RESTATED LOAN AND SECURITY AGREEMENT
between
ASSOCIATES MORTGAGE FUNDING CORPORATION,
as a borrower
RYLAND MORTGAGE COMPANY,
as a borrower and a guarantor
BANK ONE, TEXAS, N.A.,
as Administrative Agent,
NATIONSBANK, N.A.,
as Documentation Agent
GUARANTY FEDERAL BANK, F.S.B.
and
PNC BANK, NATIONAL ASSOCIATION,
as Co-Agents
BANC ONE CAPITAL MARKETS, INC.,
as lead arranger and sole book runner,
and
CERTAIN LENDERS,
as Lenders
$200,000,000
May 21, 1999
Bank 1 One ▇▇▇▇▇▇
-----------------------------------
PREPARED BY ▇▇▇▇▇▇ AND ▇▇▇▇▇,
L.L.P.
-----------------------------------
TABLE OF CONTENTS
SECTION 1 DEFINITIONS AND REFERENCES.......................................2
1.1 Definitions......................................................2
1.2 Time References.................................................17
1.3 Other References................................................17
1.4 Accounting Principles...........................................17
SECTION 2 COMMITMENTS.....................................................17
2.1 Commitments.....................................................17
2.2 Borrowing Procedures Generally..................................17
2.3 Wet-Borrowing Procedures........................................19
2.4 Terminations....................................................19
2.5 Competitive-Bid Borrowings......................................20
SECTION 3 PAYMENT TERMS...................................................20
3.1 Notes...........................................................20
3.2 Payment Procedures..............................................20
3.3 Scheduled Principal and Interest................................21
3.4 Prepayments.....................................................22
3.5 Order of Application............................................23
3.6 Sharing.........................................................24
3.7 Interest Rates..................................................24
3.8 Interest Calculations...........................................25
3.9 Maximum Rate....................................................25
3.10 Interest Periods................................................25
3.11 Conversions.....................................................25
3.12 Booking Borrowings..............................................26
3.13 Basis Unavailable or Inadequate for LIBOR Rate..................26
3.14 Additional Costs................................................26
3.15 Change in Legal Requirements....................................27
3.16 Funding Loss....................................................27
3.17 Foreign Lenders, Participants, and Purchasers...................28
3.18 Fees............................................................28
SECTION 4 SECURITY........................................................28
4.1 Guaranty........................................................28
4.2 Collateral......................................................31
4.3 Eligible Collateral.............................................32
4.4 Borrowing-Base Reports..........................................32
4.5 Collateral Procedures...........................................33
4.6 Administrative Agent for Appraisals.............................33
4.7 Power of Attorney...............................................33
4.8 Redemption of Mortgage Collateral...............................34
4.9 Correction of Notes.............................................35
4.10 Release of Servicing Rights.....................................35
SECTION 5 CONDITIONS PRECEDENT............................................36
5.1 Initial Borrowing...............................................36
5.2 Each Borrowing..................................................36
5.3 General.........................................................36
SECTION 6 REPRESENTATIONS AND WARRANTIES..................................36
6.1 Purpose of Credit...............................................36
6.2 Corporate Existence, Good Standing, Authority and Compliance....36
6.3 Subsidiaries....................................................37
6.4 Authorization and Contravention.................................37
6.5 Binding Effect..................................................37
6.6 Fiscal Year and Financial Information...........................37
6.7 Litigation......................................................37
6.8 Taxes...........................................................37
6.9 Environmental Matters...........................................37
6.10 Employee Plans..................................................38
6.11 Government Regulations..........................................38
6.12 Transactions with Affiliates....................................38
6.13 Debt............................................................38
6.14 No Liens........................................................38
6.15 Perfection and Priority of Lender Liens.........................38
6.16 Principal Office, Etc...........................................38
6.17 Trade Names.....................................................38
6.18 Government Approvals............................................39
6.19 Appraisals......................................................39
6.20 Solvency........................................................39
6.21 Full Disclosure.................................................39
6.22 Y2K Issue.......................................................39
SECTION 7 AFFIRMATIVE COVENANTS...........................................39
7.1 Reporting Requirements..........................................40
7.2 Use of Proceeds.................................................41
7.3 Books and Records...............................................41
7.4 Inspections.....................................................41
7.5 Taxes...........................................................41
7.6 Expenses........................................................41
7.7 Maintenance of Existence, Assets, and Business..................41
7.8 Insurance.......................................................42
7.9 Further Assurances..............................................42
7.10 Take-Out Commitments and Servicing Contracts....................42
7.11 Compliance with Material Agreements.............................42
7.12 Appraisals......................................................42
7.13 Y2K Issue.......................................................42
7.14 Indemnification.................................................42
SECTION 8 NEGATIVE COVENANTS..............................................43
8.1 Debt............................................................43
8.2 Liens...........................................................43
8.3 Loans, Advances, and Investments................................43
8.4 Distributions...................................................43
8.5 Merger or Consolidation.........................................43
8.6 Liquidations and Dispositions of Assets.........................43
8.7 Use of Proceeds.................................................44
8.8 Collateral Matters..............................................44
8.9 Transactions with Affiliates. .................................44
8.10 Employee Plans..................................................44
(ii)
8.11 Compliance with Legal Requirements and Documents................44
8.12 Government Regulations..........................................45
8.13 Fiscal Year Accounting..........................................45
8.14 New Businesses..................................................45
8.15 Assignment......................................................45
SECTION 9 FINANCIAL COVENANTS.............................................45
9.1 Net Worth Covenants.............................................45
9.2 Leverage Ratio..................................................45
9.3 Net Income......................................................45
9.4 Cash Flow.......................................................45
SECTION 10 DEFAULTS AND REMEDIES...........................................45
10.1 Default.........................................................45
10.2 Remedies........................................................47
10.3 Right of Offset.................................................48
10.4 Private Sales...................................................49
10.5 Waivers.........................................................49
10.6 Performance by Administrative Agent.............................49
10.7 No Responsibility...............................................49
10.8 No Waiver.......................................................50
10.9 Cumulative Rights...............................................50
10.10 Proceeds........................................................50
10.11 Rights of Individual Lenders....................................50
10.12 Notice to Administrative Agent..................................50
10.13 Costs...........................................................51
SECTION 11 ADMINISTRATIVE AGENT............................................51
11.1 Authorization and Action........................................51
11.2 Administrative Agent's Reliance, Etc............................51
11.3 Administrative Agent and Affiliates.............................52
11.4 Lender Credit Decision..........................................52
11.5 Indemnification.................................................52
11.6 Successor Administrative Agent..................................53
11.7 Administrative Agent as Custodian...............................54
11.8 Documentation Agent.............................................54
SECTION 12 MISCELLANEOUS...................................................54
12.1 Nonbusiness Days................................................54
12.2 Communications..................................................54
12.3 Form and Number of Documents....................................55
12.4 Exceptions to Covenants.........................................55
12.5 Survival........................................................55
12.6 Governing Legal Requirement.....................................55
12.7 Invalid Provisions..............................................55
12.8 Conflicts Between Loan Documents................................55
12.9 VENUE AND SERVICE OF PROCESS....................................55
12.10 Discharge and Certain Reinstatement.............................56
12.11 Amendments, Consents, Conflicts, and Waivers....................56
12.12 Multiple Counterparts...........................................56
12.13 Parties.........................................................57
12.14 Participations..................................................57
(iii)
12.15 Transfers.......................................................58
12.16 Existing-Loan Agreement and Entireties..........................58
(iv)
SCHEDULES AND EXHIBITS
Schedule 2.1 - Lenders and Commitments
Schedule 2.2 - Wiring Instructions
Schedule 4.3 - Collateral
Schedule 4.4 - Borrowing-Base Calculations
Schedule 4.5 - Collateral Procedures
Schedule 5.1 - Closing Conditions
Schedule 6.3 - ▇▇▇▇▇▇'▇ Subsidiaries
Schedule 8.1 - Permitted Debt
Schedule 8.2 - Permitted Liens
Schedule 8.3 - Permitted Loans/Investments
Exhibit A-1 - Associates Note
Exhibit A-2 - ▇▇▇▇▇▇ Note
Exhibit A-3 - Intercompany Note
Exhibit A-4 - Competitive-Bid Note
Exhibit B-1 - Credit Request for Warehouse Borrowing
Exhibit B-2 - Credit Request for Working-Capital Borrowing
Exhibit B-3 - Conversion Request
Exhibit B-4 - Payment Direction
Exhibit B-5 - Competitive-Bid Acceptance
Exhibit C-1 - Collateral-Delivery Notice
Exhibit C-2 - Collateral-Conversion Notice
Exhibit C-3 - Borrowing-Base Report for Mortgage Collateral
Exhibit C-4 - Borrowing-Base Report for Working Capital
Exhibit C-5 - Compliance Certificate
Exhibit D-1 - Bailee Letter for Investors
Exhibit D-2 - Bailee Letter for Pool Custodians
Exhibit D-3 - Trust Receipt and Agreement
Exhibit D-4 - Request for Release
Exhibit E - Opinion of General Counsel
Exhibit F - Assignment and Acceptance
(v)
RESTATED LOAN AND SECURITY AGREEMENT
THIS AGREEMENT is entered into as of May 21, 1999, between ASSOCIATES
MORTGAGE FUNDING CORPORATION, a Delaware corporation as a borrower
("Associates"), ▇▇▇▇▇▇ MORTGAGE COMPANY, an Ohio corporation as a borrower and a
guarantor ("▇▇▇▇▇▇"), NATIONSBANK, N.A., as documentation agent ("Documentation
Agent"), GUARANTY FEDERAL BANK, F.S.B. and PNC BANK, NATIONAL ASSOCIATION, as
co-agents ("Co-Agents"), the Lenders described below, and BANK ONE, TEXAS, N.A.,
as agent for itself and the other Lenders ("Administrative Agent"). Associates
and ▇▇▇▇▇▇ have requested Lenders and Administrative Agent to, and, upon the
terms below, they have agreed to, enter into this agreement to extend, renew and
entirely amend and restate the Existing-Loan Agreement.
(See Section 1.1 for defined terms.)
▇. ▇▇▇▇▇▇ originates, acquires, markets, sells, and services Mortgage
Loans for one- to four-family owner-occupied dwellings.
B. Associates is ▇▇▇▇▇▇'▇ direct-wholly-owned Subsidiary and has borrowed
certain amounts under the Original-Loan Agreement and Existing-Loan Agreement
and advanced those amounts to ▇▇▇▇▇▇ under the Intercompany Note for financing
▇▇▇▇▇▇'▇ originating and acquiring Mortgage Loans until they are sold in the
secondary market.
(1) Associates has requested from Lenders Warehouse Borrowings under
this agreement on a revolving basis, initially in an amount necessary to
renew the outstanding borrowings for those purposes under the
Existing-Loan Agreement and additionally in amounts to be advanced by
Associates to ▇▇▇▇▇▇ under the Intercompany Note for ▇▇▇▇▇▇'▇ originating
and acquiring additional Mortgage Loans until they are sold in the
secondary market.
(2) Under the Original-Loan Agreement, among other things,
Associates granted a Lien on the Intercompany Note to secure, and ▇▇▇▇▇▇
unconditionally guaranteed, the Existing Obligation related to those
borrowings. Under Section 4 of this agreement, among other things,
Associates and ▇▇▇▇▇▇ (the "Companies") renew, extend, and ratify that
Lien as a Lender Lien under this agreement and that guaranty as a guaranty
of the Obligation relating to Warehouse Borrowings under this agreement.
(3) Each Company will derive substantial direct and indirect
benefits from Warehouse Borrowings under this agreement.
C. Under the Existing-Loan Agreement, ▇▇▇▇▇▇ also borrowed certain amounts
for purposes similar to those described below in this recital. ▇▇▇▇▇▇ has
requested from Lenders revolving extensions of credit, which may be through a
combination of Borrowings, under this agreement, initially in an amount
necessary to renew those extensions of credit under the Existing-Loan Agreement
and additionally for the following purposes:
(1) Financing, through Working-Capital Borrowings, of certain of
▇▇▇▇▇▇'▇ Foreclosure Payments, P&I Payments, and T&I Payments.
(2) Operating capital, through Working-Capital Borrowings, in
▇▇▇▇▇▇'▇ ordinary course of business.
D. Under the Original-Loan Agreement, among other things, ▇▇▇▇▇▇ granted
Liens, securing the Existing Obligation, in all of the Mortgage Loans and
Mortgage Securities identified under the Existing-Loan Agreement as Collateral
and all of its present and future Servicing Receivables and other Servicing
Rights arising under the Guides. Under Section 4 of this agreement, among other
things, ▇▇▇▇▇▇ renews and extends those Liens as Lender Liens under this
agreement.
E. The Companies hereby fully terminate the commitment of all Terminated
Lenders under the Existing-Loan Agreement, as of the date of this agreement, and
hereby invite and accept other lenders to become Lenders under this agreement.
F. Each Lender has severally agreed upon the terms of this agreement to
(1) extend Warehouse Borrowings and Working-Capital Borrowings on a ratable
basis up to the total of its commitments in this agreement so long as, among
other things, a Borrowing Excess never exists by any of the limitations in
Section 2.1 or Schedule 4.4 being exceeded and (2) from time to time offer to
provide Competitive-Bid Borrowings up to 25% of the total Commitments.
ACCORDINGLY, for adequate and sufficient consideration, the Companies,
Administrative Agent, and Lenders renew, extend, and entirely amend and restate
the Existing-Loan Agreement as follows:
SECTION 1 DEFINITIONS AND REFERENCES. Unless stated otherwise, the following
provisions apply to each Loan Document and annexes, exhibits, and schedules to
them and certificates, reports, and other writings delivered under them.
1.1 Definitions.1
"Affiliate" of a Person means any other individual or entity that,
directly or indirectly through ownership, voting securities, contract, or
otherwise, controls, is controlled by, or under common control with that Person.
For purposes of this definition (a) "control" or similar terms mean the power to
direct or cause the direction of management or policies of that Person or
ownership or voting control of 10% or more of the Voting Shares of that Person,
and (b) the Companies are "Affiliates" of each other.
"Administrative Agent" means, at any time, Bank One, Texas, N.A., or its
successor appointed under Section 11, acting as agent for Lenders under the Loan
Documents.
"Applicable Margin" means the following interest margin over a base rate
(i.e., either the Fed-Funds Rate or LIBOR) as applicable under this agreement:
---------------------- ------------ -----------
Type of Borrowing Applicable Applicable
Rate Margin
---------------------- ------------ -----------
---------------------- ------------ -----------
Warehouse Borrowings Fed-Funds 0.850%
(except Gestation Rate
Borrowings)
---------------------- ------------ -----------
2
---------------------- ------------ -----------
LIBOR 0.750%
---------------------- ------------ -----------
---------------------- ------------ -----------
Gestation Borrowings Fed-Funds 0.700%
Rate
---------------------- ------------ -----------
---------------------- ------------ -----------
LIBOR 0.600%
---------------------- ------------ -----------
---------------------- ------------ -----------
Non-Agency Borrowings Fed-funds 1.150%
Rate
---------------------- ------------ -----------
---------------------- ------------ -----------
LIBOR 1.050%
---------------------- ------------ -----------
---------------------- ------------ -----------
Working-Capital Fed-Funds 1.200%
Borrowings Rate
---------------------- ------------ -----------
---------------------- ------------ -----------
LIBOR 1.100%
---------------------- ------------ -----------
"Appraisal" means, for any Mortgage Loan, a written statement of the
market value of the real property securing it.
"Appraisal Legal Requirement" means any Legal Requirement that is
applicable to appraisals of mortgaged-residential property in connection with
transactions involving that property, including, without limitation, Title XI of
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, the
Federal Deposit Insurance Corporation Improvement Act of 1991, 12 C.F.R. Chapter
I, Part 34, Subpart C, 12 C.F.R. Chapter II, Subchapter A, Part 225, Subpart G,
and 12 C.F.R. Chapter III, Subchapter B, Part 323.
"Approved Investor" means (a) FHLMC, FNMA, and GNMA and (b) any other
Person from time to time named on a list agreed to by Administrative Agent and
the Companies, which Administrative Agent shall furnish to any Lender upon
request, as that list may be amended from time to time (i) by the Companies and
Administrative Agent to remove or add other names as Administrative Agent and
the Companies may agree, (ii) by either Administrative Agent or Determining
Lenders to remove any such other Person after Administrative Agent has or
Determining Lenders have given to the Companies notice of, and an opportunity to
discuss, the proposed removal of that Person, or (iii) automatically, without
signing by any party, to remove any such Person who then (A) is not Solvent, (B)
fails to pay its debts generally as they become due, (C) voluntarily seeks,
consents to, or acquiesces in the benefit of any Debtor Law, or (D) becomes a
party to or is made the subject of any proceeding provided for by any Debtor
Law, other than as a creditor or claimant, that could, in the Administrative
Agent's judgment, suspend such Person's ability to acquire and pay the full
purchase price for Mortgage Loans and Mortgage Securities or otherwise adversely
affect the Rights of either Company, Administrative Agent, or any Lender in
connection with the transactions contemplated in the Loan Documents.
"Assignment" means an Assignment and Assumption Agreement executed by a
selling Lender and a Purchaser under Section 12.15 and delivered to
Administrative Agent in substantially the form of Exhibit F.
3
"Associates" is defined in the preamble of this agreement, and, for
purposes of Section 4.1, includes, without limitation, Associates as a
debtor-in-possession and any party appointed in the future as a trustee or
receiver for Associates or all or substantially all of its assets under any
Debtor Law.
"Associates Note" means a promissory note executed and delivered by
Associates, payable to a Lender's order, in the stated principal amount of its
Commitment Percentage of the Commitment, and substantially in the form of
Exhibit A-1, as renewed, extended, amended, or replaced.
"Average-Adjusted-Fed-Funds Rate" means, for any period, an annual
interest rate equal to the quotient of (a) the sum of the Fed-Funds Rate plus
the Applicable Margin for each calendar day during that period divided by (b)
the number of days during that period.
"Average-Principal Debt" means, for any period, for any Lender, and for
Non-LIBOR Borrowings of any Borrowing Category, the quotient of (a) the sum of
the Principal Debt of Borrowings in that Borrowing Category owed to that Lender
as of the close of business for each calendar day, and that Principal Debt for a
day that is not a Business Day is the Principal Debt as of the close of business
for the preceding Business Day, divided by (b) the number of days during that
period.
"Borrowing" means any amount disbursed (a) by Lenders to Associates or
▇▇▇▇▇▇ under the Loan Documents, either as an original disbursement of funds or
the continuation of an amount outstanding or (b) by Administrative Agent or any
Lender in accordance with, and to satisfy a Company's obligations under, any
Loan Document.
"Borrowing Base" means, at any time, the sum of the "Borrowing Base for
Mortgage Collateral" (which includes the "Borrowing Base for Gestation
Collateral" and the "Borrowing Base for Non-Agency Loans"), and the "Borrowing
Base for Working Capital", as those terms are defined in Schedule 4.4, which
definitions are incorporated in this agreement verbatim.
"Borrowing-Base Report" means a report executed by Administrative Agent
and delivered to the Companies and Lenders in substantially the form of Exhibit
C-3 or executed by ▇▇▇▇▇▇ and delivered to Administrative Agent in substantially
the form of Exhibit C-4.
"Borrowing Category" means any category of Borrowing determined with
respect to its purpose, e.g., a (a) Warehouse Borrowing, which may be a
Gestation Borrowing, Dry Borrowing, or Wet Borrowing, or Non-Agency Borrowing,
(b) Working-Capital Borrowing, or (c) Competitive-Bid Borrowing.
"Borrowing Date" means, for any Borrowing, the date it is disbursed.
"Borrowing Excess" means, at any time, the amount by which any of the
Borrowing limitations of Section 2.1 or Schedule 4.4 are exceeded.
"Borrowing Type" means any type of Borrowing determined with respect to
the applicable interest option, e.g., a Fed-Funds Borrowing or LIBOR Borrowing.
"Business Day" means (a) for all purposes, any day other than Saturday,
Sunday, and any other day that commercial banks are authorized or obligated by
Legal Requirement to be closed in Texas, and (b) for
4
purposes of any LIBOR Borrowing, a day when commercial banks are open for
international business in London, England.
"Calendar Month" means a full calendar month and, if the date of this
agreement is after the first day of a calendar month or the Termination Date is
not on the last day of a calendar month, such definition shall include that
portion of a calendar month that includes the date of this agreement or the
Termination Date.
"Calendar Quarter" means a full calendar quarter and, if the date of this
agreement is after the first day of a calendar quarter or the Termination Date
is not on the last day of a calendar quarter, such definition shall include that
portion of any calendar quarter that includes the date of this agreement or the
Termination Date.
"Closing Date" means May 21, 1999.
"Co-Agents" is defined in the preamble to this agreement.
"Code" means the Internal Revenue Code of 1986.
"Collateral" is defined in Section 4.2.
"Collateral-Conversion Notice" means a notice executed by ▇▇▇▇▇▇ and
delivered to Administrative Agent in substantially the form of Exhibit C-2.
"Collateral-Delivery Notice" means a notice executed by ▇▇▇▇▇▇ and
delivered to Administrative Agent in substantially the form of Exhibit C-1.
"Collateral Documents" means the documents required to be delivered in
connection with various types of Collateral as described in Schedules 4.5 and
5.1.
"Commitment" means, for any Lender, the amount stated beside its name and
so designated on Schedule 2.1 (as it may be amended under this agreement), as
that amount may be canceled or terminated in accordance with this agreement.
"Commitment Percentage" means, at any time for any Lender, the proportion,
stated as a percentage, that its Commitment bears to the total Commitments.
"Companies" is defined in the recitals of this agreement.
"Competitive Bid" means an offer by a Lender to fund a Competitive-Bid
Borrowing.
"Competitive-Bid Acceptance" means an acceptance by Associates of all or
any part of a Lender's Competitive Bid substantially in the form of Exhibit B-5.
"Competitive-Bid Borrowing" means a Borrowing provided by a Lender under
Section 2.5 on the basis of a Competitive-Bid Acceptance.
5
"Competitive-Bid Note" means a promissory note executed and delivered by
Associates, payable to the order of a Lender who may provide one or more
Competitive-Bid Borrowings, in the stated amount agreed upon by Associates and
that Lender (which is neither more than 25% of the total Commitments nor less
than the Principal Debt of all Competitive-Bid Borrowings provided by that
Lender), and in substantially the form of Exhibit A-4.
"Competitive-Bid Rate" means, for any Competitive Bid made by a Lender,
the rate offered by that Lender and accepted by Associates in a Competitive-Bid
Acceptance.
"Competitive-Bid Request" means Associates' request for Competitive
Bids under Section 2.5.
"Compliance Certificate" means a certificate executed by a Responsible
Officer of Associates and Responsible Officer of ▇▇▇▇▇▇ and delivered to
Administrative Agent in substantially the form of Exhibit C-5.
"Conversion Date" is defined in Section 3.11.
"Conversion Request" means a notice executed by Associates or ▇▇▇▇▇▇, as
applicable, and delivered to Administrative Agent in substantially the form of
Exhibit B-3.
"Credit Request" means a request executed by Associates or ▇▇▇▇▇▇, as
applicable, and delivered to Administrative Agent in substantially the form of
Exhibit B-1 or B-2, as appropriate.
"Debt" means, for any Person, at anytime, and without duplication, the sum
of (a) all debt for borrowed money, for the deferred purchase price of property
or services, or which is evidenced by a bond, debenture, note, or other
instrument, (b) all obligations under capitalized leases, (c) all obligations in
respect of letters of credit, acceptances, or similar obligations issued or
created for that Person's account, (d) all direct and indirect guaranties of
Debt of others, (e) every obligation secured, or for which the holder of the
obligation is contingently or otherwise entitled to be secured, by any Lien on
that Person's property whether that Person is personally liable or assumes that
obligation, and (f) all liabilities for unfunded vested benefits under any
Employee Plan.
"Debtor Laws" means all applicable liquidation, conservatorship,
bankruptcy, moratorium, arrangement, receivership, insolvency,
reorganization, or similar Legal Requirements from time to time in effect and
generally affecting creditors' Rights.
"Default" is defined in Section 10.1.
"Default Rate" means, for any day, an annual interest rate equal to the
lesser of either (a) the Fed-Funds Rate plus 2.5% or (b) the Maximum Rate.
"Determining Lenders" means, at any time, any combination of Lenders whose
(a) Termination Percentages total at least 66_% at any time when a Default
exists, or (b) Commitment Percentages total at least 66_% at all other times.
"Distribution", with respect to any shares of any capital stock or other
equity securities issued by a Person, means (a) the retirement, redemption,
purchase, or other acquisition for value of those securities,
6
(b) the declaration or payment of any dividend with respect to those securities,
(c) any loan or advance by that Person to, or other investment by that Person
in, the holder of any of those securities, and (d) any other payment by that
Person with respect to those securities.
"Documentation Agent" is defined in the preamble to this agreement.
"Dry Borrowing" means a Warehouse Borrowing that is (a) not a Gestation
Borrowing, Wet Borrowing, or Non-Agency Borrowing, (b) supported by the
Borrowing Base for Mortgage Collateral, and (c) to be advanced by Associates to
Ryland under the Intercompany Note.
"Eligible" means, in respect of any item of Collateral, that such
Collateral satisfies the applicable conditions for eligibility described in
Schedule 4.3 and which, under Section 4.3, may be included in the Borrowing
Base.
"Eligible Collateral" means, at any time, each item of Collateral for
which the applicable conditions for eligibility described in Schedule 4.3 are
satisfied and which may under Section 4.3 be included in the Borrowing Base.
"Employee Plan" means an employee-pension-benefit plan covered by Title IV
of ERISA and established or maintained by either Company.
"Environmental Law" means any Legal Requirement that relates to the
pollution or protection of the environment or to Hazardous Substances.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliates" means the Companies and every trade or business,
whether or not incorporated, that, together with either Company, would be
treated as a single-employer under ss. 4001 of ERISA.
"Existing-Loan Agreement" means the Restated Loan and Security Agreement
(as renewed, extended, and amended through the date of this agreement) dated as
of June 16, 1995, between Associates, Ryland, Bank One, Texas, N.A., as Agent,
and certain lenders.
"Existing Obligation" means the Obligation as defined in and arising
under the Existing-Loan Agreement.
"Fed-Funds Borrowing" means a Borrowing bearing interest at the
Average-Adjusted-Fed-Funds Rate.
"Fed-Funds Rate" means, for any day, the annual interest rate, rounded
upwards, if necessary, to the nearest 0.01%, determined by Administrative Agent
to be either (a) the weighted average of the rates on overnight-federal-funds
transactions with member banks of the Federal Reserve System arranged by
federal-funds brokers for that day, or, if not a Business Day on the preceding
Business Day, as published by the Federal Reserve Bank of New York, or (b) if
not so published for any day, the average of the quotations for that day on
those transactions received by Administrative Agent from three federal-funds
brokers of recognized standing it may select.
7
"FHA" means the Federal Housing Administration within the United States
Department of Housing and Urban Development.
"FHA Loan" means a Mortgage Loan, other than loans for mobile homes,
either (a) full or partial payment of which is insured by FHA under the National
Housing Act or Title V of the Housing Act of 1949, (b) for which FHA has issued
a current, binding, and enforceable commitment for that insurance, or (c) which
is eligible for direct endorsement under the FHA Direct Endorsement Program.
"FHLMC" means the Federal Home Loan Mortgage Corporation.
"Financials" means balance sheets, profit and loss statements, statements
of cash flow and any other financial statements, reports, or information
specified by any Lender.
"FNMA" means the Federal National Mortgage Association.
"Foreclosure Payment" means the unreimbursed purchase price paid by Ryland
to repurchase a defaulted Mortgage Loan out of a Mortgage Pool in accordance
with ▇▇▇▇▇▇'▇ obligations under the applicable Servicing Contract or loan sale
contract.
"Foreclosure Receivable" means, at any time, any claim by Ryland in
respect of a Foreclosure Payment.
"Funding Loss" means (a) for any Competitive-Bid Borrowing, (i) any
reasonable, out-of-pocket loss or expense that the relevant Lender incurs
because either Company (A) fails or refuses, for any reason other than a default
by that Lender claiming that loss or expense, to take any Competitive-Bid
Borrowing for which it has given a Competitive-Bid Acceptance under this
agreement, or (B) prepays or pays any Competitive-Bid Borrowing before its
maturity date, plus (ii) any decrease in earnings due to the re-deployment of
funds at lower market rates for the remainder of the original term of that
Competitive-Bid Borrowing and (b) for LIBOR Borrowings, any reasonable,
out-of-pocket loss or expense that any Lender incurs because either Company (i)
fails or refuses, for any reason other than a default by the Lender claiming
that loss or expense, to take any LIBOR Borrowing that it has requested under
this agreement, or (ii) prepays or pays any LIBOR Borrowing or converts any
LIBOR Borrowing to another Borrowing Type at any time other than the last day of
the applicable Interest Period.
"GAAP" means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board that are applicable from time to time.
"Gestation Borrowing" means a Warehouse Borrowing that is (a) advanced to
Associates subject to the applicable sublimit set forth in Part C of Schedule
4.4 and supported by the Borrowing Base for Gestation Collateral, and (b) to be
advanced by Associates to Ryland under the Intercompany Note.
"GNMA" means the Government National Mortgage Association.
"Guide" means the following, as applicable under the circumstances, for
(a) FHLMC, the ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' & Servicers' Guide dated September 17, 1984,
(b) FNMA, the ▇▇▇▇▇▇ Mae Servicing Guide
8
dated June 30, 1990, and (c) GNMA, as applicable, either (i) the GNMA I Mortgage
Securities Guide, Handbook GNMA 5500.1REV-6, or (ii) the GNMA II Mortgage
Securities Guide, Handbook GNMA 5500.2.
"Hazardous Substance" means any substance (a) the presence of which
requires removal, remediation, or investigation under any Environmental Law, or
(b) that is defined or classified as a hazardous waste, hazardous material,
pollutant, contaminant, or toxic or hazardous substance under any Environmental
Law.
"Intercompany Note" means the promissory note executed by Ryland, payable
to Associates' order, and endorsed to Administrative Agent's order,
substantially in the form of Exhibit A-3, as renewed, extended, amended, and
replaced.
"Interest Period" is determined in accordance with Section 3.10.
"Investment Facilities" means any credit facility (as any of those
facilities may be renewed, extended, amended, or restated) now or in the future
entered into, between either Company and (a) any Lender or (b) any commercial or
savings bank organized under the Legal Requirements of the United States of
America with a combined capital and unimpaired surplus of at least $250,000,000,
and a rating of C or better by ▇▇▇▇▇▇▇▇ Bank Watch, Inc., or an IDC Financial
Publishing rating of at least 75, to enable that Company to make investments
having a maximum maturity of 31 days in (i) commercial paper given the highest
rating (at least A-1 or P-1 or the equivalent) by a nationally recognized credit
rating agency, (ii) United States governmental obligations, or (iii)
certificates of deposit, bankers acceptances, and repurchase agreements, issued
by the commercial bank providing the "Investment Facility" meeting the
requirements above, in connection with which there exists mutual Rights of
offset.
"Legal Requirements" means all applicable statutes, laws, treaties,
ordinances, rules, regulations, orders, writs, injunctions, decrees, judgments,
opinions, and interpretations of any Tribunal.
"Lender Lien" means any present or future first-priority Lien securing the
Obligation and assigned, conveyed, and granted to or created in favor of
Administrative Agent for the benefit of Lenders under this agreement.
"Lenders" means (a) the financial institutions named on the most recently
amended Schedule 2.1 prepared by Administrative Agent under this agreement, and
(b) subject to this agreement, their respective successors and permitted
assigns, but (c) not any Participant who is not otherwise a party to this
agreement.
"LIBOR" means, for a LIBOR Borrowing, the annual interest rate, rounded
upwards, if necessary, to the nearest 0.01%, equal to the annual interest rate,
rounded upwards, if necessary to the nearest 0.01%, that is the quotient
obtained by dividing (a) (i) the rate determined by Administrative Agent, at
approximately 9:30 a.m. on the second Business Day before the applicable
Interest Period, as the rate reported by Telerate Mortgage Services for deposits
in United States dollars in the London interbank market that are comparable in
amount and maturity of that Borrowing, or (ii) if Administrative Agent cannot
determine that rate, then the rate that deposits in United States dollars are
offered to Administrative Agent in the amount of that LIBOR Borrowing in the
London interbank market, at approximately 10:30 a.m., London, England, time on
the third Business Day before the applicable Interest Period, for deposits
comparable in amount and maturity of that Borrowing, by (b) one minus the
Reserve Requirement.
9
"LIBOR Borrowing" means a Borrowing, which may be a Warehouse Borrowing or
a Working-Capital Borrowing, that bears interest at the LIBOR Rate.
"LIBOR Rate" means, for any Interest Period, the sum of LIBOR for that
Interest Period plus the Applicable Margin.
"Lien" means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement, or encumbrance of any kind and any other
arrangement for a creditor's claim to be satisfied from assets or proceeds prior
to the claims of other creditors or the owners.
"Litigation" means any action by or before any Tribunal.
"Loan Documents" means (a) this agreement, certificates and reports
delivered under this agreement, and exhibits and schedules to this agreement,
(b) all agreements, documents, and instruments in favor of Administrative Agent
or Lenders (or Administrative Agent on behalf of Lenders) ever delivered under
this agreement or otherwise delivered in connection with any of the Obligation,
including, without limitation, all Notes, Security Documents, and
Balance-Carry-Forward Agreements, and (c) all renewals, extensions, and
restatements of, and amendments and supplements to, any of the foregoing.
"Market Value" means, at any time, a value determined for a Mortgage Loan
or a Mortgage Security in accordance with the following applicable procedures.
If Administrative Agent or Determining Lenders, as the case may be, are unable
to obtain any yield, price, or factor from the source or alternative source(s)
stated below, then Administrative Agent or Determining Lenders, as the case may
be, shall make a good-faith determination of that yield, price, or factor. That
value is:
(a) For a Mortgage Loan, either (i) the weighted-average-commitment
prices of all Take-Out Commitments relating to that Mortgage Loan or (ii)
at the sole election of either Administrative Agent or Determining Lenders
(whose election supersedes Administrative Agent's), the market value of
that Mortgage Loan determined upon the then-most recent posted-net-yield
(A) that is furnished by FNMA and published by Telerate Mortgage Services,
or (B) if not so published by Telerate Mortgage Services, that is
furnished by FNMA as determined by Administrative Agent or Determining
Lenders, as the case may be, or (C) for a Mortgage Loan not eligible for
FNMA purchase, that is reasonably established by Administrative Agent or
Determining Lenders, as the case may be.
(b) For a Mortgage Security, the product of (i) that Mortgage
Security's face amount times (ii) either:
(A) for a Mortgage Security not arising out of the pooling of
other Collateral, either (1) the most-recent percentage published by
Telerate Mortgage Services as the bid price for mandatory delivery
within 30 days for securities of the same type and bearing the same
interest rate as that Mortgage Security, or (2) if that bid price is
not published by Telerate Mortgage Services, the average of the
percentages obtained from three brokerage firms selected in good
faith by either Administrative Agent or Determining Lenders (whose
selection supersedes Administrative Agent's) as the bid price for
mandatory delivery within 30 days for securities of the same type
and bearing the same interest rate as that Mortgage Security, or
10
(B) for a Mortgage Security arising out of the pooling of
other Collateral, the factor representing the percentage of that
Mortgage Security's outstanding-principal balance obtained either
from Telerate Mortgage Service or, if not available from Telerate
Mortgage Services, by Administrative Agent from FHLMC, FNMA, or
GNMA, as appropriate.
"Material Agreement" means, for any Person, any agreement to which that
Person is a party, by which that Person is bound, or to which any assets of that
Person may be subject, and that is not cancelable by that Person upon less than
30-days notice without liability for further payment other than nominal penalty,
and the default under which or cancellation or forfeiture of which would be a
Material-Adverse Event.
"Material-Adverse Event" means, at any time, any circumstance or event
that, individually or collectively, is reasonably expected to result in a (a)
material-adverse impairment of Administrative Agent's or any Lender's ability to
enforce any of the Companies' collective obligations or any of Administrative
Agent's or any Lender's respective Rights under the Loan Documents or (b)
Default.
"Maximum Amount" and "Maximum Rate" respectively mean, for any day and for
any Lender, the maximum non-usurious amount and the maximum non-usurious rate of
interest that, under applicable Legal Requirement, the Lender is permitted to
contract for, charge, take, reserve, or receive on its portion of the
Obligation.
"Mortgage Collateral" means all Mortgage Loans, Mortgage Securities, and
related Collateral Documents offered as Collateral under this agreement.
"Mortgage Loan" means a loan that is (a) not a construction or commercial
loan, (b) evidenced by a valid promissory note with a maturity within 30 years
of origination, and (c) secured by a mortgage, deed of trust, or trust deed that
(except as otherwise specifically provided in the Loan Documents) (i) complies
with all applicable requirements for purchase under either the FNMA or FHLMC
standard form of conventional-mortgage-purchase contract, (ii) is otherwise in
form and substance satisfactory to Administrative Agent, and (iii) grants a
perfected first-priority Lien on the residential-real property.
"Mortgage Pool" means a (a) "group" or "grouping" of Mortgage Loans
assembled in accordance with, and as that term is used in, the FHLMC Guide, (b)
"pool" of Mortgage Loans assembled in accordance with, and as that term is used
in, the FNMA Guide or the GNMA I Guide, (c) "pool" of Mortgage Loans or a "loan
package" consisting of Mortgage Loans assembled in accordance with, and as those
terms are used in, the GNMA II Guide, or (d) any other pool of Mortgage Loans
assembled by an Approved Investor securing, and providing for pass-through
payments of principal and interest on, its Mortgage Securities.
