FIFTH AMENDMENT TO FIRST AMENDED AND RESTATED WAREHOUSING CREDIT AND SECURITY
AGREEMENT
FIFTH AMENDMENT TO FIRST AMENDED AND RESTATED WAREHOUSING CREDIT AND SECURITY
AGREEMENT (this "Amendment") dated as of January 25, 2006, between MORTGAGEIT,
INC., a New York corporation ("Borrower"), and RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation ("Lender").
A. Borrower and Lender have entered into a revolving mortgage warehousing
facility with a present Warehousing Commitment Amount of $650,000,000, which is
evidenced by a Replacement Promissory Note dated September 20, 2005 (the
"Note"), and by a First Amended and Restated Warehousing Credit and Security
Agreement dated as of April 12, 2005 (as the same may have been and may be
amended or supplemented, the "Agreement").
B. Borrower has requested that Lender increase the Warehousing Commitment Amount
and amend certain other terms of the Agreement, and Lender has agreed to such
increase and those certain other amendments, subject to the terms and conditions
of this Amendment.
NOW, THEREFORE, the parties to this Amendment agree as follows:
1. Subject to Borrower's satisfaction of the conditions set forth in Section 24,
the effective date of this Amendment is December 21, 2005 ("Effective Date").
2. Unless otherwise defined in this Amendment, all capitalized terms have the
meanings given to those terms in the Agreement. Defined terms may be used in the
singular or the plural, as the context requires. The words "include," "includes"
and "including" are deemed to be followed by the phrase "without limitation."
Unless the context in which it is used otherwise clearly requires, the word "or"
has the inclusive meaning represented by the phrase "and/or." References to
Sections and Exhibits are to Sections and Exhibits of this Amendment unless
otherwise expressly provided.
3. The Table of Contents and Exhibits Page to the Agreement are amended and
restated in their entirety as set forth in the Table of Contents and Exhibits
Page attached to this Amendment.
4. Article 1 of the Agreement is amended and restated in its entirety as set
forth in Article 1 attached to this Amendment. All references in the Agreement
and other Loan Documents to Article 1 (including each and every Section in
Article 1) are deemed to refer to the new Article 1.
5. Article 3 of the Agreement is amended and restated in its entirety as set
forth in Article 3 attached to this Amendment. All references in the Agreement
and other Loan Documents to Article 3 (including each and every Section in
Article 3) are deemed to refer to the new Article 3.
6. Article 4 of the Agreement is amended and restated in its entirety as set
forth in Article 4 attached to this Amendment. All references in the Agreement
and other Loan Documents to Article 4 (including each and every Section in
Article 4) are deemed to refer to the new Article 4.
7. Article 5 of the Agreement is amended and restated in its entirety as set
forth in Article 5
attached to this Amendment. All references in the Agreement and other Loan
Documents to Article 5 (including each and every Section in Article 5) are
deemed to refer to the new Article 5.
8. Article 6 of the Agreement is amended and restated in its entirety as set
forth in Article 6 attached to this Amendment. All references in the Agreement
and other Loan Documents to Article 6 (including each and every Section in
Article 6) are deemed to refer to the new Article 6.
9. Article 7 of the Agreement is amended and restated in its entirety as set
forth in Article 7 attached to this Amendment. All references in the Agreement
and other Loan Documents to Article 7 (including each and every Section in
Article 7) are deemed to refer to the new Article 7.
10. Article 8 of the Agreement is amended and restated in its entirety as set
forth in Article 8 attached to this Amendment. All references in the Agreement
and other Loan Documents to Article 8 (including each and every Section in
Article 8) are deemed to refer to the new Article 8.
11. Article 10 of the Agreement is amended and restated in its entirety as set
forth in Article 10 attached to this Amendment. All references in the Agreement
and other Loan Documents to Article 10 (including each and every Section in
Article 10) are deemed to refer to the new Article 10.
12. Article 11 of the Agreement is amended and restated in its entirety as set
forth in Article 11 attached to this Amendment. All references in the Agreement
and other Loan Documents to Article 11 (including each and every Section in
Article 11) are deemed to refer to the new Article 11.
13. Article 12 of the Agreement is amended and restated in its entirety as set
forth in Article 12 attached to this Amendment. All references in the Agreement
and other Loan Documents to Article 12 (including each and every Section in
Article 12) are deemed to refer to the new Article 12.
14. Exhibit A to the Agreement is amended and restated in its entirety as set
forth in Exhibit A to this Amendment. All references in the Agreement and the
other Loan Documents to Exhibit A are deemed to refer to the new Exhibit A.
15. Exhibit E-1 to the Agreement is amended and restated in its entirety as set
forth in Exhibit E-1 to this Amendment. All references in the Agreement and the
other Loan Documents to Exhibit E-1 are deemed to refer to the new Exhibit E-1.
16. Exhibit E-2 to the Agreement is amended and restated in its entirety as set
forth in Exhibit E-2 to this Amendment. All references in the Agreement and the
other Loan Documents to Exhibit E-2 are deemed to refer to the new Exhibit E-2.
17. Exhibit H to the Agreement is amended and restated in its entirety as set
forth in Exhibit H to this Amendment. All references in the Agreement and the
other Loan Documents to Exhibit H are deemed to refer to the new Exhibit H.
18. Exhibit I to the Agreement is amended and restated in its entirety as set
forth in Exhibit I to this Amendment. All references in the Agreement and the
other Loan Documents to Exhibit I are deemed to refer to the new Exhibit I.
19. Exhibit B-SML is hereby added to the Agreement in the form attached to this
Amendment.
20. A Sublimit Promissory Note is hereby added to the Agreement in
the form attached to this Amendment.
21. The Payment Option Loan Rider attached to this Amendment amends, restates
and replaces your existing Creditable Mortgage Loan Rider in its entirety and
such amendment, restatement and replacement is effective as of the date
appearing in the preamble of such Payment Option Loan Rider (whether or not such
date differs from the Effective Date or the date of this Amendment).
22. Upon execution of this Amendment, Borrower must pay to Lender the pro rata
Warehousing Commitment Fee on the increased portion of the Warehousing
Commitment Amount for the time period from December 21, 2005, to December 31,
2005.
23. Section 7.2(a) of the Agreement requires the delivery of certain financial
statements of Borrower within specified time frames. Borrower failed to deliver
the required monthly interim financial statements for the months of June, July,
September and October 2005. Failure to comply with this requirement constitutes
an Event of Default pursuant to Section 10.1(b) of the Agreement.
Borrower has requested that Lender waive its rights and remedies with respect to
the above-described Event of Default. Lender agrees to waive its rights and
remedies with respect to the above-described Event of Default; provided,
however, that this waiver is limited to the specific Event of Default described
above and is not intended and will not be construed to be a waiver of any future
Default or Event of Default of Section 7.2(a) of the Agreement or any existing
or future Default or Event of Default under any other provision of the
Agreement.
BORROWER IS NOTIFIED THROUGH THIS AMENDMENT THAT LENDER REQUIRES STRICT
COMPLIANCE BY BORROWER OF ALL TERMS, CONDITIONS AND PROVISIONS OF THE AGREEMENT
AND LOAN DOCUMENTS.
The waiver of Lender under this Amendment may not be construed as establishing a
course of conduct on the part of Lender upon which Borrower may rely at any time
in the future, and Borrower expressly waives any right to assert any claim to
such effect at any time.
24. Borrower must deliver to Lender (a) two executed copies of this Amendment,
(b) the executed Sublimit Promissory Note, (c) the executed Payment Option Loan
Rider, (d) the Additional Commitment Fee, and (e) a $1,500 document production
fee.
25. Borrower represents, warrants and agrees that (a) except as stated in
Section 20 above, there exists no Default or Event of Default under the Loan
Documents, (b) the Loan Documents continue to be the legal, valid and binding
agreements and obligations of Borrower, enforceable in accordance with their
terms, as modified by this Amendment, (c) Lender is not in default under any of
the Loan Documents and Borrower has no offset or defense to its performance or
obligations under any of the Loan Documents, (d) except for changes permitted by
the terms of the Agreement, Borrower's representations and warranties contained
in the Loan Documents are true, accurate and complete in all respects as of the
Effective Date and (e) there has been no material adverse change in Borrower's
financial condition from the date of the Agreement to the Effective Date.
26. Except as expressly modified, the Agreement is unchanged and remains in full
force and effect, and Borrower ratifies and reaffirms all of its obligations
under the Agreement and the other Loan Documents.
27. This Amendment may be executed in any number of counterparts, each of which
will be deemed an original, but all of which shall together constitute but one
and the same instrument.
IN WITNESS WHEREOF, Borrower and Lender have caused this Amendment to be duly
executed on their behalf by their duly authorized officers as of the day and
year above written.
MORTGAGEIT, INC.,
a New York corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
Its: Chief Financial Officer
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: Director
TABLE OF CONTENTS
1. THE CREDIT............................................................1-1
1.1. The Warehousing Commitment............................................1-1
1.2. Expiration of Warehousing Commitment..................................1-1
1.3. Warehousing Note/Sublimit Note........................................1-1
2. PROCEDURES FOR OBTAINING ADVANCES.....................................2-1
2.1. Warehousing Advances..................................................2-1
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. Buydowns..............................................................3-4
3.5. Warehousing Commitment Fees...........................................3-5
3.6. Loan Package Fees, Wire Fees and Warehousing Fees.....................3-5
3.7. Miscellaneous Fees and Charges........................................3-5
3.8. Overdraft Advances....................................................3-6
3.9. Method of Making Payments.............................................3-6
4. COLLATERAL............................................................4-1
4.1. Grant of Security Interest ...........................................4-1
4.2. Maintenance of Collateral Records.....................................4-2
4.3. Release of Security Interest in Pledged Loans and Pledged
Securities............................................................4-2
4.4. Collection and Servicing Rights.......................................4-3
4.5. Return of Collateral at End of Warehousing Commitment.................4-4
4.6. Delivery of Collateral Documents......................................4-4
5. CONDITIONS PRECEDENT..................................................5-1
5.1. Initial Advance.......................................................5-1
5.2. Each Advance..........................................................5-2
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..........................6-1
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...................................................6-3
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 Borrower 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................................................................7-3
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
8. NEGATIVE COVENANTS....................................................8-1
8.1. Contingent Liabilities................................................8-1
8.2. Pledge of Servicing Contracts.........................................8-1
8.3. Restrictions on Fundamental Changes...................................8-1
8.4. Subsidiaries..........................................................8-1
8.5. Deferral of Subordinated Debt.........................................8-2
8.6. Loss of Eligibility, Licenses or Approvals............................8-2
8.7. Accounting Changes....................................................8-2
8.8. Minimum Tangible Net Worth............................................8-2
8.9 Distributions to Shareholders.........................................8-2
8.10 Transactions with Affiliates..........................................8-2
8.11 Leverage Ratio for Guarantor..........................................8-2
8.12 Minimum Tangible Net Worth for Guarantor..............................8-2
8.13 Minimum Modified Liquid Assets for Guarantor..........................8-3
8.14 Operating Losses for Guarantor........................................8-3
8.15 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 of Mortgage Loans...........................................9-1
9.2. Special Representations and Warranties Concerning Warehousing
Collateral............................................................9-1
9.3. Special Affirmative Covenants Concerning Warehousing Collateral.......9-3
9.4. Special Negative Covenants Concerning Warehousing Collateral..........9-4
10. DEFAULTS; REMEDIES...................................................10-1
10.1. Events of Default....................................................10-1
10.2. Remedies.............................................................10-3
10.3. Application of Proceeds..............................................10-5
10.4. Lender Appointed Attorney-in-Fact....................................10-5
10.5. Right of Set-Off.....................................................10-6
11. MISCELLANEOUS........................................................11-1
11.1. Notices..............................................................11-1
11.2. Reimbursement of Expenses; Indemnity.................................11-1
11.3. Financial Information................................................11-2
11.4. Terms Binding Upon Successors; Survival of Representations...........11-2
11.5. Assignment...........................................................11-2
11.6. Amendments...........................................................11-2
11.7. Governing Law........................................................11-3
11.8. Participations.......................................................11-3
11.9. Relationship of the Parties..........................................11-3
11.10. Severability.........................................................11-3
11.11. Consent to Credit References.........................................11-3
11.12. Counterparts.........................................................11-4
11.13. Headings/Captions....................................................11-4
11.14. Entire Agreement.....................................................11-4
11.15. Consent to Jurisdiction..............................................11-4
11.16. Waiver of Jury Trial.................................................11-4
11.17. Waiver of Punitive, Consequential, Special or Indirect Damages.......11-5
11.18. Merger of Obligations................................................11-5
11.19. Waiver of Events of Default Under Existing Agreement.................11-5
11.20. Confidentiality......................................................11-5
12. DEFINITIONS..........................................................12-1
12.1. Defined Terms........................................................12-1
12.2. Other Definitional Provisions; Terms of Construction................12-12
EXHIBITS
Exhibit A Request for Advance Against Eligible Loans
Exhibit B Procedures and Documentation for Warehousing Mortgage Loans
Exhibit B-SML Procedures and Documentation for Warehousing Seasoned Mortgage
Loans
Exhibit C Schedule of Servicing Portfolio
Exhibit D Subsidiaries
Exhibit E-1 Compliance Certificate (Borrower)
Exhibit E-2 Compliance Certificate (Guarantor)
Exhibit F Schedule of Lines of Credit
Exhibit G Assumed Names
Exhibit H Eligible Loans and Other Assets
Exhibit I Schedule of Miscellaneous Fees
Exhibit J Commitment Summary Report
FIRST AMENDED AND RESTATED WAREHOUSING CREDIT AND SECURITY AGREEMENT
FIRST AMENDED AND RESTATED WAREHOUSING CREDIT AND SECURITY AGREEMENT, dated as
of April 12, 2005 between MORTGAGEIT, INC., a New York corporation ("Borrower"),
and RESIDENTIAL FUNDING CORPORATION, a Delaware corporation ("Lender").
