Exhibit 10.1
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SECOND AMENDED AND RESTATED
WAREHOUSING CREDIT, TERM LOAN AND SECURITY
AGREEMENT (SYNDICATED)
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BETWEEN
COLUMBIA NATIONAL INCORPORATED,
a Maryland corporation
and
AMERICAN HOME MORTGAGE CORP.,
a New York corporation
and
AMERICAN HOME MORTGAGE ACCEPTANCE, INC.
a Maryland corporation
as Borrowers
AND
Lenders Party Hereto
AND
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
as Credit Agent
AND
U.S. BANK NATIONAL ASSOCIATION ,
a national banking association
and
MANUFACTURERS AND TRADERS TRUST COMPANY
a New York banking corporation
as Co-Agents
Dated as of May 27, 2004
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TABLE OF CONTENTS
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1. THE CREDIT................................................................1-1
1.1. Warehousing Commitment..........................................1-1
1.2. Expiration of Warehousing Commitment............................1-2
1.3. Swingline Facility..............................................1-2
1.4. Term Loan Commitment............................................1-2
1.5. Expiration of Term Loan Commitment..............................1-3
1.6. Notes...........................................................1-3
1.7. Non-Receipt of funds by Credit Agent............................1-3
1.8. Replacement Notes...............................................1-4
1.9. Joint and Several Liability.....................................1-4
1.10 Limitation on Warehousing Advances and Term Loan Advances
Against Other Eligible Assets.................................1-4
2. PROCEDURES FOR OBTAINING ADVANCES.........................................2-1
2.1. Warehousing Advances............................................2-1
2.2. Term Loan Advances..............................................2-1
2.3. Estimate of Advances............................................2-2
3. INTEREST, PRINCIPAL AND FEES..............................................3-1
3.1. Interest........................................................3-1
3.2. Interest Limitation.............................................3-2
3.3. Principal Payments..............................................3-2
3.4. Warehousing Commitment Fees.....................................3-5
3.5. Term Loan Non-Usage Fees........................................3-5
3.6. Agent's Fee.....................................................3-6
3.7. Loan Package Fees, Wire Fees, Warehousing Fees..................3-6
3.8. Miscellaneous Fees and Charges..................................3-6
3.9. [Intentionally Omitted].........................................3-6
3.10. Method of Making Payments......................................3-6
3.11. Illegality.....................................................3-7
3.12. Increased Costs; Capital Requirements..........................3-7
3.13. Withholding Taxes..............................................3-8
4. COLLATERAL................................................................4-1
4.1. Grant of Security Interest......................................4-1
4.2. Maintenance of Collateral Records...............................4-3
4.3. Release of Security Interest in Pledged Loans and Pledged
Securities....................................................4-3
4.4. Release of Security Interest in Other Eligible Assets...........4-4
4.5. Collection and Servicing Rights.................................4-4
4.6. Return of Collateral at End of Commitments......................4-5
4.7. Delivery of Collateral Documents................................4-5
4.8. Borrowers Remains Liable........................................4-5
4.9. Further Assurance...............................................4-6
5. CONDITIONS PRECEDENT......................................................5-1
5.1. Initial Advance.................................................5-1
5.2. Each Advance....................................................5-3
5.3. Force Majeure...................................................5-3
6. GENERAL REPRESENTATIONS AND WARRANTIES....................................6-1
6.1. Place of Business...............................................6-1
6.2. Organization; Good Standing; Subsidiaries.......................6-1
6.3. Authorization and Enforceability................................6-1
6.4. Authorization and Enforceability of Guaranty....................6-2
6.5. Approvals.......................................................6-2
6.6. Financial Condition.............................................6-2
6.7. Litigation......................................................6-2
6.8. Compliance with Laws............................................6-2
6.9. Regulation U....................................................6-3
6.10. Investment Company Act.........................................6-3
6.11. Payment of Taxes...............................................6-3
6.12. Agreements.....................................................6-3
6.13. Title to Properties............................................6-4
6.14. ERISA..........................................................6-4
6.15. No Retiree Benefits............................................6-4
6.16. Assumed Names..................................................6-4
6.17. Servicing......................................................6-4
7. AFFIRMATIVE COVENANTS.....................................................7-1
7.1. Payment of Obligations..........................................7-1
7.2. Financial Statements............................................7-1
7.3. Other Borrowers Reports.........................................7-2
7.4. Maintenance of Existence; Conduct of Business...................7-3
7.5. Compliance with Applicable Laws.................................7-3
7.6. Inspection of Properties and Books; Operational Reviews.........7-3
7.7. Notice..........................................................7-4
7.8. Payment of Debt, Taxes and Other Obligations....................7-4
7.9. Insurance.......................................................7-4
7.10. Closing Instructions...........................................7-4
7.11. Subordination of Certain Indebtedness..........................7-5
7.12. Other Loan Obligations.........................................7-5
7.13. ERISA..........................................................7-5
7.14. Use of Proceeds of Warehousing Advances........................7-5
7.15. Use of Proceeds of Term Loan Advances..........................7-6
8. NEGATIVE COVENANTS........................................................8-1
8.1.Contingent Liabilities...........................................8-1
8.2.Limitation on Liens..............................................8-1
8.3.Restrictions on Fundamental Changes..............................8-1
8.4. Deferral of Subordinated Debt...................................8-2
▇.▇.▇▇▇▇▇▇▇▇▇▇▇......................................................8-2
8.6. Loss of Eligibility.............................................8-2
8.7. Accounting Changes..............................................8-2
8.8. Leverage Ratio..................................................8-2
8.9. Minimum Tangible Net Worth......................................8-3
8.10. Minimum Book Net Worth.........................................8-3
8.11. Liquid Assets..................................................8-3
8.12. Maximum Servicing Delinquencies................................8-3
8.13. Maximum Servicing Foreclosures.................................8-3
8.14. Distributions to Shareholders..................................8-3
8.15. Transactions with Affiliates...................................8-3
8.16. Recourse Servicing Contracts...................................8-3
9. SPECIAL REPRESENTATIONS, WARRANTIES AND COVENANTS CONCERNING
COLLATERAL...................................................................9-1
9.1. Special Representations and Warranties Concerning
Eligibility as Seller/Servicer of Mortgage Loans................9-1
9.2. Special Representations and Warranties Concerning Warehousing
Collateral......................................................9-1
9.3. Special Representations and Warranties Concerning REO
Properties Included as Other Eligible Assets.........................9-3
9.4. Special Representations and Warranties Concerning Servicing
Collateral...........................................................9-4
9.5. Special Representations and Warranties Concerning
P&I Advance Receivables.........................................9-5
9.6. Special Representations and Warranties Concerning
T&I Advance Receivables.........................................9-5
9.7. Special Representations and Warranties Concerning
Foreclosure Advance Receivables.................................9-5
9.8. Special Affirmative Covenants Concerning Warehousing
Collateral....................................................9-6
9.9 Special Affirmative Covenants Concering REO Properties..........9-7
9.10 Special Nevative Covenants Concering Warehouisng Collateral...9-7
10. DEFAULTS; REMEDIES......................................................10-1
10.1. Events of Default.............................................10-1
10.2. Remedies......................................................10-3
10.3. Application of Proceeds.......................................10-6
10.4. Credit Agent Appointed Attorney-in-Fact.......................10-8
10.5. Right of Set-Off..............................................10-8
10.6. Sharing of Payments ..........................................10-8
11. AGENT ................................................................11-1
11.1. Appointment...................................................11-1
11.2. Duties of Agent...............................................11-1
11.3. Standard of Care..............................................11-1
11.4. Delegation of Duties..........................................11-2
11.5. Exculpatory Provisions........................................11-2
11.6. Reliance by Agent.............................................11-2
11.7. Non-Reliance on Agent or Other Lenders........................11-3
11.8. Agent in Individual Capacity..................................11-3
11.9. Successor Agent...............................................11-3
11.10.Availability of Documents.....................................11-4
12. MISCELLANEOUS...........................................................12-1
12.1. Notices.......................................................12-1
12.2. Reimbursement Of Expenses; Indemnity..........................12-1
12.3. Indemnification by Lenders....................................12-2
12.4. Financial Information.........................................12-3
12.5. Terms Binding Upon Successors; Survival of Representations....12-3
12.6. Lenders in Individual Capacity................................12-3
12.7. Assignments and Participations................................12-3
12.8. Commitment Increases..........................................12-4
12.9. Amendments....................................................12-4
12.10.Governing Law.................................................12-5
12.11. Relationship of the Parties..................................12-5
12.12. Severability.................................................12-6
12.13. Consent to Credit References.................................12-6
12.14. Counterparts.................................................12-6
12.15. Headings/Captions............................................12-6
12.16. Entire Agreement.............................................12-6
12.17. Consent to Jurisdiction......................................12-6
12.18. Waiver of Jury Trial.........................................12-7
12.19. Waiver of Punitive, Consequential, Special or
Indirect Damages...........................................12-7
12.20. Waiver of Defaults Under Existing Agreement..................12-7
13. DEFINITIONS.............................................................13-1
13.1. Defined Terms.................................................13-1
13.2. Other Definitional Provisions; Terms of Construction.........13-15
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EXHIBITS
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Exhibit A Request for Advance (Eligible Loans)
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Exhibit A-CON Request for Advance Request (Construction/Perm Mortgage Loans)
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Exhibit A-WC Request for Advance Request (Other Eligible Assets)
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Exhibit A-TL Term Loan Advance Request
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Exhibit B Procedures and Documentation for Warehousing Single Family
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Mortgage Loans
Exhibit B-CON Procedures and Documentation for Warehousing Construction and
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Construction/Perm Mortgage Loans
Exhibit C Schedule of Servicing Portfolio
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Exhibit D Subsidiaries
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Exhibit E Officer's Certificate
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Exhibit F Schedule of Existing Lines of Credit
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Exhibit G Assumed Names
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Exhibit H Eligible Loans and Other Eligible Assets
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Exhibit I Collateral Operations Fee Schedule (Single Family)
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Exhibit J Commitment Summary Report
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Exhibit K Terms of Guaranteed Obligations
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Exhibit L Warehousing Commitment Amounts
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Exhibit M Term Loan Commitment Amounts
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Exhibit N Advance Certificate
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Exhibit O Approved Custodians and Investors
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SECOND AMENDED AND RESTATED
WAREHOUSING CREDIT, TERM LOAN AND
SECURITY AGREEMENT (SYNDICATED)
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SECOND AMENDED AND RESTATED WAREHOUSING CREDIT, TERM LOAN AND SECURITY
AGREEMENT (SYNDICATED), dated as of May 10, 2004, between COLUMBIA
NATIONAL INCORPORATED, a Maryland corporation ("CNI"), AMERICAN HOME
MORTGAGE CORP., INC., a New York corporation ("AHMC"), and AMERICAN HOME
MORTGAGE ACCEPTANCE, INC. a Maryland corporation ("AHMAI") (each of CNI,
AHMC and AHMAI, a "Borrower," and CNI, AHMC and AHMAI together, the
"Borrowers"), RESIDENTIAL FUNDING CORPORATION ("RFC"), COLONIAL BANK,
N.A. ("Colonial"), CALYON NEW YORK BRANCH ("Calyon"), FLEET NATIONAL
BANK ("Fleet"), MANUFACTURERS AND TRADERS TRUST COMPANY ("MTTC"), THE
BANK OF NEW YORK ("BNY"), U.S. BANK NATIONAL ASSOCIATION ("U.S. Bank")
and COMMERZBANK AG ("Commerzbank"), BANK HAPOALIM B.M. ("Bank Hapoalim")
(RFC, Colonial, Calyon, Fleet, MTTC, BNY, U.S. Bank, Commerzbank, Bank
Hapoalim and any Additional Lenders as may from time to time become a
party hereto and their respective successors and permitted assigns being
referred to individually as a "Lender" and collectively as the
"Lenders"), MTTC and U.S. Bank as co-agents for Lenders (collectively
"Co-Agents"), and RFC as credit agent for Lenders (in such capacity,
"Credit Agent").
Borrowers have requested certain financing from Lenders.
Borrowers have asked Lenders and Credit Agent to amend and restate the
Existing Agreement (as defined below) and to set forth the terms and
conditions upon which Lenders will provide certain financing to
Borrowers.
Credit Agent and Lenders have agreed to amend and restate the Existing
Agreement to provide that financing to Borrowers subject to the terms
and conditions of this Agreement.
The "Closing Date" for the transactions contemplated by this Agreement
is May 27, 2004.
NOW, THEREFORE, the parties to this Agreement agree as follows:
THE CREDIT
1.1. Warehousing Commitment
On the terms and subject to the conditions of this Agreement, Lenders
agree, severally and not jointly, to make Warehousing Advances to
Borrowers from the Closing Date to the Business Day immediately
preceding the Warehousing Maturity Date, pro rata in accordance with
their respective Percentage Shares, during which period Borrowers may
borrow, repay and reborrow in accordance with the provisions of this
Agreement. The total aggregate principal amount of all Warehousing
Advances and Swingline Advances outstanding at any one time may not
exceed the Warehousing Credit Limit. While a Default or Event of Default
exists, Lenders may refuse to make any additional Warehousing Advances
to Borrowers. Effective as of the Closing Date, all outstanding loans
made under the Existing Agreement are deemed to be Warehousing Advances
and Swingline Advances or Term Loan Advances, as applicable, made under
this Agreement. All
Warehousing Advances and Swingline Advances under this Agreement
constitute a single indebtedness, and all of the Collateral is security
for the Warehousing Note, the Swingline Note and for the performance of
all of the Obligations.
1.2. Expiration of Warehousing Commitment
The Warehousing Commitment expires on the earlier of ("Warehousing
Maturity Date"): (a) August 30, 2004, as such date may be extended in
writing by Lenders and Credit Agent, in their sole discretion, on which
date the Warehousing Commitment will expire of its own term and the
Warehousing Advances will become due and payable, in each case without
the necessity of Notice or action by Lenders, and (b) the date the
Warehousing Commitment is terminated and the Warehousing Advances become
due and payable under Section 10.2.
1.3. Swingline Facility
On the terms and subject to the conditions set forth herein, RFC may,
from time to time to but not including the Business Day immediately
preceding the Warehousing Maturity Date, make Advances ("Swingline
Advances") requested by Borrowers, in an aggregate amount not to exceed
the Swingline Facility Amount, without requesting Warehousing Advances
or Term Loan Advances from the other Lenders. At such time as Borrowers
have borrowed the maximum amount available under the Swingline Facility
Amount, RFC Agrees to provide Borrowers 1 day's Notice. Lenders hereby
agree to purchase from RFC an undivided participation interest in all
outstanding Swingline Advances at any time in an amount equal to each
Lender's Percentage Share of such Swingline Advances. RFC may at any
time in its sole and absolute discretion (and shall no less frequently
than weekly and upon the acceleration of the Obligations following an
Event of Default) request Lenders to make Warehousing Advances or Term
Loan Advances, as applicable, in principal amounts equal to their
Percentage Shares of outstanding Swingline Advances, and each Lender
absolutely and unconditionally agrees to fund such Warehousing Advances
or Term Loan Advances, as applicable, regardless of any Default or Event
of Default or other condition which would otherwise excuse such Lender
from funding such Advances, provided that no Lender shall be required to
make Advances to repay Swingline Advances or purchase participations in
Swingline Advances which would cause such Lender's aggregate Warehousing
Advances or Term Loan Advances (including participations in Swingline
Advances), as applicable, then outstanding to exceed the amount of such
Lender's Warehousing Commitment Amount or Term Loan Commitment Amount,
as applicable. Each Lender's Advances made pursuant to the preceding
sentence shall be delivered directly to RFC in immediately available
funds at the office of Credit Agent by 4:00 p.m. on the day of the
request therefor by RFC if such request is made on or before 3:00 p.m.,
or by 9:00 a.m. on the 1st Business Day following such request if such
request is made after 3:00 p.m., and shall be promptly applied against
the outstanding Swingline Advances. At the time of any request for
Advances from Lenders pursuant to this Section 1.3, Credit Agent shall
deliver to each Lender a certificate in the form of Exhibit N attached
hereto (the "Advance Certificate"), certified by Credit Agent. For
purposes of the limitations set forth in Exhibit H hereto, Swingline
Advances made against Eligible Loans or Other Eligible Assets shall be
deemed to be Warehousing Advances, and Swingline Advances against
Servicing Collateral shall be deemed to be Term Loan Advances.
1.4. Term Loan Commitment
On the terms and subject to the conditions of this Agreement, Lenders
agree, severally and not jointly, to make Term Loan Advances to
Borrowers from the Closing Date to the Business Day immediately
preceding the Term Loan Commitment Termination Date, pro rata in
accordance
with their respective Percentage Shares, during which period Borrowers
may borrow, repay and reborrow in accordance with the provisions of this
Agreement. The total aggregate principal amount outstanding at any one
time of all Term Loan Advances may not exceed the Term Loan Credit
Limit. While a Default or Event of Default exists, Lenders may refuse to
make any additional Term Loan Advances to Borrowers. All Term Loan
Advances under this Agreement shall constitute a single indebtedness,
and all of the Collateral shall be security for the Term Loan Note and
for the payment and performance of all the Obligations.
1.5. Expiration of Term Loan Commitment
The Term Loan Commitment expires on the earlier of ("Term Loan
Commitment Termination Date"): (a) August 30, 2004, as such date may be
extended in writing by Lenders, in their sole discretion, on which date
the Term Loan Commitment will expire of its own term, without the
necessity of Notice or action by Lenders, and (b) the date the Term Loan
Commitment is terminated under Section 10.2.
1.6. Notes
Warehousing Advances against Eligible Loans made by each Lender are
evidenced by Borrowers' promissory note, payable to such Lender, in the
form prescribed by Credit Agent (each, a "Warehousing Note").
Warehousing Advances against Other Eligible Assets made by each Lender
are evidenced by Borrowers' promissory note, payable to such Lender, in
the form prescribed by Credit Agent (each, a "Sublimit Note"). Swingline
Advances of the Borrowers in favor of RFC are evidenced by Borrowers'
promissory note, payable to RFC, in the form prescribed by Credit Agent
(the "Swingline Note"). Term Loan Advances made by each Lender are
evidenced by Borrowers' promissory note, payable to such Lender, in the
form prescribed by Credit Agent (each, a "Term Loan Note"). The terms
"Warehousing Note," "Sublimit Note," "Swingline Note" and "Term Loan
Note" as used in this Agreement, include all amendments, restatements,
renewals or replacements of the original "Warehousing Notes," `Sublimit
Notes," "Swingline Note," "Term Loan Notes" and all substitutions for
any of them. All terms and provisions of the "Warehousing Notes,"
"Sublimit Notes," "Swingline Note" and "Term Loan Notes" are
incorporated into this Agreement.
1.7. Non-Receipt of funds by Credit Agent.
If Credit Agent receives notice from a Lender that such Lender does not
intend to make its Percentage Share of any Advances, neither Credit
Agent nor any other Lenders shall have any obligation to fund such
Lender's Percentage Share. Notwithstanding the foregoing, unless a
Lender notifies Credit Agent by 3:00 p.m. on the date of a proposed
Advance that it does not intend to make its Percentage Share of such
Advance available to Credit Agent at such time and on such date, Credit
Agent may assume that such Lender will make such amount available to
Credit Agent to be advanced to the Borrowers, and in reliance on such
assumption, Credit Agent may, at its option, make a corresponding amount
available to the Borrowers.
1.7(a) If Credit Agent makes such corresponding amount available to the
Borrowers and such amount is not made available to Credit Agent by such
Lender by close of business on the date of the Advance, such Lender
shall pay such amount to Credit Agent upon demand plus interest to the
date of payment at a rate per annum equal to the Federal Funds Rate.
1.7(b) If a Lender fails to pay as provided herein, the Borrowers shall
pay such amount to Credit Agent upon demand plus interest (at the rate
applicable to the Borrowers for such Warehousing Advance) to the date of
repayment.
1.7(c) Nothing in this Section 1.7 shall relieve any Lender from its
obligation to fund its Percentage Share of any Advance, or prejudice any
rights the Borrowers may have against any Lender as a result of such
Lender's failure to make its Percentage Share of any Advance.
1.8. Replacement Notes.
Upon receipt by Borrowers of an affidavit of an officer of any Lender as
to the loss, theft, destruction or mutilation of any Note, and, in the
case of any such loss, theft, destruction or mutilation, upon receipt by
Borrowers of such Note, Borrowers will issue, in lieu thereof, a
replacement note in the same principal amount thereof and otherwise of
like tenor.
1.9. Joint and Several Liability
Advances shall be made to any Borrower (except to the extent otherwise
provided herein), as shall be requested in the Advance Request, but each
Advance, regardless of which Borrower it is made to, shall be deemed
made to or for the benefit of all Borrowers, and each Borrower jointly
and severally shall be obligated to repay all Advances. With respect to
its obligation to repay Advances made to any other Borrower, each
Borrower agrees to the terms set forth in Exhibit K.
1.10. Limitation on Warehousing Advances and Term Loan Advances
Lenders will make Warehousing Advances against Eligible Loans and Other
Eligible Assets and Term Loan Advances against Servicing Contracts, upon
the request of Borrowers, in the manner provided in Article 2, for the
purposes set forth in Section 7.14 and 7.15. Lenders' obligation to make
Warehousing Advances against Eligible Loans and Other Eligible Assets
and Term Loan Advances are subject to the limitations set forth in
Exhibit H.
End of Article 0
PROCEDURES FOR OBTAINING ADVANCES
2.1. Warehousing Advances
2.1(a) To obtain a Warehousing Advance under this Agreement, Borrowers
must deliver to Credit Agent either a completed and signed request for a
Warehousing Advance on the then current form approved by Credit Agent or
an Electronic Advance Request, ("Warehousing Advance Request"), not
later than (i) in the case of Electronic Advance Requests, 2:30 p.m. on
the Business Day, and (ii) in all other cases, 1 Business Day before the
Business Day, on which Borrowers desire the Warehousing Advance. Subject
to the delivery of a Warehousing Advance Request, Borrowers may obtain a
Warehousing Advance under this Agreement upon compliance with the
procedures set forth in this Section and in the applicable Exhibit B,
including delivery to Credit Agent of all required Collateral Documents.
Credit Agent's current form of Warehousing Advance Request is set forth
in the applicable Exhibit A. Upon not less than 3 Business Days' prior
Notice to Borrowers, Credit Agent may modify its form of Warehousing
Advance Request, and any other Exhibit or document referred to in this
Section to conform to either current legal requirements or Credit Agent
practices and, as so modified, those Exhibits and documents will become
part of this Agreement. Credit Agent will promptly notify Lenders of any
changes made to any document under the preceding sentence.
2.1(b) In making the determination whether Warehousing Advances shall be
made against an Eligible Loan, Credit Agent will be permitted to rely,
without independent investigation of the correctness thereof, on the
most recent information supplied by Borrowers to Credit Agent with
respect to the Weighted Average Committed Purchase Price. Credit Agent
will disburse Warehousing Advances against Eligible Loans and other
amounts to fund the origination or acquisition of such Eligible Loans in
such manner as Credit Agent determines, in its sole discretion.
2.1(c) To make Warehousing Advances against Other Eligible Assets
hereunder, Credit Agent shall disburse the amount thereof into the
Operating Account.
2.2. Term Loan Advances
2.2(a) To obtain a Term Loan Advance hereunder, Borrowers must deliver
to Credit Agent, not later than 9:30 a.m. on the Business Day on which
Borrowers desire to borrow Term Loan Advances hereunder, a completed and
signed request for Term Loan Advances ("Term Loan Advance Request") on
the then current form approved by Credit Agent. The current form in use
by Credit Agent is Exhibit A-TL attached hereto. Credit Agent shall have
the right, on not less than 3 Business Days' prior Notice to Borrowers,
to modify Exhibit A-TL to conform to current legal requirements or
Credit Agent practices and, as so modified, said Exhibit shall be deemed
a part hereof.
2.2(b) To make Term Loan Advances hereunder, Credit Agent shall disburse
the amount thereof (i) in the case of Term Loan Advances made to finance
a Servicing Acquisition, to the seller in such Servicing Acquisition as
directed by a Borrower; and (ii) in all other cases, into the Operating
Account.
2.3. Estimate of Advances
Borrowers will provide to Credit Agent, by the close of business on each
Business Day, an estimate of the amount, if any, of Warehousing Advances
against Other Eligible Assets and Term Loan Advances Borrowers expect to
request on the following Business Day.
End of Article 0
INTEREST, PRINCIPAL AND FEES
3.1. Interest
3.1(a) Except as otherwise provided in this Section, Borrowers must pay
interest on the unpaid amount of each Warehousing Advance and each Term
Loan Advance from the date that such Advance is made until it is paid in
full at the Interest Rate specified in Exhibit H.
3.1(b) Borrowers and any Lender may enter into an agreement (the
"Balance Funded Agreement") pursuant to which Borrowers agree to
maintain deposits with such Lender or a Designated Bank in consideration
of the funding of all or a portion of such Lender's Advances at a
Balance Funded Rate. Borrowers may give written notice to any Lender
with which it has a Balance Funded Agreement, as and when provided in
such Balance Funded Agreement, of Borrowers' election to have a portion
(the "Balance Funded Portion") of the principal amount of such Lender's
Advances bear interest at the Balance Funded Rate during any calendar
month. In the event Borrowers elect to have all or a portion of any
Lender's Advances bear interest at the Balance Funded Rate during any
month, such Lender shall notify Credit Agent no later than 12:00 Noon on
the second Business Day of the following month of the estimated amount
by which the interest to be paid by Borrowers on such Lender's Advances
during such month was reduced as a result of the application of such
Balance Funded Agreement. If the deposits maintained by Borrowers with
such Lender or its Designated Bank during such month are less than the
amount required with respect to the Balance Funded Portion, or if the
estimate provided by a Lender pursuant to the previous sentence is not
accurate, such Lender may charge and separately ▇▇▇▇ Borrowers a
deficiency fee (a "Balance Deficiency Fee"), or credit Borrowers with
any amount by which interest billed exceeded interest actually due, the
amount of which shall be set forth in the Balance Funded Agreement
between Borrowers and such Lender.
3.1(c) Credit Agent computes interest on the basis of the actual number
of days in each month and a year of 360 days ("Accrual Basis").
Borrowers must pay interest monthly in arrears, not later than 9 days
after the date of Credit Agent's invoice or, if applicable, 2 days after
the date of Credit Agent's account analysis statement, commencing with
the first month following the Closing Date and on the Warehousing
Maturity Date.
3.1(d) If (1) Borrowers repay a Warehousing Advance on the same day that
it was made by Credit Agent or (2) Borrowers instruct Credit Agent not
to make a previously requested Warehousing Advance after Credit Agent
has reserved funds or made other arrangements necessary to enable Credit
Agent to fund that Warehousing Advance, Borrowers agree to pay to Credit
Agent for the benefit of Lenders an administrative fee equal to 1 day of
interest on that Warehousing Advance at the Interest Rate that would
otherwise be applicable under Exhibit H for the applicable Eligible Loan
or Other Eligible Asset type.
3.1(e) After an Event of Default occurs and upon Notice to Borrowers by
Credit Agent, the unpaid amount of each Advance will bear interest at
the Default Rate until paid in full.
3.1(f) Credit Agent will adjust the rates of interest provided for in
this Agreement as of the effective date of each change in the applicable
index. Credit Agent's determination of such rates of interest as of any
date of determination are conclusive and binding, absent manifest error.
