EXHIBIT 10.99
HSBC BANK USA, NATIONAL ASSOCIATION
(SUCCESSOR BY MERGER TO HSBC BANK USA),
NATIONAL CITY BANK OF KENTUCKY,
JPMORGAN CHASE BANK, N.A.
HSBC BANK USA, NATIONAL ASSOCIATION
(SUCCESSOR BY MERGER TO HSBC BANK USA) AS SWINGLINE LENDER
HSBC BANK USA, NATIONAL ASSOCIATION
(SUCCESSOR BY MERGER TO HSBC BANK USA), AS AGENT,
NATIONAL CITY BANK OF KENTUCKY, AS DOCUMENTATION AGENT
AND
THE NEW YORK MORTGAGE COMPANY LLC
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AMENDED AND RESTATED
CREDIT AND SECURITY AGREEMENT
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DATED AS OF FEBRUARY 1, 2005
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS....................................................... 2
ARTICLE II. THE CREDIT....................................................... 12
2.1 Agreement to Lend.................................................... 12
2.2 Term ................................................................ 12
2.3 Disbursement of the Credit........................................... 13
2.4 Swingline ........................................................... 18
2.5 Repayments of the Credit............................................. 20
ARTICLE III. CONDITIONS TO ADVANCES.......................................... 24
3.1 Initial Advance...................................................... 24
3.2 Conditions to Subsequent Advances.................................... 26
3.3 Other Conditions..................................................... 26
3.4 Documents to be Delivered Prior to a Repurchase Advance to Finance a
Repurchase Loan...................................................... 26
ARTICLE IV. SECURITY AGREEMENT............................................... 28
4.1 Grant of Security Interest........................................... 28
4.2 Rights of Agent...................................................... 29
4.3 Income from and Interest on Collateral............................... 30
4.4 Possession of Collateral............................................. 30
4.5 Collateral Report.................................................... 30
ARTICLE V. REPRESENTATIONS AND WARRANTIES.................................... 31
5.1 Good Standing and Authority of the Company........................... 31
5.2 Valid and Binding Obligation......................................... 31
5.3 Guaranty ............................................................ 31
5.4 No Pending Litigation................................................ 32
5.5 No Consent or Filing................................................. 32
5.6 No Violations ....................................................... 32
5.7 Federal Regulations.................................................. 33
5.8 ERISA Matters ....................................................... 33
5.9 Collateral .......................................................... 34
5.10 Subsidiaries ........................................................ 34
5.11 Financial Condition.................................................. 34
5.12 Liens ............................................................... 35
5.13 Investment Company Act............................................... 35
5.14 Corporate Takeovers.................................................. 35
5.15 Insider ............................................................. 35
ARTICLE VI. COVENANTS........................................................ 36
6.1 Payments............................................................. 36
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6.2 Notice .............................................. 36
6.3 Taxes ............................................... 37
6.4 Insurance ........................................... 37
6.5 Litigation .......................................... 37
6.6 Existence and Eligibility............................ 38
6.7 Books and Records.................................... 38
6.8 Compliance with Law.................................. 38
6.9 Access to Records.................................... 38
6.10 Maintain Qualifications.............................. 38
6.11 Financial Reports.................................... 39
6.12 Pension Reports...................................... 39
6.13 Collateral Value; Margin Call........................ 40
6.14 Liens ............................................... 40
6.15 Document Shipping Charges............................ 41
6.16 ERISA Contributions.................................. 41
6.17 VA Guaranties and FHA Insurance...................... 41
6.18 Financial Covenants.................................. 41
6.19 Additional Primary or Secondary Indebtedness......... 42
6.20 Fees ................................................ 42
6.21 MERS ................................................ 43
6.22 Other Acts .......................................... 44
ARTICLE VII. EVENTS OF DEFAULT............................... 44
7.1 Nonpayment of Indebtedness........................... 44
7.2 Assignment or Encumbrance............................ 44
7.3 Insolvency Proceedings............................... 44
7.4 Misrepresentation.................................... 45
7.5 Materially Adverse Changes........................... 45
7.6 Failure to Perform Obligations....................... 46
7.7 Pension Default...................................... 46
7.8 Change in Management................................. 47
7.9 Events Affecting Guarantor(s)........................ 47
ARTICLE VIII. REMEDIES UPON DEFAULT.......................... 47
8.1 Default - Insolvency................................. 47
8.2 Remedies; Certain Demands for Payment................ 47
8.3 Application of Proceeds.............................. 54
ARTICLE IX. RELATIONSHIP OF THE AGENT AND THE BANKS.......... 55
9.1 Appointment and Authorization........................ 55
9.2 No Other Duties...................................... 56
9.3 Certain Rights of Agent; Limitations Thereon......... 56
9.4 Waiver of Liability of Agent......................... 58
9.5 Non-Reliance on Agent and Other Banks................ 60
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9.6 Release ............................................. 61
9.7 Agent in Its Individual Capacity..................... 62
9.8 Successor Agent...................................... 62
9.9 Benefit of Article IX................................ 63
9.10 MERS ................................................ 63
ARTICLE X. DOCUMENTATION AGENT............................... 63
ARTICLE XI. INDEMNIFICATION AND EXPENSES..................... 64
ARTICLE XII. MISCELLANEOUS................................... 64
12.1 Amendments and Waivers............................... 64
12.2 Delays and Omissions................................. 65
12.3 Attorney-in-fact..................................... 65
12.4 Collection .......................................... 66
12.5 Further Security..................................... 66
12.6 Return of Collateral Under Trust Receipt............. 67
12.7 Loss of Loan Documents............................... 67
12.8 Successors and Assigns............................... 67
12.9 Notices ............................................. 67
12.10 Counterparts ........................................ 68
12.11 Titles .............................................. 68
12.12 Inconsistent Provisions.............................. 68
12.13 Participation ....................................... 68
12.14 Entire Agreement..................................... 68
12.15 Governing Law ....................................... 68
12.16 CONSENT TO JURISDICTION.............................. 68
12.17 WAIVER OF JURY TRIAL................................. 69
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AMENDED AND RESTATED
CREDIT AND SECURITY AGREEMENT
THIS AGREEMENT, dated as of the Agreement Date among THE NEW YORK MORTGAGE
COMPANY LLC, a New York limited liability company with offices at 1301 Avenue of
the Americas, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"), HSBC BANK
USA, NATIONAL ASSOCIATION, successor by merger to HSBC Bank USA, a national
banking association, with offices at c/o Mortgage Warehouse Lending Department,
Xxx XXXX Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxx Xxxx 00000 ("HSBC"); NATIONAL CITY
BANK OF KENTUCKY, a national banking association, with offices at 000 Xxxxx 0xx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("NATIONAL CITY"), and JPMORGAN CHASE BANK,
N.A., a national banking association with offices at 707 Xxxxxx, 6th Floor
North, (P.O. Box 2558) Xxxxxxx, Xxxxx 00000 ("Chase" and together with HSBC and
NATIONAL CITY, "Banks"); HSBC BANK USA, NATIONAL ASSOCIATION, as Swingline
Lender; NATIONAL CITY BANK OF KENTUCKY, as Documentation Agent; and HSBC BANK
USA, NATIONAL ASSOCIATION, as Agent, evidences:
INTRODUCTION
This Agreement provides for a credit facility to enable the Company
to obtain interim financing with which to fund certain mortgage loans originated
by the Company. This Agreement sets forth the terms and conditions under which
the facility will be advanced, the interest and other charges payable to Agent,
Swingline Lender and the Banks, repayment terms, and warranties, representations
and covenants in connection with the facility.
ARTICLE I. DEFINITIONS
Capitalized terms used in this Agreement and not otherwise defined
shall have the meanings set forth below:
Agent: HSBC Bank USA, National Association acting in the manner and
to the extent described in Article IX hereof, or a successor thereto appointed
in accordance with said Article.
Adjusted Net Worth: Book Net Worth less all assets deemed to be
ineligible at the sole discretion of the Banks.
Advance: A disbursement of a portion of the Credit; see Article II.
Agreement Date: As of January 3, 2005
"Alt A" Loan: A Qualifying Mortgage which conforms to the
underwriting criteria of Investors generally for loans which are commonly
referred to in the secondary market as "Alt A" or "A-minus" loans and has a FICO
score of not less than 620.
Bailee Agreement: Letter agreement whereby an Investor agrees to
hold one or more Loan Documents as bailee for Agent subject to the Security
Interest.
Book Net Worth: An amount equal to the Guarantor's paid-in capital
and retained earnings, as determined under GAAP.
Business Day: Any day other than Saturday, Sunday or a day on which
banks in New York State are required or authorized to close by law or
regulation.
Collateral: As defined in Section 4.1.
Collateral Report: A report, form and content satisfactory to the
Banks itemizing the Collateral, including the principal amount of each
Qualifying Mortgage, the amount of each
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Advance, the date of each Advance and the number of days each Advance has
remained outstanding and unpaid.
Collateral Value: As defined in Section 6.13(C).
Commitment: The agreement by an Investor to purchase Qualifying
Mortgages.
Conforming Mortgage Loan: A Qualifying Mortgage the principal
balance of which does not exceed the then-current maximum loan limits for
purchase by FHLMC and Xxxxxx Xxx.
Cooperative Loan: A Qualifying Mortgage secured by the pledge of an
interest in a cooperative apartment.
Construction Advance shall mean an Advance to fund the initial draw
of a loan secured by a Construction Mortgage.
Construction Mortgage shall mean a mortgage loan secured by a first
mortgage, the proceeds of which will be used for the purchase of land and/or
improvement of a one- to four-family residence which loan is also:
A. Underwritten and pre-approved by IndyMac Bank (and in any event
has a FICO score of not less than 620);
B. Evidenced, secured and assigned by the Loan Documents, which are
delivered to HSBC within the Delivery Period; and
C. Not in default at the time so submitted.
Credit: The credit facilities governed by this Agreement.
Credit Amount: ONE HUNDRED FIFTY MILLION AND NO/100 DOLLARS
($150,000,000.00).
Credit Notes: The Company's promissory notes to the Banks dated the
Agreement Date, and any renewal, replacement, extension or amendment thereto.
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Default: An event which, with the giving of notice or passage of
time or both, would constitute an Event of Default.
Delivery Period: Five Business Days after an Advance.
Documentation Agent: NATIONAL CITY, acting in the manner and to the
extent described in Article X of this Agreement, or a successor thereto
appointed in accordance with said Article.
"Dry Funding" Advance: An Advance made pursuant to Section 2.3A.
Electronic Tracking Agreement: The Electronic Tracking Agreement
dated as of July 19, 2004 among HSBC BANK USA, NATIONAL ASSOCIATION (as
successor by merger to HSBC Bank USA), MERS, MERSCORP and The New York Mortgage
Company, LLC.
Event of Default: As defined in Article VII.
Facility Fee: Those fees set forth in Section 6.20 hereof.
Financing Statement: UCC-1 financing statement evidencing the pledge
to the Company of the lessee's interest in a cooperative apartment securing a
Qualifying Mortgage, which financing statement shall have been duly filed in the
appropriate UCC records so as to perfect the Company's security interest.
FHA: United States Federal Housing Administration.
FHLMC: Federal Home Loan Mortgage Corporation.
GAAP: Those generally accepted accounting principles and practices
which are from time to time recognized as such by the Financial Accounting
Standards Board (or any generally recognized successor).
GNMA: Government National Mortgage Association.
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Guarantor: New York Mortgage Trust, Inc.
Guaranty: The guaranty of the Guarantor of the repayment of the
Credit to the Banks, when and as due.
Investor: A secondary market purchaser of Qualifying Mortgages,
which purchaser is approved by Agent.
Loan Documents: The documents relating to a specific Qualifying
Mortgage, namely: (a) original note duly endorsed in blank, (b) a copy of said
note, (c) a certified copy of the mortgage, (d) an unrecorded but recordable
assignment in blank of the mortgage or a MERS assignment of the applicable
mortgage in the format as may be prescribed by MERS from time to time executed
in recordable form in blank, (e) Investor Commitment in form acceptable to
Agent, and (f) such other normal and customary documents as Agent may require.
If appropriate filing and recording information regarding the applicable
Qualifying Mortgage, including the MERS Identification Number ("MIN") has not
been inserted into the assignment and the Agent has determined that such
information is necessary to perfect its security interest in such Qualifying
Mortgage, the Company shall promptly provide such information to the Agent when
available and hereby authorizes the Agent to insert such information as
appropriate (whether or not such information is supplied by the Agent or the
Company); however, the Agent shall have no obligation to insert such
information, and may require the missing information to be completed by the
Company. If the Qualifying Mortgage is a Construction Mortgage, Loan Documents
mean the documents set forth above as well as a copy of the appraisal and, if
applicable, purchase contract for the property to be acquired with the
applicable Construction Advance. If the Qualifying Mortgage is a Cooperative
Loan, Loan Documents means:
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(a) original note duly endorsed in blank; (b) a copy of said note; (c) certified
copy of the lessee's shares of stock; (d) certified copy of security agreement
between lessee and the Company (e) certified copy of the assignment by lessee to
the Company of lessee's proprietary lease; (f) acknowledgement copy of the filed
Financing Statement; and (g) original UCC-3 assignment of the Financing
Statement by the Company (with assignee blank).
Majority Banks: Banks the stated minimum principal balance of whose
Credit Notes equal 66.67% or more of the Credit Amount.
Material Adverse Change: As defined in Section 7.5.
