WAREHOUSING CREDIT AND SECURITY AGREEMENT
(MULTI-FAMILY MORTGAGE LOANS)
BETWEEN
AMRESCO CAPITAL CORPORATION
a Texas corporation
AND
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
Dated as of August 15, 1995
TABLE OF CONTENTS
PAGE
1. DEFINITIONS 1
1.1 Defined Terms 1
1.2 Other Definitional Provisions 8
2 THE CREDIT 8
2.1 Funding Limitations 8
2.2 Procedures for Obtaining Advances 9
2.3 Notes 11
2.4 Interest 11
2.5 Principal Payments 12
2.6 Method of Making Payments 14
2.7 Warehousing Fees 14
2.8 Miscellaneous Charges 14
2.9 Interest Limitation 15
3. COLLATERAL 15
3.1 Grant of Security Interest 15
3.2 Release of Security Interest in Collateral 17
3.3 Delivery of Additional Collateral or Mandatory Prepayment 18
3.4 Collection and Servicing Rights 19
3.5 Return of Collateral 19
4. CONDITIONS PRECEDENT 20
4.1 Initial Advance 20
4.2 Each Advance 22
5. REPRESENTATIONS AND WARRANTIES. 23
5.1 Organization; Good Standing; Subsidiaries. 23
5.2 Authorization and Enforceability 24
5.3 Approvals 24
5.4 Financial Condition 24
5.5 Litigation 25
5.6 Compliance with Laws 25
5.7 Regulations G and U 25
5.8 Investment Company Act 25
5.9 Payment of Taxes 25
5.10 Agreements 26
5.11 Title to Properties 26
5.12 ERISA 26
5.13 Eligibility 27
5.14 Place of Business 27
5.15 Special Representations Concerning Collateral 27
5.16 Servicing 28
6. AFFIRMATIVE COVENANTS 29
6.1 Payment of Notes 29
6.2 Financial Statements and Other Reports 29
6.3 Maintenance of Existence; Conduct of Business 31
6.4 Compliance with Applicable Laws 31
6.5 Inspection of Properties and Books 31
6.6 Payment of Debt, Taxes, etc 31
6.7 Insurance 32
6.8 Closing Instructions 32
6.9 Subordination of Certain Indebtedness 32
6.10 Other Loan Obligations 32
6.11 Use of Proceeds of Advances 33
6.12 Special Affirmative Covenants Concerning Collateral 33
7. NEGATIVE COVENANTS 34
7.1 Contingent Liabilities 34
7.2 Merger; Sale of Assets; Acquisitions 34
7.3 Deferral of Subordinated Debt 34
7.4 Loss of Eligibility 35
7.5 Debt to Tangible Net Worth Ratio 35
7.6 Minimum Tangible Net Worth 35
7.7 Minimum Servicing Portfolio 35
7.8 Special Negative Covenants Concerning Collateral 35
8. DEFAULTS; REMEDIES 35
8.1 Events of Default 35
8.2 Remedies 39
8.3 Application of Proceeds 42
8.4 Lender Appointed Attorney-in-Fact 43
8.5 Right of Set-Off 43
9. NOTICES 44
10. REIMBURSEMENT OF EXPENSES; INDEMNITY 44
11. FINANCIAL INFORMATION 45
12. MISCELLANEOUS 46
12.1 Terms Binding Upon Successors; Survival of Representations 46
12.2 Assignment 46
12.3 Amendments 46
12.4 Governing Law 46
12.5 Participations 46
12.6 Relationship of the Parties 47
12.7 Severability 47
12.8 Operational Reviews 47
12.9 Consent to Credit References 47
12.10 Consent to Jurisdiction 48
12.11 Counterparts 48
12.12 Entire Agreement 48
12.13 Waiver of Jury Trial 48
EXHIBITS
Exhibit A Promissory Note
Exhibit B (Intentionally Omitted)
Exhibit C-MF Request for Advance
Against
Mortgage Loans
Exhibit D-CONV/▇▇▇▇ Procedures and
Documentation for Warehousing
Conventional Multi-family Mortgage
Loans
Exhibit E-MF/APPROVAL Approval Request for Advances
against Mortgage Loans
Exhibit F Subordination
of Debt Agreement
Exhibit G Subsidiaries
Exhibit H Legal Opinion
Exhibit I-MF Officer's
Certificate
Exhibit J Schedule of Existing Warehouse
Lines
Exhibit K Funding Bank Agreement (Wire)
THIS WAREHOUSING CREDIT AND SECURITY AGREEMENT, dated as of
August 15, 1995 between AMRESCO CAPITAL CORPORATION, a Texas
corporation (the "Company"), having its principal office at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender"), having its principal office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, the Company and the Lender desire to set forth
herein the terms and conditions upon which the Lender shall
provide warehouse financing to the Company;
WHEREAS, the Lender may from time to time, at its
discretion, make one or more Advances to the Company, each of
which shall be secured by a Conventional Mortgage Loan (as such
terms are hereinafter defined).
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINITIONS.
1.1 Defined Terms. Capitalized terms defined below or
elsewhere in this Agreement (including the Exhibits hereto)
shall have the following meanings:
"Advance" means a disbursement by the Lender pursuant
to Article 2 of this Agreement, including, without
limitation, readvances of funds previously advanced to the
Company and repaid to the Lender.
"Advance Request" has the meaning set forth in Section
2.2(c) hereof.
"Affiliate" has the meaning set forth in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act.
"Agreement" means this Warehousing Credit and Security
Agreement (Multi-Family Mortgage Loans), either as
originally executed or as it may from time to time be
supplemented, modified or amended.
"Approval Request" has the meaning set forth in Section
2.2(a) hereof.
"Base Rate" means three percent (3%) per annum over
LIBOR.
"Business Day" means any day excluding Saturday or
Sunday and excluding any day on which national banking
associations are closed for business.
"Cash Collateral Account" means a demand deposit
account maintained at the Funding Bank in the name of the
Lender and designated for receipt of the proceeds of the
sale or other disposition of the Collateral.
"Collateral" has the meaning set forth in Section 3.1
hereof.
"Collateral Documents" has the meaning set forth in
Section 2.2(b) hereof.
"Collateral Value" means (a) with respect to any
Mortgage Loan as of the date of determination, the lesser of
(i) the amount of any Advance made against such Mortgage
Loan under Section 2.1(b) hereof; or (ii) the Fair Market
Value of such Mortgage Loan; or (b) in the event Pledged
Mortgages have been exchanged for Pledged Securities, the
aggregate Fair Market Value of the Mortgage Loans backing
such Pledged Securities.
"Committed Purchase Price" means for a Mortgage Loan
the product of the Mortgage Note Amount multiplied by (a)
the price (expressed as a percentage) as set forth in a
Purchase Commitment for such Mortgage Loan or (b) in the
event such Mortgage Loan is to be used to back a Mortgage-
backed Security, the price (expressed as a percentage) as
set forth in a Purchase Commitment for such Mortgage-backed
Security.
"Company" has the meaning set forth in the first
paragraph of this Agreement.
"Conventional Mortgage Loan" means a Multi-Family
Mortgage Loan which is prior approved by FNMA or FHLMC and
covered by a Purchase Commitment from FNMA or FHLMC.
"Debt" means, with respect to any Person, at any date
(a) all indebtedness or other obligations of such Person
which, in accordance with GAAP, would be included in
determining total liabilities as shown on the liabilities
side of a balance sheet of such Person at such date; and (b)
all indebtedness or other obligations of such Person for
borrowed money or for the deferred purchase price of
property or services; provided that for purposes of this
Agreement, there shall be excluded from Debt at any date
loan loss reserves, Subordinated Debt not due within one
year of such date, and deferred taxes arising from
capitalized excess servicing fees.
"Default" means the occurrence of any event or
existence of any condition which, but for the giving of
Notice, the lapse of time, or both, would constitute an
Event of Default.
"Depository Benefit" shall mean the compensation
received by the Lender, directly or indirectly, as a result
of the Company's maintenance of Eligible Balances with a
Designated Bank.
"Designated Bank" means any bank(s) designated from
time to time by the Lender to be a Designated Bank with whom
the Lender has an agreement under which the Lender can
receive a Depository Benefit.
"ERISA" means the Employee Retirement Income Security
Act of 1974 and all rules and regulations promulgated
thereunder, as amended from time to time and any successor
statute.
"Eligible Balances" means all funds of or maintained by
the Company and its Subsidiaries in accounts at a Designated
Bank, less balances to support fees, interest or other
amounts that would otherwise be payable to the Designated
Bank, float, reserve requirements, Federal Deposit Insurance
Corporation insurance premiums and such other reductions as
may be imposed by governmental authorities from time to
time.
"Event of Default" means any of the conditions or
events set forth in Section 8.1 hereof.
"Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, and any successor
statute.
"Fair Market Value" means at any date with respect to
any Mortgage Loan covered by a valid Purchase Commitment,
the Committed Purchase Price, or in the absence of a valid
Purchase Commitment for a Mortgage Loan or the related
Mortgage-backed Security (if such Mortgage Loan is to be
used to back a Mortgage-backed Security), the fair market
value as determined by the Lender, in its reasonable
business judgment, in conformity with standard industry
practices for valuing similar Mortgage Loans or Mortgage-
backed Securities.
"FHA" means the Federal Housing Administration and any
successor thereto.
"FHLMC" means the Federal Home Loan Mortgage
Corporation and any successor thereto.
"FICA" means the Federal Insurance Contributions Act.
"FIRREA" means the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended from time
to time, and the regulations promulgated and rulings issued
thereunder.
"FNMA" means the Federal National Mortgage Association
and any successor thereto.
"Funding Bank" means The First National Bank of Chicago
or any other bank designated from time to time by the
Lender.
"Funding Bank Agreement" means the letter agreement
substantially in the form of Exhibit K hereto.
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board
or in such other statements by such other entity as may be
approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of
the date of determination.
"GNMA" means the Government National Mortgage
Association and any successor thereto.
"HUD" means the Department of Housing and Urban
Development and any successor thereto.
"Indemnified Liabilities" has the meaning set forth in
Article 10 hereof.
"Internal Revenue Code" means the Internal Revenue Code
of 1986, or any subsequent federal income tax law or laws,
as any of the foregoing have been or may from time to time
be amended.
"Investor" means FNMA, FHLMC or a financially
responsible private institution which is deemed acceptable
by the Lender from time to time in its sole discretion.
"Lender" has the meaning set forth in the first
paragraph of this Agreement.
"LIBOR" means, for each calendar week, the rate of
interest per annum which is equal to the arithmetic mean of
the U.S. Dollar London Interbank Offered Rates for one (1)
month periods 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 ▇▇▇▇▇▇-▇▇▇▇▇▇, Inc. on its
MoneyCenter system. LIBOR shall be rounded, if necessary,
to the next higher one sixteenth of one percent (1/16%). If
such U.S. dollar LIBOR rates are not so offered or published
for any period, then during such period LIBOR shall mean the
London Interbank Offered Rate for one (1) month periods
published on the first Business Day of each week on which
the London Interbank market is open, in the Wall Street
Journal in its regular column entitled "Money Rates."
"Lien" means any lien, mortgage, deed of trust, pledge,
security interest, charge or encumbrance of any kind
(including any conditional sale or other title retention
agreement, any lease in the nature thereof, and any
agreement to give any security interest).
"Loan Documents" means this Agreement, the Notes, any
agreement of the Company relating to Subordinated Debt, an
Approval Request, an Advance Request, and each other
document, instrument or agreement executed by the Company in
connection herewith or therewith, as any of the same may be
amended, restated, renewed or replaced from time to time.
"Margin Stock" has the meaning assigned to that term in
Regulations G and U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"Miscellaneous Charges" has the meaning set forth in
Section 2.8 hereof.
"Mortgage" means a first mortgage or first deed of
trust on improved real property.
"Mortgage-backed Securities" means FNMA or FHLMC
securities that are backed by Mortgage Loans.
"Mortgage Loan" means any loan evidenced by a Mortgage
Note.
"Mortgage Note" means a promissory note secured by a
Mortgage.
"Mortgage Note Amount" means, as of the date of
determination, the then outstanding unpaid principal amount
of a Mortgage Note.
"Mortgage Note Rate" means the coupon rate of interest
born by a Mortgage Note as set forth in such Mortgage Note.
"Mortgage Pool" means a pool of one or more Pledged
Mortgages on the basis of which there is to be issued a
Mortgage-backed Security.
"Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA which is maintained
for employees of the Company or a Subsidiary of the Company.
"Multi-family Mortgage Loan" means a Mortgage Loan
secured by a Mortgage on improved Multi-family Property.
"Multi-family Property" means real property containing
or which will contain more than four (4) dwelling units.
"Notes" has the meaning set forth in Section 2.3
hereof.
"Notices" has the meaning set forth in Article 9
hereof.
"Obligations" means any and all indebtedness,
obligations and liabilities of the Company to the Lender
(whether now existing or hereafter arising, voluntary or
involuntary, whether or not jointly owed with others, direct
or indirect, absolute or contingent, liquidated or
unliquidated, and whether or not from time to time decreased
or extinguished and later increased, created or incurred),
arising out of or related to the Loan Documents.
"Officer's Certificate" means a certificate executed on
behalf of the Company by its chief financial officer or its
treasurer or by such other officer as may be designated
herein and substantially in the form of Exhibit I-MF
attached hereto.
"Operating Account" means a demand deposit account
maintained at the Funding Bank in the name of the Company
and designated for funding the discount portion of each
Advance and for returning any excess payment from an
Investor for a Pledged Mortgage or Pledged Security.
"Parent" shall mean AMRESCO, INC., a Delaware
corporation.
"Participant" has the meaning set forth in Section 12.5
hereof.
"Person" means and includes natural persons,
corporations, limited partnerships, general partnerships,
joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal
entities, and governments and agencies and political
subdivisions thereof.
"Plans" has the meaning set forth in Section 5.12
hereof.
"Pledged Mortgages" has the meaning set forth in
Section 3.1(a) hereof.
"Pledged Securities" has the meaning set forth in
Section 3.1(b) hereof.
"Purchase Commitment" means a written commitment, in
form and substance satisfactory to the Lender, issued in
favor of the Company by an Investor pursuant to which that
Investor commits to purchase Mortgage Loans or
Mortgage-backed Securities.
"Release Amount" has the meaning set forth in Section
3.2(f) hereof.
"Servicing Contract" means, with respect to any Person,
the arrangement, whether or not in writing, pursuant to
which such Person has the right to service Mortgage Loans.
"Servicing Portfolio" means, as to any Person, the
unpaid principal balance of Mortgage Loans whose Servicing
Contracts are owned by such Person.
"Stated Maturity Date" means the stated maturity date
of an Advance hereunder, as such date is set forth in the
related Notes.
"Statement Date" means the date of the most recent
financial statements of the Company (and, if applicable, its
Subsidiaries, on a consolidated basis) delivered to the
Lender under the terms of this Agreement.
"Subordinated Debt" means all indebtedness of the
Company, for borrowed money, which is, by its terms (which
terms shall have been approved by the Lender), effectively
subordinated in right of payment to all other present and
future Obligations, and, solely for purposes of Section 7.3
all indebtedness of the Company which is required to be
subordinated by Section 4.1(b) and Section 4.1(b), 6.9
hereof.
"Subsidiary" means any corporation, association or
other business entity in which more than fifty percent (50%)
of the total voting power or shares of stock entitled to
vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"Tangible Net Worth" means with respect to any Person
at any date, the excess of the 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 4.1(a)(5) hereof, plus loan loss
reserves, and that portion of Subordinated Debt not due
within one year of such date, provided that, for purposes of
this Agreement, there shall be excluded from total assets
advances or loans to shareholders, officers or Affiliates,
investments in Affiliates, assets pledged to secure any
liabilities not included in the Debt of such Person,
intangible assets and those other assets which would be
deemed by HUD to be non-acceptable in calculating adjusted
net worth in accordance with its requirements in effect as
of such date, as such requirements appear in the "Audit
Guide for Audit of Approved Non-Supervised Mortgagees" and
other assets deemed unacceptable by the Lender in its sole
discretion.
"Trust Receipt" means a trust receipt in a form
approved by and pursuant to which the Lender may deliver any
document relating to the Collateral to the Company for
correction or completion.
"Warehousing Fee" has the meaning set forth in Section
2.7 hereof.
1.2 Other Definitional Provisions.
1.2(a) Accounting terms not otherwise
defined herein shall have the meanings given the terms
under GAAP.
1.2(b) Defined terms may be used in the
singular or the plural, as the context requires.
1.2(c) All references to time of day shall
mean the then applicable time in Chicago, Illinois,
unless expressly provided to the contrary.
2 THE CREDIT.
2.1 Funding Limitations.
2.1(a) Advances shall be used by the
Company solely for the purpose of funding the
origination of Mortgage Loans and shall be made at the
request of the Company, in the manner hereinafter
provided in Section 2.2 hereof, against the pledge of
such Mortgage Loans as Collateral therefor. The
following limitations on the use of the Advance shall
be applicable:
(1) No Advance shall be made
against Mortgage Loans other than Conventional
Mortgage Loans.
(2) No Advance shall be made
against Mortgage Loans which are not covered by a
Purchase Commitment.
(3) No Advance shall be made
against any Mortgage Loan which was closed more
than fifteen (15) days prior to the date of the
requested Advance.
2.1(b) No Advance shall exceed an amount
equal to the lesser of ninety-nine percent (99%) of:
(i) the Mortgage Note Amount; or (ii) the Committed
Purchase Price.
2.1(c) All Advances under this Agreement
shall constitute a single indebtedness, and all of the
Collateral shall be security for the Notes and for the
performance of all the Obligations.
2.2 Procedures for Obtaining Advances.
2.2(a) If the Company wishes to request an
Advance, it shall deliver to the Lender no later than
thirty (30) days prior to any Business Day that the
Company desires to borrow hereunder, a request for
approval ("Approval Request") in substantially the form
set forth in Exhibit E-MF/APPROVAL hereto. Such
Approval Request shall be accompanied by the following
documents:
(1) Copy of either the FNMA or
FHLMC Multifamily Loan Application or the FHA
Firm Commitment to Insure for the Mortgage Loan to
be funded by the Advance described in the Approval
Request.
(2) An Officer's Certificate
substantially in the form of Exhibit I-MF hereto
(A) setting forth in reasonable detail all
calculations necessary to show that the Company is
in compliance with the requirements of Sections
7.5, 7.6, and 7.7, hereof as of the date of the
Approval Request; (B) certifying that the Company
is, as of the date of the Approval Request, an
approved and qualified seller/servicer or issuer
in good standing for the Investor named in and the
type of Mortgage Loan covered by the Approval
Request, and meets all requirements applicable to
its status as such.
