Exhibit 10.1
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WAREHOUSING CREDIT AND SECURITY AGREEMENT
AMONG
CENTERLINE MORTGAGE CAPITAL INC.,
a Delaware corporation
AND
CENTERLINE MORTGAGE PARTNERS INC.,
a Delaware corporation
AND
CITICORP USA, INC., as Agent
AND
THE LENDERS PARTY HERETO
Dated as of May 30, 2007
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TABLE OF CONTENTS
Page
1. DEFINITIONS...........................................................1
2. THE CREDIT...........................................................12
3. COLLATERAL...........................................................20
4. CONDITIONS PRECEDENT.................................................25
5. REPRESENTATIONS AND WARRANTIES.......................................28
6. AFFIRMATIVE COVENANTS................................................39
7. NEGATIVE COVENANTS...................................................44
8. DEFAULTS; REMEDIES...................................................50
9. NOTICES..............................................................58
10. REIMBURSEMENT OF EXPENSES; INDEMNITY.................................60
11. FINANCIAL INFORMATION................................................62
12. AGREEMENTS CONCERNING THE AGENT AND THE LENDERS......................62
13. MISCELLANEOUS........................................................71
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WAREHOUSING CREDIT AND SECURITY AGREEMENT
THIS WAREHOUSING CREDIT AND SECURITY AGREEMENT (this "Agreement"), is
dated as of May 30, 2007, by and among CENTERLINE MORTGAGE CAPITAL INC., a
Delaware corporation, CENTERLINE MORTGAGE PARTNERS INC., a Delaware corporation,
the lenders from time to time party hereto (together with any successors and
assigns thereof, being hereinafter referred to individually as a "Lender" and
collectively as the "Lenders") and CITICORP USA, INC., in its capacity as one of
the Lenders and as agent (it and its successors in that capacity called the
"Agent") for the Lenders.
For good and valuable consideration, the amount and sufficiency of which
are hereby acknowledged by the parties hereto, the parties hereto hereby agree
as follows:
1. DEFINITIONS.
1.1 Defined Terms. Capitalized terms defined below or elsewhere in
this Agreement (including the exhibits hereto) shall have the following
meanings:
"Additional Lender" means a Person admitted as a Lender under
this Agreement by the terms of an amendment hereto.
"Advance" means a disbursement by the Lenders under the
Commitment pursuant to Article 2 of this Agreement.
"Advance Date" means, for any Advance, the date it is disbursed.
"Advance Request" has the meaning set forth in Section 2.2(a)
hereof.
"Affiliate" of any Person means (a) any other Person which,
directly or indirectly, controls, is controlled by, or is under common
control with such Person or (b) any other Person who is director or
officer (i) of such Person or (ii) of any Person described in the
preceding clause (a). For purposes of this definition "control"
(including "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of voting securities, by contract, or otherwise or owning
or possessing the power to vote ten percent (10%) or more of any class
of voting securities of any Person. Without limiting the generality of
the foregoing, for purposes of this Agreement, Borrower and each of its
respective Subsidiaries shall be deemed to be Affiliates of one another.
"Agency" means ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae.
"Agency Security" means a Mortgage-backed Security issued or
guaranteed by any Agency.
"Agent" means, at any time, Citicorp USA, Inc. or its successors
acting as agent for Lenders under the Loan Documents.
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"Agreement" means this Warehousing Credit and Security Agreement,
either as originally executed or as it may from time to time be
supplemented, modified or amended.
"Approved Custodian" means a pool custodian or other Person
designated by an Agency or that Agent deems acceptable, in its
reasonable discretion, to hold Mortgage Loans for inclusion in a
Mortgage Pool or to hold Mortgage Loans as agent for an Investor that
has issued a Purchase Commitment for those Mortgage Loans.
"Authorized Representatives" has the meaning set forth in Section
5.17 hereof.
"Basic Rate" has the meaning set forth in Section 2.4(a) hereof.
"Borrower" means CMC or CMP individually or collectively and
jointly and severally, and shall be deemed to refer to "Borrower" or
"Borrowers", all as the particular context suggests.
"Business Day" means any day excluding Saturday, Sunday and any
day on which Agent is closed for business. If any day on which a payment
is due is not a Business Day, then the payment shall be due on the next
day following which is a Business Day. Further, if there is no
corresponding day for a payment in the given calendar month (i.e., there
is no "February 30th"), the payment shall be due on the last Business
Day of the calendar month.
"Cash Collateral Account" means the non-interest bearing demand
checking account established with, maintained by, and pledged to Agent
for the benefit of Lenders into which shall be deposited the proceeds
from any sale of Collateral.
"CHC" means Centerline Holding Company a statutory trust created
under the laws of Delaware
"CMC" means Centerline Mortgage Capital Inc., a Delaware
corporation, a Borrower hereunder.
"CMP" means Centerline Mortgage Partners Inc., a Delaware
corporation, a Borrower hereunder.
"Collateral" has the meaning set forth in Section 3.3 hereof.
"Collateral Custodian" means Deutsche Bank National Trust Company
or any successor in its capacity as custodian and bailee for the Agent
and the Lenders under the Custodial Agreement.
"Collateral Documents" means all of the documents and other items
described on Exhibit "C" hereto and required to be delivered to the
Agent or the Collateral Custodian in connection with an Advance.
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"Collateral Value" means, as of any date of determination, (a)
with respect to any Eligible Loan, the lesser of (1) the amount of the
Advance permitted against such Eligible Loan under Exhibit B or (2) the
Fair Market Value of such Eligible Loan; and (b) if Eligible Loans have
been exchanged for Agency Securities, the lesser of (1) the amount of
any Advances outstanding against the Eligible Loans backing the Agency
Securities or (2) the Fair Market Value of the Agency Securities.
"Commitment" means the commitment of the Lenders to make Advances
hereunder in an aggregate principal amount at any time outstanding that
shall not exceed an amount equal to THREE HUNDRED MILLION AND NO/100
DOLLARS ($300,000,000.00), subject to any increases or decreases of such
amount pursuant to the terms of this Agreement; provided, however, that
no Lender's portion of such Advances may ever exceed its Commitment
Amount.
"Commitment Amount" means, with respect to each Lender, the
amount set forth opposite its name and so designated on Schedule 1
hereto, as the same may be amended and as that amount may be canceled or
terminated under this Agreement.
"Commitment Fee" has the meaning set forth in Section 2.8 hereof.
"Commitment Percentage" means, at any time, for any Lender, the
proportion (stated as a percentage) that its Commitment Amount bears to
the total Commitment subject to any adjustment by the Agent pursuant to
the terms of this Agreement.
"Committed Purchase Price" means for an Eligible Loan (a) the
dollar price as set forth in the Purchase Commitment or, if the price is
not expressed in dollars, the product of the Mortgage Note Amount
multiplied by the price (expressed as a percentage) as set forth in a
Purchase Commitment for the Eligible Loan, or (b) if the Eligible Loan
is to be used to back an Agency Security, the product of the Mortgage
Note Amount multiplied by the price (expressed as a percentage) as set
forth in a Purchase Commitment for the Agency Security.
"Compliance's Certificate" means a certificate executed on behalf
of the Borrower by its chief financial officer or its treasurer or by
such other officer as may be designated herein, in substantially the
form of Exhibit "F" hereto.
"Constituent Documents" means, with respect to any Person, its
articles or certificate of incorporation, constitution, bylaws,
partnership agreements, organizational documents, limited liability
company agreements, or such other document as may govern such entity's
formation or organization.
"Custodial Agreement" means that certain custodial agreement
dated of even date herewith among the Borrower, Agent and the Collateral
Custodian, as supplemented, amended, or modified from time to time.
"Default" means the occurrence of any event or existence of any
condition which, but for the giving of notice, the lapse of time, or
both, would constitute an Event of Default.
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"Deficiency" has the meaning set forth in Section 2.5(d) hereof.
"Default Rate" has the meaning set forth in Section 2.4(c)
hereof.
"DUS Program" means ▇▇▇▇▇▇ Mae's Delegated Underwriting and
Servicing Program.
"Eligible Loan" means a Mortgage Loan that, at all times during
the term of this Agreement, (a) is, without duplication, an Other ▇▇▇▇▇▇
Mae Mortgage Loan, a ▇▇▇▇▇▇ ▇▇▇ DUS Mortgage Loan, a FHA Project
Mortgage Loan, a FHA Construction Mortgage Loan, or a ▇▇▇▇▇▇▇ Mac
Mortgage Loan (b) is evidenced by loan documents that are the standard
forms approved by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac or FHA, subject to
negotiated modifications to the forms approved by ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇
Mac, or FHA or forms previously approved, in writing, by the Agent in
its reasonable discretion; (c) is validly pledged to the Agent, subject
to no other Liens; (d) is not in violation of any of the Borrower's
representations and warranties set forth in this Agreement applicable to
such Mortgage Loan; (e) except in the case of FHA Construction Mortgage
Loans, has closed less than twenty-five (25) days prior to the date of
the Advance made in connection with such Eligible Loan; (f) has a
combined loan to value ratio of ninety percent (90%) or less, such ratio
being based on the principal balance of such Mortgage Loan (and the
balances of any superior mortgages against the applicable Mortgaged
Property); and (g) is covered by a Purchase Commitment..
"Eligible Mortgage Pool" means a Mortgage Pool for which (a) an
Approved Custodian has issued its initial certification (on the basis of
which an Agency Security is to be issued), (b) there exists a Purchase
Commitment covering the related Agency Security, and (c) such Agency
Security will be delivered to the Collateral Custodian.
"ERISA" means the Employee Retirement Income Security Act of 1974
and all rules and regulations promulgated thereunder, as amended from
time to time and any successor statute.
"ERISA Plan" has the meaning set forth in Section 5.10 hereof.
"Event of Default" means the occurrence of any of the conditions
or events set forth in Section 8.1 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time and any successor statute.
"Fair Market Value" means, at any time for an Eligible Loan or a
related Agency Security (if the Eligible Loan is to be used to back an
Agency Security) as of any date of determination, (a) the Committed
Purchase Price if the Eligible Loan is covered by a Purchase Commitment
from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac or the Eligible Loan is to be exchanged
for an Agency Security and that Agency Security is covered by a Purchase
Commitment from an Investor, or (b) otherwise, the market price for such
Eligible Loan or Agency Security, determined by Agent based on market
data for similar Mortgage
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Loans or Agency Securities and such other criteria as Agent deems
appropriate in its sole discretion.
"Federal Funds Rate" means for any day, the rate per annum
(rounded upwards if necessary, to the nearest 1/100th of 1%) 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 by the Federal Reserve
Bank of New York on the Business Day next succeeding such day, provided
that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and
(b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate
quoted to Agent on such day on such transactions from three Federal
funds brokers of recognized standing.
"▇▇▇▇▇▇ Mae" means the Federal National Mortgage Association, a
corporation created under the laws of the United States, and any
successor thereto.
"▇▇▇▇▇▇ ▇▇▇ DUS Mortgage Loan" means a permanent Mortgage Loan on
a Multifamily Property or other Mortgaged Property originated in
compliance with ▇▇▇▇▇▇ Mae's DUS Program.
"▇▇▇▇▇▇ ▇▇▇ Loan Loss Reserves" means reserves established by the
Borrower to absorb estimated future losses related to ▇▇▇▇▇▇ Mae DUS
Mortgage Loans sold by the Borrower to ▇▇▇▇▇▇ ▇▇▇.
"▇▇▇▇▇▇ Mae Reserve Account" means that certain lender reserve
account established in favor of ▇▇▇▇▇▇ ▇▇▇ by the Borrower and
maintained at US Bank pursuant to that certain the Amended and Restated
▇▇▇▇▇▇ Mae Delegated Underwriting and Servicing Master Loss Sharing
Agreement dated as of September 30, 2005 by and among ▇▇▇▇▇▇ ▇▇▇, the
Borrower and US Bank, as amended and in effect.
"FHA" means the Federal Housing Administration and any successor
thereto.
"FHA Construction Mortgage Loan" means a FHA fully insured
Mortgage Loan for the construction or rehabilitation of a Multifamily
Property or other Mortgaged Property originated in compliance with FHA
requirements applicable to such Mortgage Loan.
"FHA Project Mortgage Loan" means a FHA fully insured Multifamily
Mortgage Loan or other Mortgaged Property originated in compliance with
FHA requirements applicable to such Mortgage Loan.
"▇▇▇▇▇▇▇ Mac" means the Federal Home Loan Mortgage Corporation, a
corporation created under the laws of the United States, and any
successor thereto.
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"▇▇▇▇▇▇▇ Mac Loan" means a permanent Mortgage Loan on a
Multifamily Property or other Mortgaged Property originated in
compliance with ▇▇▇▇▇▇▇ Mac's Program Plus Guide or shared risk program.
"FICA" means the Federal Insurance Contributions Act or any
successor statute.
"First Mortgage" means a Mortgage that constitutes a first Lien
on the real property covered by the Mortgage.
"First Mortgage Loan" means a Mortgage Loan secured by a First
Mortgage.
"Funding Account" means the non-interest bearing demand checking
account established with, maintained by, and pledged to Agent for the
benefit of Lenders into which shall be deposited the proceeds of
Advances, and from which funds shall be disbursed for the funding or
acquisition of Mortgage Loans.
"GAAP" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession, which
are applicable to the circumstances as of the date of determination.
"Gestation Agreement" means an agreement between the Borrower and
any Person under which the Borrower agrees to sell or finance (a) a
Pledged Loan prior to the date of purchase by an Investor, or (b) a
Mortgage Pool prior to the date the Agency Security is issued.
"▇▇▇▇▇▇ ▇▇▇" means the Government National Mortgage Association
and any successor thereto.
"Hedging Arrangement" means an arrangement designed to protect a
Person from fluctuations in interest rates or asset values and not
acquired by a Person for speculation.
"HUD" means the Department of Housing and Urban Development and
any successor thereto.
"Indebtedness" means all obligations, contingent and otherwise,
that in accordance with GAAP should be classified upon the consolidated
balance sheet of the Borrower and the Borrower's Subsidiaries as
liabilities, including in any event and whether or not so classified:
(a) all obligations for borrowed money or other extensions of credit
whether or not secured or unsecured, absolute or contingent, including,
without limitation, unmatured reimbursement obligations with respect to
letters of credit or guarantees issued for the account of or on behalf
of the Borrower and its Subsidiaries and all obligations representing
the deferred purchase price of property, (b) all obligations evidenced
by bonds, notes, debentures or other similar instruments; (c) all
liabilities secured by any mortgage, pledge, security interest, lien,
charge, or other encumbrance existing on property owned or acquired
subject thereto, whether or not the liability
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secured thereby shall have been assumed; and (d) all guarantees,
endorsements and other contingent obligations whether direct or indirect
in respect of indebtedness of others, including any obligations with
respect to puts, swaps, and other similar undertakings, any obligation
to supply funds to or in any manner to invest in, directly or
indirectly, the debtor, to purchase indebtedness, or to assure the owner
of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make
payment of the indebtedness held by such owner or otherwise, and the
obligations to reimburse the issuer in respect of any letters of credit;
and (e) that portion of all obligations arising under capital leases
that is required to be capitalized on the consolidated balance sheet of
the Borrower and its Subsidiaries; but excluding, in all events
obligations arising under operating leases and accounts payable arising
in the ordinary course of business, loan loss reserves, and deferred
taxes.
"Indemnified Liabilities" has the meaning set forth in Article 10
hereof.
"Ineligible Loans" has the meaning set forth in Section 12.15
hereof.
"Interim Date" has the meaning set forth in Section 4.1(d)
hereof.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
or any subsequent federal income tax law or laws, as any of the
foregoing have been or may from time to time be amended.
"Investment" means the acquisition of any real or tangible
personal property or of any stock or other security, any loan, advance,
bank deposit, money market fund, contribution to capital, extension of
credit (except for accounts receivable arising in the ordinary course of
business and payable in accordance with customary terms) , or purchase
or commitment or option to purchase or otherwise acquire real estate or
tangible personal property or stock or other securities of any party or
any part of the business or assets comprising such business, or any part
thereof, but excluding Mortgage Loans, Agency Securities, and any real
property acquired on exercise of rights under a Mortgage Loan.
"Investor" means ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or a financially
responsible private institution that Agent deems acceptable, in its sole
discretion, to issue Purchase Commitments with respect to a particular
category of Eligible Loans.
"Late Charge" has the meaning set forth in Section 2.4(d) hereof.
"Lender" has the meaning set forth in the first paragraph of this
Agreement.
"Legal Requirements" shall mean all applicable federal, state,
county and local laws, by-laws, rules, regulations, codes and
ordinances, and the requirements of any governmental agency or authority
having or claiming jurisdiction with respect thereto, including, but not
limited to, those applicable to any Pledged Assets, ▇▇▇▇▇▇ Mae, FHA,
▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇, zoning, subdivision, building, health, fire,
safety, sanitation, the protection of the handicapped, and environmental
matters and shall also include all
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orders and directives of any court, governmental agency or authority
having or claiming jurisdiction with respect thereto.
"LIBOR Rate" means the One Month LIBOR Rate as published in the
"Money Rates" section of The Wall Street Journal Eastern Edition
(notwithstanding any language in such Money Rates section regarding the
effective date of such published rate) in effect on the first (1st) day
of each and every calendar month during the term of this Agreement. The
LIBOR Rate shall be determined once a month as of the first publication
day for that calendar month, and the interest rate charged under the
Notes shall be adjusted as of the first (1st) day of each calendar month
to reflect changes to the LIBOR Rate. The initial interest rate charged
under the Notes shall be based upon the first publication day preceding
the date hereof. If The Wall Street Journal shall not publish the One
Month LIBOR Rate on the first (1st) day of a particular calendar month,
then the applicable LIBOR Rate shall be the One Month LIBOR Rate that
was previously published the closest day thereafter. If the Agent
determines that use of the LIBOR Rate would violate any applicable law
or regulation, or if The Wall Street Journal shall cease publishing such
rate, then the Agent, in its sole and absolute discretion, will choose a
new rate which is based upon comparable information and to the extent
available, published in a publicly available source, and provide notice
to Borrower of such choice. The Agent's determination of the LIBOR Rate
shall be conclusive and binding on Borrower.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest).
"Loan" has the meaning set forth in Section 2.1(a) hereof.
"Loan Documents" means this Agreement, the Notes, and each other
document, instrument or agreement executed by the Borrower or any other
Person in connection herewith or therewith, as any of the same may be
amended, restated, renewed or replaced from time to time.
"Majority Lenders" means, at any date, the Lenders holding not
less than fifty-one percent (51%) of the Commitment or, if the
Commitment has expired, the aggregate outstanding principal balance of
Advances.
"Master Credit Agreement" means any agreement between Borrower
and one or mortgagors under which Borrower makes Special ▇▇▇▇▇▇ Mae
Mortgage Loans to those mortgagors secured by Mortgages on Multifamily
Properties.
"Maturity Date" means the earlier of May 29, 2008 or the date
upon which the whole of the Commitments are terminated or the Loan is
accelerated in accordance with applicable provisions of this Agreement.
"Mortgage" means a mortgage, deed of trust, deed to secure debt
or other form of mortgage instrument, appropriate and effective for the
U.S. jurisdiction where the real estate is located to create, perfect
and maintain in full force and effect a first or second or
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third, as permitted by any Agency in connection with its Purchase
Commitment of any Eligible Loan, priority mortgage lien against it,
securing a Mortgage Note and granting a perfected first or second or
third, as permitted by any Agency in connection with its Purchase
Commitment of any Eligible Loan, priority lien on real, personal, or
mixed property consisting of land, improvements and other property more
particularly described therein.
"Mortgage-backed Securities" means securities that are secured or
otherwise backed by Mortgage Loans.
"Mortgage Loan" means any loan evidenced by a Mortgage Note.
"Mortgage Note" means a note secured by a Mortgage.
"Mortgage Note Amount" means, as of the date of determination,
the then outstanding unpaid principal amount of a Mortgage Note.
"Mortgage Pool" means a pool of Mortgage Loans that were
warehoused with the Agent, on the basis of which there is to be issued a
Mortgage-backed Security.
"Mortgaged Property" means the property, real, personal, tangible
or intangible, securing a Mortgage Note.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA that is maintained for employees of the
Borrower or a Subsidiary of the Borrower.
"Multifamily Mortgage Loan" means a Mortgage Loan secured by a
Mortgage on improved Multifamily Property.
"Multifamily Property" means real property containing or which
will contain more than four (4) dwelling units and as more particularly
defined by the regulations promulgated by HUD.
"Note" means any promissory note delivered by Borrower to a
Lender or Additional Lender pursuant to Section 2.3 or Section 12.15 in
the form attached hereto as Exhibit "I" and all renewals, modifications
and extensions thereof. "Notes" means, collectively, each Lender's and
Additional Lender's Note.
"Notices" has the meaning set forth in Article 9 hereof.
"Obligations" means any and all indebtedness, obligations, and
liabilities of the Borrower to each Lender and the Agent (whether now
existing or hereafter arising, voluntary or involuntary, whether or not
jointly owed with others, direct or indirect, absolute or contingent,
liquidated or unliquidated, and whether or not from time to time
decreased or extinguished and later increased, created or incurred),
arising out of or related to the Loan Documents, or any of them, and any
renewals, extensions, modifications, enlargements, reinstatements or
rearrangements thereof.
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"Operating Account" means a demand deposit account maintained at
Agent in the name of the Borrower to be charged from time to time for
payment of the Obligations, and designated for funding that portion of
each Eligible Loan not funded by an Advance made against that Eligible
Loan and for returning any excess payment from an Investor for a Pledged
Asset.
"Other ▇▇▇▇▇▇ ▇▇▇ Mortgage Loan" means a permanent Mortgage Loan
on a Multifamily Property or other Mortgaged Property in compliance with
and covered by a Purchase Commitment issued by ▇▇▇▇▇▇ Mae (other than a
▇▇▇▇▇▇ ▇▇▇ DUS Mortgage Loan or a Special ▇▇▇▇▇▇ Mae Mortgage Loan).
"Permitted Intercompany Subordinated Debt" means indebtedness
owed by the Borrower and/or one or more of its Subsidiaries to an
Affiliate (other than one another), which indebtedness has a maturity
date which is later than the Maturity Date, and which is subordinate to
the Obligations pursuant to a subordination agreement reasonably
satisfactory to the Agent.
"Person" means and includes natural persons, corporations,
limited partnerships, general partnerships, joint stock companies, joint
ventures, associations, companies, trusts, banks, trust companies, land
trusts, business trusts or other organizations, whether or not legal
entities, and federal and state governments and agencies or regulatory
authorities and political subdivisions thereof.
"Pledged Assets" means, collectively, Pledged Loans and Pledged
Securities.
"Pledged Hedging Accounts" has the meaning set forth in Section
3.3(h) hereof.
"Pledged Hedging Arrangement" has the meaning set forth in
Section 3.3(h) hereof.
"Pledged Loans" has the meaning set forth in Section 3.3(b)
hereof.
"Pledged Securities" has the meaning set forth in Section 3.3(c)
hereof.
"Purchase Commitment" a written commitment, in form and substance
reasonably satisfactory to Agent, issued in favor of any the Borrower by
an Investor under which that Investor commits to purchase Mortgage Loans
or Mortgage-backed Securities.
"Rating Agencies" means Standard & Poor's, Moodys, or any other
nationally recognized Person reasonably acceptable to Agent in the
business of rating creditworthiness.
"Receivables" has the meaning set forth in Section 3.3(g) hereof.
"Release Amount" has the meaning set forth in Section 3.5(f)
hereof.
"Serviced Loans" means each of those loans secured by a mortgage
lien on a multi-family residential property, health care facility,
senior citizen facility or other
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property, with respect to which the Borrower provides servicing or
subservicing (but only if such subservicing is technically styled as
subservicing but is performed under a contract directly between the
Borrower and ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae) pursuant to a
Servicing Contract.
"Servicing Contract" means each direct agreement with the owner
of the subject Serviced Loans, as it may be amended from time to time,
pursuant to which the Borrower services Serviced Loans.
"Servicing Portfolio" means the portfolio of Servicing Contracts
pursuant to which the Borrower has the rights to service Serviced Loans.
"Servicing Rights" means all rights of the Borrower as a servicer
or subservicer (but only if such subservicing is technically styled as
subservicing but is performed under a contract directly between the
Borrower and ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae) of Serviced Loans.
"Special ▇▇▇▇▇▇ ▇▇▇ Mortgage Loan" means a permanent Mortgage
Loan on one or more Multifamily Properties originated by Borrower under
a Master Credit Facility Agreement and evidenced by one or more Mortgage
Notes in the possession of ▇▇▇▇▇▇ Mae.
"Statement Date" has the meaning set forth in Section 4.1(d)
hereof.
"Subordinated Debt" means, with respect to any Person, all
Indebtedness of such Person, for borrowed money, which is, by its terms
(which terms shall have been approved by the Majority Lenders) or by the
terms of a subordination agreement, in form and substance satisfactory
to the Majority Lenders, effectively subordinated in right of payment to
the Obligations.
"Subsidiary" means any corporation, association or other business
entity in which more than fifty percent (50%) of the total voting power
or shares of stock entitled to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"Tangible Net Worth" means, as to the Borrower (on a
non-consolidated basis), as of the date of determination, the excess of
such Persons' Total Assets over Total Liabilities, MINUS intangible
assets, PLUS, to the extent not otherwise included in determining
"Tangible Net Worth" (i) ▇▇▇▇▇▇ ▇▇▇ Loan Loss Reserves, (ii) Servicing
Contracts valued at the lesser of book value or fair market value, and
(iii) any Permitted Intercompany Subordinated Debt. For purposes of
calculating the Tangible Net Worth of the Borrower and its Subsidiaries,
advances or loans to shareholders, directors, officers, employees or
Affiliates, investments in Affiliates, assets pledged to secure any
liabilities not included in the Indebtedness of such Persons, intangible
assets, those other assets that would be deemed by HUD to be
non-acceptable in calculating adjusted net worth in accordance with its
requirements in effect as of that date, as those requirements appear in
Page 11
"Consolidated Audit Guide for Audits of HUD Programs," and other assets
Agent deems unacceptable, in its sole discretion, shall be excluded from
such Person's Total Assets.
"Total Assets" means, at the time of determination, all assets of
the Borrower (on a non-consolidated basis) determined in accordance with
GAAP applied in a manner consistent with the most recent audited
financial statements delivered pursuant to the Agreement.
"Total Liabilities" means as to the Borrower (on a
non-consolidated basis), as of the date of determination, all
liabilities of the Borrower determined in accordance with GAAP applied
in a manner consistent with the most recent audited financial statements
delivered pursuant to the Agreement and, whether or not so classified,
all redemption obligations, and off-balance sheet financial transactions
as to which there is recourse to the Borrower.
"Trust Receipt" means a trust receipt in a form approved by the
Agent and pursuant to which the Collateral Custodian may deliver any
document relating to the Collateral to the Borrower for correction or
completion.
"UCC" means the Uniform Commercial Code in effect in the state of
New York, or any other applicable jurisdiction.
1.2 Other Definitional Provisions.
(a) Accounting terms not otherwise defined herein shall have the
meanings given the terms under GAAP.
(b) Defined terms may be used in the singular or the plural, as
the context requires.
(c) All references to time of day shall mean the then applicable
time in New York, New York, unless expressly provided to the contrary.
(d) References in any of the Loan Documents to any property
being pledged to the Agent or any Liens or security interests being
granted to or held by the Agent (or required so to be) shall mean,
respectively, pledged to, granted to or held by Agent for itself as
Lender and as agent for the other Lenders.
2. THE CREDIT.
2.1 The Commitment.
(a) Subject to the terms and conditions of this Agreement and
provided no Default or Event of Default has occurred and is continuing,
each Lender severally and not jointly agrees, from time to time during
the period from the date hereof up to, but not including the Maturity
Date, to make Advances to the Borrower, provided, however, that (1) the
sum of the total aggregate principal amount outstanding at any one time
of all such Advances shall not exceed the Commitment, and (2) no
Lender's portion of the
Page 12
Advances shall exceed such Lender's Commitment Amount. The aggregate
amount of all Advances outstanding from time to time hereunder may
hereinafter collectively be referred to as the "Loan." Within the
Commitment, the Borrower may borrow, repay and reborrow. All Advances
under this Agreement shall constitute a single indebtedness, and all of
the Collateral shall be security for the Notes and for the performance
of all the Obligations of the Borrower.
(b) Advances shall be used by the Borrower solely for the purpose
of funding the origination of Eligible Loans as specified in the Advance
Request, and none other, and shall be made at the request of the
Borrower in the manner hereinafter provided in Section 2.2, against the
pledge of such Mortgage Loans, and such other collateral as is set forth
in Section 3.3 hereof as Collateral therefor.
(c) In addition to the limitations set forth in this Agreement,
each Advance to fund an Eligible Loan shall be limited to the lesser of
(x) the Mortgage Note Amount, or (y) the Committed Purchase Price
amount.
(d) In the event at any time the outstanding principal balance of
the Loan should exceed the lesser of (x) the Commitment or (y) the
aggregate Collateral Value of all Eligible Loans against which Advances
are then outstanding, the Borrower shall repay such excess amount on
demand to the Agent so that the outstanding principal balance of the
Loan is in compliance with the terms and provisions hereof.
2.2 Procedures for Obtaining Advances.
(a) The Borrower may obtain an Advance hereunder, subject to the
satisfaction of the conditions set forth in Sections 4.1 and 4.2 hereof,
upon compliance with the procedures set forth in this Section 2.2 and in
Exhibit C attached hereto and made a part hereof. Requests for Advances
shall be initiated by the Borrower (i) by delivering to the Agent, with
a copy to the Collateral Custodian, not later than 1 Business Day before
the Business Day on which the Borrower desires the Advance, a completed
and signed request for an Advance (an "Advance Request") in the form of
Exhibit A attached hereto and made a part hereof, The Agent shall have
the right, on not less than three (3) Business Days' prior notice to the
Borrower, to modify the form of the Advance Request or any exhibits
hereto, subject to the prior written consent of the Borrower, not to be
unreasonably withheld, and, as so modified, said Advance Request or
exhibits shall be deemed a part hereof.
(b) Subject to the delivery of an Advance Request, and the
satisfaction of the conditions set forth in Sections 4.1 and 4.2, the
Borrower is entitled to obtain an Advance under this Agreement upon
compliance with the procedures set forth in this Section and in the
applicable Exhibit C, including delivery to Collateral Custodian of all
required Collateral Documents.
(c) Absent contrary written notice from a Lender received by
Agent by 2:00 p.m. on the Advance Date, Agent may assume that each
Lender has made its Commitment Percentage of an Advance under an Advance
Request available to Agent on
Page 13
the Advance Date and may, but is not obligated to, make available to
Borrower a corresponding amount. If a Lender fails to make its
Commitment Percentage of that Advance available to Agent on the Advance
Date (whether because of that Lender's default, because that Lender is
not open for business on that Business Day, or otherwise) then Agent may
recover that amount on demand (i) from that Lender, together with
interest at the Federal Funds Rate, during the period from the Advance
Date to the date Agent recovers that amount from that Lender - which
payment is deemed to be that Lender's Commitment Percentage of that
Advance or (ii) if that Lender fails to pay that amount upon demand,
then from Borrower together with interest at an annual interest rate
equal to the rate applicable to the requested Advance during the period
from the Advance Date to the date Agent recovers that amount from
Borrower. If any Lender fails to fund its Commitment Percentage in any
Advance, the other Lenders shall be entitled, but not obligated, to fund
the defaulting Lender's Commitment Percentage in such Advance.
Thereafter, the Commitment Percentage of each Lender shall be adjusted
accordingly. Nothing in these provisions changes or limits the
obligation of each Lender to lend its Commitment Percentage of each
Advance. Each Lender assumes the credit risk for amounts lent by Agent
pursuant to this Section 2.2(c) from the time the Advance is made
available to or for the Borrower, and, after Agent has recovered the
amount of interest provided for in clause (i) above of this Section
2.2(c), is entitled to interest on such amount lent from such time.
(d) Although no Lender is responsible for the failure of any
other Lender to make its Commitment Percentage of any Advance, that
failure does not excuse any other Lender from making its Commitment
Percentage of that Advance.
(e) To make an Advance, the Agent shall credit the Borrower's
Funding Account upon compliance by the Borrower with the terms of this
Agreement.
2.3 Notes. The Borrower's obligation to pay the principal of, and
accrued and unpaid interest on, all Advances made by the Lenders shall be
evidenced by the Notes of the Borrower in favor of each Lender. All terms and
provisions of the Notes are hereby incorporated herein.
2.4 Interest.
(a) Except as provided in Section 2.4(c) below, the unpaid amount of
each Advance hereunder shall bear interest from the date of such
Advance until paid in full, at a rate of interest (the "Basic
Rate") equal to a floating rate of interest which is equal to 50
basis points (0.50%) per annum over the LIBOR Rate.
(b) Interest shall be computed on the basis of a 360-day year and
applied to the actual number of days elapsed in each interest
calculation period and shall be payable monthly in arrears, on or
before the 25th day of each calendar month until the Maturity
Date when the entire outstanding principal balance of the Notes
together with all accrued and unpaid interest thereof shall
immediately become due and payable. If Borrower does not pay
interest when due following the invoice pursuant to Section 2.7,
Borrower authorizes Agent to charge the Operating
Page 14
Account for the payment of accrued and unpaid interest for any
calendar month; Agent shall notify Borrower of such charge.