Maximum Advance Amount: (a) Except with respect to Repurchase
Advances and Construction Advances, 98% of the lesser of (i) the Investor's
purchase price of the Qualifying Mortgage (up to a maximum of par) or (ii) the
outstanding principal balance of the Qualifying Mortgage, for which Qualifying
Mortgage an Advance has not theretofore been made, (b) with respect to
Repurchase Advances, 70% of the least of (i) the Investor's purchase price of
the applicable mortgage (up to a maximum of par), (ii) the market value of
property secured by the applicable mortgage and (iii) the outstanding principal
balance of the Repurchase Loan, for which Repurchase Loan an Advance has not
theretofore been made and (c) with respect to Construction Advances, 90% of the
lesser of (i) the actual cost of the land and/or improvements for which the
initial draw is intended pursuant to IndyMac Bank's approval specifications; or
(ii) the appraised value of the property secured by the applicable mortgage.
MERS The Mortgage Electronic Registration System, Inc.
MERSCORP MERSCORP, Inc.
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MERS Loan Any Qualifying Mortgage made by the Company that is
secured by a MERS Mortgage.
MERS Member: Any entity which is a member of MERS, in good standing
and in compliance with all rules, regulations, procedures and requirements set
forth by MERS, including, but not limited to the payment of membership dues.
MERS Mortgage: Any Qualifying Mortgage registered by the Company on
the MERS System.
MERS System: The Mortgage Electronic Registration System established
by MERS.
Non-Conforming Mortgage Loan: A Qualifying Mortgage the principal
balance of which exceeds the then-current maximum loan limits for purchase by
FHLMC and Xxxxxx Mae.
Notice Address:
a) With respect to the Company:
The New York Mortgage Company LLC
1301 Avenue of the Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
b) With respect to HSBC as Agent, Swingline Lender, and Bank:
HSBC Bank USA, National Association
Mortgage Warehouse Lending Department
Xxx XXXX Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Manager, Mortgage Warehouse Lending
c) With respect to NATIONAL CITY as Documentation Agent and Bank:
National City Bank of Kentucky
000 X. Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxx, Vice President
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d) With respect to Chase as a Bank:
JPMorgan Chase Bank, N.A.
707 Xxxxxx, 0xx Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000 (for messenger deliveries)
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000 (for mail deliveries)
Attention: Xxxxxxx Xxxxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
Pension Plan: Any pension plan as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974 as amended ("ERISA") which is a
multiemployer plan or single employer plan as defined in Section 4001 of ERISA
and subject to Title IV of ERISA and which is (a) a plan maintained by the
Company or any Subsidiary for employees or former employees of the Company or of
any Subsidiary, (b) a plan to which the Company or any Subsidiary contributes or
is required to contribute, (c) a plan to which the Company or any Subsidiary was
required to make contributions at any time during the five calendar years
preceding the Agreement Date, or (d) any other plan with respect to which the
Company or any Subsidiary has incurred or may incur liability, including
contingent liability, under Title IV of ERISA, to such plan or to the Pension
Benefit Guaranty Corporation. For purposes of this definition and for purposes
of Sections 5.7, 6.14 and 7.7 hereof, "Company" shall include any trade or
business (whether or not incorporated) which, together with the Company or a
Subsidiary, is deemed to be a "single employer" within the meaning of Section
4001(b)(l) of ERISA.
Pro Rata Share: The percentage which the outstanding principal
amount disbursed by a Bank pursuant hereto bears to the total outstanding
principal balance of the Credit Amount, but not including Delinquent Amounts or
Excess Contributions as defined in
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Section 2.3C hereof, and not including Swingline Advances; provided, however,
that for purposes of calculating the obligation of each Bank to make Advances,
each Bank's Pro Rata Share shall be the percentage which the face amount of that
Bank's Credit Note (not including the Swingline Note) bears to the Credit Amount
(i.e., HSBC - 50.0%, NATIONAL CITY -16.67% and Chase -33.33%).
Qualifying Mortgage: A fixed or adjustable rate conventional, FHA or
VA mortgage loan secured by a first or second mortgage on a one- to four-family
residence (or, in the case of a Cooperative Loan, by a pledge of an interest in
a cooperative apartment) which loan is also:
A. Covered by and closed in accordance with a Commitment by an
Investor, (or recommitted for purchase at a price not less than the original
Commitment);
B. In conformance with FHLMC, Xxxxxx Xxx, FHA or VA
underwriting standards, as applicable, and the special standards of the
respective Investors, and including "Alt A" Loans and Subprime Mortgage Loans;
C. Evidenced, secured and assigned by the Loan Documents,
which are delivered to HSBC within the Delivery Period.
D. Fully advanced; not in default at the time so submitted;
not subject to any modification, amendment, or waiver; in compliance with all
applicable disclosure and consumer protection statutes and regulations including
without limitation Truth-In-Lending and Regulation Z; in compliance with
secondary market standards respecting fire and casualty insurance; and
encumbering property which is insured if and as required under the National
Flood Insurance Act of 1968, as amended;
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Remittance Account: A depository account owned and maintained by
Agent.
Repayment: As defined in Section 2.5.
Reportable Event: Any event with regard to a Pension Plan described
in Section 4043(b) of ERISA, or in regulations issued thereunder.
Repurchase Advance shall mean an Advance requested to fund a
Repurchase Loan.
Repurchase Loan shall mean a mortgage loan repurchased by the
Company from an Investor for reasons other than fraud that meets the following
conditions: (i) no notice or other indication has been given by FHA or VA
challenging the obligations of FHA or VA to pay the full amount due on any
insurance or guaranty certificate in connection with such mortgage loans (and in
good faith estimation of the Company, no such challenge is forthcoming); (ii)
the mortgage loan does not have any payments more than seven hundred twenty
(720) days past due (unless the borrower of such mortgage loan filed a voluntary
bankruptcy petition or had an involuntary bankruptcy petition filed against it
while the payments on such mortgage loan were past due, in which case such seven
hundred twenty (720) day period shall be extended to one thousand eighty (1080)
days); (iii) the related Repurchase Advance shall be due and payable no later
than one hundred eighty (180) days after the date of such Repurchase Advance, or
earlier upon receipt of proceeds from the sale of the property, sale of the
mortgage or settlement of the claim with the Investor, insurer or guarantor;
(iv) not more than ninety (90) days have passed since reinstatement of the
mortgage loan; (v) the mortgage loan is not a Subprime Mortgage Loan and (vi)
the mortgage loan shall not be a mortgage loan which in good faith estimation of
the Company is deemed to be a "no bid" candidate under the current VA practice,
provided that
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such estimation by the Company may take into account the amount of any buy down
of the principal balance of such mortgage loan which has actually been made by
the Company, or is anticipated to be made by the Company, provided that the
amount of any such anticipated buy down shall be deducted from the Collateral
Value of such mortgage loan.
Request for Advance: As defined in Section 2.3 A(i).
Sale Date: The date on which an Investor is required to make payment
pursuant to a Commitment.
Second Mortgage Loan: A Qualifying Mortgage secured by a
second-priority lien, including, without limitation, Qualifying Mortgages which
secure home equity lines of credit.
Security Interest: The security interest granted by the Company to
Agent, on behalf of the Banks, in the Collateral.
Subprime Mortgage Loan: A Qualifying Mortgage which is rated "B", or
"C" grade by the applicable Investor and, in any event, a loan that (i) does not
conform with Xxxxxx Mae or FHLMC underwriting standards and (ii) has a FICO
score ranging from 580 to 619.
Subsidiary: Any corporation of which at least 50% of the voting
stock is owned by the Company directly, or indirectly through one or more
Subsidiaries. If the Company has no Subsidiaries, the provisions of this
Agreement relating to Subsidiaries shall be inapplicable, without affecting the
applicability of such provisions to the Company alone.
Swingline: The credit facility governed by Section 2.4 hereof, from
which Advances will be funded and to which Repayments will be credited, subject
to the terms and conditions of Section 2.4.
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Swingline Lender: HSBC, acting in such capacity in accordance with
Section 2.4, or a successor thereto appointed in accordance with said section.
Swingline Note: The Credit Note evidencing the Swingline Advances.
Term: As set forth in Section 2.2.
VA: Veterans Administration.
"Wet Funding" Advance: An Advance made pursuant to Section 2.3B.
ARTICLE II. THE CREDIT
2.1 Agreement to Lend. Each of the Banks, to the extent of its Pro
Rata Share, agrees on the terms and conditions and relying on the
representations and warranties set forth herein to lend to the Company, and the
Company agrees to borrow from the Banks, up to the Credit Amount. Individual
Advances of the Credit shall be made as requested by the Company from time to
time. The aggregate amount of all Advances shall not exceed the Credit Amount.
Following repayments of Advances, the Banks will make readvances under the same
terms and conditions, provided that Advances outstanding at any time shall not
exceed the lesser of the amount of the Credit Amount or the Maximum Advance
Amount. The Credit will be evidenced by the Credit Notes.
2.2 Term.
A. This Agreement will be in effect until June 29, 2005, when
all amounts outstanding hereunder and under the Credit Notes shall be due and
payable; provided, however, that any Bank may earlier terminate this Agreement
with respect to the Pro Rata Share of that Bank following at least ninety (90)
days prior written notice to the Company, Agent, and the
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other Bank(s), but in any event, the foregoing notice requirement shall not
obligate any Bank to make Advances beyond June 29, 2005. If any Bank shall give
such notice, on the effective date of termination the Company shall pay to such
Bank, by wire transfer of immediately available funds, such Bank's Pro Rata
Share of outstanding Advances together with accrued and unpaid interest thereon
to the date of payment. Upon the effective date of any termination by a Bank of
its Pro Rata Share of the Credit Amount, (i) the Credit Amount shall be reduced
accordingly, and (ii) the terminating Bank's Share of the Facility Fee will
cease to accrue. Agent agrees to utilize its best efforts to replace a
withdrawing Bank, but no Bank shall be obligated to purchase the Pro Rata Share
of a withdrawing Bank. Any replacement lender proposed by Agent shall be subject
to the approval of the Company, which approval the Company agrees not to
unreasonably withhold or delay.
B. At any time subsequent to ninety (90) days from the
Agreement Date, the Company may terminate this Agreement following at least
ninety (90) days prior written notice to the Banks. No such termination shall
affect the rights of the parties hereto as to any Advances previously made,
which shall continue to be governed hereby, nor shall such termination relieve
the Company from its obligation herein to pay fees and expenses (including
without limitation accrued and unaccrued Facility Fees) in connection with the
Credit.
2.3 Disbursement of the Credit. Subject to the terms and conditions
hereof, the Company may request "Dry Funding" Advances and "Wet Funding"
Advances.
A. "Dry Funding" Advances.
(i) Before 12:00 noon Agent's local time, one Business
Day before a proposed Advance, the Company will request such Advance in writing
by providing to
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Agent by telefax or electronic mail (i) the information on Agent's "Request For
Advance", in the form provided to the Company by Agent ("Request for Advance")
which includes: the mortgagors' last names, the property address, the loan
amount, loan number, loan type (FHA, VA or conventional, as applicable), loan
sub-type, interest rate, commitment number, Investor Sale Date and warehousing
amount requested.
(ii) Also before 12:00 noon Agent's local time, one
Business Day before a proposed Advance, the Company shall deliver or cause to be
delivered to Agent or its designee, the Loan Documents for Agent's review and
approval.
(iii) Following said approval, on the date of the
requested Advance, and provided that no Default, Event of Default or Material
Adverse Change has occurred, Swingline Lender will make an Advance of the
requested amount (or so much thereof as has been approved by Agent) to the
Company up to the Maximum Advance Amount. Advances shall be made by deposit by
Swingline Lender into an Agent account in the name of the Company for further
disposition as the Company may direct. Each Advance shall be used only for
funding the loans identified on the Request For Advance. If a loan for which an
Advance has been made does not close, the Company will notify Agent immediately,
and Agent will charge the account for that portion of the Advance attributable
to the unclosed loan.
B. "Wet Funding" Advances.
(i) Before 10:00 a.m. Agent's local time on the Business
Day of a proposed Advance, the Company will request such Advance in writing by
providing to Agent by telefax or electronic mail (i) the information on Agent's
"Request For Advance", in the form provided to the Company by Agent, which
includes: the mortgagors' last names, the
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property address, the loan amount, loan number, loan type (FHA, VA or
conventional, as applicable), loan sub-type, interest rate, commitment number,
Investor Sale Date and warehousing amount requested.
(ii) On the date of the requested Advance (but not
earlier than one day prior to the loan closing date) and provided that no
Default, Event of Default or Material Adverse Change has occurred, Swingline
Lender will make an Advance of the requested amount (or so much thereof as has
been approved by Agent) to the Company up to the Maximum Advance Amount.
Advances shall be made by deposit by Swingline Lender into Agent's account in
the name of the Company for further disposition as the Company may direct. Each
Advance shall be used only for funding the loans identified on the Request for
Advance. If a loan for which an Advance has been made does not close, the
Company will notify Agent immediately, and Agent will charge the account for
that portion of the Advance attributable to the unclosed loan.
(iii) Within the Delivery Period, the Company shall
deliver or cause to be delivered to Agent or its designee, the Loan Documents
for Agent's review and approval.
C. Conditions to Advancing Funds.
(i) If any Bank fails to make funds available to
Swingline Lender according to the terms of Section 2.4 B. hereof as, when and to
the full extent required hereunder, such Bank shall be in default of its
obligations hereunder until such time as such Bank cures such failure
(hereinafter, a Bank that is so in default shall be referred to as a
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"Delinquent Party" and the amount which a Delinquent Party is obligated to fund
but does not fund will be referred to as the "Delinquent Amount").
