Exhibit 10.2
MORTGAGE WAREHOUSING CREDIT AND SECURITY AGREEMENT
Dated as of December 24, 2001
Among
PW FUNDING INC.,
CAMBRIDGE HEALTHCARE FUNDING INC.,
and
▇▇▇▇▇▇ FINANCIAL RESOURCES, INC.,
Borrowers
FLEET NATIONAL BANK
Agent
and
THE LENDERS NAMED HEREIN FROM TIME TO TIME
(INCLUDING FLEET NATIONAL BANK IN SUCH CAPACITY)
Lenders
Up to $100,000,000
MORTGAGE WAREHOUSING CREDIT AND SECURITY AGREEMENT
--------------------------------------------------
THIS MORTGAGE WAREHOUSING CREDIT AND SECURITY AGREEMENT is made and
entered into as of the _____ day of __________, 2001, by and among PW FUNDING
INC., a Delaware corporation ("PWF"), CAMBRIDGE HEALTHCARE FUNDING INC., a
Delaware corporation ("Cambridge"), and ▇▇▇▇▇▇ FINANCIAL RESOURCES, INC., a New
Jersey corporation ("▇▇▇▇▇▇"), (hereinafter, PW, Cambridge and ▇▇▇▇▇▇ are
referred to singly as a "Borrower" and collectively as the "Borrowers"), FLEET
NATIONAL BANK as a Lender (as hereinafter defined) and as agent (in such
capacity, the "Agent") for itself and the other Lenders, and such Lenders.
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. BACKGROUND.
1.1 Defined Terms. Capitalized terms used in this Agreement which are
not otherwise defined herein are defined either in Exhibit A, or in another Loan
Document, as provided in Exhibit A.
1.2 Establishment of Facility. The Borrowers have requested that the
Lenders establish this secured mortgage warehousing facility (the "Facility"),
the proceeds of the Warehousing Advances made under which shall be used by the
respective Borrowers to fund Eligible Loans. The Borrowers shall be jointly and
severally liable for all Obligations hereunder, regardless of which Borrower
requested any particular Warehousing Advance or provided any particular item of
Collateral hereunder.
1.3 Guarantor. Each Guarantor shall guaranty the Obligations subject to
the terms and conditions of their respective Guaranties.
1.4 General. Unless otherwise specified in the Loan Documents: (i)
references in a Loan Document to "Sections," "Exhibits," and "Schedules" are to
sections, exhibits, and schedules in and to such Loan Document, (ii) references
in a Loan Document to any document, instrument, or agreement (a) shall include
all exhibits, schedules, and other attachments thereto, (b) shall include all
documents, instruments, or agreements issued or executed in replacement thereof,
to the extent permitted hereby, and (c) shall mean such document, instrument, or
agreement, or replacement or predecessor thereto, as amended, supplemented,
restated, or otherwise modified from time to time to the extent permitted hereby
and in effect at any given time, (iii) wherever from the context it appears
appropriate, each term stated in either the singular or plural shall include the
singular and plural, and pronouns stated in the masculine, feminine, or neuter
gender shall include the masculine, the feminine, and the neuter, (iv) unless
explicitly set forth to the contrary, a reference to a "Subsidiary" means a
Subsidiary of a Borrower or a Subsidiary of such Subsidiary, and a reference to
an "Affiliate" means a reference to an Affiliate of a Borrower, (v) titles and
captions of Sections, subsections, and clauses in any Loan Document are for
convenience only, and neither limit nor amplify the provisions of this
Agreement, (vi) unless otherwise indicated, all references to time are
references to Boston, Massachusetts, time, (vii) all references to money
(including the symbol "$") are to lawful currency of the United States,
references to "including" mean including without limiting the generality of any
description preceding that word, (viii)
-2-
the rule of construction that references to general items that follow references
to specific items are limited to the same type or character of those specific
items is not applicable in the Loan Documents, (ix) references to any Person
include that Person's heirs, personal representatives, successors, trustees,
receivers, and permitted assigns, and (x) references to any Legal Requirement
include every amendment or supplement to it, rule and regulation adopted under
it, and successor or replacement for it,.
1.5 Accounting Principles. All accounting and financial terms used in
the Loan Documents and the compliance with each financial covenant therein shall
be determined in accordance with GAAP, and all accounting principles shall be
applied on a consistent basis so that the accounting principles in a current
period are comparable in all material respects to those applied during the
preceding comparable period. The Borrowers shall notify the Agent of any change
in GAAP from that in effect on the date hereof which would in any way effect the
operation of any covenant in any Loan Documents (including covenants which
relate to Persons other than the Borrowers, such as PWF and the Guarantors)
whereupon, the Agent and the Borrowers shall attempt for a reasonable period
(not to exceed ten (10) Business Days unless the Agent and the Borrower agree to
extend such time period) to agree upon appropriate amendments to the affected
covenants to eliminate such effect and to produce equivalent results, failing
which, for purposes of calculating such financial covenants, GAAP will mean
generally accepted accounting principles on the date just prior to the date on
which any such change in GAAP became effective.
2. LOAN PROVISIONS.
2.1 The Facility.
2.1.1 Subject to the terms and conditions of this Agreement, the
Lenders agree to make Warehousing Advances to Borrowers from the Closing
Date to the Business Day immediately preceding the Maturity Date, during
which period each Borrower may borrow, repay and reborrow in accordance
with the provisions of this Agreement. The aggregate amount of all
Warehousing Advances outstanding from time to time hereunder may
hereinafter collectively be referred to as the "Loan." The aggregate
principal amount of the Loan outstanding at any one time may not exceed
Warehousing Commitment Amount. While a Default or Event of Default
exists, the Lenders may refuse to make any additional Warehousing
Advances to Borrowers. All Warehousing Advances under this Agreement
constitute a single indebtedness, and all of the Collateral is security
for the Notes and for the performance of all of the Obligations.
Warehousing Advances will be made either to PWF, Cambridge or ▇▇▇▇▇▇, as
requested by any of PWF, Cambridge or ▇▇▇▇▇▇, but each Warehousing
Advance, whether made to PWF, Cambridge or ▇▇▇▇▇▇, will be deemed made
to or for the benefit of all of them, and all of them, jointly and
severally, are obligated to repay any Warehousing Advances made to any
of them. With respect to its obligation to repay Warehousing Advances
made to another Borrower, each Borrower agrees to the terms set forth in
Exhibit D.
2.1.2 Maximum Amount of Facility. Subject to the terms and
conditions below, the maximum amount of the Facility shall not exceed
the Warehousing Commitment Amount. Any
-3-
Warehousing Advances under the Facility shall be made by the Lenders pro
rata in accordance with each Lender's Commitment Percentage.
2.1.3 Limitations on Advances In addition to the limitations set
forth on Exhibit E or elsewhere in this Agreement, each Warehousing
Advance to fund a Multifamily Property or a Health Care Facility shall
be limited to the lesser of (x) the Mortgage Note Amount, or (y) the
Committed Purchase Price amount.
2.1.4 Outstanding Balance of the Loan. In the event at any time
the outstanding principal balance of the Loan should exceed the lesser
of (x) the Warehousing Commitment Amount or (y) the aggregate
Warehousing Collateral Value of all Eligible Loans against which
Warehousing Advances are then outstanding, the Borrowers shall repay
such excess amount on demand to the Agent so that the outstanding
principal balance of the Facility is in compliance with the terms and
provisions hereof.
2.2 Term of Loan. The Loan shall mature and become due and payable, and
shall be repaid (together with all accrued and unpaid interest thereon) by the
Borrowers in full, on the Maturity Date.
2.3 Warehousing Advances.
2.3.1 To obtain a Warehousing Advance under this Agreement, a
Borrower must deliver to Agent, not later than 1 Business Day before the
Business Day on which such Borrower desires the Warehousing Advance, a
completed and signed request for a Warehousing Advance ("Warehousing
Advance Request"), on the then current form approved by Agent.
2.3.2 Subject to the delivery of a Warehousing Advance Request,
and the satisfaction of the conditions set forth in Sections 5.1 and
5.2, a Borrower may obtain a Warehousing Advance under this Agreement
upon compliance with the procedures set forth in this Section and in the
applicable Exhibit B, including delivery to Agent of all required
Collateral Documents. Agent's current forms of Warehousing Advance
Request are set forth in Exhibit C. Upon not less than 3 Business Days'
prior Notice to the Borrowers, Agent may modify its form of Warehousing
Advance Request and any other Exhibit referred to in this Section to
conform to current legal requirements or Agent or any Lender practices
and, as so modified, those Exhibits will be deemed a part of this
Agreement.
2.4 Interest Rate and Payment Terms. All Warehousing Advances made under
the Facility shall be payable as to interest and principal in accordance with
the provisions of this Agreement and the Notes. This Agreement also provides for
interest at a Default Rate, Late Charges and prepayment rights and fees. All
payments for the account of Lenders shall be applied to the respective accounts
of the Lenders in accordance with each Lender's Commitment Percentage. The Agent
will disburse such payments to the Lenders on the date of receipt thereof if
received prior to 10:00 a.m. on such date and, if not, on the next Business Day.
Any and all interest rate selection and conversion provisions in this Agreement
are to be administered by the Agent and to be allocated on a pro rata basis to
the Note held by each Lender based upon such Lender's Commitment Percentage.
-4-
2.4.1 Interest Rate. Principal amounts outstanding under the
Loan shall bear interest at the following rates, at the respective
Borrower's selection, subject to the conditions and limitations provided
for in this Agreement: (i) Variable Rate or (ii) LIBOR Rate.
2.4.2 Selection To Be Made. A Borrower requesting a Warehousing
Advance shall select, and thereafter may change the selection of, the
applicable interest rate, from the alternatives otherwise provided for
in this Agreement, by giving Agent a Notice of Rate Selection: (i) at
the time of the request for such Warehousing Advance, (ii) at least
three (3) Business Days prior to the end of the then current Interest
Period applicable to an outstanding LIBOR Advance, or (iii) on any
Business Day on which a Borrower desires to convert an outstanding LIBOR
Rate Advance to a Variable Rate Advance.
2.4.3 Notice. In connection with a request for a Warehousing
Advance, the requesting Borrower shall give to the Agent a "Notice of
Rate Selection" which shall be a written notice, given by telecopier
(with authorized signature), or by telephone if immediately confirmed by
such a written notice, from an Authorized Representative of the
Borrowers which: (i) shall be irrevocable; (ii) is received by Agent not
later than 10:00 o'clock A.M.: (a) if a LIBOR Rate is selected, at least
three (3) Business Days prior to the first Business Day immediately
preceding the Interest Period to which such selection is to apply, (b)
if a Variable Rate is selected, on the first day of the Interest Period
to which it applies; and (iii) as to each selected interest rate option,
sets forth the aggregate principal amount(s) to which such interest rate
option(s) shall apply and the Interest Period(s) applicable to each
LIBOR Advance.
2.4.4 If No Notice. If a Borrower fails to select an interest
rate option in accordance with the foregoing prior to a Warehousing
Advance, or prior to the last day of the applicable Interest Period of
an outstanding LIBOR Advance, or if a LIBOR Advance is not available,
any new Warehousing Advance made shall be deemed to be a Variable Rate
Advance, and on the last day of the applicable Interest Period all
outstanding principal amounts of such Warehousing Advance shall be
deemed converted to a Variable Rate Advance.
2.4.5 Telephonic Notice. Without in any way limiting Borrowers'
obligation to confirm in writing any telephonic notice, Agent may act
without liability upon the basis of telephonic notice believed by Agent
in good faith to be from a Borrower prior to receipt of written
confirmation. In each case each Borrower hereby waives the right to
dispute Agent's record of the terms of such telephonic Notice of Rate
Selection.
2.4.6 Limits On Options. Each LIBOR Advance shall be in a
minimum amount of $250,000.00.
2.4.7 Payment and Calculation of Interest.
(i) All interest shall be: (a) payable in arrears
commencing January __, 2002 and on the same day of each month
thereafter until the principal together with all interest and
other charges payable with respect to the Loan shall be fully
paid; and (b) calculated on the basis of a 360 day year and the
actual number of days elapsed. If any
-5-
Warehousing Advances shall constitute Variable Rate Advances,
then each change in the Prime Rate shall simultaneously change
the Variable Rate payable under this Agreement. Changes in the
rate of interest resulting from the changes in the Prime Rate
shall take place immediately without prior notice or demand of
any kind. Interest at the LIBOR Rate shall be computed from and
including the first day of the applicable Interest Period to,
but excluding, the last day thereof.
(ii) If, for any reason, (1) a Borrower repays a
Warehousing Advance on the same day that it was made by the
Lenders or (2) a Borrower instructs Agent not to make a
previously requested Warehousing Advance after the Lenders have
reserved funds or made other arrangements necessary to enable
such Lenders to fund that Warehousing Advance, Borrower agrees
to pay, in addition to those amounts required pursuant to
Sections 2.4.15 and 2.4.16 below, to each Lender an
administrative fee equal to 1 day of interest on that
Warehousing Advance at a rate of 1-1/2% per annum.
Administrative fees are due and payable in the same manner as
interest is due and payable under this Agreement.
2.4.8 Principal. The outstanding principal balance of the Loan
shall be repaid as follows:
(i) Each Warehousing Advance (or any portion thereof, if
such Warehousing Advance was used to fund multiple Eligible
Loans) shall be repaid upon the earlier to occur of (x) the
payment of the Committed Purchase Price from an Investor with
respect to any Eligible Loan or (y) that date which is sixty
(60) days from the date of the funding of such Warehousing
Advance.
(ii) Upon telephonic Notice to any Borrower by Agent,
Borrowers must pay to Agent, and each Borrower authorizes Agent
to charge the respective Borrower's Operating Account maintained
with the Agent for, the amount of any outstanding Warehousing
Advance against a specific Pledged Asset upon the earliest
occurrence of any of the following events:
(a) On the date a Warehousing Advance was made
if the Pledged Loan that was to have been funded by that
Warehousing Advance is not closed and funded.
(b) Three (3) Business Days elapses from the
date a Warehousing Advance was made against a Pledged
Loan, without receipt of the Collateral Documents
relating to that Pledged Loan required to be delivered
on that date, or such Collateral Documents, upon
examination by Agent, are found not to be in compliance
with the requirements of this Agreement or the related
Purchase Commitment.
-6-
(c) Ten (10) Business Days elapse without the
return of a Collateral Document delivered by Agent to a
Borrower under a Trust Receipt for correction or
completion.
(d) On the date on which a Pledged Loan is
determined to have been originated based on untrue,
incomplete or inaccurate information or otherwise to be
subject to fraud, whether or not any Borrower had
knowledge of the misrepresentation, incomplete or
incorrect information or fraud, or on the date on which
any Borrower knows, or has reason to know, or receives
Notice from Agent, that one or more of the
representations and warranties set forth in Article 8
were inaccurate or incomplete in any material respect on
any date when made or deemed made.
(e) On the date the Pledged Loan or a Lien prior
to the Pledged Loan is defaulted and remains in default
for a period of 60 days or more.
(f) On the mandatory delivery date of the
related Purchase Commitment if the specific Pledged Loan
has not been delivered under the Purchase Commitment
prior to such mandatory delivery date, or on the date
the related Purchase Commitment expires or is
terminated.
(g) Three (3) Business Days after the date a
Pledged Loan is rejected for purchase by an Investor
unless another Purchase Commitment is provided within
that 3 Business Day period.
(h) Upon the sale, other disposition or
prepayment of any Pledged Asset or, with respect to a
Pledged Loan included in an Eligible Mortgage Pool, upon
the sale or other disposition of the related Agency
Security.
(iii) In addition to the payments required pursuant to
Sections 2.4.8 (ii), if the principal amount of any Pledged Loan
is prepaid in whole or in part while a Warehousing Advance is
outstanding against the Pledged Loan, Borrowers must pay to
Agent, without the necessity of prior demand or Notice from
Agent, the amount of the prepayment, to be applied against the
Warehousing Advance.
(iv) The proceeds of the sale or other disposition of
Pledged Assets must be paid directly by the Investor to the Cash
Collateral Account. Each Borrower must give Notice to Agent (by
telephone or electronic mail, and if by telephone, followed
promptly by written notice) of the Pledged Assets for which
proceeds have been received. Upon receipt of such Borrower's
Notice, Agent will apply any proceeds deposited into the Cash
Collateral Account to the payment of the Warehousing Advance
related to the Pledged Assets identified by any Borrower in its
Notice, and those Pledged Assets will be considered to have been
redeemed from pledge. Agent is entitled to rely upon Borrower's
affirmation that deposits in the Cash Collateral Account
represent payments from Investors for the purchase of the
Pledged Assets specified by Borrower in its Notice. If
-7-
the payment from an Investor for the purchase of Pledged Assets
is less than the outstanding Warehousing Advance against the
Pledged Assets identified by Borrower in its Notice (the
"Deficiency"), the Borrower shall immediately deposit into the
Cash Collateral Account the amount of such Deficiency in
collected funds, and the Borrower authorizes Agent to charge
Borrower's Cash Collateral Account for the amount deposited by
Buyer to be applied against such Warehousing Advance. As long as
no Default or Event of Default exists, Agent will transfer in to
the respective Borrower's Operating Account any excess payment
from an Investor for Pledged Assets.
(v) Agent reserves the right to revalue any Pledged Loan that is
not covered by a Purchase Commitment from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ ▇▇▇.
Agent reserves the right to revalue any Pledged Loan that is to be
exchanged for an Agency Security if that Agency Security is not covered
by a Purchase Commitment. Borrowers must pay to Agent, without the
necessity of prior demand or Notice from Agent, any amount required
after any such revaluation to reduce the principal amount of the
Warehousing Advance outstanding against the revalued Pledged Loan to an
amount equal to the Advance Rate for the applicable Eligible Loan type
multiplied by the Fair Market Value of the Mortgage Loan.
(vi) As provided for in Section 2.4.10.
2.4.9 Prepayment. The Loan or any portion thereof may be prepaid
in full or in part at any time by 2:00 p.m. on, with respect to Variable
Rate Advances the business Day before, and with respect to LIBOR
Advances, the third Business Day before the date of such payment,
subject to the make-whole provisions set forth in Section 2.4.15.
2.4.10 Maturity. Upon acceleration of the Loan, if the Loan has
been accelerated by the Agent (or the Facility has been automatically
terminated) upon an Event of Default, or at the Maturity Date, all
accrued and unpaid interest, principal and other fees and charges due
with respect to the Loan shall be due and payable in full, and the
principal balance and such other fees and charges, but not unpaid
interest, shall continue to bear interest at the Default Rate until so
paid.
2.4.11 Method of Payment; Date of Credit. All payments of
interest, principal and fees shall be made in lawful money of the United
States in immediately available funds, without counterclaim or setoff
and free and clear of, and without any deduction or withholding for, any
taxes or other payments: (a) by direct charge to the Cash Collateral
Account of the respective Borrowers, with respect to interest, or (b) by
wire transfer to Agent. Payments shall be credited on the Business Day
on which immediately available funds are received prior to 2:00 P.M.;
payments received after 2:00 P.M. shall be credited to the Loan on the
next Business Day. Payments which are by check, which Agent may at its
option accept or reject, or which are not in the form of immediately
available funds shall not be credited to the Loan until such funds
become immediately available to Agent, and, with respect to payments by
check, such credit shall be provisional until the item is finally paid
by the payor bank. All payments shall be applied first to the payment of
all fees, expenses, and other amounts due to the Lenders (excluding
principal and interest), then to accrued interest, and the balance on
account of outstanding principal, provided, however, that after the
occurrence and during the continuation of an
-8-
Event of Default, payments will be applied to the Obligations as the
Agent determines, subject to the provisions of section 11.2.4.
2.4.12 ▇▇▇▇▇▇▇▇. Agent may submit monthly ▇▇▇▇▇▇▇▇ reflecting
payments due; however, any changes in the interest rate which occur
between the date of billing and the due date may be reflected in the
billing for a subsequent month. Neither the failure of Agent to submit a
billing nor any error in any such billing shall excuse Borrowers from
the obligation to make full payment of all Borrowers' payment
obligations when due.
2.4.13 Default Rate. Agent shall have the option of imposing,
and Borrowers shall pay upon billing therefor, an interest rate which is
four percent (4%) per annum above the Variable Rate ("Default Rate"):
(a) following any Event of Default, unless and until the Event of
Default is waived by Agent or cured, and (b) after the Maturity Date,
and the Borrowers' right to select pricing options shall cease.
2.4.14 Late Charges. Borrowers shall pay, upon billing therefor,
a "Late Charge" equal to five percent (5%) of the amount of any payment
of principal, other than principal due at the Maturity Date (or the date
on which the Agent accelerates the time for payment of the Loan after
the occurrence of an Event of Default), interest, or fees, which are not
paid within ten (10) days of the due date thereof. Late Charges are: (a)
payable in addition to, and not in limitation of, the Default Rate, (b)
intended to compensate Agent and the Lenders for administrative and
processing costs incident to late payments, (c) not interest, and (d)
not subject to refund or rebate or credit against any other amount due.
2.4.15 Prepayment; Yield Maintenance. Except for prepayments
under Section 2.4.8, the Borrower may prepay a LIBOR Advance only upon
at least three (3) Business days prior written notice to Agent (which
notice shall be irrevocable). The Borrower shall pay to the Agent, for
the ratable benefit of the Lenders, upon request of Agent, such amount
or amounts as shall be sufficient (in the reasonable opinion of Agent)
to compensate Agent or any Lender for any loss, cost, or expense
incurred as a result of: (i) any payment or prepayment, under any
circumstances whatsoever, whether voluntary or involuntary, of all or
any portion of a LIBOR Advance on a date other than the last day of the
Interest Period for such LIBOR Advance; (ii) the conversion, for any
reason whatsoever, whether voluntary or involuntary (including, without
limitation, as a result of the acceleration of the Obligations), of any
LIBOR Advance, to a Variable Rate Advance on a date other than the last
day of the applicable interest Period, (iii) any failure by Borrower to
borrow a LIBOR Advance on the date specified by Borrower's written
notice; (iv) any failure by Borrower to pay a LIBOR Advance on the date
for payment specified in Borrower's written notice. Without duplication
of the foregoing, Borrower shall pay to Agent, for the ratable benefit
of the Lenders, a "yield maintenance fee" in an amount computed as
follows: The current rate for United States Treasury securities (bills
on a discounted basis shall be converted to a bond equivalent) with a
maturity date closest to the term chosen pursuant to a applicable
Interest Period as to which the prepayment is made, shall be subtracted
from the LIBOR Rate in effect at the time of prepayment. If the result
is zero or a negative number, there shall be no yield maintenance fee.
If the result is a positive number, then the resulting percentage shall
be multiplied by the amount of the principal balance being prepaid. The
resulting amount shall be divided by 360 and multiplied by the number of
days remaining in the term chosen pursuant to the Interest Period as to
which the prepayment is made. Said amount shall be reduced to present
value calculated by using the above-referenced United
-9-
States Treasury securities rate and the number of days remaining in the
term chosen pursuant to the Interest Period as to which the prepayment
is made. The resulting amount shall be the yield maintenance fee due to
Agent, for the ratable benefit of the Lenders, upon prepayment of a
LIBOR Advance.
2.5 Loan Fees.
2.5.1 Loan Fees. Borrowers shall pay a commitment fee as agreed
to among the Borrowers and the Agent in accordance with the provisions
of the Fee Letter.
2.5.2 Agent's Fees. Borrowers shall pay to the Agent for its own
account an administrative fee and such other fees as may be provided for
in the Fee Letter.
2.5.3 Facility Fee. Borrowers agree to pay a facility fee to
Agent on behalf of the Lenders on the average daily unborrowed portion
of the Facility from the Agreement Date to the Maturity Date (the
"Facility Fee"), calculated as set forth below. The Facility Fee shall
be payable in arrears on the first Business Day of each calendar quarter
for the immediately preceding calendar quarter or portion thereof and on
the Maturity Date, and shall be calculated by multiplying the average
daily unborrowed portion of the Facility for such immediately preceding
calendar quarter or portion thereof by 0.025% percent, and multiplying
that product by a fraction, the numerator of which is the number of days
during such calendar quarter that the Facility remained outstanding, and
the denominator of which is the number of days during such calendar
quarter. The Borrowers shall not be entitled to any credit, rebate or
repayment of the Facility Fee notwithstanding any termination of this
Agreement or suspension or termination of the Agent's and any Lender's
respective obligation to make Warehousing Advances hereunder.
2.6 Acceleration. The Agent may, and upon the request of the Requisite
Lenders shall, terminate the Commitments, and accelerate the Loan, following an
Event of Default, provided, however, upon the occurrence of any Event of Default
described in Sections 9.1.6 or 9.1.7, the Commitments shall automatically
terminate and all such amounts shall become immediately due and payable
automatically and without any requirement of notice from any of the Lenders or
the Agent. Upon such an acceleration, all principal, accrued interest and costs,
fees, and expenses shall be due and payable together with interest on such
principal at the Default Rate and any applicable make whole provisions.
2.7 Additional Provisions Related to Interest Rate Selection.
2.7.1 Increased Costs. If, due to any one or more of: (i) the
introduction of any applicable law or regulation or any change (other than any
change by way of imposition or increase of reserve requirements already referred
to in the definition of LIBOR Rate) in the interpretation or application by any
authority charged with the interpretation or application thereof of any law or
regulation; or (ii) the compliance with any guideline or request from any
governmental central bank or other governmental authority (whether or not having
the force of law), there shall be an increase in the cost to any Lender of
agreeing to make or making, funding or maintaining LIBOR Advances, including,
without limitation, changes which affect or would affect the amount of capital
or reserves required or expected to be maintained by any Lender with respect to
all or any portion of the Loan, or any
-10-
corporation controlling any Lender, on account thereof, then Borrowers
from time to time shall, upon written demand by Agent, pay such
additional amounts as are sufficient to indemnify any Lender against the
increased cost. A certificate as to the amount of the increased cost and
the reason therefor submitted to Borrowers by Agent, in the absence of
manifest error, shall be conclusive and binding for all purposes.
2.7.2 Illegality. Notwithstanding any other provision of this
Agreement, if the introduction of or change in or in the interpretation
of any law, treaty, statute, regulation or interpretation thereof shall
make it unlawful, or any central bank or government authority shall
assert by directive, guideline or otherwise, that it is unlawful, for
any Lender to make or maintain LIBOR Advances or to continue to fund or
maintain LIBOR Advances then, on written notice thereof and demand by
Agent to Borrowers, (a) the obligation of Agent to make LIBOR Advances
and to convert or continue any Warehousing Advance as LIBOR Advances
shall terminate and (b) Borrowers shall convert all principal
outstanding under this Agreement into Variable Rate Advances.
2.7.3 Additional LIBOR Conditions. The maintenance of any
Warehousing Advance at the effective LIBOR Rate shall be subject to the
following additional terms and conditions:
(i) Availability. If, before or after any Borrower has
selected to take or maintain a LIBOR Advance, Agent notifies
such Borrower that
(a) dollar deposits in the amount and for the
maturity requested are not available to the Agent in the
London interbank market at the rate specified in the
definition of LIBOR Rate set forth above, or
(b) reasonable means do not exist for Agent to
determine the LIBOR Rate for the amounts and maturity
requested,
then the principal which would have been a LIBOR Advance shall be
a Variable Rate Advance.
(ii) Payments Net of Taxes. All payments and prepayments
of principal and interest under this Agreement shall be made net
of any taxes and costs resulting from having principal
outstanding at or computed with reference, to a LIBOR Rate.
Without limiting the generality of the preceding obligation,
illustrations of such taxes and costs are taxes, or the
withholding of amounts for taxes, of any nature whatsoever
including income, excise, interest equalization taxes (other
than United States or state income taxes) as well as all levies,
imposts, duties or fees whether now in existence or as the
result of a change in or promulgation of any treaty, statute,
regulation, or interpretation thereof or any directive,
guideline or otherwise by a central bank or fiscal authority
(whether or not having the force of law) or a change in the
basis of, or the time of payment of, such taxes and other
amounts resulting therefrom.
3. SECURITY FOR THE FACILITY.
-11-
3.1 Grant of Security Interest. As security for the Facility and the
payment of the Loan and for the performance of all of the Borrowers' other
Obligations, each Borrower grants a security interest to Agent, for the ratable
benefit of the Lenders, in all of such Borrower's right, title and interest in
and to the following described property ("Collateral"):
3.1.1 All amounts advanced by Lenders to or for the account of
Borrowers under this Agreement to fund a Mortgage Loan until that
Mortgage Loan is closed and those funds disbursed.
3.1.2 All Mortgage Loans, including all Mortgage Notes and
Mortgages evidencing or securing those Mortgage Loans, that are
delivered or caused to be delivered to Agent for the benefit of the
Lenders (including delivery to a third party on behalf of Agent), come
into the possession, custody or control of Agent for the purpose of
pledge or in respect of which Lenders have made a Warehousing Advance
under this Agreement (collectively, "Pledged Loans").
3.1.3 All Mortgage-backed Securities that are created in whole
or in part on the basis of Pledged Loans or are delivered or caused to
be delivered to Agent for the benefit of the Lenders, or are otherwise
in the possession of Agent, or its agent, bailee or custodian as
assignee, or pledged to Agent for the benefit of the Lenders, or for
such purpose are registered by book-entry in the name of Agent
(including delivery to or registration in the name of a third party on
behalf of Agent) under this Agreement or in respect of which a
Warehousing Advance has been made by Lenders under this Agreement
(collectively, "Pledged Securities").
3.1.4 All commitments issued by FHA to insure or guarantee any
Mortgage Loans included in the Pledged Loans; all Purchase Commitments
held by any Borrower covering Pledged Loans or Pledged Securities or
proposed permanent Pledged Loans, and all proceeds from the sale of
Pledged Loans or Pledged Securities to Investors pursuant to those
Purchase Commitments; and all personal property, contract rights,
servicing and servicing fees and income or other proceeds, amounts and
payments payable to Borrower whether as compensation or reimbursement,
accounts or general intangibles of whatsoever kind relating to Pledged
Loans, Pledged Securities, FHA Commitments and the Purchase Commitments,
and all other documents or instruments relating to Pledged Loans and
Pledged Securities, including any interest of any Borrower in any fire,
casualty or hazard insurance policies and any awards made by any public
body or decreed by any court of competent jurisdiction for a taking or
for degradation of value in any eminent domain proceeding as the same
relate to Pledged Loans.
3.1.5 All escrow accounts, documents, instruments, files,
surveys, certificates, correspondence, appraisals, computer programs,
tapes, discs, cards, accounting records (including all information,
records, tapes, data, programs, discs and cards necessary or helpful in
the administration or servicing of the Collateral) and other information
and data of any Borrower relating to the Collateral.
3.1.6 All cash, whether now existing or acquired after the date
of this Agreement, delivered to or otherwise in the possession of Agent
or any Lender, or their respective agents, bailees or custodians
(provided, that with respect to funds held by any of the Borrowers in
-12-
trust or escrow for any other Person with the Agent or any Lender, only
the Borrowers' interest in earnings on such funds shall be Collateral)
or designated on the books and records of Borrowers as assigned and
pledged to Agent for the benefit of the Lenders, including all cash
deposited in the Cash Collateral Account.
3.1.7 All Accounts or General intangibles owned by any Borrower
("Receivables") related to the Collateral referenced in Sections 3.1.1
through and including 3.1.3 for the payment of money against (1) FHA or
a private mortgage insurer under an FHA or private insurer's mortgage
insurance policy insuring payment of, or any other Person under any
other agreement (excluding a Servicing Contract) relating to, all or
part of a defaulted Mortgage Loan repurchased by any Borrower from an
investor or out of a pool of Mortgage Loans serviced by any Borrower,
(2) obligors and their accounts, or any Investor, insurer or guarantor
covering, or out of the proceeds of any sale of or foreclosure sale in
respect of, any Mortgage Loan being serviced by any Borrower, in either
case, for the reimbursement of real estate taxes or assessments, or
casualty or liability insurance premiums, paid by any Borrower in
connection with Mortgage Loans and (3) obligors and their accounts, or
any other Investor, insurer or guarantor under or in respect of, or out
of the proceeds of any sale or foreclosure sale in respect of, any
Mortgage Loans serviced by any Borrower for repayment of advances made
by any Borrower to cover shortages in principal and interest payments.
3.1.8 All Hedging Arrangements related to the Collateral
referenced in Section 3.1.1 through and including 3.1.3 ("Pledged
Hedging Arrangements") and any Borrower's accounts in which those
Hedging Arrangements are held ("Pledged Hedging Accounts"), including
all rights to payment arising under the Pledged Hedging Arrangements and
the Pledged Hedging Accounts, except that Agent's security interest in
the Pledged Hedging Arrangements and Pledged Hedging Accounts is limited
to benefits, including rights to payment, related to the Collateral.
3.1.9 All cash and non-cash proceeds of the Collateral,
including all dividends, distributions and other rights in connection
with, and all additions to, modifications of and replacements for, the
Collateral, and all products and proceeds of the Collateral, together
with whatever is receivable or received when the Collateral or proceeds
of Collateral are sold, collected, exchanged or otherwise disposed of,
whether such disposition is voluntary or involuntary, including all
rights to payment with respect to any cause of action affecting or
relating to the Collateral or proceeds of Collateral.
3.2 Authenticated Record. This Agreement constitutes an authenticated
record which authorizes the Agent to file such financing statements as the Agent
determines as appropriate to perfect or protect the security interests created
by this Agreement.
3.3 [Intentionally Omitted]
3.4 Release of Security Interest in Pledged Loans and Pledged Securities
-13-
3.4.1 Except as provided in Section 3.4.2, Pledged Loans will be
released from Agent's security interest only against payment to Agent of
the Release Amount in connection with those Pledged Loans. If Pledged
Loans are transferred to a pool custodian or an investor for inclusion
in a Mortgage Pool and Agent's security interest in the Pledged Loans
included in the Mortgage Pool is not released before the issuance of the
related Mortgage-backed Security, then that Mortgage-backed Security,
when issued, is a Pledged Security, Agent's security interest continues
in the Pledged Loans backing that Pledged Security and Agent is entitled
to possession of the Pledged Security in the manner provided in this
Agreement.
3.4.2 If Pledged Loans are transferred to an Approved Custodian
and included in an Eligible Mortgage Pool, Agent's security interest in
the Pledged Loans included in the Eligible Mortgage Pool will be
released upon the delivery of the Agency Security to Agent (including
delivery to or registration in the name of a third party on behalf of
Agent), and that Agency Security is a Pledged Security. Agent's security
interest in that Pledged Security will be released only against payment
to Agent of the Release Amount in connection with the Mortgage Loans
backing that Pledged Security.
3.4.3 Agent has the exclusive right to possession of all Pledged
Securities or, if Pledged Securities are issued in book-entry form or
issued in certificated form and delivered to a clearing corporation (as
such term is defined in the UCC) or its nominee, Agent has the right to
have the Pledged Securities registered in the name of a securities
intermediary (as such term is defined in the UCC) in an account
containing only customer securities and credited to an account of Agent.
Agent has no duty or obligation to deliver Pledged Securities to an
Investor or to credit Pledged Securities to the account of an Investor
or the Investor's designee except against payment for those Pledged
Securities, unless the Agent shall have entered into a master agreement
with such Investor on terms and conditions satisfactory to the Agent,
and with respect to the Longwood Loan, provided that a default by the
borrower under the Longwood Loan in delivering the Pledged Securities
does not occur, and provided that the Lenders shall not be obligated to
make more than one (1) Warehouse Advance per month for the Longwood Loan
without the consent of the Agent, which will not be unreasonably
withheld. Each Borrower acknowledges that Agent may enter into one or
more standing arrangements with securities intermediaries with respect
to Pledged Securities issued in book entry form or issued in
certificated form and delivered to a clearing corporation or its
designee, under which the Pledged Securities are registered in the name
of the securities intermediary, and each Borrower agrees, upon request
of Agent, to execute and deliver to those securities intermediaries such
Borrower's written concurrence in any such standing arrangements.
3.4.4 If no Default or Event of Default occurs, Borrowers may
redeem a Pledged Loan or Pledged Security from Agent's security interest
by notifying Agent of its intention to redeem the Pledged Loan or
Pledged Security from pledge and either (1) paying, or causing an
Investor to pay, to Agent the Release Amount in connection with the
Pledged Loan or the Pledged Loans backing that Pledged Security, or (2)
delivering substitute Collateral that, in addition to being acceptable
to Agent in its sole discretion will, when included with the remaining
Collateral, result in a Warehousing Collateral Value of all Collateral
held by Agent that is at least equal to the aggregate outstanding Loan.
-14-
3.4.5 After a Default or Event of Default occurs, Agent may,
with no liability to Borrowers or any Person, continue to release its
security interest in any Pledged Loan or Pledged Security against
payment of the Release Amount in connection with that Pledged Loan or
the Pledged Loans backing that Pledged Security.
3.4.6 The amount ("Release Amount") to be paid by Borrowers to
obtain the release of Agent's security interest in a Pledged Loan will
be (1) until an Event of Default occurs, the principal amount of the
Warehousing Advances outstanding against the Pledged Loan, and (2) while
an Event of Default exists, the full Committed Purchase Price therefor,
or amount paid to Agent in a commercially reasonable disposition of that
Pledged Loan by the Agent in the exercise of its rights and remedies
under this Agreement.
3.5 Collection and Servicing Rights
3.5.1 If no Event of Default exists, Borrowers may service and
receive and collect directly all sums payable to Borrowers in respect of
the Collateral other than proceeds of any Purchase Commitment or
proceeds of the sale of any Collateral (which shall be paid directly to
the Cash Collateral Account).
3.5.2 After an Event of Default, Agent or its designee are
entitled to service and receive and collect all sums payable to Borrower
in respect of the Collateral, and in such case (1) Agent or its designee
in its discretion may, in its own name, in the name of Borrowers or
otherwise, demand, ▇▇▇ for, collect or receive any money or property at
any time payable or receivable on account of or in exchange for any of
the Collateral, but Agent has no obligation to do so, (2) each Borrower
must, if Agent requests it to do so, hold in trust for the benefit of
Agent and immediately pay to Agent at its office designated by Notice,
all amounts received by such Borrower upon or in respect of any of the
Collateral, advising Agent as to the source of such funds and (3) all
amounts so received and collected by Agent will be held by it as part of
the Collateral for the ratable benefit of the Lenders.
3.6 Return of Collateral at End of Warehousing Commitment
3.6.1 If (a) the Warehousing Commitment has expired or been
terminated, and (b) no Warehousing Advances, interest or other
Obligations are outstanding and unpaid, Agent will release its security
interest and will deliver all Collateral in its possession to Borrowers
at Borrowers' expense. Borrowers' acknowledgment or receipt for any
Collateral released or delivered to Borrowers under any provision of
this Agreement is a complete and full acquittance for the Collateral so
returned, and Agent is discharged from any liability or responsibility
for that Collateral.
3.7 Delivery of Collateral Documents
3.7.1 Agent may deliver documents relating to the Collateral to
Borrowers for correction or completion under a Trust Receipt.
-15-
3.7.2 If no Default or Event of Default exists, upon delivery by
Borrowers to Agent of shipping instructions pursuant to the applicable
Exhibit B, Agent will transmit Pledged Loans or Pledged Securities,
together with all related loan documents and pool documents in Agent's
possession, to the applicable Investor, Approved Custodian or other
party acceptable to Agent in its sole discretion.
3.7.3 If a Default or Event of Default exists, Agent may,
without liability to Borrowers or any other Person, continue to transmit
Pledged Loans or Pledged Securities, together with all related loan
documents and pool documents in Agent's possession, to the applicable
Investor, Approved Custodian or other party acceptable to Agent in its
sole discretion.
3.7.4 Upon receipt of Notice from Borrowers under Section
2.4.8(v), and payment of the Release Amount with respect to a Pledged
Loan identified by a Borrower, Agent will release to the Borrowers any
Collateral Documents relating to the redeemed Pledged Loan or the
Pledged Loans backing a Pledged Security that Agent has in its
possession and that have not been delivered to an Investor or Approved
Custodian.
3.8 Loan Documents and Security Documents. The Facility and the Loan
shall be made, evidenced, administered, secured and governed by all of the
terms, conditions and provisions of the "Loan Documents", each as the same may
be hereafter modified or amended, consisting of: (i) this Loan Agreement; (ii)
the Notes made payable by each Borrower in favor of each Lender; (iii) the
Guaranties; (iv) the Assigned Collateral Documents; (v) any other documents,
instruments, or agreements executed to further evidence or secure the Loan; and
(vi) any Hedging Arrangements as to which the Agent (or an Affiliate of the
Agent) is a counterparty.
Each of the Loan Documents listed in items (i) through (iii), inclusive,
shall be dated of even date herewith. The Assigned Collateral Documents are
sometimes collectively referred to herein as the "Security Documents".
4. CONTINUING AUTHORITY OF AUTHORIZED REPRESENTATIVES. Agent and each of
the Lenders are authorized to rely upon the continuing authority of the Persons
hereafter designated by the Borrowers ("Authorized Representatives") to bind
Borrowers with respect to all matters pertaining to the Loan and the Loan
Documents including, but not limited to, the selection of interest rates, the
submission of requests for Warehousing Advances, and certificates with regard
thereto. Such authorization may be changed only upon written notice to Agent
accompanied by evidence, reasonably satisfactory to Agent, of the authority of
the person giving such notice and such notice shall be effective not sooner than
five (5) Business Days following receipt thereof by Agent. The Authorized
Representatives as of the Agreement Date are listed on Schedule 4. The Agent
shall have a right of approval, not to be unreasonably withheld or delayed, over
the identity of the Authorized Representatives so as to assure Agent and each of
the Lenders that each Authorized Representative is a responsible and senior
official of Borrowers.
5. CONDITIONS PRECEDENT.
-16-
5.1 Establishment of Facility and Funding Initial Warehousing Advance.
It shall be a condition precedent of Lenders' obligation to establish the
Facility that each of the following conditions precedent be satisfied in full
(as determined by the Agent and the Requisite Lenders in their discretion which
discretion shall be exercised in good faith), unless specifically waived in
writing by the Agent and the Requisite Lenders at or prior to closing:
5.1.1 Satisfactory Loan Documents. Each of the Loan Documents
shall have been duly executed and delivered by the respective parties
thereto and, shall be in full force and effect and shall be in form and
substance satisfactory to each of the Lenders.
5.1.2 No Material Change. No material adverse change shall have
occurred in the financial condition, business, affairs or operations of
any Borrower or the Guarantors since the date of their respective
financial statements most recently delivered to the Agent (September 30,
2001).
5.1.3 UCC and tax lien Searches UCC, tax lien and judgment
searches of the appropriate public records for each Borrower that do not
disclose the existence of any prior Lien on the Collateral other than in
favor of Agent or as permitted under this Agreement, or other than a
Lien in favor of any Person, which Lien shall be terminated in
accordance with the provisions of this Agreement.
5.1.4 Warranties and Representations Accurate. All warranties
and representations made by or on behalf of any Borrower and the
Guarantors to Agent or any of the Lenders pursuant to the Loan Documents
shall be true and accurate in all material respects and shall not omit
any material fact necessary to make the same not misleading.
5.1.5 Financials. Agent and each of the Lenders shall have
received and approved financial statements from Borrower complying with
the standards set forth in Section 7.5.
5.1.6 Validity and Sufficiency of Security Documents. UCC
financing statements naming the Borrowers as debtors and the Agent as
secured party covering the Collateral shall have been duly recorded and
filed to the satisfaction of Agent and its counsel.
5.1.7 No Other Liens. The Collateral shall not be subject to any
Liens or encumbrances, whether inferior or superior to the Loan
Documents or the other Security Documents, except for a Lien in favor of
any Person, which shall be terminated in accordance with the provisions
of this Agreement.
5.1.8 Organizational Documents and Entity Agreements. The Agent
shall have received from each Borrower and Guarantor a copy, certified
as of a recent date by the appropriate officer of the State in which
such Person is organized to be true and complete, of the corporate
charter and any other organization documents of such Person as in effect
on such date of certification (other than ▇▇▇▇▇▇ Financial Resources,
Inc.). The Borrowers and the Guarantors shall furnish evidence
satisfactory to the Agent that they are each duly qualified and in good
standing in each jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify, except
where the failure
-17-
to so qualify could not have a materially adverse effect on the
business, assets, or financial condition of the Borrowers or the
Guarantors. Notwithstanding, the foregoing, the Agent acknowledges and
agrees that certificates of foreign qualification for (i) PWF from the
Secretary of State for the State of Illinois, and (ii) Cambridge. from
the Secretary of State of the Commonwealth of Massachusetts shall be
delivered to the Agent in accordance with the provisions of Section
7.13.
5.1.9 Votes, Consents and Authorizations. All action on the part
of the Borrowers and Guarantors necessary for the valid execution,
delivery and performance by (x) the Borrowers of this Agreement and the
other Loan Documents to which it is or is to become a party, and (y) the
Guarantors of the Loan Documents to which they are or are to become a
party, shall have been duly and effectively taken, and evidence thereof
satisfactory to the Agent shall have been provided to the Agent. The
Agent shall have received from the Borrowers and Charter Mac Corporation
true copies of their respective by-laws and the resolutions adopted by
the their respective boards of directors authorizing the transactions
described herein, each certified by each of their secretaries as of a
recent date to be true and complete, and the Agent shall have received
from Charter Municipal Acceptance Company true copies of its Declaration
of Trust and the resolutions adopted by its Board of Trustees
authorizing the transactions described herein, each certified by its
Manager as of a recent date to be true and complete.
5.1.10 Incumbency Certificate; Authorized Signers. The Agent
shall have received from the Borrower an incumbency certificate, dated
as of the Closing Date, signed by a duly authorized officer each of the
Borrowers and the Guarantors and giving the name and bearing a specimen
signature of each individual who shall be an Authorized Representative:
(a) to sign, in the name and on behalf of such Person, each of the Loan
Documents to which the such Person is or is to become a party; (b) with
respect to the Borrower, to make requests for Warehouse Advances; and
(c) to give notices and to take other action on behalf of the Borrowers
under the Loan Documents.
5.1.11 Corporate Structure. The Agent shall be satisfied in all
respects with the legal structure and capitalization of the Borrowers
and all documentation relating thereto.
5.1.12 Litigation. There shall be no pending or threatened
litigation involving any of the Borrowers or the Guarantors which, in
the judgment of the Agent, could have a material adverse effect on such
Person or the ability of the Borrowers or the Guarantors to perform
their obligations under the Loan Documents to which they are a party,
and no judgment, order, injunction or other similar injunction or other
similar restraint prohibiting any of the transactions contemplated
hereby shall exist.
5.1.13 Evidence of Insurance. The Agent shall have received
evidence, in form, scope and substance and with such insurance carriers,
satisfactory to the Agent, for all insurance policies required under any
of the Loan Documents.
5.1.14 Financial Statements. The Lenders shall have received
such financial statements and other information and projections as the
Agent shall have reasonably requested, and the information shall be
satisfactory to the Lenders.
-18-
5.1.15 Examination of Books and Assets. The Agent shall have
been afforded the opportunity prior to closing, to review the books,
records, leases, contracts, pension plans, workers' compensation and
retiree health plans, ERISA matters, product liability litigation,
insurance coverage and properties of the Borrowers, and to perform such
other due diligence regarding the Borrowers as the Agent shall have
required, the results of which review and due diligence shall have been
reasonably satisfactory to the Agent and its counsel.
5.1.16 Compliance with Law. The Agent shall be satisfied that
(i) the Borrowers and the Guarantors have obtained all material and
appropriate authorizations and approvals of all governmental authorities
(including, without limitation, any approvals required by any of ▇▇▇▇▇▇
Mae, FHA, ▇▇▇▇▇▇▇ Mac, GNMA, HUD), required for the due execution,
delivery and performance by the Borrowers and the Guarantors of each of
the Loan Documents to which they are or will be a party and for the
perfection of or the exercise by the Agent and each Lender of their
respective rights and remedies under the Loan Documents, and (ii) the
Facility as well as all other transactions contemplated hereby, shall be
in material compliance with, and the Borrowers and the Guarantors shall
have obtained all material and appropriate approvals pertaining to, all
applicable laws, rules, regulations and orders, including, without
limitation, all governmental, environmental, ERISA retiree health
benefits, workers' compensation and other requirements, regulations and
laws and shall not contravene any charter, by-law, debt instrument or
other material Contractual Obligation of Borrowers and Guarantors and
their respective Subsidiaries.
5.1.17 Legal and other Opinions. Each of the Lenders and the
Agent shall have received an opinion addressed to the Lenders and the
Agent and dated as of the Closing Date, in form and substance
satisfactory to the Lenders and the Agent from the Borrowers' and
Guarantors' counsel, Proskauer Rose LLP.
5.1.18 Eligibility Certificates. Copies of the certificates,
documents or other written instruments that evidence each Borrower's
eligibility described in Section 8.1, together with copies of all
seller/servicer contracts to which each Borrower is a party, all in form
and substance satisfactory to Agent.
5.1.19 Payment of Fees. The Borrower shall have paid to the
Agent all fees and expenses required pursuant to this Agreement, the Fee
Letter and the other Loan Documents.
5.1.20 No Default. There shall not be any Default under any of
the Loan Documents.
5.1.21 Agreements with other Lenders.
(i) ▇▇▇▇▇▇, the Agent and Commerce Bank shall have
entered into an agreement in form and substance satisfactory to
the Agent pursuant to which, among other things, effective as of
the Closing Date, ▇▇▇▇▇▇ shall cease to request loans and
advances and Commerce shall cease to make loans and advances
under the Commerce Line, and all amounts due and owing
thereunder shall be paid in full on or before March 30, 2002.
-19-
(ii) The Borrowers, the Agent and Residential Funding
Corporation shall have entered into an agreement in form and
substance satisfactory to the Agent pursuant to which, among
other things, effective as of the Closing Date, the Borrowers
shall cease to request loans and advances and Residential
Funding Corporation shall cease to make loans and advances under
the RFC Line, and all amounts due and owing thereunder shall be
paid in full on or before March 30, 2002.
5.1.22 Evidence of Insurance. Copies of the policies, or
certificates in lieu of policies, evidencing the Borrowers' compliance
with the insurance requirements of Section 7.7.
5.1.23 Additional Documents. The Borrowers shall have provided
such additional instruments and documents to the Agent and the Lenders
as the Agent and the Agent's counsel may have reasonably requested.
5.2 Warehousing Advances. Each Warehousing Advance shall be subject to
the condition precedent that all conditions to closing the Facility were
satisfied or waived on the Closing Date and to the further satisfaction of each
of the following conditions precedent, unless specifically waived in writing by
Agent at or prior to the time of each such Warehousing Advance:
5.2.1 Representations True; No Event of Default. Each of the
representations and warranties and covenants of the Borrowers and the
Guarantors contained in this Agreement or the other Loan Documents shall
be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Warehousing Advance, with
the same effect as if made at and as of that time (except to the extent
of changes resulting from transactions contemplated and permitted by
this Agreement and the other Loan Documents and changes occurring in the
ordinary course of business that singly or in the aggregate are not
materially adverse, and except to the extent that such representations
and warranties relate expressly to an earlier date) and no Default or
Event of Default shall have occurred and be continuing. Each of the
Lenders shall have received a certificate of the Borrower signed by an
authorized officer of the Borrower to such effect.
Warehousing Advance Request. Each Borrower requesting a Warehousing
Advance must have delivered to Agent the Warehousing Advance Request and
Collateral Documents called for under, and must have satisfied the
procedures set forth in, Section 2 and the applicable Exhibits described
in that Article. All items delivered to Agent must be satisfactory to
Agent in form and content, and Agent may reject any item that does not
satisfy the requirements of this Agreement or of the related Purchase
Commitment.
No Legal Impediment. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable
opinion of any Lender would make it illegal for such Lender to make such
Warehousing Advance.
Governmental Regulation. Each Lender shall have received such statements
in substance and form reasonably satisfactory to such Lender as such
Lender shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of
-20-
Governors of the Federal Reserve System.
Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Agreement, the other Loan Documents
and all other documents incident thereto shall be reasonably
satisfactory in substance and in form to the Lenders and to the Agent's
counsel, and the Lenders and such counsel shall have received all
information and such counterpart originals or certified or other copies
of such documents as the Agent may reasonably request.
5.2.2 No Adverse Changes. There shall not have been any material
adverse change in the financial condition, business, affairs of the
Borrowers or the Guarantors since the date of this Loan Agreement which
in Agent's good faith judgment may jeopardize in a material manner the
ability of Borrowers or Guarantors to perform fully their respective
obligations under each applicable Loan Document.
5.2.3 Other Certificates. Agent shall have received and approved
such other documents, and certificates as Agent may reasonably request,
in form and substance reasonably satisfactory to Agent.
6. WARRANTIES AND REPRESENTATIONS. Each Borrower warrants and represents to
Agent and each of the Lenders for the express purpose of inducing Lenders to
enter into this Agreement, to make each Warehousing Advance, and to otherwise
complete all of the transactions contemplated hereby, that, as of the date of
the Agreement Date and upon the date of each Warehousing Advance as follows:
6.1 Financial Information. True and complete copies of financial
statements of Borrowers and the Guarantors have been delivered to Agent and each
of the Lenders and the same fairly present the financial condition of such
Person as of the date thereof and no material and adverse change has occurred in
such financial condition since the date thereof. All financial statements of
such Persons hereafter furnished to Agent or any of the Lenders shall be true
and complete copies thereof and shall fairly present the financial condition of
such Person as of the date thereof.
6.2 No Violations. The establishment of the Facility, the obtaining of
the Warehousing Advances, and the subsequent payment and performance of the
Obligations evidenced and secured by the Loan Documents shall not constitute a
violation of, or conflict with, any Legal Requirement, Contractual Obligation or
organizational document to which Borrowers and/or Guarantors are a party or by
which it or its property is or may be bound.
6.3 No Litigation. There are no actions, suits, proceedings or
investigations of any kind pending or, to the knowledge of the Borrowers,
threatened against the Borrowers, the Guarantors, or any of their respective
Subsidiaries before any court, tribunal or administrative agency or board that,
if adversely determined, would reasonably be expected to, either in any case or
in the aggregate, materially adversely affect the properties, assets, financial
condition or business of such Person or materially impair the right of such
Person to carry on business substantially as now conducted by it, or result in
any substantial liability not adequately covered by insurance, or for which
adequate reserves are not maintained on the balance sheet of such Person
(considering the Borrowers and their Subsidiaries as
-21-
a single Person for purposes of this Section 6.3), or which question the
validity of this Agreement or any of the other Loan Documents, or any action
taken or to be taken pursuant hereto or thereto.
6.4 Franchises, Patents, Copyrights, Etc. The Borrowers and the
Guarantors each possess all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted, without known
conflict with any rights of others.
6.5 Good Title and No Liens. Borrower and Guarantor, respectively, are
the lawful owner of their respective Collateral and are and will be the lawful
owner of the Collateral, free and clear of all liens and encumbrances of any
nature whatsoever, other than (x) the liens of Residential Funding, Inc. and
Commerce Bank ,which shall be terminated promptly after the Closing Date, and
(y) liens in favor of GNMA in connection with GNMA Mortgage Loans, provided such
liens relate to the subject Mortgage Loan.
6.6 Use of Proceeds. The proceeds of the Loan shall be used solely and
exclusively for those matters set forth in Section 1.2.
6.7 Entity Matters.
6.7.1 Organization.
(i) PWF is a duly organized validly existing corporation
in good standing under the laws of Delaware and, except for the
State of Illinois, is duly qualified in the jurisdiction where
the nature of its business is such that qualification is
required and where failure to be so qualified would materially
adversely affect its business or assets, and has all requisite
power and authority to conduct its business and to own its
property, as now conducted or owned, and as contemplated by this
Loan Agreement.
(ii) ▇▇▇▇▇▇ is a duly organized validly existing
corporation in good standing under the laws of New Jersey and is
duly qualified in the jurisdiction where the nature of its
business is such that qualification is required and where
failure to be so qualified would materially adversely affect its
business or assets, and has all requisite power and authority to
conduct its business and to own its property, as now conducted
or owned, and as contemplated by this Loan Agreement.
(iii) Cambridge is a duly organized validly existing
corporation in good standing under the laws of Delaware and,
except for the Commonwealth of Massachusetts, is duly qualified
in the jurisdiction where the nature of its business is such
that qualification is required and where failure to be so
qualified would materially adversely affect its business or
assets, and has all requisite power and authority to conduct its
business and to own its property, as now conducted or owned, and
as contemplated by this Loan Agreement.
6.7.2 Ownership, Subsidiaries and Taxpayer Identification
Numbers.
-22-
(i) All of the stockholders of each of the Borrowers and
a description of the ownership interests held by the same, and
each of the Borrowers' Subsidiaries, are listed on Schedule
6.7.2 and no additional ownership interests, or rights or
instruments convertible into such ownership interests, exist.
(ii) The taxpayer identification numbers and state
organizational numbers (if applicable) of the foregoing Persons
are accurately stated on Schedule 6.7.2.
(iii) The Borrowers and the Guarantors are each the
owner, free and clear of all liens and encumbrances, of all of
the issued and outstanding capital stock of each of their
respective Subsidiaries. Except as set forth on Schedule 6.7.2,
all shares of such stock have been validly issued and are fully
paid and nonassessable and no rights to subscribe to any
additional shares have been granted, and no options, warrants,
or similar rights are outstanding except as set forth on
Schedule 6.7.2.
6.7.3 Authorization. The execution, delivery and performance of
this Agreement and the other Loan Documents to which the Borrowers and
the Guarantors are to become a party and the transactions contemplated
hereby and thereby (i) are within the authority of such Person, (ii)
have been duly authorized by all necessary corporate proceedings, (iii)
do not conflict with or result in any breach or contravention of any
Legal Requirement to which such Person is subject or any judgment,
order, writ, injunction, license or permit applicable to such Person,
and (iv) do not conflict with any provision of such Person's
organization documents or other charter documents or bylaws of, or
Contractual Obligation, except where such conflict would not have a
materially adverse effect on the business, assets or financial condition
of such Person.
6.8 Valid and Binding. Each of the Loan Documents constitute legal,
valid and binding obligations of the Borrowers and the Guarantors under the
respective Loan Document to which they are party, in accordance with the
respective terms thereof, subject to bankruptcy, insolvency and similar laws of
general application affecting the rights and remedies of creditors and, with
respect to the availability of the remedies of specific enforcement, subject to
the discretion of the court before which any proceeding therefor may be brought.
6.9 Deferred Compensation and ERISA. Borrowers do not have any pension,
profit sharing, stock option, insurance or other arrangement or plan for
employees covered by Title IV of the Employment Retirement Security Act of 1974,
as now or hereafter amended ("ERISA") except as may be designated to Agent in
writing by Borrowers from time to time ("ERISA Plan") and no "Reportable Event"
as defined in ERISA has occurred and is now continuing with respect to any such
ERISA Plan. The granting of the Loan, the performance by Borrowers of their
obligations under the Loan Documents, and Borrowers' conducting of its
operations do not and will not violate any provisions of ERISA.
6.10 No Materially Adverse Contracts, Etc. None of the Borrowers or the
Guarantors nor any of their respective Subsidiaries is subject to any charter,
corporate or other legal restriction, or any judgment, decree, order, rule or
regulation that has or is expected in the future to have a materially adverse
effect on the business, assets or financial condition of such Person. None of
the Borrowers or
-23-
the Guarantors nor any of their respective Subsidiaries is a party to any
contract or agreement that has or is expected, in the judgment of the such
Person's officers, to have any materially adverse effect on the business of such
Person or such Person's Subsidiaries.
6.11 Compliance With Other Instruments, Laws, Etc. None of the Borrowers
or the Guarantors nor any of their respective Subsidiaries is in violation of
any provision of its charter or other organization documents, by-laws, or any
Contractual Obligations or any Legal Requirements, in any of the foregoing cases
in a manner that could result in the imposition of substantial penalties or
materially and adversely affect the financial condition, properties or business
of such Person or such Person's Subsidiaries.
6.12 Tax Status. The Borrowers and the Guarantors and their respective
Subsidiaries (a) have made or filed all federal and state income and all other
tax returns, reports and declarations required by any jurisdiction to which such
Person is subject, (b) has paid all taxes and other governmental assessments and
charges shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and by appropriate proceedings and
(c) has set aside on its books provisions reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. Except for taxes being contested as provided in clause
(b), above, there are no unpaid taxes in any material amount claimed to be due
by the taxing authority of any jurisdiction, and the officers of the foregoing
Persons know of no basis for any such claim.
6.13 Holding Company and Investment Company Acts. None of the Borrowers
nor any of their Subsidiaries is a "holding company", or a "subsidiary company"
of a "holding company", or an "affiliate" of a "holding company", as such terms
are defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
6.14 Certain Transactions. Except as set forth in Schedule 6.14 hereof,
as of the date of this Agreement, none of the officers, trustees, directors, or
employees of the Borrowers or any of their Subsidiaries is presently a party to
any transaction with the Borrowers or any of their Subsidiaries (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, trustee, director or such employee or
any corporation, partnership, trust or other entity in which any officer,
trustee, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.
6.15 Regulations U and X. No portion of any Warehousing Advance is to be
used for the purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are used in Regulations U and X of the Board of Governors
of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
6.16 Loan Documents. All of the representations and warranties of the
Borrowers and the Guarantors made in their respective Loan Documents are true
and correct in all material respects.
-24-
6.17 No Material Change: No Default. There has been no material adverse
change in the financial condition, business, affairs of any of the Borrowers or
the Guarantors, or their respective Subsidiaries since the date of its last
financial statement most recently delivered to the Agent. No Default or Event of
Default exists under any of the Loan Documents.
6.18 No Broker or Finder. None of the Borrowers, nor anyone on behalf
thereof has dealt with any broker, finder or other person or entity who or which
may be entitled to a broker's or finder's fee, or other compensation, payable by
the Agent or any of the Lenders in connection with this Loan.
6.19 Background Information and Certificates. All of the factual
information contained or referred to in Section 1 of this Agreement and in the
Exhibits and Schedules to this Agreement, and in the certificates furnished to
the Agent or any of the Lenders by or on behalf of Borrowers or the Guarantors
in connection with this Agreement or any other Loan Document, is true and
complete in all material respects, and omits no material fact necessary to make
the same not misleading.
6.20 Servicing. Schedule 6.20 is a true and complete list of each
Borrower's Servicing Portfolio. All of each Borrower's Servicing Contracts are
in full force and effect, and are unencumbered by Liens other than Liens of
Residential Funding, Inc. and Commerce Bank, which shall be terminated promptly
after the Closing Date. No default or event that, with notice or lapse of time
or both, would become a default, exists under any of the Borrowers' Servicing
Contracts.
6.21 Assumed Names The Borrowers do not originate Mortgage Loans or
otherwise conduct business under any names other than its legal name and the
assumed names set forth on Schedule 6.22. Each Borrower has made all filings and
taken all other action as may be required under the laws of any jurisdiction in
which it originates Mortgage Loans or otherwise conducts business under any
assumed name. Borrowers' use of the assumed names set forth on Schedule 6.22
does not conflict with any other Person's legal rights to any such name, nor
otherwise give rise to any liability by Borrower to any other Person.
Each request by any Borrower for a Warehousing Advance: (i) shall constitute an
affirmation by such Borrower on behalf of itself and the other Borrowers that
the foregoing representations and warranties remain true and correct as of the
date of such request (except as to matters specifically disclosed in writing to
Agent and each of the Lenders prior to or simultaneously with such written
request, and except to the extent of changes resulting from transactions
contemplated and permitted by this Agreement and the other Loan Documents and
changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and except to the extent that such
representations and warranties relate expressly to an earlier date) and, unless
Agent and each of the Lenders is notified to the contrary prior to the
disbursement of the requested Warehousing Advance, will be so on the date of
such Warehousing Advance, and (ii) shall constitute the representation and
warranty of Borrowers that the information set forth in each such request is
true and correct and omits no material fact necessary to make the same not
misleading.
7. COVENANTS. Each Borrower covenants and agrees that from the date hereof
and so long as Lenders have any obligation to make the Warehousing Advance
hereunder, or any indebtedness is
-25-
outstanding hereunder, or any Warehousing Advance or other Obligations remain
outstanding, as follows:
7.1 Punctual Payment. Each Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Loan and all interest, fees
and other Obligations provided for in this Agreement, all in accordance with the
terms of this Agreement and the Notes, as well as all other sums owing pursuant
to the Loan Documents.
7.2 Maintenance of Office. PWF will maintain its chief executive office
in Mineola, New York, Cambridge will maintain its chief executive office in
Mineola, New York, and ▇▇▇▇▇▇ will maintain its chief executive office in
Bernardsville, New Jersey, or at such other place in the United States of
America as the Borrowers shall designate upon not less than forty five (45) days
prior written notice to the Agent.
7.3 Records and Accounts. Each Borrower will (a) keep, and cause each of
its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with GAAP and
(b) maintain adequate accounts and reserves for all taxes (including income
taxes), depreciation and amortization of its properties and the properties of
its Subsidiaries, contingencies, and other reserves.
7.4 Notices.
7.4.1 Defaults. Each Borrower will promptly notify the Agent in
writing of the occurrence of any Default or Event of Default known to
Borrower. If any Person shall give any notice or take any other action
in respect of a claimed default (whether or not constituting an Event of
Default) under this Agreement or under any note, evidence of
indebtedness, indenture or other obligation to which or with respect to
which the Borrowers or any of their Subsidiaries is a party or obligor,
whether as principal or surety, and such default would permit the holder
of such note or obligation or other evidence of indebtedness to
accelerate the maturity thereof, which acceleration would have a
material adverse effect on the Borrowers, the Borrowers shall forthwith
give written notice thereof to the Agent, describing the notice or
action and the nature of the claimed default.
7.4.2 Notification of Claims against Collateral. The Borrowers
will, promptly (but in any event not later than ten (10) days after)
upon becoming aware thereof, notify the Agent in writing of any events
relating to the Collateral that materially adversely affect the rights
of the Agent or the Lenders with respect thereto.
7.4.3 Notice of Litigation and Judgments. The Borrowers will,
and will cause each of their respective Subsidiaries, and the
Guarantors, and any Subsidiaries of the Guarantors, to, give notice to
the Agent and each of the Lenders in writing (within ten (10) days of
the date on which any such Person shall become aware thereof) of any
litigation or proceedings threatened or any pending litigation and
proceedings affecting such Person or to which such Person is or is to
become a party involving an amount in controversy exceeding $250,000.00
or that could reasonably be expected to have a materially adverse effect
on such Person and stating the nature
-26-
and status of such litigation or proceedings. The Borrowers will, and
will cause each of their respective Subsidiaries, the Guarantors, the
Subsidiaries of the Guarantors, to give notice to the Agent and each of
the Lenders, in writing, in form and detail satisfactory to the Agent
and each of the Lenders, (within ten (10) days of the date on which any
such Person shall become aware thereof) of any judgment in excess of
$250,000.00 not covered by insurance, final or otherwise, against such
Persons.
7.4.4 Eligibility Impaired. The Borrowers will give notice to
the Agent and each of the Lenders of (x) the suspension, revocation or
termination of any Borrower's eligibility, in any respect, as approved
lender, seller/servicer or issuer as described under Section 8.1, and
(y) the transfer, loss, nonrenewal or termination of any Servicing
Contracts to which any Borrower is a party, or which is held for the
benefit of any Borrower, and the reason for that transfer, loss,
nonrenewal or termination.
7.5 Financial Statements and Reports. The Borrowers shall furnish or
cause to be furnished to the Agent and each of the Lenders from time to time,
the following financial statements and reports and other information, all in
form, manner of presentation and substance reasonably acceptable to Agent:
7.5.1 Annual Statements. As soon as practicable, but in any
event not later than one hundred twenty (120) days after the end of each
fiscal year of the Borrowers, the unaudited consolidating (but only as
among the Borrowers) balance sheet of the Borrowers and their
Subsidiaries at the end of such year, and the related unaudited
consolidating (but only as among the Borrowers) statements of earnings
and cash flows for such year, each setting forth in comparative form the
figures for the previous fiscal year and all such statements to be in
reasonable detail, prepared in accordance with Generally Accepted
Accounting Principles, and accompanied by an auditor's report prepared
without qualification by an independent certified public accountant
reasonably acceptable to the Agent.
7.5.2 Projections. As soon as practicable, but no later than
forty-five (45) days prior to the end of each fiscal year of the
Borrowers, the Borrowers shall provide the Agent with the operating
projections for the Borrowers for the next fiscal year in a form
satisfactory to the Agent.
7.5.3 Quarterly Statements. As soon as practicable, but in any
event not later than sixty (60) days after the end of each fiscal
quarter of the Borrowers (including for the fourth fiscal quarter, which
shall be subject to normal year end audit adjustments), the management
prepared consolidated balance sheet of the Borrowers and their
Subsidiaries at the end of such quarter, and the related management
prepared consolidated statements of earnings for such quarter, each
setting forth in comparative form the figures for the previous fiscal
quarter and all such statements to be in reasonable detail, prepared in
accordance with Generally Accepted Accounting Principles, and
accompanied by an auditor's report prepared without qualification by an
independent certified public accountant reasonably acceptable to the
Agent.
7.5.4 Pipeline Reports At the Agent's request, a commitment
summary and pipeline report dated as of the end of such month.
-27-
7.5.5 Public Filings. Within ten (10) Business Days after the
filing or mailing thereof, copies of all material of a financial nature
filed with the Securities and Exchange Commission or sent to the public
stockholders of Charter Municipal Mortgage Acceptance Company.
7.5.6 Compliance Certificate. Concurrently with the delivery of
the financial statements referred to in Sections 7.5.1 and 7.5.2 above,
a certificate (to be in the form of Exhibit H or on such other form as
the Agent may from time to time prescribe) of an Authorized
Representative stating that, to the best of such Authorized
Representative's knowledge, the Borrower, the Guarantor and PWF during
such period observed or performed in all material respects all of their
covenants and other agreements, and satisfied in all material respects
every material condition, contained in this Agreement to be observed,
performed or satisfied by them, and that such Authorized Representative
has obtained no knowledge of any Default or Event of Default except as
specified in such certificate and such certificate shall include the
calculations in reasonable detail required to indicate Borrower's
compliance with Section 7.24.1.
7.5.7 Accountant's Letters. Contemporaneously with the
Borrower's receipt thereof, copies of all accountants' management
letters delivered to any of the Borrower, its Subsidiaries, the
Guarantor or any of the Guarantor's Subsidiaries.
7.5.8 Servicing Portfolio Report. As soon as available and in
any event within 45 days after the end of each Calendar Quarter, a
consolidated report ("Servicing Portfolio Report") as of the end of the
Calendar Quarter, as to all Mortgage Loans the servicing rights to which
are owned by Borrower (specified by investor type, recourse and
non-recourse) regardless of whether the Mortgage Loans are Pledged
Loans. The Servicing Portfolio Report must indicate which Mortgage Loans
(1) are current and in good standing, (2) are more than 30, 60 or 90
days past due, (3) are the subject of pending bankruptcy or foreclosure
proceedings, or (4) have been converted (through foreclosure or other
proceedings in lieu of foreclosure) into real estate owned by, Borrower.
7.5.9 Production Report. As soon as available and in any event
within 45 days after the end of each fiscal quarter in the fiscal year
of each Borrower, a consolidated loan production report as of the end of
that fiscal quarter, presenting the total dollar volume and the number
of Mortgage Loans originated and closed or purchased during that fiscal
quarter and for the fiscal year-to- date, specified by property type and
loan type.
7.5.10 Other Reports. Other reports in respect of Pledged Loans
and Pledged Securities, in such detail and at such times as Agent in its
discretion may reasonably request.
7.5.11 Agency Notices. With reasonable promptness, such further
information regarding the business, operations, properties or financial
condition of Borrowers as Agent may reasonably request, including copies
of any audits completed by HUD, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac,
as well as any material notices to any of the Borrowers from any of the
foregoing Persons.
-28-
7.5.12 Valuation of Servicing Portfolio As soon as practicable,
but in any event not later than sixty (60) days after the end of each
fiscal quarter of the Borrowers, the management prepared valuation of
Servicing Portfolio in form and substance satisfactory to the Lender.
7.5.13 Additional Financial Information. From time to time,
within a reasonable period of time of the request, such other financial
data and information as the Agent or any Lender may reasonably request.
7.6 Existence; Conduct of Business.
7.6.1 (a) Except as a consequence of a transaction permitted
pursuant to Section 7.18.1 (i) or (ii), the Borrowers will do or cause
to be done all things necessary to preserve and keep in full force and
effect (i) PWF's existence as a Delaware corporation, (ii) ▇▇▇▇▇▇'▇
existence as a New Jersey corporation, and (iii) Cambridge's existence
as a Delaware corporation.
(b) Each of the Borrowers will do or cause to be done all things
necessary to preserve and keep in full force all of its rights and
franchises, except where such failure would not have a material adverse
effect on the business, assets or financial condition of any such
Person.
(c) Each of the Borrowers will only engage in the mortgage
banking business with primary focus on multifamily residential
mortgages.
7.6.2 Without limiting the provisions of Section 7.6.1, each
Borrower shall preserve and maintain all of its rights, privileges,
licenses and franchises necessary or desirable in the normal conduct of
their respective business, including its eligibility as lender,
seller/servicer and issuer described under Section 8.1; conduct its
respective business in an orderly and efficient manner; maintain a net
worth of acceptable assets as required for maintaining their respective
eligibilities as lender, seller/servicer and issuer described under
Section 8.1; and make no material change in the nature or character of
their respective business or engage in any business in which they were
not engaged on the date of this Agreement, except as permitted by the
Agreement.
7.7 Insurance. Schedule 7.7 sets forth all presently existing insurance
maintained by the Borrowers. Each of the Borrowers will maintain insurance with
respect to its other properties, and will cause each of its Subsidiaries to
maintain with financially sound and reputable insurers, insurance with respect
to such properties and its business against such casualties and contingencies as
shall be in accordance with the general practices of businesses engaged in
similar activities in similar geographic areas and in amounts, containing such
terms, in such forms and for such periods as may be reasonable and prudent.
7.8 Taxes and Trade Debt. Each of the Borrowers will, and will cause
each of its Subsidiaries to, duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all taxes, assessments and
other governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, except
for
-29-
those taxes, assessments or charges which any such Person is contesting in good
faith by appropriate proceedings and with respect to which appropriate reserves
have been established and are being maintained in accordance with Generally
Accepted Accounting Principles.
7.9 Compliance with Laws, Contracts, Licenses, and Permits. Except where
the failure to comply would not have a material adverse effect on the business,
operations, properties, assets, or financial condition of the Borrowers or the
Guarantors and their respective Subsidiaries, each of the Borrowers will comply
with, and will cause each of the foregoing Persons to comply with (a) all
applicable Legal Requirements now or hereafter in effect wherever its business
is conducted, (b) the provisions of its Constituent Documents, (c) all of such
Person's Contractual Obligations, (d) all agreements and instruments to which it
is a party or by which it or any of its properties may be bound and (e) all
applicable decrees, orders, and judgments. If at any time while any Obligation
is outstanding or the Lenders have any obligation to make Warehousing Advances
hereunder any Governmental Authorization or other third party consents,
approvals, or notifications shall become necessary or required in order that
Borrower may fulfill any of its obligations hereunder, the Borrowers will
promptly take or cause to be taken all reasonable steps within the power of the
Borrowers to obtain such Governmental Authorization or other third party
consents, approvals, or notifications, and furnish the Agent and the Lenders
with evidence thereof, unless the failure to do so would not have a material
adverse affect on the Borrowers.
7.10 Bank Accounts. To permit the Agent to monitor the financial
performance of each of the Borrowers, the Borrowers shall maintain their
Operating Accounts, other primary deposit and investment accounts, and all
escrow and custodial accounts with Fleet National Bank. The Borrowers shall
diligently pursue the establishment of the aforementioned accounts at Fleet
National Bank and shall diligently pursue the closing of existing accounts at
other banks, and the Borrowers acknowledge and agree that the foregoing shall be
completed no later than June 30, 2002, with time being of the essence.
Notwithstanding the foregoing, PWF shall be permitted to maintain the ▇▇▇▇▇▇ ▇▇▇
Reserve Account at State Street Bank and Trust Company.
7.11 Closing Instructions. Each Borrower shall Indemnify and hold Agent
and each Lender and all those claiming by, through or under the Agent and each
of the Lenders, harmless from and against any loss, including reasonable
attorneys' fees and costs, attributable to the failure of any title insurance
company, agent or approved attorney to comply with Borrower's disbursement or
instruction letter relating to any Mortgage Loan. Agent has the right to
pre-approve Borrower's disbursement or instruction letter to the title insurance
company, agent or approved attorney in any case in which Borrower intends to
obtain a Warehousing Advance against the Mortgage Loan to be created at
settlement or to pledge that Mortgage Loan as Collateral under this Agreement.
Borrower's disbursement or instruction letter must state that Agent, for the
benefit of the Lenders has a security interest in any amounts advanced to fund a
Mortgage Loan and in the Mortgage Loan funded with those amounts and must
require the title insurance company, agent or approved attorney involved in the
transaction to return any amounts advanced by Lender and not used to fund the
Mortgage Loan.
7.12 Other Loan Obligations Each Borrower shall perform all of its
material obligations under the terms of each loan agreement, note, mortgage,
security agreement or debt instrument by which such Borrower is bound or to
which any of its property is subject, and promptly notify Lender in writing
-30-
of a declared default under or the termination, cancellation, reduction or
nonrenewal of any of its other lines of credit or agreements with any other
lender. Schedule 7.12 is a true and complete list of all such lines of credit or
agreements as of the date of this Agreement.
7.13 Further Assurances. (a) Each Borrower will cooperate with, and will
cause each of its Subsidiaries, and the Guarantors to cooperate with the Agent
and the Lenders and execute such further instruments and documents as any Lender
or the Agent shall reasonably request to carry out to their satisfaction the
transactions contemplated by this Agreement and the other Loan Documents.
(b) Without limiting the generality of the foregoing, on or before March
31, 2002, the Borrowers shall provide the Agent with certificates of foreign
qualification for each (i) PWF from the Secretary of State for the State of
Illinois, and (ii) Cambridge from the Secretary of State of the Commonwealth of
Massachusetts
7.14 Restrictions on Liens, Transfers and Additional Debt.
7.14.1 Restrictions on Indebtedness. The Borrowers will not, and
will not permit any of their Subsidiaries to, create, incur, assume,
guarantee or be or remain liable, contingently or otherwise, with
respect to any Indebtedness other than:
(i) Indebtedness to the Lenders arising under any of the
Loan Documents;
(ii) Current liabilities of the Borrowers or their
Subsidiaries incurred in the ordinary course of business but not
incurred through (i) the borrowing of money, or (ii) the
obtaining of credit except for credit on an open account basis
customarily extended and in fact extended in connection with
normal purchases of goods and services;
(iii) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials
and supplies to the extent that payment therefor shall not at
the time be required to be made in accordance with the
provisions of Section 7.8;
(iv) Secured purchase money debt or capitalized lease
obligations;
(v) Indebtedness in respect of judgments or awards that
have been in force for less than the applicable period for
taking an appeal so long as execution is not levied thereunder
or in respect of which the Borrower shall at the time in good
faith be prosecuting an appeal or proceedings for review and in
respect of which a stay of execution shall have been obtained
pending such appeal or review;
(vi) Endorsements for collection, deposit or negotiation
and warranties of products or services, in each case incurred in
the ordinary course of business;
(vii) (a) the Borrowers' Indebtedness pursuant to the
RFC Line and (b) ▇▇▇▇▇▇'▇ Indebtedness pursuant to the Commerce
Line; and (c) up to $750,000 of Indebtedness
-31-
incurred in the ordinary course of business for capital
expenditures (e.g computer system); provided, however, effective
as the Closing Date, the Borrowers shall no longer obtain loans
and advances under the RFC Line, and ▇▇▇▇▇▇ shall no longer
obtain loans and advances under the Commerce Line, and each of
the Borrowers shall terminate the RFC Line, and ▇▇▇▇▇▇ shall
terminate the Commerce Line, and the Borrowers shall repay all
amounts due and owing under each of the RFC Line and the
Commerce Line, on or before March 30, 2002; provided, however,
that PWF and the PWF Subsidiaries, as applicable, may obtain
loans from RFC under the RFC Line in order to fund during the
week of December 24, 2001, the two pending mortgage closings in
the respective amounts of approximately $14,000,000 and
$700,000.
(viii) Indebtedness to ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac, GNMA,
FHA or other parties with whom the PWF and the PWF Subsidiaries
originate, sell, repurchase or service Mortgage Loans, to the
extent directly relating to or arising out of such origination,
sale, repurchase, or servicing in the ordinary course of
business;
(ix) Indebtedness secured by real property acquired upon
foreclosure of Mortgages, which, either (x) is so secured at the
time of such acquisition, or (y) is directly related to such
real property, not in excess of the fair market value thereof,
and reasonably expected by the Borrower or the subject
Subsidiary to be recovered from the sale or other disposition of
the subject real property;
(x) Unsecured Indebtedness for borrowed money incurred
in the ordinary course of business and not exceeding $750,000,
plus intercompany liabilities which have a maturity date which
is later than the Maturity Date and which are subordinated to
the Obligations pursuant to subordination agreements reasonably
satisfactory to the Agent which shall permit repayment as long
as (A) no Event of Default then exists, and (B) no Event of
Default would thereupon occur (including on a pro forma basis as
if applicable financial covenants were tested as of the date of
such repayment;
(xi) Indebtedness (exclusive of the Indebtedness
referred to in clause (x) above) incurred to finance the
purchase or leasing of equipment, in the ordinary course of
business;
(xii) Indebtedness incurred in the ordinary course of
business secured by one or more specific assets, in each
instance the principal amount of which shall not exceed the GAAP
book value of the subject asset(s);
(xiii) Guaranties by any Borrower for the benefit of any
other Borrower or such Borrower's Subsidiaries in the ordinary
course of business;
(xiv) other Indebtedness existing on the date of this
Agreement and listed and described on Schedule 7.14.1 hereto;
(xv) any Indebtedness due or to become due to the
Selling Stockholders under the Stock Purchase Agreement.
-32-
7.14.2 Restrictions on Liens, Etc. Except in connection with
their purchase, origination and sale from time to time of Mortgage Loans
and related assets in the ordinary course of business as conducted on
the Agreement Date, the Borrowers will not, and will not permit any of
their Subsidiaries to, (a) create or incur or suffer to be created or
incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its
property or assets of any character whether now owned or hereafter
acquired, or upon the income or profits therefrom; (b) transfer any of
its property or assets or the income or profits therefrom for the
purpose of subjecting the same to the payment of Indebtedness or
performance of any other obligation in priority to payment of its
general creditors; (c) acquire, or agree or have an option to acquire,
any property or assets upon conditional sale or other title retention or
purchase money security agreement, device or arrangement; (d) suffer to
exist for a period of more than thirty (30) days after the same shall
have been incurred any Indebtedness or claim or demand against it that
if unpaid might by law or upon bankruptcy or insolvency, or otherwise,
be given any priority whatsoever over its general creditors; or (e)
sell, assign, pledge or otherwise transfer any accounts, contract
rights, general intangibles, chattel paper or instruments, with or
without recourse;(f) agree to a negative pledge in favor of any Person
other than the Agent or the Lenders pursuant to the Acquisition Facility
with respect to any assets or rights, now owned or hereafter arising
provided that the Borrowers and any Subsidiary of the Borrowers may
create or incur or suffer to be created or incurred or to exist:
(i) liens on properties to secure taxes, assessments and
other government charges or claims for labor, material or
supplies in respect of obligations not overdue or which are
being contested in good faith by appropriate proceedings for
which adequate reserves determined in accordance with GAAP have
been established (and as to which the property subject to any
such lien is not yet subject to foreclosure, sale, collection,
levy or loss on account thereof);
(ii) deposits or pledges made in connection with, or to
secure payment of, workmen's compensation, unemployment
insurance, old age pensions or other social security
obligations;
(iii) liens on properties in respect of judgments or
awards, the Indebtedness with respect to which is permitted by
Section 7.14.1(iv);
(iv) liens on property granted in connection with each
of the RFC Line and the Commerce Line, securing Indebtedness
permitted by Section 7.14.1(vii);
(v) presently outstanding liens listed on Schedule
7.14.2 hereto;
(vi) liens in favor of the Agent and the Lenders under
the Loan Documents;liens securing Indebtedness to ▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇ Mac, GNMA, FHA or other parties with whom the Borrower
or its Subsidiaries originate, sell, repurchase or otherwise
service Mortgage Loans provided such liens relate to the
-33-
foregoing transactions, but only to the extent directly relating
to or arising out of such origination, sale, repurchase, or
servicing in the ordinary course of business;
(vii) liens securing Indebtedness secured by real
property acquired upon foreclosure of Mortgages, which either
(x) is so securing at the time of such acquisition, or (y) is
directly related to such real property, not in excess of the
fair market value thereof, and reasonably expected by the
Borrower or the subject Subsidiary to be recovered from the sale
or other disposition of the subject real property;
(viii) liens arising from good faith deposits in
connection with or to secure performance of tenders, bids,
leases, government contracts, performance and return-of-money
bonds and other similar obligations incurred in the ordinary
course of business (other than obligations in respect of the
payment of borrowed money);
(ix) liens arising from good faith deposits in
connection with or to secure performance of statutory
obligations and surety and appeal bonds;
(x) easements, rights-of-way, restrictions (including
zoning restrictions), matters of plat, minor defects or
irregularities in title and other similar charges or
encumbrances not, in any material respect, impairing the use of
the encumbered property for its intended purposes;
(xi) liens securing Indebtedness permitted pursuant to
Section 7.12.1(xi), provided such lien does not extend beyond
the equipment which is the subject of the Indebtedness;
(xii) liens securing credit enhancement products
supporting multi-family housing project bonds or other financing
of multi-family housing projects in the ordinary course of
business which indebtedness in permitted pursuant to Section
7.12.1(xiv)(A);
(xiii) liens in favor of GNMA in connection with GNMA
Mortgage Loans, provided such liens relate to the subject
Mortgage Loan.
7.15 Distributions.
7.15.1 Permitted Distributions. So long as no Default or
Event of Default has occurred and is continuing (unless waived
by Agent and the Requisite Lenders as set forth in Section
11.4.1) the Borrowers may make any payments or distributions to
the Guarantor and Affiliates of the Guarantor ("Permitted
Distributions")
7.16 Restrictions on Investments. Borrowers will not, and will not
permit any of their Subsidiaries to make or permit to exist or to remain
outstanding any Investment except an Investment which are in:
-34-
(i) Cash Equivalents (provided, however, the ▇▇▇▇▇▇ ▇▇▇
Reserve Account may be invested for a period that exceeds 364
days);
(ii) property acquired in the normal and ordinary course
of each Borrower's present business of originating and
purchasing Mortgage Loans (including property acquired on
foreclosure of Mortgages and, as to PWF and the PWF
Subsidiaries, the origination and purchase of Mortgage Loans in
the ordinary course of their business) as conducted on the
Agreement Date and any other business permitted under this
Agreement; and
(iii) ▇▇▇▇▇▇ Mae common stock which is currently owned
by the Borrowers;
(iv) Investments in Subsidiaries provided that if an
Event of Default has occurred and is continuing, Borrower will
not, and will not permit any of its Subsidiaries to, make any
new Investments in Subsidiaries.
7.17 Indemnification Against Payment of Brokers' Fees. Each Borrower
agrees to defend, indemnify and hold harmless Agent and each of the Lenders from
and against any and all liabilities, damages, penalties, costs, and expenses,
relating in any manner to any brokerage or finder's fees in respect of the
Facility (except as resulting from actions of the Agent or any Lender).
7.18 Merger, Consolidation.
7.18.1 The Borrowers will not, and will not permit any of their
Subsidiaries to, become a party to any merger or consolidation, or agree
to or effect any asset acquisition or disposition or stock acquisition
or disposition (other than the acquisition or disposition of assets in
the ordinary course of business consistent with past practices,
including the acquisition or disposition of Mortgage Loans and property
acquired on foreclosure of Mortgages) except (i) the merger or
consolidation of one or more of the Subsidiaries of any Borrower with
and into such Borrower, (ii) the merger or consolidation of two or more
Subsidiaries of any Borrower, and (iii) other dispositions of Service
Contracts in an amount not to exceed five percent (5%) of the Servicing
Portfolio during any twelve (12) month period.
7.18.2 The Borrowers will not, and will not permit any of their
Subsidiaries to cease actively to engage in the business of originating
or acquiring Mortgage Loans or make any other material change in the
nature or scope of the business in which each Borrower engages as of the
date of this Agreement.
7.18.3 The Borrowers will not, and will not permit any of their
Subsidiaries to sell, assign, lease, convey, transfer or otherwise
dispose of (whether in one transaction or a series of transactions) all
or any substantial part of such Person's business or assets, whether now
owned or acquired after the Closing Date, other than, in the ordinary
course of business and to the extent not otherwise prohibited by this
Agreement, to another Borrower or Subsidiary of a Borrower, and sales of
(1) Mortgage Loans, (2) Mortgage-backed Securities , (3) Servicing
-35-
Contracts and (4) other dispositions of Serviced Loans in an amount not
to exceed five percent (5%) of the Servicing Portfolio during any twelve
(12) month period.
7.18.4 The Borrowers will not, and will not permit any of their
Subsidiaries to issue any additional ownership interests, or rights or
instruments convertible into such ownership interests, except for (i)
Permitted Transfers, (ii) those transactions set forth on Schedule
6.7.2, and (iii) the exchange by Charter Mac Corporation of its common
stock into Class A Common Stock..
7.18.5 The Borrowers will not, and will not permit any of their
Subsidiaries to change their respective taxpayer identification numbers
and state organizational numbers unless such Person shall have provided
the Agent with not less than forty-five days prior written notice.
7.19 Subsidiaries. The Borrowers other than PWF may not acquire, form or
otherwise invest in any Subsidiary. PWF may acquire, form or otherwise invest in
a Subsidiary which engages in the mortgage banking business primarily involving
multi-family mortgages, including purchasing, servicing and originating. Any
Subsidiary created by PWF shall constitute a "Borrower" as referred to herein.
Each of the Borrowers acknowledges and covenants that upon the creation of any
new Subsidiary permitted hereby, at the Agent's option such Subsidiary shall
execute and deliver to the Agent an agreement reasonably satisfactory to the
Agent under which such Subsidiary joins this Agreement as a Borrower.
7.20 Loans and Advances. Except as permitted in Section 7.14.1 and 7.16,
the Borrows will not and will not permit any of their Subsidiaries to, make any
loans or advances to any Person other than advances to the Borrowers' or their
Subsidiaries' employees in the ordinary course of business for reasonable
expenses to be incurred by such employees for the benefit of the Borrowers or
such Subsidiaries. Notwithstanding the foregoing, the Borrowers may purchase and
originate Mortgage Loans in the ordinary course of business.
7.21 Fiscal Year. The fiscal year of the Borrowers and their
Subsidiaries presently ends on September 30 of each year. If the Borrowers shall
change their fiscal year end, such Person shall promptly furnish the Agent with
written notice thereof.
7.22 Charging Accounts. Agent is hereby authorized, on or after the due
date, to charge the Cash Collateral Account at Agent with the amount of all
principal and interest payments due under this Agreement, the Notes or the other
Loan Documents and upon the occurrence and during the continuation of an Event
of Default, the Agent or any of the Lenders is hereby authorized on or after the
due date, to charge such account at Agent, or any other deposit account of any
Borrower at Agent or any of the Lenders, with the amount of all unpaid fees,
costs and expenses to which the Agent and the Lenders are entitled under this
Agreement. The failure of Agent to so charge such account shall not affect or
limit Borrowers' obligation to make any required payment.
7.23 Place for Records; Inspection.
7.23.1 Each Borrower shall, and cause each of their Subsidiaries
to, maintain all of their business records as follows: (x) as to PWF and
Cambridge, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
-▇▇-
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and (y) as to ▇▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇. Upon reasonable notice and at
reasonable times during normal business hours Agent and each Lender
shall have the right (through such agents or consultants as Agent or any
Lender may designate) to examine the foregoing Persons' property and
make copies of and abstracts from such Persons' books of account,
correspondence and other records and to discuss its financial and other
affairs with any of its senior officers and any accountants hired by any
of the foregoing Persons, it being agreed that the Agent and each Lender
shall not divulge information obtained from such examination to others
except in connection with Legal Requirements and in connection with
administering the Loan, enforcing their rights and remedies under the
Loan Documents and in the conduct, operation and regulation of its
banking and lending business (which may include, without limitation, the
transfer of the Loan or of participation interests therein). Any
transferee of the Loan or any holder of a participation interest in the
Loan shall be entitled to deal with such information in the same manner
and in connection with any subsequent transfer of its interest in the
Loan or of further participation interests therein.
7.23.2 Without limiting the rights of the Agent and the Lenders
under Section 7.23.1, above, the Borrowers shall permit the Agent, at
the Borrowers' expense, to undertake semi-annual appraisals of the
Servicing Rights by any Approved Servicing Rights Appraiser, provided,
however, that so long as no Default or Event of Default has occurred and
is continuing, there shall be not more than two such appraisals in any
twelve month period.
7.24 Costs and Expenses. Whether or not the transactions contemplated
hereby shall be consummated, each Borrower agrees to pay promptly: (a) all the
actual and reasonable out-of-pocket costs and expenses of preparation of the
Loan Documents and any consents, amendments, waivers, or other modifications
thereto; (b) the reasonable fees, expenses, and disbursements of counsel to the
Agent in connection with the negotiation, preparation, execution, and
administration of the Loan Documents and any consents, amendments, waivers, or
other modifications thereto and any other documents or matters requested by any
Borrower; (c) all other actual and reasonable out-of-pocket costs and expenses
incurred by the Agent in connection with the establishment of the Facility, the
syndication of the Commitments and the negotiation, preparation, and execution
of the Loan Documents and any consents, amendments, waivers, or other
modifications thereto and the transactions contemplated thereby; and (d) all
reasonable out-of-pocket expenses (including reasonable attorneys' fees and
costs, which attorneys may be employees of the Agent or any Lender and the fees
and costs of appraisers, brokers, investment bankers or other experts retained
by the Agent or any Lender) incurred by the Agent or any Lender in connection
with (i) the enforcement of or preservation of rights under any of the Loan
Documents against the Borrowers, the Guarantors or any other Person, or the
administration thereof, (ii) any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings, and (iii) any litigation,
proceeding or dispute whether arising hereunder or otherwise, in any way related
to the Agent's or any Lender's relationship with the Borrowers, except to the
extent arising out of the Agent's or any Lender's bad faith, gross negligence,
willful misconduct or material breach of this Agreement or any other Loan
Document, as finally determined by a court of competent jurisdiction. The
covenants of this Section shall survive payment or satisfaction of payment of
amounts owing with respect to the Notes. The amount of all
-37-
such expenses shall, until paid, bear interest at the rate applicable to
principal hereunder (including the Default Rate) and be an Obligation secured by
any Collateral.
7.25 Indemnification. Each Borrower shall indemnify and hold harmless
the Agent and the Lenders and all those claiming by, through or under the Agent
and each of the Lenders ("Indemnified Party") from and against any and all
claims, actions and suits whether groundless or otherwise, and from and against
any and all liabilities, losses, damages and expenses of every nature and
character arising out of this Agreement or any of the other Loan Documents or
the transactions contemplated hereby ("Damages") including, without limitation
(a) any actual or proposed use by the Borrowers or any of their Subsidiaries of
the proceeds of any of the Loans, (b) the Borrowers or any of their Subsidiaries
entering into or performing this Agreement or any of the other Loan Documents,
or (c) with respect to the Borrowers and their Subsidiaries and their respective
properties and assets, the violation of any Legal Requirement, in each case
including, without limitation, the reasonable fees and disbursements of counsel
and allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding; provided, however, that no
Indemnified Party shall be entitled to indemnification if a court of competent
jurisdiction finally determines (all appeals having been exhausted or waived)
that such Indemnified Party acted in bad faith, with willful misconduct, gross
negligence, or material breach of this Agreement or any other Loan Document. No
Indemnified Party shall be entitled to settle or enter into any accommodation in
respect of any such claim, action or suit without the prior written consent of
the Borrowers (and that any Indemnified Party so settling or accommodating
without such Borrowers' consent shall not be entitled to indemnification
therefor), and provided, however, if the Borrowers shall refuse to provide its
written consent to a requested settlement, the Borrowers shall, as collateral
for potential payment of the full amount of the claimed Damages, provide either
a letter of credit in favor of the Indemnified Party, on terms and conditions
satisfactory to the Agent, in its sole discretion, or, as cash collateral, cash
or Cash Equivalents, any of which shall be in the full amount of the claimed
Damages, together with all anticipated costs and expenses (including reasonable
attorneys' fees and expenses) anticipated by the Agent, in its sole discretion,
to accrue in connection with the defense and possible payment of the claimed
Damages. If the Borrowers fail to provide such required collateral, or fails to
respond to a request for a consent to a settlement, within five (5) Business
Days of when first requested by the Agent, the Indemnified Party shall be
entitled to settle the claim as it proposed, and the Borrowers shall be liable
for the full amount thereof together with all related Damages. In litigation, or
the preparation therefor, the Lenders and the Agent shall be entitled to select
their own counsel and, in addition to the foregoing indemnity, the Borrowers
agree to pay promptly the reasonable fees and expenses of such counsel. If, and
to the extent that the obligations of the Borrowers under this Section 7.25 are
unenforceable for any reason, the Borrowers hereby agree to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law. The provisions of this Section 7.25 shall
survive the repayment of the Loan and the termination of the obligations of the
Lenders and the Agent hereunder.
7.26 Financial Covenants.
7.26.1 Tangible Net Worth. The Borrowers shall, on a
consolidated basis (as among themselves only), maintain a Tangible Net
Worth of not less than the greater of (x) $13,000,000.00, or (y) an
amount sufficient to satisfy the requirements from time to time of both
-38-
▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac, to be tested as of the Closing Date and on
the last day of each calendar quarter thereafter.
7.26.2 Liquidity. The Borrowers shall, on a consolidated basis,
among themselves, at all times maintain unrestricted cash and Cash
Equivalents of no less than $500,000 plus 0.15% of the aggregate
outstanding principal amount of aggregate of Serviced Loans serviced on
behalf of ▇▇▇▇▇▇ Mae, or such higher level as ▇▇▇▇▇▇ ▇▇▇ may require
from time to time.
7.26.3 Debt Service Coverage. The Borrowers shall, on a
consolidated basis among themselves, maintain a minimum Debt Service
Coverage ratio of 1.25:1, which shall be tested quarterly on a rolling 4
quarter basis commencing March 31, 2002.
7.26.4 Minimum Portfolio Amount. At no time shall the aggregate
principal balances of the Serviced Loans (exclusive of Serviced Loans
which are sixty (60) or more days past due or are otherwise in default)
be less than $2,300,000,000.
7.26.5 Maximum Serviced Loans Delinquencies. At no time shall
the aggregate principal amount of Serviced Loans which are sixty (60) or
more days past due or otherwise in default exceed 1% of aggregate
principal balances of all Serviced Loans.
7.27 Replacement Documentation. Upon receipt of an affidavit of an
officer of Agent as to the loss, theft, destruction or mutilation of any Note,
this Agreement, any Loan Document, or any other security document which is not
of public record, and customary (unsecured, unbonded) indemnification reasonably
satisfactory to the Borrowers, each Borrower will issue, in lieu thereof, a
replacement Note, Agreement, Loan Document or other security document in the
same principal amount thereof and otherwise of like tenor.
7.28 Additional Facilities Co-Terminous and Cross Defaulted. Each
Borrower acknowledges and agrees that the occurrence of an event of default
under the Acquisition Facility shall constitute an Event of Default hereunder.
7.29 Pledge of Servicing Contracts. None of the Borrowers will Pledge or
grant a security interest in any existing or future Servicing Contracts of such
Borrower other than to Agent.
7.30 Recourse Servicing Contracts. None of the Borrowers will acquire or
enter into Servicing Contracts under which any Borrower must repurchase or
indemnify the holder of the Mortgage Loans as a result of defaults on the
Mortgage Loans at any time during the term of those Mortgage Loans, except for
loss sharing under ▇▇▇▇▇▇ ▇▇▇ DUS Mortgage Loans and as a result of customary
representations and warranties concerning the Mortgage Loans.
7.31 Gestation Agreements. None of the Borrowers will directly or
indirectly sell or finance a Mortgage Loan under any Gestation Agreement if the
Mortgage Loan is or was previously pledged to Lender as Collateral under this
Agreement.
-39-
8. SPECIAL REPRESENTATIONS, WARRANTIES AND COVENANTS CONCERNING COLLATERAL
8.1 Special Representations and Warranties Concerning Eligibility as
Seller/Servicer of Mortgage Loans
Each Borrower represents and warrants to Agent and the Lenders, as of
the date of this Agreement and as of the date of each Warehousing Advance
Request and the making of each Warehousing Advance, that each Borrower is
approved and qualified and in good standing as a lender or seller/servicer, as
set forth below, and meets all requirements applicable to its status as:
8.1.1 PWF, ▇▇▇▇▇▇ and Cambridge are FHA approved mortgagees,
eligible to originate, purchase, hold, sell and service FHA fully
insured Mortgage Loans.
8.1.2 Cambridge is a ▇▇▇▇▇▇ ▇▇▇ approved seller/servicer of
Mortgage Loans and issuer of Mortgage-backed Securities guaranteed by
▇▇▇▇▇▇ Mae.
8.1.3 PWF and ▇▇▇▇▇▇ are ▇▇▇▇▇▇ ▇▇▇ approved seller/servicers of
Mortgage Loans, eligible to originate, purchase, hold, sell and service
Mortgage Loans to be sold to ▇▇▇▇▇▇ Mae.
8.1.4 PWF is a ▇▇▇▇▇▇ ▇▇▇ approved and qualified Delegated
Underwriting and Servicing Lender, eligible to process, underwrite,
hold, sell to ▇▇▇▇▇▇ Mae and service ▇▇▇▇▇▇ ▇▇▇ Mortgage Loans under the
DUS Program.
8.1.5 PWF is a ▇▇▇▇▇▇▇ Mac approved seller/servicer of Mortgage
Loans, eligible to originate, purchase, hold, sell and service Mortgage
Loans to be sold to ▇▇▇▇▇▇▇ Mac.
8.2 Special Representations and Warranties Concerning Warehousing
Collateral
Each Borrower represents and warrants to Agent and the Lenders, as of
the date of this Agreement and as of the date of each Warehousing Advance
Request and the making of each Warehousing Advance, that:
8.2.1 No Borrower has selected the Collateral in a manner so as
to affect adversely Lender's interests.
8.2.2 Each Borrower is the legal and equitable owner and holder,
free and clear of all Liens (other than Liens granted under this
Agreement), of the Pledged Loans and the Pledged Securities. All Pledged
Loans, Pledged Securities and related Purchase Commitments have been
duly authorized and validly issued to such Borrower, and all of the
foregoing items of Collateral comply with all of the requirements of
this Agreement, and have been and will continue to be validly pledged or
assigned to Lender, subject to no other Liens.
8.2.3 Each Borrower has, and will continue to have, the full
right, power and authority to pledge the Collateral pledged and to be
pledged by it under this Agreement.
-40-
8.2.4 Each Mortgage Loan and each related document included in
the Pledged Loans (1) has been duly executed and delivered by the
parties to that Mortgage Loan and that related document, (2) has been
made in compliance with all applicable laws, rules and regulations
(including all laws, rules and regulations relating to usury), (3) is
and will continue to be a legal, valid and binding obligation,
enforceable in accordance with its terms, without setoff, counterclaim
or defense in favor of the mortgagor under the Mortgage Loan or any
other obligor on the Mortgage Note and (4) has not been modified,
amended or any requirements of which waived, except in a writing that is
part of the Collateral Documents. No party to any Mortgage Loan or
related document is in violation of any applicable law, rule or
regulation if the violation would impair the collectibility of the
Mortgage Loan or the performance by the mortgagor or any other obligor
of its obligations under the Mortgage Note or any related document.
8.2.5 Each Pledged Loan is secured by a Mortgage on real
property located in one of the states of the United States or the
District of Columbia.
8.2.6 Unless Third Party Originated Loans are permitted, each
Pledged Loan has been closed or will be closed and funded with the
Warehousing Advance made against it.
8.2.7 Each Pledged Loan that is not an FHA Construction Mortgage
Loan has been fully advanced in the face amount of its Mortgage Note.
The Agent acknowledges and agrees that in certain instances, a portion
of the proceeds of a Pledged Loan, although advanced to the borrower
thereunder, will be held by Borrower in escrow to be disbursed upon the
completion of repairs to the subject property.
8.2.8 Each First Mortgage is a first Lien on the premises
described in that Mortgage and each Second Mortgage Loan or a third
Mortgage Loan is secured by a second or third Lien on the premises
described in that Mortgage, and with respect to each Second Mortgage
Loan or third Mortgage Loan, PWF shall be the servicer, and the Purchase
Commitment shall be from the same Investor which holds the senior Lien
on the Property and third Mortgage Loans shall only be ▇▇▇▇▇▇ Mae
mortgage loans. Each Pledged Loan has or will have a title insurance
policy, in ALTA form or equivalent, from a recognized title insurance
company, insuring the priority of the Lien of the Mortgage and meeting
the usual requirements of Investors purchasing those Mortgage Loans.
8.2.9 Each Property has been evaluated or appraised in
accordance with Title XI of FIRREA, to the extent required.
8.2.10 The Mortgage Note for each Pledged Loan is (1) payable or
endorsed to the order of Borrower, (2) an "instrument' within the
meaning of Section 9-102 of the Uniform Commercial Code of all
applicable jurisdictions and (3) is denominated and payable in United
States dollars.
8.2.11 No default has existed for 60 days or more under any
Mortgage Loan included in the Pledged Loans.
-41-
8.2.12 Each Borrower has complied and will continue to comply
with all laws, rules and regulations in respect of the FHA insurance of
each Mortgage Loan included in the Pledged Mortgages designated by any
Borrower as an FHA insured or VA guaranteed Mortgage Loan, and such
insurance or guarantee is and will continue to be in full force and
effect.
8.2.13 All fire and casualty policies covering the premises
encumbered by each Mortgage included in the Pledged Loans (1) name and
will continue to name the appropriate Borrower and its successors and
assigns as the insured under a standard mortgagee clause, (2) are and
will continue to be in full force and effect and (3) afford and will
continue to afford insurance against fire and such other risks as are
usually insured against in the broadest form of extended coverage
insurance available.
8.2.14 Pledged Loans secured by premises located in a special
flood hazard area designated as such by the Director of the Federal
Emergency Management Agency are and will continue to be covered by
special flood insurance under the National Flood Insurance Program.
8.2.15 Each Pledged Loan against which a Warehousing Advance is
made on the basis of a Purchase Commitment meets all of the requirements
of that Purchase Commitment, and each Pledged Security against which a
Warehousing Advance is outstanding meets all of the requirements of the
related Purchase Commitment.
8.2.16 Pledged Loans that are intended to be exchanged for
Agency Securities comply or, prior to the issuance of the Agency
Securities will comply, with the requirements of any governmental
instrumentality, department or agency issuing or guaranteeing the Agency
Securities.
8.2.17 Pledged Loans that are intended to be used in the
formation of Mortgage-backed Securities (other than Agency Securities)
comply with the requirements of the issuer of the Mortgage-backed
Securities (or its sponsor) and of the Rating Agencies.
8.2.18 None of the Pledged Loans is a graduated payment Mortgage
Loan or has a shared appreciation or other contingent interest feature,
and each Pledged Loan provides for periodic payments of all accrued
interest on the Mortgage Loan on at least a monthly basis.
8.2.19 No Borrower has any ownership interest, right to acquire
any ownership interest or equivalent economic interest in any property
securing a Mortgage Loan or the mortgagor under the Mortgage Loan or any
other obligor on the Mortgage Note.
8.2.20 The original assignments of Mortgage and of UCC financing
statements delivered to Lender for each Pledged Loan are in recordable
form and comply with all applicable laws and regulations governing the
filing and recording of such documents.
8.2.21 Each Pledged Loan secured by real property to which a
manufactured home is affixed will create a valid Lien on that
manufactured home that will have priority over any other
-42-
Lien on the manufactured home, whether or not arising under applicable
real property law or the UCC or other applicable law.
8.3 Special Affirmative Covenants Concerning Warehousing Collateral
As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed under this Agreement or under any
other Loan Document, each Borrower must:
8.3.1 Warrant and defend the right, title and interest of the
Agent and the Lenders in and to the Collateral against the claims and
demands of all Persons.
8.3.2 Service or cause to be serviced all Pledged Loans in
accordance with the standard requirements of the issuers of Purchase
Commitments covering them and all applicable HUD, ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇
Mac requirements, including taking all actions necessary to enforce the
obligations of the obligors under such Mortgage Loans. Service or cause
to be serviced all Mortgage Loans backing Pledged Securities in
accordance with applicable governmental requirements and requirements of
issuers of Purchase Commitments covering them.
8.3.3 Execute and deliver to Agent and/or the Lenders such
further instruments of sale, pledge, assignment or transfer, and those
powers of attorney, as required by Agent, and do and perform all matters
and things necessary or desirable to be done or observed, for the
purpose of effectively creating, maintaining and preserving the security
and benefits intended to be afforded Agent (for the ratable benefit of
the Lenders) under this Agreement.
8.3.4 Notify Agent within 2 Business Days of any default under,
or of the termination of, any Purchase Commitment relating to any
Pledged Loan, Eligible Mortgage Pool, or Pledged Security.
8.3.5 Promptly comply in all respects with the terms and
conditions of all Purchase Commitments, and all extensions, renewals and
modifications or substitutions of or to all Purchase Commitments.
Deliver or cause to be delivered to the Investor the Pledged Loans and
Pledged Securities to be sold under each Purchase Commitment not later
than the mandatory delivery date of the Pledged Loans or Pledged
Securities under the Purchase Commitment.
8.3.6 Maintain, at its principal office or in a regional office
approved by Agent, or in the office of a computer service bureau engaged
by Borrower and approved by Agent and, upon request, make available to
Agent the originals, or copies in any case where the originals have been
delivered to Agent or to an Investor, of the Mortgage Notes and
Mortgages included in Pledged Loans, Mortgage-backed Securities
delivered to Agent as Pledged Securities, Purchase Commitments, and all
related Mortgage Loan documents and instruments, and all files, surveys,
certificates, correspondence, appraisals, computer programs, tapes,
discs, cards, accounting records and other information and data relating
to the Collateral.
-43-
8.3.7 Be in good standing with ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇, GNMA,
and FHA with respect to all programs and products in which any Borrower
from time to time participating.
8.4 Special Negative Covenants Concerning Warehousing Collateral
As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed, Borrowers must not, either directly
or indirectly, without the prior written consent of the Agent and the
Requisite Lenders:
8.4.1 Amend or modify, or waive any of the terms and conditions
of, or settle or compromise any claim in respect of, any Pledged Loans
or Pledged Securities.
8.4.2 Sell, transfer or assign, or grant any option with respect
to, or pledge (except under this Agreement) any of the Collateral or any
interest in any of the Collateral.
8.4.3 Make any compromise, adjustment or settlement in respect
of any of the Collateral or accept other than cash in payment or
liquidation of the Collateral.
8.5 Special Representation and Warranty Concerning ▇▇▇▇▇▇ ▇▇▇ DUS
Program Reserve Requirements
PWF represents and warrants to Agent and the Lenders, as of the date of
this Agreement and as of the date of each Warehousing Advance Request and the
making of each Warehousing Advance, that PWF has met the ▇▇▇▇▇▇ Mae DUS Program
requirements for lender reserves for each ▇▇▇▇▇▇ ▇▇▇ DUS Mortgage Loan to be
funded by such Warehousing Advance.
8.6 Special Representations and Warranties Concerning FHA Project
Mortgage Loans
Each Borrower represents and warrants to Agent and the Lenders, as of
the date of this Agreement and as of the date of each Warehousing Advance
Request and the making of each Warehousing Advance, that:
8.6.1 Each FHA-insured Mortgage Loan included in the Pledged
Loans meets all applicable governmental requirements for such insurance.
Each Borrower has complied and will continue to comply with all laws,
rules and regulations with respect to the FHA insurance of each Pledged
Loan designated by such Borrower as an FHA-insured Mortgage Loan, and
such insurance is and will continue to be in full force and effect.
8.6.2 For FHA-insured Pledged Loans that will be used to back
▇▇▇▇▇▇ ▇▇▇ Mortgage-backed Securities, Cambridge received from ▇▇▇▇▇▇
Mae Confirmation Notices for Request Additional Commitment Authority and
for Request Pool Numbers, and there remains available under those
agreements a commitment on the part of ▇▇▇▇▇▇ ▇▇▇ sufficient to permit
the issuance of ▇▇▇▇▇▇ Mae Mortgage-backed Securities in an amount at
least equal to the amount of the Pledged Loans designated by Cambridge
as the Mortgage Loans to be used to back those ▇▇▇▇▇▇ ▇▇▇
Mortgage-backed Securities; each of those Confirmation Notices is in
-44-
full force and effect; each of those Pledged Loans has been assigned by
Cambridge to one of those Pool Numbers and a portion of the available
▇▇▇▇▇▇ Mae Commitment has been allocated to this Agreement by Cambridge,
in an amount at least equal to those Pledged Loans; and each of those
assignments and allocations has been reflected in the books and records
of Cambridge.
8.7 Special Representations and Warranties Concerning Commercial
Mortgage Loans
Each Borrower represents and warrants to Agent and the Lenders, as of
the date of this Agreement and as of the date of each Warehousing Advance
Request and the making of each Warehousing Advance, that:
8.7.1 The principal amount of each Commercial Mortgage Loan does
not exceed $30,000,000.
8.7.2 The Loan-to-Value Ratio of each Commercial Mortgage Loan
does not exceed 80%.
8.7.3 Each Commercial Mortgage Loan is a permanent First
Mortgage Loan.
8.7.4 The projected Property Debt Service Coverage Ratio for the
related Commercial Property for the 12-month period beginning on the
anticipated closing date of each Commercial Mortgage Loan equals or
exceeds 1.30 to 1.00.
8.7.5 Each Commercial Mortgage Loan has a final maturity of not
more than 20 years (from its original date) and provides for monthly
payments of principal and interest sufficient to repay the original
principal amount of each Commercial Mortgage Loan over a period of not
more than 30 years (subject to adjustment in accordance with industry
standards in the case of an adjustable-rate Mortgage Loan).
8.7.6 None of the Commercial Properties securing a Commercial
Mortgage Loan is a marina, golf course, automobile dealership, funeral
home, hotel or motel, self-storage facility or other type of property
developed specifically for the operations of a particular business.
8.7.7 The mortgagor under each Commercial Mortgage Loan is a
Single Purpose Entity, if either: (i) the principal amount of the
Commercial Mortgage Loan exceeds $25,000,000; or (ii) the owners or
sponsors of the mortgagor under the Commercial Mortgage Loan or any
other obligor on the Mortgage Note, or any Person owned or controlled by
any of them, have previously defaulted on Debt or been debtors under the
United States Bankruptcy Code
8.8 Special Representations and Warranties Concerning Servicing
Collateral
Schedule 6.21 is a true and complete list of each Borrower's Servicing
Portfolio as of the date set forth therein. Each Borrower hereby
represents and warrants to Agent and the Lenders, as of the date of this
Agreement and as of the date of each Warehousing Advance Request and the
making of each Warehousing Advance, that:
-45-
8.8.1 Each Borrower is the legal and equitable owners and
holders, free and clear of all Liens of the Servicing Contracts.
8.8.2 Except as otherwise disclosed to Lenders, all of the
servicing rights under the Servicing Contracts constitute primary
servicing rights.
8.8.3 Each Servicing Contract is in full force and effect and is
legal, valid and enforceable in accordance with its terms, and no
default or event that, with notice or lapse of time or both, would
become a default, exists under any Servicing Contract, except where the
failure of the foregoing would not materially adversely affect a
Borrower's business or assets.
8.8.4 Each right to the payment of money under the Servicing
Contracts is genuine and enforceable in accordance with its terms
against the parties obligated to pay the same, which terms have not been
modified or waived in any respect or to any extent, except where the
failure of the foregoing would materially adversely affect a Borrower's
business or assets.
8.8.5 To the best of each Borrower's knowledge, no obligor has
any defense, set off, claim or counterclaim against such Borrower that
can be asserted against Agent or any Lender, whether in any proceeding
to enforce Agent's rights in the related Mortgage Loan or otherwise,
except where the failure of the foregoing would not materially adversely
affect a Borrower's business or assets.
9. EVENTS OF DEFAULT. The following provisions deal with Default, Events of
Default, notice, grace and cure periods, and certain rights of Agent and the
Lenders following an Event of Default.
9.1 Default and Events of Default. The term "Default" as used herein or
in any of the other Loan Documents shall mean an Event of Default, or any fact
or circumstance which constitutes, or upon the lapse of time, or giving of
notice, or both, would constitute, an Event of Default. Each of the following
events, unless cured within any applicable grace period set forth or referred to
below in this Section 9.1, shall constitute an "Event of Default".
9.1.1 Failure to Pay. Any Borrower shall fail to pay any
principal and interest of the Loan or any other Obligation when the same
shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for payment;
9.1.2 Failure to Perform (Grace).The Borrower shall fail
(i) to comply with the covenants set forth in Sections
7.11, 7.24 and 7.25 within ten (10) days from the date of the
Agent's written notice to the Borrower informing Borrower of the
Borrower's failure to have so complied with said covenants; and
(ii) to comply with the covenants set forth in Sections
7.3, 7.6.1(b), 7.7, 7.8, 7.9, 7.13(a), 7.23.1 and 7.23.2, and
7.27 within fifteen (15) days from the date of the
-46-
Agent's written notice to the Borrower informing Borrower of the
Borrower's failure to have so complied with said covenants; and
(iii) to comply with the provisions of clauses (a)
through (f) inclusive of Section 7.14.2 with respect to any lien
not resulting from a voluntary action by any Borrower within
five (5) days from the date of the Agent's written notice to the
Borrower informing Borrower of the Borrower's failure to have so
complied with said covenant;
provided, however, that the foregoing grace periods shall only
apply in respect of the first instance of non-compliance with
each respective covenant in any twelve-month period.
9.1.3 Failure to Perform. Any Borrower shall fail to comply with
any of its covenants contained herein or any of the covenants contained
in any other Loan Documents and which are not referenced in Section
9.1.2 above;
9.1.4 Breach of Representation or Warranty. Any representation
or warranty of any Borrower or any of their Subsidiaries in this
Agreement or any of the other Loan Documents shall have been false in
any material respect upon the date when made or deemed to have been made
or repeated;
9.1.5 Failure to Pay other Indebtedness. Any Borrower or any of
their Subsidiaries shall fail to pay at maturity, or within any
applicable period of grace, any obligation in excess of $50,000 for
borrowed money or credit received or in respect of any capitalized
leases, or fail to observe or perform any term, covenant or agreement
contained in any agreement by which it is bound, evidencing or securing
borrowed money or credit received or in respect of any capitalized
leases in excess of $50,000 provided that the holder or holders thereof
or of any obligations issued thereunder to accelerate the maturity
thereof;
9.1.6 Insolvency. Any Borrower or any of their Subsidiaries
shall make an assignment for the benefit of creditors, or admit in
writing its inability to pay or generally fail to pay its debts as they
mature or become due, or shall petition or apply for the appointment of
a trustee or other custodian, liquidator or receiver of any Borrower or
any of their Subsidiaries or of any substantial part of the assets of
any Borrower or any of their Subsidiaries or shall commence any case or
other proceeding relating to any Borrower or any of their Subsidiaries
under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, or shall take any action to
authorize or in furtherance of any of the foregoing, or if any such
petition or application shall be filed or any such case or other
proceeding shall be commenced against any Borrower or any of their
Subsidiaries and any Borrower or any of their Subsidiaries shall
indicate its approval thereof, consent thereto or acquiescence therein;
9.1.7 Involuntary Proceedings. The filing of any case or other
proceeding against any Borrower or any of the Subsidiaries under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law of any jurisdiction, now
or hereafter in effect and such case or proceeding is not discharged or
dismissed within
-47-
forty-five (45) days of its commencement; a decree or order is entered
appointing any such trustee, custodian, liquidator or receiver or
adjudicating any Borrower or any of their Subsidiaries bankrupt or
insolvent, or approving a petition in any such case or other proceeding,
or a decree or order for relief is entered in respect of any Borrower or
any Subsidiary of any Borrower, in an involuntary case under federal
bankruptcy laws as now or hereafter constituted;
9.1.8 Judgments. There shall remain in force, undischarged,
unsatisfied and unstayed, for more than forty-five (45) days, whether or
not consecutive, any uninsured final judgment against any Borrower or
any of their Subsidiaries that, with other outstanding uninsured final
judgments, undischarged, against any Borrower or any of their
Subsidiaries exceeds in the aggregate $100,000;
9.1.9 Cancellation of Loan Documents. If any of the Loan
Documents shall be canceled, terminated, revoked or rescinded or any
action at law, suit or in equity or other legal proceeding to cancel,
revoke or rescind any of the Loan Documents shall be commenced by or on
behalf of any Borrower or any of their Subsidiaries, or any court or any
other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue a judgment,
order, decree or ruling to the effect that, any one or more of the Loan
Documents is illegal, invalid or unenforceable in accordance with the
terms thereof;
9.1.10 ERISA. With respect to any ERISA Plan, an ERISA
Reportable Event shall have occurred and (i) a trustee shall have been
appointed by the United States District Court to administer such Plan;
or (ii) the PBGC shall have instituted proceedings to terminate such
Guaranteed Pension Plan (which termination proceedings could result in
liability of any Borrower or any of their Subsidiaries to the PBGC in
excess of $250,000;
9.1.11 Indictment. Any Borrower or any of their Subsidiaries
shall be indicted for a federal crime, a punishment for which could
include the forfeiture of any assets of any Borrower or such
Subsidiaries;
9.1.12 Material Adverse Change. There shall have occurred any
change in or to the assets, liabilities, financial condition, business
operations, or prospects of any Borrower and their Subsidiaries, taken
as a whole, which change materially adversely affects the Borrower's
ability to perform its obligations under this Agreement or the other
Loan Documents;
9.1.13 Regarding Guarantor, et. al. The occurrence of any of the
foregoing Events of Default with respect to any Guarantor of the
Obligations, or the occurrence of any of the foregoing Events of Default
with respect to the parent of any Borrower, Subsidiary, or Affiliate, as
if such Guarantor, parent, or Affiliate were the "Borrower" described
therein;
Change in Control. Any change of the ownership of the capital stock of
any Borrower from that existing on the date hereof, except as permitted pursuant
to Section 7.18.4; or
9.1.14 Acquisition Facility. The occurrence of an event of
default under the Acquisition Facility.
-48-
9.1.15 RFC Line; Commerce Line. The occurrence of an event of
default under any of the RFC Line or Commerce Line which results in the
acceleration of the Indebtedness thereunder..
9.2 Written Waivers. If a Default or an Event of Default is waived by
the Requisite Lenders, in their sole discretion, pursuant to a specific written
instrument executed by an authorized officer of Agent, the Default or Event of
Default so waived shall be deemed to have never occurred.
9.3 Remedies.
9.3.1 If an Event of Default described in Section 9.1.6 and
9.1.7 occurs with respect to any Borrower, the Warehousing Commitment
will automatically terminate and the unpaid principal amount of and
accrued interest on the Loan and all other Obligations will
automatically become due and payable, without presentment, demand or
other requirements of any kind, all of which each Borrower expressly
waives.
9.3.2 If any other Event of Default occurs and is continuing,
Agent may, and with the direction of the Requisite Lenders shall, by
Notice to Borrowers, terminate the Warehousing Commitment and declare
the Obligations to be immediately due and payable.
9.3.3 If any Event of Default occurs and is continuing, Agent
may also take any of the following actions:
(i) Foreclose upon or otherwise enforce its security
interest in and Lien on the Collateral to secure all payments
and performance of the Obligations in any manner permitted by
law or provided for in the Loan Documents.
(ii) Notify all obligors under any of the Collateral
that the Collateral has been assigned to Agent (or to another
Person designated by Agent) and that all payments on that
Collateral are to be made directly to Agent (or such other
Person); settle, compromise or release, in whole or in part, any
amounts any obligor or Investor owes on any of the Collateral on
terms acceptable to Agent; enforce payment and prosecute any
action or proceeding involving any of the Collateral; and where
any Collateral is in default, foreclose on and enforce any Liens
securing that Collateral in any manner permitted by law and sell
any property acquired as a result of those enforcement actions.
(iii) Act, or contract with a third party to act at
Borrowers' expense, as servicer or subservicer of Collateral
requiring servicing and perform all obligations required under
any Servicing Contracts and Purchase Commitments.
(iv) Require Borrowers to assemble and make available to
Agent the Collateral and all related books and records at a
place designated by Agent.
-49-
(v) Enter onto property where any Collateral or related
books and records are located and take possession of those items
with or without judicial process; and obtain access to each
Borrower's data processing equipment, computer hardware and
software relating to the Collateral and use all of the foregoing
and the information contained in the foregoing in any manner
Agent deems necessary for the purpose of effectuating its rights
under this Agreement and any other Loan Document.
(vi) Before the disposition of the Collateral, prepare
it for disposition in any manner and to the extent Agent deems
appropriate.
(vii) Exercise all rights and remedies of a secured
creditor under the UCC or other applicable law, including
selling or otherwise disposing of all or any portion of the
Collateral at one or more public or private sales, whether or
not the Collateral is present at the place of sale, for cash or
credit or future delivery, on the terms and in the manner as
Agent may determine, including sale under any applicable
Purchase Commitment. Each Borrower waives any right such
Borrower may have to prior notice of the sale of all or any
portion of the Collateral to the extent allowed by applicable
law. If notice is required under applicable law, Agent will give
Borrowers not less than 10 days' notice of any public sale or of
the date after which any private sale may be held. Each Borrower
agrees that 10 days' notice is reasonable notice. Agent may,
without notice or publication, adjourn any public or private
sale one or more times by announcement at the time and place
fixed for the sale, and the sale may be held at any time or
place announced at the adjournment. In the case of a sale of all
or any portion of the Collateral on credit or for future
delivery, the Collateral sold on those terms may be may be
retained by Agent until the purchaser pays the selling price or
takes possession of the Collateral. Agent has no liability to
Borrowers if a purchaser fails to pay for or take possession of
the Collateral sold on those terms, and in the case of any such
failure, Agent may sell the Collateral again upon notice
complying with this Section.
(viii) Instead of or in conjunction with exercising the
power of sale authorized by Section 9.5.3(vii), Agent may
proceed by suit at law or in equity to collect all amounts due
upon the Collateral, or to foreclose Agent's Lien on and sell
all or any portion of the Collateral pursuant to a judgment or
decree of a court of competent jurisdiction.
(ix) Proceed against any Borrower on the Notes.
(x) Retain all excess proceeds from the sale or other
disposition of the Collateral, and apply them to the payment of
the Obligations under Section 11.2.4.
9.3.4 Agent and Lenders will incur no liability as a result of
the commercially reasonable sale or other disposition of all or any
portion of the Collateral at any public or private sale or other
disposition. Each Borrower waives (to the extent permitted by law) any
claims they may have against Agent arising by reason of the fact that
the price at which the Collateral may have been sold at a private sale
was less than the price that Agent might have obtained at a public sale,
or was less than the aggregate amount of the outstanding Warehousing
Advances, plus
-50-
accrued and unpaid interest on the Advances, and unpaid fees, even if
Agent accepts the first offer received and does not offer the Collateral
to more than one offeree. Each Borrower agrees that any sale of
Collateral under the terms of a Purchase Commitment, or any other
disposition of Collateral arranged by such Borrower, whether before or
after the occurrence of an Event of Default, will be deemed to have been
made in a commercially reasonable manner.
9.3.5 Each Borrower acknowledges that Mortgage Loans are
collateral of a type that is the subject of widely distributed standard
price quotations and that Mortgage-backed Securities are collateral of a
type that is customarily sold on a recognized market. Each Borrower
waives any right they may have to prior notice of the sale of Pledged
Securities, and agrees that Agent may purchase Pledged Loans and Pledged
Securities at a private sale of such Collateral.
9.3.6 Each Borrower specifically waives and releases (to the
extent permitted by law) any equity or right of redemption, stay or
appraisal that such Borrower has or may have under any rule of law or
statute now existing or adopted after the date of this Agreement, and
any right to require Agent to (1) proceed against any Person, (2)
proceed against or exhaust any of the Collateral or pursue its rights
and remedies against the Collateral in any particular order, or (3)
pursue any other remedy within its power. Agent is not required to take
any action to preserve any rights of Borrowers against holders of
mortgages having priority to the Lien of any Mortgage included in the
Collateral or to preserve Borrowers' rights against other prior parties.
9.3.7 Lenders may, but is not obligated to, advance any sums or
do any act or thing necessary to uphold or enforce the Lien and priority
of, or the security intended to be afforded by, any Mortgage included in
the Collateral, including payment of delinquent taxes or assessments and
insurance premiums. All advances, charges, costs and expenses, including
reasonable attorneys' fees and disbursements, incurred or paid by Agent
or Lenders in exercising any right, power or remedy conferred by this
Agreement, or in the enforcement of this Agreement, together with
interest on those amounts at the Default Rate, from the time paid by
Agent or Lenders until repaid by Borrowers, are deemed to be principal
outstanding under this Agreement and the Notes.
9.3.8 No failure or delay on the part of Agent to exercise any
right, power or remedy provided in this Agreement or under any other
Loan Document, at law or in equity, will operate as a waiver of that
right, power or remedy. No single or partial exercise by Agent of any
right, power or remedy provided under this Agreement or any other Loan
Document, at law or in equity, precludes any other or further exercise
of that right, power, or remedy by Agent, or Agent's exercise of any
other right, power or remedy. Without limiting the foregoing, each
Borrower waives all defenses based on the statute of limitations to the
extent permitted by law. The remedies provided in this Agreement and the
other Loan Documents are cumulative and are not exclusive of any
remedies provided at law or in equity.
9.3.9 For the purpose of exercising the rights granted by this
Section 9, as well as any and all other rights and remedies of Agent,
each Borrower hereby irrevocably constitutes and appoints Agent (or any
agent designated by any Lender) its true and lawful attorney-in-fact,
with full power of substitution, exercisable upon and following any
Event of Default, to execute,
-51-
acknowledge and deliver any instruments and to do and perform any acts
in the name and on behalf of Borrowers, including, without limitation,
Agent has been granted a license or other right to use, without charge,
each Borrower's computer programs, other programs, labels, patents,
copyrights, rights of use of any name, trade secrets, trade names,
trademarks, service marks and advertising matter, or any property of a
similar nature, as it pertains to the Collateral, in advertising for
sale and selling any Collateral and each Borrower's rights under all
licenses and all other agreements related to the foregoing inure to
Agent's benefit until the Obligations are paid in full.
10. SECURITY INTEREST AND SET-OFF.
10.1 Security Interest. Each Borrower hereby grants to the Agent and
each of the Lenders, a lien, security interest and right of setoff as security
for all liabilities and obligations to Agent and each of the Lenders, whether
now existing or hereafter arising, upon and against all deposits, credits,
collateral and property of the Borrower, now or hereafter in the possession,
custody, safekeeping or control of Agent or any of the Lenders or any entity
under the control of FleetBoston Financial Corporation and its successors and
assigns or in transit to any of them.
10.2 Set-Off. If an Event of Default occurs and is continuing, any such
deposits, balances or other sums credited by or due from Agent or any of the
Lenders, or from any such Affiliate of Agent or any of the Lenders, to Borrower
may to the fullest extent not prohibited by applicable law at any time or from
time to time, without regard to the existence, sufficiency or adequacy of any
other collateral, and without notice or compliance with any other condition
precedent now or hereafter imposed by statute, rule of law or otherwise, all of
which are hereby waived, be set off, appropriated and applied by Agent or such
Lender of Affiliate against any or all of Borrowers' Obligations irrespective of
whether demand shall have been made and although such obligations may be
unmatured, in such manner as Agent or such Lender or Affiliate in its sole and
absolute discretion may determine. Within five (5) Business Days of making any
such set off, appropriation or application, Agent agrees to notify Borrowers
thereof, provided the failure to give such notice shall not affect the validity
of such set off or appropriation or application. ANY AND ALL RIGHTS TO REQUIRE
AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL
WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO
SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWERS, ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED. Each of the Lenders agrees with each other
Lender that (a) if an amount to be set off is to be applied to indebtedness of
the Borrowers to such Lender, other than the Obligations evidenced by the Note
held by such Lender, such amount shall be applied ratably to such other
indebtedness and to the Obligations evidenced by all the Note held by such
Lender, and (b) if such Lender shall receive from the Borrower, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Note held by such Lender by
proceedings against the Borrowers at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note held by such
Lender any amount in excess of its ratable portion of the payments received by
all of the Lenders with respect to the Note held by all of the Lenders, such
Lender will make such disposition and arrangements with the other Lenders with
respect to such excess, either by way of distribution, participation, pro tanto
assignment of claims, subrogation or otherwise as shall
-52-
result in each Lender receiving in respect of the Note held by it its
proportionate payment as contemplated by this Agreement; provided that if all or
any part of such excess payment is thereafter recovered from such Lender, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.
10.3 Right to Freeze. The Agent and each of the Lenders shall also have
the right, at its option, upon the occurrence of any event which would entitle
the Agent and each of the Lenders to set off or debit as set forth in Section
10.2, to freeze, block or segregate any such deposits, balances and other sums
so that Borrower may not access, control or draw upon the same.
10.4 Additional Rights. The rights of Agent, the Lenders, and each
affiliate of the Agent and the Lenders under this Section 10 are in addition to,
and not in limitation of, other rights and remedies, including other rights of
set off, which Agent or any of the Lenders may have.
11. THE AGENT AND THE LENDERS
11.1 Rights, Duties and Immunities of the Agent.
11.1.1 Appointment of Agent. Each Lender hereby irrevocably
designates and appoints Fleet National Bank as Agent of such Lender to
act as specified herein and in the other Loan Documents, and each such
Lender hereby irrevocably authorizes the Agent to take such actions,
exercise such powers and perform such duties as are expressly delegated
to or conferred upon the Agent by the terms of this Loan Agreement and
the other Loan Documents, together with such other powers as are
reasonably incidental thereto. The Agent agrees to act as such upon the
express conditions contained in this Section 11. The Agent shall not
have any duties or responsibilities except those expressly set forth
herein or in the other Loan Documents, nor shall it have any fiduciary
relationship with any Lender, and no implied covenants,
responsibilities, duties, obligations or liabilities shall be read into
this Loan Agreement or otherwise exist against the Agent. The provisions
of this Section 11 are solely for the benefit of the Agent and the
Lenders, and the Borrowers shall not have any rights as a third party
beneficiary of any of the provisions hereof.
11.1.2 Administration of Loan by Agent. The Agent shall be
responsible for administering the Loan on a day-to-day basis. In the
exercise of such administrative duties, the Agent shall use the same
diligence and standard of care that is customarily used by the Agent
with respect to similar loans held by the Agent solely for its own
account.
Each Lender delegates to the Agent the full right and authority on its
behalf to take the following specific actions in connection with its
administration of the Loan:
(i) to fund each Warehousing Advance in accordance with
the provisions of the Loan Documents, but only to the extent of
immediately available funds provided to the Agent by the
respective Lenders for such purpose;
(ii) to receive all payments of principal, interest,
fees and other charges paid by, or on behalf of, the Borrowers
and, except for fees to which the Agent is entitled pursuant to
the Loan
-53-
Documents or otherwise, to distribute all such funds to the
respective Lenders as provided for hereunder;
(iii) to keep and maintain complete and accurate files
and records of all material matters pertaining to the Loan, and
make such files and records available for inspection and copying
by each Lender and its respective employees and agents during
normal business hours upon reasonable prior notice to the Agent;
and
(iv) to do or omit doing all such other actions as may
be reasonably necessary or incident to the implementation,
administration and servicing of the Loan and the rights and
duties delegated hereinabove.
11.1.3 Delegation of Duties. The Agent may execute any of its
duties under this Loan Agreement or any other Loan Document by or
through its agents or attorneys-in-fact, and shall be entitled to the
advice of counsel concerning all matters pertaining to its rights and
duties hereunder or under the Loan Documents. The Agent shall not be
responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
11.1.4 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be liable for any action lawfully taken or omitted to be taken by
it or them under or in connection with this Loan Agreement or the other
Loan Documents, except for its or their gross negligence or willful
misconduct. Neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be responsible
for or have any duty to ascertain, inquire into, or verify (i) any
recital, statement, representation or warranty made by the Borrowers or
any of their officers or agents contained in this Loan Agreement or the
other Loan Documents or in any certificate or other document delivered
in connection therewith; (ii) the performance or observance of any of
the covenants or agreements contained in, or the conditions of, this
Loan Agreement or the other Loan Documents; (iii) the state or condition
of any properties of the Borrowers or any other obligor hereunder
constituting Collateral for the Obligations of the Borrowers hereunder,
or any information contained in the books or records of the Borrowers;
(iv) the validity, enforceability, collectibility, effectiveness or
genuineness of this Loan Agreement or any other Loan Document or any
other certificate, document or instrument furnished in connection
therewith; or (v) the validity, priority or perfection of any lien
securing or purporting to secure the Obligations or the value or
sufficiency of any of the Collateral.
11.1.5 Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any notice, consent,
certificate, affidavit, or other document or writing believed by it to
be genuine and correct and to have been signed, sent or made by the
proper person or persons, and upon the advice and statements of legal
counsel (including, without, limitation, counsel to the Borrowers),
independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action
under this Loan Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Requisite Lenders as it
deems appropriate or it shall first be indemnified to its satisfaction
by the Lenders against any and all liability and expense which may be
incurred by it by reason of the taking or failing to take any such
action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Loan
-54-
Agreement and the other Loan Documents in accordance with any written
request of the Requisite Lenders, and each such request of the Requisite
Lenders, and any action taken or failure to act by the Agent pursuant
thereto, shall be binding upon all of the Lenders; provided, however,
that the Agent shall not be required in any event to act, or to refrain
from acting, in any manner which is contrary to the Loan Documents or to
applicable law.
11.1.6 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
unless the Agent has actual knowledge of the same or has received notice
from a Lender or the Borrowers referring to this Loan Agreement,
describing such Default or Event of Default and stating that such notice
is a "notice of default". In the event that the Agent obtains such
actual knowledge or receives such a notice, the Agent shall give prompt
notice thereof to each of the Lenders. The Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably
directed by the Requisite Lenders. Unless and until the Agent shall have
received such direction, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to
any such Default or Event of Default as it shall deem advisable in the
best interest of the Lenders, provided, however, that the Agent shall
not accelerate the indebtedness under this Loan Agreement without the
prior written consent of the Requisite Lenders.
11.1.7 Lenders' Credit Decisions. Each Lender acknowledges that
it has, independently and without reliance upon the Agent or any other
Lender, and based on the financial statements prepared by the Borrowers
and such other documents and information as it has deemed appropriate,
made its own credit analysis and investigation into the business,
assets, operations, property, and financial and other condition of the
Borrowers and has made its own decision to enter into this Loan
Agreement and the other Loan Documents. Each Lender also acknowledges
that it will, independently and without reliance upon the 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 determining whether or not conditions precedent to closing any Loan
hereunder have been satisfied and in taking or not taking any action
under this Loan Agreement and the other Loan Documents.
11.1.8 Agent's Reimbursement and Indemnification. The Lenders
agree to reimburse and indemnify the Agent, ratably in proportion to
their respective Commitments, for (i) any amounts not reimbursed by the
Borrowers for which the Agent is entitled to reimbursement by the
Borrowers under this Loan Agreement or the other Loan Documents, (ii)
any other expenses incurred by the Agent on behalf of the Lenders in
connection with the preparation, execution, delivery, administration,
amendment, waiver and/or enforcement of this Loan Agreement and the
other Loan Documents, and (iii) any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may imposed on,
incurred by or asserted against the Agent in any way relating to or
arising out of this Loan Agreement or the other Loan Documents or any
other document delivered in connection therewith or any transaction
contemplated thereby, or the enforcement of any of the terms hereof or
thereof, provided that no Lender shall be liable for any of the
foregoing to the extent that they arise from the gross negligence or
willful misconduct of the Agent. If any indemnity furnished to the Agent
for any purpose shall, in the opinion of the Agent, be insufficient or
become impaired, the Agent may call for additional indemnity and cease,
or not commence, to do the action indemnified against until such
additional indemnity is furnished.
-55-
11.1.9 Agent in its Individual Capacity. With respect to its
Commitment as a Lender, and the Loans made by it and the Note issued to
it, the Agent shall have the same rights and powers hereunder and under
any other Loan Document as any Lender and may exercise the same as
though it were not the Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent and its subsidiaries and affiliates may
accept deposits from, lend money to, and generally engage in any kind of
commercial or investment banking, trust, advisory or other business with
the Borrowers or any subsidiary or affiliate of the Borrowers as if it
were not the Agent hereunder.
11.1.10 Successor Agent. The Agent may resign at any time by
giving thirty (30) days' prior written notice to the Lenders and
Borrowers. The Requisite Lenders, for good cause, may remove Agent at
any time by giving thirty (30) days' prior written notice to the Agent,
the Borrowers and the other Lenders. Upon any such resignation or
removal, the Requisite Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by
the Requisite Lenders and accepted such appointment within thirty (30)
days after the retiring Agent's giving notice of resignation or the
Requisite Lenders' giving notice of removal, as the case may be, then
the retiring Agent may appoint, on behalf of the Borrowers and the
Lenders, a successor Agent. Each such successor Agent shall be a
financial institution which meets the requirements of an Eligible
Assignee. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents.
After any retiring Agent's resignation hereunder, the provisions of this
Section 11 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the
Agent hereunder.
11.1.11 Duties in the Case of Enforcement. In case one or more
Events of Default have occurred and shall be continuing, and whether or
not acceleration of the Obligations shall have occurred, the Agent
shall, at the request, or may, upon the consent, of the Requisite
Lenders, and provided that the Lenders have given to the Agent such
additional indemnities and assurances against expenses and liabilities
as the Agent may reasonably request, proceed to enforce the provisions
of this Loan Agreement and the other Loan Documents respecting the
foreclosure of mortgages, the sale or other disposition of all or any
part of the Collateral and the exercise of any other legal or equitable
rights or remedies as it may have hereunder or under any other Loan
Document or otherwise by virtue of applicable law, or to refrain from so
acting if similarly requested by the Requisite Lenders. The Agent shall
be fully protected in so acting or refraining from acting upon the
instruction of the Requisite Lenders, and such instruction shall be
binding upon all the Lenders. The Requisite Lenders may direct the Agent
in writing as to the method and the extent of any such foreclosure, sale
or other disposition or the exercise of any other right or remedy, the
Lenders hereby agreeing to indemnify and hold the Agent harmless from
all costs and liabilities incurred in respect of all actions taken or
omitted in accordance with such direction, provided that the Agent need
not comply with any such direction to the extent that the Agent
reasonably believes the Agent's compliance with such direction to be
unlawful or commercially unreasonable in any applicable jurisdiction.
The Agent may, in its discretion but without obligation, in the absence
of direction from the Requisite Lenders, take such interim actions as it
believes necessary to preserve the rights of the Lenders hereunder and
in and to any Collateral securing
-56-
the Obligations, including but not limited to petitioning a court for
injunctive relief, appointment of a receiver or preservation of the
proceeds of any Collateral. Each of the Lenders acknowledges and agrees
that no individual Lender may separately enforce or exercise any of the
provisions of any of the Loan Documents, including without limitation
the Notes, other than through the Agent.
11.2 Respecting Loans and Payments.
11.2.1 Procedures for Warehousing Advances. Agent shall give
written notice to each Lender of each request for a Warehousing Advance
by facsimile transmission, hand delivery or overnight courier, not later
than 11:00 a.m. (Boston time) three (3) Business Days prior to any
Warehousing Advance or change of an existing Interest Period for any
existing LIBOR Advance. Each such notice shall be accompanied by a
written summary of the request for a Warehousing Advance and shall
specify (a) the date of the requested Warehousing Advance, (b) the
aggregate amount of the requested Warehousing Advance, (c) each Lender's
pro rata share of the requested Warehousing Advance, and (d) the
applicable Interest Period selected by Borrowers with respect to such
Warehousing Advance, or any portion thereof, selected, or deemed
selected, by Borrowers. Each Lender shall, before 11:00 a.m. (Boston
time) on the date set forth in any such request for a Warehousing
Advance, make available to Agent, at an account to be designated by
Agent at Fleet National Bank in Boston, Massachusetts, in same day
funds, each Lender's ratable portion of the requested Warehousing
Advance. After Agent's receipt of such funds and upon Agent's
determination that the applicable conditions to making the requested
Warehousing Advance have been fulfilled, Agent shall make such funds
available to Borrowers as provided for in this Loan Agreement. Within a
reasonable period of time following the making of each Warehousing
Advance, Agent shall deliver to each Lender a copy of any such
Borrower's request for such Warehousing Advance. Promptly after receipt
by Agent of written request from any Lender, Agent shall deliver to the
requesting Lender the accompanying certifications and such other
instruments, documents, certifications and approvals delivered by or on
behalf of Borrowers to Agent in support of the requested Warehousing
Advance.
11.2.2 Nature of Obligations of Lenders. The obligations of the
Lenders hereunder are several and not joint. Failure of any Lender to
fulfill its obligations hereunder shall not result in any other Lender
becoming obligated to advance more than its Commitment Percentage of the
Loan, nor shall such failure release or diminish the obligations of any
other Lender to fund its Commitment Percentage provided herein.
11.2.3 Payments to Agent. All payments of principal of and
interest on the Loan or the Notes shall be made to the Agent by the
Borrowers or any other obligor or guarantor for the account of the
Lenders in immediately available funds as provided in the Notes and this
Loan Agreement. Except as otherwise expressly provided herein, the Agent
agrees to use its reasonable best efforts to promptly to distribute to
each Lender, on the same Business Day upon which each such payment is
made (if received prior to 2:00 p.m. on such Business Day), such
Lender's proportionate share of each such payment in immediately
available funds excluding Liquidation Proceeds which shall be
distributed in accordance with Section 11.2.4 below. The Agent shall
upon each distribution promptly notify Borrowers of such distribution
and each Lender of the amounts distributed to it applicable to principal
of, and interest on, the proportionate share held by the applicable
Lender. Each payment to the Agent under the first sentence of this
Section shall constitute a payment by the Borrowers to each Lender in
the amount of
-57-
such Lender's proportionate share of such payment, and any such payment
to the Agent shall not be considered outstanding for any purpose after
the date of such payment by the Borrowers to the Agent without regard to
whether or when the Agent makes distribution thereof as provided above.
If any payment received by the Agent from the Borrowers is insufficient
to pay both all accrued interest and all principal then due and owing,
the Agent shall first apply such payment to all outstanding interest
until paid in full and shall then apply the remainder of such payment to
all principal then due and owing, and shall distribute the payment to
each Lender accordingly.
11.2.4 Distribution of Liquidation Proceeds. Subject to the
terms and conditions hereof, the Agent shall distribute all Liquidation
Proceeds in the order and manner set forth below:
First: To the Agent, towards any fees and any expenses for
which the Agent is entitled to reimbursement under this
Agreement or the other Loan Documents not theretofore
paid to the Agent.
Second: To all applicable Lenders in accordance with their
proportional share based upon their respective
Commitment Percentages until all Lenders have been
reimbursed for all expenses which such Lenders have
previously paid to the Agent and not theretofore paid to
such Lenders.
Third: To all Lenders in accordance with their proportional
share based upon their respective Commitment Percentages
until all Lenders have been paid in full all principal
and interest due to such Lenders under the Loan, with
each Lender applying such proceeds for purposes of this
Agreement first against the outstanding principal
balance due to such Lender under the Loan and then to
accrued and unpaid interest due under the Loan.
Fourth: To Fleet National Bank any costs and expenses incurred
directly by Fleet National Bank as a result of any
breach of any Interest Rate Protection Agreements.
Fifth: To all applicable Lenders in accordance with their
proportional share based upon their respective
Commitment Percentages until all Lenders have been paid
in full all other amounts due to such Lenders under the
Loan including, without limitation, any costs and
expenses incurred directly by such Lenders to the extent
such costs and expenses are reimbursable to such Lenders
by the Borrowers under the Loan Documents.
Sixth: To the Borrowers or such third parties as may be
entitled to claim Liquidation Proceeds.
11.2.5 Adjustments. If, after Agent has paid each Lender's
proportionate share of any payment received or applied by Agent in
respect of the Loan, that payment is rescinded or must otherwise be
returned or paid over by Agent, whether pursuant to any bankruptcy or
insolvency law, sharing of payments clause of any loan agreement or
otherwise, such Lender shall, at Agent's request, promptly return its
proportionate share of such payment or application to Agent, together
with
-58-
the Lender's proportionate share of any interest or other amount
required to be paid by Agent with respect to such payment or
application.
11.2.6 Setoff. If any Lender (including the Agent), acting in
its individual capacity, shall exercise any right of setoff against a
deposit balance or other account of the Borrowers held by such Lender on
account of the obligations of the Borrowers under this Loan Agreement,
such Lender shall remit to the Agent all such sums received pursuant to
the exercise of such right of setoff, and the Agent shall apply all such
sums for the benefit of all of the Lenders hereunder in accordance with
the terms of this Loan Agreement.
11.2.7 Distribution by Agent. If in the opinion of the Agent
distribution of any amount received by it in such capacity hereunder or
under the Notes or under any of the other Loan Documents might involve
any liability, it may refrain from making distribution until its right
to make distribution shall have been adjudicated by a court of competent
jurisdiction or has been resolved by the mutual consent of all Lenders.
In addition, the Agent may request full and complete indemnity, in form
and substance satisfactory to it, prior to making any such distribution.
If a court of competent jurisdiction shall adjudge that any amount
received and distributed by the Agent is to be repaid, each person to
whom any such distribution shall have been made shall either repay to
the Agent its proportionate share of the amount so adjudged to be repaid
or shall pay over to the same in such manner and to such persons as
shall be determined by such court.
11.2.8 Delinquent Lender. If for any reason any Lender shall
fail or refuse to abide by its obligations under this Loan Agreement,
including without limitation its obligation to make available to Agent
its pro rata share of any Loans, expenses or setoff (a "Delinquent
Lender") and such failure is not cured within ten (10) days of receipt
from the Agent of written notice thereof, then, in addition to the
rights and remedies that may be available to Agent, other Lenders, the
Borrowers or any other party at law or in equity, and not at limitation
thereof, (i) such Delinquent Lender's right to participate in the
administration of, or decision-making rights related to, the Loans, this
Loan Agreement or the other Loan Documents shall be suspended during the
pendency of such failure or refusal, and (ii) a Delinquent Lender shall
be deemed to have assigned any and all payments due to it from the
Borrowers, whether on account of outstanding Loans, interest, fees or
otherwise, to the remaining non-delinquent Lenders for application to,
and reduction of, their proportionate shares of all outstanding Loans
until, as a result of application of such assigned payments the Lenders'
respective pro rata shares of all outstanding Loans shall have returned
to those in effect immediately prior to such delinquency and without
giving effect to the nonpayment causing such delinquency. The Delinquent
Lender's decision-making and participation rights and rights to payments
as set forth in clauses (i) and (ii) hereinabove shall be restored only
upon the payment by the Delinquent Lender of its pro rata share of any
Loans or expenses as to which it is delinquent, together with interest
thereon at the Default Rate from the date when originally due until the
date upon which any such amounts are actually paid.
The non-delinquent Lenders shall also have the right, but not
the obligation, in their respective, sole and absolute discretion, to
acquire for no cash consideration, (pro rata, based on the respective
Commitments of those Lenders electing to exercise such right) the
Delinquent Lender's Commitment to fund future Loans (the "Future
Commitment"). Upon any such purchase of the pro rata share of any
Delinquent Lender's Future Commitment, the Delinquent Lender's share in
future Loans and its rights
-59-
under the Loan Documents with respect thereto shall terminate on the
date of purchase, and the Delinquent Lender shall promptly execute all
documents reasonably requested to surrender and transfer such interest,
including, if so requested, an Assignment and Acceptance. Each
Delinquent Lender shall indemnify Agent and each non-delinquent Lender
from and against any and all loss, damage or expenses, including but not
limited to reasonable attorneys' fees and funds advanced by Agent or by
any non-delinquent Lender, on account of a Delinquent Lender's failure
to timely fund its pro rata share of a Loan or to otherwise perform its
obligations under the Loan Documents.
11.2.9 Holders. The Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as
the case may be, shall have been filed with the Agent. Any request,
authority or consent of any person or entity who, at the time of making
such request or giving such authority or consent, is the holder of any
Note shall be conclusive and binding on any subsequent holder,
transferee or endorsee, as the case may be, of such Note or of any Note
or Notes issued in exchange therefor.
11.3 Assignment and Participation.
11.3.1 Conditions to Assignment by Lenders. Except as provided
herein, each Lender may assign to one or more Eligible Assignees all or
a portion of its interests, rights and obligations under this Loan
Agreement (including all or a portion of its Commitment Percentage and
Commitment and the same portion of the Loans at the time owing to it and
the Notes held by it), upon satisfaction of the following conditions:
(a) each of the Agent and the Borrowers shall have given its prior
written consent to such assignment (provided that, in the case of the
Borrowers, such consent will not be unreasonably withheld and shall not
be required if a Default or Event of Default shall have occurred and be
continuing); (b) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Lender's rights and obligations
under this Loan Agreement, (c) each assignment shall be in an amount
that is at least $10,000,000.00 and is a whole multiple of $250,000.00,
(d) each Lender which is a Lender at the time of such assignment shall
retain, free of any such assignment, an amount of its Commitment of not
less than $5,000,000.00, (e) the Agent, in its individual capacity as a
Lender, shall retain, free of any such assignment, an amount of its
Commitment of not less than $20,000,000.00, and (f) the parties to such
assignment shall execute and deliver to the Agent, for recording in the
Register (as hereinafter defined), an Assignment and Acceptance,
substantially in the form of Exhibit F hereto (an "Assignment and
Acceptance"), together with any Notes subject to such assignment. Upon
such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the
execution thereof, (x) the assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder, and (y) the assigning
Lender shall, to the extent provided in such assignment and upon payment
to the Agent of the registration fee referred to in Section 13.3.3, be
released from its obligations under this Loan Agreement.
11.3.2 Certain Representations and Warranties. Limitations,
Covenants. By executing and delivering an Assignment and Acceptance, the
parties to the assignment thereunder confirm to and agree with each
other and the other parties hereto as follows:
-60-
(a) other than the representation and warranty that it
is the legal and beneficial owner of the interest being assigned
thereby free and clear of any adverse claim, the assigning
Lender makes no representation or warranty, express or implied,
and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this
Loan Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Loan
Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or the attachment, perfection
or priority of any security interest or mortgage;
(b) the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the
financial condition of the Borrowers and its affiliates, related
entities or subsidiaries or any other person primarily or
secondarily liable in respect of any of the Obligations, or the
performance or observance by the Borrowers or any other person
primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Loan
Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy
of this Loan Agreement, together with copies of the most recent
financial statements provided by the Borrowers as required by
the terms of this Loan Agreement, together with such other
documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such
Assignment and Acceptance;
(d) such assignee will, independently and without
reliance upon the assigning Lender, the 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 Loan
Agreement;
(e) such assignee represents and warrants that it is an
Eligible Assignee;
(f) such assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such
powers under this Loan Agreement and the other Loan Documents as
are delegated to the Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto;
(g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this
Loan Agreement are required to be performed by it as a Lender;
and
(h) such assignee represents and warrants that it is
legally authorized to enter into such Assignment and Acceptance.
11.3.3 Register. The Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register or similar list
(the "Register") for the recordation of the names and addresses of the
Lenders and the Commitment Percentage of, and principal amount of the
Loans owing to the Lenders from time to time. The entries in the
Register shall be conclusive, in the absence of
-61-
manifest error, and the Borrowers, the Agent and the Lenders may treat
each person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Loan Agreement. The Register shall be available
for inspection by the Borrowers and the Lenders at any reasonable time
and from time to time upon reasonable prior notice. Upon each such
recordation, the assigning Lender agrees to pay to the Agent a
registration fee in the sum of ($5,000.00).
11.3.4 New Notes. Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment, together with
each Note subject to such assignment, the Agent shall (a) record the
information contained therein in the Register, and (b) give prompt
notice thereof to the Borrowers and the Lenders (other than the
assigning Lender). Within five (5) Business Days after receipt of such
notice, the Borrowers, at their own expense, shall execute and deliver
to the Agent, in exchange for each surrendered Note, a new Note to the
order of such Eligible Assignee in an amount equal to the amount assumed
by such Eligible Assignee pursuant to such Assignment and Acceptance
and, if the assigning Lender has retained some portion of its
obligations hereunder, a new Note to the order of the assigning Lender
in an amount equal to the amount retained by it hereunder. Such new
Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be
substantially the form of the assigned Notes. Within five (5) days of
issuance of any new Notes pursuant to this Section 11.3.4, the Borrowers
shall deliver an opinion of counsel, addressed to the Lenders and the
Agent, relating to the due authorization, execution and delivery of such
new Notes and the legality, validity and binding effect thereof, in form
and substance satisfactory to the Lenders. The surrendered Notes shall
be cancelled and returned to the Borrowers.
11.3.5 Participations. Each Lender may sell participations to
one or more banks or other financial institutions in all or a portion of
such Lender's rights and obligations under this Loan Agreement and the
other Loan Documents; provided that (a) each such participation shall be
in a minimum amount of $5,000,000.00, (b) each participant shall meet
the requirements of an Eligible Assignee, (c) any such sale or
participation shall not affect the rights and duties of the selling
Lender hereunder to the Borrowers, and (d) the only rights granted to
the participant pursuant to such participation arrangements with respect
to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would
reduce the principal of or the interest rate on any Loans, extend the
term or increase the amount of the Commitment of such Lender as it
relates to such participant, reduce the amount of any commitment fees to
which such participant is entitled or extend any regularly scheduled
payment date for principal or interest.
11.3.6 Disclosure. The Borrowers agrees that in addition to
disclosures made in accordance with standard and customary banking
practices any Lender may disclose information obtained by such Lender
pursuant to this Loan Agreement to assignees or participants and
potential assignees or participants hereunder; provided that such
assignees or participants or potential assignees or participants shall
agree (a) to treat in confidence such information unless such
information otherwise becomes public knowledge, (b) not to disclose such
information to a third party, except as required by law or legal process
and (c) not to make use of such information for purposes of transactions
unrelated to such contemplated assignment or participation.
-62-
11.3.7 Miscellaneous Assignment Provisions. Any assigning Lender
shall retain its rights to be indemnified pursuant to Section 7.25 with
respect to any claims or actions arising prior to the date of such
assignment. If any assignee Lender is not incorporated under the laws of
the United States of America or any state thereof, it shall, prior to
the date on which any interest or fees are payable hereunder or under
any of the other Loan Documents for its account, deliver to the
Borrowers and the Agent certification as to exemption from deduction or
withholding of any United States federal income taxes. Anything
contained in this Section 11.3.7 to the contrary notwithstanding, any
Lender may at any time pledge all or any portion of its interest and
rights under this Loan Agreement (including all or any portion of its
Notes) to any of the twelve Federal Reserve Banks organized under
Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such
pledge or the enforcement thereof shall release the pledgor Lender from
its obligations hereunder or under any of the other Loan Documents.
11.3.8 Assignment by Borrowers. The Borrowers shall not assign
or transfer any of their rights or obligations under any of the Loan
Documents without the prior written consent of each of the Lenders.
11.4 Administrative Matters.
11.4.1 Amendment, Waiver, Consent, Etc. Except as otherwise
provided herein or as to any term or provision hereof which provides for
the consent or approval of the Agent, no term or provision of this Loan
Agreement or any other Loan Document may be changed, waived, discharged
or terminated, nor may any consent required or permitted by this Loan
Agreement or any other Loan Document be given, unless such change,
waiver, discharge, termination or consent receives the written approval
of the Requisite Lenders.
Notwithstanding the foregoing, the unanimous written approval of
all the Lenders (other than a Defaulting Lender) shall be required with
respect to any proposed amendment, waiver, discharge, termination, or
consent which:
(i) has the effect of (a) extending the final scheduled
maturity or the date of any amortization payment of any Loan or
Note, (b) reducing the rate or extending the time of payment of
interest or fees thereon, (c) increasing or reducing the
principal amount thereof, or (d) otherwise postponing or
forgiving any indebtedness thereunder,
(ii) releases or discharges any material portion of the
Collateral other than in accordance with the express provisions
of the Loan Documents,
(iii) amends, modifies or waives any provisions of this
paragraph 11.4.1,
(iv) amends, modifies or waives any provisions of
Section 2.1.3 and the limitations set forth on Exhibit E or the
definition of any term used therein or used in any of the
financial covenants set forth in Section 7.26,
(v) reduces the percentage specified in the definition
of Requisite Lenders,
-63-
(vi) except as otherwise provided in the Loan Agreement,
changes the amount of any Lender's Commitment or Commitment
Percentage, or
(vii) releases or waives any guaranty of the Obligations
or indemnifications provided in the Loan Documents;
and provided, further, that without the consent of the Agent, no such
action shall amend, modify or waive any provision of this Article or any
other provision of any Loan Document which relates to the rights or
obligations of the Agent.
11.4.2 Deemed Consent or Approval. With respect to any requested
amendment, waiver, consent or other action which requires the approval
of the Requisite Lenders or all of the Lenders, as the case may be, in
accordance with the terms of this Loan Agreement, or if the Agent is
required hereunder to seek, or desires to seek, the approval of the
Requisite Lenders or all of the Lenders, as the case may be, prior to
undertaking a particular action or course of conduct, the Agent in each
such case shall provide each Lender with written notice of any such
request for amendment, waiver or consent or any other requested or
proposed action or course of conduct, accompanied by such detailed
background information and explanations as may be reasonably necessary
to determine whether to approve or disapprove such amendment, waiver,
consent or other action or course of conduct. The Agent may (but shall
not be required to) include in any such notice, printed in capital
letters or boldface type, a legend substantially to the following
effect:
"THIS COMMUNICATION REQUIRES IMMEDIATE RESPONSE. FAILURE TO RESPOND
WITHIN TEN (10) CALENDAR DAYS FROM THE RECEIPT OF THIS COMMUNICATION
SHALL CONSTITUTE A DEEMED APPROVAL BY THE ADDRESSEE OF THE ACTION
REQUESTED BY THE BORROWERS OR THE COURSE OF CONDUCT PROPOSED BY THE
AGENT AND RECITED ABOVE,"
and if the foregoing legend is included by the Agent in its
communication, a Lender shall be deemed to have approved or consented to
such action or course of conduct for all purposes hereunder if such
Lender fails to object to such action or course of conduct by written
notice to the Agent within ten (10) calendar days of such Lender's
receipt of such notice.
12. GENERAL PROVISIONS.
12.1 Notices. Any notice or other communication in connection with this
Loan Agreement, the Note, or any of the other Loan Documents (a "Notice"), shall
be in writing, and (i) deposited in the United States Mail, postage prepaid, by
registered or certified mail, or (ii) hand delivered by any commercial
recognized courier service or overnight delivery service such as Federal
Express, or (iii) sent by facsimile transmission if a FAX Number is designated
below, addressed:
-64-
If to Borrowers:
PW Funding Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
FAX Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Cambridge Healthcare Funding Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
FAX Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
▇▇▇▇▇▇ Financial Resources, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
FAX Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with copies by regular mail or such hand delivery or facsimile
transmission to:
Proskauer Rose LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
FAX Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esquire
If to Lender:
Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇
Mail Stop: ▇▇ ▇▇ ▇▇▇▇▇▇
with copies by regular mail or such hand delivery or facsimile
transmission to (which shall not constitute notice):
-65-
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esquire
If to a Lender: To such address for such Lender as appears on Schedule 1.
Any such addressee may change its address for such notices to such other address
in the United States as such addressee shall have specified by written notice
given as set forth above. All periods of notice shall be measured from the
deemed date of delivery.
A notice shall be deemed to have been given, delivered and received for
the purposes of all Loan Documents upon the earliest of: (i) if sent by such
certified or registered mail, on the third Business Day following the date of
postmark, or (ii) if hand delivered at the specified address by such courier or
overnight delivery service, when so delivered or tendered for delivery during
customary business hours on a Business Day, or (iii) if so mailed, on the date
of actual receipt as evidenced by the return receipt, or (iv) if so delivered,
upon actual receipt, or (v) if facsimile transmission is a permitted means of
giving notice, upon receipt as evidenced by confirmation.
12.2 Payments to be Charged as an Advance. Any payments required by this
Agreement, the Notes or any of the other Loan Documents may (but not before the
due date thereof) be deducted by Lender from the amount, if any, not already
advanced, and the same shall be deemed to be a loan, or may be deducted from any
Loan due hereunder. Any attorneys' fees, inspection fee, or any other expense
payable by Borrowers as herein provided for, or incurred in connection with the
examination of the Collateral for the Loan, any tangible or intangible assets of
the Borrowers, the drafting of the Loan Documents and other instruments
evidencing or securing the Obligations and all other Loan Documents may be
likewise deducted from the amounts, if any, not already advanced or from any
Loan payable to Borrowers and, in any event, charged as a Loan hereunder, but
only to the extent payable by the Borrowers pursuant to Section 7.24 hereof.
12.3 Parties Bound; Integration. The provisions of this Agreement and of
each of the other Loan Documents shall be binding upon and inure to the benefit
of Borrowers and the Agent and each of the Lenders and their respective
successors and assigns, except as otherwise prohibited by this Agreement or any
of the other Loan Documents.
This Agreement is a contract by and among Borrowers, Agent and each of
the Lenders for their mutual benefit, and no third person shall have any right,
claim or interest against either Agent, any of the Lenders, or Borrowers by
virtue of any provision hereof.
This Agreement is intended by the Borrowers, the Agent and the Lenders
as the final, complete and exclusive statement of the transactions evidenced by
this Agreement. All prior or contemporaneous promises, agreements and
understandings, whether oral or written, are deemed to be superceded by this
-66-
Agreement, and no party is relying on any promise, agreement or understanding
not set forth in this Agreement.
12.4 Waivers, Extensions and Releases. Except as otherwise provided
herein, Agent may, unless otherwise directed by the Requisite Lenders, at any
time and from time to time waive any one or more of the conditions contained
herein or in any of the other Loan Documents, or extend the time of payment of
the Loan, or release portions of the Collateral from the provisions of this
Agreement and from the Security Documents, but any such waiver, extension or
release shall be deemed to be made in pursuance and not in modification hereof,
and any such waiver in any instance, or under any particular circumstance shall
not be considered a waiver of such condition in any other instance or any other
circumstance.
12.5 Governing Law; Consent to Jurisdiction; Mutual Waiver of Jury
Trial.
12.5.1 Substantial Relationship. It is understood and agreed
that all of the Loan Documents were negotiated, executed and delivered
in the Commonwealth of Massachusetts, which Commonwealth the parties
agree has a substantial relationship to the parties and to the
underlying transactions embodied by the Loan Documents.
12.5.2 Place of Delivery. Borrowers agree to furnish to Agent at
the Agent's office in Boston, Massachusetts all further instruments,
certifications and documents to be furnished hereunder.
12.5.3 Governing Law. This Agreement and each of the other Loan
Documents shall in all respects be governed, construed, applied and
enforced in accordance with the internal laws of the Commonwealth of
Massachusetts without regard to principles of conflicts of law.
12.6 Consent to Jurisdiction. THE BORROWERS AGREE THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT
IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING
THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE
SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWERS BY MAIL AT THE
ADDRESS SPECIFIED IN SECTION 12.1. THE BORROWERS HEREBY WAIVE ANY OBJECTION THAT
THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT
OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
12.7 JURY TRIAL WAIVER. BORROWERS, AGENT AND LENDERS (BY ACCEPTANCE OF
THIS AGREEMENT) MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS
CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS OR ACTIONS OF AGENT OR ANY LENDER RELATING TO THE
-67-
ADMINISTRATION OF THE LOAN OR ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT
NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY
LAW, BORROWERS HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH BORROWER CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF AGENT OR ANY LENDER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT AGENT OR ANY LENDER WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR LENDERS TO ACCEPT THIS AGREEMENT AND MAKE
THE LOAN.
12.8 Survival. All representations, warranties, covenants and agreements
of Borrowers herein or in any other Loan Document, or in any notice,
certificate, or other paper delivered by or on behalf of Borrowers pursuant
hereto are significant and shall be deemed to have been relied upon by Agent and
each of the Lenders notwithstanding any investigation made by Agent or each of
the Lenders or on its behalf and shall survive the delivery of the Loan
Documents and the making of the Loan and each advance pursuant thereto. No
review or approval by Agent or the Lenders, or by any of their consultants or
representatives, of any opinion letters, certificates by professionals or other
item of any nature shall relieve Borrowers or anyone else of any of the
obligations, warranties or representations made by or on behalf of Borrowers
under any one or more of the Loan Documents.
12.9 Cumulative Rights. All of the rights of the Agent and the Lenders
hereunder and under each of the other Loan Documents and any other agreement now
or hereafter executed in connection herewith or therewith, shall be cumulative
and may be exercised singly, together, or in such combination as Lender may
determine in its sole good faith judgment.
12.10 Claims Against Agent or Lenders.
12.10.1 Borrowers Must Notify. The Agent and each of the Lenders
shall not be in default under this Agreement, or under any other Loan
Document, unless a written notice specifically setting forth the claim
of Borrowers shall have been given to Agent and each of the Lenders
within thirty (30) days after Borrowers first had actual knowledge or
actual notice of the occurrence of the event which Borrowers alleges
gave rise to such claim and the Agent or such Lender, as the case may
be, does not remedy or cure the default, if any there be, with
reasonable promptness thereafter. Such actual knowledge or actual notice
shall refer to what was actually known by, or expressed in a written
notification furnished to any Authorized Representative.
12.10.2 Remedies. If it is determined by the final order of a
court of competent jurisdiction, which is not subject to further appeal,
that Agent or any of the Lenders has breached any of its obligations
under the Loan Documents and has not remedied or cured the same with
reasonable promptness following notice thereof, Agent's and each of the
Lender's responsibilities shall be limited to: (i) where the breach
consists of the failure to grant consent or give approval in violation
of the terms and requirements of a Loan Document, the obligation to
grant such consent or give such approval and to
-68-
pay Borrowers' reasonable costs and expenses including, without
limitation, reasonable attorneys' fees and disbursements in connection
with such court proceedings; and (ii) the case of any such failure to
grant such consent or give such approval, or in the case of any other
such default by Agent or any of the Lenders, where it is also so
determined that Agent or any of the Lenders acted in bad faith, the
payment of any actual, direct, compensatory damages sustained by
Borrowers as a result thereof plus Borrowers' reasonable costs and
expenses, including, without limitation, reasonable attorneys' fees and
disbursements in connection with such court proceedings.
12.10.3 Limitations. In no event, however, shall Agent and any
of the Lenders be liable to Borrowers or anyone else for other damages
such as, but not limited to, indirect, speculative or punitive damages
whatever the nature of the breach by Agent or any of the Lenders of its
obligations under this Loan Agreement or under any of the other Loan
Documents. In no event shall Agent or any of the Lenders be liable to
Borrowers or anyone else unless a written notice specifically setting
forth the claim of Borrowers shall have been given to Agent and each of
the Lenders within the time period specified above.
12.11 Obligations Absolute. Except to the extent prohibited by
applicable law which cannot be waived, the Obligations of Borrowers under the
Loan Documents shall be absolute, unconditional and irrevocable and shall be
paid strictly in accordance with the terms of the Loan Documents under all
circumstances whatsoever, including, without limitation, the existence of any
claim, set off, defense or other right which Borrowers may have at any time
against Agent or any of the Lenders whether in connection with the Loan or any
unrelated transaction.
12.12 Counterparts. This Loan Agreement and each other Loan Document may
be executed in several counterparts, each of which when executed and delivered
is an original, but all of which together shall constitute one instrument. In
making proof of this agreement, it shall not be necessary to produce or account
for more than one such counterpart which is executed by the party against whom
enforcement of such loan agreement is sought.
12.13 Time Of the Essence. Time is of the essence of each provision of
this Agreement and each other Loan Document.
12.14 No Oral Change. This Loan Agreement and each of the other Loan
Documents may only be amended, terminated, extended or otherwise modified by a
writing signed by the party against which enforcement is sought (except no such
writing shall be required for any party which, pursuant to a specific provision
of any Loan Document, is required to be bound by changes without such party's
assent). In no event shall any oral agreements, promises, actions, inactions,
knowledge, course of conduct, course of dealings or the like be effective to
amend, terminate, extend or otherwise modify this Loan Agreement or any of the
other Loan Documents.
12.15 Monthly Statements. While Agent may issue invoices or other
statements on a monthly or periodic basis (a "Statement"), it is expressly
acknowledged and agreed that: (i) the failure of Agent to issue any Statement on
one or more occasions shall not affect Borrowers' obligations to make
-69-
payments under the Loan Documents as and when due; (ii) the inaccuracy of any
Statement shall not be binding upon the Agent or the Lenders and so Borrowers
shall always remain obligated to pay the full amount(s) required under the Loan
Documents as and when due notwithstanding any provision to the contrary
contained in any Statement; (iii) all Statements are issued for information
purposes only and shall never constitute any type of offer, acceptance,
modification, or waiver of the Loan Documents or any of the Agent's or Lenders'
rights or remedies thereunder; and (iv) in no event shall any Statement serve as
the basis for, or a component of, any course of dealing, course of conduct, or
trade practice which would modify, alter, or otherwise affect the express
written terms of the Loan Documents.
[remainder of page left intentionally blank; signatures on next page]
-70-
IN WITNESS WHEREOF this Agreement has been duly executed and delivered
as a sealed instrument at Boston, Massachusetts this _____ day of December,
2001.
BORROWERS: PW FUNDING INC.
By:_________________________________
Name:_______________________________
Title:______________________________
CAMBRIDGE HEALTHCARE FUNDING INC.
By:_________________________________
Name:_______________________________
Title:______________________________
▇▇▇▇▇▇ FINANCIAL RESOURCES, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
AGENT: FLEET NATIONAL BANK
By:_________________________________
Name:_______________________________
Title:______________________________
LENDER: FLEET NATIONAL BANK
By:_________________________________
Name:_______________________________
Title:______________________________
S-71
EXHIBITS AND SCHEDULES:
Section
Reference
Number
------
Exhibit A - Definitions 1.1
Exhibit B - Procedures and Documentation for Warehousing
Advances 2.3.2
Exhibit C - Form of Request for Warehousing Advances 2.3.2
Exhibit D - Guaranty of Other Borrowers' Obligations 2.1
Exhibit E - Eligible Loans and Other Assets 2.1.3
Exhibit F - Form of Assignment and Acceptance Agreement 11.3.1
Exhibit G - Form of Lenders' Notes
Exhibit H - Form of Compliance Certificate
Schedule 1 - Lenders and Commitments
Schedule 4 - Authorized Representatives 4
Schedule 6.7.2 - Ownership, Subsidiaries and Taxpayer
Identification Numbers
Schedule 6.14 - Transactions with Affiliates
Schedule 6.20 - Servicing Portfolio
Schedule 6.22 - Assumed Names
Schedule 7.7 - Insurance
Schedule 7.12 - Existing Loan Arrangements
Schedule 7.14.1 - Permitted Existing Indebtedness
Schedule 7.14.2 - Permitted Existing Liens
S-72
EXHIBIT A TO LOAN AGREEMENT
---------------------------
DEFINITIONS
-----------
Accounts has the meaning given that term in the UCC.
Acquisition Facility means that certain revolving acquisition facility of even
date herewith by and among Charter Mac Corporation, the Agent, Fleet National
Bank as a lender, and such other Persons which may become party thereto, as the
same may be modified, amended or restated from time to time.
Adjusted EBITDA means, with respect to any fiscal period of Borrowers, on
consolidated basis (among themselves), (i) the Net Income, plus (ii) the amount
of income tax expense deducted in calculating net income for that period, minus
(iii) the amount of income taxes actually paid during that period, plus (iv)
depreciation, amortization and other non-cash items deducted in calculating Net
Income for that period, minus (v) non-cash revenue included in calculating net
income for that period, plus (vi) the amount of interest expense payable with
respect Indebtedness (including, without limitation, the Loan) and deducted in
calculating net income for that period. All intercompany (among the Borrowers
and Charter Mac Corporation) transactions and allocations shall be eliminated in
computing Borrowers' EBITDA for any period.
Adjusted LIBO Rate means for each Interest Period the rate per annum obtained by
dividing (i) LIBO for such Interest Period, by (ii) a percentage equal to one
hundred percent (100%) minus the maximum reserve percentage applicable during
such Interest Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System for determining the maximum reserve
requirements (including, without limitation, any basic, supplemental, marginal
and emergency reserve requirements) for Agent (or of any subsequent holder of a
Note hereunder which is subject to such reserve requirements) in respect of
liabilities or assets consisting of or including Eurocurrency liabilities (as
such term is defined in Regulation D of the Board of Governors of the Federal
Reserve System) having a term equal to the Interest Period.
Adjusted Tangible Net Worth means Tangible Net Worth, less any assets (to the
extent not otherwise excluded) as would be excluded by HUD, ▇▇▇▇▇▇ Mae, or
▇▇▇▇▇▇▇ Mac in calculating adjusted net worth in accordance with their
respective requirements, and valuing Servicing Rights at the lower of GAAP book
value or Appraised Value at such time.
Advance Rate means, as to any type of Eligible Loan, the advance rate therefor
specified in Exhibit E.
Affiliate means, for any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with, that Person. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling," "controlled by," and "under common control with"), as
applied to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of that
Person, whether through the ownership of, voting securities, by contract. or
otherwise.
A-73
Agency Security means a Mortgage-backed Security issued or guaranteed by ▇▇▇▇▇▇
Mae, ▇▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇ ▇▇▇.
Agent means Fleet National Bank, acting as agent for the Lenders.
Agreement means this Mortgage Warehousing Credit and Security Agreement, as it
hereafter may be amended, modified, supplemented, or restated from time to time.
Agreement Date means the date as of which this Agreement is dated.
Appraised Value means, as to any Servicing Rights, as of any date of
determination, the market value of such Servicing Rights as shown on the most
recent appraisal required to be delivered pursuant to Section 7.23.2 hereof (or
any interim or updated appraisal prepared by an Approved Servicing Rights
Appraiser) and applied to the then outstanding principal balance of the subject
Serviced Loans.
Approved Servicing Rights Appraiser means The Prestwick Mortgage Group or
another independent third party proposed by the Borrower and approved by the
Agent, in its discretion.
Appraised Property Value means with respect to an interest in real property, the
then current fair market value of the real property and any improvements on it
as of recent date determined in accordance with Title XI of FIRREA by a
qualified appraiser who is a member of the American Institute of Real Estate
Appraisers or other group of professional appraisers.
Approved Custodian means a pool custodian or other Person that Agent deems
acceptable, in its sole discretion, to hold Mortgage Loans for inclusion in a
Mortgage Pool or to hold Mortgage Loans as agent for an Investor that has issued
a Purchase Commitment for those Mortgage Loans.
Assigned Collateral Documents means the assignment of the Collateral Documents
to the Agent for the ratable benefit of the Lenders which are required to be
delivered to the Agent pursuant to the terms hereof in connection with each
Warehousing Advance.
Authorized Representatives as defined in Section 4 and listed on Schedule 4.
Business Day means any day of the year on which offices of Fleet National Bank
are not required or authorized by law to be closed for business in Boston,
Massachusetts. If any day on which a payment is due is not a Business Day, then
the payment shall be due on the next day following which is a Business Day.
Further, if there is no corresponding day for a payment in the given calendar
month (i.e., there is no "February 30th"), the payment shall be due on the last
Business Day of the calendar month.
Cash Collateral Account means a demand deposit account maintained at the Agent,
in the Agent's name (as Agent for the Lenders) and designated for receipt of the
proceeds of the sale or other disposition of Collateral.
A-74
Cash Equivalents mean (i) securities issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof) having maturities of not more than twelve months
from the date of acquisition ("Government Obligations"), (ii) U.S. dollar
denominated (or foreign currency fully hedged) time deposits, certificates of
deposit, Eurodollar time deposits and Eurodollar certificates of deposit of (y)
any domestic commercial bank of recognized standing having capital and surplus
in excess of $250,000,000 or (z) any bank whose short-term commercial paper
rating from S&P is at least A-1 or the equivalent thereof or from ▇▇▇▇▇'▇ is at
least P-1 or the equivalent thereof (any such bank being an "Approved Bank"), in
each case with maturities of not more than 364 days from the date of
acquisition, (iii) commercial paper and variable or fixed rate notes rated A-1
(or the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof)
or better by Moody's and maturing within twelve months of the date of
acquisition, (iv) repurchase agreements with a bank or trust company (including
a Lender) or a recognized securities dealer having capital and surplus in excess
of $500,000,000 for direct obligations issued by or fully guaranteed by the
United States of America, (v) obligations of any state of the United States or
any political subdivision thereof for the payment of the principal and
redemption price of and interest on which there shall have been irrevocably
deposited Government Obligations maturing as to principal and interest at times
and in amounts sufficient to provide such payment, (vi) auction preferred stock
rated in the highest short-term credit rating category by S&P or Moody's and
(vii) U.S. dollar denominated time and demand deposit accounts or money market
accounts with those domestic banks meeting the requirements of item (y) or (z)
of clause (ii) above and any other domestic commercial banks insured by the FDIC
with an aggregate balance not to exceed $100,000 in the aggregate at any time at
any such bank.
Closing Date means the Agreement Date.
Collateral as defined in Section 3.1.
Collateral Documents means, with respect to each Mortgage Loan, (a) the Mortgage
Note, the Mortgage and all other documents executed in connection with or
relating to the Mortgage Loan, (b) as applicable, the original lender's ALTA
Policy of Title Insurance or its equivalent, documents evidencing the FHA
Commitment to Insure, if applicable, the appraisal, the environmental
assessment, the engineering report, certificates of casualty or hazard
insurance, credit information on the maker of the Mortgage Note, (e) any other
document listed in Exhibit B, and (d) any other document that is customarily
desired for inspection or transfer incidental to the purchase of any Mortgage
Note by an Investor or that is customarily executed by the seller of a Mortgage
Note to an Investor.
Commerce Line means ▇▇▇▇▇▇'▇ Indebtedness in favor of Commerce Bank under that
certain Loan and Security Agreement dated June 6, 2000, as amended October 5,
2000.
Commercial Mortgage Loan has the meaning set forth in Exhibit E.
Commercial Property means an improved, income-producing commercial real property
that is not a Multifamily Property or Health Care Facility.
A-75
Commitment shall mean, with respect to each Lender, the amount set forth on
Schedule 1 hereto as the amount of such Lender's commitment to make advances to
the Borrower, as may be amended from time to time by the Agent as provided in
Section 10.
Committed Purchase Price means for an Eligible Loan (a) the dollar price as set
forth in the Purchase Commitment or, if the price is not expressed in dollars,
the product of the Mortgage Note Amount multiplied by the price (expressed as a
percentage) as set forth in a Purchase Commitment for the Eligible Loan, or (b)
if the Eligible Loan is to be used to back an Agency Security, product of the
Mortgage Note Amount multiplied by the price (expressed as a percentage) as set
forth in a Purchase Commitment for the Agency Security.
Commitment Percentage means, with respect to each Lender, the percentage set
forth on Schedule 1 hereto as such Lender's percentage of the aggregate
Commitments of all of the Lenders, as may be amended from time to time by the
Agent as provided in Section 11.
Constituent Documents means, with respect to any Person, its articles or
certificate of incorporation, constitution, bylaws, partnership agreements,
organizational documents, limited liability company agreements, or such other
document as may govern such entity's formation or organization.
Contractual Obligation means, for any Person, any provision of any security
issued by that Person or of any material indenture, mortgage, deed of trust,
contract, undertaking, agreement, or other instrument to which such Person is a
party or by which it or any of its properties is bound or to which it or any of
its properties is subject.
Debt Service means for any fiscal period of the Borrowers, the sum of (i) the
expenses of the Borrowers for such period for interest payable with respect to
all Indebtedness (including, without limitation, under the Facility) and all
fees paid on account of or with respect thereto, plus (ii) principal payments
made or required to be made on account of Indebtedness for such period, in each
case determined in accordance with GAAP.
Debt Service Coverage Ratio means, for any fiscal period, the ratio of (i)
Adjusted EBITDA for such period, to (ii) the aggregate Debt Service for such
period.
Default as defined in Section 9.1.
Delinquent Lender as defined in Section 11.2.8.
Designated Loans as defined in Section 3.3.1.
Dollars (and the symbol "$") shall mean lawful money of the United States.
Eligible Assignee shall mean (a) a Lender, (b) an Affiliate of any Lender, and
(c) any other Person approved by the Agent.
A-76
Eligible Loan means a Mortgage Loan that satisfies the conditions and
requirements of Exhibit E and other applicable provisions of this Agreement for
supporting a Warehousing Advance.
Eligible Mortgage Pool means a Mortgage Pool for which (a) an Approved Custodian
has issued its initial certification, (b) there exists a Purchase Commitment
covering the Agency Security to be issued on the basis of that certification and
(c) the Agency Security will be delivered to Lender.
ERISA and ERISA Plan each as defined in Section 6.9.
Event of Default as defined in Section 9.1.
Facility as defined in Section 1.2.
Facility Fee as defined in Section 2.5.3.
Fair Market Value means, at any time for an Eligible Loan or a related Agency
Security (if the Eligible Loan is to be used to back an Agency Security) as of
any date of determination, (a) the Committed Purchase Price if the Eligible Loan
is covered by a Purchase Commitment from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac or the
Eligible Loan is to be exchanged for an Agency Security and that Agency Security
is covered by a Purchase Commitment from an Investor, or (b) otherwise, the
market price for such Eligible Loan or Agency Security, determined by Agent
based on market data for similar Mortgage Loans or Agency Securities and such
other criteria as Agent deems appropriate in its sole discretion.
▇▇▇▇▇▇ Mae means the Federal National Mortgage Association, and any successor.
▇▇▇▇▇▇ ▇▇▇ Agreements as defined in Section 3.3.1.
▇▇▇▇▇▇ Mae Reserve Account means that certain lender reserve account established
in favor of ▇▇▇▇▇▇ ▇▇▇ by PWF and maintained at State Street Bank and Trust
Company pursuant to that certain Delegated Underwriting and Servicing Reserve
Agreement effective as of May 29, 1996 by and among ▇▇▇▇▇▇ Mae, PWF and State
Street Bank and Trust Company, as amended and in effect.
▇▇▇▇▇▇ ▇▇▇ Servicing Contracts as defined in Section 3.3.1
▇▇▇▇▇▇ Mae Loan Loss Reserves means reserves established by the Borrowers to
absorb estimated future losses related to ▇▇▇▇▇▇ ▇▇▇ DUS Mortgage Loans.
▇▇▇▇▇▇ Mae DUS Mortgage Loans means a permanent mortgage on a multifamily
property originated under ▇▇▇▇▇▇ Mae's Delegated Underwriting and Servicing
Guide.
Federal Funds Rate means for any day, a fluctuating interest rate per annum
equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York, or
if such rate is not so published for any day that is a Business Day, the average
of the quotations for such day on such
A-77
transactions received by the Agent from three federal funds brokers of
recognized standing selected by the Agent.
Fee Letter means that certain fee letter dated on or about the date hereof by
and between the Borrowers and the Agent, as the same may be modified or amended
from time to time.
FHA means the Federal Housing Administration and any successor agency or other
entity.
FHA Construction Mortgage Loan has the meaning set forth in Exhibit E.
FHA Project Mortgage Loan has the meaning set forth in Exhibit E.
First Mortgage means a Mortgage that constitutes a first Lien on the real
property covered by the Mortgage.
First Mortgage Loan means a Mortgage Loan secured by a First Mortgage.
Forward Commitments means mortgage loans which ▇▇▇▇▇▇ Mae has committed to
purchase in accordance with the requirements of ▇▇▇▇▇▇ Mae's product, subject to
satisfaction of specified underwriting conditions.
▇▇▇▇▇▇▇ Mac means the Federal Home Loan Mortgage Corporation, and any successor.
Guarantor(s) means, singly and collectively, each of Charter Municipal Mortgage
Acceptance Company, a Delaware business trust, and Charter MAC Corporation, of
which PWF is a Subsidiary.
Guaranty(ies) mean each Guarantor's Guaranty of even date herewith, as the same
may hereafter be modified or amended.
General Intangibles has the meaning given that term in the UCC.
Generally Accepted Accounting Principles or GAAP means principles that are
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to time.
Gestation Agreement means an agreement under which Borrower agrees to sell or
finance (a) a Mortgage Loan prior to the date of purchase by an Investor or (b)
a Mortgage Pool prior to the date a Mortgage-backed Security backed by the
Mortgage Pool is issued.
▇▇▇▇▇▇ ▇▇▇ means the Government National Mortgage Association, an agency of the
United States government, and any successor agency or other entity.
A-78
Governmental Authority means any nation or government, any state or other
political subdivision thereof, and any Person exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government.
Governmental Authorization means any permit, license, authorization, plan,
directive, consent order, or consent decree of or from any Governmental
Authority.
Health Care Facility means a retirement service center, a board and care
facility, an intermediate care facility, a nursing home or a hospital.
Hedging Arrangement means an arrangement designed to protect a Person from
fluctuations interest rates or asset values.
HUD means the Department of Housing and Urban Development, and any successor
agency or other entity.
Indebtedness means all obligations, contingent and otherwise, that in accordance
with Generally Accepted Accounting Principles should be classified upon the
consolidated balance sheet of a Borrower and the Borrower's Subsidiaries as
liabilities, or to which reference should be made by footnotes thereto,
including in any event and whether or not so classified: (a) all obligations for
borrowed money or other extensions of credit whether or not secured or
unsecured, absolute or contingent, including, without limitation, unmatured
reimbursement obligations with respect to letters of credit or guarantees issued
for the account of or on behalf of the Borrower and their Subsidiaries and all
obligations representing the deferred purchase price of property, (b) all
obligations evidenced by bonds, notes, debentures or other similar instruments;
(c) all liabilities secured by any mortgage, pledge, security interest, lien,
charge, or other encumbrance existing on property owned or acquired subject
thereto, whether or not the liability secured thereby shall have been assumed;
and (d) all guarantees, endorsements and other contingent obligations whether
direct or indirect in respect of indebtedness of others or otherwise, including
any obligations with respect to puts, swaps, and other similar undertakings, any
obligation to supply funds to or in any manner to invest in, directly or
indirectly, the debtor, to purchase indebtedness, or to assure the owner of
indebtedness against loss, through an agreement to purchase goods, supplies, or
services for the purpose of enabling the debtor to make payment of the
indebtedness held by such owner or otherwise, and the obligations to reimburse
the issuer in respect of any letters of credit; and (e) that portion of all
obligations arising under capital leases that is required to be capitalized on
the consolidated balance sheet of the Borrowers and their Subsidiaries; but
excluding, in all events obligations arising under operating leases and accounts
payable arising in the ordinary course of business.
Indemnified Party as defined in Section 7.25.
Intangible Assets means, at the time of determination, those assets of any
Borrower on a consolidated basis (among themselves) that in accordance with GAAP
are properly classifiable as intangible assets, including, but not limited to,
goodwill, franchises, licenses, patents, trademarks, trade names and copyrights.
Interest Period
A-79
(A) The term "Interest Period" means with respect to each LIBOR Advance:
a period of one (1) week, one (1), two (2) or three (3) consecutive months, or
such other time period expressed in a number of days which is greater than
thirty (30) but less than sixty (60) (any such period being referred to as an
"Odd Period Interest Period"), subject to availability, as selected, or deemed
selected, by the Borrower at least two (2) Business Days prior to the Loan, or,
if an advance is already outstanding, at least two (2) Business Days prior to
the end of the then current Interest Period. Each such Interest Period shall
commence on the Business Day so selected, or deemed selected, by the Borrower
and shall end on the numerically corresponding day in the first, third or sixth
month thereafter, as applicable. Provided, however: (i) if there is no such
numerically corresponding day, such Interest Period shall end on the last
Business Day of the applicable month, (ii) if the last day of such an Interest
Period would otherwise occur on a day which is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day or if such
extension would otherwise cause such last day to occur in a new calendar month,
then such last day shall occur on the next preceding Business Day, and (iii) if
any Interest Period would otherwise end after the Maturity Date, such Interest
Period shall end on the Maturity Date.
(B) The term "Interest Period" shall mean with respect to each Variable
Rate Advance consecutive periods of one (1) day each.
(C) No Interest Period may be selected which would end beyond the then
Maturity Date of the Loan (as actually extended) . If the last day of an
Interest Period would otherwise occur on a day which is not a Business Day, such
last day shall be extended to the next succeeding Business Day, except as
provided above in clause (A) relative to a LIBOR Advance.
Investment shall mean the acquisition of any real or tangible personal property
or of any stock or other security, any loan, advance, bank deposit, money market
fund, contribution to capital, extension of credit (except for accounts
receivable arising in the ordinary course of business and payable in accordance
with customary terms) , or purchase or commitment or option to purchase or
otherwise acquire real estate or tangible personal property or stock or other
securities of any party or any part of the business or assets comprising such
business, or any part thereof.
Investor means ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or a financially responsible private
institution that Lender deems acceptable, in its sole discretion, to issue
Purchase Commitments with respect to a particular category of Eligible Loans.
Late Charges as defined in Section 2.4.14.
Legal Requirements shall mean all applicable federal, state, county and local
laws, by-laws, rules, regulations, codes and ordinances, and the requirements of
any governmental agency or authority having or claiming jurisdiction with
respect thereto, including, but not limited to, those applicable to zoning,
subdivision, building, health, fire, safety, sanitation, the protection of the
handicapped, and environmental matters and shall also include all orders and
directives of any court, governmental agency or authority having or claiming
jurisdiction with respect thereto.
A-80
Lenders means, on any date of determination, the financial institutions named on
Schedule ___, and, subject to the terms and conditions of this Agreement, their
respective successors and assigns.
LIBO Rate means, as applicable to any LIBOR Advance, the rate per annum as
determined on the basis of the offered rates for deposits in U.S. dollars, for a
period of time comparable to the Interest Period applicable to such LIBOR
Advance which appears on the Telerate page 3750 as of 11:00 a.m. London time on
the day that is two London Banking Days preceding the first day of such LIBOR
Advance; provided, however, if the rate described above does not appear on the
Telerate System on any applicable interest determination date, LIBO shall be the
rate (rounded upwards, if necessary, to the nearest one hundred-thousandth of a
percentage point) , determined on the basis of the offered rates for deposits in
Dollars for a period of time comparable to the Interest Period applicable to
such LIBOR Advance which are offered by four major banks in the London interbank
market at approximately 11:00 a.m. London time, on the day that is two (2)
London Banking Days preceding the first day of such LIBOR Advance as selected by
the Agent. The principal London office of each of the four major London banks
will be requested to provide a quotation of its Dollar deposit offered rate. If
at least two (2) such quotations are provided, the rate for that date will be
the arithmetic mean of the quotations. If fewer than two (2) quotations are
provided as requested, the rate for that date will be determined on the basis of
the rates quoted for loans in Dollars to leading European banks for a period of
time comparable to the Interest Period applicable to such LIBOR Advance offered
by major banks in New York City at approximately 11:00 a.m. New York City time,
on the day that is two (2) London Banking Days preceding the first of such LIBOR
Advance. With respect to an Odd Period Interest Period, LIBO shall be determined
by the Agent, in good faith, using the above methodology as nearly as may be
practicable in light of the actual number of days in such Odd Period Interest
Period. In the event that Lenders are unable to obtain any such quotation as
provided above, it will be deemed that LIBO pursuant to a LIBOR Advance cannot
be determined.
LIBOR Advance means any Warehousing Advance outstanding under this Agreement
which pursuant to this Agreement bears interest at the LIBOR Rate.
LIBOR Rate means the per annum rate equal to the Adjusted LIBO Rate plus 125
basis points.
Lien means any lien, mortgage, deed of trust, pledge, security interest, charge
or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature of such an agreement and any
agreement to give any security interest).
Liquidation Proceeds means amounts received by the Agent and/or the Lenders in
the exercise of the rights and remedies under the Loan Documents.
Loan as defined in Section 2.1.1.
Loan Agreement as defined in the Preamble.
Loan Documents as defined in Section 3.8.
A-81
Loan-to-Value Ratio means, for any Mortgage Loan, the ratio of (a) the maximum
amount that may be borrowed under the Mortgage Loan (whether or not borrowed) at
the time of origination, plus the Mortgage Note Amounts of all other Mortgage
Loans secured by the related Property, to (b) the Appraised Property Value of
the related Property.
London Banking Day The term "London Banking Day" means any day on which dealings
in deposits in Dollars are transacted in the London interbank market.
Longwood Loan means the construction mortgage loan relating to the Longwood
Apartments, Cleveland, Ohio.
Maturity Date means the earlier of December 23, 2002, or the date upon which the
whole of the Commitments are terminated or the Loan is accelerated in accordance
with applicable provisions of this Agreement.
Mortgage means a mortgage or deed of trust on real property that is improved and
substantially completed.
Mortgage-backed Securities means securities that are secured or otherwise backed
by Mortgage Loans .
Mortgage Loan means any loan evidenced by a Mortgage Note and secured by a
Mortgage.
Mortgage Note means a promissory note secured by one or more Mortgages.
Mortgage Note Amount means, as of any date of determination, the then
outstanding and unpaid principal amount of a Mortgage Note (whether or not an
additional amount is available to be drawn under that Mortgage Note).
Mortgage Pool means a pool of one or more Pledged Loans on the basis of which a
Mortgage-backed Security is to be issued.
Multifamily Property means real property that contains or that will contain more
than 4 dwelling units.
Net Income means with respect to any fiscal period, the net income (or deficit)
of the Borrowers on consolidated basis (among themselves) after deduction of all
expenses, taxes, and other proper charges, determined in accordance with GAAP
Non-Agency Mortgage Loan has the meaning set forth in Exhibit E.
Notes means the promissory notes of the Borrowers, substantially in the form of
Exhibit G hereto, evidencing the obligation of the Borrowers to repay the Loan,
and all renewals and extensions of all or any part thereof.
Notice as defined in Section 12.1.
A-82
Obligations The Facility and the Loan together with interest thereon and all
other charges and amounts payable by, and all other obligations of, Borrowers to
the Agent and the Lenders, including, without limitation, whenever incurred,
direct or indirect, absolute or contingent.
Operating Account means, with respect to each Borrower, a demand deposit account
maintained at the Agent in such Borrower's name and designated for funding that
portion of each Eligible Loan not funded by a Warehousing Advance made against
that Eligible Loan and for returning any excess payment from an Investor for a
Pledged Loan or Pledged Security.
Other Mortgage Loans means loan originated or serviced by PWF for insurance
companies, savings banks and other financial institutions but excluding ▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇ Mac, and FHA loans.
Permitted Intercompany Subordinated Debt means indebtedness owed by PWF and/or
one or both of the PWF Subsidiaries to an Affiliate (other than one another),
which indebtedness has a maturity date which is later than the Maturity Date,
and which is subordinate to the Obligations pursuant to a subordination
agreement reasonably satisfactory to the Agent.
PBGC means the Pension Benefit Guaranty Corporation created by Section 4002 of
ERISA and any successor entity or entities having similar responsibilities.
Permitted Distributions as defined in Section 7.15.2.
Permitted Transfers means transfers of the common stock of PWF required or
permitted to be made by any party under the Stock Purchase Agreement or the
Pledge and Security Agreements (each as defined in the Acquisition Agreement).
Person means any individual, corporation, partnership, trust, limited liability
company, unincorporated association, business, or other legal entity, and any
government or any governmental agency or political subdivision thereof.
Pledged Assets means, collectively, Pledged Loans, and Pledged Securities.
Pledged Hedging Account as defined in Section 3.1.9.
Pledged Hedging Agreement as defined in Section 3.1.9.
Pledged Loans has the meaning set forth in Section 3.1.2.
Pledged Securities has the meaning set forth in Section 3.1.3.
Present Value The term "Present Value" means the value at the applicable
maturity discounted to the date of prepayment using the Treasury Rate.
A-83
Prime Rate The term "Prime Rate" means the per annum rate of interest so
designated from time to time by Fleet National Bank as its prime rate. The Prime
Rate is a reference rate and does not necessarily represent the lowest or best
rate being charged to any customer.
Property means a Multifamily Property or Health Care Facility securing a
Mortgage Loan. Property Debt Service Coverage Ratio means, for any Commercial
Property that secures a Commercial Mortgage Loan pledged or to be pledged under
this Agreement, the ratio of (a) the projected net operating income of the
Commercial Property to (b) projected interest expense and scheduled payments in
respect of the Commercial Mortgage Loan for the 12 months after the date of
determination.
Purchase Commitment means a written commitment, in form and substance
satisfactory to Agent, issued in favor of any Borrower by an Investor under
which that Investor commits to purchase Mortgage Loans or Mortgage-backed
Securities .
Receivables as defined in Section 3.1.8.
Register as defined in Section 11.3.3.
Release Amount as defined in Section 3.4.6.
Reportable Event as defined in Section 6.9.
Requisite Lenders as of any date, (i) if there are two (2) or fewer Lenders
holding Commitments, Requite Lenders shall mean all such Lenders, or (ii) if
there are three (3) or more Lenders holding Commitments, Requisite Lenders shall
mean the Lenders holding at least sixty-five percent (65%) of the outstanding
principal amount of the Loans on such date; and if no such principal is
outstanding, the Lenders whose aggregate Commitments constitute at least
sixty-five percent (65%) of the Total Commitment.
RFC Line means Borrowers' existing Revolving Warehouse Line with Residential
Funding Corporation dated October 1, 2001.
Security Documents as defined in Section 3.8.
Second Mortgage means a Mortgage that constitutes a second Lien on the property
covered by the Mortgage.
Second Mortgage Loan means a Mortgage Loan secured by a Second Mortgage.
Security means
Selling Stockholders means those Persons constituting the "Stockholders" as that
term is defined in the Stock Purchase Agreement.
Serviced Loans means each of those loans secured by a mortgage lien on a
multi-family residential property, health care facility, senior citizen facility
or other property, with respect to which any
A-84
Borrower provides servicing or subservicing (but only if such subservicing is
technically styled as subservicing but is performed under a contract directly
between a Borrower and ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac, GNMA or the master services
under a private mortgage related security program) pursuant to a Servicing
Contract.
Servicing Contract means each direct agreement with the owner of the subject
Serviced Loans, as it may be amended, pursuant to which any Borrower services
the Serviced Loans.
Servicing Portfolio means the Borrowers' right to service Serviced Loans.
Servicing Rights means all rights of any Borrower as a servicing or subservicing
(but only if such subservicing is technically styled as subservicing but is
performed under a contract directly between a Borrower and ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇
Mac, GNMA or the master services under a private mortgage related security
program) of Serviced Loans.
Single Purpose Entity means any Person whose sole asset is a Property or a
Commercial Property and such other assets incidental to the ownership or
operation of the foregoing.
Servicing Contracts means any Servicing Contract pursuant to which Borrower
services Serviced Loans
Stock Purchase Agreement means that certain Stock Purchase Agreement dated as of
October 24, 2001, by and among the Charter Mac Corporation and the PWF
Stockholders of PWF, as amended by a certain First Amendment to Stock Purchase
Agreement dated November 21, 2001, and by a certain Second Amendment to Stock
Purchase Agreement dated December 24, 2001, and including all schedules and
exhibits thereto.
Subsidiary means any corporation, association, partnership, trust, or other
business entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes or controlling interests) of the outstanding voting interests of such
entity..
Tangible Net Worth means, as to the Borrowers (on a consolidated basis among
themselves), as of the date of determination, the excess of such Persons' Total
Assets over Total Liabilities, plus ▇▇▇▇▇▇ Mae Loan Loss Reserves, to the extent
otherwise included in determining "Tangible Net Worth," and any Permitted
Intercompany Subordinated Debt. For purposes of calculating the Tangible Net
Worth of PWF and the PWF Subsidiaries, advances or loans to shareholders,
directors, officers, employees or Affiliates, investments in Affiliates, assets
pledged to secure any liabilities not included in the Indebtedness of such
Persons, intangible assets, those other assets that would be deemed by HUD to be
non-acceptable in calculating adjusted net worth in accordance with its
requirements in effect as of that date, as those requirements appear in
"Consolidated Audit Guide for Audits of HUD Programs," and other assets Agent
deems unacceptable, in its sole discretion, must be excluded from such Persons
Total Assets.
A-85
Third Party Originated Loan means a Mortgage Loan originated and funded by a
third party (other than with funds provided by Borrower at closing to purchase
the Mortgage Loan) and subsequently purchased by Borrower.
Total Assets means, at the time of determination, all assets of the Borrowers on
a consolidated basis (among themselves) determined in accordance with GAAP
applied in a manner consistent with the most recent audited financial statements
delivered pursuant to the Agreement.
Total Commitment The sum of the Commitments of the Lenders, as in effect from
time to time
Total Liabilities means as to the Borrowers (on a consolidated basis among
themselves), as of the date of determination, all liabilities of the Borrowers
determined in accordance with GAAP applied in a manner consistent with the most
recent audited financial statements delivered pursuant to the Agreement and all
indebtedness and contingent obligations of Borrowers (on a consolidated basis
among themselves), whether or not so classified, including all redemption
obligations, hedging liabilities, and off-balance sheet financial transactions
as to which there is recourse to any Borrower.
Treasury Rate means, as of the date of any calculation or determination, the
latest published rate for United States Treasury Notes or Bills (but the rate on
Bills issued on a discounted basis shall be converted to a bond equivalent) as
published weekly in the Federal Reserve Statistical Release H.15(519) of
Selected Interest Rates in an amount which approximates (as determined by Agent)
the amount (i) approximately comparable to the portion of the Loan to which the
Treasury Rate applies for the Interest Period, or (ii) in the case of a
prepayment, the amount prepaid and with a maturity closest to the original
maturity of the installment which is prepaid in whole or in part.
Trust Receipt means a trust receipt in a form approved by and under which Lender
may deliver any document relating to the Collateral to a Borrower for correction
or completion.
UCC means the Uniform Commercial Code in effect in the Commonwealth of
Massachusetts, or any other applicable jurisdiction.
Variable Rate The term "Variable Rate" means a per annum rate equal at all times
to the Prime Rate plus 12.5 basis points, with changes therein to be effective
simultaneously with any change in the Prime Rate.
Variable Rate Advance The term "Variable Rate Advance" means any principal
amount outstanding under this Agreement which pursuant to this Agreement bears
interest at the Variable Rate.
Warehousing Advance means a disbursement by the Lenders under the Facility.
Warehousing Advance Request as defined in Section 2.3.1.
Warehousing Collateral Value means, as of any date of determination, (a) with
respect to any Eligible Loan, the lesser of (1) the amount of the Warehousing
Advance permitted against such Eligible Loan under Exhibit E or (2) the Fair
Market Value of such Eligible Loan; and (b) if Eligible Loans have been
A-86
exchanged for Agency Securities, the lesser of (1) the amount of any Warehousing
Advances outstanding against the Eligible Loans backing the Agency Securities or
(2) the Fair Market Value of the Agency Securities.
Warehousing Commitment means the obligation of Lenders to make Warehousing
Advances or to the Borrowers under Section 2.1.1.
Warehouse Commitment Amount means $100,000,000.
Warehouse Loans means each of (i) those closed loans held by any Borrower
secured by a mortgage lien on a multi-family residential property, health care
facility, senior citizen facility or other property, (ii) those pending loans as
to which (a) any Borrower has give given a commitment to lend or have committed
to purchase at a specified interest rate other than Forward Commitments or (b) a
▇▇▇▇▇▇▇ Mac loan commitment at a specified interest rate has been executed by
▇▇▇▇▇▇▇ Mac and the borrower.