbursed by the Company or a Borrowing Subsidiary or from any
portion of the Collateral proceeds allocated to the holders of the
Ratable Medium-Term Notes) against any cost, expense (including
reasonable counsel fees and disbursements), claim, demand, action, loss
or liability (except such as result from the indemnified party's gross
negligence or willful misconduct) that the Agent or the Collateral Agent
may suffer or incur in connection with this Agreement or the Security
Agreement or any action taken or omitted by the Agent or the Collateral
Agent hereunder or thereunder.
(b) For the purposes of this Section, the amount of any
Commitment of any Lender shall be the highest amount of such Commitment
of such Lender during the course of any event for which indemnity is
sought.
(c) The provisions of this Section shall survive the
termination of this Agreement.
9.7 Credit Decision.
Each Lender acknowledges that it has itself been and will
continue to be, independently and without reliance upon the Agent or any other
Lender, solely responsible for making its own
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independent appraisal of and investigations into the financial condition,
creditworthiness, condition, affairs, status and nature of the Company and the
Borrowing Subsidiaries. Accordingly, each Lender confirms to the Agent that it
has not relied, and will not hereafter rely, on the Agent or any other Lender
(i) except as otherwise provided in this Agreement, to check or inquire on such
Lender's behalf into the adequacy, accuracy or completeness of any information
provided by the Company or any Borrowing Subsidiary under or in connection with
this Agreement or the transactions herein contemplated (whether or not such
information has been or is hereafter distributed to such Lender by the Agent)
or (ii) to assess or keep under review on such Lender's behalf the financial
condition, creditworthiness, condition, affairs, status or nature of the
Company, any Borrowing Subsidiary or any Approved Investor.
9.8 Resignation or Removal and Appointment of Successor Agent.
The Agent may resign at any time by giving 90 days prior written
notice thereof to the Lenders and the Company. The Agent may be removed at any
time upon ninety (90) days prior written notice from the Required Lenders.
Upon any such resignation or removal notice the Required Lenders shall have the
right to appoint a successor Agent; provided that such appointment, unless made
after the occurrence of a Default and during the continuance thereof, shall be
subject to the consent of the Company, which consent shall not be unreasonably
withheld. If the Company and/or Required Lenders, as applicable, are unable to
agree on the appointment of a successor agent within such 90 day period, the
retiring agent shall appoint one of the Lenders as a successor agent for the
Lenders. Upon the appointment of a successor Agent, that successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement; provided, however, that
the resigning Agent shall not be discharged from any liability as a result of
its or its directors', officers', agents' or employees' gross negligence or
willful misconduct in connection with the performance of its duties and
obligations under this Agreement prior to the effective date of its
resignation. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article IX shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
9.9 Compensation.
Compensation of the Agent for its services hereunder and
reimbursement for any expenses incurred by it in the performance of its duties
hereunder shall be paid by the Company pursuant to a separate written agreement
between the Agent and the Company.
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9.10 Release of Collateral Documents.
The Collateral Agent shall not release any Pledged Items or
Pledged Servicing except as provided herein or in connection with the
enforcement of any remedies hereunder.
9.11 Knowledge of Defaults.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Event of Default unless the Agent has received notice from a
Lender or the Company referring to this Agreement, describing such Event of
Default and stating that such notice is a "Notice of Default." The Agent shall
notify the Lenders within a reasonable time after the Agent has notice of the
occurrence of an Event of Default, which notice shall describe the Event of
Default.
9.12 Reports.
The Agent may, at its option with the approval of the Company,
alter the format of any report required hereunder, provided such modified
report contains the same information previously furnished in the unmodified
report.
ARTICLE X
DEFAULTS
10.1 Defaults.
In case of the happening of any of the following events (herein
called "Events of Default"):
(a) Any principal amount of any Loan made under this
Agreement (other than principal payments required to be made pursuant to
Sections 2.14(a)) shall not be paid when due and payable; or
(b) Any principal payment required to be made pursuant to
Sections 2.14(a) shall not be paid when due and payable, and shall
remain unpaid for one Business Day;
(c) Any interest or Fees due under this Agreement shall not
be paid when due and payable, and shall remain unpaid for five (5) days;
or
(d) Any amount, other than principal or interest or Fees,
payable under this Agreement shall not be paid when due and payable and
shall remain unpaid for five (5) days after written notice to the
Company or a Borrowing Subsidiary (as applicable) of such nonpayment; or
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(e) Any representation or warranty made or deemed made by
the Company or any Borrowing Subsidiary (or any of their officers)
herein (other than the representations and warranties contained in
Sections 4.7 and 4.8, the inaccuracies of which shall only cause the
Collateral affected thereby to cease to qualify as Eligible Collateral)
in the Security Agreement or in any certificate, agreement, instrument
or statement contemplated by or made or delivered pursuant to or in
connection herewith or therewith shall prove to have been incorrect when
made or deemed made in any material respect; provided however that if
the facts resulting in the breach of any such representation or warranty
are susceptible of correction, such breach shall not constitute an Event
of Default if such facts are corrected within 30 days after such
inaccurate representation or warranty was made or deemed made; or
(f) The Company or any Borrowing Subsidiary, as applicable,
shall fail to perform or observe any term, covenant or agreement
contained in Sections 7.10, 8.1, 8.3, 8.4, 8.6, 8.7, 8.9, 8.14(a), 8.15,
8.17, 8.18, 8.19 or 8.20 (or, while the security interest in favor of
the Collateral Agent is abated, Section 8.11); or
(g) The Company shall (i) fail to comply with the covenant
contained in Section 8.12 and such failure remains unremedied for one
Business Day, or (ii) fail to perform any term, covenant or agreement
contained in Sections 7.7(a), 7.9, 8.5, 8.8 or 8.16, and such failure
shall remain unremedied for more than 30 days;
(h) The Company or any Borrowing Subsidiary shall fail to
perform or observe any other term, covenant or agreement contained
herein (including Section 8.11 while the security interest in favor of
the Collateral Agent is not abated) or in the Security Agreement on its
part to be performed or observed and any such failure remains unremedied
for thirty (30) days after written notice thereof shall have been given
to the Company or such Borrowing Subsidiary (as applicable) by the Agent
or the Collateral Agent; or
(i) An Event of Default shall exist under any other Credit
Document; or
(j) Either this Agreement, the Notes or the Security
Agreement shall, at any time after its execution and delivery, for any
reason cease to be in full force and effect (unless such occurrence is
in accordance with its terms or after payment thereof) or shall be
declared to be null and void, or the validity or enforceability thereof
shall be contested by the Company, any Borrowing Subsidiary or the
Collateral Agent, or the Company, any Borrowing Subsidiary or
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the Collateral Agent shall deny that it has any further liability or
obligation thereunder; or
(k) The Company, its Parent, Fund American Enterprises
Holdings, Inc., any Borrowing Subsidiary or any of the Company's other
material Subsidiaries shall (i) be adjudicated bankrupt or insolvent,
(ii) admit in writing its inability to pay its debts as they mature,
(iii) make an assignment for the benefit of creditors, (iv) fail
generally to pay its debts as such debts become due and payable, (v)
apply for or consent to the appointment of any receiver, trustee,
custodian or similar officer for it or for all or any substantial part
of its property; or such receiver, trustee, custodian or similar officer
shall be appointed without the application or consent of the Company or
of such Subsidiary, as the case may be, and such appointment shall
continue undischarged for a period of 60 days, (vi) institute (by
petition, application, answer, consent or otherwise) any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt,
dissolution, liquidation or similar proceeding relating to it under the
laws of any jurisdiction, (vii) have any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, dissolution,
liquidation or similar proceeding (by petition, application or
otherwise) instituted against it and remain undismissed for a period of
60 days, or (viii) have any judgment, writ, warrant of attachment or
execution or similar process issued or levied in respect of any of its
obligations (alleged or otherwise) against any of its property involving
any amount in excess of $5,000,000 and such judgment, writ or similar
process shall not be released, vacated, stayed or fully bonded within 30
days after its issue or levy; or
(l) The Company, any Borrowing Subsidiary or any of the
Company's other material Subsidiaries shall (i) default in the payment
when due (after giving effect to any available cure period) of any
principal of or interest on any of its Debt other than the Credit
Indebtedness in excess of $25,000,000 in the aggregate or (ii) any event
specified in any note, agreement, indenture or other document evidencing
or relating to any such Debt in excess of $25,000,000 shall occur if the
effect of such event is to cause, or to permit the holder or holders of
such Debt (or a trustee or agent on behalf of such holder or holders) to
cause, such Debt to become due, or to be prepaid in full, prior to its
stated maturity, and in either case any notice or cure period has
expired and such default has not been waived in writing by the holder of
such Debt; or
(m) An event or condition occurs or exists with respect to
any Plan concerning which the Company is under an obligation to furnish
a report to the Lenders in accordance
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with Section 7.7(i) and as a result of such event or condition, together
with all other such events or conditions, the Company or any ERISA
Affiliate has incurred a liability to a Plan or the PBGC (or any
combination of the foregoing) which is material in relation to the
financial position of the Company; or
(n) A Change in Control shall occur with respect to the
Company; or
(o) Except in connection with a Positive Security Event,
the lien against the Collateral created under the Security Agreement for
the benefit of the Secured Parties shall cease to be a perfected, first
priority security interest; provided, however, that if the Secured
Parties shall cease to have a perfected, first priority interest in a
portion of the Collateral, such cessation shall not constitute an Event
of Default so long as the Collateral in which the Secured Parties have a
perfected, first priority interest is sufficient to cause the Aggregate
Borrowing Base to exceed the Credit Requirement; or
(p) An event of default exists under the terms of an
indenture pursuant to which any Ratable Medium Term Note is issued and
such event of default has not been waived in writing;
then, and in every such event and at any time thereafter during the continuance
of such event, the Agent and the Lenders shall have the rights described in the
following Sections of this Article X.
10.2 Remedies.
(1) Upon the occurrence of any Event of Default the Agent
may, and at the direction of the Required Lenders shall, at the same or
different times, take one or more of the following actions: (i) by
notice to the Company terminate the Commitments and they shall thereupon
terminate, (ii) by notice to the Company declare the Obligations to be,
and the Obligations shall thereupon become, immediately due and payable
without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Company and the Borrowing Subsidiaries,
provided that in the case of any of the Events of Default specified in
subparagraph (k) of Section 10.1, without any notice to the Company or
any Borrowing Subsidiary or any other act by the Agent or the Lenders,
the Commitments shall thereupon terminate and the Obligations shall
become immediately due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the
Company and the Borrowing Subsidiaries. Following the
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occurrence and during the continuance of a Default, no Lender shall be
obligated to fund any Loan hereunder.
