EXHIBIT 10.38
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WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT
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BETWEEN
COLUMBIA NATIONAL, INCORPORATED,
A MARYLAND CORPORATION,
AS BORROWER
THE LENDERS PARTY THERETO,
RESIDENTIAL FUNDING CORPORATION,
A DELAWARE CORPORATION,
AS CREDIT AGENT,
U.S. BANK NATIONAL ASSOCIATION,
A NATIONAL BANKING ASSOCIATION,
AND
ALLFIRST BANK,
A MARYLAND STATE CHARTERED COMMERCIAL BANK,
AS CO-AGENTS,
AND
U.S. BANK NATIONAL ASSOCIATION,
A NATIONAL BANKING ASSOCIATION,
AS COLLATERAL AGENT
DATED AS OF MAY 3, 2001
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TABLE OF CONTENTS
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1. THE CREDIT .................................................... 1
1.1. The Warehousing Commitment .................................... 1
1.2. Expiration of Warehousing Commitment .......................... 2
1.3. Swingline Facility ............................................ 2
1.4. Warehousing Notes, Sublimit Notes and Swingline Note .......... 2
1.5. The Term Loan Commitment ...................................... 3
1.6. Expiration of the Term Loan Commitments ....................... 3
1.7. Term Loan Note ................................................ 3
1.8. Non-Receipt of funds by the Credit Agent ...................... 3
1.9 Replacement Notes
2. ELIGIBLE loans and other eligible assets ...................... 5
2.1. Limitation on Warehousing Advances Against Mortgage Loans ..... 5
2.2. Limitation on Warehousing Advances And Term Loan Advances
Against Other Eligible Assets ................................. 5
2.3. Eligibility as Seller/Servicer of Mortgage Loans .............. 5
2.4. Eligible Loans ................................................ 6
2.5. Other Eligible Assets ......................................... 6
3. PROCEDURES FOR OBTAINING ADVANCES ............................. 7
3.1. Warehousing Advances .......................................... 7
3.2. Wet Settlement Advances ....................................... 8
3.3. Term Loan Advances ............................................ 8
3.4. Estimate of Advances .......................................... 8
4. INTEREST, PRINCIPAL AND FEES .................................. 9
4.1. Interest ...................................................... 9
4.2. Interest Limitation ........................................... 10
4.3. Principal Payments ............................................ 10
4.4. Warehousing Commitment Fees ................................... 13
4.5. Agent's Fees .................................................. 13
4.6. Term Loan Non-Usage Fees ...................................... 13
4.7. Miscellaneous Charges ......................................... 14
4.8. Method of Making Payments ..................................... 14
4.9. Illegality .................................................... 15
4.10. Increased Costs; Capital Requirements ......................... 15
4.11 Withholding Taxes
5. COLLATERAL .................................................... 18
5.1. Grant of Security Interest .................................... 18
5.2. Release of Security Interest in Pledged Loans and Pledged
Securities .................................................... 19
5.3. Release of Security Interest in Other Eligible Assets ......... 20
5.4. Collection and Servicing Rights ............................... 20
5.5. Return of Collateral at End of Commitments .................... 21
5.6. Delivery of Collateral Documents .............................. 21
5.7. Borrower Remains Liable ....................................... 21
5.8. Further Assurance ............................................. 22
6. CONDITIONS PRECEDENT .......................................... 23
6.1. Initial Advance ............................................... 23
6.2. Each Advance .................................................. 24
7. GENERAL REPRESENTATIONS AND WARRANTIES ........................ 26
7.1. Place of Business ............................................. 26
7.2. Organization; Good Standing; Subsidiaries ..................... 26
7.3. Authorization and Enforceability .............................. 26
7.4. Approvals ..................................................... 27
7.5. Financial Condition ........................................... 27
7.6. Litigation .................................................... 27
7.7. Compliance with Laws .......................................... 27
7.8. Regulation U .................................................. 28
7.9. Investment Company Act ........................................ 28
7.10. Payment of Taxes .............................................. 28
7.11. Agreements .................................................... 28
7.12. Title to Properties ........................................... 29
7.13. ERISA ......................................................... 29
7.14. No Retiree Benefits ........................................... 29
7.15. Assumed Names ................................................. 29
8. AFFIRMATIVE COVENANTS ......................................... 30
8.1. Payment of Obligations ........................................ 30
8.2. Financial Statements .......................................... 30
8.3. Other Borrower Reports ........................................ 30
8.4. Maintenance of Existence; Conduct of Business ................. 31
8.5. Compliance with Applicable Laws ............................... 31
8.6. Inspection of Properties and Books; Operational Reviews ....... 32
8.7. Notice ........................................................ 32
8.8. Payment of Debt, Taxes and Other Obligations .................. 32
8.9. Insurance ..................................................... 33
8.10. Closing Instructions .......................................... 33
8.11. Subordination of Certain Indebtedness ......................... 33
8.12. Other Loan Obligations ........................................ 33
8.13. ERISA ......................................................... 34
8.14. Use of Proceeds of Warehousing Advances ....................... 34
8.15. Use of Proceeds of Term Loan Advances ......................... 34
9. NEGATIVE COVENANTS ............................................ 35
9.1. Contingent Liabilities ........................................ 35
9.2. Limitation on Liens ........................................... 35
9.3. Restrictions on Fundamental Changes ........................... 35
9.4. Investments ................................................... 36
9.5. Loss of Eligibility ........................................... 36
9.6. Limitation on Debt ............................................ 36
9.7. Adjusted Tangible Leverage Ratio .............................. 36
9.8. Minimum Book Net Worth ........................................ 36
9.9. Minimum Adjusted Tangible Net Worth ........................... 37
9.10. Liquidity ..................................................... 37
9.11. Minimum Eligible Servicing Portfolio .......................... 37
9.12. Maximum Servicing Delinquencies and Foreclosures .............. 37
9.13. Maximum Servicing Foreclosures ................................ 37
9.14. Distributions to Shareholders ................................. 37
9.15. Transactions with Affiliates .................................. 37
9.16. Recourse Servicing Contracts .................................. 37
9.17. Deferral of Subordinated Debt ................................. 37
9.18. Accounting Changes ............................................ 38
10. SPECIAL REPRESENTATIONS, WARRANTIES AND COVENANTS ............. 39
CONCERNING COLLATERAL ......................................... 39
10.1. Special Representations and Warranties Concerning
Warehousing Collateral ........................................ 39
10.2. Special Affirmative Covenants Concerning Warehousing
Collateral .................................................... 40
10.3. Special Negative Covenants Concerning Warehousing
Collateral .................................................... 41
10.4. Special Representations and Warranties Concerning
Servicing Collateral .......................................... 42
11. DEFAULTS; REMEDIES ............................................ 43
11.1. Events of Default ............................................. 43
11.2. Remedies ...................................................... 44
11.3. Application of Proceeds ....................................... 47
11.4. Credit Agent Appointed Attorney-in-Fact ....................... 49
11.5. Right of Set-Off .............................................. 50
11.6. Sharing of Payments ........................................... 50
12. AGENTS ........................................................ 51
12.1. Appointment ................................................... 51
12.2. Duties of Agents .............................................. 51
12.3. Standard of Care .............................................. 51
12.4. Delegation of Duties .......................................... 52
12.5. Exculpatory Provisions ........................................ 52
12.6. Reliance by Agent ............................................. 52
12.7. Non-Reliance on Agents or Other Lenders ....................... 53
12.8. Agents in Individual Capacity ................................. 53
12.9. Successor Agent ............................................... 53
13. MISCELLANEOUS ................................................. 55
13.1. Notices ....................................................... 55
13.2. Reimbursement Of Expenses; Indemnity .......................... 55
13.3. Indemnification by the Lenders ................................ 56
13.4. Financial Information ......................................... 56
13.5. Terms Binding Upon Successors; Survival of
Representations ............................................... 56
13.6. Lenders in Individual Capacity ................................ 57
13.7. Assignment and Participations ................................. 57
13.8. Amendments .................................................... 57
13.9. Governing Law ................................................. 58
13.10. Relationship of the Parties ................................... 58
13.11. Severability .................................................. 59
13.12. Consent to Credit References .................................. 59
13.13. Counterparts .................................................. 59
13.14. Entire Agreement .............................................. 59
13.15. Consent to Jurisdiction ....................................... 59
13.16. Waiver of Jury Trial .......................................... 60
14. DEFINITIONS ................................................... 61
14.1. Defined Terms ................................................. 61
14.2. Other Definitional Provisions; Terms of Construction .......... 71
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EXHIBITS
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Exhibit A-TL Term Loan Advance Request
Exhibit A-WC Working Capital Advance Request
Exhibit B [INTENTIONALLY OMITTED]
Exhibit C Schedule of Servicing Portfolio
Exhibit D Subsidiaries
Exhibit E Officer's Certificate
Exhibit F Lines of Credit
Exhibit G Assumed Names
Exhibit H Eligible Loans
Exhibit I Other Eligible Assets
Exhibit J Commitment Summary Report
Exhibit K Warehousing Commitment Amounts
Exhibit L Term Loan Commitment Amounts
Exhibit M Advance Certificate
Exhibit N Permitted Liens
Exhibit O Permitted Debt
Exhibit P Approved Custodians and Investors
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WAREHOUSING CREDIT, TERM LOAN AND
SECURITY AGREEMENT
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WAREHOUSING CREDIT, TERM LOAN AND SECURITY AGREEMENT, dated as of May 3, 2001,
between COLUMBIA NATIONAL, INCORPORATED, a Maryland corporation ("Borrower"),
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation ("RFC"), U.S. BANK
NATIONAL ASSOCIATION ("U.S. Bank"), ALLFIRST BANK, a Maryland state chartered
commercial bank ("Allfirst Bank"), FLEET NATIONAL BANK ("Fleet"), NATIONAL CITY
BANK OF KENTUCKY ("National City"), CREDIT LYONNAIS NEW YORK BRANCH ("Credit
Lyonnais"), COMERICA BANK ("Comerica"), GUARANTY BANK, F.S.B., a federal savings
bank ("Guaranty") and COLONIAL BANK, an Alabama banking corporation ("Colonial")
(RFC, U.S. Bank, Allfirst Bank, Fleet, National City, Credit Lyonnais, Comerica,
Guaranty, Colonial, and any Additional Lender as may from time to time become a
party hereto and their respective successors and permitted assigns being
referred to individually as a "Lender" and collectively as the "Lenders"), and
RFC as credit agent for the Lenders (in such capacity, the "Credit Agent"), and
U.S. Bank, as collateral agent for the Credit Agent and the Lenders ("Collateral
Agent").
A. Borrower has requested certain financing from Lenders.
B. Lenders have agreed to provide that financing to Borrower subject to
the terms and conditions of this Agreement.
C. The "Closing Date" for the transactions contemplated by this
Agreement is May 3, 2001.
NOW, THEREFORE, the parties to this Agreement agree as follows:
1. THE CREDIT
1.1. THE WAREHOUSING COMMITMENT
Effective as of the date of this Agreement, Lenders shall make Warehousing
Advances under this Agreement in an amount equal to all outstanding
warehousing loans and working capital loans made under the Existing
Agreements, and such Advances shall be applied by Credit Agent to repay
such outstanding loans. On the terms and subject to the conditions of this
Agreement, Lenders agree, severally and not jointly, to make Warehousing
Advances to Borrower from the Closing Date to the Business Day immediately
preceding the Warehousing Maturity Date, pro rata in accordance with their
respective Percentage Shares, during which period Borrower may borrow,
repay and reborrow in accordance with the provisions of this Agreement.
The total aggregate principal amount of all Warehousing Advances and
Swingline Advances outstanding at any one time may not exceed the
Warehousing Credit Limit. While a Default or Event of Default exists,
Lenders may refuse to make any additional Warehousing Advances to
Borrower. All Warehousing Advances under this Agreement constitute a
single indebtedness, and all of the Collateral is security for the
Warehousing Note and for the performance of all of the Obligations.
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1.2. EXPIRATION OF WAREHOUSING COMMITMENT
The Warehousing Commitments expire on the earlier of ("Warehousing
Maturity Date"): (a) May 2, 2002, as such date may be extended in writing
by Lenders, in their sole discretion, on which date the Warehousing
Commitment will expire of its own term and the Warehousing Advances will
become due and payable, in each case without the necessity of Notice or
action by Lenders, and (b) the date the Warehousing Commitment is
terminated and the Warehousing Advances become due and payable under
Section 11.2.
1.3. SWINGLINE FACILITY
On the terms and subject to the conditions set forth herein, RFC may, from
time to time to, but not including, the Warehousing Maturity Date, make
Warehousing Advances requested by Borrower, in an aggregate not to exceed
the Swingline Facility Amount, without requesting Warehousing Advances
from the Other Lenders. Such Advances ("Swingline Advance") shall be
evidenced by the Swingline Note. The Lenders hereby agree to purchase from
RFC an undivided participation interest in all outstanding Swingline
Advances held by RFC at any time in an amount equal to each Lender's
Percentage Share of such Swingline Advances. RFC may at any time in its
sole and absolute discretion (and shall no less frequently than weekly and
upon the acceleration of the Obligations following an Event of Default)
request the Lenders to make Advances in principal amounts equal to their
Percentage Shares in the aggregate amount necessary to repay the
outstanding Swingline Advances and each Lender absolutely and
unconditionally agrees to fund such Warehousing Advances, regardless of
any Default or Event of Default or other condition which would otherwise
excuse such Lender from funding Warehousing Advances, provided that no
Lender shall be required to make Advances to repay Swingline Advances
which would cause such Lender's aggregate Warehousing Advances then
outstanding to exceed the amount of such Lender's Warehousing Commitment
Amount. Each Lender's Warehousing Advances made pursuant to the preceding
sentence shall be delivered directly to RFC in immediately available funds
at the office of the Credit Agent by 4:00 p.m. on the day of the request
therefor by RFC if such request is made on or before 3:00 p.m., or by 9:00
a.m. on the 1st Business Day following such request if such request is
made after 3:00 p.m. and shall be promptly applied against the outstanding
Swingline Advances. At the time of any request for Warehousing Advances
from Lenders pursuant to this Section 1.3, the Credit Agent shall deliver
to each Lender a certificate in the form of Exhibit M attached hereto (the
"Advance Certificate"), certified by the Credit Agent. For purposes of the
limitations set forth in Exhibit H and Exhibit I hereto, Swingline
Advances shall be deemed to be Warehousing Advances.
1.4. WAREHOUSING NOTES, SUBLIMIT NOTES AND SWINGLINE NOTE
Warehousing Advances, other than Advances made against Other Eligible
Assets, made by each Lender are evidenced by Borrower's promissory note,
payable to such Lender, in the form prescribed by Credit Agent (each, a
"Warehousing Note"). Warehousing Advances made against Other Eligible
Assets by each Lender are evidenced by Borrower's promissory note, payable
to such Lender, in the form prescribed by Credit Agent (each, a "Sublimit
Note"). Swingline Advances made by RFC are evidenced by Borrower's
promissory note, payable to RFC, in the form prescribed by the Credit
Agent ("Swingline Note"). The terms "Warehousing Notes," "Sublimit Note"
and "Swingline Note," as used in this Agreement, include all amendments,
restatements, renewals or replacements of the original Warehousing Notes,
Sublimit Notes or Swingline Note and all substitutions therefor. All terms
and provisions of the Warehousing Notes, Sublimit Notes and Swingline Note
are incorporated into this Agreement.
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1.5. THE TERM LOAN COMMITMENT
Effective as of the date of this Agreement, Lenders shall make Term Loan
Advances in an amount equal to all outstanding revolving/term loans made
under the Existing Agreements, and such Advances shall be applied by
Lender to repay such outstanding loans. On the terms and subject to the
conditions of this Agreement, Lenders agree, severally and not jointly, to
make Term Loan Advances to Borrower from the Closing Date to the Business
Day immediately preceding the Term Loan Commitment Termination Date, pro
rata in accordance with their respective Percentage Shares, during which
period Borrower may borrow, repay and reborrow in accordance with the
provisions of this Agreement. The total aggregate principal amount
outstanding at any one time of all Term Loan Advances may not exceed the
Term Loan Credit Limit. While a Default or Event of Default exists,
Lenders may refuse to make any additional Term Loan Advances to Borrower.
All Term Loan Advances under this Agreement shall constitute a single
indebtedness, and all of the Collateral shall be security for the Term
Loan Note and for the payment and performance of all the Obligations.
1.6. EXPIRATION OF THE TERM LOAN COMMITMENTS.
The Term Loan Commitments expire on the earlier of ("Term Loan Commitment
Termination Date"): (a) May 2, 2002, as such date may be extended in
writing by Lenders, in their sole discretion, on which date the Term Loan
Commitments will expire of their own term, without the necessity of Notice
or action by Lenders, and (b) the date the Term Loan Commitments are
terminated and the Warehousing Advances become due and payable under
Section 11.2.
1.7. TERM LOAN NOTE
Term Loan Advances made by each Lender are evidenced by Borrower's
promissory note, payable to such Lender, in the form prescribed by the
Credit Agent (each, a "Term Loan Note"). The term "Term Loan Note" as used
in this Agreement includes all amendments, restatements, renewals or
replacements of the original Term Loan Note and all substitutions for it.
All terms and provisions of the Term Loan Note are incorporated into this
Agreement.
1.8. NON-RECEIPT OF FUNDS BY THE CREDIT AGENT.
If the Credit Agent receives notice from a Lender that such Lender does
not intend to make its Percentage Share of any Advances, neither the
Credit Agent nor any other Lender shall have any obligation to fund such
Lender's Percentage Share. Notwithstanding the foregoing, unless a Lender
notifies the Credit Agent by 3:00 p.m. on the date of a proposed Advance
that it does not intend to make its Percentage Share of such Advance
available to the Credit Agent at such time and on such date, the Credit
Agent may assume that such Lender will make such amount available to the
Credit Agent to be advanced to the Borrower, and in reliance on such
assumption, the Credit Agent may, at its option, make a corresponding
amount available to the Borrower.
1.8(a) If the Credit Agent makes such corresponding amount available to
the Borrower and such amount is not made available to the Credit
Agent by such Lender by close of business on the date of the
Warehousing Advance, such Lender shall pay such amount to the
Credit Agent upon demand plus interest to the date of payment at a
rate per annum equal to the Federal Funds Rate.
1.8(b) If a Lender fails to pay as provided herein, the Borrower shall
pay such amount to the Credit Agent upon demand plus interest (at
the rate applicable to the Borrower for such Warehousing Advance)
to the date of repayment.
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1.8(c) Nothing in this Section 1.8 shall relieve any Lender from its
obligation to fund its Percentage Share of any Advance, or
prejudice any rights the Borrower may have against any Lender as a
result of such Lender's failure to make its Percentage Share of
any Advance
1.9. REPLACEMENT NOTES.
Upon receipt of an affidavit of an officer of any Lender as to the loss,
theft, destruction or mutilation of any Note, and, in the case of any such
loss, theft, destruction or mutilation, upon cancellation of such Note,
Borrower will issue, in lieu thereof, a replacement note in the same
principal amount thereof and otherwise of like tenor.
END OF ARTICLE 1
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2. ELIGIBLE LOANS AND OTHER ELIGIBLE ASSETS
2.1. LIMITATION ON WAREHOUSING ADVANCES AGAINST MORTGAGE LOANS
Lenders will make Warehousing Advances upon the request of Borrower, in
the manner provided in Article 3, solely for the purpose of funding
Eligible Loans and against the pledge of those Eligible Loans (excluding
REO Properties) as Collateral. Lenders' obligation to make Warehousing
Advances is subject to the limitations set forth in Exhibit H and to the
following limitations:
2.1(a) No Warehousing Advance, other than a Warehousing Advance made to
repay outstanding loans under the Existing Agreement, will be made
against any Eligible Loan that has been previously sold or pledged
to obtain financing (whether or not such financing constitutes
Debt) under another warehousing financing arrangement or a
Gestation Agreement.
2.1(b) No Warehousing Advance will be made against an Eligible Loan if
the Warehousing Advance will exceed the amount applicable to that
type of Eligible Loan at the time it is pledged, as set forth in
Exhibit H.
2.1(c) No Warehousing Advance, other than a Warehousing Advance to repay
outstanding loans under the Existing Agreement or a Warehousing
Advance against a Repurchased Maturing Mortgage Loan, an Impaired
Mortgage Loan or a Mortgage Loan that constitutes a modification
resulting from an extension of a Mortgage Loan with a final
balloon payment or an adjustable interest rate, shall be made
against a Mortgage Loan closed more than 90 days before the date
of such Warehousing Advance.
2.2. LIMITATION ON WAREHOUSING ADVANCES AND TERM LOAN ADVANCES AGAINST OTHER
ELIGIBLE ASSETS
Lenders will make Warehousing Advances against Other Eligible Assets,
other than Servicing Contracts, and Term Loan Advances against Servicing
Contracts, upon the request of Borrower, in the manner provided in Article
3, for Borrower's general corporate purposes. Lenders' obligation to make
Warehousing Advances and Term Loan Advances against Other Eligible Assets
is subject to the limitations set forth in Exhibit I.
2.3. ELIGIBILITY AS SELLER/SERVICER OF MORTGAGE LOANS
Borrower is approved and qualified and in good standing as a lender or
seller/servicer, as set forth below, and meets all requirements applicable
to its status as:
2.3(a) An FHA-approved mortgagee, eligible to originate, purchase, hold,
sell and service FHA fully insured Mortgage Loans.
2.3(b) A Xxxxxx Xxx-approved seller/servicer of Mortgage Loans and issuer
of Mortgage-backed Securities guaranteed by Xxxxxx Mae.
2.3(c) A lender in good-standing under the VA loan guarantee program
eligible to originate, purchase, hold, sell and service
VA-guaranteed Mortgage Loans.
2.3(d) A Xxxxxx Xxx-approved seller/servicer of Mortgage Loans, eligible
to originate, purchase, hold, sell and service Mortgage Loans to
be sold to Xxxxxx Mae.
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2.3(e) A Xxxxxxx Mac-approved seller/servicer of Mortgage Loans, eligible
to originate, purchase, hold, sell and service Mortgage Loans to
be sold to Xxxxxxx Mac.
2.3(f) A RFC-approved seller/servicer of Mortgage Loans, eligible to
originate, purchase, hold, sell and service Loans to be sold to
RFC.
2.4. ELIGIBLE LOANS
Subject to compliance with the terms, covenants and representations set
forth in this Agreement, each of the Mortgage Loans described on Exhibit H
is an Eligible Loan for the purposes of this Agreement.
2.5. OTHER ELIGIBLE ASSETS
Subject to compliance with the terms, covenants and representations set
forth in this Agreement, each of the assets described on Exhibit I is an
Other Eligible Asset for purposes of this Agreement.
END OF ARTICLE 2
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3. PROCEDURES FOR OBTAINING ADVANCES
3.1. WAREHOUSING ADVANCES
3.1(a) To obtain a Warehousing Advance against an Eligible Loan under
this Agreement, Borrower must deliver to Collateral Agent, not
later than 11:00 a.m. on the Business Day on which Borrower
desires the Warehousing Advance against Eligible Loans, the
documents provided for in the Collateral Agency Agreement
("Warehousing Advance Request").
3.1(b) Collateral Agent has a reasonable time to examine Borrower's
Warehousing Advance Request and the Collateral Documents to be
delivered by Borrower before funding the requested Warehousing
Advance, and may reject any Eligible Loan that does not meet the
requirements of this Agreement (including, without limitation, the
Exhibits hereto), the Collateral Agency Agreement.
3.1(c) Borrower must hold or cause its custodian to hold, in trust for
Credit Agent and Collateral Agent, those original Collateral
Documents of which only copies are required to be delivered to
Collateral Agent under the Collateral Agency Agreement. Unless a
Pledged Loan is being held by an Investor for purchase or has been
redeemed from pledge by Borrower, promptly upon request by
Collateral Agent (or, if the recorded Collateral Documents have
not yet been returned from the recording office, immediately upon
receipt by Borrower or its custodian of those recorded Collateral
Documents), Borrower must deliver or cause its custodian to
deliver to Collateral Agent any or all of the original Collateral
Documents.