(c) Obligations not paid when due (whether at stated maturity, upon
acceleration following the occurrence of an Event of Default or
otherwise) shall bear interest, from the date due until paid in
full, at a rate of interest ("Default Rate") at all times equal a
floating rate of interest which is equal two percent (2%) per
annum over the Basic Rate, said interest to be payable on demand
by Agent.
(d) The Borrower shall pay, upon billing therefor, a "Late Charge"
equal to five percent (5%) of the amount of any payment of
principal, other than principal due at the Maturity Date (or the
date on which the Agent accelerates the time for payment of the
Loan after the occurrence of an Event of Default), interest, or
other Obligations, which are not paid within ten (10) days of the
due date thereof. Late Charges are: (a) payable in addition to,
and not in limitation of, the Default Rate, (b) intended to
compensate Agent and the Lenders for administrative and
processing costs incident to late payments, (c) not interest, and
(d) not subject to refund or rebate or credit against any other
amount due.
(e) Notwithstanding any other provision of this Agreement, if,
pursuant to this Agreement, the Agent debits the Borrower's
Operating Account to honor an item presented against the
Operating Account and that debit or direction results in an
overdraft, the Agent may, but in no event shall be obligated to,
make an additional Advance to fund that overdraft (an "Overdraft
Advance"). The Borrower shall pay the outstanding amount of any
Overdraft Advance within one (1) Business Day after the date of
the Overdraft Advance.
2.5 Principal Payments.
(a) Upon acceleration of the Loan, if the Loan has been
accelerated by the Agent (or the Facility has been automatically
terminated) upon an Event of Default, or at the Maturity Date, all
accrued and unpaid interest, principal and other Obligations due with
respect to the Loan shall be due and payable in full, and the principal
balance and such other Obligations, but not unpaid interest, shall
continue to bear interest at the Default Rate until so paid.
(b) The Borrower shall have the right to prepay the outstanding
Advances in whole or in part, from time to time, without premium or
penalty.
(c) The Borrower shall be obligated to pay to the Agent on behalf
of the Lenders, without the necessity of prior demand or notice from the
Agent or any Lender, and the Borrower authorizes the Agent on behalf of
the Lenders to charge the Operating Account or any other accounts of the
Borrower in Agent's possession for the amount of any outstanding Advance
against a specific Pledged Asset upon the earliest occurrence of any of
the following events:
Page 15
1. Upon the earlier to occur of (x) the payment of the Committed
Purchase Price from an Investor with respect to any Pledged Asset
or (y) that date which is ninety (90) days from the date of the
funding of such Advance;
2. On the date an Advance was made if the Pledged Loan that was to
have been funded by that Advance is not closed and funded;
3. Three (3) Business Days elapse from the date an Advance was made
against a Pledged Loan, without receipt by the Collateral
Custodian of the Collateral Documents relating to that Pledged
Loan required to be delivered on that date, or such Collateral
Documents, upon examination by Collateral Custodian, are found
not to be in compliance with the requirements of this Agreement
or the related Purchase Commitment and the Borrower fails to cure
such non-compliance within three (3) Business Days after written
notice thereof;
4. Ten (10) Business Days elapse without the return of a Collateral
Document delivered by Collateral Custodian to the Borrower under
a Trust Receipt for correction or completion;
5. Three (3) Business Days after Borrower has received written
notice that a Pledged Loan is determined to have been originated
or issued based on materially untrue, incomplete or inaccurate
information or otherwise to be subject to fraud, whether or not
the Borrowers had knowledge of the misrepresentation, incomplete
or incorrect information or fraud;
6. On the date the Pledged Loan or a Lien prior to the Pledged Loan
is defaulted and remains in default for a period of 60 days or
more;
7. On the mandatory delivery date of the related Purchase Commitment
if the specific Pledged Loan has not been delivered under the
Purchase Commitment prior to such mandatory delivery date, or on
the date the related Purchase Commitment expires or is
terminated;
8. Three (3) Business Days after the date a Pledged Loan is rejected
for purchase by an Investor unless another Purchase Commitment is
provided within that 3 Business Day period;
9. On the date the Pledged Loan does not qualify as an Eligible
Loan; and
10. Upon the sale, other disposition or prepayment of any Pledged
Asset or, with respect to a Pledged Loan included in an Eligible
Mortgage Pool, upon the sale or other disposition of the related
Agency Security.
(d) The proceeds of the sale or other disposition of Pledged
Assets must be paid directly by the Investor to the Cash Collateral
Account. The Borrower must give Notice to Agent (by telephone or
electronic mail, and if by telephone, followed promptly by written
notice) of the Pledged Assets for which proceeds have been received.
Upon receipt of such Notice from the Borrower, Agent will apply any
proceeds deposited into
Page 16
the Cash Collateral Account to the payment of the Advance related to the
Pledged Assets identified by the Borrower in its Notice, and those
Pledged Assets will be considered to have been redeemed from pledge.
Agent is entitled to rely upon the Borrower's affirmation that deposits
in the Cash Collateral Account represent payments from Investors for the
purchase of the Pledged Assets specified by the Borrower in its Notice.
If the payment from an Investor for the purchase of Pledged Assets is
less than the outstanding Advance against the Pledged Assets identified
by the Borrower in its Notice (the "Deficiency"), the Borrower shall
immediately deposit into the Cash Collateral Account the amount of such
Deficiency in collected funds, and the Borrower authorizes Agent to
charge the Borrower's Cash Collateral Account for the amount deposited
by the Borrower to cover such Deficiency to be applied against such
Advance. As long as no Default exists, Agent will transfer into the
Borrower's Operating Account any excess payment from an Investor for
Pledged Assets.
(e) Agent reserves the right to revalue, based on market data
for similar loans or other criteria that Agent deems to be appropriate,
any Pledged Loan that is not covered by a Purchase Commitment from
▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ Mae, or a financially responsible
private institution that Agent deems acceptable to issue Purchase
Commitments with respect to a particular category of Eligible Loans.
Agent reserves the right to revalue any Pledged Loan that is to be
exchanged for an Agency Security if that Agency Security is not covered
by a Purchase Commitment based on market data for similar loans or other
criteria that Agent deems to be appropriate. The Borrower must pay to
Agent, without the necessity of prior demand or Notice from Agent, any
amount required after any such revaluation to reduce the principal
amount of the Advance outstanding against the revalued Pledged Loan to
an amount equal to the Advance Rate for the applicable Eligible Loan
type multiplied by the Fair Market Value of the respective Mortgage
Loan.
2.6 Expiration of Commitment. Unless extended or terminated earlier
as permitted hereunder, the Commitment shall expire of its own term, and without
the necessity of action by the Lenders or the Agent, at the close of business on
the Maturity Date. However, the remainder of this Agreement shall remain in full
force and effect until all amounts due on the Obligations have been paid in
full. The Lenders have not made, and do not hereby make, any commitment to
renew, extend, rearrange or otherwise refinance the outstanding and unpaid
principal of the Notes or accrued interest thereon. In the event, however, the
Lenders from time to time renew, extend, rearrange, increase and/or otherwise
refinance any portion or all of any Obligation and any accrued interest thereon
at any time, such refinancing shall be evidenced by appropriate promissory notes
in form and substance satisfactory to the Lenders and, unless otherwise noted or
modified at such time or times by the terms of such promissory note or any
agreements executed in connection therewith, any such promissory notes and
refinancing evidenced thereby shall be governed in all respects by the terms of
this Agreement. Notwithstanding the foregoing, Borrower may terminate the
Commitment upon not less than thirty (30) days prior written notice to the
Agent. All Obligations of the Borrower shall automatically become due and
payable, without demand or notice of any kind, on the effective date of such
termination including, but not limited to, all Advances, accrued and unpaid
interest, accrued and unpaid Non-Usage Fees and Agent's Fees through the
effective date.
Page 17
2.7 Payment Procedure.
(a) Payments. Except as otherwise specifically provided herein,
all payments hereunder shall be made to the Agent on behalf of the
Lenders not later than the close of business on the date when due unless
such date is a non-Business Day, in which case, such payment shall be
due not later than 2:00 p.m. on the first Business Day thereafter, and
shall be made in lawful money of the United States of America in
immediately available funds. Any such payment made after 2:00 p.m. shall
be deemed to be received on the next Business Day and, if applicable,
interest thereon shall continue to accrue until such next Business Day.
No Lender directly invoices Borrower for - and only Agent invoices
Borrower for - interest under the Loan Documents. Agent may submit
monthly ▇▇▇▇▇▇▇▇ reflecting payments due; however, any changes in the
interest rate which occur between the date of billing and the due date
may be reflected in the billing for a subsequent month. Neither the
failure of Agent to submit a billing nor any error in any such billing
shall excuse the Borrower from the obligation to make full payment of
all the Borrower's payment Obligations when due.
(b) Distributions. When received under Section 2.7(a) above,
Agent shall distribute each payment to each Lender ratably in accordance
with its Commitment Percentage reasonably promptly after receipt but by
no later than 4:00 p.m. on the Business Day the payment is deemed to be
received by Agent under Section 2.7(a) above. If Agent fails to
distribute any payment to any Lender as required by this Section 2.7(b),
then Agent shall pay to that Lender on demand interest on that payment,
from the date due under this clause until paid, at any annual interest
rate equal from day to day to the Federal Funds Rate.
2.8 Commitment Fee. In consideration of Lenders' agreement to make
Advances available to Borrower under the Commitment, subject to the terms of
this Agreement, Borrower shall pay to Agent a commitment fee equal to 0.05% of
the Commitment (the "Commitment Fee"). The Commitment Fee shall be deemed fully
earned, non refundable and payable upon the execution and delivery of this
Agreement by the parties, notwithstanding the Commitment is never fully funded
during the term of this Agreement.
2.9 Bailee. Each Lender appoints Borrower - and Borrower shall act -
as its bailee to (i) hold in trust for such Lender (A) the original recorded
copy of the mortgage, deed of trust, or trust deed securing each Pledged Loan,
(B) a mortgagee policy of title insurance (or binding unexpired and
unconditional commitment to issue such insurance if the policy has not yet been
delivered to Borrower) insuring the Borrower's perfected, first or second or
third priority Lien, as permitted under the applicable Purchase Commitment from
any Agency, created by that mortgage, deed of trust, or trust deed on each
Pledged Loan, (C) the original insurance policies for each Pledged Loan, and (D)
all other original documents relating to each Pledged Loan, including any
promissory notes, any other loan documents, and supporting documentation,
surveys, settlement statements, closing instructions, and Mortgage-backed
Securities, and (ii) deliver to Agent any of the foregoing items as soon as
reasonably practicable upon Agent's request.
Page 18
2.10 Increased Costs; Capital Requirements. In the event there is a
change after the date of this Agreement in any applicable law, order, regulation
or directive issued by any governmental or monetary authority, or any change
after the date of this Agreement in the governmental or judicial interpretation
or application thereof, and such change:
(a) Does or shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement or any Advances made
hereunder, or change the basis of taxation on payments to such Lender of
principal, fees, interest or any other amount payable hereunder (except
for change in the rate of tax on the overall gross or net income of such
Lender by the jurisdiction in which such Lender's principal office is
located);
(b) Does or shall impose, modify or hold applicable any reserve,
capital requirement, special deposit, compulsory loan or similar
requirement against assets held by, or deposits or other liabilities in
or for the account of, advances or loans by, or other credit extended
by, or any other acquisition of funds by, any office of such Lender
which are not otherwise included in the determination of the interest
rate as calculated hereunder;
and the result of all of the foregoing taken as a whole is to increase the cost
to such Lender of making, renewing or maintaining any Advance or to reduce any
amount receivable in respect thereof or to reduce the rate of return on the
capital of such Lender or any Person controlling such Lender as it relates to
credit facilities in the nature of that evidenced by this Agreement, then, in
any such case, the Borrower shall promptly pay any additional amounts necessary
to compensate such Lender for such additional cost or reduced amounts receivable
or reduced rate of return as reasonably determined by such Lender with respect
to this Agreement or Advances made hereunder or such Lender's obligations
hereunder. If a Lender becomes entitled to claim any additional amounts pursuant
to this Section, it shall notify the Borrower through the Agent of the event by
reason of which it has become so entitled and the Borrower shall pay such amount
within fifteen (15) days thereafter. Notwithstanding the foregoing, the Borrower
shall not be obligated to pay any such additional amounts attributable to the
period (the "Excluded Period") ending ninety (90) days prior to the date the
Borrower receives written notice of the law, order, regulation, directive,
change or request by reason of which such additional amounts are payable, except
to the extent such additional amounts accrued during the Excluded Period due to
the retroactive application of such law, order, regulation, directive, change or
request, in which case the limitation set forth in this sentence shall not
apply. A certificate as to any additional amount payable pursuant to the
foregoing sentence containing the calculation thereof in reasonable detail
submitted by a Lender, through the Agent, to the Borrower shall be conclusive in
the absence of manifest error. The obligations of the Borrower under this
Section shall survive the payment of all other Obligations and the termination
of this Agreement.
2.11 Taxes.
(a) Any and all payments by the Borrower to or for the account
of the Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future
taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and all liabilities with respect
thereto, excluding, in the case of the Agent and each Lender, taxes
imposed on or measured by its
Page 19
overall net income, and franchise taxes imposed on it (in lieu of net
income taxes), by the jurisdiction (or any political subdivision
thereof) under the Laws of which the Agent or such Lender, as the case
may be, is organized or maintains a lending office (all such
non-excluded taxes, duties, levies, imposts, deductions, assessments,
fees, withholdings or similar charges, and liabilities being hereinafter
referred to as "Taxes"). If the Borrower shall be required by any Laws
to deduct any Taxes from or in respect of any sum payable under any Loan
Document to the Agent or any Lender, (i) the sum payable shall be
increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section), each of the Agent and such Lender receives an amount equal to
the sum it would have received had no such deductions been made, (ii)
the Borrower shall make such deductions, (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable Laws, and (iv) within 30 days
after the date of such payment, the Borrower shall furnish to the Agent
(which shall forward the same to such Lender) the original or a
certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present
or future stamp, court or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any payment
made under any Loan Document or from the execution, delivery,
performance, enforcement or registration of, or otherwise with respect
to, any Loan Document (hereinafter referred to as "Other Taxes").
(c) If the Borrower shall be required to deduct or pay any Taxes
or Other Taxes from or in respect of any sum payable under any Loan
Document to the Agent or any Lender, the Borrower shall also pay to the
Agent or to such Lender, as the case may be, at the time interest is
paid, such additional amount that the Agent or such Lender specifies is
necessary to preserve the after-tax yield (after factoring in all taxes,
including taxes imposed on or measured by net income) that the Agent or
such Lender would have received if such Taxes or Other Taxes had not
been imposed.
(d) The Borrower agrees to indemnify the Agent and each Lender
for (i) the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section) paid by the Agent and such Lender, (ii) amounts
payable under Section 2.11(c) and (iii) any liability (including
additions to tax, penalties, interest and expenses) arising therefrom or
with respect thereto, in each case whether or not such Taxes or Other
Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. Payment under this subsection (d) shall be made
within 30 days after the date the Lender or the Agent makes a demand
therefor.
The Agreement of the Borrower contained in this Section 2.11 shall survive the
expiration or termination of this Agreement and the payment in full of the
Notes.
3. COLLATERAL.
3.1 Appointment of Collateral Custodian. Pursuant to the Custodial
Agreement, DEUTSCHE BANK NATIONAL TRUST COMPANY has been appointed as Collateral
Page 20
Custodian to act as agent, bailee, and custodian for the exclusive benefit of
the Agent and the Lenders with respect to the Collateral and the Collateral
Documents.
3.2 Delivery of Collateral. As described in the Custodial Agreement
and this Agreement, from time to time the Borrower shall deliver Collateral or
cause Collateral to be delivered to the Collateral Custodian hereunder.
3.3 Grant of Security Interest. As security for the payment of the
Notes and for the payment and performance of all of the Borrower's Obligations
hereunder, the Borrower hereby assigns and transfers all of its rights, titles
and interests in and to and grants a security interest to the Agent for the
benefit of the Lenders in the following described property, whether now owned or
hereafter acquired by the Borrower (the "Collateral"):
(a) All amounts advanced by Lenders to or for the account of the
Borrower under this Agreement to fund a Mortgage Loan until that
Mortgage Loan is closed and those funds disbursed.
(b) All Mortgage Loans which from time to time are delivered or
caused to be delivered to the Collateral Custodian for the
benefit of the Agent and the Lenders, come into the possession,
custody or control of the Collateral Custodian for the purpose of
assignment or pledge or in respect of which an Advance has been
made by the Lenders hereunder (the "Pledged Loans").
(c) All Mortgage-backed Securities that are created in whole or in
part on the basis of Pledged Loans or are delivered or caused to
be delivered to Collateral Custodian for the benefit of the Agent
and the Lenders, or are otherwise in the possession of Collateral
Custodian or its agent, bailee or custodian as assignee, or
pledged to the Collateral Custodian, or for such purpose are
registered by book-entry in the name of, the Collateral Custodian
(including delivery to or registration in the name of a third
party on behalf of the Collateral Custodian, the Agent or any
Lender) hereunder or in respect of which from time to time an
Advance has been made by the Lenders hereunder (the "Pledged
Securities").
(d) All commitments issued by FHA to insure or guarantee any Mortgage
Loans included in the Pledged Loans; all Purchase Commitments
held by the Borrower covering Pledged Assets or proposed
permanent Pledged Loans, and all proceeds from the sale of
Pledged Assets to Investors pursuant to those Purchase
Commitments; and all personal property, contract rights,
servicing and servicing fees and income or other proceeds,
amounts and payments payable to the Borrower whether as
compensation or reimbursement, accounts or general intangibles of
whatsoever kind relating to Pledged Assets, FHA Commitments and
the Purchase Commitments (subject to any restrictions on the
pledge thereof under the applicable requirements of ▇▇▇▇▇▇ ▇▇▇
and ▇▇▇▇▇▇▇ Mac), and all other documents or instruments relating
to Pledged Assets, including any interest of the Borrower in any
fire, casualty or hazard insurance policies and any awards made
by any public body or decreed by any court of competent
jurisdiction for a taking
Page 21
or for degradation of value in any eminent domain proceeding as
the same relate to Pledged Loans.
(e) All right, title and interest of the Borrower in and to all
escrow accounts, documents, instruments, files, surveys,
certificates, correspondence, appraisals, computer programs,
tapes, discs, cards, accounting records (including all
information, records, tapes, data, programs, discs and cards
necessary or helpful in the administration or servicing of the
foregoing Collateral) and other information and data of the
Borrower relating to the foregoing Collateral.
(f) All cash, whether now existing or acquired after the date of this
Agreement, delivered to or otherwise in the possession of Agent
or any Lender, or their respective agents, bailees or custodians
(provided, that with respect to funds held by the Borrower in
trust or escrow for any other Person with the Agent or any
Lender, only the Borrower's interest in earnings on such funds
shall be Collateral) or designated on the books and records of
the Borrower as assigned and pledged to Agent for the benefit of
the Lenders, including all cash deposited in the Cash Collateral
Account.
(g) All Accounts or General intangibles owned by the Borrower
("Receivables") related to the Collateral referenced in Sections
3.1(a) through and including 3.1(c) for the payment of money
against (1) FHA or a private mortgage insurer under an FHA or
private insurer's mortgage insurance policy insuring payment of,
or any other Person under any other agreement (excluding a
Servicing Contract) relating to, all or part of a defaulted
Mortgage Loan repurchased by the Borrower from an investor or out
of a pool of Mortgage Loans serviced by the Borrower, (2)
obligors and their accounts, or any Investor, insurer or
guarantor covering, or out of the proceeds of any sale of or
foreclosure sale in respect of, any Mortgage Loan being serviced
by any Borrower, in either case, for the reimbursement of real
estate taxes or assessments, or casualty or liability insurance
premiums, paid by the Borrower in connection with Mortgage Loans
and (3) obligors and their accounts, or any other Investor,
insurer or guarantor under or in respect of, or out of the
proceeds of any sale or foreclosure sale in respect of, any
Mortgage Loans serviced by the Borrower for repayment of advances
made by the Borrower to cover shortages in principal and interest
payments.
(h) All Hedging Arrangements related to the Collateral referenced in
Section 3.3(a) through and including 3.3(c) ("Pledged Hedging
Arrangements") and the Borrower's accounts in which those Hedging
Arrangements are held ("Pledged Hedging Accounts"), including all
rights to payment arising under the Pledged Hedging Arrangements
and the Pledged Hedging Accounts, except that Agent's security
interest in the Pledged Hedging Arrangements and Pledged Hedging
Accounts is limited to benefits, including rights to payment,
related to the Collateral.
(i) All Accounts, Chattel Paper, Instruments, General Intangibles,
Certificated Securities, Uncertificated Securities, and
Investment Property, as those terms are
Page 22
defined in the New York Uniform Commercial Code, arising from or
relating to any of the foregoing Collateral.
(j) All cash and non-cash proceeds of the foregoing Collateral,
including all dividends, distributions and other rights in
connection with, and all additions to, modifications of and
replacements for, the foregoing Collateral, and all products and
proceeds of the foregoing Collateral, together with whatever is
receivable or received when the foregoing Collateral or proceeds
thereof are sold, collected, exchanged or otherwise disposed of,
whether such disposition is voluntary or involuntary, including,
without limitation, all rights to payment with respect to any
cause of action affecting or relating to the foregoing Collateral
or proceeds thereof.
3.4 Authenticated Record. This Agreement constitutes an authenticated
record which authorizes the Agent to file such financing statements as the Agent
determines as appropriate to perfect or protect the security interests created
by this Agreement.
3.5 Release of Security Interest in Pledged Assets.
(a) Except as provided in Section 3.5(b) below, Pledged Loans will be
released from Agent's security interest only against payment to
Agent of the Release Amount in connection with those Pledged
Loans. If Pledged Loans are transferred to a pool custodian or an
investor for inclusion in a Mortgage Pool and Agent's security
interest in the Pledged Loans included in the Mortgage Pool is
not released before the issuance of the related Mortgage-backed
Security, then that Mortgage-backed Security, when issued, is a
Pledged Security, Agent's security interest continues in the
Pledged Loans backing that Pledged Security and Agent is entitled
to possession of the Pledged Security in the manner provided in
this Agreement.
(b) If Pledged Loans are transferred to an Approved Custodian and
included in an Eligible Mortgage Pool, Agent's security interest
in the Pledged Loans included in the Eligible Mortgage Pool will
be released upon the delivery of the Agency Security to Agent
(including delivery to or registration in the name of a third
party on behalf of Agent), and that Agency Security is a Pledged
Security. Agent's security interest in that Pledged Security will
be released only against payment to Agent of the Release Amount
in connection with the Mortgage Loans backing that Pledged
Security.
(c) Collateral Custodian for the benefit of the Agent and the Lenders
has the exclusive right to possession of all Pledged Securities
or, if Pledged Securities are issued in book-entry form or issued
in certificated form and delivered to a clearing corporation (as
such term is defined in the UCC) or its nominee, Agent has the
right to have the Pledged Securities registered in the name of a
securities intermediary (as such term is defined in the UCC) in
an account containing only customer securities and credited to an
account of Agent. Agent has no duty or obligation to deliver
Pledged Securities to an Investor or to credit Pledged Securities
to the account of an Investor or the Investor's designee except
against
Page 23
payment of the Release Amount for those Pledged Securities,
unless the Agent shall have entered into a master agreement with
such Investor on terms and conditions satisfactory to the Agent.
The Borrower acknowledges that Agent may enter into one or more
standing arrangements with securities intermediaries with respect
to Pledged Securities issued in book entry form or issued in
certificated form and delivered to a clearing corporation or its
nominee, under which the Pledged Securities are registered in the
name of the securities intermediary, and the Borrower agrees,
upon request of Agent, to execute and deliver to those securities
intermediaries the Borrower's written concurrence in any such
standing arrangements.
(d) If no Event of Default has occurred and is continuing, the
Borrower may redeem a Pledged Loan or Pledged Security from
Agent's security interest by notifying Agent of its intention to
redeem the Pledged Loan or Pledged Security from pledge and
paying, or causing an Investor to pay, to Agent the Release
Amount in connection with the Pledged Loan or the Pledged Loans
backing that Pledged Security.
(e) If an Event of Default has occurred and is continuing, Agent may,
with no liability to the Borrower or any Person, continue to
release its security interest in any Pledged Loan or Pledged
Asset against payment of the Release Amount in connection with
that Pledged Loan or the Pledged Loans backing that Pledged
Security.
(f) The amount ("Release Amount") to be paid by the Borrower to
obtain the release of Agent's security interest in a Pledged Loan
will be (1) unless and until an Event of Default occurs and is
continuing, the principal amount of the Advances outstanding
against the Pledged Loan, and (2) while an Event of Default
exists, the full Committed Purchase Price therefor, or amount
paid to Agent in a commercially reasonable disposition of that
Pledged Loan by the Agent in the exercise of its rights and
remedies under this Agreement.
3.6 Delivery of Collateral Documents.
(a) If no Event of Default has occurred and is continuing, Collateral
Custodian will deliver documents relating to the Collateral to
the Borrower for correction or completion under a Trust Receipt
and the Custodial Agreement.
(b) If no Event of Default has occurred and is continuing, upon
delivery by the Borrower to Collateral Custodian of shipping
instructions pursuant to the applicable Exhibit D, Collateral
Custodian will transmit Pledged Loans or Pledged Securities,
together with all related loan documents and pool documents in
Collateral Custodian's possession, to the applicable Investor,
Approved Custodian or other party acceptable to Agent in its sole
discretion.
(c) If a Default exists, Agent may, without liability to the Borrower
or any other Person, continue to transmit Pledged Loans or
Pledged Securities, together with
Page 24
all related loan documents and pool documents in Agent's
possession, to the applicable Investor, Approved Custodian or
other party acceptable to Agent in its sole discretion.
(d) Upon receipt of Notice from the Borrower, and payment of the
Release Amount with respect to a Pledged Loan identified by the
Borrower, Agent will release to the Borrower any Collateral
Documents relating to the redeemed Pledged Loan or the Pledged
Loans backing a Pledged Security that Agent has in its possession
and that have not been delivered to an Investor or Approved
Custodian.
3.7 Direction of Collateral Custodian. Subject to the Borrower's
satisfaction of all conditions precedent to any action required to be taken by
Collateral Custodian under the Custodial Agreement and if it has failed to take
any such action required of it, the Agent shall direct, without any obligation
to cause, the Collateral Custodian to take any such action.
3.8 Collection and Servicing Rights. So long as no Event of Default
shall have occurred and is continuing, the Borrower shall have a revocable and
nontransferable license to service and retain subservicers, and receive and
collect directly all sums payable to the Borrower in respect of the Collateral
other than proceeds of any Purchase Commitment or proceeds of the sale of any
Collateral. During the continuance of any Event of Default, the Agent or its
designee may revoke such license by notice to the Borrower (or its successor,
trustee, or receiver) whereupon the Borrower's rights to so service the
Collateral shall terminate. Agent or its designee shall thereafter be entitled
to service and receive and collect all sums payable to the Borrower in respect
of the Collateral, and in such case (a) the Agent or its designee in its
discretion may, in its own name or in the name of the Borrower or otherwise,
demand, ▇▇▇ for, collect or receive any money or property at any time payable or
receivable on account of or in exchange for any of the Collateral, but shall be
under no obligation to do so, (b) the Borrower shall, if the Agent so requests,
forthwith deliver the credit files and the servicing files for the Collateral to
the Agent or its designee and pay to the Agent, on behalf of the Lenders, at its
principal office all amounts thereafter received by the Borrower upon or in
respect of any of the Collateral, advising the Agent as to the source of such
funds, and (c) all amounts so received and collected by the Agent shall be held
by it for the benefit of the Lenders as part of the Collateral.
3.9 Return or Release of Collateral at End of Commitment. If (a) the
Commitment shall have expired or been terminated, and (b) no Advances, interest
or other Obligations evidenced by the Loan Documents or due under this Agreement
shall be outstanding and unpaid, the Agent shall direct the Collateral Custodian
to deliver or release all Collateral in its possession to the Borrower. The
receipt of the Borrower for any Collateral released or delivered to the Borrower
pursuant to any provision of this Agreement shall be a complete and full
acquittance for the Collateral so returned, and the Agent and the Lenders shall
thereafter be discharged from any liability or responsibility therefor.
4. CONDITIONS PRECEDENT.
4.1 Initial Advance. The obligation of the Lenders to make any
Advance under this Agreement is subject to the satisfaction, in the sole
discretion of the Agent, on or before the date thereof, of the following
conditions precedent, save and except that Agent may, at its sole option,
Page 25
waive any one or more of the following conditions prior to the Initial Advance
but such waiver shall not prevent Agent from requiring compliance of such
condition(s) prior to any subsequent Advance to the extent set forth in a
supplemental agreement entered into between the Borrower and Agent:
(a) Each of the Loan Documents shall have been duly executed and
delivered by the respective parties thereto and, shall be in full
force and effect and shall be in form and substance satisfactory
to each of the Lenders.
(b) UCC, tax lien and judgment searches of the appropriate public
records for the Borrower that do not disclose the existence of
any prior Lien on the Collateral other than in favor of Agent or
as permitted under this Agreement, or other than a Lien in favor
of any Person which Lien shall be terminated in accordance with
the provisions of this Agreement.
(c) Agent shall have received from the Borrower a copy, certified as
of a recent date by the appropriate officer of the State in which
such Person is organized to be true and complete, of the
corporate charter and any other organization documents of such
Person as in effect on such date of certification. The Borrower
shall furnish evidence satisfactory to the Agent that they are
each duly qualified and in good standing in each jurisdiction in
which it owns or leases property or in which the conduct of its
business requires it to so qualify, except where the failure to
so qualify could not have a materially adverse effect on the
business, assets, or financial condition of the Borrower.
(d) Agent shall have received from the Borrower financial statements
of the Borrower (and its Subsidiaries, on a consolidated basis)
containing a balance sheet as of December 31, 2006 (the
"Statement Date") and related statements of income, changes in
stockholders' equity and cash flows for the period ended on the
Statement Date and a balance sheet as of March 31, 2007 ("Interim
Date") and related statement of income for the period ended on
the Interim Date, all prepared in accordance with GAAP applied on
a basis consistent with prior periods and in the case of the
statements as of the Statement Date, audited by independent
certified public accountants of recognized standing acceptable to
the Agent, together with an Officer Certificate prepared as of
the Interim Date and executed by any officer of the Borrower.
(e) UCC financing statements naming the Borrower as debtor and the
Agent as secured party covering the Collateral shall have been
duly recorded and filed to the satisfaction of Agent and its
counsel.
(f) Agent shall have received evidence, in form, scope and substance
and with such insurance carriers, satisfactory to the Agent, for
all insurance policies required under any of the Loan Documents.
(g) There shall be no pending or threatened litigation involving the
Borrower which, in the judgment of the Agent, could have a
material adverse effect on such Person
Page 26
or the ability of the Borrower to perform its obligations under
the Loan Documents to which it is a party, and no judgment,
order, injunction or other similar injunction or other similar
restraint prohibiting any of the transactions contemplated hereby
shall exist.
(h) All action on the part of the Borrower necessary for the valid
execution, delivery and performance by the Borrower of this
Agreement and the other Loan Documents shall have been duly and
effectively taken, and evidence thereof satisfactory to the Agent
shall have been provided to the Agent. Agent shall have received
from the Borrower true copies of resolutions adopted by the their
respective boards of directors authorizing the transactions
described herein, each certified by each of their secretaries as
of a recent date to be true and complete.
(i) Agent shall have received from the Borrower an incumbency
certificate, dated as of the Closing Date, signed by a duly
authorized officer of the Borrower and giving the name and
bearing a specimen signature of each individual who shall be an
Authorized Representative: (a) to sign, in the name and on behalf
of such Person, each of the Loan Documents to which such Person
is or is to become a party; (b) with respect to the Borrower, to
make requests for Advances; and (c) to give notices and to take
other action on behalf of the Borrower under the Loan Documents.
(j) Agent shall have received a favorable written opinion of counsel
to the Borrower, dated as of the Closing Date in form, scope, and
substance satisfactory to the Agent, addressed to the Agent and
the Lenders.
(k) Copies of the certificates, documents or other written
instruments that evidence the Borrower's eligibility described in
Section 5.11, together with copies of all seller/servicer
contracts to which the Borrower is a party, all in form and
substance satisfactory to Agent.
(l) Borrower shall have paid to the Agent all fees and expenses
required pursuant to this Agreement and the other Loan Documents.
(m) Borrower shall have provided such additional instruments and
documents to the Agent and the Lenders as the Agent and the
Agent's counsel may have reasonably requested.
4.2 Each Advance. The obligation of the Lenders to make any Advance
under this Agreement is subject to the satisfaction, in the sole discretion of
the Agent, as of the date of each such Advance, of the following additional
conditions precedent, save and except that Agent may, at its sole option, waive
any one or more of the following conditions prior to the requested Advance but
such waiver shall not prevent Agent from requiring compliance of such
condition(s) prior to any subsequent Advance:
(a) In connection with an Advance, the Borrower shall have delivered
to the Agent the Advance Request, and the Borrower shall have
delivered to the Collateral Custodian a copy of the Advance
Request (which may be delivered
Page 27
electronically), and the Collateral Documents, called for under,
and shall have satisfied the procedures set forth in, Section 2.2
hereof and the applicable Exhibits hereto described in that
Section, according to the type of the requested Advance. All
items delivered to the Agent or the Collateral Custodian, as the
case may be, shall be satisfactory to the Agent or the Collateral
Custodian, in form and content, and the Agent or the Collateral
Custodian, as the case may be, may reject such of them as do not
meet the requirements of this Agreement or of the related
Purchase Commitment.