(2) Following the occurrence and during the continuance of
an Event of Default, the Company and the Borrowing Subsidiaries agree
that the Company, the Borrowing Subsidiaries and the Agent shall, at the
request of the Required Lenders, implement certain procedures with
respect to the Company's and the Borrowing Subsidiaries' funding of AP
Mortgages, all at the Company's sole expense. Such procedures may
include, but are not limited to: (i) reducing the advance rate against
AP Mortgages for purposes of determining the Mortgage Collateral Value
component of the Aggregate Borrowing Base, (ii) requiring that if (A) AP
Mortgages are funded with wire transfers, such wire transfers originate
from accounts located at a lending office of a Lender, (B) AP Mortgages
are funded from accounts which are not located at a lending office of a
Lender, the financial institution which holds such account enter into an
agreement with the Company or the applicable Borrowing Subsidiary (as
applicable) and the Agent which shall provide that the Agent shall have
exclusive dominion and control over the funds in such account, and (iii)
requiring the Company and the Borrowing Subsidiaries to provide the
Agent and the Lenders with such information regarding the funding of
such AP Mortgages as the Required Lenders may reasonably request. The
Company and the Borrowing Subsidiaries, at their expense, shall from
time to time execute and deliver to the Agent or the Collateral Agent
all such assignments, certificates, supplemental documents, and
financing statements, and shall do all other acts or things, as the
Agent may reasonably request in order to more fully implement such
procedures.
(3) Upon the occurrence of any Event of Default, the Agent
and the Collateral Agent, on behalf of the Secured Parties, shall be
entitled to all rights and remedies hereunder and under the Security
Agreement and all other rights and remedies at law or in equity existing
in or conferred upon the Secured Parties by other jurisdictions or other
applicable law.
(4) The Company and the Borrowing Subsidiaries waive any
right to require the Agent, the Collateral Agent or any Lender to (i)
proceed against or exhaust any of its remedies against the Company, any
Borrowing Subsidiary or any other Person in any particular order, (ii)
proceed against or exhaust any of the Collateral or pursue its rights
and remedies as against the Collateral in any particular order or (iii)
pursue any other remedy in its power.
(5) The Agent on behalf of the Lenders may, but shall not
be obligated to, advance any sums or do any act or thing
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necessary to uphold and enforce the lien and priority of, or the
security intended to be afforded by, any Pledged Mortgage, including,
without limitation, payment of delinquent taxes or assessments and
insurance premiums. The Company and the Borrowing Subsidiaries shall
provide any and all information required by the Agent or the Collateral
Agent to administer this Agreement or collect on the Collateral. All
advances, charges, costs and expenses, including reasonable attorneys
fees, incurred or paid by the Agent in exercising any right, power or
remedy conferred by this Agreement, or in the enforcement hereof (or by
any Lender acting on instruction of the Required Lenders in the
enforcement hereof), together with interest thereon at the rate per
annum of two percent (2%) plus the Alternate Base Rate from the time of
payment until repaid, shall become a part of the Credit Indebtedness.
(6) No failure on the part of the Agent or any Lender to
exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise by the Agent or any Lender of any right, power or
remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The remedies herein
provided are cumulative and are not exclusive of any remedies provided
by law.
10.3 Notice of Default.
The Agent may, and at the direction of the Required Lenders
shall, give notice to the Company under Section 10.1(d), 10.1(h) or 10.2 and
shall thereupon notify all Lenders thereof.
10.4 Application of Proceeds.
(a) After the occurrence of an Event of Default, the
portion of the proceeds of any sale or enforcement of all or any part of the
Collateral which is delivered to the Agent by the Collateral Agent pursuant to
the provisions of the Security Agreement shall be applied by the Agent, after
taking into account any adjustments made pursuant to Section 2.3(e):
First, to the extent that any such proceeds arise from a sale of
any of the Pledged Servicing, to the payment of any amounts due by the
Company to any Approved Investor as a condition to the transfer of the
Company's interest in any Servicing Agreements constituting Pledged
Servicing pursuant to the terms of such Servicing Agreements, including
without limitation all amounts described in the Acknowledgement
Agreements;
Second, to the extent not already paid from the Collateral
proceeds by the Collateral Agent, to payment of
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all costs and expenses of such sale or enforcement, including reasonable
compensation to the Agent's agents and counsel, and all expenses,
liabilities and advances made or incurred by the Agent or any Lender
acting on instructions of the Required Lenders in connection therewith;
Third, to the extent not already paid from the Collateral
proceeds by the Collateral Agent, to the payment of all costs and
expenses incurred by the Collateral Agent under the Security Agreement;
Fourth, to the payment of accrued and unpaid interest on the
Credit Indebtedness (including the accrued and unpaid interest portion,
if any, of the Approved GNMA Letter of Credit Obligations), fees due
hereunder and all other unpaid Credit Indebtedness other than the
principal amount of Loans and the face amount (whether drawn or undrawn)
of Approved GNMA Letters of Credit, ratably according to the respective
amounts owing or due each Lender or Non-Lender Balance Bank until such
amounts are paid in full;
Fifth, to the total unpaid principal amount of all Loans and to
the unpaid face amount (whether drawn or undrawn) of Approved GNMA
Letters of Credit, ratably according to the amount due each Lender
(provided, however, that proceeds applicable to the undrawn face amount
of Approved GNMA Letters of Credit shall be distributed in accordance
with Section 10.5 below) until such amounts are paid in full; and
Sixth, to the payment to the Company, or to its successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
(b) The Agent shall have absolute discretion as to the time
of application of any such proceeds, moneys or balances in accordance
with this Agreement.
(c) If the proceeds of any such sale are insufficient to
cover the costs and expenses of such sale, as aforesaid, and the payment
in full of the Credit Indebtedness, the Company and each Borrowing
Subsidiary shall remain liable for any deficiency.
10.5 Letter of Credit Cash Collateral Accounts.
(a) Upon the Agent's receipt of any Collateral proceeds to
be applied to the undrawn face amount of any Approved GNMA Letters of
Credit pursuant to Section 10.4(a), a separate cash collateral account
(each a "Letter of Credit Account") shall be established with the Agent
for each outstanding Approved GNMA Letter of Credit. Each Letter of
Credit
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Account shall be established in the name of the Company but shall be
under the sole dominion and control of the Agent, for the benefit of the
Lenders, and the Company shall have no interest therein. All funds
deposited into the Letter of Credit Accounts from time to time shall be
invested by the Agent at its discretion in certificates of deposit of
First Chicago having a maturity not exceeding 30 days, and all amounts
earned thereon shall also be held in the Letter of Credit Account to be
disbursed in accordance with Section 10.5(b). In addition to the
foregoing, the Company hereby grants to the Agent, for the benefit of
the Lenders, a properly perfected security interest in and to each
Letter of Credit Account and any funds that may hereafter be on deposit
in such account and the proceeds thereof.
(b) Upon the Agent's receipt of any Collateral proceeds to
be applied to the undrawn face amount of any particular Approved GNMA
Letter of Credit pursuant to Section 10.4, such proceeds shall be
deposited by the Agent into the Letter of Credit Account applicable to
that particular Approved GNMA Letter of Credit. Such funds shall be
promptly disbursed from the applicable Letter of Credit Account to
reimburse the applicable Issuing Bank for drafts drawn from time to time
under the applicable Approved GNMA Letter of Credit. If an Approved
GNMA Letter of Credit is drawn upon and the funds held in the Letter of
Credit Account applicable to that Approved GNMA Letter of Credit are
insufficient to reimburse the Issuing Bank in full for all Approved GNMA
Letter of Credit Obligations applicable thereto, such unreimbursed
obligations shall, for purposes of Section 10.4, thereafter be
considered unpaid Loan principal due and owing to the Issuing Lender.
If (i) an Approved GNMA Letter of Credit is fully drawn upon and all
Approved GNMA Letter of Credit Obligations relating thereto are paid in
full or (ii) an Approved GNMA Letter of Credit expires or is otherwise
terminated (and thus no further Approved GNMA Letter of Credit
Obligations exist with respect to such Approved GNMA Letter of Credit),
then any funds then held in the Letter of Credit Account relating to
such Approved GNMA Letter of Credit shall be considered Collateral
proceeds which shall again be distributed to the Agent to be disbursed
in accordance with Section 10.4.
ARTICLE XI
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
11.1 Successors and Assigns.
The terms and provisions of the Credit Documents shall be
binding upon and inure to the benefit of the Company, the Borrowing
Subsidiaries and the Lenders and their respective
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successors and assigns, except that neither the Company nor any Borrowing
Subsidiary shall have the right to assign its rights or obligations under the
Credit Documents without the consent of all the Lenders and any assignment by
any Lender must be made in compliance with Section 11.3. The Agent may treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until such payee complies with Section 11.3 in the case of an assignment
thereof or, in the case of any other transfer, a written notice of the transfer
is filed with the Agent. Any assignee or transferee of a Note agrees by
acceptance thereof to be bound by all the terms and provisions of the Credit
Documents. Any request, authority or consent of any person, who at the time of
making such request or giving such authority or consent is the holder of any
Note, shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.
11.2 Participations.
(a) Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law,
at any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held
by such Lender, any Commitment of such Lender or any other interest of
such Lender under the Credit Documents. In the event of any such sale
by a Lender of participating interests to a Participant, such Lender's
obligations under the Credit Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, such Lender shall remain the holder
of any such Note for all purposes under the Credit Documents, all
amounts payable by the Company or any Borrowing Subsidiary under this
Agreement shall be determined as if such Lender had not sold such
participating interests, and the Company, each Borrowing Subsidiary and
the Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Credit
Documents.
(b) Voting Rights. Except as otherwise expressly provided
in the Credit Documents, each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Credit Documents other
than any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which (i) forgives
principal, interest or Fees or reduces the interest rate or Fees payable
with respect to any such Loan or Commitment, (ii) postpones any date
fixed for any regularly-scheduled payment of principal of, or interest
on, any such Loan or Fees on any such Commitment, (iii) releases
Collateral beyond
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the releases expressly provided for herein, or (iv) extends the
Termination Date.
(c) Benefit of Set-Off. The Company and the Borrowing
Subsidiaries agree that each Participant shall be deemed to have the
right of set-off provided pursuant to Section 12.10(a) in respect of its
participating interest in amounts owing under the Credit Documents to
the same extent as if the amount of its participating interest were
owing directly to it as a Lender under the Credit Documents, provided
that each Lender shall retain the right of set-off provided in Section
12.10(a) with respect to the amount of participating interests sold to
each Participant. The Lenders agree to share with each Participant, and
each Participant, by exercising the right of set-off provided in Section
12.10(a), agrees to share with each Lender, any amount received pursuant
to the exercise of its right of set-off, such amounts to be shared in
accordance with Section 12.10(b) as if each Participant were a Lender.