3.2. Interest Limitation
Credit Agent and Lenders do not intend, by reason of this Agreement, the
Notes or any other Loan Document, to receive interest in excess of the
amount permitted by applicable law. If Credit Agent or Lenders receive
any interest in excess of the amount permitted by applicable law,
whether by reason of acceleration of the maturity of this Agreement, the
Notes or otherwise, Credit Agent will apply the excess to the unpaid
principal balance of the Advances and not to the payment of interest. If
all Advances have been paid in full and the Commitments have expired or
have been terminated, Credit Agent will remit any excess to Borrowers.
This Section controls every other provision of all agreements between
Borrowers, Credit Agent and Lenders and is binding upon and available to
any subsequent holder of the Notes.
3.3. Principal Payments
3.3 (a) Borrowers must pay to Credit Agent for the benefit of Lenders
the outstanding principal amount of all Warehousing Advances and
Swingline Advances on the Warehousing Maturity Date.
3.3 (b) Borrowers must pay to Credit Agent for the benefit of Lenders
the outstanding principal amount of all Term Loan Advances on the Term
Loan Maturity Date.
3.3 (c) Except as otherwise provided in Section 3.1, Borrowers may
prepay any portion of the Advances without premium or penalty at any
time.
3.3 (d) Borrowers must pay to Credit Agent for the benefit of Lenders,
without the necessity of prior demand or Notice from Credit Agent, and
Borrowers authorize Credit Agent to cause the Funding Bank to charge
Borrowers' Operating Account for the amount of any outstanding
Warehousing Advances or Swingline Advances against a specific Pledged
Asset upon the earliest occurrence of any of the following events:
(1) One (1) Business Day elapses from the date a Warehousing Advance
was made if the Pledged Loan to be funded by that Warehousing
Advance is not closed and funded.
(2) Ten (10) Business Days elapse without the return of a Collateral
Document delivered by Credit Agent to a Borrower under a Trust
Receipt for correction or completion.
(3) On the date on which a Pledged Loan is determined to have been
originated based on untrue, incomplete or inaccurate information or
otherwise to be subject to fraud, whether or not Borrowers had
knowledge of the misrepresentation, incomplete or incorrect
information or fraud, on the date on which any Borrower knows, has
reason to know, or receives Notice from Credit Agent, that (A) one
or more of the representations and warranties set forth in Article 9
were inaccurate or incomplete in any material respect on any date
when made or deemed made, or (B) any Borrower has failed to perform
or comply with any covenant, term or condition set forth in Article
9.
(4) On the date the Pledged Loan or a Lien prior to the Mortgage
securing repayment of the Pledged Loan is defaulted and remains in
default for a period of 30 days or more.
(5) Upon the sale, other disposition or prepayment of any Pledged
Asset or, with respect to a Pledged Loan included in an Eligible
Mortgage Pool, upon the sale or other disposition of the related
Agency Security.
(6) One (1) Business Day immediately preceding the date scheduled
for the foreclosure or trustee sale of the premises securing a
Pledged Loan.
(7) If the outstanding Warehousing Advances against Pledged Loans of
a specific type of Eligible Loan exceed the aggregate Purchase
Commitments for that type of Eligible Loan.
3.3 (e) Upon telephonic or written Notice to Borrowers by Credit Agent,
Borrowers must pay to Credit Agent for the benefit of Lenders, and
Borrowers authorize Credit Agent to cause the Funding Bank to charge
Borrowers' Operating Account for the amount of any outstanding
Warehousing Advance against a specific Pledged Asset upon the earliest
occurrence of any of the following events:
(1) For any Pledged Loan, other than an Aged Mortgage Loan, the
Standard Warehouse Period elapses and, for any Aged Mortgage Loan,
the Aged Warehouse Period elapses.
(2) Forty-five (45) days or, in the case of a Bond Program Mortgage
Loan, 75 days, elapse from the date a Pledged Loan was delivered to
an Investor or Approved Custodian for examination and purchase or
for inclusion in a Mortgage Pool, without the purchase being made or
an Eligible Mortgage Pool being initially certified, or upon
rejection of a Pledged Loan as unsatisfactory by an Investor or
Approved Custodian.
(3) Seven (7) Business Days elapse from the date a Wet Settlement
Advance was made against a Pledged Loan without receipt by Credit
Agent of all Collateral Documents relating to the Pledged Loan.
(4) Three (3) Business Days after the mandatory delivery date of the
related Purchase Commitment if the specific Pledged Loan or the
Pledged Security backed by that Pledged Loan has not been delivered
under the Purchase Commitment prior to such mandatory delivery date,
or on the date the related Purchase Commitment expires or is
terminated, unless, in each case, the Pledged Loan or Pledged
Security is eligible for delivery to another Investor under a
comparable Purchase Commitment.
(5) With respect to any Pledged Loan, any of the Collateral
Documents, upon examination by Credit Agent (and at the reasonable
discretion of the Credit Agent), are found not to be in compliance
with the requirements of this Agreement or the related Purchase
Commitment.
3.3 (f) In addition to the payments required by Sections 3.3(d) and
3.3(e), if the principal amount of any Pledged Loan or Other Eligible
Asset is prepaid in whole or in part while a Warehousing Advance or
Swingline Advance are outstanding against the Pledged Loan or Other
Eligible Asset, Borrowers must pay to Credit Agent, without the
necessity of prior demand or Notice from Credit Agent, and Borrowers
authorize Credit Agent to cause the Funding Bank to charge Borrowers'
Operating Account for, the amount of the prepayment, to be applied
against the Warehousing Advance or Swingline Advance.
3.3 (g) The proceeds of the sale or other disposition of Pledged Assets
must be paid directly by the Investor or other obligor to the Cash
Collateral Account. Borrowers must give Notice to Credit Agent in
writing or by telephone or by RFConnects Delivery to Credit Agent (and
if by telephone, followed promptly by written Notice) of the Pledged
Assets for which proceeds have been received. Upon receipt of Borrowers'
Notice, Credit Agent will apply any proceeds deposited into the Cash
Collateral Account to the payment of the Advances related to the Pledged
Assets identified by Borrowers in their Notice, and those Pledged Assets
will be considered to have been
redeemed from pledge. Credit Agent is entitled to rely upon Borrowers'
affirmation that deposits in the Cash Collateral Account represent
payments from Investors or obligors for the purchase of the Pledged
Assets specified by Borrowers in their Notice. If the payment from an
Investor for the purchase of Pledged Assets is less than the outstanding
Advances against the Pledged Assets identified by Borrowers in their
Notice, Borrowers must pay to Credit Agent, and Borrowers authorize
Credit Agent to cause the Funding Bank to charge Borrowers' Operating
Account in an amount equal to that deficiency. As long as no Default or
Event of Default exists, Credit Agent will return to Borrowers any
excess payment from an Investor or obligor for Pledged Assets unless the
Majority Lenders instruct Credit Agent otherwise. For the purposes of
this Section 3.3(f), payments made by check into the Cash Collateral
Account shall be deemed received when the check has cleared in
accordance with Credit Agent's usual procedures.
3.3 (h) Credit Agent reserves the right to revalue any Pledged Loan that
is not (i) covered by a Purchase Commitment from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac, or (ii) to be exchanged for an Agency Security if that Agency
Security is covered by a Purchase Commitment. Borrowers must pay to
Credit Agent, without the necessity of prior demand or Notice from
Credit Agent, and Borrowers authorize Credit Agent to cause the Funding
Bank to charge Borrowers' Operating Account for, any amount required
after any such revaluation to reduce the principal amount of the
Warehousing Advance outstanding against the revalued Pledged Loan to an
amount equal to the Advance Rate for the applicable type of Eligible
Loan, multiplied by the Fair Market Value of the Mortgage Loan, as
applicable
3.3 (i) If at any time the aggregate outstanding principal balance of
all Term Loan Advances exceeds the Servicing Collateral Value, Borrowers
shall prepay the Term Loan Advances in the amount of such excess. If at
any time the aggregate outstanding principal balance of all Term Loan
Advances and Warehousing Advances made against Other Eligible Assets
exceeds 90% of the most recent Appraisal Value of the Servicing
Portfolio (adjusted to reflect additions to and deletions from the
Eligible Servicing Portfolio since the date of the relevant Appraisal),
Borrowers shall prepay the following types of Advances, in order, in the
amount of such excess:
Warehousing Advances outstanding against Other Eligible Assets,
other than Repurchased Maturing Mortgage Loans;
Term Loan Advances; and
Warehousing Advances outstanding against Repurchased Maturing
Mortgage Loans.
3.3 (j) Amounts received by Credit Agent as proceeds of the sale or
other disposition of or payments on Pledged Loans, Pledged Securities
and Other Eligible Assets and applied to the principal amount of
Warehousing Advances shall be allocated among Lenders as follows:
(1) First, except in the case of proceeds of or payments on Other
Eligible Assets, to RFC until the principal amount of Swingline
Advances have been paid in full; and
(2) Second, pro rata to the Lenders in accordance with their
respective Percentage Shares.
Amounts applied to Swingline Advances set forth above shall be
deemed to be a repayment of the Warehousing Advances deemed pursuant
to Section 1.3 to be outstanding against such Pledged Loans or
Pledged Securities.
3.3 (k) The outstanding amount of any Swingline Advance made pursuant to
Section 1.3 shall be payable in full within 1 Business Day after the
date of such Advance.
3.4. Warehousing Commitment Fees
Borrowers must pay each Lender, through Credit Agent, a fee
("Warehousing Commitment Fee") in the amount of 0.125% per annum of the
amount of such Lender's Warehousing Commitment Amount. The Warehousing
Commitment Fee is payable quarterly in advance. Credit Agent computes
the Warehousing Commitment Fee on the basis of the actual number of days
in each Calendar Quarter and a year of 360 days. On the Closing Date,
Borrowers must pay the prorated portion of the Warehousing Commitment
Fee due from the Closing Date to the last day of the current Calendar
Quarter. After the Closing Date, Borrowers must pay the Warehousing
Commitment Fee within 9 days after the date of Credit Agent's invoice
or, if applicable, within 2 days after the date of Credit Agent's
account analysis statement. If any Lender increases its Warehousing
Commitment Amount, or if an Additional Lender becomes a party hereto,
during any Calendar Quarter, Borrowers shall pay the prorated portion of
the Warehousing Commitment Fee on the amount of such increase or the
amount of such Additional Lender's Warehousing Commitment Amount from
the effective date thereof to the last day of the current Calendar
Quarter. If the date set forth in clause (a) of the definition of
Warehousing Maturity Date occurs on a day other than the last day of a
Calendar Quarter, Borrowers must pay the prorated portion of the
Warehousing Commitment Fee due from the beginning of the then current
Calendar Quarter to and including that date. Borrowers are not entitled
to a reduction in the amount of the Warehousing Commitment Fee if (a)
the Warehousing Commitment Amounts are reduced or (b) the Warehousing
Commitment is terminated at the request of Borrowers or as a result of
an Event of Default. If the Warehousing Commitment terminates at the
request of Borrowers or as a result of an Event of Default, Borrowers
must pay, on the date of termination, a Warehousing Commitment Fee on
the Warehousing Commitment Amounts in effect immediately prior to
termination, for the period from the date of termination to and
including the date set forth in clause (a) of the definition of
Warehousing Maturity Date on the date of such termination. Credit
Agent's determination of the Warehousing Commitment Fee for any period
is conclusive and binding, absent manifest error.
3.5. Term Loan Non-Usage Fees
At the end of each Calendar Quarter during the term of this Agreement,
Credit Agent will determine the average usage of the Term Loan
Commitment by calculating the arithmetic daily average of the Term Loan
Advances outstanding during each month during such Calendar Quarter
("Used Portion"). Credit Agent will then subtract the Used Portion from
the arithmetic daily average of the Term Loan Credit Limit during each
such month, and the result, if positive, will be known as the "Unused
Portion." Borrowers agree to pay to Credit Agent, for the account of
Lenders, a fee ("Non-Usage Fee") in the amount of 0.20% per annum of the
Unused Portion during each month during such Calendar Quarter. The
Non-Usage Fee is payable quarterly, in arrears. Credit Agent computes
the Non-Usage Fee on the basis of the actual number of days in each
month and a year of 360 days. Borrowers must pay the Non-Usage Fee
within 9 days after of the date of Credit Agent's invoice or if
applicable, within 2 days after the date of Credit Agent's account
analysis statement. If the date set forth in clause (a) of the
definition of Term Loan Maturity Date occurs on a day other than the
last day of a Calendar Quarter, Borrowers must pay the prorated portion
of the Non-Usage Fee due from the beginning of the then current Calendar
Quarter to and including that date. Borrowers are not entitled to a
reduction in the amount of the Non-Usage Fee if the Term Loan Commitment
Amount is terminated at the request of Borrowers or as a result of an
Event of Default. If the Term Loan Commitment terminates at the request
of Borrowers or as a result of an Event of Default, Borrowers must pay,
on the date of termination, a Non-Usage Fee in the amount of 0.20% per
annum on (i) through the date of such termination, the Unused Portion,
and (ii) from and after the date of such termination to and including
the date set forth in clause (a) of the definition of Term Loan
Commitment Terminaton Date, the Term
Loan Credit Limit. Credit Agent's determination of the Non-Usage Fee for
any period is conclusive and binding, absent manifest error.
3.6. Agent's Fee
Borrowers shall pay to Credit Agent, for its own account, such fees as
shall be separately agreed between Borrowers and Credit Agent.
3.7. Loan Package Fees, Wire Fees, Warehousing Fees
At the time of each Warehousing Advance against an Eligible Loan,
Borrowers will incur a loan package fee ("Loan Package Fee") and a wire
fee ("Wire Fee"). Loan Package Fees and Wire Fees may, at Credit Agent's
discretion, be billed separately or combined into a single warehousing
fee ("Warehousing Fee"). Borrowers must pay all Loan Package Fees, Wire
Fees or Warehousing Fees in the amount separately agreed between
Borrowers and Credit Agent within 9 days after the date of Credit
Agent's invoice or, if applicable, within 2 days after the date of
Credit Agent's account analysis statement.
3.8. Miscellaneous Fees and Charges
Borrowers must reimburse Credit Agent for all Miscellaneous Fees and
Charges. Borrowers must pay all Miscellaneous Fees and Charges within 9
days after the date of Credit Agent's invoice or, if applicable, within
2 days after the date of Credit Agent's account analysis statement.
3.9. [Intentionally Omitted]
3.10. Method of Making Payments
3.10 (a) Credit Agent shall, on or before the 5th Business Day of each
month, deliver to Borrowers ▇▇▇▇▇▇▇▇ for interest due and payable on
Advances, the Warehousing Commitment Fees, the Term Loan Non-Usage Fees,
Miscellaneous Charges payable to it and other fees and charges
calculated through the end of the preceding month. On or after the 9th
Business Day of each month, Borrowers shall pay to Credit Agent the full
amount of interest, fees and charges billed as described above.
3.10 (b) All payments made on account of the Obligations shall be made
by Borrowers to Credit Agent for distribution to Lenders, except for
Balance Deficiency Fees, which shall be made directly to the applicable
Lenders, and fees and charges payable to Credit Agent for its own
account. All payments made on account of the Obligations shall be made
without setoff or counterclaim, free and clear of and without deduction
for any taxes, fees or other charges of any nature whatsoever imposed by
any taxing authority, and must be received by Credit Agent by 1:30 p.m.
on the day of payment, it being expressly agreed and understood that if
a payment is received after 1:30 p.m. by Credit Agent such payment will
be considered to have been made on the next succeeding Business Day and
interest thereon shall be payable by Borrowers at the then applicable
rate during such extension. No principal payments resulting from the
sale of Pledged Loans or Pledged Securities shall be deemed to have been
received by Credit Agent until Credit Agent has also received the Notice
required under Section 3.3(g). All payments shall be made in lawful
money of the United States of America in immediately available funds
transferred via wire to the Cash Collateral Account. If any payment
required to be made by Borrowers hereunder becomes due and payable on a
day other than a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and interest shall be payable on
Advances so extended at the then applicable rate during such extension.
3.10 (c) All amounts received by Credit Agent on account of the
Obligations (except amounts received in respect of fees or expenses
payable hereunder to Credit Agent for its own account or amounts payable
to RFC for Swingline Advances) shall be disbursed to Lenders by wire
transfer on the date of receipt if received by Credit Agent by the
applicable deadlines for payment thereof as specified in Section 3.10(b)
hereof, or if received later, by 12:00 noon on the next succeeding
Business Day, without any interest payable by Credit Agent thereon.
3.10 (d) Without limiting any other right that Credit Agent or any
Lender may have under applicable law or otherwise, while a Default or
Event of Default exists, Borrowers authorize Credit Agent to cause the
Funding Bank to charge Borrowers' Operating Account, for any Obligations
due and owing, without the necessity of prior demand or Notice from
Credit Agent.
3.11. Illegality
In the event that any Lender shall have determined (which determination
shall be conclusive and binding absent manifest error) at any time that
the introduction of, or any change in, any applicable law, rule,
regulation, order or decree or in the interpretation or the
administration thereof by any Person charged with the interpretation or
administration thereof, or compliance by such Lender with any request or
directive (whether or not having the force of law) of any such Person,
shall make it unlawful or impossible for such Lender to charge interest
at the Balance Funded Rate based on Borrowers' Eligible Balances as
contemplated by this Agreement, then such Lender shall forthwith give
Notice thereof to Credit Agent and Borrowers describing such illegality
in reasonable detail. Upon the giving of such Notice, the obligation of
such Lender to charge interest at the Balance Funded Rate based on
Borrowers' Eligible Balances shall be immediately suspended for the
duration of such illegality and with respect to Advances bearing
interest at the Balance Funded Rate, each such Advance of such Lender
shall bear interest at the applicable Interest Rate described in Exhibit
H. If and when such illegality ceases to exist, such Lender shall notify
Credit Agent and Borrowers thereof and such suspension shall cease.
3.12. Increased Costs; Capital Requirements
In the event any applicable law, order, regulation or directive issued
by any governmental or monetary authority, or any change therein or in
the governmental or judicial interpretation or application thereof, or
compliance by any Lender with any request or directive (whether or not
having the force of law) by any governmental or monetary authority:
3.12 (a) Does or shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement or any Advances made
hereunder, or change the basis of taxation on payments to such Lender of
principal, fees, interest or any other amount payable hereunder (except
for change in the rate of tax on the overall gross or net income of such
Lender by the jurisdiction in which such Lender principal office is
located); or
3.12 (b) Does or shall impose, modify or hold applicable any reserve,
capital requirement, special deposit, compulsory loan or similar
requirement against assets held by, or deposits or other liabilities in
or for the account of, advances or loans by, or other credit extended
by, or any other acquisition of funds by, such Lender which are not
otherwise included in the determination of the interest rate as
calculated hereunder;
and the result of any of the foregoing is to increase the cost to such
Lender of making, renewing or maintaining any Advance or to reduce any
amount receivable in respect thereof or to reduce the rate of return on
the capital of such Lender or any Person controlling such Lender as it
relates to credit facilities in the nature of that evidenced by this
Agreement, then, in any such case, Borrowers shall promptly pay any
additional amounts necessary to compensate such Lender for such
additional cost or reduced amounts receivable or reduced rate of return
as determined by such Lender with respect to this Agreement or Advances
made hereunder. If a Lender becomes entitled to claim any additional
amounts pursuant to this Section, it shall notify Borrowers through
Credit Agent of the event by reason of which it has become so entitled
and Borrowers shall pay such amount within 15 days thereafter. A
certificate as to any additional amount payable pursuant to the
foregoing sentence containing the calculation thereof in reasonable
detail submitted by a Lender, through Credit Agent, to Borrowers shall
be conclusive in the absence of manifest error.
3.13. Withholding Taxes
3.13 (a)(1) Any and all payments by Borrowers hereunder or under the
Notes shall be made free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto imposed on it by
any jurisdiction (excluding, in the case of each Lender and Credit
Agent, (y) franchise taxes imposed on or measured by its income by the
jurisdiction under the laws of which such Lender or Credit Agent, as the
case may be, is organized or any political subdivision thereof, and, (z)
if such Lender or Credit Agent is entitled at such time to a total or
partial exemption from withholding that is required to be evidenced by a
United States Internal Revenue Service Form, taxes imposed on it by
reason of any failure of such Lender or Credit Agent to deliver to
Credit Agent or the Borrowers, from time to time as required by Credit
Agent or Borrowers, such Form, completed in a manner reasonably
satisfactory to Credit Agent or the Borrowers) (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If Borrowers
shall be required by law to deduct any taxes from or in respect of any
sum payable hereunder or under any Note to any Lender or Credit Agent
(i) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 3.13) such Lender or Credit
Agent (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) Borrowers shall
make such deductions, and (iii) Borrowers shall pay the full amount
deducted to the relevant taxing authority or other authority in
accordance with applicable law.
(2) Borrowers will indemnify each Lender and Credit Agent for the
full amount of taxes (including, without limitation, any taxes
imposed by any jurisdiction on amounts payable under this Section
3.13 paid by such Lender or Credit Agent (as the case may be) and
any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such taxes were
correctly or legally asserted. This indemnification shall be made
within 30 days from the date such Lender or Credit Agent (as the
case may be) makes written demand therefor.
(3) Within 30 days after the date of any payment of taxes, Borrowers
will furnish to Credit Agent the original or a certified copy of a
receipt evidencing payment thereof.
(4) Prior to the Closing Date, in the case of each Lender which is
an original signatory hereto, and on the date of the assignment
pursuant to which it becomes a Lender, in the case of each other
Lender, and from time to time thereafter if requested by Borrowers
or Credit Agent, each Lender organized under the laws of a
jurisdiction outside the United States that is entitled to an
exemption from United States withholding tax, or
that is subject to such tax at a reduced rate under an applicable
tax treaty, shall provide Credit Agent and Borrowers with an
Internal Revenue Service Form W-8BEN or W-8ECI or other applicable
form, certificate or document prescribed by the Internal Revenue
Service of the United States certifying as to such Lender's
entitlement to such exemption or reduced rate with respect to all
payments to be made to such Lender hereunder and under the Notes.
Unless Borrowers and Credit Agent have received forms or other
documents satisfactory to them indicating that payments hereunder or
under any Note are not subject to United States withholding tax or
are subject to such tax at a rate reduced by an applicable tax
treaty, Borrowers or Credit Agent shall withhold taxes from such
payments at the applicable statutory rate in the case of payments to
or for any Lender organized under the laws of a jurisdiction outside
the United States.
(5) Any Lender claiming any additional amounts payable pursuant to
this Section 3.13 shall use its best efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its applicable lending office to a jurisdiction in
which such Lender already has a lending office if the making of such
a change would avoid the need for, or reduce the amount of, any such
additional amounts which may thereafter accrue and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to
such Lender.
(6) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this Section 3.13 shall survive the payment in full of
principal and interest hereunder and under the Notes.
3.13 (b) If Borrowers become obligated to pay additional amounts
described in Section 3.13(a) as a result of any condition described in
such Section and payment of such amount is demanded by any Lender, then
unless a Default or an Event of Default shall have occurred and be
continuing or such Lender has theretofore taken steps that will promptly
remove or cure the conditions creating the cause for such obligation to
pay such additional amounts, or has revoked such election, as the case
may be, Borrowers may, on 10 Business Days' prior written Notice to
Credit Agent, who shall promptly send a copy of such notice to each
Lender, cause such Lender to (and such Lender shall, upon payment in
full of all amounts outstanding in respect of such Lender's Advances,
including accrued interest thereon, and all other amounts due and
payable to such Lender hereunder) assign pursuant to Section 12.6 all of
its rights and obligations under this Agreement to a Lender or other
Person selected by Borrowers and reasonably acceptable to Credit Agent.
End of Article 3
COLLATERAL
4.1. Grant of Security Interest
As security for the payment of the Notes and for the performance of all
of Borrowers' Obligations, Borrowers grant a security interest to Credit
Agent, for the benefit of Lenders, in all of Borrowers' right, title and
interest in and to the following described property ("Collateral"):
4.1 (a) All amounts advanced by Credit Agent to or for the account of
Borrowers under this Agreement to fund a Mortgage Loan until that
Mortgage Loan is closed and those funds disbursed.
4.1 (b) All Mortgage Loans, including all Mortgage Notes, Mortgages and
Security Agreements evidencing or securing those Mortgage Loans, that
are delivered or caused to be delivered to Credit Agent or any Lender
(including delivery to a third party on behalf of Credit Agent), or that
otherwise come into the possession, custody or control of Credit Agent
or any Lender (including the possession, custody or control of a third
party on behalf of Credit Agent) for the purpose of pledge or in respect
of which Credit Agent has made an Advance under this Agreement
(collectively, "Pledged Loans").
4.1 (c) All Mortgage-backed Securities that are created in whole or in
part on the basis of Pledged Loans or that are delivered or caused to be
delivered to Credit Agent or any Lender (including delivery to a third
party on behalf of Credit Agent), or that otherwise come into the
possession, custody or control of Credit Agent or any Lender (including
the possession, custody or control of a third party on behalf of Credit
Agent) or that are registered by book-entry in the name of Credit Agent
or any Lender (including registration in the name of a third party on
behalf of Credit Agent), in each case for the purpose of pledge, or in
respect of which an Advance has been made under this Agreement
(collectively, "Pledged Securities").
4.1 (d) All private mortgage insurance and all commitments issued by the
VA or FHA to insure or guarantee any Mortgage Loans included in the
Pledged Loans, all Purchase Commitments held by Borrowers covering
Pledged Loans or Pledged Securities, and all proceeds from the sale of
Pledged Loans or Pledged Securities to Investors pursuant to those
Purchase Commitments; and all personal property, contract rights,
servicing rights or contracts and servicing fees and income or other
proceeds, amounts and payments payable to Borrowers as compensation or
reimbursement, accounts, payments, intangibles and general intangibles
of every kind relating to Pledged Loans, Pledged Securities, Purchase
Commitments, VA commitments or guaranties, FHA commitments, private
mortgage insurance and commitments, and all other documents or
instruments relating to Pledged Loans and Pledged Securities, including
any interest of Borrowers in any fire, casualty or hazard insurance
policies and any awards made by any public body or decreed by any court
of competent jurisdiction for a taking or for degradation of value in
any eminent domain proceeding as the same relate to Pledged Loans.
4.1 (e) All Servicing Contracts now owned or created or acquired by
Borrowers after the date of this Agreement that do not, by their terms,
prohibit the creation of a Lien thereon in favor of Credit Agent
(collectively, "Pledged Servicing Contracts").
4.1 (f) All rights of Borrowers to receive payments under or by virtue
of the Servicing Contracts owned by Borrowers, whether as servicing
fees, servicing income, damages, amounts payable upon the cancellation
or termination of those Servicing Contracts, interest on the foregoing,
or otherwise (collectively, "Pledged Servicing Payments").
4.1 (g) All agreements under which any Servicing Contract owned by
Borrowers was acquired or is sold by Borrowers (including the
acquisition or sale of a Person that owns the Servicing Contract), and
all documents executed or delivered in connection with that acquisition
or sale (collectively, "Pledged Servicing Acquisition/Disposition
Agreements").
4.1 (h) All accounts or general intangibles owned by Borrowers
("Receivables") for the payment of money against (1) VA under a VA
guaranty of, FHA or a private mortgage insurer under an FHA or private
insurer's mortgage insurance policy insuring payment of, or any other
Person under any other agreement (including a Servicing Contract)
relating to, all or part of a defaulted Mortgage Loan repurchased by
Borrowers from an investor or out of a pool of Mortgage Loans serviced
by Borrowers, (2) obligors and their accounts, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac,
▇▇▇▇▇▇ Mae or any other investor under a Servicing Contract covering, or
out of the proceeds of any sale of or foreclosure sale in respect of,
any Mortgage Loan (A) repurchased by Borrowers out of a pool of Mortgage
Loans serviced by Borrowers, or (B) being serviced by Borrowers, in
either case, for the reimbursement of real estate taxes or assessments,
or casualty or liability insurance premiums, paid by Borrowers in
connection with Mortgage Loans, and (3) obligors and their accounts, or
▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇ or any other investor under or in
respect of, or out of the proceeds of any sale or foreclosure sale in
respect of, any Mortgage Loans serviced by Borrowers for repayment of
advances made by Borrowers to cover shortages in principal and interest
payments.
