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EXHIBIT 10.68
FIRST AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of September 25, 1996
Between
FIRST FINANCIAL CARIBBEAN CORPORATION,
DORAL MORTGAGE CORPORATION,
THE LENDERS PARTY HERETO
And
BANKERS TRUST COMPANY,
as Agent
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TABLE OF CONTENTS
PAGE
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ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Terms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 2 AMOUNTS AND TERMS OF LOANS AND ACCEPTANCES . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.1 Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.2 Method of Borrowing and of Conversions/Continuations;
Creation of Acceptances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.3 Conversions/Continuations of Loans; Exchange of Acceptances . . . . . . . . . . . . . . . . 30
Section 2.4 Disbursement of Funds; Bank Acceptance Participants . . . . . . . . . . . . . . . . . . . . 31
Section 2.5 Notes; Acceptance Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.6 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 2.7 Termination or Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 2.8 Mandatory Repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 2.9 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 2.10 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 2.11 Payments, Etc, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 2.12 Eurodollar Rate Not Determinable; Illegality or Impropriety . . . . . . . . . . . . . . . . 43
Section 2.13 Reserve Requirements; Change in Circumstances . . . . . . . . . . . . . . . . . . . . . . . 44
Section 2.14 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 2.15 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 2.16 Sharing of Setoffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE 3 CONDITIONS TO CREDIT EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 3.1 Conditions to Credit Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE 4 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 4.1 Corporate Existence; Compliance with Law and
Contractual Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 4.2 Corporate Power; Authorization; Enforceable Obligations. . . . . . . . . . . . . . . . . . 52
Section 4.3 No Legal or Contractual Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 4.4 Financial Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 4.5 No Material Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 4.6 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 4.7 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 4.8 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 4.9 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 4.10 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 4.11 Security Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 4.12 Agency Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 4.13 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
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ARTICLE 5 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 5.1 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 5.2 Negative Covenants of Each Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 5.3 Additional Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE 6 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE 7 THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 7.1 Appointment of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 7.2 Nature of Duties of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 7.3 Lack of Reliance on Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 7.4 Certain Rights of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 7.5 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 7.6 Indemnification of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 7.7 Agent in its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 7.8 Holders of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 7.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
ARTICLE 8 MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 8.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 8.2 Amendments, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 8.3 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 8.4 Payment of Expenses, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 8.5 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 8.6 Benefit of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 8.7 GOVERNING LAW; SUBMISSION TO JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 8.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 8.9 Headings Descriptive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 8.10 Survival of Representations and Indemnities . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 8.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.12 Indemnification of Collateral Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.13 Joint and Several Nature of the Obligations . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.14 Certain Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.15 Subrogation, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 8.16 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 8.17 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 8.18 Effectiveness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 8.19 Ratification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 8.20 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
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EXHIBITS
Exhibit A-1 Form of Facility 1 Note
Exhibit A-2 Form of Facility 2 Note
Exhibit B-1 Request for Acceptance
Exhibit B-2 Form of Draft
Exhibit C First Amended and Restated Security Agreement (Warehousing Collateral)
Exhibit D First Amended and Restated Security Agreement (Servicing Collateral)
Exhibit E First Amended and Restated Cash Collateral Agreement
Exhibit F-1 Form of Opinion of New York Counsel
Exhibit F-2 Form of Opinion of Puerto Rico Counsel
Exhibit G-1 Officer's Certificate (FFCC)
Exhibit G-2 Officer's Certificate (DMC)
Exhibit H-1 Facility 1 Borrowing Base Certificate
Exhibit H-2 Facility 2 Tranche A Borrowing Base Certificate
Exhibit ▇-▇ ▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇ Borrowing Base Certificate
Exhibit I Notice of Borrowing
Exhibit J Notice of Conversion/Continuation
Exhibit K Form of Power of Attorney
Exhibit L Approved Investors
Exhibit M Addresses for Notices
Exhibit N Eligible REO Criteria
Exhibit O Material Litigation
Exhibit P [Reserved]
Exhibit Q Confidentiality Agreement Form
Exhibit R Permitted Subordinated Indebtedness
Exhibit S-1 REO Demand Note
Exhibit S-2 REO Pledge
Exhibit S-3 REO Mortgage
Exhibit T Pledged Servicing Portfolio Report
Exhibit U Form of Statement of Accounts Receivable
Exhibit V Authorized Officers
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FIRST AMENDED AND RESTATED
CREDIT AGREEMENT
THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT is made and
dated as of September 25, 1996, by and between the Lenders party hereto from
time to time, BANKERS TRUST COMPANY, a New York banking corporation, as agent
for the Lenders, and FIRST FINANCIAL CARIBBEAN CORPORATION, a corporation
organized under the laws of the Commonwealth of Puerto Rico ("FFCC"), and
DORAL MORTGAGE CORPORATION, a corporation organized under the laws of the
Commonwealth of Puerto Rico, and a wholly-owned subsidiary of FFCC ("DMC", and
together with FFCC, each a "Borrower" and collectively, the "Borrowers") with
reference to the Credit Agreement, dated as of June 30, 1995, between the
Lenders, the Agent and the Borrowers (as amended by the First Amendment to
Credit Agreement dated as of December 29, 1995, the Second Amendment to Credit
Agreement dated as of May 1, 1996, and the Third Amendment to Credit Agreement
dated as of June 28, 1996 (as amended to the date hereof, the "Original Credit
Agreement")). Capitalized terms not otherwise defined herein are defined in
Article I.
The Lenders, the Agent and the Borrowers wish to amend and
restate the Original Credit Agreement in its entirety.
ACCORDINGLY, the parties hereto agree that the Original Credit
Agreement is amended and restated in its entirety as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 DEFINED TERMS.
For purposes of this Agreement, the terms set forth below
shall have the following meanings:
"ACCEPTANCE AGENT" shall mean an entity acceptable to the
Agent and Borrowers who will provide the services previously
provided by Bankers Trust Caribe Capital Markets, Inc. under
the Funding Agreement.
"ACCEPTANCE OBLIGATION" shall have the meaning set forth in
Section 2.5(b).
"ACCEPTANCE PARTICIPANT" shall have the meaning set forth in
Section 2.4(g).
"ACCUMULATED FUNDING DEFICIENCY" shall mean a funding
deficiency described in Section 302 of ERISA.
"ACKNOWLEDGMENT AGREEMENT" shall mean an acknowledgment
agreement in form and substance satisfactory to the Agent
pursuant to which FNMA, FHLMC, GNMA
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or any private Person which owns mortgage loans or has issued
mortgaged-backed securities for which either Borrower holds
direct servicing rights, acknowledges and recognizes the
security interest in such rights granted to the Secured
Parties.
"ADJUSTED TANGIBLE NET WORTH" shall mean, as of any date, (a)
the sum of: (i) Book Net Worth as of such date, (ii) 0.95% of
the outstanding principal balance of mortgage loans with
respect to which the Borrowers have direct servicing rights on
such date, and (iii) the aggregate principal amount of
Permitted Subordinated Indebtedness outstanding as of such
date, less (b) all excess servicing fees receivable, all
purchased loan administration contracts and all other assets
that would be classified as intangible assets under GAAP,
including purchased and capitalized value of servicing rights,
goodwill (whether representing the excess cost over book value
of assets acquired or otherwise), patents, trademarks, trade
names, copyrights, franchises, deferred charges (including
unamortized debt discount and expense, organization and
acquisition costs and research and product development costs),
and in accordance with FASB 65, as amended by FASB 122, by the
Financial Accounting Standards Board, any originated mortgage
servicing rights.
"ADMINISTRATIVE FEE" shall have the meaning set forth in
Section 2.10(d).
"AFFILIATE" shall mean, as to any Person, any other Person
directly or indirectly Controlling, Controlled by or under
direct or indirect common Control with, such Person, whether
through the ownership of voting securities, by contract or
otherwise. "Control" as used herein (and all forms of the
word) means the power to direct the management and policies of
a Person.
"AGENCY" shall mean FHA, FHLMC, FNMA, GNMA or VA.
"AGENCY CUSTODIAL AGREEMENT" shall mean the agreement, as
amended, modified or supplemented from time to time, between
FHLMC, FNMA or GNMA, as applicable, and the Borrowers and any
Person meeting the eligibility requirements set forth in the
FHLMC Guide, FNMA Guide or GNMA Guide, as applicable, to serve
as a "custodian," "certificating custodian," or as "document
custodian", as applicable, pursuant to which such Person is
authorized to act as Certificating Custodian.
"AGENCY FEE" shall have the meaning given such term in Section
2.10(e).
"AGENCY GUIDES" shall mean the FHLMC Guide, the FNMA Guide and
the GNMA Guide.
"AGENT" shall mean Bankers Trust Company, in its capacity as
agent for the Lenders hereunder, and any successor agent
appointed pursuant to Section 7.9.
"AGREEMENT" shall mean this Agreement, as amended, modified or
supplemented from time to time.
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"AMENDMENT EFFECTIVE DATE" shall have the meaning set forth
in Section 8.18.
"APPROVED INVESTOR" shall mean FNMA, FHLMC or any Person
listed on Exhibit L. At the request of the Borrowers, the
Required Facility 1 Lenders may from time to time agree in
writing to add Persons to the list set forth on Exhibit L. By
written notice to the Borrowers, the Required Facility 1
Lenders or the Agent may in their or its reasonable
discretion, based on their or its evaluation of the
creditworthiness or funding ability of any Approved Investor
listed on Exhibit L, remove such Approved Investor from such
list. Such removal shall become effective immediately upon
written notice from the Agent.
"AUTHORIZED OFFICERS" shall mean those officers identified on
Exhibit V attached hereto; provided that FFCC or DMC, as the
case may be, may, with respect to its Authorized Officers, by
notice to the Agent in accordance with Section 8.1, add or
delete any person from the list of Authorized Officers set
forth above.
"BANK BOOK" shall mean that certain binder entitled "First
Financial Caribbean Corporation" dated April 26, 1995 compiled
by Bankers Trust containing information delivered to Bankers
Trust by the Borrowers, which binder was delivered to each of
the Lenders.
"BANKERS TRUST" shall mean Bankers Trust Company, in its
capacity as a Lender hereunder.
"BASE EURODOLLAR RATE" shall mean, with respect to any
Eurodollar Loan, a rate per annum equal to the offered rate
for U.S. Dollar deposits, in an amount equal to amount of the
Eurodollar Loan proposed to be subject to such rate and with
maturities comparable to such Eurodollar Interest Period, that
appears on Telerate Page 314 as of approximately 11:00 a.m.,
London time, two (2) Eurodollar Business Days prior to the
commencement of such Eurodollar Interest Period; provided that
if such rate does not appear on Telerate Page 314, the "Base
Eurodollar Rate" applicable to a particular Eurodollar
Interest Period shall mean a rate per annum equal to the rate
at which U.S. Dollar deposits, in an amount equal to the
principal amount of the Eurodollar Loans proposed to be
subject to such rate and with maturities comparable to such
Eurodollar Interest Period, are offered in immediately
available funds in the London Interbank Market to the London
office of the Agent by leading banks in the London Interbank
Market as of approximately 11:00 a.m., London time, two (2)
Eurodollar Business Days prior to the commencement of the
Eurodollar Interest Period to which such Base Eurodollar Rate
is applicable.
"BOARD" shall mean the Board of Governors of the Federal
Reserve System of the United States and any successor thereto.
"BOOK-ENTRY MBS" shall mean a Mortgage-Backed Security (a)
that is not represented by an instrument (other than the
physical security issued to GNMA's nominee, MBSCC & Co.,
evidencing a GNMA Mortgage- Backed Security) and
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(b) the ownership and transfer of which are entered upon books
maintained for that purpose by a depository.
"BOOK NET WORTH" shall mean (a) the sum of (i) the net worth,
determined in accordance with GAAP consistently applied, of
(A) FFCC on a non-consolidated basis, (B) DMC, (C) RSC Corp.,
(D) Centro Hipotecaro de Puerto Rico, Inc. and (E) other
Subsidiaries of FFCC engaged primarily in the business of
mortgage banking (as reasonably determined by the Agent, but
excluding Doral Federal Savings Bank and AAA Financial
Services Corporation) and (ii) the amount of intercompany
payables between FFCC and DMC, less (b) the sum of (i) the
amount of intercompany receivables between FFCC and DMC and
(ii) investments by FFCC and/or DMC in any Subsidiaries, which
investments are listed under the account titled "Other Assets"
(as such term is used in the consolidated balance sheet of
FFCC dated as of December 31, 1995) or which are listed under
other accounts. Notwithstanding the foregoing, if at any time
any of the entities listed in clauses (B), (C) or (D) above
become businesses engaged primarily in activities other than
mortgage banking (as reasonably determined by the Agent), then
the net worth of such entity shall not be included in clause
(i) for the purposes of calculating Book Net Worth.
"BORROWER" and "BORROWERS" shall have the meaning given such
terms in the introductory paragraph.
"BORROWING" shall mean a Facility 1 Borrowing, a Facility 2
Borrowing or a Swing-Line Borrowing.
"BORROWING DATE" shall mean any date on which Bankers Trust
makes a Swing-Line Loan or the Lenders make Facility 1 Loans
or Facility 2 Loans at the Borrowers request pursuant to
Section 2.2.
"BUSINESS DAY" shall mean any day other than (i) a Saturday,
Sunday and any other day on which banks in New York City are
required or authorized to close or (ii) any public or bank
holiday in the Commonwealth of Puerto Rico.
"CASH COLLATERAL ACCOUNT" shall have the meaning set forth in
the Cash Collateral Agreement.
"CASH COLLATERAL AGREEMENT" shall mean the First Amended and
Restated Cash Collateral Agreement, substantially in the form
of Exhibit E hereto, as amended, modified or supplemented from
time to time.
"CASH COLLATERAL SECURITY" shall mean the cash collateral
pledged to the Agent and the Secured Parties pursuant to the
Cash Collateral Agreement, as such amount may fluctuate from
time to time.
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"CERTIFICATING CUSTODIAN" shall mean any Person acting as the
Borrowers "document custodian," "custodian" or "certificating
custodian," as such terms are used in the Agency Guides, for
purposes of (a) certifying that the documentation relating to
Mortgage Loans received by such Person from the Borrowers (or
the Warehousing Collateral Agent) is complete and acceptable
under an applicable Agency Guide for purposes of including
such Mortgage Loan in a pool of Mortgage Loans in which
Mortgage-Backed Securities will represent interests and (b)
holding such documentation following formation of such pools
and issuance of such Mortgage-Backed Securities. The
Certificating Custodian shall at all times be party to the
Agency Custodial Agreements. The Certificating Custodian
shall be initially Banco Popular de Puerto Rico.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the rules and regulations
issues thereunder as from time to time in effect.
"COLLATERAL" shall mean the Warehousing Collateral, the
Servicing Collateral, the Collateral as defined in the Cash
Collateral Agreement, the REO Notes and the REO Property
encumbered by the REO Mortgages.
"COLLATERAL AGENTS" shall mean the Warehousing Collateral
Agent and the Servicing Collateral Agent.
"COLLATERAL VALUE OF THE FACILITY 1 BORROWING BASE" shall
mean, at the time of determination thereof, (a) the aggregate
collateral value of all Eligible Conforming Mortgage Loans and
Eligible Non- Conforming Mortgage Loans included in the
Facility 1 Borrowing Base plus (b) the aggregate collateral
value of all Eligible Mortgage-Backed Securities included in
the Facility 1 Borrowing Base. For purposes hereof, the
collateral value of (x) each Eligible Conforming Mortgage Loan
and each Eligible Mortgage-Backed Security shall be an amount
equal to ninety-eight percent (98%) of the current unpaid
principal balance of such Mortgage Loan or the unpaid
principal balance of such Mortgage-Backed Security at the time
such Mortgage-Backed-Security is included in the Facility 1
Borrowing Base, as applicable, and (y) each Eligible
Non-Conforming Mortgage Loan shall be in an amount equal to
ninety-five percent (95%) of the current unpaid principal
balance thereof; provided that if the Agent, in its sole
discretion, at any time believes that the collateral value of
any Seasoned Loan included in the Facility 1 Borrowing Base is
greater than the Fair Market Value of such Seasoned Loan then
the collateral value of any such Seasoned Loan shall, until
further notice from the Agent, be equal to (I) in the case of
each Eligible Conforming Mortgage Loan, ninety-eight percent
(98%) of the lesser of (x) the Fair Market Value of such
Seasoned Loan and (y) the current unpaid principal balance of
such Seasoned Loan and (II) in the case of each Eligible
Non-Conforming Mortgage Loan, ninety-five percent (95%) of the
lesser of (x) the Fair Market Value of such Seasoned Loan and
(y) the current unpaid principal balance of such Seasoned
Loan. The Collateral Value of the Facility 1 Borrowing Base
shall be determined by reference to the most recent Facility 1
Borrowing Base Certificate delivered by the Borrowers to the
Agent absent any error in such
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Facility 1 Borrowing Base Certificate as of the date
delivered. By adding any Mortgage Loan or Mortgage-Backed
Security to the Facility 1 Borrowing Base in accordance with
the Warehousing Security Agreement, each Borrower shall be
deemed to represent and warrant to the Agent and each Lender
at and as of the date of such addition that with respect to
such Mortgage Loans or Mortgage-Backed Securities, that each
of the statements set forth in the definition of Eligible
Conforming Mortgage Loan, Eligible Non-Conforming Mortgage
Loan or Eligible Mortgage-Backed Security, as the case may be,
is true and correct. If any such statement proves to be
untrue or incorrect in any respect at any time, then such
Mortgage Loan or Mortgage-Backed Security, as the case may be,
shall be deemed to have no collateral value for purposes of
computing the Collateral Value of the Facility 1 Borrowing
Base.
"COLLATERAL VALUE OF THE FACILITY 2 TRANCHE A BORROWING BASE"
shall mean, at the time of determination thereof, an amount
equal to eighty percent (80%) of the aggregate amount of
Eligible Servicing Receivables that are included in the
Facility 2 Tranche A Borrowing Base at such time. The
Collateral Value of the Facility 2 Tranche A Borrowing Base
shall be determined by reference to the most recent Facility 2
Tranche A Borrowing Base Certificate delivered by the
Borrowers to the Agent absent any error in such Facility 2
Tranche A Borrowing Base Certificate as of the date delivered.
Notwithstanding the foregoing, no Eligible Servicing
Receivable shall be deemed to have any collateral value for
purposes of computing the Collateral Value of the Facility 2
Tranche A Borrowing Base (x) on the date of repayment of any
advanced amount which is an Eligible Servicing Receivable by
any Obligor or any other Person (including any Agency) and (y)
to the extent such reimbursement right which is an Eligible
Servicing Receivable is being contested or disputed by any
applicable Agency or by any Person who could be liable for
such reimbursement or by any other Person with standing to do
so. By adding any Eligible Servicing Receivable to the
Facility 2 Tranche A Borrowing Base in accordance with the
Servicing Security Agreement, each Borrower shall be deemed to
represent and warrant to the Agent and each Lender at and as
of the date of such addition that with respect to such
Eligible Servicing Receivable, each of the statements set
forth in the definition of Eligible Servicing Receivable, is
true and correct. If any such statement proves to be untrue
or incorrect in any respect at any time, then such Eligible
Servicing Receivable shall be deemed to have no collateral
value for purposes of computing the Collateral Value of the
Facility 2 Tranche A Borrowing Base.
"COLLATERAL VALUE OF THE FACILITY 2 TRANCHE B BORROWING BASE"
shall mean, at any time, an amount equal to fifty percent
(50%) of the REO Valuation of the REO Property included in the
Facility 2 Tranche B Borrowing Base at such time. The
Collateral Value of the Facility 2 Tranche B Borrowing Base
shall be determined by reference to the most recent Facility 2
Tranche B Borrowing Base Certificate delivered by the
Borrowers to the Agent absent any error in such Facility 2
Tranche B Borrowing Base Certificate as of the date delivered.
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"COLLATERAL VALUE OF THE PLEDGED SERVICING PORTFOLIO" shall
mean, at the time of determination thereof, an amount equal to
the lesser of (i) sixty-five percent (65%) of the fair market
value of the servicing rights relating to the mortgage loans
included in the Pledged Servicing Portfolio and (ii) 0.95% of
the unpaid principal balance of the mortgage loans included in
the Pledged Servicing Portfolio (in each case as reflected on
the most recent Pledged Servicing Valuation Report delivered
to the Agent).
"COMMITMENTS" shall mean the Facility 1 Commitments and the
Facility 2 Commitments.
"CONFORMING LOAN" shall mean a Mortgage Loan underwritten in
conformity with the underwriting standards of FNMA or FHLMC in
effect at the time of such underwriting and that is otherwise
eligible for inclusion in a pool of Mortgage Loans supporting
FNMA or FHLMC Mortgage-Backed Securities or for sale at the
FNMA or FHLMC cash window.
"CONTRACTUAL OBLIGATION" shall mean, as to any Person, any
provision of any security issued by such Person or of any
agreement, instrument or undertaking to which such Person is a
party or by which it or any of its property is bound.
"CONVENTIONAL MORTGAGE LOAN" shall mean a Mortgage Loan that
is not insured by the FHA or guaranteed by the VA.
"CONVERSION/CONTINUATION DATE" shall mean (a) any date on
which the Lenders, pursuant to Sections 2.2 and 2.3, (i)
convert Facility 1 Loans to Facility 1 Loans bearing interest
at a different interest rate, or continue outstanding
Eurodollar Loans for an additional Eurodollar Interest Period
(which date shall be a Eurodollar Business Day in the case of
a conversion of Fed Funds Loans into Eurodollar Loans or the
continuation of a Eurodollar Loan) or (ii) exchange Old
Acceptances for New Acceptances and (b) the last day of each
Eurodollar Interest Period in the case of a Eurodollar Loan.
"CREDIT EVENT" shall mean either (i) a Borrowing, or (ii) the
creation of a Facility 1 Acceptance as provided in Section
2.1(f)(iii).
"DEFAULT RATE" shall have the meaning given such term in
Section 2.6(d).
"DEFAULTING LENDER" shall have the meaning given such term in
Section 2.4(b).
"DISCOUNT EXPENSE" shall have the meaning given such term in
Section 2.8(f).
"DRAFT" shall have the meaning given such term in Section
2.1(f)(iii).
"EFFECTIVE DATE" shall mean the date of the Original Credit
Agreement.
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"ELIGIBLE CONFORMING MORTGAGE LOAN" shall mean a Mortgage Loan
with respect to which each of the following statements is true
and correct:
(a) such Mortgage Loan is an Eligible Mortgage Loan; and
(b) such Mortgage Loan is insured by the FHA or
guaranteed by the VA (or there exists a binding
commitment to issue such insurance or guaranty
subject to the satisfaction of customary conditions)
or is a Conforming Loan.
"ELIGIBLE MORTGAGE-BACKED SECURITY" shall mean a
Mortgage-Backed Security owned by the Borrowers with respect
to which each of the following statements is true and correct:
(a) such Mortgage-Backed Security is a valid and binding
obligation of the Obligor thereon, is in full force
and effect and is enforceable in accordance with its
terms;
(b) such Mortgage-Backed Security is free of any default
and from any rescission, cancellation or avoidance,
and all rights thereof, whether by operation of law
or otherwise;
(c) such Mortgage-Backed Security has either been
deposited with and is held by the Warehousing
Collateral Agent or an agent, bailee and custodian of
the Warehousing Collateral Agent under the
Warehousing Security Agreement (or by a Person who
has executed a custodial agreement acceptable to the
Required Facility 1 Lenders), properly endorsed in
blank for transfer or, if such Mortgage-Backed
Security is a Book-Entry MBS, such Mortgage-Backed
Security is the subject of a Perfected Assignment;
(d) at all times such Mortgage-Backed Security will be
free and clear of all liens, encumbrances, charges,
rights and interests of any kind, except in favor of
the Secured Parties under the Warehousing Security
Agreement; and
(e) such Mortgage-Backed Security represents an interest
in Eligible Conforming Mortgage Loans.
"ELIGIBLE MORTGAGE LOAN" shall mean a Mortgage Loan owned by
the Borrowers for which each of the following statements is
true and correct:
(a) such Mortgage Loan is a valid and binding obligation
of the Obligor thereon, is in full force and effect
and is enforceable in accordance with its terms;
(b) such Mortgage Loan is secured by a first priority
mortgage (or deed of trust) on the Property
encumbered thereby;
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(c) such Mortgage Loan is genuine, in all respects, as
appearing on its face or as represented in the books
and records of the applicable Borrower, and all
information set forth therein is true and correct;
(d) such Mortgage Loan is free of any material default
(other than as permitted in subsection (e) below) of
any party thereto (including the Borrowers),
counterclaims, offsets and defenses and from any
rescission, cancellation or avoidance, and all rights
thereof, whether by operation of law or otherwise;
(e) no payment under such Mortgage Loan is more than
thirty (30) days past due the payment due date set
forth in the underlying promissory note and mortgage
(or deed of trust);
(f) such Mortgage Loan contains the entire agreement of
the parties thereto with respect to the subject
matter thereof, has not been modified or amended in
any respect and is free of concessions or
understandings with the Obligor thereon of any kind
not expressed in writing therein;
(g) such Mortgage Loan is in all respects as required by
and in accordance with all applicable laws and
regulations governing the same, including the federal
Consumer Credit Protection Act and the regulations
promulgated thereunder and all applicable usury laws
and restrictions; and all notices, disclosures and
other statements or information required by law or
regulation to be given, and any other act required by
law or regulation to be performed, in connection with
such Mortgage Loan have been given and performed as
required;
(h) all advance payments and other deposits on such
Mortgage Loan have been paid in cash, and no part of
such sums has been loaned, directly or indirectly, by
either Borrower to the Obligor thereon;
(i) at all times such Mortgage Loan will be free and
clear of all liens, encumbrances, charges, rights and
interests of any kind, except in favor of the Secured
Parties under the Warehousing Security Agreement;
(j) the Property encumbered by such Mortgage Loan is
insured against loss or damage by fire and all other
hazards normally included within standard extended
insurance coverage (including flood plain insurance
if such Property is located in a federally designated
flood plain) in accordance with the provisions of
such Mortgage Loan with the applicable Borrower named
as a loss payee thereon;
(k) the Property encumbered by such Mortgage Loan is free
and clear of all Liens except Liens in favor of the
applicable Borrower, which has assigned any and all
such Liens to the Secured Parties under the
Warehousing Security Agreement, subject only to (i)
Liens junior in priority to the Lien of such
Borrower; (ii) the Lien of real property taxes and
assessments not yet due and
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payable; (iii) covenants, conditions and restrictions,
rights of way, easements and other matters of public
record, as of the date of recording, being acceptable
to mortgage lending institutions generally and
specifically referred to in a lender's title insurance
policy delivered to the originator of the Mortgage
Loan and (A) referred to or otherwise considered
in the appraisal made for the originator of the
Mortgage Loan or (B) that do not materially adversely
affect the appraised value of such Property as set
forth in such appraisal; and (iv) other matters to
which like properties are commonly subject that do not
materially interfere with the benefits of the security
intended to be provided by the Mortgage Loan or the
use, enjoyment, value or marketability of the related
Property;
(l) if the promissory note for such Mortgage Loan (or any
other documentation relating thereto) has been
withdrawn from the possession of the Warehousing
Collateral Agent on terms and subject to conditions
set forth in Section 6 of the Warehousing Security
Agreement, the promissory note and any related
documentation for such Mortgage Loan has been shipped
by the Warehousing Collateral Agent directly to an
Approved Investor for purchase, as permitted under
Section 6(b) of the Warehousing Security Agreement,
and such shipment has occurred within the immediately
preceding twenty-four (24) hours (or within the
immediately preceding five (5) days in the case of
Mortgage Loan sales to the FNMA or FHLMC cash
window);
(m) with respect to Conventional Mortgage Loans, in the
event the Loan-to-Value Ratio of such Mortgage Loan
exceeds eighty percent (80%), such Mortgage Loan is
the subject of a private mortgage insurance policy
issued in favor of the applicable Borrower by an
insurer approved by FNMA, FHLMC, GNMA or by
nationally recognized rating agencies or pool
insurers for inclusion in privately-issued
mortgage-backed securities;
(n) such Mortgage Loan has not been included in the
Facility 1 Borrowing Base for a period in excess of
one hundred and eighty (180) days from the date such
Mortgage Loan was first included in the Facility 1
Borrowing Base;
(o) (i) if such Mortgage Loan is to be included in the
Facility 1 Borrowing Base, the Borrowers have
delivered (or caused to be delivered) those items
described on Attachment 2 to the Warehousing Security
Agreement for such Mortgage Loan to the Warehousing
Collateral Agent prior to the inclusion of such
Mortgage Loan in the Facility 1 Borrowing Base; and
(ii) the Borrowers hold in trust for the Secured
Parties those items described in Attachment 6 to the
Warehousing Security Agreement; and
(p) such Mortgage Loan is not subject to any servicing
arrangement with any Person other than the Borrowers
nor are any servicing rights relating to such
Mortgage Loan subject to any lien, claim, interest or
negative pledge in favor of any Person other than as
permitted hereunder.
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"ELIGIBLE NON-CONFORMING MORTGAGE LOAN" shall mean a Mortgage
Loan with respect to which each of the following statements is
true and correct:
(a) such Mortgage Loan is an Eligible Mortgage Loan;
(b) such Mortgage Loan (i) would be a Conforming Mortgage
Loan but for the fact that (A) its original principal
amount is in excess of the maximum amount eligible
for purchase by FNMA or (B) it is a second-priority
Mortgage Loan, or (ii) has been underwritten to
guidelines approved by nationally recognized rating
agencies or pool insurers whose long term debt is
rated AAA by Standard and Poor's Corporation and AA
by ▇▇▇▇▇'▇ Investors Service for inclusion in
privately- issued mortgage-backed securities;
(c) the original principal amount of such Mortgage Loan
is $600,000 or less; and
(d) if such Mortgage Loan is a second-priority Mortgage
Loan, then if the original principal amount of such
second-priority Mortgage Loan, when added to the
original principal amount of any other second
Eligible Non-Conforming Mortgage Loans which are
second-priority mortgage loans included in the
Facility 1 Borrowing Base, exceeds $3,000,000, then
such Mortgage Loan shall be deemed to have no
collateral value for purposes of computing the
Collateral Value of the Facility 1 Borrowing Base.
"ELIGIBLE REO PROPERTY" shall mean REO Property meeting the
criteria set forth on Exhibit N hereto.
"ELIGIBLE SERVICING RECEIVABLE" shall mean either Borrower s
right to be reimbursed for the amount that such Borrower has
advanced to investors as servicer of (i) any FHA-insured,
VA-guaranteed or Conforming Mortgage Loan included in its
Servicing Portfolio, or (ii) any other Mortgage Loan included
in its Servicing Portfolio and backing privately issued
mortgage-backed securities, insured by nationally recognized
pool insurers acceptable to the Agent, in each case in respect
of principal, interest, tax or insurance payments or any other
payments in connection with the servicing of such Mortgage
Loan, which advanced amount is fully or substantially
reimbursable by the Obligor under such Mortgage Loan or any
other Person (including any Agency), and the right of such
Borrower to such reimbursement is either subject to the Lien
of the Servicing Security Agreement or is subject to Section
5.2 (o), and in either case such receivable is also reflected
on the books and records of such Borrower as a current
receivable.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may from time to time be supplemented or
amended, and the rules and regulations issued thereunder as
from time to time in effect.
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"ERISA AFFILIATE" shall mean each trade or business, including
the Borrowers, whether or not incorporated, that together with
the Borrowers would be treated as a single employer under
section 4001 of ERISA.
"EURODOLLAR BUSINESS DAY" shall mean any Business Day on which
commercial banks are open for international business
(including dealings in dollar deposits) in London, England.
"EURODOLLAR INTEREST PERIOD" shall mean, with respect to any
Eurodollar Loan, the period commencing on the Borrowing Date
or a Conversion/Continuation Date for such Eurodollar Loan, as
the case may be, and ending thirty (30), sixty (60) or ninety
(90) days thereafter as the Borrowers may elect in the
applicable Notice of Borrowing or Notice of
Conversion/Continuation; provided that (a) any Eurodollar
Interest Period that would otherwise end on a day that is not
a Eurodollar Business Day shall be extended to the next
succeeding Eurodollar Business Day, unless such Eurodollar
Business Day falls in another calendar month, in which case
such Eurodollar Interest Period shall end on the next
preceding Eurodollar Business Day; (b) any Eurodollar Interest
Period that begins on the last Eurodollar Business Day of a
calendar month or any Eurodollar Interest Period that begins
on a day for which there is no numerically corresponding day
in the calendar month at the end of such Eurodollar Interest
Period shall end on the last Eurodollar Business Day of such
calendar month at the end of such Eurodollar Interest Period;
and (c) no Eurodollar Interest Period shall end after the
Maturity Date.
"EURODOLLAR LOAN" shall mean any Facility 1 Loan bearing
interest at the rate set forth in Section 2.6(b).
"EURODOLLAR RATE" shall mean, with respect to any Eurodollar
Interest Period, a rate per annum equal to the quotient
obtained by dividing (a) the Base Eurodollar Rate applicable
to such Eurodollar Interest Period by (b) one minus the
Reserve Requirement (expressed as a decimal) applicable to
such Eurodollar Interest Period. The Eurodollar Rate shall be
rounded, if necessary, to the next higher one-sixteenth of one
percent (1/16 of 1%).
"EVENT OF DEFAULT" shall have the meaning given such term in
Article VI.
"FACILITY 1 ACCEPTANCE" or "ACCEPTANCE"shall have the meaning
given such term in Section 2.1(f).
"FACILITY 1 BORROWING" shall mean a borrowing pursuant to a
Notice of Borrowing consisting of Facility 1 Loans made
concurrently by all of the Facility 1 Lenders.
"FACILITY 1 BORROWING BASE" shall mean, at any time, all
Eligible Conforming Mortgage Loans, Eligible Non-Conforming
Mortgage Loans and Eligible Mortgage-Backed Securities
delivered to and held by the Warehousing Collateral Agent
under the Warehousing Security Agreement as collateral
security for the Obligations.
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"FACILITY 1 BORROWING BASE CERTIFICATE" shall mean a
certificate in the form of and containing the information
required by Exhibit H-1, delivered to the Agent pursuant to
the Loan Documents.
"FACILITY 1 COMMITMENT" shall mean, with respect to each
Lender, the commitment, if any, of such Lender to make
Facility 1 Loans or to become an Acceptance Participant with
respect to Facility 1 Acceptances hereunder as set forth in
Section 2.1(a) and 2.1(f), as such commitment may be reduced
pursuant to Section 8.6(c).
"FACILITY 1 LENDER" shall mean any Lender with a Facility 1
Commitment or an outstanding Facility 1 Loan or Swing-Line
Loan or any Lender who is an Acceptance Participant with
respect to a Facility 1 Acceptance.
"FACILITY 1 LOAN" shall mean a loan made by a Facility 1
Lender pursuant to Section 2.1(a) for the purposes set forth
in the first sentence of Section 4.9.
"FACILITY 1 MAXIMUM AMOUNT" shall have the meaning set forth in
Section 2.1(a).
"FACILITY 1 NOTE" shall have the meaning given such term in
Section 2.5.
"FACILITY 1 SETTLEMENT ACCOUNT" shall have the meaning given
such term in Section 6(b) of the Warehousing Security
Agreement.
"FACILITY 2 BORROWING" shall mean a Facility 2 Tranche A
Borrowing, a Facility 2 Tranche B Borrowing or a Facility 2
Tranche C Borrowing.
"FACILITY 2 COMMITMENT" shall mean, with respect to each
Lender, the commitment, if any, of such Lender to make
Facility 2 Loans hereunder as set forth in Section 2.1(b), (c)
and (d), as such commitment may be reduced from time to time
pursuant to Section 8.6(c).
"FACILITY 2 LENDER" shall mean any Lender with a Facility 2
Commitment or an outstanding Facility 2 Loan.
"FACILITY 2 LOANS" shall mean Facility 2 Tranche A Loans,
Facility 2 Tranche B Loans and Facility 2 Tranche C Loans, as
the context requires.
"FACILITY 2 NOTE" shall have the meaning given such term in
Section 2.5.