(b) The Collateral Custodian shall have given written or electronic
notice to the Agent of the Mortgage Loans against which Advances
may be made, followed by a Collateral Status Report as provided
for and defined in the Custodial Agreement.
(c) The Agent shall have received evidence satisfactory to it as to
the making and/or continuation of any book entry or the due
filing and recording in all appropriate offices of all financing
statements and other instruments as may be necessary to perfect
the security interest of the Agent in the Collateral under the
Uniform Commercial Code of New York or other applicable law.
(d) The representations and warranties of the Borrower contained in
Article 5 hereof shall be accurate and complete in all material
respects as if made on and as of the date of each Advance (except
to the extent of changes resulting from transactions contemplated
and permitted by this Agreement and the other Loan Documents and
changes occurring in the ordinary course of business that singly
or in the aggregate are not materially adverse, and except to the
extent that such representations and warranties relate expressly
to an earlier date, and, unless Agent and each of the Lenders is
notified to the contrary prior to the disbursement of the
requested Advance).
(e) The Borrower shall have performed all agreements to be performed
by it hereunder, including without limitation, the payment of all
fees when due hereunder, and, as of the date of the Advance
Request, and after giving effect to the requested Advance, there
shall exist no Default or Event of Default hereunder.
Acceptance of the proceeds of the requested Advance by the Borrower
shall be deemed a representation by the Borrower that all conditions set forth
in this Article 4 shall have been satisfied as of the date of such Advance.
5. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants to the Agent and the
Lenders, as of the date of this Agreement and (unless otherwise notified in
writing by the Borrower and Agent, in its sole discretion, approves in writing)
as of the date of each Advance Request and the making of each Advance, that:
5.1 Organization; Good Standing; Subsidiaries. The Borrower and each
Subsidiary of the Borrower is a corporation duly organized, validly existing and
in good standing under the
Page 28
laws of the jurisdiction of its incorporation, has the full legal power and
authority to own its property and to carry on its business as currently
conducted and is duly qualified as a foreign corporation to do business and is
in good standing in each jurisdiction in which the transaction of its business
makes such qualification necessary, except in jurisdictions, if any, where a
failure to be in good standing has no material adverse effect on the business,
operations, assets or financial condition of the Borrower or any such
Subsidiary. For the purposes hereof, good standing shall include qualification
for any and all licenses and payment of any and all taxes required in the
jurisdiction of its incorporation and in each jurisdiction in which the Borrower
transacts business. The Borrower has no Subsidiaries except as set forth on
Schedule 5.1 hereto. Schedule 5.1 sets forth with respect to each such
Subsidiary, its name, address, place of incorporation, each state in which it is
qualified as a foreign corporation, and the percentage ownership of the Borrower
in such Subsidiary.
5.2 Authorization and Enforceability. The Borrower has all requisite
corporate power and authority to execute, deliver, create, issue, comply and
perform this Agreement, the Notes and all other Loan Documents to which the
Borrower is party and to make the borrowings hereunder. The execution, delivery
and performance by the Borrower of this Agreement, the Notes and all other Loan
Documents to which the Borrower is party and the making of the borrowings
hereunder and thereunder, have been duly and validly authorized by all necessary
corporate action on the part of the Borrower (none of which actions has been
modified or rescinded, and all of which actions are in full force and effect)
and do not and will not conflict with or violate any provision of law or of the
articles of incorporation or by-laws of the Borrower, conflict with or result in
a breach of or constitute a default or require any consent under any contracts
to which Borrower is a party, or result in the creation of any Lien upon any
property or assets of the Borrower other than the Lien on the Collateral granted
hereunder, or result in or require the acceleration of any Indebtedness of the
Borrower pursuant to any agreement, instrument or indenture to which the
Borrower is a party or by which the Borrower or its property may be bound or
affected. This Agreement, the Notes and all other Loan Documents contemplated
hereby or thereby constitute legal, valid, and binding obligations of the
Borrower, enforceable in accordance with their respective terms, except as
limited by bankruptcy, insolvency or other such laws affecting the enforcement
of creditors' rights generally.
5.3 Financial Condition.The balance sheet of the Borrower provided to
Agent pursuant to Section 4.1(d) hereof (and if applicable, its Subsidiaries, on
a consolidating and consolidated basis) as at the Statement Date, and the
related statements of income, changes in stockholders' equity, and cash flows
for the fiscal year ended on the Statement Date, heretofore furnished to the
Agent, fairly present in accordance with GAAP the financial condition of the
Borrower and its Subsidiaries as at the Statement Date and the Interim Date and
the results of its and their operations for the fiscal period ended on the
Statement Date and the Interim Date. The Borrower had, on the Statement Date and
the Interim Date no known material liabilities of a kind required to be
disclosed on a balance sheet or the notes thereto in accordance with GAAP, or
any known redemption obligations, hedging liabilities, or other off-balance
sheet financial transactions as to which there is recourse to the Borrower. Said
financial statements were prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved. Since the Interim Date, there
has been no material adverse change in the business, operations, assets or
financial condition of the Borrower and its Subsidiaries taken as a whole,
Page 29
nor is the Borrower aware of any state of facts particular to the Borrower which
(with or without notice or lapse of time or both) would or could result in any
such material adverse change.
5.4 Litigation. Except as disclosed on Schedule 5.4, there are no
actions, claims, suits or proceedings pending, or to the knowledge of the
Borrower, threatened or reasonably anticipated against or affecting the Borrower
or any Subsidiary of the Borrower in any court or before any arbitrator or
before any government commission, board, bureau or other administrative agency
which would reasonably be expected to, either in any case or in the aggregate,
materially adversely affect the properties, assets, financial condition or
business of such Person or materially impair the right of such Person to carry
on business substantially as now conducted by it, or result in any substantial
liability not adequately covered by insurance, or for which adequate reserves
are not maintained on the balance sheet of such Person (considering the Borrower
and its Subsidiaries as a single Person for purposes of this Section 5.4), or
which question the validity of this Agreement or any of the other Loan
Documents, or any action taken or to be taken pursuant hereto or thereto.
5.5 Compliance with Laws. Neither the Borrower nor any Subsidiary of
the Borrower is in violation of any provision of any law, or of any judgment,
award, rule, regulation, order, decree, writ or injunction of any court or
public regulatory body or authority which could reasonably be expected to have a
material adverse effect on the business, operations, assets or financial
condition of the Borrower and its Subsidiaries taken as a whole.
5.6 Regulation U and X. The Borrower is not engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying Margin Stock, and no part of the proceeds of
any Advances made hereunder will be used for the purpose of purchasing or
carrying any "margin security" or "margin stock" as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 221 and 224.
5.7 Holding Company and Investment Company Act None of the Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
5.8 Agreements. Neither the Borrower nor any Subsidiary of the
Borrower is a party to any agreement, instrument or indenture, or subject to any
restriction, materially and adversely affecting its business, operations, assets
or financial condition, except as disclosed in the financial statements
described in Section 5.3 hereof. The Borrower and each Subsidiary of the
Borrower are not in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any agreement,
instrument, or indenture which default could have a material adverse effect on
the business, operations, properties or financial condition of the Borrower as a
whole. No holder of any Indebtedness for money borrowed having a principal
amount of $500,000 or more by the Borrower or of any of its Subsidiaries has
given notice of any alleged default thereunder or, if given, the same has been
cured or will be cured by Borrower within the cure period provided therein, and
no liquidation or dissolution of
Page 30
the Borrower or any of its Subsidiaries and no receivership, insolvency,
bankruptcy, reorganization or other similar proceedings relative to the Borrower
or any of its Subsidiaries or any of their respective properties is pending, or
to the knowledge of the Borrower, threatened.
5.9 Title to Properties. The Borrower and each Subsidiary of the
Borrower has good, valid, and in the case of real property insurable and
marketable title to all of its material properties and assets (whether real or
personal, tangible or intangible) reflected on the financial statements
described in Section 5.3 hereof, and all such properties and assets are free and
clear of all Liens except as disclosed in such financial statements and not
prohibited under this Agreement.
5.10 ERISA. Neither the Borrower nor any entity that could be treated
as a single employer with the Borrower under Internal Revenue Code Section
414(b), (c), (m), (n) or (o), now or at any time during the sixty month period
ending on the date hereof, sponsor(ed), maintain(ed) or contribute(d) to (or
have or had an obligation to contribute to) any pension, profit sharing, stock
option, insurance or other arrangement or plan for current or former employees
that is subject to Title IV of the Employer Retirement Income Security Act of
1974, as now or hereafter amended ("ERISA") or ERISA Section 302 except as may
be identified to Agent in writing (which writing shall be supplemented, within
30 days of Agent's request, by a copy of the arrangement or plan, and the
financial statements and accountant's reports for such arrangement or plan) by
the Borrower from time to time ("ERISA Plan") and no "Reportable Event," as
defined for purposes of Section 4043 of ERISA, has occurred with respect to any
such ERISA Plan. The granting of the Loan, the performance by the Borrower of
its obligations under the Loan Documents, and the Borrower's conducting of its
operations do not and will not violate any provisions of ERISA or any ERISA
Plan.
5.11 Eligibility. Except as permitted in Section 7.2 hereof, Borrower
is and will remain at all times approved and qualified and in good standing as a
lender or seller/servicer, as set forth below, and meets all requirements
applicable to its status as:
(a) for CMC and solely with respect to Pledged Loans that are FHA
fully insured Mortgage Loans, a FHA approved mortgagee, eligible
to originate, purchase, hold, sell and service FHA fully insured
Mortgage Loans.
(b) for CMC and solely with respect to Pledged Securities that are
guaranteed by ▇▇▇▇▇▇ ▇▇▇, a ▇▇▇▇▇▇ ▇▇▇ approved seller/servicer
of Mortgage Loans and issuer of Mortgage-backed Securities
guaranteed by ▇▇▇▇▇▇ Mae.
(c) for CMC, a ▇▇▇▇▇▇ ▇▇▇ approved seller/servicer of Mortgage Loans,
eligible to originate, purchase, hold, sell and service Mortgage
Loans to be sold to ▇▇▇▇▇▇ Mae.
(d) for CMC, a ▇▇▇▇▇▇ ▇▇▇ approved and qualified Delegated
Underwriting and Servicing Lender, eligible to process,
underwrite, hold, sell to ▇▇▇▇▇▇ Mae and service ▇▇▇▇▇▇ ▇▇▇
Mortgage Loans under the DUS Program.
Page 31
(e) for CMC and CMP, a ▇▇▇▇▇▇▇ Mac approved seller/servicer of
Mortgage Loans, eligible to originate, purchase, hold, sell and
service Mortgage Loans to be sold to ▇▇▇▇▇▇▇ Mac.
5.12 Special Representations Concerning Collateral. The Borrower
hereby represents and warrants to the Agent and each Lender, as of the date of
this Agreement and as of the date of each Advance, that:
(a) The Borrower has not selected the Collateral in a manner so as to
affect adversely Lender's interests.
(b) The Borrower is the legal and equitable owner and holder subject
to normal prerecorded assignments of mortgage to ▇▇▇▇▇▇ Mae and
▇▇▇▇▇▇▇ Mac, free and clear of all Liens (other than Liens
granted under this Agreement) of the Pledged Assets. All Pledged
Assets and related Purchase Commitments have been duly authorized
and validly issued to the Borrower, and all of the foregoing
items of Collateral comply with all of the requirements of this
Agreement, and have been and will continue to be validly pledged
or assigned to Lender, subject to no other Liens
(c) The Borrower has, and will continue to have, the full right,
power and authority to pledge the Collateral pledged and to be
pledged by it hereunder.
(d) Each Mortgage Loan and each related document included in the
Pledged Loans (1) has been duly executed and delivered by the
parties to that Mortgage Loan and that related document, (2) has
been made in compliance with all applicable laws, rules and
regulations (including all laws, rules and regulations relating
to usury), (3) is and will continue to be a legal, valid and
binding obligation, enforceable in accordance with its terms,
without setoff, counterclaim or defense in favor of the mortgagor
under the Mortgage Loan or any other obligor on the Mortgage Note
and (4) has not been modified, amended or any requirements of
which waived, except in a writing that is part of the Collateral
Documents. No party to any Mortgage Loan or related document is
in violation of any applicable law, rule or regulation if the
violation would impair the collectibility of the Mortgage Loan or
the performance by the mortgagor or any other obligor of its
obligations under the Mortgage Note or any related document.
(e) Each Pledged Loan is secured by a Mortgage on real property
located in one of the states of the United States or the District
of Columbia.
(f) Each Pledged Loan has been closed or will be closed and funded
with the Advance made against it.
(g) Each Pledged Loan that is not an FHA Construction Mortgage Loan
has been fully advanced in the face amount of its Mortgage Note.
The Agent acknowledges and agrees that in certain instances, a
portion of the proceeds of a Pledged Loan, although advanced to
the borrower thereunder, will be held by the
Page 32
Borrower in escrow to be disbursed upon the completion of repairs
to the subject property or upon the achievement of specified
factors.
(h) Each Pledged Loan is secured by a first Lien on the premises
described in that Mortgage. Each Pledged Loan has or will have a
title insurance policy, in ALTA form or equivalent, from a
recognized title insurance company, insuring the priority of the
Lien of the Mortgage and meeting the usual requirements of
Investors purchasing those Mortgage Loans.
(i) Each Property has been evaluated or appraised in accordance with
Title XI of FIRREA, to the extent required.
(j) The Mortgage Note for each Pledged Loan is (1) payable or
endorsed to the order of the Borrower, (2) an "instrument' within
the meaning of Section 9-102 of the Uniform Commercial Code of
all applicable jurisdictions and (3) is denominated and payable
in United States dollars.
(k) No default has existed for 60 days or more under any Mortgage
Loan included in the Pledged Loans.
(l) The Borrower has complied and will continue to comply with all
laws, rules and regulations in respect of the FHA insurance of
each Mortgage Loan included in the Pledged Loans designated by
the Borrower as an FHA insured or VA guaranteed Mortgage Loan,
and such insurance or guarantee is and will continue to be in
full force and effect.
(m) All fire and casualty policies covering Mortgaged Property
encumbered by a Pledged Loan (1) name the Borrower and its
successors and assigns as the insured under a standard mortgagee
clause, (2) are and will continue to be in full force and effect,
and (3) afford and will continue to afford insurance against fire
and such other risks as are usually insured against in the broad
form of extended coverage insurance from time to time available.
(n) Pledged Loans encumbering Mortgaged Property located in a special
flood hazard area designated as such by the Secretary of HUD are
and shall continue to be covered by special flood insurance under
the National Flood Insurance Program.
(o) Each Pledged Loan against which a Advance is made on the basis of
a Purchase Commitment meets all of the requirements of that
Purchase Commitment, and each Pledged Security against which an
Advance is outstanding meets all of the requirements of the
related Purchase Commitment.
(p) Pledged Loans that are intended to be exchanged for Agency
Securities comply or, prior to the issuance of the Agency
Securities will comply, with the requirements of any governmental
instrumentality, department or agency or any other Person issuing
or guaranteeing the Agency Securities.
Page 33
(q) Pledged Loans that are intended to be used in the formation of
Mortgage-backed Securities (other than Agency Securities) comply
with the requirements of the issuer of the Mortgage-backed
Securities (or its sponsor) and of the Rating Agencies.
(r) None of the Pledged Loans is a graduated payment Mortgage Loan or
has a shared appreciation or other contingent interest feature,
and each Pledged Loan provides for periodic payments of all
accrued interest on the Mortgage Loan on at least a monthly
basis.
(s) The Borrower has no ownership interest, right to acquire any
ownership interest or equivalent economic interest in any
property securing a Mortgage Loan or the mortgagor under the
Mortgage Loan or any other obligor on, or guarantor of, the
Mortgage Note.
(t) The original assignments of Mortgage and of UCC financing
statements delivered to the Agent for each Pledged Loan are in
recordable form and comply with all applicable laws and
regulations governing the filing and recording of such documents.
(u) Each Pledged Loan secured by real property to which a
manufactured home is affixed will create a valid Lien on that
manufactured home that will have priority over any other Lien on
the manufactured home, whether or not arising under applicable
real property law or the UCC or other applicable law.
(v) Each FHA-insured Mortgage Loan included in the Pledged Loans
meets all applicable Legal Requirements and any other
governmental requirements for such insurance. The Borrower has
complied and will continue to comply with all laws, rules and
regulations with respect to the FHA insurance of each Pledged
Loan designated by the Borrower as an FHA-insured Mortgage Loan,
and such insurance is and will continue to be in full force and
effect.
(w) For FHA-insured Pledged Loans that will be used to back ▇▇▇▇▇▇
Mae Mortgage-backed Securities, the Borrower received from ▇▇▇▇▇▇
Mae confirmation notices for additional commitment authority and
pool numbers, and there remains available under those agreements
a commitment on the part of ▇▇▇▇▇▇ ▇▇▇ sufficient to permit the
issuance of ▇▇▇▇▇▇ Mae Mortgage-backed Securities in an amount at
least equal to the amount of the Pledged Loans designated by the
Borrower as the Mortgage Loans to be used to back those ▇▇▇▇▇▇
Mae Mortgage-backed Securities; each of those confirmation
notices is in full force and effect; each of those Pledged Loans
has been assigned by the Borrower to one of those pool numbers
and a portion of the available ▇▇▇▇▇▇ ▇▇▇ commitment has been
allocated to this Agreement by the Borrower, in an amount at
least equal to those Pledged Loans; and each of those assignments
and allocations has been reflected in the books and records of
the Borrower.
Page 34
(x) Agent will have a valid and duly perfected security interest,
without further requirements for perfection, in (a) the Pledged
Loans and Pledged Securities upon the delivery thereof to the
Collateral Custodian for the benefit of the Agent and the Lenders
and (b) the other Collateral described in Section 3.3 hereof to
the extent that a security interest therein may be perfected
under Article 9 of the UCC solely by filing a financing statement
with the Secretary of State of Delaware, which lien shall be
superior to any other interests therein.
5.13 Franchises, Patents, Copyrights, etc. Borrower possesses all
franchises, patents, copyrights, trademarks, trade names, licenses and permits,
and rights in respect of the foregoing, adequate for the conduct of its business
substantially as now conducted, without known conflict with any rights of
others.
5.14 Proper Names. Borrower does not originate Mortgage Loans or
otherwise conduct business under any names other than its legal name and the
assumed names set forth on Schedule 5.14. The Borrower has made all filings and
taken all other action as may be required under the laws of any jurisdiction in
which it originates Mortgage Loans or otherwise conducts business under any
assumed name. The Borrower's use of the assumed names set forth on Schedule 5.14
does not conflict with any other Person's legal rights to any such name, nor
otherwise give rise to any liability by the Borrower to any other Person.
5.15 Direct Benefit From Loans. The Borrower has received, or, upon
the execution and funding thereof, will receive (a) direct and indirect benefit
from the making and execution of this Agreement and the other Loan Documents to
which it is a party, and (b) fair and independent consideration for the entry
into, and performance of, this Agreement and the other Loan Documents to which
it is a party. Contemporaneously with the disbursements of each Advance by the
Lenders to the Borrower, all such proceeds will be used to for the purposes set
forth in Section 2.1 hereof and none other.
5.16 Loan Documents Do Not Violate Other Documents. Neither the
execution and delivery by the Borrower of this Agreement or any other Loan
Document to which it is a party nor the consummation of the transactions herein
and therein contemplated, nor the performance of, or compliance with, the terms
and provisions hereof and thereof, does or will contravene, breach or conflict
with any provision of either of its articles of incorporation or by-laws, or any
applicable law, statute, rule or regulation or any judgment, decree, writ,
injunction, franchise, order or permit applicable to the Borrower or its assets
or properties, or does or will conflict or be inconsistent with, or does or will
result in any breach or default of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of any Lien upon any of the property or assets of the Borrower
pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement,
or other instrument to which the Borrower is a party or by which the Borrower or
any of its property may be bound, the contravention, conflict, inconsistency,
breach or default of which will have a materially adverse effect on the
Borrower's condition, financial or otherwise, or affect its ability to perform,
promptly and fully, its obligations hereunder or under any of the other Loan
Documents.
5.17 Continuing Authority of Authorized Representatives. Agent and
each of the Lenders are authorized to rely upon the continuing authority of the
Persons hereafter designated
Page 35
by the Borrower ("Authorized Representatives") to bind the Borrower with respect
to all matters pertaining to the Loan and the Loan Documents including, but not
limited to, the submission of requests for Advances, and certificates with
regard thereto. Such authorization may be changed only upon written notice to
Agent accompanied by evidence, reasonably satisfactory to Agent, of the
authority of the person giving such notice and such notice shall be effective
not sooner than five (5) Business Days following receipt thereof by Agent. The
Authorized Representatives as of the date of this Agreement are listed on
Schedule 5.17.
5.18 Consents Not Required. Except for those consents that have
already been obtained and delivered to Agent or required as a condition to any
Advance hereunder, no consent of any Person and no consent, license, permit,
approval, or authorization of, exemption by, or registration or declaration
with, any Tribunal is required in connection with the execution, delivery,
performance, validity, or enforceability of this Agreement or any of the Loan
Documents by the Borrower.
5.19 Material Fact Representations. Neither the Loan Documents nor any
other agreement, document, certificate, or written statement furnished to the
Agent or any Lender by or on behalf of the Borrower in connection with the
transactions contemplated in any of the Loan Documents contains any untrue
statement of a material adverse fact. There are no facts or conditions known to
the Borrower and which Borrower believes would have a materially adverse effect
on any of the Collateral and/or the financial condition and business of the
Borrower which have not been fully disclosed, in writing, to the Agent and the
Lenders, it being understood that this representation is made as of, and shall
be limited to the date of this Agreement. All writings heretofore or hereafter
exhibited or delivered to the Agent or any Lender by or on behalf of the
Borrower are and will be genuine and what they purport to be.
5.20 Place of Business. The principal place of business of the
Borrower and the chief executive office of the Borrower and the office where it
keeps its financial books and records relating to its property and all contracts
relating thereto and all accounts arising therefrom are located at its principal
office at New York, New York at its principal office at New York, New York, or
its regional offices at Jersey City, New Jersey, Irvine, California, and/or
Irving, Texas, as of the date of this Agreement.
5.21 Tax Returns and Payments. All federal, state and local income,
excise, property and other tax returns required to be filed with respect to
Borrower's operations and those of its Subsidiaries in any jurisdiction have
been filed on or before the due date thereof (plus any applicable extensions);
all such returns are true and correct; all taxes, assessments, fees and other
governmental charges upon the Borrower, and Borrower's Subsidiaries and upon its
property, income or franchises, which are due and payable have been paid,
including, without limitation, all FICA payments and withholding taxes, if
appropriate, other than those which are being contested in good faith by
appropriate proceedings, diligently pursued and as to which the Borrower has
established adequate reserves determined in accordance with GAAP, consistently
applied. The amounts reserved, as a liability for income and other taxes
payable, in the financial statements described in Section 5.3 hereof are
sufficient for payment of all unpaid federal, state and local income, excise,
property and other taxes, whether or not disputed, of the Borrower and its
Subsidiaries, accrued for or applicable to the period and on the dates of such
financial statements and all years and periods prior thereto and for which the
Borrower, and Borrower's
Page 36
Subsidiaries may be liable in their own right or as transferee of the assets of,
or as successor to, any other Person.
5.22 Certain Transactions. Except as set forth in Schedule 5.21
hereof, as of the date of this Agreement, none of the officers, trustees,
directors, or employees of the Borrower or any of their Subsidiaries is
presently a party to any transaction with the Borrower or any of their
Subsidiaries (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement (i) providing for the
furnishing of services to or by, (ii) providing for rental of real or personal
property to or from, or (iii) otherwise requiring payments to or from, any
officer, trustee, director or such employee or any corporation, partnership,
trust or other entity in which any officer, trustee, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
5.23 No Broker or Finder. None of the Borrower nor anyone on behalf
thereof has dealt with any broker, finder or other person or entity who or which
may be entitled to a broker's or finder's fee, or other compensation, payable by
the Agent or any of the Lenders in connection with this Loan.
5.24 Special Representations Concerning Servicing Portfolio. SCHEDULE
5.24 is a true and complete list of the Borrower's Servicing Portfolio as of the
date set forth therein. The Borrower hereby represents and warrants to Agent and
the Lenders, as of the date of this Agreement and as of the date of each Advance
Request and the making of each Advance, that:
(a) The Borrower is the legal and equitable owner and holder, free
and clear of all Liens of the Servicing Contracts.
(b) Except as otherwise disclosed to the Agent and the Lenders, all
of the Borrower's servicing rights under the Servicing Contracts
constitute primary servicing rights.
(c) Each Servicing Contract is in full force and effect and is legal,
valid and enforceable in accordance with its terms, and no
default or event that, with notice or lapse of time or both,
would become a default, exists under any Servicing Contract,
except where the failure of the foregoing would not materially
adversely affect the Borrower's business or assets.
(d) Each right to the payment of money under the Servicing Contracts
is genuine and enforceable in accordance with its terms against
the parties obligated to pay the same, which terms have not been
modified or waived in any respect or to any extent, except where
the failure of the foregoing would materially adversely affect
the Borrower's business or assets.
(e) To the best of the Borrower's knowledge, no obligor has any
defense, set off, claim or counterclaim against the Borrower that
can be asserted against Agent or any Lender, whether in any
proceeding to enforce Agent's rights in the related Mortgage Loan
or otherwise, except where the failure of the foregoing would not
materially adversely affect the Borrower's business or assets.
Page 37
5.25 Special Representations Concerning FHA Mortgage Loans. The
Borrower hereby represents and warrants to Agent and the Lenders, as of the date
of this Agreement and as of the date of each Advance Request and the making of
each Advance, that:
(a) Each FHA-insured Mortgage Loan included in the Pledged Loans
meets in all material respects all applicable Legal Requirements
and any other governmental requirements for such insurance. The
Borrower has complied and will continue to comply in all material
respects with all laws, rules and regulations with respect to the
FHA insurance of each Pledged Loan designated by the Borrower as
an FHA-insured Mortgage Loan, and such insurance is and will
continue to be in full force and effect.
(b) For FHA-insured Pledged Loans that will be used to back ▇▇▇▇▇▇
Mae Mortgage-backed Securities, the Borrower received from ▇▇▇▇▇▇
Mae confirmation notices for additional commitment authority and
pool numbers, and there remains available under those agreements
a commitment on the part of ▇▇▇▇▇▇ ▇▇▇ sufficient to permit the
issuance of ▇▇▇▇▇▇ Mae Mortgage-backed Securities in an amount at
least equal to the amount of the Pledged Loans designated by the
Borrower as the Mortgage Loans to be used to back those ▇▇▇▇▇▇
Mae Mortgage-backed Securities; each of those confirmation
notices is in full force and effect; each of those Pledged Loans
has been assigned by the Borrower to one of those pool numbers
and a portion of the available ▇▇▇▇▇▇ ▇▇▇ commitment has been
allocated to this Agreement by the Borrower, in an amount at
least equal to those Pledged Loans; and each of those assignments
and allocations has been reflected in the books and records of
the Borrower.
5.26 Ownership, Subsidiaries and taxpayer identification numbers.
(a) All of the stockholders of the Borrower and a description of the
ownership interests held by the same, and of each of the
Borrower's Subsidiaries, are listed on Schedule 5.26 and no
additional ownership interests, or rights or instruments
convertible into such ownership interests, exist.
(b) The taxpayer identification numbers and state organizational
numbers (if applicable) of the foregoing Persons are accurately
stated on Schedule 5.26.
(c) Borrower is the owner, free and clear of all liens and
encumbrances, of all of the issued and outstanding capital stock,
membership interests or other equity interests of each of their
respective Subsidiaries.
Each request by the Borrower for an Advance: (i) shall constitute an
affirmation by the Borrower on behalf of itself that the foregoing
representations and warranties remain true and correct as of the date of such
request (except as to matters specifically disclosed in writing to Agent and
each of the Lenders prior to or simultaneously with such written request, and
except to the extent of changes resulting from transactions contemplated and
permitted by this Agreement and the other Loan Documents and changes occurring
in the ordinary course of business that singly or in the aggregate are not
materially adverse, and except to the extent that
Page 38
such representations and warranties relate expressly to an earlier date) and,
unless Agent and each of the Lenders is notified to the contrary prior to the
disbursement of the requested Advance, will be so on the date of such Advance,
and (ii) shall constitute the representation and warranty of the Borrower that
the information set forth in each such request is true and correct and omits no
material fact necessary to make the same not misleading.
6. AFFIRMATIVE COVENANTS.
The Borrower hereby covenants and agrees with the Agent and the Lenders
that, so long as the Commitment is outstanding or there remain any Obligations
of the Borrower to be paid or performed under this Agreement or under any other
Loan Document, the Borrower shall:
6.1 Payment of Notes. Punctually pay or cause to be paid the
principal of, interest on and all other amounts payable hereunder and under the
Notes in accordance with the terms thereof.
6.2 Financial Statements and Other Reports. Deliver or cause to be
delivered to the Agent for each Borrower:
(a) As soon as practicable, but in any event not later than sixty
(60) days after the end of each fiscal quarter of the Borrower
(including for the fourth fiscal quarter, which shall be subject
to normal year end audit adjustments), the management prepared
consolidating balance sheet of the Borrower and its Subsidiaries
at the end of such quarter, and the related management prepared
consolidating statements of earnings for such quarter, each
setting forth in comparative form the figures for the same fiscal
quarter of the previous fiscal year and all such statements to be
in reasonable detail, prepared in accordance with GAAP.
(b) As soon as practicable, but in any event not later than one
hundred twenty (120) days after the end of each fiscal year of
the Borrower, the audited consolidated and unaudited
consolidating balance sheet of the Borrower and its Subsidiaries
at the end of such year, and the related statements of earnings
and cash flows for such year, each setting forth in comparative
form the figures for the previous fiscal year and all such
statements to be in reasonable detail, prepared in accordance
with GAAP, and accompanied by an auditor's report prepared
without qualification by an independent certified public
accountant reasonably acceptable to the Agent.
(c) Concurrently with the delivery of the financial statements
referred to in Sections 6.2 (a) and (b) above, a certificate (to
be in the form of Exhibit F or on such other form as the Agent
may from time to time prescribe) of an Authorized Representative
stating that, to the best of such Authorized Representative's
knowledge, the Borrower during such period observed or performed
in all material respects all of their covenants and other
agreements, and satisfied in all material respects every material
condition, contained in this Agreement or the other Loan
Documents to be observed, performed or satisfied by them, and
that such Authorized Representative has obtained no knowledge of
any Default except
Page 39
as specified in such certificate and such certificate shall
include the calculations in reasonable detail required to
indicate the Borrower's compliance with financial covenants set
forth in Article 7 hereof.
(d) As soon as available and in any event within sixty (60) days
after the end of each fiscal quarter in the Borrower's fiscal
year, a consolidated loan production report as of the end of that
fiscal quarter, presenting the total dollar volume and the number
of Mortgage Loans originated and closed or purchased during that
fiscal quarter and for the fiscal year-to-date, specified by
property type and loan type.
(e) As soon as available and in any event within 60 days after the
end of each calendar quarter, a consolidated report ("Servicing
Portfolio Report") as of the end of the calendar quarter, as to
all Mortgage Loans the servicing rights to which are owned by the
Borrower (specified by investor type, recourse and non-recourse)
regardless of whether the Mortgage Loans are Pledged Loans. The
Servicing Portfolio Report must indicate which Mortgage Loans (1)
are current and in good standing, (2) are more than 30, 60 or 90
days past due, (3) are the subject of pending bankruptcy or
foreclosure proceedings, or (4) have been converted (through
foreclosure or other proceedings in lieu of foreclosure) into
real estate owned by, the Borrower.
(f) At the Agent's request, a commitment summary and pipeline report
dated as of the end of such month and in form, substance and
scope acceptable to the Agent.
(g) Promptly after the Borrower's receipt thereof, copies of all
accountants' management letters delivered to the Borrower or its
Subsidiaries.
(h) Within ten (10) days after filing, copies of all regular or
periodic financial and other reports, if any, which the Borrower
shall file with the Securities and Exchange Commission or any
governmental agency successor thereto and copies of any audits
completed by ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇, FHA, or HUD.
(i) From time to time, with reasonable promptness, such further
information regarding the business, operations, properties or
financial condition of the Borrower as the Agent may reasonably
request.
6.3 Maintenance of Existence; Conduct of Business. Preserve and
maintain its corporate existence in good standing and all of its rights,
privileges, licenses and franchises necessary in the normal conduct of its
business, including, without limitation, its eligibility as lender,
seller/servicer and issuer described under Section 5.11 hereof; conduct its
business in an orderly and efficient manner; maintain a net worth of acceptable
assets as required by HUD at any and all times for maintaining the Borrower's
status as a FHA approved mortgagee; and make no material change in the nature or
character of its business if it would result in the Borrower engaging in a
business other than the mortgage banking business a majority of which shall
focus on multifamily mortgages consistent with its historical business.
Page 40
6.4 Compliance with Applicable Laws. Comply with the requirements of
all applicable laws, rules, regulations and orders of any governmental
authority, a breach of which could materially adversely affect its business,
operations, assets, or financial condition, except where contested in good faith
and by appropriate proceedings, and with sufficient reserves established
therefor.
6.5 Inspection of Properties and Books. Permit authorized
representatives of the Agent and any Lender to (a) discuss the business,
operations, assets and financial condition of the Borrower and Borrower's
Subsidiaries with their officers and employees and to examine their books of
account, records, reports and other papers and make copies or extracts thereof,
and (b) inspect all of the Borrower's property and all related information and
reports at the expense of such Lender or Agent, as applicable, all at such
reasonable times as the Agent or any Lender may request.
