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EXHIBIT 10(a)
FOURTH AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
dated as of July 10, 1998
by and among
SOURCE ONE MORTGAGE SERVICES CORPORATION
and
THE FIRST NATIONAL BANK OF CHICAGO,
individually and as Administrative Agent
and
CERTAIN OTHER LENDERS
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TABLE OF CONTENTS
PAGE
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RECITALS.................................................................... 1
ARTICLE I DEFINITIONS...................................................... 1
1.1 Definitions................................................... 1
1.2 Interpretation................................................ 26
1.3 Accounting Terms and Determinations........................... 26
ARTICLE II BORROWINGS...................................................... 26
2.1 Availability and Adjustments.................................. 26
2.2 Fees.......................................................... 28
2.3 Advances...................................................... 29
2.4 Discount Advances............................................. 30
2.5 Swingline Advances............................................ 32
2.6 Bid Loans, Approved GNMA Letters of Credit, and
Approved Rate Hedging Agreements.............................. 33
2.7 Rate after Maturity........................................... 35
2.8 Interest Payment Dates........................................ 35
2.9 Method of Selecting Rate Options and Interest
Periods....................................................... 36
2.10 Maximum Number of Eurodollar Loans............................ 37
2.11 Funding Procedures............................................ 37
2.12 Conversion and Continuation................................... 38
2.13 Optional Principal Payments................................... 39
2.14 Required Principal Payments................................... 40
2.15 Method of Payment............................................. 40
2.16 Notes; Telephonic Notices..................................... 40
2.17 General Provisions as to Payments............................. 41
2.18 Notification of Advances, Interest Rates and
Prepayments................................................... 41
2.19 Lending Installations......................................... 42
2.20 Non-Receipt of Funds by Agent................................. 42
ARTICLE III CHANGE IN CIRCUMSTANCES........................................ 43
3.1 Yield Protection............................................... 43
3.2 Availability of Rate Options................................... 45
3.3 Funding Indemnification........................................ 45
3.4 Lender Statements; Survival of Indemnity....................... 45
3.5 Lender Tax Agreement........................................... 46
ARTICLE IV COLLATERAL AND BORROWING BASE................................... 47
4.1 Eligible Collateral - Pledged Mortgages........................ 47
4.2 Eligible Collateral - Repurchased Agency Loans and
Receivables.................................................... 50
4.3 Eligible Collateral - Securities............................... 51
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4.4 Eligible Collateral - Servicing Sale Receivables.............. 51
4.5 Borrowing Base................................................ 52
4.6 Special Representations as to Pledged Warehouse
Collateral.................................................... 55
4.7 Special Covenants............................................. 57
4.8 Release of Collateral......................................... 60
4.9 Settlement Account............................................ 60
4.10 Termination................................................... 61
4.11 Transition from Existing Facility............................. 61
ARTICLE V CONDITIONS PRECEDENT............................................. 61
5.1 Initial Advance (Company)..................................... 61
5.2 Initial Advance (Lenders)..................................... 63
5.3 All Advances.................................................. 63
ARTICLE VI REPRESENTATIONS AND WARRANTIES.................................. 63
6.1 Organization, Corporate Powers, Etc........................... 63
6.2 Corporate Authority, Etc...................................... 64
6.3 Compliance with Laws.......................................... 64
6.4 Government Approvals.......................................... 65
6.5 Valid and Binding Obligations................................. 65
6.6 Financial Statements.......................................... 65
6.7 Litigation.................................................... 66
6.8 Use of Proceeds............................................... 66
6.9 Accuracy of Information....................................... 66
6.10 Accuracy of Representations and Warranties.................... 66
6.11 Investment Company............................................ 67
6.12 ERISA......................................................... 67
6.13 Tax Returns................................................... 67
6.14 Full Disclosure............................................... 67
6.15 GNMA, FHA, VA, FNMA, AND FHLMC Eligibility.................... 67
6.16 No Defaults................................................... 68
6.17 Year 2000 Compliance.......................................... 68
ARTICLE VII AFFIRMATIVE COVENANTS.......................................... 68
7.1 Payment of Debts, Taxes, Etc.; Maintenance of
Insurance...................................................... 68
7.2 Preservation of Corporate Existence............................ 69
7.3 Compliance with Laws, Etc...................................... 69
7.4 Requested Information.......................................... 69
7.5 Keeping of Records and Books of Account........................ 70
7.6 Maintenance of Approvals, Filings and Registrations............ 70
7.7 Reporting Requirements......................................... 70
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7.8 Indemnification............................................... 74
7.9 Maintenance of Net Worth...................................... 75
7.10 Federal Agency Approvals...................................... 75
7.11 Approved Investor Commitments................................. 75
7.12 Borrowing Base Certificate.................................... 76
7.13 Further Assurance............................................. 76
7.14 Maintenance of Properties..................................... 77
7.15 Payment of Taxes.............................................. 77
7.16 Year 2000 Compliance.......................................... 77
ARTICLE VIII NEGATIVE COVENANTS............................................ 77
8.1 Use of Proceeds............................................... 77
8.2 Compliance with Security Agreement............................ 78
8.3 Mergers; Subsidiaries......................................... 78
8.4 Sales......................................................... 78
8.5 Debt.......................................................... 79
8.6 Ratably Secured Debt.......................................... 80
8.7 Guarantees.................................................... 80
8.8 Investments................................................... 80
8.9 Leverage Ratios............................................... 82
8.10 Recourse Servicing............................................ 82
8.11 Liens......................................................... 82
8.12 Credit Requirement............................................ 85
8.13 Affiliate Transactions........................................ 85
8.14 Conduct of Business........................................... 85
8.15 FHA and other Approvals....................................... 85
8.16 Restricted Payments........................................... 85
8.17 Maintenance of Restricted FSA Securities...................... 87
8.18 Subordinated Debt Indenture................................... 87
ARTICLE IX THE AGENT....................................................... 88
9.1 Appointment and Authorization................................. 88
9.2 Agent and Affiliates.......................................... 88
9.3 Action by Agent............................................... 88
9.4 Consultation with Experts..................................... 89
9.5 Liability of Agent............................................ 89
9.6 Indemnification............................................... 89
9.7 Credit Decision............................................... 90
9.8 Resignation or Removal and Appointment of Successor
Agent......................................................... 90
9.9 Compensation.................................................. 91
9.10 Release of Collateral Documents............................... 91
9.11 Knowledge of Defaults......................................... 91
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TABLE OF CONTENTS
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ARTICLE X DEFAULTS......................................................... 92
10.1 Defaults..................................................... 92
10.2 Remedies..................................................... 94
10.3 Notice of Default............................................ 96
10.4 Application of Proceeds...................................... 96
10.5 Letter of Credit Cash Collateral Accounts.................... 97
ARTICLE XI BENEFIT OF AGREEMENT; ASSIGNMENTS;
PARTICIPATIONS.................................................. 98
11.1 Successors and Assigns....................................... 98
11.2 Participations............................................... 99
11.3 Assignments..................................................100
11.4 Dissemination of Information.................................101
11.5 Tax Treatment................................................101
ARTICLE XII MISCELLANEOUS..................................................102
12.1 Immediately Available Funds..................................102
12.2 Notices......................................................102
12.3 Survival and Termination of Agreement........................102
12.4 Fees and Expenses of the Lenders.............................103
12.5 Applicable Law...............................................103
12.6 Modification of Agreement....................................103
12.7 Non-Waiver of Rights by the Lenders..........................104
12.8 Dealings with the Company and its Affiliates.................105
12.9 Changes in GAAP..............................................105
12.10 Set-Off......................................................105
12.11 Counterparts.................................................106
12.12 Severability.................................................106
12.13 Headings.....................................................106
12.14 Entire Agreement.............................................106
12.15 Consent of Jurisdiction......................................107
12.16 Waiver of Jury Trial.........................................107
SCHEDULE 1 APPLICABLE MARGIN
SCHEDULE 2 FACILITY FEE RATE
EXHIBIT A LIST OF APPROVED INVESTORS
EXHIBIT B BORROWING BASE CERTIFICATE
EXHIBIT C COMMITMENTS AND COMMITMENT PERCENTAGES
EXHIBIT D FORM OF SECURITY AGREEMENT
EXHIBIT E-1 FORM OF NOTE
EXHIBIT E-2 FORM OF DISCOUNT NOTE
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TABLE OF CONTENTS
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EXHIBIT F METHOD OF DETERMINING WEIGHTED AVERAGE PURCHASE
PRICES
EXHIBIT G FORM OF BID LOAN NOTICE
EXHIBIT H FORM OF NEW/MODIFIED COMMITMENT SUPPLEMENT
EXHIBIT I FORM OF NON-LENDER BALANCE BANK SUPPLEMENT
EXHIBIT J FORM OF AP NOTICE
EXHIBIT K FORM OF OPINION LETTER
EXHIBIT L MATERIAL LITIGATION NOT REFERENCED IN
ANNUAL/QUARTERLY REPORTS
EXHIBIT M FORM OF TRANSITION MEMORANDUM
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FOURTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
This FOURTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is dated as
of July 10, 1998 by and among SOURCE ONE MORTGAGE SERVICES CORPORATION, a
Delaware corporation (the "Company"), the lenders identified on the signature
pages hereof, and THE FIRST NATIONAL BANK OF CHICAGO, a national banking
association ("First Chicago"), individually as a Lender and as administrative
agent for the Lenders.
RECITALS
This Fourth Amended and Restated Revolving Credit Agreement amends and
restates in its entirety that certain Third Amended and Restated Revolving
Credit Agreement dated as of July 25, 1997 by and among the Company, certain
wholly-owned Subsidiaries of the Company, First Chicago, and certain other
lenders, as amended and supplemented from time to time (as so amended and
supplemented, the "Existing Facility").
The revolving credit facility made available to the Company pursuant to
this Agreement shall be used (i) for originating, acquiring, and/or holding
residential mortgage loans, mortgage backed securities, and mortgage servicing
rights, (ii) as liquidity backup for the Company's commercial paper program, and
(iii) for general working capital and corporate purposes.
In consideration of the foregoing and for other good and valuable
consideration, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
Capitalized terms used in this Agreement shall have the
following meanings:
Additional Required Mortgage Documents: means the
instruments and documents described in Schedule B to the Security
Agreement.
Adjusted Consolidated Tangible Net Worth: means, as of any date of
determination thereof, the net worth of the Company and its consolidated
Subsidiaries on a consolidated basis as determined in accordance with GAAP ("Net
Worth"); less the sum (without duplication) of (a) any assets of the Company and
its consolidated Subsidiaries which would be treated as intangibles under GAAP
including, without limitation, any write-up of assets, good-will, research and
development costs, trade-marks, trade names, copyrights, patents and unamortized
debt discount and expenses, and (b) loans or other extensions of credit to
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of the Company or of any of its consolidated Subsidiaries other than Mortgage
Loans made to such Persons in the ordinary course of business and (c) the amount
of the Net Worth attributable to the book value of all Restricted FSA
Securities, determined in accordance with GAAP; plus one percent (1%) of the
then-current aggregate outstanding principal balance of all Mortgage Loans then
being serviced by the Company either for its own account with respect to Pledged
Items or for others under Servicing Agreements (excluding Subservicing
Agreements) to the extent the servicing rights relating to such Mortgage Loans
have not been capitalized and are thus not accounted for in the Company's net
worth as computed in accordance with GAAP.
Adjusted Commitment Percentage: means, for each Lender as of any date,
the quotient of (i) such Lender's General Commitment divided by (ii) the
Aggregate Commitment minus the Swingline Commitment, which Adjusted Commitment
Percentage shall initially be as set forth on Exhibit C for each Lender.
Advance: means a borrowing hereunder consisting of the aggregate amount
of Loans made to the Company by one or more of the Lenders hereunder pursuant to
Article II on any given Advance Date.
Advance Date: means a date on which an Advance is made
hereunder.
Advance Notice: is defined in Section 2.9.
Affiliate: means, as to any Person, any other Person
directly or indirectly Controlling, Controlled by or under direct
or indirect common Control with such Person.
Agent: means The First National Bank of Chicago in its
capacity as administrative agent for the Lenders hereunder, and
any successor Agent appointed pursuant to Article IX.
Aggregate Commitment: means, as of any date, the aggregate
of the Lenders' then-current General Commitments and Swingline
Commitments.
Agreement: means this Fourth Amended and Restated Revolving
Credit Agreement, as the same from time to time may be extended,
amended, supplemented, waived or modified.
Alternate Base Rate: means, on any day, a fluctuating rate of interest
per annum equal to the higher of (a) the Published Federal Funds Effective Rate
for such day plus the Applicable Margin, and (b) the Corporate Base Rate for
such day.
Alternate Base Rate Advance: means an Advance which bears
interest at the Alternate Base Rate.
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Alternate Base Rate Loan: means a Loan which bears interest
at the Alternate Base Rate.
AP Mortgage: means, on any date, any Pledged Mortgage which has been
identified in an AP Notice and for which the Collateral Agent has not received
the Required Mortgage Documents by such date.
AP Notice: means a written pledge substantially in the form of Exhibit J
to this Agreement executed by the Company and delivered by facsimile to the
Collateral Agent, specifically identifying all Mortgage Loans with respect to
which the Required Mortgage Documents are not being delivered on or before the
Pledge Date of such Mortgage Loan.
Applicable Margin: means, with respect to each Rate Option as of any
date, the applicable percentage per annum as set forth on Schedule 1 attached
hereto which is in effect on such date, changing as and when the Company's
then-current unsecured long-term debt rating by either S & P or ▇▇▇▇▇'▇ changes
as described therein.
Approved Equity Securities: means readily marketable securities owned
by the Company and approved by the Agent for purposes of inclusion in the
calculation of the Debt Threshold.
Approved GNMA Letter of Credit: means a letter of credit issued by an
Issuing Lender in favor of GNMA as a result of the failure by the Company to
satisfy all document submission requirements of GNMA in connection with the
certification or re-certification by GNMA of a pool of Mortgage Loans, which
letter of credit (and related reimbursement agreement and other documentation)
has been approved by the Agent pursuant to Section 2.6(b).
Approved GNMA Letter of Credit Obligations: means, as of any date, all
liabilities, whether actual or contingent, as of such date of the Company with
respect to Approved GNMA Letters of Credit, including, without limitation, the
undrawn face amount of the then outstanding Approved GNMA Letters of Credit and
the sum of all drawn amounts for which the Issuing Lenders have not yet been
reimbursed.
Approved Investor: means, as of any time, any of the institutions listed
on Exhibit A attached hereto and any other institution approved by the Agent,
provided that any such institutions listed on Exhibit A or previously approved
by the Agent may be eliminated as an Approved Investor by notice to the Company
from the Agent.
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Approved Investor Commitment: means a commitment issued by an Approved
Investor to purchase Mortgage Loans, to exchange Securities for Mortgage Loans
or to purchase Securities.
Approved MBS Custodian: is defined in Paragraph 7(b)(2)(iii) of the
Security Agreement.
Approved Rate Hedging Agreement: means a Rate Hedging Agreement
between the Company and a Lender which has been approved by the Agent pursuant
to Section 2.6(c).
Approved Secured Rate Hedging Obligations: means all obligations under
an Approved Rate Hedging Agreement that by the terms of such Approved Rate
Hedging Agreement are secured by the Collateral, subject to the terms set forth
in Section 2.6(c).
Assignment: means a duly executed assignment for the benefit of the
Secured Parties of a Mortgage, of the indebtedness secured thereby, and of all
documents and rights related to the related Mortgage Loan secured by such
Mortgage in accordance with the requirements of the Security Agreement.
Authorized Officer: means, with respect to the Company, the president,
chairman, chief financial officer, or other officer of the Company authorized
in writing to execute any particular statement, certificate or agreement on
behalf of the Company.
Bailee Letter: means a Bailee Letter substantially in the form of
Exhibit 4 to the Security Agreement.
Balance Bank: means any Lender or Non-Lender Balance Bank which makes a
Discount Advance.
Balance Bank Agreement: means (i) an agreement between each Balance Bank
and the Company which sets forth the fees, charges and other matters governing
Discount Loans requested from such Balance Bank in accordance with Section 2.4
herein, or (ii) an agreement between the Company and the Swingline Lender which
sets forth the fees, charges and other matters governing Swingline Buydown
Advances requested from the Swingline Lender in accordance with Section 2.5(b).
Bid Lender: is defined in Section 2.6(a).
Bid Loan: is defined in Section 2.6(a).
Bid Loan Notice: means, with respect to each Bid Loan, a notice
executed by the Company and the Bid Lender for such Bid Loan and delivered to
the Agent in the form of Exhibit G hereto.
Bid Rate: means the interest rate applicable to a Bid Loan which is to
be agreed upon by the Company and a Bid Lender and
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communicated to the Agent in the Bid Loan Notice for such Bid Loan.
Borrowing Base: is defined in Section 4.5.
Borrowing Base Certificate: means a certificate executed by the Chief
Financial Officer or Treasurer of the Company or other employees of the Company
so authorized in writing, an original of which shall be delivered to the Agent,
by such Chief Financial Officer or Treasurer in substantially the form attached
hereto as Exhibit B.
Borrowing Base Sublimits: is defined in Section 4.5.
Business Day: means (i) with respect to any borrowing, payment or rate
selection regarding a Eurodollar Advance or a Discount Advance, a day (other
than a Saturday or Sunday) on which banks are open for business in Chicago, Los
Angeles and New York and on which dealings in United States dollars are carried
on in the London interbank market and (ii) for all other purposes, a day (other
than a Saturday or Sunday) on which banks are open for business in Chicago, Los
Angeles, New York and Louisville, Kentucky.
Calculation Period: means, as of any date of determination, the fiscal
quarters of the Company elapsed since March 31, 1998, not to exceed the
immediately preceding four (4) full fiscal quarters.
Cash Equivalents: means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof, (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having the highest rating obtainable
from either S&P or ▇▇▇▇▇'▇, (iii) commercial paper maturing no more than 90 days
from the date of creation thereof and, at the time of acquisition, having the
highest rating obtainable from either S&P or ▇▇▇▇▇'▇, (iv) certificates of
deposit or bankers' acceptances maturing within one year from the date of
acquisition thereof issued by commercial banks organized under the laws of the
United States or any state thereof or the District of Columbia, each having
combined capital and surplus of not less than $500,000,000, and (v) reverse
repurchase obligations having terms not exceeding seven days entered into with
any financial institution meeting the qualifications specified in clause (iv)
above or with any securities dealer approved by the Agent, provided that there
is an investment agreement in effect pursuant
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to which the underlying securities are held by a sub-agent for the Collateral
Agent and all cash proceeds are payable directly to the Settlement Account.
Change in Control: means the acquisition by any Person, or two or more
Persons (other than Fund American Enterprises Holdings, Inc. or a wholly-owned
Subsidiary thereof) acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the SEC under the Securities Exchange Act of 1934) of
outstanding shares of voting stock of the Company at any time if after giving
effect to such acquisition (i) such Person or Persons owns twenty percent (20%)
or more of such outstanding voting stock, and (ii) Fund American Enterprises
Holdings, Inc. or a wholly-owned Subsidiary thereof does not own more than fifty
percent (50%) of such outstanding shares of voting stock.
Code: means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
Collateral: means all right, title and interest of the Company of every
kind and nature, in and to all of the following property, assets and rights of
the Company wherever located, whether now existing or hereafter arising, and
whether now or hereafter owned, acquired by or accruing or owing to the Company
and all proceeds and products thereof:
(i) all Pledged Mortgages;
(ii) all Pledged Securities;
(iii) any commitments or other agreements issued by any
private mortgage insurer or by the FHA or VA to insure or guarantee any
Pledged Mortgage;
(iv) all commitments of FNMA, FHLMC or other Persons to
purchase Pledged Items from the Company or exchange Securities with the
Company for Pledged Items;
(v) any options to sell or purchase Securities, future
contracts, or any other interest rate protection products which directly
or indirectly protect the Company against reductions in value of such
Pledged Items due to changes in mortgage interest rates;
(vi) the Settlement Account and any Custodian Settlement
Accounts and any amounts standing to the credit of the Settlement
Account and any Custodian Settlement Accounts then in existence with
Approved MBS Custodians, as described in Paragraph 7(c) of the Security
Agreement;
(vii) all VA Mortgage Loans or FHA Mortgage Loans (plus any
REO or accounts receivable from FHA or VA resulting
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therefrom, including guaranty claims against VA and insurance claims
against FHA or HUD) which are repurchased by the Company from Security
holders and pledged to the Collateral Agent as security for the Secured
Debt;
(viii) Pledged Servicing Sale Receivables;
(ix) cash and Cash Equivalents held by the Agent or
Collateral Agent as security for the Secured Debt; and
(x) all property and proceeds related to the foregoing,
including without limitation, the right to service Pledged Mortgages
while owned by the Company, all files, surveys, certificates,
correspondence, appraisals, computer programs, tapes, disks, cards,
accounting records and other records and data of the Company related to
the Pledged Mortgages, all accounts and general intangibles of
whatsoever kind so related and all documents or instruments delivered to
the Agent or the Collateral Agent in respect of any Pledged Item,
including, without limitation, the right to receive all insurance
proceeds and condemnation awards which may be payable in respect of the
premises encumbered by any Pledged Mortgage.
Collateral Agent: means National City Bank of Kentucky or its
successor, as Collateral Agent under the Security Agreement.
Collateral Agent Review Procedure: means the required review steps set
forth in Exhibit 1 to the Security Agreement.
Collateral Transmittal: means a transmittal from the Pledgor to the
Collateral Agent in electronic form and, if required by the Collateral Agent,
written form of the following information for the following submissions or
special treatment of different types of Collateral: (i) the information
described on Exhibit 7 to the Security Agreement for each AP Mortgage covered by
any AP Notice, (ii) the information described on Exhibit 7 to the Security
Agreement (other than the "AP Code") for each Pledged Mortgage not covered by an
AP Notice, or (iii) such information as may be required from time to time by the
Collateral Agent for the different types of Securities for any Pledged Security.
Commitment: means either a General Commitment or a Swingline
Commitment.
Commitment Percentage: means, for each Lender as of any date, the
quotient of (i) the sum of such Lender's General Commitment and its Swingline
Commitment (if any), divided by (ii) the Aggregate Commitment, which Commitment
Percentage shall initially be as set forth on Exhibit C for each Lender.
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Company: means Source One Mortgage Services Corporation, a Delaware
corporation.
Company Trust Receipt: means a trust receipt substantially in the form
of Exhibit 2 to the Security Agreement.
Conforming Mortgage Loan: means a Residential Mortgage Loan that meets
all applicable requirements for sale to FNMA or FHLMC or for guaranty by GNMA.
Control: means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of another entity,
whether through the ownership of voting securities, by contract or otherwise.
Controlled Group: means all members of a controlled group of
corporations and all trades or business (whether or not incorporated) under
common control which, together with the Company, are treated as a single
employer under Section 414(b) or 414(c) of the Code.
Conversion/Continuation Notice: is defined in Section 2.12(iii).
Corporate Base Rate: means a rate per annum equal to the corporate base
rate of interest announced by First Chicago from time to time, changing when and
as such corporate base rate changes.
Credit Documents: means this Agreement, the Security Agreement, the
Notes, the Balance Bank Agreements, any Approved GNMA Letters of Credit and any
related reimbursement agreements, and all other documents and instruments now or
hereafter delivered to the Agent or the Lenders pursuant to or in connection
with the transactions contemplated hereby, and any amendments, supplements,
modifications, renewals, replacements, consolidations, substitutions and
extensions of any of the foregoing.
Credit Indebtedness: means, as of any date, the sum of (i) all amounts
owing under any of the Credit Documents (other than the Balance Bank Agreements)
to any of the Lenders, the Agent, or the Collateral Agent, plus (ii) to the
extent such fees have accrued within the three calendar months immediately
preceding such date, all deficiency fees owing to the Balance Banks under the
Balance Bank Agreements due to the Company's failure to maintain sufficient
deposits with such Balance Banks, plus (iii) the amount of all Approved Secured
Rate Hedging Obligations.
Credit Requirement: means, as of any date, the sum of (A) the
aggregate unpaid principal balance of all Loans then
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outstanding hereunder plus (B) the then current amount of Approved Secured Rate
Hedging Obligations, plus (C) the aggregate face amount of all Outstanding CPNs,
plus (D) the then current amount of Approved GNMA Letter of Credit Obligations.
Custodian Settlement Accounts: is defined in Paragraph 7(c) of the
Security Agreement.
Debt: means, with respect to any Person, as of any date of determination
thereof, without duplication, (i) all obligations of such Person for borrowed
money, including but not limited to money borrowed from any parent, subsidiary
or affiliate of such Person, whether or not evidenced by a promissory note, (ii)
all obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person to pay the deferred
purchase price of property or services, including without limitation the
obligation of such Person to pay any deferred purchase price for Servicing
Agreements acquired, (iv) all obligations of such Person as lessee under capital
leases, (v) all Debt of others secured by a Lien on any asset of such Person,
whether or not such Debt is assumed by such Person, (vi) all Debt of others
Guaranteed by such Person, (vii) all on-balance-sheet obligations of such Person
under repurchase agreements covering Securities or pools of Mortgage Loans,
(viii) the Approved Secured Rate Hedging Obligations, and (ix) all obligations
of such Person to fund the origination or acquisition of Mortgage Loans
represented by uncleared loan funding checks or drafts payable to the mortgagor
or seller of such Mortgage Loans, as the case may be; provided that Debt shall
not include Mortgage-Related Indebtedness.
Debt Threshold: is defined in Section 8.5.
Default: means an Event of Default or any event or condition that with
the giving of notice or the passage of time or both would constitute an Event
of Default.
Discount Advance: means an Advance made on a discounted basis by a
Balance Bank, a portion of which (or all of which, in the case of Discount
Advances made by Non-Lender Balance Banks) shall be simultaneously sold to the
other Lenders, all pursuant to Section 2.4 hereof, and to be repaid at the end
of the applicable Discount Loan Period.
Discount Loan: means any Loan constituting a portion of a Discount
Advance.
Discount Loan Period: means, with respect to a Discount Loan, a period
of one month commencing on the Advance Date for such Discount Loan and ending
on the corresponding day in the next month. If a Discount Loan Period would
otherwise end on a day which is not a Business Day, such Discount Loan Period
shall
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end on the next succeeding Business Day, provided, however, (i) if said next
succeeding Business Day falls in a new calendar month, such Discount Loan Period
shall end on the immediately preceding Business Day, and (ii) no Discount Loan
Period shall extend beyond the Termination Date.
Discount Note: means, a Note executed and delivered by the Company to
each Lender in the form of Exhibit E-2 hereof which shall evidence the Discount
Loans described in Section 2.4 hereof.
Discount Rate: means, with respect to any Discount Loan Period, a fixed
rate of interest equal to the Applicable Margin for Eurodollar Advances in
effect at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Discount Loan Period.
Eligible AP Mortgage: is defined in Section 4.1(c).
Eligible Collateral: means, as of any date without duplication, (i)
Eligible Delivered Mortgages, (ii) Eligible AP Mortgages, (iii) Eligible Pledged
Securities, (iv) Eligible Servicing Sale Receivables, (v) Eligible Repurchased
Agency Loans and Receivables, (vi) the balance to the credit of the Company in
the Settlement Account, and (vii) cash and Cash Equivalents held by the Agent or
Collateral Agent as security for the Secured Debt.
Eligible Delivered Mortgage: is defined in Section 4.1(b).
Eligible Mortgage Loan: is defined in Section 4.1(a).
Eligible Pledged Security: is defined in Section 4.3.
Eligible Repurchased Agency Loans and Receivables: is defined in
Section 4.2.
Eligible Servicing Sale Receivables: is defined in Section 4.4.
ERISA: means the Employment Retirement Income Security Act of 1974, as
amended from time to time.
ERISA Affiliate: means any corporation or trade or business which is a
member of the same Controlled Group as the Company.
Eurodollar Advance: means an Advance which bears interest at the
Eurodollar Rate.
Eurodollar Base Rate: means, with respect to a Eurodollar Interest
Period or a Discount Loan Period, the rate determined by the Agent to be the
rate at which deposits in U.S. dollars are
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17
offered by First Chicago to first-class banks in the London interbank market at
approximately 11 a.m. (London time) two Business Days prior to the first day of
such Eurodollar Interest Period or Discount Loan Period, in the approximate
amount of (i) the amount of the Eurodollar Advance or Discount Advance divided
by (ii) the number of Lenders making Loans in connection with such Advance, and
having a maturity approximately equal to such Eurodollar Interest Period or
Discount Loan Period.
Eurodollar Interest Period: means, with respect to a Eurodollar Advance,
a period of one, two or three months, as selected by the Company, commencing on
a Business Day selected by the Company pursuant to this Agreement. Such
Eurodollar Interest Period shall end on (but exclude) the day which corresponds
numerically to such date one, two or three months thereafter, as applicable;
provided, however, that if there is no such numerically corresponding day in
such next month, such Eurodollar Interest Period shall end on the last Business
Day of such next month. If a Eurodollar Interest Period would otherwise end on a
day which is not a Business Day, such Eurodollar Interest Period shall end on
the next succeeding Business Day, provided, however, that (i) if said next
succeeding Business Day falls in a new calendar month, such Eurodollar Interest
Period shall end on the immediately preceding Business Day, and (ii) no
Eurodollar Interest Period shall extend beyond the Termination Date.
Eurodollar Loan: means a Loan which bears interest at a
Eurodollar Rate.
Eurodollar Rate: means, with respect to a Eurodollar Advance and
Eurodollar Loan for the relevant Eurodollar Interest Period, and with respect to
the calculation of the Purchase Price with respect to any Discount Loan Period,
the sum of (i) the quotient of (a) the Eurodollar Base Rate applicable to such
Eurodollar Interest Period or Discount Loan Period, divided by (b) one minus the
Reserve Requirement (expressed as a decimal) applicable to that Eurodollar
Interest Period or Discount Loan Period, plus (ii) the Applicable Margin (A) in
effect two Business Days prior to the first day of a Discount Loan Period with
respect to the calculation of the applicable Purchase Price or (B) in effect
from time to time during the Eurodollar Interest Period with respect to a
Eurodollar Advance and Eurodollar Loan.
Event of Default: means any of the events described in Section 10.1.
Existing Facility: is defined in the first recital of this Agreement.
Facility: means the facility comprised of the Commitments made
available to the Company pursuant to this Agreement, which
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facility has an original term of 364 days and an initial Aggregate Commitment
of $800,000,000.
Facility Fee Rate: means, as of any date, the percentage per annum set
forth on Schedule 2 attached hereto which is in effect on such date, changing as
and when the Company's long-term unsecured debt rating by either S&P or Moody's
changes as described therein.
Federal Agency: means FHLMC, FNMA, GNMA, FHA or VA.
Federal Funds Advance: means an Advance bearing interest at the
Federal Funds Rate.
Federal Funds Funding Rate: means, with respect to any Federal Funds
Loan for any day, the rate per annum equal to the consensus (or if no consensus
exists, the arithmetic average) of the rates at which reserves are offered by
first-class banks to other first-class banks (at approximately the time at which
the applicable Advance Notice or Conversion/Continuation Notice is received or
the time at which an automatic continuation is deemed to have occurred) on such
day (or if such day is not a Business Day, on the immediately preceding Business
Day) on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, based on quotes received by the Agent
from three federal funds brokers of recognized standing selected by the Agent in
its sole discretion; provided, however, that in lieu of determining the rate in
the foregoing manner, the Agent may substitute therefor the consensus (or if no
consensus exists, the arithmetic average) of the rates at which reserves are
offered by first-class banks to other first-class banks at 10:00 a.m. (Chicago
time) on such day (or if such day is not a Business Day, on the immediately
preceding Business Day) on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, received by the
Agent from three federal funds brokers of recognized standing selected by the
Agent in its sole discretion.
Federal Funds Loan: means any Loan constituting a portion of a Federal
Funds Advance.
Federal Funds Rate: means, for any day, an interest rate per annum
equal to (i) the Federal Funds Funding Rate for such day, plus (ii) 0.125% per
annum, plus (iii) the Applicable Margin.
Fees: is defined in Section 2.2.
FHA: means the Federal Housing Administration or other agency,
corporation or instrumentality of the United States to which the powers and
duties of the Federal Housing Administration have been transferred.
