Exhibit 10.31
Annex I
Supplemental Terms and Conditions for
Master Repurchase Agreement
The supplemental terms and conditions set forth in this Annex I (the
"Supplemental Terms") form a part of the Master Repurchase Agreement, dated as
of August 1, 1997 (the "Master Repurchase Agreement"), between EMERGENT MORTGAGE
CORP., as Seller, and FIRST UNION NATIONAL BANK, as Buyer. To the extent that
these Supplemental Terms conflict with the terms of the Master Repurchase
Agreement, these Supplemental Terms shall control. These Supplement Terms,
together with the Master Repurchase Agreement, shall constitute the "Agreement",
as that term is used in the Master Repurchase Agreement and in these
Supplemental Terms. Only this Annex I and Annex II have been made a part of the
Agreement.
1. Definitions
Capitalized terms used herein but not otherwise defined shall have the
meanings set forth below or, if not defined herein, in the Master Repurchase
Agreement. Capitalized terms used in the Master Repurchase Agreement whose
definitions are modified in these Supplemental Terms shall be replaced by such
modified definitions.
"Additional Required Documents" shall have the meaning assigned in the
Warehousing Agreement.
"Agreement Termination Date" shall mean the date that is ninety (90)
days after the Buyer has given notice of termination to the Seller.
"Business Day" shall mean any day except Saturday, Sunday and any day
which is a legal holiday or a day on which banking institutions are authorized
or required by law to close in Charlotte, North Carolina.
"Buyer" shall mean First Union National Bank, a national banking
association, with its principal place of business in Charlotte, North Carolina.
"Buyer's Margin Percentage" shall have the meaning assigned in the
related Confirmation.
"Confirmation" shall mean a confirmation for a Transaction
substantially in the form of Exhibit A hereto.
"Corporate Base Rate" shall have the meaning set forth in the
Warehousing Agreement.
"Default Rate" shall mean, for any day, the Pricing Rate for such day
plus 4.00%.
"Eligible Mortgage Loan" shall mean a Mortgage Loan meeting the
requirements for an "Eligible Mortgage Loan," as such term is defined in the
Warehousing Agreement, with the exceptions from the requirements of that
definition that may be listed on Schedule II to the related Confirmation.
"Eurodollar Rate" shall have the meaning set forth in the Warehousing
Agreement.
"Fed Funds Rate" shall have the meaning set forth in the Warehousing
Agreement.
"Guaranty" shall mean the guaranty agreement, dated as of August 1,
1997, executed by the Guarantor in favor of the Buyer.
"Guarantor" shall mean Emergent Group, Inc., a South Carolina
corporation.
"Indemnified Parties" shall have the meaning set forth in Paragraph 13
of these Supplemental Terms.
"Market Value" shall have the meaning set forth in Paragraph 7 of these
Supplemental Terms.
"Mortgage Loans" shall have the meaning set forth in the Warehousing
Agreement.
"Pricing Rate" for a Transaction shall be the rate specified in the
related Confirmation.
"Purchase Date" shall mean the date on which Purchased Securities are
transferred by the Seller to the Buyer in a Transaction, which date shall be
specified in the related Confirmation.
"Purchase Price" for a Transaction shall be the price specified in the
related Confirma- tion.
"Repurchase Date" shall mean the earliest to occur of (i) the
occurrence of an Event of Default, (ii) the date on which the Buyer demands the
repurchase of the related Purchased Securities by the Seller pursuant to
Paragraph 6 of these Supplemental Terms, (iii) the Agreement Termination Date or
(iv) the date specified in the related Confirmation as the Repurchase Date for
such Purchased Securities (which must be no more than thirty (30) days following
the related Purchase Date or, if such day is not a Business Day, the following
Business Day).
"Required Documents" shall have the meaning assigned in the Warehousing
Agreement.
"Securities" shall mean Mortgage Loans.
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"Seller" shall mean Emergent Mortgage Corp., a South Carolina
corporation.
"Transaction" shall mean each transaction between the Seller and the
Buyer that is undertaken pursuant to a single Confirmation.
"Warehousing Agreement" shall mean the Mortgage Loan Warehousing
Agreement, dated as of March 20, 1997, by and among Emergent Mortgage Corp., the
lenders from time to time party thereto, The First National Bank of Boston, as
co-agent, and First Union National Bank, as administrative agent for the
lenders, as amended from time to time.
