WAREHOUSING CREDIT AND SECURITY AGREEMENT
(SINGLE-FAMILY MORTGAGE LOANS)
BETWEEN
MONUMENT MORTGAGE, INC., a California corporation
AND
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
Dated as of March 22 , 1995
---------------------------------------------------------------------------
----
---------------------------------------------------------------------------
----
TABLE OF CONTENTS
PAGE
1. DEFINITIONS
...............................................................1
1.1.Defined
Terms..........................................................1
1.2.Other Definitional
Provisions.........................................15
2. THE
CREDIT................................................................15
2.1.The Warehousing
Commitment............................................15
2.2.Procedures for Obtaining Warehousing
Advances.........................17
2.3.The Term Loan
Commitment..............................................19
2.4.Procedures for Obtaining Term Loan
Advances...........................19
2.5.The Working Capital
Commitment........................................21
2.6.Procedures for Obtaining Working Capital
Advances.....................21
2.7.Notes.................................................................2
2
2.8.Interest..............................................................2
2
2.9.Principal
Payments....................................................23
2.10.Expiration of
Commitments............................................26
2.11.Method of Making
Payments............................................27
2.12.Warehousing Commitment
Fee...........................................27
2.13.Working Capital Commitment
Fee.......................................27
2.13. Working Capital Maturity
Date.......................................28
2.14.Term Loan Commitment
Fee.............................................28
2.15.Warehousing
Fees.....................................................28
2.16.Miscellaneous
Charges................................................28
2.17.Interest
Limitation..................................................29
2.18.Increased Costs: Capital
Requirements................................29
3.
COLLATERAL................................................................3
0
3.1.Grant of Security
Interest............................................30
3.2.Release of Security Interest in
Collateral............................32
0.0.Xxxxxxxx of Additional Collateral or Mandatory
Prepaymt...............33
3.4.Release of Warehousing
Collateral.....................................34
3.5.Collection and Servicing
Rights.......................................34
3.6.Return of Collateral at End of
Commitment.............................34
4. CONDITIONS
PRECEDENT......................................................35
4.1.Initial
Advance.......................................................35
4.2.Each
Advance..........................................................37
5. REPRESENTATIONS AND
WARRANTIES............................................38
5.1.Organization: Good Standing;
Subsidiaries.............................38
5.2.Authorization and
Enforceability......................................38
5.3.Approvals.............................................................3
9
0.0.Xxxxxxxxx
Condition...................................................39
5.5.Litigation............................................................3
9
5.6.Compliance with
Laws..................................................40
5.7.Regulations G and
U...................................................40
5.8.Investment Company
Act................................................40
5.9.Payment of
Taxes......................................................40
5.10.Agreements...........................................................4
0
5.11.Title to
Properties..................................................41
5.12.ERISA................................................................4
1
5.13.Eligibility..........................................................4
1
0.00.Xxxxx of
Business....................................................42
5.15.Special Representations Concerning
Collateral........................42
5.16.Servicing............................................................4
4
5.17.Special Representations Concerning Pledged Servicing
Contracts.......44
5.18.Special Representations Concerning
Receivables.......................45
6. AFFIRMATIVE
COVENANTS.....................................................46
6.1.Payment of
Notes......................................................46
0.0.Xxxxxxxxx Statements and Other
Reports................................46
6.3.Maintenance of Existence; Conduct of
Business.........................48
6.4.Compliance with Applicable
Laws.......................................48
6.5.Inspection of Properties and
Books....................................48
6.6.Notice................................................................4
9
6.7.Payment of Debt, Taxes,
etc...........................................49
0.0.Xxxxxxxxx.............................................................4
9
6.9.Closing
Instructions..................................................50
6.10.Subordination of Certain
Indebtedness................................50
6.11.Other Loan
Obligations...............................................50
6.12.Use of Proceeds of
Advances..........................................50
6.13.Special Affirmative Covenants Concerning
Collateral..................50
7. NEGATIVE
COVENANTS........................................................51
7.1.Contingent
Liabilities................................................52
0.0.Xxxx or Pledge of Servicing
Contracts.................................52
7.3.Merger; Sale of Assets;
Acquisitions..................................52
7.4.Deferral of Subordinated
Debt.........................................52
7.5.Loss of
Eligibility...................................................52
7.6.Current
Ratio.........................................................52
7.7.Debt to Adjusted Tangible Net Worth
Ratio.............................52
7.8.Minimum Tangible Net
Worth............................................52
7.9.Minimum Adjusted Tangible Net
Worth...................................52
7.10.Minimum Servicing
Portfolio..........................................52
7.11.Dividends............................................................5
3
7.12.Transactions with
Affiliates.........................................53
7.13.Acquisition of Recourse Servicing
Contracts..........................53
7.14.Special Negative Covenants Concerning
Collateral.....................53
8. DEFAULTS;
REMEDIES........................................................53
0.0.Xxxxxx of
Default.....................................................53
8.2.Remedies..............................................................5
6
8.3.Application of
Proceeds...............................................59
8.4.Lender Appointed Attorney-in-
Fact.....................................60
8.5.Right of Set-
Off......................................................61
9.
NOTICES...................................................................6
1
10. REIMBURSEMENT OF EXPENSES;
INDEMNITY.....................................62
11. FINANCIAL
INFORMATION....................................................62
12.
MISCELLANEOUS............................................................63
12.1.Terms Binding Upon Successors Survival of
Representations............63
12.2.Assignment...........................................................6
3
12.3.Amendments...........................................................6
3
12.4.Governing
Law........................................................63
12.5.Participations.......................................................6
3
12.6.Relationship of the
Parties..........................................63
12.7.Severability.........................................................6
4
12.8.Operational
Reviews..................................................64
12.9.Consent to Credit
References.........................................64
12.10.Consent to
Jurisdiction.............................................64
12.11.Counterparts........................................................6
4
12.12.Entire
Agreement....................................................65
12.13.WAIVER OF JURY
TRIAL................................................65
EXHIBITS
Exhibit A-1 Warehousing Promissory Note
Exhibit A-2 Sublimit Promissory Note
Exhibit A-3 Working Capital Promissory Note
Exhibit A-4 Term Loan Promissory Note
Exhibit B-1 Guaranty of Xxxxx X. Xxxxx
Exhibit B-2 Guaranty of Xxxxx X. Xxxxxxxx
Exhibit C-SF Request for Advance Against Single Family
Mortgage
Loans
Exhibit C-TL Term Loan Advance Request
Exhibit C-WC Working Capital Advance Request
Exhibit D-SF Procedures and Documentation for Warehousing
Single Family Mortgage Loans
Exhibit D-TL Procedures and Documentation for Requesting
Term
Loan Advances
Exhibit E Schedule of Servicing Contracts
Exhibit F Subordination of Debt Agreement
Exhibit G Subsidiaries
Exhibit H Legal Opinion
Exhibit I-SF Officer's Certificate
Exhibit J Schedule of Existing Warehouse Lines
Exhibit K Funding Bank Agreement (Wire)
Exhibit L Commitment Summary Report
Exhibit M Bailee Pledge Agreement
THIS WAREHOUSING CREDIT AND SECURITY AGREEMENT, dated as of March
22 ,
1995, between MONUMENT MORTGAGE, INC. , a California corporation
(the
"Company"), having its principal office at 0000 Xxxxxx Xxxxxx, Xxxxx 000,
Xxxxxx
Xxxxx, Xxxxxxxxxx 00000 and RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lendern), having its principal office at 0000 Xxxxxxxxxx
Xxxx
Xxxx., Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000.
WHEREAS, the Company and the Lender desire to set forth herein the
terms
and conditions upon which the Lender shall provide warehouse financing,
related
working capital financing and term loan financing to the Company;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINITIONS .
1.1. Defined Terms. Capitalized terms defined below or elsewhere in
this
Agreement (including the Exhibits hereto) shall have the following
meanings:
"Acknowledgment Agreement" has the meaning set forth in Section
8.2(i)
hereof.
"Adjustable Rate Mortgage Loan" means a Single-family Mortgage
Loan
that bears interest at a fluctuating rate and that is eligible for
purchase
by an Investor.
"Adjusted Servicing Portfolio" means, for any Person, the
Servicing
Portfolio of such Person, but excluding the principal balance of
Mortgage
Loans included in the Servicing Portfolio at such date (a) which are
past
due for principal of interest for sixty (60) days or more, (b) with
respect
to which such Person is obligated to repurchase or indemnify the
holder of
the Mortgage Loans as a result of defaults on the Mortgage Loans
at any
time during the term of such Mortgage Loans, (c) for which the
Servicing
Contracts are not owned by such Person free and clear of all Liens
(other
than in favor of the Lender), or (d) which are serviced under
subservicing
arrangements.(1)
"Adjusted Tangible Net Worth" means with respect to any Person
at any
date, the Tangible Net Worth of such Person at such date plus the
product
obtained by multiplying one hundred basis points (0.01) times the
Adjusted
Servicing Portfolio.(1)
"Advance" means a disbursement by the Lender under the
Commitment
pursuant to Article 2 of this Agreement, including, without
limitation,
Ordinary Warehousing Advances, Wet Settlement Advances, Home
Equity
Advances, Nonconforming Advances, Second Mortgage Advances, Working
Capital
Advances, Term Loan Advances and readvances of funds previously
advanced to
the Company and repaid to the Lender.(1)
----------
(1) Replaced in Third Amendment (2/29/96) - Page 4.
"Advance Request" has the means a Warehousing Advance
Request, a
Working Capital Advance Request or a Term Loan Advance Request.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
General
Rules and Regulations under the Exchange Act.
"Agreement" means this Warehousing Credit and Security
Agreement
(Single Family Mortgage Loans), either as originally executed or as
it may
from time to time be supplemented, modified or amended.
"Appraisal" means a certificate of independent certified
public
accountants or independent financial consultants selected by the
Company
and reasonably satisfactory to the Lender as to the Appraisal Value
of the
Servicing Contracts included in the Servicing Collateral, which
shall
evaluate such Servicing Contracts based upon reasonably
determined
categories of the Mortgage Loans contained therein and give effect
to any
subservicing agreement to which any such Mortgage Loan is or
will be
subject, which certificate shall be in form, substance and
detail
reasonably satisfactory to the Lender.
"Appraised Value" means, at any date of determination, with
respect to
the FMMA and FHLMC Servicing Contracts included in the
Servicing
Collateral, the fair market value of the Company's right to
service
Mortgage Loans pursuant to such Servicing Contracts, calculated
as a
percentage of the unpaid principal amount of each category of
Mortgage
Loans serviced pursuant thereto, as set forth in the most recent
Appraisal,
adjusted to account for changes in the Mortgage Loans serviced
pursuant to
such Servicing Contracts since the date of such Appraisal.
"Approved Custodian" means First Commonwealth Savings Bank, or
other
Person which is deemed acceptable to the Lender from time to time
in its
sole discretion.(1)
"Bailee Pledge Agreement" has the meaning set forth in Section
2.2(b)
hereof.
----------
(1) Replaced in Third Amendment (2/29/96) - Page 4.
"Base Rate" shall mean the highest prime rate quoted by The
First
National Bank of Chicago and most recently published by Xxxxxx-Xxxxxx,
Inc.
on its MoneyCenter system. If the prime rate is not so quoted or
published
for any period, then during such period the term "Base Rate" shall
mean the
highest quoted prime rate most recently published in The Wall
Street
Journal in its regular column entitled "Money Rates."
"Business Day" means any day excluding Saturday or Sunday
and
excluding any day on which national banking associations are
closed for
business.
"Calendar Quarter" shall mean the three (3) month period
beginning on
any January l, April I, July 1 or October 1.
"Cash Collateral Account" means a demand deposit account
maintained at
the Funding Bank in the name of the Lender and designated for
receipt of
the proceeds of the sale or other disposition of the Collateral.
"Closing Date" means March 22, 1995.
"Collateral" has the meaning set forth in Section 3.1 hereof.
"Collateral Documents" has the meaning set forth in Section
2.2(a)
hereof.
"Collateral Value" means (a) with respect to any Mortgage Loan
as of
the date of determination, the lesser of (i) the amount of any Advance
made
against such Mortgage Loan under Section 2.1(c) hereof or (ii) the
Fair
Market Value of such Mortgage Loan; or (b) in the event Pledged-
Mortgages
have been exchanged for Pledged Securities, the aggregate Fair Market
Value
of the Mortgage Loans backing such Pledged Securities.(1)
"Commitment" means the Warehousing Commitment, the Working
Capital
Commitment or the Term Loan Commitment.
"Commitment Amount" added Third Amendment (2/29/96) pg. 2.
"Commitment Fee" means the Warehousing Commitment Fee, the
Working
Capital Commitment Fee or the Term Loan Commitment Fee.
"Committed Purchase Price" means for a Mortgage Loan the
product of
the Mortgage Note Amount multiplied by (a) the price (expressed
as a
percentage) as set forth in a Purchase Commitment for such Mortgage
Loan or
(b) in the event such Mortgage Loan is to be used to back a Mortgage-
backed
Security, the price (expressed as a percentage) as set forth in a
Purchase
Commitment for such Mortgage-backed Security.
"Company" has the meaning set forth in the first paragraph of
this
Agreement.
----------
(1) Replaced in Third Amendment (2/29/96) - Page 4.
"Conforming Mortgage Loan" means an FHA insured or VA
guaranteed
Mortgage Loan or a Conventional Mortgage Loan which is
underwritten in
accordance with FNMA/FHLMC underwriting standards, is eligible
for
inclusion in a FNMA or FHLMC Mortgage-backed Security and the
principal
amount of which-is less than or equal to the maximum amount
eligible for
purchase by FNMA or FHLMC.(1)
"Conventional Mortgage Loan" means a Mortgage Loan, other than
an FHA
insured or VA guaranteed Mortgage Loan.(2)
"Debt" means, with respect to any Person, at any date (a)
all
indebtedness or other obligations of such Person which, in accordance
with
GAAP, would be included in determining total liabilities as shown
on the
liabilities side of a balance sheet of such Person at such date;
and (b)
all indebtedness or other obligations of such Person for borrowed
money or
for the deferred purchase price of property-or services; provided
that for
purposes of this Agreement, there shall be excluded from Debt at any
date
loan loss reserves, Subordinated Debt not due within one year of such
date,
and deferred taxes arising from capitalized excess servicing fees.(1)
"Default" means the occurrence of any event or existence
of any
condition which, but for the giving of Notice, the lapse of time, or
both,
would constitute an Event of Default.
"Depository Benefit" shall mean the compensation received
by the
Lender, directly or indirectly, as a result of the Company's
maintenance of
Investable Balances with a Designated Bank.
"Designated Bank" means any bank(s) designated from time to
time by
the Lender to be a Designated Bank with whom the Lender has an
agreement
under which the Lender can receive a Depository Benefit.
"Eligible Balances" added in Third Amendment (2/24/96) pg. 2.
"Eligible Mortgage Pool" means a Mortgage Pool for which
(a) an
Approved Custodian has issued its initial certification (on the
basis of
which a Pledged Security is to be issued), (b) there exists a
Purchase
Commitment covering such Pledged Security, and (c) such Pledged
Security
will be delivered to the Lender.
----------
(1) Replaced in Fifth Amendment (12/12/96) - Page 3.
(2) Replaced in Third Amendment (2/29/96) - Page 5.
"ERISA" means the Employee Retirement Income Security Act of
1974 and
all rules and regulations promulgated thereunder, as amended from
time to
time and any successor statute.
"Event of Default" means any of the conditions or events set
forth in
Section 8.1 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended
from time to time, and any successor statute.
"Fair Market Value" means at any date with respect to-any
Mortgage
Loan covered by a valid Purchase Commitment, the Committed Purchase
Price,
or in the absence of a valid Purchase Commitment for a Mortgage Loan
or the
related Mortgage-backed Security (if such Mortgage Loan is to be
used to
back a Mortgage-backed Security), (a) in the case of Mortgage Loans
other
than Home Equity Loans and Mortgage-backed Securities backed by
Mortgage
Loans other than Home Equity Loans, the market price
(expressed as
Percentage of the outstanding principal balance) for thirty
(30) day
mandatory future delivery of such Mortgage Loan or Mortgage-backed
Security
published by Xxxxxx-Xxxxxx, Inc. on its MoneyCenter system or, if
not so
published, the average bid price (expressed as a percentage of
the
outstanding principal) quoted in writing to the Lender as of
the
computation date by any two nationally recognized, dealers selected
by the
Lender who at the time are making a market in similar Mortgage
Loans or
Mortgage-backed Securities, and (b) in the case of Home Equity
Loans and
Mortgage-backed Securities backed by Home Equity Loans, the
average bid
price quoted in writing to the Lender as of the/computation date by
any two
nationally recognized dealers selected by the Lender whoosh the
time are
making a market in similar Mortgage Loans or Mortgage-backed
Securities
multiplied, in the case of Mortgage Loans, by the outstanding
principal
balance thereof and, in the case of Mortgage-backed Securities,
by the
product of the pool factor of such Mortgage-backed Security times the
face
amount of such Mortgage-backed Security.(1)
"FHA" means the Federal Housing Administration and any
successor
thereto.
"FHLMC" means the Federal Home Loan Mortgage Corporation
and any
successor thereto.
"FICA" means the Federal Insurance Contributions Act.
"FIRREA" means the Financial Institutions Reform, Recovery
and
Enforcement Act of 1989, as amended from time to time, and the
regulations
promulgated and rulings issued thereunder.
"First Mortgage" means a Mortgage which constitutes a first
Lien on
the property covered thereby.
----------
(1) Replaced in Fifth Amendment (12/12/96) - Page 3.
"First Mortgage Loan" means a Mortgage Loan secured by a
First
Mortgage.
"FNMA" means the Federal National Mortgage Association and
any
successor thereto.
"Funding Bank" means The First National Bank of Chicago or any
other
bank designated from time to time by the Lender.
"Funding Bank Agreement" means the letter agreement
substantially in
the fore of Exhibit K hereto.
"GAAP" means generally accepted accounting principles set forth
in the
opinions and pronouncements of the Accounting Principles Board
and the
American Institute of Certified Public Accountants and statements
and
pronouncements of the Financial Accounting Standards Board or in such
other
statements by such other entity as may be approved by a significant
segment
of the accounting profession, which are applicable to the
circumstances as
of the date of determination.
"Gestation Agreement" means an agreement under which the
Company
agrees to sell or finance (a) a Pledged Mortgage prior to the
date of
purchase by an Investor, or (b) a Mortgage Pool prior to the
date the
Mortgage-backed Security is issued.
"GNMA" means the Government National Mortgage Association
and any
successor thereto.
"Goal Line Commitment" means the letter agreement between the
Company
and the Lender, as in effect from time to time, providing the
Company's
participation in the Goal Line Program.(1)
"Goal Line Program" means the Lender's program for the
purchase of
Home Equity Loans, as described in the Goal Line Part of the
RESIDENTIAL
FUNDING SELLER GUIDE (as amended, supplemented or otherwise modified
from
time to time).(1)
"Guarantor" means XXXXX X. XXXXX, XXXXX X. XXXXXXXX and any
other
Person that hereafter guarantees all or any portion of the
Company's
Obligations. If more than one Person is named as Guarantor, the
term
"Guarantor" shall mean each of such Persons and all of them,
and the
obligations of such Persons shall be joint and several.
----------
(1) Replaced in Fifth Amendment (12/12/96 - Pave 5.
"Guaranty" means a guaranty of all or any portion of the
Company's
Obligations. If more than one Guaranty is executed and delivered
to the
Lender, the term "Guaranty. shall mean each of such' Guaranties And
all of
them.
"High LTV Mortgage Loan" added in Fifth Amendment (12/12/96) pg.
2.
"Home Equity Advances" means Advances made against Home Equity
Loans
that are subject to the Goal Line Commitment.1
"Home Equity Loan" means an open-ended revaluing line of credit
that
is a Single-family Mortgage Loan secured by either a First Mortgage
or a
Second Mortgage.(1)
"HUD 203K Mortgage Loan" added in Third Amendment (2/29/96) pg 2.
"HUD" means the Department of Housing and Urban Development
and any
successor thereto.
"Indemnified Liabilities" has the meaning set forth in
Article 10
hereof.
"Internal Revenue Code" means the Internal Revenue Code of
1986, or
any subsequent federal income tax law or laws, as any of the foregoing
have
been or may from time to time be amended.
"Investable Balances" means all funds of or maintained by the
Company
and its Subsidiaries in accounts at a Designated Bank, less
balances to
support float, activity charges, reserve requirements, Federal
Deposit
Insurance Corporation insurance premiums and such other reductions
as may
be imposed by governmental authorities from time to time.
"Investor" means FMMA, FHLMC or a financially responsible
private
institution which is deemed acceptable by the Lender from time to
time in
its sole discretion.
"Jumbo Mortgage Loan" means a Conventional Mortgage Loan having
at any
time an unpaid principal amount in excess of the maximum amount
eligible
for purchase by FNMA or FHLMC and which meets all eligibility
requirements
for purchase by an Investor.(13)
"Lender" has the meaning set forth in the first paragraph of
this
Agreement.
----------
(1) Replaced in Fifth Amendment (12/12/96) - Page 3.
"LIBOR" means, for each calendar week, the rate of interest per
annum
which is equal to the arithmetic mean of the U.S. Dollar London
Interbank
Offered Rates for one (1) month periods as of 11:00 a.m. London tine
on the
first Business Day of each week on which the London Interbank
market is
open, as published by Xxxxxx-Xxxxxx, Inc. on its MoneyCenter system.
LIBOR
shall be rounded, if necessary, to the next higher one sixteenth
of one
percent (1/16%). If such U.S. dollar LIBOR rates are not so
offered or
published for any period, then during such period LIBOR shall
mean the
London Interbank Offered Rate for one (1) month periods published
on the
first Business Day of each week on which the London Interbank
market is
open, in the Wall Street Journal in its regular column entitled
"Money
Rates."
"Lien" means any lien, mortgage, deed of trust, pledge,
security
interest, charge or encumbrance of any kind (including any conditional
sale
or other title retention agreement, any lease in the nature thereof,
and
any agreement to give any security interest).
"Loan Documents" means this Agreement, the Notes, the Guaranty,
any
agreement of the Company relating to Subordinated Debt, and each
other
document, instrument or agreement executed by the Company in
connection
herewith or therewith, as any of the same may be amended, restated,
renewed
or replaced from time to time.
"Long-term Repurchase Advances" added in Third Amendment
(2/29/96)
pg.2.
"Margin Stock" has the meaning assigned to that term in
Regulations G
and U of the Board of Governors of the Federal Reserve System as in
effect
from time to time.
"Maturity Date" means, for any Advance, the Term Loan Maturity
Date,
the Warehousing Maturity Date or the Working Capital Maturity
Date, as
applicable.
"Miscellaneous Charges" added in Third Amendment (2/29/96) pg. 2.
"Mortgage" means a mortgage or deed of trust on improved
real
property. A Mortgage may be a First Mortgage or a Second Mortgage.
"Mortgage-backed Securities" means GNMA, FNMA or FHEMC securities
that
are backed by Mortgage Loans.
"Mortgage Loan" means any loan evidenced by a Mortgage Note. The
term
"Mortgage Loan" shall include First Mortgage Loans and Second
Mortgage
Loans unless the context otherwise requires.(1)
"Mortgage Note" means a promissory note secured by a Mortgage.
"Mortgage Note Amount" means, as of the date of determination,
the
then outstanding unpaid principal amount of a Mortgage Note
(whether or
not, in the case of a Mortgage Note evidencing a Home Equity
Loan, an
additional amount is available to be drawn thereunder).
----------
(1) Replaced in Third Amendment (2/29/96) - Page 5.
"Mortgage Pool" means a pool of one or more Pledged Mortgages
on the
basis of which there is to be issued a Mortgage-backed Security.
"Multiemployer Plan" means a "multiemployer plan" as
defined in
Section 4001(a)(3) of ERISA which it maintained for employees
of the
Company or a Subsidiary of the Company.
"Net Aggregate PHI Shortfall" means on any given date for
which a
regularly scheduled pass-through payment is required to be made
by the
Company to an Investor, the excess of all (i) principal and
interest
payments due the Investor in such payment over (ii) all principal
and
interest received for such monthly payment on the related Mortgage
Loans.
"Nonconforming Advances" means Advances made against
Nonconforming
Mortgage Loans subject to a Purchase Commitment.
"Nonconforming Mortgage Loan" means a First Mortgage Loan which
does
not conform to the eligibility requirements of FNMA or FHLMC with
respect
to the credit rating of the mortgagor, but which is underwritten
and
approved by an-Investor prior to funding, and which is to be sold
to the
Investor on a servicing-released basis.(1)
"Nonconforming Rate" means a floating rate of interest per annum
equal
to two and one-eighths percent (2-1/8%) over LIBOR. The Nonconforming
Rate
shall be adjusted on and as of the effective date of any change in
LIBOR.
The Lender's determination of the Nonconforming Rate as of any
date of
determination shall be conclusive and binding, absent manifest error.
"Notes" has the meaning set forth in Section 2.7 hereof.
"Notices" has the meaning set forth in Article 9 hereof.
"Obligations" means any and all indebtedness, obligations
and
liabilities of the Company to the Lender (whether now existing or
hereafter
arising, voluntary or involuntary, whether or not jointly owed with
others,
direct or indirect, absolute or contingent, liquidated or
unliquidated, and
whether or not from time to time decreased or extinguished and
later
increased, created or incurred), arising out of or related to the
Loan
Documents.
----------
(1) Replaced in Third Amendment (2/29/96) - Page 5.
"Officer's Certificate" means a certificate executed on behalf
of the
Company by its chief financial officer or its treasurer or by such
other
officer as may be designated herein and substantially in the
form of
Exhibit I-SF attached hereto.
"Operating Account" added in Third Amendment (2/29/96) pg 2.
"Ordinary Warehousing Advances". shall mean Warehousing Advances
other
than Home Equity Advances, Second Mortgage Advances and Non-
Conforming
Advances.(1)
"Ordinary Warehousing Rate" means a floating rate of interest
per
annum equal to one and five-eighths percent (1.625%) over LIBOR.
The
Ordinary Warehousing Rate shall be adjusted on and as of the effective
date
of any change in LIBOR. The Lender's determination of the
Ordinary
Warehousing Rate as of any date of determination shall be
conclusive and
binding, absent manifest error.
"Participant" has the meaning set forth in Section 12 hereof.
"Person" means and includes natural persons, corporations,
limited
partnerships, general partnerships, joint stock companies, joint
ventures,
associations, companies, trusts, banks, trust companies, land
trusts,
business trusts or other organizations, whether or not legal
entities, and
governments and agencies and political subdivisions thereof.
"Plans" has the meaning set forth in Section 5.12 hereof.
"Pledged Mortgages" has the meaning set forth in Section
3.1(a)
hereof.
"Pledged Securities" has the meaning set forth in Section
3.1(b)
hereof.
"Purchase Commitment" means a written commitment, in form
and
substance-satisfactory to the Lender, issued in favor of the Company
by an
Investor pursuant to which that Investor commits to purchase Mortgage
Loans
or Mortgage-backed Securities, including, with respect to Home
Equity
Loans, the Goal Line Commitment.(2)
"Receivables" has the meaning set forth in Section 3.1(g)
"Rejected Mortgage Loan" added in Third Amendment (2/29/96) pg.
2.
"Release Amount" has the meaning set forth in Section 3.2(g)
hereof.
"Repurchase Advance", "Repuchased Mortgage Loan", "Repurchase
Rate"
added in Third Amend. Pg. 3.
----------
(1) Replaced in Third Amendment (2/29/96) - Page 5.
(2) Replaced by Fifth Amendment (12/12/96) - Page 3.
"RFC" means Residential Funding Corporation, a Delaware
corporation,
and any successor thereto.
"RFC Mortgage Loan" added in Fifth Amendment (12/12/96) pg. 2.
"Second Mortgage" means a Mortgage which constitutes a second
Lien on
the property covered thereby.
"Second Mortgage Advances" means Advances made against Mortgage
Loans
that are secured by a Second Mortgage and that are subject to a
Purchase
Commitment, other than Home Equity Advances.