2.2(b) Within fifteen (15) days after
receipt of an Approval Request and the supporting
documents the Lender may, in its sole discretion,
approve an Advance, by returning the Approval Request
executed by the Lender. Any approved Advance shall be
subject to the satisfaction of the conditions set forth
in Sections 4.1 and 4.2 hereof, and compliance with the
procedures set forth in this Section 2.2 and in Exhibit
D-CONV/▇▇▇▇ attached hereto and made a part hereof,
including the delivery of all documents listed in such
Exhibit ("Collateral Documents").
2.2(c) After an Advance has been approved,
a request for funding such Advance shall be initiated
by the Company by delivering to the Lender the
documents required to be delivered in Exhibit D-
CONV/▇▇▇▇ within the time periods set forth in such
Exhibit, including the delivery to the Lender no later
than one (1) Business Day prior to any Business Day
that the Company desires to borrow hereunder, of a
completed and signed request for an Advance ("Advance
Request") on the then current form approved by the
Lender. The current form in use by the Lender is
Exhibit C-MF attached hereto and made a part hereof.
The Lender shall have the right, on not less than ten
(10) Business Days' prior Notice to the Company, to
modify any of said Exhibits to conform to current legal
requirements or Lender practices, and, as so modified,
said Exhibits as delivered to the Company shall be
deemed a part hereof.
2.2(d) Before funding, the Lender shall
have a reasonable time (one (1) Business Day under
ordinary circumstances) to examine such Advance Request
and the Collateral Documents to be delivered prior to
such requested Advance, as set forth in Exhibit D-
CONV/▇▇▇▇, and may reject such of them as do not meet
the requirements of this Agreement or of the related
Purchase Commitment.
2.2(e) The Company shall hold in trust for
the Lender, and the Company shall deliver to the Lender
promptly upon request, the following: (1) originals of
the Collateral Documents for which copies are required
to be delivered to the Lender pursuant to Exhibit D-
CONV/▇▇▇▇, (2) the original lender's ALTA Policy of
Title Insurance, or an equivalent thereto, and (3) any
other documents relating to a Pledged Mortgage which
the Lender may request including, without limitation,
certificates of casualty or hazard insurance, credit
information on the maker of each such Mortgage Note,
and other documents of all kinds which are customarily
desired for inspection or transfer incidental to the
purchase of any Mortgage Note by an Investor and any
additional documents which are customarily executed by
the seller of a Mortgage Note to an Investor.
2.2(f) To make an Advance, the Lender
shall cause the Funding Bank to credit an account of
the Company with the Funding Bank, which account shall
be under the exclusive control of the Lender, upon
compliance by the Company with the terms of this
Agreement. Upon the approval of the Lender,
disbursement of the Advance shall be made in accordance
with the instructions of the Company as set forth in
the Advance Request.
2.2(g) If, pursuant to the authorization
given by the Company in the Funding Bank Agreement, for
the purpose of financing a Mortgage Loan against which
the Lender has made an Advance in accordance with a
Request for Advance the Lender debits the Company's
Operating Account at the Funding Bank to the extent
necessary to cover a wire to be initiated by the
Lender, and such debit results in an overdraft, the
Lender may make an additional Advance to fund such
overdraft.
2.3 Notes. The Company's Obligations shall be
evidenced by promissory notes ("Notes") of the Company dated
as of the date of each Advance substantially in the form of
Exhibit A attached hereto. The term "Notes" shall include
all extensions, renewals and modifications of the Notes and
all substitutions therefor. A "Note" shall relate to and
evidence a specific Advance. All terms and provisions of
the Notes are hereby incorporated herein.
2.4 Interest.
2.4(a) The unpaid amount of each Advance
against Pledged Mortgages shall bear interest, from the
date of such Advance until paid in full at a rate of
interest which is equal to the Base Rate. The interest
rate will be adjusted as of the effective date of each
change in LIBOR.
2.4(b) The Company is entitled to receive
a benefit in the form of an "Earnings Credit" on the
portion of the Eligible Balances maintained in time
deposit accounts with a Designated Bank, and the
Company is entitled to receive a benefit in the form of
an "Earnings Allowance" on the portion of the Eligible
Balances maintained in demand deposit accounts with a
Designated Bank. Any Earnings Allowance shall be used
first and any Earnings Credit shall be used second as a
credit against accrued Miscellaneous Charges and fees,
including, but not limited to Warehousing Fees, and may
be used, at the Lender's option, to reduce accrued
interest. Any Earnings Allowance not used during the
month in which the benefit was received shall be
accumulated for use and must be used during the
calendar year in which the benefit was received. Any
Earnings Credit not used during the month in which the
benefit was received shall be used to provide a cash
benefit to the Company. The Lender's determination of
the Earnings Credit and the Earnings Allowance for any
month shall be determined by the Lender in its sole
discretion and shall be conclusive and binding absent
manifest error. In no event shall the benefit received
by the Company exceed the Depository Benefit.
Either party hereto may terminate the
benefits provided for in this Section effective
immediately upon Notice to the other party, if the
terminating party shall have determined (which
determination shall be conclusive and binding absent
manifest error) at any time that any applicable law,
rule, regulation, order or decree or any interpretation
or administration thereof by any governmental authority
charged with the interpretation or administration
thereof, or compliance by such party with any request
or directive (whether or not having the force of law)
of any such authority, shall make it unlawful or
impossible for such party to continue to offer or
receive the benefits provided for in this Section.
2.4(c) Interest shall be computed on the
basis of a 360-day year and applied to the actual
number of days elapsed in each interest calculation
period and shall be payable upon the receipt of the
proceeds of the sale or other disposition of a Pledged
Mortgage, to the extent thereof, or upon the expiration
of the Stated Maturity Date of the related Note or the
termination of the Agreement.
2.4(d) If, for any reason, no interest is
due on an Advance, the Company agrees to pay to the
Lender an administrative fee equal to one day of
interest on such Advances at a rate of one and one-half
percent (1-1/2%) per annum. Administrative and other
fees shall be due and payable in the same manner as
interest is due and payable hereunder.
2.4(e) Upon demand of the Lender and
Notice to the Company, any Obligations not paid when
due (whether at stated maturity, upon acceleration
following the occurrence of an Event of Default or
otherwise) shall bear interest, from the date due until
paid in full, at a per annum rate of interest equal to
the Base Rate plus four percent (4%) (the "Default
Rate"), said interest to be payable on demand of the
Lender.
2.5 Principal Payments.
2.5(a) The unpaid principal amount of each
Advance hereunder shall be payable in full on the
Stated Maturity Date set forth in the related Note or,
if earlier, on the date to which the maturity of such
Advance is accelerated pursuant to the provisions of
this Agreement.
2.5(b) The Company shall have the right to
prepay the outstanding Advances in whole or in part,
from time to time, without premium or penalty.
2.5(c) All payments of outstanding
Advances from the proceeds of the sale or other
disposition of Pledged Mortgages and Pledged Securities
shall be paid directly by the Investor to the Cash
Collateral Account to be applied against the
Obligations.
2.5(d) The Company shall be obligated to
pay to the Lender, without the necessity of prior
demand or notice from the Lender, and the Company
authorizes the Lender to cause the Funding Bank to
charge the Company's account for, the amount of any
outstanding Advance against a specific Pledged
Mortgage, upon the earliest occurrence of any of the
following events:
(1) Sixty (60) days elapse from
the date of the initial Advance made by the Lender
against such Pledged Mortgage, whether or not such
Pledged Mortgage is included in a Mortgage Pool.
(2) On the date an Advance was
made and the Pledged Mortgage which was to have
been funded by such Advance is not closed and
funded.
(3) Ten (10) Business Days elapse
from the date a Collateral Document was delivered
to the Company for correction or completion under
a Trust Receipt, without being returned to the
Lender.
(4) On the date the Pledged
Mortgage is defaulted and applicable grace and
cure periods have expired.
(5) On the mandatory delivery date
of the related Purchase Commitment if the specific
Pledged Mortgage was not delivered under the
Purchase Commitment prior to such mandatory
delivery date or the Purchase Commitment is
terminated.
(6) On the date the Pledged
Mortgage is rejected by an Investor.
(7) Upon sale or other disposition
of the Pledged Mortgage.
(8) If the Pledged Mortgage is
included in a Mortgage Pool, then upon sale of the
Mortgage-backed Security.
2.5(e) The outstanding amount of any
Advance made pursuant to Section 2.2(g) shall be
payable in full within one (1) Business Day after the
date of such Advance.
2.5(f) The Company shall give Notice to
the Lender of the Pledged Mortgages or Pledged
Securities for which proceeds have been received. Upon
receipt of such Notice the Advances against such
Pledged Mortgages or Pledged Securities shall be repaid
and such Pledged Mortgages or Pledged Securities shall
be considered to have been redeemed from pledge. The
Lender is entitled to rely upon the Company's
affirmation that deposits in the Cash Collateral
Account represent payment from Investors for the
purchase of Pledged Mortgages or Pledged Securities as
specified by the Company. In the event that the
payment from an Investor for the purchase of Pledged
Mortgages or Pledged Securities is less than the
outstanding Advances against such Pledged Mortgages or
the Mortgage Loans backing Pledged Securities, the
Lender is authorized to cause the Funding Bank to
charge the Company's account for an amount equal to
such deficiency. Provided no Default or Event of
Default exists, the Lender shall return any excess
payment from an Investor for Pledged Mortgages or
Pledged Securities to the Company.
2.6 Method of Making Payments.
2.6(a) Except as otherwise specifically
provided herein, all payments hereunder shall be made
to the Lender not later than the close of business on
the date when due unless such date is a non-Business
Day, in which case, such payment shall be due on the
first Business Day thereafter, and shall be made in
lawful money of the United States of America in
immediately available funds transferred via wire to
accounts designated by the Lender from time to time.
2.6(b) Upon an Event of Default, and
without the necessity of prior demand or notice from
the Lender, the Company authorizes the Lender to cause
the Funding Bank to charge the Company's account for
any Obligations due and owing the Lender.
2.7 Warehousing Fees. The Company agrees to pay to
the Lender a Warehousing Fee in the amount of (a) one-eighth
percent (1/8%) of the amount of an Advance, if such Advance
is less than Five Million Dollars ($5,000,000), or (b) one-
sixteenth percent (1/16%) of the amount of an Advance, if
such Advance is greater than or equal to Five Million
Dollars ($5,000,000). Warehousing Fees shall be payable
upon receipt the proceeds of the sale or other disposition
of the Pledged Mortgage, to the extent thereof, or upon the
expiration of the Stated Maturity Date of the related Note
or the termination of the Agreement.
2.8 Miscellaneous Charges. The Company agrees to
reimburse the Lender for miscellaneous charges and expenses
(collectively, "Miscellaneous Charges") incurred by or on
behalf of the Lender in connection with the handling and
administration of Advances, and to reimburse the Lender for
Miscellaneous Charges incurred by or on behalf of the Lender
in connection with the handling and administration of the
Collateral. For the purposes hereof, Miscellaneous Charges
shall include, but not be limited to, charges for wire
transfers, charges for security delivery fees, charges for
overnight delivery of Collateral to Investors, Funding
Bank's service charges and Designated Bank's service
charges. Miscellaneous Charges are due when incurred, but
shall not be delinquent if paid within fifteen (15) days
after receipt of an invoice or an account analysis statement
from the Lender.
2.9 Interest Limitation. All agreements between the
Company and the Lender are hereby expressly limited so that
in no contingency or event whatsoever, whether by reason of
acceleration of Stated Maturity Date of a Note, termination
of this Agreement or otherwise, shall the amount paid or
agreed to be paid to the Lender for the use, forbearance,
loaning or retention of the Advances secured by this
Agreement exceed the maximum permissible under applicable
law. If from any circumstances whatsoever, fulfillment of
any provisions hereof or of the Notes, or any other document
securing this Agreement at any time given shall involve
transcending the limit of validity prescribed by law, then,
the obligation to be fulfilled shall automatically be
reduced to the limit of such validity, and if from any
circumstances the Lender should ever receive as interest an
amount which would exceed the highest lawful rate of
interest, such amount which would be in excess of interest
shall be applied to the reduction of the principal balance
secured by the Notes and not to the payment of interest
thereunder. This provision shall control every other
provision of all agreements between the Company and Lender
and shall also be binding upon and available to any
subsequent holder of the Notes.
3. COLLATERAL.
3.1 Grant of Security Interest. As security for the
payment of the Notes and for the performance of all of the
Company's Obligations, the Company hereby assigns and
transfers to the Lender all right, title and interest in and
to and grants a security interest to the Lender in the
following described property (the "Collateral"):
3.1(a) All Mortgage Loans, including all
Mortgage Notes and Mortgages evidencing such Mortgage
Loans, which from time to time are delivered or caused
to be delivered to the Lender (including delivery to a
third party on behalf of the Lender), come into the
possession, custody or control of the Lender for the
purpose of assignment or pledge or in respect of which
an Advance has been made by the Lender hereunder (the
"Pledged Mortgages").
3.1(b) All Mortgage-backed Securities
which are from time to time created in whole or in part
on the basis of the Pledged Mortgages or are delivered
or caused to be delivered to, or are otherwise in the
possession of the Lender, or its agent, bailee or
custodian as assignee, or pledged to the Lender, or for
such purpose are registered by book-entry in the name
of, the Lender (including delivery to or registration
in the name of a third party on behalf of the Lender)
hereunder or in respect of which from time to time an
Advance has been made by the Lender hereunder (the
"Pledged Securities").
3.1(c) All commitments issued by the FHA
to insure any Mortgage Loans included in the Pledged
Mortgages; all guaranties related to Pledged
Securities; all Purchase Commitments held by the
Company covering the Pledged Mortgages or the Pledged
Securities and all proceeds resulting from the sale
thereof to Investors pursuant thereto; and all personal
property, contract rights, servicing and servicing fees
and income or other proceeds, amounts and payments
payable to the Company as compensation or
reimbursement, accounts and general intangibles of
whatsoever kind relating to the Pledged Mortgages, the
Pledged Securities, said FHA commitments, the Purchase
Commitments, and all other documents or instruments
relating to the Pledged Mortgages and the Pledged
Securities, including, without limitation, any interest
of the Company in any fire, casualty or hazard
insurance policies and any awards made by any public
body or decreed by any court of competent jurisdiction
for a taking or for degradation of value in any eminent
domain proceeding as the same relate to the Pledged
Mortgages.
3.1(d) All right, title and interest of
the Company in and to all escrow accounts, documents,
instruments, files, surveys, certificates,
correspondence, appraisals, accounting records
(including all information contained in computer
programs, records, tapes, data, discs and cards
necessary or helpful in the administration or servicing
of the Collateral) and other information and data of
the Company directly relating to the Collateral.
3.1(e) All now existing or hereafter
acquired cash delivered to or otherwise in the
possession of the Lender or its agent, bailee or
custodian or designated on the books and records of the
Company as assigned and pledged to the Lender.
3.1(f) All cash and non-cash proceeds of
the Collateral, including all dividends, distributions
and other rights in connection with, and all additions
to, modifications of and replacements for, the
Collateral, and all products and proceeds of the
Collateral, together with whatever is receivable or
received when the Collateral or proceeds thereof are
sold, collected, exchanged or otherwise disposed of,
whether such disposition is voluntary or involuntary,
including, without limitation, all rights to payment
with respect to any cause of action affecting or
relating to the Collateral or proceeds thereof.
3.2 Release of Security Interest in Collateral.
3.2(a) Pledged Mortgages shall be released
from the Lender's security interest only against
payment to the Lender of the Release Amount due the
Lender in connection with such Pledged Mortgages.
3.2(b) If Pledged Mortgages are to be
transferred to a pool custodian for inclusion in a
Mortgage Pool, the Lender's security interest in such
Pledged Mortgages shall be released only against
payment to the Lender of the Release Amount in
connection with such Pledged Mortgages. If the
Lender's security interest in the Pledged Mortgages
comprising the Mortgage Pool is not released prior to
the issuance of the Mortgage-backed Security, then the
Mortgage-backed Security, when issued, shall be a
Pledged Security. The Lender's security interest shall
continue in such Pledged Mortgages and the Pledged
Security. The Lender shall be entitled to possession
of such Pledged Security in the manner provided below.
3.2(c) The Lender shall have the exclusive
right to the possession of the Pledged Securities or,
if the Pledged Securities are not to be issued in
certificated form or are to be issued in certificated
form and registered exclusively in the name of, and
held by, a clearing agency or its nominees, shall have
the right to have the book entries for the Pledged
Securities issued in the Lender's name or the name or
names of its designees, and the Lender shall have the
right to cause delivery of the Pledged Securities to be
made to the Investor or the book entries registered in
the name of the Investor or the Investor's designee
only against payment therefor. The Company
acknowledges that the Lender may enter into one or more
standing arrangements with other financial institutions
for the issuance of Pledged Securities in book entry
form in the name of such other financial institutions,
as agent or financial intermediary for the Lender, and
the Company agrees upon request of the Lender, to
execute and deliver to such other financial
institutions the Company's written concurrence in any
such standing arrangements.
3.2(d) Prior to the occurrence of an Event
of Default, the Company may redeem a Pledged Mortgage
or Pledged Security from the Lender's security interest
by notifying the Lender of its intention to redeem such
Pledged Mortgage or Pledged Security from pledge and
either (a) paying, or causing an Investor to pay, to
the Lender, for application to prepayment of the
principal balance of the Note evidencing the Advance
made against such Pledged Mortgage or such Pledged
Security, the Release Amount in connection with such
Pledged Mortgage or Pledged Security, or (b) delivering
substitute Collateral which, in addition to being
acceptable to the Lender in its sole discretion will,
when included with the Collateral, result in a
Collateral Value of all Collateral held by the Lender
which is at least equal to the aggregate outstanding
Advances.
3.2(e) Following the occurrence of a
Default or Event of Default, the Lender may, with no
liability to the Company or any Person, continue to
release its security interest in any Pledged Mortgage
or Pledged Security against payment of the Release
Amount in connection with such Pledged Mortgage or
Pledged Security.