A. Borrower and Lender desire to amend and restate the Existing Agreement
(defined below) and to set forth herein the terms and conditions upon which
Lender will continue to provide financing to Borrower.
B. Subject to Borrower's satisfaction of the conditions set forth in Article 5,
the "Closing Date" for the transactions contemplated by this Agreement is the
date set forth as the Closing Date on the signature page to this Agreement.
NOW, THEREFORE, the parties to this Agreement agree as follows:
1. THE CREDIT
1.1. THE WAREHOUSING COMMITMENT
On the terms and subject to the conditions and limitations of this Agreement,
including Exhibit H, Lender agrees to make Warehousing Advances to Borrower from
the Closing Date to the Business Day immediately preceding the Warehousing
Maturity Date, during which period Borrower may borrow, repay and reborrow in
accordance with the provisions of this Agreement. Lender has no obligation to
make Warehousing Advances in an aggregate amount outstanding at any time in
excess of the lesser of (a) the Warehousing Commitment Amount, or (b) the
Aggregate Warehousing Collateral Value. While a Default or Event of Default
exists, Lender may refuse to make any additional Warehousing Advances to
Borrower. Effective as of the Closing Date, all outstanding loans made under the
Existing Agreement are deemed to be the initial Warehousing Advances made under
this Agreement. All Warehousing Advances under this Agreement constitute a
single indebtedness, and all of the Collateral is security for the Notes 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) June 30, 2006, as such date may be extended in writing by Lender, in
its sole discretion, on which date the Warehousing Commitment will expire of its
own term and the Warehousing Advances will become due and payable without the
necessity of Notice or action by Lender; and (b) the date the Warehousing
Commitment is terminated and the Warehousing Advances become due and payable
under Section 10.2.
1.3. WAREHOUSING NOTE/SUBLIMIT NOTE
Warehousing Advances, other than Warehousing Advances made against Seasoned
Mortgage Loans, are evidenced by Borrower's promissory note, payable to Lender
on the form prescribed by Lender ("Warehousing Note"). Warehousing Advances made
against Seasoned Mortgage Loans are evidenced by Borrower's sublimit promissory
note, payable to Lender on the form prescribed by Lender ("Sublimit Note").
Warehousing Note and Sublimit Note are collectively referred to as, "Notes." The
terms "Warehousing Note" and "Sublimit Note" as used in this Agreement includes
all amendments, restatements, renewals or replacements of the original
Warehousing Note and Sublimit Note and all substitutions for them. All terms and
provisions of the Warehousing Note and the Sublimit Note are incorporated into
this Agreement.
END OF ARTICLE 1
3. INTEREST, PRINCIPAL AND FEES
3.1. INTEREST
3.1 (a) Except as otherwise provided in this Section, Borrower must pay interest
on the unpaid amount of each Warehousing Advance from the date the Warehousing
Advance is made until it is paid in full at the Interest Rate specified in
Exhibit H.
3.1 (b) As long as no Default or Event of Default exists, Borrower is entitled
to receive a benefit in the form of an "Earnings Credit" on the portion of the
Eligible Balances maintained in time deposit accounts with a Designated Bank,
and Borrower is entitled to receive a benefit in the form of an "Earnings
Allowance" on the portion of the Eligible Balances maintained in demand deposit
accounts with a Designated Bank. Any Earnings Allowance will be used first and
any Earnings Credit will be used second as a credit against Miscellaneous Fees
and Charges (including Designated Bank Charges), Warehousing Commitment Fees,
Loan Package Fees, Wire Fees, Warehousing Fees and any other fees payable under
this Agreement, and may be used, at Lender's option, to reduce accrued interest.
Any Earnings Allowance not used during the month in which the benefit was
received will be accumulated and must be used within 6 months of the month in
which the benefit was received. As long as no Default or Event of Default
exists, any Earnings Credit not used during the month in which the benefit was
received will be used to provide a cash benefit to Borrower. Any Earnings Credit
retained by Lender as a result of a Default or Event of Default will be applied
to the payment of Borrower's Obligations in the order Lender determines in its
sole discretion. The Earnings Credit and the Earnings Allowance for any month
will be determined by Lender in its sole discretion and Lender's determination
of those amounts is conclusive and binding absent manifest error. In no event
will the benefit received by Borrower under this Section exceed the Depository
Benefit.
Either party to this Agreement may terminate the benefits provided for in this
Section effective immediately upon Notice to the other party, if the terminating
party determines (which determination is conclusive and binding on the other
party, absent manifest error) at any time that any applicable law, rule,
regulation, order or decree or any interpretation or administration of such law,
rule, regulation, order or decree by any governmental authority charged with its
interpretation or administration, or compliance by such party with any request
or directive (whether or not having the force of law) of any such authority,
makes it unlawful or impossible for the party sending the Notice to continue to
offer or receive the benefits provided for in this Section. No Notice is
required to terminate the benefit provided for in this Section as a result of a
Default or Event of Default.
3.1 (c) Lender computes interest on the basis of the actual number of days in
each month and a year of 360 days. Borrower must pay interest monthly in
arrears, not later than 9 days after the date of Lender's invoice or, if
applicable, 2 days after the date of Lender's account analysis statement,
commencing with the first month following the Closing Date and on the
Warehousing Maturity Date.
3.1 (d) If, for any reason Borrower repays a Warehousing Advance on the same day
that it was made by Lender, Borrower must pay Lender an administrative fee equal
to 1 day of interest on that Warehousing Advance at the Interest Rate that would
otherwise have been applicable under Exhibit H. Borrower must pay all
administrative fees within 9 days after the date of Lender's invoice or, if
applicable, within 2 days after the date of Lender's account analysis statement.
3.1 (e) After an Event of Default occurs and upon Notice to Borrower by Lender,
the unpaid amount of each Warehousing Advance will bear interest at the Default
Rate until paid in full.
3.1 (f) Lender will adjust the rates of interest provided for in this Agreement
as of the effective date of each change in the applicable index. Lender's
determination of such rates of interest as of any date of determination is
conclusive and binding, absent manifest error.
3.2. INTEREST LIMITATION
Lender does 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 Lender
receives 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, Lender will apply the excess to the unpaid principal balance of
the Warehousing Advances and not to the payment of interest. If all Warehousing
Advances have been paid in full and the Warehousing Commitment has expired or
has been terminated, Lender will remit any excess to Borrower. This Section
controls every other provision of all agreements between Borrower and Lender and
is binding upon and available to any subsequent holder of the Notes.
3.3. PRINCIPAL PAYMENTS
3.3 (a) Borrower must pay Lender the outstanding principal amount of all
Warehousing Advances on the Warehousing Maturity Date.
3.3 (b) Except as otherwise provided in Section 3.1, Borrower may prepay any
portion of the Warehousing Advances without premium or penalty at any time
pursuant to Section 3.4 or Section 4.3(d). If at any time the Warehousing
Advances outstanding under this Agreement exceed the lesser of (i) the
Warehousing Commitment Amount or (ii) the Aggregate Warehousing Collateral
Value, Borrower must immediately pay to Lender without the necessity of prior
demand or Notice from Lender, and Borrower authorizes Lender to cause the
Funding Bank to charge Borrower's Operating Account for, the amount of such
excess.
3.3 (c) Borrower must pay to Lender, without the necessity of prior demand or
Notice from Lender, and Borrower authorizes Lender to cause the Funding Bank to
charge Borrower's 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) One (1) Business Day elapses from the date a Warehousing Advance was made if
the Pledged Loan to be funded by that Warehousing Advance has not closed and
funded.
(2) Ten (10) Business Days elapse without the return of a Collateral Document
delivered by Lender to 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 Borrower had knowledge of the misrepresentation,
incomplete or inaccurate information or fraud, or on the date on which Borrower
knows, or has reason to know, or receives Notice from Lender, 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 became inaccurate or incomplete after any such date with respect to such
Pledged Loan or (B) Borrower has failed to perform or comply with any covenant,
term or condition set forth in Article 9 with respect to such Pledged Loan.
(4) On the date on which a Pledged Loan or a Lien prior to the Mortgage securing
repayment of the Pledged Loan has been in default for a period of 60 days or
more.
(5) 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.
(6) 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.
(7) One (1) Business Day immediately preceding the date scheduled for the
foreclosure or trustee sale of the real property and improvements securing a
Pledged Loan.
3.3 (d) Upon telephonic or written Notice to Borrower by Lender, Borrower must
pay to Lender, and Borrower authorizes Lender to cause the Funding Bank to
charge Borrower's 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 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 Lender of all Collateral
Documents relating to the Pledged Loan.
(4) With respect to any Pledged Loan, any of the Collateral Documents, upon
examination by Lender, are found not to be in compliance with the requirements
of this Agreement or the related Purchase Commitment (if a Purchase Commitment
is required by Exhibit H).
(5) If, after giving effect to a new Warehousing Advance against a Pledged Loan
or to the payment of existing Warehousing Advances against Pledged Loans, any of
the limitations set forth in Exhibit H have been exceeded.
(6) 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.
3.3 (e) In addition to the payments required by Sections 3.3(a), 3.3(c) and
3.3 (d), if the principal amount of any Pledged Loan is prepaid in whole or in
part while a Warehousing Advance is outstanding against the Pledged Loan,
Borrower must pay to Lender, without the necessity of prior demand or Notice
from Lender, and Borrower authorizes Lender to cause the Funding Bank to charge
Borrower's Operating Account for, the amount of the prepayment, to be applied
against the Warehousing Advance.