4.1 (i) All escrow accounts, documents, instruments, files, surveys,
certificates, correspondence, appraisals, computer programs, tapes,
discs, cards, accounting records (including all information, records,
tapes, data, programs, discs and cards necessary or helpful in the
administration or servicing of the Collateral) and other information and
data of Borrowers relating to the Collateral.
4.1 (j) All cash, whether now existing or acquired after the date of
this Agreement, delivered to or otherwise in the possession of Credit
Agent or any Lender, the Funding Bank or Credit Agent's agent, bailee or
custodian or designated on the books and records of Borrowers as
assigned and pledged to Credit Agent, including all cash deposited in
the Cash Collateral Account, the Check Disbursement Account and the Wire
Disbursement Account.
4.1 (k) All Hedging Arrangements related to the Collateral ("Pledged
Hedging Arrangements") and Borrowers' accounts in which those Hedging
Arrangements are held ("Pledged Hedging Accounts"), including all rights
to payment arising under the Pledged Hedging Arrangements and the
Pledged Hedging Accounts, except that Credit Agent's security interest
in the Pledged Hedging Arrangements and Pledged Hedging Accounts applies
only to benefits, including rights to payment, related to the
Collateral.
4.1 (l) All cash and non-cash proceeds of the Collateral, including all
dividends, distributions and other rights in connection with, and all
additions to, modifications of and replacements for, the Collateral, and
all products and proceeds of the Collateral, together with whatever is
receivable or received when the Collateral or proceeds of Collateral are
sold, collected, exchanged or otherwise disposed of, whether such
disposition is voluntary or involuntary, including all rights to payment
with respect to any cause of action affecting or relating to the
Collateral or proceeds of Collateral.
4.2. Maintenance of Collateral Records
As long as the Commitments are outstanding or there remain any
Obligations to be paid or performed under this Agreement or under any
other Loan Document, Borrowers must preserve and maintain, at their
chief executive office and principal place of business or in a regional
office
approved by Credit Agent, or in the office of a computer service bureau
engaged by Borrowers and approved by Credit Agent and, upon request,
make available to Credit Agent or Lenders the originals, or copies in
any case where the originals have been delivered to Credit Agent or to
an Investor, of the Mortgage Notes, Mortgages and Security Agreements
included in Pledged Loans, Mortgage-backed Securities delivered to
Credit Agent as Pledged Securities, Purchase Commitments, and all
related Mortgage Loan documents and instruments, and all files, surveys,
certificates, correspondence, appraisals, computer programs, tapes,
discs, cards, accounting records and other information and data relating
to the Collateral.
4.3. Release of Security Interest in Pledged Loans and Pledged Securities
4.3 (a) Except as provided in Section 4.3(b), Credit Agent will release
its security interest in the Pledged Loans only against payment to
Credit Agent of the Release Amount in connection with those Pledged
Loans. If Pledged Loans are transferred to a pool custodian or an
Investor for inclusion in a Mortgage Pool and Credit Agent's security
interest in the Pledged Loans included in the Mortgage Pool is not
released before the issuance of the related Mortgage-backed Security,
then that Mortgage-backed Security, when issued, is a Pledged Security,
Credit Agent's security interest continues in the Pledged Loans backing
that Pledged Security and Credit Agent is entitled to possession of the
Pledged Security in the manner provided in this Agreement.
4.3 (b) If Pledged Loans are transferred to an Approved Custodian and
included in an Eligible Mortgage Pool, Credit Agent's security interest
in the Pledged Loans included in the Eligible Mortgage Pool will be
released upon the delivery of the Agency Security to Credit Agent
(including delivery to or registration in the name of a third party on
behalf of Credit Agent) and that Agency Security is a Pledged Security.
Credit Agent's security interest in that Pledged Security will be
released only against payment to Credit Agent of the Release Amount in
connection with the Mortgage Loans backing that Pledged Security.
4.3 (c) Credit Agent has the exclusive right to possession of all
Pledged Securities or, if Pledged Securities are issued in book-entry
form or issued in certificated form and delivered to a clearing
corporation (as that term is defined in the Uniform Commercial Code of
Minnesota) or its nominee, Credit Agent has the right to have the
Pledged Securities registered in the name of a securities intermediary
(as that term is defined in the Uniform Commercial Code of Minnesota) in
an account containing only customer securities and credited to an
account of Credit Agent with respect to which Credit Agent is the
entitlement holder. Credit Agent has no duty or obligation to deliver
Pledged Securities to an Investor or to credit Pledged Securities to the
account of an Investor or an Investor's designee except against payment
for those Pledged Securities. Borrowers acknowledge that Credit Agent
may enter into one or more standing arrangements with securities
intermediaries with respect to Pledged Securities issued in book entry
form or issued in certificated form and delivered to a clearing
corporation or its designee, under which the Pledged Securities are
registered in the name of the securities intermediary, and Borrowers
agree, upon request of Credit Agent, to execute and deliver to those
securities intermediaries Borrowers' written concurrence in any such
standing arrangements.
4.3 (d) If no Default or Event of Default occurs, Borrowers may redeem a
Pledged Loan or Pledged Security from Credit Agent's security interest
by notifying Credit Agent of its intention to redeem the Pledged Loan or
Pledged Security from pledge and either (1) paying, or causing an
Investor to pay, to Credit Agent, for application as a prepayment on the
principal balance of the Warehousing Note, the Release Amount in
connection with the Pledged Loan or the Pledged Loans backing that
Pledged Security, or (2) delivering substitute Collateral that, in
addition to being acceptable to Credit Agent in its sole discretion
will, when included with the remaining Collateral, result in a
Warehousing Collateral Value of all Collateral held by Credit Agent that
is at
least equal to the aggregate outstanding Warehousing Advances (other
than Warehousing Advances against Other Eligible Assets).
4.3 (e) After a Default or Event of Default occurs, Credit Agent may,
with no liability to Borrowers or any Person, continue to release its
security interest in any Pledged Loan or Pledged Security against
payment of the Release Amount for that Pledged Loan or for the Pledged
Loans backing that Pledged Security.
4.3 (f) The amount to be paid by Borrowers to obtain the release of
Credit Agent's security interest in a Pledged Loan ("Release Amount")
will be (1) in connection with the sale of a Pledged Loan by Borrowers,
the payment required in any bailee letter pursuant to which Credit Agent
ships that Pledged Loan to an Investor, Approved Custodian, pool
custodian or other party, (2) in connection with the sale of a Pledged
Loan by Credit Agent while an Event of Default exists, the amount paid
to Credit Agent in a commercially reasonable disposition of that Pledged
Loan and (3) otherwise, until an Event of Default occurs, the principal
amount of the Warehousing Advance outstanding against the Pledged Loan.
4.4. Release of Security Interest in Other Eligible Assets
Assets other than Pledged Loans, Pledged Securities and related
Collateral will be released from Credit Agent's security
interest in connection with any sale thereof permitted pursuant
to this Agreement, provided that any prepayment of Advances
required in connection with or a result of such sale under
Section 3.3, including Section 3.3(f), 3.3(g) and 3.3(i), is
made prior to, or at the time of, such sale.
4.5. Collection and Servicing Rights
4.5 (a) If no Event of Default exists, Borrowers may service and receive
and collect directly all sums payable to Borrowers in respect of the
Collateral other than proceeds of any Purchase Commitment or proceeds of
the sale of any Collateral. All proceeds of any Purchase Commitment or
any other sale of Collateral must be paid directly to the Cash
Collateral Account for application as provided in this Agreement.
4.5 (b) After an Event of Default, Credit Agent or its designee is
entitled to service and receive and collect all sums payable to
Borrowers in respect of the Collateral, and in such case (1) Credit
Agent or its designee in its discretion may, in its own name, in the
name of Borrowers or otherwise, demand, ▇▇▇ for, collect or receive any
money or property at any time payable or receivable on account of or in
exchange for any of the Collateral, but Credit Agent has no obligation
to do so, (2) Borrowers must, if Credit Agent requests it to do so, hold
in trust for the benefit of Credit Agent and immediately pay to Credit
Agent at its office designated by Notice, all amounts received by
Borrowers upon or in respect of any of the Collateral, advising Credit
Agent as to the source of those funds and (3) all amounts so received
and collected by Credit Agent will be held by it as part of the
Collateral.
4.6. Return of Collateral at End of Commitments
If (a) the Commitments have expired or been terminated, and (b) no
Advances, interest or other Obligations are outstanding and unpaid,
Credit Agent will release its security interest and will deliver all
Collateral in its possession to Borrowers at Borrowers' expense.
Borrowers' acknowledgement or receipt for any Collateral released or
delivered to Borrowers under any provision of this Agreement is a
complete and full acquittance for the Collateral so returned, and Credit
Agent is discharged from any liability or responsibility for that
Collateral.
4.7. Delivery of Collateral Documents
4.7 (a) Credit Agent may deliver documents relating to the Collateral to
Borrowers for correction or completion under a Trust Receipt.
4.7 (b) If no Default or Event of Default exists, upon delivery by
Borrowers to Credit Agent of shipping instructions pursuant to the
applicable Exhibit B, Credit Agent will deliver the Mortgage Notes
evidencing Pledged Loans or Pledged Securities, together with all
related loan documents and pool documents previously received by Credit
Agent under the requirements of the applicable Exhibit B, to the
designated Investor or Approved Custodian or to another party designated
by Borrowers and acceptable to Credit Agent in its sole discretion.
4.7 (c) If a Default or Event of Default exists, Credit Agent may,
without liability to Borrowers or any other Person, continue to deliver
Pledged Loans or Pledged Securities, together with all related loan
documents and pool documents in Credit Agent's possession, to the
applicable Investor, or Approved Custodian or to another party
acceptable to Credit Agent in its sole discretion.
4.7 (d) Upon receipt of Notice from Borrowers under Section 3.3(g), and
payment of the Release Amount with respect to a Pledged Loan identified
by Borrowers, Credit Agent will, at Borrowers' request, release to
Borrowers any Collateral Documents relating to the redeemed Pledged Loan
or the Pledged Loans backing a Pledged Security that Credit Agent has in
its possession and that have not been delivered to an Investor or
Approved Custodian; provided, that Credit Agent shall, if requested by
an Investor or Approved Custodian or consistent with past practices,
provide the Collateral Documents for any Pledged Loan purchased to such
Investor, and the Collateral Documents for any Pledged Loan backing
Mortgage-backed Securities to the Approved Custodian.
4.8. Borrowers Remains Liable
Anything herein to the contrary notwithstanding, Borrowers shall remain
liable under each item of the Collateral to observe and perform all the
conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms thereof and any other
agreement giving rise thereto, and in accordance with and pursuant to
the terms and provisions thereof. Whether or not Credit Agent has
exercised any rights in any of the Collateral, neither Credit Agent, nor
any Lender shall have any obligation or liability under any of the
Collateral (or any agreement giving rise thereto) by reason of or
arising out of this Agreement or the receipt by Credit Agent of any
payment relating thereto, nor shall Credit Agent nor any Lender be
obligated in any manner to perform any of the obligations of Borrowers
under or pursuant to any of the Collateral (or any agreement giving rise
thereto) to make any payment, to make any inquiry as to the nature or
the sufficiency of any payment received by it or as to the sufficiency
of any performance by any party under any of the Collateral (or any
agreement giving rise thereto), to present or file any claim, to take
any action to enforce any performance or to collect the payment of any
amounts which may have been assigned to it or to which it may be
entitled at any time or times.
4.9. Further Assurance
Borrowers authorize Credit Agent to file any financing statements, and
Borrowers agree to take whatever other actions are requested by Credit
Agent to perfect and continue Credit Agent's security interest in the
Collateral. Borrowers will execute and cooperate with Credit Agent in
obtaining from third parties control agreements in form satisfactory to
Credit Agent with respect to collateral
consisting of investment property, deposit accounts, letter-of-credit
rights, and electronic chattel paper.
End of Article 0
CONDITIONS PRECEDENT
5.1. Initial Advance
The Lenders' obligation to make the initial Advance under this Agreement
is subject to the satisfaction, in the sole discretion of Credit Agent,
of the following conditions precedent:
5.1 (a) Credit Agent must receive the following, all of which must be
satisfactory in form and content to Credit Agent, in its sole
discretion:
(1) The Notes and this Agreement duly executed by Borrowers.
(2) A certificate of CNI stating that there has been no change in
either CNI's articles or certificate of incorporation or bylaws
since those delivered in connection with the Existing Agreement and
there has been no change in the certificate as to the incumbency and
authenticity of the signatures of the officers of CNI delivered
pursuant to Section 5.1(a)(5) of the Existing Agreement, and
attaching (and certifying to) CNI's resolutions authorizing the
execution, delivery and performance of this Agreement and the other
Loan Documents, each applicable Advance Request and all other
agreements, instruments or documents to be delivered by such
Borrower under this Agreement; and certificates of good standing
dated within 60 days prior to the date of this Agreement.
(3) A certificate of AHMC stating that there has been no change in
either AHMC's articles or certificate of incorporation or bylaws
since those delivered in connection with the Existing Agreement and
that there has been no change in the certificate as to the
incumbency and authenticity of the signatures of the officers of
AMHC delivered pursuant to Section 5.1(a)(5) of the Existing
Agreement, and attaching (and certifying to) AHMC's resolutions
authorizing the execution, delivery and performance of this
Agreement and the other Loan Documents, each applicable Advance
Request and all other agreements, instruments or documents to be
delivered by such Borrower under this Agreement; and certificates of
good standing dated within 60 days prior to the date of this
Agreement.
(4) A reaffirmation of Guaranty, on the form prescribed by Credit
Agent, duly executed by AH Holdings.
(5) A certificate of AH Holdings stating that there has been no
change in either AH Holding's articles or certificate of
incorporation or bylaws since those delivered in connection with the
Existing Agreement and that there has been no change in the
certificate as to the incumbency and authenticity of the signatures
of the officers of AH Holdings delivered pursuant to Section
5.1(a)(9) of the Existing Agreement and attaching AH Holdings'
resolutions authorizing the execution, delivery and performance of
the Guaranty, as modified by the reaffirmation referred to in
Section 5.1(a)(4) of this Agreement, the other Loan Documents and
all other agreements, instruments or documents to be delivered by AH
Holdings under this Agreement or the Guaranty; and certifiates of
good standing dated within 60 days prior to the date of this
Agreement.
(6) AHMAI's articles or certificate of incorporation, together with
all amendments, as certified by the Secretary of State of Maryland,
AHMAI's bylaws, together with all amendments, certified by the
corporate secretary or assistant secretary of AHMAI and certificates
of good standing dated within 60 days prior to the date of this
Agreement.
(7) A resolution of the board of directors of AHMAI, certified as of
the date of this Agreement by its corporate secretary, authorizing
the execution, delivery and performance of this Agreement, the other
Loan Documents, each applicable Advance Request and all other
agreements, instruments or documents to be delivered by such
Borrower under this Agreement.
(8) A certificate as to the incumbency and authenticity of the
signatures of the officers of AHMAI executing this Agreement, the
other Loan Documents, each Applicable Advance Request and all other
agreements, instruments or documents to be delivered by AHMAI under
the Agreement (Credit Agent and Lenders being entitled to rely on
that certificate until a new incumbency certificate has been
furnished to Credit Agent).
(9) The Guaranty of AHMIC, on the form prescribed by Credit Agent,
duly executed by AHMIC.
(10) AHMIC 's articles or certificate of incorporation, together
with all amendments, as certified by the Secretary of State of
Maryland, bylaws, together with all amendments, certified by the
corporate secretary of AHMIC and certificates of good standing dated
within 60 days prior to the date of this Agreement.
(11) A resolution of the board of directors of AHMIC, certified as
of the date of this Agreement by its corporate secretary,
authorizing the execution, delivery and performance of the Guaranty,
and all other agreements, instruments or documents to be delivered
by AHMIC under this Agreement.
(12) A certificate as to the incumbency and authenticity of the
signatures of the officers of AHMIC executing the Guaranty and all
other agreements, instruments or documents to be delivered by AHMIC
under this Agreement (Credit Agent and Lenders being entitled to
rely on that certificate until a new incumbency certificate has been
furnished to Credit Agent).
(13) Assumed Name Certificates dated within 30 days of the date of
this Agreement for any assumed name used by any Borrower in the
conduct of its business.
(14) A favorable written opinion of counsel to Borrowers and
Guarantors, addressed to Lenders and dated as of the date of this
Agreement, covering such matters as Credit Agent may reasonably
request.
(15) Uniform Commercial Code, tax lien and judgment searches of the
appropriate public records for each Borrower that do not disclose
the existence of any prior Lien on the Collateral other than in
favor of Credit Agent or as permitted under this Agreement.
(16) Copies of the certificates, documents or other written
instruments that evidence each Borrower's eligibility described in
Section 9.1, all in form and substance satisfactory to Credit Agent.
(17) Copies of each Borrower's errors and omissions insurance policy
or mortgage impairment insurance policy, and blanket bond coverage
policy, or certificates in lieu of policies, showing compliance by
each Borrower as of the date of this Agreement with the related
provisions of Section 7.9.
(18) Receipt by Credit Agent of any fees due on the date of this
Agreement.
5.1 (b) If any Borrower is indebted to any of its directors, officers,
shareholders or Affiliates, as of the date of this Agreement, which
indebtedness has a term of more than 1 year or is in excess of $100,000,
the Person to whom such Borrower is indebted must have executed a
Subordination of Debt Agreement, on the form prescribed by Credit Agent;
and Credit Agent must have received an executed copy of that
Subordination of Debt Agreement, certified by the corporate secretary of
such Borrowers to be true and complete and in full force and effect as
of the date of the initial Advance.
5.1 (c) Borrowers must not have incurred any material liabilities,
direct or contingent, other than in the ordinary course of its business,
since the Audited Statement Date.
5.2. Each Advance
Lenders' obligation to make the initial and each subsequent Advance is
subject to the satisfaction, in the sole discretion of Credit Agent, as
of the date of each Advance, of the following additional conditions
precedent:
5.2 (a) Borrowers must have delivered to Credit Agent, the applicable
Advance Request and Collateral Documents required by, and must have
satisfied the procedures set forth in, Article 2 and the Exhibits
described in that Article. All items delivered to Credit Agent must be
satisfactory to Credit Agent in form and content, and Credit Agent may
reject any item that does not satisfy the requirements of this Agreement
or the related Purchase Commitment.
5.2 (b) Credit Agent must have received evidence satisfactory to it
confirming the making and/or continuation of any book entry or the due
filing and recording in all appropriate offices of all financing
statements and other instruments necessary to perfect the security
interest of Credit Agent in the Collateral under the Uniform Commercial
Code or other applicable law.
5.2 (c) The representations and warranties of Borrowers contained in
Article 6 and 9 and the representations and warranties of each Guarantor
under the Guaranty must be accurate and complete in all material
respects as if made on and as of the date of each Advance.
5.2 (d) Borrowers must have performed all agreements to be performed by
them under this Agreement and after giving effect to the requested
Advance no Default or Event of Default may exists under this Agreement.
5.2 (e) Each Guarantor must have performed all agreements to be
performed by each Guarantor under the Guaranty.
Delivery of an Advance Request by Borrowers will be deemed a
representation by Borrowers and Guarantors that all conditions set forth
in this Section have been satisfied as of the date of the Advance.
5.3. Force Majeure
Notwithstanding Borrowers' satisfaction of the conditions set forth in
this Agreement, Credit Agent and Lenders have no obligation to make an
Advance if Lenders or Credit Agent are unable to deliver such funds as a
result of any fire or other casualty, failure of power, strike, lockout
or other labor trouble, banking moratorium, embargo, sabotage,
confiscation, condemnation, riot, civil disturbance, insurrection, act
of terrorism, war or other activity of armed forces, act of God or other
similar reason beyond the control of Lenders and Credit Agent. Lenders
and Credit Agent will make the requested Advance as soon as reasonably
possible following the occurrence of such an event.
End of Article 0
GENERAL REPRESENTATIONS AND WARRANTIES
Borrowers represent and warrant to Credit Agent and Lenders as of the
date of this Agreement and as of the date of each Advance Request and
the making of each Advance, that:
6.1. Place of Business
Each Borrower's chief executive office and principal place of business
is: c/o American Home Mortgage Holdings, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
6.2. Organization; Good Standing; Subsidiaries
Each Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the State of Maryland (in the case of
CNI and AHMAI) and the State of New York (in the case of AHMC),
respectively, and has the full legal power and authority to own its
property and to carry on its business as currently conducted. Each
Borrower is duly qualified as a foreign corporation to do business and
is in good standing in each jurisdiction in which the transaction of its
business makes qualification necessary, except in jurisdictions, if any,
where a failure to be in good standing has no material adverse effect on
such Borrower's business, operations, assets or financial condition as a
whole. For the purposes of this Agreement, good standing includes
qualification for all licenses and payment of all taxes required in the
jurisdiction of its incorporation and in each jurisdiction in which a
Borrower transacts business. Borrowers have no Subsidiaries except as
set forth on Exhibit D, which sets forth with respect to each
Subsidiary, its name, address, jurisdiction of organization, each state
in which it is qualified to do business and the percentage ownership of
its capital stock by a Borrower. Each of Borrowers' Subsidiaries is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, and has the full legal power and
authority to own its property and to carry on its business as currently
conducted.
6.3. Authorization and Enforceability
Each Borrower has the power and authority to execute, deliver and
perform this Agreement, the Notes and other Loan Documents to which it
is party and to make the borrowings under this Agreement. The execution,
delivery and performance by each Borrower of this Agreement, the Notes
and the other Loan Documents to which it is party and the making of the
borrowings under this Agreement and the Notes, have been duly and
validly authorized by all necessary corporate action on the part of each
Borrower (none of which actions has been modified or rescinded, and all
of which actions are in full force and effect) and do not and will not
(a) conflict with or violate any provision of law, of any judgments
binding upon any Borrower, or of the articles of incorporation or
by-laws of any Borrower, or (b) conflict with or result in a breach of,
constitute a default or require any consent under, or result in or
require the acceleration of any indebtedness of any Borrower under any
agreement, instrument or indenture to which any Borrower is a party or
by which any Borrower or its property may be bound or affected, or
result in the creation of any Lien upon any property or assets of any
Borrower (other than the Lien on the Collateral granted under this
Agreement). This Agreement, the Notes and the other Loan Documents
constitute the legal, valid and binding obligations of each Borrower,
enforceable in accordance with their respective terms, except as limited
by bankruptcy, insolvency or other such laws affecting the enforcement
of creditors' rights.
6.4. Authorization and Enforceability of Guaranty
Each non-individual Guarantor has the power and authority, and each
individual Guarantor has the legal capacity to execute, deliver and
perform the Guaranty. The Guaranty constitutes the legal, valid, and
binding obligation of each Guarantor, enforceable in accordance with its
terms, except as limited by bankruptcy, insolvency or other such laws
affecting the enforcement of creditors' rights.
6.5. Approvals
The execution and delivery of this Agreement, the Notes and the other
Loan Documents and the performance of each Borrower's obligations under
this Agreement, the Notes and the other Loan Documents and the validity
and enforceability of this Agreement, the Notes and the other Loan
Documents do not require any license, consent, approval or other action
of any state or federal agency or governmental or regulatory authority
other than those that have been obtained and remain in full force and
effect.
6.6. Financial Condition
The balance sheet of Borrowers (and, if applicable, Borrowers'
Subsidiaries, on a consolidated basis) as of each Statement Date, and
the related statements of income, cash flows and changes in
stockholders' equity for the fiscal period ended on each Statement Date,
furnished to Credit Agent, fairly present the financial condition of
Borrowers (and, if applicable, Borrowers' Subsidiaries) as at that
Statement Date and the results of its operations for the fiscal period
ended on that Statement Date. Borrowers had, on each Statement Date, no
known material liabilities, direct or indirect, fixed or contingent,
matured or unmatured, or liabilities for taxes, long-term leases or
unusual forward or long-term commitments not disclosed by, or reserved
against in, those financial statements, and at the present time there
are no material unrealized or anticipated losses from any loans,
advances or other commitments of Borrowers except as previously
disclosed to Credit Agent in writing. Those financial statements were
prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved. Since the Audited Statement Date, there
has been no material adverse change in the business, operations, assets
or financial condition of Borrowers (and, if applicable, Borrowers'
Subsidiaries), nor is any Borrower aware of any state of facts that
(with or without notice or lapse of time or both) would or could result
in any such material adverse change.
6.7. Litigation
There are no actions, claims, suits or proceedings pending or, to
Borrower's knowledge, threatened or reasonably anticipated against or
affecting any Borrower or any Subsidiary of Borrowers in any court or
before any arbitrator or before any government commission, board, bureau
or other administrative agency that, if adversely determined, may
reasonably be expected to result in a material adverse change in any
Borrower's business, operations, assets or financial condition as a
whole, or that would affect the validity or enforceability of this
Agreement, the Notes or any other Loan Document.
6.8. Compliance with Laws
Neither any of the Borrowers nor any Subsidiary of any of the Borrowers
is in violation of any provision of any law, or of any judgment, award,
rule, regulation, order, decree, writ or injunction of any court or
public regulatory body or authority that could result in a material
adverse change
in any Borrower's business, operations, assets or financial condition as
a whole or that would affect the validity or enforceability of this
Agreement, the Notes or any other Loan Document.
6.9. Regulation U
None of the Borrowers is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock, and no part of the proceeds of any
Advance made under this Agreement will be used to purchase or carry any
Margin Stock or to extend credit to others for the purpose of purchasing
or carrying any Margin Stock.
6.10. Investment Company Act
None of the Borrowers is an "investment company" or controlled by an
"investment company" within the meaning of the Investment Company Act.
6.11. Payment of Taxes
Each Borrower, and each of its Subsidiaries, has filed or caused to be
filed all federal, state and local income, excise, property and other
tax returns that are required to be filed with respect to the operations
of such Borrower and its Subsidiaries, all such returns are true and
correct and Borrowers and each of its Subsidiaries has paid or caused to
be paid all taxes shown on those returns or on any assessment, to the
extent that those taxes have become due, including all FICA payments and
withholding taxes, if appropriate. The amounts reserved as a liability
for income and other taxes payable in the financial statements described
in Section 6.6 are sufficient for payment of all unpaid federal, state
and local income, excise, property and other taxes, whether or not
disputed, of each Borrower and its Subsidiaries accrued for or
applicable to the period and on the dates of those financial statements
and all years and periods prior to those financial statements and for
which such Borrower and its Subsidiaries may be liable in their own
right or as transferee of the assets of, or as successor to, any other
Person. No tax Liens have been filed and no material claims are being
asserted against any Borrower, any Subsidiary of any Borrower or any
property of any Borrower or any Subsidiary of any Borrower with respect
to any taxes, fees or charges.
6.12. Agreements
Neither any of the Borrowers nor any Subsidiary of any Borrower is a
party to any agreement, instrument or indenture or subject to any
restriction materially and adversely affecting its business, operations,
assets or financial condition, except as disclosed in the financial
statements described in Section 6.6. Neither any of the Borrowers nor
any Subsidiary of any Borrower is in default in the performance,
observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement, instrument, or indenture which
default could result in a material adverse change in any Borrower's
business, operations, properties or financial condition as a whole. No
holder of any indebtedness of any Borrower or of any of its Subsidiaries
has given notice of any asserted default under that indebtedness, and no
liquidation or dissolution of any Borrower or of any of its Subsidiaries
and no receivership, insolvency, bankruptcy, reorganization or other
similar proceedings relative to any Borrower or of any of its
Subsidiaries or any of its or their properties is pending, or to the
knowledge of any Borrower, threatened.
