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EXHIBIT 10(b)
REVOLVING CREDIT AGREEMENT
dated as of July 10, 1998
by and among
SOURCE ONE MORTGAGE SERVICES CORPORATION
and
THE FIRST NATIONAL BANK OF CHICAGO,
individually and as Administrative Agent
and
CERTAIN OTHER LENDERS
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TABLE OF CONTENTS
PAGE
RECITALS.................................................................... 1
ARTICLE I DEFINITIONS...................................................... 1
1.1 Definitions................................................... 1
1.2 Interpretation................................................ 17
1.3 Accounting Terms and Determinations........................... 18
ARTICLE II BORROWINGS...................................................... 18
2.1 Availability and Adjustments.................................. 18
2.2 Fees.......................................................... 19
2.3 Advances...................................................... 19
2.4 [Intentionally Omitted]....................................... 20
2.5 [Intentionally Omitted]....................................... 20
2.6 [Intentionally Omitted]....................................... 20
2.7 Rate after Maturity........................................... 20
2.8 Interest Payment Dates........................................ 20
2.9 Method of Selecting Rate Options and Interest
Periods....................................................... 21
2.10 Maximum Number of Eurodollar Loans............................ 22
2.11 Funding Procedures............................................ 22
2.12 Conversion and Continuation................................... 22
2.13 Optional Principal Payments................................... 23
2.14 Required Principal Payments................................... 23
2.15 Method of Payment............................................. 24
2.16 Notes; Telephonic Notices..................................... 24
2.17 General Provisions as to Payments............................. 25
2.18 Notification of Advances, Interest Rates and
Prepayments................................................... 25
2.19 Lending Installations......................................... 25
2.20 Non-Receipt of Funds by Agent................................. 26
ARTICLE III CHANGE IN CIRCUMSTANCES......................................... 27
3.1 Yield Protection.............................................. 27
3.2 Availability of Rate Options.................................. 29
3.3 Funding Indemnification....................................... 29
3.4 Lender Statements; Survival of Indemnity...................... 29
3.5 Lender Tax Agreement.......................................... 30
ARTICLE IV COLLATERAL AND BORROWING BASE................................... 31
4.1 Eligible Collateral - FSA Common Stock........................ 31
4.2 Borrowing Base................................................ 31
4.3 Special Representations as to Collateral...................... 31
4.4 Special Covenants............................................. 32
4.5 Release of Collateral......................................... 33
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TABLE OF CONTENTS
(CONTINUED)
PAGE
4.6 Settlement Account............................................ 33
4.7 Termination................................................... 33
ARTICLE V CONDITIONS PRECEDENT............................................. 34
5.1 Initial Advance (Company)..................................... 34
5.2 Initial Advance (Lenders)..................................... 35
5.3 All Advances.................................................. 35
ARTICLE VI REPRESENTATIONS AND WARRANTIES.................................. 36
6.1 Organization, Corporate Powers, Etc........................... 36
6.2 Corporate Authority, Etc...................................... 36
6.3 Compliance with Laws.......................................... 37
6.4 Government Approvals.......................................... 37
6.5 Valid and Binding Obligations................................. 37
6.6 Financial Statements.......................................... 37
6.7 Litigation.................................................... 38
6.8 Use of Proceeds............................................... 38
6.9 Accuracy of Information....................................... 38
6.10 Accuracy of Representations and Warranties.................... 39
6.11 Investment Company............................................ 39
6.12 ERISA......................................................... 39
6.13 Tax Returns................................................... 39
6.14 Full Disclosure............................................... 39
6.15 GNMA, FHA, VA, FNMA, AND FHLMC Eligibility.................... 40
6.16 No Defaults................................................... 40
6.17 Year 2000 Compliance.......................................... 40
ARTICLE VII AFFIRMATIVE COVENANTS.......................................... 40
7.1 Payment of Debts, Taxes, Etc.; Maintenance of
Insurance..................................................... 40
7.2 Preservation of Corporate Existence........................... 41
7.3 Compliance with Laws, Etc..................................... 41
7.4 Requested Information......................................... 42
7.5 Keeping of Records and Books of Account....................... 42
7.6 Maintenance of Approvals, Filings and
Registrations................................................. 42
7.7 Reporting Requirements........................................ 42
7.8 Indemnification............................................... 47
7.9 Maintenance of Net Worth...................................... 47
7.10 Federal Agency Approvals...................................... 48
7.11 [Intentionally Omitted]....................................... 48
7.12 Borrowing Base Certificate. .................................. 48
7.13 Further Assurance........... ................................. 48
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TABLE OF CONTENTS
(CONTINUED)
PAGE
7.14 Maintenance of Properties..................................... 49
7.15 Payment of Taxes.............................................. 49
7.16 Year 2000 Compliance.......................................... 49
ARTICLE VIII NEGATIVE COVENANTS............................................ 50
8.1 Use of Proceeds............................................... 50
8.2 [Intentionally Omitted]....................................... 50
8.3 Mergers; Subsidiaries......................................... 50
8.4 Sales......................................................... 50
8.5 Debt.......................................................... 51
8.6 Ratably Secured Debt.......................................... 52
8.7 Guarantees.................................................... 52
8.8 Investments................................................... 52
8.9 Leverage Ratios............................................... 54
8.10 Recourse Servicing............................................ 54
8.11 Liens......................................................... 54
8.12 Credit Requirement............................................ 57
8.13 Affiliate Transactions........................................ 57
8.14 Conduct of Business........................................... 57
8.15 FHA and other Approvals....................................... 57
8.16 Restricted Payments........................................... 58
8.17 Maintenance of Restricted FSA Securities...................... 59
8.18 Subordinated Debt Indenture................................... 59
8.19 Collateral Coverage Ratio..................................... 60
ARTICLE IX THE AGENT....................................................... 60
9.1 Appointment and Authorization................................. 60
9.2 Agent and Affiliates.......................................... 61
9.3 Action by Agent............................................... 61
9.4 Consultation with Experts..................................... 61
9.5 Liability of Agent............................................ 61
9.6 Indemnification............................................... 62
9.7 Credit Decision............................................... 62
9.8 Resignation or Removal and Appointment of
Successor Agent............................................... 63
9.9 Compensation.................................................. 63
9.10 Release of Collateral Documents............................... 64
9.11 Knowledge of Defaults......................................... 64
ARTICLE X DEFAULTS......................................................... 64
10.1 Defaults...................................................... 64
10.2 Remedies...................................................... 67
10.3 Notice of Default............................................. 68
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TABLE OF CONTENTS
(CONTINUED)
PAGE
10.4 Application of Proceeds...................................... 69
ARTICLE XI BENEFIT OF AGREEMENT; ASSIGNMENTS;
PARTICIPATIONS.................................................. 70
11.1 Successors and Assigns....................................... 70
11.2 Participations............................................... 70
11.3 Assignments.................................................. 71
11.4 Dissemination of Information................................. 72
11.5 Tax Treatment................................................ 73
ARTICLE XII MISCELLANEOUS.................................................. 73
12.1 Immediately Available Funds.................................. 73
12.2 Notices...................................................... 73
12.3 Survival and Termination of Agreement........................ 73
12.4 Fees and Expenses of the Lenders............................. 74
12.5 Applicable Law............................................... 74
12.6 Modification of Agreement.................................... 74
12.7 Non-Waiver of Rights by the Lenders.......................... 76
12.8 Dealings with the Company and its Affiliates................. 76
12.9 Changes in GAAP.............................................. 76
12.10 Set-Off...................................................... 76
12.11 Counterparts................................................. 77
12.12 Severability................................................. 78
12.13 Headings..................................................... 78
12.14 Entire Agreement............................................. 78
12.15 Consent of Jurisdiction...................................... 78
12.16 Waiver of Jury Trial......................................... 78
EXHIBIT A [INTENTIONALLY OMITTED]
EXHIBIT B BORROWING BASE CERTIFICATE
EXHIBIT C COMMITMENTS AND COMMITMENT PERCENTAGES
EXHIBIT D FORM OF SECURITY AGREEMENT
EXHIBIT E FORM OF NOTE
EXHIBIT F FORM OF OPINION LETTER
EXHIBIT G MATERIAL LITIGATION NOT REFERENCED IN ANNUAL/QUARTERLY
REPORTS
EXHIBIT H FORM OF MODIFIED COMMITMENT SUPPLEMENT
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REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT dated as of July 10, 1998 by and among
SOURCE ONE MORTGAGE SERVICES CORPORATION, a Delaware corporation (the
"Company"), the lenders identified on the signature pages hereof, and THE FIRST
NATIONAL BANK OF CHICAGO, a national banking association ("First Chicago"),
individually as a Lender and as administrative agent for the Lenders.
RECITALS
The revolving credit facility made available to the Company pursuant to
this Agreement shall be used for general working capital and corporate purposes,
including the funding of mortgage loans.
In consideration of the foregoing and for other good and valuable
consideration, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
Capitalized terms used in this Agreement shall have the
following meanings:
Adjusted Consolidated Tangible Net Worth: means, as of any date of
determination thereof, the net worth of the Company and its consolidated
Subsidiaries on a consolidated basis as determined in accordance with GAAP ("Net
Worth"); less the sum (without duplication) of (a) any assets of the Company and
its consolidated Subsidiaries which would be treated as intangibles under GAAP
including, without limitation, any write-up of assets, goodwill, research and
development costs, trademarks, tradenames, copyrights, patents and unamortized
debt discount and expenses, and (b) loans or other extensions of credit to
officers of the Company or of any of its consolidated Subsidiaries other than
Mortgage Loans made to such Persons in the ordinary course of business and (c)
the amount of the Net Worth attributable to the book value of all Restricted FSA
Securities, determined in accordance with GAAP; plus one percent (1%) of the
then-current aggregate outstanding principal balance of all Mortgage Loans then
being serviced by the Company either for its own account or for others under
Servicing Agreements (excluding Subservicing Agreements) to the extent the
servicing rights relating to such Mortgage Loans have not been capitalized and
are thus not accounted for in the Company's net worth as computed in accordance
with GAAP.
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Advance: means a borrowing hereunder consisting of the aggregate
amount of Loans made to the Company by one or more of the Lenders hereunder
pursuant to Article II on any given Advance Date.
Advance Date: means a date on which an Advance is made hereunder.
Advance Notice: is defined in Section 2.9.
Affiliate: means, as to any Person, any other Person directly or
indirectly Controlling, Controlled by or under direct or indirect common Control
with such Person.
Agent: means The First National Bank of Chicago in its capacity as
administrative agent for the Lenders hereunder, and any successor Agent
appointed pursuant to Article IX.
Aggregate Commitment: means, as of any date, the aggregate of the
Lenders' then-current Commitments.
Agreement: means this Revolving Credit Agreement, as the same from
time to time may be extended, amended, supplemented, waived or modified.
Alternate Base Rate: means, on any day, a fluctuating rate of interest
per annum equal to the higher of (a) the Published Federal Funds Effective Rate
for such day plus the Applicable Margin, and (b) the Corporate Base Rate for
such day.
Alternate Base Rate Advance: means an Advance which bears interest at
the Alternate Base Rate.
Alternate Base Rate Loan: means a Loan which bears interest at the
Alternate Base Rate.
Applicable Margin: means one and one-eighth of one percent (1.125%)
per annum.
Approved Equity Securities: means readily marketable securities owned
by the Company and approved by the Agent for purposes of inclusion in the
calculation of the Debt Threshold.
Approved Rate Hedging Agreement: means a Rate Hedging Agreement
between the Company and a Lender, which has been approved by the Agent pursuant
to the Other Facility.
Approved Secured Rate Hedging Obligations: means all obligations under
an Approved Rate Hedging Agreement that by the terms of such Approved Rate
Hedging Agreement are secured by the collateral under the Other Facility.
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Authorized Officer: means, with respect to the Company, the
president, chairman, chief financial officer, or other officer of the Company
authorized in writing to execute any particular statement, certificate or
agreement on behalf of the Company.
Board of Governors: means the Board of Governors of the Federal
Reserve System.
Borrowing Base: is defined in Section 4.2.
Borrowing Base Certificate: means a certificate executed by the Chief
Financial Officer or Treasurer of the Company or other employees of the Company
so authorized in writing, an original of which shall be delivered to the Agent,
by such Chief Financial Officer or Treasurer in substantially the form attached
hereto as Exhibit B.
Business Day: means (i) with respect to any borrowing, payment or rate
selection regarding a Eurodollar Advance, a day (other than a Saturday or
Sunday) on which banks are open for business in Chicago, Los Angeles and New
York and on which dealings in United States dollars are carried on in the London
interbank market and (ii) for all other purposes, a day (other than a Saturday
or Sunday) on which banks are open for business in Chicago, Los Angeles and New
York.
Calculation Period: means, as of any date of determination, the
fiscal quarters of the Company elapsed since March 31, 1998, not to exceed the
immediately preceding four (4) full fiscal quarters.
Cash Equivalents: means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof, (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having the highest rating obtainable
from either S&P or ▇▇▇▇▇'▇, (iii) commercial paper maturing no more than 90 days
from the date of creation thereof and, at the time of acquisition, having the
highest rating obtainable from either S&P or ▇▇▇▇▇'▇, (iv) certificates of
deposit or bankers' acceptances maturing within one year from the date of
acquisition thereof issued by commercial banks organized under the laws of the
United States or any state thereof or the District of Columbia, each having
combined capital and surplus of not less than $500,000,000, and (v) reverse
repurchase obligations having terms not exceeding seven days entered into with
any financial institution meeting the qualifications specified in clause (iv)
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above or with any securities dealer approved by the Agent, provided that there
is an investment agreement in effect pursuant to which the underlying securities
are held by a sub-agent for the Collateral Agent and all cash proceeds are
payable directly to the Settlement Account.
Change in Control: means the acquisition by any Person or group (within
the meaning of Rule 13d-5 of the SEC under the Exchange Act) of Persons (other
than Fund American Enterprises Holdings, Inc. or a wholly-owned Subsidiary
thereof), of beneficial ownership (within the meaning of Rule 13d-3 of the SEC
under the Exchange Act) of outstanding shares of voting stock of the Company at
any time if, after giving effect to such acquisition, such Person or Persons
beneficially owns twenty percent (20%) or more of such outstanding voting stock,
and Fund American Enterprises Holdings, Inc. or a wholly-owned Subsidiary
thereof does not beneficially own more than fifty percent (50%) of such
outstanding shares of voting stock.
Code: means the Internal Revenue Code of 1986, as amended
from time to time.
Collateral: means all right, title and interest of the Company of every
kind and nature, in and to all of the following property, assets and rights of
the Company wherever located, whether now existing or hereafter arising, and
whether now or hereafter owned, acquired by or accruing or owing to the Company
and all proceeds and products thereof:
(i) all FSA Common Stock, together with all cash,
securities or other property which become payable or attributable to
the Company on account of the FSA Common Stock, including any cash,
securities or other property payable or distributable on account of any
cash dividend, stock redemption, stock split, stock dividend or other
dividend payable in property other than cash;
(ii) cash and Cash Equivalents held by the Agent or
Collateral Agent as security for the Secured Debt;
(iii) the Custody Account; and
(iv) the Settlement Account and all monies deposited
therein.
Collateral Agent: means First Chicago or its successor or
affiliate, as Collateral Agent under the Security Agreement.
Commitment: means, for each Lender as of any date, the obligation
of such Lender to make Loans not exceeding the amount set forth as its
commitment on Exhibit C attached hereto, as such amount may be modified from
time to time pursuant to the terms
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hereof, or the amount established in any assignment to a new Lender pursuant to
the terms hereof.
Commitment Percentage: means, for each Lender as of any date, the
quotient of (i) such Lender's Commitment, divided by (ii) the Aggregate
Commitment, which Commitment Percentage shall initially be as set forth on
Exhibit C for each Lender.
Company: means Source One Mortgage Services Corporation, a Delaware
corporation.
Control: means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of another
entity, whether through the ownership of voting securities, by contract or
otherwise.
Control Agreement: means that certain Control Agreement of even date
herewith among the Company, the Collateral Agent and the Custodian pursuant to
which the Custodian, having custody of the FSA Common Stock owned by the
Company, agrees to the Collateral Agent's control over such stock and the
Custody Account to perfect the security interest created under the Security
Agreement.
Controlled Group: means all members of a controlled group of
corporations and all trades or business (whether or not incorporated) under
common control which, together with the Company, are treated as a single
employer under Section 414(b) or 414(c) of the Code.
Conversion/Continuation Notice: is defined in Section 2.12(iii).
Corporate Base Rate: means a rate per annum equal to the corporate base
rate of interest announced by First Chicago from time to time, changing when and
as such corporate base rate changes.
Credit Documents: means this Agreement, the Security Agreement, the
Notes, the Control Agreement and all other documents and instruments now or
hereafter delivered to the Agent or the Lenders pursuant to or in connection
with the transactions contemplated hereby, and any amendments, supplements,
modifications, renewals, replacements, consolidations, substitutions and
extensions of any of the foregoing.
Credit Indebtedness: means, as of any date, all amounts
owing under any of the Credit Documents to any of the Lenders,
the Agent, or the Collateral Agent.
Credit Requirement: means, as of any date, the aggregate unpaid
principal balance of all Loans then outstanding hereunder.
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Custodian: means ▇▇▇▇▇ & Co., a member firm in good standing of the
Depository Trust Company.
Custody Account: means the account established with the Custodian
in which the Eligible FSA Common Stock has been deposited.
Debt: means, with respect to any Person, as of any date of
determination thereof, without duplication, (i) all obligations of such Person
for borrowed money, including but not limited to money borrowed from any parent,
subsidiary or affiliate of such Person, whether or not evidenced by a promissory
note, (ii) all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments, (iii) all obligations of such Person to pay the
deferred purchase price of property or services, including without limitation
the obligation of such Person to pay any deferred purchase price for Servicing
Agreements acquired, (iv) all obligations of such Person as lessee under capital
leases, (v) all Debt of others secured by a Lien on any asset of such Person,
whether or not such Debt is assumed by such Person, (vi) all Debt of others
Guaranteed by such Person, (vii) all on-balance-sheet obligations of such Person
under repurchase agreements covering mortgage-backed securities or pools of
Mortgage Loans, (viii) the Approved Secured Rate Hedging Obligations, and (ix)
all obligations of such Person to fund the origination or acquisition of
Mortgage Loans represented by uncleared loan funding checks or drafts payable to
the mortgagor or seller of such Mortgage Loans, as the case may be; provided
that Debt shall not include Mortgage-Related Indebtedness.
Debt Threshold: is defined in Section 8.5.
Default: means an Event of Default or any event or condition that
with the giving of notice or the passage of time or both would constitute an
Event of Default.
Eligible Collateral: means, as of any date without duplication, (i)
Eligible FSA Common Stock, (ii) the balance to the credit of the Company in the
Settlement Account, and (iii) cash and Cash Equivalents held by the Agent or
Collateral Agent as security for the Secured Debt.
Eligible FSA Common Stock: is defined in Section 4.1.
ERISA: means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
ERISA Affiliate: means any corporation or trade or business which
is a member of the same Controlled Group as the Company.
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Eurodollar Advance: means an Advance which bears interest at the
Eurodollar Rate.
Eurodollar Base Rate: means, with respect to a Eurodollar Interest
Period, the rate determined by the Agent to be the rate at which deposits in
U.S. dollars are offered by First Chicago to first-class banks in the London
interbank market at approximately 11 a.m. (London time) two Business Days prior
to the first day of such Eurodollar Interest Period, in the approximate amount
of (i) the amount of the Eurodollar Advance divided by (ii) the number of
Lenders making Loans in connection with such Advance, and having a maturity
approximately equal to such Eurodollar Interest Period.
Eurodollar Interest Period: means, with respect to a Eurodollar
Advance, a period of one, two or three months, as selected by the Company,
commencing on a Business Day selected by the Company pursuant to this Agreement.