3.3 (f) The proceeds of the sale or other disposition of Pledged Assets must be
paid directly by the Investor to the Cash Collateral Account. Borrower must give
Notice to Lender in writing, by RFConnects Delivery or by telephone (and if by
telephone, followed promptly by written Notice) of the Pledged Assets for which
proceeds have been received. Upon receipt of Borrower's Notice, Lender will
apply any proceeds deposited into the Cash Collateral Account to the payment of
the Warehousing Advances related to the Pledged Assets identified by Borrower in
its Notice, and those Pledged Assets will be considered to have been redeemed
from pledge. Lender is entitled to rely upon Borrower's affirmation that
deposits in the Cash Collateral Account represent payments from Investors for
the purchase of the Pledged Assets specified by Borrower in its Notice. If the
payment from an Investor for the purchase of Pledged Assets is less than the
outstanding Warehousing Advances against the Pledged Assets identified by
Borrower in its Notice, Borrower must pay to Lender, and Borrower authorizes
Lender to cause the Funding Bank to charge Borrower's Operating Account for, an
amount equal to that deficiency. As long as no Default or Event of Default
exists, Lender will return to Borrower any excess payment from an Investor for
Pledged Assets.
3.3 (g) Lender reserves the right to revalue any Pledged Loan or Pledged
Security. Borrower must pay to Lender, without the necessity of prior demand or
Notice from Lender, and Borrower authorizes Lender to cause the Funding Bank to
charge Borrower's 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 or Pledged Security to an amount
equal to the Advance Rate for the applicable type of Pledged Loan or Pledged
Security multiplied by the Fair Market Value of the Pledged Loan or Pledged
Security.
3.4. BUYDOWNS
Borrower may prepay a portion of the Warehousing Advances outstanding under this
Agreement (individually "Buydown" and collectively "Buydowns") upon Notice to
Lender not later than (a) 1:00 p.m. on the Business Day immediately preceding
the Business Day on which Borrower desires to make a Buydown in the amount of
$10,000,000 or more or (b) 1:00 p.m. on the Business Day on which Borrower
desires to make a Buydown in an amount less than $10,000,000. Each Buydown must
be in an amount not less than $5,000, and Borrower may not make Buydowns that
exceed the aggregate principal balance of all Warehousing Advances outstanding
under this Agreement. A Buydown is a reduction in the aggregate amount of the
Warehousing Advances outstanding under this Agreement, but does not represent
the prepayment of any particular Warehousing Advance for the purposes of any
Pledged Assets specifically related to such Warehousing Advances, and does not
entitle Borrower to the release of any Collateral, including Collateral
consisting of the proceeds of Pledged Assets described in Sections 3.3(e) or
3.3(f). To reduce interest payable by Borrower, Lender may apply Buydowns to
Warehousing Advances outstanding under this Agreement in any order determined by
Lender in its sole discretion. Subject to the satisfaction of the conditions set
forth in Sections 5.2(d) and 5.2(e) (which apply as if the requested reborrowing
were a Warehousing Advance), Borrower may, from the Closing Date to the Business
Day immediately preceding the Warehousing Maturity Date, reborrow all or any
portion of the Buydowns upon Notice to Lender not later than (m) 1:00 p.m. on
the Business Day immediately preceding the Business Day on which Borrower
desires to reborrow $10,000,000 or more or (n) 1:00 p.m. on the Business Day
that Borrower desires to reborrow an amount less than $10,000,000. If Lender
receives Buydowns or a combination of Buydowns and payments of Warehousing
Advances that exceed the aggregate principal balance of the Warehousing Advances
outstanding under this Agreement ("Excess Buydown"), as long as no Default or
Event of Default exists, Borrower may request that Lender return all or any
portion of an Excess Buydown upon Notice to Lender not later than (y) 1:00 p.m.
on the Business Day immediately preceding the Business Day on which Borrower
requests the return of $10,000,000 or more or (z) 1:00 p.m. on the Business Day
that Borrower requests the return of less than $10,000,000. Alternatively,
Lender may, in its sole discretion, return to Borrower all or any portion of an
Excess Buydown by causing the Funding Bank to credit the Operating Account in
that amount. Lender has no obligation to pay or provide to Borrower any
interest, dividends or other benefits on an Excess Buydown.
3.5. WAREHOUSING COMMITMENT FEES
Borrower must pay Lender a fee ("Warehousing Commitment Fee") in the amount set
forth in Exhibit I. The Warehousing Commitment Fee is payable quarterly in
advance. On the Closing Date, Borrower 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, Borrower must pay the
Warehousing Commitment Fee within 9 days after the date of Lender's invoice or,
if applicable, within 2 days after the date of Lender's account analysis
statement. 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,
Borrower 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. Borrower is not entitled to a reduction in the amount of the Warehousing
Commitment Fee if (a) the Warehousing Commitment Amount is reduced or (b) the
Warehousing Commitment is terminated at the request of Borrower or as a result
of an Event of Default. If the Warehousing Commitment terminates at the request
of Borrower or as a result of an Event of Default, Borrower must pay, on the
date of termination, a Warehousing Commitment Fee on the Warehousing Commitment
Amount 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.
Lender's determination of the Warehousing Commitment Fee for any period is
conclusive and binding, absent manifest error.
3.6. LOAN PACKAGE FEES, WIRE FEES AND WAREHOUSING FEES
At the time of each Warehousing Advance against an Eligible Loan, Borrower will
incur a loan package fee ("Loan Package Fee") and a wire fee ("Wire Fee"). Loan
Package Fees and Wire Fees may, at Lender's discretion, be billed separately or
combined into a single warehousing fee ("Warehousing Fee"). Borrower must pay
all Loan Package Fees, Wire Fees or Warehousing
Fees in the amount set forth in Exhibit I within 9 days after the date of
Lender's invoice or, if applicable, within 2 days after the date of Lender's
account analysis statement.
3.7. MISCELLANEOUS FEES AND CHARGES
Borrower must reimburse Lender for all Miscellaneous Fees and Charges. Borrower
must pay all Miscellaneous Fees and Charges within 9 days after the date of
Lender's invoice or, if applicable, within 2 days after the date of Lender's
account analysis statement.
3.8. OVERDRAFT ADVANCES
If, under the authorization given by Borrower in the Funding Bank Agreement or
pursuant to this Agreement, Lender debits Borrower's Operating Account or
directs the Funding Bank to honor an item presented against the Operating
Account or against the Check Disbursement Account, and that debit or direction
results in an overdraft, Lender may make an additional advance to fund that
overdraft ("Overdraft Advance"). Borrower must pay (a) the outstanding amount of
any Overdraft Advance, within 1 Business Day after the date of the Overdraft
Advance, and (b) interest on the amount of the Overdraft Advance, at a rate per
annum equal to the JPMorgan Chase Prime Rate plus 2%, within 9 days after the
date of Lender's invoice or, if applicable, within 2 days after the date of
Lender's account analysis statement.
3.9. METHOD OF MAKING PAYMENTS
3.9 (a) Unless otherwise specified in this Agreement, Borrower must make all
payments under this Agreement to Lender by the close of business on the date
when due unless the date is not a Business Day. If the due date is not a
Business Day, payment is due on, and interest will accrue to, the next Business
Day. Borrower must make all payments in United States dollars in immediately
available funds transferred by wire transfer to accounts designated by Lender.
3.9 (b) Borrower authorizes Lender to cause the Funding Bank to charge
Borrower's Operating Account for any interest or fees due and payable to Lender
on or after the 9th day after the date of Lender's invoice or, if applicable, on
or after the 2nd day after the date of Lender's account analysis statement,
without the necessity of prior demand or Notice from Lender.
3.9 (c) While a Default or Event of Default exists, Borrower authorizes Lender
to cause the Funding Bank to charge Borrower's Operating Account for any
Obligations due and payable to Lender, without the necessity of prior demand or
Notice from Lender.
END OF ARTICLE 3
4. COLLATERAL
4.1. GRANT OF SECURITY INTEREST
As security for the payment of the Notes and for the performance of all of
Borrower's Obligations, Borrower grants a security interest to Lender in all of
Borrower's right, title and interest in and to the following described property,
whether now owned or whether acquired or arising after the date of this
Agreement ("Collateral"):
4.1 (a) All amounts advanced by Lender to or for the account of Borrower 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 Lender (including delivery to a third party on behalf
of Lender), or that otherwise come into the possession, custody or control of
Lender (including the possession, custody or control of a third party on behalf
of Lender), in each case for the purpose of pledge or in respect of which Lender
has made Warehousing Advances 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
Lender (including delivery to a third party on behalf of Lender), or that
otherwise come into the possession, custody or control of Lender (including the
possession, custody or control of a third party on behalf of Lender) or that are
registered by book-entry in the name of Lender (including registration in the
name of a third party on behalf of Lender), in each case for the purpose of
pledge, or in respect of which a Warehousing Advance has been made by Lender
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 Pledged Loan; all Purchase Commitments held by
Borrower 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 Borrower 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 and private mortgage insurance and commitments, and all other
documents or instruments relating to Pledged Loans and Pledged Securities,
including any interest of Borrower in any fire, casualty or hazard insurance
policies and any awards made by any public body or decreed by any court of
competent jurisdiction for a taking or for degradation of value in any eminent
domain proceeding as the same relate to Pledged Loans.
4.1 (e) 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 Borrower relating
to the Collateral.
4.1 (f) All cash, whether now existing or acquired after the date of this
Agreement, delivered to or otherwise in the possession of Lender, the Funding
Bank or Lender's agent, bailee or custodian or designated on the books and
records of Borrower as assigned and pledged to Lender, including all cash
deposited in the Cash Collateral Account and the Check Disbursement Account and
the Wire Disbursement Account.
4.1 (g) All Hedging Arrangements related to the Collateral ("Pledged Hedging
Arrangements") and Borrower's accounts in which those Hedging Arrangements are
held ("Pledged Hedging Accounts"), including all rights to payment arising under
the Pledged Hedging Arrangements and the Pledged Hedging Accounts, except that
Lender'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 (h) 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 Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed under this Agreement or under any other Loan
Document, Borrower must preserve and maintain, at its chief executive office and
principal place of business or in a regional office approved by Lender, or in
the office of a computer service bureau engaged by Borrower and approved by
Lender and, upon request, make available to Lender the originals, or copies in
any case where the originals have been delivered to Lender or to an Investor, of
the Mortgage Notes, Mortgages and Security Agreements included in Pledged Loans,
Mortgage-backed Securities delivered to Lender as Pledged Securities, Purchase
Commitments, and all related Mortgage Loan documents and instruments, and all
files, surveys, certificates, correspondence, appraisals, computer programs,
tapes, discs, cards, accounting records and other information and data relating
to the Collateral.
4.3. RELEASE OF SECURITY INTEREST IN PLEDGED LOANS AND PLEDGED SECURITIES
4.3 (a) Except as provided in Section 4.3(b), Lender will release its security
interest in the Pledged Loans only against payment to Lender 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 Lender'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, Lender's security
interest continues in the Pledged Loans backing that Pledged Security and Lender
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, Lender's security interest in the Pledged Loans
included in the Eligible Mortgage Pool will be released upon the delivery of the
Agency Security to Lender (including delivery to or registration in the name of
a third party on behalf of Lender) and that Agency Security is a Pledged
Security. Lender's security interest in that Pledged Security will be released
only against payment to Lender of the Release Amount in connection with the
Mortgage Loans backing that Pledged Security.
4.3 (c) Lender 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, Lender 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 Lender. Lender 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. Borrower acknowledges that Lender 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
Borrower agrees, upon request of Lender, to execute and deliver to those
securities intermediaries Borrower's written concurrence in any such standing
arrangements.
4.3 (d) As long as no Default or Event of Default exists or would occur as a
result, Borrower may redeem a Pledged Loan or Pledged Security from Lender's
security interest by notifying Lender of its intention to redeem the Pledged
Loan or Pledged Security from pledge and either (1) paying, or causing an
Investor to pay, to Lender, for application as a prepayment on the principal
balance of the Notes, 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
Lender in its sole discretion, will, when included with the remaining Collateral
included in the calculation of Aggregate Warehousing Collateral Value, result in
an Aggregate Warehousing Collateral Value that is at least equal to the
aggregate outstanding Warehousing Advances.