Neither the Company nor any Borrowing Subsidiary is a party to the
agreement among the Lenders and Participants set forth in the
immediately preceding sentence, and such sentence may be amended without
the consent of either the Company or any Borrowing Subsidiary.
11.3 Assignments.
(a) Permitted Assignments. Any Lender may, with the prior
written consent of Agent (which consent shall not be unreasonably
withheld or delayed), in the ordinary course of its business and in
accordance with applicable law, at any time assign to one or more banks
or other entities ("Purchasers") all or any part of its rights and
obligations under the Credit Documents, provided that, unless an Event
of Default has occurred and is then continuing, the prior written
consent of the Company to the identity of any such Purchaser shall be
required, and the Company agrees that such consent shall not be
unreasonably withheld or delayed, except that no consent of the Agent or
the Company shall ever be required for (i) any assignment to a Person
directly or indirectly controlling, controlled by or under direct or
indirect common control with the assigning Lender or (ii) the pledge or
assignment by a Lender of such Lender's Note and other rights under the
Loan Documents to any Federal Reserve Bank in accordance with applicable
law. Notwithstanding the foregoing, no assignment of Loans or
Commitments which requires the consent of the Agent or the Company may
be made if the assignment would result in either the assigning Lender or
the Purchaser (which may be an existing Lender) holding a Commitment of
less than $15,000,000; provided, however, that if (due to reductions in
the Aggregate Commitment) a Lender's Commitment is less than
$15,000,000, such Lender may assign
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all (but not less than all) of its Commitment in accordance with the
terms of this Section notwithstanding the fact that such Commitment is
less than $15,000,000.
(b) Effect; Effective Date. Upon delivery to the Agent of
a New/Modified Commitment Supplement in the form of Exhibit H hereto
executed by the assigning Lender and the Purchaser and payment to the
Agent of an assignment fee of $3,500, such assignment shall become
effective on the effective date specified in such notice of assignment.
On and after the effective date of such assignment, such Purchaser shall
for all purposes be a Lender party to this Agreement and any other
Credit Document executed by the Lenders and shall have all the rights
and obligations of a Lender under the Credit Documents, to the same
extent as if it were an original party hereto, and no further consent or
action by the Company, the Lenders or the Agent shall be required to
release the transferor Lender with respect to the percentage of the
Commitments and Loans assigned to such Purchaser. Upon the consummation
of any assignment to a Purchaser pursuant to this Section, the
transferor Lender, the Agent, the Company and the Borrowing Subsidiaries
shall make appropriate arrangements so that replacement Notes are issued
to such transferor Lender and new Notes or, as appropriate, replacement
Notes, are issued to such Purchaser, in each case in principal amounts
reflecting their respective Commitments, as adjusted pursuant to such
assignment.
11.4 Dissemination of Information.
The Company and the Borrowing Subsidiaries authorize each Lender
to disclose to any Participant or any other Person acquiring an interest in the
Credit Documents by operation of law (each a "Transferee") and any prospective
Transferee any and all information in such Lender's possession concerning the
creditworthiness of the Company and its Subsidiaries, provided that the
transferor shall obtain from any such Transferee or prospective Transferee,
prior to disclosing any such information, a confidentiality agreement executed
by the Transferee or prospective Transferee agreeing to be bound by any
confidentiality requirements with respect to such information which are imposed
upon the Lenders under the terms of the Credit Documents.
11.5 Tax Treatment.
If any interest in any Credit Document is transferred to any
Transferee which is organized under the laws of any jurisdiction other than the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply
with all
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applicable provisions of the Code with respect to withholding and other tax
matters.
ARTICLE XII
MISCELLANEOUS
12.1 Immediately Available Funds.
All payments and other transfers of funds under this Agreement
shall be made in funds immediately available at the place of payment unless the
recipient thereof shall otherwise agree.
12.2 Notices.
Except where instructions or notices are expressly authorized
elsewhere in this Agreement to be given by telephone or by other means of
transmission, all instructions, notices and other communications to be given to
any party hereto shall be in writing and shall be personally delivered or sent
by certified mail, postage prepaid, private delivery service or by facsimile,
and shall be deemed to be given for purposes of this Agreement on the day (or
at the time of day, if applicable) when actually received by the intended party
at its address or facsimile or telephone number as set forth below (or as such
party may specify to the other parties in writing). Any requirement that
notice be given to any person under this Agreement shall be deemed to require
notice to the Agent, the Company and each Lender, unless otherwise expressly
provided herein. Whenever the giving of notice by telephone is permitted by
this Agreement, such notice shall be confirmed in writing within three days.
The addresses for notices to the parties are as set forth below
their signatures on the signature pages hereto or on any assignment.
12.3 Survival and Termination of Agreement.
All covenants, agreements, representations and warranties made
herein and in the certificates and other documents delivered pursuant hereto
shall survive the funding of the Notes and shall continue in full force and
effect to the Termination Date or so long as any amount payable to the Lenders
in connection with this Agreement is unpaid, whichever is later, at which time
this Agreement shall terminate, it being expressly understood that the
obligations of the Company under Sections 3.1, 3.3 and 7.8 shall survive any
termination of this Agreement. Whenever in this Agreement any party is
referred to, such reference shall be deemed to include the successors and
assigns of such party, but no assignment or transfer (by operation of law or
otherwise) of this Agreement by the Company
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or any Borrowing Subsidiary or any of their rights or duties hereunder may be
made without the prior written consent of all of the Lenders; and all
covenants, promises and agreements by or on behalf of the Company or any
Borrowing Subsidiary which are contained in this Agreement shall inure to the
benefit of the successors and assigns of the Lenders.
12.4 Fees and Expenses of the Lenders.
The Company will pay (a) all reasonable out-of-pocket costs and
expenses incurred by the Agent or by the Collateral Agent (including the fees,
out-of-pocket expenses and other reasonable expenses of counsel to the Agent or
the Collateral Agent) in connection with the preparation, execution and
delivery of this Agreement, the Notes, the Security Agreement and any other
agreements or documents referred to herein or therein and any amendments
thereto, and (b) all reasonable out-of-pocket costs and expenses incurred by
the Agent, the Collateral Agent and the Lenders (including the fees,
out-of-pocket expenses and other reasonable expenses of counsel to the Lenders)
in connection with the enforcement and protection of the rights of the Lenders
under this Agreement, the Notes, the Security Agreement or any other agreement
or document referred to herein or therein.
12.5 Applicable Law.
This Agreement shall be construed in accordance with and
governed by the law of the State of Illinois.
12.6 Modification of Agreement.
Except for certain changes in a Lender's Commitment or admission
of a new Lender which (pursuant to Section 2.1) do not require any consents or
approvals from the other Lenders but which require a New/Modified Commitment
Supplement executed by the Agent, the Company, the Borrowing Subsidiaries and
the Lender(s) being added or modifying their Commitment, no provisions of this
Agreement may be amended or waived unless such amendment or waiver is in
writing and is signed by the Company, and the Agent if the rights or duties of
the Agent are affected thereby, and
(1) each Lender if such amendment or waiver
(i) reduces or forgives any principal of any
unpaid Loan or any interest thereon or any Fees due to such
Lender hereunder; or
(ii) postpones the date fixed for any payment of
principal of or interest on any unpaid Loan or any Fees payable
to such Lenders; or
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(iii) changes the amount of payment of principal of
or interest on any unpaid Loan or any Fees payable to the
Lenders hereunder; or
(iv) changes or waives any of the conditions
precedent to the initial Advance hereunder or any subsequent
Advance; or
(v) changes the amount of any such Lender's
Commitment, except as expressly provided for herein; or
(vi) would amend or waive the method of
calculating the Aggregate Borrowing Base; or
(vii) would amend or waive the provisions of
Section 2.14; or
(viii) extends the Termination Date; or
(ix) releases any Collateral beyond the releases
expressly provided for herein or in the Security Agreement; or
(x) changes the definitions of Positive Security
Event, Negative Security Event or Positive Security Conditions
or waives compliance with any Positive Security Condition; or
(xi) changes or waives any restriction on the
Company's or any Borrowing Subsidiary's ability to assign its
rights or obligations under any of the Credit Documents; or
(xii) changes or waives any funding requirement,
including, without limitation, any Lending Sublimits; or
(xiii) changes or waives any yield protection; or
(xiv) changes or waives any provision herein
regarding the indemnification of the Agent, the Collateral Agent
or such Lender; or
(xv) changes the definition of Required Lenders or
modifies any requirement for consent by all of the Lenders; or
(xvi) changes or waives any provision herein
regarding the allocation among the Lenders of any payments or
proceeds received by the Agent hereunder; or
(2) the Required Lenders in the case of all other waivers
or amendments.
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12.7 Non-Waiver of Rights by the Lenders.
Neither any failure nor any delay on the part of the Agent or
the Lenders in exercising any right, power or privilege hereunder or under the
Security Agreement shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
12.8 Dealings with the Company and its Affiliates.
The Lenders and their Affiliates may accept deposits from,
extend credit to and generally engage in any kind of banking, trust or other
business with the Company and any of its Affiliates regardless of the capacity
of the Lenders hereunder.
12.9 Changes in GAAP.
The parties agree that if there are any changes in GAAP in the
future which result in material changes to the presentation of the Company's
financial condition in accordance with GAAP in such a way as to alter the
material intent of this Agreement, then the parties will negotiate in good
faith to attempt to agree on such modifications to this Agreement as may be
necessary to preserve the original intent of this Agreement in light of such
revised GAAP rules, provided that unless and until a written agreement is
entered into by all parties hereto, no changes to this Agreement shall be
effective and all calculations required to be made in accordance with GAAP
hereunder shall continue to be made as if GAAP had not changed.
12.10 Set-Off.
(a) If an Event of Default shall have occurred, each Lender
shall have the right, at any time and from time to time without notice
to the Company or any Borrowing Subsidiary, any such notice being hereby
expressly waived, to set-off and to appropriate or apply any and all
deposits of money or property or any other indebtedness at any time held
or owing by such Lender to or for the credit or the account of the
Company or any Borrowing Subsidiary against and on account of all
outstanding Credit Indebtedness and all Credit Indebtedness which from
time to time may become due hereunder and all other obligations and
liabilities of the Company or any Borrowing Subsidiary under this
Agreement, regardless of the adequacy of any Collateral and irrespective
of whether or not such Lender shall have made any demand hereunder and
whether or not said obligations and liabilities shall have matured.