Such Eurodollar Interest Period shall end on (but exclude) the day which
corresponds numerically to such date one, two or three months thereafter, as
applicable; provided, however, that if there is no such numerically
corresponding day in such next month, such Eurodollar Interest Period shall end
on the last Business Day of such next month. If a Eurodollar Interest Period
would otherwise end on a day which is not a Business Day, such Eurodollar
Interest Period shall end on the next succeeding Business Day, provided,
however, that (i) if said next succeeding Business Day falls in a new calendar
month, such Eurodollar Interest Period shall end on the immediately preceding
Business Day, and (ii) no Eurodollar Interest Period shall extend beyond the
Termination Date.
Eurodollar Loan: means a Loan which bears interest at a
Eurodollar Rate.
Eurodollar Rate: means, with respect to a Eurodollar Advance and
Eurodollar Loan for the relevant Eurodollar Interest Period, the sum of (i) the
quotient of (a) the Eurodollar Base Rate applicable to such Eurodollar Interest
Period, divided by (b) one minus the Reserve Requirement (expressed as a
decimal) applicable to that Eurodollar Interest Period, plus (ii) the Applicable
Margin in effect two Business Days prior to the first day of such Eurodollar
Interest Period.
Event of Default: means any of the events described in
Section 10.1.
Exchange Act: means the Securities Exchange Act of 1934, as
amended.
Facility: means the facility comprised of the Commitments made
available to the Company pursuant to this Agreement, which
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facility has an original term of 364 days and an initial Aggregate Commitment of
$35,000,000.
Facility Fee Rate: means, as of any date, twenty one-hundredths of
one percent (0.20%) per annum.
Federal Agency: means FHLMC, FNMA, GNMA, FHA or VA.
Federal Funds Advance: means an Advance bearing interest at the
Federal Funds Rate.
Federal Funds Funding Rate: means, with respect to any Federal Funds
Loan for any day, the rate per annum equal to the consensus (or if no consensus
exists, the arithmetic average) of the rates at which reserves are offered by
first-class banks to other first-class banks (at approximately the time at which
the applicable Advance Notice or Conversion/Continuation Notice is received or
the time at which an automatic continuation is deemed to have occurred) on such
day (or if such day is not a Business Day, on the immediately preceding Business
Day) on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, based on quotes received by the Agent
from three federal funds brokers of recognized standing selected by the Agent in
its sole discretion; provided, however, that in lieu of determining the rate in
the foregoing manner, the Agent may substitute therefor the consensus (or if no
consensus exists, the arithmetic average) of the rates at which reserves are
offered by first-class banks to other first-class banks at 10:00 a.m. (Chicago
time) on such day (or if such day is not a Business Day, on the immediately
preceding Business Day) on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, received by the
Agent from three federal funds brokers of recognized standing selected by the
Agent in its sole discretion.
Federal Funds Loan: means any Loan constituting a portion of a
Federal Funds Advance.
Federal Funds Rate: means, for any day, an interest rate
per annum equal to (i) the Federal Funds Funding Rate for such day, plus (ii)
0.125% per annum, plus (iii) the Applicable Margin.
Fees: is defined in Section 2.2.
FHA: means the Federal Housing Administration or other agency,
corporation or instrumentality of the United States to which the powers and
duties of the Federal Housing Administration have been transferred.
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FHA-Approved Mortgagee: means an institution that is approved by the
FHA to act as a servicer and mortgagee of record with respect to a Mortgage Loan
insured by the FHA.
FHLMC: means the Federal Home Loan Mortgage Corporation or other
agency, corporation or instrumentality of the United States to which the powers
and duties of the Federal Home Loan Mortgage Corporation have been transferred.
FHLMC-Approved Lender: means an institution that is approved by the
FHLMC to act as a lender in connection with the origination of any Mortgage Loan
purchased by the FHLMC.
First Chicago: means The First National Bank of Chicago, in its
corporate capacity and not as Agent, and its successors and assigns.
FNMA: means the Federal National Mortgage Association or other
agency, corporation or instrumentality of the United States to which the powers
and duties of the Federal National Mortgage Association have been transferred.
FNMA-Approved Lender: means an institution that is approved by the FNMA
to act as a lender in connection with the origination of any Mortgage Loan
purchased by the FNMA.
FSA: means Financial Security Assurance Holdings Ltd., a New York
corporation.
FSA Common Stock: means 3,460,200 shares of common stock of FSA, having
a par value of $0.01 per share, together with any additional shares in FSA or
any portions or other rights with respect to FSA to which the holder of such
shares becomes entitled hereafter, subject to possible releases thereof in
accordance with Section 4.5.
Fundamental Change: is defined in Section 8.4.
Fundamental Change/Investment Calculation Period: means, in respect of
any Fundamental Change or Investment, the period ending on the date of
consummation of such Fundamental Change or Investment and including the four
most recent consecutive fiscal quarters ending on or prior to the date of
consummation of such Fundamental Change or Investment.
Funded Debt: means as of any date of determination thereof, all Debt
of the Company and its consolidated Subsidiaries (including without limitation
all amounts payable by the Company in connection with the acquisition of any
Servicing Agreements and the amount of all checks, drafts or other items issued
by the Company or any of its consolidated Subsidiaries to fund Mortgage Loans to
the extent such checks, drafts or other items have not
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been collected upon and paid), minus (i) all Debt of others Guaranteed by the
Company or any of its consolidated Subsidiaries and (ii) all Debt of others
secured by a Lien on any asset of the Company or any of its consolidated
Subsidiaries, unless such Debt is assumed by the Company or any of its
consolidated Subsidiaries.
GAAP: means generally accepted accounting principles as in effect
from time to time.
GNMA: means the Government National Mortgage Association or other
agency, corporation or instrumentality of the United States as to which the
powers and duties of the Governmental National Mortgage Association have been
transferred.
Guaranty: means, with respect to any Person, any obligation, contingent
or otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person (a "primary obligor") or in any manner providing for the payment of
any Debt of any primary obligor or otherwise protecting the holder of such Debt
against loss (whether by agreement to keep-well, to purchase assets, goods,
securities or services, to advance or supply funds to the primary obligor to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, to take-or-pay or
otherwise), provided that the term "Guaranty" shall not include (i) endorsements
for collection or deposit in the ordinary course of business, (ii) obligations
of the Company pursuant to Recourse Servicing, (iii) commitments by the Company
to purchase Mortgage Loans in the ordinary course of business, and (iv)
obligations in the Company's capacity as servicer of Mortgage Loans. The term
"Guarantee" used as a verb has a correlative meaning.
Hazardous Substance: means any hazardous, toxic or dangerous waste,
substance or material subject to regulation under the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, and federal,
state or local so-called "Superfund" or "Superlien" laws, or any other federal,
state or local laws, ordinances, rules or regulations governing or regulating
hazardous materials, pollution, the environment or public health, as now or at
any time hereafter in effect.
HUD: means the United States Department of Housing and Urban
Development or other agency, corporation or instrumentality of the United States
to which the powers and duties of the United States Department of Housing and
Urban Development have been transferred.
Investment: means, as applied to any Person, any direct or indirect
purchase or other acquisition by that Person of, or a beneficial interest in,
stock or other securities of any other Person or any option, contract,
certificate or other financial
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product (including, but not limited to, interest rate swaps and other hedging
instruments), or any direct or indirect loan, advance or capital contribution by
that Person to any other Person, including all indebtedness and accounts
receivable from that other Person which are not current assets or did not arise
from sales to that other Person in the ordinary course of business. The amount
of any Investment shall be determined in accordance with GAAP.
Lender: means, at any time, any party having a Commitment hereunder
and its successors and permitted assigns.
Lending Installation: means, with respect to a Lender, any office,
branch, subsidiary or affiliate of such Lender.
Lending Sublimits: is defined in Section 2.1(a).
Lien: means, with respect to any asset of any Person, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect of
such asset. For the purposes of this Agreement, such Person shall be deemed to
hold subject to a Lien any asset that it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sales agreement, capital
lease or other title retention agreement relating to such asset.
Loan: means a loan of money in any amount to the Company by a Lender
pursuant to this Agreement.
Market Value: means, with respect to the FSA Common Stock, on a monthly
basis, or more often if so required from time to time by the Agent, the
then-current market value of such FSA Common Stock as conclusively determined by
the bid price published in The Wall Street Journal (or other financial
publication selected by the Agent if such price is not published therein for any
reason).
Maximum Special Dividend Amount: is defined in Section 8.16.
Moody's: means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor to
its business.
Mortgage: means a mortgage, deed of trust, security deed or similar
instrument purporting to create a first or second lien or similar interest in
real estate and improvements thereon.
Mortgage Loan: means a loan of money evidenced by a Mortgage Note and
secured by a Mortgage.
Mortgage Note: means a note evidencing the indebtedness secured by a
Mortgage.
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Mortgage-Related Indebtedness: means, with respect to the Company and
its Subsidiaries, any amount arising out of the issuance in the ordinary course
of the mortgage banking business of the Company and its Subsidiaries of (i)
mortgage pools, pass-throughs, participation certificates and other
mortgage-related securities to the extent that such amount would not, in
accordance with GAAP, be shown as indebtedness on a consolidated balance sheet
of the Company and its Subsidiaries as at such date and (ii) collateralized
mortgage obligations and other mortgage-related securities issued by a
Subsidiary of the Company, the payment of principal and interest in respect of
which is secured by a Lien on Mortgage Loans or other mortgage-related
securities (or other securities in which the Company invests in the ordinary
course of its mortgage banking business) conveyed to such Subsidiary in an
amount reasonably anticipated by the Company to approximate the amount required
to pay the principal and interest in respect of such collateralized mortgage
obligations or other mortgage-related securities (whether or not such amount
would, in accordance with GAAP, be shown as indebtedness on a consolidated
balance sheet of the Company and its Subsidiaries as at such date).
Note: means promissory notes evidencing amounts that may be advanced
from time to time under this Agreement, in substantially the form of Exhibit E
attached hereto, each duly executed by the Company and payable to the order of a
Lender, including any amendment, modification, renewal or replacement of such
promissory notes.
Notice Address: means, as to any Person, the address of such Person
specified in or pursuant to Section 12.2.
Obligations: means any and all amounts due from the Company to any of
the Lenders, the Agent or the Collateral Agent hereunder or under the Notes,
the Security Agreement or any other Credit Document.
Other Facility: means that certain Fourth Amended and Restated
Revolving Credit Agreement dated as of July 10, 1998 by and among the Company,
First Chicago, the Lenders and certain other banks, as amended and supplemented
from time to time.
Parent: means collectively, White Mountains Holdings, Inc., which
holds 97% of the stock of the Company, and Fund American Enterprises Holdings,
Inc., which in turn holds all of the stock in White Mountains Holdings, Inc. and
the remaining 3% of the stock of the Company.
Participants: is defined in Section 11.2(a).
PBGC: means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
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Person: means an individual, corporation, limited liability
company, partnership, joint venture, trust or unincorporated organization,
or a government or any agency or political subdivision thereof.
Plan: means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Company or any member of the Controlled Group may have any
liability.
Pledged Item: means any FSA Common Stock or Cash Equivalent that is
from time to time designated as Collateral by the Company and the Collateral
Agent or the Custodian pursuant to this Agreement, the Security Agreement or the
Control Agreement.
Pledgor: is defined in Section 4.3.
Published Federal Funds Effective Rate: means, for any day, an interest
rate per annum equal to the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published for such day (or, if such day is
not a Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations at approximately 10:00 a.m.
(Chicago time) on such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by the Agent in its sole
discretion.
Rate Hedging Agreement: means an agreement, device or arrangement
providing for payments which are related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate floor, cap or collar protection
agreements, forward rate currency or interest rate options, puts and warrants.
Rate Option: means the Eurodollar Rate, the Federal Funds Rate or
the Alternate Base Rate.
Recourse Servicing: means any servicing rights under a Servicing
Agreement (other than any Servicing Agreement with GNMA) which obligates the
Company to repurchase Mortgage Loans upon default by the borrower thereunder or
indemnify any party having an interest in such Mortgage Loans against any
principal loss arising from such a default, unless (i) the Company has obtained
and maintains in effect insurance with coverages satisfactory to Agent from an
insurance company having a "AAA" rating covering the risk of being required to
so indemnify any such party, or (ii) the Company's obligation to indemnify any
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party against any principal loss is limited to 10% or less of any such loss.
Regulation D: means Regulation D of the Board of Governors as from time
to time in effect and any successor or other regulation or official
interpretation of the Board of Governors relating to reserve requirements
applicable to member banks of the Federal Reserve System.
Regulation U: means Regulation U of the Board of Governors from time to
time in effect and any successor or other regulation or official interpretation
of the Board of Governors relating to the extension of credit by banks for the
purpose of purchasing or carrying margin stocks applicable to member banks of
the Federal Reserve System.
Reportable Event: means a reportable event as described in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation has waived
the requirement of Section 4043(a) of ERISA that it be notified of the
occurrence of such event, provided, however, that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.
Required Lenders: means (i) Lenders having two-thirds of the
Aggregate Commitment then in effect, or (ii) if the Commitments have been
terminated, Lenders having at least two-thirds of the aggregate Loans then
outstanding.
Reserve Requirement: means, with respect to the Eurodollar Rate
applicable to a Eurodollar Interest Period, the maximum aggregate reserve
requirement (including all basic, supplemental, marginal and other reserves)
which is imposed under Regulation D on eurocurrency liabilities on the date of
determination of such Eurodollar Rate.
Residential Mortgage Loan: means a Mortgage Loan secured by a
Mortgage on a Single Family Residence.
Restricted FSA Securities: means any securities or contractual rights
now or hereafter owned by the Company which are convertible into, are
exercisable for or represent a right to acquire, without regard to any
contractual restrictions thereon, shares of capital stock of FSA, together with
all capital stock of FSA which is acquired by the Company pursuant to such a
conversion or any exercise of such right.
Restricted Payment: means: (i) with respect to the Company, any payment
of any dividends upon any shares of the Company's
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stock now or hereafter outstanding, except dividends payable in the stock of the
Company, and any other distribution or other transfer of assets to its
stockholders, as such, (including any repurchase of the Company's stock) whether
in cash, property, or securities, other than the exchange of Subordinated Debt
for Series A Preferred Stock or the purchase at market value from an Affiliate
of a readily-marketable security traded on the New York Stock Exchange, American
Stock Exchange or The NASDAQ Stock Market as approved by the Agent; and (ii) any
payment of principal of or interest on the Subordinated Debt, and any amounts
deposited with the trustee under the Subordinated Debt Indenture or otherwise
irrevocably set aside for the benefit of the holders of the Subordinated Debt
for the purpose of defeasance of the Subordinated Debt.
Resulting Entity: means the Company and its consolidated Subsidiaries
after giving effect to any Fundamental Change or Investment.
S&P: means Standard & Poor's Ratings Group or any successor to its
business.
SEC: means the Securities and Exchange Commission (or any successor
entity).
Secured Debt: means the Credit Indebtedness.
Secured Parties: means, collectively, the Lenders, the Agent and the
Collateral Agent.
Security Agreement: means the Pledge and Security Agreement as of even
date herewith, substantially in the form of Exhibit D attached hereto, by and
among the Company, the Agent and the Collateral Agent, pursuant to which a
security interest is created in favor of the Collateral Agent for the Secured
Parties in certain Collateral to be pledged pursuant to this Agreement, as the
same may, from time to time, be further supplemented, modified or amended.
Series A Preferred Stock: means the Company's 8.42% Cumulative
Preferred Stock, Series A.
Servicing Agreement: means a written contract of the Company with
another Person to act on behalf of such other Person to, among other things,
receive payments in respect of Mortgage Loans and to service Mortgage Loans, but
shall not include the servicing rights related to (i) any Residential Mortgage
Loans while they constitute collateral under the Other Facility, (ii) any
commercial Mortgage Loans, or (iii) any other Mortgage Loans held for
investment by the Company, Parent or any of their respective Subsidiaries.
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Servicing Purchaser: means a Person which has purchased Servicing
Agreements from the Company.
Settlement Account: means the account established pursuant to
Section 4.6.
Single Family Residence: means a one- to four-family dwelling unit,
which may be a condominium unit but which shall not be a mobile home (unless
qualified under a Federal Agency program) or a dwelling unit in a cooperative
apartment building.
Special Dividend: means any Restricted Payment made pursuant to
Section 8.16(b)(ii).
Subordinated Debt: means the principal amount of (but not any interest
on) the unsecured subordinated Debt of the Company outstanding from time to time
(which amount shall not exceed $100,000,000) evidenced by the Quarterly Income
Capital Securities (Subordinated Interest Deferrable Debentures, Due 2025) of
the Company issued in exchange for certain of the Series A Preferred Stock, the
terms of which unsecured subordinated Debt are set forth in the Subordinated
Debt Indenture; but shall not include any such unsecured subordinated Debt with
respect to which any amounts shall have been deposited with the trustee under
the Subordinated Debt Indenture or otherwise irrevocably set aside for the
benefit of the holders of such Debt for the purpose of defeasance of such Debt.
Subordinated Debt Indenture: means that certain Subordinated Indenture,
dated as of December 1, 1995, as amended or supplemented from time to time, by
and between the Company and IBJ ▇▇▇▇▇▇▇▇▇, as trustee, pursuant to which the
Company has issued or will issue the Subordinated Debt.
Subservicing Agreement: means a Servicing Agreement between the Company
and a Person which does not own the Mortgage Loans being serviced thereunder but
only has servicing or other non-ownership rights with respect thereto.
Subsidiary: of a Person means (i) any corporation more than 50% of the
outstanding voting securities having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its Subsidiaries,
or (ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of the Company.
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Termination Date: means July 9, 1999, or if any such day is not a
Business Day, the next preceding Business Day.
Transferee: is defined in Section 11.4.
Unsecured Leverage Ratio: means the maximum leverage ratio set forth
in Section 8.9.
VA: means the Veterans Administration or other agency, corporation
or instrumentality of the United States as to which the powers and duties of
the Veterans Administration have been transferred.
VA-Approved Lender: means an institution that is approved by the VA to
act as a lender in connection with the origination of any Mortgage Loan
guaranteed by the VA.
VA Mortgage Loan: means a Mortgage Loan that is secured by a first
lien on land and the Single Family Residence constructed thereon and is
guaranteed by the VA.
Year 2000 Issues: means anticipated costs, problems and uncertainties
associated with the inability of certain computer applications to effectively
handle data including dates on and after January 1, 2000, as such inability
materially affects the business, operations and financial condition of the
Company and its Subsidiaries and of the Company's and its Subsidiaries' material
customers, suppliers and vendors.
Year 2000 Program: is defined in Section 6.17.
1.2 Interpretation.
(a) Words of the masculine gender include correlative words of
the feminine and neuter genders.
(b) Unless the context shall otherwise indicate, words
importing the singular include the plural and vice versa.
(c) Articles and Sections referred to by number mean the
corresponding Articles and Sections of this Agreement.
(d) The terms "hereby," "hereof," "hereto," "herein," "hereunder"
and any similar terms as used in this Agreement, refer to this
Agreement as a whole unless otherwise expressly stated.
1.3 Accounting Terms and Determinations.
Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to
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be delivered hereunder shall be prepared, in accordance with GAAP, applied on a
basis consistent (except for changes concurred in by the Company's independent
public accountants) with the most recent audited consolidated financial
statements of the Company delivered to the Lenders. To enable the ready and
consistent determination of compliance with the covenants set forth herein, the
Company will not change its fiscal year from a calendar year without (i) advance
written notice to the Lenders, (ii) providing interim financial reports
certified by the Company, by the dates that such reports would have been
required prior to such change, and (iii) providing an interim audited financial
statement if more than fifteen (15) months will have elapsed between annual
audited financial statements as a result of such change.
ARTICLE II
BORROWINGS
2.1 Availability and Adjustments.
(a) Agreement to Lend. Subject to subparagraphs (1) and
(2) below (the "Lending Sublimits"), each Lender severally agrees to
make Loans to the Company on the terms and subject to the conditions
set forth in this Agreement from time to time through the Business Day
immediately preceding the Termination Date, provided that, on any date,
after giving effect to such Loans and all other Loans that the Company
has requested be made on such date:
(1) the aggregate principal balance then outstanding
under all Loans made by any Lender under this Agreement shall
not at any time exceed such Lender's then-current Commitment;
and
(2) the Credit Requirement shall not exceed the
Borrowing Base.