6.6 Notice. Give prompt written notice to the Agent of (a) any
action, suit or proceeding instituted by or against the Borrower or any of its
Subsidiaries in any federal or state court or before any commission or other
regulatory body (federal, state or local, domestic or foreign) which action,
suit or proceeding has at issue in excess of FIVE HUNDRED THOUSAND AND NO/100
DOLLARS ($500,000.00) (except for normal collection and foreclosure proceedings
initiated by the Borrower in connection with a Mortgage Loan or any other
Mortgage loan), or any such proceedings threatened against the Borrower, or any
of Borrower's Subsidiaries in writing containing the details thereof, (b) the
filing, recording or assessment of any federal, state or local tax Lien against
it, or any of its assets or any of its Subsidiaries, (c) the occurrence of any
Event of Default hereunder or the occurrence of any Default and continuation
thereof for five (5) days, (d) the suspension, revocation or termination of the
Borrower's eligibility, in any respect, as approved lender, seller/servicer or
issuer as described under Section 5.11 hereof, (e) the transfer, loss or
termination of any Servicing Contract with an Investor to which the Borrower is
a party, or which is held for the benefit of the Borrower, and the reason for
such transfer, loss or termination, if known to the Borrower, (f) any change in
its accounting method as in effect on the date of this Agreement or change in
its fiscal year ending date from December 31, and (f) any other action, event or
condition of any nature which is reasonably likely to result in a material
adverse effect upon the financial condition of the Borrower and Borrower's
Subsidiaries taken as a whole.
6.7 Payment of Debt, Taxes, etc. Pay and perform all Indebtedness for
money borrowed by the Borrower having a principal amount of $500,000 or more,
and cause to be paid and performed all Indebtedness for money borrowed by its
Subsidiaries having a principal amount of $500,000 or more in accordance with
the terms thereof and pay and discharge or cause to be paid and discharged all
taxes, assessments and governmental charges, tax Liens, or levies imposed upon
the Borrower or its Subsidiaries, or upon their respective income, receipts or
properties before the same shall become past due, as well as all lawful claims
for labor, materials and supplies or otherwise which, if unpaid, might become a
Lien or charge upon such properties or any part thereof; provided, however, that
the Borrower and its Subsidiaries shall not be required to pay obligation,
Indebtedness, taxes, assessments or governmental charges or levies or claims for
labor, materials or supplies for which the Borrower or its Subsidiaries shall
have obtained an adequate bond or adequate insurance or which are being
contested in good faith and by proper proceedings which are being reasonably and
diligently pursued if such proceedings do
Page 41
not involve any likelihood of the sale, forfeiture or loss of any such property
or any interest therein while such proceedings are pending, and provided further
that book reserves adequate under GAAP shall have been established with respect
thereto, to the extent required, and provided further that the owing Person's
title to, and its right to use, its property is not materially adversely
affected thereby.
6.8 Insurance. Maintain and cause each of its Subsidiaries to
maintain insurance with respect to its other properties with financially sound
and reputable insurers, insurance with respect to such properties and its
business against such casualties and contingencies as shall be in accordance
with the general practices of businesses engaged in similar activities in
similar geographic areas and in amounts, containing such terms, in such forms
and for such periods as may be reasonable and prudent. Schedule 6.8 sets forth
all insurance maintained by the Borrower at the date of this Agreement.
6.9 Closing Instructions. Indemnify and hold the Agent and each
Lender and all those claiming by, through or under the Agent and each of the
Lenders, harmless from and against any loss, including reasonable attorneys'
fees and costs, attributable to the failure of any title insurance company,
agent or approved attorney to comply with Borrower's disbursement or instruction
letter relating to any Mortgage Loan. Agent has the right to pre-approve the
Borrower's disbursement or instruction letter to the title insurance company,
agent or approved attorney in any case in which the Borrower intends to obtain a
Advance against the Mortgage Loan to be created at settlement or to pledge that
Mortgage Loan as Collateral under this Agreement. The Borrower's disbursement or
instruction letter must state that Agent, for the benefit of the Lenders has a
security interest in any amounts advanced to fund a Mortgage Loan and in the
Mortgage Loan funded with those amounts and must require the title insurance
company, agent or approved attorney involved in the transaction to return any
amounts advanced by any Lender and not used to fund the Mortgage Loan.
6.10 Other Loan Obligations. Perform all material obligations under
the terms of each loan agreement, note, mortgage, security agreement or debt
instrument by which the Borrower is bound or to which any of its property is
subject, and promptly notify the Agent in writing of a declared default under or
the termination, cancellation, reduction or non-renewal of any of its other
lines of credit or financing agreements with any other lender. Schedule 6.10
hereto is a true and complete list of all such lines of credit or financing
agreements as of the date hereof.
6.11 Operating Account. Maintain an Operating Account with Agent.
Nothing herein shall be deemed to restrict the Borrower from maintaining reserve
or other accounts with other financial institutions.
6.12 Special Affirmative Covenants Concerning Collateral.
(a) Warrant and defend the right, title and interest of the Agent and
the Lenders in and to the Collateral against the claims and
demands of all Persons whomsoever.
(b) Service or cause to be serviced all Pledged Loans in accordance
with the standard requirements of the issuers of Purchase
Commitments covering them and all applicable HUD, ▇▇▇▇▇▇ Mae and
▇▇▇▇▇▇▇ Mac requirements, including taking all
Page 42
actions necessary to enforce the obligations of the obligors
under such Mortgage Loans; and must service or cause to be
serviced all Mortgage Loans backing Pledged Securities in
accordance with applicable governmental requirements and
requirements of issuers of Purchase Commitments covering them.
(c) Execute and deliver to the Agent such Uniform Commercial Code
financing statements with respect to the Collateral as the Agent
may request. The Borrower shall also execute and deliver to the
Agent such further instruments of sale, pledge or assignment or
transfer, and such powers of attorney, as reasonably required by
the Agent to secure the Collateral, and shall do and perform all
matters and things reasonably requested by the Agent that are
necessary or desirable to be done or observed, for the purpose of
effectively creating, maintaining and preserving a first priority
security interest in the Collateral and all other benefits
intended to be afforded the Lenders under this Agreement. The
Agent, on behalf of the Lenders, shall have all the rights and
remedies of a secured party under the Uniform Commercial Code of
New York, or any other applicable law, in addition to all rights
provided for herein.
(d) Notify the Agent within two (2) Business Days after receipt of
notice from an Investor of any default under, or of the
termination of, any Purchase Commitment relating to any Pledged
Loan, Eligible Mortgage Pool or Pledged Security.
(e) Promptly comply in all respects with the terms and conditions of
all Purchase Commitments, and all extensions, renewals and
modifications or substitutions thereof or thereto. The Borrower
will cause to be delivered to the Investor the Pledged Loans and
Pledged Securities to be sold under each Purchase Commitment not
later than the mandatory delivery date of the Pledged Loans or
Pledged Securities under the Purchase Commitment.
(f) Maintain, at its principal office at New York, New York, or its
regional offices at Jersey City, New Jersey, Irvine, California,
and/or Irving, Texas, or at other regional offices approved by
the Agent, or in the office of a computer service bureau engaged
by the Borrower and approved by the Agent, and, upon request,
shall make available to the Agent, for the benefit of the
Lenders, the originals, or copies in any case where the originals
have been delivered to the Agent, for the benefit of the Lenders,
or to an Investor, of its Mortgage Notes and Mortgages included
in Collateral, Mortgage-backed Securities delivered to the Agent,
for the benefit of the Lenders, as Pledged Securities, Purchase
Commitments, and all related Mortgage Loan documents and
instruments, and all files, surveys, certificates,
correspondence, appraisals, computer programs, tapes, discs,
cards, accounting records and other information and data relating
to the Collateral.
(g) Be in good standing with ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇, and
FHA, except to the extent related to programs in which the
applicable Borrower has ceased to originate Mortgage Loans and,
in the case of ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac, such cessation was not
the result of a termination or other action by ▇▇▇▇▇▇ Mae,
▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇, or FHA, as applicable.
Page 43
6.13 Appraisals of Servicing Portfolio. Within forty-five (45) days
after the end of each calendar quarter ending September 30 (Commencing September
30, 2007), provide to the Agent, at the Borrower's sole cost and expense, an
annual appraisal of the Servicing Rights by Prestwick Mortgage Group or any
other Servicing Rights appraiser approved by Agent in writing, such approval not
be unreasonably withheld.
6.14 Cure of Defects in Loan Documents. Promptly cure and cause to be
promptly cured any defects in the creation, issuance, execution and delivery of
this Agreement and the other Loan Documents; and upon request of the Agent and
at the Borrower's expense, the Borrower will promptly execute and deliver, and
cause to be executed and delivered, to the Agent or its designee, all such
additional documents, agreements and/or instruments in compliance with or in
accomplishment of the covenants and agreements of this Agreement and the other
Loan Documents, and/or to create, perfect, preserve, extend and/or maintain any
and all Liens created pursuant hereto or pursuant to any other Loan Document as
valid and perfected Liens (of a priority as set forth in this Agreement) in
favor of the Agent for the benefit of the Lenders to secure the Obligations, all
as reasonably requested from time to time by the Agent.
7. NEGATIVE COVENANTS.
The Borrower hereby covenants and agrees with the Agent and the Lenders
that, so long as the Commitment is outstanding or there remain any Obligations
of the Borrower to be paid or performed under this Agreement or any other Loan
Document, the Borrower shall not, and shall not permit any of its Subsidiaries
to, without the prior written consent of the Agent:
7.1 Merger; Acquisitions. Except for a merger of a Borrower with
another Borrower, become a party to any merger or consolidation, or agree to or
effect any asset acquisition or disposition or stock acquisition or disposition
(other than the acquisition or disposition of assets in the ordinary course of
business consistent with past practices, including the acquisition or
disposition of Mortgage Loans and property acquired on foreclosure of Mortgages)
except (i) the merger or consolidation of one or more of the Subsidiaries of the
Borrower with and into the Borrower, (ii) the merger or consolidation of two or
more Subsidiaries of the Borrower, and (iii) other dispositions of Service
Contracts in an amount not to exceed five percent (5%) of the Servicing
Portfolio during any twelve (12) month period.
7.2 Loss of Eligibility. Take any action that would cause the
Borrower to lose all or any part of its status as an eligible lender,
seller/servicer and issuer as described under Section 5.11 hereof (except to the
extent related to programs in which the applicable Borrower has ceased to
originate Mortgage Loans and, in the case of ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac, such
cessation was not the result of a termination or other action by ▇▇▇▇▇▇ Mae,
▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇, or FHA, as applicable).
7.3 Tangible Net Worth (CMC). Permit the Tangible Net Worth of CMC
(and its Subsidiaries, on a consolidated basis) to be less than the greater of
(x) $50,000,000.00 or (y) an amount sufficient to satisfy the requirements from
time to time of both ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac, to be tested as of the Closing
Date and on the last day of each calendar quarter thereafter.
Page 44
7.4 Tangible Net Worth (CMP). Permit the Tangible Net Worth of CMP
(and its Subsidiaries, on a consolidated basis) to be less than the greater of
(x) $2,000,000.00 or (y) an amount sufficient to satisfy the requirements from
time to time to participate in any applicable Multifamily Property program, to
be tested as of the Closing Date and on the last day of each calendar quarter
thereafter.
7.5 Liquidity (CMC). Permit at any time the unrestricted cash and
Cash Equivalents of CMC (and its Subsidiaries, on a consolidated basis) to be
less than $500,000 plus 0.10% of the aggregate outstanding principal amount of
the aggregate of Serviced Loans serviced on behalf of ▇▇▇▇▇▇ Mae, or such higher
level as ▇▇▇▇▇▇ ▇▇▇ may require from time to time.
7.6 Liquidity (CMP). Permit at any time the unrestricted cash and
Cash Equivalents of CMP (and its Subsidiaries, on a consolidated basis) to be
less than $200,000 calculated in a manner required for eligibility as a ▇▇▇▇▇▇▇
Mac Program Seller/Servicer.
7.7 Limits on Corporate Distributions. Pay, make or declare or incur
any liability to pay, make or declare any dividend (excluding stock dividends)
or other distribution, direct or indirect, on or on account of any shares of its
stock or any redemption or other acquisition, direct or indirect, of any shares
of its stock or of any warrants, rights or other options to purchase any shares
of its stock nor purchase, acquire, redeem or retire any stock or ownership
interest in itself whether now or hereafter outstanding except that so long as
no Default or Event of Default exists at such time, or would exist immediately
thereafter, the Borrower may declare and pay cash dividends or distributions to
its shareholders.
7.8 Loans and Advances. Except as permitted in Section 7.10 and 7.17
hereof, make any loans or advances other than Mortgage Loans or intercompany
loans at a time when a Distribution would be permitted under Section 7.7 hereof,
to any Person other than advances to the Borrower's or its Subsidiaries'
employees in the ordinary course of business for reasonable expenses to be
incurred by such employees for the benefit of the Borrower or such Subsidiaries.
Notwithstanding the foregoing, the Borrower may purchase and originate Mortgage
Loans in the ordinary course of business consistent with past practices.
7.9 No Investments Except Approved Investments. Without the prior
written consent of Agent, make or permit to remain outstanding any Investment
except an Investment which is in:
(a) Cash Equivalents (provided, however, the ▇▇▇▇▇▇ ▇▇▇ Reserve
Account may be invested for a period that exceeds 364 days); and
(b) Property acquired in the normal and ordinary course of the
Borrower's present business of originating and purchasing
Mortgage Loans (including property acquired on foreclosure of
Mortgages and, as to the Borrower and its Subsidiaries, the
origination and purchase of Mortgage Loans in the ordinary course
of their business) as conducted on the date hereof and any other
business permitted under this Agreement.
Page 45
7.10 Charter Documents and Business Termination.
(a) Issue, sell or commit to issue or sell any shares of its or their
capital stock of any class, or other equity or investment
security;
(b) Amend or otherwise modify its or their corporate charter or
otherwise change its or their corporate structure in any manner
which will have a materially adverse effect on its or their
condition, financial or otherwise, or which will have a material
adverse effect upon its or their ability to perform, promptly and
fully, its obligations hereunder or under any of the other Loan
Documents; or
(c) Take any action with a view toward its or their dissolution,
liquidation or termination, or, in fact, dissolve, liquidate or
terminate its existence; or
(d) Change its or their respective taxpayer identification numbers
and state organizational numbers unless such Person shall have
provided the Agent with not less than forty-five days prior
written notice.
7.11 Reserved.
7.12 No Sales, Leases or Dispositions of Property. Except in the
ordinary course of its business, sell, lease, transfer or otherwise dispose of
(whether in one transaction or a series of transactions) all or any substantial
part of such Person's business or assets, whether now owned or acquired after
the Closing Date, other than, in the ordinary course of business consistent with
past practices and to the extent not otherwise prohibited by this Agreement, to
a Subsidiary of the Borrower, and sales of (1) Mortgage Loans, (2)
Mortgage-backed Securities , (3) Servicing Contracts (provided that this
provision shall not be deemed to restrict subservicing by an Affiliate of the
Borrower) and (4) other dispositions of Serviced Loans in an amount not to
exceed five percent (5%) of the Servicing Portfolio during any twelve (12) month
period.
7.13 Changes in Business or Assets. Cease actively to engage in the
business of originating or acquiring Mortgage Loans or make any other material
change in the nature or scope of the business in which each such Person engages
as of the date of this Agreement.
7.14 Changes in Office Location. Change the current addresses and/or
locations of its principal office at New York, New York, or its regional offices
at Jersey City, New Jersey, Irvine, California, and/or Irving, Texas, or at
other regional offices approved by the Agent.
7.15 Special Negative Covenants Concerning Collateral.
(a) Amend or modify, or waive any of the terms and conditions of, or
settle or compromise any claim in respect of, any Pledged Assets,
except for amendments to correct errors and amendments or waivers
which are not material to the applicable Pledged Asset.
(b) Sell, assign, transfer or otherwise dispose of, or grant any
option with respect to, or pledge or otherwise encumber (except
pursuant to this Agreement or as permitted herein) any of the
Collateral or any interest therein.
Page 46
(c) Make any compromise, adjustment or settlement in respect of any
of the Collateral or accept other than cash in payment or
liquidation of the Collateral.
7.16 No Indebtedness. Create, incur, assume, guarantee or be or remain
liable, contingently or otherwise, with respect to any Indebtedness other than:
(a) the Obligations;
(b) current liabilities of the Borrower or its Subsidiaries incurred
in the ordinary course of business but not incurred through (i)
the borrowing of money, or (ii) the obtaining of credit except
for credit on an open account basis customarily extended and in
fact extended in connection with normal purchases of goods and
services;
(c) endorsements of negotiable instruments for collection in the
ordinary course of business;
(d) secured purchase money debt or capitalized lease obligations;
(e) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to
the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of Section
6.7 hereof;
(f) Indebtedness of less than ONE MILLION FIVE HUNDRED THOUSAND AND
NO/100 DOLLARS ($1,500,000.00), in the aggregate, incurred in the
ordinary course of business for capital expenditures;
(g) Indebtedness secured by real property acquired upon foreclosure
of Mortgages, which, either (x) is so secured at the time of such
acquisition, or (y) is directly related to such real property,
not in excess of the fair market value thereof, and reasonably
expected by the Borrower or the subject Subsidiary to be
recovered from the sale or other disposition of the subject real
property;
(h) unsecured Indebtedness for borrowed money incurred in the
ordinary course of business and not exceeding $1,500,000, plus
intercompany liabilities which have a maturity date which is
later than the Maturity Date and which are subordinated to the
Obligations pursuant to subordination agreements satisfactory to
the Agent which shall permit repayment as long as (A) no Default
then exists, and (B) no Default would thereupon occur (including
on a pro forma basis as if applicable financial covenants were
tested as of the date of such repayment;
(i) Indebtedness (exclusive of the Indebtedness referred to in clause
(h) above) incurred to finance no greater than 100% of the
purchase or leasing of equipment, in the ordinary course of
business;
(j) Indebtedness to ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇, FHA or other
parties with whom the Borrower and its Subsidiaries originate,
sell, repurchase or service
Page 47
Mortgage Loans (including Indebtedness under the ASAP and ASAP
Plus programs), to the extent directly relating to or arising out
of such origination, sale, repurchase, or servicing in the
ordinary course of business consistent with past practices;
(k) Indebtedness in respect of judgments or awards that have been in
force for less than the applicable period for taking an appeal so
long as execution is not levied thereunder or in respect of which
a Borrower shall at the time in good faith be prosecuting an
appeal or proceedings for review and in respect of which a stay
of execution shall have been obtained pending such appeal or
review
(l) Indebtedness pursuant to the Reimbursement Agreement dated August
23, 2005 among Centerline Mortgage Partners Inc. (formerly
CharterMac Mortgage Partners Corp.), Bank of America, N.A. and
the other participants thereto and any amendments to the
Reimbursement Agreement and any supplemental or replacement
facilities (including supplemental and replacement facilities
that increase the amount of the obligation) to provide letters of
credit in connection with the Borrower's reimbursement
obligations to ▇▇▇▇▇▇▇ Mac; and
(m) Indebtedness existing on the date of this Agreement and listed
and described on Schedule 7.16 hereto.
7.17 No Liens. Except in connection with its purchase, origination and
sale from time to time of Mortgage Loans and related assets in the ordinary
course of business as conducted on the date hereof, (a) create or incur or
suffer to be created or incurred or to exist any lien, encumbrance, mortgage,
pledge, charge, restriction or other security interest of any kind upon any of
its property or assets of any character whether now owned or hereafter acquired,
or upon the income or profits therefrom; (b) transfer any of its property or
assets or the income or profits therefrom for the purpose of subjecting the same
to the payment of Indebtedness or performance of any other obligation in
priority to payment of its general creditors; (c) acquire, or agree or have an
option to acquire, any property or assets upon conditional sale or other title
retention or purchase money security agreement, device or arrangement; (d)
suffer to exist for a period of more than thirty (30) days after the same shall
have been incurred any Indebtedness or claim or demand against it that if unpaid
might by law or upon bankruptcy or insolvency, or otherwise, be given any
priority whatsoever over its general creditors; or (e) pledge any accounts,
contract rights, general intangibles, chattel paper or instruments, with or
without recourse; (f) agree to a negative pledge in favor of any Person other
than the Agent or the Lenders pursuant to the Acquisition Facility with respect
to any assets or rights, now owned or hereafter arising provided that the
Borrower and any Subsidiary of the Borrower may create or incur or suffer to be
created or incurred or to exist:
(a) liens on properties to secure taxes, assessments and other
government charges or claims for labor, material or supplies in
respect of obligations not overdue or which are being contested
in good faith by appropriate proceedings for which adequate
reserves determined in accordance with GAAP have been established
(and as to which the property subject to any such lien is not yet
subject to foreclosure, sale, collection, levy or loss on account
thereof);
Page 48
(b) deposits or pledges made in connection with, or to secure payment
of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(c) liens on properties the Indebtedness with respect to which is
permitted by Section 7.16 hereof;
(d) presently outstanding liens listed on Schedule 7.17 hereto.
(e) liens in favor of the Agent and the Lenders under the Loan
Documents; liens securing Indebtedness to ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇
Mac, ▇▇▇▇▇▇ Mae, FHA or other parties with whom the Borrower or
its Subsidiaries originate, sell, repurchase or otherwise service
Mortgage Loans provided such liens relate to the foregoing
transactions, but only to the extent directly relating to or
arising out of such origination, sale, repurchase, or servicing
in the ordinary course of business;
(f) liens securing Indebtedness secured by real property acquired
upon foreclosure of Mortgages, which either (x) is so securing at
the time of such acquisition, or (y) is directly related to such
real property, not in excess of the fair market value thereof,
and reasonably expected by the Borrower or the subject Subsidiary
to be recovered from the sale or other disposition of the subject
real property;
(g) liens arising from good faith deposits in connection with or to
secure performance of tenders, bids, leases, government
contracts, performance and return-of-money bonds and other
similar obligations incurred in the ordinary course of business
(other than obligations in respect of the payment of borrowed
money);
(h) easements, rights-of-way, restrictions (including zoning
restrictions), matters of plat, minor defects or irregularities
in title and other similar charges or encumbrances not, in any
material respect, impairing the use of the encumbered property
for its intended purposes;
(i) liens securing Indebtedness permitted pursuant to Section
7.16(i), provided such lien does not extend beyond the equipment
which is the subject of the Indebtedness; and
(j) liens in favor of ▇▇▇▇▇▇ ▇▇▇ in connection with ▇▇▇▇▇▇ Mae
Mortgage Loans, provided such liens relate to the subject
Mortgage Loan.
7.18 Pledge of Servicing Contracts. Pledge or grant a security
interest in any existing or future Servicing Contracts of the Borrower other
than to Agent.
7.19 Recourse Servicing Contracts. Acquire or enter into Servicing
Contracts under which the Borrower must repurchase or indemnify the holder of
the Mortgage Loans as a result of defaults on the Mortgage Loans at any time
during the term of those Mortgage Loans, except for loss sharing under ▇▇▇▇▇▇
▇▇▇ DUS Mortgage Loans, ▇▇▇▇▇▇▇ Mac loss sharing and FHA/▇▇▇▇▇▇ ▇▇▇ coinsurance
and as a result of customary representations and warranties
Page 49
consistent with past practices in the ordinary course of the Borrower's business
concerning the Mortgage Loans.
7.20 Gestation Agreements. Directly or indirectly sell or finance a
Mortgage Loan under any Gestation Agreement if the Mortgage Loan is pledged to
the Agent as Collateral under this Agreement.
8. DEFAULTS; REMEDIES.
8.1 Events of Default. The occurrence of any of the following
conditions or events shall be an event of default ("Event of Default"):
(a) Failure to pay the principal of any Advance when due, whether at
stated maturity, by acceleration, or otherwise; or failure to pay
any installment of interest on any Advance or any other amount
due under this Agreement within ten (10) days after the due date;
or
(b) Failure of the Borrower or any of its Subsidiaries to pay, or any
default in the payment of any principal or interest on, any other
Indebtedness for money borrowed beyond any period of grace
provided; or breach or default with respect to any other material
term of any other Indebtedness for money borrowed under any loan
agreement, mortgage, indenture or other agreement relating
thereto, if the effect of such failure, default or breach is to
cause, or to permit the holder or holders thereof (or a trustee
on behalf of such holder or holders) to cause, Indebtedness of
the Borrower or its Subsidiaries for money borrowed in the
aggregate amount of FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($500,000.00) or more to become or be declared due prior to its
stated maturity (upon the giving or receiving of notice, lapse of
time, both, or otherwise); or
(c) Any of the Borrower's representations or warranties made or
deemed made herein or in any other Loan Document, or in any
statement or certificate at any time given by the Borrower in
writing pursuant hereto or thereto shall be inaccurate or
incomplete in any materially adverse respect on the date as of
which made or deemed made; or
(d) The Borrower shall default in the performance of or compliance
with any term or covenant contained in this Agreement and such
default shall not have been remedied or waived within thirty (30)
days after receipt of written notice from the Agent of such
default other than those referred to above in Subsections 8.1(a),
8.1(b), or 8.1(c); or
(e) (1) A court having jurisdiction shall enter a decree or order for
relief in respect of the Borrower or any of Borrower's
Subsidiaries in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in
effect in respect of the Borrower or any of Borrower's
Subsidiaries, which decree or order is not stayed; or a filing of
an involuntary case under any applicable bankruptcy, insolvency
or other similar law in respect of the Borrower or any of
Borrower's Subsidiaries has occurred; or (2) any other similar
relief shall be
Page 50
granted under any applicable federal or state law; or a decree or
order of a court having jurisdiction for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other
officer having similar powers over the Borrower or any of
Borrower's Subsidiaries, or over all or a substantial part of
their respective property, shall have been entered; or the
involuntary appointment of an interim receiver, trustee or other
custodian of the Borrower or any of Borrower's Subsidiaries, for
all or a substantial part of their respective property; or the
issuance of a warrant of attachment, execution or similar process
against any substantial part of the property of the Borrower or
any of Borrower's Subsidiaries, and the continuance of any such
events in Subsections (1) and (2) above for sixty (60) days
unless dismissed or discharged; or
(f) The Borrower or any of Borrower's Subsidiaries shall have an
order for relief entered with respect to it or commence a
voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or shall consent to
the entry of an order for relief in an involuntary case, or to
the conversion to an involuntary case, under any such law, or
shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial
part of its property; the making by the Borrower or any of
Borrower's Subsidiaries of any assignment for the benefit of
creditors; or the failure of the Borrower or any of Borrower's
Subsidiaries, or the admission by any of them of its inability,
to pay its debts as such debts become due; or
(g) Any money judgment, writ or warrant of attachment, or similar
process involving in any case an amount in excess of FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($500,000.00) which has been denied
coverage under the Borrower's insurance policies, as applicable,
shall be entered or filed against the Borrower or any of its
Subsidiaries or any of their respective assets and shall remain
undischarged, unvacated, unbonded or unstayed for a period of
thirty (30) days or in any event no later than five (5) days
prior to the date of any proposed sale thereunder; or
(h) Any order, judgment or decree shall be entered against the
Borrower decreeing the dissolution or split up of the Borrower
and such order shall remain undischarged or unstayed for a period
in excess of forty-five (45) days; or
(i) Any Plan maintained by the Borrower or any of Borrower's
Subsidiaries shall be terminated within the meaning of Title IV
of ERISA or a trustee shall be appointed by an appropriate United
States district court to administer any Plan, or the Pension
Benefit Guaranty Corporation (or any successor thereto) shall
institute proceedings to terminate any Plan or to appoint a
trustee to administer any Plan if as of the date thereof the
Borrower's or any Subsidiary's liability (after giving effect to
the tax consequences thereof) to the Pension Benefit Guaranty
Corporation (or any successor thereto) for unfunded guaranteed
vested benefits under the Plan exceeds the then current value of
assets accumulated in such Plan by more than FIFTY THOUSAND AND
NO/100 DOLLARS ($50,000.00) (or in the case of a termination
involving the Borrower or any of Borrower's
Page 51
Subsidiaries as a "substantial employer" (as defined in Section
4001(a)(2) of ERISA) the withdrawing employer's proportionate
share of such excess shall exceed such amount); or
(j) The Borrower or any of Borrower's Subsidiaries as employer under
a Multiemployer Plan shall have made a complete or partial
withdrawal from such Multiemployer Plan and the plan sponsor of
such Multiemployer Plan shall have notified such withdrawing
employer that such employer has incurred a withdrawal liability
in an annual amount exceeding FIFTY THOUSAND AND NO/100 DOLLARS
($50,000.00); or
(k) The Borrower shall contest the validity or enforceability hereof,
or the Agent's security interest on any portion of the Collateral
shall become unenforceable or otherwise impaired; provided that,
subject to the Agent's approval, no Event of Default shall occur
and be continuing as a result of such impairment if all Advances
made against any such Collateral shall be paid in full within ten
(10) days of the date of such impairment; or
(l) The Borrower dissolves or terminates its existence, or
discontinues its business of engaging in the mortgage banking
business, a majority of which shall focus on multifamily mortgage
loans consistent with its historical business; or
(m) Any court shall find or rule, or the Borrower shall assert or
claim, (i) that the Agent does not have a valid, first priority
perfected, enforceable Lien and security interest in the
Collateral as represented in this Agreement or in any other Loan
Document, or (ii) that this Agreement or any of the Loan
Documents does not or will not constitute the legal, valid,
binding and enforceable obligations of the party or parties (as
applicable) thereto, or (iii) that any Person has a conflicting
or adverse Lien, claim or right in, or with respect to, the
Collateral and the Borrower is unable within ten (10) days to
have such finding or ruling reversed or to have such adverse
Lien, claim or right removed; or
(n) The Borrower shall have concealed, removed, or permitted to be
concealed or removed, any part of its property, with intent to
hinder, delay or defraud its creditors or any of them, or made or
suffered a transfer of any of its property which may be
fraudulent under any bankruptcy, fraudulent conveyance or similar
law; or shall have made any transfer of its property to or for
the benefit of a creditor at a time when other creditors
similarly situated have not been paid; or shall have suffered or
permitted, while insolvent, any creditor to obtain a Lien upon
any of its property through legal proceedings or other process
which is not vacated within sixty (60) days from the date
thereof; or
(o) There shall be a material adverse change in the financial
condition, business or operations of the Borrower.
Page 52
8.2 Remedies.
(a) Upon the occurrence of any Event of Default described in Sections
8.1(e), 8.1(f), 8.1(h) or 8.1(k), the Commitment shall
automatically terminate and all unpaid and accrued Obligations of
the Borrower shall automatically become due and payable, without
presentment for payment, demand, notice of non-payment, protest,
notice of protest, notice of intent to accelerate, notice of
acceleration, maturity, or any other notices or requirements of
any kind to the Borrower or any other Person liable thereon or
with respect thereto, all of which are hereby expressly waived by
the Borrower.
(b) Upon the occurrence of any Event of Default, other than those
described in Sections 8.1(e), 8.1(f), 8.1(h) or 8.1(k), the Agent
may, by written notice to the Borrower, terminate the Commitment
and/or declare all unpaid and accrued Obligations of the Borrower
to be immediately due and payable, whereupon the same shall
forthwith become due and payable, together with all accrued and
unpaid interest thereon, and the obligation of the Lenders to
make any Advances shall thereupon terminate.
(c) Upon the occurrence of any Event of Default, the Agent may also
do any of the following:
1. Foreclose upon or otherwise enforce its security interest in and
Lien on the Collateral to secure all payments and performance of
Obligations of the Borrower in any manner permitted by law or
provided for hereunder.
2. Notify all obligors, servicers or other Persons in respect of the
Collateral that the Collateral has been assigned to the Agent,
for the benefit of the Lenders, and that all payments thereon are
to be made directly to the Agent, for the benefit of the Lenders,
or such other party as may be designated by the Agent; settle,
compromise, or release, in whole or in part, any amounts owing on
the Collateral, any such obligor or any Investor or any portion
of the Collateral, on terms acceptable to the Agent; enforce
payment and prosecute any action or proceeding with respect to
any and all Collateral; and where any such Collateral is in
default, foreclose on and enforce security interests in, such
Collateral by any available judicial procedure or without
judicial process and sell property acquired as a result of any
such foreclosure.
3. Act, or contract with a third Person to act, as servicer or
subservicer of each item of Collateral requiring servicing and
perform all obligations required in connection with Purchase
Commitments, such third party's fees to be paid by the Borrower.
4. Require the Borrower to assemble the Collateral and/or books and
records relating thereto and make such available to the Agent at
a place to be designated by the Agent.
Page 53
5. Enter onto property where any Collateral or books and records
relating thereto are located and take possession thereof with or
without judicial process.
6. Prior to the disposition of the Collateral, prepare it for
disposition in any manner and to the extent the Agent deems
appropriate.