4.3 (e) After a Default or Event of Default occurs, Lender may, with no
liability to Borrower 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 Borrower to obtain the release of Lender's
security interest in a Pledged Loan ("Release Amount") will be (1) in connection
with the sale of a Pledged Loan by Borrower, the payment required in any bailee
letter pursuant to which Lender 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 Lender while an Event of Default exists, the amount paid to
Lender 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. COLLECTION AND SERVICING RIGHTS
4.4 (a) If no Event of Default exists, Borrower may service and receive and
collect directly all sums payable to Borrower 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.
4.4 (b) After an Event of Default, Lender or its designee is entitled to service
and receive and collect all sums payable to Borrower in respect of the
Collateral, and in such case (1) Lender or its designee in its discretion may,
in its own name, in the name of Borrower or otherwise, demand, ▇▇▇ for, collect
or receive any money or property at any time payable or receivable on account of
or in exchange for any of the Collateral, but Lender has no obligation to do so,
(2) Borrower must, if Lender requests it to do so, hold in trust for the benefit
of Lender and immediately pay to Lender at its office designated by Notice, all
amounts received by Borrower upon or in respect of any of the Collateral,
advising Lender as to the source of those funds and (3) all amounts so received
and collected by Lender will be held by it as part of the Collateral and applied
by Lender as provided in this Agreement.
4.5. RETURN OF COLLATERAL AT END OF WAREHOUSING COMMITMENT
If (a) the Warehousing Commitment has expired or been terminated and (b) no
Warehousing Advances, interest or other Obligations are outstanding and unpaid,
Lender will release its security interest and will deliver all Collateral in its
possession to Borrower at Borrower's expense. Borrower's acknowledgement or
receipt for any Collateral released or delivered to Borrower under any provision
of this Agreement is a complete and full acquittance for the Collateral so
returned, and Lender is discharged from any liability or responsibility for that
Collateral.
4.6. DELIVERY OF COLLATERAL DOCUMENTS
4.6 (a) Lender may deliver documents relating to the Collateral to Borrower for
correction or completion under a Trust Receipt.
4.6 (b) If no Default or Event of Default exists, upon delivery by Borrower to
Lender of shipping instructions pursuant to the applicable Exhibit B, Lender
will deliver the Mortgage Notes evidencing Pledged Loans or Pledged Securities
together with all related loan documents and pool documents previously received
by Lender under the requirements of the applicable Exhibit B, to the designated
Investor or Approved Custodian or to another party designated by Borrower and
acceptable to Lender in its sole discretion. 4.6 (c) If a Default or Event of
Default exists, Lender may, without liability to Borrower or any other Person,
continue to deliver Pledged Loans or Pledged Securities, together with all
related loan documents and pool documents in Lender's possession, to the
applicable Investor or Approved Custodian or to another party acceptable to
Lender in its sole discretion.
END OF ARTICLE 4
5. CONDITIONS PRECEDENT
5.1. INITIAL ADVANCE
Lender's obligation to make the initial Warehousing Advance, is subject to the
satisfaction, in the sole discretion of Lender, of the following conditions
precedent:
5.1 (a) Lender must receive the following, all of which must be satisfactory in
form and content to Lender, in its sole discretion:
(1) The Notes and this Agreement duly executed by Borrower.
(2) A certificate of Borrower stating that there has been no change in either
Borrower's articles or certificate of incorporation or bylaws since those
delivered in connection with the Existing Agreement.
(3) Certificates of good standing dated within 60 days of the date of this
Agreement, together with a certification from the Franchise Tax Board or other
state tax authority stating that Borrower is in good standing with the Franchise
Tax Board or such state tax authority, if applicable.
(4) A resolution of the board of directors of Borrower authorizing the
execution, delivery and performance of this Agreement and the other Loan
Documents, each Warehousing Advance Request and all other agreements,
instruments or documents to be delivered by Borrower under this Agreement.
(5) A certificate as to the incumbency and authenticity of the signatures of the
officers of Borrower executing this Agreement and the other Loan Documents.
(6) Assumed Name Certificates dated within 60 days of the date of this Agreement
for any assumed name used by Borrower in the conduct of its business.
(7) The Guaranty, on the form prescribed by Lender, duly executed by the
Guarantor.
(8) The Guarantor's articles or certificate of incorporation, together with all
amendments, as certified by the Secretary of State of Maryland, bylaws certified
by the corporate secretary of the Guarantor and certificates of good standing
dated within 60 days of the date of this Agreement.
(9) A resolution of the board of directors of the Guarantor, certified as of the
date of the 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 the Guarantor under this Agreement.
(10) A certificate as to the incumbency and authenticity of the signatures of
the officers of the Guarantor executing the Guaranty and all other agreements,
instruments or documents to be delivered by Guarantor under this Agreement.
(11) Uniform Commercial Code, tax lien and judgment searches of the appropriate
public records for Borrower that do not disclose the existence of any Lien on
the Collateral other than in favor of Lender or as permitted under this
Agreement.
(12) Copies of 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 Borrower as of the date
of this Agreement with the provisions of Section 7.9.
(13) Receipt by Lender of any fees due on the date of this Agreement.
(14) One or more agreements among Borrower, Lender and ▇▇▇▇▇▇ Mae in which
▇▇▇▇▇▇ ▇▇▇ agrees to send all cash proceeds of Mortgage Loans sold by Borrower
to ▇▇▇▇▇▇ Mae to the Cash Collateral Account, each in form and substance
satisfactory to Lender.
5.1 (b) If, as of the date of this Agreement, Borrower has any indebtedness for
borrowed money to any of its directors, officers, shareholders or Affiliates, or
to any Guarantor, which indebtedness has a term of more than 1 year or is in
excess of $25,000, the Person to whom Borrower is indebted must have executed a
Subordination of Debt Agreement, on the form prescribed by Lender; and Lender
must have received an executed copy of that Subordination of Debt Agreement,
certified by the corporate secretary of Borrower to be true and complete and in
full force and effect as of the date of the Warehousing Advance.
5.1 (c) Borrower 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
Lender's obligation to make the initial and each subsequent Warehousing Advance
is subject to the satisfaction, in the sole discretion of Lender, as of the date
of each Warehousing Advance, of the following additional conditions precedent:
5.2 (a) Borrower must have delivered to Lender the Warehousing Advance Request
and Collateral Documents required by, and must have satisfied the procedures and
substantive requirements set forth in, Article 2 and the Exhibits described in
that Article. All items delivered to Lender must be satisfactory to Lender in
form and content, and Lender may reject any item that does not satisfy the
requirements of this Agreement or any applicable Purchase Commitment.
5.2 (b) Lender must have received evidence satisfactory to it as to the making
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 Lender in the Collateral under the Uniform
Commercial Code or other applicable law.
5.2 (c) The representations and warranties of Borrower contained in Article 6
and Article 9 must be accurate and complete in all material respects as if made
on and as of the date of each Warehousing Advance.
5.2 (d) Borrower must have performed all agreements to be performed by it under
this Agreement, and after giving effect to the requested Warehousing Advance, no
Default or Event of Default will exist under this Agreement.
5.2 (e) After giving effect to the requested Warehousing Advance, the
Warehousing Advances outstanding under this Agreement will not exceed the lesser
of (i) the Warehousing Commitment Amount or (ii) the Aggregate Warehousing
Collateral Value.
5.2 (f) The Guarantor must have performed all agreements to be performed by the
Guarantor under the Guaranty. Delivery of a Warehousing Advance Request by
Borrower will be deemed a representation by Borrower that all conditions set
forth in this Section have been satisfied as of the date of the Warehousing
Advance.
5.3. FORCE MAJEURE
Notwithstanding Borrower's satisfaction of the conditions set forth in this
Agreement, Lender has no obligation to make a Warehousing Advance if Lender is
prevented from obtaining the funds necessary to make a Warehousing Advance, or
is otherwise prevented from making a Warehousing Advance as a result of any
fire, flood 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
Lender. Lender will make the requested Warehousing Advance as soon as reasonably
possible following the occurrence of such an event.
END OF ARTICLE 5
6. GENERAL REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender, as of the date of this Agreement and
as of the date of each Warehousing Advance Request and the making of each
Warehousing Advance, that:
6.1. PLACE OF BUSINESS
Borrower's chief executive office and principal place of business is ▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇.
6.2. ORGANIZATION; GOOD STANDING; SUBSIDIARIES
Borrower is a corporation duly organized, validly existing and in good standing
under the laws of the State of New York, and has the full legal power and
authority to own its property and to carry on its business as currently
conducted. 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 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 Borrower transacts business. Borrower has 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 Borrower. Each of Borrower's 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
Borrower has the power and authority to execute, deliver and perform this
Agreement, the Notes and the other Loan Documents to which Borrower is a party
and to make the borrowings under this Agreement. The execution, delivery and
performance by Borrower of this Agreement, the Notes and the other Loan
Documents to which Borrower 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 Borrower (none of which actions has been
modified or rescinded, and all of which actions are in full force and effect)
and do not and will not conflict with or violate any provision of law, of any
judgments binding upon Borrower, or of the articles of incorporation or bylaws
of Borrower, 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 Borrower under any agreement, instrument or indenture to which
Borrower is a party or by which Borrower or its property may be bound or
affected, or result in the creation of any Lien upon any property or assets of
Borrower (other than the Lien on the Collateral granted under this Agreement).
This Agreement, the Notes and the other Loan Documents to which Borrower is a
party constitute the legal, valid and binding obligations of Borrower,
enforceable in accordance with their respective terms, except that
enforceability may be limited by bankruptcy, insolvency or other such laws
affecting the enforcement of creditors' rights and general principles of equity.
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 that enforceability
may be limited by bankruptcy, insolvency or other such laws affecting creditors'
rights and general principles of equity.
6.5. APPROVALS
The execution and delivery of this Agreement, the Notes and the other Loan
Documents and the performance of 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 agency, board, bureau,
commission, instrumentality or other administrative or regulatory body or
authority (in each case, whether federal, state or local, domestic or foreign)
other than those that have been obtained and remain in full force and effect.
6.6. FINANCIAL CONDITION
The balance sheet of Borrower (and, if applicable, Borrower's 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 Lender, fairly present the financial
condition of Borrower (and, if applicable, Borrower's Subsidiaries) as at that
Statement Date and the results of its operations for the fiscal period ended on
that Statement Date. Borrower 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 Borrower
except as previously disclosed to Lender 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 Borrower (and, if applicable, Borrower's Subsidiaries), nor is
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 Borrower or
any Subsidiary of Borrower in any court or before any arbitrator or before any
agency, board, bureau, commission, instrumentality or other administrative or
regulatory body (in each case, whether federal, state or local, domestic or
foreign) that, if adversely determined, may reasonably be expected to result in
a material adverse change in 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 Borrower nor any Subsidiary of Borrower is in violation of any provision
of any law, or of any judgment, award, rule, regulation, order, decree, writ or
injunction of any court or any agency, board, bureau, commission,
instrumentality or other administrative or regulatory body (in each case,
whether federal, state or local, domestic or foreign) that could result in a
material adverse change in 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
Borrower is not engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
Margin Stock, and no part of the proceeds of any Warehousing 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
Borrower is not an "investment company" or controlled by an "investment company"
within the meaning of the Investment Company Act.
6.11. PAYMENT OF TAXES
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 Borrower and its
Subsidiaries, all such returns are true and correct and Borrower 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
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 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 Borrower, any
Subsidiary of Borrower or any property of Borrower or any Subsidiary of Borrower
with respect to any taxes, fees or charges.
6.12. AGREEMENTS
Neither Borrower nor any Subsidiary of 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 Borrower
nor any Subsidiary of Borrower is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in the
Existing Agreement or in any other agreement, instrument, or indenture which
default could result in a material adverse change in Borrower's business,
operations, assets or financial condition as a whole. No holder of any
indebtedness of Borrower or of any of its Subsidiaries has given notice of any
asserted default under that indebtedness, and no liquidation or dissolution of
Borrower or of any of its Subsidiaries and no receivership, insolvency,
bankruptcy, reorganization or other similar proceedings relative to Borrower or
of any of its Subsidiaries or any of its or their properties is pending or to
the knowledge of Borrower, threatened.