"FACILITY 2 TRANCHE A BORROWING" shall mean a borrowing
pursuant to a Notice of Borrowing consisting of Facility 2
Tranche A Loans made concurrently by all of the Facility 2
Lenders.
"FACILITY 2 TRANCHE A BORROWING BASE" shall mean, at any time,
all Eligible Servicing Receivables, the proceeds of the
repayment of which have been pledged
18
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to the Servicing Collateral Agent under the Servicing Security
Agreement as collateral security for the Obligations.
"FACILITY 2 TRANCHE A BORROWING BASE CERTIFICATE" shall mean a
certificate in the form of Exhibit H-2 delivered to the Agent
pursuant to the Loan Documents.
"FACILITY 2 TRANCHE A LOAN" shall mean a loan made by a
Facility 2 Lender pursuant to Section 2.1(b) for the purposes
set forth in the second sentence of Section 4.9.
"FACILITY 2 TRANCHE A MAXIMUM AMOUNT" shall have the meaning
set forth in Section 2.1(b).
"FACILITY 2 TRANCHE B BORROWING" shall mean a borrowing
pursuant to a Notice of Borrowing consisting of Facility 2
Tranche B Loans made concurrently by all of the Facility 2
Lenders.
"FACILITY 2 TRANCHE B BORROWING BASE" shall mean, at any time,
all Eligible REO Property mortgaged to the Secured Parties, as
collateral security for the Obligations.
"FACILITY 2 TRANCHE B BORROWING BASE CERTIFICATE" shall mean a
certificate in the form of Exhibit H-3 delivered to the Agent
pursuant to the Loan Documents.
"FACILITY 2 TRANCHE B LOAN" shall mean a loan made by a
Facility 2 Lender pursuant to Section 2.1(c) for the purposes
set forth in the third sentence of Section 4.9.
"FACILITY 2 TRANCHE B MAXIMUM AMOUNT" shall have the meaning
set forth in Section 2.1(c).
"FACILITY 2 TRANCHE C BORROWING" shall mean a borrowing
pursuant to a Notice of Borrowing consisting of Facility 2
Tranche C Loans made concurrently by all of the Facility 2
Lenders.
"FACILITY 2 TRANCHE C LOAN" shall mean a loan made by a
Facility 2 Lender pursuant to Section 2.1(d) for the purposes
set forth in the fourth sentence of Section 4.9.
"FACILITY 2 TRANCHE C MAXIMUM AMOUNT" shall have the meaning
set forth in Section 2.1(d).
"FAIR MARKET VALUE" shall mean at any date with respect to any
Eligible Mortgage Loan or Eligible Non- Conforming Mortgage
Loan, (i) the bid price (expressed as a percentage) quoted to
the Agent as of the computation date by any nationally
recognized dealer (or Puerto Rican subsidiary of such dealer)
or investor selected by
19
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the Agent or its designee who at the time regularly purchases
similar Mortgage Loans, multiplied by (ii) the outstanding
principal balance thereof.
"FDIC" shall mean the Federal Deposit Insurance Corporation
and any successor thereto.
"FED FUNDS LOAN" shall mean any Facility 1 Loan or Facility 2
Loan bearing interest at the rate set forth in Section 2.6(c).
"FEDERAL FUNDS RATE" shall mean, for any period, a fluctuating
interest rate per annum equal for each day during such period
to the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York or, if
such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such
transactions received by the Agent from three (3) Federal
funds brokers of recognized standing selected by it.
"FEES" shall mean all fees payable by the Borrowers to the
Agent and/or the Lenders pursuant to Section 2.10 or
otherwise.
"FHA" shall mean the Federal Housing Administration and any
successor thereto.
"FHLMC" shall mean the Federal Home Loan Mortgage Corporation
and any successor thereto.
"FHLMC GUIDE" shall mean the "Sellers" & Servicers Guide"
published by FHLMC, as amended, modified or supplemented from
time to time.
"FNMA" shall mean the Federal National Mortgage Association
and any successor thereto.
"FNMA GUIDE" shall mean, collectively, the "Selling Guide" and
the "Servicing Guide" published by FNMA, as amended, modified
or supplemented from time to time.
"FNMA/FHLMC SERVICING PORTFOLIO" shall mean the portfolio of
outstanding residential mortgage loans (other than mortgage
loans owned by either Borrower or its Affiliates that are not
covered by a Permitted Affiliate Servicing Agreement)
specified on Attachment 1-A to the Servicing Security
Agreement, as such attachment is amended, modified or
supplemented from time to time, that are owned by FNMA or
FHLMC or included in pools of mortgage loans with respect to
which FNMA or FHLMC has issued a mortgage-backed security and
with respect to which either Borrower holds direct servicing
rights, and that are covered by an effective Acknowledgment
Agreement.
20
- 16 -
"FUNDING AGREEMENT" shall mean a Funding Agreement between the
Borrowers and the Acceptance Agent in substantially the form
of the Funding Agreement (as defined in the Original Credit
Agreement) and otherwise in form and substance satisfactory to
the Agent.
"GAAP" shall mean generally accepted accounting principles in
the United States of America in effect from time to time.
"GNMA" shall mean the Government National Mortgage Association
and any successor thereto.
"GNMA GUIDE" shall mean, collectively, the "GNMA I
Mortgage-Backed Securities Guide" and the "GNMA II
Mortgage-Backed Securities Guide" published by HUD, as
amended, modified or supplemented from time to time.
"GNMA SERVICING PORTFOLIO" shall mean the portfolio of
outstanding residential mortgage loans (other than mortgage
loans owned by either Borrower or its Affiliates that are not
covered by a Permitted Affiliate Servicing Agreement)
specified on Attachment 1-B to the Servicing Security
Agreement, as such attachment is amended, modified or
supplemented from time to time, that are guaranteed by GNMA or
included in pools of mortgage loans with respect to which GNMA
has issued a mortgage-backed security and with respect to
which either Borrower holds direct servicing rights, and that
are covered by an effective Acknowledgment Agreement if
requested by the Agent and the Lenders.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government,
any state, commonwealth or other political subdivision
thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or
pertaining to government.
"HEDGING INVENTORY REPORT" shall mean a monthly report,
prepared by the Borrowers, in form and substance satisfactory
to the Agent, setting forth the existing Take-Out Commitments
and all options or cash market instruments, pursuant to which
the Borrowers have hedged against interest rate fluctuations
to protect the value of Mortgage Loans and/or Mortgage-Backed
Securities owned by the Borrowers, and whether there has been
any change in the hedging policies of the Borrowers from the
statement of hedging policies dated January 1995 and delivered
to the Lenders prior to the Effective Date.
"HEDGING POLICY" shall mean the hedging policy of the
Borrowers as described in the statement of hedging policies
dated January 1995 included in the Bank Book.
"HUD" shall mean the Department of Housing and Urban
Development and any successor thereto.
21
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"INDEBTEDNESS" shall mean, with respect to any Person, all
items of indebtedness that, in accordance with GAAP, would be
included in determining liabilities as shown on the liability
side of a statement of financial condition of such Person as
of the date as of which indebtedness is to be determined,
including all obligations for money borrowed, the deferred
purchase price of property or services and capitalized lease
obligations, and shall also include all indebtedness and
liabilities of others assumed or guaranteed by such Person, or
secured by any Lien upon property owned by such Person,
whether or not such indebtedness is assumed, or in respect of
which such Person is secondarily or contingently liable (other
than by endorsement of instruments in the course of
collection), including contingent reimbursement obligations of
such Person under undrawn letters of credit, whether by reason
of any agreement to acquire such indebtedness or to supply or
advance sums or otherwise (but excluding any obligations
(whether recourse or nonrecourse) to advance principal and
interest payments and taxes and insurance payments on Mortgage
Loans in advance of receipt of such payments from the
underlying Obligor under servicing agreements entered into by
either Borrower which agreements exist on the date hereof and
any similar agreements entered into after the date hereof).
"LENDERS" shall mean the banks and other financial
institutions party hereto from time to time.
"LIEN" shall mean any security interest, mortgage, pledge,
lien, claim on property, charge or encumbrance (including any
conditional sale or other title retention agreement), any
lease in the nature thereof, and the filing of or agreement to
give any financing statement under the Uniform Commercial Code
of any jurisdiction.
"LOAN DOCUMENTS" shall mean this Agreement, the Security
Agreements, the Notes, the Acknowledgment Agreements and any
other document, instrument or agreement executed by the
Borrowers in connection herewith or therewith, as any of the
same may be amended, modified or supplemented from time to
time.
"LOAN-TO-VALUE RATIO" shall mean, with respect to any Mortgage
Loan, the ratio of the principal amount of such Mortgage Loan
outstanding at the origination thereof divided by the
appraised value of the Property encumbered thereby (as set
forth in the appraisal delivered in connection with the
origination of such Mortgage Loan).
"LOANS" shall mean the Facility 1 Loans, the Facility 2 Loans
and the Swing-Line Loans.
"MARGIN STOCK" shall have the meaning given such term in
Regulation U of the Board.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
with respect to (a) the business, operations or financial
condition of a Borrower, (b) the ability of any Borrower to
pay and perform its Obligations, (c) the validity or
enforceability of this Agreement, any of the other Loan
Documents, the Funding Agreement or the rights
22
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and remedies of the Secured Parties hereunder or thereunder or
(d) the value of the Collateral.
"MATERIAL AMOUNT" shall mean, at any time, ten percent (10%)
of Book Net Worth, as set forth in the most recent annual or
quarterly financial statement of FFCC delivered to the Lenders
and used in FFCC's Securities and Exchange Commission 10-K or
Securities and Exchange Commission 10-Q filing, as applicable,
absent manifest error in such statement.
"MATURITY DATE" shall mean June 27, 1997; provided that upon
the written request of the Borrowers to the Agent, the Lenders
may elect to extend the Maturity Date on terms as they may
deem appropriate in their sole discretion.
"MINIMUM ATNW" shall have the meaning assigned thereto in
Section 5.3(b).
"MINIMUM BNW" shall have the meaning assigned thereto in
Section 5.3(c).
"MORTGAGE-BACKED SECURITY" shall mean (a) a security
(including a participation certificate) guaranteed by GNMA
that represents interests in a pool of loans secured by
mortgages, deeds of trusts or other instruments creating a
Lien on property that is improved by a completed single family
dwelling (one-to- four family units) other than a mobile home
or other temporary housing facilities, or (ii) a security
(including a participation certificate) issued by FNMA or
FHLMC that represents interests in such a pool.
"MORTGAGE LOAN" shall mean a one-to-four family, residential
real estate secured loan other than any loan secured by mobile
homes or other temporary housing facilities.
"MULTIEMPLOYER PLAN" shall mean a plan described in section
4001(a)(3) of ERISA to which the Borrowers or any ERISA
Affiliate is required to contribute on behalf of any of its
employees.
"NEW ACCEPTANCE" shall have the meaning set forth in Section
2.3(b).
"NOTES" shall mean the Facility 1 Notes and the Facility 2
Notes.
"NOTICE OF BORROWING" shall have the meaning given such term
in Section 2.2.
"NOTICE OF CONVERSION/CONTINUATION" shall have the meaning
given such term in Section 2.2.
"OBLIGATIONS" shall mean, in respect of each of the Borrowers,
any and all debts, obligations and liabilities (including
Acceptance Obligations) of such Borrower to the Lenders, the
Agent, the Collateral Agents and any other Secured Parties,
(whether now existing or hereafter arising, voluntary or
involuntary, whether or not jointly
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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), under or arising out of the Loan Documents.
"OBLIGOR" shall mean the Person or Persons obligated to pay
the indebtedness that is the subject of a Mortgage Loan or
Mortgage-Backed Security, including any guarantor of such
indebtedness.
"OLD ACCEPTANCE" shall have the meaning set forth in Section
2.3(b).
"ORIGINAL CREDIT AGREEMENT" shall mean the Credit Agreement,
dated as of June 30, 1995, between the Lenders, the Agent and
the Borrowers (as amended by the First Amendment to the Credit
Agreement dated as of December 29, 1995, the Second Amendment
to Credit Agreement dated as of May 1, 1996, and the Third
Amendment to Credit Agreement dated as of June 28, 1996).
"PAYMENT OFFICE" shall mean the Agent's office located at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other
office as the Agent shall specify by notice to the Borrowers
and the Lenders.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and
any successor thereto.
"PERFECTED ASSIGNMENT" shall mean as to any Book-Entry MBS,
that such Book-Entry MBS has been transferred to the
Warehousing Collateral Agent or any entity designated by the
Warehousing Collateral Agent so that the Warehousing
Collateral Agent or such entity may maintain such Book-Entry
MBS as depository in one of its book-entry accounts with a
Federal Reserve Bank or with the Participants Trust Company or
its nominee, MBSCC & Co., and a pledge to the Secured Parties
has been registered with the Warehousing Collateral Agent or
such entity, or the Borrowers has taken such other action as
the Warehousing Collateral Agent may reasonably request to
perfect, protect and maintain the valid, first priority
security interest of the Secured Parties in such Book-Entry
MBS.
"PERMITTED AFFILIATE SERVICING AGREEMENT" shall mean an
agreement between either Borrower and an Affiliate thereof
pursuant to which such Borrower has direct servicing rights to
service mortgage loans owned by such Affiliate on terms and at
rates no less favorable than would be obtained from a
non-Affiliate.
"PERMITTED SUBORDINATED INDEBTEDNESS" shall mean the
$10,000,000 8.25% Convertible Subordinated Debentures due
January 1, 2006, of FFCC, issued under that certain Debenture
Purchase Agreement, dated as of September 25, 1995, as amended
and restated as of December 15, 1995, between FFCC and
BanPonce Corporation and any other Indebtedness incurred by
each Borrower (other than the Obligations) that is
subordinated to the Obligations in accordance with the
criteria set forth on Exhibit R attached hereto.
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"PERSON" shall mean any corporation, natural person, firm,
joint venture, partnership, trust, unincorporated
organization, government or any political subdivision,
department, agency or instrumentality of any government.
"PLAN" shall mean any plan (other than a Multiemployer Plan)
subject to Title IV of ERISA maintained for employees of the
Borrowers or any ERISA Affiliate (and any such plan no longer
maintained by the Borrowers or any of its ERISA Affiliates to
which the Borrowers or any of its ERISA Affiliates has made or
was required to make any contributions during the five years
preceding the date on which such plan ceased to be
maintained).
"PLEDGED SERVICING CONTRACT" shall have the meaning given such
term in Section 2(a) of the Servicing Security Agreement.
"PLEDGED SERVICING PORTFOLIO" shall mean the FNMA/FLHMC
Servicing Portfolio, the GNMA Servicing Portfolio and the
Private Investor Servicing Portfolio, in each case with
respect to each of which the Secured Parties have a valid and
perfected first priority security interest in the related
direct servicing rights owned by either Borrower.
"PLEDGED SERVICING PORTFOLIO REPORT" shall mean a report
prepared by the Borrowers in the format prescribed by the
Mortgage Bankers Association of America listing the FNMA/GNMA
/FHLMC statistics and the other information shown on Exhibit
T.
"PLEDGED SERVICING VALUATION REPORT" shall mean a report
prepared by a nationally recognized mortgage servicing broker
acceptable to the Agent and the Borrowers, and otherwise in
form and substance reasonably satisfactory to the Agent,
setting forth the fair market value of the servicing rights
relating to the mortgage loans included in the Pledged
Servicing Portfolio as of such date (with the FNMA/FHLMC
Servicing Portfolio, the GNMA Servicing Portfolio and the
Private Investor Servicing Portfolio each listed and valued
separately (and, with respect to the FNMA/FHLMC Servicing
Portfolio, with the portfolio serviced for FNMA listed
separately from the portfolio serviced for FHLMC)), with such
value determined on the basis of the net present value of the
expected stream of annual cash flow generated thereby using
assumptions reasonably acceptable to the Agent.
"POWER OF ATTORNEY" shall mean a power of attorney granted by
the Borrowers, substantially in the form of Exhibit K attached
hereto.
"POTENTIAL DEFAULT" shall mean an event that with the lapse of
time or the giving of notice, or both, would, unless cured or
waived, constitute an Event of Default.
"PRIME RATE" shall mean the rate of interest that is publicly
announced from time to time by Bankers Trust Company in New
York City as its prime lending rate as in effect from time to
time, such rate to change automatically and without notice to
the
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Borrowers when and as such prime lending rate changes. The
Prime Rate is a reference rate and does not necessarily
represent the best or lowest rate actually charged by Bankers
Trust Company to any customer. Bankers Trust Company may make
commercial loans or other loans at rates of interest at, above
or below the Prime Rate.
"PRIOR YEAR MINIMUM ATNW" shall have the meaning assigned
thereto in Section 5.3(b).
"PRIOR YEAR MINIMUM BNW" shall have the meaning assigned
thereto in Section 5.3(c).
"PRIVATE INVESTOR SERVICING PORTFOLIO" shall mean the
portfolio of outstanding residential mortgage loans specified
on Attachment 1-A to the Servicing Security Agreement, as such
attachment is amended, modified or supplemented from time to
time, that are owned by any Person (other than an Agency) or
included in pools of mortgage loans with respect to which such
Person (other than an Agency) has issued a mortgage-backed
security and with respect to which either Borrower holds
direct servicing rights, and that are covered by an effective
Acknowledgement Agreement.
"PROCEEDS" shall mean whatever is receivable or received when
Collateral or proceeds are sold, collected, exchanged or
otherwise disposed of, whether such disposition is voluntary
or involuntary, and includes all rights to payment, including
return premiums, with respect to any insurance relating
thereto.
"PROCESS AGENT" shall have the meaning set forth in Section
8.7.
"PROHIBITED TRANSACTION" shall mean any transaction described
in section 406 of ERISA that is not exempt by reason of
section 408 of ERISA or the transitional rules set forth in
section 414(c) of ERISA and any transaction described in
section 4975(c)(1) of the Code that is not exempt by reason of
section 4975(c)(2) or section 4975(d) of the Code, or the
transitional rules of section 2003(c) of ERISA.
"PROPERTY" shall mean the real property, including the
improvements thereon, and the personal property (tangible and
intangible) which are encumbered pursuant to a Mortgage Loan.
"REAL ESTATE CLOSING" shall mean a real estate closing with
respect to a Borrowing of a Facility 2 Tranche B Loan.
"REGULATION D" shall mean Regulation D of the Board as from
time to time in effect, and any other regulation hereafter
promulgated by the Board to replace the prior Regulation D and
having substantially the same function.
"REO DEMAND NOTE" shall mean a demand note, substantially in
the form of Exhibit S-1 hereto, as amended, modified or
supplemented from time to time.
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"REO MORTGAGE" shall mean the deed of mortgage, substantially
in the form of Exhibit S-3 hereto, as amended, modified or
supplemented from time to time.
"REO PLEDGE" shall mean the pledge agreement, substantially in
the form of Exhibit S-2 hereto, as amended, modified or
supplemented from time to time.
"REO PROPERTY" shall mean real property owned by either
Borrower as a result of foreclosure of a mortgage loan held by
such Borrower.
"REO VALUATION" shall mean a valuation of the fair market
value of the REO Property, as determined by (i) an appraisal
of such REO Property conducted by an appraiser, which
appraisal and appraiser meet the criteria specified by FNMA,
FHLMC and HUD in connection with the origination of Mortgage
Loans and which appraisal was conducted and had an effective
date within the ninety (90) days preceding the date of the
Real Estate Closing covering such REO Property, or (ii) an
inspection report if no appraisal conducted within such
preceding ninety (90) days described in clause (i) exists,
which inspection report (A) was prepared by an appraiser
described in clause (i) above after an inspection of such REO
Property, (B) is an update of a previous appraisal described
in clause (i) above, and (C) has an effective date relating to
an inspection conducted within such preceding ninety (90)
days.
"REPORTABLE EVENT" shall mean any of the events set forth in
section 4043(c) of ERISA or the regulations thereunder, a
withdrawal from a Plan described in section 4063 of ERISA, a
cessation of operations described in section 4068(f) of ERISA,
an amendment to a Plan necessitating the posting of security
under section 401(a)(29) of the Code, or a failure to make a
payment required by section 412(m) of the Code and section
302(e) of ERISA when due.
"REQUEST FOR ACCEPTANCE" shall have the meaning set forth in
Section 2.2(b).
"REQUIRED ACCEPTANCE PAYMENT" shall have the meaning given
such term in Section 2.8(f).
"REQUIRED FACILITY 1 LENDERS" shall mean, at any time, Lenders
holding at least sixty-six and two- thirds percent (66.66%) of
(i) the then aggregate unpaid principal amount of the Facility
1 Loans (and, in the case of Bankers Trust, Swing-Line Loans
to the extent any Lender shall have failed to comply with its
obligation to refinance such Swing-Line Loans as provided in
Section 2.4) and (ii) Acceptance Obligations (provided that
Bankers Trust shall be deemed to hold the Acceptance
Obligations for any Lender who has failed to pay when due any
amounts due to Bankers Trust as a result of such Lender being
an Acceptance Participant) or, if no Facility 1 Loans or
Swing-Line Loans or Acceptance Obligations are then
outstanding, Lenders holding at least sixty-six and two-thirds
percent (66.66%) of the Facility 1 Commitments.
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"REQUIRED FACILITY 2 LENDERS" shall mean, at any time, Lenders
holding at least sixty-six and two- thirds percent (66.66%) of
the then aggregate unpaid principal amount of the Facility 2
Loans or, if no Facility 2 Loans are then outstanding, Lenders
holding at least sixty-six and two-thirds percent (66.66%) of
the Facility 2 Commitments.
"REQUIRED LENDERS" shall mean, at any time, Lenders holding at
least sixty-six and two-thirds percent (66.66%) of (i) the
then aggregate unpaid principal amount of all outstanding
Facility 1 Loans (and, in the case of Bankers Trust,
Swing-Line Loans to the extent any Lender shall have failed to
comply with its obligations to refinance such Swing-Line Loans
as provided in Section 2.4) and Facility 2 Loans and (ii)
Acceptance Obligations (provided that Bankers Trust shall be
deemed to hold the Acceptance Obligations for any Lender who
has failed to pay when due any amounts due to Bankers Trust as
a result of such Lender being an Acceptance Participant), or
if no Loans or Acceptances are then outstanding, Lenders
holding at least sixty-six and two-thirds percent (66.66%) of
the Commitments.
"REQUIREMENTS OF LAW" shall mean as to any Person the Articles
or Certificate of Incorporation and Bylaws or other
organizational or governing documents of such Person, and any
law, treaty, rule or regulation, or a final and binding
determination of an arbitrator or a determination of a court
or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or to which
such Person or any of its property is subject.
"RESERVE REQUIREMENT" shall mean, with respect to any
Eurodollar Interest Period, the daily average during such
Eurodollar Interest Period of the maximum aggregate reserve
requirement (including all basic, supplemental, marginal and
other reserves and taking into account any transitional
adjustments or other scheduled changes in reserve requirements
during such Eurodollar Interest Period) which is imposed under
Regulation D on any member bank of the Federal Reserve System,
in respect of eurocurrency or eurodollar funding, lending or
liabilities.
"SEASONED LOAN" shall mean an Eligible Mortgage Loan or an
Eligible Non-Conforming Mortgage Loan (a) for which the date
of the underlying promissory note relating to such underlying
mortgage loan is earlier than ninety (90) days prior to the
date such Mortgage Loan is first included in the Facility 1
Borrowing Base and (b) which was originated and underwritten
by either Borrower.
"SECURED PARTIES" shall have the meaning given such term in
the Security Agreements.
"SECURITY AGREEMENTS" shall mean all REO Demand Notes, all REO
Mortgages, all REO Pledges, the Warehousing Security
Agreement, the Servicing Security Agreement, the Cash
Collateral Agreement and any other documents or certificates
creating or evidencing security interests granted to the
Secured Parties in connection with this Agreement and the
other Loan Documents.
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"SENIOR NOTES" shall mean the $75,000,000 principal amount
Senior Notes due 2006 to be issued by FFCC on or about October
1, 1996, constituting general unsecured and unsubordinated
obligations of FFCC, as further described in the Form S-3
Registration Statement filed by FFCC with the Securities and
Exchange Commission on September 9, 1996.
"SERVICING COLLATERAL" shall mean the collateral described in
Section 1 of the Servicing Security Agreement.
"SERVICING COLLATERAL AGENT" shall mean initially Bankers
Trust Company, and any successor collateral agent thereto
acceptable to the Required Facility 3 Lenders and the
Borrowers and designated as the "Collateral Agent" under the
Servicing Security Agreement.
"SERVICING PORTFOLIO" shall mean, at any time, the portfolio
of outstanding residential mortgage loans (other than mortgage
loans owned by the Borrowers and its Affiliates which are not
covered by Permitted Affiliate Servicing Agreements) with
respect to which the Borrowers have direct servicing rights.
"SERVICING SECURITY AGREEMENT" shall mean the First Amended
and Restated Security and Collateral Agency Agreement
(Servicing Collateral) substantially in the form of Exhibit D,
as amended, modified or supplemented from time to time.
"STATEMENT OF ACCOUNTS RECEIVABLE" shall mean a Statement of
Accounts Receivable, substantially in the form of Exhibit U
attached hereto.
"SUBSIDIARY" shall mean with respect to any Person, any
corporation, association or other business entity of which
more than fifty percent (50%) of the securities or other
ownership interests having ordinary voting power is, or with
respect to which rights to control management (pursuant to any
contract or other agreement or otherwise) are, at the time as
of which any determination is being made, owned, controlled or
held by such Person or one or more subsidiaries of such
Person.
"SWING-LINE BORROWING" shall mean a borrowing, pursuant to a
Notice of Borrowing, of a Swing-Line Loan made by Bankers
Trust.
"SWING-LINE LOAN" shall mean a loan made by Bankers Trust
pursuant to Section 2.1(e) for the purposes set forth in the
first sentence of Section 4.9.
"TAKE-OUT COMMITMENT" shall mean, with respect to any
specified aggregate amount of Mortgage Loans or
Mortgage-Backed Securities included in the Facility 1
Borrowing Base, a bona fide current, unfilled and unexpired
commitment of an Approved Investor, issued in favor of and
held by either Borrower, under which such Approved Investor
agrees to purchase such specified aggregate amount of Mortgage
Loans or Mortgage-Backed Securities at a specified price,
which commitment in the reasonably anticipated course of
events, (a) can be fully complied with prior to the
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expiration thereof, (b) is not subject to any term or
condition that is not customary in commitments of like nature
and (c) is for a purchase to be consummated in more than
thirty (30) days from the date such commitment was entered
into.
"TAXES" shall have the meaning given such term in Section
2.15(a).
"TELERATE PAGE 314" shall mean the display designated as "Page
314" on the Associated Press-Dow ▇▇▇▇▇ Telerate Service (or
such other page as may replace Page 314 on the Associated
Press-Dow ▇▇▇▇▇ Telerate Service or such other service as may
be nominated by the British Bankers Association as the
information vendor for the purposes of displaying British
Bankers Association interest settlement rates for U.S. Dollar
deposits). Any Base Eurodollar Rate determined on the basis
of the rate displayed on Telerate Page 314 shall be subject to
corrections, if any, made in such rate and displayed by the
Associated Press-Dow ▇▇▇▇▇ Telerate Service within one (1)
hour of the time when such rate is first displayed by such
service.
"TOTAL LIABILITIES" shall mean (i) the aggregate amount of all
liabilities of each Borrower and each of its consolidated
Subsidiaries (other than Doral Federal Savings Bank and AAA
Financial Services Corporation) determined in accordance with
GAAP, consistently applied, other than Permitted Subordinated
Indebtedness less (ii) the aggregate amount of intercompany
payables owing from one Borrower to the other.
"TYPE" shall mean (a) when used in respect of any Mortgage
Loan, an Eligible Conforming Mortgage Loan or an Eligible
Non-Conforming Mortgage ; (b) when used in respect of any
Commitment, a Facility 1 Commitment or a Facility 2
Commitment; and (c) when used in respect of any Loan, a
Facility 1 Loan, a Facility 2 Loan or a Swing-Line Loan.
"VA" shall mean the Veterans Administration and any successor
thereto.
"WAREHOUSING COLLATERAL" shall mean the collateral described
in Section 1 of the Warehousing Security Agreement.
"WAREHOUSING COLLATERAL AGENT" shall mean initially Banco
Popular de Puerto Rico, and any successor collateral agent
thereto acceptable to the Required Facility 1 Lenders and the
Borrowers and designated as the "Collateral Agent" under the
Warehousing Security Agreement.
"WAREHOUSING SECURITY AGREEMENT" shall mean the First Amended
and Restated Security, Custody and Collateral Agency Agreement
(Warehousing Collateral) substantially in the form of Exhibit
C, as amended, modified or supplemented from time to time.
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SECTION 1.2 TERMS GENERALLY.
The definitions in Section 1.1 shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include," "includes" and "including" shall be deemed
to be followed by the phrase "without limitation." All references herein to
Articles, Sections, Exhibits and Attachments shall be deemed references to
Articles and Sections of, and Exhibits and Attachments to, this Agreement or to
an Exhibit to this Agreement unless the context shall otherwise require.
Except as otherwise provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided that, except as provided with respect to the adoption of FASB 65
in the definition of "Adjusted Tangible Net Worth" set forth in Section 1.1,
for purposes of determining compliance with any covenant set forth in Article
V, such term shall be construed in accordance with GAAP as in effect on the
date of this Agreement applied on a basis consistent with the financial
statements referred to in Section 4.4(a).
ARTICLE 2
AMOUNTS AND TERMS OF LOANS AND ACCEPTANCES
SECTION 2.1 COMMITMENTS.
(a) Facility 1 Loans. Subject to and upon the terms and
conditions herein set forth, each Facility 1 Lender agrees, severally and not
jointly, at any time and from time to time from the Amendment Effective Date up
to but excluding the date upon which the Facility 1 Commitments are terminated,
to make Facility 1 Loans to the Borrowers in an aggregate principal amount at
any time outstanding not to exceed the aggregate Facility 1 Commitment set
forth opposite such Facility 1 Lender's name on the signature pages hereto, as
such commitment may be reduced from time to time pursuant to Section 8.6(c);
provided that the aggregate principal amount of Facility 1 Loans and Swing-Line
Loans plus the aggregate face amount of Facility 1 Acceptances outstanding at
any time shall not exceed the lesser of: (i) the aggregate Facility 1
Commitments of the Facility 1 Lenders then in effect and (ii) the then current
Collateral Value of the Facility 1 Borrowing Base (such lesser amount is
referred to herein as the "Facility 1 Maximum Amount"). Subject to Section
2.12, each Facility 1 Loan shall be a Eurodollar Loan or a Fed Funds Loan.
Subject to Section 2.2(a)(ii), each Facility 1 Borrowing shall be in an
aggregate principal amount of at least $1,000,000 (or in any lesser amount
equal to the unused Facility 1 Commitments) and shall be made ratably by the
Facility 1 Lenders in proportion to their respective Facility 1 Commitments.
Within the foregoing limits and subject to the conditions set forth in Article
III, the Borrowers may borrow and reborrow Facility 1 Loans under Section 2.2
and prepay Facility 1 Loans under Section 2.9.
(b) Facility 2 Tranche A Loans. Subject to and upon the terms and
conditions herein set forth, each Facility 2 Lender agrees, severally and not
jointly, at any time and from time to time from the Amendment Effective Date up
to but excluding the date upon which the Facility 2 Commitments are terminated,
to make Facility 2 Tranche A Loans to the Borrowers in an aggregate principal
amount at any time outstanding not to exceed the Facility 2 Commitment set
forth opposite such Facility 2 Lender's name on the signature pages hereto, as
such commitment may be reduced from
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time to time pursuant to Section 8.6(c); provided that the aggregate principal
amount of Facility 2 Tranche A Loans outstanding at any time shall not exceed
the least of (i) the aggregate Facility 2 Commitments of all of the Facility 2
Lenders then in effect less the aggregate amount of Facility 2 Tranche B Loans
and Facility 2 Tranche C Loans then outstanding, (ii) the then current
Collateral Value of the Facility 2 Tranche A Borrowing Base, and (iii)
$7,000,000 (such least amount is referred to herein as the "Facility 2 Tranche
A Maximum Amount"); and provided further, that the Borrowers shall not make any
Facility 2 Tranche A Borrowing, the Facility 2 Lenders shall not make any
Facility 2 Tranche A Loans and, pursuant to Section 2.8(b), no Facility 2
Tranche A Loans shall be outstanding, during the period commencing on the
seventh (7th) calendar day and ending on the twelfth (12th) calendar day of
each month. Each Facility 2 Tranche A Loan shall be a Fed Funds Loan. Each
Facility 2 Tranche A Borrowing shall be in an aggregate principal amount of at
least $500,000 (or in any lesser amount equal to the unused Facility 2 Tranche
A Commitments) and shall be made by the Facility 2 Lenders ratably in
proportion to their respective Facility 2 Commitments. Within the foregoing
limits and subject to the conditions set forth in Article III, the Borrowers
may borrow and reborrow Facility 2 Tranche A Loans under Section 2.2 and prepay
Facility 2 Tranche A Loans under Section 2.9.
(c) Facility 2 Tranche B Loans. Subject to and upon the terms and
conditions herein set forth, each Facility 2 Lender agrees, severally and not
jointly, at any time and from time to time from the Amendment Effective Date up
to but excluding the date upon which the Facility 2 Commitments are terminated,
to make Facility 2 Tranche B Loans to the Borrowers in an aggregate principal
amount at any time outstanding not to exceed the Facility 2 Commitment set
forth opposite such Facility 2 Lender's name on the signature pages hereto, as
the same may be reduced from time to time pursuant to Section 8.6(c); provided
that the aggregate principal amount of Facility 2 Tranche B Loans outstanding
at any time shall not exceed the least of: (i) the sum of the Facility 2
Commitments of all of the Facility 2 Lenders then in effect less the aggregate
amount of Facility 2 Tranche A Loans and Facility 2 Tranche C Loans then
outstanding, (ii) the then current Collateral Value of the Facility 2 Tranche B
Borrowing Base and (iii) $2,000,000 (such least amount is referred to herein as
the "Facility 2 Tranche B Maximum Amount"). Each Facility 2 Tranche B Loan
shall be a Fed Funds Loan. Each Facility 2 Tranche B Borrowing shall in an
aggregate principal amount of at least $1,000,000 (or in any lesser amount
equal to the unused Facility 2 Tranche B Commitments) and shall be made by the
Facility 2 Lenders ratably in proportion to their respective Facility 2
Commitments. No more than two (2) Borrowings for a Facility 2 Tranche B Loan
may be outstanding simultaneously hereunder. Within the foregoing limits and
subject to the conditions set forth in Article III, the Borrowers may borrow
and reborrow Facility 2 Tranche B Loans under Section 2.2 and prepay Facility 2
Tranche B Loans under Section 2.9.
(d) Facility 2 Tranche C Loans. Subject to and upon the terms and
conditions herein set forth, each Facility 2 Lender agrees, severally and not
jointly, at any time and from time to time from the Amendment Effective Date up
to but excluding the date upon which the Facility 2 Commitments are terminated,
to make Facility 2 Tranche C Loans to the Borrowers in an aggregate principal
amount at any time outstanding not to exceed the Facility 2 Commitment set
forth opposite such Facility 2 Lender's name on the signature pages hereto, as
the same may be reduced from time to time pursuant to Section 8.6(c); provided
that the aggregate principal amount of Facility 2 Tranche C Loans outstanding
at any time shall not exceed the lesser of: (i) the sum of the Facility 2
Commitments of all of the Facility 2 Lenders then in effect less the aggregate
amount of Facility 2
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Tranche A Loans and Facility 2 Tranche B Loans then outstanding, and (ii)
$3,000,000 (such lesser amount is referred to herein as the "Facility 2 Tranche
C Maximum Amount"). Each Facility 2 Tranche C Loan shall be a Fed Funds Loan.
Each Facility 2 Tranche C Borrowing shall in an aggregate principal amount of
at least $500,000 (or in any lesser amount equal to the unused Facility 2
Commitments) and shall be made by the Facility 2 Lenders ratably in proportion
to their respective Facility 2 Commitments. Within the foregoing limits and
subject to the conditions set forth in Article III, the Borrowers may borrow
and reborrow Facility 2 Tranche C Loans under Section 2.2 and prepay Facility 2
Tranche C Loans under Section 2.9.