6.13. Title to Properties
Each Borrower, and each Subsidiary of such Borrower, has good, valid,
insurable and (in the case of real property) marketable title to all of
its properties and assets (whether real or personal, tangible or
intangible) reflected on the financial statements described in Section
6.6, except for those properties and assets that any Borrower has
disposed of since the date of those financial statements either in the
ordinary course of business or because they were no longer used or
useful in the conduct of such Borrower's or the Subsidiary's business.
All of each Borrower's properties and assets are free and clear of all
Liens except as disclosed in each Borrower's financial statements.
6.14. ERISA
Each Plan is in compliance with all applicable requirements of ERISA and
the Internal Revenue Code and with all material applicable rulings and
regulations issued under the provisions of ERISA and the Internal
Revenue Code setting forth those requirements, except where any failure
to comply would not result in a material loss to any Borrower or any
ERISA Affiliate. All of the minimum funding standards or other
contribution obligations applicable to each Plan have been satisfied. No
Plan is a defined-benefit pension plan subject to Title IV of ERISA, and
there is no Multiemployer Plan.
6.15. No Retiree Benefits
Except as required under Section 4980B of the Internal Revenue Code,
Section 601 of ERISA or applicable state law, neither any of the
Borrowers nor, if applicable, any Subsidiary of any Borrower is
obligated to provide post-retirement medical or insurance benefits with
respect to employees or former employees.
6.16. Assumed Names
None of the Borrowers originates Mortgage Loans or otherwise conducts
business under any names other than its legal name and the assumed names
set forth on Exhibit G. Each Borrower has made all filings and taken all
other action as may be required under the laws of any jurisdiction in
which it originates Mortgage Loans or otherwise conducts business under
any assumed name. No Borrower's use of the assumed names set forth on
Exhibit G conflicts with any other Person's legal rights to any such
name, or otherwise gives rise to any liability by any Borrower to any
other Person. Borrowers may amend Exhibit G to add or delete any assumed
names used by any Borrower to conduct business. An amendment to Exhibit
G to add an assumed name is not effective until a Borrower has delivered
to Credit Agent an assumed name certificate in the jurisdictions in
which the assumed name is to be used, which must be satisfactory in form
and content to Credit Agent, in its sole discretion. In connection with
any amendment to delete a name from Exhibit G, Each Borrower represents
and warrants that it has ceased using that assumed name in all
jurisdictions.
6.17. Servicing
Exhibit C is a true and complete list of each Borrower's Servicing
Portfolio. Each of Borrower's Servicing Contracts are in full force and
effect, and are unencumbered by Liens other than Liens disclosed in
Exhibit C. No default or event that, with notice or lapse of time or
both, would become a default, exists under any of any Borrower's
Servicing Contracts.
End of Article 0
AFFIRMATIVE COVENANTS
As long as the Commitments are outstanding or there remain any
Obligations to be paid or performed under this Agreement or under any
other Loan Document, each Borrower must:
7.1. Payment of Obligations
Punctually pay or cause to be paid all Obligations, including the
Obligations payable under this Agreement and under the Notes, in
accordance with their terms.
7.2. Financial Statements
Deliver to Credit Agent:
7.2 (a) As soon as available and in any event within 45 days after the
end of each month, including the last month of Borrowers' fiscal year,
an interim combined statement of income of Borrowers (and, if
applicable, Borrowers' Subsidiaries, on a consolidated basis) for the
immediately preceding month and for the period from the beginning of the
fiscal year to the end of that month, and the related balance sheet as
at the end of the immediately preceding month, all in reasonable detail,
subject, however, to year-end audit adjustments.
7.2 (b) As soon as available and in any event within 90 days after the
end of each fiscal year of Borrowers, fiscal year-end combined
statements of income, changes in stockholders' equity and cash flow of
Borrowers (and, if applicable, Borrowers' Subsidiaries, on a
consolidated basis) for that year, and the related balance sheet as of
the end of that year (setting forth in comparative form the
corresponding figures for the preceding fiscal year), all in reasonable
detail and accompanied by (1) an opinion as to those financial
statements in form and substance satisfactory to Credit Agent and
prepared by independent certified public accountants of recognized
standing acceptable to Credit Agent and (2) any management letters,
management reports or other supplementary comments or reports delivered
by those accountants to Borrowers or their boards of directors.
7.2 (c) Together with each delivery of financial statements required by
this Section, a Compliance Certificate substantially in the form of
Exhibit E.
7.2 (d) As soon as available and in any event within 90 days after the
end of each fiscal year of AHMIC, fiscal year-end consolidating
statements of income, changes in stockholders' equity and cash flows of
AHMIC (and, if applicable, AHMIC's Subsidiaries, on a consolidated
basis) for the most recent fiscal year, the related balance sheet as at
the end of that year (setting forth in comparative form the
corresponding figures for the preceding fiscal year), all in reasonable
detail and accompanied by (1) an opinion as to those financial
statements in form and substance satisfactory to Credit Agent and
prepared by independent certified public accountants of recognized
standing acceptable to Credit Agent and (2) any management letters,
management reports or other supplementary comments or reports delivered
by those accountants to AHMIC.
7.2 (e) Copies of all regular or periodic financial and other reports
that AHMIC files with the Securities and Exchange Commission or any
successor governmental agency or other entity.
7.3. Other Borrowers Reports
Deliver to Credit Agent:
7.3 (a) As soon as available and in any event within 45 days after the
end of each month, a consolidated report ("Servicing Portfolio Report")
as of the end of such month, as to all Mortgage Loans, the servicing
rights to which are owned by Borrowers (specified by investor type,
recourse and non-recourse) regardless of whether the Mortgage Loans are
Pledged Loans. The Servicing Portfolio Report must indicate which
Mortgage Loans (1) are current and in good standing, (2) are more than
30, 60 or 90 days past due, (3) are the subject of pending bankruptcy or
foreclosure proceedings, or (4) have been converted (through foreclosure
or other proceedings in lieu of foreclosure) into real estate owned by
Borrowers. The Servicing Portfolio Report must segregate the information
relating to the Pledged Mortgage Loans from other information.
7.3 (b) As soon as available and in any event within 45 days after the
end of each Calendar Quarter of Borrowers, or more frequently upon
Credit Agent's request, an Appraisal of the Eligible Servicing
Portfolio. If Borrowers fail to obtain an Appraisal required by this
Section within 45 days after the end of each Calendar Quarter, or within
30 days after Notice from Credit Agent, Credit Agent may obtain an
Appraisal and Borrowers must reimburse Credit Agent for its costs and
expenses incurred in connection with that Appraisal.
7.3 (c) As soon as available and in any event within 45 days after the
end of each month, a consolidated loan production report as of the end
of that month, presenting the total dollar volume and the number of
Mortgage Loans originated and closed or purchased during that month and
for the fiscal year-to-date, specified by property type and loan type
for Borrowers.
7.3 (d) As soon as available and in any event within 45 days after the
end of each month, a commitment summary and pipeline report,
substantially in the form of Exhibit J, as of the end of that month.
7.3 (e) Unless the Funding Bank has previously provided Credit Agent
with a copy of the Funding Bank's monthly statement for the Check
Disbursement Account, as soon as available and in any event within 30
days after the end of each month, a copy of that monthly statement.
7.3 (f) As soon as available and in any event within 45 days after the
end of each month, a report as of the end of that month detailing all
requests that Borrowers repurchase Mortgage Loans from an Investor or
out of an Eligible Mortgage Pool, the status of each such request and
any indemnification or similar agreement to which any Borrower is a
party in connection with any such request.
7.3 (g) Other reports in respect of Pledged Assets, including copies of
purchase confirmations issued by Investors purchasing Pledged Loans from
Borrowers, in such detail and at such times as Credit Agent in its
discretion may reasonably request.
7.3 (h) With reasonable promptness, all further information regarding
the business, operations, properties or financial condition of Borrowers
as Credit Agent, or any Lender, through the Credit Agent, may reasonably
request, including copies of any audits completed by HUD, ▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
7.4. Maintenance of Existence; Conduct of Business
Preserve and maintain its corporate existence in good standing and all
of its rights, privileges, licenses and franchises necessary or
desirable in the normal conduct of its business, including its
eligibility as lender, seller/servicer and issuer described under
Section 9.1; conduct its business in an orderly and efficient manner;
maintain a net worth of acceptable assets as required for maintaining
its eligibility as lender, seller/servicer and issuer described under
Section 9.1; and make no material change in the nature or character of
its business or engage in any business in which it was not engaged on
the date of this Agreement.
7.5. Compliance with Applicable Laws
Comply with the requirements of all applicable laws, rules, regulations
and orders of any governmental authority, a breach of which could result
in a material adverse change in its business, operations, assets, or
financial condition as a whole or on the enforceability of this
Agreement, the Notes, any other Loan Document or any Collateral, except
where contested in good faith and by appropriate proceedings.
7.6. Inspection of Properties and Books; Operational Reviews
7.6 (a) Permit Credit Agent, any Lender or any Participant (and their
authorized representatives) to discuss the business, operations, assets
and financial condition of each Borrower and its Subsidiaries with each
Borrower's officers, agents and employees, and to examine and make
copies or extracts of each Borrower's and its Subsidiaries' books of
account, all at such reasonable times and, as long as no Default or
Event of Default has occurred and is continuing, on such reasonable
Notice, as Credit Agent, any Lender or any Participant may request.
7.6 (b) Provide its accountants with a copy of this Agreement promptly
after its execution and authorize and instruct them to answer candidly
all questions that the officers of Credit Agent, any Lender or any
Participant or any authorized representatives of Credit Agent, any
Lender or any Participant may address to them in reference to the
financial condition or affairs of each Borrower and its Subsidiaries. As
long as no Default or Event of Default has occurred and is continuing,
Credit Agent or any Lender shall provide Borrowers with advance notice
of any such inquiry to Borrowers' accountants. Borrowers may have their
representatives in attendance at any meetings held between the officers
or other representatives of Credit Agent, any Lender or any Participant
and Borrowers' accountants under this authorization.
7.6 (c) Permit Credit Agent, any Lender or any Participant (and their
authorized representatives) access to each Borrower's premises and
records for the purpose of conducting a review of each Borrower's
general mortgage business methods, policies and procedures, auditing its
loan files, and reviewing the financial and operational aspects of each
Borrower's business.
7.7. Notice
Give prompt Notice to Credit Agent of (a) any action, suit or proceeding
instituted by or against Borrowers or any of their Subsidiaries in any
federal or state court or before any commission or other regulatory body
(federal, state or local, domestic or foreign), which action, suit or
proceeding has at issue in excess of $500,000, or any such proceedings
threatened against Borrowers or any of their Subsidiaries in writing
containing the details of that action, suit or proceeding; (b) the
filing, recording or assessment of any federal, state or local tax Lien
against Borrowers, or any of their assets or any of their Subsidiaries;
(c) an Event of Default; (d) a Default that continues for more than 4
days; (e) the suspension, revocation or termination of any Borrower's
eligibility, in any respect, as lenders, seller/servicer or issuer as
described under Section 9.1; (f) the transfer, loss, nonrenewal or
termination of any Servicing Contracts to which any Borrower is a party,
or which is held for the benefit of any Borrower, and the reason for
that transfer, loss, nonrenewal or termination if the aggregate
principal amount of Mortgage Loans
serviced pursuant to affected Servicing contracts exceeds 2.50% of the
Eligible Servicing Portfolio as of the date of the most recent
Appraisal; (g) any Prohibited Transaction with respect to any Plan,
specifying the nature of the Prohibited Transaction and what action
Borrowers propose to take with respect to it; and (h) any other action,
event or condition of any nature that could lead to or result in a
material adverse change in the business, operations, assets or financial
condition of Borrowers or any of their Subsidiaries.
7.8. Payment of Debt, Taxes and Other Obligations
Pay, perform and discharge, or cause to be paid, performed and
discharged, all of the obligations and indebtedness of each Borrower and
its Subsidiaries, all taxes, assessments and governmental charges or
levies imposed upon each Borrower or its Subsidiaries or upon their
respective income, receipts or properties before those taxes,
assessments and governmental charges or levies become past due, and all
lawful claims for labor, materials and supplies or otherwise that, if
unpaid, could become a Lien or charge upon any of their respective
properties or assets. Each Borrower and its Subsidiaries are not
required to pay, however, any taxes, assessments and governmental
charges or levies or claims for labor, materials or supplies for which
each Borrower or its Subsidiaries have obtained an adequate bond or
insurance or that are being contested in good faith and by proper
proceedings that are being reasonably and diligently pursued and for
which proper reserves have been created.
7.9. Insurance
Maintain blanket bond coverage and errors and omissions insurance or
mortgage impairment insurance, with such companies and in such amounts
as satisfy prevailing requirements applicable to a Lender,
seller/servicer and issuer described under Section 9.1, and liability
insurance and fire and other hazard insurance on its properties, in each
case with responsible insurance companies acceptable to Credit Agent, in
such amounts and against such risks as is customarily carried by similar
businesses operating in the same location. Within 30 days after Notice
from Credit Agent, obtain such additional insurance as Credit Agent may
reasonably require, all at the sole expense of Borrowers. Copies of such
policies must be furnished to Credit Agent without charge upon request
of Credit Agent.
7.10. Closing Instructions
Indemnify and hold Credit Agent and Lenders harmless from and against
any loss, including reasonable attorneys' fees and costs, attributable
to the failure of any title insurance company, agent or approved
attorney to comply with Borrowers' disbursement or instruction letter
relating to any Mortgage Loan. Credit Agent has the right to pre-approve
Borrowers' choice of title insurance company, agent or approved attorney
and Borrowers' disbursement or instruction letter to them in any case in
which Borrowers intend to obtain a Warehousing Advance against the
Mortgage Loan to be created at settlement or to pledge that Mortgage
Loan as Collateral under this Agreement. In any event, Borrowers'
disbursement or instruction letter must include the following language:
Residential Funding Corporation has a security interest in any
amounts advanced by it to fund this mortgage loan and in the
mortgage loan funded with those amounts. You must promptly return
any amounts advanced by Residential Funding Corporation and not used
to fund this mortgage loan. You also must immediately return all
amounts advanced by Residential Funding Corporation if this mortgage
loan does not close and fund within 1 Business Day of your receipt
of those funds.
7.11. Subordination of Certain Indebtedness
Cause any indebtedness of any Borrower to any shareholder, director,
officer or Affiliate of any Borrower, or to any Guarantor, which
indebtedness has a term of more than 1 year or is in excess of $100,000,
to be subordinated to the Obligations by the execution and delivery to
Credit Agent of a Subordination of Debt Agreement, on the form
prescribed by Credit Agent, certified by the corporate secretary of such
Borrower to be true and complete and in full force and effect.
7.12. Other Loan Obligations
Perform all material obligations under the terms of each loan agreement,
note, mortgage, security agreement or debt instrument by which any
Borrower is bound or to which any of its property is subject, and
promptly notify Credit Agent in writing of a declared default under or
the termination, cancellation, reduction or nonrenewal of any of its
other lines of credit or agreements with any other Lenders. Exhibit F is
a true and complete list of all such lines of credit or agreements as of
the date of this Agreement. Borrowers must give Credit Agent at least 30
days Notice before entering into any additional lines of credit or
agreements.
7.13. ERISA
Maintain (and, if applicable, cause each ERISA Affiliate to maintain)
each Plan in compliance with all material applicable requirements of
ERISA and of the Internal Revenue Code and with all applicable rulings
and regulations issued under the provisions of ERISA and of the Internal
Revenue Code, and not (and, if applicable, not permit any ERISA
Affiliate to), (a) engage in any transaction in connection with which
Borrowers or any ERISA Affiliate would be subject to either a civil
penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by
Section 4975 of the Internal Revenue Code, in either case in an amount
exceeding $25,000 or (b) fail to make full payment when due of all
amounts that, under the provisions of any Plan, Borrowers or any ERISA
Affiliate is required to pay as contributions to that Plan, or permit to
exist any accumulated funding deficiency (as such term is defined in
Section 302 of ERISA and Section 412 of the Internal Revenue Code),
whether or not waived, with respect to any Plan in an aggregate amount
exceeding $25,000.
7.14. Use of Proceeds of Warehousing Advances
Use the proceeds of each Warehousing Advance solely for the purpose of
(a) in the case of Warehousing Advances against Eligible Loans, funding
Eligible Loans and against the pledge of those Eligible Loans as
Collateral, and (b) in the case of Warehousing Advances against Other
Eligible Assets, financing the Other Eligible Assets, subject to the
limitations set forth on Exhibit H.
7.15. Use of Proceeds of Term Loan Advances
Use the proceeds of each Term Loan Advance solely for the purpose of
funding Servicing Acquisitions and financing general working capital
needs of Borrowers.
End of Article 0
NEGATIVE COVENANTS
As long as the Commitments are outstanding or there remain any
Obligations to be paid or performed, Borrowers must not, either directly
or indirectly, without the prior written consent of Credit Agent:
8.1. Contingent Liabilities
Assume, guarantee, endorse or otherwise become contingently liable for
the obligation of any Person except by endorsement of negotiable
instruments for deposit or collection in the ordinary course of
business, and except for obligations arising in connection with the sale
of Mortgage Loans without credit recourse (but subject to recourse for
breaches of normal representations, warranties and other provisions) in
the ordinary course of Borrowers' business.
8.2. Limitation on Liens
Pledge or grant a security interest in any Collateral, other than to
Credit Agent, or omit to take any action required to keep all
Collateral, including Borrowers' Servicing Contracts in full force and
effect.
8.3. Restrictions on Fundamental Changes
8.3 (a) Consolidate, merge or enter into any analogous reorganization or
transaction with any Person, unless such other Person is engaged in the
mortgage banking business and a Borrower is the surviving entity.
8.3 (b) Liquidate, wind up or dissolve (or suffer any liquidation or
dissolution).
8.3 (c) Cease actively to engage in the business of originating,
acquiring or servicing Mortgage Loans or make any other material change
in the nature or scope of the business in which each Borrower engages as
of the date of this Agreement.
8.3 (d) Sell, assign, lease, convey, transfer or otherwise dispose of
(whether in one transaction or a series of transactions) all or any
substantial part of each Borrower's business or assets, whether now
owned or acquired after the Closing Date, other than, in the ordinary
course of business and to the extent not otherwise prohibited by this
Agreement, sales of (1) Mortgage Loans, (2) Mortgage-backed Securities
and (3) Servicing Contracts.
8.3 (e) Acquire by purchase or in any other transaction all or
substantially all of the business or property of, or stock or other
ownership interests of, any Person, unless such Person is engaged in the
mortgage banking business and, after giving effect to such acquisition
or purchase, no Default or Event of Default will have occurred and be
continuing.
8.3 (f) Change its name or jurisdiction of incorporation, without the
prior written consent of the Majority Lenders, which will not be
unreasonably withheld.
8.3 (g) Permit any Subsidiary of Borrowers to do or take any of the
foregoing actions.
8.4. Deferral of Subordinated Debt
(a) Pay any Subordinated Debt of Borrowers in advance of its stated
maturity, except for prepayments in an aggregate amount not to exceed
$75,000; or (b) after a Default or Event of Default under this Agreement
has occurred, make any payment of any kind on any Subordinated Debt of
Borrowers until all of the Obligations have been paid and performed in
full and any applicable preference period has expired.
8.5. Investments
Make or own, or permit any Subsidiary to make or own, any Investment,
except Investments in (a) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of
acquisition thereof, (b) marketable direct obligations issued by any
state of the United States of America or any political subdivision of
any such state or any public instrumentality thereof maturing within 1
year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from either Standard &
Poor's Rating Group, a Division of McGraw Hill, Inc., or ▇▇▇▇▇'▇
Investors Service, Inc., (c) commercial paper maturing no more than one
year from the date of creation thereof and, at the time of acquisition,
having the highest rating obtainable from either Standard & Poor's
Rating Group, a Division of McGraw, Hill, Inc., or ▇▇▇▇▇'▇ Investors
Service, Inc., (d) Mortgage Loans and Mortgage-backed Securities
originated or acquired in the ordinary course of business, (e)
certificates of deposits or bankers acceptances issued by any Lender or
any other commercial bank organized under the laws of the United States
or any State thereof and having a combined capital and surplus of at
least $500,000,000, or by United States offices of foreign banks having
the highest rating obtainable from a nationally recognized rating
agency, or by any commercial bank or savings association to the extent
the full amount thereof is insured by the Federal Deposit Insurance
Corporation, in each case maturing within one year from the date of
acquisition thereof; (f) investments in mutual funds that invest
substantially all of their assets in investments of the types described
in subsections (a), (b), (c) and (e) of this Section 8.5, (g)
Investments made pursuant to Hedging Arrangements, (h) Investments in
businesses related to mortgage banking not otherwise permitted by this
Section 8.5 in an aggregate amount not to exceed $1,500,000, and (i)
Investments existing as of the Closing Date in the capital stock of
Subsidiaries, as described on Exhibit D hereto.
8.6. Loss of Eligibility
Take any action that would cause any Borrower to lose all or any part of
its status as an eligible lender, seller/servicer or issuer as described
under Section 9.1.
8.7. Accounting Changes
Make, or permit any Subsidiary of any Borrower to make, any significant
change in accounting treatment or reporting practices, except as
required by GAAP, or change its fiscal year or the fiscal year of any
Subsidiary of any Borrower.
8.8. Leverage Ratio
Permit Borrowers' Leverage Ratio, on a combined basis, at any time to
exceed 13 to 1.
8.9. Minimum Tangible Net Worth
Permit Borrowers' Tangible Net Worth, on a combined basis, at any time
to be less than $125,000,000.
8.10. Minimum Book Net Worth
Permit Borrowers' Book Net Worth, on a combined basis, at any time to be
less than $160,000,000.
8.11. Liquid Assets
Permit Borrowers' Liquid Assets, on a combined basis, at any time to be
less than $6,000,000.
8.12. Maximum Servicing Delinquencies
Permit Borrowers' Servicing Delinquencies, on a combined basis, at any
time to be greater than 6% of the Eligible Servicing Portfolio; for
purposes of such calculation, Bond Program Mortgage Loans shall be
excluded.
8.13. Maximum Servicing Foreclosures
Permit Borrowers' Servicing Foreclosures, on a combined basis, at any
time to be greater than 2% of the Eligible Servicing Portfolio; for
purposes of such calculation, Bond Program Mortgage Loans shall be
excluded.
8.14. Distributions to Shareholders
Declare or pay any dividends or otherwise declare or make any
distribution to Borrowers' shareholders (including any purchase or
redemption of stock) if a Default or Event of Default exists or would
occur as a result of the dividend
8.15. Transactions with Affiliates
Directly or indirectly (a) make any loan, advance, extension of credit
or capital contribution to any of Borrowers' Affiliates, other than to
either Guarantor or between each Borrower; (b) sell, transfer, pledge or
assign any of its assets to or on behalf of those Affiliates, other than
to either Guarantor or between each Borrower; (c) merge or consolidate
with or purchase or acquire assets from those Affiliates, other than
with either Guarantor or between each Borrower, or (d) pay management
fees to or on behalf of those Affiliates.
8.16. Recourse Servicing Contracts
Acquire or enter into Servicing Contracts under which any Borrower must
repurchase or indemnify the holder of the Mortgage Loans as a result of
defaults on the Mortgage Loans at any time during the term of those
Mortgage Loans (but subject to recourse for breaches of normal
representations, warranties and other provisions).
End of Article 0
SPECIAL REPRESENTATIONS, WARRANTIES AND COVENANTS CONCERNING COLLATERAL
9.1. Special Representations and Warranties Concerning Eligibility as
Seller/Servicer of Mortgage Loans
Borrowers represent and warrant to Credit Agent and Lenders, as of the
date of this Agreement and as of the date of each Advance Request and
the making of each Advance, that each Borrower is approved and qualified
and in good standing as a lender, seller/servicer or issuer, as set
forth below, and meets all requirements applicable to its status as:
9.1 (a) A HUD-approved mortgagee, eligible to originate, purchase, hold,
sell and service FHA fully insured Mortgage Loans.
9.1 (b) A ▇▇▇▇▇▇ ▇▇▇-approved seller/servicer of Mortgage Loans and
issuer of Mortgage-backed Securities guaranteed by ▇▇▇▇▇▇ Mae.
9.1 (c) A ▇▇▇▇▇▇ ▇▇▇-approved seller/servicer of Mortgage Loans,
eligible to originate, purchase, hold, sell and service Mortgage Loans
to be sold to ▇▇▇▇▇▇ Mae.
9.1 (d) A ▇▇▇▇▇▇▇ Mac-approved seller/servicer of Mortgage Loans,
eligible to originate, purchase, hold, sell and service Mortgage Loans
to be sold to ▇▇▇▇▇▇▇ Mac.
9.1 (e) A VA-approved mortgagee and a lender in good-standing under the
VA loan guarantee program, eligible to originate, purchase, hold, sell
and service VA-guaranteed Mortgage Loans.
9.1 (f) An approved seller/servicer of Mortgage Loans by RFC, eligible
to originate, purchase, hold, sell and service Mortgage Loans to be sold
to RFC.
9.2. Special Representations and Warranties Concerning Warehousing Collateral
Borrowers represent and warrant to Credit Agent and Lenders, as of the
date of this Agreement and as of the date of each Warehousing Advance
Request and the making of each Warehousing Advance or Swingline Advance,
that:
9.2 (a) Borrowers have not selected the Collateral in a manner so as to
affect adversely Lenders' interests.
9.2 (b) A Borrower is the legal and equitable owner and holder, free and
clear of all Liens (other than Liens granted under this Agreement), of
the Pledged Loans and the Pledged Securities. All Pledged Loans, Pledged
Securities and related Purchase Commitments have been duly authorized
and validly issued to a Borrower, and all of the foregoing items of
Collateral comply with all of the requirements of this Agreement, and
have been and will continue to be validly pledged or assigned to Credit
Agent, for the benefit of Lenders, subject to no other Liens.
9.2 (c) A Borrower has, and will continue to have, the full right, power
and authority to pledge the Collateral pledged and to be pledged by it
under this Agreement.
9.2 (d) Each Mortgage Loan and each related document included in the
Pledged Loans (1) has been duly executed and delivered by the parties to
that Mortgage Loan and that related document, (2) has been made in
compliance with all applicable laws, rules and regulations (including
all laws, rules and regulations relating to usury), (3) is and will
continue to be a legal, valid and binding obligation, enforceable in
accordance with its terms, without setoff, counterclaim or defense in
favor of the mortgagor under the Mortgage Loan or any other obligor on
the Mortgage Note and (4) has not been modified, amended or any
requirements of which waived, except in writing that is part of the
Collateral Documents.
9.2 (e) Each Pledged Loan is secured by a Mortgage on real property and
improvements located in one of the states of the United States or the
District of Columbia.
9.2 (f) Each Pledged Loan (other than a Third Party Originated Loan, a
Construction/Perm Mortgage Loan, an Early Buyout Mortgage Loan or a
Mortgage Loan that constitutes a modification of a Mortgage Loan with a
final balloon payment or an adjustable interest rate) has been closed or
will be closed and funded with the Advance made against it.
9.2 (g) Except for open-ended Second Mortgage Loans, each Mortgage Loan
has been fully advanced in the face amount of its Mortgage Note.
9.2 (h) Each First Mortgage Loan is secured by a First Mortgage on the
real property and improvements described in or covered by that Mortgage.
9.2 (i) Each First Mortgage Loan has or will have a title insurance
policy, in ALTA form or equivalent, from a recognized title insurance
company, insuring the priority of the Lien of the Mortgage and meeting
the usual requirements of Investors purchasing those Mortgage Loans.