(b) Each Lender agrees that if it shall, by exercising any
right of set-off or counterclaim or otherwise, receive
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payment of a proportion of the aggregate amount of principal, interest
or Fees due with respect to this Agreement and the Notes held by it
which is greater than the proportion received by any other Lender in
respect of the aggregate amount of principal, interest or Fees due with
respect to this Agreement and the Notes held by such other Lender, the
Lender receiving such proportionately greater payment shall purchase
such participations in the Notes held by the other Lenders and such
other adjustments shall be made, as may be required so that all such
payments of principal, interest or Fees shall be shared by the Lenders
hereunder pro rata according to their respective shares of the Credit
Indebtedness. Each Lender agrees to exercise any and all rights of
set-off, counterclaim or bankers' lien relating to the Credit
Indebtedness first fully against the Credit Indebtedness and only then
to any other Debt of the Company or any Borrowing Subsidiary to such
Lender. Neither the Company nor any Borrowing Subsidiary is a party to
the agreement among the Lenders set forth in this Section 12.10(b), and
such Section may be amended without the consent of either the Company or
any Borrowing Subsidiary.
(c) The Company and the Borrowing Subsidiaries agree that
funds received and held by the Company or any Borrowing Subsidiary as
custodian for FNMA, GNMA or other mortgage pools which are deposited
into accounts with any Lender shall be clearly identified as custodial
accounts, and each Lender agrees that each provision of the foregoing
paragraphs of this Section 12.10 shall not apply to such custodial
accounts. Neither the Company nor any Borrowing Subsidiary shall
deposit any of its general funds in any custodial accounts or otherwise
commingle funds in any custodial accounts.
12.11 Counterparts.
This Agreement may be executed in counterparts which, taken
together, shall constitute a single document.
12.12 Severability.
In case any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
12.13 Headings.
Section headings in the Credit Documents are for convenience of
reference only and shall not govern the interpretation of any of the provisions
of the Credit Documents.
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12.14 Entire Agreement.
The Credit Documents embody the entire agreement and
understanding among the Company, the Borrowing Subsidiaries, the Agent and the
Lenders and supersede all prior agreements and understandings among the
Company, the Borrowing Subsidiaries, the Agent and the Lenders relating to the
subject matter thereof.
12.15 Limitation on Recourse to Borrowing Subsidiaries.
Each Borrowing Subsidiary and the Company shall be jointly and severally
liable for the payment of the Obligations; provided, however, that recourse to
any particular Borrowing Subsidiary hereunder shall be limited to (i) such
Borrowing Subsidiary's interest in the Collateral pledged by such Borrowing
Subsidiary to the Agent or the Collateral Agent under the Credit Documents and
the proceeds thereof, plus (ii) an amount equal to the capital investment by
the Company in such Borrowing Subsidiary, plus (iii) an amount equal to the
total of all Debt owed by such Borrowing Subsidiary to the Company.
12.16 Consent of Jurisdiction.
THE COMPANY AND EACH BORROWING SUBSIDIARY EACH HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY CREDIT DOCUMENTS AND THE COMPANY AND EACH
BORROWING SUBSIDIARY HEREBY EACH IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE
OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH
COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE COMPANY OR ANY BORROWING
SUBSIDIARY IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
THE COMPANY OR ANY BORROWING SUBSIDIARY AGAINST THE AGENT OR ANY LENDER OR ANY
AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY CREDIT
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
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12.17 Waiver of Jury Trial.
THE COMPANY, EACH BORROWING SUBSIDIARY, THE AGENT AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY CREDIT
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
IN WITNESS WHEREOF, the Company, the Borrowing Subsidiaries and the
Lenders have caused this Agreement to be duly executed by their duly authorized
officers, all as of the day and year first above written:
SOURCE ONE MORTGAGE SERVICES CORPORATION
By:________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President
and Chief Financial Officer
Address for Notices:
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxxx, XX 00000-0000
Attn: Chief Financial Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
and
Attn: Vice President/Treasury
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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THE MORTGAGE AUTHORITY, INC.
By:________________________________
Name: Xxxxx X. Xxxxx
Title: Vice President/Treasury
Address for Notices:
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxxx, XX 00000-0000
Attn: Controller
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
CENTRAL PACIFIC MORTGAGE COMPANY
By:________________________________
Name: Xxxx Xxxxxxx
Title: Chief Financial Officer
Address for Notices:
0000 Xxxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxx, XX 00000
Attn: Chief Financial Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:________________________________
Name:___________________________
Title:__________________________
Address for Notices Regarding
Fundings:
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Address for Other Notices:
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, III
First Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
THE FIRST NATIONAL BANK OF CHICAGO
By:________________________________
Name:___________________________
Title:__________________________
Address for Notices:
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, III
First Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
-120-
127
ABN AMRO BANK, N.V.
By:________________________________
Name:___________________________
Title:__________________________
By:________________________________
Name:___________________________
Title:__________________________
Address for Notices:
000 X. XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxx,
Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
BANK OF AMERICA NT & SA
By:_________________________________
Xxxxxx X. Xxxxxxx
Vice President
Address for Notices:
00000 Xxxxx xx xx Xxxxx, Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx,
Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
-121-
000
XXX XXXX XX XXX XXXX
By:________________________________
Xxxxxxxx X. Dominus
Vice President
Address for Notices:
Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Dominus,
Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
THE BANK OF TOKYO-MITSUBISHI, LTD.
By:_________________________________
Xxxxxx Xxxxxxxxx
Deputy General Manager
Address for Notices:
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
-122-
129
BANKERS TRUST COMPANY
By:________________________________
Xxxx X'Xxxxxx
Vice President
Address for Notices:
000 Xxxx Xxxxxx, 00X
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X'Xxxxxx,
Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
BANQUE PARIBAS
By:_________________________________
Name:____________________________
Title:___________________________
By:_________________________________
Name:____________________________
Title:___________________________
Address for Notices:
The Equitable Tower
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
-123-
130
BARCLAYS BANK PLC
By:________________________________
Xxxx Xxxxxx
Associate Director
Address for Notices:
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx,
Associate Director
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
CAISSE NATIONALE DE CREDIT AGRICOLE
By:_________________________________
Xxxxx Xxxxx
First Vice President Head of
Corporate Banking Chicago
Address for Notices:
00 X. Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxxx Xxxxxxx,
Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
-124-
131
CIBC, INC.
By:________________________________
Xxxxxxx X. Xxxxxxxx
Director
CIBC Wood Gundy Securities
Corp., As Agent for CIBC, Inc.
Address for Notices:
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx,
Director
CIBC Wood Gundy Securities
Corp., As Agent for
CIBC, Inc.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
COMERICA BANK
By:________________________________
Xxxxx X. Xxxxxxxx
Vice President
Address for Notices:
One Detroit Center
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx,
Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
-125-
132
CREDIT LYONNAIS NEW YORK BRANCH
By:___________________________
Xxxxxx x'Xxxxxx
Senior Vice President
Address for Notices:
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxxx Xxxxxx,
Asst. Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
CREDIT SUISSE
By:________________________________
Name:___________________________
Title:__________________________
By:________________________________
Name:___________________________
Title:__________________________
Address for Notices:
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
and
Attn: Xx. Xxxxxxxx Xxxxxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Copies to:
000 X. Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
-126-
000
XXX XXX-XXXX XXXXXX XXXX, LTD.,
CHICAGO BRANCH
By:________________________________
Name:___________________________
Title:__________________________
Address for Notices:
00 Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx,
Assistant Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
FLEET BANK N.A.
By:_________________________________
Xxxxxx Xxxxxxx
Vice President
Address for Notices:
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
THE FUJI BANK, LIMITED
By:_________________________________
Xxxxx X. Xxxxxxxx
Joint General Manager
Address for Notices:
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxx,
Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
-127-
134
GUARANTY FEDERAL BANK, F.S.B.
By:_________________________________
Xxxxxxx Xxxxxxx
Vice President
Address for Notices:
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxx,
Banking Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD.
By:_________________________________
Name:____________________________
Title:___________________________
Address for Notices:
000 X. XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
or
Attn: Xxxxx Place
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
-128-
135
THE MITSUBISHI TRUST AND BANKING
CORPORATION, LOS ANGELES AGENCY
By:_________________________________
Name:____________________________
Title:___________________________
Address for Notices:
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxx,
Vice President for Credit
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Attn: Xxxxxx Xxxx,
Operations
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
NATIONAL CITY BANK OF KENTUCKY
By:________________________________
Xxxx Xxxxxxxxx
Vice President
Address for Notices:
000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxxxxx,
Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
-129-
136
PNC BANK, NATIONAL ASSOCIATION
By:________________________________
Xxxxx Xxxxx
Assistant Vice President
Address for Notices:
000 Xxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxx,
Assistant Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
THE SANWA BANK, LIMITED, CHICAGO BRANCH
By:_________________________________
Xxxxxxx X. Xxxx
Vice President
Address for Notices:
00 Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx XxXxxxx,
Credit Analyst
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
THE SUMITOMO BANK, LTD.
By:_________________________________
Xxxxxxxx Xxxxx
Joint General Manager
Address for Notices:
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxx,
Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
-130-
000
XXXXX XXXXX XXXX, XX
By:_________________________________
Name:____________________________
Title:___________________________
By:_________________________________
Name:____________________________
Title:___________________________
Address for Notices:
000 Xxxxxxxx, 00 Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxx XxXxxxxxx,
Senior Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
and
Attn: Xxxxxxxx Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH
By:________________________________
Name:___________________________
Title:__________________________
By:________________________________
Name:___________________________
Title:__________________________
Address for Notices:
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx,
Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
-131-
138
SCHEDULE 1
APPLICABLE MARGIN
==========================================================================================================================
Ratings: S&P and Xxxxx'x At Least A- or AT LEAST BBB+ At Least BBB At Least BBB- Below either
A3* OR Baa1* or Baa2* and Baa3 BBB- or Baa3
--------------------------------------------------------------------------------------------------------------------------
Applicable Margin 0.35% 0.40% 0.45% 0.50% 0.75%
==========================================================================================================================
The Applicable Margin for each Rate Option shall be the applicable percentage
per annum set forth above, which is based on the Company's long term unsecured
debt ratings, changing as and when such ratings change. Each rating
classification sets forth the S&P rating and the Xxxxx'x rating, respectively.
For the three columns noted with an asterisk (*), if on any day the ratings of
S&P and Xxxxx'x are not both at the required level, the higher rating will be
the applicable rating for purposes of determining the classification unless the
lower rating is more than one rating category below the minimum rating for such
rating agency under such column, in which event the higher rating will be
disregarded, the lower rating will be deemed to have been one rating category
higher than the actual reported lower rating, and the column applicable using
such deemed lower rating shall apply. If for any reason the Company's
unsecured long term debt is not rated by both S&P and Xxxxx'x, the column
headed "Below either BBB- or Baa3" shall be used.