(ii) A Delinquent Party shall be deemed to have assigned
any and all payments due to it, whether with respect to principal, interest,
fees or otherwise (the "Assigned Payments"), to the other Banks if such other
Banks contribute amounts in excess of their respective Pro Rata Share of any
Advance (the "Excess Contribution") in order to fund the Delinquent Amount.
Assigned Payments shall be applied, but only to the extent necessary, to the
reduction of any Excess Contributions until the Excess Contributions have been
repaid. This assignment and authorization shall be deemed to be a power coupled
with an interest and shall be absolute and irrevocable. Notwithstanding anything
contained in this Agreement to the contrary, the payment of Excess Contributions
shall have priority over all payments (including principal, interest and fees)
due to the Delinquent Party until the Bank which made the Excess Contribution
receives its allocable portion of the Excess Contribution.
(iii) Nothing contained in this Agreement or otherwise
shall (i) create any obligation of any Bank to disburse more than its Pro Rata
Share of any Advance, (ii) create any obligation of Swingline Lender to disburse
any amount which would cause the unpaid principal balance of the Swingline Note
to exceed $15,000,000.00; (iii) relieve any Bank or Swingline Lender from its
obligation to the Company to disburse funds as required hereby, or (iv)
prejudice any rights or remedies the Company may have against any Bank or
Swingline Lender as the result of such Bank's failure to so disburse.
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D. Sublimits.
(i) Notwithstanding anything to the contrary herein, the
aggregate amount of "Wet Funding" Advances outstanding at any one time shall not
exceed (a) 40% of the Credit Amount during the first and last five (5) Business
Days of each calendar month, and (b) 30% of the Credit Amount at any other time.
(ii) Notwithstanding anything to the contrary herein,
(a) the aggregate amount of Advances outstanding at any one time secured by
Non-Conforming Mortgage Loans shall not exceed 75% of the Credit Amount, and (b)
no Advance in an amount exceeding $2,000,000 and secured by a Non-Conforming
Mortgage Loan (or Non-Conforming Mortgage Loans if the Qualifying Mortgages
encumber the same real property) shall be made without prior written notice to,
and authorization by, the Agent which authorization shall be in the Agent's sole
discretion.
(iii) Notwithstanding anything to the contrary herein,
(a) the aggregate amount of Advances outstanding at any one time secured by
Subprime Mortgage Loans shall not exceed 5% of the Credit Amount, and (b) no
Advance in an amount exceeding $500,000 and secured by a Subprime Mortgage Loan
or Subprime Mortgage Loans shall be made without prior written notice to, and
authorization by, the Agent, which authorization shall be the Agent's sole
discretion.
(iv) Notwithstanding anything to the contrary herein,
the aggregate amount of Advances outstanding at any one time secured by
Cooperative Loans shall not exceed 25% of the Credit Amount.
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(v) Notwithstanding anything to the contrary herein, the
aggregate amount of Advances outstanding at any one time secured by Second
Mortgage Loans shall not exceed 10% of the Credit Amount.
(vi) Notwithstanding anything to the contrary herein,
the aggregate amount of Advances outstanding at any one time secured by
Qualifying Mortgages for which Loan Documents have been returned to the Company
under trust receipt pursuant to Section 12.6 hereof shall not exceed 10% of the
Credit Amount.
(vii) Notwithstanding anything to the contrary herein,
the aggregate amount of Advances outstanding at any one time secured by
Repurchase Loans shall not exceed $2,500,000.
(viii) Notwithstanding anything to the contrary herein,
the aggregate amount of Advances outstanding at any one time secured by
Construction Mortgages shall not exceed $10,000,000.
2.4 Swingline.
A. Swingline Advance: Subject to the terms and conditions of
this Agreement, relying upon the representations and warranties set forth in
this Agreement, and so long as the aggregate outstanding principal amount of all
Advances are less than or equal to the Credit Amount, Swingline Lender agrees to
make to the Company Swingline Advances totaling not more than FIFTEEN MILLION
DOLLARS ($15,000,000.00) as requested by the Company by Requests for Advance as
provided in Section 2.3 A. or Section 2.3 B., as applicable. Swingline Advances
will be evidenced by the Swingline Note and shall bear interest as provided
therein.
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B. Settlement of Swingline Advances.
(i) Each Bank agrees to purchase an undivided interest
in all outstanding Swingline Advances by paying to Swingline Lender such Bank's
Pro Rata Share of such Swingline Advances:
(a) On Thursday of each calendar week; or
(b) Whenever the Swingline Lender requires
settlement by notice to the Banks;
(ii) Payments to Swingline Lender due pursuant to this
Section shall be made by wire transfer not later than 5 p.m. (Agent's local
time) on the Business Day the notice requiring settlement was received by
telefax or electronic mail, if such notice was received prior to 3 p.m. (Agent's
local time), and not later than 10 a.m. (Agent's local time) on the following
Business day if the notice was received after 3 p.m., and shall be promptly
applied against outstanding Swingline Advances;
(iii) Amounts paid by each Bank to purchase interests in
Swingline Advances shall be evidenced on such Bank's Credit Note;
(iv) The obligation of each Bank hereunder to purchase
interests in Swingline Advances is absolute and unconditional, regardless of any
actual or incipient Event of Default or other event or condition which would
otherwise excuse a Bank from funding Advances;
(v) Swingline Lender will forward to each Bank such
Bank's Pro Rata Share of any Swingline Credit balance resulting from payments
made and credited pursuant to Section 2.5 H.
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C. Swingline Lender. Resignation, disqualification and
succession of Swingline Lender shall be governed by the provisions of Section
9.8.
2.5 Repayments of the Credit.
A. On the earliest of (i) the Sale Date specified in each
Commitment, (ii) ninety (90) days after a Bank has made an Advance for the
Qualifying Mortgages listed in said Commitment (except that Qualifying Mortgages
(x) committed for bulk sale (y) not otherwise due for repayment, and (z) secured
by Advances equal to not more than 25% of the Credit Amount, may remain for up
to 120 days. Repurchase Loans may remain for up to 180 days and Advances for
Construction Mortgages may remain up to thirty (30) days after a Bank has made
an Advance), (iii) thirty (30) days after Agent delivers any Loan Documents
pertaining to a Qualifying Mortgage or Construction Mortgage to an Investor,
(iv) the date on which this Agreement expires or becomes ineffective because of
the termination, or (v) fourteen (14) days after any original note evidencing a
Qualifying Mortgage or Construction Mortgage has been returned to the Company
under a trust receipt, the amount equal to the Advance made with regard to the
related Qualifying Mortgage or Construction Mortgage shall be repaid
("Repayment"). In connection with each Repayment the Company shall provide to
Agent a completed "Repayment Schedule" in the form provided to the Company by
Agent listing the Qualifying Mortgages to which the repayment pertains. On or
prior to the Sale Date for each Commitment, and upon receipt from the Company of
a written request on Agent's "Request For Delivery", in the form provided to the
Company by Agent, Agent shall forward the original notes evidencing the
Qualifying Mortgages, together with the UCC-3 assignment of the Financing
Statement (in respect to Cooperative Loans) to the applicable Investor or its
designee pursuant to
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a Bailee Agreement with said Investor; provided, however that Agent shall not be
required to forward any such documents unless the Request For Delivery is
received by Agent prior to 12:00 noon, Agent's local time, two Business Days
prior to the requested delivery, and Agent has had the Loan Documents in its
possession for at least two Business Days. If loans are to be sold to FHLMC or
Xxxxxx Xxx or securitized by GNMA, the Company will also provide the original
and any required copies of all necessary or appropriate forms to effect delivery
and payment for such notes. Prior to the release of Agent's Security Interest in
the Collateral, the Company shall cause the Investor to remit the proceeds from
the sale of mortgage loans via wire transfer directly into the Remittance
Account. If the amount remitted is less than the principal payment due on the
Sale Date, the Company shall pay the remaining amount due against the respective
Advance directly to Agent by wire transfer to the Remittance Account on such
Sale Date. Provided there is no Event of Default then existing, Agent shall
adjust in favor of the Company any excess proceeds received from Investors after
paying each Bank's Pro Rata Share of such remittance.
B. No later than the seventh (7th) Business Day of each month,
Agent shall send to the Company and to each Bank by facsimile transmission an
interest statement setting forth in reasonable detail a calculation of the
amount of interest payable for the immediately preceding calendar month (based
on daily outstanding Advances, a year of 360 days and actual days elapsed). On
or before the tenth (10th) Business Day of each month, the Company shall pay to
Agent by wire transfer each Bank's Pro Rata Share of the accrued interest set
forth in such statement. Agent shall promptly remit to each Bank its Pro Rata
Share of such interest payment. If the Company or any Bank disputes the amount
of interest set forth in a
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monthly interest statement, appropriate adjustment shall be made on the next
succeeding interest statement if the Agent's calculation is determined to be in
error.
C. The amount which would otherwise be available for the next
Advance shall be reduced by, or, if the Agent shall so elect by notice to the
Company, in accordance with subsection G hereof, the Company shall immediately
repay by wire transfer into the Remittance Account an amount equal to, the
amount of the portion of any Advance made on the security of a loan which is
either (i) more than sixty (60) days delinquent, (ii) not purchased by an
Investor on the Sale Date provided for in its Commitment, or (iii) not a
Qualifying Mortgage, whereupon Agent will return to the Company the documents
held by Agent relating to such loan with endorsements or reassignments necessary
to transfer such loans to the Company. Agent shall promptly wire transfer to
each Bank its Pro Rata Share of such repayments.
D. If the amount of Advances outstanding at any time should
exceed the aggregate Maximum Advance Amount for all Qualifying Mortgages, the
Company will immediately repay the amount of such excess into the Remittance
Account and the Agent shall promptly disburse to each Bank its Pro Rata Share
thereof.
E. Upon the date on which this Agreement terminates (whether
by acceleration or otherwise), the Company shall pay to Agent by wire transfer
of immediately available funds, each Bank's Pro Rata Share of the outstanding
Credit Amount, together with accrued interest to the date of such payment and
all other amounts due to it under its Credit Note or this Agreement. If the
effective date of termination falls on a date which is not a Business Day, all
amounts otherwise due on such date shall be payable on the first Business Day
occurring after such payment date, together with interest on the outstanding
Credit Amount for such
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additional day(s). Immediately upon receipt thereof Agent shall remit to each
Bank by wire transfer of immediately available funds each Bank's Pro Rata Share
of such payment. Following receipt by each Bank of its Pro Rata Share of the
outstanding Credit Amount and all other amounts due to it under its Credit Note
and this Agreement, Agent will transfer any remaining Qualifying Mortgages,
together with appropriate endorsements or reassignments to the Company.
F. The Company may elect to repay portions of Advances made
for particular Qualifying Mortgages. In the event of any such repayment in full
and in the absence of Default or Event of Default the Agent shall return to the
Company the documents held by the Agent relating to such Qualifying Mortgages,
together with endorsements or reassignments necessary to transfer such
Qualifying Mortgages to the Company.
G. If for any reason an Investor fails to purchase the subject
mortgage loan covered by its Commitment on the Sale Date or becomes insolvent or
the subject of a proceeding under the Bankruptcy Code, or ceases to carry on its
business, the Company shall, at Agent's option, either (i) obtain and provide to
Agent another Commitment acceptable to Agent to purchase the subject mortgage
loan; or (ii) immediately repay to Agent by wire transfer all amounts advanced
for the non-purchased loan or loans in question (or in the case of the
Investor's insolvency, bankruptcy proceeding, or cessation of business, all
mortgage loans covered by that Investor's Commitments); or (iii) replace such
mortgage loan or loans with a Qualifying Mortgage of market value equal to or
greater than the Maximum Advance Amount applicable to the replaced mortgage loan
or loans, whereupon Agent shall return to the Company the Loan Documents held by
Agent relating to the replaced mortgage loan or loans. The
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Company shall immediately notify Agent of all delinquencies on any mortgage
loans constituting security for the Credit Note and will, at Agent's option,
either (i) replace such mortgage loans with Qualifying Mortgages, whereupon
Agent shall return to the Company the Loan Documents held by Agent relating to
the replaced mortgage loans, or (ii) reduce the amount of principal outstanding
under the Credit Notes by the amount of the Advance applicable to such
delinquent mortgage loans plus accrued interest.
H. Payments received by Agent after 2:00 p.m. Agent's local
time shall be deemed to be received on the next following Business Day. Payments
will not be deemed received unless Agent shall have received a completed
Repayment Schedule on Agent's form listing the Qualifying Mortgages to which the
payment pertains.
ARTICLE III. CONDITIONS TO ADVANCES
3.1 Initial Advance. Each Bank's obligation to make the initial
Advance, and the effectiveness of this Agreement, are conditioned upon
compliance with the requirements of Section 2.3 hereof and upon the fulfillment
of the following conditions.
A. The Company shall have duly executed and delivered to
Agent:
(i) This Agreement;
(ii) A copy, certified by a member or manager of the
Company, of the consent of the Company's members authorizing the execution,
delivery and performance of this Agreement, the Credit Notes and all related
documents;
B. The Company shall have duly executed and delivered to each
Bank its Credit Note;
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C. The Company shall have delivered to the Agent the duly
executed Electronic Tracking Agreement.