(e) Swing-Line Loans. Subject to and upon the terms and
conditions herein set forth, Bankers Trust may, in its sole discretion, at any
time and from time to time from the Amendment Effective Date up to but
excluding the Maturity Date, make Swing-Line Loans to the Borrowers in an
aggregate principal amount at any time outstanding not to exceed $15,000,000;
provided that the aggregate principal amount of Swing-Line Loans outstanding at
any time shall not exceed the limitations set forth in Section 2.1(a). Subject
to Section 2.12, each Swing-Line Loan shall be a Fed Funds Loan. Within the
foregoing limits and subject to the conditions set forth in Article III, the
Borrowers may borrow and reborrow Swing-Line Loans under Section 2.2 and prepay
such Loans under Section 2.9. If Bankers Trust, in its sole discretion, elects
not to make a Swing-Line Loan on any date, the Agent shall treat the Notice of
Borrowing for such Swing-Line Loan as a Notice of Borrowing for Facility 1
Loans.
(f) Bankers Acceptances.
(i) Subject to and upon the terms and conditions herein
set forth, the Borrowers, at any time and from time to time on or
after the Amendment Effective Date up to but excluding the date on
which the Facility 1 Commitments are terminated, may request that
Bankers Trust accept a draft (a "Facility 1 Acceptance" or
"Acceptance") as herein provided in lieu of borrowing additional sums
under the Facility 1 Commitments in an aggregate face amount at any
time outstanding not to exceed the aggregate Facility 1 Commitments,
as such commitments may be reduced from time to time pursuant to
Section 8.6(c); provided that the aggregate principal amount of
Facility 1 Loans and Swing-Line Loans plus the aggregate face amount
of all Facility 1 Acceptances outstanding at any time shall not exceed
the Facility 1 Maximum Amount.
(ii) Bankers Trust may create Facility 1 Acceptances in
its sole and absolute discretion upon a request by the Borrowers
delivered in accordance with clause (i) above, and each such Facility
1 Acceptance shall be created hereunder by Bankers Trust's accepting a
draft, in substantially the form of Exhibit B-2 hereto (a "
Draft"). Each Draft shall be (a) drawn by the Borrowers on
Bankers Trust in accordance with the terms hereof and be payable in
U.S. Dollars, (b) payable only to the order of the Acceptance Agent,
(c) dated the date of acceptance of such Draft by Bankers Trust, (d)
in a face amount at least equal to $1,000,000 and shall (e) mature on
a Business Day either thirty (30), sixty (60) or ninety (90) days
after the date of such Draft; provided that in no event shall an
Acceptance (i) be created unless the conditions set forth in Article
III have been satisfied with respect to the issuance of such Facility
1 Acceptance, (ii) mature after the Maturity Date, or (iii) have a
face amount, together with the aggregate face amount of all other
Facility 1 Acceptances plus the
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aggregate principal amount of Facility 1 Loans and Swing-Line Loans
then outstanding, exceeding the Facility 1 Maximum Amount.
(iii) The Borrowers hereby acknowledge and agree that (a)
Bankers Trust has no obligation to discount any Facility 1 Acceptance,
(b) Bankers Trust has no obligation to create any Facility 1
Acceptance except in the exercise of its sole and absolute discretion
and, if and to the extent that any Facility 1 Acceptance is created,
such Facility 1 Acceptance may only be discounted by the Acceptance
Agent in accordance with the Funding Agreement which shall be in full
force and effect and (c) on the date of the creation by Bankers Trust
of any Facility 1 Acceptance, Bankers Trust is only obligated to
deliver such Facility 1 Acceptance as set forth in the Request for
Acceptance and to pay such Facility 1 Acceptance in accordance with
its terms.
SECTION 2.2 METHOD OF BORROWING AND OF CONVERSIONS/CONTINUATIONS;
CREATION OF ACCEPTANCES.
(a) Whenever the Borrowers desire to make a Facility 1 Borrowing,
a Facility 2 Borrowing or a Swing-Line Borrowing hereunder, to convert any
Facility 1 Loan pursuant to Section 2.3 or to continue any Facility 1 Loan for
an additional Eurodollar Interest Period pursuant to Section 2.3, an Authorized
Officer shall deliver to the Agent written notice of such proposed Borrowing,
conversion or continuation (a "Notice of Borrowing" or "Notice of
Conversion/Continuation," as the case may be), each such notice to be given (x)
prior to 12:00 noon (New York City time) on the date of such proposed Borrowing
or conversion, in the case of a Borrowing of Fed Funds Loans or a conversion of
Eurodollar Loans into Fed Funds Loans; and (y) prior to 12:00 noon (New York
City time) on the third Eurodollar Business Day before the date of such
proposed Borrowing, conversion or continuation (which date shall be a
Eurodollar Business Day), in the case of a Borrowing of Eurodollar Loans, a
conversion of Fed Funds Loans into Eurodollar Loans or a continuation of
Eurodollar Loans for an additional Eurodollar Interest Period. Each such
notice shall be irrevocable and shall be in the form of Exhibit I or J, as the
case may be. Notwithstanding any other provision hereof to the contrary, (i)
no more than four (4) Eurodollar Interest Periods for Facility 1 Loans may be
in effect hereunder at any time; and (ii) no Facility 1 Borrowing of Eurodollar
Loans shall be in an aggregate principal amount of less than $1,000,000.
(b) Whenever the Borrowers desire to have Bankers Trust accept a
Draft the Borrowers shall, prior to 12:00 noon (New York City time) on the
Business Day prior to the proposed date of creation of such Facility 1
Acceptance, deliver to (i) Bankers Trust a notice, in substantially the form of
Exhibit B-1 hereto ("Request for Acceptance"), specifying the information
necessary to complete the relevant Draft or Drafts, and (ii) the Collateral
Agent, Collateral of the type required for the Facility 1 Borrowing Base so
that the condition precedent set forth in Section 3.1(b)(iii) hereof shall be
satisfied with respect to the Facility 1 Acceptance to be created. Not later
than 12:00 noon (New York City time) on the Business Day specified by the
Borrowers in the Request for Acceptance and upon fulfilment of the applicable
conditions set forth in Article III, Bankers Trust, will, if it chooses to do
so in the exercise of its sole and absolute discretion and in accordance with
such Request for Acceptance, (x) fill in the date, amount and tenor of a Draft
or Drafts in such denominations as the Borrowers shall specify in such Request
for Acceptance, (y) accept such Draft or Drafts at its address
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referred to in Section 8.1 and (z) deliver such Facility 1 Acceptance or
Facility 1 Acceptances as set forth in the Request for Acceptance.
(c) Without in any way limiting the Borrowers obligation to
deliver to the Agent a copy of any written Notice of Borrowing, Notice of
Conversion/Continuation or Request for Acceptance, the Agent may act without
liability upon the basis of any telephonic Notice of Borrowing, Notice of
Conversion/Continuation or Request for Acceptance believed by the Agent in good
faith to be from an Authorized Officer prior to receipt of written
confirmation. In each such case, the Borrowers hereby waive the right to
dispute the Agent's record of the terms of such telephonic notice. An
Authorized Officer shall promptly confirm in writing any Notice of Borrowing,
Notice of Conversion/Continuation or Request for Acceptance given by telephone.
(d) On the date of receipt of any Notice of Borrowing or Notice of
Conversion/Continuation), the Agent shall promptly give (and in any event by
1:00 p.m. (New York City time)) each Lender with a related Commitment
telefacsimile notice of each proposed Facility 1 Borrowing or Facility 2
Borrowing, such Lender's proportionate share thereof, each proposed conversion
or continuation and any other matters covered by the Notice of Borrowing or
Notice of Conversion/Continuation. Upon the creation or exchange of an a
Facility 1 Acceptance by Bankers Trust, the Agent shall promptly give each
Acceptance Participant telefacsimile notice of the creation or exchange of any
Facility 1 Acceptance and any other matters set forth in the Request for
Acceptance relating to the Facility 1 Acceptance. The Agent shall not be
required to notify any Lender (other than Bankers Trust) of a Swing-Line
Borrowing.
(e) Unless otherwise specified in a Notice of Borrowing, each Loan
to be made as part of a Facility 1 Borrowing shall be made as a Fed Funds Loan.
If a timely notice as specified in Section 2.2(a) is not received from the
Borrowers prior to the expiration of any Eurodollar Interest Period for any
outstanding Eurodollar Loan, the Borrowers shall be deemed to have irrevocably
elected to convert such Loan into a Fed Funds Loan. The Agent will endeavor to
notify the Borrowers prior to the expiration of any Eurodollar Interest Period
but shall have no liability for failure to provide such notice.
(f) By delivering a Notice of Conversion/Continuation to the Agent
hereunder of the continuation of any Eurodollar Loans for an additional
Eurodollar Interest Period or the conversion of any outstanding Loans to
Eurodollar Loans, or by delivering a notice in accordance with Section 2.3(b)
for the exchange of any Facility 1 Acceptances, the Borrowers shall be deemed
to have represented and warranted that no Potential Default or Event of Default
has occurred and is continuing.
SECTION 2.3 CONVERSIONS/CONTINUATIONS OF LOANS; EXCHANGE OF ACCEPTANCES.
(a) Subject to the terms and conditions hereof and in accordance
with the procedures for conversions and continuations and the other provisions
set forth in Section 2.2, each Facility 1 Lender agrees to convert outstanding
Facility 1 Loans that are Fed Funds Loans into Eurodollar Loans and Eurodollar
Loans into Fed Funds Loans and to continue Facility 1 Loans that are Eurodollar
Loans for an additional Eurodollar Interest Period, in each case in an
aggregate principal amount not to exceed the principal amount of the Fed Funds
Loans or Eurodollar Loans, as the case
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may be, being converted or Eurodollar Loans, as the case may be, being
continued; provided that no Lender shall convert any Facility 1 Loan into a
Eurodollar Loan or continue any Eurodollar Loan for an additional Eurodollar
Interest Period if a Potential Default or an Event of Default has occurred and
is continuing.
(b) Subject to the terms and conditions hereof and in accordance
with the procedures for accepting Drafts set forth in Section 2.1(f)(iii) and
the other procedures for creating Facility 1 Acceptances and exchanges thereof
set forth in Section 2.2, Bankers Trust, if it chooses to do so in the exercise
of its sole and absolute discretion, shall exchange any existing Facility 1
Acceptance (an "Old Acceptance") for a new Acceptance (a "New Acceptance") on
the maturity date of such Old Acceptance, provided that (i) all conditions
precedent to the issuance of a Facility 1 Acceptance set forth in Section
2.1(f) have been satisfied and (ii) the Borrowers shall have paid to Bankers
Trust the amounts required to be paid pursuant to Section 2.8(f). If the
Borrowers desire to, or if the Borrowers have requested the Acceptance Agent
to, have Bankers Trust exchange an Old Acceptance for a New Acceptance on the
maturity date of such Old Acceptance, the Borrowers or the Acceptance Agent, as
applicable, shall give Bankers Trust notice thereof no later than 12:00 noon
(New York City time) two (2) Business Days prior to the maturity date of the
Old Acceptance being exchanged. The Borrowers hereby authorize Bankers Trust to
replace an Old Acceptance with a New Acceptance if Bankers Trust receives
authorization therefor from the Acceptance Agent pursuant to the Funding
Agreement. The requirements governing the issuance by Bankers Trust of a New
Acceptance shall be the same requirements for the issuance of a Facility 1
Acceptance hereunder except that prior to the issuance of the New Acceptance
(i) the Borrowers or the Acceptance Agent, as applicable, shall deliver the Old
Acceptance marked "cancelled" or "paid" to Bankers Trust, at the Acceptance
Desk, 12th Floor, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or to such other
place as Bankers Trust directs, and (ii) the Borrowers shall have paid to
Bankers Trust the amounts required pursuant to Section 2.8(f).
SECTION 2.4 DISBURSEMENT OF FUNDS; BANK ACCEPTANCE PARTICIPANTS.
(a) No later than 2:00 p.m. (New York City time) on the date of
each Facility 1 Borrowing and Facility 2 Borrowing, each Facility 1 Lender or
Facility 2 Lender, as the case may be, will make available to the Agent the
full amount of such Lender's pro rata share of such Borrowing, in immediately
available funds, by wire transfer of such funds to the Agent at the Payment
Office. Unless the Agent determines that any applicable condition in Article
III has not been satisfied, the Agent shall make the funds so received from the
Lenders available to the Borrowers by wire transfer of such funds to such
account as the Borrowers through the Agent may direct in writing for such
purpose. If a Facility 1 Borrowing or a Facility 2 Borrowing does not occur on
the requested date because any condition precedent herein specified has not
been satisfied, the Agent shall so notify the affected Lenders promptly and
shall return the amounts so received to the respective Lenders.
(b) Unless the Agent has been notified by any Facility 1 Lender or
Facility 2 Lender, as the case may be, before 2:00 p.m. (New York City time) on
the date of a proposed Facility 1 Borrowing or Facility 2 Borrowing, as the
case may be, that such Lender does not intend to make available to the Agent on
such date such Lender's portion of such Facility 1 Borrowing or Facility 2
Borrowing, the Agent may assume that such Lender will make such amount
available to the Agent
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on such date and the Agent may (but shall not be obligated to) make available
to the Borrowers a corresponding amount. If such corresponding amount is not
in fact made available to the Agent by such Lender (a "Defaulting Lender") on
such date, the Agent shall be entitled to recover such corresponding amount on
demand from such Defaulting Lender, together with interest at the overnight
Federal Funds Rate for each day until paid. A Defaulting Lender shall be
deemed to have assigned to the Agent the right to receive any and all payments
due to it in respect of the Obligations until the sum of such payments received
by the Agent is equal to the amount owed to the Agent by such Defaulting Lender
pursuant to the preceding sentence. The foregoing assignment shall be deemed
to be a power coupled with an interest and shall be absolute and irrevocable.
Nothing in this subsection shall be deemed to relieve any Lender from its
obligation to fulfill its obligation to make Loans hereunder or to prejudice
any rights that the Borrowers, the Agent or any Lender may have against any
Defaulting Lender hereunder.
(c) No later than 3:00 p.m. (New York City time) on the date of
each Swing-Line Borrowing, Bankers Trust shall, unless it has elected not to
make a Swing-Line Loan pursuant to the related Notice of Borrowing, or unless
it determines that any applicable condition in Article III has not been
satisfied, make the full amount of such Swing-Line Borrowing available to the
Borrowers by wire transfer of such funds such account as the Borrowers may
direct in writing for such purpose.
(d) No later than 12:00 noon (New York City time) on any Business
Day, the Agent shall, upon Bankers Trust's request, notify each Facility 1
Lender of the aggregate principal amount of Swing-Line Loans that are
outstanding and the amount of Facility 1 Loans required to be made by each
Facility 1 Lender (including Bankers Trust) to refinance such outstanding
Swing-Line Loans (which amount shall be equal to each Facility 1 Lender's pro
rata share of such outstanding Swing-Line Loan and which notice shall be deemed
automatically given upon the occurrence of an Event of Default under 6.1(h)).
Interest on the Swing-Line Loans being refinanced shall be payable by the
Borrowers in accordance with Section 2.6. Bankers Trust may request that the
Swing-Line Loans be refinanced pursuant to this Section 2.4(d) on any Business
Day.
(e) No later than 2:00 p.m. (New York City time) on each date that
the Agent gives notices to the Facility 1 Lenders of the refinancing of
Swing-Line Loans pursuant to Section 2.4(d), each Facility 1 Lender will make
available to the Agent for payment to Bankers Trust the full amount of such
Lender's pro rata share of the outstanding amount of Swing-Line Loans being
refinanced. Each amount made available to the Agent pursuant to this Section
2.4(e) (including Bankers Trust's pro rata share of such amount) shall be
deemed a Facility 1 Loan. Each such Swing-Line Loan being refinanced as a
Facility 1 Loan shall be Fed Funds Loan. The proceeds of Facility 1 Loans made
pursuant to this Section 2.4(e) shall be paid to the Agent (and not to the
Borrowers) and then paid over by the Agent to Bankers Trust, to be applied to
the outstanding Swing-Line Loans. The Borrowers authorize the Agent to charge
any account maintained by the Borrowers with the Agent in order to immediately
pay the Agent the amount of such outstanding Swing-Line Loans, to the extent
amounts received from the Facility 1 Lenders are insufficient to repay in full
the outstanding Swing-Line Loans to be refinanced. If any portion of any
amount paid to the Agent by the Borrowers pursuant to this Section 2.4(e)
(other than any amounts received by the Agent pursuant to the preceding
sentence) should be recovered by or on behalf of the Borrowers from the Agent
or Bankers Trust in bankruptcy or otherwise, the loss of the amount so
recovered shall be ratably shared among all the Facility 1 Lenders. In the
event that a refinancing of the Swing-Line
▇▇
- ▇▇ -
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ made for any reason on any date required by Bankers Trust, each
Facility 1 Lender hereby agrees that it shall immediately purchase from Bankers
Trust (without recourse or warranty) such assignment of the outstanding Swing-
Line Loans as shall be necessary to cause the Facility 1 Lenders to share in
such Swing-Line Loans ratably based on their respective pro rata Facility 1
Commitments; provided that all interest payable on such Swing-Line Loans shall
be for the account of Bankers Trust until the date the respective assignment is
purchased and, to the extent attributable to the purchased assignment, shall be
for the account of the Facility 1 Lender purchasing the assignment from and
after the date of such purchase. Each Facility 1 Lender's obligation to make
Facility 1 Loans or purchase assignments pursuant to this Section 2.4(e) shall
be absolute and unconditional and shall not be affected by any circumstance,
including, without limitation, (1) any setoff, counterclaim, recoupment,
defense or other right that such Facility 1 Lender may have against the Agent,
Bankers Trust, any Lender, the Borrowers or any other Person for any reason
whatsoever; (2) the occurrence or continuance of a Potential Default or Event
of Default; (3) any adverse change in the condition (financial or otherwise) of
the Borrowers ; (4) any breach of this Agreement or any other Loan Document by
the Borrowers, the Agent or any Lender; or (5) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing
including those described in Section 2.4(k); provided that in no event shall a
Facility 1 Lender be obligated to make a Facility 1 Loan pursuant to this
Section 2.4(e) if after giving effect thereto, the outstanding principal amount
of such Facility 1 Lender's Facility 1 Loans plus its pro rata share of any
Swing-Line Loans remaining outstanding plus its pro rata share of the aggregate
face amount of Facility 1 Acceptances outstanding would exceed its Facility 1
Commitment. If any Lender fails to make the full amount of its Facility 1 Loan
available to the Agent pursuant to this Section 2.4(e), Bankers Trust shall be
entitled to recover such corresponding amount on demand from such Lender
together with interest for each day until paid at the overnight Fed Funds Rate.
Such Lender shall be deemed to have assigned to Bankers Trust the right to
receive any and all payments due to it in respect of the Obligations until the
sum of such payments received by the Agent and paid over to Bankers Trust is
equal to the amount owed to Bankers Trust by such Lender pursuant to the
preceding sentence. The foregoing assignment shall be deemed to be a power
coupled with an interest and shall be absolute and irrevocable.
(f) No Lender shall be responsible for any default by any other
Lender in its obligation to make Loans hereunder, and each Lender shall be
obligated to make the Loans on the terms set forth herein, regardless of the
failure of any other Lender to fulfill its obligations hereunder. If any
Facility 1 Lender fails to make available its pro rata share of any Facility 1
Borrowing or any Facility 2 Lender fails to make available its pro rata share
of any Facility 2 Borrowing (and the Agent does not advance such Lender's share
to the Borrowers pursuant to subsection (b) above), then the Borrowers may,
subject to all of the terms and conditions set forth in Sections 2.1 and 2.2,
make additional Facility 1 Borrowings or Facility 2 Borrowings, as the case may
be, hereunder to cover the unfunded share of the original Facility 1 Borrowing
or Facility 2 Borrowing.
(g) Immediately upon the creation by Bankers Trust of any Facility
1 Acceptance, Bankers Trust shall be deemed to have sold and transferred to
each other Facility 1 Lender (each such other Lender, in its capacity as an
obligor with respect to any Facility 1 Acceptance, an "Acceptance
Participant"), and each such Acceptance Participant shall be deemed irrevocably
and unconditionally to have purchased and received from Bankers Trust, without
recourse or warranty, an undivided interest and participation (each a
"participation"), to the extent of such Acceptance
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Participant's pro rata share (based on the ratio that such Acceptance
Participant's pro rata share of the Facility 1 Commitment bears to the total
amount of Facility 1 Commitments) in such Facility 1 Acceptance, each
substitute Acceptance and the obligations of the Borrowers under this Agreement
with respect thereto, and any security therefor or guaranty pertaining thereto
(although Administrative Fees will be paid directly to the Agent for the
ratable account of the Acceptance Participants as provided in Section 2.10(d)).
(h) Bankers Trust shall have no liability for any action taken or
omitted to be taken by Bankers Trust under or in connection with any Acceptance
if taken or omitted in the absence of gross negligence or willful misconduct.
(i) In the event that Bankers Trust makes any payment under any
Facility 1 Acceptance and the Borrowers shall not have reimbursed such amount
in full to Bankers Trust on the maturity date for such Facility 1 Acceptance
pursuant to Section 2.5(b), Bankers Trust shall promptly notify the Agent, who
shall immediately notify each Acceptance Participant of such failure, and each
Acceptance Participant shall immediately and unconditionally pay to the Agent
for the account of Bankers Trust, the amount of such Acceptance Participant's
pro rata share (as described above in Section 2.4(g)) of such unreimbursed
payment in U.S. Dollars and in same day funds. If and to the extent such
Acceptance Participant shall not have made such payment, Bankers Trust shall be
entitled to recover such corresponding amount on demand from such Lender
together with interest thereon for each day until paid at the Federal Funds
Rate in effect from time to time. Such Acceptance Participant shall be deemed
to have assigned to Bankers Trust the right to receive any and all payments due
to it in respect of the Acceptance Obligations until the sum of such payments
received by the Agent and paid over to Bankers Trust is equal to the amount
owed to Bankers Trust by such Acceptance Participant pursuant to the preceding
sentence. The foregoing assignment shall be deemed to be coupled with an
interest and shall be absolute and irrevocable. No Acceptance Participant
shall be responsible for the failure of any other Acceptance Participant to
make available to the Agent such other Acceptance Participant's pro rata share
of any such payment, and each Acceptance Participant shall be obligated to make
its pro rata share of payments under this Section 2.4(i) on the terms set forth
herein, regardless of the failure of any other Acceptance Participant to
fulfill its obligations hereunder.
(j) [Reserved.]
(k) The obligations of the Acceptance Participants to make
payments to the Agent for the account of Bankers Trust with respect to Facility
1 Acceptances, and the Acceptance Obligations of the Borrower, shall be
absolute and irrevocable and not subject to counterclaim, set-off or other
defense or any other qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, set-off, defense or other
right which the Borrowers or any Lender may have at any time against
Bankers Trust, any transferee of any Facility 1
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Acceptance (or any Person for whom any such transferee may be acting),
the Agent, Bankers Trust, any Lender or Acceptance Participant, or
other Person, whether in connection with this Agreement, any Facility
1 Acceptance, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the
Borrowers and the holder of a Facility 1 Acceptance);
(iii) any Facility 1 Acceptance proving to be forged or
fraudulent;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents;
(v) the occurrence of any Potential Default or Event of
Default; or
(vi) the failure of any condition precedent set forth in
Article III hereof to have been satisfied at the time of the creation
of any Facility 1 Acceptance.
SECTION 2.5 NOTES; ACCEPTANCE OBLIGATIONS.
(a) Each Borrower's joint and several obligation to pay the
principal of and interest on the Facility 1 Loans made by each Facility 1
Lender and Swing-Line Loans made by Bankers Trust shall be evidenced by a
promissory note (each a "Facility 1 Note" and collectively the "Facility 1
Notes") substantially in the form of Exhibit A-1, with blanks appropriately
completed in conformity therewith and payable to the order of such Facility 1
Lender. Each Borrower's joint and several obligation to pay the principal of
and interest on the Facility 2 Loans made by each Facility 2 Lender shall be
evidenced by a promissory note (each a "Facility 2 Note and collectively the
"Facility 2 Notes") substantially in the form of Exhibit A-2, with blanks
appropriately completed in conformity therewith and payable to the order of
such Facility 2 Lender. Each Lender shall, and is hereby authorized by the
Borrowers to, endorse on the schedule attached to the applicable Note delivered
to such Lender (or on a continuation of such schedule attached to such Note and
made a part thereof), or otherwise to record in such Lender's internal records,
an appropriate notation evidencing the date and amount of each Loan of the
related Type from such Lender, each payment and prepayment of principal of any
such Loan, each payment of interest on any such Loan, and applicable interest
rates and Eurodollar Interest Periods and other information with respect
thereto, and any such recordation shall absent manifest error constitute prima
facie evidence of the accuracy of the information so recorded; provided that
the failure of any Lender to make such a notation or any error therein shall
not affect the joint and several Obligations of the Borrowers, including the
joint and several Obligation of the Borrowers to repay the Loans made by such
Lender in accordance with the terms of this Agreement and the applicable Notes.
(b) The Borrowers hereby agree to reimburse Bankers Trust, on the
maturity date for each Facility 1 Acceptance, an amount equal to the face
amount of such Facility 1 Acceptance (the obligation of the Borrowers under
this Section 2.5(b) and under Sections 2.6(h) and 2.10(d) with respect to any
Facility 1 Acceptance are referenced herein as the "Acceptance Obligations").
The Acceptance Obligations of the Borrowers are joint and several and absolute
and unconditional irrespective of the value, genuineness, validity, regularity
or enforceability of any Facility 1 Acceptance or any other matter described in
Section 2.4(k), it being the intent that the obligations
40
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of the Borrowers hereunder shall be absolute and unconditional under any and
all circumstances. The Borrowers hereby expressly waive diligence,
presentment, demand of payment, protest and all other formalities of any kind
with respect to any Acceptance Obligation.
(c) To enable Bankers Trust to create Facility 1 Acceptances in
the manner specified in Section 2.2(b), the Borrowers shall supply Bankers
Trust, upon the Borrower's execution of this Agreement and thereafter forthwith
upon request by Bankers Trust, with a sufficient number of blank Drafts as
Bankers Trust may reasonably request, duly executed by the Borrowers. In that
connection, the Borrowers hereby irrevocably appoint Bankers Trust and each of
its authorized signatories as attorneys-in-fact of the Borrowers for the
purpose of completing blank Drafts in accordance with this Agreement. Bankers
Trust shall hold each Draft supplied in safekeeping to be filled in and
completed in accordance with this Agreement. Each Draft completed by Bankers
Trust pursuant to any written, telexed, telecopied or cable transmission or
oral instruction purported to be delivered by or on behalf of the Borrowers
shall be duly drawn, executed and delivered on behalf of the Borrowers for the
purposes of this Agreement. Bankers Trust shall incur no liability to the
Borrowers in acting on any such transmission or instruction that Bankers Trust
believes in good faith to have been given by a Person authorized to act on
behalf of the Borrowers or otherwise acting in good faith under this Agreement
without gross negligence.
SECTION 2.6 INTEREST.
(a) [Reserved]
(b) The Borrowers agree to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan for each day during the Eurodollar
Interest Period applicable thereto at a rate per annum equal to 0.95% per annum
plus the Eurodollar Rate for such Eurodollar Interest Period.
(c) The Borrowers agree to pay interest in respect of the unpaid
principal amount of each Fed Funds Loan for each day such Fed Funds Loan is
outstanding at a rate per annum equal to (i) 1.07% per annum plus the Federal
Funds Rate if such Fed Funds Loan is a Facility 1 Loan or a Swing-Line Loan and
(ii) one and five-eighths percent (1.625%) per annum plus the Federal Funds
Rate if such Fed Funds Loan is a Facility 2 Loan.
(d) Overdue principal and interest in respect of each Loan and all
other overdue amounts owing hereunder shall bear interest for each day that
such amounts are overdue (after as well as before judgment) at a rate per annum
equal to two and one-quarter percent (2.25%) per annum plus the Prime Rate (the
"Default Rate").
(e) Interest on each Loan shall accrue from and including the
Borrowing Date thereof to but excluding the date of any repayment thereof and
shall be payable (i) on or before the third (3rd) Business Day after receipt of
the billing statement referred to in clause (f) below, (ii) on any prepayment
in full of all of any Lender's outstanding Loans, (iii) at maturity (whether by
acceleration or otherwise) and (iv) after maturity, on demand.
(f) The Agent shall deliver to the Borrowers one interest billing
statement for each month on or before the third (3rd) Business Day of the next
succeeding month, which interest billing
41
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statement shall set forth the interest accrued on the Loans for such month;
provided that any failure or delay in delivering such interest billing
statement or any inaccuracy therein shall not affect the Obligations.
(g) The Borrowers hereby promise to pay to Bankers Trust and the
other Lenders interest on any Acceptance Obligation, and on any other amount
payable by the Borrowers hereunder with respect to any Acceptance Obligation,
that shall not be paid in full when due (whether at stated maturity, by
acceleration or otherwise), for the period from and including the due date
thereof to but excluding the date the same is paid in full, at a rate per annum
equal to the Default Rate.
SECTION 2.7 TERMINATION OR REDUCTION OF COMMITMENTS.
(a) The Facility 1 Commitments shall automatically terminate on
the Maturity Date, subject to earlier termination as set forth in Section 2.7
(b) or pursuant to Section 6.1. The Facility 1 Commitments may not be reduced
in part by the Borrowers, but may be terminated in their entirety at any time
by the Borrowers upon at least fifteen (15) days prior irrevocable written
notice to the Agent.
(b) The Facility 2 Commitments shall automatically terminate on
the earliest of: (i) Maturity Date, and (ii) the date on which the Facility 1
Commitments terminate, subject to earlier termination pursuant to Section 6.1.
The Facility 2 Commitments may not be reduced in part by the Borrowers, but may
be terminated in their entirety at any time by the Borrowers upon at least
fifteen (15) days prior irrevocable written notice to the Agent; provided,
that upon delivery of a notice of termination of the Facility 2 Commitments by
the Borrowers, the parties to this Agreement agree to discuss the terms and
conditions upon which this Agreement and the Facility 1 Commitments shall
remain in effect; and provided further, that if the parties shall fail to agree
upon terms and conditions that are satisfactory to the Lenders in their sole
and absolute discretion, then the Facility 1 Commitments shall terminate thirty
(30) days following delivery by the Borrowers of the notice of termination of
the Facility 2 Commitments (which thirty (30) period may be extended to sixty
(60) days in the sole and absolute discretion of the Lenders).
SECTION 2.8 MANDATORY REPAYMENTS.
(a) The Borrowers shall repay all outstanding Facility 1 Loans and
Acceptance Obligations relating to Facility 1 Acceptances (whether matured or
unmatured) on the earlier to occur of the termination of the Facility 1
Commitments and the Maturity Date. Payments received on account of Acceptance
Obligations prior to the maturity date of the Facility 1 Acceptance relating
thereto shall be applied in accordance with Section 2.11(d).
(b) The Borrowers shall repay all outstanding Facility 2 Loans on
the earlier to occur of the termination of the Facility 2 Commitments and the
Maturity Date. Additionally, the Borrowers shall repay all outstanding
Facility 2 Tranche A Loans on the seventh (7th) calendar day of each month, so
that no Facility 2 Tranche A Loans remain outstanding during the period
commencing on the seventh (7th) calendar day and ending on the twelfth (12th)
calendar day of each month.
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(c) On any date upon which the aggregate principal amount of the
outstanding Facility 1 Loans, Swing-Line Loans and/or the aggregate face amount
of Facility 1 Acceptances exceeds the Facility 1 Maximum Amount, the Borrowers
shall repay on such date the aggregate principal amount of the Facility 1
Loans, Swing-Line Loans and/or Acceptance Obligations or, provided no Potential
Default or Event of Default exists, deliver additional Collateral of the type
required for the Facility 1 Borrowing Base, as shall be necessary so that the
aggregate principal amount of outstanding Facility 1 Loans and Swing-Line Loans
and the aggregate face amount of Facility 1 Acceptances outstanding does not
exceed the Facility 1 Maximum Amount. On any date upon which the aggregate
principal amount of the outstanding Facility 2 Tranche A Loans exceeds the
Facility 2 Tranche A Maximum Amount, the Borrowers shall repay on such date the
aggregate principal amount of the Facility 2 Tranche A Loans or, provided no
Potential Default or Event of Default exists, deliver additional Collateral of
the type required for the Facility 2 Tranche A Borrowing Base, as shall be
necessary so that the aggregate principal amount of outstanding Facility 2
Tranche A Loans does not exceed the Facility 2 Tranche A Maximum Amount. On
any date upon which the aggregate principal amount of the outstanding Facility
2 Tranche B Loans exceeds the Facility 2 Tranche B Maximum Amount , the
Borrowers shall repay on such date the aggregate principal amount of the
Facility 2 Tranche B Loans as shall be necessary so that the aggregate
principal amount of outstanding Facility 2 Tranche B Loans does not exceed the
Facility ▇ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇. ▇▇ any date upon which the aggregate
principal amount of the outstanding Facility 2 Tranche C Loans exceeds the
Facility 2 Tranche C Maximum Amount, the Borrowers shall repay on such date the
aggregate principal amount of the Facility 2 Tranche C Loans as shall be
necessary so that the aggregate principal amount of outstanding Facility 2
Tranche C Loans does not exceed the Facility 2 Tranche C Maximum Amount.
(d) [Reserved]
(e) [Reserved]
(f) If an Old Acceptance is being exchanged for a New Acceptance
in accordance with Section 2.3(b), the Borrowers shall repay on the date of
such exchange an amount equal to (i) the Discount Expense if the face amount of
the New Acceptance equals or exceeds the face amount of the Old Acceptance and
(ii) the Discount Expense plus the Required Acceptance Payment if the face
amount of the New Acceptance is less than the face amount of the Old
Acceptance. As used herein, "Discount Expense" shall mean the face amount of
the Old Acceptance less the discount proceeds of such Old Acceptance received
by the Borrowers on the date of discount of the Old Acceptance. As used herein
"Required Acceptance Payment" shall mean the difference between (x)(I) the face
amount of the Old Acceptance less (II) the Discount Expense relating thereto
and (y)(I) the face amount of the New Acceptance less (II) the Discount Expense
relating thereto.
(g) Each repayment of Loans of a certain Type under this Section
2.8 shall be allocated among the Lenders in accordance with the aggregate
outstanding principal amounts of their respective Loans of such Type. All
repayments of the Facility 1 Loans of any Facility 1 Lender under this Section
2.8 shall be applied first to such Lender's Facility 1 Loans that are Fed Funds
Loans and second, to such Lender's Facility 1 Loans that are Eurodollar Loans.
All repayments of Loans under this Section 2.8 shall be without premium or
penalty, except that any repayment of Eurodollar Loans shall be subject to the
provisions of Section 2.14. Interest shall be payable in
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accordance with the provisions of Section 2.6. Payments received on account of
Acceptance Obligations prior to the maturity date of the Acceptance relating
thereto shall be applied in accordance with Section 2.11(d). Any prepayment on
account of outstanding Acceptance Obligations prior to the maturity date of the
Facility 1 Acceptance relating thereto required under Section 2.8 shall be held
by Bankers Trust in accordance with Section 2.11(d), provided that such
prepayment shall include payment of the Administrative Fees due under Section
2.10(d), which Administrative Fees shall be due in the full amount as if the
Acceptance Obligations were not being prepaid (and regardless of whether less
than the aggregate face amount of the applicable Facility 1 Acceptance is being
prepaid) and were being paid on the date of the maturity of the Facility 1
Acceptance relating thereto.
SECTION 2.9 OPTIONAL PREPAYMENTS.