"Second Mortgage Loan" means a Mortgage Loan secured by a
Second
Mortgage.(1)
"Servicing Acquisition" means a transaction in which the
Company
acquires the right to service Mortgage Loans in bulk from one or
more
Persons, provided that not less than eighty percent (80%) of
the
outstanding principal balance of such Mortgage Loans are Single-
Family
Mortgage Loans.
"Servicing Collateral" means the Collateral described in
Sections
3.1(d) (subject to the proviso thereof), 3.1(e) and 3.1(f) hereof,
and all
Collateral described in Sections 3.1(h) and 3.1(i) and 3.1(j) hereof
that
constitutes proceeds of or is related to such Collateral.
"Servicing Collateral Value" means as of the date of
determination,
the lesser of: (a) seventy percent (70%) of the most recent Appraised
Value
of the FLEA and FHLMC Servicing Contracts included in the
Servicing
Collateral, or (b) one percent (1%) of the outstanding principal
balance of
the Mortgage Loans serviced pursuant to the FMMA and FHLMC
Servicing
Contracts included in the Servicing Collateral; Drovided, that for
purposes
of calculating the Servicing Collateral Value, the following Mortgage
Loans
shall be excluded: (i) Mortgage Loans excluded in calculating the
Adjusted
Servicing Portfolio, (ii) Mortgage Loans in respect of which the
Company
has commenced foreclosure proceedings, and (iii) Mortgage Loans in
respect
of which any obliger is the subject of a bankruptcy proceeding.
"Servicing Contract" means, with respect to any Person,
the
arrangement, whether or not in writing, pursuant to which such
Person has
the right to service Mortgage Loans.
"Servicing Portfolio" means, as to any Person, the unpaid
principal
balance of Mortgage Loans whose Servicing Contracts are owned by
such
Person.
----------
(1) Replaced in Third Amendment (2/26/96) - Page 5.
"Short-term Repuchase Advances" added in Third Amendment
(2/29/96)
page 3.
"Single-family Mortgage Loan" means a Mortgage Loan secured
by a
Mortgage covering improved real property containing one to four
family
residences.
"Statement Date" means the date of the most recent
financial
statements of the Company (and, if applicable, its Subsidiaries,
on a
consolidated basis) delivered to the Lender under the terms of
this
Agreement.
"Sublimit Promissory Note" means the promissory note
evidencing the
Company's Obligations with respect to Home Equity Advances.
Nonconforming
Advances and Second Mortgage Advances in the form of Exhibit A-2
attached
hereto.(1)
"Subordinated Debt" means all indebtedness of the Company,
for
borrowed money, which is, by its terms (which terms shall have
been
approved by the Lender), effectively subordinated in right of
payment to
all other present and future Obligations, and, solely for the
purpose of
Section 7.4 hereof, all indebtedness of the Company which is required
to be
subordinated by Section 4.1(b) or Section 6.10 hereof.
"Subsidiary" means any corporation, association or other
business
entity in which more than fifty percent (50~) of the total voting
power or
shares of stock entitled to vote in the election of directors,
managers or
trustees thereof is at the time owned or controlled,
directly or
indirectly, by any Person or one or more of the other Subsidiaries of
that
Person or a combination thereof.
"Tangible Net Worth" means with respect to any Person at any
date, the
excess of the total assets over portal liabilities of such Person on
such
date, each to be deterred in accordance with GAAP consistent with
those
applied in the preparation of the financial statements referred
to in
Section 4.1(a)(5) hereof, plus loan loss reserves, that
portion of
Subordinated Debt not due within one year of such date, and deferred
taxes
arising from capitalized excess servicing fees, provided that, for
purposes
at this Agreement, there shall be excluded from total assets
advances or
loans to shareholders, officers or Affiliates, investments in
Affiliates,
capitalized excess servicing fees, purchased servicing rights,
assets
pledged to secure any liabilities not intruded in the Debt of such
Person,
intangible assets and those other assets which would be deemed by HUD
to be
non-acceptable in calculating adjusted net worth in accordance
with its
requirements in effect as of such date, as such requirements
appertain the
"Audit Guide for Audit of Approved Non-Supervised Mortgagees" or
other
assets deemed unacceptable by the Lender in its sole discretion.(2)
----------
(1) Replaced in Third Amendment (2/29/96) - Page 5.
(2) Replaced in Third Amendment (2/29/96) Pages 5 & 6.
"Term Loan Advance" means a disbursement by the Lender under the
Term
Loan Commitment pursuant to Article 2 of this Agreement.
"Term Loan Advance Request" has the meaning set forth in
Section
2.4(a) hereof.
"Term Loan Commitment" has the meaning set forth in Section
2.3(a)
hereof.
"Term Loan Commitment Amount" added in Third Amend pg. 2.
"Term Loan Commitment Fee" means a fee payable by the
Company in
consideration of the Lender's issuance of its Term Loan Commitment.
The
amount of the Term Loan Commitment Fee is set forth in Section 2.14
hereof.
"Term Loan Commitment Termination Date" means the earlier of:
(a) the
close of business on March 22, 1996, as such date may be extended from
time
to time in writing by the Lender, in its sole discretion, and (b) the
date
the obligation of the Lender to make further Advances
hereunder is
terminated pursuant to Section 8.2 below.
"Term Loan Maturity Date" means the earlier of: (a) the
close of
business on March 22, 2000, as such date may be extended from time to
time
in writing by the Lender, in its sole discretion, and (b) the date the
Term
Loan Advances become due and payable pursuant to Section 8.2 below.
"Term Loan Promissory Note" means the promissory note
evidencing the
Company's Obligations with respect to Term Loan Advances in the
form of
Exhibit A-4 attached hereto.
"Term/Working Capital Rate" means a floating rate of interest
per
annum equal to five-eighths percent (.625%) per annum over the Base
Rate.
The Term/Working Capital Rate shall be adjusted on and as of the
effective
date of any change in the Base Rate. The Lender's determination
of the
Term/Working Capital Rate as of any date of determination
shall be
conclusive and binding, absent manifest error.
"Trust Receipt" means a trust receipt in a form approved
by and
pursuant to which the Lender may deliver any document relating
to the
Collateral to the Company for correction or completion.
"VA" means the U.S. Department of Veterans Affairs and any
successor
thereto.
"Warehousing Advances" shall mean a disbursement by the Lender
under
the Warehousing Commitment pursuant to Article 2 of this Agreement.
"Warehousing Advance Request" has the meaning set forth in
Section
2.2(a) hereof.
"Warehousing Collateral" means all of the Collateral other
than the
Receivables and the Servicing Collateral.
"Warehousing Commitment" has the meaning set forth in Section
2.1
hereof.
"Warehousing Commitment Amount" added in Third Amend pg 3.
"Warehousing Commitment Fee" means a fee payable by the
Company in
consideration of the Lender's issuance of the Warehousing Commitment.
The
amount of the Warehousing Commitment Fee is set forth in Section
2.12
hereof.
"Warehousing Fee" has the meaning set forth in Section 2.15
hereof.
"Warehousing Maturity Date" means the earlier of: (a) the
close of
business on December 31, 1995, as such date may be extended from
time to
time in writing by the Lender, in its sole discretion, and (b) the
date the
obligation of the Lender to make further Advances hereunder is
terminated
pursuant to Section 8.2 below.(1)
"Warehousing Promissory Note" means the promissory note
evidencing the
Company's Obligations with respect to Ordinary Warehousing Advances
in the
form of Exhibit A-1 attached hereto.
"Weighted Average Purchase Commitment Price" shall mean the
weighted
average of the Committed Purchase Prices of the unfilled
Purchase
Commitments (expressed as a percentage) for Mortgage
Loans or
Mortgage-backed Securities of the same type, interest rate and term.
"Wet Settlement Advance" means a Warehousing Advance by the
Lender
pursuant to Section 2.2(b) of this Agreement, in respect of the
closing or
settlement of a Single-family Mortgage Loan, based upon delivery
to the
Lender of the Bailee Pledge Agreement, pending subsequent delivery
of the
Collateral Documents as provided in Exhibit D-SF.
"Working Capital Advance" means a disbursement by the Lender
under the
Working Capital Commitment pursuant to Article 2 of this Agreement.
"Working Capital Advance Request" has the meaning set forth in
Section
2.6(a) hereof.
"Working Capital Commitment" has the meaning set forth in
Section
2.5(a) hereof.
----------
(1) Replaced in Third Amendment (2/29/96) - Page 6.
"Working Capital Commitment Amount" added in Third Amend pg. 3.
"Working Capital Commitment Fee" means a fee payable by the
Company in
consideration of the Lender's issuance of the Commitment. The amount
of the
Working Capital Commitment Fee is set forth in Section 2.13 hereof.
"Working Capital Maturity Date" means the earlier of: (a) the
close of
business on December 31, as such date may be extended from time to
time in
writing by the Lender, in its sole discretion, and (b) the date
the
obligation of the Lender to make further Advances hereunder is
terminated
pursuant to Section 8.2 below.(1)
"Working Capital Promissory Note" means the promissory note
evidencing
the Company's Obligations with respect to Working Capital Advances
in the
form of Exhibit A-3 attached hereto.
1.2. Other Definitional Provisions.
1.2(a) Accounting terms not otherwise defined herein shall
have the
meanings given the terms under GAAP.
1.2(b) Defined terms may be used in the singular or the plural,
as the
context requires.
1.2(c) All references to time of day shall mean the then
applicable
time in Chicago, Illinois, unless expressly provided to the contrary.
2. THE CREDIT
2.1. The Warehousing Commitment.
2.1(a) Subject to the terms and conditions of this Agreement
and
provided no Default or Event of Default has occurred and is
continuing, the
Lender agrees, from time to time during the period from the date
hereof to
and including the Warehousing Maturity Date, to make Warehousing
Advances
to the Company, provided the total aggregate principal amount
outstanding
at any one time of all such Warehousing Advances shall not exceed
Ten
Million Dollars ($10,000,000). The obligation of the Lender to
make
Warehousing Advances hereunder up to such limit is hereinafter
referred as
the "Warehousing Commitment." Within the Warehousing Commitment,
the
Company may, subject to the limitation set forth in Section 2.9(d),
borrow,
repay and reborrow. All Warehousing Advances under this Agreement
shall
constitute a single indebtedness, and all of the Collateral
shall be
security for the Warehousing Promissory Note and for the payment
and
performance of all the Obligations.(2)
----------
(1) Replaced in Third Amendment (2/29/96) - Page 6.
(2) Replaced in Third Amendment 92/29/96) - Pages 6 & 7.
2.1(b) Warehousing Advances shall be used by the Company
solely for
the purpose of funding the acquisition or origination of Mortgage
Loans and
shall be made at the request of the Company, in the manner
hereinafter
provided in Section 2.2 hereof, against the pledge of such Mortgage
Loans
as Collateral therefor. The following limitations on the use of
Advances
shall be applicable:
(1) No Warehousing Advance shall be made against Mortgage
Loans
other than Single-family Mortgage Loans.
(2) Warehousing Advance shall be made against Mortgage
Loans
which are not covered by a Purchase Commitment, and no Home
Equity
Advance shall be made against Home Equity Loans which are not
eligible
for purchase under the Goal Line Commitment.(1)
(3) The aggregate amount of Wet Settlement Advances
outstanding
at any one time shall not exceed Three Million Five Hundred
Thousand
Dollars ($3,500,000).
(4) The aggregate amount of Nonconforming Advances
outstanding at
any one time shall not exceed Three Million Dollars ($3,000,000).
(5) The aggregate amount of Home Equity Advances and
Second
Mortgage Advances outstanding at any one time shall not exceed
Three
Million Dollars ($3,000,000).(2)
(6) No Warehousing Advance shall be made against any
Mortgage
Loan which was closed more than ninety (90) days prior to the
date of
the requested Advance.(3)
(7) and (8) Added in Third Amendment - Pg 7.
2.1(c) No Warehousing Advance shall exceed that following
amount
applicable to the type of Collateral at the time it is pledged:(4)
----------
(1) Replaced in Fifth Amendment (12/12/96) - Page 4.
(2) Replaced in Third Amendment (2/29/96) - Page 8.
(3) Replaced in Third Amendment (2/29/96) - Page 7.
(4) Replaced in Fifth Amendment (12/12/96) - Pg. 4-5.
(1) For a First Mortgage Loan pledged hereunder, other
than a
Nonconforming Mortgage Loan, ninety-nine percent (99%) of the
lesser
of (i) the Mortgage Note Amount, or (ii) the Weighted Average
Purchase
Commitment Price multiplied by the Mortgage Note Amount.
(2) For Nonconforming Mortgage Loan pledged
hereunder,
ninety-five percent (95%) of the lesser of (i) the Mortgage
Note
Amount, or (ii) Weighted Average Purchase Commitment Price
multiplied
by the Mortgage Note Amount.
(3) For a Home Equity Loan committed for purchase under a
Goal
Line Commitment pledged hereunder, one hundred percent (100%)
of the
lesser of (i) the Mortgage Note Amount, or (ii) the Weighted
Average
Purchase Commitment Price multiplied b Tithe Mortgage Note
Amount.
(4) For a Second Mortgage can pledged hereunder, other
than a
Home Equity Loan, ninety-eight percent (98%) of the lesser of
(i) the
Mortgage Note Amount, or (ii) the Weighted Average Purchase
Commitment
Price multiplied by the Mortgage Note Amount.
(5) Added in Third Amendment (2/24/96) - Pg 7 & 8.
2.2. Procedures for Obtaining Warehousing Advances.
2.2(a) The Company may obtain a Warehousing Advance hereunder,
subject
to the satisfaction of the conditions Earth in Sections 4.1 and 4.2
hereof,
upon compliance with the procedures set forth in this Section 2.2
and in
Exhibit D-SF attacked hereto and made a part hereof, including the
delivery
of all documents listed in Exhibit D-SF (the "Collateral Documents
") to
the Lender. Requests for Warehousing Advances shall be initiated
by the
Company by delivering to the Lender, no later than one (1)
Business Day
prior to any Business Day that the Company desires to borrow
hereunder, a
completed and signed request for a Warehousing Advance (a "Wares
sing
Advance Request") on the then current form approved by the Lender.
The
current form in use by the Lender is Exhibit C-SF, attached hereto and
made
a part hereof. The Lender shall have the right, on not less than
three (3)
Business Days' prior Notice to the Company, to modify any of said
Exhibits
to conform to current legal requirements or Lender practices, and,
as so
modified, said Exhibits shall be deemed a part hereof.(1)
----------
(1) Replaced in Third Amendment (2/29/96) - Page 8.
2.2(b) In the case of any Wet Settlement Advances, the Company
shall
follow the procedures and, at or prior to the Lender's making of
such Wet
Settlement Advance, shall deliver to the Lender the documents set
forth in
Exhibit D-SF hereto together with a completed and executed Bailee
Pledge
Agreement in the form of Exhibit M hereto. In the case of a Mortgage
Loan
financed through a Wet Settlement Advance, the Company shall
cause all
Collateral Documents to be delivered to Lender within five (5)
Business
Days after the day of the Wet Settlement Advance relating thereto.(1)
2.2(c) Before funding, the Lender shall have a reasonable time
(one
(1) Business Day under ordinary circumstances) to examine such
Advance
Request and the Collateral Documents to be delivered prior to
such
requested Advance, as set forth in the applicable Exhibit hereto,
and may
reject such of them as do not meet the requirements of this Agreement
or of
the related Purchase Commitment.
2.2(d) The Company shall hold in trust for the Lender, and the
Company
shall deliver to the Lender promptly upon request, or within one
hundred
twenty (120) days from the date an Advance was made against such
Pledged
Mortgage and the Pledged Mortgage is not being held by an Investor
for
purchase or has not been redeemed from pledge, the following:
(1) the
originals of the Collateral Documents for which copies are required
to be
delivered to the Lender pursuant to Exhibit D-SF,24 (2) the
original
lender's ALTA Policy of Title Insurance or an equivalent thereto,
and (3)
any other documents relating to a Pledged Mortgage which the
Lender may
request, including, without limitation, documentation evidencing
the FHA
Commitment to Insure or the VA Guaranty of any Pledged Mortgage
which is
either FHA insured or VA guaranteed, the appraisal, Private
Mortgage
Insurance Certificate, if applicable, the Regulation Z
Statement,
certificates of casualty or hazard insurance, credit information
on the
maker of each such Mortgage Note, a copy of a HUD-1 or
corresponding
purchase advice and other documents of all kinds which are
customarily
desired for inspection or transfer incidental to the purchase
of any
Mortgage Note by an Investor and any additional documents which
are
customarily executed by the seller of a Mortgage Note to an Investor.
2.2(e) To make a Warehousing Advance, the Lender shall
cause the
Funding Bank to credit an account of the Company with the Funding
Bank,
which account shall be under the exclusive control of the Lender,
upon
compliance by the Company with the terms this Agreement.(2)
2.2(f) If, pursuant to the authorization given by the Company
in the
Funding Bank Agreement, for the purpose of financing a Mortgage
Loan
against which the Lender has made a Warehousing Advance in accordance
with
a Warehousing Advance Request (i) the Lender debits the Company's
Operating
Account at the Funding Bank to the extent necessary to cover a wire
to be
initiated by the Lender, or (ii) the Lender directs the Funding
Bank to
honor a check drawn by the Company on its Check Disbursement Account
at the
Funding Bank, and such debit or direction results in an overdraft,
the
Lender may make an additional Warehousing Advance to fund such
overdraft.
----------
(1) See Insert in Third Amendment (2/29/96) - Page 9.
(2) Replaced in Third Amendment (2/29/96) - Page 9.
2.3. The Term Loan Commitment.
2.3(a) Subject to the terms and conditions of this Agreement
and
provided no Default or Event of Default has occurred and is
continuing, the
Lender agrees, from time to time during the period from the date
hereof to
and including the Term Loan Commitment Termination Date, to make Term
Loan
Advances to the Company, provided the total aggregate principal
amount
outstanding at any one time of all Term Loan Advances shall not
exceed One
Million Dollars ($1,000,000). The obligation of the Lender to make
Term
Loan Advances hereunder up to such limit is hereafter referred to
as the
"Term Loan Commitment." Within the Term Loan Commitment, the
Company may
borrower, repay and reborrow. All Term Loan Advances under this
Agreement
shall constitute a single indebtedness, and all of the Collateral
shall be
security for the Term Loan Promissory Note and for the payment
and
performance of all others Obligations.(1)
2.3(b) Term Loan Advances shall be used by the Company solely
for the
purposes of (i) in the case of the initial Term Loan Advance,
refinancing
an existing Term Loan to the Company from Coastal Banc Savings
Association,
and (ii) in the case of Subsequent Term Loan Advances, financing
Servicing
Acquisitions. Term Loan Advances shall be made at the request
of the
Company, in the manner hereinafter provided in Section 2.4(a)
hereof. The
following limitations on the Term Loan Advances shall be applicable:
(1) No Term Loan Advance shall be made if, after giving
effect
thereto, the aggregate outstanding principal balance of all Term
Loan
Advances and all Working Capital Advances would exceed the
Servicing
Collateral Value as of the date of such Term Loan Advance.
2.4. Procedures for Obtaining Term Loan Advances.
2.4(a) The Company may obtain a Term Loan Advance hereunder,
subject
to the satisfaction of the conditions set forth in Sections 4.1
and 4.2
hereof, upon compliance with the procedures set forth in this
Section 2.4
and in Exhibit D-TL attached hereto. Requests for Term Loan Advances
shall
be initiated by the Company delivering to the Lender, no later than
five
(5) Business Days prior to the Business Day on which the Company
desires to
borrow a Term Loan Advance hereunder (except in the case of the
initial
Term Loan Advance, which may be made on one (1) Business Day's
notice), (1)
a completed and signed request for a Term Loan Advance (a "Term
Loan
Advance Request n ) on the then current form approved by Lender.
The
current form in use by Lender is Exhibit C-TL attached hereto and
made a
part hereof. The Lender shall have the right, on not less than
three (3)
Business Days' prior Notice to the Company, to modify any of said
Exhibits
to conform to current legal requirements or Lender practices and,
as so
modified, said Exhibits shall be deemed a part hereof.
2.4(b) The Company shall deliver the following to the Lender
prior to
the date of such Term Loan Advance:
(1) (A) except in the case of the initial Term Loan Advance,
such
information with respect to such Servicing Contracts being
acquired in
the Servicing Acquisition to be financed and the Mortgage
Loans
serviced pursuant thereto as the Lender may reasonably request,
(B) if
required by the Lender, an Appraisal with respect to the
Servicing
Contracts to be acquired in such Servicing Acquisition and
(C)
evidence satisfactory to the Lender that FMMA and FHLMC has
each
entered into an Acknowledgment Agreement with respect to all
Servicing
Contracts to which it is a party and that GMMA has received
such
notice of the Lenders security interest in such Servicing
Contracts to
which it is a party as may be required thereunder or to perfect
such
security interest;
(2) a certificate of the president or chief financial
officer of
the Company, certifying that all representations and
warranties set
forth in Section 5 hereof, including, without limitation,
Section 5.4
hereof, are true and correct as though made on and as of the
date of
such Term Loan Advance; and
(3) in the case of the initial Term Loan Advance, a
letter of
direction from the Company directing the Lender to disburse
the
proceeds of such Term Loan Advance directly to Coastal Banc
Savings
Association, and evidence satisfactory to the Lender that such
Term
Loan Advance will be sufficient to pay the existing Coastal
Banc
Savings Association Term Loan in full and to cause Coastal
Banc
Savings Association to release its Lien on the Company's
Servicing
Contracts and related collateral, and (B) a letter of direction
from
the Company directing the Lender to disburse the proceeds of such
Term
Loan Advance directly to the seller(s) in the Servicing
Acquisition to
be financed and evidence satisfactory to the Lender that such
Term
Loan Advance, together with any other funds disbursed with
such
Advance to such seller(s), will be sufficient to effect the
transfer
to the Company of the Servicing Contracts to be acquired in
such
Servicing Acquisition, free and clear of all Liens (other
than the
Lender's security interest).
2.4(c) To make a Term Loan Advance, the Lender shall disburse
the
amount thereof in accordance with the letter of direction
delivered
pursuant to Section 2.4(b)(3) upon compliance by the Company
with the
terms. Of this Agreement.
----------
(1) Replaced in Third Amendment 92/29/96) - Page 9.
2.5. The Working Capital Commitment.
2.5(a) Subject to the terms and conditions of this Agreement
and
provided no Default or Event of Default has occurred and is
continuing, the
Lender agrees, from time to time during the period from the date
hereof to
and including the Working Capital Maturity Date, to make Working
Capital
Advances to the Company, provided the total aggregate principal
amount
outstanding at any one time of all such Advances shall not exceed
One
Million Dollars $1,000,000). The obligation of the Lender to make
Working
Capital Advances hereunder up to such limit, is hereinafter referred
to as
the "Working Capital Commitment". Within the Working Capital
Commitment,
the Company may borrow, repay and reborrow. All Working Capital
Advances
under this Agreement shall constitute a single indebtedness, and all
of the
Collateral shall be security for the Working Capital Promissory
Note and
for the payment and performance of all other Obligations.(1)
2.5(b) Working Capital Advances shall be used by the Company
solely
for the purpose of funding working capital needs of the Company,
including,
but not limited to, financing costs and expenses of
foreclosures of
Mortgage Loans serviced by the Company, funding regularly
scheduled
pass-through payments on Mortgage-backed Securities for which the
Company
has a Net Aggregate P&I Shortfall and financing of premium points
on "no
cost n refinances of Mortgage Loans. Working Capital Advances shall be
made
at the request of the Company, in the manner hereinafter
provided in
Section 2.6 hereof. The following limitations on the Working
Capital
Advances shall be applicable:
(1) No Working Capital Advance shall be made if, after
giving
effect thereto, the outstanding principal balance of all
Working
Capital Advances and all Term Loan Advances would exceed the
Servicing
Collateral Value as of the date of such Working Capital Advance.
2.6 Procedures for Obtaining Working Capital Advances.
2.6(a) The Company may obtain a Working Capital Advance
hereunder,
subject to the satisfaction of the conditions set forth in Sections
4.1 and
4.2 hereof, upon compliance with the procedures set forth in this
Section
2.6. Requests for Working Capital Advances shall be initiated
by the
Company delivering to the Lender, no later than two (2) Business Days
prior
to the Business Day on which the Company desires to borrow a
Working
Capital Advance hereunder, a completed and signed request for a
Working
Capital Advance (a "Working Capital Advance Request") on the then-
current
form approved by Lender. The current form in use by Lender is Exhibit
C-WC
attached hereto and made a part hereof. The Lender shall have the
right, on
not less than three (3) Business Days' prior Notice to the
Company, to
modify such Exhibit to conform to current legal requirements or
Lender
practices and, as so modified, said Exhibit shall be deemed a part
herof.
2.6(b) Before funding a Working Capital Advance, the Lender shall
have
a reasonable time (two (2) Business Days under ordinary
circumstances) to
examine such Working Capital Advance Request and the documents
to be
delivered prior to such requested Working Capital Advance, as set
forth in
the applicable Exhibit hereto, and may reject such of them as
are not
satisfactory to the Lender.
2.6(c) To make a Working Capital Advance, the Lender shall
cause the
Funding Bank to credit the Company's account with the Funding Bank
upon
compliance by the Company with the terms of this Agreement.
----------
(1) Replaced in Third Amendment (2/29/96) - Page 10
2.7. Notes. The Company's Obligations in respect of Ordinary
Warehousing
Warehousing Advances shall be evidenced by a Promissory Note of the
Company
substantially in the form of Exhibit A-1 attached hereto. The
Company's
Obligations in respect of Home Equity Advances, Second Mortgage
Advances and
Nonconforming Advances shall be evidenced by a Sublimit Promissory Note
of the
Company substantially in the form of Exhibit A-2 attached hereto. The
Company's
Obligations in respect of Working Capital Advances shall be evidenced
by a
Working Capital Promissory Note of the Company substantially in the
form of
Exhibit A-3 attached hereto. The Company's Obligations in respect of Term
Loan
Advances shall be evidenced by a Term Loan Promissory Note of the
Company
substantially in the forum of Exhibit A-4 attached hereto. Each note
shall be
dated as of the date hereof. The Warehousing Promissory Note, the
Sublimit
Promissory Note, the Working Capital Promissory Note and the Term
Loan
Promissory Note are collectively referred to as the "Notes". The
terms
"Warehousing Promissory Note," "Sublimit Promissory Note," "Working
Capital
Promissory Note," "Term Loan Promissory Note," "Note" or "Notes" shall
include
all extensions, renewals and modifications of the Notes and all
substitutions
therefor. All terms and provisions of the Notes are hereby
incorporated
herein.(1)
2.8. Interest.
2.8(a) Prior to the occurrence of an Event of Default and
acceleration
of the Obligations, the unpaid amount of each Ordinary Warehousing
Advance,
Home Equity Advance or Second Mortgage Advance shall bear interest,
from
the date of such Advance until paid in full, at the Ordinary
Warehousing
Rate.
2.8(b) Prior to the occurrence of an Event of Default and
acceleration
of the Obligations, the unpaid amount of each Nonconforming Advance
shall
bear interest, from the date of such Nonconforming Advance until
paid in
full, at the Nonconforming Rate.
2.8(c) Prior to the occurrence of an Event of Default and
acceleration
of the Obligations, the unpaid amount of each Working Capital
Advance and
each Term Loan Advance shall bear interest, from the date of such
Advance,
until paid in full, at the Term/Working Capital
2.8(d) New section added in Third Amendment (2/29/96) - Page 10.
----------
(1) Replaced in Third Amendment (2/29/96) - Page 10.