D. Agent shall have received:
(i) The Guaranty;
(ii) A copy, certified by the Secretary of State of the
state of New York, of the Company's filed Articles of Organization;
(iii) A certified copy of the Company's Operating
Agreement;
(iv) A certificate of the Secretary of State of the
state of New York as to the existence and good standing of the Company;
(v) The favorable opinion of the Company's independent
counsel as to the due execution, delivery and enforceability of this Agreement,
the Credit Notes and the Guaranty, the due organization and existence of the
Company, and such other relevant matters as Agent may require;
(vi) A UCC search against the Company, showing no
filings affecting the Collateral;
(vii) Evidence of the insurance coverages required
hereby;
(viii) The duly authorized UCC-1 Financing Statement.
(ix) A certified copy of the Certificate or Articles of
Incorporation and By-Laws of the Guarantor;
(x) A copy, certified by an officer of the Guarantor,
of the resolutions of the Guarantor's board of directors authorizing the
execution, delivery and performance of the Guaranty; and
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(xi) A certificate of the Secretary of State of the
State of Maryland as to the existence and good standing of the Guarantor.
E. All other documents, assurances and matters reasonably
required by Agent.
3.2 Conditions to Subsequent Advances. All future Advances shall be
subject to compliance with the requirements of Section 2.3 hereof and to such
updating of the certificates and opinions referred to in Section 3.1 as Agent
may reasonably require from time to time.
3.3 Other Conditions. All Advances shall be subject to Agent's
receipt of such additional documents and the Company's compliance with such
additional requirements as Agent may reasonably require from time to time,
provided that such additional documents or requirements shall not be
inconsistent with the existing terms of this Agreement.
3.4 Documents to be Delivered Prior to a Repurchase Advance to
Finance a Repurchase Loan. In connection with the request for a Repurchase
Advance, the Company shall hold the following Collateral and Loan Documents in
trust for the Banks, and shall furnish and deliver such Collateral and Loan
Documents to the Agent immediately upon request of the Agent or any Bank;
provided, however, the Company shall furnish and deliver the Collateral and Loan
Documents listed in subsection (b) below to the Agent in connection with each
and every such Repurchase Advance:
(a) The original mortgage securing a mortgage note
recorded in the county where the property encumbered is located, and any
financing statements filed with respect thereto;
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(b) The original mortgage note, executed with
respect to such Repurchase Loan, if available, which must be payable to the
order of the Company either as the original payee or as subsequent endorsee) and
endorsed in blank by the Company (without recourse), or alternatively, if such
original mortgage note is unavailable and not in the possession of the Company
or any affiliate of the Company, a certified copy thereof together with an
acknowledgment letter, in a form prescribed from time to time by the Agent in
its sole discretion, provided, however, that the Company shall make every effort
to provide the original mortgage note;
(c) At the sole option of the Agent, an appraisal
of each property securing the Repurchase Loan which conforms with the
requirements of applicable appraisal laws and regulations, or such other
evidence of Collateral Value acceptable to the Agent;
(d) (i) An assignment of the mortgage securing the
mortgage note by the Company executed in recordable form in blank, or (ii) a
MERS assignment of the mortgage securing the mortgage note executed in
recordable form in blank. If appropriate filing and recording information
regarding such mortgage, including the MIN, has not been inserted into the
assignment and the Agent has determined that such information is necessary to
perfect its security interest in such mortgage, the Company shall promptly
provide such information to the Agent when available and hereby authorizes the
Agent to insert such information as appropriate (whether or not such information
is supplied to the Agent by the Company), however, the Agent shall not have any
obligation to insert such information, and may require such missing information
be completed by the Company;
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(e) The Request for Advance; and
(f) Such other information and documents as the
agent may reasonably request, including without limitation, an executed quit
claim deed in recordable form conveying such subject residential property to the
Agent for the ratable benefit of the Banks, which deed shall not be recorded
except upon the occurrence of an Event of Default, a copy of the FHA/VA
conveyance form (e.g., HUD 27011, VA 26-1874 or other applicable forms), if
available, and evidence of insurance or guaranty from the pertinent government
agency.
Upon the occurrence and during the continuance of an Event of
Default, the Company shall at the direction of the Agent, deliver all items
referred to in this Section 3.4 to such place as the Agent shall so direct, such
items to be held for the benefit and on behalf of the Banks.
ARTICLE IV. SECURITY AGREEMENT
4.1 Grant of Security Interest. This Agreement constitutes a
security agreement. As collateral security for the repayment of all sums which
may become due under the Credit Note or this Agreement, the Company hereby
assigns, pledges, and transfers all its right, title and interest in, and grants
to Agent a security interest in the following property (the "Collateral"):
A. All Qualifying Mortgages and all other mortgages which have
been represented to Agent to be Qualifying Mortgages, or upon the security of
which an Advance has been made, including all Loan Documents and any other
documents evidencing or securing the same;
B. All surveys and title insurance policies, commitments, or
reports relating to the same;
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C. All hazard insurance policies relating to the same;
D. All private mortgage insurance policies relating to the same;
E. All servicing rights relating to the same;
F. All accounts relating to the same (including, without limitation,
escrow accounts, subject to the rights of mortgagors under applicable law);
G. All files, records, data, correspondence, computer tapes,
programs and discs, appraisals, accounting records relating to the same or the
servicing thereof;
H. All Commitments to purchase said Qualifying Mortgages and all
other mortgages which have been represented to Agent to be Qualifying Mortgages;
I. All property of any kind given by the Company to Agent or its
designee in furtherance of this Agreement; and
J. All collections on and proceeds of any of the foregoing.
4.2 Rights of Agent.
A. With respect to the Collateral, Agent, on behalf of the
Banks shall have the rights of a secured party under the Uniform Commercial Code
as enacted in the State of New York.
B. The Company shall not have the right to modify, delete, or
waive any material term of any of the Collateral without Agent's prior written
consent.
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4.3 Income from and Interest on Collateral.
A. Until the occurrence of an Event of Default, the Company
reserves the right to receive all income from or interest on the Collateral and
if Agent receives any such income or interest prior to such Event of Default,
Agent shall pay the same promptly to the Company.
B. Upon the occurrence of an Event of Default, the Company
will not demand or receive any income from or interest on such Collateral, and
if the Company receives any such income or interest without any demand by it,
same shall be held by the Company in trust for the Banks in the same medium in
which received, shall not be commingled with any assets of the Company and shall
be delivered to Agent in the form received, properly endorsed to permit
collection, not later than the next Business Day following the day of its
receipt. Agent shall apply the net cash receipts from such income or interest in
accordance with Section 8.3 hereof.
4.4 Possession of Collateral. The Company agrees that possession of
any of the Collateral by closing attorneys, title companies, or any other bailee
acting on the Company's behalf shall be deemed possession by Agent for purposes
of perfecting the Security Interest granted hereby.
4.5 Collateral Report. Agent shall provide a Collateral Report to
each Bank not later than two Business Days after the end of each calendar month,
or at such other intervals as a Bank may request.
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ARTICLE V. REPRESENTATIONS AND WARRANTIES
The Company makes the following representations and warranties to
the Banks and Agent, which shall be deemed to be continuing representations and
warranties so long as any portion of the Credit Amount remains available or any
indebtedness of the Company to any Bank or Agent arising pursuant to this
Agreement remains unpaid:
5.1 Good Standing and Authority of the Company. The Company is a
limited liability company duly organized, validly existing and in good standing
under the laws of the State of New York; has powers to transact the business in
which it is engaged; is duly licensed or qualified and in good standing in each
jurisdiction in which the conduct of such business requires such licensing or
such qualification; and has all necessary power and authority to enter into this
Agreement and to execute, deliver and perform this Agreement, the Credit Notes
and any other document executed in connection with this Agreement, all of which
have been duly authorized by all proper and necessary corporate action.
5.2 Valid and Binding Obligation. This Agreement and any other
document executed in connection herewith, and the Credit Notes when executed and
delivered, will constitute the legal, valid and binding obligations of the
Company, enforceable in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy and insolvency laws and
laws effecting creditors' rights generally.
5.3 Guaranty. The Guaranty, when executed and delivered, will
constitute the legal, valid and binding obligation of the Guarantor, enforceable
in accordance with its respective terms, except as enforceability may be limited
by applicable bankruptcy and insolvency laws and laws effecting creditors'
rights generally.
- 31 -
5.4 No Pending Litigation. Except as have been or shall be disclosed
to Agent in writing, there are no actions, suits, proceedings (whether or not
purportedly on behalf of the Company) or investigations pending or, to the
knowledge of the Company, threatened against the Company or any Guarantor, if
any, or any basis therefor, which, if adversely determined, would, in any case
or in the aggregate, materially and adversely affect the property, assets,
financial condition or business of the Company or any Guarantor, if any, or
materially impair the right or ability of the Company to carry on its operations
substantially as now conducted or anticipated to be conducted in the future, or
which question the validity of this Agreement, the Credit Notes, the Guaranty,
if any, or other documents required by this Agreement, or any action to be taken
pursuant to any of the foregoing.
5.5 No Consent or Filing. No consent, license, approval or
authorization of, or registration, declaration or filing with, any court,
governmental body or authority or other person or entity is required in
connection with the valid execution, delivery or performance of this Agreement,
the Credit Notes, or other documents required by this Agreement or in connection
with any of the transactions contemplated thereby.
5.6 No Violations. The Company is not in violation of any material
term of its operating agreement or by-laws, or of any mortgage, borrowing
agreement or other instrument or agreement pertaining to indebtedness for
borrowed money. The Company is not in violation of any term of any other
indenture, instrument or agreement to which it is a party or by which it may be
bound, resulting, or which might reasonably be expected to result, in a material
and adverse effect upon, its business or assets. The Company is not in violation
of any order, writ, judgment, injunction or decree of any court of competent
jurisdiction or of any statute, rule or
- 32 -
regulation of any competent governmental authority. The execution and delivery
of this Agreement, the Credit Notes and other documents required by this
Agreement and the performance of all of the same is and will be in compliance
with the foregoing and will not result in any violation or result in the
creation of any mortgage, lien, security interest, charge or encumbrance upon
any properties or assets except in favor of Agent. There exists no fact or
circumstance not disclosed in this Agreement or in the documents furnished in
connection herewith which materially adversely affects, or in the future (so far
as the Company can now foresee) may materially adversely affect the condition,
business or operations of the Company.
5.7 Federal Regulations. The Company is not engaged principally, or
as one of its important activities, in the business of extending or arranging
for the extension of credit for the purpose of purchasing or carrying "margin
security" or "margin stock" (as defined in Regulations G and U issued by the
Board of Governors of the Federal Reserve System). Likewise, the Company does
not own or intend to carry or purchase any such "margin security" or "margin
stock", and the Company will not use the proceeds of any Advance to purchase or
carry (or refinance any borrowing, the proceeds of which were used to purchase
or carry) any such "margin security" or "margin stock".
5.8 ERISA Matters. No Pension Plan has been terminated or partially
terminated or is insolvent or in reorganization, nor have any proceedings been
instituted to terminate or reorganize any Pension Plan; neither the Company nor
any Subsidiary has withdrawn from any Pension Plan in a complete or partial
withdrawal, nor has a condition occurred which if continued would result in a
complete or partial withdrawal; neither the Company nor any Subsidiary has
incurred any withdrawal liability, including contingent withdrawal liability, to
- 33 -
any Pension Plan pursuant to Title IV of ERISA; neither the Company nor any
Subsidiary has incurred any liability to the Pension Benefit Guaranty
Corporation other than for required insurance premiums which have been paid when
due; no Reportable Event has occurred; and no Pension Plan or other "employee
pension benefit plan" as defined in Section 3(2) of ERISA to which the Company
or any Subsidiary is a party has an "accumulated funding deficiency" (whether or
not waived) as defined in Section 302 of ERISA or in Section 412 of the Internal
Revenue Code. Each Pension Plan and each other "employee benefit plan" as
defined in Section 3(3) of ERISA to which the Company or any Subsidiary is a
party is in substantial compliance with ERISA, and no such plan, or any
administrator, trustee or fiduciary thereof has engaged in a prohibited
transaction described in Section 406 of ERISA or in Section 4975 of the Internal
Revenue Code.
5.9 Collateral. Company represents, and so long as this Agreement is
in effect, shall be deemed continuously to represent and warrant that the
Company is the owner of the Collateral free of all security interests or other
encumbrances except the Security Interest granted herein.
5.10 Subsidiaries. The Company has no Subsidiary or other interest
in any other association, corporation, partnership, joint venture, or other
business entity not disclosed to Agent on a Schedule hereto.
5.11 Financial Condition. The financial statements which the Company
has furnished Agent have been prepared in conformity with GAAP consistently
applied and present fairly the financial condition of the Company as of such
date and the result of its operations for the period then ended and there has
been no material adverse change in said financial condition.
- 34 -
The Company has no contingent obligations, liabilities for taxes or other
outstanding financial obligations which are material in the aggregate, which are
not otherwise disclosed in the financial statements referred to above.
5.12 Liens. The Company has good and marketable title to all of its
properties and assets, which properties and assets are not subject to any
mortgage, pledge, title retention lien, or other lien, encumbrance or security
interest, except (i) for current taxes not delinquent or for taxes being
contested in good faith and by appropriate proceedings, (ii) liens arising in
the ordinary course of business for sums not due or sums being contested in good
faith and by appropriate proceedings and not involving any deposits or advances
or borrowed money or the deferred purchase price of property or services, and
(iii) liens in favor of Agent.
5.13 Investment Company Act. The Company is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
5.14 Corporate Takeovers. No portion of the Credit will be used to
acquire any security in any transaction which is subject to Section 13 or 14 of
the Securities and Exchange Act of 1934, including without limitation Sections
13(d) and 14(d) thereof.