3.1(d) If, for the purpose of funding the origination or acquisition of
an Eligible Loan against which the Lenders have made Warehousing
Advances or RFC has made Swingline Advances in accordance with
this Agreement and the Collateral Agency Agreement, the Credit
Agent debits the Borrower's Operating Account at the Funding Bank
to the extent necessary to cover a wire to the Collateral Agent,
and such debit results in an overdraft, the Swingline Lender may
make an additional Swingline Advance to fund such overdraft.
3.1(e) Warehousing Advances against Eligible Loans will be funded in
accordance with the Collateral Agency Agreement.
3.1(f) To obtain a Warehousing Advance against Other Eligible Assets
hereunder, Borrower must deliver to the Credit Agent, no later
than 8:30 a.m. on the Business Day on which Borrower desires to
borrow such Warehousing Advances hereunder, an estimate of the
amount of such Warehousing Advances, and no later than 9:30 a.m.
on such Business Day, a completed and signed request for
Warehousing Advances against Other Eligible Assets ("Working
Capital Advance Request") on the then current form approved by the
Credit Agent. The current form in use by the Credit Agent is
Exhibit A-WC attached hereto. The Credit Agent shall have the
right, on not less than 3 Business Days' prior Notice to Borrower,
to modify Exhibit A-WC to conform to current legal requirements or
lender practices and, as so modified, said Exhibit shall be deemed
a part hereof.
3.1(g) To make Warehousing Advances against Other Eligible Assets
hereunder, the Credit Agent shall disburse the amount thereof (i)
in the case of Advances made on the Closing Date to refinance
loans outstanding under the Existing Agreements, to the agent
thereunder, and (ii) in all other cases, into the Operating
Account.
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3.2. WET SETTLEMENT ADVANCES
Collateral Documents not required for a Wet Settlement Advance must be
delivered by Borrower to Collateral Agent within 9 calendar days after the
date of the Wet Settlement Advance.
3.3. TERM LOAN ADVANCES
3.3(a) To obtain a Term Loan Advance hereunder, Borrower must deliver to
the Credit Agent, no later than 8:30 a.m. on the Business Day on
which Borrower desires to borrow Term Loan Advances hereunder, an
estimate of the amount of such Term Loan Advances, and no later
than 9:30 a.m. on such Business Day, a completed and signed
request for Term Loan Advances ("Term Loan Advance Request") on
the then current form approved by the Credit Agent. The current
form in use by the Credit Agent is Exhibit A-TL attached hereto.
The Credit Agent shall have the right, on not less than 3 Business
Days' prior Notice to Borrower, to modify Exhibit A-TL to conform
to current legal requirements or lender practices and, as so
modified, said Exhibit shall be deemed a part hereof.
3.3(b) To make Term Loan Advances hereunder, the Credit Agent shall
disburse the amount thereof (i) in the case of Term Loan Advances
made on the Closing Date to refinance loans outstanding under the
Existing Agreements, to the agent thereunder, and (ii) in all
other cases, into the Operating Account.
3.4. ESTIMATE OF ADVANCES
Borrower will provide to Credit Agent, by the close of business on each
Business Day, an estimate of the amount, if any, of Warehousing Advances
against Other Eligible Assets and Term Loan Advances Borrower expects to
request on the following Business Day.
END OF ARTICLE 3
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4. INTEREST, PRINCIPAL AND FEES
4.1. INTEREST
4.1(a) Except as provided in Sections 4.1(c), 4.1(e) and 4.1(f), Borrower
must pay interest on the unpaid amount of each Warehousing Advance
from the date the Warehousing Advance is made until it is paid in
full at the Interest Rate specified in Exhibit H or Exhibit I, as
applicable.
4.1(b) Except as provided in Sections 4.1(c), 4.1(e) and 4.1(f), Borrower
must pay interest on the unpaid amount of the Term Loan Advance
from the date the Term Loan Advance is made until it is paid in
full at the Interest Rate specified on Exhibit I.
4.1(c) Borrower and any Lender may enter into an agreement (the "Balance
Funded Agreement") pursuant to which Borrower agrees to maintain
Deposit Balances on deposit with such Lender or a Designated Bank
in consideration of the funding of all or a portion of such
Lender's Advances at a Balance Funded Rate. Borrower may give
written notice to any Lender with which it has a Balance Funded
Agreement, as and when provided in such Balance Funded Agreement,
of Borrower's election to have a portion (the "Balance Funded
Portion") of the principal amount of the Lender's Advances bear
interest at the Balance Funded Rate during any calendar month. In
the event Borrower elects to have all or a portion of any Lender's
Advances bear interest at the Balance Funded Rate during any
month, such Lender shall notify the Credit Agent no later than
12:00 Noon on the second Business Day of the following month of
the estimated amount by which the interest to be paid by Borrower
on such Lender's Advances during such month was reduced as a
result of the application of such Balance Funded Agreement. If the
Deposit Balances maintained by Borrower with such Lender or its
Designated Bank during such month are less than the Balance Funded
Portion, or if the estimate provided by Lender pursuant to the
previous sentence is not accurate, the Lender may charge and
separately xxxx Borrower a deficiency fee (a "Balance Deficiency
Fee"), or credit Borrower with any amount by which interest billed
exceeded interest actually due, the amount of which shall be set
forth in the Balance Funded Agreement between Borrower and such
Lender.
4.1(d) Credit Agent computes interest on the basis of the actual number
of days elapsed in a year of 360 days. Interest is payable monthly
in arrears, on the first day of each month, commencing with the
first month following the Closing Date and on the Maturity Date,
as applicable.
4.1(e) If, for any reason, (1) Borrower repays a Warehousing Advance on
the same day that it was made by Credit Agent or (2) Borrower
instructs Collateral Agent not to make a previously requested
Warehousing Advance after Credit Agent has reserved funds or made
other arrangements necessary to enable Credit Agent to fund that
Warehousing Advance, Borrower agrees to pay to Credit Agent, for
its own account and the account of any Lenders who have provided
funds to the Credit Agent, an administrative fee equal to 1 day of
interest on that Warehousing Advance at the Interest Rate that
would otherwise be applicable under Exhibit H or Exhibit I for the
applicable Eligible Loan or Other Eligible Assets type.
Administrative fees are due and payable in the same manner as
interest is due and payable under this Agreement.
4.1(f) After an Event of Default occurs and upon Notice to Borrower by
Credit Agent, the unpaid amount of each Advance will bear interest
at the Default Rate until paid in full.
9
4.1(g) The rates of interest provided for in this Agreement will be
adjusted as of the effective date of each change in the applicable
index. Credit Agent's determination of such rates of interest as
of any date of determination are conclusive and binding, absent
manifest error.
4.2. INTEREST LIMITATION
Lenders do not intend, by reason of this Agreement, the Notes or any other
Loan Document, to receive interest in an amount in excess of that
permitted by applicable law. If Lenders receive any interest in excess of
the amount permitted by applicable law, whether by reason of acceleration
of the maturity of this Agreement, the Notes or otherwise, Lenders will
apply the excess to the unpaid principal balance of the Advances and not
to the payment of interest. If all Advances have been paid in full and the
Commitments have expired or have been terminated, Lenders will remit any
excess to Borrower. This Section controls every other provision of all
agreements between Borrower and Lenders and is binding upon and available
to any subsequent holder of the Notes.
4.3. PRINCIPAL PAYMENTS
4.3(a) Borrower must pay Lenders the outstanding principal amount of all
Warehousing Advances on the Warehousing Maturity Date.
4.3(b) Borrower must pay Lenders the outstanding principal amount of the
Term Loan Advances on the Term Loan Maturity Date.
4.3(c) Borrower may prepay any portion of the Warehousing Advances, Term
Loan Advances and Swingline Advances without premium or penalty at
any time.
4.3(d) Borrower must pay to Collateral Agent, for distribution to the
Credit Agent for the benefit of the Lenders, without the necessity
of prior demand or Notice from Credit Agent or Collateral Agent,
and Borrower authorizes Credit Agent to cause the Funding Bank to
charge Borrower's Operating Account and the Collateral Agent to
charge any account of Borrower (other than any trust or escrow
account) with it, for the amount of any outstanding Warehousing
Advances or Swingline Advance against a specific Pledged Asset
upon the earliest occurrence of any of the following events:
(1) One (1) Business Day elapses from the date a Warehousing
Advance was made if the Pledged Loan that was to have been
funded by that Warehousing Advance is not closed and funded.
(2) Fifteen (15) calendar days elapse without the return of a
Collateral Document delivered by Collateral Agent to
Borrower under a Trust Receipt for correction or completion.
(3) On the date on which a Pledged Loan is determined to have
been originated based on untrue, incomplete or inaccurate
information or otherwise to be subject to fraud, whether or
not Borrower had knowledge of the misrepresentation,
incomplete or incorrect information or fraud, or on the date
on which Borrower knows, or has reason to know, or receives
Notice from Credit Agent, that one or more of the
representations and warranties set forth in Article 10 were
inaccurate or incomplete in any material respect on any date
when made or deemed made.
(4) On the date the Pledged Loan or a Lien prior to the Pledged
Loan is defaulted and remains in default for a period of 30
days or more.
10
(5) Upon the sale, other disposition or prepayment of any
Pledged Asset, the date that any Pledged Asset is collected
by Borrower, or, with respect to a Pledged Loan included in
an Eligible Mortgage Pool, upon the sale or other
disposition of the related Agency Security.
4.3(e) Upon telephonic or facsimile Notice to Borrower by Collateral
Agent, Borrower must pay to Collateral Agent, for distribution to
the Credit Agent for the benefit of the Lenders, and Borrower
authorizes Credit Agent to cause the Funding Bank to charge
Borrower's Operating Account and the Collateral Agent to charge
any account of Borrower (other than any trust or escrow account)
with it, for the amount of any outstanding Warehousing Advance
against a specific Pledged Asset upon the earliest occurrence of
any of the following events:
(1) For any Pledged Loan, the Warehouse Period elapses.
(2) Forty-five (45) days or, in the case of a Bond Program
Mortgage Loan, 60 days, elapse from the date a Pledged Loan
was delivered to an Investor or Approved Custodian for
examination and purchase or for inclusion in a Mortgage
Pool, without the purchase being made or an Eligible
Mortgage Pool being initially certified, or upon rejection
of a Pledged Loan as unsatisfactory by an Investor or
Approved Custodian.
(3) Nine (9) calendar days elapse from the date a Wet Settlement
Advance was made against a Pledged Loan without receipt by
Collateral Agent of all Required Documents relating to the
Pledged Loan, or the Required Documents, upon examination by
Collateral Agent, do not comply with the requirements of
this Agreement or the Collateral Agency Agreement.
(4) With respect to any Pledged Loan, any of the Collateral
Documents, upon examination by Collateral Agent (and at the
reasonable discretion of the Credit Agent and the Collateral
Agent), are found not to be in compliance with the
requirements of this Agreement.
4.3(f) In addition to the payments required pursuant to Sections 4.3(d)
and 4.3(e), if the principal amount of any Pledged Loan or Other
Eligible Assets is prepaid in whole or in part while Warehousing
Advances or a Swingline Advance are outstanding against the
Pledged Loan or Other Eligible Asset, Borrower must pay to Credit
Agent, without the necessity or prior demand or Notice from Credit
Agent or Collateral Agent, and Borrower authorizes Credit Agent to
cause the Funding Bank to charge Borrower's Operating Account for,
the amount of the prepayment, to be applied against the
Warehousing Advance or Swingline Advance.
4.3(g) The proceeds of the sale, other disposition or collection of
Pledged Assets must be paid directly by the Investor or other
Obligor to the Settlement Account. Borrower must give Notice to
Collateral Agent (by telephone or electronic mail, and if by
telephone, followed promptly by written notice) of the Pledged
Assets for which proceeds have been received no later than 11:00
a.m. on the date on which Borrower wants such proceeds applied to
the Advances. Upon receipt of Borrower's Notice, Collateral Agent
will disburse such proceeds to the Cash Collateral Account and
notify the Credit Agent to apply such proceeds to the payment of
the Advances related to the Pledged Assets identified by Borrower
in its Notice, and those Pledged Assets will be considered to have
been redeemed from pledge. Collateral Agent is entitled to rely
upon Borrower's affirmation that deposits in the Settlement
Account represent payments from Investors or obligors for the
purchase or in payment of the Pledged Assets specified by Borrower
in its Notice. If the payment from an Investor or obligor for the
purchase or in payment of Pledged Assets is less than the
outstanding Warehousing Advances against the Pledged Assets
11
identified by Borrower in its Notice, Borrower authorizes Credit
Agent to cause the Funding Bank to charge Borrower's Operating
Account in an amount equal to that deficiency. As long as no
Default or Event of Default exists, Credit Agent will return to
Borrower any excess payment from an Investor or other Obligor for
Pledged Assets unless the Majority Lenders instruct the Credit
Agent otherwise. For purposes of this Section 4.3(g), payments
made by check into the Settlement Account shall be deemed received
when the check has cleared in accordance with the Collateral
Agent's usual procedures.
4.3(h) If at any time the aggregate outstanding principal balance of all
Term Loan Advances exceeds the Servicing Collateral Value,
Borrower shall prepay the Term Loan Advances in the amount of such
excess. If at any time the aggregate outstanding principal balance
of all Term Loan Advances and Warehousing Advances made against
Other Eligible Assets exceeds 90% of the most recent Appraisal
Value of the Servicing Portfolio (adjusted to reflect additions to
and deletions from the Eligible Servicing Portfolio since the date
of the relevant Appraisal), Borrower shall prepay the following
types of Advances, in order, in the amount of such excess:
(1) Warehousing Advances outstanding against Other Eligible
Assets, other than Repurchased Maturing Mortgage Loans;
(2) Term Loan Advances; and
(3) Warehousing Advances outstanding against Repurchased
Maturing Mortgage Loans.
4.3(i) Amounts received by the Credit Agent as proceeds of the sale or
other disposition of or payments on Pledged Mortgages, Pledged
Securities and Other Eligible Assets and applied to the principal
amount of Warehousing Advances, including without limitation,
amounts from time to time deposited in the Settlement Account,
shall be allocated among the Lenders as follows:
(1) First, except in the case of proceeds of or payments on
Other Eligible Assets, to RFC until the principal amount of
the Swingline Advances have been paid in full; and
(2) Second, pro rata to the Lenders in accordance with their
respective Percentage Shares.
Amounts applied to the Swingline Advances set forth above shall,
unless the Warehousing Advances outstanding against such Pledged
Mortgages or Pledged Securities were Swingline Advances, shall be
deemed to be (i) a repayment of the Warehousing Advances
outstanding against such Pledged Mortgages or Pledged Securities
and (ii) a refunding of the Swingline Advances repaid as
Warehousing Advances made by the Lenders in accordance with
Section 1.3 hereof.
4.3(j) Credit Agent reserves the right to revalue any Pledged Loan that
is not (i) covered by a Purchase Commitment from Xxxxxx Mae or
Xxxxxxx Mac, or (ii) to be exchanged for an Agency Security if
that Agency Security is covered by a Purchase Commitment. Borrower
must pay to Credit Agent, without the necessity of prior demand or
Notice from Credit Agent, and Borrower authorizes Credit Agent to
cause the Funding Bank to charge Borrower's Operating Account for,
any amount required after any such revaluation to reduce the
principal amount of the Warehousing Advance outstanding against
the revalued Pledged Loan to an amount equal to the Advance Rate
for the applicable Eligible Loan type multiplied by the Fair
Market Value of the Mortgage Loan.
12
4.3(k) The outstanding amount of any Swingline Advance made pursuant to
Section 3.1(d) shall be payable in full within one (1) Business
Day after the date of such Advance.
4.4. WAREHOUSING COMMITMENT FEES
Borrower must pay each Lender, through Credit Agent, a fee ("Warehousing
Commitment Fee") in the amount of 0.125% per annum of the amount of such
Lender's Warehousing Commitment Amount. The Warehousing Commitment Fee is
payable quarterly in advance. Credit Agent computes the Warehousing
Commitment Fee on the basis of the actual number of days in each Calendar
Quarter and a year of 360 days. On the Closing Date, Borrower must pay the
prorated portion of the Warehousing Commitment Fee due from the Closing
Date to the last day of the current Calendar Quarter. After the Closing
Date, Borrower must pay the Warehousing Commitment Fee within 10 days
after the date of Credit Agent's invoice or account analysis statement. If
any Lender increases its Warehousing Commitment Amount, or if an
Additional Lender becomes a party hereto, during any Calendar Quarter,
Borrower shall pay the Warehousing Commitment Fee on the amount of such
increase or the amount of such Additional Lender's Warehousing Commitment
Amount from the effective date thereof to the last day of the current
Calendar Quarter. If the date set forth in clause (a) of the definition of
Warehousing Maturity Date occurs on a day other than the last day of a
Calendar Quarter, Borrower must pay the prorated portion of the
Warehousing Commitment Fee due from the beginning of the then current
Calendar Quarter to and including that date. Borrower is not entitled to a
reduction in the amount of the Warehousing Commitment Fee if (a) the
Warehousing Commitment Amounts are reduced or (b) the Warehousing
Commitments are terminated at the request of Borrower or as a result of an
Event of Default. If the Warehousing Commitments terminate at the request
of Borrower or as a result of an Event of Default, Borrower must pay, on
the date of termination, a Warehousing Commitment Fee on the Warehousing
Commitment Amounts in effect immediately prior to termination, for the
period from the first day of the first month following the date of
termination to and including the date set forth in clause (a) of the
definition of Warehousing Maturity Date. Credit Agent's determination of
the Warehousing Commitment Fee for any period is conclusive and binding,
absent manifest error.
4.5. AGENT'S FEES
Borrower shall pay to Credit Agent and Collateral Agent, for their own
accounts, such fees as shall be separately agreed between Borrower and
Credit Agent and Borrower and Collateral Agent, respectively.
4.6. TERM LOAN NON-USAGE FEES
At the end of each Calendar Quarter during the term of this Agreement,
Credit Agent will determine the average usage of the Term Loan Commitment
by calculating the arithmetic daily average of the Term Loan Advances
outstanding during each month during such Calendar Quarter ("Used
Portion"). Credit Agent will then subtract the Used Portion from the
arithmetic daily average of the Term Loan Credit Limit outstanding during
each such month, and the result, if positive, will be known as the "Unused
Portion." Borrower agrees to pay to Credit Agent, for the account of
Lenders, a fee ("Non-Usage Fee") in the amount of 0.20% per annum of the
Unused Portion during each month during such Calendar Quarter. The
Non-Usage Fee is payable quarterly, in arrears. Credit Agent computes the
Non-Usage Fee on the basis of the actual number of days in each month and
a year of 360 days. Borrower must pay the Non-Usage Fee within 10 days
after the date of Credit Agent's invoice or account analysis statement. If
the date set forth in clause (a) of the definition of Maturity Date occurs
on a day other than the last day of a Calendar Quarter, Borrower must pay
the prorated portion of the Non-Usage Fee due from the beginning of the
then current Calendar Quarter to and including that date. Borrower is not
13
entitled to a reduction in the amount of the Non-Usage Fee if the Term
Loan Commitments are terminated at the request of Borrower or as a result
of an Event of Default. If the Term Loan Commitments terminate at the
request of Borrower or as a result of an Event of Default, Borrower must
pay, on the date of termination, a Non-Usage Fee on (i) through the date
of such termination, the Unused Portion, and (ii) from and after the date
of such termination to and including the date set forth in clause (a) of
the definition of Term Loan Commitment Termination Date. Credit Agent's
determination of the Non-Usage Fee for any period is conclusive and
binding, absent manifest error.
4.7. MISCELLANEOUS CHARGES
Borrower must reimburse Credit Agent and the Collateral Agent for all
Miscellaneous Charges. Miscellaneous Charges are due when incurred, but
will not be considered delinquent if Borrower pays them within 10 days
after the date of Credit Agent's or the Collateral Agent's invoice or
account analysis statement.
4.8. METHOD OF MAKING PAYMENTS
Billing and Payment.
4.8(a) Credit Agent shall, on or before the 5th Business Day of each
month, deliver to Borrower xxxxxxxx for interest due and payable
on Advances, the Commitment Fee, the Non-Usage Fee, Miscellaneous
Charges payable to it and other fees and charges calculated
through the end of the preceding month. On or before the 10th
Business Day of each month, Borrower shall pay to the Credit Agent
the full amount of interest, fees and charges billed as described
above. Collateral Agent shall separately xxxx Borrower for all
fees described in Section 4.5 and Miscellaneous Charges payable to
it.
4.8(b) All payments made on account of the Obligations shall be made by
Borrower to the Credit Agent for distribution to the Lenders,
except for proceeds of the sale or collection of Collateral
securing Warehousing Advances, which will be deposited into the
Settlement Account and remitted to the Credit Agent by the
Collateral Agent, Balance Deficiency Fees, which shall be made
directly to the applicable Lender, and fees and charges payable to
the Credit Agent or the Collateral Agent for its own account. All
payments made on account of the Obligations shall be made without
setoff or counterclaim, free and clear of and without deduction
for any taxes, fees or other charges of any nature whatsoever
imposed by any taxing authority, and must be received by Credit
Agent or (in the case of Collateral Proceeds used to repay
Warehousing Advances, fees and charges payable to Collateral
Agent) by Collateral Agent by 1:30 p.m. on the day of payment, it
being expressly agreed and understood that if a payment is
received after 1:30 p.m. by Credit Agent or Collateral Agent such
payment will be considered to have been made on the next
succeeding Business Day and interest thereon shall be payable by
Borrower at the then applicable rate during such extension. No
principal payments resulting from the sale of Pledged Mortgages or
Pledged Securities shall be deemed to have been received by
Collateral Agent until Collateral Agent has also received the
Notice required under Section 4.3(g). All payments shall be made
in lawful money of the United States of America in immediately
available funds transferred via wire to the Settlement Account or
the Cash Collateral Account. If any payment required to be made by
Borrower hereunder becomes due and payable on a day other than a
Business Day, the due date thereof shall be extended to the next
succeeding Business Day and interest shall be payable on Advances
so extended at the then applicable rate during such extension.
14
4.8(c) All amounts received by Credit Agent on account of the Obligations
(except amounts received in respect of fees or expenses payable
hereunder to the Credit Agent for its own account or amounts
payable to RFC for Swingline Advances) shall be disbursed to the
Lenders by wire transfer on the date of receipt if received by
Credit Agent by the applicable deadlines for payment thereof as
specified in Section 4.8(b) hereof, or if received later, by 12:00
noon on the next succeeding Business Day, without any interest
payable by Credit Agent thereon.
4.8(d) Without limiting any other right that Credit Agent, Collateral
Agent or any Lender may have under applicable law or otherwise,
while a Default or Event of Default exists, Borrower authorizes
Credit Agent to cause the Funding Bank to charge Borrower's
Operating Account, and to cause Collateral Agent to charge any
account of Borrower (other than any trust or escrow account) with
it, for any Obligations due and owing, without the necessity of
prior demand or Notice from Credit Agent.
4.9. ILLEGALITY
In the event that any Lender shall have determined (which determination
shall be conclusive and binding absent manifest error) at any time that
the introduction of, or any change in, any applicable law, rule,
regulation, order or decree or in the interpretation or the administration
thereof by any Person charged with the interpretation or administration
thereof, or compliance by such Lender with any request or directive
(whether or not having the force of law) of any such Person, shall make it
unlawful or impossible for such Lender to charge interest at the Balance
Funded Rate based on Borrower's Eligible Balances as contemplated by this
Agreement, then such Lender shall forthwith give Notice thereof to Credit
Agent and Borrower describing such illegality in reasonable detail. Upon
the giving of such Notice, the obligation of such Lender to charge
interest at the Balance Funded Rate based on Borrower's Eligible Balances
shall be immediately suspended for the duration of such illegality and
with respect to Advances bearing interest at the Balance Funded Rate, each
such Advance of such Lender shall bear interest at the applicable Interest
Rate described in Exhibit H or Exhibit I, as applicable. If and when such
illegality ceases to exist, such Lender shall notify Credit Agent and
Borrower thereof and such suspension shall cease.