3.2(f) The Release Amount in connection
with any Pledged Mortgage shall be (i) prior to the
occurrence of an Event of Default, the principal amount
of the Advances made against such Pledged Mortgage, and
(ii) from and after the occurrence and during the
continuance of an Event of Default, the Committed
Purchase Price of such Pledged Mortgage or, if there is
no Purchase Commitment therefor, the amount paid to the
Lender in a commercially reasonable disposition
thereof.
3.3 Delivery of Additional Collateral or Mandatory
Prepayment. At any time that the aggregate Collateral Value
of the Pledged Mortgages and Pledged Securities then pledged
hereunder is less than the aggregate amount of the Advances
then outstanding hereunder, the Lender may request, and the
Company shall within two (2) Business Days after Notice by
the Lender (a) deliver to the Lender for pledge hereunder
additional Mortgage Loans and/or cash, with a Collateral
Value sufficient to cover the difference between the
Collateral Value of the Pledged Mortgages and Pledged
Securities pledged and the aggregate amount of Advances
outstanding hereunder, or (b) repay the Advances in an
amount sufficient to reduce the aggregate balance thereof
outstanding to or below the Collateral Value of the Pledged
Mortgages and Pledged Securities pledged hereunder.
3.4 Collection and Servicing Rights. So long as no
Event of Default shall have occurred and be continuing, the
Company shall be entitled to service and receive and collect
directly all sums payable to the Company in respect of the
Collateral other than proceeds of any Purchase Commitment or
proceeds of the sale of any Collateral. Following the
occurrence of any Event of Default, the Lender or its
designee shall thereafter be entitled to service and receive
and collect all sums payable to the Company in respect of
the Collateral, and in such case (a) the Lender or its
designee in its discretion may, in its own name, in the name
of the Company or otherwise, demand, ▇▇▇ for, collect or
receive any money or property at any time payable or
receivable on account of or in exchange for any of the
Collateral, but shall be under no obligation to do so, (b)
the Company shall, if the Lender so requests, hold in trust
for the benefit of the Lender and forthwith pay to the
Lender at its office designated by Notice hereunder, all
amounts thereafter received by the Company upon or in
respect of any of the Collateral, advising the Lender as to
the source of such funds, and (c) all amounts so received
and collected by the Lender shall be held by it as part of
the Collateral.
3.5 Return of Collateral. If no Advances, interest or
other Obligations evidenced by the Loan Documents or due
under this Agreement shall be outstanding and unpaid, the
Lender shall deliver or release its security interest and
shall deliver all Collateral in its possession to the
Company at the Company's expense. The receipt of the
Company for any Collateral released or delivered to the
Company pursuant to any provision of this Agreement shall be
a complete and full acquittance for the Collateral so
returned, and the Lender shall thereafter be discharged from
any liability or responsibility therefor.
3.6 Release of Collateral.
3.6(a) The Lender may deliver documents
relating to the Collateral to the Company for
correction or completion pursuant to a Trust Receipt.
3.6(b) Prior to the occurrence of a
Default or Event of Default, upon delivery by the
Company to the Lender of shipping instructions pursuant
to Exhibit D-CONV/▇▇▇▇, the Lender will transmit
Pledged Mortgages or Pledged Securities and all related
loan documents or pool documents to the applicable
Investor.
3.6(c) Upon receipt of Notice from the
Company under Section 2.5(f) hereof, and repayment of
the Release Amount with respect to a Pledged Mortgage
identified by the Company, any Collateral Documents
relating to the redeemed Pledged Mortgage or Mortgage
Loan backing a Pledged Security which have not been
delivered to an Investor shall be released by the
Lender to the Company.
4. CONDITIONS PRECEDENT.
4.1 Initial Advance. The obligation of the Lender to
make the initial Advance under this Agreement is subject to
the satisfaction, in the sole discretion of the Lender, on
or before the date thereof of the following conditions
precedent:
4.1(a) The Lender shall have received the
following, all of which must be satisfactory in form
and content to the Lender, in its sole discretion:
(1) This Agreement duly executed
by the Company.
(2) The Company's articles of
incorporation as certified by the Secretary of
State of the Company's incorporation, bylaws
certified by the corporate secretary of the
Company, and certificates of good standing dated
no less recently than ninety (90) days prior to
the date of this Agreement.
(3) A resolution of the board of
directors of the Company, certified as of the date
of this Agreement by its corporate secretary,
authorizing the execution, delivery and
performance of this Agreement and the other Loan
Documents, and all other instruments or documents
to be delivered by the Company pursuant to this
Agreement.
(4) A certificate of the Company's
corporate secretary as to the incumbency and
authenticity of the signatures of the officers of
the Company executing this Agreement and the other
Loan Documents and each Note delivered in
connection with an Advance Request, each Advance
Request and all other instruments or documents to
be delivered pursuant hereto (the Lender being
entitled to rely thereon until a new such
certificate has been furnished to the Lender).
(5) Financial statements of the
Parent (and, if applicable, its Subsidiaries, on a
consolidated basis) containing a balance sheet as
of December 31, 1994 and related statements of
income, changes in stockholders' equity and cash
flows 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 the Lender.
(6) Financial statements of the
Company (and, if applicable, its Subsidiaries, on
a consolidated basis) containing a balance sheet
as of April 30, 1994, related statements of income
and changes in stockholders' equity for the period
ended on such date prepared in accordance with
GAAP applied on a basis consistent with the
Company's most recent audited financial
statements.
(7) A tax, lien and judgment
search of the appropriate public records for the
Company, including a search of Uniform Commercial
Code financing statements, which search shall not
have disclosed the existence of any prior Lien on
the Collateral other than in favor of the Lender
or as permitted hereunder.
(8) A favorable written opinion of
the general counsel to the Company, dated as of
the date of this Agreement substantially in the
form of Exhibit H attached hereto, addressed to
the Lender.
(9) Copies of the certificates,
documents or other written instruments which
evidence the Company's eligibility described in
Section 5.13 hereof, all in form and substance
satisfactory to the Lender.
(10) Copies of the Company's errors
and omissions insurance policy or mortgage
impairment insurance policy, and blanket bond
coverage policy, or certificates in lieu of
policies, all in form and content satisfactory to
the Lender, showing compliance by the Company as
of the date of this Agreement with the related
provisions of Section 6.7 hereof.
(11) Executed financing statements
in recordable form covering the Collateral and
ready for filing in all jurisdictions required by
the Lender.
(12) Evidence that all accounts
necessary into which Advances will be funded have
been established at the Funding Bank and receipt
of a fully executed Funding Bank Agreement.
4.1(b) All directors, officers and
shareholders of the Company, all Affiliates of the
Company or of any Subsidiary of the Company, to whom or
to any of whom the Company shall be indebted as of the
date of this Agreement, shall have subordinated such
indebtedness to the Obligations, by executing a
Subordination of Debt Agreement, in the form of Exhibit
F hereto; and the Lender shall have received an
executed copy of any such Subordination of Debt
Agreement, certified by the corporate secretary of the
Company to be true and complete and in full force and
effect as of the date of the Advance.
4.2 Each Advance. The obligation of the Lender to
make the initial and each subsequent Advance under this
Agreement is subject to the satisfaction, in the sole
discretion of the Lender, as of the date of each such
Advance, of the following additional conditions precedent:
4.2(a) The Company shall have delivered to
the Lender a Note in the amount of the requested
Advance.
4.2(b) The Company shall have delivered to
the Lender the Approval Request and the documents
called for thereunder, the Advance Request, the
Collateral Documents called for under, and shall have
satisfied the procedures set forth in, Section 2.2
hereof and the applicable Exhibits hereto described in
that Section. All items delivered to the Lender shall
be satisfactory to the Lender in form and content, and
the Lender may reject such of them as do not meet the
requirements of this Agreement or of the related
Purchase Commitment.
4.2(c) The Lender shall have received
evidence satisfactory to it as to the making and/or
continuation of any book entry or the due filing and
recording in all appropriate offices of all financing
statements and other instruments as may be necessary to
perfect the security interest of the Lender in the
Collateral under the Uniform Commercial Code of
Minnesota or other applicable law.
4.2(d) The representations and warranties
of the Company contained in Article 5 hereof shall be
accurate and complete in all material respects as if
made on and as of the date of each Advance.
4.2(e) The Company shall have performed
all agreements to be performed by it hereunder, and
after giving effect to the requested Advance, there
shall exist no Default or Event of Default hereunder.
4.2(f) The Company shall not have incurred
any material liabilities, direct or contingent, other
than in the ordinary course of its business, since the
Statement Date.
4.2(g) The Lender shall have received from
counsel for the Company , if requested by the Lender in
its sole discretion, an updated opinion, in form and
substance satisfactory to the Lender, addressed to the
Lender and dated as of the date of such Advance,
covering such of the matters as the Lender may
reasonably request.
Delivery of an Advance Request by the Company shall be
deemed a representation by the Company that all conditions
set forth in this Section 4.2 shall have been satisfied as
of the date of such Advance.
5. REPRESENTATIONS AND WARRANTIES.
The Company hereby represents and warrants to the
Lender, as of the date of this Agreement and as of the date
of each Advance Request and the making of each Advance,
that:
5.1 Organization; Good Standing; Subsidiaries. The
Company and each Subsidiary of the Company is a corporation
duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, has the
full legal power and authority to own its property and to
carry on its business as currently conducted and is duly
qualified as a foreign corporation to do business and is in
good standing in each jurisdiction in which the transaction
of its business makes such qualification necessary, except
in jurisdictions, if any, where a failure to be in good
standing has no material adverse effect on the business,
operations, assets or financial condition of the Company or
any such Subsidiary. For the purposes hereof, good standing
shall include qualification for any and all licenses and
payment of any and all taxes required in the jurisdiction of
its incorporation and in each jurisdiction in which the
Company transacts business. The Company has no Subsidiaries
except as set forth on Exhibit G hereto. Exhibit G sets
forth with respect to each such Subsidiary, its name,
address, place of incorporation, each state in which it is
qualified as a foreign corporation, and the percentage
ownership of its capital stock by the Company.
5.2 Authorization and Enforceability. The Company has
the power and authority to execute, deliver and perform this
Agreement, the Note relating to the requested Advance and
all other Loan Documents to which the Company is party and
to make the borrowings hereunder. The execution, delivery
and performance by the Company of this Agreement, the Note
relating to the requested Advance and all other Loan
Documents to which the Company is party and the making of
the borrowings hereunder and thereunder, have been duly and
validly authorized by all necessary corporate action on the
part of the Company (none of which actions has been modified
or rescinded, and all of which actions are in full force and
effect) and do not and will not conflict with or violate any
provision of law, of any judgments binding upon the Company,
or of the articles of incorporation or by-laws of the
Company, conflict with or result in a breach of or
constitute a default or require any consent under, or result
in the creation of any Lien upon any property or assets of
the Company other than the Lien on the Collateral granted
hereunder, or result in or require the acceleration of any
indebtedness of the Company pursuant to any agreement,
instrument or indenture to which the Company is a party or
by which the Company or its property may be bound or
affected. This Agreement, the Note relating to the
requested Advance and all other Loan Documents contemplated
hereby or thereby constitute legal, valid, and binding
obligations of the Company, enforceable in accordance with
their respective terms, except as limited by bankruptcy,
insolvency or other such laws affecting the enforcement of
creditors' rights.
5.3 Approvals. The execution and delivery of this
Agreement, the Note relating to the requested Advance and
all other Loan Documents and the performance of the
Company's obligations hereunder and thereunder and the
validity and enforceability hereof and thereof do not
require any license, consent, approval or other action of
any state or federal agency or governmental or regulatory
authority other than those which have been obtained and
remain in full force and effect.
5.4 Financial Condition. The balance sheet of the
Company (and, if applicable, its Subsidiaries, on a
consolidated basis) as at the Statement Date, and the
related statements of income and changes in stockholders'
equity for the fiscal period ended on the Statement Date,
heretofore furnished to the Lender, fairly present the
financial condition of the Company (and its Subsidiaries) as
at the Statement Date and the results of its operations for
the fiscal period ended on the Statement Date. At the
present time there are no material unrealized or anticipated
losses from any loans, advances or other commitments of the
Company except as heretofore disclosed to the Lender in
writing. Said financial statements were prepared in
accordance with GAAP applied on a consistent basis
throughout the periods involved. Since the Statement Date,
there has been no material adverse change in the business,
operations, assets or financial condition of the Company
(and its Subsidiaries), nor is the Company aware of any
state of facts which (with or without notice or lapse of
time or both) would or could result in any such material
adverse change.
5.5 Litigation. There are no actions, claims, suits
or proceedings pending or, to the knowledge of the Company,
threatened or reasonably anticipated against or affecting
the Company or any Subsidiary of the Company in any court or
before any arbitrator or before any government commission,
board, bureau or other administrative agency which may
reasonably be expected to result in any material and adverse
change in the business, operations, assets or financial
condition of the Company as a whole, or which would affect
the validity or enforceability of this Agreement, the Notes
or any other Loan Document.
5.6 Compliance with Laws. Neither the Company nor any
Subsidiary of the Company is in violation of any provision
of any law, or of any judgment, award, rule, regulation,
order, decree, writ or injunction of any court or public
regulatory body or authority which might have a material
adverse effect on the business, operations, assets or
financial condition of the Company as a whole or which would
affect the validity or enforceability of this Agreement, the
Notes or any other Loan Document.
5.7 Regulations G and U. The Company is not engaged
principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing
or carrying Margin Stock, and no part of the proceeds of any
Advances made hereunder will be used to purchase or carry
any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock.
5.8 Investment Company Act. The Company is not an
"investment company" or controlled by an "investment
company" within the meaning of the Investment Company Act of
1940, as amended.
5.9 Payment of Taxes. The Company and each of its
Subsidiaries has filed or caused to be filed all federal,
state and local income, excise, property and other tax
returns with respect to the operations of the Company and
its Subsidiaries which are required to be filed, all such
returns are true and correct, and the Company and each of
its Subsidiaries has paid or caused to be paid all taxes as
shown on such returns or on any assessment, to the extent
that such taxes have become due, including, but not limited
to, all FICA payments and withholding taxes, if appropriate.
5.10 Agreements. Neither the Company nor any
Subsidiary of the Company 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 5.4 hereof.
Neither the Company nor any Subsidiary of the Company is in
default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any
agreement, instrument, or indenture which default could have
a material adverse effect on the business, operations,
properties or financial condition of the Company as a whole.
No holder of any indebtedness of the Company or of any of
its Subsidiaries has given notice of any asserted default
thereunder, and no liquidation or dissolution of the Company
or of any of its Subsidiaries and no receivership,
insolvency, bankruptcy, reorganization or other similar
proceedings relative to the Company or of any of its
Subsidiaries or any of its properties is pending, or to the
knowledge of the Company, threatened.
5.11 Title to Properties. The Company and each
Subsidiary of the Company has good, valid, insurable (in the
case of real property) and marketable title to all of its
properties and assets (whether real or personal, tangible or
intangible) reflected on the financial statements described
in Section 5.4 hereof, except for such properties and assets
as have been disposed of since the date of such financial
statements as no longer used or useful in the conduct of its
business or as have been disposed of in the ordinary course
of business, and all such properties and assets are free and
clear of all Liens except as disclosed in such financial
statements.
5.12 ERISA. All plans ("Plans") of a type described in
Section 3(3) of ERISA in respect of which the Company or any
Subsidiary of the Company is an "Employer," as defined in
Section 3(5) of ERISA, are in substantial compliance with
ERISA, and none of such Plans is insolvent or in
reorganization, has an accumulated or waived funding
deficiency within the meaning of Section 412 of the Internal
Revenue Code, and neither the Company nor any Subsidiary of
the Company has incurred any material liability (including
any material contingent liability) to or on account of any
such Plan pursuant to Sections 4062, 4063, 4064, 4201 or
4204 of ERISA; and no proceedings have been instituted to
terminate any such Plan, and no condition exists which
presents a material risk to the Company or a Subsidiary of
the Company of incurring a liability to or on account of any
such Plan pursuant to any of the foregoing Sections of
ERISA. No Plan or trust forming a part thereof has been
terminated since September 1, 1974.
5.13 Eligibility. The Company is approved and
qualified and in good standing as a lender or
seller/servicer, as set forth below, and meets all
requirements applicable to its status as such:
5.13(a) FHLMC approved seller/servicer of
Mortgage Loans, eligible to originate, purchase, hold,
sell and service Multifamily Mortgage Loans to be sold
to FHLMC.
5.14 Place of Business. The principal place of
business of the Company is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
5.15 Special Representations Concerning Collateral.
The Company hereby represents and warrants to the Lender, as
of the date of this Agreement and as of the date of each
Advance Request and the making of each Advance, that:
5.15(a) The Company is the legal and
equitable owner and holder, free and clear of all Liens
(other than Liens granted hereunder), of the Pledged
Mortgages and the Pledged Securities. All Pledged
Mortgages, Pledged Securities and Purchase Commitments
have been duly authorized and validly issued to the
Company, 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 the Lender, subject to no other Liens.
5.15(b) The Company has, and will continue
to have, the full right, power and authority to pledge
the Collateral pledged and to be pledged by it
hereunder.
5.15(c) Any Mortgage Loan and any related
document included in the Pledged Mortgages (1) has been
duly executed and delivered by the parties thereto at a
closing held not more than fifteen (15) days prior to
the date of the Advance Request for such Mortgage Loan,
(2) has been made in compliance with all applicable
requirements of the Real Estate Settlement Procedures
Act, Equal Credit Opportunity Act, the federal
Truth-In-Lending Act and all other applicable laws and
regulations, (3) is and will continue to be valid and
enforceable in accordance with its terms, without
defense or offset, (4) has not been modified or amended
except in writing, which writing is part of the
Collateral Documents, nor any requirements thereof
waived, (5) has been evaluated or appraised in
accordance with Title XI of FIRREA, and (6) complies
and will continue to comply with the terms of this
Agreement and with the related Purchase Commitment held
by the Company. Each Mortgage Loan has been fully
advanced in the face amount thereof and each Mortgage
is a first Lien on the premises described therein, and
has or will have a title insurance policy, in American
Land Title Association form or equivalent thereof, from
a recognized title insurance company, insuring the
priority of the Lien of the Mortgage and meeting the
usual requirements of Investors purchasing such
Mortgage Loans.
5.15(d) No default has occurred under any
Mortgage Loan to be included in the Pledged Mortgages,
and, if any default has occurred with respect to the
Pledged Mortgages, the Company will promptly notify the
Lender.