6.13. TITLE TO PROPERTIES
Borrower and each Subsidiary of 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
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 Borrower's or the Subsidiary's business. All of Borrower's
properties and assets are free and clear of all Liens except as disclosed in
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 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 Multiemployer Plan or a defined-benefit pension plan
subject to Title IV of ERISA.
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 Borrower nor any Subsidiary is
obligated to provide post-retirement medical or insurance benefits with respect
to employees or former employees.
6.16. ASSUMED NAMES
Borrower does not originate Mortgage Loans or otherwise conduct business under
any names other than its legal name and the assumed names set forth on Exhibit
G. 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. Borrower's use of the
assumed names set forth on Exhibit G does not conflict with any other Person's
legal rights to any such name, nor otherwise give rise to any liability by
Borrower to any other Person. Borrower may amend Exhibit G to add or delete any
assumed names used by Borrower to conduct business. An amendment to Exhibit G to
add an assumed name is not effective until Borrower has delivered to Lender 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 Lender in its sole
discretion. In connection with any amendment to delete a name from Exhibit G,
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 Borrower's Servicing Portfolio. All 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 Borrower's Servicing Contracts.
END OF ARTICLE 6
7. AFFIRMATIVE COVENANTS
As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed under this Agreement or under any other Loan
Document, Borrower must:
7.1. PAYMENT OF OBLIGATIONS
Punctually pay or cause to be paid all Obligations, including the Obligations
payable under this Agreement and the Notes, in accordance with their terms.
7.2. FINANCIAL STATEMENTS
Deliver to Lender:
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 Borrower's fiscal year, an interim
statement of income of Borrower (and, if applicable, Borrower's 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 Borrower, fiscal year-end statements of income, cash flows
and changes in stockholders' equity of Borrower (and, if applicable, Borrower's
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 Lender and prepared by independent certified public
accountants of recognized standing acceptable to Lender and (2) any management
letters, management reports or other supplementary comments or reports delivered
by those accountants to Borrower or its board of directors.
7.2 (c) Together with each delivery of financial statements required by this
Section, a Compliance Certificate on behalf of Borrower substantially in the
form of Exhibit E-1.
7.2 (d) As soon as available and in any event within 45 days after
the end of each month, including the last month of Guarantor's fiscal year, an
interim statement of income of Guarantor (and, if applicable, Guarantor's
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 (e) As soon as available and in any event within 90 days after the end of
each fiscal year of the Guarantor, fiscal year-end statements of income, changes
in stockholders' equity and cash flows of the Guarantor (and, if applicable, the
Guarantor'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 Lender and prepared by
independent certified public accountants of recognized standing acceptable to
Lender and (2) any management letters, management reports or other supplementary
comments or reports delivered by those accountants to the Guarantor.
7.2 (f) Together with each delivery of financial statements required by this
Section, a Compliance Certificate on behalf of Guarantor substantially in the
form of Exhibit E-2.
7.2 (g) Copies of all regular or periodic financial and other reports that
Borrower files with the Securities and Exchange Commission or any successor
governmental agency or other entity.
7.2 (h) Commencing with the reporting period for the fiscal quarter ending June
30, 2005, as soon as available and in any event within 45 days after the end of
each fiscal quarter of Guarantor, including the last fiscal quarter of
Guarantor's fiscal year, an interim statement of income of Guarantor (and, if
applicable, Guarantor's Subsidiaries, on a consolidated and consolidating basis)
for that fiscal quarter and for the period from the beginning of the fiscal year
to the end of that fiscal quarter, and the related consolidated
and consolidating balance sheet as at the end of that fiscal quarter, all in
reasonable detail, subject, however, to year-end audit adjustments.
7.3. OTHER BORROWER REPORTS
Deliver to Lender:
7.3 (a) If Borrower has a Servicing Portfolio, then 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 the month, as to all Mortgage
Loans the servicing rights to which are owned by Borrower (specified by investor
type, recourse and non-recourse) regardless of whether the Mortgage Loans are
Pledged Loans. The Servicing Portfolio Report must indicate which Mortgage Loans
(1) are current and in good standing, (2) are more than 30, 60 or 90 days past
due, (3) are the subject of pending bankruptcy or foreclosure proceedings, or
(4) have been converted (through foreclosure or other proceedings in lieu of
foreclosure) into real estate owned by Borrower.
7.3 (b) 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.
7.3 (c) On the second Business Day of each week, a commitment summary and
pipeline report, substantially in the form of Exhibit J, as of the previous
week, along with product position summaries.
7.3 (d) Unless the Funding Bank has previously provided Lender with a copy of
the Funding Bank's monthly statement for the Check Disbursement Account, as soon
as available and in any event within 45 days after the end of each month, a copy
of that monthly statement.
7.3 (e) Within 45 days after the end of each month, a report as of the end of
that month detailing all requests that Borrower repurchase Mortgage Loans from
an Investor out of an Eligible Mortgage Pool for which Borrower has determined
it is legally obligated to honor pursuant to the applicable written agreements
between Borrower and the requesting party, including the status of each such
request and any indemnification or similar agreement to which Borrower is a
party in connection with any such request.
7.3 (f) Other reports in respect of Pledged Assets, including copies of purchase
confirmations issued by Investors purchasing Pledged Loans from Borrower, in
such detail and at such times as Lender in its discretion may reasonably
request.
7.3 (g) With reasonable promptness, all further information regarding the
business, operations, assets or financial condition of Borrower as Lender may
reasonably request, including copies of any audits completed by HUD, ▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇ 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 or
issuer as 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 Borrower's eligibility as lender, seller/servicer or issuer as
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 agency, board, bureau, commission, instrumentality or other
administrative or regulatory body (in each case, whether federal, state or
local, domestic or foreign), a breach of which could result in a material
adverse change in Borrower's 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
Permit Lender or any Participant (and their authorized representatives) to
discuss the business, operations, assets and financial condition of Borrower and
its Subsidiaries with Borrower's
officers, agents and employees, and to examine and make copies or extracts of
Borrower's and its Subsidiaries' books of account, all at such reasonable times
as Lender or any Participant may request. 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 Lender or any Participant or
any authorized representatives of Lender or any Participant may address to them
in reference to the financial condition or affairs of Borrower and its
Subsidiaries. Borrower may have its representatives in attendance at any
meetings held between the officers or other representatives of Lender or any
Participant and Borrower's accountants under this authorization. Permit Lender
or any Participant (and their authorized representatives) access to Borrower's
premises and records for the purpose of conducting a review of Borrower's
general mortgage business methods, policies and procedures, auditing its loan
files and reviewing the financial and operational aspects of Borrower's
business.
7.7. NOTICE
Give prompt Notice to Lender of (a) any action, suit or proceeding instituted by
or against Borrower or any of its Subsidiaries in any federal or state court or
before any agency, board, bureau, commission, instrumentality or other
administrative or regulatory body (in each case, whether federal, state or
local, domestic or foreign), which action, suit or proceeding has at issue in
excess of $250,000, or any such proceedings threatened against Borrower or any
of its Subsidiaries in a writing containing the details of that action, suit or
proceeding; (b) the filing, recording or assessment of any Lien for any federal,
state or local taxes, assessments or other governmental charges against
Borrower, any of its Subsidiaries or any of their respective assets, other than
a Lien for taxes, assessments or other governmental charges on real property
securing or that previously secured an individual Mortgage Loan that is not a
Pledged Loan; (c) an Event of Default; (d) a Default that continues for more
than 4 days; (e) the suspension, revocation or termination of Borrower's
eligibility, in any respect, as lender, seller/servicer or issuer as described
under Section 9.1 or the suspension, revocation or termination of any other
license or approval required for Borrower to engage in the business of
originating, acquiring and, if applicable, servicing Mortgage Loans; (f) the
imposition of any other adverse regulatory or administrative action or sanction
on or against Borrower by any agency, board, bureau, commission, instrumentality
or other administrative or regulatory body (in each case, whether federal, state
or local, domestic or foreign) that could result in a material adverse change in
Borrower's business, operations, assets or financial condition as a whole or
that could affect the validity or enforceability of any Pledged Loan; (g) the
transfer, loss, nonrenewal or termination of any Servicing Contracts to which
Borrower is a party, or which is held for the benefit of Borrower, and the
reason for that transfer, loss, nonrenewal or termination; (h) any Prohibited
Transaction with respect to any Plan, specifying the nature of the Prohibited
Transaction and what action Borrower proposes to take with respect to it; and
(i) 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 Borrower or any of its 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 Borrower and its Subsidiaries, all taxes,
assessments and governmental charges or levies imposed upon 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. 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 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 or issuer as
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 Lender, 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 Lender, obtain such
additional insurance as Lender may reasonably require, all at the sole expense
of Borrower. Copies of such policies must be furnished to Lender without charge
upon request of Lender.
7.10. CLOSING INSTRUCTIONS
Indemnify and hold Lender harmless from and against any loss, including
reasonable attorneys' fees and costs, attributable to the failure of any title
insurance company, agent or attorney to comply with Borrower's disbursement or
instruction letter relating to any Mortgage Loan. Lender has the right to
pre-approve Borrower's choice of title insurance company, agent or attorney and
Borrower's disbursement or instruction letter to them in any case in which
Borrower intends 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, Borrower's disbursement or instruction letter must
include the following language: A warehouse lender 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 the
warehouse lender and not used to fund this mortgage loan. If the mortgage loan
does not close and disburse within 24 hours of receipt of funds, the closing
agent must contact MIT Lending and return the wire to the warehouse lender from
whom funds were delivered. All funds wired are to be held in trust until such
time as the corresponding mortgage loan is recorded and funds are disbursed.
7.11. SUBORDINATION OF CERTAIN INDEBTEDNESS
Cause any indebtedness of Borrower for borrowed money to any shareholder,
director, officer or Affiliate of Borrower, or to any Guarantor, which
indebtedness has a term of more than 1 year or is in excess of $25,000, to be
subordinated to the Obligations by the (a) execution and delivery to Lender of a
Subordination of Debt Agreement, on the form prescribed by Lender, certified by
the corporate secretary of Borrower to be true and complete and in full force
and effect, and (b) delivery of the original promissory note evidencing such
indebtedness to Lender.
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 Borrower is bound or to
which any of its property is subject which involves obligations, in the
aggregate, in excess of $250,000, and promptly notify Lender 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 lender. Exhibit
F is a true and complete list of all such lines of credit or agreements as of
the date of this Agreement. Borrower must give Lender at least 30 days Notice
before entering into any additional lines of credit or agreements with a
commitment of $1,000,000 or more.
7.13. ERISA
Maintain and 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 itself or permit any ERISA
Affiliate to (a) engage in any transaction in connection with which Borrower 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,
Borrower 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 funding
Eligible Loans and against the pledge of those Eligible Loans as Collateral.
END OF ARTICLE 7
8. NEGATIVE COVENANTS
As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed, Borrower (and Guarantor, if noted) must
not, either directly or indirectly, without the prior written consent of Lender:
8.1. CONTINGENT LIABILITIES
Assume, guarantee, endorse or otherwise become contingently liable for the
obligation of any Person except (a) by endorsement of negotiable instruments for
deposit or collection in the ordinary course of business and (b) for obligations
arising in connection with the sale of Mortgage Loans with recourse in the
ordinary course of Borrower's business.
8.2. PLEDGE OF SERVICING CONTRACTS
Pledge or grant a security interest in any existing or future Servicing
Contracts of Borrower other than to Lender, or omit to take any action required
to keep all of Borrower's 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.
8.3 (b) Amend or otherwise modify Borrower's articles of incorporation or
bylaws.
8.3 (c) Liquidate, wind up or dissolve (or suffer any liquidation or
dissolution).
8.3 (d) Cease actively to engage in the business of originating or acquiring
Mortgage Loans or, if applicable, servicing Mortgage Loans, or make any other
material change in the nature or scope of the business in which Borrower engages
as of the date of this Agreement.