5.15 Insider. The Company is not, and no person having "control" (as
the term is defined in 12 U.S.C. Section 375(b)(9)(G) or in regulations
promulgated pursuant thereto) of the Company is an "executive officer",
"director", or person who "directly or indirectly, or acting through or in
concert with one or more persons," owns, controls, or has the power to vote more
than 25% of any class of "voting securities" (as those terms are defined in 12
U.S.C. Section 375(9)(b) or in regulations promulgated pursuant thereto) of
Agent, any Bank, HSBC (USA) Inc. or any
- 35 -
subsidiary thereof, or of any bank at which a Bank maintains a correspondent
account, or of any bank which maintains a correspondent account with a Bank.
ARTICLE VI. COVENANTS
During the Term of this Agreement, and so long as any portion of the
Credit shall remain available or any indebtedness of the Company to Agent or
Banks shall remain unpaid, the Company will:
6.1 Payments. Duly and punctually pay the principal of and interest
on all indebtedness incurred by it pursuant to this Agreement and the Credit
Notes in the manner set forth herein and therein.
6.2 Notice. Promptly notify Agent in writing of (a) any pending or
future audits of the Company's federal income tax returns by the Internal
Revenue Service as soon as the Company has knowledge thereof, and the results of
each such audit after its completion; (b) any default by the Company in the
performance of, or any modifications of, any of the terms or conditions
contained in any agreement, mortgage, indenture or instrument to which the
Company is a party or which is binding upon the Company and of any default by
the Company in the payment of any of its indebtedness; provided, however, the
Company shall not be required to so notify Agent of modifications of any or all
terms or provisions of any document or agreement pertaining to its transaction
in the ordinary course of business, but which do not pertain to its indebtedness
for borrowed money, which do not materially and adversely affect the business or
assets of the Company; and (c) receipt by the Company of notices from FHA, VA,
Xxxxxx Xxx, FHLMC, GNMA, HUD, any Investor, or any state in which the Company
transacts business, which notice pertains to the status or qualification of the
Company to conduct its business.
- 36 -
6.3 Taxes. Promptly pay and discharge all of its taxes, assessments
and other governmental charges (including any charged or assessed on the
issuance of the Credit Notes or any of the Qualifying Mortgage notes) prior to
the date on which penalties attach thereto, establish adequate reserves for the
payment of taxes and assessments and make all required withholding and other tax
deposits; provided, however, that nothing herein contained shall be interpreted
to require the payment of any tax, assessment or charge so long as its validity
is being contested in good faith and by appropriate proceedings diligently
conducted, if the Company, upon Agent's request, deposits with Agent, to be held
in escrow, such amount being contested.
6.4 Insurance, (a) Keep all its property so insurable insured at all
times with responsible insurance carriers against fire, theft and other risks in
coverage, form and amount satisfactory to Agent; (b) keep adequately insured at
all times in reasonable amounts with responsible insurance carriers against
liability on account of errors and omissions, damage to persons or property and
under all applicable workers' compensation laws; (c) promptly deliver to Agent
certificates of insurance or any of those insurance policies required to be
carried by the Company pursuant hereto; and (d) cause each insurance policy to
contain a notice of cancellation provision satisfactory to Agent.
6.5 Litigation. Promptly notify Agent in writing as soon as the
Company has knowledge thereof, of the institution or filing of any litigation,
action, suit, claim, counterclaim or administrative proceeding against, or
investigation of, the Company (a) to which the Company is a party by or before
any regulatory body or governmental agency; (b) the outcome of which may
materially and adversely affect the finances or operations of the Company or the
Company's ability to fulfill its obligations hereunder unless adequately covered
by insurance; or (c) which
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questions the validity of this Agreement, the Credit Notes or any action taken
or to be taken pursuant to the foregoing; and furnish or cause to be furnished
to Agent such information regarding the same as Agent may request.
6.6 Existence and Eligibility. Maintain its existence in good
standing and remain or become duly licensed or qualified and in good standing in
each jurisdiction in which the conduct of its business requires such
qualification or licensing.
6.7 Books and Records. Keep proper books and records in accordance
with GAAP consistently applied, and notify Agent promptly in writing of any
proposed change in the location at which such books and records are maintained.
6.8 Compliance with Law. Comply in all material respects with all
laws and governmental rules and regulations respecting the transactions which
are the subject of this Agreement.
6.9 Access to Records. Permit Agent's authorized representatives,
during normal business hours and as often as Agent may reasonably request, to
have access to the Company's premises and its financial records pertaining to
the transactions contemplated hereby; inspect and copy such records, and discuss
the affairs and finances of the Company with appropriate officers of the
Company.
6.10 Maintain Qualifications. Maintain its status, as applicable, as
an FHA approved direct endorsement mortgagee, an approved lender under the VA
guaranty program, and an approved Seller/Servicer to Xxxxxx Mae, FHLMC and GNMA.
6.11 Financial Reports. Furnish to Agent and the Banks the following
financial information, certified true and complete by the Chief Financial
Officer of the Company:
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A. Balance sheet and income statement of the Company and
covenant compliance certificate with covenant calculation attached, as of the
end of each calendar quarter, to be furnished not later than forty-five days
after the end of each calendar quarter. Such statements shall contain such
information as Agent may reasonably request.
B. Annual financial statements of the Company audited by
independent certified public accountants acceptable to Agent, to be furnished
not later than ninety (90) days after the end of each fiscal year of the
Company.
6.12 Pension Reports. With respect to each Pension Plan, the Company
will furnish the following to Agent:
A. As soon as possible and in any event within thirty days
after the Company knows or has reason to know that any Reportable Event with
respect to such Pension Plan has occurred, the statement of the President or
chief financial officer of the Company setting forth the details of such
Reportable Event and the action which the Company proposes to take with respect
thereto;
B. Promptly after the filing thereof with the Secretary of
Labor, the Pension Benefit Guaranty Corporation or the Internal Revenue Service,
copies of reports (including, without limitation, notices of Reportable Events
and annual reports in the Form 5500 Series) filed with respect to each Pension
Plan.
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6.13 Collateral Value: Margin Call.
A. Defend the Collateral against the claims and demands of all
other parties; keep the Collateral free from all security interests or other
encumbrances except those granted herein; not sell, transfer, assign, deliver or
otherwise dispose of any Collateral except pursuant to the terms hereof or with
the consent of Agent.
B. Execute and deliver to Agent such financing statements,
assignments and other documents and do such other things relating to the
Collateral as Agent may request.
C. Maintain with Agent at all times as security for the
Credit, Collateral Value equal to or greater than the outstanding balance of the
Credit, and to repay the amount necessary to reduce the outstanding balance of
the Credit to or below the Collateral Value immediately upon demand by Agent for
such repayment. "Collateral Value" means the aggregate open market value (as
determined from time to time by Agent in Agent's sole discretion) of Qualifying
Mortgages securing unrepaid Advances.
6.14 Liens. Not create or permit to exist any mortgage, pledge,
title retention lien, lease, purchase or other encumbrance or security interest
with respect to any of the Collateral, except (a) the Security Interest; (b)
materialmen's, mechanics', suppliers', tax, and warehousemen's liens, statutory
liens of landlords and other like liens arising in the ordinary course of
business securing obligations which are not yet due or which are being contested
in good faith by appropriate proceedings; (c) liens incurred or deposits made in
the ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security or to secure the
performance of statutory obligations, surety or appeal bonds, bids, leases,
performance and return of money bonds and similar obligations (exclusive of
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obligations for the payment of borrowed money); (d) encumbrances consisting of
zoning regulations, easements, rights of way, survey exceptions and other
similar restrictions on the use of real property and minor irregularities in
titles thereto which do not materially impair such use; (e) liens on GNMA
mortgaged-backed securities owned by the Company and liens on such securities
which secure the Company's repurchase obligations to brokers with respect to
such securities; and (f) existing liens and security interests described on a
Schedule hereto.
6.15 Document Shipping Charges. Pay all expenses of shipping Loan
Documents from the Company to Agent and from Agent to Investors. The Company
will provide Agent with, or Agent will otherwise obtain via the internet,
overnight courier labels preprinted with the Company's account number and the
names and delivery addresses of the Investors.
6.16 ERISA Contributions. At all times, make prompt payment of
contributions required to meet the minimum funding standards set forth in ERISA
with respect to any employee benefit plan.
6.17 VA Guaranties and FHA Insurance. Not commit or suffer to be
committed any act which would invalidate the guarantee of the VA or insurance by
the FHA or cause any impairment to the validity of or priority of the lien on
the Collateral created hereby in favor of Agent.
6.18 Financial Covenants.
A. Adjusted Net Worth. Maintain a minimum Adjusted Net Worth
of at least FOURTEEN MILLION AND NO/100 DOLLARS ($14,000,000.00).
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B. Total Liabilities to Adjusted Net Worth Ratio. Maintain a
ratio of total liabilities to Adjusted Net Worth of not more than 15 to 1.
C. Cash. Retain at least $2,000,000.00 in cash or cash
equivalents.
D. Book Net Worth. Cause the Guarantor to maintain a minimum
Book Net Worth of at least ONE HUNDRED FIFTEEN MILLION AND NO/100 DOLLARS
($115,000,000.00).
E. No Operating Loss. Cause the Guarantor to maintain as of
the end of any two (2) consecutive fiscal quarters of the Guarantor, net profits
after taxes of at least ONE DOLLAR ($1.00).
6.19 Additional Primary or Secondary Indebtedness. Not incur
indebtedness outside of the ordinary course of business or under any other lines
of credit, or guaranty the repayment of any other indebtedness without prior
written notice to the Banks, provided that one or more of the Banks remains a
New York State approved mortgage warehouse lender.
6.20 Fees. Pay to Agent when and as due the following fees:
A. Non-Usage Fee. On the first day of each calendar month, in
arrears, a non-usage fee. The non-usage fee shall equal 25 basis points per
annum on the average unused portion of the Credit Amount, and the non-usage fee
will be waived for each month in which the average used portion of the Credit
Amount is more than fifty percent (50%) of the Credit Amount.
B. All collateral handling fees due pursuant to separate
agreements between Agent and the Company.
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6.21 MERS.
A. The Company will, (i) at all times, maintain its status as
a MERS Member, (ii) the Company shall at all times employ officers who have the
authority, pursuant to a corporate resolution from MERS, to execute assignments
of mortgage in the name of MERS in the event deregistration from the MERS System
is necessary or desirable, (iii) at all times remain in full compliance all
terms and conditions of membership in MERS, including the MERSCORP "Rules of
Membership" most recently promulgated by MERSCORP, Inc., the "MERS Procedures
Manual" most recently promulgated by MERS, and any and all other guidelines or
requirements set forth by MERS or MERSCORP, as each of the foregoing may be
modified from time to time, including, but in no way limited to compliance with
guidelines and procedures set forth with respect to technological capabilities,
drafting and recordation of mortgages, registration of mortgages on the MERS
System, including registration of the interest of the Agent and the Banks in
such mortgages and membership requirements, (iv) promptly, upon the request of
the Agent, execute and deliver to the Agent an assignment of mortgage, in blank,
with respect to any MERS Mortgage that the Agent determines shall be removed
from the MERS System, (v) immediately deliver to Agent any notices provided by
MERS pursuant to Paragraph 4(a) of the Electronic Tracking Agreement, and (vi)
at all times maintain the Electronic Tracking Agreement in full force and
effect.
B. The Company shall not de-register or attempt to de-register
any Qualifying Mortgage from the MERS System unless the Company has complied
with the requirements set forth in the Electronic Tracking Agreement and the
requirements hereof and the Security Agreement relating to a release of
Collateral.
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6.22 Other Acts. Execute and deliver, or cause to be executed and
delivered, to Agent all further documents and perform all other acts and things
which Agent deems necessary or appropriate to protect or perfect its mortgage or
security interests in any property directly or indirectly securing payment of
any indebtedness of the Company to Agent or a Bank.
ARTICLE VII. EVENTS OF DEFAULT
The occurrence of any of the events listed in this Article shall
constitute an event of default under this Agreement ("Event of Default").
7.1 Nonpayment of Indebtedness. Failure of the Company to make any
payment of interest or principal or any other sum, which has become due whether
by acceleration or otherwise, under the terms of the Credit Notes this
Agreement or any other document evidencing or securing indebtedness of the
Company to the Banks or Agent.
7.2 Assignment or Encumbrance. Assignment or attempted assignment by
the Company of this Agreement, any rights hereunder, or any Advance to be made
hereunder, without first obtaining the specific written consent of the Majority
Banks, or the granting by the Company of any security interest, lien or other
encumbrance other than to Agent on any Collateral.
7.3 Insolvency Proceedings. The filing by or against the Company of
a petition for liquidation, reorganization, arrangement or adjudication as a
bankrupt or similar relief under the bankruptcy, insolvency or similar laws of
the United States or any state or territory thereof or of any foreign
jurisdiction; the failure of the Company to secure dismissal of any such
petition filed against it within thirty days of such filing; the making of any
general assignment by the Company for the benefit of creditors; the appointment
of a receiver or trustee for the Company or
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for any part of the Company's assets; the institution by the Company of any
other type of insolvency proceeding (under the Bankruptcy Code or otherwise) or
of any formal or informal proceeding, including, without limitation, proceedings
by the Federal Deposit Insurance Corporation or other governmental authority,
for the dissolution or liquidation of, settlement of claims against, or winding
up of the affairs of, the Company; the institution of any such proceeding
against the Company if the Company shall fail to secure dismissal thereof within
thirty days thereafter; the consent by the Company to any type of insolvency
proceeding against the Company (under the Bankruptcy Code or otherwise); or the
occurrence of any event or existence of any condition which could be the ground,
basis or cause for any proceeding or petition described in this Section.