5.15(e) All fire and casualty policies
covering the premises encumbered by each Mortgage
included in the Pledged Mortgages (1) name and will
continue to name the Company and its successors and
assigns as the insured under a standard mortgagee
clause, (2) are and will continue to be in full force
and effect, and (3) afford and will continue to afford
insurance against fire and such other risks as are
usually insured against in the broad form of extended
coverage insurance from time to time available.
5.15(f) Pledged Mortgages secured by
premises located in a special flood hazard area
designated as such by the Director of the Federal
Emergency Management Agency and shall continue to be
covered by special flood insurance under the National
Flood Insurance Program.
5.15(g) Each Pledged Mortgage, against
which an Advance is made on the basis of a Purchase
Commitment, meets all requirements of such Purchase
Commitment. The Company shall assure that Pledged
Mortgages which are intended to be used in the
formation of Mortgage-backed Securities shall comply
or, prior to the formation of any such Mortgage-backed
Security, shall comply with the requirements of the
governmental instrumentality, department or agency
guaranteeing such Mortgage-backed Security.
5.16 Servicing. All of the Company's Servicing
Contracts are in full force and effect, and except as
otherwise indicated, are unencumbered by Liens. No default
or event which, with notice or lapse of time or both, would
become a default, exists under any such Servicing Contract.
6. AFFIRMATIVE COVENANTS.
The Company hereby covenants and agrees that, so long
as any Advance is outstanding or there remain any
Obligations to be paid or performed under this Agreement or
under any other Loan Document, the Company shall:
6.1 Payment of Notes. Punctually pay or cause to be
paid all Obligations payable hereunder and under the Notes
in accordance with the terms hereof and thereof.
6.2 Financial Statements and Other Reports. Deliver
to the Lender:
6.2(a) As soon as available and in any
event within ninety (90) days after the close of each
fiscal year of the Parent, statements of income,
changes in stockholders' equity and cash flows of the
Parent (and, if applicable, its Subsidiaries, on a
consolidated basis) for such year, and the related
balance sheet as at the end of such year (setting forth
in comparative form the corresponding figures for the
preceding fiscal year), all in reasonable detail and
accompanied by an opinion in form and substance
satisfactory to the Lender and prepared by an
accounting firm reasonably satisfactory to the Lender,
or other independent certified public accountants of
recognized standing selected by the Parent and
acceptable to the Lender, as to said financial
statements and a certificate signed by the chief
accounting officer of the Parent stating that said
financial statements fairly present the financial
condition and results of operations of the Parent (and,
if applicable, its Subsidiaries) as at the end of, and
for, such year.
6.2(b) As soon as available and in any
event within ninety (90) days after the close of each
fiscal year of the Company, statements of income,
changes in stockholders' equity and cash flows of the
Company (and, if applicable, its Subsidiaries, on a
consolidated basis) for such year, and the related
balance sheet as at the end of such year (setting forth
in comparative form the corresponding figures for the
preceding fiscal year), all in reasonable detail and a
certificate signed by the chief accounting officer of
the Company stating that said financial statements
fairly present the financial condition and results of
operations of the Company (and, if applicable, its
Subsidiaries) as at the end of, and for, such year.
Notwithstanding the above, if at any time the financial
statements of the Company are prepared by an
independent certified public accountant, then the
Company shall provide the audited financial statements
to the Lender.
6.2(c) As soon as available and in any
event within ninety (90) days after the close of each
fiscal year of the Company, an Annual Agreed Upon
Procedures Report prepared by an independent certified
public accountant which report certifies that the
Company was operating within FHLMC guidelines.
6.2(d) As soon as available and in any
event within ninety (90) days after the end of each
fiscal year of the Company, a consolidated report (the
"Loan Production Report") as of the end of the fiscal
year, presenting the total dollar volume and the number
of Mortgage Loans originated or purchased during the
fiscal year, specified by property type and loan type
or Investor (e.g. FHA, GNMA, FNMA, FHLMC and other.)
6.2(e) As soon as available and in any
event within forty-five (45) days after the close of
each calendar quarter, statements of income and changes
in stockholders' equity of the Company (and, if
applicable its Subsidiaries, on a consolidated basis)
for the period from the beginning of the Company's
fiscal year to the end of the immediately preceding
month, and the related balance sheet as at the end of
such calendar quarter, all in reasonable detail and
certified as to the fairness of presentation by the
chief accounting officer of the Company, subject,
however, to year-end audit adjustments.
6.2(f) As soon as available and in any
event within forty-five (45) days after the close of
each calendar quarter, a consolidated report (the
"Servicing Portfolio Report") as of the end of the
immediately preceding calendar quarter detailing the
Company's Servicing Portfolio (specified by investor,
type, recourse and non-recourse) which report shall
indicate Mortgage Loans which (A) are current and in
good standing, (B) are more than 30, 60 or 90 days past
due, respectively, (D) are the subject of pending
bankruptcy or foreclosure proceedings, or (E) have been
converted (through foreclosure or other proceedings in
lieu thereof) by the Company into real estate owned by
the Company.
6.2(g) As soon as available and in any
event within sixty (60) days after receipt thereof by
the Company, copies of the most recent audits completed
by FNMA, FHLMC or HUD. Copies of the most recent
Mortgage Bankers' Financial Reporting Forms (FHLMC Form
1055/FNMA Form 1002) which the Company shall have
filed.
6.2(h) From time to time, with reasonable
promptness, such further information regarding the
business, operations, properties or financial condition
of the Company as the Lender may reasonably request.
6.3 Maintenance of Existence; Conduct of Business.
Preserve and maintain its corporate existence in good
standing and all of its rights, privileges, licenses and
franchises necessary or desirable in the normal conduct of
its business, including, without limitation, its eligibility
as lender, seller/servicer and issuer described under
Section 5.13 hereof; conduct its business in an orderly and
efficient manner; maintain a net worth of acceptable assets
as required at any and all times for maintaining the
Company's status as a FHA, FNMA or FHLMC approved mortgagee
or GNMA issuer; and make no change in the nature or
character of its business or engage in any business in which
it was not engaged on the date of this Agreement.
6.4 Compliance with Applicable Laws. Comply with the
requirements of all applicable laws, rules, regulations and
orders of any governmental authority, a breach of which
could materially adversely affect its business, operations,
assets, or financial condition, except where contested in
good faith and by appropriate proceedings.
6.5 Inspection of Properties and Books. Permit
authorized representatives of the Lender to discuss the
business, operations, assets and financial condition of the
Company and its Subsidiaries with its officers and employees
and to examine its books of account and make copies or
extracts thereof, all at such reasonable times as the Lender
may request. The Company will instruct its accountants to
answer candidly any and all questions that the officers of
the Lender or any Participant or any authorized
representatives of the Lender or any Participant may address
to them in reference to the financial condition or affairs
of the Company and its Subsidiaries. The Company may have
its representatives in attendance at any meetings between
the officers or other representatives of the Lender or any
Participant and the Company accountants held in accordance
with this authorization. Notwithstanding the above, the
Lender and all Participants agree to give the Company prior
Notice before meeting with the Company's accountants.
6.6 Payment of Debt, Taxes, etc. Pay and perform all
obligations and indebtedness of the Company, and cause to be
paid and performed all obligations and indebtedness of its
Subsidiaries, promptly and in accordance with the terms
thereof and pay and discharge or cause to be paid and
discharged promptly all taxes, assessments and governmental
charges or levies imposed upon the Company or its
Subsidiaries or upon their respective income, receipts or
properties before the same shall become past due, as well as
all lawful claims for labor, materials and supplies or
otherwise which, if unpaid, might become a Lien or charge
upon such properties or any part thereof; provided, however,
that the Company and its Subsidiaries shall not be required
to pay taxes, assessments or governmental charges or levies
or claims for labor, materials or supplies for which the
Company or its Subsidiaries shall have obtained an adequate
bond or adequate insurance or which are being contested in
good faith and by proper proceedings which are being
reasonably and diligently pursued and for which proper
reserves have been created.
6.7 Insurance. Maintain (a) errors and omissions
insurance or mortgage impairment insurance, and blanket bond
coverage, with such companies and in such amounts as satisfy
prevailing HUD, FNMA, FHLMC and GNMA requirements applicable
to a qualified mortgage originating institution, and (b)
liability insurance and fire and other hazard insurance on
its properties, with responsible insurance companies
approved by the Lender, in such amounts and against such
risks as is customarily carried by similar businesses
operating in the same vicinity.
6.8 Closing Instructions. Indemnify and hold the
Lender harmless from and against any loss, including
reasonable attorneys' fees and costs, attributable to the
failure of a title insurance company, agent or approved
attorney to comply with the disbursement or instruction
letter or letters of the Company relating to any Mortgage
Loan. The Lender shall have the right to pre-approve the
closing instructions of the Company to the title insurance
company, agent or attorney in any case where the Mortgage
Loan to be created at settlement is intended to be
warehoused by the Company to be included as Collateral
pursuant hereto.
6.9 Subordination of Certain Indebtedness. Cause any
indebtedness of the Company, incurred after the date of this
Agreement, to any shareholder, director or officer of the
Company, or to any Affiliate of the Company or of any
Subsidiary of the Company, to be subordinated to all
Obligations, by the execution of a Subordination of Debt
Agreement in the form of Exhibit F hereto and deliver to the
Lender an executed copy of said Agreement, certified by the
corporate secretary of the Company to be true and complete
and in full force and effect.
6.10 Other Loan Obligations. Exhibit J hereto is a
true and complete list of all such lines of credit or
agreements with other lenders as of the date hereof and the
Company hereby agrees to give the Lender Notice of the
addition of new lines of credit or agreements.
6.11 Use of Proceeds of Advances. Use the proceeds of
each Advance solely for the purpose of financing or
purchasing Pledged Mortgages, including the issuance of
Mortgage-backed Securities based thereon.
6.12 Special Affirmative Covenants Concerning
Collateral. The Company hereby covenants and agrees that,
so long as any Advance is outstanding or there remain any
Obligations to be paid or performed under this Agreement or
under any other Loan Document, the Company shall:
6.12(a) Warrant and defend the right, title
and interest of the Lender in and to the Collateral
against the claims and demands of all Persons
whomsoever.
6.12(b) Service or cause to be serviced all
Mortgage Loans in accordance with the standard
requirements of the issuers of Purchase Commitments
covering the same and all applicable HUD, FNMA and
FHLMC requirements, including without limitation
taking all actions necessary to enforce the obligations
of the obligors under such Mortgage Loans. The Company
shall service or cause to be serviced all Mortgage
Loans backing Pledged Securities in accordance with
applicable governmental requirements and requirements
of issuers of Purchase Commitments covering the same.
The Company shall hold all escrow funds collected in
respect of Pledged Mortgages and Mortgage Loans backing
Pledged Securities in trust, without commingling the
same with non-custodial funds, and apply the same for
the purposes for which such funds were collected.
6.12(c) Execute and deliver to the Lender
such Uniform Commercial Code financing statements with
respect to the Collateral as the Lender may request.
The Company shall also execute and deliver to the
Lender such further instruments of sale, pledge or
assignment or transfer, and such powers of attorney, as
required by the Lender, and shall do and perform all
matters and things necessary or desirable to be done or
observed, for the purpose of effectively creating,
maintaining and preserving the security and benefits
intended to be afforded the Lender under this
Agreement. The Lender shall have all the rights and
remedies of a secured party under the Uniform
Commercial Code of Minnesota, or any other applicable
law, in addition to all rights provided for herein.
6.12(d) Notify the Lender within two (2)
Business Days of any default under, or of the
termination of, any Purchase Commitment relating to any
Pledged Mortgage, or Pledged Security.
6.12(e) Promptly comply in all respects
with the terms and conditions of all Purchase
Commitments, and all extensions, renewals and
modifications or substitutions thereof or thereto. The
Company will cause to be delivered to the Investor the
Pledged Mortgages and Pledged Securities to be sold
under each Purchase Commitment not later than three (3)
Business Days prior to the mandatory delivery date
thereof.
6.12(f) Maintain, at its principal office
or in a regional office approved by the Lender, or in
the office of a computer service bureau engaged by the
Company and approved by the Lender, and, upon request,
shall make available to the Lender the originals, or
copies in any case where the originals have been
delivered to the Lender or to an Investor, of its
Mortgage Notes and Mortgages included in Pledged
Mortgages, Mortgage-backed Securities delivered to the
Lender as Pledged Securities, Purchase Commitments, and
all related Mortgage Loan documents and instruments,
and all files, surveys, certificates, correspondence,
appraisals, computer programs, tapes, discs, cards,
accounting records and other information and data
relating to the Collateral.
7. NEGATIVE COVENANTS.
The Company hereby covenants and agrees that, so long
as any Advance is outstanding or there remain any
Obligations to be paid or performed, the Company shall not,
either directly or indirectly, without the prior written
consent of the Lender:
7.1 Contingent Liabilities. Assume, guarantee,
endorse, or otherwise become contingently liable for the
obligation of any Person except by endorsement of negotiable
instruments for deposit or collection in the ordinary course
of business and excluding the sale of Mortgage Loans with
recourse in the ordinary course of the Company's business.
7.2 Merger; Sale of Assets; Acquisitions. Except in
the ordinary course of business, liquidate, dissolve,
consolidate or merge or sell any substantial part of its
assets, or acquire any substantial part of the assets of
another.
7.3 Deferral of Subordinated Debt. During such time
as an Advance is outstanding hereunder, pay in advance of
the stated maturity thereof any Subordinated Debt of the
Company or, if a Default or Event of Default hereunder shall
have occurred, make any payment of any kind thereafter on
such Subordinated Debt until all Obligations have been paid
and performed in full and any applicable preference period
has expired.
7.4 Loss of Eligibility. Take any action that would
cause the Company to lose all or any part of its status as
an eligible lender, seller/servicer and issuer as described
under Section 5.13 hereof.
7.5 Debt to Tangible Net Worth Ratio. Permit the
ratio of Debt to Tangible Net Worth of the Company (and its
Subsidiaries, on a consolidated basis) at any time to exceed
20 to 1.
7.6 Minimum Tangible Net Worth. Permit Tangible Net
Worth of the Company (and its Subsidiaries, on a
consolidated basis) at any time to be less than Five Hundred
Thousand Dollars ($500,000).
7.7 Minimum Servicing Portfolio. Permit the Servicing
Portfolio of the Company to be less than Fifty Million
Dollars ($50,000,000).
7.8 Special Negative Covenants Concerning Collateral.
7.8(a) The Company shall not amend or
modify, or waive any of the terms and conditions of, or
settle or compromise any claim in respect of, any
Pledged Mortgages or Pledged Securities.
7.8(b) The Company shall not sell, assign,
transfer or otherwise dispose of, or grant any option
with respect to, or pledge or otherwise encumber
(except pursuant to this Agreement or as permitted
herein) any of the Collateral or any interest therein.
7.8(c) The Company shall not make any
compromise, adjustment or settlement in respect of any
of the Collateral or accept other than cash in payment
or liquidation of the Collateral.
8. DEFAULTS; REMEDIES.
8.1 Events of Default. The occurrence of any of the
following conditions or events shall be an event of default
("Event of Default"):
8.1(a) Failure to pay the principal of any
Advance when due, whether at stated maturity, by
acceleration, or otherwise; or failure to pay any
installment of interest on any Advance or any other
amount due under this Agreement within ten (10) days
after the due date; or failure to pay, within any
applicable grace period, the principal or interest on
any other indebtedness due the Lender; or
8.1(b) Failure of the Company or any of
its Subsidiaries to pay, or any default in the payment
of any principal or interest on, any other indebtedness
or in the payment of any contingent obligation within
any period of grace provided; breach or default with
respect to any other material term of any other
indebtedness or of any loan agreement, mortgage,
indenture or other agreement relating thereto, if the
effect of such breach or default is to cause, or to
permit the holder or holders thereof (or a trustee on
behalf of such holder or holders) to cause,
indebtedness of the Company or its Subsidiaries in the
aggregate amount of Fifty Thousand Dollars ($50,000) or
more to become or be declared due prior to its stated
maturity (upon the giving or receiving of notice, lapse
of time, both, or otherwise); or
8.1(c) Failure of the Company to perform
or comply with any term or condition applicable to it
contained in Sections 6.3, 6.11 and 6.12 or in any
Section of Article 7 of this Agreement; or
8.1(d) Any of the Company's
representations or warranties made or deemed made
herein or in any other Loan Document, or in any
statement or certificate at any time given by the
Company in writing pursuant hereto or thereto shall be
inaccurate or incomplete in any material respect on the
date as of which made or deemed made; or
8.1(e) The Company shall default in the
performance of or compliance with any term contained in
this Agreement other than those referred to above in
Subsections 8.1(a), 8.1(c) or 8.1(d) and such default
shall not have been remedied or waived within thirty
(30) days after the earliest of (i) receipt by the
Company of Notice from the Lender of such default, or
(ii) receipt by the Lender of Notice from the Company
of such default.