The Borrowers shall have the right at any time and from time
to time to prepay outstanding Loans of any Type, in whole or in part, upon one
(1) Business Days prior written notice to the Agent, in the case of Eurodollar
Loans, and without prior notice in the case of all other Loans; provided that
each partial prepayment of any Loan (other than a Swing-Line Loan, which may be
prepaid in any amount) shall be in an aggregate principal amount of $100,000 or
any multiple of $50,000 in excess thereof; and provided further, that the
Borrowers shall not prepay any Facility 1 Loans so long as any Swing-Line Loans
are outstanding. The Borrowers shall, at the time of making such prepayment,
designate whether it is a prepayment of Facility 1 Loans, Facility 2 Tranche A
Loans, Facility 2 Tranche B Loans or Facility 2 Tranche C Loans. If the
Borrowers fail to make such a designation, any funds received as a prepayment
pursuant to this Section 2.9 shall be applied first, to Facility 2 Tranche B
Loans then outstanding; second, to Facility 2 Tranche A Loans then outstanding;
third to Facility 2 Tranche C Loans then outstanding; and fourth, to Facility 1
Loans then outstanding. If such prepayment has not been designated by the
Borrowers, the Agent shall endeavor to contact the Borrowers for prepayment
instructions before applying the prepayment as noted herein but the Agent shall
not be liable for failure to so contact the Borrowers. Each prepayment of
Loans of a certain Type under this Section 2.9 shall be allocated among the
Lenders in accordance with the aggregate outstanding principal amounts of their
respective Loans of such Type. All prepayments of the Facility 1 Loans of any
Facility 1 Lender under this Section 2.9 shall be applied first, to such Lender
s Facility 1 Loans that are Fed Funds Loans, and second, to such Lender s
Facility 1 Loans that are Eurodollar Loans. All prepayments of Loans under
this Section 2.9 shall be without premium or penalty, except that any
prepayment of Eurodollar Loans shall be subject to the provisions of Section
2.14. Interest shall be payable upon such prepayment in accordance with the
provisions of Section 2.6.
SECTION 2.10 FEES.
(a) The Borrowers agree to pay to the agent for the account of
each Facility 1 Lender a facility fee at a rate per annum equal to 0.16% on the
amount of such Lender's Facility 1 Commitment (whether used or unused). The
Borrowers agree to pay to the Agent for the account of each Facility 2 Lender a
facility fee at a rate per annum equal to 0.20% on the amount of such Lender s
Facility 2 Commitment (whether used or unused). Such fees shall be deemed to
be earned in full upon the Amendment Effective Date and shall be payable in
advance on the Amendment Effective Date and thereafter in quarterly
installments on the last Business Day of each March, June,
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September and December, commencing December 31, 1996; provided that if the
Facility 1 Commitments or the Facility 2 Commitments are terminated at any time
prior to the Maturity Date, each remaining unpaid quarterly installment of the
respective fees shall be paid in full on the date of such termination.
(b) [Reserved]
(c) [Reserved]
(d) The Borrowers agree to pay to the Agent for the account of
each Facility 1 Lender a fee in respect of each Facility 1 Lender's pro rata
share of the face amount of each applicable Facility 1 Acceptance (the
"Administrative Fee"), computed for each day such Facility 1 Acceptance is
outstanding at a rate equal to one percent (1%) per annum of the face amount of
each Facility 1 Acceptance. The Administrative Fees relating to a Facility 1
Acceptance shall be due and payable on the maturity date of such Acceptance.
(e) The Borrowers agree to pay to the Agent, for its own account,
an agency fee (the "Agency Fee") in the amount and on the dates separately
agreed to by the Agent and the Borrowers.
(f) The fees set forth in this Section 2.10, once paid, shall not
be refundable under any circumstances.
SECTION 2.11 PAYMENTS, ETC,
(a) Except as otherwise specifically provided herein, all payments
by the Borrowers under this Agreement (including payments with respect to
Acceptance Obligations) shall be made without defense, set-off or counterclaim
to the Agent not later than 1:00 p.m. (New York City time) on the date when
due, it being expressly agreed and understood that if a payment is received
after 1:00 p.m. (New York City time) by the Agent, such payment will be deemed
to have been made on the next succeeding Business Day and interest thereon
shall be payable at the then applicable rate during such extension; provided
that if the Agent receives the federal wire confirmation number with respect to
such payment before 1:00 p.m. (New York City time) on the date when such
payment is due, and the payment is actually received and credited for value to
the appropriate account at Bankers Trust before the close of business on such
due date, then the payment will be deemed to be made on such due date. All
payments hereunder shall be made in U.S. Dollars in immediately available funds
at the Payment Office. The Agent will promptly after receipt of each such
payment (and in any event by the close of business on the day on which such
funds are received or deemed to have been received) distribute funds in the
form received relating to the payment of (i) principal or interest on any Type
of Loan to the Lenders with Loans of the corresponding Type ratably in
accordance with the aggregate principal amount of the Loans of such Type of
such Lenders, (ii) payments with respect to Acceptance Obligations to the Cash
Collateral Account if the Acceptances to which the payment relates have not
matured, to the Acceptance Agent if the Facility 1 Acceptances to which the
payment relates have matured unless Bankers Trust has already made payment to
the Acceptance Agent, and otherwise to Bankers Trust or to the Lenders entitled
thereto if any Lender has reimbursed Banker's Trust for such Lender s
obligation as an Acceptance Participant, (iii) Fees with respect to any Type of
Commitment or with respect to any Acceptance
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Obligation ratably to Lenders with Commitments of the corresponding Type or to
Acceptance Participants with a pro rata share of liability relating to Facility
1 Acceptances, as applicable and (iv) any other amount payable to any Lender to
such Lender.
(b) Whenever any payment to be made hereunder or under any Note
shall be stated to be due on a day that is not a Business Day, the due date
thereof shall be extended to the next succeeding Business Day and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
(c) All computations of interest and Fees shall be made on the
basis of a year of three hundred and sixty (360) days for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such interest or Fees are payable. Each determination by the
Agent of an interest rate or Fee hereunder shall be conclusive and binding
absent manifest error.
(d) Any payments received by Bankers Trust on account of
Acceptance Obligations as a result of a mandatory repayment of such Acceptance
Obligations under the Loan Documents prior to the maturity date of the Facility
1 Acceptance to which such Acceptance Obligations relate shall be held by
Bankers Trust as collateral security for the Obligations, including the
Acceptance Obligations, in a Cash Collateral Account pursuant to the Cash
Collateral Agreement.
(e) Acceptance Obligations (whether upon acceleration, upon any
date that the Facility 1 Commitments are terminated pursuant to Section 2.7(a)
or otherwise) or the occurrence and continuance of a Potential Default or an
Event of Default, all amounts received on any day by the Agent hereunder in
respect of principal of Facility 1 Loans or Swing- Line Loans or the Acceptance
Obligations or under the Warehousing Security Agreement, including amounts
received by the Agent from the Facility 1 Settlement Account, shall be applied
by the Agent as follows: first, to Bankers Trust, to repay the aggregate
principal amount of Swing-Line Loans outstanding on such day; second, to
Bankers Trust to the extent of any amounts due and payable on account of
matured Acceptance Obligations or otherwise payable pursuant to Section 2.8 on
account of Acceptance Obligations (and Bankers Trust shall distribute such
payments in accordance with 2.11(a)(ii)); third, ratably to the Facility 1
Lenders in accordance with the aggregate principal amounts of their respective
outstanding Facility 1 Loans to repay the aggregate principal amount of
Facility 1 Loans due and payable on such day pursuant to Section 2.8; fourth,
ratably to the Facility 1 Lenders in accordance with the aggregate principal
amounts of their respective outstanding Facility 1 Loans, to prepay outstanding
Facility 1 Loans being prepaid on such day pursuant to Section 2.9; and fifth,
the balance, if any, shall be released by the Agent to the Borrowers by
transfer to such account as the Borrowers may direct in writing for such
purpose; provided that if a Potential Default or an Event of Default has
occurred and is continuing, but the Lenders have not accelerated the Facility 1
Loans, Swing-Line Loans, or the Acceptance Obligations hereunder, then the
Agent shall not release any such amounts to the Borrowers and shall hold such
amounts in the Facility 1 Settlement Account until the earlier of (x) the cure
of such Potential Default or Event of Default or (y) the acceleration of the
Facility 1 Loans, Swing-Line Loans, or the Acceptance Obligations and, if the
event described in clause (x) occurs first, such amounts shall be released to
the Borrowers as described above in this subsection (e), and if the event
described in clause (y) occurs first, then such amounts shall be applied in
accordance with Section 2.11(h).
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(f) Prior to the maturity of the Facility 2 Loans (whether upon
acceleration, upon any date that the Facility 2 Commitments are terminated
pursuant to Section 2.7(b) or otherwise), or the occurrence and continuance of
a Potential Default or an Event of Default, all amounts received on any day by
the Agent hereunder in respect of principal of Facility 2 Loans or under the
Servicing Security Agreement in respect of the Collateral described therein or
in respect of Eligible REO Property mortgaged to the Secured Parties, shall be
applied by the Agent as follows: first, ratably to the Facility 2 Lenders in
accordance with the aggregate principal amounts of their respective outstanding
Facility 2 Loans, to repay the aggregate principal amount of Facility 2 Loans
due and payable on such day pursuant to Section 2.8; second, ratably to the
Facility 2 Lenders in accordance with the aggregate principal amounts of their
respective outstanding Facility 2 Loans, to prepay outstanding Facility 2 Loans
being prepaid on such day pursuant to Section 2.9; and third, the balance, if
any, shall be released by the Agent to the Borrowers by transfer to such
account as the Borrowers may direct in writing for such purpose; provided that
if a Potential Default or an Event of Default exists, but the Lenders have not
accelerated the Facility 2 Loans hereunder, then the Agent shall not release
any such amounts to the Borrowers and shall hold such sums in the Cash
Collateral Account until the earlier of (x) the cure of any Potential Default
or Event of Default or (y) the acceleration of the Facility 2 Loans, and if the
event described in clause (x) occurs first, the amounts shall be released to
the Borrowers as described in this subsection (f), and if the event described
in clause (y) occurs first, then such amounts shall be applied in accordance
with Section 2.11(i).
(g) [Reserved]
(h) Upon the maturity of the Facility 1 Loans and Facility 1
Acceptance Obligations (whether upon acceleration, upon any date that the
Facility 1 Commitments are terminated pursuant to Section 2.7(a) or otherwise),
all amounts in the Facility 1 Settlement Account and all amounts received by
the Agent from the Warehousing Collateral Agent under the Warehousing Security
Agreement shall be disbursed by the Agent as follows: first, ratably to the
Collateral Agents in accordance with the amounts due to them, to reimburse them
for all fees, costs and expenses reasonably incurred by them in connection with
a Potential Default or an Event of Default or otherwise payable to them in
their capacities as Collateral Agents under the Loan Documents or otherwise
payable to one or more of them under the Cash Collateral Agreement; second, to
the Agent, to reimburse the Agent for all fees, costs and expenses reasonably
incurred by it in connection with a Potential Default or an Event of Default,
or otherwise payable to it in its capacity as Agent under the Loan Documents;
third, to Bankers Trust to pay all accrued and unpaid interest on the
Swing-Line Loans due hereunder and to repay the principal of all outstanding
Swing-Line Loans; fourth, to Bankers Trust to pay all amounts due on account of
Acceptance Obligations (and Bankers Trust shall distribute such payments in
accordance with 2.11(a)(ii)); fifth, ratably to the Facility 1 Lenders in
accordance with the amount of interest and Fees on the Facility 1 Loans due to
such Lenders, to pay all accrued and unpaid interest on and Fees with respect
to the Facility 1 Loans due hereunder; sixth, ratably to the Facility 1 Lenders
in accordance with the aggregate principal amounts of their respective
outstanding Facility 1 Loans, to repay all outstanding Facility 1 Loans;
seventh, ratably to all of the Facility 2 Lenders in accordance with their
respective unpaid Obligations relating to Facility 2 Loans, to pay all of their
remaining unpaid Obligations relating to Facility 2 Loans; and eighth, provided
no Obligations remain unpaid to the Borrowers by transfer to such account as
the Borrowers may direct in writing for such purpose.
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(i) Upon the maturity of the Facility 2 Loans (whether upon
acceleration, upon any date that the Facility 2 Commitments are terminated
pursuant to Section 2.7(b) or otherwise), all amounts received by the Agent
from the Servicing Collateral Agent under the Servicing Security Agreement
shall be disbursed by the Agent as follows: first, ratably to the Collateral
Agents in accordance with the amounts due to them, to reimburse them for all
fees, costs and expenses reasonably incurred by them in connection with a
Potential Default or an Event of Default or otherwise payable to them in their
capacities as Collateral Agents under the Loan Documents or otherwise payable
to one or more of them under the Cash Collateral Agreement; second, to the
Agent, to reimburse the Agent for all fees, costs and expenses reasonably
incurred by it in connection with a Potential Default or an Event of Default or
otherwise payable to it in its capacity as Agent under the Loan Documents;
third, ratably to the Facility 2 Lenders in accordance with the amount of
interest on and Fees with respect to the Facility 2 Loans due to such Lenders,
to pay all accrued and unpaid interest on and Fees with respect to the Facility
2 Loans due hereunder; fourth, ratably to the Facility 2 Lenders in accordance
with the aggregate principal amounts of their respective outstanding Facility 2
Loans, to repay all outstanding Facility 2 Loans; fifth, to Bankers Trust to
pay all accrued and unpaid interest on the Swing-Line Loans due hereunder and
to repay the principal of all outstanding Swing-Line Loans; sixth, to Bankers
Trust to pay all amounts due on account of Acceptance Obligations (and Bankers
Trust shall distribute such payments in accordance with 2.11(a)(ii)); seventh,
ratably to all of the Facility 1 Lenders in accordance with their respective
unpaid Obligations relating to Facility 1 Loans, to repay all of their
remaining unpaid Obligations relating to Facility 1 Loans; and eighth, provided
no Obligations remain unpaid, to the Borrowers by transfer to such account as
the Borrowers may direct in writing for such purpose.
(j) [Reserved]
(k) Upon the maturity of the Loans and all other Obligations
pursuant to Section 6.1, all amounts in any account of the Borrower maintained
with the Agent and all amounts (other than the amounts referred to in
subsections (h) and (i) above) received by the Agent on account of the
Obligations shall be disbursed by the Agent as follows: first, ratably to the
Collateral Agents in accordance with the amounts due to them, to reimburse them
for all fees, costs and expenses reasonably incurred by them in connection with
a Potential Default or an Event of Default or otherwise payable to them in
their capacities as Collateral Agents under the Loan Documents; second, to the
Agent, to reimburse the Agent for all fees, costs and expenses reasonably
incurred by it in connection with a Potential Default or an Event of Default or
otherwise payable to it in its capacity as Agent under the Loan Documents;
third, to Bankers Trust to pay all accrued and unpaid interest on the
Swing-Line Loans and to repay the principal of all outstanding Swing-Line
Loans; fourth, to Bankers Trust to pay all amounts due on account of Acceptance
Obligations (and Bankers Trust shall distribute such payments in accordance
with 2.11(a)(ii)); fifth, ratably to the Lenders in accordance with the amount
of interest and Fees due to each Lender, to pay all accrued and unpaid interest
and Fees due hereunder; sixth, ratably to the Lenders in accordance with the
aggregate principal amounts of their respective outstanding Loans, to repay all
outstanding Loans; seventh, ratably to the Lenders in accordance with their
respective unpaid Obligations, to pay all remaining unpaid Obligations; and
eighth, to the Borrowers by transfer to such account as the Borrowers may
direct in writing for such purpose.
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SECTION 2.12 EURODOLLAR RATE NOT DETERMINABLE; ILLEGALITY OR IMPROPRIETY.
(a) In the event, and on each occasion, that on or before the day
on which the Eurodollar Rate for a Facility 1 Borrowing that is to include
Eurodollar Loans is to be determined, the Agent has determined in good faith
that the Eurodollar Rate cannot be determined for any reason, the Agent shall,
as soon as practicable thereafter, give written notice of such determination to
the Borrowers and the Lenders. Upon any such determination, any request by the
Borrowers for a Eurodollar Loan pursuant to Section 2.2 shall, until the Agent
has advised the Borrowers and the Lenders that the circumstances giving rise to
such notice no longer exist, be deemed to be a request for a Fed Funds Loan.
Each determination by the Agent hereunder shall be conclusive and binding
absent manifest error.
(b) If any Lender determines at any time that the introduction of,
or any change in, any applicable law, rule, regulation, order or decree or in
the interpretation or the administration thereof by any Governmental Authority
charged with the interpretation or administration thereof, or compliance by
such Lender with any request or directive (whether or not having the force of
law) of any such Governmental Authority, shall make it unlawful or improper for
such Lender to make, maintain or fund any Eurodollar Loan as contemplated by
this Agreement, then such Lender shall immediately give notice thereof to the
Agent and the Borrowers describing such illegality or impropriety in reasonable
detail. Effective thirty (30) days after the giving of such notice (or
effective upon such earlier date as required by such Governmental Authority),
the obligation of such Lender to make Eurodollar Loans shall be suspended for
the duration of such illegality or impropriety and, if and when such illegality
or impropriety ceases to exist, such suspension shall cease and such Lender
shall notify the Agent and the Borrowers thereof. If any such change makes it
unlawful or improper for any Lender to maintain any Eurodollar Loan such Lender
shall, upon the happening of such event, notify the Agent and the Borrowers
thereof, and the Borrowers shall immediately, or if permitted by applicable
law, rule, regulation, order, decree, interpretation, request or directive, no
later than the date permitted thereby, convert each such Eurodollar Loan into a
Fed Funds Loan. If any Lender notifies the Agent and the Borrowers pursuant to
this Section 2.12(b) that it is unlawful or improper for such Lender to make or
maintain Eurodollar Loans, as the case may be, but no other Lenders give
similar notices, then the Borrowers may require such Lender to sell, pursuant
to Section 8.6(c) all of its outstanding Loans and Commitments to another
Lender (if any other Lender agrees, in its sole and absolute discretion, to
purchase such Loans and Commitments) or to any other financial institution
reasonably acceptable to the Agent that is willing to make and maintain
Eurodollar Loans. The purchase price for such Loans and Commitments shall be
equal to the aggregate outstanding principal amount of the Loans of such Lender
plus such Lender's pro rata share of all other accrued and unpaid Obligations
(including obligations arising as a result of being an Acceptance Participant)
minus the pro rata portion (based on the number of days in the applicable
period) of such Lender's facility fees that relate to the period from the date
of such sale to the next payment date for the facility fees.
SECTION 2.13 RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES.
(a) Notwithstanding any other provision herein, if after the date
of this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not
49
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having the force of law) imposes any tax on or changes the basis of taxation of
payments to any Lender of the principal of or interest on any Eurodollar Loan
or the face amount of a Facility 1 Acceptance made by such Lender or any
interest due on any Acceptance Obligations or any Fees or other amounts payable
hereunder (other than taxes imposed on the overall net income of such Lender by
the jurisdiction in which such Lender has its principal office or by any
political subdivision or taxing authority therein), or imposes, modifies or
deems applicable any reserve, special deposit or similar requirement against
assets of, deposits with or for the account of or credit extended by such
Lender (except any such reserve requirement that is reflected in the Eurodollar
Rate) or imposes on such Lender any other condition affecting this Agreement or
Eurodollar Loans or a Facility 1 Acceptances created by Bankers Trust, and the
result of any of the foregoing is to increase the cost to such Lender of making
or maintaining any Eurodollar Loan, becoming or remaining as an Acceptance
Participant or to reduce the amount of any sum received or receivable by such
Lender hereunder (whether of principal, interest, fee or otherwise) in respect
thereof by an amount deemed by such Lender to be material, then the Borrowers
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction suffered. Any
amount or amounts payable by the Borrowers to any Lender in accordance with the
provisions of this Section 2.13(a) shall be paid by the Borrowers to such
Lender within ten (10) Business Days of receipt by the Borrowers from such
Lender of a statement setting forth in reasonable detail the amount or amounts
due and the basis for the determination from time to time of such amount or
amounts, which statement shall be conclusive and binding absent manifest error.
(b) If any Lender has determined that the adoption after the date
hereof of any applicable law, rule or regulation regarding capital adequacy, or
any change therein, or any change in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by
such Lender (or any lending office of such Lender, as the case may be) or by
the holding company of such Lender, as the case may be, with any request or
directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has the effect of
reducing the rate of return on such Lender's capital or on the capital of such
Lender's holding company, as the case may be, as a consequence of such Lender s
obligations under the Loan Documents to a level below that which such Lender or
such Lender's holding company, as the case may be, could have achieved but for
such adoption, change or compliance (taking into consideration such Lender s
policies or such Lender's holding company's policies, as the case may be, with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, the Borrowers shall reimburse such Lender or such
Lender's holding company, as the case may be, for such reduction. Any amount
or amounts payable by the Borrowers to any Lender in accordance with the
provisions of this Section 2.13(b) shall be paid by the Borrowers to such
Lender within ten (10) Business Days of receipt by the Borrowers from such
Lender of a statement setting forth in reasonable detail the amount or amounts
due and the basis for the determination from time to time of such amount or
amounts, which statement shall be conclusive and binding absent manifest error.
(c) Each Lender agrees to use reasonable efforts to change its
lending office to avoid or minimize (i) any amounts that might otherwise be
payable to such Lender pursuant to this Section 2.13 or pursuant to Section
2.15 or (ii) the effect of any event referred to in Section 2.12(b); provided
that such efforts or change shall not cause the imposition on such Lender of
any additional
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cost or legal, regulatory or administrative burdens deemed by such Lender, in
its sole discretion, to be material.
(d) Failure on the part of any Lender to demand compensation for
any increased costs or reduction in amounts received or receivable or reduction
in return on capital with respect to any period shall not constitute a waiver
of such Lender's right to demand compensation with respect to such period or
any other period. The protection of this Section 2.13(d) shall be available to
any Lender regardless of any possible contention of the invalidity or
inapplicability of the law, rule, regulation, guideline or other change or
condition that shall have occurred or been imposed.
SECTION 2.14 INDEMNITY.
(a) The Borrowers shall indemnify and hold harmless each Lender
against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorney's fees) that such Lender
actually sustains or incurs as a consequence of (i) any failure by the
Borrowers to fulfill on the Amendment Effective Date or on the date of any
Credit Event hereunder the applicable conditions set forth in Article III, (ii)
the creation of any Facility 1 Acceptance or failure to accept any Draft, (iii)
any failure by the Borrowers to borrow any Eurodollar Loan hereunder, to
convert any Loan into a Eurodollar Loan or to continue any Eurodollar Loan for
an additional Eurodollar Interest Period, after irrevocable notice of such
borrowing, conversion or continuation has been given pursuant to Section 2.2 or
the breach by the Borrowers of any obligation under the Funding Agreement, (iv)
any payment, prepayment or conversion of a Eurodollar Loan required by any
provision of this Agreement or otherwise made on a date other than the last day
of the Eurodollar Interest Period applicable thereto or any payment, prepayment
of Acceptance Obligations or required by the Loan Documents made on a date
other than the maturity date applicable thereto, (v) any default in payment or
prepayment of the principal amount of any Eurodollar Loan or an Acceptance
Obligation or any part thereof or interest accrued thereon, as and when due and
payable (at the due date thereof, by irrevocable notice of prepayment or
otherwise) or (vi) the occurrence of any Event of Default, including, in each
such case, any loss or reasonable expense sustained or incurred in liquidating
or employing deposits from third parties acquired to effect or maintain such
Eurodollar Loan or any part thereof as a Eurodollar Loan. Such loss or
reasonable expense shall include but not be limited to an amount equal to the
excess, if any, as reasonably determined by such Lender, of (A) its cost of
obtaining the funds for the Eurodollar Loan being paid, prepaid or converted or
not borrowed, converted or continued (based on the Eurodollar Rate applicable
thereto) for the period from the date of such payment, prepayment, conversion
or failure to borrow, convert or continue to the last day of the Eurodollar
Interest Period, as the case may be, for such Loan (or, in the case of a
failure to borrow, convert, or continue the Eurodollar Interest Period, as the
case may be, for such Loan that would have commenced on the date of such
failure to borrow, convert or continue) over (B) the amount of interest (as
reasonably determined by such Lender) that would be realized by such Lender in
re-employing the funds so paid, prepaid or converted or not borrowed, converted
or continued for such period or Eurodollar Interest Period, as the case may be.
A certificate of any Lender setting forth in reasonable detail any amount or
amounts which such Lender is entitled to receive pursuant to this Section 2.14
shall be delivered to the Borrowers and shall be conclusive and binding absent
manifest error.
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(b) The Borrowers shall assume all risks of the acts, omissions or
misuse of any Facility 1 Acceptance by the holder thereof. Neither Bankers
Trust nor the Lenders shall be responsible for the following (except to the
extent caused by the gross negligence or willful misconduct of the Agent or the
Lenders): (i) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any Facility 1 Acceptance, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Facility 1 Acceptance or the rights or
benefits thereunder or proceeds thereof, in whole or in part, that may prove to
be invalid or ineffective for any reason; (iii) failure of the holder of a
Facility 1 Acceptance to comply fully with conditions required in order to
receive payment under a Facility 1 Acceptance; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v)
errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to receive payment
under a Facility 1 Acceptance or of the proceeds thereof; and (vii) any
consequences arising from causes beyond the control of Bankers Trust,
including, without limitation, any acts of any Governmental Authority. None of
the above shall affect, impair, or prevent the vesting of Bankers Trusts
rights or powers hereunder.
(c) Nothing in this Section is intended to limit the reimbursement
obligation of the Borrowers contained elsewhere in this Agreement. The
obligations of the Borrowers under this Section shall survive the termination
of this Agreement.
SECTION 2.15 TAXES.
All payments made by the Borrowers under this Agreement and
the other Loan Documents shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding, in the case of the Agent, each
Collateral Agent and each Lender, net income taxes and franchise taxes
(imposed in lieu of net income taxes) imposed on the Agent, such Collateral
Agent or such Lender, as the case may be, as a result of a present or former
connection between the jurisdiction of the government or taxing authority
imposing such tax and the Agent, such Collateral Agent or such Lender
(excluding a connection arising solely from the Agent, such Collateral Agent or
such Lender having executed, delivered, performed its obligations or received a
payment under, or enforced, this Agreement or the other Loan Documents) or any
political subdivision or taxing authority thereof or therein (all such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions and
withholdings being hereinafter called "Taxes"). If any Taxes are required to
be withheld from any amounts payable to the Agent, any Collateral Agent or any
Lender hereunder or under other Loan Documents, the amounts so payable to the
Agent, such Collateral Agent or such Lender shall be increased to the extent
necessary to yield to the Agent, such Collateral Agent or such Lender (after
payment of all Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in this Agreement and the other Loan
Documents. Whenever any Taxes are payable by the Borrowers, as promptly as
possible thereafter the Borrowers shall send to the Agent for its own account
or for the account of such Collateral Agent or such Lender, as the case may be,
a certified copy of an original official receipt received by the Borrowers
showing payment thereof. If the Borrowers fail to pay any Taxes when due to
the
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appropriate taxing authority or fails to remit to the Agent the required
receipts or other required documentary evidence, the Borrowers shall indemnify
the Agent, the Collateral Agents and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Agent, any Collateral
Agent or any Lender as a result of any such failure. The agreements in this
subsection shall survive the termination of this Agreement and the payment of
the Notes and all other amounts payable under the Loan Documents.
SECTION 2.16 SHARING OF SETOFFS.
Each Lender agrees that if it shall, through the exercise of a
right of banker's lien, setoff or counterclaim against the Borrowers, or
pursuant to a secured claim under Section 506 of Title 11 of the United States
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means, obtain payment
(voluntary or involuntary) in respect of any Obligation as a result of which
the unpaid portion of its Obligations shall be proportionately less than the
unpaid portion of the Obligations of any other Lender, it shall simultaneously
purchase from such other Lender at face value a participation in the
Obligations of such other Lender, so that the aggregate unpaid amount of the
Obligations and such participations in Obligations held by each Lender shall be
in the same proportion to the aggregate unpaid amount of all Obligations then
outstanding as the amount of its Obligations prior to such exercise of banker s
lien, setoff or counterclaim or other event was to the principal amount of all
Obligations outstanding prior to such exercise of banker's lien, setoff or
counterclaim or other event; provided that, if any such purchase or purchases
or adjustments are made pursuant to this Section 2.16 and the payment giving
rise thereto is thereafter recovered, such purchase or purchases or adjustments
shall be rescinded to the extent of such recovery and the purchase price or
prices or adjustments restored without interest. The Borrowers expressly
consent to the foregoing arrangements and agrees that any Lender holding a
participation in an Obligation deemed to have been so purchased may exercise
any and all rights of banker's lien, setoff or counterclaim with respect to any
and all moneys owing by the Borrowers to such Lender by reason thereof as fully
as if such Lender had made a loan directly to the Borrowers in the amount of
such participation.
ARTICLE 3
CONDITIONS TO CREDIT EVENTS
SECTION 3.1 CONDITIONS TO CREDIT EVENTS.
(a) As conditions precedent to the initial Credit Event hereunder:
(i) Each Borrower shall have delivered or shall have had
delivered to the Agent, in form and substance and in quantities
reasonably satisfactory to the Agent and its counsel, each of the
following:
(A) this Agreement, duly executed by the parties
hereto;
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(B) each of the Warehouse Security Agreement,
Servicing Security Agreement, the Cash Collateral Agreement,
the Statement of Accounts Receivable and the Power of Attorney
for each Borrower, duly executed (and notarized where
required) by the parties thereto (which Powers of Attorney
shall be "protocolized" under the laws of Puerto Rico by
counsel to the Borrowers, and filed with the Registry of
Powers of Attorneys and ▇▇▇▇▇ by local counsel to the Agent
promptly after the closing contemplated hereunder);
(C) a duly executed Facility 1 Note for each
Lender with a Facility 1 Commitment and a duly executed
Facility 2 Note for each Lender with a Facility 2 Commitment;
(D) duly executed Drafts as required under
Section 2.5(c);
(E) duly executed documents, instruments and
agreements, properly executed, deemed necessary or appropriate
by the Agent, in its reasonable discretion, to create in favor
of the Lenders a valid and perfected, first priority security
interest in and lien upon the Collateral;
(F) a certified copy of resolutions of the Board
of Directors of each of the Borrowers approving the execution,
delivery and performance of all Loan Documents required to be
delivered by such parties hereunder and the transactions
contemplated therein;
(G) a certificate of the Secretary or an
Assistant Secretary of each of the Borrowers certifying the
names and true signatures of the officers of such parties
authorized to sign the Loan Documents required to be executed
and delivered by such parties hereunder, in each case dated
the Effective Date;
(H) an opinion of special New York counsel to the
Agent in the form of Exhibit F-1 and covering such other
matters as the Agent may reasonably request and an opinion of
Puerto Rico counsel for the Borrowers in the form of Exhibit
F-2 and covering such other matters as the Agent may
reasonably request, in each case dated the Effective Date;
(I) a copy of the Certificate of Incorporation or
other equivalent document available in the applicable
jurisdiction of the Borrowers certified by the appropriate
officer of the jurisdiction of such party's incorporation as
of a recent date;
(J) a copy of the Bylaws of the Borrowers,
certified by the Secretary or an Assistant Secretary or other
appropriate officer of each such party on the Effective Date
as being accurate and complete;
(K) a certificate of the applicable officer in
the relevant jurisdiction or other equivalent document
available in the applicable jurisdiction of the jurisdiction
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of incorporation of each of the Borrowers certifying that such
party is in good standing as of a recent date and a good
standing certificate from each jurisdiction in which each such
party is qualified to conduct business;
(L) a certificate of an executive officer of each
of the Borrowers, in the form of Exhibits G-1 and G-2,
respectively, dated the Effective Date;
(M) evidence satisfactory to the Agent that the
Facility 1 Settlement Account has been opened and that all
requirements for the opening of the Cash Collateral Account
have occurred;
(N) duly executed acknowledgment agreements from
each of FNMA and FHLMC relating to the validity of the
Servicing Collateral Agent's security interest in the Pledged
Servicing Portfolio;
(O) evidence of (I) the acceptance by the Process
Agent of its appointment pursuant to Section 8.7 and (II)
payment of all fees required by the Process Agent for serving
in such capacity;
(P) a copy of the letter delivered to the parties
to the contracts pledged and assigned to the Secured Parties
pursuant to the Loan Documents (together with evidence of such
delivery) notifying such parties of the security interests in
such contracts and the contract rights related thereto granted
to the Secured Parties pursuant to the Loan Documents, which
letter shall be in substantially the form of Attachments 5 and
2 to the Warehousing Security Agreement and the Servicing
Security Agreement, respectively;
(Q) evidence satisfactory to the Agent that all
reasonable fees, costs and expenses of its New York and Puerto
Rican counsel relating to the preparation, negotiation and
closing of the transaction contemplated hereby through the
Effective Date will be paid in full on such date;
(R) a Pledged Servicing Valuation Report and a
Pledged Servicing Portfolio Report;
(S) a Hedging Inventory Report dated as of a date
which is no longer than ten (10) days prior to the Effective
Date; and
(T) a letter agreement from the Warehousing
Collateral Agent pursuant to which the Warehousing Collateral
Agent agrees to serve as Collateral Agent in connection with
the REO Pledges.
(ii) All acts and conditions (including the obtaining of
any necessary regulatory approvals and the making of any required
filings, recordings or registrations) required to be done and
performed and to have happened prior to the execution, delivery and
performance of the Loan Documents and to constitute the same legal,
valid and binding obligations,
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enforceable in accordance with their respective terms, shall have been
done and performed and shall have happened in due and strict
compliance with all applicable laws or if any of such have not been
done, performed or happened, such has been expressly disclosed to the
Agent and waived by all of the Lenders in writing.
(iii) All documentation, including documentation for
corporate and legal proceedings in connection with the transactions
contemplated by the Loan Documents, shall be reasonably satisfactory
in form and substance to the Agent and its counsel.
(iv) The Borrowers shall have paid all Fees required to
have been paid under the Loan Documents prior to or on the Effective
Date.
(b) As conditions precedent to each Credit Event, at and as of the
date of such Credit Event, including the Amendment Effective Date:
(i) The representations and warranties of the Borrowers
contained in the Loan Documents shall be accurate and complete in all
material respects on and as of the date of such Credit Event as if
made on and as of such date.
(ii) No Potential Default or Event of Default shall have
occurred and be continuing.
(iii) Following the funding of the requested Loan or the
creation of any Acceptance, the aggregate principal amount of Loans
plus the aggregate face amount of Acceptances outstanding hereunder
shall not exceed the limitations set forth in Sections 2.1 and 2.8.
(iv) Since December 31, 1995, no material adverse change
shall have occurred in the business, financial condition or results of
operations of the FFCC and its Subsidiaries, taken as a whole.
(v) The Agent shall have received such other documents or
legal opinions as the Agent or any Lender or special counsel to the
Agent may reasonably request, all in form and substance reasonably
satisfactory to the Agent.
By delivering a Notice of Borrowing or Request for Acceptance to the Agent
hereunder for any Credit Event, as applicable, the Borrowers shall be deemed to
have represented and warranted the accuracy and completeness of the statements
set forth in subsections (i) through (iv) above as of the date of such Credit
Event.
(c) As conditions precedent to each Facility 2 Tranche B Borrowing
(in addition to those set forth in Sections 3.1(a) and (b) above):
(i) Each Borrower shall have delivered or shall have had
delivered to the Agent, in form and substance and in quantities
reasonably satisfactory to the Agent and its counsel, each of the
following:
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(A) all information reasonably requested by the
Agent contained in the files of the Borrowers relating to the
Eligible REO Property to be included in the Facility 2 Tranche
B Borrowing Base;
(B) duly executed REO Demand Note(s);
(C) duly executed REO Mortgages with respect to
all Eligible REO Property to be included in the Facility 2
Tranche B Borrowing Base;
(D) duly executed REO Pledge(s) of the REO Demand
Note(s) to the Agent and the Facility 2 Lenders; and
(E) documentation required under 3.1(a)(i)(F)-(L)
above, as applicable to the related Real Estate Closing, and
as is reasonable and customary, and such other documentation
as is also reasonable and customary, in connection with
commercial real estate closings in Puerto Rico as determined
by the Agent's counsel.