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FHA-Approved Mortgagee: means an institution that is approved by the FHA
to act as a servicer and mortgagee of record with respect to a Mortgage Loan
insured by the FHA.
FHA Mortgage Loan: means a Mortgage Loan that is secured by a first
lien on land and the Single Family Residence constructed thereon and is insured
by FHA.
FHLMC: means the Federal Home Loan Mortgage Corporation or other agency,
corporation or instrumentality of the United States to which the powers and
duties of the Federal Home Loan Mortgage Corporation have been transferred.
FHLMC-Approved Lender: means an institution that is approved by the
FHLMC to act as a lender in connection with the origination of any Mortgage Loan
purchased by the FHLMC.
FHLMC Security: means a security representing an undivided fractional
interest in a pool of Mortgage Loans, which security is issued and guaranteed as
to full and timely payment of interest and full collection of principal by
FHLMC.
First Chicago: means The First National Bank of Chicago, in its
corporate capacity and not as Agent, and its successors and assigns.
FNMA: means the Federal National Mortgage Association or other agency,
corporation or instrumentality of the United States to which the powers and
duties of the Federal National Mortgage Association have been transferred.
FNMA-Approved Lender: means an institution that is approved by the FNMA
to act as a lender in connection with the origination of any Mortgage Loan
purchased by the FNMA.
FNMA Security: means a security representing an undivided fractional
interest in a pool of Mortgage Loans, which security is issued and guaranteed as
to full and timely payment of principal and interest by FNMA.
FSA: means Financial Security Assurance Holdings Ltd., a New York
corporation.
Fundamental Change: is defined in Section 8.4.
Fundamental Change/Investment Calculation Period: means, in respect of
any Fundamental Change or Investment, the period ending on the date of
consummation of such Fundamental Change or Investment and including the four
most recent consecutive fiscal quarters ending on or prior to the date of
consummation of such Fundamental Change or Investment.
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20
Funded Debt: means as of any date of determination thereof, all Debt of
the Company and its consolidated Subsidiaries (including without limitation all
amounts payable by the Company in connection with the acquisition of any
Servicing Agreements and the amount of all checks, drafts or other items issued
by the Company or any of its consolidated Subsidiaries to fund Mortgage Loans to
the extent such checks, drafts or other items have not been collected upon and
paid), minus (i) all Debt of others Guaranteed by the Company or any of its
consolidated Subsidiaries and (ii) all Debt of others secured by a Lien on any
asset of the Company or any of its consolidated Subsidiaries, unless such Debt
is assumed by the Company or any of its consolidated Subsidiaries.
GAAP: means generally accepted accounting principles as in effect from
time to time.
General Commitment: means, for each Lender as of any date, the
obligation of such Lender to make Loans not exceeding the amount set forth as
its total commitment (excluding any Swingline Commitment) on Exhibit C attached
hereto, as such amount may be modified from time to time pursuant to the terms
hereof, or the amount established in any assignment to a new Lender pursuant to
the terms hereof.
GNMA: means the Government National Mortgage Association or other
agency, corporation or instrumentality of the United States as to which the
powers and duties of the Governmental National Mortgage Association have been
transferred.
GNMA Security: means a security representing an undivided fractional
interest in a pool of Mortgage Loans, which security is issued by the Company
and guaranteed as to full and timely payment of principal and interest by GNMA
without regard as to whether the Company collects any payments on such Mortgage
Loans.
Guaranty: means, with respect to any Person, any obligation, contingent
or otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person (a "primary obligor") or in any manner providing for the payment of
any Debt of any primary obligor or otherwise protecting the holder of such Debt
against loss (whether by agreement to keep-well, to purchase assets, goods,
securities or services, to advance or supply funds to the primary obligor to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, to take-or-pay or
otherwise), provided that the term "Guarantee" shall not include (i)
endorsements for collection or deposit in the ordinary course of business, (ii)
obligations of the Company pursuant to Recourse Servicing, (iii) commitments by
the Company to purchase Mortgage Loans in the ordinary course of business, and
(iv) obligations in
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the Company's capacity as servicer of Mortgage Loans. The term "Guarantee"
used as a verb has a correlative meaning.
Hazardous Substance: means any hazardous, toxic or dangerous waste,
substance or material subject to regulation under the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, and federal,
state or local so-called "Superfund" or "Superlien" laws, or any other federal,
state or local laws, ordinances, rules or regulations governing or regulating
hazardous materials, pollution, the environment or public health, as now or at
any time hereafter in effect.
HLTV Loan: means a Residential Mortgage Loan (which may be a Qualified
Second Loan) that meets all the requirements for a Nonconforming Mortgage Loan
except that it has an original principal balance (or, in the case of a Qualified
Second Loan, the sum of such original principal balance plus the principal
balance, as of the origination of such Qualified Second Loan, of the related
first priority Residential Mortgage Loan) which is greater than 95% of the
appraised value of the real estate and the improvements securing such Mortgage
Loan, in which case such Mortgage Loan must meet all requirements for sale to an
Approved Investor pursuant to a commitment specifically covering such Mortgage
Loan.
HUD: means the United States Department of Housing and Urban Development
or other agency, corporation or instrumentality of the United States to which
the powers and duties of the United States Department of Housing and Urban
Development have been transferred.
Investment: means, as applied to any Person, any direct or indirect
purchase or other acquisition by that Person of, or a beneficial interest in,
stock or other securities of any other Person or any option, contract,
certificate or other financial product (including, but not limited to, interest
rate swaps and other hedging instruments), or any direct or indirect loan,
advance or capital contribution by that Person to any other Person, including
all indebtedness and accounts receivable from that other Person which are not
current assets or did not arise from sales to that other Person in the ordinary
course of business. The amount of any Investment shall be determined in
accordance with GAAP.
Issuing Lender: is defined in Section 2.6(b).
Jumbo Mortgage Loan: means a Residential Mortgage Loan that (i) meets
all applicable requirements for sale to FNMA or FHLMC except that the amount of
such Mortgage Loan exceeds the amounts permitted by such requirements, (ii) at
the time of origination had a principal balance that did not exceed 80% of the
appraised value of the real estate and improvements securing such Mortgage
-15-
22
Loan, unless private mortgage insurance was obtained covering such Mortgage
Loan, in which case it may have an original principal balance in excess of 80%
but not in excess of 95% of such appraised value, (iii) has a term of not more
than 30 years, (iv) meets all of the then-current requirements for sale to an
Approved Investor purchasing such type of Mortgage Loan from the Company, and
(v) has an outstanding principal balance on the Pledge Date thereof of less than
$1,000,000 in any event.
Lender: means, at any time, any party having a Commitment hereunder
and its successors and permitted assigns.
Lending Installation: means, with respect to a Lender, any office,
branch, subsidiary or affiliate of such Lender.
Lending Sublimits: is defined in Section 2.1(a).
Lien: means, with respect to any asset of any Person, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect of
such asset. For the purposes of this Agreement, such Person shall be deemed to
hold subject to a Lien any asset that it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sales agreement, capital
lease or other title retention agreement relating to such asset.
Loan: means a loan of money in any amount to the Company by a Lender
pursuant to this Agreement.
Maximum Special Dividend Amount: is defined in Section 8.16.
MBS Value: means, with respect to any Security, the lowest of (a) the
face amount of such Security, (b) the weighted average purchase price committed
to under those Approved Investor Commitments which could cover such Security,
determined in the manner set forth in Exhibit F, and (c) if so required from
time to time by the Agent, the then-current market value of such Security as
conclusively determined by a third party broker of nationally recognized
standing selected by the Collateral Agent.
Moody's: means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor to its
business.
Mortgage: means a mortgage, deed of trust, security deed or
similar instrument purporting to create a first or second lien or
similar interest in real estate and improvements thereon.
Mortgage Collateral Value: means, with respect to any Mortgage Loan, the
lowest of (A) the unpaid principal balance of such Mortgage Loan on the Pledge
Date therefor, (B) the net acquisition cost of such Mortgage Loan, if acquired
by the Pledgor, (C) the weighted average purchase price (determined on a
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23
weekly basis and expressed as a percentage of par) committed to under those
Approved Investor Commitments which could cover such Mortgage Loan applied to
the unpaid principal balance (as of the Pledge Date) of such Mortgage Loan
determined in the manner set forth in Exhibit F, and (D) if so required from
time to time by the Agent, the then-current market value of such Mortgage Loan
as conclusively determined by a third party broker of nationally recognized
standing selected by the Collateral Agent.
Mortgage Loan: means a loan of money evidenced by a Mortgage
Note and secured by a Mortgage.
Mortgage Note: means a note evidencing the indebtedness
secured by a Mortgage.
Mortgage-Related Indebtedness: means, with respect to the Company and
its Subsidiaries, any amount arising out of the issuance in the ordinary course
of the mortgage banking business of the Company and its Subsidiaries of (i)
mortgage pools, pass-throughs, participation certificates and other
mortgage-related securities to the extent that such amount would not, in
accordance with GAAP, be shown as indebtedness on a consolidated balance sheet
of the Company and its Subsidiaries as at such date and (ii) collateralized
mortgage obligations and other mortgage-related securities issued by a
Subsidiary of the Company, the payment of principal and interest in respect of
which is secured by a Lien on mortgage loans or other mortgage-related
securities (or other securities in which the Company invests in the ordinary
course of its mortgage banking business) conveyed to such Subsidiary in an
amount reasonably anticipated by the Company to approximate the amount required
to pay the principal and interest in respect of such collateralized mortgage
obligations or other mortgage-related securities (whether or not such amount
would, in accordance with GAAP, be shown as indebtedness on a consolidated
balance sheet of the Company and its Subsidiaries as at such date).
New York Consolidation Loan: means a Residential Mortgage Loan that
encumbers property in the State of New York and is being made in the form of a
consolidation with, and modification to, an existing Residential Mortgage Loan
which requires the delivery to the holder thereof of the original Mortgage and
Mortgage Note securing and evidencing such existing Residential Mortgage Loan.
Nonconforming Mortgage Loan: means a Residential Mortgage Loan that (i)
is not a Conforming Mortgage Loan, a Jumbo Mortgage Loan or a New York
Consolidation Loan, (ii) at the time of origination had a principal balance that
did not exceed 80% of the appraised value of the real estate and improvements
securing such Mortgage Loan, unless private mortgage insurance was obtained
covering such Mortgage Loan, in which case it may have
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an original principal balance in excess of 80% but not in excess of 95% of such
appraised value, or such Mortgage Loan is an HLTV Loan or a Qualified Second
Loan, (iii) has a term of not more than 30 years, (iv) meets all of the
then-current requirements for sale to an Approved Investor purchasing such type
of Mortgage Loan from the Company, and (v) has an original principal balance of
less than $400,000 in any event.
Non-Lender Balance Bank: means any bank or other financial institution
approved in advance by the Agent and the Company which is not a Lender hereunder
but which is an Affiliate of a Lender and which has executed a Balance Bank
Agreement pursuant to which it has agreed to make Discount Advances hereunder
and sell such Discount Advances to the Lenders pursuant to Section 2.4.
Note: means promissory notes evidencing amounts that may be advanced
from time to time under this Agreement, (i) in substantially the form of Exhibit
E-1 attached hereto with respect to Loans other than Discount Loans and Bid
Loans, (ii) in substantially the form of Exhibit E-2 attached hereto with
respect to Discount Loans, and (iii) in a form mutually agreed to between the
Company and each Bid Lender with respect to Bid Loans, each duly executed by the
Company and payable to the order of a Lender, including any amendment,
modification, renewal or replacement of such promissory notes.
Notice Address: means, as to any Person, the address of such Person
specified in or pursuant to Section 12.2.
Obligations: means any and all amounts due from the Company to any of
the Lenders, the Agent or the Collateral Agent hereunder or under the Notes,
the Security Agreement or any other Credit Document.
Other Facility: means that certain Revolving Credit Agreement dated as
of July 10, 1998 by and among the Company, First Chicago and certain of the
Lenders, as amended and supplemented from time to time.
Outstanding CPN: means, as of any date, each commercial paper note
issued by the Company which has not been presented for payment or for which
payment has not been made in full; provided, however, that as long as there has
not occurred an Event of Default, which Event of Default has not been waived by
the Required Lenders, "Outstanding CPN" shall not include on any date any such
commercial paper note which matures on such date but shall include all such
commercial paper notes to be issued on such date.
Overnight Transaction Advance: means a Swingline Advance which bears
interest at the Overnight Transaction Rate.
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Overnight Transaction Effective Rate: means, as of any day for any
Overnight Transaction Advance, a rate of interest per annum determined by First
Chicago in its sole discretion as its overnight transaction loan rate (at
approximately the time at which the applicable Advance Notice or
Conversion/Continuation Notice is received or the time at which an automatic
continuation is deemed to have occurred) for such day (or if such day is not a
Business Day, on the immediately preceding Business Day) for advances in such
amount.
Overnight Transaction Rate: means, with respect to an Overnight
Transaction Advance, a per annum interest rate equal to the sum of the Overnight
Transaction Effective Rate plus the Applicable Margin plus one quarter of one
percent (0.25%).
Parent: means collectively, White Mountains Holdings, Inc., which
holds 97% of the stock of the Company and Fund American Enterprises Holdings,
Inc., which in turn holds all of the stock of White Mountains Holdings, Inc.
and the remaining 3% of the stock of the Company.
Participants: is defined in Section 11.2(a).
PBGC: means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
Person: means an individual, corporation, limited liability company,
partnership, joint venture, trust or unincorporated organization, or a
government or any agency or political subdivision thereof.
Plan: means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of
the Code as to which the Company or any member of the Controlled Group may have
any liability.
Pledge Date: means the date on which a Mortgage Loan or a Security is
first delivered in pledge to the Collateral Agent, provided that (i) the date of
delivery of a Mortgage Loan covered by an AP Notice shall be deemed to be the
date of delivery of such AP Notice even after subsequent delivery of the related
Required Mortgage Documents, and (ii) the "Pledge Date" for all Collateral
previously held by the Collateral Agent under the Existing Facility shall be
deemed to be the date on which such Collateral was first delivered to the
Collateral Agent under the Existing Facility even though such date is prior to
the date of this Agreement.
Pledged Item: means any Pledged Mortgage or Pledged Security.
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Pledged Mortgages: means Mortgage Loans that are from time to time
designated by the Company and the Required Mortgage Documents in respect of
which are required to be delivered to the Collateral Agent pursuant to any of
this Agreement or the Security Agreement, including all Required Mortgage
Documents related thereto.
Pledged Securities: means Securities that are from time to time
designated by the Company and required to be delivered to the Collateral Agent
pursuant to either this Agreement or the Security Agreement, whether or not such
Pledged Securities are Eligible Pledged Securities.
Pledged Servicing Sale Receivables: means Servicing Sale Receivables
which are from time to time designated by the Company and pledged to the
Collateral Agent in accordance with this Agreement and the Security Agreement.
Pledgor: is defined in Section 4.6.
Published Federal Funds Effective Rate: means, for any day, an interest
rate per annum equal to the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published for such day (or, if such day is
not a Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations at approximately 10:00 a.m.
(Chicago time) on such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by the Agent in its sole
discretion.
Purchase Price: is defined in Section 2.4(d).
Qualified Second Loan: means a Residential Mortgage Loan that (i) is
secured by a second lien on the premises described therein, and (ii) is subject
to and complies with all delivery requirements for sale to an Approved Investor
pursuant to a commitment specifically covering such Mortgage Loan.
Rate Hedging Agreement: means an agreement, device or arrangement
providing for payments which are related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate floor, cap or collar protection
agreements, forward rate currency or interest rate options, puts and warrants.
Rate Option: means the Eurodollar Rate, the Overnight Transaction
Rate, the Federal Funds Rate, the Discount Rate, the
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Alternate Base Rate, the Swingline Buydown Rate, or, if available, any Bid Rate.
Recourse Servicing: means any servicing rights under a Servicing
Agreement (other than any Servicing Agreement with GNMA) which obligates the
Company to repurchase Mortgage Loans upon default by the borrower thereunder or
indemnify any party having an interest in such Mortgage Loans against any
principal loss arising from such a default, unless (i) the Company has obtained
and maintains in effect insurance with coverages satisfactory to Agent from an
insurance company having a AAA rating covering the risk of being required to so
indemnify any such party, or (ii) the Company's obligation to indemnify any
party against any principal loss is limited to 10% or less of any such loss.
Regulation D: means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
Regulation U: means Regulation U of the Board of Governors of the
Federal Reserve System from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
Reinstated Repurchased Agency Loans and Receivables: means Eligible
Repurchased Agency Loans and Receivables which have been reinstated and as to
which (i) the Company shall have delivered to the Collateral Agent the Required
Mortgage Documents and a copy of the insurance or guaranty certificate (and, if
requested by the Agent or Collateral Agent, an original of such certificate and
any other Additional Required Mortgage Documents) related thereto and (ii) no
more than two installments of principal or interest are past due since the
reinstatement of the Mortgage Loan.
REO: means any interest in real property and the improvements thereon
owned by the Company as a result of the foreclosure or transfer in lieu of
foreclosure of a Mortgage Loan.
Reportable Event: means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified of the occurrence of
such event, provided, however, that a failure to meet the minimum funding
standard of Section 412 of the Code and of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇
-▇▇-
▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇ a Reportable Event regardless of the issuance of any such waiver
of the notice requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.
Repurchased Agency Loans and Receivables: means all VA Mortgage Loans or
FHA Mortgage Loans (plus any REO or accounts receivable from FHA or VA resulting
therefrom, including guaranty claims against VA and insurance claims against FHA
or HUD) which were originally repurchased by the Company from Security holders.
In each case such Mortgage Loans (and the REO or accounts receivable resulting
therefrom) shall be valued based solely on (i) the amount of principal last due
under such Mortgage Loan, even after conversion of such Mortgage Loan to REO,
plus (ii) the amount of past-due interest advanced by the Company on account of
such Loan which is guaranteed by VA or insured by FHA; provided, however, that
90 days after written notice to the Company that the Required Lenders have
elected to exclude past-due interest from such valuation, such valuation shall
cease to include the past-due interest described under clause (ii).
Required Lenders: means (i) Lenders having two-thirds of the Aggregate
Commitment then in effect, or (ii) if the Commitments have been terminated,
Lenders having at least two-thirds of the aggregate Loans then outstanding.
Required Mortgage Documents: means the instruments and documents
described in Schedule A to the Security Agreement, as applicable to the
particular Mortgage Loan, which are required to be delivered to the Collateral
Agent and such other instruments and documents described therein as the Agent or
Collateral Agent may request.
Reserve Requirement: means, with respect to the Eurodollar Rate
applicable to a Discount Loan Period or a Eurodollar Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on
eurocurrency liabilities on the date of determination of such Eurodollar Rate.
Residential Mortgage Loan: means a Mortgage Loan secured by a Mortgage
on a Single Family Residence.
Restricted FSA Securities: means any securities or contractual rights
now or hereafter owned by the Company which are convertible into, are
exercisable for or represent a right to acquire, without regard to any
contractual restrictions thereon, shares of capital stock of FSA, together with
all capital stock of FSA which is acquired by the Company pursuant to such a
conversion or any exercise of such right.
Restricted Payment: means: (i) with respect to the Company, any
payment of any dividends upon any shares of the Company's
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stock now or hereafter outstanding, except dividends payable in the stock of the
Company, and any other distribution or other transfer of assets to its
stockholders, as such, (including any repurchase of the Company's stock) whether
in cash, property, or securities, other than the exchange of Subordinated Debt
for Series A Preferred Stock or the purchase at market value from an Affiliate
of a readily marketable security traded on the New York Stock Exchange, American
Stock Exchange or NASDAQ as approved by the Agent; and (ii) any payment of
principal of or interest on the Subordinated Debt, and any amounts deposited
with the trustee under the Subordinated Debt Indenture or otherwise irrevocably
set aside for the benefit of the holders of the Subordinated Debt for the
purpose of defeasance of the Subordinated Debt.
Resulting Entity: means the Company and its consolidated Subsidiaries
after giving effect to any Fundamental Change or Investment.
S&P: means Standard & Poor's Ratings Group or any successor to its
business.
SEC: means the Securities and Exchange Commission (or any successor
entity).
Secured Debt: means the Credit Indebtedness.
Secured Parties: means, collectively, the Lenders, the Non-Lender
Balance Banks (to the extent of any Credit Indebtedness owed to such Non-Lender
Balance Banks), the Agent and the Collateral Agent.
Security: means any FHLMC Security, FNMA Security or GNMA Security.
Security Agreement: means the Fourth Amended and Restated Security and
Collateral Agency Agreement as of even date herewith, substantially in the form
of Exhibit D attached hereto, by and among the Company, the Agent and the
Collateral Agent, pursuant to which a security interest is created in favor of
the Collateral Agent for the Secured Parties in certain Collateral to be pledged
pursuant to this Agreement, as the same may, from time to time, be further
supplemented, modified or amended.
Series A Preferred Stock: means the Company's 8.42% Cumulative
Preferred Stock, Series A.
Servicing Agreement: means a written contract of the Company with
another Person to act on behalf of such other Person to, among other things,
receive payments in respect of Mortgage Loans and to service Mortgage Loans, but
shall not include the servicing rights related to (i) any Residential Mortgage
Loans while they constitute Collateral, (ii) any commercial Mortgage
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Loans, or (iii) any other Mortgage Loans held for investment by the Company,
Parent or any of their respective Subsidiaries.
Servicing Purchaser: means a Person which has purchased Servicing
Agreements from the Company.
Servicing Sale Receivables: means funds due to the Company from a
Servicing Purchaser in connection with a sale of Servicing Agreements from the
Company to such Servicing Purchaser.
Settlement Account: means the account established pursuant to Section
4.9.
Single Family Residence: means a one to four family dwelling unit, which
may be a condominium unit but which shall not be a mobile home (unless qualified
under a Federal Agency program) or a dwelling unit in a cooperative apartment
building.
Special Dividend: means any Restricted Payment made pursuant to
Section 8.16(b)(ii).
Subordinated Debt: means the principal amount of (but not any interest
on) the unsecured subordinated Debt of the Company outstanding from time to time
(which amount shall not exceed $100,000,000) evidenced by the Quarterly Income
Capital Securities (Subordinated Interest Deferrable Debentures, Due 2025) of
the Company issued in exchange for certain of the Series A Preferred Stock, the
terms of which unsecured subordinated Debt are set forth in the Subordinated
Debt Indenture; but shall not include any such unsecured subordinated Debt with
respect to which any amounts shall have been deposited with the trustee under
the Subordinated Debt Indenture or otherwise irrevocably set aside for the
benefit of the holders of such Debt for the purpose of defeasance of such Debt.
Subordinated Debt Indenture: means that certain Subordinated Indenture,
dated as of December 1, 1995, as amended or supplemented from time to time, by
and between the Company and IBJ ▇▇▇▇▇▇▇▇▇, as trustee, pursuant to which the
Company has issued or will issue the Subordinated Debt.
Subservicing Agreement: means a Servicing Agreement between the
Company and a Person which does not own the Mortgage Loans being serviced
thereunder but only has servicing or other non-ownership rights with respect
thereto.
Subsidiary: of a Person means (i) any corporation more than 50% of the
outstanding voting securities having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its Subsidiaries,
or (ii) any partnership, association, joint venture
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or similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Company.
Swingline Advances: means all Advances made by the Swingline Lender
which are designated by the Company as Swingline Advances in the applicable
Advance Notice, which Advances may be Overnight Transaction Advances, Alternate
Base Rate Advances or Swingline Buydown Advances.
Swingline Buydown Advance: means a Loan made pursuant to Section 2.5(b)
by the Swingline Lender at the Swingline Buydown Rate.
Swingline Buydown Rate: means a rate to be agreed upon by the Company
and the Swingline Lender to apply to Swingline Buydown Advances pursuant to a
Balance Bank Agreement between the Swingline Lender and the Company.
Swingline Commitment: means, the obligation of the Swingline Lender to
make Swingline Advances hereunder not exceeding $40,000,000.
Swingline Lender: means First Chicago.
Termination Date: means July 9, 1999, or if any such day is not a
Business Day, the next preceding Business Day.
Transferee: is defined in Section 11.4.
Unsecured Leverage Ratio: means the maximum leverage ratio set forth
in Section 8.9.
VA: means the Veterans Administration or other agency, corporation or
instrumentality of the United States as to which the powers and duties of the
Veterans Administration have been transferred.
VA-Approved Lender: means an institution that is approved by the VA to
act as a lender in connection with the origination of any Mortgage Loan
guaranteed by the VA.
VA Mortgage Loan: means a Mortgage Loan that is secured by a first
lien on land and the Single Family Residence constructed thereon and is
guaranteed by the VA.
Year 2000 Issues: means anticipated costs, problems and uncertainties
associated with the inability of certain computer applications to effectively
handle data including dates on and after January 1, 2000, as such inability
materially affects the
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business, operations and financial condition of the Company and its
Subsidiaries and of the Company's and its Subsidiaries' material customers,
suppliers and vendors.
Year 2000 Program: is defined in Section 6.17.
1.2 Interpretation.
(a) Words of the masculine gender include correlative words of
the feminine and neuter genders.
(b) Unless the context shall otherwise indicate, words importing
the singular include the plural and vice versa.
(c) Articles and Sections referred to by number mean the
corresponding Articles and Sections of this Agreement.
(d) The terms "hereby," "hereof," "hereto," "herein,"
"hereunder" and any similar terms as used in this Agreement, refer to
this Agreement as a whole unless otherwise expressly stated.
1.3 Accounting Terms and Determinations.
Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be
prepared, in accordance with GAAP, applied on a basis consistent (except for
changes concurred in by the Company's independent public accountants) with the
most recent audited consolidated financial statements of the Company delivered
to the Lenders. To enable the ready and consistent determination of compliance
with the covenants set forth herein, the Company will not change its fiscal year
from a calendar year without (i) advance written notice to the Lenders, (ii)
providing interim financial reports certified by the Company, by the dates that
such reports would have been required prior to such change, and (iii) providing
an interim audited financial statement if more than fifteen (15) months will
have elapsed between annual audited financial statements as a result of such
change.
ARTICLE II
BORROWINGS
2.1 Availability and Adjustments.
(a) Agreement to Lend. Subject to subparagraphs (1) through (4)
below (the "Lending Sublimits"), each Lender severally agrees to make
Loans to the Company and participate in purchases of Discount Advances
on the terms and conditions set forth in this Agreement from time to
time through the
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Business Day immediately preceding the Termination Date, provided that,
on any date, after giving effect to such Loans and all other Loans that
the Company has requested be made on such date:
(1) the aggregate principal balance then outstanding
under all Loans made by any Lender under this Agreement
(excluding the aggregate principal balance then outstanding of
any Bid Loans made by such Lender and any portion of Discount
Advances made by such Lender which have been sold or, will on
such date be simultaneously sold, to the other Lenders under
Section 2.4) shall not at any time exceed the sum of (i) such
Lender's then-current General Commitment, and (ii) such Lender's
then-current Swingline Commitment, if any;
(2) the aggregate principal balance of all Loans
outstanding under this Agreement plus the aggregate face amount
of all Outstanding CPNs shall not at any time exceed the
then-current Aggregate Commitment;
(3) the Credit Requirement shall not exceed the
Borrowing Base;
(4) except as otherwise set forth in Section 2.5(c),
the aggregate principal balance of all Swingline Advances
outstanding under this Agreement at any time shall not exceed
the Swingline Commitment.
Subject to the terms hereof, the Company may borrow, repay and reborrow
amounts hereunder.
(b) Optional Increases in Aggregate Commitments. The
Company shall have the right to increase the Aggregate Commitment, but
not to an amount in excess of $900,000,000, by obtaining additional
Commitments, either from one or more of the Lenders or another lending
institution provided that (A) the Agent has approved the identity of any
such new Lender, (B) any such new Lender assumes all of the rights and
obligations of a "Lender" hereunder, and (C) the Agent has received a
"New/Modified Commitment Supplement" in the form of Exhibit H attached
hereto, which supplement shall be executed by the Company, the Agent
and any Lender modifying its Commitment thereby. Each New/Modified
Commitment Supplement shall be deemed to amend Exhibit C to the extent
necessary to reflect any changes in the Commitments hereunder, and the
Agent shall promptly deliver a copy of such supplement to each Lender
whose Commitment Percentage is affected thereby and to the Collateral
Agent.
(c) Optional Reductions in Aggregate Commitments. The
Company shall have the right to reduce the Aggregate
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Commitment upon ten Business Days' prior written notice to the Agent
(which shall promptly notify the Lenders), provided that such voluntary
reductions shall be made only in multiples of $10,000,000. Upon a
reduction of the Aggregate Commitment pursuant to the preceding
sentence, each Lender's General Commitment shall be decreased pro rata
in accordance with such Lender's Adjusted Commitment Percentage. On or
before the effective date of any such reduction, the Company shall, if
necessary, repay sufficient Loans to prevent the remaining outstanding
Loans hereunder, after giving effect to such permanent reduction, from
exceeding the Lending Sublimits.
2.2 Fees.
The Company shall pay the following fees (the "Fees"):
(a) Facility Fee. A facility fee based on the Aggregate
Commitment from time to time, calculated at the Facility Fee Rate,
changing when and as such rate changes, expressed as a per diem rate on
the actual Aggregate Commitment for each day during the preceding full
or partial calendar quarter, payable in arrears, on or before the fifth
Business Day of each calendar quarter and on the Termination Date. This
fee shall be allocated among the Lenders on a pro rata basis in
accordance with their respective Commitments (including any Swingline
Commitment) on each day during such quarter.
(b) Up-Front Fees. An up-front fee to each Lender based on such
Lender's initial total Commitment hereunder payable when this Agreement
becomes effective, equal to (i) 0.05% of the total Commitment of any
Lender which is not a lender under the Existing Facility or (ii) with
respect to any Lender which is a lender under the Existing Facility the
sum of (A) 0.025% of such Lender's Commitment to the extent it is not in
excess of such Lender's Commitment under the Existing Facility plus
either (B) 0.025% of the increase, if any, in such Lender's total
Commitment hereunder over such Lender's commitment under the Existing
Facility, if such increase is less than $5,000,000, or (C) 0.05% of such
increase, if any, if such increase is $5,000,000 or more.
(c) Other Fees Payable to Agent. Any fees payable to
the Agent pursuant to any applicable letter agreements
between the Agent and the Company.
(d) Collateral Agent Fees. Collateral Agent fees payable to
Collateral Agent for its services rendered pursuant to the Security
Agreement as agreed to by the Company and the Collateral Agent from time
to time.
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(e) Fees Payable in Connection with Discount Loans or Swingline
Buydown Advances. Any deficiency fees owing to the Balance Banks or the
Swingline Lender under the Balance Bank Agreements due to the Company's
failure to maintain sufficient deposits with such Balance Banks or the
Swingline Lender and any other fees owing under the Balance Bank
Agreements.
2.3 Advances.
(a) Types of Advances. Each Advance hereunder shall consist of
Loans made from one or more of the Lenders and requested by the Company in
accordance with Section 2.9. Subject to the terms and conditions herein,
Eurodollar Advances, Alternate Base Rate Advances and Federal Funds Advances
shall be generally available as permitted by the Lending Sublimits. Discount
Advances shall be available only as provided in Section 2.4. Swingline Advances
shall be available as provided in Section 2.5. Bid Loans shall be available as
provided in Section 2.6. Notwithstanding anything to the contrary contained in
this Agreement, at any time during the continuance of a Default the Agent may
(and at the direction of the Required Lenders shall) declare by notice to the
Company that no Advance may be made as, converted into or continued as a
Eurodollar Advance or a Discount Advance, and each such Advance shall
automatically be converted into a Federal Funds Advance at the expiration of the
interest period applicable thereto.
(b) Rate Options. Eurodollar Advances, Alternate Base Rate
Advances, Federal Funds Advances, Swingline Buydown Advances and Overnight
Transaction Advances shall accrue interest at the Eurodollar Rate, the Alternate
Base Rate, the Federal Funds Rate, the Swingline Buydown Rate and the Overnight
Transaction Rate, respectively. Discount Advances shall not bear interest but
shall be made on a discounted basis by one or more Balance Banks and shall be
sold to the other Lenders in accordance with Section 2.4.