8.1(f) (1) A court having jurisdiction shall
enter a decree or order for relief in respect of the
Company, any Subsidiary of the Company in an
involuntary case under any applicable bankruptcy,
insolvency or other similar law in respect of the
Company, any Subsidiary of the Company now or hereafter
in effect, which decree or order is not stayed; or a
filing of a voluntary case under any applicable
bankruptcy, insolvency or other similar law in respect
of the Company, any Subsidiary of the Company has
occurred; any other similar relief shall be granted
under any applicable federal or state law; or (2) the
filing of any involuntary case in respect of the
Company, any Subsidiary of the Company or under any
applicable bankruptcy, insolvency or other similar law;
a decree or order of a court having jurisdiction for
the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer
having similar powers over the Company, any Subsidiary
of the Company, or over all or a substantial part of
their respective property, shall have been entered; or
the involuntary appointment of an interim or permanent
receiver, trustee or other custodian of the Company,
any Subsidiary of the Company for all or a substantial
part of their respective property; or the issuance of a
warrant of attachment, execution or similar process
against any substantial part of the property of the
Company, any Subsidiary of the Company, and the
continuance of any such events in Subsection (2) above
for sixty (60) days unless dismissed, bonded off or
discharged; or
8.1(g) The Company, any Subsidiary of the
Company shall consent to the entry of an order for
relief in an involuntary case, or to the conversion to
an involuntary case, under any such law, or shall
consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a
substantial part of its property; the making by the
Company, any Subsidiary of the Company of any
assignment for the benefit of creditors; or the
inability or failure of the Company, any Subsidiary of
the Company, or the admission by the Company, any
Subsidiary of the Company in writing of its inability,
to pay its debts as such debts become due; or
8.1(h) Failure of the Company to perform
any contractual obligations which it may have to
repurchase Mortgage Loans, if such obligations in the
aggregate exceed One Million Dollars ($1,000,000); or
8.1(i) Any money judgment, writ or warrant
of attachment, or similar process involving in any case
an amount in excess of One Hundred Thousand Dollars
($100,000) shall be entered or filed against the
Company or any of its Subsidiaries or any of their
respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of thirty
(30) days or in any event later than five (5) days
prior to the date of any proposed sale thereunder; or
8.1(j) Any order, judgment or decree shall
be entered against the Company decreeing the
dissolution or split up of the Company and such order
shall remain undischarged or unstayed for a period in
excess of twenty (20) days; or
8.1(k) Any Plan maintained by the Company
or any of its Subsidiaries shall be terminated within
the meaning of Title IV of ERISA or a trustee shall be
appointed by an appropriate United States district
court to administer any Plan, or the Pension Benefit
Guaranty Corporation (or any successor thereto) shall
institute proceedings to terminate any Plan or to
appoint a trustee to administer any Plan if as of the
date thereof the Company's liability or any such
Subsidiary's liability (after giving effect to the tax
consequences thereof) to the Pension Benefit Guaranty
Corporation (or any successor thereto) for unfunded
guaranteed vested benefits under the Plan exceeds the
then current value of assets accumulated in such Plan
by more than Twenty-Five Thousand Dollars ($25,000) (or
in the case of a termination involving the Company or
any of its Subsidiaries as a "substantial employer" (as
defined in Section 4001(a)(2) of ERISA) the withdrawing
employer's proportionate share of such excess shall
exceed such amount); or
8.1(l) The Company or any of its
Subsidiaries as employer under a Multiemployer Plan
shall have made a complete or partial withdrawal from
such Multiemployer Plan and the plan sponsor of such
Multiemployer Plan shall have notified such withdrawing
employer that such employer has incurred a withdrawal
liability in an annual amount exceeding Twenty-Five
Thousand Dollars ($25,000); or
8.1(m) The Company shall purport to
disavow its obligations hereunder or shall contest the
validity or enforceability hereof; or the Lender's
security interest on any portion of the Collateral
shall become unenforceable or otherwise impaired;
provided that, subject to the Lender's approval, no
Event of Default shall occur as a result of such
impairment if all Advances made against any such
Collateral shall be paid in full within ten (10) days
of the date of such impairment; or
8.1(n) (a) The Parent shall consent to the
appointment of a conservator or receiver or liquidator
in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or
relating to the Parent or of or relating to all or
substantially all of its property, or (b) a decree or
order of a court or agency or supervisory authority
having jurisdiction over the Parent for the appointment
of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or the winding
up or liquidation of its affairs, shall have been
entered against the Parent, or (c) the Parent shall
admit in writing its inability to pay its debts
generally as they become due, file a petition to take
advantage of any applicable insolvency or
reorganization statute, make any assignment for the
benefit of its creditors or voluntarily suspend payment
of its obligations; or
8.1(o) There shall be a material adverse
change in the financial condition, business or
operations of the Company.
8.2 Remedies.
8.2(a) Upon the occurrence of any Event of
Default described in Sections 8.1(f) or 8.1(g), the
unpaid principal amount of and accrued interest on the
Notes and all other Obligations shall automatically
become due and payable, without presentment, demand or
other requirements of any kind, all of which are hereby
expressly waived by the Company.
8.2(b) Upon the occurrence of any Event of
Default, other than those described in Sections 8.1(f)
and 8.1(g), the Lender may, by Notice to the Company,
declare all Obligations to be immediately due and
payable, whereupon the same shall forthwith become due
and payable, together with all accrued interest
thereon, and the obligation of the Lender to make any
Advances shall thereupon terminate.
8.2(c) Upon the occurrence of any Event of
Default, the Lender may also do any of the following:
(1) Foreclose upon or otherwise
enforce its security interest in and Lien on the
Collateral to secure all payments and performance
of the Obligations in any manner permitted by law
or provided for hereunder.
(2) Notify all obligors in respect
of Collateral that the Collateral has been
assigned to the Lender and that all payments
thereon are to be made directly to the Lender or
such other party as may be designated by the
Lender; settle, compromise, or release, in whole
or in part, any amounts owing on the Collateral,
any such obligor or any Investor or any portion of
the Collateral, on terms acceptable to the Lender;
enforce payment and prosecute any action or
proceeding with respect to any and all Collateral;
and where any such Collateral is in default,
foreclose on and enforce security interests in,
such Collateral by any available judicial
procedure or without judicial process and sell
property acquired as a result of any such
foreclosure.
(3) Act, or contract with a third
party to act, as servicer or subservicer of each
item of Collateral requiring servicing and perform
all obligations required in connection with
Servicing Contracts and Purchase Commitments, such
third party's fees to be paid by the Company.
(4) Require the Company to
assemble the Collateral and/or books and records
relating thereto and make such available to the
Lender at a place to be designated by the Lender.
(5) Enter onto property where any
Collateral or books and records relating thereto
are located and take possession thereof with or
without judicial process.
(6) Prior to the disposition of
the Collateral, prepare it for disposition in any
manner and to the extent the Lender deems
appropriate.
(7) Exercise all rights and
remedies of a secured creditor under the Uniform
Commercial Code of Minnesota or other applicable
law, including, but not limited to, selling or
otherwise disposing of the Collateral, or any part
thereof, at one or more public or private sales,
whether or not such Collateral is present at the
place of sale, for cash or credit or future
delivery, on such terms and in such manner as the
Lender may determine, including, without
limitation, sale pursuant to any applicable
Purchase Commitment. If notice is required under
such applicable law, the Lender will give the
Company not less than ten (10) days' notice of any
such public sale or of the date after which any
private sale may be held. The Company agrees that
ten (10) days' notice shall be reasonable notice.
The Lender may, without notice or publication,
adjourn any public or private sale or cause the
same to be adjourned from time to time by
announcement at the time and place fixed for the
sale, and such sale may be made at any time or
place to which the same may be so adjourned. In
case of any sale of all or any part of the
Collateral on credit or for future delivery, the
Collateral so sold may be retained by the Lender
until the selling price is paid by the purchaser
thereof, but the Lender shall not incur any
liability in case of the failure of such purchaser
to take up and pay for the Collateral so sold and,
in case of any such failure, such Collateral may
again be sold upon like notice. The Lender may,
however, instead of exercising the power of sale
herein conferred upon it, proceed by a suit or
suits at law or in equity to collect all amounts
due upon the Collateral or to foreclose the pledge
of and sell the Collateral or any portion thereof
under a judgment or decree of a court or courts of
competent jurisdiction, or both.
(8) Proceed against the Company on
the Notes.
8.2(d) The Lender shall incur no liability
as a result of the sale or other disposition of the
Collateral, or any part thereof, at any public or
private sale or disposition. The Company hereby waives
(to the extent permitted by law) any claims it may have
against the Lender arising by reason of the fact that
the price at which the Collateral may have been sold at
such private sale was less than the price which might
have been obtained at a public sale or was less than
the aggregate amount of the outstanding Advances and
the unpaid interest accrued thereon, even if the Lender
accepts the first offer received and does not offer the
Collateral to more than one offeree. Any sale of
Collateral pursuant to the terms of a Purchase
Commitment shall be deemed to have been made in a
commercially reasonable manner.
8.2(e) The Company acknowledges that
Mortgage Loans and Mortgage-backed Securities are
collateral of a type which is customarily sold on a
recognized market. The Company waives any right it may
have to prior notice of the sale of any Pledged
Mortgage or Pledged Security.
8.2(f) The Company specifically waives and
releases (to the extent permitted by law) any equity or
right of redemption, all rights of redemption, stay or
appraisal which the Company has or may have under any
rule of law or statute now existing or hereafter
adopted, and any right to require the Lender to (1)
proceed against any Person, (2) proceed against or
exhaust any of the Collateral or pursue its rights and
remedies as against the Collateral in any particular
order, or (3) pursue any other remedy in its power.
The Lender shall not be required to take any steps
necessary to preserve any rights of the Company against
holders of mortgages prior in lien to the Lien of any
Mortgage included in the Collateral or to preserve
rights against prior parties.
8.2(g) The Lender may, but shall not be
obligated to, advance any sums or do any act or thing
necessary to uphold and enforce the Lien and priority
of, or the security intended to be afforded by, any
Mortgage included in the Collateral, including, without
limitation, payment of delinquent taxes or assessments
and insurance premiums. All advances, charges, costs
and expenses, including reasonable attorneys' fees and
disbursements, incurred or paid by the Lender in
exercising any right, power or remedy conferred by this
Agreement, or in the enforcement hereof, together with
interest thereon, at the Default Rate, from the time of
payment until repaid, shall become a part of the
principal balance outstanding hereunder and under the
Notes.
8.2(h) No failure on the part of the
Lender to exercise, and no delay in exercising, any
right, power or remedy provided hereunder, at law or in
equity shall operate as a waiver thereof; nor shall any
single or partial exercise by the Lender of any right,
power or remedy provided hereunder, at law or in equity
preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. Without
intending to limit the foregoing, all defenses based on
the statute of limitations are hereby waived by the
Company to the extent permitted by law. The remedies
herein provided are cumulative and are not exclusive of
any remedies provided at law or in equity.
8.3 Application of Proceeds. The proceeds of any
sale, disposition or other enforcement of the Lender's
security interest in all or any part of the Collateral shall
be applied by the Lender:
First, to the payment of the costs and expenses of such
sale or enforcement, including reasonable compensation to
the Lender's agents and counsel, and all expenses,
liabilities and advances made or incurred by or on behalf of
the Lender in connection therewith;
Second, to the payment of interest accrued and unpaid
on the Notes;
Third, to the payment of any other Obligations due
(other than principal and interest) under the Notes or this
Agreement;
Fourth, to the payment of the outstanding principal
balance of the Notes; and
Finally, to the payment to the Company, or to its
successors or assigns, or as a court of competent
jurisdiction may direct, of any surplus then remaining from
such proceeds.
If the proceeds of any such sale, disposition or other
enforcement are insufficient to cover the costs and expenses
of such sale, as aforesaid, and the payment in full of all
Obligations, the Company shall remain liable for any
deficiency.
8.4 Lender Appointed Attorney-in-Fact. The Lender is
hereby appointed the attorney-in-fact of the Company, with
full power of substitution, for the purpose of carrying out
the provisions hereof and taking any action and executing
any instruments which the Lender may deem necessary or
advisable to accomplish the purposes hereof, which
appointment as attorney-in-fact is irrevocable and coupled
with an interest. Without limiting the generality of the
foregoing, the Lender shall have the right and power to give
notices of its security interest in the Collateral to any
Person, either in the name of the Company or in its own
name, to endorse all Pledged Mortgages or Pledged Securities
payable to the order of the Company, to change or cause to
be changed the book-entry registration or name of subscriber
or Investor on any Pledged Security, or to receive, endorse
and collect all checks made payable to the order of the
Company representing any payment on account of the principal
of or interest on, or the proceeds of sale of, any of the
Pledged Mortgages or Pledged Securities and to give full
discharge for the same.
8.5 Right of Set-Off. If the Company shall default in
the payment of the Notes or any Note, any interest accrued
thereon, or any other sums which may become payable
hereunder when due, or in the performance of any of its
other obligations or liabilities under this Agreement, the
Lender, shall have the right, at any time and from time to
time, without notice, to set-off and to appropriate or apply
any and all property or indebtedness of any kind at any time
held or owing by the Lender to or for the credit or the
account of the Company against and on account of the
Obligations, irrespective of whether or not the Lender shall
have made any demand hereunder and whether or not said
Obligations shall have matured.
9. NOTICES.
All notices, demands, consents, requests and other
communications required or permitted to be given or made
hereunder (collectively, "Notices") shall, except as
otherwise expressly provided hereunder, be in writing and
shall be delivered in person or telecopied or mailed, first
class or delivered by overnight courier, return receipt
requested, postage prepaid, addressed to the respective
parties hereto at their respective addresses hereinafter set
forth or, as to any such party, at such other address as may
be designated by it in a Notice to the other. All Notices
shall be conclusively deemed to have been properly given or
made when duly delivered, in person, by telecopy or by
overnight courier, or if mailed, on the date of receipt as
noted on the return receipt, addressed as follows:
if to the Company: AMRESCO CAPITAL CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: AMRESCO CAPITAL CORPORATION
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Lender: Residential Funding Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
10. REIMBURSEMENT OF EXPENSES; INDEMNITY.
The Company shall: (a) pay all out-of-pocket costs
and expenses of the Lender, including, without limitation,
reasonable fees and disbursements of counsel (including
allocated costs of internal counsel), in connection with the
preparation, negotiation, documentation, 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 the Lender and any holder of the
Notes from and against, any and all present and future
stamp, documentary and other similar taxes with respect to
the foregoing matters and save the Lender and the holder or
holders of the Notes harmless from and against any and all
liabilities with respect to or resulting from any delay or
omission to pay such taxes; (c) indemnify, pay and hold
harmless the Lender and any of its officers, directors,
employees or agents and any subsequent holder of the Notes
(collectively called the "Indemnitees") from and against any
and all liabilities, obligations, losses, damages,
penalties, judgments, suits, costs, expenses and
disbursements of any kind or nature whatsoever (including
without limitation, the reasonable fees and disbursements of
counsel of the Indemnitees (including allocated costs of
internal counsel) in connection with any investigative,
administrative or judicial proceeding, whether or not such
Indemnitees shall be designated a party thereto) which may
be imposed upon, incurred by or asserted against such
Indemnitees in any manner relating to or arising out of this
Agreement, the Notes, or any other Loan Document or any of
the transactions contemplated hereby or thereby (the
"Indemnified Liabilities"); provided, however, that the
Company shall have no obligation hereunder with respect to
Indemnified Liabilities arising from the gross negligence or
willful misconduct of any such Indemnitees. To the extent
that the undertaking to indemnify, pay and hold harmless as
set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, the
Company shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the
payment and satisfaction of all Indemnified Liabilities
incurred by the Indemnitees or any of them. The agreement
of the Company contained in this Subsection (c) shall
survive the expiration or termination of this Agreement and
the payment in full of the Obligations. Attorneys' fees and
disbursements incurred in enforcing, or on appeal from, a
judgment pursuant hereto shall be recoverable separately
from and in addition to any other amount included in such
judgment, and this clause is intended to be severable from
the other provisions of this Agreement and to survive and
not be merged into such judgment.
11. FINANCIAL INFORMATION.
All financial statements and reports furnished to the
Lender hereunder shall be prepared in accordance with GAAP,
applied on a basis consistent with that applied in preparing
the financial statements as at the end of and for the last
fiscal year ended (except to the extent otherwise required
to conform to good accounting practice).
12. MISCELLANEOUS.
12.1 Terms Binding Upon Successors; Survival of
Representations. The terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
All representations, warranties, covenants and agreements
herein contained on the part of the Company shall survive
the making of any Advance and the execution of the Notes,
and shall be effective so long as there remain any
Obligations to be paid or performed.
12.2 Assignment. This Agreement may not be assigned by
the Company. This Agreement and the Notes along with the
Lender's security interest in any or all of the Collateral,
may, at any time, be transferred or assigned, in whole or in
part, by the Lender, and any assignee thereof may enforce
this Agreement, the Notes and such security interest.
12.3 Amendments. Except as otherwise provided in this
Agreement, this Agreement may not be amended, modified or
supplemented unless such amendment, modification or
supplement is set forth in a writing signed by the parties
hereto.
12.4 Governing Law. This Agreement and the other Loan
Documents shall be governed by the laws of the State of
Minnesota, without reference to its principles of conflicts
of laws.
12.5 Participations. The Lender may at any time sell,
assign or grant participations in, or otherwise transfer to
any other Person (a "Participant"), all or part of the
Obligations. Without limitation of the exclusive right of
the Lender to collect and enforce such Obligations, the
Company agrees that each disposition will give rise to a
debtor-creditor relationship of the Company to the
Participant, and the Company authorizes each Participant,
upon the occurrence of an Event of Default, to proceed
directly by right of setoff, banker's lien, or otherwise,
against any assets of the Company which may be in the hands
of such Participant. The Company authorizes the Lender to
disclose to any prospective Participant and any Participant
any and all information in the Lender's possession
concerning the Company, this Agreement and the Collateral;
provided, however, that the Lender shall give the Company
five (5) Business Days prior Notice before such information
is provided to a prospective Participant, such Notice to
identify the prospective Participant and the Lender shall
give the Company Notice of a sale of a participation within
five (5) Business Days thereafter, (however, the Lender's
failure to so notify the Company shall in no way affect or
impact such sale).
12.6 Relationship of the Parties. This Agreement
provides for the making of Advances by the Lender, in its
capacity as a lender, to the Company, in its capacity as a
borrower, and for the payment of interest, repayment of
principal by the Company to the Lender, and for the payment
of certain fees by the Company to the Lender. The
relationship between the Lender and the Company is limited
to that of creditor/secured party, on the one hand, and
debtor, on the other hand. The provisions herein for
compliance with financial covenants and delivery of
financial statements are intended solely for the benefit of
the Lender to protect its interests as lender in assuring
payments of interest and repayment of principal and payment
of certain fees, and nothing contained in this Agreement
shall be construed as permitting or obligating the Lender to
act as a financial or business advisor or consultant to the
Company, as permitting or obligating the Lender to control
the Company or to conduct the Company's operations, as
creating any fiduciary obligation on the part of the Lender
to the Company, or as creating any joint venture, agency, or
other relationship between the parties hereto other than as
explicitly and specifically stated in this Agreement. The
Company acknowledges that it has had the opportunity to
obtain the advice of experienced counsel of its own choosing
in connection with the negotiation and execution of this
Agreement and to obtain the advice of such counsel with
respect to all matters contained herein, including, without
limitation, the provision for waiver of trial by jury. The
Company further acknowledges that it is experienced with
respect to financial and credit matters and has made its own
independent decisions to apply to the Lender for credit and
to execute and deliver this Agreement.
12.7 Severability. If any provision of this Agreement
shall be declared to be illegal or unenforceable in any
respect, such illegal or unenforceable provision shall be
and become absolutely null and void and of no force and
effect as though such provision were not in fact set forth
herein, but all other covenants, terms, conditions and
provisions hereof shall nevertheless continue to be valid
and enforceable.