8.3 (e) Sell, assign, lease, convey, transfer or otherwise dispose of (whether
in one transaction or a series of transactions) all or any substantial part of
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 (f) Acquire by purchase or in any other transaction all or substantially all
of the business or property, or stock or other ownership interests of any
Person.
8.3 (g) Permit any Subsidiary of Borrower to do or take any of the foregoing
actions.
8.4. SUBSIDIARIES
Form or acquire, or permit any Subsidiary of Borrower to form or acquire, any
Person that would thereby become a Subsidiary.
8.5. DEFERRAL OF SUBORDINATED DEBT
Pay any Subordinated Debt of Borrower in advance of its stated maturity or,
after a Default or Event of Default under this Agreement has occurred, make any
payment of any kind on any Subordinated Debt of Borrower until all of the
Obligations have been paid and performed in full and any applicable preference
period has expired.
8.6. LOSS OF ELIGIBILITY, LICENSES OR APPROVALS
Take any action, or fail or omit to take any action, that would (a) cause
Borrower to lose all or any part of its status as an eligible lender,
seller/servicer or issuer as described under Section 9.1 or all or any part of
any other license or approval required for Borrower to engage in the business of
originating, acquiring and, if applicable, servicing Mortgage Loans or (b)
result in the imposition of any other adverse regulatory or administrative
action or sanction on or against Borrower by any agency, board, bureau,
commission, instrumentality or other administrative or regulatory body (in each
case, whether federal, state or local, domestic or foreign) that could result in
a material adverse change in Borrower's business, operations, assets or
financial condition as a whole or that could affect the validity or
enforceability of any Pledged Loan.
8.7. ACCOUNTING CHANGES
Make, or permit any Subsidiary of 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 Borrower.
8.8. MINIMUM TANGIBLE NET WORTH
Permit Borrower's Tangible Net Worth at any time to be less than $75,000,000.
8.9 DISTRIBUTIONS TO SHAREHOLDERS
Declare or pay any dividends or otherwise declare or make any distribution to
Borrower's 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 or
distribution.
8.10 TRANSACTIONS WITH AFFILIATES
Excluding Permitted Affiliate Transactions, directly or indirectly (a) make any
loan, advance, extension of credit or capital contribution to any of Borrower's
Affiliates, (b) sell, transfer, pledge or assign any of its assets to or on
behalf of those Affiliates, (c) merge or consolidate with or purchase or acquire
assets from those Affiliates, or (d) pay management fees to or on behalf of
those Affiliates.
8.11 LEVERAGE RATIO FOR GUARANTOR
Permit Guarantor's Leverage Ratio at any time to exceed 25 to 1.
8.12 MINIMUM TANGIBLE NET WORTH FOR GUARANTOR
Permit Guarantor's Tangible Net Worth at any time to be less than $250,000,000.
8.13 MINIMUM MODIFIED LIQUID ASSETS FOR GUARANTOR
Permit Guarantor's Modified Liquid Assets at any time to be less than
$20,000,000.
8.14 OPERATING LOSSES FOR GUARANTOR
Permit Guarantor to have a net operating loss in any Calendar Quarter during its
fiscal year.
8.15 RECOURSE SERVICING CONTRACTS
Acquire or enter into Servicing Contracts under which 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.
END OF ARTICLE 8
10. 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 Warehousing Advance when
due, whether at stated maturity, by acceleration, or otherwise; or fails to pay
any installment of interest on any Warehousing Advance within 9 days after the
date of Lender's invoice or, if applicable, within 2 days after the date of
Lender'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 Borrower to Lender.
10.1 (b) Borrower fails to perform or comply with any term or condition
applicable to it contained in Sections 7.4 or 7.14 or in any Section of Article
8.
10.1 (c) The suspension, revocation or termination of Borrower's eligibility, in
any respect, as lender, seller/servicer or issuer as described under Section 9.1
or of any other license or approval required for Borrower to engage in the
business of originating, acquiring and, if applicable, servicing Mortgage Loans;
or the imposition of any other adverse regulatory or administrative action or
sanction on or against Borrower by any agency, board, bureau, commission,
instrumentality or other administrative or regulatory body (in each case,
whether federal, state or local, domestic or foreign) that could result in a
material adverse change in Borrower's business, operations, assets or financial
condition as a whole or that could affect the validity or enforceability of any
Pledged Loan.
10.1 (d) Any representation or warranty made or deemed made by Borrower under
this Agreement, in any other Loan Document or in any written statement or
certificate at any time given by Borrower, 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) Borrower defaults 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(b), 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
Borrower of Notice from Lender of that default, (2) receipt by Lender of Notice
from Borrower of that default or (3) the date Borrower should have notified
Lender of that default under Section 7.7(c) or 7.7(d).
10.1 (f) Borrower or any of its Subsidiaries fails to pay, or defaults in the
payment of any principal or interest on, any other indebtedness or any
contingent obligation within any applicable grace period; breaches or defaults
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 Borrower or its 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 (g) An "event of default" (however defined) occurs under any agreement
between Borrower and Lender other than this Agreement and the other Loan
Documents.
10.1 (h) A case (whether voluntary or involuntary) is filed by or against
Borrower or any Subsidiary of Borrower or any 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
Borrower or any Subsidiary of Borrower or any Guarantor, or over all or a
substantial part of their respective properties or assets; or Borrower or any
Subsidiary of Borrower or any 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 Borrower or any
Subsidiary of Borrower or any 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 (i) Borrower fails to perform any contractual obligation to repurchase
Mortgage Loans for
which Borrower has determined it is legally obligated to repurchase pursuant to
the applicable written agreements with respect to any such Mortgage Loans, if
such obligations in the aggregate exceed $500,000.
10.1 (j) Any money judgment, writ or warrant of attachment or similar process
involving an amount in excess of $250,000 is entered or filed against Borrower
or any of its Subsidiaries or any of their respective properties or 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 (k) Any order, judgment or decree decreeing the dissolution of Borrower or
any nonindividual Guarantor is entered and remains undischarged or unstayed for
a period of 20 days.
10.1 (l) Borrower purports to disavow any of its Obligations or contests the
validity or enforceability of any Loan Document.
10.1 (m) Any Guarantor purports to disavow any of its obligations under its
Guaranty or contests the validity or enforceability of the Guaranty.
10.1 (n) Any individual Guarantor dies or becomes incapacitated.
10.1 (o) Lender's security interest on any portion of the Collateral becomes
unenforceable or otherwise impaired.
10.1 (p) A material adverse change occurs in Borrower's financial condition,
business, properties or assets, operations or prospects, or in Borrower's
ability to repay the Obligations.
10.1 (q) Any Lien for any tax, assessment or other governmental charge is filed
or is otherwise enforced against Borrower or any of its property, including any
of the Collateral, other than a Lien for taxes, assessments or other
governmental charges on real property securing or that previously secured an
individual Mortgage Loan that is not a Pledged Loan.
10.1 (r) Guarantor ceases to own 100% of the Equity Interests of Borrower.
10.1 (s) The existence of any Default or Event of Default under Section 10.1 of
the Existing Agreement, whether or not known by Lender.
10.2. REMEDIES
10.2 (a) If an Event of Default described in Section 10.1(h) occurs with respect
to Borrower, the Warehousing Commitment 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 Notice or requirements of any kind, all of which Borrower
expressly waives.
10.2 (b) If any other Event of Default occurs, Lender may, by Notice to
Borrower, terminate the Warehousing Commitment and declare the Obligations to be
immediately due and payable.
10.2 (c) If any Event of Default occurs, Lender may also take any of the
following actions:
(1) Foreclose upon or otherwise enforce its security interest in and Lien on the
Collateral to secure all payments and performance of the Obligations in any
manner permitted by law or provided for in the Loan Documents.
(2) Notify all obligors under any of the Collateral that the Collateral has been
assigned to Lender (or to another Person designated by Lender) and that all
payments on that Collateral are to be made directly to Lender (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 Lender;
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 Lender 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 Borrower's expense, as
servicer or subservicer of Collateral requiring servicing and perform all
obligations required
under any Collateral, including Servicing Contracts and Purchase Commitments.
(5) Require Borrower to assemble and make available to Lender the Collateral and
all related books and records at a place designated by Lender.
(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 Borrower's 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 Lender 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 Lender 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 Lender may determine, including sale under any applicable Purchase
Commitment. Borrower waives any right it 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, Lender will give Borrower not less than
10 days' notice of any public sale or of the date after which any private sale
may be held. Borrower agrees that 10 days' notice is reasonable notice. Lender
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 Lender until the
purchaser pays the selling price or takes possession of the Collateral. Lender
has no liability to Borrower if a purchaser fails to pay for or take possession
of Collateral sold on those terms, and in the case of any such failure, Lender
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), Lender may proceed by suit at law or in equity to collect
all amounts due on the Collateral, or to foreclose Lender'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 Borrower on the Notes or against any 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.
10.2 (d) Lender will incur no 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. Borrower waives (to the extent
permitted by law) any claims it may have against 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 Lender might have obtained at a public sale, or was
less than the aggregate amount of the outstanding Warehousing Advances, accrued
and unpaid interest on those Warehousing Advances, and unpaid fees, even if
Lender accepts the first offer received and does not offer the Collateral to
more than one offeree. Borrower agrees that any sale of Collateral under the
terms of a Purchase Commitment, or any other disposition of Collateral arranged
by Borrower, 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 (e) Borrower acknowledges 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. Borrower waives any
right it may have to prior notice of the sale of Pledged Securities, and agrees
that Lender may purchase Pledged Loans and Pledged Securities at a private sale
of such Collateral.
10.2 (f) Borrower specifically waives and releases (to the extent permitted by
law) any equity or right of redemption, stay or appraisal that Borrower has 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 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. Lender is not required to take any action to
preserve any rights of Borrower against holders of mortgages having priority to
the Lien of any Mortgage or Security Agreement included in the Collateral or to
preserve Borrower's rights against other prior parties.
10.2 (g) Lender 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 Lender 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 Lender until repaid by Borrower, are deemed to be
principal outstanding under this Agreement and the Notes.
10.2 (h) No failure or delay on the part of 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 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 Lender, or Lender's
exercise of any other right, power or remedy. Without limiting the foregoing,
Borrower waives 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 (i) Borrower grants Lender a license or other right to use, without charge,
Borrower's 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
Borrower's rights under all licenses and all other agreements related to the
foregoing inure to Lender's benefit until the Obligations are paid in full.
10.3. APPLICATION OF PROCEEDS
Lender may apply the proceeds of any sale, disposition or other enforcement of
Lender's security interest in and Lien on all or any portion of the Collateral
to the payment of the Obligations in the order Lender determines in its sole
discretion. From and after the indefeasible payment to Lender of all of the
Obligations, any remaining proceeds of the Collateral will be paid to Borrower,
or to its successors or assigns, or as a court of competent jurisdiction may
direct. If the proceeds of any sale, disposition or other enforcement of the
Collateral are insufficient to cover the costs and expenses of that sale,
disposition or other enforcement and payment in full of all Obligations,
Borrower is liable for the deficiency.
10.4. LENDER APPOINTED ATTORNEY-IN-FACT
Borrower appoints Lender 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 Lender deems necessary or advisable to accomplish that purpose. Borrower's
appointment of Lender as attorney-in-fact is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing, Lender may give
notice of its security interest in and 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 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 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 Borrower defaults in the payment of any Obligation or in the performance of
any of its duties under the Loan Documents, Lender may, without Notice to or
demand on Borrower (which Notice or demand Borrower expressly waives), set-off,
appropriate or apply any property of Borrower held at any time by Lender, or any
indebtedness at any time owed by Lender to or for the account of Borrower,
against the Obligations, whether or not those Obligations have matured.
END OF ARTICLE 10
11. MISCELLANEOUS
11.1. 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 Borrower or Lender
in a Notice to the other):
If to Borrower: MORTGAGEIT, INC.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Senior Vice President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lender: Residential Funding Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Director
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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 Lender under Article 2 and Section
3.3(f) will be deemed to have been given only when actually received by Lender.