(c) Funding of Advances. Discount Advances, Swingline Advances
and Bid Loans shall be funded by the Lenders as provided in Section 2.4, 2.5 and
2.6, respectively. All other Advances shall be funded on a pro rata basis among
all Lenders in accordance with each Lender's Adjusted Commitment Percentage.
(d) Reallocation of Swingline Advances. Upon the election of the
Swingline Lender at any time, all outstanding Swingline Advances (including
Swingline Advances made pursuant to Section 2.5(c) below) designated by the
Swingline Lender shall be reallocated among all Lenders in accordance with each
Lender's Adjusted Commitment Percentage, and each such Swingline Advance shall
thereafter be deemed for all purposes a Federal Funds Advance. Notwithstanding
the preceding sentence or any other
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provision of this Agreement, no portion of any Swingline Advance shall be
reallocated to any Lender to the extent such reallocation would cause such
Lender's share of the aggregate unpaid principal amount of all Loans (other than
Bid Loans) then outstanding under this Agreement to exceed its General
Commitment hereunder.
(e) Reallocation Upon Default. Automatically after the
occurrence of an Event of Default described in Section 10.1(k) and upon the
request of any Lender during the continuance of any other Event of Default, (i)
all Swingline Advances made in accordance with this Agreement, Federal Funds
Advances and Alternate Base Rate Advances (excluding Bid Loans) shall be
immediately reallocated among all Lenders in accordance with each Lender's
Commitment Percentage, and each Swingline Advance shall thereafter be deemed for
all purposes a Federal Funds Advance, and (ii) each Eurodollar Advance and
Discount Advance shall, upon the expiration of the interest period applicable
thereto, automatically be converted into a Federal Funds Advance and reallocated
among all Lenders in accordance with each Lender's Commitment Percentage. Each
Lender holding less than its Commitment Percentage of all Advances (excluding
Bid Loans) shall at the times set forth for reallocations in the preceding
sentence immediately purchase for cash and at face value such participations in
the Notes held by other Lenders, and make such other adjustments, as may be
needed to cause each Lender to hold its Commitment Percentage of the Advances
hereunder (other than Bid Loans made by such Lender). Notwithstanding the
preceding provisions of this Section 2.3(e) or any other provision of this
Agreement, no Lender shall be required to so purchase such participations to the
extent that such purchase would cause such Lender's share of the aggregate
unpaid principal amount of all Loans (other than Bid Loans) then outstanding
under this Agreement to exceed its Commitment hereunder.
2.4 Discount Advances.
(a) Funding of Discount Loans. Subject to the terms and
conditions herein (including the Lending Sublimits) and the terms and conditions
of any Balance Bank Agreement, the Company may request a Discount Advance from
any Balance Bank; provided that Discount Advances shall be made only on the
tenth day of each calendar month or, if such tenth day is not a Business Day, on
the next succeeding Business Day thereafter.
(b) Discounted Advance. Each Discount Loan made available
hereunder shall not bear interest but shall instead be funded to the Company at
a discount ("Balance Bank Discount") from the principal amount repayable by the
Company at the end of the applicable Discount Loan Period (the "Face Amount")
calculated to yield to the Balance Bank, when the Face Amount is repaid in full
at the end of the applicable Discount Loan Period,
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a per annum return on the amount advanced equal to the Discount Rate for the
applicable Discount Loan Period. The full Face Amount of each Discount Advance
shall then be repaid by the Company at the expiration of the applicable Discount
Loan Period. Accordingly, each Discount Advance shall bear no interest prior to
the expiration of the applicable Discount Loan Period. The amount of the
Discount Advance actually disbursed to the Company on the Advance Date therefor
(which amount shall necessarily be less than the Face Amount) shall be equal to
the amount requested by the Company in the Advance Notice requesting such
Discount Advance, and the Face Amount shall be determined by the Agent based on
the Balance Bank Discount. From and after the expiration of such Discount Loan
Period, each Discount Loan constituting a portion of such Discount Advance not
repaid shall bear interest on its Face Amount at the rate set forth in Section
2.7.
(c) Balance Bank Agreement. Discount Advances are based upon the
expectation that the Company will maintain average daily qualifying balances
with the applicable Balance Bank during the applicable Discount Loan Period. The
Agent will collect and disburse the Discount Advances, but shall not be
obligated to confirm any matters with respect to balances maintained with
Balance Banks or to collect any fees or amounts charged by Balance Banks with
regard to such balances. Each Balance Bank shall with the Company's agreement
impose its own requirements upon the Company in dealing with deviations in
actual balances from projected balances. All such matters shall be governed by
separate Balance Bank Agreements between each such Balance Bank and the Company,
and the Agent shall have no responsibility therefor. No Discount Advance shall
be available from a particular Balance Bank until (i) the Company and such
Balance Bank have executed and delivered a Balance Bank Agreement and so advised
the Agent in writing, and (ii) in the case of a Non- Lender Balance Bank, such
Non-Lender Balance Bank shall have executed either this Agreement or a
Non-Lender Balance Bank Supplement in the form of Exhibit I hereto agreeing to
be bound by the terms of this Section 2.4.
(d) Ratable Purchase by All Lenders. A portion of each Discount
Advance (or, in the case of Non-Lender Balance Banks, the entire Discount
Advance made in accordance with the terms of this Agreement), shall be sold
simultaneously with the funding by the Balance Bank to the other Lenders (each a
"Purchasing Lender") on a pro rata basis in accordance with each such Lender's
Adjusted Commitment Percentage. Each Purchasing Lender hereby agrees to purchase
and acquire, prior to funding, for cash at the Purchase Price and without
recourse to the Balance Bank, its Adjusted Commitment Percentage share of such
Discount Advance (as to each Purchasing Lender, such amount shall be a Discount
Loan by such Lender). The purchase price ("Purchase Price") payable by each
Purchasing Lender shall be calculated to yield
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such Lender upon payment at the end of the applicable Discount Loan Period of
its Discount Loan a per annum return on the Purchase Price equal to the
Eurodollar Rate which would have been applicable for a one month Eurodollar
Interest Period ending on the same date as such Discount Loan Period. Each
Balance Bank hereby irrevocably agrees to sell and assign, without recourse,
such portion of every Discount Advance made by such Balance Bank (or, in the
case of Non-Lender Balance Banks, the entire amount of each such Discount
Advance) to each Purchasing Lender at the applicable Purchase Price. Each
Balance Bank (other than Non-Lender Balance Banks) shall retain its Adjusted
Commitment Percentage share of the Face Amount of each Discount Advance, which
shall constitute a Discount Loan owing to the Balance Bank.
(e) Minimum Amounts; Funding. Each Discount Advance shall be
requested by the Company in accordance with Section 2.9. On the Advance Date for
each such Discount Advance, subject to the other provisions hereof and upon
receipt by the Agent for the account of the Balance Bank from each of the
Purchasing Lenders of the aggregate Purchase Price required to be made available
by such Lenders, the Balance Bank will make the full Discount Advance available
to the Agent for the account of the Company in the manner specified in Section
2.11. On the Advance Date for each such Discount Advance, each Purchasing Lender
will make available to the Agent for the account of the Balance Bank in
immediately available funds an amount equal to the Purchase Price for the share
of such Discount Advance being purchased by such Lender from the Balance Bank.
(f) Consent to Assignment. The Company hereby acknowledges and
consents to the assignment of Discount Loans by each Balance Bank to the other
Lenders, as contemplated by this Section 2.4. The Company and the Agent shall
treat each Purchasing Lender with respect to its share of each Discount Advance
as if such share of such Discount Advance had originally been made by such
Purchasing Lender directly to the Company as a Discount Loan.
(g) Discount Notes. The Discount Loans owing to each Lender
shall be evidenced by a single master promissory note of the Company in the full
amount of such Lender's Commitment, substantially in the form of Exhibit E-2 (a
"Discount Note") executed and delivered prior to the initial Discount Advance,
payable to the order of such Lender and representing from time to time the
obligation of the Company to pay the aggregate Face Amount of all Discount Loans
then owed to such Lender.
2.5 Swingline Advances.
(a) In General. Subject to the terms and conditions herein,
the Company may request Swingline Advances from the Swingline Lender on a
non-pro rata basis, and such Swingline
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Advance shall be funded to the Company by the Swingline Lender on the Advance
Date therefor. As set forth in, but subject to the provisions of, Section 2.3(d)
and (e), Swingline Advances shall be reallocated among the Lenders (i)
automatically after the occurrence of an Event of Default described in Section
10.1(k), (ii) upon the request of any Lender during the continuance of any other
Event of Default, and (iii) upon the election of the Swingline Lender made at
any time.
(b) Swingline Buydown Advances. Swingline Buydown Advances are
based upon the expectation that the Company will maintain average daily
qualifying balances with the Swingline Lender while any Swingline Buydown
Advance is outstanding. The Swingline Lender shall with the Company's agreement
impose its own requirements upon the Company in dealing with deviations in
actual balances from projected balances. All such matters shall be governed by a
Balance Bank Agreement between the Swingline Lender and the Company.
(c) Swingline Advances to Pay Amounts Due to Swingline Lender.
If any amounts are advanced by the Swingline Lender to cover checks or wire
transfers from Company accounts maintained with the Swingline Lender when there
are insufficient funds in such accounts to cover the applicable check or wire
transfer and sufficient funds are not deposited in the applicable account before
the close of business on the day on which the applicable check or wire transfer
request is honored, then the Company shall be deemed to have requested, and the
Swingline Lender may (but shall not be obligated to) elect to make, a Swingline
Advance at the Alternate Base Rate to pay such overdraft amount (even if such a
Swingline Advance would cause the aggregate amount of all outstanding Swingline
Advances to exceed the Swingline Commitment); provided however, that (i) the
Swingline Lender shall not make any such Swingline Advance to the extent such
Advance would cause the Credit Requirement to exceed the Borrowing Base, and
(ii) the reallocations of any such Swingline Advances among the Lenders shall be
as set forth in, but subject to the provisions of, Sections 2.3(d) and (e).
2.6 Bid Loans, Approved GNMA Letters of Credit, and Approved
Rate Hedging Agreements.
(a) Special Bids. The Company may, at any time, solicit a bid
from any Lender on a non-pro rata basis for a loan (a "Bid Loan") in such amount
and accruing interest at such rate as may be bid to the Company by such Lender
for interest periods of 1 to 45 days. Such Lender, in its sole discretion, may
make such a bid for a Bid Loan. The Company will be under no obligation to
accept any such bid, but may accept any one, or more than one, of such bids. A
Lender whose bid has been accepted by the Company shall be referred to as a "Bid
Lender". The Company and each Bid Lender shall execute and submit a Bid
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Loan Notice in the form of Exhibit G hereto to the Agent concurrently with the
Advance Notice for such Bid Loan.
(b) Approved GNMA Letters of Credit. The Company may, at any
time, request that any Lender issue a letter of credit in favor of GNMA as a
result of the failure by the Company to satisfy all document submission
requirements of GNMA in connection with the certification or re-certification by
GNMA of a pool of Mortgage Loans. If a Lender agrees to issue such a letter of
credit and desires that such letter of credit be ratably secured (along with the
other Credit Indebtedness) by the Collateral, such Lender shall submit to the
Agent a copy of the proposed letter of credit and copies of any related
reimbursement agreement or other related documentation. If (i) the Agent
approves such letter of credit and other documentation (which approval shall not
be unreasonably withheld), and (ii) the letter of credit expires by its terms on
a date which is prior to the Termination Date, then such letter of credit shall
constitute an Approved GNMA Letter of Credit and such Lender shall constitute an
"Issuing Lender". No such letter of credit shall be considered an Approved GNMA
Letter of Credit if its inclusion as an Approved GNMA Letter of Credit would, at
the time of issuance, cause any Lending Sublimit to be exceeded. The Company and
the applicable Issuing Lender shall promptly notify the Agent upon (i) the
expiration, cancellation or honoring of any Approved GNMA Letter of Credit, and
(ii) the payment by the Company of any amounts due to the Issuing Lender in
respect of any Approved GNMA Letter of Credit Obligations. No Issuing Lender nor
the Company shall amend or renew any Approved GNMA Letter of Credit or any
related reimbursement agreement or other related document without the prior
written consent of the Agent (which consent shall not be unreasonably withheld).
(c) Approved Rate Hedging Agreements. The Company may, from time
to time, request that one or more Lenders enter into Rate Hedging Agreements
with the Company. If a Lender agrees to enter into such an agreement and desires
all or a portion of the Company's obligations thereunder to be ratably secured
by the Collateral, such Lender shall submit to the Agent a copy of the proposed
Rate Hedging Agreement and copies of any related documentation. If (i) the Agent
approves such Rate Hedging Agreement, (ii) such Rate Hedging Agreement
terminates automatically on or before the Termination Date or provides for the
release of the Collateral (or the transfer or liquidation of Collateral in the
amount of the Approved Secured Rate Hedging Obligations) at such time, and (iii)
such Rate Hedging Agreement specifies the maximum amount of obligations
thereunder that will be secured by the Collateral, then such Rate Hedging
Agreement shall be an Approved Rate Hedging Agreement and the obligations
thereunder, up to the stated maximum, shall be Approved Secured Rate Hedging
Obligations hereunder, subject to the limitation
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that the maximum aggregate Approved Secured Rate Hedging Obligations at any time
shall not exceed $25,000,000.
(d) Additional Commitment. Each Bid Lender's commitment under an
accepted special bid, each Issuing Lender's issuance of an Approved GNMA Letter
of Credit and each Rate Hedging Agreement entered into by a Lender shall be in
addition to such Lender's Commitment and shall not reduce such Lender's
obligation to continue to fund its Adjusted Commitment Percentage of any other
Advance.
(e) Notes. Each Bid Loan owing to each Bid Lender shall not be
evidenced by the Notes executed and delivered in the form of Exhibit E-1 and
E-2, but shall instead be evidenced by an additional promissory note or notes in
a form mutually agreed to by the Company and such Bid Lender. The Agent shall
have no responsibility to confirm the existence or substance of such additional
promissory notes.
2.7 Rate after Maturity.
Any Advance not paid at maturity, whether by acceleration or
otherwise, and any other amount not paid when due hereunder shall bear interest
until paid in full at a rate per annum equal to the Alternate Base Rate plus two
percent (2.0%) per annum; provided, however, that such interest rate after
maturity shall in no event be less than the interest rate that was in effect
with respect to such Advance prior to maturity.
2.8 Interest Payment Dates.
Interest shall accrue at the relevant rate for each day from the
day on which the proceeds of such Advance are made available to the Company.
Interest accrued on each Advance other than a Eurodollar Advance, a Discount
Loan (which does not accrue interest prior to maturity), or a Bid Loan shall be
payable on the first to occur of (i) the first Business Day of the immediately
following calendar month, commencing with the first such date to occur after the
date hereof, or (ii) at maturity of the Facility, whether due to acceleration or
otherwise. Interest accrued on each Eurodollar Advance shall be payable on the
first to occur of (i) the last day of each Eurodollar Interest Period, or (ii)
any date on which any such Eurodollar Advance is prepaid, whether due to
acceleration or otherwise, or (iii) the Termination Date. Interest on Bid Loans
shall be payable on the first to occur of (i) the last day of the applicable
interest period for such Bid Loan as set forth in the Bid Loan Notice, (ii) any
date on which such Bid Loan is prepaid whether due to acceleration or otherwise
or (iii) the Termination Date. Interest and Fees shall be calculated for actual
days elapsed on the basis of a 360-day year. Interest shall be payable for the
day an Advance is made. Interest shall not be payable for the
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day of any payment on the amount paid if payment is received prior to noon
(Chicago time) at the place of payment. If any payment of principal of or
interest on an Advance shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day and, in the case
of a principal payment, such extension of time shall be included in computing
interest in connection with such payment.
2.9 Method of Selecting Rate Options and Interest Periods.
Subject to the terms hereof, for each Advance hereunder the
Company shall give the Agent irrevocable notice (an "Advance Notice") not later
than (i) 10:00 a.m. (Chicago time) on the proposed Advance Date for each Bid
Loan or Federal Funds Advance, (ii) noon (Chicago time) on the proposed Advance
Date for each Alternate Base Rate Advance (other than Swingline Advances), (iii)
3:00 p.m. (Chicago time) on the proposed Advance Date for each Overnight
Transaction Advance, (iv) 4:00 p.m. (Chicago time) on the proposed Advance Date
for each Swingline Advance which is an Alternate Base Rate Advance or a
Swingline Buydown Advance, and (v) 11:00 a.m. (Chicago time) three (3) Business
Days before the Advance Date for each Eurodollar Advance and each Discount
Advance, specifying:
(a) the Advance Date, which shall be a Business Day, of
such Advance,
(b) the aggregate amount of such Advance, which shall be in an
amount equal to $5,000,000 or a whole multiple of $1,000,000 in excess
thereof, except that (i) Swingline Advances other than Overnight
Transaction Advances shall have no minimum amount and need not be in
multiples of $1,000,000, and (ii) Overnight Transaction Advances shall
be in a minimum amount equal to $100,000 but need not be in multiples of
$1,000,000.
(c) the type of such Advance,
(d) the interest period applicable to such Advance, if
applicable,
(e) if such Advance is a Discount Advance, the Balance Bank or
Balance Banks for such Advance and, if applicable, the portion of such
Discount Advance allocated to each such Balance Bank,
(f) if such Advance is a Bid Loan, the Bid Lender for such Bid
Loan, and
(g) what portion, if any, of such Advance is to be used solely
for the purpose of repaying maturing commercial paper.
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Notwithstanding the foregoing, the Agent may also agree, in its sole discretion,
to accept (A) an Advance Notice requesting a Swingline Advance which is an
Alternate Base Rate Advance or Swingline Buydown Advance or (B) a Bid Loan
Notice at any time up until the close of the Agent's business day. Delivery of
an Advance Notice, whether by telephone or in writing, shall constitute a
representation and warranty that, after giving effect to the amount of the
Advance being requested, (i) the then-current Borrowing Base is equal to or
greater than the Credit Requirement, and (ii) no Lending Sublimit shall be
exceeded. Changes in the rate of interest on that portion of any Advance
maintained as an Alternate Base Rate Advance will take effect simultaneously
with each change in the Alternate Base Rate. The interest rate on each Overnight
Transaction Advance or Federal Funds Advance shall be recalculated daily for
each day that such Overnight Transaction Advance or Federal Funds Advance is
continued under Section 2.12(ii). Each Eurodollar Advance shall bear interest
for each day from and including the first day of the Eurodollar Interest Period
applicable thereto to (but not including) the last day of such Eurodollar
Interest Period at the interest rate determined as applicable to such Advance.
The Company shall select Eurodollar Interest Periods and Discount Loan Periods
with respect to Eurodollar Advances and Discount Loans so that it is not
necessary to pay a Eurodollar Advance or Discount Loan prior to the last day of
the applicable Eurodollar Interest Period or Discount Loan Period, as the case
may be, in order to make the mandatory repayment on the Termination Date. Any
change in the Applicable Margin shall be effective immediately with respect to
the interest rates on any Loans outstanding other than Discount Loans. Changes
in the Applicable Margin relating to Discount Loans shall not affect Discount
Loans outstanding at the time of any such change but shall be effective with
respect to any Discount Loans made after the date of any such change.
2.10 Maximum Number of Eurodollar Loans.
The Company may not request an additional Eurodollar Advance if
the making of such Advance would result in any Lender holding Eurodollar Loans
having more than six (6) different Eurodollar Interest Periods at any given
time.
2.11 Funding Procedures.
Not later than 2:00 p.m. (Chicago time) on each Advance Date,
each Lender shall make available its Loan or Loans (including Bid Loans), in
funds immediately available in Chicago to the Agent at its address specified
pursuant to Article XII, provided that Swingline Advances may be funded at any
time up to (i) the close of the Swingline Lender's business day so long as First
Chicago is both the Agent and the sole Swingline Lender, or (ii) 4:00 p.m.
(Chicago time) if First Chicago is not both the
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Agent and the sole Swingline Lender. The Agent will make the funds so received
from the Lenders available to the Company at the Agent's aforesaid address,
subject to the provisions of Article V. Notwithstanding the foregoing, the Agent
may also agree, in its sole discretion, to accept delivery of Bid Loan funds and
to make such funds available to the Company at any time up to the close of the
Agent's business day.
2.12 Conversion and Continuation.
(i) The Company may elect from time to time, subject to the
provisions of Sections 2.3(a), 2.9 and 2.10 and the Lending Sublimits
to convert all or any part of any Advance (other than a Bid Loan or
Discount Advance) into a different type of Advance, provided that any
conversion of any such Eurodollar Advance shall be made on, and only
on, the last day of the applicable Eurodollar Interest Period. Discount
Advances and Bid Loans are payable on the last day of the applicable
Discount Loan Period or Bid Loan period and may be repaid out of new
Advances hereunder but may not be converted directly to a different
type of Advance.
(ii) Alternate Base Rate Advances shall continue as the same
type of Advances unless and until such Advances are converted into a
different form of Advance in accordance with the terms hereof. Federal
Funds Advances shall continue as Federal Funds Advances unless and
until (a) such Advances are converted into a different form of
Advance in accordance with the terms hereof or (b) the Company has paid
any such Federal Funds Advance prior to 10:00 a.m. (Chicago time) on
any Business Day or given the Agent written notice before 10:00 a.m.
(Chicago time) on any Business Day that such Federal Funds Advance will
be repaid on such Business Day. Overnight Transaction Advances and
Swingline Buydown Advances shall continue as Overnight Transaction
Advances and Swingline Buydown Advances, respectively, unless and until
(a) such Advances are converted into a different form of Advance in
accordance with the terms hereof or (b) the Company has paid any such
Overnight Transaction Advance or Swingline Buydown Advance prior to
3:00 p.m. (Chicago time) on any Business Day or given the Agent written
notice before 3:00 p.m. (Chicago time) on any Business Day that such
Overnight Transaction Advance or Swingline Buydown Advance will be
repaid on such Business Day. If the Company so notifies the Agent that
it will be paying a Federal Funds Advance, Overnight Transaction
Advance or Swingline Buydown Advance on any Business Day and fails to
do so, such Advance shall be converted into an Alternate Base Rate
Advance. Eurodollar Advances shall continue until the end of the
then-applicable Eurodollar Interest Period therefor, at which time each
such Advance shall be automatically converted to a Federal Funds
Advance, unless the Company shall have given the Agent notice in
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accordance with Section 2.12(iii) requesting that, at the end of such
Eurodollar Interest Period, such Advance continue as a Eurodollar
Advance for a specified Eurodollar Interest Period or be converted to a
different type of Advance.
(iii) The Company shall give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of an Alternate
Base Rate Advance, a Federal Funds Advance, a Swingline Buydown Advance
or an Overnight Transaction Advance or conversion or continuation of a
Eurodollar Advance not later than (i) 10:00 a.m. (Chicago time) on the
date of the requested conversion or continuation, in the case of a
conversion into a Federal Funds Advance, Alternate Base Rate Advance,
Overnight Transaction Advance or Swingline Buydown Advance, or (ii)
11:00 a.m. (Chicago time) at least three Business Days prior to the
date of the requested conversion into or continuation of a Eurodollar
Loan, specifying: (1) the requested date (which shall be a Business
Day) of such conversion or continuation; (2) the amount and type of the
Advance to be converted or continued; (3) the amount and type(s) of
Advance(s) into which such Advance is to be converted or continued; and
(4) in the case of a conversion into or continuation of a Eurodollar
Advance, the duration of the Eurodollar Interest Period applicable
thereto.
2.13 Optional Principal Payments.
All or any portion of Alternate Base Rate Advances, Overnight
Transaction Advances, Swingline Buydown Advances and Federal Funds Advances may
be paid without penalty or premium on any Business Day provided that such
repayments are made by (i) 10:00 a.m. (Chicago time) with respect to Federal
Funds Advances, (ii) noon (Chicago time) with respect to Alternate Base Rate
Advances, or (iii) 3:00 p.m. (Chicago time) with respect to Overnight
Transaction Advances and Swingline Buydown Advances. A Eurodollar Advance or
Discount Loan may not be paid prior to the last day of the applicable Eurodollar
Interest Period or Discount Loan Period, as the case may be; provided, however,
that the Company shall compensate the Lenders for any funding losses and/or loss
of profits incurred as a result of any voluntary prepayment (if accepted) or
involuntary prepayment of any such Advance prior to the last day of the
applicable Eurodollar Interest Period or Discount Loan Period. Bid Loans may not
be prepaid unless the applicable Bid Lender has agreed otherwise and notified
the Agent of such agreement. All optional principal payments shall be applied to
the type of Advance designated by the Company when making such payment, provided
that any payments received during the continuance of an Event of Default shall
be applied on a pro rata basis to all Advances then outstanding (with the
portion applicable to Eurodollar Loans or Discount Loans to be applied to such
Loans either immediately or at the
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end of the relevant Eurodollar Interest Period or Discount Loan Period at the
option of the Company).
2.14 Required Principal Payments.
(a) Payments Related to Borrowing Base. On any date that the
Credit Requirement is in excess of the then-current Borrowing Base, the Company
shall make a mandatory payment to the Agent for the benefit of the Lenders in
the amount of such excess. Such payment shall be allocated pro rata among the
Lenders in accordance with the amounts of their outstanding Loans hereunder.
(b) Final Payment on Termination Date. The outstanding principal
balance of all Advances not repaid earlier, together with any accrued and unpaid
interest and Fees, unless required to be paid earlier pursuant to the terms
hereof, shall be due and payable on the Termination Date.
2.15 Method of Payment.
All payments of principal, interest, and Fees hereunder
(including any payments related to Bid Loans) shall be made in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Company on the date due by 1:00 p.m. (Chicago time)
with respect to all Advances other than Swingline Advances and by 3:00 p.m.
(Chicago time) with respect to Swingline Advances. Notwithstanding the
foregoing, if the Company fails to repay or give the Agent notice of repayment
of a Federal Funds Advance before 10:00 a.m. (Chicago time) or an Overnight
Transaction Advance before 3:00 p.m. (Chicago time) on the Business Day that the
Company intends to repay such Advance, any payment of such Advance received by
the Agent on such Business Day after the time required for payment or notice
shall be deemed to have been received by the Agent at the opening of business on
the following Business Day. Each payment delivered to the Agent for the account
of any Lender shall be delivered promptly by the Agent to such Lender in the
same type of funds which the Agent received at its address specified pursuant to
Article XII or at any Lending Installation specified in a notice received by the
Agent from such Lender. The Agent is hereby authorized to charge the account of
the Company maintained with First Chicago for each payment of principal,
interest and fees as it becomes due hereunder.
2.16 Notes; Telephonic Notices.
Each Lender is hereby authorized to record the principal amount
of each of its Loans and each repayment on the schedules attached to its Notes
provided, however, that the failure to so
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record or any error in such recording shall not affect the Company's obligations
hereunder or under such Notes. The Company hereby authorizes the Lenders and the
Agent to extend, continue or convert Advances, effect Rate Option selections and
to transfer funds to or for the account of the Company based on telephonic
notices (confirmed promptly thereafter by facsimile) made by any person or
persons the Agent or any Lender in good faith believes to be acting on behalf of
the Company. The Company agrees to deliver promptly to the Agent a written
confirmation, if such confirmation is requested by the Agent or any Lender, of
each telephonic notice signed by an officer of the Company authorized in writing
to do so. If the written confirmation differs in any material respect from the
action taken by the Agent and the Lenders, the records of the Agent and the
Lenders shall govern absent manifest error.
2.17 General Provisions as to Payments.
(a) The Company shall make each payment of principal or interest
on the Loans and shall pay all Fees not later than the times stated in
Section 2.15. The Agent shall promptly distribute to each Lender its
share of each payment of principal or interest or fees received by the
Agent for the account of such Lender.
(b) Amounts paid to or held by the Agent for the payment of
Loans shall not be deemed paid to a Lender until received by such Lender
by the later of 3:00 p.m. (Chicago time) or the close of business on
such date. If amounts are received by the Agent from the Company prior
to the applicable times stated in Section 2.15 and the Agent fails to
make a Lender's portion of such amount available to such Lender by close
of business on such date, the Company shall have no obligation to pay
any further interest on such payment and the Agent shall pay to such
Lender interest on such payment to the date paid to such Lender by the
Agent at a rate per annum equal to the then-current Published Federal
Funds Effective Rate.
2.18 Notification of Advances, Interest Rates and Prepayments.
Promptly after receipt thereof, the Agent will notify each
Lender by facsimile of the contents of each Advance Notice,
Conversion/Continuation Notice, and repayment notice received by it hereunder.
Not later than one Business Day prior to the Advance Date for each Eurodollar
Advance or Discount Loan, the Agent will notify by facsimile each Lender and the
Company of the interest rate applicable to each Eurodollar Advance, the Face
Amount of each Discount Advance and the Purchase Price to be paid by each Lender
for its share of such Discount Advance promptly upon determination of such
interest rate, Face Amount and
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Purchase Price. When any Advances are outstanding or have been requested at the
Federal Funds Rate or the Alternate Base Rate the Agent will give each Lender
and the Company prompt notice by facsimile of each change in such rate.
2.19 Lending Installations.
Each Lender may book its Loans at any Lending Installation
selected by such Lender and may change its Lending Installation from time to
time. All terms of this Agreement shall apply to any such Lending Installation
and the Notes shall be deemed held by each Lender for the benefit of such
Lending Installation. Each Lender may, by facsimile or written notice to the
Agent and the Company, designate a Lending Installation through which Loans will
be made by it and for whose account Loan payments are to be made.
Notwithstanding the foregoing, no Lender may transfer its Loans to another
Lending Installation if such transfer would cause the Company to incur
additional indemnification costs under Section 3.1 hereof, and if after a Lender
transfers its Loans to another Lending Installation the Company incurs
additional indemnification costs under Section 3.1 hereof as a result of such
transfer, such Loans shall be transferred back to the original Lending
Installation.
2.20 Non-Receipt of Funds by Agent.
(a) Unless the Company or a Lender, as the case may be, notifies
the Agent prior to the close of business on the Business Day immediately
preceding the date on which it is required to make payment to the Agent of (i)
in the case of a Lender, the proceeds of a Loan or (ii) in the case of the
Company, a payment of principal, interest or fees to the Agent for the account
of the Lenders, that it does not intend to make such payment, the Agent may
assume that such payment has been made or will be made on the date required. The
Agent may, but shall not be obligated to, make the amount of such payment
available to the intended recipient in reliance upon such assumption. If such
Lender or the Company, as the case may be, has not in fact made or does not make
when due such payment to the Agent, the recipient of such payment shall, on
demand by the Agent, repay to the Agent the amount so made available together
with interest thereon in respect of each day during the period commencing on the
date such amount was so made available by the Agent until the date the Agent
recovers such amount at a rate per annum equal to (i) in the case of repayment
by a Lender, the Published Federal Funds Effective Rate for such day or (ii) in
the case of repayment by the Company, the interest rate applicable to the
relevant Loan. If a Lender fails to pay the Agent as provided in the preceding
sentence, the Company shall pay such amount to the Agent upon demand plus
interest (at the rate applicable to the applicable Advance) to the date of
repayment (but not including such date if
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payment is received prior to the deadlines established in Section 2.15).
(b) Neither the Agent nor any Lender shall incur any liability
to the Company in acting upon any telephonic notice referred to in this
Agreement which the Agent or such Lender believes in good faith to have been
given by a duly authorized officer or other person authorized to borrow on
behalf of Company or for otherwise acting in good faith under this Section 2.20.
Upon the funding of Loans by the Lenders in accordance with this Agreement
(including satisfaction of all conditions thereto) pursuant to any telephonic
notice (with confirmation promptly thereafter by facsimile), the Company shall
have effected a borrowing hereunder. An Advance Notice (or telephonic notice in
lieu thereof) shall be irrevocable and the Company shall be bound to effect a
borrowing in accordance therewith.
(c) If the Agent fails to make any Loan funds received from a
Lender available to the Company for any reason and does not return such Loan
funds to such Lender on the same Business Day such funds were received by the
Agent, the Agent shall pay to such Lender, upon demand, interest from the date
such funds are received by the Agent from such Lender, provided such funds were
received prior to the deadlines for receipt set forth in Section 2.11 until the
date such corresponding amount is either made available by the Agent to the
Company within the time limits of Section 2.11 or so returned to such Lender, at
the rate per annum equal to the then-current Published Federal Funds Effective
Rate and the Company shall have no responsibility to such Lender with respect to
such funds until they are so made available to the Company by the Agent.