12.8 Operational Reviews. From time to time upon
request, the Company shall permit the Lender or its
representative access to its premises and records for the
purpose of conducting a review of the Company's general
mortgage business methods, policies, and procedures,
auditing loan files and reviewing financial and operational
aspects of the Company's business.
12.9 Consent to Credit References. The Company hereby
consents to the disclosure of information regarding the
Company and its relationships with the Lender to Persons
making credit inquiries to the Lender. This consent is
revocable by the Company at any time upon Notice to the
Lender as provided in Section 9 hereof.
12.10 Consent to Jurisdiction. The Company hereby
agrees that any action or proceeding under the Loan
Documents, the Notes or any document delivered pursuant
hereto may be commenced against it in any court of competent
jurisdiction within the State of Minnesota, by service of
process upon the Company by first class registered or
certified mail, return receipt requested, addressed to the
Company at its address last known to the Lender. The
Company agrees that any such suit, action or proceeding
arising out of or relating to this Agreement or any other
such document may be instituted in the Hennepin County,
State District Court or in the United States District Court
for the District of Minnesota at the option of the Lender;
and the Company hereby waives any objection to the
jurisdiction or venue of any such court with respect to, or
the convenience of any court as a forum for, any such suit,
action or proceeding. Nothing herein shall affect the right
of the Lender to accomplish service of process in any other
manner permitted by law or to commence legal proceedings or
otherwise proceed against the Company in any other
jurisdiction or court.
12.11 Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed
an original, but all such counterparts shall together
constitute but one and the same instrument.
12.12 Entire Agreement. This Agreement, the Note
and the other Loan Documents represent the final agreement
among the parties hereto and thereto with respect to the
subject matter hereof and thereof, and may not be
contradicted by evidence of prior or contemporaneous oral
agreements among such parties. There are no oral agreements
among the parties with respect to the subject matter hereof
and thereof.
12.13 WAIVER OF JURY TRIAL. THE COMPANY AND THE
LENDER EACH HEREBY (a) COVENANTS AND AGREES NOT TO ELECT A
TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND
(b) WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT
THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST. THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN,
KNOWINGLY AND VOLUNTARILY, BY THE COMPANY AND THE LENDER,
AND THIS WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH
INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT OF A JURY
TRIAL WOULD OTHERWISE ACCRUE. THE LENDER AND THE COMPANY IS
EACH HEREBY AUTHORIZED AND REQUESTED TO SUBMIT THIS
AGREEMENT TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT
MATTER AND THE PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE
EVIDENCE OF THE FOREGOING WAIVER OF THE RIGHT TO JURY TRIAL.
FURTHER, THE COMPANY AND THE LENDER EACH HEREBY CERTIFIES
THAT NO REPRESENTATIVE OR AGENT OF THE OTHER PARTY,
INCLUDING THE OTHER PARTY'S COUNSEL, HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, TO ANY OF ITS REPRESENTATIVES OR
AGENTS THAT THE OTHER PARTY WILL NOT SEEK TO ENFORCE THIS
WAIVER OF RIGHT TO JURY TRIAL PROVISION.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
AMRESCO CAPITAL CORPORATION,
a Texas corporation
By:
Its:
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:
Its: Director
STATE OF _______________ )
) ss
COUNTY OF ______________ )
On , 19__ before me, a Notary Public,
personally appeared , the
of AMRESCO CAPITAL CORPORATION, a Texas corporation, personally
known to me (or proved to me on the basis of satisfactory
evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same
in his/her authorized capacity, and that by his/her signature on
the instrument the person, or the entity upon behalf of which the
person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public
(SEAL) My Commission Expires:
STATE OF _______________ )
) ss
COUNTY OF ______________ )
On , 19__ before me, a Notary Public,
personally appeared , the
Director of RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation, personally known to me (or proved to me on the basis
of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that
he/she executed the same in his/her authorized capacity, and that
by his/her signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public
(SEAL) My Commission Expires:
EXHIBIT A
PROJECT PROMISSORY NOTE
$ Date:
FOR VALUE RECEIVED, the undersigned, AMRESCO CAPITAL
CORPORATION, a Texas corporation, (the "Company"), hereby
promises to pay to the order of RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation (the "Lender" or, together with its
successors and assigns, the "Holder") whose principal place of
business is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as the Holder may
designate from time to time, the principal sum of
Dollars ($ ) (or the unpaid balance of all principal
advanced against this Project Promissory Note
(the "Note"), if that amount is less), and to pay interest on
said principal sum or such part thereof as shall remain unpaid
from time to time, from the date of the Advances relating to this
Note until repaid in full, and interest on all past due amounts,
both principal and accrued interest, at the rate and at the times
set forth in the Warehousing Credit and Security Agreement
described below, together with all other fees and charges due
under the Agreement. All payments hereunder shall be made in
lawful money of the United States and in immediately available
funds.
This Note is given to evidence an actual warehouse facility
in the above amount and is one of the Notes referred to in that
certain Warehousing Credit and Security Agreement ("the
Agreement") dated as of August 15, 1995, between the Company and
the Lender, as the same may be amended or supplemented from time
to time, and is entitled to the benefits thereof. Reference is
hereby made to the Agreement (which is incorporated herein by
reference as fully and with the same effect as if set forth
herein at length) for a description of the Collateral, a
statement of the covenants and agreements, a statement of the
rights and remedies and securities afforded thereby and other
matters contained therein. Capitalized terms used herein,
unless otherwise defined herein, shall have the meanings given
them in the Agreement.
Advances made under this Note shall be made to fund the
Project Mortgage Loan for the period from the date of this Note
to and including the earlier of (a) the date on which the Company
receives the proceeds of the sale or other disposition of the
Project Mortgage Loan, or (b) (the "Stated
Maturity Date"). All Advances under the Agreement shall
constitute a single indebtedness, and all of the Collateral shall
be security for this Note and all other Notes made by the Company
under the terms of the Agreement, and for the performance of all
the Obligations.
All remaining unpaid principal, accrued unpaid interest and
Warehousing Fees due and owing on this Note shall be finally due
and payable on the Stated Maturity Date or on any earlier date to
which the maturity of this Note is accelerated pursuant to the
provisions of the Agreement.
This Note may be prepaid in whole or in part at any time
without premium or penalty.
Should this Note be placed in the hands of attorneys for
collection, the Company agrees to pay, in addition to principal
and interest, fees and charges due under the Agreement, and all
costs of collecting this Note, including reasonable attorneys'
fees and expenses.
The Company hereby waive demand, notice, protest and
presentment.
This Note shall be construed and enforced in accordance with
the laws of the State of Minnesota, without reference to its
principles of conflicts of law.
IN WITNESS WHEREOF, the Company has executed this Note as of
the day and year first above written.
AMRESCO CAPITAL CORPORATION,
a Texas corporation
By:
Its:
STATE OF _______________ )
) ss
COUNTY OF ______________ )
On , 19__ before me, a Notary Public,
personally appeared , the
of AMRESCO CAPITAL CORPORATION, a Texas corporation, personally
known to me (or proved to me on the basis of satisfactory
evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same
in his/her authorized capacity, and that by his/her signature on
the instrument the person, or the entity upon behalf of which the
person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public
(SEAL) My Commission Expires:
EXHIBIT B
(INTENTIONALLY OMITTED)
EXHIBIT C-MF/TRANS
REQUEST FOR ADVANCE AGAINST MORTGAGE LOANS
CONVENTIONAL MULTIFAMILY MORTGAGE LOANS
FNMA FHLMC
Mortgage Company: AMRESCO CAPITAL CORPORATION
Loan No.: Warehouse Date:
Project Name: Contract/Pool No.:
Note Amount: Interest Rate:
Note Date:
Advance Amount:
Investor: Expiration Date:
Investor Purchase Price:
Title Company/Closing Agent:
Title Contact Person: Phone No.:
Security Rate: Issue Date: Maturity Date:
WIRE TRANSFER INFORMATION
Wire Amount: Date of Wire:
Receiving Bank: ABA No.:
City & State:
Credit Account Name: Number:
Advise: Phone:
REQUIRED DOCUMENTATION
Attached please find the following documents in connection with
the above request:
( ) Original Mortgage Note, endorsed by the Company in blank and
without recourse.
( ) Assignment of Mortgage in blank, in recordable form.
( ) Assignment of the security agreement, in blank.
( ) Assignment of the UCC financing statements in recordable
form.
( ) Copy of the title insurance commitment to issue title
insurance marked to show final policy exceptions.
( ) FHLMC Form 64A, FNMA Form 4257 or other Investor Commitment
(signed).
( ) Check payable to the Lender for the Warehousing Fee.
AMRESCO CAPITAL CORPORATION
AUTHORIZED SIGNATURE(S)
EXHIBIT D-CONV/▇▇▇▇
PROCEDURES AND DOCUMENTATION FOR WAREHOUSING
CONVENTIONAL MULTI-FAMILY MORTGAGE LOANS
The following procedures and documentation requirements must
be observed in all respects by the Company. All documents must
be satisfactory to Residential Funding Corporation, a Delaware
corporation (the "Lender") in its sole discretion. Terms used
below, which are not otherwise defined, shall have the meanings
given them in the Warehousing Credit and Security Agreement, as
amended, modified or renewed from time to time. The term
"Mortgagee" as used below shall have the same meaning as the term
"Company". The FNMA and FHLMC form numbers referred to herein
are for convenience only and the Company shall use the equivalent
forms required at the time of delivery of the Mortgage Loans or
Mortgage-backed Securities.
I. AT LEAST TEN BUSINESS DAYS PRIOR TO CLOSING:
The Lender must receive the following:
(1) A signed letter providing the following
information on each Mortgage Loan:
(a) Mortgagor's name;
(b) Project name;
(c) Case/Loan Number;
(d) Expected closing date;
(e) Closing amount;
(f) Name and address of Company's counsel to
be present at closing;
(g) Title company name, address and contact
person.
(2) Copy of Mortgagee's Commitment to Mortgagor.
(3) Copy of the signed and accepted letter of
commitment from the Investor to purchase the Mortgage
Loan.
II. AT LEAST ONE BUSINESS DAY PRIOR TO CLOSING:
The Lender must receive the following:
(1) Original signed Request for Advance (Exhibit C-MF).
(2) Original Mortgage Note, endorsed by the Company in
blank and without recourse.
(3) Original Lender escrow instruction letter to the
title company, countersigned by the title company
representative involved with the transaction (see
below).
(4) Assignment of Mortgage in blank, in recordable
form but unrecorded.
(5) Assignment of the security agreement in blank.
(6) Assignment of the UCC financing statements in
blank, in recordable form but unrecorded.
(7) For FHLMC-committed Conventional Multi-family
Mortgage Loans the signed Conventional Multifamily
Immediate Delivery Purchase Contract and Prior Approval
Conversion Amendment (FHLMC Form 64A).
(8) For FNMA-committed Conventional Multi-family
Mortgage Loans, a copy of the signed Mortgage Purchase
and Delivery Commitment (FNMA Form 4257).
(9) A copy of the title insurance Commitment to issue
a policy of title insurance marked to show the final
policy exceptions.
(10) Check payable to the Lender for the Warehousing
Fee.
Upon receipt of the letter required under Section I above,
in form and substance satisfactory to the Lender, the Lender
will issue its escrow instructions to the title company.
The funds representing the Advance, when wired by the
Lender, are to be held in the escrow account of the title
company and disbursed in accordance with the closing letter
of the Company or its counsel only as authorized by the
Lender in its escrow instructions. No funds will be
advanced by the Lender prior to its receipt of all documents
called for under Section II above. Disbursement will be
authorized only after the title company is prepared to issue
its title insurance policy, in an amount not less than the
amount of the Mortgage Note. In the event the Mortgage Loan
is not closed and the related Mortgage recorded by 3:00 p.m.
on the date of the Advance, the title company shall be
instructed to immediately return the funds to the Lender.
Written confirmation of the Lender's escrow instructions by
the title company will be required by the Lender before
making funds available.
III. ON THE NEXT BUSINESS DAY FOLLOWING CLOSING:
The Lender must receive the following:
(1) A duplicate original or copy of the title
insurance policy or binder certified true by the title
company.
(2) A copy of the Mortgage, certified true by the
title company.
IV. NO LATER THAN TWO BUSINESS DAYS PRIOR TO DELIVERY DATE:
The Lender must receive the following:
(1) Signed shipping instructions for the delivery of
the Mortgage Loan or Mortgage-backed Security. These
instructions must include the following:
(a) Name and address of the Investor to
which Loan Documents are to be shipped and
preferred method of delivery.
(b) Funding amount due the Company.
(c) For Mortgage-backed Securities
deliveries, signed Securities Delivery
Instructions form attached hereto as Schedule I.
(d) Delivery date.
(2) For FHLMC-committed Conventional Multi-family
Mortgage Loans, the following additional documents must
be received:
(a) Original Contract Delivery Summary
(FHLMC Form 381) marked to indicate that the
mortgages being delivered are subject to a
security interest.
(b) For cash payments, the signed original
Wire Transfer Authorization for a Cash Warehouse
Delivery (FHLMC Form 987), showing the Lender as
warehouse lender and specifying the cash
collateral account designated by the Lender as the
receiving account for loan purchase proceeds.
(c) For FHLMC Mortgage-backed Securities
payments, the original Settlement Information and
Delivery Authorization (FHLMC Form 939),
designating the Lender as the Warehouse Lender and
instructing FHLMC to deliver the Mortgage-backed
Securities to the Lender's custody account at
Chemical Bank NY (CHEMICAL NYC/GEOCUST/▇▇▇▇▇▇▇▇▇).
(d) Completed, but not signed, Warehouse
Lender Release of Security Interest (FHLMC Form
996), to be signed by the Lender.
(3) For FNMA-committed Conventional Multi-family
Mortgage Loans, the following documents must be
received:
(a) For cash payments, the signed original
Wire Transfer Request (FNMA Form 4639), showing
the cash collateral account designated by the
Lender as the receiving account for loan purchase
proceeds.
(b) For FNMA Mortgage-backed Security
payments, an original Delivery Schedule (FNMA Form
2014), instructing FNMA to issue the Mortgage-
backed Security in the name of the Company, to
deliver the Mortgage-backed Security to the
Lender's custody account at Chemical Bank NY
(CHEMICAL NYC/GEOCUST/▇▇▇▇▇▇▇▇▇), and bearing the
following instructions: "These instructions may
not be changed without the prior written approval
of Residential Funding Corporation, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ Director or ▇▇▇▇▇ ▇▇▇▇▇, Director."
(c) Executed bailee letter with Schedule A
(in form approved by FNMA and the Lender).
(4) The remainder of the documents required for
shipping to the Investor as specified by the Investor
or in the applicable Seller/Servicer Guide.
Upon instruction by the Company, the Lender will complete the
endorsement of the Mortgage Note in favor of the Investor and
make arrangements for delivery of the complete loan package, with
a bailee letter, to the office of the Investor specified by the
Company, or if applicable, to an Approved Custodian for the
Mortgage-backed Security to be issued. Upon receipt of a
Mortgage-backed Security, the Lender will deliver such Mortgage-
backed Security to the Investor which issued the Purchase
Commitment. Mortgage-backed Securities will be released to the
Investor only upon payment of the purchase proceeds to the
Lender. Cash proceeds of sales of Mortgage Loans and Mortgage-
backed Securities shall be applied to any amounts outstanding
under the Commitment. Provided no Default exists, the Lender
shall return any excess proceeds of the sale of Mortgage Loans or
Mortgage-backed Securities to the Company.
SCHEDULE I
RESIDENTIAL FUNDING CORPORATION
WAREHOUSING LENDING DIVISION
Security Delivery Instructions
INSTRUCTIONS MUST BE RECEIVED TWO (2) BUSINESS DAYS IN ADVANCE OF
PICK-UP/DELIVERY
BOOK-ENTRY DATE: ______________________ SETTLEMENT DATE:
ISSUER:________________________________ SECURITY: $
NO. OF CERTIFICATES: __________________ 1)
2)
3)
CUSIP #______________
Pool #_______________ MI#______________ Coupon Rate:
Issue Date:(M/D/Y) _________________________ Maturity
Date:(M/D/Y)
POOL TYPE (circle one):
GNMA: GNMA I GNMA II
FHLMC: FIXED ARM DISCOUNT NOTE
FNMA: FIXED ARM DISCOUNT NOTE DEBENTURES
REMIC
DELIVER TO:_______________________________ ( ) Versus Payment
_______________________________ DVP AMT. $
_______________________________ ( ) Free
Delivery
DELIVER TO:_______________________________ ( ) Versus Payment
_______________________________ DVP AMT. $
_______________________________ ( ) Free
Delivery
DELIVER TO:_______________________________ ( ) Versus Payment
_______________________________ DVP AMT. $
_______________________________ ( ) Free
Delivery
AUTHORIZED SIGNATURE:
TITLE:
EXHIBIT
E-MF/APPROVAL
APPROVAL REQUEST FOR ADVANCES
AGAINST MORTGAGE LOANS
Mortgage Company Name:
Date of Submission:
Investor: ____ FNMA ____ FHLMC _____ OTHER (FHA Loans)
Company Loan No.:
Project Name:
Estimated Note Amount:
Expected Warehouse Date:
Contract/Pool No.:
AUTHORIZED SIGNATURE(S)
Name:
Title:
Required Documentation:
Pursuant to Section 2.2(a) of the Warehousing Credit and Security Agreement
(the "Agreement"), attached please find the following documents in
connection with the above request:
1. Multifamily Loan Application (FNMA Form 1053/FHLMC Form 75)
or
FHA Firm Commitment to Insure
5. Officer's Certificate (Exhibit I-MF) as of
Based on the information provided herein, Residential Funding Corporation
approves the warehousing of the requested Mortgage Loan subject to the
satisfaction of the conditions set forth in Sections 4.1 and 4.2 of
the Agreement and with the procedures set forth in Exhibit D-CONV/▇▇▇▇
or Exhibit D-FHA/CONV to the Agreement.