(ii) Simultaneously with such Facility 2 Tranche B
Borrowing or as is otherwise customary in commercial real estate
closings in Puerto Rico, the REO Mortgages shall be filed for
recording with the applicable registries.
(iii) The Borrowers shall have paid all taxes, including
mortgage recording and documentary stamp taxes, recording fees and
charges and all other fees and charges of whatever kind in connection
with the applicable Real Estate Closing, including costs and expenses
of the Agent's outside counsel, and evidence thereof shall have been
delivered to the Agent.
(d) As conditions precedent to each creation of a Facility 1
Acceptance (in addition to those set forth in Sections 3.1(a) and (b) above):
(i) the Borrowers and the Acceptance Agent shall have entered into the Funding
Agreement, and (ii) any necessary or desirable modifications or amendments
shall have been made to the Loan Documents (which modifications or amendments
relate to the Funding Agreement and/or the creation of Facility 1 Acceptances),
as determined by the Agent in its sole discretion.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
As an inducement to the Agent and each Lender to enter into
this Agreement and to make Loans and to be an Acceptance Participant as
provided herein, each of the Borrowers represents and warrants to the Agent and
each Lender that:
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SECTION 4.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW AND
CONTRACTUAL OBLIGATIONS.
Each Borrower (a) is duly organized, validly existing and in
good standing as a corporation under the laws of the Commonwealth of Puerto
Rico and in each jurisdiction where its ownership of property or conduct of
business requires such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect; (b) has the corporate power
and authority and the legal right to own and operate its property and to
conduct business in the manner in which it does and proposes so to do; and (c)
is not in violation of any Requirement of Law or any Contractual Obligation if
such violation could have a Material Adverse Effect.
SECTION 4.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each Borrower has the corporate power and authority to
execute, deliver and perform the Loan Documents to which it is a party and has
taken all necessary corporate action to authorize the execution, delivery and
performance of such Loan Documents. Such Loan Documents have been duly
executed and delivered on behalf of such Borrower and constitute legal, valid
and binding obligations of such Borrower enforceable against it in accordance
with their respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency and other similar laws affecting creditors
rights generally and by general principles of equity.
SECTION 4.3 NO LEGAL OR CONTRACTUAL BAR.
The execution, delivery and performance of the Loan Documents,
including the creation and perfection of the security interests contemplated
hereunder and thereunder, the borrowings of Loans hereunder and the use of the
proceeds thereof, do not and will not (a) violate any Requirement of Law or any
Contractual Obligation of either Borrower or any of its Subsidiaries, (b)
except as contemplated by this Agreement and the Security Agreements, require
any license, consent, authorization, approval or any other action by, or any
notice to or filing or registration with, any Governmental Authority or any
other Person or (c) result in the creation or imposition of any Lien on any
asset of either Borrower or any of its Subsidiaries except as contemplated by
the Loan Documents. Without limiting the scope of the preceding
representation, no Take-Out Commitments assigned to the Secured Parties
prohibit assignment thereof to the Secured Parties. The parties acknowledge
that as of the date hereof, GNMA's policies do not include the execution and
delivery of an Acknowledgment Agreement by GNMA and no representation in any
Loan Document as of the date hereof will be deemed to include a representation
that the Borrowers may assign any rights under the GNMA Servicing Portfolio in
contravention of GNMA's policies. Nothing contained in the preceding sentence
shall affect the Borrowers covenant contained in Section 5.1(g).
SECTION 4.4 FINANCIAL INFORMATION.
(a) The consolidated and consolidating balance sheet of FFCC and
its consolidated Subsidiaries as at December 31, 1995 and the related
consolidated and consolidating statements of income, retained earnings and cash
flows for the fiscal year then ended, including in each case the related
schedules and notes, reported on by Price Waterhouse, true copies of which have
been previously delivered to each of the Lenders, are complete and correct and
fairly present the
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consolidated and consolidating financial condition of FFCC and its consolidated
Subsidiaries as at the date thereof and the consolidated and consolidating
results of operations and cash flows for such period, in accordance with GAAP
applied on a consistent basis.
(b) The unaudited consolidated and consolidating balance sheet of
each Borrower and its consolidated Subsidiaries as at June 30, 1996, and the
related unaudited combined statements of income, retained earnings and cash
flows for the six months then ended, certified by the chief financial officer
of FFCC, true copies of which have been previously delivered to each of the
Lenders, are complete and correct and fairly present the consolidated and
consolidating financial condition of FFCC and its consolidated Subsidiaries as
at the date thereof and the consolidated and consolidating results of
operations and cash flows for such period in conformity with GAAP applied on a
basis consistent with the financial statements referred to in subsection (a) of
this Section 4.4, subject to normal year-end audit adjustments.
(c) Except for Indebtedness created by the issuance of the Senior
Notes, neither Borrower has any material liability of any kind, whether
accrued, contingent, absolute, determined, determinable or otherwise, and no
condition, situation or set of circumstances exists that could be reasonably
expected to result in such a liability, in each case that is not reflected in
the financial statements referred to in Section 4.4(b) or in the most recent
financial statements delivered to the Agent and the Lenders pursuant to Section
5.1(a)(i) or (ii) (other than liabilities permitted hereunder and incurred
after the date of such most recent financial statements and to be reflected in
the next financial statements to be delivered to the Agent and the Lenders
pursuant to Section 5.1 (a)(i) or (ii)).
(d) Since December 31, 1995, no material adverse change has
occurred in the business, financial condition or results of operations of FFCC
and its Subsidiaries, taken as a whole.
SECTION 4.5 NO MATERIAL LITIGATION.
Except as set forth on Exhibit O, no litigation, investigation
or proceeding of or before any arbitrator or Governmental Authority is pending
or, to the knowledge of either Borrower, threatened by or against such Borrower
or any of its Subsidiaries, or against any of such Borrower's or any such
Subsidiary's properties or revenues that, if adversely determined, could alone,
or with any other litigation, investigation or proceeding, affect the business,
financial condition or results of operations of such Borrower and its
Subsidiaries, taken as a whole, in excess of a Material Amount or could have a
Material Adverse Effect.
SECTION 4.6 TAXES.
Each Borrower and each of its Subsidiaries have filed or
caused to be filed all tax returns that are required to be filed and have paid
all taxes shown to be due and payable on such returns or on any assessments
made against them or any of their property other than taxes and assessments
that are being contested in good faith by appropriate proceedings and as to
which such Borrower or such Subsidiary has established adequate reserves in
conformance with GAAP.
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SECTION 4.7 INVESTMENT COMPANY ACT.
Neither Borrower is an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
SECTION 4.8 SUBSIDIARIES.
FFCC has no Subsidiaries as of the Amendment Effective Date
other than DMC, Doral Federal Savings Bank, Centro Hipotecario de Puerto Rico,
Inc., RSC Corp., First Florida Realty Corporation and AAA Financial Services
Corporation. FFCC owns, directly or through another Subsidiary, one hundred
percent (100%) of the stock of each such Subsidiary, and all of the stock of
each such Subsidiary has been duly issued and is fully paid and nonassessable.
SECTION 4.9 USE OF PROCEEDS.
The proceeds of all Facility 1 Loans and Swing-Line Loans
shall be used by the Borrowers solely for the purpose of originating, acquiring
or financing Eligible Conforming Mortgage Loans, Eligible Non-Conforming
Mortgage Loans and/or Eligible Mortgage-Backed Securities. The proceeds of all
Facility 2 Tranche A Loans shall be used by the Borrowers solely to make
advances (or to refinance advances previously made by either Borrower)
resulting in the creation of Eligible Servicing Receivables. The proceeds of
all Facility 2 Tranche B Loans shall be used by the Borrowers solely to provide
financing of the Eligible REO Property. The proceeds of Facility 2 Tranche C
Loans shall be used by the Borrowers for general working capital purposes. The
proceeds of the discounting of all Facility 1 Acceptances by the Acceptance
Agent shall be used by the Borrowers solely to purchase additional servicing
portfolios and for general working capital purposes.
SECTION 4.10 ERISA.
(a) No Prohibited Transactions, Accumulated Funding Deficiencies,
withdrawals from Multi employer Plans or Reportable Events have occurred with
respect to any Plans or Multiemployer Plans that, in the aggregate, could
subject either Borrower or any of such Borrower's Subsidiaries to any material
tax, penalty or other liability where such tax, penalty or liability is not
covered in full, for the benefit of such Borrower or such Subsidiary, by
insurance; (b) no notice of intent to terminate a Plan has been filed, nor has
any Plan been terminated under Section 4041 of ERISA, nor has the PBGC
instituted proceedings to terminate, or appoint a trustee to administer, a Plan
and no event has occurred or condition exists that might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan; (c) the present value of all benefits
liabilities (as defined in Section 4001(a)(16) of ERISA) under all Plans (based
on the actuarial assumptions used to fund the Plans) does not exceed the assets
of the Plans; and (d) the execution, delivery and performance by Borrowers of
the Loan Documents and the borrowing of the Loans hereunder and the use of the
proceeds thereof will not involve any Prohibited Transaction.
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SECTION 4.11 SECURITY INTERESTS.
Subject to the penultimate sentence of Section 4.3 regarding
the GNMA Servicing Portfolio, the security interests created in favor of the
Secured Parties under the Security Agreements constitute (a) valid and binding
security interests in the Collateral and (b) will constitute perfected security
interests in the mortgage notes evidencing the Mortgage Loans, the
Mortgage-Backed Securities, the Take-Out Commitments, the REO Notes and the REO
Property encumbered by REO Mortgages, the Eligible Servicing Receivables and
the Pledged Servicing Portfolio, and such collateral is not and will not be
subject to any other Liens except as permitted by Section 5.2(a).
SECTION 4.12 AGENCY APPROVALS.
Each Borrower is a FHLMC approved Seller/Servicer, a HUD
Direct Endorsement Lender and a VA approved Lender in good standing, and FFCC
is also a FNMA approved Seller/Servicer and a GNMA approved Issuer/Servicer.
SECTION 4.13 SOLVENCY.
Each Borrower is able to pay its debts as they mature. The
aggregate estimated fair market value of each Borrower's assets is greater than
such Borrower's liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities and any and all Obligations hereunder). Each Borrower
has capital sufficient to carry on the business and transactions in which it is
engaged and all business and transactions in which it is about to engage.
ARTICLE 5
COVENANTS
SECTION 5.1 AFFIRMATIVE COVENANTS.
Each Borrower hereby covenants and agrees that, as long as any
Obligations remain unpaid or any Lender has any Commitment hereunder, the
Borrowers shall:
(a) Reports to Agent. Furnish or cause to be furnished to the
Agent (with sufficient numbers of copies for each Lender which the Agent shall
forward to each Lender within a reasonable time after receipt thereof):
(i) Annual Financial Statements. As soon as available
and in any event within ninety (90) days after the end of each fiscal
year of FFCC, a consolidated and consolidating balance sheet of FFCC
and its consolidated Subsidiaries as at the end of such year and the
related consolidated and consolidating statements of income, retained
earnings and cash flows of FFCC and its consolidated Subsidiaries for
such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and
accompanied by a report thereon of Price Waterhouse or other
independent public accountants of comparable recognized national
standing, which report shall be unqualified as to scope of audit and
shall state that such financial statements present fairly the
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consolidated and consolidating financial condition as at the end of
such fiscal year, and the consolidated and consolidating results of
operations and cash flows for such fiscal year, of FFCC and its
consolidated Subsidiaries in accordance with GAAP consistently applied
(it being understood that the form of audited consolidated and
unaudited consolidating balance sheet, and the related statements of
income, retained earnings and cash flows contained in the Bank Book
shall satisfy the requirements of this subsection);
(ii) Quarterly Financial Statements. As soon as available
and in any event within forty-five (45) days after the end of each
fiscal quarter of FFCC, a consolidated and consolidating balance sheet
of FFCC and its consolidated Subsidiaries as at the end of such fiscal
quarter and the related consolidated and consolidating statements of
income, retained earnings and cash flows of FFCC and its consolidated
Subsidiaries for such fiscal quarter, setting forth in each case in
comparative form the figures for the previous fiscal quarter, all in
reasonable detail and certified by the chief financial officer of FFCC
that they present fairly the consolidated and consolidating financial
condition as at the end of such fiscal quarter, and the consolidated
and consolidating results of operations and cash flows for such fiscal
quarter, of FFCC and its consolidated Subsidiaries in accordance with
GAAP consistently applied, subject to normal year-end adjustments (it
being understood that the form of consolidated and consolidating
balance sheet, and the related statements of income, retained earnings
and cash flows contained in the Bank Book shall satisfy the
requirements of this subsection);
(iii) Monthly Financial Statements. Upon thirty (30) days
notice from the Agent (such notice to be given no earlier than the
first day of a month to receive a statement for the previous
month), a consolidated and consolidating balance sheet of FFCC and its
consolidated Subsidiaries as at the end of the previous month and the
related consolidated and consolidating statements of income and
retained earnings of FFCC and its consolidated Subsidiaries for such
month setting forth in each case in comparative form the figures for
the previous month, all in reasonable detail and certified by the chief
financial officer of FFCC that they are complete and correct and that
they present fairly the consolidated and consolidating financial
condition as at the end of such month, and the consolidated and
consolidating results of operations for such month and such portion of
the fiscal year, of FFCC and its consolidated Subsidiaries in
accordance with GAAP consistently applied (subject to normal year-end
adjustments);
(iv) No Default/Compliance Certificate. Together with the
financial statements required pursuant to subsections (i) and (ii)
above, a certificate of the chief financial officer of FFCC (A) to the
effect that, based upon a review of the activities of FFCC and its
Subsidiaries and such financial statements during the period covered
thereby, no Event of Default or Potential Default exists, or if an
Event of Default or a Potential Default exists, specifying the nature
thereof and the Borrowers proposed response thereto, and (B)
demonstrating in reasonable detail compliance with Section 5.3 as at
the end of such fiscal year or such fiscal quarter, as applicable;
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(v) Audit Reports. Upon request by the Agent, copies of
each HUD Single Family Audit Report and FNMA and FHLMC audit reports
on each Borrower and its operations;
(vi) Notice of Default or Misrepresentation. (a) Promptly
after obtaining knowledge of the occurrence of an Event of Default or
a Potential Default, a certificate of the chief financial officer of
FFCC specifying the nature thereof and FFCC
's or DMC 's proposed response thereto
and (b) at any time that any representation, warranty or other
information contained in any statement or certificate required to be
delivered hereunder or any representation or warranty deemed to have
been made hereunder shall prove to be false or misleading in any
material way, promptly after obtaining knowledge thereof give notice
thereof to the Agent describing how such representation, warranty or
information is misleading.
(vii) Loss of Qualification. Promptly after the occurrence
thereof, notice of any Mortgage Loan or Mortgage-Backed Security
included in the Facility 1 Borrowing Base, that ceases to qualify as
an Eligible Mortgage Loan or Eligible Mortgage-Backed Security, as the
case may be;
(viii) Litigation. Promptly after the occurrence thereof,
notice of the institution of or any material adverse development in
any action, suit or proceeding or any governmental investigation or
any arbitration, before any court or arbitrator or any governmental or
administrative body, agency or official, against either Borrower or
any material property of any thereof, in each case if such action,
suit, proceeding, investigation or arbitration could result in a
liability to the Borrowers in excess of the Material Amount;
(ix) ERISA. In connection with ERISA:
(A) Promptly and in any event within ten (10)
Business Days after either Borrower knows or has reason to know of the
occurrence of a Reportable Event with respect to a Plan with regard to
which notice must be provided to the PBGC, a copy of such materials
required to be filed with the PBGC with respect to such Reportable
Event and in each such case a statement of the chief financial officer
of such Borrower setting forth details as to such Reportable Event and
the action that such Borrower proposes to take with respect thereto;
(B) Promptly and in any event within ten (10)
Business Days after either Borrower knows or has reason to know of any
condition existing with respect to a Plan that presents a material
risk of termination of such Plan, imposition of an excise tax,
requirement to provide security to such Plan or occurrence of other
liability by the applicable Borrower or any ERISA Affiliate, a
statement of the chief financial officer of the applicable Borrower
describing such condition;
(C) At least ten (10) Business Days prior to the
filing by any plan administrator of a Plan of a notice of intent to
terminate such Plan, a copy of such notice;
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(D) Promptly and in no event more than ten (10)
Business Days after the filing thereof with the Secretary of the
Treasury, a copy of any application by either Borrower or an ERISA
Affiliate for a waiver of the minimum funding standard under section
412 of the Code;
(E) Upon request by the Agent from time to time,
copies of each annual report that is filed on Internal Revenue Service
Form 5500, together with certified financial statements for any Plan
(if any) as of the end of such year and actuarial statements on
Schedule B to such Form 5500;
(F) Promptly and in any event within ten (10)
Business Days after it knows or has reason to know of any event or
condition that might constitute grounds under section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer,
any Plan, a statement of the chief financial officer of the applicable
Borrower describing such event or condition;
(G) Promptly and in no event more than ten (10)
Business Days after receipt thereof by either Borrower or any ERISA
Affiliate, a copy of each notice received by such Borrower or an ERISA
Affiliate concerning the imposition of any withdrawal liability under
section 4202 of ERISA; and
(H) Promptly after receipt thereof a copy of any
notice either Borrower or any ERISA Affiliate may receive from the
PBGC or the Internal Revenue Service with respect to any Plan or
Multiemployer Plan; provided that this subparagraph (H) shall not
apply to notices of general application promulgated by the PBGC or the
Internal Revenue Service;
(x) Borrowing Base, Commitment Status and Servicing
Reports.
(A) On Monday of each week, and on such other
days as the Agent may reasonably request, a Facility 1 Borrowing Base
Certificate and a Facility 2 Tranche A Borrowing Base Certificate, in
each case prepared by the Borrowers and dated as of the Friday
preceding such Monday or as of such other day;
(B) As soon as available and in any event no
later than five (5) days after the end of each month, and on such
other days as the Agent may reasonably request, a Hedging Inventory
Report, dated as of the last day of such month or as of such other
day;
(C) As soon as available and in any event no
later than forty-five (45) days after the end of each fiscal quarter,
a Pledged Servicing Portfolio Report dated as of the last day of such
quarter;
(D) As soon as available and in any event no
later than fifteen (15) days after the end of each six-month period
commencing with the six-month period ending December 31, 1996, a
Pledged Servicing Valuation Report, dated as of the last day of each
such six-month period; provided, that the Agent shall have the right
to request additional
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Pledged Servicing Valuation Reports at such times as it deems
necessary or desirable, which reports shall be prepared at the expense
of the Lenders;
(E) On the first Business Day of each month, and
on such other days as the Agent may reasonably request, a report, in
form and substance reasonably satisfactory to the Agent, prepared by
the Borrowers, on the aging of Mortgage Loans included in the Facility
1 Borrowing Base; and
(F) On the first Business Day of each month, and
in connection with any Real Estate Closing, and on such other days as
the Agent may reasonably request, a Facility 2 Tranche B Borrowing
Base Certificate, dated as of the preceding Business Day.
(xi) Certificating Custodian. Promptly after a
replacement of any Certificating Custodian, notice thereof together
with copies of the Agency Custodial Agreements appointing a successor
Certificating Custodian; and
(xii) Other Information. Promptly, such additional
financial and other information, including financial statements of the
Borrowers or any of its Subsidiaries or any Approved Investor (other
than FNMA or FHLMC), and such information regarding the Collateral as
any Lender, through the Agent, may from time to time reasonably
request, including such information as is necessary for any Lender to
grant participations of its interests in Loans hereunder or to enable
another financial institution to become a signatory hereto.
(b) Maintenance of Existence and Properties; Compliance with Laws;
Maintenance of Agency Status. (i) Except as provided in Section 5.2(e),
preserve and maintain, and cause each of its Subsidiaries to preserve and
maintain, its corporate existence and all rights, privileges, licenses,
approvals, franchises, properties and assets material to the normal conduct of
its business; comply, and cause each of its Subsidiaries to comply, in all
material respects with all Contractual Obligations and Requirements of Law,
except when the failure to maintain the existence of any such Subsidiary or to
so comply would not have a Material Adverse Effect; and (ii) except as
permitted under Section 5.2(m), preserve and maintain at all times its status
as a FHLMC approved Seller/Servicer, a HUD Direct Endorsement Lender and a VA
approved Lender in good standing and, with respect to FFCC, its status as a
FNMA approved Seller/Servicer and as a GNMA approved Issuer/Servicer.
(c) Inspection of Property; Books and Records; Discussions. (i)
Keep, and cause each of its Subsidiaries to keep, proper books of record and
account in which full, true and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all dealings and transactions in relation
to its business and activities, and, (ii) permit representatives of the Agent
and the Lenders (at no cost to such Borrower unless a Potential Default or an
Event of Default has occurred and is continuing) to visit and inspect any of
its properties and examine and make copies from any of its books and records
during normal business hours, upon reasonable advance notice and as often as
may reasonably be desired by the Agent, and to discuss the business,
operations, properties and financial and other condition of such Borrower and
its Subsidiaries with officers of such parties, and, with their independent
certified public accountants (if a representative of FFCC or DMC shall have
been given the right upon reasonable notice to be present by phone or in
person),
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and with the consent of such Borrower, which consent shall not be unreasonably
withheld, with employees of the Borrowers.
(d) Insurance. Maintain or cause to be maintained with
financially sound and reputable insurers, insurance with respect to its
properties and business, and the properties and business of its Subsidiaries,
against loss or damage of the kinds customarily insured against by reputable
companies in the same or similar businesses, such insurance to be of such types
and in such amounts (with such deductible amounts) as is customary for such
companies under similar circumstances, including errors and omissions coverage
and fidelity coverage in form and substance acceptable under Agency guidelines,
and furnish the Agent on request evidence of all such insurance.
(e) Payment of Taxes and Claims, Etc. Pay, and cause each of its
Subsidiaries to pay, (i) all taxes, assessments and governmental charges
imposed upon it or upon its property, and (ii) all genuine claims (including
claims for labour, materials, supplies or services) that might, if unpaid,
become a Lien upon its property, unless, in each case, the validity or amount
thereof is being contested in good faith by appropriate proceedings and such
Borrower or such Subsidiary has maintained adequate reserves in accordance with
GAAP with respect thereto or has posted a bond in respect thereof satisfactory
to the Required Lenders.
(f) GNMA Acknowledgment Agreement. Obtain, execute and deliver an
Acknowledgment Agreement from GNMA relating to the acknowledgment of the
Servicing Collateral Agent's security interest in the GNMA Servicing Portfolio,
if and when requested by the Administrative Agent in its sole discretion.
(g) [Reserved]
(h) Further Documents. Execute and deliver or to cause to be
executed and delivered to the Agent or the Collateral Agents on behalf of the
Lenders from time to time such confirmatory or supplementary security
agreements, financing statements, reaffirmations and consents and such other
documents, instruments or agreements as the Agent may reasonably request, that
are in the Agent's reasonable judgment necessary or desirable to obtain for the
Agent on behalf of the Lenders the benefit of the Loan Documents and the
Collateral.
(i) Recording. Cause each Power of Attorney to be "protocolized"
under the laws of Puerto Rico and filed in the Registry of Powers of Attorneys
and ▇▇▇▇▇, and file each Statement of Accounts Receivable in the applicable
registry, and pay any and all fees and charges in connection therewith.
(j) Recourse/Purchase Obligations. If (i) FFCC sells
Mortgage-Backed Securities or Mortgage Loans and the terms of such sale
obligate FFCC to repurchase (whether conditionally or unconditionally) such
Mortgage-Backed Securities or Mortgage Loans or if FFCC has retained recourse
obligations with respect thereto and (ii) the then aggregate amount of all such
repurchase and recourse obligations of FFCC (in connection with the
contemplated transaction and all previous transactions) exceeds $250,000,000,
then FFCC shall give notice thereof to the Agent within five (5) Business Days
of such sale. If FFCC shall have assumed recourse obligations with respect to
Mortgage-Backed Securities or Mortgage Loans included in its Servicing
Portfolio and the aggregate
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amount of such recourse obligations of FFCC with respect to Mortgage-Backed
Securities or Mortgage Loans included in its Servicing Portfolio exceeds
$250,000,000, then FFCC shall give notice thereof to the Agent within five (5)
Business Days after such assumption. Notwithstanding the foregoing, FFCC shall
obtain the prior written consent of the Agent acting at the direction of the
Required Lenders before entering into any of the transactions described in the
preceding two sentences if, in the reasonable judgment of the management of
FFCC, such transaction (or the aggregate of such transaction with all previous
transactions for which obligations still exist) could result in a decrease in
FFCC's Book Net Worth by a Material Amount.
SECTION 5.2 NEGATIVE COVENANTS OF EACH BORROWER.
Each Borrower hereby covenants and agrees that, as long as any
Obligations remain unpaid or any Lender has any Commitment hereunder, such
Borrower shall not, directly or indirectly:
(a) Liens. Create, incur, assume or suffer to exist, or permit
any Subsidiary to create, incur, assume or suffer to exist, any Lien upon the
Collateral or the Servicing Portfolio now owned or hereafter acquired, except
in favor of the Secured Parties under the Security Agreements, other than:
(i) Liens or charges for current taxes, assessments or
other governmental charges that are not delinquent or which remain
payable without penalty;
(ii) Liens, deposits or pledges made to secure statutory
obligations, surety or appeal bonds, or bonds for the release of
attachments or for stay of execution, or to secure the performance of
bids and tenders or for purposes of like general nature in the
ordinary course of business of such Borrower or such Subsidiary;
(iii) if (x) the Facility 2 Commitments have been
terminated by the Borrowers, (y) all Facility 2 Loans and related
Obligations have been repaid or paid, respectively, by the Borrowers,
and (z) no Potential Default or Event of Default has occurred and is
continuing, (A) during the thirty (30) (or if applicable, sixty (60)
day) period described in the second proviso to Section 2.7(b), Liens
on the Servicing Portfolio other than a portion of the Servicing
Portfolio comprised of Mortgage Loans having an aggregate outstanding
principal balance of not less than $500,000,000, and (B) thereafter,
if the Borrowers and the Lenders have agreed upon the terms and
conditions upon which this Agreement and the Facility 1 Commitments
shall remain in effect (as contemplated in Section 2.7(b)), Liens on
that portion of the Servicing Portfolio not pledged to the Secured
Parties;
(iv) the interests of FNMA and FHLMC with respect to the
servicing rights relating to the underlying Mortgage Loans in the
Pledged Servicing Portfolio as set forth in acknowledgment agreements
with such Agencies and the interests of GNMA as set forth in the GNMA
Guide; and
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(v) involuntary Liens relating to liabilities not in
excess of $100,000 in the aggregate for each Borrower; provided that
such Borrower or such Subsidiary is making a diligent effort to remove
such Liens as soon as practicable.
(b) Change of Business. Except as permitted under Section 5.2(e),
engage in any type of business that is unrelated to the mortgage banking and
lending business and the servicing of mortgage loans or permit any of FFCC s
Subsidiaries to engage in any type of business other than financial services
(including, without limitation, any activity permitted for bank savings
associations or savings and loan or bank holding companies);
(c) Acquisitions. Except as permitted under Section 5.2(e),
purchase or acquire, or permit any of its Subsidiaries to purchase or acquire,
or incur liability for the purchase or acquisition of, or permit any of its
Subsidiaries or to incur liability for the purchase or acquisition of, any or
all of the assets or business of any Person (whether such purchase or
acquisition shall be by means of merger, stock purchase, asset purchase or
otherwise) other than (i) purchases and acquisitions in the ordinary course of
business as currently conducted and (ii) other purchases and acquisitions
relating to the mortgage banking and lending business and the servicing of
mortgage loans or other financial services (including, without limitation, any
activity permitted for bank savings associations or savings and loan or bank
holding companies).
(d) Transactions with Affiliates. Enter into, or permit any of
its Subsidiaries directly or indirectly to enter into, any transaction
(including the purchase, sale, lease or exchange of any property, the making or
borrowing of any loan or the rendering of any service) with any Affiliate on
terms that are less favorable to such Borrower or such Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates other
than the existing Master Production Agreement and the Master Purchase,
Servicing and Collection Agreement dated as of September 15, 1993 with Doral
Federal Savings as in effect on such date.
(e) Consolidation, Merger, Sale of Assets, Etc. (i) Enter into
any merger, consolidation or amalgamation, including any such transaction with
a regulated banking entity, or (ii) liquidate, wind-up or dissolve itself (or
suffer or permit any of the foregoing to occur) or (iii) sell, lease, assign,
transfer or otherwise dispose of, or permit any of its Subsidiaries to sell,
lease, assign, transfer or otherwise dispose of, more than twenty-five percent
(25%) of its assets based on the book value of all such assets as set forth in
the last audited financial statement of such Borrower whether now owned or
hereafter acquired, except that the following shall be permitted so long as no
Potential Default or an Event of Default has occurred and is continuing or
would result therefrom:
(A) the Borrowers may merge or consolidate with
another Person where FFCC is the surviving entity;
(B) the Borrowers may sell assets in the ordinary
course of business at fair market value (it being expressly agreed and
understood that the sale or other disposition of Mortgage-Backed
Securities and of Mortgage Loans with or without servicing released is
in the ordinary course of business and that the Borrowers may sell all
or a portion of its servicing rights to the extent and in the manner
permitted by Sections 5.2(d) and (h) hereof and by the Servicing
Security Agreement. Notwithstanding the foregoing, DMC may be
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merged into, become consolidated with or become a Subsidiary of any
Person that is a regulated banking entity so long as (x) FFCC (I)
becomes the sole borrower under the Loan Documents and affirms the
same pursuant to documentation reasonably satisfactory to Lenders and
Agent and (II) satisfies all the representations, warranties and
covenants hereunder, including the financial covenants, without DMC
being included in its consolidated and consolidating financial
statements; (y) no Potential Default or Event of Default exists at the
time of such event and after giving effect thereto; and (z) such event
does not have a Material Adverse Effect; provided that clause (x)
above shall not apply to any transaction permitted by Section 5.2 (e)
(D);
(C) the Borrowers may sell all of the outstanding
stock or assets of Centro Hipotecario de Puerto Rico, Inc.; and
(D) FFCC may become a bank holding company
through the conversion of Doral Federal Savings Bank into a commercial
bank.
(f) VA Guaranties and FHA Insurance. Commit any act that would
invalidate any VA guarantee or FHA insurance relating to any Mortgage Loan
pledged to the Secured Parties as Collateral under the Warehousing Security
Agreement if, after giving effect to such action, the then aggregate
outstanding principal amount of the Facility 1 Loans and Swing-Line Loans and
Facility 1 Acceptance Obligations would be less than the Collateral Value of
the Facility 1 Borrowing Base.
(g) ERISA. Take, or permit any of its Subsidiaries to take, any
of the following actions:
(i) Terminate or withdraw from any Plan so as to result
in any material liability to the PBGC;
(ii) Engage in or permit any Person to engage in any
Prohibited Transaction involving any Plan that would subject such
Borrower or any of its Subsidiaries to any material tax, penalty or
other liability;
(iii) Incur or suffer to exist any material Accumulated
Funding Deficiency, whether or not waived, involving any Plan;
(iv) Allow or suffer to exist any event or condition that
presents a risk of incurring a material liability to the PBGC;
(v) Amend any Plan so as to require the posting of
security under section 401(a)(29) of the Code; or
(vi) Fail to make payments required under section 412(m)
of the Code and section 302(e) of ERISA that would subject such
Borrower or any of its Subsidiaries to any material tax, penalty or
other liability.
(h) Transfer to Affiliates. Subject to the proviso in subsection
(e) above, sell, assign or otherwise transfer any of its assets to any
Affiliate of a Borrower without the prior written consent
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of the Required Lenders, or permit any of its Subsidiaries to sell, assign or
otherwise transfer any of their respective assets, to any Affiliate of a
Borrower without the prior written consent of the Required Lenders other than
inter- company dividends to Borrowers or Borrowers Subsidiaries; provided that
(I) any Subsidiary of a Borrower may, subject to subsection (e) above, sell,
assign or otherwise transfer any of their respective assets to such Borrower,
(II) DMC may, subject to subsection (e) above, sell, assign or otherwise
transfer its assets to FFCC and (III) FFCC may make capital investments in its
Subsidiaries.
(i) Subsidiaries. Form or cause to be formed after the date
hereof any Subsidiaries of the Borrowers without prior notice to the Agent.
(j) Margin Regulations. Use any or all of the proceeds of any
Loan or any Acceptance (i) to purchase or carry Margin Stock or extend credit
to others for the purpose of purchasing or carrying Margin Stock or (ii) in any
manner that will violate or be inconsistent with the provisions of Regulation
G, T, U or X of the Board.
(k) Funding Agreement. At any time after the execution and
delivery of the Funding Agreement by the parties thereto, fail to comply with
any or all of its obligations under the Funding Agreement or amend, modify,
supplement, terminate or assign the Funding Agreement.
(l) Hedging Policy. Fail to comply in all material respects with
the Hedging Policy or change the Hedging Policy in any material way, or
terminate the Hedging Policy without prior notice to the Agent.
(m) Agency Approvals. Fail to maintain the Agency approvals
described in Section 4.12 as a result of a change in business plan of the
Borrower without the prior consent of the Agent and Lenders thereto, which
consent shall not be unreasonably withheld as long as no Material Adverse
Effect would result therefrom.
(n) Custody Account. Take any action that would cause the
custodial account maintained with the Warehousing Collateral Agent into which
Book-Entry MBS's relating to Mortgage Loans included in the Facility 1
Borrowing Base shall be issued to cease to be in effect.
(o) Negative Pledges. Unless (i) the Facility 2 Commitments have
been terminated by the Borrowers, (ii) all Facility 2 Loans and related
Obligations have been repaid or paid, respectively, by the Borrowers, (iii) no
Potential Default or Event of Default has occurred and is continuing, and (iv)
the Borrowers and the Lenders have agreed upon the terms and conditions upon
which this Agreement and the Facility 1 Commitments shall remain in effect (as
contemplated in Section 2.7(b)), agree with any Person or Persons (other than
with the Lenders pursuant to this Agreement) not to create, incur, assume or
suffer to exist, or permit any Subsidiary to create, incur, assume or suffer to
exist, any Lien upon the Servicing Portfolio or any rights relating thereto,
including, without limitation, any rights to receive payments in connection
with the Servicing Portfolio (including, without limitation, any reimbursement
of principal and interest advances, taxes and insurance advances and any other
servicing advances).
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SECTION 5.3 ADDITIONAL NEGATIVE COVENANTS.
Each Borrower hereby covenants and agrees that, as long as any
Obligations remain unpaid or any Lender has any Commitment hereunder, such
Borrower shall not at any time, directly or indirectly:
(a) Total Liabilities. Permit FFCC on a consolidated basis
(excluding any Subsidiaries that are not primarily engaged primarily in the
business of mortgage banking as reasonably determined by the Agent) to incur
Total Liabilities in excess of the sum of (i) one-hundred percent (100%) of
"Cash" or "cash equivalents"; (ii) ninety-five percent (95%) of the sum of (A)
"Mortgage Loans held for sale" and (B) "Mortgage-backed securities held for
trading"; (iii) ninety percent (90%) of "Accrued interest receivable"; (iv)
eighty percent (80%) of the sum of (A) Mortgage-backed securities held to
maturity", and (B) "Accounts receivable and mortgage servicing advances"; (v)
eighty percent (80%) of "prepaid and other assets" (excluding investment in
Subsidiaries); (vi) fifty percent (50%) of the sum of (A) "Property, leasehold
improvements and equipment" and (B) "Real estate held for sale"; and (vii)
0.95% of the principal amount of Mortgage Loans owned by Persons not affiliated
with FFCC or DMC or any of their Affiliates (unless covered by a Permitted
Affiliate Servicing Agreement) for which FFCC or DMC owns the direct servicing
rights. All quoted terms used in the preceding sentence shall have the same
meanings, and shall continue to be calculated and classified in the same
manner, as the terms used in the balance sheet of FFCC and its consolidated
Subsidiaries referred to in Section 4.4(a).