(d) Nothing in this Section 2.20 shall relieve any Lender from
its obligation to fund its share of any Advance, prejudice any rights the
Company may have against any Lender as a result of such Lender's failure to make
the amount of its Loan available to the Company or obligate any Lender to fund
any other Lender's share of any Advance.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1 Yield Protection.
If, after the date of this Agreement, the adoption of any law or
any governmental or quasi-governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any change in any
existing or future law, rule, regulation, policy, guideline or directive or the
interpretation or administration thereof, or the compliance of any Lender
therewith,
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(i) subjects any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding on or from payments
due from the Company, or changes the basis of taxation of payments to
any Lender in respect of its Loans or other amounts due it hereunder
(excluding any tax imposed with respect to the overall net income of any
Lender or its Lending Installation and any franchise taxes imposed on
any such Lender or Lending Installation to the extent such franchise
taxes are in lieu of net income taxes), or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation (other
than reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Advances or Discount Loans), or
(iii) affects the amount of capital required or expected to
be maintained by any Lender or Lending Installation or any corporation
controlling any Lender or Lending Installation and such Lender
determines the amount of capital required is increased by or based upon
the existence of this Agreement or its obligation to make or maintain
Loans hereunder or of commitments of this type, or
(iv) imposes any other condition which requires any Lender
or any applicable Lending Installation to make any payment calculated by
reference to the amount of loans held or interest received by it in an
amount deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
Lending Installation of making, renewing or maintaining its Commitment or any
Loan or to reduce any amount receivable in respect thereof or to reduce the rate
of return on the capital of such Lender or Lending Installation or any Person
controlling such Lender or Lending Installation as it relates to credit
facilities in the nature of that evidenced by this Agreement, then the Company
shall pay such Lender that portion of such increased expense incurred
(including, in the case of Section 3.1(iii), any reduction in the rate of return
on capital to an amount below that which it could have achieved but for such
law, rule, regulation, policy, guideline or directive and after taking into
account such Lender's policies as to capital adequacy) or reduction in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Loans and its Commitment to the extent such expenses or
reductions arise from and after the date which is 90 days before receipt by the
Company of demand for payment by such Lender. Notwithstanding the foregoing, if
any of the foregoing circumstances otherwise giving rise to the yield protection
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provisions of this Section are imposed solely against a single Lender as a
result of circumstances or conditions which apply solely to that Lender and not
generally to lenders domiciled in the jurisdiction of such Lender's domicile,
then the yield protection provisions of this Section shall not apply with
respect to such circumstances.
3.2 Availability of Rate Options.
If any Lender determines that maintenance of any of its Eurodollar
Loans or Discount Loans at a suitable Lending Installation would violate any
applicable law, rule, regulation or directive, whether or not having the force
of law, the Agent shall suspend the availability of the affected Rate Option and
require any Eurodollar Advances or Discount Loans outstanding at the affected
Rate Option to be repaid immediately upon demand; or if the Required Lenders
determine that deposits of a type or maturity appropriate to match fund
Eurodollar Advances or Discount Loans are not available, the Agent shall suspend
the availability of the affected Rate Option with respect to any such Loans or
Advances made after the date of any such determination. If the Required Lenders
determine that the Eurodollar Rate or the Discount Rate does not accurately
reflect the cost of making a Eurodollar Advance or Discount Loan at such Rate
Option, then, if for any reason whatsoever the provisions of Section 3.1 are
inapplicable, the Agent shall suspend the availability of the affected Rate
Option with respect to any Eurodollar Advance or Discount Loan made after the
date of any such determination.
3.3 Funding Indemnification.
If any payment of a Eurodollar Advance or Discount Loan occurs on a
date which is not the last day of the applicable Eurodollar Interest Period or
Discount Loan Period, whether because of acceleration, prepayment or otherwise,
or if a Eurodollar Advance, Overnight Transaction Advance, Federal Funds
Advance, Swingline Buydown Advance or Discount Loan is not made, continued or
established by conversion on the date specified by the Company for any reason
other than default by the Lenders, the Company will indemnify each Lender for
any loss or cost incurred by it resulting therefrom, including, without
limitation, any loss or cost in liquidating or employing deposits acquired to
fund or maintain such Eurodollar Advance or Discount Loan.
3.4 Lender Statements; Survival of Indemnity.
To the extent reasonably possible, each Lender shall designate an
alternate Lending Installation with respect to its Eurodollar Advances and
Discount Loans to reduce any liability of the Company to such Lender under
Section 3.1 or to avoid the unavailability of a Rate Option under Section 3.2,
so long as such designation is not to the economic detriment of such Lender
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and does not impose any increased regulatory burdens on such Lender. Each Lender
shall deliver to the Agent and the Company a written statement of such Lender as
to the amount due, if any, under Section 3.1 or 3.3. Such written statement
shall set forth in reasonable detail the calculations upon which such Lender
determined such amount and shall be final, conclusive and binding on the Company
in the absence of manifest error. Determination of amounts payable under such
Sections in connection with a Eurodollar Advance or Discount Loan shall be
calculated as though each Lender funded its related Loan through the purchase of
a deposit of the type and maturity corresponding to the deposit used as a
reference in determining the Eurodollar Rate or Discount Rate applicable to such
Loan, whether in fact that is the case or not. The amount specified in the
written statement shall be payable within 15 days after receipt by the Company
of the written statement. The obligations of the Company under Sections 3.1 and
3.3 shall survive payment of the Obligations and termination of this Agreement.
In the event any Lender is affected by any of the events described in Section
3.1 or 3.2 the Company shall have the right, if no Default then exists, to repay
in full all Credit Indebtedness owed to such Lender provided that the Company
has, with the approval of the Agent (not to be unreasonably withheld), arranged
to substitute a replacement lender for the full amount of such Lender's
Commitment.
3.5 Lender Tax Agreement.
Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) deliver to the Company and the Agent (A) two duly
completed copies of the United States Internal Revenue Service Form 1001
or 4224, or successor applicable form, as the case may be, and (B) an
Internal Revenue Service Form W-8 or W-9, or successor applicable form,
as the case may be;
(ii) deliver to the Company and the Agent two further copies of
any such form or certification on or before the date that any such form
or certification expires or becomes obsolete and after the occurrence of
any event requiring a change in the most recent form previously
delivered by it to the Company; and
(iii) obtain such extension of time for filing and complete such
forms or certifications as may reasonably be requested by the Company or
the Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms or any
certifications required hereby inapplicable or which would prevent such Lender
from duly
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completing and delivering any such form or making such certification with
respect to it and such Lender so advises the Company and the Agent. Such Lender
shall certify (i) in the case of Form 1001 or 4224 delivered in accordance with
this Section 3.5, that it is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes and
(ii) in the case of a Form W-8 or W-9, that it is entitled to an exemption from
United States backup withholding tax. Each Person that shall become a Lender or
a Participant pursuant to Article XI shall, upon the effectiveness of the
related transfer, be required to provide all of the forms and statements
required pursuant to this Section, provided that in the case of a Participant
such Participant shall also furnish all such required forms and statements to
the Lender from which the related participation shall have been purchased as
well as to the Company and the Agent.
ARTICLE IV
COLLATERAL AND BORROWING BASE
4.1 Eligible Collateral - Pledged Mortgages.
(a) "Eligible Mortgage Loan" means a Pledged Mortgage
which:
(i) has been originated less than 360 days prior
to inclusion in the Borrowing Base;
(ii) is a Conforming Mortgage Loan, a Jumbo
Mortgage Loan, a New York Consolidation Loan or a
Nonconforming Mortgage Loan;
(iii) has been included in the Borrowing Base for 180 days
or less after the Pledge Date thereof;
(iv) is not financed under an agreement to repurchase or
otherwise pledged to secure any Debt other than the Credit Indebtedness
pursuant to the Security Agreement;
(v) has been duly executed and delivered by the
parties thereto at a closing;
(vi) is valid and enforceable in accordance with its
terms, without defense or offset;
(vii) has not been modified or amended and has not
had any requirements thereof waived except as permitted by
Federal Agency requirements;
(viii) is subject to and complies with the delivery
requirements of an Approved Investor Commitment to purchase
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such Pledged Mortgage, unless such Pledged Mortgage is a
Nonconforming Mortgage Loan which is not a Qualified Second
Loan;
(ix) has been correctly described in the Collateral
Transmittal submitted to the Collateral Agent in respect of such Pledged
Mortgage; and
(x) has been fully funded to the mortgagor or to an
escrow or closing agent by wire transfer, transmittal through the
"Automated Clearing House" or any similar private clearing house for
interbank transfers of funds, cashier's check or a cleared check or
draft;
and as to which the representations and warranties contained in Section 4.6
relating thereto are true and correct as of the Pledge Date of such Mortgage
Loan and as of each day thereafter as if made on each such date.
(b) "Eligible Delivered Mortgage" means an Eligible Mortgage
Loan as to which:
(i) the Collateral Agent has received and continues to
hold the Required Mortgage Documents and, if requested by the Agent or
the Collateral Agent, the Additional Required Mortgage Documents for
such Pledged Mortgage, other than those documents and instruments which
are in the possession of a Person to whom delivery was made pursuant to
a Bailee Letter or a Company Trust Receipt;
(ii) not more than 45 days have passed after the day on
which the Mortgage Note for such Pledged Mortgage was delivered,
pursuant to a Bailee Letter, to an Approved Investor other than one
created under a government housing program which is not a Federal Agency
for examination and purchase without such Mortgage Note being returned
to the Collateral Agent; and not more than 75 days have passed after the
day on which the Mortgage Note for such Pledged Mortgage was delivered,
pursuant to a Bailee Letter, to an Approved Investor created under a
government housing program which is not a Federal Agency for examination
and purchase without such Mortgage Note being returned to the Collateral
Agent;
(iii) no Approved Investor has paid the purchase price or
delivered the Securities due to the Company on account of such Pledged
Mortgage;
(iv) not more than 15 days have passed after the date on
which any document relating to such Pledged Mortgage was sent, pursuant
to a Company Trust Receipt, to the Company for correction of clerical or
other non-substantial documentation problems in preparation of such
document
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without such documentation being returned to the Collateral Agent
properly corrected;
(v) no installment of principal or interest on such
Pledged Mortgage is more than one payment past due; and
(vi) such Mortgage Loan constitutes a first lien (or a
second lien, with respect only to Qualified Second Loans) on the
premises described therein.
(c) "Eligible AP Mortgage" means an AP Mortgage which is an
Eligible Mortgage Loan and as to which:
(i) the information described on Exhibit 7 to the
Security Agreement regarding such AP Mortgage was contained in a
Collateral Transmittal submitted to the Collateral Agent on the same
date as the applicable AP Notice;
(ii) the proceeds thereof have been funded (or, on the
date of the Advance supported by the applicable AP Notice, are being
funded) by wire transfer or cashier's check, cleared check or draft or
other form of immediately available funds to the escrow or closing agent
for such AP Mortgage;
(iii) the Pledgor expects such AP Mortgage to close and
become a valid lien securing actual indebtedness by funding to the order
of the mortgagor thereunder;
(iv) (a) with respect to all AP Mortgages other than New
York Consolidation Loans, not more than twelve (12) Business Days have
passed since the delivery of the AP Notice therefor (and if more than
seven (7) Business Days have passed since the delivery of such AP
Notice, the Borrowing Base Sublimit set forth in Section 4.5(x) has been
satisfied) or (b) with respect to AP Mortgages that are New York
Consolidation Loans, not more than twenty-one (21) calendar days have
passed since delivery of the AP Notice therefor;
(v) the Company has not delivered to the Collateral Agent
any documents which purport to be Required Mortgage Documents for such
AP Mortgage;
(vi) the proceeds thereof have not been returned to the
Company from the escrow or closing agent for such Pledged Mortgage;
(vii) the Company has not learned that such AP Mortgage
will not be closed and funded to the order of the mortgagor; and
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(viii) upon recordation such Mortgage Loan will constitute a
first lien (or second lien, with respect only to Qualified Second Loans)
on the premises described therein.
4.2 Eligible Collateral - Repurchased Agency Loans and
Receivables.
"Eligible Repurchased Agency Loans and Receivables" means
Repurchased Agency Loans and Receivables as to which:
(i) the Company's purchase was in compliance with all
regulations of the Federal Agency which issued or guaranteed the
Security relating to the mortgage pool from which the Repurchased Agency
Loans and Receivables were repurchased;
(ii) no notice or other indication has been given by FHA
or VA challenging the obligation of FHA or VA to pay the full amount due
on any insurance or guaranty certificate in connection with such
Mortgage Loans (and in the good-faith estimation of the Company, no such
challenge is forthcoming);
(iii) the repurchased Mortgage Loan does not have any
payments more than 720 days past due (unless the borrower of such
repurchased Mortgage Loan filed a voluntary bankruptcy petition or had
an involuntary bankruptcy petition filed against it while the payments
on such Mortgage Loan were past due, in which case such 720 day period
shall be extended to 1080 days);
(iv) not more than 120 days have passed since the
foreclosure sale or transfer in lieu of foreclosure with respect to the
repurchased Mortgage Loan;
(v) not more than 180 days have passed since the
reinstatement of the repurchased Mortgage Loan; and
(vi) the repurchased Mortgage Loan shall not be a Mortgage
Loan which in the good faith estimation of the Company is deemed to be a
"no bid" candidate under the current VA practice, provided that such
estimation by the Company may take into account the amount of any buy
down of the principal balance of such Mortgage Loan which (i) has
actually been made by the Company, or (ii) is anticipated to be made by
the Company, provided that the amount of any such anticipated buy down
shall be deducted from the Mortgage Collateral Value of such Repurchased
Agency Loan and Receivable for determining the portion of the Borrowing
Base attributable to such Repurchased Agency Loans and Receivables.
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4.3 Eligible Collateral - Securities.
"Eligible Pledged Security" means a Pledged Security:
(i) which is covered by an Approved Investor
Commitment;
(ii) as to which the Collateral Agent has received such
evidence as may be required under the Security Agreement to confirm the
existence of the security interest in favor of the Collateral Agent for
the benefit of the Lenders in such Pledged Security; and
(iii) which has been included in Collateral for 90 days or
less after the Pledge Date therefor.
4.4 Eligible Collateral - Servicing Sale Receivables.
"Eligible Servicing Sale Receivables" means Pledged
Servicing Sale Receivables as to which:
(i) the Agent and Collateral Agent have received a
complete executed copy of the related purchase agreement and written
confirmation from the Servicing Purchaser as to the amount of such
Servicing Sale Receivable;
(ii) the Servicing Purchaser of the applicable sold
Servicing Agreements either (A) has a long term unsecured debt rating of
at least A- from S&P or A3 from ▇▇▇▇▇'▇, or (B) has been approved by the
Agent;
(iii) the Agent has reasonably determined that the
counterparties to the sold Servicing Agreements have or will consent to
the sale of such Servicing Agreements to the Servicing Purchaser, if
such consent is required;
(iv) the Company has assigned its rights to such Servicing
Sale Receivables to the Collateral Agent for the benefit of the Secured
Parties pursuant to an assignment in form and content satisfactory to
the Agent;
(v) the Servicing Purchaser of the applicable sold
Servicing Agreements has executed an agreement in form and content
satisfactory to the Agent pursuant to which the Servicing Purchaser has
agreed to (A) pay such Servicing Sale Receivables directly to the
Collateral Agent for the benefit of the Secured Parties, and (B) provide
simultaneous written notice to the Agent and the Collateral Agent of any
claims made against or notices given to the Company which would
constitute an offset to or reduction in the amount of such Servicing
Sale Receivable; and
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(vi) the Servicing Sale Receivables have been included in
Eligible Collateral for 180 days or less;
provided, however, that (1) Eligible Servicing Sale Receivables shall not
include any "holdback" amounts or deferred installments of the purchase price
payable by such Servicing Purchaser which are not payable to the Company within
180 days after the initial payment to the Company for the sale of such Servicing
Agreements to such Servicing Purchaser, (2) Eligible Servicing Sale Receivables
shall not include any "holdback" amounts or deferred installments of the
purchase price payable by such Servicing Purchaser which are subject to
withholding or offset on account of the performance of the servicing being sold
or any failure, breach or other deficiency in the performance of the Company
after the date of such sale other than any such deferred payments which are
conditioned only on (x) the Company obtaining consents from the counterparty to
the sold Servicing Agreements approving the sale of such Servicing Agreements to
the Servicing Purchaser or (y) the Company's continuing to take customary
ordinary-course actions relating to origination and servicing of Mortgage Loans
(e.g. obtaining pool certifications, refraining from defaulting under Servicing
Agreements, etc.), and (3) any offset to or reduction in the amount of such
Servicing Sale Receivable claimed by the Servicing Purchaser (to the extent not
already deducted from Eligible Servicing Sale Receivables pursuant to the
preceding provisions) shall, at the election of the Agent, the Collateral Agent
or the Required Lenders, reduce the amount of such Servicing Sale Receivable
which qualifies as an Eligible Servicing Sale Receivable, with such reduction to
be effective immediately unless the Company in good faith contests the amount or
validity of such offset or reduction, and with such reduction to be effective 30
days after the claim of offset or reduction with respect to any amount which is
contested in good faith by the Company.
4.5 Borrowing Base.
The term "Borrowing Base" means, as of any date, the sum of the
amounts determined by applying the percentages set forth below to the respective
values of the categories of Collateral described in subparagraphs (a) - (g)
below (without duplication as any asset is converted from one category to
another):
(a) one hundred percent (100%) of the balance to the credit of
the Company in the Settlement Account;
(b) one hundred percent (100%) of the value of the cash and Cash
Equivalents held by the Collateral Agent (or a sub-agent of the
Collateral Agent) and in which the Collateral Agent has a perfected
first priority security interest as security for the Secured Debt, as
conclusively determined by the Collateral Agent and reported to the
Agent
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daily based on the value of such cash and Cash Equivalents as
of the close of trading on the preceding Business Day;
(c) ninety-eight percent (98%) of the Mortgage Collateral Value
of each Eligible Delivered Mortgage;
(d) ninety-eight percent (98%) of the Mortgage Collateral Value
of each Eligible AP Mortgage;
(e) ninety-nine percent (99%) of the MBS Value of each Eligible
Pledged Security;
(f) ninety percent (90%) of the value of Eligible Repurchased
Agency Loans and Receivables (as determined in accordance with the
definition of Repurchased Agency Loans and Receivables) as determined
pursuant to information provided by the Company to the Collateral Agent
on the first Business Day of each week based on the value of such
Eligible Repurchased Agency Loans and Receivables as of the preceding
Thursday; and
(g) seventy-five percent (75%) of the amount of Eligible
Servicing Sale Receivables.
The maximum amount that can be credited toward the Borrowing
Base from certain categories of assets shall be limited as follows
(collectively, the "Borrowing Base Sublimits") so that the portion of the
Borrowing Base:
(i) attributable to Jumbo Mortgage Loans shall not
exceed twenty-five percent (25%) of the Aggregate Commitment;
(ii) attributable to (A) all Nonconforming Mortgage Loans
shall not exceed ten percent (10%) of the Aggregate Commitment, (B)
those Nonconforming Mortgage Loans which are also HLTV Loans shall not
exceed two and one half percent (2.5%) of the Aggregate Commitment, and
(C) those Nonconforming Mortgage Loans which have an original principal
balance of $200,000 or more shall not exceed one percent (1%) of the
Aggregate Commitment;
(iii) attributable to Jumbo Mortgage Loans with Mortgage
Collateral Values on the Pledge Date therefor in excess of $600,000
shall not exceed two percent (2%) of the Aggregate Commitment;
(iv) attributable to Repurchased Agency Loans and
Receivables other than Reinstated Repurchased Agency Loans and
Receivables shall not exceed at any time the lesser of (A) $200,000,000,
and (B) forty percent (40%) of the Aggregate Commitment;
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(v) attributable to Reinstated Repurchased Agency Loans
and Receivables shall not exceed at any time five percent (5%) of the
Aggregate Commitment;
(vi) attributable to REO and accounts receivable
(including proceeds of FHA insurance or VA guaranties) acquired in
connection with a foreclosure sale or a transfer in lieu of foreclosure
of Repurchased Agency Loans and Receivables shall not exceed seven and
one-half percent (7.5%) of the Aggregate Commitment;
(vii) for the first five and last five Business Days in any
calendar month, attributable to AP Mortgages shall not exceed
thirty-five percent (35%) of the Aggregate Commitment;
(viii) for any day other than the first five and last five
Business Days of any calendar month, attributable to AP Mortgages shall
not exceed twenty-five percent (25%) of the Aggregate Commitment;
(ix) attributable to Eligible Delivered Mortgages which
were sent, pursuant to a Company Trust Receipt, to the Company for
correction of clerical or other non-substantial documentation problems
in preparation of such document without such documentation being
returned to the Collateral Agent properly corrected shall not exceed two
percent (2%) of the Aggregate Commitment;
(x) attributable to AP Mortgages (other than New York
Consolidation Loans) as to which the Collateral Agent has not received
the Required Mortgage Documents within seven (7) Business Days of the
Pledge Date therefor shall not exceed one percent (1%) of the Aggregate
Commitment;
(xi) attributable to Eligible Mortgage Loans which have
been included in the Borrowing Base for more than 90 days shall not
exceed five percent (5%) of the Aggregate Commitment;
(xii) attributable to Eligible Mortgage Loans which were
originated more than 180 days prior to the Pledge Date therefor shall
not exceed five percent (5%) of the Aggregate Commitment;
(xiii) attributable to Eligible Servicing Sale Receivables
shall not exceed ten percent (10%) of the Aggregate Commitment; and
(xiv) attributable to New York Consolidation Loans shall
not exceed one percent (1%) of the Aggregate Commitment.
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4.6 Special Representations as to Pledged Warehouse
Collateral.
By delivering or causing the delivery of any Mortgage Loan,
Security or AP Notice to the Collateral Agent in pledge under the Security
Agreement the Company (the "Pledgor") shall be deemed to have represented and
warranted with respect to such Pledged Item, that:
(1) Such Pledged Item constitutes Eligible Collateral;
(2) The Pledgor is the legal and equitable owner and holder of
such Pledged Item and has full power and authority to pledge such
Pledged Item. Such Pledged Item constitutes Eligible Collateral, has
been duly and validly pledged to the Collateral Agent, is subject to no
contractual restriction on the creation of a Lien thereon, and is
subject to no Lien other than the lien of the Security Agreement in
favor of the Secured Parties. Each commitment of a Person to purchase
Pledged Items from the Pledgor (including Approved Investor Commitments)
has been duly and validly issued to the Pledgor, has been duly and
validly pledged to the Collateral Agent and is subject to no Lien other
than the lien of the Security Agreement in favor of the Secured Parties.
(3) Each Pledged Mortgage has been or will be promptly duly
recorded where necessary and complies with all applicable state or local
recording, registration and filing laws and regulations.
(4) There are no defenses, counterclaims or offsets of any
nature whatsoever with respect to such Pledged Mortgage or the
indebtedness evidenced and secured thereby or with respect to any
Required Mortgage Document and, other than the related Required Mortgage
Documents and Additional Required Mortgage Documents, there are no
instruments or documents evidencing, securing or guaranteeing payment of
the indebtedness constituting such Pledged Mortgage.
(5) Each requirement of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit
opportunity or disclosure laws (including environmental disclosure laws
imposing obligations on mortgagees) applicable to such Pledged Item has
been complied with in all material respects.
(6) The Company is the servicer for each such Pledged Mortgage
(unless the Agent has been advised to the contrary in writing and the
Agent approved such other arrangement).
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(7) The representation set forth in Section 6.15 is reaffirmed
as of the Pledge Date.
(8) Each Assignment (i) has been duly authorized by all
necessary corporate action by the Pledgor, duly executed and delivered
by the Pledgor and is the legal, valid and binding obligation of the
Pledgor enforceable in accordance with its terms and (ii) complies with
all applicable laws including all applicable recording, filing and
registration laws and regulations and is adequate and legally sufficient
for the purpose intended to be accomplished thereby, including, without
limitation, the assignment of all of the rights, powers and benefits of
the Pledgor as mortgagee.
(9) So long as the Collateral Agent complies with the procedures
set forth in the Security Agreement relating to possession of Collateral
(and assuming recordation of Assignments in states in which such
recordation is necessary for the perfection of the Collateral Agent's
security interest in the applicable Mortgage Loans) and, in the case of
book-entry Securities, notations of ownership related thereto, the
Collateral Agent, for the benefit of the Secured Parties, will have a
valid and perfected first priority security interest in such Pledged
Item and all proceeds, products and profits derived therefrom,
including, without limitation, all moneys, goods, insurance proceeds and
other tangible or intangible property received upon liquidation thereof.
(10) The Pledgor has complied with all laws, rules and
regulations in respect of such Pledged Mortgage if it is insured by FHA
or guaranteed by VA and the related insurance or guarantee is in full
force and effect. All such Mortgage Loans comply in all respects with
all applicable requirements for purchase under the FNMA standard form of
selling contract for FHA insured and VA guaranteed loans and any
supplement thereto then in effect.
(11) To the extent that any applicable requirements of any law
or any governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law), or any interpretation thereof,
including, without limitation, the provisions of Title XI of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, as
amended, reformed or otherwise modified from time to time, and any rules
promulgated to implement such provisions (collectively, "Appraisal
Regulations") require Pledgor to have received (or require that the
Lenders require Pledgor to receive) an appraisal on the property
underlying such Pledged Mortgage, such an appraisal has been be obtained
and such appraisal meets the requirements of all such Appraisal
Regulations.
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(12) All fire and casualty policies covering the premises
encumbered by each Pledged Mortgage (i) name the Pledgor as the insured
under a standard mortgagee clause not less favorable in coverage to the
mortgagee than is customarily used in the state where such premises is
located, (ii) are in full force and effect, and (iii) afford insurance
against fire and such other risks as are usually insured against in the
broad form of extended coverage insurance from time to time available,
as well as insurance against flood hazards as required by FHA or VA.
(13) To the best of the Pledgor's knowledge without
investigation, no Person has transported, released, emitted, discharged,
leached, dumped or disposed of any Hazardous Substance onto or into any
portion of the premises encumbered by a Pledged Mortgage except in
material compliance with all applicable federal, state, foreign and
local laws, rules, regulations and orders.
By pledging any Repurchased Agency Loans and Receivables to the
Collateral Agent under the Security Agreement the Company shall be deemed to
have represented and warranted that such Repurchased Agency Loans and
Receivables were purchased by the Company in compliance with all regulations of
the Federal Agency which issued or guaranteed the Security relating to the pool
from which the Repurchased Agency Loans and Receivables were repurchased.
If any representation or warranty contained in this Section is
inaccurate or shall cease to be true with respect to any Pledged Item to which
such representation and warranty applies, such Pledged Item shall not constitute
an Eligible Mortgage Loan or an Eligible Pledged Security, but the breach of
such representation and warranty shall not constitute an Event of Default.
4.7 Special Covenants.
(a) The Pledgor warrants and will defend the right, title and
interest of the Agent and the Collateral Agent in and to all Pledged
Items and all other items of Collateral against the claims and demands
of all other Persons.
(b) The Pledgor shall not materially amend or modify, or waive
any of the material terms and conditions of, or settle or compromise any
material claim in respect of, any Collateral or any rights related to
any of the foregoing.
(c) The Pledgor shall not sell, assign, transfer or otherwise
dispose of, or grant any option with respect to, or pledge or otherwise
encumber (except pursuant to this Agreement or the Security Agreement),
any of the Collateral
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or any interest therein, except as provided in Section 4.8 with respect
to releases of Collateral.
(d) The Pledgor shall service all Pledged Mortgages which are
the subject of Approved Investor Commitments in accordance with the
standard requirements of the issuers of such Approved Investor
Commitments and all applicable FHA and VA requirements. The Pledgor
shall service all Mortgage Loans which are the subject of Pledged
Securities in accordance with the standard requirements of the Federal
Agency issuing or guaranteeing such Securities and all applicable FHA
and VA requirements. The Company shall service all Mortgage Loans which
are the subject of any Servicing Agreements in accordance with the
standard requirements of the other party to such Servicing Agreements
and all applicable FHA and VA requirements.
(e) The Company shall promptly notify the Agent and the
Collateral Agent of any material default under any Servicing Agreement,
and in its normal daily reporting to the Collateral Agent, the Company
will include information identifying to the best knowledge of the
Company defaults under any Pledged Mortgages.
(f) The Pledgor shall hold all escrow funds collected in respect
of Pledged Mortgages and Mortgage Loans which are the subject of Pledged
Securities in trust, in accordance with all Federal Agency requirements
and standards relating thereto, and apply the same for the purposes for
which such funds were collected.
(g) The Pledgor shall observe and perform all of its obligations
in connection with each Approved Investor Commitment related to any
Pledged Item. Within forty-eight (48) hours after a request therefor by
the Collateral Agent or Agent, a copy of each Approved Investor
Commitment certified by the Pledgor, or if requested by the Collateral
Agent or Agent at any time after an Event of Default has occurred, the
originals of such Approved Investor Commitments shall be delivered to
the Collateral Agent or Agent.
(h) The Company shall promptly notify the Agent and the
Collateral Agent if and when the Company receives any prepayment arising
from or relating to any Pledged Mortgage and hold the same in trust, as
security for the Secured Parties, until such Mortgage Loan is removed
from the Borrowing Base in accordance with this Agreement or, if an
Event of Default has occurred and is continuing under this Agreement,
then immediately remit to the Collateral Agent such prepayments (and all
interest and earnings thereon or with respect thereto).
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(i) The Pledgor shall not withdraw or seek to withdraw or
substitute or seek to substitute any Pledged Item except as provided
herein and in the Security Agreement.
(j) The Pledgor shall cooperate with the Agent, the Lenders and
the Collateral Agent and any of their respective representatives in any
review or inspection of the Pledged Mortgages, the property subject to
any Pledged Mortgage, and make available to such person any books and
records relating to such Collateral as well as the appropriate employees
of the Pledgor for the purpose of discussing the same, all at such time
during business hours as may be reasonably requested by the Agent, any
Lender or the Collateral Agent.
(k) The Pledgor shall not cease to have the approval of any
Federal Agency or any private mortgage insurer (unless, in the case of a
private mortgage insurer, such failure to maintain such approval shall
not cause any Eligible Collateral which is required for the Company to
be in compliance with Section 8.12 to cease to qualify as Eligible
Collateral) which it has on the date hereof or become ineligible as a
FHA-Approved Mortgagee, FHLMC-Approved Lender, FNMA-Approved Lender or
VA-Approved Lender.
(l) The Pledgor shall not waive or otherwise modify any material
term of, or fail to perform its material obligations under, any Required
Mortgage Document or Pledged Mortgage or release any security or
obligor, or, through any activity or inactivity, cause any Pledged
Mortgage which shall have been eligible for FHA insurance to become
ineligible for FHA insurance or for purchase in accordance with an
Approved Investor Commitment related to such Pledge Mortgage.
(m) The Pledgor shall do, execute, acknowledge and deliver, or
cause to be done, executed, acknowledged and delivered, all such other
acts, instruments and transfers (including, without limitation,
Assignments) as the Agent or the Collateral Agent may reasonably request
from time to time in order to create and maintain a perfected first
priority security interest in the Collateral in favor of the Secured
Parties and to create, maintain and preserve the security and benefits
intended to be afforded by this Agreement and the Security Agreement,
subject to no prior or equal security interest, lien, charge or
encumbrance, or agreement purporting to grant to any Person a security
interest in the Collateral (provided, however, that unless an Event of
Default is continuing or the Required Lenders have requested otherwise,
consents to assignments of options, futures contracts or other interest
rate protection products in favor of the Lenders from the counterparties
thereto shall not be required to be obtained).
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(n) With respect to Repurchased Agency Loans and Receivables,
upon the request of the Collateral Agent or Agent the Company shall have
executed and provided any and all documentation required by the
Collateral Agent or Agent (including, but not limited to, all Required
Mortgage Documents, the insurance or guaranty certificate applicable to
such Mortgage Loan, and evidence satisfactory to the Collateral Agent
and Agent of the amounts advanced by the Company in connection with such
Mortgage Loan) to perfect the Lenders' security interest in such
Repurchased Agency Loans and Receivables.