7.4 Misrepresentation. If any certificate, statement,
representation, warranty or audit heretofore or hereafter furnished by or on
behalf of the Company pursuant to or in connection with this Agreement or
otherwise (including, without limitation, representations and warranties
contained herein) or as an inducement to a Bank to extend any credit to or to
enter into this or any other agreement with the Company proves to have been
false in any material respect at the time as of which the facts therein set
forth were stated or certified or to have omitted any substantial contingent or
unliquidated liability or claim against the Company, or if on the Agreement Date
there shall have been any materially adverse changes in any of the facts
previously disclosed by any such certificate, statement, representation,
warranty or audit, which change shall not have been disclosed to Agent at or
prior to the time of such execution.
7.5 Materially Adverse Changes. Any materially adverse change in the
financial condition of the Company or the existence of any other condition
which, in Agent's sole
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determination, constitutes an impairment of the Company's ability to perform its
obligations under this Agreement or any other document evidencing or securing
the Credit ("Material Adverse Change"), and which condition is not remedied
within ten days after written notice to the Company thereof or, if the condition
cannot be fully remedied within said ten days, substantial progress has not been
made within said ten days toward remedy of the condition.
Such Materially Adverse Change may include, but shall not be limited
to (a) the sale, assignment, transfer or delivery of all or substantially all of
the assets of the Company; (b) the cessation by the Company as a going business
concern; (c) the entry of judgment against the Company other than a judgment for
which the Company is fully insured, if ten days thereafter such judgment is not
satisfied, vacated, bonded or stayed pending appeal; (d) the failure of the
Company to pay its debts as such debts become due; or (e) nonpayment by the
Company when due of any indebtedness for borrowed money owing to any third
party, or the occurrence of any event which could result in acceleration of
payment of any such indebtedness.
7.6 Failure to Perform Obligations. Default by the Company in the
performance of any of the other terms, conditions or covenants contained in this
Agreement or any agreement or document made in connection with this Agreement
which is not remedied within ten days after notice thereof by Agent to the
Company.
7.7 Pension Default. Any Reportable Event which Agent determines in
good faith constitutes grounds for the termination of any Pension Plan by the
Pension Benefit Guaranty Corporation or for the appointment by an appropriate
United States district court of a trustee to administer any Pension Plan shall
have occurred and continued thirty days after written notice thereof to the
Company by Agent; or the Pension Benefit Guaranty Corporation shall have
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instituted proceedings to terminate any Pension Plan or to appoint a trustee to
administer any Pension Plan; or a trustee shall be appointed by an appropriate
United States district court to administer any Pension Plan; or any Pension Plan
shall be terminated; or the Company withdraws from a Pension Plan in a complete
withdrawal or a partial withdrawal; or the Company shall fail to pay to any
Pension Plan any contribution which it is obligated to pay under the terms of
such plan or any agreement, or which is required to meet statutory minimum
funding standards.
7.8 Change in Management. A substantial change in the management of
the Company to which the Banks have not consented.
7.9 Events Affecting Guarantor(s). The occurrence with respect to
any Guarantor of an event or condition described in Sections 7.1, 7.2, 7.3, 7.5
or 7.8 hereof.
ARTICLE VIII. REMEDIES UPON DEFAULT
8.1 Default - Insolvency. Upon the happening of one or more Events
of Default under Section 7.3 hereof, the Bank's obligations to advance the
Credit shall be canceled immediately, automatically and without notice, and the
Credit Notes shall become immediately due and payable without presentation,
demand or notice of any kind.
8.2 Remedies; Certain Demands for Payment.
A. Upon the occurrence of a Default or Event of Default, Agent
shall upon the request of the Majority Banks notify the Company thereof if
required under Article VII.
B. If an Event of Default shall have occurred, Agent shall,
upon the request of the Majority Banks, take any or all of the following
actions: (i) terminate the obligations of the Banks under this Agreement, (ii)
demand immediate payment of the Credit
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Notes., and (iii) with respect to MERS Loans, direct MERS, pursuant to the
Electronic Tracking Agreement, to remove the Company from the "Servicer"
category on the MERS System and insert in place thereof, the Agent or its
designee, or direct MERS to take such other action with respect to the MERS
Loans as the Agent deems advisable. If, following the request of the Majority
Banks that Agent do so, Agent fails or refuses to demand payment of any Bank's
Credit Note within three (3) Business Days after such Bank's request to Agent
that such demand be made, then such Bank shall have the right to make demand
directly to the Company for payment of such Bank's Credit Note. Any Bank making
a demand pursuant to its rights under this Section 8.2 shall promptly notify
Agent that such demand has been made. If Agent or any Bank has knowledge of the
existence of a Default or Event of Default or of any other condition which may
materially adversely affect the Company's ability to fulfill its obligations
under this Agreement, Agent or such Bank shall promptly notify each other Bank
of such Default, Event of Default or condition; provided, however, that neither
the Agent nor any Bank shall be liable to any other Bank hereunder as a result
of any failure to give the aforesaid notice, except if such failure is caused by
gross negligence or willful misconduct. In addition to the foregoing rights of
Agent and each Bank, upon the occurrence of an Event of Default the following
procedures shall govern the rights of the parties:
(i) Agent shall promptly, and in no event later than
seven (7) Business Days after acquiring knowledge of an Event of Default, so
notify the Company and consult with the Banks by telephone, and at the option of
Agent or the Majority Banks, shall promptly thereafter, call a meeting of the
Banks for the purpose of determining what actions, if any, should be taken with
respect to such Event of Default. To call such meeting, Agent shall
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provide notice thereof, which notice shall be sent to the Banks at least five
(5) Business Days prior to the meeting. The meeting shall be held at such time
and place as Agent shall reasonably determine.
(ii) Only the Banks shall be entitled to vote at the
meeting but counsel to each Bank also shall be entitled to be present and to
speak at the meeting. Agent may make such reasonable regulations as it may deem
advisable concerning such meeting or any adjournment thereof.
(iii) The Majority Banks shall constitute a quorum at
the meeting.
(iv) Each Bank, or its proxy, shall be entitled to the
number of votes between 1 and 100 equal to such Bank's Pro Rata Share (adjusted
for Delinquent Payments and Excess Payments, if any), with fractional amounts
being rounded to the nearest whole number. Except for matters as to which the
action of the Banks is required hereby, any act of the Majority Banks at the
time of the meeting or any adjournment thereof shall be the act of the Banks.
(v) At the meeting or any adjournment thereof, the
Majority Banks, by resolution duly approved and adopted as herein provided,
shall determine what actions, if any, Agent and the Banks should institute with
respect to outstanding Advances, and Agent shall take whatever steps as may be
necessary to implement and effect the resolution so adopted and approved in
accordance with the terms and provisions thereof.
(vi) The Banks may, by unanimous written consent, make
such other arrangements with respect to meetings and voting as they deem
advisable.
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C. If an Event of Default shall have occurred, upon direction
by the Majority Banks, Agent shall take any one or more of the following
actions:
(i) Declare the entire unpaid balances of the Credit
Notes, together with all accrued and unpaid interest thereon, and any other
obligations secured hereby to be immediately due and payable, whereupon such
balances shall be immediately due and payable.
(ii) Reduce any claim of any Bank to judgment and
enforce any such judgment against the Company or any successor or assign of
the Company.
(iii) Take such steps as the Majority Banks may deem
appropriate, including without limitation sale of Qualifying Mortgages to
Investors pursuant to Commitments, foreclosure upon or other enforcement of the
Security Interest and any and all other liens and Security Interests granted to
secure payment and performance of the Credit Notes and all other obligations
hereunder.
(iv) Receive and collect all sums payable to the Company
in respect of the Collateral and in such case (i) Agent 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 so to do, (ii) the Company shall, if Agent so requests, forthwith pay
to Agent all amounts thereafter received by the Company upon or in respect of
any of the Collateral, advising Agent as to the source of such funds, and (iii)
all amounts so received and collected by Agent shall be held by it as part of
the Collateral.
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(v) Exercise any and all rights as the Majority Banks
shall deem appropriate, including, but not limited to, rights at law, in equity
or otherwise, afforded by the Uniform Commercial Code of New York or of another
relevant jurisdiction, or by this Agreement or any document delivered pursuant
hereto.
D. If an Event of Default shall have occurred, and subject to
the provisions of this Section 8.2, each Bank acting through Agent shall have
all the rights and remedies of a secured party under Article 9 of the Uniform
Commercial Code of the State of New York, or any other applicable law, and all
rights provided for herein. Without limiting the generality of the foregoing, if
an Event of Default shall have occurred, Agent, if so directed by the Majority
Banks, shall (i) apply the cash, if any, then held by it as Collateral to the
payment of all the Credit Notes and all other amounts secured hereby and (ii) if
there shall be no cash or the cash so applied shall be insufficient to pay such
Credit Notes and all other amounts secured thereby in full, sell the Collateral,
or any part thereof, at public or private sale or at any broker's board or on
any securities exchange, for cash, upon credit or for future delivery, and at
such price or prices as Agent may reasonably deem satisfactory, and Agent or any
Bank may be the purchaser of any or all of the Collateral so sold and thereafter
hold the same absolutely, free from any right or claim of whatsoever kind. Agent
is authorized, at any such sale, if it deems it advisable so to do, to restrict
the prospective bidders or purchasers to persons who will represent and agree
that they are purchasing for their own account, for investment, and not with a
view to the distribution or sale of any of the Collateral. Upon any such sale
Agent shall have the right to deliver, assign and transfer to the purchaser
thereof the Collateral so sold. Each purchaser at any such sale shall hold the
property sold absolutely, free from any claim or right of whatsoever kind,
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including any equity or right of redemption of the Company, and the Company
hereby specifically waives all rights of redemption, stay or appraisal which it
has or may have under any rule of law or statute now existing or hereafter
adopted. Agent shall give the Company ten (10) days notice of intention to make
any such public or private sale or sale at a broker's board or on a securities
exchange, provided, however, that if either (i) Agent determines, in its sole
discretion, that the delay of any public or private sale resulting from the
giving of such notice would adversely affect the amount realized from such sale
or (ii) such sale is made pursuant to a Commitment or Commitments, then Agent
shall have no obligation to give the Company any notice with respect to any such
public or private sale or sale at a broker's board or on a securities exchange,
except to the extent such notice is required by applicable law and provided
further, however, that the Company hereby expressly waives the right to any such
notice to the extent permitted by applicable law. To the extent that any notice
is to be given in accordance with the immediately preceding sentence, such
notice, in case of public sale, shall state the time and place fixed for such
sale, and, in case of sale at a broker's board or on a securities exchange,
shall state the board or exchange at which such sale is to be made and the day
on which the Collateral, or that portion thereof so being sold, will first be
offered for sale at such board of exchange. Any such public sale shall be held
at such time or times within the ordinary business hours and at such place or
places as Agent may fix in the notice of such sale. At any such sale the
Collateral may be sold in one lot as an entirety or in separate parcels, as
Agent may determine. Agent shall not be obligated to make any sale pursuant to
any such notice. Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any
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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 Agent until the selling price is paid by the
purchaser thereof, but neither Agent nor any Bank 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. Agent may, however, instead of exercising the power of sale herein
conferred upon it, proceed by a suit or suits at law or in equity to collect all
amounts due upon the Collateral, and/or to foreclose the pledge and sell the
Collateral or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction.
E. Neither Agent nor any Bank shall incur any liability as a
result of any commercially reasonable sale of the Collateral, or any part
thereof, at any private sale. The Company hereby waives any claims it may have
against Agent or any Bank 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 secured hereby, even if Agent accepts the first offer received and does
not offer the Collateral to more than one offeree.
F. The Company waives any right to require Agent or the Banks
to (i) proceed against any person, (ii) proceed against or exhaust any of the
Collateral or pursue its rights and remedies as against the Collateral in any
particular order, or (iii) pursue any other remedy in its power. Agent shall not
be required to take any steps necessary to preserve any rights of the Company
against holders of any liens or encumbrances prior in lien to the lien of any
Qualifying Mortgage.
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G. Agent 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 Qualifying Mortgage or to
preserve any other Collateral pledged under this Agreement, including, without
limitation, payment of delinquent taxes or assessments and insurance premiums.
The Company shall pay to Agent from time to time, on demand, all advances,
charges, costs and expenses, including reasonable attorneys' fees, incurred or
paid by Agent or any Bank in exercising any right, power or remedy conferred by
this Agreement, or in the enforcement hereof, together with interest thereon at
the rate per annum of 2% over the Prime Rate (as such term is defined in the
Credit Notes) from the time of payment until repaid, and the obligation to make
such payment shall be secured by the Security Interest.
H. No failure on the part of Agent or any Bank to exercise,
and no delay in exercising, any right, power or remedy hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise by Agent or any
Bank of any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies herein provided are cumulative and are not exclusive of any remedies
provided by law.