2. Transaction Initiation
The following paragraph shall be added as Paragraph 3(b) of the Master
Repurchase Agreement and existing Paragraphs 3(b) and 3(c) of the Master
Repurchase Agreement shall become Paragraphs 3(c) and 3(d) respectively (and all
references in the Master Repurchase Agreement to Paragraphs 3(b) and 3(c) shall
be deemed to be to Paragraphs 3(c) and 3(d) respectively):
"(b) The Buyer's obligation to purchase any Mortgage Loan
shall be subject to the following:
(i) The Buyer's determination that it desires to
enter into such Transaction.
(ii) The Buyer's receipt of the Required Documents
for each Mortgage Loan to be purchased.
(iii) The Buyer's determination that the Mortgage
Loans to be purchased in the requested Transaction satisfy the
requirements of this Agreement.
(iv) The Seller's representations and warranties
contained in this Agreement and reaffirmed in the Confirmation
shall be true and correct.
(v) No Event of Default shall have occurred under
this Agreement.
(vi) The Guarantee shall be in full force and
effect."
3. Transaction Confirmation
(a) The Buyer shall prepare and deliver the Confirmation to the Seller
at least one (1) Business Day prior to the Purchase Date for a Transaction.
(b) Each Confirmation shall be binding upon the parties unless written
notice of objection is given by the objecting party prior to the closing of the
Transaction.
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4. Margin Calls
(a) Paragraph 4(a) of the Master Repurchase Agreement is hereby deleted
in its entirety and replaced by the following new Paragraph 4(a):
"(a) If at any time the aggregate Market Value of all
Purchased Securities subject to a single Transaction is less than the
Buyer's Margin Amount for such Transaction (a "Margin Deficit"), then
the Buyer may by notice to the Seller require that the Seller, at the
Buyer's option, transfer to the Buyer cash or additional Securities
reasonably acceptable to the Buyer ("Additional Purchased Securities"),
so that the cash and the aggregate Market Value of the Purchased
Securities in such Transaction (including any Additional Purchased
Securities) will then equal or exceed the applicable Buyer's Margin
Amount."
(b) The provisions set forth in Paragraph 4(b) of the Master Repurchase
Agreement and any other provision of the Master Repurchase Agreement which gives
the Seller the right to demand that the Buyer pay to or acquire for the Seller's
account, cash or Purchased Securities or obligates the Buyer to do so are not
applicable and are hereby deleted from the Agreement.
(c) Paragraphs 4(c) and 4(d) of the Master Repurchase Agreement are
hereby deleted in their entirety and replaced by the following new Paragraph
4(b):
"(b) If any notice is given by the Buyer under subparagraph
(a) of this Paragraph on any Business Day, then the Seller shall
transfer cash or Additional Purchased Securities as provided in such
subparagraph no later than the close of business on the second Business
Day following the date on which such notice is given. Any cash
transferred pursuant to this subparagraph (b) shall be applied solely
to reduce the Repurchase Price of the Transaction subject to the Margin
Deficit."
(d) Paragraphs 4(e) and 4(f) of the Master Repurchase Agreement are
hereby deleted in their entirety.
5. Payments on Securities
All funds received by the Seller, in its capacity as servicer with
respect to Mortgage Loans that are Purchased Securities, shall be held by the
Seller in trust for the Buyer until such Mortgage Loans have been repurchased by
the Seller.
6. Segregation of Purchased Securities; Substitution
(a) Paragraph 8 of the Master Repurchase Agreement is hereby deleted in
its entirety.
(b) Paragraph 9 of the Master Repurchase Agreement is hereby deleted in
its entirety.
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7. Market Value Determination
With respect to each Purchased Security, the "Market Value" thereof
shall be as determined by the Buyer in its sole discretion.
8. Repurchase Prior to Repurchase Date
Notwithstanding any provision hereof to the contrary, the Seller may
require the Buyer to repurchase any or all of the Purchased Securities subject
to a Transaction upon two (2) Business Days' prior notice.
9. Delivery of Securities
All of the Required Documents for Mortgage Loans that are to be
Purchased Securities for a Transaction shall be delivered to the Buyer at least
three (3) Business Days prior to the Purchase Date for such Transaction.