(o) Upon the request of the Required Lenders, the Company agrees
that the Company shall require the closing agents for AP Mortgages to
enter into escrow or other agreements regarding the monies used to fund
such AP Mortgages.
4.8 Release of Collateral.
In addition to the releases of Collateral provided for in Sections
7(a)-(e) of the Security Agreement, upon the request of the Company delivered
from time to time to the Agent and the Collateral Agent, the Agent shall
authorize the Collateral Agent to release Collateral specified in such notice
from the lien of the Security Agreement, if, but only if, (i) at the time of
such release no Event of Default exists and no notice of a Default has been
issued that has not been cured, and (ii) any payment under Section 2.14(a) which
may be required (based on information relating to the Borrowing Base supplied to
the Agent by the Collateral Agent) as a result of such release has been made (or
contemporaneously with such release shall be made) so that the release of such
Collateral will not create a violation of any Lending Sublimit or Borrowing Base
Sublimit. Notwithstanding the foregoing, following an Event of Default pledged
Cash Equivalents which are the subject of reverse repurchase obligations can be
released in connection with the terms of the applicable reverse repurchase
agreement, and Pledged Items can be released in connection with the sale of such
Pledged Items pursuant to an Approved Investor Commitment existing at the time
of occurrence of the Event of Default if, in either case, the proceeds of such
sale are deposited into the Settlement Account.
4.9 Settlement Account.
There has been established with the Agent, for the benefit of the
Secured Parties, a "cash collateral" account of the Company #19-19210
("Settlement Account") into which shall be deposited all cash proceeds from the
sale of any Pledged Item and any payments made by a Servicing Purchaser in
connection with Pledged Servicing Sale Receivables. Only the Agent shall have
access to the Settlement Account. Prior to the occurrence of a
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Default, to the extent that, as determined by the Agent, the amounts in the
Settlement Account are not needed to keep the Borrowing Base equal to or greater
than the Credit Requirement, the Company may request that the Agent release
funds from the Settlement Account, which funds shall be applied by the Agent as
directed by the Company. Upon the occurrence of an Event of Default (and during
the continuance thereof) all amounts then on deposit in the Settlement Account,
and any deposits made in the Settlement Account during the continuance of such
Event of Default, shall be withdrawn by the Agent from the Settlement Account
and shall be applied to the Credit Indebtedness in accordance with the
provisions of Paragraph 18 of the Security Agreement and Section 10.4 of this
Agreement.
4.10 Termination.
If all Commitments shall have expired or been terminated pursuant
to the express terms hereof and no Credit Indebtedness shall be outstanding, the
Agent shall promptly deliver or cause to be delivered all cash in the Settlement
Account and all other Collateral to the Company. The receipt by the Company of
any cash in the Settlement Account and of all Pledged Items returned or
delivered to the Company pursuant to any provision of this Agreement shall be a
complete and full acquittance for the Pledged Items so delivered, and the Agent,
Collateral Agent and the Lenders shall thereafter be discharged from any
liability or responsibility therefor.
4.11 Transition from Existing Facility.
The Pledge Date and all other relevant delivery dates and time
periods with respect to the determination of Eligible Collateral shall be
calculated to include any delivery dates or holding periods prior to the date
hereof during which Collateral was being held by the Collateral Agent (or was
the subject of an AP Notice), had been delivered to an Approved Investor or had
been redelivered to the Company under the Existing Facility.
ARTICLE V
CONDITIONS PRECEDENT
Each Advance may be made only if the following conditions
precedent are met:
5.1 Initial Advance (Company).
Prior to the initial Advance hereunder, the Company shall have
delivered, or caused to be delivered, to the Agent:
(a) Copies of this Agreement duly executed by the Company for each
Lender and the Agent.
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(b) A Security Agreement duly executed by the Company in the
form attached hereto as Exhibit D.
(c) Notes payable to the order of each Lender duly executed by
the Company in the form attached hereto as Exhibits E-1 and E-2,
respectively plus, in the case of a Bid Lender, in the form approved by
such Lender.
(d) Certificates of the Secretaries of the Company dated such
date, (i) accompanied by and certifying true and correct copies of the
Articles of Incorporation and By-laws of the Company and resolutions of
its Board of Directors authorizing the Company to execute, deliver and
perform this Agreement, the Security Agreement and all other documents
executed by the Company in connection herewith and (ii) confirming the
incumbency and signatures of those officers of the Company authorized to
execute this Agreement, the Security Agreement and the Notes and
otherwise act on behalf of the Company hereunder or under the Security
Agreement.
(e) The opinion of counsel to the Company in substantially the
same form and substance as the opinion letter attached hereto as Exhibit
K attached hereto and covering such other matters as the Agent may
reasonable request, together with appropriate good standing certificates
for the Company.
(f) Executed UCC-1 and UCC-3 Financing Statements as the Agent
may reasonably request.
(g) A letter from the Company to each lender under the Existing
Facility which is not a Lender hereunder providing for the terms of
payment of the loans outstanding under the Existing Facility payable to
such lenders.
(h) An agreement in substantially the form of Exhibit M hereto
between the Company and the Agent on behalf of the lenders under the
Existing Facility that remain as Lenders under this Agreement, and the
Lenders under the Existing Facility who are not Lenders under this
Agreement as to the repayment or conversion of loans outstanding to the
Company under the Existing Facility, the treatment of any interest and
fees accrued thereon, and the cancellation of all commitments under the
Existing Facility.
(i) Evidence that the Company has paid all fees required to be
paid hereunder and under the Security Agreement on or before the date of
the first Advance.
(j) Information satisfactory to the Agent regarding the
Company's Year 2000 Program.
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(k) Such other documents as the Agent may reasonably request.
5.2 Initial Advance (Lenders).
On or before the date of the initial Advance hereunder, the Lenders
shall have delivered, or caused to be delivered, to the Agent and the Agent
shall in turn, have delivered, or caused to be delivered, to the Company one or
more counterparts of this Agreement executed by the Lenders.
5.3 All Advances.
On the date of each Advance, the Company shall be in compliance
with all the terms and provisions set forth herein and in the Security Agreement
on its part to be observed or performed; the representations and warranties of
the Company set forth in Articles IV and VI shall be true and correct in all
material respects on such date as if made on and as of such date (provided,
however that the representation and warranty contained in Section 6.6(c) shall
not apply to (i) conversions or continuations of Advances pursuant to Section
2.12, or (ii) Advances requested by the Company solely for the purpose of
repaying maturing commercial paper); and no Default shall have occurred and be
continuing on such date. On each Advance Date the Company shall be deemed to
have represented and warranted to the Lenders that no violation of the
requirements set forth in the preceding sentence exists on such date after
giving effect to the requested Advance. Prior to making an Advance (including
any Bid Loan) available to the Company under Section 2.11 on any day, the Agent
shall have (i) received notice from the Collateral Agent of the amount of the
Borrowing Base for such day, (ii) received notice from the issuing and paying
agent for the Outstanding CPNs as described in Section 7.7(o) confirming the
aggregate face amount of Outstanding CPNs for such day, and (iii) confirmed,
based solely upon the information contained in such notices, the amount of
Advances then-outstanding, and the Company's certifications contained in the
preceding sentence as to all other facts, that the Borrowing Base will be
greater than or equal to the Credit Requirement on such date after giving effect
to such Advance.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Lenders that:
6.1 Organization, Corporate Powers, Etc.
The Company is a corporation duly incorporated, validly existing,
in good standing and authorized to exercise its
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corporate powers, rights and privileges under the laws of the jurisdiction in
which it is incorporated, is qualified to do business and is in good standing in
all jurisdictions where failure to be so qualified and in good standing would
have a material adverse effect upon its business, operations or financial
condition, and has all requisite corporate power and authority, to conduct its
business, to own its properties and to execute and deliver, and to perform all
of its obligations under, this Agreement, the Security Agreement and the Notes.
6.2 Corporate Authority, Etc.
The execution, delivery and performance by the Company of this
Agreement, the Security Agreement and the Notes have been duly authorized by all
necessary corporate action and do not and will not (i) violate any existing
provision of any law, rule, regulation (including, without limitation,
Regulation U or X of the Board of Governors of the Federal Reserve System or the
rules and regulations of the SEC or any regulatory commission of any
jurisdiction), order, writ, judgment, injunction, decree, determination or award
currently in effect having applicability to the Company or any of its Affiliates
or of the charter or by-laws of the Company or of any of its Affiliates, (ii)
result in a breach of or constitute a default under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which the
Company or any of its Affiliates is a party or by which the Company or any of
its Affiliates or any of their respective properties may be bound or affected,
or (iii) result in, or require, the creation or imposition of any mortgage, deed
of trust, assignment, pledge, lien, security interest or other charge or
encumbrance of any nature upon or with respect to any of the respective
properties of the Company or any of its Affiliates (other than that arising
hereunder or under the Security Agreement with respect to the Collateral); and
neither the Company nor any of its Affiliates is in material default under any
such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture, agreement, lease or instrument.
6.3 Compliance with Laws.
The Company and each of its Affiliates are in compliance with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority, non-compliance with which would, singly or in the
aggregate, materially and adversely affect their respective business or credits
including but not limited to financial condition and operations.
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6.4 Government Approvals.
No authorization, consent, approval, license, exemption of or
filing or registration with any existing court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, is or
will be necessary for the valid execution, delivery and performance by the
Company of, or the validity or enforceability of, this Agreement, the Security
Agreement and the Notes.
6.5 Valid and Binding Obligations.
This Agreement, the Security Agreement and the Notes constitute
legal, valid and binding obligations of the Company enforceable against the
Company in accordance with their respective terms, subject to bankruptcy and
similar laws and other general restrictions on creditor's rights and equitable
principles (whether applied in an action at law or a suit in equity).
6.6 Financial Statements.
(a) The balance sheet of the Company and its Subsidiaries as of
December 31, 1997 (which is presented in the Company's annual report)
and the related statements of income and changes in financial position
for the fiscal year then ended, copies of which have been heretofore
furnished to each of the Lenders, fairly present, in conformity with
GAAP, the financial condition of the Company and its Subsidiaries as of
such date and the results of the operations and changes in financial
position of the Company and its Subsidiaries for such fiscal year.
(b) The quarterly financial statements of the Company and its
Subsidiaries submitted to the SEC or the Agent since the date of the
December 31, 1997 annual financial statements referred to in clause (a)
above fairly present, in conformity with GAAP, the financial condition
of the Company and its Subsidiaries as of the applicable dates of such
statements and the results of the operations and changes in financial
position of the Company and its Subsidiaries for the periods to which
such statements relate.
(c) Since the date of the December 31, 1997 statements there has
been no material adverse change, taken as a whole, in the business,
financial position, or operations of either the Company or any
Subsidiary.
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6.7 Litigation.
Except as disclosed on Exhibit L attached hereto and as otherwise
set forth in the Company's annual report referred to in Section 6.6(a), there
are no actions, suits or proceedings pending or, to the knowledge of the Company
after reasonable investigation, threatened against or affecting the Company or
any of its Affiliates or any of their respective properties before any court,
arbitrator or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (including, without limitation, the SEC or
any regulatory commission of any jurisdiction), which, if determined adversely
to the Company or any Affiliate, as the case may be, would be reasonably likely
to, singly or in the aggregate, have a material adverse effect on the financial
condition, or on the respective properties or operations, of the Company and its
Affiliates or the transactions contemplated by this Agreement, the Security
Agreement and the Notes.
6.8 Use of Proceeds.
The Company will use the proceeds of the Loans solely for (i) the
purposes described in the recitals hereto, (ii) the funding or purchasing of
Mortgage Loans, (iii) the payment of principal, interest, fees, expenses, and
other obligations described in or contemplated by this Agreement, (iv) payment
of Debt of the Company existing on the date hereof, and (v) such other purposes
as may be permitted under this Agreement. No part of the proceeds of any Loan
will be used to purchase or carry, or to reduce or retire, any indebtedness
incurred to purchase or carry, any margin stock (within the meaning of
Regulations U and X of the Board of Governors of the Federal Reserve System) or
to extend credit to others for the purpose of purchasing or carrying any margin
stock and the Company is not engaged in purchasing or carrying margin stock.
6.9 Accuracy of Information.
All written information supplied by the Company to the Lenders
relating to the Company and its Affiliates was true, complete and accurate in
all material respects when made, and there has been no material adverse change
in the financial condition of the Company and its Affiliates from the time such
information was provided to the Lenders.
6.10 Accuracy of Representations and Warranties.
The representations and warranties of the Company contained in each
other document delivered in connection with this Agreement are, or when such
document is delivered will be, true and correct in all material respects when
made.
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6.11 Investment Company.
The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or an "investment adviser" within the meaning
of the Investment Advisers' Act of 1940, as amended.
6.12 ERISA.
Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and any other applicable Federal or
state law; and to the best of its knowledge no event or condition is occurring
or exists with respect to any Plan concerning which the Company would be under
an obligation to furnish a report to the Lenders in accordance with Section
7.7(h).
6.13 Tax Returns.
The Company and each of its Affiliates has filed or caused to be
filed all material federal, state and local tax returns which, to its knowledge,
are required to be filed and has paid or caused to be paid all material taxes as
shown on such returns or on any assessment received by it, to the extent that
such taxes have become due, except taxes the validity of which is being
contested in good faith by appropriate proceedings and for which adequate
reserves shall have been set aside on its books in conformity with GAAP.
6.14 Full Disclosure.
No event has occurred and no circumstance exists as a result of
which any information, statement, or representation concerning the Company that
has been provided to any Lender by the Company in connection herewith would
include an untrue statement of a material fact or omit to state any material
fact or any fact necessary to make the information, statements or
representations contained therein, in the light of the circumstances under which
they were made, not misleading.
6.15 GNMA, FHA, VA, FNMA, AND FHLMC Eligibility.
The Company is: (i) an FHA-Approved Mortgagee in good standing, a
VA-Approved Lender, a FHLMC-Approved Lender and a FNMA-Approved Lender and meets
all eligible requirements of law and governmental regulation so as to be
eligible to originate, purchase, hold and service Mortgage Loans insured by FHA
and to issue any Security; (ii) an approved seller and servicer in good standing
of Mortgage Loans to each Federal Agency; and (iii) an approved issuer and
servicer in good standing of FHLMC, FNMA and GNMA Securities and meets all
FHLMC, FNMA and GNMA requirements,
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requirements of law and governmental regulations so as to be able to issue
FHLMC, FNMA and GNMA Securities and to service the Mortgage Loans that secure
such Securities.
6.16 No Defaults.
No Default has occurred and is continuing.
6.17 Year 2000 Compliance.
The Company has made a full and complete assessment of the Year
2000 Issues and has a realistic and achievable program for remediating the Year
2000 Issues on a timely basis (the "Year 2000 Program"). Based on such
assessment and on the Year 2000 Program the Company does not reasonably
anticipate that Year 2000 Issues will have a material adverse effect on the
Company's operations or financial condition.
ARTICLE VII
AFFIRMATIVE COVENANTS
The Company covenants and agrees with the Lenders that, so long
as this Agreement shall remain in effect and so long as any amounts are
outstanding under the Notes or this Agreement, unless the Required Lenders shall
otherwise consent in writing, the Company will:
7.1 Payment of Debts, Taxes, Etc.; Maintenance of Insurance.
(a) Pay all debts and perform all obligations, and cause each of
its Subsidiaries to pay all debts and perform all obligations, promptly
and in accordance with the terms thereof and pay and discharge, and
cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon
its income or profits, or upon any properties belonging to it, prior to
the date on which penalties attach thereto, and all lawful claims,
which, if unpaid, might become a lien or charge upon any properties of
the Company or of such other Subsidiary, provided that none of the
Company or any other Subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith
and by appropriate proceedings and such contest shall operate to stay
any material adverse effect of such lien or charge;
(b) Use its best efforts to adhere to customary practices and
standards in the industry insofar as adherence to such practices and
standards would require the Company to cause obligors whose indebtedness
is secured by Pledged Mortgages to comply with the provisions of such
Pledged Mortgages with respect to the payment of real estate taxes
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and insurance premiums in connection with the real estate
securing such indebtedness; and
(c) Maintain, and cause each of its Subsidiaries to maintain,
insurance on its properties and other insurance in amounts and types and
with provisions and insurers as shall be satisfactory to the Required
Lenders, and at all times furnish to any Lender (upon written request by
such Lender) copies of its, and each of its Subsidiaries', current
Mortgage Bankers Blanket Bond and of its, and each of its Subsidiaries',
insurance policy containing errors and omissions coverage or mortgage
impairment coverage, and providing, in the case of Mortgage Bankers
Blanket Bonds, to the extent possible, that they are not cancelable
without thirty days' prior written notice to the Agent.
7.2 Preservation of Corporate Existence.
Preserve and maintain, and cause each of its Subsidiaries which
is a material part of the Company's overall business operations to preserve and
maintain, its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified as a
foreign corporation in each jurisdiction in which such qualification is
necessary in view of its business operations or the ownership of its
properties.
7.3 Compliance with Laws, Etc.
Comply, and cause each of its Subsidiaries to comply, with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority, non-compliance with which would be reasonably likely to,
singly or in the aggregate, materially adversely affect its business or credit,
unless the same shall be contested by the Company or such other Subsidiary, as
the case may be, in good faith and by appropriate proceedings and such contest
shall operate to stay the material adverse effect of any such non-compliance.
7.4 Requested Information.
At any reasonable time and from time to time, on reasonable
prior notice furnish to the Agent, any requesting Lender or any agents or
representatives thereof, or permit such agents or representatives to examine and
make copies of, the records and books of account of, and visit the properties
of, the Company or any of its Subsidiaries and, so long as representatives of
the Company (as chosen by senior management of the Company) accompany the Agent
or any such other Lender, the Company's Affiliates, and to discuss the affairs,
finances and accounts of the Company, its Subsidiaries and such Affiliates with
any of its officers.
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7.5 Keeping of Records and Books of Account.
Keep or cause to be kept adequate records and books of account
in which complete entries will be made in accordance with generally accepted
accounting principles, consistently applied (except for changes concurred in by
the Company's independent auditors) reflecting all financial transactions of the
Company and its Subsidiaries.
7.6 Maintenance of Approvals, Filings and Registrations.
At all times maintain in effect, renew and comply with, and cause
each of its Subsidiaries to effect, renew and comply with all the terms and
conditions of all consents, licenses, approvals and authorizations as may be
necessary under any applicable law or regulation for the execution, delivery and
performance of this Agreement, the Security Agreement and the Notes and to make
this Agreement and such other documents legal, valid, binding and enforceable.
7.7 Reporting Requirements.
Furnish to the Agent for distribution to each Lender:
(a) As soon as possible after becoming aware (i) of the
occurrence of any Default, or (ii) that any of the representations and
warranties contained in Article IV or Article VI has ceased to be true
and correct at any time since the last Advance hereunder (or, if no
Advance has taken place, the execution and delivery of this Agreement),
telephone advice confirmed in writing within three (3) Business Days by
a statement of the president or other Authorized Officer of the Company
setting forth the details thereof and the action which the Company
proposes to take with respect thereto.
(b) As soon as available and in any event within ninety (90)
days after the end of each fiscal year of the Company, a consolidating
and consolidated balance sheet of the Company and its Subsidiaries as of
the end of such fiscal year and the related statements of income and
changes in financial position of the Company and its Subsidiaries
including cash flow statements for such fiscal year on a consolidating
and consolidated basis, setting forth in each case in comparative form
the figures as of the end of and for the previous fiscal year, all
reported in accordance with GAAP and audited and unqualified by KPMG
Peat Marwick or other independent public accountants of nationally
recognized standing.
(c) As soon as available and in any event within forty-five (45)
days after the end of each fiscal quarter of the Company, a
consolidating and consolidated balance sheet
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of the Company and its Subsidiaries as of the end of such quarter and
the related statements of income for such quarter and for the portion of
the Company's fiscal year ended at the end of such quarter, all
certified (subject to normal quarter-end adjustments) as to fairness of
presentation, generally accepted accounting principles and consistency
by the chief financial officer of the Company.
(d) Simultaneously with the delivery of each set of financial
statements referred to in clauses (b) and (c) above, a certificate of
the chief financial officer of the Company (A) setting forth in
reasonable detail the calculations required to establish whether the
Company was in compliance with the requirements of Sections 7.9, 8.5,
8.6, 8.9, 8.10, 8.16, and 8.17 and (B) stating whether there exists on
the date of such certificate any Default and, if any Default then
exists, setting forth the details thereof and the action which the
Company is taking or proposes to take with respect thereto.
(e) Promptly after the commencement thereof, notice of (i) any
action or proceeding which has more than a remote possibility of a
determination adverse to the Company or its Subsidiaries (a
"Non-Frivolous Action") instituted by or against the Company or any of
its Subsidiaries in any Federal or state court or before any commission
or other regulatory body (Federal, state or local, domestic or foreign),
or any such Non-Frivolous Action threatened against the Company or any
of its Subsidiaries in writing, which, if adversely determined, would
have a material adverse effect upon the business, assets or financial
condition of the Company or any mortgage banking affiliate of the
Company, and (ii) any other action, event or condition of any nature
which may lead to or result in a material adverse effect upon the
business, assets or financial condition of the Company or which, with or
without notice or lapse of time or both, would constitute a default
under any other material contract, instrument or agreement to which the
Company is a party or by which the Company or its properties or assets
may be bound or subject.
(f) As soon as possible after becoming aware of any change in
the Company's long-term unsecured debt ratings as rated by S&P or
▇▇▇▇▇'▇, a copy of the S&P or ▇▇▇▇▇'▇ publication of such ratings or
other written confirmation of such ratings.
(g) Such other information, financial or otherwise, respecting
the Collateral and the Company's financial statements and condition as
the Agent or any Lender may from time to time reasonably request.
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(h) As soon as possible, and in any event within thirty (30)
days after the Company knows or has reason to know that any of the
events or conditions enumerated below with respect to any Plan have
occurred or exist, a statement signed by an Authorized Officer of the
Company setting forth details respecting such event or condition and the
action, if any, which the Company or, to the best knowledge of the
Company, any ERISA Affiliate proposes to take with respect thereto;
provided, however, that if such event or condition is required to be
reported or notice thereof given to PBGC, such statement, together with
a copy of the relevant report or notice to PBGC, shall be furnished to
the Agent within ten (10) days after it is reported or notice thereof
given to PBGC:
(i) the occurrence of any Reportable Event;
(ii) the filing under Section 4041 of ERISA of a
notice of intent to terminate any Plan or the termination of any
Plan;
(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan; or
(iv) the complete or partial withdrawal by the Company,
any Subsidiary or any ERISA Affiliate from a Plan, or the
receipt by the Company, any Subsidiary or any ERISA Affiliate
of notice from a Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or that it
intends to terminate or has terminated under Section 4041A of
ERISA, if such withdrawal, reorganization, insolvency or
termination has resulted or may reasonably be expected to
result in any liability of the Company, any Subsidiary or any
ERISA Affiliate to the PBGC in connection with such Plan or to
such Plan.
(i) Promptly after the request of the Agent, copies of each
annual report filed pursuant to Section 104 of ERISA with respect to
each Plan (including, to the extent required by Section 104 of ERISA,
the related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information
referred to in Section 103 of ERISA) and each annual report filed with
respect to each Plan under Section 4065 of ERISA.
(j) As soon as available but in any event within thirty (30)
days after the end of each calendar quarter, a servicing report and
analysis which shall show the status of all mortgages serviced by the
Company including those which are delinquent, all in such form and
detail and including such
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additional information as the Agent may reasonably request. Such
servicing report shall show separately information concerning any
mortgages or securities with respect to which there is recourse to the
Company.
(k) As soon as available but in any event within thirty (30)
days after the end of each calendar quarter, a production information
report and a secondary marketing report for such quarter satisfactory to
the Agent.
(l) Promptly upon receipt, a copy of any notice from any Federal
Agency or any private mortgage insurer to the effect that it is or is
contemplating withdrawing its approval of the Company as a FHA-Approved
Mortgagee, FHLMC-Approved Lender, FNMA-Approved Lender or VA-Approved
Lender or as an approved seller and servicer for FNMA, FHLMC and GNMA.
(m) Promptly after the Company's or any Subsidiary's acquisition
or creation of a new Subsidiary, written notice of such event, which
notice shall set forth the details of such event, the percentage of
capital stock owned by the Company or any other Subsidiary, and the
jurisdiction of incorporation of such new Subsidiary.
(n) Promptly after the sending or filing thereof, copies of all
such proxy statements, financial statements and reports which the
Company sends to its stockholders, and copies of all regular, periodic
and special reports (other than Form 8-K reports containing only the
distribution reports relating to the Fireman's Fund Mortgage Corporation
Agency MBS Multi-Class Pass-Through Certificates, which the Company need
send to the Agent only and which the Agent shall make available to the
other Lenders upon request) and all final prospectuses which the Company
files with the SEC (if applicable), or any governmental authority which
may be substituted therefor, any Federal Agency, or any other
governmental agency.
(o) On each Business Day, a statement from the issuing and
paying agent for the Outstanding CPNs setting forth the aggregate face
amount of the Outstanding CPNs being issued on such Business Day, being
repaid on such Business Day and remaining outstanding at the end of such
Business Day, all in a form satisfactory to the Agent, which statement
need be transmitted to the Agent only.
(p) As soon as available and in any event within forty-five (45)
days after the end of each fiscal quarter of the Company, a list showing
(i) each individual Guaranty of the Company then in effect for which the
maximum potential liability is in excess of $1,000,000 (and the amounts
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thereof) and (ii) the aggregate amount of all other Guarantees of the
Company then in effect, certified as true and correct by an Authorized
Officer of the Company. Individual Guaranties shall be reported under
clause (i) if the potential liability could exceed $1,000,000 even
though the then current outstanding Indebtedness which is guaranteed is
less than $1,000,000. Such report shall include the maximum amount
guaranteed and the then current outstandings (showing "none" if there
are no current outstandings). If there are no Guaranties to be reported,
a report shall still be furnished indicating no such Guaranties exist.
(q) Such other information respecting the business, properties
or the condition or operation of the Company or its Subsidiaries,
financial or otherwise, as the Agent or any Lender may from time to time
reasonably request.
(r) Notice of the occurrence of any of the following events,
immediately upon the Company's acquisition of knowledge thereof: (i) the
occurrence of an "Event of Default" (as defined in Article Five of the
Subordinated Debt Indenture), (ii) the deferral by the Company of any
quarterly installment of interest on the Subordinated Debt, (iii) the
acceleration of the entire principal amount of any series of securities
issued under the Subordinated Debt Indenture, (iv) the execution of any
amendment or supplement to the Subordinated Debt Indenture, (v) the
resignation or removal of the trustee under the Subordinated Debt
Indenture, or any change in the notice address of such trustee, or (vi)
any developments with respect to Year 2000 Issues that are reasonably
anticipated to have a material adverse effect on the Company's
operations or financial condition.
7.8 Indemnification.
Pay, and protect, indemnify and save harmless, the Agent, the
Collateral Agent, each of the Lenders and the Affiliates of each of the
foregoing and, in their capacity as such, their respective officers, directors,
shareholders, controlling persons, employees, agents and servants from and
against all liabilities, losses, claims, damages, penalties, causes of action,
suits, costs and expenses (including, without limitation, attorneys' fees and
expenses) or judgments of any nature arising from the default of the Company in
the performance of its agreements, rights or obligations contained in this
Agreement, the Security Agreement, the Notes or any other instrument or
agreement entered into by the Company in connection herewith or therewith or
arising out of this Agreement or the transactions contemplated herein; provided,
that the Company shall not have any obligation hereunder to the Agent, the
Collateral Agent or any Lender or any other Person indemnified pursuant to this
Section 7.8 with respect to indemnified
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liabilities arising from (1) the gross negligence or willful misconduct of such
Person indemnified pursuant to this Section 7.8, or (2) legal proceedings
commenced against the Agent, the Collateral Agent or any Lender by any other
Lender or any Participant. If any action, suit or proceeding arising from any of
the foregoing is brought against the Agent, the Collateral Agent or any Lender
or any other person indemnified pursuant to this Section 7.8, the Company will,
if within a reasonable time requested in writing to do so and at its expense,
resist and defend such action, suit or proceeding or cause the same to be
resisted and defended by counsel designated by the Company (which counsel shall
be satisfactory to the party being indemnified). Notwithstanding anything to the
contrary in this Agreement, the obligations of the Company under this Section
7.8 shall survive any termination of this Agreement.
7.9 Maintenance of Net Worth.
At all times, maintain the sum of (x) Adjusted Consolidated
Tangible Net Worth plus (y) Subordinated Debt in an amount at least equal to the
sum of:
(i) $367,400,000, plus
(ii) fifty percent (50%) of the sum of (A) the positive
cumulative quarterly increases, if any, in Adjusted Consolidated
Tangible Net Worth of the Company after March 31, 1998 (computed without
regard to any increase or decrease resulting from (1) the contribution
or distribution of Restricted FSA Securities, (2) cash equity
contributions to the Company, (3) the receipt of proceeds of issuances
of stock of the Company, (4) the exchange of Subordinated Debt for
Series A Preferred Stock, (5) the payment of Restricted Payments) for
each calendar quarter beginning with the calendar quarter beginning
April 1, 1998 plus (B) the cumulative after-tax cost to the Company of
all interest payments on the Subordinated Debt made by the Company after
March 31, 1998, less
(iii) the amount of Special Dividends paid.
7.10 Federal Agency Approvals.
Maintain its status as a FHA-Approved Mortgagee, remain eligible
to obtain VA guaranties of Mortgage Loans and remain approved by each Federal
Agency as a seller/servicer.
7.11 Approved Investor Commitments.
Maintain all of its Mortgage Loans included in Collateral and all
other Mortgage Loans owned by the Company which satisfy the delivery
requirements of any then-current
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Approved Investor Commitments to purchase Mortgage Loans or to exchange
Securities for Mortgage Loans held by the Company (other than any Mortgage Loans
held by the Company solely for investment) in compliance with such Approved
Investor Commitments and perform all of its obligations in connection with such
commitments.
7.12 Borrowing Base Certificate.
Within the first ten (10) days of each month, and within three
Business Days after any request therefor by the Agent, deliver to the Agent a
Borrowing Base Certificate (which shall include the Company's reconciliation of
any discrepancies from the Collateral Agent's reports on the status of Eligible
Collateral at the end of the preceding month), together with a certificate of
the chief financial officer or other Authorized Officer of the Company
confirming compliance with Sections 7.9, 8.5, 8.9, and 8.12. Each regular
monthly Borrowing Base Certificate shall contain information as of the close of
business on the final Business Day of the preceding month. Any Borrowing Base
Certificate delivered pursuant to the request of the Agent shall contain
information as of the close of business on the day on which the Agent requested
such Borrowing Base Certificate. Notwithstanding the two preceding sentences,
information contained in such Borrowing Base Certificates relating to Eligible
Repurchased Agency Loans and Receivables may be as of the latest dates on which
the Company calculated the value of Eligible Repurchased Agency Loans and
Receivables; provided that such calculations shall be made at least once per
week.
7.13 Further Assurance.
As from time to time requested by the Agent and agreed upon by the
Required Lenders, at the cost and expense of the Company, execute and deliver to
the Agent all such documents and instruments and do all such other acts and
things as may be reasonably required to enable the Lenders to exercise and
enforce their rights under this Agreement and to realize thereon, and as may be
necessary to validate, preserve and protect the position of the Lenders under
this Agreement. With respect to those elements of Collateral as to which the
Lenders' security interest may not be perfected by delivery to the Collateral
Agent with the Security Agreement or the filing of a UCC-1 financing statement,
including but not limited to the Approved Investor Commitments and any options,
futures contracts or other interest rate protection products, the Company as
requested by the Agent at the direction of the Required Lenders, shall execute
and deliver possession of such elements of the Collateral to the Agent, have the
interest of the Lenders therein recorded on the books of any institution holding
such assets for the Company, obtain consents to assignment in favor of the
Lenders from the counterparties thereto or take such other actions as may be
necessary to perfect
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the security interest of the Lenders therein (provided, however, that unless an
Event of Default is continuing or the Required Lenders have requested otherwise,
consents to assignments of options, futures contracts or other interest rate
protection products in favor of the Lenders from the counterparties thereto
shall not be required).