7. Exercise all rights and remedies of a secured creditor under the
Uniform Commercial Code of New York or other applicable law,
including, but not limited to, selling or otherwise disposing of
the Collateral, or any part thereof, at one or more public or
private sales, whether or not such Collateral is present at the
place of sale, for cash or credit or future delivery, on such
terms and in such manner as the Agent may determine, including,
without limitation, sale pursuant to any applicable Purchase
Commitment. If notice is required under such applicable law, the
Agent will give the Borrower not less than ten (10) days' notice
of any such public sale or of the date after which private sale
may be held. The Borrower agrees that ten (10) days' notice shall
be reasonable notice. The Agent may, without notice or
publication, adjourn any public or private sale or cause the same
to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time
or place to which the same may be so adjourned. The Agent is
authorized at any such sale, if the Agent deems it advisable so
to do, to restrict the prospective bidders or purchasers to
Persons who will represent and agree that they are purchasing the
Collateral for their own account for investment and not with a
view to the distribution or resale of any of the Collateral. The
Borrower specifically agrees that any such sale, whether public
or private, of any Collateral pursuant to the commitment of any
investor to purchase such Collateral that was obtained by (or
with the approval of) the Borrower will be commercially
reasonable, and if such sale is for the price provided for in
such commitment, then such sale shall be held to be for value
reasonably equivalent to the value of the Collateral so sold.
Upon any such sale, the Agent shall have the right to deliver,
assign and transfer to the purchaser thereof the Collateral so
sold. Each purchaser at any such sale shall hold the property
sold absolutely free from any claim or right of whatsoever kind,
including any equity or right of redemption, stay or appraisal
which the Borrower has or may have under any rule of law or
statute now existing or hereafter adopted. In any case of any
sale of all or any part of the Collateral on credit or for future
delivery, the Collateral so sold may be retained by the Agent
until the selling price is paid by the purchaser, but the Agent
shall not incur any liability in case of such purchaser's failure
to take up and pay for the Collateral so sold and, in case of any
such failure, such Collateral may again be sold upon like notice.
In case of any sale of all or any part of the Collateral on
credit or for future delivery, the Collateral so sold may be
retained by the Agent until the selling price is paid by the
purchaser thereof, but the Agent shall not incur any liability in
case of the failure of such purchaser to take up and pay for the
Collateral so sold and, in case of any such failure, such
Collateral may again be sold upon like notice. The Agent may,
however, instead of exercising the power of sale herein conferred
upon it, proceed by a suit or suits at law or in equity to
collect all amounts due upon the Collateral or to foreclose the
pledge and sell the Collateral or any portion
Page 54
thereof under a judgment or decree of a court or courts of
competent jurisdiction, or both.
8. Proceed against the Borrower on the Notes.
9. Exercise any or all of its rights, remedies or recourses under
any other Loan Documents, at law, in equity, or otherwise.
10. The Agent shall follow the instructions of the Majority Lenders
in exercising or not exercising its rights under this Section
8.2(c), but (i) the Agent shall have no obligation to take or not
to take any action which it reasonably believes may expose it to
any liability unless the Agent shall be first indemnified to its
satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or
continuing to take any such action, and (ii) the Agent may, but
shall be under no obligation to, await instructions from the
Majority Lenders before exercising or not exercising its rights
under this Section 8.2 (c).
(d) Neither the Agent nor any Lender shall incur any liability as a
result of the sale or other disposition of the Collateral, or any
part thereof, at any public or private sale or disposition. The
Borrower hereby waives (to the extent permitted by law) any
claims it may have against the Agent and the Lenders arising by
reason of the fact that the price at which the Collateral may
have been sold at such private sale was less than the price which
might have been obtained at a public sale or was less than the
aggregate amount of the outstanding Advances and the unpaid
interest accrued thereon, even if the Agent accepts the first
offer received and does not offer the Collateral to more than one
offeree and none of the actions described herein shall render
Agent's disposition of the Collateral in such a manner as
commercially unreasonable. Any sale of Collateral pursuant to the
terms of a Purchase Commitment, or any other disposition of
collateral arranged by the Borrower, whether before or after the
occurrence of an Event of Default, shall be deemed to have been
made in a commercially reasonable manner.
(e) The Borrower specifically waives (to the extent permitted by law)
any equity or right of redemption, all rights of redemption, stay
or appraisal which the Borrower has or may have under any rule of
law or statute now existing or hereafter adopted, and any right
to require the Agent to (1) proceed against any Person, (2)
proceed against or exhaust any of the Collateral or pursue its
rights and remedies as against the Collateral in any particular
order, or (3) pursue any other remedy in its power. The Agent
shall not be required to take any steps necessary to preserve any
rights of the Borrower against holders of mortgages prior in lien
to the Lien of any Mortgage included in the Collateral or to
preserve rights against prior parties.
(f) 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
Mortgage included in the Collateral, including,
Page 55
without limitation, payment of delinquent taxes or assessments
and insurance premiums. All advances, charges, costs and
expenses, including reasonable attorneys' fees and disbursements,
incurred or paid by the Lenders in exercising any right, power or
remedy conferred by this Agreement, or in the enforcement hereof,
together with interest thereon, at the Default Rate, from the
time of payment until repaid, shall become a part of the
principal balance outstanding hereunder and under the Notes.
(g) No failure on the part of the Agent to exercise, and no delay in
exercising, any right, power or remedy provided hereunder, at law
or in equity shall operate as a waiver thereof; nor shall any
single or partial exercise by the Agent of any right, power or
remedy provided hereunder, at law or in equity preclude any other
or further exercise thereof or the exercise of any other right,
power or remedy. Without intending to limit the foregoing, all
defenses based on the statute of limitations are hereby waived by
the Borrower to the extent permitted by law. The remedies herein
provided are cumulative and are not exclusive of any remedies
provided at law or in equity.
8.3 Application of Proceeds. The proceeds of any sale, disposition or
other enforcement of the security interest in all or any part of the Collateral
shall be applied by the Agent as follows:
First, to the payment of the 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
or on behalf of the Agent in connection therewith;
Second, to the payment of all amounts due (other than principal
and interest) under the Notes or this Agreement - payable ratably to
Lenders in the proportion that each Lender's share of those amounts
bears to the total of those amounts for all Lenders;
Third, to the payment of interest accrued and unpaid on the Notes
- payable ratably to each Lender in accordance with its Commitment
Percentage;
Fourth, to the payment of the outstanding principal balance of
the Notes - payable ratably to each Lender in accordance with its
Commitment Percentage;
Fifth, to the payment of all other Obligations - payable ratably
to Lenders in the proportion that each Lender's share of those amounts
bears to the total of those amounts for all Lenders; and
Finally, to the payment to the Borrower, or to its successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
If the proceeds of any such sale, disposition or other enforcement are
insufficient to cover the costs and expenses of such sale, as aforesaid, and the
payment in full of all Obligations of the Borrower, the Borrower shall remain
liable for any deficiency.
Page 56
8.4 Agent Appointed Attorney-in-Fact. The Agent is hereby appointed
the attorney-in-fact of the Borrower, with full power of substitution, for the
purpose of carrying out the provisions hereof and taking any action and
executing any instruments which the Agent may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest and shall remain in full force and
effect until the full and final payment and performance of all Obligations.
Without limiting the generality of the foregoing, the Agent shall have the right
and power, either in the name of the Borrower or in its own name, to (a) give
notices of its security interest in the Collateral to any Person, (b) endorse in
blank, to itself, or to a nominee all items of Collateral that are transferable
by endorsement and are payable to the order of the Borrower, including
canceling, completing or supplying any needed or incomplete or missing
endorsement of the Borrower and any related assignment, (c) change or cause to
be changed the book-entry registration or name of subscriber or Investor on any
Pledged Security, and (d) receive, endorse and collect all checks made payable
to the order of the Borrower representing any payment on account of the
principal of or interest on, or the proceeds of sale of, any of the Pledged
Loans or Pledged Securities and to give full discharge for the same.
8.5 Right of Offset. Borrower hereby grants to Agent and to each
Lender a right of offset, subject to the following sentence relating to any
exercise of such right, to secure the repayment of the Obligations, upon any and
all monies, securities, or other property of Borrower, and the proceeds
therefrom now or hereafter held or received by or in transit to Agent or such
Lender from or for the account of Borrower, whether for safekeeping, custody,
pledge, transmission, collection, or otherwise, and also upon any and all
deposits (general or special, time or demand, provisional or final) and credits
of Borrower, and any and all claims of Borrower against Agent or such Lender, at
any time existing. Upon the occurrence of any Default, Agent and each Lender are
authorized at any time and from time to time, without notice to Borrower, to
offset, appropriate, and apply any and all of those items against the
Obligations. Notwithstanding anything in this section or elsewhere in this
Agreement to the contrary, neither Agent nor any other Lender shall have any
right to offset, appropriate, or apply any accounts of Borrower which consist of
escrowed funds (except and to the extent of any beneficial interest which
Borrower have in such escrowed funds) which have been so identified by Borrower
in writing at the time of deposit thereof.
8.6 Waivers. Borrower waives any right to require Agent to (a)
proceed against any Person, (b) proceed against or exhaust any of the Collateral
or pursue its rights and remedies as against the Collateral in any particular
order, or (c) pursue any other remedy in its power. Agent shall not be required
to take any steps necessary to preserve any rights of Borrower against any
Person from which Borrower purchased any Mortgage Loans or to preserve rights
against prior parties. Borrower and each surety, endorser, guarantor, pledgor,
and other party ever liable or whose property is ever liable for payment of any
of the Obligations jointly and severally waive presentment and demand for
payment, protest, notice of intention to accelerate, notice of acceleration, and
notice of protest and on payment, and agree that their or their property's
liability with respect to the Obligations, or any part thereof, shall not be
affected by any renewal or extension in the time of payment of the Obligations,
by any indulgence, or by any release or change in any security for the payment
of the Obligations, and hereby consent to any and all renewals, extensions,
indulgences, releases, or changes, regardless of the number thereof.
Page 57
8.7 Performance by Agent. Should any covenant, duty, or agreement of
Borrower fail to be performed in accordance with the terms of this Agreement or
of any document delivered under this Agreement, Agent may, at its option, after
notice to Borrower, as the case may be, perform, or attempt to perform, such
covenant, duty, or agreement on behalf of the Borrower and shall notify each
Lender that it has done so. In such event, Borrower shall jointly and severally,
at the request of Agent, promptly pay any amount expended by Agent in such
performance or attempted performance to Agent at its principal place of
business, together with interest thereon at the Maximum Rate from the date of
such expenditure by Agent until paid. Notwithstanding the foregoing, it is
expressly understood that Agent does not assume and shall never have, except by
express written consent of Agent, any liability or responsibility for the
performance of any duties of Borrower under this Agreement or under any other
document delivered under this Agreement.
8.8 No Responsibility. Except in the case of fraud, gross negligence,
or willful misconduct, neither Agent nor any of its officers, directors,
employees, or attorneys shall assume or ever have any liability or
responsibility for, any diminution in the value of the Collateral or any part of
the Collateral.
8.9 No Waiver. The acceptance by Agent or any Lender at any time and
from time to time of partial payment or performance by Borrower of any of their
respective obligations under this Agreement or under any Loan Document shall not
be deemed to be a waiver of any Default then existing. No waiver by Agent or any
Lender shall be deemed to be a waiver of any other then existing or subsequent
Default. No delay or omission by Agent or any Lender in exercising any right
under this Agreement or under any other document required to be executed under
or in connection with this Agreement shall impair such right or be construed as
a waiver thereof or any acquiescence therein, nor shall any single or partial
exercise of any such right preclude other or further exercise thereof, or the
exercise of any other right under this Agreement or otherwise.
8.10 Cumulative Rights. All rights available to Agent and the Lenders
under this Agreement or under any other document delivered under this Agreement
shall be cumulative of and in addition to all other rights granted to Agent and
the Lenders at law or in equity, whether or not the Notes be due and payable and
whether or not Agent shall have instituted any suit for collection, foreclosure
or other action in connection with this Agreement or any other document
delivered under this Agreement.
9. NOTICES.
All notices, demands, consents, requests and other communications
required or permitted to be given or made hereunder (collectively, "Notices")
shall, except as otherwise expressly provided hereunder, be in writing addressed
to the respective parties hereto at their respective addresses hereinafter set
forth and shall be either (a) delivered in person, or (b) mailed, by certified,
registered, or express mail, postage prepaid, or (c) delivered by overnight
courier, or (d) telecopied to their respective telecopy numbers (with a paper
copy mailed the same day as aforesaid) as hereinafter set forth; provided any
party may change its address for notice by designating such party's new address
in a Notice to the sending party given at least five (5) Business Days before it
shall become effective. All Notices shall be conclusively deemed to have been
properly given or served when duly received, in person regardless of how sent.
Page 58
Regardless of when received, all Notices shall be conclusively deemed given or
served if addressed in accordance with this Section and (1) if by overnight
courier, on the next Business Day or (2) if mailed, by certified, registered, or
express mail, postage prepaid, on the third Business Day after being deposited
in the mails, or (3) if telecopied, when telecopied to the telecopy number set
forth below (provided a paper copy is mailed the same day):
If to the Borrower: Centerline Mortgage Capital Inc.
Attn: Chief Financial Officer
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇ ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
with a copy to: Centerline Mortgage Capital Inc.
Attn: General Counsel
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇ ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
If to Citicorp USA, Inc.,
as Agent: Citicorp USA, Inc.
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Director
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇ ▇▇▇ ▇▇▇▇
E-mail: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
with a copy to: Citicorp USA, Inc.
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
and Deputy General Counsel
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇.▇▇▇.▇▇▇▇
E-mail: ▇▇▇▇▇.▇.▇▇▇▇▇▇@▇▇▇▇.▇▇▇
If to Citicorp USA, Inc.,
as Lender: Citicorp USA, Inc.
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Director
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇ ▇▇▇ ▇▇▇▇
E-mail: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
Page 59
with a copy to: Citicorp USA, Inc.
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
and Deputy General Counsel
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇.▇▇▇.▇▇▇▇
E-mail: ▇▇▇▇▇.▇.▇▇▇▇▇▇@▇▇▇▇.▇▇▇
10. REIMBURSEMENT OF EXPENSES; INDEMNITY.
10.1 Reimbursement of Expenses and Indemnification by Borrower. The
Borrower shall: (a) pay all out-of-pocket costs and expenses of the Agent,
including, without limitation, reasonable attorneys' fees in connection with the
preparation, negotiation, documentation, and administration of this Agreement,
the Notes, and other Loan Documents and the making and repayment of the Advances
and the payment of interest thereon; (b) pay all out-of-pocket costs and
expenses of the Agent, including, without limitation, reasonable attorneys'
fees, incurred by Agent in connection with the enforcement of this Agreement,
the Notes, and other Loan Documents; (c) pay, and hold the Agent and the Lenders
and any owners or holders of the Notes harmless from and against, any and all
present and future stamp, documentary and other similar taxes with respect to
the foregoing matters and save them each harmless from and against any and all
liabilities with respect to or resulting from any delay or omission to pay such
taxes; (d) INDEMNIFY, PAY AND HOLD HARMLESS THE AGENT, EACH LENDER, AND ANY OF
THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS AND ANY SUBSEQUENT
OWNERS OR HOLDERS OF THE NOTES (COLLECTIVELY, THE "INDEMNIFIED PARTIES") FROM
AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
JUDGMENTS, SUITS, COSTS, EXPENSES AND DISBURSEMENTS OF ANY KIND WHATSOEVER (THE
"INDEMNIFIED LIABILITIES") (INCLUDING, WITHOUT LIMITATION, INDEMNIFIED
LIABILITIES RESULTING, IN WHOLE OR IN PART, FROM ANY INDEMNIFIED PARTY'S OWN
NEGLIGENCE OR STRICT LIABILITY) WHICH MAY BE IMPOSED UPON, INCURRED BY OR
ASSERTED AGAINST SUCH INDEMNIFIED PARTY IN ANY WAY RELATING TO OR ARISING OUT OF
THIS AGREEMENT, THE NOTES, OR ANY OTHER LOAN DOCUMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY TO THE EXTENT THAT ANY SUCH INDEMNIFIED
LIABILITIES RESULT (DIRECTLY OR INDIRECTLY) FROM ANY CLAIMS MADE, OR ANY
ACTIONS, SUITS OR PROCEEDINGS COMMENCED OR THREATENED, BY OR ON BEHALF OF ANY
CREDITOR (EXCLUDING THE LENDERS AND THE HOLDER OR HOLDERS OF THE NOTES),
SECURITY HOLDER, SHAREHOLDER, CUSTOMER (INCLUDING, WITHOUT LIMITATION, ANY
PERSON HAVING ANY DEALINGS OF ANY KIND WITH THE BORROWER), TRUSTEE, DIRECTOR,
OFFICER, EMPLOYEE AND/OR AGENT OF THE BORROWER ACTING IN SUCH CAPACITY, THE
BORROWER OR ANY GOVERNMENTAL REGULATORY BODY OR AUTHORITY. THE FOREGOING
INDEMNITY SHALL NOT APPLY TO THE EXTENT THE INDEMNIFIED LIABILITIES RESULT FROM
THE GROSS NEGLIGENCE
Page 60
OR WILLFUL MISCONDUCT OF ANY INDEMNIFIED PARTY OR ANY INDEMNIFIED PARTY'S OWN
VIOLATIONS OF REGULATIONS APPLICABLE TO IT. THE AGREEMENT OF THE BORROWER
CONTAINED IN THIS SUBSECTION (c) SHALL SURVIVE THE EXPIRATION OR TERMINATION OF
THIS AGREEMENT AND THE PAYMENT IN FULL OF THE NOTES. ATTORNEYS' FEES AND
DISBURSEMENTS INCURRED IN ENFORCING, OR ON APPEAL FROM, A JUDGMENT PURSUANT
HERETO SHALL BE RECOVERABLE SEPARATELY FROM AND IN ADDITION TO ANY OTHER AMOUNT
INCLUDED IN SUCH JUDGMENT, AND THIS CLAUSE IS INTENDED TO BE SEVERABLE FROM THE
OTHER PROVISIONS OF THIS AGREEMENT AND TO SURVIVE AND NOT BE MERGED INTO SUCH
JUDGMENT. WITHOUT LIMITING ANY OF THE FOREGOING, THE BORROWER SHALL UPON DEMAND
PROMPTLY REIMBURSE THE AGENT FOR ALL EXTRAORDINARY SERVICING EXPENSES INCURRED
BY IT.
10.2 INDEMNIFICATION BY THE LENDERS. WHETHER OR NOT ANY ADVANCE IS
MADE HEREUNDER, THE LENDERS AGREE TO INDEMNIFY, PAY, DEFEND, AND HOLD HARMLESS
THE AGENT IN ITS RESPECTIVE CAPACITY AS SUCH (TO THE EXTENT NOT REIMBURSED BY
THE BORROWER AND WITHOUT LIMITING THE OBLIGATION OF THE BORROWER TO DO SO),
RATABLY ACCORDING TO THEIR RESPECTIVE COMMITMENT PERCENTAGES, FROM AND AGAINST
ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND WHATSOEVER,
INCLUDING WITHOUT LIMITATION LIABILITIES RESULTING IN WHOLE OR PART FROM THE
AGENT'S OWN ORDINARY NEGLIGENCE OR STRICT LIABILITY, WHICH MAY AT ANY TIME
(INCLUDING WITHOUT LIMITATION AT ANY TIME FOLLOWING THE PAYMENT OF THE
OBLIGATIONS) BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE AGENT IN ANY WAY
RELATING TO OR ARISING OUT OF THE LOAN DOCUMENTS OR ANY DOCUMENTS CONTEMPLATED
BY OR REFERRED TO HEREIN OR THEREIN OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY OR ANY ACTION TAKEN OR OMITTED BY THE AGENT UNDER OR IN CONNECTION WITH
ANY OF THE FOREGOING; PROVIDED THAT NO LENDER SHALL BE LIABLE FOR THE PAYMENT OF
ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS RESULTING FROM THE
AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITATION OF THE
FOREGOING, EACH LENDER SHALL REIMBURSE THE AGENT UPON DEMAND FOR ITS RATABLE
SHARE OF ANY COSTS OR OUT-OF-POCKET EXPENSES (INCLUDING ATTORNEY COSTS) INCURRED
BY THE AGENT IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY,
ADMINISTRATION, MODIFICATION, AMENDMENT OR ENFORCEMENT (WHETHER THROUGH
NEGOTIATION, LEGAL PROCEEDINGS OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF
RIGHTS OR RESPONSIBILITIES UNDER, THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR
ANY DOCUMENT CONTEMPLATED BY OR REFERRED TO HEREIN, AND ALL EXTRAORDINARY
SERVICING EXPENSES, TO THE EXTENT THAT THE AGENT IS NOT REIMBURSED FOR SUCH
EXPENSES BY OR
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ON BEHALF OF BORROWER. THE AGREEMENTS IN THIS SECTION SHALL SURVIVE THE PAYMENT
OF THE OBLIGATIONS AND THE TERMINATION OF THIS AGREEMENT. ATTORNEYS' FEES AND
DISBURSEMENTS INCURRED IN ENFORCING, OR ON APPEAL FROM, A JUDGMENT PURSUANT
HERETO SHALL BE RECOVERABLE SEPARATELY FROM AND IN ADDITION TO ANY OTHER AMOUNT
INCLUDED IN SUCH JUDGMENT, AND THIS CLAUSE IS INTENDED TO BE SEVERABLE FROM THE
OTHER PROVISIONS OF THIS AGREEMENT AND TO SURVIVE AND NOT BE MERGED INTO SUCH
JUDGMENT.
TO THE EXTENT THAT, AFTER THE LENDERS HAVE MADE PAYMENTS TO AGENT
PURSUANT TO THIS SECTION 10.2, AGENT RECEIVES FROM THE BORROWER, THE COLLATERAL
OR ANY OTHER SOURCE (OTHER THAN THE LENDERS) ANY AMOUNT ON ACCOUNT OF THE
LIABILITIES SO PAID BY THE LENDERS, AGENT SHALL REIMBURSE SUCH AMOUNT RECEIVED
FROM THE BORROWER, THE COLLATERAL OR SUCH OTHER SOURCE TO THE LENDERS, RATABLY
IN ACCORDANCE WITH THE AMOUNTS RECEIVED FROM THEM PURSUANT TO SECTION 10.2 FOR
PURPOSES OF THE FOREGOING SENTENCE, AGENT MAY APPLY ANY AMOUNT RECEIVED FROM THE
BORROWER OR ANY SUCH OTHER SOURCE TO ANY OBLIGATIONS OWING TO IT UNDER ANY LOAN
DOCUMENT.
11. FINANCIAL INFORMATION.
All financial statements and reports furnished to the Agent hereunder
shall be prepared in accordance with GAAP, applied on a basis consistent with
that applied in preparing the financial statements as at, and for the period
ended, the Interim Date (except to the extent otherwise required to conform to
good accounting practice).
12. AGREEMENTS CONCERNING THE AGENT AND THE LENDERS.
12.1 Appointment. Each of the Lenders hereby irrevocably appoints
Citicorp USA, Inc. as the Agent under this Agreement and the other Loan
Documents and authorizes the Agent to act on such appointing Lender's behalf and
to exercise such powers under this Agreement and all other Loan Documents as are
specifically delegated to or required of the Agent by their terms, together with
all reasonably incidental powers. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities except those expressly set forth herein or in another Loan
Document, nor shall the Agent have or be deemed to have any fiduciary
relationship with any Lender or any participant. No implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Agent. Without limiting the generality of the foregoing, the use of the term
"agent" in this Agreement or the other Loan Documents with reference to the
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead, such
term is used merely as a matter of market custom and is intended to create or
reflect only an administrative relationship between independent contracting
parties. Each Lender hereby agrees to assert no claim against the Agent on any
agency thereof or any other theory of liability for breach of fiduciary duty,
all of which claims are hereby expressly waived by each Lender.
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12.2 Employment of Others by the Agent. The Agent may execute and
perform any of its duties under the Loan Documents by or through employees,
agents and attorneys other than (a) the Borrower or (b) any of the Borrower's
Affiliates or (c) any of the Borrower's attorneys or other agents, and the Agent
shall be entitled to rely (and shall be protected in reasonably relying) on the
advice of such employees, agents and attorneys concerning all matters pertaining
to its duties under the Loan Documents. The Agent shall not be responsible for
the negligence or misconduct of any agent or attorney selected by it in the
absence of gross negligence, fraud or willful misconduct by the Agent. Each
Lender recognizes and understands that if, after the occurrence of any Default
under this Agreement, the Agent services any Collateral consisting of loans
secured by mortgages and the Agent does not have adequate facilities (and the
Agent shall have no obligation to develop adequate facilities) to service such
Collateral, it will be necessary for the Agent to contract with a third party to
service such Collateral and the fees to be paid for such services will be
treated as expenses payable out of the income and proceeds realized from such
Collateral having priority over other applications of such income and proceeds
pursuant to the Loan Documents. The Agent will identify any such servicing agent
selected by the Agent for such purpose by written notice to the Lenders, and may
engage and continue to employ such servicing agent unless and until the Majority
Lenders notify the Agent in writing that they disapprove of such servicing agent
so selected, in which event the Agent shall promptly engage such other servicing
agent as shall be approved in writing by all of the Lenders and replace the
servicing agent so originally selected.
12.3 Exculpatory Provisions. Except in the case of its, his or her own
(or own agent's) fraud, gross negligence, or willful misconduct, it being
specifically intended that the Released Persons (as defined below) be hereby
released from liability for their own simple negligence, the "Agent, et al."
(meaning the Agent, its Affiliates and its - and each of its Affiliates' -
officers, shareholders, directors, employees and agents), (collectively, the
"Released Persons") shall not be (a) liable for any action taken or omitted to
be taken by such Released Person (1) in the exercise of the discretion or power
conferred upon such Released Person by the Loan Documents or (2) with the
consent or at the request of all Lenders or the Majority Lenders (as
applicable), or (b) responsible for consequences of any error of judgment. It is
specifically intended that each Released Person is hereby released from
liability for his, her, or its own negligence to the maximum extent permitted by
law. The Agent, et al., shall not be responsible in any manner to anyone for (1)
the effectiveness, enforceability, legality, genuineness, sufficiency, validity,
due execution, filing, registration or recording of any of the Loan Documents,
(2) any representation, warranty, document, certificate, report or statement
made or furnished in, under or in connection with the Loan Documents other than
its own representation, warranty, certificate, report or statement furnished to
one or more Lenders in or pursuant to any Loan Document, whether deemed given
pursuant to Article 4 of this Agreement or given in a separate writing (and no
certificate, report or statement so furnished that is prepared in reliance upon
information furnished by the Borrower or any source other than the Agent itself
shall be construed to be a certification, confirmation, guaranty or undertaking
of any kind by the Agent of the correctness or completeness of any of the
information so relied upon by the Agent), (3) the value of any of the
Collateral, (4) except to the extent the Agent is required to hold Collateral or
take or perform any other action with respect to it in accordance with this
Agreement and which action is required of such perfection, the perfection of any
Lien on any Collateral, (5) any delay, error, omissions or default of any third
party mail, telegraph, telecopy, electronic mail, cable or wireless agency or
operator or (6) any failure of the Borrower to perform its obligations
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hereunder or under any other Loan Document. The Agent, et al, shall not be under
any obligation to anyone to (a) ascertain or to inquire as to the performance or
observation of any of the terms, covenants, or conditions of any of the Loan
Documents on the part of the Borrower or any other Person or (b) inspect the
property (including the books and records) of the Borrower.
12.4 Defaults. Should any Event of Default or Default occur and be
continuing, any Lender having actual knowledge thereof shall notify Agent and
Borrower of the existence thereof, but the failure of any Lender to provide that
notice shall not prejudice that Lender's rights under this Agreement. The Agent
shall not be deemed to have knowledge or notice of the occurrence of any Default
or Event of Default unless a Vice President or more senior officer of the
National Structured Lending Group of the Agent has actual knowledge of it or
such an officer shall have received notice from the Borrower or a Lender
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "Notice of Default". The Agent shall take such
action with respect to an Event of Default as shall be reasonably directed by
the Majority Lenders; provided that unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Event of
Default, as the Agent, in its sole discretion, may deem necessary or appropriate
to protect the rights and interest of the Agent and the Lenders and to realize
the benefits of the Collateral. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement and the other Loan Documents
unless it shall first receive such advice or concurrence of the Majority Lenders
as it deems appropriate and, if it so requests, it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any Loan Document in accordance with a request
of the Majority Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon the Lenders, all participants, and all
future holders of the Obligations owing by Borrower hereunder. Where this
Agreement expressly permits or prohibits an action unless the Majority Lenders
otherwise determine, the Agent shall, and in all other instances the Agent may
but shall not be required to, initiate any solicitation for the consent or a
vote of the Lenders. Notwithstanding the foregoing, the Agent shall not be
required to take any action that it reasonably believes may expose it to
personal liability or be contrary to this Agreement or applicable law.
12.5 Reliance. The Agent, et al., shall be entitled to rely - and
shall be fully protected in reasonably relying - upon any writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telex or
teletype message, statement, order or other document or conversation believed by
it, him or her to be genuine and correct and to have been signed or made by the
proper Person. The Agent shall not be required in any way to determine the
identity or authority of any Person delivering or executing the same. If any
order, writ, judgment or decree (an "Order") shall be made or entered by any
court affecting the rights, duties and obligations of the Agent under the Loan
Documents, then and in any of such events the Agent is authorized, in its sole
discretion, to rely upon and comply with such Order; and if the Agent complies
with any such Order, then the Agent, et al., shall not be liable to any Lender
or to any other Person by reason of such compliance, even though such Order may
be subsequently reversed, modified, annulled, set aside, held inapplicable or
vacated.
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12.6 Resignation of the Agent. The Agent, or any Agent or agents
hereafter appointed, at any time may resign by giving written notice of
resignation to the Borrower and the Lenders and complying with the applicable
provisions of this Section. The Agent may be removed in accordance with the
applicable provisions of Section 12.6 and with written notice to the Borrower.
Upon receiving such notice of resignation or removal, a successor Agent shall be
promptly appointed by unanimous action of the Lenders by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Agent and one copy to the successor Agent. If no successor Agent shall have been
so appointed and have accepted the appointment within thirty (30) days after
such notice of resignation, then the resigning Agent may appoint a successor
Agent, which shall itself be subject, however, to removal by the Lenders (other
than any Lender which is then the Agent) without cause (i.e., notwithstanding
the conditions to removal of the Agent stated in Section 12.6) upon thirty (30)
days' written notice, provided that the removing Lenders designate another
successor Agent in such notice - or in a separate written notice given on or
before five (5) days thereafter - to the Agent being removed. If the resigning
Agent does not appoint a successor Agent as provided in the preceding sentence,
then the resigning Agent or the Lenders (other than any Lender which is then the
Agent) may petition any appropriate court for the appointment of a successor
Agent. After such notices, if any, as it may deem proper and prescribe, such
court may appoint a successor Agent.
12.7 Removal of the Agent. If (a) a receiver shall be appointed by any
Governmental Authority of competent jurisdiction and shall take charge or
control of the Agent or of its Property or affairs for the purpose of
rehabilitation, conservation or liquidation, or (b) the Agent shall be grossly
negligent in the performance of its material duties and obligations under this
Agreement or engage in willful misconduct concerning any such material duties
and obligations, then, in any such case, the Lenders (other than any Lender
which is then the Agent) may remove the Agent and appoint a successor by written
instrument, in duplicate, one copy of which shall be delivered to the Agent so
removed and one copy to the successor Agent; or the Lenders (other than any
Lender which is then the Agent) may petition any court of competent jurisdiction
for the removal of the Agent and the appointment of a successor Agent. After
such notice, if any, as it may deem proper and prescribe, such court may remove
the Agent and appoint a successor Agent.
12.8 Effective Date of Resignation or Removal. No resignation or
removal of the Agent shall be effective until (a) a successor Agent is appointed
pursuant to the provisions of this Agreement and has accepted the appointment as
provided in this Agreement, with a copy of such acceptance to be provided by the
successor Agent to the predecessor Agent, the Borrower and the Lenders (but no
notice to any other Person shall be required), and (b) the resigning or removed
Agent has taken such actions (including the deliver to the successor Agent of
Collateral and the execution and delivery to the successor Agent of assignments)
as may be necessary or appropriate to cause the successor Agent to have a
perfected Lien in the collateral for the benefit of the Lenders (provided, that
the Lenders may elect to waive the requirements of this clause (b) to facilitate
succession, although no such waiver shall excuse the resigning or removed Agent
from its obligations under this clause (b) or otherwise), and the Agent agrees
to take any and all such actions as the successor Agent may reasonably request.
Each Lender shall be responsible, ratably, for its share of all reasonable
expenses of the resigning or removed Agent and of the successor Agent incurred
in connection with the actions to be taken in accordance with the provisions of
this Section.
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12.9 Successor Agent. Any successor Agent appointed as provided in
this Article shall execute and deliver to the Borrower and to its predecessor
Agent an instrument accepting such appointment, and thereupon the resignation or
removal of the predecessor Agent shall become effective and such successor
Agent, without any further act, deed or conveyance, shall become vested with all
the rights and obligations of its predecessor, with like effect as if originally
named as the Agent; provided, that upon the written request of the Borrower or
the successor Agent, the Agent ceasing to act shall execute and deliver (a) an
instrument transferring to such successor Agent all of the rights of the Agent
so ceasing to act and (b) to such successor Agent such instruments as are
necessary to transfer the Collateral to such successor Agent (including
assignments of all Collateral or Collateral Documents). Upon the request of any
such successor Agent made from time to time, the Borrower shall execute any and
all papers which the successor Agent shall request or require to more fully and
certainly vest in and confirm to such successor Agent all such rights.
12.10 Credit Decisions. The Lenders expressly acknowledge that neither
the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to
them and that no act by the Agent hereinafter taken, including any consent to or
acceptance of any assignment or any review of the affairs of Borrower, shall be
deemed to constitute any representation or warranty by the Agent to any Lender.