10. Representations and Warranties
(a) In addition to the representations made in Paragraph 10 of the
Master Repurchase Agreement, the Seller hereby represents and warrants that, as
of the date of this Agreement and as of the Purchase Date for each Transaction:
(i) The Seller is servicing all Mortgage Loans in accordance
with the manner in which it services mortgage loans held in its own
portfolio.
(ii) No Event of Default has occurred or is continuing under
this Agreement.
(iii) All representations and warranties of the Seller
contained in the Warehousing Agreement are true and correct.
(b) The Seller hereby represents and warrants to the Buyer that, as to
each Mortgage Loan, as of the applicable Purchase Date or such other date
specified herein:
(i) The information set forth in the schedule of Mortgage
Loans attached to each Confirmation is true and correct in all material
respects.
(ii) Such Mortgage Loan is an Eligible Mortgage Loan.
11. Covenants
The Seller covenants with the Buyer that:
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(a) The Seller shall act as servicer for all Mortgage Loans,
will service all Mortgage Loans in accordance with the manner in which
it services mortgage loans held in its own portfolio and shall not sell
or transfer its rights to service such loans without the Buyer's
consent.
(b) The Seller shall notify the Buyer of any default or event
of default that has occurred under any other credit agreement for which
the Seller is the primary obligor.
(c) The Seller shall comply with all of its covenants
contained in the Warehousing Agreement as if such covenants were
contained in this Agreement and as if the Buyer were the
"Administrative Agent" under the Warehousing Agreement.
(d) The Seller shall hold all Additional Required Documents
for the Mortgage Loans that are Purchased Securities in trust for the
benefit of the Buyer.
12. Events of Default
(a) The term "Event of Default" shall, in addition to the definition
set forth in the Master Repurchase Agreement, include the following events:
(i) If, for any reason, any Transaction is not deemed to be a
purchase and sale, the Agreement shall for any reason cease to create a
valid, first priority security interest in any of the Purchased
Securities purported to be covered thereby.
(ii) Any representation or warranty made by the Seller in this
Agreement shall have been incorrect or untrue when made or repeated or
when deemed to have been made or repeated.
(iii) The Seller shall breach any covenant, requirement or
obligation contained in this Agreement.
(iv) A default or event of default shall occur under any
credit agreement for which the Seller is the primary obligor.
(v) The Seller shall fail to repurchase any Purchased
Securities at the Repurchase Price when required by Paragraph 8 of
these Supplemental Terms.
(b) In addition to the remedies contained in this Agreement, the Buyer
shall have the following remedies upon the occurrence of an Event of Default by
the Seller:
(i) The Buyer may refuse to enter into any further
Transactions with Seller under this Agreement and may determine that
the Agreement is terminated.
(ii) Notwithstanding the last sentence of Paragraph 11(h) of
the Master
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Repurchase Agreement, the Buyer will be entitled to receive interest at
the Default Rate on any sum payable by the Seller pursuant to Paragraph
11(h) of the Master Repurchase Agreement.
13. Indemnification
If the Buyer becomes involved in any capacity in any action, proceeding
or investigation in connection with any matter contemplated by this Agreement,
the Seller will reimburse the Buyer for its legal and other expenses (including
the cost of any investigation and preparation) as they are incurred by the
Buyer. The Seller also agrees to indemnify and hold harmless the Buyer and its
affiliates and their respective directors, officers, employees and agents
(collectively, the "Indemnified Parties"), from and against any and all losses,
claims, damages and liabilities, joint or several, related to or arising out of
any matters contemplated by this Agreement, unless and only to the extent that
it shall be finally judicially determined that such losses, claims, damages or
liabilities resulted primarily from the gross negligence or willful misconduct
of the Buyer.
If the foregoing indemnification is for any reason unavailable to any
of the Indemnified Parties, then the Seller shall contribute to the amount paid
or payable by the Indemnified Parties as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative benefits
received by the Seller, on the one hand, and such Indemnified Parties, on the
other, arising out of the matters contemplated by this Agreement.
The reimbursement, indemnity and contribution provided for herein shall
be in addition to any other liability that the Seller may otherwise have under
this Agreement, at law or in equity and shall survive the termination or
expiration of this Agreement.