Subject to the terms and conditions hereof, the Company may borrow,
repay and reborrow amounts hereunder.
(b) Optional Reductions in Aggregate Commitments. The
Company shall have the right to reduce the Aggregate Commitment upon
ten Business Days' prior written notice to the Agent (which shall
promptly notify the Lenders), provided that such voluntary reductions
shall be made only in multiples of $5,000,000. Upon a reduction of the
Aggregate Commitment pursuant to the preceding sentence, each Lender's
Commitment shall be decreased pro rata in accordance with such Lender's
Commitment Percentage. On or before the effective date of any such
reduction, the Company shall, if necessary, repay sufficient Loans to
prevent the remaining outstanding Loans hereunder, after giving effect
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to such permanent reduction, from exceeding the Lending Sublimits.
2.2 Fees.
The Company shall pay the following fees (the "Fees"):
(a) Facility Fee. A facility fee based on the Aggregate
Commitment from time to time, calculated at the Facility Fee Rate,
expressed as a per diem rate on the actual Aggregate Commitment for
each day during the preceding full or partial calendar quarter, payable
in arrears, on or before the fifth Business Day of each calendar
quarter and on the Termination Date. This fee shall be allocated among
the Lenders on a pro rata basis in accordance with their respective
Commitments on each day during such quarter.
(b) Up-Front Fees. An up-front fee to each Lender based on
such Lender's initial total Commitment hereunder payable when this
Agreement becomes effective, equal to 0.075% of the Commitment of such
Lender.
(c) Other Fees Payable to Agent. Any fees payable to the Agent
pursuant to any applicable letter agreements between the Agent and the
Company.
(d) Collateral Agent Fees. Collateral Agent fees payable to
Collateral Agent for its services rendered pursuant to the Security
Agreement as agreed to by the Company and the Collateral Agent from
time to time.
2.3 Advances.
(a) Types of Advances. Each Advance hereunder shall consist of
Loans made from one or more of the Lenders and requested by the Company in
accordance with Section 2.9. Subject to the terms and conditions herein,
Eurodollar Advances, Alternate Base Rate Advances and Federal Funds Advances
shall be generally available as permitted by the Lending Sublimits.
Notwithstanding anything to the contrary contained in this Agreement, at any
time during the continuance of a Default the Agent may (and at the direction of
the Required Lenders shall) declare by notice to the Company that no Advance
may be made as, converted into or continued as a Eurodollar Advance and each
such Advance shall automatically be converted into a Federal Funds Advance at
the expiration of the Eurodollar Interest Period applicable thereto.
(b) Rate Options. Eurodollar Advances, Alternate Base Rate
Advances and Federal Funds Advances shall accrue interest at
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the Eurodollar Rate, the Alternate Base Rate or the Federal Funds Rate,
respectively.
(c) Funding of Advances. All Advances shall be funded on a pro
rata basis among all Lenders in accordance with each Lender's Commitment
Percentage.
2.4 [Intentionally Omitted].
2.5 [Intentionally Omitted].
2.6 [Intentionally Omitted].
2.7 Rate after Maturity.
Any Advance not paid at maturity, whether by acceleration or
otherwise, and any other amount not paid when due hereunder shall bear interest
until paid in full at a rate per annum equal to the Alternate Base Rate plus two
percent (2.0%) per annum; provided, however, that such interest rate after
maturity shall in no event be less than the interest rate that was in effect
with respect to such Advance prior to maturity.
2.8 Interest Payment Dates.
Interest shall accrue at the relevant rate for each day from
the day on which the proceeds of such Advance are made available to the Company.
Interest accrued on each Advance other than a Eurodollar Advance shall be
payable on the first to occur of (i) the first Business Day of the immediately
following calendar month, commencing with the first such date to occur after the
date hereof, or (ii) at maturity of the Facility, whether due to acceleration or
otherwise. Interest accrued on each Eurodollar Advance shall be payable on the
first to occur of (i) the last day of each Eurodollar Interest Period, or (ii)
any date on which any such Eurodollar Advance is prepaid, whether due to
acceleration or otherwise, or (iii) the Termination Date. Interest and Fees
shall be calculated for actual days elapsed on the basis of a 360-day year.
Interest shall be payable for the day an Advance is made. Interest shall not
be payable for the day of any payment on the amount paid if payment is received
prior to noon (Chicago time) at the place of payment. If any payment of
principal of or interest on an Advance shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
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2.9 Method of Selecting Rate Options and Interest Periods.
Subject to the terms hereof, for each Advance hereunder the
Company shall give the Agent irrevocable notice (an "Advance Notice") not later
than (i) 10:00 a.m. (Chicago time) on the proposed Advance Date for each Federal
Funds Advance, (ii) noon (Chicago time) on the proposed Advance Date for each
Alternate Base Rate Advance, and (iii) 11:00 a.m. (Chicago time) three (3)
Business Days before the Advance Date for each Eurodollar Advance specifying:
(a) the Advance Date, which shall be a Business Day, of such
Advance,
(b) the aggregate amount of such Advance, which shall be in an
amount equal to $5,000,000 or a whole multiple of $1,000,000 in excess
thereof,
(c) the type of such Advance, and
(d) in the case of a Eurodollar Advance, the Eurodollar
Interest Period applicable thereto.
Delivery of an Advance Notice, whether by telephone or in writing, shall
constitute a representation and warranty that, after giving effect to the amount
of the Advance being requested, (i) the then-current Borrowing Base is equal to
or greater than the Credit Requirement, and (ii) no Lending Sublimit shall be
exceeded. Changes in the rate of interest on that portion of any Advance
maintained as an Alternate Base Rate Advance will take effect simultaneously
with each change in the Alternate Base Rate. The interest rate on each Federal
Funds Advance shall be recalculated daily for each day that such Federal Funds
Advance is continued under Section 2.12(ii). Each Eurodollar Advance shall bear
interest for each day from and including the first day of the Eurodollar
Interest Period applicable thereto to (but not including) the last day of such
Eurodollar Interest Period at the interest rate determined as applicable to such
Advance. The Company shall select Eurodollar Interest Periods with respect to
Eurodollar Advances so that it is not necessary to pay a Eurodollar Advance
prior to the last day of the applicable Eurodollar Interest Period in order to
make the mandatory repayment on the Termination Date.
2.10 Maximum Number of Eurodollar Loans.
The Company may not request an additional Eurodollar Advance
if the making of such Advance would result in any Lender holding Eurodollar
Loans having more than three (3) different Eurodollar Interest Periods at any
given time.
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2.11 Funding Procedures.
Not later than 2:00 p.m. (Chicago time) on each Advance Date,
each Lender shall make available its Loan or Loans, in funds immediately
available in Chicago to the Agent at its address specified pursuant to Article
XII. The Agent will make the funds so received from the Lenders available to the
Company at the Agent's aforesaid address, subject to the provisions of Article
V.
2.12 Conversion and Continuation.
(i) The Company may elect from time to time, subject to
the provisions of Sections 2.3(a), 2.9 and 2.10 and the Lending
Sublimits to convert all or any part of any Advance into a different
type of Advance, provided that any conversion of any Eurodollar Advance
shall be made on, and only on, the last day of the applicable
Eurodollar Interest Period.
(ii) Alternate Base Rate Advances shall continue as the
same type of Advances unless and until such Advances are converted into
a different form of Advance in accordance with the terms hereof.
Federal Funds Advances shall continue as Federal Funds Advances unless
and until (a) such Advances are converted into a different form of
Advance in accordance with the terms hereof or (b) the Company has paid
any such Federal Funds Advance prior to 10:00 a.m. (Chicago time) on
any Business Day or given the Agent written notice before 10:00 a.m.
(Chicago time) on any Business Day that such Federal Funds Advance will
be repaid on such Business Day. If the Company so notifies the Agent
that it will be paying a Federal Funds Advance on any Business Day and
fails to do so, such Advance shall be converted into an Alternate Base
Rate Advance. Eurodollar Advances shall continue until the end of the
then-applicable Eurodollar Interest Period therefor, at which time each
such Advance shall be automatically converted to a Federal Funds
Advance, unless the Company shall have given the Agent notice in
accordance with Section 2.12(iii) requesting that, at the end of such
Eurodollar Interest Period, such Advance continue as a Eurodollar
Advance for a specified Eurodollar Interest Period or be converted to a
different type of Advance.
(iii) The Company shall give the Agent irrevocable notice
(a "Conversion/Continuation Notice") of each conversion of an Alternate
Base Rate Advance or a Federal Funds Advance, or conversion or
continuation of a Eurodollar Advance, not later than (i) 10:00 a.m.
(Chicago time) on the date of the requested conversion or continuation,
in the case of a conversion into a Federal Funds Advance or Alternate
Base Rate Advance, or (ii) 11:00 a.m. (Chicago
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time) at least three Business Days prior to the date of the requested
conversion into or continuation of a Eurodollar Loan, specifying: (1)
the requested date (which shall be a Business Day) of such conversion
or continuation; (2) the amount and type of the Advance to be converted
or continued; (3) the amount and type(s) of Advance(s) into which such
Advance is to be converted or continued; and (4) in the case of a
conversion into or continuation of a Eurodollar Advance, the duration
of the Eurodollar Interest Period applicable thereto.
2.13 Optional Principal Payments.
All or any portion of Alternate Base Rate Advances and Federal
Funds Advances may be paid without penalty or premium on any Business Day
provided that such repayments are made by (i) 10:00 a.m. (Chicago time) with
respect to Federal Funds Advances, or (ii) noon (Chicago time) with respect to
Alternate Base Rate Advances. A Eurodollar Advance may not be paid prior to the
last day of the applicable Eurodollar Interest Period provided, however, that
the Company shall compensate the Lenders for any funding losses and/or loss of
profits incurred as a result of any voluntary prepayment (if accepted) or
involuntary prepayment of any such Advance prior to the last day of the
applicable Eurodollar Interest Period. All optional principal payments shall be
applied to the type of Advance designated by the Company when making such
payment, provided that any payments received during the continuance of an Event
of Default shall be applied on a pro rata basis to all Advances then outstanding
(with the portion applicable to Eurodollar Loans to be applied to such Loans
either immediately or at the end of the relevant Eurodollar Interest Period at
the option of the Company).
2.14 Required Principal Payments.
(a) Payments Related to Borrowing Base. On any date that the
Credit Requirement is in excess of the then-current Borrowing Base, the Company
shall make a mandatory payment to the Agent for the benefit of the Lenders in
the amount of such excess. Such payment shall be allocated pro rata among the
Lenders in accordance with the amounts of their outstanding Loans hereunder.
(b) Final Payment on Termination Date. The outstanding
principal balance of all Advances not repaid earlier, together with any accrued
and unpaid interest and Fees, unless required to be paid earlier pursuant to the
terms hereof, shall be due and payable on the Termination Date.
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2.15 Method of Payment.
All payments of principal, interest, and Fees hereunder shall
be made in immediately available funds to the Agent at the Agent's address
specified pursuant to Article XII, or at any other Lending Installation of the
Agent specified in writing by the Agent to the Company on the date due by 1:00
p.m. (Chicago time). Notwithstanding the foregoing, if the Company fails to
repay or give the Agent notice of repayment of a Federal Funds Advance before
10:00 a.m. (Chicago time) on the Business Day that the Company intends to repay
such Advance, any payment of such Advance received by the Agent on such Business
Day after the time required for payment or notice shall be deemed to have been
received by the Agent at the opening of business on the following Business Day.
Each payment delivered to the Agent for the account of any Lender shall be
delivered promptly by the Agent to such Lender in the same type of funds which
the Agent received at its address specified pursuant to Article XII or at any
Lending Installation specified in a notice received by the Agent from such
Lender. The Agent is hereby authorized to charge the account of the Company
maintained with First Chicago for each payment of principal, interest and fees
as it becomes due hereunder.
2.16 Notes; Telephonic Notices.
Each Lender is hereby authorized to record the principal
amount of each of its Loans and each repayment on the schedules attached to its
Note provided, however, that the failure to so record or any error in such
recording shall not affect the Company's obligations hereunder or under such
Note. The Company hereby authorizes the Lenders and the Agent to extend,
continue or convert Advances, effect Rate Option selections and transfer funds
to or for the account of the Company based on telephonic notices (confirmed
promptly thereafter by facsimile) made by any person or persons the Agent or any
Lender in good faith believes to be acting on behalf of the Company. The Company
agrees to deliver promptly to the Agent a written confirmation, if such
confirmation is requested by the Agent or any Lender, of each telephonic notice
signed by an officer of the Company authorized in writing to do so. If the
written confirmation differs in any material respect from the action taken
by the Agent and the Lenders, the records of the Agent and the Lenders shall
govern absent manifest error.
2.17 General Provisions as to Payments.
(a) The Company shall make each payment of principal or
interest on the Loans and shall pay all Fees not later than the times
stated in Section 2.15. The Agent shall promptly distribute to each
Lender its share of each payment
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of principal or interest or fees received by the Agent for the account
of such Lender.
(b) Amounts paid to or held by the Agent for the payment of
Loans shall not be deemed paid to a Lender until received by such
Lender by the later of 3:00 p.m. (Chicago time) or the close of
business on such date. If amounts are received by the Agent from the
Company prior to the applicable times stated in Section 2.15 and the
Agent fails to make a Lender's portion of such amount available to such
Lender by close of business on such date, the Company shall have no
obligation to pay any further interest on such payment and the Agent
shall pay to such Lender interest on such payment to the date paid to
such Lender by the Agent at a rate per annum equal to the then-current
Published Federal Funds Effective Rate.
2.18 Notification of Advances, Interest Rates and Prepayments.
Promptly after receipt thereof, the Agent will notify each
Lender by facsimile of the contents of each Advance Notice, Conversion/
Continuation Notice, and repayment notice received by it hereunder. Not later
than one Business Day prior to the Advance Date for each Eurodollar Advance, the
Agent will notify by facsimile each Lender and the Company of the interest rate
applicable to each Eurodollar Advance promptly upon determination of such
interest rate. When any Advances are outstanding or have been requested at the
Federal Funds Rate or the Alternate Base Rate the Agent will give each Lender
and the Company prompt notice by facsimile of each change in such rate.
2.19 Lending Installations.
Each Lender may book its Loans at any Lending Installation
selected by such Lender and may change its Lending Installation from time to
time. All terms of this Agreement shall apply to any such Lending Installation
and the Notes shall be deemed held by each Lender for the benefit of such
Lending Installation. Each Lender may, by facsimile or written notice to the
Agent and the Company, designate a Lending Installation through which Loans will
be made by it and for whose account Loan payments are to be made.
Notwithstanding the foregoing, no Lender may transfer its Loans to another
Lending Installation if such transfer would cause the Company to incur
additional indemnification costs under Section 3.1 hereof, and if after a Lender
transfers its Loans to another Lending Installation the Company incurs
additional indemnification costs under Section 3.1 hereof as a result of such
transfer, such Loans shall be transferred back to the original Lending
Installation.
2.20 Non-Receipt of Funds by Agent.
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(a) Unless the Company or a Lender, as the case may be,
notifies the Agent prior to the close of business on the Business Day
immediately preceding the date on which it is required to make payment to the
Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case
of the Company, a payment of principal, interest or fees to the Agent for the
account of the Lenders, that it does not intend to make such payment, the Agent
may assume that such payment has been made or will be made on the date required.
The Agent may, but shall not be obligated to, make the amount of such payment
available to the intended recipient in reliance upon such assumption. If such
Lender or the Company, as the case may be, has not in fact made or does not make
when due such payment to the Agent, the recipient of such payment shall, on
demand by the Agent, repay to the Agent the amount so made available together
with interest thereon in respect of each day during the period commencing on the
date such amount was so made available by the Agent until the date the Agent
recovers such amount at a rate per annum equal to (i) in the case of repayment
by a Lender, the Published Federal Funds Effective Rate for such day or (ii) in
the case of repayment by the Company, the interest rate applicable to the
relevant Loan. If a Lender fails to pay the Agent as provided in the preceding
sentence, the Company shall pay such amount to the Agent upon demand plus
interest (at the rate applicable to the applicable Advance) to the date of
repayment (but not including such date if payment is received prior to the
deadlines established in Section 2.15).
(b) Neither the Agent nor any Lender shall incur any liability
to the Company in acting upon any telephonic notice referred to in this
Agreement which the Agent or such Lender believes in good faith to have been
given by a duly authorized officer or other person authorized to borrow on
behalf of Company or for otherwise acting in good faith under this Section 2.20.
Upon the funding of Loans by the Lenders in accordance with this Agreement
(including satisfaction of all conditions thereto) pursuant to any telephonic
notice (with confirmation promptly thereafter by facsimile), the Company shall
have effected a borrowing hereunder. An Advance Notice (or telephonic notice in
lieu thereof) shall be irrevocable and the Company shall be bound to effect a
borrowing in accordance therewith.
(c) If the Agent fails to make any Loan funds received from a
Lender available to the Company for any reason and does not return such Loan
funds to such Lender on the same Business Day such funds were received by the
Agent, the Agent shall pay to such Lender, upon demand, interest from the date
such funds are received by the Agent from such Lender, provided such funds were
received prior to the deadlines for receipt set forth in Section 2.11 until the
date such corresponding amount is either made available by the Agent to the
Company within the time limits of Section 2.11 or so returned to such Lender, at
the rate per
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annum equal to the then-current Published Federal Funds Effective Rate
and the Company shall have no responsibility to such Lender with respect to
such funds until they are so made available to the Company by the Agent.
(d) Nothing in this Section 2.20 shall relieve any Lender from
its obligation to fund its share of any Advance, prejudice any rights the
Company may have against any Lender as a result of such Lender's failure to make
the amount of its Loan available to the Company or obligate any Lender to fund
any other Lender's share of any Advance.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1 Yield Protection.
If, after the date of this Agreement, the adoption of any law
or any governmental or quasi-governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any change in any
existing or future law, rule, regulation, policy, guideline or directive or the
interpretation or administration thereof, or the compliance of any Lender
therewith,
(i) subjects any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding on or from
payments due from the Company, or changes the basis of taxation of
payments to any Lender in respect of its Loans or other amounts due it
hereunder (excluding any tax imposed with respect to the overall net
income of any Lender or its Lending Installation and any franchise
taxes imposed on any such Lender or Lending Installation to the extent
such franchise taxes are in lieu of net income taxes), or
(ii) imposes or increases or deems applicable any
reserve, assessment, insurance charge, special deposit or
similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender or any applicable Lending
Installation (other than reserves and assessments taken into account in
determining the interest rate applicable to Eurodollar Advances), or
(iii) affects the amount of capital required or expected
to be maintained by any Lender or Lending Installation or any
corporation controlling any Lender or Lending Installation and such
Lender determines the amount of capital required is increased by or
based upon the existence of this Agreement or its obligation to make or
maintain Loans hereunder or of commitments of this type, or
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(iv) imposes any other condition which requires any
Lender or any applicable Lending Installation to make any payment
calculated by reference to the amount of loans held or interest
received by it in an amount deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
Lending Installation of making, renewing or maintaining its Commitment or any
Loan or to reduce any amount receivable in respect thereof or to reduce the rate
of return on the capital of such Lender or Lending Installation or any Person
controlling such Lender or Lending Installation as it relates to credit
facilities in the nature of that evidenced by this Agreement, then the Company
shall pay such Lender that portion of such increased expense incurred
(including, in the case of Section 3.1(iii), any reduction in the rate of return
on capital to an amount below that which it could have achieved but for such
law, rule, regulation, policy, guideline or directive and after taking into
account such Lender's policies as to capital adequacy) or reduction in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Loans and its Commitment to the extent such expenses or
reductions arise from and after the date which is 90 days before receipt by the
Company of demand for payment by such Lender. Notwithstanding the foregoing, if
any of the foregoing circumstances otherwise giving rise to the yield protection
provisions of this Section are imposed solely against a single Lender as a
result of circumstances or conditions which apply solely to that Lender and not
generally to lenders domiciled in the jurisdiction of such Lender's domicile,
then the yield protection provisions of this Section shall not apply with
respect to such circumstances.