Each Lender acknowledges and agrees that it has, independently and without
reliance upon the Agent or any other Lender and based upon the Financial
Statements of the Borrower and such other documents and information as it has
deemed appropriate (and such Lender represents and agrees that it has received
and reviewed all of the information which it requested and that it requested all
information which it considered material to its credit decision), made its
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of Borrower and into all
applicable banking regulatory laws relating to the transactions contemplated by
the Loan Documents, and such Lender has made its own decision to make Advances
hereunder and enter into this Agreement. Each Lender also acknowledges and
agrees that it will, independently and without reliance upon the Agent, et al.
or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
Borrower which may come into the possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
12.11 Merger of the Agent. Any Person into which the Agent may be
merged or converted or with which it may be consolidated, or any Person
surviving or resulting from any merger, conversion or consolidation to which the
Agent shall be a party or any Person succeeding to the commercial banking
business of the Agent, shall be the successor Agent without the execution or
filing of any paper or any further act on the part of any of the parties.
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12.12 Agent and Affiliates. With respect to its own Notes, the Agent
shall have the same rights and powers under the Loan Documents as any other
Lender and may exercise the same as though it were not the Agent. Each of the
Agent and its Affiliates may accept deposits from, lend money to, act as trustee
under indentures of, and generally engage in any kind of business with the
Borrower, any of its Affiliates and any Person who may do business with or own
securities of any of them, all as if it was not the Agent and without any duty
to account therefor to the Lenders. The Lenders acknowledge that, pursuant to
such activities, the Agent or its affiliates or subsidiaries may receive
information regarding Borrower or its affiliates or subsidiaries (including
information that may be subject to confidentiality obligations in favor of
Borrower or such affiliate or subsidiary) and acknowledge that the Agent shall
be under no obligation to provide such information to them. With respect to the
Advances made by it as a Lender, the Agent shall have the same rights and powers
under this Agreement and the other Loan Documents as any Lender and may exercise
the same as though it were not the Agent, and the terms "Lender" and "Lenders"
shall include the Agent in its individual capacity.
12.13 Lender's Cooperation. The Lenders agree to cooperate among
themselves and with the Agent and from time to time upon the Agent's request, to
execute and deliver such papers as may be reasonably necessary to enable the
Agent, in its capacity as lead lender and servicer, to effectively administer
and service the Loan and each Lender's Senior Credit Note in the manner
contemplated by this Agreement.
12.14 Withholding Tax.
(a) Each Lender that is not a "United States person" within the
meaning of Section 7701(a)(30) of the Code (a "Foreign Lender")
shall deliver to the Agent, prior to receipt of any payment
subject to withholding under the Code (or upon accepting an
assignment of an interest herein), two duly signed completed
copies of either IRS Form W-8BEN or any successor thereto
(relating to such Foreign Lender and entitling it to an exemption
from, or reduction of, withholding tax on all payments to be made
to such Foreign Lender by the Borrower pursuant to this
Agreement) or IRS Form W-8ECI or any successor thereto (relating
to all payments to be made to such Foreign Lender by the Borrower
pursuant to this Agreement) or such other evidence satisfactory
to the Borrower and the Agent that such Foreign Lender is
entitled to an exemption from, or reduction of, U.S. withholding
tax, including any exemption pursuant to Section 881(c) of the
Code. Thereafter and from time to time, each such Foreign Lender
shall (A) promptly submit to the Agent such additional duly
completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the
relevant United States taxing authorities) as may then be
available under then current United States laws and regulations
to avoid, or such evidence as is satisfactory to the Borrower and
the Agent of any available exemption from or reduction of, United
States withholding taxes in respect of all payments to be made to
such Foreign Lender by the Borrower pursuant to this Agreement,
(B) promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or
reduction, and (C) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Lender,
and as may be reasonably necessary (including the re-designation
of its
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Lending Office) to avoid any requirement of applicable Laws that
the Borrower make any deduction or withholding for taxes from
amounts payable to such Foreign Lender.
(b) Each Foreign Lender, to the extent it does not act or ceases to
act for its own account with respect to any portion of any sums
paid or payable to such Lender under any of the Loan Documents
(for example, in the case of a typical participation by such
Lender), shall deliver to the Agent on the date when such Foreign
Lender ceases to act for its own account with respect to any
portion of any such sums paid or payable, and at such other times
as may be necessary in the determination of the Agent (in the
reasonable exercise of its discretion), (A) two duly signed
completed copies of the forms or statements required to be
provided by such Lender as set forth above, to establish the
portion of any such sums paid or payable with respect to which
such Lender acts for its own account that is not subject to U.S.
withholding tax, and (B) two duly signed completed copies of IRS
Form W-8IMY (or any successor thereto), together with any
information such Lender chooses to transmit with such form, and
any other certificate or statement of exemption required under
the Code, to establish that such Lender is not acting for its own
account with respect to a portion of any such sums payable to
such Lender.
(c) The Borrower shall not be required to pay any additional amount
to any Foreign Lender under Section 2.11 (a) with respect to any
Taxes required to be deducted or withheld on the basis of the
information, certificates or statements of exemption such Lender
transmits with an IRS Form W-8IMY pursuant to this Section
12.13(a) or (B) if such Lender shall have failed to satisfy the
foregoing provisions of this Section 12.13(a); provided that if
such Lender shall have satisfied the requirement of this Section
12.13(a) on the date such Lender became a Lender or ceased to act
for its own account with respect to any payment under any of the
Loan Documents, nothing in this Section 12.13(a) shall relieve
the Borrower of its obligation to pay any amounts pursuant to
Section 2.11 in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or order,
or any change in the interpretation, administration or
application thereof, such Lender is no longer properly entitled
to deliver forms, certificates or other evidence at a subsequent
date establishing the fact that such Lender or other Person for
the account of which such Lender receives any sums payable under
any of the Loan Documents is not subject to withholding or is
subject to withholding at a reduced rate.
(d) The Agent may, without reduction, withhold any Taxes required to
be deducted and withheld from any payment under any of the Loan
Documents with respect to which the Borrower is not required to
pay additional amounts under this Section 12.13(a).
(e) Upon the request of the Agent, each Lender that is a "United
States person" within the meaning of Section 7701(a)(30) of the
Code shall deliver to the Agent two duly signed completed copies
of IRS Form W-9. If such Lender fails to
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deliver such forms, then the Agent may withhold from any interest
payment to such Lender an amount equivalent to the applicable
back-up withholding tax imposed by the Code, without reduction.
(f) If any Governmental Authority asserts that the Agent did not
properly withhold or backup withhold, as the case may be, any tax
or other amount from payments made to or for the account of any
Lender, such Lender shall indemnify the Agent therefor, including
all penalties and interest, any taxes imposed by any jurisdiction
on the amounts payable to the Agent under this Section, and costs
and expenses (including Attorney Costs) of the Agent. The
obligation of the Lenders under this Section shall survive the
termination of the Commitment, repayment of all other Obligations
hereunder and the resignation of the Agent.
12.15 Sharing. If any Lender obtains any amount - whether voluntary,
involuntary, or otherwise, including, without limitation, as a result of
exercising its rights under Section 8.5 - that exceeds the portion of that
amount it is otherwise entitled under the Loan Documents to receive, then that
Lender shall purchase from the other Lenders participations that result in the
purchasing Lender's sharing the excess amount ratably with each Lender in
accordance with the portion it is entitled to receive under the Loan Documents.
If all or any of that excess amount is subsequently recovered from that
purchasing Lender, then the purchase of participations in it is automatically
rescinded and the purchase price restored to that purchasing Lender to the
extent of the recovery. Any Lender purchasing a participation from another
Lender under this Section may, to the extent lawful, exercise all of its rights
of payment (including the right of offset) with respect to that participation as
fully as if that Lender were the direct creditor of Borrower in the amount of
that participation.
12.16 Commitment Increases.
(a) At any time and from time to time after the date hereof, the
Commitment may be increased either by an Additional Lender
establishing a Commitment Amount or by one or more then existing
Lenders, at each such Lender's sole discretion ("Increase
Lender") increasing its Commitment Amount (each such increase by
either means, a "Commitment Increase") provided that no
Commitment Increase shall become effective unless and until (i)
the Borrower, the Agent and the Additional Lender or the Increase
Lender shall have executed and delivered an amendment with
respect to such Commitment Increase, and (ii) such Commitment
Increase shall have been consented to by each of the other
Lenders if the total Commitment will exceed $400,000,000.00.
Prior to the effective date of any Commitment Increase, the
Borrower shall issue a Note to the Additional Lender or, against
surrender of its existing Note to an Increase Lender, in the
amount of such Lender's Commitment Amount after giving effect to
such Commitment Increase. Such new promissory notes shall
constitute a "Note" for the purpose of the Loan Documents.
(b) On the effective date of any Commitment Increase, the Agent shall
recompute the Commitment Percentage for each Lender following the
Commitment Increase, and within in two (2) Business Days, the
Agent shall request Advances of the
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affected category from or shall direct prepayments of such
Advances to, each Lender so that the total amount of all then
outstanding Advances of the affected category of each category
are shared pro rata with each Lender, pursuant to Section 2.1
hereof.
12.17 Participation. Each Lender reserves the rights, with prior notice
to and consent of Borrower, which consent shall not be unreasonably withheld
except that Borrower may withhold consent to a participation to a competitor of
Borrower in Borrower's sole and absolute discretion, and the Agent, to sell to
any bank, savings and loan, savings bank, credit union, other deposit-taking
financial institution or commercial lending institution, participations in all
or any part of such Lender's Advances, Note or Commitment. Participants shall
have no rights under the Loan Documents other than certain voting rights as
provided below. Each Lender shall be entitled to obtain (on behalf of its
participants) the benefits of this Agreement with respect to all participants in
its Advances outstanding from time to time; provided that the Borrower shall not
be obligated to pay any amount in excess of the amount that would be due to such
Lender calculated as though no participation had been made. No Lender shall sell
any participating interest of less than FIVE MILLION AND NO/100 DOLLARS
($5,000,000.00) or under which the participant shall have any rights to approve
any amendment, modification or waiver of any Loan Documents. Except in the case
of the sale of a participating interest to a Lender, the relevant participation
agreement shall not permit the participant to transfer, pledge, assign, sell any
subparticipation in or otherwise alienate or encumber its participation interest
in the Loan.
12.18 Amendments and Modifications.
(a) Without the written consent of all of the Lenders who would be
adversely affected, including Citicorp USA, Inc., the Agent shall
not agree to any amendments or modifications to the Loan
Documents, or grant a written waiver of or a written consent
required by any provision of them, the effect of which would be
to (a) change the amount or the due date of any required payment
other than in accordance with the express provisions of the Loan
Documents, (b) change the interest rate provisions of this
Agreement, (c) change the provisions of Section 2.1(a) of this
Agreement; (d) extend the Maturity Date, (e) change any sharing
ratio applicable to the Lenders under this Agreement except
pursuant to the express provisions of this Agreement, (f) change
the several nature of the Lenders' respective obligations to make
Advances this Agreement, (g) release any substantial amount of
Collateral other than pursuant to the express provisions of this
Agreement, (h) amend this Section or the definition of "Majority
Lenders", (i) increase the amount of any Lender's Commitment
Amount, in each case other than as contemplated by the terms of
this Agreement.
(b) Without the written consent of the Majority Lenders, the Agent
shall not agree to any amendments or modifications of the Loan
Documents or grant a written waiver of any provision therein the
effect of which would be to (a) change the provisions of Section
2.1(b) of this Agreement; (b) waive any material Event of Default
under the Loan Documents (except for any Event of Default caused
by the failure to pay the Obligations at the maturity); or (c)
change or modify any other provision of this Agreement in any
material respect. Agent may, in its sole
Page 70
discretion, warehouse or continue to warehouse Mortgage Loans
which fail to qualify as Eligible Loans ("Ineligible Loans") and
waive or temporarily suspend or delay any obligation of the
Borrower hereunder in connection with such Ineligible Loans,
including, without limitation, suspension of any mandatory
prepayment due in connection with such Ineligible Loans, so long
as either (xx) the aggregate Advances outstanding at any one time
against such Ineligible Loans shall not exceed TEN MILLION AND
NO/100 DOLLARS ($10,000,000.00) or (yy) Borrower has deposited
with the Agent cash, in a restricted non-interest bearing account
pledged to the Agent, as additional security for the repayment
and performance of the Obligations in full, in an amount equal to
100% of the aggregate amount of all Advances outstanding against
such Ineligible Loans in excess of $10,000,000.00.
13. MISCELLANEOUS.
13.1 Assignment. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time and from time to
time assign to any Lender or any Affiliate thereof or, with the consent of the
Agent and the Borrower (which shall not unreasonably be withheld except that
Borrower may withhold consent to a participation to a competitor of Borrower in
Borrower's sole and absolute discretion), to any other Person (collectively,
"Purchasing Lenders") all or any part of its rights and obligations under this
Agreement and the other Loan Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit "J" (an "Assignment and Acceptance")
executed by such Purchasing Lender (and, in the case of a Purchasing Lender that
is not then a Lender or an Affiliate thereof, by the Agent) and delivered to the
Agent for its acceptance and recording in the Register (as defined in Section
13.2); provided, that, (a) assigning Lender shall pay to the Agent an assignment
fee in the amount of FIVE THOUSAND AND NO/100 DOLLARS ($5,000.00), except in the
case of an assignment of all of a Lender's rights and obligations under this
Agreement, (b) the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment shall equal at least FIVE MILLION AND
NO/100 DOLLARS ($5,000,000.00) and (c) after giving effect to each such
assignment, the amount of the remaining Commitment of the assigning Lender shall
equal at least FIFTEEN MILLION AND NO/100 DOLLARS ($15,000,000.00) (or, in each
case, such lesser amount to which the Agent may consent). Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Purchasing Lender thereunder
shall be a party hereto and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder with a
Commitment Percentage as set forth therein, and (y) the assigning Lender
thereunder shall to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of such
assigning Lender's rights and obligations under this Agreement, such assigning
Lender shall cease to be a party hereto). Such Assignment and Acceptance shall
be deemed to amend this Agreement to the extent, and only to the extent,
necessary to reflect the addition of such Purchasing Lender and the resulting
adjustment of Commitment Percentages arising from the purchase by such
Purchasing Lender of all or a portion of the rights and obligations of such
assigning Lender.
Page 71
13.2 The Register. The Agent, on behalf of Borrower, shall maintain at
the office of the Agent a copy of each Assignment and Acceptance delivered to it
and a register (the "Register") for the recordation of the names and addresses
of the Lenders and the Commitment Percentage of, and principal amount of the
Advances owing to, each Lender from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and Borrower, the Agent
and the Lenders shall treat each Person whose name is recorded in the Register
as the percentage owner of an Advance or other Obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. The Register shall be available for
inspection by Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and a Purchasing Lender (and, in the
case of a Purchasing Lender that is not then a Lender or an Affiliate thereof,
by the Agent and the $5,000.00 assignment fee), the Agent shall (i) promptly
accept such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to the Lenders and Borrower.
13.3 Confidentiality. Each of Agent and the Lenders agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates' directors, officers,
employees and agents, including accountants, legal counsel and other advisors,
in connection with matters relating to the credit relationship with the Borrower
and/or the administration of the Loan Documents (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority
(including any self-regulatory authority, such as the National Association of
Insurance Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or under any other Loan Document or any action or proceeding relating to this
Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any eligible assignee of or participant
in, or any prospective eligible assignee of or participant in, any of its rights
or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
Borrower and its obligations, (g) with the consent of Borrower or (h) to the
extent such Information (x) becomes publicly available other than as a result of
a breach of this Section 13.3 or (y) becomes available to Agent or any Lender on
a nonconfidential basis from a source other than Borrower. For purposes of this
Section 13.3, "Information" means all information received from any Borrower
relating to any Borrower or any of their respective businesses, other than any
such information that is available to Agent or any Lender on a nonconfidential
basis prior to disclosure by any Borrower. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information. Notwithstanding
anything in this Agreement to the contrary, "Information" shall not include, and
Agent and each Lender may disclose without limitation of any kind, any
information with respect to the "tax treatment" and "tax structure" (in each
case, within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated hereby
Page 72
and all materials of any kind (including opinions or other tax analyses) that
are provided to Agent or such Lender relating to such tax treatment and tax
structure; provided that, with respect to any document or similar item that in
either case contains information concerning the tax treatment or tax structure
of the transaction as well as other information, this sentence shall only apply
to such portions of the document or similar item that relate to the tax
treatment or tax structure of the Loan and transactions contemplated hereby. In
addition, Agent may disclose to any agency or organization that assigns standard
identification numbers to loan facilities such basic information describing the
facilities provided hereunder as is necessary to assign unique identifiers (and,
if requested, supply a copy of this Agreement), it being understood that the
Person to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to make available to the public only
such Information as such person normally makes available in the course of its
business of assigning identification numbers.
13.4 Disclosures. Borrower authorizes each Lender to disclose to any
Purchasing Lender or to any participant (each, a "Transferee"), and any
prospective Transferee, any and all financial information in such Lender's
possession concerning Borrower and its Affiliates which has been delivered to
such Lender by or on behalf of Borrower pursuant to this Agreement or which has
been delivered to such Lender by or on behalf of Borrower in connection with
such Lender's credit evaluation of Borrower and its Affiliates prior to becoming
a party to this Agreement; provided, however, that such prospective Transferee
agrees it shall be subject to the same confidentiality requirements as any
Lender hereunder with respect to such information.
13.5 Pledges. Nothing herein shall prohibit any Lender from pledging
or assigning all or any portion of its interest in Advances to any Federal
Reserve Bank in accordance with applicable law.
13.6 Governing Law. This Agreement and the other Loan Documents shall
be governed by the laws of the State of New York, without reference to its
principles of conflicts of laws.
13.7 Relationship of the Parties. This Agreement provides for the
making of Advances by the Lenders, in their capacity as lenders, to the
Borrower, in its capacity as a borrower, and for the payment of interest,
repayment of principal by the Borrower to the Lenders, and for the payment of
certain fees by the Borrower to the Lenders and the Agent. The relationship
between the Lenders and the Borrower is limited to that of creditor/secured
party, on the one hand, and debtor, on the other hand. The provisions herein for
compliance with financial covenants and delivery of financial statements are
intended solely for the benefit of the Lenders to protect their interests as
lenders in assuring payments of interest and repayment of principal and payment
of certain fees, and nothing contained in this Agreement shall be construed as
permitting or obligating the Agent or the Lenders to act as a financial or
business advisor or consultant to the Borrower, as permitting or obligating the
Agent or the Lenders to control the Borrower or to conduct the Borrower's
operations, as creating any fiduciary obligation on the part of the Agent or the
Lenders to the Borrower, or as creating any joint venture, agency, or other
relationship between the parties hereto other than as explicitly and
specifically stated in this Agreement. The Borrower acknowledges that it has had
the opportunity to obtain the advice of experienced counsel of its own choosing
in connection with the negotiation and execution of this Agreement and to obtain
the advice of such counsel with respect to all matters contained herein,
including,
Page 73
without limitation, the provision for waiver of trial by jury. The Borrower
further acknowledges that it is experienced with respect to financial and credit
matters and has made its own independent decisions to apply to the Lenders for
credit and to execute and deliver this Agreement.
13.8 Severability. If any provision of this Agreement shall be
declared to be illegal or unenforceable in any respect, such illegal or
unenforceable provision shall be and become absolutely null and void and of no
force and effect as though such provision were not in fact set forth herein, but
all other covenants, terms, conditions and provisions hereof shall nevertheless
continue to be valid and enforceable.
13.9 Usury. It is the intent of Lenders and the Borrower in the
execution and performance of this Agreement and the Notes or any Loan Document
to remain in strict compliance with Applicable Law from time to time in effect.
In furtherance thereof, Lenders and the Borrower stipulate and agree that none
of the terms and provisions contained in the Notes, this Agreement or any Loan
Document shall ever be construed to create a contract to pay for the use,
forbearance or detention of money with interest at a rate or in an amount in
excess of the Maximum Rate or amount of interest permitted to be charged under
Applicable Law. For purposes of this Agreement, the Notes and any other Loan
Document, "interest" shall include the aggregate of all charges which constitute
interest under Applicable Law that are contracted for, taken, charged, reserved,
or received under this Agreement, the Notes or any other Loan Document. The
Borrower shall never be required to pay unearned interest or interest at a rate
or in an amount in excess of the Maximum Rate or amount of interest that may be
lawfully charged under Applicable Law, and the provisions of this paragraph
shall control over all other provisions of this Agreement and the Notes or any
Loan Document, which may be in actual or apparent conflict herewith. If the
Notes are prepaid, or if the maturity of the Notes is accelerated for any
reason, or if under any other contingency the effective rate or amount of
interest which would otherwise be payable under the Notes would exceed the
Maximum Rate or amount of interest any Lender or any other holder of the Notes
is allowed by Applicable Law to charge, contract for, take, reserve or receive,
or in the event any Lender or any holder of the Notes shall charge, contract
for, take, reserve or receive monies that are deemed to constitute interest
which would, in the absence of this provision, increase the effective rate or
amount of interest payable under the Notes to a rate or amount in excess of that
permitted to be charged, contracted for, taken, reserved or received under
Applicable Law then in effect, then the principal amount of the Notes or the
amount of interest which would otherwise be payable under the Notes or both
shall be reduced to the amount allowed under Applicable Law as now or
hereinafter construed by the courts having jurisdiction, and all such moneys so
charged, contracted for, taken, reserved or received that are deemed to
constitute interest in excess of the Maximum Rate or amount of interest
permitted by Applicable Law shall immediately be returned to or credited to the
account of the Borrower upon such determination. Lenders and the Borrower
further stipulate and agree that, without limitation of the foregoing, all
calculations of the rate or amount of interest contracted for, charged, taken,
reserved or received under the Notes which are made for the purpose of
determining whether such rate or amount exceeds the Maximum Rate, shall be made
to the extent not prohibited by Applicable Law, by amortizing, prorating,
allocating and spreading during the period of the full stated term of the Notes,
all interest at any time contracted for, charged, taken, reserved or received
from the Borrower or otherwise by any Lender or any other holder of the Notes.
Page 74
13.10 Consent to Jurisdiction. THE BORROWER, AGENT, AND EACH LENDER
AGREES THAT ANY SUIT OR PROCEEDING UNDER THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL
COURT SITTING THEREIN AND CONSENTS TO THE EXCLUSIVE JURISDICTION OF SUCH COURT
AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER, AGENT
OR SUCH LENDER BY FIRST CLASS MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO
BORROWER, AGENT, OR SUCH LENDER AT THE ADDRESS SPECIFIED IN SECTION 9 HEREOF.
THE BORROWER, AGENT, AND EACH LENDER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH
SUIT IS BROUGHT IN AN INCONVENIENT COURT.
13.11 ADDITIONAL INDEMNITY. IN ADDITION TO THE INDEMNITY PROVIDED IN
SECTION 10, THE BORROWER SHALL INDEMNIFY AND HOLD AGENT, LENDER, AND THEIR
RESPECTIVE SUCCESSORS, ASSIGNS, AGENTS, AND EMPLOYEES (COLLECTIVELY, THE
"INDEMNIFIED PARTIES"), HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, ACTIONS,
SUITS, PROCEEDINGS, COSTS, EXPENSES, DAMAGES, FINES, PENALTIES, AND LIABILITIES,
INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES AND COSTS, ARISING OUT OF,
CONNECTED WITH, OR RESULTING FROM (A) THE OPERATION OF THE BORROWER'S
BUSINESSES, (B) ANY INDEMNIFIED PARTY'S PRESERVATION OR ATTEMPTED PRESERVATION
OF COLLATERAL, AND (C) ANY FAILURE OF THE SECURITY INTERESTS AND LIENS IN THE
COLLATERAL GRANTED TO THE AGENT FOR THE BENEFIT OF THE LENDERS PURSUANT TO THIS
AGREEMENT TO BE OR TO REMAIN PERFECTED OR TO HAVE THE PRIORITY AS CONTEMPLATED
THEREIN REGARDLESS OF WHETHER THE CLAIM IS CAUSED BY OR ARISES OUT OF, IN WHOLE
OR IN PART, THE NEGLIGENCE OF ANY INDEMNIFIED PARTY OR MAY BE BASED ON THE
STRICT LIABILITY OF ANY INDEMNIFIED PARTY. THIS INDEMNITY SHALL NOT APPLY TO THE
EXTENT THE SUBJECT OF THE INDEMNIFICATION IS CAUSED BY OR ARISES OUT OF THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY INDEMNIFIED PARTY. AT THE REQUEST
OF ANY INDEMNIFIED PARTY, THE BORROWER SHALL, AT ITS OWN COST AND EXPENSE,
DEFEND OR CAUSE TO BE DEFENDED ANY AND ALL SUCH ACTIONS OR SUITS THAT MAY BE
BROUGHT AGAINST ANY INDEMNIFIED PARTY AND, IN ANY EVENT, SHALL SATISFY, PAY, AND
DISCHARGE ANY AND ALL JUDGMENTS, AWARDS, PENALTIES, COSTS, AND FINES THAT MAY BE
RECOVERED AGAINST ANY INDEMNIFIED PARTY IN ANY SUCH ACTION, PLUS ALL ATTORNEYS'
FEES AND COSTS RELATED THERETO TO THE EXTENT PERMITTED BY APPLICABLE LAW;
PROVIDED, HOWEVER, THAT SUCH INDEMNIFIED PARTY SHALL GIVE THE BORROWER (TO THE
EXTENT SUCH INDEMNIFIED PARTY SEEKS INDEMNIFICATION THEREFOR FROM THE BORROWER
UNDER THIS SECTION 13.10) WRITTEN NOTICE OF ANY SUCH CLAIM, DEMAND, OR SUIT
AFTER SUCH INDEMNIFIED PARTY HAS RECEIVED WRITTEN NOTICE THEREOF, AND SUCH
INDEMNIFIED PARTY SHALL NOT SETTLE ANY SUCH CLAIM, DEMAND, OR SUIT, IF SUCH
INDEMNIFIED PARTY
Page 75
SEEKS INDEMNIFICATION THEREFOR FROM THE BORROWER, WITHOUT FIRST GIVING NOTICE TO
THE BORROWER OF THE INDEMNIFIED PARTY'S DESIRE TO SETTLE AND OBTAINING THE
CONSENT OF THE BORROWER TO THE SAME, WHICH CONSENT THE BORROWER HEREBY AGREES
NOT TO UNREASONABLY WITHHOLD. ALL OBLIGATIONS OF THE BORROWER UNDER THIS SECTION
13.10 SHALL SURVIVE THE PAYMENT OF THE NOTES AND THE OBLIGATIONS.
13.12 No Waivers Except in Writing. No failure or delay on the part of
the Agent in exercising any power or right hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. No notice to or demand on
the Borrower or any other Person in any case shall entitle the Borrower or such
other Person to any other or further notice or demand in similar or other
circumstances.
13.13 WAIVER OF JURY TRIAL. AS TO THIS AGREEMENT THE BORROWER, THE
AGENT AND EACH OF THE LENDERS HEREBY (a) COVENANTS AND AGREES NOT TO ELECT A
TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (b) WAIVES ANY RIGHT
TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN, KNOWINGLY AND
VOLUNTARILY, BY THE BORROWER, THE AGENT AND EACH OF THE LENDERS, AND THIS WAIVER
IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH
THE RIGHT OF A JURY TRIAL WOULD OTHERWISE ACCRUE. THE AGENT, THE LENDERS AND THE
BORROWER ARE HEREBY AUTHORIZED AND REQUESTED TO SUBMIT THIS AGREEMENT TO ANY
COURT HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES HERETO, SO AS
TO SERVE AS CONCLUSIVE EVIDENCE OF THE FOREGOING WAIVER OF THE RIGHT TO JURY
TRIAL. FURTHER THE AGENT, THE BORROWER AND EACH OF THE LENDERS HEREBY CERTIFIES
THAT NO REPRESENTATIVE OR AGENT OF ANY OF THEM, RESPECTIVELY, HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, TO ANY OF THE UNDERSIGNED THAT EITHER OF THE AGENT, THE
BORROWER OR ANY OF THE LENDERS WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
JURY TRIAL PROVISION.
13.14 Multiple Counterparts. This Agreement may be executed in any
number of counterparts, all of which, taken together, shall constitute one and
the same instrument.
13.15 No Third Party Beneficiaries. This Agreement is for the sole and
exclusive benefit of the Borrower, the Agent, and Lenders. This Agreement does
not create, and is not intended to create, any rights in favor of or enforceable
by any other Person. This Agreement may be amended or modified by the agreement
of the Borrower, the Agent, and Lenders, without any requirement or necessity
for notice to, or the consent of or approval of any other Person.
Page 76
13.16 RELEASE OF LIABILITY. TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW
FROM TIME TO TIME IN EFFECT, THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY (AND AFTER IT HAS CONSULTED WITH ITS OWN ATTORNEY) IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT NO CLAIM MAY BE MADE BY THE BORROWER AGAINST THE
AGENT, EACH LENDER, OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES,
ATTORNEYS, ACCOUNTANTS, AGENTS OR INSURERS, OR ANY OF THEIR SUCCESSORS AND
ASSIGNS, FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT
OF ANY BREACH OR WRONGFUL CONDUCT (WHETHER THE CLAIM IS BASED ON CONTRACT OR
TORT OR DUTY IMPOSED BY LAW) ARISING OUT OF, OR RELATED TO, THE TRANSACTIONS
CONTEMPLATED BY ANY OF THIS AGREEMENT, THE NOTES, OR ANY OTHER LOAN DOCUMENTS,
OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH. IN
FURTHERANCE OF THE FOREGOING, THE BORROWER HEREBY WAIVES, RELEASES AND AGREES
NOT TO ▇▇▇ UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT ACCRUED AND
WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
13.17 Patriot Act. Each Lender and the Agent (for itself and not on
behalf of any Lender) hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001) (the "Act"), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender or
the Agent, as applicable, to identify the Borrower in accordance with the Act.
13.18 Entire Agreement; Amendment. This Agreement, the Notes, and the
other Loan Documents referred to herein embody the final, entire Agreement among
the parties hereto and supersede any and all prior commitments, agreements,
representations, and understandings, whether written or oral, relating to the
subject matter hereof. The provisions of this Agreement and the other Loan
Documents to which the Borrower is a party may be amended or waived only by an
instrument in writing signed by the parties hereto.
Page 77
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
BORROWER:
--------
CENTERLINE MORTGAGE CAPITAL INC.,
a Delaware corporation
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
CENTERLINE MORTGAGE PARTNERS INC.,
a Delaware corporation
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Page 78
AGENT:
-----
CITICORP USA, INC.,
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Page 79
LENDER:
CITICORP USA, INC.,
a ______________, as a Lender
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Page 80
EXHIBIT "A"
-----------
ADVANCE REQUEST FOR ADVANCE
AGAINST
ELIGIBLE LOANS
-------------------------------------------------------------------------------
Centerline Mortgage Capital Inc. and Centerline Mortgage Partners Inc.
Date of Request: _____________ ___, 2007
The undersigned hereby gives notice pursuant to of that certain
Warehousing Credit and Security Agreement of its request to have the following
Advance made to it on ______________, 2007
ELIGIBLE LOAN TYPE: |_| ▇▇▇▇▇▇ MAE DUS MORTGAGE LOAN
|_| OTHER ▇▇▇▇▇▇ ▇▇▇ MORTGAGE LOAN
|_| ▇▇▇▇▇▇▇ MAC MORTGAGE LOAN
|_| FHA CONSTRUCTION MORTGAGE LOAN
|_| FHA PROJECT MORTGAGE LOAN
STATUS OF ELIGIBLE LOAN: |_| FIRST MORTGAGE LOAN
|_| SECOND MORTGAGE LOAN
|_| THIRD MORTGAGE LOAN
Loan No.: ____________________________ Warehouse Date: ____________________
Project Name: ________________________ Contract/Pool No.: _________________
Project State and Zip Code: __________
Mortgage Note Amount: ________________ Interest Rate: _____________________
Mortgage Note Date: __________________
Advance Amount: __________
Approved Warehouse Amount: ___________ Endorsement Amount: ________________
Cumulative Endorsement Amount: _______
Investor: ____________________________ Expiration Date: ___________________
Committed Purchase Price: ____________
Title Company/Closing Agent: ___________________________________________________
Title Contact Person: __________________ Phone No.: _________________________
Title Company Address: _________________________________________________________
Security Rate: ___________ Issue Rate: ______________ Maturity Date: _______
WIRE TRANSFER INFORMATION
-------------------------
WIRE #1
-------
Wire Amount: ________________________ Date of Wire: ______________________
Receiving Bank: _____________________ ABA No.: ___________________________
City & State: _______________________
Credit Account Name: ________________ Number: ____________________________
Advise: _____________________________ Phone: _____________________________
Exhibit "A" Page 81
-----------
Email Address:
WIRE #2
-------
Wire Amount: ________________________ Date of Wire: ______________________
Receiving Bank: _____________________ ABA No.: ____________________
City & State: _______________________
Credit Account Name: ________________ Number: ____________________________
Advise: _____________________________ Phone: _____________________________
Email Address:
As applicable, ______________________________ (the "Borrower") hereby
grants a security interest to Citicorp USA, Inc., as Agent (the "Agent") for a
syndicate of Lenders (the "Lenders"), in all of Borrower's right, title and
interest in and to the Mortgage Loan described above and all related Collateral
pursuant to Section 3.3 of that certain Warehousing Credit and Security
Agreement, dated as of May 31, 2007, as amended, among the Borrower, the Agent
and the Lenders (as amended, restated, renewed or replaced, the "Agreement").