APPROVED:
RESIDENTIAL FUNDING CORPORATION
By: Warehouse Interest Rate:
Its: Warehouse Advance Rate: %
APPROVAL DATE: Warehousing Fee:
EXHIBIT F
RESIDENTIAL FUNDING CORPORATION
SUBORDINATION OF DEBT AGREEMENT
, 19
To: Residential Funding Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as the "Lender")
The undersigned (hereinafter referred to as the "Creditor"),
creditor of AMRESCO CAPITAL CORPORATION, a Texas corporation
(hereinafter referred to as the "Company"), desires that the
Lender extend or continue to extend such financial accommodations
to the Company as the Company may require and as the Lender may
deem proper. For the purpose of inducing the Lender to grant,
continue or renew such financial accommodations, and in
consideration thereof, the Creditor agrees as follows:
1. That at the present time the Company is indebted to the
Creditor in the principal amounts set forth below:
PRINCIPAL AMOUNT
TYPE OF FACILITY OF DEBT FROM THE
OR LOAN COMPANY
_____________________________ _________________________
_____________________________ _________________________
_____________________________ _________________________
_____________________________ _________________________
_____________________________ _________________________
(Notes, if any, are to be delivered to the Lender)
2. That all claims of the Creditor against the Company now or
hereafter existing are and shall be at all times subject and
subordinate to any and all claims now or hereafter which the
Lender may have against the Company (and all extensions,
renewals, modifications, replacements and substitutions of
or for the same), for so long as any such claim or claims of
the Lender shall exist.
3. That the Creditor shall not (a) except to the extent
expressly permitted in Section 4 hereof, receive payment of
or collect, in whole or in part, or ▇▇▇ upon, any claim or
claims now or hereafter existing which the Creditor may hold
against the Company; (b) sell, assign, transfer, pledge,
hypothecate or encumber such claim or claims except subject
expressly to this Agreement; (c) enforce any lien the
Creditor may now or in the future have on any debt owing by
the Company to the Creditor; and/or (d) join in any petition
in bankruptcy, assignment for the benefit of creditors or
creditors' agreement, except as directed by the Lender, so
long as any claim of the Lender against the Company, or
commitment of the Lender to extend credit to the Company, is
in existence.
4. So long as no event described in clauses (a) through (d) of
Section 6 below (a "Liquidation Event") shall have occurred
and no default shall have occurred in payment or performance
of any obligation of the Company to the Lender, regularly
scheduled payments of interest and principal on the claims
of the Creditor may be made as and when the same become due
and payable (it being understood that no prepayment shall be
made of such claims and no modification or acceleration, for
default or otherwise, of such maturity dates shall be
permitted). After the occurrence of a Liquidation Event or
of default in payment or performance of any obligation of
the Company to the Lender, no interest and no principal
payments on the claims of the Creditor shall be made without
the prior written consent of the Lender. The subordination
of claims of the Creditor hereunder shall remain in effect
so long as there shall be outstanding any obligation of the
Company to the Lender (for this purpose, the Company shall
be deemed obligated to the Lender so long as the Lender
shall have outstanding any commitment to make any loan to
the Company, whether or not any such loan shall have been
made or advanced).
5. In the event that any Creditor receives a payment from the
Company in violation of the terms of this Agreement, such
Creditor (a) shall hold such money in trust for the benefit
of Lender, (b) shall segregate such payment from (and shall
not commingle such payment with any of) the other funds of
such Creditor, and (c) shall forthwith remit such payment to
Lender in the exact form received (but with any necessary
endorsement).
6. In case of (a) any assignment by the Company for the benefit
of creditors, (b) any bankruptcy proceedings instituted by
or against the Company, (c) the appointment of any receiver
for the Company's business or assets, or (d) any dissolution
or winding up of the affairs of the Company, the Company and
any assignee, trustee in bankruptcy, receiver, or other
person or persons in charge, are hereby directed to pay to
the Lender the full amount of the Lender's claim against the
Company before making any payment of principal or interest
to the Creditor and the Creditor hereby sells, transfers,
sets over and assigns to the Lender all claims the Creditor
may now or hereafter have against the Company and in any
security therefor, and the proceeds thereof, and all rights
to any payments, dividends or other distributions arising
therefrom. If the Creditor does not file a proper claim or
proof of debt in the form required in such proceeding prior
to thirty (30) days before the expiration of the time to
file such claim in such proceedings, then the Lender has the
right (but no obligation) to do so and is hereby authorized
to file an appropriate claim or claims for and on behalf of
the Creditor.
7. For violation of this Agreement, the Creditor shall be
liable to the Lender for all loss and damage sustained by
reason of such breach, and upon any such violation, the
Lender may accelerate the maturity of its claims against the
Company, at the Lender's option.
8. The Creditor will, at any time and from time to time,
promptly execute and deliver all further instruments and
documents, and take all further action, that may be
reasonably necessary in order to protect any right or
interest granted hereby or to enable the Lender to exercise
and enforce its rights and remedies hereunder.
9. The Creditor will not amend, extend or in any way modify the
terms of its claims against the Company, as such terms exist
as of the date of this Agreement, without the prior written
consent of the Lender. The Creditor agrees to provide to
the Lender, upon the occurrence thereof, notice of the
existence of any event of default (however defined or
described) under any document or agreement relating to its
claims against the Company, or any condition, act or event,
which with the giving of notice or the passage of time or
both would constitute an event of default (however defined
or described) thereunder.
10. All rights and interest of the Lender hereunder, and all
agreements and obligations of the Creditor hereunder, shall
remain in full force and effect irrespective of:
(a) any sale, assignment, pledge, encumbrance or other
disposition of the claims of the Lender against the Company
(the "Senior Claims") and/or any document or instrument
executed in connection therewith;
(b) any change in the time, manner or place of payment
of, or in any other terms of, all or any of the Senior
Claims, or any refinancing thereof, or any other amendment,
modification, extension or renewal of or waiver of or any
consent to departure from any document or instrument
relating thereto, including, without limitation, changes in
the terms of the repayment of loan proceeds, modifications,
extensions or renewals of payment dates, changes in interest
rate or the advancement of additional funds by the Lender in
its discretion; or
(c) any exchange, release or nonperfection of any
collateral, or any release or amendment or waiver of or
consent to departure from any guaranty, for all or any of
the Senior Claims.
11. This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment
or performance of all or any portion of the Senior Claims is
rescinded or must otherwise be returned by the Lender or any
other party to the documents relating thereto upon the
insolvency, bankruptcy or reorganization of any such party
or otherwise, all as though such payment had not been made.
12. The Creditor hereby waives promptness, diligence, notice of
acceptance and any other notice with respect to this
Agreement and any requirement that the Lender protect,
secure, perfect or insure any security interest or lien or
any property subject thereto or exhaust any right or take
any action against the Creditor or any other person or
entity or any collateral.
13. No failure on the part of the Lender to exercise, and no
delay in exercising, any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any
remedies provided by law.
14. No amendment or waiver of any provision of this Agreement
nor consent to any departure by the Creditor therefrom shall
in any event be effective unless the same shall be in
writing and signed by the Lender, and then such waiver or
consent shall be effective only in the specific instance and
for the specific purpose for which given.
15. The Creditor agrees to pay upon demand, to the Lender the
amount of any and all expenses, including the reasonable
fees and expenses of its counsel and all court costs and
other reasonable litigation expenses, including but not
limited to expert witness fees, document copying expenses,
exhibit preparation costs, and courier, postage and
communication expenses, which the Lender may incur in
connection with the exercise or enforcement of any of its
rights or interest hereunder.
16. All notices, request and demands that may be required or
otherwise provided for or contemplated under the terms of
this Agreement shall, whether or not so stated, be in
writing, and shall be given by any of the following means:
(a) personal delivery; (b) reputable overnight courier
service; or (c) registered or certified first class mail,
return receipt requested. Any notice, request or demand
sent pursuant to clause (a) above shall be deemed received
upon personal delivery, and if sent pursuant to clause (b)
shall be deemed received on the next business day following
delivery to the courier service, and if sent pursuant to
clause (c) shall be deemed received three (3) days following
deposit in the mail.
The addresses for notices are as follows:
If to the Creditor, addressed to:
If to the Lender, addressed to :
Residential Funding Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Warehouse Lending Officer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Such addresses may be changed by written notice to the other
parties given in the manner provided above.
17. This Agreement shall be governed in all respects by the laws
of the State of Minnesota and shall be binding upon and
shall inure to the benefit of the Creditor, the Lender and
the Company, and their respective heirs, executors,
administrators, personal representatives, successors and
assigns. This Agreement and any claim or claims of the
Lender pursuant hereto may be assigned by the Lender, in
whole or in part, at any time, without notice to the
Creditor or the Company.
(Creditor)
[THE FOLLOWING ACKNOWLEDGEMENT IS TO BE USED FOR A CORPORATION.]
STATE OF _______________ )
) ss
COUNTY OF ______________ )
On , _____ before me, a Notary Public,
personally appeared , the
of , personally known to me
(or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the
instrument the person, or the entity upon behalf of which the
person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public
(SEAL) My Commission Expires:
[THE FOLLOWING ACKNOWLEDGEMENT IS TO BE USED FOR AN INDIVIDUAL.]
STATE OF _______________ )
) ss
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this
_____ day of _________________, _____, by
.
Notary Public
My Commission Expires:
ACCEPTANCE OF SUBORDINATION OF DEBT
AGREEMENT BY THE COMPANY
The Company named in the Subordination of Debt Agreement set
forth hereinbefore, hereby (i) represents and warrants to the
Lender that it is presently indebted to the Creditor executing
said Subordination of Debt Agreement in the aggregate principal
amount of Dollars ($
); and (ii) accepts and consents to the Subordination of Debt
Agreement, and agrees to be bound by all of the provisions
thereof and to recognize all priorities and other rights granted
thereby to RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation, its successors and assigns, and to perform in
accordance therewith.
AMRESCO CAPITAL CORPORATION,
a Texas corporation
By:
Its:
Dated:
EXHIBIT G
SUBSIDIARIES
States
Qualified
to do
Name Incorporated Business Owned (%)
NONE
EXHIBIT H
FORM OF OPINION OF COUNSEL
Residential Funding Corporation
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Warehouse Facility (the "Loan") under Warehousing Credit and
Security Agreement (the "Agreement") by and between
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender") and AMRESCO CAPITAL CORPORATION, a Texas
corporation (the "Company") and secured by the "Collateral"
(as defined in the Agreement).
Gentlemen:
We are special counsel to the Company in connection with the
Loan. As counsel, we have prepared and/or examined the following
documents:
1. Executed copy of the Warehousing Credit and Security
Agreement (Multi-Family Mortgage Loans) by and between the
Company and the Lender, dated August 15, 1995 (the
"Agreement").
2. Undated UCC Financing Statements perfecting a security
interest in collateral, tangible and intangible.
3. The Articles of Incorporation of the Company, together with
amendments thereto, as certified by the Secretary of State
of the State of Texas.
4. The Bylaws of the Company, as certified on
, 19 by the Secretary of the Company as then being
complete, accurate and in effect.
5. Resolutions of the Board of Directors of the Company,
adopted at a meeting held on , 19 ,
as certified by the Secretary of the Company on
, 19 as then being complete, accurate and in effect,
authorizing the borrowing of the Loan and the execution and
delivery of and performance under the Agreement.
6. Certificate of Good Standing for the Company, dated
, 19 , issued by the Secretary of State of the State of
Texas.1
The above enumerated items, numbered 1 and 2 are
collectively referred to as the "Loan Documents."
The opinions which follow are subject to the following
assumptions, limitations and qualifications:
A. We have assumed the genuineness of all signatures, other
than of the Company and the Guarantor, the authenticity of
all documents submitted to us as originals, and the
conformity with the original documents of all documents
submitted to us as reproduced copies, and the authenticity
of all such latter documents.
B. We have assumed the organization, existence, good standing
and capacity of all persons and entities other than the
Company and the Guarantor, and that such parties, other than
the Company and the Guarantor, have the right, power and
authority to execute and deliver the Loan Documents and to
perform thereunder.
C. We have assumed that the Lender's obligations under the
Agreement are within the powers of the Lender and have been
duly and validly authorized and that the Agreement has been
duly executed and validly delivered by the Lender.
D. As to various questions of fact material to this opinion, we
have made such factual inquiries of the Company and the
Guarantor, and have examined such other documents and made
such examinations of applicable laws, as we have deemed
necessary for purposes of the opinions expressed herein.
However, where we state that a matter is to the best of our
knowledge, we have relied upon the written statements
[copies attached] of the Guarantor and the officers of the
Company, with no inquiry as to the facts other than as
necessary to establish that such reliance was reasonable on
our part.
Based upon such examinations and investigations, and such
other investigations and examinations as we have deemed necessary
for the purposes of the opinions expressed herein, and subject to
the assumptions stated above in paragraphs A through D,
inclusive, and in our capacity as special counsel for the Company
and the Guarantor, we are of the opinion that:
[Opinions Concerning Company]
1. The Company and each Subsidiary of the Company2 is a
corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is
incorporated and has the full legal power and authority to
own its property and to carry on its business as currently
conducted.
2. The Company and each Subsidiary of the Company is duly
qualified to do business as a foreign corporation and is in
good standing in all jurisdictions where the ownership of
its property or the conduct of its business makes such
qualification necessary.
3. The Company has the power and authority to execute, deliver
and perform the Loan Documents. The execution, delivery and
performance of the Loan Documents by the Company, including
without limitation, the borrowings under the Agreement and
the pledge of the Collateral, have been duly and validly
authorized by all necessary actions on the part of the
Company.
4. The Loan Documents have been duly executed and delivered by
the Company. The Loan Documents constitute the legal, valid
and binding obligations of the Company and are enforceable
in accordance with their respective terms against the
Company, except that enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other
similar laws affecting the rights of creditors, and the
enforceability of certain remedies provided for in the Loan
Documents may be to the exercise of judicial discretion.
5. Upon delivery to the Lender of those items of Collateral,
consisting of promissory notes secured by mortgages or deeds
of trust ("Pledged Mortgages") or mortgage-backed securities
("Pledged Securities"), or in the case of Pledged Securities
issued in book-entry form, or issued in certificated form
and delivered to a clearing corporation (as such term is
defined in the Uniform Commercial Code) or its nominee, upon
(a) registration of such Pledged Securities in the name of a
financial intermediary (as such term is defined in the
Uniform Commercial Code) in an account containing only
customer securities, (b) the notation of Lender's security
interest in such Pledged Securities on the records of such
financial intermediary, by book entry or otherwise, and (c)
the sending by such financial intermediary to the Lender of
confirmation of such notation, the Lender will have a valid
and perfected first security interest therein. We assume,
in giving this opinion, that such items of Collateral will
be owned by the Company and that, at the time the Lender's
security interest is noted on the records of any financial
intermediary, such Pledged Securities will be free of any
interest created through the Federal Reserve Bank, clearing
corporation and/or financial intermediary. With respect to
Pledged Mortgages, the laws of certain jurisdictions may
require the recordation of an assignment of such deeds of
trust or mortgages in order to perfect a security interest
in the deed of trust or mortgage (as opposed to the notes
secured thereby). If the Lender does not record its
assignment of deeds of trust or mortgages in such
jurisdictions, we express no opinion as to the Lender's
perfected security interest in such deeds of trust and
mortgages (as opposed to the notes secured thereby)
constituting part of the Collateral.
6. The execution, delivery and performance by the Company of
the Loan Documents, will not (i) conflict with or violate
any provision of the Articles of Incorporation or By-laws of
the Company; (ii) require any license, approval or other
action by any governmental authority that has not been
obtained; (iii) result in the creation of any lien, charge
or encumbrance upon any property or assets of the Company
other than in favor of the Lender; (iv) to the best of our
knowledge, result in a violation or breach of any term or
provision, constitute a default under, or result in or
require the acceleration of any indebtedness of the Company
pursuant to, any agreement or other instrument to which the
Company may be bound or to which the Company or any of its
property may be subject; or (v) to the best of our
knowledge, result in any violation of the provisions of any
law or any order of any court or any governmental agency, to
which the Company may be bound or to which the Company or
any of its property may be subject.
7. To the best of our knowledge, there are no actions, suits,
or proceedings pending or threatened against or affecting
the Company, in any court or before any arbitrator or
governmental authority which, if adversely determined, may
reasonably be expected to result in any material and adverse
change in the business, operations, assets or financial
condition of the Company as a whole.
8. To the best of our knowledge, the Company is not 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 which
might have a materially adverse effect on the business,
operations, assets or financial condition of the Company as
a whole.
9. To the best of our knowledge, the Company is not engaged
principally, or as one of its principal activities, in the
business of extending credit for the purpose of purchasing
or carrying stock subject to the provisions of Regulation G
of the Board of Governors of the Federal Reserve System.
10. To the best of our knowledge, the Company is not an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended.
11. To the best of our knowledge, the Company is not a party to
any agreement, instrument or indenture which materially and
adversely restricts the business, operations, assets or
financial condition of the Company.
12. To the best of our knowledge, (i) the Company is not in
default in the performance, observance or fulfillment of any
agreement, instrument, or indenture which default would have
a materially adverse effect on the business, operations,
properties or financial condition of the Company; (ii) no
holder of any indebtedness of the Company has given notice
of any asserted default under any agreement, instrument, or
indenture of the Company and no receivership, insolvency,
bankruptcy, reorganization or other similar proceedings
relative to the Company or any of the properties of the
Company is pending or threatened.
This opinion may be relied upon by you and your successors
and assigns and by any participant in the Loan.
All capitalized terms used herein, not otherwise defined
herein, shall have the meanings given such terms in the
Agreement.
Very truly yours,
By:
EXHIBIT I-MF
OFFICER'S CERTIFICATE
Reference is made to that certain Warehousing Credit and
Security Agreement between AMRESCO CAPITAL CORPORATION, a Texas
corporation, and RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation, dated as of August 15, 1995 (as the same may be
amended, modified, supplemented, renewed or restated from time to
time, the "Agreement"). All capitalized terms used herein and
all Section numbers given herein refer to those terms and
Sections set forth in the Agreement. This Officer's Certificate
is submitted to the Lenders pursuant to Section 2.2(a)(2).
The undersigned hereby certifies to the Lenders that as of
the close of business on , 19
("Statement Date",) and with respect to the Company and its
Subsidiaries on a consolidated basis:
1. As illustrated in the attached calculations supporting this
Officer's Certificate, the Company met the covenants set
forth in Sections 7.5, 7.6, and 7.7 of the Agreement, or if
the Company did not meet any of such covenants, a detailed
explanation is attached setting forth the nature and period
of the existence of the Default and the action the Company
has taken, is taking, and proposes to take with respect
thereto.
2. No payments in advance of the scheduled maturity date have
been made with respect to any Subordinated Debt. The
Company has incurred no Debt required to be subordinated
pursuant to Section 6.9.
3. There has been no transfer, directly or indirectly, of the
majority interest of outstanding capital stock of the
Company.
4. The Company was approved, qualified and in good standing as
a seller/servicer or issuer for the types of Mortgage Loans
it has originated since the last Statement Date.