4.10. INCREASED COSTS; CAPITAL REQUIREMENTS
In the event any applicable law, order, regulation or directive issued by
any governmental or monetary authority, or any change therein or in the
governmental or judicial interpretation or application thereof, or
compliance by any Lender with any request or directive (whether or not
having the force of law) by any governmental or monetary authority:
4.10(a) Does or shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement or any Advances made hereunder, or
change the basis of taxation on payments to such Lender of
principal, fees, interest or any other amount payable hereunder
(except for change in the rate of tax on the overall gross or net
income of such Lender by the jurisdiction in which such Lender's
principal office is located);
4.10(b) Does or shall impose, modify or hold applicable any reserve,
capital requirement, special deposit, compulsory loan or similar
requirement against assets held by, or deposits or other
liabilities in or for the account of, advances or loans by, or
other credit extended by, or any other acquisition of funds by,
such Lender which are not otherwise included in the determination
of the interest rate as calculated hereunder;
and the result of any of the foregoing is to increase the cost to such
Lender of making, renewing or maintaining any Advance or to reduce any
amount receivable in respect thereof or to reduce
15
the rate of return on the capital of such Lender or any Person controlling
such Lender as it relates to credit facilities in the nature of that
evidenced by this Agreement, then, in any such case, Borrower shall
promptly pay any additional amounts necessary to compensate such Lender
for such additional cost or reduced amounts receivable or reduced rate of
return as determined by such Lender with respect to this Agreement or
Advances made hereunder. If a Lender becomes entitled to claim any
additional amounts pursuant to this Section, it shall notify Borrower
through Credit Agent of the event by reason of which it has become so
entitled and Borrower shall pay such amount within 15 days thereafter. A
certificate as to any additional amount payable pursuant to the foregoing
sentence containing the calculation thereof in reasonable detail submitted
by a Lender, through Credit Agent, to Borrower shall be conclusive in the
absence of manifest error.
4.11. WITHHOLDING TAXES
4.11(a)(1) Any and all payments by Borrower hereunder or under the Notes
shall be made free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect
thereto imposed on it by any jurisdiction (excluding, in the
case of each Lender and Credit Agent, (y)franchise taxes
imposed on or measured by its income by the jurisdiction under
the laws of which such Lender or Credit Agent, as the case may
be, is organized or any political subdivision thereof, and,
(z)if such Lender or Credit Agent is entitled at such time to a
total or partial exemption from withholding that is required to
be evidenced by a United States Internal Revenue Service Form,
taxes imposed on it by reason of any failure of such Lender or
Credit Agent to deliver to the Credit Agent or the Borrower,
from time to time as required by the Credit Agent or Borrower,
such Form, completed in a manner reasonably satisfactory to
Credit Agent or the Borrower) (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If
Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder or under any Note to
any Lender or Credit Agent (i) the sum payable shall be
increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums
payable under this Section 4.11) such Lender or Credit Agent
(as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii)
Borrower shall make such deductions, and (iii) Borrower shall
pay the full amount deducted to the relevant taxing authority
or other authority in accordance with applicable law.
(2) Borrower will indemnify each Lender and the Credit Agent for
the full amount of Taxes(including, without limitation, any
Taxes imposed by any jurisdiction on amounts payable under this
Section 4.11) paid by such Lender or Credit Agent (as the case
may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or
not such Taxes were correctly or legally asserted. This
indemnification shall be made within thirty (30) days from the
date such Lender or Credit Agent (as the case may be) makes
written demand therefor.
(3) Within 30 days after the date of any payment of taxes ,
Borrower will furnish to Credit Agent the original or a
certified copy of a receipt evidencing payment thereof.
(4) Prior to the Closing Date, in the case of each Lender which is
an original signatory hereto, and on the date of the assignment
pursuant to which it becomes a Lender, in the case of each
other Lender, and from time to time
16
thereafter if requested by Borrower or Credit Agent, each
Lender organized under the laws of a jurisdiction outside the
United States that is entitled to an exemption from United
States withholding tax, or that is subject to such tax at a
reduced rate under an applicable tax treaty, shall provide
Credit Agent and Borrower with an Internal Revenue Service Form
W-8BEN or W-8ECI or other applicable form, certificate or
document prescribed by the Internal Revenue Service of the
United States certifying as to such Lender's entitlement to
such exemption or reduced rate with respect to all payments to
be made to such Lender hereunder and under the Notes. Unless
Borrower and Credit Agent have received forms or other
documents satisfactory to them indicating that payments
hereunder or under any Note are not subject to United States
withholding tax or are subject to such tax at a rate reduced by
an applicable tax treaty, Borrower or Credit Agent shall
withhold taxes from such payments at the applicable statutory
rate in the case of payments to or for any Lender organized
under the laws of a jurisdiction outside the United States.
(5) Any Lender claiming any additional amounts payable pursuant to
this Section 4.11 shall use its best efforts (consistent with
its internal policy and legal and regulatory restrictions) to
change the jurisdiction of its applicable lending office to a
jurisdiction in which such Lender already has a lending office
if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts which may
thereafter accrue and would not, in the reasonable judgment of
such Lender, be otherwise disadvantageous to such Lender.
(6) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 4.11 shall survive the
payment in full of principal and interest hereunder and under
the Notes.
4.11(b) If Borrower becomes obligated to pay additional amounts
described in Section 4.11(a) as a result of any condition
described in such Section and payment of such amount is
demanded by any Lender, then unless a Default or an Event of
Default shall have occurred and be continuing or such Lender
has theretofore taken steps that will promptly remove or cure
the conditions creating the cause for such obligation to pay
such additional amounts, or has revoked such election, as the
case may be, Borrower may, on 10 Business Days' prior written
Notice to Credit Agent, who shall promptly send a copy of such
notice to each Lender, cause such Lender to (and such Lender
shall, upon payment in full of all amounts outstanding in
respect of such Lender's Loans, including accrued interest
thereon, and all other amounts due and payable to such Lender
hereunder) assign pursuant to Section 13.7 all of its rights
and obligations under this Agreement to a Lender or other
Person selected by Borrower and reasonably acceptable to Credit
Agent.
END OF ARTICLE 4
17
5. COLLATERAL
5.1. GRANT OF SECURITY INTEREST
As security for the payment of the Notes and for the performance of all of
Borrower's Obligations, Borrower grants a security interest to Credit
Agent, for the benefit of the Lenders, in all of Borrower's right, title
and interest in and to the following described property ("Collateral"):
5.1(a) All amounts advanced by Collateral Agent to or for the account of
Borrower under this Agreement to fund a Mortgage Loan until that
Mortgage Loan is closed and those funds disbursed.
5.1(b) All Mortgage Loans, including all Mortgage Notes and Mortgages
evidencing or securing those Mortgage Loans, that are delivered or
caused to be delivered to Collateral Agent, Credit Agent or any
Lender (including delivery to a third party on behalf of
Collateral Agent or Credit Agent), come into the possession,
custody or control of Collateral Agent, Credit Agent or any Lender
for the purpose of pledge, or in respect of which Advances have
been made under this Agreement, including all Mortgage Loans in
respect of which Wet Settlement Advances have been made
(collectively, "Pledged Loans").
5.1(c) All Mortgage-backed Securities that are created in whole or in
part on the basis of Pledged Loans or are delivered or caused to
be delivered to Collateral Agent, Credit Agent or any Lender, or
are otherwise in the possession of Collateral Agent, Credit Agent
or any Lender, or its agent, bailee or custodian as assignee, or
pledged to Credit Agent, or for such purpose are registered by
book-entry in the name of Collateral Agent or Credit Agent
(including delivery to or registration in the name of a third
party on behalf of Collateral Agent or Credit Agent) under this
Agreement or in respect of which an Advance has been made
(collectively, "Pledged Securities").
5.1(d) All private mortgage insurance and all commitments issued by the
VA or FHA to insure or guarantee any Mortgage Loans included in
the Pledged Loans; all Purchase Commitments held by Borrower
covering Pledged Loans or Pledged Securities or proposed permanent
Pledged Loans, and all proceeds from the sale of Pledged Loans or
Pledged Securities to Investors pursuant to those Purchase
Commitments; and all personal property, contract rights, servicing
and servicing fees and income or other proceeds, amounts and
payments payable to Borrower whether as compensation or
reimbursement, accounts or general intangibles of whatsoever kind
relating to Pledged Loans, Pledged Securities, VA commitments, FHA
commitments and the Purchase Commitments, and all other documents
or instruments relating to Pledged Loans and Pledged Securities,
including any interest of Borrower in any fire, casualty or hazard
insurance policies and any awards made by any public body or
decreed by any court of competent jurisdiction for a taking or for
degradation of value in any eminent domain proceeding as the same
relate to Pledged Loans.
5.1(e) All Servicing Contracts now owned or created or acquired by
Borrower after the date of this Agreement that do not, by their
terms, prohibit the creation of a Lien thereon in favor of Lender
(collectively, "Pledged Servicing Contracts").
5.1(f) All rights of Borrower to receive payments under or by virtue of
the Servicing Contracts owned by Borrower, whether as servicing
fees, servicing income, damages, amounts payable upon the
cancellation or termination of those Servicing Contracts, interest
on the foregoing, or otherwise.
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5.1(g) All agreements under which any Servicing Contract owned by
Borrower was acquired or is sold by Borrower (including the
acquisition or sale of a Person that owns the Servicing Contract),
and all documents executed or delivered in connection with that
acquisition or sale (collectively, "Pledged Servicing
Acquisition/Disposition Agreements").
5.1(h) All accounts and general intangibles owned by Borrower
("Receivables") for the payment of money against (1) FHA or a
private mortgage insurer under an FHA or private insurer's
mortgage insurance policy insuring payment of, or any other Person
under any other agreement (including a Servicing Contract)
relating to, all or part of a defaulted Mortgage Loan (A)
repurchased by Borrower from an investor or out of a pool of
Mortgage Loans serviced by Borrower or (B) being serviced by
Borrower, (2) obligors and their accounts, Xxxxxx Xxx, Xxxxxxx
Mac, Xxxxxx Mae or any other investor under a Servicing Contract
covering, or out of the proceeds of any sale of or foreclosure
sale in respect of, any Mortgage Loan (A) repurchased by Borrower
out of a pool of Mortgage Loans serviced by Borrower or (B) being
serviced by Borrower, in either case, for the reimbursement of
real estate taxes or assessments, or casualty or liability
insurance premiums, paid by Borrower in connection with Mortgage
Loans and (3) obligors and their accounts, or Xxxxxx Xxx, Xxxxxxx
Mac, Xxxxxx Mae or any other investor under or in respect of any
Mortgage Loans serviced by Borrower for repayment of advances made
by Borrower to cover shortages in principal and interest payments.
5.1(i) All escrow accounts, documents, instruments, files, surveys,
certificates, correspondence, appraisals, computer programs,
tapes, discs, cards, accounting records (including all
information, records, tapes, data, programs, discs and cards
necessary or helpful in the administration or servicing of the
Collateral) and other information and data of Borrower relating to
the Collateral.
5.1(j) All cash, whether now existing or acquired after the date of this
Agreement, delivered to or otherwise in the possession of Credit
Agent, Collateral Agent, the Funding Bank or any agent, bailee or
custodian of Credit Agent or Collateral Agent or designated on the
books and records of Borrower as assigned and pledged to Credit
Agent, including all cash deposited in the Cash Collateral Account
and the Settlement Account.
5.1(k) All Hedging Arrangements related to the Collateral ("Pledged
Hedging Arrangements") and Borrower's accounts in which those
Hedging Arrangements are held ("Pledged Hedging Accounts"),
including all rights to payment arising under the Pledged Hedging
Arrangements and the Pledged Hedging Accounts, except that Credit
Agent's security interest in the Pledged Hedging Arrangements and
Pledged Hedging Accounts is limited to benefits, including rights
to payment, related to the Collateral.
5.1(l) All cash and non-cash proceeds of the Collateral, including all
dividends, distributions and other rights in connection with, and
all additions to, modifications of and replacements for, the
Collateral, and all products and proceeds of the Collateral,
together with whatever is receivable or received when the
Collateral or proceeds of Collateral are sold, collected,
exchanged or otherwise disposed of, whether such disposition is
voluntary or involuntary, including all rights to payment with
respect to any cause of action affecting or relating to the
Collateral or proceeds of Collateral.
5.2. RELEASE OF SECURITY INTEREST IN PLEDGED LOANS AND PLEDGED SECURITIES
5.2(a) Except as provided in Section 5.2 (b), Pledged Loans will be
released from Credit Agent's security interest only against
payment to Collateral Agent of the Release Amount in connection
with those Pledged Loans. If Pledged Loans are transferred to a
pool custodian or an investor for inclusion in a Mortgage Pool and
Credit Agent's security interest in the Pledged Loans included in
the Mortgage Pool is not released before the
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issuance of the related Mortgage-backed Security, then that
Mortgage-backed Security, when issued, is a Pledged Security.
Credit Agent's security interest continues in the Pledged Loans
backing that Pledged Security and Collateral Agent is entitled to
possession of the Pledged Security in the manner provided in this
Agreement.
5.2(b) If Pledged Loans are transferred to an Approved Custodian and
included in an Eligible Mortgage Pool, Credit Agent's security
interest in the Pledged Loans included in the Eligible Mortgage
Pool will be released upon the delivery of the Agency Security to
Collateral Agent (including delivery to or registration in the
name of a third party on behalf of Collateral Agent), and that
Agency Security is a Pledged Security. Credit Agent's security
interest in that Pledged Security will be released only against
payment to Collateral Agent of the Release Amount in connection
with the Mortgage Loans backing that Pledged Security.
5.2(c) If no Default or Event of Default occurs, Borrower may redeem a
Pledged Loan or Pledged Security from Credit Agent's security
interest by notifying Collateral Agent of its intention to redeem
the Pledged Loan or Pledged Security from pledge and either (1)
paying, or causing an Investor to pay, to Collateral Agent, for
application to prepayment on the principal balance of the
Warehousing Note, the Release Amount in connection with the
Pledged Loan or the Pledged Loans backing that Pledged Security,
or (2) delivering substitute Collateral that, in addition to being
acceptable to Credit Agent in its sole discretion will, when
included with the remaining Collateral, result in a Fair Market
Value of all Eligible Loans held by Collateral Agent that is at
least equal to the aggregate outstanding Warehousing Advances
(other than Warehousing Advances against Other Eligible Assets).
5.2(d) After a Default or Event of Default occurs, Credit Agent may, with
no liability to Borrower or any Person, continue to release its
security interest in any Pledged Loan or Pledged Security against
payment of the Release Amount in connection with that Pledged Loan
or the Pledged Loans backing that Pledged Security.
5.2(e) The amount ("Release Amount") to be paid by Borrower to obtain the
release of Credit Agent's security interest in a Pledged Loan will
be (a) the payment required in any bailee letter pursuant to which
the Collateral Agent ships a Pledged Loan to an Investor or
Approved Custodian, and (b) otherwise, until an Event of Default
occurs, the principal amount of the Warehousing Advances
outstanding against the Pledged Loan, and while an Event of
Default exists, the amount paid to Credit Agent or the Collateral
Agent in a commercially reasonable disposition of that Pledged
Loan.
5.3. RELEASE OF SECURITY INTEREST IN OTHER ELIGIBLE ASSETS
Assets other than Pledged Loans, Pledged Securities and related Collateral
will be released from Lender's security interest in connection with any
sale thereof permitted pursuant to this Agreement, provided that any
prepayment of Advances required in connection with or a result of such
sale under Section 4.3, including Section 4.3(f), 4.3(g) and 4.3(h), is
made prior to, or at the time of, such sale.
5.4. COLLECTION AND SERVICING RIGHTS
If no Event of Default exists, Borrower may service and receive and
collect directly all sums payable to Borrower in respect of the Collateral
other than proceeds of any Purchase Commitment, amounts paid on any
Receivables (other than Servicing Contracts) or proceeds of the sale of
any Collateral.
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After an Event of Default, Credit Agent or its designee are entitled to
service and receive and collect all sums payable to Borrower in respect of
the Collateral, and in such case (1) Credit Agent or its designee in its
discretion may, in its own name, in the name of Borrower or otherwise,
demand, xxx for, collect or receive any money or property at any time
payable or receivable on account of or in exchange for any of the
Collateral, but Credit Agent has no obligation to do so, (2) Borrower
must, if Credit Agent requests it to do so, hold in trust for the benefit
of Credit Agent and immediately pay to Credit Agent at its office
designated by Notice, all amounts received by Borrower upon or in respect
of any of the Collateral, advising Credit Agent as to the source of such
funds and (3) all amounts so received and collected by Credit Agent will
be held by it as part of the Collateral.
5.5. RETURN OF COLLATERAL AT END OF COMMITMENTS
If (a) the Commitments have expired or been terminated, and (b) no
Advances, interest or other Obligations are outstanding and unpaid, Credit
Agent will release its security interest and Collateral Agent will deliver
all Collateral in its possession to Borrower at Borrower's expense.
Borrower's acknowledgement or receipt for any Collateral released or
delivered to Borrower under any provision of this Agreement is a complete
and full acquittance for the Collateral so returned, and Collateral Agent
is discharged from any liability or responsibility for that Collateral.
5.6. DELIVERY OF COLLATERAL DOCUMENTS
5.6(a) Collateral Agent may deliver documents relating to the Collateral
to Borrower for correction or completion under a Trust Receipt.
5.6(b) If no Default or Event of Default exists, upon delivery by
Borrower to Collateral Agent of shipping instructions pursuant to
the Collateral Agency Agreement, Collateral Agent will transmit
Pledged Loans or Pledged Securities, together with all related
loan documents and pool documents in Collateral Agent's
possession, to the applicable Investor, Approved Custodian or
other party acceptable to Collateral Agent in its sole discretion.
5.6(c) If a Default or Event of Default exists, Collateral Agent may,
without liability to Borrower or any other Person, continue to
transmit Pledged Loans or Pledged Securities, together with all
related loan documents and pool documents in Collateral Agent's
possession, to the applicable Investor, Approved Custodian or
other party acceptable to Credit Agent in its sole discretion.
5.6(d) Upon receipt of Notice from Borrower under Section 4.3 (g), and
payment of the Release Amount with respect to a Pledged Loan
identified by Borrower, Collateral Agent will, at Borrower's
request, release to Borrower any Collateral Documents relating to
the redeemed Pledged Loan or the Pledged Loans backing a Pledged
Security that Collateral Agent has in its possession and that have
not been delivered to an Investor or Approved Custodian; provided,
that Collateral Agent shall, if requested by an Investor or
Approved Custodian or consistent with past practices, provide the
Collateral Documents for any Pledged Loan purchased to such
Investor, and the Collateral Documents for any Pledged Loan
backing Mortgage-backed Securities to the Approved Custodian.
5.7. BORROWER REMAINS LIABLE
Anything herein to the contrary notwithstanding, Borrower shall remain
liable under each item of the Collateral to observe and perform all the
conditions and obligations to be observed and performed by it thereunder,
all in accordance with the terms thereof and any other agreement giving
rise thereto, and in accordance with and pursuant to the terms and
provisions thereof.
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Whether or not the Credit Agent or Collateral Agent has exercised any
rights in any of the Collateral, neither the Credit Agent, the Collateral
Agent nor any Lender shall have any obligation or liability under any of
the Collateral (or any agreement giving rise thereto) by reason of or
arising out of this Agreement or the receipt by the Credit Agent or
Collateral Agent of any payment relating thereto, nor shall the Credit
Agent, the Collateral Agent, nor any Lender be obligated in any manner to
perform any of the obligations of Borrower under or pursuant to any of the
Collateral (or any agreement giving rise thereto) to make any payment, to
make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party
under any of the Collateral (or any agreement giving rise thereto), to
present or file any claim, to take any action to enforce any performance
or to collect the payment of any amounts which may have been assigned to
it or to which it may be entitled at any time or times.
5.8. FURTHER ASSURANCE
Borrower agrees to execute such financing statements and to take whatever
other actions are requested by Credit Agent (including, without
limitation, amending this Agreement to take account of the adoption of
Revised Article 9 of the Uniform Commercial Code) to perfect and continue
Credit Agent's security interest in the Collateral, and authorizes Credit
Agent to file financing statements (including financing statements
containing a broader description of the Collateral than the description
set forth herein). Borrower will execute and cooperate with Credit Agent
in obtaining from third parties Control Agreements in form satisfactory to
Lender with respect to collateral consisting of investment property,
deposit accounts, letter-of-credit rights, and electronic chattel paper.
END OF ARTICLE 5
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6. CONDITIONS PRECEDENT
6.1. INITIAL ADVANCE
The obligation of Credit Agent to make the initial Advance under this
Agreement is subject to the satisfaction, in the sole discretion of Credit
Agent, of the following conditions precedent:
6.1(a) Credit Agent must receive the following, all of which must be
satisfactory in form and content to Credit Agent, in its sole
discretion:
(1) The Notes, this Agreement and the Collateral Agency
Agreement, duly executed by Borrower.
(2) Borrower's articles of incorporation, together with all
amendments, as certified by the Secretary of State of
Maryland, and Borrower's bylaws, together with all
amendments, certified by the corporate secretary or
assistant secretary of Borrower and certificates of good
standing dated within 30 days of the date of this Agreement.
(3) A resolution of the board of directors of Borrower
authorizing the execution, delivery and performance of this
Agreement and the other Loan Documents, each Advance Request
and all other agreements, instruments or documents to be
delivered by Borrower under this Agreement.
(4) A certificate as to the incumbency and authenticity of the
signatures of the officers of Borrower executing this
Agreement and the other Loan Documents, and of the officers
and employees of Borrower delivering each Advance Request
and all other agreements, instruments or documents to be
delivered under this Agreement (Credit Agent and Collateral
Agent being entitled to rely on that certificate until a new
incumbency certificate has been furnished to Credit Agent
and Collateral Agent).
(5) Assumed Name Certificates dated within 30 days of the date
of this Agreement for any assumed name used by Borrower in
the conduct of its business.
(6) Fiscal year-end financial statements of Borrower (and, if
applicable, Borrower's Subsidiaries, on a consolidated
basis) containing a balance sheet as of December 31, 2000,
and related statements of income, cash flows and changes in
stockholders' equity for the period ended on such date, all
prepared in accordance with GAAP applied on a basis
consistent with prior periods and audited by independent
certified public accountants of recognized standing
acceptable to Credit Agent.
(7) Interim financial statements of Borrower (and, if
applicable, Borrower's Subsidiaries, on a consolidated
basis) containing a balance sheet as of February 28, 2001,
related statements of income, cash flows and changes in
stockholders' equity for the period ended on such date
prepared in accordance with GAAP applied on a basis
consistent with Borrower's most recent audited financial
statements.
(8) A favorable written opinion of counsel to Borrower,
addressed to Lenders and dated as of the date of this
Agreement, covering such matters as Credit Agent may
reasonably request.
23
(9) Uniform Commercial Code, tax lien and judgment searches of
the appropriate public records for Borrower that do not
disclose the existence of any prior Lien on the Collateral
other than in favor of Credit Agent or as permitted under
this Agreement.
(10) Copies of the certificates, documents or other written
instruments that evidence Borrower's eligibility described
in Section 2.3, all in form and substance satisfactory to
Credit Agent.
(11) Copies of Borrower's errors and omissions insurance policy
or mortgage impairment insurance policy, and blanket bond
coverage policy, or certificates in lieu of policies,
showing compliance by Borrower as of the date of this
Agreement with the related provisions of Section 8.9.
(12) Executed financing statements in recordable form covering
the Collateral and ready for filing in all jurisdictions
required by Credit Agent.
(13) Receipt by Credit Agent of any fees due on the date of this
Agreement.
(14) A copy of acknowledgment agreements from each of Xxxxxx Xxx
and Xxxxxxx Mac in form and substance satisfactory to Credit
Agent acknowledging the validity of Credit Agent's security
interest in the portions of the Collateral that constitute
Xxxxxx Xxx and Xxxxxxx Mac Servicing Contracts.
(15) An executed Funding Bank Agreement.
6.1(b) If Borrower is indebted to any of its directors, officers,
shareholders or Affiliates, as of the date of this Agreement,
which indebtedness has a term of more than 1 year or is in excess
of $100,000, the Person to whom Borrower is indebted must have
executed a Subordination of Debt Agreement, on the form prescribed
by Credit Agent; and Credit Agent must have received an executed
copy of that Subordination of Debt Agreement, certified by the
corporate secretary of Borrower to be true and complete and in
full force and effect as of the date of the Advance.
6.1(c) Evidence satisfactory to Credit Agent that, upon disbursement of
the Advances to be made on the Closing Date to repay loans
outstanding under the Existing Agreements, such loans shall be
repaid in full, the commitments thereunder shall be terminated and
the security interests granted in connection therewith shall be
released.