8.3 Application of Proceeds. The proceeds of any sale or enforcement
of all or any part of the Collateral shall be applied by Agent:
First, to the payment of the costs and expenses of such sale
or enforcement, including reasonable compensation to Agent's and the Banks'
agents and counsel, and all expenses, liabilities and advances made or incurred
by Agent and the Banks in connection therewith;
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Second, to the payment of the Swingline Note;
Third, to the payment of the Pro Rata Share of each Bank of
all accrued and unpaid interest due and owing on the Credit Notes;
Fourth, to the payment of the Pro Rata Share of each Bank of
all unrepaid principal of the Credit Notes;
Fifth, to the payment of the Pro Rata Share of each Bank of
all other amounts owed by the Company in respect of this Agreement and the
Credit Notes; 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 are insufficient to cover the
amounts described in clauses First through Fifth, inclusive, above, the Company
shall remain liable for any deficiency.
ARTICLE IX. RELATIONSHIP OF THE AGENT AND THE BANKS
9.1 Appointment and Authorization. Each Bank hereby appoints Agent
to act, and Agent hereby agrees to act as agent in connection with the
day-to-day administration of the Credit, and for such other specific purposes as
are set forth herein and for such purposes irrevocably authorizes the Agent to
take such action and to exercise such rights, powers and discretions as are
specifically delegated to the Agent in this Agreement, together with all rights,
powers and discretions as are reasonably incidental thereto, including, without
limitation, the power to execute financing or similar statements or notices and
other related documents relating to the transactions contemplated hereby. The
Agent may perform any of its functions and duties
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under this Agreement by or through any agents or any of its directors, officers
or employees. In performing any of its functions and duties under this
Agreement, the Agent shall not be deemed to be acting as a trustee for, or
partner of, any Bank or to have assumed any relationship of trust or partnership
with or for the Company. Each Bank agrees that the Collateral shall be granted
to the Agent for the benefit of the Banks, and that each Bank shall have an
undivided interest therein equal to its Pro Rata Share of the principal amount
of the Credit outstanding.
9.2 No Other Duties. The Agent shall have no duties or obligations
other than those expressly provided for in this Agreement, and neither the Agent
nor any of its directors, officers, employees or agents, shall be liable for any
action taken or omitted to be taken in connection with this Agreement, the
documents evidencing and securing the Credit, the negotiation, preparation or
execution thereof, or in connection with the syndication, implementation or
administration of the Credit, unless directly resulting from the Agent's, or
such directors', officers', employees' or agents' gross negligence or willful
misconduct. The duties of the Agent shall be mechanical and administrative in
nature; the Agent shall not, by reason of this Agreement, have a fiduciary
relationship in respect of any Bank; and nothing in this Agreement, expressed or
implied, is intended or shall be construed to impose upon the Agent any
obligations in respect of this Agreement or any document in connection herewith
except as expressly set forth herein in such documents and this Agreement.
9.3 Certain Rights of Agent; Limitations Thereon.
A. If the Agent shall request instructions from the Banks with
respect to any act or action (including failure to act) in connection with this
Agreement or any other document related thereto, the Agent shall be entitled to
refrain from such act or taking such
- 56 -
action (except action required in connection with the day-to-day administration
of the Credit) unless and until the Agent shall have received instructions from
the Majority Banks or, if so required hereby from each Bank; and the Agent shall
not incur liability by reason of so refraining. The Agent shall be fully
justified in failing or refusing to take any action hereunder or under this
Agreement or any document related hereto (i) if such action would, in the
opinion of the Agent, be contrary to law or the terms of this Agreement or any
document related hereto, or (ii) if it shall not receive such advice or
concurrence of the Majority Banks or the Banks, as applicable, as it deems
appropriate. Without limiting the foregoing, no Bank shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder or under any document related hereto, in
accordance with the instructions of the Majority Banks or of the Banks, as
applicable.
B. The Agent may without liability to the Company or any Bank,
(i) rely and shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telephone notice, telex or teletype message, statement, order or other document
or conversation believed by Agent in good faith to be genuine and correct and to
have been signed, sent or made by the person or persons by whom it purports to
have been communicated or signed and (ii) employ in Agent's sole discretion and
(except in cases where the consent of the Majority Banks or the Banks is
required hereby) in good faith rely on the advice and opinions received by it
from any professional adviser, including, without limitation, legal counsel,
independent accountants or other experts, and the Company and each Bank hereby
waives any claim or action it may have against the Agent arising out of or
resulting from such employment or reliance.
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C. Notwithstanding anything to the contrary herein, Agent
shall not, without the prior written consent of the Banks, (i) amend this
Agreement in any material respect, provided, however, that the Agent shall
notify the Banks in writing of any other changes made to this Agreement, minor,
corrective or otherwise, (ii) waive any material right hereunder, (iii) waive
any material condition to the right of the Company to receive an Advance, (iv)
forgive or reduce any indebtedness of the Company hereunder, (v) extend the
maturity date of any payment due from the Company hereunder, or (vi) change the
interest rate nor the maximum amount of the Credit. The Banks and Agent agree
that waivers with respect to collateral exceptions (including, but not limited
to, delinquencies or insufficiencies in timing or delivery requirements set
forth herein for those mortgage loans which are security hereunder) up to an
aggregate Advance amount of FIVE MILLION DOLLARS ($5,000,000.00) shall not be
deemed material hereunder and Agent is hereby granted the right to unilaterally
grant or refrain from granting such waivers in its sole discretion without
further consent of any Bank.
9.4 Waiver of Liability of Agent. The Agent shall not have any
liability or, as the case may be, any duty or obligation:
A. To the Company on account of any failure of any Bank to
perform, or the delay of any Bank in the performance of, any of its or their
respective obligations under this Agreement or any of the other documents in
connection herewith;
B. To any Bank on account of any failure or delay in
performance by the Company of any of its obligations under this Agreement or any
of the other documents in connection herewith;
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C. To any Bank for (i) the accuracy of any written or oral
statements furnished or made by the Company or by any person on behalf of the
Company in connection with the Credit, (ii) the accuracy of any representation,
warranty or statement made by the Company in or pursuant to this Agreement or
any of the other documents in connection herewith, or (iii) the legality,
validity, effectiveness, enforceability or sufficiency of this Agreement, any
other document in connection herewith, or any other document referred to herein;
D. To any Bank to provide either initially or on a continuing
basis (except as expressly required in this Agreement) any information with
respect to the Company or its condition, or for analyzing or assessing or
omitting to analyze or assess the status, creditworthiness or prospects of the
Company;
E. To any Bank to investigate (except under circumstances in
which a reasonably prudent lender would investigate) whether or not any Event of
Default has occurred (and the Agent may assume that, until Agent shall have
actual knowledge to the contrary, no such Event of Default has occurred);
F. To any Bank to account for any sum or profit or any
property of any kind received by Agent arising out of any present or future
banking or other relationship with the Company except the relationship
established pursuant to this Agreement;
G. To any Bank to disclose any information relating to the
Company received by Agent if, in Agent's determination (such determination to be
conclusive) such disclosure would or might constitute a breach of any law or
regulation; and
H. To take any action or refrain from taking any action other
than as expressly required by this Agreement.
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9.5 Non-Reliance on Agent and Other Banks. Each Bank expressly
acknowledges that neither the Agent nor any affiliate of Agent has made any
representations or warranties to such Bank and that except as specifically set
forth herein, no act by the Agent hereinafter taken, including any review of the
affairs of the Company, shall be deemed to constitute any warranty by the Agent
to any Bank. Each Bank represents to the Agent that it has, independently and
without reliance upon the Agent or any other Bank, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the financial condition, creditworthiness, affairs, status
and nature of the Company and made its own decision to enter into this
Agreement, and each Bank hereby releases the Agent from any and all liability to
such Bank in connection with the Agent's investigation and appraisal of the
Company's financial affairs, financial condition, and creditworthiness. Each
Bank also represents that it will, independently and without reliance upon the
Agent or any other Bank, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
to make such investigation as it deems necessary to inform itself as to the
status and affairs, financial or otherwise, of the Company. Except as
specifically required hereby, the Agent shall not be required to keep itself
informed as to the performance or observance by the Company of this Agreement or
any other document referred to or provided for herein or to inspect the
properties or books of the Company. Except for notices, reports, and other
documents and information expressly required to be furnished to the Banks by the
Agent under this Agreement, the Agent shall have no duty or responsibility to
provide any Bank with
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any credit or other information concerning the affairs, financial condition or
business of the Company which may come into the possession of the Agent.
9.6 Release. At all times until the Credit has been paid in full,
the Agent shall exercise the same degree of care in handling the Credit and its
Collateral as HSBC exercises with respect to loans that are held solely by HSBC
for its own account, and the Agent shall have no responsibility to the Banks
other than to exercise such standard of care and, in any event HSBC shall have
no liability with respect to any other Bank's Pro Rata Share interest in the
Credit except for HSBC's own fraud, gross negligence or willful misconduct.
Except in the case of its own fraud, gross negligence or willful misconduct,
neither the Agent, any Bank nor any of their officers, directors employees,
attorneys or agents (the "Indemnified Parties") shall be liable for any action
taken or omitted to be taken by it or them under this Agreement, the Credit
Notes or any transaction contemplated hereby reasonably believed by it or them
to be within the discretion or power conferred upon it or them by this Agreement
or be responsible for consequences of any error of judgment, the Banks expressly
intending to hereby waive and release all present and future claims and rights
against the Agent (i) owed, in whole or in part, under any claim or theory of
strict liability, or (ii) for damages or injures caused or contributed to by any
Indemnified Party's sole or concurrent ordinary negligence that does not amount
to gross negligence or willful misconduct. Except as otherwise specifically and
expressly set forth in the Agreement, the Agent shall not be responsible in any
manner to anyone for the effectiveness, enforceability, genuineness, validity or
the due execution of the Agreement, any supplement, amendment or restatement of
it or of the Credit Notes or for any representation, warranty, document,
certificate, report or statement made or furnished in, under or in connection
with this
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Agreement or any of the Credit Notes or be under any obligation to anyone to
ascertain or to inquire as to the performance or observation of any of the
terms, covenants or conditions of the Agreement on the part of the Company or
anyone else. Without limiting the generality of the foregoing provisions of this
Section, the Agent may seek and rely upon the advice of legal counsel in taking
or refraining to take any action under this Agreement or the Credit Notes or
with the consent of the Majority Banks or the Banks if such consent is required
hereby and shall be fully protected in relying upon such advice. The agreements
in this Section 9.6 shall survive the payment of the Credit Notes and the
termination of this Agreement.
9.7 Agent in Its Individual Capacity. With respect to its Pro Rata
Share of the Credit, the Agent shall have the same rights and powers under this
Agreement as any Bank and may exercise the same as though it were not the Agent,
and the terms "Bank" and "Majority Banks" shall, unless the context otherwise
indicates, include the Agent in its individual capacity.
9.8 Successor Agent. The Agent may resign at any time by giving at
least sixty (60) days prior written notice thereof to the Banks and the Company.
In addition, the Majority Banks shall have the right to remove the Agent without
cause by giving Agent and the Banks at least sixty (60) days prior written
notice thereof. The Agent shall automatically become disqualified to act as such
upon the appointment of a receiver or conservator of Agent. Upon any such
resignation, removal or disqualification, the Majority Banks shall have the
right to appoint a successor agent, which shall be reasonably acceptable to the
Company. If no successor agent shall have been so appointed by the Majority
Banks and shall have accepted such appointment within one hundred twenty (120)
days after the retiring Agent's giving of notice of resignation, then the
retiring Agent may, on behalf of the Banks, appoint a successor agent, which
shall be a
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bank reasonably acceptable to the Company. Upon the acceptance of any
appointment as agent hereunder by a successor agent, such successor agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent. After any retiring Agent's resignation, the
provisions of this Article IX, including, without limitation, the indemnity
provisions of Section 9.7 hereof, shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
Resignation, removal or disqualification of Agent shall not affect the status of
HSBC Bank USA as a Bank.
9.9 Benefit of Article IX. The provisions of this Article IX are
intended solely for the benefit of the Agent and the Banks. The Company shall
not be entitled to rely on any such provisions or assert any such provisions in
a claim, or as a defense, against the Agent or any Bank. The Company shall,
however, be entitled to rely without further inquiry on the authority of Agent
as to acts taken by it.
9.10 MERS. The Banks and the Company hereby confirm the appointment
of the Agent as the agent for the Banks with respect to MERS Loans. The Agent
hereby confirms that it is a MERS member in good standing and in compliance with
all rules, regulations, procedures, and requirements set forth by MERS,
including, but not limited to, the payment of membership fees.
ARTICLE X. DOCUMENTATION AGENT
A. No Bank identified in this Agreement as the "Documentation
Agent" shall have any rights, powers, obligations, liabilities,
responsibilities, or duties under this Agreement other than those applicable to
all Banks as such.
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B. Resignation, disqualifications and succession of
Documentation Agent shall be governed by the provisions of Section 9.8.
ARTICLE XI. INDEMNIFICATION AND EXPENSES
The Company agrees to hold Agent and each Bank harmless from and
indemnifies Agent and each Bank against all liabilities, losses, damages,
judgments, costs, and expenses of any kind which may be imposed on, incurred by,
or asserted against Agent or a Bank relating to or arising out of this
Agreement, the Credit Notes, or any transaction contemplated hereby including
any claims based on or caused by the sole or concurrent ordinary negligence that
does not amount to gross negligence or willful misconduct on the part of the
Agent or any Bank. The Company also agrees to reimburse Agent and each Bank for
all reasonable expenses in connection with this Agreement and the Credit Notes,
including without limitation the reasonable fees and disbursements of counsel,
all delivery and insurance charges incurred in connection with delivery of Loan
Documents except as otherwise specifically provided herein, wire transfer fees
and the travel expenses of Agent's officers in connection with the transactions
contemplated hereby and including expenses of enforcement. The Company's
agreements in this Section shall survive the payment in full of the Credit Notes
and the expiration or termination of this Agreement.