-132-
139
SCHEDULE 2
FEE RATES
===========================================================================================================================
Ratings: S&P and Xxxxx'x At Least A- or AT LEAST BBB+ At Least BBB At Least BBB- Below either
A3* OR Baa1* or Baa2* and Baa3 BBB- or Baa3
---------------------------------------------------------------------------------------------------------------------------
Facility Fee Rate .125% .15% .175% .20% .25%
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
Servicing Collateral .25% .275% .30% .35% .50%
Fee Rate
===========================================================================================================================
The various Fee Rates for this Facility shall be the applicable percentage per
annum set forth above, which is based on the Company's long term unsecured debt
ratings, changing as and when such ratings change. Each rating classification
sets forth the S&P rating and the Xxxxx'x rating, respectively. For the three
columns noted with an asterisk (*), if on any day the ratings of S&P and
Xxxxx'x are not both at the required level, the higher rating will be the
applicable rating for purposes of determining the classification unless the
lower rating is more than one rating category below the minimum rating for such
rating agency under such column, in which event the higher rating will be
disregarded, the lower rating will be deemed to have been one rating category
higher than the actual reported lower rating, and another column will be
applicable using such deemed lower rating. If for any reason the Company's
unsecured long term debt is not rated by both S&P and Xxxxx'x, the column
headed "Below either BBB- or Baa3" shall be used.
-133-
140
EXHIBIT A
LIST OF APPROVED INVESTORS
-134-
141
EXHIBIT B
FORM OF BORROWING BASE CERTIFICATE
Dated as of: _______________
Reference is made to that certain Second Amended and Restated Revolving
Credit Agreement among the Company, the Borrowing Subsidiaries, The First
National Bank of Chicago, individually and as administrative agent, and the
lenders named therein, dated as of November 12, 1996 (the "Credit Agreement").
Capitalized terms not otherwise defined herein are used with the same meanings
as in the Credit Agreement.
1. AGGREGATE BORROWING BASE:
Eligible Mortgage Loans
(Mortgage Collateral Value):
Eligible Delivered Mortgages $______________
Eligible AP Mortgages $______________
Eligible Pledged Securities
(MBS Value) $______________
Total Pledged Items $______________
Percentage Factor 98%
(A) AGGREGATE BORROWING BASE
FROM PLEDGED ITEMS $______________
Eligible Repurchased Agency
Loans and Receivables $______________
Percentage Factor 90%
(B) AGGREGATE BORROWING BASE
FROM REPURCHASED AGENCY LOANS
AND RECEIVABLES $______________
-135-
142
(C) AGGREGATE BORROWING BASE
FROM ELIGIBLE PLEDGED SERVICING(1) $______________
Eligible Servicing Sale Receivables $______________
Percentage Factor 75%
(D) AGGREGATE BORROWING BASE
FROM ELIGIBLE SERVICING SALE RECEIVABLES $______________
(E) BALANCE IN SETTLEMENT ACCOUNT $______________
(F) CASH AND CASH EQUIVALENTS $______________
SUM OF (A) - (F) ABOVE $______________
Reconciling Items:
Timing Difference $______________
Loan Detail Difference $______________
AGGREGATE BORROWING BASE $______________
Credit Requirement:
Facility Advances $______________
Face Amount of Outstanding Ratable
Medium Term Notes $______________
Outstanding CPNs $______________
Approved GNMA Letter of Credit Obligations $______________
SUM OF CREDIT REQUIREMENT $______________
EXCESS OF AGGREGATE BORROWING
BASE OVER CREDIT REQUIREMENT $______________
2. CERTIFICATION: To the best of the knowledge and belief (after
reasonable investigation) of the officer of the Company executing this
Certificate, the Company hereby certifies to The First National Bank of
Chicago for the benefit of lenders under the Credit Agreement that: (a)
the above information is, and the computations are accurate and complete
and in accordance with the requirements of the Credit Agreement, and (b)
as
__________________________________
(1) Based on either market value or principal balance of loans serviced as
described in Section 4.6(h) of the Credit Agreement
-136-
143
of the date hereof, (1) all representations and warranties of the
Company set forth in the Credit Agreement are accurate and complete, (2)
there does not exist an Event of Default under the Credit Agreement, and
(3) the Company has given written notice to The First National Bank of
Chicago of any Default which now exists under the Credit Agreement.
IN WITNESS WHEREOF, the Company has caused this Borrowing Base
Certificate to be executed and delivered by its duly authorized officer
this ___ day of __________, 199_.
SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
-137-
144
EXHIBIT C
COMMITMENTS AND COMMITMENT PERCENTAGES
====================================================================================================================
Commitment Commitment Adj. Commit.
Bank Name Amount Percentage Percentage
--------------------------------------------------------------------------------------------------------------------
First Chicago SWING $10,000,000
--------------------------------------------------------------------------------------------------------------------
1. First Chicago $32,500,000 5.66666667% 4.391891892%
--------------------------------------------------------------------------------------------------------------------
2. Bank of New York $40,000,000 5.33333333% 5.405405405%
--------------------------------------------------------------------------------------------------------------------
3. Bankers Trust $40,000,000 5.33333333% 5.405405405%
--------------------------------------------------------------------------------------------------------------------
4. Comerica $40,000,000 5.33333333% 5.405405405%
--------------------------------------------------------------------------------------------------------------------
5. Credit Lyonnais $40,000,000 5.33333333% 5.405405405%
--------------------------------------------------------------------------------------------------------------------
6. Credit Suisse $40,000,000 5.33333333% 5.405405405%
--------------------------------------------------------------------------------------------------------------------
7. PNC $40,000,000 5.33333333% 5.405405405%
--------------------------------------------------------------------------------------------------------------------
8. Westdeutsche $40,000,000 5.33333333% 5.405405405%
--------------------------------------------------------------------------------------------------------------------
9. ABN-AMRO $27,000,000 3.60000000% 3.648648649%
--------------------------------------------------------------------------------------------------------------------
10. Bank of America $27,000,000 3.60000000% 3.648648649%
--------------------------------------------------------------------------------------------------------------------
11. Banque Paribas $27,000,000 3.60000000% 3.648648649%
--------------------------------------------------------------------------------------------------------------------
12. Barclays $27,000,000 3.60000000% 3.648648649%
--------------------------------------------------------------------------------------------------------------------
13. Fleet Bank $27,000,000 3.60000000% 3.648648649%
--------------------------------------------------------------------------------------------------------------------
14. Guaranty $27,000,000 3.60000000% 3.648648649%
--------------------------------------------------------------------------------------------------------------------
15. National City $27,000,000 3.60000000% 3.648648649%
--------------------------------------------------------------------------------------------------------------------
16. Bank of Tokyo $27,000,000 3.60000000% 3.648648649%
--------------------------------------------------------------------------------------------------------------------
17. CIBC $27,000,000 3.60000000% 3.648648649%
--------------------------------------------------------------------------------------------------------------------
18. Long Term $27,000,000 3.60000000% 3.648648649%
--------------------------------------------------------------------------------------------------------------------
19. Credit Agricole $22,500,000 3.00000000% 3.040540541%
--------------------------------------------------------------------------------------------------------------------
20. Fuji $22,500,000 3.00000000% 3.040540541%
--------------------------------------------------------------------------------------------------------------------
21. Mitsubishi $22,500,000 3.00000000% 3.040540541%
--------------------------------------------------------------------------------------------------------------------
22. Sumitomo $22,500,000 3.00000000% 3.040540541%
--------------------------------------------------------------------------------------------------------------------
23. DKB $22,500,000 3.00000000% 3.040540541%
--------------------------------------------------------------------------------------------------------------------
24. Sanwa $22,500,000 3.00000000% 3.040540541%
--------------------------------------------------------------------------------------------------------------------
25. Xxxxx Fargo $22,500,000 3.00000000% 3.040540541%
--------------------------------------------------------------------------------------------------------------------
Total $750,000,000 100.000000% 100.000000%
====================================================================================================================
-138-
145
EXHIBIT D
SECURITY AGREEMENT
-139-
146
EXHIBIT E-1
FORM OF AMENDED AND RESTATED NOTE
(FOR LOANS OTHER THAN DISCOUNT LOANS AND BID LOANS)
Date of Note: November 12, 1996
FOR VALUE RECEIVED, the undersigned (the "Makers") do hereby jointly and
severally covenant and promise to pay to the order of ____________________ (the
"Lender") or its successors or assigns (collectively, the "Payee"), on the
Termination Date, the aggregate unpaid principal amount of all Loans made by
Lender pursuant to the Credit Agreement other than Discount Loans and Bid Loans
held from time to time by the Lender (the "Principal Amount") and to pay
interest on the unpaid Principal Amount at the applicable interest rate or
rates per annum determined in accordance with the terms of the Credit
Agreement. All payments of principal of and interest on this Note shall be
made in legal tender of the United States. All payments of principal of and
interest on this Note shall be made in immediately available funds at the
principal office of The First National Bank of Chicago (the "Agent"), Xxx Xxxxx
Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx.
Interest on this Note shall be computed on the basis of actual number of
days elapsed in a 360 day year.
This Note is one of the Notes referred to in the Second Amended and
Restated Revolving Credit Agreement, bearing even date herewith, among the
Company, the Borrowing Subsidiaries, the Lender and the other lenders listed on
the signature pages thereof and the Agent (as the same may be amended and
supplemented from time to time, the "Credit Agreement") and is entitled to the
benefits thereof. Reference is made to the Credit Agreement for (i) provisions
for the prepayment hereof, (ii) acceleration of the maturity hereof, (iii) the
obligation of the Makers to pay certain expenses (including attorney's fees)
incurred in the enforcement thereof and hereof and (iv) a description of the
security for this Note. Capitalized terms used herein without definition have
the respective meanings ascribed to them in the Credit Agreement.
All Loans made by the Lender and all repayments of the principal thereof
shall be recorded by the Lender in its books and records; provided, however,
that the Lender's failure to so record or any error in such recording shall not
affect the Makers' liability hereunder or under the Credit Agreement. Upon any
transfer hereof, the Lender shall endorse on the schedule attached hereto or on
a schedule accompanying the transfer of this Note, the unpaid principal balance
of this Note.
-140-
147
If an Event of Default shall occur under the Credit Agreement, the
unpaid Principal Amount hereunder shall become due and payable (i)
automatically in the case of any of the Events of Default specified in
paragraph (k) of Section 10.1 of the Credit Agreement, or (ii) at the option of
the Required Lenders with respect to all other Events of Default and shall bear
interest at the rate provided for in Section 2.7 of the Credit Agreement from
and after such date. The foregoing provision shall not be construed as a
waiver by the Payee of its right to pursue any other remedies available to it
under this Note, the Credit Agreement or any other instrument evidencing or
securing the Principal Amount.