2.8(e) The Company shall be entitled to receive outstanding
Advances
hereunder, based once average daily aggregate Investable Balances
of the
Company maintained at a Designated Bank. The reduction shall be
determined
by the Lender each month, by applying an earnings credit to the
prior
month's Investable Balances. The earnings credit used by the
Lender to
compute the reduction shall be determined by the Lender in its
sole
discretion and in any event, the reduction shall not exceed the
Depository
Benefit.(1)
2.8(f) Interest shall be computed on the basis of a 360-day
year and
applied to the actual number of days elapsed in each interest
calculation
period and shall be payable monthly in arrears, on the first day of
each
month, commencing with the first month following the date of
this
Agreement, and on the applicable Maturity Date.(1)
2.8(g) If, for any reason, no interest is due on an Advance,
the
Company agrees to pay to the Lender an administrative fee equal to
one day
of interest on such Advance at the applicable rate of interest as in
effect
on the date of such Advance. Administrative and other fees shall be
due and
payable in the same manner as interest is due and payable
hereunder.(2)
2.8(h) Upon and after the occurrence and during the continuation
of an
Event of Default hereunder, the unpaid amount of each Advance shall
bear
interest, until paid in full, at a rate of interest (the "Default
Rate")
equal to four percent (4%) per annum over the applicable rate
provided in
Sections 2.4(a), 2.4(b) or 2.4(c) hereof or, if no rated is
applicable, the
highest rate then applicable to any outstanding Advance pursuant to
such
Sections.(3)
----------
(1) Sections Renumbered per Third Amendment (2/29/96) - Page 10.
(2) Renumbered section replaced in Third Amendment (2/29/96) - Pages 11 &
12.
(3) Replaced in Fifth Amendment (12/12/96) - Page 5.
2.9. Principal Payments.
2.9(a) The outstanding principal amount of all Warehousing
Advances
shall be payable in full on the Warehousing Maturity Date.
2.9(b) The outstanding principal amount of the Term Loan
Advances as
of the Term Loan Commitment Termination Date shall be
payable in
forty-eight (48) equal monthly installments, due on the first day of
each
month beginning on the first day of April, 1996. The remaining
principal
balance of the Term Loan Advances shall be payable on the Term
Loan
Maturity Date.(1)
2.9(c) The outstanding principal amount of all Working
Capital
Advances shall be payable in full on the Working Capital Maturity
Date.
2.9(d) The Company shall have the right to prepay the
outstanding
Advances in whole or in part, from time to time, without
premium or
penalty; provided, that no voluntary prepayment of Warehousing
Advances may
be made in an amount less than Five Hundred Thousand Dollars
($500,000).
2.9(e) All payments of outstanding Warehousing Advances
from the
proceeds of the sale or other disposition of Pledged Mortgages and
Pledged
Securities shall be paid directly by the Investor to the Cash
Collateral
Account to be applied against the Obligations.
2.9(f) The Company shall be obligated to pay to the Lender,
without
the necessity of prior demand or notice from the Lender, and the
Company
authorizes the Lender to cause the Funding Bank to charge the
Company's
account for, the amount of any outstanding Advance against a
specific
Pledged Mortgage, upon the earliest occurrence of any of the
following
events:
(1) One hundred twenty (120) days elapse from the date
of the
initial Warehousing Advance made by the Lender against such
Pledged
Mortgage, whether or not such Pledged Mortgage is included
in an
Eligible Mortgage Pool.
(2) Forty-five (45) days elapse from the date the
Pledged
Mortgage was delivered to an Investor for examination and
purchase,
without the purchase being made, or upon rejection of the
Pledged
Mortgage as unsatisfactory by an Investor.
(3) One (1) Business Day elapses from the date a wet
Settlement
Advance was made and the Pledged Mortgage which was to have
been
funded by such Wet Settlement Advance is not closed and funded.
(4) Seven (7) Business Days elapse from the date a Wet
Settlement
Advance was made without receipt by the Lender of all
Collateral
Documents relating to such Pledged Mortgage, or such
Collateral
Documents, upon examination by the Lender, are found not to
be in
compliance with the requirements of this Agreement or the
related
Purchase Commitment.(2)
----------
(1) Replaced in Third Amendment (2/29/96) - Page 12.
(2) Replaced in Third Amendment (2/29/96) - Page 12 & 13.
(5) Ten (10) Business Days elapse from the date a
Collateral
Document was delivered to the Company for correction or
completion
under a Trust Receipt, without being returned to the Lender.
(6) The Mortgage Loan is defaulted and remains in default
for a
period of thirty (30) days or more.(1)
(7) If the outstanding Advances against Pledged Mortgages
of a
specific Mortgage Loan type exceed the aggregate Purchase
Commitments
for such Mortgage Loan type.
(8) Payment of any Lien prior to a Second Mortgage
Loan is
delinquent, and remains delinquent for a period of sixty (60)
days or
more.
(9) Three (3) Business Days after the mandatory delivery
date of
the related Purchase Commitment and the specific Pledged
Mortgage was
not delivered under the Purchase Commitment prior to such
mandatory
delivery date, or the Purchase Commitment is terminated;
unless in
each case, such Pledged Mortgage is eligible for delivery
to an
Investor under a comparable Purchase Commitment acceptable
to the
Lender.
(10) Upon sale or other disposition of the Pledged Mortgage.
(11) If the Pledged Mortgage is included in a Mortgage
Pool,
then, if the Mortgage Pool is an Eligible Mortgage Pool, upon
sale of
the Mortgage-backed Security, or if the Mortgage Pool is
not an
Eligible Mortgage Pool, within two (2) Business Days after
delivery of
the Pledged Mortgages to the pool custodian.
2.9(f)(12) New section added in Third Amendmeent (2/29/96) -
Page 13.(2)
2.9(g) The outstanding amount of any Advance made pursuant to
Section
2.2(f) shall be payable in full within one (1) Business Day after the
date
of such Advance.
2.9(h) In addition to the payments required pursuant to
Section
2.9(f), the Company shall be obligated to pay to the Lender,
without the
necessity of prior demand or notice from the Lender, and the
Company
authorizes the Lender to cause the Funding Bank to charge the
Company's
account for, the following amounts in respect of outstanding
Advances in
the following circumstance:
(1) If at any time the aggregate outstanding principal
balance of
all Term Loan Advances and all Working Capital Advances
exceeds the
Servicing Portfolio Collateral Value, the Company shall prepay
either
the outstanding Term Loan Advances or the outstanding Working
Capital
Advances in the amount of such excess.
(2) If the principal amount of any Pledged Mortgage is
repaid in
whole or in part while a Warehousing Advance is outstanding
against
such Pledged Mortgage, the amount of such repayment, to be
applied to
such Advance.
(3) New section added in Third Amendment (2/24/96) - Page
14.
2.9(i) For a period of not less than five (5) consecutive days in
each
Calendar Quarter (provided, that no such five (5)-day period shall
begin
fewer than thirty-one (31) days after the end of the five (5)-day
period
for the preceding Calendar Quarter), there shall be no Working
Capital
Advances outstanding, and the Company shall make such prepayments
of the
Working Capital Advances, and shall refrain from requesting Working
Capital
Advances, as necessary to comply with the foregoing requirement.
2.9(j) All amounts prepaid on the Term Loan Advances after the
Term
Loan Commitment Termination Date shall be applied to the
installments
required pursuant to Section 2.9(b) in the inverse order of
their
maturities. Amounts paid or prepaid on the Term Loan Advances
after the
Term Loan Commitment Termination Date may not be reborrowed hereunder.
2.9(k) The Company shall give Notice to the Lender
(telephonically, to
be followed by written notice) of the Pledged Mortgages or
Pledged
Securities for which proceeds have been received. Upon receipt of
such
Notice the Advances against such Pledged Mortgages or Pledged
Securities
shall be repaid and such Pledged Mortgages or Pledged Securities
shall be
considered to have been redeemed from pledge. The Lender is
entitled to
rely upon the Company `e affirmation that deposits in the Cash
Collateral
Account represent payment from Investors for the purchase of
Pledged
Mortgages or Pledged Securities as specified by the Company. In the
event
that the payment from an Investor for the purchase of Pledged
Mortgages or
Pledged Securities is less than the outstanding Advances against
such
Pledged Mortgages or the Mortgage Loans backing Pledged Securities,
the
Lender is authorized to cause the Funding Bank to charge the
Company's
account for an amount equal to such deficiency. Provided no
Default or
Event of Default exists, the Lender shall return any excess payment
from an
Investor for Pledged Mortgages or Pledged Securities to the Company.
2.10. Expiration of Commitments. Unless extended or terminated
earlier as
permitted hereunder, the Warehousing Commitment shall expire of its own
term,
and without the necessity of action by the Lender, at the close of
business on
the Warehousing Maturity Date, the Term Loan Commitment shall expire of
its own
term, and without the necessity of action by the Lender, at the
close of
business on the Term Loan Commitment Termination Date and the Working
Capital
Commitment shall expire of its own term, and without the necessity of
action by
the Lender, at the close of business on the Working Capital Maturity Date.
----------
(1) Replaced in Third Amendment (2/29/96) - Page 13.
(2) Section 2.9(f)(14) added in Fifth Amendment (12/12/96) - Page 5.
2.11. Method of Making Payments. Except as otherwise specifically
provided
herein, all payments hereunder shall be made to the Lender not later
than the
close of Business on the date when due unless such date is a non-Business
Day,
in which case, such payment shall be due on the first Business Day
thereafter,
and shall be made in lawful money of the United States of America in
immediately
available funds transferred via wire to accounts designated by the Lender
from
time to time.(1)
2.12. Warehousing Commitment Fee. The Company agrees to pay to the
Lender a
Warehousing Commitment Fee in the amount of one-quarter percent (1/4%) per
annum
of the amount of the Warehousing Commitment which Warehousing Commitment
Fee may
be paid quarterly in advance and shall be computed on the basis of a
365-day
year and applied to the actual number of days elapsed in such Calendar
Quarter.
On the Closing Date, the Company shall pay the prorated portion of the
quarterly
Warehousing Commitment Fee due arch the dare of acceptance of the
Warehousing
Commitment to the last day of the current Calendar Quarter. Thereafter,
the
Company shall make quarterly payments of the Warehousing Commitment Fee
on the
first (1st) day of each Calendar Quarter. If the Warehousing Maturity
Date is
other than the last day of a Calendar Quarter, the Company shall
pay the
prorated portion of the quarterly Warehousing Commitment Fee due
from the
beginning of the then current Calendar Quarter to and including the
Warehousing
Maturity Date. The Company shall not be entitled to a reduction in the
amount of
the Warehousing Commitment Fee, in the event the amount of the
Warehousing
Commitment is reduced or in the event that the Warehousing
Commitment is
terminated prior to the Warehousing Maturity Date. If the Warehousing
Commitment
terminates prior to the Warehousing Maturity Date, the unpaid balance
of the
Warehousing Commitment Fee shall be due and payable in full on the date of
such
termination.
2.13. Working Capital Commitment Fee. The Company agrees to pay
to the
Lender a Working Capital Commitment Fee in the amount of one-fifth
percent
(1/5%) per annum of the amount of the Working Capital Commitment which
Working
Capital Commitment Fee may be paid quarterly in advance and shall be
computed on
the basis of a 365-day year and applied to the actual number of days
elapsed in
such Calendar Quarter. On the Closing Date, the Company shall pay the
prorated
portion of the quarterly Working Capital Commitment Fee due from the
Closing
Date to the last day of the current Calendar Quarter. Thereafter, the
Company
shall make quarterly payments of the Working Capital Commitment Fee on the
first
(1st) day of each Calendar Quarter. If the Working Capital Maturity
Date is
other than the last day of a Calendar Quarter, the Company shall
pay the
prorated portion of the quarterly Working Capital Commitment Fee due
from the
beginning of the then current Calendar Quarter to and including the
Working
Capital Maturity Date. The Company shall not be entitled to a reduction
in the
amount of the Working Capital Commitment Fee in the event the amount
of the
Working Capital Commitment is reduced or in the event that the Working
Capital
Commitment is terminated prior to its stated expiration date. If the
Working
Capital Commitment terminates prior to the Working Capital Maturity
Date, the
unpaid balance of the Working Capital Commitment Fee shall be due and
payable in
full on the date of such termination.
2.14. Term Loan Commitment Fee. The Company agrees to pay to the
Lender a
Term Loan Commitment Fee in the amount of one-fifth percent (1/5%) per
annum of
the amount of the Term Loan Commitment, which Term Loan Commitment Fee
may be
paid quarterly in advance and shall be computed on the basis of a 365-day
year
and applied to the actual number of days elapsed in such Calendar
Quarter. On
the Closing Date, the Company shall pay the prorated portion of the
quarterly
Term Loan Commitment Fee due from the Closing Date to the last day
of the
current Calendar Quarter. Thereafter, the Company shall make quarterly
payments
of the Term Loan Commitment Fee on the first (1st) day of each Calendar
Quarter.
If the Term Loan Commitment Termination Date is other than the last day
of a
Calendar Quarter, the Company shall pay the prorated portion of the
quarterly
Term Loan Commitment Fee due from the beginning of the then current
Calendar
Quarter to and including the Term Loan Commitment Termination Date. The
Company
shall not be entitled to a reduction in the amount of the Term Loan
Commitment
Fee, in the event the amount of the Term Loan Commitment is reduced or
in the
event that the Term Loan Commitment is terminated prior to its stated
expiration
date. If the Term Loan Commitment terminates prior to the Term Loan
Commitment
Termination Date, the unpaid balance of the Term Loan Commitment Fee
shall be
due and payable in full on the date of such termination.
2.15. Warehousing Fees. The Company agrees, at the time of each
Advance, to
pay to the Lender a Warehousing Fee in the amount of Twelve and 50/100
Dollars
($12.50) for each Mortgage Loan pledged as Collateral for such
Advance.
Warehousing Fees are due when incurred, but shall not be delinquent if
paid
within fifteen (15) days after receipt of an invoice or an account
analysis
statement from the Lender.
----------
(1) Replaced in Third Amendment (2/29/96) - Page 14.
2.16. Miscellaneous Charges. The Company agrees to reimburse the
Lender for
miscellaneous charges and expenses incurred by or on behalf of the
Lender in
connection with the handling and administration of Advances, and to
reimburse
the Lender for miscellaneous charges and expenses incurred by or on
behalf of
the Lender in connection with the handling and administration of the
Collateral.
For the purposes hereof, miscellaneous charges and expenses shall
include, but
not be limited to, charges for wire transfers, charges for security
delivery
fees, changes for overnight delivery of Collateral to Investors, and the
Funding
Bank's service charges. Miscellaneous charges are due when incurred, but
shall
not be delinquent if paid within fifteen (15) days after receipt of an
invoice
or an account analysis statement from the Lender.(1)
2.17. Interest Limitation. All agreements between the Company
and the
Lender are hereby expressly limited so that in no contingency or
event
whatsoever, whether by reason of acceleration of maturity of this
Agreement or
the Notes or otherwise, shall the amount paid or agreed to be paid to the
Lender
for the use, forbearance, loaning or- retention of the Advances secured by
this
Agreement exceed the maximum permissible under applicable law. If
from any
circumstances whatsoever, fulfillment of any provisions hereof or of the
Notes,
or any other document securing this Agreement at any time given shall
involve
transcending the limit of validity prescribed by law, then, the obligation
to be
fulfilled shall automatically be reduced to the limit of such validity,
and if
from any circumstances the Lender should ever receive as interest an
amount
which would exceed the highest lawful rate of interest, such amount which
would
be in excess of interest shall be applied to the reduction of the
principal
balance secured by the Notes and not to the payment of interest thereunder.
This
provision shall control every other provision of all agreements
between the
Company and Lender and shall also be binding upon and available
to any
subsequent holder of the Notes.
2.18. Increased Costs: Capital Requirements. In the event any
applicable
law, order, regulation or directive issued by any governmental or
monetary
authority, or any change therein or in the governmental or
judicial
interpretation or application thereof, or compliance by the Lender
with any
request or directive (whether or not having the force of law) by
any
governmental or monetary authority:
2.18(a) Does or shall subject the Lender to any tax of any
kind
whatsoever with respect to this Agreement or any Advances made
hereunder,
or change the basis of taxation on payments to the Lender of
principal,
fees, interest or any other amount payable hereunder (except for
change in
the rate of tax on the overall gross or net income of the Lender
by the
jurisdictions in which the Lender's principal office is located);
2.18(b) Does or shall impose, modify or hold applicable any
reserve,
capital requirement, special deposit, compulsory loan or
similar
requirement against assets held by, or deposits or other liabilities
in or
for the account of, advances or loans by, or other credit extended
by, or
any other acquisition of funds by, any office of the Lender which
are not
otherwise included in the determination of the interest rate as
calculated
hereunder;
and the result of any of the foregoing is to increase the cost to the
Lender of
making, renewing or maintaining any Advance or to reduce any amount
receivable
in respect thereof or to reduce the rate of return on the capital of the
Lender
or any Person controlling the Lender as it relates to credit facilities
in the
nature of that evidenced by this Agreement, then, in any such case, the
Company
shall promptly pay any additional amounts necessary to compensate the
Lender for
such additional cost or reduced amounts receivable or reduced rate of
return as
determined by the Lender with respect to this Agreement or Advances
made
hereunder. If the Lender becomes entitled to claim any additional
amounts
pursuant to this Section, it shall notify the Company of the event by
reason of
which it has become so entitled and the Company shall pay such amount
within
fifteen (15) days thereafter. A certificate as to any additional amount
payable
pursuant to the foregoing sentence containing the calculation
thereof in
reasonable detail submitted by the Lender to the Company shall be
conclusive in
the absence of manifest error. The obligations of the Company under this
Section
shall survive the payment of all other Obligations and the termination of
this
Agreement.
----------
(1) Replaced in Third Amendment (2/29/96) - Pages 14 & 15.
3. COLLATERAL.
3.1. Grant of Security Interest. As security for the payment of the
Notes
and for the performance of all of the Company's Obligations, the Company
hereby
assigns and transfers to the Lender all right, title and interest in and
to and
grants a security interest to the Lender in the following described
property
(the "Collateral"):
3.1(a) All Mortgage Loans, including all Mortgage Notes and
Mortgages
evidencing such Mortgage Loans, which from time to time are
delivered or
caused to be delivered to the Lender (including delivery to a third
party
on behalf of the Lender), come into the possession, custody or
control of
the Lender for the purpose of assignment or pledge or in respect of
which
an Advance has been made by the Lender hereunder, including
without
limitation all Mortgage Loans in respect of which Wet Settlement
Advances
have been made by the Lender (the "Pledged Mortgages").
3.1(b) All Mortgage-backed Securities which are from time to
time
created in whole or in part on the basis of the Pledged Mortgages
or are
delivered or caused to be delivered to, or are otherwise in the
possession
of the Lender its agent, bailee or custodian as assignee, or pledged
to the
Lender, or for such purpose are registered by book-entry in the name
of the
Lender (including delivery to or registration in the name of a third
party
on behalf of the Lender) hereunder or in respect of which from time to
time
an Advance has been made by the Lender hereunder (the
"Pledged
Securities").
3.1(c) All private mortgage insurance and all commitments
issued by
the FHA or VA to insure or guarantee any Mortgage Loans included
in the
Pledged Mortgages; all Purchase Commitments held by the Company
covering
the Pledged Mortgages or the Pledged Securities and all proceeds
resulting
from the sale thereof to Investors pursuant thereto; and all
personal
property, contract rights, servicing and servicing fees and income or
other
proceeds, amounts and payments payable to the Company as
compensation or
reimbursement, accounts and general intangibles of whatsoever kind
relating
to the Pledged Mortgages, the Pledged Securities, said FHA
commitments or
VA commitments and the Purchase Commitments, and all other
documents or
instruments relating to the Pledged Mortgages and the Pledged
Securities,
including, without limitation, any interest of the Company in any
fire,
casualty or hazard insurance policies and any awards made by any
public
body or decreed by any court of competent jurisdiction for a taking
or for
degradation of value in any eminent domain proceeding as the same
relate to
the Pledged Mortgages.
3.1(d) All Servicing Contracts now owned or hereafter
created or
acquired by the Company; provided, however, that such assignment
and
security interest with respect to any pledged Servicing Contracts with
FNMA
or FHLMC shall not take effect until the date on which an
Acknowledgment
Agreement covering such Servicing Contracts has been executed and
delivered
by the Company, the Lender and FMMA or FHLMC, as appropriate.
3.1(e) All rights of the Company to receive payments under
or by
virtue of the Servicing Contracts described in Section 3.1(d)
(without
giving effect to the proviso at the end thereof) and the
Acknowledgment
Agreements, whether as servicing fees, servicing income, damages,
amounts
payable upon the cancellation or termination of any such
Servicing
Contract, interests on the foregoing, or otherwise.
3.1(f) Any agreement pursuant to which any Servicing
Contract
described in Section 3.1(d) (without giving effect to the proviso
at the
end thereof) was acquired or is sold by the Company, and all
documents and
instruments executed or delivered in connection with any such
acquisition
or sale.
3.1(g) All accounts or general intangibles owned by the
Company
("Receivables") for the payment of money against (i) VA under a VA
guaranty
of, FHA or a private mortgage insurer under an FHA or private
insurer's
mortgage insurance policy insuring payment of, or any other Person
under
any other agreement (including a Servicing Contract) relating to,
all or
part of a defaulted Mortgage Loan repurchased by the Company
from an
investor or out of a pool of Mortgage Loans serviced by the Company,
(ii)
obligers and their accounts, FNMA, FHLMC, GNMA or any other investor
under
a Servicing Contract covering, or out of the proceeds of any sale
of or
foreclosure sale in respect of, any Mortgage Loan (A) repurchased
by the
Company out of a pool of Mortgage Loans serviced by the Company,
or (B)
being serviced by the Company, in either case, for the
reimbursement of
real estate taxes or assessments, or casualty or liability
insurance
premiums, paid by the Company in connection with Mortgage Loans, and
(iii)
obligers and their accounts, or FMMA, FHLMC, GNMA or any other
investor
under or in respect of any Mortgage Loans serviced by the Company
for
repayment of advances made by the Company to cover shortages in
principal
and interest payments.
3.l(h) All right, title and interest of the Company in and
to all
escrow accounts, documents, instruments, files, surveys,
certificates,
correspondence, appraisals, computer programs, tapes, discs,
cards,
accounting records (including all information, records, tapes,
data,
programs, discs and cards necessary or helpful in the
administration or
servicing of the Collateral) and other information and data of the
Company
relating to the Collateral.
3.1(i) All now existing or hereafter acquired cash delivered
to or
otherwise in the possession of the Lender or its agent, bailee or
custodian
or designated on the books and records of the Company as assigned
and
pledged to the Lender.
3.1(j) All cash and non-cash proceeds of the Collateral,
including all
dividends, distributions and other rights in connection with,
and all
additions to, modifications of and replacements for, the Collateral,
and
all products and proceeds of the Collateral, together with
whatever is
receivable or received when the Collateral or proceeds thereof are
sold,
collected, exchanged or otherwise disposed of, whether such
disposition is
voluntary or involuntary, including, without limitation, all
rights to
payment with respect to any cause of action affecting or relating
to the
Collateral or proceeds thereof.
The grant of the security interest under Sections 3.3(d) and 3.3(e)
above is
junior and subordinate to the rights of FNMA and FHLMC in and to amounts
payable
to FNMA and FHLMC under and with respect to said Servicing Contracts to
which
FNMA or FHLMC is a party and related agreements.
3.2. Release of Security Interest in Collateral.
3.2(a) Pledged Mortgages shall be released from the Lender's
security
interest only against payment to the Lender of the Release
Amount in
connection with such Pledged Mortgages.
3.2(b) If Pledged Mortgages are to be transferred to a pool
custodian
or to PHLMC or FMMA for inclusion in a Mortgage Pool, the Lender's
security
interest in such Pledged Mortgages shall be released only against
payment
to the Lender of the Release Amount in connection with such
Pledged
Mortgages. If the Lender's security interest in the Pledged
Mortgages
comprising the Mortgage Pool is not released prior to the issuance
of the
Mortgage-backed Security, then the Mortgage-backed Security, when
issued,
shall be a Pledged Security. The Lenders security interest shall
continue
in such Pledged Mortgages and the Pledged Security. The Lender
shall be
entitled to possession of such Pledged Security in the manner
provided
below.
3.2(c) If Pledged Mortgages are to be transferred to an
Approved
Custodian and are included in an Eligible Mortgage Pool, the
Lender's
security interest in the Pledged Mortgages comprising the Eligible
Mortgage
Pool shall be released upon the issuance of the Pledged Security.
The
Lender's security interest in such Pledged Security shall be released
only
against payment to the Lender of the Release Amount in connection
with the
Pledged Mortgages backing such Pledged Security. The Lender-
shall be
entitled to possession of such Pledged Security in the manner
provided
below.(1)
----------
(1) Replaced in Third Amendment (2/29/96) - Page 15.
3.2(d) The Lender shall have the exclusive right to the
possession of
the Pledged Securities or, if the Pledged Securities are not to be
issued
in certificated form or are to be issued in certificated form
and
registered exclusively with the name of, and held by, a clearing
agency or
its nominee, shall have the right to have the book entries for the
Pledged
Securities issued in the Lender's name or the name or names
of its
designees, and the Lender shall have the right to cause delivery
of the
Pledged Securities to be made to the Investor or the book
entries
registered in the name of the Investor or the Investor's designee
only
against payment therefor. The Company acknowledges that the
Lender may
enter into one or more standing arrangements with other
financial
institutions for the issuance of Pledged Securities in book entry
form in
the name of such other financial institutions, as agent or
financial
intermediary for the Lender, and the Company agrees upon request
of the
Lender, to execute and deliver to such other financial institutions
the
Company's written concurrence in any such standing arrangements.
3.2(e) Prior to the occurrence of an Event of Default, the
Company may
redeem a pledged Mortgage or Pledged Security from the Lender's
security
interest by notifying the Lender of its intention to redeem such
Pledged
Mortgage or Pledged Security from pledge and either (a) paying, or
causing
an Investor to pay, to the Lender, for application to prepayment
of the
principal balance of the Notes, the Release Amount in connection with
such
Pledged Mortgage or Pledged Security, or (b) delivering substitute
Pledged
Mortgages which, in addition to being acceptable to the Lender in its
sole
discretion wo;;. when included with the Collateral, result in a
Collateral
Value of all Pledged Mortgages and Pledged Securities held by the
Lender
which is at least equal to the aggregate outstanding
Warehousing
Advances.(1)
3.2(f) Following the occurrence of a Default or Event of Default,
the
Lender may, with no liability to the Company or any Person,
continue to
release its security interest in any Pledged Mortgage or Pledged
Security
against payment of the Release Amount in connection with such
Pledged
Mortgage or Pledged Security.
3.2(g) The Release Amount in connection with any Pledged
Mortgage
shall be (i) prior to the occurrence of an Event of Default, the
principal
amount of the Advances made against such Pledged Mortgage, and (ii)
from
and after the occurrence and during the continuance of an Event of
Default,
the Committed Purchase Price of such Pledged Mortgage or, if there
is no
Purchase Commitment therefor, the amount paid to the Lender
in a
commercially reasonable disposition thereof.
3.3. Delivery of Additional Collateral or Mandatory Prepayment. At any
time
that the aggregate Collateral Value of the Pledged Mortgages and
Pledged
Securities then pledged hereunder is less than the aggregate amount
of the
Warehousing Advances then outstanding hereunder, the Lender may request,
and the
Company shall within two (2) Business Days after Notice by the
Lender (a)
deliver to the Lender for pledge hereunder additional Mortgage Loans
and/or
cash, in aggregate amounts sufficient to cover the difference
between the
Collateral Value of the Pledged Mortgages and Pledged Securities pledged
and the
aggregate amount of Warehousing Advances outstanding hereunder, or (b)
repay the
Warehousing Advances in an amount sufficient to reduce the aggregate
balance
thereof outstanding to or below the Collateral Value of the Pledged
Mortgages
and Pledged Securities pledged hereunder.
----------
(1) Replaced in Third Amendment (2/29/96) - Page 15.
3.4. Release of Warehousing Collateral.
3.4(a) The Lender may deliver documents relating to the
Warehousing
Collateral to the Company for correction or completion pursuant to a
Trust
Receipt.
3.4(b) Prior to the occurrence of a Default or Event of Default,
upon
delivery by the Company to the Lender of shipping instructions
pursuant to
Exhibit D-SF, the Lender will transmit Pledged Mortgages or
Pledged
Securities and all related loan documents or pool documents
to the
applicable Investor, Approved Custodian or other party.