Capitalized terms used in this Advance Request without further definition have
the meanings set forth in the Agreement.
The undersigned represents and warrants as follows:
(a) The borrowing requested hereby complies with the requirements of the
Agreement.
(b) Each representation and warranty made under Section 5 of the
Agreement is true and correct at and as of the date hereof and (except to the
extent the undersigned gives notice to the Agent to the contrary prior to 5:00
p.m. (New York time) on the Business Day before the requested date for the
making of the Advance) will be true and correct at and as of the time the
Advance is made, in each case both with and without giving effect to the Advance
and the application of the proceeds thereof.
(c) No Default has occurred and is continuing as of the date hereof or
would result from the making of the Advance or from the application of the
proceeds thereof if the Advance was made on the date hereof, and (except to the
extent the undersigned gives notice to the Agent to the contrary prior to 5:00
p.m. (New York time) on the Business Day before the requested date for the
making of the Advance) no Default will have occurred and be continuing at the
time the Advance is to be made or would result from the making of the Advance or
from the application of the proceeds thereof.
(d) Borrower agrees to cause the Mortgage Note(s) and all other required
Collateral Documents to be delivered to Collateral Custodian no later than the
first Business Day after the date of the Advance made to fund the Mortgage Loan
or the second Business Day after the date of the Advance if delivery is not
practical due to the time of the settlement. *
---------------------------------------------
By: ________________________________
Name:___________________________
Title:__________________________
* Not applicable.
▇▇▇▇▇▇▇ Mac requires the Mortgage Note and all required Collateral Documents
to be delivered to their office on or before the delivery date. The Mortgage
Note will be forwarded to Collateral Custodian for endorsement immediately
following closing. Collateral Custodian will then forward the original
Mortgage Note to ▇▇▇▇▇▇▇ Mac.
Exhibit "A" Page 82
-----------
EXHIBIT "B"
RESERVED
Exhibit "B" Page 83
-----------
EXHIBIT "C"
-----------
PROCEDURES AND DOCUMENTATION FOR WAREHOUSING
▇▇▇▇▇▇▇ MAC MORTGAGE LOANS
Centerline Mortgage Capital Inc. and Centerline Mortgage Partners Inc.
Centerline Mortgage Capital Inc. and Centerline Mortgage Partners Inc.
(collectively, "Borrower") must observe the following procedures and
documentation requirements in all respects. All documents must be satisfactory
to Citicorp USA, Inc. ("Agent") in its sole discretion. Capitalized terms used
in this Exhibit without further definition have the meanings set forth in the
Warehousing Credit and Security Agreement between Borrower and Agent and the
other lenders parties thereto (as amended, restated, renewed or replaced,
"Agreement"). ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac form numbers used in this Exhibit are
for convenience only and Borrower must use the equivalent forms required at the
time of delivery of a Pledged Loan or a Pledged Security.
I. AT LEAST 3 BUSINESS DAYS PRIOR TO THE ADVANCE DATE:
The Agent and the Collateral Custodian must receive a letter signed by Borrower,
providing the following information on the Pledged Loan:
(a) Mortgagor's name.
(b) Project name.
(c) Borrower's case/loan number.
(d) Expected Advance date.
(e) Mortgage Note Amount.
(f) Name, street address, e-mail address, telephone number and
telecopier number of title company or settlement attorney and
contact person.
II. AT LEAST 1 BUSINESS DAY PRIOR TO THE ADVANCE DATE:
The Collateral Custodian must receive the following:
(a) An original or facsimile of the signed Advance Request (Exhibit
A).
(b) For ▇▇▇▇▇▇▇ Mac Mortgage Loans, a copy of the signed Letter of
Commitment from ▇▇▇▇▇▇▇ Mac with Exhibit A (Interest Rate Lock
and Mortgage Terms Confirmation Sheet) attached or the Purchase
Agreement for Multifamily PC Swaps.
(c) If a Mortgage-backed Security is to be issued, a copy of the
Purchase Commitment for the Pledged Security.
(d) If Borrower is not the named holder on the Mortgage Note, copies
of (a) the assignment of Mortgage by the mortgagee to Borrower
that was sent for recordation on or before the date of the
Advance, and (b) the assignments of UCC financing statements by
the secured party to Borrower that were sent for recordation on
or before the date of the Advance.
(e) Original assignment of the Mortgage, endorsed by Borrower in
blank, in recordable form but unrecorded.
Exhibit "C" Page 84
-----------
Upon receipt of the letter required under Section I above, in form and substance
satisfactory to the Agent and Collateral Custodian, the Collateral Custodian
will issue its escrow instruction letter to the title company or the settlement
attorney. The Advance, when wired by the Agent to the title company or the
settlement attorney, shall be held in an escrow account of the title company or
the settlement attorney and disbursed in accordance with the closing letter of
the Borrower or its counsel when authorized by the Collateral Custodian in its
escrow instruction letter. No Advance will be made by the Lenders prior to the
Collateral Custodian's receipt of all Collateral Documents required under
Section II above. Disbursement will be authorized only after the title company
or settlement attorney takes possession, on behalf of the Collateral Custodian
for the benefit of Agent and Lenders, of the signed Mortgage Note, endorsed by
the Borrower in blank and without recourse, and the title company has issued its
title insurance policy. Immediately after disbursement, the title company or
settlement attorney shall be required to transmit the Mortgage Note and
certified true copy of the title insurance policy directly to the Collateral
Custodian. In the event the Pledged Loan is not closed and the related Mortgage
recorded by 3:00 p.m. on the date of the Advance, the title company or the
settlement attorney is instructed to return the Advance to Agent no later than
the 1st Business Day following the date of the Advance.
The foregoing arrangements, permitting funding of the Advance when the Mortgage
Note has been delivered to a third person on behalf of, and as agent and bailee
for the Agent, and before the Mortgage Note is received by the Collateral
Custodian for the benefit of Agent and the Lenders, are for the convenience of
the Borrower. All risk of loss or non-delivery of the Mortgage Note is that of
the Borrower, and the Collateral Custodian and Agent have no liability or
responsibility therefor.
III. ON THE FIRST BUSINESS DAY AFTER THE ADVANCE DATE(or the second Business
Day after the date of the Advance if delivery is not practical due to
the time of the settlement):
The Collateral Custodian must receive the following:
(a) The original Mortgage Note, endorsed by Borrower in blank and
without recourse. If Borrower is not the named holder of the
Mortgage Note, the Mortgage Note must bear an endorsement from
the holder to Borrower; and
(b) A copy of the first page of the title insurance policy or the
title insurance commitment to issue a policy marked to show the
final policy exceptions, which:
(1) Names as insured Borrower and/or the Investor, and their
successors and assigns, as their interests may appear;
(2) Shows effective date and time which is as of the date
and time of disbursement of the Advance from escrow; and
(3) Sets forth an insured amount which is equal to or
greater than the Advance amount.
IV. AS SOON AS POSSIBLE FOLLOWING THE ADVANCE DATE, AND NO LATER THAN 1
BUSINESS DAY PRIOR TO THE DATE THE INVESTOR OR THE APPROVED CUSTODIAN
MUST RECEIVE THE PLEDGED LOAN:
Exhibit "C" Page 85
-----------
The Collateral Custodian must receive the following:
(a) Signed shipping instructions for the delivery of the Pledged
Loan, including the following:
(b) Name and address of the Investor or the Approved Custodian to
which the Collateral Documents are to be shipped, the desired
shipping date and the preferred method of delivery;
(c) Name of project securing the Pledged Loan;
(d) Date by which the Investor or the Approved Custodian must
receive the Pledged Loan; and
(e) Instructions for endorsement of the Mortgage Note.
V. For ▇▇▇▇▇▇▇ Mac Mortgage Loans, the following additional documents must
be received:
(a) For cash payments, the signed original Wire Transfer
Authorization for a Cash Warehouse Delivery (▇▇▇▇▇▇▇ Mac Form
987), showing Lender as warehouse lender and specifying the Cash
Collateral Account as the receiving account for loan purchase
proceeds;
(b) Completed, but not signed, Warehouse Lender Release of Security
Interest (▇▇▇▇▇▇▇ Mac Form 996), to be signed by Lender;
(c) If a Mortgage-backed Security is to be issued by ▇▇▇▇▇▇▇ Mac, a
Warehouse Lender Release of Security Interest (▇▇▇▇▇▇▇ Mac Form
996) with security wire instructions completed, instructing
▇▇▇▇▇▇▇ Mac to deliver the Pledged Security to the Collateral
Custodian's custody account ▇▇ ▇▇▇▇▇▇ Chase Bank, ABA No.
▇▇▇▇▇▇▇▇▇ (JPMORGAN CHASE/CUST/________) for the benefit of the
Agnet and the Lenders; and
(d) If a Mortgage-backed Security is to be issued, completed and
signed Security Delivery Instructions, in the form attached as
Schedule I to this Exhibit.
VI. The remainder of the documents required for shipping to the Investor as
specified by the Investor or in the applicable Seller/Servicer Guide.
Unless otherwise agreed in writing with Borrower, the Collateral Custodian
exclusively will deliver the Mortgage Note and other original Collateral
Documents required by this Exhibit evidencing the Pledged Loan, together with a
bailee letter, to an Investor or an Approved Custodian. Upon instruction by
Borrower, the Collateral Custodian will complete the endorsement of the Mortgage
Note. If no Mortgage-backed Security is to be issued, the Collateral Custodian
will deliver the Mortgage Note and the other documents required for shipping to
the Investor as specified by the Investor or in the applicable Seller/Servicer
Guide with a bailee letter to the Investor that issued the Purchase Commitment
for the Pledged Loan or to an Approved Custodian for the Investor. If a
Mortgage-backed Security is to be issued, the Collateral Custodian will deliver
the Mortgage Note and the other documents required for shipping.
Exhibit "C" Page 86
-----------
SCHEDULE I TO EXHIBIT C/▇▇▇▇▇▇▇ Mac
CITICORP USA, INC.
WAREHOUSE LENDING DIVISION
SECURITY DELIVERY INSTRUCTIONS
INSTRUCTIONS MUST BE RECEIVED 2 BUSINESS DAYS IN ADVANCE OF PICK-UP/DELIVERY
---------------------------------------------------------------- ---------------------------------------------------------------
BOOK-ENTRY DATE: SETTLEMENT DATE:
----------------------------------------- ------------------------------------------
---------------------------------------------------------------- ---------------------------------------------------------------
ISSUER: SECURITY: $
-------------------------------------------------- ------------------------------------------
---------------------------------------------------------------- ---------------------------------------------------------------
NO. OF CERTIFICATES: 1)
------------------------------------ -------------------------------------------------------
---------------------------------------------------------------- ---------------------------------------------------------------
2)
-------------------------------------------------------
---------------------------------------------------------------- ---------------------------------------------------------------
3)
-------------------------------------------------------
---------------------------------------------------------------- ---------------------------------------------------------------
CUSIP NO.
------------------------------------------------
---------------------------------------------------------------- ---------------------------------------------------------------
Pool No. MI No. Coupon Rate:
--------------- ---------------- ---------------------
------------------------------------------------------------------------------- ------------------------------------------------
Issue Date (M/D/Y): Maturity Date (M/D/Y):
------------------------------------- -----------
------------------------------------------------------------------------------- ------------------------------------------------
POOL TYPE (circle one):
--------------------------- ------------------------ ---------------------------- ------------------------- --------------------
▇▇▇▇▇▇ Mae: ▇▇▇▇▇▇ ▇▇▇ I ▇▇▇▇▇▇ ▇▇▇ ▇▇
--------------------------- ------------------------ ---------------------------- ------------------------- --------------------
▇▇▇▇▇▇▇ Mac: FIXED ARM DISCOUNT NOTE
--------------------------- ------------------------ ---------------------------- ------------------------- --------------------
▇▇▇▇▇▇ ▇▇▇: FIXED ARM DISCOUNT NOTE DEBENTURES REMIC
----------------------------------------------------------------- --------------------------------------------------------------
DELIVER TO: ( ) Versus Payment
-------------------------------------------
----------------------------------------------------------------- --------------------------------------------------------------
DVP AMOUNT $
------------------------------------------- ------------------------------------------
----------------------------------------------------------------- --------------------------------------------------------------
( ) Free Delivery
-------------------------------------------
----------------------------------------------------------------- --------------------------------------------------------------
DELIVER TO: ( ) Versus Payment
-------------------------------------------
----------------------------------------------------------------- --------------------------------------------------------------
DVP AMOUNT $
------------------------------------------- -------------------------------------------
----------------------------------------------------------------- --------------------------------------------------------------
( ) Free Delivery
-------------------------------------------
----------------------------------------------------------------- --------------------------------------------------------------
DELIVER TO: ( ) Versus Payment
-------------------------------------------
----------------------------------------------------------------- --------------------------------------------------------------
DVP AMOUNT $
------------------------------------------- -------------------------------------------
----------------------------------------------------------------- --------------------------------------------------------------
( ) Free Delivery
-------------------------------------------
----------------------------------------------------------------- --------------------------------------------------------------
AUTHORIZED SIGNATURE:__________________________
TITLE:____________________________________________
Exhibit "C" Page 87
-----------
PROCEDURES AND DOCUMENTATION FOR WAREHOUSING
▇▇▇▇▇▇ MAE DUS AND OTHER ▇▇▇▇▇▇ ▇▇▇ MORTGAGE LOANS
The following procedures and documentation requirements must be observed
in all respects by the Borrower. All documents must be satisfactory to the Agent
in its sole discretion. Terms used below, which are not otherwise defined, shall
have the meanings given them in the Agreement. The ▇▇▇▇▇▇ Mae form numbers
referred to herein are for convenience only and the Borrower shall use the
equivalent forms required at the time of delivery of the Pledged Loan or Pledged
Security.
I. AT LEAST THREE (3) BUSINESS DAYS PRIOR TO THE ADVANCE DATE:
The Agent and Collateral Custodian must receive a letter signed by the
Borrower providing the following information on the Pledged Loan:
(1) Mortgagor's name;
(2) Project name;
(3) The Borrower's case/loan number;
(4) Expected Advance date;
(5) Mortgage Note Amount;
(6) Name, address, telephone and facsimile of title company or
settlement attorney and contact person.
II. AT LEAST ONE (1) BUSINESS DAY PRIOR TO THE DATE OF AN ADVANCE:
The Collateral Custodian must receive the following:
(1) original or facsimile of the signed Advance Request (Exhibit A);
(2) For ▇▇▇▇▇▇ ▇▇▇ DUS Mortgage Loans, a copy of the ▇▇▇▇▇▇ Mae
Multifamily MBS/DUS Commitment printed from the MCodes System;
(3) For Other ▇▇▇▇▇▇ ▇▇▇ Mortgage Loans, a copy of the ▇▇▇▇▇▇ Mae
Commitment printed from the MCodes System relating to the
applicable Other ▇▇▇▇▇▇ ▇▇▇ Mortgage Loan;
(4) If a Mortgage-backed Security is to be issued, a copy of the
Purchase Commitment for the Pledged Security;
(5) If the Borrower is not the named holder on the Mortgage Note,
(a) a copy of the assignment of Mortgage by the mortgagee to the
Borrower which was sent for recordation on or before the date of
the Advance, and (b) a copy of the assignment of UCC financing
statements by the secured party to the Borrower which was sent
for recordation on or before the date of the Advance;
(6) Original assignment of the Mortgage to the Agent, endorsed by
the Borrower in blank, in recordable form but unrecorded; and
(7) Original assignment of the UCC financing statements endorsed by
the Borrower in blank to the Agent in recordable form but
unrecorded.
Upon receipt of the letter required under Section I above, in form and substance
satisfactory to the Agent and Collateral Custodian, the Collateral Custodian
will issue its escrow instruction letter to the title company or the settlement
attorney. The Advance, when wired by the Agent to
Exhibit "C" Page 88
-----------
the title company or the settlement attorney, shall be held in an escrow account
of the title company or the settlement attorney and disbursed in accordance with
the closing letter of the Borrower or its counsel when authorized by the
Collateral Custodian in its escrow instruction letter. No Advance will be made
by the Lenders prior to the Collateral Custodian's receipt of all Collateral
Documents required under Section II above. Disbursement will be authorized only
after the title company or settlement attorney takes possession, on behalf of
the Collateral Custodian for the benefit of Agent and Lenders, of the signed
Mortgage Note, endorsed by the Borrower in blank and without recourse, and the
title company has issued its title insurance policy. Immediately after
disbursement, the title company or settlement attorney shall be required to
transmit the Mortgage Note and certified true copy of the title insurance policy
directly to the Collateral Custodian. In the event the Pledged Loan is not
closed and the related Mortgage recorded by 3:00 p.m. on the date of the
Advance, the title company or the settlement attorney is instructed to return
the Advance to Agent no later than the 1st Business Day following the date of
the Advance.
The foregoing arrangements, permitting funding of the Advance when the Mortgage
Note has been delivered to a third person on behalf of, and as agent and bailee
for the Agent, and before the Mortgage Note is received by the Collateral
Custodian for the benefit of Agent and the Lenders, are for the convenience of
the Borrower. All risk of loss or non-delivery of the Mortgage Note is that of
the Borrower, and the Collateral Custodian and Agent have no liability or
responsibility therefor.
III. ON NEXT BUSINESS DAY FOLLOWING THE ADVANCE DATE(or the second Business
Day after the date of the Advance if delivery is not practical due to
the time of the settlement):
The Collateral Custodian must receive the following:
(1) The original Mortgage Note, endorsed by the Borrower either on
the face of the Mortgage Note or on an allonge in blank and
without recourse. The Borrower is not the named holder of the
Mortgage Note; the Mortgage Note must bear an endorsement from
the holder to the Borrower;
(2) A copy of the title insurance policy or the title insurance
commitment to issue a policy marked to show the final policy
exceptions, which:
(a) Names as insured the Borrower and/or the Investor, and
their successors and assigns, as their interests may
appear;
(b) Shows effective date and time which is on or after the
date and time of disbursement of the Advance from
escrow; and
(c) Sets forth an insured amount which is equal to or
greater than the Advance amount.
Exhibit "C" Page 89
-----------
IV. AS SOON AS POSSIBLE FOLLOWING THE ADVANCE DATE, AND NO LATER THAN ONE
(1) BUSINESS DAY PRIOR TO THE DATE THE INVESTOR OR THE APPROVED
CUSTODIAN MUST RECEIVE THE PLEDGED LOAN:
The Collateral Custodian must receive the following:
(1) Signed shipping instructions for the delivery of the Pledged
Loan including the following:
(a) Name and address of the Investor or the Approved
Custodian to which the Collateral Documents are to be
shipped, the desired shipping date and the preferred
method of delivery;
(b) Name of project securing the Pledged Loan;
(c) Date the Investor or the Approved Custodian must receive
the Pledged Loan; and
(d) Instructions for endorsement of the Mortgage Note.
(2) For Other ▇▇▇▇▇▇ Mae Mortgage Loans and ▇▇▇▇▇▇ ▇▇▇ DUS Mortgage
Loans, the following additional documents must be received:
(a) For cash payments, the signed original Wire Transfer
Request (▇▇▇▇▇▇ Mae Form 4639) or wiring instructions
printed from the MCodes System, specifying the Cash
Collateral Account as the receiving account for loan
purchase proceeds.
(b) Executed bailee letter with Schedule A (in form approved
by ▇▇▇▇▇▇ ▇▇▇ and the Agent).
(3) The remainder of the documents required for shipping to the
Investor as specified by the Investor or in the applicable
Seller/Servicer Guide.
The Collateral Custodian exclusively shall deliver the Mortgage Note and
other original Collateral Documents evidencing the Pledged Loan and
related pool documents to an Investor or an Approved Custodian, unless
otherwise agreed in writing.
V. IF A MORTGAGE-BACKED SECURITY IS TO BE ISSUED BY ▇▇▇▇▇▇ MAE, AS SOON AS
POSSIBLE FOLLOWING CLOSING, BUT NO LATER THAN ONE (1) BUSINESS DAY PRIOR
TO SETTLEMENT DATE FOR A PLEDGED SECURITY THE COLLATERAL CUSTODIAN MUST
RECEIVE:
(1) A copy of the ▇▇▇▇▇▇ ▇▇▇ Wiring Instructions printed from the
MCodes System, instructing ▇▇▇▇▇▇ Mae to issue the
Mortgage-backed Security in the name of the Borrower, and to
deliver the Pledged Security to the Collateral Custodian's
custody account at Banker's Trust (Account Number _________) for
the benefit of the Agent and the Lenders.
(2) The signed Securities Delivery Instructions form attached hereto
as Schedule I.
Upon instruction by the Borrower, The Collateral Custodian shall complete the
endorsement of the Mortgage Note. If no Mortgage-backed Security is to be
issued, The Collateral Custodian shall deliver the Mortgage Note and the other
documents required for shipping to the Investor as specified by the Investor or
in the applicable Seller/Servicer Guide with a bailee letter to
Exhibit "C" Page 90
-----------
the Investor who issued the Purchase Commitment for the Pledged Loan or to an
Approved Custodian for such Investor. If a Mortgage-backed Security is to be
issued, The Collateral Custodian shall deliver the Mortgage Note, the other
documents required for shipping and the Delivery Schedule with a bailee letter
to ▇▇▇▇▇▇ ▇▇▇ or to an Approved Custodian for ▇▇▇▇▇▇ Mae.
Upon receipt of a Pledged Security, The Collateral Custodian will deliver the
Pledged Security to the Investor which issued the Purchase Commitment for the
Pledged Security. The Pledged Security will be released to the Investor only
upon payment of the purchase proceeds to the Collateral Custodian.
Exhibit "C" Page 91
-----------
SCHEDULE I to EXHIBIT C-▇▇▇▇▇▇ ▇▇▇
----------------------------------
Security Delivery Instructions
------------------------------
INSTRUCTIONS MUST BE RECEIVED ONE (1) BUSINESS DAY IN ADVANCE OF PICKUP/DELIVERY
---------------------------------------------------------------------------- ----------------------------------------------------
BOOK-ENTRY DATE: SETTLEMENT DATE:
--------------------------------------------------- ----------------------------
---------------------------------------------------------------------------- ----------------------------------------------------
ISSUER: SECURITY: $
------------------------------------------------------------ ---------------------------------
---------------------------------------------------------------------------- ----------------------------------------------------
NO. OF CERTIFICATES: 1)
----------------------------------------------- ---------------------
---------------------------------------------------------------------------- ----------------------------------------------------
2)
---------------------
---------------------------------------------------------------------------- ----------------------------------------------------
3)
---------------------
---------------------------------------------------------------------------- ----------------------------------------------------
CUSIP #
-----------------
---------------------------------------------------------------------------- ----------------------------------------------------
Pool # MI# Coupon Rate:
----------------- ---------------------- ---------------------------------
---------------------------------------------------------------------------- ----------------------------------------------------
Issue Date: (M/D/Y) Termination Date: (M/D/Y)
---------------------------- -------------------
---------------------------------------------------------------------------- ----------------------------------------------------
---------------------------------------------------------------------------- ----------------------------------------------------
POOL TYPE (circle one):
---------------------------------------------------------------------------- ----------------------------------------------------
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ Mae I ▇▇▇▇▇▇ ▇▇▇ ▇▇
--------------------------------- ---------------------------------- ------------------------------------------------------------
▇▇▇▇▇▇▇ Mac: FIXED ARM DISCOUNT NOTE
-------------------------- ---------------------- ------------------ ------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇: FIXED ARM DISCOUNT NOTE DEBENTURES
-------------------------- ---------------------- ------------------ --------------------------------- --------------------------
REMIC
-------------------------------------------------------------------- ------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
DELIVER TO: ( ) Versus Payment
-----------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
DVP AMT. $
-------------------------------- ------------------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
( ) Free Delivery
--------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
DELIVER TO: ( ) Versus Payment
-----------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
DVP AMT. $
-------------------------------- ------------------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
( ) Free Delivery
--------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
DELIVER TO: ( ) Versus Payment
-----------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
DVP AMT. $
-------------------------------- ------------------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
( ) Free Delivery
--------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
AUTHORIZED SIGNATURE:
----------------------------------------------------------------------------------------------------
TITLE:
----------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
Exhibit "C" Page 92
-----------
PROCEDURES AND DOCUMENTATION FOR WAREHOUSING
FHA PROJECT LOANS AND FHA CONSTRUCTION MORTGAGE LOANS
-----------------------------------------------------
The following procedures and documentation requirements must be observed
in all respects by the Borrower. All documents must be satisfactory to the
Collateral Custodian in its sole discretion. Terms used below, which are not
otherwise defined, shall have the meanings given them in the Agreement. The HUD
form numbers referred to herein are for convenience only and the Borrower shall
use the equivalent forms required at the time of delivery of a Pledged Mortgage
or a Pledged Security.
I. AT LEAST 3 BUSINESS DAYS PRIOR TO THE ADVANCE DATE:
The Collateral Custodian must receive a letter signed by the Borrower
providing the following information on the Pledged Mortgage:
(1) Mortgagor's name;
(2) Project name;
(3) Borrower's case/loan number;
(4) Expected Advance date;
(5) Mortgage Note Amount;
(6) Name and address of Borrower's counsel to be present at closing;
and
(7) Name, address, telephone and facsimile of title company or
settlement attorney and contact person.
II. AT LEAST 1 BUSINESS DAY PRIOR TO THE ADVANCE DATE:
The Collateral Custodian must receive the following:
(1) Original or facsimile signed Advance Request (Exhibit A);
(2) Copy of FHA Firm Commitment to insure;
(3) If no Mortgage-backed Security is to be issued, a copy of
Purchase Commitment for the Pledged Mortgage;
(4) If a Mortgage-backed Security is to be issued:
(a) Copy of Purchase Commitment for the Mortgage-backed
Security:
(b) Copy of Confirmation Notice for Request Additional
Commitment Authority from ▇▇▇▇▇▇ Mae; and
(c) Copy of Confirmation Notice for Request Pool Numbers.
(5) If Pledged Mortgage is an FHA Construction Mortgage Loan, then,
in addition to (3) and (4) above, a copy of Purchase Commitment
for each construction loan advance and related FHA Project
Mortgage Loan or, if a Mortgage-backed Security is to be issued
backed by the related FHA Project Mortgage Loan, a copy of the
Purchase Commitment for the Mortgage-backed Securities
(construction loan and project loan securities);
(6) For FHA Construction Mortgage Loans, a copy of the Application
for Insurance of Advance of Mortgage Proceeds (HUD Form 92403)
to be submitted to HUD;
(7) Original assignment of the Mortgage, endorsed by the Borrower in
blank, in recordable form but unrecorded;
Exhibit "C" Page 93
-----------
(8) Original assignment of the security agreement, endorsed by the
Borrower in blank, in recordable form but unrecorded;
(9) Original assignment of the UCC financing statements to the
Collateral Custodian, endorsed by the Borrower in blank, in
recordable form but unrecorded; and
Upon receipt of the Borrower's letter required under Section I above,
the Collateral Custodian will issue its closing instructions letter to
the Borrower's counsel and its escrow instructions letter to the title
company or the settlement attorney. The Advance, when wired by the Agent
to the title company or the settlement attorney, shall be held in an
escrow account of the title company or the settlement attorney and
disbursed in accordance with the closing instructions letter of the
Borrower or its counsel when authorized by the Collateral Custodian in
its escrow instructions letter. No Advance will be made by the Agent
prior to Collateral Custodian's receipt of all Collateral Documents
required under Section II above.
At closing, the title company or the settlement attorney shall take
possession on behalf of, and as agent and bailee for the Agent, of (a)
the signed Mortgage Note, endorsed by the Borrower in blank and without
recourse, and (b) a copy of the title insurance policy. After taking
possession of the Mortgage Note and the title insurance policy, the
title company or the settlement attorney is authorized to release the
Mortgage Note and the title insurance policy to Borrower's counsel
pursuant to a trust receipt signed by the Borrower's counsel, in a form
approved by the Collateral Custodian. The trust receipt requires the
Borrower's counsel to (a) acknowledge receipt of the Mortgage Note, (b)
acknowledge the security interest of the Agent in the Mortgage Note, (c)
agree that the Mortgage Note is being delivered to the Borrower's
counsel solely for the purpose of obtaining HUD's endorsement, and (d)
deliver the Mortgage Note, endorsed by HUD, and the title insurance
policy directly to the Collateral Custodian.
The title company or the settlement attorney is authorized to disburse
the Advance from escrow upon advice of the Borrower's counsel, which may
be telephonic, that the Mortgage Note has been endorsed by HUD.
The foregoing arrangements, permitting funding of the Advance when the
Mortgage Note has been delivered to a third person on behalf of, and as
agent and bailee for the Agent, and before the Mortgage Note is received
by the Collateral Custodian, are for the convenience of the Borrower.
All risk of loss or nondelivery of the Mortgage Note is that of the
Borrower, and the Collateral Custodian and the Agent have no liability
or responsibility therefor.
III. ON NEXT BUSINESS DAY FOLLOWING THE ADVANCE DATE(or the second Business
Day after the date of the Advance if delivery is not practical due to
the time of the settlement):
The Collateral Custodian must receive the following:
(1) Original signed Mortgage Note, endorsed by the Borrower either
on the face of the Mortgage Note or on an allonge in blank and
without recourse and endorsed for insurance by HUD;
Exhibit "C" Page 94
-----------
(2) A copy of the title insurance policy, which:
(a) Contains recording information filled in on the
schedules pertaining to the Pledged Mortgage, UCC
financing statements and regulatory agreement;
(b) Names as insured the "Mortgagee and/or the Secretary of
the Department of Housing and Urban Development, and
their successors and assigns, as their interests may
appear";
(c) Shows effective date and time which is on or after the
date and time of disbursement of the Advance from
escrow; and
(d) Sets forth an insured amount which is equal to or
greater than the Advance amount; and (3) For FHA
Construction Mortgage Loans, a copy of the Application
for Insurance of Advance of Mortgage Proceeds (HUD Form
92403) signed by an authorized representative of HUD.
IV. AS SOON AS POSSIBLE FOLLOWING THE ADVANCE DATE, AND NO LATER THAN 1
BUSINESS DAY PRIOR TO DATE THE INVESTOR OR THE APPROVED CUSTODIAN MUST
RECEIVE THE PLEDGED MORTGAGE:
The Collateral Custodian must receive signed shipping instructions for
the delivery of the Pledged Mortgage including the following:
(1) Name and address of the Investor or the Approved Custodian to
which the Collateral Documents are to be shipped, the desired
shipping date and the preferred method of delivery;
(2) Name of project securing the Pledged Mortgage;
(3) Date the Investor or the Approved Custodian must receive the
Pledged Mortgage; and
(4) Instructions for endorsement of the Mortgage Note.
The Collateral Custodian exclusively shall deliver the Mortgage Note and
other original Collateral Documents evidencing the Pledged Mortgage and
related pool documents to an Investor or an Approved Custodian, unless
otherwise agreed in writing.
V. IF ▇▇▇▇▇▇ ▇▇▇ MORTGAGE-BACKED SECURITY IS TO BE ISSUED, AS SOON AS
POSSIBLE FOLLOWING CLOSING, BUT NO LATER THAN 1 BUSINESS DAY PRIOR TO
SETTLEMENT DATE FOR A PLEDGED SECURITY THE COLLATERAL CUSTODIAN MUST
RECEIVE:
(1) Signed shipping instructions for the delivery of the GNMA
Mortgage-backed Security or Mortgage Loan. These instructions
must include the following:
(a) Name and address of Investor or Approved Custodian to
which Loan Documents are to be shipped and preferred
method of delivery;
(b) Funding amount due the Borrower;
(c) Name of project securing the Mortgage Loan; and
(d) For GNMA Mortgage-backed Securities deliveries, signed
Securities Delivery Instructions form attached hereto as
Schedule I; and
(e) Delivery date.
Exhibit "C" Page 95
-----------
(2) For GNMA Mortgage-backed Securities deliveries, a copy of the
signed original Schedule of Subscribers (HUD Form 11705M)
instructing GNMA to issue the Mortgage-backed Securities in the
name of the Borrower and designating Bankers Trust as agent for
the Agent, as the subscriber, and to deliver the Mortgage-backed
Securities to the Collateral Custodian's custody account at
Bankers Trust Account No. 92798 for the benefit of the Agent and
the Lenders, and bearing the following instructions: "These
instructions may not be changed without prior written approval
of the Collateral Custodian."
(3) Completed but unsigned Release of Security Interest (HUD Form
11711A to be signed by Collateral Custodian).
Upon instruction by the Borrower, the Collateral Custodian shall complete the
endorsement of the Mortgage Note. If no ▇▇▇▇▇▇ Mae Mortgage-backed Security is
to be issued, the Collateral Custodian shall deliver the Mortgage Note and title
insurance policy with a bailee letter to the Investor who issued the Purchase
Commitment for the Pledged Mortgage or an Approved Custodian for the Investor.
If a ▇▇▇▇▇▇ ▇▇▇ Mortgage-backed Security is to be issued, the Collateral
Custodian shall deliver the Mortgage Note, the title insurance policy, the
Release of Security Interest, and the Schedule of Subscribers with a bailee
letter to an Approved Custodian for ▇▇▇▇▇▇ Mae.
Upon receipt of a Pledged Security, the Collateral Custodian will deliver the
Pledged Security to the Investor which issued the Purchase Commitment for the
Pledged Security. The Pledged Security will be released to the Investor only
upon payment of the purchase proceeds to the Agent.