9.2 (j) Each Second Mortgage Loan is secured by a Second Mortgage on the
real property and improvements described in or covered by that Mortgage.
9.2 (k) To the extent required by the related Purchase Commitment or by
Investors generally for similar Mortgage Loans, each Second Mortgage
Loan has or will have a title insurance policy, in ALTA form or
equivalent, from a recognized title insurance company, insuring the
priority of the Lien of the Mortgage and meeting the usual requirements
of Investors purchasing those Mortgage Loans.
9.2 (l) Each Mortgage Loan has been evaluated or appraised in accordance
with Title XI of FIRREA.
9.2 (m) The Mortgage Note for each Pledged Loan is (1) payable or
endorsed to the order of Borrowers, (2) an "instrument" within the
meaning of Article 9 of the Uniform Commercial Code of all applicable
jurisdictions and (3) is denominated and payable in United States
dollars.
9.2 (n) No default has existed for 30 days or more under any Mortgage
Loan included in the Pledged Loans other than an Impaired Mortgage Loan
or an Early Buyout Loan.
9.2 (o) No party to a Mortgage Loan or any related document is in
violation of any applicable law, rule or regulation that would impair
the collectibility of the Mortgage Loan or the performance by the
mortgagor or any other obligor of its obligations under the Mortgage
Note or any related document.
9.2 (p) All fire and casualty policies covering the real property and
improvements encumbered by each Mortgage included in the Pledged Loans
(1) name and will continue to name Borrowers and its successors and
assigns as the insured under a standard mortgagee clause, (2) are and
will continue to be in full force and effect and (3) afford and will
continue to afford insurance against fire and such other risks as are
usually insured against in the broad form of extended coverage insurance
generally available.
9.2 (q) Pledged Loans secured by real property and improvements located
in a special flood hazard area designated as such by the Director of the
Federal Emergency Management Agency are and will continue to be covered
by special flood insurance under the National Flood Insurance Program.
9.2 (r) Each Pledged Loan against which a Warehousing Advance is made on
the basis of a Purchase Commitment meets all of the requirements of that
Purchase Commitment, and each Pledged Security against which a
Warehousing Advance is outstanding meets all of the requirements of the
related Purchase Commitment.
9.2 (s) Pledged Loans that are intended to be exchanged for Agency
Securities comply or, prior to the issuance of the Agency Securities
will comply, with the requirements of any governmental instrumentality,
department or agency issuing or guaranteeing the Agency Securities.
9.2 (t) Pledged Loans that are intended to be used in the formation of
Mortgage-backed Securities (other than Agency Securities) comply with
the requirements of the issuer of the Mortgage-backed Securities (or its
sponsor) and of the Rating Agencies.
9.2 (u) The original assignments of Mortgage delivered to Credit Agent
for each Pledged Loan are in recordable form and comply with all
applicable laws and regulations governing the filing and recording of
such documents.
9.2 (v) None of the mortgagors, guarantors or other obligors of any
Pledged Loan is a Person named in any Restriction List and to whom the
provision of financial services is prohibited or otherwise restricted by
applicable law.
9.2 (w) No Pledged Loan delivered to Credit Agent is a Discontinued
Loan.
9.2 (x) Each Pledged Loan secured by real property to which a
Manufactured Home is affixed will create a valid Lien on that
Manufactured Home that will have priority over any other Lien on the
Manufactured Home, whether or not arising under applicable real property
law.
9.2 (y) Each Pledged Loan is an Eligible Loan as described on Exhibit H.
9.3. Special Representations Concerning REO Properties Included as Other
Eligible Assets
Borrowers represent and warrant to Lenders, as of the date of this
Agreement and as of the date of each Warehousing Advance Request for a
Warehousing Advance made against an Other Eligible Asset that is an REO
Property and the making of each Warehousing Advance or Swingline
Advance, that:
9.3 (a)2 Borrower is the legal and equitable owner and holder, free and
clear of all Liens, and such REO Property is an Other Eligible Asset as
described on Exhibit H.
9.3 (b) Each REO Property against which a Warehousing Advance is made
(1) is free from any environmental, lien, title, compliance, regulatory
or survey defect or liability, or seizure or condemnation proceeding,
and (2) is current with respect to all tax and insurance payments
relating to such property.
9.4. Special Representations and Warranties Concerning Servicing Collateral
Exhibit C is a true and complete list of each Borrower's Servicing
Portfolio as of the date of this Agreement. Borrowers hereby represent
and warrant to Credit Agent, as of the date of this Agreement and as of
the date of each Term Loan Advance Request and the making of each Term
Loan Advance or Swingline Advance, that:
9.4 (a) Borrowers are the legal and equitable owners and holders, free
and clear of all Liens (other than Liens in favor of Credit Agent), of
the Servicing Contracts included in the Servicing Portfolio, and the
Servicing Contracts pledged under this Agreement have been and will
continue to be validly pledged or assigned to Credit Agent, subject to
no other Liens.
9.4 (b) Borrowers have, and will continue to have, the full right, power
and authority to pledge the Servicing Contracts pledged and to be
pledged by it under this Agreement.
9.4 (c) Except as otherwise disclosed to Credit Agent, all of the
servicing rights under the Servicing Contracts included in the Servicing
Portfolio constitute direct servicing rights.
9.4 (d) Each Servicing Contract included in the Servicing Portfolio is
in full force and effect and is legal, valid and enforceable in
accordance with its terms, and no default or event that, with notice or
lapse of time or both, would become a default, exists under any
Servicing Contract.
9.4 (e) Each right to the payment of money under the Servicing Contracts
included in the Servicing Portfolio is genuine and enforceable in
accordance with its terms against the parties obligated to pay the same,
which terms have not been modified or waived in any respect or to any
extent.
9.4 (f) The amount represented by Borrowers to Credit Agent as owing by
an obligor under each Mortgage Loan being serviced under a Servicing
Contract included in the Servicing Portfolio is the correct amount
actually owing by that obligor.
9.4 (g) To the best of Borrowers' knowledge, no obligor has any defense,
set off, claim or counterclaim against Borrowers that can be asserted
against Credit Agent, whether in any proceeding to enforce Credit
Agent's rights in the related Mortgage Loan or otherwise.
9.4 (h) Borrowers have not sold, assigned or otherwise transferred any
rights associated with the Mortgage Loans being serviced under the
Servicing Contracts included in the Servicing Portfolio.
9.4 (i) No consent of any obligor or any other Person is required for
the grant of the security interest provided in this Agreement by
Borrowers in any of the Collateral or any computer software being
utilized by Borrowers pursuant to license, lease or otherwise, other
than consents that have been obtained, nor will any consent need to be
obtained upon the occurrence of an Event of Default for Credit Agent to
exercise its rights with respect to any of the Collateral.
9.5 Special Representations and Warranties Concerning P&I Advance
Receivables--Pooled Loans and P&I Advance Receivables--EBO Loans
9.5 (a) In the event the obligor on any Mortgage Loan which is part of a
pool of Mortgage Loans securing a Mortgage-backed Security fails to make
the payment of principal and interest as to which said receivable
relates, Borrowers are entitled to reimbursement therefore on a priority
basis pursuant to the terms of the applicable Servicing Contract out of
proceeds of the sale or other disposition or liquidation of said
Mortgage Loan or out of insurance proceeds, including,
without limitation, private mortgage insurance proceeds and the proceeds
of any guaranty of the obligations of the obligor thereunder.
9.5 (b) Said receivable is and will be free and clear of all Liens,
claims and encumbrances, except Liens in favor of Credit Agent for
benefit of Lenders.
9.5 (c) Said receivable is an Other Eligible Asset as described on
Exhibit H.
9.6. Special Representations and Warranties Concerning
T&I Advance Receivables
9.6 (a) In the event the obligor on any Mortgage Loan fails to make the
payment of property tax and property insurance impound payment as to
which said receivable relates, Borrowers are entitled to reimbursement
therefor on a priority basis pursuant to the terms of the applicable
Servicing Contract out of proceeds of the sale or other disposition or
liquidation of said Mortgage Loan out of insurance proceeds, including
without limitation, private mortgage insurance proceeds and the proceeds
of any guaranty of the obligations of the obligor thereunder.
9.6 (b) Said receivable is and will be free and clear of all Liens,
claims and encumbrances, except Liens in favor of Credit Agent for
benefit of Lenders.
9.6 (c) Said receivable is an Other Eligible Asset as described on
Exhibit H.
9.7. Special Representations and Warranties Concerning
Foreclosure Advance Receivables
9.7 (a) The Mortgage Loan with respect to which such advance was made by
Borrowers is in foreclosure, or there shall have been commenced and be
continuing bankruptcy or similar proceedings involving the obligor on
such Mortgage Loan, or Borrowers have commenced loss mitigation action
with respect to such Mortgage Loans.
9.7 (b) In the event the obligor on such Mortgage Loan fails to make the
payment as to which said receivable relates, Borrowers are entitled to
reimbursement therefor on a priority basis pursuant to the terms of the
applicable Servicing Contract out of proceeds of the sale or other
disposition or liquidation of said Mortgage Loan or out of insurance
proceeds, including, without limitation, private mortgage insurance
proceeds and the proceeds of any guaranty of the obligations of the
obligor thereunder.
9.7 (c) Said receivable is and will be free and clear of all Liens,
claims and encumbrances, except Liens in favor of Credit Agent for
benefit of Lenders.
9.7 (d) Said receivable is an Other Eligible Asset as described on
Exhibit H.
9.8. Special Affirmative Covenants Concerning Warehousing Collateral
As long as the Commitments are outstanding or there remain any
Obligations to be paid or performed under this Agreement or under any
other Loan Document, Borrowers must:
9.8 (a) Warrant and defend the right, title and interest of Credit Agent
and Lenders in and to the Collateral against the claims and demands of
all Persons.
9.8 (b) Service or cause to be serviced all Pledged Loans in accordance
with the standard requirements of the issuers of Purchase Commitments
covering them and all applicable HUD, ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac
requirements, including taking all actions necessary to enforce the
obligations of the obligors under such Mortgage Loans. Service or cause
to be serviced all Mortgage Loans backing Pledged Securities in
accordance with applicable governmental requirements and requirements of
issuers of Purchase Commitments covering them. Hold all escrow funds
collected in respect of Pledged Loans and Mortgage Loans backing Pledged
Securities in trust, without commingling the same with non-custodial
funds, and apply them for the purposes for which those funds were
collected.
9.8 (c) Execute and deliver to Credit Agent with respect to the
Collateral those further instruments of sale, pledge, assignment or
transfer, and those powers of attorney, as required by Credit Agent, and
do and perform all matters and things necessary or desirable to be done
or observed, for the purpose of effectively creating, maintaining and
preserving the security and benefits intended to be afforded Credit
Agent under this Agreement.
9.8 (d) Notify Credit Agent within 2 Business Days of any default under,
or of the termination of, any Purchase Commitment relating to any
Pledged Loan, Eligible Mortgage Pool, or Pledged Security.
9.8 (e) Promptly comply in all respects with the terms and conditions of
all Purchase Commitments, and all extensions, renewals and modifications
or substitutions of or to all Purchase Commitments. Deliver or cause to
be delivered to the Investor the Pledged Loans and Pledged Securities to
be sold under each Purchase Commitment not later than the mandatory
delivery date of the Pledged Loans or Pledged Securities under the
Purchase Commitment.
9.8 (f) Compare the names of every mortgagor, guarantor and other
obligor of every Mortgage Loan, together with appropriate identifying
information concerning those Persons obtained by Borrowers, against
every Restriction List, and make certain that none of the mortgagors,
guarantors or other obligors of any Mortgage Loan is a Person named in
any Restriction List and to whom the provision of financial services is
prohibited or otherwise restricted by applicable law.
9.8 (g) Prior to the origination by AHMAI of any Mortgage Loans for sale
to ▇▇▇▇▇▇ ▇▇▇, enter into an agreement among AHMAI, Credit Agent and
▇▇▇▇▇▇ Mae, pursuant to which ▇▇▇▇▇▇ ▇▇▇ agrees to send all cash
proceeds of Mortgage Loans sold by each Borrower to ▇▇▇▇▇▇ Mae to the
Cash Collateral Account.
9.8 (h) Prior to the origination by Borrowers of any Mortgage Loan to be
registered on the MERS system, obtain the approval of Credit Agent and
enter into an Electronic Tracking Agreement.
9.9 Special Affirmative Covenants Concerning REO Properties
As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed under this Agreement , Borrowers
must instruct the purchaser of any REO Property and the closing agent
for any REO Property sale against which a Warehousing Advance has been
made to wire transfer the purchase proceeds for the REO Property to the
Cash Collateral Account.
9.10. Special Negative Covenants Concerning Warehousing Collateral
As long as the Commitments are outstanding or there remain any
Obligations to be paid or performed, Borrowers must not, either directly
or indirectly, without the prior written consent of Credit Agent:
9.10 (a) Amend or modify, or waive any of the terms and conditions of,
or settle or compromise any claim in respect of, any Pledged Loans or
Pledged Securities.
9.10 (b) Sell, transfer or assign, or grant any option with respect to,
or pledge (except under this Agreement and, with respect to each Pledged
Loan or Pledged Security, the related Purchase Commitment) any of the
Collateral or any interest in any of the Collateral.
9.10 (c) Make any compromise, adjustment or settlement in respect of any
of the Collateral or accept other than cash in payment or liquidation of
the Collateral.
End of Article 0
DEFAULTS; REMEDIES
10.1. Events of Default
The occurrence of any of the following is an event of default ("Event of
Default"):
10.1 (a) Borrower fails to pay the principal of any Advance when due,
whether at stated maturity, by acceleration, or otherwise; or fails to
pay any installment of interest on any Advance within 9 days after the
date of Credit Agent's invoice or, if applicable, within 2 days after
the date of Credit Agent's account analysis statement; or fails to pay,
within any applicable grace period, any other amount due under this
Agreement or any other Obligation of Borrowers to Credit Agent or any
Lender.
10.1 (b) Borrowers or any of their Subsidiaries fail to pay, or default
in the payment of any principal or interest on, any other indebtedness
or any contingent obligation within any applicable grace period; breach
or default with respect to any other material term of any other
indebtedness or of any loan agreement, mortgage, indenture or other
agreement relating to that indebtedness, if the effect of that breach or
default is to cause, or to permit the holder or holders of that
indebtedness (or a trustee on behalf of such holder or holders) to
cause, indebtedness of Borrowers or their Subsidiaries in the aggregate
amount of $50,000 or more to become or be declared due before its stated
maturity (upon the giving or receiving of notice, lapse of time, both,
or otherwise).
10.1 (c) Borrowers fail to perform or comply with any term or condition
applicable to it contained in Sections 7.4, 7.14 or 7.15 or in any
Section of Article 8.
10.1 (d) Any representation or warranty made or deemed made by Borrowers
or Guarantors under this Agreement, in any other Loan Document or in any
written statement or certificate at any time given by Borrowers or
Guarantors, other than the representations and warranties set forth in
Article 9 with respect to specific Pledged Loans, is inaccurate or
incomplete in any material respect on the date as of which it is made or
deemed made.
10.1 (e) Borrowers default in the performance of or compliance with any
term contained in this Agreement or any other Loan Document other than
those referred to in Sections 10.1(a), 10.1(c) or 10.1(d) and such
default has not been remedied or waived within 30 days after the
earliest of (1) receipt by Borrowers of Notice from Credit Agent of that
default, (2) receipt by Credit Agent of Notice from Borrowers of that
default or (3) the date Borrowers should have notified Credit Agent of
that default under Section 7.7(c) or 7.7(d).
10.1 (f) An "event of default" (however defined) occurs under any
agreement between any Borrower and Credit Agent other than this
Agreement and the other Loan Documents.
10.1 (g) A case (whether voluntary or involuntary) is filed by or
against Borrower, any Subsidiary of any Borrower or either Guarantor
under any applicable bankruptcy, insolvency or other similar federal or
state law; or a court of competent jurisdiction appoints a receiver
(interim or permanent), liquidator, sequestrator, trustee, custodian or
other officer having similar powers over any Borrower, any Subsidiary of
any Borrower or either Guarantor, or over all or a substantial part of
their respective properties or assets; or any Borrower, any Subsidiary
of any Borrower or either Guarantor (1) consents to the appointment of
or possession by a receiver (interim or permanent), liquidator,
sequestrator, trustee, custodian or other officer having similar powers
over any Borrower or any Subsidiary of any Borrower, or either
Guarantor, or over all or a substantial part
of their respective properties or assets, (2) makes an assignment for
the benefit of creditors, or (3) fails, or admits in writing its
inability, to pay its debts as those debts become due.
10.1 (h) Borrowers fail to perform any contractual obligation to
repurchase Mortgage Loans, if such obligations in the aggregate exceed
$1,000,000.
10.1 (i) Any money judgment, writ or warrant of attachment or similar
process involving an amount in excess of $500,000 is entered or filed
against any Borrower or any of its Subsidiaries or either Guarantor or
any of their respective assets and remains undischarged, unvacated,
unbonded or unstayed for a period of 30 days or 5 days before the date
of any proposed sale under that money judgment, writ or warrant of
attachment or similar process.
10.1 (j) Any order, judgment or decree decreeing the dissolution of any
Borrower or any non-individual Guarantor is entered and remains
undischarged or unstayed for a period of 20 days.
10.1 (k) Borrowers purport to disavow the Obligations or contest the
validity or enforceability of any Loan Document.
10.1 (l) Any Guarantor purports to disavow its obligations under its
Guaranty or contests the validity or enforceability of the Guaranty.
10.1 (m) Credit Agent's security interest on any portion of the
Collateral becomes unenforceable or otherwise impaired and, if Credit
Agent agrees in writing to the grace period, all Advances made against
any of that Collateral are not paid in full within 10 days after the
date the unenforceability or impairment begins.
10.1 (n) A material adverse change occurs in Borrowers' financial
condition, business, properties, operations or prospects, or in
Borrowers' ability to repay the Obligations.
10.1 (o) Any Lien for any taxes, assessments or other governmental
charges (1) is filed against any Borrower, either Guarantor or any of
its property, or is otherwise enforced against any Borrower, either
Guarantor or any of its property, or (2) obtains priority that is equal
to or greater than the priority of Credit Agent's security interest in
any of the Collateral.
10.1 (p) AHMIC ceases to own, directly or indirectly, all of the capital
stock of each Borrower.
10.1 (q) AHMIC's consolidated net income at any time is less than zero
for any period of 3 consecutive months.
10.1 (r) AHMIC's Leverage Ratio at any time exceeds 13 to 1.
10.1 (s) AHMIC's Tangible Net Worth, on a consolidated basis, at any
time is less than $285,000,000.
10.1 (t) AHMIC's Book Net Worth, on a consolidated basis, at any time is
less than $350,000,000.
10.2. Remedies
10.2 (a) If a Lender shall have knowledge of a Default or an Event of
Default, it shall forthwith give Notice thereof to the Credit Agent. If
the Credit Agent shall have knowledge of a Default or an Event of
Default, it shall give Notice thereof to each Lender and to Borrowers.
The Credit Agent shall not be deemed to have knowledge or Notice of the
occurrence of a Default or an Event of
Default unless the Credit Agent has received Notice from a Lender or
Borrowers. No Lender shall be deemed to have knowledge or Notice of the
occurrence of a Default or an Event of Default unless such Lender has
received Notice from the Credit Agent or Borrowers.
10.2 (b) If an Event of Default described in Section 10.1(g) occurs with
respect to any Borrower, the Commitments will automatically terminate
and the unpaid principal amount of and accrued interest on the Notes and
all other Obligations will automatically become due and payable, without
presentment, demand or other requirements of any kind, all of which
Borrowers expressly waive.
10.2 (c) If any Event of Default occurs, Majority Lenders may, by Notice
to Borrowers, terminate the Commitments and declare the Obligations to
be immediately due and payable.
10.2 (d) If any Event of Default occurs, Credit Agent, on behalf of the
Lenders, may, and at the direction of the Majority Lenders shall
(subject to Section 11.3(c)), also take any of the following actions:
(1) Foreclose upon or otherwise enforce its security interest in any
Lien on the Collateral to secure all payments and performance of the
Obligations in any manner permitted by law or provided for in the
Loan Documents.
(2) Notify all obligors under any of the Collateral that the
Collateral has been assigned to Credit Agent (or to another Person
designated by Credit Agent) and that all payments on that Collateral
are to be made directly to Credit Agent (or such other Person);
settle, compromise or release, in whole or in part, any amounts any
obligor or Investor owes on any of the Collateral on terms
acceptable to Credit Agent; enforce payment and prosecute any action
or proceeding involving any of the Collateral; and where any
Collateral is in default, foreclose on and enforce any Liens
securing that Collateral in any manner permitted by law and sell any
property acquired as a result of those enforcement actions.
(3) Prepare and submit for filing Uniform Commercial Code amendment
statements evidencing the assignment to Credit Agent or its designee
of any Uniform Commercial Code financing statement filed in
connection with any item of Collateral.
(4) Act or contract with a third party to act, at Borrowers'
expense, as servicer or subscriber of Collateral requiring
servicing, and perform all obligations required under any
Collateral, including Servicing Contracts and Purchase Commitments.
(5) Require Borrowers to assemble and make available to Credit Agent
the Collateral and all related books and records at a place
designated by Credit Agent.
(6) Enter onto property where any Collateral or related books and
records are located and take possession of those items with or
without judicial process; and obtain access to Borrowers' data
processing equipment, computer hardware and software relating to the
Collateral and use all of the foregoing and the information
contained in the foregoing in any manner Credit Agent deems
necessary for the purpose of effectuating its rights under this
Agreement and any other Loan Document.
(7) Before the disposition of the Collateral, prepare it for
disposition in any manner and to the extent Credit Agent deems
appropriate.
(8) Exercise all rights and remedies of a secured creditor under the
Uniform Commercial Code of Minnesota or other applicable law,
including selling or otherwise
disposing of all or any portion of the Collateral at one or more
public or private sales, whether or not the Collateral is present at
the place of sale, for cash or credit or future delivery, on terms
and conditions and in the manner as Credit Agent may determine,
including sale under any applicable Purchase Commitment. Borrowers
waive any right they may have to prior notice of the sale of all or
any portion of the Collateral to the extent allowed by applicable
law. If notice is required under applicable law, Credit Agent will
give Borrowers not less than 10 days' notice of any public sale or
of the date after which any private sale may be held. Borrowers
agree that 10 days' notice is reasonable notice. Credit Agent may,
without notice or publication, adjourn any public or private sale
one or more times by announcement at the time and place fixed for
the sale, and the sale may be held at any time or place announced at
the adjournment. In the case of a sale of all or any portion of the
Collateral on credit or for future delivery, the Collateral sold on
those terms may be retained by Credit Agent until the purchaser pays
the selling price or takes possession of the Collateral. Credit
Agent has no liability to Borrowers if a purchaser fails to pay for
or take possession of Collateral sold on those terms, and in the
case of any such failure, Credit Agent may sell the Collateral again
upon notice complying with this Section.
(9) Instead of or in conjunction with exercising the power of sale
authorized by Section 10.2(c) (8), Credit Agent may proceed by suit
at law or in equity to collect all amounts due on the Collateral, or
to foreclose Credit Agent's Lien on and sell all or any portion of
the Collateral pursuant to a judgment or decree of a court of
competent jurisdiction.
(10) Proceed against Borrowers on the Notes or against Guarantor
under the Guaranty.
(11) Retain all excess proceeds from the sale or other disposition
of the Collateral, and apply them to the payment of the Obligations
under Section 10.3.
Credit Agent shall follow the instructions of the Majority Lenders
in exercising or not exercising its rights under this Section 10.2,
but (i) the Credit Agent shall have no obligation to take or not to
take any action which it believes may expose it to any liability,
and (ii) the Credit Agent may, but shall be under no obligation to,
await instructions from the Majority Lenders before exercising or
not exercising its rights under this Section 10.2.
10.2 (e) Neither Credit Agent nor any Lender will incur liability as a
result of the commercially reasonable sale or other disposition of all
or any portion of the Collateral at any public or private sale or other
disposition. Borrowers waive (to the extent permitted by law) any claims
they may have against Credit Agent or any Lender arising by reason of
the fact that the price at which the Collateral may have been sold at a
private sale was less than the price that Credit Agent might have
obtained at a public sale, or was less than the aggregate amount of the
outstanding Advances, accrued and unpaid interest on those Advances, and
unpaid fees, even if Credit Agent accepts the first offer received and
does not offer the Collateral to more than one offeree. Borrowers agree
that any sale of Collateral under the terms of a Purchase Commitment, or
any other disposition of Collateral arranged by Borrowers, whether
before or after the occurrence of an Event of Default, will be deemed to
have been made in a commercially reasonable manner.
10.2 (f) Borrowers acknowledge that Mortgage Loans are collateral of a
type that is the subject of widely distributed standard price quotations
and that Mortgage-backed Securities are collateral of a type that is
customarily sold on a recognized market. Borrowers waive any right they
may have to prior notice of the sale of Pledged Securities, and agree
that Credit Agent or any Lender may purchase Pledged Loans and Pledged
Securities at a private sale of such Collateral.
10.2 (g) Borrowers specifically waive and release (to the extent
permitted by law) any equity or right of redemption, stay or appraisal
that Borrowers have or may have under any rule of law or statute now
existing or adopted after the date of this Agreement, and any right to
require Credit Agent or any Lender to (1) proceed against any Person,
(2) proceed against or exhaust any of the Collateral or pursue its
rights and remedies against the Collateral in any particular order, or
(3) pursue any other remedy within its power. Credit Agent and Lenders
are not required to take any action to preserve any rights of Borrowers
against holders of mortgages having priority to the Lien of any Mortgage
or Security Agreement included in the Collateral or to preserve
Borrowers' rights against other prior parties.
10.2 (h) Credit Agent may, but is not obligated to, advance any sums or
do any act or thing necessary to uphold or enforce the Lien and priority
of, or the security intended to be afforded by, any Mortgage or Security
Agreement included in the Collateral, including payment of delinquent
taxes or assessments and insurance premiums. All advances, charges,
costs and expenses, including reasonable attorneys' fees and
disbursements, incurred or paid by Credit Agent in exercising any right,
power or remedy conferred by this Agreement, or in the enforcement of
this Agreement, together with interest on those amounts at the Default
Rate, from the time paid by Credit Agent until repaid by Borrowers, are
deemed to be principal outstanding under this Agreement and the Notes.
10.2 (i) No failure or delay on the part of Credit Agent or any Lender
to exercise any right, power or remedy provided in this Agreement or
under any other Loan Document, at law or in equity, will operate as a
waiver of that right, power or remedy. No single or partial exercise by
Credit Agent or any Lender of any right, power or remedy provided under
this Agreement or any other Loan Document, at law or in equity,
precludes any other or further exercise of that right, power, or remedy
by Credit Agent or any Lender, or Credit Agent's or any Lender's
exercise of any other right, power or remedy. Without limiting the
foregoing, Borrowers waive all defenses based on the statute of
limitations to the extent permitted by law. The remedies provided in
this Agreement and the other Loan Documents are cumulative and are not
exclusive of any remedies provided at law or in equity.
10.2 (j) Borrowers grant Credit Agent and Lenders a license or other
right to use, without charge, Borrowers' computer programs, other
programs, labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks and advertising matter,
or any property of a similar nature, as it pertains to the Collateral,
in advertising for sale and selling any of the Collateral and Borrowers'
rights under all licenses and all other agreements related to the
foregoing inure to Credit Agent's and Lenders' benefit until the
Obligations are paid in full.