3.4(c) Upon receipt of Notice from the Company under Section
2.9(k)
hereof, and repayment of the Release Amount with respect to a
Pledged
Mortgage identified by the Company, any Collateral Documents
relating to
the redeemed Pledged Mortgage or Mortgage Loan backing a Pledged
Security
which have not been delivered to an Investor or Approved Custodian
shall be
released by the Lender to the Company.
3.5. Collection and Servicing Rights. So long as no Event of Default
shall
have occurred and be continuing, the Company shall be entitled to
service and
receive and collect directly all sums payable to the Company in respect
of the
Collateral other than proceeds of any Purchase Commitment or proceeds
of the
sale of any Collateral. Following the occurrence of any Event of Default,
the
Lender or its designee shall thereafter be entitled to service and
receive and
collect all sums payable to the Company in respect of the Collateral,
and in
such case (a) the Lender or its designee in its discretion may, in its own
name
or in the name of the Company or otherwise, demand, xxx for, collect or
receive
any money or property at any time payable or receivable on account of
or in
exchange for any of the Collateral, but shall be under no obligation to
do so,
(b) the Company shall, if the Lender so requests, hold in trust for the
benefit
of the Lender and forthwith pay to the Lender at its office designated by
Notice
hereunder, all amounts thereafter received by the Company upon or in
respect of
any of the Collateral, advising the Lender as to the source of such funds,
and
(c) all amounts so received and collected by the Lender shall be held by
it as
part of the Collateral.
3.6. Return of Collateral at End of Commitment. If (a) the
Commitments
shall have expired or been terminated, and (b) no Advances, interest or
other
Obligations shall be outstanding and unpaid, the Lender shall deliver or
release
its security interest and shall deliver all Collateral in its possession
to the
Company at the Company's expense. The receipt of the Company for any
Collateral
released or delivered to the Company pursuant to any provision of this
Agreement
shall be a complete and full acauittance for the Collateral so returned,
and the
Lender shall thereafter be discharged from any liability or
responsibility
therefor.
4. CONDITIONS PRECEDENT.
4.1. Initial Advance. The obligation of the Lender to make the
initial
Advance under this Agreement is subject to the satisfaction, in the
sole
discretion of the Lender, on or before the date thereof of the
following
conditions precedent:
4.1(a) The Lender shall have received the following, all of which
must
be satisfactory in form and content to the Lender, in its sole
discretion:
(1) The Notes and this Agreement duly executed by the
Company.
(2) The Company's articles of incorporation as certified
by the
Secretary of State of the Company's incorporation, bylaws
certified by
the Company, and certificates of good standing dated no less
recently
than ninety (90) days prior to the date of this Agreement
and a
certification from the Franchise Tax Board of the State of
California
stating that the Company is in good standing with the
Franchise Tax
Board.
(3) An original resolution of the board of directors
of the
Company, certified as of the date of this Agreement by its
corporate
secretary, authorizing the execution, delivery and performance of
this
Agreement and the other Loan Documents, and all other
instruments or
documents to be delivered by the Company pursuant to this
Agreement.
(4) A certificate of the Company's corporate secretary as
to the
incumbency and authenticity of the signatures of the officers
of the
Company executing this Agreement and the other Loan Documents and
each
Advance Request and all other instruments or documents to be
delivered
pursuant hereto (the Lender being entitled to rely thereon until
a new
such certificate has been furnished to the Lender).
(5) Financial statements of the Company (and, if applicable,
its
Subsidiaries, on a consolidated basis) containing a balance
sheet as
of April 30, 1994, and related statements of income,
changes in
stockholders' equity and cash flows for the period ended on such
date,
all prepared in accordance with GAAP applied on a basis
consistent
with prior periods and audited by independent certified
public
accountants of recognized standing acceptable to the Lender.
(6) Financial statements of the Company (and, if applicable,
its
Subsidiaries, on a consolidated basis) containing a balance
sheet as
of January 31, 1995, related statements of income and
changes in
stockholders' equity for the period ended on such date
prepared in
accordance with GAAP applied on a basis consistent with the
Company's
most recent audited financial statements.
(7) The Guaranties, in the forms attached hereto as
Exhibit B-1
and Exhibit B-2, duly executed by each Guarantor.
(8) Financial statements of each Guarantor, signed by
such
Guarantor, dated as of December 31, 1994.
(9) A favorable written opinion of counsel to the Company
and the
Guarantors (or of separate counsel at the option of the
Company and
the Guarantors), dated as of the date of this Agreement
substantially
in the form of Exhibit H attached hereto, addressed to the
Lender.
(10) A tax, lien and judgment search of the appropriate
public
records for the Company and the Guarantors, including a
search of
Uniform Commercial Code financing statements, which search
shall not
have disclosed the existence of any prior Lien on the Collateral
other
than in favor of the Lender or as permitted hereunder.
(11) Copies of the certificates, documents or other
written
instruments which evidence the Company's eligibility
described in
Section 5.13 hereof, all in form and substance satisfactory
to the
Lender.
(12) Copies of the Company's errors and omissions
insurance
policy or mortgage impairment insurance policy and blanket
bond
coverage policy, or certificates in lieu of policies, all in
form and
content satisfactory to the Lender, showing compliance by the
Company
as of the date of this Agreement with the related
provisions of
Section 6.8 hereof.
(13) Executed financing statements in recordable form
covering
the Collateral and ready for filing in all jurisdictions
required by
the Lender.
(14) Receipt by the Lender of the Commitment Fees due on the
date
hereof.
(15) Evidence that all accounts necessary into which
Advances
will be funded have been established at the Funding Bank and
receipt
of a fully executed Funding Bank Agreement.
(16) A copy of acknowledgment agreements from each of
FNMA and
FHLMC in form and substance satisfactory to the Lender
acknowledging
the validity of the Lender's security interest in the portions
of the
Collateral that constitute FMMA and FHLMC Servicing Contracts.
(17) An Appraisal of the Servicing Contracts included
in the
Servicing Collateral as of December 31, 1994.
4.1(b) All directors, officers and shareholders of the Company,
all
Affiliates of the Company or of any Subsidiary of the Company,
and the
Guarantor, to whom or to any of whom the Company shall be indebted
as of
the date of this Agreement, shall have subordinated such
indebtedness to
the Obligations, by executing a Subordination of Debt Agreement,
in the
form of Exhibit F hereto; and the Lender shall have received an
executed
copy of any such Subordination of Debt Agreement, certified
by the
corporate secretary of the Company to be true and complete and in
full
force and effect as of the date of the Advance.
4.1(c) All Liens granted by the Company to any other Person on
any of
the Company's Servicing Contracts shall have been released, and the
Lender
shall have received satisfactory evidence thereof.
4.2. Each Advance. The obligation of the Lender to make the
initial and
each subsequent Advance under this Agreement is subject to the
satisfaction, in
the sole discretion of the Lender, as of the date of each such Advance,
of the
following additional conditions precedent:
4.2(a) The Company shall have delivered to the Lender the
Advance
Request, Collateral Documents, and documents relating to Wet
Settlement
Advances called for under, and shall have satisfied the procedures
set
forth in, Section 2.2, 2.4 or 2.6, as applicable hereof and the
applicable
Exhibits hereto described in the applicable Section, according to the
type
of Advance. All items delivered to the Lender shall be satisfactory
to the
Lender in form and content, and the Lender may reject such of them
as do
not meet the requirements of this Agreement or of the related
Purchase
Commitment.
4.2(b) The Lender shall have received evidence satisfactory to
it as
to the making and/or continuation of any xxxx entry or the due
filing and
recording in all appropriate offices of all financing statements and
other
instruments as may be necessary to perfect the security interest
of the
Lender in the Collateral under the Uniform Commercial Code of
Minnesota or
other applicable law. 4.2(c) The representations and warranties
of the
Company contained in Article 5 hereof shall be accurate and complete
in all
material respects as if made on and as of the date of each Advance.
4.2(d) The Company shall have performed all agreements to be
performed
by it hereunder, and after giving effect to the requested Advance,
there
shall exist no Default or Event of Default hereunder.
4.2(e) The Guarantors shall have performed all agreements
to be
performed by the Guarantors under the Guaranties.
4.2(f) The Company shall not have incurred any material
liabilities,
direct or contingent, other than in the ordinary course of its
business,
since the Statement Date.
4.2(g) The Lender shall have received from counsel for the
Company or
for the Guarantors or both, if requested by the Lender in its
sole
discretion, an updated opinion, in form and substance satisfactory
to the
Lender, addressed to the Lender and dated as of the date of such
Advance,
covering such of the matters as the Lender may reasonably request.
Delivery of an Advance Request by the Company shall be
deemed a
representation by the Company that all conditions set forth in this
Section 4.2
shall have been satisfied as of the date of such Advance
5. REPRESENTATIONS AND WARRANTIES.
The Company hereby represents and warrants to the Lender, as of the
date of
this Agreement and as of the date of each Advance Request and the making of
each
Advance, that:
5.1. Organization: Good Standing; Subsidiaries. The Company and
each
Subsidiary of the Company is a corporation duly organized, validly
existing and
in good standing under the laws of the jurisdiction of its incorporation,
has
the full legal power and authority to own its property and to carry
on its
business as currently conducted and is duly qualified as a foreign
corporation
to do business and is in good standing in each jurisdiction in which
the
transaction of its business makes such qualification necessary,
except in
jurisdictions, if any, where a failure to be in good standing has no
material
adverse effect on the business, operations, assets or financial condition
of the
Company or any such Subsidiary. For the purposes hereof, good standing
shall
include qualification for any and all licenses and payment of any and all
taxes
required in the jurisdiction of its incorporation and in each
jurisdiction in
which the Company transacts business. The Company has no Subsidiaries
except as
set forth on Exhibit G hereto. Exhibit G sets forth with respect to each
such
Subsidiary, its name, address, place of incorporation, each state in which
it is
qualified as a foreign corporation, and the percentage ownership of its
capital
stock by the Company.
5.2. Authorization and Enforceability. The Company has the
power and
authority to execute, deliver and perform this Agreement, the Notes
and all
other Loan Documents to which the Company is party and the making
of the
borrowings hereunder. The Guarantors have the legal capacity to execute,
deliver
and perform the Guaranties. The execution, delivery and performance
by the
Company of this Agreement, the Notes and all other Loan Documents to
which the
Company is a party and the making of the borrowings hereunder and
thereunder,
have been duly and validly authorized by all necessary corporate action
on the
part of the Company (none of which actions has been modified or rescinded,
and
all of which actions are in full force and effect) and do not and
will not
conflict with or violate any provision of law, of any judgments binding
upon the
Company, or of the articles of incorporation or by-laws of the Company,
conflict
with or result in a breach of or constitute a default or require any
consent
under, or result in the creation of any Lien upon any property or assets
of the
Company other than the Lien on the Collateral granted hereunder, or result
in or
require the acceleration of any indebtedness of the Company pursuant
to any
agreement, instrument or indenture to which the Company is a party or by
which
the Company or its property may be bound or affected. This Agreement, the
Notes
and all other Loan Documents contemplated hereby or thereby constitute
legal,
valid, and binding obligations of the Company or of the
Guarantors,
respectively, enforceable in accordance with their respective terms,
except as
limited by bankruptcy, insolvency or other such laws affecting the
enforcement
of creditors' rights.
5.3. Approvals. The execution and delivery of this Agreement, the
Notes and
all other Loan Documents and the performance of the Company's
obligations
hereunder and thereunder and the validity and enforceability hereof and
thereof
do not require any license, consent, approval or other action of any
state or
federal agency or governmental or regulatory authority other than those
which
have been obtained and remain in full force and effect.
5.4. Financial Condition. The balance sheet of the Company
(and, if
applicable, its Subsidiaries, on a consolidated basis) as at the Statement
Date,
and the related statements of income and changes in stockholders' equity
for the
fiscal period ended on the Statement Date, heretofore furnished to the
Lender,
fairly present the financial condition of the Company (and its
Subsidiaries) as
at the Statement Date and the results of its operations for the fiscal
period
ended on the Statement Date. The Company had, on the Statement Date, no
known
material liabilities, direct or indirect, fixed or contingent,
matured or
unmatured, or liabilities for taxes, long-term leases or unusual
forward or
long-term commitments not disclosed by, or reserved against in, said
balance
sheet and related statements, and at the present time there are no
material
unrealized or anticipated losses from any loans, advances or other
commitments
of the Company except as heretofore disclosed to the Lender in writing.
Said
financial statements were prepared in accordance with GAAP applied
on a
consistent basis throughout the periods involved. Since the Statement
Date,
there has been no material adverse change in the business, operations,
assets or
financial condition of the Company (and its Subsidiaries), nor is the
Company
aware of any state of facts which (with or without notice or lapse of
time or
both) would or could result in any such material adverse change.
5.5. Litigation. There are no actions, claims, suits or proceedings
pending
or, to the knowledge of the Company, threatened or reasonably
anticipated
against or affecting the Company or any Subsidiary of the Company in any
court
or before any arbitrator or before any government commission, board,
bureau or
other administrative agency which, if adversely determined, may
reasonably be
expected to result in any material and adverse change in the
business,
operations, assets or financial condition of the Company as a whole, or
which
would affect the validity or enforceability of this Agreement or the Notes.
5.6. Compliance with Laws. Neither the Company nor any Subsidiary
of the
Company is in violation of any provision of any law, or of any judgment,
award,
rule, regulation, order, decree, writ or injunction of any court or
public
regulatory body or authority which might have a material adverse effect
on the
business, operations, assets or financial condition of the Company as a
whole or
which would affect the validity or enforceability of this Agreement
or the
Notes.
5.7. Regulations G and U. The Company is not engaged principally, or
as one
of its important activities, in the business of extending credit for the
purpose
of purchasing or carrying Margin Stock, and no part of the proceeds
of any
Advances made hereunder will be used to purchase or carry any Margin Stock
or to
extend credit to others for the purpose of purchasing or carrying any
Margin
Stock.
5.8. Investment Company Act. The Company is not an "investment
company" or
controlled by an "investment company within the meaning of the
Investment
Company Act of 1940, as amended.
5.9. Payment of Taxes. The Company and each of its Subsidiaries has
filed
or caused to be filed all federal, state and local income, excise,
property and
other tax returns with respect to the operations of the Company
and its
Subsidiaries which are required to be filed, all such returns are
true and
correct, and the Company and each of its Subsidiaries has paid or caused
to be
paid all taxes as shown on such returns or on any assessment, to the extent
that
such taxes have become due, including, but not limited to, all FICA
payments and
withholding taxes, if appropriate. The amounts reserved, as a
liability for
income and other taxes payable, in the financial statements described in
Section
5.4 hereof are sufficient for payment of all unpaid federal, state and
local
income, excise, property and other taxes, whether or not disputed,
of the
Company and its Subsidiaries accrued for or applicable to the period and
on the
dates of such financial statements and all years and periods prior
thereto and
for which the Company and its Subsidiaries may be liable in its own right
or as
transferee of the assets of, or as successor to, any other Person.
5.10. Agreements. Neither the Company nor any Subsidiary of the
Company is
a party to any agreement, instrument or indenture or subject to any
restriction
materially and adversely affecting its business, operations, assets or
financial
condition, except as disclosed in the financial statements described in
Section
5.4 hereof. Neither the Company nor any Subsidiary of the Company is in
default
in the performance, observance or fulfillment of any of the
obligations,
covenants or conditions contained in any agreement, instrument, or
indenture
which default could have a material adverse effect on the business,
operations,
properties or financial condition of the Company as a whole. No holder
of any
indebtedness of the Company or of any of its Subsidiaries has given
notice of
any asserted default thereunder, and no liquidation or dissolution
of the
Company or of any of its Subsidiaries and no receivership,
insolvency,
bankruptcy, reorganization or other similar proceedings relative to the
Company
or of any of its Subsidiaries or any of its properties is pending, or
to the
knowledge of the Company, threatened.
5.11. Title to Properties. The Company and each Subsidiary of the
Company
has good, valid, insurable (in the case of real property) and marketable
title
to all of its properties and assets (whether real or personal,
tangible or
intangible) reflected on the financial statements described in
Section 5.4
hereof, except for such properties and assets as have been disposed of
since the
date of such financial statements as no longer used or useful in the
conduct of
its business or as have been disposed of in the ordinary course of
business, and
all such properties and assets are free and clear of all Liens
except as
disclosed in such financial statements.
5.12. ERISA. All plans ("Plans") of a type described in Section
3(3) of
ERISA in respect of which the Company or any Subsidiary of the Company
is an
"Employer," as defined in Section 3(5) of ERISA, are in substantial
compliance
with ERISA, and none of such Plans is insolvent or in reorganization,
has an
accumulated or waived funding deficiency within the meaning of Section
412 of
the Internal Revenue Code, and neither the Company nor any Subsidiary
of the
Company has incurred any material liability (including any material
contingent
liability) to or on account of any such Plan pursuant to Sections 4062,
4063,
4064, 4201 or 4204 of ERISA; and no proceedings have been
instituted to
terminate any such Plan, and no condition exists which presents a material
risk
to the Company or a Subsidiary of the Company of incurring a liability to
or on
account of any such Plan pursuant to any of the foregoing Sections of
ERISA. No
Plan or trust forming a part thereof has been terminated since
September 1,
1974.
5.13. Eligibility. The Company is approved and qualified and in
good
standing as a lender or seller/servicer, as set forth below, and
meets all
requirements applicable to its status as such:
5.13(a) FNMA approved seller/servicer of Mortgage Loans,
eligible to
originate, purchase, hold, sell, and service Mortgage Loans to be
sold to
FNMA.
5.13(b) FHLMC approved seller/servicer of Mortgage Loans,
eligible to
originate, purchase, hold, sell and service Mortgage Loans to be
sold to
FHLMC.
5.13(c) RFC approved seller/servicer of Mortgage Loans,
eligible to
originate, purchase, hold, sell and service Mortgage Loans to be
sold to
REC.
5.14. Place of Business. The principal place of business of the
Company is
0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxxx 00000.
5.15. Special Representations Concerning Collateral. The Company
hereby
represents and warrants to the Lender, as of the date of this Agreement
and as
of the date of each Advance Request and the making of each Advance, that:
5.15(a) The Company is the legal and equitable owner and holder,
free
and clear of all Liens (other than Liens granted hereunder), of the
Pledged
Mortgages and the Pledged Securities. All Pledged Mortgages,
Pledged
Securities and Purchase Commitments have been duly authorized and
validly
issued to the Company, and all of the foregoing items of Collateral
comply
with all of the requirements of this Agreement, and have been and
will
continue to be validly pledged or assigned to the Lender, subject
to no
other Liens.
5.15(b) The Company has, and will continue to have, the full
right,
power and authority to pledge the Collateral pledged and to be
pledged by
it hereunder.
5.15(c) Any Mortgage Loan and any related document included
in the
Pledged Mortgages (1) has been duly executed and delivered by the
parties
thereto at a closing held not more than ninety (90) days prior to the
date
of the Advanced Request for such Mortgage Loan,1 (2) has been
made in
compliance with all requirements of the Real Estate Settlement
Procedures
Act, Equal Credit Opportunity Act, the federal Truth-In-Lending Act
and all
other applicable laws and regulations, (3) is and will continue to be
valid
and enforceable in accordance with its terms, without defense or
offset,
(4) has not been modified or amended except in writing, which
writing is
part of the Collateral Documents, nor any requirements thereof
waived, (5)
has been evaluated or appraised in accordance with Title XI of FIRREA,
and
(6) complies and will continue to comply with the terms of this
Agreement
and, if applicable, with the related Purchase Commitment held
by the
Company. Each Mortgage Loan other than a Home Equity Loan has been
fully
advanced in the face amount thereof, each and each First Mortgage
is a
first Lien on the premises described therein and each Second
Mortgage is
secured by a second Lien on the premises described therein, and has or
will
have a title insurance policy, in American Land Title Association
form or
equivalent thereof, from a recognized title insurance company,
insuring the
priority of the Lien of the Mortgage and meeting the usual
requirements of
Investors purchasing such Mortgage Loans.
----------
(1) Replaced in Third Amendment (2/29/96) - Page 15.
5.15(d) No default has occurred and is continuing for more than
thirty
(30) days under any Mortgage Loan included in the Pledged Mortgages
without
the Advance against such Pledged Mortgage having been repaid in
accordance
with Section 2.9(f)(6) hereof, provided, however, that with
respect to
Pledged Mortgages which have already been pledged as Collateral
hereunder,
if any defaut has occurred, the Company will promptly notify
the
Lender.(1)
5.15(e) The Company has complied and will continue to comply
with all
laws, rules and regulations in respect of the FHA insurance or VA
guaranty
of each Mortgage Loan included in the Pledged Mortgages designated
by the
Company as an FHA insured or VA guaranteed Mortgage Loan, and
such
insurance or guarantee is and will continue to be in full force and
effect.
All such FHA insured and VA guaranteed Mortgage Loans comply and
will
continue to comply in all respects with all applicable requirements
for
purchase under the FMMA standard form of selling contract for FHA
insured
and VA guaranteed loans and any supplement thereto then in effect.
5.15(f) All fire and casualty policies covering the
premises
encumbered by each Mortgage included in the Pledged Mortgages (1)
name and
will continue to name the Company and its successors and assigns
as the
insured under a standard mortgagee clause, (2) are and will continue
to be
in full force and effect, and (3) afford and will continue to
afford
insurance against fire and such other risks as are usually insured
against
in the broad form of extended coverage insurance from time to
time
available.
5.15(g) Pledged Mortgages secured by premises located in a
special
flood hazard area designated as such by the Secretary of HUD1 are and
shall
continue to be covered by special flood insurance under the National
Flood
Insurance Program.
5.15(h) Each FHA insured Mortgage Loan pledged hereunder
meets all
applicable governmental requirements for such insurance. Each
Pledged
Mortgage, against which an Advance is Xxxx on the basis of a
Purchase
Commitment, meets all requirements of such Purchase Commitment. The
Company
shall assure that Pledged Mortgages which are intended to be used
in the
formation of Mortgage-backed Securities shall comply or, prior
to the
formation of any such Mortgage-backed Security, shall comply
with the
requirements of the governmental instrumentality, department or
agency
guaranteeing such Mortgage-backed Security.
5.15(i) For Pledged Mortgages which will be used to back
GMMA
Mortgage-backed Securities, the Company has received from
GNMA a
Confirmation Notice or Confirmation Notices for Request
Additional
Commitment Authority and for Request Pool Numbers, and there
remains
available thereunder a commitment on the part of GNMA sufficient to
permit
the issuance of GNMA Mortgage-backed Securities in an amount at least
equal
to the amount of such Pledged Mortgages designated by the Company
as the
Mortgage Loans to be used to back such GMMA Mortgage-backed
Securities;
each such Confirmation Notice is in full force and effect; each of
such
Pledged Mortgages has been assigned by the Company to one of such
Pool
Numbers and a portion of the available GNMA Commitment has been
allocated
thereto by the Company, in an amount at least equal to such
Pledged
Mortgages; and each such assignment and allocation has been
reflected in
the books and records of the Company.
5.16. Servicing. Attached hereto as Exhibit E is a true and complete
list
of the Company's Servicing Portfolio. All of the Company's Servicing
Contracts
are in full force and effect and, except as otherwise indicated,
are
unencumbered by Liens. No default or event which, with notice or lapse of
time
or both, would become a default, exists under any such Servicing Contract.
5.17. Special Representations Concerning Pledged Servicing Contracts.
The
Company hereby represents and warrants to the Lenders, as of the date of
this
Agreement and as of the date of any Term Loan Advance Request or Working
Capital
Advance Request and the making of each Term Loan Advance or Working
Capital
Advance, that:
5.17(a) The Company is the legal and equitable owner and holder,
free
and clear of all Liens (other than Liens granted hereunder),
of the
Servicing Contracts pledged hereunder and, subject to the
limitations set
forth in Section 3.1(d), such Servicing Contracts will be validly
pledged
or assigned to the Lender, subject to no other Liens.
5.17(b) Subject to the limitations set forth in Section 3.1(d),
the
Company has, and will continue to have, the full right, power and
authority
to pledge the Servicing Contracts pledged and to be pledged
by it
hereunder.
5.17(c) All of the servicing rights under the Servicing
Contracts
pledged hereunder in which a security interest is granted hereby
constitute
direct servicing rights.
5.17(d) Each Servicing Contract pledged hereunder is in full
force and
effect, each Servicing Contract pledged hereunder is legal,
valid and
enforceable in accordance with its terms and no default or event
which,
with notice or lapse of time or both, would become a default, exists
under
any such Servicing Contract.
5.17(e) Each right to the payment of money under the
Servicing
Contracts pledged hereunder is genuine and enforceable in accordance
with
its terms against the parties obligated to pay the same (nObligorn),
except
as limited by bankruptcy, insolvency, moratorium or other similar
laws
affecting the enforcement of creditors' rights generally, which terms
have
not been modified or waived in any material respect or to any
material
extent.
5.17(f) To the best of the Company's knowledge, the amount
represented
by the Company to the Lenders as owing by an Obligor under each
Mortgage
Loan being serviced under a Servicing Contract pledged hereunder
is the
correct amount actually and unconditionally owing by such Obligor.
5.17(g) To the best of the Company's knowledge, no Obligor
has any
defense, set off, claim or counterclaim against the Company which
can be
asserted against the Lender or the Lenders, whether in any
proceeding to
enforce the Lenders rights in the related Mortgage Loan or otherwise.
5.17(h) The Company has not sold, assigned or otherwise
transferred
any rights associated with the Mortgage Loans being serviced
under a
Servicing Contract pledged hereunder, including, without limitation,
any
rights to place escrow deposits with respect thereto.
5.17(i) Except for the Acknowledgement Agreements, no consent
of any
Obligor or any other Person is required for the grant of the
security
interest provided herein by the Company in any of the Servicing
Collateral
including, without limitation, the Servicing Contracts pledged
hereunder,
or any computer software being utilized by the Company pursuant to
license,
lease or otherwise, other than consents which have been obtained, nor
will
any consent need to be obtained upon the occurrence of an Event of
Default
for the Lender to exercise its rights with respect to any of the Term
Loan
Collateral except as set forth in the Acknowledgment Agreements.
5.17(j) Each Mortgage Loan being serviced under a Servicing
Contract
pledged hereunder that is owned by FMMA or FHLMC or is included in a
FNMA
or FHLMC pool is covered by an Acknowledgment Agreement with such
agency in
form and substance satisfactory to the Lender.
----------
(1) Replaced in Third Amendment (2/29/96) - Page 16.
5.18. Special Representations Concerning Receivables. The Company
hereby
represents and warrants to the Lenders, as of the date of this Agreement
and as
of the date of each Working Capital Advance Request and the making of
each
Working Capital Advance that:
5.18(a) The Company is the legal and equitable owner and holder,
free
and clear of all Liens (other than Liens granted hereunder)
of the
Receivables, and the Receivables have been and will continue to be
subject
to a security interest in favor of the Lender, subject to no other
Liens.
5.18(b) The Company has, and will continue to have, the full
right,
power and authority to grant a security interest in the Receivables
to the
Lender.
5.18(c) Each Receivable is a valid, enforceable right to
retain
amounts received from obligers under Mortgage Loans serviced
by the
Company, or a valid, enforceable right to payment from FNMA, FHLMC,
GNMA,
VA, FHA or a private mortgage insurer, is currently due, and as to
which no
condition exists that will impair or materially delay payment thereof.
5.18(d) To the best of the Company's knowledge, with respect
to any
Receivables, the Mortgagor who is liable for payments that
will be
applicable to such Receivables, or FMMA, FHLMC, GNMA, FHA, VA
or the
private mortgage insurer, obligated thereon, has no defense, setoff,
claim
or counterclaim against the Company which can be asserted
against the
Lender or the Lenders, whether in any proceeding to enforce the
Lender's
security interest in such Receivable or otherwise.
5.18(e) Except for the Acknowledgment Agreements, to the
extent
required, no consent of any Person is required tothe grant of a
security
interest in the Receivables to the Lender, and no consent will need
to be
obtained upon the occurrence of an Event of Default for the
Lender to
exercise its rights with respect to any of the Receivables.