14. Limited Power of Attorney
The Seller hereby appoints the Buyer to act (after the occurrence and
during the continuation of an Event of Default) as the attorney-in-fact of the
Seller for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments that the Buyer shall deem
necessary or advisable to accomplish the purposes hereof. This appointment as
attorney-in-fact is irrevocable and is coupled with an interest. Without
limiting the generality of the foregoing, the Buyer and its assigns shall have
the right and power to sell Purchased Securities and to receive, endorse and
collect all checks made payable to the order of the Seller on account of the
principal or interest on any of the Purchased Securities and to give full
discharge of the same.
15. Additional Transactions
From time to time, the Buyer, at its sole discretion, may elect to
participate in Transactions governed by the terms of the Agreement.
16. Termination
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The parties agree that, to the extent the Agreement is not terminated
earlier pursuant to its terms, this Agreement shall automatically terminate on
the Agreement Termination Date. The termination of this Agreement by either
party shall not eliminate any liability for losses incurred by either party
during the duration of this Agreement. To the extent that this Agreement is
terminated, the terms of this Agreement shall continue to apply to any
Transactions outstanding after the termination of this Agreement.
17. Time
All references to time contained in the Agreement shall be deemed to be
local time in Charlotte, North Carolina on the applicable day.
18. Fees and Expenses
Nothing in this Agreement shall act as a bar to the collection of any
fees or expenses of the Buyer that the Seller may agree to pay in any separate
agreement relating to any or all of the Transactions.
19. Payment of Secured Creditors
The Seller may direct the Buyer to pay all or any portion of the
Purchase Price for a Transaction to one or more creditors of the Seller, or any
of its affiliates, if such payment is necessary to release a lien on the
Securities that are to be purchased in such Transaction. Such payment and
release of an existing lien may occur simultaneously with the purchase of
Securities under this Agreement.
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IN WITNESS WHEREOF, the Seller and the Buyer have caused these
Supplemental Terms to be executed by their authorized representatives as of this
1st day of August, 1997.
EMERGENT MORTGAGE CORP.,
as Seller
By: ____________________________
Name: __________________________
Title: _________________________
FIRST UNION NATIONAL BANK,
as Buyer
By: ____________________________
Name: __________________________
Title: _________________________
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Exhibit A to Annex I
Form of Confirmation
[Date]
Emergent Mortgage Corp.
Wachovia Building
00 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxx
Ladies and Gentlemen:
Pursuant to the master repurchase agreement (the "Master Repurchase
Agreement"), dated as of August 1, 1997, between the undersigned (the "Buyer")
and you (the "Seller"), the Buyer hereby agrees to purchase the Mortgage Loans
identified on Schedule I attached hereto, subject to the terms set forth below:
Purchase Date: ________________
Repurchase Date: ________________
[must be no more than thirty (30) days following the Purchase Date (or,
if such day is not a Business Day, the following Business Day)]
Purchase Price: ________________
Pricing Rate: ________________
Buyer's Margin Percentage: ________________
All of the representations and warranties made in the Master Repurchase
Agreement must be true and correct as of the Purchase Date and no Event of
Default shall have occurred. Capitalized terms used, but not defined, herein
shall have the meanings assigned to them in the Master Repurchase Agreement.
Any aspects of a Mortgage Loan to be purchased hereunder that would
cause such Mortgage Loan not to be an "Eligible Mortgage Loan" (as defined in
the Warehousing Agreement) shall be listed on Schedule II attached hereto.
A-1
If you are in agreement with these terms, please execute the
acknowledgement and acceptance set forth below and return one copy of this
Confirmation to the Buyer.
Very truly yours,
FIRST UNION NATIONAL BANK,
as Buyer
By: ___________________________
Name: _________________________
Title: ________________________
Accepted and Agreed as of
this ____ day of __________, ____.
EMERGENT MORTGAGE CORP.,
as Seller
By: ______________________________
Name: ____________________________
Title: ___________________________
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Schedule I to Confirmation
Mortgage Loan Schedule
A-3
Schedule II to Confirmation
Exceptions from "Eligible Mortgage Loan" Definition
A-4
Annex II
Names and Addresses for Communications Between Parties
Emergent Mortgage Corp.
Wachovia Building
00 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxx
Telephone: 864/000-0000
Facsimile: 864/271-8374
First Union National Bank
000 Xxxxx Xxxxxxx Xxxxxx, XX-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: R. Xxxxxx Xxxx, Vice President
Telephone: 704/000-0000
Facsimile: 704/374-7102
A-5