3.2 Availability of Rate Options.
If any Lender determines that maintenance of any of its
Eurodollar Loans at a suitable Lending Installation would violate any applicable
law, rule, regulation or directive, whether or not having the force of law, the
Agent shall suspend the availability of the affected Rate Option and require any
Eurodollar Advances outstanding at the affected Rate Option to be repaid
immediately upon demand; or if the Required Lenders determine that deposits of a
type or maturity appropriate to match fund Eurodollar Advances are not
available, the Agent shall suspend the availability of the affected Rate Option
with respect to any such Loans or Advances made after the date of any such
determination. If the Required Lenders determine that the Eurodollar Rate does
not accurately reflect the cost of making a Eurodollar Advance at such Rate
Option, then, if for any reason whatsoever the provisions of Section 3.1 are
inapplicable, the Agent shall suspend the availability of the affected Rate
Option with respect
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to any Eurodollar Advance made after the date of any such determination.
3.3 Funding Indemnification.
If any payment of a Eurodollar Advance occurs on a date which
is not the last day of the applicable Eurodollar Interest Period, whether
because of acceleration, prepayment or otherwise, or if a Eurodollar Advance or
Federal Funds Advance is not made, continued or established by conversion on the
date specified by the Company for any reason other than default by the Lenders,
the Company will indemnify each Lender for any loss or cost incurred by it
resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain such Eurodollar
Advance.
3.4 Lender Statements; Survival of Indemnity.
To the extent reasonably possible, each Lender shall designate
an alternate Lending Installation with respect to its Eurodollar Advances to
reduce any liability of the Company to such Lender under Section 3.1 or to avoid
the unavailability of a Rate Option under Section 3.2, so long as such
designation is not to the economic detriment of such Lender and does not impose
any increased regulatory burdens on such Lender. Each Lender shall deliver to
the Agent and the Company a written statement of such Lender as to the amount
due, if any, under Section 3.1 or 3.3. Such written statement shall set forth in
reasonable detail the calculations upon which such Lender determined such amount
and shall be final, conclusive and binding on the Company in the absence of
manifest error. Determination of amounts payable under such Sections in
connection with a Eurodollar Advance shall be calculated as though each Lender
funded its related Loan through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the
Eurodollar Rate applicable to such Loan, whether in fact that is the case or
not. The amount specified in the written statement shall be payable within 15
days after receipt by the Company of the written statement. The obligations of
the Company under Sections 3.1 and 3.3 shall survive payment of the Obligations
and termination of this Agreement. In the event any Lender is affected by any of
the events described in Section 3.1 or 3.2 the Company shall have the right, if
no Default then exists, to repay in full all Credit Indebtedness owed to such
Lender provided that the Company has, with the approval of the Agent (not to be
unreasonably withheld), arranged to substitute a replacement lender for the full
amount of such Lender's Commitment.
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3.5 Lender Tax Agreement.
Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i) deliver to the Company and the Agent (A) two duly
completed copies of the United States Internal Revenue Service Form
1001 or 4224, or successor applicable form, as the case may be, and (B)
an Internal Revenue Service Form W-8 or W-9, or successor applicable
form, as the case may be;
(ii) deliver to the Company and the Agent two further copies
of any such form or certification on or before the date that any such
form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Company; and
(iii) obtain such extension of time for filing and complete
such forms or certifications as may reasonably be requested by the
Company or the Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms or any
certifications required hereby inapplicable or which would prevent such Lender
from duly completing and delivering any such form or making such certification
with respect to it and such Lender so advises the Company and the Agent. Such
Lender shall certify (i) in the case of Form 1001 or 4224 delivered in
accordance with this Section 3.5, that it is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes and (ii) in the case of a Form W-8 or W-9, that it is entitled to
an exemption from United States backup withholding tax. Each Person that shall
become a Lender or a Participant pursuant to Article XI shall, upon the
effectiveness of the related transfer, be required to provide all of the forms
and statements required pursuant to this Section, provided that in the case of a
Participant such Participant shall also furnish all such required forms and
statements to the Lender from which the related participation shall have been
purchased as well as to the Company and the Agent.
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ARTICLE IV
COLLATERAL AND BORROWING BASE
4.1 Eligible Collateral - FSA Common Stock.
FSA Common Stock shall constitute "Eligible FSA Common Stock"
owned by the Company as to which the Collateral Agent has received such evidence
as may be required under the Security Agreement and Control Agreement to confirm
the existence and perfection of the security interest in favor of the Collateral
Agent for the benefit of the Lenders in such FSA Common Stock.
4.2 Borrowing Base.
The term "Borrowing Base" means, as of any date, twenty-five
percent (25%) of the then-current Market Value of all Eligible FSA Common Stock.
4.3 Special Representations as to Collateral.
By delivering or causing the delivery of any Pledged Item to
the Collateral Agent or the Custodian under the control of the Collateral Agent
in pledge hereunder or under the Security Agreement the Company (the "Pledgor")
shall be deemed to have represented and warranted with respect to such Pledged
Item, that:
(1) Such Pledged Item constitutes Eligible Collateral;
(2) The Pledgor is the legal and equitable owner and holder of
such Pledged Item and has full power and authority to pledge such
Pledged Item. Such Pledged Item has been duly and validly pledged to
the Collateral Agent, is subject to no contractual restriction on the
creation of a Lien thereon, and is subject to no Lien other than the
lien of the Security Agreement in favor of the Secured Parties.
(3) So long as the Collateral Agent complies with the
procedures set forth in the Security Agreement and the Control
Agreement relating to control of Collateral the Collateral Agent, for
the benefit of the Secured Parties, will have a valid and perfected
first priority security interest in such Pledged Item and all proceeds,
products and profits derived therefrom.
4.4 Special Covenants.
(a) The Pledgor warrants and will defend the right, title and
interest of the Agent and the Collateral Agent for the benefit of the
Secured Parties in and to all Pledged Items and all other items of
Collateral against the claims and demands of all other Persons.
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(b) The Pledgor shall not materially amend or modify, or waive
any of the material terms and conditions of, or settle or compromise
any material claim in respect of, any Collateral or any rights related
to any of the foregoing.
(c) The Pledgor shall not sell, assign, transfer or otherwise
dispose of, or grant any option with respect to, or pledge or otherwise
encumber (except pursuant to this Agreement or the Security Agreement),
any of the Collateral or any interest therein, except as provided in
Section 4.5 with respect to releases of Collateral.
(d) If an Event of Default has occurred and is continuing, the
Company shall immediately remit to the Collateral Agent any
distributions or dividends received by the Company, whether in cash or
stock or in kind, arising from any Collateral (and all interest and
earnings thereon or with respect thereto).
(e) The Pledgor shall not withdraw or seek to withdraw or
substitute or seek to substitute any Pledged Item except as provided
herein and in the Security Agreement.
(f) The Pledgor shall do, execute, acknowledge and deliver, or
cause to be done, executed, acknowledged and delivered, all such other
acts, instruments and transfers as the Agent or the Collateral Agent
may reasonably request from time to time in order to create and
maintain a perfected first priority security interest in the Collateral
in favor of the Secured Parties and to create, maintain and preserve
the security and benefits intended to be afforded by this Agreement and
the Security Agreement, subject to no prior or equal security interest,
lien, charge or encumbrance, or agreement purporting to grant to any
Person a security interest in the Collateral.
4.5 Release of Collateral.
Upon the request of the Company delivered from time to time to
the Agent and the Collateral Agent, the Agent shall authorize the Collateral
Agent and the Custodian to release Collateral specified in such notice from the
lien of the Security Agreement, if, but only if, (i) at the time of such release
no Event of Default exists and no notice of a Default has been issued that has
not been cured, and (ii) any payment under Section 2.14(a) which may be required
(based on information relating to the Borrowing Base supplied to the Agent by
the Collateral Agent) as a result of such release has been made (or
contemporaneously with such release shall be made) so that the release of such
Collateral will not create a violation of any Lending Sublimit.
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4.6 Settlement Account.
There has been established with the Agent, for the ratable
benefit of the Secured Parties, a "cash collateral" account of the Company
#19-16688 ("Settlement Account") into which shall be deposited all cash proceeds
from the sale of any Pledged Item. Only the Agent shall have access to the
Settlement Account. Prior to the occurrence of a Default, to the extent that, as
determined by the Agent, the amounts in the Settlement Account are not needed to
keep the Borrowing Base equal to or greater than the Credit Requirement, the
Company may request that the Agent release funds from the Settlement Account,
which funds shall be applied by the Agent as directed by the Company. Upon the
occurrence of an Event of Default (and during the continuance thereof) all
amounts then on deposit in the Settlement Account, and any deposits made in the
Settlement Account during the continuance of such Event of Default, shall be
withdrawn by the Agent from the Settlement Account and shall be applied to the
Credit Indebtedness in accordance with the provisions of the Security Agreement
and Section 10.4 of this Agreement.
4.7 Termination.
If all Commitments shall have expired or been terminated
pursuant to the express terms hereof and no Credit Indebtedness shall be
outstanding, the Agent shall promptly deliver or cause to be delivered all cash
in the Settlement Account and all other Collateral to the Company. The receipt
by the Company of any cash in the Settlement Account and of all Pledged Items
returned or delivered to the Company pursuant to any provision of this Agreement
shall be a complete and full acquittance for the Pledged Items so delivered, and
the Agent, Collateral Agent and the Lenders shall thereafter be discharged from
any liability or responsibility therefor.
ARTICLE V
CONDITIONS PRECEDENT
Each Advance may be made only if the following conditions
precedent are met:
5.1 Initial Advance (Company).
Prior to the initial Advance hereunder, the Company shall have
delivered, or caused to be delivered, to the Agent:
(a) Copies of this Agreement duly executed by the Company for
each Lender and the Agent.
(b) A Security Agreement duly executed by the Company in the form
attached hereto as Exhibit D, together with a
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Control Agreement executed by the Company, the Collateral Agent and the
Custodian in a form satisfactory to the Agent and a confirmation from
FSA in a form satisfactory to the Agent.
(c) Notes payable to the order of each Lender duly executed by
the Company in the form attached hereto as Exhibit E.
(d) Certificates of the Secretary of the Company dated such
date, (i) accompanied by and certifying true and correct copies of the
Articles of Incorporation and By-laws of the Company and resolutions of
its Board of Directors authorizing the Company to execute, deliver and
perform this Agreement, the Security Agreement, the Control Agreement,
the Notes and all other documents executed by the Company in connection
herewith and (ii) confirming the incumbency and signatures of those
officers of the Company authorized to execute this Agreement, the
Security Agreement, the Control Agreement, and the Notes and otherwise
act on behalf of the Company hereunder or under the Security Agreement.
(e) The opinion of counsel to the Company in substantially the
same form and substance as the opinion letter attached hereto as
Exhibit F attached hereto and covering such other matters as the Agent
may reasonable request, together with appropriate good standing
certificates for the Company.
(f) Executed UCC-1 and UCC-3 Financing Statements as the Agent
may reasonably request.
(g) Evidence that the Company has paid all fees required to be
paid hereunder and under the Security Agreement on or before the date
of the first Advance.
(h) Information satisfactory to the Agent regarding the
Company's Year 2000 Program.
(i) A Borrowing Base Certificate.
(j) Such other documents as the Agent may reasonably
request.
5.2 Initial Advance (Lenders).
On or before the date of the initial Advance hereunder, the
Lenders shall have delivered, or caused to be delivered, to the Agent and the
Agent shall in turn, have delivered, or caused to be delivered, to the Company
one or more counterparts of this Agreement executed by the Lenders.
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5.3 All Advances.
On the date of each Advance, the Company shall be in compliance
with all the terms and provisions set forth herein and in the Security Agreement
on its part to be observed or performed; the representations and warranties of
the Company set forth in Articles IV and VI shall be true and correct in all
material respects on such date as if made on and as of such date (provided,
however that the representation and warranty contained in Section 6.6(c) shall
not apply to (i) conversions or continuations of Advances pursuant to Section
2.12, or (ii) Advances requested by the Company solely for the purpose of
repaying maturing commercial paper); and no Default or Event of Default shall
have occurred and be continuing on such date. On each Advance Date the Company
shall be deemed to have represented and warranted to the Lenders that no
violation of the requirements set forth in the preceding sentence exists on such
date after giving effect to the requested Advance. Prior to making an Advance
available to the Company under Section 2.11 on any day, the Agent shall have (i)
received notice from the Collateral Agent of the amount of the Borrowing Base
for such day, and (ii) confirmed, based solely upon the information contained in
such notices, the amount of Advances then-outstanding, and the Company's
certifications contained in the preceding sentence as to all other facts, that
the Borrowing Base will be greater than or equal to the Credit Requirement on
such date after giving effect to such Advance.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Lenders that:
6.1 Organization, Corporate Powers, Etc.
The Company is a corporation duly incorporated, validly
existing, in good standing and authorized to exercise its corporate powers,
rights and privileges under the laws of the jurisdiction in which it is
incorporated, is qualified to do business and is in good standing in all
jurisdictions where failure to be so qualified and in good standing would have a
material adverse effect upon its business, operations or financial condition,
and has all requisite corporate power and authority, to conduct its business, to
own its properties and to execute and deliver, and to perform all of its
obligations under, this Agreement, the Security Agreement, the Control Agreement
and the Notes.
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6.2 Corporate Authority, Etc.
The execution, delivery and performance by the Company of this
Agreement, the Security Agreement, the Control Agreement and the Notes have been
duly authorized by all necessary corporate action and do not and will not (i)
violate any existing provision of any law, rule, regulation (including, without
limitation, Regulation U or X of the Board of Governors or the rules and
regulations of the SEC or any regulatory commission of any jurisdiction), order,
writ, judgment, injunction, decree, determination or award currently in effect
having applicability to the Company or any of its Affiliates or of the charter
or by-laws of the Company or of any of its Affiliates, (ii) result in a breach
of or constitute a default under any indenture or loan or credit agreement or
any other agreement, lease or instrument to which the Company or any of its
Affiliates is a party or by which the Company or any of its Affiliates or any of
their respective properties may be bound or affected, or (iii) result in, or
require, the creation or imposition of any mortgage, deed of trust, assignment,
pledge, lien, security interest or other charge or encumbrance of any nature
upon or with respect to any of the respective properties of the Company or any
of its Affiliates (other than that arising hereunder or under the Security
Agreement with respect to the Collateral); and neither the Company nor any of
its Affiliates is in material default under any such law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award or any such
indenture, agreement, lease or instrument.
6.3 Compliance with Laws.
The Company and each of its Affiliates are in compliance with
the requirements of all applicable laws, rules, regulations and orders of any
governmental authority, non-compliance with which would, singly or in the
aggregate, materially and adversely affect their respective business or credits
including but not limited to financial condition and operations.
6.4 Government Approvals.
No authorization, consent, approval, license, exemption of or
filing or registration with any existing court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, is or
will be necessary for the valid execution, delivery and performance by the
Company of, or the validity or enforceability of, this Agreement, the Security
Agreement, the Control Agreement and the Notes.
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6.5 Valid and Binding Obligations.
This Agreement, the Security Agreement, the Control Agreement
and the Notes constitute legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their respective terms,
subject to bankruptcy and similar laws and other general restrictions on
creditor's rights and equitable principles (whether applied in an action at law
or a suit in equity).
6.6 Financial Statements.
(a) The balance sheet of the Company and its Subsidiaries as
of December 31, 1997 (which is presented in the Company's annual
report) and the related statements of income and changes in financial
position for the fiscal year then ended, copies of which have been
heretofore furnished to each of the Lenders, fairly present, in
conformity with GAAP, the financial condition of the Company and its
Subsidiaries as of such date and the results of the operations and
changes in financial position of the Company and its Subsidiaries for
such fiscal year.
(b) The quarterly financial statements of the Company and its
Subsidiaries submitted to the SEC or the Agent since the date of the
December 31, 1997 annual financial statements referred to in clause (a)
above fairly present, in conformity with GAAP, the financial condition
of the Company and its Subsidiaries as of the applicable dates of such
statements and the results of the operations and changes in financial
position of the Company and its Subsidiaries for the periods to which
such statements relate.
(c) Since the date of the December 31, 1997 statements there
has been no material adverse change, taken as a whole, in the business,
financial position, or operations of either the Company or any
Subsidiary.
6.7 Litigation.
Except as disclosed on Exhibit G attached hereto and as
otherwise set forth in the Company's annual report referred to in Section
6.6(a), there are no actions, suits or proceedings pending or, to the knowledge
of the Company after reasonable investigation, threatened against or affecting
the Company or any of its Affiliates or any of their respective properties
before any court, arbitrator or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign (including, without
limitation, the SEC or any regulatory commission of any jurisdiction), which, if
determined adversely to the Company or any Affiliate, as the case may be, would
be
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reasonably likely to, singly or in the aggregate, have a material adverse
effect on the financial condition, or on the respective properties or
operations, of the Company and its Affiliates or the transactions contemplated
by this Agreement, the Security Agreement and the Notes.
6.8 Use of Proceeds.
The Company will use the proceeds of the Loans solely for (i)
the purposes described in the recitals hereto, (ii) the funding or purchasing of
Mortgage Loans, (iii) the payment of principal, interest, fees, expenses, and
other obligations described in or contemplated by this Agreement, (iv) payment
of Debt of the Company existing on the date hereof, and (v) such other purposes
as may be permitted under this Agreement. No part of the proceeds of any Loan
will be used to purchase or carry, or to reduce or retire, any indebtedness
incurred to purchase or carry, any margin stock (within the meaning of
Regulations U and X of the Board of Governors) or to extend credit to others for
the purpose of purchasing or carrying any margin stock and the Company is not
engaged in purchasing or carrying margin stock.
6.9 Accuracy of Information.
All written information supplied by the Company to the Lenders
relating to the Company and its Affiliates was true, complete and accurate in
all material respects when made, and there has been no material adverse change
in the financial condition of the Company and its Affiliates from the time such
information was provided to the Lenders.
6.10 Accuracy of Representations and Warranties.
The representations and warranties of the Company contained in
each other document delivered in connection with this Agreement are, or when
such document is delivered will be, true and correct in all material respects
when made.
6.11 Investment Company.
The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940 or an "investment adviser" within the meaning of the
Investment Advisers' Act of 1940.
6.12 ERISA.
Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and any other applicable Federal or
state law; and to the best of its knowledge no event or condition is occurring
or exists with respect to any Plan concerning which the Company would be under
an obligation to
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furnish a report to the Lenders in accordance with Section 7.7(h).
6.13 Tax Returns.
The Company and each of its Affiliates has filed or caused to
be filed all material federal, state and local tax returns which, to its
knowledge, are required to be filed and has paid or caused to be paid all
material taxes as shown on such returns or on any assessment received by it, to
the extent that such taxes have become due, except taxes the validity of which
is being contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on its books in conformity with
GAAP.
6.14 Full Disclosure.
No event has occurred and no circumstance exists as a result
of which any information, statement, or representation concerning the Company
that has been provided to any Lender by the Company in connection herewith would
include an untrue statement of a material fact or omit to state any material
fact or any fact necessary to make the information, statements or
representations contained therein, in the light of the circumstances under which
they were made, not misleading.
6.15 GNMA, FHA, VA, FNMA, AND FHLMC Eligibility.
The Company is: (i) an FHA-Approved Mortgagee in good standing,
a VA-Approved Lender, a FHLMC-Approved Lender and a FNMA-Approved Lender and
meets all eligible requirements of law and governmental regulation so as to be
eligible to originate, purchase, hold and service Mortgage Loans insured by
FHA and to issue any FHLMC, FNMA or GNMA security; (ii) an approved seller and
servicer in good standing of Mortgage Loans to each Federal Agency; and (iii)
an approved issuer and servicer in good standing of FHLMC, FNMA and GNMA
securities and meets all FHLMC, FNMA and GNMA requirements, requirements of law
and governmental regulations so as to be able to issue FHLMC, FNMA and GNMA
securities and to service the Mortgage Loans that secure such securities.