6.2. EACH ADVANCE
The obligation of Lenders to make the initial and each subsequent Advance
is subject to the satisfaction, in the sole discretion of Lenders, as of
the date of each Advance, of the following additional conditions
precedent:
6.2(a) Borrower must have delivered to Credit Agent or the Collateral
Agent, as applicable, the Advance Request and Collateral Documents
called for under, and must have satisfied the procedures set forth
in, Article 3 and the Collateral Agency Agreement. All items
delivered to Credit Agent or the Collateral Agent must be
satisfactory to Credit Agent or the Collateral Agent in form and
content, and Credit Agent or the Collateral Agent may reject any
item that does not satisfy the requirements of this Agreement, the
Collateral Agency Agreement or the related Purchase Commitment.
24
6.2(b) Credit Agent must have received evidence satisfactory to them as
to the making and/or continuation of any book entry or the due
filing and recording in all appropriate offices of all financing
statements and other instruments as may be necessary to perfect
the security interest of Credit Agent in the Collateral under the
Uniform Commercial Code or other applicable law.
6.2(c) The representations and warranties of Borrower contained in
Section 2.3, Article 7, Article 10 and (in the case of Warehousing
Advances) the Collateral Agency Agreement must be accurate and
complete in all material respects as if made on and as of the date
of each Advance.
6.2(d) Borrower must have performed all agreements to be performed by it
under this Agreement (in the case of Warehousing Advances) the
Collateral Agency Agreement, and after giving effect to the
requested Advance, there will exist no Default or Event of Default
under this Agreement.
Delivery of an Advance Request by Borrower will be deemed a representation
by Borrower that all conditions set forth in this Section have been
satisfied as of the date of the Advance.
END OF ARTICLE 6
25
7. GENERAL REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Credit Agent, as of the date of this
Agreement and as of the date of each Advance Request and the making of
each Advance, that:
7.1. PLACE OF BUSINESS
Borrower's chief executive office and principal place of business is 0000
Xxxxxxxx Xxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000-0000.
7.2. ORGANIZATION; GOOD STANDING; SUBSIDIARIES
Borrower is a corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland, and has the full legal
power and authority to own its property and to carry on its business as
currently conducted. Each Subsidiary of Borrower is duly organized,
validly existing and in good standing under the laws of its jurisdiction
of formation, and has the full legal power and authority to own its
property and conduct its business as currently conducted. Borrower and
each Subsidiary of Borrower is duly qualified as a foreign corporation to
do business and is in good standing in each jurisdiction in which the
transaction of its business makes qualification necessary, except in
jurisdictions, if any, where a failure to be in good standing has no
material adverse effect on Borrower's or the Subsidiary's business,
operations, assets or financial condition as a whole. For the purposes of
this Agreement, good standing includes qualification for any and all
licenses and payment of any and all taxes required in the jurisdiction of
its incorporation and in each jurisdiction in which Borrower transacts
business. Borrower has no Subsidiaries except as set forth on Exhibit D,
which sets forth with respect to each Subsidiary, its name, address, place
of incorporation, each state in which it is qualified as a foreign
corporation, and the percentage ownership of its capital stock by
Borrower.
7.3. AUTHORIZATION AND ENFORCEABILITY
Borrower has the power and authority to execute, deliver and perform this
Agreement, the Notes and other Loan Documents to which Borrower is party
and to make the borrowings under this Agreement. The execution, delivery
and performance by Borrower of this Agreement, the Notes and the other
Loan Documents to which Borrower is party and the making of the borrowings
under this Agreement and the Notes, have been duly and validly authorized
by all necessary corporate action on the part of Borrower (none of which
actions has been modified or rescinded, and all of which actions are in
full force and effect) and do not and will not conflict with or violate
any provision of law, of any judgments binding upon Borrower, or of the
articles of incorporation or by-laws of Borrower, conflict with or result
in a breach of or constitute a default or require any consent under, or
result in the creation of any Lien upon any property or assets of Borrower
other than the Lien on the Collateral granted under this Agreement, or
result in or require the acceleration of any indebtedness of Borrower
under any agreement, instrument or indenture to which Borrower is a party
or by which Borrower or its property may be bound or affected. This
Agreement, the Notes and the other Loan Documents constitute the legal,
valid, and binding obligations of Borrower, enforceable in accordance with
their respective terms, except as limited by bankruptcy, insolvency or
other such laws affecting the enforcement of creditors' rights.
26
7.4. APPROVALS
The execution and delivery of this Agreement, the Notes and the other Loan
Documents, the performance of Borrower's obligations under this Agreement,
the Notes and the other Loan Documents and the validity and enforceability
of this Agreement, the Notes and the other Loan Documents do not require
any license, consent, approval or other action of any state or federal
agency or governmental or regulatory authority other than those which have
been obtained and remain in full force and effect.
7.5. FINANCIAL CONDITION
The balance sheet of Borrower (and, if applicable, Borrower's
Subsidiaries, on a consolidated basis) as of each Statement Date, and the
related statements of income, cash flows and changes in stockholders'
equity for the fiscal period ended on each Statement Date, previously
furnished to Credit Agent, fairly present the financial condition of
Borrower (and, if applicable, Borrower's Subsidiaries) as at that
Statement Date and the results of its operations for the fiscal period
ended on that Statement Date. Borrower had, on each Statement Date, no
known material liabilities, direct or indirect, fixed or contingent,
matured or unmatured, or liabilities for taxes, long-term leases or
unusual forward or long-term commitments not disclosed by, or reserved
against in, said balance sheet and related statements, and at the present
time there are no material unrealized or anticipated losses from any
loans, advances or other commitments of Borrower except as previously
disclosed to Credit Agent in writing. Those financial statements were
prepared in accordance with GAAP applied on a consistent basis throughout
the periods involved. Since the Audited Statement Date, there has been no
material adverse change in the business, operations, assets or financial
condition of Borrower (and, if applicable, Borrower's Subsidiaries), nor
is Borrower aware of any state of facts that (with or without notice or
lapse of time or both) would or could result in any such material adverse
change.
7.6. LITIGATION
There are no actions, claims, suits or proceedings pending or, to
Borrower's knowledge, threatened or reasonably anticipated against or
affecting Borrower or any Subsidiary of Borrower in any court or before
any arbitrator or before any government commission, board, bureau or other
administrative agency that, if adversely determined, may reasonably be
expected to result in a material adverse change in Borrower's business,
operations, assets or financial condition as a whole, or that would affect
the validity or enforceability of this Agreement, the Notes or any other
Loan Document.
7.7. COMPLIANCE WITH LAWS
Neither Borrower nor any Subsidiary of Borrower is in violation of any
provision of any law, or of any judgment, award, rule, regulation, order,
decree, writ or injunction of any court or public regulatory body or
authority that could result in a material adverse change in Borrower's
business, operations, assets or financial condition as a whole or that
would affect the validity or enforceability of this Agreement, the Notes
or any other Loan Document.
27
7.8. REGULATION U
Borrower is not engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock, and no part of the proceeds of any
Advances made under this Agreement will be used to purchase or carry any
Margin Stock or to extend credit to others for the purpose of purchasing
or carrying any Margin Stock.
7.9. INVESTMENT COMPANY ACT
Borrower is not an "investment company" or controlled by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
7.10. PAYMENT OF TAXES
Borrower and each of its Subsidiaries has filed or caused to be filed all
federal, state and local income, excise, property and other tax returns
that are required to be filed with respect to the operations of Borrower
and its Subsidiaries, all such returns are true and correct and Borrower
and each of its Subsidiaries has paid or caused to be paid all taxes shown
on those returns or on any assessment, to the extent that those taxes have
become due, including all FICA payments and withholding taxes, if
appropriate. The amounts reserved as a liability for income and other
taxes payable in the financial statements described in Section 7.5 are
sufficient for payment of all unpaid federal, state and local income,
excise, property and other taxes, whether or not disputed, of Borrower and
its Subsidiaries accrued for or applicable to the period and on the dates
of such financial statements and all years and periods prior to those
financial statements and for which Borrower and its Subsidiaries may be
liable in its own right or as transferee of the assets of, or as successor
to, any other Person. No tax Liens have been filed and no material claims
are being asserted against Borrower, any Subsidiary of Borrower or any
property of Borrower or any Subsidiary of Borrower with respect to any
taxes, fees or charges.
7.11. AGREEMENTS
Neither Borrower nor any Subsidiary of Borrower is a party to any
agreement, instrument or indenture or subject to any restriction
materially and adversely affecting its business, operations, assets or
financial condition, except as disclosed in the financial statements
described in Section 7.5. Neither Borrower nor any Subsidiary of Borrower
is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement,
instrument, or indenture which default could result in a material adverse
change in Borrower's business, operations, properties or financial
condition as a whole. No holder of any indebtedness of Borrower or of any
of its Subsidiaries has given notice of any asserted default under that
indebtedness, and no liquidation or dissolution of Borrower or of any of
its Subsidiaries and no receivership, insolvency, bankruptcy,
reorganization or other similar proceedings relative to Borrower or of any
of its Subsidiaries or any of its properties is pending, or to the
knowledge of Borrower, threatened.
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7.12. TITLE TO PROPERTIES
Borrower and each Subsidiary of Borrower has good, valid, insurable and
(in the case of real property) marketable title to all of its properties
and assets (whether real or personal, tangible or intangible) reflected on
the financial statements described in Section 7.5, except for those
properties and assets that Borrower has disposed of since the date of
those financial statements either in the ordinary course of business or
because they were no longer used or useful in the conduct of Borrower's or
the Subsidiary's business. All of Borrower's properties and assets are
free and clear of all Liens except as disclosed in Borrower's financial
statements.
7.13. ERISA
Each Plan is in compliance with all applicable requirements of ERISA and
the Internal Revenue Code and with all material applicable rulings and
regulations issued under the provisions of ERISA and the Internal Revenue
Code setting forth those requirements, except where any failure to comply
would not result in a material loss to Borrower or any ERISA Affiliate.
All of the minimum funding standards or other contribution obligations
applicable to each Plan have been satisfied. No Plan is a defined-benefit
pension plan subject to Title IV of ERISA, and there is no Multiemployer
Plan.
7.14. NO RETIREE BENEFITS
Except as required under Section 4980B of the Internal Revenue Code,
Section 601 of ERISA or applicable state law, neither Borrower nor, if
applicable, any Subsidiary is obligated to provide post-retirement medical
or insurance benefits with respect to employees or former employees.
7.15. ASSUMED NAMES
Borrower does not originate Mortgage Loans or otherwise conduct business
under any names other than its legal name and the assumed names set forth
on Exhibit G. Borrower has made all filings and taken all other action as
may be required under the laws of any jurisdiction in which it originates
Mortgage Loans or otherwise conducts business under any assumed name.
Borrower's use of the assumed names set forth on Exhibit G does not
conflict with any other Person's legal rights to any such name, nor
otherwise give rise to any liability by Borrower to any other Person.
END OF ARTICLE 7
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8. AFFIRMATIVE COVENANTS
As long as the Commitments are outstanding or there remain any Obligations
to be paid or performed under this Agreement or under any other Loan
Document, Borrower must:
8.1. PAYMENT OF OBLIGATIONS
Punctually pay or cause to be paid all Obligations, including the
Obligations payable under this Agreement and under the Notes, in
accordance with their terms.
8.2. FINANCIAL STATEMENTS
Deliver to Credit Agent:
8.2(a) As soon as available and in any event within 30 days after the end
of each month, interim statements of income, cash flows and
changes in stockholders' equity of Borrower (and, if applicable,
Borrower's Subsidiaries, on a consolidated basis) for the
immediately preceding month and for the period from the beginning
of the fiscal year to the end of that month, and the related
balance sheet as at the end of the immediately preceding month,
all in reasonable detail, subject, however, to year-end audit
adjustments.
8.2(b) As soon as available and in any event within 90 days after the end
of each fiscal year of Borrower, fiscal year-end statements of
income, cash flows and changes in stockholders' equity of Borrower
(and, if applicable, Borrower's Subsidiaries, on a consolidated
basis) for that year, and the related balance sheet as of the end
of that year (setting forth in comparative form the corresponding
figures for the preceding fiscal year), all in reasonable detail
and accompanied by (1) an opinion as to those financial statements
in form and substance satisfactory to Credit Agent and prepared by
independent certified public accountants of recognized standing
acceptable to Credit Agent, (2) any management letters, management
reports or other supplementary comments or reports delivered by
those accountants to Borrower or its board of directors and (3) a
letter from those accountants confirming that they have performed
their audit in full and complete compliance with Statement on
Auditing Standards No. 82, "Consideration of Fraud in a Financial
Statement Audit," and any amendments to that Statement or any
successor standards or interpretations.
8.2(c) Together with each delivery of financial statements required by
this Section, a Compliance Certificate substantially in the form
of Exhibit E.
8.2(d) Copies of all regular or periodic financial and other reports that
Borrower files with the Securities and Exchange Commission or any
successor governmental agency or other entity.
8.3. OTHER BORROWER REPORTS
Deliver to Credit Agent:
8.3(a) As soon as available and in any event within 45 days after the end
of each Calendar Quarter, a consolidated report ("Servicing
Portfolio Report") as of the end of the month, as to all Mortgage
Loans the servicing rights to which are owned by Borrower
(specified by investor type, recourse and non-recourse) regardless
of whether the Mortgage Loans are Pledged Loans. The Servicing
Portfolio Report must indicate which Mortgage Loans
30
(1) are current and in good standing, (2) are more than 30, 60 or
90 days past due, (3) are the subject of pending bankruptcy or
foreclosure proceedings, or (4) have been converted (through
foreclosure or other proceedings in lieu of foreclosure) into real
estate owned by Borrower.
8.3(b) As soon as available and in any event not later than the last day
of each month, a consolidated report (the "Delinquency Report") as
of the end of the immediately preceding month detailing, as to all
Mortgage Loans the servicing rights to which are owned by Borrower
(specified by investor, type, recourse and non-recourse)
regardless of whether such Mortgage Loans are Pledged Mortgages,
which report shall indicate Loans which (1) are current and in
good standing, (2) are more than 30, 60 or 90 days past due,
respectively, (3) are more than 360 days past due, (4) are the
subject of pending bankruptcy or foreclosure proceedings, or (5)
have been converted (through foreclosure or other proceedings in
lieu thereof) by Borrower into real estate owned by Borrower. Such
report will include an estimate of the net liquidation proceeds on
any Pledged Loans covered by clause (3), (4) or (5) above or which
are 90 days or more past due. The Delinquency Report must
segregate the information relating to the Pledged Mortgage Loans
from other information.
8.3(c) As soon as available and in any event within 45 days after the end
of each Calendar Quarter, and at any other time at the request of
Credit Agent, an Appraisal of the Eligible Servicing Portfolio.
8.3(d) As soon as available and in any event within 30 days after the end
of each month, a consolidated loan production report as of the end
of that month, presenting the total dollar volume and the number
of Mortgage Loans originated and closed or purchased during that
month and for the fiscal year-to-date, specified by property type
and loan type.
8.3(e) Other reports in respect of Pledged Loans and Pledged Securities,
in such detail and at such times as Credit Agent in its discretion
may reasonably request.
8.3(f) With reasonable promptness, such further information regarding the
business, operations, properties or financial condition of
Borrower as Credit Agent, or any Lender, through the Credit Agent,
may reasonably request, including copies of any audits completed
by HUD, Xxxxxx Mae, Xxxxxx Xxx or Xxxxxxx Mac.
8.4. MAINTENANCE OF EXISTENCE; CONDUCT OF BUSINESS
Preserve and maintain its corporate existence in good standing and all of
its rights, privileges, licenses and franchises necessary or desirable in
the normal conduct of its business, including its eligibility as lender,
seller/servicer and issuer described under Section 2.3; conduct its
business in an orderly and efficient manner; maintain a net worth of
acceptable assets as required for maintaining Borrower's eligibility as
lender, seller/servicer and issuer described under Section 2.3; and make
no material change in the nature or character of its business or engage in
any business in which it was not engaged on the date of this Agreement.
8.5. COMPLIANCE WITH APPLICABLE LAWS
Comply with the requirements of all applicable laws, rules, regulations
and orders of any governmental authority, a breach of which could result
in a material adverse change in Borrower's business, operations, assets,
or financial condition as a whole or on the enforceability of this
Agreement, any other Loan Document or any Collateral, except where
contested in good faith and by appropriate proceedings.
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8.6. INSPECTION OF PROPERTIES AND BOOKS; OPERATIONAL REVIEWS
8.6(a) Permit Credit Agent, any Lender or any Participant (and their
authorized representatives) to discuss the business, operations,
assets and financial condition of Borrower and its Subsidiaries
with Borrower's officers, agents and employees, and to examine and
make copies or extracts of Borrower's and its Subsidiaries' books
of account, all at such reasonable times as Credit Agent, any
Lender or any Participant may request.
8.6(b) Provide its accountants with a copy of this Agreement promptly
after the execution of this Agreement and must authorize and
instruct them to answer candidly all questions that the officers
of Credit Agent, any Lender or any Participant or any authorized
representatives of Credit Agent, any Lender or any Participant may
address to them in reference to the financial condition or affairs
of Borrower and its Subsidiaries. Borrower may have its
representatives in attendance at any meetings held between the
officers or other representatives of Credit Agent, any Lender or
any Participant and Borrower's accountants under this
authorization.
8.6(c) Permit Credit Agent, any Lender or any Participant (and their
authorized representatives) access to Borrower's premises and
records for the purpose of conducting a review of Borrower's
general mortgage business methods, policies and procedures,
auditing its loan files, and reviewing the financial and
operational aspects of Borrower's business.
8.7. NOTICE
Give prompt Notice to Credit Agent of (a) any action, suit or proceeding
instituted by or against Borrower or any of its Subsidiaries in any
federal or state court or before any commission or other regulatory body
(federal, state or local, domestic or foreign), which action, suit or
proceeding has at issue in excess of $500,000, or any such proceedings
threatened against Borrower or any of its Subsidiaries in a writing
containing the details of that action, suit or proceeding; (b) the filing,
recording or assessment of any federal, state or local tax Lien against
Borrower, any of its Subsidiaries or any of their respective assets; (c)
an Event of Default; (d) a Default that continues for more than 4 days;
(e) the suspension, revocation or termination of Borrower's eligibility,
in any respect, as approved lender, seller/servicer or issuer as described
under Section 2.3; (f) the transfer, loss, nonrenewal or termination of
any Servicing Contracts to which Borrower is a party, or which is held for
the benefit of Borrower, and the reason for that transfer, loss,
nonrenewal or termination, if the aggregate principal amount of Mortgage
Loans serviced pursuant to affected Servicing Contracts exceeds 2.5% of
the Eligible Servicing Portfolio as of the date of the most recent
Appraisal; (g) any Prohibited Transaction with respect to any Plan,
specifying the nature of the Prohibited Transaction and what action
Borrower proposes to take with respect to it; and (h) any other action,
event or condition of any nature that could lead to or result in a
material adverse change in the business, operations, assets or financial
condition of Borrower or any of its Subsidiaries.
8.8. PAYMENT OF DEBT, TAXES AND OTHER OBLIGATIONS
Pay, perform and discharge, or cause to be paid, performed and discharged,
all of the obligations and indebtedness of Borrower and its Subsidiaries,
all taxes, assessments and governmental charges or levies imposed upon
Borrower or its Subsidiaries or upon their respective income, receipts or
properties before those taxes, assessments and governmental charges or
levies become past due, and all lawful claims for labor, materials and
supplies or otherwise that, if unpaid, could become a Lien or charge upon
any of their respective properties or assets. Borrower and its
Subsidiaries are not required, however, to pay any taxes, assessments and
governmental charges or levies or claims for labor, materials or supplies
for which Borrower or its Subsidiaries have obtained an adequate bond or
insurance or that are being contested in good
32
faith and by proper proceedings that are being reasonably and diligently
pursued and for which proper reserves have been created.
8.9. INSURANCE
Maintain errors and omissions insurance or mortgage impairment insurance,
and blanket bond coverage, with such companies and in such amounts as
satisfy prevailing requirements applicable to a lender, seller/servicer
and issuer described under Section 2.3, and liability insurance and fire
and other hazard insurance on its properties, in each case with
responsible insurance companies acceptable to Credit Agent, in such
amounts and against such risks as is customarily carried by similar
businesses operating in the same location. Within 30 days after Notice
from Credit Agent, obtain such additional insurance as Credit Agent may
reasonably require, all at the sole expense of Borrower. Copies of such
policies must be furnished to Credit Agent without charge upon request of
Credit Agent.
8.10. CLOSING INSTRUCTIONS
Indemnify and hold the Credit Agent, the Collateral Agent and the Lenders
harmless from and against any loss, including reasonable attorneys' fees
and costs, attributable to the failure of any title insurance company,
agent or approved attorney to comply with Borrower's disbursement or
instruction letter relating to any Mortgage Loan. Collateral Agent has the
right to pre-approve Borrower's disbursement or instruction letter to the
title insurance company, agent or approved attorney in any case in which
Borrower intends to obtain Warehousing Advances against the Mortgage Loan
to be created at settlement or to pledge that Mortgage Loan as Collateral
under this Agreement. In any event, Borrower's disbursement or instruction
letter must include the following language:
"Residential Funding Corporation has a security interest in any
amounts advanced by it to fund this mortgage loan and in the
mortgage loan funded with those amounts. You must promptly return
any amounts advanced by U.S. Bank National Association, as
Collateral Agent for Residential Funding Corporation, and not used
to fund this mortgage loan. You also must immediately return all
amounts advanced by U.S. Bank National Association if this
mortgage loan does not close and fund within 24 hours of your
receipt of those funds."
8.11. SUBORDINATION OF CERTAIN INDEBTEDNESS
Cause any indebtedness of Borrower to any shareholder, director, officer
or Affiliate of Borrower, which indebtedness has a term of more than 1
year or is in excess of $100,000, to be subordinated to the Obligations by
the execution and delivery to Credit Agent of a Subordination of Debt
Agreement, on the form prescribed by Credit Agent, certified by the
corporate secretary of Borrower to be true and complete and in full force
and effect.
8.12. OTHER LOAN OBLIGATIONS
Perform all material obligations under the terms of each loan agreement,
note, mortgage, security agreement or debt instrument by which Borrower is
bound or to which any of its property is subject, and promptly notify
Credit Agent in writing of a declared default under or the termination,
cancellation, reduction or nonrenewal of any of its other lines of credit
or agreements with any other lender. Exhibit F is a true and complete list
of all such lines of credit or agreements as of the date of this
Agreement. Borrower must give Credit Agent at least 30 days Notice before
entering into any additional lines of credit or agreements.
33
8.13. ERISA
Maintain (and, if applicable, will cause each ERISA Affiliate to maintain)
each Plan in compliance with all material applicable requirements of ERISA
and of the Internal Revenue Code and with all applicable rulings and
regulations issued under the provisions of ERISA and of the Internal
Revenue Code, and not permit any ERISA Affiliate to, (a) engage in any
transaction in connection with which Borrower or any ERISA Affiliate would
be subject to either a civil penalty assessed pursuant to Section 502(i)
of ERISA or a tax imposed by Section 4975 of the Internal Revenue Code, in
either case in an amount exceeding $25,000 or (b) fail to make full
payment when due of all amounts that, under the provisions of any Plan,
Borrower or any ERISA Affiliate is required to pay as contributions to
that Plan, or permit to exist any accumulated funding deficiency (as such
term is defined in Section 302 of ERISA and Section 412 of the Internal
Revenue Code), whether or not waived, with respect to any Plan in an
aggregate amount exceeding $25,000.
8.14. USE OF PROCEEDS OF WAREHOUSING ADVANCES
Use the proceeds of each Warehousing Advance solely for the purpose of (a)
in the case of Warehousing Advances made on the Closing Date, in the
amount of warehousing loans and working capital loans under the Existing
Agreement, to repay such loans and (b) otherwise, (i) in the case of
Warehousing Advances against Eligible Loans, funding Eligible Loans and
against the pledge of those Eligible Loans as Collateral, (ii) in the case
of Warehousing Advances against REO Properties, repaying the outstanding
Warehousing Advance against an Impaired Mortgage Loan, and (iii) in all
other cases, financing general working capital needs of Borrower.