10.2 (k) Borrowers acknowledge that Borrowers and Credit Agent have
entered into, or after the date of this Agreement may enter into,
Acknowledgement Agreements with ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac, or another
Investor, and that those Acknowledgment Agreements may contain certain
provisions concerning the enforcement by Credit Agent of its security
interest in the Servicing Contracts subject to the Acknowledgement
Agreements. Borrowers agree that the disposition of its rights in any
Servicing Contract pursuant to the terms of an applicable Acknowledgment
Agreement will be deemed commercially reasonable within the meaning of
Article 9 of the Uniform Commercial Code of Minnesota. Borrowers waive
any clams it might otherwise have against Credit Agent as a result of
Credit Agent's compliance with the terms of any Acknowledgment
Agreement.
10.3. Application of Proceeds
The proceeds of any sale, disposition or other enforcement of Credit
Agent's security interest in all or any part of the Collateral shall be
applied by Credit Agent as follows:
10.3 (a) In the case of the proceeds of Other Eligible Assets (excluding
Servicing Contracts) and related collateral:
First, to the payment of the costs and expenses of such sale or
enforcement, including reasonable compensation to Credit Agent's
agents and counsel, and all expenses, liabilities and advances made
or incurred by or on behalf of Credit Agent in connection therewith;
Second, to the payment of the costs and expenses of such sale or
enforcement, including reasonable compensation to Lenders' agents
and counsel, and all expenses, liabilities and advances made or
incurred by or on behalf of any Lender in connection therewith;
Third, to Lenders holding Warehousing Advances against Other
Eligible Assets, pro rata in accordance with the amount of accrued
interest, or accrued Balance Deficiency Fees, owed to each of them
in respect to such Warehousing Advances, until such interest and
fees are paid in full;
Fourth, to Lenders holding Warehousing Advances against Other
Eligible Assets, pro rata in accordance with their respective
Percentage Shares, until the principal amounts of all such
Warehousing Advances outstanding are paid in full;
Fifth, to Lenders, for application to the Obligations owed to each
of them in respect of other Warehousing Advances and Term Loan
Advances, as set forth in clauses Fifth and Sixth of Section 11.3(b)
and clauses Third and Fourth of Section 11.3(c); and
Sixth, to the remaining Obligations; and
Finally, to the payment to Borrowers, or to their successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
10.3 (b) In the case of the proceeds of Eligible Loans and related
Collateral:
First, to the payment of the costs and expenses of such sale or
enforcement, including reasonable compensation to Credit Agent's
agents and counsel, and all expenses, liabilities and advances made
or incurred by or on behalf of Credit Agent in connection therewith;
Second, to the payment of the costs and expenses of such sale or
enforcement, including reasonable compensation to the Lenders'
agents and counsel, and all expenses, liabilities and advances made
or incurred by or on behalf of any Lender in connection therewith;
Third, to RFC, in an amount equal to the amount of accrued interest
or Balance Deficiency Fees owed to RFC in respect of Swingline
Advances, until paid in full;
Fourth, to RFC until the principal amount of all Swingline Advances
outstanding are paid in full;
Fifth, to Lenders holding Warehousing Advances against Eligible
Loans, pro rata in accordance with the amount of accrued interest,
or accrued Balance Deficiency Fees, owed to each of them in respect
to Warehousing Advances, until such interest and fees are paid in
full;
Sixth, to Lenders holding Warehousing Advances against Eligible
Loans, pro rata in accordance with their respective Percentage
Shares, until the principal amounts of all Warehousing Advances
outstanding are paid in full;
Seventh, to Lenders holding Warehousing Advances, pro rata in
accordance with their respective Percentage Shares, until all fees
and other Obligations accrued by or due each Lender and Credit Agent
are paid in full;
Eighth, to Lenders, for application to the Obligations owed to each
of them in respect of other Warehousing Advances and Term Loan
Advances, as set forth in clauses Third and Fourth of Section
10.3(a) and clauses Third and Fourth of Section 10.3(c); and
Ninth, to the remaining Obligations; and
Finally, to the payment to Borrowers, or to their successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
10.3 (c) In the case of the proceeds of the Servicing Contracts:
First, to the payment of the costs and expenses of such sale or
enforcement, including reasonable compensation to Credit Agent's
agents and counsel, and all expenses, liabilities and advances made
or incurred by or on behalf of Credit Agent in connection therewith;
Second, to the payment of the costs and expenses of such sale or
enforcement, including reasonable compensation to the Lenders'
agents and counsel, and all expenses, liabilities and advances made
or incurred by or on behalf of any Lender in connection therewith;
Third, to Lenders holding Term Loan Advances, pro rata in accordance
with the amount of accrued interest, or accrued Balance Deficiency
Fees, owed to each of them in respect of Term Loan Advances until
such interest and fees are paid in full;
Fourth, to Lenders holding Term Loan Advances, pro rata in
accordance with their respective Percentage Shares, until the
principal amount of all Term Loan Advances outstanding are paid in
full;
Fifth, to Lenders holding Term Loan Advances, pro rata in accordance
with their respective Percentage Shares, until all fees and other
Obligations accrued by or due each Lender and Credit Agent are paid
in full;
Sixth, to Lenders, for application to the Obligations owed to each
of them in respect of Warehousing Advances outstanding against Other
Eligible Assets, as set forth in clauses Third and Fourth of Section
8.3(a) hereof;
Seventh, to the Lenders, for application to the Obligations owed to
each of them in respect of Swingline Advances and Warehousing
Advances outstanding against Eligible Loans, as set forth in clauses
Third, Fourth, Fifth, Sixth and Seventh of Section 8.3(b) hereof;
and
Eighth, to the remaining Obligations; and
Finally, to the payment to Borrowers, or to their successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
10.3 (d) If the proceeds of any such sale, disposition or other
enforcement are insufficient to cover the costs and expenses of such
sale, as aforesaid, and the payment in full of all Obligations,
Borrowers shall remain liable for any deficiency.
10.4. Credit Agent Appointed Attorney-in-Fact
Each Borrower appoints Credit Agent its attorney-in-fact, with full
power of substitution, for the purpose of carrying out the provisions of
this Agreement, the Notes and the other Loan Documents and taking any
action and executing any instruments that Credit Agent deems necessary
or advisable to accomplish that purpose. Borrowers' appointment of
Credit Agent as attorney-in-fact is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing, Credit Agent
may give notice of its Lien on the Collateral to any Person, either in
Borrower's name or in its own name, endorse all Pledged Loans or Pledged
Securities payable to the order of any Borrower, change or cause to be
changed the book-entry registration or name of subscriber or Investor on
any Pledged Security, prepare and submit for filing Uniform Commercial
Code amendment statements with respect to any Uniform Commercial Code
financing statements filed in connection with any item of Collateral or
receive, endorse and collect all checks made payable to the order of any
Borrower representing payment on account of the principal of or interest
on, or the proceeds of sale of, any of the Pledged Loans or Pledged
Securities and give full discharge for those transactions.
10.5. Right of Set-Off
If Borrowers default in the payment of any Obligation or in the
performance of any of their duties under the Loan Documents, each Lender
may, without Notice to or demand on Borrowers (which Notice or demand
Borrowers expressly waive), set-off, appropriate or apply any property
of Borrowers held at any time by each Lender, or any indebtedness at any
time owed by each Lender to or for the account of Borrowers, against the
Obligations, whether or not those Obligations have matured.
10.6. Sharing of Payments
If upon the occurrence of an Event of Default and acceleration of the
Obligations, any Lender shall hold or receive and retain any payment,
whether by setoff, application of deposit balance or security, or
otherwise, in respect of the Obligations, then such Lender shall
purchase from the other Lenders for cash and at face value and without
recourse, such participation in the Obligations held by them as shall be
necessary to cause such payment to be shared ratably with each of them;
provided, that if such payment or part thereof is thereafter recovered
from such purchasing Lender, the related purchases from the other
Lenders shall be rescinded ratably and the purchase price restored as to
the portion of such excess payment so recovered, but without interest
thereon unless the purchasing Lender is required to pay interest on such
amounts to the Person recovering such payment, in which case with
interest thereon, computed at the same rate, and on the same basis, as
the interest that the purchasing Lender is required to pay. If any
Lender receives a payment from the Borrowers not in respect of the
Obligations, but relating to another relationship of such Lender and the
Borrowers, such Lender may apply the payment first to the indebtedness
arising out of the other relationship and then against the Obligations
as provided for above.
End of Article 10
AGENT
11.1. Appointment
Each Lender hereby irrevocably designates and appoints Credit Agent as
the agent of such Lender under the Loan Documents and each Lender hereby
irrevocably authorizes Credit Agent to take such action on its behalf
under the provisions of the Loan Documents and to exercise such powers
and perform such duties as are expressly delegated to Credit Agent by
the terms of the Loan Documents, together with such other powers as are
reasonably incidental thereto. Credit Agent hereby accepts such
appointment and agrees to act in accordance with this Agreement.
11.2. Duties of Agent
11.2 (a) The provisions of the Loan Documents set forth the exclusive
duties of Credit Agent and no implied duties or obligations shall be
read into the Loan Documents against Credit Agent. Credit Agent shall
not be bound in any way by any agreement or contract other than the Loan
Documents and any other agreement to which it is a party. Credit Agent
shall act as an independent contractor in performing its obligations as
Credit Agent under the Loan Documents and nothing herein contained shall
be deemed to create any fiduciary relationship among or between Credit
Agent, Borrowers or Lenders.
11.2 (b) Credit Agent shall examine the Pledged Loans delivered by or on
behalf of the Borrowers hereunder to determine whether the Pledged
Loans: (i) include the documents and instruments to be delivered for
each Pledged Loan required pursuant to Section 2.1 and the applicable
Exhibits, (ii) conforms with the requirements of this Agreement, and
(iii) is otherwise in conformity with any customary collateral review
criteria that Credit Agent may use from time to time. If Credit Agent
shall have determined that any Mortgage Loan delivered to Credit Agent
does not meet the requirements of this Agreement, Credit Agent may
return to the Borrowers all Collateral Documents relating thereto.
11.2 (c) As to any Pledged Loan against which Warehousing Advances may
be made, if Credit Agent shall note any minor discrepancies or
deficiencies in any Collateral Documents pertaining thereto, Credit
Agent shall: (a) immediately notify Borrowers thereof, (b) if such
discrepancies or deficiencies can be cured without returning any
Collateral Documents to the Borrowers, request that Borrowers cure such
discrepancies or deficiencies immediately, and (c) if such discrepancies
or deficiencies can only be cured by returning Collateral Documents to
the Borrowers, return any Collateral Documents containing any
discrepancy or deficiency to the Borrowers for correction against a
Trust Receipt pursuant to Section 4.6(a).
11.3. Standard of Care
Credit Agent shall act in accordance with customary standards for those
engaged as credit agents or collateral agents of commercial transactions
in similar capacities.
11.3 (a) Credit Agent shall not be required to ascertain or inquire as
to the performance or observance of any of the conditions or agreements
to be performed or observed by any other party, except as specifically
provided in the Loan Documents. Credit Agent disclaims any
responsibility for the validity or accuracy of the recitals to the Loan
Documents and any
representations and warranties contained herein, unless specifically
identified as recitals, representations or warranties of Credit Agent.
11.3 (b) Credit Agent shall not have any responsibility for ascertaining
the value, collectibility, insurability, enforceability, effectiveness
or suitability of any Collateral, the title of any party therein, the
validity or adequacy of the security afforded thereby, or the validity
of the Loan Documents (except as to its authority to enter into the Loan
Documents and to perform its obligations hereunder and thereunder).
11.3 (c) No provision of this Agreement shall require Credit Agent to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of
any of its rights or powers, if, in its sole judgment, it shall believe
that repayment of such funds or adequate indemnity against such risk or
liability is not assured to it.
11.3 (d) Credit Agent is not responsible for preparing or filing any
reports or returns relating to federal, state or local income taxes with
respect to this Agreement, other than for its compensation or for
reimbursement of expenses.
11.4. Delegation of Duties
Credit Agent may execute any of its duties under the Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice
of counsel concerning all matters pertaining to such duties. Credit
Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.
11.5. Exculpatory Provisions
Credit Agent or any of its respective officers, directors, employees,
agents, attorneys-in-fact or Affiliates shall not be (a) liable for any
action lawfully taken or omitted to be taken by it or such Person under
or in connection with the Loan Documents (except for its or such
Person's own gross negligence or willful misconduct), or (b) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by Borrowers or any officer thereof
contained in the Loan Documents or in any certificate, report, statement
or other document referred to or provided for in, or received by Credit
Agent under or in connection with, the Loan Documents or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of
the Loan Documents or for any failure of Borrowers to perform their
obligations under any Loan Document. Credit Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance
or performance of any of the agreements contained in, or conditions of,
the Loan Documents or to inspect the properties, books or records of
Borrowers or any of their Subsidiaries.
11.6. Reliance by Agent
Credit Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent,
certification, affidavit, letter, cablegram, telegram, telecopy, telex
or teletype message, statement, order or other document or conversation
reasonably believed by it to be correct and to have been signed, sent or
made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to Borrowers),
independent accountants (including, without limitation, accountants to
Borrowers) and other experts selected by Credit Agent. Credit Agent may
deem and treat the payee of any Note as the owner thereof for all
purposes. Credit Agent shall be fully justified in failing or refusing
to take any action under the Loan Documents unless it shall first
receive such advice or concurrence of the
Majority Lenders or all Lenders, as appropriate, or it shall first be
indemnified to its satisfaction by Lenders ratably in accordance with
their respective Percentage Shares against any and all liability and
expense which may be incurred by it by reason of taking or continuing to
take any action (except for liabilities and expenses resulting from
Credit Agent's gross negligence or willful misconduct), and (b) Credit
Agent shall in all cases be fully protected in acting, or in refraining
from acting, under the Loan Documents in accordance with a request of
the Majority Lenders or all Lenders, as appropriate, and such request
and any action taken or failure to act pursuant thereto shall be binding
upon all Lenders.
11.7. Non-Reliance on Agent or Other Lenders
Each Lender expressly acknowledges that neither Credit Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to such Lender and
that no act by Credit Agent hereafter taken, including any review of the
affairs of Borrowers, shall be deemed to constitute any representation
or warranty by Credit Agent to any Lender. Each Lender represents to
Credit Agent that it has, independently and without reliance upon Credit
Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and
other condition and creditworthiness of Borrowers and made its own
decision to enter into and make Advances under the Agreement. Each
Lender also represents that it will, independently and without reliance
upon Credit Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make
its own credit analysis, appraisals and decisions in taking or not
taking action under the Agreement, and to make such investigation as it
deems necessary to inform itself as to the business, operations,
property, financial and other condition and creditworthiness of
Borrowers. Except for notices, reports and other documents expressly
required to be furnished to Lenders by Credit Agent hereunder, Credit
Agent shall have no duty or responsibility to provide any Lender with
any credit or other information concerning the business, operations,
property, financial or other condition or creditworthiness of Borrowers
or any Subsidiary or either Guarantor which may come into the possession
of Credit Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
11.8. Agent in Individual Capacity
Credit Agent may make loans to, purchase Mortgage Loans and other assets
from, and generally engage in any kind of business with Borrowers as
though it were not an agent hereunder. With respect to the Advances made
or renewed by it and any Note issued to it, Credit Agent shall have the
same rights and powers under the Loan Documents as any Lender and may
exercise the same as though it were not Credit Agent, and the terms
"Lender" and "Lenders" shall include Credit Agent in its individual
capacity.
11.9. Successor Agent
Credit Agent may resign as such at any time upon giving 30 days Notice
to Borrowers and Lenders. Credit Agent may be removed immediately with
cause or at any time upon 10 days Notice from the Majority Lenders to
Credit Agent and Borrowers. Upon Notice of such resignation or removal,
the Majority Lenders may appoint a successor Credit Agent (which
successor Credit Agent, assuming that no Default or Event of Default
exists, shall be reasonably acceptable to Borrowers). The date on which
Borrowers, Credit Agent and Lenders have received Notice from such
successor of its acceptance of appointment as Credit Agent shall
constitute the effective date of resignation or removal of the resigning
or removed Credit Agent. If no successor Credit Agent shall have been so
appointed by the Majority Lenders, and shall have accepted such
appointment within the allotted time period, then, upon 5 days Notice to
Borrowers, the resigned or removed Credit Agent may, on behalf of
Lenders, appoint a successor. Upon the effective date of resignation or
removal of the resigning or removed Credit Agent, such successor will
thereupon succeed to and become vested with all the rights, powers,
privileges, and duties of the resigning or removed Credit Agent, but the
resigning or removed Credit Agent shall not be discharged from any
liability as a result of its or its directors', officers', agents', or
employees' gross negligence or willful misconduct in the performance of
its duties and obligations under this Agreement prior to the effective
date of its resignation or removal. Upon the effective date of its
resignation or removal, Credit Agent shall assign all of its right,
title and security interest in and to all Collateral to its successor,
without recourse, warranty or representation, express or implied.
11.10. Availability of Documents
Lenders and their agents, accountants, attorneys and auditors will be
permitted during normal business hours at any time and from time to time
upon reasonable notice to examine (to the extent permitted by applicable
law) the files, documents, records and other papers in the possession or
under the control of the Credit Agent relating to any or all Pledged
Loans and Pledged Securities and to make copies thereof. Except during
an Event of Default, any such activity will be at the cost and expense
of the Lender conducting such activity; during an Event of Default, all
costs and expenses associated with the exercise by Lenders of their
rights under this Section 11.10 shall be promptly paid by Borrower upon
demand of any Lender made through the Credit Agent in each case.
End of Article 0
MISCELLANEOUS
12.1. Notices
Except where telephonic or facsimile notice is expressly authorized by
this Agreement, all communications required or permitted to be given or
made under this Agreement ("Notices") must be in writing and must be
sent by manual delivery, overnight courier or United States mail
(postage prepaid), addressed as follows (or at such other address as may
be designated by it in a Notice to the other):
If to Borrowers: Columbia National, Incorporated
American Home Mortgage Corp.
c/o American Home Mortgage Holdings, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Financial
Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Columbia National, Incorporated
American Home Mortgage Corp.
c/o American Home Mortgage Holdings, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
With a copy to: American Home Mortgage Acceptance, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇, Senior V.P./Treasurer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: American Home Mortgage Acceptance, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
If to Credit Agent: Residential Funding Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Director
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lenders: As set forth on the signature pages hereof or of
any amendment hereto.
All periods of Notice will be measured from the date of delivery if
delivered manually or by facsimile, from the first Business Day after
the date of sending if sent by overnight courier or from 4 days after
the date of mailing if sent by United States mail, except that Notices
to Credit Agent under Article 2 and Section 3.3 shall be deemed to have
been given only when actually received by Credit Agent. Borrowers
authorizes Credit Agent to accept Borrowers' bailee pledge agreements,
Advance Requests, shipping requests, wire transfer instructions and
security
delivery instructions transmitted to Credit Agent by facsimile or
RFConnects Delivery, and those documents, when transmitted to Credit
Agent by facsimile or by RFConnects Delivery, have the same force and
effect as the originals.
12.2. Reimbursement Of Expenses; Indemnity
Borrowers must: (a) pay Credit Agent a document production fee in
connection with the preparation and negotiation of this Agreement; (b)
pay such additional documentation production fees as Credit Agent may
require and all out-of-pocket costs and expenses of Credit Agent,
including reasonable fees, service charges and disbursements of counsel
to Credit Agent (including allocated costs of internal counsel), in
connection with the amendment, enforcement and administration of this
Agreement, the Notes, and other Loan Documents, the making, repayment
and payment of interest on the Advances and the payment of all other
Obligations under Loan Documents; (c) indemnify, pay, and hold harmless
Credit Agent and Lenders and any other holder of the Notes from and
against, all present and future stamp, documentary and other similar
taxes with respect to the foregoing matters and save Credit Agent and
Lenders and any other holder of the Notes harmless from and against all
liabilities with respect to or resulting from any delay or omission to
pay such taxes; and (d) indemnify, pay and hold harmless Credit Agent
and each Lender and all of their officers, directors, employees or
agents and any subsequent holder of the Notes (collectively called the
"Indemnitees") from and against all liabilities, obligations, losses,
damages, penalties, judgments, suits, costs, expenses and disbursements
of every kind or nature (including the reasonable fees and disbursements
of counsel to the Indemnitees (including allocated costs of internal
counsel) in connection with any investigative, administrative or
judicial proceeding, whether or not the Indemnitees have been designated
as parties to such proceeding) that may be imposed upon, incurred by or
asserted against such Indemnitees in any manner relating to or arising
out of this Agreement, the Notes, or any other Loan Document or any of
the transactions contemplated by this Agreement, the Notes and the other
Loan Documents, including against all liabilities, obligations, losses,
damages, penalties, judgments, suits, costs, expenses and disbursements
of every kind or nature (including the reasonable fees and disbursements
of counsel to the Indemnitees (including allocated costs of internal
counsel) in connection with any investigative, administrative or
judicial proceeding, whether or not the Indemnitees have been designated
as parties to such proceeding) arising from any breach of Sections 9.2
(v) or 9.3 (f) or the making of any Mortgage Loan in which any
mortgagor, guarantor or other obligor is a Person named in any
Restriction List and to whom the provision of financial services is
prohibited or otherwise restricted by applicable law ("Indemnified
Liabilities"), except that Borrowers have no obligation under this
Agreement to any Indemnitee with respect to Indemnified Liabilities
arising from the gross negligence or willful misconduct of such
Indemnitees. To the extent that the undertaking to indemnify, pay and
hold harmless as set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy,
Borrowers must contribute the maximum portion that it is permitted to
pay and satisfy under applicable law to the payment and satisfaction of
all Indemnified Liabilities incurred by the Indemnitees or any of them.
The agreement of Borrowers contained in this Article survives the
expiration or termination of this Agreement and the payment in full of
the Notes. Attorneys' fees and disbursements incurred in enforcing, or
on appeal from, a judgment under this Agreement are recoverable
separately from and in addition to any other amount included in such
judgment, and this clause is intended to be severable from the other
provisions of this Agreement and to survive and not be merged into such
judgment.
12.3. Indemnification by Lenders
Each Lender agrees to indemnify Credit Agent in its capacity as such (to
the extent not reimbursed by Borrowers and without limiting the
obligation of Borrowers to do so), ratably according to the respective
amounts of their Percentage Shares, from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including without limitation at any
time following the payment of the Obligations) be imposed on, incurred
by or asserted against Credit Agent in any way relating to or arising
out of the Loan Documents or any documents contemplated by or referred
to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by Credit Agent under or in connection
with any of the foregoing; provided that no Lender shall be liable for
the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from Credit Agent's gross negligence or willful
misconduct. The agreements in this Section shall survive the payment of
the Obligations and the termination of this Agreement. Attorneys' fees
and disbursements incurred in enforcing, or on appeal from, a judgment
pursuant hereto shall be recoverable separately from and in addition to
any other amount included in such judgment, and this clause is intended
to be severable from the other provisions of this Agreement and to
survive and not be merged into such judgment.
12.4. Financial Information
All financial statements and reports furnished to Credit Agent under
this Agreement must be prepared in accordance with GAAP, applied on a
basis consistent with that applied in preparing the financial statements
as at the end of and for Borrowers' most recent fiscal year (except to
the extent otherwise required to conform to good accounting practice).
12.5. Terms Binding Upon Successors; Survival of Representations
The terms and provisions of this Agreement are binding upon and inure to
the benefit of Borrowers, Credit Agent, Lenders and their respective
successors and assigns. All of Borrowers' representations, warranties,
covenants and agreements survive the making of any Advance, and except
where a longer period is set forth in this Agreement, remain effective
for as long as the Commitments are outstanding or there remain any
Obligations to be paid or performed.
12.6. Lenders in Individual Capacity
Any Lender and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with Borrowers, any
Subsidiary and/or Guarantor regardless of its capacity as a Lender
hereunder. Any Lender may disclose to the other Lenders information
regarding other relationships which it may have with Borrowers and
Borrowers hereby consent to these disclosures.
12.7. Assignments and Participations
This Agreement and the Obligations of Borrowers may not be assigned by
Borrowers. Any Lender may, subject to the limitations set forth below,
assign or transfer, in whole or in part, its Commitments and the related
Advances, together with its corresponding rights under this Agreement
and the other Loan Documents, and further may sell participations in all
or any part of any of its Commitments and the related Advances or any
other interest in the Obligations or any of its obligations hereunder to
another Person, in which event: (a) in the case of an assignment, upon
notice thereof by such Lender to Borrowers and consent of Credit Agent,
the assignee shall have, to the extent of such assignment (unless
otherwise provided thereby), the same rights and benefits as it would
have if it were a "Lender" hereunder, and, if the assignee has expressly
assumed, for the benefit of Borrowers, such Lender's obligations
hereunder, such Lender shall be relieved of its obligations hereunder to
the extent of such assignment and assumption, provided that Credit Agent
shall have
no obligation to consent to there being more than a total of 10 Lenders
(a Participant is not a Lender); and (b) in the case of a participation,
the participating Person's (a "Participant") rights against the Lender
from whom it has purchased such participation in respect of such
participation are those set forth in the agreement executed by such
Lender in favor of the Participant relating thereto. Unless an assignee
has expressly assumed such Lender's obligations hereunder, (x) such
Lender shall remain solely responsible to the other parties hereto for
the performance of such Lender's obligations under the Loan Documents,
whether or not such Lender shall remain the holder of any Note, (y) such
Lender shall retain all voting rights with respect to such Note, the
Advances hereunder and Lender's Commitments, and (z) Borrowers, Credit
Agent and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations
under the Loan Documents. Without limiting any Lenders exclusive right
to collect and enforce the Obligations owed to it, Borrowers agree that
each participation will give rise to a debtor-creditor relationship
between Borrowers and Participant, and Borrowers authorize each
Participant, upon an occurrence of an Event of Default, to proceed
directly by right of setoff, bankers' lien or otherwise, against any
assets of Borrowers that may be held by that Participant.
Notwithstanding the foregoing, nothing contained herein shall in any
manner or to any extent affect the right of any Lender to pledge or
assign Notes and interests in this Agreement to any Federal Reserve Bank
pursuant to applicable laws and regulations, or to assign its Notes and
its right to receive and retain payments on its Notes provided such
Lender remains primarily and directly liable pursuant to the terms and
conditions of this Agreement to keep, observe and perform all of its
obligations under this Agreement, and all such assignments shall be
treated, considered and administered as a sale of a participation and
not as an assignment and shall be subject to and governed by the
provisions of this Section. Any Lender may furnish any information
concerning Borrowers in the possession of such Lender from time to time
to Affiliates of such Lender and to assignees and Participants
(including prospective assignees and Participants) and Borrowers hereby
consent to the provision of such information.
12.8. Commitment Increases
12.8 (a) At any time and from time to time after the Closing Date, the
Warehousing Credit Limit and the Term Loan Credit Limit may be increased
either by an Additional Lender establishing a Warehousing Commitment and
a Term Loan Commitment or by one or more then existing Lenders
("Increase Lenders") increasing its Warehousing Commitment Amount and
Term Loan Commitment Amount (each such increase by either means, a
"Commitment Increase") provided that no Commitment Increase shall become
effective unless and until (i) Borrowers, Credit Agent and the
Additional Lenders or the Increase Lenders shall have executed and
delivered an amendment with respect to such Commitment Increase, and
(ii) if, after giving effect thereto, the Warehousing Credit Limit would
exceed $450,000,000 and the Term Loan Credit Limit would exceed
$100,000,000, such Commitment Increase shall have been consented to by
each of the other Lenders. Prior to the effective date ("Effective
Date") of any Commitment Increase, Borrowers shall issue promissory
notes to the Additional Lenders. Such new promissory note or notes shall
constitute a "Warehousing Note" and "Term Loan Note" for the purposes of
the Loan Documents. No Lender has implicitly or explicitly agreed to
make any future Commitment Increase by entering into this Agreement.