This Note may not be changed orally but only by an agreement in writing,
signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought. Written notices required to be given
hereunder shall be given as provided in the Credit Agreement to the Payee and
Makers at the respective addresses specified or provided for therein.
Should the indebtedness evidenced by this Note or any part thereof be
collected at law or in equity, or in bankruptcy, receivership or any other
court proceeding (whether at the trial or appellate level), or should this Note
be placed in the hands of attorneys for collection upon default, the Makers
agree to pay, in addition to the principal, interest and other sums due and
payable hereon, all costs of collecting or attempting to collect on this Note,
including reasonable attorneys' fees and expenses.
Notwithstanding the foregoing, recourse to any particular Borrowing
Subsidiary hereunder shall be limited to (i) such Borrowing Subsidiary's
interest in the Collateral pledged by such Borrowing Subsidiary to the Agent or
the Collateral Agent under the Credit Documents and the proceeds thereof plus
(ii) an amount equal to the capital investment by the Company in such Borrowing
Subsidiary, plus (iii) an amount equal to the total of all Debt owed by such
Borrowing Subsidiary to the Company.
Anything herein to the contrary notwithstanding, the obligations of the
Makers under this Note shall be subject to the limitation that payments of
interest shall not be required to the extent that receipt of any such payment
by the Payee would be contrary to provisions of law applicable to Payee which
limit the maximum rate of interest that may be charged or collected by Payee.
The undersigned and all endorsers, guarantors and sureties of this Note
and all other persons liable or to become liable on this Note severally waive
presentment for payment, demand, notice of demand and of dishonor and
nonpayment of this Note, notice of intention to accelerate the maturity of this
Note, notice of
-141-
148
acceleration of the maturity of this Note, protest and notice of protest,
diligence in collecting, and the bringing of suit against any other party, and
agree to all renewals, extensions, modifications, partial payments, releases or
substitutions of security, in whole or in part, with or without notice, before
or after maturity.
Notwithstanding the foregoing paragraphs and all other provisions of
this Note and the Credit Agreement, none of the terms and provisions of this
Note or the Credit Agreement shall ever be construed to create a contract to
pay to the Payee, for the use, forbearance or detention of money, interest in
excess of the maximum amount of interest permitted to be charged by the Payee
to the undersigned under applicable state or federal law from time to time in
effect, and the undersigned shall never be required to pay interest in excess
of such maximum amount. If, for any reason interest is paid hereon in excess
of such maximum amount, then promptly upon any determination that such excess
has been paid the Payee will, at its option, either refund such excess to the
undersigned or apply such excess to the principal owing hereunder.
This Note is to be construed and enforced in accordance with the laws of
the State of Illinois.
IN WITNESS WHEREOF, Makers have executed and delivered this Note on the
day and year first above written.
SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President
and Chief Financial Officer
Address:
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxxx, XX 00000-0000
Attn: Chief Financial Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
and
Attn: Vice President/Treasury
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
-142-
149
THE MORTGAGE AUTHORITY, INC.
By:________________________________
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
Address:
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxxx, XX 00000-0000
Attn: Controller
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
CENTRAL PACIFIC MORTGAGE COMPANY
By:________________________________
Name: Xxxx Xxxxxxx
Title: Chief Financial Officer
Address:
0000 Xxxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxx, XX 00000
Attn: Chief Financial Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
-143-
150
PAYMENTS OF PRINCIPAL
Unpaid
Principal Notation
Date Balance Made by
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
-144-
151
EXHIBIT E-2
FORM OF AMENDED AND RESTATED DISCOUNT NOTE
Date of Note: November 12, 1996
FOR VALUE RECEIVED, the undersigned (the "Makers") do hereby jointly and
severally covenant and promise to pay to the order of ____________________ (the
"Lender") or its successors or assigns (collectively, the "Payee") the unpaid
principal amount of each Discount Loan made and retained by the Lender (if the
holder hereof is the Balance Bank initially making such discount Loan) or, in
all other cases, made by a Balance Bank and purchased by the holder hereof (or
its predecessor in interest) under the Credit Agreement (the "Principal
Amount"), on the last day of the Discount Loan Period applicable to each such
Discount Loan with a final payment of any such amounts not previously due on
the Termination Date.
Each Discount Loan evidenced by this Note was funded to the Company at a
discount as provided in the Credit Agreement; accordingly, the unpaid principal
amount of each Discount Loan evidenced by this Note will bear no interest
hereunder until the last day of the Discount Loan Period applicable thereto,
and if such unpaid principal amount of such Discount Loan is not paid in full
on such day, such unpaid principal amount shall from and after such day bear
interest at the rate of interest set forth in Section 2.7 of the Credit
Agreement. All payments of principal of and interest, if any, on this Note
shall be made in legal tender of the United States. All payments of principal
of and interest on this Note shall be made in immediately available funds at
the principal office of The First National Bank of Chicago (the "Agent"), Xxx
Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx.
Interest on this Note, if any, shall accrue, shall be computed on the
basis of actual number of days elapsed in a 360 day year.
This Note is one of the Discount Notes referred to in the Second Amended
and Restated Revolving Credit Agreement, bearing even date herewith, among the
Company, the Borrowing Subsidiaries, the Lender and the other lenders listed on
the signature pages thereof and the Agent (as the same may be amended and
supplemented from time to time, the "Credit Agreement") and is entitled to the
benefits thereof. Reference is made to the Credit Agreement for (i) provisions
for the prepayment hereof, (ii) acceleration of the maturity hereof, (iii) the
obligation of the Makers to pay certain expenses (including attorney's fees)
incurred in the enforcement thereof and hereof and (iv) a
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description of the security for this Note. Capitalized terms used herein
without definition have the respective meanings ascribed to them in the Credit
Agreement.
All Discount Loans made by the Lender and all repayments of the
principal thereof shall be recorded by the Lender in its books and records;
provided, however, that the Lender's failure to so record or any error in such
recording shall not affect the Makers' liability hereunder or under the Credit
Agreement. Upon any transfer hereof, the Lender shall endorse on the schedule
attached hereto or on a schedule accompanying the transfer of this Note, the
unpaid principal balance of this Note.
If an Event of Default shall occur under the Credit Agreement, the
unpaid Principal Amount hereunder shall become due and payable (i)
automatically in the case of any of the Events of Default specified in
paragraph (k) of Section 10.1 of the Credit Agreement, or (ii) at the option of
the Required Lenders with respect to all other Events of Default and shall bear
interest at the rate provided for in Section 2.7 of the Credit Agreement from
and after such date. The foregoing provision shall not be construed as a
waiver by the Payee of its right to pursue any other remedies available to it
under this Note, the Credit Agreement or any other instrument evidencing or
securing the Principal Amount.
This Note may not be changed orally but only by an agreement in writing,
signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought. Written notices required to be given
hereunder shall be given as provided in the Credit Agreement to the Payee and
Makers at the respective addresses specified or provided for therein.
Should the indebtedness evidenced by this Note or any part thereof be
collected at law or in equity, or in bankruptcy, receivership or any other
court proceeding (whether at the trial or appellate level), or should this Note
be placed in the hands of attorneys for collection upon default, the Makers
agree to pay, in addition to the principal, interest and other sums due and
payable hereon, all costs of collecting or attempting to collect on this Note,
including reasonable attorneys' fees and expenses.
Notwithstanding the foregoing, recourse to any particular Borrowing
Subsidiary hereunder shall be limited to (i) such Borrowing Subsidiary's
interest in the Collateral pledged by such Borrowing Subsidiary to the Agent or
the Collateral Agent under the Credit Documents and the proceeds thereof plus
(ii) an amount equal to the capital investment by the Company in such Borrowing
Subsidiary, plus (iii) an amount equal to the total of all Debt owed by such
Borrowing Subsidiary to the Company.
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Anything herein to the contrary notwithstanding, the obligations of the
Makers under this Note shall be subject to the limitation that payments of
interest shall not be required to the extent that receipt of any such payment
by the Payee would be contrary to provisions of law applicable to Payee which
limit the maximum rate of interest that may be charged or collected by Payee.
The undersigned and all endorsers, guarantors and sureties of this Note
and all other persons liable or to become liable on this Note severally waive
presentment for payment, demand, notice of demand and of dishonor and
nonpayment of this Note, notice of intention to accelerate the maturity of this
Note, notice of acceleration of the maturity of this Note, protest and notice
of protest, diligence in collecting, and the bringing of suit against any other
party, and agree to all renewals, extensions, modifications, partial payments,
releases or substitutions of security, in whole or in part, with or without
notice, before or after maturity.
Notwithstanding the foregoing paragraphs and all other provisions of
this Note and the Credit Agreement, none of the terms and provisions of this
Note or the Credit Agreement shall ever be construed to create a contract to
pay to the Payee, for the use, forbearance or detention of money, interest in
excess of the maximum amount of interest permitted to be charged by the Payee
to the undersigned under applicable state or federal law from time to time in
effect, and the undersigned shall never be required to pay interest in excess
of such maximum amount. If, for any reason interest is paid hereon in excess
of such maximum amount, then promptly upon any determination that such excess
has been paid the Payee will, at its option, either refund such excess to the
undersigned or apply such excess to the principal owing hereunder.
This Note is to be construed and enforced in accordance with the laws of
the State of Illinois.
IN WITNESS WHEREOF, Makers have executed and delivered this Note on the
day and year first above written.
SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President
and Chief Financial Officer
Address:
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00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxxx, XX 00000-0000
Attn: Chief Financial Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
and
Attn: Vice President/Treasury
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
THE MORTGAGE AUTHORITY, INC.
By:________________________________
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
Address:
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxxx, XX 00000-0000
Attn: Controller
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
CENTRAL PACIFIC MORTGAGE COMPANY
By:________________________________
Name: Xxxx Xxxxxxx
Title: Chief Financial Officer
Address:
0000 Xxxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxx, XX 00000
Attn: Chief Financial Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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PAYMENTS OF PRINCIPAL
Unpaid
Principal Notation
Date Balance Made by
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EXHIBIT F
METHOD OF DETERMINING WEIGHTED AVERAGE PURCHASE PRICES
STEP ONE
Group Mortgage Loans or Securities into the following categories (or such other
categories as are agreed upon among the Company, the Agent and the Collateral
Agent):
GNMA 15 FNMA/FHLMC 15 Private
GNMA 30 FNMA/FHLMC 30 Investors
GNMA ARM FNMA/FHLMC ARM
FNMA/FHLMC Balloon
Non-Conforming
Jumbo
STEP TWO - WEEKLY
Allocate Approved Investor Commitments (other than those allocated to repos)
under which the applicable Mortgage Loans or Securities could be settled to
each mortgage-type category on a FIFO basis. The dollar amount of Approved
Investor Commitments allocated should cover the maximum amount of Mortgage
Loans or Securities for which the Company expects to borrow in the following
week. If the mortgage balances exceed the allocated Approved Investor
Commitments on any day, a re-allocation should be calculated.