8.15. USE OF PROCEEDS OF TERM LOAN ADVANCES
Use the proceeds of each Term Loan Advance solely for the purpose of (a)
in the case of Term Loan Advances made on the Closing Date in the amount
of revolving/term loans outstanding under the Existing Agreements, to
repay such loans, and (b) otherwise, funding Servicing Acquisitions and
financing general working capital needs of Borrower.
END OF ARTICLE 8
34
9. NEGATIVE COVENANTS
As long as the Commitments are outstanding or there remain any Obligations
to be paid or performed, Borrower must not, either directly or indirectly,
without the prior written consent of Credit Agent:
9.1. CONTINGENT LIABILITIES
Assume, guarantee, endorse or otherwise become contingently liable for the
obligation of any Person, or permit any Subsidiary to do any of the
foregoing, except by endorsement of negotiable instruments for deposit or
collection in the ordinary course of business, and except for obligations
arising in connection with the sale of Mortgage Loans without credit
recourse (but subject to recourse for breaches of normal representations,
warranties and other provisions) in the ordinary course of Borrower's
business.
9.2. LIMITATION ON LIENS.
Create, incur, assume or permit to exist any Lien with respect to any
property now owned or hereafter acquired by Borrower or any Subsidiary, or
any income or profits therefrom, except (a) the security interests granted
to the Credit Agent, for the benefit of the Lenders, under the Loan
Documents; (b) Liens described on Exhibit N; (c) Liens in connection with
deposits or pledges to secure payment of workers' compensation,
unemployment insurance, old age pensions or other social security
obligations, in the ordinary course of business of Borrower or any
Subsidiary; (d) Liens for taxes, fees, assessments and governmental
charges not delinquent or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established in accordance with GAAP; (e) encumbrances consisting of zoning
regulations, easements, rights of way, survey exceptions and other similar
restrictions on the use of real property and minor irregularities in title
thereto which do not materially impair their use in operation of its
business; (f) Liens on equipment to secure Debt incurred to finance the
acquisition of such Equipment, including, without limitations, capitalized
leases, (g) Liens incurred in connection with Gestation Agreements with
respect to the property described in the definition of such term, and (h)
Liens arising under Investment Line Agreements on the securities purchased
thereunder.
9.3. RESTRICTIONS ON FUNDAMENTAL CHANGES
9.3(a) Consolidate, merge or enter into any analogous reorganization or
transaction with any Person.
9.3(b) Liquidate, wind up or dissolve (or suffer any liquidation or
dissolution).
9.3(c) Cease actively to engage in the business of originating, acquiring
or servicing Mortgage Loans or make any other material change in
the nature or scope of the business in which Borrower engages as
of the date of this Agreement.
9.3(d) Sell, assign, lease, convey, transfer or otherwise dispose of
(whether in one transaction or a series of transactions) all or
any substantial part of Borrower's business or assets, whether now
owned or acquired after the Closing Date, other than, in the
ordinary course of business and to the extent not otherwise
prohibited by this Agreement, sales of (1) Mortgage Loans, (2)
Mortgage-backed Securities and (3) Servicing Contracts.
9.3(e) Acquire by purchase or in any other transaction all or
substantially all of the business or property of, or stock or
other ownership interests of, any Person.
35
9.3(f) Change its name or jurisdiction of incorporation or formation.
9.3(g) Permit any Subsidiary of Borrower to do or take any of the
foregoing actions.
9.4. INVESTMENTS
Make or own, or permit any Subsidiary to make or own, any Investment,
except Investments in (a) 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, (b) 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 1 year from the date of
acquisition thereof and, at the time of acquisition, having the highest
rating obtainable from either Standard & Poor's Rating Group, a Division
of McGraw Hill, Inc., or Xxxxx'x Investors Service, Inc., (c) commercial
paper maturing no more than one year from the date of creation thereof
and, at the time of acquisition, having the highest rating obtainable from
either Standard & Poor's Rating Group, a Division of McGraw, Hill, Inc.,
or Xxxxx'x Investors Service, Inc., (d) Mortgage Loans and Mortgage-backed
Securities originated or acquired in the ordinary course of business, (e)
certificates of deposits or bankers acceptances issued by any Lender or
any other commercial bank organized under the laws of the United States or
any State thereof and having a combined capital and surplus of at least
$500,000,000, or by United States offices of foreign banks having the
highest rating obtainable from a nationally recognized rating agency, or
by any commercial bank or savings association to the extent the full
amount thereof is insured by the Federal Deposit Insurance Corporation, in
each case maturing within one year from the date of acquisition thereof;
(f) investments in mutual funds that invest substantially all of their
assets in investments of the types described in subsections (a), (b), (c)
and (e) of this Section 9.18, (g) Investments made pursuant to Hedging
Arrangements, (h) Investments in businesses related to mortgage banking
not otherwise permitted by this Section 9.18 in an aggregate amount not to
exceed $1,500,000, and (i) Investments existing as of the Closing Date in
the capital stock of Subsidiaries, as described on Exhibit D hereto.
9.5. LOSS OF ELIGIBILITY
Take any action that would cause Borrower to lose all or any part of its
status as an eligible lender, seller/servicer or issuer as described under
Section 2.3.
9.6. LIMITATION ON DEBT.
Incur or permit to remain outstanding any Debt other than (a) Debt
incurred under this Agreement, (b) Debt described on Exhibit O hereto, (c)
Debt incurred to finance the acquisition by Borrower or a Subsidiary of
equipment used in the ordinary course of its business, (d) Debt incurred
under Gestation Agreements and Investment Line Agreements, and (e) current
liabilities, not overdue unless contested in good faith, incurred by
Borrower or any Subsidiary otherwise than for borrowed money.
9.7. ADJUSTED TANGIBLE LEVERAGE RATIO
Permit Borrower's Adjusted Tangible Leverage Ratio at any time to exceed
10 to 1.
9.8. MINIMUM BOOK NET WORTH
Permit Borrower's Book Net Worth at any time to be less than $25,000,000,
plus 75% of positive net income of Borrower after December 31, 2000.
36
9.9. MINIMUM ADJUSTED TANGIBLE NET WORTH
Permit Borrower's Adjusted Tangible Net Worth at any time to be less than
$50,000,000, plus 75% of Borrower's positive net income from and after
December 31, 2000.
9.10. LIQUIDITY
Permit the sum of Borrower's Cash and Cash equivalents and the amount
available to be drawn under the Term Loan Commitments (after giving effect
to all of the limitations set forth in this Agreement, including Exhibit
I), to be less than $3,000,000.
9.11. MINIMUM ELIGIBLE SERVICING PORTFOLIO
Permit Borrower's outstanding Eligible Servicing Portfolio at any time to
be less than $6,500,000,000.
9.12. MAXIMUM SERVICING DELINQUENCIES AND FORECLOSURES
Permit Borrower's Servicing Delinquencies and Foreclosures, at any time to
be greater than 6% of the Eligible Servicing Portfolio; for purposes of
such calculation, Bond Program Mortgage Loans shall be excluded.
9.13. MAXIMUM SERVICING FORECLOSURES
Permit Borrower's Servicing Foreclosures at any time to be greater than 2%
of the Eligible Servicing Portfolio; for purposes of such calculation,
Bond Program Mortgage Loans shall be excluded.
9.14. DISTRIBUTIONS TO SHAREHOLDERS
For any fiscal year, declare or pay any dividends or otherwise declare or
make any distribution to Borrower's shareholders (including any purchase
or redemption of stock).
9.15. TRANSACTIONS WITH AFFILIATES
Directly or indirectly (a) make any loan, advance, extension of credit or
capital contribution to any of Borrower's Affiliates, (b) sell, transfer,
pledge or assign any of its assets to or on behalf of those Affiliates,
(c) merge or consolidate with or purchase or acquire assets from those
Affiliates, or (d) pay management fees to or on behalf of those
Affiliates.
9.16. RECOURSE SERVICING CONTRACTS
Acquire or enter into, or permit any Subsidiary to acquire or enter into,
Servicing Contracts under which Borrower must repurchase or indemnify the
holder of the Mortgage Loans as a result of defaults on the Mortgage Loans
at any time during the term of those Mortgage Loans (but subject to
recourse for breaches of normal representations, warranties and other
provisions).
9.17. DEFERRAL OF SUBORDINATED DEBT
Pay any Subordinated Debt of Borrower in advance of its stated maturity
or, after a Default or Event of Default under this Agreement has occurred,
make any payment of any kind on any
37
Subordinated Debt of Borrower until all of the Obligations have been paid
and performed in full and any applicable preference period has expired.
9.18. ACCOUNTING CHANGES
Make, or permit any Subsidiary of Borrower to make, any significant change
in accounting treatment or reporting practices, except as required by
GAAP, or change its fiscal year or the fiscal year of any Subsidiary of
Borrower.
END OF ARTICLE 9
38
10. SPECIAL REPRESENTATIONS, WARRANTIES AND COVENANTS CONCERNING COLLATERAL
10.1. SPECIAL REPRESENTATIONS AND WARRANTIES CONCERNING WAREHOUSING COLLATERAL
Borrower represents and warrants to Lenders, as of the date of this
Agreement and as of the date of each Warehousing Advance Request and the
making of each Warehousing Advance, that:
10.1(a) Borrower has not selected the Collateral in a manner so as to
affect adversely Lenders' interests.
10.1(b) Borrower is the legal and equitable owner and holder, free and
clear of all Liens (other than Liens granted under this
Agreement), of the Pledged Loans and the Pledged Securities. All
Pledged Loans, Pledged Securities and related Purchase Commitments
have been duly authorized and validly issued to Borrower, and all
of the foregoing items of Collateral comply with all of the
requirements of this Agreement, and have been and will continue to
be validly pledged or assigned to Credit Agent, subject to no
other Liens.
10.1(c) Borrower has, and will continue to have, the full right, power and
authority to pledge the Collateral pledged and to be pledged by it
under this Agreement.
10.1(d) Each Mortgage Loan and each related document included in the
Pledged Loans (1) has been duly executed and delivered by the
parties to that Mortgage Loan and that related document, (2) has
been made in compliance with all applicable laws, rules and
regulations (including all laws, rules and regulations relating to
usury), (3) is and will continue to be a legal, valid and binding
obligation, enforceable in accordance with its terms, without
setoff, counterclaim or defense in favor of the mortgagor under
the Mortgage Loan or any other obligor on the Mortgage Note and
(4) has not been modified, amended or any requirements of which
waived, except in a writing that is part of the Collateral
Documents. No party to any Mortgage Loan or related document is in
violation of any applicable law, rule or regulation if the
violation would impair the collectibility of the Mortgage Loan or
the performance by the mortgagor or any other obligor of its
obligations under the Mortgage Note or any related document.
10.1(e) Each Pledged Loan is secured by a Mortgage on real property
located in one of the states of the United States or the District
of Columbia.
10.1(f) Except for open-ended Second Mortgage Loans, each Mortgage Loan
has been fully advanced in the face amount of its Mortgage Note.
10.1(g) Each First Mortgage is a first Lien on the premises described in
that Mortgage and each Second Mortgage Loan is secured by a second
Lien on the premises described in that Mortgage. Each Pledged Loan
has or will have a title insurance policy, in ALTA form or
equivalent, from a recognized title insurance company, insuring
the priority of the Lien of the Mortgage and meeting the usual
requirements of Investors purchasing those Mortgage Loans.
10.1(h) Each Mortgage Loan has been evaluated or appraised in accordance
with Title XI of FIRREA.
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10.1(i) The Mortgage Note for each Pledged Loan is (1) payable or endorsed
to the order of Borrower, (2) an "instrument" within the meaning
of Section 9-105 of the Uniform Commercial Code of all applicable
jurisdictions and (3) is denominated and payable in United States
dollars.
10.1(j) No default has existed for 30 days or more under any Mortgage Loan
included in the Pledged Loans, other than an Impaired Mortgage
Loan.
10.1(k) No party to a Mortgage Loan or any related document is in
violation of any applicable law, rule or regulation that would
impair the collectibility of the Mortgage Loan or the performance
by the mortgagor or any other obligor of its obligations under the
Mortgage Note or any related document.
10.1(l) All fire and casualty policies covering the premises encumbered by
each Mortgage included in the Pledged Loans (1) name and will
continue to name Borrower and its successors and assigns as the
insured under a standard mortgagee clause, (2) are and will
continue to be in full force and effect and (3) afford and will
continue to afford insurance against fire and such other risks as
are usually insured against in the broadest form of extended
coverage insurance available.
10.1(m) Pledged Loans secured by premises located in a special flood
hazard area designated as such by the Director of the Federal
Emergency Management Agency are and will continue to be covered by
special flood insurance under the National Flood Insurance
Program.
10.1(n) Each Pledged Loan against which a Warehousing Advance is made on
the basis of a Purchase Commitment meets all of the requirements
of that Purchase Commitment, and each Pledged Security against
which a Warehousing Advance is outstanding meets all of the
requirements of the related Purchase Commitment.
10.1(o) Pledged Loans that are intended to be exchanged for Agency
Securities comply or, prior to the issuance of the Agency
Securities will comply, with the requirements of any governmental
instrumentality, department or agency issuing or guaranteeing the
Agency Securities.
10.1(p) Pledged Loans that are intended to be used in the formation of
Mortgage-backed Securities (other than Agency Securities) comply
with the requirements of the issuer of the Mortgage-backed
Securities (or its sponsor) and of the Rating Agencies.
10.1(q) The original assignments of Mortgage and of UCC financing
statements delivered to Credit Agent for each Pledged Loan are in
recordable form and comply with all applicable laws and
regulations governing the filing and recording of such documents.
10.1(r) Each Pledged Loan secured by real property to which a Manufactured
Home is affixed will create a valid Lien on that Manufactured Home
that will have priority over any other Lien on the Manufactured
Home, whether or not arising under applicable real property law.
10.2. SPECIAL AFFIRMATIVE COVENANTS CONCERNING WAREHOUSING COLLATERAL
As long as the Commitments are outstanding or there remain any Obligations
to be paid or performed under this Agreement or under any other Loan
Document, Borrower must:
10.2(a) Warrant and defend the right, title and interest of Lenders in and
to the Collateral against the claims and demands of all Persons.
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10.2(b) Service or cause to be serviced all Pledged Loans in accordance
with the standard requirements of the issuers of Purchase
Commitments covering them and all applicable HUD, Xxxxxx Xxx and
Xxxxxxx Mac requirements, including taking all actions necessary
to enforce the obligations of the obligors under such Mortgage
Loans. Service or cause to be serviced all Mortgage Loans backing
Pledged Securities in accordance with applicable governmental
requirements and requirements of issuers of Purchase Commitments
covering them. Hold all escrow funds collected in respect of
Pledged Loans and Mortgage Loans backing Pledged Securities in
trust, without commingling the same with non-custodial funds, and
apply them for the purposes for which those funds were collected.
10.2(c) Execute and deliver to Credit Agent such Uniform Commercial Code
financing statements with respect to the Collateral as Credit
Agent may request, and those further instruments of sale, pledge,
assignment or transfer, and those powers of attorney, as required
by Credit Agent, and do and perform all matters and things
necessary or desirable to be done or observed, for the purpose of
effectively creating, maintaining and preserving the security and
benefits intended to be afforded Credit Agent under this
Agreement.
10.2(d) Notify Collateral Agent within 2 Business Days of any default
under, or of the termination of, any Purchase Commitment relating
to any Pledged Loan, Eligible Mortgage Pool, or Pledged Security.
10.2(e) Promptly comply in all respects with the terms and conditions of
all Purchase Commitments, and all extensions, renewals and
modifications or substitutions of or to all Purchase Commitments.
Deliver or cause to be delivered to the Investor the Pledged Loans
and Pledged Securities to be sold under each Purchase Commitment
not later than the mandatory delivery date of the Pledged Loans or
Pledged Securities under the Purchase Commitment.
10.2(f) Maintain, at its principal office or in a regional office approved
by Credit Agent, or in the office of a computer service bureau
engaged by Borrower and approved by Credit Agent and, upon
request, make available to Credit Agent or Collateral Agent the
originals, or copies in any case where the originals have been
delivered to Collateral Agent or to an Investor, of the Mortgage
Notes and Mortgages included in Pledged Loans, Mortgage-backed
Securities included in Pledged Securities, Purchase Commitments,
and all related Mortgage Loan documents and instruments, and all
files, surveys, certificates, correspondence, appraisals, computer
programs, tapes, discs, cards, accounting records and other
information and data relating to the Collateral.
10.2(g) On or before May 31, 2001, enter into an agreement among Borrower,
Lender and Xxxxxx Xxx, pursuant to which Xxxxxx Mae agrees to send
all cash proceeds of Mortgage Loans sold by Borrower to Xxxxxx Xxx
to the Settlement Account.
10.3. SPECIAL NEGATIVE COVENANTS CONCERNING WAREHOUSING COLLATERAL
As long as the Commitments are outstanding or there remain any Obligations
to be paid or performed, Borrower must not, either directly or indirectly,
without the prior written consent of Credit Agent:
10.3(a) Amend or modify, or waive any of the terms and conditions of, or
settle or compromise any claim in respect of, any Pledged Loans or
Pledged Securities.
10.3(b) Sell, transfer or assign, or grant any option with respect to, or
pledge (except under this Agreement) any of the Collateral or any
interest in any of the Collateral.
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10.3(c) Make any compromise, adjustment or settlement in respect of any of
the Collateral or accept other than cash in payment or liquidation
of the Collateral.
10.4. SPECIAL REPRESENTATIONS AND WARRANTIES CONCERNING SERVICING COLLATERAL
Exhibit C is a true and complete list of Borrower's Servicing Portfolio as
of the date of this Agreement. Borrower hereby represents and warrants to
Credit Agent, as of the date of this Agreement and as of the date of each
Term Loan Advance Request and the making of each Term Loan Advance, that:
10.4(a) Borrower is the legal and equitable owner and holder, free and
clear of all Liens (other than Liens in favor of Credit Agent), of
the Servicing Contracts included in the Servicing Portfolio, and
the Servicing Contracts pledged under this Agreement have been and
will continue to be validly pledged or assigned to Credit Agent,
subject to no other Liens.
10.4(b) Borrower has, and will continue to have, the full right, power and
authority to pledge the Servicing Contracts pledged and to be
pledged by it under this Agreement.
10.4(c) Except as otherwise disclosed to Credit Agent, all of the
servicing rights under the Servicing Contracts included in the
Servicing Portfolio constitute direct servicing rights.
10.4(d) Each Servicing Contract included in the Servicing Portfolio is in
full force and effect and is legal, valid and enforceable in
accordance with its terms, and no default or event that, with
notice or lapse of time or both, would become a default, exists
under any Servicing Contract.
10.4(e) Each right to the payment of money under the Servicing Contracts
included in the Servicing Portfolio is genuine and enforceable in
accordance with its terms against the parties obligated to pay the
same, which terms have not been modified or waived in any respect
or to any extent.
10.4(f) The amount represented by Borrower to Credit Agent as owing by an
obligor under each Mortgage Loan being serviced under a Servicing
Contract included in the Servicing Portfolio is the correct amount
actually owing by that obligor.
10.4(g) To the best of Borrower's knowledge, no obligor has any defense,
set off, claim or counterclaim against Borrower that can be
asserted against Credit Agent, whether in any proceeding to
enforce Credit Agent's rights in the related Mortgage Loan or
otherwise.
10.4(h) Borrower has not sold, assigned or otherwise transferred any
rights associated with the Mortgage Loans being serviced under the
Servicing Contracts included in the Servicing Portfolio.
10.4(i) No consent of any obligor or any other Person is required for the
grant of the security interest provided in this Agreement by
Borrower in any of the Collateral or any computer software being
utilized by Borrower pursuant to license, lease or otherwise,
other than consents that have been obtained, nor will any consent
need to be obtained upon the occurrence of an Event of Default for
Credit Agent to exercise its rights with respect to any of the
Collateral.
END OF ARTICLE 10
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11. DEFAULTS; REMEDIES
11.1. EVENTS OF DEFAULT
The occurrence of any of the following is an event of default ("Event of
Default"):
11.1(a) Borrower fails to pay the principal of any Advance when due,
whether at stated maturity, by acceleration, or otherwise; or
fails to pay any installment of interest on any Advance within 12
days after the date of Credit Agent's invoice or account analysis
statement; or fails to pay, within any applicable grace period,
any other amount due under this Agreement or any other Obligation
of Borrower to Lenders; or
11.1(b) Borrower or any of its Subsidiaries fails to pay, or defaults in
the payment of any principal or interest on, any other
indebtedness or any contingent obligation within any applicable
grace period; breaches or defaults with respect to any other
material term of any other indebtedness or of any loan agreement,
mortgage, indenture or other agreement relating to that
indebtedness, if the effect of that breach or default is to cause,
or to permit the holder or holders of that indebtedness (or a
trustee on behalf of such holder or holders) to cause,
indebtedness of Borrower or its Subsidiaries in the aggregate
amount of $50,000 or more to become or be declared due before its
stated maturity (upon the giving or receiving of notice, lapse of
time, both, or otherwise); or
11.1(c) Borrower fails to perform or comply with any term or condition
applicable to it contained in Sections 8.4, 8.14, 8.15, 10.2 and
10.3 or in any Section of Article 9; or
11.1(d) Any representation or warranty made or deemed made by Borrower
under this Agreement, other than in Section 10.1, in any other
Loan Document or in any written statement or certificate at any
time given by Borrower is inaccurate or incomplete in any material
respect on the date as of which it is made or deemed made; or
11.1(e) Borrower defaults in the performance of or compliance with any
term contained in this Agreement or any other Loan Document other
than those referred to in Sections 11.1 (a), 11.1 (c) or 11.1 (d)
and such default has not been remedied or waived within 30 days
after the earliest of (1) receipt by Borrower of Notice from
Credit Agent of that default, (2) receipt by Credit Agent of
Notice from Borrower of that default or (3) the date Borrower
should have notified Credit Agent of that default under Section
8.7(c) or 8.7(d); or
11.1(f) A case (whether voluntary or involuntary) is filed by or against
Parent, Borrower or any Subsidiary of Borrower under any
applicable bankruptcy, insolvency or other similar federal or
state law; or a court of competent jurisdiction appoints a
receiver (interim or permanent), liquidator, sequestrator,
trustee, custodian or other officer having similar powers over
Parent, Borrower or any Subsidiary of Borrower, or over all or a
substantial part of their respective properties or assets; or
Parent, Borrower or any Subsidiary of Borrower (1) consents to the
appointment of or possession by a receiver (interim or permanent),
liquidator, sequestrator, trustee, custodian or other officer
having similar powers over Parent, Borrower or any Subsidiary of
Borrower, or over all or a substantial part of their respective
properties or assets, (2) makes an assignment for the benefit of
creditors, or (3) fails, or admits in writing its inability, to
pay its debts as those debts become due; or
43
11.1(g) Borrower fails to perform any contractual obligation to repurchase
Mortgage Loans, if such obligations in the aggregate exceed
$1,000,000; or
11.1(h) Any money judgment, writ or warrant of attachment or similar
process involving in an amount in excess of $500,000 is entered or
filed against Borrower or any of its Subsidiaries or any of their
respective assets and remains undischarged, unvacated, unbonded or
unstayed for a period of 30 days or 5 days before the date of any
proposed sale under that money judgment, writ or warrant of
attachment or similar process; or
11.1(i) Any order, judgment or decree decreeing the dissolution of
Borrower is entered and remains undischarged or unstayed for a
period of 20 days; or
11.1(j) Borrower purports to disavow the Obligations or contests the
validity or enforceability of any Loan Document; or
11.1(k) Credit Agent's security interest on any portion of the Collateral
becomes unenforceable or otherwise impaired and, if Credit Agent
agrees in writing to the grace period, all Advances made against
any of that Collateral are not paid in full within 10 days after
the date the unenforceability or impairment begins; or
11.1(l) A material adverse change occurs in Borrower's financial
condition, business, properties, operations or prospects, or in
Borrower's ability to repay the Obligations; or
11.1(m) Any Lien for any taxes, assessments or other governmental charges
(1) is filed against Borrower or any of its property, or is
otherwise enforced against Borrower or any of its property, or (2)
obtains priority that is equal or greater than the priority of
Credit Agent's security interest in any of the Collateral; or
11.1(n) Parent ceases to own, directly, all of the capital stock of
Borrower, or Xxxxxxx Xxxxx Capital Partners, Inc. and its
Affiliates cease to own, directly or indirectly, 51% of each class
of the capital stock of Parent; or
11.1(o) Xxxxx X. Xxxxxxxxx ceases to be the chief executive officer of
Borrower.