"Mortgage Securities," sometimes called mortgage-backed securities and
whether in certificated or book-entry form, means (a) participation certificates
representing undivided interests in Mortgage Loans purchased by FHLMC under the
Emergency Home Finance Act of 1970, (b) modified pass-through mortgage-backed
certificates guaranteed by FNMA under the National Housing Act, (c) modified
pass-through mortgage-backed certificates guaranteed by GNMA under ss. 306(g) of
the National Housing Act, or (d) any other security issued by an Approved
Investor that is based on or backed by a Mortgage Pool providing for
pass-through payments of principal and interest.
"Multiemployer Plan" means a multiemployer plan as defined in ▇▇.▇▇. 3(37)
or 4001(a)(3) of ERISA or ss. 414(f) of the Code to which any ERISA Affiliate is
making, or has made, or is accruing, or has accrued, an obligation to make
contributions.
11
"Net Worth" means, for Ryland, on a consolidated basis, and at any time,
▇▇▇▇▇▇'▇ stockholders' equity reflected on its balance sheet.
"Non-Agency Borrowing" means a Borrowing that is (a) advanced to
Associates subject to the applicable sublimit set forth in Part C of Schedule
4.4 and supported by the Borrowing Base for Non-Agency Collateral, and (b) to be
advanced by Associates to Ryland under the Intercompany Note.
"Non-LIBOR Borrowing" means a Borrowing, which may be a Warehouse
Borrowing or Working-Capital Borrowing, that does not bear interest at the LIBOR
Rate.
"Notes" means the Associates Notes, Ryland Notes, and Competitive-Bid
Notes.
"Obligation" means all (a) of the Existing Obligation that is renewed
under this agreement and the Loan Documents, and (b) present and future
indebtedness, obligations, and liabilities of either Company to Administrative
Agent or any Lender and related to any Loan Document, whether principal,
interest, fees, costs, attorneys' fees, or otherwise, (c) amounts related to the
Loan Documents that would become due but for operation of 11 U.S.C. ▇▇.▇▇. 502
and 503 or any other provision of Title 11 of the United States Code, (d)
pre-and post-maturity interest on any of the foregoing, including, without
limitation, all post-petition interest if either Company voluntarily or
involuntarily files for protection under any Debtor Law, and (e) all renewals,
extensions, and modifications of any of the foregoing.
"Original-Credit Agreement" means the Loan and Security Agreement (as
renewed, extended, and amended through the date of this agreement) dated as of
May 27, 1994, between Associates, Ryland, Bank One, Texas, N.A., as Agent, and
certain Lenders.
"Participant" is defined in Section 12.14.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Debt" means Debt described on Schedule 8.1.
"Permitted Liens" means Liens described on Schedule 8.2.
"Permitted Loans/Investments" means loans and investments described on
Schedule 8.3.
"Person" means any individual, entity, or Tribunal.
"P&I Payment" means an unreimbursed advance or payment by Ryland to effect
the timely payment of scheduled principal and interest on Mortgage Securities
that are backed by a Mortgage Pool serviced by Ryland in accordance with
▇▇▇▇▇▇'▇ obligations under the applicable Servicing Contract to cover a
short-fall between the principal and interest collected from mortgagors in
respect of that Mortgage Pool and the principal and interest due on those
Mortgage Securities.
"P&I Receivable" means, at any time, any claim by Ryland in respect of
a P&I Payment.
"Potential Default" means the occurrence of any event or existence of any
circumstance that would, upon notice, time lapse, or both, become a Default.
12
"Principal Debt" means, at any time, the outstanding principal balance
of all Borrowings.
"Purchaser" is defined in Section 12.15.
"Regulation U" means Regulation U promulgated by the Board of Governors of
the Federal Reserve System, 12 C.F.R. Part 221.
"Regulation X" means Regulation X promulgated by the Board of Governors of
the Federal Reserve System, 12 C.F.R. Part 224.
"Representatives" means representatives, officers, directors,
employees, attorneys, and agents.
"Repurchase Agreement" means any agreement, present or future, under which
Ryland or any of its Affiliates sells Mortgage Securities with an obligation to
repurchase them.
"Reserve Requirement" means, at any time, the maximum rate at which
reserves (including any marginal, special, supplemental, or emergency reserves)
are required to be maintained under regulations issued from time to time by the
Board of Governors of the Federal Reserve System by member banks of the Federal
Reserve System against "eurocurrency liabilities" (as that term is used in
Regulation D of the Board of Governors of the Federal Reserve System).
"Responsible Officer" means the chairman, president, chief executive
officer, chief financial officer, treasurer, or any assistant treasurer.
"Rights" means rights, remedies, powers, privileges, and benefits.
"Ryland" is defined in the preamble of this agreement.
"▇▇▇▇▇▇ Group" means The ▇▇▇▇▇▇ Group, Inc., a Maryland corporation and
▇▇▇▇▇▇'▇ parent corporation.
"Ryland Note" means a promissory note executed and delivered by Ryland,
payable to a Lender's order, in the stated principal amount of its Commitment
Percentage of the Commitment, and substantially in the form of Exhibit A-2, as
renewed, extended, amended, or replaced.
"Security Documents" means all documents now or in the future executed and
delivered by either Company or any other Person to create a Lender Lien or
otherwise assure or secure payment or performance of any of the Obligation,
including, without limitation, the documents described on Schedules 4.5 or 5.1,
as those documents may be renewed, extended, amended, restated, or substituted.
"Senior Obligations" means the Obligation and all present and future Debt
of the Companies under the Investment Facilities.
A "servicer" means variously a "seller," "servicer," "issuer," or
"lender," as defined or used in the applicable Guide in respect of a Person
having Servicing Rights.
13
"Servicing Contract" means, at any time, a Guide or any other present or
future written agreement between an investor and Ryland acting as a servicer, or
master servicer in the case of a sub-servicing arrangement, providing for Ryland
to service mortgage loans or mortgage pools, as that Guide or agreement may be
supplemented by applicable manuals, guides, and Legal Requirements.
"Servicing Receivables" means, at any time, all Eligible Foreclosure
Receivables, Eligible P&I Receivables, and Eligible T&I Receivables.
"Servicing Rights" means, for Ryland and at any time, all present and
future Rights as servicer or master servicer under Servicing Contracts,
including, but not limited to, all Rights to receive Servicing Receivables and
all other compensation, payments, reimbursements, termination and other fees,
and proceeds of any disposition of those Rights.
"Servicing Subsidiary" means any wholly owned Subsidiary of Ryland that
owns servicing rights in respect of mortgage loans.
"Settlement Account" means a non-interest bearing deposit account
established by Ryland with Administrative Agent, styled and numbered "RMC
Warehouse Settlement Account," Account No. 0100073055, for deposit of payments
from investors and the settlement of collections from Mortgage Securities in
connection with Mortgage Collateral.
"Solvent" means, for any Person, that (a) the fair-market value of its
assets exceeds its liabilities, (b) it has sufficient cash flow to enable it to
pay its debts as they mature, and (c) it does not have unreasonably small
capital to conduct its businesses.
"Stated-Termination Date" means May 20, 2002.
"Subordinated Debt" means all present and future debt, liabilities, and
obligations of Associates to Ryland, whether direct, indirect, fixed,
contingent, liquidated, unliquidated, joint, several, joint and several, due now
or in the future, created directly or acquired by assignment or otherwise, or
evidenced in writing or not.
"Subsidiary" mean, for any Person and at any time, any corporation, more
than 50% of the Voting Shares of which is directly or indirectly owned by that
Person.
"Take-Out Commitment" means a written and binding commitment (a) from an
Approved Investor to purchase Mortgage Securities or, within a period of 12
months from the date originated, Mortgage Loans, and (b) for which there is no
condition that cannot be reasonably anticipated to be satisfied or complied with
before its expiration.
"Tangible-Net Worth" means, for Ryland, on a consolidated basis, at
any time, and without duplication, the sum of:
(a) ▇▇▇▇▇▇'▇ Net Worth; plus
14
(b) ▇▇▇▇▇▇'▇ long-term Debt if its maturity is no earlier than 30
days after the Stated-Termination Date and its payment is subordinated to
payment of the Senior Obligations in form and substance acceptable to
Determining Lenders; minus
(c) ▇▇▇▇▇▇'▇ goodwill, including, without limitation, any amounts
representing the excess of the purchase price paid for acquired assets,
stock, or interests over the book value assigned to them; minus
(d) ▇▇▇▇▇▇'▇ patents, trademarks, service marks, trade names, and
copyrights; minus
(e) ▇▇▇▇▇▇'▇ other intangible assets.
"Taxes" means, for any Person, taxes, assessments, or other governmental
charges or levies imposed upon it, its income, or any of its properties,
franchises, or assets.
"Terminated Lender" means any Lender under the Existing-Loan Agreement
whose commitment to extend credit under that agreement has been terminated and
who is not a Lender under this agreement.
"Termination Date" means the earlier of either (a) the Stated-Termination
Date or (b) the date all commitments or obligations of all Lenders to extend any
credit under this agreement have terminated or been canceled.
"Termination Percentage" means, at any time for any Lender, the
proportion, stated as a percentage, that the portion of the Principal Debt
directly or indirectly owed to that Lender bears to the total Principal Debt
directly or indirectly owed to all Lenders.
"T&I Payment" means an unreimbursed advance or payment by Ryland to cover
tax- and insurance-escrow payments not paid when required by a mortgagor under a
Mortgage Loan in accordance with ▇▇▇▇▇▇'▇ obligations under the applicable
Servicing Contract.
"T&I Receivable" means, at any time, any claim by Ryland in respect of
a T&I Payment.
"Total Liabilities" means, for Ryland, on a consolidated basis, and at any
time, all amounts that should be reflected as a liability on ▇▇▇▇▇▇'▇ balance
sheet. The consolidated-repurchase and consolidated-reverse-repurchase
obligations of Ryland and its Affiliates under Repurchase Agreements in
connection with the sale of, and secured by, Mortgage Securities may be excluded
from Total Liabilities.
"Tribunal" means any (a) local, state, or federal judicial, executive, or
legislative instrumentality, (b) private arbitration board or panel, or (c)
central bank.
"UCC" means the Uniform Commercial Code or similar Legal Requirements
enacted in applicable jurisdiction.
"VA" means the Veteran's Administration.
"VA Loan" means a Mortgage Loan either (a) full or partial payment of
which is guaranteed by VA under the Servicemen's Readjustment Act of 1944 or
Chapter 37 of Title 38 of the United States Code, (b) for
15
which VA has issued a current binding and enforceable commitment for such a
guaranty, or (c) which is subject to automatic guarantee by VA, which in each
case, the applicable guaranty, commitment to guarantee, or automatic guaranty is
for the maximum amount permitted by Legal Requirement.
"Voting Shares" means, for any corporation, shares of any class or classes
(however designated) having ordinary voting power for the election of at least a
majority of the board of directors (or other governing body) of that
corporation, other than shares having that power only by reason of the happening
of a contingency.
"Warehouse Account" means a non-interest bearing deposit account
established by Associates with Administrative Agent, styled and numbered "AMFC
Warehouse Borrowing Account," Account No. 1885162402, for deposit of Warehouse
Borrowings, funding of advances to Ryland under the Intercompany Note, deposit
of payments on the Intercompany Note, and deposit of payments of the Obligation
related to Warehouse Borrowings.
"Warehouse Borrowing" means (a) a Borrowing (that may be a Gestation
Borrowing, Non-Agency Borrowing, Wet Borrowing, or Dry Borrowing) that is
advanced by Lenders, in accordance with their Commitment Percentages, may never
exceed the Commitment, and is supported by the Borrowing Base for Mortgage
Collateral, (b) that is advanced to Associates under this agreement, and (c)
that is to be advanced to Ryland under the Intercompany Note by the next
Business Day for Ryland to originate or acquire Mortgage Loans until they are
sold in the secondary market.
"Warehouse Obligation" is defined in Section 4.1(a).
"Wet Borrowing" means a Warehouse Borrowing that is (a) advanced to
Associates subject to the applicable sublimits set forth in Part C of Schedule
4.4 and pursuant to Section 2.3 and supported by the Borrowing Base for Mortgage
Collateral, and (b) to be advanced by Associates to Ryland under the
Intercompany Note.
"Wire Instructions" means, for any party to this agreement, the
information regarding wire transfers of funds to it described for it on Schedule
2.2.
"Working-Capital Account" means a non-interest bearing deposit account
established by ▇▇▇▇▇▇ with Administrative Agent, styled and numbered "RMC
Working Capital Account," Account No. 1885162394, for deposit of Working-Capital
Borrowings and payments of the Obligation related to Working-Capital Borrowings.
"Working-Capital Borrowing" means a Borrowing that is (a) advanced by
Lenders to ▇▇▇▇▇▇ in accordance with their Commitment Percentage under Section
2.2, (b) subject to the applicable sublimit set forth in Part D of Schedule 4.4,
(c) supported by the Borrowing Base for Working Capital, and (d) to be used as
operating capital in ▇▇▇▇▇▇'▇ ordinary course of business.
"Y2K Issue" means the risk that computer applications used by any Company
or by any of its suppliers or vendors may be unable to properly recognize and
perform date-sensitive functions.
16
1.2 Time References. Time references (e.g., 9:30 a.m.) are to time in
Dallas, Texas. In calculating a period from one date to another, the word "from"
means "from and including" and the word "to" or "until" means "to but
excluding."
1.3 Other References. Where appropriate, the singular includes the plural
and vice versa, and words of any gender include each other gender. Heading and
caption references may not be construed in interpreting provisions. Monetary
references are to currency of the United States of America. Section, paragraph,
annex, schedule, exhibit, and similar references are to the particular Loan
Document in which they are used. References to "telecopy," "facsimile," "fax,"
or similar terms are to facsimile or telecopy transmissions. References to any
Person include that Person's heirs, personal representatives, successors,
trustees, receivers, and permitted assigns. References to any Legal Requirement
include every amendment or supplement to it, rule and regulation adopted under
it, and successor or replacement for it. References to any Loan Document or
other document include every renewal and extension of it, amendment and
supplement to it, and replacement or substitution for it. References to payment
on demand mean by the next Business Day after the applicable demand is given
under Section 12.2.
1.4 Accounting Principles. GAAP determines all accounting and financial
terms and compliance with financial reporting covenants. GAAP in effect on the
date of this agreement determines compliance with financial covenants.
Otherwise, all accounting principles applied in a current period must be
comparable in all material respects to those applied during the preceding
comparable period other than changes concurred in by the Companies' independent
public accountants.
SECTION 2 COMMITMENTS
2.1 Commitments. Subject to the limitations below and other provisions of
the Loan Documents and on Business Days before the Termination Date, each Lender
severally agrees to provide its Commitment Percentage of Borrowings so long as,
(a) each disbursement of a Borrowing must be equal to or greater than $100,000
in the aggregate; (b) no Borrowing may be disbursed that would cause (i) the
total Principal Debt to exceed the lesser of either the total Commitments or the
Borrowing Base; (ii) each Lender's Principal Debt to exceed the lesser of either
its Commitment or its Commitment Percentage of the Borrowing Base; (iii) the
total Principal Debt of all Warehouse Borrowings to exceed the lesser of either
the Commitment or the Borrowing Base for Mortgage Collateral; (iv) the total
Principal Debt of all Working-Capital Borrowings to exceed the lesser of either
the Commitment or the Borrowing Base for Working Capital; (v) the total
Principal Debt of Competitive-Bid Borrowings to exceed 25% of the total
Commitment; and (vi) any of the applicable sublimits on Schedule 4.4 to be
exceeded. The foregoing limitations must be read together and are not mutually
exclusive.
2.2 Borrowing Procedures Generally. The following conditions and procedures
apply to all Warehouse Borrowings, subject to the conditions and provisions for
Wet Borrowings in Section 2.3, and all Working-Capital Borrowings:
(a) Wire Instructions. Until changed by a notice to each other party
to this agreement, each party's Wire Instructions are described on
Schedule 2.2, as that schedule may be unilaterally amended by
Administrative Agent (following consultation with the applicable one or
more Lenders) and distributed to the parties to this agreement in order to
reflect changes in accordance with each notice given under this clause.
17
(b) Credit Request. Associates or ▇▇▇▇▇▇, as applicable, may only
request a Borrowing by delivering to Administrative Agent, a related
Credit Request before 1:00 p.m. on either the date on which the Borrowing
is requested to be made (the "Borrowing Date") for a Fed-Funds Borrowing
or the third-Business Day before the Borrowing Date for a LIBOR Borrowing.
(i) A Credit Request must, among other things, indicate
whether Associates or ▇▇▇▇▇▇ is obtaining the Borrowing, indicate
the Borrowing Category and Borrowing Type, and irrevocably binds the
Companies when it is delivered to Administrative Agent.
(ii) Administrative Agent shall use its best efforts to
promptly, but at least by 2:00 p.m. on the day it timely receives a
Credit Request for a Working-Capital Borrowing, fax a copy of it to
each Lender and confirm it by telephone.
(iii) For any Warehouse Borrowing requested under a Credit
Request, ▇▇▇▇▇▇ must cause the delivery to Administrative Agent of
(A) a related Collateral-Delivery Notice before 10:30 a.m. on the
date that the Credit Request must be delivered and (B) except as
permitted for Wet Borrowings, all of the Collateral Documents
required by Schedules 4.5 and 5.1 for any new Collateral offered in
that Collateral-Delivery Notice.
(c) Remittance by Lenders. Subject to compliance with Section 4.4,
each Lender shall remit its Commitment Percentage of any Warehouse
Borrowing or Working-Capital Borrowing requested in a Credit Request or
the amount of any Competitive-Bid Borrowing requested in a Competitive-Bid
Acceptance to Administrative Agent's principal office in Dallas, Texas, by
wire transfer according to Administrative Agent's Wiring Instructions on
Schedule 2.2, in funds that are available for immediate use by
Administrative Agent by 3:30 p.m. on the applicable Borrowing Date.
(d) Funding by Administrative Agent. Subject to receipt of those
funds, Administrative Agent shall, unless to its actual knowledge any of
the applicable conditions precedent have not been satisfied by the
Companies or waived by Lenders, make those funds available to or for the
account of Associates or ▇▇▇▇▇▇, as the case may be, by 4:00 p.m. on the
Borrowing Date:
o For any Warehouse Borrowing, by depositing those funds into
the Warehouse Account.
o For any Working-Capital Borrowing, by depositing those funds
into the Working-Capital Account.
(e) Non-remittance Under Credit Request. Absent contrary written
notice from a Lender received by Administrative Agent by 4:00 p.m. on the
applicable Borrowing Date, Administrative Agent may assume that each
Lender has remitted its portion of a Borrowing, as required by Section
2.2(c), under a Credit Request available to Administrative Agent on the
applicable Borrowing Date and may, but is not obligated to, make available
to Associates or ▇▇▇▇▇▇, as the case may be, a corresponding amount. If a
Lender fails to remit its portion of that Borrowing to Administrative
Agent on that Borrowing Date as so required, whether because of that
Lender's default, because that Lender is not open for business on that
Business Day, or otherwise, then Administrative Agent may recover that
amount on demand (i) from that Lender, together with interest at the
Fed-Funds Rate, during the period from the Borrowing Date to the date
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Administrative Agent recovers that amount from that Lender, which payment
is then deemed to be that Lender's required remittance of that Borrowing,
or (ii) if that Lender fails to pay that amount upon demand, then from
Associates or ▇▇▇▇▇▇, as the case may be, together with interest at an
annual interest rate equal to the rate applicable to the requested
Borrowing during the period from the Borrowing Date to the date
Administrative Agent recovers that amount from Associates or ▇▇▇▇▇▇, as
the case may be. Notwithstanding these provisions, each Lender remains
obligated to lend its portion of that Borrowing as required by Section
2.2(c), assumes the credit risk for that amount when the Borrowing is made
available to or for Associates or ▇▇▇▇▇▇, as the case may be, and, after
Administrative Agent has recovered the amount of interest provided for in
clause (i) above, is entitled to interest on that amount from the
applicable Borrowing Date.
(f) Other Lender's Responsibility. Although no Lender is responsible
for the failure of any other Lender to remit its required portion of any
Borrowing, the failure of any Lender to remit its required portion of any
Borrowing does not excuse any other Lender from remitting its required
portion of that Borrowing.
2.3 Wet-Borrowing Procedures. The conditions and procedures of Section 2.2
apply to Wet Borrowings except as follows:
(a) Collateral Documents. A Wet Borrowing may be funded before
delivery to Administrative Agent of all of the required Collateral
Documents for the Eligible Mortgage Loans supporting that Wet Borrowing.
The Collateral-Delivery Notice delivered to Administrative Agent for a Wet
Borrowing may be sent to Administrative Agent by fax but must identify and
describe each Mortgage Loan that supports that Wet Borrowing and the
amount of the Borrowing Base for Eligible Mortgage Loans applicable to it.
By delivering the Collateral-Delivery Notice, ▇▇▇▇▇▇ confirms its grant
under this agreement of Lender Liens, from the Borrowing Date for each Wet
Borrowing, on each Collateral Document offered as Collateral in that
Collateral-Delivery Notice that is perfected subject to the delivery of
the related promissory notes for those Mortgage Loans to Administrative
Agent or its bailee.
(b) Funding by Administrative Agent. Administrative Agent shall make
the funds available to Associates by 4:00 p.m. on the Borrowing Date by
depositing these funds into the Warehouse Account.
2.4 Terminations.
(a) Terminations. After giving written and irrevocable notice to
Administrative Agent and each Lender at least three Business Days before
the effective date of any termination, Associates may fully terminate all
or any portion of the total Commitments before the Stated-Termination
Date; provided, however, that any partial termination must be ratable in
accordance with each Lender's Commitment Percentage. A full or partial
termination under this clause (a) (i) may only happen if no Default exists
(unless otherwise consented to by Lenders, whose Termination Percentages
total at least 51%), and (ii) requires (A) payment of any related Funding
Loss and (B) no other premium or penalty.
(b) Stated-Termination Date. The total Commitments and each Lender's
offer to provide Competitive-Bid Borrowings each automatically terminate
on the Stated-Termination Date.
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(c) Reinstatement. Once terminated, no part of any Commitment may be
reinstated except by an amendment to this agreement under Section 12.11.
2.5 Competitive-Bid Borrowings. The following conditions and procedures
apply to Competitive-Bid Borrowings. Associates may make a Competitive-Bid
Request on the applicable Borrowing Date by telephone or fax to any one or more
Lenders as it may select. Any of those Lenders may give to Associates one or
more responding Competitive Bids by telephone or fax by 9:00 a.m., as required
by the Competitive-Bid Request, on that Borrowing Date, each of which is merely
an indicative rate for that Lender when made. Associates may accept any Lender's
Competitive Bid (whether at a higher, lower, or equal Competitive-Bid Rate as
any other Lender's Competitive Bid) by mutually confirming by telephone an
irrevocable rate, amount, and maturity date with that Lender at some point
between 9:00 a.m. and 11:00 a.m. and by delivering to that Lender a properly
completed Competitive-Bid Acceptance by 12:15 p.m. on that Borrowing Date. The
delivery of a Competitive-Bid Acceptance constitutes confirmation by Associates
that all applicable conditions precedent to the related Borrowing have been
satisfied. The failure to deliver any Competitive-Bid Acceptance by 12:15 p.m.
to any Lender for a Competitive Bid constitutes a rejection of that Competitive
Bid. By 12:15 p.m. on that Borrowing Date Associates shall also notify
Administrative Agent of the Lender, principal amount, and maturity date of each
Competitive-Bid Acceptance applicable to that date. By 1:00 p.m. on that day if
it properly receives that notice, Administrative Agent shall confirm by fax to
each applicable Lender whether its proposed Competitive-Bid Borrowing would be
permitted under Section 2.1 based upon the Borrowing-Base Report received from
Custodian that day. Each Lender receiving a Competitive-Bid Acceptance shall
remit the applicable Borrowing to Administrative Agent in accordance with
Section 2.2(c). Subject to receipt of those funds, Administrative Agent shall,
unless to its actual knowledge any of the applicable conditions precedent have
not been satisfied by Associates or waived by all Lenders, by 4:00 p.m. on the
Borrowing Date, deposit those funds in accordance with Section 2.2(d).
SECTION 3 PAYMENT TERMS
3.1 Notes. The Principal Debt of Warehouse Borrowings and interest on them
are evidenced by the Associates Notes. The Principal Debt of Working-Capital
Borrowings and interest on them are evidenced by the ▇▇▇▇▇▇ Notes. The Principal
Debt of Competitive-Bid Borrowings and interest on them are evidenced by the
Competitive-Bid Notes. Associates shall negotiate with each Lender as to the
amount (subject to the terms of this agreement) and timing of delivery of a
Competitive-Bid Note, if any, or one or more replacement Competitive-Bid Notes,
if any, to that Lender. Notwithstanding any sale of participating interests
under Section 12.14 or related-contrary notice, the Companies and Administrative
Agent may deem and treat each Lender as the absolute owner of its respective one
or more Notes for all purposes.
3.2 Payment Procedures.
(a) Payments by Companies. Associates or ▇▇▇▇▇▇ shall make each
payment and prepayment of its respective portion of (i) interest accruing,
while no Default exists, on each Competitive-Bid Borrowing directly to the
Lender of that Borrowing in accordance with that Lender's Wire
Instructions and in funds that are available for immediate use by that
Lender, and (ii) any of the Obligation in all other cases directly to
Administrative Agent, on behalf of Lenders, in accordance with
Administrative Agent's Wiring Instructions on Schedule 2.2 and in funds
that are available for immediate use by Administrative Agent. Payments
that are received by 1:00 p.m. on a Business Day are deemed received on
that Business Day. Payments that are received after 1:00 p.m. on a
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Business Day are deemed received on the next Business Day. Subject to
Section 3.9, applicable interest continues to accrue through the calendar
day immediately before the Business Day on which the payment is deemed
received. Each day, Administrative Agent will provide each Lender with the
LIBOR rate in effect for that day. Only Administrative Agent invoices
▇▇▇▇▇▇ for interest under this agreement (except the applicable Lender
must invoice Associates for interest on its respective Competitive-Bid
Borrowings). ▇▇▇▇▇▇ or Associates, after reviewing such invoice, shall
forward the invoice to Administrative Agent for distribution of funds to
each Lender in accordance with such invoice. All interest invoices
received by Administrative Agent from ▇▇▇▇▇▇ are deemed correct. Any
dispute in interest amount must be resolved between ▇▇▇▇▇▇ and such Lender
directly.
(b) Distributions by Administrative Agent. When received under
clause (a) above, Administrative Agent shall distribute each payment by
wire transfer to each appropriate Lender, in accordance with each Lender's
share under Section 3.5, reasonably promptly after receipt but by no later
than 2:30 p.m. on the Business Day the payment is deemed to be received by
Administrative Agent under clause (a) above. If Administrative Agent fails
to distribute any payment to any Lender as required by this clause, then
Administrative Agent shall pay to that Lender on demand interest on that
payment, from the date due under this clause until paid, at an annual
interest rate equal from day to day to the Fed-Funds Rate.
3.3 Scheduled Principal and Interest. Associates (in respect of any of the
Obligation related to Warehouse Borrowings) or ▇▇▇▇▇▇ (in respect of any of the
Obligation related to Working-Capital Borrowings) shall make scheduled payments
of the Principal Debt and interest on it as provided in this section. Each
interest payment may be deferred until the later of either the due date or the
date that is three Business Days after the appropriate Company is given written
notice of the amount of it. Unless otherwise provided in this agreement:
(a) Competitive-Bid Borrowings. Associates shall pay the Principal
Debt of, and accrued interest on, each Competitive-Bid Borrowing to each
Lender on the earlier of either (i) the number of days (but not more than
90 days) stated in the related Competitive-Bid Acceptance after the
applicable Borrowing Date or (ii) the Termination Date.
(b) LIBOR-Borrowing Interest. For each LIBOR Borrowing, Associates
(in respect of Warehouse Borrowings) or ▇▇▇▇▇▇ (in respect of
Working-Capital Borrowings) shall pay interest as it accrues on its
Interest Period's last day and, if the Interest Period is longer than
three months, 90 days after its Interest Period's first day and each 90
days after that.
(c) Non-LIBOR-Borrowing Interest. For each Non-LIBOR Borrowing,
Associates (in respect of Warehouse Borrowings) or ▇▇▇▇▇▇ (in respect of
Working-Capital Borrowings) shall pay interest as it accrues (i) through
the last day of the Calendar Month preceding the payment date, on the 15th
day of each Calendar Month beginning June 15, 1999, and (ii) on the
Termination Date.
(d) Default-Rate Interest. Associates (in respect of Warehouse
Borrowings) or ▇▇▇▇▇▇ (in respect of Working-Capital Borrowings) shall pay
interest at the Default Rate on demand as it accrues.
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(e) Obligation. Associates (in respect of any of the Obligation
related to Warehouse Borrowings) or ▇▇▇▇▇▇ (in respect of any of the
Obligation related to Working-Capital Borrowings) shall pay the full
unpaid Principal Debt and all other remaining Obligation on the
Termination Date.
(f) Existing Obligation. In respect of the Existing Obligation, the
Companies shall (i) on the Closing Date, pay to each Terminated Lender all
Existing Obligation owed to that Terminated Lender, (ii) on the Closing
Date, pay to each Lender the amount of principal owed to that Lender under
the Existing-Loan Agreement that would exceed any of the Borrowing
limitations applicable to that Lender under Section 2.1, and (iii) on the
dates that such interest and fees would otherwise be payable under this
agreement, pay to each Lender all unpaid interest and fees accrued to that
Lender's benefit as of the Closing Date under the Existing-Loan Agreement.
3.4 Prepayments.
(a) Commitment Termination. Associates (in respect of any of the
Obligation related to Warehouse Borrowings) or ▇▇▇▇▇▇ (in respect of any
of the Obligation related to Working-Capital Borrowings) shall, on the
date that full or partial termination of the total Commitments becomes
effective under Section 2.4, pay to Administrative Agent for the benefit
of Lenders the full Obligation in the case of a full termination or, in
the case of a partial termination, the amount that the Principal Debt
exceeds the reduced total Commitments, together with accrued and unpaid
interest on such excess, all accrued fees, if any, and any related Funding
Loss.
(b) Borrowing Excess. If at any time any Borrowing Excess exists,
then, before the close of business on the third-Business Day after the
Companies receive written notice from Administrative Agent of the amount
and nature of the Borrowing Excess, Associates (in respect of Warehouse
Borrowings) or ▇▇▇▇▇▇ (in respect of Working-Capital Borrowings) shall
take the following applicable action that eliminates that Borrowing
Excess:
(i) For a Borrowing Excess that is not capable of elimination
by delivery of additional Collateral or an increase in the total, or
any applicable, Borrowing Base, or when a Default exists, prepay to
Administrative Agent for distribution to the appropriate one or more
Lenders Principal Debt of the appropriate one or more Borrowing
Categories (together with any related Funding Loss).
(ii) For any other Borrowing Excess and only when no Default
exists, either (A) deliver to Administrative Agent, in accordance
with this agreement, additional Collateral that causes the total or
the applicable Borrowing Base, as the case may be, to increase as
may be necessary to eliminate the Borrowing Excess, (B) prepay to
Administrative Agent for distribution to the appropriate one or more
Lenders Principal Debt of the appropriate one or more Borrowing
Categories (together with any related Funding Loss), or (C) any
combination of the actions under clauses (A) or (B) above.
(c) Voluntary Prepayments. Associates or ▇▇▇▇▇▇ may voluntarily
prepay all or any of the Obligation at any time without premium or
penalty, but with any applicable Funding Loss.
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3.5 Order of Application. All payments and proceeds, whether voluntary,
involuntary, through the exercise of any Right of set-off or other Right,
realization against any Collateral, or otherwise, shall be applied in the
following order:
(a) No Default. While no Default exists, in the order and manner as
Associates or ▇▇▇▇▇▇, as the case may be, directs, except that principal
payments must always be applied in the following order and manner:
(i) Principal Debt in the order below (except as the order may
be rearranged by Administrative Agent to the extent possible to
avoid the application of any Funding Loss for LIBOR Borrowings),
payable to Lenders as provided in clause (ii) below. Principal Debt
shall be applied (A) to the Borrowing Category to the extent the
collections or proceeds are from or arose in respect of the
Collateral in its Borrowing Base and (B) then in the following
order:
o Working-Capital Borrowings
o Wet Borrowings
o Dry Borrowings
o Gestation Borrowings
(ii) Payments under clause (i) above shall be applied ratably
to each Lender in accordance with its Commitment Percentage.
(b) Default or No Direction. While a Default exists or if the
appropriate Company fails to give any direction, in the following order
and manner:
(i) All costs and expenses incurred by Administrative Agent in
connection with its duties under the Loan Documents, including,
without limitation, fees and expenses paid by Administrative Agent
to any servicing companies retained by Administrative Agent to
assist it in servicing any Collateral required to be serviced, to
any attorneys, or to any agents, that have not been reimbursed by
Lenders, together with interest at the Default Rate, payable solely
to Administrative Agent.
(ii) All costs and expenses incurred by any Lender in
connection with the Loan Documents that are reimbursable to it under
the Loan Documents and all amounts paid by that Lender to
Administrative Agent as a reimbursement to it of costs and expenses
incurred by Administrative Agent in connection with its duties under
the Loan Documents, together with interest at the Default Rate,
payable ratably to Lenders in the proportion that each Lender's
share of those costs and expenses bears to the total of those costs
and expenses for all Lenders.
(iii) Accrued and unpaid interest on the Obligation, payable
ratably to Lenders in the proportion that the amount of interest
owed to each Lender bears to the total of all interest owed to all
Lenders.
(iv) Principal Debt in the order below, payable ratably to
each Lender in accordance with its Termination Percentage, except as
the order may be rearranged by Administrative Agent to the extent
23
possible to avoid the application of any Funding Loss for LIBOR
Borrowings. Principal Debt shall be applied (A) to the Borrowing
Category to the extent the collections or proceeds are from or arose
in respect of the Collateral in its Borrowing Base and (B) then any
excess will be applied in the following order:
o Working-Capital Borrowings
o Wet Borrowings
o Dry Borrowings
o Gestation Borrowings
(v) All other portions of the Obligation, payable ratably to
Lenders in the proportion that each Lender's share of those amounts
bears to the total of those amounts for all Lenders.
(vi) Either (A) to ▇▇▇▇▇▇ or to its successors or assigns on
behalf of the Companies, to be divided between them as they may
agree, or (B) as a court of competent jurisdiction may direct.
3.6 Sharing. If any Lender obtains any amount, whether voluntary,
involuntary, or otherwise, including, without limitation, as a result of
exercising its Rights under Section 10.3, that exceeds the portion of that
amount it is otherwise entitled under the Loan Documents to receive, then that
Lender shall purchase from the other Lenders participations that result in the
purchasing Lender's sharing the excess amount ratably with each Lender in
accordance with the portion it is entitled to receive under the Loan Documents.
If all or any of that excess amount is subsequently recovered from that
purchasing Lender, then the purchase of participations in it is automatically
rescinded and the purchase price restored to that purchasing Lender to the
extent of the recovery. Any Lender purchasing a participation from another
Lender under this section may, to the extent lawful, exercise all of its Rights
of payment (including the Right of offset) with respect to that participation as
fully as if that Lender were the direct creditor of either Company in the amount
of that participation.
3.7 Interest Rates. Unless otherwise provided in this agreement, the
Principal Debt and any past-due interest owed to each Lender bears interest at
an annual interest rate equal to the lesser of either the Maximum Rate or:
(a) Competitive-Bid Borrowings. For the Principal Debt of a
Competitive-Bid Borrowing: the Competitive-Bid Rate applicable to it.
(b) LIBOR Borrowings. For the Principal Debt of a LIBOR Borrowing:
The LIBOR Rate applicable to its Interest Period.
(c) Non-LIBOR Borrowings. For the Principal Debt of all Non-LIBOR
Borrowings owed to Lenders during any Calendar Month: The
Average-Adjusted-Fed-Funds Rate for that Calendar Month.
(d) Default Rate. All past-due Principal Debt and past-due interest
on it bears interest at the Default Rate from the date due (stated or by
acceleration) until paid, whether or not payment is before or after entry
of a judgment.
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3.8 Interest Calculations.
(a) Interest is calculated on the basis of actual days (including
the first but excluding the last) elapsed over a year of 360 days (or, if
that calculation would result in interest greater than the Maximum Amount,
365 or 366 days, as the case may be).
(b) The provisions of this agreement relating to calculation of the
Average-Adjusted-Fed-Funds Rate and the LIBOR Rate are included only for
the purpose of determining the rate of interest or other amounts to be
paid under this agreement that are based upon those rates. Each Lender may
fund and maintain its funding of all or any part of each Borrowing as it
selects.
3.9 Maximum Rate. Regardless of any Loan Document provision, no Lender is
entitled to contract for, charge, take, reserve, receive, or apply, as interest
on all or any of the Obligation any amount in excess of the Maximum Rate. If a
Lender ever does so, then any excess is treated as a partial prepayment of
principal, and any remaining excess shall be refunded to Associates or ▇▇▇▇▇▇,
as the case may be. In determining if the interest paid or payable exceeds the
Maximum Rate, the Companies and Lenders shall, to the extent lawful (a) treat
all Borrowings as but a single extension of credit, (b) characterize any
nonprincipal payment as an expense, fee, or premium rather than as interest, (c)
exclude voluntary prepayments and their effects, and (d) amortize, prorate,
allocate, and spread the total amount of interest throughout the
full-contemplated term of the Obligation. However, if the Obligation is paid in
full before the end of that full-contemplated term and the interest received for
the Obligation's actual period of existence exceeds the Maximum Amount, then
Lenders shall refund any excess without being subject to any penalties provided
by any Legal Requirements. If the Legal Requirements of the State of Texas are
applicable for purposes of determining the "Maximum Rate" or the "Maximum
Amount," then those terms mean the "indicated rate ceiling" from time to time in
effect under Article 5069-1D.001, Revised Civil Statutes of Texas. Associates
and ▇▇▇▇▇▇ agree that Chapter 346, Revised Civil Statutes of Texas (which
regulates certain revolving credit loan accounts and revolving triparty
accounts) does not apply to any Borrowings.