12.8 (b) On the Effective Date of such Commitment Increase, Credit Agent
shall recompute the Percentage Share for each Lender based on the new
Warehousing Credit Limit and Term Loan Credit Limit which results from
the Commitment Increase, and Credit Agent shall request Warehousing
Advances and Term Loan Advances from or will direct prepayments to each
Lender so that the total amount of all then outstanding Warehousing
Advances and Term Loan Advances are shared pro rata by each Lender. On
the effective date of any reduction of the Warehousing Credit Limit and
Term Loan Credit Limit resulting from the expiration of a temporary
increase in any Lender's Warehousing Commitment Amount and Term Loan
Commitment Amount, Borrower shall prepay the Warehousing Advances and
Term Loan Advances in an amount equal to the
amount by which the aggregate unpaid principal balance of such Lender's
(i) Warehousing Advances exceeds its Warehousing Commitment Amount, and
(ii) Term Loan Advances exceeds its Term Loan Commitment Amount, and
Credit Agent shall direct such prepayments to such Lender.
12.9. Amendments
12.9 (a) Other than as permitted by Section 12.8(a), this Agreement may
not be amended or terms or provisions hereof waived unless such
amendment or waiver is in writing and signed by the Majority Lenders,
Credit Agent and Borrowers; provided, however, that without the prior
written consent of 100% of Lenders, no amendment or waiver shall: (1)
waive or amend any term or provision of Sections 7.4, 7.13, 7.14 or 7.15
hereof or the definition of any type of Collateral or the provisions of
Section 4.1 hereof, or release the Guarantor, (2) reduce the principal
of, or rate of interest or fees on, the Advances or any Lender's
Commitments, (3) modify the Warehousing Credit Limit or the Term Loan
Credit Limit (other than as permitted by Section 12.8(a)), (4) modify
any Lender's Percentage Share of the Warehousing Credit Limit or the
Term Loan Credit Limit (other than as permitted by Section 12.8(a)), (5)
modify the definition of "Majority Lenders," or of the number or
percentage of Lenders that are required to take action under the Loan
Documents, (6) extend the Term Loan Commitment Termination Date, the
Term Loan Maturity Date or the Warehousing Maturity Date, (7) release
any material portion of the Collateral, except as expressly contemplated
by the Loan Documents or in connection with a sale of such Collateral
permitted hereunder, (8) amend Exhibit H, or (9) amend this Section. It
is expressly agreed and understood that the failure by the Majority
Lenders to elect to accelerate amounts outstanding hereunder or to
terminate the obligation of Lenders to make Advances hereunder shall not
constitute an amendment or waiver of any term or provision of this
Agreement.
12.9 (b) Borrowers hereby agree that they shall, upon requesting any
amendment of this Agreement or any other Loan Document or any waiver of
any material term or provision of this Agreement or any other Loan
Document (except an extension of the Warehousing Maturity Date), pay at
the time of such request a modification fee (1) to Credit Agent in a
minimum amount of $2,500 or such greater amount as may be notified to
Borrowers by Credit Agent in its sole discretion and (2) to each Lender
(except any Lender which becomes party to the Agreement by virtue of
such amendment) in a minimum amount of $1,000 or such greater amount as
may be notified to Borrowers by the Majority Lenders, acting through
Credit Agent, in their sole discretion. The payment of such modification
fees shall be in addition to and shall not limit Borrowers'
reimbursement obligations pursuant to Section 12.2 hereof, and any other
fee or charge imposed by Credit Agent or Lenders as a condition to any
amendment.
12.10. Governing Law
This Agreement and the other Loan Documents are governed by the laws of
the State of Minnesota, without reference to its principles of conflicts
of laws.
12.11. Relationship of the Parties
This Agreement provides for the making and repayment of Advances by
Lenders (in their capacities as Lenders) to Borrowers (in their capacity
as a Borrowers), for the payment of interest on those Advances and for
the payment of certain fees by Borrowers to Lenders and Credit Agent.
The relationship between Lenders and Borrowers is limited to that of
creditor and secured party on the part of Lenders and of debtor on the
part of Borrowers. The provisions of this Agreement and the other Loan
Documents for compliance with financial covenants and the delivery of
financial statements and other operating reports are intended solely for
the benefit of
Lenders and Credit Agent to protect their interest as a creditors and
secured party. Nothing in this Agreement creates or may be construed as
permitting or obligating Credit Agent or any Lender to act as a
financial or business advisor or consultant to Borrowers, as permitting
or obligating Lenders or Credit Agent to control Borrowers or to conduct
Borrowers' operations, as creating any fiduciary obligation on the part
of Credit Agent or any Lender to Borrowers, or as creating any joint
venture, agency, partnership or other relationship between Credit Agent
or any Lender and Borrowers other than as explicitly and specifically
stated in the Loan Documents. Borrowers acknowledge that they have had
the opportunity to obtain the advice of experienced counsel of their own
choice in connection with the negotiation and execution of the Loan
Documents and to obtain the advice of that counsel with respect to all
matters contained in the Loan Documents, including the waivers of jury
trial and of punitive, consequential, special or indirect damages
contained in Sections 12.16 and 12.17, respectively. Borrowers further
acknowledges that they are experienced with respect to financial and
credit matters and have made their own independent decisions to apply to
Lenders for credit and to execute and deliver this Agreement.
12.12. Severability
If any provision of this Agreement is declared to be illegal or
unenforceable in any respect, that provision is null and void and of no
force and effect to the extent of the illegality or unenforceability,
and does not affect the validity or enforceability of any other
provision of the Agreement.
12.13. Consent to Credit References
Borrowers consents to the disclosure of information regarding Borrowers
and their Subsidiaries and their relationships with Credit Agent and
Lenders to Persons making credit inquiries to Credit Agent or any
Lender. This consent is revocable by Borrowers at any time upon Notice
to Lenders as provided in Section 12.1.
12.14. Counterparts
This Agreement may be executed in any number of counterparts, each of
which will be deemed an original, but all of which together constitute
but one and the same instrument.
12.15. Headings/Captions
The captions or headings in this Agreement and the other Loan Documents
are for convenience only and in no way define, limit or describe the
scope or intent of any provision of this Agreement or any other Loan
Document.
12.16. Entire Agreement
This Agreement, the Notes and the other Loan Documents represent the
final agreement among the parties with respect to their subject matter,
and may not be contradicted by evidence of prior or contemporaneous oral
agreements among the parties. There are no oral agreements among the
parties with respect to the subject matter of this Agreement, the Notes
and the other Loan Documents.
12.17. Consent to Jurisdiction
AT THE OPTION OF CREDIT AGENT, THIS AGREEMENT, THE NOTES AND THE OTHER
LOAN DOCUMENTS MAY BE ENFORCED IN ANY STATE OR FEDERAL COURT WITHIN THE
STATE OF MINNESOTA. BORROWERS CONSENT TO THE JURISDICTION AND VENUE OF
THOSE COURTS, AND WAIVE ANY OBJECTION TO THE JURISDICTION OR VENUE OF
THOSE COURTS, INCLUDING THE OBJECTION THAT VENUE IN THOSE COURTS IS NOT
CONVENIENT. ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE COMMENCED AND
INSTITUTED BY SERVICE OF PROCESS UPON BORROWERS BY FIRST CLASS
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO
BORROWERS AT THEIR ADDRESS LAST KNOWN TO CREDIT AGENT. EACH BORROWER'S
CONSENT AND AGREEMENT UNDER THIS SECTION DOES NOT AFFECT CREDIT AGENT'S
RIGHT TO ACCOMPLISH SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
BORROWERS IN ANY OTHER JURISDICTION OR COURT. IN THE EVENT BORROWERS
COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR
CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP
CREATED BY THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, CREDIT AGENT AT
ITS OPTION MAY HAVE THE CASE TRANSFERRED TO A STATE OR FEDERAL COURT
WITHIN THE STATE OF MINNESOTA OR, IF A TRANSFER CANNOT BE ACCOMPLISHED
UNDER APPLICABLE LAW, MAY HAVE BORROWER'S ACTION DISMISSED WITHOUT
PREJUDICE.
12.18. Waiver of Jury Trial
EACH BORROWER, CREDIT AGENT AND EACH LENDER, EACH PROMISES AND AGREES
NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY,
AND FULLY WAIVES ANY RIGHT TO TRIAL BY JURY TO THE EXTENT THAT ANY SUCH
RIGHT NOW EXISTS OR ARISES AFTER THE DATE OF THIS AGREEMENT. THIS WAIVER
OF THE RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN, KNOWINGLY AND
VOLUNTARILY, BY EACH BORROWER, CREDIT AGENT AND EACH LENDER, AND IS
INTENDED TO ENCOMPASS EACH INSTANCE AND EACH ISSUE FOR WHICH THE RIGHT
TO TRIAL BY JURY WOULD OTHERWISE APPLY. CREDIT AGENT, EACH BORROWER AND
LENDERS ARE EACH AUTHORIZED AND DIRECTED TO SUBMIT THIS AGREEMENT TO ANY
COURT HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES TO
THIS AGREEMENT AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF THE RIGHT TO
TRIAL BY JURY. FURTHER, EACH BORROWER, CREDIT AGENT AND LENDERS EACH
CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE OTHER PARTY, INCLUDING
THE OTHER PARTY'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO
ANY OF ITS REPRESENTATIVES OR AGENTS THAT THE OTHER PARTY WILL NOT SEEK
TO ENFORCE THIS WAIVER OF RIGHT TO TRIAL BY JURY.
12.19. Waiver of Punitive, Consequential, Special or Indirect Damages
EACH BORROWER WAIVES ANY RIGHT IT MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES FROM CREDIT AGENT, ANY LENDER
OR ANY OF THEIR AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS
WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING,
CLAIM OR COUNTERCLAIM BROUGHT BY BORROWERS AGAINST LENDERS, CREDIT AGENT
OR ANY OF THEIR AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS
WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT. THIS WAIVER
OF THE RIGHT TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL OR INDIRECT
DAMAGES IS KNOWINGLY AND VOLUNTARILY GIVEN BY EACH BORROWER, AND IS
INTENDED TO ENCOMPASS EACH INSTANCE AND EACH ISSUE FOR WHICH THE RIGHT
TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES WOULD
OTHERWISE APPLY. CREDIT AGENT AND EACH LENDER ARE AUTHORIZED AND
DIRECTED TO SUBMIT THIS AGREEMENT TO ANY COURT HAVING JURISDICTION OVER
THE SUBJECT MATTER AND THE PARTIES TO THIS AGREEMENT AS CONCLUSIVE
EVIDENCE OF THIS WAIVER OF THE RIGHT TO SEEK PUNITIVE, CONSEQUENTIAL,
SPECIAL OR INDIRECT DAMAGES.
12.20 Waiver of Defaults under Existing Agreement.
AHMC has notified Lenders and Credit Agent that Defaults or Events of
Default (as defined in the Existing Agreement) exist (a) as a result of
the failure to deliver in a timely fashion the financial statements
required by Section 7.2 of the Existing Agreement in respect of the
months ended February 29, 2004 and ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) as a result of
the failure to be in compliance with Section 8.9 and 8.12 of the
Existing Agreement as of each of February 29, 2004, March 31, 2004, and
(c) as a result of the failure to be in compliance with Section 8.12 of
the Existing Agreement as of February 29, 2004 (a - c, collectively, the
"Existing Defaults"). Majority Lenders (as defined in the Existing
Agreement) and Credit Agent waive the Existing Defaults effective as of
the Closing Date, provided, that (a) on or prior to the Closing Date (as
defined in this Agreement), Borrowers deliver to Lenders financial
statements of Borrowers as of each of February 29, 2004 and March 31,
2004 that demonstrate compliance by Borrowers as of each of such dates
with all financial covenants set forth in Article 8 of this Agreement
(assuming such financial covenants were applicable as of each of such
dates), (b) when financial statements for financial results as of April
30, 2004 are delivered to Lenders they demonstrate compliance by
Borrowers as of such date with all financial covenants set forth in
Article 8 of this Agreement (assuming such financial covenants were
applicable as of such date), and (c) on or prior to the Closing Date
AHMIC certifies to Lenders that its consolidated net income for each
consecutive three month period ended February 29, 2004 and March 31,
2004, respectively, was positive. If Borrowers' financial statements for
the month ended April 30, 2004 do not demonstrate compliance with all
covenants set forth in Article 8 of this Agreement (assuming such
financial covenants were applicable as of such date), or if AHMIC's net
income for the three month period ended April 30, 2004 is not positive,
then, in either case, an Event of Default (as defined in this Agreement)
will be deemed to exist. This waiver applies only to the specific
instances described in this Section 12.20. Lenders and Credit Agent
reserve all of the rights, powers and remedies available to them under
the Loan Documents, including the right to cease making Advances to
Borrowers and the right to accelerate the Obligations, if any Default or
Event of Default (as defined in this Agreement) occurs.
End of Article 0
DEFINITIONS
13.1. Defined Terms
Capitalized terms defined below or elsewhere in this Agreement have the
following meanings or, as applicable, the meanings given to those terms
in Exhibits to this Agreement:
"Accrual Basis" has the meaning set forth in Section 3.1(c).
"Additional Lenders" means a Person admitted as a Lender under the
Agreement by assignment or by the terms of an amendment hereto. Credit
Agent will use its best efforts to notify Borrowers of the identity of
any Person (other than RFC) proposed by Credit Agent to be admitted as a
Lender at least 10 Business Days prior to the date on which such Person
is proposed to be admitted as a Lender, provided that Credit Agent shall
incur no liability to Borrowers or any other Person for any failure to
give such notification.
"Advance" means a Warehousing Advance, a Swingline Advance or a Term
Loan Advance.
"Advance Rate" means, with respect to any Eligible Loan, the Advance
Rate set forth in Exhibit H for that type of Eligible Loan.
"Advance Request" means a Warehousing Advance Request Against Eligible
Loans, a Warehousing Advance Request Against Constructon/Perm Mortgage
Loans, Warehousing Advance Request Against Other Eligible Assets or a
Term Loan Advance Request.
"Affiliate" means, when used with reference to any Person, (a) each
Person that, directly or indirectly, controls, is controlled by or is
under common control with, the Person referred to, (b) each Person that
beneficially owns or holds, directly or indirectly, 5% or more of any
class of voting Equity Interests of the Person referred to, (c) each
Person, 5% or more of the voting Equity Interests of which is
beneficially owned or held, directly or indirectly, by the Person
referred to, and (d) each of such Person's officers, directors, joint
venturers and partners. For these purposes, the term "control"
(including the terms "controlled by" and "under common control with")
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of the Person in
question.
"Aged Mortgage Loans" means Mortgage Loans against which a Warehousing
Advance has been outstanding for longer than the Standard Warehouse
Period, provided that Aged Mortgage Loans are permitted for such type of
Mortgage Loan.
"Aged Warehouse Period" means the maximum number of days a Warehouse
Advance against Aged Mortgage Loans of a particular type may remain
outstanding as set forth in Exhibit H.
"Aged Wet Mortgage Loan" has the meaning set forth on Exhibit H.
"Agency Security" means a Mortgage-backed Security issued or guaranteed
by ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae.
"Agreement" means this Second Amended and Restated Warehousing Credit,
Term Loan and Security Agreement (Syndicated), either as originally
executed or as it may be amended, restated, renewed or replaced.
"AH Holdings" means American Home Mortgage Holdings, Inc., a Delaware
corporation.
"AHMC" has the meaning set forth in the first paragraph of this
Agreement.
"AHMAI" has the meaning set forth in the first paragraph of this
Agreement.
"AHMIC" means American Home Mortgage Investment Corp., a Maryland
corporation.
"Appraisal" means a certificate of independent certified public
accountants or independent financial consultants of recognized standing
selected by Borrowers and satisfactory to Credit Agent as to the
Appraisal Value of the Servicing Contracts included in the Servicing
Collateral. An Appraisal must evaluate Borrowers' Servicing Portfolio or
those Servicing Contracts based upon reasonably determined categories of
the Mortgage Loans and must give effect to any subservicing agreements
to which any Mortgage Loan is or will be subject. Each Appraisal must be
in form, substance and detail satisfactory to Credit Agent.
"Appraisal Value" means, as of any date of determination, the fair
market value of Borrowers' right to service Mortgage Loans under the
Servicing Contracts included in the Servicing Collateral. Appraisal
Value must be calculated as a percentage of the unpaid principal amount
of each category of Mortgage Loan serviced under those Servicing
Contracts.
"Appraised Property Value" means with respect to an interest in real
property, the then current fair market value of the real property and
any improvements on it as of recent date determined in accordance with
Title XI of FIRREA by a qualified appraiser who is a member of the
American Institute of Real Estate Appraisers or other group of
professional appraisers.
"Approved Custodian" means a pool custodian or other Person that Credit
Agent deems acceptable, in its sole discretion, to hold Mortgage Loans
for inclusion in a Mortgage Pool or to hold Mortgage Loans as agent for
an Investor that has issued a Purchase Commitment for those Mortgage
Loans. The Approved Custodians as of the Closing Date are listed on
Exhibit Q hereto. Credit Agent may at any time, on 3 Business Days'
Notice to Borrowers, add or remove any Person as an Approved Custodian.
"As Completed Appraised Value" means the value given by a
state-certified appraiser to the real property and improvements on the
real property based on the Total Hard Costs and plans and specifications
for the improvements on the real property prior to the beginning of any
construction or rehabilitation.
"Audited Statement Date" means the date of Borrowers' most recent
audited financial statements (and, if applicable, Borrowers'
Subsidiaries, on a consolidated basis) delivered to Credit Agent under
the Existing Agreement or this Agreement.
"Balance Deficiency Fee" has the meaning set forth in Section 3.1(b).
"Balance Funded Agreement" has the meaning set forth in Section 3.1(b).
"Balance Funded Portion" has the meaning set forth in Section 3.1(b).
"Balance Funding Rate" has the meaning set forth in Exhibit H.
"Bank One" means Bank One, National Association, or any successor bank.
"Bank One Prime Rate" means, as of any date of determination, the
highest prime rate quoted by Bank One and most recently published by
Bloomberg L.P. If the prime rate for Bank One is not
quoted or published for any period, then during that period the term
"Bank One Prime Rate" means the highest prime rate published in the most
recent edition of The Wall Street Journal in its regular column entitled
"Money Rates."
"Bond Program Mortgage Loan" has the meaning set froth in Exhibit H.
"Book Net Worth" means with respect to any Person at any date, the
excess of total assets over total liabilities of such Person on such
date, each to be determined in accordance with GAAP consistent with
those applied in the preparation of the financial statements referred to
in Section 7.2(b) hereof.
"Borrower" or "Borrowers" has the meaning set forth in the first
paragraph of this Agreement.
"Business Day" means any day other than Saturday, Sunday or any other
day on which national banking associations are closed for business.
"Calendar Quarter" means the 3 month period beginning on each January 1,
April 1, July 1 or October 1.
"Cash Collateral Account" means a demand deposit account maintained at
the Funding Bank in Credit Agent's name and designated for receipt of
the proceeds of the sale or other disposition of Collateral.
"Check Disbursement Account" means a demand deposit account maintained
at the Funding Bank in Borrowers' name and under the control of Lender
for clearing checks written by Borrowers to fund Mortgage Loans funded
by Warehousing Advances.
"Closing Date" has the meaning set forth in the Recitals to this
Agreement.
"CNI" has the meaning set forth in the first paragraph of this
Agreement.
"Collateral" has the meaning set forth in Section 4.1.
"Collateral Documents" means, with respect to each Mortgage Loan, (a)
the Mortgage Note, the Mortgage and all other documents including, if
applicable, any Security Agreement, executed in connection with or
relating to the Mortgage Loan; (b) as applicable, the original lender's
ALTA Policy of Title Insurance or its equivalent, documents evidencing
the FHA Commitment to Insure, the VA Guaranty or private mortgage
insurance, the appraisal, the Regulation Z statement, the environmental
assessment, the engineering report, certificates of casualty or hazard
insurance, credit information on the maker of the Mortgage Note, the
HUD-1 or corresponding purchase advice; (c) any other document listed in
Exhibit B; and (d) any other document that is customarily desired for
inspection or transfer incidental to the purchase of any Mortgage Note
by an Investor or that is customarily executed by the seller of a
Mortgage Note to an Investor.
"Committed Purchase Price" means for an Eligible Loan (a) the dollar
price as set forth in the Purchase Commitment or, if the price is not
expressed in dollars, the product of the Mortgage Note Amount multiplied
by the price (expressed as a percentage) as set forth in the Purchase
Commitment for the Eligible Loan, or (b) if the Eligible Loan is to be
used to back an Agency Security, an amount equal to the product of the
Mortgage Note Amount multiplied by the price (expressed as a percentage)
as set forth in the Purchase Commitment for the Agency Security.
"Commitments" means the Warehousing Commitment and the Term Loan
Commitment.
"Compliance Certificate" means a certificate executed on behalf of
Borrowers by the chief financial officer or treasurer of a Borrower or
by another officer approved by Credit Agent, substantially in the form
of Exhibit E.
"Co-op Loans" means a loan evidenced by a co-op note and committed for
purchase by an Investor.
"Construction/Perm Mortgage Loan" has the meaning set forth in Exhibit
H.
"Cost Breakdown" means a list of the costs and expenses to be financed
by the Advances against a Construction/Perm Mortgage Loan, including,
without limitation, real property acquisition costs, hard and soft
construction costs, architectural fees, and any other costs and expenses
budgeted to construct and complete the improvement.
"Credit Agent" has the meaning set forth in the first paragraph of this
Agreement.
"Credit Limit" means the Warehousing Credit Limit or the Term Loan
Credit Limit.
"Credit Score" means a mortgagor's overall consumer credit rating,
represented by a single numeric credit score using the Fair, ▇▇▇▇▇
consumer credit scoring system, provided by a credit repository
acceptable to Credit Agent and the Investor that issued the Purchase
Commitment covering the related Mortgage Loan (if a Purchase Commitment
is required by Exhibit H).
"Debt" means (a) all indebtedness or other obligations of a Person (and,
if applicable, that Person's Subsidiaries, on a consolidated basis)
that, in accordance with GAAP, would be included in determining total
liabilities as shown on the liabilities side of a balance sheet of that
Person on the date of determination, plus (b) all indebtedness or other
obligations of that Person (and, if applicable, that Person's
Subsidiaries, on a consolidated basis) for borrowed money or for the
deferred purchase price of property or services. For purposes of
calculating a Person's Debt, Subordinated Debt not due within 1 year of
that date may be excluded from that Person's indebtedness.
"Default" means the occurrence of any event or existence of any
condition that, but for the giving of Notice or the lapse of time, would
constitute an Event of Default.
"Default Rate" means, for any Advance, the Interest Rate applicable to
that Advance plus 4% per annum. If no Interest Rate is applicable to an
Advance, "Default Rate" means, for that Advance, the highest Interest
Rate then applicable to any outstanding Advance plus 4% per annum.
"Depository Benefit" means the compensation received by a Lender,
directly or indirectly, as a result of Borrowers' maintenance of
Eligible Balances with a Designated Bank.
"Designated Bank" means any bank designated by a Lender as a Designated
Bank, but only for as long as a Lender has an agreement under which
Lender receives Depository Benefits from that bank.
"Designated Bank Charges" means any fees, interest or other charges that
would otherwise be payable to a Designated Bank in connection with
Eligible Balances maintained at the Designated Bank, including deposit
insurance premiums, service charges and any other charges that may be
imposed by governmental authorities from time to time.
"Discontinued Loan" has the meaning set forth in the GMAC-RFC Client
Guide.
"Early Buyout Mortgage Loan" has the meaning set forth in Exhibit H.
"Electronic Advance Request" means an electronic transmission through
RFConnects Delivery containing the same information as Exhibit A to this
Agreement.
"Electronic Tracking Agreement" means an Electronic Tracking Agreement,
on the form prescribed by Credit Agent, among Borrowers, Credit Agent,
MERS and MERCORP, Inc.
"Eligible Balances" means all funds of or maintained by Borrowers (and,
if applicable, Borrowers' Subsidiaries) in demand deposit or time
deposit accounts at a Designated Bank, minus balances to support float,
reserve requirements and any other reductions that may be imposed by
governmental authorities from time to time.
"Eligible Loan" means a Single Family Mortgage Loan or a Co-op Loan that
satisfies the conditions and requirements set forth in Exhibit H.
"Eligible Mortgage Pool" means a Mortgage Pool for which (a) an Approved
Custodian has issued its initial certification, (b) there exists a
Purchase Commitment covering the Agency Security to be issued on the
basis of that certification and (c) the Agency Security will be
delivered to Credit Agent.
"Eligible Servicing Portfolio" means the portion of Borrowers' Servicing
Portfolio consisting of rights to service Single Family Mortgage Loans;
provided, however, not included are the principal balance of Mortgage
Loans included in that Servicing Portfolio (a) with respect to which the
Person is obligated to repurchase or indemnify the holder of the
Mortgage Loans as a result of defaults on the Mortgage Loans at any time
during the term of such Mortgage Loans, (b) the Servicing Contracts for
which are not owned by the Person free and clear of all Liens (other
than in favor of Credit Agent) or (c) that are serviced by Borrowers for
others under subservicing arrangements.
"Equity Interests" means all shares, interests, participations or other
equivalents, however, designated, of or in a Person (other than a
natural person), whether or not voting, including common stock,
membership interests, warrants, preferred stock, convertible debentures
and all agreements, instruments and documents convertible, in whole or
in part, into any one or more of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
all rules and regulations promulgated under that statute, as amended,
and any successor statute, rules, and regulations.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is a member of a group of which Borrowers is a member
and that is treated as a single employer under Section 414 of the
Internal Revenue Code.
"Event of Default" means any of the conditions or events set forth in
Section 10.1.
"Exchange Act" means the Securities Exchange Act of 1934 and all rules
and regulations promulgated under that statute, as amended, and any
successor statute, rules, and regulations.
"Exhibit B" means Exhibit B or Exhibit B-CON, as applicable to the type
of Eligible Loan against which a Warehousing Advance is to be made.
"Existing Agreement" means the First Amended and Restated Warehousing
Credit, Term Loan and Security Agreement dated as of May 30, 2003, as
amended, between Borrowers, Lenders party thereto and Credit Agent.
"Fair Market Value" means, at any time for an Eligible Loan or a related
Agency Security (if the Eligible Loan is to be used to back an Agency
Security) as of any date of determination, (a) the Committed Purchase
Price if the Eligible Loan is covered by a Purchase Commitment from
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac or the Eligible Loan is to be exchanged for an
Agency Security and that Agency Security is covered by a Purchase
Commitment from an Investor, or (b) otherwise, the market price for such
Eligible Loan or Agency Security, determined by Credit Agent based on
market data for similar Mortgage Loans or Agency Securities and such
other criteria as Credit Agent deems appropriate in its sole discretion.
"▇▇▇▇▇▇ Mae" means ▇▇▇▇▇▇ ▇▇▇, a corporation created under the laws of
the United States, and any successor corporation or other entity.
"Federal Funds Rate" means, for each week, the effective Federal Funds
Rate (per annum) of interest in effect on the first Business Day of that
week, as published by Bloomberg L.P. If the Federal Funds Rate is not
published by Bloomberg L.P. on the first Business Day of any week, then
the term "Federal Funds Rate" means the highest Federal Funds Rate
published in the Wall Street Journal in its regular column entitled
"Money Rates" on the first Business Day of that week.
"FHA" means the Federal Housing Administration and any successor agency
or other entity.
"FHA Mortgage Loan" means an FHA-insured Mortgage Loan included in the
Pledged Loans.