5. No default has been declared under any line of credit or
agreement with any other lender, nor has any line of credit
or agreement with any other lender been terminated,
cancelled, reduced, or not renewed for cause, or if the
above has occurred a writing is attached containing the
details thereof.
6. No action, suit or proceeding has been instituted by or
against the Company or any of its Subsidiaries in any
federal or state court or before any commission or other
regulatory body (federal, state or local, domestic or
foreign) or if any proceeding has been threatened against
the Company or any of its Subsidiaries a writing is attached
containing the details thereof.
7. No filing, recording or assessment of any federal, state or
local tax Lien has been made against the Company, or any of
its assets or any of its Subsidiaries.
8. No transfer, loss or termination of any Servicing Contract
to which the Company is a party, or which is held for the
benefit of the Company has occurred or if a transfer, loss
or termination has occurred, the reason for such transfer,
loss or termination, if known to the Company.
9. No other action, event or condition of any nature which may
lead to or result in a material adverse effect upon the
business, operations, assets or financial condition of the
Company and its Subsidiaries or which, with or without
notice or lapse of time or both, would constitute a default
under any other agreement, instrument or indenture to which
the Company or any of its Subsidiaries is a party or to
which the Company or any of its Subsidiaries, its properties
or assets, may be subject has occurred.
10. I have reviewed the terms of the Agreement and have made, or
caused to be made under my supervision, a review in
reasonable detail of the transactions and conditions of the
Company (and, if applicable, its Subsidiaries) and that such
review has not disclosed the existence, and I have no
knowledge of the existence, of any Default or Event of
Default, or if any Default or Event of Default existed or
exists, a detailed explanation is attached specifying the
nature and period of the existence of the Default and the
action the Company has taken, is taking and proposes to take
with respect thereto.
Dated:
AMRESCO CAPITAL CORPORATION,
a Texas corporation
By:
Its:
CALCULATIONS SUPPORTING OFFICER'S CERTIFICATE
Company Name: AMRESCO CAPITAL CORPORATION and its Subsidiaries
Statement Date:
All financial calculations set forth herein are as of the
Statement Date.
I. TANGIBLE NET WORTH
A. Tangible Net Worth of the Company is:
Excess of total assets over total liabilities: $
Plus: Loan loss reserves: $
Plus: Subordinated Debt not due within one year
of the Statement Date (or any portion
thereof): $
Minus: Advances to owners, officers or
Affiliates: $
Minus: Investments in Affiliates: $
Minus: Assets pledged to secure liabilities
not included in Debt: $
Minus: Intangible assets: $
Minus: Any other HUD nonacceptable assets: $
Minus: Other assets unacceptable to the
Lender: $
TANGIBLE NET WORTH $
B. Requirements of Section 7.6 of the Agreement:
MINIMUM TANGIBLE NET WORTH OF $500,000.
C. Covenant Satisfied:____ Covenant Not
Satisfied:____
II. DEBT OF THE COMPANY
Total liabilities $
Minus: Loan loss reserves: $
Minus: Subordinated Debt not due within one year
of the Statement Date (or any
portion
thereof): $
Minus: Deferred taxes arising from capitalized
excess servicing fees: $
DEBT $
III. RATIO OF DEBT TO TANGIBLE NET WORTH
A. The ratio of Debt to Tangible Net Worth (II to
I.A) is:
to 1
B. Requirements of Section 7.5 of the Agreement:
The ratio of Debt to Tangible Net Worth shall not
exceed 20 to 1.
C. Covenant Satisfied:____ Covenant Not
Satisfied:____
IV. MINIMUM SERVICING PORTFOLIO
A. SERVICING PORTFOLIO OF THE COMPANY
IS: $
B. Requirements of Section 7.7 of the Agreement:
MINIMUM SERVICING PORTFOLIO OF $50,000,000.
C. Covenant Satisfied:____ Covenant Not
Satisfied:____
EXHIBIT J
SCHEDULE OF EXISTING LINES OF CREDIT
LENDER NAME COMMITMENT AMOUNT EXPIRATION DATE
(to be completed by Company)
EXHIBIT K
FORM FOR FUNDING BANK
LETTER AGREEMENT
(Letterhead of the Company)
August 15, 1995
The First National Bank of Chicago
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen:
The undersigned, AMRESCO CAPITAL CORPORATION (the
"Company"), hereby authorizes The FIRST NATIONAL BANK OF CHICAGO
(the "Funding Bank") to permit RESIDENTIAL FUNDING CORPORATION
(the "Lender") to debit and access information on the Company's
accounts held by the Funding Bank as outlined below. The Company
hereby directs and authorizes the Funding Bank to follow the
directions of the Lender in debiting such accounts.
The Company authorizes the Lender to access account
information from time to time for the Company's operating account
no. (the "Operating Account") for
the purpose of verifying balance information. In addition, the
Company requests that the Lender, and the Company hereby
authorizes the Lender, to debit the Operating Account to the
extent necessary to cover (a) wires to be initiated by the Lender
in accordance with the Company's instructions as set forth in the
Request for Advance for the purposes permitted in the Warehousing
Credit and Security Agreement ("Agreement") by and between the
Company and the Lender; and (b) for amounts due and owing to the
Lender, including but not limited to principal, interest and
fees.
Upon the termination or expiration of the Agreement, the
Company hereby authorizes the Lender to close the Operating
Account and any other accounts which have been established by the
Company and the Lender to facilitate transactions under the
Agreement, and the Company directs the Funding Bank to follow the
directions of the Lender in closing such accounts. The Company
hereby directs and authorizes the Funding Bank to follow all of
the foregoing instructions of the Lender.
Very truly yours,
AMRESCO CAPITAL CORPORATION,
a Texas corporation
By:
Its:
ACKNOWLEDGED AND AGREED THIS
DAY OF , .
THE FIRST NATIONAL BANK OF CHICAGO
By:
Its:
EXHIBIT A
UCC FINANCING STATEMENT
DEBTOR: AMRESCO CAPITAL CORPORATION
SECURED PARTY: RESIDENTIAL FUNDING CORPORATION
All of Debtor's right, title and interest in the following
(the "Collateral"):
(a) All Mortgage Loans covered by Purchase Commitments from
Investors other than FNMA, including all Mortgage Notes and
Mortgages evidencing such Mortgage Loans which from time to time
are delivered or caused to be delivered to the Secured Party
(including delivery to a third party on behalf of the Secured
Party), come into the possession, custody or control of the
Secured Party for the purpose of assignment or pledge or in
respect of which an Advance has been made by the Secured Party
("Pledged Mortgages");
(b) All Mortgage-backed Securities (the "Pledged
Securities") which are from time to time created in whole or in
part on the basis of the Mortgage Loans pledged to the Secured
Party and are delivered or caused to be delivered to, or are
otherwise in the possession of the Secured Party, its agent,
bailee or custodian as assignee or pledged to the Secured Party,
or for such purpose are registered by book-entry in the name of,
the Secured Party (including delivery to or registration in the
name of a third party on behalf of the Secured Party) or in
respect of which from time to time an Advance has been made by
the Secured Party;
(c) All commitments issued by the FHA to insure any
Mortgage Loans included in the Mortgage Loans pledged to the
Secured Party; all guaranties related to Pledged Securities; all
Purchase Commitments held by the Debtor covering the Mortgage
Loans pledged to the Secured Party or the Pledged Securities and
all proceeds resulting from the sale thereof to Investors
pursuant thereto; and all personal property, contract rights,
servicing and servicing fees and income or other proceeds,
amounts and payments payable to the Debtor as compensation or
reimbursement, accounts and general intangibles of whatsoever
kind relating to the Mortgage Loans pledged to the Secured Party,
the Pledged Securities, said FHA commitments and the Purchase
Commitments, and all other documents or instruments relating to
the Mortgage Loans pledged to the Secured Party and the Pledged
Securities, including, without limitation, any interest of the
Debtor 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 the
Mortgage Loans pledged to the Secured Party;
(d) All right, title and interest of the Debtor in and to
all escrow accounts, documents, instruments, files, surveys,
certificates, correspondence, appraisals, computer programs,
tapes, discs, cards, accounting records (including all
information, records, tapes, data, programs, discs and cards
necessary or helpful in the administration or servicing of the
Collateral) and other information and data of the Debtor relating
to the Collateral;
(e) All now existing or hereafter acquired cash delivered
to or otherwise in the possession of the Secured Party or its
agent, bailee or custodian or designated on the books and records
of the Debtor as assigned and pledged to the Secured Party;
(f) All cash and non-cash proceeds of the Collateral,
including all dividends, distributions and other rights in
connection with, and all additions to, modifications of and
replacements for, the Collateral, and all products and proceeds
of the Collateral, together with whatever is receivable or
received when the Collateral or proceeds thereof are sold,
collected, exchanged or otherwise disposed of, whether such
disposition is voluntary or involuntary, including, without
limitation, all rights to payment with respect to any cause of
action affecting or relating to the Collateral or proceeds
thereof.
Capitalized terms defined herein shall have the following
meanings:
"Advance" means a disbursement by the Secured Party to the
Debtor, including readvances of funds previously advanced to the
Debtor and repaid to the Secured Party.
"FHA" means the Federal Housing Administration and any
successor thereto.
"FHLMC" means the Federal Home Loan Mortgage Corporation and
any successor thereto.
"FNMA" means The Federal National Mortgage Association and
any successor thereto.
"GNMA" means the Government National Mortgage Association
and any successor thereto.
"Investor" means FNMA, FHLMC or a financially responsible
private institution which is deemed acceptable by the Secured
Party from time to time in its sole discretion.
"Mortgage" means a mortgage or deed of trust on improved
real property.
"Mortgage-backed Securities" means GNMA, FNMA or FHLMC
securities that are backed by Mortgage Loans.
"Mortgage Loan" means any loan evidenced by a Mortgage Note.
"Mortgage Note" means a note secured by a Mortgage.
"Purchase Commitment" means a written commitment, in form
and substance satisfactory to the Secured Party, issued in favor
of the Debtor by an Investor pursuant to which that Investor
commits to purchase Mortgage Loans or Mortgage-backed Securities.
"VA" means the Department of Veterans Administration and any
successor thereto.
THIS DOCUMENT WAS DRAFTED BY:
Residential Funding Corporation
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▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
CLOSING CHECKLIST
COMPANY: AMRESCO CAPITAL CORPORATION
DATE
RECEIVED EXCEPTION
1. Warehousing Credit and Security Agreement
a. Exhibit G (Subsidiaries)
b. Exhibit J (Schedule of Existing
Warehouse Lines)
2. UCC Financing Statements
3. Funding Bank Agreement
4. Company's Certificate of Secretary
a. Articles of Incorporation
certified by Secretary of State
b. Bylaws
c. Certificate of Good
Standing
from Secretary of State of
incorporation state
d. Certificate of Good
Standing
from Secretary of States
where
doing business
e. Incumbency Certificate
f. Corporate Resolutions
5. Opinion of Counsel for Company
6. Financial Statements of the Company
a. Audited dated April 30, 1995
7. Seller/Servicer Approvals required per
Section 5.10
a. FHLMC
8. Errors and Omissions Policies
9. Mortgage Bankers Blanket Bond Policy
10. Documentation Fee
11. Tax, lien and judgment search for:
a. Company
12. Disbursement, Payoff, and Operating
Accounts opened
13. Eligibility Memo (FOR RFC PURPOSES ONLY)
Account Officer: Date:
Regional Vice President: Date:
CERTIFICATE OF SECRETARY
OF
AMRESCO CAPITAL CORPORATION
I, the undersigned, hereby certify that I am the Secretary
of AMRESCO CAPITAL CORPORATION, a Texas corporation (the
"Company"), and have knowledge of the matters contained in this
Certificate and hereby certify that:
1. The Articles of Incorporation of the Company
attached to this Certificate as Exhibit "A", the
By-Laws of the Company attached to this
Certificate as Exhibit "B", and the Certificates
of Good Standing of the Company attached to this
Certificate as Exhibit "C" are true and correct
copies of the current Articles of Incorporation,
By-Laws, and Certificates of Good Standing of the
Company, have not been altered, modified or
amended and are still in full force and effect.
2. The Company is a corporation duly organized,
validly existing and in good standing under the
laws of the State of Texas (the jurisdiction where
it is incorporated) and has complied with all
certifications, filings and requirements necessary
to continue as a corporation in the State of Texas
and is qualified to do business as a foreign
corporation and in good standing in all
jurisdictions where the conduct of its business
makes such qualification necessary.
3. In connection with a multi-family warehouse
facility made to the Company by RESIDENTIAL
FUNDING CORPORATION, a Delaware corporation (the
"Lender"), the Company has the valid power and
authority to execute and deliver to the Lender the
Warehousing Credit and Security Agreement and such
other security documents as required by the
Lender.
4. The names of the officers of the Company and
any other persons authorized to act under the
resolutions attached hereto and their official
signatures are as shown on the Certificate of
Incumbency attached hereto as Exhibit "D".
5. The resolutions attached to this Certificate
as Exhibit "E" were duly adopted either: (a) by
unanimous written action of the Board of Directors
of the Company; or (b) at a meeting of the Board
of Directors of the Company held on the day
of , 19 , at which
meeting a quorum was present. I am the keeper of
the Minute Book of the Company and said
resolutions have been entered therein, have not
been altered, amended, repealed or rescinded, and
are now in full force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal
of the Company as of this _____ day of August, 1995.
Secretary
[SEAL]
EXHIBIT "A"
ARTICLES OF INCORPORATION
EXHIBIT "B"
BY-LAWS
EXHIBIT "C"
CERTIFICATE OF GOOD STANDING
EXHIBIT "D"
CERTIFICATE AS TO INCUMBENCY
TO: RESIDENTIAL FUNDING CORPORATION
I hereby certify to you that I am the duly elected and
qualified Secretary of AMRESCO CAPITAL CORPORATION, a Texas
corporation ("Company") and that, as such, I am authorized to
execute this Certificate on behalf of the Company. I further
certify that the persons named below are duly elected, qualified
and acting officers of the Company, holding on the date hereof
the respective titles set forth opposite their respective names,
and that the respective signatures set forth opposite their names
are their true and genuine signatures:
Name Title Signature
____________________ ________________ ____________________
____________________ ________________ ____________________
____________________ ________________ ____________________
____________________ ________________ ____________________
____________________ ________________ ____________________
____________________ ________________ ____________________
____________________ ________________ ____________________
____________________ ________________ ____________________
____________________ ________________ ____________________
____________________ ________________ ____________________
____________________ ________________ ____________________
____________________ ________________ ____________________
____________________ ________________ ____________________
____________________ ________________ ____________________
____________________ ________________ ____________________
____________________ ________________ ____________________
You may conclusively rely on this Certificate until formally
advised by a like Certificate of any changes herein.
IN WITNESS WHEREOF, I have hereunto executed this
Certificate on this _____ day of ____________________, 19___.
Secretary
EXHIBIT "E"
AMRESCO CAPITAL CORPORATION
RESOLUTIONS OF BOARD OF DIRECTORS
WHEREAS, AMRESCO CAPITAL CORPORATION, a Texas corporation
(the "Company"), proposes to borrow from RESIDENTIAL FUNDING
CORPORATION, a Delaware corporation (the "Lender"), a Delete
multi-family warehouse facility (the "Loan"); and
WHEREAS, to evidence the Loan, the Company proposes to
execute and deliver the following instruments, each dated as of
August 15, 1995 unless otherwise indicated (herein collectively
referred to as the "Loan Documents"):
(a) A Warehousing Credit and Security Agreement
(Multi-family Mortgage Loans) evidencing the Loan
and creating a security interest in the Collateral
defined therein in favor of the Lender;
(b) Undated Financing Statements perfecting a
security interest in collateral, tangible and
intangible;
copies of which have been presented to the Board of Directors of
the Company; and
WHEREAS, the Board of Directors of the Company have
determined that it will be in the best interests of the Company
for the Company to borrow the Loan.
RESOLVED, that these resolutions are enacted by the Board of
Directors of the Company on their behalf and on behalf of the
Company.
FURTHER RESOLVED, that the Company shall borrow the Loan to
be evidenced and secured by the Loan Documents.
FURTHER RESOLVED, that the Loan Documents in the form
presented to the Board of Directors of the Company are hereby
approved and copies thereof are filed in the records of the
Company with these Resolutions.
FURTHER RESOLVED, that any
(insert minimum number required to sign) of the following
officers of the Company:
(list titles of officers authorized), shall be and are
authorized, empowered and directed in the name of and on behalf
of the Company, to execute, acknowledge and deliver the Loan
Documents, and each of them, in the form approved by the Board of
Directors of the Company as aforesaid, with such changes therein
as may be acceptable to such officers, as conclusively evidenced
by their execution thereof.
FURTHER RESOLVED, that such officers shall be and are hereby
authorized, empowered and directed to do and perform each and
every act and execute any and all documents and instruments in
the name of the Company as may be necessary or desirable to
enable the Company to borrow the Loan and to carry out the
purpose and intent of the foregoing Resolutions.
FURTHER RESOLVED, that any
(insert minimum number required to sign) of the following
officers of the Company:
(list titles of officers authorized), shall be and are
authorized, empowered and directed in the name of and on behalf
of the Company, to execute, acknowledge and deliver any bailee
pledge agreements, advance requests, shipping requests, wire
transfer instructions, assignments, security delivery
instructions and trust receipts and to endorse notes in the name
of the Company, in any form prescribed by the Lender.
FURTHER RESOLVED, that the Company hereby authorizes the
Lender to accept the Company's bailee pledge agreements, advance
requests, shipping requests, wire transfer instructions and
security delivery instructions transmitted to the Lender via
facsimile or electronic transmission, and that said documents,
when transmitted by facsimile or electronic transmission, shall
have the same force and effect as the originals.
FURTHER RESOLVED, that these Resolutions shall remain in
full force and effect and the Lender shall be fully protected in
acting thereon until written notice of their change or revocation
has been duly given to and received by the Lender, and the Lender
is authorized to accept, and the Secretary of the Company shall
from time to time provide, signed certificates of the Secretary
setting forth any change of names of officers and other persons
authorized to act hereunder on behalf of the Company, which
certificates shall become a part of these Resolutions.
_______________________________
1A certificate of good standing, dated as of a date within
ninety (90) days of the date of the Agreement, for the state
where the Company is incorporated and for each state where the
Company is transacting business as a foreign corporation should
be listed.
2In the alternative, state that the Company has no
Subsidiaries.