6.16 No Defaults.
No Default has occurred and is continuing.
6.17 Year 2000 Compliance.
The Company has made a full and complete assessment of the
Year 2000 Issues and has a realistic and achievable program for remediating the
Year 2000 Issues on a timely basis (the "Year 2000 Program"). Based on such
assessment and on the Year 2000
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Program the Company does not reasonably anticipate that Year 2000 Issues will
have a material adverse effect on the Company's operations or financial
condition.
ARTICLE VII
AFFIRMATIVE COVENANTS
The Company covenants and agrees with the Lenders that, so
long as this Agreement shall remain in effect and so long as any amounts are
outstanding under the Notes or this Agreement, unless the Required Lenders shall
otherwise consent in writing, the Company will:
7.1 Payment of Debts, Taxes, Etc.; Maintenance of Insurance.
(a) Pay all debts and perform all obligations, and cause each
of its Subsidiaries to pay all debts and perform all obligations,
promptly and in accordance with the terms thereof and pay and
discharge, and cause each of its Subsidiaries to pay and discharge, all
taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits, or upon any properties belonging to it,
prior to the date on which penalties attach thereto, and all lawful
claims, which, if unpaid, might become a lien or charge upon any
properties of the Company or of such other Subsidiary, provided that
none of the Company or any other Subsidiary shall be required to pay
any such tax, assessment, charge, levy or claim which is being
contested in good faith and by appropriate proceedings and such contest
shall operate to stay any material adverse effect of such lien or
charge;
(b) Use its best efforts to adhere to customary practices and
standards in the industry insofar as adherence to such practices and
standards would require the Company to cause obligors whose
indebtedness is secured by Mortgages for which the Company is the
mortgagee to comply with the provisions of such Mortgages with respect
to the payment of real estate taxes and insurance premiums in
connection with the real estate securing such indebtedness; and
(c) Maintain, and cause each of its Subsidiaries to maintain,
insurance on its properties and other insurance in amounts and types
and with provisions and insurers as shall be satisfactory to the
Required Lenders, and at all times furnish to any Lender (upon written
request by such Lender) copies of its, and each of its Subsidiaries',
current Mortgage Bankers Blanket Bond and of its, and each of its
Subsidiaries', insurance policy containing errors and omissions
coverage or mortgage impairment coverage, and
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providing, in the case of Mortgage Bankers Blanket Bonds, to the extent
possible, that they are not cancelable without thirty days' prior
written notice to the Agent.
7.2 Preservation of Corporate Existence.
Preserve and maintain, and cause each of its Subsidiaries
which is a material part of the Company's overall business operations to
preserve and maintain, its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and qualify and remain
qualified as a foreign corporation in each jurisdiction in which such
qualification is necessary in view of its business operations or the ownership
of its properties.
7.3 Compliance with Laws, Etc.
Comply, and cause each of its Subsidiaries to comply, with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority, non-compliance with which would be reasonably likely to,
singly or in the aggregate, materially adversely affect its business or credit,
unless the same shall be contested by the Company or such other Subsidiary, as
the case may be, in good faith and by appropriate proceedings and such contest
shall operate to stay the material adverse effect of any such non-compliance.
7.4 Requested Information.
At any reasonable time and from time to time, on reasonable
prior notice furnish to the Agent, any requesting Lender or any agents or
representatives thereof, or permit such agents or representatives to examine and
make copies of, the records and books of account of, and visit the properties
of, the Company or any of its Subsidiaries and, so long as representatives of
the Company (as chosen by senior management of the Company) accompany the Agent
or any such other Lender, the Company's Affiliates, and to discuss the affairs,
finances and accounts of the Company, its Subsidiaries and such Affiliates with
any of its officers.
7.5 Keeping of Records and Books of Account.
Keep or cause to be kept adequate records and books of account
in which complete entries will be made in accordance with GAAP, consistently
applied (except for changes concurred in by the Company's independent auditors)
reflecting all financial transactions of the Company and its Subsidiaries.
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7.6 Maintenance of Approvals, Filings and Registrations.
At all times maintain in effect, renew and comply with, and
cause each of its Subsidiaries to effect, renew and comply with all the terms
and conditions of all consents, licenses, approvals and authorizations as may be
necessary under any applicable law or regulation for the execution, delivery and
performance of this Agreement, the Security Agreement, the Control Agreement,
and the Notes and to make this Agreement and such other documents legal, valid,
binding and enforceable.
7.7 Reporting Requirements.
Furnish to the Agent for distribution to each Lender:
(a) As soon as possible after becoming aware (i) of the
occurrence of any Default, or (ii) that any of the representations and
warranties contained in Article IV or Article VI has ceased to be true
and correct at any time since the last Advance hereunder (or, if no
Advance has taken place, the execution and delivery of this Agreement),
telephone advice confirmed in writing within three (3) Business Days by
a statement of the president or other Authorized Officer of the Company
setting forth the details thereof and the action which the Company
proposes to take with respect thereto.
(b) As soon as available and in any event within ninety (90)
days after the end of each fiscal year of (i) the Company, a
consolidating and consolidated balance sheet of the Company and its
Subsidiaries and (ii) FSA, a consolidated balance sheet of FSA, each as
of the end of such fiscal year and the related statements of income and
changes in financial position of the Company and its Subsidiaries,
including cash flow statements for such fiscal year on a consolidating
and consolidated basis, and the related statements of income and
changes in financial position of FSA and its Subsidiares, including
cash flow statements for such fisal year on a consolidated basis,
setting forth in each case in comparative form the figures as of the
end of and for the previous fiscal year, all reported in accordance
with GAAP and audited and unqualified by KMPG Peat Marwick, Coopers &
▇▇▇▇▇▇▇ or other independent public accountants of nationally
recognized standing.
(c) As soon as available and in any event within forty-five
(45) days after the end of each fiscal quarter of the Company, a
consolidating and consolidated balance sheet of the Company and its
Subsidiaries as of the end of such quarter and the related statements
of income for such quarter and for the portion of the Company's fiscal
year ended at the end of such quarter, all certified (subject to
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normal quarter-end adjustments) as to fairness of presentation,
generally accepted accounting principles and consistency by the chief
financial officer of the Company, together with the most recent
quarterly financial reports filed by FSA with the SEC.
(d) Simultaneously with the delivery of each set of financial
statements referred to in clauses (b) and (c) above, a certificate of
the chief financial officer of the Company (A) setting forth in
reasonable detail the calculations required to establish whether the
Company was in compliance with the requirements of Sections 7.9, 8.5,
8.9, 8.10, 8.16, and 8.17 and (B) stating whether there exists on the
date of such certificate any Default and, if any Default then exists,
setting forth the details thereof and the action which the Company is
taking or proposes to take with respect thereto.
(e) Promptly after the commencement thereof, notice of (i) any
action or proceeding which has more than a remote possibility of a
determination adverse to the Company or its Subsidiaries (a
"Non-Frivolous Action") instituted by or against the Company or any of
its Subsidiaries in any Federal or state court or before any commission
or other regulatory body (Federal, state or local, domestic or
foreign), or any such Non-Frivolous Action threatened against the
Company or any of its Subsidiaries in writing, which, if adversely
determined, would have a material adverse effect upon the business,
assets or financial condition of the Company or any mortgage banking
affiliate of the Company, and (ii) any other action, event or condition
of any nature which may lead to or result in a material adverse effect
upon the business, assets or financial condition of the Company or
which, with or without notice or lapse of time or both, would
constitute a default under any other material contract, instrument or
agreement to which the Company is a party or by which the Company or
its properties or assets may be bound or subject.
(f) As soon as possible after becoming aware of any change in
the Company's long-term unsecured debt ratings as rated by S&P or
▇▇▇▇▇'▇, a copy of the S&P or ▇▇▇▇▇'▇ publication of such ratings or
other written confirmation of such ratings.
(g) Such other information, financial or otherwise, respecting
the Collateral and the Company's financial statements and condition as
the Agent or any Lender may from time to time reasonably request.
(h) As soon as possible, and in any event within thirty (30)
days after the Company knows or has reason to
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know that any of the events or conditions enumerated below with respect
to any Plan have occurred or exist, a statement signed by an Authorized
Officer of the Company setting forth details respecting such event or
condition and the action, if any, which the Company or, to the best
knowledge of the Company, any ERISA Affiliate proposes to take with
respect thereto; provided, however, that if such event or condition is
required to be reported or notice thereof given to PBGC, such
statement, together with a copy of the relevant report or notice to
PBGC, shall be furnished to the Agent within ten (10) days after it is
reported or notice thereof given to PBGC:
(i) the occurrence of any Reportable Event;
(ii) the filing under Section 4041 of ERISA of
a notice of intent to terminate any Plan or the termination of
any Plan;
(iii) the institution by PBGC of proceedings
under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan; or
(iv) the complete or partial withdrawal by the
Company, any Subsidiary or any ERISA Affiliate from a Plan, or
the receipt by the Company, any Subsidiary or any ERISA
Affiliate of notice from a Plan that it is in reorganization
or insolvency pursuant to Section 4241 or 4245 of ERISA or
that it intends to terminate or has terminated under Section
4041A of ERISA, if such withdrawal, reorganization, insolvency
or termination has resulted or may reasonably be expected to
result in any liability of the Company, any Subsidiary or any
ERISA Affiliate to the PBGC in connection with such Plan or to
such Plan.
(i) Promptly after the request of the Agent, copies of each
annual report filed pursuant to Section 104 of ERISA with respect to
each Plan (including, to the extent required by Section 104 of ERISA,
the related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information
referred to in Section 103 of ERISA) and each annual report filed with
respect to each Plan under Section 4065 of ERISA.
(j) As soon as available but in any event within thirty (30)
days after the end of each calendar quarter, a servicing report and
analysis which shall show the status of all Mortgages serviced by the
Company including those which are delinquent, all in such form and
detail and including such additional information as the Agent may
reasonably
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request. Such servicing report shall show separately information
concerning any Mortgages or securities with respect to which there is
recourse to the Company.
(k) As soon as available but in any event within thirty (30)
days after the end of each calendar quarter, a production information
report and a secondary marketing report for such quarter satisfactory
to the Agent.
(l) Promptly upon receipt, a copy of any notice from any
Federal Agency or any private mortgage insurer to the effect that it is
or is contemplating withdrawing its approval of the Company as a
FHA-Approved Mortgagee, FHLMC-Approved Lender, FNMA-Approved Lender or
VA-Approved Lender or as an approved seller and servicer for FNMA,
FHLMC and GNMA.
(m) Promptly after the Company's or any Subsidiary's
acquisition or creation of a new Subsidiary, written notice of such
event, which notice shall set forth the details of such event, the
percentage of capital stock owned by the Company or any other
Subsidiary, and the jurisdiction of incorporation of such new
Subsidiary.
(n) Promptly after the sending or filing thereof, copies of
all such proxy statements, financial statements and reports which the
Company sends to its stockholders, and copies of all regular, periodic
and special reports (other than Form 8-K reports containing only the
distribution reports relating to the Fireman's Fund Mortgage
Corporation Agency MBS Multi-Class Pass-Through Certificates, which the
Company need send to the Agent only and which the Agent shall make
available to the other Lenders upon request) and all final prospectuses
which the Company files with the SEC (if applicable), or any
governmental authority which may be substituted therefor, any Federal
Agency, or any other governmental agency.
(o) [Intentionally Omitted].
(p) As soon as available and in any event within forty-five
(45) days after the end of each fiscal quarter of the Company, a list
showing (i) each individual Guaranty of the Company then in effect for
which the maximum potential liability is in excess of $1,000,000 (and
the amounts thereof) and (ii) the aggregate amount of all other
Guarantees of the Company then in effect, certified as true and correct
by an Authorized Officer of the Company. Individual Guaranties shall be
reported under clause (i) if the potential liability could exceed
$1,000,000 even though the then current outstanding Indebtedness which
is guaranteed is less than $1,000,000. Such report shall
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include the maximum amount guaranteed and the then current outstandings
(showing "none" if there are no current outstandings). If there are no
Guaranties to be reported, a report shall still be furnished indicating
no such Guaranties exist.
(q) Such other information respecting the business, properties
or the condition or operation of the Company or its Subsidiaries,
financial or otherwise, as the Agent or any Lender may from time to
time reasonably request.
(r) Notice of the occurrence of any of the following events,
immediately upon the Company's acquisition of knowledge thereof: (i)
the occurrence of an "Event of Default" (as defined in Article Five of
the Subordinated Debt Indenture), (ii) the deferral by the Company of
any quarterly installment of interest on the Subordinated Debt, (iii)
the acceleration of the entire principal amount of any series of
securities issued under the Subordinated Debt Indenture, (iv) the
execution of any amendment or supplement to the Subordinated Debt
Indenture, (v) the resignation or removal of the trustee under the
Subordinated Debt Indenture, or any change in the notice address of
such trustee, or (vi) any developments with respect to Year 2000 Issues
that are reasonably anticipated to have a material adverse effect on
the Company's operations or financial condition.
7.8 Indemnification.
Pay, and protect, indemnify and save harmless, the Agent, the
Collateral Agent, each of the Lenders and the Affiliates of each of the
foregoing and, in their capacity as such, their respective officers, directors,
shareholders, controlling persons, employees, agents and servants from and
against all liabilities, losses, claims, damages, penalties, causes of action,
suits, costs and expenses (including, without limitation, attorneys' fees and
expenses) or judgments of any nature arising from the default of the Company in
the performance of its agreements, rights or obligations contained in this
Agreement, the Security Agreement, the Control Agreement, the Notes or any other
instrument or agreement entered into by the Company in connection herewith or
therewith or arising out of this Agreement or the transactions contemplated
herein; provided, that the Company shall not have any obligation hereunder to
the Agent, the Collateral Agent or any Lender or any other Person indemnified
pursuant to this Section 7.8 with respect to indemnified liabilities arising
from (1) the gross negligence or willful misconduct of such Person indemnified
pursuant to this Section 7.8, or (2) legal proceedings commenced against the
Agent, the Collateral Agent or any Lender by any other Lender or any
Participant. If any action, suit or proceeding arising from
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any of the foregoing is brought against the Agent, the Collateral Agent or any
Lender or any other person indemnified pursuant to this Section 7.8, the Company
will, if within a reasonable time requested in writing to do so and at its
expense, resist and defend such action, suit or proceeding or cause the same to
be resisted and defended by counsel designated by the Company (which counsel
shall be satisfactory to the party being indemnified). Notwithstanding anything
to the contrary in this Agreement, the obligations of the Company under this
Section 7.8 shall survive any termination of this Agreement.
7.9 Maintenance of Net Worth.
At all times, maintain the sum of (x) Adjusted Consolidated
Tangible Net Worth plus (y) Subordinated Debt in an amount at least equal to the
sum of:
(i) $367,400,000, plus
(ii) fifty percent (50%) of the sum of (A) the positive
cumulative quarterly increases, if any, in Adjusted Consolidated
Tangible Net Worth of the Company after March 31, 1998 (computed
without regard to any increase or decrease resulting from (1) the
contribution or distribution of Restricted FSA Securities, (2) cash
equity contributions to the Company, (3) the receipt of proceeds of
issuances of stock of the Company, (4) the exchange of Subordinated
Debt for Series A Preferred Stock, (5) the payment of Restricted
Payments) for each calendar quarter beginning with calendar quarter
beginning April 1, 1998 plus (B) the cumulative after-tax cost to the
Company of all interest payments on the Subordinated Debt made by the
Company after March 31, 1998, less
(iii) the amount of Special Dividends paid.
7.10 Federal Agency Approvals.
Maintain its status as a FHA-Approved Mortgagee, remain
eligible to obtain VA guaranties of Mortgage Loans and remain approved by each
Federal Agency as a seller/servicer.
7.11 [Intentionally Omitted].
7.12 Borrowing Base Certificate.
Within the first ten (10) days of each month, and within three
Business Days after any request therefor by the Agent, deliver to the Agent a
Borrowing Base Certificate (which shall include the Company's reconciliation of
any discrepancies from the Collateral Agent's reports on the status of Eligible
Collateral at the end of the preceding month), together with a
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certificate of the chief financial officer or other Authorized Officer of the
Company confirming compliance with Sections 7.9, 8.5, 8.9, and 8.12. Each
regular monthly Borrowing Base Certificate shall contain information as of the
close of business on the final Business Day of the preceding month. Any
Borrowing Base Certificate delivered pursuant to the request of the Agent shall
contain information as of the close of business on the day on which the Agent
requested such Borrowing Base Certificate. The Agent shall deliver to the
Lenders copies of all Borrowing Base Certificates received by the Agent.
7.13 Further Assurance.
As from time to time requested by the Agent and agreed upon by
the Required Lenders, at the cost and expense of the Company, execute and
deliver to the Agent all such documents and instruments and do all such other
acts and things as may be reasonably required to enable the Lenders to exercise
and enforce their rights under this Agreement and to realize thereon, and as may
be necessary to validate, preserve and protect the position of the Lenders under
this Agreement. With respect to those elements of Collateral as to which the
Lenders' security interest may not be perfected by delivery to the Collateral
Agent with the Security Agreement or the filing of a UCC-1 financing statement,
the Company as requested by the Agent at the direction of the Required Lenders,
shall execute and deliver possession of such elements of the Collateral to the
Agent, have the interest of the Lenders therein recorded on the books of any
institution holding such assets for the Company, obtain consents to assignment
in favor of the Lenders from the counterparties thereto or take such other
actions as may be necessary to perfect the security interest of the Lenders
therein (provided, however, that unless an Event of Default is continuing or the
Required Lenders have requested otherwise, consents to assignments of options,
futures contracts or other interest rate protection products in favor of the
Lenders from the counterparties thereto shall not be required).
7.14 Maintenance of Properties.
Do all things necessary to maintain, preserve, protect and
keep its properties in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times.
7.15 Payment of Taxes.
On demand pay, or reimburse the Agent and Lenders for, all
stamp, documentation, intangible, or similar taxes, and all penalties or
interest that may be due with respect thereto, that may be imposed or asserted
by the State of Florida or any other
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jurisdiction in connection with the execution and delivery of the Credit
Documents or the making of the Loans contemplated by this Agreement.
7.16 Year 2000 Compliance.
Take and will cause each of its Subsidiaries to take all such
actions as are reasonably necessary to successfully implement the Year 2000
Program and to assure that Year 2000 Issues will not have a material adverse
effect on the Company's operations or financial condition. At the request of the
Agent, the Company will provide a description of the Year 2000 Program, together
with any updates or progress reports with respect thereto.
ARTICLE VIII
NEGATIVE COVENANTS
The Company covenants and agrees with the Lenders that so long
as this Agreement shall remain in effect or any amounts are outstanding under
the Notes or this Agreement, unless the Required Lenders (or all Lenders, if
expressly required) shall otherwise consent in writing, the Company (on a
consolidated basis with its Subsidiaries) shall not, directly or indirectly:
8.1 Use of Proceeds.
Use the amounts obtained under this Agreement for any purposes
other than (i) the purposes described in the recitals hereto, (ii) the funding
or purchasing of Mortgage Loans, (iii) the payment of principal, interest, fees,
expenses and other obligations described in or contemplated by this Agreement,
(iv) payment of Debt of the Company existing on the date hereof, and (v) such
other purposes permitted under this Agreement. The Company is not engaged, nor
will it engage, principally or materially in the business of extending credit
for the purpose of "purchasing" or "carrying" any "margin stock" (within the
meanings of each of the quoted terms under Regulation U). If requested by a
Lender, the Company shall each furnish to the Agent for the benefit of the
Lenders a statement in conformity with the requirements of Federal Reserve Form
U-1 referred to in Regulation U. No part of the proceeds of any Loan will be
used for any purpose which violates, or which would be inconsistent with, the
provisions of the regulations of the Board of Governors as now and from time to
time hereafter in effect.
8.2 [Intentionally Omitted].
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8.3 Mergers; Subsidiaries.