11.2. REMEDIES
11.2(a)If a Lender shall have knowledge of a Default or an Event of
Default, it shall forthwith give Notice thereof to the Credit
Agent. If the Credit Agent shall have knowledge of a Default or an
Event of Default, it shall forthwith give Notice thereof to each
Lender and to Borrower. The Credit Agent shall not be deemed to
have knowledge or Notice of the occurrence of a Default or an
Event of Default unless the Credit Agent has received Notice from
a Lender or Borrower. No Lender shall be deemed to have knowledge
or Notice of the occurrence of a Default or an Event of Default
unless such Lender has received Notice from the Credit Agent or
Borrower.
11.2(b) If an Event of Default described in Section 11.1 (f) occurs with
respect to Borrower, the Commitments will automatically terminate
and the unpaid principal amount of and accrued interest on the
Notes and all other Obligations will automatically become due and
payable, without presentment, demand or other requirements of any
kind, all of which Borrower expressly waives.
11.2(c) If any other Event of Default occurs, Majority Lenders may, by
Notice to Borrower, terminate the Commitments and declare the
Obligations to be immediately due and payable.
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11.2(d) If any Event of Default occurs, Credit Agent, on behalf of the
Lenders, may, and at the direction of the Majority Lenders shall
(subject to Section 12.3(c)), also take any of the following
actions:
(1) Foreclose upon or otherwise enforce its security interest in
and Lien on the Collateral to secure all payments and
performance of the Obligations in any manner permitted by
law or provided for in the Loan Documents.
(2) Notify all obligors under any of the Collateral that the
Collateral has been assigned to Credit Agent , on behalf of
Lenders (or to another Person designated by Credit Agent)
and that all payments on that Collateral are to be made
directly to Credit Agent (or such other Person); settle,
compromise or release, in whole or in part, any amounts any
obligor or Investor owes on any of the Collateral on terms
acceptable to Credit Agent; enforce payment and prosecute
any action or proceeding involving any of the Collateral;
and where any Collateral is in default, foreclose on and
enforce any Liens securing that Collateral in any manner
permitted by law and sell any property acquired as a result
of those enforcement actions.
(3) Act, or contract with a third party to act at Borrower's
expense, as servicer or subservicer of Collateral requiring
servicing and perform all obligations required under any
Servicing Contracts and Purchase Commitments.
(4) Require Borrower to assemble and make available to Credit
Agent the Collateral and all related books and records at a
place designated by Credit Agent.
(5) Enter onto property where any Collateral or related books
and records are located and take possession of those items
with or without judicial process; and obtain access to
Borrower's data processing equipment, computer hardware and
software relating to the Collateral and use all of the
foregoing and the information contained in the foregoing in
any manner Credit Agent deems necessary for the purpose of
effectuating its rights under this Agreement and any other
Loan Document.
(6) Before the disposition of the Collateral, prepare it for
disposition in any manner and to the extent Credit Agent
deems appropriate.
(7) Exercise all rights and remedies of a secured creditor under
the Uniform Commercial Code of Minnesota or other applicable
law, including selling or otherwise disposing of all or any
portion of the Collateral at one or more public or private
sales, whether or not the Collateral is present at the place
of sale, for cash or credit or future delivery, on the terms
and in the manner as Credit Agent may determine, including
sale under any applicable Purchase Commitment. Borrower
waives any right it may have to prior notice of the sale of
all or any portion of the collateral to the extent allowed
by applicable law. If notice is required under applicable
law, Credit Agent will give Borrower not less than 10 days'
notice of any public sale or of the date after which any
private sale may be held. Borrower agrees that 10 days'
notice is reasonable notice. Credit Agent may, without
notice or publication, adjourn any public or private sale
one or more times by announcement at the time and place
fixed for the sale, and the sale may be held at any time or
place announced at the adjournment. In the case of a sale of
all or any portion of the Collateral on credit or for future
delivery, the Collateral sold on those terms may be may be
retained by Credit Agent until the purchaser pays the
selling price or takes possession of the Collateral. Credit
Agent has no liability to Borrower if a purchaser fails to
pay for or take possession of the
45
Collateral sold on those terms, and in the case of any such
failure, Credit Agent may sell the Collateral again upon
notice complying with this Section.
(8) Instead of or in conjunction with exercising the power of
sale authorized by Section 11.2 (d)(7), Credit Agent may
proceed by suit at law or in equity to collect all amounts
due upon the Collateral, or to foreclose Credit Agent's Lien
on and sell all or any portion of the Collateral pursuant to
a judgment or decree of a court of competent jurisdiction.
(9) Proceed against Borrower on the Notes.
(10) Retain all excess proceeds from the sale or other
disposition of the Collateral, and apply them to the payment
of the Obligations under Section 11.3.
11.2(e) Credit Agent shall follow the instructions of the Majority Lenders
in exercising or not exercising its rights under this Section
11.2, but (i) the Credit Agent shall have no obligation to take or
not to take any action which it believes may expose it to any
liability, and (ii) the Credit Agent may, but shall be under no
obligation to, await instructions from the Majority Lenders before
exercising or not exercising its rights under this Section 11.2.
11.2(f) Credit Agent or any Lender will incur no liability as a result of
the commercially reasonable sale or other disposition of all or
any portion of the Collateral at any public or private sale or
other disposition. Borrower waives (to the extent permitted by
law) any claims it may have against Credit Agent and each other
Lender arising by reason of the fact that the price at which the
Collateral may have been sold at a private sale was less than the
price that Credit Agent might have obtained at a public sale, or
was less than the aggregate amount of the outstanding Advances,
plus accrued and unpaid interest on the Advances, and unpaid fees,
even if Credit Agent accepts the first offer received and does not
offer the Collateral to more than one offeree. Borrower agrees
that any sale of Collateral under the terms of a Purchase
Commitment, or any other disposition of Collateral arranged by
Borrower, whether before or after the occurrence of an Event of
Default, will be deemed to have been made in a commercially
reasonable manner.
11.2(g) Borrower acknowledges that Mortgage Loans are collateral of a type
that is the subject of widely distributed standard price
quotations and that Mortgage-backed Securities are collateral of a
type that is customarily sold on a recognized market. Borrower
waives any right it may have to prior notice of the sale of
Pledged Securities, and agrees that Credit Agent may purchase
Pledged Loans and Pledged Securities at a private sale of such
Collateral.
11.2(h) Borrower specifically waives and releases (to the extent permitted
by law) any equity or right of redemption, stay or appraisal that
Borrower has or may have under any rule of law or statute now
existing or adopted after the date of this Agreement, and any
right to require Credit Agent to (1) proceed against any Person,
(2) proceed against or exhaust any of the Collateral or pursue its
rights and remedies against the Collateral in any particular
order, or (3) pursue any other remedy within its power. Credit
Agent is not be required to take any action to preserve any rights
of Borrower against holders of mortgages having priority to the
Lien of any Mortgage included in the Collateral or to preserve
Borrower's rights against other prior parties.
11.2(i) Credit Agent may, but is not obligated to, advance any sums or do
any act or thing necessary to uphold or enforce the Lien and
priority of, or the security intended to be afforded by, any
Mortgage included in the Collateral, including payment of
delinquent taxes or assessments and insurance premiums. All
advances, charges, costs and expenses, including reasonable
attorneys' fees and disbursements, incurred or paid by Credit
Agent or any Lender in exercising any right, power or remedy
conferred by this
46
Agreement, or in the enforcement of this Agreement, together with
interest on those amounts at the Default Rate, from the time paid
by Credit Agent until repaid by Borrower, are deemed to be
principal outstanding under this Agreement and the Notes.
11.2(j) No failure or delay on the part of Credit Agent to exercise any
right, power or remedy provided in this Agreement or under any
other Loan Document, at law or in equity, will operate as a waiver
of that right, power or remedy. No single or partial exercise by
Credit Agent or any Lender of any right, power or remedy provided
under this Agreement or any other Loan Document, at law or in
equity, precludes any other or further exercise of that right,
power, or remedy by Credit Agent or any Lender, or Credit Agent's
exercise of any other right, power or remedy. Without limiting the
foregoing, Borrower waives all defenses based on the statute of
limitations to the extent permitted by law. The remedies provided
in this Agreement and the other Loan Documents are cumulative and
are not exclusive of any remedies provided at law or in equity.
11.2(k) Credit Agent is hereby granted a license or other right to use,
without charge, Borrower's computer programs, other programs,
labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks and advertising
matter, or any property of a similar nature, as it pertains to the
Collateral, in advertising for sale and selling any Collateral and
Borrower's rights under all licenses and all other agreements
related to the foregoing inure to Lenders' benefit until the
Obligations are paid in full.
11.3. APPLICATION OF PROCEEDS
The proceeds of any sale, disposition or other enforcement of the Credit
Agent's security interest in all or any part of the Collateral shall be
applied by the Credit Agent as follows:
11.3(a) In the case of the proceeds of Other Eligible Assets (excluding
Servicing Contracts) and related collateral:
First, to the payment of the costs and expenses of such sale or
enforcement, including reasonable compensation to the Credit
Agent's and Collateral Agent's agents and counsel, and all
expenses, liabilities and advances made or incurred by or on
behalf of the Credit Agent and Collateral Agent in connection
therewith;
Second, to the payment of the costs and expenses of such sale or
enforcement, including reasonable compensation to the Lenders'
agents and counsel, and all expenses, liabilities and advances
made or incurred by or on behalf of any Lender in connection
therewith;
Third, to the Lenders holding Warehousing Advances against Other
Eligible Assets, pro rata in accordance with the amount of accrued
interest, or accrued Balance Deficiency Fees, owed to each of them
in respect to such Warehousing Advances, until such interest and
fees are paid in full;
Fourth, to the Lenders holding Warehousing Advances against Other
Eligible Assets, pro rata in accordance with their respective
Percentage Shares, until the principal amounts of all such
Warehousing Advances outstanding are paid in full;
Fifth, to the Lenders, for application to the Obligations owed to
each of them in respect of other Warehousing Advances and Term
Loan Advances, as set forth in clauses Fifth and Sixth of Section
11.3(b) and clauses Third and Fourth of Section 11.3(c); and
Sixth, to the remaining Obligations; and
47
Finally, to the payment to Borrower, or to their successors or
assigns, or as a court of competent jurisdiction may direct, of
any surplus then remaining from such proceeds.
11.3(b) In the case of the proceeds of Eligible Loans and related
Collateral:
First, to the payment of the costs and expenses of such sale or
enforcement, including reasonable compensation to the Credit
Agent's and Collateral Agent's agents and counsel, and all
expenses, liabilities and advances made or incurred by or on
behalf of the Credit Agent and Collateral Agent in connection
therewith;
Second, to the payment of the costs and expenses of such sale or
enforcement, including reasonable compensation to the Lenders'
agents and counsel, and all expenses, liabilities and advances
made or incurred by or on behalf of any Lender in connection
therewith;
Third, to RFC, in an amount equal to the amount of accrued
interest or Balance Deficiency Fees owed to RFC in respect of
Swingline Advances, until paid in full;
Fourth, to RFC until the principal amount of all Swingline
Advances outstanding are paid in full;
Fifth, to the Lenders holding Warehousing Advances against
Eligible Loans, pro rata in accordance with the amount of accrued
interest, or accrued Balance Deficiency Fees, owed to each of them
in respect to Warehousing Advances, until such interest and fees
are paid in full;
Sixth, to the Lenders holding Warehousing Advances against
Eligible Loans, pro rata in accordance with their respective
Percentage Shares, until the principal amounts of all Warehousing
Advances outstanding are paid in full;
Seventh, to the Lenders holding Warehousing Advances, pro rata in
accordance with their respective Percentage Shares, until all fees
and other Obligations accrued by or due each Lender, the Credit
Agent and the Collateral Agent are paid in full;
Eighth, to the Lenders, for application to the Obligations owed to
each of them in respect of other Warehousing Advances and Term
Loan Advances, as set forth in clauses Third and Fourth of Section
11.3(a) and clauses Third and Fourth of Section 11.3(c); and
Ninth, to the remaining Obligations; and
Finally, to the payment to Borrower, or to their successors or
assigns, or as a court of competent jurisdiction may direct, of
any surplus then remaining from such proceeds.
11.3(c) In the case of the proceeds of the Servicing Contracts:
First, to the payment of the costs and expenses of such sale or
enforcement, including reasonable compensation to the Credit
Agent's agents and counsel, and all expenses, liabilities and
advances made or incurred by or on behalf of the Credit Agent in
connection therewith;
Second, to the payment of the costs and expenses of such sale or
enforcement, including reasonable compensation to the Lenders'
agents and counsel, and all expenses, liabilities and advances
made or incurred by or on behalf of any Lender in connection
therewith;
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Third, to the Lenders holding Term Loan Advances, pro rata in
accordance with the amount of accrued interest, or accrued Balance
Deficiency Fees, owed to each of them in respect of Term Loan
Advances until such interest and fees are paid in full;
Fourth, to the Lenders holding Term Loan Advances, pro rata in
accordance with their respective Percentage Shares, until the
principal amount of all Term Loan Advances outstanding are paid in
full;
Fifth, to the Lenders holding Term Loan Advances, pro rata in
accordance with their respective Percentage Shares, until all fees
and other Obligations accrued by or due each Lender, the Credit
Agent and the Collateral Agent are paid in full;
Sixth, to the Lenders, for application to the Obligations owed to
each of them in respect of Warehousing Advances outstanding
against Other Eligible Assets, as set forth in clauses Third and
Fourth of Section 8.3(a) hereof;
Seventh, to the Lenders, for application to the Obligations owed
to each of them in respect of Swingline Advances and Warehousing
Advances outstanding against Eligible Loans, as set forth in
clauses Third, Fourth, Fifth, Sixth and Seventh of Section 8.3(b)
hereof; and
Eighth, to the remaining Obligations; and
Finally, to the payment to Borrower, or to their successors or
assigns, or as a court of competent jurisdiction may direct, of
any surplus then remaining from such proceeds.
11.3(d) If the proceeds of any such sale, disposition or other enforcement
are insufficient to cover the costs and expenses of such sale, as
aforesaid, and the payment in full of all Obligations, Borrower
shall remain liable for any deficiency.
11.4. CREDIT AGENT AND COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT
Borrower appoints each of Credit Agent and Collateral Agent its
attorney-in-fact, with full power of substitution, for the purpose of
carrying out the provisions of this Agreement, the Notes and the other
Loan Documents and taking any action and executing any instruments that
Credit Agent or Collateral Agent deems necessary or advisable to
accomplish that purpose. Borrower's appointment of Credit Agent and
Collateral Agent as attorney-in-fact is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing, Credit Agent
or Collateral Agent may give notice of Credit Agent's Lien on the
Collateral to any Person, either in the name of Borrower or in its own
name, endorse all Pledged Loans or Pledged Securities payable to the order
of Borrower, change or cause to be changed the book-entry registration or
name of subscriber or Investor on any Pledged Security, or receive,
endorse and collect all checks made payable to the order of Borrower
representing payment on account of the principal of or interest on, or the
proceeds of sale of, any of the Pledged Loans or Pledged Securities and
give full discharge for those transactions.
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11.5. RIGHT OF SET-OFF
Without limiting any other right that Credit Agent, Collateral Agent or
any Lender may have under applicable law or otherwise, if Borrower
defaults in the payment of any Obligation or in the performance of any of
its duties under the Loan Documents, each Lender may, without Notice to or
demand on Borrower (which Notice or demand Borrower expressly waives),
set-off, appropriate or apply any and all property of Borrower held at any
time by such Lender, or any indebtedness at any time owed by such Lender
to or for the account of Borrower, against the Obligations, whether or not
those Obligations have matured.
11.6. SHARING OF PAYMENTS
If upon the occurrence of an Event of Default and acceleration of the
Obligations, if any Lender shall hold or receive and retain any payment,
whether by setoff, application of deposit balance or security, or
otherwise, in respect of the Obligations, then such Lender shall purchase
from the other Lenders for cash and at face value and without recourse,
such participation in the Obligations held by them as shall be necessary
to cause such payment to be shared ratably with each of them; provided,
that if such payment or part thereof is thereafter recovered from such
purchasing Lender, the related purchases from the other Lenders shall be
rescinded ratably and the purchase price restored as to the portion of
such excess payment so recovered, but without interest thereon unless the
purchasing Lender is required to pay interest on such amounts to the
Person recovering such payment, in which case with interest thereon,
computed at the same rate, and on the same basis, as the interest that the
purchasing Lender is required to pay. If any Lender receives a payment
from the Borrower not in respect of the Obligations, but relating to
another relationship of such Lender and the Borrower, such Lender may
apply the payment first to the indebtedness arising out of the other
relationship and then against the Obligations as provided for above.
END OF ARTICLE 11
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12. AGENTS
12.1. APPOINTMENT
Each Lender hereby irrevocably designates and appoints the Credit Agent
and the Collateral Agent as the agent of such Lender under the Loan
Documents and each such Lender hereby irrevocably authorizes the Credit
Agent and the Collateral Agent to take such action on its behalf under the
provisions of the Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Credit Agent and the
Collateral Agent by the terms of the Loan Documents, together with such
other powers as are reasonably incidental thereto. The Credit Agent and
the Collateral Agent each hereby accepts such appointment and agrees to
act in accordance with this Agreement.
12.2. DUTIES OF AGENTS
The provisions of the Loan Documents set forth the exclusive duties of the
Credit Agent and the Collateral Agent and no implied duties or obligations
shall be read into the Loan Documents against the Credit Agent or the
Collateral Agent. The Credit Agent and the Collateral Agent shall not be
bound in any way by any agreement or contract other than the Loan
Documents and any other agreement to which it is a party. The Credit Agent
and the Collateral Agent shall each act as an independent contractor in
performing its obligations as Credit Agent or Collateral Agent under the
Loan Documents and nothing herein contained shall be deemed to create any
fiduciary relationship among or between the Credit Agent, the Collateral
Agent, Borrower or the Lenders.
12.3. STANDARD OF CARE
The Credit Agent and the Collateral Agent each shall act in accordance
with customary standards for those engaged as credit agents or collateral
agents of commercial transactions in similar capacities.
12.3(a) Neither the Credit Agent nor the Collateral Agent shall be
required to ascertain or inquire as to the performance or
observance of any of the conditions or agreements to be performed
or observed by any other party, except as specifically provided in
the Loan Documents. The Credit Agent and the Collateral Agent each
disclaims any responsibility for the validity or accuracy of the
recitals to the Loan Documents and any representations and
warranties contained herein, unless specifically identified as
recitals, representations or warranties of the Credit Agent or the
Collateral Agent.
12.3(b) Neither the Credit Agent nor the Collateral Agent shall have any
responsibility for ascertaining the value, collectibility,
insurability, enforceability, effectiveness or suitability of any
Collateral, the title of any party therein, the validity or
adequacy of the security afforded thereby, or the validity of the
Loan Documents (except as to its authority to enter into the Loan
Documents and to perform its obligations hereunder and
thereunder).
12.3(c) No provision of this Agreement shall require the Credit Agent or
the Collateral Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or
powers, if, in its sole judgment, it shall believe that repayment
of such funds or adequate indemnity against such risk or liability
is not assured to it.
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12.3(d) Neither the Credit Agent nor the Collateral Agent is responsible
for preparing or filing any reports or returns relating to
federal, state or local income taxes with respect to this
Agreement, other than for its compensation or for reimbursement of
expenses.
12.4. DELEGATION OF DUTIES
Each of the Credit Agent and the Collateral Agent may execute any of its
duties under the Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters
pertaining to such duties. Neither the Credit Agent nor the Collateral
Agent shall be responsible for the negligence or misconduct of any agents
or attorneys-in-fact selected by it with reasonable care.
12.5. EXCULPATORY PROVISIONS
Neither the Credit Agent, the Collateral Agent nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (a) liable for any action lawfully taken or omitted to be taken
by it or such Person under or in connection with the Loan Documents
(except for its or such Person's own gross negligence or willful
misconduct), or (b) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by Borrower
or any officer thereof contained in the Loan Documents or in any
certificate, report, statement or other document referred to or provided
for in, or received by the Credit Agent or the Collateral Agent under or
in connection with, the Loan Documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of the Loan
Documents or for any failure of Borrower to perform its obligations under
any Loan Document. Neither the Credit Agent nor the Collateral Agent shall
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or
conditions of, the Loan Documents or to inspect the properties, books or
records of Borrower or any of its Subsidiaries.
12.6. RELIANCE BY AGENT
The Credit Agent and the Collateral Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certification, affidavit, letter, cablegram, telegram,
telecopy, telex or teletype message, statement, order or other document or
conversation reasonably believed by it to be correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to
Borrower), independent accountants (including, without limitation,
accountants to Borrower) and other experts selected by the Credit Agent
and the Collateral Agent. The Credit Agent may deem and treat the payee of
any Note as the owner thereof for all purposes. As to the Lenders (a) the
Credit Agent shall be fully justified in failing or refusing to take any
action under the Loan Documents unless it shall first receive such advice
or concurrence of the Majority Lenders or all of the Lenders, as
appropriate, or it shall first be indemnified to its satisfaction by the
Lenders ratably in accordance with their respective Percentage Shares
against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any action (except for liabilities
and expenses resulting from the Credit Agent's gross negligence or willful
misconduct), (b) the Credit Agent shall in all cases be fully protected in
acting, or in refraining from acting, under the Loan Documents in
accordance with a request of the Majority Lenders or all of the Lenders,
as appropriate, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders, (c) the Collateral
Agent shall be fully justified in failing or refusing to take any action
under the Loan Documents unless it shall first receive such advice or
concurrence of the Credit Agent, and (d) the Collateral Agent shall in all
cases be fully protected in acting, or in refraining from acting, under
the Loan Documents in accordance with a request of or instructions from
the Credit Agent, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.
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12.7. NON-RELIANCE ON AGENTS OR OTHER LENDERS
Each Lender expressly acknowledges that neither the Credit Agent, the
Collateral Agent nor any of their respective officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to such Lender and that no act by the Credit
Agent or the Collateral Agent hereafter taken, including any review of the
affairs of Borrower, shall be deemed to constitute any representation or
warranty by the Credit Agent or the Collateral Agent to any Lender. Each
Lender represents to the Credit Agent and the Collateral Agent that it
has, independently and without reliance upon the Credit Agent, the
Collateral Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of Borrower and made its own decision to
enter into and make Advances under the Credit Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Credit Agent, the Collateral Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under the Credit Agreement, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness
of Borrower. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Credit Agent or the
Collateral Agent hereunder or under the Collateral Agency Agreement, the
Credit Agent and the Collateral Agent shall have no duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, property, financial or other condition or
creditworthiness of Borrower or any Subsidiary which may come into the
possession of the Credit Agent and the Collateral Agent or any of their
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
12.8. AGENTS IN INDIVIDUAL CAPACITY
The Credit Agent and the Collateral Agent may make loans to, accept
deposits from and generally engage in any kind of business with Borrower
as though it were not an agent hereunder. With respect to the Advances
made or renewed by them and any Note issued to them, the Credit Agent and
the Collateral Agent shall have the same rights and powers under the Loan
Documents as any Lender and may exercise the same as though it were not
the Credit Agent or the Collateral Agent, and the terms "Lender" and
"Lenders" shall include the Credit Agent and the Collateral Agent in its
individual capacity.
12.9. SUCCESSOR AGENT
The Credit Agent or the Collateral Agent may resign as such at any time
upon giving 30 days Notice to Borrower and the Lenders. The Credit Agent
may be removed immediately with cause or at any time upon 30 days Notice
from the Majority Lenders to the Credit Agent and Borrower. The Collateral
Agent may be removed immediately with cause or at any time upon 30 days
Notice from the Credit Agent to the Collateral Agent, Lenders and
Borrower. Upon Notice of such resignation or removal, the Majority Lenders
may appoint a successor Credit Agent, and the Credit Agent may appoint a
successor Collateral Agent (which successor Credit Agent or Collateral
Agent, assuming that no Default or Event of Default exists, shall be
reasonably acceptable to Borrower). The date on which Borrower, the Credit
Agent and Lenders have received Notice from such successor of its
acceptance of appointment as the Credit Agent or the Collateral Agent
shall constitute the effective date of resignation or removal of the
resigning or removed Credit Agent or Collateral Agent. If no successor
Credit Agent or Collateral Agent, shall have been so appointed by the
Majority Lenders, and shall have accepted such appointment within the
allotted time period, then, upon 5 days Notice to Borrower, the resigned
or removed Credit Agent or Collateral Agent may, on behalf of the Lenders,
appoint a successor. Upon the effective date of resignation or removal of
the resigning or removed Credit Agent or Collateral
53
Agent, such successor will thereupon succeed to and become vested with all
the rights, powers, privileges, and duties of the resigning or removed
Credit Agent or Collateral Agent, but the resigning or removed Credit
Agent or Collateral 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 the performance of its duties and
obligations under this Agreement prior to the effective date of its
resignation or removal. Upon the effective date of its resignation or
removal, the Credit Agent shall assign all of its right, title and
security interest in and to all Collateral to its successor, without
recourse, warranty or representation, express or implied.