Borrower authorizes Lender to accept Borrower's bailee pledge agreements,
Warehousing Advance Requests, shipping requests, wire transfer instructions and
security delivery instructions transmitted to Lender by facsimile or by
RFConnects Delivery, and those documents, when transmitted to Lender by
facsimile or RFConnects Delivery, have the same force and effect as the
originals.
11.2. REIMBURSEMENT OF EXPENSES; INDEMNITY
Borrower must: (a) pay Lender a document production fee in connection with the
preparation and negotiation of this Agreement in an aggregate amount not to
exceed $25,000 at any time; (b) pay such additional document production fees as
Lender may require and all out-of-pocket costs and expenses of Lender, including
reasonable fees, service charges and disbursements of counsel to Lender
(including allocated costs of internal counsel), in connection with the
amendment, enforcement and administration of this Agreement, the Notes and the
other Loan Documents, the making, repayment and payment of interest on the
Warehousing Advances and the payment of all other Obligations under Loan
Documents; (c) indemnify, pay and hold harmless Lender 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 Lender 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 Lender and all of its Affiliates, officers, directors,
employees or agents and any other holder of the Notes (collectively, 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(bb) or 9.3(h) 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 (collectively, the "Indemnified
Liabilities"), except that Borrower has no obligation under this Agreement with
respect to Indemnified Liabilities arising from the gross negligence or willful
misconduct of any Indemnitee. 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, Borrower 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 Borrower 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.
11.3. FINANCIAL INFORMATION
All financial statements and reports furnished to Lender 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
Borrower's most recent fiscal year (except to the extent otherwise required to
conform to good accounting practice).
11.4. TERMS BINDING UPON SUCCESSORS; SURVIVAL OF REPRESENTATIONS
The terms and provisions of this Agreement are binding upon and inure to the
benefit of Borrower, Lender and their respective successors and assigns. All of
Borrower's representations, warranties, covenants and agreements survive the
making of any Warehousing Advance and, except where a longer period is set forth
in this Agreement, remain effective for as long as the Warehousing Commitment is
outstanding or there remain any Obligations to be paid or performed.
11.5. ASSIGNMENT
Borrower cannot assign this Agreement. Lender may at any time, without Notice to
or the consent of Borrower, transfer or assign, in whole or in part, its
interest in this Agreement and the Notes along with Lender's security interest
in and Lien on any of the Collateral, and any assignee of Lender may enforce
this Agreement, the Notes and its security interest in and Lien on the
Collateral assigned.
11.6. AMENDMENTS
Except as otherwise provided in this Agreement, this Agreement may not be
amended, modified or supplemented unless the amendment, modification or
supplement is set forth in a writing signed by both Borrower and Lender.
11.7. 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.
11.8. PARTICIPATIONS
Lender may at any time sell, assign or grant participations in, or otherwise
transfer to any other Person ("Participant"), all or part of the Obligations.
Without limiting Lender's exclusive right to collect and enforce the
Obligations, Borrower agrees that each participation will give rise to a
debtor-creditor relationship between Borrower and the Participant, and Borrower
authorizes each Participant, upon the occurrence of an Event of Default, to
proceed directly by right of setoff, banker's lien or otherwise, against any
assets of Borrower that may be held by that Participant. Borrower authorizes
Lender to disclose to prospective and actual Participants all information in
Lender's possession concerning Borrower, this Agreement and the Collateral.
11.9. RELATIONSHIP OF THE PARTIES
This Agreement provides for the making and repayment of Warehousing Advances by
Lender (in its capacity as a lender) and Borrower (in its capacity as a
borrower), for the payment of interest on those Warehousing Advances and for the
payment of certain fees by Borrower to Lender. The relationship between Lender
and Borrower is limited to that of creditor and secured party on the part of
Lender and of debtor on the part of Borrower. 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
Lender to protect its interest as a creditor and secured party. Nothing in this
Agreement creates or may be construed as permitting or obligating Lender to act
as a financial or business advisor or consultant to Borrower, as permitting or
obligating Lender to control Borrower or to conduct Borrower's operations, as
creating any fiduciary obligation on the part of Lender to Borrower, or as
creating any joint venture, partnership, agency or other relationship between
Lender and Borrower other than as explicitly and specifically stated in the Loan
Documents. Borrower acknowledges that it has had the opportunity to obtain the
advice of experienced counsel of its 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 11.16 and 11.17, respectively. Borrower further
acknowledges that it is experienced with respect to financial and credit matters
and has made its own independent decisions to apply to Lender for credit and to
execute and deliver this Agreement.
11.10. SEVERABILITY
If any provision of this Agreement or any other Loan Document 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 or such other Loan Document.
11.11. CONSENT TO CREDIT REFERENCES
Borrower consents to the disclosure of information regarding Borrower and its
Subsidiaries and their relationships with Lender to Persons making credit
inquiries to Lender. This consent is revocable by Borrower at any time upon
Notice to Lender as provided in Section 11.1.
11.12. 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. 11.13. 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.
11.14. 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.
11.15. CONSENT TO JURISDICTION
AT THE OPTION OF LENDER, THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS
MAY BE ENFORCED IN ANY STATE OR FEDERAL COURT WITHIN THE STATE OF MINNESOTA.
BORROWER CONSENTS TO THE JURISDICTION AND VENUE OF THOSE COURTS, AND WAIVES 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 BORROWER
BY FIRST CLASS REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED
TO BORROWER AT ITS ADDRESS LAST KNOWN TO LENDER. BORROWER'S CONSENT AND
AGREEMENT UNDER THIS SECTION DOES NOT AFFECT LENDER'S RIGHT TO ACCOMPLISH
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWER IN ANY OTHER JURISDICTION OR
COURT. IN THE EVENT BORROWER 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, LENDER 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.
11.16. WAIVER OF JURY TRIAL
BORROWER AND 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 BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS
EACH INSTANCE AND EACH ISSUE FOR WHICH THE RIGHT TO TRIAL BY JURY WOULD
OTHERWISE APPLY. LENDER AND BORROWER 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, BORROWER AND LENDER 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.
11.17. WAIVER OF PUNITIVE, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES
BORROWER AND LENDER EACH WAIVES ANY RIGHT IT MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES FROM THE OTHER PARTY OR ANY OF THE
OTHER PARTY'S AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS WITH RESPECT
TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM
BROUGHT BY EITHER PARTY AGAINST THE OTHER PARTY OR ANY OF THE OTHER PARTY'S
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 OF BORROWER AND LENDER, 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.
EACH OF BORROWER AND LENDER IS 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.
11.18. MERGER OF OBLIGATIONS
Borrower understands and agrees that its duties and obligations under the
Existing Agreement merge with and into this Agreement, except as expressly
modified by this Agreement. Borrower agrees that its duties and obligations
under the Existing Agreement are not satisfied or extinguished by the execution
and delivery of this Agreement.
11.19. WAIVER OF EVENTS OF DEFAULT UNDER EXISTING AGREEMENT
Lender waives its default rights with respect to the following Event of Default
that occurred under the Existing Agreement: (a) Borrower's failure to comply
with the terms of Section 8.8 of the Existing Agreement by exceeding the
Leverage Ratio covenant for the month of November, 2004.
This waiver applies only to the specific instance set forth in this Section. It
is not a waiver of any other Default or Event of Default under either the
Existing Agreement or this Agreement. Lender reserves all of the rights, powers
and remedies presently available to it under the Loan Documents, including the
right to cease making Warehousing Advances to Borrower and the right to
accelerate the Obligations, upon the occurrence of any other Default or Event of
Default (y) under this Agreement or (z) under the Existing Agreement.
11.20. CONFIDENTIALITY
Lender shall use reasonable efforts to assure that information about Borrower
and its operations, affairs and financial condition, not generally disclosed to
the public or to trade and other creditors,
which is furnished to Lender pursuant to the provisions hereof is used only for
the purposes of this Agreement and any other relationship between Lender and
Borrower and not divulged to any Person other than Lender, its Affiliates and
their respective officers, directors, employees and agents, except: (a) to their
attorneys and accountants, (b) in connection with the enforcement of the rights
of Lender hereunder and under the other Loan Documents or otherwise in
connection with applicable litigation, (c) in connection with assignments and
participations and the solicitation of prospective assignees and participants
referred to in Sections 11.8 (provided such assignees, participants and
prospecting assignees and participants agree to be bound by this Section 11.20)
and (d) as may otherwise be required or requested by any regulatory authority
having jurisdiction over Lender or by any applicable law, rule, regulation or
judicial process, the opinion of Lender's counsel concerning the making of such
disclosure to be binding on the parties hereto.
END OF ARTICLE 11
12. DEFINITIONS
12.1. DEFINED TERMS
As used in this Agreement and the Exhibits to this Agreement, the following
terms have the following meanings or, as applicable, the meanings given to those
terms elsewhere in this Agreement or in Exhibits to this Agreement:
"Advance Rate" means, with respect to any Eligible Loan, the Advance Rate set
forth in Exhibit H for that type of Eligible Loan.
"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 Warehousing Advance
against Aged Mortgage Loans of a particular type may remain outstanding as set
forth in Exhibit H.
"Agency Security" means a Mortgage-backed Security issued or guaranteed by
▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae.
"Aggregate Warehousing Collateral Value" means, as of any date of determination,
the total Warehousing Collateral Value of all Pledged Loans or Pledged
Securities then subject to a perfected, first-priority Lien in favor of Lender
under this Agreement.
"Agreement" means this First Amended and Restated Warehousing Credit and
Security Agreement, either as originally executed or as it may be amended,
restated, renewed or replaced.
"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 a 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 Lender 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.
"Audited Statement Date" means the date of (i) with respect to Borrower,
Borrower's most recent audited financial statements (and, if applicable,
Borrower's Subsidiaries, on a consolidated basis), and (ii) with respect to
Guarantor, Guarantor's most recent audited financial statements (and if
applicable, Guarantor's Subsidiaries, on a consolidated basis), each as
delivered to Lender under the Existing Agreement or this Agreement.
"Borrower" has the meaning set forth in the first paragraph of this Agreement.
"BPO Value" means, with respect to the real property and improvements securing
any Mortgage Loan, the lowest fair market value for such real property and
ownership interest and occupancy rights as set forth in an opinion of a real
estate broker acceptable to the Lender, in its sole discretion, as to the value
of such improved real property if sold within a 60-day marketing period. Each
such broker price opinion shall be obtained from a real estate broker with
substantial experience in the purchase and sale of similar properties in the
geographic area in which the real property or ownership interest and occupancy
rights to be valued is located and should be as of a date not more than 30 days
prior to the date of the related Warehousing Advance.
"Business Day" means any day other than Saturday, Sunday or any other day on
which national banking associations are closed for business.
"Buydown" has the meaning set forth in Section 3.4.
"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 Lender'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 Borrower's name and under the control of Lender for clearing
checks written by Borrower to fund Mortgage Loans funded by Warehousing
Advances.
"Closing Date" has the meaning set forth in the Recitals to 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.
"Compliance Certificate" means a certificate executed on behalf of Borrower or
Guarantor by its chief financial officer or its treasurer or by another officer
approved by Lender, substantially in the form of Exhibit E-1 or Exhibit E-2.
"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 Lender 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 due more than 6
months after the Warehousing Maturity 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, the lapse of time or both would
constitute an Event of Default.
"Default Rate" means, for any Warehousing Advance, the Interest Rate applicable
to that Warehousing Advance plus 4% per annum. If no Interest Rate is applicable
to a Warehousing Advance, "Default Rate" means, for that Warehousing Advance,
the highest Interest Rate then applicable to any outstanding Warehousing Advance
plus 4% per annum.
"Depository Benefit" means the compensation received by Lender, directly or
indirectly, as a result of Borrower's maintenance of Eligible Balances with a
Designated Bank.
"Designated Bank" means any bank designated by Lender as a Designated Bank, but
only for as long as 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.