6. AFFIRMATIVE COVENANTS.
The Company hereby covenants and agrees that, so long as the
Commitment is
outstanding or there remain any Obligations to be paid or performed under
this
Agreement or under any other Loan Document, the Company shall:
6.1. Payment of Notes. Punctually pay or cause to be paid all
Obligations
payable hereunder and under the Notes in accordance with the terms
hereof and
thereof.
6.2. Financial Statements and Other Reports. Deliver to the Lender:
6.2(a) As soon as available and in any event within thirty (30)
days
after the end of each calendar month, statements of income and
changes in
stockholders' equity of the Company (and, if applicable, its
Subsidiaries,
on a consolidated basis) for the immediately preceding month and
for the
period from the beginning of the fiscal year to the end of such
calendar
month, and the related balance sheet as at the end of the
immediately
preceding month, all in reasonable detail and certified as to the
fairness
of presentation by the chief financial officer of the Company,
subject,
however, to year-end audit adjustments.
6.2(b) As soon as available and in any event within ninety (90)
days
after the close of each fiscal year, statements of income,
changes in
stockholders' equity and cash flows of the Company (and, if
applicable, its
Subsidiaries, on a consolidated basis) for such year, and the
related
balance sheet as at the end of such year (setting forth in comparative
form
the corresponding figures for the preceding fiscal year), all in
reasonable
detail and accompanied by an opinion in form and substance
satisfactory to
the Lender and prepared by an accounting firm reasonably
satisfactory to
the Lender, or other independent certified public accountants of
recognized
acceptable standing selected by the Company and to the Lender, as to
said
financial statements and a certificate signed by the chief
financial
officer of the Company stating that said financial statements
fairly
present the financial condition and results of operations of the
Company
(and, if applicable, its Subsidiaries) as at the end of, and for,
such
year.
6.2(c) Together with each delivery of (i) financial
statements
required in Section 6.2(a) for the months of July, October and
January, and
(ii) financial statements required in Section 6.2(b), an
Officer's
Certificate substantially in the form of Exhibit I-SF hereto: (1)
setting
forth in reasonable detail all calculations necessary to show
that the
Company is in compliance with the requirements of Sections 7.6, 7.7,
7.8,
7.9, 7.10, 7.11 and 7.12 hereof as of the end of such quarter or year
(or,
if the Company is not in compliance, showing the extent of non-
compliance
and specifying the period of non-compliance and what actions the
Company
has taken, is taking or proposes to take with respect thereto);
(2)
certifying that the Company was, as of the end of the period, in
compliance
and in good standing with applicable HUD, GNMA, or Investor net
worth
requirements; and (3) stating that the signers have reviewed the
terms of
this Agreement and have made, or caused to be made under their
supervision,
a review in reasonable detail of the transactions and conditions
of the
Company (and, if applicable, its Subsidiaries) during the accounting
period
covered by such financial statements and that such review has not
disclosed
the existence during or at the end of such accounting period, and
that the
signers do not have knowledge of the existence as of the date
of the
Officer's Certificate, of any Default or Event of Default, or
if any
Default or Event of Default existed or exists, specifying the
nature and
period of the existence thereof and what action the Company has
taken, is
taking and proposes to take with respect thereto.
6.2(d) As soon as available and in any event within ninety (90)
days
after the close of each fiscal year of the Company, current
financial
statements of each Guarantor, signed by such Guarantor, dated not more
than
ninety (90) days prior to the date of required delivery to the
Lender
hereunder.
6.2(e) Weekly or more frequently as the Lender may from time to
time
request, a commitment summary and pipeline report substantially in the
form
of Exhibit L (the "Commitment Summary Report a) dated as of the
close of
business on the last Business Day of each week and provided to the
Lender
by facsimile by 10:00 a.m. on the next succeeding Business Day
of the
following week, and the signed original thereof shall be sent to the
Lender
by first class mail on such next succeeding Business Day.
6.2(f) As soon as available and in any event within fifteen (15)
days
after the end of each calendar month, a consolidated report (the
"Servicing
Portfolio Report") as of the end of the calendar month detailing, as
to all
Mortgage Loans the servicing rights to which are owned by the
Company
(specified by investor type, recourse and non-recourse)
regardless of
whether such Mortgage Loans are Pledged Mortgages and which report
shall
indicate Mortgage Loans which (A) are current and in good standing,
(B) are
more than 30, 60 or 90 days past due, respectively, (C) are, for
Mortgage
Loans serviced with recourse, more than three hundred sixty (360) days
past
due, (D) are the subject of pending bankruptcy or foreclosure
proceedings,
or (E) have been converted (through foreclosure or other
proceedings in
lieu thereof) by the Company into real estate owned by the Company.
6.2(g) Reports in respect of the Pledged Mortgages and
Pledged
Securities and Servicing Collateral, in such detail and at such
times as
the Lender in its discretion may reasonably request at any time or
from
time to time.
6.2(h) Copies of all regular or periodic financial and other
reports,
if any, which the Company shall file with the Securities and
Exchange
Commission or any governmental agency successor thereto, copies
of any
audits completed by GNMA, FMMA or FHLMC and copies of the Mortgage
Bankers'
Financial Reporting Forms (FHLMC Form 1055/FNMA Form 1002)
which the
Company shall have filed with FMMA or FHLMC.
6.2(i) From time to time, with reasonable promptness, such
further
information regarding the business, operations, properties or
financial
condition of the Company as the Lender may reasonably request.
6.2(j) Semi-annually, or more frequently as the Lender may from
time
to time request, an Appraisal.
6.3. Maintenance of Existence; Conduct of Business. Preserve and
maintain
its corporate existence in good standing and all of its rights,
privileges,
licenses and franchises necessary or desirable in the normal conduct
of its
business, including, without limitation, its eligibility as
lender,
seller/servicer and issuer described under Section 5.13 hereof;
conduct its
business in an orderly and efficient manner; maintain a net worth of
acceptable
assets as required by FHA, GMMA, FNMA or FHLMC at any and all times
for
maintaining the Company's status as a FHA, FNMA, FHLMC approved
mortgagee or
GMMA issuer; and make no change in the nature or character of its
business or
engage in any business in which it was not engaged on the date of
this
Agreement.
6.4. Compliance with Applicable Laws. Comply with the requirements
of all
applicable laws, rules, regulations and orders of any governmental
authority, a
breach of which could materially adversely affect its business,
operations,
assets, or financial condition, except where contested in good faith
and by
appropriate proceedings.
6.5. Inspection of Properties and Books. Permit authorized
representatives
of the Lender or any Participant to discuss the business, operations,
assets and
financial condition of the Company and its Subsidiaries with its
officers and
employees and to examine its books of account and make copies or
extracts
thereof, all at such reasonable times as the Lender or any Participant
may
request. The Company will provide its accountants with a copy of this
Agreement
promptly after the execution hereof and will instruct its accountants to
answer
candidly any and all questions that the officers of the Lender
or any
Participant or any authorized representatives of the Lender or any
Participant
may address to them in reference to the financial condition or affairs
of the
Company and its Subsidiaries. The Company may have its
representatives in
attendance at any meetings between the officers or other representatives
of the
Lender or any Participant and the Company accountants held in accordance
with
this authorization.
6.6. Notice. Give prompt written notice to the Lender of (a) any
action,
suit or proceeding instituted by or against the Company or any of
its
Subsidiaries in any federal or state court or before any commission or
other
regulatory body (federal, state or local, domestic or foreign) which
action,
suit or proceeding has at issue in excess of One Hundred Thousand
Dollars
($100,000), or any such proceedings threatened against the Company or any
of its
Subsidiaries in a writing containing the details thereof, (b) the
filing,
recording or assessment of any federal, state or local tax Lien
against the
Company, or any of its assets or any of its Subsidiaries, (c) the
occurrence of
any Event of Default hereunder or the occurrence of any Default and
continuation
thereof for five (5) days, (d) the suspension, revocation or termination
of the
Company's eligibility, in any respect, as approved lender,
seller/servicer or
issuer as described under Section 5.13 hereof, (e) the transfer,
loss or
termination of any Servicing Contract to which the Company is a party, or
which
is held for the benefit of the Company, and the reason for such transfer,
loss
or termination, if known to the Company, and (f) any other action,
event or
condition of any nature which may lead to or result in a material adverse
effect
upon the business, operations, assets, or financial condition of the
Company and
its Subsidiaries or which, with or without notice or lapse of time or
both,
would constitute a default under any other agreement, instrument or
indenture to
which the Company or any of its Subsidiaries is a party or to which the
Company
or any of its Subsidiaries, its properties, or assets may be subject.
6.7. Payment of Debt, Taxes, etc. Pay and perform all obligations
and
indebtedness of the Company, and cause to be paid and performed all
obligations
and indebtedness of its Subsidiaries, promptly and in accordance with the
terms
thereof and pay and discharge or cause to be paid and discharged
promptly all
taxes, assessments and governmental charges or levies imposed upon the
Company
or its Subsidiaries or upon their respective income, receipts or
properties
before the same shall become past due, as well as all lawful claims for
labor,
materials and supplies or otherwise which, if unpaid, might become a
Lien or
charge upon such properties or any part thereof; provided, however,
that the
Company and its Subsidiaries shall not be required to pay taxes,
assessments or
governmental charges or levies or claims for labor, materials or
supplies for
which the Company or its Subsidiaries shall have obtained an adequate
bond or
adequate insurance or which are being contested in good faith and by
proper
proceedings which are being reasonably and diligently pursued and for
which
proper reserves have been created.
6.8. Insurance. Maintain (a) errors and omissions insurance or
mortgage
impairment insurance and blanket bond coverage, with such companies and in
such
amounts as satisfy prevailing FMMA, FHLMC and GNMA requirements applicable
to a
qualified mortgage originating institution, and (b) liability insurance and
fire
and other hazard insurance on its properties, with responsible
insurance
companies approved by the Lender, in such amounts and against such risks
as is
customarily carried by similar businesses operating in the same vicinity;
and
(c) within thirty (30) days after Notice from the Lender, obtain such
additional
insurance as the Lender shall reasonably require, all at the sole expense
of the
Company. Copies of such policies shall be furnished to the Lender without
charge
upon request of the Lender.
6.9. Closing Instructions. Indemnify and hold the Lender harmless
from and
against any loss, including reasonable attorneys, fees and costs,
attributable
to the failure of a title insurance company, agent or approved
attorney to
comply with the disbursement or instruction letter or letters of the
Company
relating to any Mortgage Loan.
6.10. Subordination of Certain Indebtedness. Cause any indebtedness
of the
Company, incurred after the date of this Agreement, to any shareholder,
director
or officer of the Company, or to any Affiliate of the Company or
of any
Subsidiary of the Company, or to any Guarantor, to be subordinated
to all
Obligations by the execution of a Subordination of Debt Agreement in the
form of
Exhibit J hereto and deliver to the Lender an executed copy of said
Agreement,
certified by the corporate secretary of the Company to be true and
complete and
in full force and effect.
6.11. Other Loan Obligations. Perform all material obligations
under the
terms of each loan agreement, note, mortgage, security agreement or
debt
instrument by which the Company is bound or to which any of its
property in
subject, and promptly notify the Lender in writing of a declared default
under
or the termination, cancellation, reduction or nonrenewal of any of its
other
lines of credit or agreements with any other lender. Exhibit J hereto is a
true
and complete list of all such lines of credit or agreements as of the
date
hereof and the Company hereby agrees to give the Lender at least thirty
(30)
days Notice before entering into any additional lines of credit or
agreements.
6.12. Use of Proceeds of Advances. Use the proceeds of each Advance
solely
for the purposes set forth in Section 2 1(b), Section 2.3(b) or Section
2.5(b)
above, as applicable.
6.13. Special Affirmative Covenants Concerning Collateral.
6.13(a) Warrant and defend the right, title and interest of the
Lender
in and to the Collateral against the claims and demands of all
Persons
whomsoever.
6.13(b) Service or cause to be serviced all Mortgage
Loans in
accordance with the standard requirements of the issuers of
Purchase
Commitments covering the same, the Servicing Contracts covering the
same
and all applicable FHA and VA requirements, including without
limitation
taking all actions necessary to enforce the obligations of the
obligers
under such Mortgage Loans. The Company shall service or cause
to be
serviced all Mortgage Loans backing Pledged Securities in accordance
with
applicable governmental requirements and requirements of
issuers of
Purchase Commitments covering the same. The Company shall hold all
escrow
funds collected in respect of Pledged Mortgages, Mortgage Loans
backing
Pledged Securities and Mortgage Loans serviced pursuant to
Servicing
Contracts in trust, without commingling the same with non-custodial
funds,
and apply the same for the purposes for which such funds were
collected.
6.13(c) Execute and deliver to the Lender such Uniform Commercial
Code
financing statements with respect to the Collateral as the
Lender may
request. The Company shall also execute and deliver to the Lender
such
further instruments of sale, pledge or assignment or transfer, and
such
powers of attorney, as required by the Lender, and shall do and
perform all
matters and things necessary or desirable to be done or observed,
for the
purpose of effectively creating, maintaining and preserving the
security
and benefits intended to be afforded the Lender under this Agreement.
The
Lender shall have all the rights and remedies of a secured party
under the
Uniform Commercial Code of Minnesota, or any other applicable
law, in
addition to all rights provided for herein.
6.13(d) Notify the Lender within two (2) Business Days of any
default
under, or of the termination of, any Purchase Commitment relating
to any
Pledged Mortgage, Eligible Mortgage Pool or Pledged Security.
6.13(e) Promptly comply in all respects with the terms and
conditions
of all Purchase Commitments, and all extensions, renewals and
modifications
or substitutions thereof or thereto. The Company will cause to be
delivered
to the Investor the Pledged Mortgages and Pledged Securities to be
sold
under each Purchase Commitment not later than the mandatory delivery
date
thereof.
6.13(f) Maintain, at its principal office or in a regional
office
approved by the Lender, or in the office of a computer service
bureau
engaged by the Company and approved by the Lender, and, upon request,
make
available to the Lender the originals, or copies in any case
where the
originals have been delivered to the Lender or to an Investor,
of its
Mortgage Notes and Mortgages included in Pledged Mortgages, Mortgage-
backed
Securities delivered to the Lender as Pledged Securities,
Purchase
Commitments, Servicing Contracts and all related Mortgage Loan
documents
and instruments, and all files, surveys, certificates,
correspondence,
appraisals, computer programs, tapes, discs, cards, accounting
records and
other information and data relating to the Collateral.
7. NEGATIVE COVENANTS.
The Company hereby covenants and agrees that, so long as the
Commitment is
outstanding or there remain any Obligations to be paid or performed, the
Company
shall not, either directly or indirectly, without the prior written
consent of
the Lender:
7.1. Contingent Liabilities. Assume, guarantee, endorse, or
otherwise
become contingently liable for the obligation of any Person
except by
endorsement of negotiable instruments for deposit or collection in the
ordinary
course of business.
7.2. Sale or Pledge of Servicing Contracts. Sell, pledge or
grant a
security interest in any existing or future Servicing Contracts of the
Company
other than to the Lender, except as otherwise expressly permitted in
this
Agreement, or omit to take any action required to keep all such
Servicing
Contracts in full force and effect, provided, however, that if no
Default or
Event of Default has occurred and is continuing, servicing on
individual
Mortgage Loans may be sold concurrently with and incidental to the sale of
such
Mortgage Loans (with servicing released) in the ordinary course of the
Company's
business.
7.3. Merger; Sale of Assets; Acquisitions. Liquidate, dissolve,
consolidate
or merge or sell any substantial part of its assets, or acquire any
substantial
part of the assets of another.
7.4. Deferral of Subordinated Debt. Pay in advance of the stated
maturity
thereof any Subordinated Debt of the Company or, if a Default or
Event of
Default hereunder shall have occurred, make any payment of any kind
thereafter
on such Subordinated Debt until all Obligations have been paid and
performed in
full and any applicable preference period has expired.
7.5. Loss of Eligibility. Take any action that would cause the
Company to
lose all or any part of its status as an eligible lender, seller/servicer
and
issuer as described under Section 5.13 hereof.
7.6. Current Ratio. Permit the ratio of current assets to
current
liabilities of the Company and its Subsidiaries, determined on a
consolidated
basis in accordance with GAAP, at any time to exceed 1.01 to 1.
7.7. Debt to Adjusted Tangible Net Worth Ratio. Permit the ratio of
Debt to
Adjusted Tangible Net Worth of the Company (and its Subsidiaries,
on a
consolidated basis) at any time to exceed 10 to 1.
7.8. Minimum Tangible Net Worth. Permit Tangible Net Worth of the
Company
(and its Subsidiaries, on a consolidated basis) at any time to be less-
than One
Million Dollars ($1,000,000).(1)
7.9. Minimum Adjusted Tangible Net Worth. Permit Adjusted
Tangible net
Worth of the Company (and its Subsidiaries, on a consolidated basis) at any
time
to be less than Three Million Five Hundred Thousand Dollars
($3,500,000).(1)
----------
(1) Replaced in Third Amendment (2/29/96) - Page 16.
7.10. Minimum Servicing Portfolio. Permit the Adjusted Servicing
Portfolio
of the Company to be less than Two Hundred Fifty Million
Dollars
($250,000,000).(1)
7.11. Dividends. For each fiscal year, declare or pay dividends in
excess
of twenty-five percent (25%) of the Company's net after-tax income earned
in any
fiscal year. Any Dividends declared in respect of the net income of the
Company
in any fiscal year must be paid by the end of the second quarter of the
next
succeeding fiscal year.
7.12. Transactions with Affiliates. Directly or indirectly (at
make any
loan, advance, extension of credit or capital contribution to any
of its
Affiliates, (b) transfer, sell, pledge, assign or otherwise dispose of
any of
its assets to or on behalf of such Affiliates, (c) merge or consolidate
with or
purchase or acquire assets from such Affiliates, or (d) transfer,
pledge, or
assign or otherwise pay management fees to or on behalf of such Affiliates.
7.13. Acquisition of Recourse Servicing Contracts. Acquire
Servicing
Contracts under which the Company is obligated to repurchase or
indemnify the
holder of the Mortgage Loans as a result of defaults on the Mortgage
Loans at
any time during the term of such Mortgage Loans.
7.14. Special Negative Covenants Concerning Collateral.
7.14(a) The Company shall not amend or modify, or waive any
of the
terms and conditions of, or settle or compromise any claim in
respect of,
any Pledged Mortgages or Pledged Securities.
7.14(b) The Company shall not sell, assign, transfer or
otherwise
dispose of, or grant any option with respect to, or pledge or
otherwise
encumber (except pursuant to this Agreement or as permitted herein)
any of
the Collateral or any interest therein.
7.14(c) The Company shall not make any compromise,
adjustment or
settlement in respect of any of the Collateral or accept other than
cash in
payment or liquidation of the Collateral.
8. DEFAULTS; REMEDIES.
8.1. Events of Default. The occurrence of any of the following
conditions
or events shall be an event of default ("Event of Default"):
8.1(a) Failure to pay the principal of any Advance when due,
whether
at stated maturity, by acceleration, or otherwise; or failure to
pay any
installment of interest on any Advance or any other amount due under
this
Agreement within ten (10) days after the due date; or failure to
pay,
within any applicable grace period, the principal or interest on any
other
indebtedness of the Company due the Lender; or
8.1(b) Failure of the Company or any of its Subsidiaries to
pay, or
any default in the payment of any principal or interest on, any
other
indebtedness or in the payment of any contingent obligation
within any
period of grace provided; or breach or default with respect to any
other
material term of any other indebtedness or of any loan agreement,
mortgage,
indenture or other agreement relating thereto, if the effect of
such
failure, default or breach is to cause, or to permit the holder or
holders
thereof (or a trustee on behalf of such holder or holders) to
cause,
indebtedness of the Company or its Subsidiaries in the aggregate
amount of
Fifty Thousand Dollars ($50,000) or more to become or be declared due
prior
to its stated maturity (upon the giving or receiving of notice,
lapse of
time, both, or otherwise); or
----------
(1) Replaced by Fourth Amendment (6/11/96) - Page 2
8.1(c) Failure of the Company to perform or comply with any
term or
condition applicable to it contained in Sections 6.3, 6.12 and 6.13
or in
any Section of Article 7 of this Agreement; or
8.l(d) Any of the Company's representations or warranties
made or
deemed made herein or in any other Loan Document, or in any
statement or
certificate at any time given by the Company in writing pursuant
hereto or
thereto shall be inaccurate or incomplete in any material respect
on the
date as of which made or deemed made; or(1)
8.1(e) The Company shall default in the performance of or
compliance
with any term contained in this Agreement or any other Loan Document
other
than those referred to above in Subsections 8.1(a), 8.1(c) or
8.1(d) and
such default shall not have been remedied or waived within thirty (30)
days
after the earliest of (i) receipt by the Company of Notice from the
Lender
of such default, (ii) receipt by the Lender of Notice from the
Company of
such default, or (iii) the date the Company should have notified the
Lender
of such default pursuant to Section 6.6(c); or(2)
8.1(f) (1) A court having jurisdiction shall enter a decree or
order
for relief in respect of the Company, any Subsidiary of the Company
or any
Guarantor in an involuntary case under any applicable
bankruptcy,
insolvency or other similar law in respect of the Company, any
Subsidiary
of the Company or any Guarantor now or hereafter in effect, which
decree or
order is not stayed; or a filing of a voluntary case under any
applicable
bankruptcy, insolvency or other similar law in respect of the
Company, any
Subsidiary of the Company or any Guarantor has occurred; or any
other
similar relief shall be granted under any applicable federal or state
law;
or (2) the filing of an involuntary case in respect of the Company,
any
Subsidiary of the Company or any Guarantor under any applicable
bankruptcy,
insolvency or other similar law; or a decree or order of a court
having
jurisdiction for the appointment of a receiver, liquidator,
sequestrator,
trustee, custodian or other officer having similar powers over the
Company,
any Subsidiary of the Company or of any Guarantor, or over all
or a
substantial part of their respective property, shall have been
entered; or
the involuntary appointment of an interim receiver, trustee or
other
custodian of the Company, any Subsidiary of the Company or any
Guarantor
for all or a substantial part of their respective property; or the
issuance
of a warrant of attachment, execution or similar process against
any
substantial part of the property of the Company, any Subsidiary
of the
Company or any Guarantor, and the continuance of any such
events in
Subsection (2) above for sixty (60) days unless dismissed, bonded
off or
discharged; or
8.1(g) The Company, any Subsidiary of the Company or any
Guarantor
shall have an order for relief entered with respect to it or
commence a
voluntary case under any applicable bankruptcy, insolvency or other
similar
law now or hereafter in effect, or shall consent to the entry of an
order
for relief in an involuntary case under any such law, or shall
consent to
the appointment of or taking possession by a receiver, trustee or
other
custodian for all or a substantial part of its property; the making
by the
Company, any Subsidiary of the Company or any Guarantor of any
assignment
for the benefit of creditors; or the inability or failure of the
Company,
any Subsidiary of the Company or any Guarantor, or the admission
by the
Company, any Subsidiary of the Company or any Guarantor in writing
of its
inability, to pay its debts as such debts become due; or
8.1(h) Failure of the Company to perform any contractual
obligations
which it may have to repurchase Mortgage Loans, if such obligations
in the
aggregate exceed One Million Dollars ($l,000,000); or
8.1(i) Any money judgment, writ or warrant of attachment, or
similar
process involving in any case an amount in excess of Twenty-Five
Thousand
Dollars ($25,000) shall be entered or filed against the Company or
any of
its Subsidiaries or any of their respective assets and shall
remain
undischarged, unvacated, unhanded or unstayed for a period of thirty
(30)
days or in any event later than five (5) days prior to the date
of any
proposed sale thereunder; or
8.1(j) Any order, judgment or decree shall be entered against
the
Company decreeing the dissolution or split up of the Company and such
order
shall remain undischarged or unstayed for a period in excess of twenty
(20)
days; or
8.1(k) Any Plan maintained by the Company or any of its
Subsidiaries
shall be terminated within the meaning of Title IV of ERISA or a
trustee
shall be appointed by an appropriate United States district
court to
administer any Plan, or the Pension Benefit Guaranty Corporation
(or any
successor thereto) shall institute proceedings to terminate any Plan
or to
appoint a trustee to administer any Plan if as of the date thereof
the
Company's liability or any such Subsidiary's liability (after giving
effect
to the tax consequences thereof) to the Pension Benefit
Guaranty
Corporation (or any successor thereto) for unfunded guaranteed
vested
benefits under the Plan exceeds the then current value of
assets
accumulated in such Plan by more than Twenty-Five Thousand
Dollars
($25,000) (or in the case of a termination involving the Company or
any of
its Subsidiaries as a Substantial employers (as defined in
Section
4001(a)(2) of ERISA) the withdrawing employer's proportionate share of
such
excess shall exceed such amount); or
8.1(l) The Company or any of its Subsidiaries as employer
under a
Multiemployer Plan shall have made a complete or partial withdrawal
from
such Multiemployer Plan and the plan sponsor of such Multiemployer
Plan
shall have notified such withdrawing employer that such employer
has
incurred a withdrawal liability in an annual amount exceeding Twenty-
Five
Thousand Dollars ($25,000); or
8.1(m) The Company or any Guarantor shall purport to disavow
its
obligations hereunder or under any Guaranty, as the case may be, or
shall
contest the validity or enforceability hereof or of any Guaranty;
or the
Lender's security interest on any portion of the Collateral shall
become
unenforceable or otherwise impaired; provided that, subject to the
Lender's
approval, no Event of Default shall occur as a result of such
impairment if
all Advances made against any such Collateral shall be paid in full
within
ten (10) days of the date of such impairment; or
8.1(n) Xxxxx X. Xxxxx and Xxxxx X. Xxxxxxxx shall cease
owning,
directly or indirectly, all of the capital stock of the Company; or
8.1(o) There shall be a material adverse change in the
financial
condition, business or operations of the Company.
8.2. Remedies.
8.2(a) Upon the occurrence of any Event of Default
described in
Sections 8.1(f) or 8.1(g), the Commitments shall be terminated
and the
unpaid principal amount of and accrued interest on the Notes and all
other
Obligations shall automatically become due and payable,
without
presentment, demand or other requirements of any kind, all of
which are
hereby expressly waived by the Company.
8.2(b) Upon the occurrence of any Event of Default, other than
those
described in Sections 8.1(f) and 8.1(g), the Lender may, by Notice
to the
Company, terminate the Commitments and/or declare all Obligations
to be
immediately due and payable, whereupon the same shall forthwith
become due
and payable, together with all accrued interest thereon, and the
obligation
of the Lender to make any Advances shall thereupon terminate.
8.2(c) Upon the occurrence of any Event of Default, the
Lender may
also do any of the following:
(1) Foreclose upon or otherwise enforce its security
interest in
and Lien on the Collateral to secure all payments and
performance of
the Obligations in any manner permitted by law or provided
for
hereunder.
(2) Notify all obligers in respect of Collateral
that the
Collateral has been assigned to the Lender and that all
payments
thereon are to be made directly to the Lender or such other
party an
may be designated by the Lender; settle, compromise, or
release, in
whole or in part, any amounts owing on the Collateral, any
such
obligor or any Investor or any portion of the Collateral, on
terms
acceptable to the Lender; enforce payment and prosecute any
action or
proceeding with respect to any and all Collateral; and where any
such
Collateral is in default, foreclose on and enforce security
interests
in such Collateral by any available judicial procedure or
without
judicial process and sell property acquired as a result of any
such
foreclosure.
(3) Act, or contract with a third party to act, as
servicer or
subservicer of each item of Collateral requiring servicing and
perform
all obligations required in connection with Servicing
Contracts and
Purchase Commitments, such third party's fees to be paid
by the
Company.
(4) Require the Company to assemble the Collateral and/or
books
and records relating thereto and make such available to the
Lender at
a place to be designated by the Lender.
(5) Enter onto property where any Collateral or books and
records
relating thereto are located and take possession thereof
with or
without judicial process.
(6) Prior to the disposition of the Collateral, prepare
it for
disposition in any manner and to the extent the Lender
deems
appropriate.