Merge or consolidate with any Person, or sell or otherwise
dispose of (whether in one transaction or in a series of transactions) the
shares of any of its Subsidiaries to any Person, provided that the Company may,
after prior written notice to the Agent and Lenders, (i) undertake such a merger
or consolidation so long as the Company shall be the surviving or resulting
company and (ii) take such action with respect to any Subsidiary which is not a
material part of the Company's overall business operations.
8.4 Sales.
Sell, assign, lease or otherwise dispose of (collectively,
"Transfer"), whether in one transaction or a series of transactions, all or
substantially all of its assets (whether now owned or hereafter acquired) to any
Person, or allow any Subsidiary to Transfer substantially all of its assets to
any Person (other than another Subsidiary or a Parent), provided that the
Company may after prior written notice to the Agent and Lenders allow such
action with respect to any Subsidiary which is not a material part of the
Company's overall business operations. Transfers described in this Section 8.4
and the mergers, consolidations and dispositions described in Section 8.3
(whether or not permitted by the provisions of such Sections) are referred to
herein as "Fundamental Changes."
8.5 Debt.
Allow the total Debt (excluding Subordinated Debt) of the
Company and its Subsidiaries (on a consolidated basis) to exceed the sum of the
following (the "Debt Threshold"):
(a) one hundred percent (100%) of the value of the Company's cash
and "short-term investments";
(b) ninety-eight percent (98%) of the value of the Company's
"mortgage loans receivable";
(c) ninety percent (90%) of the value of the Company's "pool
loan purchases" and "mortgage claims receivable", to the extent such
assets represent VA Mortgage Loans and FHA Mortgage Loans repurchased
by the Company from GNMA security holders including the amount of
past-due interest advanced by the Company on account of such Mortgage
Loans which is guaranteed by VA or insured by FHA, provided however,
the Required Lenders can elect upon 90 days prior notice to the Company
not to include such interest amount in the calculation of this
component of the Debt Threshold;
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(d) seventy-five percent (75%) of the amount of "Servicing Sale
Receivables" which would qualify as "Eligible Pledged Servicing Sale
Receivables" if such "Servicing Sale Receivables" (as such terms are
defined under the Other Facility) were pledged as Collateral under the
Other Facility;
(e) sixty percent (60%) of the amount of the Company's servicing
and hedging rights related thereto, as determined in accordance with
GAAP on a monthly basis (or more frequently if requested by the
Agent); and
(f) fifty percent (50%) of the value of Approved Equity
Securities, as shown on the most recent quarterly financial statements
(or as reported on a more frequent basis if required by Agent) provided
that the maximum amount that can be included in this component of the
Debt Threshold shall be $200,000,000, as such amount may be reduced in
accordance with Section 8.16.
Terms set forth in quotes in this Section shall have the meanings given such
terms in the Company's consolidated financial statements.
8.6 Ratably Secured Debt.
Incur any Debt which may be entitled to a security interest in
any of the Collateral which would be equal or superior to the security interest
of Collateral Agent as agent for the Secured Parties.
8.7 Guarantees.
Create, incur, assume or suffer to exist any Guarantee of the
Company except Guarantees in an aggregate combined amount for the Company not to
exceed $25,000,000 at any one time outstanding.
8.8 Investments.
Make or own any Investment in any Person, except:
(a) Investments in the ordinary course of its mortgage banking
business in connection with Mortgage Loans, collateralized mortgage
obligations and other mortgage-related securities;
(b) Investments in the ordinary course of its mortgage banking
business in connection with puts, calls, swaps and other interest rate
hedging products, options and futures contracts to provide protection
from interest rate fluctuation;
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(c) Investments in the ordinary course of its mortgage banking
business in connection with real estate acquired by foreclosure;
(d) Investments in the ordinary course of the Company's
mortgage banking business in connection with servicing rights;
(e) Investments in the ordinary course of its mortgage banking
business in connection with commitments from investors to purchase
Mortgage Loans or mortgage-related securities;
(f) the acquisition of Mortgage Loans, FHLMC, FNMA or GNMA
securities and mortgage servicing contracts of another Person engaged
in mortgage-related businesses;
(g) Investments in Cash Equivalents;
(h) those Investments in existence on the date hereof
and disclosed in the financial statements referred to in
Section 6.6;
(i) loans to officers of the Company in an aggregate
principal amount at any time outstanding not to exceed
$5,000,000;
(j) loans and advances to employees of the Company, or its
Subsidiaries for (i) travel and entertainment in the ordinary course of
business in an aggregate amount for the Company and its Subsidiaries
not to exceed $100,000 at any one time outstanding and (ii) relocation
expenses in the ordinary course of business in an aggregate amount for
the Company and its Subsidiaries not to exceed $1,000,000 at any one
time outstanding;
(k) Investments of up to 10% of the Company's net worth (as
determined in accordance with GAAP) by the Company in its Subsidiaries
and investments by such Subsidiaries in the Company and in other
Subsidiaries;
(l) Investments made by any Subsidiary in the ordinary course
of its business;
(m) Investments in equity securities which (1) are traded on
the New York Stock Exchange, the American Stock Exchange or The NASDAQ
Stock Market, (2) are subject to no transfer restrictions, and (3) have
a readily determinable market value, in an aggregate market value
amount not to exceed $25,000,000 (which market value shall be
determined by the Company and reported to the Agent on a monthly basis,
or more frequently at the request of the Agent);
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▇▇
(▇) ▇▇▇▇▇▇▇▇▇▇ and reverse repurchase contracts incidental to the
mortgage-related businesses of the Company and its Subsidiaries in an
aggregate dollar amount not to exceed $250,000,000 and $25,000,000,
respectively;
(o) the FSA Common Stock and Restricted FSA Securities; and
(p) other Investments which are the result of a merger or
consolidation permitted under Section 8.3 if, after giving effect to
any such Investment, the consolidated net revenues (determined in
accordance with GAAP) of all business segments that constitute
mortgage-related businesses of the Resulting Entity for the Fundamental
Change/Investment Calculation Period are at least seventy-five percent
(75%) of the total net revenues (determined in accordance with GAAP) of
the Resulting Entity for the Fundamental Change/Investment Calculation
Period.
8.9 Leverage Ratios.
Permit the ratio of (1) Funded Debt less Subordinated Debt to (2)
Adjusted Consolidated Tangible Net Worth plus Subordinated Debt to exceed 4.0 to
1.
8.10 Recourse Servicing.
Permit the aggregate principal balance of Mortgage Loans
covered by Recourse Servicing at any time after the date hereof to exceed (i)
$2,350,000,000 less (ii) all reductions in the aggregate principal balance of
such Mortgage Loans covered by Recourse Servicing as of March 31, 1998, whether
by reason of prepayment or amortization from and after April 1, 1998.
8.11 Liens.
Permit, or permit any Subsidiary to permit, any Lien to exist
on any of its property or assets (including, without limitation, the Company's
rights under any contracts relating to mortgage sales and under any Servicing
Agreements) other than:
(a) Liens for taxes, assessments and other governmental
impositions not yet due or which are being contested in good faith by
appropriate proceedings, provided, that adequate reserves with respect
thereto are maintained on the books of the Company or its Subsidiaries,
as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business and securing obligations which are not overdue for a period of
more than 60 days or
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which are being contested in good faith by appropriate proceedings,
provided, that adequate reserves with respect thereto are maintained on
the books of the Company or its Subsidiaries, as the case may be, in
accordance with GAAP;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of the Company or
such Subsidiary;
(f) Liens of landlords, arising solely by operation of law and
which are not avoidable as a matter of law, on fixtures and moveable
property located on premises leased in the ordinary course of business,
provided, that the rental payments secured thereby are not yet due;
(g) Liens arising out of judgments or awards against the
Company or any Subsidiary with respect to which the Company or such
Subsidiary is prosecuting an appeal or proceeding for review and the
Company or such Subsidiary is maintaining adequate reserves in
accordance with GAAP;
(h) Liens which were in existence on December 31, 1997 and
which secured obligations reflected in the financial statements
referred to in Section 6.6;
(i) Liens upon real and/or tangible personal property, which
property was acquired after December 31, 1997 (by purchase,
construction or otherwise) by the Company or its Subsidiaries, each of
which Liens either (A) existed on such property before the time of its
acquisition and was not created in anticipation thereof at the request
or direction of the Company, or (B) was created solely for the purpose
of securing Debt representing, or incurred to finance, refinance or
refund, the cost (including the cost of construction) of the respective
property; provided, that no such Lien shall extend to or cover any
property of the Company or such Subsidiary other than the respective
property so acquired and improvements thereon;
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(j) Liens incidental to the conduct of the Company's
mortgage-related businesses or the ownership of its property or arising
out of transactions entered in the ordinary course of the Company's
mortgage-related businesses which do not secure Debt and do not, in the
aggregate, materially detract from the value of its properties in the
aggregate or materially impair the use thereof in the ordinary course
of the Company's business;
(k) Liens arising from repurchase agreements relating to pools
of Mortgage Loans or FHLMC, FNMA or GNMA securities that constitute
Debt of the Company or relating to servicing agreements securing Debt
of the Company, provided that the aggregate principal amount of Debt
secured by such Liens shall not exceed $200,000,000 at any time and
shall not cause any violation of the restriction on Debt imposed by
Section 8.5;
(l) Liens on assets of corporations which become Subsidiaries
after the date of this Agreement; provided, that (i) such Liens existed
at the time such corporation became a Subsidiary and were not created
in anticipation thereof, (ii) any such Lien is not spread to cover any
property or assets of such corporation after the time such corporation
becomes a Subsidiary (other than any such spreading resulting from
"after-acquired property" clauses in existence on the date such
corporation became a Subsidiary) and (iii) the amount of Debt secured
thereby is not increased;
(m) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any Lien
referred to in the foregoing clauses; provided, that the principal
amount of Debt secured thereby shall not exceed the principal amount of
Debt so secured immediately prior to the time of such extension,
renewal or replacement, and that such extension, renewal, or
replacement Lien shall be limited to all or a part of the property
which secured the Lien so extended, renewed or replaced (plus
improvements on such property);
(n) Liens (not otherwise permitted hereunder) which secure
obligations not exceeding (as to the Company and all Subsidiaries)
$30,000,000 in an aggregate principal amount at any one time
outstanding;
(o) Liens (not otherwise permitted hereunder) which secure
obligations (as to the Company and all Subsidiaries) (1) incidental to
forward delivery contracts in the ordinary course of the Company's
mortgage-related businesses or (2) incidental to Investments by the
Company in the ordinary course of its mortgage banking business in
connection with
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puts, calls, swaps and other interest rate hedging products, options
and futures contracts to provide protection from interest rate
fluctuation; and
(p) the Liens arising under the Other Facility or under the
Security Agreement or any other Credit Document;
provided, however, that so long as no Event of Default has occurred and is
continuing, the Company may also permit Liens on FHLMC, FNMA or GNMA securities
and Mortgage Loans owned by the Company (other than FHLMC, FNMA or GNMA
securities or Mortgage Loans constituting Collateral under the Other Facility)
to secure Debt incurred from sources other than the Secured Parties for the
purpose of originating or purchasing such securities or Mortgage Loans.
8.12 Credit Requirement.
Permit the Borrowing Base to be less than the Credit
Requirement.
8.13 Affiliate Transactions.
Enter, or permit any Subsidiary to enter, into any
transactions with the Company's Parent or Affiliates that is not an arm's-length
transaction or that in any material respect is less advantageous to the Company
or such Subsidiary than a similar typical transaction with an unrelated
third-party; make any loans or advances to the Parent or any Affiliates with
financial terms more advantageous to the Parent or Affiliate than the terms of
loans and advances made to the Company from any such Parent or Affiliate; or
make any net loans or advances to the Parent or any Affiliates which would cause
any violation of Sections 7.9 or 8.9.
8.14 Conduct of Business.
Except as permitted under Section 8.8:
(a) enter into any material line of new business other than
businesses related to its current businesses, materially change the
nature of its business, cease to carry on its business as now
conducted, or
(b) fail to maintain its corporate existence, licenses,
franchises and privileges.
8.15 FHA and other Approvals.
Cause any Federal Agency which insures any material portion of
the Mortgage Loans owned or serviced by the Company to
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withdraw its approval of the Company, or become ineligible as a lender under the
VA loan guaranty program.
8.16 Restricted Payments.
Make any Restricted Payments; provided, however, so long as no
Default arising from the Company's failure to comply with Section 7.9 has
occurred and is continuing (or would result from any such payment) and no Event
of Default has occurred and is continuing (or would result from any such
payment), the Company may make Restricted Payments as expressly permitted by
subparagraphs (a) and (b) below:
(a) The Company may make Restricted Payments during any
Calculation Period in an amount which, when added to all other Restricted
Payments (including Restricted Payments made pursuant to Section 8.16(b)(i))
made during such Calculation Period, does not exceed the sum of (i) fifty
percent (50%) of the increase, if any, in Adjusted Consolidated Tangible Net
Worth during such Calculation Period plus (ii) 100% of all dividends received by
the Company during such Calculation Period from preferred and common stock in
FSA and from redeemable preferred stock in U S WEST, Inc. plus (iii) 50% of
interest payable by the Company with respect to such Calculation Period on the
Subordinated Debt.
The increase in Adjusted Consolidated Tangible Net Worth
referenced in this Subsection (a) shall be computed without regard to
any increase or decrease resulting from the following activities: (1)
the contribution or distribution of Restricted FSA Securities, (2) cash
equity contributions to the Company, (3) the receipt of proceeds of
issuances of stock of the Company, (4) increases or decreases in the
amount of Subordinated Debt, or (5) the payment of permitted Restricted
Payments.
(b) The Company may, without regard to the maximum limit on
Restricted Payments established by Subsection (a) above:
(i) pay dividends required to be paid on its Series A
Preferred Stock and pay interest that is due and payable on the
Subordinated Debt, provided that all payments made pursuant to this
clause (i) shall still be included for purposes of determining the
maximum amount of dividends and distributions payable under Subsection
(a);
(ii) make additional Restricted Payments not to exceed
the Maximum Special Dividend Amount in the aggregate, which additional
Restricted Payments made pursuant to this clause (ii) shall not be
included in determining the maximum amount of Restricted Payments made
under Subsection (a); and
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(iii) distribute the proceeds of issuances of stock to an
Affiliate (but not any proceeds received in connection with any public
or secondary offering of stock).
At the time the Company pays or makes any such Restricted Payment, it
shall notify the Agent in writing of the amount of such payment, which notice
shall (1) specify under which subparagraph and clause above the Restricted
Payment is being made and (2) contain such information as is necessary to
demonstrate that such dividend is permissible under the applicable subparagraph
and clause.
As used herein, "Maximum Special Dividend Amount" shall mean
$64,100,000 plus one-half of the liquidation proceeds of U S WEST, Inc.
redeemable preferred stock owned by the Company, up to a maximum of $25,000,000,
provided that such liquidation proceeds shall be included in the Maximum Special
Dividend Amount only if the other half of such liquidation proceeds is used to
repay Credit Indebtedness and the maximum amount that can be included in the
component of the Debt Threshold set forth in Section 8.5(f) relating to Approved
Equity Securities is permanently reduced by the amount of any Special Dividend
attributable to such liquidation proceeds.
8.17 Maintenance of Restricted FSA Securities.
Sell or otherwise dispose of any of the Restricted FSA
Securities for less than the fair market value thereof at the time of sale or
disposition.
8.18 Subordinated Debt Indenture.
(a) Enter into, without the prior written consent of the
Required Lenders, any amendment or modification of the Subordinated
Debt Indenture or other documents evidencing or governing the terms of
the Subordinated Debt if such amendment or modification would change
(i) the principal amount of or rate of interest on the Subordinated
Debt, (ii) the terms of repayment of the Subordinated Debt, (iii) the
provisions relating to the deferral of interest on the Subordinated
Debt, (iv) any terms or provisions of Article 12 (Subordination) of the
Subordinated Debt Indenture, (v) the definition of "Event of Default"
in the Subordinated Debt Indenture, or (vi) the provision of the
Subordinated Debt Indenture which requires the trustee to give certain
holders of senior indebtedness notices of defaults, accelerations and
certain other events; provided, however, that the Lenders hereby
consent to that certain First Supplemental Indenture dated December 1,
1995; or
(b) Enter into, without the prior written consent of the Agent,
any material amendment or modification of the
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Subordinated Debt Indenture or other documents evidencing or governing
the terms of the Subordinated Debt other than the amendments or
modifications requiring the consent of the Required Lenders pursuant to
clause (a) above; or
(c) Consent, without prior written notice to the Agent, to any
change in the trustee under the Subordinated Debt Indenture.
8.19 Collateral Coverage Ratio.
Permit, as of any date, the ratio of (A) the then-current
Market Value of the Eligible FSA Common Stock to (B) the Aggregate Commitment to
be less than (i) 2.5 to 1.0 as of the date hereof or (ii) 2.0 to 1.0 as of any
date hereafter.
ARTICLE IX
THE AGENT
9.1 Appointment and Authorization.
(a) Each Lender irrevocably appoints and authorizes the Agent
to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Agent by the terms hereof
together with all such powers as are reasonably incidental thereto.
(b) The Agent is hereby authorized to enter into the Security
Agreement on behalf of the Lenders and all obligations of the Lenders
thereunder shall be binding upon each Lender as if such Lender had
executed the Security Agreement. Each Lender hereby appoints and
authorizes the Collateral Agent to act on its behalf in the capacity
described in the Security Agreement and authorizes the Collateral Agent
to act on such Lender's behalf in all respects with regard to
performance under the Security Agreement.
(c) Unless and until the Agent shall have received the
directions of the Required Lenders as provided in Section 10.2(1) or
(2) or of all Lenders, if expressly required hereunder, the Agent may
(but shall not be obligated to) take or refrain from taking such
action, or direct the Collateral Agent to take or refrain from taking
such action with respect to an Event of Default as it shall deem
advisable in the best interests of the Lenders.
(d) The Agent shall not be required to take any action
hereunder if it shall reasonably determine that by so doing it may
incur criminal or civil liability.
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9.2 Agent and Affiliates.
The Agent shall have the same rights and powers under this
Agreement as any other Lender and may exercise or refrain from exercising the
same as though it were not the Agent, and the Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with, the Company, any Subsidiary or Affiliate of the Company as if it
were not the Agent hereunder.
9.3 Action by Agent.
The obligations of the Agent hereunder are only those expressly
set forth herein. Without limiting the generality of the foregoing, the Agent
shall not be required to take any action with respect to any Default, except as
expressly provided in this Article IX or in Article X.
9.4 Consultation with Experts.
The Agent may consult with legal counsel (who may be counsel
for the Company), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.
9.5 Liability of Agent.
(a) Neither the Agent nor any of its directors, officers, agents,
or employees shall be liable for any action taken or not taken by it
in connection herewith (i) with the consent or at the request of the
Required Lenders or of all Lenders, if required or (ii) in the absence
of its own gross negligence or willful misconduct.
(b) Neither the Agent (except as otherwise provided in this
Agreement) nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into or
verify
(i) any statement, warranty or representation made in
connection with this Agreement or any Advance hereunder;
(ii) the performance or observance of any of the
covenants or agreements of the Company;
(iii) the satisfaction of any condition specified in
Article V, except receipt of items required to be delivered
to the Agent and the determination of the amount of the
Credit Requirement; or
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(iv) the validity, effectiveness or genuineness
of this Agreement, the Notes or any other instrument or
writing furnished in connection herewith.
(c) The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex or similar writing) or
telephone communication believed by it to be genuine or, in the case of
a writing, to be signed by the proper party or parties.
9.6 Indemnification.
(a) Each Lender shall, ratably in accordance with its share of
the Aggregate Commitment (or, if the Commitments have been terminated,
then in accordance with its share of aggregate Loans then outstanding)
at the time the Agent or the Collateral Agent incurred such liability,
indemnify the Agent and the Collateral Agent (to the extent not
reimbursed by the Company) against any cost, expense (including
reasonable counsel fees and disbursements), claim, demand, action, loss
or liability (except such as result from the indemnified party's gross
negligence or willful misconduct) that the Agent or the Collateral
Agent may suffer or incur in connection with this Agreement or the
Security Agreement or any action taken or omitted by the Agent or the
Collateral Agent hereunder or thereunder.