7.14 Maintenance of Properties.
Do all things necessary to maintain, preserve, protect and keep its
properties in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times.
7.15 Payment of Taxes.
On demand pay, or reimburse the Agent and Lenders for, all
stamp, documentation, intangible, or similar taxes, and all penalties or
interest that may be due with respect thereto, that may be imposed or asserted
by the State of Florida or any other jurisdiction in connection with the
execution and delivery of the Credit Documents or the making of the Loans
contemplated by this Agreement.
7.16 Year 2000 Compliance.
Take and will cause each of its Subsidiaries to take all such
actions as are reasonably necessary to successfully implement the Year 2000
Program and to assure that Year 2000 Issues will not have a material adverse
effect on the Company's operations or financial condition. At the request of the
Agent, the Company will provide a description of the Year 2000 Program, together
with any updates or progress reports with respect thereto.
ARTICLE VIII
NEGATIVE COVENANTS
The Company covenants and agrees with the Lenders that so long
as this Agreement shall remain in effect or any amounts are outstanding under
the Notes or this Agreement, unless the Required Lenders (or all Lenders, if
expressly required) shall otherwise consent in writing, the Company (on a
consolidated basis with its Subsidiaries) shall not, directly or indirectly:
8.1 Use of Proceeds.
Use the amounts obtained under this Agreement for any purposes
other than (i) the purposes described in the recitals hereto, (ii) the funding
or purchasing of Mortgage Loans,
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(iii) the payment of principal, interest, fees, expenses and other obligations
described in or contemplated by this Agreement, (iv) payment of Debt of the
Company existing on the date hereof, and (v) such other purposes permitted under
this Agreement. The Company is not engaged, nor will it engage, principally or
materially in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" (within the meanings of each of the quoted
terms under Regulation U). If requested by a Lender, the Company shall each
furnish to the Agent for the benefit of the Lenders a statement in conformity
with the requirements of Federal Reserve Form U-1 referred to in Regulation U.
No part of the proceeds of any Loan will be used for any purpose which violates,
or which would be inconsistent with, the provisions of the Regulations of the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect.
8.2 Compliance with Security Agreement.
Enter into any collateral custodial agreement similar to the
Security Agreement for Mortgage Loans not included in Collateral with any entity
other than the Collateral Agent or fail to duly perform any of its obligations
under the Security Agreement; provided, however, that this Section shall not
prohibit the Company from entering into other custodial agreements relating to
the possession of Mortgage Loans not included in Collateral so long as such
agreements are not made for the purpose of or in connection with the granting of
a security interest in such Mortgage Loans. Security interests in Mortgage Loans
given for confirmatory purposes in connection with the sale of such Mortgage
Loans by the Company to investors shall not be considered agreements "made for
the purpose of or in connection with the granting of a security interest in such
Mortgage Loans" within the meaning of the preceding sentence.
8.3 Mergers; Subsidiaries.
Merge or consolidate with any Person, or sell or otherwise dispose
of (whether in one transaction or in a series of transactions) the shares of any
of its Subsidiaries to any Person, provided that the Company may, after prior
written notice to the Agent and Lenders, (i) undertake such a merger or
consolidation so long as the Company shall be the surviving or resulting company
and (ii) take such action with respect to any Subsidiary which is not a material
part of the Company's overall business operations.
8.4 Sales.
Sell, assign, lease or otherwise dispose of (collectively,
"Transfer"), whether in one transaction or a series of transactions, all or
substantially all of its assets
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(whether now owned or hereafter acquired) to any Person, or allow any Subsidiary
to Transfer substantially all of its assets to any Person (other than another
Subsidiary or a Parent), provided that the Company may after prior written
notice to the Agent and Lenders allow such action with respect to any Subsidiary
which is not a material part of the Company's overall business operations.
Transfers described in this Section 8.4 and the mergers, consolidations and
dispositions described in Section 8.3 (whether or not permitted by the
provisions of such Sections) are referred to herein as "Fundamental Changes."
8.5 Debt.
Allow the total Debt (excluding Subordinated Debt) of the
Company and its Subsidiaries (on a consolidated basis) to exceed the sum of the
following (the "Debt Threshold"):
(a) one hundred percent (100%) of the value of the
Company's cash and "short-term investments";
(b) ninety-eight percent (98%) of the value of the
Company's "mortgage loans receivable";
(c) ninety percent (90%) of the value of the Company's "pool
loan purchases" and "mortgage claims receivable", to the extent such
assets represent VA Mortgage Loans and FHA Mortgage Loans repurchased by
the Company from GNMA Security holders including the amount of past-due
interest advanced by the Company on account of such Mortgage Loans which
is guaranteed by VA or insured by FHA, provided however, the Required
Lenders can elect upon 90 days prior notice to the Company not to
include such interest amount in the calculation of this component of the
Debt Threshold;
(d) seventy-five percent (75%) of the amount of Servicing Sale
Receivables which would qualify as Eligible Pledged Servicing Sale
Receivables if such Servicing Sale Receivables were pledged as
Collateral;
(e) sixty percent (60%) of the amount of the Company's servicing
rights and hedging rights related thereto, as determined in accordance
with GAAP on a monthly basis (or more frequently if requested by the
Agent); and
(f) fifty percent (50%) of the value of Approved Equity
Securities, as shown on the most recent quarterly financial statements
(or as reported on a more frequent basis if required by Agent) provided
that the maximum amount that can be included in this component of the
Debt Threshold shall be $200,000,000, as such amount may be reduced in
accordance with Section 8.16.
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Terms set forth in quotes in this Section shall have the meanings given such
terms in the Company's consolidated financial statements.
8.6 Ratably Secured Debt.
Incur any Debt which may be entitled to a security interest in any
of the Collateral which would be equal or superior to the security interest of
Collateral Agent as agent for the Secured Parties.
8.7 Guarantees.
Create, incur, assume or suffer to exist any Guarantee of the
Company except Guarantees in an aggregate combined amount for the Company not to
exceed $25,000,000 at any one time outstanding.
8.8 Investments.
Make or own any Investment in any Person, except:
(a) Investments in the ordinary course of its mortgage banking
business in connection with mortgage loans, collateralized mortgage
obligations and other mortgage-related securities;
(b) Investments in the ordinary course of its mortgage banking
business in connection with puts, calls, swaps and other interest rate
hedging products, options and futures contracts to provide protection
from interest rate fluctuation;
(c) Investments in the ordinary course of its mortgage banking
business in connection with real estate acquired by foreclosure;
(d) Investments in the ordinary course of the Company's mortgage
banking business in connection with servicing rights;
(e) Investments in the ordinary course of its mortgage banking
business in connection with commitments from investors to purchase
Mortgage Loans or mortgage-related securities;
(f) the acquisition of Mortgage Loans, Securities and mortgage
servicing contracts of another Person engaged in mortgage-related
businesses;
(g) Investments in Cash Equivalents;
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(h) those Investments in existence on the date hereof
and disclosed in the financial statements referred to in
Section 6.6;
(i) loans to officers of the Company in an aggregate
principal amount at any time outstanding not to exceed
$5,000,000;
(j) loans and advances to employees of the Company, or its
Subsidiaries for (i) travel and entertainment in the ordinary course of
business in an aggregate amount for the Company and its Subsidiaries not
to exceed $100,000 at any one time outstanding and (ii) relocation
expenses in the ordinary course of business in an aggregate amount for
the Company and its Subsidiaries not to exceed $1,000,000 at any one
time outstanding;
(k) Investments of up to 10% of the Company's net worth (as
determined in accordance with GAAP) by the Company in its Subsidiaries
and investments by such Subsidiaries in the Company and in other
Subsidiaries;
(l) Investments made by any Subsidiary in the ordinary
course of its business;
(m) Investments in equity securities which (1) are traded on the
New York Stock Exchange, the American Stock Exchange or NASDAQ, (2) are
subject to no transfer restrictions, and (3) have a readily determinable
market value, in an aggregate market value amount not to exceed
$25,000,000 (which market value shall be determined by the Company and
reported to the Agent on a monthly basis, or more frequently at the
request of the Agent);
(n) repurchase and reverse repurchase contracts incidental to
the mortgage-related businesses of the Company and its Subsidiaries in
an aggregate dollar amount not to exceed $250,000,000 and $25,000,000
respectively;
(o) capital stock in FSA and Restricted FSA Securities;
and
(p) other Investments which are the result of a merger or
consolidation permitted under Section 8.3 if, after giving effect to any
such Investment, the consolidated net revenues (determined in accordance
with GAAP) of all business segments that constitute mortgage-related
businesses of the Resulting Entity for the Fundamental Change/Investment
Calculation Period are at least 75 percent of the total net revenues
(determined in accordance with GAAP) of the Resulting Entity for the
Fundamental Change/Investment Calculation Period.
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8.9 Leverage Ratios.
Permit the ratio of (1) Funded Debt less Subordinated Debt to (2)
Adjusted Consolidated Tangible Net Worth plus Subordinated Debt to exceed 4.0 to
1.
8.10 Recourse Servicing.
Permit the aggregate principal balance of Mortgage Loans covered by
Recourse Servicing at any time after the date hereof to exceed (i)
$2,350,000,000 less (ii) all reductions in the aggregate principal balance of
such Mortgage Loans covered by Recourse Servicing as of March 31, 1998, whether
by reason of prepayment or amortization from and after April 1, 1998.
8.11 Liens.
Permit, or permit any Subsidiary to permit, any Lien to exist on
any of its property or assets (including, without limitation, the Company's
rights under any contracts relating to mortgage sales and under any Servicing
Agreements) other than:
(a) Liens for taxes, assessments and other governmental
impositions not yet due or which are being contested in good faith by
appropriate proceedings, provided, that adequate reserves with respect
thereto are maintained on the books of the Company or its Subsidiaries,
as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business and securing obligations which are not overdue for a period of
more than 60 days or which are being contested in good faith by
appropriate proceedings, provided, that adequate reserves with respect
thereto are maintained on the books of the Company or its Subsidiaries,
as the case may be, in accordance with GAAP;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from
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the value of the property subject thereto or interfere with
the ordinary conduct of the business of the Company or such
Subsidiary;
(f) Liens of landlords, arising solely by operation of law and
which are not avoidable as a matter of law, on fixtures and moveable
property located on premises leased in the ordinary course of business,
provided, that the rental payments secured thereby are not yet due;
(g) Liens arising out of judgments or awards against the Company
or any Subsidiary with respect to which the Company or such Subsidiary
is prosecuting an appeal or proceeding for review and the Company or
such Subsidiary is maintaining adequate reserves in accordance with
GAAP;
(h) Liens which were in existence on December 31, 1997 and which
secured obligations reflected in the financial statements referred to in
Section 6.6;
(i) Liens upon real and/or tangible personal property, which
property was acquired after December 31, 1997 (by purchase, construction
or otherwise) by the Company or its Subsidiaries, each of which Liens
either (A) existed on such property before the time of its acquisition
and was not created in anticipation thereof at the request or direction
of the Company, or (B) was created solely for the purpose of securing
Debt representing, or incurred to finance, refinance or refund, the cost
(including the cost of construction) of the respective property;
provided, that no such Lien shall extend to or cover any property of the
Company or such Subsidiary other than the respective property so
acquired and improvements thereon;
(j) Liens incidental to the conduct of the Company's
mortgage-related businesses or the ownership of its property or arising
out of transactions entered in the ordinary course of the Company's
mortgage-related businesses which do not secure Debt and do not, in the
aggregate, materially detract from the value of its properties in the
aggregate or materially impair the use thereof in the ordinary course of
the Company's business;
(k) Liens arising from repurchase agreements relating to pools
of Mortgage Loans or Securities that constitute Debt of the Company or
relating to Servicing Agreements securing Debt of the Company, provided
that the aggregate principal amount of Debt secured by such Liens shall
not exceed $200,000,000 at any time and shall not cause any violation of
the restriction on Debt imposed by Section 8.5;
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(l) Liens on assets of corporations which become Subsidiaries
after the date of this Agreement; provided, that (i) such Liens existed
at the time such corporation became a Subsidiary and were not created in
anticipation thereof, (ii) any such Lien is not spread to cover any
property or assets of such corporation after the time such corporation
becomes a Subsidiary (other than any such spreading resulting from
"after-acquired property" clauses in existence on the date such
corporation became a Subsidiary) and (iii) the amount of Debt secured
thereby is not increased;
(m) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any Lien
referred to in the foregoing clauses; provided, that the principal
amount of Debt secured thereby shall not exceed the principal amount of
Debt so secured immediately prior to the time of such extension, renewal
or replacement, and that such extension, renewal, or replacement Lien
shall be limited to all or a part of the property which secured the Lien
so extended, renewed or replaced (plus improvements on such property);
(n) Liens (not otherwise permitted hereunder) which secure
obligations not exceeding (as to the Company and all Subsidiaries)
$30,000,000 in an aggregate principal amount at any one time
outstanding;
(o) Liens (not otherwise permitted hereunder) which secure
obligations (as to the Company and all Subsidiaries) (1) incidental to
forward delivery contracts in the ordinary course of the Company's
mortgage-related businesses or (2) incidental to Investments by the
Company in the ordinary course of its mortgage banking business in
connection with puts, calls, swaps and other interest rate hedging
products, options and futures contracts to provide protection from
interest rate fluctuation; and
(p) the Liens arising under the Other Facility or under the
Security Agreement or any other Credit Document;
provided, however, that so long as no Event of Default has occurred and is
continuing, the Company may also permit Liens on Securities and Mortgage Loans
owned by the Company (other than Securities or Mortgage Loans constituting
Collateral) to secure Debt incurred from sources other than the Secured Parties
for the purpose of originating or purchasing such Securities or Mortgage Loans.
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8.12 Credit Requirement.
Permit the Borrowing Base to be less than the Credit
Requirement.
8.13 Affiliate Transactions.
Enter, or permit any Subsidiary to enter, into any transactions
with the Company's Parent or Affiliates that is not an arm's-length transaction
or that in any material respect is less advantageous to the Company or such
Subsidiary than a similar typical transaction with an unrelated third-party;
make any loans or advances to the Parent or any Affiliates with financial terms
more advantageous to the Parent or Affiliate than the terms of loans and
advances made to the Company from any such Parent or Affiliate; or make any net
loans or advances to the Parent or any Affiliates which would cause any
violation of Sections 7.9 or 8.9.
8.14 Conduct of Business.
Except as permitted under Section 8.8:
(a) enter into any material line of new business other than
businesses related to its current businesses, materially change the
nature of its business, cease to carry on its business as now conducted,
or
(b) fail to maintain its corporate existence, licenses,
franchises and privileges.
8.15 FHA and other Approvals.
Cause any Federal Agency which insures any material portion of the
Mortgage Loans owned or serviced by the Company to withdraw its approval of the
Company, or become ineligible as a lender under the VA loan guaranty program.
8.16 Restricted Payments.
Make any Restricted Payments; provided, however, so long as no
Default arising from the Company's failure to comply with Section 7.9 has
occurred and is continuing (or would result from any such payment) and no Event
of Default has occurred and is continuing (or would result from any such
payment), the Company may make Restricted Payments as expressly permitted by
subparagraphs (a) and (b) below:
(a) The Company may make Restricted Payments during any
Calculation Period in an amount which, when added to all other Restricted
Payments (including Restricted Payments made pursuant to Section 8.16(b)(i))
made during such Calculation Period, does
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not exceed the sum of (i) fifty percent (50%) of the increase, if any, in
Adjusted Consolidated Tangible Net Worth during such Calculation Period plus
(ii) 100% of all dividends received by the Company during such Calculation
Period from preferred and common stock in FSA and from redeemable preferred
stock in U.S. West, Inc. plus (iii) 50% of interest payable by the Company with
respect to such Calculation Period on the Subordinated Debt.
The increase in Adjusted Consolidated Tangible Net Worth
referenced in this Subsection (a) shall be computed without regard to
any increase or decrease resulting from the following activities: (1)
the contribution or distribution of Restricted FSA Securities, (2) cash
equity contributions to the Company, (3) the receipt of proceeds of
issuances of stock of the Company, (4) increases or decreases in the
amount of Subordinated Debt, or (5) the payment of permitted Restricted
Payments.
(b) The Company may, without regard to the maximum limit on
Restricted Payments established by Subsection (a) above:
(i) pay dividends required to be paid on its Series A
Preferred Stock and pay interest that is due and payable on the
Subordinated Debt, provided that all payments made pursuant to this
clause (i) shall still be included for purposes of determining the
maximum amount of dividends and distributions payable under Subsection
(a);
(ii) make additional Restricted Payments not to exceed the
Maximum Special Dividend Amount in the aggregate, which additional
Restricted Payments made pursuant to this clause (ii) shall not be
included in determining the maximum amount of Restricted Payments made
under Subsection (a); and
(iii) distribute the proceeds of issuances of stock to an
Affiliate (but not any proceeds received in connection with any public
or secondary offering of stock).
At the time the Company pays or makes any such Restricted Payment, it
shall notify the Agent in writing of the amount of such payment, which notice
shall (1) specify under which subparagraph and clause above the Restricted
Payment is being made and (2) contain such information as is necessary to
demonstrate that such dividend is permissible under the applicable subparagraph
and clause.
As used herein, "Maximum Special Dividend Amount" shall mean $64,100,000
plus one-half of the liquidation proceeds of U.S. West, Inc. redeemable
preferred stock owned by the Company, up to a maximum of $25,000,000, provided
that such liquidation proceeds shall be included in the Maximum Special Dividend
Amount only if
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the other half of such liquidation proceeds is used to repay Credit Indebtedness
and the maximum amount that can be included in the component of the Debt
Threshold set forth in Section 8.5(f) relating to Approved Equity Securities is
permanently reduced by the amount of any Special Dividend attributable to such
liquidation proceeds.
8.17 Maintenance of Restricted FSA Securities.
Sell or otherwise dispose of any of the Restricted FSA Securities
for less than the fair market value thereof at the time of sale or disposition.
8.18 Subordinated Debt Indenture.
(a) Enter into, without the prior written consent of the
Required Lenders, any amendment or modification of the Subordinated Debt
Indenture or other documents evidencing or governing the terms of the
Subordinated Debt if such amendment or modification would change (i) the
principal amount of or rate of interest on the Subordinated Debt, (ii)
the terms of repayment of the Subordinated Debt, (iii) the provisions
relating to the deferral of interest on the Subordinated Debt, (iv) any
terms or provisions of Article 12 (Subordination) of the Subordinated
Debt Indenture, (v) the definition of "Event of Default" in the
Subordinated Debt Indenture, or (vi) the provision of the Subordinated
Debt Indenture which requires the trustee to give certain holders of
senior indebtedness notices of defaults, accelerations and certain other
events; provided, however, that the Lenders hereby consent to that
certain First Supplemental Indenture dated December 1, 1995; or
(b) Enter into, without the prior written consent of the Agent,
any material amendment or modification of the Subordinated Debt
Indenture or other documents evidencing or governing the terms of the
Subordinated Debt other than the amendments or modifications requiring
the consent of the Required Lenders pursuant to clause (a) above; or
(c) Consent, without prior written notice to the Agent, to any
change in the trustee under the Subordinated Debt Indenture.
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ARTICLE IX
THE AGENT
---------
9.1 Appointment and Authorization.
(a) Each Lender irrevocably appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Agent by the terms hereof
together with all such powers as are reasonably incidental thereto.
(b) The Agent is hereby authorized to enter into the Security
Agreement on behalf of the Lenders and all obligations of the Lenders
thereunder shall be binding upon each Lender as if such Lender had
executed the Security Agreement. Each Lender hereby appoints and
authorizes the Collateral Agent to act on its behalf in the capacity
described in the Security Agreement and authorizes the Collateral Agent
to act on such Lender's behalf in all respects with regard to
performance under the Security Agreement.
(c) Unless and until the Agent shall have received the
directions of the Required Lenders as provided in Section 10.2(1) or (2)
or of all Lenders, if expressly required hereunder, the Agent may (but
shall not be obligated to) take or refrain from taking such action, or
direct the Collateral Agent to take or refrain from taking such action
with respect to an Event of Default as it shall deem advisable in the
best interests of the Lenders.
(d) The Agent shall not be required to take any action hereunder
if it shall reasonably determine that by so doing it may incur criminal
or civil liability.
9.2 Agent and Affiliates.
The Agent shall have the same rights and powers under this
Agreement as any other Lender and may exercise or refrain from exercising the
same as though it were not the Agent, and the Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with, the Company, any Subsidiary or Affiliate of the Company as if it
were not the Agent hereunder.
9.3 Action by Agent.
The obligations of the Agent hereunder are only those expressly set
forth herein. Without limiting the generality of the foregoing, the Agent shall
not be required to take any action with respect to any Default, except as
expressly provided in this Article IX or in Article X.
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9.4 Consultation with Experts.
The Agent may consult with legal counsel (who may be counsel for
the Company), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.
9.5 Liability of Agent.
(a) Neither the Agent nor any of its directors, officers,
agents, or employees shall be liable for any action taken or not taken
by it in connection herewith (i) with the consent or at the request of
the Required Lenders or of all Lenders, if required or (ii) in the
absence of its own gross negligence or willful misconduct.
(b) Neither the Agent (except as otherwise provided in this
Agreement) nor any of its directors, officers, agents or employees shall
be responsible for or have any duty to ascertain, inquire into or verify
(i) any statement, warranty or representation made in
connection with this Agreement or any Advance hereunder;
(ii) the performance or observance of any of the
covenants or agreements of the Company;
(iii) the satisfaction of any condition specified in
Article V, except receipt of items required to be delivered to the
Agent and the determination of the amount of the Credit
Requirement; or
(iv) the validity, effectiveness or genuineness of this
Agreement, the Notes or any other instrument or writing furnished
in connection herewith.
(c) The Agent shall not incur any liability by acting in reliance
upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex or similar writing) or
telephone communication believed by it to be genuine or, in the case of
a writing, to be signed by the proper party or parties.
9.6 Indemnification.
(a) Each Lender shall, ratably in accordance with its share of
the Aggregate Commitment (or, if the Commitments have been terminated,
then in accordance with its share of aggregate Loans then outstanding)
at the time the Agent or
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the Collateral Agent incurred such liability, indemnify the Agent and
the Collateral Agent (to the extent not reimbursed by the Company)
against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except such as
result from the indemnified party's gross negligence or willful
misconduct) that the Agent or the Collateral Agent may suffer or incur
in connection with this Agreement or the Security Agreement or any
action taken or omitted by the Agent or the Collateral Agent hereunder
or thereunder.
(b) For the purposes of this Section, the amount of any
Commitment of any Lender shall be the highest amount of such Commitment
of such Lender during the course of any event for which indemnity is
sought.
(c) The provisions of this Section shall survive the termination
of this Agreement.
9.7 Credit Decision.
Each Lender acknowledges that it has itself been and will continue
to be, independently and without reliance upon the Agent or any other Lender,
solely responsible for making its own independent appraisal of and
investigations into the financial condition, creditworthiness, condition,
affairs, status and nature of the Company. Accordingly, each Lender confirms to
the Agent that it has not relied, and will not hereafter rely, on the Agent or
any other Lender (i) except as otherwise provided in this Agreement, to check or
inquire on such Lender's behalf into the adequacy, accuracy or completeness of
any information provided by the Company under or in connection with this
Agreement or the transactions herein contemplated (whether or not such
information has been or is hereafter distributed to such Lender by the Agent) or
(ii) to assess or keep under review on such Lender's behalf the financial
condition, creditworthiness, condition, affairs, status or nature of the Company
or any Approved Investor.
9.8 Resignation or Removal and Appointment of Successor
Agent.
The Agent may resign at any time by giving 90 days prior written
notice thereof to the Lenders and the Company. The Agent may be removed at any
time upon ninety (90) days prior written notice from the Required Lenders. Upon
any such resignation or removal notice the Required Lenders shall have the right
to appoint a successor Agent; provided that such appointment, unless made after
the occurrence of a Default and during the continuance thereof, shall be subject
to the consent of the Company, which consent shall not be unreasonably withheld.
If the Company and/or Required Lenders, as applicable, are unable to agree on
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the appointment of a successor agent within such 90 day period, the retiring
agent shall appoint one of the Lenders as a successor agent for the Lenders.
Upon the appointment of a successor Agent, that successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under this Agreement; provided, however, that the
resigning Agent shall not be discharged from any liability as a result of its or
its directors', officers', agents' or employees' gross negligence or willful
misconduct in connection with the performance of its duties and obligations
under this Agreement prior to the effective date of its resignation. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
IX shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Agent under this Agreement.
9.9 Compensation.
Compensation of the Agent for its services hereunder and
reimbursement for any expenses incurred by it in the performance of its duties
hereunder shall be paid by the Company pursuant to a separate written agreement
between the Agent and the Company.
9.10 Release of Collateral Documents.
The Collateral Agent shall not release any Pledged Items except as
provided herein or in connection with the enforcement of any remedies hereunder.
9.11 Knowledge of Defaults.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Event of Default unless the Agent has received notice from a
Lender or the Company referring to this Agreement, describing such Event of
Default and stating that such notice is a "Notice of Default." The Agent shall
notify the Lenders within a reasonable time after the Agent has notice of the
occurrence of an Event of Default, which notice shall describe the Event of
Default.
9.12 Reports.
The Agent may, at its option with the approval of the Company,
alter the format of any report required hereunder, provided such modified report
contains the same information previously furnished in the unmodified report.
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ARTICLE X
DEFAULTS
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10.1 Defaults.
In case of the happening of any of the following events (herein
called "Events of Default"):
(a) Any principal amount of any Loan made under this Agreement
(other than principal payments required to be made pursuant to Section
2.14(a)) shall not be paid when due and payable; or
(b) Any principal payment required to be made pursuant to
Section 2.14(a) shall not be paid when due and payable, and shall remain
unpaid for one Business Day;
(c) Any interest or Fees due under this Agreement shall not be
paid when due and payable, and shall remain unpaid for five (5) days; or
(d) Any amount, other than principal or interest or Fees,
payable under this Agreement shall not be paid when due and payable and
shall remain unpaid for five (5) days after written notice to the
Company of such nonpayment; or
(e) Any representation or warranty made or deemed made by the
Company (or any of its officers) herein (other than the representations
and warranties contained in Sections 4.6 and 4.7, the inaccuracies of
which shall only cause the Collateral affected thereby to cease to
qualify as Eligible Collateral) in the Security Agreement or in any
certificate, agreement, instrument or statement contemplated by or made
or delivered pursuant to or in connection herewith or therewith shall
prove to have been incorrect when made or deemed made in any material
respect; provided however that if the facts resulting in the breach of
any such representation or warranty are susceptible of correction, such
breach shall not constitute an Event of Default if such facts are
corrected within 30 days after such inaccurate representation or
warranty was made or deemed made; or
(f) The Company shall fail to perform or observe any term,
covenant or agreement contained in Sections 7.10, 8.1, 8.3, 8.4, 8.6,
8.7, 8.9, 8.14(a), 8.15, 8.17 or 8.18; or
(g) The Company shall (i) fail to comply with the covenant
contained in Section 8.12 and such failure remains unremedied for one
Business Day, or (ii) fail to perform any term, covenant or agreement
contained in Sections 7.7(a), 7.9, 8.5, 8.8 or 8.16, and such failure
shall remain unremedied for more than 30 days;
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(h) The Company shall fail to perform or observe any other term,
covenant or agreement contained herein or in the Security Agreement on
its part to be performed or observed and any such failure remains
unremedied for thirty (30) days after written notice thereof shall have
been given to the Company by the Agent or the Collateral Agent; or
(i) An "Event of Default" (as defined in the Other
Facility or any other Credit Document) shall exist; or
(j) Either this Agreement, the Notes or the Security Agreement
shall, at any time after its execution and delivery, for any reason
cease to be in full force and effect (unless such occurrence is in
accordance with its terms or after payment thereof) or shall be declared
to be null and void, or the validity or enforceability thereof shall be
contested by the Company or the Collateral Agent, or the Company or the
Collateral Agent shall deny that it has any further liability or
obligation thereunder; or
(k) The Company, its Parent, Fund American Enterprises Holdings,
Inc. or any of the Company's material Subsidiaries shall (i) be
adjudicated bankrupt or insolvent, (ii) admit in writing its inability
to pay its debts as they mature, (iii) make an assignment for the
benefit of creditors, (iv) fail generally to pay its debts as such debts
become due and payable, (v) apply for or consent to the appointment of
any receiver, trustee, custodian or similar officer for it or for all or
any substantial part of its property; or such receiver, trustee,
custodian or similar officer shall be appointed without the application
or consent of the Company or of such Subsidiary, as the case may be, and
such appointment shall continue undischarged for a period of 60 days,
(vi) institute (by petition, application, answer, consent or otherwise)
any bankruptcy, insolvency, reorganization, arrangement, readjustment of
debt, dissolution, liquidation or similar proceeding relating to it
under the laws of any jurisdiction, (vii) have any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt,
dissolution, liquidation or similar proceeding (by petition, application
or otherwise) instituted against it and remain undismissed for a period
of 60 days, or (viii) have any judgment, writ, warrant of attachment or
execution or similar process issued or levied in respect of any of its
obligations (alleged or otherwise) against any of its property involving
any amount in excess of $5,000,000 and such judgment, writ or similar
process shall not be released, vacated, stayed or fully bonded within 30
days after its issue or levy; or
(l) The Company or any of the Company's material Subsidiaries
shall (i) default in the payment when due (after
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giving effect to any available cure period) of any principal of or
interest on any of its Debt other than the Credit Indebtedness in excess
of $25,000,000 in the aggregate or (ii) any event specified in any note,
agreement, indenture or other document evidencing or relating to any
such Debt in excess of $25,000,000 shall occur if the effect of such
event is to cause, or to permit the holder or holders of such Debt (or a
trustee or agent on behalf of such holder or holders) to cause, such
Debt to become due, or to be prepaid in full, prior to its stated
maturity, and in either case any notice or cure period has expired and
such default has not been waived in writing by the holder of such Debt;
or
(m) An event or condition occurs or exists with respect to any
Plan concerning which the Company is under an obligation to furnish a
report to the Lenders in accordance with Section 7.7(h) and as a result
of such event or condition, together with all other such events or
conditions, the Company or any ERISA Affiliate has incurred a liability
to a Plan or the PBGC (or any combination of the foregoing) which is
material in relation to the financial position of the Company; or
(n) A Change in Control shall occur with respect to the
Company; or
(o) The lien against the Collateral created under the Security
Agreement for the benefit of the Secured Parties shall cease to be a
perfected, first priority security interest; provided, however, that if
the Secured Parties shall cease to have a perfected, first priority
interest in a portion of the Collateral, such cessation shall not
constitute an Event of Default so long as the Collateral in which the
Secured Parties have a perfected, first priority security interest is
sufficient to cause the Borrowing Base to exceed the Credit Requirement;
then, and in every such event and at any time thereafter during the continuance
of such event, the Agent and the Lenders shall have the rights described in the
following Sections of this Article X.
10.2 Remedies.
(1) Upon the occurrence of any Event of Default the Agent may,
and at the direction of the Required Lenders shall, at the same or
different times, take one or more of the following actions: (i) by
notice to the Company terminate the Commitments and they shall thereupon
terminate, (ii) by notice to the Company declare the Obligations to be,
and the Obligations shall thereupon become, immediately due and payable
without presentment, demand, protest or other
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notice of any kind, all of which are hereby waived by the Company,
provided that in the case of any of the Events of Default specified in
subparagraph (k) of Section 10.1, without any notice to the Company or
any other act by the Agent or the Lenders, the Commitments shall
thereupon terminate and the Obligations shall become immediately due and
payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Company. Following the
occurrence and during the continuance of a Default, no Lender shall be
obligated to fund any Loan hereunder.