(7) Exercise all rights and remedies of a secured creditor
under
the Uniform Commercial Code of Minnesota or other applicable
law,
including, but not limited to, selling or otherwise disposing
of the
Collateral, or any part thereof, at one or more public or
private
sales, whether or not such Collateral is present at the place of
sale,
for cash or credit or future delivery, on such xxxxx and in
such
manner as the Lender may determine, including, without
limitation,
sale pursuant to any applicable Purchase Commitment. If
notice is
required under such applicable law, the Lender will give the
Company
not less than ten (10) days' notice of any such public sale or
of the
date after which any private sale may be held. The Company agrees
that
ten (10) days, notice shall be reasonable notice. The Lender
may,
without notice or publication, adjourn any public or private
sale or
cause the same to be adjourned from time to time by
announcement at
the time and place fixed for the sale, and such sale may be
made at
any time or place to which the same may be so adjourned. In
case of
any sale of all or any part of the Collateral on credit or for
future
delivery, the Collateral so sold may be retained by the Lender
until
the selling price is paid by the purchaser thereof, but the
Lender
shall not incur any liability in case of the failure of such
purchaser
to take up and pay for the Collateral so sold and, in case of any
such
failure, such Collateral may again be sold upon like notice.
The
Lender may, however, instead of exercising the power of sale
herein
conferred upon it, proceed by a suit or suits at law or in
equity to
collect all amounts due upon the Collateral or to foreclose the
pledge
of and sell the Collateral or any portion thereof under a
judgment or
decree of a court or courts of competent jurisdiction, or both.
(8) Proceed against the Company on the Notes or against
the
Guarantor under the Guaranty or both.
8.2(d) The Lender shall incur no liability as a result of the
sale or
other disposition of the Collateral, or any part thereof, at any
public or
private sale or disposition. The Company hereby waives (to the
extent
permitted by law) any claims it may have against the Lender
arising by
reason of the fact that the price at which the Collateral may have
been
sold at such private sale was less than the price which might have
been
obtained at a public sale or was less than the aggregate amount
of the
outstanding Advances and the unpaid interest accrued thereon, even
if the
Lender accepts the first offer received and does not offer the
Collateral
to more than one offeree. Any sale of Collateral pursuant to the terms
of a
Purchase Commitment shall be deemed to have been made in a
commercially
reasonable manner.
8.2(e) The Company acknowledges that Mortgage Loans
and
Mortgage-backed Securities are collateral of a type which is
customarily
sold on a recognized market. The Company waives any right it may
have to
prior notice of the sale of any Pledged Mortgage or Pledged Security.
8.2(f) The Company specifically waives and releases (to the
extent
permitted by law) any equity or right of redemption, all
rights of
redemption, stay or appraisal which the Company has or may have
under any
rule of law or statute now existing or hereafter adopted, and any r
ght to
require the Lender to (1) proceed against any Person, (2) proceed
against
or exhaust any of the Collateral or pursue its rights and
remedies as
against the Collateral in any particular order, or (3) pursue any
other
remedy in its power. The Lender shall not be required to take any
steps
necessary to preserve any rights of the Company against
holders of
mortgages prior in lien to the Lien of any Mortgage included
in the
Collateral or to preserve rights against prior parties.
8.2(g) The Lender may, but shall not be obligated to, advance any
sums
or do any act or thing necessary to uphold and enforce the
Lien and
priority of, or the security intended to be afforded by, any
Mortgage
included in the Collateral, including, without limitation,
payment of
delinquent taxes or assessments and insurance premiums. All
advances,
charges, costs and expenses, including reasonable attorneys'
fees and
disbursements, incurred or paid by the Lender in exercising any
right,
power or remedy conferred by this Agreement, or in the enforcement
hereof,
together with interest thereon, at the Default Rate, from the
time of
payment until repaid, shall become a part of the principal
balance
outstanding hereunder and under the Notes.
8.2(h) No failure on the part of the Lender to exercise, and no
delay
in exercising, any right, power or remedy provided hereunder, at law
or in
equity shall operate as a waiver thereof; nor shall any single or
partial
exercise by the Lender of any right, power or remedy provided
hereunder, at
law or in equity preclude any other or further exercise thereof
or the
exercise of any other right, power or remedy. Without intending to
limit
the foregoing, all defenses based on the statute of limitations are
hereby
waived by the Company to the extent permitted by law. The remedies
herein
provided are cumulative and are not exclusive of any remedies
provided at
law or in equity.
8.2(i) The Company acknowledges that the Company and the Credit
Agent
have entered into, and may from time to time hereafter enter
into,
agreements ("Acknowledgment Agreements") with FNMA, FHLMC or any
other
Investor in order to obtain the consent of FMMA, FHLMC or any
other
Investor to the assignment of and security interest granted
in the
Servicing Contracts pursuant to Section 3 hereof, as the same
may be
amended from time to time. The Company further acknowledges
that the
Acknowledgment Agreements may contain certain provisions
concerning the
enforcement by the Credit Agent of the security interest of the
Secured
Parties in the Servicing Contracts subject thereto. The Company,
agrees
that the disposition of its rights in any Servicing Contract
pursuant to
the terms of the applicable Acknowledgment Agreement shall be
deemed
commercially reasonable within the meaning of Section 9-504(3)
of the
Uniform Commercial Code of Minnesota. The Company hereby waives any
claims
it might otherwise have against the Credit Agent or the Credit Agent
or any
Lender as a result of the Credit Agent's compliance with the terms
of any
Acknowledgment Agreement.
8.3. Application of Proceeds. The proceeds of any sale,
disposition or
other enforcement of the Lender's security interest in all or any part
of the
Collateral shall be applied by the Lender:
First, to the payment of the costs and expenses of such
sale or
enforcement, including reasonable compensation to the Lenders agents
and
counsel, and all expenses, liabilities and advances made or incurred by
or on
behalf of the Lender in connection therewith;
Second, with respect to the Warehousing Collateral, to the
payment of
interest accrued and unpaid on the Warehousing Promissory Note, with
respect to
the Receivables, to the payment of interest accrued and unpaid on the
Working
Capital Promissory Note, and with respect to the Servicing Collateral,
to the
payment of interest accrued and unpaid on the Term Loan Promissory Note
and,
thereafter, the Working Capital Promissory Note;
Third, with respect to the Warehousing Collateral, to the
payment of
amounts other than principal and interest due under the Warehousing
Promissory
Note or under this Agreement and related to the Warehousing
Commitment or
Warehousing Advances, with respect to the Receivables, to the payment of
amounts
other than principal and interest due under the Working Capital Promissory
Note
or under this Agreement and related to the Working Capital Commitment or
Working
Capital Advances, and with respect to the Servicing Collateral, to the
payment
of any amounts other than principal and interest due under the Term
Loan
Promissory Note or under this Agreement and related to the Term Loan
Commitment
or Term Loan Advances and, thereafter, amounts other than principal and
interest
due under the Working Capital Promissory Note or this Agreement and
related to
the Working Capital Advances or the Working Capital Commitment;
Fourth, with respect to the Warehousing Collateral, to the payment
of the
outstanding principal balance of the Warehousing Promissory Note, with
respect
to the Receivables, to the payment of the outstanding principal balance
of the
Working Capital Promissory Note, and with respect to the Servicing
Collateral,
to the payment of the outstanding principal balance of the Term Loan
Promissory
Note and, thereafter, the outstanding principal balance of the Working
Capital
Promissory Note;
Fifth, to the remaining Obligations of the Company, first to interest,
then
to other amounts (as described in clause Third above), then to principal;
and
Finally, to the payment to the Company, or to its successors or
assigns, or
as a court of competent jurisdiction may direct, of any surplus then
remaining
from such proceeds.
If the proceeds of any such sale, disposition or other enforcement
are
insufficient to cover the costs and expenses of such sale, as aforesaid,
and the
payment in full of all Obligations, the Company shall remain liable
for any
deficiency.
8.4. Lender Appointed Attorney-in-Fact. The Lender is hereby
appointed the
attorney-in-fact of the Company, with full power of substitution,
for the
purpose of carrying out the provisions hereof and taking any
action and
executing any instruments which the Lender may deem necessary or
advisable to
accomplish the purposes hereof, which appointment as attorney-in-
fact is
irrevocable and coupled with an interest. Without limiting the generality
of the
foregoing, the Lender shall have the right and power to give notices
of its
security interest in the Collateral to any Person, either in the name
of the
Company or in its own name, to endorse all Pledged Mortgages or
Pledged
Securities payable to the order of the Company, to change or cause to be
changed
the book-entry registration or name of subscriber or Investor on any
Pledged
Security, or to receive, endorse and collect all checks made payable
to the
order of the Company representing any payment on account of the principal
of or
interest on, or the proceeds of sale of, any of the Pledged Mortgages or
Pledged
Securities and to give full discharge for the same.
8.5. Right of Set-Off. If the Company shall default in the payment
of the
Notes, any interest accrued thereon, or any other sums which may become
payable
hereunder when due, or in the performance of any of its other
obligations or
liabilities under this Agreement, the Lender shall have the right, at any
time
and from time to time, without notice, to set-off and to appropriate or
apply
any and all property or indebtedness of any kind at any time held or
owing by
the Lender to or for the credit or the account of the Company against
and on
account of the Obligations of the Company under the Notes and this
Agreement,
irrespective of whether or not the Lender shall have made any demand
hereunder
and whether or not said Obligations shall have matured.
9. NOTICES.
All notices, demands, consents, requests and other communications
required
or permitted to be given or made hereunder (collectively, Notices')
shall,
except as otherwise expressly provided hereunder, be in writing and
shall be
delivered in person or telecopied or mailed, first class or
delivered by
overnight courier, return receipt requested, postage prepaid, addressed
to the
respective parties hereto at their respective addresses hereinafter set
forth
or, as to any such party, at such other address as may be designated by it
in a
Notice to the other. All Notices shall be conclusively deemed to have
been
properly given or made when duly delivered, in person, by telecopy
or by
overnight courier, or if mailed on the third Business Day after being
deposited
in the mails, addressed as follows:
if to the Company: Monument Mortgage, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx, CFO
Telecopier No.: (000) 000-0000
if to the Lender: Residential Funding Corporation
0000 Xxxxx Xxxxxxxxxx Xxxx.
Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, Vice
President
Telecopier No.: (000) 000-0000
with a copy to: Residential Funding Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Cakes, Esq.
Telecopier No.: (000) 000-0000
10. REIMBURSEMENT OF EXPENSES; INDEMNITY.
The Company shall: (a) pay a documentation production fee of Three
Thousand
Five Hundred Dollars ($3,500) and all out-of-pocket costs and expenses
of the
Lender, including, without limitation, reasonable fees and
disbursements of
counsel (including allocated costs of internal counsel), in connection
with the
preparation, negotiation, documentation, amendment, enforcement
and
administration of this Agreement, the Notes, and other Loan Documents
and the
making and repayment of the Advances and the payment of interest thereon;
(b)
indemnify, pay, and hold harmless the Lender and any holder of the Notes
from
and against, any and all present and future stamp, documentary and other
similar
taxes with respect to the foregoing matters and save the Lender and the
holder
or holders of the Notes harmless from and against any and all liabilities
with
respect to or resulting from any delay or omission to pay such taxes;
(c)
indemnify, pay and hold harmless the Lender and any of its officers,
directors,
employees or agents and any subsequent holder of the Notes (collectively
called
the "Indemnitees") from and against any and all liabilities,
obligations,
losses, damages, penalties, judgments, suits, costs, expenses and
disbursements
of any kind or nature whatsoever (including without limitation, the
reasonable
fees and disbursements of counsel of the Indemnitees (including allocated
costs
of internal counsel) in connection with any investigative,
administrative or
judicial proceeding, whether or not such Indemnitees shall be designated a
party
thereto) which may be imposed upon, incurred by or asserted against
such
Indemnitees in any manner relating to or arising out of this Agreement,
the
Notes, or any other Loan Document or any of the transactions contemplated
hereby
or thereby (the n Indemnified Liabilitiesn); provided, however, that the
Company
shall have no obligation hereunder with respect to Indemnified
Liabilities
arising from the gross negligence or willful misconduct of any such
Indemnitees.
To the extent that the undertaking to indemnify, pay and hold harm' ess
as set
forth in the preceding sentence may be unenforceable because it is
violative of
any law or public policy, the Company shall contribute the maximum portion
which
it is permitted to pay and satisfy under applicable law, to the
payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees
or any
of them. The agreement of the Company contained in this Subsection (c)
shall
survive the expiration or termination of this Agreement and the payment in
full
of the Notes. Attorneys' fees and disbursements incurred in enforcing,
or on
appeal from, a judgment pursuant hereto shall be recoverable separately
from and
in addition to any other amount included in such judgment, and this
clause is
intended to be severable from the other provisions of this Agreement
and to
survive and not be merged into such judgment.
11. FINANCIAL INFORMATION.
All financial statements and reports furnished to the Lender
hereunder
shall be prepared in accordance with GAAP, applied on a basis consistent
with
that applied in preparing the financial statements as at the end of and
for the
last fiscal year ended (except to the extent otherwise required to
conform to
good accounting practice).
12. MISCELLANEOUS.
12.1. Terms Binding Upon Successors Survival of Representations. The
terms
and provisions of this Agreement shall be binding upon and inure to the
benefit
of the parties hereto and their respective successors and assigns.
All
representations, warranties, covenants and agreements herein contained
on the
part of the Company shall survive the making of any Advance and the
execution of
the Notes, and shall be effective so long as the Commitment is
outstanding
hereunder or there remain any Obligations to be paid or performed.
12.2. Assignment. This Agreement may not be assigned by the Company.
This
Agreement and the Notes, along with the Lenders security interest in any
or all
of the Collateral, may, at any time, be transferred or assigned, in whole
or in
part, by the Lender, and any assignee thereof may enforce this Agreement,
the
Notes and such security interest.
12.3. Amendments. Except as otherwise provided in this Agreement,
this
Agreement may not be amended, modified or supplemented unless such
amendment,
modification or supplement is set forth in a writing signed by the
parties
hereto.
12.4. Governing Law. This Agreement and the other Loan Documents
shall be
governed by the laws of the State of Minnesota, without reference
to its
principles of conflicts of laws.
12.5. Participations. The Lender may at any time sell, assign or
grant
participations in, or otherwise transfer to any other Person (a
"Participant"),
all or part of the Obligations. Without limitation of the exclusive right
of the
Lender to collect and enforce such Obligations, the Company agrees that
each
disposition will give rise to a debtor-creditor relationship of the
Company to
the Participant, and the Company authorizes each Participant, upon
the
occurrence of an Event of Default, to proceed directly by right of
setoff,
bankers lien, or otherwise, against any assets of the Company which may
be in
the hands of such Participant. The Company authorizes the Lender to
disclose to
any prospective Participant and any Participant any and all information
in the
Lenders possession concerning the Company, this Agreement and the
Collateral.
12.6. Relationship of the Parties. This Agreement provides for the
making
of Advances by the Lender, in its capacity as a lender, to the Company,
in its
capacity as a borrower, and for the payment of interest, repayment of
principal
by the Company to the Lender, and for the payment of certain fees by the
Company
to the Lender. The relationship between the Lender and the Company is
limited to
that of creditor/secured party, on the one hand, and debtor, on the other
hand.
The provisions herein for compliance with financial covenants and
delivery of
financial statements are intended solely for the benefit of the
Lender to
protect its interests as lender in assuring payments of interest and
repayment
of principal and payment of certain fees, and nothing contained in
this
Agreement shall be construed as permitting or obligating the Lender to act
as a
financial or business advisor or consultant to the Company, as
permitting or
obligating the Lender to control the Company or to conduct the
Company's
operations, as creating any fiduciary obligation on the part of the
Lender to
the Company, or as creating any joint venture, agency, or other
relationship
between the parties hereto other than as explicitly and specifically
stated in
this Agreement. The Company acknowledges that it has had the
opportunity to
obtain the advice of experienced counsel of its own choosing in connection
with
the negotiation and execution of this Agreement and to obtain the advice of
such
counsel with respect to all matters contained herein. The Company
further
acknowledges that it is experienced with respect to financial and credit
matters
and has made its own independent decisions to apply to the Lender for
credit and
to execute and deliver this Agreement.
12.7. Severability. If any provision of this Agreement shall be
declared to
be illegal or unenforceable in any respect, such illegal or
unenforceable
provision shall be and become absolutely null and void and of no force
and
effect as though such provision were not in fact set forth herein, but all
other
covenants, terms, conditions and provisions hereof shall nevertheless
continue
to be valid and enforceable.
12.8. Operational Reviews. From time to time upon request, the
Company
shall permit the Lender or its representative access to its premises
and
records, for the purpose of conducting a review of the Company's
general
mortgage business methods, policies, and procedures, auditing loan
files and
reviewing financial and operational aspects of the Company's business.
12.9. Consent to Credit References. The Company hereby consents
to the
disclosure of information regarding the Company and its relationships
with the
Lender to Persons making credit inquiries to the Lender. This
consent is
revocable by the Company at any time upon Notice to the Lender as
provided in
Section 9 hereof.
12.10. Consent to Jurisdiction. The Company hereby agrees that any
action
or proceeding under the Loan Documents, the Notes or any document
delivered
pursuant hereto may be commenced against it in any court of
competent
jurisdiction within the State of Minnesota, by service of process
upon the
Company by first class registered or certified mail, return receipt
requested,
addressed to the Company at its address last known to the Lender. The
Company
agrees that any such suit, action or proceeding arising out of or
relating to
this Agreement or any other such document may be instituted in the
Hennepin
County State District Court or in the United States District Court
for the
District of Minnesota at the option of the Lender; and the Company hereby
waives
any objection to the jurisdiction or venue of any such court with respect
to, or
the convenience of any court as a forum for, any such suit,
action or
proceeding. Nothing herein shall affect the right of the Lender to
accomplish
service of process in any other manner permitted by law or to commence
legal
proceedings or otherwise proceed against the Company in any other
jurisdiction
or court.
12.11. Counterparts. This Agreement may be executed in any
number of
counterparts, each of which shall be deemed an original, but all
Such
counterparts shall together constitute but one and the same instrument.
12.12. Entire Agreement. This Agreement, the Notes and the other
Loan
Documents represent the final agreement among the parties hereto and
thereto
with respect to the subject matter hereof and thereof, and may
not be
contradicted by evidence of prior or contemporaneous oral agreements among
such
parties. There are no oral agreements among the parties with respect
to the
subject matter hereof and thereof.
12.13. WAIVER OF JURY TRIAL. THE COMPANY AND THE LENDER EACH
HEREBY (a)
COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF
RIGHT
BY A JURY, AND (b) WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT
THAT
ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST. THIS WAIVER OF RIGHT TO
TRIAL BY
JURY IS SEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY, BY THE COMPANY
AND THE
LENDER, AND THIS WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH
INSTANCE AND
EACH ISSUE AS TO WHICH THE RIGHT OF A JURY TRIAL WOULD OTHERWISE ACCRUE.
THE
LENDER AND THE COMPANY IS EACH HEREBY AUTHORIZED AND REQUESTED TO SUBMIT
THIS
AGREEMENT TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT MATTER
AND THE
PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF THE FOREGOING
WAIVER OF
THE RIGHT TO JURY TRIAL. FURTHER, THE COMPANY AND THE LENDER EACH
HEREBY
CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE OTHER PARTY, INCLUDING
THE
OTHER PARTY'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO ANY
OF ITS
REPRESENTATIVES OR AGENTS THAT THE OTHER PARTY WILL NOT SEEK TO ENFORCE
THIS
WAIVER OF RIGHT TO JURY TRIAL PROVISION.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be
duly executed as of the date first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
-----------------------------------------
Its: Senior Vice President/CFO
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:
----------------------------------------
Its: Vice President
STATE OF California )
) ss
COUNTY OF Contra Costa )
On March 22, 1995, before me, a Notary Public, personally appeared
Xxxx
Xxxxxxxxx, the Senior Vice President/CFO of MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
---------------------------------------
Notary Public
My Commission Expires:
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On April 19, 1995, before me, a Notary Public, personally
appeared D.
Xxxxxx Xxxxxxx, the Vice President of RESIDENTIAL FUNDING
CORPORATION, a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
---------------------------------------
Notary Public
My Commission Expires:
(SEAL)
EXHIBIT "A"
ARTICLES OF INCORPORATION
EXHIBIT "B"
BY- LAWS
EXHIBIT "C"
CERTIFICATES OF GOOD STANDING
EXHIBIT "D"
CERTIFICATE OF THE FRANCHISE TAX BOARD
EXHIBIT "E"
CERTIFICATE AS TO INCUMBENCY
TO: RESIDENTIAL FUNDING CORPORATION
I hereby certify to you that I am the duly elected and qualified
Secretary
of MONUMENT MORTGAGE, INC., a California corporation ("Company") and
that, as
such, I am authorized to execute this Certificate on behalf of the
Company. I
further certify that the persons named below are duly elected,
qualified and
acting officers of the Company, holding on the date hereof the respective
titles
set forth opposite their respective names, and that the respective
signatures
get forth opposite their names are their true and genuine signatures:
Name Title Signature
Xxxxx X. Xxxxxxxx Executive Vice Pres. -------------------
----
Xxxxx X. Xxxxx President -------------------
----
Xxxx Xxxxxxxxx Chief Financial Officer -------------------
----
Sr. Vice Pres.
Xxx Xxxxxx Xx. Vice Pres. -------------------
----
Xxxxxx Xxxx Xx. Vice Pres. -------------------
----
Xxxxx Xxxxxx Secretary -------------------
----
Xxxxxxxx Xxxxxxx Asst. Sec. -------------------
----
Xxxxxx Xxxxxxxx Asst. Sec. -------------------
----
Xxxx Xxxxx Asst. Sec. -------------------
----
Xxxxxxxx X. Xxxxxxx Asst. Sec. -------------------
----
Xxxxxx X. Xxxxxx Asst. Sec. -------------------
----
Xxxxxxx X. Bally Asst. Sec. -------------------
----
You may conclusively rely on this Certificate until formally advised
by a
like Certificate of any changes herein.
IN WITNESS WHEREOF, I have hereunto executed this Certificate on
this 3rd
day of April, 1995.
-----------------------------------------
Secretary
EXHIBIT A-
1(1)
WAREHOUSING PROMISSORY NOTE
$10,000,000 Date: March __, 1995
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE, INC., a
California
corporation, (herein called the "Company , hereby promises to pay to the
order
of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
Blenders or,
together with its successors and assigns, the Holders) whose principal
place ok
business is 0000 Xxxxxxxxxx Xxxx Xxxx., Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx
00000,
or at such other place as the Holder may designate from time to time,
the
principal sum of Ten Million Dollars ($10,000,000) or so much thereof as
may be
outstanding from time to time pursuant to the Warehousing Credit and
Security
Agreement described below, and to pay interest on said principal sum or
such
part thereof as shall remain unpaid from time to time, from the date of
each
Advance until repaid in full, and all other fees and charges due
under the
Agreement, at the rate and at the times set forth in the Agreement. All
payments
hereunder shall be made in lawful money of the United States and in
immediately
available funds.
This Note is given to evidence an actual warehouse facility in the
above
amount and is the Warehousing Promissory Note referred to in that
certain
Warehousing Credit and Security Agreement (the "Agreement") dated the
date
hereof between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note may be prepaid in whole or in part at any time without
premium or
penalty.
Should this Note be placed in the hands of attorneys for collection,
the
Company agrees to pay, in addition to principal and interest, fees and
charges
due under the Agreement, any and all costs of collecting this Note,
including
reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
----------
(1) Replaced by Exhibit A-1, Third Amendment (2/29/96)
This Note shall be construed and enforced in accordance with the
laws of
the State of Minnesota, without reference to ids principles of conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of the
day and
year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
-----------------------------------------
Its:
-----------------------------------------
STATE OF California )
) ss
COUNTY OF Contra Costa )
On ______________________, before me, a Notary Public, personally
appeared
__________________, the ________________________ of MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
----------------------------------------
-
Notary Public
My Commission Expires:
(SEAL)
EXHIBIT A-2(1)
SUBLIMIT PROMISSORY NOTE
$6,000,000 Date: March ____,
1995
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE, INC., a
California
corporation, (herein called the "Compaq), hereby promises to pay to the
order of
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender"
or,
together with Arts successors and assigns, the "Holder") whose
principal
place/of business in 0000 Xxxxxxxxxx Xxxx Xxxx., Xxxxx 000,
Xxxxxxxxxxx,
Xxxxxxxxx 00000, or at such other place as the Holder may designate from
time to
time, the principal sum of Six Million Dollars ($6,000,000) or so much
thereof
as may be outstanding from time/to time pursuant to the Warehousing
Credit and
Security Agreement/described below, and to pay interest on said principal
sum or
such part thereof as shall remain unpaid from time to time, from the
date of
each Advance until repaid in full, and all other fees find charges due
under the
Agreement, at the rate and at the times set forth in the Agreement. All
payments
hereunder shall be made id lawful money of the United States and in
immediately
available funds.
This Note is given to evidence An actual warehouse facility in the
above
amount and is the Sublimit Promissory Note referred to in that
certain
Warehousing Credit and Security Agreement (the Agreement n ) dated the
date
hereof between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which/is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note may be prepaid in whole or in part at any time without
premium or
penalty.
Should this Note be placed in the hands of attorneys for collection,
the
Company agrees to pay, in addition to principal and interest, fees and
charges
due under the Agreement, any and all costs of collecting this Note,
including
reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
----------
(1) Replaced by Third Amendment (2/29/96) - Exhibit A-2.
This Note shall be construed and enforced in accordance wi the laws
of the
State of Minnesota, without reference to Arts principles of conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Node as of the
day and
year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
-------------------------------------------
-
Its:
-------------------------------------------
-
STATE OF California )
) ss
COUNTY OF Contra Costa )
On , before me, a Notary Public, personally appeared , the of
MONUMENT
MORTGAGE, INC., a California corporation, personally known to me (or
proved to
me on the basis of satisfactory evidence) to be the person whose
name is
subscribed to the within instrument and acknowledged to me that he/she
executed
the same in his/her authorized capacity, and that by his/her signature
on the
instrument the person, or the entity upon behalf of which the person
acted,
executed the instrument.
WITNESS my hand and official seal.
--------------------------------------------
Notary Public
My Commission Expires:
(SEAL)
EXHIBIT A-
3(1)
WORKING CAPITAL PROMISSORY NOTE
$1,000,000 Date: March ___,
1995
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE, INC., a
California
corporation, (herein called the Company), hereby promises to pay to the
order of
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the Blenders
or,
together with its successors and assigns, the "Holder") whose principal
placer
of business is 0000 Xxxxxxxxxx Xxxx Xxxx., Xxxxx 000, Xxxxxxxxxxx,
Xxxxxxxxx
00000, or at such other place as the Holder may Designate from time to
time, the
principal sum of One Million Dollars ($1,000,000) or so much thereof as
may be
outstanding from time to time pursuant to the Warehousing Credit and
Security
Agreement described below, and to pay interest on said principal sum or
such
part thereof as shall remain unpaid from time to time, from the date of
each
Advance until repaid in full, and all other fees, and charges due
under the
Agreement, at the rate and at the times set forth in the Agreement. All
payments
hereunder shall be made in lawful money of the United States and in
immediately
available funds.
This Note is given to evidence an actual working capital facility
in the
above amount and is the Working Capital Promissory Note referred to in
that
certain Warehousing Credit and Security Agreement (the Agreement n )
dated the
date hereof between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and isle entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note may be prepaid in whole or in part at any time without
premium or
penalty.
Should this Note be placed in the hands of attorneys for collection,
the
Company agrees to pay, in addition to principal and interest, fees and
charges
due under the Agreement, any and all costs of collecting this Note,
including
reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
----------
(1) Replaced by Third Amendment (2/29/96) - Exhibit A-3.