(b) For the purposes of this Section, the amount of any
Commitment of any Lender shall be the highest amount of such Commitment
of such Lender during the course of any event for which indemnity is
sought.
(c) The provisions of this Section shall survive the
termination of this Agreement.
9.7 Credit Decision.
Each Lender acknowledges that it has itself been and will
continue to be, independently and without reliance upon the Agent or any other
Lender, solely responsible for making its own independent appraisal of and
investigations into the financial condition, creditworthiness, condition,
affairs, status and nature of the Company. Accordingly, each Lender confirms to
the Agent that it has not relied, and will not hereafter rely, on the Agent or
any other Lender (i) except as otherwise provided in this Agreement, to check or
inquire on such Lender's behalf into the adequacy, accuracy or completeness of
any information provided by the Company under or in connection with this
Agreement or the transactions herein contemplated (whether or not such
information has been or is hereafter distributed to such Lender by the Agent) or
(ii) to assess or keep under review on
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such Lender's behalf the financial condition, creditworthiness, condition,
affairs, status or nature of the Company.
9.8 Resignation or Removal and Appointment of Successor
Agent.
The Agent may resign at any time by giving 90 days prior
written notice thereof to the Lenders and the Company. The Agent may be removed
at any time upon ninety (90) days prior written notice from the Required
Lenders. Upon any such resignation or removal notice the Required Lenders shall
have the right to appoint a successor Agent; provided that such appointment,
unless made after the occurrence of a Default and during the continuance
thereof, shall be subject to the consent of the Company, which consent shall not
be unreasonably withheld. If the Company and/or Required Lenders, as applicable,
are unable to agree on the appointment of a successor agent within such 90 day
period, the retiring agent shall appoint one of the Lenders as a successor agent
for the Lenders. Upon the appointment of a successor Agent, that successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement; provided,
however, that the resigning Agent shall not be discharged from any liability as
a result of its or its directors', officers', agents' or employees' gross
negligence or willful misconduct in connection with the performance of its
duties and obligations under this Agreement prior to the effective date of its
resignation. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article IX shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
9.9 Compensation.
Compensation of the Agent for its services hereunder and
reimbursement for any expenses incurred by it in the performance of its duties
hereunder shall be paid by the Company pursuant to a separate written agreement
between the Agent and the Company.
9.10 Release of Collateral Documents.
The Collateral Agent shall not release any Pledged Items
except as provided herein or in connection with the enforcement of any remedies
hereunder.
9.11 Knowledge of Defaults.
The Agent shall not be deemed to have knowledge or notice of
the occurrence of any Event of Default unless the Agent has received notice from
a Lender or the Company referring to
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this Agreement, describing such Event of Default and stating that such notice is
a "Notice of Default." The Agent shall notify the Lenders within a reasonable
time after the Agent has notice of the occurrence of an Event of Default, which
notice shall describe the Event of Default.
9.12 Reports.
The Agent may, at its option with the approval of the Company,
alter the format of any report required hereunder, provided such modified report
contains the same information previously furnished in the unmodified report.
ARTICLE X
DEFAULTS
10.1 Defaults.
In case of the happening of any of the following events
(herein called "Events of Default"):
(a) Any principal amount of any Loan made under this Agreement
(other than principal payments required to be made pursuant to Section
2.14(a)) shall not be paid when due and payable; or
(b) Any principal payment required to be made pursuant to
Section 2.14(a) shall not be paid when due and payable, and shall
remain unpaid for one Business Day;
(c) Any interest or Fees due under this Agreement shall not be
paid when due and payable, and shall remain unpaid for five (5) days;
or
(d) Any amount, other than principal or interest or Fees,
payable under this Agreement shall not be paid when due and payable and
shall remain unpaid for five (5) days after written notice to the
Company of such nonpayment; or
(e) Any representation or warranty made or deemed made by the
Company (or any of its officers) herein (other than the representations
and warranties contained in Sections 4.6 and 4.7, the inaccuracies of
which shall only cause the Collateral affected thereby to cease to
qualify as Eligible Collateral) in the Security Agreement or in any
certificate, agreement, instrument or statement contemplated by or made
or delivered pursuant to or in connection herewith or therewith shall
prove to have been incorrect when made or deemed made in any material
respect; provided however that if the facts resulting in the breach of
any such representation or warranty are susceptible of correction,
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such breach shall not constitute an Event of Default if such facts are
corrected within 30 days after such inaccurate representation or
warranty was made or deemed made; or
(f) The Company shall fail to perform or observe any term,
covenant or agreement contained in Sections 7.10, 8.1, 8.3, 8.4, 8.6,
8.7, 8.9, 8.14(a), 8.15, 8.17, 8.18, or 8.19; or
(g) The Company shall (i) fail to comply with the covenant
contained in Section 8.12 and such failure remains unremedied for one
Business Day, or (ii) fail to perform any term, covenant or agreement
contained in Sections 7.7(a), 7.9, 8.5, 8.8 or 8.16, and such failure
shall remain unremedied for more than 30 days;
(h) The Company shall fail to perform or observe any other
term, covenant or agreement contained herein or in the Security
Agreement on its part to be performed or observed and any such failure
remains unremedied for thirty (30) days after written notice thereof
shall have been given to the Company by the Agent or the Collateral
Agent; or
(i) An "Event of Default" (as defined in the Other Facility or
any other Credit Document) shall exist; or
(j) Either this Agreement, the Notes, the Control Agreement or
the Security Agreement shall, at any time after its execution and
delivery, for any reason cease to be in full force and effect (unless
such occurrence is in accordance with its terms or after payment
thereof) or shall be declared to be null and void, or the validity or
enforceability thereof shall be contested by the Company or the
Collateral Agent, or the Company or the Collateral Agent shall deny
that it has any further liability or obligation thereunder; or
(k) The Company, its Parent, Fund American Enterprises Holdings,
Inc. or any of the Company's material Subsidiaries shall (i) be
adjudicated bankrupt or insolvent, (ii) admit in writing its inability
to pay its debts as they mature, (iii) make an assignment for the
benefit of creditors, (iv) fail generally to pay its debts as such
debts become due and payable, (v) apply for or consent to the
appointment of any receiver, trustee, custodian or similar officer for
it or for all or any substantial part of its property; or such
receiver, trustee, custodian or similar officer shall be appointed
without the application or consent of the Company or of such
Subsidiary, as the case may be, and such appointment shall continue
undischarged for a period of 60 days, (vi) institute (by petition,
application, answer, consent or otherwise) any bankruptcy, insolvency,
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reorganization, arrangement, readjustment of debt, dissolution,
liquidation or similar proceeding relating to it under the laws of any
jurisdiction, (vii) have any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, dissolution, liquidation or similar
proceeding (by petition, application or otherwise) instituted against
it and remain undismissed for a period of 60 days, or (viii) have any
judgment, writ, warrant of attachment or execution or similar process
issued or levied in respect of any of its obligations (alleged or
otherwise) against any of its property involving any amount in excess
of $5,000,000 and such judgment, writ or similar process shall not be
released, vacated, stayed or fully bonded within 30 days after its
issue or levy; or
(l) The Company or any of the Company's material Subsidiaries
shall (i) default in the payment when due (after giving effect to any
available cure period) of any principal of or interest on any of its
Debt other than the Credit Indebtedness in excess of $25,000,000 in the
aggregate or (ii) any event specified in any note, agreement, indenture
or other document evidencing or relating to any such Debt in excess of
$25,000,000 shall occur if the effect of such event is to cause, or to
permit the holder or holders of such Debt (or a trustee or agent on
behalf of such holder or holders) to cause, such Debt to become due, or
to be prepaid in full, prior to its stated maturity, and in either case
any notice or cure period has expired and such default has not been
waived in writing by the holder of such Debt; or
(m) An event or condition occurs or exists with respect to any
Plan concerning which the Company is under an obligation to furnish a
report to the Lenders in accordance with Section 7.7(h) and as a result
of such event or condition, together with all other such events or
conditions, the Company or any ERISA Affiliate has incurred a liability
to a Plan or the PBGC (or any combination of the foregoing) which is
material in relation to the financial position of the Company; or
(n) A Change in Control shall occur with respect to
the Company; or
(o) Unless approved in advance by the Required Lenders (such
approval not to be unreasonably withheld), the acquisition by any
Person, or two or more Persons (other than Fund American Enterprises
Holdings, Inc. or US West or any wholly-owned Subsidiary of such
entities) acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the SEC under the Exchange Act) of outstanding
shares of voting stock of FSA at any time if after giving
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effect to such acquisition such Person or Persons own twenty percent
(20%) or more of such outstanding voting stock; or
(p) The lien against the Collateral created under the Security
Agreement for the benefit of the Secured Parties shall cease to be a
perfected, first priority security interest; provided, however, that if
the Secured Parties shall cease to have a perfected, first priority
interest in a portion of the Collateral, such cessation shall not
constitute an Event of Default so long as the Collateral in which the
Secured Parties have a perfected, first priority security interest is
sufficient to cause the Borrowing Base to exceed the Credit
Requirement;
then, and in every such event and at any time thereafter during the continuance
of such event, the Agent and the Lenders shall have the rights described in the
following Sections of this Article X.
10.2 Remedies.
(1) Upon the occurrence of any Event of Default the Agent may,
and at the direction of the Required Lenders shall, at the same or
different times, take one or more of the following actions: (i) by
notice to the Company terminate the Commitments and they shall
thereupon terminate, (ii) by notice to the Company declare the
Obligations to be, and the Obligations shall thereupon become,
immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the
Company, provided that in the case of any of the Events of Default
specified in subparagraph (k) of Section 10.1, without any notice to
the Company or any other act by the Agent or the Lenders, the
Commitments shall thereupon terminate and the Obligations shall become
immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the
Company. Following the occurrence and during the continuance of a
Default, no Lender shall be obligated to fund any Loan hereunder.
(2) Upon the occurrence of any Event of Default, the Agent and
the Collateral Agent, on behalf of the Secured Parties, shall be
entitled to all rights and remedies under this Agreement, the Control
Agreement and the Security Agreement and all other rights and remedies
at law or in equity existing in or conferred upon the Secured Parties
by other jurisdictions or other applicable law.
(3) The Company waives any right to require the Agent, the
Collateral Agent or any Lender to (i) proceed against or exhaust any of
its remedies against the Company or any other
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Person in any particular order, (ii) proceed against or exhaust any of
the Collateral or pursue its rights and remedies as against the
Collateral in any particular order or (iii) pursue any other remedy in
its power.
(4) The Company shall provide any and all information required
by the Agent or the Collateral Agent to administer this Agreement or
collect on the Collateral. All advances, charges, costs and expenses,
including reasonable attorneys fees, incurred or paid by the Agent in
exercising any right, power or remedy conferred by this Agreement, or
in the enforcement hereof (or by any Lender acting on instruction of
the Required Lenders in the enforcement hereof), together with interest
thereon at the rate per annum of two percent (2%) plus the Alternate
Base Rate from the time of payment until repaid, shall become a part of
the Credit Indebtedness.
(5) No failure on the part of the Agent or any Lender to
exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise by the Agent or any Lender of any right, power or
remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The remedies herein
provided are cumulative and are not exclusive of any remedies provided
by law.
10.3 Notice of Default.
The Agent may, and at the direction of the Required Lenders
shall, give notice to the Company under Section 10.1(d), 10.1(h) or 10.2 and
shall thereupon notify all Lenders thereof.
10.4 Application of Proceeds.
(a) After the occurrence of an Event of Default, the portion
of the proceeds of any sale or enforcement of all or any part of the Collateral
which is delivered to the Agent by the Collateral Agent pursuant to the
provisions of the Security Agreement shall be applied by the Agent:
First, to the extent not already paid from the Collateral
proceeds by the Collateral Agent, to payment of all costs and expenses
of such sale or enforcement, including reasonable compensation to the
Agent's agents and counsel, and all expenses, liabilities and advances
made or incurred by the Agent or any Lender acting on instructions of
the Required Lenders in connection therewith;
Second, to the extent not already paid from the Collateral
proceeds by the Collateral Agent, to the payment
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of all costs and expenses incurred by the Collateral Agent under the
Security Agreement;
Third, to the payment of accrued and unpaid interest on the
Credit Indebtedness, fees due hereunder and all other unpaid Credit
Indebtedness other than the principal amount of Loans, ratably
according to the respective amounts owing or due each Lender until such
amounts are paid in full;
Fourth, to the total unpaid principal amount of all Loans,
ratably according to the amount due each Lender until such amounts are
paid in full; and
Fifth, to the payment to the Company, or to its successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
(b) The Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with
this Agreement.
(c) If the proceeds of any such sale are insufficient to cover
the costs and expenses of such sale, as aforesaid, and the payment in
full of the Credit Indebtedness, the Company shall remain liable for
any deficiency.
ARTICLE XI
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
11.1 Successors and Assigns.
The terms and provisions of the Credit Documents shall be
binding upon and inure to the benefit of the Company and the Lenders and their
respective successors and assigns, except that the Company shall not have the
right to assign its rights or obligations under the Credit Documents without the
consent of all the Lenders and any assignment by any Lender must be made in
compliance with Section 11.3. The Agent may treat the payee of any Note as the
owner thereof for all purposes hereof unless and until such payee complies with
Section 11.3 in the case of an assignment thereof or, in the case of any other
transfer, a written notice of the transfer is filed with the Agent. Any assignee
or transferee of a Note agrees by acceptance thereof to be bound by all the
terms and provisions of the Credit Documents. Any request, authority or consent
of any person, who at the time of making such request or giving such authority
or consent is the holder of any Note, shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.
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11.2 Participations.
(a) Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law,
at any time sell to one or more banks or other entities
("Participants") participating interests in any Loan owing to such
Lender, any Note held by such Lender, any Commitment of such Lender or
any other interest of such Lender under the Credit Documents. In the
event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under the Credit Documents shall
remain unchanged, such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, such
Lender shall remain the holder of any such Note for all purposes under
the Credit Documents, all amounts payable by the Company under this
Agreement shall be determined as if such Lender had not sold such
participating interests, and the Company and the Agent shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Credit Documents.
(b) Voting Rights. Except as otherwise expressly provided in
the Credit Documents, each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Credit Documents other
than any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which (i) forgives
principal, interest or Fees or reduces the interest rate or Fees
payable with respect to any such Loan or Commitment, (ii) postpones any
date fixed for any regularly-scheduled payment of principal of, or
interest on, any such Loan or Fees on any such Commitment, (iii)
releases Collateral beyond the releases expressly provided for herein,
or (iv) extends the Termination Date.
(c) Benefit of Set-Off. The Company agrees that each
Participant shall be deemed to have the right of set-off provided
pursuant to Section 12.10(a) in respect of its participating interest
in amounts owing under the Credit Documents to the same extent as if
the amount of its participating interest were owing directly to it as a
Lender under the Credit Documents, provided that each Lender shall
retain the right of set-off provided in Section 12.10(a) with respect
to the amount of participating interests sold to each Participant. The
Lenders agree to share with each Participant, and each Participant, by
exercising the right of set-off provided in Section 12.10(a), agrees to
share with each Lender, any amount received pursuant to the exercise of
its right of set-off, such amounts to be shared in accordance with
Section 12.10(b) as if each Participant
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were a Lender. The Company is not a party to the agreement among the
Lenders and Participants set forth in the immediately preceding
sentence, and such sentence may be amended without the consent of the
Company.
11.3 Assignments.
(a) Permitted Assignments. Any Lender may, with the prior
written consent of Agent (which consent shall not be unreasonably
withheld or delayed), in the ordinary course of its business and in
accordance with applicable law, at any time assign to one or more banks
or other entities ("Purchasers") all or any part of its rights and
obligations under the Credit Documents, provided that, unless an Event
of Default has occurred and is then continuing, the prior written
consent of the Company to the identity of any such Purchaser shall be
required, and the Company agrees that such consent shall not be
unreasonably withheld or delayed, except that no consent of the Agent
or the Company shall ever be required for (i) any assignment to a
Person directly or indirectly controlling, controlled by or under
direct or indirect common control with the assigning Lender or (ii) the
pledge or assignment by a Lender of such Lender's Note and other rights
under the Loan Documents to any Federal Reserve Bank in accordance with
applicable law. Notwithstanding the foregoing, no assignment of Loans
or Commitments which requires the consent of the Agent or the Company
may be made if the assignment would result in either the assigning
Lender or the Purchaser (which may be an existing Lender) holding a
Commitment of less than $5,000,000; provided, however, that if (due to
reductions in the Aggregate Commitment) a Lender's Commitment is less
than $5,000,000, such Lender may assign all (but not less than all) of
its Commitment in accordance with the terms of this Section
notwithstanding the fact that such Commitment is less than $5,000,000.
(b) Effect; Effective Date. Upon delivery to the Agent of a
New/Modified Commitment Supplement in the form of Exhibit H hereto
executed by the assigning Lender and the Purchaser and payment to the
Agent of an assignment fee of $3,500, such assignment shall become
effective on the effective date specified in such notice of assignment.
On and after the effective date of such assignment, such Purchaser
shall for all purposes be a Lender party to this Agreement and any
other Credit Document executed by the Lenders and shall have all the
rights and obligations of a Lender under the Credit Documents, to the
same extent as if it were an original party hereto, and no further
consent or action by the Company, the Lenders or the Agent shall be
required to release the transferor Lender with respect to the
percentage of the Commitments and Loans assigned to such
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Purchaser. Upon the consummation of any assignment to a Purchaser
pursuant to this Section, the transferor Lender, the Agent and the
Company shall make appropriate arrangements so that replacement Notes
are issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their respective Commitments, as adjusted
pursuant to such assignment.
11.4 Dissemination of Information.
The Company authorizes each Lender to disclose to any
Participant or any other Person acquiring an interest in the Credit Documents by
operation of law (each a "Transferee") and any prospective Transferee any and
all information in such Lender's possession concerning the creditworthiness of
the Company and its Subsidiaries, provided that the transferor shall obtain from
any such Transferee or prospective Transferee, prior to disclosing any such
information, a confidentiality agreement executed by the Transferee or
prospective Transferee agreeing to be bound by any confidentiality requirements
with respect to such information which are imposed upon the Lenders under the
terms of the Credit Documents.
11.5 Tax Treatment.
If any interest in any Credit Document is transferred to any
Transferee which is organized under the laws of any jurisdiction other than the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
all applicable provisions of the Code with respect to withholding and other tax
matters.
ARTICLE XII
MISCELLANEOUS
12.1 Immediately Available Funds.
All payments and other transfers of funds under this Agreement
shall be made in funds immediately available at the place of payment unless the
recipient thereof shall otherwise agree.
12.2 Notices.
Except where instructions or notices are expressly authorized
elsewhere in this Agreement to be given by telephone or by other means of
transmission, all instructions, notices and other communications to be given to
any party hereto shall be in writing and shall be personally delivered or sent
by certified
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mail, postage prepaid, private delivery service or by facsimile, and shall be
deemed to be given for purposes of this Agreement on the day (or at the time of
day, if applicable) when actually received by the intended party at its address
or facsimile or telephone number as set forth below (or as such party may
specify to the other parties in writing). Any requirement that notice be given
to any person under this Agreement shall be deemed to require notice to the
Agent, the Company and each Lender, unless otherwise expressly provided herein.
Whenever the giving of notice by telephone is permitted by this Agreement, such
notice shall be confirmed in writing within three days.
The addresses for notices to the parties are as set forth
below their signatures on the signature pages hereto or on any assignment.