(b) Adjusted Tangible Net Worth. Permit Adjusted Tangible Net
Worth at any time to be less than the greater of (such greater number, the
"Minimum ATNW") (i) Prior Year Minimum ATNW and (ii) eighty-five percent (85%)
of Adjusted Tangible Net Worth as of the end of the immediately preceding
fiscal year. As used herein "Prior Year Minimum ATNW" shall mean Minimum ATNW
as of the end of the penultimate preceding fiscal year. For example, for
fiscal year 1996, Prior Year Minimum ATNW is determined as of the end of fiscal
year 1994. The parties acknowledge that Minimum ATNW determined as of the end
of fiscal year 1994 is $87,700,000 and that 85% of Adjusted Tangible Net Worth
as of the end of fiscal year 1995 is $97,680,619. Accordingly, Minimum ATNW at
any time during fiscal year 1996 is $97,680,619.
(c) Book Net Worth. Permit Book Net Worth at any time to be less
than the greater of (such greater number, the "Minimum BNW") (i) Prior Year
Minimum BNW and (ii) eighty-five percent (85%) of the Book Net Worth as of the
end of the immediately preceding fiscal year. As used herein "Prior Year
Minimum BNW" shall mean Minimum BNW as of the end of the penultimate preceding
fiscal year. For example, for fiscal year 1996, Prior Year Minimum BNW is
determined as of the end of fiscal year 1994. The parties acknowledge that
Minimum BNW determined as of the end of fiscal year 1994 is $84,100,000 and
that 85% of Book Net Worth as of the end of fiscal year 1995 is $95,711,904.
Accordingly, Minimum BNW at any time during fiscal year 1996 is $95,711,904.
(d) [Reserved]
(e) Servicing Portfolio. Permit FFCC on a consolidated basis
(excluding any Subsidiaries that are not primarily engaged in the business of
mortgage banking as reasonably
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determined by the Agent) to maintain a Servicing Portfolio of mortgage loans
with an aggregate outstanding principal balance of less than $1,800,000,000 or
such lesser amount as shall be agreed by the Lenders in their sole discretion.
(f) Pledged Servicing Portfolio. Permit (i) FFCC and DMC to
maintain mortgage loans in that portion of the Pledged Servicing Portfolio
consisting of the FNMA/FHLMC Servicing Portfolio and the GNMA Servicing
Portfolio to have an aggregate outstanding principal balance of less than
$1,000,000,000, or (ii) the Collateral Value of the Pledged Servicing Portfolio
to be less than $10,000,000.
ARTICLE 6
EVENTS OF DEFAULT
SECTION 6.1 EVENTS OF DEFAULT.
If one or more of the following events (each an "Event of
Default") shall have occurred and be continuing:
(a) Payments. (i) The Borrowers shall fail to pay when due
(whether at scheduled maturity, upon mandatory repayment or otherwise) any
principal of any Note or any Acceptance Obligation including any interest or
fee due with respect to any Acceptance Obligation; or (ii) the Borrowers shall
fail to pay within three (3) Business Days after the due date thereof any
interest on any Note or any other Obligation, or otherwise;
(b) Covenants Without Notice. The Borrowers shall fail to observe
or perform any covenant or agreement contained in Sections 5.1(b)(i), 5.1(f),
5.2 and 5.3 or if a default beyond applicable grace and cure periods shall
occur under the Funding Agreements; provided that any violation of Section
5.2(a) that is attributable to the existence of an involuntary Lien on the
Collateral (other than an involuntary Lien expressly permitted by Section
5.2(a)) shall not constitute an Event of Default until thirty (30) days after
the imposition thereof if at all times during such thirty (30) day period the
Borrowers are making a diligent effort by appropriate means to remove such
Lien);
(c) Covenants With Seven Business Day Grace Period. The Borrowers
shall fail to observe or perform any covenant or agreement contained in
Sections 5.1(a), 5.1(b)(ii) and 5.1(c)(ii), and such failure shall remain
unremedied for seven (7) Business Days after oral notice thereof to an
Authorized Officer (which shall be confirmed in writing (which may be by
facsimile) before the end of such seven (7) Business Day period);
(d) Covenants With Thirty Day Grace Period. The Borrowers shall
fail to observe or perform any covenant or agreement contained in any Loan
Document, other than those referred to in Sections 6.1(a), (b) or (c), and, if
capable of being remedied, such failure shall remain unremedied for thirty (30)
days after the earlier of (i) either Borrower's obtaining knowledge thereof or
(ii) notice thereof shall have been given to an Authorized Officer by any
Lender or the Agent before the end
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of such thirty (30) day period); provided that if such failure is capable of
being remedied but only in a period of more than thirty (30) days, then such
failure shall not constitute an Event of Default until sixty (60) days after
the earlier of the above dates if each Borrower is making a diligent effort by
appropriate means to observe or perform such covenant and there is otherwise no
Material Adverse Effect as a result of such delay;
(e) Representations. Any representation, warranty or statement
made or deemed to be made by either Borrower or any of their respective
officers under or in connection with any Loan Document shall have been
inaccurate, incomplete or incorrect in any respect when made or deemed to be
made and such inaccuracy, incompleteness or incorrectness could have a Material
Adverse Effect;
(f) Non-Payment of Other Indebtedness. Either Borrower shall fail
to make any payment of principal of or interest on any of its Indebtedness
(other than the Obligations) exceeding the Material Amount in the aggregate
when due (whether at stated maturity, by acceleration, on demand or otherwise)
after giving effect to any applicable grace period;
(g) Defaults Under Other Agreements. Either Borrower shall fail
to observe or perform any covenant or agreement contained in any agreement or
instrument relating to any of its Indebtedness (other than the Obligations) in
excess of the Material Amount in the aggregate within any applicable grace
period, or any other event shall occur if the effect of such failure or other
event is to accelerate, or to permit the holder of such Indebtedness or any
other Person to accelerate, the maturity of such Indebtedness; or any such
Indebtedness shall be required to be prepaid (other than by a regularly
scheduled required prepayment) in whole or in part prior to its stated
maturity;
(h) Bankruptcy. Either Borrower shall commence a voluntary case
concerning itself under Title 11 of the United States Code entitled
"Bankruptcy" as now or hereafter in effect, or any successor thereto (the
"Bankruptcy Code"); or any involuntary case is commenced against either
Borrower and the petition is not dismissed within sixty (60) days after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or any substantial part of the property
of either Borrower; or either Borrower commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law or there is commenced
against either Borrower any such proceeding that remains undismissed for a
period of sixty (60) days; or either Borrower is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or either Borrower shall fail to pay, or shall state
that it is unable to pay, or shall be unable to pay, its debts generally as
they become due; or either Borrower shall call a meeting of its creditors with
a view to arranging a composition or adjustment of its debts; or either
Borrower shall by any act or failure to act indicate its consent to, approval
of or acquiescence in any of the foregoing; or any corporate action is taken by
either Borrower for the purpose of effecting any of the foregoing;
(i) Money Judgment. A judgment or order for the payment of money
in excess of the Material Amount shall be rendered against either Borrower and
such judgment or order shall continue unsatisfied (in the case of a money
judgment) and in effect for a period of thirty (30) days
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during which execution shall not be effectively stayed or deferred (whether by
action of a court, by agreement or otherwise);
(j) ERISA. (i) Any Reportable Event or a Prohibited Transaction
shall occur with respect to any Plan; (ii) a notice of intent to terminate a
Plan under section 4041 of ERISA shall be filed; (iii) a notice shall be
received by the plan administrator of a Plan that the PBGC has instituted
proceedings to terminate a Plan or appoint a trustee to administer a Plan; (iv)
any other event or condition shall exist that might, in the opinion of the
Required Lenders, constitute grounds under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan; (v)
the Borrowers or any ERISA Affiliate shall withdraw from a Multiemployer Plan
under circumstances that the Required Lenders determine could have a material
adverse effect on the financial condition of either Borrower; and in case of
the occurrence of any event or condition described in clauses (i) through (v)
above, such event or condition together with all other such events or
conditions, if any, could subject either Borrower to any tax, penalty or other
liabilities in the aggregate material in relation to the business, operations,
property or financial or other condition of either Borrower;
(k) Loan Documents. Any of the Loan Documents shall cease for any
reason to be in full force and effect, a breach by the Borrowers under any of
the Acknowledgement Agreements shall occur, or any action shall be taken by any
Person to terminate, revoke or discontinue, or to assert the invalidity or
unenforceability of, any of the Loan Documents; or
(l) Security Interests. The Secured Parties shall cease for any
reason (other than pursuant to the terms of the respective Security Agreements)
to have valid, security interests in the Collateral (with such priority as set
forth in the Loan Documents) or perfected security interests in the collateral
specifically described in Section 4.11(b), or any Person shall take any action
to discontinue or to assert the invalidity or unenforceability of such security
interests;
THEN, the Agent shall notify the Lenders of such Event of Default and may, and
upon the written request of the Required Lenders, shall, by written notice to
the Borrower, take any or all of the following actions: (A) declare the
Commitments terminated, whereupon the Commitment of each Lender shall terminate
immediately without any other notice of any kind; and (B) declare the principal
of and any accrued interest on the Loans, and all other Obligations (including
the Acceptance Obligations, to be, whereupon the same shall become, forthwith
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrowers; provided that, if an
Event of Default specified in Section 6.1(h) shall occur, the Commitments shall
terminate and all Obligations shall become immediately due and payable
automatically without the giving of any such notice and without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrowers.
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ARTICLE 7
THE AGENT
SECTION 7.1 APPOINTMENT OF AGENT.
Each Lender hereby designates Bankers Trust Company as Agent
to act as herein specified. Each Lender hereby irrevocably authorizes, and
each holder of any Note by the acceptance of a Note shall be deemed irrevocably
to authorize, the Agent to take such action on its behalf under the provisions
of this Agreement and the other Loan Documents and any other instruments and
agreements referred to herein or therein and to exercise such powers and to
perform such duties hereunder or thereunder as are specifically delegated to or
required of the Agent by the terms hereof and thereof and such other powers as
are reasonably incidental thereto. The Agent may perform any of its duties
hereunder or thereunder by or through its agents or employees.
SECTION 7.2 NATURE OF DUTIES OF AGENT.
The Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement and the other Loan Documents.
Neither the Agent nor any of its officers, directors, employees or agents shall
be liable for any action taken or omitted hereunder or thereunder or in
connection herewith or therewith, unless caused by its or their gross
negligence or willful misconduct. The duties of the Agent shall be mechanical
and administrative in nature; the Agent shall not have by reason of this
Agreement or any other Loan Document a fiduciary relationship in respect of any
Lender; and nothing in this Agreement or any other Loan Document, express or
implied, is intended to or shall be so construed as to impose upon the Agent
any obligations in respect of this Agreement or any other Loan Document except
as expressly set forth herein or therein.
SECTION 7.3 LACK OF RELIANCE ON AGENT.
(a) Independently and without reliance upon the Agent, each
Lender, to the extent it deems appropriate, has made and shall continue to make
(i) its own independent investigation of the financial condition and affairs of
each Borrower and its Affiliates in connection with the taking or not taking of
any action in connection herewith and (ii) its own appraisal of the
creditworthiness of each Borrower and its Affiliates, and, except as expressly
provided in this Agreement, the Agent shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Lender with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Loans or at any time or times thereafter.
(b) The Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection with this
Agreement or any other Loan Document or for the execution, effectiveness,
genuineness, validity, enforceability, collectibility, priority or sufficiency
of this Agreement or any other Loan Document or for the sufficiency of the
Collateral or the validity, perfection or priority of any security interest in
the Collateral or the financial condition of each Borrower or its Affiliates or
be required to make any inquiry concerning either the performance or observance
of any of the terms, provisions or conditions of this Agreement or any other
Loan
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Document, or the financial condition of each Borrower or its Affiliates, or the
existence or possible existence of any Potential Default or Event of Default.
SECTION 7.4 CERTAIN RIGHTS OF AGENT.
If the Agent shall request instructions from the Required
Lenders, the Required Facility 1 Lenders or the Required Facility 2 Lenders
with respect to any act or action (including the failure to act) in connection
with this Agreement or any other Loan Document, the Agent shall be entitled to
refrain from such act or taking such action unless and until the Agent shall
have received instructions from the Required Lenders, the Required Facility 1
Lenders or the Required Facility 2 Lenders, as the case may be; and the Agent
shall not incur liability to any Lender by reason of so refraining. Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against the Agent as a result of the Agent acting or refraining from acting
hereunder or under any other Loan Document in accordance with the instructions
of the Required Lenders, the Required Facility 1 Lenders or the Required
Facility 2 Lenders, as the context may require. The provisions of this Section
7.4 are not intended to supersede the provisions of Section 8.2 that require
all of the Lenders to approve certain actions under the Loan Documents.
SECTION 7.5 RELIANCE BY AGENT.
The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any notice, believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person. The Agent may
consult with legal counsel (including with the consent of FFCC, which consent
shall not be unreasonably withheld, counsel for FFCC or DMC), independent
public accountants (including those retained by FFCC or DMC if a representative
of FFCC or DMC, as applicable, shall have been given the right upon reasonable
notice to be present by phone or in person during such consultation) and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
SECTION 7.6 INDEMNIFICATION OF AGENT.
To the extent the Agent is not reimbursed and indemnified by
FFCC or DMC, each Lender will reimburse and indemnify the Agent, in proportion
to its respective Commitments (before giving effect to any termination of the
Commitments pursuant to the terms of this Agreement) from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including reasonable attorneys fees and disbursements)
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in performing its duties hereunder
and under the other Loan Documents, in any way relating to or arising out of
this Agreement or the other Loan Documents; provided that no Lender shall be
liable for 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.
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SECTION 7.7 AGENT IN ITS INDIVIDUAL CAPACITY.
With respect to its obligation to lend under this Agreement,
the Loans made by it and the Notes issued to it, the Agent shall have the same
rights and powers hereunder as any other Lender or holder of a Note and may
exercise the same as though it were not performing the duties specified herein;
and the terms "Lenders," "Required Lenders," "Required Facility 1 Lenders,"
"Required Facility 2 Lenders", "holders of Notes" or any similar terms shall,
unless the context clearly otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of banking, trust, financial advisory or other
business with each Borrower or any Affiliate of the Borrowers as if it were not
performing the duties specified herein, and may accept fees and other
consideration from the Borrowers and any Affiliates of the Borrowers for
services in connection with this Agreement and the other Loan Documents and
otherwise without having to account for the same to the Lenders.
SECTION 7.8 HOLDERS OF NOTES.
The Agent may deem and treat the payee of any Note as the
owner thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or notes issued in exchange therefor.
SECTION 7.9 SUCCESSOR AGENT.
(a) The Agent may resign as Agent hereunder at any time by giving
written notice thereof to the Lenders and the Borrowers if (i) it believes that
its duties hereunder present an actual or potential conflict of interest with
any other business of the Agent or (ii) it determines at any time that the
introduction of, or any change in, any applicable law, rule, regulation, order
or decree or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance by the Agent with any request or directive (whether or
not having the force of law) of any such Authority, shall make it unlawful or
improper for the Agent to continue as Agent hereunder. Upon any such
resignation or any removal of the Agent pursuant to Section 7.9(b), the
Required Lenders shall have the right, upon five (5) days notice to the
Borrowers, to appoint a successor Agent, which shall be a Lender. If no
successor Agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within thirty (30) days after the retiring
Agent's giving of notice of resignation, then, upon five (5) days notice to
the Borrowers, the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a bank which maintains an office in the United
States, or a commercial bank organized under the laws of the United States of
America or of any State thereof, or any Affiliate of such bank, having a
combined capital and surplus of at least $250,000,000.
(b) The Agent may be removed by the unanimous vote of all the
Lenders hereunder (not including the vote of the Agent if the Agent is also a
Lender hereunder) if (i) the Agent has engaged in willful misconduct with
respect to its obligations and duties hereunder and (ii) has failed to cure
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such willful misconduct after sixty (60) days notice by the Lenders to the
Agent of such willful misconduct.
(c) Any resignation or removal of the Agent hereunder shall be
effective only upon the acceptance of any appointment as Agent hereunder by a
successor Agent. Upon such acceptance, such successor Agent shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
VII shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent under this Agreement.
ARTICLE 8
MISCELLANEOUS PROVISIONS
SECTION 8.1 NOTICES.
(a) Except as otherwise expressly set forth herein, all notices,
requests and other communications to any party hereunder shall be in writing
(including telecopy or similar teletransmission or writing) and shall be given
to such party at its address or telecopy number set forth on Exhibit M hereto
or such other address or telecopy number as such party may hereafter specify by
notice to the Agent and the Borrowers. Each such notice, request or other
communication shall be effective (a) if given by telecopy, when such telecopy
is transmitted to the telecopy number specified herein and the receipt thereof
is confirmed by the recipient or (b) if sent by overnight courier (with all
charges paid) providing for confirmation of delivery, then upon confirmation of
delivery by such courier; provided that notices to the Agent pursuant to
Article II shall not be effective until received.
(b) Any notice required to be given to one or more Borrowers
hereunder or under any other Loan Document shall be effective if delivered to
FFCC, it being the intent that notice to FFCC is effective notice to DMC. In
connection therewith, DMC hereby irrevocably appoints FFCC as its agent to
receive any and all notices hereunder or under any other Loan Document and such
appointment is coupled with an interest. In addition to the foregoing, the
Agent and the Lenders shall be entitled to, but shall not be required to, rely
on notice from either Borrower as constituting notice from both Borrowers.
SECTION 8.2 AMENDMENTS, ETC.
No amendment or waiver of any provision of any Loan Document,
nor consent to any departure by the Borrowers therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Borrowers and
the Required Lenders, and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided that (a) notwithstanding anything else contained herein, no
amendment, waiver or consent shall, unless in writing and signed by all the
Lenders, do any of the following: (i) waive or change Section 5.2(e) or any of
the conditions specified in Article III, (ii) increase the Commitments of the
Lenders or subject the Lenders to any additional obligations, (iii) reduce the
principal of, or
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interest on, the Notes or the amount of the Acceptance Obligations or reduce
any fees payable to the Lenders hereunder, (iv) postpone any date fixed for any
payment in respect of principal of, or interest on, the Notes or payment of any
Acceptance Obligations, or the payment of any fees payable hereunder, or waive
any Event of Default under Section 6.1(a), (v) change the percentage of the
Commitments, the definitions of "Required Lenders," "Collateral Value of the
Facility 1 Borrowing Base," "Collateral Value of the Facility 2 Tranche A
Borrowing Base," "Collateral Value of the Facility 2 Tranche B Borrowing Base,"
"Collateral Value of the Pledged Servicing Portfolio", "Eligible Conforming
Mortgage Loan," "Eligible Mortgage-Backed Security," "Eligible Mortgage Loan,"
"Eligible Non-Conforming Mortgage Loan," "Eligible REO Property" or "Eligible
Servicing Receivable" (or any definitions contained in such definitions), or
the number or identity of Lenders that is required for any or all of the
Lenders to take any action hereunder, (vi) release the Lien of the Secured
Parties on any of the Collateral, except as provided in the Security Agreements
or (vii) amend this Section 8.2 or Section 8.6; (b) no amendment, waiver or
consent shall, unless in writing and signed by the Agent, affect the rights or
duties of the Agent under this Agreement or any other Loan Document; and (c) no
amendment, waiver or consent shall, unless in writing and signed by Bankers
Trust, amend, waive or modify Section 2.1(e) or Section 2.4(c), (d) or (e) or
otherwise affect the rights or obligations of Bankers Trust with respect to
Swing-Line Loans and Acceptances.
SECTION 8.3 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Agent or any Lender in
exercising any right or remedy hereunder or under any other Loan Document and
no course of dealing between the Borrowers, on the one hand, and the Agent or
any Lender, on the other hand, shall operate as a waiver thereof, nor shall any
single or partial exercise of any right or remedy hereunder or under any other
Loan Document preclude any other or further exercise thereof or the exercise of
any other right or remedy hereunder or thereunder. The rights and remedies
expressly provided herein and in the other Loan Documents are cumulative and
not exclusive of any rights or remedies that the Agent or any Lender would
otherwise have. No notice to or demand on the Borrowers not required hereunder
or under the other Loan Documents in any case shall entitle the Borrowers to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Agent or any Lender to any other or
further action in any circumstances without notice or demand.
SECTION 8.4 PAYMENT OF EXPENSES, ETC.
The Borrowers shall:
(a) (i) pay all reasonable out-of-pocket costs and expenses
of the outside legal counsel of the Agent in connection with the preparation,
execution and delivery of, this Agreement and the other Loan Documents, or any
amendment, modification or supplement hereof or thereof, including the
documentation required pursuant to Section 3.1(c) and the closings contemplated
thereunder, and (ii) pay all reasonable out-of-pocket costs and expenses of the
Agent and each Lender in the preservation of rights under, enforcement of, and,
after the occurrence of a Potential Default or an Event of Default, the
refinancing, the renegotiating or the restructuring of, this Agreement and the
other Loan Documents and the documents and instruments referred to herein and
therein including in connection with any bankruptcy, insolvency, liquidation,
reorganization or similar proceeding and any amendment, waiver or consent
relating hereto and thereto (including the
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reasonable fees and disbursements of counsel (including allocated costs of
internal counsel) for the Agent and, in the case of enforcement, for each of
the Lenders);
(b) pay and hold the Agent and each of the Lenders harmless from
and against any and all present and future stamp and other similar taxes with
respect to the foregoing matters and save the Agent and each Lender harmless
from and against any and all liabilities with respect to or resulting from any
delay or omission to pay such taxes; and
(c) indemnify the Agent and each Lender, and their respective
officers, directors, employees, representatives and agents from, and hold each
of them harmless against, any and all out-of-pocket costs, losses, liabilities,
claims, damages or expenses actually incurred by any of them (whether or not
any of them is designated a party thereto) arising out of or by reason of any
investigation, litigation or other proceeding related to any actual or proposed
use by the Borrowers of the proceeds of any of the Loans or the Borrowers
entering into and performing of the Loan Documents to which they are a party,
or arising out of the creation Acceptances or the Acceptance Obligations
including the reasonable fees and disbursements of counsel (including allocated
costs of internal counsel) incurred in connection with any such investigation,
litigation or other proceeding; provided that neither the Agent nor any Lender
shall have the right to be indemnified hereunder for its own gross negligence
or willful misconduct. If and to the extent that the obligations of the
Borrowers under this Section 8.4 are unenforceable for any reason, the
Borrowers hereby agrees to make the maximum contribution to the payment and
satisfaction of such obligations that is permissible under applicable law.
SECTION 8.5 RIGHT OF SETOFF.
Subject to Section 2.16, in addition to and not in limitation
of all rights of offset that any Lender may have under applicable law, for so
long as any Event of Default has occurred and is continuing and whether or not
any Lender has made any demand or the Obligations have matured, such Lender
shall have the right to appropriate and apply to the payment of the Obligations
all deposits (general or special, time or demand, provisional or final) then or
thereafter held by, and other indebtedness or property then or thereafter owing
to the Borrowers by, such Lender, whether or not related to any Loan Document
or any transaction hereunder.
SECTION 8.6 BENEFIT OF AGREEMENT.
(a) This Agreement shall be binding upon and inure to the benefit
of and be enforceable by the respective successors and assigns of the parties
hereto; provided that neither of the Borrowers may assign or transfer any of
its interest or delegate any of its obligations under the Loan Documents
without the prior written consent of the Lenders and any such assignment or
transfer without the prior written consent of the Lenders shall be null and
void.
(b) Subject to the provisions of Section 2.13(c), any Lender may
make, carry or transfer Loans at, to or for the account of, any of its branch
offices or the office of an Affiliate of such Lender.
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(c) Subject to the limitations set forth below, no Lender may
assign its rights or delegate its obligations under this Agreement and the
other Loan Documents to any other financial institution without the prior
consent of the Agent and the Borrowers (such consent not to be unreasonably
withheld) and provided that (i) no Lender may make an assignment hereunder to a
Person (other than an Affiliate of such Lender or an existing Lender) that is
not a financial institution; and (ii) an assignment fee in the amount of $2,500
for each assignment hereunder shall be payable to the Agent by the applicable
assignee. Any assignment or delegation specifically prohibited by the
preceding sentence shall be null and void. Notwithstanding the foregoing, any
Lender may assign its rights and delegate its obligations under this Agreement
and the other Loan Documents to any Affiliate of such Lender without notice to
or consent by the Borrowers, the Agent, or any other Person, provided the fee
set forth in the proviso to the immediately preceding sentence shall be paid.
In the case of an assignment by a Lender, upon notice thereof by such Lender to
the Borrowers and the Agent, the assignee shall have, to the extent of such
assignment (unless otherwise provided thereby), the same rights and benefits as
it would have if it were a Lender under the Loan Documents and the holder of a
Note and, if the assignee has expressly assumed, for the benefit of the
Borrowers, the assignor Lender's obligations hereunder, such assignor Lender
shall be relieved of its obligations hereunder to the extent of such assignment
and assumption.
(d) Each Lender may transfer, grant or assign participations in
all or any part of such Lender's interests and obligations hereunder pursuant
to this Section to another financial institution, provided that (i) such Lender
shall remain a "Lender" for all purposes of this Agreement and the transferee
of such participation shall not constitute a Lender hereunder and (ii) no
participant under any such participation shall have rights to approve any
amendment to or waiver of this Agreement or any other Loan Document except to
the extent such amendment or waiver would (x) extend the final scheduled
maturity of any of the Loans or the Commitment in which such participant is
participating, (y) reduce the interest rate (other than as a result of waiving
the applicability of any post-default increases in interest rates) or Fees
applicable to any of the Loans, Commitments or Acceptances or postpone the
payment of any thereof or (z) release any collateral under the Security
Agreements. In the case of any such participation, the participant shall not
have any rights under this Agreement or any of the other Loan Documents (the
participant's rights against the granting Lender in respect of such
participation to be those set forth in the agreement with such Lender creating
such participation) and all amounts payable by the Borrowers hereunder shall be
determined as if such Lender had not sold such participation, provided that
such participant shall be entitled to receive additional amounts under Sections
2.13, 2.14 and 2.15 on the same basis as if it were a Lender.
(e) Any Lender may furnish any information concerning the
Borrowers and its Affiliates in the possession of such Lender from time to time
to Affiliates, participants and assignees, and prospective participants and
assignees, of such Lender. No Lender or its Affiliates may furnish such
information to any prospective assignee or participant without the prior
written consent of FFCC, which consent will not be unreasonably withheld. Any
prospective assignee or participant shall be required to execute a
confidentiality agreement in the form of Exhibit Q before receiving any such
information.
(f) Any Lender may at any time pledge all or any portion of its
rights under the Loan Documents to a Federal Reserve Bank without notice to or
consent of either Borrower, the Agent
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or any other Lender. No such pledge shall release the transferor Lender from
its obligations hereunder.
SECTION 8.7 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND UNDER THE NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS TO WHICH EITHER BORROWER IS A PARTY MAY BE BROUGHT
IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ LOCATED IN NEW YORK COUNTY OR OF THE
UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWERS HEREBY ACCEPTS
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. THE PARTIES HERETO HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVE TRIAL BY JURY, AND, TO THE MAXIMUM EXTENT PERMITTED
BY APPLICABLE LAW, EACH OF THE BORROWERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED
ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OR MAINTAINING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS.
(c) EACH OF THE BORROWERS IRREVOCABLY AND UNCONDITIONALLY CONSENTS
TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO EACH SUCH BORROWER AT ITS SAID ADDRESS,
SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING. IN
ADDITION, EACH BORROWER HEREBY IRREVOCABLY APPOINTS CT CORPORATION, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (THE "PROCESS AGENT") TO RECEIVE, FOR IT AND
ON ITS BEHALF, SERVICE OF PROCESS IN ANY PROCEEDINGS OR ACTIONS IN NEW YORK.
IF FOR ANY REASON THE PROCESS AGENT IS UNABLE TO ACT AS SUCH, EACH BORROWER
WILL PROMPTLY NOTIFY THE AGENT AND WITHIN THIRTY (30) DAYS APPOINT A SUBSTITUTE
PROCESS AGENT ACCEPTABLE TO THE AGENT.
(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR ANY
LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST EITHER BORROWER IN ANY OTHER
JURISDICTION.
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(e) EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER
IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION 8.7, ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. THIS WAIVER IS MADE KNOWINGLY
AND VOLUNTARILY.
SECTION 8.8 COUNTERPARTS.
This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which
when so executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument.
SECTION 8.9 HEADINGS DESCRIPTIVE.
The headings of the several sections and subsections of this
Agreement, and the Table of Contents, are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of
this Agreement.
SECTION 8.10 SURVIVAL OF REPRESENTATIONS AND INDEMNITIES.
All covenants, agreements, representations and warranties made
herein and in any certificate delivered pursuant hereto shall survive the
making by the Lenders of the Loans and the execution and delivery to the Agent
for the account of the Lenders of the Notes regardless of any investigation
made by the Agent or the Lenders and of the Agent's and the Lender's access to
any information and shall continue in full force and effect so long as any
Obligation is outstanding and unpaid. The Borrowers obligations under
Sections 2.13, 2.14, 2.15 and 8.4 and under any other indemnification
provisions of this Agreement and each Lender's obligations under Sections 7.6
and 8.12 and under any other indemnification provisions of this Agreement shall
survive the termination of this Agreement for any reason whatsoever and payment
of the Notes.
SECTION 8.11 SEVERABILITY.
In case any one or more of the provisions contained in this
Agreement or the Notes should be invalid, illegal or unenforceable in any
respect in any jurisdiction, the validity, legality and enforceability of such
provisions shall not be affected or impaired in any other jurisdiction, nor
shall the remaining provisions contained herein and therein in any way be
affected or impaired thereby.
SECTION 8.12 INDEMNIFICATION OF COLLATERAL AGENTS.
To the extent that any Collateral Agent is not reimbursed and
indemnified by the Borrowers pursuant to the applicable Security Agreement,
each Lender will reimburse and indemnify such Collateral Agent, in proportion
to its respective Commitments (before giving effect to any termination of the
Commitments pursuant to the terms of this Agreement), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including reasonable attorneys fees and disbursements)
or disbursements of any kind or nature whatsoever that may be imposed on,
incurred by or asserted against such Collateral Agent in
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performing its duties under the Loan Documents, in any way relating to or
arising out of the Loan Documents; provided that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from such
Collateral Agent's gross negligence or willful misconduct. The Collateral
Agents shall be entitled to rely on the provisions of this Section 8.12 as if
they were parties to this Agreement.
SECTION 8.13 JOINT AND SEVERAL NATURE OF THE OBLIGATIONS.
The Borrowers agree that any and all of the Obligations of the
Borrowers hereunder and under each other Loan Document shall be the joint and
several obligation of each of them notwithstanding any absence herein or
therein of a reference such as "jointly and severally" with respect to any such
obligation.
SECTION 8.14 CERTAIN WAIVERS.
Each of the Borrowers agrees that its joint and several
liability under this Agreement and each of the other Loan Documents shall be
absolute, unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of the
Obligations of the other Borrower or any other Person under this Agreement or
any other Loan Document;
(b) the failure of any Lender:
(i) to assert any claim or demand or to enforce any right
or remedy against the other Borrower or any other Person (including
any guarantor) under the provisions of this Agreement or any other
Loan Document or otherwise, or
(ii) to exercise any right or remedy against any guarantor
of, or Collateral securing, any Obligations;
(c) any change in the time, manner or place or payment of, or in
any other term of, all or any of the Obligations, or any other extension,
compromise or renewal of any Obligation with respect to the other Borrower or
any other Person;
(d) any reduction, limitation, impairment or termination of any of
the Obligations of the other Borrower or any other Person for any reason,
including any claim of waiver, release, surrender, alteration or compromise,
and the liability of each of the Borrowers shall not be subject to (and each of
them hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality, non- genuineness, irregularity, compromise, unenforceability of, or
any other event or occurrence affecting, any of the Obligations of the other
Borrower or any other Person;
(e) any rescission, waiver, amendment or other modification of, or
any consent to departure from, any of the Obligations of the other Borrower or
any other Person under the terms of this Agreement or any other Loan Document;
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(f) any exchange, release or non-perfection of any Collateral, or
any release, amendment or waiver of, or consent to departure from, any guaranty
or other agreement from the other Borrower or any other Person, securing any of
the Obligations; or
(g) any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the other Borrower
or any surety or any guarantor. Each of the Borrowers waives any right to
require that any resort be made by the Lender to any of the Collateral.
SECTION 8.15 SUBROGATION, ETC.
At any time that a payment is made by either Borrower with
respect to the Obligations, such Borrower shall have a right of contribution
against the other Borrower in the maximum amount permitted by applicable law,
which right of contribution shall be subject to adjustment at the time of any
subsequent payment with respect to the Obligations; provided, that the maximum
aggregate liability of either Borrower with respect to such contribution rights
of the other Borrower shall not exceed the maximum amount of liability that
such first Borrower can incur without rendering such contribution rights void
or voidable under applicable law relating to fraudulent conveyance or
fraudulent transfers, and not for any greater amount, and provided further,
that neither Borrower will exercise any such contribution rights or any other
rights which it may acquire by reason of any payment made hereunder, whether by
way of rights of subrogation, reimbursement or otherwise, until the prior
payment, in full and in cash, of all Obligations and the termination of all
Commitments. Any amount paid to either Borrower on account of any payment made
hereunder prior to the payment in full of all Obligations other than
intercompany payments or reimbursements made in the ordinary course of the
businesses of each Borrower shall be held in trust for the benefit of the Agent
and the Lenders and shall immediately be paid to the Agent and credited and
applied against the Obligations, whether matured or unmatured, in accordance
with the terms of this Agreement and the other Loan Documents. In furtherance
of the foregoing, for so long as any Obligation or any Commitment remains
outstanding, each Borrower shall refrain from taking any action or commencing
any proceeding against the other Borrower (or its successors or assigns,
whether in connection with a bankruptcy proceeding or otherwise) to recover any
amounts in respect of payments made under this Agreement to the Agent and the
Lenders.
SECTION 8.16 [RESERVED]
SECTION 8.17 CONFIDENTIALITY.
Each Lender agrees not to disclose, without the prior written
consent of the Borrowers, any of the financial information or other information
of the Borrowers or any Affiliate of any of the Borrowers, designated in
writing by either Borrower as "confidential" and obtained under or in
connection with this Agreement or any of the other Loan Documents.
Notwithstanding the foregoing, each Lender may disclose such information: (a)
as is permitted under Section 8.6; (b) as is required by law or by subpoena or
similar court order, or by any governmental, regulatory or supervisory
authority or official or as otherwise required to be provided by the Lender in
the ordinary course of its business; (c) to counsel to such Lender in
connection with the transactions contemplated by this Agreement and the other
Loan Documents; (d) to independent auditors and other advisers retained by such
Lender; and (e) to the Agent or the Collateral Agents as contemplated
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by this Agreement and the other Loan Documents. In addition, unless
specifically prohibited by applicable law or court order, each Lender shall, to
the extent practical, notify the Borrowers of any subpoena or similar court
order or of any request by any governmental, regulatory or supervising
authority or official (other than any such request in connection with an
examination of the financial condition of such Lender by such authority) for
disclosure of any such information prior to disclosure of such information so
that the Borrowers may seek an appropriate protective order. Notwithstanding
the foregoing, the Lenders shall have no obligation to keep any such
information confidential if such information (i) becomes generally available to
the public other than as a result of the disclosure by any Lender in violation
of this Section 8.17, (ii) is available to any Lender on a non-confidential
basis prior to its disclosure to such Lender by the Borrower or, if applicable,
by the Lender from whom such Lender has purchased its participation or
assignment, or (iii) becomes available to any Lender on a non-confidential
basis from a source other than the Borrower or, if applicable, the Lender from
whom such Lender has purchased its participation or assignment; and any Lender
may disclose any such information in connection with any litigation to which
such Lender is party relating to this Agreement or any of the other Loan
Documents.
SECTION 8.18 EFFECTIVENESS.