(2) Following the occurrence and during the continuance of an
Event of Default, the Company agrees that the Company and the Agent
shall, at the request of the Required Lenders, implement certain
procedures with respect to the Company's funding of AP Mortgages, all at
the Company's sole expense. Such procedures may include, but are not
limited to: (i) reducing the advance rate against AP Mortgages for
purposes of determining the Mortgage Collateral Value component of the
Borrowing Base, (ii) requiring that if (A) AP Mortgages are funded with
wire transfers, such wire transfers originate from accounts located at a
lending office of a Lender, (B) AP Mortgages are funded from accounts
which are not located at a lending office of a Lender, the financial
institution which holds such account enter into an agreement with the
Company and the Agent which shall provide that the Agent shall have
exclusive dominion and control over the funds in such account, and (iii)
requiring the Company to provide the Agent and the Lenders with such
information regarding the funding of such AP Mortgages as the Required
Lenders may reasonably request. The Company, at its expense, shall from
time to time execute and deliver to the Agent or the Collateral Agent
all such assignments, certificates, supplemental documents, and
financing statements, and shall do all other acts or things, as the
Agent may reasonably request in order to more fully implement such
procedures.
(3) Upon the occurrence of any Event of Default, the Agent and
the Collateral Agent, on behalf of the Secured Parties, shall be
entitled to all rights and remedies hereunder and under the Security
Agreement and all other rights and remedies at law or in equity existing
in or conferred upon the Secured Parties by other jurisdictions or other
applicable law.
(4) The Company waives any right to require the Agent, the
Collateral Agent or any Lender to (i) proceed against or exhaust any of
its remedies against the Company or any other Person in any particular
order, (ii) proceed against or exhaust any of the Collateral or pursue
its rights and
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remedies as against the Collateral in any particular order or (iii)
pursue any other remedy in its power.
(5) The Agent on behalf of the Lenders may, but shall not be
obligated to, advance any sums or do any act or thing necessary to
uphold and enforce the lien and priority of, or the security intended to
be afforded by, any Pledged Mortgage, including, without limitation,
payment of delinquent taxes or assessments and insurance premiums. The
Company shall provide any and all information required by the Agent or
the Collateral Agent to administer this Agreement or collect on the
Collateral. All advances, charges, costs and expenses, including
reasonable attorneys fees, incurred or paid by the Agent in exercising
any right, power or remedy conferred by this Agreement, or in the
enforcement hereof (or by any Lender acting on instruction of the
Required Lenders in the enforcement hereof), together with interest
thereon at the rate per annum of two percent (2%) plus the Alternate
Base Rate from the time of payment until repaid, shall become a part of
the Credit Indebtedness.
(6) No failure on the part of the Agent or any Lender to
exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise by the Agent or any Lender of any right, power or
remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The remedies herein
provided are cumulative and are not exclusive of any remedies provided
by law.
10.3 Notice of Default.
The Agent may, and at the direction of the Required Lenders shall,
give notice to the Company under Section 10.1(d), 10.1(h) or 10.2 and shall
thereupon notify all Lenders thereof.
10.4 Application of Proceeds.
(a) After the occurrence of an Event of Default, the portion of the
proceeds of any sale or enforcement of all or any part of the Collateral which
is delivered to the Agent by the Collateral Agent pursuant to the provisions of
the Security Agreement shall be applied by the Agent, after taking into account
any adjustments made pursuant to Section 2.3(e):
First, to the extent not already paid from the Collateral
proceeds by the Collateral Agent, to payment of all costs and expenses
of such sale or enforcement, including reasonable compensation to the
Agent's agents and counsel, and all expenses, liabilities and advances
made or incurred by the Agent or any Lender acting on instructions of
the Required Lenders in connection therewith;
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Second, to the extent not already paid from the Collateral
proceeds by the Collateral Agent, to the payment of all costs and
expenses incurred by the Collateral Agent under the Security Agreement;
Third, to the payment of accrued and unpaid interest on the
Credit Indebtedness (including the accrued and unpaid interest portion,
if any, of the Approved GNMA Letter of Credit Obligations), fees due
hereunder and all other unpaid Credit Indebtedness other than the
principal amount of Loans, the face amount (whether drawn or undrawn) of
Approved GNMA Letters of Credit, and the Approved Secured Rate Hedging
Obligations, ratably according to the respective amounts owing or due
each Lender or Non-Lender Balance Bank until such amounts are paid in
full;
Fourth, to the total unpaid principal amount of all Loans and to
the unpaid face amount (whether drawn or undrawn) of Approved GNMA
Letters of Credit, and to all Approved Secured Rate Hedging Obligations
then due and payable, ratably according to the amount due each Lender
(provided, however, that proceeds applicable to the undrawn face amount
of Approved GNMA Letters of Credit shall be distributed in accordance
with Section 10.5 below) until such amounts are paid in full; and
Fifth, to the payment to the Company, or to its successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
(b) The Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with
this Agreement.
(c) If the proceeds of any such sale are insufficient to cover
the costs and expenses of such sale, as aforesaid, and the payment in
full of the Credit Indebtedness, the Company shall remain liable for any
deficiency.
10.5 Letter of Credit Cash Collateral Accounts.
(a) Upon the Agent's receipt of any Collateral proceeds to be
applied to the undrawn face amount of any Approved GNMA Letters of
Credit pursuant to Section 10.4(a), a separate cash collateral account
(each a "Letter of Credit Account") shall be established with the Agent
for each outstanding Approved GNMA Letter of Credit. Each Letter of
Credit Account shall be established in the name of the Company but shall
be under the sole dominion and control of the Agent, for the benefit of
the Lenders, and the Company shall have no interest therein. All funds
deposited into the Letter of
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Credit Accounts from time to time shall be invested by the Agent at its
discretion in certificates of deposit of First Chicago having a maturity
not exceeding 30 days, and all amounts earned thereon shall also be held
in the Letter of Credit Account to be disbursed in accordance with
Section 10.5(b). In addition to the foregoing, the Company hereby grants
to the Agent, for the benefit of the Lenders, a properly perfected
security interest in and to each Letter of Credit Account and any funds
that may hereafter be on deposit in such account and the proceeds
thereof.
(b) Upon the Agent's receipt of any Collateral proceeds to be
applied to the undrawn face amount of any particular Approved GNMA
Letter of Credit pursuant to Section 10.4, such proceeds shall be
deposited by the Agent into the Letter of Credit Account applicable to
that particular Approved GNMA Letter of Credit. Such funds shall be
promptly disbursed from the applicable Letter of Credit Account to
reimburse the applicable Issuing Bank for drafts drawn from time to time
under the applicable Approved GNMA Letter of Credit. If an Approved GNMA
Letter of Credit is drawn upon and the funds held in the Letter of
Credit Account applicable to that Approved GNMA Letter of Credit are
insufficient to reimburse the Issuing Bank in full for all Approved GNMA
Letter of Credit Obligations applicable thereto, such unreimbursed
obligations shall, for purposes of Section 10.4, thereafter be
considered unpaid Loan principal due and owing to the Issuing Lender. If
(i) an Approved GNMA Letter of Credit is fully drawn upon and all
Approved GNMA Letter of Credit Obligations relating thereto are paid in
full or (ii) an Approved GNMA Letter of Credit expires or is otherwise
terminated (and thus no further Approved GNMA Letter of Credit
Obligations exist with respect to such Approved GNMA Letter of Credit),
then any funds then held in the Letter of Credit Account relating to
such Approved GNMA Letter of Credit shall be considered Collateral
proceeds which shall again be distributed to the Agent to be disbursed
in accordance with Section 10.4.
ARTICLE XI
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
11.1 Successors and Assigns.
The terms and provisions of the Credit Documents shall be binding
upon and inure to the benefit of the Company and the Lenders and their
respective successors and assigns, except that the Company shall not have the
right to assign its rights or obligations under the Credit Documents without the
consent of all the Lenders and any assignment by any Lender must be made in
compliance with Section 11.3. The Agent may treat the payee of
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any Note as the owner thereof for all purposes hereof unless and until such
payee complies with Section 11.3 in the case of an assignment thereof or, in the
case of any other transfer, a written notice of the transfer is filed with the
Agent. Any assignee or transferee of a Note agrees by acceptance thereof to be
bound by all the terms and provisions of the Credit Documents. Any request,
authority or consent of any person, who at the time of making such request or
giving such authority or consent is the holder of any Note, shall be conclusive
and binding on any subsequent holder, transferee or assignee of such Note or of
any Note or Notes issued in exchange therefor.
11.2 Participations.
(a) Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law,
at any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held
by such Lender, any Commitment of such Lender or any other interest of
such Lender under the Credit Documents. In the event of any such sale by
a Lender of participating interests to a Participant, such Lender's
obligations under the Credit Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, such Lender shall remain the holder
of any such Note for all purposes under the Credit Documents, all
amounts payable by the Company under this Agreement shall be determined
as if such Lender had not sold such participating interests, and the
Company and the Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations
under the Credit Documents.
(b) Voting Rights. Except as otherwise expressly provided in the
Credit Documents, each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or
waiver of any provision of the Credit Documents other than any
amendment, modification or waiver with respect to any Loan or Commitment
in which such Participant has an interest which (i) forgives principal,
interest or Fees or reduces the interest rate or Fees payable with
respect to any such Loan or Commitment, (ii) postpones any date fixed
for any regularly-scheduled payment of principal of, or interest on, any
such Loan or Fees on any such Commitment, (iii) releases Collateral
beyond the releases expressly provided for herein, or (iv) extends the
Termination Date.
(c) Benefit of Set-Off. The Company agrees that each Participant
shall be deemed to have the right of set-off provided pursuant to
Section 12.10(a) in respect of its
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participating interest in amounts owing under the Credit Documents to
the same extent as if the amount of its participating interest were
owing directly to it as a Lender under the Credit Documents, provided
that each Lender shall retain the right of set-off provided in Section
12.10(a) with respect to the amount of participating interests sold to
each Participant. The Lenders agree to share with each Participant, and
each Participant, by exercising the right of set-off provided in Section
12.10(a), agrees to share with each Lender, any amount received pursuant
to the exercise of its right of set-off, such amounts to be shared in
accordance with Section 12.10(b) as if each Participant were a Lender.
The Company is not a party to the agreement among the Lenders and
Participants set forth in the immediately preceding sentence, and such
sentence may be amended without the consent of the Company.
11.3 Assignments.
(a) Permitted Assignments. Any Lender may, with the prior
written consent of Agent (which consent shall not be unreasonably
withheld or delayed), in the ordinary course of its business and in
accordance with applicable law, at any time assign to one or more banks
or other entities ("Purchasers") all or any part of its rights and
obligations under the Credit Documents, provided that, unless an Event
of Default has occurred and is then continuing, the prior written
consent of the Company to the identity of any such Purchaser shall be
required, and the Company agrees that such consent shall not be
unreasonably withheld or delayed, except that no consent of the Agent or
the Company shall ever be required for (i) any assignment to a Person
directly or indirectly controlling, controlled by or under direct or
indirect common control with the assigning Lender or (ii) the pledge or
assignment by a Lender of such Lender's Note and other rights under the
Loan Documents to any Federal Reserve Bank in accordance with applicable
law. Notwithstanding the foregoing, no assignment of Loans or
Commitments which requires the consent of the Agent or the Company may
be made if the assignment would result in either the assigning Lender or
the Purchaser (which may be an existing Lender) holding a Commitment of
less than $10,000,000; provided, however, that if (due to reductions in
the Aggregate Commitment) a Lender's Commitment is less than
$10,000,000, such Lender may assign all (but not less than all) of its
Commitment in accordance with the terms of this Section notwithstanding
the fact that such Commitment is less than $10,000,000.
(b) Effect; Effective Date. Upon delivery to the Agent of a
New/Modified Commitment Supplement in the form of Exhibit H hereto
executed by the assigning Lender and the Purchaser and payment to the
Agent of an assignment fee of
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$3,500, such assignment shall become effective on the effective date
specified in such notice of assignment. On and after the effective date
of such assignment, such Purchaser shall for all purposes be a Lender
party to this Agreement and any other Credit Document executed by the
Lenders and shall have all the rights and obligations of a Lender under
the Credit Documents, to the same extent as if it were an original party
hereto, and no further consent or action by the Company, the Lenders or
the Agent shall be required to release the transferor Lender with
respect to the percentage of the Commitments and Loans assigned to such
Purchaser. Upon the consummation of any assignment to a Purchaser
pursuant to this Section, the transferor Lender, the Agent and the
Company shall make appropriate arrangements so that replacement Notes
are issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their respective Commitments, as adjusted
pursuant to such assignment.
11.4 Dissemination of Information.
The Company authorizes each Lender to disclose to any Participant
or any other Person acquiring an interest in the Credit Documents by operation
of law (each a "Transferee") and any prospective Transferee any and all
information in such Lender's possession concerning the creditworthiness of the
Company and its Subsidiaries, provided that the transferor shall obtain from any
such Transferee or prospective Transferee, prior to disclosing any such
information, a confidentiality agreement executed by the Transferee or
prospective Transferee agreeing to be bound by any confidentiality requirements
with respect to such information which are imposed upon the Lenders under the
terms of the Credit Documents.
11.5 Tax Treatment.
If any interest in any Credit Document is transferred to any
Transferee which is organized under the laws of any jurisdiction other than the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
all applicable provisions of the Code with respect to withholding and other tax
matters.
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ARTICLE XII
MISCELLANEOUS
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12.1 Immediately Available Funds.
All payments and other transfers of funds under this Agreement
shall be made in funds immediately available at the place of payment unless the
recipient thereof shall otherwise agree.
12.2 Notices.
Except where instructions or notices are expressly authorized
elsewhere in this Agreement to be given by telephone or by other means of
transmission, all instructions, notices and other communications to be given to
any party hereto shall be in writing and shall be personally delivered or sent
by certified mail, postage prepaid, private delivery service or by facsimile,
and shall be deemed to be given for purposes of this Agreement on the day (or at
the time of day, if applicable) when actually received by the intended party at
its address or facsimile or telephone number as set forth below (or as such
party may specify to the other parties in writing). Any requirement that notice
be given to any person under this Agreement shall be deemed to require notice to
the Agent, the Company and each Lender, unless otherwise expressly provided
herein. Whenever the giving of notice by telephone is permitted by this
Agreement, such notice shall be confirmed in writing within three days.
The addresses for notices to the parties are as set forth below
their signatures on the signature pages hereto or on any assignment.
12.3 Survival and Termination of Agreement.
All covenants, agreements, representations and warranties made
herein and in the certificates and other documents delivered pursuant hereto
shall survive the funding of the Loans and shall continue in full force and
effect to the Termination Date or so long as any amount payable to the Lenders
in connection with this Agreement is unpaid, whichever is later, at which time
this Agreement shall terminate, it being expressly understood that the
obligations of the Company under Sections 3.1, 3.3, 7.8 and 7.15 shall
(notwithstanding anything in this Agreement to the contrary) survive any
termination of this Agreement. Whenever in this Agreement any party is referred
to, such reference shall be deemed to include the successors and assigns of such
party, but no assignment or transfer (by operation of law or otherwise) of this
Agreement by the Company or any of its rights or duties hereunder may be made
without the prior written consent of all of the Lenders; and all covenants,
promises and agreements by or on behalf of the Company which are
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contained in this Agreement shall inure to the benefit of the
successors and assigns of the Lenders.
12.4 Fees and Expenses of the Lenders.
The Company will pay (a) all reasonable out-of-pocket costs and
expenses incurred by the Agent or by the Collateral Agent (including the fees,
out-of-pocket expenses and other reasonable expenses of counsel to the Agent or
the Collateral Agent) in connection with the preparation, execution and delivery
of this Agreement, the Notes, the Security Agreement and any other agreements or
documents referred to herein or therein and any amendments thereto, and (b) all
reasonable out-of-pocket costs and expenses incurred by the Agent, the
Collateral Agent and the Lenders (including the fees, out-of-pocket expenses and
other reasonable expenses of counsel to the Lenders) in connection with the
enforcement and protection of the rights of the Lenders under this Agreement,
the Notes, the Security Agreement or any other agreement or document referred to
herein or therein.
12.5 Applicable Law.
This Agreement shall be construed in accordance with and governed
by the law of the State of Illinois.
12.6 Modification of Agreement.
Except for certain changes in a Lender's Commitment or admission of
a new Lender which (pursuant to Section 2.1) do not require any consents or
approvals from the other Lenders but which require a New/Modified Commitment
Supplement executed by the Agent, the Company and the Lender(s) being added or
modifying their Commitment, no provisions of this Agreement may be amended or
waived unless such amendment or waiver is in writing and is signed by the
Company, and the Agent if the rights or duties of the Agent are affected
thereby, and
(1) each Lender if such amendment or waiver
(i) reduces or forgives any principal of any
unpaid Loan or any interest thereon or any Fees due to
such Lender hereunder; or
(ii) postpones the date fixed for any payment of
principal of or interest on any unpaid Loan or any Fees payable
to such Lenders; or
(iii) changes the amount of payment of principal
of or interest on any unpaid Loan or any Fees payable to the
Lenders hereunder; or
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(iv) changes or waives any of the conditions precedent
to the initial Advance hereunder or any subsequent Advance; or
(v) changes the amount of any such Lender's
Commitment, except as expressly provided for herein; or
(vi) would amend or waive the method of calculating
the Borrowing Base; or
(vii) would amend or waive the provisions of Section
2.14; or
(viii) extends the Termination Date; or
(ix) releases any Collateral beyond the releases
expressly provided for herein or in the Security Agreement; or
(x) changes or waives any restriction on the
Company's ability to assign its rights or obligations
under any of the Credit Documents; or
(xi) changes or waives any funding
requirement, including, without limitation, any Lending
Sublimits; or
(xii) changes or waives any yield protection;
or
(xiii) changes or waives any provision herein
regarding the indemnification of the Agent, the Collateral Agent
or such Lender; or
(xiv) changes the definition of Required Lenders
or modifies any requirement for consent by all of the Lenders;
or
(xv) changes or waives any provision herein
regarding the allocation among the Lenders of any payments or
proceeds received by the Agent hereunder; or
(2) the Required Lenders in the case of all other waivers or
amendments.
12.7 Non-Waiver of Rights by the Lenders.
Neither any failure nor any delay on the part of the Agent or
the Lenders in exercising any right, power or privilege hereunder or under the
Security Agreement shall operate as a waiver thereof, nor shall a single or
partial exercise thereof
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preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
12.8 Dealings with the Company and its Affiliates.
The Lenders and their Affiliates may accept deposits from, extend
credit to and generally engage in any kind of banking, trust or other business
with the Company and any of its Affiliates regardless of the capacity of the
Lenders hereunder.
12.9 Changes in GAAP.
The parties agree that if there are any changes in GAAP in the
future which result in material changes to the presentation of the Company's
financial condition in accordance with GAAP in such a way as to alter the
material intent of this Agreement, then the parties will negotiate in good faith
to attempt to agree on such modifications to this Agreement as may be necessary
to preserve the original intent of this Agreement in light of such revised GAAP
rules, provided that unless and until a written agreement is entered into by all
parties hereto, no changes to this Agreement shall be effective and all
calculations required to be made in accordance with GAAP hereunder shall
continue to be made as if GAAP had not changed.
12.10 Set-Off.
(a) If an Event of Default shall have occurred, each Lender
shall have the right, at any time and from time to time without notice
to the Company, any such notice being hereby expressly waived, to
set-off and to appropriate or apply any and all deposits of money or
property or any other indebtedness at any time held or owing by such
Lender to or for the credit or the account of the Company against and on
account of all outstanding Credit Indebtedness and all Credit
Indebtedness which from time to time may become due hereunder and all
other obligations and liabilities of the Company under this Agreement,
regardless of the adequacy of any Collateral and irrespective of whether
or not such Lender shall have made any demand hereunder and whether or
not said obligations and liabilities shall have matured.
(b) Each Lender agrees that if it shall, by exercising any right
of set-off or counterclaim or otherwise, receive payment of a proportion
of the aggregate amount of principal, interest or Fees due with respect
to this Agreement and the Notes held by it which is greater than the
proportion received by any other Lender in respect of the aggregate
amount of principal, interest or Fees due with respect to this Agreement
and the Notes held by such other Lender, the Lender receiving such
proportionately greater payment shall purchase such participations in
the Notes held by the other
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Lenders and such other adjustments shall be made, as may be required so
that all such payments of principal, interest or Fees shall be shared by
the Lenders hereunder pro rata according to their respective shares of
the Credit Indebtedness. Each Lender agrees to exercise any and all
rights of set-off, counterclaim or bankers' lien relating to the Credit
Indebtedness first fully against the Credit Indebtedness and only then
to any other Debt of the Company to such Lender; provided that any
Lender which is also a lender under the Other Facility may exercise any
and all rights of set-off, counterclaim or bankers' lien relating to the
Credit Indebtedness or the indebtedness under the Other Facility against
either the Credit Indebtedness or the indebtedness under the Other
Facility (or a combination thereof) in such proportions and priorities
as such Lender may elect. The Company is not a party to the agreement
among the Lenders set forth in this Section 12.10(b), and such Section
may be amended without the consent of the Company.
(c) The Company agrees that funds received and held by the
Company as custodian for FNMA, GNMA or other mortgage pools which are
deposited into accounts with any Lender shall be clearly identified as
custodial accounts, and each Lender agrees that each provision of the
foregoing paragraphs of this Section 12.10 shall not apply to such
custodial accounts. The Company shall not deposit any of its general
funds in any custodial accounts or otherwise commingle funds in any
custodial accounts.
12.11 Counterparts.
This Agreement may be executed in counterparts which, taken
together, shall constitute a single document.
12.12 Severability.
In case any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
12.13 Headings.
Section headings in the Credit Documents are for convenience of
reference only and shall not govern the interpretation of any of the provisions
of the Credit Documents.
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12.14 Entire Agreement.
The Credit Documents embody the entire agreement and understanding
among the Company, the Agent and the Lenders and supersede all prior agreements
and understandings among the Company, the Agent and the Lenders relating to the
subject matter thereof.
12.15 Consent of Jurisdiction.
THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN
CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY CREDIT
DOCUMENTS AND THE COMPANY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR
ANY LENDER TO BRING PROCEEDINGS AGAINST THE COMPANY IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE COMPANY AGAINST THE AGENT OR ANY
LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY CREDIT DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
12.16 Waiver of Jury Trial.
THE COMPANY, THE AGENT AND EACH LENDER HEREBY WAIVE TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY CREDIT DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.
-107-
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IN WITNESS WHEREOF, the Company and the Lenders have caused this
Agreement to be duly executed by their duly authorized officers, all as of the
day and year first above written:
SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
Address for Notices:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Attn: Vice President/Treasury
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
First Vice President
Address for Notices Regarding
Fundings:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Other Notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. Power
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
-108-
▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
By:
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
First Vice President
Address for Notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. Power
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA NT & SA
By:
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Address for Notices:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇/6716
THE BANK OF NEW YORK
By:
----------------------------------
▇▇▇▇▇▇▇▇ ▇. Dominus
Vice President
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. Dominus
Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
-109-
116
BANKERS TRUST COMPANY
By:
----------------------------------
▇▇▇▇ ▇'▇▇▇▇▇▇
Managing Director
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Mail Stop ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇'▇▇▇▇▇▇
Managing Director
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
BANQUE PARIBAS
By:
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Assistant Vice President
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Address for Notices:
The Equitable Tower
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Assistant Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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CIBC ▇▇▇▇▇▇▇▇▇▇▇ CORP., as agent for
CIBC, INC.
By:
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Executive Director
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Managing Director
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Two Paces West
2727 Paces Ferry Road, Suite 1200
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
COMERICA BANK
By:
----------------------------------
▇▇▇ ▇▇▇▇▇
Vice President
Address for Notices:
One Detroit Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇
Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
-111-
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FIRST UNION NATIONAL BANK
By:
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇-▇-▇▇-▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
CREDIT LYONNAIS NEW YORK BRANCH
By:
----------------------------------
W. ▇▇▇ ▇▇▇▇▇▇▇
Vice President
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: W. ▇▇▇ ▇▇▇▇▇▇▇
Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
FLEET BANK N.A.
By:
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
Address for Notices:
1185 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
-112-
119
GUARANTY FEDERAL BANK, F.S.B.
By:
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
--------------------------------
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By:
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
MARINE MIDLAND BANK
By:
-----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Administrative Vice President
Address for Notices:
One Marine ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Administrative Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
-113-
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
By:
----------------------------------
▇▇▇▇ ▇▇ ▇▇▇▇▇
Banking Officer
Address for Notices:
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇ ▇▇▇▇▇
Banking Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
NATIONSBANK, N.A.
By:
----------------------------------
▇▇▇▇ ▇▇▇▇▇▇
Assistant Vice President
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Assistant Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
PNC BANK, KENTUCKY, INC.
By:
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
-114-
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ BRANCH
By:
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
CHASE BANK OF TEXAS
By:
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
Address for Notices:
▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
-115-
▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, N.A.
By:
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
BANK HAPOALIM
By:
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
By:
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
Address for Notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
-116-
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MICHIGAN NATIONAL BANK
By:
----------------------------------
▇▇▇▇ ▇▇▇▇▇
Vice President
Address for Notices:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇, Mail Code 10-36
Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
HIBERNIA BANK
By:
----------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
-------------------------------
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
-117-
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SCHEDULE 1
----------
APPLICABLE MARGIN
-----------------
=============================================================================================================================
Ratings: S&P and ▇▇▇▇▇'▇ At Least BBB- and At Least BBB- If Neither of the Preceding
Baa3 or Baa3* Classifications Applies
-----------------------------------------------------------------------------------------------------------------------------
Applicable Margin 0.50% 0.75% 0.85%
=============================================================================================================================
The Applicable Margin for each Rate Option shall be the applicable percentage
per annum set forth above, which is based on the Company's long term unsecured
debt ratings, changing on the first Business Day following the date on which
such ratings change is announced by S&P or ▇▇▇▇▇'▇, as the case may be, for all
Eurodollar Interest Periods, whether then-outstanding or commencing thereafter,
and for all Discount Periods commencing more than two (2) Business Days after
the date of such change. Each rating classification sets forth the S&P rating
and the ▇▇▇▇▇'▇ rating, respectively. For the column noted with an asterisk (*),
if on any day the ratings of S&P and ▇▇▇▇▇'▇ are not both at the required level,
the higher rating will be the applicable rating for purposes of determining the
classification unless the lower rating is more than one rating category below
the minimum rating for such rating agency under such column, in which event the
higher rating will be disregarded, the lower rating will be deemed to have been
one rating category higher than the actual reported lower rating, and the column
applicable using such deemed lower rating shall apply. If for any reason the
Company's unsecured long term debt is not rated by both S&P and ▇▇▇▇▇'▇, the
column headed "If Neither of the Preceding Classifications Applies" shall be
used.
-118-
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SCHEDULE 2
FACILITY FEE RATE
=============================================================================================================================
Ratings: S&P and ▇▇▇▇▇'▇ At Least BBB- and At Least BBB- If Neither of the Preceding
Baa3 or Baa3* Classifications Applies
-----------------------------------------------------------------------------------------------------------------------------
Facility Fee Rate .15% .20% .25%
=============================================================================================================================
The Facility Fee Rate for this Facility shall be the applicable percentage per
annum set forth above, which is based on the Company's long term unsecured debt
ratings, changing on the first Business Day following the date on which such
ratings change is announced by S&P or ▇▇▇▇▇'▇, as the case may be. Each rating
classification sets forth the S&P rating and the ▇▇▇▇▇'▇ rating, respectively.
For the column noted with an asterisk (*), if on any day the ratings of S&P and
▇▇▇▇▇'▇ are not both at the required level, the higher rating will be the
applicable rating for purposes of determining the classification unless the
lower rating is more than one rating category below the minimum rating for such
rating agency under such column, in which event the higher rating will be
disregarded, the lower rating will be deemed to have been one rating category
higher than the actual reported lower rating, and another column will be
applicable using such deemed lower rating. If for any reason the Company's
unsecured long term debt is not rated by both S&P and ▇▇▇▇▇'▇, the column headed
"If Neither of the Preceding Classifications Applies" shall be used.
-119-
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EXHIBIT A
LIST OF APPROVED INVESTORS
-120-
127
EXHIBIT B
FORM OF BORROWING BASE CERTIFICATE
Dated as of:
---------------
Reference is made to that certain Fourth Amended and Restated Revolving
Credit Agreement among the Company, The First National Bank of Chicago,
individually and as administrative agent, and the lenders named therein, dated
as of July ___, 1998 (the "Credit Agreement"). Capitalized terms not otherwise
defined herein are used with the same meanings as in the Credit Agreement.
1. BORROWING BASE:
Eligible Mortgage Loans
(Mortgage Collateral Value):
Eligible Delivered Mortgages $
--------------------
Eligible AP Mortgages $
--------------------
Total Pledged Items $
--------------------
Percentage Factor 98%
Eligible Pledged Securities
(MBS Value) $
--------------------
Percentage Factor 99%
(i) Borrowing Base from
Mortgage Loans $
--------------------
(ii) Borrowing Base from
Pledged Securities $
--------------------
(A) BORROWING BASE FROM
ALL PLEDGED ITEMS $
--------------------
Eligible Repurchased Agency
Loans and Receivables $
--------------------
Percentage Factor 90%
-121-
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(B) BORROWING BASE FROM
REPURCHASED AGENCY LOANS
AND RECEIVABLES $
--------------------
Eligible Servicing Sale Receivables $
--------------------
Percentage Factor 75%
(C) BORROWING BASE FROM
ELIGIBLE SERVICING SALE RECEIVABLES $
--------------------
(D) BALANCE IN SETTLEMENT ACCOUNT $
--------------------
(E) CASH AND CASH EQUIVALENTS $
--------------------
SUM OF (A) - (E) ABOVE $
--------------------
Reconciling Items:
Timing Difference $
--------------------
Loan Detail Difference $
--------------------
BORROWING BASE $
--------------------
Credit Requirement:
Facility Advances $
--------------------
Approved Secured Rate Hedging Obligations $
--------------------
Outstanding CPNs $
--------------------
Approved GNMA Letter of Credit Obligations $
--------------------
SUM OF CREDIT REQUIREMENT $
--------------------
EXCESS OF AGGREGATE BORROWING
BASE OVER CREDIT REQUIREMENT $
--------------------
2. CERTIFICATION: To the best of the knowledge and belief
(after reasonable investigation) of the officer of the Company executing
this Certificate, the Company hereby certifies to The First National
Bank of Chicago for the benefit of lenders under the Credit Agreement
that: (a) the above information is, and the computations are accurate
and complete and in accordance with the requirements of the Credit
Agreement, and (b) as of the date hereof, (1) all representations and
warranties of the Company set forth in the Credit Agreement are accurate
and complete, (2) there does not exist an Event of Default under the
Credit Agreement, and (3) the Company has given written notice to The
First National Bank of Chicago of any Default which now exists under the
Credit Agreement.
-122-
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IN WITNESS WHEREOF, the Company has caused this Borrowing Base
Certificate to be executed and delivered by its duly authorized officer
this ___ day of __________, 199_.
SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
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EXHIBIT C0
COMMITMENTS AND COMMITMENT PERCENTAGES
=============================================================================================================================
Commitment Commitment Adj. Commit.