3.10 Interest Periods. When either Company requests any LIBOR Borrowing, it
may elect the applicable interest period (each an "Interest Period"), which may
be either one, two, three, or six months at its option or such other period as
it and Administrative Agent may agree (after first obtaining Determining Lender
approval if for more than six months), subject to the following conditions: (a)
The initial Interest Period commences on the applicable Borrowing Date or
Conversion Date, and each subsequent applicable Interest Period commences on the
day when the next preceding applicable Interest Period expires; (b) if any
Interest Period begins on a day for which no numerically corresponding Business
Day in the calendar month at the end of the Interest Period exists, then the
Interest Period ends on the last Business Day of that calendar month; (c) if an
Interest Period would otherwise not end on a Business Day, it shall end on the
immediately preceding Business Day; (d) no Interest Period for any portion of
the Obligation may extend beyond the scheduled repayment date for that portion
of the Obligation; and (e) no more than five Interest Periods may be in effect
at any time.
3.11 Conversions. Associates or ▇▇▇▇▇▇, as the case may be, may (a) convert
a LIBOR Borrowing on the last day of the applicable Interest Period to another
Borrowing Type, (b) convert another Borrowing Type (subject to Section 3.16) at
any time to a LIBOR Borrowing, and (c) elect a new Interest Period for a LIBOR
Borrowing, by giving a Conversion Request to Administrative Agent and each
Lender no later than 9:30 a.m. on the day (the "Conversion Date") that is the
third Business Day before the last day of the applicable Interest Period.
However, a Borrowing may not be converted to or continued as a LIBOR
25
Borrowing if a Default exists, and, absent the applicable Company's timely
Conversion Request, a LIBOR Borrowing is deemed converted to a Fed-Funds
Borrowing effective when the applicable Interest Period expires.
3.12 Booking Borrowings. To the extent lawful, any Lender may make, carry,
or transfer the Principal Debt owed to it at, to, or for the account of any of
its branch offices or the office of any of its Affiliates. However, no Affiliate
of any Lender is entitled to receive any greater payment under Section 3.14 than
the transferor Lender would have been entitled to receive with respect to that
Principal Debt, and no Lender is entitled to receive any greater payment under
Section 3.14 on account of a transfer of that Principal Debt to or for the
account of a branch office, other than the one specified on Schedule 2.1, than
it would have been entitled to receive with respect to that Principal Debt if
that transfer had not been made. Each Lender shall use its reasonable efforts
(consistent with its internal policies and applicable Legal Requirement) to
make, carry, maintain, or transfer its part of any Principal Debt with its
Affiliates or branch offices in an effort to eliminate or reduce to the extent
possible the total amounts due to it under Sections 3.14 and 3.15 if, in its
reasonable judgment, those efforts will not be disadvantageous to it.
3.13 Basis Unavailable or Inadequate for LIBOR Rate. If, on or before any
date when a LIBOR Rate is to be determined for a Borrowing, Administrative Agent
or any Lender (upon notice to Administrative Agent) determines that the basis
for determining the applicable rate is not available or that the resulting rate
does not accurately reflect the cost to Lenders of making or converting
Borrowings at that rate for the applicable Interest Period, then Administrative
Agent shall promptly notify the Companies of that determination (which is
conclusive and binding on the Companies, absent manifest error) and that
Borrowing shall be a Fed-Funds Borrowing. Until Administrative Agent notifies
the Companies that it or the notifying Lender (upon notice to Administrative
Agent) has determined that those circumstances no longer exist, which it shall
promptly do, Lenders' commitments under this agreement to make or convert to
LIBOR Borrowings are suspended.
3.14 Additional Costs. This section survives the full satisfaction of the
Obligation and termination of the Loan Documents, and release of Lender Liens.
(a) For any LIBOR Borrowing, if (i) (A) any change after the date of
this agreement in any present Legal Requirement, and for purposes of this
Section 3.14, Legal Requirement includes interpretations and guidelines of
any Tribunal whether or not having the force of Legal Requirement, or any
future Legal Requirement imposes, modifies, or deems applicable (or if
compliance by any Lender with any requirement of any Tribunal results in)
any requirement that any reserves (including, without limitation, any
marginal, emergency, supplemental, or special reserves) be maintained, (B)
those reserves reduce any sums receivable by that Lender under this
agreement or increase the costs incurred by that Lender in advancing or
maintaining any portion of any LIBOR Borrowing, and (C) that Lender
determines that the reduction or increase is material (and it may, in
determining the material nature of the reduction or increase, utilize
reasonable assumptions and allocations of costs and expenses and use any
reasonable averaging or attribution method), then (ii) that Lender
(through Administrative Agent) shall deliver to the Companies a
certificate stating in reasonable detail the calculation of the amount
necessary to compensate it for its reduction or increase (which
certificate is conclusive and binding absent manifest error), and
Associates or ▇▇▇▇▇▇, as the case may be, shall pay that amount to that
Lender within ten days after demand.
26
(b) For any Borrowing, if (i) (A) any change after the date of this
agreement in any present Legal Requirement or any future Legal Requirement
regarding capital adequacy or compliance by any Lender with any request,
directive, or requirement now or in the future imposed by any Tribunal
regarding capital adequacy or any change in the risk category of this
transaction reduces the rate of return on its capital as a consequence of
its obligations under this agreement to a level below that which it
otherwise could have achieved (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by it to be material (and
it may, in determining the amount, utilize reasonable assumptions and
allocations of costs and expenses and use any reasonable averaging or
attribution method), then (ii) that Lender (through Administrative Agent)
shall notify the Companies and deliver to the Companies a certificate
stating in reasonable detail the calculation of the amount necessary to
compensate it (which certificate is presumed correct), and Associates or
▇▇▇▇▇▇, as the case may be, shall pay that amount to Lender within ten
days after demand.
(c) Any Taxes payable by Administrative Agent or any Lender or ruled
(by a Tribunal) payable by Administrative Agent or any Lender in respect
of any Loan Document shall, if permitted by Legal Requirement and if
deemed material by Administrative Agent or that Lender (who may, in
determining the material nature of the amount payable, utilize reasonable
assumptions and allocations of costs and expenses and use any reasonable
averaging or attribution method), be paid by ▇▇▇▇▇▇, together with
interest and penalties, if any (except for Taxes payable on the overall
net income of Administrative Agent or that Lender and except for interest
and penalties incurred as a result of the gross negligence or willful
misconduct of Administrative Agent or any Lender). Administrative Agent or
that Lender (through Administrative Agent) shall notify ▇▇▇▇▇▇ and deliver
to ▇▇▇▇▇▇ a certificate stating in reasonable detail the calculation of
the amount of payable Taxes, which certificate is conclusive and binding
(absent manifest error), and ▇▇▇▇▇▇ shall pay that amount to
Administrative Agent for the account of Administrative Agent or that
Lender, as the case may be, within ten days after demand. If
Administrative Agent or that Lender subsequently receives a refund of the
Taxes paid to it by ▇▇▇▇▇▇, then the recipient shall promptly pay the
refund to ▇▇▇▇▇▇.
3.15 Change in Legal Requirements. If any change, after the date of this
agreement, in any present Legal Requirement or any future Legal Requirement
makes it unlawful for any Lender to make or maintain LIBOR Borrowings, then that
Lender shall promptly notify Administrative Agent, who shall promptly notify the
Companies and (a) as to undisbursed funds, any requested Borrowing shall be made
as a Fed-Funds Borrowing, (b) as to any outstanding Borrowing (i) if maintaining
the Borrowing until the last day of the applicable Interest Period is unlawful,
the Borrowing shall be converted to a Fed-Funds Borrowing as of the date of
notice, but neither Company is obligated to pay any related Funding Loss, or
(ii) if not prohibited by Legal Requirement, the Borrowing shall be converted to
an Fed-Funds Borrowing as of the last day of the applicable Interest Period, or
(iii) if any conversion will not resolve the unlawfulness, Associates or ▇▇▇▇▇▇,
as the case may be, shall promptly prepay the Borrowing, without penalty, and
without payment of any related Funding Loss. No Conversion Request is required
to be delivered in connection with any conversion under this Section 3.15.
3.16 Funding Loss. Subject to Section 3.15, THE COMPANIES JOINTLY AND
SEVERALLY AGREE (IN RESPECT OF WAREHOUSE BORROWINGS) AND ▇▇▇▇▇▇ AGREES (IN
RESPECT OF OTHER BORROWINGS) TO INDEMNIFY EACH LENDER AGAINST, AND PAY TO IT
UPON DEMAND, ANY FUNDING LOSS OF THAT LENDER. When any Lender demands that a
Company pay any Funding Loss, that Lender shall deliver to Administrative Agent
who shall promptly deliver to the Companies a certificate stating in reasonable
detail the basis for imposing Funding Loss and the calculation of the amount,
which calculation
27
shall be presumed correct. This Section 3.16 survives the satisfaction and
payment of the Obligation and termination of the Loan Documents.
3.17 Foreign Lenders, Participants, and Purchasers. Each Lender,
Participant (by accepting a participation interest under this agreement), and
Purchaser (by executing an Assignment) that is not organized under the Legal
Requirements of the United States of America or one of its states (a) represents
to Administrative Agent and the Companies that (i) no Taxes are required to be
withheld by Administrative Agent or either Company with respect to any payments
to be made to it in respect of the Obligation and (ii) it has furnished to
Administrative Agent and the Companies two duly completed copies of either U.S.
Internal Revenue Service Form 4224, Form 1001, Form W-8, or any other form
acceptable to Administrative Agent that entitles it to exemption from U.S.
federal withholding Tax on all interest payments under the Loan Documents, and
(b) covenants to (i) provide Administrative Agent and the Companies a new Form
4224, Form 1001, Form W-8, or other form acceptable to Administrative Agent upon
the expiration or obsolescence of any previously delivered form according to
Legal Requirement, duly executed and completed by it, and (ii) comply from time
to time with all Legal Requirements with regard to the withholding Tax
exemption. If any of the foregoing is not true or the applicable forms are not
provided, then the Companies and Administrative Agent (without duplication) may
deduct and withhold from interest payments under the Loan Documents United
States federal income Tax at the full rate applicable under the Code.
3.18 Fees. The following are not compensation for the use, detention, or
forbearance of money, are in addition to and not in lieu of interest and
expenses otherwise described in the Loan Documents, are non-refundable, to the
extent lawful, bear interest if not paid when due at the Default Rate, and are
calculated on the basis of actual days (including the first but excluding the
last) elapsed over a year of 360 days (or 365 or 366 days, as the case may be,
if the calculation would otherwise result in exceeding the Maximum Amount and
the payment were deemed to be interest notwithstanding the above provisions to
the contrary):
(a) Administrative Agent's Fees. The Companies shall pay to
Administrative Agent, for its sole account, an arrangement fee, an annual
administrative fee, and custodial fee in an amount and on such payment
terms as may be agreed upon by the Companies and Administrative Agent in
writing.
(b) Commitment Fees. ▇▇▇▇▇▇ shall pay to Administrative Agent a
commitment fee for Lenders payable in arrears on the first day of the
Calendar Quarter for the preceding Calendar Quarter and on the Termination
Date. Each payment of the commitment fee is a percentage per annum,
calculated for the period in which it accrued as the product of 0.150%
multiplied by the total Commitment.
SECTION 4 SECURITY
4.1 Guaranty.
(a) Guaranty. To induce Administrative Agent and Lenders to enter
into this agreement and extend credit to Associates and for other good and
valuable consideration, including, without limitation, the facts stated in
the recitals to this agreement, but not as a condition to Lenders'
agreements to extend credit to ▇▇▇▇▇▇ under this agreement, ▇▇▇▇▇▇
unconditionally and irrevocably guarantees to Administrative Agent and
28
each Lender (i) the prompt payment of the Obligation related in any way to
Warehouse Borrowings (the "Warehouse Obligation") at maturity, by
acceleration or otherwise, and at all times after maturity in accordance
with the Loan Documents and (ii) the prompt performance of and compliance
with every term, covenant, and condition of the Loan Documents when due.
▇▇▇▇▇▇ acknowledges and agrees that this agreement expressly refers to
each of the Loan Documents, including, without limitation, the Notes.
(b) Nature of Liability. "This guaranty" refers to this Section 4.1,
which is an absolute, irrevocable, and continuing guaranty, and ▇▇▇▇▇▇'▇
liability for any future Warehouse Obligation is not released or reduced
by the payment and performance of the Warehouse Obligation in full from
time to time and constitutes a renewal and extension of ▇▇▇▇▇▇'▇ guaranty
under Section 4.1 of the Existing-Loan Agreement.
(c) Payment and Performance by ▇▇▇▇▇▇. If Associates fails to pay or
perform any Warehouse Obligation when due, ▇▇▇▇▇▇ shall pay or perform
that Warehouse Obligation on demand and without notice of acceptance of
this guaranty, creation of any Warehouse Obligation, any Default, or
Potential Default, presentment and demand for payment, protest,
nonpayment, dishonor, notice of the intent to accelerate, and notice of
acceleration, all of which ▇▇▇▇▇▇ waives.
(d) No Requirement to Pursue Other Rights. In order to enforce
payment and performance by ▇▇▇▇▇▇, it is not necessary for Administrative
Agent or any Lender first or concurrently to institute suit or exhaust
Rights against Associates or any other Person or enforce Rights against
any present or future Collateral or other security.
(e) Effect of Certain Default. If a Default occurs under Section
10.1(d) in respect of ▇▇▇▇▇▇, then the Obligation is, as between ▇▇▇▇▇▇,
Lenders, and Administrative Agent, a fully matured, due, and payable
obligation of ▇▇▇▇▇▇ to Administrative Agent and Lenders, without regard
to whether a Default or Potential Default then exists or whether any of
the Warehouse Obligation is then due and payable to Administrative Agent
or any Lender, payable in full by ▇▇▇▇▇▇ to Administrative Agent and
Lenders.
(f) Other Debts. If ▇▇▇▇▇▇ becomes liable, by endorsement or
otherwise, for any debt of Associates to Administrative Agent or any
Lender that is not part of the Warehouse Obligation, then that liability
is not in any manner impaired or affected by this guaranty.
(g) Subordinated Debt. All Subordinated Debt is expressly
subordinated to the full payment and performance of the Warehouse
Obligation. ▇▇▇▇▇▇ may not receive or accept any payment from Associates
for any Subordinated Debt at any time when any Warehouse Obligation is
outstanding. If ▇▇▇▇▇▇ receives any payment of any Subordinated Debt in
violation of this section, ▇▇▇▇▇▇ shall hold that payment in trust for
Administrative Agent on behalf of Lenders and immediately turn it over to
Administrative Agent, in the form received but with any necessary
endorsements, to be applied to the Warehouse Obligation.
(h) Independent Analysis. ▇▇▇▇▇▇ may not rely upon Administrative
Agent or any Lender about, and each expressly assumes all responsibilities
to remain informed about, Associates' financial condition and any
circumstances affecting Associates' ability to pay or perform the
Warehouse Obligation.
29
(i) Waiver of Certain Rights Against Others. ▇▇▇▇▇▇ may not assert,
enforce, or otherwise exercise, and ▇▇▇▇▇▇ irrevocably waives, until
payment in full of the Obligation (a) any Right of subrogation to any of
Administrative Agent's or any Lender's present or future Rights or
Collateral with respect to any Warehouse Obligation, (b) any Right of
recourse, reimbursement, contribution, indemnification, or similar Right
against any Person with respect to the payment or performance of any
Warehouse Obligation, and (c) any Right to participate in any security or
assurances for any Warehouse Obligation.
(j) Waiver of Certain Procedural Rights. ▇▇▇▇▇▇ waives all Rights by
which it might be entitled to require suit on an accrued Right of action
in respect of any Warehouse Obligation or require suit against Associates
or any other Person, whether arising under (i) ss. 34.02 of the Texas
Business and Commerce Code, which is about certain Rights to require suit
on accrued Rights of action following written notice, (ii) ss. 17.001 of
the Texas Civil Practice and Remedies Code, which allows suit against
certain guarantors without suit against certain principal obligors but
precludes entry of judgment against certain guarantors before entry of
judgment against certain principal obligors, (iii) Rule 31 of the Texas
Rules of Civil Procedure, which requires joinder of certain principal
obligors in suits against certain guarantors unless judgment has been
entered against those principal obligors, or (iv) otherwise.
(k) Non-impairment. The occurrence or existence of any one or more
of the following, with or without notice to or consent by ▇▇▇▇▇▇, does not
release or reduce ▇▇▇▇▇▇'▇ liability under this guaranty: (i)
Administrative Agent or any Lender taking or accepting any other security
or assurance for any Warehouse Obligation; (ii) any release, surrender,
exchange, subordination, impairment, or loss of any security or assurance
for any Warehouse Obligation; (iii) any partial or full release of any
other Person's liability for any Warehouse Obligation; (iv) the
insolvency, bankruptcy, or lack of corporate, partnership, trust, or other
power or authority of any Person; (v) any renewal, extension, or
rearrangement of the payment or performance of, or any assignment of, any
Warehouse Obligation; (vi) any new agreement with, or adjustment,
indulgence, forbearance, compromise, or release ever granted to any other
Person; (vii) any neglect, delay, omission, failure, or refusal by
Administrative Agent or any Lender to take or prosecute any action for the
collection of any Warehouse Obligation or to foreclose, take, or prosecute
any action under any document evidencing or securing any Warehouse
Obligation; (viii) the unenforceability of any Warehouse Obligation
against any Person because it exceeds the amount permitted by Legal
Requirement, the act of creating it is ultra ▇▇▇▇▇, or any individual
creating it exceeded his authority or violated his fiduciary duties in
connection with it; (ix) Administrative Agent or any Lender becomes
required to refund any payment or make payment to any other Person because
any payment to Administrative Agent or that Lender by any Person for any
Warehouse Obligation is held to constitute a preference under any Debtor
Law or otherwise; or (x) any existing or future offset, claim, or defense
(except for the defense of full payment and performance of the Warehouse
Obligation after the running of any preference period after that payment
and performance) of any other Person against Administrative Agent or any
Lender or against payment or performance of any Warehouse Obligation,
whether that offset, claim, or defense arises in connection with the
Warehouse Obligation or otherwise, and such claims and defenses include,
without limitation, failure of consideration, breach of warranty, fraud,
statute of frauds, bankruptcy, infancy, statute of limitations, lender
liability, accord and satisfaction, and usury.
30
4.2 Collateral.
(a) From Associates. To secure the full payment and performance of
the Warehouse Obligation, Associates assigns, conveys, and grants to, and
creates in favor of, Administrative Agent a Lender Lien in the items set
forth in Part B.1. of Schedule 4.3.
(b) From ▇▇▇▇▇▇. To secure the full payment and performance of the
full Obligation and the guaranty in Section 4.1, ▇▇▇▇▇▇ assigns, conveys,
and grants to, and creates in favor of, Administrative Agent Lender Liens
in all of the items and types of property listed in Part B.2. of Schedule
4.3, collectively, together with the collateral described in clause (a)
above and any other present and future security for any of the Obligation,
the "Collateral", without transferring to Administrative Agent or any
Lender any of ▇▇▇▇▇▇'▇ obligations in respect of those items.
(c) Renewal of Lender Liens. The Lender Liens under this Section 4.2
are renewals and extensions of the Lender Liens arising under the
Original-Loan Agreement, which liens were renewed and extended under the
Existing-Loan Agreement, including, without limitation, those evidenced or
perfected by the following financing statements, each executed by the
appropriate Company (including ▇▇▇▇▇▇'▇ three trade-names) as debtor and
Administrative Agent as secured party, and filed with the following
jurisdictions, and otherwise described as follows:
------------------- ------------ ------------- -------
Name Jurisdiction Number Date
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
Associates Sec. of 9408671 06/28/94
State, DE
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
Sec. of 41788224; 06/27/94
State, MD Liber 3617,
Folio 1928
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
▇▇▇▇▇▇ 015451; 06/23/94
Co., MD Liber 0146,
Folio 530
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
Sec. of 120435 06/20/94
State, TX
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
▇▇▇▇▇▇ Sec. of 4174887 and 06/23/94
State, MD 41748193;
Liber 3617,
Folio 1545
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
▇▇▇▇▇▇ 015482; 06/30/94
Co., MD Liber 0146,
Folio 673
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
▇▇▇. ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇/▇▇/▇▇
▇▇▇▇▇, ▇▇
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
Sec. of 115336 06/14/94
State, TX
------------------- ------------ ------------- -------
Therefore, the Companies (i) ratify and confirm that all of those Lender Liens
are not released, reduced, or otherwise adversely affected by this agreement and
continue to secure full payment and performance of the present and future
Obligation, and (ii) agree to perform such acts and duly authorize, execute,
acknowledge, deliver, file, and record such additional documents, and
certificates as Administrative Agent may request in
31
order to create, perfect, preserve, and protect those Lender Liens. The
following Liens created in favor of Administrative Agent pursuant to the
Original-Loan Agreement and renewed and extended under the Existing-Credit
Agreement will automatically terminate upon the passage of five years following
their original date of filing, and Administrative Agent hereby agrees that, as
of that date, it will no longer claim a security interest under the original
financing statement and completely release and discharge all the collateral
described in it from any and all security interests and Liens granted or
assigned to the Administrative Agent:
------------------- ------------ ------------- -------
Name Jurisdiction Number Date
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
▇▇▇▇▇▇ Funding Sec. of 141747383; 06/23/94
Group State, MD Liber 3617,
Folio 1549
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
▇▇▇▇▇▇ 015483; 06/30/94
Co., MD Liber 0146,
Folio 677
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
▇▇▇. ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇/▇▇/▇▇
▇▇▇▇▇, ▇▇
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
Sec. of 115337 06/14/94
State, TX
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
Rylco Funding Sec. of 14747384; 06/23/94
Group State, MD Liber 3617,
Folio 1553
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
▇▇▇▇▇▇ 015484; 06/30/94
Co., MD Liber 0146,
Folio 681
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
▇▇▇. ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇/▇▇/▇▇
▇▇▇▇▇, ▇▇
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
Sec. of 115338 06/14/94
State, TX
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
RMC Mortgage Corp. Sec. of 141747385; 06/23/94
State, MD Liber 3617,
Folio 1557
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
▇▇▇▇▇▇ 015485; 06/30/94
Co., MD Liber 0146,
Folio 685
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
▇▇▇. ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇/▇▇/▇▇
▇▇▇▇▇, ▇▇
------------------- ------------ ------------- -------
------------------- ------------ ------------- -------
Sec. of 115339 06/14/94
State, TX
------------------- ------------ ------------- -------
4.3 Eligible Collateral. If at any time any item of Collateral ceases to
meet the applicable requirements of eligibility on Schedule 4.3, then (a) that
item is automatically excluded from all calculations of the applicable Borrowing
Base, and (b) Administrative Agent shall so notify the Companies and Lenders.
4.4 Borrowing-Base Reports. By 11:00 a.m. on the date of any Borrowing, any
payment of Principal Debt, or removal of any Collateral, Administrative Agent
(for Borrowing-Base Reports for Mortgage Collateral) shall deliver to the
Companies and Lenders, or ▇▇▇▇▇▇ (for other Borrowing-Base Reports) shall
deliver to Administrative Agent for Administrative Agent to deliver to each
Lender, the
32
applicable Borrowing-Base Report depending upon the Borrowing Category of the
Borrowing or payment or Borrowing Base in which that Collateral is included.
4.5 Collateral Procedures
(a) Collateral Delivery. ▇▇▇▇▇▇ must deliver the Collateral
Documents and otherwise comply with all the required procedures in
Schedule 4.5 for Collateral offered in connection with this agreement by
no later than 10:30 a.m. on (i) the Borrowing Date for Collateral
supporting any Borrowing other than a Wet Borrowing and (ii) seventh
Business Day after the Borrowing Date of any Wet Borrowing for Collateral
supporting that Borrowing.
(b) ▇▇▇▇▇▇ as Bailee. ▇▇▇▇▇▇ shall (i) hold in trust for
Administrative Agent (A) the original recorded copy of the mortgage, deed
of trust, or trust deed securing each Mortgage Loan, (B) a mortgagee
policy of title insurance (or binding unexpired and unconditional
commitment to issue such insurance if the policy has not yet been
delivered to ▇▇▇▇▇▇) insuring ▇▇▇▇▇▇'▇ perfected, first priority Lien
created by that mortgage, deed of trust, or trust deed, (C) the original
insurance policies referred to in Section 7.8, and (D) all other original
documents, including any undelivered Take-Out Commitments, (ii)
specifically identify such items in the appropriate Collateral-Delivery
Notice, (iii) deliver to Administrative Agent any of the foregoing items
as soon as reasonably practicable upon Administrative Agent's request, and
(iv) for purposes of clause (a) above, be an approved bailee for
Administrative Agent to the extent that ▇▇▇▇▇▇ holds Collateral that
constitutes an Eligible Mortgage Loan subject to the conditions of Part
C.9(a) on Schedule 4.3.
(c) Gestation Collateral. By 10:30 a.m. on the day that Associates
is converting any Dry Borrowing to a Gestation Borrowing, Associates shall
execute and deliver to Administrative Agent a Collateral-Conversion
Notice.
4.6 Administrative Agent for Appraisals. Administrative Agent and Lenders
appoint the Companies as their special agents for the sole and limited purpose
of obtaining and maintaining Appraisals for Mortgage Loans as required by the
Loan Documents.
4.7 Power of Attorney. Each Company irrevocably appoints Administrative
Agent, acting on behalf of Lenders, as that Company's attorney-in-fact (with
full power of substitution) for, on behalf, and in the name of that Company to
(a) endorse and deliver to any Person any check, instrument, or other document
received by Administrative Agent or any Lender that represents payment in
respect of any Collateral, (b) prepare, complete, execute, deliver, and record
any assignment of any mortgage, deed of trust, or trust deed securing any
Mortgage Loan or Mortgage Security, (c) endorse and deliver or otherwise
transfer any promissory note evidencing any Mortgage Loan or Mortgage Security
and do every other thing necessary or desirable to effect transfer of all or any
Collateral, (d) take all necessary and appropriate action with respect to any
Obligation or any Collateral, (e) commence, prosecute, settle, discontinue,
defend, or otherwise dispose of any claim relating to any Collateral, and (f)
sign that Company's name wherever appropriate to effect the performance of this
agreement. This section shall be liberally, not restrictively, construed so to
give the greatest latitude to Administrative Agent's power as the Companies'
attorney-in-fact to collect, sell, and deliver any Collateral and all other
documents relating to it. The powers and authorities conferred on Administrative
Agent in this section (w) are discretionary and not obligatory on the part of
Administrative Agent, (x) may be exercised by Administrative Agent through any
Person who, at the time of the execution of a particular document, is an officer
of Administrative Agent, (y) may not be exercised
33
by Administrative Agent unless a Default exists, and (z) is granted for a
valuable consideration, coupled with an interest, and irrevocable until, and all
Persons dealing with Administrative Agent, any of its officers acting under this
section, or any substitute is fully protected in treating the powers and
authorities conferred by this section as existing and continuing in full force
and effect until advised by Administrative Agent that, all commitments by
Lenders to extend credit under this agreement have been terminated or canceled
and the Obligation is fully paid and performed.
4.8 Redemption of Mortgage Collateral.
(a) Generally. So long as no Default or Potential Default exists,
either Company may, at any time and from time to time, obtain the release
of Lender Liens in any or all Mortgage Collateral by paying to
Administrative Agent, for application to the Obligation in accordance with
this agreement, the Principal Debt directly supported by the Borrowing
Base for the Eligible Mortgage Collateral, determined as of the date that
such Eligible Mortgage Collateral was first delivered to Administrative
Agent, to be released.
(b) Redemption for Sale. Either Company may, at any time and from
time to time, request that Administrative Agent permit the sale of
Mortgage Loans. Upon the receipt by Administrative Agent of that request,
if no Default or Potential Default exists, and subject to the provisions
of clause (e) below, Administrative Agent shall deliver to the investor,
under Administrative Agent's bailee letter, in substantially the form of
Exhibit D-1 or D-2, as applicable, the Collateral Documents for the
Mortgage Loans being sold and that are held by Administrative Agent.
Release of the Lender Liens in that Collateral is conditioned upon
delivery to Administrative Agent, within 45 days after delivery by
Administrative Agent of those Collateral Documents, by that investor of
either:
(i) An amount equal to the Borrowing Base of the Eligible
Mortgage Loans so sold to be applied to the Obligation in accordance
with this agreement; or
(ii) In the case of Mortgage Loans being sold or exchanged for
Mortgage Securities, Eligible Mortgage Securities, the Principal
Debt directly supported by the Borrowing Base for which equals the
Borrowing Base for the Eligible Mortgage Loans so sold, which new
Eligible Mortgage Securities are Collateral under
this agreement for all purposes.
For purposes of this clause (b), the value of the Principal Debt directly
supported by the Borrowing Base for any Collateral is determined as of the
date that Collateral is first delivered to Administrative Agent under this
agreement. The delivery of Mortgage Securities and all payments made in
relation to them by investors shall be made directly to Administrative
Agent, and the Companies shall, as agent for Administrative Agent and only
upon the express prior written request of Administrative Agent, deliver to
that investor the items held by either Company under Section 4.5(b). Items
of Mortgage Collateral delivered by Administrative Agent to any investor
under this section automatically cease to be Eligible Collateral upon the
earlier to occur of either (A) the delivery to Administrative Agent by
that investor of either the payment or the Mortgage Securities under
clause (i) or (ii) above or (B) 45 days after delivery by Administrative
Agent of those Collateral Documents in respect of Eligible Mortgage Loans,
or 60 days after delivery by Administrative Agent of those Collateral
Documents in respect of Eligible Mortgage Securities. No more than
34
$25,000,000 of Mortgage Collateral (i.e., face amount of the promissory
notes evidencing Mortgage Loans or Mortgage Securities) may be delivered
to an investor (other than FHLMC, FNMA, GNMA, or any other investor
approved by Administrative Agent for that purpose) for which either
payment or delivery of Eligible Mortgage Securities under clause (i) or
(ii) has not been completed.
(c) Continuation of Lender Lien and Application of Proceeds. The
Lender Liens in all Mortgage Collateral transmitted to any investor under
clause (b) above continue in effect until Administrative Agent receives
the payment or Mortgage Securities as provided in clauses (b)(i) or
(b)(ii) above.
(d) Certain Credits. No Lender is obligated at any time to credit
Associates for any amounts due from any investor for the purchase of any
Mortgage Collateral contemplated under this agreement until Administrative
Agent has actually received immediately available funds for that Mortgage
Collateral in the amount required under this agreement, and neither
Administrative Agent nor any Lender is obligated at any time to collect
any amounts or otherwise enforce any obligations due from any investor in
respect of any such purchase.
4.9 Correction of Notes.
(a) Delivery of Notes. Either Company may, from time to time and at
any time, request that Administrative Agent deliver a promissory note
related to any Mortgage Collateral so that the note may be replaced by a
corrected note. Upon receipt by Administrative Agent of that request, if
no Default or Potential Default exists, and subject to clause (b) below,
Administrative Agent shall deliver to that Company, under Administrative
Agent's Trust Receipt and Agreement in substantially the form of Exhibit
D-3, the note to be corrected, upon the express condition of receipt by
Administrative Agent of a corrected note that conforms to the requirements
of this agreement.
(b) Limitations. Notwithstanding clause (a) above (i) no more than
$2,000,000 of notes (that amount being the aggregate outstanding principal
balances of the notes) may ever be so delivered and not have been replaced
with corrected notes under this agreement, (ii) the corrected note must be
delivered to Administrative Agent endorsed in blank (without restriction
or limitation) within 21 days of the release by Administrative Agent of
the note to be corrected, and (iii) until the corrected note has been
delivered to Administrative Agent, the Borrowing Base for the related
Eligible Mortgage Loan is the lesser of either (A) the Borrowing Base for
the Eligible Mortgage Loan, the note for which is to be corrected, without
giving effect to this clause (b) or (B) 98% of the principal balance of
the corrected note.
4.10 Release of Servicing Rights. In connection with any sale of Servicing
Rights, to the extent included as Collateral pursuant to Section 4.2(b) or
otherwise permitted by the Loan Documents, the Companies shall execute and
deliver to Administrative Agent a Request for Release and the appropriate
Financing Statement Changes in substantially the form of Exhibit D-4 for
execution and delivery by Administrative Agent, which Administrative Agent shall
execute and return to the Companies within seven days.
35
SECTION 5 CONDITIONS PRECEDENT.
5.1 Initial Borrowing. No Lender is obligated to fund its part of any
Borrowing unless Administrative Agent has received all of the documents and
items described on, except as specifically otherwise noted on, Schedule 5.1.
5.2 Each Borrowing. In addition, no Lender is obligated to fund (as opposed
to continue or correct) its part of any Borrowing unless on the applicable
Borrowing Date or issue date (and after giving effect to the requested
Borrowing), as the case may be: (a) Administrative Agent has timely received a
Credit Request or the applicable Lender has received the applicable
Competitive-Bid Request, as the case may be; (b) the applicable Lender in the
case of a Competitive-Bid Borrowing has received Competitive-Bid Note in an
amount agreed to by it and Associates; (c) all of the representations and
warranties of the Companies in the Loan Documents are true and correct in all
material respects (unless they speak to a specific date or are based on facts
which have changed by transactions contemplated or permitted by this agreement);
(d) no Default or Potential Default exists; (e) the funding of the Borrowing is
permitted by Legal Requirement and does not cause a Borrowing Excess; and (f) if
reasonably requested by Administrative Agent, it has received evidence
substantiating any of the matters in the Loan Documents that are necessary to
enable Associates or ▇▇▇▇▇▇, as the case may be, to qualify for the Borrowing.
5.3 General. Each condition precedent in this agreement (including, without
limitation, those on the attached Schedule 5.1) is material to the transactions
contemplated by this agreement, and time is of the essence with respect to each
condition precedent. Subject to first obtaining the approval of Lenders (unless
a Competitive-Bid Borrowing), Lenders may fund any Borrowing without all
conditions being satisfied. However, to the extent lawful, that funding or
issuance is not a waiver of the requirement that each condition precedent be
satisfied as a prerequisite for any subsequent funding or issuance, unless
Lenders specifically waive an item in writing.
SECTION 6 REPRESENTATIONS AND WARRANTIES The Companies jointly and
severally represent and warrant to Administrative Agent and Lenders as follows:
6.1 Purpose of Credit. Borrowings are to be used as stated in the recitals
of this agreement. No Company is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any "margin stock" within the meaning of Regulation U. No part of the
proceeds of any Borrowing is to be knowingly used, directly or indirectly, for a
purpose that violates any Legal Requirement, including Regulation U.
6.2 Corporate Existence, Good Standing, Authority and Compliance. Each
Company is duly organized, validly existing, and in good standing under the
Legal Requirements of the jurisdiction in which it is incorporated as stated in
the preamble of this agreement. Except where failure is not a Material-Adverse
Event, each Company (a) is duly qualified to transact business and is in good
standing as a foreign corporation or other entity in each jurisdiction where the
nature and extent of its business and properties require due qualification and
good standing, (b) possesses all requisite authority, permits, and power to
conduct its business as is now being, or is contemplated by this agreement to
be, conducted, and (c) is in compliance with all applicable Legal Requirements.
36
6.3 Subsidiaries. As of the date of this agreement (a) Associates has no
Subsidiaries, and (b) ▇▇▇▇▇▇'▇ only Subsidiaries are listed on Schedule 6.3.
6.4 Authorization and Contravention. The execution and delivery by each
Company of each Loan Document or related document to which it is a party and the
performance by it of its obligations under that Loan Document (a) are within its
corporate power and authority, (b) have been duly authorized by all necessary
corporate action, (c) require no action by or filing with any Tribunal other
than any action or filing that has been taken or made on or before the date of
this agreement, (d) do not violate any provision of its charter or bylaws, (e)
do not violate any provision of Legal Requirement or order of any Tribunal
applicable to it other than violations that individually or collectively are not
a Material-Adverse Event, (f) do not violate any Material Agreements to which it
is a party, and (g) do not result in the creation or imposition of any Lien on
any asset of either Company other than Lender Liens.
6.5 Binding Effect. Upon execution and delivery by all parties to it, each
Loan Document constitutes a legal and binding obligation of each Company party
to it, enforceable against it in accordance with its terms except as
enforceability may be limited by applicable Debtor Laws and general principles
of equity.
6.6 Fiscal Year and Financial Information. The fiscal year of each Company
ends on December 31. Each Company has delivered to Administrative Agent and
Lenders copies of its balance sheet as of December 31, 1998, and the related
statements of income and cash flows for the period ended on that date. Those
Financials are complete and correct in all material respects, fairly present
each Company's financial condition as of, and its results of operations for the
period ended on, that date, and were prepared in accordance with GAAP. As of the
date of those Financials, there were no indebtedness, obligations, or
liabilities, including, without limitation, any material contingent or indirect
liabilities and obligations or unusual forward or long-term commitments, of
either Company that are not reflected in those Financials, which are required to
be so reflected based upon GAAP. No change that is a Material-Adverse Event has
occurred since the date of those Financials. Each Company has also delivered to
Lenders a management report for the month ended March 31, 1999, which fairly and
accurately in all material respects presents that Company's commitment position,
pipeline position, mortgage servicing and production, balance sheet, and income
statement as of the end of that month.
6.7 Litigation. There is no Litigation that is reasonably likely to be
determined adversely to either Company or, if so adversely determined, is a
Material-Adverse Event and that is pending or, as of the date of this agreement,
threatened against either Company or its assets. As of the date of this
agreement, no outstanding and unpaid judgments against either Company exist that
is a Material-Adverse Event.
6.8 Taxes. All Tax returns of each Company required to be filed have been
filed (or extensions have been granted) before delinquency, except for returns
for which the failure to file is not a Material-Adverse Event, and all Taxes
imposed upon each Company that are due and payable have been paid before
delinquency other than Taxes for which the criteria for Permitted Liens have
been satisfied or for which nonpayment is not a Material-Adverse Event.