This Note shall be construed and enforced in accordance with the
laws of
the State of Minnesota, without reference to its principles of conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of the
day and
year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
----------------------------------------
Its:
----------------------------------------
STATE OF California )
) ss
COUNTY OF Contra Costa )
On _________________, before me, a Notary Public, personally
appeared
______________________ , the of _____________________ MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
----------------------------------------
Notary Public
My Commission Expires
(SEAL)
EXHIBIT A-4
TERM LOAN PROMISSORY NOTE
$1,000,000 Date: March ___,
1995
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE, INC., a
California
corporation, (herein called the "Company"), hereby promises to pay to the
order
of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender" or,
together with its successors and assigns, the "Holder") whose principal
place of
business is 0000 Xxxxxxxxxx Xxxx Xxxx., Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx
00000,
or at such other place as the Holder may designate from time to time,
the
principal sum of One Million Dollars ($1,000,000) or so much thereof as
may be
outstanding from time to time pursuant to the Warehousing Credit and
Security
Agreement described below, and to pay interest on said principal sum or
such
part thereof as shall remain unpaid from time to time, from the date of
each
Advance until repaid in full, and all other fees and charges due
under the
Agreement, at the rate and at the times set forth in the Agreement. All
payments
hereunder shall be made in lawful money of the United States and in
immediately
available funds.
This Note is given to evidence an actual term loan facility in the
above
amount and is the Working Capital Promissory Note referred to in that
certain
Warehousing Credit and Security Agreement (the "Agreement") dated the
date
hereof between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note may be prepaid in whole or in part at any time without
premium or
penalty.
Should this Note be placed in the hands of attorneys for collection,
the
Company agrees to pay, in addition to principal and interest, fees and
charges
due under the Agreement, any and all costs of collecting this Note,
including
reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws of
the State of Minnesota, without reference to its principles of conflicts of
law.
IN WITLESS WHEREOF, the Company has executed this Note as of the
day and
year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
-----------------------------------------
Its:
-----------------------------------------
STATE OF California )
) ss
COUNTY OF Contra Costa )
On ___________________, before me, a Notary Public, personally
appeared
___________________________, the __________________of MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
----------------------------------------
--
Notary Public
My Commission Expires:
(SEAL)
EXHIBIT B-1
GUARANTY
THIS GUARANTY, made and entered into as of 02nd day of Larch 1995, by
XXXXX
X. XXXXX (the "Guarantors), to RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lenders), having its principal office at 0000 Xxxxxxxxxx
Xxxx
Xxxx., Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000.
RECITALS
A. MONUMENT MORTGAGE, INC., a California corporation (the
"Company"), and
the Lender have agreed that the Lender will extend (i) a
warehouse
facility in the principal amount of Ten Million Dollars
($10,000,000),
(ii) a term loan facility in the principal amount of One
Million
Dollars ($1,000,000), and (iii) a working capital facility
in the
principal amount of One Million Dollars ($1,000,000), to the
Company
(collectively, the "Loans), to finance the making and
purchasing of
Mortgage Loans.
B. The Loan is evidenced by a Warehousing Promissory Note, a
Working
Capital Promissory Note and a Term Loan Promissory Note dated of
even
date herewith from the Company to the Lender, as the same
may be
amended, supplemented or otherwise modified from time to
time,
including any other instruments executed and delivered in
renewal,
extension, rearrangement or otherwise in replacement of
such
Promissory Notes (the "Notes") and by a Warehousing Credit
and
Security Agreement of even date herewith, as the same may be
amended,
supplemented or otherwise modified from time to time,
including any
other instruments executed and delivered in renewal,
extension,
rearrangement or otherwise in replacement of such agreement
(the
"Agreement").
C. The Guarantor is a shareholder and the Executive Vice President
of the
Company and will derive benefit from the Loan.
D. As a condition to making the Loan, the Lender has required
that the
Guarantor execute and deliver this Guaranty. In order to
induce the
Lender to make Warehousing Advances, Term Loan Advances and
Working
Capital Advances under the Agreement, and to accept the Notes
and the
Agreement, the Guarantor has agreed to give this Guaranty.
E. The Lender has refused to make Warehousing Advances, Working
Capital
Advances and Term Loan Advances under the Agreement unless
this
Guaranty is executed by the Guarantor and delivered to Lender.
AGREEMENT
NOW, THEREFORE, in consideration of the recitals and other
good and
valuable consideration, the receipt and sufficiency of which is
hereby
acknowledged, the Guarantor hereby covenants and agrees with the
Lender as
follows:
1. Unless otherwise defined herein, all capitalized terms used herein
shall
have the meanings ascribed to such terms in the Agreement.
2. The Guarantor hereby irrevocably, unconditionally and
absolutely
guarantees to the Lender the due and prompt payment, and not just
the
collectibility, of the principal of, and interest, fees and late charges
and all
other indebtedness, if any, on the Notes when due, whether at
maturity, by
acceleration or otherwise all at the times and places and at the rates
described
in, and otherwise according to the terms of the Notes and the Agreement,
whether
now existing or hereafter created or arising.
3. The Guarantor further hereby irrevocably, unconditionally and
absolutely
guarantees to the Lender the due and prompt performance by the Company
of all
duties, agreements and obligations of the Company contained in the Notes
and the
Agreement, and the due and prompt payment of all costs and expenses
incurred,
including, without limitation, attorneys' fees, court costs and all
other
litigation expenses (including but not limited to expert witness fees,
exhibit
preparation, and courier, postage, communication and document copying
expenses),
in enforcing the payment and performance of the Notes and the Agreement and
this
Guaranty (the payment and performance of the items set forth in Paragraphs
2 and
3 of this Guaranty are collectively referred to as the "Guaranteed Debt").
4. For the purposes of this Guaranty and notwithstanding anything
to the
contrary contained herein or in any of the Loan Documents, the
Guarantor's
liability for payment of the Guaranteed Debt shall be limited to the sum
of (a)
Five Million Dollars ($5,000,000), (b) interest on such amount from the
date
demanded until the date paid at the highest rate applicable to any
of the
Guaranteed Obligations under the Agreement, and (c) all costs and
expenses
incurred by the Lender (including reasonable attorneys' fees) in enforcing
this
Guaranty, which amount may be comprised of any portion of the Guaranteed
Debt,
to be determined at the sole discretion of the Lender.
5. In the event the Company shall at any time fail to pay the
Lender any
principal of or interest on or other sums constituting any Guaranteed Debt
when
due, whether by acceleration or otherwise, the Guarantor promises to pay
such
amount to the Lender forthwith, together with all collection costs and
expenses,
including, without limitation, attorneys' fees, court costs and all
other
litigation expenses (including but not limited to expert witness fees,
exhibit
preparation, and courier, postage, communication and document
copying
expresses). Any sum required to be paid by the Guarantor to the Lender
pursuant
to this Guaranty shall bear interest from the date such sum becomes due
until
paid at a per annum rate equal to the Default Rate.
6. The Guarantor hereby authorizes the Lender, following the
occurrence of
an Event of Default, without notice or demand, to apply any property,
balances,
credits, accounts or moneys of the Guarantor then in the possession of
Lender,
or standing to the credit of the Guarantor, to the payment of such
Guaranteed
Debt.
7. The Guarantor does hereby (a) agree to any modifications of any
terms or
conditions of any Guaranteed Debt and/or to any extensions or renewals of
time
of payment or performance by the Company; (b) agree that it shall
not be
necessary for the Lender to resort to legal remedies against the Company
before
proceeding hereunder, nor to take any action against any other Person
obligated
(an "Obligor") for payment or performance of the Guaranteed Debt or
against any
collateral for the Guaranteed Debt before proceeding against the Guarantor;
(c)
agree that no release of the Company or any other guarantor or Obligor,
or of
any collateral for the Guaranteed Debt, whether by operation of law or
by any
act of the Lender, with or without notice to the Guarantor, shall
release the
Guarantor; and (d) waive notice of demand, dishonor, notice of
dishonor,
protest, and notice of protest and waive, to the extent permitted by
law, all
benefit of valuation, appraisement, and exemptions under the laws of the
State
of Minnesota or any other state or territory of the United States.
8. The obligations of the Guarantor hereunder shall be primary,
absolute
and unconditional, and shall remain in full force and effect without
regard to,
and shall not be impaired or affected by: (a) the genuineness,
validity,
regularity or enforceability of, or any amendment or change in the
Agreement or
the Notes, or any change in or extension of the manner, place or
terms of
payment of, all or any portion of the Guaranteed Debt; (b) the taking or
failure
to take any action to enforce the Agreement or the Notes, or the
exercise or
failure to exercise any remedy, power or privilege contained
therein or
available at law or otherwise, or the waiver by the Lender of any
provisions of
the Agreement or the Notes; (c) any impairment, modification, change,
release or
limitation in any manner of the liability of the Company or its
estate in
bankruptcy, or of any remedy for the enforcement of the Company's
liability,
resulting from the operation of any present or future provision
of the
bankruptcy laws or any other statute or regulation, or the
dissolution,
bankruptcy, insolvency, or reorganization of the Company; (d) the
merger or
consolidation of the Company, or any sale or transfer by the Company of
all or
part of its assets or property; (e) any claim the Guarantor may have
against any
other Obligor, including any claim of contribution; (f) the release, in
whole or
in part, of any other guarantor (if more than one), the Company or any
other
Obligor; (g) any other action or circumstance which (with or without
notice to
or knowledge of the Guarantor) may or might in any manner or to any extent
vary
the risks of the Guarantor hereunder or otherwise constitute a
legal or
equitable discharge or defense, it being understood and agreed by the
Guarantor
that the obligations under this Guaranty shall not be discharged except
by the
full payment and performance of the Guaranteed Debt.
9. The Lender shall have the right to determine how, when and
what
application of payments and credits, if any, whether derived from the
Company or
from any other source, shall be made on the Guaranteed Debt and any
other
indebtedness owed by the Company and/or any other Obligor to the Lender.
10. The obligations of the Guarantor hereunder shall continue
to be
effective, or be automatically reinstated, as the case may be, if at any
time
the performance or the payment, as the case may be, in whole or in part,
of any
of the Guaranteed Debt is rescinded or must otherwise be restored or
returned by
the Lender (as a preference, fraudulent conveyance or otherwise)
upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of
the
Company, the Guarantor or any other person or upon or as a result
of the
appointment of a custodian, receiver, trustee or other officer with
similar
powers with respect to the Company, the Guarantor or any other person,
or any
substantial part of its property, or otherwise, all as though such
payments had
not been made. If an Event of Default shall at any time have occurred
and be
continuing or shall exist and declaration of default or acceleration
under or
with respect to this Guaranty or any Guaranteed Debt shall at such
time be
prevented by reason of the pendency against the Guarantor or the Company
or any
other Person of a case or proceeding under a bankruptcy or insolvency
law, the
Guarantor agrees that, for purposes of this Guaranty and its
obligations
hereunder, this Guaranty and such obligations shall be deemed to have
been
declared in default or accelerated with the same effect as if this
Guaranty and
such obligations had been declared in default and accelerated in accordance
with
their respective terms and the Guarantor shall forthwith perform or pay,
as the
case may be, as required hereunder in accordance with the terms
hereunder
without further notice or demand.
11. The Guarantor hereby irrevocably waives any claim or other rights
that
he may now or hereafter acquire against the Company that arises
from the
existence, payment, performance or enforcement of the Guarantors
obligations
hereunder, including any right of subrogation, reimbursement,
exoneration or
indemnification, any right to participate in any claim or remedy of the
Lender
against the Company or any collateral that the Lender now has or
hereafter
acquires, whether or not such claim, remedy or right arises in equity or
under
contract, statute or common law, including the right to take or receive
from the
Company directly or indirectly, in cash or other property or by set-off
or in
any manner, payment or security on account of such claim or other rights,
until
the Guaranteed Debt shall have been paid and performed in full. If any
amount
shall be paid to the Guarantor in violation of the preceding sentence,
such
amount shall be deemed to have been paid to the Guarantor for the
benefit of,
and held in trust for, the Lender and shall forthwith be paid to the
Lender to
be credited and applied to the Guaranteed Debt, whether matured or
unmatured.
The Guarantor hereby specifically acknowledges that any subrogation rights
which
he may have against the Company or any collateral that the Lender now
has or
hereafter acquires may be destroyed by a nonjudicial foreclosure of
the
collateral. This may give the Guarantor a defense to a deficiency
judgment
against the Guarantor. The Guarantor hereby irrevocably waives such
defense. The
Guarantor acknowledges that he will receive direct and indirect benefits
from
the arrangements contemplated by the Agreement and the Notes and
that the
waivers set forth in this Section are knowingly made in contemplation of
such
benefits.
12. The Guarantor waives any and all benefits available to
sureties and
creditors which might otherwise be available to the Guarantor under
Section
2809, 2810, 2819, 2822, 2839, 2845, 2849, 2850, 2899 and 3433 of the
California
Civil Code, as amended or recodified from time to time, and the benefit
of any
statute of limitations affecting the liability of the Guarantor hereunder
or the
enforcement hereof, including, without limitation any rights arising
under
Section 359.5 of the California Code of Civil Procedure, as
amended or
recodified from time to time. Additionally, the Guarantor waives the
right to
require the Lender to comply with the provisions of Section 9504
of the
California Commercial Code, as amended or recodified from time to time.
13. No postponement or delay on the part of the Lender in the
enforcement
of any right hereunder shall constitute a waiver of such right and all
rights of
the Lender hereunder shall be cumulative and not alternative and shall
be in
addition to any other rights granted to the Lender in any other agreement
or by
law.
14. If any provision hereof shall be or shall be declared to be
illegal or
unenforceable in any respect, such illegal or unenforceable provision
shall be
and become absolutely null and void and of no force and effect as though
such
provision were not in fact set forth herein, but all other covenants,
terms,
conditions and provisions hereof shall nevertheless continue to be
valid and
enforceable and this Guaranty shall be so construed.
15. This Guaranty shall be governed in all respects by the laws
of the
State of Minnesota, other than its principles of conflicts of law, and
shall be
binding upon and shall inure to the benefit of the parties hereto and
their
respective heirs, executors, administrators, personal
representatives,
successors and assigns.
16. The Guarantor hereby agrees that any action or proceeding under
this
Guaranty may be commenced against the Guarantor in any court of
competent
jurisdiction within the State of Minnesota, by service of process
upon the
Guarantor by first class registered or certified mail, return receipt
requested,
addressed to the Guarantor at the Guarantor's address last known to the
Lender.
The Guarantor agrees that any such suit, action or proceeding arising out
of or
relating to this Guaranty may be instituted in the District Court of
Hennepin
County, Minnesota or in the United States District Court for the
District of
Minnesota, at the option of the Lender; and the Guarantor hereby
waives any
objection to the jurisdiction or venue of any such court with respect to,
or the
convenience of any such court as a forum for, any such suit,
action or
proceeding. Nothing herein shall affect the right of the Lender to
accomplish
service of process in any other manner permitted by law or to commence
legal
proceedings or otherwise proceed against the Guarantor in any other
jurisdiction
or court.
17. The Guarantor hereby represents and warrants to the Lender as
follows:
(a) Financial Statements. All financial statements and data
which
have heretofore been given to the Lender with respect
to the
Guarantor fairly and accurately represent the financial
condition
of the Guarantor as of the date hereof, and, since the
date
thereof, there has been no material adverse change
in the
financial condition of the Guarantor. The Guarantor
shall
promptly deliver to the Lender, or to the Company in time
for the
Company to deliver the same to the Lender, all
financial
statements of the Guarantor required by the Agreement.
(b) Address. The address of the Guarantor as specified below is
true
and correct and until the Lender shall have actually
received a
written notice specifying a change of address and
specifically
requesting that notices be issued to such changed address,
the
Lender may rely on the address stated as being accurate.
(c) No Default. The Guarantor is not in default with respect
to any
order, writ, injunction, decree or demand of any court or
other
governmental authority, in the payment of any material
debt for
borrowed money or under any material agreement
evidencing or
securing any such debt.
(d) Solvent. The Guarantor is now solvent, and no
bankruptcy or
insolvency proceedings are pending or to the best of
the
Guarantor's knowledge contemplated by or against the
Guarantor.
(e) Relationship to the Company. The value of the
consideration
received and to be received by the Guarantor is reasonably
worth
at least as much as the liability and obligation of the
Guarantor
incurred or arising under this Guaranty. The Guarantor
has had
full and complete access to the Agreement and the Notes
and all
other loan documents relating to the Obligations and
the
Guaranteed Debt, has reviewed them and is fully aware
of the
meaning and effect of their contents. The Guarantor is
fully
informed of all circumstances which bear upon the
risks of
executing this Guaranty and which a diligent inquiry
would
reveal. The Guarantor has adequate means to obtain
from the
Company on a continuing basis information concerning
the
Company's financial condition, and is not depending on the
Lender
to provide such information, now or in the future. The
Guarantor
agrees that the Lender shall not have any obligation to
advise or
notify the Guarantor or to provide the Guarantor with any
data or
information. The execution and delivery of this Guaranty
is not
given in consideration of (and the Lender has not in
any way
implied that the execution of this Guaranty is
given in
consideration of) the Lenders making, extending or
modifying any
loan to the Guarantor or to any other financial
accommodation to
or for the Guarantor.
(f) Litigation. There is not now pending against or affecting
the
Guarantor, nor to the knowledge of the Guarantor is
there
threatened, any action, suit or proceeding at law or in
equity or
by or before any administrative agency that, if
adversely
determined, would materially impair or affect the
financial
condition of the Guarantor.
(g) Taxes. The Guarantor has filed all federal, state,
provincial,
county, municipal and other income tax returns required to
have
been filed by the Guarantor and has paid all taxes that
have
become due pursuant to such returns or pursuant to
any
assessments received by the Guarantor, and the Guarantor
does not
know of any basis for any material additional assessment
against
it in respect of such taxes.
18. The promises and agreements herein and in any other guaranties
of the
Agreement and the Notes shall be construed to be and are hereby declared
to be
joint and several in each and every particular and shall be fully binding
upon
and enforceable against any or all of such parties or persons
guaranteeing the
Agreement and the Notes herein or in a separate guaranty, and neither the
death
nor the release of any person or party to this Guaranty or any other
guaranties
of the Agreement and the Notes shall affect or release the joint and
several
liability of any other person or party to this Guaranty or any other
guaranties
of the Agreement and the Notes.
19. No amendment or waiver of any provision of this Guaranty nor
consent to
any departure by the Guarantor therefrom shall in any event be effective
unless
the same shall be in writing and signed by the Lender, and then such
waiver or
consent shall be effective only in the specific instance and for the
specific
purpose for which given. Nor notice to or demand on the Guarantor shall
in any
case entitle it to any other or further notice or demand in similar or
other
circumstances.
20. All notices that may be required or otherwise provided
for or
contemplated under the terms of this Guaranty for any party to serve
upon or
give to any other shall, whether or not so state, be in writing, and if
not so
in writing shall not be deemed to have been given, and be either
personally
served, sent by reputable overnight courier service, or sent with return
receipt
requested by registered or certified mail with postage (including
registration
or certification charges) prepaid, sent to the following address:
(a) If to the Guarantor, addressed to the address
indicated
immediately following the Guarantors signature; and
(b) If to the Lender, addressed to the Lender at its address at
0000
Xxxxx Xxxxxxxxxx Xxxx., Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxxx
00000,
Attention: Xxxxxx Xxxxxxx.
Such addresses may be changed from time to time by written notice to the
other
parties given in the same manner. Any matter so served upon or sent
to the
Guarantor or the Lender in the manner aforesaid shall be deemed
sufficiently
given for all purposes hereunder (i) upon personal delivery, if
personally
delivered, (ii) on the date following delivery to the courier service, if
sent
by courier service, (iii) upon electronic confirmation of receipt, if
sent by
telecopier, and (iv) on the date three (3) days following the date the
same was
deposited in a United States Post Office, if sent by registered or
certified
mail, except that notices of changes of address shall not be effective
until
actual receipt.
21. Any indebtedness of the Company now or hereafter held by the
Guarantor
is hereby subordinated to the indebtedness of the Company to the Lender,
and
such indebtedness of the Company to the Guarantor shall, if the
Lender so
requests, be collected, enforced and received by the Guarantor as
trustee for
the Lender and be paid over to the Lender on account of the indebtedness
of the
Company to the Lender, but without reducing or limiting in any
manner the
liability of the Guarantor under the other provisions of the Guaranty.
The
Guarantor acknowledges that, with respect to the indebtedness
guaranteed
hereunder, the Guarantor has irrevocably waived all rights to
subrogation,
reimbursement, and/or indemnification against the Company.
22. This Guaranty is intended as a final expression of this
agreement of
guaranty and is intended also as a complete and exclusive statement of the
terms
of this agreement. No course of prior dealings between the Guarantor
and the
Lender, no usage of the trade, and no parole or extrinsic evidence
of any
nature, shall be used or be relevant to supplement, explain,
contradict or
modify the terms and/or provisions of this Guaranty.
23. Time is of the essence hereof.
24. THE GUARANTOR, BY HIS EXECUTION AND DELIVERY HEREOF, AND THE
LENDER, BY
ITS ACCEPTANCE HEREOF, HEREBY (i) COVENANTS AND AGREES NOT TO ELECT A
TRIAL BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (ii) WAIVES ANY RIGHT TO
TRIAL
BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST.
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN, KNOWINGLY
AND
VOLUNTARILY, BY THE GUARANTOR AND BY THE LENDER, AND THIS WAIVER IS
INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT
OF A
JURY TRIAL WOULD OTHERWISE ACCRUE. THE LENDER IS HEREBY AUTHORIZED AND
REQUESTED
TO SUBMIT THIS WAIVER TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT
MATTER
AND THE PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF THE
FOREGOING
WAIVER OF THE RIGHT TO TRY TRIAL. FURTHER, THE GUARANTOR HEREBY CERTIFIES
THAT
NO REPRESENTATIVE OR AGENT OF THE LENDER, INCLUDING THE LENDER'S COUNSEL,
HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, TO THE GUARANTOR OR HIS
REPRESENTATIVES OR
AGENTS THAT THE LENDER WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
JURY
TRIAL PROVISION.
25. This Guaranty shall constitute the entire agreement of the
Guarantor
with respect to the subject matter hereof, and no agreement or
understanding
entered into prior to the date hereof with respect to the subject matter
hereof
shall be binding upon the Guarantor unless expressed herein.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty
with the
intent to be legally bound as of the date first above written.
------------------------------------
--
XXXXX X. XXXXX
Address:
------------------------------
---
-----------------------------------
---
Telephone No.:
-------------------------
---
Telecopier No.:
-------------------------
---
STATE OF California )
) ss
COUNTY OF Contra Costa )
On ___________________, before me, a Notary Public, personally
appeared
XXXXX X. XXXXX, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
-----------------------------------
---
Notary Public
My Commission Expires:
(SEAL)
EXHIBIT B-2
GUARANTY
THIS GUARANTY, made and entered into an of 22nd day of March 1995, by
XXXXX
X. XXXXXXXX (the "Guarantor"), to RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lender"), having its principal office at 0000 Xxxxxxxxxx
Xxxx
Xxxx., Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000.
RECITALS
A. MONUMENT MORTGAGE, INC., a California corporation
(the
aCompany.), and the Lender have agreed that the Lender
will
extend (i) a warehouse facility in the principal amount
of Ten
Million Dollars ($10,000,000), (ii) a term loan facility
in the
principal amount of One Million Dollars ($1,000,000), and
(iii) a
working capital facility in the principal amount of One
Million
Dollars ($1,000,000), to the Company (collectively, the
"Loan"),
to finance the making and purchasing of Mortgage Loans.
B. The Loan is evidenced by a Warehousing Promissory Note, a
Working
Capital Promissory Note and a Term Loan Promissory Note
dated of
even date herewith from the Company to the Lender, as the
same
may be amended, supplemented or otherwise modified from
time to
time, including any other instruments executed and
delivered in
renewal, extension, rearrangement or otherwise in
replacement of
such Promissory Notes (the "Notesn) and by a Warehousing
Credit
and Security Agreement of even date herewith, as the same
may be
amended, supplemented or otherwise modified from time to
time,
including any other instruments executed and
delivered in
renewal, extension, rearrangement or otherwise in
replacement of
such agreement (the "Agreement") .
C. The Guarantor is a shareholder and the Executive Vice
President
of the Company and will derive benefit from the Loan.
D. As a condition to making the Loan, the Lender has required
that
the Guarantor execute and deliver this Guaranty. In
order to
induce the Lender to make Warehousing Advances, Term
Loan
Advances and Working Capital Advances under the Agreement,
and to
accept the Notes and the Agreement, the Guarantor has
agreed to
give this Guaranty.
E. The Lender has refused to make Warehousing Advances,
Working
Capital Advances and Term Loan Advances under the
Agreement
unless this Guaranty is executed by the Guarantor and
delivered
to Lender.
[PAGES 2 & 3 ARE MISSING FROM HARD COPY]
of its assets or property; (e) any claim the Guarantor may have
against any
other Obligor, including any claim of contribution; (f) the release, in
whole or
in part, of any other guarantor (if more than one), the Company or any
other
Obligor; (g) any other action or circumstance which (with or without
notice to
or knowledge of the Guarantor) may or might in any manner or to any extent
vary
the risks of the Guarantor hereunder or otherwise constitute a
legal or
equitable discharge or defense, it being understood and agreed by the
Guarantor
that the obligations under this Guaranty shall not be discharged except
by the
full payment and performance of the Guaranteed Debt.
9. The Lender shall have the right to determine how, when and
what
application of payments and credits, if any, whether derived from the
Company or
from any other source, shall be made on the Guaranteed Debt and any
other
indebtedness owed by the Company and/or any other Obligor to the Lender.
10. The obligations of the Guarantor hereunder shall continue
to be
effective, or be automatically reinstated, as the case may be, if at any
time
the performance or the payment, as the case may be, in whole or in part,
of any
of the Guaranteed Debt is rescinded or must otherwise be restored or
returned by
the Lender (an a preference, fraudulent conveyance or otherwise)
upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of
the
Company, the Guarantor or any other person or upon or as a result
of the
appointment of a custodian, receiver, trustee or other officer with
similar
powers with respect to the Company, the Guarantor or any other person,
or any
substantial part of its property, or otherwise, all as though such
payments had
not been made. If an Event of Default shall at any time have occurred
and be
continuing or shall exist and declaration of default or acceleration
under or
with respect to this Guaranty or any Guaranteed Debt shall at such
time be
prevented by reason of the pendency against the Guarantor or the Company
or any
other Person of a case or proceeding under a bankruptcy or insolvency
law, the
Guarantor agrees that, for purposes of this Guaranty and its
obligations
hereunder, this Guaranty and such obligations shall be deemed to have
been
declared in default or accelerated with the same effect as if this
Guaranty and
such obligations had been declared in default and accelerated in accordance
with
their respective terms and the Guarantor shall forthwith perform or pay,
as the
case may be, as required hereunder in accordance with the terms
hereunder
without further notice or demand.
11. The Guarantor hereby irrevocably waives any claim or other rights
that
he may now or hereafter acquire against the Company that arises
from the
existence, payment, performance or enforcement of the Guarantors
obligations
hereunder, including any right of subrogation, reimbursement,
exoneration or
indemnification, any right to participate in any claim or remedy of the
Lender
against the Company or any collateral that the Lender now has or
hereafter
acquires, whether or not such claim, remedy or right arises in equity or
under
contract, statute or common lad, including the right to take or receive
from the
Company directly or indirectly, in cash or other property or by set-off
or in
any manner, payment or security on account of such claim or other rights,
until
the Guaranteed Debt shall have been paid and performed in full. If any
amount
shall be paid to the Guarantor in violation of the preceding sentence,
such
amount shall be deemed to have been paid to the Guarantor for the
benefit of,
and held in trust for, the Lender and shall forthwith be paid to the
Lender to
be credited and applied to the Guaranteed Debt, whether matured or
unmatured.
The Guarantor hereby specifically acknowledges that any subrogation rights
which
he may have against the Company or any collateral that the Lender now
has or
hereafter acquires may be destroyed by a nonjudicial foreclosure of
the
collateral. This may give the Guarantor a defense to a deficiency
judgment
against the Guarantor. The Guarantor hereby irrevocably waives such
defense. The
Guarantor acknowledges that he will receive direct and indirect benefits
from
the arrangements contemplated by the Agreement and the Notes and
that the
waivers set forth in this Section are knowingly made in contemplation of
such
benefits.