12.3 Survival and Termination of Agreement.
All covenants, agreements, representations and warranties made
herein and in the certificates and other documents delivered pursuant hereto
shall survive the funding of the Loans and shall continue in full force and
effect to the Termination Date or so long as any amount payable to the Lenders
in connection with this Agreement is unpaid, whichever is later, at which time
this Agreement shall terminate, it being expressly understood that the
obligations of the Company under Sections 3.1, 3.3, 7.8 and 7.15 shall
(notwithstanding anything in this Agreement to the contrary) survive any
termination of this Agreement. Whenever in this Agreement any party is referred
to, such reference shall be deemed to include the successors and assigns of such
party, but no assignment or transfer (by operation of law or otherwise) of this
Agreement by the Company or any of its rights or duties hereunder may be made
without the prior written consent of all of the Lenders; and all covenants,
promises and agreements by or on behalf of the Company which are contained in
this Agreement shall inure to the benefit of the successors and assigns of the
Lenders.
12.4 Fees and Expenses of the Lenders.
The Company will pay (a) all reasonable out-of-pocket costs
and expenses incurred by the Agent or by the Collateral Agent (including the
fees, out-of-pocket expenses and other reasonable expenses of counsel to the
Agent or the Collateral Agent) in connection with the preparation, execution and
delivery of this Agreement, the Notes, the Security Agreement and any other
agreements or documents referred to herein or therein and any amendments
thereto, and (b) all reasonable out-of-pocket costs and expenses incurred by the
Agent, the Collateral Agent and the Lenders (including the fees, out-of-pocket
expenses and other reasonable expenses of counsel to the Lenders) in connection
with the enforcement and protection of the rights of the
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Lenders under this Agreement, the Notes, the Control Agreement, the Security
Agreement or any other agreement or document referred to herein or therein.
12.5 APPLICABLE LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF ILLINOIS.
12.6 Modification of Agreement.
Except for certain changes in a Lender's Commitment or
admission of a new Lender which do not require any consents or approvals from
the other Lenders but which require a New/Modified Commitment Supplement
executed by the Agent, the Company and the Lender(s) being added or modifying
their Commitment, no provisions of this Agreement may be amended or waived
unless such amendment or waiver is in writing and is signed by the Company, and
the Agent if the rights or duties of the Agent are affected thereby, and
(1) each Lender if such amendment or waiver
(i) reduces or forgives any principal of any unpaid
Loan or any interest thereon or any Fees due to such Lender
hereunder; or
(ii) postpones the date fixed for any payment of
principal of or interest on any unpaid Loan or any Fees payable
to such Lenders; or
(iii) changes the amount of payment of principal of or
interest on any unpaid Loan or any Fees payable to the Lenders
hereunder; or
(iv) changes or waives any of the conditions precedent
to the initial Advance hereunder or any subsequent Advance; or
(v) changes the amount of any such Lender's
Commitment, except as expressly provided for herein; or
(vi) would amend or waive the method of calculating the
Borrowing Base; or
(vii) would amend or waive the provisions of
Section 2.14; or
(viii) extends the Termination Date; or
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(ix) releases any Collateral beyond the
releases expressly provided for herein or in the Security
Agreement; or
(x) changes or waives any restriction on the
Company's ability to assign its rights or obligations
under any of the Credit Documents; or
(xi) changes or waives any funding
requirement, including, without limitation, any Lending
Sublimits; or
(xii) changes or waives any yield protection;
or
(xiii) changes or waives any provision herein
regarding the indemnification of the Agent, the Collateral
Agent or such Lender; or
(xiv) changes the definition of Required Lenders
or modifies any requirement for consent by all of the Lenders;
or
(xv) changes or waives any provision herein
regarding the allocation among the Lenders of any payments or
proceeds received by the Agent hereunder; or
(2) the Required Lenders in the case of all other waivers or
amendments.
12.7 Non-Waiver of Rights by the Lenders.
Neither any failure nor any delay on the part of the Agent or
the Lenders in exercising any right, power or privilege hereunder or under the
Control Agreement or the Security Agreement shall operate as a waiver thereof,
nor shall a single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
12.8 Dealings with the Company and its Affiliates.
The Lenders and their Affiliates may accept deposits from,
extend credit to and generally engage in any kind of banking, trust or other
business with the Company and any of its Affiliates regardless of the capacity
of the Lenders hereunder.
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12.9 Changes in GAAP.
The parties agree that if there are any changes in GAAP in the
future which result in material changes to the presentation of the Company's
financial condition in accordance with GAAP in such a way as to alter the
material intent of this Agreement, then the parties will negotiate in good faith
to attempt to agree on such modifications to this Agreement as may be necessary
to preserve the original intent of this Agreement in light of such revised GAAP
rules, provided that unless and until a written agreement is entered into by all
parties hereto, no changes to this Agreement shall be effective and all
calculations required to be made in accordance with GAAP hereunder shall
continue to be made as if GAAP had not changed.
12.10 Set-Off.
(a) If an Event of Default shall have occurred, each Lender
shall have the right, at any time and from time to time without notice
to the Company, any such notice being hereby expressly waived, to
set-off and to appropriate or apply any and all deposits of money or
property or any other indebtedness at any time held or owing by such
Lender to or for the credit or the account of the Company against and
on account of all outstanding Credit Indebtedness and all Credit
Indebtedness which from time to time may become due hereunder and all
other obligations and liabilities of the Company under this Agreement,
regardless of the adequacy of any Collateral and irrespective of
whether or not such Lender shall have made any demand hereunder and
whether or not said obligations and liabilities shall have matured.
(b) Each Lender agrees that if it shall, by exercising any
right of set-off or counterclaim or otherwise, receive payment of a
proportion of the aggregate amount of principal, interest or Fees due
with respect to this Agreement and the Notes held by it which is
greater than the proportion received by any other Lender in respect of
the aggregate amount of principal, interest or Fees due with respect to
this Agreement and the Notes held by such other Lender, the Lender
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Lenders and such other
adjustments shall be made, as may be required so that all such payments
of principal, interest or Fees shall be shared by the Lenders hereunder
pro rata according to their respective shares of the Credit
Indebtedness. Each Lender agrees to exercise any and all rights of
set-off, counterclaim or bankers' lien relating to the Credit
Indebtedness first fully against the Credit Indebtedness and only then
to any other Debt of the Company to such Lender; provided that any
Lender which is also a lender under the Other Facility may exercise any
and
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all rights of set-off, counterclaim or bankers' lien relating to the
Credit Indebtedness or the indebtedness under the Other Facility
against either the Credit Indebtedness or the indebtedness under the
Other Facility (or a combination thereof) in such proportions and
priorities as such Lender may elect. The Company is not a party to the
agreement among the Lenders set forth in this Section 12.10(b), and
such Section may be amended without the consent of the Company.
(c) The Company agrees that funds received and held by the
Company as custodian for FNMA, GNMA or other mortgage pools which are
deposited into accounts with any Lender shall be clearly identified as
custodial accounts, and each Lender agrees that each provision of the
foregoing paragraphs of this Section 12.10 shall not apply to such
custodial accounts. The Company shall not deposit any of its general
funds in any custodial accounts or otherwise commingle funds in any
custodial accounts.
12.11 Counterparts.
This Agreement may be executed in counterparts which, taken
together, shall constitute a single document.
12.12 Severability.
In case any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
12.13 Headings.
Section headings in the Credit Documents are for convenience
of reference only and shall not govern the interpretation of any of the
provisions of the Credit Documents.
12.14 Entire Agreement.
The Credit Documents embody the entire agreement and
understanding among the Company, the Agent and the Lenders and supersede all
prior agreements and understandings among the Company, the Agent and the Lenders
relating to the subject matter thereof.
12.15 Consent of Jurisdiction.
THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN
CHICAGO IN ANY ACTION OR PROCEEDING
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ARISING OUT OF OR RELATING TO ANY CREDIT DOCUMENTS AND THE COMPANY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING
PROCEEDINGS AGAINST THE COMPANY IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY THE COMPANY AGAINST THE AGENT OR ANY LENDER OR ANY
AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY CREDIT
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
12.16 Waiver of Jury Trial.
THE COMPANY, THE AGENT AND EACH LENDER HEREBY WAIVE TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY CREDIT DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.
IN WITNESS WHEREOF, the Company and the Lenders have caused this
Agreement to be duly executed by their duly authorized officers, all as of the
day and year first above written:
SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
Address for Notices:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Attn: Vice President/Treasury
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Address for Notices Regarding
Fundings:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Other Notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. Power
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
THE FIRST NATIONAL BANK OF CHICAGO
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Address for Notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. Power
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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BANK OF AMERICA NT & SA
By:
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Address for Notices:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇/6716
THE BANK OF NEW YORK
By:
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▇▇▇▇▇▇▇▇ ▇. Dominus
Vice President
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. Dominus
Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
COMERICA BANK
By:
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▇▇▇ ▇▇▇▇▇
Vice President
Address for Notices:
One Detroit Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇
Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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CREDIT LYONNAIS NEW YORK BRANCH
By:
-------------------------------------
W. ▇▇▇ ▇▇▇▇▇▇▇
Vice President
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: W. ▇▇▇ ▇▇▇▇▇▇▇
Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
GUARANTY FEDERAL BANK, F.S.B.
By:
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
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Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION
By:
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Address for Notices:
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▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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EXHIBIT A
[INTENTIONALLY OMITTED]
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EXHIBIT B
FORM OF BORROWING BASE CERTIFICATE
Dated as of: _______________
Reference is made to that certain Revolving Credit Agreement among the
Company, The First National Bank of Chicago, individually and as administrative
agent, and the lenders named therein, dated as of July ___, 1998 (as amended or
supplemented from time to time, the "Credit Agreement"). Capitalized terms not
otherwise defined herein are used with the same meanings as in the Credit
Agreement.
1. BORROWING BASE:
Eligible FSA Common Stock
(Market Value) $________________
Percentage Factor 25%
Borrowing Base $________________
Facility Advances/Credit Requirement $________________
EXCESS OF BORROWING BASE
OVER CREDIT REQUIREMENT $________________
2. CERTIFICATION: To the best of the knowledge and belief
(after reasonable investigation) of the officer of the
Company executing this Certificate, the Company hereby
certifies to The First National Bank of Chicago for the
benefit of Lenders under the Credit Agreement that: (a) the
above information is, and the computations are accurate and
complete and in accordance with the requirements of the
Credit Agreement, and (b) as of the date hereof, (1) all
representations and warranties of the Company set forth in
the Credit Agreement are accurate and complete, (2) there
does not exist an Event of Default under the Credit
Agreement, and (3) the Company has given written notice to
The First National Bank of Chicago of any Default which now
exists under the Credit Agreement.
IN WITNESS WHEREOF, the Company has caused this Borrowing Base
Certificate to be executed and delivered by its duly authorized officer
this ___ day of __________, 199_.
SOURCE ONE MORTGAGE SERVICES CORPORATION
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By:
-----------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
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EXHIBIT C
COMMITMENTS AND COMMITMENT PERCENTAGES
Commitment Commitment
Bank Name Amount Percentage
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1. First Chicago $ 5,000,000 14.▇▇▇▇▇▇▇▇▇▇%
2. Bank of America $ 5,000,000 14.▇▇▇▇▇▇▇▇▇▇%
3. Bank of New York $ 5,000,000 14.▇▇▇▇▇▇▇▇▇▇%
4. Chase Bank of Texas $ 5,000,000 14.▇▇▇▇▇▇▇▇▇▇%
5. Comerica $ 5,000,000 14.▇▇▇▇▇▇▇▇▇▇%
6. Guaranty Federal $ 5,000,000 14.▇▇▇▇▇▇▇▇▇▇%
7. Credit Lyonnais $ 5,000,000 14.▇▇▇▇▇▇▇▇▇▇%
Total $35,000,000 100.0000000000%
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EXHIBIT D
FORM OF SECURITY AGREEMENT
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EXHIBIT E
FORM OF NOTE
Date of Note: July ___, 1998
FOR VALUE RECEIVED, the undersigned (the "Maker") does hereby covenant
and promise to pay to the order of ____________________ (the "Lender") or its
successors or assigns (collectively, the "Payee"), on the Termination Date, the
aggregate unpaid principal amount of all Loans made by Lender pursuant to the
Credit Agreement (the "Principal Amount") and to pay interest on the unpaid
Principal Amount at the applicable interest rate or rates per annum and on the
dates determined in accordance with the terms of the Credit Agreement. All
payments of principal of and interest on this Note shall be made in legal tender
of the United States. All payments of principal of and interest on this Note
shall be made in immediately available funds at the principal office of The
First National Bank of Chicago (the "Agent"), ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇.
Interest on this Note shall be computed on the basis of actual number
of days elapsed in a 360 day year.
This Note is one of the Notes referred to in the Revolving Credit
Agreement, bearing even date herewith, among the Company, the Lender and the
other lenders listed on the signature pages thereof and the Agent (as the same
may be amended and supplemented from time to time, the "Credit Agreement") and
is entitled to the benefits thereof. Reference is made to the Credit Agreement
for (i) provisions for the prepayment hereof, (ii) acceleration of the maturity
hereof, (iii) the obligation of the Maker to pay certain expenses (including
attorney's fees) incurred in the enforcement thereof and hereof and (iv) a
description of the security for this Note. Capitalized terms used herein without
definition have the respective meanings ascribed to them in the Credit
Agreement.
All Loans made by the Lender and all repayments of the principal
thereof shall be recorded by the Lender in its books and records; provided,
however, that the Lender's failure to so record or any error in such recording
shall not affect the Maker's liability hereunder or under the Credit Agreement.
Upon any transfer hereof, the Lender shall endorse on the schedule attached
hereto or on a schedule accompanying the transfer of this Note, the unpaid
principal balance of this Note.
If an Event of Default shall occur under the Credit Agreement, the
unpaid Principal Amount hereunder shall become due
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and payable (i) automatically in the case of any of the Events of Default
specified in Paragraph (k) of Section 10.1 of the Credit Agreement, or (ii) at
the option of the Required Lenders with respect to all other Events of Default
and shall bear interest at the rate provided for in Section 2.7 of the Credit
Agreement from and after such date. The foregoing provision shall not be
construed as a waiver by the Payee of its right to pursue any other remedies
available to it under this Note, the Credit Agreement or any other instrument
evidencing or securing the Principal Amount.
This Note may not be changed orally but only by an agreement in
writing, signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought. Written notices required to be given
hereunder shall be given as provided in the Credit Agreement to the Payee and
Maker at the respective addresses specified or provided for therein.
Should the indebtedness evidenced by this Note or any part thereof be
collected at law or in equity, or in bankruptcy, receivership or any other court
proceeding (whether at the trial or appellate level), or should this Note be
placed in the hands of attorneys for collection upon default, the Maker agrees
to pay, in addition to the principal, interest and other sums due and payable
hereon, all costs of collecting or attempting to collect on this Note, including
reasonable attorneys' fees and expenses.
Anything herein to the contrary notwithstanding, the obligations of the
Maker under this Note shall be subject to the limitation that payments of
interest shall not be required to the extent that receipt of any such payment by
the Payee would be contrary to provisions of law applicable to Payee which limit
the maximum rate of interest that may be charged or collected by Payee.
The undersigned and all endorsers, guarantors and sureties of this Note
and all other persons liable or to become liable on this Note severally waive
presentment for payment, demand, notice of demand and of dishonor and nonpayment
of this Note, notice of intention to accelerate the maturity of this Note,
notice of acceleration of the maturity of this Note, protest and notice of
protest, diligence in collecting, and the bringing of suit against any other
party, and agree to all renewals, extensions, modifications, partial payments,
releases or substitutions of security, in whole or in part, with or without
notice, before or after maturity.
Notwithstanding the foregoing paragraphs and all other provisions of
this Note and the Credit Agreement, none of the terms and provisions of this
Note or the Credit Agreement shall ever be construed to create a contract to pay
to the Payee, for
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the use, forbearance or detention of money, interest in excess of the maximum
amount of interest permitted to be charged by the Payee to the undersigned under
applicable state or federal law from time to time in effect, and the undersigned
shall never be required to pay interest in excess of such maximum amount. If,
for any reason interest is paid hereon in excess of such maximum amount, then
promptly upon any determination that such excess has been paid the Payee will,
at its option, either refund such excess to the undersigned or apply such excess
to the principal owing hereunder.
This Note is to be construed and enforced in accordance with the laws
of the State of Illinois.
IN WITNESS WHEREOF, Maker has executed and delivered this Note on the
day and year first above written.
SOURCE ONE MORTGAGE SERVICES CORPORATION
By:
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
Address:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Attn: Vice President/Treasury
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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PAYMENTS OF PRINCIPAL
Unpaid
Principal Notation
Date Balance Made by
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EXHIBIT F
FORM OF OPINION LETTER
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EXHIBIT G
MATERIAL LITIGATION NOT REFERENCED IN ANNUAL/QUARTERLY REPORTS
NONE
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EXHIBIT H
FORM OF MODIFIED COMMITMENT SUPPLEMENT
This Modified Commitment Supplement ("Supplement") is made as of
_________________, 199_ (the "Effective Date") by and among Source One Mortgage
Services Corporation (the "Company"), The First National Bank of Chicago, in its
capacity as agent ("Agent"), and _______________________ ("New Lender"), and
____________________________ ("Assignor").
The Company, Assignor and Agent are parties to a certain Revolving
Credit Agreement dated as of July ___, 1998 (as amended or supplemented from
time to time, the "Credit Agreement") pursuant to which Agent and certain other
Lenders agreed to provide a revolving credit facility to the Company on the
terms and conditions set forth in the Credit Agreement. Any capitalized term not
expressly defined herein shall have the meaning ascribed to such term in the
Credit Agreement.
The New Lender has agreed to become a Lender under the Credit Agreement
with a Commitment in the amount of ______________________ Dollars
($______________). The Company and Assignor have agreed to reduce Assignor's
Commitment under the Credit Agreement to ____________________ Dollars
($_______________).
NOW, THEREFORE, the parties hereto agree as follows:
1. From and after the Effective Date, the New Lender shall be
considered a "Lender" under the Credit Agreement and the Company and Agent
hereby consent to the addition of the New Lender.
2. From and after the Effective Date, the New Lender's Commitment under
the Credit Agreement shall be ________________________ Dollars ($______________)
or such other amount as may be stated in any subsequent modification to the
Credit Agreement. The Company shall execute and deliver to the New Lender
simultaneously herewith a Note in the form attached as Exhibit E to the Credit
Agreement.
3. From and after the Effective Date, Assignor's Commitment under the
Credit Agreement shall be _________________________________ Dollars
($______________) or such other amount as may be stated in any subsequent
modification to the Credit Agreement.
4. The New Lender, promptly after receipt of its Note,
agrees to purchase from Assignor, and Assignor hereby agrees to sell to the New
Lender, without recourse, a portion of the
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outstanding Loans made by Assignor equal to _________ percent (__%) of the
outstanding principal balance of each such Loan. Such purchase shall be
effected by wire transfer of immediately available funds to Assignor on the
Effective Date. The Company irrevocably and unconditionally agrees that from
and after the Effective Date the portion of Loans so funded by Assignor shall
be evidenced by and shall be deemed to be Loans made by the New Lender under
the New Lender's Note as of the Effective Date and shall be treated as such for
purposes of calculating interest and fees accruing from and after the Effective
Date under the Credit Agreement. All interest and fees accruing on such portion
of the Loans prior to the Effective Date shall be paid when due to Assignor.
5. For purposes of Section 12.2 of the Credit Agreement (Notices), the
New Lender's address and telecopy number shall be as specified below its
signature in this Supplement.
6. All references in the Credit Agreement and the other Credit
Documents shall be deemed to refer to the Credit Agreement as modified by this
Supplement. Exhibit C to the Credit Agreement is hereby replaced by Exhibit C to
this Supplement.
7. In all other respects, the Credit Agreement is and remains
unmodified and in full force and effect and is hereby ratified and confirmed.
8. This Supplement may be executed in any number of counterparts, all
of which taken together shall constitute one agreement, and any of the parties
hereto may execute this Supplement by signing any such counterpart.
IN WITNESS WHEREOF, the Company, the New Lender, Assignor and Agent
have executed this Supplement as of the date first above written.
COMPANY: SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
NEW LENDER:
-------------------------------------
By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
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Address for Notices:
Attn:
---------------------------------
Telephone No.:
-------------------------
Facsimile No.:
-------------------------
AGENT: THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
ASSIGNOR: ---------------------------------------
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
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