6.9 Environmental Matters. Except to the extent not a Material-Adverse
Event, neither Company (a) knows of any environmental condition or circumstance
adversely affecting either Company's properties or operations or any material
portion of the properties subject to Mortgage Loans, (b) has received
37
any report of either Company's violation of any Environmental Law, or (c) knows
that either Company is under any obligation to remedy any violation of any
Environmental Law.
6.10 Employee Plans. As of the date of this agreement and except where
occurrence or existence is not a Material Adverse Event (a) no Employee Plan has
incurred an "accumulated funding deficiency," as defined in ss. 302 of ERISA or
ss. 412 of the Code, (b) neither Company has incurred liability under ERISA to
the PBGC in connection with any Employee Plan, (c) no ERISA Affiliate has fully
or partially withdrawn from participation in a Multiemployer Plan, (d) no
"prohibited transaction," as defined in ss. 406 of ERISA or ss. 4975 of the
Code, has occurred in respect of any Employee Plan, and (e) no "reportable
event," as defined in ss. 4043 of ERISA, has occurred in respect of any Employee
Plan, other than events for which the notice requirement is waived under
applicable PBGC regulations.
6.11 Government Regulations. Neither Company is subject to regulation under
the Investment Company Act of 1940.
6.12 Transactions with Affiliates. Neither Company is a party to a material
transaction with any of its Affiliates (excluding the other Company) other than
transactions in the ordinary course of business and upon fair and reasonable
terms not materially less favorable than it could obtain or could become
entitled to in an arm's-length transaction with a Person that was not its
Affiliate.
6.13 Debt. Neither Company is an obligor on any Debt other than Permitted
Debt.
6.14 No Liens. Each Company has good and indefeasible title to the
Collateral in which it has created Lender Liens under this agreement, and all
Collateral is free and clear of all Liens and other adverse claims of any nature
other than the Permitted Liens.
6.15 Perfection and Priority of Lender Liens. Lender Liens shall be created
and perfected upon (a) each Mortgage Note that is delivered to Administrative
Agent, (b) each Mortgage Security in certificated form that is delivered to
Administrative Agent or its bailee, (c) each Mortgage Security in book-entry
form when notice of the Lender Lien is given to the financial institution in
whose favor that security has been issued and that institution confirms that
notice, (d) each Mortgage Note and related Take-Out Commitment for 21-days after
the Borrowing Date of each related Wet Borrowing, (e) all Mortgage Collateral
transmitted to any investor under Section 4.8(b) (which shall continue until
Administrative Agent receives payments or Mortgage Securities under that
section), and (f) all Servicing Receivables and other Servicing Rights upon
delivery of the documents described on Schedule 5.1 and, in the case of
Financing Statements, filing as indicated on that schedule.
6.16 Principal Office, Etc. The principal office, chief executive office,
and principal place of business of Associates is at ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and of ▇▇▇▇▇▇ is at ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
6.17 Trade Names. No Company has used or transacted business under any
other corporate or trade name in the five-year period preceding the Closing
Date, including, without limitation, the trade names ▇▇▇▇▇▇ Funding Group, Rylco
Funding Group, and RMC Mortgage Corp., except that Ryland has and continues to
do business from time to time under the trade name RMC Home Loans.
38
6.18 Government Approvals. ▇▇▇▇▇▇ is approved and qualified and in good
standing as an issuer, mortgagee, or seller/servicer, as stated below, and meets
all requirements applicable to its status as such:
(a) GNMA approved issuer of Mortgage Securities guaranteed by
GNMA;
(b) FNMA approved seller/servicer of Mortgage Loans, eligible to
originate, purchase, hold, sell, and service Mortgage Loans to be sold to
FNMA;
(c) FHLMC approved seller/servicer of Mortgage Loans, eligible to
originate, purchase, hold, sell, and service Mortgage Loans to be sold to
FHLMC;
(d) FHA approved mortgagee, eligible to originate, purchase, hold,
sell, and service FHA Loans; and
(e) VA approved mortgagee, eligible to originate, purchase, hold,
sell, and service VA Loans.
6.19 Appraisals. With respect to the property the subject of any Mortgage
Loan, ▇▇▇▇▇▇ has obtained Appraisals in material compliance with all Appraisal
Legal Requirements.
6.20 Solvency. On each Borrowing Date each Company is, and after giving
effect to the requested Borrowing will be, Solvent.
6.21 Full Disclosure. There is no material fact that either Company has not
disclosed to Lenders that is a Material-Adverse Event except that no Company
makes any warranty regarding general economic conditions. To the best of each
Company's knowledge, neither the Financials referred to in Section 6.6 or
delivered after the Closing Date under Section 7.1 nor any Credit Request,
Collateral-Delivery Notice, Collateral-Conversion Notice, Borrowing-Base Report,
Compliance Certificate, officer's certificate, or written statement (other than
any financial projections) authored by either Company and delivered by either
Company to Administrative Agent or any Lender in connection with this agreement
contains any untrue statement of material fact.
6.22 Y2K Issue. Borrower has (a) initiated a review and assessment of all
areas within each Company's business and operations (including those affected by
suppliers and vendors) that could be adversely affected by the Y2K Issue, (b)
developed a plan and time line for addressing the Y2K Issue on a timely basis,
and (c) to date implemented in all material respects that plan in accordance
with that timetable.
SECTION 7 AFFIRMATIVE COVENANTS. Until all commitments by Lenders to extend
credit under this agreement have been canceled or terminated and the Obligation
is fully paid and performed, the Companies jointly and severally covenant and
agree with Administrative Agent and Lenders as follows:
39
7.1 Reporting Requirements. The Companies shall furnish to Lenders the
following, all in form and detail reasonably satisfactory to Lenders:
(a) Annual Financials. Promptly when available but at least within
92 days after each fiscal-year end of ▇▇▇▇▇▇ Group, consolidated
Financials of ▇▇▇▇▇▇ Group and of ▇▇▇▇▇▇ (including consolidation with,
and consolidating at least as to, Associates) as of that year end, each
reflecting the corresponding figures for the preceding fiscal year in
comparative form, accompanied by the related report prepared by
independent certified public accountants acceptable to Administrative
Agent and stating that the consolidated portion of those statements were
prepared in accordance with GAAP applied on a basis consistent with prior
periods except for such changes in GAAP concurred in by the Companies'
independent public accountants.
(b) Quarterly Financials. Promptly when available but at least
within 47 days after each fiscal quarter of ▇▇▇▇▇▇, consolidated
Financials of ▇▇▇▇▇▇ (including consolidation with, and consolidating at
least as to, Associates) as of that quarter end, accompanied in each case
by a Compliance Certificate.
(c) Monthly Report. Promptly when available but at least within 47
days after the last day of each Calendar Month, ▇▇▇▇▇▇'▇ customary
management report regarding its (a) commitment position, specifically
identifying investor, loan type, original principal amount, interest rate,
price and yield, and expiration date, (b) pipeline position, specifically
identifying the amount and rate of price committed loans in pipeline,
future contracts, hedged positions, repurchase agreements, and profit and
loss, and (c) production, specifically identifying the geographic mix of
all retail and correspondent production for the subject month and year to
date.
(d) Notices. Notice, promptly after either Company knows or has
reason to know, of (i) the existence and status of any Litigation that, if
determined adversely to either Company, would be a Material-Adverse Event,
(ii) any change in any material fact or circumstance represented or
warranted by either Company in any Loan Document that constitutes a
Material-Adverse Event, (iii) the receipt by either Company of notice of
any violation or alleged violation of ERISA or any Environmental Law or
other Legal Requirement if that violation individually or collectively
with other violations or allegations is a Material-Adverse Event, or (iv)
a Default or Potential Default, other than under Section 10.1(a),
specifying the nature thereof and what action the Companies have taken,
are taking, or propose to take with respect to it.
(e) Other Debt. Notice, promptly after either Company knows or has
reason to know, of any notice from, or the taking of any other action by,
the holder of any Debt of either Company, only if that Debt is in the
amount specified in Section 10.1(e), with respect to a claimed default,
together with a detailed statement by a Responsible Officer of that
Company specifying the notice given or other action taken, the nature of
the claimed default, and what action the Companies are taking or propose
to take with respect to it.
(f) Other Information. Promptly upon reasonable request by
Administrative Agent or Determining Lenders (through Administrative
Agent), information (not otherwise required to be furnished under the Loan
Documents) respecting the business affairs, assets, and liabilities of the
Companies and opinions, certifications, and documents in addition to those
mentioned in this agreement.
40
7.2 Use of Proceeds. The Companies shall use the proceeds of Borrowings
only for the purposes represented in this agreement.
7.3 Books and Records. Each Company shall maintain books, records, and
accounts necessary to prepare Financials in accordance with GAAP.
7.4 Inspections. Upon reasonable request, each Company shall allow
Administrative Agent, any Lender, or their respective Representatives to inspect
any of its properties, to review reports, files, and other records and to make
and take away copies, to conduct tests or investigations, and to discuss any of
its affairs, conditions, and finances with its directors, officers, employees,
or representatives from time to time during reasonable business hours.
7.5 Taxes. Each Company shall promptly pay when due any and all Taxes other
than Taxes of which the failure to pay is not a Material-Adverse Event or which
are being contested in good faith by lawful proceedings diligently conducted,
against which reserve or other provision required by GAAP has been made, and in
respect of which levy and execution of any Lien have been and continue to be
stayed.
7.6 Expenses. The Companies jointly and severally agree to pay (a) all
reasonable legal fees and expenses incurred by Administrative Agent and all
reasonable legal fees and expenses in an amount not exceeding $1,000 for each
other Lender's outside counsel expenses, incurred in connection with the
preparation, negotiation, and execution of the Loan Documents, (b) all
reasonable legal fees and expenses incurred by Administrative Agent in
connection with each separate future amendment, consent, waiver, or approval
executed in connection with any Loan Document, (c) all fees, charges, or Taxes
for the recording or filing of the Security Documents, (d) all other reasonable
out-of-pocket expenses of Administrative Agent or any Lender in connection with
the preparation, negotiation, execution, or administration of the Loan
Documents, including, without limitation, courier expenses incurred in
connection with the Mortgage Collateral, (e) all amounts expended, advanced, or
incurred by Administrative Agent or any Lender to satisfy any obligation of
either Company under any Loan Document, to collect the Obligation, or to enforce
the Rights of Administrative Agent or any Lender under any Loan Document,
including, without limitation, all court costs, reasonable attorneys' fees
(whether for trial, appeal, or other proceedings), reasonable fees of auditors
and accountants, and investigation expenses reasonably incurred by
Administrative Agent or any Lender in connection with any such matters, (f)
interest at an annual interest rate equal to the Default Rate on each item
specified in clauses (a) through (e) above from 30 days after the date of
written demand or request for reimbursement to the date of reimbursement, and
(g) any and all stamp and other Taxes payable or determined to be payable in
connection with the execution, delivery, or recordation of any Loan Document, IN
CONNECTION WITH WHICH EACH COMPANY SHALL INDEMNIFY AND SAVE ADMINISTRATIVE AGENT
AND EACH LENDER HARMLESS FROM AND AGAINST ANY AND ALL LIABILITIES WITH RESPECT
TO OR RESULTING FROM ANY DELAY IN PAYING OR FAILING TO PAY THOSE TAXES TO THE
EXTENT THOSE LIABILITIES ARISE SOLELY BECAUSE THE COMPANIES FAIL TO PAY THE
TAXES UPON DEMAND BY A LENDER, WHICH INDEMNITY SURVIVES THE PAYMENT AND
PERFORMANCE OF THE OBLIGATION AND TERMINATION OF THE LOAN DOCUMENTS.
7.7 Maintenance of Existence, Assets, and Business. Each Company shall (a)
except as permitted by Section 8.5, maintain its corporate existence and good
standing in its state of incorporation and its authority to transact business in
all other states where failure to maintain its authority to transact business is
a Material-Adverse Event, and (b) maintain all licenses, permits, and franchises
necessary for its business
41
where failure to do so is a Material-Adverse Event, including, without
limitation, ▇▇▇▇▇▇'▇ eligibility as lender, seller/servicer, and issuer as
described in Section 6.18.
7.8 Insurance. Each Company shall (a) maintain with financially sound and
reputable insurers, insurance with respect to its assets and business against
such liabilities, casualties, risks, and contingencies and in such types and
amounts, including, without limitation, a fidelity bond or bonds in form and
with coverage, with a company, and with respect to such individuals or groups of
individuals, as satisfy prevailing FNMA, FHLMC, and GNMA requirements applicable
to a qualified mortgage institution and otherwise as is customary in the case of
Persons engaged in the same or similar businesses and similarly situated, and
(b) upon Administrative Agent's request, furnish to Administrative Agent from
time to time (i) a summary of its insurance coverage, in form and substance
satisfactory to Administrative Agent, and (ii) originals or copies of the
applicable policies.
7.9 Further Assurances. Each Company shall (a) promptly, and in any event
within three Business Days after Administrative Agent's request, or such longer
period as permitted under Section 4.9, cure any defects in the execution and
delivery of any Loan Document and (b) at its expense, promptly execute and
deliver to Administrative Agent upon request all such other and further
documents to (i) comply with or accomplish either Company's agreements in any
Loan Document, (ii) further evidence and more fully describe the Collateral
intended as security for the Obligation, (iii) correct any omissions in any Loan
Document, (iv) more fully to state the security obligations in any Loan
Document, (v) perfect, protect, or preserve (continue to do so) any Lender Lien
created (or intended to be created) under any Loan Document, or (vi) make any
recording, file any notices, or obtain any consents.
7.10 Take-Out Commitments and Servicing Contracts. Each Company shall
perform and observe in all material respects each of the provisions of each
Take-Out Commitment and Servicing Contract on its part to be performed or
observed and cause all things to be done that are necessary to have each item of
Mortgage Collateral and the Collateral Documents covered by a Take-Out
Commitment comply with its requirements.
7.11 Compliance with Material Agreements. Each Company shall comply with
all of its Material Agreements if failure to do so is a Material-Adverse Event.
7.12 Appraisals. Each Company shall promptly (a) permit Administrative
Agent's and any Lender's authorized Representatives to discuss with either
Company's officers or with the appraisers furnishing Appraisals the procedures
for preparation, review, and retention of, and to review and obtain copies of,
all Appraisals pertaining to any Mortgage Collateral, and (b) upon any Lender's
request, cooperate with it to ascertain that the Appraisals comply with all
Appraisal Legal Requirements.
7.13 Y2K Issue. Except where any non-compliance is not a Material-Adverse
Event, Borrower shall (a) cause the Companies' computer applications to be
unaffected by the Y2K Issue on a timely basis and (b) promptly notify
Administrative Agent if any Company discovers or determines that any computer
application of any of the Companies' suppliers and vendors is not reasonably
expected to be unaffected by the Y2K Issue on a timely basis.
7.14 Indemnification. IN CONSIDERATION OF THE COMMITMENTS BY ADMINISTRATIVE
AGENT AND LENDERS UNDER THE LOAN DOCUMENTS, THE COMPANIES JOINTLY AND SEVERALLY
AGREE TO INDEMNIFY AND DEFEND EACH ADMINISTRATIVE AGENT, LENDER, AND THEIR
RESPECTIVE
42
AFFILIATES AND REPRESENTATIVES (COLLECTIVELY, THE "INDEMNIFIED PARTIES"), AND
DEFEND THEM AND HOLD EACH OF THEM HARMLESS, AGAINST ANY AND ALL LOSSES,
LIABILITIES, CLAIMS, DAMAGES, DEFICIENCIES, INTEREST, JUDGMENTS, COSTS, OR
EXPENSES, INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES, INCURRED BY
ANY OF THEM ARISING FROM OR BECAUSE OF (A) ANY INVESTIGATION, LITIGATION, OR
OTHER PROCEEDING BROUGHT OR THREATENED IN CONNECTION WITH ANY LOAN DOCUMENT OR
THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, INCLUDING, WITHOUT
LIMITATION, ANY USE BY EITHER COMPANY OF THE PROCEEDS OF BORROWINGS, (B) ANY
IMPOUNDMENT, ATTACHMENT, OR RETENTION OF ANY MORTGAGE COLLATERAL OR ANY FAILURE
OF ANY INVESTOR TO PAY THE ENTIRE PURCHASE PRICE OF ANY MORTGAGE COLLATERAL
UNDER ANY TAKE-OUT COMMITMENT, (C) ANY ALLEGED VIOLATION OF ANY FEDERAL OR STATE
LEGAL REQUIREMENT RELATING TO USURY IN CONNECTION WITH ANY MORTGAGE COLLATERAL,
AND (D) ANY REPRESENTATION MADE BY EITHER COMPANY UNDER ANY LOAN DOCUMENT.
ALTHOUGH EACH INDEMNIFIED PARTY IS ENTITLED TO INDEMNIFICATION FOR ANY
INDEMNIFIED PARTY'S ORDINARY NEGLIGENCE, NO INDEMNIFIED PARTY IS ENTITLED TO
INDEMNIFICATION FOR ITS OWN GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR FRAUD. THIS
INDEMNITY SURVIVES THE PAYMENT AND PERFORMANCE OF THE OBLIGATION AND TERMINATION
OF THE LOAN DOCUMENTS.
SECTION 8 NEGATIVE COVENANTS. Until all commitments by Lenders to extend
credit under this agreement have been canceled or terminated and the Obligation
is fully paid and performed, the Companies jointly and severally covenant and
agree with Administrative Agent and Lenders as follows:
8.1 Debt. Neither Company may directly or indirectly create, incur, or
suffer to exist any Debt except Permitted Debt.
8.2 Liens. Neither Company may directly or indirectly (a) create, incur, or
suffer to exist any Lien on any of its assets except Permitted Liens or (b)
enter into or permit to exist any arrangement or agreement that directly or
indirectly prohibits either Company from creating or incurring any Lien on any
of its assets other than the Loan Documents.
8.3 Loans, Advances, and Investments. Except as permitted by Sections 8.4
or 8.5, no Company may make any loan, advance, extension of credit, or capital
contribution to, make any investment in, or purchase or commit to purchase any
stock or other securities or evidences of Debt of, or interests in, any other
Person other than Permitted Loans/Investments.
8.4 Distributions. Ryland may not directly or indirectly pay or declare any
Distribution during any fiscal year if a Default or Potential Default exists or
if, immediately after giving effect to it, a Default or Potential Default would
then exist.
8.5 Merger or Consolidation. Neither Company may directly or indirectly
merge or consolidate with or into any other Person except (a) any merger solely
for the purpose of accomplishing a re-incorporation in another jurisdiction, (b)
either Company may merge into the other, and (c) any Subsidiary of either
Company may merge into either Company.
8.6 Liquidations and Dispositions of Assets. Except as set forth in Section
8.4 or below, neither Company may directly or indirectly dissolve or liquidate
or sell, transfer, lease, or otherwise dispose of any material portion of its
assets or business except sales or other dispositions by Ryland in the ordinary
43
course of its business, of (a) Servicing Portfolio, or (b) subject to Section
4.8(b), Mortgage Loans or Mortgage Securities that are Collateral, or (c)
Mortgage Loans or Mortgage Securities that are not Collateral, or (d) sales by
Ryland of Servicing Rights to its Subsidiaries upon 30 days advance written
notice to Administrative Agent and compliance with any requirements
Administrative Agent may reasonably make to ensure that the Lender Liens
continue to cover all of those Servicing Rights to the extent previously
covered.
8.7 Use of Proceeds. Neither Company may directly or indirectly use the
proceeds of Borrowings (a) for any purpose other than as represented in this
agreement, (b) for the funding or acquisition of construction or commercial
first mortgage loans, (c) for wages of employees, unless a timely payment to or
deposit with the United States of America of all amounts of Tax required to be
deducted and withheld with respect to such wages is also made, or (d) in
violation of Regulation U, Regulation X, or ss. 7 of the Securities Exchange Act
of 1934 .
8.8 Collateral Matters. Neither Company may directly or indirectly:
(a) Relocate its principal office, chief executive office, or
principal place of business or change its corporate name or name under
which its is doing business without first (i) giving Administrative Agent
30 days prior written notice of the proposed relocation or change and (ii)
executing and delivering all additional documents and performing all
additional acts as Administrative Agent, in its sole discretion, may
request in order to continue or maintain the existence and priority of the
Lender Liens intended to be created under the Loan Documents.
(b) Compromise, extend, release, or adjust payments on any Mortgage
Collateral, accept a conveyance of mortgaged property in full or partial
satisfaction of any Mortgage Collateral, or release any mortgage, deed of
trust, or trust deed securing or underlying any Mortgage Collateral.
(c) Agree to the amendment or termination of any Take-Out Commitment
in which Administrative Agent has a Lien or to the substitution of a
Take-Out Commitment for a Take-Out Commitment in which Administrative
Agent has a Lien if that amendment, termination, or substitution is a
Material-Adverse Event.
(d) Transfer, sell, assign, or deliver any Mortgage Collateral
pledged to Administrative Agent to any Person other than Administrative
Agent, except pursuant to Section 4.8.
8.9 Transactions with Affiliates. Neither Company may directly or
indirectly enter into any material transaction with any of its Affiliates
(except with another Company) other than transactions in the ordinary course of
business or upon fair and reasonable terms not materially less favorable than it
could obtain or could become entitled to in an arm's-length transaction with a
Person that was not its Affiliate.
8.10 Employee Plans. Except where a Material-Adverse Event would not
result, neither Company may directly or indirectly permit any of the events or
circumstances described in Section 6.10 to exist or occur.
8.11 Compliance with Legal Requirements and Documents. Neither Company may
directly or indirectly (a) violate the provisions of any Legal Requirements
applicable to it or of any Material Agreement to which it is a party if that
violation alone or with all other violations is a Material-Adverse
44
Event or (b) violate the provisions of its charter or bylaws or repeal, replace
or amend any provision of its charter or bylaws if any such action is a
Material-Adverse Event.
8.12 Government Regulations. Neither Company may directly or indirectly
conduct its business in a way that it becomes regulated under the Investment
Company Act of 1940.
8.13 Fiscal Year Accounting. Neither Company may directly or indirectly
change its fiscal year nor use any accounting method other than GAAP.
8.14 New Businesses. Neither Company may directly or indirectly engage in
any business except the businesses in which it or any of its Affiliates is
presently engaged and any other reasonably-related business without prior
written notification to Administrative Agent.
8.15 Assignment. Except as permitted in Section 8.5, neither Company may
directly or indirectly assign or transfer any of its Rights, duties, or
obligations under any of the Loan Documents.
SECTION 9 FINANCIAL COVENANTS. Until all commitments by Lenders to extend
credit under this agreement have been canceled or terminated and the Obligation
is fully paid and performed, the Companies jointly and severally covenant and
agree with Administrative Agent and Lenders as follows:
9.1 Net Worth Covenants.
(a) Associates' stockholders' equity reflected on its balance sheet
may not be less than $1,000,000 at the end of any quarter in Associates'
fiscal year.
(b) ▇▇▇▇▇▇'▇ Net Worth may not be less than $15,000,000 at the end
of any quarter in ▇▇▇▇▇▇'▇ fiscal year.
9.2 Leverage Ratio. The ratio of ▇▇▇▇▇▇'▇ Total Liabilities to ▇▇▇▇▇▇'▇
Tangible-Net Worth may not exceed 13.5 to 1.0 at the end of any quarter in
▇▇▇▇▇▇'▇ fiscal year.
9.3 Net Income. Associates' net income may never be less than $1.00 for any
of Associates' fiscal years at the time of or after the Closing Date.
9.4 Cash Flow. The sum of ▇▇▇▇▇▇'▇ net income (excluding any recognized
non-cash income) or loss plus (to the extent deducted in calculating that net
income or loss) amortization, depreciation, and other noncash charges (on a
consolidated basis) may never be less than $1.00 at the end of any of ▇▇▇▇▇▇'▇
fiscal quarters for the four-fiscal-quarter periods then ended.
SECTION 10 DEFAULTS AND REMEDIES.
10.1 Default. The term "Default" means the existence or occurrence of any
one or more of the following:
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(a) Obligation. Either Company fails to pay (i) any Principal Debt
it owes within one Business Day after it is due under this agreement or
(ii) any other part of the Obligation it owes within three Business Days
after it is due under any Loan Document.
(b) Covenants. Either Company fails to punctually and properly
perform, observe, and comply with any covenant or agreement in any Loan
Document, other than the covenants to pay the Obligation, and that failure
continues for 15 days after either Company knows of that failure or
Administrative Agent or any Lender notifies either Company of it.
(c) Misrepresentation. Any material statement, warranty, or
representation by or on behalf of either Company or ▇▇▇▇▇▇ Group in any
Loan Document or any Credit Request, Collateral-Delivery Notice,
Compliance Certificate, management report, or other writing (except
financial projections) authored by either Company or ▇▇▇▇▇▇ Group and
furnished in connection with this agreement, proves to have been incorrect
or misleading in any material respect as of the date made or deemed made.
(d) Debtor Law. Either Company (i) is not Solvent, (ii) fails to pay
its Debts generally as they become due, (iii) voluntarily seeks, consents
to, or acquiesces in the benefit of any Debtor Law, or (iv) becomes a
party to or is made the subject of any proceeding provided for by any
Debtor Law, other than as a creditor or claimant, that could suspend or
otherwise adversely affect the Rights of Administrative Agent or any
Lender granted in the Loan Documents unless, if the proceeding is
involuntary, the applicable petition is dismissed within 60 days after its
filing.
(e) Other Debt; Cross-Default.
(i) Either (A) either Company or ▇▇▇▇▇▇ Group fails to make
within any applicable grace period any payment on Debt that is
recourse to it and that has an unpaid principal balance of over, (1)
for Debt that arises with respect to a letter of credit issued for
either Company's account, $500,000 for Associates, $1,000,000 for
Ryland, or $20,000,000 for ▇▇▇▇▇▇ Group or (2) for other Debt,
$2,500,000 for Associates, $5,000,000 for Ryland, or $20,000,000 for
▇▇▇▇▇▇ Group or (B) any event, condition, material breach, or
default occurs under any document evidencing, governing, securing,
or relating to any Debt set forth in clause (A) above if, as a
result of that occurrence, it becomes due before its scheduled
installments or stated maturity; or
(ii) That default or nonpayment is not remedied or effectively
waived by the one or more holders of that Debt.
(f) Judgments, Etc. Either Company or ▇▇▇▇▇▇ Group fails within the
time period specified by applicable Legal Requirement, to appeal, pay,
bond, or otherwise discharge any final judgments or orders for payment of
money which, after subtracting from the amount of such judgment or order
the amount of any relevant insurance coverage from Solvent insurers,
exceed $1,000,000 per case for either Company, $5,000,000 per case for
▇▇▇▇▇▇ Group, or $5,000,000 total for the Companies, or $15,000,000 total
for ▇▇▇▇▇▇ Group.
(g) Levy, Seizure, Etc. Any Person levies on, seizes, or attaches
all or any material assets of either Company or ▇▇▇▇▇▇ Group, and that
levy, seizure, and attachment is not dissolved and possession returned to
46
that Company or ▇▇▇▇▇▇ Group, as the case may be, within the time period
specified by applicable Legal Requirement.
(h) Unenforceability. Any material provision of any Loan Document
for any reason ceases to be in full force and effect or is fully or
partially declared null and void or unenforceable or the validity or
enforceability of any Loan Document is challenged or denied by either
Company.
(i) Change of Control. Any change in the ownership of either Company
with the result that Associates ceases to be directly or indirectly wholly
and beneficially owned by either Ryland or the ▇▇▇▇▇▇ Group, or Ryland
ceases to be directly or indirectly wholly and beneficially owned by
▇▇▇▇▇▇ Group;
(j) Agency Qualifications. (i) Ryland or any Servicing Subsidiary
fails to meet any GNMA seller or servicing standard or requirement and
that failure is a Material-Adverse Event, (ii) GNMA revokes or terminates
▇▇▇▇▇▇'▇ or any Servicing Subsidiary's Right to service for GNMA, (iii)
GNMA issues a letter of extinguishment under any GNMA guaranty agreement,
(iv) Ryland or any Servicing Subsidiary ceases to be an eligible issuer or
servicer under either the FNMA or FHLMC Guide, (v) FNMA or FHLMC impose
any sanctions upon Ryland or any Servicing Subsidiary resulting in a
Material-Adverse Event, (vi) FNMA or FHLMC terminate or revoke ▇▇▇▇▇▇'▇ or
any Servicing Subsidiary's Right to service for FNMA or FHLMC, or (vi)
FNMA or FHLMC initiate any transfer of servicing from Ryland or any
Servicing Subsidiary to another Person other than in the ordinary course
of business. A Servicing Subsidiary is included in this Section 10.1(j)
solely to the extent that its servicing rights are being included to meet
the minimum requirements of Section 9.5(a) and solely as any of the
foregoing provisions relate to the Mortgage Loans or Mortgage Securities
that are part of those servicing rights.
10.2 Remedies.
(a) Debtor Law. Upon the occurrence of a Default under Section
10.1(d), the commitments of Lenders to extend credit under this agreement
automatically terminate and the full Obligation is automatically due and
payable, without presentment, demand, notice of default, notice of the
intent to accelerate, notice of acceleration, or other requirements of any
kind, all of which are expressly waived by the Companies.
(b) Other Defaults. While a Default exists, other than those
described in clause (a) above, Administrative Agent may and, upon the
direction of Determining Lenders, shall declare the Obligation to be
immediately due and payable, whereupon it shall be due and payable,
whereupon the commitments of Lenders to extend credit under this agreement
are then automatically terminated.
(c) Other Remedies. Following the termination of the commitments of
Lenders to extend credit under this agreement and the acceleration of the
Obligation, Administrative Agent may, and at the direction of Determining
Lenders shall, do any one or more of the following:
(i) Reduce any claim to judgment;
(ii) Foreclose upon or otherwise enforce any Lender Liens;
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(iii) Notify all obligors of Collateral serviced by either
Company and all servicers of other Collateral that the Collateral
has been assigned to Administrative Agent and that all payments
thereon are to be made directly to Administrative Agent or any other
party as may be designated by Administrative Agent; settle,
compromise, or release, in whole or in part, any amounts owing on
the Collateral by any obligor, servicer or any investor of any
portion of the Collateral, on terms acceptable to Administrative
Agent; enforce payment and prosecute any action or proceeding with
respect to any and all Collateral and where any such Collateral is
in default, foreclose on and enforce liens in such Collateral by any
available judicial procedure or without judicial process and sell
property acquired as a result of any such foreclosure;
(iv) Act, or contract with a third party to act, as servicer
of each item of Collateral serviced by either Company and perform
all obligations required in connection with Take-Out Commitments;
(v) Exercise all Rights of a secured creditor under the UCC,
including without limitation selling the Collateral at public or
private sale, including sale pursuant to any applicable Take-Out
Commitment. To the extent that applicable law requires that either
Company receive notice of or prior to any such sale (or any other
disposition of Collateral) the Companies agree that 10 days notice
shall be reasonable notice. At any sale or other disposition, the
Collateral may be sold or disposed of as an entirety or in separate
parts, as Administrative Agent may determine. Administrative Agent
may, without notice or publication, adjourn any public or private
sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the sale, and that sale
may be made at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the Collateral
on credit or for future delivery, the Collateral so sold may be
retained by Administrative Agent until the selling price is paid by
the purchaser thereof, but Administrative Agent shall not incur any
liability in case of the failure of that purchaser to take up and
pay for the Collateral so sold and, in case of any such failure,
that Collateral may again be sold upon like notice. Administrative
Agent may, however, instead of exercising the power of sale herein
conferred upon it, proceed by a suit or suits at law or in equity to
collect all amounts due upon the Collateral or to foreclose on and
sell the Collateral or any portion of the Collateral under a
judgment or decree of a court or courts of competent jurisdiction,
or both; and
(vi) Exercise any other Rights in the Loan Documents, at Legal
Requirement, in equity, or otherwise that Determining Lenders may
direct.
Should any Default continue that, in Administrative Agent's opinion, materially
and adversely affects the Collateral or the interests of the Lenders under this
agreement, Administrative Agent may, in a notice to the Lenders of that Default
set forth one or more actions that Administrative Agent, in its opinion,
believes should be taken. Unless otherwise directed by Determining Lenders
(excluding the Lender serving as agent hereunder) within ten days following the
date of the notice setting forth the proposed action or actions, Administrative
Agent may, but shall not be obligated to, take the action or actions set forth
in that notice.
10.3 Right of Offset. The Companies hereby grant to Administrative Agent
and to each Lender a right of offset, to secure the repayment of the Obligation,
upon any and all monies, securities, or other property of the Companies, and the
proceeds therefrom now or hereafter held or received by or in transit to
48
Administrative Agent or such Lender from or for the account of the Companies,
whether for safekeeping, custody, pledge, transmission, collection, or
otherwise, and also upon any and all deposits (general or special, time or
demand, provisional, or final) and credits of the Companies, and any and all
claims of the Companies against Administrative Agent or such Lender, at any time
existing. Upon the occurrence of any Default, Administrative Agent and each
Lender is hereby authorized at any time and from time to time, without notice to
either Company, to offset, appropriate, and apply any and all of those items
against the Obligation, subject to Section 3.6. Notwithstanding anything in this
section or elsewhere in this agreement to the contrary, neither Administrative
Agent nor any other Lender shall have any right to offset, appropriate, or apply
any accounts of the Companies which consist of escrowed funds (except and to the
extent of any beneficial interest which the Companies have in such escrowed
funds) which have been so identified by either Company in writing at the time of
deposit thereof.
10.4 Private Sales. Administrative Agent shall incur no liability as a
result of the sale of the Collateral, or any part of the Collateral, at any
private sale made in a commercially reasonable manner. The Companies hereby
waive any claims either of them may have against Administrative Agent arising
because the price at which the Collateral may have been sold at that private
sale was less than the price which might have been obtained at a public sale or
was less than the Obligation.
10.5 Waivers. The Companies waive any right to require Administrative Agent
to (a) proceed against any Person, (b) proceed against or exhaust any of the
Collateral or pursue its Rights and remedies as against the Collateral in any
particular order, or (c) pursue any other remedy in its power. Administrative
Agent shall not be required to take any steps necessary to preserve any Rights
of either Company against any Person from which either Company purchased any
Mortgage Loans or to preserve Rights against prior parties. The Companies and
each surety, endorser, guarantor, pledgor, and other party ever liable or whose
property is ever liable for payment of any of the Obligation jointly and
severally waive presentment and demand for payment, protest, notice of intention
to accelerate, notice of acceleration, and notice of protest and nonpayment, and
agree that their or their property's liability with respect to the Obligation,
or any part thereof, shall not be affected by any renewal or extension in the
time of payment of the Obligation, by any indulgence, or by any release or
change in any security for the payment of the Obligation, and hereby consent to
any and all renewals, extensions, indulgences, releases, or changes, regardless
of the number thereof.
10.6 Performance by Administrative Agent. Should any covenant, duty, or
agreement of either Company fail to be performed in accordance with the terms of
this agreement or of any document delivered under this agreement, Administrative
Agent may, at its option, after notice to Associates or ▇▇▇▇▇▇, as the case may
be, perform, or attempt to perform, such covenant, duty, or agreement on behalf
of that Company and shall notify each Lender that it has done so. In such event,
the Companies shall jointly and severally, at the request of Administrative
Agent, promptly pay any amount reasonably expended by Administrative Agent in
such performance or attempted performance to Administrative Agent at its
principal place of business, together with interest thereon at the Maximum Rate
from the date of such expenditure by Administrative Agent until paid.
Notwithstanding the foregoing, it is expressly understood that Administrative
Agent does not assume and shall never have, except by express written consent of
Administrative Agent, any liability or responsibility for the performance of any
duties of either Company under this agreement or under any other document
delivered under this agreement.
10.7 No Responsibility. Except in the case of fraud, gross negligence, or
willful misconduct, neither Administrative Agent nor any of its officers,
directors, employees, or attorneys shall assume, or ever
49
have any liability or responsibility for, any diminution in the value of the
Collateral or any part of the Collateral.
10.8 No Waiver. The acceptance by Administrative Agent or any Lender at any
time and from time to time of partial payment or performance by either Company
of any of their respective obligations under this agreement or under any Loan
Document shall not be deemed to be a waiver of any Default then existing. No
waiver by Administrative Agent or any Lender shall be deemed to be a waiver of
any other then existing or subsequent Default. No delay or omission by
Administrative Agent or any Lender in exercising any right under this agreement
or under any other document required to be executed under or in connection with
this agreement shall impair such right or be construed as a waiver thereof or
any acquiescence therein, nor shall any single or partial exercise of any such
right preclude other or further exercise thereof, or the exercise of any other
right under this agreement or otherwise.
10.9 Cumulative Rights. All Rights available to Administrative Agent and
the Lenders under this agreement or under any other document delivered under
this agreement shall be cumulative of and in addition to all other Rights
granted to Administrative Agent and the Lenders at Legal Requirement or in
equity, whether or not the Notes be due and payable and whether or not
Administrative Agent shall have instituted any suit for collection, foreclosure,
or other action in connection with this agreement or any other document
delivered under this agreement.
10.10 Proceeds. If the proceeds of any sale or exercise of any Rights are
insufficient to satisfy the full Obligation, then the Companies shall remain
liable jointly and severally for any deficiency.