"Earnings Allowance" has the meaning set forth in Section 3.1(b).
"Earnings Credit" has the meaning set forth in Section 3.1(b).
"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 Lender, among Borrower, Lender, MERS and MERSCORP, Inc.
"Eligible Balances" means all funds of or maintained by Borrower (and, if
applicable, Borrower's 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 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 Lender.
"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 Borrower 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.
"Excess Buydown" has the meaning set forth in Section 3.4.
"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.
"Exclusionary List" means the list by that name published and updated
periodically by Lender on the ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ website.
"Exhibit B" means Exhibit B, as applicable to the type of Eligible Loan against
which a Warehousing Advance is to be made.
"Existing Agreement" means the Warehousing Credit and Security Agreement dated
as of August 1, 2003, as amended, between Borrower and Lender.
"Fair Market Value" means, at any time for an Eligible Loan or a related Pledged
Security (if the Eligible Loan is to be used to back a Pledged Security) as of
any date of determination, the market price for such Eligible Loan or Pledged
Security, determined by Lender based on market data for similar Mortgage Loans
or Pledged Securities and such other criteria as Lender 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.
"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.
"▇▇▇▇▇▇▇ Mac" means the Federal Home Loan Mortgage Corporation, a corporation
created under the laws of the United States, and any successor corporation or
other entity.
"Funding Bank" means JPMorgan Chase or any other bank designated by Lender as a
Funding
Bank.
"Funding Bank Agreement" means a letter agreement on the form prescribed by
Lender between the Funding Bank and Borrower authorizing Lender'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.
"▇▇▇▇▇▇ ▇▇▇" 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
Lender, 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, MortgageIT Holdings, Inc. and
any other Person that after the date of this Agreement guarantees all or any
portion of Borrower's Obligations.
"Guaranty" means a guaranty of all or any portion of Borrower's Obligations,
either as originally executed or as it may be amended, restated, renewed or
replaced. If more than one Guaranty is executed and delivered to Lender, 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.
"High LTV Mortgage Loan" has the meaning set forth in Exhibit H.
"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).
"Indemnified Liabilities" has the meaning set forth in Section 11.2.
"Indemnitees" has the meaning set forth in Section 11.2.
"Interest Rate" means, for any Warehousing Advance, the floating rate of
interest per annum specified for that Warehousing Advance in Exhibit H.
"Interim Statement Date" means the date of (i) with respect to Borrower,
Borrower's most recent unaudited financial statements (and, if applicable,
Borrower's Subsidiaries, on a consolidated basis), (ii) with respect to
Guarantor for each reporting period for each month, Guarantor's most recent
unaudited financial statements (and, if applicable, Guarantor's Subsidiaries, on
a consolidated basis), and (iii) with respect to Guarantor for each reporting
period for each fiscal quarter, Guarantor's most recent unaudited financial
statements (and, if applicable, Guarantor's Subsidiaries, on a consolidated and
consolidating basis) each as delivered to Lender 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 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.
"Investor" means ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or a financially responsible private
institution that Lender deems acceptable, in its sole discretion, to issue
Purchase Commitments with respect to a particular category of Eligible Loans.
"JPMorgan Chase " means JPMorgan Chase Bank, National Association, Chicago,
Illinois, or any
successor bank.
"JPMorgan Chase Prime Rate" means, as of any date of determination, the highest
prime rate quoted by JPMorgan Chase and most recently published by Bloomberg
L.P. If the prime rate for JPMorgan Chase is not quoted or published for any
period, then during that period the term
"JPMorgan Chase 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."
"Lender" has the meaning set forth in the first paragraph of this Agreement.
"Leverage Ratio" means the ratio of a Person's Debt to Tangible Net Worth,
except that for purposes of calculating a Person's Leverage Ratio, Debt arising
under Hedging Arrangements, to the extent of assets arising under those Hedging
Arrangements, may be excluded from that 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).
"Loan Documents" means this Agreement, the Notes, the Guaranty, any agreement of
Borrower relating to Subordinated Debt and each other document, instrument or
agreement executed by Borrower or any Guarantor, as applicable, 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 3.6.
"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 real property and
improvements, to (b) the Appraised Property Value of the related real property
and improvements.
"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 Registration Systems, Inc. and any successor
entity.
"Miscellaneous Fees and Charges" means the Collateral Operations Fees set forth
on Lender's fee schedule attached as Exhibit I and all miscellaneous
disbursements, charges and expenses incurred by or on behalf of Lender for the
handling and administration of Warehousing Advances and Collateral, including
costs for Uniform Commercial Code, tax lien and judgment searches conducted by
Lender, 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
Borrower, Lender may modify the Collateral Operations Fees set forth in Exhibit
I to conform to current Lender practices and, as so modified, the revised
Exhibit I will become part of this Agreement.
"Modified Liquid Assets" means the following unrestricted and unencumbered
assets owned by a Person (and, if applicable, that Person's Subsidiaries, on a
consolidated basis) as of any date of determination: (a) cash, (b) funds on
deposit in accounts with any bank located in the United States (net of the
aggregate amount payable under all outstanding and unpaid checks, drafts and
similar items drawn by a Person against those accounts for purposes other than
funding Mortgage Loans against which Warehousing Advances have been or will be
made), (c) investment grade commercial paper, (d) money market funds and (e)
marketable securities, plus,
in the case of Borrower (f) the amount of any Buydown that Borrower is entitled
to reborrow under procedures and limitations of Section 3.4 and (g) in the
absence of a Default or Event of Default, the amount of any Excess Buydown, plus
(whether or not restricted), in the case of Guarantor, without duplication,
amounts held by UBS Trust under the Trust Agreement up to a maximum amount of
$10,000,000.
"Mortgage" means 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).
"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 Mortgagebacked Security is to be issued.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA, to which either Borrower or any ERISA Affiliate of Borrower
has any obligation with respect to its employees.
"Notes" mean the Sublimit Note and the Warehousing Note.
"Notices" has the meaning set forth in Section 11.1.
"Obligations" means all indebtedness, obligations and liabilities of Borrower to
Lender and Lender's Subsidiaries (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), including
Borrower's obligation to repay Warehousing Advances and reborrowings of
Buydowns, under this Agreement and Borrower's other obligations and liabilities
to Lender under this Agreement and the other Loan Documents and disbursements
made by Lender for Borrower's account.
"Operating Account" means a demand deposit account maintained at the Funding
Bank in Borrower's name and designated for funding that portion of each Eligible
Loan not funded by a Warehousing Advance made against that Eligible Loan and for
returning any excess payment from an Investor for a Pledged Loan or Pledged
Security.
"Overdraft Advance" has the meaning set forth in Section 3.8.
"Participant" has the meaning set forth in Section 11.8.
"Permitted Affiliate Transactions" means, subject to all terms, conditions and
provisions of this Agreement, transactions between Borrower and its Affiliates
in connection with (i) the securitization, sale, hypothecation or pledge of
certain assets of Borrower (other than any item of Collateral) or its
Affiliates, (ii) hedging activities involving Borrower and certain of its
Affiliates, and/or the origination, and (iii) acquisition of Mortgage Loans,
Mortgage Notes, Mortgages, Security Agreements and all other documents,
agreements and instruments related thereto.
"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 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 Borrower or any ERISA Affiliate.
"Pledged Assets" means, collectively, Pledged Loans and Pledged Securities.
"Pledged Hedging Accounts" has the meaning set forth in Section 4.1 (g).
"Pledged Hedging Arrangements" has the meaning set forth in Section 4.1 (g).
"Pledged Loans" has the meaning set forth in Section 4.1(b).
"Pledged Securities" has the meaning set forth in Section 4.1(c).
"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 Lender, issued in favor of 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.
"Release Amount" has the meaning set forth in Section 4.3(f).
"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 Specially Designated Nationals and Blocked Persons
established pursuant to Executive Order 13224 (September 23, 2001) and
maintained by the U.S. Department of the Treasury's Office of Foreign Assets
Control or any successor agency or other entity, 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 an Eligible Loan covered by a Purchase Commitment
issued by Lender.
"RFConnects Delivery" means Lender's proprietary service to support the
electronic exchange of information between Lender and Borrower, including
Warehousing Advance Requests, shipping requests, payoff requests, wire transfer
instructions, security delivery instructions, activity reports and exception
reports.
"Seasoned Mortgage Loan" has the meaning set forth in Exhibit H.
"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 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 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).
"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, the maximum number of
days a Warehousing Advance against that type of Mortgage Loan, 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.
"Sublimit Note" has the meaning set forth in Section 1.3. "Subordinated Debt"
means all indebtedness of Borrower 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 Lender or
(2) otherwise on terms acceptable to Lender.
"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.
"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 Lender under the Existing Agreement, plus that portion
of Subordinated Debt due more than 6 months after the Warehousing Maturity 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 Lender
deems unacceptable, in its sole discretion, must be excluded from that Person's
total assets.
"Third Party Originated Loan" means a Mortgage Loan originated and funded by a
third party (other than with funds provided by Borrower at closing to purchase
the Mortgage Loan) and subsequently purchased by Borrower.
"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.
"Trust Agreement" means the Trust Agreement of UBS Trust dated as of August 4,
2004, among Borrower, Guarantor and Wilmington Trust Company.
"Trust Receipt" means a trust receipt in a form approved by and under which
Lender may deliver any document relating to the Collateral to Borrower for
correction or completion.
"UBS Trust" means MortgageIT SPV I, a Delaware statutory trust, established as a
special purpose entity of Borrower.
"VA" means the Veterans Administration and any successor agency or other entity.
"Warehousing Advance" means a disbursement by Lender 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 under Exhibit H
or (2) an amount equal to the Advance Rate for the applicable type of Eligible
Loan multiplied by the Fair Market Value of such Eligible Loan; (b) if Eligible
Loans have been exchanged for Agency Securities, the lesser of (1) the amount of
any Warehousing Advances outstanding against the Eligible Loans backing the
Agency Securities or (2) an amount equal to the Advance Rates for the applicable
types of Eligible Loans 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 Lender to make Warehousing
Advances to Borrower under Section 1.1.
"Warehousing Commitment Amount" means $650,000,000.
"Warehousing Commitment Fee" has the meaning set forth in Section 3.5.
"Warehousing Fee" has the meaning set forth in Section 3.6.
"Warehousing Maturity Date" has the meaning set forth in Section 1.2.
"Warehousing Note" has the meaning set forth in Section 1.3.
"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 a Warehousing Advance prior to the end of the Wet
Settlement Period.
"Wet Settlement Period" means the period of time from the date a Wet Settlement
Advance is made against a Pledged Loan until the earlier of (a) the date the
Collateral Documents for the Pledged Loan have been delivered to and examined by
the Lender or (b) the date the Wet Settlement Advance made against the Pledged
Loan is paid in full.
"Wire Disbursement Account" means a demand deposit account maintained at the
Funding Bank in Lender's name for clearing wire transfers requested by Borrower
to fund Warehousing Advances.
"Wire Fee" has the meaning set forth in Section 3.6.
12.2. OTHER DEFINITIONAL PROVISIONS; TERMS OF CONSTRUCTION
12.2 (a) Accounting terms not otherwise defined in this Agreement have the
meanings given to those terms under GAAP.
12.2 (b) Defined terms may be used in the singular or the plural, as the context
requires.
12.2 (c) All references to time of day mean the then applicable time in Chicago,
Illinois, unless otherwise expressly provided.
12.2 (d) References to Sections, Exhibits, Schedules and like references are to
Sections, Exhibits, Schedules and the like of this Agreement unless otherwise
expressly provided.
12.2 (e) The words "include," "includes" and "including" are deemed to be
followed by the phrase "without limitation."
12.2 (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."
12.2 (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 Borrower under this Agreement and the Notes are irrevocably
paid in full and the Warehousing Commitment is terminated.
12.2 (h) All references to the Uniform Commercial Code are deemed to be
references to the Uniform Commercial Code in effect on the date of this
Agreement in the applicable jurisdiction.
12.2 (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 12