12. The Guarantor waives any and all benefits available to
sureties and
creditors which might otherwise be available to the Guarantor under
Section
2809, 2810, 2819, 2822, 2839, 2845, 2849, 2850, 2899 and 3433 of the
California
Civil Code, as amended or remodified from time to time, and the benefit
of any
statute of limitations affecting the liability of the Guarantor hereunder
or the
enforcement hereof, including, without limitation any rights arising
under
Section 359.5 of the California Code of Civil Procedure, as
amended or
recodified from time to time. Additionally, the Guarantor waives the
right to
require the Lender to comply with the provisions of Section 9504
of the
California Commercial Code, as amended or recodified from time to time.
13. No postponement or delay on the part of the Lender in the
enforcement
of any right hereunder shall constitute a waiver of such right and all
rights of
the Lender hereunder shall be cumulative and not alternative and shall
be in
addition to any other rights granted to the Lender in any other agreement
or by
law.
14. If any provision hereof shall be or shall be declared to be
illegal or
unenforceable in any respect, such illegal or unenforceable provision
shall be
and become absolutely null and void and of no force and effect as though
such
provision were not in fact set forth herein, but all other covenants,
terms,
conditions and provisions hereof shall nevertheless continue to be
valid and
enforceable and this Guaranty shall be so construed.
15. This Guaranty shall be governed in all respects by the laws
of the
State of Minnesota, other than its principles of conflicts of law, and
shall be
binding upon and shall inure to the benefit of the parties hereto and
their
respective heirs, executors, administrators, personal
representatives,
successors and assigns.
16. The Guarantor hereby agrees that any action or proceeding under
this
Guaranty may be commenced against the Guarantor in any court of
competent
jurisdiction within the State of Minnesota, by service of process
upon the
Guarantor by first class registered or certified mail, return receipt
requested,
addressed to the Guarantor at the Guarantor's address last known to the
Lender.
The Guarantor agrees that any such suit, action or proceeding arising out
of or
relating to this Guaranty may be instituted in the District Court of
Hennepin
County, Minnesota or in the United States District Court for the
District of
Minnesota, at the option of the Lender; and the Guarantor hereby
waives any
objection to the jurisdiction or venue of any such court with respect to,
or the
convenience of any such court as a forum for, any such suit,
action or
proceeding. Nothing herein shall affect the right of the Lender to
accomplish
service of process in any other manner permitted by law or to commence
legal
proceedings or otherwise proceed against the Guarantor in any other
jurisdiction
or court.
17. The Guarantor hereby represents and warrants to the Lender as
follows:
(a) Financial Statements. All financial statements and data
which
have heretofore been given to the Lender with respect
to the
Guarantor fairly and accurately represent the financial
condition
of the Guarantor as of the date hereof, and, since the
date
thereof, there has been no material adverse change
in the
financial condition of the Guarantor. The Guarantor
shall
promptly deliver to the Lender, or to the Company in time
for the
Company to deliver the same to the Lender, all
financial
statements of the Guarantor required by the Agreement.
(b) Address. The address of the Guarantor as specified below is
true
and correct and until the Lender shall have actually
received a
written notice specifying a change of address and
specifically
requesting that notices be issued to such changed address,
the
Lender may rely on the address stated as being accurate.
(c) No Default. The Guarantor is not in default with respect
to any
order, writ, injunction, decree or demand of any court or
other
governmental authority, in the payment of any material
debt for
borrowed money or under any material agreement
evidencing or
securing any such debt.
(d) Solvent. The Guarantor is now solvent, and no
bankruptcy or
insolvency proceedings are pending or to the best of
the
Guarantor's knowledge contemplated by or against the
Guarantor.
(e) Relationship to the Company. The value of the
consideration
received and to be received by the Guarantor is reasonably
worth
at least as much as the liability and obligation of the
Guarantor
incurred or arising under this Guaranty. The Guarantor
has had
full and complete access to the Agreement and the Notes
and all
other loan documents relating to the Obligations and
the
Guaranteed Debt, has reviewed them and is fully aware
of the
meaning and effect of their contents. The Guarantor is
fully
informed of all circumstances which bear upon the
risks of
executing this Guaranty and which a diligent inquiry
would
reveal. The Guarantor has adequate means to obtain
from the
Company on a continuing basis information concerning
the
Company's financial condition, and is not depending on the
Lender
to provide such information, now or in the future. The
Guarantor
agrees that the Lender shall not have any obligation to
advise or
notify the Guarantor or to provide the Guarantor with any
data or
information. The execution and delivery of this Guaranty
is not
given in consideration of (and the Lender has not in
any way
implied that the execution of this Guaranty is
given in
consideration of) the Lender's making, extending or
modifying any
loan to the Guarantor or to any other financial
accommodation to
or for the Guarantor.
(f) Litigation. There is not now pending against or affecting
the
Guarantor, nor to the knowledge of the Guarantor is
there
threatened, any action, suit or proceeding at law or in
equity or
by or before any administrative agency that, if
adversely
determined, would materially impair or affect the
financial
condition of the Guarantor.
(g) Taxes. The Guarantor has filed all federal, state,
provincial,
county, municipal and other income tax returns required to
have
been filed by the Guarantor and has paid all taxes that
have
become due pursuant to such returns or pursuant to
any
assessments received by the Guarantor, and the Guarantor
does not
know of any basis for any material additional assessment
against
it in respect of such taxes.
18. The promises and agreements herein and in any other guaranties
of the
Agreement and the Notes shall be construed to be and are hereby declared
to be
joint and several in each and every particular and shall be fully binding
upon
and enforceable against any or all of such parties or persons
guaranteeing the
Agreement and the Notes herein or in a separate guaranty, and neither the
death
nor the release of any person or party to this Guaranty or any other
guaranties
of the Agreement and the Notes shall affect or release the joint and
several
liability of any other person or party to this Guaranty or any other
guaranties
of the Agreement and the Notes.
19. No amendment or waiver of any provision of this Guaranty nor
consent to
any departure by the Guarantor therefrom shall in any event be effective
unless
the same shall be in writing and signed by the Lender, and then such
waiver or
consent shall be effective only in the specific instance and for the
specific
purpose for which given. Nor notice to or demand on the Guarantor shall
in any
case entitle it to any other or further notice or demand in similar or
other
circumstances.
20. All notices that may be required or otherwise provided
for or
contemplated under the terms of this Guaranty for any party to serve
upon or
give to any other shall, whether or not so state, be in writing, and if
not so
in writing shall not be deemed to have been given, and be either
personally
served, sent by reputable overnight courier service, or sent with return
receipt
requested by registered or certified mail with postage (including
registration
or certification charges) prepaid, sent to the following address:
(a) If to the Guarantor, addressed to the address
indicated
immediately following the Guarantors signature; and
(b) If to the Lender, addressed to the Lender at its address at
0000
Xxxxx Xxxxxxxxxx Xxxx., Xxxxx 000, Xxxxxx Xxxxx,
Xxxxxxxxxx
00000, Attention: Xxxxxx Xxxxxxx.
Such addresses may be changed from time to time by written notice to the
other
parties given in the same manner. Any matter so served upon or sent
to the
Guarantor or the Lender in the manner aforesaid shall be deemed
sufficiently
given for all purposes hereunder (i) upon personal delivery, if
personally
delivered, (ii) on the date following delivery to the courier service, if
sent
by courier service, (iii) upon electronic confirmation of receipt, if
sent by
telecopier, and (iv) on the date three (3) days following the date the
same was
deposited in a United States Post Office, if sent by registered or
certified
mail, except that notices of changes of address shall not be effective
until
actual receipt.
21. Any indebtedness of the Company now or hereafter held by the
Guarantor
is hereby subordinated to the indebtedness of the Company to the Lender,
and
such indebtedness of the Company to the Guarantor shall, if the
Lender no
requests, be collected, enforced and received by the Guarantor as
trustee for
the Lender and be paid over to the Lender on account of the indebtedness
of the
Company to the Lender, but without reducing or limiting in any
manner the
liability of the Guarantor under the other provisions of the Guaranty.
The
Guarantor acknowledges that, with respect to the indebtedness
guaranteed
hereunder, the Guarantor has irrevocably waived all rights to
subrogation,
reimbursement, and/or indemnification against the Company.
22. This Guaranty is intended as a final expression of this
agreement of
guaranty and is intended also as a complete and exclusive statement of the
terms
of this agreement. No course of prior dealings between the Guarantor
and the
Lender, no usage of the trade, and no parole or extrinsic evidence
of any
nature, shall be used or be relevant to supplement, explain,
contradict or
modify the terms and/or provisions of this Guaranty.
23. Time is of the essence hereof.
24. THE GUARANTOR, BY HIS EXECUTION AND DELIVERY HEREOF, AND THE
LENDER, BY
ITS ACCEPTANCE HEREOF, HEREBY (i) COVENANTS AND AGREES NOT TO ELECT A
TRIAL BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (ii) WAIVES ANY RIGHT TO
TRIAL
BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST.
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN, KNOWINGLY
AND
VOLUNTARILY, BY THE GUARANTOR AND BY THE LENDER, AND THIS WAIVER IS
INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT
OF A
JURY TRIAL WOULD OTHERWISE ACCRUE. THE LENDER IS HEREBY AUTHORIZED AND
REQUESTED
TO SUBMIT THIS WAIVER TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT
MATTER
AND THE PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF THE
FOREGOING
WAIVER OF THE RIGHT TO JURY TRIAL. FURTHER, THE GUARANTOR HEREBY CERTIFIES
THAT
NO REPRESENTATIVE OR AGENT OF THE LENDER, INCLUDING THE LENDER`S COUNSEL,
HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, TO THE GUARANTOR OR HIS
REPRESENTATIVES OR
AGENTS THAT THE LENDER WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
JURY
TRIAL PROVISION.
25. This Guaranty shall constitute the entire agreement of the
Guarantor
with respect to the subject matter hereof, and no agreement or
understanding
entered into prior to the date hereof with respect to the subject matter
hereof
shall be binding upon the Guarantor unless expressed herein.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty
with the
intent to be legally bound as of the date first above written.
----------------------------------------
--
XXXXX X. XXXXXXXX
Address:
-----------------------------------
--
----------------------------------------
--
Telephone No.:
-------------------------
--
Telecopier No.:
-------------------------
--
STATE OF California )
) ss
COUNTY OF Contra Costa )
On __________________, 1995, before me, a Notary Public,
personally
appeared XXXXX X. XXXXXXXX, personally known to me (or proved to me on the
basis
of satisfactory evidence) to be the person whose name is subscribed
to the
within instrument and acknowledged to me that he executed the same
in his
authorized capacity, and that by his signature on the instrument the
person, or
the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
--
Notary Public
My Commission Expires:
(SEAL)
EXHIBIT C-
SF(1)
Mortgage Company: MONUMENT MORTGAGE, INC.
Mortgagor: Loan Number:
------------------------- -------------------------
--
-------------------------
Reviewed By:
-------------------------
--
Address: Warehouse Date:
--------------------------- -------------------------
--
--------------------------- Effective Date:
-------------------------
--
Foreclosure Date:
-------------------------
--
Status: Rejected Loan Type: Conforming
---------- ---------------------
---
Received Nonconforming Alternet
----------- ------- ---
---
Repurchased VA FHA
----------- ----------- -------------
---
Wet Settlement Fixed Term
--------- ------------ -------------
---
3rd Party ARM Type
------------ -------------
--
Originated Balloon Type
--------- ----------- -------------
--
Mortgage Note Amount: Interest Rate:
--------------- ---------------------
--
Mortgage Note Date: Requested Warehouse Amt:
--------------- ------------
--
METHOD OF ADVANCE
( ) Wire Transfer
Amount of Wire: Date of Wire:
Credit Acct. No.. Credit Acct. Name:
ABA No.: Bank Name:
City & State:
Account to Debit:
Ref: Advise: Phone:
REQUIRED DOCUMENTATION
Attached please find the following documents in connection with the
above
request (Please check attached documents below):
Right
( ) Original and one copy of Mortgage Note
( ) Certified copy of Mortgage
( ) *Copy of Investor Purchase Commitment(or satisfactory evidence
thereof)
( ) *Copy of D -1 Settlement Statement or equivalent
(Home Equity Loans and Title I Mortgage Loans only)
( ) *HUD 203(K) Maximum Mortgage Worksheet (203(k) Mortgage Loans
only)
----------
[FN]
(1) Replaced in Third Amendment (2/29/96), Exhibit C-SF.
Left
( ) *Request for Advance (original and one (1) copy)
( ) *Copy of settlement or funding check (if applicable)
( ) Recordable assignment of Mortgage
( ) Certified copies of interim assignments of Mortgage (if
applicable)
( ) *Bailee Pledge Agreement (only required for Wet Settlement
Advance)
Please Note: Items designated with the "*" are required prior to
a Wet
Settlement Advance.
Authorized Signature:
--------------------------------
---------------------------------------------------------------------------
----
FOR RFC INTERNAL USE ONLY
Repetitive Code: Date:
Wire Initiator's Initials: Wire Verifier's Initials:
---------------------------------------------------------------------------
----
EXHIBIT
C-TL
TERM LOAN ADVANCE REQUEST
Date: , 19___
Reference is made to that certain Warehousing Credit and Security
Agreement
between MONUMENT MORTGAGE, INC., a California corporation (the "Company"),
and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lenders),
dated as
of March , 1995 (as the same may be amended, modified, supplemented,
renewed or
restated from time to time, the "Agreement"). All capitalized terms used
herein
and all Section numbers given herein refer to those terms and Sections set
forth
in the Agreement. This Term Loan Advance Request is submitted to the
Lender
pursuant to Section 2.4(a) of the Agreement.
The undersigned hereby requests a Term Loan Advance in the
aggregate
principal amount of $ to be ------------------------ made on ,
19___.
-------------------
The aggregate outstanding principal balances of the Mortgage Loans
serviced
pursuant to FNMA and FHLMC Servicing Contracts included in the
Servicing
Collateral as of the date hereof is $ . The Servicing Collateral Value as
of the
date hereof is $ . The Company represents and warrants that it has no
reason to
believe that such amounts are incorrect. The aggregate principal amounts
of the
Term Loan Advances and the Working Capital Advances outstanding after
giving
effect to the Term Loan Advance requested hereby will not exceed the
Servicing
Collateral Value. The aggregate principal amount of all Term Loan Advances
made
under the Agreement, after giving effect to the Term Loan Advance
requested
hereby will not exceed the Term Loan Commitment.
The representations and warranties of the Company set forth in Section
5 of
the Agreement are true and correct in all material respects on and as
of the
date hereof as if made on and as of such date.
No Event of Default has occurred and is continuing.
Since the Statement Date, there has been no material adverse change
in the
business, financial condition or results of operation of the Company
and its
Subsidiaries, taken as a whole.
MONUMENT MORTGAGE, INC.,
a Colorado corporation
By:
-----------------------------------------
Its:
-----------------------------------------
Title:
-----------------------------------------
EXHIBIT C-
WC
WORKING CAPITAL ADVANCE REQUEST
Date:
Reference is made to that certain Warehousing Credit and Security
Agreement
between MONUMENT MORTGAGE, INC., a California corporation (the
"Company") and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender"),
dated as
of March ___, 1995 (as the same may be amended, modified, supplemented,
renewed
or restated from time to time, the "Agreement"). All capitalized terms
used
herein and all Section numbers given herein refer to those terms and
Sections
set forth in the Agreement. This Working Capital Advance Request is
submitted to
the Lender pursuant to Section 2.6(a) of the Agreement.
The undersigned hereby requests a Working Capital Advance in the
aggregate
principal amount of $_________________ to be made on _______________,
199__.
The aggregate outstanding principal balances of the Mortgage Loans
serviced
pursuant to PNMA and FHLMC Servicing Contracts included in the
Servicing
Collateral as of the date hereof is $________________. The Servicing
Collateral
Value as of the date hereof is $________________. The Company represents
and
warrants that it has no reason to believe that such amounts are incorrect.
The
aggregate principal amounts of the Working Capital Advances and the
Working
Capital Advances outstanding after giving effect to the Term Loan
Advance
requested hereby will not exceed the Servicing Collateral Value. The
aggregate
principal amount of all Working Capital Advances made under the Agreement,
after
giving effect to the Working Capital Advance requested hereby will not
exceed
the Working Capital Commitment.
The representations and warranties of the Company set forth in Section
5 of
the Agreement are true and correct in all material respects on and as
of the
date hereof as if made on and as of such date.
No Event of Default has occurred and is continuing.
Since the Statement Date, there has been no material adverse change
in the
business, financial condition or results of operation of the Company
and its
Subsidiaries, taken as a whole.
MONUMENT MORTGAGE, INC.,
a Colorado corporation
By:
----------------------------------
Its:
----------------------------------
EXHIBIT D-
SF(1)
PROCEDURES AND DOCUMENTATION FOR WAREHOUSING
SINGLE-FAMILY MORTGAGE LOANS
The following procedures and documentation requireme is must be
observed in
all respects by the Company. All documented must be satisfactory to the
Lender
in its sole discretion. Terms used below, which are not otherwise defined,
shall
have the meanings given them in the Agreement. The HUD, FNMA and FHLMC
form
numbers referred to herein are for convenience only and the Company
shall use
the equivalent forms required at the time of delivery of the Mortgage
Loans or
Mortgage-backed Securities. All Requests for Advance and Collateral
Documents,
should be submitted to the Lender in a top tabbed, legal size manila
file
folder, hole-punched and acco-fastened in the order specified in the
Request for
Advance. Each folder should be labelled with the mortgagor name(s), Company
loan
number and Company name. If a Wet Settlement Advance is being requested,
the
Request for Advance and required Collateral Documents should be
submitted in
accordance with the above instructions. The remaining Collateral
Documents
should be submitted with a cover letter identifying the mortgagor
name(s) and
Company loan number.
I. Prior to making a Wet Settle Cant Advance, the Lender must
receive the
following:
(1) Estimate of the amount of the requested Advance one (1)
Business Day
prior to such Advance.
(2) Copy of settlement or funding check issued to the
escrow/title
company, if applicable.
(3) Original Request for Advance against Single-Family Mortgage
Loan,
(Exhibit C-SF) and one (l) copy of same.
(4) Copy of the Purchase Commitment or satisfactory evidence thereof.
(5) Bailee Pledge Agreement (Exhibit M).
(6) A copy of the HUD-1 Settlement Statement or equivalent (Xxxxx
Equity
Mortgage Loans and Title I Mortgage Loans only).
The following must be received by the Lender within five (5) Business
Days of
the date of the Wet Settlement Advance:
----------
(1) Replaced in Third Amendment (2/29/96), Exhibit D-SF.
(7) Original signed Mortgage Note, endorsed by the Company in , blank
with
corresponding interim endorsements, if applicable, and one
copy of
same.
(8) Copy of the Mortgage certified true by the escrow/title company.
(9) Copies of all interim assignments of the Mortgage certified
true by
the escrow/title company (recorded or sent for recordation).
Mortgage
Note must bear corresponding endorsements.
(10) An assignment of the Mortgage to the Lender in recordable
form but
unrecorded.
II. Prior to the making of an Advance (other than a but Settlement
Advance),
the Lender must receive all of the Collateral Documents listed in
Section I
above.
III. The Lender exclusively shall deliver the Mortgage Notes and other
original
Collateral Documents evidencing Pledged Mortgages or Pledged
Securities and
related pool documents to the Investor or pool custodian, unless
otherwise
agreed in writing.
A. The following procedures are to be followed for deliveries of
Pledged
Mortgages:
No later than one (1) Business Day prior to the requested shipment
date and
no later than one (1) Business Day prior to the expiration date of the
purchase
Commitment, the Lender must receive the following:
(1) Signed shipping instructions for the delivery of the Pledged
Mortgages
including the following:
(a) Name and address of the office of the Investor to which the
lean
documents are to be shipped, the desired shipping date
and the
preferred method of delivery;
(b) Instructions for endorsement of the Mortgage Note;
(c) Names of mortgagor(s), Mortgage Note Amounts of Pledged
Mortgages
to be shipped and the Company's loan number; and
(d) Commitment number and expiration date of the Purchase
Commitment.
(2) For deliveries of Pledged Mortgages to FMMA for cash purchase,
the
following additional documents are required:
(a) Copy of Loan Schedule (FNMA Form 1068 or 1069) showing
the
Lender's designated FNMA payee code as / recipient of the
loan
purchase proceeds.
(3) For deliveries of Pledged Mortgages to FHLMC for cash purchase,
the
following additional documents are required:
(a) Original completed Warehouse Lender Release of Security
Interest
(FHLMC Form 996) to be executed by the Lender, designating
the
Lender as the Warehouse Lender and showing the Cash
Collateral
Account designated by the Lender as the receiving
account for
loan purchase proceeds.
(b) Copy of Wire Transfer Authorization for Al Cash
Warehouse
Delivery (FHLMC Form 987), designating the Lender as
the
Warehouse Lender and shoring the Cash Collateral
Account
designated by the Lender as the receiving account for
loan
purchase proceeds.
B. In the event Pledged Mortgages are delivered to a pool custodian,
other
than an Approved Custodian, payment of the related Advance is
required
within two (2) Business Days of shipment.
The following procedures are to be followed for deliveries of Pledged
Mortgages
to Approved Custodian:
No later than one (1) Business Day prior to the requested shipment date
and no
later than one (1) Business Day prior to required delivery date to the
Approved
Custodian, the lender must receive the following:
(1) Signed shipping instructions for the delivery of the Pledged
Mortgages
to the approved Custodian including the following:
(a) Name and address/of the office of the Approved Custodian to
which
the loan documents are to be shipped, the desired shipping
date
and the preferred method of delivery;
(b) Instructions for endorsement of the Mortgage Note;
(c) Names of Mortgagor and Mortgage Note Amounts of Pledged
Mortgages
to be shipped; and
(d) Commitment number and expiration date of the Purchase
Commitment
for the Pledged Securities.
(2) For FNMA Mortgage-backed Securities issuance, the following
additional
documents are required:
(a) Copy of Schedule of Mortgages (FNMA Form 2005 or 2025).
(b) Copy of Delivery Schedule (FNMA Form 2014), instructing
FNMA to
issue the Mortgage-backed Securities in the name of the
Company
with the Lender as pledges and to deliver the Mortgage-
backed
Securities to the Lender's custody account at Chemical
Bank NY
(CHEMICAL NYC/GEOCUST/XX0000000) and bearing the
following
instructions: "These instructions may not be changed
without the
prior written consent of Residential Funding Corporation,
Xxxxxxx
X. Xxxxxx, Vice President or Xxxxxxx Xxxxxxxxx, Assistant
Vice
President."
(3) For FHLMC Mortgage-backed Securities issuance, the
following
additional documents are required:
(a) Copy of Settlement Information and Delivery Authorization
(FHLMC
Form 939), designating ,the Lender as the Warehouse
Lender and
instructing FHLMC to deliver the Mortgage-backed
Securities to
the Lender's custody account at Chemical Tank NY
(CHEMICAL
NYC/GEOCUST/XX0000000).
(b) Original Warehouse Lender Release of Security Interest
(FHLMC
Form 996) to be executed by the Lender, designating the
Lender as
the Warehouse Lender and instructing FHLMC to deliver
the
Mortgage-backed Securities to the Lender's custody
account at
Chemical Bank NY (CHEMICAL NYC/GEOCUST/XX0000000).
(4) For GNMA Mortgage-backed Securities issuance, the following
additional
documents are required:
(a) Signed original Schedule of Mortgages (HUD Form 11706).
(b) Signed original Schedule of Subscribers (HUD Form
11705)
instructing GNMA to issue the Mortgage-backed Securities
in the
name of the Company and designating Chemical Bank as
Agent for
the Lender as the subscriber, using the following
language:
CHEMICAL BANK AS AGENT FOR RESIDENTIAL FUNDING
CORPORATION SEG
ACCT MANUF/CUST/XX0000000). The following instructions must
also
be included on the form: "These instructions may not be
changed
without the prior written consent of Residential
Funding
Corporation, Xxxxxxx X. Xxxxxx, Vice President or
Xxxxxxx
Xxxxxxxxx, Assistant Vice President."
(c) Completed original Release of Security Interest (HUD Form
11711A)
to be executed by the Lender.
(5) No later than two (2) Business Days prior to the Settlement
Date for
the Mortgage-backed Securities, the Lender must receive
signed
Securities Delivery Instructions form attached hereto as Schedule
I.
Upon instruction by the Company, the Lender will complete the
endorsement
of the Mortgage Note and make arrangements for the delivery of the
original
Collateral Documents evidencing Pledged Mortgages or Pledged
Securities and
related original pool documents with the appropriate bailee letter
to the
Investor, Approved Custodian, or other pool custodian. Upon
receipt of
Mortgage-backed Securities, the Lender will cause such Mortgage-
backed
Securities, to be delivered to the Investor which issued the
Purchase
Commitment. Mortgage-backed Securities will be released to the Investor
only
upon payment of the purchase proceeds to the Lender. Cash proceeds of
sales of
Pledged Mortgages and Pledged Securities shall be applied to related
Advances
outstanding under the Commitment. Provided no Default exists, the Lender
shall
return any excess proceeds of the sale of Mortgage Loans or Mortgage-
backed
Securities to the Company, unless otherwise instructed in writing.
EXHIBIT
D-TL
PROCEDURES AND DOCUMENTATION FOR RATING
TERM LOAN DEVICES
The following procedures and documentation requirements must be
observed in
all respects by the Company. All documents must be satisfactory to the
Lender in
its sole discretion. Terms used below, which are not otherwise defined,
shall
have the meanings given them in the Warehousing Credit and Security
Agreement,
as amended, modified or renewed from time to time.
At least five (5) days prior to the date of the requested Advance, the
Lender
must receive the following:
(1) An original Term Loan Advance Request (Exhibit C-TL) signed
by an
authorized officer of the Company.
(2) A summary of the Servicing Contracts to be acquired as follows:
(a) By investor:
(i) Unpaid Principal Balance
(ii) Weighted Average Coupon
(iii) Weighted Average Servicing Fee
(iv) 60 days or more delinquency rate
(v) Foreclosure Rate
(vi) Bankruptcy Rate
(b) Total Geographic Breakdown
(3) A post acquisition pro forma profile of the Company's
Servicing
Portfolio as follows:
(a) By investor:
(i) Unpaid Principal Balance
(ii) Weighted Average Coupon
(iii) Weighted Average Servicing Fee
(iv) 60 days or more delinquency rate
(v) Foreclosure Rate
(vi) Bankruptcy Rate
(b) Total Geographic Breakdown
(4) Copies of the final, executed agreements, documents and
instruments
pursuant to which such Servicing Acquisition will occur
(the
"Acquisition Documents").
(5) Any consents to its security interest in the Acquisition
Documents,
the rights of the company thereunder and the Servicing Contracts
to be
acquired that the Lender, in its discretion, deems
necessary or
appropriate.
(6) Such UCC Financing statements or amendments as the Lender, in its
sole
discretion, may request to perfect or continue the perfection
of its
security interest.
(7) Evidence satisfactory to the Lender that the Company has
received all
consents from and provided all notices to FNMA, FHLMC, GMMA and
other
governmental agencies required for the Company to assume the
Servicing
Contracts to be acquired and to continue its business after
such
Servicing Acquisition.
(8) Such UCC, tax lien and judgment searches in the appropriate
public
records for the seller(s) in such Servicing Acquisition, which
shall
not have disclosed the existence of any prior Lien on the
Servicing
Contracts to be acquired by the Company.
(9) A letter of direction from the Company to the Lender, directing
the
Lender to disburse the proceeds of such Term Loan Advances
and
additional funds to be in the possession of the Funding Bank
directly
to the seller(s) in such Servicing Acquisition, and
evidence
satisfactory to the Lenders that such Term Loan Advances and any
such
additional funds will be sufficient to pay the purchase price in
such
Servicing Acquisition in full.
(10) Such further documents, instruments, opinions, certificates
and
evidence as the Lender may reasonably request.