END OF ARTICLE 12
54
13. MISCELLANEOUS
13.1. NOTICES
Except where telephonic or facsimile notice is expressly authorized by
this Agreement, all communications required or permitted to be given or
made under this Agreement ("Notices") must be in writing and must be sent
by manual delivery, overnight courier or United States mail (postage
prepaid), addressed as follows (or at such other address as may be
designated by it in a Notice to the other):
If to Borrower: Columbia National, Incorporated
0000 Xxxxxxxx Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx, Executive
Vice President
If to Credit Agent: Residential Funding Corporation
0000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx, Director
If to Collateral Agent: U.S. Bank National Association
000 Xxxxxx Xxxxxx South
MPFP 0508
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxx, Operations
Manager
All periods of Notice will be measured from the date of delivery if
manually delivered, from the first Business Day after the date of sending
if sent by overnight courier or from 4 days after the date of mailing if
sent by United States mail, except that Notices to Credit Agent under
Article 2 and Section 4.3 (g) and Notices to the Collateral Agent under
the Collateral Agency Agreement shall be deemed to have been given only
when actually received. Borrower authorizes Credit Agent and the
Collateral Agent to accept Borrower's bailee pledge agreements, Advance
Requests, shipping requests, wire transfer instructions and security
delivery instructions transmitted to Credit Agent or the Collateral Agent
by facsimile or electronic transmission, and those documents, when
transmitted to Credit Agent or the Collateral Agent by facsimile or
electronic transmission, have the same force and effect as the originals.
13.2. REIMBURSEMENT OF EXPENSES; INDEMNITY
Borrower must: (a) pay such documentation production fees as Credit Agent
may require and all out-of-pocket costs and expenses of Credit Agent and
the Collateral Agent, including reasonable fees, service charges and
disbursements of counsel (including allocated costs of internal counsel),
in connection with the amendment, enforcement and administration of this
Agreement, the Notes, and other Loan Documents and the making and
repayment of the Advances, and the payment of interest thereon; (b)
indemnify, pay, and hold harmless Credit Agent, the Collateral Agent and
any other holder of the Notes from and against, all present and future
stamp, documentary and other similar taxes with respect to the foregoing
matters and save Credit Agent, the Collateral Agent and any other holder
of the Notes harmless from and against any and all liabilities with
respect to or resulting from any delay or omission to pay such taxes; and
(c) indemnify, pay and hold harmless Credit Agent, the Collateral Agent,
each Lender, any of their officers, directors, employees or agents and any
subsequent holder of the Notes (collectively called the "Indemnitees")
from and against all liabilities, obligations, losses, damages, penalties,
judgments, suits, costs, expenses and disbursements of any kind or nature
whatsoever (including
55
the reasonable fees and disbursements of counsel of the Indemnitees
(including allocated costs of internal counsel) in connection with any
investigative, administrative or judicial proceeding, whether or not the
Indemnitees have been designated as parties to such proceeding) that may
be imposed upon, incurred by or asserted against such Indemnitees in any
manner relating to or arising out of this Agreement, the Notes, or any
other Loan Document or any of the transactions contemplated hereby or
thereby ("Indemnified Liabilities"), except that Borrower has no
obligation under this Agreement to any Indemnity with respect to
Indemnified Liabilities arising from the gross negligence or willful
misconduct of such Indemnitee. To the extent that the undertaking to
indemnify, pay and hold harmless as set forth in the preceding sentence
may be unenforceable because it is violative of any law or public policy,
Borrower must contribute the maximum portion that it is permitted to pay
and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnitees or any of them. The
agreement of Borrower contained in this Article survives the expiration or
termination of this Agreement and the payment in full of the Notes.
Attorneys' fees and disbursements incurred in enforcing, or on appeal
from, a judgment under this Agreement are recoverable separately from and
in addition to any other amount included in such judgment, and this clause
is intended to be severable from the other provisions of this Agreement
and to survive and not be merged into such judgment.
13.3. INDEMNIFICATION BY THE LENDERS
The Lenders agree to indemnify each of the Credit Agent and the Collateral
Agent in its respective capacity as such (to the extent not reimbursed by
Borrower and without limiting the obligation of Borrower to do so),
ratably according to the respective amounts of their Percentage Shares,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
any kind whatsoever which may at any time (including without limitation at
any time following the payment of the Obligations) be imposed on, incurred
by or asserted against the Credit Agent or the Collateral Agent in any way
relating to or arising out of the Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Credit Agent or the Collateral Agent under or in connection with any of
the foregoing; provided that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
the Credit Agent's or the Collateral Agent's gross negligence or willful
misconduct. The agreements in this Section shall survive the payment of
the Obligations and the termination of this Agreement. Attorneys' fees and
disbursements incurred in enforcing, or on appeal from, a judgment
pursuant hereto shall be recoverable separately from and in addition to
any other amount included in such judgment, and this clause is intended to
be severable from the other provisions of this Agreement and to survive
and not be merged into such judgment.
13.4. FINANCIAL INFORMATION
All financial statements and reports furnished to Credit Agent under this
Agreement must be prepared in accordance with GAAP, applied on a basis
consistent with that applied in preparing the financial statements as at
the end of and for Borrower's most recent fiscal year (except to the
extent otherwise required to conform to good accounting practice).
13.5. TERMS BINDING UPON SUCCESSORS; SURVIVAL OF REPRESENTATIONS
The terms and provisions of this Agreement are binding upon and inure to
the benefit of Borrower, Credit Agent, the Collateral Agent and their
respective successors and assigns. All of Borrower's representations,
warranties, covenants and agreements survive the making of any Advance,
and remain effective for as long as the Commitments are outstanding or
there remain any Obligations to be paid or performed.
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13.6. LENDERS IN INDIVIDUAL CAPACITY
The Lenders and their Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with Borrowers, any
Subsidiary and/or the Parent regardless of the capacity of Lenders
hereunder. The Lenders may disclose to the other Lenders information
regarding other relationships which they may have Borrower and Borrower
hereby consents to these disclosures.
13.7. ASSIGNMENT AND PARTICIPATIONS
This Agreement and the Obligations of Borrower may not be assigned by
Borrower. Any Lender may, subject to the limitations set forth below,
assign or transfer, in whole or in part, this Agreement and the other Loan
Documents and further may sell participations in all or any part of its
Advances or Maximum Commitment or any other interest in the Obligations or
any of its obligations hereunder to another Person. In the case of an
assignment, upon notice thereof by such Lender to Borrower and consent of
the Credit Agent, the assignee shall have, to the extent of such
assignment (unless otherwise provided thereby), the same rights and
benefits as it would have if it were a "Lender" hereunder, and, if the
assignee has expressly assumed, for the benefit of Borrower, such Lender's
obligations hereunder, such Lender shall be relieved of its obligations
hereunder to the extent of such assignment and assumption, provided that
the Credit Agent shall have no obligation to consent to there being more
than a total of 10 Lenders (a Participant is not a Lender). In the case of
a participation, the participating Person's (a "Participant") rights
against the Lender from whom it has purchased such participation in
respect of such participation are those set forth in the agreement
executed by such Lender in favor of the Participant relating thereto. Such
Lender shall remain solely responsible to the other parties hereto for the
performance of such Lender's obligations under the Loan Documents, whether
or not such Lender shall remain the holder of any Note. Such Lender shall
retain all voting rights with respect to such Note, the Advances hereunder
and the Lender's Maximum Commitment. Borrower, the Credit Agent and the
other Lenders shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under the Loan
Documents. Without limiting any Lender's exclusive right to collect and
enforce the Obligations owed to it, Borrower agrees that each
participation will give rise to a debtor-creditor relationship between
Borrower and the Participant, and Borrower authorizes each Participant,
upon the occurrence of an Event of Default, to proceed directly by right
of setoff, banker's lien, or otherwise, against any assets of Borrower
that may be held by that Participant. Nothing contained herein shall in
any manner or to any extent affect the right of any Lender to pledge or
assign its Notes and interests in this Agreement to any Federal Reserve
Bank pursuant to applicable laws or regulations, or to assign its Notes
and its right to receive and retain payments on its Notes provided such
Lender remains primarily and directly liable pursuant to the terms and
conditions of this Agreement to keep, observe and perform all of its
obligations under this Agreement, and all such assignments shall be
treated, considered and administered as a sale of a participation and not
as an assignment and shall be subject to and governed by the provisions of
this Section. Any Lender may furnish any information concerning Borrower
in the possession of such Lender from time to time to Affiliates of such
Lender and to assignees and Participants (including prospective assignees
and Participants) and Borrower hereby consents to the provision of such
information.
13.8. AMENDMENTS
13.8(a) This Agreement may not be amended or terms or provisions hereof
waived unless such amendment or waiver is in writing and signed by
the Majority Lenders, the Credit Agent and Borrower; provided,
however, that without the prior written consent of 100% of the
Lenders, no amendment or waiver shall: (1) waive or amend any term
or provision of Sections 8.4, 8.14 or 8.15 hereof or the
definition of any type of Collateral or the provisions of Section
5.2 hereof, (2) reduce the principal of, or rate of interest or
fees on,
57
the Advances or any Lender's Commitments, (3) modify the
Warehousing Credit Limit or the Term Loan Credit Limit, (4) modify
any Lender's Percentage Share of the Warehousing Credit Limit or
the Term Loan Credit Limit, (5) modify the definition of "Majority
Lenders," or of the number or percentage of Lenders that are
required to take action under the Loan Documents, (6) extend the
Term Loan Commitment Termination Date, the Term Loan Maturity Date
or the Warehousing Maturity Date, (7) release any material portion
of the Collateral, except as expressly contemplated by the Loan
Documents or in connection with a sale of such Collateral
permitted hereunder, (8) amend Exhibit H or Exhibit I, or (9)
amend this Section. It is expressly agreed and understood that the
failure by the Majority Lenders to elect to accelerate amounts
outstanding hereunder or to terminate the obligation of the
Lenders to make Advances hereunder shall not constitute an
amendment or waiver of any term or provision of this Agreement.
13.8(b) Borrower hereby agrees that it shall, upon requesting any
amendment of this Agreement or any other Loan Document or any
waiver of any material term or provision of this Agreement or any
other Loan Document (except an extension of the Maturity Date),
pay at the time of such request a modification fee (1) to the
Credit Agent in a minimum amount of $2,500 or such greater amount
as may be notified to Borrower by the Credit Agent in its sole
discretion and (2) to each Lender (except any Lender which becomes
party to the Agreement by virtue of such amendment) in a minimum
amount of $1,000 or such greater amount as may be notified to
Borrower by the Majority Lenders, acting through the Credit Agent,
in their sole discretion. The payment of such modification fees
shall be in addition to and shall not limit Borrower's
reimbursement obligations pursuant to Section 13.2(a) hereof, and
any other fee or charge imposed by the Credit Agent or the Lenders
as a condition to any amendment.
13.9. GOVERNING LAW
This Agreement and the other Loan Documents are governed by the laws of
the State of Minnesota, without reference to its principles of conflicts
of laws.
13.10. RELATIONSHIP OF THE PARTIES
This Agreement provides for the making and repayment of Advances by
Lenders (in their capacity as lenders) and Borrower (in its capacity as a
borrower), for the payment of interest on those Advances and for the
payment of certain fees by Borrower to Lenders and the Credit Agent and
the Collateral Agent. The relationship between Lenders and Borrower is
limited to that of creditor and secured party on the part of Lenders, the
Credit Agent and the Collateral Agent and of borrower and debtor on the
part of Borrower. The provisions of this Agreement and the other Loan
Documents for compliance with financial covenants and the delivery of
financial statements and other operating reports are intended solely for
the benefit of Lenders to protect its interest as a creditor and lender.
Nothing in this Agreement creates or may be construed as permitting or
obligating any Lender to act as a financial or business advisor or
consultant to Borrower, as permitting or obligating any Lender to control
Borrower or to conduct Borrower's operations, as creating any fiduciary
obligation on the part of Lenders to Borrower, or as creating any joint
venture, agency, or other relationship between Lenders and Borrower other
than as explicitly and specifically stated in the Loan Documents. Borrower
acknowledges that it has had the opportunity to obtain the advice of
experienced counsel of its own choosing in connection with the negotiation
and execution of the Loan Documents and to obtain the advice of that
counsel with respect to all matters contained in the Loan Documents,
including the waiver of jury trial contained in Section 13.16. Borrower
further acknowledges that it is experienced with respect to financial and
credit matters and has made its own independent decisions to apply to
Lenders for credit and to execute and deliver this Agreement.
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13.11. SEVERABILITY
If any provision of this Agreement is declared to be illegal or
unenforceable in any respect, that provision is null and void and of no
force and effect to the extent of the illegality or unenforceability, and
does not affect the validity or enforceability of any other provision of
the Agreement.
13.12. CONSENT TO CREDIT REFERENCES
Borrower consents to the disclosure of information regarding Borrower and
its Subsidiaries and their relationships with Lenders to Persons making
credit inquiries to Credit Agent. This consent is revocable by Borrower at
any time upon Notice to Lenders as provided in Section 13.1.
13.13. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which will be deemed an original, but all of which together constitute but
one and the same instrument.
13.14. ENTIRE AGREEMENT
This Agreement, the Notes and the other Loan Documents represent the final
agreement among the parties with respect to their subject matter, and may
not be contradicted by evidence of prior or contemporaneous oral
agreements among the parties. There are no oral agreements among the
parties with respect to the subject matter of this Agreement, the Notes
and the other Loan Documents.
13.15. CONSENT TO JURISDICTION
AT THE OPTION OF CREDIT AGENT, THIS AGREEMENT, THE NOTES AND THE OTHER
LOAN DOCUMENTS MAY BE ENFORCED IN ANY STATE OR FEDERAL COURT WITHIN THE
STATE OF MINNESOTA. BORROWER CONSENTS TO THE JURISDICTION AND VENUE OF
THOSE COURTS, AND WAIVES ANY OBJECTION TO THE JURISDICTION OR VENUE OF ANY
OF THOSE COURTS, INCLUDING THE OBJECTION THAT VENUE IN THOSE COURTS IS NOT
CONVENIENT. ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE COMMENCED AND
INSTITUTED BY SERVICE OF PROCESS UPON BORROWER BY FIRST CLASS REGISTERED
OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO BORROWER AT ITS
ADDRESS LAST KNOWN TO CREDIT AGENT. BORROWER'S CONSENT AND AGREEMENT UNDER
THIS SECTION DOES NOT AFFECT CREDIT AGENT'S RIGHT TO ACCOMPLISH SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWER IN ANY OTHER
JURISDICTION OR COURT. IN THE EVENT BORROWER COMMENCES ANY ACTION IN
ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING
DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS, CREDIT AGENT AT ITS OPTION MAY HAVE THE CASE
TRANSFERRED TO A STATE OR FEDERAL COURT WITHIN THE STATE OF MINNESOTA OR,
IF A TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, MAY HAVE
BORROWER'S ACTION DISMISSED WITHOUT PREJUDICE.
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13.16. WAIVER OF JURY TRIAL
BORROWER, EACH OF THE LENDERS AND CREDIT AGENT EACH COVENANTS AND AGREES
NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND
FULLY WAIVES ANY RIGHT TO TRIAL BY JURY TO THE EXTENT THAT ANY SUCH RIGHT
NOW EXISTS OR HEREAFTER ARISES. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
SEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY, BY BORROWER AND CREDIT AGENT,
AND IS INTENDED TO ENCOMPASS EACH INSTANCE AND EACH ISSUE FOR WHICH THE
RIGHT TO TRIAL BY JURY WOULD OTHERWISE APPLY. CREDIT AGENT, EACH OF THE
LENDERS AND BORROWER ARE EACH AUTHORIZED AND DIRECTED TO SUBMIT THIS
AGREEMENT TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE
PARTIES TO THIS AGREEMENT AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF THE
RIGHT TO JURY TRIAL. FURTHER, BORROWER, EACH OF THE LENDERS AND CREDIT
AGENT EACH CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE OTHER PARTY,
INCLUDING THE OTHER PARTY'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, TO ANY OF ITS REPRESENTATIVES OR AGENTS THAT THE OTHER PARTY
WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO TRIAL BY JURY.
END OF ARTICLE 13
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14. DEFINITIONS
14.1. DEFINED TERMS
Capitalized terms defined below or elsewhere in this Agreement have the
following meanings or, as applicable, the meanings given to those terms in
Exhibits to this Agreement:
"Additional Lender" means a Person admitted as a Lender under the
Agreement by the terms of an amendment hereto.
"Adjusted Tangible Leverage Ratio" means the ratio of a Person's (and, if
applicable, the Person's Subsidiaries, on a consolidated basis) Debt to
Adjusted Tangible Net Worth. For purposes of calculating a Person's
Leverage Ratio, Debt arising under Hedging Arrangements relating to
Borrower's Servicing Portfolio, to the extent of assets arising under
those Hedging Arrangements, Debt arising under Gestation Agreements
covering Agency Securities or Eligible Mortgage Pools and Debt arising
under Investment Line Agreements, to the extent of the Investments
securing the same, may be excluded from a Person's Debt.
"Adjusted Tangible Net Worth" means a Person's Tangible Net Worth, minus
capitalized excess servicing fees and capitalized servicing rights, plus
(a) the most recent Appraisal Value of the Eligible Servicing Portfolio
(adjusted to reflect additions to and deletions from the Eligible
Servicing Portfolio since the date of the relevant Appraisal) and (b)
deferred taxes arising from capitalized excess servicing fees and
capitalized servicing rights.
"Advance" means a Warehousing Advance or a Term Loan Advance.
"Advance Rate" means, with respect to any Eligible Loan, the Advance Rate
set forth in Exhibit H for that type of Eligible Loan.
"Advance Request" means a Warehousing Advance Request or a Term Loan
Advance Request.
"Affiliate" has the meaning set forth in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act.
"Agency Security" means a Mortgage-backed Security issued or guaranteed by
Xxxxxx Xxx, Xxxxxxx Mac or Xxxxxx Mae.
"Agreement" means this Warehousing Credit, Term Loan and Security
Agreement, either as originally executed or as it may be amended,
restated, renewed or replaced.
"Appraisal" means a certificate of independent certified public
accountants or independent financial consultants of recognized standing
selected by Borrower and satisfactory to Credit Agent as to the Appraisal
Value of the Servicing Contracts included in the Eligible Servicing
Portfolio. An Appraisal must evaluate Eligible Servicing Portfolio based
upon reasonably determined categories of the Mortgage Loans and must give
effect to any subservicing agreements to which any Mortgage Loan is or
will be subject. Each Appraisal must be in form, substance and detail
satisfactory to Credit Agent.
"Appraisal Value" means, as of any date of determination, the fair market
value of Borrower's right to service Mortgage Loans under the Servicing
Contracts included in the Eligible Servicing Portfolio. Appraisal Value
must be calculated as a percentage of the unpaid principal amount of each
category of Mortgage Loan serviced under those Servicing Contracts.
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"Appraised Property Value" means with respect to an interest in real
property, the then current fair market value of the real property and any
improvements on it as of recent date determined in accordance with Title
XI of FIRREA by a qualified appraiser who is a member of the American
Institute of Real Estate Appraisers or other group of professional
appraisers.
"Approved Custodian" means a pool custodian or other Person that Credit
Agent deems acceptable, in its sole discretion, to hold Mortgage Loans for
inclusion in a Mortgage Pool or to hold Mortgage Loans as agent for an
Investor that has issued a Purchase Commitment for those Mortgage Loans.
The Approved Custodians as of the Closing Date are listed on Exhibit P
hereto. Credit Agent may at any time, on 3 Business Days' Notice to
Borrower and Collateral Agent, add or remove any Person as an Approved
Custodian.
"Audited Statement Date" means the date of Borrower's most recent audited
financial statements (and, if applicable, Borrower's Subsidiaries, on a
consolidated basis) delivered to Credit Agent under this Agreement.
"Balance Deficiency Fee" has the meaning set forth in Section 4.1(c).
"Balance Funded Agreement" has the meaning set forth in Section 4.1(c).
"Balance Funded Portion" has the meaning set forth in Section 4.1(c).
"Bank One" means BANK ONE, NATIONAL ASSOCIATION, Chicago, Illinois, or any
successor bank.
"Book Net Worth" means with respect to any Person at any date, the excess
of total assets over total liabilities of such Person on such date, each
to be determined in accordance with GAAP consistent with those applied in
the preparation of the financial statements referred to in Section
6.1(a)(6) hereof.
"Borrower" has the meaning set forth in the first paragraph of this
Agreement.
"Business Day" means any day other than Saturday, Sunday or any other day
on which national banking associations are closed for business.
"Calendar Quarter" means the 3 month period beginning on each January 1,
April 1, July 1 or October 1.
"Cash and Cash Equivalents" means, with respect to any person at any date,
the sum of the following unrestricted and unencumbered assets of such
person on such date: cash, funds on deposit in any Bank located in the
United States, investment grade commercial paper, money market funds, and
high grade marketable securities with a maturity of 270 days or less, in
all cases that qualify as "cash or cash equivalents" on a balance sheet of
such Person prepared in accordance with GAAP.
"Cash Collateral Account" means a demand deposit account maintained at the
Funding Bank in Credit Agent's name and designated for receipt of the
proceeds of the sale or other disposition of Collateral.
"Closing Date" has the meaning set forth in the Recitals to this
Agreement.
"Collateral" has the meaning set forth in Section 5.1.
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"Collateral Agency Agreement" means the Collateral Agency Agreement of
even date herewith among Borrower, Credit Agent and Collateral Agent, as
the same may be amended, supplemented, restated or otherwise modified from
time to time.
"Collateral Agent" means U.S. Bank, in its capacity as Collateral Agent
for the Lenders and the Credit Agent, and any successor pursuant to
Section 12.9.
"Collateral Documents" means, with respect to each Mortgage Loan, (a) the
Required Documents, as defined in the Collateral Agency Agreement, (b) as
applicable, the original lender's ALTA Policy of Title Insurance or its
equivalent, documents evidencing the FHA Commitment to Insure, the VA
Guaranty or private mortgage insurance, the appraisal, the Regulation Z
statement, the environmental assessment, the engineering report,
certificates of casualty or hazard insurance, credit information on the
maker of the Mortgage Note, the HUD-1 or corresponding purchase advice,
(c) any other document required to be delivered to the Collateral Agent
pursuant to the Collateral Agency Agreement, and (d) any other document
that is customarily desired for inspection or transfer incidental to the
purchase of any Mortgage Note by an Investor or that is customarily
executed by the seller of a Mortgage Note to an Investor.
"Committed Purchase Price" means for an Eligible Loan (a) the dollar price
as set forth in the Purchase Commitment or, if the price is not expressed
in dollars, the product of the Mortgage Note Amount multiplied by the
price (expressed as a percentage) as set forth in a Purchase Commitment
for the Eligible Loan, or (b) if the Eligible Loan is to be used to back
an Agency Security, the price (expressed as a percentage) as set forth in
a Purchase Commitment for the Agency Security.
"Commitments" means the Warehousing Commitments and the Term Loan
Commitments.
"Compliance Certificate" means a certificate executed on behalf of
Borrower by its chief financial officer or its treasurer or by another
officer approved by Credit Agent, substantially in the form of Exhibit E.
"Co-op Loans" means a loan evidenced by a Co-op Note and committed for
purchase by an Investor.
"Credit Agent" means RFC, in its capacity as credit agent for the Lenders
hereunder, and any successor pursuant to Section 12.9 hereof.
"Credit Limit" means the Warehousing Credit Limit or the Term Loan Credit
Limit.