10.11 Rights of Individual Lenders. No Lender shall have any right by
virtue, or by availing itself, of any provision of this agreement to institute
any action or proceedings at Legal Requirement or in equity or otherwise
(excluding any actions in bankruptcy), upon or under or with respect to this
agreement, or for the appointment of a receiver, or for any other remedy under
this agreement, unless the Determining Lenders previously shall have given to
Administrative Agent written notice of a Default and of the continuance thereof
and made written request upon Administrative Agent to institute such action or
proceedings in its own name as Administrative Agent and shall have offered to
Administrative Agent reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and Administrative
Agent, for ten Business Days after its receipt of such notice, request and offer
of indemnity, shall have failed to institute any such action or proceeding and
no direction inconsistent with such written request shall have been given to
Administrative Agent by Determining Lenders; it being understood and intended,
and being expressly covenanted by the taker and holder of every Note with every
other taker and holder and Administrative Agent, that no one or more holders of
Notes shall have any right in any manner whatever by virtue, or by availing
itself, of any provision of this agreement to affect, disturb or prejudice the
Rights of any other Lenders, or to obtain or seek to obtain priority over or
preference to any other such Lender, or to enforce any right under this
agreement, except in the manner herein provided and for the equal, ratable and
common benefit of all Lenders. For the protection and enforcement of the
provisions of this Section 10.11, each and every Lender and Administrative Agent
shall be entitled to such relief as can be given either at law or in equity.
10.12 Notice to Administrative Agent. Should any Default or Potential
Default occur and be continuing, any Lender having actual knowledge thereof
shall notify Administrative Agent and the Companies of the existence thereof,
but the failure of any Lender to provide that notice shall not prejudice that
Lender's Rights under this agreement.
50
10.13 Costs. All court costs, reasonable attorneys' fees, other costs of
collection, and other sums spent by Administrative Agent or any Lender in the
exercise of any Right provided in any Loan Document is payable to Administrative
Agent or that Lender, as the case may be, on demand, is part of the Obligation,
and bears interest at the Default Rate from the date paid by Administrative
Agent or any Lender to the date repaid by either Company.
SECTION 11 ADMINISTRATIVE AGENT
11.1 Authorization and Action. Each Lender hereby appoints Bank One, Texas,
N.A., as Administrative Agent, in its name and on its behalf (other than for
Competitive-Bid Borrowings), to (a) receive all documents and items to be
furnished to it under this agreement; (b) act as Administrative Agent for and on
its behalf in and under all of the Loan Documents; (c) arrange the means of
distributing the funds to be provided to the Companies and to each Lender; (d)
distribute to Lenders information, requests, payments, prepayments, documents,
and items received from Associates, ▇▇▇▇▇▇ and others under this agreement; and
(e) deliver to the Companies and others (as is appropriate) requests, demands,
approvals, and consents received from each Lender. Each Lender recognizes and
understands that, if Administrative Agent exercises the remedies provided under
Section 10 and Administrative Agent does not have adequate facilities (and
Administrative Agent shall have no obligation to develop adequate facilities) to
service any Collateral required to be serviced, it will be necessary for
Administrative Agent to contract with a third party to service such Collateral,
and the fees paid for such services will be a prior charge against the
Collateral pursuant to Section 3.5. As to any matter not expressly provided for
by this agreement (including, without limitation, enforcement or collection of
the Notes), Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of Determining Lenders or, in respect of the matters
covered by Section 12.11(c), all Lenders. However, Administrative Agent shall
not be required to take any action which exposes Administrative Agent to
liability or which is contrary to this agreement or applicable law.
Administrative Agent agrees to give to each Lender prompt notice of each notice
given to it by either Company under this agreement.
11.2 Administrative Agent's Reliance, Etc. Neither Administrative Agent nor
any of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this agreement, except for its or their own gross negligence or willful
misconduct, except as otherwise set forth in Section 11.7 when acting in its
capacity as custodian. Without limitation of the generality of the foregoing,
Administrative Agent (a) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (b) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
agreement; (c) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
agreement on the part of the Companies or to inspect the property (including the
books and records) of the Companies (except as specifically set forth in Section
11.7); (d) shall not be responsible to any Lender for the due execution (by any
party hereto other than Administrative Agent), legality, validity,
enforceability, genuineness, sufficiency or value of this agreement or any other
instrument or document furnished pursuant hereto (except as specifically set
forth in Section 11.7); and (e) shall incur no liability under or in respect of
this agreement by acting in accordance with this agreement upon any notice,
consent, certificate or other instrument or writing (which may be by telegram,
cable or telex) believed by it to be
51
genuine and signed or sent by the proper party or parties. Administrative Agent
shall not be compelled to do any act or to take any action toward the execution
or enforcement of the powers hereby created, or to prosecute or defend any suit
in respect hereof, unless indemnified to its satisfaction against any and all
loss, cost, liability, and expense it may incur. Subject to the foregoing
limitations and to any direction of the Determining Lenders to take action in
accordance with Section 10, Administrative Agent shall perform the duties
imposed upon it under this agreement with respect to the Collateral with the
same amount of diligence and using the same amount of judgment and discretion as
if Administrative Agent were acting solely for its own account, and, in
connection therewith, Administrative Agent is hereby authorized (a) to settle,
compromise, and release claims against the makers of, and any Person obligated
with respect to, any Collateral, (b) to foreclose on, and enforce security
interests in, any Collateral or property secured thereby, (c) to sell Collateral
and property acquired as the result of foreclosure under this agreement and the
Security Documents, and (d) to do all other acts and things as Administrative
Agent, in its sole discretion, may deem necessary or appropriate to protect the
Rights and interests of itself and the Lenders and to realize the benefits of
the Collateral.
11.3 Administrative Agent and Affiliates. With respect to its Commitment,
Borrowings extended by it and the Notes issued to it, Bank One, Texas, N.A.,
shall have the same Rights under this agreement as any other Lender and may
exercise the same as though it were not Administrative Agent; and the term
"Lender" or "Lenders," unless otherwise expressly indicated, include Bank One,
Texas, N.A., in its individual capacity. Bank One, Texas, N.A., and its
Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, the Companies
or any of their respective Subsidiaries and any Person who may do business with
or own securities of either Company or any such Subsidiary, all as if Bank One,
Texas, N.A., were not Administrative Agent and without any duty to account
therefor to Lenders. Each Lender and its Affiliates may accept deposits from,
lend money to, act as trustee under indentures of, and generally engage in any
kind of business with, the Companies or any of their respective Subsidiaries and
any Person who may do business with or own securities of either Company or any
such Subsidiary, all as if each Lender were not a Lender under this agreement
and without any duty to account therefor to any other Lender.
11.4 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Administrative Agent or any other Lender
and based on the Financials referred to in Section 6.6 and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this agreement. Each Lender also acknowledges that it
will, independently and without reliance upon Administrative Agent or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this agreement.
11.5 Indemnification. LENDERS AGREE TO INDEMNIFY AGENT SEVERALLY AND NOT
JOINTLY (TO THE EXTENT NOT REIMBURSED BY THE COMPANIES), RATABLY ACCORDING TO
THEIR TERMINATION PERCENTAGES (OR IF NO OBLIGATION IS AT THE TIME OUTSTANDING,
RATABLY ACCORDING TO THEIR RESPECTIVE COMMITMENT PERCENTAGE), FROM AND AGAINST
ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY OR NATURE WHATSOEVER
WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST AGENT IN ANY WAY
RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY ACTION TAKEN OR OMITTED BY
AGENT UNDER THIS AGREEMENT, PROVIDED THAT NO LENDER SHALL BE LIABLE FOR ANY
PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS RESULTING FROM AGENT'S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT (OR, WITH RESPECT TO AGENT'S DUTIES AS
CUSTODIAN, SUCH LIABILITIES, OBLIGATIONS, LOSSES,
52
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS
RESULTING FROM CUSTODIAN'S NEGLIGENCE OR WILLFUL MISCONDUCT). WITHOUT LIMITATION
OF THE FOREGOING, EACH LENDER AGREES TO REIMBURSE AGENT PROMPTLY UPON DEMAND ITS
RATABLE SHARE OF ANY OUT-OF-POCKET EXPENSES (INCLUDING COUNSEL FEES) INCURRED BY
AGENT IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION,
MODIFICATION, AMENDMENT OR ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL
PROCEEDINGS OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR
RESPONSIBILITIES UNDER, THIS AGREEMENT, TO THE EXTENT THAT AGENT IS NOT
REIMBURSED FOR SUCH EXPENSES BY THE COMPANIES. AFTER SUCH AMOUNTS HAVE BEEN
IMPOSED UPON OR INCURRED BY ANY LENDER, SUCH AMOUNTS SHALL BE PAYABLE BY THE
COMPANIES UPON DEMAND AND SHALL BEAR INTEREST, FROM THE DATE OF DEMAND UNTIL
PAID, AT A FLUCTUATING INTEREST RATE PER ANNUM EQUAL FOR EACH DAY DURING SUCH
PERIOD TO THE DEFAULT RATE. IF ANY OR ALL OF THE INDEMNIFIED FUNDS PAID BY
LENDERS TO AGENT ARE SUBSEQUENTLY RECOVERED BY AGENT FROM SOME SOURCE OTHER THAN
LENDERS, THEN AGENT SHALL DISTRIBUTE THE RECOVERED FUNDS TO EACH LENDER IN
ACCORDANCE WITH THE PROPORTION THAT ALL SUCH PAYMENTS BY IT TO AGENT BEAR TO ALL
SUCH PAYMENTS BY ALL LENDERS TO AGENT.
11.6 Successor Administrative Agent. Administrative Agent may resign at any
time by giving written notice to Lenders and the Companies and may be removed at
any time with or without cause by Determining Lenders other than Administrative
Agent. Any resignation of Administrative Agent will become effective upon the
appointment of a successor. Upon any such resignation or removal, Determining
Lenders shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by Lenders, and
shall have accepted that appointment, within 30 days after the retiring
Administrative Agent's giving of notice of resignation or Lenders' removal of
the retiring Administrative Agent, then the retiring Administrative Agent may,
on behalf of Lenders, appoint a successor Administrative Agent, which shall be a
commercial or savings bank organized under the laws of the United States of
America or of any of its states and having a combined capital and surplus of at
least $250,000,000. No resignation or removal of Administrative Agent shall
become effective until a successor Administrative Agent is appointed pursuant to
the provisions of, and has accepted the appointment as provided in, this Section
11.6. Any successor Administrative Agent appointed as provided in this Section
11.6 shall execute and deliver to the Companies and their predecessor
Administrative Agent an instrument accepting such appointment, and thereupon the
resignation or removal of the predecessor Administrative Agent shall become
effective and that successor Administrative Agent, without any further act, deed
or conveyance, shall become vested with all the Rights and obligations of its
predecessor under this agreement, with like effect as if originally named as
Administrative Agent; but, nevertheless, on the written request of either
Company or of the successor Administrative Agent, the Administrative Agent
ceasing to act shall execute and deliver an instrument transferring to that
successor Administrative Agent all the Rights of Administrative Agent so ceasing
to act and shall execute and deliver to that successor Administrative Agent such
instruments as are necessary (including assignments of all Collateral and
Security Documents) to transfer the Collateral to that successor Administrative
Agent. Upon request of any successor Administrative Agent, the Companies shall
execute any and all instruments in writing for more fully and certainly vesting
in and confirming to that successor Administrative Agent all such Rights. No
successor Administrative Agent shall accept appointment as provided in this
section unless at the time of such acceptance that successor Administrative
Agent shall be eligible under the provisions of this Section 11.6. Any Person
into which Administrative Agent may be merged or converted or with which it may
be consolidated, or any Person surviving or resulting from any merger,
conversion, or consolidation to which Administrative Agent shall be a party, or
any Person succeeding to the corporate trust business of Administrative Agent,
shall be the successor Administrative Agent under this agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. After any retiring Administrative Agent's resignation or removal
as Administrative
53
Agent, the provisions of this Section 11 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent
under this agreement.
11.7 Administrative Agent as Custodian. Each Lender hereby appoints
Administrative Agent to act as custodian to take such action as custodian on its
behalf and to exercise such powers under this agreement as are delegated to the
custodian by the terms hereof, together with such powers as are reasonably
incidental thereto. Custodian's duties hereunder shall include (a) review of the
Collateral delivered to custodian and verification that such Collateral meets
the definitional requirements for such Collateral set forth in this agreement
and that such Collateral meets the requirements of Schedules 4.3 and 4.4, (b)
storage of such Collateral in an area standard in the industry or other area as
requested Lenders, (c) determination of the Market Value of such Collateral on a
daily basis, (d) preparation of periodic reports whenever required by any Lender
regarding the status of such Collateral, (e) release of such Collateral in
accordance with the terms of Section 4.8 or Section 4.9, and (f) such other
duties as may be imposed upon Administrative Agent under this agreement. Neither
Administrative Agent acting in its capacity as custodian nor any of its
Representatives shall be liable for any action taken or omitted to be taken by
it or them under or in connection with this agreement, except for its or their
own negligence or willful misconduct. Custodian shall incur no liability under
or in respect of this agreement by acting in accordance with this agreement upon
any notice, consent, certificate or other instrument or writing (which may be by
telegram, cable or telex) believed by it to be genuine and signed or sent by the
proper party or parties.
11.8 Documentation Agent. No Lender named as "Documentation Agent" on the
cover page of this agreement assumes any responsibility or obligation under this
agreement for syndication, servicing, enforcement, or collection of any of the
Obligation, nor any other duties, as an agent for Lenders.
SECTION 12 MISCELLANEOUS
12.1 Nonbusiness Days. Any action that is due under any Loan Document on a
non-Business Day may be delayed until the next Business Day. However, interest
accrues on any payment until it is made.
12.2 Communications. Unless otherwise stated, a communication under any
Loan Document to a party to this agreement must be written to be effective and
is deemed given:
o For Credit Requests, Conversion Requests, notice of results of
Competitive-Bid Acceptances, and Collateral Delivery-Notices, only
when actually received by Administrative Agent.
o For a Competitive-bid Acceptance, only when actually received by the
applicable Lender.
o Otherwise, if by fax, when transmitted to the appropriate person and
fax number, but, without affecting the date deemed given, the fax
must be promptly confirmed by telephone.
o Otherwise, if by mail, on the third Business Day after enclosed in a
properly addressed, stamped, and sealed envelope deposited in the
appropriate official postal service.
o Otherwise, when actually delivered.
54
Until changed by notice, the address and fax number are stated for (a) the
Companies and Administrative Agent, beside their names on the signature pages
below, and (b) each Lender, beside its name on Schedule 2.1.
12.3 Form and Number of Documents. The form, substance, and number of
counterparts of each writing to be furnished under the Loan Documents must be
satisfactory to Administrative Agent and its counsel.
12.4 Exceptions to Covenants. An exception to any Loan Document covenant
does not permit violation of any other Loan Document covenant.
12.5 Survival. All Loan Document provisions survive all closings and are
not affected by any investigation made by any party.
12.6 Governing Legal Requirement. Unless otherwise stated, each Loan
Document must be construed, and its performance enforced, under the Legal
Requirements of the State of Texas and the United States of America.
12.7 Invalid Provisions. If any provision of a Loan Document is judicially
determined to be unenforceable, all other provisions of it remain enforceable.
If the provision determined to be unenforceable is a material part of that Loan
Document, then, to the extent lawful, it shall be replaced by a
judicially-construed provision that is enforceable but otherwise as similar in
substance and content to the original provision as the context of it reasonably
allows.
12.8 Conflicts Between Loan Documents. The provisions of this agreement
control if in conflict (i.e., the provisions contradict each other as opposed to
a Loan Document containing additional provisions not in conflict) with the
provisions of any other Loan Document.
12.9 VENUE AND SERVICE OF PROCESS. EACH COMPANY (A) IRREVOCABLY SUBMITS TO
THE NONEXCLUSIVE JURISDICTION OF TEXAS STATE AND FEDERAL COURTS, (B) IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR
IN THE FUTURE HAVE TO THE LAYING OF VENUE OF ANY LITIGATION BROUGHT IN
CONNECTION WITH ANY LOAN DOCUMENT OR THE OBLIGATION BROUGHT IN DISTRICT COURTS
OF DALLAS COUNTY, TEXAS, OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS, DALLAS DIVISION, (C) IRREVOCABLY WAIVES ANY CLAIMS THAT ANY
LITIGATION BROUGHT IN ANY OF THOSE COURTS HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM, (D) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THOSE
COURTS IN ANY LITIGATION BY THE MAILING OF COPIES THEREOF BY CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, POSTAGE PREPAID, BY HAND-DELIVERY, OR BY DELIVERY BY A
NATIONALLY RECOGNIZED COURIER SERVICE, AND SERVICE IS DEEMED COMPLETE UPON
DELIVERY OF THE LEGAL PROCESS AT ITS ADDRESS IN THIS AGREEMENT, AND (E)
IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING AGAINST ANY PARTY TO ANY LOAN
DOCUMENT ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE
OBLIGATION MAY BE BROUGHT IN ONE OF THOSE COURTS. THE SCOPE OF EACH OF THESE
WAIVERS IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THESE WAIVERS ARE A
MATERIAL INDUCEMENT TO THE AGREEMENT BY ADMINISTRATIVE AGENT AND EACH LENDER TO
ENTER INTO THIS AGREEMENT, AND
55
THEY HAVE EACH RELIED, AND MAY CONTINUE TO RELY, ON THESE WAIVERS IN ITS
DEALINGS WITH THE COMPANIES. EACH COMPANY REPRESENTS AND WARRANTS THAT IT HAS
REVIEWED THESE WAIVERS WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND
VOLUNTARILY AGREES TO EACH WAIVER FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
THESE WAIVERS ARE IRREVOCABLE, MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND APPLY TO ANY RENEWALS, EXTENSIONS, AMENDMENTS, AND REPLACEMENTS OF ANY LOAN
DOCUMENT.
12.10 Discharge and Certain Reinstatement. The Companies' obligations under
the Loan Documents remain in full force and effect until no Lender has any
commitment to extend credit under the Loan Documents and the Obligation is fully
paid (except for provisions under the Loan Documents which by their terms
expressly survive payment of the Obligation and termination of the Loan
Documents). If any payment under any Loan Document is ever rescinded or must be
restored or returned for any reason, then all Rights and obligations under the
Loan Documents in respect of that payment are automatically reinstated as though
the payment had not been made when due.
12.11 Amendments, Consents, Conflicts, and Waivers. An amendment of, or an
approval, consent, or waiver by Administrative Agent or by one or more Lenders
under, any Loan Document must be in writing and must be:
(a) Executed by the Companies and Administrative Agent if it
purports to reduce or increase any fees payable to Administrative Agent by
the Companies.
(b) Executed by the Companies and Administrative Agent and executed
or approved in writing by all Lenders if action of all Lenders is
specifically provided in any Loan Document or if it purports to (i) except
as otherwise stated in this Section 12.11, extend the due date or decrease
the scheduled amount of any payment under, or reduce the rate or amount of
interest, fees, or other amounts payable to Administrative Agent or any
Lender under, any Loan Document, (ii) change the definition of Borrowing
Base (or any component of it), Commitment Percentage, Determining Lenders,
Eligible Collateral (or any component of it), Market Value,
Stated-Termination Date, or Termination Percentage, (iii) partially or
fully release any guaranty or any Collateral except releases of Collateral
contemplated in this agreement, or (iv) change or waive compliance with
Sections 3.2, 3.5, 3.6, 4.3, 4.8, 4.9, 5, 9, 10.1, 10.2, 10.9, 10.10,
12.1, or 12.11.
(c) Otherwise (i) for this agreement, executed by the Companies,
Administrative Agent, and Determining Lenders, or (ii) for other Loan
Documents, approved in writing by Determining Lenders and executed by the
Companies, Administrative Agent, and any other party to that Loan
Document.
Amendments shall be in a form acceptable to the Companies and Administrative
Agent. No course of dealing or any failure or delay by Administrative Agent, any
Lender, or any of their respective Representatives with respect to exercising
any Right of Administrative Agent or any Lender under the Loan Documents
operates as a waiver of that Right. An approval, consent, or waiver is only
effective for the specific instance and purpose for which it is given. The Loan
Documents may only be supplemented by agreements, documents, and instruments
delivered according to their respective express terms.
12.12 Multiple Counterparts. Any Loan Document may be executed in any
number of counterparts with the same effect as if all signatories had signed the
same document, and all of those
56
counterparts must be construed together to constitute the same document. This
agreement is effective when counterparts of it have been executed and delivered
to Administrative Agent by each Lender, Administrative Agent, and the Companies,
or, in the case only of those Lenders, when Administrative Agent has received
faxed or other evidence satisfactory to it that each Lender has executed and is
delivering to Administrative Agent a counterpart of it.
12.13 Parties. This agreement binds and inures to the Companies, each
Lender, Administrative Agent, and their respective successors and permitted
assigns. Only those Persons may rely upon or raise any defense about this
agreement.
(a) Assignment by Companies. No Company may assign any Rights or
obligations under any Loan Document without first obtaining the written
consent of Administrative Agent and all Lenders.
(b) Assignment by Lender. Any Lender may assign, pledge, and
otherwise transfer all or any of its Rights and obligations under the Loan
Documents either (i) to a Federal Reserve Bank without the consent of any
party to this agreement so long as that Lender is not released from its
obligations under the Loan Documents, or (ii) otherwise in the ordinary
course of its lending business, in accordance with all Legal Requirements,
and in accordance with Sections 12.14 and 12.15 so long as (A) at least
51% of each Lender's original Commitment remains collectively held by it
or its Affiliates not subject to any participating interests or assigned
interests, (B) except for assignments, pledges, and other transfers by a
Lender to its Affiliates, the written consent of the Companies and
Administrative Agent, which may not be unreasonably withheld, must be
first obtained, (C) the assignment or transfer (other than a pledge) does
not involve a purchase price that directly or indirectly reflects a
discount from face value unless that Lender first offered that assignment
or transfer to the other Lenders on ratable basis according to their
Commitment Percentages, (D) neither the Companies nor Administrative Agent
are required to incur any cost or expense incident to any assignment,
pledge, or other transfer by any Lender, all of which are for the account
of the assigning, pledging, or transferring Lender and its assignee,
pledgee, or transferee as they may agree, and (E) if the Participant or
Purchaser is organized under the Legal Requirements of any jurisdiction
other than the United States of America or any of its states, it complies
with Section 3.17.
(c) Otherwise Void. Any purported assignment, pledge, or other
transfer in violation of this section is void from beginning and not
effective.
12.14 Participations. Subject to Section 12.13(b) and this section, a
Lender may at any time sell to one or more Persons (each a "Participant")
participating interests in its Commitment and its share of the Obligation.
(a) Additional Conditions. For each participation (i) the selling
Lender must remain, and the Participant may not become, a "Lender" under
this agreement, (ii) the selling Lender's obligations under the Loan
Documents must remain unchanged, (iii) the selling Lender must remain
solely responsible for the performance of those obligations, (iv) the
selling Lender must remain the holder of its one or more Notes and its
share of the Obligation for all purposes under the Loan Documents, and (v)
the Companies and Administrative Agent may continue to deal solely and
directly with the selling Lender in connection with those Rights and
obligations.
57
(b) Participant Rights. The selling Lender may obtain for each of
its Participants the benefits of the Loan Documents related to
participations in its share of the Obligation, but Associates is never
obligated to pay any greater amount that would be due to the selling
Lender under the Loan Documents calculated as though no participation had
been made. Otherwise, Participants have no Rights under the Loan Documents
except certain permitted voting Rights described below.
(c) Participation Agreements. An agreement for a participating
interest (i) may only provide to a Participant voting Rights in respect of
any amendment of or approval, consent, or waiver under any Loan Document
related to the matters in Section 12.11(c)(i) and (iii) if it also
provides for a voting mechanism that a majority of that Lender's
Commitment Percentage or Termination Percentage, as the case may be
(whether directly held by that Lender or participated) controls the vote
for that Lender, and (ii) may not permit a Participant to assign, pledge,
or otherwise transfer its participating interest in the Obligation to any
Person except any Lender or its Affiliates.
12.15 Transfers. Subject to Section 12.13(b) and this section and only if
no Default exists, a Lender may at any time sell to one or more financial
institutions (each a "Purchaser") up to 49% of its Rights and obligations under
the Loan Documents.
(a) Additional Conditions. The sale (i) may not involve less than
$15,000,000 of a Lender's Commitment, (ii) must be accomplished by the
selling Lender and Purchaser executing and delivering to Administrative
Agent and the Companies an Assignment, and (iii) may not occur until the
selling Lender pays to Administrative Agent an administrative-transfer fee
of $2,500.
(b) Procedures. Upon satisfaction of the foregoing conditions and as
of the Effective Date in the Assignment, which may not be before delivery
of the Assignment to Administrative Agent and the Companies, then (i) a
Purchaser is for all purposes a Lender party to, with all the Rights and
obligations of a Lender under, this agreement, with a Commitment as stated
in the Assignment, (ii) the selling Lender is released from its
obligations under the Loan Documents to a corresponding extent, (iii)
Schedule 2.2 is automatically deemed to reflect the name, address, and
Commitment of the Purchaser and the reduced Commitment of the selling
Lender, and Administrative Agent shall deliver to the Companies and
Lenders an amended Schedule 2.2 reflecting those changes, (iv) the
Companies shall execute and deliver to each of the selling Lender and the
Purchaser an Associates Note and a ▇▇▇▇▇▇ Note, each based upon their
respective Commitments following the transfer, (v) upon delivery of the
one or more Notes under clause (iv) above, the selling Lender shall return
to the appropriate Company all Notes previously delivered to it under this
agreement, and (vi) the Purchaser is subject to all the provisions in the
Loan Documents, the same as if it were a Lender that executed this
agreement on its original date.
12.16 Existing-Loan Agreement and Entireties.
(a) Existing-Loan Agreement. This agreement entirely amends and
restates the Existing-Loan Agreement, and the Companies, Administrative
Agent, and each Lender that is party to the Existing-Loan Agreement agree
that, effective as of the Closing Date, the obligation to extend any
credit under the Existing-Loan Agreement is terminated. However, any
commitment or other fees paid to those lenders for periods through June 2,
1999, are earned and are not reimbursable to either Company.
58
(b) Entire Agreement. THE LOAN DOCUMENTS AND INTERCOMPANY NOTE
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES FOLLOW.
59
EXECUTED as of the date first stated in this Restated Loan and Security
Agreement.
Associates Mortgage Funding ASSOCIATES MORTGAGE FUNDING
Corporation CORPORATION, as Associates
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇, Treasurer
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Mortgage Company ▇▇▇▇▇▇ MORTGAGE COMPANY, as ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇, Treasurer
Bank One, Texas, N.A. BANK ONE, TEXAS, N.A., a Lender and
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice
President By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice
President
NATIONSBANK, N.A., a Lender and PNC BANK, NATIONAL ASSOCIATION, a
Documentation Agent Lender and a Co-Agent
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Vice ▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
President
Page 1 of 2 Signature Pages
GUARANTY FEDERAL BANK, F.S.B., a CHASE BANK OF TEXAS, NATIONAL
Lender and a Co-Agent ASSOCIATION, a Lender
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Vice
Vice President President
COMERICA BANK, a Lender FMB BANK, a Lender
By /s/ N. ▇▇▇▇▇▇ ▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
N. ▇▇▇▇▇▇ ▇▇▇▇▇, Vice ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇,
President Vice President
U.S. BANK NATIONAL ASSOCIATION, FIRST UNION NATIONAL BANK, a Lender
a Lender
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice
President President
SUNTRUST BANK, ATLANTA, a Lender
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. Vice
President
Page 2 of 2 Signature Pages
SCHEDULE 2.1
LENDERS AND COMMITMENTS
--------------------------------- ------------ ----------
Name of Lender Commitment Commitment
Percentage
--------------------------------- ------------ ----------
--------------------------------- ------------ ----------
Bank One, Texas, N.A. $35,000,000 17.50%
Mortgage Finance Group
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice
President
Fed Tax ID No. ▇▇-▇▇▇▇▇▇▇
Tel (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------- ------------ ----------
--------------------------------- ------------ ----------
NationsBank, N.A. $35,000,000 17.50%
Mortgage Banking Finance Group
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇ # ▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇, Vice
President
Fed Tax ID No. ▇▇-▇▇▇▇▇▇▇
Tel (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------- ------------ ----------
--------------------------------- ------------ ----------
Guaranty Federal Bank, F.S.B. $25,000,000 12.50%
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Loan
Officer
Fed Tax ID No. ▇▇-▇▇▇▇▇▇▇
Tel (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------- ------------ ----------
--------------------------------- ------------ ----------
PNC Bank, National Association $25,000,000 12.50%
Warehouse Lending
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Fed Tax ID No. ▇▇▇▇▇▇▇▇▇
Tel (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------- ------------ ----------
--------------------------------- ------------ ----------
Comerica Bank $15,000,000 7.50%
One Detroit Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇, Vice President
Tel (▇▇▇)▇▇▇-▇▇▇▇
Fax (▇▇▇)▇▇▇-▇▇▇▇
--------------------------------- ------------ ----------
--------------------------------- ------------ ----------
First Union National Bank $15,000,000 7.50%
Capital Markets
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice
President
Fed Tax ID No. ▇▇-▇▇▇▇▇▇▇
Tel (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------- ------------ ----------
--------------------------------- ------------ ----------
SunTrust Bank, Atlanta $15,000,000 7.50%
Mail Code 120, 24th Floor
▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇, Vice President
Fed Tax ID No. ▇▇▇▇▇▇▇▇▇
Tel (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------- ------------ ----------
--------------------------------- ------------ ----------
U.S. Bank National Association $15,000,000 7.50%
Mortgage Banking Services
First Bank Place/MPFP0801
▇▇▇ ▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice
President
Fed Tax ID No. ▇▇-▇▇▇▇▇▇▇
Tel (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
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Chase Bank of Texas, National $10,000,000 5.00%
Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice
President
Fed Tax ID No. ▇▇-▇▇▇▇▇▇▇
Tel (▇▇▇)▇▇▇-▇▇▇▇
Fax (▇▇▇)▇▇▇-▇▇▇▇
--------------------------------- ------------ ----------
--------------------------------- ------------ ----------
FMB Bank $10,000,000 5.00%
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Code 101-744
Corporate Banking Division,
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Vice
President
Fed Tax ID No. ▇▇▇▇▇▇▇▇▇
Tel (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------- ------------ ----------
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Total $200,000,000 100%
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2
SCHEDULE 2.2
WIRING INSTRUCTIONS
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Party Location of ABA# Account No. Attention/Phone No. Reference
Account
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Associates Mortgage Funding First Omni ▇▇▇▇-▇▇▇▇-▇ 35303175 ▇▇ ▇▇▇▇ (410) Paydown
Corporation 715-7080
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▇▇▇▇▇▇ Mortgage Company
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Bank One, Texas, N.A. Bank One, ▇▇▇▇▇▇▇▇▇ 0100073055 ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Mtg.
Dallas (▇▇▇)▇▇▇-▇▇▇▇
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Comerica Bank Detroit, 07000096 ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Mtg.
Michigan
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U.S. Bank National U.S. Bank, ▇▇▇▇▇▇▇▇▇ 1702-2508-7585 ▇▇▇▇▇ Greenbush Asso/▇▇▇▇▇▇
Association Minn. (▇▇▇)▇▇▇-▇▇▇▇
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FMB Bank Baltimore, ▇▇▇▇▇▇▇▇▇ 0101-06-55-013 Loan Services Associates
Maryland Mtg
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First Union National Bank First Union, ▇▇▇▇▇▇▇▇▇ 465906 ▇▇▇▇▇▇▇ Suits ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ 0001800 (▇▇▇)▇▇▇-▇▇▇▇ Mortgage
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Guaranty Federal Bank, F.S.B. Guaranty ▇▇▇▇▇▇▇▇▇ 19406514043 ▇▇▇▇▇ ▇'▇▇▇▇ ▇▇▇▇▇▇ Mtg.
Federal, Dallas (▇▇▇)▇▇▇-▇▇▇▇
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NationsBank, N.A. NationsBank, 111000025 129-200-088-3 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Mtg.
N.A. (▇▇▇)▇▇▇-▇▇▇▇
(▇▇▇)▇▇▇-▇▇▇▇(fax)
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------------------------------ ---------------- ---------- ------------- --------------------- ------------
PNC Bank, National PNC Kentucky, ▇▇▇▇▇▇▇▇▇ 3100002488 Warehouse Lending Associates
Association Louisville Mtg.
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------------------------------ ---------------- ---------- ------------- --------------------- ------------
SunTrust Bank, Atlanta SunTrust, ▇▇▇▇▇▇▇▇▇ 8892170730 ▇▇▇▇▇▇ ▇▇▇▇▇▇ Assoc. Mtg.
Atlanta (▇▇▇)▇▇▇-▇▇▇▇
------------------------------ ---------------- ---------- ------------- --------------------- ------------
------------------------------ ---------------- ---------- ------------- --------------------- ------------
Chase Bank of Texas, Chase Bank, ▇▇▇▇▇▇▇▇▇ 7001136825800 ▇▇▇▇▇▇ ▇▇▇▇▇▇
National Association Houston (▇▇▇)▇▇▇-▇▇▇▇
------------------------------ ---------------- ---------- ------------- --------------------- ------------
SCHEDULE 4.3
COLLATERAL
A. Supplemental Definitions. Unless stated otherwise, the following terms are
in addition to and supplement the terms set forth in Section 1.1 of the
Credit Agreement, and apply to each Loan Document and annexes, exhibits,
and schedules to them and certificates, reports, and other writings
delivered under them.
"Acknowledgment Agreement" means, at any time and as applicable, the
form of Acknowledgment Agreement then required by (a) FHLMC to be executed
as a condition to the creation of a security interest in Servicing Rights
for Mortgage Pools serviced for FHLMC, completed and executed by ▇▇▇▇▇▇,
Administrative Agent, (if necessary) each Lender, and FHLMC, and otherwise
in form reasonably acceptable to Administrative Agent, together with every
supplement to and replacements for that agreement in accordance with the
FHLMC Guide, (b) FNMA to be executed as a condition to the creation of a
security interest in Servicing Rights for Mortgage Pools serviced for
FNMA, completed and executed by ▇▇▇▇▇▇, Administrative Agent, (if
necessary) each Lender, and FNMA, and otherwise in form reasonably
acceptable to Administrative Agent, together with every supplement to and
replacements for that agreement in accordance with the FNMA Guide, or (c)
GNMA to be executed as a condition to the creation of a security interest
in Servicing Rights for Mortgage Pools serviced for GNMA, completed and
executed by ▇▇▇▇▇▇, Administrative Agent, (if necessary) each Lender, and
GNMA, and otherwise in form reasonably acceptable to Administrative Agent,
together with every supplement to and replacements for that agreement in
accordance with the GNMA Guide.
"Approved B-Paper Investor" means (a) FHLMC, FNMA, and GNMA and (b)
any other Person from time to time named on a list agreed to by
Administrative Agent and the Companies, which Administrative Agent shall
furnish to any Lender upon request, as that list may be amended from time
to time (i) by the Companies and Administrative Agent to remove or add
other names as Administrative Agent and the Companies may agree, (ii) by
either Administrative Agent or Determining Lenders to remove any such
other Person after Administrative Agent has or Determining Lenders have
given to the Companies notice of, and an opportunity to discuss, the
proposed removal of that Person, or (iii) automatically, without signing
by any party, to remove any such Person who then (A) is not Solvent, (B)
fails to pay its debts generally as they become due, (C) voluntarily
seeks, consents to, or acquiesces in the benefit of any Debtor Law, or (D)
becomes a party to or is made the subject of any proceeding provided for
by any Debtor Law, other than as a creditor or claimant, that could, in
Administrative Agent's judgment, suspend such Person's ability to acquire
and pay the full purchase price for Mortgage Loans, or otherwise adversely
affect the Rights of either Company, Administrative Agent, or any Lender
in connection with the transactions contemplated in the Loan Documents.
"Approved-Jumbo Investor" means (a) FHLMC, FNMA, and GNMA and (b)
any other Person from time to time named on a list agreed to by
Administrative Agent and the Companies, which Administrative Agent shall
furnish to any Lender upon request, as that list may be amended from time
to time (i) by the Companies and Administrative Agent to remove or add
other names as Administrative Agent and the Companies may agree, (ii) by
either Administrative Agent or Determining Lenders to remove any such
other Person after Administrative Agent has or Determining Lenders have
given to the Companies notice of, and an opportunity to discuss, the
proposed removal of that Person, or (iii) automatically, without signing
by any party, to remove any such Person who then (A) is not Solvent, (B)
fails to pay its debts generally as they become due, (C) voluntarily
seeks, consents to, or acquiesces in the benefit of any Debtor Law, or (D)
becomes a party to or is made the subject of any proceeding provided for
by any Debtor Law, other than as a creditor or claimant, that could
suspend such Person's ability to acquire and pay the full purchase price
for Jumbo Loans or otherwise adversely affect the Rights of either
Company, Administrative Agent, or any Lender in connection with the
transactions contemplated in the Loan Documents.
"Approved PMI" means any private-mortgage insurance company from
time to time named on a list agreed to by Administrative Agent and the
Companies, which Administrative Agent shall furnish to any Lender upon
request, as that list may be amended from time to time (a) by the
Companies and Administrative Agent to remove or add other names as
Administrative Agent and the Companies may agree, (b) by either
Administrative Agent or Determining Lenders to remove any Person on the
list after Administrative Agent has or Determining Lenders have given to
the Companies notice of, and an opportunity to discuss, the proposed
removal of that Person, or (c) automatically, without signing by any
party, to remove any such Person who then (i) is not Solvent, (ii) fails
to pay its debts generally as they become due, (iii) voluntarily seeks,
consents to, or acquiesces in the benefit of any Debtor Law, or (iv)
becomes a party to or is made the subject of any proceeding provided for
by any Debtor Law, other than as a creditor or claimant, that could, in
Administrative Agent's judgment, suspend such Person's ability to insure
Mortgage Loans, or otherwise adversely affect the Rights of either
Company, Administrative Agent, or any Lender in connection with the
transactions contemplated in the Loan Documents.
"ARM Loan" means an adjustable-rate Mortgage Loan, including,
without limitation all of the "products" listed at the end of Schedule
4.3, that is a (a) Conventional Loan that complies with all applicable
requirements for purchase under either the FNMA or FHLMC standard form of
conventional-mortgage-purchase contract, (b) Jumbo Loan, or (c) FHA Loan.