Bank Name Amount Percentage Percentage
-----------------------------------------------------------------------------------------------------------------------------
First Chicago SWING $40,000,000 5.0000000000%
-----------------------------------------------------------------------------------------------------------------------------
1. First Chicago $17,000,000 2.1250000000% 2.2368421053%
-----------------------------------------------------------------------------------------------------------------------------
2. Bank of America $48,000,000 6.0000000000% 6.3157894737%
-----------------------------------------------------------------------------------------------------------------------------
3. Bank of New York $48,000,000 6.0000000000% 6.3157894737%
-----------------------------------------------------------------------------------------------------------------------------
4. Chase Bank of Texas $48,000,000 6.0000000000% 6.3157894737%
-----------------------------------------------------------------------------------------------------------------------------
5. Comerica $48,000,000 6.0000000000% 6.3157894737%
-----------------------------------------------------------------------------------------------------------------------------
6. Guaranty Federal $48,000,000 6.0000000000% 6.3157894737%
-----------------------------------------------------------------------------------------------------------------------------
7. National City $48,000,000 6.0000000000% 6.3157894737%
-----------------------------------------------------------------------------------------------------------------------------
8. NationsBank $48,000,000 6.0000000000% 6.3157894737%
-----------------------------------------------------------------------------------------------------------------------------
9. PNC Bank $48,000,000 6.0000000000% 6.3157894737%
-----------------------------------------------------------------------------------------------------------------------------
10. Credit Lyonnais $45,000,000 5.▇▇▇▇▇▇▇▇▇▇% 5.9210528316%
-----------------------------------------------------------------------------------------------------------------------------
11. Fleet Bank $45,000,000 5.▇▇▇▇▇▇▇▇▇▇% 5.9210528316%
-----------------------------------------------------------------------------------------------------------------------------
12. West LB $40,000,000 5.0000000000% 5.▇▇▇▇▇▇▇▇▇▇%
-----------------------------------------------------------------------------------------------------------------------------
13. First Union $34,000,000 4.2500000000% 4.▇▇▇▇▇▇▇▇▇▇%
-----------------------------------------------------------------------------------------------------------------------------
14. ▇▇▇▇▇▇ Trust $30,000,000 3.7500000000% 3.9473684211%
-----------------------------------------------------------------------------------------------------------------------------
15. Bank Hapoalim $25,000,000 3.1250000000% 3.2894736842%
-----------------------------------------------------------------------------------------------------------------------------
16. Bankers Trust $25,000,000 3.1250000000% 3.2894736842%
-----------------------------------------------------------------------------------------------------------------------------
17. Marine Midland $25,000,000 3.1250000000% 3.2894736842%
-----------------------------------------------------------------------------------------------------------------------------
18. CIBC $20,000,000 2.5000000000% 2.6315789474%
-----------------------------------------------------------------------------------------------------------------------------
19. Hibernia National $20,000,000 2.5000000000% 2.6315789474%
-----------------------------------------------------------------------------------------------------------------------------
20. Union Bank of CA $20,000,000 2.5000000000% 2.6315789474%
-----------------------------------------------------------------------------------------------------------------------------
21. Banque Paribas $15,000,000 1.8750000000% 1.9736842105%
-----------------------------------------------------------------------------------------------------------------------------
22. Michigan National $15,000,000 1.8750000000% 1.9736842105%
-----------------------------------------------------------------------------------------------------------------------------
Total $800,000,000 100.0000000000% 100.0000000000%
=============================================================================================================================
-124-
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EXHIBIT D
SECURITY AGREEMENT
-125-
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EXHIBIT E-1
FORM OF AMENDED AND RESTATED NOTE
(FOR LOANS OTHER THAN DISCOUNT LOANS AND BID LOANS)
Date of Note: July ___, 1998
FOR VALUE RECEIVED, the undersigned (the "Maker") does hereby covenant
and promise to pay to the order of ____________________ (the "Lender") or its
successors or assigns (collectively, the "Payee"), on the Termination Date, the
aggregate unpaid principal amount of all Loans made by Lender pursuant to the
Credit Agreement other than Discount Loans and Bid Loans held from time to time
by the Lender (the "Principal Amount") and to pay interest on the unpaid
Principal Amount at the applicable interest rate or rates per annum determined
in accordance with the terms of the Credit Agreement. All payments of principal
of and interest on this Note shall be made in legal tender of the United States.
All payments of principal of and interest on this Note shall be made in
immediately available funds at the principal office of The First National Bank
of Chicago (the "Agent"), ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
Interest on this Note shall be computed on the basis of actual number of
days elapsed in a 360 day year.
This Note is one of the Notes referred to in the Fourth Amended and
Restated Revolving Credit Agreement, bearing even date herewith, among the
Company, the Lender and the other lenders listed on the signature pages thereof
and the Agent (as the same may be amended and supplemented from time to time,
the "Credit Agreement") and is entitled to the benefits thereof. Reference is
made to the Credit Agreement for (i) provisions for the prepayment hereof, (ii)
acceleration of the maturity hereof, (iii) the obligation of the Maker to pay
certain expenses (including attorney's fees) incurred in the enforcement thereof
and hereof and (iv) a description of the security for this Note. Capitalized
terms used herein without definition have the respective meanings ascribed to
them in the Credit Agreement.
All Loans made by the Lender and all repayments of the principal thereof
shall be recorded by the Lender in its books and records; provided, however,
that the Lender's failure to so record or any error in such recording shall not
affect the Maker's liability hereunder or under the Credit Agreement. Upon any
transfer hereof, the Lender shall endorse on the schedule attached hereto or on
a schedule accompanying the transfer of this Note, the unpaid principal balance
of this Note.
-126-
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If an Event of Default shall occur under the Credit Agreement, the
unpaid Principal Amount hereunder shall become due and payable (i) automatically
in the case of any of the Events of Default specified in Paragraph (k) of
Section 10.1 of the Credit Agreement, or (ii) at the option of the Required
Lenders with respect to all other Events of Default and shall bear interest at
the rate provided for in Section 2.7 of the Credit Agreement from and after such
date. The foregoing provision shall not be construed as a waiver by the Payee of
its right to pursue any other remedies available to it under this Note, the
Credit Agreement or any other instrument evidencing or securing the Principal
Amount.
This Note may not be changed orally but only by an agreement in writing,
signed by the party against whom enforcement of any waiver, change, modification
or discharge is sought. Written notices required to be given hereunder shall be
given as provided in the Credit Agreement to the Payee and Maker at the
respective addresses specified or provided for therein.
Should the indebtedness evidenced by this Note or any part thereof be
collected at law or in equity, or in bankruptcy, receivership or any other court
proceeding (whether at the trial or appellate level), or should this Note be
placed in the hands of attorneys for collection upon default, the Maker agrees
to pay, in addition to the principal, interest and other sums due and payable
hereon, all costs of collecting or attempting to collect on this Note, including
reasonable attorneys' fees and expenses.
Anything herein to the contrary notwithstanding, the obligations of the
Maker under this Note shall be subject to the limitation that payments of
interest shall not be required to the extent that receipt of any such payment by
the Payee would be contrary to provisions of law applicable to Payee which limit
the maximum rate of interest that may be charged or collected by Payee.
The undersigned and all endorsers, guarantors and sureties of this Note
and all other persons liable or to become liable on this Note severally waive
presentment for payment, demand, notice of demand and of dishonor and nonpayment
of this Note, notice of intention to accelerate the maturity of this Note,
notice of acceleration of the maturity of this Note, protest and notice of
protest, diligence in collecting, and the bringing of suit against any other
party, and agree to all renewals, extensions, modifications, partial payments,
releases or substitutions of security, in whole or in part, with or without
notice, before or after maturity.
Notwithstanding the foregoing paragraphs and all other provisions of
this Note and the Credit Agreement, none of the
-127-
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terms and provisions of this Note or the Credit Agreement shall ever be
construed to create a contract to pay to the Payee, for the use, forbearance or
detention of money, interest in excess of the maximum amount of interest
permitted to be charged by the Payee to the undersigned under applicable state
or federal law from time to time in effect, and the undersigned shall never be
required to pay interest in excess of such maximum amount. If, for any reason
interest is paid hereon in excess of such maximum amount, then promptly upon any
determination that such excess has been paid the Payee will, at its option,
either refund such excess to the undersigned or apply such excess to the
principal owing hereunder.
This Note is to be construed and enforced in accordance with the laws of
the State of Illinois.
IN WITNESS WHEREOF, Maker has executed and delivered this Note on the
day and year first above written.
SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Attn: Vice President/Treasury
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
-128-
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PAYMENTS OF PRINCIPAL
Unpaid
Principal Notation
Date Balance Made by
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EXHIBIT E-2
FORM OF AMENDED AND RESTATED DISCOUNT NOTE
Date of Note: July ___, 1998
FOR VALUE RECEIVED, the undersigned (the "Maker") does hereby covenant
and promise to pay to the order of ____________________ (the "Lender") or its
successors or assigns (collectively, the "Payee") the unpaid principal amount of
each Discount Loan made and retained by the Lender (if the holder hereof is the
Balance Bank initially making such discount Loan) or, in all other cases, made
by a Balance Bank and purchased by the holder hereof (or its predecessor in
interest) under the Credit Agreement (the "Principal Amount"), on the last day
of the Discount Loan Period applicable to each such Discount Loan with a final
payment of any such amounts not previously due on the Termination Date.
Each Discount Loan evidenced by this Note was funded to the Company at a
discount as provided in the Credit Agreement; accordingly, the unpaid principal
amount of each Discount Loan evidenced by this Note will bear no interest
hereunder until the last day of the Discount Loan Period applicable thereto, and
if such unpaid principal amount of such Discount Loan is not paid in full on
such day, such unpaid principal amount shall from and after such day bear
interest at the rate of interest set forth in Section 2.7 of the Credit
Agreement. All payments of principal of and interest, if any, on this Note shall
be made in legal tender of the United States. All payments of principal of and
interest on this Note shall be made in immediately available funds at the
principal office of The First National Bank of Chicago (the "Agent"), ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
Interest on this Note, if any, shall accrue, shall be computed on the
basis of actual number of days elapsed in a 360 day year.
This Note is one of the Discount Notes referred to in the Fourth Amended
and Restated Revolving Credit Agreement, bearing even date herewith, among the
Company, the Lender and the other lenders listed on the signature pages thereof
and the Agent (as the same may be amended and supplemented from time to time,
the "Credit Agreement") and is entitled to the benefits thereof. Reference is
made to the Credit Agreement for (i) provisions for the prepayment hereof, (ii)
acceleration of the maturity hereof, (iii) the obligation of the Maker to pay
certain expenses (including attorney's fees) incurred in the enforcement thereof
and hereof and (iv) a description of the security for this Note. Capitalized
terms used herein without definition have the respective meanings ascribed to
them in the Credit Agreement.
-130-
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All Discount Loans made by the Lender and all repayments of the
principal thereof shall be recorded by the Lender in its books and records;
provided, however, that the Lender's failure to so record or any error in such
recording shall not affect the Maker's liability hereunder or under the Credit
Agreement. Upon any transfer hereof, the Lender shall endorse on the schedule
attached hereto or on a schedule accompanying the transfer of this Note, the
unpaid principal balance of this Note.
If an Event of Default shall occur under the Credit Agreement, the
unpaid Principal Amount hereunder shall become due and payable (i) automatically
in the case of any of the Events of Default specified in Paragraph (k) of
Section 10.1 of the Credit Agreement, or (ii) at the option of the Required
Lenders with respect to all other Events of Default and shall bear interest at
the rate provided for in Section 2.7 of the Credit Agreement from and after such
date. The foregoing provision shall not be construed as a waiver by the Payee of
its right to pursue any other remedies available to it under this Note, the
Credit Agreement or any other instrument evidencing or securing the Principal
Amount.
This Note may not be changed orally but only by an agreement in writing,
signed by the party against whom enforcement of any waiver, change, modification
or discharge is sought. Written notices required to be given hereunder shall be
given as provided in the Credit Agreement to the Payee and Maker at the
respective addresses specified or provided for therein.
Should the indebtedness evidenced by this Note or any part thereof be
collected at law or in equity, or in bankruptcy, receivership or any other court
proceeding (whether at the trial or appellate level), or should this Note be
placed in the hands of attorneys for collection upon default, the Maker agrees
to pay, in addition to the principal, interest and other sums due and payable
hereon, all costs of collecting or attempting to collect on this Note, including
reasonable attorneys' fees and expenses.
Anything herein to the contrary notwithstanding, the obligations of the
Maker under this Note shall be subject to the limitation that payments of
interest shall not be required to the extent that receipt of any such payment by
the Payee would be contrary to provisions of law applicable to Payee which limit
the maximum rate of interest that may be charged or collected by Payee.
The undersigned and all endorsers, guarantors and sureties of this Note
and all other persons liable or to become liable on this Note severally waive
presentment for payment, demand, notice of demand and of dishonor and nonpayment
of this Note, notice of intention to accelerate the maturity of this Note,
notice of
-131-
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acceleration of the maturity of this Note, protest and notice of protest,
diligence in collecting, and the bringing of suit against any other party, and
agree to all renewals, extensions, modifications, partial payments, releases or
substitutions of security, in whole or in part, with or without notice, before
or after maturity.
Notwithstanding the foregoing paragraphs and all other provisions of
this Note and the Credit Agreement, none of the terms and provisions of this
Note or the Credit Agreement shall ever be construed to create a contract to pay
to the Payee, for the use, forbearance or detention of money, interest in excess
of the maximum amount of interest permitted to be charged by the Payee to the
undersigned under applicable state or federal law from time to time in effect,
and the undersigned shall never be required to pay interest in excess of such
maximum amount. If, for any reason interest is paid hereon in excess of such
maximum amount, then promptly upon any determination that such excess has been
paid the Payee will, at its option, either refund such excess to the undersigned
or apply such excess to the principal owing hereunder.
This Note is to be construed and enforced in accordance with the laws of
the State of Illinois.
IN WITNESS WHEREOF, Maker has executed and delivered this Note on the
day and year first above written.
SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Attn: Vice President/Treasury
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
-132-
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PAYMENTS OF PRINCIPAL
Unpaid
Principal Notation
Date Balance Made by
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EXHIBIT F
METHOD OF DETERMINING WEIGHTED AVERAGE PURCHASE PRICES
STEP ONE
Group Mortgage Loans or Securities into the following categories (or such other
categories as are agreed upon among the Company, the Agent and the Collateral
Agent):
GNMA 15 FNMA/FHLMC 15 Private
GNMA 30 FNMA/FHLMC 30 Investors
GNMA ARM FNMA/FHLMC ARM
FNMA/FHLMC Balloon
Non-Conforming
Jumbo
STEP TWO - WEEKLY
Allocate Approved Investor Commitments (other than those allocated to repos)
under which the applicable Mortgage Loans or Securities could be settled to each
mortgage-type category on a FIFO basis. The dollar amount of Approved Investor
Commitments allocated should cover the maximum amount of Mortgage Loans or
Securities for which the Company expects to borrow in the following week. If the
mortgage balances exceed the allocated Approved Investor Commitments on any day,
a re-allocation should be calculated.
After allocating Approved Investor Commitments, compute the weighted average
price of the Approved Investor Commitments. This is the price to be allocated to
Securities or the unpaid principal balance of Mortgage Loans, as applicable, in
each category for any borrowing in the next week. Approved Investor Commitments
may not be allocated to Mortgage Loans unless the related coupons net of
servicing and guaranty fees equal or exceed the contract coupon requirement.
AT THE REQUEST OF THE CREDIT AGENT, THE FOLLOWING FURTHER STEPS SHALL BE TAKEN
WHEN COMPUTING THE WEIGHTED AVERAGE PURCHASE PRICES.
STEP THREE - ▇▇▇▇ TO MARKET FORWARD PURCHASE CONTRACTS
Calculate the value of all unallocated mandatory delivery forward purchase
contracts. Compute a net negative or positive amount to be added to or
subtracted from the aggregate market value of all collateral. Use the following
method:
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AGENCY SECURiTY CONTRACT
Find the Telerate (or other recognized electronic service) purchase (offer)
price for same coupon, type, and delivery date as stated on the Company's
forward purchase contract. Subtract the Company's contract price from the
Telerate price and multiply by the dollar amount of the contract. A positive
number is a deduction, and a negative number is an addition to aggregate market
value.
OTHER CONTRACTS
Unallocated Whole Loan Contracts:
Use the above method but use the weighted average posted prices of two
nationally recognized private mortgage conduits mutually acceptable to the
Collateral Agent and the Company for similar mortgages, coupon (net of servicing
fees) and delivery date.
Private Label Securities Forward Purchase Contracts:
Use the same method but the current contract price should be based on quotes of
two nationally recognized dealers in private label mortgage-backed securities
for the same forward delivery date as the contract.
If no Telerate price is posted for a particular agency or whole loan coupon, the
posted price associated with the nearest lower coupon should be used. If the
contract coupon is below the lowest Telerate coupon then the price should be
based on quotes of two nationally recognized dealers in mortgage-backed
securities for the same forward delivery date as the contract.
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EXHIBIT G
FORM OF BID LOAN NOTICE
TO: The First National Bank of Chicago, as Agent
FROM: Source One Mortgage Services Corporation, and
, as a Bid Lender
---------------
Reference is made to that certain Fourth Amended and Restated Revolving
Credit Agreement (the "Agreement") dated July ___, 1998 by and among Source One
Mortgage Services Corporation (the "Company"), the Agent and certain other
lenders. All capitalized terms not otherwise defined in this notice shall have
the meaning given to them in the Agreement.
The Company and the Bid Lender hereby inform you that the Company has
accepted a bid from the Bid Lender for one or more Bid Loans having the
following terms:
Principal Amount of Loan: $
---------------
Rate of Interest: %
---------------
Advance Date: , 199
--------------- -
Interest Period (1 to 45 days):
---------------
Proposed Due Date*: ,
--------------- ----
[BID LENDER] SOURCE ONE MORTGAGE SERVICES
CORPORATION
By: By:
----------------------- -----------------------
Its: Its:
---------------------- ----------------------
* If other than Termination Date.
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EXHIBIT H
FORM OF NEW/MODIFIED COMMITMENT SUPPLEMENT
This New/Modified Commitment Supplement ("Supplement") is made as of
_________________, 199_ (the "Effective Date") by and among Source One Mortgage
Services Corporation (the "Company"), The First National Bank of Chicago, in its
capacity as agent ("Agent"), and _______________________ ("New Lender"), [and
____________________________ ("Assignor")][BRACKETED LANGUAGE IS APPLICABLE IF
AN EXISTING LENDER IS ASSIGNING A PORTION OF ITS COMMITMENT].
The Company, [Assignor] and Agent are parties to a certain Fourth
Amended and Restated Revolving Credit Agreement dated as of July ___, 1998 (the
"Credit Agreement") pursuant to which Agent and certain other Lenders agreed to
provide a revolving credit facility to the Company on the terms and conditions
set forth in the Credit Agreement. Any capitalized term not expressly defined
herein shall have the meaning ascribed to such term in the Credit Agreement.
The New Lender has agreed to become a Lender under the Credit Agreement
with a Commitment in the amount of ______________________ Dollars
($______________). [The Company and Assignor have agreed to reduce Assignor's
Commitment under the Credit Agreement to ____________________ Dollars
($_____________).]
The parties hereto desire to amend the Credit Agreement pursuant to
Section 2.1(b) thereof to reflect the New Lender's Commitment [and Assignor's
reduced Commitment].
NOW, THEREFORE, the parties hereto agree as follows:
1. From and after the Effective Date, the New Lender shall be considered
a "Lender" under the Credit Agreement and the Company and Agent hereby consent
to the addition of the New Lender.
2. From and after the Effective Date, the New Lender's Commitment under
the Credit Agreement shall be ________________________ Dollars ($______________)
or such other amount as may be stated in any subsequent modification to the
Credit Agreement. The Company shall execute and deliver to the New Lender
simultaneously herewith Notes in the form attached as Exhibits E-1 and E-2 to
the Credit Agreement. The Aggregate Commitment of the Lenders under the Credit
Agreement, after giving effect to such Commitment by the New Lender [and the
reduced Commitment of Assignor described in the following Section] shall be
$_________________.
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[3. From and after the Effective Date, Assignor's Commitment
under the Credit Agreement shall be
_________________________________ Dollars ($______________) or
such other amount as may be stated in any subsequent modification
to the Credit Agreement.]
[4. The New Lender, promptly after receipt of its Notes, agrees to
purchase from Assignor, and Assignor hereby agrees to sell to the New Lender,
without recourse, a portion of the outstanding Loans made by Assignor equal to
_________ percent (__%) of the outstanding principal balance of each such Loan.
Such purchase shall be effected by wire transfer of immediately available funds
to Assignor on the Effective Date. The Company each irrevocably and
unconditionally agrees that from and after the Effective Date the portion of
Loans so funded by Assignor shall be evidenced by and shall be deemed to be
Loans made by the New Lender under the New Lender's Note as of the Effective
Date and shall be treated as such for purposes of calculating interest and fees
accruing from and after the Effective Date under the Credit Agreement. All
interest and fees accruing on such portion of the Loans prior to the Effective
Date shall be paid when due to Assignor.]
5. For purposes of Section 12.2 of the Credit Agreement (Notices), the
New Lender's address and telecopy number shall be as specified below its
signature in this Supplement.
6. All references in the Credit Agreement and the other Credit Documents
shall be deemed to refer to the Credit Agreement as modified by this Supplement.
Pursuant to Section 2.1(b) of the Credit Agreement, Exhibit C to the Credit
Agreement is hereby replaced by Exhibit C to this Supplement.
7. In all other respects, the Credit Agreement is and remains unmodified
and in full force and effect and is hereby ratified and confirmed.
8. This Supplement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Supplement by signing any such counterpart.
IN WITNESS WHEREOF, the Company, the New Lender, [Assignor] and Agent
have executed this Supplement as of the date first above written.
COMPANY: SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:
-----------------------------
Name:
---------------------------
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Title:
-------------------------------------
NEW LENDER:
-------------------------------------------
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Address for Notices:
-------------------------------------------
-------------------------------------------
Attn:
--------------------------------------
Telephone No.:
-----------------------------
Facsimile No.:
-----------------------------
AGENT: THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
[ASSIGNOR: -------------------------------------------
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
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EXHIBIT I
FORM OF NON-LENDER BALANCE BANK SUPPLEMENT
THIS NON-LENDER BALANCE SUPPLEMENT (the "Supplement") is entered into as
of _________________, 199_, by and among SOURCE ONE MORTGAGE SERVICES
CORPORATION, a Delaware corporation (the "Company"), THE FIRST NATIONAL BANK OF
CHICAGO, a national banking association, as administrative agent for the Lenders
("Agent"), and ____________________________, a _____________________ (the
"Bank"), an Affiliate of one of the Lenders.
A. The Company and Agent are parties to that certain Fourth Amended and
Restated Revolving Credit Agreement dated as of July ___, 1998 (the "Credit
Agreement") pursuant to which Agent and certain other Lenders agreed to provide
a revolving credit facility to the Company on the terms and conditions set forth
in the Credit Agreement. Any capitalized term not expressly defined herein shall
have the meaning ascribed to such term in the Credit Agreement.
B. The Bank has agreed to become a Non-Lender Balance Bank under the
Credit Agreement and to make Discount Advances and to sell its interest in such
Discount Advances to the Lenders in accordance with Section 2.4 of the Credit
Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. The Bank hereby agrees to become and is hereby designated as a
"Non-Lender Balance Bank" under the Credit Agreement, but is not and shall not
be considered a "Lender" under the Credit Agreement. The Bank hereby agrees to
(i) enter into a Balance Bank Agreement with the Company, (ii) make Discount
Advances to the Company, (ii) sell its interest in such Discount Advances to the
Lenders, and (iii) otherwise accede to all obligations of a Non-Lender Balance
Bank under Section 2.4 of the Credit Agreement. The Bank shall be entitled to
all rights of a Non-Lender Balance Bank under the Credit Agreement.
2. Neither the Company nor the Agent shall consent to any amendment of
the provisions of Section 2.4 of the Credit Agreement affecting the Bank without
the prior written consent of the Bank.
3. The Bank's address for any notices to be sent in connection with the
Credit Agreement shall be as specified below its signature in this Supplement.
4. This Supplement may be executed in any number of counterparts, all of
which taken together shall constitute one
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agreement, and any of the parties hereto may execute this
Supplement by signing any such counterpart.
IN WITNESS WHEREOF, the Company, Agent and the Bank have executed this
Supplement as of the date first above written.
COMPANY: SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
AGENT: THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
BANK: -------------------------------------------
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Address for Notices:
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Attn:
--------------------------------------
Telephone No.:
-----------------------------
Facsimile No.:
-----------------------------
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EXHIBIT J
FORM OF AP NOTICE
SOURCE ONE MORTGAGE SERVICES CORPORATION (the "Company") pursuant to
that certain Fourth Amended and Restated Revolving Credit Agreement, dated as of
July ___, 1998 (as amended, extended and replaced from time to time,
collectively, the "Credit Agreement") among the Company, The First National Bank
of Chicago, individually and as agent (the "Credit Agent"), and certain other
lenders, and (ii) that certain Fourth Amended and Restated Security and
Collateral Agency Agreement dated as of July ___, 1998 by and among the Company,
the Credit Agent and National City Bank of Kentucky (the "Collateral Agent") as
collateral agent for the Secured Parties (as defined in the Credit Agreement),
for new value this day received, and as security for the payment of any and all
indebtedness and obligations of the Company under the Credit Agreement, hereby
creates and grants to the Collateral Agent for the benefit of the Secured
Parties a security interest in and to the mortgage loans identified as "AP
Mortgages" on the Company's "Collateral Transmittals" (as such term is defined
in the Credit Agreement) on the date indicated below which provide the
information concerning the AP Mortgages required by the Credit Agreement.
SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:
----------------------------------------
Dated: , 199 .
------------------ -
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EXHIBIT K
FORM OF OPINION LETTER
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EXHIBIT L
MATERIAL LITIGATION NOT REFERENCED IN ANNUAL/QUARTERLY REPORTS
NONE.
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EXHIBIT M
FORM OF TRANSITION MEMORANDUM
This TRANSITION MEMORANDUM is dated as of July 10, 1998, by and between
Source One Mortgage Services Corporation, a Delaware corporation (the "Company")
and The First National Bank of Chicago, as agent ("Agent") for the Existing
Lenders and for the Continuing Lenders (as such terms are hereinafter defined).
The Company has entered into a certain Fourth Amended and Restated
Revolving Credit Agreement dated as of July 10, 1998 (the "Credit Agreement")
with the lenders named therein and the Agent. The lenders under the Credit
Agreement are hereinafter referred to collectively as the "Continuing Lenders".
Pursuant to the Credit Agreement the Continuing Lenders will agree to extend
credit to the Company through a revolving credit facility (the "New Facility")
on the terms and subject to the conditions set forth therein. Capitalized terms
not otherwise defined herein are used with the same meanings as in the Credit
Agreement.
The New Facility amends and restates the existing revolving credit
facility provided to the Company and certain Subsidiaries of the Company (the
"Existing Facility") made available pursuant to that certain Third Amended and
Restated Revolving Credit Agreement dated as of July 25, 1997 (as amended, the
"Existing Agreement"), by and among the Company, such Subsidiaries, the Agent
and the lenders participating therein (each an "Existing Lender").
Certain of the Existing Lenders are not Continuing Lenders under the New
Facility (the "Exiting Lenders"). In addition, pursuant to the Credit Agreement
(i) certain of the Existing Lenders will have a percentage of the Aggregate
Commitment under the New Facility that differs from their percentage under the
Existing Facility, and (ii) certain Continuing Lenders joining the New Facility
are not Existing Lenders.
The purpose of this Transition Memorandum is to set forth an
understanding of certain matters concerning the transition by the Company from
the Existing Facility to the New Facility, such matters including, without
limitation, (i) the payment of all the outstanding Loans (as defined in the
Existing Agreement and hereinafter referred to as the "Existing Loans") to the
Exiting Lenders, (ii) the changes necessary in the percentage of the Advances
under the Credit Agreement held by the Continuing Lenders, and (iii) the initial
fundings of Advances by the Continuing Lenders which are not Existing Lenders.
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1. Summary of Existing Loans. The initial Advance under the New Facility
shall be used to pay any Existing Loans held by the Exiting Lenders. Prior to
the date the conditions precedent set forth in Article V of the Credit Agreement
are satisfied (such date being the "Effective Date"), the Agent shall identify
the Existing Loans payable by the Company under the Existing Agreements to each
Exiting Lender and advise the Continuing Lenders of such amount. The aggregate
outstanding balance of the Existing Loans held by the Exiting Lenders on the
Effective Date shall be hereinafter referred to as the "Exiting Lender Pay-Off
Amount".
2. Initial Advance. Subject to the terms and conditions set forth in the
Credit Agreement, including, without limitation, satisfaction of the conditions
precedent set forth in Article V therein, the Continuing Lenders will make an
initial Advance to the Company on the Effective Date in an amount equal to the
Exiting Lender Pay-Off Amount. The initial Advance shall be based upon an
Advance Notice and shall consist of such types of Advances specified in such
Advance Notice. Each Continuing Lender will agree to make its share of such
Advance available to the Agent at such time and in such amount as provided in
the Credit Agreement as modified by Paragraphs 3 and 4 below.
3. Conversion of Loans. With respect to each Continuing Lender, to the
extent that such lender has an Existing Loan outstanding on the date of the
initial Advance, such Continuing Lender shall only be required to fund to the
Agent an amount (the "Net Funding Amount") equal to the excess, if any, of that
amount by which the aggregate amount of its Loans to be outstanding under the
New Facility on the Effective Date exceeds the aggregate amount of its Existing
Loans (excluding any accrued and unpaid interest, Fees and other charges or
expenses thereon). After making its Net Funding Amount available to the Agent,
such Continuing Lender shall be deemed to have made available all of its Loans
under the New Facility and shall be deemed to have converted its Existing Loans
(excluding any accrued and unpaid interest and other charges or expenses
thereon). To the extent that a Continuing Lender has Existing Loans in an amount
which exceeds the amount of its Loans to be outstanding under the New Facility
on the Effective Date, such Lender shall be deemed to have made available all of
its Loans under the New Facility required to be made on the Effective Date and
shall be repaid a portion of its Existing Loans equal to such excess amount, if
any, as provided in Paragraph 4. All Existing Loans held by Continuing Lenders
which are outstanding on the Effective Date and not repaid shall continue as the
same type of Loan under the New Facility until repaid or converted in accordance
with the terms of the Credit Agreement; provided that from and after the
Effective Date such Existing Loans shall bear interest at the interest rates
applicable under the Credit Agreement rather than the rates applicable under the
Existing Agreement.
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4. Percentage Reconciliation. If any Continuing Lender holds Existing
Loans (other than Bid Loans) on the Effective Date which are in excess of such
Continuing Lender's Adjusted Commitment Percentage of the Loans (other than Bid
Loans and Swingline Loans) to be outstanding under the New Facility (an
"Overfunded Lender") on the Effective Date, such Overfunded Lender shall be
repaid from the additional funding under the following sentence an amount of
Existing Loans sufficient to eliminate such excess. Each Continuing Lender
(including any Continuing Lender which is not an Existing Lender) that holds
Existing Loans in an amount less than such Continuing Lender's Adjusted
Commitment Percentage of the Loans (other than Bid Loans and Swingline Loans) to
be outstanding under the New Facility on the Effective Date (an "Underfunded
Lender") shall make an additional funding as a Federal Funds Loan in connection
with the initial Advance in an amount sufficient to eliminate such shortfall
(such additional funding being collectively referred to as "Percentage
Reconciliation Funding Amount").
5. Distribution of Initial Advance. After each Continuing Lender has
funded its Loan (or so much of such Loan as may be required pursuant to
Paragraphs 3 and 4 above), the Agent shall (i) distribute to each Exiting Lender
its Exiting Lender Pay-Off Amount in accordance with the Existing Agreement and
(ii) distribute to each Overfunded Lender its share of the aggregate Percentage
Reconciliation Funding Amount.
6. Payment of Accrued Interest and Fees; Indemnification. On the
Effective Date the Company shall pay to the Agent for distribution to each
Exiting Lender all accrued interest and Fees owing to such Lender for its
Existing Loans. To the extent of its obligations under the Existing Agreement,
the Company shall pay each Exiting Lender for all reasonable losses, costs and
expenses incurred by such Exiting Lender in connection with any prepayment of
its Existing Loans in accordance with the terms of the Existing Agreement.
7. Termination of Commitments under Existing Facility. On the Effective
Date the commitments of the Lenders (as defined in the Existing Agreement) under
the Existing Facility shall terminate and the Lenders therein shall have no
further obligation to make any further Loans (as defined in the Existing
Agreement) under the Existing Facility.
8. No Modification. It is understood and agreed to by the parties hereto
that, except as expressly set forth above, nothing in this memorandum shall
modify or amend the covenants, terms and agreements set forth in the Existing
Agreement or the documents related thereto or in the Credit Agreement and the
other Credit Documents, or discharge the obligations of (a) the Company, the
Existing Lenders and the Agent under the Existing Agreement, and
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(b) the Company, the Continuing Lenders and the Agent under the Credit
Agreement.
BORROWERS: SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
AGENT ON BEHALF OF THE FIRST NATIONAL BANK OF CHICAGO,
CONTINUING LENDERS: as Agent for the Continuing Lenders
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
EXITING LENDERS: -------------------------------------------
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
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