VI. FOR SUBSEQUENT FHA CONSTRUCTION MORTGAGE LOAN ADVANCES:
A. AT LEAST ONE I BUSINESS DAY PRIOR TO THE DATE OF THE ADVANCE:
The Collateral Custodian must receive the following:
(1) original or facsimile of the signed Advance Request
(Exhibit A); and
(2) Application for Insurance of Advance of Mortgage
Proceeds (HUD Form 92403) signed by authorized
representative of HUD.
B. ON THE DAY OF THE ADVANCE:
The Collateral Custodian must receive evidence of title insurance
coverage in an amount equal to the amount of the Advance (verbal
assurance from the title company to be followed by a copy of the
title insurance policy endorsement immediately following
closing).
C. AS SOON AS POSSIBLE FOLLOWING THE ADVANCE DATE, AND NO LATER THAN
1 BUSINESS DAY PRIOR TO DATE THE INVESTOR OR THE APPROVED
CUSTODIAN MUST RECEIVE THE PLEDGED SECURITY:
Exhibit "C" Page 96
-----------
(1) For GNMA Mortgage-backed Securities deliveries, the
signed original Schedule of Subscribers (HUD Form
11705M) instructing GNMA to issue the Mortgage-backed
Securities in the name of the Borrower and designating
Bankers Trust as agent for the Collateral Custodian for
the benefit of the Agent, as the subscriber, and to
deliver the Mortgage-backed Securities to the Collateral
Custodian's custody account at Bankers Trust Account No.
92798 for the benefit of the Agent and the Lenders, and
bearing the following instructions: "These instructions
may not be changed without prior written approval of the
Collateral Custodian "; and
(2) The signed Securities Delivery Instructions form
attached hereto as Schedule I.
Exhibit "C" Page 97
-----------
SCHEDULE I to EXHIBIT C/FHA
---------------------------
Security Delivery Instructions
------------------------------
INSTRUCTIONS MUST BE RECEIVED TWO (2) BUSINESS DAYS IN ADVANCE OF PICKUP/DELIVERY
---------------------------------------------------------------------------- ----------------------------------------------------
BOOK-ENTRY DATE: SETTLEMENT DATE:
--------------------------------------------------- ---------------------------
---------------------------------------------------------------------------- ----------------------------------------------------
ISSUER: SECURITY: $
------------------------------------------------------------ --------------------------------
---------------------------------------------------------------------------- ----------------------------------------------------
NO. OF CERTIFICATES: 1)
----------------------------------------------- ----------------------
---------------------------------------------------------------------------- ----------------------------------------------------
2)
----------------------
---------------------------------------------------------------------------- ----------------------------------------------------
3)
----------------------
---------------------------------------------------------------------------- ----------------------------------------------------
CUSIP #
----------------
---------------------------------------------------------------------------- ----------------------------------------------------
Pool # MI# Coupon Rate:
---------------- ------------------------------------------ --------------------------------
---------------------------------------------------------------------------- ----------------------------------------------------
Issue Date: (M/D/Y) Termination Date: (M/D/Y)
------------------------------------------------ ------------------
---------------------------------------------------------------------------- ----------------------------------------------------
---------------------------------------------------------------------------- ----------------------------------------------------
POOL TYPE (circle one):
--------------------------------- ------------------------------ ----------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ Mae I ▇▇▇▇▇▇ ▇▇▇ ▇▇
-------------------------- ---------------------- -------------- ----------------------------------------------------------------
▇▇▇▇▇▇▇ Mac: FIXED ARM DISCOUNT NOTE
-------------------------- ---------------------- -------------- --------------------------- --------------------- --------------
▇▇▇▇▇▇ ▇▇▇: FIXED ARM DISCOUNT NOTE DEBENTURES REMIC
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
DELIVER TO: ( ) Versus Payment
-----------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
DVP AMT. $
-------------------------------- ------------------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
( ) Free Delivery
--------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
DELIVER TO: ( ) Versus Payment
-----------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
DVP AMT. $
-------------------------------- ------------------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
( ) Free Delivery
--------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
DELIVER TO: ( ) Versus Payment
-----------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
DVP AMT. $
-------------------------------- ------------------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
( ) Free Delivery
--------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------------- ------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
AUTHORIZED SIGNATURE:
---------------------------------------------------------------------------------------------------
TITLE:
-------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
Exhibit "C" Page 98
-----------
EXHIBIT "D"
-----------
Borrower Name Borrower Address
-----------------------------------
-----------------------------------
--------------------------------------------------------------------------------
CITICORP USA, INC. Shipping Instruction
Please ship the following notes to: Investor name
Street address
City, State, Zip
Attn:
Endorse the note as follows: Endorsement Instruction
------------------------ ------------------------------- -----------------------
Loan Number Borrower Name Loan Amount
------------------------ ------------------------------- -----------------------
------------------------ ------------------------------- -----------------------
------------------------ ------------------------------- -----------------------
------------------------ ------------------------------- -----------------------
------------------------ ------------------------------- -----------------------
------------------------ ------------------------------- -----------------------
------------------------ ------------------------------- -----------------------
--------------------------------------------------------------------------------
Overnight Delivery Provider:
---------------------------------------------------
Overnight Account #: Customer Zip (UPS):
----------------- ----------------
For any questions, please contact: Name:
------------------------------
Phone: Fax Number:
---------------------- ------------------------
Signature: Date:
------------------------- ------------------------------
--------------------------------------------------------------------------------
SPECIAL INSTRUCTIONS:
Exhibit "D" Page 99
-----------
EXHIBIT "E"
-----------
TRUST RECEIPT
Date:
----------------------
Attn: Loan Administrator Fax:
Citicorp USA, Inc. Mortgage Banker Finance
The Borrower hereby requests that Citicorp USA, Inc. return to the Borrower the
original mortgage note(s) for the mortgage loan(s) listed below, for the
reason(s) set forth below:
Mortgagor Name Mortgage Note
(or Loan Number) Amount Reason(s)
---------------- ------ ------
The Borrower hereby acknowledges that (a) Citicorp USA, Inc. continues to have a
security interest, pursuant to the Uniform Commercial Code, in the Collateral;
(b) the Borrower will hold these mortgage notes in trust for Citicorp USA, Inc.
as provided under and in accordance with all provisions of the credit agreement;
and (c) the Borrower will return the corrected mortgage notes to Citicorp USA,
Inc. no later than the close of business on the tenth business day following the
date of this letter. All capitalized terms appearing herein have the same
meanings ascribed to them in the Warehousing Credit and Security Agreement as
amended from time to time.
CENTERLINE MORTGAGE CAPITAL INC. AND
BORROWER CENTERLINE MORTGAGE PARTNERS INC.
By: (signature)
-----------------------------------------------
Name: (printed)
-----------------------------------------------
***For optional Citicorp USA, Inc. use only***
-------------------------------------------------- ---------- ----------------------------------------------- ----------
Date Loan Administrator receives
Date Citicorp USA, Inc. Delivers Mortgage corrected/completed Mortgage Note from
Note to Borrower for correction/completion Initials Borrower Initials
-------------------------------------------------- ---------- ----------------------------------------------- ----------
-------------------------------------------------- ---------- ----------------------------------------------- ----------
Exhibit "E" Page 100
-----------
EXHIBIT "F"
-----------
COMPLIANCE CERTIFICATE
----------------------------------------------- ------------------------------------------------------
BORROWER: CENTERLINE MORTGAGE CAPITAL INC. AND
CENTERLINE MORTGAGE PARTNERS INC.
----------------------------------------------- ------------------------------------------------------
AGENT: CITICORP USA, INC.,
----------------------------------------------- ------------------------------------------------------
TODAY'S DATE: ___________________, 20___
----------------------------------------------- ------------------------------------------------------
REPORTING PERIOD
ENDED: _____________________ ended _____________, 20__
----------------------------------------------- ------------------------------------------------------
This certificate is delivered to Lender under the Warehousing Credit and
Security Agreement dated effective as of May 31, 2007 between the Borrower and
the Agent and the other lenders parties thereto (the "Agreement"), all the
defined terms of which have the same meanings when used herein.
I hereby certify that: (a) I am, and at all times mentioned herein have been,
the duly elected, qualified, and acting officer of Borrower designated below;
(b) to the best of my knowledge, the Financial Statements of Borrower from the
period shown about (the "Reporting Period") and which accompany this certificate
were prepared in accordance with GAAP and present fairly the financial condition
of Borrower as of the end of the Reporting Period and the results of its
operations for Reporting Period; (c) a review of the Agreement and of the
activities of the Borrower during the Reporting Period has been made under my
supervision with a view to determining Borrower's compliance with the covenants,
requirements, terms, and conditions of the Agreement, and such review has not
disclosed the existence during or at the end of the Reporting Period (and I have
no knowledge of the existence as of the date hereof) of any Default or Event of
Default, except as disclosed herein (which specifies the nature a d period of
existence of each Default or Event of Default, if any, and what action Borrower
has taken, is taking, and proposes to take with respect to each); (d) the
calculations described herein evidence that the Borrower is in compliance with
the requirements of the Agreement at the end of the Reporting Period (or if
Borrower is not in compliance, showing the extent of non-compliance and
specifying the period of non-compliance and what actions the Borrower proposes
to take with respect thereto); (e) the Borrower was, as of the end of the
Reporting Period, in compliance and good standing with applicable ▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac, and HUD net worth requirements.
--------------------------------------------------------------------------------
CENTERLINE MORTGAGE CAPITAL INC. AND CENTERLINE MORTGAGE PARTNERS INC.
--------------------------------------------------------------------------------
By:
---------------- ---------------------------------------------------------------
Name:
---------------- ---------------------------------------------------------------
Title:
---------------- ---------------------------------------------------------------
Exhibit "F" Page 101
-----------
EXHIBIT "G"
-----------
BAILEE LETTER
TO BE ATTACHED
Exhibit "G" Page 102
-----------
EXHIBIT "H"
-----------
OPINION LETTER
TO BE ATTACHED
Exhibit "H" Page 103
-----------
EXHIBIT "I"
-----------
PROMISSORY NOTE
$__________.00 ______________
FOR VALUE RECEIVED, the undersigned, CENTERLINE MORTGAGE CAPITAL INC., a
Delaware corporation AND CENTERLINE MORTGAGE PARTNERS INC., a Delaware
corporation (herein called the "Borrower"), hereby promises to pay to the order
of ___________________________ (the "Lender" or, together with its successors
and assigns, the "Holder") whose principal place of business is
________________________________________________________, or at such other place
as the Holder may designate from time to time, the principal sum of
____________________ __________________ ($__________.00) or so much thereof as
may be outstanding from time to time pursuant to the Warehousing Credit and
Security Agreement (the "Agreement') dated May 31, 2007 among the Borrower and
Citicorp USA, Inc., in its capacity as one of the lenders and as Agent for the
other lenders party thereto and the lenders party thereto (including the
Lender), as the same may be amended, supplemented, or restated from time to
time, and to pay interest on said principal sum or such part thereof as shall
remain unpaid from time to time, from the date of each Advance until repaid in
full, and all other fees and charges due under the Agreement, at the rate and at
the times set forth in the Agreement. All payments hereunder shall be made in
lawful money of the United States and in immediately available funds.
Capitalized terms used herein, unless otherwise defined herein, shall have the
meanings given them in the Agreement.
This Note is issued and delivered under the Agreement and is a Note as
defined therein and is entitled to the benefits thereof. Reference is hereby
made to the Agreement (which is incorporated herein by reference as fully and
with the same effect as if set forth herein at length) for a description of the
Collateral, a statement of the covenants and agreements, a statement of the
rights and remedies and securities afforded thereby and other matters contained
therein.
[This Note is given in renewal and extension, but not extinguishment, of
that certain promissory note ("Prior Note") dated ______________ in the original
principal amount of _____ __________________________ ($_____________) executed
by the Borrower payable to the order of Lender. All liens, security interests,
and assignments securing the Prior Note are hereby ratified, confirmed, renewed,
extended, and carried forward as security for the repayment of this Note, in
addition to and cumulative of all other security.]
The entire unpaid principal balance of this Note plus all accrued and
unpaid interest shall be due and payable in full on the Maturity Date.
This Note may be prepaid in whole or in part at any time without premium
or penalty.
Should this Note be placed in the hands of attorneys for collection, the
Borrower agrees to pay, in addition to principal and interest, fees and charges
due under the Agreement, and all costs of collecting this Note, including
reasonable attorneys' fees and expenses.
Exhibit "I" Page 104
-----------
This Note shall be construed and enforced in accordance with the laws of
the State of New York, without reference to its principles of conflicts of law,
and applicable federal laws of the United States of America.
This Note is secured by all security agreements, collateral assignments,
deeds of trust and lien instruments executed by the Borrower in favor of the
Agent for the benefit of the Lenders, or executed by any other Person as
security for this Note, including any executed prior to, simultaneously with, or
after the date of this Note.
The Borrower and any and each co-maker, guarantor, accommodation party,
endorser or other Person liable for the payment or collection of this Note
expressly waive, except as expressly provided for in the Agreement, notice,
presentment, demand for payment, protest, notice of protest and non-payment or
dishonor, notice of acceleration, notice of intent to accelerate, notice of
intent to demand, bringing of suit, and diligence in taking any action to
collect amounts called for hereunder and in the handling of Collateral at any
time existing as security in connection herewith, and shall be directly and
primarily liable for the payment of all sums owing and to be owing hereon,
regardless of and without any notice, diligence, act or omission as or with
respect to the collection of any amount called for hereunder or in connection
with any Lien at any time had or existing as security for any amount called for
hereunder.
It is the intention of the parties hereto to conform strictly to usury
laws applicable to the Lender. Accordingly, if the transactions contemplated
hereby would be usurious under applicable law (including the laws of the United
States of America and the State of New York), then, in that event,
notwithstanding anything to the contrary herein or in the Agreement or in any
other Loan Document or agreement entered into in connection with or as security
for this Note, it is agreed as follows: (i) the aggregate of all consideration
which constitutes interest under law applicable to the Lender that is contracted
for, taken, reserved, charged, or received herein or under the Agreement or
under any of the other aforesaid Loan Documents or agreements or otherwise in
connection herewith shall under no circumstances exceed the maximum amount
allowed by such applicable law, and any excess shall be credited by the Lender
on the principal amount of the Obligations (or, if the principal amount of the
Obligations shall have been paid in full, refunded by the Lender to the
Borrower, as required); and (ii) in the event that the maturity of this Note is
accelerated by reason of an election of the Lender resulting from any Event of
Default under the Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to the Lender may never include more than the maximum amount
allowed by such applicable law, and excess interest, if any, provided for in the
Agreement or otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited by the
Lender on the principal amount of the Obligations (or, if the principal amount
of the Obligations shall have been paid in full, refunded by the Lender to the
Borrower, as required). Without limiting the foregoing, all calculations of the
rate of interest taken, reserved, contracted for, charged, received or provided
for under this Note or any of the Loan Documents which are made for the purpose
of determining whether the interest rate exceeds the Maximum Rate shall be made,
to the extent allowed by law, by amortizing, prorating, allocating and spreading
in equal parts during the period of the full stated term of the loan evidenced
hereby, all interest at any time taken, reserved, contracted for, charged,
received, or provided for under this Note of any of the Loan Documents.
Exhibit "I" Page 105
-----------
BORROWER:
--------
CENTERLINE MORTGAGE CAPITAL INC., a
Delaware corporation
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
CENTERLINE MORTGAGE PARTNERS INC., a
Delaware corporation
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Exhibit "I" Page 106
-----------
EXHIBIT "J"
-----------
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Warehousing Credit and Security Agreement dated
as of May 31, 2007 (as the same may be further amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), by and among
CENTERLINE MORTGAGE CAPITAL INC. AND CENTERLINE MORTGAGE PARTNERS INC., a
Delaware corporation ("Borrower"), CITICORP USA, INC., and the other entities
from time to time parties thereto as lenders (collectively, the "Lenders"), and
CITICORP USA, INC., as agent for the Lenders (in such capacity, the "Agent").
Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.
__________ (the "Assignor") and __________ (the "Assignee") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Assignment Effective Date (as defined below), an interest (the "Assigned
Interest"), as specified on SCHEDULE 1, in and to the Assignor's rights and
obligations under the Credit Agreement with respect to the credit facilities
contained in the Credit Agreement as are set forth on SCHEDULE 1 (individually,
an "Assigned Facility"; collectively, the "Assigned Facilities"), in a principal
amount for each Assigned Facility as set forth on SCHEDULE 1.
2. The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; and (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of Borrower, any of its Affiliates, any Guarantor or any
other obligor or the performance or observance by Borrower, any of its
Affiliates, any Guarantor or any other obligor of any of their respective
obligations under the Credit Agreement or any of the other Loan Documents or any
other instrument or document furnished pursuant hereto or thereto.
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of such of the
financial statements delivered pursuant to Section 6.2 thereof as it has
requested and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (c) agrees that it will, independently and without reliance upon the
Assignor, the Agent, or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; (d) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers and discretion under the Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Agent by the terms
thereof, together with such powers as are incidental thereto; and (e) agrees
that it will be bound by the provisions of the Credit Agreement and will perform
in accordance with its terms all the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender.
Exhibit "J" Page 107
-----------
4. The effective date of this Assignment and Acceptance shall be
__________ _____, ________ (the "Assignment Effective Date"). Following the
execution of this Assignment and Acceptance, it will be delivered to the Agent
for acceptance by it and recording by the Agent pursuant to the Credit
Agreement, effective as of the Assignment Effective Date (which shall not,
unless otherwise agreed to by the Agent, be earlier than five Domestic Business
Days after the date of such acceptance and recording by the Agent).
5. Upon such acceptance and recording, from and after the Assignment
Effective Date, the Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignee whether such amounts have accrued prior to the Assignment Effective
Date or accrue subsequent to the Assignment Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments by the Agent for
periods prior to the Assignment Effective Date or with respect to the making of
this assignment directly between themselves.
6. From and after the Assignment Effective Date, (a) the Assignee shall
be a party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the other Loan Documents and shall be bound by the
provisions thereof and (b) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
7. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to
provisions or principles thereof relating to conflict of laws or choice of law.
8. This Assignment and Acceptance may be executed by one or more of the
parties to this Assignment and Acceptance on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on SCHEDULE 1 hereto.
Exhibit "J" Page 108
-----------
SCHEDULE I
----------
TO ASSIGNMENT AND ACCEPTANCE
RELATING TO THE CREDIT AGREEMENT,
DATED AS OF MAY 31, 2007
AMONG
CENTERLINE MORTGAGE CAPITAL INC. AND CENTERLINE MORTGAGE PARTNERS INC., AS
BORROWER
THE LENDERS PARTY THERETO (THE "LENDERS")
AND
CITICORP USA, INC.,
AS AGENT FOR THE LENDERS
(IN SUCH CAPACITY, THE "AGENT")
--------------------------------------------------------------------------------
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
Credit Principal Commitment Percentage
Facility Assigned Amount Assigned Assigned(1)
----------------- --------------- -----------
$ __________ ___.___________%
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By By
------------------------------ ----------------------------
Name: Name:
Title: Title:
--------
(1) Calculate the Commitment Percentage that is assigned to at least 15 decimal
places and show as a percentage of the Aggregate Commitment of all Lenders.
Exhibit "J" Page 109
-----------
Accepted for Recordation in the Register: Consented To:
Citicorp USA, Inc., as the Agent Centerline Mortgage Capital Inc.,
as Borrower
By _________________________________
Name:
Title: By __________________________________
Name:
Title:
Centerline Mortgage Partners Inc.,
as Borrower
By __________________________________
Name:
Title:
Citicorp USA, Inc., as the Agent
By __________________________________
Name:
Title:
Exhibit "J" Page 110
-----------
Schedule 1 - Lenders and Commitments
------------------------------------
-------------------- ------------------------- ---------------------------------
Lender Commitment Amount Commitment Percentage
-------------------- ------------------------- ---------------------------------
Citicorp USA., Inc. $300,000,000 100%
-------------------- ------------------------- ---------------------------------
-------------------- ------------------------- ---------------------------------
Schedule 1 -Lenders and Commitments Page 111
-----------------------------------
Schedule 5.1 - Subsidiaries
---------------------------
Neither CMP nor CMC has subsidiaries.
Schedule 5.1 - Subsidiaries Page 112
---------------------------
Schedule 5.4 - Litigation
None.
Schedule 5.4 - Litigation Page 113
-------------------------
Schedule 5.14 - Assumed Names
None.
Schedule 5.14 - Assumed Names Page 114
-----------------------------
Schedule 5.17 - Authorized Representatives
------------------------------------------
Below is a list of the Authorized Representatives of CMC and CMP
Name Office
---- ------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Chairman
▇▇▇▇▇ ▇▇▇▇▇▇ Chief Executive Officer, Executive Managing Director
▇▇▇▇▇ ▇▇▇▇ Managing Director
▇▇▇▇▇▇ ▇▇▇▇ Managing Director
J. ▇▇▇▇▇ ▇▇▇▇▇▇▇ Executive Managing Director
▇▇▇▇ ▇▇▇▇▇ Senior Managing Director
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ President, Senior Managing Director
▇▇▇▇▇▇ ▇▇▇▇▇ Chief Investment Officer
▇▇▇▇▇▇▇ ▇▇▇▇▇ Managing Director
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Secretary and Senior Vice President
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Senior Vice President
▇▇▇▇▇▇ ▇▇▇▇▇▇ Director
▇▇▇▇▇ ▇▇▇▇▇▇ Senior Vice President
▇▇▇▇▇ ▇▇▇▇▇▇ Managing Director
Schedule 5.17 - Authorized Representatives Page 115
------------------------------------------
Schedule 5.21 - Certain Transactions
------------------------------------
1. Services Agreement dated May 6, 2005 between CMC and CMP.
2. CMC and CMP originate loans for American Mortgage Acceptance Company and
other partnerships and other entities organized or managed by Centerline
Capital Group, Inc. and its affiliates or in which partnerships or other
entities organized or managed by Centerline Capital Group, Inc. or its
affiliates are directly or indirectly partners or members.
3. CMC and CMP reimburse Centerline Capital Group, Inc. and its affiliates for
expenses incurred on their behalf.
4. Subservicing Agreement dated January 1, 2007 between CMC and Centerline
Servicing, Inc. (formerly known as ARCap Servicing, Inc.)
Schedule 5.21 - Certain Transactions Page 116
------------------------------------
Schedule 5.24 - Servicing Portfolio
-----------------------------------
Schedule 5.24 - Servicing Portfolio Page 117
-----------------------------------
Schedule 5.26 -
Ownership, Subsidiaries and Taxpayer Identification Numbers
-----------------------------------------------------------
i. Below is a list of stockholders of CMC as of December 11, 2006 and a
description each entity's ownership interests:
Entity Class Of Shares No. of Shares
---------------------------- ----------------------- ----------------
Centerline Capital Group Inc. Class A Common Stock 97,972
Centerline Capital Group Inc. Common Stock 5,575
Below is a list of stockholders of CMP as of December 11, 2006 and a
description each entity's ownership interests:
Entity Class Of Shares No. of Shares
---------------------------- ----------------------- ----------------
Centerline Capital Group Inc. Common Stock 100
Neither CMP nor CMC has subsidiaries.
ii. Tax Payer Identification Information
Entity Taxpayer Identification No. State Organizational No.
------------- ---------------------------- -------------------------
CMC ▇▇-▇▇▇▇▇▇▇ 2254436 (DE)
CMP ▇▇-▇▇▇▇▇▇▇ 3956483 (DE)
--------------------------------------------------------------------------------
Schedule 5.26 - Ownership, Subsidiaries and Taxpayer Identification Numbers
---------------------------------------------------------------------------
Page 118
Schedule 6.8 - Insurance
------------------------
Company Type Policy
------- ---- ------
Lloyd's of London Mortgage Bankers Bond SUA 2865
Lloyd's of London Mortgage Bankers Bond -Excess PCEN000907
Valley Forge Insurance Co. Worker's Compensation 2074575571
Valley Forge Insurance Co. Worker's Compensation 2075110836
Valley Forge Insurance Co. Property/General Liability/Umbrella ▇▇▇▇▇▇▇▇▇▇
Valley Forge Insurance Co. Auto 2075110822
National Union Fire Insurance Company of Directors & Officers / General Partnership ▇▇▇-▇▇-▇▇
Pittsburgh, Pa. Liability
XL Specialty Insurance Company Excess Directors & Officers/General Partnership ELU094807-06
Liability
US Specialty Insurance Company Excess Directors & Officers/General Partnership U706-60196
Liability
Vigilant Insurance Company Employment Practices Liability 6803-6151
Schedule 6.8 - Insurance
------------------------
Page 119
Schedule 6.10 - Indebtedness of Borrower and its Subsidiaries
-------------------------------------------------------------
1. Reimbursement Agreement dated August 23, 2005 among Centerline Mortgage
Partners Inc. (formerly CharterMac Mortgage Partners Corp.), Bank of
America, N.A. and the other participants thereto.
2. Multi-family ASAP Plus Agreements dated June 10, 2005 and December 12,
2006 between Centerline Mortgage Capital Inc. and ▇▇▇▇▇▇ ▇▇▇.
3. See also schedule 7.16.
Schedule 6.10 - Indebtedness of Borrower
----------------------------------------
Page 120
Schedule 7.16 - Other Indebtedness
----------------------------------
Below is a list of Equipment leases:
---------------------------- ---------------------------- -------------------------------------- --------------------------------
Leasing Company Lease Number Equipment Type Location
---------------------------- ---------------------------- -------------------------------------- --------------------------------
De ▇▇▇▇ ▇▇▇▇▇▇ 24605892 Copier Atlanta, GA-In Storage
---------------------------- ---------------------------- -------------------------------------- --------------------------------
---------------------------- ---------------------------- -------------------------------------- --------------------------------
CitiCapital 20012430 Copier Vienna, VA
---------------------------- ---------------------------- -------------------------------------- --------------------------------
CIT ▇▇▇-▇▇▇▇▇▇▇-▇▇▇ Copier Vienna, VA
---------------------------- ---------------------------- -------------------------------------- --------------------------------
CIT ▇▇▇-▇▇▇▇▇▇▇-▇▇▇ Copier Irving, TX
---------------------------- ---------------------------- -------------------------------------- --------------------------------
Pitney ▇▇▇▇▇ 2507714 Postage Meter Irving, TX
---------------------------- ---------------------------- -------------------------------------- --------------------------------
---------------------------- ---------------------------- -------------------------------------- --------------------------------
IKON 344540-948145 Fax Irving, TX
---------------------------- ---------------------------- -------------------------------------- --------------------------------
IKON 1259215-1704702 Copier Irvine, CA
---------------------------- ---------------------------- -------------------------------------- --------------------------------
PBCC 5655908 Postage Meter Irvine, CA
---------------------------- ---------------------------- -------------------------------------- --------------------------------
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇
---------------------------- ---------------------------- -------------------------------------- --------------------------------
NeoPost 8497561 Postage Meter Jersey City, NJ
---------------------------- ---------------------------- -------------------------------------- --------------------------------
De ▇▇▇▇ ▇▇▇▇▇▇ 24488474 Copier/Scanner/Printer Jersey City, NJ
---------------------------- ---------------------------- -------------------------------------- --------------------------------
De ▇▇▇▇ ▇▇▇▇▇▇ 24497177 Copier/Scanner/Printer Jersey City, NJ
---------------------------- ---------------------------- -------------------------------------- --------------------------------
Pitney ▇▇▇▇▇ 258160 Postage Meter Jersey City, NJ
---------------------------- ---------------------------- -------------------------------------- --------------------------------
De ▇▇▇▇ ▇▇▇▇▇▇ 24580495 Copier/Scanner/Printer Jersey City, NJ
---------------------------- ---------------------------- -------------------------------------- --------------------------------
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇
---------------------------- ---------------------------- -------------------------------------- --------------------------------
De ▇▇▇▇ ▇▇▇▇▇▇ 24628257 Copier/Scanner/Printer Jersey City, NJ
---------------------------- ---------------------------- -------------------------------------- --------------------------------
De ▇▇▇▇ ▇▇▇▇▇▇ 24672816 Copier/Scanner/Printer Jersey City, NJ
---------------------------- ---------------------------- -------------------------------------- --------------------------------
De ▇▇▇▇ ▇▇▇▇▇▇ 24628257 Copier/Scanner/Printer Jersey City, NJ
---------------------------- ---------------------------- -------------------------------------- --------------------------------
Pitney ▇▇▇▇▇ 8170715 Overnite Pkgs. Scanner Jersey City, NJ
---------------------------- ---------------------------- -------------------------------------- --------------------------------
CIT ▇▇▇-▇▇▇-▇▇▇▇▇ Copier Metairie, LA--In Storage
---------------------------- ---------------------------- -------------------------------------- --------------------------------
IKON 1259215-1721480 Copier San Francisco, CA
---------------------------- ---------------------------- -------------------------------------- --------------------------------
Pitney ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
---------------------------- ---------------------------- -------------------------------------- --------------------------------
CIT ▇▇▇-▇▇▇▇▇▇▇-▇▇▇ Copier San Rafael, CA
---------------------------- ---------------------------- -------------------------------------- --------------------------------
Pitney ▇▇▇▇▇ 5218319 Postage Meter San Rafael, CA
---------------------------- ---------------------------- -------------------------------------- --------------------------------
Avaya 102124323 Phone System San Rafael, CA
---------------------------- ---------------------------- -------------------------------------- --------------------------------
Schedule 7.16 - Other Indebtedness
----------------------------------
Page 121
Schedule 7.17 - Other Liens
---------------------------
There are outstanding liens in connection with or as noted below:
---------------------------- ---------------------------- -------------------------------------- --------------------------------
Leasing Company Lease Number Equipment Type Location
---------------------------- ---------------------------- -------------------------------------- --------------------------------
De ▇▇▇▇ ▇▇▇▇▇▇ 24605892 Copier Atlanta, GA-In Storage
---------------------------- ---------------------------- -------------------------------------- --------------------------------
---------------------------- ---------------------------- -------------------------------------- --------------------------------
CitiCapital 20012430 Copier Vienna, VA
---------------------------- ---------------------------- -------------------------------------- --------------------------------
CIT ▇▇▇-▇▇▇▇▇▇▇-▇▇▇ Copier Vienna, VA
---------------------------- ---------------------------- -------------------------------------- --------------------------------
CIT ▇▇▇-▇▇▇▇▇▇▇-▇▇▇ Copier Irving, TX
---------------------------- ---------------------------- -------------------------------------- --------------------------------
Pitney ▇▇▇▇▇ 2507714 Postage Meter Irving, TX
---------------------------- ---------------------------- -------------------------------------- --------------------------------
---------------------------- ---------------------------- -------------------------------------- --------------------------------
IKON 344540-948145 Fax Irving, TX
---------------------------- ---------------------------- -------------------------------------- --------------------------------
IKON 1259215-1704702 Copier Irvine, CA
---------------------------- ---------------------------- -------------------------------------- --------------------------------
PBCC 5655908 Postage Meter Irvine, CA
---------------------------- ---------------------------- -------------------------------------- --------------------------------
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇
---------------------------- ---------------------------- -------------------------------------- --------------------------------
NeoPost 8497561 Postage Meter Jersey City, NJ
---------------------------- ---------------------------- -------------------------------------- --------------------------------
De ▇▇▇▇ ▇▇▇▇▇▇ 24488474 Copier/Scanner/Printer Jersey City, NJ
---------------------------- ---------------------------- -------------------------------------- --------------------------------
De ▇▇▇▇ ▇▇▇▇▇▇ 24497177 Copier/Scanner/Printer Jersey City, NJ
---------------------------- ---------------------------- -------------------------------------- --------------------------------
Pitney ▇▇▇▇▇ 258160 Postage Meter Jersey City, NJ
---------------------------- ---------------------------- -------------------------------------- --------------------------------
De ▇▇▇▇ ▇▇▇▇▇▇ 24580495 Copier/Scanner/Printer Jersey City, NJ
---------------------------- ---------------------------- -------------------------------------- --------------------------------
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇
---------------------------- ---------------------------- -------------------------------------- --------------------------------
De ▇▇▇▇ ▇▇▇▇▇▇ 24628257 Copier/Scanner/Printer Jersey City, NJ
---------------------------- ---------------------------- -------------------------------------- --------------------------------
De ▇▇▇▇ ▇▇▇▇▇▇ 24672816 Copier/Scanner/Printer Jersey City, NJ
---------------------------- ---------------------------- -------------------------------------- --------------------------------
De ▇▇▇▇ ▇▇▇▇▇▇ 24628257 Copier/Scanner/Printer Jersey City, NJ
---------------------------- ---------------------------- -------------------------------------- --------------------------------
Pitney ▇▇▇▇▇ 8170715 Overnite Pkgs. Scanner Jersey City, NJ
---------------------------- ---------------------------- -------------------------------------- --------------------------------
CIT ▇▇▇-▇▇▇-▇▇▇▇▇ Copier Metairie, LA--In Storage
---------------------------- ---------------------------- -------------------------------------- --------------------------------
IKON 1259215-1721480 Copier San Francisco, CA
---------------------------- ---------------------------- -------------------------------------- --------------------------------
Pitney ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
---------------------------- ---------------------------- -------------------------------------- --------------------------------
CIT ▇▇▇-▇▇▇▇▇▇▇-▇▇▇ Copier San Rafael, CA
---------------------------- ---------------------------- -------------------------------------- --------------------------------
Pitney ▇▇▇▇▇ 5218319 Postage Meter San Rafael, CA
---------------------------- ---------------------------- -------------------------------------- --------------------------------
Avaya 102124323 Phone System San Rafael, CA
---------------------------- ---------------------------- -------------------------------------- --------------------------------
Schedule 7.17 - Other Liens
---------------------------
Page 122