"Debt" means (a) all indebtedness or other obligations of a Person that,
in accordance with GAAP, would be included in determining total
liabilities as shown on the liabilities side of a balance sheet of the
Person on the date of determination, plus (b) all indebtedness or other
obligations of the Person for borrowed money or for the deferred purchase
price of property or services. For purposes of calculating a Person's
Debt, Subordinated Debt not due within 1 year of that date and deferred
taxes arising from capitalized excess servicing fees and capitalized
servicing rights may be excluded from a Person's indebtedness.
"Default" means the occurrence of any event or existence of any condition
that, but for the giving of Notice or the lapse of time, would constitute
an Event of Default.
"Default Rate" means, for any Advance, the Interest Rate applicable to
that Advance plus 4% per annum. If no Interest Rate is applicable to an
Advance, "Default Rate" means, for that Advance, the highest Interest Rate
then applicable to any outstanding Advance plus 4% per annum.
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"Deposit Balances" means funds of or maintained by Borrower and its
Subsidiaries in accounts at a Lender or a Designated Bank.
"Depository Benefit" means the compensation received by Credit Agent,
directly or indirectly, as a result of Borrower's maintenance of Deposit
Balances with a Designated Bank.
"Designated Bank" means any bank designated by Credit Agent as a
Designated Bank, but only for as long as Credit Agent has an agreement
under which Credit Agent receives Depository Benefits from that bank.
"Designated Bank Charges" means any fees, interest or other charges that
would otherwise be payable to a Designated Bank in connection with Deposit
Balances maintained at the Designated Bank, including deposit insurance
premiums, service charges and any other charges that may be imposed by
governmental authorities from time to time.
"Eligible Loan" means a Mortgage Loan or a Co-op Loan that satisfies the
conditions and requirements set forth in Exhibit H.
"Eligible Mortgage Pool" means a Mortgage Pool for which (a) an Approved
Custodian has issued its initial certification, (b) there exists a
Purchase Commitment covering the Agency Security to be issued on the basis
of that certification and (c) the Agency Security will be delivered to
Credit Agent.
"Eligible Servicing Portfolio" means the portion of Borrower's Servicing
Portfolio consisting of rights to service Single Family Mortgage Loans;
provided, however, not included are the principal balance of Mortgage
Loans included in that Servicing Portfolio (a) with respect to which the
Person is obligated to repurchase or indemnify the holder of the Mortgage
Loans as a result of defaults on the Mortgage Loans at any time during the
term of such Mortgage Loans, (b) the Servicing Contracts for which are not
owned by the Person free and clear of all Liens (other than in favor of
Credit Agent) or (c) that are serviced by Borrower for others under
subservicing arrangements.
"ERISA" means the Employee Retirement Income Security Act of 1974 and all
rules and regulations promulgated under that statute, as amended, and any
successor statute, rules, and regulations.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is a member of a group of which Borrower is a member
and that is treated as a single employer under Section 414 of the Internal
Revenue Code.
"Event of Default" means any of the conditions or events set forth in
Section 11.1.
"Exchange Act" means the Securities Exchange Act of 1934 and all rules and
regulations promulgated under that statute, as amended, and any successor
statute, rules, and regulations.
"Existing Agreements" means, collectively, the Second Amended and Restated
Secured Mortgage Warehousing Credit Agreement, the Third Amended and
Restated Secured Working Capital Credit Agreement, and the Amended and
Restated Secured Guaranteed Revolving/Term Credit Agreement, each dated as
of May 4, 2000, among Borrower, the lenders party to each such credit
agreement, The Bank of New York, as Agent, and RFC, U.S. Bank and
AllFirst, as Co-Agents, as amended, supplemented or otherwise modified.
"Fair Market Value" means, at any time for an Eligible Loan or a related
Agency Security (if the Eligible Loan is to be used to back an Agency
Security) as of any date of determination, (a) the Committed Purchase
Price if the Eligible Loan is covered by a Purchase Commitment from
64
Xxxxxx Xxx or Xxxxxxx Mac or the Eligible Loan is to be exchanged for an
Agency Security and that Agency Security is covered by a Purchase
Commitment from an Investor, or (b) otherwise, the market price for such
Eligible Loan or Agency Security, determined by Credit Agent based on
market data for similar Mortgage Loans or Agency Securities and such other
criteria as Credit Agent deems appropriate in its sole discretion.
"Xxxxxx Mae" means Xxxxxx Xxx, a corporation created under the laws of the
United States, and any successor corporation or other entity.
"Federal Funds Rate" means, for each week, the effective Federal Funds
Rate (per annum) of interest in effect on the first Business Day of that
week, as published by Bloomberg L.P. If the Federal Funds Rate is not
published by Bloomberg L.P. on the first Business Day of any week, then
the term "Federal Funds Rate" means the highest Federal Funds Rate
published in The Wall Street Journal in its regular column entitled "Money
Rates" on the first Business Day of that week.
"FHA" means the Federal Housing Administration and any successor agency or
other entity.
"FICA" means the Federal Insurance Contributions Act, as amended, and any
successor statute.
"FIRREA" means the Financial Institutions Reform, Recovery and Enforcement
Act of 1989 and all rules and regulations promulgated under that statute,
as amended, and any successor statute, rules, and regulations.
"First Mortgage" means a Mortgage that constitutes a first Lien on the
real property covered by the Mortgage.
"First Mortgage Loan" means a Mortgage Loan secured by a First Mortgage.
"Xxxxxxx Mac" means Xxxxxxx Mac, a corporation created under the laws of
the United States, and any successor corporation or other entity.
"Funding Bank" means Bank One or any other bank designated by Credit Agent
as a Funding Bank.
"Funding Bank Agreement" means a letter agreement on the form prescribed
by Credit Agent between the Funding Bank and Borrower authorizing Credit
Agent's access to the Operating Account.
"GAAP" means generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and in statements and
pronouncements of the Financial Accounting Standards Board, or in
opinions, statements or pronouncements of any other entity approved by a
significant segment of the accounting profession, which are applicable to
the circumstances as of the date of determination.
"Gestation Agreement" means an agreement under which Borrower agrees to
sell or finance (a) a Mortgage Loan prior to the date of purchase by an
Investor or (b) a Mortgage Pool prior to the date a Mortgage-backed
Security backed by the Mortgage Pool is issued.
"Xxxxxx Mae" means the Government National Mortgage Association, an agency
of the United States government, and any successor agency or other entity.
"GMAC-RFC Client Guide" means the applicable loan purchase guide issued by
Credit Agent, as the same may be amended or replaced.
65
"Government Mortgage Loan" means a closed-end First Mortgage Loan that is
either HUD/FHA insured (other than a Title I Mortgage Loan) or VA
guaranteed.
"Hedging Arrangements" means, with respect to any Person, any agreements
or other arrangements (including interest rate swap agreements, interest
rate cap agreements and forward sale agreements) entered into to protect
that Person against changes in interest rates or the market value of
assets.
"HUD" means the Department of Housing and Urban Development, and any
successor agency or other entity.
"Indemnified Liabilities" has the meaning set forth in Section 13.2.
"Indemnitees" has the meaning set forth in Section 13.2.
"Interest Rate" means, for any Advance, the floating rate of interest
specified for that Advance in Exhibit H or Exhibit I, as applicable.
"Interim Statement Date" means the date of the most recent unaudited
financial statements of Borrower (and, if applicable, Borrower's
Subsidiaries, on a consolidated basis) delivered to Credit Agent under
this Agreement.
"Internal Revenue Code" means the Internal Revenue Code of 1986, Title 26
of the United States Code, the regulations, rulings and interpretations
issued under those statutory provisions and any subsequent federal income
tax law or laws, as amended.
"Investment" means any direct or indirect purchase or other acquisition by
any Person of, or a beneficial interest in, stock or other securities of
any other Person, or any direct or indirect loan, advance (other than
advances to employees for moving and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business) or capital
contribution by that Person to any other Person, including all Debt and
accounts receivable from that Person which are not current assets or did
not arise from sales to that other Person in the ordinary course of
business.
"Investment Line Agreement" means an agreement under which Borrower agrees
(a) to borrow funds from any Lender or other Person reasonably
satisfactory to the Credit Agent, (b) to invest such funds in investments
of the type described in Section 9.4 (a), (b), (c) and (e), and (c) to
pledge such Investments to such Lender or other Person to secure such
loans.
"Investor" means Xxxxxx Xxx, Xxxxxxx Mac or a financially responsible
private institution that Credit Agent deems acceptable, in its sole
discretion, to issue Purchase Commitments with respect to a particular
category of Eligible Loans. The Investors as of the Closing Date are
listed on Exhibit P hereto. Credit Agent may at any time, on 3 Business
Days' Notice to Borrower and Collateral Agent, add or remove any Person as
an Investor.
"Lender" has the meaning set forth in the first paragraph of this
Agreement.
"LIBOR" means, for each week, the rate of interest per annum that is equal
to the arithmetic mean of the U.S. Dollar London Interbank Offered Rates
for 1 month periods of certain U.S. banks as of 11:00 a.m. (London time)
on the first Business Day of each week on which the London Interbank
market is open, as published by Bloomberg L.P. If those interest rates are
not offered or published for any period, then during that period LIBOR
means the London Interbank Offered Rate for 1 month periods as published
in The Wall Street Journal in its regular column entitled "Money Rates" on
the first Business Day of each week on which the London Interbank market
is open.
66
"Lien" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other
title retention agreement, any lease in the nature of such an agreement
and any agreement to give any security interest).
"Loan Documents" means this Agreement, the Notes, the Collateral Agency
Agreement, any agreement of Borrower relating to Subordinated Debt, and
each other document, instrument or agreement executed by Borrower in
connection with any of those documents, instruments and agreements, as
originally executed or as any of the same may be amended, restated,
renewed or replaced.
"Loan-to-Value Ratio" means, for any Mortgage Loan, the ratio of (a) the
maximum amount that may be borrowed under the Mortgage Loan (whether or
not borrowed) at the time of origination, plus the Mortgage Note Amounts
of all other Mortgage Loans secured by the related Property, to (b) the
Appraised Property Value of the related Property.
"Manufactured Home" means a structure that is built on a permanent chassis
(steel frame) with the wheel assembly necessary for transportation in one
or more sections to a permanent site or semi-permanent site.
"Majority Lenders" means at any date the Lenders holding not less than 51%
of the aggregate Credit Limit. Notwithstanding the foregoing, if there are
only 2 Lenders the term "Majority Lenders" shall, except for purposes of
Section 11.2(c), include both of the Lenders.
"Margin Stock" has the meaning assigned to that term in Regulation U of
the Board of Governors of the Federal Reserve System, as amended.
"Miscellaneous Charges" means miscellaneous charges and expenses incurred
by or on behalf of Credit Agent or the Collateral Agent for the handling
and administration of Advances and Collateral, including costs for UCC,
tax lien and judgment searches conducted by Credit Agent, filing fees,
charges for wire transfers and check processing charges, charges for
security delivery fees, charges for overnight delivery of Collateral to
Investors, the Funding Bank's service fees and overdraft charges and
Designated Bank Charges.
"Mortgage" means a mortgage or deed of trust on real property that is
improved and substantially completed (including real property to which a
Manufactured Home has been affixed in a manner such that the Lien of a
mortgage or deed of trust would attach to the Manufactured Home under
applicable real property law).
"Mortgage-backed Securities" means securities that are secured or
otherwise backed by Mortgage Loans.
"Mortgage Loan" means any loan evidenced by a Mortgage Note and secured by
a Mortgage.
"Mortgage Note" means a promissory note secured by one or more Mortgages.
"Mortgage Note Amount" means, as of any date of determination, the then
outstanding and unpaid principal amount of a Mortgage Note (whether or not
an additional amount is available to be drawn under that Mortgage Note).
"Mortgage Pool" means a pool of one or more Pledged Loans on the basis of
which a Mortgage-backed Security is to be issued.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA, to which either Borrower or any ERISA Affiliate of
Borrower has any obligation with respect to its employees.
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"Net Aggregate Shortfall" means on any given date for which a regularly
scheduled pass-through payment is required to be made by Borrower to an
Investor, the excess of all (i) principal and interest payments due the
Investor in such payment over (ii) all principal and interest received for
such monthly payment on the related Mortgage Loans.
"Notes" means the Warehousing Notes, Swingline Note, Sublimit Notes and
the Term Loan Notes.
"Notices" has the meaning set forth in Section 13.1.
"Obligations" means any and all indebtedness, obligations and liabilities
of Borrower to Lenders, Credit Agent and Collateral Agent (whether now
existing or arising after the date of this Agreement, voluntary or
involuntary, joint or several, direct or indirect, absolute or contingent,
liquidated or unliquidated, or decreased or extinguished and later
increased and however created or incurred) under the Loan Documents.
"Operating Account" means a demand deposit account maintained at the
Funding Bank in Borrower's name.
"Parent" means Columbia National Holdings, Inc., a Delaware corporation.
"Participant" has the meaning set forth in Section 13.7.
"Percentage Share" means, for any Lender at any date, that percentage
which such Lender's Warehousing Commitment Amount bears to the Warehousing
Credit Limit or the Term Loan Commitment Amount bears to the Term Loan
Credit Limit.
"Person" means and includes natural persons, corporations, limited
liability companies, limited liability partnerships, limited liability
limited partnerships, limited partnerships, general partnerships, joint
stock companies, joint ventures, associations, companies, trusts, banks,
trust companies, land trusts, business trusts or other organizations,
whether or not legal entities, and governments and agencies and political
subdivisions of those governments.
"Plan" means each employee benefit plan (whether in existence on the
Closing Date or established after that date), as that term is defined in
Section 3 of ERISA, maintained for the benefit of directors, officers or
employees of Borrower or any ERISA Affiliate.
"Pledged Assets" means, collectively, Pledged Loans, Pledged Securities,
and Other Eligible Assets.
"Pledged Hedging Accounts" has the meaning set forth in Section 5.1 (k).
"Pledged Hedging Arrangements" has the meaning set forth in Section 5.1
(k).
"Pledged Loans" has the meaning set forth in Section 5.1 (b).
"Pledged Securities" has the meaning set forth in Section 5.1 (c).
"Pledged Servicing Contracts" has the meaning set forth in Section 5.1(e).
"Prohibited Transaction" has the meanings set forth for such term in
Section 4975 of the Internal Revenue Code and Section 406 of ERISA.
68
"Purchase Commitment" means a written commitment, in form and substance
satisfactory to Credit Agent, issued in favor of Borrower by an Investor
under which that Investor commits to purchase Mortgage Loans or
Mortgage-backed Securities.
"Receivables" has the meaning set forth in Section 5.1 (h).
"Release Amount" has the meaning set forth in Section 5.2 (e).
"RFC" means Residential Funding Corporation, a Delaware corporation, and
any successor thereto.
"Second Mortgage" means a Mortgage that constitutes a second Lien on the
property covered by the Mortgage.
"Second Mortgage Loan" means a Mortgage Loan secured by a Second Mortgage.
"Servicing Acquisition" means a transaction in which Borrower acquires
Servicing Contracts in a bulk purchase.
"Servicing Collateral Value" means as of the date of determination, 65% of
the most recent Appraisal Value of the Eligible Servicing Portfolio,
adjusted to reflect additions to and deletions from the Eligible Servicing
Portfolio since the date of such Appraisal.
"Servicing Contract" means, with respect to any Person, the arrangement,
whether or not in writing, under which that Person has the right to
service Mortgage Loans.
"Servicing Delinquencies and Foreclosures" means the sum of (a) the
aggregate outstanding principal balances of Mortgage Loans included in
Borrower's Eligible Servicing Portfolio which are 30 days or more past due
(other than such as are in the process of foreclosure) and (b) Servicing
Foreclosures.
"Servicing Foreclosures" means the aggregate outstanding principal amount
of Mortgage Loans included in Borrower's Eligible Servicing Portfolio
which are in the process of foreclosure.
"Servicing Portfolio" means, as to any Person, the unpaid principal
balance of Mortgage Loans serviced by that Person under Servicing
Contracts, minus the principal balance of all Mortgage Loans that are
serviced by that Person for others under subservicing arrangements.
"Settlement Account" has the meaning set forth in the Collateral Agency
Agreement.
"Shipped Period" means the maximum number of days specified in Exhibit H
during which a Warehousing Advance may remain outstanding against a
Pledged Loan that has been sent to (a) an Investor or a custodian for an
Investor for examination and purchase under a Purchase Commitment, (b) an
Approved Custodian for examination and inclusion in an Eligible Mortgage
Pool or (c) a pool custodian for examination and inclusion in a Mortgage
Pool.
"Single Family Mortgage Loan" means a Mortgage Loan secured by a Mortgage
covering improved real property containing one to four family residences.
"Statement Date" means the Audited Statement Date or the Interim Statement
Date, as applicable.
"Sublimit" means the aggregate amount of Warehousing Advances (expressed
as a dollar amount or as a percentage of the Warehousing Commitment
Amount) that is permitted to be outstanding at any one time against a
specific type of Eligible Loan.
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"Subordinated Debt" means (a) all indebtedness of Borrower for borrowed
money that is effectively subordinated in right of payment to all other
present and future Obligations either (1) under a Subordination of Debt
Agreement on the form prescribed by Credit Agent or (2) otherwise on terms
acceptable to Credit Agent, and (b) solely for purposes of Section 9.17,
all indebtedness of Borrower that is required to be subordinated by
Sections 6.1 (b) and 8.11.
"Subsidiary" means any corporation, partnership, association or other
business entity in which more than 50% of the shares of stock or other
ownership interests having voting power for the election of directors,
managers, trustees or other Persons performing similar functions is at the
time owned or controlled by any Person either directly or indirectly
through one or more Subsidiaries of that Person.
"Swingline Advance" means an Advance made by RFC under Section 1.3.
"Swingline Facility Amount" means the maximum amount of Swingline Advances
to be made by RFC from time to time, but not to exceed $45,000,000.
"Swingline Note" has the meaning set forth in Section 1.4.
"Tangible Net Worth" means the excess of a Person's (and, if applicable,
the Person's Subsidiaries, on a consolidated basis) total assets over
total liabilities as of the date of determination, each determined in
accordance with GAAP applied in a manner consistent with the financial
statements referred to in Section 6.1 (a)(6), plus that portion of
Subordinated Debt not due within 1 year of that date. For purposes of
calculating a Person's Tangible Net Worth, advances or loans to
shareholders, directors, officers, employees or Affiliates, investments in
Affiliates, assets pledged to secure any liabilities not included in the
Debt of the Person, intangible assets, those other assets that would be
deemed by HUD to be non-acceptable in calculating adjusted net worth in
accordance with its requirements in effect as of that date, as those
requirements appear "Consolidated Audit Guide for Audits of HUD Programs,"
and other assets Credit Agent deems unacceptable, in its sole discretion,
must be excluded from a Person's total assets.
"Term Loan Advance" means a disbursement by a Lender under its Term Loan
Commitment.
"Term Loan Commitment" means the obligation of each Lender to make Term
Loan Advances to Borrower under Section 1.5.
"Term Loan Commitment Amount" means, for any Lender at any date, that
dollar amount designated as such opposite such Lender's name on Exhibit L
as its Term Loan Commitment Amount, as the same may be amended from time
to time in accordance with this Agreement.
"Term Loan Commitment Termination Date" has the meaning set forth in
Section 1.6.
"Term Loan Credit Limit" means the sum of the Term Loan Commitment Amounts
of all the Lenders. The initial Term Loan Credit Limit is $90,000,000.
"Term Loan Maturity Date" means the earlier of: (a) one year after the
Term Loan Commitment Termination Date, (b) the Warehousing Maturity Date,
and (c) the date the Term Loan Advances become due and payable under
Section 11.2.
"Term Loan Note" has the meaning set forth in Section 1.7.
"Third Party Originated Loan" means a Mortgage Loan originated and funded
by a third party (other than with funds provided by Borrower at closing to
purchase the Mortgage Loan) and subsequently purchased by Borrower.
70
"Trust Receipt" means a trust receipt in a form approved by and under
which Credit Agent may deliver any document relating to the Collateral to
Borrower for correction or completion.
"Warehouse Period" means, for any Eligible Loan, the maximum number of
days a Warehousing Advance against that type of Eligible Loan may remain
outstanding as set forth in Exhibit H.
"Warehousing Advance" means a disbursement by a Lender under its
Warehousing Commitment.
"Warehousing Advance Request" has the meaning set forth in Section 3.1.
"Warehousing Commitment" means the obligation of each Lender to make
Warehousing Advances to Borrower under Section 1.1.
"Warehousing Commitment Amount" means, for any Lender at any date, that
dollar amount designated as such opposite such Lender's name on Exhibit K
as its Warehousing Commitment Amount, as the same may be amended from time
to time in accordance with this Agreement.
"Warehousing Commitment Fee" has the meaning set forth in Section4.5.
"Warehousing Credit Limit" means the sum of the Warehousing Commitment
Amounts of all of the Lenders. The initial Warehousing Credit Limit is
$250,000,000.
"Warehousing Maturity Date" has the meaning set forth in Section 1.2.
"Warehousing Note" has the meaning set forth in Section 1.3.
"Wet Settlement Advance" means with respect to any Advance, the time from
the date the Advance is made until the date of Lender's receipt of the
Collateral Documents as provided in Article 3 and the Exhibit referenced
therein.
14.2. OTHER DEFINITIONAL PROVISIONS; TERMS OF CONSTRUCTION
14.2(a) Accounting terms not otherwise defined in this Agreement have the
meanings given to those terms under GAAP.
14.2(b) Defined terms may be used in the singular or the plural, as the
context requires.
14.2(c) All references to time of day mean the then applicable time in
Chicago, Illinois, unless otherwise expressly provided.
14.2(d) References to Sections, Exhibits, Schedules and like references
are to Sections, Exhibits, Schedules and the like of this
Agreement unless otherwise expressly provided.
14.2(e) The words "include," "includes" and "including" are deemed to be
followed by the phrase "without limitation."
14.2(f) Unless the context in which it is used otherwise clearly requires,
the word "or" has the inclusive meaning represented by the phrase
"and/or."
14.2(g) All incorporations by reference of provisions from other
agreements are incorporated as if such provisions were fully set
forth into this Agreement, and include all necessary definitions
and related provisions from those other agreements. All provisions
from other agreements incorporated into this Agreement by
reference survive any termination of
71
those other agreements until the Obligations of Borrower under
this Agreement and the Notes are irrevocably paid in full and the
Commitments are terminated.
14.2(h) All references to the Uniform Commercial Code shall be deemed to
be references to the Uniform Commercial Code in effect on the
Closing Date in the applicable jurisdiction.
14.2(i) Unless the context in which it is used otherwise clearly requires,
all references to days, weeks and months mean calendar days, weeks
and months.
END OF ARTICLE 14
72
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first above written.
BORROWER:
COLUMBIA NATIONAL, INCORPORATED,
a Maryland corporation
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Its: Senior Vice President
------------------------------------
S-1
CREDIT AGENT:
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Its: Director
S-2
COLLATERAL AGENT:
U.S. BANK NATIONAL ASSOCIATION,
a national banking association
By: /s/ Xxxxxxxx Xxxxxx
-------------------------------------
Its: Vice President
------------------------------------
S-3
LENDERS:
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Its: Director
S-4
U.S. BANK NATIONAL ASSOCIATION,
a national banking association
By: /s/ Xxxxxxxx Xxxxxx
-------------------------------------
Its: Vice President
------------------------------------
S-5
ALLFIRST BANK
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Its: Senior Vice President
------------------------------------
S-6
FLEET NATIONAL BANK
By: /s/ Xxxx Xxxxxxxxxxx
-------------------------------------
Its: Director
------------------------------------
S-7
NATIONAL CITY BANK OF KENTUCKY
By: /s/ Xxxx Xx Xxxxx
-------------------------------------
Its: Vice President
------------------------------------
S-8
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Xxxxxxxxx Xxxxx
-------------------------------------
Its: Senior Vice President
------------------------------------
S-9
COMERICA BANK
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Its: Assistant Vice President
------------------------------------
S-10
GUARANTY BANK, F.S.B.,
a federal savings bank
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Its: Vice President
------------------------------------
S-11
COLONIAL BANK,
An Alabama banking corporation
By: /s/ Xxxxxxxxx Xxxxxxx
-------------------------------------
Its: Senior Vice President
------------------------------------
S-12