"Conventional Loan" means a Mortgage Loan that is not a FHA Loan or
VA Loan.
"Investment-Mortgage Loan" means a Mortgage Loan that is otherwise
an Eligible Mortgage Loan but for which there is no applicable Take-Out
Commitment.
"Jumbo Loan" means a Mortgage Loan that (a) is not a FHA Loan or VA
Loan and (b) complies with all applicable requirements for purchase (i)
under the FNMA or FHLMC standard form of conventional-mortgage-purchase
contract except that its amount exceeds the maximum-loan amount under
those requirements, or (ii) by an Approved-Jumbo Investor.
"Non-Agency Loan" means a loan that is originated to an Approved
Non-Agency Investor but may not be funded without prior approval from that
investor.
"Permitted-Second Mortgage" means a second-priority mortgage, deed
of trust, or trust deed for which ▇▇▇▇▇▇ holds a valid and enforceable
Take-Out Commitment from an Approved Investor for the related Mortgage
Loan.
2
"Seasoned Loan" means a Mortgage Loan that meets the requirements of
being an Eligible Mortgage Loan except that it is originated to investor
specifications but delivered to Administrative Agent more than 180 days
after the date of the original promissory note.
"Servicing Portfolio" means, at any time, the aggregate unpaid
principal amount of all Mortgage Loans serviced by Debtor for a fee,
excluding any Mortgage Loans serviced by Debtor under a subservicing
agreement or a master servicing agreement.
B. Collateral.
1. From Associates.
(a) The Intercompany Note.
(b) The Warehouse Account and all amounts deposited in it or
represented by it.
(c) Cash and noncash proceeds of any Collateral otherwise
described in clause (a) or clause (b) above.
2. From ▇▇▇▇▇▇.
(a) Mortgage Loans, including, without limitation, all promissory
notes evidencing and all mortgages, deeds of trust, or trust
deeds securing those Mortgage Loans, which from time to time
are either (A) deposited with or held by or for Administrative
Agent under this agreement or (B) identified by ▇▇▇▇▇▇ as
support for a Wet Borrowing.
(b) Mortgage Securities, the Mortgage Pools for which consists of
Mortgage Loans that were Mortgage Loans constituting part of
the Collateral, deposited with or held by or for
Administrative Agent under this agreement or registered by
book-entry in Administrative Agent's name under this
agreement.
(c) Private-mortgage insurance (including, without limitation, all
commitments to issue any such insurance) covering, and all
commitments issued by FHA to insure or issued by VA or GNMA to
guarantee, any Mortgage Loans included in the Collateral.
(d) Guaranties related to Mortgage Securities included in the
Collateral.
(e) Take-Out Commitments held by ▇▇▇▇▇▇ covering any Mortgage
Collateral and all proceeds resulting from the sale of
Mortgage Collateral to investors under Take-Out Commitments.
(f) Security of any kind pledged by a mortgagor for any Mortgage
Collateral.
(g) Casualty insurance assigned to ▇▇▇▇▇▇ in connection with any
Mortgage Loan.
3
(h) In respect of the Servicing Portfolio, all present and future:
o Servicing Rights pertaining in any way to ▇▇▇▇▇▇'▇
Servicing Contracts with FHLMC, FNMA, or GNMA,
together with all present and future sums paid or
payable to ▇▇▇▇▇▇ on account of, or as a result of
the performance of, those Servicing Rights, whether
as compensation for the performance by ▇▇▇▇▇▇,
damages related to any of the foregoing, amounts
payable upon cancellation or termination thereof, or
otherwise;
o Servicing Receivables; provided, however, that any of
▇▇▇▇▇▇'▇ Servicing Portfolio sold within 180 days of
origination shall be deemed automatically released as
Collateral without any further action by the Companies,
Administrative Agent, or any other Lender.
(i) The Working-Capital Account and all amounts deposited in it or
represented by it.
(j) In respect of all of the Collateral otherwise described in
this Part B.2., all present and future:
o Personal property, contract Rights, accounts, and
general intangibles of any kind whatsoever relating to
any of the Collateral otherwise described in this Part
B.2.
o All files, surveys, certificates, correspondence,
appraisals, computer programs, tapes, discs, cards,
accounting records, and other information and data of
▇▇▇▇▇▇ relating to any Collateral otherwise described
in this Part B.2., including, without limitation, all
information, data, programs, tapes, discs, and cards
necessary to administer and service any Mortgage
Loans with respect to which ▇▇▇▇▇▇ has Servicing
Rights in respect of the Servicing Portfolio.
o Cash and noncash proceeds of any of the Collateral
otherwise described in this Part B.2.
C. Eligible Mortgage Loan. A Mortgage Loan:
1. The promissory note evidencing which is (a) payable or endorsed
(without restriction or limitation) to ▇▇▇▇▇▇'▇ order, (b) endorsed
in blank by ▇▇▇▇▇▇, (c) fully funded, and (d) valid and enforceable
without offset, counterclaim, defense, or Right of recission or
avoidance of any kind.
2. For which no default in the payment of principal or interest or any
other default has continued uncured for 60 days, no foreclosure or
other similar proceedings have commenced, and no claim for any
credit, allowance, or adjustment exists.
4
3. For which the underlying residential-real property (a) consists
of land and (1) a one- to four-family dwelling or (2) a
condominium unit that is ready for occupancy, but not (3) a
multi-family dwelling for more than four families or a co-op, (b)
that is, if required by Appraisal Legal Requirements, covered by
an Appraisal, and (c) is insured against loss or damage by fire
and all other hazards normally included in
standard-extended-coverage insurance (including, without
limitation, flood insurance if the property is in a
federally-designated-flood plain) in accordance with the
Collateral Documents for it and ▇▇▇▇▇▇ is named as a loss-payee
for that insurance.
4. For which (except for Investment-Mortgage Loans) ▇▇▇▇▇▇ holds a, and
which conforms in all material respects with all requirements of
that, valid and enforceable Take-Out Commitment.
5. The Collateral Documents for which (a) are first submitted for
inclusion in the applicable Borrowing Base within 30 days after
the date of the related promissory note (other than an ARM Loan
that has been converted to a fixed-interest rate or an
Investment-Mortgage Loan or, subject to the Seasoned-Loan
Sublimit, a Seasoned Loan), (b) in compliance with all Legal
Requirements, and (c) are otherwise in form and substance
acceptable to Administrative Agent in its reasonable judgment.
6. Which has been held by Administrative Agent for Lenders as an
Eligible Mortgage Loan for less than (a) 91 days for any Jumbo Loan
that was originally more than $450,000, (b) 366 days for any
Investment-Mortgage Loan, or (c) 181 days for any other Mortgage
Loan.
7. On the Collateral Documents for which a Lender Lien, but no other
Lien, exists.
8. Which has not been deemed ineligible for inclusion as Eligible
Mortgage Collateral under Sections 4.8(b), 4.8(c), or 4.9.
9. For which, if it supports a Wet Borrowing (a) the Collateral
Documents for it are held by ▇▇▇▇▇▇ for Administrative Agent for a
Wet Borrowing and (b) seven Business Days from the Borrowing Date
for that Wet Borrowing have not elapsed.
D. Eligible Non-Agency Loan. An otherwise Eligible Mortgage Loan except that
it does not comply with all applicable requirements for purchase by FHLMC,
FNMA, or GNMA.
E. Eligible Gestation Collateral. An Eligible Mortgage Loan:
1. For which Administrative Agent has issued its initial certification
for inclusion of that Mortgage Loan in a Mortgage Pool.
2. For which ▇▇▇▇▇▇ has delivered to Administrative Agent a valid and
enforceable Take-Out Commitment that specifically identifies that
Mortgage Loan and is issued by a Person, and is in form and
substance, reasonably acceptable to Administrative Agent.
5
3. Which has been held by Administrative Agent as Eligible Gestation
Collateral for less than 31 days.
F. Eligible Mortgage Security. A Mortgage Security:
1. Which is valid and enforceable without offset, counterclaim,
defense, or Right of recission or avoidance of any kind.
2. Under which no default exists.
3. For which ▇▇▇▇▇▇ holds a, and which conforms in all respects with
all requirements of that, valid and enforceable Take-Out Commitment.
4. The Mortgage Pool for which consists of Mortgage Loans that were,
before the issuance of that Mortgage Security, Eligible Mortgage
Loans constituting part of the Collateral.
5. The Collateral Documents for which have been delivered to
Administrative Agent and are in form and substance acceptable to
Administrative Agent in its reasonable judgment.
6. Which has been held by Administrative Agent for Lenders as an
Eligible Mortgage Security for a time period that, when added to the
longest-time period any Mortgage Loan to which it relates was
included in the Collateral as an Eligible Mortgage Loan, does not
exceed 180 days.
7. On the Collateral Documents for which a Lender Lien, but no other
Lien, exists.
8. Which has not been deemed ineligible for inclusions as Eligible
Mortgage Collateral under Sections 4.8(b), 4.8(c), or 4.9.
G. Eligible Foreclosure Receivables. Every claim by ▇▇▇▇▇▇ in respect of a
Foreclosure Payment:
1. Which claim is against VA under a VA Guaranty or FHA or an Approved
PMI under a FHA or Approved PMI insurance policy that (a) guarantees
or insures payment of all or part of a Mortgage Loan repurchased
with the Foreclosure Payment, (b) is in full force and effect, and
(c) in the case of an Approved PMI insurance policy, has been
approved by Administrative Agent.
2. Which claim does not exceed the amount so guaranteed or insured.
3. Which claim is related to a Mortgage Loan that (a) has been
foreclosed, (b) is not held by ▇▇▇▇▇▇ as "other real estate owned,"
and (c) if the claim is against VA, is in a "bid" status.
4. Which claim has (a) never been included in the Borrowing Base for
Working-Capital supporting any previous Working-Capital Borrowing
and (b) been included in the Borrowing Base for Working-Capital
only for no more than 270 days.
6
5. Which claim (a) is valid, enforceable, liquidated, currently due,
and properly filed with FHA, VA, or an Approved PMI, as the case may
be, (b) is not subject to any reduction or deduction for any setoff,
counterclaim, recoupment, or otherwise, and (c) ▇▇▇▇▇▇ expects in
good faith full cash payment from the sources identified in the
related Collateral Documents.
6. For which all of the Collateral Documents have been timely delivered
to Administrative Agent under this agreement.
7. Which claim and all related Eligible Foreclosure Receivables are
subject to a Lender Lien but no other Liens.
H. Eligible P&I Receivables. Every claim by ▇▇▇▇▇▇ in respect of a P&I
Payment:
1. Which P&I Payment has been, or, with the proceeds of a related
P&I Borrowing is to be, made under a Servicing Contract with
FHLMC, FNMA, GNMA, RTC, or an investor approved (and not
subsequently disapproved) from time to time by Administrative
Agent in writing for such purposes (an "Approved-Receivables
Investor") (a) under which FHLMC, FNMA, GNMA, RTC, or that
Approved-Receivables Investor has agreed to reimburse ▇▇▇▇▇▇ for
all or part of that P&I Payment (to the extent not reimbursed by
the mortgagor under the related Mortgage Loan) and (b) for which,
at any time more than 45 days after the Closing Date, there is in
effect, if applicable, an Acknowledgment Agreement with FHLMC or
FNMA consenting to the Lender Lien in that Servicing Contract and
all Servicing Rights under it.
2. Which claim does not exceed the amount so agreed to be reimbursed.
3. Which P&I Payment was, or is to be, made for a Mortgage Loan that is
current except for the payment of principal and interest due in the
month during and for which the P&I Payment was made or payment of
taxes and insurance and is not otherwise in default or in
foreclosure.
4. Which claim has (a) never been included in the Borrowing Base for
Working-Capital supporting any previous Working-Capital Borrowing
and (b) been included in the Borrowing Base for Working-Capital only
for the month in Item G.3. above and not previously been the
basis for a Working-Capital Borrowing.
5. Which claim has not been included in the Borrowing Base for
Working-Capital for more than 21 days if the claim is not pending
under the Servicing Contract.
6. Which claim (a) is, or promptly upon payment will be, valid,
enforceable, liquidated, currently due, and properly filed with
FHLMC, FNMA, GNMA, RTC, or that Approved-Receivables Investor, as
the case may be, (b) is not subject to any reduction or deduction
for any setoff, counterclaim, recoupment, or otherwise, and (c) the
Companies expect in good faith full cash reimbursement from the
sources identified in the related Collateral Documents.
7
7. For which all of the Collateral Documents have been timely delivered
to Administrative Agent under this agreement.
8. Which claim and all related Eligible P&I Receivables and other
Servicing Rights are subject to a Lender Lien but no other Liens.
I. Eligible T&I Receivables. Every claim by ▇▇▇▇▇▇ in respect of a T&I
Payment:
1. Which T&I Payment has been, or, with the proceeds of a related
T&I Borrowing is to be, made under a Servicing Contract with
FHLMC, FNMA, GNMA, RTC, or an Approved-Receivables Investor (a)
under which FHLMC, FNMA, GNMA, RTC, or that Approved-Receivables
Investor has agreed to reimburse ▇▇▇▇▇▇ for all or part of that
T&I Payment (to the extent not reimbursed by the mortgagor under
the related Mortgage Loan) and (b) for which, at any time more
than 45 days after the Closing Date, there is in effect, if
applicable, an Acknowledgment Agreement with FHLMC or FNMA
consenting to the Lender Lien in that Servicing Contract and all
Servicing Rights under it.
2. Which claim does not exceed the amount so agreed to be reimbursed.
3. Which T&I Payment was made, or is to be, for a Mortgage Loan that is
current except for the payment of taxes and insurance due in the
year during and for which the T&I Payment was made or payment of
principal and interest and is not otherwise in default or in
foreclosure.
4. Which claim has (a) never been included in the Borrowing Base for
Working-Capital supporting any previous Working-Capital Borrowing
and (b) been included in the Borrowing Base for Working-Capital
for no more than 180 days.
5. Which claim (a) is, or promptly upon payment will be, valid,
enforceable, liquidated, currently due, and properly filed with
FHLMC, FNMA, GNMA, RTC, or that Approved-Receivables Investor, as
the case may be, (b) is not subject to any reduction or deduction
for any setoff, counterclaim, recoupment, or otherwise, and (c) the
Companies expect in good faith full cash reimbursement from the
sources identified in the related Collateral Documents.
6. For which all of the Collateral Documents have been timely delivered
to Administrative Agent under this agreement.
7. Which claim and all related Eligible T&I Receivables and other
Servicing Rights are subject to a Lender Lien but no other Liens.
8
SCHEDULE 4.4
BORROWING-BASE CALCULATIONS
A. Borrowing Base for Gestation Collateral means, at any time, 99% of the
prices of all Take-Out Commitments specifically identified for Eligible
Gestation Collateral.
B. Borrowing Base for Non-Agency Collateral means, at any time, 95% of the
least of (a) the total outstanding principal balance of all Eligible
Non-Agency Loans, or (b) the prices of all Take-Out Commitments
specifically identified for Eligible Non-Agency Loans.
C. Borrowing Base for Mortgage Collateral means, at any time, an amount equal
to the sum of:
(i) The Borrowing Base for Eligible Gestation Collateral; plus
(ii) The Borrowing Base for Eligible Non-Agency Collateral; plus
(iii) 99% of the Market Value of all Eligible Mortgage Securities;
plus
(iv) An amount (as reduced by any of the matters listed in Items 1
through 8 below) in respect of all Eligible Mortgage Loans
that are not Eligible Gestation Collateral or Eligible
Non-Agency Collateral equal to the least of:
o 98% of the total outstanding principal balance of those
Eligible Mortgage Loans.
o 98% of the total Market Value of those Eligible
Mortgage Loans.
The amount calculated above in this Part C is further reduced by the following
limitations:
1. Wet Sublimit. No more than 30% of the total Commitments may be
included for Mortgage Loans supporting Wet Borrowings, and nothing
may be included for any Mortgage Loan supporting a Wet Borrowing
seven Business Days after its Borrowing Date.
2. Gestation Sublimit. No more than 50% of the total Commitments may be
included for all Gestation Collateral.
3. Jumbo Sublimit. No more than 30% of the total Commitments may be
included for all Jumbo Loans, and no more than $5,000,000 may be
included for all Jumbo Loans that each were originally more than
$450,000.
4. Non-Agency Sublimit. No more than 10% of the total Commitments may
be included for all Non-Agency Loans.
5. Investment-Mortgage Sublimit. No more than (a) 3% of the total
Commitments may be included for all Investment-Mortgage Loans and
(b) 75% of the lesser of either the total outstanding principal
balance or the Market Value of any Investment-Mortgage Loan may be
included.
6. ARM Sublimit. No more than $10,000,000 may be included for ARM Loans
that have been converted to fixed-interest rates.
7. Second-Mortgage Sublimit. No more than 8% of the Total
Commitments may be included for Mortgage Loans secured by
Permitted-Second Mortgages.
8. Seasoned Loan Sublimit. No more than (a) 3% of the Total Commitments
may be included for all Seasoned Loans and (b) 95% of the least of
either the total outstanding principal balance of those Seasoned
Loans or the prices of all Take-Out Commitments specifically
identified for those Seasoned Loans.
D. Borrowing Base for Working Capital means, at any time:
1. The sum of 90% of all Eligible P&I Receivables plus 80% of all
Eligible T&I Receivables plus 80% of all Eligible Foreclosure
Receivables.
The amount calculated above in this Part D is further reduced by the following:
2. Working Capital Sublimit. The Borrowing Base for Working Capital may
not exceed $5,000,000.
2
SCHEDULE 4.5
COLLATERAL PROCEDURES
A. Mortgage Loan for Dry Borrowing. Delivery of a Mortgage Loan to support a
Dry Borrowing requires delivery to Administrative Agent of the following
Collateral Documents, each of which must be in form and substance
satisfactory to Administrative Agent, in the following manner:
1. A Collateral-Delivery Notice that, among other things, identifies
the documents being delivered to Lender for that Dry Borrowing.
2. The original promissory note evidencing the Mortgage Loan, properly
payable or endorsed to ▇▇▇▇▇▇, and endorsed in blank by ▇▇▇▇▇▇.
3. Assignment from ▇▇▇▇▇▇ of the mortgage, deed of trust, or trust deed
securing the Mortgage Loan, executed in blank by ▇▇▇▇▇▇, and in
recordable form.
4. Certified copy of each intervening assignment to ▇▇▇▇▇▇ of that
mortgage, deed of trust, or trust deed sent for recording and copies
of all previous-intervening assignments.
5. Certified copy of that original mortgage, deed of trust, or trust
deed sent for recording in the jurisdiction where the property is
located.
6. Take-Out Commitments with the take-out price indicated (unless a
master Take-Out Commitment has already been delivered to and is on
file with Administrative Agent and Administrative Agent is already
holding the related Mortgage Loan).
7. Either copy of the check evidencing or confirmation of the wire
transfer for the origination of the Mortgage Loan.
8. A data-processing print-out reflecting for that Mortgage Loan's loan
number, mortgagor, date originated, original amount,
outstanding-principal balance, interest rate, and type of loan
(according to the loan codes at the end of this schedule).
9. Any and all other files, documents, instruments, certificates,
correspondence, or other records that are (a) requested by
Administrative Agent and (b) deemed by Administrative Agent in its
sole judgment to be necessary, appropriate, or desirable.
B. Mortgage Loan for Wet Borrowing. Delivery of a Mortgage Loan to support a
Wet Borrowing requires delivery to Administrative Agent of the following
Collateral Documents, each of which must be in form and substance
satisfactory to Administrative Agent, in the following manner:
1. A Collateral-Delivery Notice that, among other things, identifies
the documents that must be delivered to Administrative Agent within
seven Business Days after the Borrowing Date for that Wet Borrowing.
2. Either copy of the check evidencing or confirmation of the wire
transfer for the origination of the Mortgage Loan.
3. A data-processing print-out reflecting for that Mortgage Loan's loan
number, mortgagor, mortgage date, original amount,
outstanding-principal balance, interest rate, and type of loan
(according to the loan codes at the end of this schedule).
C. Mortgage Security for Dry Borrowing. Delivery of a Mortgage Security to
support a Dry Borrowing requires delivery to Administrative Agent of the
following Collateral Documents, each of which must be in form and
substance satisfactory to Administrative Agent, in the following manner:
1. A Collateral-Delivery Notice that, among other things, identifies
the documents being delivered to Lender for that Dry Borrowing.
2. For a Mortgage Security that is not in book-entry form:
(a) The original Mortgage Security.
(b) A bond power endorsed, or another appropriate instrument of
assignment executed, by ▇▇▇▇▇▇ in blank.
3. For a Mortgage Security that is in book-entry form, confirmation of
either:
(a) The appropriate entry (i) in records of a Federal Reserve
Bank of the nominal ownership by Administrative Agent (on
behalf of Lenders) of any FNMA Mortgage Security that
constitutes a "FNMA BookEntry Security," as defined in the
Book-Entry Procedure for FNMA Securities, 24 ▇.▇.▇▇▇.▇▇.
81.41-81.49 (the "FNMA Book-Entry Procedures"), or a FHLMC
Mortgage Security that constitutes a "FHLMC BookEntry
Security," as defined in the Federal Home Loan Mortgage
Corporation Book-Entry Regulations, 1 C.F.R.ss.ss.462.1-462.8
(the "FHLMC Book-Entry Regulations"), and (ii) by
Administrative Agent in its records of ▇▇▇▇▇▇'▇ ownership
of that book-entry Mortgage Security subject to a Lender
Lien; or
(b) The (i) appropriate entry by Chemical Bank, in its capacity
as custodian for Participants Trust Company ("PTC"), GNMA's
central depository, in its records of the nominal ownership
by Administrative Agent (on behalf of Lenders) of any
GNMA-guaranteed Mortgage Security, (ii) the appropriate
entry by Administrative Agent in its records of ▇▇▇▇▇▇'▇
ownership of that book-entry Mortgage Security subject to a
Lender Lien, and (iii) receipt by Administrative Agent of a
confirmation of transaction in the form of a written advice
specifying the amount and description of that book-entry
Mortgage Security subject to that Lien.
D. Servicing Receivable for Working-Capital Borrowing. A Servicing Receivable
to support a Working-Capital Borrowing requires (1) delivery to
Administrative Agent of a Collateral-Delivery Notice that, among other
things, identifies Servicing Receivables that support the particular
2
Working-Capital Borrowing, and (2) for a Working-Capital Borrowing, a copy
of the claim for each Eligible Foreclosure Receivable that supports it
that has been filed with FHA, VA, or an Approved PMI.
MORTGAGE-TYPE PRODUCT CODES
FOR LOANS WAREHOUSED AT BANK ONE, TEXAS, N.A.
---------------- --------- ----- ---------- ===================================
Product # Investor Term Product Description
# Name
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
661 915 360 CCA6M0L Conv. Conf. 6 MO ARM Libor
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
n/a n/a n/a CCARM11 Conv. Conf. 1 YR ARM 11th District
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
600 913 360 CCARM1T Conv. Conf. 1 YR ARM T-Security
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
630/631 913/914 360 CCARM3T Conv. Conf. 3 YR ARM T-Security
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
601 913 360 CCA3/1T Conv. Conf. 3/1 YR ARM T-Security
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
425 914 360 CCBAL5 Conv. Conf. 5 YR Balloon
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
330/430 913/914 360 CCBAL7 Conv. Conf. 7 YR Balloon
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
301 913/914 180 CCFIX15 Conv. Conf. 15 YR Fixed
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
300 913/914 240 CCFIX20 Conv. Conf. 20 YR Fixed
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
300 913/914 360 CCFIX30 Conv. Conf. 30 YR Fixed
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
350 913 360 CC2ST5 Conv. Conf. 5 YR Two Step
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
370 913 360 CC2ST7 Conv. Conf. 7 YR Two Step
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
n/a n/a 180 CCOTH15 Conv. Conf. Other 15 YR Fixed
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
n/a n/a 360 CCOTH30 Conv. Conf. Other 30 YR Fixed
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
660/662/664/665 915 360 CNA6MOL Conv. Non-Conforming 6 MO ARM
Libor
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
n/a n/a n/a CNARM1L Conv. Non-Conforming 1 YR ARM
Libor
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
641/671 955 360 CNARM1T Conv. Non-Conforming 1 YR ARM
T-Security
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
653 915 360 CNA3/1 Conv. Non-Conforming 3/1 YR ARM
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
651 915 360 CNA5/1 Conv. Non-Conforming 5/1 YR ARM
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
681 955 360 CNA10/1 Conv. Non-Conforming 10/1 YR ARM
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
645 955 360 CN2ST5 Conv. Non-Conforming 5 YR "Two
Step" /5-25
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
647 955 360 CN2ST7 Conv. Non-Conforming 7 YR "Two
Step" /7-23
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
501/561 915 180 CNFIX15 Conv. Non-Conforming 15 YR Fixed
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
500/560 915 360 CNFIX30 Conv. Non-Conforming 30 YR Fixed
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
n/a n/a n/a CONF2ND Second Mortgage
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
106 910 360 FHARM FHA ARM
---------------- --------- ----- ---------- ===================================
3
---------------- --------- ----- ---------- ===================================
101 910 180 FHFIX15 FHA 15 YR Fixed
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
100 910 360 FHFIX30 FHA 30 YR Fixed
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
n/a 910 180 FHOTH15 FHA Other 15 YR
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
n/a 910 360 FHOTH30 FHA Other 30 YR
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
206 910 360 VAARM VA ARM
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
201 910 180 VAFIX15 VA 15 YR Fixed
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
200 910 360 FAFIX30 VA 30 YR Fixed
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
n/a 910 180 VAOTH15 VA Other 15 YR
---------------- --------- ----- ---------- ===================================
---------------- --------- ----- ---------- ===================================
n/a 910 360 VAOTH30 VA Other 30 YR
---------------- --------- ----- ---------- ===================================
4
SCHEDULE 5.1
CLOSING CONDITIONS
Unless otherwise specified, all dated as of
May 21, 1999, or a date (a "Current Date")
within 30 days before the Closing Date.
H&B [1.] RESTATED LOAN AND SECURITY AGREEMENT (the "Loan Agreement")
dated as of May 21, 1999, between ASSOCIATES MORTGAGE FUNDING
CORPORATION, a Delaware corporation ("Associates"), RYLAND
MORTGAGE COMPANY, an Ohio corporation ("Ryland"), certain lenders
("Lenders"), and BANK ONE, TEXAS, N.A., as agent for itself and
the other Lenders ("Administrative Agent"), all the terms of
which or incorporated in which have the same meanings when used
in this schedule, to which must be attached:
Schedule 2.1 - Lenders and Commitments
Schedule 2.2 - Wiring Instructions
Schedule 4.3 - Collateral
Schedule 4.4 - Borrowing-Base Calculations
Schedule 4.5 - Collateral Procedures
Schedule 5.1 - Closing Conditions
Schedule 6.3 - ▇▇▇▇▇▇'▇ Subsidiaries
Schedule 8.1 - Permitted Debt
Schedule 8.2 - Permitted Liens
Schedule 8.3 - Permitted Loans/Investments
Exhibit A-1 - Lender Note
Exhibit A- - Ryland Note
Exhibit A-3 - Intercompany Note
Exhibit A-4 - Competitive-Bid Note
Exhibit B-1 - Credit Request for Warehouse Borrowing
Exhibit B-2 - Credit Request for Working-Capital
Borrowing
Exhibit B-3 - Conversion Request
Exhibit B-4 - Payment Direction
Exhibit B-5 - Competitive-Bid Acceptance
Exhibit C-1 - Collateral-Delivery Notice
Exhibit C- - Collateral-Conversion Notice
Exhibit C-3 - Borrowing-Base Report for Mortgage
Collateral
Exhibit C-4 - Borrowing-Base Report for Working
Capital
Exhibit C-5 - Compliance Certificate
Exhibit D-1 - Bailee Letter for Investors
Exhibit D-2 - Bailee Letter for Pool Custodians
Exhibit D-3 - Trust Receipt and Agreement
Exhibit D-4 - Request for Release
Exhibit E - Opinion of General Counsel
Exhibit F - Assignment and Acceptance
H&B [2.] ASSOCIATES NOTES dated May 21, 1999, in the total stated
principal amounts of $200,000,000, executed by Associates, one each
payable to each Lender's order, in substantially the form of Exhibit
A-1 to the Loan Agreement, and otherwise described as follows:
------------------------------ -------------
Payee Principal
------------------------------ -------------
------------------------------ -------------
Bank One, Texas N.A. $35,000,000
------------------------------ -------------
------------------------------ -------------
NationsBank, N.A. $35,000,000
------------------------------ -------------
------------------------------ -------------
Guaranty Federal Bank, F.S.B. $25,000,000
------------------------------ -------------
------------------------------ -------------
PNC Bank, National $25,000,000
Association
------------------------------ -------------
------------------------------ -------------
Comerica Bank $15,000,000
------------------------------ -------------
------------------------------ -------------
First Union National Bank $15,000,000
------------------------------ -------------
------------------------------ -------------
SunTrust Bank, Atlanta $15,000,000
------------------------------ -------------
------------------------------ -------------
U.S. Bank National $15,000,000
Association
------------------------------ -------------
------------------------------ -------------
Chase Bank of Texas, $10,000,000
National Association
------------------------------ -------------
------------------------------ -------------
FMB Bank $10,000,000
------------------------------ -------------
H&B [3.] RYLAND NOTES dated May 21, 1999, in the total stated principal
amount of $5,000,000, executed by Ryland, one each payable to each
Lender's order, in substantially the form of Exhibit A-2 to the Loan
Agreement, and otherwise described as follows:
------------------------------ -------------
Payee Principal
------------------------------ -------------
------------------------------ -------------
Bank One, Texas N.A. $875,000
------------------------------ -------------
------------------------------ -------------
NationsBank, N.A. $875,000
------------------------------ -------------
------------------------------ -------------
Guaranty Federal Bank, F.S.B. $625,000
------------------------------ -------------
------------------------------ -------------
PNC Bank, National $625,000
Association
------------------------------ -------------
------------------------------ -------------
Comerica Bank $375,000
------------------------------ -------------
------------------------------ -------------
First Union National Bank $375,000
------------------------------ -------------
------------------------------ -------------
SunTrust Bank, Atlanta $375,000
------------------------------ -------------
------------------------------ -------------
U.S. Bank National $375,000
Association
------------------------------ -------------
------------------------------ -------------
Chase Bank of Texas, $250,000
National Association
------------------------------ -------------
------------------------------ -------------
FMB Bank $250,000
------------------------------ -------------
2
H&B [4.] INTERCOMPANY NOTE dated May 21, 1999, in the stated principal
amount of $200,000,000, executed by Ryland, payable to Associate's
order, endorsed to Administrative Agent's order on behalf of
Lenders, and in substantially the form of Exhibit A-3 to the Loan
Agreement.
H&B [5.] FINANCING STATEMENTS, each executed by RMC Home Loans as debtor
and Administrative Agent as secured party, and in form acceptable to
Administrative Agent for filing with the following applicable
jurisdictions, and otherwise described as follows:
----------------- ------------ ----------- ========
Name Jurisdiction Number Date
RMC Home Loans Sec. of
State, MD
----------------- ------------ ----------- ========
----------------- ------------ ----------- ========
▇▇▇▇▇▇
Co., MD
----------------- ------------ ----------- ========
----------------- ------------ ----------- ========
Sec. of
State, VA
----------------- ------------ ----------- ========
H&B [6.] UNIFORM COMMERCIAL CODE SEARCH REPORTS for RMC Home Loans as
debtor in the following jurisdictions and prepared as of Current
Dates:
----------------- ------------ ========
Debtor Jurisdiction Date
RMC Home Loans Sec. of
State, MD
----------------- ------------ ========
----------------- ------------ ========
▇▇▇▇▇▇
Co., MD
----------------- ------------ ========
----------------- ------------ ========
Sec. of
State, VA
----------------- ------------ ========
H&B [7.] FINANCING STATEMENT CHANGES (CONTINUATIONS) executed by the
appropriate Company as debtor and Administrative Agent as secured
party, filed with the appropriate jurisdictions, and otherwise
described as follows:
--------------- ------------ -------------------- -------------------
Original Filing Continuation
Name Jurisdiction
-------------------- --------------------
Number Date Number Date
--------------- ------------ ----------- -------- ----------- --------
--------------- ------------ ----------- -------- ----------- --------
Associates Sec. of 9408671 06/28/94
State, DE
--------------- ------------ ----------- -------- ----------- --------
--------------- ------------ ----------- -------- ----------- --------
Sec. of 41788224; 06/27/94
State, MD Liber
3617,
Folio 1928
--------------- ------------ ----------- -------- ----------- --------
--------------- ------------ ----------- -------- ----------- --------
▇▇▇▇▇▇ 015451; 06/23/94
Co., MD Liber
0146,
Folio 530
--------------- ------------ ----------- -------- ----------- --------
--------------- ------------ ----------- -------- ----------- --------
Sec. of 120435 06/20/94
State, TX
--------------- ------------ ----------- -------- ----------- --------
3
--------------- ------------ ----------- -------- ----------- --------
Ryland Sec. of 4174887 06/23/94
State, MD and
41748193;
Liber
3617,
Folio 1545
--------------- ------------ ----------- -------- ----------- --------
--------------- ------------ ----------- -------- ----------- --------
▇▇▇▇▇▇ 015482; 06/30/94
Co., MD Liber
0146,
Folio 673
--------------- ------------ ----------- -------- ----------- --------
--------------- ------------ ----------- -------- ----------- --------
▇▇▇. ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇/▇▇/▇▇
▇▇▇▇▇, ▇▇
--------------- ------------ ----------- -------- ----------- --------
--------------- ------------ ----------- -------- ----------- --------
Sec. of 115336 06/14/94
State, TX
--------------- ------------ ----------- -------- ----------- --------
H&B [8.] GNMA ACKNOWLEDGMENT AGREEMENT dated as of May 21, 1999,
executed in the form required by GNMA by Ryland, Administrative
Agent, and each Lender and to be executed and returned to
Administrative Agent promptly after completion by GNMA.
H&B [9.] AMENDMENT TO FHLMC ACKNOWLEDGMENT AGREEMENT dated as of May 21,
1999, executed in the form required by FHLMC by Ryland,
Administrative Agent, and each Lender and to be executed and
returned to Administrative Agent promptly after completion by FHLMC.
H&B [10.] AMENDMENT TO FNMA ACKNOWLEDGMENT AGREEMENT dated as of May 21,
1999, executed in the form required by FNMA by Ryland,
Administrative Agent, and each Lender and to be executed and
returned to Administrative Agent promptly after completion by FNMA.
▇▇▇▇▇▇ [11.] OFFICERS' CERTIFICATE for Associates dated as of May 21, 1999,
executed by the President and Secretary of Associates as to (a) the
due incumbency of its officers authorized to execute or attest to
the Loan Documents, (b) resolutions duly adopted by its directors
approving and authorizing the execution of the Loan Documents, (c)
its corporate charter, (d) Statement regarding no amendment, and (e)
Bylaws, to which must be attached
Exhibit A - Resolutions
Exhibit B - Charter
Exhibit C - Bylaws
▇▇▇▇▇▇ [12.] OFFICERS' CERTIFICATE for Ryland dated as of May 21, 1999,
executed by the President and Secretary of Ryland as to (a) the due
incumbency of its officers authorized to execute or attest to the
Loan Documents, (b) resolutions duly adopted by its directors
approving and authorizing the execution of the Loan Documents, (c)
its corporate charter, (d) Statement regarding no amendment, and (e)
Code of Regulations, to which must be attached
Exhibit A - Resolutions
Exhibit B - Charter
4
Exhibit C - Code of Regulations
13. CERTIFICATES OF QUALIFICATION, GOOD STANDING, AND AUTHORITY for
the Companies, issued as of Current Dates by the appropriate
Tribunals for the following jurisdictions:
---------- ---------- --------------- =======
Company JurisdictionCertificate Date
---------- ---------- --------------- =======
---------- ---------- --------------- =======
Associates DE Existence/Good 04/21/99
Standing
---------- ---------- --------------- =======
---------- ---------- --------------- ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ Existence/Good 04/22/99
Standing
---------- ---------- --------------- =======
---------- ---------- --------------- =======
MD Good Standing 04/22/99
---------- ---------- --------------- =======
---------- ---------- --------------- =======
TX Authority 04/21/99
--------------- =======
--------------- =======
Good Standing 04/21/99
---------- ---------- --------------- =======
▇▇▇▇▇▇ [14.] OPINION dated as of May 21, 1999, of Associate General Counsel
for the Companies, in substantially the form of Exhibit ▇.
▇▇▇▇▇▇ [15.] CUSTODIAL FEES AGREEMENT dated as of May 21 , 1999, between
the Companies and Administrative Agent (with copies provided only to
the Companies and Administrative Agent).
[16.] Such other documents and items as Administrative Agent or any
Lender may reasonably request.
5
SCHEDULE 6.3
▇▇▇▇▇▇'▇ SUBSIDIARIES
Associates Funding, Inc.
Associates Mortgage Funding Corporation
Cornerstone Title Company
Cornerstone Title Insurance Company
▇▇▇▇▇▇ Insurance Services
Ryland Management Corporation
Ryland Management Corporation Two
RH Mortgage Corporation
SCHEDULE 8.1
PERMITTED DEBT
1. The Obligation.
2. Secured Debt of Ryland under the Intercompany Note.
3. Debt of Associates or Ryland under Investment Facilities.
4. Debt of Ryland owed to ▇▇▇▇▇▇ Group that (a) never exceeds
$50,000,000 principal amount, (b) is unsecured, and (c) is
subordinated to the Senior Obligations under the terms of the Demand
Promissory Note, dated November 25, 1992, executed by Ryland,
payable to ▇▇▇▇▇▇ Group's order and in form and substance
satisfactory to Administrative Agent.
5. Unsecured guaranties by Ryland of any of its Affiliates' Debt so
long as, if a guaranty is for more than $2,500,000 of Debt, the
Companies must first give to Administrative Agent at least ten days'
notice of the proposed guaranty and the terms of the Debt and
guaranty.
6. Repurchase and reverse-repurchase agreements relating to the
Companies' investment portfolio.
7. Letters of credit for ▇▇▇▇▇▇'▇ account never in total face amount of
more than $25,000,000 used solely to (a) replace cash on deposit
with any bond trustee, (b) support master-servicing agreements, or
(c) support the sales of Servicing Rights.
8. Debt of Ryland (a) to a Person approved by Administrative Agent, (b)
for the purpose of financing the redemption of bonds issued by a
Subsidiary of ▇▇▇▇▇▇ Group that facilitates the financing of
mortgage loans and mortgage-backed securities, the securitization of
mortgage loans, and other related activities, (c) that never exceeds
a total of $60,000,000 principal amount, and (d) that may not be
outstanding for more than 21-consecutive Business Days.
9. Subordinated Debt.
10. Other Debt of Ryland that (a) is unsecured, (b) never exceeds
$50,000,000, (c) is subordinated to the Senior Obligations upon
terms satisfactory to Determining Lenders, and (d) may not have a
maturity (or sinking-fund provision) earlier than the
Stated-Termination Date.
11. Other Debt of either Associates or Ryland that (a) is incurred after
the date of this agreement and (b) never exceeds a total of
$5,000,000 for Associates and Ryland together.
12. Other Debt if first approved in writing by all Lenders.
SCHEDULE 8.2
PERMITTED LIENS
1. Lender Liens.
2. Present and future Liens arising under any Investment Facility that
(a) secure only the Debt arising under that facility, (b) cover only
the assets permitted under this agreement to be acquired with the
proceeds of an Investment Facility, and (c) do not cover any
Collateral.
3. Present and future Liens granted on, or in the nature of a sale
subject to an obligation to repurchase, Mortgage Securities that are
not Collateral.
4. Present and future Liens securing any Debt that (a) is permitted in
Items 6, 7, 8, or 12 on Schedule 8.1 and (b) do not cover any
Collateral.
5. Rights of FHLMC, FNMA, and GNMA in respect of Servicing Rights under
the Guides.
6. Any interest or title of a lessor in assets being leased under an
operating lease that does not constitute Debt.
7. Pledges or deposits that (a) do not encumber any Collateral and (b)
are made to secure payment of workers' compensation, unemployment
insurance, or other forms of governmental insurance or benefits or
to participate in any fund in connection with workers' compensation,
unemployment insurance, pensions, or other social security programs.
8. Good-faith pledges or deposits that (a) do not cover any
Collateral, and (b) are either (i) not in excess of 10% of the
amounts due under, and made to secure, either Company's
performance of bids, tenders, contracts (other than for the
repayment of borrowed money), or leases, or (ii) made to secure
statutory obligations, surety or appeal bonds, or indemnity,
performance, or other similar bonds benefitting either Company in
the ordinary course of its business.
9. Zoning and similar restrictions on the use of real property that do
not materially impair the use of the real property and that are not
violated by existing or proposed structures or land use.
10. The following if no Lien has been filed in any jurisdiction or
agreed to: (a) Liens for Taxes not yet due and payable and (b)
if, to the extent they cover any Collateral, they are subordinate
to the Lender Liens in form and substance reasonably acceptable
to Administrative Agent (i) mechanic's Liens and materialman's
Liens for services or materials for which payment is not yet due
and payable and (ii) landlord's Liens for rental not yet due and
payable.
11. The following if the validity or amount thereof is being
contested in good faith and by appropriate and lawful proceedings
diligently conducted, reserve or other appropriate provision (if
any) required by GAAP has been made, levy and execution continue
to be stayed, any of which covering any Collateral must be
subordinate to the Lender Liens in form and substance reasonably
acceptable to Administrative Agent, and they do not in the
aggregate materially detract from the value of the property of
the Company in question, or materially impair the use of that
property in the operation of its business: (a) claims and Liens
for Taxes due and payable; (b) claims and Liens upon, and defects
of title to, real or personal property (other than any
Collateral), including any attachment of personal or real
property or other legal process before adjudication of a dispute
on the merits; (c) claims and Liens of mechanics, materialmen,
warehousemen, carriers, landlords, or other like Liens; and (d)
adverse judgments or orders on appeal for the payment of money.
12. Present and future Liens securing any Debt of Ryland under the
Intercompany Note if, to the extent they cover any Collateral (a)
they are subordinate to the Lender Liens in form and substance
satisfactory to Administrative Agent in its sole discretion, (b)
a copy of the security instrument creating the relevant Lien has
been furnished to Administrative Agent, (c) once executed, the
security instrument is not amended without the sole, prior
written consent of Administrative Agent, and (d) no UCC financing
statements covering the collateral described in the relevant
security instrument are filed.
13. Other present and future Liens that (a) never secure more than a
total principal Debt of $10,000,000 and (b) do not cover any
Collateral.
2
SCHEDULE 8.3
PERMITTED LOANS/INVESTMENTS
1. Mortgage loans and mortgaged-backed securities and related residual
interests, originated or acquired by Ryland in the ordinary course
of its business.
2. Acquisition by Ryland of the stock or assets of any Person
conducting a mortgage-servicing business.
3. Mortgage Securities or other mortgage-backed securities issued by
any Subsidiary of Ryland that are acquired by Ryland under its
exercise of call Rights with respect to them.
4. Investments that (a) are made by Ryland in joint ventures with
homebuilders and realtors for the purpose of originating mortgage
loans and (b) never exceed a total of $5,000,000.
5. (a) Investments having a maturity of one year or less in
commercial paper given the highest rating by a
nationally-recognized-credit-rating agency, (b) United States
governmental obligations having maturities of one year or less,
and (c) certificates of deposit, bankers acceptances, and
repurchase agreements issued by a Lender or any other commercial
bank that has combined capital and surplus of at least
$250,000,000 and a rating of C or better by ▇▇▇▇▇▇▇▇ Bank Watch,
Inc.
6. Eurodollar investments with (a) any Lender or (b) any other
financial institution that has (i) combined capital, surplus, and
undivided profits of at least $100,000,000 and (ii) a ▇▇▇▇▇'▇
Investors Service, Inc., or Standard & Poor's Corporation
commercial-paper rating of at least P-1 or A-1, respectively, or
(iii) if it does not have a commercial-paper rating, a bond rating
of at least A-1 or A-, respectively.
7. Extensions of trade credit and other payables in the ordinary course
of business.
8. Acquisition of securities or evidences of Debt of others when
acquired by either Company in settlement of accounts receivable or
other debts arising in the ordinary course of business so long as
the total of all of those securities or evidences of debt is not
material to the Companies' financial condition taken as a whole.
9. Loans or advances to officers or employees (a) of Ryland or its
Subsidiaries for travel, entertainment, and relocation expenses in
the ordinary course of business or (b) of either Associates or
Ryland that are not in the ordinary course and are never more than a
total of $500,000 outstanding for both Associates and Ryland
together.
10. Loans by Associates to Ryland under the Intercompany Note.
11. Subordinated Debt.
12. Loans or advances by Ryland to ▇▇▇▇▇▇ Group in the management of
the Companies' cash so long as (a) (i) they are not made at a
time when (and do not cause) a Default
or any default by ▇▇▇▇▇▇
Group exists in respect of any of its material debt, and (ii) the
total of those loans and advances never (without the prior
written approval by Administrative Agent) exceeds the lesser of
either 50% of ▇▇▇▇▇▇'▇ Net Worth or $7,500,000 or (b) is
otherwise approved by Administrative Agent in writing.
2
EXHIBIT A-1
ASSOCIATES NOTE
$ May 21, 1999
----------------------
FOR VALUE RECEIVED, ASSOCIATES MORTGAGE FUNDING CORPORATION, a Delaware
corporation ("Maker"), promises to pay to the order of _________________________
("Payee") that portion of the principal amount of $_________________ that may
from time to time be disbursed and outstanding under this note together with
interest.
This note is an "Associates Note" under the Restated Loan and Security
Agreement (as renewed, extended, amended, or restated, the "Loan Agreement")
dated as of May 21, 1999, between Maker, Ryland, Payee, NationsBank, N.A., as
"Documentation Agent," Guaranty Federal Bank, F.S.B. and PNC Bank, N.A., as
"Co-Agents," certain other "Lenders," and Bank One, Texas, N.A., as
"Administrative Agent" for Lenders, all of the defined terms in which have the
same meanings when used, unless otherwise defined, in this note.
This note incorporates by reference the principal and interest payment
terms in the Loan Agreement for this note, including, without limitation, the
final maturity, which is the Termination Date. Principal and interest are
payable to the holder of this note through Administrative Agent at its offices
at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or at such other address as may be
given to Maker by Administrative Agent.
This note incorporates by reference all other provisions in the Loan
Agreement applicable to this note, such as provisions for disbursements of
principal, applicable-interest rates before and after Default, voluntary and
mandatory prepayments, acceleration of maturity, exercise of Rights, payment of
attorneys' fees, court costs, and other costs of collection, certain waivers by
Maker and other obligors, assurances and security, choice of Texas and United
States federal Legal Requirement, usury savings, and other matters applicable to
"Loan Documents" under the Loan Agreement.
This note is an amendment, restatement, renewal, extension, modification
of, consolidation of, and substitution for, the existing Associates Notes (as
the same may have been amended and replaced to the date hereof, the "Former
Notes") which Former Notes were executed and delivered pursuant to the Loan
Agreement.
ASSOCIATES MORTGAGE FUNDING
CORPORATION, as Maker
By
Name:
Title:
EXHIBIT A-2
RYLAND NOTE
$ May 21, 1999
----------------------
FOR VALUE RECEIVED, RYLAND MORTGAGE COMPANY, an Ohio corporation ("Maker"),
promises to pay to the order of _______________________ ("Payee") that portion
of the principal amount of $_____________ that may from time to time be
disbursed and outstanding under this note together with interest.
This note is a "Ryland Note" under the Restated Loan and Security
Agreement (as renewed, extended, amended, or restated, the "Loan Agreement")
dated as of May 21, 1999, between Maker, Associates Mortgage Funding
Corporation, Payee, NationsBank, N.A., as "Documentation Agent," Guaranty
Federal Bank, F.S.B. and PNC Bank, N.A., as "Co-Agents," certain other
"Lenders," and Bank One, Texas, N.A., as "Administrative Agent" for Lenders, all
of the defined terms in which have the same meanings when used, unless otherwise
defined, in this note.
This note incorporates by reference the principal and interest payment
terms in the Loan Agreement for this note, including, without limitation, the
final maturity, which is the Termination Date. Principal and interest are
payable to the holder of this note through Administrative Agent at its offices
at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or at such other address as may be
given to Maker by Administrative Agent.
This note incorporates by reference all other provisions in the Loan
Agreement applicable to this note, such as provisions for disbursements of
principal, applicable-interest rates before and after Default, voluntary and
mandatory prepayments, acceleration of maturity, exercise of Rights, payment of
attorneys' fees, court costs, and other costs of collection, certain waivers by
Maker and other obligors, assurances and security, choice of Texas and United
States federal Legal Requirement, usury savings, and other matters applicable to
"Loan Documents" under the Loan Agreement.
[This note is an amendment, restatement, renewal, extension, modification
of, consolidation of, and substitution for, the existing ▇▇▇▇▇▇ Notes (as the
same may have been amended and replaced to the date hereof, the "Former Notes")
which Former Notes were executed and delivered pursuant to the Loan Agreement.]
▇▇▇▇▇▇ MORTGAGE COMPANY, as Maker
By
Name:
Title:
EXHIBIT A-3
INTERCOMPANY NOTE
$200,000,000 May 21, 1999
FOR VALUE RECEIVED, ▇▇▇▇▇▇ MORTGAGE COMPANY, an Ohio corporation
("Maker"), promises to pay to the order of ASSOCIATES MORTGAGE FUNDING
CORPORATION, a Delaware corporation ("Payee"), ON DEMAND, that portion of the
principal amount of $200,000,000 that may from time to time be disbursed and
outstanding under this note together with interest.
Except as stated below, the unpaid principal of this note from day to day
shall bear interest at an annual interest rate equal from day to day to either
(a) the sum of the Fed-Funds Rate (as defined and calculated in accordance with
the Loan Agreement described below) plus 1.75%, or (b) any higher but lawful
rate that Maker and the holder of this note may from time to time agree.
All past-due amounts under this note from day to day shall bear interest
at an annual interest rate from day to day equal to either (a) 12% per annum or
(b) any higher but lawful rate that Maker and the holder of this note may from
time to time agree.
Interest is calculated in each case for actual days elapsed over a 360-day
year and is payable ON DEMAND or, until demand is made, on the last business day
of each calendar month.
Payments and prepayments of principal, interest, and all other amounts due
under this note must be made by check at ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at any other address and in any
other manner as the holder of this note may from time to time designate in
writing to Maker.
Maker waives presentment for payment, demand, notice of demand, notice of
nonpayment or dishonor, protest and notice of protest of this note, notice of
acceleration or the intent to accelerate, and all other notices in connection
with the delivery, acceptance, performance, default, or enforcement of the
payment of this note.
The remedies of the holder of this note are cumulative and concurrent and
may, at the sole discretion of the holder of this note, be pursued singly,
successively, and together and exercised from time to time. The failure to
exercise any right or remedy is not a waiver or release of that right or remedy.
Maker (a) agrees that this note must be construed, and its performance
enforced, under Delaware laws (other than its conflicts laws), (b) agrees that
the United States District Court for the District of Delaware and any Delaware
court of competent jurisdiction has jurisdiction in any proceeding instituted to
enforce this note, and (c) waives any objections it may have to that venue.
In addition to all other rights available to it under applicable laws or
otherwise, Payee may assign, pledge, or transfer its rights under this note
without notice to or consent of Maker.
This note is executed and delivered as a renewal and extension of any
amounts owing under, and as a substitution but not novation of, the Intercompany
Note dated June 25, 1995, in the stated principal amount of $500,000,000,
executed by Maker, payable to Payee's order, and endorsed to the order of Bank
One, Texas, N.A., in its capacity as agent for itself and certain other lenders
to Payee, which note was executed and delivered as a renewal and extension of
any amounts owing under, and as a substitution but not novation of, the
Intercompany Note dated May 27, 1994, in the stated principal amount of
$500,000,000, executed by Maker, payable to Payee's order, and endorsed to the
order of Bank One, Texas, N.A., in its capacity as agent for itself and certain
other lenders to Payee.
IN WITNESS WHEREOF, Maker has caused this note to be duly executed on its
behalf under seal by its duly authorized corporate officer.
ATTEST: ▇▇▇▇▇▇ MORTGAGE COMPANY, as Maker
By
By Name:
Name: Title:
Title:
In accordance with the terms and conditions of the Restated Loan and
Security Agreement (as renewed, extended, amended, or restated, the "Loan
Agreement") dated as of May 21, 1999, between Payee, Maker, NationsBank, N.A.,
as "Documentation Agent," Guaranty Federal Bank, F.S.B. and PNC Bank, N.A., as
"Co-Agents," certain lenders ("Lenders"), and Bank One, Texas, N.A., as
Administrative Agent for itself and the other Lenders ("Administrative Agent"),
this note is payable to the order of Administrative Agent for Lenders, with
recourse against Payee.
ATTEST: ASSOCIATES MORTGAGE FUNDING
CORPORATION, as Payee
By
Name: By
Title: Name:
Title:
2
EXHIBIT A-4
COMPETITIVE-BID NOTE
$ -------------------------
----------------------
FOR VALUE RECEIVED, ASSOCIATES MORTGAGE FUNDING CORPORATION, a Delaware
corporation ("Maker"), promises to pay to the order of ________________("Payee")
that portion of the principal amount of $___________________ that may from time
to time be disbursed and outstanding under this note together with interest.
This note is a "Competitive-Bid Note" under the Loan Agreement (as
renewed, extended, amended, or restated, the "Loan Agreement") dated as of May
21, 1999, between Maker, ▇▇▇▇▇▇, Payee, NationsBank, N.A., as "Documentation
Agent," Guaranty Federal Bank, F.S.B. and PNC Bank, N.A., as "Co-Agents,"
certain other "Lenders," and Bank One, Texas, N.A., as "Administrative Agent"
for Lenders, all of the defined terms in which have the same meanings when used,
unless otherwise defined, in this note.
This note incorporates by reference the principal and interest payment
terms in the Loan Agreement and all related Competitive-Bid Acceptances for this
note, including, without limitation, the final maturity, which for each
Borrowing evidenced by this note is the earlier of either (a) the number of days
(but not more than 90 days) stated in the related Competitive-Bid Acceptance
after the applicable Borrowing Date, or (b) the Termination Date. While no
Default exists, interest is payable directly to the holder of this note at
Payee's offices at _____________________, or at such other address as may be
given to Maker by the holder of this note. Principal and, while a Default
exists, interest are payable to the holder of this note through Administrative
Agent at its offices ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or at such other
address as may be given to Maker by Administrative Agent.
This note incorporates by reference all other provisions in the Loan
Agreement applicable to this note, such as provisions for disbursements of
principal, applicable-interest rates before and after Default, voluntary and
mandatory prepayments, acceleration of maturity, exercise of Rights, payment of
attorneys' fees, court costs, and other costs of collection, certain waivers by
Maker and other obligors, assurances and security, choice of Texas and United
States federal Legal Requirement, usury savings, and other matters applicable to
"Loan Documents" under the Loan Agreement.
ASSOCIATES MORTGAGE FUNDING
CORPORATION, as Maker
By
Name:
Title:
EXHIBIT B-1
CREDIT REQUEST FOR WAREHOUSE BORROWING
AGENT: Bank One, Texas, N.A. DATE: ____________________
ASSOCIATES: Associates Mortgage Funding Corporation
This request is delivered under the Restated Loan and Security Agreement
(as renewed, extended, and amended, the "Loan Agreement") dated as of May 21,
1999, between Associates, ▇▇▇▇▇▇, Documentation Agent, Co-Agents, Administrative
Agent, and certain lenders ("Lenders"). Terms defined in the Loan Agreement have
the same meanings when used, unless otherwise defined, in this request.
Associates requests a $____________________1 Warehouse Borrowing (the
"Requested Borrowing") to be funded on ____________________, ____2 (the
"Requested Borrowing Date"):
1. Borrowing Type. The Requested Borrowing is the following Borrowing
Type [check and complete one applicable box]:
- Fed-Funds Borrowing
- LIBOR Borrowing with an Interest Period beginning
____________________, and ending ____________________.3
2. Loaned By. The Requested Borrowing is requested from the Lenders and in
the amounts described in the table on the reverse of this request.
Associates certifies that as of the Requested Borrowing Date, after giving
effect to the Requested Borrowing, (a) the representations and warranties of the
Companies in the Loan Documents are true and correct in all material respects
except to the extent that (i) a representation or warranty speaks to a specific
date or (ii) the facts on which a representation or warranty is based have
changed by transactions or conditions contemplated or permitted by the Loan
Documents, (b) no Default or Potential Default exists, (c) the extension of the
Requested Borrowing does not cause any Borrowing Excess to exist, (d) ▇▇▇▇▇▇ has
timely delivered a Collateral-Delivery Notice and, if applicable,
Collateral-Conversion Notice to Administrative Agent related to this request,
(e) all Collateral Documents required by the Loan Agreement to be delivered to
Administrative
Agent in connection with the Requested Borrowing have been delivered to
Administrative Agent, and (f) the Companies have otherwise complied with all
conditions of the Loan Documents to permit the Requested Borrowing to be
extended.
ASSOCIATES MORTGAGE FUNDING CORPORATION
By
Name:
4Title:
------------------------------------
1 Must be at least $100,000.
2 No earlier than the Business Day of request for a Fed-Funds Borrowing or third
Business Day after request for a LIBOR Borrowing and, in any case, before the
Termination Date.
3 Must be a 1, 2, 3, or 6-month or other period acceptable to Administrative
Agent (and to Determining Lenders if longer than 6-months) that, in any case,
does not exceed beyond scheduled payment or prepayment date(s) for that part
of the Principal Debt.
4 Must be a Responsible Officer of, or an individual designated to
Administrative Agent in writing by a Responsible Officer of, Associates.
2
[Reverse of Credit Request for Warehouse Borrowing
Dated _________________________]
---------- ---------------------------- -----------
Check LENDER AMOUNT
---------- ---------------------------- -----------
---------- ---------------------------- -----------
Bank One, Texas, N.A. $
---------- ---------------------------- -----------
---------- ---------------------------- -----------
NationsBank, N.A. $
---------- ---------------------------- -----------
---------- ---------------------------- -----------
Chase Bank of Texas, $
National Association
---------- ---------------------------- -----------
---------- ---------------------------- -----------
Comerica Bank $
---------- ---------------------------- -----------
---------- ---------------------------- -----------
PNC Bank, National $
Association
---------- ---------------------------- -----------
---------- ---------------------------- -----------
FMB Bank $
---------- ---------------------------- -----------
---------- ---------------------------- -----------
Guaranty Federal Bank, $
F.S.B.
---------- ---------------------------- -----------
---------- ---------------------------- -----------
U.S. Bank National $
Association
---------- ---------------------------- -----------
---------- ---------------------------- -----------
First Union National Bank $
---------- ---------------------------- -----------
---------- ---------------------------- -----------
SunTrust Bank, Atlanta $
---------- ---------------------------- -----------
3
EXHIBIT B-2
CREDIT REQUEST FOR WORKING-CAPITAL BORROWING
AGENT: Bank One, Texas, N.A. DATE: _________________________
▇▇▇▇▇▇: ▇▇▇▇▇▇ Mortgage Company
This request is delivered under the Restated Loan and Security Agreement
(as renewed, extended, and amended, the "Loan Agreement") dated as of May 21,
1999, between ▇▇▇▇▇▇, Associates, Administrative Agent, and certain lenders
("Lenders"). Terms defined in the Loan Agreement have the same meanings when
used, unless otherwise defined, in this request.
▇▇▇▇▇▇ requests a $____________________________1 Working-Capital Borrowing
(the "Requested Borrowing") to be funded on ____________________2 (the
"Requested Borrowing Date") as the following Borrowing Category [check
applicable box] for which ▇▇▇▇▇▇ certifies that the following applicable
information is accurate:
- Foreclosure Payments, which may not exceed 80% of the related
Foreclosure Payments, that are identified on the claims for payment
that have been filed with FHA, VA, or an Approved PMI, copies of
which are attached to this request, of
$--------------------.
- P&I Payments, which may not exceed 90% of the related P&I Payments,
that are identified by investor on the attached schedule, of
$--------------------.
- T&I Payments, which may not exceed 80% of the related T&I Payments
that are identified by investor on the attached schedule, of
$--------------------.
▇▇▇▇▇▇ certifies that as of the Requested Borrowing Date, after giving
effect to the Requested Borrowing, (a) the representations and warranties of the
Companies in the Loan Documents are true and correct in all material respects
except to the extent that (i) a representation or warranty speaks to a specific
date or (ii) the facts on which a representation or warranty is based have
changed by transactions or conditions contemplated or permitted by the Loan
Documents, (b) no Default or Potential Default exists, (c) the extension of the
Requested Borrowing does not cause any Borrowing Excess to exist, (d) ▇▇▇▇▇▇ has
timely delivered a Collateral-Delivery Notice and the applicable Borrowing-Base
Report to Administrative Agent related to this request, (e) all Collateral
Documents required by the Loan Agreement to be delivered to Administrative Agent
in connection with the Requested Borrowing have been delivered to Administrative
Agent, and (f) the Companies have otherwise complied with all conditions of the
Loan Documents to permit the Requested Borrowing to be extended.
▇▇▇▇▇▇ MORTGAGE COMPANY
By
Name:
3Title:
------------------------------------
1 Must be at least $100,000.
2 No earlier than the Business Day of request and before the Termination Date
and between the 1st day and 20th day of a Calendar Month if part of Tranche A
for P&I Borrowings or the 21st day and last day of a Calendar Month in part of
Tranche B for P&I Borrowings.
4 Must be a Responsible Officer, or an individual designated to Administrative
Agent in writing by a Responsible Officer of, ▇▇▇▇▇▇.
2
EXHIBIT B-3
CONVERSION REQUEST
AGENT: Bank One, Texas, N.A. DATE: ____________________
FROM: ________________________________________1
This request is delivered under the Restated Loan and Security Agreement
(as renewed, extended, and amended, the "Loan Agreement") dated as of May 21,
1999, between Associates, ▇▇▇▇▇▇, Documentation Agent, Co-Agents, Administrative
Agent, and certain lenders ("Lenders"). Terms defined in the Loan Agreement have
the same meanings when used, unless otherwise defined, in this request.
The Company named above presently has a ___________________________2
Borrowing in the amount of $_______________________ (the "Existing Borrowing"),
with, if a LIBOR Borrowing, an Interest Period ending on
__________________________, (the "Conversion Date").3
Subject to the time periods applicable under Section 3.11, on the
Conversion Date, the Company named above requests to [check applicable box(es)]:
- Continue the entire Existing Borrowing as a LIBOR Borrowing with
a new Interest Period beginning ____________________, and ending
____________________.4
- Convert the entire Existing Borrowing from [check box]:
- a Fed-Funds Borrowing to a LIBOR Borrowing with an Interest
Period beginning ____________________, and ending
____________________.4
- a LIBOR Borrowing to a Fed-Funds Borrowing.
- Pay $____________________ of the Existing Borrowing to those Lenders
and in the amounts described in the table on the reverse of this
request and continue the balance as [check box]:
- a LIBOR Borrowing5 with a new Interest Period beginning
____________________, and ending ____________________.4
- a Fed-Funds Borrowing.
6
By
Name:
6Title:
--------------------------------------------
1 ▇▇▇▇▇▇ or Associates.
2 Either Fed-Funds or LIBOR.
3 And this request must be delivered at least the third Business Day before
that date.
4 Must be a 1, 2, 3, or 6 month period or other period agreed upon by Borrower
and Administrative Agent or Determining Lenders if longer than 6 months.
5 Must be a minimum of $100,000.
6 Must be a Responsible Officer of, or an individual designated in writing to
Administrative Agent by a Responsible Officer of, ▇▇▇▇▇▇ or Associates, as
the case may be.
2
[Reverse of Conversion Request Dated __________________]
---------- ---------------------------- -----------
Check LENDER AMOUNT
---------- ---------------------------- -----------
---------- ---------------------------- -----------
Bank One, Texas, N.A. $
---------- ---------------------------- -----------
---------- ---------------------------- -----------
NationsBank, N.A. $
---------- ---------------------------- -----------
---------- ---------------------------- -----------
Chase Bank of Texas, $
National Association
---------- ---------------------------- -----------
---------- ---------------------------- -----------
Comerica Bank $
---------- ---------------------------- -----------
---------- ---------------------------- -----------
PNC Bank, National $
Association
---------- ---------------------------- -----------
---------- ---------------------------- -----------
FMB Bank $
---------- ---------------------------- -----------
---------- ---------------------------- -----------
Guaranty Federal Bank, $
F.S.B.
---------- ---------------------------- -----------
---------- ---------------------------- -----------
U.S. Bank National $
Association
---------- ---------------------------- -----------
---------- ---------------------------- -----------
First Union National Bank $
---------- ---------------------------- -----------
---------- ---------------------------- -----------
SunTrust Bank, Atlanta $
---------- ---------------------------- -----------
3
EXHIBIT B-4
PAYMENT DIRECTION
AGENT: Bank One, Texas, N.A. DATE: ____________________
FROM: ____________________
This direction is delivered to Administrative Agent under the Restated
Loan and Security Agreement (as renewed, extended, and amended the "Loan
Agreement") dated as of May 21, 1999, between Associates, ▇▇▇▇▇▇, Documentation
Agent, Co-Agents, Administrative Agent, and certain lenders ("Lenders"). Terms
defined in the Loan Agreement have the same meanings when used, unless otherwise
defined, in this direction. On the date of this direction, no Default exists.
Therefore, please direct the accompanying payment of $____________________ as to
the Lenders and in the amounts described on the reverse of this direction, which
is in accordance with the order required by Section 3.5(a) of the Loan
Agreement.
1 __________________________________
By
Name:
2Title:
----------------------------------
1 Either Associates or ▇▇▇▇▇▇.
2 Must be a Responsible Officer of, or an individual designated in writing by a
Responsible Officer of, Associates or ▇▇▇▇▇▇, as applicable.
[Reverse of Payment Direction Dated __________________________]
---------- ---------------------------- -----------
Check LENDER AMOUNT
---------- ---------------------------- -----------
---------- ---------------------------- -----------
Bank One, Texas, N.A. $
---------- ---------------------------- -----------
---------- ---------------------------- -----------
NationsBank, N.A. $
---------- ---------------------------- -----------
---------- ---------------------------- -----------
Chase Bank of Texas, $
National Association
---------- ---------------------------- -----------
---------- ---------------------------- -----------
Comerica Bank $
---------- ---------------------------- -----------
---------- ---------------------------- -----------
PNC Bank, National $
Association
---------- ---------------------------- -----------
---------- ---------------------------- -----------
FMB Bank $
---------- ---------------------------- -----------
---------- ---------------------------- -----------
Guaranty Federal Bank, $
F.S.B.
---------- ---------------------------- -----------
---------- ---------------------------- -----------
U.S. Bank National $
Association
---------- ---------------------------- -----------
---------- ---------------------------- -----------
First Union National Bank $
---------- ---------------------------- -----------
---------- ---------------------------- -----------
SunTrust Bank, Atlanta $
---------- ---------------------------- -----------
2
EXHIBIT B-5
COMPETITIVE-BID ACCEPTANCE
LENDER: ______________________________ DATE: _________________________
ASSOCIATES: Associates Mortgage Funding Corporation
This request is delivered under the Loan Agreement (as renewed, extended,
amended, or restated, the "Loan Agreement") dated as of May 21 , 1999, between
Associates, ▇▇▇▇▇▇, Documentation Agent, Co-Agents, Administrative Agent,
Lender, and certain other lenders ("Lenders"). Terms defined in the Loan
Agreement have the same meanings when used, unless otherwise defined, in this
acceptance.
Associates accepts Lender's Competitive Bid for:
o A $____________________ Competitive-Bid Borrowing1 (the
"Requested Borrowing")
o At a Competitive-Bid Rate of _____% per annum
o To be funded on _____________________2 (the "Requested Borrowing
Date")
o Maturing on ________________________3
Associates certifies that as of the Requested Borrowing Date and after
giving effect to the Requested Borrowing (a) the representations and warranties
of Associates in the Loan Documents are true and correct in all material
respects (unless they speak to a specific date or are based on facts that have
changed by transactions contemplated or permitted by the Loan Documents), (b) no
Default or Potential Default exists, (c) the extension of the Requested
Borrowing does not cause any Borrowing Excess to exist, (d) all Collateral
Documents required by the Loan Agreement to be delivered to Administrative Agent
in connection with the Requested Borrowing have been delivered to Administrative
Agent, and (e) Associates has otherwise complied with all conditions of the Loan
Documents to permit the Requested Borrowing to be extended.
ASSOCIATES MORTGAGE FUNDING
CORPORATION
By
Name:
4Title:
--------------------------------------
1 Must be at least $100,000.
2 No earlier than 1:00 p.m. on the Business Day on which this acceptance is
given Administrative Agent.
3. No longer than the Stated-Termination Date.
4. Must be a Responsible Officer of, or a Person designated in writing by a
Responsible Officer of, Associates.
EXHIBIT C-1
COLLATERAL-DELIVERY NOTICE
AGENT: Bank One, Texas, N.A. DATE: _________________________
▇▇▇▇▇▇: ▇▇▇▇▇▇ Mortgage Company
This notice is delivered to Administrative Agent under the Restated Loan
and Security Agreement (as renewed, extended, and amended the "Loan Agreement")
dated as of May 21, 1999, between Associates, ▇▇▇▇▇▇, Documentation Agent,
Co-Agents, Administrative Agent, and certain lenders. Terms defined in the Loan
Agreement have the same meanings when used, unless otherwise defined, in this
notice.
In accordance with Schedule 4.5 to and other applicable provisions of the
Loan Agreement, ▇▇▇▇▇▇ submits the following Collateral under, and subject to
the Lender Liens created by, the Loan Agreement [check applicable box(es)]:
- Mortgage Loans for Dry Borrowing. ▇▇▇▇▇▇ (a) is delivering to
Administrative Agent the Collateral Documents required by Part A of
that Schedule 4.5 for the Mortgage Loans described on the attached
Annex 1, which is a data-processing print-out meeting the
requirements of Part A.8 on that Schedule 4.5, and (b) confirms that
those Mortgage Loans and all related Collateral Documents are
subject to the Lender Liens created by the Loan Agreement.
- Mortgage Loans for Wet Borrowing. ▇▇▇▇▇▇ (a) is delivering to
Administrative Agent the Collateral Documents required by Part B of
that Schedule 4.5 for the Mortgage Loans described on the attached
Annex 2, which is a data-processing print-out meeting the
requirements of Part B.3 on that Schedule 4.5, (b) shall deliver to
Administrative Agent the Collateral Documents required by Part A of
that Schedule 4.5 for, within seven Business Days after the
Borrowing Date for the Borrowing made on the basis of, those
Mortgage Loans, and (c) confirms that those Mortgage Loans and all
related Collateral Documents are subject to the Lender Liens created
by the Loan Agreement.
- Mortgage Securities for Dry Borrowing. ▇▇▇▇▇▇ (a) is delivering to
Administrative Agent the Collateral Documents required by Part C of
that Schedule 4.5 for the Mortgage Securities described on the
attached Annex 3 (the Mortgage Pools for which consist of Mortgage
Loans that were, before issuance of those Mortgage Securities,
Eligible Mortgage Loans constituting part of the Collateral) and (b)
confirms that those Mortgage Securities and all related Collateral
Documents are subject to the Lender Liens created by the Loan
Agreement.
- Servicing Receivables for Working-Capital Borrowing. The attached
Annex 4 describes the Servicing Receivables for a Working-Capital
Borrowing that is concurrently being requested, in connection with
which ▇▇▇▇▇▇ (a) is delivering to Administrative Agent the
Collateral Documents required by Part D(2) of that Schedule 4.5 for
any Foreclosure Receivables included as part of those Servicing
Receivables and (b) confirms that those Servicing Receivables and
all related Collateral Documents are subject to the Lender Liens
created by the Loan Agreement.
On and as of the date of this notice, ▇▇▇▇▇▇ certifies, represents,
warrants, and covenants to or with Administrative Agent for Lenders that:
(a) For each Mortgage Loan described on either Annex 1 or 2 to this
notice, ▇▇▇▇▇▇ (i) holds each of the items required by
Section 4.5(b) of the Loan Agreement, (ii) holds those items in
trust for Administrative Agent on behalf of Lenders, (iii) upon
request or instructions from Administrative Agent from time to
time and at any time, shall deliver those items to Administrative
Agent any other Person designated by Administrative Agent, and
(iv) may not deliver those items, or grant, transfer, or assign
any interest in any of them, to any Person except Administrative
Agent without first obtaining Administrative Agent's written
consent.
(b) All of the items that ▇▇▇▇▇▇ is required to furnish to
Administrative Agent under the Loan Agreement in connection with
this notice accompany it, all of those items are accurate and
what they purport to be, and all of the Collateral described in
this notice or its schedules conform in all respects to the
requirements of the Loan Agreement, including, without
limitation, the requirements of eligibility applicable to that
Collateral on Schedule 4.3 to the Loan Agreement.
(c) The representations and warranties of the Companies in the Loan
Documents are true and correct in all material respects except to
the extent that (i) a representation or warranty speaks to a
specific date or (ii) the facts on which a representation or
warranty is based have changed by transactions or conditions
contemplated or permitted by the Loan Documents.
(d) No Default or Potential Default exists.
▇▇▇▇▇▇ MORTGAGE COMPANY
By
Name:
1Title:
------------------------------------
1 Must be a Responsible Officer of, or an individual designated in writing to
Administrative Agent by a Responsible Officer of, ▇▇▇▇▇▇.
2
EXHIBIT C-2
COLLATERAL-CONVERSION NOTICE
AGENT: Bank One, Texas, N.A. DATE:
▇▇▇▇▇▇: ▇▇▇▇▇▇ Mortgage Company
This notice is delivered to Administrative Agent under the Restated Loan
and Security Agreement (as renewed, extended, or amended the "Loan Agreement")
dated as of May 21, 1999, between Associates, ▇▇▇▇▇▇, Documentation Agent,
Co-Agents, Administrative Agent, and certain lenders. Terms defined in the Loan
Agreement have the same meanings when used, unless otherwise defined, in this
notice.
▇▇▇▇▇▇ notifies Administrative Agent that (a) Administrative Agent has
issued its initial certification for inclusion of the Eligible Mortgage Loans
described on the attached Annex 1 in one or more Mortgage Pools and (b) ▇▇▇▇▇▇
is delivering to Administrative Agent one or more valid and enforceable Take-Out
Commitments that comply with Part C.2. on Schedule 4.3 to the Loan Agreement for
those Eligible Mortgage Loans.
On and as of the date of this notice, ▇▇▇▇▇▇ certifies, represents, and
warrants, to Administrative Agent for Lenders that (a) all of the items that
▇▇▇▇▇▇ is required to furnish to Administrative Agent under the Loan Agreement
in connection with this notice accompany it, all of those items are accurate and
what they purport to be, and all of the Eligible Mortgage Loans described on the
attached Annex 1 comply with all requirements necessary to constitute Eligible
Gestation Collateral, (b) the representations and warranties of the Companies in
the Loan Documents are true and correct in all material respects except to the
extent that (i) a representation or warranty speaks to a specific date or (ii)
the facts on which a representation or warranty is based have changed by
transactions or conditions contemplated or permitted by the Loan Documents, and
(c) no Default or Potential Default exists.
▇▇▇▇▇▇ MORTGAGE COMPANY
By
Name:
1Title:
-----------------------------------
1 Must be a Responsible Officer of, or an individual designated in writing to
Administrative Agent by a Responsible Officer of, ▇▇▇▇▇▇.
EXHIBIT C-3
BORROWING-BASE REPORT FOR MORTGAGE COLLATERAL
AGENT: Bank One, Texas, N.A. DATE: ________________________
FOR: Associates Mortgage Funding Corporation and ▇▇▇▇▇▇ Mortgage
Company
This report is delivered to the Companies and Lenders under the Restated Loan
and Security Agreement (as renewed, extended, and amended, the "Loan Agreement")
dated as of May 21, 1999, between Associates, ▇▇▇▇▇▇, Documentation Agent,
Co-Agents, Administrative Agent, and certain lenders. Terms defined in the Loan
Agreement have the same meanings when used, unless otherwise defined, in this
report. Administrative Agent has calculated the Borrowing Base for Mortgage
Collateral and its various components as of the date of this report.
---------------------------------------------- ---------------- ===============
1. Borrowing Base (@ certain advance rates)
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(a) Non-Agency Loans (@ 95%) $
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(b) Investment-Mortgage Loans (@ 75%) $
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(c) Seasoned Loans (@ 95%)1 $
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(d) Other Dry Borrowings (@ 98%)1 $
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(e) Wet Borrowings (@ 98%)1 $
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(f) Gestation Borrowings (@ 99%) $
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(g) Mortgage Securities (@ 99%) $
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(h) Borrowing Base for Mortgage $
Collateral, total of Lines 1(a)
through 1(g)
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
2. Principal Debt of Warehouse Borrowings
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(a) Against Non-Agency Loans $
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(b) Against Investment-Mortgage Loans $
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(c) Against Seasoned Loans $
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(d) Other Dry Borrowings $
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(e) Wet Borrowings $
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(f) Gestation Borrowings $
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(g) Mortgage Securities $
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(h) Principal Debt of Warehouse $
Borrowings, total of Lines 2(a)
through 2(g)
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
3. Non-Agency Loans Availability
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(a) Non-Agency Sublimit $20,000,000
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(b) Lesser of either Line 1(a) or $
Line 3(a)
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(c) Line 3(b) minus Line 2(a), Maximum $
Borrowings against Non-Agency Loans
if positive or Borrowing Excess if
negative
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
4. Investment-Mortgage Loan Availability
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(a) Investment-Mortgage Loan Sublimit $6,000,000
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(b) Lesser of either Line 1(b) or $
Line 4(a)
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(c) Line 4(b) minus Line 2(b), Maximum $
Borrowings against
Investment-Mortgage Loans if positive
or Borrowing Excess if negative
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
5. Other Dry Borrowing Availability
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(a) Commitment $200,000,000
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(b) Line 5(a) minus Lines 2(a), 2(b), $ 2(c), 2(e), 2(f), and 2(g)
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(c) Lesser of either Line 1(d) or $
Line 5(b)
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(d) Line 5(c) minus Line 2(d), maximum $
other Dry Borrowings if positive or
Borrowing Excess if negative
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
6. Wet Borrowings Availability
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(a) Wet Sublimit $60,000,000
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(b) Lesser of either Line 1(e) or $
Line 6(a)
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(c) Line 6(b) minus Line 2(e), Maximum $
Wet Borrowings if positive or
Borrowing Excess if negative
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
7. Gestation Borrowing Availability
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(a) Gestation Sublimit $100,000,000
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(b) Lesser of either Line 1(f) or $
Line 7(a)
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(c) Line 7(b) minus Line 2(f), Maximum $
Gestation Borrowing if positive or
Borrowing Excess if negative
---------------------------------------------- ---------------- ===============
2
---------------------------------------------- ---------------- ===============
8. Seasoned Loan Availability
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(a) Seasoned-Loan Sublimit $6,000,000
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(b) Lesser of either Line 1(c) or $
Line 8(a)
---------------------------------------------- ---------------- ===============
---------------------------------------------- ---------------- ===============
(c) Line 8(b) minus Line 2(c), Maximum $
Borrowings against Seasoned Loans if
positive or Borrowing Excess if
negative
---------------------------------------------- ---------------- ===============
The Principal Debt of Warehouse Borrowings to each Lender is as follows:
------------------------------ -------------- ----------------
LENDER Commitment Share of
Percentage Line 2(h)
of Line 5(a)
------------------------------ -------------- ----------------
------------------------------ -------------- ----------------
Bank One, Texas, N.A. % $
------------------------------ -------------- ----------------
------------------------------ -------------- ----------------
NationsBank, N.A. % $
------------------------------ -------------- ----------------
------------------------------ -------------- ----------------
Chase Bank of Texas, % $
National Association
------------------------------ -------------- ----------------
------------------------------ -------------- ----------------
Comerica Bank % $
------------------------------ -------------- ----------------
------------------------------ -------------- ----------------
PNC Bank, National % $
Association
------------------------------ -------------- ----------------
------------------------------ -------------- ----------------
FMB Bank % $
------------------------------ -------------- ----------------
------------------------------ -------------- ----------------
Guaranty Federal Bank, F.S.B. % $
------------------------------ -------------- ----------------
------------------------------ -------------- ----------------
U.S. Bank National % $
Association
------------------------------ -------------- ----------------
------------------------------ -------------- ----------------
First Union National Bank % $
------------------------------ -------------- ----------------
------------------------------ -------------- ----------------
SunTrust Bank, Atlanta % $
------------------------------ -------------- ----------------
In additional to the above, the total Commitment Usage does not exceed the
lesser of either (i) the total Commitments or (ii) the total Borrowing Base.
BANK ONE, TEXAS, N.A., as Administrative Agent
By
Name:
Title:
--------------------------------
1 But never more than %100 of the face amount less discounts.
3
EXHIBIT C-4
BORROWING-BASE REPORT FOR WORKING CAPITAL
AGENT: Bank One, Texas, N.A. DATE:________________________
▇▇▇▇▇▇: ▇▇▇▇▇▇ Mortgage Company
This report is delivered to Administrative Agent under the Restated Loan and
Security Agreement (as renewed, extended, and amended, the "Loan Agreement")
dated as of May 21, 1999, between Associates, ▇▇▇▇▇▇, Documentation Agent,
Co-Agents, Administrative Agent, and certain lenders. Terms defined in the Loan
Agreement have the same meanings when used, unless otherwise defined, in this
report. ▇▇▇▇▇▇ has calculated the Borrowing Base for Working-Capital and its
various components as of the date of this report.
---------------------------------------------- ---------------- ---------------
1. Borrowing Base for Eligible Foreclosure
Receivables
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
(a) Ending Collateral balance (last $
report)
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
(b) Repayments (since last report) $
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
(c) New Eligible Foreclosure $
Receivables (since last report)
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
(d) Total of Line 1(a) minus Line 1(b) $ plus Line 1(c)
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
(e) 80% of Line (d) $
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
2. Borrowing Base for Eligible P&I
Receivables
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
(a) Ending Collateral balance (last $
report)
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
(b) Repayments (since last report) $
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
(c) New Eligible P&I Receivables (since $ last report)
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
(d) Total of Line 2(a) minus Line 2(b) $ plus Line 2(c)
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
(e) 90% of Line 2(d) $
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
3. Borrowing Base for Eligible T&I
Receivables
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
(a) Ending Collateral balance (last $
report)
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
(b) Repayments (since last report) $
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
(c) New Eligible T&I Receivables
(since last report)
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
(d) Total of Line 3(a) minus Line
3(b) plus Line 3(c)
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
(e) 80% of Line 3(d) $
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
4. Borrowing Base for Working Capital, total of Lines 1(e), 2(e), plus 3(e)
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
5. Principal Debt of Working-Capital $
Borrowings
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
6. Working-Capital Sublimit $5,000,000
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
7. Lesser of either Line 5 or Line 6 $
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
8. Line 7 minus Line 4, maximum $
Working-Capital Borrowing if positive or
Borrowing Excess if negative
---------------------------------------------- ---------------- ---------------
---------------------------------------------- ---------------- ---------------
9. Lesser of either Line 5 or Line 8, maximum Working-Capital Borrowing
---------------------------------------------- ---------------- ---------------
▇▇▇▇▇▇ certifies that (a) the above information is accurate, (b) the
representations and warranties of the Companies in the Loan Documents are true
and correct in all material respects except to the extent that (i) a
representation or warranty speaks to a specific date or (ii) the facts on which
a representation or warranty is based have changed by transactions or conditions
contemplated or permitted by the Loan Documents, and (c) no Default or Potential
Default exists.
▇▇▇▇▇▇ MORTGAGE COMPANY
By
Name:
1Title:
-----------------------------
1 Must be a Responsible Officer of, or an individual designated in writing to
Administrative Agent by a Responsible Officer of, ▇▇▇▇▇▇.
2
EXHIBIT C-5
COMPLIANCE CERTIFICATE
AGENT: Bank One, Texas, N.A. DATE: , 19
-------------------- ---
ASSOCIATES: Associates Mortgage Funding Corporation
▇▇▇▇▇▇: ▇▇▇▇▇▇ Mortgage Company
SUBJECT PERIOD: ____________________ ended _______________
This certificate is delivered under the Restated Loan and Security
Agreement (as renewed, extended, and amended, the "Loan Agreement") dated as of
May 21, 1999, between Associates, ▇▇▇▇▇▇, Documentation Agent, Co-Agents,
Administrative Agent, and certain lenders. Terms defined in the Loan Agreement
have the same meanings when used, unless otherwise defined, in this certificate.
Solely on behalf of the Company for which each undersigned officer has
executed this certificate, that undersigned officer certifies to Administrative
Agent and Lenders, that on the date of this certificate:
1. That undersigned officer is the officer of that Company designated
below.
2. That Company's consolidated Financial Statements that are attached to
this certificate were prepared in accordance with GAAP and present fairly that
Company's consolidated financial position and results of operations as of, and
for the one, two, or three quarters of fiscal year, as the case may be, ending
on, the last day of the Subject Period.
3. That undersigned officer supervised a review of that Company's
activities during the Subject Period in respect of the following matters and has
determined the following: (a) To that undersigned officer's best knowledge,
except to the extent that (i) a representation or warranty speaks to a specific
date or (ii) the facts on which a representation or warranty is based have
changed by transactions or conditions contemplated or permitted by the Loan
Documents, that Company's representations and warranties in Section 6 of the
Loan Agreement are true and correct in all material respects, other than for the
changes, if any, described on the attached Schedule 1; (b) that Company has
complied with all of its obligations under the Loan Documents, other than for
the deviations, if any, described on the attached Schedule 1; (c) no Default or
Potential Default exists or is imminent, other than those, if any, described on
the attached Schedule 1; and (d) that Company's compliance with the financial
covenants in Section 9 of the Loan Agreement is accurately calculated on the
attached Schedule 1.
Name: Name:
1Title: 1Title:
------------------------------------
1 Must be a Responsible Officer.
2
SCHEDULE 1
A. Describe deviations from compliance with obligations, if any, clause
3(b) of attached Compliance Certificate, if none, so state:
B. Describe Potential Defaults or Defaults, if any, clause 3(c) of the
attached Compliance Certificate, if none, so state:
C. Calculate compliance with covenants in Section 9 at end of Subject Period
(on a consolidated basis), clause 3(d) of the attached Compliance Certificate:
----------------------------------------------- -------------------------------
Covenant At End of Subject Period
----------------------------------------------- -------------------------------
----------------------------------------------- --------------- ---------------
1. Investments in ▇▇▇▇▇▇ Group, ss.8.3
(quarterly)
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(a) Actual $
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(b) 50% of Line 2(a)
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(c) 7,500,000
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(d) Maximum, Lesser of Line 1(b) and $
Line 1(c)
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
2. Associates' Stockholders' Equity, ss.9.1(a)
(quarterly)
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(a) Actual $
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(b) Minimum $1,000,000
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
3. ▇▇▇▇▇▇'▇ Net Worth, ss.9.1(b) (quarterly)
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(a) Stockholder's equity $
----------------------------------------------- --------------- ---------------
3
----------------------------------------------- --------------- ---------------
(b) Minimum $15,000,000
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
4. ▇▇▇▇▇▇'▇ Leverage Ratio, ss.9.2 (quarterly)
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(a) Total liabilities $
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(b) Repurchase obligations permitted to $
be excluded
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(c) Line 4(a) minus Line 4(b) $
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(d) Line 3(a) $
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(e) Qualifying long term Debt $
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(f) Goodwill $
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(g) Patents, trademarks, etc. $
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(h) Other intangible assets $
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(i) Tangible-Net Worth -- Line 4(d) plus $
Line 4(e) minus the sum of Line 4(f)
through Line 4(h)
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(j) Actual, Ratio of Line 4(c) to _____ to _____
Line 3(a)
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(k) Maximum 13.5 to 1.0
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
5. Associates' Net Income, ss.9.3 (annually)
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(a) Actual $
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(b) Minimum $1.00
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
6. ▇▇▇▇▇▇'▇ Cash Flow, ss.9.4 (rolling 4 quarters)
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(a) Net income (exclude reported $
non-cash income) or loss
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(b) Amortization $
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(c) Depreciation $
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(d) Other noncash charges $
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(e) Actual, Total of Lines 6(a) through $
6(d)
----------------------------------------------- --------------- ---------------
----------------------------------------------- --------------- ---------------
(f) Minimum $1.00
----------------------------------------------- --------------- ---------------
4
BANK 1 ▇▇▇
▇▇▇▇ ▇▇▇, ▇▇▇▇▇, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT D-1
BAILEE LETTER FOR INVESTORS
-------------------------
-------------------------
-------------------------
The enclosed mortgage notes and other documents ("Collateral"), as more
particularly described on the attached schedule, have been assigned and pledged
to Bank One, Texas, N.A., as Administrative Agent ("Administrative Agent") for
itself and certain other Lenders ("Lenders"), as collateral under the Restated
Loan and Security Agreement (as renewed, extended, amended, and restated, the
"Loan Agreement") dated as of May 21, 1999, between Associates Mortgage Funding
Corporation ("Associates"), ▇▇▇▇▇▇ Mortgage Company ("▇▇▇▇▇▇"), Documentation
Agent, Co-Agents, Administrative Agent, and Lenders.
The Collateral is now being delivered to you for purchase under an existing
Take-Out Commitment (as defined in the Loan Agreement). Either payment in full
for the Collateral or the Collateral itself must be received by Administrative
Agent within 45 days after the date of this letter except, in the case of Bond
Authority Loans, in which up to $10,000,000 may remain outstanding for 150 days.
Until that time, you are deemed to be holding the Collateral in trust, subject
to the security interest granted to Administrative Agent for Lenders and as
Administrative Agent's bailee in accordance with the applicable provisions of
the Uniform Commercial Code. If you receive conflicting instructions regarding
the Collateral from any of Associates, ▇▇▇▇▇▇, or Administrative Agent, you
agree to act in accordance with Administrative Agent's instructions.
Payment for the Collateral must be made by wire transfer of immediately
available funds to:
Bank One, Texas, N.A. Account Number___________________
ABA Number ▇▇▇▇▇▇▇▇▇ Attn:____________________________
Further Credit - ▇▇▇▇▇▇ Mortgage Phone # (▇▇▇) ▇▇▇-▇▇▇▇
Company
If the foregoing accurately reflects your understanding of your role with
respect to the Collateral, and in particular your status as bailee, please
execute the enclosed copy of this letter and return it to Administrative Agent.
Otherwise, please notify Administrative Agent and return all of the enclosed
Collateral to Administrative Agent within 15 days after the date of this letter.
If you fail to execute and return to Administrative Agent a copy of this letter
or fail to return to Administrative Agent all of the enclosed Collateral within
15 days after the date of this letter, then you have accepted possession of the
Collateral as Administrative Agent's bailee in trust and subject to the security
interest granted to Administrative Agent for Lenders. If you fail to return to
Administrative Agent all of the enclosed Collateral or full payment for it
within 45 days after the date of this letter, then you have purchased the
Collateral and are liable to Administrative Agent for the full purchase price
for it.
Very truly yours,
BANK ONE, TEXAS, N.A., as Administrative Agent
By
Name:
Title:
ACKNOWLEDGED AND AGREED as of _____________.
[NAME OF INVESTOR]
By
Name:
Title:
2
BANK 1 ▇▇▇
▇▇▇▇ ▇▇▇, ▇▇▇▇▇, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT D-2
BAILEE LETTER FOR POOL CUSTODIAN
------------------------
------------------------
------------------------
The enclosed mortgage notes and other documents (the "Collateral"), as more
particularly described on the attached schedule, have been assigned and pledged
to Bank One, Texas, N.A., as Administrative Agent ("Administrative Agent") for
itself and certain other lenders ("Lenders"), as Collateral under the Restated
Loan and Security Agreement (as renewed, extended, amended, and restated, the
"Loan Agreement") dated as of May 21, 1999, between Associates Mortgage Funding
Corporation ("Associates"), ▇▇▇▇▇▇ Mortgage Company ("▇▇▇▇▇▇"), Documentation
Agent, Co-Agents, Administrative Agent, and Lenders.
The Collateral is now being delivered to you as custodian for pooling in
connection with the issuance of Mortgage Securities (as defined in the Loan
Agreement). Those Mortgage Securities or the Collateral itself must be received
by Administrative Agent within 45 days after the date of this letter. Until that
time, you are deemed to be holding the Collateral in trust, subject to the
security interest granted to Administrative Agent for Lenders as Administrative
Agent's bailee in accordance with the applicable provisions of the Uniform
Commercial Code. If you receive conflicting instructions regarding the
Collateral from any of Associates, ▇▇▇▇▇▇, or Administrative Agent, you agree to
act in accordance with Administrative Agent's instructions.
If the foregoing accurately reflects your understanding of your role with
respect to the Collateral, and in particular your status as bailee, please
execute the enclosed copy of this letter and return it to Administrative Agent.
Otherwise, please notify Administrative Agent and return all of the enclosed
Collateral to Administrative Agent within 15 days after the date of this letter.
If you fail to execute and return to Administrative Agent a copy of this letter
or fail to return to Administrative Agent all of the enclosed Collateral within
15 days after the date of this letter, then you have accepted possession of the
Collateral as Administrative Agent's bailee in trust and subject to the security
interest granted to Administrative Agent for Lenders.
Very truly yours,
BANK ONE, TEXAS, N.A., as
Administrative Agent
By
Name:
Title:
ACKNOWLEDGED AND AGREED as of __________________.
[NAME OF POOL CUSTODIAN]
By
Name:
Title:
2
EXHIBIT D-3
TRUST RECEIPT AND AGREEMENT
AGENT: Bank One, Texas, N.A. DATE:_________________
▇▇▇▇▇▇: ▇▇▇▇▇▇ Mortgage Company
The undersigned hereby agrees to deliver to Bank One, Texas, N.A. the
items enumerated in the following schedule, which items are the property of said
Bank or which is property (or indicia of title to property) which constitutes
collateral to secured payment of an indebtedness to the Bank. Said items are
held in trust and subject always to the order of said Bank and will be kept
separate and apart from all other items. In the event any of the items listed
are sold or collected, the monies or proceeds so received will be held in trust
for Bank One, Texas, N.A. and will be kept separate and apart from all other
monies and will be delivered forthwith to said Bank.
The following is a schedule of items held in trust by Undersigned:
It is further understood and agreed that said items or documents or
proceeds thereof (in case said items or documents should be sold or collected by
direction of Bank) are to be delivered to Bank on its demand and in any event
not later than _______________________.
By
Name:
Title:
EXHIBIT D-4
REQUEST FOR RELEASE
AGENT: Bank One, Texas, N.A. DATE:_____________________
▇▇▇▇▇▇: ▇▇▇▇▇▇ Mortgage Company
THIS REQUEST is made as of ___________________, by ▇▇▇▇▇▇ MORTGAGE COMPANY,
an Ohio corporation ("▇▇▇▇▇▇"), to BANK ONE, TEXAS, N.A., as Administrative
Agent ("Administrative Agent") for itself and the other lenders ("Lenders")
under the Restated Loan and Security Agreement (as renewed, extended, and
amended, the "Loan Agreement") dated as of May 21, 1999, between ▇▇▇▇▇▇,
Associates, Documentation Agent, Co-Agents, Administrative Agent, and certain
Lenders, all of the terms defined in which have the same meanings when used,
unless otherwise defined, in this request.
Under Section 4.10 of the Loan Agreement, ▇▇▇▇▇▇ may from time to time
under certain circumstances request the release of any Lender Liens on, in
connection with the sale of, Servicing Rights. ▇▇▇▇▇▇ proposes to sell (the
"Sale") the Servicing Rights identified on the attached Schedule 1 (the
"Subject-Servicing Rights") to ________________ ,under the ____________________
Agreement dated as of _________________ , a complete and authentic copy of which
accompanies this request.
1. ▇▇▇▇▇▇ requests that Administrative Agent release the Lender Liens on
the Subject-Servicing Rights by execution of a copy of this request in the space
below and execution and delivery of the one or more partial releases of
financing statements, delivered to Administrative Agent with this request, and
substantially in the form of the attached Annex A.
2. ▇▇▇▇▇▇ represents and warrants to Administrative Agent and Lenders
that, as of the date of this request (a) the Subject-Servicing Rights relate
only to the Mortgage Pools described on the attached Schedule 1 and no other
Mortgage Pools, (b) the total Servicing Portfolio is $______________ and after
the Sale will be $_________________, and (c) no Default or Potential Default
exists or results from the Sale and the requested release.
EXECUTED as of the date first stated above.
▇▇▇▇▇▇ MORTGAGE COMPANY
By
Name:
1Title:
RELEASE
In accordance with the above request dated as of ________, Administrative
Agent releases the Subject-Servicing Rights from the Lender Liens of the Loan
Agreement. This is a partial release and does not release any other Lender Liens
or any other Collateral.
BANK ONE, TEXAS, N.A., as Administrative Agent
By
Name:
Title:
---------------------------------
1 Must be a Responsible Officer of ▇▇▇▇▇▇.
2
ANNEX A
FINANCING STATEMENT CHANGE
(Partial Release)
THIS FINANCING STATEMENT CHANGE IS PRESENTED TO A FILING
OFFICER FOR FILING UNDER THE UNIFORM COMMERCIAL CODE.
-------------------------------------------- ==================================
DEBTOR'S NAME AND MAILING ADDRESS: ▇▇▇▇▇▇ Mortgage Company
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FED. TAX ID NO. ▇▇-▇▇▇▇▇▇▇
-------------------------------------------- ==================================
-------------------------------------------- ==================================
SECURED PARTY OF RECORD AND MAILING Bank One, Texas, N.A., as
ADDRESS: Administrative Agent for Lenders1
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
FED. TAX ID NO. ▇▇-▇▇▇▇▇▇▇
-------------------------------------------- ==================================
-------------------------------------------- ==================================
FOR FILING OFFICER:
-------------------------------------------- ==================================
-------------------------------------------- ==================================
THIS FINANCING STATEMENT CHANGE REFERS TO: Financing Statement No.
filed on
-------------------------------------------- ==================================
THE SECURED PARTY OF RECORD RELEASES THE FOLLOWING COLLATERAL FROM THE SECURITY
INTEREST UNDER THE ORIGINAL FINANCING STATEMENT AND COMPLETELY RELEASES AND
DISCHARGES THAT COLLATERAL FROM ANY AND ALL SECURITY INTERESTS AND LIENS GRANTED
OR ASSIGNED TO THE SECURED PARTY (WITHOUT IMPAIRING ANY SECURITY INTERESTS IN
AND TO THE OTHER COLLATERAL DESCRIBED IN THE ORIGINAL FINANCING STATEMENT):
The Servicing Rights (as defined in the original Financing Statement) that
are described on the attached Schedule 1, but no other Servicing Right or other
Collateral (as those terms are defined in the original Financing Statement).
SECURED PARTY:
BANK ONE, TEXAS, N.A., as Administrative
Agent for Lenders1
By
Name:
Title:
----------------------------
1 Secured Party is serving as Administrative Agent under the Loan and Security
Agreement (as renewed, extended, amended, and restated, from time to time,
the "Loan Agreement") dated as of May 27, 1994, between Associates Mortgage
Funding Corporation, Debtor, Secured Party, and the lenders ("Lenders") from
time to time party to it, and the security interests evidenced by the
original Financing Statement, changed by this Financing Statement Change,
were and continue to be granted to Secured Party in that capacity on behalf
of Lenders.
2
EXHIBIT E
OPINION OF GENERAL COUNSEL
May 21, ▇▇▇▇
▇▇▇▇ ▇▇▇, ▇▇▇▇▇, N.A.
NationsBank, ▇.▇.
▇▇▇▇▇ Bank of Texas, National Association
Guaranty Federal Bank, F.S.B.
Comerica Bank
U.S. Bank National Association
FMB Bank
First Union National Bank
PNC Bank, National Association
SunTrust Bank, Atlanta
▇/▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇, N.A., Administrative Agent
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
I am General Counsel to Associates Mortgage Funding Corporation ("Associates")
and ▇▇▇▇▇▇ Mortgage Company ("▇▇▇▇▇▇"), and render this opinion as a condition
precedent in connection with the Restated Loan and Security Agreement (the "Loan
Agreement") dated as of May 21, 1999, between Associates and ▇▇▇▇▇▇ (the
"Companies"), Documentation Agent, Co-Agents, certain Lenders, and Bank One,
Texas, N. A., as agent for itself and the Lenders.
All capitalized terms used in this letter have the meanings assigned to them in
the Loan Agreement.
In my capacity as General Counsel and for purposes of this opinion, I have
examined the following documents:
(i) the Loan Agreement, the Loan Documents (as defined in Section 1.1 of
the Loan Agreement), and the Intercompany Note (collectively, the "Loan
Documents");
(ii) the respective charters and the by-laws or code of regulations of the
Companies;
(iii) the respective records of the corporate proceedings and actions of
the Board of Directors of the Companies with respect to the transactions
contemplated by the Loan Documents;
(iv) Certificates of good standing of the Companies from the states of
their incorporation; and
(v) such other documents and matters as I have deemed necessary and
appropriate to render the opinions set forth in this letter, subject to the
limitations, assumptions, and qualifications noted below.
In basing the opinion set forth in Paragraph 6 below on "my knowledge," the
words "my knowledge" signify that, in the course of my representation of the
Companies as General Counsel, no information has come to my attention that would
give me actual knowledge or actual notice that such opinion is not accurate.
Except as otherwise stated herein, I have undertaken no independent
investigation or verification of such opinion.
In reaching the opinions set forth below, I have assumed (and, to my knowledge,
there are no facts inconsistent with) the following:
(a) each party thereto (other than the Companies) has duly and validly
executed and delivered the Loan Documents to which that party is a signatory,
and that party's obligations set forth therein are its legal, valid, and binding
obligations, enforceable in accordance with their respective terms;
(b) each individual executing any Loan Document on behalf of any party
thereto (other than the Companies) is duly authorized to do so;
(c) each natural person executing any Loan Document (other than on behalf
of either Company) is legally competent to do so;
(d) except as contemplated in the Loan Documents, there are no oral or
written modifications of the Loan Documents, and there has been no waiver of any
of the provisions of the Loan Documents, by actions or conduct of the parties or
otherwise; and
(e) all documents submitted to me as originals are authentic, all
documents submitted to me as certified or photostatic copies conform to the
original document, all signatures on all documents submitted to me for
examination are genuine, and all public records reviewed are accurate and
complete.
Based on my review of the foregoing and subject to the assumptions and
qualification set forth herein, it is my opinion that, as of the date of this
letter (except where specifically stated otherwise):
1. Associates is a corporation duly organized and validly existing in good
standing under the laws of the State of Delaware. ▇▇▇▇▇▇ is a corporation duly
organized and validly existing in good standing under the laws of the State of
Ohio. The Companies are also duly qualified to do business and are in good
standing in each jurisdiction where they own properties or conduct business and
where the character of the properties owned by them therein or the transaction
of business makes such qualification necessary.
2. Each Company has the corporate power to own its current properties and
conduct its business as now conducted and to execute and perform its respective
obligations under the Loan Documents.
3. All necessary corporate action has been taken to authorize the
execution, delivery, and performance of the Loan Documents by the Companies.
4. The Loan Documents have been duly executed and delivered by the
Companies and constitute the valid and legally binding obligations of the
Company party to them, enforceable against that Company in accordance with their
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium,
and
2
other similar laws affecting the rights of creditors generally and the exercise
of judicial discretion in accordance with general principles of equity.
5. The execution and delivery of, and the performance of the obligations
under, the Loan Documents (i) will not conflict with either Company's charter,
by-laws, or code of regulations, (ii) will not violate or result in the material
breach of the provisions of, or constitute a material default under, any of the
indentures, mortgages, deeds of trust, security agreements, leases, contracts,
and other agreements and instruments to which either Company is a party and the
violation, breach, or default of which could have a material adverse effect on
that Company's business or financial condition, and (iii) will not conflict with
or result in the breach of any court decree or order of any governmental body
binding on either Company.
6. There are no proceedings pending or threatened before any court or
administrative agency that will materially adversely affect the financial
condition or operation of either Company.
7. To my knowledge, no consent, approval, authorization or other action
by, or filing with, any governmental authority is required for the execution and
delivery by either Company of the Loan Documents.
8. The Loan Agreement provides for (a) certain amendments under Section
12.11(b) of the Loan Agreement, (b) certain participations to Participants and
assignments and transfers to Purchasers under Sections 12.14 and 12.15 of the
Loan Agreement, and the execution and delivery by the appropriate Company of
replacement or new Notes, as the case may be, in connection with certain of
those amendments or assignments and transfers. The resolutions adopted by the
Companies' respective Boards of Directors respectively authorize the execution
and delivery of Associates Notes in the total principal amount at any time of up
to at least $200,000,000 and ▇▇▇▇▇▇ Notes in the total principal amount at any
time of up to at least $5,000,000. When executed and delivered as provided in
those sections of the Loan Agreement, and provided that such resolutions are
then in effect, those amendments and those Notes, will the constitute "Loan
Documents" for purposes of Paragraphs 2, 3, 4, and 6 of this opinion, and the
statements made in Paragraphs 2, 3, 4, and 6 of this opinion will be true and
correct in respect thereof at that time.
I am a member of the Bar of the State of Maryland. I express no opinion as to
the laws of any jurisdiction other than the laws of the State of Maryland,
except that I have examined the corporate laws of the States of Delaware, and
Ohio solely for the purpose of rendering the opinions concerning the
organization of Associates and ▇▇▇▇▇▇, respectively. Except for the foregoing,
the opinions expressed herein concern only the effect of the laws of the State
of Maryland (including the conflict of laws rules of the State of Maryland but
excluding the laws of any other jurisdiction which might be applied because of
such rules) and the United States of America as currently in effect. I assume no
obligation to supplement this opinion if any applicable laws change alter the
date hereof or if I become aware of any facts that might change the opinions
expressed herein alter the date hereof. To the extent that the Loan Documents
are governed by Texas Legal Requirement, I assume that the laws of Texas are the
same as the laws of Maryland.
The opinions expressed in this letter are solely for the use of the
Administrative Agent, Lenders named above, and, to the extent contemplated in
Sections 12.14 and 12.15 of the Loan Agreement, Participants and Purchasers, and
these opinions may not be relied on by any other persons without my prior
written approval. The opinions expressed in this letter are limited to the
matters set forth in this letter, and no other opinions should be inferred
beyond the matters expressly stated.
Very truly yours,
3
-----------------
Corporate Counsel
4
EXHIBIT F-1
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Restated Loan and Security Agreement dated as of
May 21, 1999 (as renewed, extended, amended, or replaced, the "Loan Agreement"),
between Associates, ▇▇▇▇▇▇, NationsBank, N.A., as "Documentation Agent,"
Guaranty Federal Bank, F.S.B. and PNC Bank, N.A., as "Co-Agents," Bank One,
Texas, N.A., as Administrative Agent ("Administrative Agent"), and the lenders
under it ("Lenders"). Terms defined in the Loan Agreement have the same meanings
when used, unless otherwise defined, in this document.
__________________________ ("Assignor"), and
_________________________________ ("Assignee") agree as follows:
1. Assignor sells and assigns to Assignee (without recourse to Assignor),
in accordance with Section 12.15 of the Loan Agreement, a ___% interest (the
"Assigned Interest") in and to all of the Rights of Assignor under the Loan
Documents, and Assignee purchases and accepts from Assignor the Assigned
Interest and assumes all of the obligations of Assignor under the Loan Documents
to the extent of the Assigned Interest, including, without limitation (a) all
Borrowings funded by Assignor and outstanding on the Effective Date (as defined
below), together with interest accruing thereon on and after the Effective Date,
and (b) all fees described in Section 3.18 of the Loan Agreement that are earned
by Lenders from and after the Effective Date and paid by the Companies after the
Effective Date. From and after the Effective Date (x) Assignee is a party to the
Loan Agreement and, to the extent of the Assigned Interest, has the Rights and
obligations of a Lender under the Loan Documents and (y) Assignor, to the extent
of the Assigned Interest, relinquishes its Rights and is released from its
obligations under the Loan Documents.
2. Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties, or representations
made by either Company in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency,
collectibility, or value of any Loan Document, other than that it is the sole
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any claim, encumbrance, or
participation; (b) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of either Company or the
performance or observance by either Company of any of its respective obligations
under any Loan Document; (c) represents and warrants that (i) it possesses all
requisite authority and power to execute, deliver, and comply with the terms of
the Loan Documents (including, without limitation, this document), (ii) the Loan
Agreement and the instruments contemplated therein constitute the entire
agreement between the Companies, Administrative Agent, and Lenders, (iii) the
Loan Agreement has not been amended, (iv) to its knowledge, no Default or
Potential Default has occurred pursuant to the Loan Documents, and (v) this
document complies with the terms of the Loan Agreement, including, without
limitation, Section 12.15, and (d) attaches the Notes held by it and requests
that Administrative Agent exchange those Notes for a new Associates Note
executed by Associates and payable to Assignee's order in the stated amount of
$_____________________ and a new ▇▇▇▇▇▇ Note executed by ▇▇▇▇▇▇ and payable to
Assignee's order in the stated amount of $______________________ and a new
Associates Note executed by Associates and payable to Assignor's order in the
stated amount of $_____________________ and a new ▇▇▇▇▇▇ Note executed by ▇▇▇▇▇▇
and payable to Assignor's order in the stated amount of $______________________,
less
the principal amount of any other new Note(s) to any other assignee(s) of
Assignor pursuant to other Assignment and Acceptance agreements effective as of
the Effective Date.
3. Assignee (a) represents and warrants that it is legally authorized to
enter into this document; (b) confirms that it has received a copy of the Loan
Agreement and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this document; (c)
agrees that it will, independently and without reliance upon Administrative
Agent, Assignor, or any other Lender and based on such documents and information
as it deems appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Loan Agreement; (d) appoints and
authorizes Administrative Agent to take such action as agent on its behalf and
to exercise such powers under the Loan Agreement as are delegated to
Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (e) agrees that it will perform in accordance
with their terms all the obligations which by the terms of the Loan Agreement
are required to be performed by it as a Lender; (f) represents and warrants that
it does not consider any amount paid by it to Assignor hereunder a loan by it to
Assignor; and (g) represents and warrants to Assignor that under applicable
Legal Requirements no Taxes will be required to be withheld by Administrative
Agent, the Companies, or Assignor with respect to any payments to be made to
Assignee in respect of the Obligation, attaches hereto two duly completed copies
of U.S. Internal Revenue Service Form 4224, Form 1001, Form W-8, or any other
Tax form acceptable to Administrative Agent (wherein the Assignee claims
entitlement to complete exemption from U.S. federal withholding tax on all
interest payments made on the Obligation), and agrees to provide to Assignor,
Administrative Agent, and the Companies a new tax form upon the obsolescence of
any previously delivered form and comparable statements in accordance with
applicable U.S. Legal Requirements and regulations and amendments duly executed
and completed by Assignee, and to comply from time to time with all applicable
U.S. Legal Requirements with regard to such withholding Tax exemption.
4. The effective date for this document is ________________ (the
"Effective Date").
5. From and after the Effective Date, Administrative Agent shall make all
payments in respect of the interest assigned hereby (including payments of
principal, interest, fees, and other amounts) to Assignee. Assignor and Assignee
shall make all appropriate adjustments in payments for periods prior to the
Effective Date by Administrative Agent or with respect to the making of this
assignment directly between themselves.
6. This document is governed by and must be construed in accordance with
Texas Legal Requirements.
7. This document (a) embodies the entire agreement between the parties,
supersedes all prior agreements and understandings, if any, relating to the
subject matter hereof, and may be amended only by an instrument in writing
executed jointly by an authorized officer of each party hereto, (b) is not
intended to evidence a "purchase" or "sale" of a "security" within the meaning
of any Legal Requirement, and (c) may be executed in a number of identical
counterparts, each of which shall be deemed an original for all purposes and all
of which shall constitute, collectively, one agreement; but, in making proof of
this document, it is not necessary to reproduce or account for more than one
counterpart.
8. Any amounts due hereunder from Assignor to Assignee shall be wire
transferred by the Assignor to Assignee's account at
_________________________________________, ABA #_________, for credit to
________________ account #_____________, Attention: ______________, Reference:
___________. Any amounts due hereunder from Assignee to Assignor shall be wire
transferred by Assignee
2
to Assignor's account at ___________________________, ABA #_________, Attention:
_____________________ (Ref. ______). For purposes of amending Schedule 1.1(a) to
the Loan Agreement, Assignee's address, contact person, telephone, and facsimile
number are as follows:
Attention:
Telephone:
Fax:
EXECUTED as of ____________________, with an "Effective Date" of
------------------.
ASSIGNOR ASSIGNEE
By By
Name: Name:
Title: Title:
CONSENTED TO:
▇▇▇▇▇▇ MORTGAGE COMPANY ASSOCIATES FUNDING MORTGAGE
CORPORATION
By By
Name: Name:
Title: Title:
BANK ONE, TEXAS, N.A., as
Administrative Agent
By
Name:
Title:
3