After allocating Approved Investor Commitments, compute the weighted average
price of the Approved Investor Commitments. This is the price to be allocated
to Securities or the unpaid principal balance of Mortgage Loans, as applicable,
in each category for any borrowing in the next week. Approved Investor
Commitments may not be allocated to Mortgage Loans unless the related coupons
net of servicing and guaranty fees equal or exceed the contract coupon
requirement.
AT THE REQUEST OF THE CREDIT AGENT, THE FOLLOWING FURTHER STEPS SHALL BE TAKEN
WHEN COMPUTING THE WEIGHTED AVERAGE PURCHASE PRICES.
STEP THREE - XXXX TO MARKET FORWARD PURCHASE CONTRACTS
Calculate the value of all unallocated mandatory delivery forward purchase
contracts. Compute a net negative or positive amount to be added to or
subtracted from the aggregate market value of all collateral. Use the
following method:
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AGENCY SECURITY CONTRACT
Find the Telerate (or other recognized electronic service) purchase (offer)
price for same coupon, type, and delivery date as stated on the Company's
forward purchase contract. Subtract the Company's contract price from the
Telerate price and multiply by the dollar amount of the contract. A positive
number is a deduction, and a negative number is an addition to aggregate market
value.
OTHER CONTRACTS
Unallocated Whole Loan Contracts:
Use the above method but use the weighted average posted prices of two
nationally recognized private mortgage conduits mutually acceptable to the
Collateral Agent and the Company for similar mortgages, coupon (net of
servicing fees) and delivery date.
Private Label Securities Forward Purchase Contracts:
Use the same method but the current contract price should be based on quotes of
two nationally recognized dealers in private label mortgage-backed securities
for the same forward delivery date as the contract.
If no Telerate price is posted for a particular agency or whole loan coupon,
the posted price associated with the nearest lower coupon should be used. If
the contract coupon is below the lowest Telerate coupon then the price should
be based on quotes of two nationally recognized dealers in mortgage-backed
securities for the same forward delivery date as the contract.
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EXHIBIT G
FORM OF BID LOAN NOTICE
TO: The First National Bank of Chicago, as Agent
FROM: Source One Mortgage Services Corporation, and _______________,
as a Bid Lender
Reference is made to that certain Second Amended and Restated Revolving
Credit Agreement (the "Agreement") dated November 12, 1996 by and among Source
One Mortgage Services Corporation (the "Company"), the Borrowing Subsidiaries,
the Agent and certain other lenders. All capitalized terms not otherwise
defined in this notice shall have the meaning given to them in the Agreement.
The Company (on behalf of itself and the Borrowing Subsidiaries) and the
Bid Lender hereby inform you that the Company has accepted a bid from the Bid
Lender for one or more Bid Loans having the following terms:
Principal Amount of Loan: $_______________
Rate of Interest: _______________%
Advance Date: _______________, 199_
Interest Period (1 to 45 days): _______________
Proposed Due Date*: _______________, ____
[BID LENDER] SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:______________________ By:____________________________
Its:_____________________ Its:___________________________
* If other than Termination Date.
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EXHIBIT H
FORM OF NEW/MODIFIED COMMITMENT SUPPLEMENT
This New/Modified Commitment Supplement ("Supplement") is made as of
_________________, 199_ (the "Effective Date") by and among Source One Mortgage
Services Corporation (the "Company"), The Mortgage Authority, Inc., Central
Pacific Mortgage Company, The First National Bank of Chicago, in its capacity
as agent ("Agent"), and _______________________ ("New Lender"), [and
____________________________ ("Assignor")][BRACKETED LANGUAGE IS APPLICABLE IF
AN EXISTING LENDER IS ASSIGNING A PORTION OF ITS COMMITMENT].
The Company, the Borrowing Subsidiaries, [Assignor] and Agent are
parties to a certain Second Amended and Restated Revolving Credit Agreement
dated as of November 12, 1996 (the "Credit Agreement") pursuant to which Agent
and certain other Lenders agreed to provide a revolving credit facility to the
Company and the Borrowing Subsidiaries on the terms and conditions set forth in
the Credit Agreement. Any capitalized term not expressly defined herein shall
have the meaning ascribed to such term in the Credit Agreement.
The New Lender has agreed to become a Lender under the Credit Agreement
with a Commitment in the amount of ______________________ Dollars
($______________). [The Company and Assignor have agreed to reduce Assignor's
Commitment under the Credit Agreement to ____________________ Dollars
($___________).]
The parties hereto desire to amend the Credit Agreement pursuant to
Section 2.1(b) thereof to reflect the New Lender's Commitment [and Assignor's
reduced Commitment].
NOW, THEREFORE, the parties hereto agree as follows:
1. From and after the Effective Date, the New Lender shall be
considered a "Lender" under the Credit Agreement and the Company, the Borrowing
Subsidiaries and Agent hereby consent to the addition of the New Lender.
2. From and after the Effective Date, the New Lender's Commitment
under the Credit Agreement shall be ________________________ Dollars
($______________) or such other amount as may be stated in any subsequent
modification to the Credit Agreement. The Company and the Borrowing
Subsidiaries shall execute and deliver to the New Lender simultaneously
herewith Notes in the form attached as Exhibits E-1 and E-2 to the Credit
Agreement. The Aggregate Commitment of the Lenders under the Credit Agreement,
after giving effect to such
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Commitment by the New Lender [and the reduced Commitment of Assignor described
in the following Section] shall be $_______________.
[3. From and after the Effective Date, Assignor's Commitment under
the Credit Agreement shall be _________________________________ Dollars
($______________) or such other amount as may be stated in any subsequent
modification to the Credit Agreement.]
[4. The New Lender, promptly after receipt of its Notes, agrees to
purchase from Assignor, and Assignor hereby agrees to sell to the New Lender,
without recourse, a portion of the outstanding Loans made by Assignor equal to
_________ percent (__%) of the outstanding principal balance of each such Loan.
Such purchase shall be effected by wire transfer of immediately available funds
to Assignor on the Effective Date. The Company and each Borrowing Subsidiary
each irrevocably and unconditionally agrees that from and after the Effective
Date the portion of Loans so funded by Assignor shall be evidenced by and shall
be deemed to be Loans made by the New Lender under the New Lender's Note as of
the Effective Date and shall be treated as such for purposes of calculating
interest and fees accruing from and after the Effective Date under the Credit
Agreement. All interest and fees accruing on such portion of the Loans prior
to the Effective Date shall be paid when due to Assignor.]
5. For purposes of Section 12.2 of the Credit Agreement (Notices),
the New Lender's address and telecopy number shall be as specified below its
signature in this Supplement.
6. All references in the Credit Agreement and the other Credit
Documents shall be deemed to refer to the Credit Agreement as modified by this
Supplement. Pursuant to Section 2.1(b) of the Credit Agreement, Exhibit C to
the Credit Agreement is hereby replaced by Exhibit C to this Supplement.
7. In all other respects, the Credit Agreement is and remains
unmodified and in full force and effect and is hereby ratified and confirmed.
8. This Supplement may be executed in any number of counterparts,
all of which taken together shall constitute one agreement, and any of the
parties hereto may execute this Supplement by signing any such counterpart.
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IN WITNESS WHEREOF, the Company, the Borrowing Subsidiaries, the New
Lender, [Assignor] and Agent have executed this Supplement as of the date first
above written.
COMPANY: SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:________________________________
Name:___________________________
Title:__________________________
TMA: THE MORTGAGE AUTHORITY, INC.
By:________________________________
Name:___________________________
Title:__________________________
CPM: CENTRAL PACIFIC MORTGAGE COMPANY
By:________________________________
Name:___________________________
Title:__________________________
NEW LENDER: ___________________________________
By:________________________________
Name:___________________________
Title:__________________________
Address for Notices:
___________________________________
___________________________________
Attn: ____________________________
Telephone No.: ___________________
Facsimile No.: ___________________
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AGENT: THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:________________________________
Name:___________________________
Title:__________________________
[ASSIGNOR: ___________________________________
By:________________________________
Name:___________________________
Title:__________________________]
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EXHIBIT I
FORM OF NON-LENDER BALANCE BANK SUPPLEMENT
THIS NON-LENDER BALANCE SUPPLEMENT (the "Supplement") is entered into as
of _________________, 199_, by and among SOURCE ONE MORTGAGE SERVICES
CORPORATION, a Delaware corporation (the "Company"), THE MORTGAGE AUTHORITY,
INC., a Delaware corporation, CENTRAL PACIFIC MORTGAGE COMPANY, a California
corporation, THE FIRST NATIONAL BANK OF CHICAGO, a national banking
association, as administrative agent for the Lenders ("Agent"), and
____________________________, a _____________________ (the "Bank"), an
Affiliate of one of the Lenders.
A. The Company, the Borrowing Subsidiaries, and Agent are parties
to that certain Second Amended and Restated Revolving Credit Agreement dated as
of November 12, 1996 (the "Credit Agreement") pursuant to which Agent and
certain other Lenders agreed to provide a revolving credit facility to the
Company and the Borrowing Subsidiaries on the terms and conditions set forth in
the Credit Agreement. Any capitalized term not expressly defined herein shall
have the meaning ascribed to such term in the Credit Agreement.
B. The Bank has agreed to become a Non-Lender Balance Bank under
the Credit Agreement and to make Discount Advances and to sell its interest in
such Discount Advances to the Lenders in accordance with Section 2.4 of the
Credit Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. The Bank hereby agrees to become and is hereby designated as a
"Non-Lender Balance Bank" under the Credit Agreement, but is not and shall not
be considered a "Lender" under the Credit Agreement. The Bank hereby agrees to
(i) enter into a Balance Bank Agreement with the Company, (ii) make Discount
Advances to the Company, (iii) sell its interest in such Discount Advances to
the Lenders, and (iv) otherwise accede to all obligations of a Non-Lender
Balance Bank under Section 2.4 of the Credit Agreement. The Bank shall be
entitled to all rights of a Non-Lender Balance Bank under the Credit Agreement.
2. None of the Borrowing Subsidiaries, the Company or the Agent
shall consent to any amendment of the provisions of Section 2.4 of the Credit
Agreement affecting the Bank without the prior written consent of the Bank.
3. The Bank's address for any notices to be sent in connection with
the Credit Agreement shall be as specified below its signature in this
Supplement.
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4. This Supplement may be executed in any number of counterparts,
all of which taken together shall constitute one agreement, and any of the
parties hereto may execute this Supplement by signing any such counterpart.
IN WITNESS WHEREOF, the Company, the Borrowing Subsidiaries, Agent and
the Bank have executed this Supplement as of the date first above written.
COMPANY: SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:________________________________
Name:___________________________
Title:__________________________
TMA: THE MORTGAGE AUTHORITY, INC.
By:________________________________
Name:___________________________
Title:__________________________
CPM: CENTRAL PACIFIC MORTGAGE COMPANY
By:________________________________
Name:___________________________
Title:__________________________
AGENT: THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:________________________________
Name:___________________________
Title:__________________________
BANK: ___________________________________
By:________________________________
Name:___________________________
Title:__________________________
Address for Notices:
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___________________________________
___________________________________
Attn: ____________________________
Telephone No.: ___________________
Facsimile No.: ___________________
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166
EXHIBIT J
FORM OF AP NOTICE
[SOURCE ONE MORTGAGE SERVICES CORPORATION (the "Company")][OR THE
APPLICABLE BORROWING SUBSIDIARY] ("Borrowing Subsidiary")] pursuant to that
certain Second Amended and Restated Revolving Credit Agreement, dated as of
November 12, 1996 (as amended, extended and replaced from time to time,
collectively, the "Credit Agreement") among the Company, the Borrowing
Subsidiaries, The First National Bank of Chicago, individually and as agent
(the "Credit Agent"), and certain other lenders, and (ii) that certain Second
Amended and Restated Security and Collateral Agency Agreement dated as of
November 12, 1996 by and among the Company, the Borrowing Subsidiaries, the
Credit Agent and National City Bank of Kentucky (the "Collateral Agent") as
collateral agent for the Secured Parties (as defined in the Credit Agreement),
for new value this day received, and as security for the payment of any and all
indebtedness and obligations of the Company and Borrowing Subsidiaries under
the Credit Agreement, hereby creates and grants to the Collateral Agent for the
benefit of the Secured Parties a security interest in and to the mortgage loans
identified as "AP Mortgages" on the Company's "Collateral Transmittals" (as
such term is defined in the Credit Agreement) on the date indicated below which
provide the information concerning the AP Mortgages required by the Credit
Agreement.
[SOURCE ONE MORTGAGE SERVICES
CORPORATION]
[APPLICABLE BORROWING SUBSIDIARY]
By:_____________________________________
Dated:_______________, 199_.
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EXHIBIT K
FORM OF OPINION LETTER
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EXHIBIT L
MATERIAL LITIGATION NOT REFERENCED IN ANNUAL/QUARTERLY REPORTS
NONE.
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EXHIBIT M
FORM OF FUNDING AGREEMENTS
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EXHIBIT N
FORM OF TRANSITION MEMORANDUM
This TRANSITION MEMORANDUM is dated as of November 12, 1996, by and
between Source One Mortgage Services Corporation, a Delaware corporation (the
"Company"), The Mortgage Authority, a Delaware corporation ("TMA"), Central
Pacific Mortgage Company, a ____________ and The First National Bank of
Chicago, as agent ("Agent") for the Existing Lenders and for the Continuing
Lenders (as such terms are hereinafter defined).
The Company and the Borrowing Subsidiaries have entered into a certain
Second Amended and Restated Revolving Credit Agreement dated as of November 12,
1996 (the "Credit Agreement") with the lenders named therein and the Agent.
The lenders under the Credit Agreement are hereinafter referred to collectively
as the "Continuing Lenders". Pursuant to the Credit Agreement the Continuing
Lenders will agree to extend credit to the Company and the Borrowing
Subsidiaries through a revolving credit facility (the "New Facility") on the
terms and subject to the conditions set forth therein. Capitalized terms not
otherwise defined herein are used with the same meanings as in the Credit
Agreement.
The New Facility amends and restates the Company's and TMA's existing
revolving credit facility (the "Existing Facility") made available pursuant to
that certain Amended and Restated Revolving Credit Agreement dated as of March
24, 1995 (as amended, the "Existing Agreement"), by and among the Company, TMA,
the Agent and the lenders participating therein (each an "Existing Lender").
Certain of the Existing Lenders are not Continuing Lenders under the New
Facility (the "Exiting Lenders"). In addition, pursuant to the Credit
Agreement (i) certain of the Existing Lenders will have a percentage of the
Aggregate Commitment under the New Facility that differs from their percentage
under the Existing Facility, and (ii) certain Continuing Lenders joining the
New Facility are not Existing Lenders.
The purpose of this Transition Memorandum is to set forth an
understanding of certain matters concerning the transition by the Company from
the Existing Facility to the New Facility, such matters including, without
limitation, (i) the payment of all the outstanding Loans (as defined in the
Existing Agreement and hereinafter referred to as the "Existing Loans") to the
Exiting Lenders, (ii) the changes necessary in the percentage of the Advances
under the Credit Agreement held by the Continuing Lenders, and (iii) the
initial fundings of Advances by the Continuing Lenders which are not Existing
Lenders.
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1. Summary of Existing Loans. The initial Advance under the New
Facility shall be used to pay any Existing Loans held by the Exiting Lenders.
Prior to the date the conditions precedent set forth in Article 5 of the Credit
Agreement are satisfied (such date being the "Effective Date"), the Agent shall
identify the Existing Loans payable by the Company under the Existing
Agreements to each Exiting Lender and advise the Continuing Lenders of such
amount. The aggregate outstanding balance of the Existing Loans held by the
Exiting Lenders on the Effective Date shall be hereinafter referred to as the
"Exiting Lender Pay-Off Amount".
2. Initial Advance. Subject to the terms and conditions set forth
in the Credit Agreement, including, without limitation, satisfaction of the
conditions precedent set forth in Article 5 therein, the Continuing Lenders
will make an initial Advance to the Company on the Effective Date in an amount
equal to the Exiting Lender Pay-Off Amount. The initial Advance shall be based
upon an Advance Notice and shall consist of such types of Advances specified in
such Advance Notice. Each Continuing Lender will agree to make its share of
such Advance available to the Agent at such time and in such amount as provided
in the Credit Agreement as modified by Paragraphs 3 and 4 below.
3. Conversion of Loans. With respect to each Continuing Lender, to
the extent that such lender has an Existing Loan outstanding on the date of the
initial Advance, such Continuing Lender shall only be required to fund to the
Agent an amount (the "Net Funding Amount") equal to the excess, if any, of that
amount by which the aggregate amount of its Loans to be outstanding under the
New Facility on the Effective Date exceeds the aggregate amount of its Existing
Loans (excluding any accrued and unpaid interest, Fees and other charges or
expenses thereon). After making its Net Funding Amount available to the Agent,
such Continuing Lender shall be deemed to have made available all of its Loans
under the New Facility and shall be deemed to have converted its Existing Loans
(excluding any accrued and unpaid interest and other charges or expenses
thereon). To the extent that a Continuing Lender has Existing Loans in an
amount which exceeds the amount of its Loans to be outstanding under the New
Facility on the Effective Date, such Lender shall be deemed to have made
available all of its Loans under the New Facility required to be made on the
Effective Date and shall be repaid a portion of its Existing Loans equal to
such excess amount, if any, as provided in Paragraph 4. All Existing Loans
held by Continuing Lenders which are outstanding on the Effective Date and not
repaid shall continue as the same type of Loan under the New Facility until
repaid or converted in accordance with the terms of the Credit Agreement;
provided that from and after the Effective Date such Existing Loans shall bear
interest at the interest rates applicable under the Credit Agreement rather
than the rates applicable under the Existing Agreements.
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4. Percentage Reconciliation. If any Continuing Lender holds
Existing Loans (other than Bid Loans) on the Effective Date which are in excess
of such Continuing Lender's Adjusted Commitment Percentage of the Loans (other
than Bid Loans and Swingline Loans) to be outstanding under the New Facility
(an "Overfunded Lender") on the Effective Date, such Overfunded Lender shall be
repaid from the additional funding under the following sentence an amount of
Existing Loans sufficient to eliminate such excess. Each Continuing Lender
(including any Continuing Lender which is not an Existing Lender) that holds
Existing Loans in an amount less than such Continuing Lender's Adjusted
Commitment Percentage of the Loans (other than Bid Loans and Swingline Loans)
to be outstanding under the New Facility on the Effective Date (an "Underfunded
Lender") shall make an additional funding as a Federal Funds Loan in connection
with the initial Advance in an amount sufficient to eliminate such shortfall
(such additional funding being collectively referred to as "Percentage
Reconciliation Funding Amount").
5. Distribution of Initial Advance. After each Continuing Lender
has funded its Loan (or so much of such Loan as may be required pursuant to
Paragraphs 3 and 4 above), the Agent shall (i) distribute to each Exiting
Lender its Exiting Lender Pay-Off Amount in accordance with the Existing
Agreements and (ii) distribute to each Overfunded Lender its share of the
aggregate Percentage Reconciliation Funding Amount.
6. Payment of Accrued Interest and Fees; Indemnification. On the
Effective Date the Company shall pay to the Agent for distribution to each
Exiting Lender all accrued interest and Fees owing to such Lender for its
Existing Loans. To the extent of its obligations under the Existing Agreement,
the Company shall pay each Exiting Lender for all reasonable losses, costs and
expenses incurred by such Exiting Lender in connection with any prepayment of
its Existing Loans in accordance with the terms of the Existing Agreement.
7. Termination of Commitments under Existing Facility. On the
Effective Date the commitments of the Lenders (as defined in the Existing
Agreement) under the Existing Facility shall terminate and the Lenders therein
shall have no further obligation to make any further Loans (as defined in the
Existing Agreement) under the Existing Facility.
8. No Modification. It is understood and agreed to by the parties
hereto that, except as expressly set forth above, nothing in this memorandum
shall modify or amend the covenants, terms and agreements set forth in the
Existing Agreement or the documents related thereto or in the Credit Agreement
and the other Credit Documents, or discharge the obligations of (a) the
Company, TMA, the Existing Lenders and the Agent under the Existing Agreement,
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and (b) the Company, the Borrowing Subsidiaries, the Continuing Lenders and the
Agent under the Credit Agreement.
SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:_____________________________________
Name:________________________________
Title:_____________________________)_
THE MORTGAGE AUTHORITY, INC.
By:_____________________________________
Name:________________________________
Title:______________________________
CENTRAL PACIFIC MORTGAGE COMPANY
By:_____________________________________
Name:________________________________
Title:_______________________________
THE FIRST NATIONAL BANK OF CHICAGO, as
Agent for the Existing Lenders and the
Continuing Lenders
By:_____________________________________
Name:________________________________
Title:_______________________________
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