"FICA" means the Federal Insurance Contributions Act and all rules and
regulations promulgated under that statute, as amended, and any
successor statute, rules and regulations.
"FIRREA" means the Financial Institutions Reform, Recovery and
Enforcement Act of 1989 and all rules and regulations promulgated under
that statute, as amended, and any successor statute, rules, and
regulations.
"First Mortgage" means a Mortgage that constitutes a first Lien on the
real property and improvements described in or covered by that Mortgage.
"First Mortgage Loan" means a Mortgage Loan secured by a First Mortgage.
"Foreclosure Advance Receivables" has the meaning set forth on Exhibit
H.
"▇▇▇▇▇▇▇ Mac" means ▇▇▇▇▇▇▇ Mac, a corporation created under the laws of
the United States, and any successor corporation or other entity.
"Funding Bank" means Bank One or any other bank designated by Credit
Agent as a Funding Bank.
"Funding Bank Agreement" means a letter agreement on the form prescribed
by Credit Agent between the Funding Bank and Borrowers authorizing
Credit Agent's access to the Operating Account and the Check
Disbursement Account.
"GAAP" means generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and in statements and
pronouncements of the Financial Accounting Standards Board, or in
opinions, statements or pronouncements of any other entity approved by a
significant segment of the accounting profession, which are applicable
to the circumstances as of the date of determination.
"Gestation Agreement" means an agreement under which Borrowers agree to
sell or finance (a) a Mortgage Loan prior to the date of purchase by an
Investor, or (b) a Mortgage Pool prior to the date a Mortgage-backed
Security backed by the Mortgage Pool is issued.
"▇▇▇▇▇▇ Mae" means the Government National Mortgage Association, an
agency of the United States government, and any successor agency or
other entity.
"GMAC-RFC Client Guide" means the applicable loan purchase guide issued
by RFC, as the same may be amended or replaced.
"Government Mortgage Loan" means a closed-end First Mortgage Loan that
is either HUD/FHA insured (other than a HUD 203(K) Mortgage Loan or a
Title I Mortgage Loan) or VA guaranteed.
"Guarantor" means, individually and collectively, AH Holdings and AHMIC
and any other Person that after the date of this Agreement guarantees
all or any portion of the Obligations.
"Guaranty" means a guaranty of all or any portion of the Obligations. If
more than one Guaranty is executed and delivered to Credit Agent, the
term "Guaranty" means each of the Guaranties and all of them.
"Hedging Arrangements" means, with respect to any Person, any agreements
or other arrangements (including interest rate swap agreements, interest
rate cap agreements and forward sale agreements) entered into to protect
that Person against changes in interest rates or the market value of
assets.
"HUD" means the Department of Housing and Urban Development, and any
successor agency or other entity.
"HUD 203(K) Mortgage Loan" means an FHA-insured closed-end First
Mortgage Loan to an individual obligor the proceeds of which will be
used for the purpose of rehabilitating and repairing the related single
family property, and which satisfies the definition of "rehabilitation
loan" in 24 C.F.R. 203.50(a).
"Impaired Mortgage" has the meaning set forth on Exhibit H.
"Indemnified Liabilities" has the meaning set forth in Section 12.2.
"Indemnitees" has the meaning set forth in Section 12.2.
"Interest Rate" means, for any Advance, the floating rate of interest
specified for that Advance in Exhibit H.
"Interim Statement Date" means the date of the most recent unaudited
financial statements of Borrowers (and, if applicable, Borrowers'
Subsidiaries, on a consolidated basis) delivered to Credit Agent under
the Existing Agreement or this Agreement.
"Internal Revenue Code" means the Internal Revenue Code of 1986, Title
26 of the United States Code, and all rules, regulations and
interpretations issued under those statutory provisions, as amended, and
any subsequent or successor federal income tax law or laws, rules,
regulations and interpretations.
"Investment" means any direct or indirect purchase or other acquisition
by any Person of, or a beneficial interest in, stock or other securities
of any other Person, or any direct or indirect loan, advance (other than
advances to employees for moving and travel expenses, drawing accounts
and similar expenditures in the ordinary course of business) or capital
contribution by that Person to any other Person, including all Debt and
accounts receivable from that Person which are not current assets or did
not arise from sales to that other Person in the ordinary course of
business.
"Investment Company Act" means the Investment Company Act of 1940 and
all rules and regulations promulgated under that statute, as amended,
and any successor statute, rules, and regulations.
"Investment Line Agreement" means an agreement under which Borrowers
agree (a) to borrow funds from any Lender or other Person reasonably
satisfactory to the Credit Agent, (b) to invest such funds in
investments of the type described in Section 8.5 (a), (b), (c) and (e),
and (c) to pledge such Investments to such Lender or other Person to
secure such loans.
"Investor" means ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or a financially responsible
private institution that Credit Agent deems acceptable, in its sole
discretion, to issue Purchase Commitments with respect to a particular
category of Eligible Loans. Investors as of the Closing Date are listed
on Exhibit O hereto. Credit Agent may at any time, on 3 Business Days'
Notice to Borrowers and Credit Agent, add or remove any Person as an
Investor.
"Lenders" has the meaning set forth in the first paragraph of this
Agreement.
"Leverage Ratio" means the ratio of a Person's (and, if applicable, the
Person's Subsidiaries, on a consolidated basis) Debt to Tangible Net
Worth. For purposes of calculating a Person's Leverage Ratio, Debt
arising under Hedging Arrangements relating to such Person's Servicing
Portfolio, to the extent of assets arising under those Hedging
Arrangements, Debt arising under Gestation Agreements covering Agency
Securities or Eligible Mortgage Pools and Debt arising under Investment
Line Agreements, to the extent of the Investments securing the same, may
be excluded from a Person's Debt.
"LIBOR" means, for each week, the rate of interest per annum that is
equal to the arithmetic mean of the U.S. Dollar London Interbank Offered
Rates for 1 month periods of certain U.S. banks as of 11:00 a.m. (London
time) on the first Business Day of each week on which the London
Interbank market is open, as published by Bloomberg L.P. If those
interest rates are not offered or published for any period, then during
that period LIBOR means the London Interbank Offered Rate for 1 month
periods as published in The Wall Street Journal in its regular column
entitled "Money Rates" on the first Business Day of each week on which
the London Interbank market is open.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature of such
an agreement and any agreement to give any security interest).
"Liquid Assets" means the following assets owned by a Person (and, if
applicable, that Person's Subsidiaries, on a consolidated basis) as of
any date of determination: (a) unrestricted and unencumbered cash, (b)
funds on deposit in accounts with any bank located in the United Sates
(net of the aggregate amount payable under all outstanding and unpaid
checks, drafts and similar items drawn by a Person against those
accounts), (c) investment grade commercial paper, (d) money market
funds, and (e) marketable securities.
"Liquidity Ratio" means the ratio of a Person's Liquid Assets to Book
Net Worth (expressed as a percentage).
"Loan Documents" means this Agreement, the Notes, the Guaranty, any
agreement of Borrowers relating to Subordinated Debt, and each other
document, instrument or agreement executed by
Borrowers or Guarantor in connection with any of those documents,
instruments and agreements, as originally executed or as any of the same
may be amended, restated, renewed or replaced.
"Loan Package Fee " has the meaning set forth in Section 3.7.
"Loan-to-Value Ratio" means, for any Mortgage Loan, the ratio of (a) the
maximum amount that may be borrowed under the Mortgage Loan (whether or
not borrowed) at the time of origination, plus the Mortgage Note Amounts
of all other Mortgage Loans secured by senior or pari passu Liens on the
related property, to (b) the Appraised Property Value of the related
property.
"Majority Lenders" means at any date the Lenders holding not less than
66-2/3% of the aggregate Credit Limit. Notwithstanding the foregoing, if
there are only 2 Lenders the term "Majority Lenders" shall, except for
purposes of Section 10.2(c), include both Lenders.
"Manufactured Home" means a structure that is built on a permanent
chassis (steel frame) with the wheel assembly necessary for
transportation in one or more sections to a permanent site or
semi-permanent site.
"Margin Stock" has the meaning assigned to that term in Regulation U of
the Board of Governors of the Federal Reserve System, as amended.
"MERS" means Mortgage Electronic Registrations Systems, Inc. and any
successor entity.
"Miscellaneous Fees and Charges" means the miscellaneous fees set forth
on Credit Agent's fee schedule attached as Exhibit I and all
miscellaneous disbursements, charges and expenses incurred by or on
behalf of Credit Agent for the handling and administration of Advances
and Collateral, including costs for Uniform Commercial Code, tax lien
and judgment searches conducted by Credit Agent, filing fees, charges
for wire transfers and check processing charges, charges for security
delivery fees, charges for overnight delivery of Collateral to
Investors, recording fees, Funding Bank service fees and overdraft
charges and Designated Bank Charges. Upon not less than 3 Business Days'
prior Notice to Borrowers, Credit Agent may modify Exhibit I and the
fees set forth in it to conform to current Credit Agent practices and,
as so modified, the revised Exhibit I will become part of this
Agreement.
"Mortgage" means (i) other than for a Co-op Loan, a mortgage or deed of
trust on real property that is improved and substantially completed
(including real property to which a Manufactured Home has been affixed
in a manner such that the Lien of a mortgage or deed of trust would
attach to the Manufactured Home under applicable real property law), and
(ii) with respect to a Co-op Loan, a security agreement, UCC financing
statement and assignment of proprietary lease.
"Mortgage-backed Securities" means securities that are secured or
otherwise backed by Mortgage Loans.
"Mortgage Loan" means any loan evidenced by a Mortgage Note and secured
by a Mortgage and, if applicable, a Security Agreement.
"Mortgage Note" means a promissory note secured by one or more Mortgages
and, if applicable, one or more Security Agreements.
"Mortgage Note Amount" means, as of any date of determination, the then
outstanding and unpaid principal amount of a Mortgage Note (whether or
not an additional amount is available to be drawn under that Mortgage
Note).
"Mortgage Pool" means a pool of one or more Pledged Loans on the basis
of which a Mortgage-backed Security is to be issued.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA, to which any Borrowers or any ERISA Affiliate of
Borrowers has any obligation with respect to its employees.
"Non-Usage Fee" has the meaning set forth in Section 3.5.
"Notes" means the Warehousing Notes, the Sublimit Notes, the Swingline
Note and the Term Loan Notes.
"Notices" has the meaning set forth in Section 12.1.
"Obligations" means all indebtedness, obligations and liabilities of
Borrowers to Lenders and Credit Agent (whether now existing or arising
after the date of this Agreement, voluntary or involuntary, joint or
several, direct or indirect, absolute or contingent, liquidated or
unliquidated, or decreased or extinguished and later increased and
however created or incurred) under the Loan Documents.
"Operating Account" means a demand deposit account maintained at the
Funding Bank in Borrowers' name and designated for funding that portion
of each Eligible Loan or Other Eligible Asset not funded by a
Warehousing Advance made against that Eligible Loan or Other Eligible
Asset and for returning any excess payment from an Investor for a
Pledged Loan or Pledged Security.
"Other Eligible Assets" has the meaning set forth on Exhibit H.
"P&I Advance Receivables-Pooled Loans" has the meaning set forth in
Exhibit H.
"P&I Advance Receivables-EBO Loans" has the meaning set forth in Exhibit
H.
"Participant" has the meaning set forth in Section 12.9.
"Percentage Share" means, for any Lender at any date, that percentage
which such Lender's Warehousing Commitment Amount bears to the
Warehousing Credit Limit or Term Loan Commitment Amount bears to the
Term Loan Credit Limit, as the case may be.
"Person" means and includes natural persons, corporations, limited
liability companies, limited liability partnerships, limited
partnerships, general partnerships, joint stock companies, joint
ventures, associations, companies, trusts, banks, trust companies, land
trusts, business trusts or other organizations, whether or not legal
entities, and governments and agencies and political subdivisions of
those governments.
"Plan" means each employee benefit plan (whether in existence on the
Closing Date of this Agreement or established after that date), as that
term is defined in Section 3 of ERISA, maintained for the benefit of
directors, officers or employees of Borrowers or any ERISA Affiliate.
"Pledged Assets" means, collectively, Pledged Loans, Pledged Securities
and Other Eligible Assets.
"Pledged Hedging Accounts" has the meaning set forth in Section 4.1 (k).
"Pledged Hedging Arrangements" has the meaning set forth in Section 4.1
(k).
"Pledged Loans" has the meaning set forth in Section 4.1(b).
"Pledged Securities" has the meaning set forth in Section 4.1(c).
"Pledged Servicing Acquisition/Disposition Agreements" has the meaning
set forth in Section 4.1 (g).
"Pledged Servicing Contracts" has the meaning set forth in Section
4.1(e).
"Pledged Servicing Payments" has the meaning set forth in Section
4.1(f).
"Prime Mortgage Loan" has the meaning set forth in Exhibit H.
"Prohibited Transaction" has the meanings set forth for such term in
Section 4975 of the Internal Revenue Code and Section 406 of ERISA.
"Purchase Commitment" means a written commitment, in form and substance
satisfactory to Credit Agent, issued in favor of any Borrower by an
Investor under which that Investor commits to purchase Mortgage Loans or
Mortgage-backed Securities.
"Rating Agency" means any nationally recognized statistical rating
organization that in the ordinary course of its business rates
Mortgage-backed Securities.
"Receivables" has the meaning set forth in Section 4.1(h).
"Release Amount" has the meaning set forth in Section 4.3(f).
"REO Property" has the meaning set forth on Exhibit H.
"Repurchased Maturing Mortgage Loan" has the meaning set forth in
Exhibit H.
"Restriction List" and "Restriction Lists" means each and every list of
Persons to whom the Government of the United States prohibits or
otherwise restricts the provision of financial services. For the
purposes of this Agreement, Restriction Lists include the list of
Specifically Designated Nationals and Blocked Persons established
pursuant to Executive Order 13224 (September 23, 2001) and maintained by
the Office of Foreign Assets Control, U.S. Department of the Treasury,
current as of the day the Restriction List is used for purposes of
comparison in accordance with the requirements of this Agreement.
"RFC Mortgage Loan" means a Mortgage Loan covered by a Purchase
Commitment issued by RFC.
"RFConnects Delivery" means RFC's proprietary service to support the
electronic exchange of information between Credit Agent and Borrowers,
including Warehousing Advance Requests, shipping requests, payoff
requests, wire transfer instructions, security delivery instructions,
activity reports and exception reports.
"Second Mortgage" means a Mortgage that constitutes a second Lien on the
real property and improvements described in or covered by that Mortgage.
"Second Mortgage Loan" means a Mortgage Loan secured by a Second
Mortgage.
"Security Agreement" means a security agreement or other agreement that
creates a Lien on personal property, including furniture, fixtures and
equipment, to secure repayment of a Mortgage Loan.
"Servicing Acquisition" means a transaction in which a Borrower acquires
▇▇▇▇▇▇ Mae DUS Servicing Contracts or ▇▇▇▇▇▇ ▇▇▇ Servicing Contracts in
a bulk purchase.
"Servicing Acquisition Documents" means, with respect to any Servicing
Acquisition, the Servicing Purchase Agreement and all agreements,
documents and instruments executed and delivered in connection with the
Servicing Acquisition.
"Servicing Collateral" means the Collateral described in Sections 4.1(e)
and 4.1(f) and all Collateral described in Sections 4.1(h), 4.1(i),
4.1(j) and 4.1(l) that constitutes proceeds of or is related to that
Collateral.
"Servicing Collateral Value" means, as of any date of determination, 65%
of the most recent Appraisal Value of the Servicing Contracts included
in the Eligible Servicing Portfolio, adjusted to reflect additions to
and deletions from the Eligible Servicing Portfolio since the date of
such Appraisal.
"Servicing Contract" means, with respect to any Person, the arrangement,
whether or not in writing, under which that Person has the right to
service Mortgage Loans.
"Servicing Delinquencies" means the aggregate outstanding principal
balances of Mortgage Loans included in Borrowers' Eligible Servicing
Portfolio which are 30 days or more past due (other than such as are in
the process of foreclosure).
"Servicing Foreclosures" means the aggregate outstanding principal
amount of Mortgage Loans included in Borrowers' Eligible Servicing
Portfolio which are in the process of foreclosure.
"Servicing Portfolio" means, as to any Person, the unpaid principal
balance of Mortgage Loans serviced by that Person under Servicing
Contracts, minus the principal balance of all Mortgage Loans that are
serviced by that Person for others under subservicing arrangements.
"Servicing Portfolio Report" has the meaning set forth in Section
7.3(a).
"Servicing Purchase Agreement" means the principal agreement or
agreements pursuant to which Borrowers make any Servicing Acquisition.
"Single Family Mortgage Loan" means a Mortgage Loan secured by a
Mortgage on improved real property on which is located a 1-to-4 family
residence.
"Standard Warehouse Period" means, for any Mortgage Loan or Other
Eligible Asset, the maximum number of days a Warehousing Advance against
that type of Mortgage Loan or Other Eligible Asset, other than against
an Aged Mortgage Loan, may remain outstanding, as set forth in Exhibit
H.
"Statement Date" means the Audited Statement Date or the Interim
Statement Date, as applicable.
"Sublimit" means the aggregate amount of Warehousing Advances (expressed
as a dollar amount or as a percentage of the Warehousing Commitment
Amount) that is permitted to be outstanding at any one time against a
specific type of Eligible Loan or Other Eligible Asset.
"Sublimit Note" has the meaning set forth in Section 1.6.
"Subordinated Debt" means (a) all indebtedness of Borrowers for borrowed
money that is effectively subordinated in right of payment to all
present and future Obligations either (1) under a Subordination of Debt
Agreement on the form prescribed by Credit Agent or (2) otherwise on
terms acceptable to Credit Agent, and (b) solely for purposes of Section
8.5, all indebtedness of Borrowers that is required to be subordinated
by Sections 5.1(b) and 7.11.
"Subprime Mortgage Loan" has the meaning set forth in Exhibit H.
"Subsidiary" means any corporation, partnership, association or other
business entity in which more than 50% of the shares of stock or other
ownership interests having voting power for the election of directors,
managers, trustees or other Persons performing similar functions is at
the time owned or controlled by any Person either directly or indirectly
through one or more Subsidiaries of that Person.
"Swingline Advance" means an Advance made by RFC under Section 1.3.
"Swingline Facility Amount" means the maximum amount of Swingline
Advances to be made by RFC from time to time, but not to exceed
$45,000,000.
"Swingline Note" has the meaning set forth in Section 1.4.
"T&I Receivables" has the meaning set forth on Exhibit H.
"Tangible Net Worth" means the excess of a Person's (and, if applicable,
that Person's Subsidiaries, on a consolidated basis) total assets over
total liabilities as of the date of determination, each determined in
accordance with GAAP applied in a manner consistent with the most recent
audited financial statements delivered to Credit Agent under the
Existing Agreement, plus that portion of Subordinated Debt not due
within 1 year of that date. For purposes of calculating a Person's
Tangible Net Worth, advances or loans to shareholders, directors,
officers, employees or Affiliates, investments in Affiliates, assets
pledged to secure any liabilities not included in the Debt of that
Person, intangible assets, those other assets that would be deemed by
HUD to be non-acceptable in calculating adjusted net worth in accordance
with its requirements in effect as of that date, as those requirements
appear in the "Consolidated Audit Guide for Audits of HUD Programs," and
other assets Credit Agent deems unacceptable, in its sole discretion,
must be excluded from that Person's total assets.
"Term Loan Advance" means a disbursement by Credit Agent on behalf of
Lenders under the Term Loan Agreement.
"Term Loan Advance Request" has the meaning set forth in Section 2.2.
"Term Loan Commitment" means the obligation of each Lender to make a
Term Loan Advance to Borrowers under Section 1.4.
"Term Loan Commitment Amount" means, for any Lender at any date, the
dollar amount designeated as such opposite such Lender's name on Exhibit
M as its Term Loan Commitment Amount, as the same may be amended from
time to time in accordance with this Agreement.
"Term Loan Commitment Termination Date" has the meaning set forth in
Section 1.5.
"Term Loan Credit Limit" means the sum of the Term Loan Commitment
Amounts of all Lenders.
"Term Loan Maturity Date" means the earlier of: (a) 364 days after the
Term Loan Commitment Termination Date, (b) 364 days after the
Warehousing Commitment is terminated for any reason other than the
occurrence of an Event of Default, and c) the date the Term Loan
Advances become due and payable under Section 10.2.
"Term Loan Non-Usage Fee" has the meaning set forth in Section 3.5.
"Term Loan Note" has the meaning set forth in Section 1.6.
"Term Loan Usage Fee" has the meaning set forth in Section 3.5.
"Third Party Originated Loan" means a Mortgage Loan originated and
funded by a third party (other than with funds provided by Borrowers at
closing to purchase the Mortgage Loan) and subsequently purchased by
Borrowers.
"Title I Mortgage Loan" means an FHA co-insured closed-end First
Mortgage Loan or Second Mortgage Loan that is underwritten in accordance
with HUD underwriting standards for the Title I Property Improvement
Program set forth in, and that is reported for insurance under, the
Mortgage Insurance Program authorized and administered under Title I of
the National Housing Act of 1934, as amended, and the regulations
related to that statute
"Total Hard Costs" means the total of the costs and expenses listed on
the Cost Breakdown.
"Trust Receipt" means a trust receipt in a form approved by and under
which Credit Agent may deliver any document relating to the Collateral
to Borrowers for correction or completion.
"Unused Portion" has the meaning set forth in 3.5.
"Used Portion" has the meaning set forth in Section 3.5.
"Warehousing Advance" means a disbursement by Credit Agent on behalf of
Lenders under Section 1.1.
"Warehousing Advance Request" has the meaning set forth in Section 2.1.
"Warehousing Collateral Value" means, as of any date of determination,
(a) with respect to any Eligible Loan, the lesser of (1) the amount of
any Warehousing Advance made, or that could be made, against such
Eligible Loan or Other Eligible Asset under Exhibit H or (2) an amount
equal to the Advance Rate for the applicable type of Eligible Loan or
Other Eligible Asset multiplied by the Fair Market Value of such
Eligible Loan or Other Eligible Asset; (b) if Eligible Loans or Other
Eligible Assets have been exchanged for Agency Securities, the lesser of
(1) the amount of any Warehousing Advances outstanding against the
Eligible Loans or Other Eligible Assets backing the Agency Securities or
(2) an amount equal to the Advance Rates for the applicable types of
Eligible Loans or Other Eligible Assets backing the Agency Securities
multiplied by the Fair Market Value of the Agency Securities; and (c)
with respect to cash, the amount of the cash.
"Warehousing Commitment" means the obligation of each Lender to make
Warehousing Advances to Borrowers under Section 1.1.
"Warehousing Commitment Amount" means, for any Lender at any date, that
dollar amount designated as such opposite such Lender's name on Exhibit
J as its Warehousing Commitment Amount, as the same may be amended from
time to time in accordance with this Agreement.
"Warehousing Commitment Fee" has the meaning set forth in Section 3.4.
"Warehousing Credit Limit" means the sum of the Warehousing Commitment
Amounts of all Lenders.
"Warehousing Fee" has the meaning set forth in Section 3.7.
"Warehousing Maturity Date" has the meaning set forth in Section 1.2.
"Warehousing Note" has the meaning set forth in Section 1.6.
"Weighted Average Committed Purchase Price" means the weighted average
of the Committed Purchase Prices of the unfilled Purchase Commitments
(expressed as a percentage) for Mortgage Loans or Mortgage-backed
Securities of the same type, interest rate and term.
"Wet Settlement Advance" means with respect to any Warehousing Advance,
the time from the date the Warehousing Advance is made until the date of
Credit Agent's receipt of the Collateral Documents required by Article 2
and the Exhibits and documents referenced in that Article.
"Wire Disbursement Account" means a demand deposit account maintained at
the Funding Bank in Credit Agent's name for clearing wire transfers
requested by Borrowers to fund Warehousing Advances.
"Wire Fee" has the meaning set forth in Section 3.7.
13.2. Other Definitional Provisions; Terms of Construction
13.2 (a) Accounting terms not otherwise defined in this Agreement have
the meanings given to those terms under GAAP.
13.2 (b) Defined terms may be used in the singular or the plural, as the
context requires.
13.2 (c) All references to time of day mean the then applicable time in
Chicago, Illinois, unless otherwise expressly provided.
13.2 (d) References to Sections, Exhibits, Schedules and like references
are to Sections, Exhibits, Schedules and the like of this Agreement
unless otherwise expressly provided.
13.2 (e) The words "include," "includes" and "including" are deemed to
be followed by the phrase "without limitation."
13.2 (f) Unless the context in which it is used otherwise clearly
requires, the word "or" has the inclusive meaning represented by the
phrase "and/or."
13.2 (g) All incorporations by reference of provisions from other
agreements are incorporated as if such provisions were fully set forth
into this Agreement, and include all necessary definitions and related
provisions from those other agreements. All provisions from other
agreements incorporated into this Agreement by reference survive any
termination of those other agreements until the Obligations of Borrowers
under this Agreement and the Notes are irrevocably paid in full and the
Commitments are terminated.
13.2 (h) All references to the Uniform Commercial Code shall be deemed
to be references to the Uniform Commercial Code in effect on the date of
this Agreement in the applicable jurisdiction.
13.2 (i) Unless the context in which it is used otherwise clearly
requires, all references to days, weeks and months mean calendar days,
weeks and months.
End of Article 0
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first above written.
BORROWERS: COLUMBIA NATIONAL, INCORPORATED,
a Maryland corporation
By: /s/ ▇▇▇▇ ▇▇▇▇
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Its: Executive Vice President
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Columbia National, Incorporated
c/o American Home Mortgage Holdings, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Financial
Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
AMERICAN HOME MORTGAGE CORP.,
a New York corporation
By: /s/ ▇▇▇▇ ▇▇▇▇
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Its: Executive Vice President
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American Home Mortgage Corp.
c/o American Home Mortgage Holdings, Inc.
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▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Financial
Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
AMERICAN HOME MORTGAGE ACCEPTANCE, INC.,
a Maryland corporation
By: /s/ ▇▇▇▇ ▇▇▇▇
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Its: Executive Vice President
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American Home Mortgage Acceptance, Inc.
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▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇, Senior V.P./Treasurer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
CREDIT AGENT: RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Its: Director
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Residential Funding Corporation
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▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Director
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
LENDERS: RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Its: Director
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Residential Funding Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Director
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
LENDER:
COLONIAL BANK, N.A.,
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its: Senior Vice President
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Colonial Bank, N.A.
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▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
LENDER: CALYON NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Managing Director
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Managing Director
Calyon New York Branch
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
LENDER: FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Principal
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Fleet National Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
LENDER: MANUFACTURERS AND TRADERS TRUST COMPANY
By: /s/ [ILLEGIBLE]
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Its: Vice President
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MANUFACTURERS AND TRADERS TRUST COMPANY
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Code 101-745
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
LENDER: THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Its: ▇▇▇▇▇ ▇. ▇▇▇▇, Vice President
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The Bank of New York
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▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
LENDER: U.S. BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
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U.S. Bank National Association
800 Nicollet Mall
Mortgage Banking Services
BC-MN-H03B
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
LENDER: COMMERZBANK AG,
New York and Grand Cayman Branches,
except with respect to the waivers set forth
in Section 12.20 of this Agreement
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
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Commerzbank AG, New York Branch
2 World Financial Center
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
AND
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President
-----------------------------------------
Commerzbank AG, New York Branch
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. Vice
President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
LENDER:
BANK HAPOALIM B.M.,
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Its: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
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Bank Hapoalim B.M.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
AND:
By: /s/ Lewroy ▇▇▇▇▇▇▇
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Its: Lewroy ▇▇▇▇▇▇▇
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Bank Hapoalim B.M.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Facsimile: