EXHIBIT 10.32
AMENDED AND RESTATED LOAN AGREEMENT
between
MATRIX FINANCIAL SERVICES CORPORATION,
as Borrower
BANK ONE, TEXAS, N.A.,
as Agent,
and
CERTAIN LENDERS,
as Lenders
$100,000,000
DATED AS OF JANUARY 31, 1997
[LOGO OF MATRIX FINANCIAL SERVICES CORPORATION]
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PREPARED BY ▇▇▇▇▇▇ AND ▇▇▇▇▇, L.L.P.
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS AND REFERENCES........................................... 1
1.1 Definitions.......................................................... 1
1.2 Time References...................................................... 19
1.3 Other References..................................................... 19
1.4 Accounting Principles................................................ 19
SECTION 2. BORROWING PROVISIONS................................................. 20
2.1 Commitments.......................................................... 20
2.2 Borrowing Request.................................................... 22
2.3 Fundings............................................................. 22
2.4 Wet-Borrowing Procedures............................................. 23
2.5 Swing-Borrowing Procedures........................................... 24
2.6 Letters of Credit.................................................... 24
2.7 Borrowing Requests and LC Requests................................... 26
2.8 Terminations......................................................... 26
SECTION 3. PAYMENT TERMS........................................................ 27
3.1 Notes................................................................ 27
3.2 Payment Procedures................................................... 27
3.3 Scheduled Payments................................................... 27
3.4 Prepayments.......................................................... 28
3.5 Order of Application................................................. 29
3.6 Sharing.............................................................. 31
3.7 Interest Rates....................................................... 31
3.8 Interest Periods..................................................... 32
3.9 Basis Unavailable or Inadequate for LIBOR Rate....................... 33
3.10 Additional Costs..................................................... 33
3.11 Change in Laws....................................................... 34
3.12 Funding Loss......................................................... 34
3.13 Foreign Lenders, Participants, and Purchasers........................ 34
3.14 Fees................................................................. 34
SECTION 4. COLLATERAL PROCEDURES................................................ 35
4.1 Eligible Collateral.................................................. 35
4.2 Borrowing Base....................................................... 35
4.3 Collateral Delivery.................................................. 35
4.4 Bailee and Agent..................................................... 36
4.5 Shipment for Sale.................................................... 36
4.6 Shipment for Correction.............................................. 37
4.7 Release of Collateral................................................ 37
SECTION 5. CONDITIONS PRECEDENT................................................. 37
SECTION 6. REPRESENTATIONS AND WARRANTIES....................................... 38
6.1 Purpose of Credit.................................................... 38
6.2 About the Companies.................................................. 38
6.3 Authorization and Contravention...................................... 38
(i) AMENDED AND RESTATED LOAN AGREEMENT
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6.4 Binding Effect....................................................... 39
6.5 Fiscal Year.......................................................... 39
6.6 Current Financials................................................... 39
6.7 Debt................................................................. 39
6.8 Solvency............................................................. 39
6.9 Litigation........................................................... 39
6.10 Transactions with Affiliates......................................... 39
6.11 Taxes................................................................ 39
6.12 Employee Plans....................................................... 39
6.13 Property and Liens................................................... 40
6.14 Intellectual Property................................................ 40
6.15 Environmental Matters................................................ 40
6.16 Government Regulations............................................... 40
6.17 Insurance............................................................ 40
6.18 Appraisals........................................................... 40
6.19 Full Disclosure...................................................... 41
SECTION 7. AFFIRMATIVE COVENANTS................................................ 41
7.1 Reporting Requirements............................................... 41
7.2 Use of Proceeds...................................................... 42
7.3 Books and Records.................................................... 42
7.4 Inspections.......................................................... 42
7.5 Taxes................................................................ 42
7.6 Expenses............................................................. 42
7.7 Maintenance of Existence, Assets, and Business....................... 43
7.8 Insurance............................................................ 43
7.9 Take-Out Commitments................................................. 43
7.10 Appraisals........................................................... 43
7.11 Indemnification...................................................... 43
SECTION 8. NEGATIVE COVENANTS................................................... 44
8.1 Debt................................................................. 44
8.2 Liens................................................................ 45
8.3 Loans, Advances, and Investments..................................... 46
8.4 Distributions........................................................ 47
8.5 Merger or Consolidation.............................................. 47
8.6 Liquidations and Dispositions of Assets.............................. 47
8.7 Use of Proceeds...................................................... 47
8.8 Transactions with Affiliates......................................... 47
8.9 Employee Plans....................................................... 47
8.10 Compliance with Laws and Documents................................... 47
8.11 Government Regulations............................................... 48
8.12 Fiscal Year Accounting............................................... 48
8.13 New Businesses....................................................... 48
8.14 Assignment........................................................... 48
8.15 Other Facilities..................................................... 48
SECTION 9. FINANCIAL COVENANTS.................................................. 48
9.1 Net Worth............................................................ 48
9.2 Leverage............................................................. 49
(ii) AMENDED AND RESTATED LOAN AGREEMENT
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9.3 Cash Flow............................................................ 49
9.4 Servicing Portfolio.................................................. 49
9.5 Debt to Servicing Portfolio.......................................... 49
SECTION 10. DEFAULTS AND REMEDIES................................................ 49
10.1 Default.............................................................. 49
10.2 Remedies............................................................. 51
10.3 Right of Offset...................................................... 51
10.4 Waivers.............................................................. 51
10.5 Performance by Agent................................................. 52
10.6 No Responsibility.................................................... 52
10.7 No Waiver............................................................ 52
10.8 Cumulative Rights.................................................... 52
10.9 Rights of Individual Lenders......................................... 52
10.10 Notice to Agent...................................................... 53
10.11 Costs................................................................ 53
SECTION 11 AGENT................................................................. 53
11.1 Authorization and Action............................................. 53
11.2 Agent's Reliance, Etc................................................ 53
11.3 Agent and Affiliates................................................. 53
11.4 Credit Decision...................................................... 54
11.5 Indemnification...................................................... 54
11.6 Successor Agent...................................................... 54
11.7 Inspection........................................................... 55
SECTION 12. MISCELLANEOUS........................................................ 55
12.1 Nonbusiness Days..................................................... 55
12.2 Communications....................................................... 55
12.3 Form and Number of Documents......................................... 55
12.4 Exceptions to Covenants.............................................. 55
12.5 Survival............................................................. 55
12.6 Governing Law........................................................ 55
12.7 Invalid Provisions................................................... 55
12.8 Conflicts Between Loan Documents..................................... 56
12.9 Discharge and Certain Reinstatement.................................. 56
12.10 Amendments, Consents, Conflicts, and Waivers......................... 56
12.11 Multiple Counterparts................................................ 56
12.12 Parties.............................................................. 57
12.13 Participations....................................................... 57
12.14 Transfers............................................................ 58
12.15 Jurisdiction; Venue; Service of Process; and Jury Trial.............. 58
12.16 Limitation of Liability.............................................. 59
12.17 Entire Agreement..................................................... 59
12.18 Restatement of Existing Loan Agreement, Repayment of Non-Participating
Existing Lenders, and Settlement of Funds............................ 59
(iii) AMENDED AND RESTATED LOAN AGREEMENT
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SCHEDULES AND EXHIBITS
Schedule 2 - Lenders and Commitments
Schedule 4.1 - Eligibility Conditions
Schedule 4.2 - Borrowing-Base Calculations
Schedule 4.3 - Collateral Procedures
Schedule 5 - Closing Conditions
Schedule 6.2 - Companies
Schedule 6.9 - Litigation and Judgments
Schedule 6.10 - Affiliate Transactions
Exhibit A-1 - Amended and Restated Warehouse Note
Exhibit A-2 - Amended and Restated Swing Note
Exhibit A-3 - Amended and Restated Working-
Capital Note
Exhibit A-4 - Amended and Restated Term-Line Note
Exhibit B - Amended and Restated Guaranty
Exhibit C-1 - Amended and Restated Security
Agreement
Exhibit C-2 - Financing Statement
Exhibit C-3 - Shipping Request
Exhibit C-4 - Bailee Letter for Investors
Exhibit C-5 - Bailee Letter for Pool Custodian
Exhibit C-6 - Trust Receipt and Agreement
Exhibit C-7 - Release Request
Exhibit D-1 - Borrowing Request
Exhibit D-2 - Collateral-Delivery Notice
Exhibit D-3 - Borrowing-Base Report
Exhibit D-4 - Take-Out Report
Exhibit D-5 - Management Report
Exhibit D-6 - Compliance Certificate
Exhibit D-7 - Collateral-Conversion Notice
Exhibit E - Opinion of Counsel
Exhibit F-1 - Amendment
Exhibit F-2 - Assignment and Assumption Agreement
(iv) AMENDED AND RESTATED LOAN AGREEMENT
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AMENDED AND RESTATED LOAN AGREEMENT
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THIS AMENDED AND RESTATED LOAN AGREEMENT is entered into as of January 31,
1997, between MATRIX FINANCIAL SERVICES CORPORATION, an Arizona corporation
("BORROWER"), the Lenders described below, and BANK ONE, TEXAS, N.A., as Agent
for Lenders.
(See SECTION 1.1 for defined terms.)
A. Borrower, certain lenders, and Agent are parties to the Loan Agreement
(as renewed, extended, or amended, the "EXISTING LOAN AGREEMENT") dated as of
July 12, 1995, providing for, among other things, (i) a revolving line of credit
to finance Borrower's Mortgage Loan origination and acquisition until those
Mortgage Loans are sold in the secondary market, (ii) a sublimit of that
revolving line of credit to pay certain Servicing Payments, and (iii) a line of
credit with a term conversion feature to repay certain of Borrower's then-
existing-term Debt and to finance Borrower's Servicing Portfolio origination and
acquisition.
B. Borrower has requested that the lenders under the Existing Loan
Agreement (collectively, the "EXISTING LENDERS") entirely amend, modify, and
restate the Existing Loan Agreement in the form of this agreement in order to,
among other things, (i) renew, increase, and extend the indebtedness under the
Existing Loan Agreement, (ii) increase the aggregate Warehouse and Term-Line
Commitments, (iii) eliminate the receivables sublimit under the Warehouse
Commitment and add a new Working-Capital Commitment, (iv) amend certain existing
sublimits, (v) add new Second-Lien and Repurchase Sublimits under the Warehouse
Commitment, and (vi) modify certain financial covenants.
C. Upon and subject to the terms and conditions of this agreement,
Lenders are willing to entirely amend and restate the Existing Loan Agreement.
ACCORDINGLY, for adequate and sufficient consideration, Borrower, Lenders,
and Agent agree that the Existing Loan Agreement shall be amended and restated
in its entirety, as follows:
SECTION 1. DEFINITIONS AND REFERENCES. Unless stated otherwise, the
following provisions apply to each Loan Document, and annexes, exhibits, and
schedules to -- and certificates, reports, and other writings delivered under --
the Loan Documents.
1.1 DEFINITIONS.
"ACKNOWLEDGMENT AGREEMENT" means, at any time and as applicable, the form
of Acknowledgment Agreement then required by (a) FHLMC to be executed as a
condition to the creation of a security interest in Servicing Rights for
Mortgage Pools serviced for FHLMC, completed and executed by Borrower, Agent,
(if necessary) each Lender, and FHLMC, and otherwise in form acceptable to
Agent, together with every supplement to and replacement for that agreement in
accordance with the FHLMC Guide, (b) FNMA to be executed as a condition to the
creation of a security interest in Servicing Rights for Mortgage Pools serviced
for FNMA, completed and executed by Borrower, Agent, (if necessary) each Lender,
and FNMA, and otherwise in form acceptable to Agent, together with every
supplement to and replacement for that agreement in accordance with the FNMA
Guide, and (c) GNMA to be executed as a condition to the creation of a security
interest in Servicing Rights for Mortgage Pools guaranteed by GNMA, completed
and executed by Borrower, Agent, (if necessary) each Lender, and GNMA, and
otherwise in form acceptable to Agent, together with every supplement to and
replacement for that agreement in accordance with the GNMA Guide.
AMENDED AND RESTATED LOAN AGREEMENT
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"ADJUSTED-NET WORTH" means, at any time, the sum (without duplication) of
(a) the Companies' consolidated stockholders' equity plus (b) any Permitted Debt
outstanding under the Revolving Subordinated Loan Agreement between Borrower and
Guarantor referred to in SECTION 8.1(C).
"ADJUSTED-TANGIBLE-NET WORTH" means, at any time, the sum (without
duplication) of (a) the Companies' consolidated stockholders' equity, plus (b)
the lesser of either (i) 1.25% of the Servicing Portfolio or (ii) the Appraised
Value of the Servicing Portfolio, minus (c) purchased servicing, originated
mortgage servicing rights (sometimes known in the industry as "OMSRs"), deferred
excess servicing, rights with respect to the foregoing, and unamortized debt
discount and expense, minus (d) treasury stock, minus (e) any surplus resulting
from the write-up of assets, minus (f) goodwill, including, without limitation,
any amounts representing the excess of the purchase price paid for acquired
assets, stock, or interests over the book value assigned to them, minus (g)
patents, trademarks, service marks, trade names, and copyrights, minus (h)
Borrower's direct and indirect guaranties of Debt of any other Person, minus (i)
Borrower's obligation with respect to letters of credit, acceptances, and
similar obligations, minus (j) other intangible assets, plus (k) any Permitted
Debt expressly subordinated to the Obligation.
"AFFILIATE" of a Person means any other individual or entity who directly
or indirectly controls, is controlled by, or is under common control with that
Person. For purposes of this definition (a) "control," "controlled by," and
"under common control with" mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through
ownership of voting securities or other interests, by contract, or otherwise),
and (b) the Companies are "Affiliates" of each other.
"AGENT" means, at any time, Bank One, Texas, N.A. (or its successor
appointed under SECTION 11.6), acting as administrative, collateral, managing,
and syndication agent for Lenders under the Loan Documents.
"AGENT'S REQUEST" is defined in SECTION 2.3(F).
"APPLICABLE-COVERED RATE" means -- for each Borrowing-Purpose Category in
the table below --the annual interest rate stated beside that category:
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Borrowing-Purpose Category Applicable-Covered Rate
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Gestation Borrowings 0.850%
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Repurchase Borrowings 1.375%
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Uncommitted-B/C-Paper Borrowings 2.000%
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Other Warehouse Borrowings 1.250%
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Working-Capital Borrowings 1.500%
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Term-Line Borrowings 2.000%
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2 AMENDED AND RESTATED LOAN AGREEMENT
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"APPLICABLE MARGIN" means -- for each Borrowing-Purpose Category and
relevant Borrowing-Price Category in the table below -- the positive or negative
interest margin beside those categories:
Borrowing-Purpose Category Borrowing-Price Category Applicable Margin
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Gestation Borrowings Base Rate 0.000%
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Fed-Funds Rate or LIBOR 0.850%
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Swing Borrowings Base Rate 0.000%
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Fed-Funds Rate 1.250%
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Uncommitted-B/C-Paper Base Rate 1.000%
Borrowings
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Fed-Funds Rate or LIBOR 2.000%
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Repurchase Borrowings Base Rate 0.000%
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Fed-Funds Rate or LIBOR 1.375%
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Other Warehouse Borrowings Base Rate 0.000%
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Fed-Funds Rate or LIBOR 1.250%
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Working-Capital Borrowings Base Rate 0.500%
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Fed-Funds Rate or LIBOR 1.500%
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Term-Line Borrowings Base Rate 1.000%
Fed-Funds Rate or LIBOR 2.000%
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"APPRAISAL" means, for any Mortgage Loan, a written statement of the market
value of the real property securing it.
"APPRAISAL LAW" means any Law that is applicable to appraisals of
mortgaged-residential property in connection with transactions involving that
property, including, without limitation, Title XI of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989, the Federal Deposit Insurance
Corporation Improvement Act of 1991, 12 C.F.R. Chapter I, Part 34, Subpart C, 12
C.F.R. Chapter II, Subchapter A, Part 225, Subpart G, and 12 C.F.R. Chapter III,
Subchapter B, Part 323.
"APPRAISED VALUE" means -- at any time -- the appraised value of the
Servicing Portfolio determined in the appraisal most recently delivered to Agent
by an appraiser and in a manner and form satisfactory to Agent.
"APPROVED INVESTOR" means (a) FHLMC, FNMA, and GNMA and (b) any other
Person from time to time named on lists (separate lists will be maintained for
Committed-B/C-Paper Borrowings, Second-Lien Borrowings, and for all other
Warehouse Borrowings) agreed to by Agent and Borrower -- which lists Agent shall
furnish to any Lender upon request -- as those lists may be amended from time to
time (i) by Borrower and Agent to remove or add other names as Agent and
Borrower may agree, (ii) by either Agent or Determining Lenders to remove any
such other Person after Agent has or Determining Lenders have given to Borrower
notice of -- and an opportunity to discuss -- the proposed removal of that
Person, or (iii) automatically -- without signing by any party -- to remove any
such Person who then (A) is not Solvent, (B) fails to pay its debts generally as
they become due, (C) voluntarily seeks, consents to, or acquiesces in the
benefit of any Debtor Law, or (D) becomes a party to or is made the subject of
any proceeding provided for by any Debtor Law -- other than as a creditor or
claimant -- that could suspend or otherwise adversely affect
3 AMENDED AND RESTATED LOAN AGREEMENT
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the Rights of any Company, Agent, or any Lender in connection with the
transactions contemplated in the Loan Documents. With respect to Jumbo Loans,
the term "Approved Investor" will be deemed to refer to an Approved-Jumbo
Investor.
"APPROVED-JUMBO INVESTOR" means (a) FHLMC, FNMA, and GNMA and (b) any other
Person from time to time named on a list agreed to by Agent and Borrower --
which Agent shall furnish to any Lender upon request -- as that list may be
amended from time to time (i) by Borrower and Agent to remove or add other names
as Agent and Borrower may agree, (ii) by either Agent or Determining Lenders to
remove any such other Person after Agent has or Determining Lenders have given
to Borrower notice of -- and an opportunity to discuss -- the proposed removal
of that Person, or (iii) automatically -- without signing by any party -- to
remove any such Person who then (A) is not Solvent, (B) fails to pay its debts
generally as they become due, (C) voluntarily seeks, consents to, or acquiesces
in the benefit of any Debtor Law, or (D) becomes a party to or is made the
subject of any proceeding provided for by any Debtor Law -- other than as a
creditor or claimant -- that could suspend or otherwise adversely affect the
Rights of either Borrower, Agent, or any Lender in connection with the
transactions contemplated in the Loan Documents.
"APPROVED PMI" means any private-mortgage insurance company from time to
time named on a list agreed to by Agent and Borrower -- which Agent shall
furnish to any Lender upon request -- as that list may be amended from time to
time (a) by Borrower and Agent to remove or add other names as Agent and
Borrower may agree, (b) by either Agent or Determining Lenders to remove any
Person on the list after Agent has or Determining Lenders have given to Borrower
notice of -- and an opportunity to discuss -- the proposed removal of that
Person, or (c) automatically -- without signing by any party --to remove any
such Person who then (i) is not Solvent, (ii) fails to pay its debts generally
as they become due, (iii) voluntarily seeks, consents to, or acquiesces in the
benefit of any Debtor Law, or (iv) becomes a party to or is made the subject of
any proceeding provided for by any Debtor Law -- other than as a creditor or
claimant -- that could suspend or otherwise adversely affect the Rights of
Borrower, Agent, or any Lender in connection with the transactions contemplated
in the Loan Documents.
"ASSIGNMENT" means an Assignment and Assumption Agreement executed by a
selling Lender and a Purchaser under SECTION 12.12 and SECTION 12.14 and
delivered to Agent in substantially the form of EXHIBIT F-2.
"AVERAGE-ADJUSTED-BASE RATE" means, for any period, an annual interest rate
equal to the quotient of (a) the sum of the Base Rate plus the Applicable Margin
for each calendar day during that period divided by (b) the number of days
during that period.
"AVERAGE-ADJUSTED-FED-FUNDS RATE" means, for any period, an annual interest
rate equal to the quotient of (a) the sum of the Fed-Funds Rate plus the
Applicable Margin for each calendar day during that period divided by (b) the
number of days during that period.
"AVERAGE-ADJUSTED-LIBOR RATE" means, for any period, an annual interest
rate equal to the quotient of (a) the sum of LIBOR plus the Applicable Margin
for each calendar day during that period divided by (b) the number of days
during that period.
"AVERAGE-DEPOSITARY BALANCES" means, for any period and for any Depositary,
(a) the quotient of (i) the sum of that Depository's Eligible Balances as of the
close of business for each calendar day (which for any day that is not a
Business Day are deemed for this definition to be those balances for the
preceding Business Day) during that period divided by (ii) the number of
calendar days during that period minus (b) amounts necessary to satisfy any
deposit insurance, reserve, special deposit, Tax (other than that Depository's
general corporate income or franchise Taxes), duty, or other imposition (in each
case at the applicable rates)
4 AMENDED AND RESTATED LOAN AGREEMENT
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requirements applicable to that Depository for those accounts, minus (c) amounts
required to compensate that Depository for direct processing and transaction
costs and other services rendered in connection with those accounts in
accordance with that Depository's system of charges for similar accounts, minus
(d) unless otherwise paid directly to that Depository, any amounts in those
accounts utilized as of that day in the calculation of interest on any other
Debt payable by any Company to that Depository or any other Person.
"AVERAGE-PRINCIPAL DEBT" means, for any period and any Lender, the quotient
of (a) the sum of the Principal Debt owed to that Lender as of the close of
business for each calendar day (which for any day that is not a Business Day is
deemed for this definition to be the Principal Debt as of the close of business
for the preceding Business Day) divided by (b) the number of days during that
period.
"BAILEE LETTER" means, as applicable under the circumstances, one of the
letters executed and delivered by Agent in substantially the form of EXHIBIT C-4
or EXHIBIT C-5.
"BASE RATE" means an annual interest rate equal from day to day to the
floating annual interest rate established by Agent from time to time as its
base-rate of interest, which may not be the lowest interest rate charged by
Agent on loans similar to Borrowings.
"BASE-RATE BORROWING" means any Borrowing bearing interest at the Average-
Adjusted-Base Rate.
"B/C-PAPER SUBLIMIT" means $35,000,000.
"BORROWER" is defined in the preamble to this agreement.
"BORROWING" means any amount disbursed (a) by any Lender to Borrower under
the Loan Documents as an original disbursement of funds, a renewal, extension,
or continuation of an amount outstanding, or a payment under an LC, or (b) by
Agent or any Lender in accordance with, and to satisfy a Company's obligations
under, any Loan Document.
"BORROWING BASE" means, at any time, the sum of the various borrowing bases
set forth on SCHEDULE 4.2.
"BORROWING-BASE REPORT" means a report executed by Agent and delivered to
Borrower and Lenders in substantially the form of EXHIBIT D-3.
"BORROWING DATE" means, for any Borrowing, the date it is disbursed.
"BORROWING EXCESS" means, at any time, the amount by which any of the
limitations of SECTION 2.1 are exceeded.
"BORROWING-PRICE CATEGORY" means any category of Borrowing determined with
respect to the applicable interest option, e.g., a Base-Rate Borrowing, Fed-
Funds Borrowing, or LIBOR Borrowing.
"BORROWING-PURPOSE CATEGORY" means any category of Borrowing determined
with respect to its purpose, e.g., a (a) Warehouse Borrowing, which may be a Dry
Borrowing, Wet Borrowing, Gestation Borrowing, Swing Borrowing, Committed-B/C-
Paper Borrowing, Uncommitted-B/C-Paper Borrowing, Second-Lien Borrowing, or
Repurchase Borrowing, (b) Working-Capital Borrowing, which may be a P&I
Borrowing, T&I Borrowing, or Foreclosure Borrowing, or (c) Term-Line Borrowing.
5 AMENDED AND RESTATED LOAN AGREEMENT
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"BORROWING REQUEST" means a request executed by a Responsible Officer of
Borrower requesting a Borrowing and delivered to Agent in substantially the form
of EXHIBIT D-1.
"BUSINESS DAY" means (a) for purposes of any LIBOR Borrowing, a day when
commercial banks are open for international business in London, England, and (b)
for all other purposes, any day other than Saturday, Sunday, and any other day
that commercial banks are authorized by applicable Laws to be closed in Texas.
"CALENDAR MONTH" means that portion of a calendar month that occurs at any
time from the date of this agreement to the date that the Obligation is paid in
full and all commitments to lend under this agreement have terminated or been
canceled.
"CALENDAR QUARTER" means that portion of any calendar quarter that occurs
at any time from the date of this agreement to the date that the Obligation is
paid in full and all commitments to lend under this agreement have terminated or
been canceled.
"CMLTD" means current maturities of long-term debt (inclusive of the term
debt extended under this agreement), plus current maturities of capital leases.
"CASH FLOW" means -- for any period on a consolidated basis for Borrower
and in accordance with GAAP, consistently applied -- the sum of (a) net income
(calculated as profit or loss after deducting tax expense and after recognizing
extraordinary losses and extraordinary gains but not non-cash income tax
recoveries) plus (b) to the extent actually deducted in calculating net income,
depreciation, and amortization minus (c) to the extent actually included in
calculating net income, any non-cash revenue minus (d) any Distributions paid to
Guarantor.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. (S)(S)9601 et seq.
"CLOSING DATE" means January 31, 1997.
"COLLATERAL" means all Collateral as defined in the Security Agreement or
as otherwise delivered by any Person as security for the Obligation.
"COLLATERAL-CONVERSION NOTICE" means a notice executed by Borrower and
delivered to Agent in substantially the form of EXHIBIT D-7.
"COLLATERAL-DELIVERY NOTICE" means a notice executed by Borrower and
delivered to Agent in substantially the form of EXHIBIT D-2.
"COLLATERAL DOCUMENTS" means the documents and other items described on
SCHEDULE 4.3 and required to be delivered to Agent under SECTION 4.3.
"COMBINED COMMITMENT" means, at any time and for any Lender, the sum of
that Lender's (a) Warehouse Commitment, (b) Working-Capital Commitment, and (c)
Term-Line Commitment.
"COMMITMENT PERCENTAGE" means, at any time for any Lender, (a) in relation
to the Warehouse Commitment, the proportion (stated as a percentage) that its
Warehouse Commitment bears to the total Warehouse Commitments of all Lenders,
(b) in relation to the Working-Capital Commitment, the proportion (stated as a
percentage) that its Working-Capital Commitment bears to the total Working-
Capital Commitments
6 AMENDED AND RESTATED LOAN AGREEMENT
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of all Lenders, (c) in relation to the Term-Line Commitment, the proportion
(stated as a percentage) that its Term-Line Commitment bears to the total Term-
Line Commitments of all Lenders, and (d) in relation to the determination of
Determining Lenders, the proportion (stated as a percentage) that its Combined
Commitment bears to the total Combined Commitments of all Lenders.
"COMMITTED-B/C-PAPER BORROWING" means a Warehouse Borrowing that is (a) a
Ratable Borrowing or Swing Borrowing, (b) subject to the B/C-Paper Sublimit and
(c) supported by the Borrowing Base for Eligible-Committed-B/C-Paper Loans.
"COMPANIES" means (a) at any time, Borrower and each of its Subsidiaries,
and (b) where appropriate in respect of any period unless otherwise provided,
includes all of their operations during that period whether discontinued or not.
"COMPLIANCE CERTIFICATE" means a certificate executed by a Responsible
Officer of Borrower and delivered to Agent in substantially the form of EXHIBIT
D-6.
"CONVENTIONAL LOAN" means a Mortgage Loan that (a) is not a FHA Loan or VA
Loan but (b) complies with all applicable requirements for purchase under the
FNMA or FHLMC standard form of conventional-mortgage-purchase contract.
"CORRECTION PERIOD" means 14 calendar days for any Collateral Documents
shipped under SECTION 4.6 for correction.
"CURRENT FINANCIALS" means either (a) the Companies' Financials for the
year ended December 31, 1995, and for the 11 months ended November 30, 1996, or
(b) at any time after the Companies' annual Financials are first delivered under
SECTION 7.1, the Companies' annual Financials then most recently delivered to
Agent and subsequent monthly Financials then most recently delivered to Agent.
"DEBT", for any Person and without duplication, means (a) all obligations
required by GAAP to be classified upon that Person's balance sheet as
liabilities, (b) liabilities secured (or for which the holder of the liabilities
has an existing Right, contingent or otherwise, to be so secured) by any Lien
existing on property owned or acquired by that Person, (c) obligations that
under GAAP should be capitalized for financial reporting purposes, and (d) all
guaranties, endorsements, and other contingent obligations with respect to Debt
of others or in respect of any Employee Plan.
"DEBTOR LAWS" means the Bankruptcy Code of the United States of America and
all other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, suspension of payments,
or similar Laws affecting creditors' Rights.
"DEFAULT" is defined in SECTION 10.1.
"DEFAULT RATE" means, for any day, an annual interest rate equal to the
lesser of either (a) the Fed-Funds Rate plus 5% or (b) the Maximum Rate.
"DEPOSITARY" means any Lender with whom Borrower maintains non-interest
bearing demand deposit accounts in its name.
"DETERMINING LENDERS" means, at any time, any combination of Lenders whose
(a) Termination Percentages total at least 66 2/3% at any time on or after the
Warehouse-Actual-Termination Date, or (b) Commitment Percentages total at least
66 2/3% at all other times.
7 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
"DISTRIBUTION" means, at any time and with respect to any shares of any
capital stock or other equity securities issued by a Person, (a) the retirement,
redemption, purchase, or other acquisition for value of those securities, (b)
the declaration or payment of any dividend with respect to those securities, (c)
any loan or advance by that Person to, or other investment by that Person in,
the holder of any of those securities, and (d) any other payment by that Person
with respect to those securities.
"DRY BORROWING" means a Warehouse Borrowing for which all of the Collateral
Documents have been delivered to Agent in accordance with SECTION 4.3.
"ELIGIBLE BALANCES" means, for any calendar day and any Depositary, the sum
(which for any day that is not a Business Day is deemed for this definition to
be that sum as determined as of the close of business on the preceding Business
Day) of collected balances as of the close of business on that day in all
identified non-interest bearing demand deposit accounts or money market zero
reserve accounts of or maintained by Borrower with that Depositary.
"ELIGIBLE-COMMITTED-B/C-PAPER LOAN" is defined in SCHEDULE 4.1.
"ELIGIBLE-FORECLOSURE RECEIVABLE" is defined in SCHEDULE 4.1.
"ELIGIBLE-GESTATION COLLATERAL" is defined in SCHEDULE 4.1.
"ELIGIBLE-MORTGAGE COLLATERAL" means, at any time, all Eligible-Mortgage
Loans and all Eligible-Mortgage Securities.
"ELIGIBLE-MORTGAGE LOAN" is defined in SCHEDULE 4.1.
"ELIGIBLE-MORTGAGE SECURITY" is defined in SCHEDULE 4.1.
"ELIGIBLE-P&I RECEIVABLE" is defined in SCHEDULE 4.1.
"ELIGIBLE-REPURCHASED LOAN" is defined in SCHEDULE 4.1.
"ELIGIBLE-SECOND-LIEN LOAN" is defined in SCHEDULE 4.1.
"ELIGIBLE-SERVICING PORTFOLIO" is defined in SCHEDULE 4.1.
"ELIGIBLE-T&I RECEIVABLE" is defined in SCHEDULE 4.1.
"ELIGIBLE-UNCOMMITTED-B/C-PAPER LOAN" is defined in SCHEDULE 4.1.
"EMPLOYEE PLAN" means any employee-pension-benefit plan (a) covered by
Title IV of ERISA and established or maintained by Borrower or any ERISA
Affiliate (other than a Multiemployer Plan) or (b) established or maintained by
Borrower or any ERISA Affiliate, or to which Borrower or any ERISA Affiliate
contributes, under the Laws of any foreign country.
"ENVIRONMENTAL LAW" means any applicable Law that relates to protection of
the environment or to the regulation of any Hazardous Substances, including,
without limitation, CERCLA, the Hazardous Materials Transportation Act (49
U.S.C. (S) 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C.
(S) 6901 et seq.), the Clean Water Act (33 U.S.C. (S) 1251 et seq.), the Clean
Air Act (42 U.S.C. (S) 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. (S) 2601 et seq.), the Federal Insecticide, Fungicide, and
8 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
Rodenticide Act (7 U.S.C. (S) 136 et seq.), the Emergency Planning and Community
Right-to-Know Act (42 U.S.C. (S) 11001 et seq.), the Safe Drinking Water Act (42
U.S.C. (S) 201 and (S) 300f et seq.), the Rivers and Harbors Act (33 U.S.C. (S)
401 et seq.), the Oil Pollution Act (33 U.S.C. (S) 2701 et seq.), analogous
state and local Laws, and any analogous future enacted or adopted Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA AFFILIATE" means any Person that, for purposes of Title IV of ERISA,
is a member of Borrower's controlled group or is under common control with
Borrower within the meaning of Section 414 of the IRC.
"EXISTING LENDERS" is defined in the recitals of this agreement.
"EXISTING LOAN AGREEMENT" is defined in the recitals of this agreement.
"FED-FUNDS BORROWING" means any Borrowing bearing interest at the Average-
Adjusted-Fed-Funds Rate.
"FED-FUNDS RATE" means, for any day, the annual interest rate -- rounded
upwards, if necessary, to the nearest 0.01% -- determined by Agent to be either
(a) the weighted average of the rates on overnight-federal-funds transactions
with member banks of the Federal Reserve System arranged by federal-funds
brokers for that day (or, if not a Business Day on the preceding Business Day)
as published by the Federal Reserve Bank of New York (as published by ▇▇▇▇▇▇-
▇▇▇▇▇▇, page 73, utilizing the Fed-Effective Rate), or (b) if not so published
for any day, the average of the quotations for that day on those transactions
received by Agent from three federal-funds brokers of recognized standing it may
select.
"FHA" means the Federal Housing Administration within the United States
Department of Housing and Urban Development.
"FHA LOAN" means a Mortgage Loan which is either (a) fully or partially
insured by FHA under the National Housing Act or Title V of the Housing Act of
1949, (b) subject to a current, binding, and enforceable commitment issued by
FHA for that insurance, or (c) eligible for direct endorsement under the FHA
Direct Endorsement Program.
"FHLMC" means the Federal Home Loan Mortgage Corporation.
"FINANCIALS" of a Person means balance sheets, profit and loss statements,
reconciliations of capital and surplus, and statements of cash flow prepared (a)
according to GAAP (subject to year end audit adjustments with respect to interim
Financials) and (b) except as stated in SECTION 1.4, in comparative form to
prior year-end figures or corresponding periods of the preceding fiscal year or
other relevant period, as applicable.
"FNMA" means the Federal National Mortgage Association.
"FORECLOSURE BORROWING" means a Working-Capital Borrowing that is (a) a
Ratable Borrowing, (b) supported by the Borrowing Base for Receivables, and (c)
to be used by Borrower to reimburse itself for a Foreclosure Payment it has
made.
9 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
"FORECLOSURE PAYMENT" means the unreimbursed purchase price paid by
Borrower to repurchase a defaulted Mortgage Loan out of a Mortgage Pool in
accordance with Borrower's obligations under the applicable Servicing Contract.
"FUNDING LOSS" means any reasonable, out-of-pocket loss or expense that any
Lender incurs because Borrower (a) fails or refuses, for any reason other than a
default by the Lender claiming that loss or expense, to take any LIBOR Borrowing
that it has requested under this agreement, or (b) prepays or pays any LIBOR
Borrowing at any time other than the last day of the applicable Interest Period.
"GAAP" means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board that are applicable from time to time.
"GESTATION BORROWING" means a Warehouse Borrowing that is (a) a Ratable
Borrowing, (b) subject to the Gestation Sublimit, and (c) supported by the
Borrowing Base for Gestation Collateral.
"GESTATION SUBLIMIT" means, at any time, 50% of the total Warehouse
Commitments.
"GNMA" means the Government National Mortgage Association.
"GUARANTOR" means Matrix Capital Corporation, a Colorado corporation.
"GUARANTY" means an Amended and Restated Guaranty in substantially the form
of EXHIBIT B.
"GUIDE" means the following, as applicable under the circumstances, for (a)
FHLMC, the ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' & Servicers' Guide, (b) FNMA, the ▇▇▇▇▇▇ ▇▇▇
Servicing Guide, and (c) GNMA, as applicable, either (i) the GNMA I Mortgage
Securities Guide, Handbook GNMA 5500.1REV-6, or (ii) the GNMA II Mortgage
Securities Guide, Handbook GNMA 5500.2.
"HAZARDOUS SUBSTANCE" means any substance that is designated, defined,
classified, or regulated as a hazardous waste, hazardous material, pollutant,
contaminant, explosive, corrosive, flammable, infectious, carcinogenic,
mutagenic, radioactive, or toxic or hazardous substance under any Environmental
Law, including, without limitation, any hazardous substance within the meaning
of (S) 101(14) of CERCLA.
"HEDGE CONTRACT" means, for any Person, any present or future, whether
master or single, agreement, document or instrument providing for -- or
constituting an agreement to enter into (a) commodity ▇▇▇▇▇▇ in the normal
course of business in accordance with prior practices of that Person before the
date of this agreement for purposes of hedging material purchases, (b) foreign-
currency purchases and swaps, (c) interest-rate swaps, and (d) interest-rate-
hedging products.
"INTEREST PERIOD" is determined in accordance with SECTION 3.8.
"IRC" means the Internal Revenue Code of 1986.
"JUMBO LOAN" means a Mortgage Loan (other than a FHA Loan or VA Loan) that
complies with all applicable requirements for purchase under the FNMA or FHLMC
standard form of conventional mortgage purchase contract then in effect except
that the amount of it exceeds the maximum loan amount under those requirements.
10 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
"JUMBO SUBLIMIT", at any time, means, except as otherwise approved by Agent
in writing, (a) for all Jumbo Loans, 35% of the total Warehouse Commitments, and
(b) for any Jumbo Loan in excess of $750,000, only the first $750,000.
"LAWS" means all applicable statutes, laws, treaties, ordinances, rules,
regulations, orders, writs, injunctions, decrees, judgments, opinions, and
interpretations of any Tribunal.
"LC" means a standby letter of credit issued by Agent or any of its
Affiliates under this agreement and under an LC Agreement.
"LC AGREEMENT" means a letter of credit application and agreement (in form
and substance satisfactory to Agent) submitted and executed by Borrower to Agent
or any of its Affiliates for an LC for the account of any Company.
"LC EXPOSURE" means, without duplication, the sum of (a) the total face
amount of all undrawn and uncancelled LCs plus (b) the total unpaid
reimbursement obligations of Borrower under drawings or drafts under any LC.
"LC REQUEST" means a request by Borrower to Agent by electronic device or
in writing (in form acceptable to Agent) for an LC.
"LENDER LIEN" means any present or future first-priority (except as
otherwise specifically provided in the Loan Documents) Lien securing the
Obligation and assigned, conveyed, and granted to or created in favor of Agent
for the benefit of Lenders under the Loan Documents.
"LENDERS" means the financial institutions -- including, without
limitation, Agent in respect of its share of Borrowings -- named on SCHEDULE 2
or on the most-recently-amended SCHEDULE 2, if any, delivered by Agent under
this agreement, and, subject to this agreement, their respective successors and
permitted assigns (but not any Participant who is not otherwise a party to this
agreement).
"LIBOR" means, for a LIBOR Borrowing, the annual interest rate -- rounded
upwards, if necessary, to the nearest 0.01% -- equal to the annual interest rate
-- rounded upwards, if necessary to the nearest 0.01% -- that is (a) the rate
determined by Agent -- at approximately 10:00 a.m. on the second Business Day
before the applicable Interest Period -- as the rate reported by Telerate
Mortgage Services or ▇▇▇▇▇▇-▇▇▇▇▇▇ for deposits in United States dollars in the
London interbank market that are comparable in amount and maturity of that
Borrowing, or (b) if Agent cannot determine that rate, then the rate that
deposits in United States dollars are offered to Agent in the amount of that
LIBOR Borrowing in the London interbank market -- at approximately 11:00 a.m.,
London, England, time on the third Business Day before the applicable Interest
Period -- for deposits comparable in amount and maturity of that Borrowing.
"LIBOR BORROWING" means any Borrowing (other than a Swing Borrowing) that
bears interest at the Average-Adjusted-LIBOR Rate.
"LIEN" means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement, or encumbrance of any kind and any other
arrangement for a creditor's claim to be satisfied from assets or proceeds prior
to the claims of other creditors or the owners.
"LITIGATION" means any action by or before any Tribunal.
11 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
"LOAN DOCUMENTS" means (a) this agreement, certificates and reports
delivered under this agreement, and exhibits and schedules to this agreement,
(b) all agreements, documents, and instruments in favor of Agent or Lenders (or
Agent on behalf of Lenders) ever delivered under this agreement or otherwise
delivered in connection with any of the Obligation, (c) all LCs and LC
Agreements, and (d) all renewals, extensions, and restatements of, and
amendments and supplements to, any of the foregoing.
"MANAGEMENT REPORT" means a report delivered by a Responsible Officer of
Borrower to Agent in substantially the form of EXHIBIT D-5.
"MARKET VALUE" means, at any time (a) for Mortgage Loans -- except as
provided in CLAUSE (B) below -- a market value based upon the then-most recent
posted net yield for 30-day mandatory future delivery furnished by FNMA and
published and distributed by Telerate Mortgage Services or ▇▇▇▇▇▇-▇▇▇▇▇▇ or (if
that posted net yield is not available from these services) obtained by Agent
from FNMA, (b) for Jumbo Loans or any other Mortgage Loan when the posted rate
is not available from FNMA, the value determined in good faith by Agent, and (c)
for Mortgage Securities, the applicable Take-Out Prices, as detailed in the then
most-recent Take-Out Report delivered by Borrower under this agreement of all
Take-Out Commitments relating to Mortgage Securities.
"MATERIAL-ADVERSE EVENT" means any circumstance or event that, individually
or collectively, is reasonably expected to result (at any time before the
commitments under this agreement are fully canceled or terminated and the
Obligation is fully paid and performed) in any (a) impairment of Borrower's or
Guarantor's ability to perform any of its payment or other material obligations
under any Loan Document or (ii) the ability of Agent or any Lender to enforce
any of those obligations or any of their respective Rights under the Loan
Documents, (b) material and adverse effect on Borrower's individual financial
condition or the Companies' consolidated financial condition as represented to
Lenders in the Current Financials most recently delivered before the date of
this agreement, (c) material and adverse effect on any Collateral, or (d)
Default or Potential Default.
"MATERIAL AGREEMENT" means, for any Person, any agreement to which that
Person is a party, by which that Person is bound, or to which any assets of that
Person may be subject, and that is not cancelable by that Person upon less than
30-days notice without liability for further payment other than nominal penalty,
and the default under which or cancellation or forfeiture of which would be a
Material-Adverse Event.
"MAXIMUM AMOUNT" and "MAXIMUM RATE" respectively mean, for any day and for
any Lender, the maximum non-usurious amount and the maximum non-usurious rate of
interest that, under applicable Law, the Lender is permitted to contract for,
charge, take, reserve, or receive on its portion of the Obligation.
"MORTGAGE COLLATERAL" means all Mortgage Loans, Mortgage Securities, and
related Collateral Documents offered as Collateral under the Loan Documents.
"MORTGAGE-COLLATERAL GROUP" is defined on SCHEDULE 4.2.
"MORTGAGE LOAN" means a loan that is not a construction or non-residential
commercial loan, is evidenced by a valid promissory note, and is secured by a
mortgage, deed of trust, or trust deed that grants a perfected first-priority
Lien (except as otherwise specifically provided in the Loan Documents) on
residential-real property.
"MORTGAGE POOL" means a (a) "group" or "grouping" of Mortgage Loans
assembled in accordance with -- and as that term is used in -- the FHLMC Guide,
(b) "pool" of Mortgage Loans assembled in accordance with -- and as that term is
used in -- the FNMA Guide or the GNMA I Guide, (c) "pool" of
12 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
Mortgage Loans or a "loan package" consisting of Mortgage Loans assembled in
accordance with -- and as those terms are used in -- the GNMA II Guide, or (d)
any other pool of Mortgage Loans assembled by an Approved Investor securing --
and providing for pass-through payments of principal and interest on -- its
Mortgage Securities.
"MORTGAGE SECURITY" means a security -- in respect of an underlying pool of
related Mortgage Loans -- that provides for payment by the issuer to the holder
of specified principal installments and a fixed-interest rate on the unpaid
balance, with all prepayments being passed through to the holder, and is issued
in certificate or book-entry form.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Sections
3(37) or 4001(a)(3) of ERISA or Section 414(f) of the IRC (or any similar type
of plan established or regulated under the Laws of any foreign country) to which
Borrower or any ERISA Affiliate is making, or has made, or is accruing, or has
accrued, an obligation to make contributions.
"NET INCOME" means, for any period and any Person, the amount that should,
in accordance with GAAP, be reflected on that Person's income statement as net
income (reflecting that Person's profit or loss after deducting its Tax expense)
for that period after deduction of any minority interests.
"NET WORTH" means, for any period and any Person, that Person's
stockholder's equity as determined under GAAP.
"NOTES" means the Warehouse Notes, Swing Note, Working-Capital Notes, and
Term-Line Notes.
"OBLIGATION" means all (a) present and future indebtedness, obligations,
and liabilities of Borrower to Agent or any Lender and related to any Loan
Document, whether principal, interest, fees, costs, attorneys' fees, or
otherwise, (b) all present and future indebtedness, obligations, and liabilities
of Borrower to Agent or any Lender in respect of any Hedge Contract, (c) amounts
that would become due but for operation of 11 U.S.C. (S)(S) 502 and 503 or any
other provision of Title 11 of the United States Code, and all renewals,
extensions, and modifications of any of the foregoing, and (d) pre- and post-
maturity interest on any of the foregoing, including, without limitation, all
post-petition interest if any Company voluntarily or involuntarily files for
protection under any Debtor Law.
"PARTICIPANT" is defined in SECTION 12.13.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERMITTED DEBT" is defined in SECTION 8.1.
"PERMITTED LIENS" is defined in SECTION 8.2.
"PERMITTED LOANS/INVESTMENTS" is defined in SECTION 8.3.
"PERSON" means any individual, entity, or Tribunal.
"P&I BORROWING" means a Working-Capital Borrowing that is (a) a Ratable
Borrowing, (b) supported by the Borrowing Base for Receivables, and (c) to be
used by Borrower to make a P&I Payment.
"P&I PAYMENT" means an unreimbursed advance or payment by Borrower to
effect the timely payment of scheduled principal and interest on Mortgage
Securities that are backed by a Mortgage Pool serviced by
13 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
Borrower in accordance with Borrower's obligations under the applicable
Servicing Contract to cover a short-fall between the principal and interest
collected from mortgagors in respect of that Mortgage Pool and the principal and
interest due on those Mortgage Securities.
"POTENTIAL DEFAULT" means any event's occurrence or any circumstance's
existence that would --upon any required notice, time lapse, or both -- become a
Default.
"PRINCIPAL DEBT" means, at any time, the outstanding principal balance of
all Borrowings.
"PURCHASER" is defined in SECTION 12.14.
"RATABLE BORROWING" means a Borrowing that is advanced by Lenders to
Borrower in accordance with their Commitment Percentages.
"REGULATION Q" means Regulation Q promulgated by the Board of Governors of
the Federal Reserve System, 12 C.F.R. Part 17.
"REGULATION U" means Regulation U promulgated by the Board of Governors of
the Federal Reserve System, 12 C.F.R. Part 221.
"REGULATION X" means Regulation X promulgated by the Board of Governors of
the Federal Reserve System, 12 C.F.R. Part 224.
"RELEASE REQUEST" means a Release Request executed and delivered by
Borrower to Agent in substantially in the form of EXHIBIT C-7.
"REPRESENTATIVES" means representatives, officers, directors, employees,
attorneys, and agents.
"REPURCHASE BORROWING" means a Warehouse Borrowing that is (a) a Ratable
Borrowing or Swing Borrowing, (b) subject to the Repurchase Sublimit and (c)
supported by the Borrowing Base for Eligible-Repurchased Loans.
"REPURCHASE SUBLIMIT" means $10,000,000.
"RESPONSIBLE OFFICER" means (a) the chairman, president, chief executive
officer, any vice president, or chief financial officer of Borrower to the
extent that such officer's name, title, and signature have been certified to
Agent by the secretary or an assistant secretary of Borrower or (b) any other
officer designated as a "Responsible Officer" in writing to Administrative Agent
by any officer in CLAUSE (A) preceding.
"RIGHTS" means rights, remedies, powers, privileges, and benefits.
"SECOND-LIEN BORROWING" means a Warehouse Borrowing which is (a) a Ratable
Borrowing or Swing Borrowing, (b) subject to the Second-Lien Sublimit, and (c)
supported by the Borrowing Base for Eligible-Second-Lien Loans.
"SECOND-LIEN SUBLIMIT" means $15,000,000.
"SECURITY AGREEMENT" means the Security Agreement executed by Borrower and
Agent in substantially the form of EXHIBIT C-1.
14 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
A "SERVICER" means variously a "seller," "servicer," "issuer," or "lender,"
as defined or used in the applicable Guide in respect of a Person having
Servicing Rights.
"SERVICING ACCOUNT" means a non-interest bearing deposit account
established by Borrower with Agent -- styled and numbered "Matrix Servicing
Account," Account No. 1886479342 -- for deposit of P&I Borrowings, T&I
Borrowings, Foreclosure Borrowings, and payments on the Obligation related to
P&I Borrowings, T&I Borrowings, and Foreclosure Borrowings.
"SERVICING CONTRACT" means, at any time, a Guide or any other present or
future written agreement between an investor and Borrower acting as a servicer -
- or master servicer in the case of a sub-servicing arrangement -- providing for
Borrower to service mortgage loans or mortgage pools, as that Guide or agreement
may be supplemented by applicable manuals, guides, and Laws.
"SERVICING PAYMENTS" means P&I Payments, T&I Payments, and Foreclosure
Payments.
"SERVICING PORTFOLIO" means, at any time, the total unpaid principal amount
of Mortgage Loans serviced by Borrower for a fee other than any Mortgage Loans
serviced by Borrower under a subservicing agreement or a master servicing
agreement.
"SERVICING RECEIVABLES" means, at any time, all Eligible-Foreclosure
Receivables, Eligible-P&I Receivables, and Eligible-T&I Receivables.
"SERVICING RIGHTS" means -- for Borrower and at any time -- all present and
future Rights as servicer or master servicer under Servicing Contracts,
including, but not limited to, all Rights to receive Servicing Receivables and
all other compensation, payments, reimbursements, termination and other fees,
and proceeds of any disposition of those Rights.
"SETTLEMENT ACCOUNT" means a non-interest bearing deposit account
established by Borrower with Agent -- styled and numbered "Matrix Settlement
Account," Account No. 1886479318 -- for deposit of payments from investors, the
settlement of collections from Mortgage Securities in connection with Mortgage
Collateral, and deposit of payments on the Obligation.
"SHIPPING PERIOD" means 45 calendar days (60 calendar days for bond
programs) for the Collateral Documents for any Mortgage Loan shipped to or for
an investor under SECTION 4.5.
"SHIPPING REQUEST" means a Shipping Request executed and delivered by
Borrower to Agent in substantially the form of EXHIBIT C-3.
"SOLVENT" means, for any Person, that (a) the aggregate fair market value
of its assets exceeds its liabilities, (b) it has sufficient cash flow to enable
it to pay its Debts as they mature, and (c) it does not have unreasonably small
capital to conduct its businesses.
"SUBSIDIARY" of any Person means any entity of which at least 50% (in
number of votes) of the stock (or equivalent interests) is owned of record or
beneficially, directly or indirectly, by that Person.
"SWING BORROWING" means a Warehouse Borrowing that is (a) either a Dry
Borrowing or Wet Borrowing but not a Gestation Borrowing or a LIBOR Borrowing,
(b) advanced by Agent to Borrower under the Swing Sublimit, and (c) supported by
the Borrowing Base for Mortgage Collateral.
15 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
"SWING NOTE" means a promissory note executed and delivered by Borrower,
payable to Agent's order, in the stated principal amount of the Swing Sublimit,
and substantially in the form of EXHIBIT A-2, as renewed, extended, amended, or
replaced.
"SWING SUBLIMIT" means $15,000,000.
"TAKE-OUT COMMITMENT" means a binding commitment from an Approved Investor
to purchase Mortgage Collateral, acceptable in form and substance to Agent, in
favor of Borrower, with respect to which there is be no condition which cannot
be reasonably anticipated to be satisfied or complied with before its
expiration.
"TAKE-OUT PRICE" means, at any time, the amount described and calculated as
provided on SCHEDULE 4.2.
"TAKE-OUT REPORT" means a report delivered by Borrower to Agent
substantially in the form of EXHIBIT D-4.
"TAXES" means, for any Person, taxes, assessments, or other governmental
charges or levies imposed upon it, its income, or any of its properties,
franchises, or assets.
"TERM-LINE BORROWING" means a Ratable Borrowing that is (a) advanced to
Borrower under the Term-Line Commitment and (b) supported by the Borrowing Base
for Term-Line.
"TERM-LINE COMMITMENT" means -- at any time and for any Lender -- the
amount stated beside its name and so designated on SCHEDULE 2, as that schedule
may be amended and as that amount may be canceled or terminated under this
agreement.
"TERM-LINE NOTE" means a promissory note executed and delivered by
Borrower, payable to a Lender's order, in the stated principal amount of its
Term-Line Commitment, and substantially in the form of EXHIBIT A-4, as renewed,
extended, or replaced.
"TERMINATION PERCENTAGE" means -- at any time for any Lender -- the
proportion (stated as a percentage) that its Principal Debt bears to the total
Principal Debt.
"T&I BORROWING" means a Working-Capital Borrowing that is (a) a Ratable
Borrowing, (b) supported by the Borrowing Base for Receivables, and (c) to be
used by Borrower to make a T&I Payment.
"T&I PAYMENT" means an unreimbursed advance or payment by Borrower to cover
tax- and insurance-escrow payments not paid when required by a mortgagor under a
Mortgage Loan in accordance with Borrower's obligations under the applicable
Servicing Contract.
"TOTAL-ADJUSTED DEBT" means -- for the Companies, on a consolidated basis,
and at any time --the sum of (a) total Debt, minus (b) obligations under
repurchase agreements, minus (c) obligations under escrow-arbitrage-type
facilities.
"TRANCHE A" means that portion of Term-Line Borrowings that (a) is advanced
for the purpose of leveraging certain portions of Borrower's existing Servicing
Portfolio, (b) may not be reborrowed under this agreement on or after the
Tranche A-Actual-Termination Date, and (c) may not exceed an amount (as that
amount is permanently reduced by payments or prepayments on Tranche A under
SECTION 3 on and after the
16 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
Tranche A-Actual-Termination Date) equal at any time to the lesser of either (i)
the total Term-Line Commitments minus Tranche B or (ii) $10,000,000.
"TRANCHE A-ACTUAL-TERMINATION DATE" means the earlier of either (a) the
Tranche A-Stated-Termination Date or (b) the date on which all of the Term-Line
Commitments have otherwise terminated or been canceled.
"TRANCHE A-STATED-TERMINATION DATE" means the earlier of either (a) July 1,
1997, or (b) the 30th calendar day after the calendar day that $10,000,000 of
Tranche A has been disbursed (whether or not prepaid) under this agreement.
"TRANCHE B" means that portion of Term-Line Borrowings that (a) is advanced
for the purpose of financing certain Servicing Portfolio acquisitions, (b) may
not be reborrowed under this agreement on or after the Tranche B-Actual-
Termination Date, and (c) may not exceed an amount (as that amount is
permanently reduced by payments or prepayments on Tranche B under SECTION 3 on
and after the Tranche B-Actual-Termination Date) equal at any time to the lesser
of either (i) the total Term-Line Commitments minus Tranche A or (ii)
$20,000,000.
"TRANCHE B-ACTUAL-TERMINATION DATE" means the earlier of either (a) the
Tranche B-Stated-Termination Date or (b) the date on which all of the Term-Line
Commitments have otherwise terminated or been canceled.
"TRANCHE B-STATED-TERMINATION DATE" means the earlier of either (a) July
31, 1998, or (b) the 30th calendar day after the calendar day that at least
$18,000,000 of Tranche B has been disbursed (whether or not prepaid) under this
agreement.
"TRIBUNAL" means any (a) local, state, or federal judicial, executive, or
legislative instrumentality, (b) private arbitration board or panel, or (c)
central bank.
"TRUST RECEIPT" means a Trust Receipt and Agreement executed and delivered
by Borrower to Agent in substantially the form of EXHIBIT C-6.
"UCC" means the Uniform Commercial Code as enacted in Texas or other
applicable jurisdictions.
"UNCOMMITTED-B/C-PAPER BORROWING" means a Warehouse Borrowing that is (a) a
Ratable Borrowing or Swing Borrowing, (b) subject to the Uncommitted-B/C-Paper
Sublimit, and (c) supported by the Borrowing Base for Eligible-Uncommitted-B/C-
Paper Loans.
"UNCOMMITTED-B/C-PAPER SUBLIMIT" means $25,000,000.
"VA" means the Department of Veteran's Affairs.
"VA LOAN" means a Mortgage Loan (a) the full or partial payment of which is
guaranteed by the VA under the Servicemen's Readjustment Act of 1944 or Chapter
37 of Title 38 of the United States Code, (b) for which the VA has issued a
current binding and enforceable commitment for such a guaranty, or (c) that is
subject to automatic guarantee by the VA. In each case, the applicable
guaranty, commitment to guarantee, or automatic guaranty is for the maximum
amount permitted by Law.
17 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
"WAREHOUSE ACCOUNT" means a non-interest bearing deposit account
established by Borrower with Agent -- styled and numbered "Matrix Funding
Account," Account No. 1886479326 -- for deposit of Warehouse Borrowings.
"WAREHOUSE-ACTUAL-TERMINATION DATE" means the earlier of either (a) the
Warehouse-Stated-Termination Date or (b) the date on which all of the Warehouse
Commitments have otherwise terminated or been canceled.
"WAREHOUSE BORROWING" means a Ratable Borrowing or Swing Borrowing that is
(a) advanced to Borrower under the Warehouse Commitment, (b) either a Dry
Borrowing, Wet Borrowing, Gestation Borrowing (which may not be a Swing
Borrowing), Committed-B/C-Paper Borrowing, Uncommitted-B/C-Paper Borrowing,
Second-Lien Borrowing, or Repurchase Borrowing, and (c) supported by the
Borrowing Base for Mortgage Collateral.
"WAREHOUSE COMMITMENT" means -- at any time and for any Lender -- the
amount stated beside its name and so designated on SCHEDULE 2, as that schedule
may be amended and as that amount may be canceled or terminated under this
agreement.
"WAREHOUSE NOTE" means a promissory note executed and delivered by
Borrower, payable to a Lender's order, in the stated principal amount of its
Warehouse Commitment, and substantially in the form of EXHIBIT A-1, as renewed,
extended, amended, or replaced.
"WAREHOUSE-STATED-TERMINATION DATE" means January 31, 1999.
"WET BORROWING" means a Borrowing for which all of the Collateral Documents
have not been delivered to Agent in accordance with SECTION 4.3.
"WET PERIOD" means seven Business Days for the Collateral Documents for any
Mortgage Loan that supports a Wet Borrowing.
"WET SUBLIMIT" means, at any time, a percentage of the total Warehouse
Commitments, which percentage is (a) 35% for the first five and last five
Business Days of each Calendar Month, and (b) 20% at all other times.
"WIRE INSTRUCTIONS" mean, for any Person, the information for wire
transfers of funds to that Person, which (until changed by written notice to all
other parties to this agreement) are stated for (a) Borrower and Agent, beside
their names on the signature pages below, and (b) each Lender, beside its name
on SCHEDULE 2.
"WORKING-CAPITAL BORROWING" means a Borrowing that is (a) a Ratable
Borrowing, (b) either a P&I Borrowing, T&I Borrowing, or Foreclosure Borrowing,
(c) subject to the Working-Capital Commitment, and (d) supported by the
Borrowing Base for Receivables.
"WORKING-CAPITAL COMMITMENT" means -- at any time and for any Lender -- the
amount stated beside its name and so designated on SCHEDULE 2, as that schedule
may be amended and as that amount may be canceled or terminated under this
agreement.
"WORKING-CAPITAL NOTE" means a promissory note executed and delivered by
Borrower, payable to a Lender's order, in the stated principal amount of its
Working-Capital Commitment, and substantially in the form of EXHIBIT A-3, as
renewed, extended, or replaced.
18 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
1.2 TIME REFERENCES. Unless otherwise specified, in the Loan Documents
(a) time references (e.g., 10:00 a.m.) are to time in Dallas, Texas, and (b) in
calculating a period from one date to another, the word "from" means "from and
including" and the word "to" or "until" means "to but excluding."
1.3 OTHER REFERENCES. Unless otherwise specified, in the Loan Documents
(a) where appropriate, the singular includes the plural and vice versa, and
words of any gender include each other gender, (b) heading and caption
references may not be construed in interpreting provisions, (c) monetary
references are to currency of the United States of America, (d) section,
paragraph, annex, schedule, exhibit, and similar references are to the
particular Loan Document in which they are used, (e) references to "telefax,"
"telecopy," "facsimile," "fax," or similar terms are to facsimile or telecopy
transmissions, (f) references to "including" mean including without limiting the
generality of any description preceding that word, (g) the rule of construction
that references to general items that follow references to specific items as
being limited to the same type or character of those specific items is not
applicable in the Loan Documents, (h) references to any Person include that
Person's heirs, personal representatives, successors, trustees, receivers, and
permitted assigns, (i) references to any Law include every amendment or
supplement to it, rule and regulation adopted under it, and successor or
replacement for it, and (j) references to any Loan Document or other document
include every renewal and extension of it, amendment and supplement to it, and
replacement or substitution for it.
1.4 ACCOUNTING PRINCIPLES. Unless otherwise specified, in the Loan
Documents (a) GAAP in effect on the date of this agreement determines all
accounting and financial terms and compliance with all financial covenants, (b)
otherwise, all accounting principles applied in a current period must be
comparable in all material respects to those applied during the preceding
comparable period, and (c) while Borrower has any consolidated Subsidiaries (i)
all accounting and financial terms and compliance with reporting covenants must
be on a consolidating and consolidated basis, as applicable, and (ii) compliance
with financial covenants must be on a consolidated basis.
SECTION 2.BORROWING PROVISIONS. Subject to the provisions in the Loan
Documents, each Lender severally and not jointly agrees to extend credit to
Borrower under the Warehouse Commitments. the Working-Capital Commitments, and
the Term-Line Commitments in accordance with the following provisions.
2.1 COMMITMENTS.
(A) WAREHOUSE COMMITMENTS. Subject to the limitations below and
other provisions of the Loan Documents, on a revolving basis, and on
Business Days before the Warehouse-Actual-Termination Date, each Lender
severally agrees to provide its Commitment Percentage (except for Agent in
respect of Swing Borrowings) of Warehouse Borrowings so long as, in each
case, no Warehouse Borrowing may be disbursed that would cause any of the
following applicable limitations to be exceeded, which limitations must be
read together and are not mutually exclusive:
. The sum (without duplication) of the total Principal Debt plus the
total LC Exposure may never exceed the lesser of either (a) the total
Combined Commitments, or (b) the total Borrowing Base.
. The total Principal Debt of all Warehouse Borrowings may never exceed
the lesser of either (i) the total Warehouse Commitments or (ii) the
sum of the Borrowing Base for Mortgage Collateral plus the Borrowing
Base for Gestation Collateral.
. The total Principal Debt of all Swing Borrowings may never exceed the
Swing Sublimit.
19 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
. The total Principal Debt of all Wet Borrowings may never exceed the
Wet Sublimit.
. The total Principal Debt of all Gestation Borrowings may never exceed
the lesser of either (i) the Gestation Sublimit or (ii) the Borrowing
Base for Gestation Collateral.
. The total Principal Debt of all Committed-B/C-Paper Borrowings and all
Uncommitted-B/C-Paper Borrowings may never exceed the lesser of either
(i) the B/C-Paper Sublimit or (ii) the sum of the Borrowing Base for
Eligible-Committed-B/C-Paper Loans plus the Borrowing Base for
Eligible-Uncommitted-B/C-Paper Loans.
. The total Principal Debt of all Committed-B/C-Paper Borrowings may
never exceed the Borrowing Base for Eligible-Committed-B/C-Paper
Loans.
. The total Principal Debt of all Uncommitted-B/C-Paper Borrowings may
never exceed the lesser of either (i) the Uncommitted-B/C-Paper
Sublimit or (ii) the Borrowing Base for Eligible-Uncommitted-B/C-Paper
Loans.
. The total Principal Debt of all Second-Lien Borrowings may never
exceed the lesser of either (i) the Second-Lien Sublimit or (ii) the
Borrowing Base for Eligible-Second-Lien Loans.
. The total Principal Debt of all Repurchase Borrowings may never exceed
the lesser of either (i) the Repurchase Sublimit or (ii) the Borrowing
Base for Eligible-Repurchased Loans.
. Except for Agent in respect of Swing Borrowings, no Lender's direct or
indirect portion of the Principal Debt under this CLAUSE (A) may ever
exceed either its Warehouse Commitment or its Commitment Percentage
for Warehouse Borrowings.
. No Warehouse Borrowing may be made on a day that is not a Business
Day, or on or after the Warehouse-Actual-Termination Date.
. Each disbursement of a Warehouse Borrowing must be at least $25,000.
(B) WORKING-CAPITAL COMMITMENTS. Subject to the limitations below
and other provisions of the Loan Documents, on a revolving basis, and on
Business Days before the Warehouse-Actual-Termination Date, each Lender
severally agrees to provide its Commitment Percentage of Working-Capital
Borrowings so long as, in each case, no Working-Capital Borrowing may be
disbursed that would cause any of the following applicable limitations to
be exceeded, which limitations must be read together and are not mutually
exclusive:
. The sum (without duplication) of the total Principal Debt plus the
total LC Exposure may never exceed the lesser of either (a) the total
Combined Commitments, or (b) the total Borrowing Base.
. The sum (without duplication) of the total Principal Debt of all
Working-Capital Borrowings plus the total LC Exposure may never exceed
the lesser of either (i) the total Working-Capital Commitments or (ii)
the Borrowing Base for Receivables.
. No Working-Capital Borrowing may be made on a day that is not a
Business Day, or on or after the Warehouse-Actual-Termination Date.
20 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
. Each disbursement of a Working-Capital Borrowing must be at least
$25,000.
(C) TERM-LINE COMMITMENTS. Subject to the limitations below and
other provisions of the Loan Documents, on a revolving basis, and on
Business Days before the Tranche A-Actual-Termination Date or the Tranche
B-Actual-Termination Date (as applicable), each Lender severally agrees to
provide its Commitment Percentage of Term-Line Borrowings so long as, in
each case, no Term-line Borrowing may be disbursed that would cause any of
the following applicable limitations to be exceeded, which limitations must
be read together and are not mutually exclusive:
. The sum (without duplication) of the total Principal Debt plus the
total LC Exposure may never exceed the lesser of either (a) the total
Combined Commitments, or (b) the total Borrowing Base.
. The total Principal Debt of all Term-Line Borrowings may never exceed
the lesser of either (i) the total Term-Line Commitments or (ii) the
Borrowing Base for Term-Line.
. Term-Line Borrowings in respect of Tranche A and Tranche B may never
exceed the limitations for those Term-Line Borrowings in the
definitions of those terms in this agreement.
. No Term-Line Borrowings in respect of Tranche B may ever be made
unless the amount of Term-Line Borrowings in respect of Tranche A that
are converted from a revolving basis to a term-repayment basis on the
Tranche A-Actual-Termination Date equal $10,000,000.
. No Term-Line Borrowing may be made on a day that is not a Business
Day, or on or after the Tranche A-Actual-Termination Date or Tranche
B-Actual-Termination Date (as applicable) .
. Each disbursement of a Term-Line Borrowing must be at least $100,000.
Borrower may request that Term-Line Borrowings be made after the Tranche A-
Actual-Termination Date or Tranche B-Actual-Termination Date (as
applicable). Subject to all of the limitations of this SECTION 2.1(C) and
all other provisions of the Loan Documents, Lenders may in their sole and
absolute discretion provide such additional Term-Line Borrowings. If any
such additional Term-Line Borrowings are ever made, the payment schedule
for Tranche A and Tranche B (as applicable) shall be adjusted so that the
Principal Debt of such Term-Line Borrowings is repaid according to the
same repayment schedule (other than the adjustment to the amount of the
monthly payment) as set forth in SECTION 3.3. Borrower acknowledges that
(i) neither Agent nor any Lender has made any representations to Borrower
regarding its intent to agree to any such additional Term-Line Borrowings,
(ii) no Lender shall have any obligation to extend such additional Term-
Line Borrowings, and (iii) any extension of such additional Term-Line
Borrowings shall not commit Lenders to any further such extensions.
2.2 BORROWING REQUEST. Borrower may only request a Borrowing by timely
delivering to Agent a Collateral-Delivery Notice and required Collateral
Documents under SECTION 4.3 and by delivering to Agent a Borrowing Request for
the Borrowing before 11:00 a.m. on the Borrowing Date for it for a Fed-Funds
Borrowing or Base-Rate Borrowing or the third Business Day before the Borrowing
Date for a LIBOR Borrowing. A Borrowing Request is irrevocable and binding on
Borrower when delivered. Agent shall use its best efforts to promptly -- but at
least by 1:00 p.m. on the day it timely receives a Borrowing Request for a
Ratable Borrowing -- send a copy of it to each Lender by fax and confirm it by
telephone.
21 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
2.3 FUNDINGS.
(A) REMITTANCE BY LENDERS. Each Lender shall remit its Commitment
Percentage of any Ratable Borrowing requested in a Borrowing Request to
Agent's principal office in Dallas, Texas, by wire transfer according to
Agent's Wire Instructions, in funds that are available for immediate use by
Agent by 2:00 p.m. on the Borrowing Date.
(B) FUNDING BY AGENT. Subject to receipt of those funds, Agent shall
(i) for a Borrowing under an Agent's Request, treat those funds as a
payment by Borrower on the Principal Debt of Swing Borrowings, and (ii) for
any other Borrowing on the Borrowing Date -- unless to its actual knowledge
any of the applicable conditions precedent have not been satisfied by
Borrower or waived by the requisite Lenders -- either (A) deposit those
funds into the Warehouse Account for a Dry Borrowing, (B) wire transfer
those funds in accordance with the Borrowing Request for a Wet Borrowing,
(C) deposit those funds into the Servicing Account for a Working-Capital
Borrowing, or (D) wire transfer those funds in accordance with the
Borrowing Request for a Term-Line Borrowing.
(C) NON-REMITTANCE UNDER BORROWING REQUEST. Absent contrary written
notice from a Lender received by Agent by 2:00 p.m. on the Borrowing Date,
Agent may assume that each Lender has made its Commitment Percentage of a
Ratable Borrowing under a Borrowing Request available to Agent on the
Borrowing Date and may -- but is not obligated to -- make available to
Borrower a corresponding amount. If a Lender fails to make its Commitment
Percentage of that Borrowing available to Agent on the Borrowing Date --
whether because of that Lender's default, because that Lender is not open
for business on that Business Day, or otherwise -- then Agent may recover
that amount on demand (i) from that Lender, together with interest at the
Fed-Funds Rate, during the period from the Borrowing Date to the date Agent
recovers that amount from that Lender -- which payment is then deemed to be
that Lender's Commitment Percentage of that Borrowing -- or (ii) if that
Lender fails to pay that amount upon demand, then from Borrower together
with interest at an annual interest rate equal to the rate applicable to
the requested Borrowing during the period from the Borrowing Date to the
date Agent recovers that amount from Borrower. Notwithstanding these
provisions, each Lender remains obligated to lend its Commitment Percentage
of that Borrowing, assumes the credit risk for that amount when the
Borrowing is made available to or for Borrower, and -- after Agent has
recovered the amount of interest provided for in CLAUSE (I) above -- is
entitled to interest on that amount from the Borrowing Date.
(D) NON-REMITTANCE UNDER AGENT'S REQUEST. If a Lender fails to make
its Commitment Percentage of a Ratable Borrowing under an Agent's Request
available to Agent on its Borrowing Date, then -- without acquiescing in
that Lender's default or waiving any Rights Agent has against that Lender -
- by 10:00 a.m. on the next Business Day, then Agent shall notify Borrower
of the amount of Principal Debt of Swing Borrowings that remains.
(E) OTHER LENDERS. Although no Lender is responsible for the failure
of any other Lender to make its Commitment Percentage of any Ratable
Borrowing, that failure does not excuse any other Lender from making its
Commitment Percentage of that Borrowing.
(F) AGENT'S REQUEST. On any Business Day on which there is any
Principal Debt for Swing Borrowings, Agent may -- but at least once per
calendar week when those circumstances exist, Agent shall (without any
liability for failing to) -- unilaterally request a Ratable Borrowing under
this SECTION 2.3, to be made in the amount of that Principal Debt on the
next Business Day, as a Fed-Funds Borrowing. That Ratable Borrowing is for
the account of Borrower, but does not require Borrower's joinder or other
action. Agent shall fax that request (an "AGENT'S REQUEST") to each
22 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
Lender and Borrower and confirm it by telephone by 2:00 p.m. on the
Borrowing Date for the requested Ratable Borrowing. When so made, an
Agent's Request irrevocably binds Borrower.
2.4 WET-BORROWING PROCEDURES. The conditions and procedures of SECTION
2.2 and SECTION 2.3 apply to Wet Borrowings except as follows:
(A) COLLATERAL DOCUMENTS. A Wet Borrowing may be funded before
delivery to Agent of all of the required Collateral Documents for the
Eligible-Mortgage Loans supporting that Wet Borrowing. The Collateral-
Delivery Notice delivered to Agent for a Wet Borrowing may be sent to Agent
by fax but must identify and describe each Mortgage Loan that supports that
Wet Borrowing and the amount of the Borrowing Base for Mortgage Collateral
applicable to it. By delivering the Collateral-Delivery Notice, Borrower
confirms its grant under this agreement of Lender Liens -- from the
Borrowing Date for each Wet Borrowing -- on each Collateral Document
offered as Collateral in that Collateral-Delivery Notice that is perfected
subject to the delivery of the related promissory notes for those Mortgage
Loans to Agent or its bailee.
(B) FUNDING BY AGENT. Agent shall make the funds available to
Borrower by 4:00 p.m. on the Borrowing Date by depositing these funds into
the Warehouse Account or by wire transfer in accordance with the Borrowing
Request.
2.5 SWING-BORROWING PROCEDURES. The conditions and procedures of SECTION
2.2, SECTION 2.3, and SECTION 2.4 apply to Swing Borrowings except as follows:
(A) BORROWING REQUEST. The Borrowing Request for a Swing Borrowing
must be delivered to Agent by 3:00 p.m. on the Borrowing Date and may not
request a LIBOR Borrowing.
(B) ELECTION BY AGENT. Agent shall then elect in its sole discretion
whether to loan that Swing Borrowing. If Agent elects to loan that Swing
Borrowing, then it shall follow the funding procedures that are applicable
under SECTIONS 2.2, 2.3, and 2.4.
(C) PARTICIPATIONS. Immediately upon Agent's funding a Swing
Borrowing, Agent is deemed to have sold and transferred to each other
Lender -- and each other Lender is deemed irrevocably and unconditionally
to have purchased and received from Agent -- without recourse or warranty,
an undivided interest and participation in that Swing Borrowing to the
extent of that Lender's Commitment Percentage of the amount of it, which
participation must be paid for on demand by Agent.
2.6 LETTERS OF CREDIT.
(A) CONDITIONS. Subject to the terms and conditions of this agreement
and applicable Laws, Agent (itself or through one of its Affiliates, and
references in this SECTION 2.6 to Agent include those Affiliates) agrees to
issue LCs upon Borrower's making or delivering an LC Request and delivering
an LC Agreement, both of which must be received by Agent no later than on
the Business Day before the requested LC is to be issued, so long as (i) no
LC may expire after three Business Days before the Warehouse-Actual-
Termination Date, and (ii) the LC Exposure does not exceed $2,000,000.
(B) PARTICIPATION. Immediately upon Agent's issuance of any LC, Agent
shall be deemed to have sold and transferred to each other Lender, and each
other Lender shall be deemed irrevocably and unconditionally to have
purchased and received from Agent, without recourse or warranty, an
23 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
undivided interest and participation to the extent of such Lender's
Commitment Percentage under the Working-Capital Commitment in the LC and
all applicable Rights of Agent in the LC -- other than Rights to receive
certain fees provided in SECTION 3.14(F) to be for Agent's sole account.
(C) REIMBURSEMENT OBLIGATIONS. To induce Agent to issue and maintain
LCs, and to induce Lenders to participate in issued LCs, Borrower agrees to
pay or reimburse Agent (i) on the date when any draft or draw request is
presented under any LC, the amount paid or to be paid by Agent and (ii)
promptly, upon demand, the amount of any additional fees Agent customarily
charges for the application and issuance of an LC, for amending LC
Agreements, for honoring drafts and draw requests, and for taking similar
action in connection with letters of credit. If Borrower has not
reimbursed Agent for any drafts or draws paid or to be paid on the date of
Agent's demand for reimbursement, Agent is irrevocably authorized to fund
Borrower's reimbursement obligations as a Base-Rate Borrowing under the
Working-Capital Commitment if proceeds are available under the Working-
Capital Commitment and if the conditions in this agreement for such a
Borrowing (other than any notice requirements or minimum funding amounts)
have, to Agent's knowledge, been satisfied. The proceeds of that Borrowing
shall be advanced directly to Agent to pay Borrower's unpaid reimbursement
obligations. If funds cannot be advanced under the Working-Capital
Commitment, then Borrower's reimbursement obligation shall constitute a
demand obligation. Borrower's obligations under this section are absolute
and unconditional under any and all circumstances and irrespective of any
setoff, counterclaim, or defense to payment that Borrower may have at any
time against Agent or any other Person. From Agent's demand for
reimbursement to the date paid (including any payment from proceeds of a
Base-Rate Borrowing), unpaid reimbursement amounts accrue interest that is
payable on demand at the Default Rate thereafter.
(D) GENERAL. Agent shall promptly notify Borrower of the date and
amount of any draft or draw request presented for honor under any LC (but
failure to give notice will not affect Borrower's obligations under this
agreement). Agent shall pay the requested amount upon presentment of a
draft or draw request unless presentment on its face does not comply with
the terms of the applicable LC. When making payment, Agent may disregard
(i) any default or potential default that exists under any other agreement
and (ii) obligations under any other agreement that have or have not been
performed by the beneficiary or any other Person (and Agent is not liable
for any of those obligations). Borrower's reimbursement obligations to
Agent and Lenders, and each Lender's obligations to Agent, under this
section are absolute and unconditional irrespective of, and Agent is not
responsible for, (i) the validity, enforceability, sufficiency, accuracy,
or genuineness of documents or endorsements (even if they are in any
respect invalid, unenforceable, insufficient, inaccurate, fraudulent, or
forged), (ii) any dispute by any Company with or any Company's claims,
setoffs, defenses, counterclaims, or other Rights against Agent, any
Lender, or any other Person, or (iii) the occurrence of any Potential
Default or Default. However, nothing in this agreement constitutes a
waiver of Borrower's Rights to assert any claim or defense based upon the
gross negligence or willful misconduct of Agent or any Lender. Agent shall
promptly distribute reimbursement payments received from Borrower to all
Lenders according to their Commitment Percentages of the total Working-
Capital Commitment.
(E) OBLIGATIONS OF LENDERS. If Borrower fails to reimburse Agent as
provided in SECTION 2.6(C) and SECTION 2.6(D) within 24 hours after Agent's
demand for reimbursement, and funds cannot be advanced under the Working-
Capital Commitment to satisfy the reimbursement obligations, Agent shall
promptly notify each Lender of Borrower's failure, of the date and amount
paid, and of each Lender's Commitment Percentage of the unreimbursed
amount. Each Lender shall promptly and unconditionally make available to
Agent in immediately available funds its Commitment Percentage of the
unpaid reimbursement obligation, subject to the limitations of SECTION 2.1.
Funds are due and
24 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
payable to Agent before the close of business on the Business Day when
Agent gives notice to each Lender of Borrower's reimbursement failure (if
notice is given before 1:00 p.m.) or on the next succeeding Business Day
(if notice is given after 1:00 p.m.). All amounts payable by any Lender
accrue interest after the due date at the Federal-Funds Rate from the day
the applicable draft or draw is paid by Agent to (but not including) the
date the amount is paid by the Lender to Agent.
(F) DUTIES OF AGENT. Agent agrees with each Lender that it will
exercise and give the same care and attention to each LC as it gives to its
other letters of credit. Each Lender and Borrower agree that, in paying
any draft or draw under any LC, Agent has no responsibility to obtain any
document (other than any documents expressly required by the respective LC)
or to ascertain or inquire as to any document's validity, enforceability,
sufficiency, accuracy, or genuineness or the authority of any Person
delivering it. Neither Agent nor its Representatives will be liable to any
Lender or any Company for any LC's use or for any beneficiary's acts or
omissions. Any action, inaction, error, delay, or omission taken or
suffered by Agent or any of its Representatives in connection with any LC,
applicable draws, drafts, or documents, or the transmission, dispatch, or
delivery of any related message or advice, if in good faith and in
conformity with applicable Laws and in accordance with the standards of
care specified in the Uniform Customs and Practices for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500 (as
amended or modified), is binding upon the Companies and Lenders and does
not place Agent or any of its Representatives under any resulting liability
to any Company or any Lender. Agent is not liable to any Company or any
Lender for any action taken or omitted, in the absence of gross negligence
or willful misconduct, by Agent or its Representative in connection with
any LC.
(G) CASH COLLATERAL. On the Warehouse-Actual-Termination Date and if
requested by Determining Lenders while a Default exists, Borrower shall
provide Agent, for the benefit of Lenders, cash collateral in an amount
equal to the then-existing LC Exposure.
(H) INDEMNIFICATION. BORROWER SHALL PROTECT, INDEMNIFY, PAY, AND SAVE
AGENT, EACH LENDER, AND THEIR RESPECTIVE REPRESENTATIVES HARMLESS FROM AND
AGAINST ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, DAMAGES, LOSSES, COSTS,
CHARGES, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) WHICH ANY OF
THEM MAY INCUR OR BE SUBJECT TO AS A CONSEQUENCE OF THE ISSUANCE OF ANY LC,
ANY DISPUTE ABOUT IT, OR THE FAILURE OF AGENT TO HONOR A DRAFT OR DRAW
REQUEST UNDER ANY LC AS A RESULT OF ANY ACT OR OMISSION (WHETHER RIGHT OR
WRONG) OF ANY PRESENT OR FUTURE TRIBUNAL. HOWEVER, NO PERSON IS ENTITLED TO
INDEMNITY UNDER THE FOREGOING FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
(I) LC AGREEMENTS. Although referenced in any LC, terms of any
particular agreement or other obligation to the beneficiary are not
incorporated into this agreement in any manner. The fees and other amounts
payable with respect to each LC are as provided in this agreement, drafts
and draws under each LC are part of the Obligation, only the events
specified in this agreement as a Default shall constitute a default under
any LC, and the terms of this agreement control any conflict between the
terms of this agreement and any LC Agreement.
2.7 BORROWING REQUESTS AND LC REQUESTS. Each Borrowing Request and LC
Request constitutes a representation and warranty by Borrower that as of the
Borrowing Date or the date of issuance of the requested LC, as the case may be,
that all of the conditions precedent in SECTION 5 have been satisfied.
25 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
2.8 TERMINATIONS. All Warehouse Commitments and Working-Capital
Commitments automatically terminate in full on the Warehouse-Actual-Termination
Date, and all Term-Line Commitments automatically terminate in full on the
Tranche A-Actual-Termination Date or Tranche B-Actual-Termination Date (as
applicable). After giving written and irrevocable notice to Agent and each
Lender at least five Business Days before the effective date of any termination,
Borrower may fully or partially terminate the Warehouse Commitments, the
Working-Capital Commitments, or the Term-Line Commitments, or any combination of
them before those respective dates, and any partial termination must be ratable
in accordance with each Lender's Commitment Percentage. Once terminated, no
part of the Warehouse Commitment, the Working-Capital Commitment, or Term-Line
Commitment (as applicable) may be reinstated except by an amendment to this
agreement.
SECTION 3. PAYMENT TERMS.
3.1 NOTES. The Principal Debt (and related interest) of Warehouse
Borrowings that are Ratable Borrowings, Warehouse Borrowings that are Swing
Borrowings, Working-Capital Borrowings, and Term-Line Borrowings is respectively
evidenced by the Warehouse Notes, Swing Note, Working-Capital Notes, and Term-
Line Notes. Notwithstanding any sale of participating interests under SECTION
12.13 or any contrary notice, Borrower and Agent may deem and treat each Lender
as the absolute owner of its respective one or more Notes for all purposes.
3.2 PAYMENT PROCEDURES.
(A) PAYMENTS. Borrower shall make each payment and prepayment on the
Obligation to Agent, on behalf of Lenders, in accordance with Agent's Wire
Instructions in funds that are available for immediate use by Agent.
Payments that are received by 3:00 p.m. on a Business Day are deemed
received on that Business Day. Payments that are received after 3:00 pm on
a Business Day are deemed received on the next Business Day. Subject to
SECTION 3.7(F), applicable interest continues to accrue through the
calendar day immediately before the Business Day on which the payment is
deemed received. No Lender directly invoices Borrower for -- and only
Agent invoices Borrower for -- interest under the Loan Documents.
(B) DISTRIBUTIONS. When received under CLAUSE (A) above, Agent shall
distribute each payment to each Lender -- in accordance with SECTION 3.5
and each Lender's Wire Instructions --reasonably promptly after receipt but
by no later than 4:00 p.m. on the Business Day the payment is deemed to be
received by Agent under CLAUSE (A) above. If Agent fails to distribute any
payment to any Lender as required by this clause, then Agent shall pay to
that Lender on demand interest on that payment, from the date due under
this clause until paid, at an annual interest rate equal from day to day to
the Fed-Funds Rate.
3.3 SCHEDULED PAYMENTS. Unless otherwise provided in this agreement,
Borrower shall pay the Obligation in accordance with the following table:
==================================================================================================================
Obligation Payable
==================================================================================================================
Interest on each LIBOR Borrowing except at the As it accrues on (a) the last day of that Borrowing's
Default Rate Interest Period and -- if that Interest Period is longer than
three months -- 90 days after its first day and each 90 days
after that and (b) on the Warehouse-Actual-Termination
Date (for Warehouse and Working-Capital Borrowings) or
the final maturity date of the applicable tranche for Term-
Line Borrowings, as the case may be
-------------------------------------------------------------------------------------------------------------------
26 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
====================================================================================================================
Interest on each other Borrowing except at the On (a) the 15th day of each Calendar Month as it accrued
Default Rate on the last day of the preceding Calendar Month and (b) on
the Warehouse-Actual-Termination Date or the final
maturity date of the applicable tranche for Term-Line
Borrowings, as the case may be
--------------------------------------------------------------------------------------------------------------------
Interest at the Default Rate regardless of On demand as it accrues
Borrowing-Price Category
--------------------------------------------------------------------------------------------------------------------
Principal Debt of Swing Borrowings On demand
--------------------------------------------------------------------------------------------------------------------
Other Principal Debt of, and other Obligation On the Warehouse-Actual-Termination Date
related to, Warehouse Borrowings and Working-
Capital Borrowings
--------------------------------------------------------------------------------------------------------------------
Principal Debt of Tranche A outstanding on the In consecutive, equal, monthly installments commencing on
Tranche A-Actual-Termination Date the Tranche A-Actual-Termination Date and continuing on
the same day of each ensuing Calendar Month, with the last
installment being made on January 31, 2002, accompanied
by the balance of all related Obligation then remaining
unpaid
--------------------------------------------------------------------------------------------------------------------
Principal Debt of Tranche B outstanding on the In consecutive, equal, monthly installments commencing on
Tranche B-Actual-Termination Date the Tranche B-Actual Termination Date and continuing on
the same day of each ensuing Calendar Month, with the last
installment being made on January 31, 2003, accompanied
by the balance of all Obligation then remaining unpaid
====================================================================================================================
3.4 PREPAYMENTS.
(A) P&I BORROWINGS. For at least 7-consecutive days during each 30-
consecutive-day period, Borrower shall pay all -- and not owe any --
Principal Debt for P&I Borrowings.
(B) T&I BORROWING. Borrower shall pay the Principal Debt of each T&I
Borrowing on or before the earlier of either 270 days after its Borrowing
Date or the Warehouse-Actual-Termination Date.
(C) FORECLOSURE BORROWING. Borrower shall pay the Principal Debt of
each Foreclosure Borrowing on or before the earlier of either 180 days
after its Borrowing Date or the Warehouse-Actual-Termination Date.
(D) COMMITMENT TERMINATION. Borrower shall -- on the date that full
or partial termination of a Lender's Warehouse Commitment, Working-Capital
Commitment, or Term-Line Commitment, as the case may be, becomes effective
under SECTION 2.8 -- pay to that Lender the full Obligation owed to it in
respect of that commitment in the case of a full termination or the
Principal Debt owed to it for the relevant Borrowings that exceed its
reduced commitment, as the case may be.
(E) BORROWING EXCESS. If at any time a Borrowing Excess exists,
then--on demand -- Borrower shall take the following applicable action that
eliminates that Borrowing Excess:
(i) For a Borrowing Excess that is not capable of elimination by
delivery of additional Collateral or an increase in the total or any
applicable Borrowing Base -- e.g., if the total Principal Debt were to
exceed the total Combined Commitments -- or when a Default exists,
prepay to Agent for distribution to the appropriate one or more
Lenders Principal Debt of the appropriate one or more Borrowing-
Purpose Categories (together with any related Funding Loss).
27 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
(ii) For any other Borrowing Excess and only when no Default
exists, either (A) deliver to Agent, in accordance with this
agreement, additional Collateral that causes the total or the
applicable Borrowing Base, as the case may be, to increase, (B) prepay
to Agent for distribution to the appropriate one or more Lenders
Principal Debt of the appropriate one or more Borrowing-Purpose
Categories (together with any related Funding Loss), or (C) any
combination of the actions under CLAUSES (A) or (B) above.
(F) VOLUNTARY PREPAYMENTS. Borrower may voluntarily prepay all or any
of the Obligation at any time without premium or penalty, but with any
applicable Funding Loss.
3.5 ORDER OF APPLICATION. All payments and proceeds -- whether voluntary,
involuntary, through the exercise of any Right of set-off or other Right,
realization against any Collateral, or otherwise -- shall be applied in the
following order:
(A) NO DEFAULT. While no Default exists, in the order and manner as
Borrower directs, except that principal payments must always be applied in
the following order and manner:
(i) Principal Debt of Swing Borrowings -- in each case payable
solely to Agent, which Agent shall distribute in accordance with the
participation interests in that Principal Debt that any one or more
Lenders may have purchased and paid for under SECTION 2.5(C).
(ii) Principal Debt of all non-Swing Borrowings in the order
below -- payable ratably to each Lender in accordance with its
Commitment Percentage -- except as the order may be rearranged by
Agent to the extent possible to avoid the application of any Funding
Loss for LIBOR Borrowings. Principal Debt shall be applied (A) to the
Borrowing-Purpose Category to the extent the collections or proceeds
are from or arose in respect of the Collateral in its Borrowing Base
and (B) then in the following order:
. Term-Line Borrowings
. P&I Borrowings
. T&I Borrowings
. Foreclosure Borrowings
. Uncommitted-B/C-Paper Borrowings (Wet Borrowings first)
. Committed-B/C-Paper Borrowings (Wet Borrowings first)
. Repurchase Borrowings (Wet Borrowings first)
. Second-Lien Borrowings (Wet Borrowings first)
. Other Wet Borrowings
. Other Dry Borrowings (other than Gestation Borrowings)
. Gestation Borrowings
(B) DEFAULT OR NO DIRECTION. While a Default exists or if Borrower
fails to give any direction, in the following order and manner:
(i) All costs and expenses incurred by Agent in connection with
its duties under the Loan Documents -- including, without limitation,
fees and expenses paid by Agent to any servicing companies retained by
Agent to assist it in servicing any Collateral required to be
serviced, to any attorneys, or to any agents -- that have not been
reimbursed by Lenders, together with interest at the Default Rate,
payable solely to Agent.
28 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
(ii) All costs and expenses incurred by any Lender in
connection with the Loan Documents that are reimbursable to it under
the Loan Documents and all amounts paid by that Lender to Agent as a
reimbursement to it of costs and expenses incurred by Agent in
connection with its duties under the Loan Documents, together with
interest at the Default Rate -- payable ratably to Lenders in the
proportion that each Lender's share of those costs and expenses bears
to the total of those costs and expenses for all Lenders.
(iii) Accrued and unpaid interest on the Obligation -- payable
ratably to Lenders in the proportion that the amount of interest owed
to each Lender bears to the total of all interest owed to all Lenders.
(iv) Except with respect to payments and proceeds identifiable
as relating solely to Working-Capital Borrowings or Term-Line
Borrowings, Principal Debt of Swing Borrowings -- in each case payable
solely to Agent, which Agent shall distribute in accordance with the
participation interests in that Principal Debt that any one or more
Lenders may have purchased and paid for under SECTION 2.5(C).
(v) Any LC reimbursement obligations that are due and payable
and that remain unfunded by any Borrowing under the Working-Capital
Commitment.
(vi) Principal Debt in the order below -- payable ratably to
each Lender in accordance with its Termination Percentage -- except as
the order may be rearranged by Agent to the extent possible to avoid
the application of any Funding Loss for LIBOR Borrowings. Principal
Debt shall be applied (A) to the Borrowing-Purpose Category to the
extent the collections or proceeds are from or arose in respect of the
Collateral in its Borrowing Base and (B) then in the following order:
. Term-Line Borrowings
. P&I Borrowings
. T&I Borrowings
. Foreclosure Borrowings
. Uncommitted-B/C-Paper Borrowings (Wet Borrowings first)
. Committed-B/C-Paper Borrowings (Wet Borrowings first)
. Repurchase Borrowings (Wet Borrowings first)
. Second-Lien Borrowings (Wet Borrowings first)
. Other Wet Borrowings
. Other Dry Borrowings (other than Gestation Borrowings)
. Gestation Borrowings
(vii) All other portions of the Obligation -- payable ratably to
Lenders in the proportion that each Lender's share of those amounts
bears to the total of those amounts for all Lenders.
(viii) As a deposit with Agent, for the benefit of Lenders, as
security for and payment of any subsequent LC reimbursement
obligations.
(ix) Either to Borrower or to its successors or assigns on behalf
of Borrower, to be divided between them as they may agree or as a
court of competent jurisdiction may direct.
29 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
3.6 SHARING. If any Lender obtains any amount -- whether voluntary,
involuntary, or otherwise, including, without limitation, as a result of
exercising its Rights under SECTION 10.3 -- that exceeds the portion of that
amount it is otherwise entitled under the Loan Documents to receive, then that
Lender shall purchase from the other Lenders participations that result in the
purchasing Lender's sharing the excess amount ratably with each Lender in
accordance with the portion it is entitled to receive under the Loan Documents.
If all or any of that excess amount is subsequently recovered from that
purchasing Lender, then the purchase of participations in it is automatically
rescinded and the purchase price restored to that purchasing Lender to the
extent of the recovery. Any Lender purchasing a participation from another
Lender under this section may, to the extent lawful, exercise all of its Rights
of payment (including the Right of offset) with respect to that participation as
fully as if that Lender were the direct creditor of Borrower in the amount of
that participation.
3.7 INTEREST RATES.
(A) NON-DEFAULT RATE. Subject to CLAUSE (B) below, all Principal Debt
bears an annual interest rate equal to the lesser of either the Maximum
Rate or the rate applicable in the following table:
====================================================================================================
PRINCIPAL DEBT RATE
====================================================================================================
Principal Debt of each LIBOR Borrowing LIBOR applicable to its Interest Period
----------------------------------------------------------------------------------------------------
Average-Principal Debt of all other Borrowings Applicable-Covered Rate
owed to a Depositary during any Calendar Month
that does not exceed its Average-Depositary
Balances for that Calendar Month
----------------------------------------------------------------------------------------------------
Average-Principal Debt of all Borrowings owed to Average-Adjusted-Base Rate or Average-
any Lender and not bearing interest under the above Adjusted-Fed-Funds Rate for that
sections of this table for any Calendar Month Calendar Month, whichever is applicable
====================================================================================================
(B) DEFAULT RATE. For all past-due Principal Debt and past-due
interest on the Principal Debt from the date due (stated or by
acceleration) until paid, whether or not payment is before or after entry
of a judgment, the rate applicable in the following table:
====================================================================================================
PRINCIPAL DEBT AND PAST-DUE INTEREST RATE
====================================================================================================
Average-Principal Debt owed to a Depositary during 5.0%
a Calendar Month and all past-due accrued interest
on that Principal Debt that does not exceed its
Average-Depositary Balances for that Calendar
Month
----------------------------------------------------------------------------------------------------
Average-Principal Debt owed to any Lender and not Default Rate
bearing interest under the above section of this table,
and all past-due interest on that Principal Debt, for
any Calendar Month
====================================================================================================
(C) RATE CHANGES. Each change in LIBOR, the Fed-Funds Rate, the Base
Rate, and the Maximum Rate is effective upon the effective date of change
without notice to Borrower or any other Person.
(D) CALCULATIONS. Interest is calculated on the basis of actual days
(including the first but excluding the last) over a 360-day year -- unless
the calculation would result in an interest rate greater than the Maximum
Rate, in which event interest is calculated on the basis of the actual days
in that
30 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
year. All interest rate determinations and calculations by Agent are
conclusive and binding absent manifest error.
(E) RECAPTURE. If the designated interest rate applicable to any
Borrowing exceeds the Maximum Rate, the interest rate on that Borrowing is
limited to the Maximum Rate. However, any subsequent reductions in the
designated rate shall not become effective until the total amount of
accrued interest equals the amount of interest that would have accrued if
that designated rate had always been in effect. If at maturity (stated or
by acceleration), or at final payment of the Notes, the total interest paid
or accrued is less than the interest that would have accrued if the
designated rates had always been in effect, then, at that time and to the
extent permitted by Law, Borrower shall pay an amount equal to the
difference of (i) the lesser of either the amount of interest that would
have accrued if the designated rates had always been in effect or the
amount of interest that would have accrued if the Maximum Rate had always
been in effect, minus (ii) the amount of interest actually paid or accrued
on the Notes.
(F) MAXIMUM RATE. Regardless of any Loan Document provision, no
Lender is entitled to contract for, charge, take, reserve, receive, or
apply, as interest on all or any of the Obligation any amount in excess of
the Maximum Rate. If a Lender ever does so, then any excess is treated as
a partial prepayment of principal, and any remaining excess shall be
refunded to Borrower, as the case may be. In determining if the interest
paid or payable exceeds the Maximum Rate, Borrower and Lenders shall, to
the extent lawful (i) treat all Borrowings as but a single extension of
credit, (ii) characterize any nonprincipal payment as an expense, fee, or
premium rather than as interest, (iii) exclude voluntary prepayments and
their effects, and (iv) amortize, prorate, allocate, and spread the total
amount of interest throughout the full-contemplated term of the Obligation.
However, if the Obligation is paid in full before the end of that full-
contemplated term and the interest received for the Obligation's actual
period of existence exceeds the Maximum Amount, then Lenders shall refund
any excess without being subject to any penalties provided by any Laws. If
Texas Laws are applicable for purposes of determining the "Maximum Rate" or
the "Maximum Amount," then those terms mean the "indicated rate ceiling"
from time to time in effect under Article 1.04, Title 79, Texas Revised
Civil Statutes, as amended. Chapter 15, Subtitle 79, Texas Revised Civil
Statutes, 1925 (which regulates certain revolving credit loan accounts and
revolving triparty accounts), does not apply to the Obligation.
3.8 INTEREST PERIODS. When Borrower requests any LIBOR Borrowing, it may
elect the applicable interest period (each an "INTEREST PERIOD") -- which may be
either one, two or three months at its option or such other period as it and
Agent may agree (after first obtaining Determining Lender approval if for more
than six months) -- subject to the following conditions: (a) The initial
Interest Period commences on the applicable Borrowing Date and each subsequent
applicable Interest Period commences on the day when the next preceding
applicable Interest Period expires; (b) if any Interest Period begins on a day
for which no numerically corresponding Business Day in the Calendar Month at the
end of the Interest Period exists, then the Interest Period ends on the last
Business Day of that Calendar Month; (c) if an Interest Period would otherwise
not end on a Business Day, it shall end on the immediately preceding Business
Day; (d) no Interest Period for any portion of the Obligation may extend beyond
the scheduled repayment date for that portion of the Obligation; and (e) no more
than three Interest Periods may be in effect at any time.
3.9 BASIS UNAVAILABLE OR INADEQUATE FOR LIBOR RATE. If, on or before any
date when a LIBOR Rate is to be determined for a Borrowing, Agent or any Lender
(upon notice to Agent) determines that the basis for determining the applicable
rate is not available or that the resulting rate does not accurately reflect the
cost to Lenders of making or converting Borrowings at that rate for the
applicable Interest Period, then Agent shall promptly notify Borrower of that
determination (which is conclusive and binding on Borrower,
31 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
absent manifest error) and that Borrowing shall be a Fed-Funds Borrowing. Until
Agent notifies Borrower that it or the notifying Lender (upon notice to Agent)
has determined that those circumstances no longer exist -- which it shall
promptly do --Lenders' commitments under this agreement to make LIBOR Borrowings
are suspended.
3.10 ADDITIONAL COSTS. This section survives the full satisfaction of the
Obligation and termination of the Loan Documents, and release of Lender Liens.
(a) For any LIBOR Borrowing, if (i) (A) any change after the date of
this agreement in any present Law -- and for purposes of this SECTION 3.10,
Law includes interpretations and guidelines of any Tribunal whether or not
having the force of Law -- or any future Law imposes, modifies, or deems
applicable (or if compliance by any Lender with any requirement of any
Tribunal results in) any requirement that any reserves (including, without
limitation, any marginal, emergency, supplemental, or special reserves) be
maintained, (B) those reserves reduce any sums receivable by that Lender
under this agreement or increase the costs incurred by that Lender in
advancing or maintaining any portion of any LIBOR Borrowing, and (C) that
Lender determines that the reduction or increase is material (and it may,
in determining the material nature of the reduction or increase, utilize
reasonable assumptions and allocations of costs and expenses and use any
reasonable averaging or attribution method), then (ii) that Lender (through
Agent) shall deliver to Borrower a certificate stating in reasonable detail
the calculation of the amount necessary to compensate it for its reduction
or increase (which certificate is conclusive and binding absent manifest
error), and Borrower, shall pay that amount to that Lender within ten days
after demand.
(b) For any Borrowing, if (i) (A) any change after the date of this
agreement in any present Law or any future Law regarding capital adequacy
or compliance by any Lender with any request, directive, or requirement now
or in the future imposed by any Tribunal regarding capital adequacy or any
change in the risk category of this transaction reduces the rate of return
on its capital as a consequence of its obligations under this agreement to
a level below that which it otherwise could have achieved (taking into
consideration its policies with respect to capital adequacy) by an amount
deemed by it to be material (and it may, in determining the amount, utilize
reasonable assumptions and allocations of costs and expenses and use any
reasonable averaging or attribution method), then (ii) that Lender (through
Agent) shall notify Borrower and deliver to Borrower a certificate stating
in reasonable detail the calculation of the amount necessary to compensate
it (which certificate is presumed correct), and Borrower, shall pay that
amount to Lender within ten days after demand.
(c) Any Taxes payable by Agent or any Lender or ruled (by a Tribunal)
payable by Agent or any Lender in respect of any Loan Document shall -- if
permitted by Law and if deemed material by Agent or that Lender (who may,
in determining the material nature of the amount payable, utilize
reasonable assumptions and allocations of costs and expenses and use any
reasonable averaging or attribution method) -- be paid by Borrower,
together with interest and penalties, if any (except for Taxes payable on
the overall net income of Agent or that Lender and except for interest and
penalties incurred as a result of the gross negligence or willful
misconduct of Agent or any Lender). Agent or that Lender (through Agent)
shall notify Borrower and deliver to Borrower a certificate stating in
reasonable detail the calculation of the amount of payable Taxes, which
certificate is conclusive and binding (absent manifest error), and Borrower
shall pay that amount to Agent for the account of Agent or that Lender, as
the case may be, within ten days after demand. If Agent or that Lender
subsequently receives a refund of the Taxes paid to it by Borrower, then
the recipient shall promptly pay the refund to Borrower.
32 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
3.11 CHANGE IN LAWS. If any change, after the date of this agreement, in
any present Law or any future Law makes it unlawful for any Lender to make or
maintain LIBOR Borrowings, then that Lender shall promptly notify Agent, who
shall promptly notify Borrower and (a) as to undisbursed funds, any requested
Borrowing shall be made as a Fed-Funds Borrowing, (b) as to any outstanding
Borrowing (i) if maintaining the Borrowing until the last day of the applicable
Interest Period is unlawful, the Borrowing shall be converted to a Fed-Funds
Borrowing as of the date of notice, but Borrower is not obligated to pay any
related Funding Loss, or (ii) if not prohibited by Law, the Borrowing shall be
converted to an Fed-Funds Borrowing as of the last day of the applicable
Interest Period, or (iii) if any conversion will not resolve the unlawfulness,
Borrower shall promptly prepay the Borrowing, without penalty, and without
payment of any related Funding Loss.
3.12 FUNDING LOSS. Subject to SECTION 3.11, BORROWER AGREES TO INDEMNIFY
EACH LENDER AGAINST -- AND PAY TO IT UPON DEMAND -- ANY FUNDING LOSS OF THAT
LENDER. When any Lender demands that Borrower pay any Funding Loss, that Lender
shall deliver to Agent who shall promptly deliver to Borrower a certificate
stating in reasonable detail the basis for imposing Funding Loss and the
calculation of the amount, which calculation shall be presumed correct. This
SECTION 3.12 survives the satisfaction and payment of the Obligation and
termination of the Loan Documents.
3.13 FOREIGN LENDERS, PARTICIPANTS, AND PURCHASERS. Each Lender,
Participant (by accepting a participation interest under this agreement), and
Purchaser (by executing an Assignment) that is not organized under the Laws of
the United States of America or one of its states (a) represents to Agent and
Borrower that (i) no Taxes are required to be withheld by Agent or Borrower with
respect to any payments to be made to it in respect of the Obligation and (ii)
it has furnished to Agent and Borrower two duly completed copies of either U.S.
Internal Revenue Service Form 4224, Form 1001, Form W-8, or any other form
acceptable to Agent that entitles it to exemption from U.S. federal withholding
Tax on all interest payments under the Loan Documents, and (b) covenants to (i)
provide Agent and Borrower a new Form 4224, Form 1001, Form W-8, or other form
acceptable to Agent upon the expiration or obsolescence of any previously
delivered form according to Law, duly executed and completed by it, and (ii)
comply from time to time with all Laws with regard to the withholding Tax
exemption. If any of the foregoing is not true or the applicable forms are not
provided, then Borrower and Agent (without duplication) may deduct and withhold
from interest payments under the Loan Documents United States federal income Tax
at the full rate applicable under the IRC.
3.14 FEES. The following are not compensation for the use, detention, or
forbearance of money, are in addition to and not in lieu of interest and
expenses otherwise described in the Loan Documents, are non-refundable, bear
interest if not paid when due at the Default Rate, and are calculated on the
basis of actual days (including the first but excluding the last) elapsed over a
year of 360 days (or actual days during that year, if the calculation would
otherwise result in exceeding the Maximum Amount and the payment were deemed to
be interest notwithstanding the above provisions to the contrary):
(A) AGENT'S FEES. Borrower shall pay to Agent -- for its sole
account--administrative, syndication, and custodial fees in amounts and
upon such payment terms as may be separately agreed upon by Borrower and
Agent in writing.
(B) WAREHOUSE UNUSED FACILITY FEE. Borrower shall pay to Agent an
unused facility fee for Lenders payable in arrears on the 15th day of each
Calendar Month for the preceding Calendar Month and on the Warehouse-
Actual-Termination Date. Each payment of the unused facility fee is a
percentage per annum calculated for the period in which it accrued as the
product of 0.125% multiplied by the amount by which (i) the average-daily
total Warehouse Commitment (excluding the amount of the Gestation Sublimit)
exceeds (ii) the average daily Principal Debt relating to Warehouse
Borrowings (excluding the average daily Principal Debt relating to
Gestation Borrowings).
33 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
(C) GESTATION UNUSED FACILITY FEE. Borrower shall pay to Agent an
unused facility fee for Lenders payable in arrears on the 15th day of each
Calendar Month for the preceding Calendar Month and on the Warehouse-
Actual-Termination Date. Each payment of the unused facility fee is a
percentage per annum calculated for the period in which it accrued as the
product of 0.100% multiplied by the amount by which (i) the average-daily
total Gestation Sublimit exceeds (ii) the average daily Principal Debt
relating to Gestation Borrowings.
(D) WORKING-CAPITAL COMMITMENT FEE. On the Closing Date, Borrower
shall pay to Agent a $10,000 commitment fee for the Working-Capital
Commitments to be distributed to Lenders in shares to be determined by
Agent in its sole discretion.
(E) TERM-LINE-COMMITMENT FEE. On the Closing Date, Borrower shall pay
to Agent a $75,000 commitment fee for the Term-Line Commitments to be
distributed to Lenders in shares to be determined by Agent in its sole
discretion.
(F) LC ISSUANCE FEES. On the date that any LC is issued under this
agreement, Borrower shall pay to Agent -- for its sole account -- an LC
issuance fee of 1.25% multiplied by the face amount of the LC being issued.
SECTION 4. COLLATERAL PROCEDURES.
4.1 ELIGIBLE COLLATERAL. The eligibility requirements for Collateral to
be included in the Borrowing Base are listed on SCHEDULE 4.1. If at any time
any item of Collateral ceases to meet those requirements, then that item is
automatically excluded from all calculations of the applicable Borrowing Base.
4.2 BORROWING BASE. The elements for calculating the Borrowing Base are
listed on SCHEDULE 4.2. By 2:00 p.m. on the date of any Borrowing, any payment
of Principal Debt, or removal of any Collateral, Agent shall deliver to Borrower
and Lenders a Borrowing-Base Report prepared on the basis of the information
provided by Borrower in the most recent Take-Out Report and other information
then available to Agent as provided in this agreement.
4.3 COLLATERAL DELIVERY. Borrower must comply with all the required
procedures in SCHEDULE 4.3 for Mortgage Collateral offered in connection with
this agreement by no later than 11:00 a.m. on (i) the Borrowing Date for
Collateral supporting any Borrowing other than a Wet Borrowing and (ii) the
seventh Business Day after the Borrowing Date of any Wet Borrowing for
Collateral supporting that Borrowing. By 11:00 a.m. on the Business Day that
Borrower is converting any Dry Borrowing to a Gestation Borrowing, Borrower
shall execute and deliver to Agent a Collateral-Conversion Notice.
4.4 BAILEE AND AGENT. Agent and Lenders appoint Borrower -- and Borrower
shall act -- as their (a) special agent for the sole and limited purpose of
obtaining and maintaining Appraisals for Mortgage Loans as required by the Loan
Documents and (b) bailee to (i) hold in trust for Agent (A) the original
recorded copy of the mortgage, deed of trust, or trust deed securing each
Mortgage Loan, (B) a mortgagee policy of title insurance (or binding unexpired
and unconditional commitment to issue such insurance if the policy has not yet
been delivered to Borrower) insuring Borrower's perfected, first priority Lien
(or second-priority Lien with respect to Second-Lien Borrowings) created by that
mortgage, deed of trust, or trust deed, (C) the original insurance policies
referred to in PART A.6(C) on SCHEDULE 4.1, and (D) all other original
documents, including any undelivered Take-Out Commitments, promissory notes, and
Mortgage Securities, (ii) specifically identify those items in the appropriate
Collateral-Delivery Notice, and (iii) deliver to Agent any of the foregoing
items as soon as reasonably practicable upon Agent's request.
34 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
4.5 SHIPMENT FOR SALE.
(A) SHIPMENT OF COLLATERAL. If no Default, Potential Default, or
Borrowing Excess exists and if shipment would not result in any Approved
Investor (other than FNMA, FHLMC, and GNMA, or any other investor that
Agent has approved in writing) or its servicers and custodians holding
Collateral Documents for Mortgage Loans with more than a total $5,000,000
face amount, then Borrower may -- by a Shipping Request delivered to Agent
by 11:00 a.m. on the Business Day of shipment -- request Agent to ship
Collateral Documents to an Approved Investor or its servicer or custodian
for purchase or pooling of the related Mortgage Loans. If Agent has no
actual knowledge that any of the above conditions have not been satisfied,
then Agent shall ship the Collateral Documents it holds for those Mortgage
Loans to that Approved Investor or its servicer or custodian under the
appropriate Bailee Letter.
(B) INELIGIBLE COLLATERAL. Collateral shipped under CLAUSE (A) above,
unless returned to Agent, ceases to be Eligible-Mortgage Collateral (i) to
the extent that Collateral Documents for Mortgage Loans with more than a
total face amount of $5,000,000 are held by or for any Approved Investor
(other than FNMA, FHLMC, and GNMA, or any other investor that Agent has
approved in writing) and (ii) upon the earlier of either the release of the
Lender Liens in that Collateral under CLAUSE (C) below or the expiration of
the Shipping Period for that Collateral.
(C) RELEASE OF LIENS. The Lender Liens on any Collateral shipped
under CLAUSE (A) above continue on that Collateral until either (i) Agent
receives payment in the Settlement Account in an amount at least equal to
the price paid by the purchaser for each Eligible-Mortgage Loan so sold or
(ii) in the case of Mortgage Loans being sold or exchanged for Mortgage
Securities, Eligible-Mortgage Securities are delivered to or for Agent in
accordance with SCHEDULE 4.3 and other applicable provisions of the Loan
Documents and become Collateral under this agreement for all purposes.
(D) CERTAIN CREDITS. Neither Agent nor any Lender is obligated at any
time to credit Borrower for any amounts due from any purchase of any
Mortgage Collateral contemplated under this agreement until Agent has
actually received immediately available funds for that Mortgage Collateral
in the amount required under this agreement. Neither Agent nor any Lender
is obligated at any time to collect any amounts or otherwise enforce any
obligations due from any purchaser in respect of any such purchase.
4.6 SHIPMENT FOR CORRECTION. If no Default, Potential Default, or
Borrowing Excess exists or occurs as a result of the shipment and if shipment
would not result in any Collateral Documents for Mortgage Loans with more than a
total face amount of $1,000,000 being outstanding for correction, then Borrower
may -- by a Trust Receipt delivered to Agent -- request that Agent ship to
Borrower the entire mortgage loan file of Collateral Documents for any Mortgage
Loan so that certain of those Collateral Documents may be corrected or replaced
for clerical or other non-substantive mistakes. If Agent has no actual
knowledge that any of the above conditions have not been satisfied, then and
subject to the limitations below, then Agent shall ship to Borrower the entire
mortgage loan file of Collateral Documents to be corrected or replaced.
Borrower shall re-deliver to Agent the corrected Collateral Documents (meeting
the requirements of SCHEDULE 4.3) before the expiration of the Correction Period
for that Collateral. Collateral shipped under this section, unless returned to
Agent, ceases to be Eligible-Mortgage Collateral (a) to the extent that
Collateral Documents for Mortgage Loans with more than a total face amount of
$1,000,000 are outstanding for correction at any time and (b) upon the
expiration of the Correction Period for that Collateral. The Lender Liens on
any Collateral shipped under this section continue in full force and effect.
35 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
4.7 RELEASE OF COLLATERAL.
(A) EXCESS COLLATERAL. If no Default or Potential Default exists and
no Borrowing Excess exists or would occur (after taking into account any
corresponding payment on the Obligation) as a result of the release,
Borrower may -- by a Release Request delivered to Agent by 11:00 a.m. on
the Business Day of the release -- request that Agent release the Lender
Liens on any Collateral.
(B) SATISFACTION OF OBLIGATION. If the Obligation is fully paid and
performed and all commitments by each Lender to extend credit under the
Loan Documents are terminated or canceled, Borrower may -- by written
request to Agent -- request that Agent release the Lender Liens on all of
the Collateral, return to Borrower or its designee all Collateral Documents
then held by Agent, and execute a release of any financing statements or
other documents filed or recorded to perfect the Lender Liens.
(C) RELEASES. If Agent has no actual knowledge that any of the above
conditions for a release have not been satisfied, then Agent shall effect
those releases.
SECTION 5. CONDITIONS PRECEDENT. No Lender is obligated to fund its part of
any Borrowing and Agent is not obligated to issue any LC unless Agent has
received all of the documents and items described on SCHEDULE 5. In addition,
no Lender is obligated to fund its part of any Borrowing and Agent is not
obligated to issue any LC unless on the applicable Borrowing Date (and after
giving effect to the requested Borrowing or LC): (a) Agent has timely received a
Borrowing Request or LC Request (together with the applicable LC Agreement); (b)
Agent receives any applicable LC fees; (c) all of the representations and
warranties of Borrower in the Loan Documents are true and correct in all
material respects (unless they speak to a specific date or are based on facts
which have changed by transactions contemplated or permitted by this agreement);
(d) no Default or Potential Default exists; (e) the funding of the Borrowing or
the issuance of the LC is permitted by Law and does not cause a Borrowing
Excess; and (f) if reasonably requested by Agent, it has received evidence
substantiating any of the matters in the Loan Documents that are necessary to
enable Borrower to qualify for the Borrowing or the issuance of the LC, as the
case may be. Each condition precedent in this agreement (including, without
limitation, those on SCHEDULE 5) is material to the transactions contemplated by
this agreement, and time is of the essence with respect to each. Subject to
first obtaining the approval of all Lenders, Agent or any Lender may fund any
Borrowing or issue any LC without all conditions being satisfied. However, to
the extent lawful, that funding is not a waiver of the requirement that each
condition precedent be satisfied as a prerequisite for any subsequent funding or
issuance, unless all Lenders specifically waive an item in writing.
SECTION 6. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants
to Agent and Lenders as follows:
6.1 PURPOSE OF CREDIT. Borrower will use all proceeds of Borrowings for
one or more of the following: (a) Warehouse Borrowings will be used to finance
Borrower's Mortgage Loan origination and acquisition until those Mortgage Loans
are sold in the secondary market, (b) Working-Capital Borrowings will be used
either (i) to pay certain Servicing Payments until those payments are reimbursed
by either obligors under Mortgage Loans being serviced by Borrower or by the
appropriate governmental agencies or (ii) to issue letters of credit to support
sales of Servicing Rights, and (c) Term-Line Borrowings will be used to finance
the acquisition of various servicing portfolios and to provide funding for
Borrower's internally-generated Servicing Rights. In addition, the initial
Borrowing on the Closing Date will be used to repay the outstanding indebtedness
under the Existing Loan Agreement owed to any Existing Lender that is not a
Lender under this agreement. Borrower is not engaged principally (or as one of
its important activities) in the business of extending credit for the purpose of
purchasing or carrying any "margin stock" within the meaning of Regulation
36 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
U. No part of the proceeds of any LC draft or drawing or any Borrowing is to be
used, directly or indirectly, for a purpose that violates any Law, including,
without limitation, the provisions of Regulation U.
6.2 ABOUT THE COMPANIES.
(A) SUBSIDIARIES AND TRADE NAMES. Except as described on SCHEDULE 6.2
(i) Borrower has no Subsidiaries and (ii) no Company has used or transacted
business under any other corporate or trade name in the six-month period
preceding the date of this agreement.
(B) EXISTENCE, QUALIFICATION, AND COMPLIANCE. Each Company is duly
organized, validly existing, and in good standing under the Laws of the
jurisdiction in which it is incorporated as stated on SCHEDULE 6.2. Except
where failure is not a Material-Adverse Event, each Company (i) is duly
qualified to transact business and is in good standing as a foreign
corporation or other entity in each jurisdiction where the nature and
extent of its business and properties require due qualification and good
standing (as described on SCHEDULE 6.2), (ii) possesses all requisite
authority, permits, and power to conduct its business as is now being -- or
is contemplated by this agreement to be -- conducted, and (iii) is in
compliance with all applicable Laws.
(C) OFFICES. Each Company's chief executive office and other
principal offices are described on SCHEDULE 6.2. The present and
foreseeable location of each Company's books and records concerning
accounts and accounts receivable is at its chief executive office, and all
of its books, and records are in its possession.
6.3 AUTHORIZATION AND CONTRAVENTION. The execution and delivery by each
Company of each Loan Document to which it is a party and the performance by it
of its related obligations (a) are within its corporate power, (b) have been
duly authorized by all necessary corporate action, (c) except for any action or
filing that has been taken or made on or before the date of this agreement,
require no action by or filing with any Tribunal, (d) do not violate any
provision of its charter or bylaws, (e) except where not a Material-Adverse
Event, do not violate any provision of Law applicable to it or any material
agreements to which it is a party, and (f) except for Lender Liens, do not
result in the creation or imposition of any Lien on any asset of any Company.
6.4 BINDING EFFECT. Upon execution and delivery by all parties to it,
each Loan Document will constitute a legal and binding obligation of each
Company party to it, enforceable against it in accordance with its terms, except
as enforceability may be limited by applicable Debtor Laws and general
principles of equity.
6.5 FISCAL YEAR. The Companies' fiscal year ends each December 31.
6.6 CURRENT FINANCIALS. The Current Financials were prepared in
accordance with GAAP and present fairly, in all material respects, the financial
condition, results of operations, and cash flows of the Companies as of, and for
the portion of the fiscal year ending on their date or dates (subject only to
normal year-end adjustments). All material liabilities of the Companies as of
the date or dates of the Current Financials are reflected in them or notes to
them. Except for transactions directly related to, or specifically contemplated
by, the Loan Documents, no subsequent material adverse changes have occurred in
the financial condition of the Companies from that shown in the Current
Financials, nor has any Company incurred any subsequent material liability.
6.7 DEBT. No Company has any Debt except Permitted Debt.
37 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
6.8 SOLVENCY. On the date of each Borrowing or the issuance of any LC,
each Company is, and after giving effect to the requested Borrowing or LC will
be, Solvent.
6.9 LITIGATION. Except as disclosed on SCHEDULE 6.9 (a) no Company is
subject to, or aware of the threat of, any Litigation that is reasonably likely
to be determined adversely to it or, if so adversely determined, would be a
Material-Adverse Event, and (b) no outstanding or unpaid judgments against any
Company exists.
6.10 TRANSACTIONS WITH AFFILIATES. No Company is a party to a material
transaction with any of its Affiliates except (a) transactions in the ordinary
course of business and upon fair and reasonable terms not materially less
favorable than it could obtain or could become entitled to in an arm's-length
transaction with a Person that was not its Affiliate, and (b) transactions
described on SCHEDULE 6.10.
6.11 TAXES. All Tax returns of each Company required to be filed have been
filed (or extensions have been granted) before delinquency, except for returns
for which the failure to file is not a Material-Adverse Event, and all Taxes
imposed upon each Company that are due and payable have been paid before
delinquency.
6.12 EMPLOYEE PLANS. Except where occurrence or existence is not a
Material-Adverse Event, (a) no Employee Plan has incurred an "accumulated
funding deficiency" (as defined in (S) 302 of ERISA or (S) 412 of the IRC), (b)
no Company has incurred liability under ERISA to the PBGC in connection with any
Employee Plan, (c) no Company has withdrawn in whole or in part from
participation in a Multiemployer Plan, (d) no Company has engaged in any
"prohibited transaction" (as defined in (S) 406 of ERISA or (S) 4975 of the
IRC), and (e) no "reportable event" (as defined in (S) 4043 of ERISA) has
occurred in respect of any Employee Plan, excluding events for which the notice
requirement is waived under applicable PBGC regulations.
6.13 PROPERTY AND LIENS. Each Company has good and marketable title to all
its property reflected on the Current Financials except for property that is
obsolete or that has been disposed of in the ordinary course of business or,
after the date of this agreement, as otherwise permitted by this agreement. All
Collateral is free and clear of any Liens and adverse claims of any nature
except Permitted Liens.
6.14 INTELLECTUAL PROPERTY. Borrower owns all material licenses, patents,
patent applications, copyrights, service marks, trademarks, trademark
applications, and trade names necessary to continue to conduct its businesses as
presently conducted by it and proposed to be conducted by it immediately after
the date of this agreement. Borrower is conducting its business without
infringement or claim of infringement of any license, patent, copyright, service
▇▇▇▇, trademark, trade name, trade secret, or other intellectual property right
of others, other than any infringements or claims that, if successfully asserted
against or determined adversely to Borrower, are not a Material-Adverse Event.
To Borrower's knowledge, no infringement or claim of infringement by others of
any material license, patent, copyright, service ▇▇▇▇, trademark, trade name,
trade secret, or other intellectual property of Borrower exists.
6.15 ENVIRONMENTAL MATTERS. Except where not a Material-Adverse Event, no
Company (a) knows of any environmental condition or circumstance adversely
affecting any Company's properties or operations or any material portion of the
properties subject to Mortgage Loans, (b) has received any report of any
Company's violation of any Environmental Law, or (c) knows that any Company is
under any obligation to remedy any violation of any Environmental Law. Each
Company has taken prudent steps to determine that its properties and operations
and that substantially all of the properties subject to Mortgage Loans do not
violate any Environmental Law except violations that are not a Material-Adverse
Event.
38 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
6.16 GOVERNMENT REGULATIONS.
(A) INAPPLICABLE REGULATIONS. No Company is subject to regulation
under the Investment Company Act of 1940, as amended, or the Public Utility
Holding Company Act of 1935, as amended.
(B) BORROWER'S ELIGIBILITY. Borrower is approved and qualified and in
good standing as an issuer, mortgagee, or seller/servicer, as described
below, and meets all requirements applicable to its status as such: (i)
GNMA approved issuer of Mortgage-Backed Securities guaranteed by GNMA; (ii)
FNMA approved seller/servicer of Mortgage Loans, eligible to originate,
purchase, hold, sell, and service Mortgage Loans to be sold to FNMA; (iii)
FHLMC approved seller/servicer of Mortgage Loans, eligible to originate
purchase, hold, sell and service Mortgage Loans to be sold to FHLMC; (iv)
FHA approved mortgagee, eligible to originate, purchase, hold, sell and
service FHA Loans; and (v) VA approved mortgagee, eligible to originate,
purchase, hold, sell and service VA Loans.
6.17 INSURANCE. Each Company maintains with financially sound,
responsible, and reputable insurance companies or associations (or, as to
workers' compensation or similar insurance, with an insurance fund or by self-
insurance authorized by the jurisdictions in which it operates) insurance
concerning its properties and businesses against casualties and contingencies
and of types and in amounts (and with co-insurance and deductibles) as is
customary in the case of similar businesses.
6.18 APPRAISALS. With respect to the property the subject of any Mortgage
Loan, Borrower has obtained Appraisals in material compliance with all Appraisal
Laws.
6.19 FULL DISCLOSURE. Each material fact or condition relating to the Loan
Documents or the financial condition, business, or property of the Companies
that is a Material-Adverse Event has been disclosed in writing to Agent and
Lenders. All information previously furnished by any Company to Agent or any
Lender in connection with the Loan Documents was -- and all information
furnished in the future by any Company to Agent or any Lender will be -- true
and accurate in all material respects or based on reasonable estimates on the
date the information is stated or certified.
SECTION 7. AFFIRMATIVE COVENANTS. Until all commitments by Lenders to
extend credit under this agreement have been canceled or terminated and the
Obligation is fully paid and performed, Borrower jointly and severally covenants
and agrees with Agent and Lenders as follows:
7.1 REPORTING REQUIREMENTS. Borrower shall cause to be furnished to Agent
the following, all in form and detail reasonably satisfactory to Agent:
(A) ANNUAL FINANCIALS. Promptly when available but at least within 90
days after each fiscal-year end of Borrower, audited Financials of the
Companies as of that year end, each reflecting the corresponding figures
for the preceding fiscal year in comparative form, accompanied by (i) an
unqualified opinion of a firm of independent certified public accountants
acceptable to Agent stating that those Financials were prepared in
accordance with GAAP applied on a basis consistent with prior periods
except for such changes in GAAP concurred in by Borrower's independent
public accountants, and that the consolidated portion of those Financials
present fairly the consolidated and consolidating financial condition and
results of operations of the Companies as of (and for the fiscal year
ending on) that last day, and (ii) a Compliance Certificate.
(B) GUARANTOR FINANCIAL STATEMENTS. Promptly when available but at
least within 90 days after each fiscal year end of Guarantor, audited
financial statements and statements of cash flow
39 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
for any Guarantor prepared as of the end of the previous calendar year in
form and detail reasonably acceptable to Agent.
(C) MONTHLY FINANCIALS. Promptly when available but at least within
45 days after each Calendar Month, Financials of the Companies as of the
end of that month, accompanied by (i) a Management Report and (ii) a
Compliance Certificate.
(D) TAKE-OUT REPORT. By 5:00 p.m. on each Monday (or, if any Monday
is not a Business Day, then by that time on the next Business Day) but only
to the extent that Borrower has elected not to deliver specifically-
designated Take-Out Commitments to Agent under SCHEDULES 4.2 and 4.3, a
Take-Out Report that is prepared as of the close of business on the
preceding Business Day and reports the Take-Out Prices of the Mortgage-
Collateral Groups comprising the Mortgage Collateral for which
specifically-designated Take-Out Commitments have not been delivered.
(E) INVESTOR INFORMATION. Promptly after the request by Agent or
Determining Lenders, financial information about any investor (other than
FNMA, FHLMC, and GNMA) for purposes of determining whether that investor
should become or remain an Approved Investor.
(F) APPRAISED VALUE REPORT. Promptly when available but at least
within 60 days after each Calendar Quarter, an appraisal of the Appraised
Value. Such appraisals shall be delivered at least once every Calendar
Quarter with respect to the Servicing Portfolio (Borrower's internally-
prepared appraisals are acceptable except that the appraisal due on the
Calendar Quarter ending each March 31 must be prepared by an independent
third-party appraiser acceptable to Agent in its sole discretion).
(G) NOTICES. Notice, promptly after any Company knows or has reason
to know, of (i) the existence and status of any Litigation that, if
determined adversely to any Company, would be a Material-Adverse Event,
(ii) any change in any material fact or circumstance represented or
warranted by any Company in any Loan Document that constitutes a Material-
Adverse Event, (iii) the receipt by any Company of notice of any violation
or alleged violation of ERISA or any Environmental Law or other Law if that
violation is a Material-Adverse Event, or (iv) a Default or Potential
Default specifying the nature thereof and what action Borrower have taken,
are taking, or propose to take with respect to it.
(H) OTHER INFORMATION. Promptly upon reasonable request by Agent or
Determining Lenders (through Agent), information (not otherwise required to
be furnished under the Loan Documents) respecting the business affairs,
assets, and liabilities of any Company and opinions, certifications, and
documents in addition to those mentioned in this agreement.
7.2 USE OF PROCEEDS. Borrower shall use the proceeds of Borrowings only
for the purposes represented in this agreement.
7.3 BOOKS AND RECORDS. Each Company shall maintain books, records, and
accounts necessary to prepare Financials in accordance with GAAP.
7.4 INSPECTIONS. Upon reasonable request, each Company shall allow Agent,
any Lender, or their respective Representatives to inspect any of its
properties, to review reports, files, and other records and to make and take
away copies, to conduct tests or investigations, and to discuss any of its
affairs, conditions, and finances with its directors, officers, employees, or
representatives from time to time during reasonable business hours.
40 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
7.5 TAXES. Each Company shall promptly pay when due any and all Taxes
other than Taxes of which the failure to pay is not a Material-Adverse Event or
which are being contested in good faith by lawful proceedings diligently
conducted, against which reserve or other provision required by GAAP has been
made, and in respect of which levy and execution of any Lien have been and
continue to be stayed.
7.6 EXPENSES. Borrower shall pay (a) all reasonable legal fees and
expenses incurred by Agent in connection with the preparation, negotiation, and
execution of the Loan Documents, (b) all reasonable legal fees and expenses
incurred by Agent in connection with each separate future amendment, consent,
waiver, or approval executed in connection with any Loan Document, (c) all fees,
charges, or Taxes for the recording or filing of any Loan Document to create or
perfect Lender Liens, (d) all other reasonable out-of-pocket expenses of Agent
or any Lender in connection with the preparation, negotiation, execution, or
administration of the Loan Documents -- including, without limitation, courier
expenses incurred in connection with the Mortgage Collateral, (e) all amounts
expended, advanced, or incurred by Agent or any Lender to satisfy any obligation
of any Company under any Loan Document, to collect the Obligation, or to enforce
the Rights of Agent or any Lender under any Loan Document -- including, without
limitation, all court costs, attorneys' fees (whether for trial, appeal, other
proceedings, or otherwise), fees of auditors and accountants, and investigation
expenses reasonably incurred by Agent or any Lender in connection with any such
matters, (f) interest at an annual interest rate equal to the Default Rate on
each item specified in CLAUSES (A) through (E) above from 30 days after the date
of written demand or request for reimbursement to the date of reimbursement, and
(g) any and all stamp and other Taxes payable or determined to be payable in
connection with the execution, delivery, or recordation of any Loan Document --
IN CONNECTION WITH WHICH BORROWER SHALL INDEMNIFY AND SAVE AGENT AND EACH LENDER
HARMLESS FROM AND AGAINST ANY AND ALL LIABILITIES WITH RESPECT TO OR RESULTING
FROM ANY DELAY IN PAYING OR OMISSION TO PAY THOSE TAXES TO THE EXTENT THOSE
LIABILITIES ARISE SOLELY BECAUSE BORROWER FAILED TO PAY THE TAXES UPON DEMAND BY
AGENT OR ANY LENDER, WHICH INDEMNITY SURVIVES THE PAYMENT AND PERFORMANCE OF THE
OBLIGATION AND TERMINATION OF THE LOAN DOCUMENTS.
7.7 MAINTENANCE OF EXISTENCE, ASSETS, AND BUSINESS. Each Company shall
(a) except as permitted by SECTION 8.5, maintain its corporate existence and
good standing in its state of incorporation and its authority to transact
business in all other states where failure to maintain its authority to transact
business is a Material-Adverse Event, and (b) maintain all licenses, permits,
and franchises necessary for its business where failure to do so is a Material-
Adverse Event -- including, without limitation, Borrower's eligibility as
lender, seller/servicer, and issuer as described in SECTION 6.16(B).
7.8 INSURANCE. Borrower shall (a) maintain with financially sound and
reputable insurers, insurance with respect to its assets and business against
such liabilities, casualties, risks, and contingencies and in such types and
amounts -- including, without limitation, a fidelity bond or bonds in form and
with coverage, with a company, and with respect to such individuals or groups of
individuals -- as satisfy prevailing FNMA, FHLMC, and GNMA requirements
applicable to a qualified mortgage institution and otherwise as is customary in
the case of Persons engaged in the same or similar businesses and similarly
situated, and (b) upon Agent's request, furnish to Agent from time to time (i) a
summary of its insurance coverage, in form and substance satisfactory to Agent,
and (ii) originals or copies of the applicable policies.
7.9 TAKE-OUT COMMITMENTS. Borrower shall perform and observe in all
material respects each of the provisions of each Take-Out Commitment on its part
to be performed or observed and cause all things to be done that are necessary
to have each item of Mortgage Collateral and the Collateral Documents covered by
a Take-Out Commitment to comply with its requirements.
7.10 APPRAISALS. Borrower shall promptly (a) permit Agent's and any
Lender's authorized Representatives to discuss with Borrower's officers or with
the appraisers furnishing Appraisals the procedures
41 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
for preparation, review, and retention of -- and to review and obtain copies
of --all Appraisals pertaining to any Mortgage Collateral, and (b) upon Agent's
or any Lender's request, cooperate with it to ascertain that the Appraisals
comply with all Appraisal Laws.
7.11 INDEMNIFICATION. IN CONSIDERATION OF THE COMMITMENTS BY AGENT AND
LENDERS UNDER THE LOAN DOCUMENTS, BORROWER SHALL INDEMNIFY AND DEFEND EACH
AGENT, LENDER, AND THEIR RESPECTIVE AFFILIATES AND REPRESENTATIVES
(COLLECTIVELY, THE "INDEMNIFIED PARTIES") -- AND DEFEND THEM AND HOLD EACH OF
THEM HARMLESS -- AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES,
DEFICIENCIES, INTEREST, JUDGMENTS, COSTS, OR EXPENSES -- INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS' FEES -- INCURRED BY ANY OF THEM ARISING FROM
OR BECAUSE OF (A) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING BROUGHT OR
THREATENED IN CONNECTION WITH ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
BY THE LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, ANY USE BY EITHER COMPANY
OF THE PROCEEDS OF BORROWINGS, (B) ANY IMPOUNDMENT, ATTACHMENT, OR RETENTION OF
ANY MORTGAGE COLLATERAL OR ANY FAILURE OF ANY INVESTOR TO PAY THE ENTIRE
PURCHASE PRICE OF ANY MORTGAGE COLLATERAL UNDER ANY TAKE-OUT COMMITMENT, (C) ANY
ALLEGED VIOLATION OF ANY FEDERAL OR STATE LAW RELATING TO USURY IN CONNECTION
WITH ANY MORTGAGE COLLATERAL, AND (D) ANY REPRESENTATION MADE BY ANY COMPANY
UNDER ANY LOAN DOCUMENT. ALTHOUGH EACH INDEMNIFIED PARTY IS ENTITLED TO
INDEMNIFICATION FOR ANY INDEMNIFIED PARTY'S ORDINARY NEGLIGENCE, NO INDEMNIFIED
PARTY IS ENTITLED TO INDEMNIFICATION FOR ITS OWN GROSS NEGLIGENCE, WILLFUL
MISCONDUCT, OR FRAUD. THIS INDEMNITY SURVIVES THE PAYMENT AND PERFORMANCE OF
THE OBLIGATION AND TERMINATION OF THE LOAN DOCUMENTS.
SECTION 8. NEGATIVE COVENANTS. Until all commitments by Lenders to extend
credit under this agreement have been canceled or terminated and the Obligation
is fully paid and performed, Borrower covenants and agrees with Agent and
Lenders as follows:
8.1 DEBT. No Company may directly or indirectly create, incur, permit to
exist, or commit to create or incur (a) any Wet Borrowings except in connection
with this agreement or in connection with any Permitted Debt whose description
specifically allows for Wet Borrowings, (b) any mortgage loan repurchase
agreements (except in connection with any Permitted Debt whose description
specifically allows for mortgage loan repurchase agreements or as otherwise
permitted by Agent in writing), or (c) any other Debt except the following
(collectively, the "PERMITTED DEBT"):
(i) Obligations to pay Taxes.
(ii) Liabilities for accounts payable, non-capitalized equipment
or operating leases, and similar liabilities if in each case incurred
in the ordinary course of business.
(iii) Accrued expenses, deferred credits, and loss contingencies
that are properly classified as liabilities under GAAP.
(iv) The Obligation.
(v) Up to $825,000 in Debt (including related letters of credit
and reimbursement agreements) under a municipal bond financing
facility with Colorado National Bank.
(vi) Up to $1,235,000 in Debt under a land acquisition loan from
First Security Bank.
42 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
(vii) Up to $1,600,000 in Debt under a model-home financing
facility with Argo Federal Savings Bank.
(viii) Up to $679,495 in Debt (but not warehouse-type Debt) under a
facility with ▇▇▇▇▇-▇▇▇▇▇▇▇ (American Strategic Income Portfolio,
Inc.) as that amount may be reduced but not increased at any time on
or after the Closing Date.
(ix) Debt under a Revolving Subordinated Loan Agreement between
Borrower and Guarantor, providing (in terms acceptable to lender) that
any liabilities arising under the Revolving Subordinated Loan
Agreement are expressly subordinated to the Obligation.
(x) Debt (other than the above) incurred after the date of this
agreement, never to exceed $250,000 unless approved by Agent in
writing.
8.2 LIENS. No Company may (a) create, incur, permit to exist, enter into,
or commit to enter into any arrangement or agreement (except the Loan Documents)
that directly or indirectly prohibits any Company from creating or incurring any
Lien on any of its assets, or (b) create, incur, permit to exist, or commit to
create or incur any Lien on any of its assets except the following
(collectively, the "PERMITTED LIENS"):
(i) Any interest or title of a lessor in assets being leased
under any non-capitalized equipment or operating lease.
(ii) Pledges or deposits that (a) do not encumber any Collateral
and (b) are made to secure payment of workers' compensation,
unemployment insurance, or other forms of governmental insurance or
benefits or to participate in any fund in connection with workers'
compensation, unemployment insurance, pensions, or other social
security programs.
(iii) Good-faith pledges or deposits that (a) do not cover any
Collateral and (b) are either (i) not in excess of 10% (excluding
deposits put down for servicing portfolio purchases in the ordinary
course of business) of the amounts due under, and made to secure,
either Company's performance of bids, tenders, contracts (other than
for the repayment of borrowed money), or leases, or (ii) made to
secure statutory obligations, surety or appeal bonds, or indemnity,
performance, or other similar bonds benefitting any Company in the
ordinary course of its business.
(iv) Zoning and similar restrictions on the use of real property
that do not materially impair the use of the real property and that
are not violated by existing or proposed structures or land use.
(v) The following if no Lien has been filed in any jurisdiction
or agreed to: (a) Liens for Taxes not yet due and payable and (b) if,
to the extent they cover any Collateral, they are subordinate to the
Lender Liens in form and substance reasonably acceptable to Agent (c)
mechanic's Liens and materialman's Liens for services or materials for
which payment is not yet due and payable and (d) landlord's Liens for
rent not yet due and payable.
(vi) The following if the validity or amount thereof is being
contested in good faith and by appropriate and lawful proceedings
diligently conducted, reserve or other appropriate provision (if any)
required by GAAP has been made, levy and execution continue to be
stayed, any of which covering any Collateral must be subordinate to
the Lender Liens
43 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
in form and substance reasonably acceptable to Agent, and any of which
do not in the aggregate materially detract from the value of the
property of the Company in question, or materially impair the use of
that property in the operation of its business: (a) claims and Liens
for Taxes due and payable; (b) claims and Liens upon, and defects of
title to, real or personal property (other than any Collateral),
including any attachment of personal or real property or other legal
process before adjudication of a dispute on the merits; (c) claims and
Liens of mechanics, materialmen, warehousemen, carriers, landlords, or
other like Liens; and (d) adverse judgments or orders on appeal for
the payment of money.
(vii) Lender Liens.
(viii) Liens (a) evidenced by any financing statements reflected
in any UCC Search Reports described on SCHEDULE 5 to the extent that
they are not required to be terminated, partially released, amended,
or subordinated as reflected in the conditions in SCHEDULE 5 or (b)
securing Permitted Debt.
8.3 LOANS, ADVANCES, AND INVESTMENTS. No Company may make or commit to
make any loan, advance, extension of credit, or capital contribution to, make or
commit to make any investment in, or purchase or commit to purchase any stock or
other securities or evidences of Debt of, or interests in, any other Person
except the following (collectively, "PERMITTED LOANS/INVESTMENTS"):
(i) Extensions of trade credit and other payables in the
ordinary course of business.
(ii) Loans and advances to officers or employees of any Company
that are (a) in the ordinary course of business for travel,
entertainment, or relocation or (b) not in the ordinary course and are
never more than a total outstanding of (i) $50,000 for any one
officer, director, or employee or (ii) $50,000 for all of the
Companies.
(iii) Mortgage Loans and Mortgaged Securities originated or
acquired by Borrower in the ordinary course of its business.
(iv) Acquisition of securities or evidences of Debt of others
when acquired by Borrower in settlement of accounts receivable or
other Debts arising in the ordinary course of business so long as the
total of all of those securities or evidences of Debt is not material
to Borrower's financial condition.
(v) Investments in obligations, with maturities of one year or
less, issued or unconditionally guaranteed by -- or issued by any of
its agencies and backed by the full faith and credit of -- the United
States of America.
(vi) Demand deposit accounts maintained in the ordinary course
of business.
(vii) Certificates of deposit issued by (a) any Lender or (b) any
other commercial bank organized under the Laws of the United States of
America or one of its states that has combined capital, surplus, and
undivided profits of at least $250,000,000 and a rating of C or better
by ▇▇▇▇▇▇▇▇ Bank Watch, Inc.
(viii) Eurodollar investments with (a) any Lender or (b) any other
financial institution that has (i) combined capital, surplus, and
undivided profits of at least
44 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
$100,000,000 and (ii) a commercial-paper rating of at least P-1 or A-1
or (if it does not have a commercial-paper rating) a bond rating of at
least A-1 or A- by ▇▇▇▇▇'▇ Investors Service, Inc., or Standard &
Poor's Corporation, respectively.
(ix) Investments in commercial paper (a) having a maturity of
one year or less and (b) given the highest rating by a nationally-
recognized-credit-rating agency.
(x) Investments in municipal bonds acquired on or before the
Closing Date.
(xi) An investment in real property in Ft. ▇▇▇▇▇▇, Colorado,
valued at approximately $1,431,306.
(xii) Investments in Pulte Corporation model homes, valued at no
more than $2,000,000.
(xiii) Other loans, advances, or investments, so long as the
aggregate amount outstanding (defined as the amount of any such loans
or advances plus the cost of any such investments) is never more than
$100,000 at any one time.
At no time may the aggregate market value of all Permitted Loans/Investments
(other than Mortgage Loans and Mortgage Securities described in SECTION 8.3(III)
above) exceed an aggregate value of more than $6,000,000).
8.4 DISTRIBUTIONS. Borrower may not directly or indirectly pay or declare
any Distribution during any fiscal year except (a) dividends payable solely in
the form of capital stock, (b) cash distributions to Borrower's shareholders in
an amount not to exceed 50% of Borrower's net cash income (after adjustments for
non-cash income and cash taxes) so long as no Default or Potential Default
exists or would be created by the Distribution or (c) Distributions otherwise
approved in writing by Agent.
8.5 MERGER OR CONSOLIDATION. No Company may directly or indirectly merge
or consolidate with or into any other Person except that any Company may merge
into or be consolidated with any other Company so long as Borrower is the
surviving corporation if it is involved.
8.6 LIQUIDATIONS AND DISPOSITIONS OF ASSETS. No Company may directly or
indirectly dissolve or liquidate or sell, transfer, lease, or otherwise dispose
of any material portion of its assets or business except for sales or other
dispositions by Borrower, in the ordinary course of business, of (a) subject to
SECTION 9, part of its Servicing Portfolio, or (b) subject to SECTION 4,
Mortgage Loans, Mortgage Securities, or Servicing Receivables that are
Collateral, or (c) Mortgage Loans, Mortgage Securities, or Servicing Receivables
that are not Collateral.
8.7 USE OF PROCEEDS. Borrower may not directly or indirectly use the
proceeds of Borrowings (a) for any purpose other than as represented in this
agreement, (b) for the funding or acquisition of construction or commercial
loans, (c) for wages of employees, unless a timely payment to or deposit with
the United States of America of all amounts of Tax required to be deducted and
withheld with respect to such wages is also made, or (d) in violation of
Regulation U or (S) 7 of the Securities Exchange Act of 1934.
8.8 TRANSACTIONS WITH AFFILIATES. No Company may directly or indirectly
enter into any transaction with any of its Affiliates other than transactions in
the ordinary course of business or upon fair and reasonable terms not materially
less favorable than it could obtain or could become entitled to in an arm's-
length transaction with a Person that was not its Affiliate.
45 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
8.9 EMPLOYEE PLANS. Except where a Material-Adverse Event would not
result, no Company may directly or indirectly permit any of the events or
circumstances described in SECTION 6.12 to exist or occur.
8.10 COMPLIANCE WITH LAWS AND DOCUMENTS. No Company may directly or
indirectly (a) violate the provisions of any Laws applicable to it or of any
Material Agreement to which it is a party if that violation alone or with all
other violations is a Material-Adverse Event or (b) violate the provisions of
its charter or bylaws or repeal, replace or amend any provision of its charter
or bylaws if any such action is a Material-Adverse Event.
8.11 GOVERNMENT REGULATIONS. No Company may directly or indirectly conduct
its business in a way that it becomes regulated under the Investment Company Act
of 1940.
8.12 FISCAL YEAR ACCOUNTING. No Company may directly or indirectly change
its fiscal year nor use any accounting method other than GAAP.
8.13 NEW BUSINESSES. No Company may directly or indirectly engage in any
business except the businesses in which it or any of its Affiliates is presently
engaged and any other reasonably-related business.
8.14 ASSIGNMENT. No Company may directly or indirectly assign or transfer
any of its Rights, duties, or obligations under any of the Loan Documents.
8.15 OTHER FACILITIES. No Company may directly or indirectly receive
advances under any other warehouse- or servicing-type facility except as
provided in this agreement or as approved in writing by Agent.
SECTION 9. FINANCIAL COVENANTS. Until all commitments by Lenders to extend
credit under this agreement have been canceled or terminated and the Obligation
is fully paid and performed, Borrower covenants and agrees with Agent and
Lenders as follows:
9.1 NET WORTH.
(a) The Companies' Net Worth may never be less than the sum of (i)
$10,000,000 plus (ii) 100% of all contributions to any Company's
stockholders' equity made on or after December 31, 1996, plus (iii) 50% of
the Companies' Net Income for each fiscal quarter ending after December 31,
1996, and added to the Companies' required Net Worth on the last day of
each successive fiscal quarter (provided that if the Companies' Net Income
for any fiscal quarter is less than $0, then the incremental amount added
to the Companies' required Net Worth for that fiscal quarter shall be $0).
(b) The Companies' Adjusted-Net Worth may never be less than the sum
of (i) $12,000,000, plus (ii) 100% of all contributions to any Company's
stockholders' equity made on or after December 31, 1996, plus (iii) 50% of
the Companies' Net Income for each fiscal quarter ending after December 31,
1996, and added to the Companies' required Adjusted-Net Worth on the last
day of each successive fiscal quarter (provided that if the Companies' Net
Income for any fiscal quarter is less than $0, then the incremental amount
added to the Companies' required Adjusted-Net Worth for that fiscal quarter
shall be $0).
(c) The Companies' Adjusted-Tangible-Net Worth may never be less than
the sum of (i) $10,000,000, plus (ii) 100% of all contributions to any
Company's stockholders' equity made on or after December 31, 1996, plus
(iii) 50% of the Companies' Net Income for each fiscal quarter ending after
December 31, 1996, and added to the Companies' required Adjusted-Tangible-
Net Worth on the
46 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
last day of each successive fiscal quarter (provided that if the Companies'
Net Income for any fiscal quarter is less than $0, then the incremental
amount added to the Companies' required Adjusted-Tangible-Net Worth for
that fiscal quarter shall be $0).
9.2 LEVERAGE. The ratio of the Companies' Total-Adjusted Debt to
Adjusted-Tangible-Net Worth may never exceed 8.0 to 1.0.
9.3 CASH FLOW. The ratio of the Companies' historical Cash Flow to
historical CMLTD may never be less than 1.3 to 1.0 at the end of any 4-quarter
period, calculated as of the last day of each Calendar Quarter.
9.4 SERVICING PORTFOLIO. The Servicing Portfolio may never be less
than (a) $2,000,000,000 on or after June 30, 1997, so long as the "▇▇▇▇▇▇▇▇▇▇"
acquisition has occurred and (b) $1,500,000,000 at all other times. Agency
servicing must represent a minimum of 65% of the total Servicing Portfolio.
9.5 DEBT TO SERVICING PORTFOLIO.
(a) The Principal Debt of Term-Line Borrowings may never exceed
the lesser of either (i) 1.25% of the unpaid principal balance of the
Servicing Portfolio, or (ii) 70% of the Appraised Value of the Servicing
Portfolio.
(b) The Principal Debt of Working-Capital Borrowings and Term-
Line Borrowings may never exceed the lesser of either (i) 1.25% of the
unpaid principal balance of the Servicing Portfolio, or (ii) 95% of the
Appraised Value of the Servicing Portfolio.
SECTION 10. DEFAULTS AND REMEDIES.
10.1 DEFAULT. The term "DEFAULT" means the existence or occurrence of
any one or more of the following:
(A) OBLIGATION. Borrower fails to pay (i) any interest on the
Obligation when due under the Loan Documents and that failure continues for
five days or (ii) any other part of the Obligation when due under the Loan
Documents.
(B) COVENANTS. Any Company fails to punctually and properly
perform, observe, and comply with any (i) any covenant, agreement, or
condition under SECTIONS 8 or 9 or (ii) any covenant, agreement, or
condition contained in any of the Loan Documents -- other than covenants to
pay the Obligation and the covenants listed in CLAUSE (I) above and that
failure continues for a period of 15 calendar days after any Company has,
or, with the exercise of reasonable investigation, should have, notice of
it.
(C) MISREPRESENTATION. Any material statement, warranty, or
representation by or on behalf of any Company or Guarantor in any Loan
Document or other writing authored by any Company or Guarantor and
furnished in connection with the Loan Documents, proves to have been
incorrect or misleading in any material respect as of the date made or
deemed made.
(D) DEBTOR LAW. Any Company or Guarantor (i) is not Solvent,
(ii) fails to pay its Debts generally as they become due, (iii) voluntarily
seeks, consents to, or acquiesces in the benefit of any Debtor Law, or (iv)
becomes a party to or is made the subject of any proceeding provided for by
any Debtor Law -- other than as a creditor or claimant -- that could
suspend or otherwise adversely affect
47 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
the Rights of Agent or any Lender granted in the Loan Documents unless, if
the proceeding is involuntary, the applicable petition is dismissed within
60 days after its filing.
(E) OTHER DEBT. Any Company or Guarantor fails to make any
payment due on any Debt or security (with respect to which any Company or
Guarantor has redemption, sinking fund, or other purchase obligations) or
any event occurs or any condition exists in respect of any Debt or security
of any Company or Guarantor, the effect of which is (i) to cause or to
permit any holder of that Debt or security or a trustee to cause (whether
or not it elects to cause) any of that Debt or security to become due
before its stated maturity or its regularly scheduled payment dates, or
(ii) to permit a trustee or the holder of any security (other than common
stock of any Company or Guarantor) to elect (whether or not it does elect)
a majority of the directors on the board of directors of that Company or
Guarantor.
(F) JUDGMENTS. Any Company or Guarantor fails to pay any money
judgment against it at least ten days prior to the date on which any of the
assets of that Company or Guarantor may be lawfully sold to satisfy that
judgment.
(G) ATTACHMENTS. The failure to have discharged within a period
of 30 days after the commencement of any attachment, sequestration, or
similar proceeding against any of the assets of any Company or Guarantor.
(H) UNENFORCEABILITY. Any material provision of any Loan
Document for any reason ceases to be in full force and effect or is fully
or partially declared null and void or unenforceable or the validity or
enforceability of any Loan Document is challenged or denied by any Company.
(I) CHANGE OF CONTROL. Any (i) material change in the ownership
or management of Borrower or any Guarantor from that ownership and
management as it exists on the date of this agreement or (ii) failure to
provide advance notice of any change in ownership or management.
(J) AGENCY QUALIFICATIONS. (i) Borrower fails to meet any GNMA
seller or servicing standard or requirement that is a Material-Adverse
Event, (ii) GNMA revokes or terminates Borrower's Right to service for
GNMA, (iii) GNMA issues a letter of extinguishment under any GNMA guaranty
agreement, (iv) Borrower ceases to be an eligible issuer or servicer for
either FNMA or FHLMC, (v) FNMA or FHLMC impose any sanctions upon Borrower
resulting in a Material-Adverse Event, (vi) FNMA or FHLMC terminate or
revoke Borrower's Right to service for FNMA or FHLMC, or (vii) FNMA or
FHLMC initiate any transfer of servicing from Borrower.
(K) LCS. Agent is served with, or becomes subject to, a court
order, injunction, or other process or decree restraining or seeking to
restrain it from paying any amount under any LC and either (a) a drawing
has occurred under the LC, and Borrower has refused to reimburse Agent for
payment, or (b) the expiration date of the LC has occurred, but the Right
of the beneficiary to draw under the LC has been extended past the
expiration date in connection with the pendency of the related court action
or proceeding, and Borrower has failed to deposit with Agent cash
collateral in an amount equal to Agent's maximum exposure under the LC.
10.2 REMEDIES.
(A) DEBTOR LAW. Upon the occurrence of a Default under SECTION
10.1(D), the commitments of Lenders to extend credit under this agreement
automatically terminate and the full Obligation is automatically due and
payable, without presentment, demand, notice of default, notice
48 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
of the intent to accelerate, notice of acceleration, or other requirements
of any kind, all of which are expressly waived by Borrower.
(B) OTHER DEFAULTS. While a Default exists -- other than those
described in CLAUSE (A) above -- Agent may and, upon the direction of
Determining Lenders, shall declare the Obligation to be immediately due and
payable, whereupon it shall be due and payable, whereupon the commitments
of Lenders to extend credit under this agreement are then automatically
terminated.
(C) OTHER REMEDIES. Following the termination of the
commitments of Lenders to extend credit under this agreement and the
acceleration of the Obligation, Agent may (and, at the direction of
Determining Lenders, shall) do any one or more of the following: (i) Reduce
any claim to judgment; (ii) foreclose upon or otherwise enforce any Lender
Liens; (iii) demand payment of an amount equal to the LC Exposure then
existing and retain as collateral for the LC Exposure any amounts received
from any Company or from any property of any Company, through offset, or
otherwise; and (iv) exercise any other Rights in the Loan Documents, at
Law, in equity, or otherwise that Determining Lenders may direct. Should
any Default continue that, in Agent's opinion, materially and adversely
affects the Collateral or the interests of the Lenders under this
agreement, Agent may, in a notice to the Lenders of that Default set forth
one or more actions that Agent, in its opinion, believes should be taken.
Unless otherwise directed by Determining Lenders (excluding the Lender
serving as Agent) within ten days following the date of the notice setting
forth the proposed action or actions, Agent may, but shall not be obligated
to, take the action or actions set forth in that notice.
10.3 RIGHT OF OFFSET. Borrower hereby grants to Agent and to each
Lender a right of offset, to secure the repayment of the Obligation, upon any
and all monies, securities, or other property of Borrower, and the proceeds
therefrom now or hereafter held or received by or in transit to Agent or such
Lender from or for the account of Borrower, whether for safekeeping, custody,
pledge, transmission, collection, or otherwise, and also upon any and all
deposits (general or special, time or demand, provisional or final) and credits
of Borrower, and any and all claims of Borrower against Agent or such Lender, at
any time existing. Upon the occurrence of any Default, Agent and each Lender are
authorized at any time and from time to time, without notice to either Company,
to offset, appropriate, and apply any and all of those items against the
Obligation, subject to SECTION 3.6. Notwithstanding anything in this section or
elsewhere in this agreement to the contrary, neither Agent nor any other Lender
shall have any right to offset, appropriate, or apply any accounts of Borrower
which consist of escrowed funds (except and to the extent of any beneficial
interest which Borrower have in such escrowed funds) which have been so
identified by any Company in writing at the time of deposit thereof.
10.4 WAIVERS. Borrower waives any right to require Agent to (a)
proceed against any Person, (b) proceed against or exhaust any of the Collateral
or pursue its Rights and remedies as against the Collateral in any particular
order, or (c) pursue any other remedy in its power. Agent shall not be required
to take any steps necessary to preserve any Rights of any Company against any
Person from which any Company purchased any Mortgage Loans or to preserve Rights
against prior parties. Borrower and each surety, endorser, guarantor, pledgor,
and other party ever liable or whose property is ever liable for payment of any
of the Obligation jointly and severally waive presentment and demand for
payment, protest, notice of intention to accelerate, notice of acceleration, and
notice of protest and nonpayment, and agree that their or their property's
liability with respect to the Obligation, or any part thereof, shall not be
affected by any renewal or extension in the time of payment of the Obligation,
by any indulgence, or by any release or change in any security for the payment
of the Obligation, and hereby consent to any and all renewals, extensions,
indulgences, releases, or changes, regardless of the number thereof.
49 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
10.5 PERFORMANCE BY AGENT. Should any covenant, duty, or agreement of
any Company fail to be performed in accordance with the terms of this agreement
or of any document delivered under this agreement, Agent may, at its option,
after notice to Borrower, as the case may be, perform, or attempt to perform,
such covenant, duty, or agreement on behalf of that Company and shall notify
each Lender that it has done so. In such event, Borrower shall jointly and
severally, at the request of Agent, promptly pay any amount expended by Agent in
such performance or attempted performance to Agent at its principal place of
business, together with interest thereon at the Maximum Rate from the date of
such expenditure by Agent until paid. Notwithstanding the foregoing, it is
expressly understood that Agent does not assume and shall never have, except by
express written consent of Agent, any liability or responsibility for the
performance of any duties of any Company under this agreement or under any other
document delivered under this agreement.
10.6 NO RESPONSIBILITY. Except in the case of fraud, gross
negligence, or willful misconduct, neither Agent nor any of its officers,
directors, employees, or attorneys shall assume -- or ever have any liability or
responsibility for --any diminution in the value of the Collateral or any part
of the Collateral.
10.7 NO WAIVER. The acceptance by Agent or any Lender at any time and
from time to time of partial payment or performance by any Company of any of
their respective obligations under this agreement or under any Loan Document
shall not be deemed to be a waiver of any Default then existing. No waiver by
Agent or any Lender shall be deemed to be a waiver of any other then existing or
subsequent Default. No delay or omission by Agent or any Lender in exercising
any right under this agreement or under any other document required to be
executed under or in connection with this agreement shall impair such right or
be construed as a waiver thereof or any acquiescence therein, nor shall any
single or partial exercise of any such right preclude other or further exercise
thereof, or the exercise of any other right under this agreement or otherwise.
10.8 CUMULATIVE RIGHTS. All Rights available to Agent and the Lenders
under this agreement or under any other document delivered under this agreement
shall be cumulative of and in addition to all other Rights granted to Agent and
the Lenders at Law or in equity, whether or not the Notes be due and payable and
whether or not Agent shall have instituted any suit for collection, foreclosure,
or other action in connection with this agreement or any other document
delivered under this agreement.
10.9 RIGHTS OF INDIVIDUAL LENDERS. No Lender shall have any right by
virtue of, or by availing itself of, any provision of this agreement to
institute any actions or proceedings at Law, in equity, or otherwise (excluding
any actions in bankruptcy), upon or under or with respect to this agreement, or
for the appointment of a receiver, or for any other remedy under this agreement,
unless (a) the Determining Lenders previously shall have given to Agent written
notice of a Default and the continuance thereof, including a written request
upon Agent to institute such action or proceedings in its own name and offering
to indemnify Agent against the costs, expenses and liabilities to be incurred
therein or thereby, (b) Agent, for ten Business Days after its receipt of such
notice, shall have failed to institute any such action or proceeding, and (c) no
direction inconsistent with such written request shall have been given to Agent
by Determining Lenders. It is understood and intended, and expressly covenanted
by the taker and holder of every Note with every other taker and holder and
Agent, that no one or more holders of Notes shall have any right in any manner
whatever by virtue, or by availing itself, of any provision of this agreement to
affect, disturb or prejudice the Rights of any other Lenders, or to obtain or
seek to obtain priority over or preference to any other such Lender, or to
enforce any right under this agreement, except in the manner herein provided and
for the equal, ratable and common benefit of all Lenders. For the protection
and enforcement of the provisions of this SECTION 10.9, each and every Lender
and Agent shall be entitled to such relief as can be given either at law or in
equity.
50 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
10.10 NOTICE TO AGENT. Should any Default or Potential Default occur
and be continuing, any Lender having actual knowledge thereof shall notify Agent
and Borrower of the existence thereof, but the failure of any Lender to provide
that notice shall not prejudice that Lender's Rights under this agreement.
10.11 COSTS. All court costs, reasonable attorneys' fees, other costs
of collection, and other sums spent by Agent or any Lender in the exercise of
any Right provided in any Loan Document is payable to Agent or that Lender, as
the case may be, on demand, is part of the Obligation, and bears interest at the
Default Rate from the date paid by Agent or any Lender to the date repaid by
Borrower.
SECTION 11 AGENT.
11.1 AUTHORIZATION AND ACTION. Each Lender hereby appoints Agent as
Agent under the Loan Documents and authorizes Agent to take such action on its
behalf and to exercise such powers and perform such duties as are expressly
delegated to Agent by the terms of the Loan Documents, together with such powers
as are reasonably incidental thereto. As to any matter not expressly provided
for by this agreement (including, without limitation, enforcement or collection
of the Notes), Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
Lenders, and those instructions shall be binding upon all Lenders and all
holders of the Notes. However, that Agent shall not be required to take any
action that exposes Agent to personal liability or that is contrary to this
agreement or applicable Laws. Agent agrees to give to each Lender prompt notice
of each notice given to it by Borrower pursuant to the terms of the Loan
Documents.
11.2 AGENT'S RELIANCE, ETC. Notwithstanding anything to the contrary
in any Loan Document, neither Agent nor any of its Representatives shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with the Loan Documents, except for its or their own gross negligence
or willful misconduct. Without limitation of the generality of the foregoing,
Agent: (a) May treat the payee of any Note as the holder thereof; (b) may
consult with legal counsel (including counsel for Borrower), independent public
accountants and other experts selected by it or Borrower and shall not be liable
for any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts; (c) makes no warranty
or representation to any Lender and shall not be responsible to any Lender for
any statements, warranties, or representations made in or in connection with the
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
agreement on the part of Borrower or to inspect the property (including the
books and records) of Borrower, except receipt of delivery of the items required
under SECTIONS 3.2, 4.1, 4.3, and 7.1; (e) shall not be responsible to any
Lender for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this agreement or any other instrument or document
furnished pursuant hereto; and (f) shall incur no liability under or in respect
of this agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopy) believed by it to be genuine
and signed or sent by the proper party or parties.
11.3 AGENT AND AFFILIATES. With respect to Borrowings made by it, and
the one or more Notes issued to it, Agent shall have the same rights and powers
under this agreement and the other Loan Documents as any other Lender and may
exercise the same as though it were not the Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include Agent in its
individual capacity. Agent and the Affiliates of Agent may accept deposits from,
lend money to, act as trustee under indentures of, and generally engage in any
kind of business with, Borrower, any of its Affiliates and any Person who may do
business with or own securities of Borrower or any of its Affiliates, all as if
Agent was not Agent and without any duty to account therefor to Lenders.
51 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
11.4 CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender, and based on
the financial statements referred to in SECTIONS 6.6 and 7.1 of this agreement
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter this agreement. Each Lender also
acknowledges that it will, independently and without reliance upon Agent or any
Lender, and based on such documents and information as it shall deem appropriate
at the time, make its own credit decisions in taking or not taking action under
this agreement.
11.5 INDEMNIFICATION. LENDERS SHALL INDEMNIFY AGENT (TO THE EXTENT
NOT REIMBURSED BY BORROWER), RATABLY ACCORDING TO THEIR RESPECTIVE COMMITMENT
PERCENTAGES, FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS OF ANY
KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED
AGAINST AGENT IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY
ACTION TAKEN OR OMITTED BY AGENT UNDER THIS AGREEMENT (INCLUDING ANY OF SAME
WHICH MAY RESULT FROM THE NEGLIGENCE, BUT NOT GROSS NEGLIGENCE, OF AGENT).
HOWEVER, NO LENDER SHALL BE LIABLE FOR ANY PORTION OF THOSE LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES, OR DISBURSEMENTS RESULTING FROM AGENT'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, EACH LENDER SHALL REIMBURSE
AGENT PROMPTLY UPON DEMAND FOR ITS RATABLE SHARE OF ANY OUT-OF-POCKET EXPENSES
(INCLUDING COUNSEL FEES) INCURRED BY AGENT IN CONNECTION WITH THE PREPARATION,
EXECUTION, DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT, OR ENFORCEMENT
(WHETHER THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL
ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THIS AGREEMENT, TO THE
EXTENT THAT AGENT IS NOT REIMBURSED FOR SUCH EXPENSES BY BORROWER.
11.6 SUCCESSOR AGENT. Agent may resign at any time by giving written
notice thereof to Lenders and Borrower and may be removed at any time with or
without cause by 100% of Lenders. Upon any such resignation or removal, 100% of
Lenders shall have the right to appoint a successor Agent in the capacity of
Agent. If no successor Agent shall have been so appointed by 100% of Lenders,
and shall have accepted such appointment, within 30 days after the retiring
Agent's giving of notice of resignation or the Lenders' removal of the retiring
Agent, then the retiring Agent may, on behalf of Lenders, appoint a successor
Agent, which shall be a commercial bank or savings bank organized under the laws
of the United States of America or of any state thereof which has a combined
capital and surplus of at least $200,000,000. 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 any further duties, and obligations under this agreement. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this agreement. The appointment of a
successor Agent shall not release the retiring Agent from any liability it may
have for any actions taken or omitted to be taken by it while it was Agent under
this agreement.
11.7 INSPECTION. Agent shall permit any officer, employee, agent of
Borrower or any Lender which may so request to visit and inspect the premises on
which the custodial duties of Agent hereunder are performed, examine the books
and records of Agent which pertain to such custodial duties, take copies and
extracts therefrom, and discuss the performance of such custodial duties with
the officers, accountants and auditors of Agent that are responsible therefor,
all at such reasonable times and as often as Borrower or any Lender may desire.
52 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
SECTION 12. MISCELLANEOUS.
12.1 NONBUSINESS DAYS. Any action that is due under any Loan Document
on a non-Business Day may be delayed until the next Business Day. However,
interest accrues on any payment until it is made.
12.2 COMMUNICATIONS. Unless otherwise stated, a communication under
any Loan Document to a party to this agreement must be written to be effective
and is deemed given:
. For Borrowing Requests, Collateral Delivery-Notices, Shipping
Requests, and Release Requests, only when actually received by Agent.
. Otherwise, if by fax, when transmitted to the appropriate fax number
-- but, without affecting the date deemed given, the fax must be
promptly confirmed by telephone.
. Otherwise, if by mail, on the third Business Day after enclosed in a
properly addressed, stamped, and sealed envelope deposited in the
appropriate official postal service.
. Otherwise, when actually delivered.
Until changed by written notice to each other party to this agreement, the
address and fax number are stated for (a) Borrower and Agent, beside their names
on the signature pages below, and (b) each Lender, beside its name on SCHEDULE
2.
12.3 FORM AND NUMBER OF DOCUMENTS. The form, substance, and number of
counterparts of each writing to be furnished under the Loan Documents must be
satisfactory to Agent and its counsel.
12.4 EXCEPTIONS TO COVENANTS. An exception to any Loan Document
covenant does not permit violation of any other Loan Document covenant.
12.5 SURVIVAL. All Loan Document provisions survive all closings and
are not affected by any investigation made by any party.
12.6 GOVERNING LAW. Unless otherwise stated, each Loan Document must
be construed -- and its performance enforced -- under the Laws of the State of
Texas and the United States of America.
12.7 INVALID PROVISIONS. If any provision of a Loan Document is
judicially determined to be unenforceable, all other provisions of it remain
enforceable. If the provision determined to be unenforceable is a material part
of that Loan Document, then, to the extent lawful, it shall be replaced by a
judicially-construed provision that is enforceable but otherwise as similar in
substance and content to the original provision as the context of it reasonably
allows.
12.8 CONFLICTS BETWEEN LOAN DOCUMENTS. The provisions of this
agreement control if in conflict (i.e., the provisions contradict each other as
opposed to a Loan Document containing additional provisions not in conflict)
with the provisions of any other Loan Document.
12.9 DISCHARGE AND CERTAIN REINSTATEMENT. Borrower's obligations
under the Loan Documents remain in full force and effect until no Lender has any
commitment to extend credit under the Loan Documents and the Obligation is fully
paid (except for provisions under the Loan Documents which by their terms
expressly survive payment of the Obligation and termination of the Loan
Documents). If any payment under
53 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
any Loan Document is ever rescinded or must be restored or returned for any
reason, then all Rights and obligations under the Loan Documents in respect of
that payment are automatically reinstated as though the payment had not been
made when due.
12.10 AMENDMENTS, CONSENTS, CONFLICTS, AND WAIVERS. An amendment of --
or an approval, consent, or waiver by Agent or by one or more Lenders under --
any Loan Document must be in writing and must be:
(A) BORROWER AND AGENT. Executed by Borrower and Agent if it
purports to reduce or increase any fees payable to Agent by Borrower.
(B) BORROWER, AGENT, AND ALL LENDERS. Executed by Borrower and
Agent and executed or approved in writing by all Lenders if action of all
Lenders is specifically provided in any Loan Document or if it purports to
(i) except as otherwise stated in this SECTION 12.10, extend the due date
or decrease the scheduled amount of any payment under -- or reduce the rate
or amount of interest, fees, or other amounts payable to Agent or any
Lender under -- any Loan Document, (ii) change the definition of Borrowing
Base (or any component of it), Commitment Percentage, Determining Lenders,
Market Value, Termination Percentage, Tranche A-Stated-Termination Date,
Tranche B-Stated-Termination Date or Warehouse-Stated-Termination Date, or
(iii) partially or fully release any Guaranty or any Collateral except
releases of Collateral contemplated in this agreement.
(C) BORROWER, AGENT, AND DETERMINING LENDERS. Otherwise (i) for
this agreement, executed by Borrower, Agent, and Determining Lenders, or
(ii) for other Loan Documents, approved in writing by Determining Lenders
and executed by Borrower, Agent, and any other party to that Loan Document.
No course of dealing or any failure or delay by Agent, any Lender, or any of
their respective Representatives with respect to exercising any Right of Agent
or any Lender under the Loan Documents operates as a waiver of that Right. An
approval, consent, or waiver is only effective for the specific instance and
purpose for which it is given. The Loan Documents may only be supplemented by
agreements, documents, and instruments delivered according to their respective
express terms.
12.11 MULTIPLE COUNTERPARTS. Any Loan Document may be executed in any
number of counterparts with the same effect as if all signatories had signed the
same document, and all of those counterparts must be construed together to
constitute the same document. This agreement is effective when counterparts of
it have been executed and delivered to Agent by each Lender, Agent, and
Borrower, or, in the case only of those Lenders, when Agent has received faxed
or other evidence satisfactory to it that each Lender has executed and is
delivering to Agent a counterpart of it.
12.12 PARTIES. This agreement binds and inures to Borrower, each
Lender, Agent, and their respective successors and permitted assigns. Only those
Persons may rely upon or raise any defense about this agreement.
(A) ASSIGNMENT BY COMPANIES. No Company may assign any Rights
or obligations under any Loan Document without first obtaining the written
consent of Agent and all Lenders.
(B) ASSIGNMENT BY LENDER. Any Lender may assign, pledge, and
otherwise transfer all or any of its Rights and obligations under the Loan
Documents either (i) to a Federal Reserve Bank without the consent of any
party to this agreement so long as that Lender is not released from its
obligations under the Loan Documents, or (ii) otherwise in the ordinary
course of its lending business
54 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
and in accordance with all Laws, and with SECTION 12.13 or 12.14 so long as
(A) except for assignments, pledges, and other transfers by a Lender to its
Affiliates, the written consent of Borrower and Agent, which may not be
unreasonably withheld, must be first obtained, (B) the assignment or
transfer (other than a pledge) does not involve a purchase price that
directly or indirectly reflects a discount from face value unless that
Lender first offered that assignment or transfer to the other Lenders on
ratable basis according to their Commitment Percentages, (C) neither
Borrower nor Agent are required to incur any cost or expense incident to
any assignment, pledge, or other transfer by any Lender, all of which are
for the account of the assigning, pledging, or transferring Lender and its
assignee, pledgee, or transferee as they may agree, and (D) if the
Participant or Purchaser is organized under the Laws of any jurisdiction
other than the United States of America or any of its states, it complies
with SECTION 3.13.
(C) OTHERWISE VOID. Any purported assignment, pledge, or other
transfer in violation of this section is void from beginning and not
effective.
12.13 PARTICIPATIONS. Subject to SECTION 12.12(B) and this section and
only if no Default exists, a Lender may at any time sell to one or more Persons
(each a "PARTICIPANT") participating interests in its Commitment and its share
of the Obligation.
(A) ADDITIONAL CONDITIONS. For each participation (i) the
selling Lender must remain -- and the Participant may not become -- a
"Lender" under this agreement, (ii) the selling Lender's obligations under
the Loan Documents must remain unchanged, (iii) the selling Lender must
remain solely responsible for the performance of those obligations, (iv)
the selling Lender must remain the holder of its one or more Notes and its
share of the Obligation for all purposes under the Loan Documents, and (v)
Borrower and Agent may continue to deal solely and directly with the
selling Lender in connection with those Rights and obligations.
(B) PARTICIPANT RIGHTS. The selling Lender may obtain for each
of its Participants the benefits of the Loan Documents related to
participations in its share of the Obligation, but Borrower is never
obligated to pay any greater amount that would be due to the selling Lender
under the Loan Documents calculated as though no participation had been
made. Otherwise, Participants have no Rights under the Loan Documents
except certain permitted voting Rights described below.
(C) PARTICIPATION AGREEMENTS. An agreement for a participating
interest (i) may only provide to a Participant voting Rights in respect of
any amendment of or approval, consent, or waiver under any Loan Document
related to the matters in SECTION 12.10(B) if it also provides for a voting
mechanism that a majority of that selling Lender's Commitment Percentage or
Termination Percentage, as the case may be (whether directly held by that
selling Lender or participated) controls the vote for that selling Lender,
and (ii) may not permit a Participant to assign, pledge, or otherwise
transfer its participating interest in the Obligation to any Person except
any Lender or its Affiliates.
12.14 TRANSFERS. Subject to SECTION 12.12(B) and this section and only
if no Default exists, a Lender may at any time sell to one or more financial
institutions (each a "PURCHASER") all or part of its Rights and obligations
under the Loan Documents.
(A) ADDITIONAL CONDITIONS. The sale (i) must be accomplished by
the selling Lender and Purchaser executing and delivering to Agent and
Borrower an Assignment and (ii) may not occur until the selling Lender pays
to Agent an administrative-transfer fee of $2,500.
55 AMENDED AND RESTATED LOAN AGREEMENT
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(B) PROCEDURES. Upon satisfaction of the foregoing conditions
and as of the Effective Date in the assignment and assumption agreement,
which may not be before delivery of that document to Agent and Borrower,
then (i) a Purchaser is for all purposes a Lender party to -- with all the
Rights and obligations of a Lender under -- this agreement, with a
Commitment as stated in the assumption agreement, (ii) the selling Lender
is released from its obligations under the Loan Documents to a
corresponding extent, (iii) SCHEDULE 2 is automatically deemed to reflect
the name, address, and Commitment of the Purchaser and the reduced
Commitment of the selling Lender, and Agent shall deliver to Borrower and
Lenders an amended SCHEDULE 2 reflecting those changes, (iv) Borrower shall
execute and deliver to each of the selling Lender and the Purchaser a Note,
each based upon their respective Commitments following the transfer, (v)
upon delivery of the one or more Notes under CLAUSE (IV) above, the selling
Lender shall return to the appropriate Company all Notes previously
delivered to it under this agreement, and (vi) the Purchaser is subject to
all the provisions in the Loan Documents, the same as if it were a Lender
that executed this agreement on its original date.
12.15 JURISDICTION; VENUE; SERVICE OF PROCESS; AND JURY TRIAL. EACH
PARTY, IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS (AND IN THE CASE OF
BORROWER, FOR EACH OF ITS SUBSIDIARIES), (A) IRREVOCABLY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN TEXAS, AND
AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL
PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS AND THE
OBLIGATION BY SERVICE OF PROCESS AS PROVIDED BY TEXAS LAW, (B) IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF OR IN
CONNECTION WITH THE LOAN DOCUMENTS AND THE OBLIGATION BROUGHT IN ANY SUCH COURT,
(C) IRREVOCABLY WAIVES ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (D) AGREES TO DESIGNATE AND MAINTAIN
AN AGENT FOR SERVICE OF PROCESS IN DALLAS, TEXAS, IN CONNECTION WITH ANY SUCH
LITIGATION AND TO DELIVER TO AGENT EVIDENCE THEREOF, IF REQUESTED, (E)
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH LITIGATION BY THE MAILING OF COPIES THEREOF BY CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, AT ITS ADDRESS SET FORTH
HEREIN, (F) IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING AGAINST ANY PARTY
ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE OBLIGATION SHALL
BE BROUGHT IN ONE OF THE AFOREMENTIONED COURTS, AND (G) IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT OR
THE TRANSACTIONS CONTEMPLATED THEREBY. The scope of each of the foregoing
waivers is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including, without limitation, contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Borrower (for itself and
on behalf of each of its Subsidiaries) and each other party to this agreement
acknowledge that this waiver is a material inducement to the agreement of each
party hereto to enter into a business relationship, that each has already relied
on this waiver in entering into this agreement, and each will continue to rely
on each of such waivers in related future dealings. Borrower (for itself and on
behalf of each of its Subsidiaries) and each other party to this agreement
warrant and represent that they have reviewed these waivers with their legal
counsel, and that they knowingly and voluntarily agree to each such waiver
following consultation with legal Counsel. THE WAIVERS IN THIS SECTION 12.15 ARE
IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THESE WAIVERS SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS, AND
REPLACEMENTS TO OR OF THIS OR ANY OTHER LOAN DOCUMENT. In the event of
Litigation, this agreement may be filed as a written consent to a trial by the
court.
57 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
12.16 LIMITATION OF LIABILITY. Neither Agent nor any Lender shall be
liable to any Company for any amounts representing indirect, special, or
consequential damages suffered by any Company, except where such amounts are
based substantially on willful misconduct by Agent or any Lender, but then only
to the extent any damages resulting from such wilful misconduct are covered by
Agent's and the other Lenders' fidelity bond or other insurance.
12.17 ENTIRE AGREEMENT. THE LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
12.18 RESTATEMENT OF EXISTING LOAN AGREEMENT, REPAYMENT OF NON-
PARTICIPATING EXISTING LENDERS, AND SETTLEMENT OF FUNDS. The parties hereto
agree that, on the Closing Date, after all conditions precedent set forth in
SECTION 5 have been satisfied or waived: (a) the Obligation (as defined in this
agreement) represents, among other things, the amendment, extension,
consolidation, and modification of the "Obligation" (as defined in the Existing
Loan Agreement); (b) this agreement is intended to, and does hereby, restate,
renew, extend, amend, modify, supersede, and replace the Existing Loan
Agreement; (c) the Amended and Restated Guaranty executed pursuant to this
agreement as of the Closing Date is intended to, and does hereby, restate,
renew, extend, amend, modify, supersede, and replace the Guaranty executed and
delivered pursuant to the Existing Loan Agreement; (d) the Notes executed
pursuant to this agreement amend, renew, extend, modify, replace, substitute for
and supersede in their entirety (but do not extinguish, the Debt arising under)
the promissory notes issued pursuant to the Existing Loan Agreement (other than
Debt owed to Existing Lenders who are not continuing as a Lender under this
agreement, which Debt is being repaid); and (e) the entering into and
performance of their respective obligations under this agreement and the
transactions evidenced hereby do not constitute a novation. Additionally, the
following allocations and payments by the parties indicated will be made in
order to reflect the amended and restated commitments and the Lenders'
Commitment Percentages thereof:
(a) On the Closing Date, after all conditions precedent set
forth in SECTION 5 have been satisfied or waived, all outstanding
indebtedness under the Existing Loan Agreement owed to any Existing Lender
that has not continued to be a Lender under this Agreement shall be repaid
in full by Borrower and such Existing Lender's commitments under the
Existing Loan Agreement shall be terminated.
(b) Each Lender which was an Existing Lender will fund, if
positive, an amount equal to the difference between (i) its Commitment
Percentage of the Principal Debt outstanding under this agreement,
including, without limitation, its Commitment Percentage of any Borrowings
made, and (ii) its ratable portion of the aggregate unpaid principal
balance of all borrowings under the Existing Loan Agreement.
REMAINDER OF PAGE INTENTIONALLY BLANK
SIGNATURE PAGE FOLLOWS
57 AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
EXECUTED as of the date first stated in this agreement.
(address) MATRIX FINANCIAL SERVICES
CORPORATION, as Borrower
Matrix Financial Services Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ By_________________________________
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive
President Vice President
Tel (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
(address) BANK ONE, TEXAS, N.A., as Agent and
a Lender
Bank One, Texas, N.A., Agent
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By_________________________________
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
Tel (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
(wire transfer)
Account # (see account #'s in Loan
Agreement)
Bank: Bank One, Dallas
ABA # ▇▇▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇
Ref: (see account names in Loan Agreement)
SIGNATURE AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
SCHEDULE 2
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LENDERS AND COMMITMENTS
-----------------------
====================================================================================
WAREHOUSE WORKING TERM-LINE COMBINED
NAME OF LENDER COMMIT- CAPITAL COMMITMENT COMMITMENT
MENT COMMIT- (BY LENDER)
MENT
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇, ▇▇▇▇▇, N.A. $60,000,000 $10,000,000 $30,000,000 $100,000,000
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Vice President
Fed Tax ID No. ▇▇-▇▇▇▇▇▇▇
Tel (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
Account # (see account #'s in
Loan Agreement)
Bank: Bank One, Dallas
ABA # ▇▇▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇,
(▇▇▇) ▇▇▇-▇▇▇▇
Ref: (see account names in
Loan Agreement)
====================================================================================
TOTAL $60,000,000 $10,000,000 $30,000,000 $100,000,000
====================================================================================
SCHEDULE 2
----------
SCHEDULE 4.1
------------
ELIGIBILITY CONDITIONS
----------------------
A. ELIGIBLE-MORTGAGE LOAN. A Mortgage Loan:
1. For which, if it supports a Wet Borrowing, the applicable Wet Period
has not expired.
2. Which is a Conventional Loan, FHA Loan, VA Loan, or Jumbo Loan.
3. The promissory note evidencing which (a) is the standard form approved
by VA, FHA, FNMA, or FHLMC or a form otherwise acceptable to Agent,
(b) has a maturity within 30 years of its origination (or 40 years for
loans being sold to Astoria Federal Savings Bank), (c) is payable or
endorsed (without restriction or limitation) to Borrower's order, (d)
is endorsed in blank by Borrower, (e) is fully funded, and (f) is
valid and enforceable without offset, counterclaim, defense, or right
of recision or avoidance of any kind other than for valid payments
made on it and any exceptions to enforceability under Debtor Laws.
4. For which no default in the payment of principal or interest or any
other default has continued uncured for 90 calendar days, no
foreclosure or other similar proceedings have commenced, and no claim
for any credit, allowance, or adjustment exists.
5. Which is secured by a mortgage, deed of trust, or trust deed that (a)
is the standard form approved by VA, FHA, FNMA, or FHLMC or a form
otherwise acceptable to Agent and (b) grants a first-priority Lien on
residential-real property described below that will be perfected upon
recording.
6. For which the underlying residential-real property (a) consists of
land and (i) a one- to four-family dwelling, or (ii) a condominium
unit that is ready for occupancy, (iii) a manufactured home unit, but
not (iv) a mobile home, a co-op, or a multi-family dwelling for more
than four families, (b) is, if required by Appraisal Laws, covered by
an Appraisal, and (c) is insured against loss or damage by fire and
all other hazards normally included in standard-extended-coverage
insurance (including, without limitation, flood insurance if the
property is in a federally-designated-flood plain) in accordance with
the Collateral Documents for it and Borrower is named as a loss-payee
for that insurance.
7. Which conforms in all material respects with all of the requirements
of a valid and enforceable Take-Out Commitment held by Borrower.
8. The Collateral Documents for which (a) are delivered to Agent within
90 calendar days after the date of the related promissory note, (b)
are in compliance with all Laws, (c) are otherwise in compliance with
the requirements of the Loan Documents and otherwise in form and
substance acceptable to Agent, and (d) are subject to no Liens other
than Lender Liens and other Permitted Liens.
9. Which has been held by Agent for Lenders as an Eligible-Mortgage Loan
for 120 calendar days or less.
SCHEDULE 4.1
------------
10. Which has not -- and no Collateral Document for which has -- been (a)
sold to an investor and repurchased by Borrower, (b) rejected by an
investor, (c) delivered to an investor or any Person for it for more
than the Shipping Period, or (d) delivered to Borrower for correction
for more than the Correction Period.
11. Which does not otherwise have the characteristics of any other
sublimit under this agreement, other than the Wet Sublimit, Jumbo
Sublimit, or Swing Sublimit, as applicable.
B. ELIGIBLE-GESTATION COLLATERAL. An Eligible-Mortgage Loan:
1. For which Agent has issued its initial certification for inclusion of
that Mortgage Loan in a Mortgage Pool or Borrower has obtained a
specific Take-Out Commitment for an individual Mortgage Loan
evidencing a Dry Borrowing.
2. For which Borrower has delivered to Agent a valid and enforceable
Take-Out Commitment for that Mortgage Loan that is issued by a Person
-- and is in form and substance -- acceptable to Agent.
3. Which has been held by Agent as Eligible-Gestation Collateral for less
than 45 calendar days.
C. ELIGIBLE-COMMITTED-B/C-PAPER LOAN. An otherwise Eligible-Mortgage Loan,
except that:
1. It does not comply with all applicable requirements for purchase under
either the FHLMC Guide, the FNMA Guide, or the GNMA Guide and is
therefore saleable only to investors other than FHLMC, FNMA, or GNMA;
but it otherwise meets the requirements of the traditional secondary
market for B/C-rated Mortgage Loans, rating agencies, and pool
insurers.
2. No default in the payment of principal or interest or any other
default has continued uncured for more than 59 calendar days.
3. The Collateral Documents for which are delivered to Agent within 45
calendar days after the date of the related promissory note.
4. The outstanding principal balance of the Mortgage Loan does not exceed
$300,000.
5. Neither this nor any other any other Mortgage Loan funded under this
agreement is a revolving credit loan.
6. No real property taxes or insurance payments due and payable with
respect to the underlying real property (or escrow installments
therefor) covered by the Mortgage Loan are past due the payment due
date thereof.
D. ELIGIBLE-UNCOMMITTED-B/C-PAPER LOAN. An otherwise Eligible-Committed-B/C-
Paper Loan, except that:
1. It does not conform in all respects with all of the requirements of a
valid and enforceable Take-Out Commitment held by Borrower, but it
otherwise meets the requirements of the traditional secondary market
for B/C-rated Mortgage Loans, rating agencies, and pool insurers.
2 SCHEDULE 4.1
------------
2. That has been held by Agent for Lenders as an Eligible-Uncommitted-
B/C-Paper Loan for 365 calendar days or less.
E. ELIGIBLE-SECOND-LIEN LOAN. An otherwise Eligible-Mortgage Loan, other than
the fact that it is secured by a mortgage, deed of trust, or trust deed
that grants a second-priority Lien on residential-real property that will
be perfected upon recording.
F. ELIGIBLE-REPURCHASED LOAN. An otherwise Eligible-Mortgage Loan, except
that:
1. It has been purchased by Borrower from a certified GNMA Mortgage Pool
for which Borrower is the issuer/servicer.
2. It is a FHA Loan or VA Loan, but is not a Conventional Loan or Jumbo
Loan.
3. A default in the payment of principal or interest or some other
default may have continued uncured for 90 days or more, but no
foreclosure or similar proceedings have commenced.
4. It is in the process of being modified (or has been modified) in
accordance with GNMA loss mitigation and mortgage modification
procedures and guidelines and Borrower reasonably expects to be
capable of re-conveying such Eligible-Repurchased Loan into a GNMA II
Mortgage Pool. Any such modification must be approved by HUD, if
required.
5. It may or may not be subject to (and conform to) a valid and
enforceable Take-Out Commitment held by Borrower.
6. The Collateral Documents for the Eligible-Repurchased Loan may be
delivered to Agent in excess of 90 days after the date of the related
promissory note.
7. It is eligible in all respects for re-conveyance into a GNMA II
Mortgage Pool, including, without limitation, that (a) not more than
24 months have elapsed since the first installment was due under any
modified mortgage arrangement (see item 4 above), and (b) the term of
the modified mortgage arrangement (see item 4 above) may not exceed
360 months from the due date of the first installment required under
the modified mortgage arrangement (see item 4 above).
G. ELIGIBLE-MORTGAGE SECURITY. A Mortgage Security:
1. Which is valid and enforceable without offset, counterclaim, defense,
or right of recision or avoidance of any kind.
2. Which is guaranteed or issued by either (a) FNMA, FHLMC, or GNMA or
(b) any other Person if (i) Borrower first obtains Determining
Lenders' written approval in their sole discretion and (ii) that other
Person has not been rejected as an issuer or guarantor by notice to
Borrower from Agent or Determining Lenders in their sole discretion.
3. Under which no default exists.
4. Which conforms in all respects with all of the requirements of a valid
and enforceable Take-Out Commitment held by Borrower.
3 SCHEDULE 4.1
------------
5. The mortgage pool for which consists of Mortgage Loans that were --
before the issuance of that Mortgage Security -- Eligible-Mortgage
Loans constituting part of the Collateral.
6. The Collateral Documents for which (a) have been delivered to or for
Agent, (b) are in compliance with all Laws, (c) are otherwise in form
and substance acceptable to Agent, and (d) are subject to no Liens
other than Lender Liens and other Permitted Liens.
7. Which has been held by Agent for Lenders as an Eligible-Mortgage
Security for a time period that -- when added to the longest-time
period any Mortgage Loan to which it relates was included in the
Collateral as an Eligible-Mortgage Loan -- is 120 calendar days or
less.
H. ELIGIBLE-P&I RECEIVABLES. Every claim by Borrower in respect of a P&I
Payment:
1. Which P&I Payment has been -- or, with the proceeds of a related P&I
Borrowing is to be -- made under a Servicing Contract with FHLMC,
FNMA, GNMA, or an investor approved (and not subsequently disapproved)
from time to time by Agent in writing for such purposes (an "APPROVED-
RECEIVABLES INVESTOR") (a) under which FHLMC, FNMA, GNMA, or that
Approved-Receivables Investor has agreed to reimburse Borrower for all
or part of that P&I Payment (to the extent not reimbursed by the
mortgagor under the related Mortgage Loan) and (b) for which -- at any
time more than 45 days after the Closing Date -- there is in effect,
if applicable, an Acknowledgment Agreement with FHLMC, FNMA, or GNMA
consenting to the Lender Lien in that Servicing Contract and all
Servicing Rights under it.
2. Which claim does not exceed the amount so agreed to be reimbursed.
3. Which claim has not been included in the Borrowing Base for
Receivables for more than 30 calendar days if the claim is not pending
under the Servicing Contract.
4. Which claim (a) is -- or promptly upon payment will be -- valid,
enforceable, liquidated, currently due, and properly filed with FHLMC,
FNMA, GNMA, or an Approved Investor, as the case may be, (b) is not
subject to any reduction or deduction for any setoff, counterclaim,
recoupment, or otherwise, and (c) Borrower expects in good faith full
cash reimbursement from the sources identified in the related
Collateral Documents.
5. For which all of the Collateral Documents have been timely delivered
to Agent under this agreement.
6. Which claim and all related Eligible-P&I Receivables and other
Servicing Rights are subject to a Lender Lien but no other Liens.
I. ELIGIBLE-T&I RECEIVABLES. Every claim by Borrower in respect of a T&I
Payment:
1. Which T&I Payment has been -- or, with the proceeds of a related T&I
Borrowing is to be -- made under a Servicing Contract with FHLMC,
FNMA, GNMA, or an Approved-Receivables Investor (a) under which FHLMC,
FNMA, GNMA, or that Approved-Receivables Investor has agreed to
reimburse Borrower for all or part of that T&I Payment (to the extent
not reimbursed by the mortgagor under the related Mortgage Loan) and
(b) for which -- at any time more than 45 days after the Closing Date
-- there is in effect, if applicable, an Acknowledgment Agreement with
FHLMC, FNMA, or GNMA consenting to the Lender Lien in that Servicing
Contract and all Servicing Rights under it.
4 SCHEDULE 4.1
------------
2. Which claim does not exceed the amount so agreed to be reimbursed.
3. Which T&I Payment was made -- or is to be -- for a Mortgage Loan that
is current except for the payment of taxes and insurance due in the
year during and for which the T&I Payment was made or payment of
principal and interest and is not otherwise in default or in
foreclosure.
4. Which claim has (a) never been included in the Borrowing Base for
Receivables supporting any previous T&I Borrowing and (b) been
included in the Borrowing Base for Receivables for no more than 270
calendar days.
5. Which claim (a) is -- or promptly upon payment will be -- valid,
enforceable, liquidated, currently due, and properly filed with FHLMC,
FNMA, GNMA, or that Approved-Receivables Investor, as the case may be,
(b) is not subject to any reduction or deduction for any setoff,
counterclaim, recoupment, or otherwise, and (c) Borrower expects in
good faith full cash reimbursement from the sources identified in the
related Collateral Documents.
6. For which all of the Collateral Documents have been timely delivered
to Agent under this agreement.
7. Which claim and all related Eligible-T&I Receivables and other
Servicing Rights are subject to a Lender Lien but no other Liens.
J. ELIGIBLE-FORECLOSURE RECEIVABLES. Every claim by Borrower in respect of a
Foreclosure Payment:
1. Which claim is against VA under a VA Guaranty or FHA or an Approved
PMI under a FHA or Approved PMI insurance policy (or is a claim for
reimbursement from FNMA, FHLMC, or any other Approved Investor) that
(a) guarantees or insures payment of all or part of a Mortgage Loan
repurchased with the Foreclosure Payment, (b) is in full force and
effect, and (c) in the case of an Approved PMI insurance policy, has
been approved by Agent.
2. Which claim does not exceed the amount so guaranteed or insured.
3. Which claim is related to a Mortgage Loan that (a) has been
foreclosed, (b) is not held by Borrower as "other real estate owned,"
and (c) if the claim is against VA, is in a "bid" status.
4. Which claim has (a) never been included in the Borrowing Base for
Receivables supporting any previous Foreclosure Borrowing and (b) been
included in the Borrowing Base for Receivables only for no more than
180 calendar days.
5. Which claim (a) is valid, enforceable, liquidated, currently due, and
properly filed with FHA, VA, or an Approved PMI, as the case may be,
(b) is not subject to any reduction or deduction for any setoff,
counterclaim, recoupment, or otherwise, and (c) Borrower expects in
good faith full cash payment from the sources identified in the
related Collateral Documents.
6. For which all of the Collateral Documents have been timely delivered
to Agent under this agreement.
7. Which claim and all related Eligible-Foreclosure Receivables are
subject to a Lender Lien but no other Liens.
5 SCHEDULE 4.1
------------
K. ELIGIBLE-SERVICING PORTFOLIO. All of the Servicing Portfolio for which
Borrower owns the Servicing Rights, which are not under any sub-servicing
or master-servicing arrangements and which arise only under Servicing
Contracts with FHLMC, FNMA, or GNMA (advances against non-agency Servicing
Rights will be approved by Determining Lenders on a case-by-case basis),
and which are not currently pledged to another Person.
6 SCHEDULE 4.1
------------
SCHEDULE 4.2
------------
BORROWING-BASE CALCULATIONS
---------------------------
A. BORROWING BASE FOR MORTGAGE COLLATERAL. The amount equal to:
1. The total collateral value of each item of Eligible-Mortgage
Collateral, which is equal to 98% (except (i) 95% for Eligible-
Committed-B/C-Paper Loans which have been held by Agent for Lenders as
Eligible-Committed-B/C-Paper Loans for more than 60 calendar days,
(ii) 97% for Eligible-Uncommitted-B/C-Paper Loans, (iii) 95% for
Eligible-Second-Lien Loans which have been held by Agent for Lenders
as Eligible-Second-Lien Loans for more than 60 calendar days, and (iv)
97% for Eligible-Repurchased Loans) of the least of its:
(a) unpaid principal balance;
(b) Only in respect of Eligible-Mortgage Loans, face amount less
discounts;
(c) Take-Out Price (or in the case of Eligible-Repurchased Loans, the
amount due from FHA or VA upon re-conveyance of the Eligible-
Repurchased Loan into a GNMA II Mortgage Pool); or
(d) At the election of Agent or Determining Lenders' at any time,
Market Value;
as reduced by the following matters:
2. No more than the Wet Sublimit may be included for Mortgage Loans
supporting Wet Borrowings, and nothing may be included for any
Mortgage Loan supporting a Wet Borrowing upon the expiration of its
applicable Wet Period; and
3. No more than the applicable Jumbo Sublimit may be included for any
Jumbo Loan or for all Jumbo Loans.
B. BORROWING BASE FOR GESTATION COLLATERAL means, at any time, 99% of the
Take-Out Price for Eligible-Gestation Collateral matched to a security
settlement, and 98% of the Take-Out Price for Eligible-Gestation Collateral
matched to a whole loan settlement.
C. BORROWING BASE FOR RECEIVABLES means, at any time, the sum of 95% of all
Eligible-P&I Receivables plus 85% of all Eligible-T&I Receivables plus 80%
of all Eligible-Foreclosure Receivables.
D. BORROWING BASE FOR TERM-LINE means, at any time, 70% of the lesser of (a)
the cost of that portion of the Servicing Portfolio pledged to support each
advance of Term-Line Borrowings, (b) the Appraised Value of that portion of
the Servicing Portfolio pledged to support each advance of Term-Line
Borrowings, and (c) 350% of the average servicing fee for that portion of
the Servicing Portfolio pledged to support each advance of Term-Line
Borrowings.
SCHEDULE 4.2
------------
E. TAKE-OUT PRICE. For the Mortgage Collateral for which Borrower elects:
1. Designated. To deliver to Agent a Take-Out Commitment designating a
----------
specific Eligible-Mortgage Loan or Eligible-Mortgage Security for
purchase, the amount which the Approved Investor has committed to pay
for that Eligible-Mortgage Loan or Eligible-Mortgage Security.
2. Not Designated. Not to deliver to Agent a Take-Out Commitment
--------------
designating a specific Eligible-Mortgage Loan or Eligible-Mortgage
Security for purchase, an amount determined by Mortgage-Collateral
Group as follows:
(a) As used in this SCHEDULE 4.2, the term "MORTGAGE-COLLATERAL
GROUP" means all Mortgage Collateral bearing the same interest
rate without regard to whether that Mortgage Collateral consists
of Mortgage Loans or Mortgage Securities. In determining any such
grouping, Mortgage Securities are grouped with other Mortgage
Collateral in accordance with the interest rates of the
underlying and related pools of eligible Mortgage Loans and not
by the interest rates appearing on the face of any of the
Mortgage Securities.
(b) The Take-Out Price for each Mortgage-Collateral Group is the
corresponding weighted average Take-Out Commitment price,
expressed as a percentage, determined from all of the respective
Take-Out Commitments for the sale of the items comprising that
Mortgage-Collateral Group held by Borrower at that time --and not
designated for specific Mortgage Collateral under PART E.1.
above -- calculated as follows:
. All Take-Out Commitments are first grouped to correspond to
each related Mortgage-Collateral Group, with the result that
for each Mortgage-Collateral Group there will be a
corresponding group of Take-Out Commitments;
. The aggregate principal balance of Take-Out Commitments in
each group is then determined; and
. The principal balance of each Take-Out Commitment in each
group is then multiplied by the related commitment price and
the sum of the products thereof is divided by the aggregate
principal balance of Take-Out Commitments in each group to
determine the weighted average Take-Out Commitment price.
(c) For all Mortgage Collateral, the corresponding weighted average
Take-Out Commitment price, expressed as a percentage, determined
by DIVIDING (i) the total Take-Out Price for all Mortgage-
Collateral Groups determined above BY (ii) the total principal
amount of all Take-Out Commitments determined above.
If the price in a Take-Out Commitment is stated as a yield and not as
a percentage of par, a yield so stated is converted to a percentage
price by the use of the "Net Yield Tables for GNMA Mortgage
Securities" published by Financial Publishing Company or the "Mortgage
Yield Conversion Tables" published by FNMA, as applicable and
acceptable to Agent.
2 SCHEDULE 4.2
------------
3 SCHEDULE 4.2
------------
SCHEDULE 4.3
------------
COLLATERAL PROCEDURES
---------------------
A. MORTGAGE LOAN FOR DRY BORROWING. Delivery of a Mortgage Loan to support a
Dry Borrowing requires delivery to Agent of the following Collateral
Documents -- each of which must be in form and substance satisfactory to
Agent -- in the following manner:
1. A Collateral-Delivery Notice that, among other things, identifies the
documents being delivered to Lender for that Dry Borrowing.
2. The original promissory note evidencing the Mortgage Loan, properly
payable or endorsed to Borrower, and endorsed in blank by Borrower.
3. Assignment from Borrower of the mortgage, deed of trust, or trust deed
securing the Mortgage Loan, executed in blank by Borrower, and in
recordable form.
4. Certified copy of each intervening assignment to Borrower of that
mortgage, deed of trust, or trust deed sent for recording and copies
of all previous-intervening assignments.
5. Certified copy of that original mortgage, deed of trust, or trust deed
sent for recording in the jurisdiction where the property is located.
6. Unless a Take-Out Commitment is specifically not required for the
Borrowing-Purpose Category in question, either (a) a Take-Out
Commitment specifically designating that Mortgage Loan for purchase or
(b) Take-Out Commitments with the take-out prices indicated (unless a
master Take-Out Commitment has already been delivered to, and is on
file with, Agent).
7. Unless Agent has initiated the wire transfer for originating the
Mortgage Loan, a copy of the check evidencing that origination.
8. A data-processing print-out reflecting that Mortgage Loan's loan
number, mortgagor, origination date, original amount, outstanding-
principal balance, interest rate, type of loan, requested advance
amount, and indicating what sublimit, if any, under this agreement the
Mortgage Loan falls under.
9. Any and all other files, documents, instruments, certificates,
correspondence, or other records that are (a) requested by Agent and
(b) deemed by Agent in its sole judgment to be necessary, appropriate,
or desirable.
B. MORTGAGE LOAN FOR WET BORROWING. Delivery of a Mortgage Loan to support a
Wet Borrowing requires delivery to Agent of the following Collateral
Documents -- each of which must be in form and substance satisfactory to
Agent -- in the following manner:
1. A Collateral-Delivery Notice that, among other things, identifies the
documents that must be delivered to Agent before the expiration of the
Wet Period for that Wet Borrowing.
SCHEDULE 4.3
------------
2. Unless Agent has approved a wire transfer initiated by Borrower for
originating the Mortgage Loan, either (a) a copy of the check
evidencing that origination or (b) evidence that the check for that
origination is held by a title company pending disbursement.
3. A data-processing print-out reflecting that Mortgage Loan's loan
number, mortgagor, origination date, original amount, outstanding-
principal balance, interest rate, type of loan, requested advance
amount, and indicating what sublimit, if any, under this agreement the
Mortgage Loan falls under.
C. MORTGAGE SECURITY. Delivery of a Mortgage Security to support a Dry
Borrowing requires delivery to Agent of the following Collateral Documents
-- each of which must be in form and substance satisfactory to Agent -- in
the following manner:
1. A Collateral-Delivery Notice that, among other things, identifies the
documents being delivered to Lender for that Dry Borrowing.
2. For a Mortgage Security that is not in book-entry form:
(a) The original Mortgage Security.
(b) A bond power endorsed -- or another appropriate instrument of
assignment executed -- by Borrower in blank.
3. For a Mortgage Security that is in book-entry form, confirmation of
either:
(a) The appropriate entry (i) in records of a Federal Reserve Bank of
the nominal ownership by Agent (on behalf of Lenders) of any FNMA
Mortgage Security that constitutes a "FNMA BOOKENTRY SECURITY,"
as defined in the Book-Entry Procedures for FNMA Securities, 24
C.F.R (S)(S) 81.41-81.49 (the "FNMA BOOK-ENTRY PROCEDURES"), or a
FHLMC Mortgage Security that constitutes a "FHLMC BOOKENTRY
SECURITY," as defined in the Federal Home Loan Mortgage
Corporation Book-Entry Regulations, 1 C.F.R. (S)(S) 462.1-462.8
(the "FHLMC BOOK-ENTRY REGULATIONS"), and (ii) by Agent in its
records of Borrower's ownership of that book-entry Mortgage
Security subject to a Lender Lien; or
(b) The (i) appropriate entry by Chemical Bank -- in its capacity as
custodian for Participants Trust Company ("PTC"), GNMA's central
depository -- in its records of the nominal ownership by Agent
(on behalf of Lenders) of any GNMA-guaranteed Mortgage Security,
(ii) the appropriate entry by Agent in its records of Borrower's
ownership of that book-entry Mortgage Security subject to a
Lender Lien, and (iii) receipt by Agent of a confirmation of
transaction in the form of a written advice specifying the amount
and description of that book-entry Mortgage Security subject to
that Lien.
4. Either (a) a Take-Out Commitment specifically designating that
Mortgage Security for purchase or (b) Take-Out Commitments with the
take-out prices indicated (unless a master Take-Out Commitment has
already been delivered to, and is on file with, Agent).
2 SCHEDULE 4.3
------------
SCHEDULE 5
----------
CLOSING CONDITIONS
------------------
Unless otherwise specified, all dated as of
the Closing Date or a date (a "CURRENT DATE")
within 30 days before the Closing Date.
H&B [1.] AMENDED AND RESTATED LOAN AGREEMENT (the "LOAN AGREEMENT") between
MATRIX FINANCIAL SERVICES CORPORATION, an Arizona corporation
("BORROWER"), certain lenders ("LENDERS"), and BANK ONE, TEXAS, N.A.,
as Agent for Lenders ("AGENT") -- all the terms in which have the same
meanings when used in this schedule --accompanied by:
Schedule 2 - Lenders and Commitments
Schedule 4.1 - Eligibility Conditions
Schedule 4.2 - Borrowing-Base Calculations
Schedule 4.3 - Collateral Procedures
Schedule 5 - Closing Conditions
Schedule 6.2 - Companies
Schedule 6.9 - Litigation and Judgments
Schedule 6.10 - Affiliate Transactions
Exhibit A-1 - Amended and Restated Warehouse Note
Exhibit A-2 - Amended and Restated Swing Note
Exhibit A-3 - Amended and Restated Working-Capital Note
Exhibit A-4 - Amended and Restated Term-Line Note
Exhibit B - Amended and Restated Guaranty
Exhibit C-1 - Amended and Restated Security Agreement
Exhibit C-2 - Financing Statement
Exhibit C-3 - Shipping Request
Exhibit C-4 - Bailee Letter for Investors
Exhibit C-5 - Bailee Letter for Pool Custodian
Exhibit C-6 - Trust Receipt and Agreement
Exhibit C-7 - Release Request
Exhibit D-1 - Borrowing Request
Exhibit D-2 - Collateral-Delivery Notice
Exhibit D-3 - Borrowing-Base Report
Exhibit D-4 - Take-Out Report
Exhibit D-5 - Management Report
Exhibit D-6 - Compliance Certificate
Exhibit D-7 - Collateral-Conversion Notice
Exhibit E - Opinion of Counsel
Exhibit F-1 - Amendment
Exhibit F-2 - Assignment and Assumption Agreement
_______________________
[ ] indicates items not complete at time of this draft of this schedule,
together with names of parties or counsel with responsibility for each.
SCHEDULE 5
----------
H&B [2.] AMENDED AND RESTATED WAREHOUSE NOTE in the stated principal amount of
$60,000,000, executed by Borrower, payable to the order of Bank One,
Texas, N.A., as the sole initial Lender, and in substantially the form
of EXHIBIT A-1 to the Loan Agreement.
H&B [3.] AMENDED AND RESTATED SWING NOTE in the stated principal amount of
$15,000,000, executed by Borrower, payable to the order of Bank One,
Texas, N.A., in substantially the form of EXHIBIT A-2 to the Loan
Agreement.
H&B [4.] AMENDED AND RESTATED WORKING-CAPITAL NOTE in the stated principal
amount of $10,000,000, executed by Borrower, payable to the order of
Bank One, Texas, N.A., as the sole initial Lender, and in
substantially the form of EXHIBIT A-3 to the Loan Agreement.
H&B [5.] AMENDED AND RESTATED TERM-LINE NOTE in the stated principal amount of
$30,000,000, executed by Borrower, payable to the order of Bank One,
Texas, N.A., as the sole initial Lender, and in substantially the form
of EXHIBIT A-4 to the Loan Agreement.
H&B [6.] AMENDED AND RESTATED GUARANTY executed by MATRIX CAPITAL CORPORATION
as Guarantor, accepted by Agent, and in substantially the form of
EXHIBIT B to the Loan Agreement.
H&B [7.] AMENDED AND RESTATED SECURITY AGREEMENT executed by Borrower as Debtor
and Agent as Secured Party, and in substantially the form of EXHIBIT
C-1 to the Loan Agreement.
H&B [8.] FINANCING STATEMENTS executed Borrower as Debtor and Agent as Secured
Party, for filing with the following UCC filing offices, and in
substantially the form of EXHIBIT C-2 to the Loan Agreement:
=============================================================
NAME JURISDICTION NUMBER DATE
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇ ▇▇▇▇▇, ▇▇
-------------------------------------------------------------
Sec. of State, TX
-------------------------------------------------------------
Sec. of State, CO
=============================================================
2 SCHEDULE 5
----------
9. UCC SEARCH REPORTS for financing statements filed against Borrower as
Debtor with the following UCC filing offices:
==========================================================================================================
Debtor Jurisdiction Search File Number File Description
Date Date
==========================================================================================================
Matrix Financial Sec. of 12/31/96 840955 08/01/95 Mortgage loans and notes and
Services State AZ (Bank One, related collateral, servicing
Corporation Texas, N.A.) rights, servicing receivables
----------------------------------------------------------------------------------------------------------
846583 09/15/95 Leased computer equipment
(Sun Financial
Group, Inc.)
----------------------------------------------------------------------------------------------------------
860986 01/03/96 Leased computer equipment
(Sun Financial
Group, Inc.)
----------------------------------------------------------------------------------------------------------
941027 10/25/96 Inventory, chattel paper,
(Argo Federal accounts, equipment and general
Savings Bank) intangibles, together with all
accessions, records and proceeds
relating to the foregoing.
-----------------------------------------------------------------------------------------------------------
926695 07/19/96 Specified servicing rights
(Colorado
National Bank)
----------------------------------------------------------------------------------------------------------
Sec. of 01/14/97 962080939 10/28/96 Accounts receivables, proceeds
State, CO (Argo Federal of collateral; equipment, contract
Savings Bank) rights, inventory, and products
of collateral.
----------------------------------------------------------------------------------------------------------
19962054695 07/18/96 Specified servicing rights
(Colorado
National Bank)
----------------------------------------------------------------------------------------------------------
952052586 07/14/95 Mortgage loans and notes and
(Bank One, related collateral, servicing
Texas, N.A.) rights, servicing receivables
----------------------------------------------------------------------------------------------------------
952057164 08/01/95 Mortgage loans and notes and
(Bank One, related collateral, servicing
Texas, N.A.) rights, servicing receivables
-----------------------------------------------------------------------------------------------------------
Sec. of 01/14/97 95-138581 07/14/95 Mortgage loans and notes and
State, TX (Bank One, related collateral, servicing
Texas, N.A. rights, servicing receivables
----------------------------------------------------------------------------------------------------------
3 SCHEDULE 5
----------
==========================================================================================================
Debtor Jurisdiction Search File Number File Description
Date Date
==========================================================================================================
95-146605 08/01/95 Mortgage loans and notes and
(Bank One, related collateral, servicing
Texas, N.A. rights, servicing receivables
----------------------------------------------------------------------------------------------------------
MFSC [10.] TERMINATIONS OR AMENDMENTS OF FINANCING STATEMENTS reflected in the
UCC Search Reports described above that, in the judgment of Agent
and its special counsel, conflict with the priority of the Lender
Liens contemplated by the Loan Documents, each executed by the
appropriate secured party and (if necessary) debtor, and in form
acceptable to Agent for filing with the applicable UCC filing
offices:
====================================================================================================================================
DEBTOR JURISDICTION FILE NO. FILE DATE COMMENTS
====================================================================================================================================
Borrower Sec. of 941027 Amend within 45 days
State AZ (Argo Federal Savings Bank of the Closing Date
------------------------------------------------------------------------------------------------------------------------------------
Sec. of 962080939 Amend within 45 days
State CO (Argo Federal Savings Bank) of the Closing Date
====================================================================================================================================
H&B [11.] CORPORATE CHARTER for Borrower, certified as of January 24, 1997, by
the Arizona Corporation Commission
H&B [12.] CORPORATE CHARTER for Guarantor, certified as of January 17, 1997,
by the Colorado Secretary of State.
H&B [13.] OFFICERS' CERTIFICATE for Borrower, executed by the President and
Secretary of Borrower as to (a) the due incumbency of its officers
authorized to execute or attest to the Loan Documents, (b)
resolutions duly adopted by its directors approving and authorizing
the execution of the Loan Documents, (c) its corporate charter, (d)
bylaws, to which must be attached
Exhibit A - Resolutions
Exhibit B - Bylaws
Exhibit C - Charter
H&B [14.] OFFICERS' CERTIFICATE for Guarantor, executed by the President and
Secretary of Guarantor as to (a) the due incumbency of its officers
authorized to execute or attest to the Loan Documents, (b)
resolutions duly adopted by its directors approving and authorizing
the execution of the Loan Documents, (c) its corporate charter, (d)
bylaws, to which must be attached
Exhibit A - Resolutions
Exhibit B - Bylaws
Exhibit C - Charter
4 SCHEDULE 5
----------
H&B [15.] CERTIFICATES OF QUALIFICATION, GOOD STANDING, AND AUTHORITY for
Borrower, issued as of Current Dates by the appropriate Tribunals
for the following jurisdictions:
====================================================================================================================================
COMPANY JURISDICTION CERTIFICATE DATE
====================================================================================================================================
Matrix Financial Services Arizona Good Standing 01/24/97
Corporation
------------------------------------------------------------------------------------------------------------------------------------
California Certificate of Foreign Status 01/24/97
------------------------------------------------------------------------------------------------------------------------------------
Colorado Authorization/Good Standing 01/17/97
------------------------------------------------------------------------------------------------------------------------------------
Florida Existence/Good Standing 01/24/97
------------------------------------------------------------------------------------------------------------------------------------
Georgia Existence 01/24/97
------------------------------------------------------------------------------------------------------------------------------------
Iowa Authorization 01/27/97
------------------------------------------------------------------------------------------------------------------------------------
Michigan Existence/Good Standing 01/24/97
------------------------------------------------------------------------------------------------------------------------------------
Missouri Existence/Good Standing 01/24/97
------------------------------------------------------------------------------------------------------------------------------------
North Carolina Authorization 01/24/97
------------------------------------------------------------------------------------------------------------------------------------
Ohio Qualification 01/24/97
(Surrendered 07/18/96)
------------------------------------------------------------------------------------------------------------------------------------
Texas Existence Forfeited 08/27/96
------------------------------------------------------------------------------------------------------------------------------------
Utah Qualification 01/30/97
(Not Registered in State)
------------------------------------------------------------------------------------------------------------------------------------
Matrix Capital Corporation Colorado Authorization/Good Standing 01/17/97
====================================================================================================================================
MFSC [16.] FNMA ACKNOWLEDGMENT AGREEMENT to be executed by Borrower, Agent, and
FNMA, and returned to Agent within 45 days after the Closing Date.
MFSC [17.] FHLMC ACKNOWLEDGMENT AGREEMENT to be executed by Borrower, Agent,
and FHLMC, and returned to Agent, within 45 days after the Closing
Date.
MFSC [18.] GNMA ACKNOWLEDGMENT AGREEMENT to be executed by Borrower, Agent, and
GNMA,, and returned to Agent, within 45 days after the Closing Date.
MFSC [19.] OPINION of counsel to Borrower, addressed to Lender, and addressing
the matters described on EXHIBIT E.
20. Any other documents and items as Agent or any Lender may reasonably
request.
5 SCHEDULE 5
----------
SCHEDULE 6.2
------------
====================================================================================================================================
COMPANIES
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ QUALIFIED USED IN LAST USING CHIEF EXECUTIVE OTHER PRINCIPAL
NAME INCORPORATION AS FOREIGN CORP. FOUR MONTHS NAME? Y/N OFFICE OFFICES
====================================================================================================================================
Matrix Financial Services Arizona California Matrix Capital Y 201 West
Corporation Mortgage Corp. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------------------------
Colorado ▇▇▇▇ ▇. ▇▇▇▇
▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------------------------
Florida
------------------------------------------------------------------------------------------------------------------------------------
Georgia ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------------------------
Iowa
------------------------------------------------------------------------------------------------------------------------------------
Michigan
------------------------------------------------------------------------------------------------------------------------------------
Missouri
------------------------------------------------------------------------------------------------------------------------------------
North Carolina
------------------------------------------------------------------------------------------------------------------------------------
Matrix Funding Corporation Colorado None None NA ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
====================================================================================================================================
SCHEDULE 6.9
------------
LITIGATION AND JUDGMENTS
------------------------
NONE
SCHEDULE 6.9
------------
SCHEDULE 6.10
-------------
AFFILIATE TRANSACTIONS
----------------------
1. Borrower subservices loans and servicing portfolios for Matrix Capital Bank
("MCB") and Matrix Capital Corporation ("MCC"), for which Borrower may
receive a fee.
2. Borrower maintains escrow and custodial balances at MCB, for which Borrower
may receive a fee.
3. Borrower retains United Financial, Inc. ("UFI") to act as broker for
purchasing and selling servicing portfolios, for which Borrower may pay a
fee.
4. Borrower creates operating payables and receivables with all Affiliates,
which are extinguished under normal terms and conditions.
SCHEDULE 6.10
-------------
EXHIBIT C-1
-----------
AMENDED AND RESTATED SECURITY AGREEMENT
---------------------------------------
THIS AGREEMENT is entered into as of January 31, 1997, between MATRIX
FINANCIAL SERVICES CORPORATION, an Arizona corporation ("DEBTOR"), certain
Lenders, and BANK ONE, TEXAS, N.A., as Agent (in that capacity, "SECURED PARTY")
for Lenders.
Debtor, Lenders, and Agent have entered into the Amended and Restated Loan
Agreement (as renewed, extended, amended, or restated, the "LOAN AGREEMENT")
dated as of January 31, 1997. As a continuing inducement to the Lenders to
extend credit to Debtor under the Loan Agreement -- and as a condition precedent
to that credit -- Debtor is executing and delivering this agreement for the
benefit of Lenders and Secured Party.
ACCORDINGLY, for adequate and sufficient consideration, Debtor and Secured
Party agree as follows:
SECTION 1. DEFINITIONS AND REFERENCES. Unless stated otherwise, (a) terms
defined in the Loan Agreement or the UCC have the same meanings when used in
this agreement, and (b) to the extent permitted by Law, if in conflict (i) the
definition of a term in the Loan Agreement controls over the definition of that
term in the UCC, and (ii) the definition of a term in Article 9 of the UCC
controls over the definition of that term elsewhere in the UCC.
"COLLATERAL" is defined in SECTION 2.2 of this agreement.
"DEBTOR" is defined in the preamble to this agreement and includes, without
limitation, Debtor, Debtor as a debtor-in-possession, and any receiver, trustee,
liquidator, conservator, custodian, or similar party appointed for Debtor or for
substantially all of Debtor's assets under any Debtor Law.
"OBLIGOR" means any Person obligated with respect to any Collateral
(whether as an account debtor, obligor on an instrument, issuer of securities,
or otherwise).
"SECURED PARTY" is defined in the preamble to this agreement and includes
its successor appointed and acting as Agent for Lenders under the Loan
Documents.
"SECURITY INTEREST" means the security interest granted and the pledge and
assignment made under SECTION 2.1 of this agreement, which is a Lender Lien
under the Loan Agreement.
SECTION 2. SECURITY INTEREST AND COLLATERAL.
2.1 SECURITY INTEREST. To secure the full payment and performance of the
Obligation, Debtor grants to Secured Party for Lenders a security interest in
the Collateral and pledges and assigns the Collateral to the Secured Party, all
upon and subject to the terms and conditions of this agreement. The grant of
the Security Interest does not subject the Secured Party or any Lender to the
terms of any Collateral Document or in any way transfer, modify, or otherwise
affect (a) any of Debtor's obligations with respect to any Collateral or (b) the
Lender Liens under the Loan Agreement.
2.2 COLLATERAL. As used in this agreement, the term "COLLATERAL" means
the present and future items and types of property described below, whether now
owned or acquired in the future by Debtor. This description of Collateral does
not permit any action prohibited by any Loan Document.
EXHIBIT C-1
-----------
(a) In respect of the Mortgage Collateral all present and future:
. Mortgage Loans from time to time identified to Secured Party
as Collateral.
. All Collateral Documents in any way related to any Mortgage
Loans identified as Collateral -- including, without
limitation, all promissory notes evidencing and all
mortgages, deeds of trust, or trust deeds securing those
Mortgage Loans -- whether deposited with or held by or for
Secured Party under this agreement, identified by Debtor as
Collateral for a Wet Borrowing, or otherwise.
. Private-mortgage insurance (including, without limitation,
all commitments to issue any such insurance) covering -- and
all commitments issued by FHA to insure or issued by VA to
guarantee --any Mortgage Loans identified as Collateral.
. Security of any kind pledged by a mortgagor for any Mortgage
Loan identified as Collateral.
. Casualty insurance assigned to Debtor in connection with any
Mortgage Loan identified as Collateral.
. Mortgage Securities deposited with or held by or for Secured
Party under the Loan Documents or registered by book-entry
in Secured Party's name under the Loan Documents.
. Guaranties related to Mortgage Securities identified as
Collateral.
. Take-Out Commitments held by Debtor for any Mortgage Loans
or Mortgage Securities identified as Collateral, Rights to
deliver those Mortgage Loans or Mortgage Securities, as the
case may be, to the investors or other purchasers under
those Take-Out Commitments, and all proceeds resulting from
the sale of any of those Mortgage Loans or Mortgage
Securities under those Take-Out Commitments.
. Any Collateral otherwise described in this agreement that
may from time to time be delivered (a) to an investor under
SECTION 4.5 of the Loan Agreement until purchased and paid
for by that investor or (b) for correction under SECTION 4.6
of the Loan Agreement.
(b) In respect of the Servicing Portfolio, all present and future:
. Servicing Rights pertaining in any way to Debtor's Servicing
Contracts with FHLMC, FNMA, or GNMA, or other private
investor together with all present and future sums paid or
payable to Debtor on account of, or as a result of the
performance of, those Servicing Rights, whether as
compensation for the performance by Debtor, damages related
to any of the foregoing, amounts payable upon cancellation
or termination hereof, or otherwise.
2 EXHIBIT C-1
-----------
. Servicing Receivables.
(c) The Warehouse Account, Settlement Account, and Servicing Account
and all amounts deposited in them or represented by them.
(d) In respect of all of the Collateral otherwise described in
SECTIONS 2(A), 2(B), and 2(C), all present and future.
. Personal property, contract rights, accounts, and general
intangibles of any kind whatsoever relating to any
Collateral.
. All receivables arising due to a P&I Payment, T&I Payment,
or a Foreclosure Payment.
. All files, surveys, certificates, correspondence,
appraisals, tapes, discs, cards, accounting records, and
other information and data of Debtor relating to any other
Collateral -- including, without limitation, all
information, data, tapes, discs, and cards necessary to
administer and service any Mortgage Loan identified as
Collateral.
. Cash and noncash proceeds of any Collateral.
SECTION 3. REPRESENTATIONS AND WARRANTIES. By entering into this agreement,
and by each subsequent delivery of additional Collateral under this agreement,
Debtor reaffirms the representations and warranties contained in the Loan
Agreement. Debtor further represents and warrants to Secured Party for Lenders
as follows:
3.1 CONCERNING THE COLLATERAL. All Collateral (a) is genuine and in all
respects what it purports to be, (b) is the legal, valid, and binding obligation
of each Obligor (except as enforceability may be limited by Debtor Laws), (c) is
free from any claim for credit, deduction, or allowance of any Obligor and free
from any defense, dispute, setoff, or counterclaim (other than for payments made
in respect of it), (d) if a Mortgage Loan, was originated and is in compliance
with all Laws (including, without limitation, all usury Laws, the Real Estate
Settlement Procedures Act of 1974, the Equal Credit Opportunity Act, the Federal
Truth in Lending Act, Regulation Z promulgated by the Board of Governors of the
Federal Reserve System, and all applicable federal and state consumer protection
Laws, (e) if a Mortgage Security, is duly authorized and validly issued, the
transfer of which is not subject to any restrictions other than under the Loan
Documents, (f) if a Take-Out Commitment or other contract, is in full force and
effect without any material default having occurred by any party to it, and (g)
conforms to the applicable requirements of eligibility under SCHEDULE 4.1 to the
Loan Agreement.
3.2 OWNERSHIP AND PRIORITY. Debtor has full legal and beneficial
ownership of all Collateral, free and clear of all Liens except Permitted Liens.
3.3 CREATION AND PERFECTION. The Security Interest is created and
perfected on (a) each promissory note that evidences a Mortgage Loan identified
as Collateral and that is delivered to Secured Party, (b) each promissory note
that evidences a Mortgage Loan identified by Debtor to Secured Party as
supporting a Wet Borrowing for 21 days after the Borrowing Date for that
Borrowing, (c) each Mortgage Security in certificated form that is delivered to
Secured Party, (d) each Mortgage Security in book-entry form when notice of the
Security Interest is given to the financial institution in whose favor that
security has been issued and that institution confirms that notice, (e) all
Mortgage Collateral shipped to any Approved Investor under
3 EXHIBIT C-1
-----------
SECTION 4.5 of the Loan Agreement (and the Security Interest continues to be
perfected until Secured Party receives either payment or Mortgage Securities
under that section), (f) all Mortgage Collateral shipped to Debtor for
correction under SECTION 4.6 of the Loan Agreement (and the Security Interest
continues to be perfected for 21 days after that shipment), and (g) all other
Collateral upon possession or the filing of the Financing Statements.
SECTION 4. COVENANTS. Until all commitments by Secured Party and Lenders to
extend credit under the Loan Agreement have been canceled or terminated and the
Obligation is fully paid and performed, Debtor covenants and agrees with Secured
Party for Lenders as follows:
4.1 CONCERNING THE COLLATERAL. Debtor (a) shall fully perform all of its
duties under and in connection with each transaction to which any Collateral
relates, (b) shall promptly notify Secured Party about any change in any fact or
circumstances represented or warranted by Debtor about any Collateral, (c) shall
promptly notify Secured Party of any claim, action, or proceeding affecting
title to any Collateral or the Security Interest and, at Secured Party's request
and Debtor's expense, appear in and defend that action or proceeding, (d) shall
hold in trust for Secured Party all Collateral not delivered to Secured Party
(without excusing any failure to deliver Collateral Documents to Secured Party
as required by this agreement) and ▇▇▇▇ that Collateral on Debtor's records that
it is subject to the Security Interest (but the failure to do so does not impair
the Security Interest or its priority), (e) other than collections under SECTION
4.3 below, Debtor shall pay and deliver to Secured Party all items and types of
property into which any Collateral may be converted (all of which is subject to
the Security Interest) and properly endorse, assign, or take such other action
as Secured Party may request in order to maintain and continue the Security
Interest in that property, (f) may not compromise, extend, release, or adjust
payments on any Mortgage Collateral, accept a conveyance of mortgaged property
in full or partial satisfaction of any Mortgage Loan, or release any mortgage,
deed of trust, or trust deed securing or underlying any Mortgage Collateral, and
(g) may not agree to the amendment, termination, or substitution of any Take-Out
Commitment covered by the Security Interest if that amendment, termination, or
substitution would be a Material-Adverse Event.
4.2 INSURANCE. Debtor shall keep the Collateral fully insured in the
amounts, against the risks, and with insurers as may be approved by Secured
Party, with loss payable to Secured Party as its interest (on behalf of Lenders)
may appear.
4.3 COLLECTIONS. Debtor shall, at its sole cost and expense, whether
requested to by Secured Party or in the absence of such a request, take all
actions reasonably necessary, to obtain payment, when due and payable, of all
amounts due or to become due from Obligors with respect to any Collateral.
Debtor may not agree to any rebate, refund, compromise, or extension with
respect to any Collateral or accept any prepayment on account of any Collateral
other than in a manner and to the extent consistent with or as may otherwise be
provided in various servicing agreements to which it is a party or subject.
(A) NO DEFAULT. While no Default exists, Debtor shall make all of
those collections, shall maintain such escrow accounts and otherwise comply
with the servicing agreements to which it is a party or subject, and may
otherwise retain and use the proceeds of those collections in the ordinary
course of its business.
(B) DEFAULT. While a Default exists, and upon the request of Secured
Party, Debtor shall (i) notify and direct each Obligor to make payments on
the Collateral to Secured Party for deposit into such accounts as it may
designate so as to be held as Collateral under this agreement and (ii)
otherwise turn over to Secured Party, in the form received and with any
necessary endorsements, all payments it receives in respect of any
Collateral for deposit into such accounts as Secured Party may designate to
be held as Collateral under this agreement. Secured Party may at any time
apply any amounts in
4 EXHIBIT C-1
-----------
those accounts as a payment of the Obligation, other than mortgage escrow
payments that are deposited into escrow accounts in accordance with the
applicable Guide or servicing contract.
4.4 CONCERNING DEBTOR. Without first giving Secured Party 30 days notice
(or fewer if agreed to in writing by Secured Party) of the intention to do any
of the following and performing such acts and executing and delivering to
Secured Party such additional documents as Secured Party requests in order to
continue or maintain the existence and priority of the Security Interest, Debtor
may not (a) use or transact business under any corporate, assumed, or trade
name, except as represented in the Loan Agreement, (b) relocate its chief
executive offices or principal place of business, or (c) move or surrender
possession of its books and records regarding the Collateral.
SECTION 5. DEFAULT AND REMEDIES. If a Default exists, then Secured Party may,
at its election (but subject to the terms and conditions of the Loan Agreement),
exercise any and all Rights available to a secured party under the UCC, in
addition to any and all other Rights afforded by the Loan Documents, at law, in
equity, or otherwise, including, without limitation (a) requiring Debtor to
assemble all or part of the Collateral and make it available to Secured Party at
a place to be designated by Secured Party which is reasonably convenient to
Debtor and Secured Party, (b) surrendering any policies of insurance on all or
part of the Collateral and receiving and applying the unearned premiums as a
credit on the Obligation, (c) applying by appropriate judicial proceedings for
appointment of a receiver for all or part of the Collateral (and Debtor hereby
consents to any such appointment), and (d) applying to the Obligation any cash
held by Secured Party or any Lender under the Loan Documents.
5.1 NOTICE. Reasonable notification of the time and place of any public
sale of the Collateral, or reasonable notification of the time after which any
private sale or other intended disposition of the Collateral is to be made,
shall be sent to Debtor and to any other Person entitled to notice under the
UCC. If any Collateral threatens to decline speedily in value or is of the type
customarily sold on a recognized market, Secured Party may sell or otherwise
dispose of the Collateral without notification, advertisement, or other notice
of any kind. Notice sent or given not less than five calendar days before the
taking of the action to which the notice relates is reasonable notification and
notice for the purposes of this section.
5.2 APPLICATION OF PROCEEDS. Secured Party shall apply the proceeds of
any sale or other disposition of the Collateral under this SECTION 5 in the
order and manner specified in SECTION 3.5 of the Loan Agreement. Any surplus
remaining shall be delivered to Debtor or as a court of competent jurisdiction
may direct. If the proceeds are insufficient to pay the Obligation in full,
Debtor remains liable for any deficiency.
SECTION 6. OTHER RIGHTS.
6.1 PERFORMANCE. If Debtor fails to pay when due all Taxes on any of the
Collateral, or to preserve the priority of the Security Interest in any of the
Collateral, or to keep the Collateral insured as required by this agreement, or
otherwise fail to perform any of its obligations under any Loan Documents or
Collateral Documents with respect to the Collateral, then Secured Party may, at
its option, but without being required to do so, pay such Taxes, prosecute or
defend any suits in relation to the Collateral, or insure and keep insured the
Collateral in any amount deemed appropriate by Secured Party, or take all other
action which Debtor is required, but has failed or refused, to take under the
Loan Documents or Collateral Documents. Any sum which may be expended or paid
by Secured Party under this section (including, without limitation, court costs
and attorneys' fees) shall bear interest from the dates of expenditure or
payment at the Default Rate until paid and, together with such interest, shall
be payable by Debtor to Secured Party upon demand and is part of the Obligation.
5 EXHIBIT C-1
-----------
6.2 COLLECTION.
(A) ACTIONS. When Secured Party is entitled under SECTION 4.3 above
to make collection on any Collateral, it may in its own name or in the name
of Debtor (i) compromise or extend the time of payment with respect to any
Collateral for such amounts and upon such terms as Secured Party may
determine, (ii) demand, collect, receive, receipt for, ▇▇▇ for, compound,
and give acquittance for any and all amounts due or to become due with
respect to Collateral, (iii) take control of cash and other proceeds of any
Collateral, (iv) endorse Debtor's name on any notes, acceptances, checks,
drafts, money orders, or other evidences of payment on Collateral that may
come into Secured Party's possession, (v) sign Debtor's name on any invoice
or ▇▇▇▇ of lading relating to any Collateral, on any drafts against
Obligors or other Persons making payment with respect to Collateral, on
assignments and verifications of accounts or other Collateral and on
notices to Obligors making payment with respect to Collateral, (vi) send
requests for verification of obligations to any Obligor, (vii) do all other
acts and things necessary to carry out the intent of this agreement, and
(viii) authorize any servicer in respect of any Collateral to any one or
more of the foregoing on Secured Party's behalf.
(B) OTHER MATTERS. If any Obligor fails or refuses to make payment on
any Collateral when due, Secured Party is authorized, in its sole
discretion, either in its name or in Debtor's name, to take such action as
Secured Party deems appropriate for the collection of any amounts owed with
respect to Collateral or upon which a delinquency exists. Regardless of
any other provision, however, Secured Party is never liable for its failure
to collect, or for its failure to exercise diligence in the collection of,
any amounts owed with respect to Collateral and is not under any duty
whatever to anyone except Debtor to account for funds that it actually
receives. Without limiting the generality of the foregoing, Secured Party
has no responsibility for ascertaining any maturities, calls, conversions,
exchanges, offers, tenders, or similar matters relating to any Collateral,
or for informing Debtor with respect to any of such matters (irrespective
of whether Secured Party actually has, or may be deemed to have, knowledge
thereof). Secured Party's receipt to any Obligor is a full and complete
release, discharge, and acquittance to that Obligor, to the extent of any
amount so paid to Secured Party.
6.3 POWER OF ATTORNEY. Debtor irrevocably appoints Secured Party --
acting on behalf of Lenders -- as its attorney-in-fact (with full power of
substitution) for, on behalf, and in the name of Debtor to (a) endorse and
deliver to any Person any check, instrument, or other document received by
Secured Party or any Lender that represents payment in respect of any
Collateral, (b) prepare, complete, execute, deliver, and record any assignment
of any mortgage, deed of trust, or trust deed securing any Mortgage Loan or
Mortgage Security, (c) endorse and deliver or otherwise transfer any promissory
note evidencing any Mortgage Loan or Mortgage Security and do every other thing
necessary or desirable to effect transfer of all or any Collateral, (d) take all
necessary and appropriate action with respect to any Obligation or any
Collateral, (e) commence, prosecute, settle, discontinue, defend, or otherwise
dispose of any claim relating to any Collateral, and (f) sign that Debtor's name
wherever appropriate to effect the performance of this agreement and the Loan
Agreement. This section shall be liberally, not restrictively, construed to
give the greatest latitude to Secured Party's power as the Debtor's attorney-in-
fact to collect, sell, and deliver any Collateral and all other documents
relating to it. The powers and authorities conferred on Secured Party in this
section (w) are discretionary and not obligatory on the part of Secured Party,
(x) may be exercised by Secured Party through any Person who, at the time of the
execution of a particular document, is an officer of Secured Party, (y) may not
be exercised by Secured Party unless a Default exists, and (z) is granted for a
valuable consideration, coupled with an interest, and irrevocable until -- and
all Persons dealing with Secured Party, any of its officers acting under this
section, or any substitute are fully protected in treating the powers and
authorities conferred by this section as existing and continuing in full force
and effect until advised by Secured Party that -- all commitments under the Loan
Agreement to extend credit under this agreement have been terminated or canceled
and the Obligation is fully paid and performed.
6 EXHIBIT C-1
-----------
SECTION 7. MISCELLANEOUS.
7.1 MISCELLANEOUS. Because this agreement is a "Loan Document" referred
to in the Loan Agreement, the provisions relating to Loan Documents in SECTIONS
1 AND 11 of the Loan Agreement are incorporated into this agreement by reference
the same as if included in this agreement verbatim.
7.2 TERM. This agreement terminates upon full payment and performance of
the Obligation. No Obligor is ever obligated to make inquiry of the termination
of this agreement but is fully protected in making any payments on the
Collateral directly to Secured Party.
7.3 MATTERS NOT RELEVANT. The Security Interest, Debtor's obligations,
and Secured Party's and Lenders' Rights under this agreement are not released,
diminished, impaired, or adversely affected by any one or more of the following:
(a) Secured Party's or any Lender taking or accepting any additional -- or any
release, surrender, exchange, subordination, or loss of any other -- guaranty,
assurance, or security for any of the Obligation; (b) any full or partial
release of any other Person obligated on any of the Obligation; (c) the
modification or assignment of -- or waiver of compliance with -- any other Loan
Document; (d) any present or future insolvency, bankruptcy, or lack of
corporate, partnership, or trust power of any other Person obligated on any of
the Obligation; (e) any renewal, extension, or rearrangement of any of the
Obligation, or any adjustment, indulgence, forbearance, or compromise granted to
any Person obligated on any of the Obligation; (f) any Person's neglect, delay,
omission, failure, or refusal to take or prosecute any action in connection with
any of the Obligation; (g) any existing or future affect, claim, or defense
(other than the defense of full and final payment of the Obligation) of Debtor
or any other Person against Secured Party or any Lender; (h) the
unenforceability of any of the Obligation against any Person obligated or any of
the Obligation because it exceeds the amount permitted by Law, the act of
creating it is ultra ▇▇▇▇▇, or the officers, partners, or trustees creating it
exceeded their authority or violated their fiduciary duties, or otherwise; (i)
any payment of the Obligation is held to constitute a preference under any
Debtor Law or for any other reason Secured Party or any Lender is required to
refund any payment or make payment to another Person; or (j) any Person's
failure to notify Debtor, Secured Party, or any Lender of their acceptance of
this agreement or any Person's failure to notify Debtor about the foregoing
events or occurrences, and Debtor waives any notice of any kind under any
circumstances whatsoever with respect to this agreement or any of the Obligation
other than as specifically provided in this agreement.
7.4 WAIVERS. Except to the extent expressly otherwise provided in the
Loan Documents, Debtor waives (a) any Right to require Secured Party or any
Lender to proceed against any other Person, to exhaust its Rights in the
Collateral, or to pursue any other Right which Secured Party or any Lender may
have, and (b) all Rights of marshaling in respect of the Collateral.
7.5 FINANCING STATEMENT. Secured Party may, at any time, file this
agreement or a carbon, photographic, or other reproduction of this agreement as
a financing statement, but Secured Party's failure to do so does not impair the
validity or enforceability of this agreement.
7.6 PARTIES. This agreement binds and inures to Debtor, Secured Party,
and each Lender, and their respective successors and permitted assigns. Only
those Persons may rely or raise any defense about this agreement.
(A) ASSIGNMENTS. Debtor may not assign any Rights or obligations
under this agreement without first obtaining the written consent of Secured
Party and all Lenders. Secured Party's Rights under this agreement may be
assigned to any successor agent appointed under the Loan Agreement. Any
Lender may assign, pledge, and otherwise transfer all or any of its Rights
under this agreement to any participant or transferee permitted by the Loan
Agreement.
7 EXHIBIT C-1
-----------
(B) SECURED PARTY. Secured Party is the agent for each Lender.
Secured Party may, without the joinder of any Lender, exercise any Rights
in favor of any of them under this agreement. The Rights of Secured Party
and Lenders vis-a-vis each other may be subject to other agreements between
them. Neither Debtor nor its successors or permitted assigns need to
inquire about any such agreement or be subject to the terms of it unless
they join in it and, therefore, are not entitled to the benefits of any
such agreement or entitled to rely upon or raise as a defense the failure
of any party to comply with it.
7.7 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
7.8 AMENDMENT AND RESTATEMENT. This Amended and Restated Security
Agreement amends, restates, and supersedes in its entirety, the Security
Agreement executed by the undersigned and delivered in accordance with the
Existing Loan Agreement.
REMAINDER OF PAGE INTENTIONALLY BLANK
SIGNATURE PAGE FOLLOWS
8 EXHIBIT C-1
-----------
EXECUTED as of the date first stated above.
MATRIX FINANCIAL SERVICES BANK ONE, TEXAS, N.A., AGENT, as
CORPORATION, as Debtor Secured Party
By ---------------------------------- By -------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
President
SIGNATURE PAGE AMENDED AND RESTATED SECURITY AGREEMENT
---------------------------------------
THIS DOCUMENT ▇▇▇▇▇▇ and ▇▇▇▇▇, L.L.P.
PREPARED BY AND WHEN ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
FILED RETURN TO: ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
EXHIBIT C-2
-----------
FINANCING STATEMENT
-------------------
THIS FINANCING STATEMENT IS PRESENTED TO A FILING OFFICER
FOR FILING UNDER THE UNIFORM COMMERCIAL CODE.
===============================================================================
DEBTOR'S NAME AND MAILING ADDRESS:
-------------------------------------------------------------------------------
SECURED PARTY'S NAME AND MAILING Bank One, Texas, N.A., Agent/*/
ADDRESS: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
FED. TAX ID NO. ▇▇-▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
FOR FILING OFFICER:
================================================================================
THIS FINANCING STATEMENT COVERS THE FOLLOWING PRESENT AND FUTURE TYPES AND
ITEMS OF PROPERTY AND INTERESTS, WHETHER NOW OWNED OR ACQUIRED IN THE FUTURE BY
DEBTOR
(THE "COLLATERAL"):
Terms defined on SCHEDULE 1 attached to this financing statement have the same
meanings when used below:
(a) In respect of the Mortgage Collateral all present and future:
. Mortgage Loans from time to time identified to Secured Party as
Collateral.
. All Collateral Documents in any way related to any Mortgage Loans
identified as Collateral --including, without limitation, all
promissory notes evidencing and all mortgages, deeds of trust, or
trust deeds securing those Mortgage Loans -- whether deposited
with or held by or for Secured Party under this agreement,
identified by Debtor as Collateral for a Wet Borrowing, or
otherwise.
. Private-mortgage insurance (including, without limitation, all
commitments to issue any such insurance) covering -- and all
commitments issued by FHA to insure or issued by VA to
guarantee -- any Mortgage Loans identified as Collateral.
. Security of any kind pledged by a mortgagor for any Mortgage Loan
identified as Collateral.
. Casualty insurance assigned to Debtor in connection with any
Mortgage Loan identified as Collateral.
_______________________
* Secured Party is serving as Agent under the Loan Agreement, and the
security interest evidenced by this financing statement, as amended from
time to time, is granted to Secured Party in that capacity on behalf of
Lenders.
EXHIBIT C-2
-----------
. Mortgage Securities deposited with or held by or for Secured
Party under the Loan Documents or registered by book-entry in
Secured Party's name under the Loan Documents.
. Guaranties related to Mortgage Securities identified as
Collateral.
. Take-Out Commitments held by Debtor for any Mortgage Loans or
Mortgage Securities identified as Collateral, Rights to deliver
those Mortgage Loans or Mortgage Securities, as the case may be,
to the investors or other purchasers under those Take-Out
Commitments, and all proceeds resulting from the sale of any of
those Mortgage Loans or Mortgage Securities under those Take-Out
Commitments.
. Any Collateral otherwise described in this agreement that may
from time to time be delivered (a) to an investor under SECTION
4.5 of the Loan Agreement until purchased and paid for by that
investor or (b) for correction under SECTION 4.6 of the Loan
Agreement.
(b) In respect of the Servicing Portfolio, all present and future:
. Servicing Rights pertaining in any way to Debtor's Servicing
Contracts with FHLMC, FNMA, or GNMA, or any private investor
together with all present and future sums paid or payable to
Debtor and on account of, or as a result of the performance of,
those Servicing Rights, whether as compensation for the
performance by Debtor, damages related to any of the foregoing,
amounts payable upon cancellation or termination hereof, or
otherwise.
. Servicing Receivables.
(c) The Warehouse Account, Settlement Account, and Servicing Account
and all amounts deposited in them or represented by them.
(d) In respect of all of the Collateral otherwise described in
SECTIONS 2(A), 2(B), and 2(C), all present and future.
. Personal property, contract rights, accounts, and general
intangibles of any kind whatsoever relating to any Collateral.
. All receivables arising due to a P&I Payment, T&I Payment, or a
Foreclosure Payment.
. All files, surveys, certificates, correspondence, appraisals,
tapes, discs, cards, accounting records, and other information
and data of Debtor relating to any other Collateral -- including,
without limitation, all information, data, tapes, discs, and
cards necessary to administer and service any Mortgage Loan
identified as Collateral.
. Cash and noncash proceeds of any Collateral.
The security interest referred to in this financing statement is subject
and subordinate in each and every respect (a) to all rights, powers and
prerogatives of one or more of the following: the Federal Home Loan Mortgage
Corporation ("▇▇▇▇▇▇▇ MAC"), the Federal National Mortgage Association ("▇▇▇▇▇▇
MAE"), the Government National Mortgage Corporation ("▇▇▇▇▇▇ ▇▇▇"), or such
other investors that own mortgage loans, or which guaranty payments on
securities based on and backed by pools of mortgage loans, identified on the
exhibit(s) or schedule(s) attached to this financial statement (the
"INVESTORS"); and (b) to all claims of an Investor arising out of any and all
defaults and outstanding obligations of the debtor to the Investor. Such rights,
powers and prerogatives of the Investors may include, without limitation, one or
more of the following: the right of an Investor to disqualify the debtor from
participating in a mortgage selling or servicing program or a securities
guaranty program with the Investor; the right to terminate contract rights of
the debtor relating to such a mortgage selling or servicing program or
securities guaranty program; and the right to transfer and sell all or any
portion of such contract rights following the termination of those rights.
The Security Interest created by this financial statement is subject and
subordinate to all rights, powers, and prerogatives of ▇▇▇▇▇▇ ▇▇▇ under and in
connection with (i) the terms and conditions of that certain Acknowledgment
Agreement, with respect to the Security Interest, by and between ▇▇▇▇▇▇ Mae,
Mortgage Financial Service Corporation (the "DEBTOR") and Bank One, Texas, N.A.,
(ii) the Mortgage Selling and Servicing Contract and all applicable Pool
Purchase Contracts between ▇▇▇▇▇▇ ▇▇▇ and the Debtor, and (iii) the Selling
Guide, Servicing Guide, and other Guides, as each of such Guides is amended from
time to time ((ii) and (iii) collectively, the "▇▇▇▇▇▇ MAE CONTRACT"), which
rights, powers, and prerogatives include, without limitation, the right of
▇▇▇▇▇▇ ▇▇▇ to terminate the ▇▇▇▇▇▇ Mae Contract with or without cause and the
right to sell, or have transferred, the Servicing Rights as therein provided.
d-0 2 EXHIBIT C-2
-----------
DEBTOR: SECURED PARTY:
MATRIX FINANCIAL SERVICES CORPORATION BANK ONE, TEXAS, N.A., as Agent
for Lenders*
By __________________________ By ________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Executive Vice President Vice President
d-0 3 EXHIBIT C-2
----------
SCHEDULE I
----------
DEFINITIONS ATTACHED TO FINANCING STATEMENT
FROM MATRIX FINANCIAL SERVICES CORPORATION, AS DEBTOR, TO
BANK ONE, TEXAS, N.A., AGENT, AS SECURED PARTY
COLLATERAL DOCUMENTS means the documents and other items described on
SCHEDULE 4.3 to the Loan Agreement and required to be delivered to Secured Party
under SECTION 4.3 of the Loan Agreement.
FHA means the Federal Housing Administration within the United States
Department of Housing and Urban Development or its successor.
FHLMC means the Federal Home Loan Mortgage Corporation or its successor.
FNMA means the Federal National Mortgage Association or its successor.
FORECLOSURE PAYMENT means the unreimbursed purchase price paid by Debtor to
repurchase a defaulted Mortgage Loan out of a Mortgage Pool in accordance with
Debtor's obligations under the applicable Servicing Contract.
GNMA means the Government National Mortgage Association or its successor.
LENDERS means, at any time, the lenders that are party to the Loan
Agreement.
LOAN AGREEMENT means the Loan Agreement dated as of January 31, 1996,
between Debtor, Lenders, and Secured Party as Agent for Lenders, as renewed,
extended, amended, or restated.
MORTGAGE SECURITY means a security -- in respect of an underlying pool of
related Mortgage Loans -- that provides for payment by the issuer to the holder
of specified principal installments and a fixed-interest rate on the unpaid
balance, with all prepayments being passed through to the holder, whether issued
in certificate or book-entry form.
MORTGAGE LOAN means a loan that is not a construction or non-residential
commercial loan, is evidenced by a valid promissory note, and is secured by a
mortgage, deed of trust, or trust deed that grants a perfected first-priority
lien on the residential-real property.
P&I PAYMENT means an unreimbursed advance or payment by Debtor to effect
the timely payment of scheduled principal and interest on Mortgage Securities
that are backed by a Mortgage Pool serviced by Debtor in accordance with
Debtor's obligations under the applicable Servicing Contract to cover a short-
fall between the principal and interest collected from mortgagors in respect of
that Mortgage Pool and the principal and interest due on those Mortgage
Securities.
SERVICING PORTFOLIO means, at any time, the total unpaid principal amount
of Mortgage Loans serviced by Debtor for a fee other than any Mortgage Loans
serviced by Debtor under a subservicing agreement or a master servicing
agreement.
SERVICING ACCOUNT means a non-interest bearing deposit account established
by Debtor with Agent -- styled and numbered "Matrix Servicing Account," Account
No. 1886479342 -- for deposit of P&I Borrowings, T&I Borrowings, Foreclosure
Borrowings, FHLMC Borrowings, and payments on the Obligation related to P&I
Borrowings, T&I Borrowings, Foreclosure Borrowings and FHLMC Borrowings.
SETTLEMENT ACCOUNT means a non-interest bearing deposit account established
by Debtor with Agent -- styled and numbered "Matrix Settlement Account," Account
No. 1886479318 -- for deposit of payments from investors, the settlement of
collections from Mortgage Securities in connection with Mortgage Collateral, and
deposit of payments on the Obligation.
T&I PAYMENT means an unreimbursed advance or payment by Debtor to cover
tax-and insurance-escrow payments not paid when required by a mortgagor under a
Mortgage Loan in accordance with Debtor's obligations under the applicable
Servicing Contract.
TAKE-OUT COMMITMENT means a written and binding commitment or purchase
agreement from an investor or other purchaser to purchase Mortgage Securities or
Mortgage Loans.
VA means the Veteran's Administration or its successor.
WAREHOUSE ACCOUNT means a non-interest bearing deposit account established
by Debtor with Secured Party -- styled and numbered "Matrix Funding Account,"
Account No. 1886479326 -- for deposit of borrowings under the Loan Agreement,
payments from investors in or the settlement of Collateral, and payments of
under the Loan Agreement.
d-0 4 EXHIBIT C-2
-----------
WET BORROWING means a borrowing under the Loan Agreement for which all of
the Collateral Documents have not been delivered to Lender in accordance with
SECTION 4.3 of the Loan Agreement.
d-0 5 EXHIBIT C-2
-----------
EXHIBIT C-3
-----------
SHIPPING REQUEST
----------------
AGENT: Bank One, Texas, N.A. DATE:___________, 199__
BORROWER: Matrix Financial Services Corporation
SHIPMENT # _____________ SHIPMENT $_____________________
POOL #_________________________ # OF LOANS ____________________
================================================================================
This request is delivered under the Amended and Restated Loan Agreement (as
renewed, extended, or amended the "LOAN AGREEMENT") dated as of January 31,
1997, between Borrower, Agent, and certain Lenders. Terms defined in the Loan
Agreement have the same meanings when used -- unless otherwise defined -- in
this request.
1. Borrower requests Agent to (a) forward the shiplist and collateral
files for the Mortgage Loans identified on it to the following Approved Investor
or its custodian or servicer; (b) complete the endorsement of the promissory
notes for those Mortgage Loans from Borrower to that Approved Investor or its
servicer or custodian as follows: _________________________________; and (c)
place them along with the blank assignments furnished to Agent in the
appropriate collateral files:
_______________________________
_______________________________
_______________________________
_______________________________
Agent should ship the whole files of Collateral Documents in Agent's possession
for those Mortgage Loans by either Federal Express or such other courier service
as Borrower has designated to Agent as "approved" for that purpose. The courier
used must be acting as an independent-contractor bailee solely on behalf of
Agent for the benefit of Agent and Lenders, but Agent is not responsible for any
delays in shipment caused by any actions or inactions by that courier.
Borrower's completed air ▇▇▇▇ for shipment accompanies this request.
2. On and as of the date of this request, Borrower certifies, represents
and warrants to Agent for Lenders that (a) Borrower's representations and
warranties in the Loan Documents are true and correct in all material respects
except to the extent that (i) a representation or warranty speaks to a specific
date or (ii) the facts on which a representation or warranty is based have
changed by transactions or conditions contemplated or permitted by the Loan
Documents, and (b) no Default, Potential Default, or Borrowing Excess exists.
MATRIX FINANCIAL SERVICES CORPORATION,
as Borrower
By ___________________________
(Name) ___________________________
/1/(Title) ___________________________
_______________________
/1/ Must be a Responsible Officer of -- or a Person designated in writing by a
Responsible Officer of -- Borrower.
d-0 EXHIBIT C-3
-----------
[LETTERHEAD OF BANK ONE, TEXAS, N.A. APPEARS HERE]
EXHIBIT C-4
-----------
BAILEE LETTER FOR INVESTORS
---------------------------
_________________________
_________________________
_________________________
The enclosed mortgage notes and other documents ("COLLATERAL"), as more
particularly described on the attached schedule, have been assigned and pledged
to Bank One, Texas, N.A., as Agent ("AGENT") for itself and certain other
Lenders ("LENDERS"), as collateral under the Amended and Restated Loan Agreement
(as renewed, extended, amended, or restated, the "LOAN AGREEMENT") dated as of
January 31, 1997, between Matrix Financial Services Corporation ("BORROWER"),
Agent, and Lenders.
The Collateral is being delivered to you for purchase under an existing Take-Out
Commitment (as defined in the Loan Agreement). Either payment in full for the
Collateral or the Collateral itself must be received by Agent within 45 days
after the date of this letter. Until that time, you are deemed to be holding
the Collateral in trust, subject to the security interest granted to Agent for
Lenders and as Agent's bailee in accordance with the applicable provisions of
the Uniform Commercial Code. No property interest in the Collateral is
transferred to you until Agent receives the greater of either (a) the agreed
purchase price of the Collateral or (b) $___________, which is the full amount
of the advances under the Loan Agreement in respect of the Collateral. If you
receive conflicting instructions regarding the Collateral from Borrower or
Agent, you agree to act in accordance with Agent's instructions. AGENT RESERVES
THE RIGHT, AT ANY TIME BEFORE IT RECEIVES FULL PAYMENT, TO NOTIFY YOU AND
REQUIRE THAT YOU RETURN THE COLLATERAL TO AGENT.
Payment for the Collateral must be made by wire transfer of immediately
available funds to:
Bank One, Texas, N.A., Agent Account Number 1886479318
ABA Number ▇▇▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Further Credit - Matrix Settlement Account TEL (▇▇▇) ▇▇▇-▇▇▇▇
FAX (▇▇▇) ▇▇▇-▇▇▇▇
BY ACCEPTING THE COLLATERAL DELIVERED TO YOU WITH THIS LETTER, YOU CONSENT TO BE
AGENT'S BAILEE ON THE TERMS DESCRIBED IN THIS LETTER. If you fail to make full
payment to Agent for it within 45 days after the date of this letter, you are
instructed to return all of the Collateral to Agent. The preceding provision in
no way affects or impairs any claim or cause of action against you in respect of
your Take-Out Commitment.
This letter binds you and your successors, assigns, trustees, conservators, and
receivers and inures to Agent, Lenders, and their respective successors and
assigns.
Very truly yours,
BANK ONE, TEXAS, N.A., as Agent
By ___________________________
(Name) ___________________________
(Title) ___________________________
d-0 EXHIBIT C-4
-----------
[LETTERHEAD OF BANK ONE, TEXAS, N.A. APPEARS HERE]
EXHIBIT C-5
-----------
BAILEE LETTER FOR POOL CUSTODIAN
--------------------------------
_________________________
_________________________
_________________________
The enclosed mortgage notes and other documents (the "COLLATERAL"), as more
particularly described on the attached schedule, have been assigned and pledged
to Bank One, Texas, N.A., as Agent ("AGENT") for itself and certain other
lenders ("LENDERS"), as Collateral under the Amended and Restated Loan Agreement
(as renewed, extended, amended, or restated, the "LOAN AGREEMENT") dated as of
January 31, 1997, between Matrix Financial Services Corporation ("BORROWER"),
Agent, and Lenders.
The Collateral is being delivered to you for pooling in connection with the
issuance of Mortgage Securities (as defined in the Loan Agreement). Within 45
days after the date of this letter (a) payment in full for the Collateral must
be paid to Agent, (b) the Mortgage Securities must be received by Agent if in
certificated form or on its behalf in respect of Mortgage Securities in book-
entry form, or (c) the Collateral must be returned to and received by Agent.
Until that time, you are deemed to be holding the Collateral in trust, subject
to the security interest granted to Agent for Lenders as Agent's bailee in
accordance with the applicable provisions of the applicable Uniform Commercial
Code. No property interest in the Collateral is deemed to be transferred to you
until Agent receives either (a) the greater of either (i) the agreed purchase
price of the Collateral or (ii) $___________, which is the full amount of the
advances under the Loan Agreement in respect of the Collateral or (b) Mortgage
Securities have been received by Agent or on its behalf in respect of Mortgage
Securities in book-entry form. If you receive conflicting instructions
regarding the Collateral from Borrower or Agent, you agree to act in accordance
with Agent's instructions. If you deliver any of the enclosures to another
party, this letter must accompany those items. AGENT RESERVES THE RIGHT, AT ANY
TIME BEFORE THE MORTGAGE SECURITIES HAVE BEEN ISSUED, TO NOTIFY YOU AND REQUIRE
THAT YOU RETURN THE COLLATERAL TO AGENT.
If applicable above, payment for the Collateral must be made by the purchaser's
wire transfer of immediately available funds to:
Bank One, Texas, N.A., Agent Account Number 1886479318
ABA Number ▇▇▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Further Credit - Matrix Settlement Account TEL (▇▇▇) ▇▇▇-▇▇▇▇
FAX (▇▇▇) ▇▇▇-▇▇▇▇
If applicable above, Mortgage Securities in certificated form must be sent to:
Bank One, Texas, N.A., Agent
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
d-0 EXHIBIT C-5
-----------
BY ACCEPTING THE COLLATERAL DELIVERED TO YOU WITH THIS LETTER, YOU CONSENT TO BE
AGENT'S BAILEE ON THE TERMS DESCRIBED IN THIS LETTER. AGENT REQUESTS THAT YOU
ACKNOWLEDGE RECEIPT OF THE ENCLOSED COLLATERAL AND THIS LETTER BY SIGNING AND
RETURNING TO AGENT THE ENCLOSED COPY OF THIS LETTER, BUT YOUR FAILURE TO DO SO
DOES NOT NULLIFY YOUR CONSENT.
This letter binds you and your successors, assigns, trustees, conservators, and
receivers and inures to Agent, Lenders, and their respective successors and
assigns.
Very truly yours,
BANK ONE, TEXAS, N.A., as Agent
By_________________________________
(Name)_____________________________
(Title)____________________________
ACKNOWLEDGED AND AGREED as of _________________________, 199____.
[NAME OF POOL CUSTODIAN]
By___________________________
(Name)_______________________
(Title)______________________
Member FDIC
d-0 2 EXHIBIT C-5
-----------
EXHIBIT C-6
-----------
TRUST RECEIPT AND AGREEMENT
---------------------------
AGENT: Bank One, Texas, N.A. DATE:________, 199____
BORROWER: Matrix Financial Services Corporation
--------------------------------------------------------------------------------
This trust receipt and agreement is delivered under the Amended and
Restated Loan Agreement (as renewed, extended, or amended the "LOAN AGREEMENT")
dated as of January 31, 1997, between Borrower, Agent, and certain Lenders.
Terms defined in the Loan Agreement have the same meanings when used -- unless
otherwise defined -- in this trust receipt and agreement.
In accordance with SECTION 4.6 of the Loan Agreement, Borrower requests
delivery by Agent to Borrower of the entire mortgage file of Collateral
Documents for the Mortgage Loan and for the corrections described as follows:
Mortgage Loan Number: ___________________________________
Original Amount: $___________________________________
Corrections: ___________________________________
___________________________________
___________________________________
Borrower agrees that (a) these Collateral Documents are delivered to
Borrower solely for the purpose of making these corrections, (b) these
Collateral Documents are and continue to be subject to Lender Liens under the
Loan Documents, (c) Borrower shall hold these Collateral Documents as bailee and
trustee for Agent, and Lenders, and (d) Borrower may not deliver any of these
Collateral Documents to a third party unless (i) it is necessary in order to
complete the corrections, and (ii) Borrower notifies that third party that the
Collateral Documents are and continue to be subject to Lender Liens under the
Loan Documents, and obtains from that third party its agreement to hold those
Collateral Documents as bailee and trustee for Agent and Lenders until they have
been returned to Agent or the amount of the Borrowing Base attributable to the
related Mortgage Loan has been fully paid to Agent for Lenders to be applied to
the Obligation.
On and as of the date of this receipt and agreement, Borrower certifies,
represents, and warrants to Agent for Lenders that (a) Borrower's
representations and warranties in the Loan Documents are true and correct in all
material respects except to the extent that (i) a representation or warranty
speaks to a specific date or (ii) the facts on which a representation or
warranty is based have changed by transactions or conditions contemplated or
permitted by the Loan Documents, (b) no Default, Potential Default, or Borrowing
Excess exists, and (c) this shipment will not result in Collateral Documents for
Mortgage Loans with more than a total face amount of $1,000,000 being
outstanding for correction.
d-0 EXHIBIT C-6
-----------
Borrower acknowledges receipt of the Collateral Documents referred to
above.
MATRIX FINANCIAL SERVICES CORPORATION,
as Borrower
By______________________________________
(Name)__________________________________
/1/(Title)______________________________
_______________________
/1/ Must be a Responsible Officer -- or a Person designated in writing by a
Responsible Officer -- of Borrower.
d-0 EXHIBIT C-7
-----------
EXHIBIT C-7
-----------
RELEASE REQUEST
---------------
AGENT: Bank One, Texas, N.A. Date: ________________, 199___
BORROWER: Matrix Financial Services Corporation
--------------------------------------------------------------------------------
This request is delivered under the Amended and Restated Loan Agreement (as
renewed, extended, or amended the "LOAN AGREEMENT") dated as of January 31,
1997, between Borrower, Agent, and certain Lenders. Terms defined in the Loan
Agreement have the same meanings when used -- unless otherwise defined -- in
this request.
Borrower requests Agent to release the Lender Liens under the Loan
Documents in the Collateral described on the attached SCHEDULE 1.
On and as of the date of this request, Borrower certifies, represents, and
warrants to Agent for Lenders that (a) Borrower's representations and warranties
in the Loan Documents are true and correct in all material respects except to
the extent that (i) a representation or warranty speaks to a specific date or
(ii) the facts on which a representation or warranty is based have changed by
transactions or conditions contemplated or permitted by the Loan Documents, and
(b) no Default, Potential Default, or Borrowing Excess exists or occurs as a
result of the requested release other than any Borrowing Excess that has been
eliminated by payment which has been made to Agent.
MATRIX FINANCIAL SERVICES CORPORATION,
as Borrower
By _____________________________
(Name) _____________________________
/1/(Title) _____________________________
______________________
/1/ Must be a Responsible Officer of -- or a Person designated in writing by a
Responsible officer of -- Debtor.
d-0 EXHIBIT C-7
-----------
EXHIBIT D-1
-----------
BORROWING REQUEST
-----------------
AGENT: Bank One, Texas, N.A. DATE: _________, 199___
BORROWER: Matrix Financial Services Corporation
================================================================================
This request is delivered under the Amended and Restated Loan Agreement (as
renewed, extended, and amended, the "LOAN AGREEMENT") dated as of January 31,
1997, between Borrower, Agent, and certain Lenders. Terms defined in the Loan
Agreement have the same meanings when used -- unless otherwise defined -- in
this request.
Borrower requests $____________________ in Borrowings (collectively, the
"REQUESTED BORROWING") to be funded on _______________, 199___/1/ (the REQUESTED
BORROWING DATE") in the one or more Borrowing-Purpose Categories indicated on
the attached schedule, which has been completed as to all other relevant
information.
Borrower certifies that as of the Requested Borrowing Date -- after giving
effect to the Requested Borrowing -- (a) the representations and warranties of
Borrower in the Loan Documents are true and correct in all material respects
except to the extent that (i) a representation or warranty speaks to a specific
date or (ii) the facts on which a representation or warranty is based have
changed by transactions or conditions contemplated or permitted by the Loan
Documents, (b) no Default or Potential Default exists, (c) the extension of the
Requested Borrowing does not cause any Borrowing Excess to exist, (d) Borrower
has timely delivered a Collateral-Delivery Notice, if applicable, (e) all
Collateral Documents required by the Loan Agreement to be delivered to Agent in
connection with the Requested Borrowing have been delivered to Agent, and (f)
Borrower has otherwise complied with all conditions of the Loan Documents to
permit the Requested Borrowing to be extended.
MATRIX FINANCIAL SERVICES
CORPORATION, as Borrower
By______________________________________
(Name)__________________________________
/2/(Title)______________________________
/1/ Must be no later than (a) the third business Day after request if the
Requested Borrowings involves any LIBOR Borrowing or (b) the business Day
of request otherwise.
/2/ Must be a Responsible Officer of -- or an individual designated to Agent in
writing by a Responsible Officer of --Borrower.
d-0 EXHIBIT D-1
-----------
SCHEDULE TO BORROWING REQUEST
-----------------------------
DATED _______________, 199___; FOR $_____________________
[Complete EACH applicable box or ▇▇▇▇ N.A.]
==========================================================================================
BORROWING- AMOUNT/1/ EXTENDED BORROWING-PRICE CATEGORY INTEREST
PURPOSE CATEGORY BY PERIOD
ENDING/2/
==========================================================================================
Warehouse $ [_] Ratable [_] Base Rate _________, 19__
Borrowing (Dry) [_] Swing [_] Fed-Funds Rate
[_] LIBOR (not for Swing)
[_] (check and indicate
amount if Committed-
B/C-Paper Borrowing -
$_______________)
[_] (check and indicate
amount if Uncommitted
-B/C-Paper Borrowing -
$_______________)
[_] (check and indicate
amount if Second-Lien
Borrowing -
$_______________)
[_] (check and indicate
amount if Repurchase
Borrowing -
$_______________)
------------------------------------------------------------------------------------------
/1/ At least $100,000 for Term-Line Borrowing or $25,000 for each other
Borrowing-purpose Category.
/2/ Must be a 1, 2, or 3, months or other period acceptable to Agent (and to
Determining Lenders if longer than 6 months).
d-0 2 EXHIBIT D-1
-----------
------------------------------------------------------------------------------------------
Warehouse $ [_] Ratable [_] Base Rate _________, 19__
Borrowing (Wet) [_] Swing [_] Fed-Funds Rate
[_] LIBOR (not for Swing)
[_] (check and indicate
amount if Committed-
B/C-Paper Borrowing -
$_______________)
[_] (check and indicate
amount if Uncommitted
-B/C-Paper Borrowing -
$_______________)
[_] (check and indicate
amount if Second-Lien
Borrowing -
$_______________)
[_] (check and indicate
amount if Repurchase
Borrowing -
$_______________)
------------------------------------------------------------------------------------------
Warehouse $ Ratable [_] Base Rate _________, 19__
Borrowing [_] Fed-Funds Rate
(Gestation) [_] LIBOR
------------------------------------------------------------------------------------------
Working-Capital $ Ratable [_] Base Rate _________, 19__
Borrowing (P&I) [_] Fed-Funds Rate
[_] LIBOR
------------------------------------------------------------------------------------------
Working-Capital $ Ratable [_] Base Rate _________, 19__
Borrowing (T&I) [_] Fed-Funds Rate
[_] LIBOR
------------------------------------------------------------------------------------------
Working-Capital $ Ratable [_] Base Rate _________, 19__
Borrowing [_] Fed-Funds Rate
(Foreclosure) [_] LIBOR
------------------------------------------------------------------------------------------
Term-Line $ Ratable [_] Base Rate _________, 19__
Borrowing [_] Fed-Funds Rate
[_] LIBOR
==========================================================================================
d-0 3 EXHIBIT D-1
-----------
EXHIBIT D-2
-----------
COLLATERAL-DELIVERY NOTICE
--------------------------
AGENT: Bank One, Texas, N.A. DATE:______, 199____
BORROWER: Matrix Financial Services Corporation
================================================================================
This notice is delivered under the Amended and Restated Loan Agreement (as
renewed, extended, and amended the "LOAN AGREEMENT") dated as of January 31,
1997, between Borrower, Agent, and certain Lenders. Terms defined in the Loan
Agreement have the same meanings when used -- unless otherwise defined -- in
this notice.
Under SECTION 4.3 and other applicable provisions of the Loan Agreement,
Borrower submits the following Collateral under -- and subject to the Lender
Liens created by -- the Loan Documents [check applicable box(es)]:
[_] MORTGAGE LOANS FOR DRY BORROWING. Borrower (a) is delivering to Agent
the Collateral Documents required by PART A of SCHEDULE 4.3 to the
Loan Agreement for the Mortgage Loans described on the attached ANNEX
1 -- which is a data-processing print-out meeting the requirements of
PART A.8. on that SCHEDULE 4.3 -- and (b) confirms that those Mortgage
Loans and all related Collateral Documents are subject to the Lender
Liens created by the Loan Agreement.
[_] MORTGAGE LOANS FOR WET BORROWING. Borrower (a) is delivering to Agent
the Collateral Documents required by PART B of SCHEDULE 4.3 to the
Loan Agreement for the Mortgage Loans described on the attached ANNEX
2 -- which is a data-processing print-out meeting the requirements of
PART B.3. on that SCHEDULE 4.3, (b) shall deliver to Agent the
Collateral Documents required by PART A of that SCHEDULE 4.3 for --
before the expiration of the Wet Period for the Borrowings made on the
basis of -- those Mortgage Loans, and (c) confirms that those Mortgage
Loans and all related Collateral Documents are subject to the Lender
Liens created by the Loan Agreement.
[_] MORTGAGE SECURITIES FOR DRY BORROWING. Borrower (a) is delivering to
Agent the Collateral Documents required by PART C of SCHEDULE 4.3 to
the Loan Agreement for the Mortgage Securities described on the
attached ANNEX 3 (the Mortgage Pools for which consist of Mortgage
Loans that were --before issuance of those Mortgage Securities --
Eligible-Mortgage Loans constituting part of the Collateral) and (b)
confirms that those Mortgage Securities and all related Collateral
Documents are subject to the Lender Liens created by the Loan
Agreement.
On and as of the date of this notice, Borrower certifies, represents,
warrants, and covenants to or with Agent for Lenders that:
(a) For each Mortgage Loan described on either ANNEX 1 or 2 to this
notice, Borrower (i) holds each of the items required by SECTION 4.3
of the Loan Agreement, (ii) holds those items in trust for Agent on
behalf of Lenders, (iii) upon request or instructions from Agent from
time
d-0 EXHIBIT D-2
-----------
to time and at any time, shall deliver those items to Agent any
other Person designated by Agent, and (iv) may not deliver those
items --or grant, transfer, or assign any interest in any of them --
to any Person except Agent without first obtaining Agent's written
consent.
(b) All of the items that Borrower is required to furnish to Agent under
the Loan Agreement in connection with this notice accompany it, all of
those items are accurate and what they purport to be, and all of the
Collateral described in this notice or its schedules conform in all
respects to the requirements of the Loan Agreement, including, without
limitation, the requirements of eligibility applicable to that
Collateral on SCHEDULE 4.1 to the Loan Agreement.
(c) The representations and warranties of Borrower in the Loan Documents
are true and correct in all material respects except to the extent
that (i) a representation or warranty speaks to a specific date or
(ii) the facts on which a representation or warranty is based have
changed by transactions or conditions contemplated or permitted by the
Loan Documents.
(d) No Default or Potential Default exists.
MATRIX FINANCIAL SERVICES CORPORATION
as Borrower
By _____________________________
(Name) _____________________________
/1/(Title) _____________________________
______________________
/1/ Must be a Responsible Officer of -- or an individual designated in writing
to Agent by a Responsible Officer of --Borrower.
d-0 2 EXHIBIT D-2
-----------
EXHIBIT D-3
-----------
BORROWING-BASE REPORT
---------------------
AGENT: Bank One, Texas, N.A. DATE:_______, 199___
BORROWER: Matrix Financial Services Corporation
================================================================================
This report is delivered under the Amended and Restated Loan Agreement (as
renewed, extended, and amended, the "LOAN AGREEMENT") dated as of January 31,
1997, between Borrower, Agent, and certain Lenders. Terms defined in the Loan
Agreement have the same meanings when used -- unless otherwise defined -- in
this report. Agent has calculated the Borrowing Base and its various components
as of the date of this report.
TABLE 1--WAREHOUSE BORROWINGS
-----------------------------
===================================================================================================================================
FACE WAREHOUSE
===================================================================================================================================
1. RECONCILIATION FOR DRY BORROWINGS (EXCLUDING GESTATION BORROWINGS)
-----------------------------------------------------------------------------------------------------------------------------------
(a) Ending Collateral balance (last report) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(b) Collateral removed (since last report) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(c) Beginning Collateral balance -- Line 1(a) MINUS Line 1(b) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(d) Collateral received (since last report) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(e) New Collateral balance (today) -- Line 1(c) PLUS Line 1(d) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(f) Ineligibles -- expired 120-day limit (or after applicable limit) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(g) Ineligibles -- expired Shipping Period $ $
-----------------------------------------------------------------------------------------------------------------------------------
(h) Ineligibles -- expired Correction Period $ $
-----------------------------------------------------------------------------------------------------------------------------------
(i) Jumbo Sublimit exclusions $ $
-----------------------------------------------------------------------------------------------------------------------------------
(j) Other ineligibles $ $
-----------------------------------------------------------------------------------------------------------------------------------
(k) Total Ineligibles -- TOTAL of Lines 1(f) THROUGH 1(j) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(l) Total Collateral amount-- Line 1(e) MINUS Line 1(k) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(m) If Agent or Determining Lenders elect -- Market Value of items in Line 1(l) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(n) Lesser of EITHER Lines 1(l) OR -- if applicable -- 1(m) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(o) Portion of Collateral amount attributable to Eligible-Committed-B/C-
Paper Loans which have been held for more than 60 calendar days $ $
-----------------------------------------------------------------------------------------------------------------------------------
(p) Portion of Collateral amount attributable to Eligible-Uncommitted-B/C-
Paper Loans $ $
-----------------------------------------------------------------------------------------------------------------------------------
d-0 EXHIBIT D-3
-----------
-----------------------------------------------------------------------------------------------------------------------------------
(q) Portion of Collateral amount attributable to Eligible-Second-Lien-
Loans which have been held for more than 60 calendar days $ $
-----------------------------------------------------------------------------------------------------------------------------------
(r) Portion of Collateral amount attributable to Eligible-Repurchased $ $
Loans
-----------------------------------------------------------------------------------------------------------------------------------
(s) Portion of Collateral amount attributable to Eligible-Mortgage $ $
Collateral (other than as listed in Lines (o) through (r) above)
-----------------------------------------------------------------------------------------------------------------------------------
2. RECONCILIATION FOR WET BORROWINGS
-----------------------------------------------------------------------------------------------------------------------------------
(a) Ending Collateral balance (last report) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(b) Collateral removed (since last report) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(c) Beginning Collateral balance -- Line 2(a) MINUS Line 2(b) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(d) Collateral received (since last report) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(e) New Collateral Balance $ $
-----------------------------------------------------------------------------------------------------------------------------------
(f) Ineligibles -- expired Wet Period $ $
-----------------------------------------------------------------------------------------------------------------------------------
(g) Jumbo Sublimit exclusions $ $
-----------------------------------------------------------------------------------------------------------------------------------
(h) Other ineligibles $ $
-----------------------------------------------------------------------------------------------------------------------------------
(i) Total Ineligibles -- TOTAL of Lines 2(f), 2(g), and 2(h) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(j) Total Wet Collateral $ $
-----------------------------------------------------------------------------------------------------------------------------------
(k) If Agent or Determining Lender's elect -- Market Value of items in Line 2(j) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(l) Lesser of EITHER Lines 2(j) OR -- if applicable -- 2(k) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(m) Portion of Collateral amount attributable to Eligible-Uncommitted-B/C-Paper Loans $ $
-----------------------------------------------------------------------------------------------------------------------------------
(n) Portion of Collateral amount attributable to Eligible-Repurchased Loans $ $
-----------------------------------------------------------------------------------------------------------------------------------
(o) Portion of Collateral amount attributable to Eligible-Mortgage
Collateral (other than as listed in Lines 2(m) and 2(n) above) $ $
-----------------------------------------------------------------------------------------------------------------------------------
3. RECONCILIATION FOR GESTATION BORROWINGS
-----------------------------------------------------------------------------------------------------------------------------------
(a) Ending Collateral balance (last report) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(b) Collateral removed (since last report) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(c) Beginning Collateral balance -- Line 3(a) MINUS Line 3(b) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(d) Collateral received (since last report) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(e) New Collateral balance (today) -- Line 3(c) PLUS Line 3(d) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(f) Ineligibles $ $
-----------------------------------------------------------------------------------------------------------------------------------
(g) Total Collateral amount -- Line 3(e) MINUS Line 3(f) $ $
-----------------------------------------------------------------------------------------------------------------------------------
(h) Portion of Line 3(g) identified to a security settlement $ $
-----------------------------------------------------------------------------------------------------------------------------------
(i) Portion of Line 3(g) not identified to a whole-loan settlement $ $
-----------------------------------------------------------------------------------------------------------------------------------
4. BORROWING BASE FOR MORTGAGE COLLATERAL
-----------------------------------------------------------------------------------------------------------------------------------
(a) Dry Collateral Value
-----------------------------------------------------------------------------------------------------------------------------------
d-0 2 EXHIBIT D-3
-----------
-----------------------------------------------------------------------------------------------------------------------------------
(b) 95% of Line 1(o) $
-----------------------------------------------------------------------------------------------------------------------------------
(c) 97% of Line 1(p) $
-----------------------------------------------------------------------------------------------------------------------------------
(d) 95% of Line 1(q) $
-----------------------------------------------------------------------------------------------------------------------------------
(e) 97% of Line 1(r) $
-----------------------------------------------------------------------------------------------------------------------------------
(f) 98% of Line 1(s) $
-----------------------------------------------------------------------------------------------------------------------------------
(g) Total Dry Collateral Value - Line 4(b) PLUS Line 4(c) PLUS Line 4(d) $
PLUS Line 4(e) PLUS Line 4(f)
-----------------------------------------------------------------------------------------------------------------------------------
(h) Wet Collateral Value
-----------------------------------------------------------------------------------------------------------------------------------
(i) 97% of Line 2(m) $
-----------------------------------------------------------------------------------------------------------------------------------
(j) 97% of Line 2(n) $
-----------------------------------------------------------------------------------------------------------------------------------
(k) 98% of Line 2(o) $
-----------------------------------------------------------------------------------------------------------------------------------
(l) Total Wet Collateral Value - Line 4(i) PLUS Line 4(j) PLUS Line 4(k) $
-----------------------------------------------------------------------------------------------------------------------------------
(m) Gestation Collateral Value
-----------------------------------------------------------------------------------------------------------------------------------
(n) 99% of Line 3(h) $
-----------------------------------------------------------------------------------------------------------------------------------
(o) 98% of Line 3(i) $
-----------------------------------------------------------------------------------------------------------------------------------
(p) Total Gestation Collateral Value - Line 4(n) PLUS Line 4(o) $
-----------------------------------------------------------------------------------------------------------------------------------
(q) Borrowing Base - Total of Lines 4(g), 4(l), and 4(p) $
-----------------------------------------------------------------------------------------------------------------------------------
5. PRINCIPAL DEBT FOR WAREHOUSE BORROWINGS
-----------------------------------------------------------------------------------------------------------------------------------
(a) Dry Borrowings $
-----------------------------------------------------------------------------------------------------------------------------------
(b) Wet Borrowings $
-----------------------------------------------------------------------------------------------------------------------------------
(c) Gestation Borrowings $
-----------------------------------------------------------------------------------------------------------------------------------
(d) TOTAL of Lines 5(a) THROUGH 5(c) $
-----------------------------------------------------------------------------------------------------------------------------------
6. WAREHOUSE COMMITMENTS
-----------------------------------------------------------------------------------------------------------------------------------
(a) Warehouse Commitments $60,000,000
-----------------------------------------------------------------------------------------------------------------------------------
(b) Wet Sublimit (either $21,000,000 during the first 5 and last 5 Business $
Days of each Calendar Month or $12,000,000 at all other times)
-----------------------------------------------------------------------------------------------------------------------------------
(c) Gestation Sublimit $30,000,000
-----------------------------------------------------------------------------------------------------------------------------------
d-0 3 EXHIBIT D-3
-----------
-----------------------------------------------------------------------------------------------------------------------------------
7. AVAILABILITY
-----------------------------------------------------------------------------------------------------------------------------------
(a) Lesser of EITHER Line 4(l) OR Line 6(b) $
-----------------------------------------------------------------------------------------------------------------------------------
(b) Maximum Wet Borrowing if positive OR BORROWING EXCESS if negative
-- Line 7(a) MINUS Line 5(b) $
-----------------------------------------------------------------------------------------------------------------------------------
(c) Lesser of either Line 4(p) OR Line 6(c) $
-----------------------------------------------------------------------------------------------------------------------------------
(d) MAXIMUM GESTATION BORROWING if positive or Borrowing Excess if
negative -- Line 7(c) MINUS Line 5(c) $
-----------------------------------------------------------------------------------------------------------------------------------
(e) Lesser of EITHER Line 4(q) OR Line 6 $
-----------------------------------------------------------------------------------------------------------------------------------
(f) Maximum Total Warehouse Borrowings if positive OR Borrowing
Excess if negative -- Line 7(e) MINUS Line $
5(d)
====================================================================================================================================
TABLE 2 -- WORKING-CAPITAL BORROWINGS
-------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
1. BORROWING BASE FOR ELIGIBLE-FORECLOSURE RECEIVABLES
-----------------------------------------------------------------------------------------------------------------------------------
(a) Ending Collateral balance (last report) $
-----------------------------------------------------------------------------------------------------------------------------------
(b) Repayments (since last report) $
-----------------------------------------------------------------------------------------------------------------------------------
(c) New Eligible-Foreclosure Receivables (since last report) $
-----------------------------------------------------------------------------------------------------------------------------------
(d) TOTAL of Line 1(a) MINUS Line 1(b) PLUS Line 1(c) $
-----------------------------------------------------------------------------------------------------------------------------------
(e) 80% of Line 1(d) $
-----------------------------------------------------------------------------------------------------------------------------------
2. BORROWING BASE FOR ELIGIBLE-P&I RECEIVABLES
-----------------------------------------------------------------------------------------------------------------------------------
(a) Ending Collateral balance (last report) $
-----------------------------------------------------------------------------------------------------------------------------------
(b) Repayments (since last report) $
-----------------------------------------------------------------------------------------------------------------------------------
(c) New Eligible-P&I Receivables (since last report) $
-----------------------------------------------------------------------------------------------------------------------------------
(d) TOTAL of Line 2(a) MINUS Line 2(b) PLUS Line 2(c) $
-----------------------------------------------------------------------------------------------------------------------------------
(e) 95% of Line 2(d) $
-----------------------------------------------------------------------------------------------------------------------------------
3. BORROWING BASE FOR ELIGIBLE-T&I RECEIVABLES
-----------------------------------------------------------------------------------------------------------------------------------
(a) Ending Collateral balance (last report) $
-----------------------------------------------------------------------------------------------------------------------------------
(b) Repayments (since last report) $
-----------------------------------------------------------------------------------------------------------------------------------
(c) New Eligible-T&I Receivables (since last report) $
-----------------------------------------------------------------------------------------------------------------------------------
(d) TOTAL of Line 3(a) MINUS Line 3(b) PLUS Line 3(c) $
-----------------------------------------------------------------------------------------------------------------------------------
(e) 80% of Line 3(d) $
-----------------------------------------------------------------------------------------------------------------------------------
4. BORROWING BASE FOR RECEIVABLES -- TOTAL of Lines 1(e), 2(e) and 3(e) $
-----------------------------------------------------------------------------------------------------------------------------------
5.PRINCIPAL DEBT OF WORKING-CAPITAL BORROWINGS $
-----------------------------------------------------------------------------------------------------------------------------------
6.WORKING-CAPITAL COMMITMENT $10,000,000
-----------------------------------------------------------------------------------------------------------------------------------
d-0 4 EXHIBIT D-3
-----------
-----------------------------------------------------------------------------------------------------------------------------------
7.AVAILABILITY
-----------------------------------------------------------------------------------------------------------------------------------
(a) Lesser of EITHER Line 4 OR Line 6 $
-----------------------------------------------------------------------------------------------------------------------------------
(b) Maximum Total Working-Capital Borrowings if positive OR $
Borrowing Excess if negative -- Line 7(a) MINUS Line 5
===================================================================================================================================
TABLE 3 -- TERM-LINE BORROWINGS
-------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
1. BORROWING BASE FOR TERM-LINE
-----------------------------------------------------------------------------------------------------------------------------------
(a) Cost of pledged portfolio $
-----------------------------------------------------------------------------------------------------------------------------------
(b) Appraised Value of pledged portfolio $
-----------------------------------------------------------------------------------------------------------------------------------
(c) 350% of average serving fee for pledged portfolio $
-----------------------------------------------------------------------------------------------------------------------------------
(d) Lesser of EITHER Line 1(a), Line 1(b), OR Line 1(c) $
-----------------------------------------------------------------------------------------------------------------------------------
(e) Borrowing Base for Term-Line - 70% of Line 1(d) $
-----------------------------------------------------------------------------------------------------------------------------------
2. PRINCIPAL DEBT OF TERM-LINE BORROWINGS $
-----------------------------------------------------------------------------------------------------------------------------------
3. TERM-LINE COMMITMENT $30,000,000
-----------------------------------------------------------------------------------------------------------------------------------
4. AVAILABILITY
-----------------------------------------------------------------------------------------------------------------------------------
(a) Lesser of EITHER Line 1(e) OR Line 3 $
-----------------------------------------------------------------------------------------------------------------------------------
(b) Maximum Total Term-Line Borrowings if positive or $
Borrowing Excess if negative -- Line 4(a) MINUS Line 2
===================================================================================================================================
BANK ONE, TEXAS, N.A., Agent
By ________________________________
(Name) ________________________________
(Title) ________________________________
d-0 5 EXHIBIT D-3
-----------
EXHIBIT D-4
-----------
TAKE-OUT REPORT
---------------
AGENT: Bank One, Texas, N.A. DATE: ___________________, 199_
BORROWER: Matrix Financial Services Corporation
================================================================================
This report is delivered under the Amended and Restated Loan Agreement (as
renewed, extended, or amended the "LOAN AGREEMENT") dated as of January 31,
1997, between Borrower, Agent, and certain Lenders. Terms defined in the Loan
Agreement have the same meanings when used -- unless otherwise defined -- in
this report.
The following is accurate and complete as of the date of this report in
respect of Take-Out Prices -- determined in accordance with the attached
SCHEDULE 1 -- and the total weighted-average-Take-Out Price is _____% of par:
FOR MORTGAGE LOANS
------------------
===========================================================
MORTGAGE-COLLATERAL GROUP INTEREST RATE TAKE-OUT PRICE
===========================================================
-----------------------------------------------------------
(a) % %
-----------------------------------------------------------
(b) % %
-----------------------------------------------------------
(c) % %
-----------------------------------------------------------
(d) % %
-----------------------------------------------------------
(e) % %
===========================================================
FOR MORTGAGE SECURITIES
-----------------------
===========================================================
MORTGAGE-COLLATERAL GROUP INTEREST RATE TAKE-OUT PRICE
===========================================================
(a) % %
-----------------------------------------------------------
(b) % %
-----------------------------------------------------------
(c) % %
-----------------------------------------------------------
(d) % %
-----------------------------------------------------------
(e) % %
===========================================================
By _____________________________
(Name)__________________________
/1/(Title)______________________
__________________________
/1/ Must be a Responsible Officer of Borrower.
EXHIBIT D-4
-----------
SCHEDULE 1
----------
TAKE-OUT PRICE DETERMINATION
----------------------------
Complete the following table for each Mortgage-Collateral Group for Mortgage
Loans and each Mortgage-Collateral Group for Mortgage Securities, in each case
indicating the group letter designation from the report to which this schedule
is attached:
=============================================================================
(B) PRINCIPAL-
(A) INVESTOR BALANCE OF (C) PERCENTAGE OF (D) COMMITMENT
TAKE- PAR PRICE/1/ -- COLUMN (B)
OUT COMMITMENTS TIMES COLUMN (C)
=============================================================================
$ % $
-----------------------------------------------------------------------------
$ % $
-----------------------------------------------------------------------------
$ % $
-----------------------------------------------------------------------------
$ % $
-----------------------------------------------------------------------------
TOTALS $ $
=============================================================================
The total weighted-average-Take-Out-Price (determined by dividing the total in
column (d) above by the total in column (b) above) is _____% of par.
________________
/1/ For each commitment price stated as a yield rather than as a percentage of
par, convert the yield to a percentage price by the use of the "Net Yield
Tables for GNMA Mortgage-Backed Securities" published by Financial
Publishing Company or the "Mortgage Yield Conversion Tables" published by
FNMA, as applicable.
2 EXHIBIT D-4
-----------
EXHIBIT D-5
-----------
MANAGEMENT REPORT
-----------------
AGENT: Bank One, Texas, N.A. DATE:___________________, 199____
BORROWER: Matrix Financial Services Corporation
================================================================================
This report is delivered under the Amended and Restated Loan Agreement (as
renewed, extended, or amended the "LOAN AGREEMENT") dated as of January 31,
1997, between Borrower, Agent, and certain Lenders. Terms defined in the Loan
Agreement have the same meaning when used -- unless otherwise defined -- in this
report.
I certify to Agent for Lenders that on the date of this report:
1. I am the undersigned officer of Borrower and deliver this certificate
on its behalf.
2. The attached SCHEDULE 1 is an accurate list of Borrower's Mortgage
Loan production for the Calendar Month before the date of this certificate --
describing in reasonable detail the geographic mix of all retail and
correspondent production for both the Calendar Month before the date of this
certificate and for the year to date, and such other matters as Agent may have
reasonably requested.
3. The attached SCHEDULE 2 is an accurate and complete schedule of
Borrower's "open commitment and pipeline positions" (as commonly understood in
the industry) for Mortgage Loans --describing in reasonable detail (i) with
regard to "open commitment" positions, the names of investors, type, original
principal amount, rate, price/yield, and expiration date, and (ii) with regard
to "open pipeline" positions, the amount of the pipeline, the total locked
amount, the percentage of the locked amount that is covered, the types of
coverage (mandatory or optional), future contracts, hedged positions, repurchase
agreements, the profit or loss, and such other matters as Agent may have
reasonably requested.
4. The attached SCHEDULE 3 is an accurate and complete schedule of
Borrower's Servicing Portfolio -- describing in reasonable detail the unpaid
balance of Mortgage Loans by Investor, the weighted-average interest rate,
weighted-average servicing fee, and weighted-average maturity of those Mortgage
Loans, the delinquency rates for those Mortgage Loans, investor type, geographic
concentration, weighted average coupon, and such other matters as Agent may have
reasonably requested.
By____________________________________
(Name)________________________________
/1/(Title)____________________________
___________________________
/1/ Must be a Responsible Officer of Borrower.
EXHIBIT D-5
-----------
EXHIBIT D-6
-----------
COMPLIANCE CERTIFICATE
----------------------
AGENT: Bank One, Texas, N.A. DATE:____________________, 19___
BORROWER: Matrix Financial Services Corporation
SUBJECT PERIOD: ____________________ ended _______________, 199___
================================================================================
This certificate is delivered under the Amended and Restated Loan Agreement
(as renewed, extended, and amended, the "LOAN AGREEMENT") dated as of January
31, 1997, between Borrower, Agent, and certain Lenders. Terms defined in the
Loan Agreement have the same meanings when used -- unless otherwise defined --
in this certificate.
The undersigned officer certifies to Agent and Lenders, that on the date of
this certificate:
1. The undersigned officer is the officer of Borrower designated below.
2. Borrower's Financial Statements that are attached to this certificate
were prepared in accordance with GAAP and present fairly the Companies'
consolidated (if applicable) financial condition and results of operations as of
-- and for the fiscal year or portion of the fiscal year ending on -- the last
day of the Subject Period.
3. The undersigned officer supervised a review of the Companies'
activities during the Subject Period in respect of the following matters and has
determined the following: (a) The representations and warranties in the Loan
Agreement are true and correct in all material respects, except (i) to the
extent that a representation or warranty speaks to a specific date or the facts
on which it is based have changed by transactions or conditions contemplated or
permitted by the Loan Documents and (ii) for the changes, if any, described on
the attached SCHEDULE 1; (b) each Company has complied with all of its
obligations under the Loan Documents, other than for the deviations, if any,
described on the attached SCHEDULE 1; (c) no Default or Potential Default exists
or is imminent, other than those, if any, described on the attached SCHEDULE 1;
and (d) the Companies' compliance with the financial covenants in SECTIONS 8 and
9 of the Loan Agreement is accurately calculated on the attached SCHEDULE 1.
By
(Name)_____________________________
/1/(Title)_________________________
_________________________
/1/ Must be a Responsible Officer of Borrower.
EXHIBIT D-6
-----------
SCHEDULE 1
----------
A. Describe deviations from compliance with obligations, if any -- CLAUSE
3(A) and 3(B) of attached Compliance Certificate -- if none, so state:
B. Describe Potential Defaults or Defaults, if any -- CLAUSE 3(C) of the
attached Compliance Certificate -- if none, so state:
C. Calculate compliance with covenants in SECTIONS 8 and 9 at end of
Subject Period (on a consolidated basis, if applicable) -- CLAUSE 3(D) of the
attached Compliance Certificate:
=============================================================================================================================
COVENANT AT END OF SUBJECT PERIOD
============================================================================================================================
1. DISTRIBUTIONS--(S)8.4
----------------------------------------------------------------------------------------------------------------------------
(a) year-to-date consolidated net income $
----------------------------------------------------------------------------------------------------------------------------
(b) 50% of Line 1(a) $
----------------------------------------------------------------------------------------------------------------------------
(c) year-to-date non-cash income $
----------------------------------------------------------------------------------------------------------------------------
(d) year-to-date cash taxes $
----------------------------------------------------------------------------------------------------------------------------
(e) The sum of Line 1(b) MINUS Line 1(c) MINUS Line 1(d) $
----------------------------------------------------------------------------------------------------------------------------
(f) Distributions paid during this fiscal year -- MAY NOT EXCEED Line 1(e) $
----------------------------------------------------------------------------------------------------------------------------
2. NET WORTH -- (S)9.1(A)
----------------------------------------------------------------------------------------------------------------------------
(a) Net Worth $
----------------------------------------------------------------------------------------------------------------------------
(b) Initial Minimum $ 10,000,000
----------------------------------------------------------------------------------------------------------------------------
(c) 100% of all contributions to any Company's stockholder's equity on or $
after December 31, 1996
----------------------------------------------------------------------------------------------------------------------------
(d) 50% of the Companies' cumulative Net Income (without deduction for $
losses) after December 31, 1996
---------------------------------------------------------------------------------------------------------------------------
(e) Actual Minimum - Line 2(b) PLUS Line 2(c) PLUS Line 2(d) $
---------------------------------------------------------------------------------------------------------------------------
2 EXHIBIT D-6
-----------
---------------------------------------------------------------------------------------------------------------------------
3. ADJUSTED-NET WORTH -- (S)9.1(B)
---------------------------------------------------------------------------------------------------------------------------
(a) Net Worth $
---------------------------------------------------------------------------------------------------------------------------
(b) Debt outstanding under Revolving Subordinated Loan Agreement with $
Guarantor
---------------------------------------------------------------------------------------------------------------------------
(c) Adjusted-Net Worth - Line 3(a) PLUS Line 3(b) $
---------------------------------------------------------------------------------------------------------------------------
(d) Initial Minimum $ 12,000,000
---------------------------------------------------------------------------------------------------------------------------
(e) 100% of all contributions to any Company's stockholder's equity on or $
after December 31, 1996
---------------------------------------------------------------------------------------------------------------------------
(f) 50% of the Companies' cumulative Net Income (without deduction for $
losses) after December 31, 1996
---------------------------------------------------------------------------------------------------------------------------
(g) Actual Minimum - Line 3(d) PLUS Line 3(e) PLUS Line 3(f) $
---------------------------------------------------------------------------------------------------------------------------
4. ADJUSTED-TANGIBLE-NET WORTH -- (S)9.1(C)
---------------------------------------------------------------------------------------------------------------------------
(a) 1.25% of Servicing Portfolio $
---------------------------------------------------------------------------------------------------------------------------
(b) Appraised Value of Servicing Portfolio $
---------------------------------------------------------------------------------------------------------------------------
(c) Lesser of EITHER Line 4(a) OR Line 4(b) $
---------------------------------------------------------------------------------------------------------------------------
(d) Purchased servicing, etc. $
---------------------------------------------------------------------------------------------------------------------------
(e) Treasury stock $
---------------------------------------------------------------------------------------------------------------------------
(f) Surplus value, etc. $
---------------------------------------------------------------------------------------------------------------------------
(g) Goodwill, etc. $
---------------------------------------------------------------------------------------------------------------------------
(h) Patents, etc. $
---------------------------------------------------------------------------------------------------------------------------
(i) Guaranties $
---------------------------------------------------------------------------------------------------------------------------
(j) Letters of credit, acceptances, etc. $
---------------------------------------------------------------------------------------------------------------------------
(k) Other intangible assets $
---------------------------------------------------------------------------------------------------------------------------
(l) Permitted Debt expressly subordinated to the Obligation $
---------------------------------------------------------------------------------------------------------------------------
(m) Adjusted-Tangible-Net Worth - Line 3(a) PLUS Line 4(c) MINUS Line 4(d) $
THROUGH Line 4(k) PLUS Line 4(l)
---------------------------------------------------------------------------------------------------------------------------
(n) Initial Minimum $ 10,000,000
---------------------------------------------------------------------------------------------------------------------------
(o) 100% of all contributions to any Company's stockholder's equity on or $
after December 31, 1996
---------------------------------------------------------------------------------------------------------------------------
(p) 50% of the Companies' cumulative Net Income (without deduction for $
losses) after December 31, 1996
---------------------------------------------------------------------------------------------------------------------------
(q) Actual Minimum - Line 4(n) PLUS Line 4(o) PLUS Line 4(p) $
---------------------------------------------------------------------------------------------------------------------------
3 EXHIBIT D-6
-----------
---------------------------------------------------------------------------------------------------------------------------
5. LEVERAGE RATIO -- (S)9.2
---------------------------------------------------------------------------------------------------------------------------
(a) Total Debt $
---------------------------------------------------------------------------------------------------------------------------
(b) Repurchase obligations, obligations under escrow-arbitrage-type facilities, $
and subordinated obligations permitted to be excluded
---------------------------------------------------------------------------------------------------------------------------
(c) Total-Adjusted Debt - Line 5(a) MINUS Line 5(b) $
---------------------------------------------------------------------------------------------------------------------------
(d) RATIO of Line 5(c) to Line 4(m) to
---------------------------------------------------------------------------------------------------------------------------
(e) MAXIMUM 8.0 to 1.0
---------------------------------------------------------------------------------------------------------------------------
6. CASH FLOW -- (S)9.3
---------------------------------------------------------------------------------------------------------------------------
(a) Net Income for past 4-quarter period $
---------------------------------------------------------------------------------------------------------------------------
(b) Depreciation $
---------------------------------------------------------------------------------------------------------------------------
(c) Amortization $
---------------------------------------------------------------------------------------------------------------------------
(d) Total of Lines 6(a) through 6(c) $
---------------------------------------------------------------------------------------------------------------------------
(e) Amount of Non-cash revenue $
---------------------------------------------------------------------------------------------------------------------------
(f) Amount of Distributions paid to Guarantor $
---------------------------------------------------------------------------------------------------------------------------
(g) Cash Flow - Line 6(d) MINUS Line 6(e) MINUS Line 6(f) $
---------------------------------------------------------------------------------------------------------------------------
(h) CMLTD $
---------------------------------------------------------------------------------------------------------------------------
(i) Ratio of Line 6(g) to 6(h) to
---------------------------------------------------------------------------------------------------------------------------
(j) MINIMUM 1.30 to 1.00
---------------------------------------------------------------------------------------------------------------------------
7. SERVICING PORTFOLIO -- (S)9.4
---------------------------------------------------------------------------------------------------------------------------
(a) Servicing Portfolio $
---------------------------------------------------------------------------------------------------------------------------
(b) MINIMUM (the minimum amount increases to $2,000,000,000 after $1,500,000,000
June 30, 1997 so long as the ▇▇▇▇▇▇▇▇▇▇ acquisition has occurred)
---------------------------------------------------------------------------------------------------------------------------
8. SERVICING-PORTFOLIO-COVERAGE RATIO--(S)9.5
---------------------------------------------------------------------------------------------------------------------------
(a) Principal Debt of Term-Line Borrowings $
---------------------------------------------------------------------------------------------------------------------------
(b) 1.25% of Servicing Portfolio $
---------------------------------------------------------------------------------------------------------------------------
(c) 70% of the Appraised Value of the Servicing Portfolio $
---------------------------------------------------------------------------------------------------------------------------
(d) Lesser of EITHER Line 8(b) or Line 8(c) - must be greater than Line 8(a) $
---------------------------------------------------------------------------------------------------------------------------
(e) Principal Debt of Working-Capital Borrowings $
---------------------------------------------------------------------------------------------------------------------------
(f) Total of Lines 8(a) and 8(e) $
---------------------------------------------------------------------------------------------------------------------------
(g) 1.25% of Servicing Portfolio $
---------------------------------------------------------------------------------------------------------------------------
(h) 95% of the Appraised Value of Servicing Portfolio $
---------------------------------------------------------------------------------------------------------------------------
(i) Lesser of EITHER Line 8(g) or Line 8(h) - must be greater than Line 8(f) $
===========================================================================================================================
4 EXHIBIT D-6
-----------
EXHIBIT D-7
-----------
COLLATERAL-CONVERSION NOTICE
----------------------------
AGENT: Bank One, Texas, N.A. DATE:_______________, 199____
BORROWER: Matrix Financial Services Corporation
--------------------------------------------------------------------------------
This notice is delivered to Agent under the Amended and Restated Loan
Agreement (as renewed, extended, or amended the "LOAN AGREEMENT") dated as of
January 31, 1997, between Borrower Agent, and certain Lenders. Terms defined in
the Loan Agreement have the same meanings when used -- unless otherwise defined
-- in this notice.
Borrower notifies Agent that (a) Agent has issued its initial certification
for inclusion of the Eligible-Mortgage Loans described on the attached ANNEX 1
in one or more Mortgage Pools and (b) Borrower is delivering to Agent one or
more valid and enforceable Take-Out Commitments that comply with PART B.2. on
SCHEDULE 4.1 to the Loan Agreement for those Eligible-Mortgage Loans.
On and as of the date of this notice, Borrower certifies, represents, and
warrants, to Agent for Lenders that (a) all of the items that Borrower is
required to furnish to Agent under the Loan Agreement in connection with this
notice accompany it, all of those items are accurate and what they purport to
be, and all of the Eligible-Mortgage Loans described on the attached ANNEX 1
comply with all requirements necessary to constitute Eligible-Gestation
Collateral, (b) the representations and warranties of Borrower in the Loan
Documents are true and correct in all material respects except to the extent
that (i) a representation or warranty speaks to a specific date or (ii) the
facts on which a representation or warranty is based have changed by
transactions or conditions contemplated or permitted by the Loan Documents, and
(c) no Default or Potential Default exists.
MATRIX FINANCIAL SERVICES CORPORATION
as Borrower
By____________________________________
(Name)________________________________
/1/(Title)____________________________
____________________
/1/ Must be a Responsible Officer of -- or an individual designated in writing
to Agent by a Responsible Officer of --Borrower.
EXHIBIT D-7
-----------
EXHIBIT E
---------
OPINION OF COUNSEL
------------------
[LETTERHEAD]
January 31, ▇▇▇▇
▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇.▇., as Agent
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
The Lenders Referred to Below
Re: $100,000,000 Loan Extended by Bank One, Texas, N.A. and certain other
Lenders to Matrix Financial Services Corporation
Ladies and Gentlemen:
In connection with that certain Amended and Restated Loan Agreement (the
"LOAN AGREEMENT"), dated as of January 31, 1997, between Matrix Financial
Services Corporation, an Arizona corporation ("BORROWER"), the lenders named on
SCHEDULE 2 thereto (the "LENDERS"), Bank One, Texas, N.A., as Agent for itself
and the other Lenders ("AGENT"), we have acted as counsel to Borrower and, in
connection with its execution of the Guaranty (as defined and described in the
Loan Agreement), Matrix Capital Corporation, a Colorado corporation
("GUARANTOR").
This opinion is furnished to you in satisfaction of a closing condition set
forth in SCHEDULE 5 attached to the Loan Agreement. Terms used herein which are
defined in the Loan Agreement shall have the meaning set forth in the Loan
Agreement unless otherwise defined herein or in the Schedules attached hereto.
In connection with the opinions set forth below, we have examined such
documents as we have deemed necessary or appropriate for the purposes of this
opinion letter, including without limitation, the documents listed on the
Schedule of Review Documents attached hereto (the "SCHEDULE") . The documents
described in Section 1 of the Schedule are collectively the "LOAN DOCUMENTS,"
and those described in Section 2 of the Schedule are collectively the "DUE
DILIGENCE DOCUMENTS."
We have also made such other examinations and inquiries (subject to the
description of the specific level of examination and inquiry described below) as
we have deemed necessary and/or appropriate, as the basis for the opinions
expressed herein. In making such examinations, we have assumed, with your
consent, (i) the genuineness of all signatures (other than signatures on behalf
of the Borrower or Guarantor) not witnessed and the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as copies or faxes and the authenticity of the
originals of such latter documents; (ii) the Loan Documents accurately describe
and contain the mutual understanding of the parties and there are no oral or
written statements or agreements that modify, amend or vary or purport to
modify, amend or vary any of the provisions of the Loan Documents; (iii) the
execution and delivery of the Loan Documents by each party other than Borrower
and Guarantor, that such execution and delivery is duly authorized, that any
person executing the Loan Documents on behalf of each such party is duly
authorized and
EXHIBIT E
---------
that each Loan Document so executed and delivered by each party other than
Borrower and Guarantor is such party's valid and binding obligation and is
enforceable in accordance with its terms; (iv) the legality of performance by
each party other than Borrower and Guarantor of each obligation of each Loan
Document so executed and delivered; (v) any court of law (other than an Arizona
state court or a Federal court sitting in Arizona) in which any Loan Document is
sought to be enforced will apply Texas law unless otherwise expressly provided
in such Loan Document, and (vi) the result of the application of the law of
Texas will not be contrary to a fundamental policy of the law of Arizona. We
have made no examination or investigation to verify the accuracy or completeness
of any projection, financial, accounting or statistical information furnished to
you or with respect to any other accounting or financial matters and express no
opinion with respect thereto.
With respect to the opinions rendered in paragraph 9 of this opinion
letter, we have assumed with your consent that the following facts are true:
(i) The representations contained in SCHEDULE 6.2 of the Loan
Agreement regarding the location of the Borrower's chief executive office and
other principal offices and the location of the offices where the Borrower keeps
its records are accurate and complete.
(ii) The Borrower (A) owns the assets to be subject to the Lender
Liens, (B) has good and sufficient title to these assets and (C) has "rights in
the Collateral" as that phrase is used in Section 9.203 of the Texas Uniform
Commercial Code ("TEXAS UCC") and, to the extent applicable, Section 47-9203 of
the Arizona Uniform Commercial Code ("ARIZONA UCC").
(iii) Collateral of a type that may be perfected by filing or
possession is and continuously remains in possession of the Agent.
(iv) Agent has no notice of any security interest in the Collateral
in favor of any third person other than as disclosed in the UCC Search Reports
obtained by Agent in connection with the closing of the Loan Agreement and as
described on SCHEDULE 5 thereto.
(v) Agent shall have received each of the Acknowledgment Agreements
referred to as Items 16, 17, and 18 listed on SCHEDULE 5 entitled Closing
Conditions executed by Borrower and FNMA, FHLMC, and GNMA, respectively.
We have assumed, with your consent, that the following facts are true in
rendering this opinion: (i) the matters of fact set forth in the representations
contained in any Loan Document, and (ii) the matters of fact set forth in the
Officer's Certificate.
Based on the foregoing, we are of the following opinions:
1. Borrower is duly incorporated, validly existing, and in good standing
under the Laws of the State of Arizona. Guarantor is duly incorporated, validly
existing, and in good standing under the Laws of the State of Colorado.
2. Borrower is duly qualified to transact business and is in good
standing as a foreign corporation in each jurisdiction where the failure to be
so qualified and in good standing is a Material-Adverse Event.
2 EXHIBIT E
---------
3. Borrower has no Subsidiaries and Borrower has not used or transacted
business under any corporate or trade name in the six-month period preceding the
date of the Loan Agreement other than as set forth in SCHEDULE 6.2 of the Loan
Agreement.
4. Borrower possesses all requisite corporate power and authority to
conduct its business as is now being, or is contemplated by the Loan Agreement
to be, conducted. Guarantor possesses all requisite corporate power and
authority to conduct its business as is now being, or is contemplated by the
Loan Agreement to be, conducted.
5. The execution and delivery by Borrower and Guarantor of each Loan
Document to which it is a party and the performance by it of its related
obligations (a) are within its corporate power, (b) have been duly authorized by
all necessary corporate action on its behalf, (c) except for any action or
filing that has been taken or made on or before the date of this opinion,
require no action by or filing with any Tribunal, (d) do not violate any
provision of its articles of incorporation or bylaws, (e) do not violate any
provision of Law applicable to it or any material agreements to which it is a
party, and (f) except for Lender Liens, do not result in the creation or
imposition of any Lien on any asset of Borrower.
6. Upon execution and delivery by all parties to it, each of the Loan
Agreement, the Notes, the Security Agreement and the UCC Financing Statements
constitutes a legal and binding obligation of Borrower, enforceable against it
in accordance with its terms. Upon execution and delivery by all parties to it,
the Guaranty constitutes a legal and binding obligation of Guarantor,
enforceable against it in accordance with its terms.
7. Except as disclosed on SCHEDULE 6.9 to the Loan Agreement (a) Borrower
is not subject to, or aware of the threat of, any Litigation that is reasonably
likely to be determined adversely to it or, if so adversely determined, would be
a Material-Adverse Event, and (b) no final nonappealable outstanding or unpaid
judgments against Borrower exist. Guarantor is not subject to, or aware of the
threat of, any Litigation that is reasonably likely to be determined adversely
to it or, if so adversely determined, would be a Material-Adverse Event, and (b)
no outstanding or unpaid judgments against Guarantor exist.
8. Neither Borrower nor Guarantor is not subject to regulation under the
Investment Company Act of 1940, as amended, or the Public Utility Holding
Company Act of 1935, as amended.
9. A first priority security interest is created and perfected pursuant
to the Security Agreement upon (a) each mortgage note that is delivered to
Agent, (b) each Mortgage Security in certificated form that is delivered to
Agent or its bailee, (c) each Mortgage Security in book-entry form when the
Lender obtains "control" as provided in Section 9.115 of the Texas UCC, (d)
each mortgage note and related Take-Out Commitment for 21-days after the
Borrowing Date of each related Wet Borrowing, and (e) all Mortgage Collateral
transmitted to any third party acting solely as a bailee for Lenders under a
Bailee Letter pursuant to which such bailee received notice of Lender's interest
(until Agent receives payment or Mortgage Securities under that Bailee Letter).
A security interest is created and perfected pursuant to the Security Agreement
in all Servicing Rights and Servicing Receivables identified as Collateral under
the Loan Documents when the Financing Statements described in Item 8 of Schedule
5 are filed in the States of Arizona, Texas and Colorado.
10. You have requested that we advise you whether an Arizona court would
give effect to the choice of law provision in certain of the Loan Documents in
favor of the law of the State of Texas. The Supreme Court of Arizona has
consistently ruled that where it is not bound by a previous decision or by
legislative enactment, it will follow the rules in the Restatements of the Law,
-----------------------
including, without limitation, the Restatements of Conflict of Laws. ▇▇▇▇▇ v.
-------------------------------- --------
Normart, 51 Ariz. 134, 75 P.2d 38 (1938); Western Coal & Min.
------- -------------------
3 EXHIBIT E
---------
Co. ▇. ▇▇▇▇▇▇▇, 63 Ariz. 171, 160 P. 2d 331 (1945); ▇▇▇▇ v. Renewal Guaranty
-------------- ------------------------
Corp., 105 Ariz. 549, 468 P.2d 576 (1970); and ▇▇▇▇▇▇ v. Security National Bank,
---- --------------------------------
20 Ariz. App. 504, 514 P.2d 257 (1973); In re ▇▇▇▇▇▇, 145 Ariz. 185, 700 P. 2d
883 (Ariz. App. 1985). Section 187 of the Restatement (Second) Conflict of Laws
-----------------------------
provides that the parties to a contract may stipulate their choice of law to
govern the contract and that the laws of the state chosen will be applied unless
(i) the particular issue is one that the parties could not have resolved by an
explicit provision in their agreement directed to that issue and (ii) either:
(a) The chosen state has no substantial relationship to the parties or the
transaction and there is no other reasonable basis for the parties' choice;
or
(b) Application of the law of the chosen state would be contrary to a
fundamental policy of a state that has a materially greater interest than
the chosen state in the determination of the particular issue and that,
under the rule of Section 188 of the Restatement (Second) Conflict of Laws,
-------------------------------------
would be the state of applicable law in the absence of an effective choice
of law by the parties.
Based on the facts concerning the negotiation of the Loan Documents and the
terms thereof and considering such other matters as we have deemed relevant, we
believe that an Arizona court would give effect to the choice of law provisions
in the Loan Agreement in favor of the law of the State of Texas.
Exceptions and Qualifications of Opinions.
-----------------------------------------
All opinions contained herein with respect to the enforceability of
documents and instruments are qualified to the extent that:
(a) the availability of equitable remedies, including, without
limitation, specific performance and injunctive relief is subject to the
discretion of the court before which any proceedings therefor may be brought;
(b) the enforceability of certain terms provided in the Loan
Documents may be limited by applicable bankruptcy, reorganization, arrangement,
insolvency, moratorium or similar laws affecting the enforcement of creditors
rights generally as at the time in effect; and
(c) certain rights of the Lenders and Agent to indemnity may violate
public policy.
The foregoing opinions are subject to the following additional exceptions
and qualifications:
(a) Certain of the waivers, remedies, procedures and other provisions
in the Loan Documents may be further limited or rendered unenforceable by
applicable law, but such law does not, in our opinion, make the remedies
afforded by the Loan Documents inadequate for the practical realization of the
benefits intended to be provided thereby.
(b) Continuation statements with respect to the security interests
perfected by the filing of Financing Statements will be filed within the period
specified by applicable law prior to the expiration of the period of duration of
the initial filing of the Financing Statements in order to prevent the filing
from lapsing under the UCC. The perfection of the security interests by filing
will be terminated as to any Collateral acquired by the Borrower more than the
period provided by applicable law after the Borrower changes its name, identity
or corporate structure so as to make the Financing Statements seriously
misleading unless a new
4 EXHIBIT E
---------
appropriate financing statement incorporating the necessary changes is properly
filed before the expiration of such period.
(c) Except as expressly stated in this opinion letter, we neither
express nor imply any other opinion including, but not limited to, matters of
title, perfection or priority of security interests or federal, state or local
tax issues.
(d) We have assumed that nothing has occurred and no factual
condition exists as of this date which has not been disclosed to us which, if it
had been disclosed to us, would cause us to withhold, modify, qualify or
otherwise limit any opinion contained herein. The foregoing sentence does not
relieve the undersigned of its duty to make the inquiry described herein.
(e) This opinion is delivered on the express condition that you do
not have actual knowledge that the opinion expressed herein is not accurate in
any material respect.
(f) The opinions expressed in this letter are based solely upon the
law of the States of Arizona and Texas (upon Texas law solely with respect to
the opinion stated in paragraph 9 of this opinion letter) and applicable federal
law in effect on the date hereof.
(g) We assume no obligation to revise or supplement this opinion
should such law be changed by legislative action, judicial decision or
otherwise.
This opinion is addressed solely for your use in connection with the
transactions contemplated by the Loan Agreement, and no Person other than the
Agent, each Lender, each assignee which hereafter becomes a Lender in accordance
with the terms of the Loan Agreement, and the law firm of ▇▇▇▇▇▇ and ▇▇▇▇▇,
L.L.P., is entitled to rely on this opinion without our prior written consent.
Respectfully submitted,
5 EXHIBIT E
---------
Schedule of Review Documents
----------------------------
1. Loan Documents
--------------
(a) Amended and Restated Loan Agreement dated as of January 31, 1997,
among Bank One, Texas, N.A., certain other Lenders, and Matrix
Financial Services Corporation;
(b) Amended and Restated Warehouse Note dated January 31, 1997, executed
by Borrower and payable to the order of Bank One, Texas, N.A.;
(c) Amended and restated Swing Note dated January 31, 1997, executed by
Borrower and payable to the order of Bank One, Texas, N.A.;
(d) Amended and Restated Working-Capital Note dated January 31, 1997,
executed by Borrower and payable to the order of Bank One, Texas,
N.A.;
(e) Amended and Restated Term-Line Note dated January 31, 1997, executed
by Borrower and payable to the order of Bank One, Texas, N.A.;
(f) Amended and Restated Guaranty dated January 31, 1997 executed by
Guarantor in favor of Agent and the Lenders;
(g) Amended and Restated Security Agreement dated January 31, 1997,
executed by Borrower in favor of Bank One, Texas, N.A. as Agent for
Lenders; and
(h) Financing Statements executed by Borrower in favor of Bank One, Texas,
N.A. as Agent for Lenders.
2. Due Diligence Documents
-----------------------
(a) Articles of Incorporation and Bylaws of Borrower and Guarantor;
(b) Good Standing Certificates for Borrower from the Arizona Corporation
Commission and for Guarantor from the Colorado Secretary of State;
(c) Officers' Certificate for Borrower;
(d) Officers' Certificate for Guarantor; and
(e) Opinion Certificate.
6 EXHIBIT E
---------
EXHIBIT F-1
-----------
AMENDMENT
---------
THIS DOCUMENT is entered into as of _____________, 19__, between MATRIX
FINANCIAL SERVICES CORPORATION, an Arizona corporation ("BORROWER"), the Lenders
listed on the signature page below, and BANK ONE, TEXAS, N.A., as Agent (in that
capacity "AGENT").
Borrower, Lenders, and Agent have entered into the Amended and Restated
Loan Agreement (as renewed, extended, amended, or restated, the "LOAN
AGREEMENT") dated as of January 31, 1997, providing for loans to Borrower both
on a revolving and a term basis. Borrower, Lenders, and Agent have agreed, upon
the following terms and conditions, to provide for, among other things,
_______________________. Accordingly, for adequate and sufficient consideration,
the parties agree as follows:
1. TERMS AND REFERENCES. Unless otherwise stated in this document (a)
terms defined in the Loan Agreement have the same meanings when used in this
document and (b) all references to "Sections," "Schedules," and "Exhibits" are
to the Loan Agreement's sections, schedules, and exhibits.
2. AMENDMENTS. The Loan Agreement is amended as follows:
(a) SECTION ____ is amended by deleting the terms "[DEFINED TERM 1],"
--------------
"[DEFINED TERM 2]," and "[DEFINED TERM 3]" and by adding or entirely
-------------- --------------
amending the following terms:
"[DEFINED TERM 4]" means ...
--------------
"[DEFINED TERM 5]" means ...
--------------
(b) SECTION ____ is entirely amended as follows:
[RESTATE AMENDED PROVISION IN ITALICS]
------------------------------------
(c) SECTION ____ is entirely amended as follows:
[RESTATE AMENDED PROVISION IN ITALICS]
------------------------------------
(d) EXHIBIT __ is entirely amended in the form of -- and all
references in the Credit Agreement to EXHIBIT __ are changed to -- the
attached AMENDED EXHIBIT __.
3. CONDITIONS PRECEDENT. Notwithstanding any contrary provision, the
foregoing paragraphs in this document are not effective unless and until (a) the
representations and warranties in this document are true and correct and (b)
each document and other item listed on the attached ANNEX A.
4. RATIFICATIONS. To induce Agent and Lenders to enter into this
document, Borrower (a) ratifies and confirms all provisions of the Loan
Documents as amended by this document, (b) ratifies and confirms that all
guaranties, assurances, and Liens granted, conveyed, or assigned to Agent and
Lenders under the Loan Documents (as they may have been renewed, extended, and
amended) are not released, reduced, or otherwise adversely affected by this
document and continue to guarantee, assure, and secure full payment and
performance of the present and future Obligation, and (c) agrees to perform
those acts and duly authorize,
EXHIBIT F-1
-----------
execute, acknowledge, deliver, file, and record those additional documents, and
certificates as Agent or any Lender may request in order to create, perfect,
preserve, and protect those guaranties, assurances, and Liens.
5. REPRESENTATIONS. To induce Agent and Lenders to enter into this
document, Borrower represents and warrants to Agent and Lenders that as of the
date of this document (a) Borrower has all requisite authority and power to
execute, deliver, perform its obligations under this document and all other
notes and documents delivered under it, which execution, delivery, and
performance have been duly authorized by all necessary corporate action, require
no action by or filing with any Tribunal, do not violate its corporate charter
or bylaws or (except where not a Material-Adverse Event) violate any Law
applicable to it or any material agreement to which it or its assets are bound,
(b) upon execution and delivery by all parties to it, this document and all
other notes and documents delivered under it will constitute Borrower's legal
and binding obligations, enforceable against it in accordance with their
respective terms except as that enforceability may be limited by Debtor Laws and
general principles of equity, (c) all other representations and warranties in
the Loan Documents are true and correct in all material respects except to the
extent that (i) any of them speak to a different specific date or (ii) the facts
on which any of them were based have been changed by transactions contemplated
or permitted by the Loan Agreement, and (e) no Material-Adverse Event, Default,
or Potential Default exists.
6. EXPENSES. Borrower shall pay all costs, fees, and expenses paid or
incurred by Agent incident to this document, including, without limitation, the
reasonable fees and expenses of Agent's counsel in connection with the
negotiation, preparation, delivery, and execution of this document and any
related documents.
7. MISCELLANEOUS. All references in the Loan Documents to the "Loan
Agreement" refer to the Loan Agreement as amended by this document. This
document is a "Loan Document" referred to in the Loan Agreement; therefore, the
provisions relating to Loan Documents in the Loan Agreement are incorporated in
this document by reference. Except as specifically amended and modified in this
document, the Loan Agreement is unchanged and continues in full force and
effect. This document may be executed in any number of counterparts with the
same effect as if all signatories had signed the same document. All
counterparts must be construed together to constitute one and the same
instrument. This document binds and inures to each of the undersigned and their
respective successors and permitted assigns, subject to SECTION 12.12. THIS
DOCUMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.
2 EXHIBIT F-1
-----------
EXECUTED on ____________, 19__, but effective as of the date first stated
above.
MATRIX FINANCIAL SERVICES BANK ONE, TEXAS, N.A., as Agent and a
CORPORATION, as Borrower Lender
By ___________________________________ By _________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
President
CONSENT AND AGREEMENT
---------------------
To induce Agent and Lenders to enter into this document, the undersigned
(a) consents and agrees to this document's execution and delivery, (b) ratifies
and confirms that all guaranties, assurances, Liens, and subordinations granted,
conveyed, or assigned to Agent and Lenders under the Loan Documents (as they may
have been renewed, extended, and amended) are not released, diminished,
impaired, reduced, or otherwise adversely affected by this document and continue
to guarantee, assure, secure, and subordinate other debt to the full payment and
performance of all present and future Obligation, (c) agrees to perform those
acts and duly authorize, execute, acknowledge, deliver, file, and record those
additional guaranties, assignments, security agreements, deeds of trust,
mortgages, and other agreements, documents, instruments, and certificates as
Agent or any Lender may reasonably deem necessary or appropriate in order to
create, perfect, preserve, and protect those guaranties, assurances, Liens, and
subordinations, (d) represents and warrants to Agent and Lenders that (i) the
value of the consideration received and to be received by the undersigned in
respect of those guaranties, assurances, Liens, and subordinations are
reasonably worth at least as much as the related liability and obligation, (ii)
that liability and obligation may reasonably be expected to directly or
indirectly benefit the undersigned, and (iii) the undersigned is --and after
giving effect to those guaranties, assurances, Liens, subordinations, and the
Loan Documents, in light of all existing facts and circumstances (including,
without limitation, collateral for and other obligors in respect of the
Obligation and various components of it and various rights of subrogation and
contribution), the undersigned will be -- Solvent, and (e) waives notice of
acceptance of this consent and agreement, which consent and agreement binds the
undersigned and its successors and permitted assigns and inures to Agent, each
Lender, and their successors and permitted assigns.
MATRIX CAPITAL CORPORATION, as
Guarantor
By ______________________________
▇▇▇ ▇. ▇▇▇▇▇▇, President
3 EXHIBIT F-1
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EXHIBIT F-2
-----------
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is entered into effective as of
___________, 199__, between BANK ONE, TEXAS, N.A. ("ASSIGNOR"), and
_______________________ ("ASSIGNEE").
MATRIX FINANCIAL SERVICES CORPORATION, an Arizona corporation ("BORROWER"),
certain lenders ("LENDERS"), and BANK ONE, TEXAS, N.A. (in its capacity as Agent
for Lenders, "AGENT"), are party to the Amended and Restated Loan Agreement (as
renewed, extended, amended, or restated, the "LOAN AGREEMENT") dated as of
January 31, 1997, all of the defined terms in which have the same meanings when
used -- unless otherwise defined -- in this agreement. This agreement is
entered into as required by SECTION 12.14 of the Loan Agreement and is not
effective until consented to by Borrower and Agent, which consents may not under
the Loan Agreement be unreasonably withheld.
ACCORDINGLY, for adequate and sufficient consideration, Assignor and
Assignee agree as follows:
1. ASSIGNMENT AND ASSUMPTION. By this agreement, and effective as of
-------------------------
__________, 199__, (the "EFFECTIVE DATE"), Assignor sells and assigns to
Assignee (without recourse to Assignor) and Assignee purchases and assumes from
Assignor an interest in and to all of Assignor's Rights and obligations under
the Loan Agreement (except any Rights and obligations pertaining to Assignor's
role as Agent, Lender of Swing Borrowings, and custodian) as of the Effective
Date, including, without limitation, (a) a ______% interest in Assignor's
Combined Commitment, (b) a ____% interest in Assignor's Warehouse Commitment;
(c) a ____% interest in Assignor's Working-Capital Commitment, (d) a ____%
interest in Assignor's Term-Line Commitment, (e) a corresponding amount of the
Principal Debt outstanding under Assignor's existing Warehouse Note, Working-
Capital Note, and Term-Line Note, (f) all interest accruing in respect of the
interests assigned above (collectively, the "ASSIGNED INTERESTS") after the
Effective Date, and (g) all commitment fees accruing in respect of the Assigned
Interest after the Effective Date.
2. ASSIGNOR PROVISIONS. Assignor (a) represents and warrants to Assignee
-------------------
that as of the Effective Date (i) $_______________ is outstanding (without
reduction for any assignments that have not yet become effective) under the
Assignor's Warehouse Note, Working-Capital Note, and Term-Line Note,
respectively, (ii) Assignor is the legal and beneficial owner of the Assigned
Interest, which is free and clear of any adverse claim, and (iii) Assignor has
not been notified of an existing Default or Potential Default, and (b) makes no
representation or warranty to Assignee and assumes no responsibility to Assignee
with respect to (i) any statements, warranties, or representations made in or in
connection with any Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency, or value of any Loan Document, or
(iii) the financial condition of any Company or the performance or observance by
any Company of any of its obligations under any Loan Document.
3. ASSIGNEE PROVISIONS. Assignee (a) represents and warrants to
-------------------
Assignor, Borrower, and Agent that Assignee is legally authorized to enter into
this agreement and each other Loan Document to which it will become a party, (b)
confirms that it has received a copy of the Loan Agreement, copies of the
Current Financials, and such other documents and information as it deems
appropriate to make its own credit analysis and decision to enter into this
agreement, (c) agrees with Assignor, Borrower, and Agent that Assignee shall --
independently and without reliance upon Agent, Assignor, or any other Lender and
based on such documents and information as Assignee deems appropriate at the
time -- continue to make its own credit decisions in taking or not taking action
under the Loan Documents, (d) appoints and authorizes Agent to take such action
EXHIBIT F-2
-----------
as agent on its behalf and to exercise such powers under the Loan Documents as
are delegated to Agent by the terms of the Loan Documents and all other
reasonably-incidental powers, (e) agrees with Assignor, Borrower, and Agent that
Assignee shall perform and comply with all provisions of the Loan Documents
applicable to Lenders in accordance with their respective terms, and (f) if
Assignee is not organized under the Laws of the United States of America or one
of its states, it (i) represents and warrants to Assignor, Agent, and Borrower
that no Taxes are required to be withheld by Assignor, Agent, or Borrower with
respect to any payments to be made to it in respect of the Obligation, and it
has furnished to Agent and Borrower two duly completed copies of either U.S.
Internal Revenue Service Form 4224, Form 1001, Form W-8, or any other form
acceptable to Agent that entitles Assignee to exemption from U.S. federal
withholding Tax on all interest payments under the Loan Documents, (ii)
covenants to provide Agent and Borrower a new Form 4224, Form 1001, Form W-8, or
other form acceptable to Agent upon the expiration or obsolescence of any
previously delivered form according to Law, duly executed and completed by it,
and to comply from time to time with all Laws with regard to the withholding Tax
exemption, and (iii) agrees with Agent and Borrower that, if any of the
foregoing is not true or the applicable forms are not provided, then Agent and
Borrower (without duplication) may deduct and withhold from interest payments
under the Loan Documents any United States federal-income Tax at the full rate
applicable under the IRC.
4. LOAN AGREEMENT AND COMMITMENTS. From and after the Effective Date (a)
------------------------------
Assignee shall be a party to the Loan Agreement and (to the extent provided in
this agreement) have the Rights and obligations of a Lender under the Loan
Documents and (b) Assignor shall (to the extent provided in this agreement)
relinquish its Rights and be released from its obligations under the Loan
Documents. On the Effective Date, after giving effect to this and certain other
assignment and assumption agreements that become effective on the Effective
Date, but without giving effect to any other assignments that have not yet
become effective, Assignor's and Assignee's Warehouse Commitments, Working-
Capital Commitments, Term-Line Commitments, and Combined Commitments will be as
follows:
===========================================================================
WAREHOUSE WORKING-CAPITAL TERM-LINE COMBINED
LENDER COMMITMENTS COMMITMENTS COMMITMENTS COMMITMENTS
===========================================================================
Assignor $ $ $ $
---------------------------------------------------------------------------
Assignee
---------------------------------------------------------------------------
5. NOTES. Assignor and Assignee request Borrower to issue new Notes to
-----
Assignor and Assignee in the amounts of their respective commitments under
PARAGRAPH 4 above and otherwise issue these Notes in accordance with the Loan
Agreement. Upon delivery of those Notes, Assignor shall return to Borrower all
Notes previously delivered to Assignor under the Loan Agreement.
6. PAYMENTS AND ADJUSTMENTS. From and after the Effective Date, Agent
------------------------
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees, and other amounts) to Assignee. Assignor and
Assignee shall make all appropriate adjustments in payments for periods before
the Effective Date by Agent or with respect to the making of this assignment
directly between themselves. Assignor agrees to apply any payments and proceeds
with respect to the Obligation ratably with Assignee.
7. CONDITIONS PRECEDENT. PARAGRAPHS 1 through 6 above are not effective
--------------------
until (a) counterparts of this agreement are executed by Assignor, Assignee,
Agent, and Borrower, and are delivered to Agent and Borrower and (b) pursuant to
SECTION 12.14(A)(II), Assignor pays to Agent an administrative transfer fee of
2 EXHIBIT F-2
-----------
$2,500. If Agent is the Assignor, the requirement of SECTION 12.14(A)(II) is
waived with regard to this agreement.
8. INCORPORATED PROVISIONS. Although this agreement is not a Loan
-----------------------
Document, the provisions of the Loan Agreement applicable to Loan Documents are
incorporated into this instrument by reference the same as if this agreement
were a Loan Document and those provisions were set forth in this agreement
verbatim.
9. COMMUNICATIONS. For purposes of SECTION 12.2 of the Loan Agreement,
--------------
Assignee's address and telecopy number -- until changed under that section --
are beside its signature below.
10. AMENDMENTS, ETC. No amendment, waiver, or discharge to or under this
---------------
agreement is valid unless in writing that is signed by the party against whom it
is sought to be enforced and is otherwise in conformity with the requirements of
the Loan Agreement.
11. ENTIRETY. THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN
--------
ASSIGNOR AND ASSIGNEE ABOUT ITS SUBJECT MATTER AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF ASSIGNOR
AND ASSIGNEE. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN ASSIGNOR AND
ASSIGNEE.
12. PARTIES. This agreement binds and benefits Assignor, Assignee, and
-------
their respective successors and assigns as permitted under the documents.
EXECUTED as of the date first stated above.
BANK ONE, TEXAS, N.A., as Assignor _______________________, as Assignee
and Agent
By ____________________________________ By __________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President Name ________________________________
Title _______________________________
(Address) __________________________
__________________________
__________________________
Attn:_____________________
(Tel. No.)(___) ___-_____
(Fax No.)(___) ___-_____
3 EXHIBIT F-2
-----------
As of the Effective Date, Agent (per the above signature) and Borrower
consent to this agreement and the transactions contemplated in it.
MATRIX FINANCIAL SERVICES
CORPORATION, as Borrower
By ____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice President
4 EXHIBIT F-2
-----------