This Agreement shall become effective as of the date (the
"Amendment Effective Date"), on which each of the following conditions have
been satisfied to the satisfaction of the Agent:
(a) The Borrowers shall have delivered to the Agent, in form and
substance and in quantities reasonably satisfactory to the Agent and its
counsel, each of the following:
(i) this Agreement and the other Loan Documents, duly
executed and delivered by the parties hereto;
(ii) a certified copy of resolutions of the Board of
Directors of each of the Borrowers approving the execution, delivery
and performance of all documents required to be delivered by such
parties hereunder and the transactions contemplated therein;
(iii) an opinion of Puerto Rico counsel for the Borrowers
in form and substance satisfactory to Agent and covering such matters
as the Agent may reasonably request, dated the Amendment Effective
Date; and
(iv) such other documents, instruments and agreements,
duly executed, deemed necessary or appropriate by the Agent.
(b) The Senior Notes shall have been issued and a portion of the
net proceeds received from the sale of the Senior Notes shall have been used to
repay in full all outstanding "Facility 3 Loans" (as defined in the Original
Credit Agreement) and the Borrowers shall have paid all Fees and other
Obligations required to have been paid under the Original Credit Agreement,
this Agreement and the other Loan Documents prior to or on the Amendment
Effective Date.
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(c) All Loans and other Obligations (as such terms are defined in
the Original Credit Agreement) owing to Bank One, Texas N.A. under the Original
Credit Agreement shall have been repaid or paid, respectively, in full.
(d) All conditions precedent set forth in Section 3.1(b) shall
have been satisfied at and as of such date (both before and after giving effect
to this Agreement).
(e) All acts and conditions (including the obtaining of any
necessary regulatory approvals and the making of any required filings,
recordings or registrations) required to be done and performed and to have
happened prior to the execution, delivery and performance of this Agreement and
for the same to constitute the legal, valid and binding obligations,
enforceable in accordance with its terms, shall have been done and performed
and shall have happened in due and strict compliance with all applicable laws
or if any of such have not been done, performed or happened, such has been
expressly disclosed to the Agent and waived by all of the Lenders in writing.
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If each of the above conditions has been satisfied, on the
Amendment Effective Date, (A) all Facility 1 Loans and Facility 2 Loans of each
Type outstanding under the Original Credit Agreement shall remain outstanding
and shall be deemed to be Loans of the same type under this Agreement governed
by the terms hereof, (B) the promissory notes delivered to the Lenders pursuant
to the Original Credit Agreement shall become void, (C) any outstanding
Facility 3 Commitments shall be terminated, and (D) Bank One, Texas N.A. shall
cease to be a party to this Agreement and any other Loan Document and the
respective Commitments of each of the Lenders shall be in the amounts set forth
opposite its name on the signature pages hereto. Upon receiving the Notes
delivered pursuant to subsection (a)(i) above, each Lender will promptly cancel
its promissory notes delivered under the Original Credit Agreement and return
such promissory notes to the Borrowers. No failure of a Lender to cancel or
return such promissory notes shall affect the validity of the new Notes
delivered hereunder.
SECTION 8.19 RATIFICATION; NO NOVATION.
Except as set forth herein and therein, all Loan Documents are
hereby ratified and confirmed in all respects. The term Loan Documents, as
used in the Loan Documents, shall mean the Loan Documents as amended hereby and
thereby. The parties do not intend for this Agreement or any of the other Loan
Documents to effect, nor does this Agreement or any of the Loan Documents
constitute, a novation of the obligations of the Borrowers evidenced by the
Original Credit Agreement and the Loan Documents referred to therein but is
rather an amendment and restatement of the terms governing such obligations
SECTION 8.20 WAIVER OF JURY TRIAL.
THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THE SUBJECT
MATTER OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.
FIRST FINANCIAL CARIBBEAN CORPORATION,
as a Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Executive Vice President and
Secretary
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President and Treasurer
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DORAL MORTGAGE CORPORATION,
as a Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
Facility 1 Commitment: BANKERS TRUST COMPANY,
$20,000,000 as Agent and as a Lender
Facility 2 Commitment:
$2,000,000 By: /s/ ▇▇▇▇▇ ▇. McLann
------------------------------------
Name: Vice President
------------------------------------
Title: Bankers Trust Company
------------------------------------
Facility 1 Commitment: FIRST UNION NATIONAL BANK OF
$20,000,000 NORTH CAROLINA,
as a Lender
Facility 2 Commitment:
$2,000,000 By: /s/ R. ▇▇▇▇▇▇ ▇▇▇▇
------------------------------------
Name: R. ▇▇▇▇▇▇ ▇▇▇▇
------------------------------------
Title: Vice President
------------------------------------
Facility 1 Commitment: THE BANK OF BOSTON,
$20,000,000 as a Lender
Facility 2 Commitment:
$2,000,000 By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
Title: Vice President
------------------------------------
Facility 1 Commitment: THE BANK OF NEW YORK,
$20,000,000 as a Lender
Facility 2 Commitment:
$2,000,000 By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Title: Vice President
------------------------------------
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Facility 1 Commitment: NATIONAL CITY BANK OF KENTUCKY,
$20,000,000 as a Lender
Facility 2 Commitment:
$2,000,000 By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
___________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
___________________________________
Title: Vice President
____________________________________
90
EXHIBIT 10.68
(CONTINUED)
FIRST AMENDMENT TO
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
AND CERTAIN OTHER LOAN DOCUMENTS
THIS FIRST AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT
AGREEMENT AND CERTAIN OTHER LOAN DOCUMENTS (the "Amendment"), dated as of
January 8, 1997, is entered into between the Lenders party hereto, BANKERS
TRUST COMPANY, a New York banking corporation, as agent for the Lenders (the
"Agent"), FIRST FINANCIAL CARIBBEAN CORPORATION, a corporation organized under
the laws of the Commonwealth of Puerto Rico ("FFCC"), DORAL MORTGAGE
CORPORATION, a corporation organized under the laws of the Commonwealth of
Puerto Rico and a wholly-owned subsidiary of FFCC ("DMC", and together with
FFCC, each a "Borrower" and collectively, the "Borrowers"), and BANCO POPULAR
DE PUERTO RICO, a corporation organized under the laws of the Commonwealth of
Puerto Rico, as collateral agent (the "Collateral Agent), with reference to the
First Amended and Restated Credit Agreement, dated as of September 25, 1996,
between the Lenders, the Agent and the Borrowers (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement") and the First
Amended and Restated Security, Custody and Collateral Agency Agreement
(Warehousing Collateral), dated as of October 10, l996, between the Borrowers,
the Agent and the Collateral Agent (as amended, supplemented or otherwise
modified from time to time, the "Security Agreement"). All capitalized terms
used but not otherwise defined herein shall have the meanings given such terms
in the Credit Agreement.
The Lenders, the Agent and the Borrowers wish to amend the
Credit Agreement as set forth herein.
ACCORDINGLY, the parties hereto agree as follows:
Section 1. Amendments to Article 1 of the Credit Agreement.
Section 1.1 of the Credit Agreement shall be amended as follows:
(a) The following definitions shall be added in appropriate
alphabetical order:
""BASE LIBOR RATE" shall mean, with respect to any month, the
average daily rate per annum for such month of the 30-day
LIBOR rates that appear on Telerate Page 3747 for each day
during such month; provided, that if such information is not
available on Telerate, the "Base LIBOR Rate" shall be
determined from information supplied to the Agent by a
nationally recognized reporting service for similar
information acceptable to the Agent."
""COLLATERAL VALUE OF THE FACILITY 1 BORROWING BASE" shall
mean, at any time, the sum of the Collateral Value of the
Facility 1 Tranche A Borrowing Base and the Collateral Value
of the Facility 1 Tranche B Borrowing Base."
91
""COLLATERAL VALUE OF THE FACILITY 1 TRANCHE A BORROWING BASE"
shall mean, at the time of determination thereof, the
aggregate collateral value of all Eligible Gestation Mortgage
Loans and Eligible Mortgage- Backed Securities included in the
Facility 1 Tranche A Borrowing Base. For purposes hereof, the
collateral value of (x) each Eligible Gestation Mortgage Loan
shall be an amount equal to ninety-eight percent (98%) of the
current unpaid principal balance thereof, and (y) each
Eligible Mortgage-Backed Security shall be an amount equal to
ninety-eight percent (98%) of the face amount thereof;
provided, that if the Agent, in its sole discretion, at any
time believes that the collateral value of any Mortgage Loan
or Mortgage-Backed Security included in the Facility 1 Tranche
A Borrowing Base is greater than the Fair Market Value
thereof, then the collateral value of any such Mortgage Loan
or Mortgage-Backed Security shall, until further notice from
the Agent, be equal to (I) in the case of each Eligible
Gestation Mortgage Loan, ninety-eight percent (98%) of the
lesser of (i) the Fair Market Value of such Eligible Gestation
Mortgage Loan and (ii) the current unpaid principal balance of
such Eligible Gestation Mortgage Loan, and (II) in the case of
each Eligible Mortgage-Backed Security, ninety-eight percent
(98%) of the lesser of (i) the Fair Market Value of such
Eligible Mortgage-Backed Security and (ii) the face amount of
such Eligible Mortgage-Backed Security. The Collateral Value
of the Facility 1 Tranche A Borrowing Base shall be determined
by reference to the most recent Facility 1 Borrowing Base
Certificate delivered by the Borrowers to the Agent absent any
error in such Facility 1 Borrowing Base Certificate as of the
date delivered. By adding any Eligible Gestation Mortgage
Loan or Eligible Mortgage-Backed Security to the Facility 1
Tranche A Borrowing Base in accordance with the Warehousing
Security Agreement, each Borrower shall be deemed to represent
and warrant to the Agent and each Lender at and as of the date
of such addition that, with respect to such Mortgage Loans or
Mortgage-Backed Securities, each of the statements set forth
in the definition of Eligible Gestation Mortgage Loan or
Eligible Mortgage-Backed Security, as the case may be, is true
and correct. If any such statement proves to be untrue or
incorrect in any respect at any time, such then Mortgage Loan
or Mortgage-Backed Security, as the case may be, shall be
deemed to have no collateral value for purposes of computing
the Collateral Value of the Facility 1 Tranche A Borrowing
Base."
""ELIGIBLE GESTATION MORTGAGE LOAN" shall mean a Mortgage Loan
with respect to which each of the following statements is true
and correct:
(a) such Mortgage Loan meets all of the requirements in
the definition of Eligible Conforming Mortgage Loan
(except the requirement set forth in paragraph (c) of such
definition); and
(b) the Certificating Custodian has initially certified
that all documentation relating to such Mortgage Loan received
by the Certificating Custodian from the applicable Borrower
(or the Warehousing Collateral Agent) is complete and
acceptable under an applicable Agency Guide for purposes of
including such Mortgage Loan in a pool of Mortgage Loans in
which a Mortgage-Backed Security will represent an interest;
provided that if such Mortgage Loan is returned to the
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Warehousing Collateral Agent after the date of such initial
certification but before the issuance of such Mortgage-Backed
Security because of a determination that such Mortgage Loan
may not be included in such pool, such Mortgage Loan shall be
deemed an Eligible Conforming Mortgage Loan if such Mortgage
Loan meets all of the requirements set forth in the definition
of Eligible Conforming Mortgage Loan."
""FACILITY 1 TRANCHE A BORROWING" shall mean a borrowing
pursuant to a Notice of Borrowing consisting of Facility 1
Tranche A Loans made concurrently by all of the Facility 1
Lenders."
""FACILITY 1 TRANCHE A BORROWING BASE" shall mean, at any
time, all Eligible Gestation Mortgage Loans and Eligible
Mortgage-Backed Securities delivered to and held by the
Warehousing Collateral Agent under the Warehousing Security
Agreement as collateral security for the Obligations."
""FACILITY 1 TRANCHE A LOAN" shall mean a loan made by a
Facility 1 Lender pursuant to Section 2.1(a)(i) for the
purposes set forth in Section 4.9."
""FACILITY 1 TRANCHE B BORROWING" shall mean a borrowing
pursuant to a Notice of Borrowing consisting of Facility 1
Tranche B Loans made concurrently by all of the Facility 1
Lenders."
""FACILITY 1 TRANCHE B BORROWING BASE" shall mean, at any
time, all Eligible Conforming Mortgage Loans and Eligible
Non-Conforming Loans delivered to and held by the Warehousing
Collateral Agent under the Warehousing Security Agreement as
collateral security for the Obligations."
""FACILITY 1 TRANCHE B LOAN" shall mean a loan made by a
Facility 1 Lender pursuant to Section 1.1(a)(ii) for the
purposes set forth in Section 4.9."
""FIRST AMENDMENT" shall mean the First Amendment to First
Amended and Restated Credit Agreement and Certain Other Loan
Documents, dated as of January 8, l997, between the Borrowers,
the Agent, the Warehousing Collateral Agent and the Lenders."
""LIBOR LOAN" shall mean any Facility 1 Tranche A Loan bearing
interest at the rate set forth in Section 2.6(a)."
""TELERATE" shall mean the Associated Press-Dow ▇▇▇▇▇ Telerate
Service (or such other service as may be nominated by the
British Bankers Association as the information vendor for the
purpose of displaying British Bankers Association interest
settlement rates for U.S. Dollar deposits)."
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""TELERATE PAGE 3747" shall mean the display designated as
"Page 3747" on Telerate (or such other page as may replace
such Page 3747 on Telerate). Any Base LIBOR Rate determined
on the basis of the rate displayed on Telerate Page 3747 shall
be subject to corrections, if any, made in such rate and
displayed by Telerate within one (1) hour of the time when
such rate is first displayed by Telerate."
(b) The definition of "COLLATERAL VALUE OF THE FACILITY 1
BORROWING BASE" shall be amended and restated in its entirety as follows:
""COLLATERAL VALUE OF THE FACILITY 1 TRANCHE B BORROWING BASE"
shall mean, at the time of determination thereof, the
aggregate collateral value of all Eligible Conforming Mortgage
Loans and Eligible Non- Conforming Mortgage Loans included in
the Facility 1 Tranche B Borrowing Base. For purposes hereof,
the collateral value of (x) each Eligible Conforming Mortgage
Loan shall be an amount equal to ninety- eight percent (98%)
of the current unpaid principal balance thereof, and (y) each
Eligible Non-Conforming Mortgage Loan shall be in an amount
equal to ninety-five percent (95%) of the current unpaid
principal balance thereof; provided that if the Agent, in its
sole discretion, at any time believes that the collateral
value of any Mortgage Loan included in the Facility 1 Tranche
B Borrowing Base is greater than the Fair Market Value
thereof, then the collateral value of any such Mortgage Loan
shall, until further notice from the Agent, be equal to (I) in
the case of each Eligible Conforming Mortgage Loan,
ninety-eight percent (98%) of the lesser of (i) the Fair
Market Value of such Mortgage Loan and (ii) the current unpaid
principal balance of such Mortgage Loan and (II) in the case
of each Eligible Non-Conforming Mortgage Loan, ninety-five
percent (95%) of the lesser of (i) the Fair Market Value of
such Mortgage Loan and (ii) the current unpaid principal
balance of such Mortgage Loan. The Collateral Value of the
Facility 1 Tranche B Borrowing Base shall be determined by
reference to the most recent Facility 1 Borrowing Base
Certificate delivered by the Borrowers to the Agent absent any
error in such Facility 1 Borrowing Base Certificate as of the
date delivered. By adding any Mortgage Loan to the Facility
1Tranche B Borrowing Base in accordance with the Warehousing
Security Agreement, each Borrower shall be deemed to represent
and warrant to the Agent and each Lender at and as of the date
of such addition that with respect to such Mortgage Loans,
each of the statements set forth in the definition of Eligible
Conforming Mortgage Loan or Eligible Non-Conforming Mortgage
Loan, as the case may be, is true and correct. If any such
statement proves to be untrue or incorrect in any respect at
any time, then such Mortgage Loan shall be deemed to have no
collateral value for purposes of computing the Collateral
Value of the Facility 1 Tranche B Borrowing Base."
(c) The phrase "(other than Facility 1 Tranche A Loans)" shall be
added after the phrase "convert Facility 1 Loans" in the definition of
"CONVERSION/CONTINUATION DATE".
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(d) The following clause shall be inserted before the period at
the end of the definition of "ELIGIBLE CONFORMING MORTGAGE LOAN": "; and (c)
such Mortgage Loan is not an Eligible Gestation Mortgage Loan."
(e) Clauses (n) and (o) of the definition of "ELIGIBLE MORTGAGE
LOAN" shall be amended and restated in their entirety as follows:
"(n) if such Mortgage Loan is included in the Facility 1
Tranche B Borrowing Base, such Mortgage Loan has not been
included in such Borrowing Base for a period in excess of one
hundred and eighty (180) days from the date such Mortgage Loan
was first included in such Borrowing Base, and if such
Mortgage Loan is included in the Facility 1 Tranche A
Borrowing Base, such Mortgage Loan has not been included in
the Facility 1 Tranche A Borrowing Base (as an unpooled
Mortgage Loan) for a period in excess of thirty (30) days from
the date such Mortgage Loan was first included in the Facility
1 Tranche A Borrowing Base and has not been included in the
Facility 1 Tranche A Borrowing Base and the Facility 1 Tranche
B Borrowing Base (as an unpooled Mortgage Loan) for a
cumulative period in excess of one hundred and eighty (180)
days from the date such Mortgage Loan was first included in
the Facility 1 Tranche B Borrowing Base;
(o) (i) if such Mortgage Loan is to be included in the
Facility 1 Tranche B Borrowing Base, the Borrowers have
delivered (or caused to be delivered) those items described on
Attachment 2 to the Warehousing Security Agreement for such
Mortgage Loan to the Warehousing Collateral Agent prior to the
inclusion of such Mortgage Loan in the Facility 1 Tranche B
Borrowing Base; (ii) if such Mortgage Loan is to be included
in the Facility 1 Tranche A Borrowing Base, the Borrowers have
delivered (or caused to be delivered), prior to the inclusion
of such Mortgage Loan in the Facility 1Tranche A Borrowing
Base (A) to the Certificating Custodian, documentation for
such Mortgage Loan that the Certificating Custodian is
required under the applicable Agency Guide to examine, for
completeness and acceptability, for purposes of initially
determining the suitability of such Mortgage Loan for
inclusion in a mortgage loan pool supporting a Mortgage-Backed
Security and (B) to the Warehousing Collateral Agent, a FHLMC
Custodial Certification Schedule (Form 1034) (or any
comparable or successor form), a FNMA Schedule of Mortgages
(Form 2005) (or any comparable or successor form) or a GNMA
Schedule of Pooled Mortgages (HUD Form 11706) (or any
comparable or successor form) listing such Mortgage Loan as a
Mortgage Loan to be pooled in a Mortgage-Backed Security, in
each case completed and duly executed by the Certificating
Custodian on or prior to the date such Mortgage Loan is to be
included in the Facility 1 Tranche A Borrowing Base; (iii)
the Borrowers hold in trust for the Secured Parties those
items described in Attachment 6 to the Warehousing Security
Agreement; and (iv) there has been delivered to the
Warehousing Collateral Agent, if the Agent or the Warehousing
Collateral Agent has so requested in writing, the additional
items described on Attachment 6 to the Warehousing Security
Agreement; and"
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(f) The phrase "Facility 1 Loans" in the definition of "FACILITY 1
BORROWING" shall be replaced with the phrase "Facility 1 Tranche A Loans and/or
Facility 1 Tranche B Loans".
(g) The definition of "FACILITY 1 MAXIMUM AMOUNT" shall be
deleted.
(h) The reference to "Section 2.1(a) and 2.1(f)" in the definition
of "FACILITY 1 COMMITMENT" shall be changed to "Section 2.1".
(i) The definition of "FACILITY 1 LOAN" shall be amended and
restated as follows:
""FACILITY 1 LOANS" shall mean the Facility 1 Tranche A Loans
and the Facility 1 Tranche B Loans."
(j) The reference to "Section 2.1(b), (c) and (d)" in the
definition of "FACILITY 2 COMMITMENT" shall be changed to "Section 2.1".
(k) The phrases "the second sentence of", "the third sentence of"
and "the fourth sentence of" in the definitions of "FACILITY 2 TRANCHE A LOAN",
"FACILITY 2 TRANCHE B LOAN" and "FACILITY 2 TRANCHE C LOAN", respectively,
shall be deleted.
(l) The definition of "FAIR MARKET VALUE" shall be amended and
restated as follows:
""FAIR MARKET VALUE" shall mean at any date with respect to
any Mortgage Loan or Mortgage-Backed Security, (i) the bid
price (expressed as a percentage) quoted to the Agent as of
the computation date by any nationally recognized dealer (or
Puerto Rican subsidiary of such dealer) or investor selected
by the Agent or its designee who at the time regularly
purchases similar Mortgage Loans or Mortgage-Backed
Securities, as applicable, multiplied by (ii) the outstanding
principal balance thereof in the case of Mortgage Loans, or
the face amount thereof in the case of Mortgage-Backed
Securities."
(m) The phrase "Facility 1 Loan" in the definition of "FED FUNDS
LOAN" shall be replaced with the phrase "Facility 1 Tranche B Loan".
(n) The definition of "SEASONED LOAN" shall be deleted.
(o) The definition of "TELERATE PAGE 314" shall be amended and
restated as follows:
""TELERATE PAGE 314" shall mean the display designated as
"Page 314" on Telerate (or such other page as may replace such
Page 314 on Telerate). Any Base Eurodollar Rate determined on
the basis of the rate displayed on Telerate Page 314 shall be
subject to corrections, if any, made in such rate and
displayed by Telerate within one (1) hour of the time when
such rate is first displayed by Telerate."
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(p) The definition of "TYPE" shall be amended and restated as
follows:
""TYPE" shall mean (a) when used in respect of any Mortgage
Loan, an Eligible Gestation Mortgage Loan, an Eligible
Conforming Mortgage Loan or an Eligible Non-Conforming
Mortgage Loan; (b) when used in respect of any Commitment, a
Facility 1 Commitment or a Facility 2 Commitment; and (c) when
used in respect of any Loan, a Facility 1 Tranche A Loan, a
Facility 1 Tranche B Loan, a Facility 2 Tranche A Loan, a
Facility 2 Tranche B Loan, a Facility 2 Tranche C Loan or a
Swing-Line Loan."
Section 2. Amendments to Article 2 of the Credit Agreement.
(a) The following subsection shall be added to Section 2.1
immediately prior to Section 2.1(a):
"(a) (i) Facility 1 Tranche A Loans. Subject to and upon the terms
and conditions herein set forth (including the limitations set forth in Section
2.1(g)), each Facility 1 Lender agrees, severally and not jointly, at any time
and from time to time from the Amendment Effective Date (as defined in the
First Amendment) up to but excluding the date upon which the Facility 1
Commitments are terminated, to make Facility 1 Tranche A Loans to the Borrowers
in an aggregate principal amount at any time outstanding not to exceed the
Facility 1 Commitment set forth opposite such Facility 1 Lender's name on the
signature pages hereto, as such commitment may be reduced from time to time
pursuant to Section 8.6(c); provided that the aggregate principal amount of
Facility 1 Tranche A Loans outstanding at any time shall not exceed the lesser
of (i) fifty percent (50%) of the aggregate Facility 1 Commitments then in
effect, and (ii) the then current Collateral Value of the Facility 1 Tranche A
Borrowing Base. Subject to Section 2.12, each Facility 1 Tranche A Loan shall
be a LIBOR Loan. Each Facility 1 Tranche A Borrowing shall be in an aggregate
principal amount of at least $1,000,000 (or in any lesser amount equal to the
unused Facility 1 Commitments) and shall be made ratably by the Facility 1
Lenders in proportion to their respective Facility 1 Commitments. Within the
foregoing limits and subject to the conditions set forth in Article III, the
Borrowers may borrow and reborrow Facility 1 Tranche A Loans under Section 2.2
and prepay Facility 1 Tranche A Loans under Section 2.9."
(b) Section 2.1(a) shall be amended and restated as follows:
"(ii) Facility 1 Tranche B Loans. Subject to and upon the terms and
conditions herein set forth (including the limitations set forth in Section
2.1(g)), each Facility 1 Lender agrees, severally and not jointly, at any time
and from time to time from the Amendment Effective Date (as defined in the
First Amendment) up to but excluding the date upon which the Facility 1
Commitments are terminated, to make Facility 1 Tranche B Loans to the Borrowers
in an aggregate principal amount at any time outstanding not to exceed the
Facility 1 Commitment set forth opposite such Facility 1 Lender s name on the
signature pages hereto, as such commitment may be reduced from time to time
pursuant to Section 8.6(c); provided that the aggregate principal amount of
Facility 1 Tranche B Loans plus the aggregate face amount of Facility 1
Acceptances outstanding at any time shall not exceed the then current
Collateral Value of the Facility 1 Tranche B Borrowing Base. Subject to
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Section 2.12, each Facility 1 Tranche B Loan shall be a Eurodollar Loan or a
Fed Funds Loan. Subject to Section 2.2(a)(ii), each Facility 1 Borrowing shall
be in an aggregate principal amount of at least $1,000,000 (or in any lesser
amount equal to the unused Facility 1 Commitments) and shall be made ratably by
the Facility 1 Lenders in proportion to their respective Facility 1
Commitments. Within the foregoing limits and subject to the conditions set
forth in Article III, the Borrowers may borrow and reborrow Facility 1 Tranche
B Loans under Section 2.2 and prepay Facility 1 Tranche B Loans under Section
2.9."
(c) The reference to "Section 2.1(a)" in Section 2.1(e) shall be
changed to "Section 2.1(g)" and the reference to "Facility 1 Loans" at the end
of Section 2.1(e) shall be changed to "Facility 1 Tranche B Loans".
(d) Clauses (i) and (ii) of Section 2.1(f) shall be amended and
restated as follows:
"(i) Subject to and upon the terms and conditions herein
set forth (including the limitations set forth in Sections
2.1(a)(ii) and 2.1(g)), the Borrowers, at any time and from
time to time on or after the Amendment Effective Date (as
defined in the First Amendment) up to but excluding the date
on which the Facility 1 Commitments are terminated, may
request that Bankers Trust accept a draft (a "Facility 1
Acceptance" or "Acceptance") as herein provided in lieu of
borrowing additional sums under the Facility 1 Commitments in
respect of Facility 1 Tranche B Loans in an aggregate face
amount at any time outstanding not to exceed the aggregate
Facility 1 Commitments, as such commitments may be reduced
from time to time pursuant to Section 8.6(c); provided that
the aggregate principal amount of Facility 1 Tranche B Loans
plus the aggregate face amount of Facility 1 Acceptances
outstanding at any time shall not exceed the then current
Collateral Value of the Facility 1 Tranche B Borrowing Base.
(ii) Bankers Trust may create Facility 1 Acceptances in
its sole and absolute discretion upon a request by the
Borrowers delivered in accordance with clause (i) above, and
each such Facility 1 Acceptance shall be created hereunder by
Bankers Trust s accepting a draft, in substantially the form
of Exhibit B-2 hereto (a "Draft"). Each Draft shall (a) be
drawn by the Borrowers on Bankers Trust in accordance with the
terms hereof and be payable in U.S. Dollars, (b) be payable
only to the order of the Acceptance Agent, (c) be dated the
date of acceptance of such Draft by Bankers Trust, (d) be in a
face amount at least equal to $1,000,000 and (e) mature on a
Business Day either thirty (30), sixty (60) or ninety (90)
days after the date of such Draft; provided that in no event
shall an Acceptance (i) be created unless the conditions set
forth in Article III have been satisfied with respect to the
issuance of such Facility 1 Acceptance, (ii) mature after the
Maturity Date, or (iii) have a face amount, together with the
aggregate face amount of all other then outstanding Facility 1
Acceptances, exceeding the limitations set forth in Sections
2.1(a)(ii) and 2.1(g)."
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(e) The following new Section 2.1(g) is added immediately
following Section 2.1(f):
"(g) Limitation on Aggregate Facility 1 Loans, Swing-Line
Loans and Facility 1 Acceptances. Notwithstanding anything
contained herein, the aggregate principal amount of Facility 1
Loans and Swing-Line Loans of all of the Facility 1 Lenders
and Bankers Trust at any time outstanding plus the aggregate
face amount of Facility 1 Acceptances then outstanding shall
not exceed the lesser of (i) the sum of the Facility 1
Commitments of all of the Facility 1 Lenders then in effect,
and (ii) the Collateral Value of the Facility 1 Borrowing
Base."
(f) Section 2.2(a) shall be amended and restated as follows:
"(a) Whenever the Borrowers desire to make a Facility 1
Borrowing, a Facility 2 Borrowing or a Swing-Line Borrowing
hereunder, to convert any Facility 1 Tranche B Loan pursuant
to Section 2.3 or to continue any Facility 1 Tranche B Loan
for an additional Eurodollar Interest Period pursuant to
Section 2.3, an Authorized Officer shall deliver to the Agent
written notice of such proposed Borrowing, conversion or
continuation (a "Notice of Borrowing" or "Notice of
Conversion/Continuation," as the case may be), each such
notice to be given (x) prior to 12:00 noon (New York City
time) on the date of such proposed Borrowing or conversion, in
the case of a Borrowing of Fed Funds Loans or LIBOR Loans or
a conversion of Eurodollar Loans into Fed Funds Loans; and (y)
prior to 12:00 noon (New York City time) on the third
Eurodollar Business Day before the date of such proposed
Borrowing, conversion or continuation (which date shall be a
Eurodollar Business Day), in the case of a Borrowing of
Eurodollar Loans, a conversion of Fed Funds Loans into
Eurodollar Loans or a continuation of Eurodollar Loans for an
additional Eurodollar Interest Period. Each such notice shall
be irrevocable and shall be in the form of Exhibit I or J, as
the case may be. Notwithstanding any other provision hereof
to the contrary, (i) no more than four (4) Eurodollar Interest
Periods for Facility 1Tranche B Loans may be in effect
hereunder at any time; and (ii) no Facility 1 Tranche B
Borrowing of Eurodollar Loans or LIBOR Loans shall be in an
aggregate principal amount of less than $1,000,000."
(g) The phrases "Facility 1 Loan" and "Facility 1 Loans" in
Sections 2.3(a) and 2.8(g) shall be replaced with the phrases "Facility 1
Tranche B Loan" and "Facility 1 Tranche B Loans", respectively, wherever they
appear.
(h) The following proviso shall be added at the end of the first
sentence of Section 2.4(a) immediately prior to the period: "; provided, that
pursuant to a Borrower's request set forth in a Notice of Borrowing, the
Facility 1 Lenders shall apply the proceeds of any Facility 1 Tranche A
Borrowing directly to the repayment of outstanding Facility 1 Tranche B Loans,
without any exchange of funds."
(i) The second and third sentences of Section 2.4(e) shall be
amended and restated as follows:
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" All amounts made available to the Agent pursuant to this
Section 2.4(e) (including Bankers Trust s pro rata share of
such amounts) shall be deemed Facility 1 Loans and shall be
allocated to each Type of Facility 1 Loan in the following
order of priority to the extent that such allocation can be
made without breaching the provisions of Section 2.1 or
causing a mandatory repayment under Section 2.8(c): first, to
Facility 1 Tranche A Loans; and second, to Facility 1 Tranche
B Loans. Each such Swing-Line Loan being refinanced as a
Facility 1 Loan shall be a LIBOR Loan in the case of a
refinancing with Facility 1 Tranche A Loans and a Fed Funds
Loan in the case of a refinancing with Facility 1 Tranche B
Loans."
(j) Section 2.6(a) shall be amended and restated as follows:
"(a) The Borrowers agree to pay interest in respect of the
unpaid principal amount of each Facility 1 Tranche A Loan for
each day during each month that such Facility 1 Tranche A Loan
is outstanding at a rate per annum equal to sixty-five
one-hundredths of one percent (0.65%) plus the Base LIBOR Rate
for such month."
(k) Section 2.8(c) shall be amended and restated as follows:
"(c) The Borrowers shall immediately prepay: (i)
Facility 1 Tranche A Loans to the extent that the aggregate
outstanding principal amount of Facility 1 Tranche A Loans
exceeds the limitations set forth in Section 2.1(a)(i) or
2.1(g) or, provided no Potential Default or Event of Default
has occurred and is continuing, deliver additional Collateral
of the type described in the definition of "Collateral Value
of the Facility 1 Tranche A Borrowing Base" in Section 1.1 as
shall be necessary so that the aggregate principal amount of
Facility 1 Tranche A Loans does not exceed such limitations,
(ii) Facility 1 Tranche B Loans and/or Acceptance Obligations
to the extent that the aggregate outstanding principal amount
of Facility 1 Tranche B Loans and the aggregate face amount
of outstanding Facility 1 Acceptances exceeds the limitations
set forth in Section 2.1(a)(ii) or 2.1(g) or, provided no
Potential Default or Event of Default has occurred and is
continuing, deliver additional Collateral of the type
described in the definition of "Collateral Value of the
Facility 1 Tranche B Borrowing Base" in Section 1.1 as shall
be necessary so that the aggregate principal amount of
Facility 1 Tranche B Loans and the aggregate face amount of
outstanding Facility 1 Acceptances does not exceed such
limitations, (iii) Swing-Line Loans to the extent that the
aggregate outstanding principal amount of Swing-Line Loans
exceeds the limitations set forth in Section 2.1(g), (iv)
Facility 2 Tranche A Loans to the extent that the aggregate
outstanding principal amount of Facility 2 Tranche A Loans
exceeds the Facility 2 Tranche A Maximum Amount or, provided
no Potential Default or Event of Default has occurred and is
continuing, deliver additional Collateral of the type
described in the definition of "Collateral Value of the
Facility 2 Tranche A Borrowing Base" in Section 1.1 as shall
be necessary so that the aggregate outstanding principal
amount of Facility 2 Tranche A Loans does not exceed the
Facility 2 Tranche A Maximum Amount , (v) Facility 2 Tranche B
Loans to the extent that the aggregate outstanding principal
amount of Facility 2 Tranche B Loans exceeds the Facility 2
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Tranche B Maximum Amount, and (vi) Facility 2 Tranche C Loans
to the extent that the aggregate outstanding principal amount
of Facility 2 Tranche C Loans exceeds the Facility 2 Tranche C
Maximum Amount."
(l) The second and third sentences of Section 2.9 shall be amended
and restated as follows:
"The Borrowers shall, at the time of making such prepayment,
designate whether it is a prepayment of Facility 1 Tranche A
Loans, Facility 1 Tranche B Loans, Facility 2 Tranche A
Loans, Facility 2 Tranche B Loans or Facility 2 Tranche C
Loans. If the Borrowers fail to make such a designation, any
funds received as a prepayment pursuant to this Section 2.9
shall be applied first, to Facility 2 Tranche B Loans then
outstanding; second, to Facility 2 Tranche A Loans then
outstanding; third to Facility 2 Tranche C Loans then
outstanding; fourth, to Facility 1 Tranche B Loans then
outstanding; and fifth, to Facility 1 Tranche A Loans then
outstanding."
(m) Section 2.10(f) shall be renumbered Section 2.10(g) and a new
Section 2.10(f) shall be added immediately following Section 2.10(e) as
follows:
" (f) In respect of any Loan which was originally
made as a Facility 1 Tranche A Loan and which, after a
completed review by the Warehousing Collateral Agent of the
relevant Mortgage Loans included in the Facility 1 Tranche A
Borrowing Base and the relevant documentation executed in
connection therewith, should have constituted for any period a
Facility 1 Tranche B Loan because the Collateral related
thereto did not satisfy the Facility 1 Tranche A Borrowing
Base requirements, the Borrowers agree to pay to the Agent for
the account of each of the Facility 1 Lenders a gestation
collateral reconciliation fee in an amount equal to the
difference between (i) the interest payable hereunder in
respect of such Loan had it been determined to be a Facility 1
Tranche B Loan for such period and (ii) the interest paid
hereunder during such period in respect of such Loan as a
Facility 1 Tranche A Loan."
(n) The following phrase shall be added at the beginning of
Section 2.11(e):
"Prior to the maturity of the Facility 1 Loans, Swing-Line
Loans and Facility 1".
(o) Section 2.12 and Section 2.13(a) shall be amended and restated
as follows:
"SECTION 2.12 EURODOLLAR RATE OR BASE LIBOR RATE NOT
DETERMINABLE; ILLEGALITY OR IMPROPRIETY.
(a) In the event, and on each occasion, that on
or before the day on which the Eurodollar Rate or Base LIBOR
Rate for a Facility 1 Borrowing that is to include
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Eurodollar Loans or LIBOR Loans is to be determined, the Agent
has determined in good faith that the Eurodollar Rate or Base
LIBOR Rate, as applicable, cannot be determined for any
reason, the Agent shall, as soon as practicable thereafter,
give written notice of such determination to the Borrowers and
the Lenders. Upon any such determination, any request by the
Borrowers for a Eurodollar Loan or LIBOR Loan, as applicable,
pursuant to Section 2.2 shall, until the Agent has advised the
Borrowers and the Lenders that the circumstances giving rise
to such notice no longer exist, be deemed to be a request for
a Fed Funds Loan. Each determination by the Agent hereunder
shall be conclusive and binding absent manifest error.
(b) If any Lender determines at any time that the
introduction of, or any change in, any applicable law, rule,
regulation, order or decree or in the interpretation or the
administration thereof by any Governmental Authority charged
with the interpretation or administration thereof, or
compliance by such Lender with any request or directive
(whether or not having the force of law) of any such
Governmental Authority, shall make it unlawful or improper for
such Lender to make, maintain or fund any Eurodollar Loan or
LIBOR Loan as contemplated by this Agreement, then such Lender
shall immediately give notice thereof to the Agent and the
Borrowers describing such illegality or impropriety in
reasonable detail. Effective thirty (30) days after the
giving of such notice (or effective upon such earlier date as
required by such Governmental Authority), the obligation of
such Lender to make Eurodollar Loans or LIBOR Loans, as
applicable, shall be suspended for the duration of such
illegality or impropriety and, if and when such illegality or
impropriety ceases to exist, such suspension shall cease and
such Lender shall notify the Agent and the Borrowers thereof.
If any such change makes it unlawful or improper for any
Lender to maintain any Eurodollar Loan or LIBOR Loan, such
Lender shall, upon the happening of such event, notify the
Agent and the Borrowers thereof, and the Borrowers shall
immediately, or if permitted by applicable law, rule,
regulation, order, decree, interpretation, request or
directive, no later than the date permitted thereby, convert
each such Eurodollar Loan or LIBOR Loan, as applicable, into a
Fed Funds Loan. If any Lender notifies the Agent and the
Borrowers pursuant to this Section 2.12(b) that it is unlawful
or improper for such Lender to make or maintain Eurodollar
Loans or LIBOR Loans, as the case may be, but no other Lenders
give similar notices, then the Borrowers may require such
Lender to sell, pursuant to Section 8.6(c) all of its
outstanding Loans and Commitments to another Lender (if any
other Lender agrees, in its sole and absolute discretion, to
purchase such Loans and Commitments) or to any other financial
institution reasonably acceptable to the Agent that is willing
to make and maintain Eurodollar Loans and LIBOR Loans. The
purchase price for such Loans and Commitments shall be equal
to the aggregate outstanding principal amount of the Loans of
such Lender plus such Lender s pro rata share of all other
accrued and unpaid Obligations (including obligations arising
as a result of being an Acceptance Participant) minus the pro
rata portion (based on the number of days in the applicable
period) of such Lender s facility fees that relate to the
period from the date of such sale to the next payment date for
the facility fees.
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SECTION 2.13 RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES.
(a) Notwithstanding any other provision herein, if after
the date of this Agreement any change in applicable law or
regulation or in the interpretation or administration thereof
by any Governmental Authority charged with the interpretation
or administration thereof (whether or not having the force of
law) imposes any tax on or changes the basis of taxation of
payments to any Lender of the principal of or interest on any
Eurodollar Loan or LIBOR Loan or the face amount of a Facility
1 Acceptance made by such Lender or any interest due on any
Acceptance Obligations or any Fees or other amounts payable
hereunder (other than taxes imposed on the overall net income
of such Lender by the jurisdiction in which such Lender has
its principal office or by any political subdivision or taxing
authority therein), or imposes, modifies or deems applicable
any reserve, special deposit or similar requirement against
assets of, deposits with or for the account of or credit
extended by such Lender (except any such reserve requirement
that is reflected in the Eurodollar Rate) or imposes on such
Lender any other condition affecting this Agreement or
Eurodollar Loans or LIBOR Loans or a Facility 1 Acceptances
created by Bankers Trust, and the result of any of the
foregoing is to increase the cost to such Lender of making or
maintaining any Eurodollar Loan or LIBOR Loan, becoming or
remaining as an Acceptance Participant or to reduce the amount
of any sum received or receivable by such Lender hereunder
(whether of principal, interest, fee or otherwise) in respect
thereof by an amount deemed by such Lender to be material,
then the Borrowers shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered. Any amount
or amounts payable by the Borrowers to any Lender in
accordance with the provisions of this Section 2.13(a) shall
be paid by the Borrowers to such Lender within ten (10)
Business Days of receipt by the Borrowers from such Lender of
a statement setting forth in reasonable detail the amount or
amounts due and the basis for the determination from time to
time of such amount or amounts, which statement shall be
conclusive and binding absent manifest error."
Section 3. Amendments to Article 4 of the Credit Agreement.
Articles 4 and 5 of the Credit Agreement shall be amended as follows:
(a) The first sentence of Section 4.9 shall be amended and
restated as follows:
"The proceeds of all Facility 1 Tranche A Loans shall be used
by the Borrowers solely for the purpose of financing Eligible
Gestation Mortgage Loans and Eligible Mortgage-Backed
Securities. The proceeds of all Facility 1 Tranche B Loans
shall be used by the Borrowers solely for the purpose of
originating, acquiring or financing Eligible Conforming
Mortgage Loans and/or Eligible Non-Conforming Mortgage Loans.
The proceeds of all Swing-Line Loans shall be used by the
Borrowers solely for the purpose of originating, acquiring or
financing Eligible Gestation Mortgage Loans, Eligible
Mortgage-Backed Securities, Eligible Conforming Mortgage
Loans and/or Eligible Non-Conforming Mortgage Loans."
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(b) The reference to "Facility 1 Borrowing Base" in Section 5.2(n)
of the Credit Agreement shall be changed to "Facility 1 Tranche A Borrowing
Base."
Section 4. Amendments to Article 8 of the Credit Agreement.
Clause (v) of Section 8.2 shall be amended and restated as follows:
"(v) change the percentage of the Commitments, the definitions
of "Required Lenders," "Collateral Value of the Facility 1
Tranche A Borrowing Base," "Collateral Value of the Facility 1
Tranche B Borrowing Base," "Collateral Value of the Facility
2 Tranche A Borrowing Base," "Collateral Value of the Facility
2 Tranche B Borrowing Base," "Collateral Value of the Pledged
Servicing Portfolio", "Eligible Conforming Mortgage Loan,"
"Eligible Gestation Mortgage Loan," "Eligible Mortgage-Backed
Security," "Eligible Mortgage Loan," "Eligible Non-Conforming
Mortgage Loan," "Eligible REO Property" or "Eligible Servicing
Receivable" (or any definitions contained in such
definitions), or the number or identity of Lenders that is
required for any or all of the Lenders to take any action
hereunder,".
Section 5. Amendments to the Warehousing Security Agreement.
The Security Agreement shall be amended as follows:
(a) Section 2(b) shall be amended and restated as follows:
" (b) All Mortgage-Backed Securities described on
Schedule A to Attachment 1-B hereto, all right to the payment
of monies and non-cash distributions on account thereof, all
new, substituted and additional securities at any time issued
(to the extent permitted by applicable law) with respect
thereto and the Custodial Account, together with any and all
Mortgaged-Backed Securities held therein or credited thereto
and any and all rights of each Borrower to insurance payments
made in respect of such Mortgage-Backed Securities or the
Custodial Account; "
(b) Section 4 shall be amended and restated as follows:
"4. Delivery of Collateral Documentation; Submission of
Collateral for Inclusion in Borrowing Base. From time to
time, the Borrowers shall deliver or cause to be delivered the
Collateral to the Collateral Agent as hereinafter provided.
The Borrowers shall deliver or cause to be delivered the
Collateral consisting of Mortgage Loans (the "Facility 1
Tranche A Mortgage Loans") and Mortgage- Backed Securities to
be included in the Facility 1 Tranche A Borrowing Base by
delivery to the Collateral Agent of a Facility 1 Tranche A
Borrowing Base Addition Report in the form of Attachments 1- A
and 1-B hereto, respectively, with all blanks completed in
conformity therewith (a copy of which completed Facility 1
Tranche A Borrowing Base Addition Report shall be delivered to
the Agent by the Collateral Agent upon its receipt thereof),
together with those documents, instruments and agreements
104
- 15 -
described on Attachment 2 hereto (the "Required Documents")
for such Mortgage Loans or Mortgage-Backed Securities, as the
case may be. The Borrowers shall deliver or cause to be
delivered the Collateral consisting of Mortgage Loans to be
included in the Facility 1 Tranche B Borrowing Base (the
"Facility 1 Tranche B Mortgage Loans") by delivery to the
Collateral Agent of a Facility 1 Tranche B Borrowing Base
Addition Report in the form of Attachment 1-C hereto, with all
blanks completed in conformity therewith (a copy of which
completed Facility 1 Tranche B Borrowing Base Addition Report
shall be delivered to the Agent by the Collateral Agent upon
its receipt thereof), together with those documents,
instruments and agreements described on Attachment 2 hereto
(the "Required Documents") for such Mortgage Loans. At any
time that additional Take-Out Commitments are assigned to the
Secured Parties pursuant to this Agreement, the Borrowers
shall immediately execute and deliver to the Agent an
assignment supplement substantially in the form attached
hereto as Attachment 1-D (the "Assignment Supplement"). The
Borrowers may substitute other Mortgage Loans or
Mortgage-Backed Securities held by the Collateral Agent as
collateral, provided that the Mortgage Loans or
Mortgage-Backed Securities transferred to the Collateral Agent
will have a collateral value for purposes of determining the
Collateral Value of the Facility 1 Tranche A Borrowing Base or
the Collateral Value of the Facility 1 Tranche B Borrowing
Base, as applicable, at least equal to the collateral value
of the Mortgage Loans and Mortgage-Backed Securities for which
they are substituted. Such substitution shall be made by
transfer of such Mortgage Loans or Mortgage-Backed Securities
to the Collateral Agent pursuant to a Facility 1 Tranche A
Borrowing Base Addition Report or Facility 1 Tranche B
Borrowing Base Addition Report, as applicable, in the form of
Attachment 1-A, 1-B or 1-C, as applicable. No Collateral
shall be released until the Collateral Agent has reviewed the
substitute collateral and determined the collateral value
therefor is equivalent. All documentation relating to or
constituting Collateral delivered at any time to the
Collateral Agent under this Agreement shall be held by the
Collateral Agent in a fire resistant vault, drawer or other
suitable depository maintained and controlled solely by the
Collateral Agent in accordance with customary standards for
such custody and conspicuously marked to show the interest of
the Secured Parties therein. Mortgage-Backed Securities shall
be held in the Custodial Account. Book-Entry MBS shall be
held in accordance with Section 6(f)."
(c) All references to "Mortgage Loans" in Sections 6(a), 6(b) and
6(c) shall be changed to "Facility 1 Tranche B Mortgage Loans" wherever they
appear.
(d) All references to "Facility 1 Borrowing Base" in Section 6(d)
shall be changed to "Facility 1 Tranche B Borrowing Base" wherever they appear.
(e) The following sentence shall be added at the end of Section
6(e) immediately following the last sentence thereof:
"The Secured Parties shall hold their security interests in
and liens upon the Custodial Account and the other accounts
referred to in Section 2(b) above and all
105
- 16 -
Mortgage-Backed Securities at any time held therein or
credited thereto with all rights of a secured party under the
New York Uniform Commercial Code and other applicable New York
or federal law."
(f) Attachments 1-A, 1-B and 1-C shall be deleted and Attachments
1-A, 1-B, 1-C and 1-D attached as Exhibit A hereto shall be substituted
therefor.
(g) The reference to "FACILITY 1 BORROWING BASE" in Attachment 2
shall be changed to "FACILITY 1 TRANCHE B BORROWING BASE" and the following
new paragraph shall be added to Attachment 2:
"REQUIRED DOCUMENTS
FOR MORTGAGE LOANS TO BE INCLUDED IN
FACILITY 1 TRANCHE A BORROWING BASE
A copy of a FHLMC Custodial Certification Schedule, a FNMA
Schedule of Mortgages or a GNMA Schedule of Pooled Mortgages, or such other
documentation necessary under an applicable Agency Guide to be completed by the
Certificating Custodian for purposes of initially certifying mortgage loans for
inclusion in a pool supporting Mortgage-Backed Securities, in each case,
listing such Mortgage Loans as Mortgage Loans to be pooled in a Mortgage-Backed
Security and duly executed by the Certificating Custodian."
(h) The heading "I. Mortgage Loans Included in the Facility 1
Borrowing Base." in Attachment 4 shall be changed to "I. Mortgage Loans
Included in the Facility 1 Tranche B Borrowing Base."
Section 6. Amendments to Other Exhibits. Exhibits H-1, I and
J shall be amended and restated in the forms of Exhibits B, C and D hereto,
respectively.
Section 7. Representations and Warranties. The Borrowers
represent and warrant that, on and as of the date hereof, all of the
representations and warranties made by them in the Credit Agreement and the
other Loan Documents are true and correct as if made on and as of the date
hereof and no Potential Default or Event of Default has occurred and is
continuing.
Section 8. Effectiveness. This Amendment shall become
effective as of the date (the "Amendment Effective Date") on which each of the
following conditions have been satisfied to the satisfaction of the Agent:
(a) The Borrowers shall have delivered to the Agent, in form and
substance and in quantities reasonably satisfactory to the Agent and its
counsel, each of the following:
(i) this , duly executed and delivered by the parties hereto;
106
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(ii) a certified copy of resolutions of the Board of
Directors of each of the Borrowers approving the execution, delivery and
performance of all documents required to be delivered by such parties hereunder
and the transactions contemplated therein; and
(iii) such other documents, instruments and agreements, duly
executed, deemed necessary or appropriate by the Agent.
(b) All acts and conditions (including the obtaining of any
necessary regulatory approvals and the making of any required filings,
recordings or registrations) required to be done and performed and to have
happened prior to the execution, delivery and performance of this Amendment and
for the same to constitute the legal, valid and binding obligations,
enforceable in accordance with its terms, shall have been done and performed
and shall have happened in due and strict compliance with all applicable laws
or if any of such have not been done, performed or happened, such has been
expressly disclosed to the Agent and waived by all of the Lenders in writing.
If each of the above conditions has been satisfied, on the Amendment
Effective Date, all Facility 1 Loans outstanding under the Original Credit
Agreement shall remain outstanding and shall be deemed to be Loans of the
appropriate Type under the Original Credit Agreement as amended by this
Amendment, as determined by the Agent and the Warehousing Collateral Agent,
governed by the terms hereof.
Section 9. Counterparts. This Amendment may be executed in
any number of counterparts, all of which taken together shall constitute one
agreement, and any party hereto may execute this Amendment by signing any such
counterpart.
Section 10. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 11. Miscellaneous. Except as expressly amended
hereby, the Credit Agreement and the other Loan Documents shall remain in full
force and effect. Nothing contained herein shall operate as a waiver of any
right, power or remedy of the Agent or the Lenders under the Credit Agreement
or any other Loan Document, nor constitute a waiver of any provision of the
Credit Agreement or any other Loan Document.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed as of the day and year first above written.
FIRST FINANCIAL CARIBBEAN CORPORATION,
as a Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
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- 18 -
DORAL MORTGAGE CORPORATION,
as a Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
BANKERS TRUST COMPANY,
as Agent and as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
BANCO POPULAR DE PUERTO RICO,
as Collateral Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
as a Lender
By: Illegible
Name: _______________________
Title: _______________________
108
- 19 -
THE BANK OF BOSTON,
as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇ Chmielinsti
Title: Vice President
THE BANK OF NEW YORK,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
NATIONAL CITY BANK OF KENTUCKY,
as a Lender
By: Illegible
Name: _____________________________________
Title: _____________________________________
109
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EXHIBIT A
ATTACHMENT 1-A
TO SECURITY AGREEMENT
(Warehousing Collateral)
(On Borrower Letterhead)
FACILITY 1 TRANCHE A BORROWING BASE ADDITION REPORT
[Eligible Gestation Mortgage Loans]
No. _________
__________ __, 199_
[Collateral Agent]
[Address]
Dear Sir or Madam:
As per the terms of the First Amended and Restated Credit
Agreement (as amended, modified or supplemented from time to time, the "Credit
Agreement") dated as of September 25, 1996 between the lenders party thereto,
Bankers Trust Company, as Agent (the "Agent"), [insert name of other Borrower]
and the undersigned, and the First Amended and Restated Security, Custody and
Collateral Agency Agreement (Warehousing Collateral) (as amended, modified or
supplemented from time to time, the "Security Agreement") dated as of October
10, 1996 between the Agent, the undersigned and Banco Popular de Puerto Rico,
as Collateral Agent, we hereby add the Eligible Gestation Mortgage Loans listed
on Schedule A attached hereto to the Facility 1 Tranche A Borrowing Base. The
capitalized terms used herein but not defined shall have the respective
meanings as set forth in the Credit Agreement.
With respect to each Mortgage Loan listed on the attached
schedule, we hereby certify that each of the documents listed on Attachment 2
to the Security Agreement that are required to be delivered for Eligible
Gestation Mortgage Loans has been delivered to you prior to (or is being
delivered to you simultaneously with) the delivery of this report.
With respect to each Mortgage Loan listed on the attached
schedule that was previously included in the Facility 1 Tranche B Borrowing
Base, we hereby certify that such Mortgage Loan has not been rejected by the
Certificating Custodian for pool formation following initial certification.
110
- 21 -
We hereby pledge to you the mortgage notes evidencing the
Mortgage Loans listed on the attached schedule as Collateral under the Security
Agreement for the benefit of the Secured Parties as security for the
Obligations.
[FIRST FINANCIAL CARIBBEAN CORPORATION
By: ____________________________________
Name: ____________________________________
Title: ____________________________________]
or
[DORAL MORTGAGE CORPORATION
By: ____________________________________
Name: ____________________________________
Title: ____________________________________]
111
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AFFIDAVIT
Affidavit No. ______________
Subscribed and acknowledged before me by ______________, of legal age,
(single/married), property owner and resident of ___________, ___________, in
his/her capacity as (title) __________ of First Financial Caribbean
Corporation, and ____________, of legal age, (single/married), property owner
and resident of ____________, ____________, in his/her capacity as (title)
__________ of (name of corporation), both personally known to me, in
_______________, Puerto Rico, on this ____ day of ________, 199__.
____________________________
NOTARY PUBLIC
AFFIDAVIT
Affidavit No. ______________
Subscribed and acknowledged before me by ______________, of legal age,
(single/married), property owner and resident of ___________, ___________, in
his/her capacity as (title) __________ of Doral Mortgage Corporation, and
____________, of legal age, (single/married), property owner and resident of
____________, ____________, in his/her capacity as (title) __________ of (name
of corporation), both personally known to me, in _______________, Puerto Rico,
on this ____ day of ________, 199__.
____________________________
NOTARY PUBLIC
112
- 23 -
The attached schedule may be in any form mutually acceptable to the Borrowers,
the Agent and the Collateral Agent, but shall include the following
information: whether such Eligible Gestation Mortgage Loan was previously
included in the Facility 1 Tranche B Borrowing Base, the mortgage loan number,
the name of the obligor, the interest rate, the state (if other than Puerto
Rico), the type, the term, the original principal balance and the current
principal balance.
113
- 24 -
Schedule A
Eligible Gestation Mortgage Loans
114
- 25 -
ATTACHMENT 1-B
TO SECURITY AGREEMENT
(Warehousing Collateral)
(On Borrower Letterhead)
FACILITY 1 TRANCHE A BORROWING BASE ADDITION REPORT
[Eligible Mortgage-Backed Securities]
No. _________
__________ __, 199_
[Collateral Agent]
[Address]
Dear Sir or Madam:
As per the terms of the First Amended and Restated Credit
Agreement (as amended, modified or supplemented from time to time, the "Credit
Agreement") dated as of September 25, 1996 between the lenders party thereto,
Bankers Trust Company, as Agent (the "Agent"), [insert name of other Borrower]
and the undersigned, and the First Amended and Restated Security, Custody and
Collateral Agency Agreement (Warehousing Collateral) (as amended, modified or
supplemented from time to time, the "Security Agreement") dated as of October
10, 1996 between the Agent, the undersigned and Banco Popular de Puerto Rico,
as Collateral Agent, we hereby add the Eligible Mortgage-Backed Securities
listed on Schedule A attached hereto to the Facility 1 Tranche A Borrowing
Base. The capitalized terms used but not defined herein shall have the
respective meanings as set forth in the Credit Agreement.
With respect to each Mortgage-Backed Security listed on the
attached schedule, we hereby certify that each of the documents listed on
Attachment 2 to the Security Agreement that are required to be delivered for
Eligible Mortgage-Backed Securities has been delivered to you prior to (or is
being delivered to you simultaneously with) the delivery of this report.
With respect to each Mortgage-Backed Security listed on the
attached schedule, we hereby certify that (a) if such Mortgage-Backed Security
is certificated, it has been (or is simultaneously herewith being) deposited
with you or your designated agent, bailee or custodian, endorsed in blank for
transfer, and (b) if such Mortgage-Backed Security is a Book-Entry
Mortgage-Backed Security, such Mortgage-Backed Security is the subject of a
Perfected Assignment.
115
- 26 -
We hereby pledge to you the Mortgage-Backed Securities listed
on the attached schedule as Collateral under the Security Agreement for the
benefit of the Secured Parties as security for the Obligations.
[FIRST FINANCIAL CARIBBEAN CORPORATION
By: ____________________________________
Name: ____________________________________
Title: ___________________________________]
or
[DORAL MORTGAGE CORPORATION
By: ____________________________________
Name: ____________________________________
Title: ___________________________________]
116
- 27 -
AFFIDAVIT
Affidavit No. ______________
Subscribed and acknowledged before me by ______________, of legal age,
(single/married), property owner and resident of ___________, ___________, in
his/her capacity as (title) __________ of First Financial Caribbean
Corporation, and ____________, of legal age, (single/married), property owner
and resident of ____________, ____________, in his/her capacity as (title)
__________ of (name of corporation), both personally known to me, in
_______________, Puerto Rico, on this ____ day of ________, 199__.
____________________________
NOTARY PUBLIC
AFFIDAVIT
Affidavit No. ______________
Subscribed and acknowledged before me by ______________, of legal age,
(single/married), property owner and resident of ___________, ___________, in
his/her capacity as (title) __________ of Doral Mortgage Corporation, and
____________, of legal age, (single/married), property owner and resident of
____________, ____________, in his/her capacity as (title) __________ of (name
of corporation), both personally known to me, in _______________, Puerto Rico,
on this ____ day of ________, 199__.
____________________________
NOTARY PUBLIC
117
- 28 -
The attached schedule may be in any form mutually acceptable to Borrowers, the
Agent and the Collateral Agent, but shall include the following information for
each Eligible Mortgage-Backed Security:
The MBS number, the interest rate, the term and the face amount of the
Mortgage-Backed Security.
118
- 29 -
Schedule A
Eligible Mortgage-Backed Securities
119
- 30 -
ATTACHMENT 1-C
TO SECURITY AGREEMENT
(Warehousing Collateral)
(On Borrower Letterhead)
FACILITY 1 TRANCHE B BORROWING BASE ADDITION REPORT
[Eligible Conforming and Eligible Non-Conforming Mortgage Loans]
No. _________
__________ __, 199_
[Collateral Agent]
[Address]
Dear Sir or Madam:
As per the terms of the First Amended and Restated Credit
Agreement (as amended, modified or supplemented from time to time, the "Credit
Agreement") dated as of September 25, 1996 between the lenders party thereto,
Bankers Trust Company, as Agent (the "Agent"), [insert name of other Borrower]
and the undersigned, and the First Amended and Restated Security, Custody and
Collateral Agency Agreement (Warehousing Collateral) (as amended, modified or
supplemented from time to time, the "Security Agreement") dated as of October
10, 1996 between the Agent, the undersigned and Banco Popular de Puerto Rico,
as Collateral Agent, we hereby add the Eligible Conforming Mortgage Loans and
the Eligible Non-Conforming Mortgage Loans listed on Schedule A attached
hereto to the Facility 1 Tranche B Borrowing Base. The capitalized terms used
herein but not defined shall have the respective meanings as set forth in the
Credit Agreement.
With respect to each Mortgage Loan listed on the attached
schedule, we hereby certify that each of the documents listed on Attachment 2
to the Security Agreement that are required to be delivered for Eligible
Conforming Mortgage Loans or Eligible Non-Conforming Mortgage Loans, as
applicable, has been delivered to you prior to (or is being delivered to you
simultaneously with) the delivery of this report. We also certify that each
such Mortgage Loan has closed.
With respect to each Eligible Conforming Mortgage Loan on the
attached schedule that was previously included in the Facility 1 Tranche A
Borrowing Base, we hereby certify that such Mortgage has been rejected by the
Certificating Custodian for pool formation following initial certification
thereof.
120
- 31 -
We hereby pledge to you the mortgage notes evidencing the
Mortgage Loans listed on the attached schedule as Collateral under the Security
Agreement for the benefit of the Secured Parties as security for the
Obligations.
[FIRST FINANCIAL CARIBBEAN CORPORATION
By: ____________________________________
Name: ____________________________________
Title: ____________________________________]
or
[DORAL MORTGAGE CORPORATION
By: ____________________________________
Name: ____________________________________
Title: ____________________________________]
121
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AFFIDAVIT
Affidavit No. ______________
Subscribed and acknowledged before me by ______________, of legal age,
(single/married), property owner and resident of ___________, ___________, in
his/her capacity as (title) __________ of First Financial Caribbean
Corporation, and ____________, of legal age, (single/married), property owner
and resident of ____________, ____________, in his/her capacity as (title)
__________ of (name of corporation), both personally known to me, in
_______________, Puerto Rico, on this ____ day of ________, 199__.
____________________________
NOTARY PUBLIC
AFFIDAVIT
Affidavit No. ______________
Subscribed and acknowledged before me by ______________, of legal age,
(single/married), property owner and resident of ___________, ___________, in
his/her capacity as (title) __________ of Doral Mortgage Corporation, and
____________, of legal age, (single/married), property owner and resident of
____________, ____________, in his/her capacity as (title) __________ of (name
of corporation), both personally known to me, in _______________, Puerto Rico,
on this ____ day of ________, 199__.
____________________________
NOTARY PUBLIC
122
- 33 -
The attached schedule may be in any form mutually acceptable to the Borrowers,
the Agent and the Collateral Agent, but shall include the following
information: whether such Mortgage Loan was previously included in the
Facility 1 Tranche A Borrowing Base, the mortgage loan number, the name of the
obligor, the interest rate, the state (if other than Puerto Rico), the type,
the term, the original principal balance and the current principal balance.
123
- 34 -
ATTACHMENT 1-D
TO SECURITY AGREEMENT
(Warehousing Collateral)
Assignment Supplement
This document assigns those certain contracts more
particularly described in Schedule A attached hereto and made a part hereof
(the "Contracts"), pursuant to the terms of that certain [First Amended and
Restated Security, Custody and Collateral Agency Agreement (Warehousing
Collateral)] [First Amended and Restated Security and Custody Agreement
(Servicing Collateral)] (as amended, modified or supplemented from time to
time, the "Security Agreement") dated as of October 10, 1996 by and among the
undersigned, [insert name of other Borrower], [and] Bankers Trust Company, as
Agent,[ and the Collateral Agent]. Capitalized terms used and not defined
herein have the meanings specified in the Security Agreement.
We hereby assign to you the Contracts as Collateral under the
Security Agreement for the benefit of the Secured Parties as security for the
Obligations.
We hereby represent that simultaneously with the execution and
delivery of this Assignment Supplement we have delivered to each party to the
Contracts other than the undersigned a notice in the form of Attachment [5] [2]
to the Security Agreement.
IN WITNESS WHEREOF, this Assignment Supplement has been
executed by the undersigned in __________, Puerto Rico, this ____ day of
________, 199__.
[FIRST FINANCIAL CARIBBEAN CORPORATION
By: . . . . . . . . . . . . . . . . .
Name: . . . . . . . . . . . . . . . . .
Title: . . . . . . . . . . . . . . . . ]
or
[DORAL MORTGAGE CORPORATION
By: . . . . . . . . . . . . . . . . .
Name: . . . . . . . . . . . . . . . . .
Title: . . . . . . . . . . . . . . . . ]
124
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AFFIDAVIT
Affidavit No. ______________
Subscribed and acknowledged before me by ______________, of legal age,
(single/married), property owner and resident of ___________, ___________, in
his/her capacity as (title) __________ of First Financial Caribbean
Corporation, and ____________, of legal age, (single/married), property owner
and resident of ____________, ____________, in his/her capacity as (title)
__________ of (name of corporation), both personally known to me, in
_______________, Puerto Rico, on this ____ day of ________, 199__.
____________________________
NOTARY PUBLIC
AFFIDAVIT
Affidavit No. ______________
Subscribed and acknowledged before me by ______________, of legal age,
(single/married), property owner and resident of ___________, ___________, in
his/her capacity as (title) __________ of Doral Mortgage Corporation, and
____________, of legal age, (single/married), property owner and resident of
____________, ____________, in his/her capacity as (title) __________ of (name
of corporation), both personally known to me, in _______________, Puerto Rico,
on this ____ day of ________, 199__.
____________________________
NOTARY PUBLIC
125
- 36 -
Schedule A
Take-Out Commitments
126
- 37 -
EXHIBIT B
EXHIBIT H-1
FACILITY 1 BORROWING BASE CERTIFICATE
127
- 38 -
EXHIBIT C
EXHIBIT I
NOTICE OF BORROWING
1. We refer to the First Amended and Restated Credit
Agreement (as amended, modified or supplemented from time to time, the "Credit
Agreement") dated as of September 25, 1996 by and between First Financial
Caribbean Corporation and Doral Mortgage Corporation, the Lenders party
thereto and Bankers Trust Company, as Agent. Capitalized terms used herein
without definitions shall have the meaning set forth in the Credit Agreement.
2. The undersigned, [First Financial Caribbean
Corporation, a corporation duly organized under the laws of the Commonwealth of
Puerto Rico,] [Doral Mortgage Corporation, a corporation duly organized under
the laws of the Commonwealth of Puerto Rico] ("Borrower"), hereby requests a
[Facility 1Tranche A] [Facility 1 Tranche B] [Facility 2 Tranche A] [Facility 2
Tranche B](1) [Facility 2 Tranche C] [Swing-Line] Borrowing in the aggregate
principal amount of $__________(2) to be made on ________________, 199___.(3)
[Such Facility 1 Tranche B Borrowing shall consist of [Fed Funds] [Eurodollar]
Loans.] [After giving effect to the Borrowing requested hereby, no more than
four (4) Eurodollar Interest Periods will be in effect.] [The Eurodollar
Interest Period for the Eurodollar Loan requested hereunder shall be [30] [60]
[90] days.]
3. [The Collateral Value of the [ Facility 1 Tranche A]
[Facility 1 Tranche B] Borrowing Base, as reported to the Borrowers by the
Warehousing Collateral Agent on the date hereof, is $___________.] [The
Collateral Value of the Facility 2 Tranche A Borrowing Base, as reported by the
Borrowers on the most recent Facility 2 Tranche A Borrowing Base Certificate is
$_____.] [The Collateral Value of the Facility 2 Tranche B Borrowing Base, as
determined in accordance with the Credit Agreement, is $____.] The Borrower
represents and warrants that it has no reason to believe that such amount is
incorrect. The aggregate principal amount of the Facility 1 Tranche A Loans,
Facility 1 Tranche B Loans, Swing-Line Loans and Facility 2
__________________________________
(1) No more than two Facility 2 Tranche B Borrowings may be outstanding
simultaneously at any time.
(2) Minimum amount of $1,000,000 for each Facility 1 Borrowing and each
Facility 2 Tranche B Borrowing. Minimum amount of $500,000 for each
Facility 2 Tranche A Borrowing and each Facility 2 Tranche C
Borrowing. No minimum amount for a Swing-Line Borrowing.
(3) Must be a Eurodollar Business Day for a Borrowing of Eurodollar Loans
and a Business Day for a Borrowing of all other Loans.
128
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Loans, and the aggregate face amount of Facility 1 Acceptances outstanding,
after giving effect to the Borrowing requested hereby will not exceed the
maximum amounts permitted under Sections 2.1 and 2.8 of the Credit Agreement.
4. The representations and warranties of the Borrowers
contained in the Loan Documents are accurate and complete in all material
respects on and as of the date hereof and will be accurate and complete in all
material respects on and as of the date of the Borrowing requested hereunder
both before and after giving effect to the Borrowing requested hereunder.
5. No Potential Default or Event of Default has occurred
and is continuing on the date hereof and none will occur after giving effect to
the Borrowing to be made in accordance with the terms hereof.
6. Since December 31, 1995, no material adverse change
has occurred in the business, financial condition or results of operations of
FFCC and its Subsidiaries, taken as a whole.
Date: _________ __, 199_.
[FIRST FINANCIAL CARIBBEAN CORPORATION
By: ____________________________________
Name: ____________________________________
Title: ____________________________________]
or
[DORAL MORTGAGE CORPORATION
By: ____________________________________
Name: ____________________________________
Title: ____________________________________]
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EXHIBIT D
EXHIBIT J
NOTICE OF CONVERSION/CONTINUATION
1. We refer to the First Amended and Restated Credit
Agreement (as amended, modified or supplemented from time to time, the "Credit
Agreement") dated as of September 25, 1996 by and between First Financial
Caribbean Corporation and Doral Mortgage Corporation, the Lenders party thereto
and Bankers Trust Company, as Agent. Capitalized terms used herein without
definitions shall have the meaning set forth in the Credit Agreement.
2. The undersigned, [First Financial Caribbean
Corporation, a corporation duly organized under the laws of the Commonwealth of
Puerto Rico,] [Doral Mortgage Corporation, a corporation duly organized under
the laws of the Commonwealth of Puerto Rico] ("Borrower"), hereby requests to
[convert an aggregate principal amount of Facility 1 Tranche B Loans that
constitute [Fed Funds] [Eurodollar] Loans equal to $__________(1) to [Fed Funds]
[Eurodollar] Loans] [continue an aggregate principal amount of Facility 1
Tranche B Loans that constitute Eurodollar Loans equal to $_____________] on
________________, 199_.(2) [The Eurodollar Interest Period for such Eurodollar
Loans following the requested [conversion] [continuation] shall be [30] [60]
[90] days.] [After giving effect to the conversion or continuation requested
hereby, no more than four (4) Eurodollar Interest Periods will be in effect.]]
3. The Collateral Value of the Facility 1 Tranche B
Borrowing Base, as reported to the Borrowers by the Warehousing Collateral
Agent on the date hereof, is $______. The aggregate principal amount of the
Facility 1 Tranche A Loans, Facility 1 Tranche B Loans and Swing-Line Loans and
the aggregate face amount of Facility 1 Acceptances outstanding after giving
effect to the [conversion] [continuation] hereunder will not exceed the maximum
amounts permitted under Sections 2.1 and 2.8 of the Credit Agreement.
__________________________________
(1) Minimum amount of $1,000,000 for a conversion of Fed Funds Loans into
Eurodollar Loans.
(2) Must be a Eurodollar Business Day for a conversion into or
continuation of Eurodollar Loans and a Business Day for conversions
into or continuations of all other Loans.
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4. No Potential Default or Event of Default has occurred
and is continuing on the date hereof and none will occur after giving effect to
the [conversion] [continuation] to be made pursuant to the terms hereof.(3)
Date: _________ __, 199_.
[FIRST FINANCIAL CARIBBEAN CORPORATION
By: ____________________________________
Name: ____________________________________
Title: ____________________________________]
or
[DORAL MORTGAGE CORPORATION
By: ____________________________________
Name: ____________________________________
Title: ____________________________________]
__________________________________
(3) Only required for a conversion into or a continuation of a
Eurodollar Loan.