ARTICLE XII. MISCELLANEOUS
12.1 Amendments and Waivers. Any amendment or modification of this
Agreement or waiver of any term, provision or requirement hereof or thereof,
shall require the affirmative written consent of the Agent and the Majority
Banks; provided, notwithstanding anything herein to the contrary, the following
shall require the affirmative written consent of the
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Agent and all of the Banks: (i) except as permitted under the terms of this
Agreement, the release of any part of the Collateral from the liens arising
herefrom; (ii) the termination, cancellation or release of this Agreement; (iii)
the decrease in the interest rate(s) borne by the Advances, other than decreases
in the interest rate(s) borne by the Advances by virtue of any decreases or
changes expressly contemplated in the Credit Notes; (iv) any reduction in the
amount of the installments of principal due under this Agreement or the Credit
Notes or in the aggregate principal amount of principal due thereunder; (v) any
extension of the Term or the due dates of any installments of principal of
and/or accrued interest on the Credit Notes; (vi) any change in the definition
of the term "Majority Banks"; or (vii) any amendment to any section of this
Agreement that expressly requires the consent of all of the Banks.
12.2 Delays and Omissions. No course of dealing and no delay or
omission by Agent or a Bank in exercising any right or remedy hereunder or with
respect to any indebtedness of the Company to Agent or a Bank shall operate as a
waiver thereof or of any other right or remedy, and no single or partial
exercise thereof shall preclude any other or further exercise thereof or the
exercise of any other right or remedy. Agent may remedy any default by the
Company hereunder or with respect to any other person, firm or corporation in
any reasonable manner without waiving the default remedied and without waiving
any other prior or subsequent default by the Company and shall be reimbursed by
the Company for its expenses in so remedying such default. All rights and
remedies of Agent and the Banks hereunder are cumulative.
12.3 Attorney-in-fact. The Company hereby authorizes Agent, at the
Company's expense, to file such financing statement or statements relating to
the Collateral
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without the Company's signature thereon as Agent at its option may deem
appropriate, and appoints Agent as the Company's attorney-in-fact (without
requiring Agent) to execute any such financing statement or statements in the
Company's name and to perform all other acts which Agent deems appropriate to
perfect and continue the Security Interest and to protect, preserve and realize
upon the Collateral, including, but not limited to, the right to endorse notes,
complete blanks in documents and sign assignments on behalf of the Company as
its attorney-in-fact. This Power of Attorney is coupled with an interest and is
irrevocable without Agent's consent.
12.4 Collection. Agent may demand, collect and xxx on any of the
Collateral (in either the Company's or Agent's name at the latter's option); may
enforce, compromise, settle or discharge such Collateral without discharging the
indebtedness or any part thereof; and may endorse the Company's name on any and
all checks, commercial paper, and any other instruments pertaining to or
constituting Collateral. In the event Agent intends to exercise any rights set
forth in this Section, Agent shall use its best efforts to notify the Company
thereof prior to taking any such action.
12.5 Further Security. As further security for payment of the
indebtedness, the Company hereby grants to each Bank a Security Interest in and
lien on any and all property of the Company which is or may hereafter be in the
possession or control of said Bank in any capacity or of any third party acting
on its behalf, including, without limitation, all deposit and other accounts and
all moneys owed or to be owed by said Bank to the Company; and with respect to
all of such property, said Bank shall have the same rights hereunder as it has
with respect to the Collateral. Without limiting any other right of Agent or the
Banks, whenever Agent has the right to declare any indebtedness to be
immediately due and payable (whether or
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not it has so declared), each Bank at its sole election may set off against the
indebtedness any and all moneys then or thereafter owed to the Company by said
Bank in any capacity, whether or not the indebtedness or the obligation to pay
such moneys owed by said Bank is then due, and said Bank shall be deemed to have
exercised such right of setoff immediately at the time of such election even
though any charge therefor is made or entered on said Bank's records subsequent
thereto.
12.6 Return of Collateral Under Trust Receipt. Possession of any of
the Collateral (including original notes evidencing Qualifying Mortgages) may be
temporarily relinquished by Agent to the Company under a trust receipt for the
sole purpose of sale, exchange, collection, or presentation, renewal or
registration of transfer. At all times the Collateral is in the Company's
possession, the Company will hold the Collateral in trust so as to continue the
perfection of Agent's Security Interest.
12.7 Loss of Loan Documents. Once Loan Documents have been delivered
to a postal or delivery service, Agent shall incur no liability of any kind in
connection with loss or delay in connection with the transmittal of Loan
Documents to or from the Company, any Investor, or any other party pursuant to
this Agreement.
12.8 Successors and Assigns. The Company, Bank, and Agent as used
herein shall include the legal representatives or assigns of those parties in
cases where the assignment was made with the consent required hereunder.
12.9 Notices. Any notice or demand to be given hereunder shall be
duly given if delivered or mailed to the respective parties at their Notice
Address and shall be deemed effective upon receipt.
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12.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when duly executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
Agreement.
12.11 Titles. Titles to the sections of this Agreement are solely
for the convenience of the Parties, and are not an aid in the interpretation of
this Agreement or any part thereof.
12.12 Inconsistent Provisions. In the event any provision of this
Agreement is inconsistent with any provision of any other document required or
executed pursuant to this Agreement, the provisions of this Agreement shall be
controlling.
12.13 Participation. The Banks reserve the right to transfer
participating interests in this Agreement and in the Credit Notes to one or more
other institutions or entities.
12.14 Entire Agreement. This Agreement and the related documents
identified and referred to herein are intended to set forth the entire agreement
of the parties concerning the subject matter hereof.
12.15 Governing Law. This Agreement and the Credit Note shall be
governed by and are to be construed under the internal laws of the State of New
York.
12.16 CONSENT TO JURISDICTION. COMPANY AGREES THAT ANY ACTION OR
PROCEEDING TO ENFORCE OR ARISING OUT OF THIS DOCUMENT MAY BE COMMENCED IN THE
SUPREME COURT OF NEW YORK IN ERIE COUNTY, OR IN XXX XXXXXXXX XXXXX XX XXX XXXXXX
XXXXXX FOR THE WESTERN DISTRICT OF NEW YORK, AND COMPANY WAIVES PERSONAL SERVICE
OF PROCESS AND AGREES THAT A SUMMONS AND COMPLAINT COMMENCING AN ACTION OR
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PROCEEDING IN ANY SUCH COURT SHALL BE PROPERLY SERVED AND SHALL CONFER PERSONAL
JURISDICTION IF SERVED BY REGISTERED MAIL TO COMPANY AT THE ADDRESS SPECIFIED
ABOVE, OR AS OTHERWISE PROVIDED BY THE LAWS OF THE STATE OF NEW YORK OR THE
UNITED STATES.
12.17 WAIVER OF JURY TRIAL. COMPANY, BANKS AND AGENT HEREBY
KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY WHICH
THEY MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION
WITH THIS DOCUMENT OR THE TRANSACTIONS RELATED HERETO. COMPANY REPRESENTS AND
WARRANTS THAT NO REPRESENTATIVE OR AGENT OF A BANK OR AGENT HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT A BANK OR AGENT WILL NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER. COMPANY ACKNOWLEDGES THAT
THE BANKS AND AGENT HAVE BEEN INDUCED TO ENTER INTO THIS TRANSACTION BY, AMONG
OTHER THINGS, THE PROVISIONS OF THIS SECTION.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their duly authorized officers and their corporate seals to be
hereunto affixed, all as of the Agreement Date.
THE NEW YORK MORTGAGE COMPANY LLC
BY: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
NAME: XXXXXX X. XXXXXXX
TITLE: PRESIDENT
HSBC BANK USA, NATIONAL ASSOCIATION AS
BANK, AGENT AND SWINGLINE LENDER
BY: /s/ Xxxxx X. Xxxxx
____________________________________
Xxxxx X. Xxxxx, Vice President
NATIONAL CITY BANK OF KENTUCKY, AS BANK
AND DOCUMENTATION AGENT
BY: /s/ Xxxxxxx Xxxxx
____________________________________
NAME: __________________________________
TITLE: _________________________________
JPMORGAN CHASE BANK, N.A. AS BANK
BY: /s/ Xxxxxxx X. Xxxxxxxxx
____________________________________
NAME: __________________________________
TITLE: _________________________________
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HSBC BANK USA, NATIONAL ASSOCIATION
AND
THE NEW YORK MORTGAGE COMPANY LLC
FIFTH AMENDED
CREDIT NOTE
Dated as of February 1, 2005
FIFTH AMENDED
CREDIT NOTE
$75,000,000.00 As of February 1, 2005
FOR VALUE RECEIVED, the undersigned, THE NEW YORK MORTGAGE COMPANY
LLC, a limited liability company organized under the laws of the State of New
York, whose address is 1301 Avenue of the Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "Company"), promises to pay to the order of HSBC BANK USA,
NATIONAL ASSOCIATION, successor by merger to HSBC Bank USA, a bank organized
under the laws of the United States of America, with an office at c/o Mortgage
Warehouse Lending Department, 27th Floor, Xxx XXXX Xxxxxx, Xxxxxxx, Xxx Xxxx
00000 ("HSBC") on or before June 29, 2005, or such earlier date as is provided
for in the Credit Agreement as hereinafter defined ("Maturity Date"), in lawful
money of the United States of America, the principal sum of SEVENTY-FIVE MILLION
DOLLARS ($75,000,000.00), or the aggregate unpaid principal amount of all
advances by HSBC to the Company pursuant to the Credit and Security Agreement
among HSBC, National City Bank of Kentucky ("National City"), HSBC as Swingline
Lender, HSBC as Agent, National City as Documentation Agent, and the Company
dated as of December 15, 2003, as amended pursuant to a First Amendment to
Credit and Security Agreement dated as of June 14, 2004, a Second Amendment to
Credit and Security Agreement dated as of June 30, 2004, a Third Amendment to
Credit and Security Agreement dated November 1, 2004 and Fourth Amendment to
Credit and Security Agreement dated as of January 10, 2005 (as such agreement
may be amended, restated, supplemented or otherwise modified from time to time,
the "Credit Agreement"), plus interest thereon from the date hereof, as follows:
INTEREST: Except with respect to Repurchase Loans and Construction
Advances, interest shall accrue on the principal amount outstanding hereon at an
annual rate equal to the rate determined by HSBC to be the average rate per
annum offered on the London Interbank Offering Market for U.S. Dollar deposits
in the amount of this Fifth Amended Credit Note ("Credit Note") or applicable
portion thereof and for a term of 30 days ("LIBOR") plus 100 basis points
(together, the "LIBOR-Based Rate"). Interest shall accrue on the principal
amount of Repurchase Advances outstanding hereon at an annual rate equal to
LIBOR plus 162.5 basis points ("Repurchase Loan Rate"). Interest shall accrue on
the principal amount of Construction Advances outstanding hereon at an annual
rate equal to LIBOR plus 125 basis points ("Construction Loan Rate"). The
LIBOR-Based Rate shall be adjusted at the end of each calendar month to the rate
equal to the LIBOR-Based Rate determined by reference to the then-current LIBOR.
The Repurchase Loan Rate shall be adjusted at the end of each calendar month to
the rate equal to the Repurchase Loan Rate determined by reference to the
then-current LIBOR. The Construction Loan Rate shall be adjusted at the end of
each calendar month to the rate equal to the Construction Loan Rate determined
by reference to the then-current LIBOR. Accrued interest shall be paid monthly
on the tenth business day of each month after the date
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hereof. Interest shall be calculated on the basis of 1/360 of the annual
interest at the applicable rate on the outstanding principal balance for each
day such balance is outstanding, thus increasing the effective rate of interest,
and shall continue to accrue at such rate until the principal balance is paid in
full, regardless of whether the principal has become due by reason of default or
otherwise, except as otherwise provided herein.
MAXIMUM RATE OF INTEREST: It is intended that the rate of interest
hereon shall never exceed the maximum rate, if any, which may be legally charged
on the loan evidenced by this Credit Note ("Maximum Rate"), and if the
provisions for interest contained in this Credit Note would result in a rate
higher than the Maximum Rate, interest shall nevertheless be limited to the
Maximum Rate and any amounts which may be paid toward interest in excess of the
Maximum Rate shall be applied to the reduction of principal, or, at the option
of HSBC, returned to the Company.
MAXIMUM PRINCIPAL AMOUNT Notwithstanding anything to the contrary
contained in this Credit Note, commencing February 1, 2005 the maximum principal
amount of this Credit Note shall not exceed SEVENTY-FIVE MILLION DOLLARS
($75,000.00).
DUE DATE: All indebtedness evidenced hereby not paid before the
Maturity Date shall be due and payable on the Maturity Date.
PLACE OF PAYMENT: All payments hereon shall be made, and all notices
to HSBC required or authorized hereby shall be given, as set forth in the Credit
Agreement.
PAYMENT AND EXPENSES OF COLLECTION: All amounts payable hereunder
are payable in lawful money of the United States. Payments received by HSBC
after 2:00 p.m. HSBC's local time shall be deemed to be received on the next
following business day. Notwithstanding the foregoing, a payment will not be
deemed to have been received unless by 2:00 p.m. HSBC's local time HSBC shall
have received a completed "Repayment Schedule" on HSBC's form, listing the
Qualifying Mortgages (as defined in the Credit Agreement) to which the payment
pertains. The Company agrees to pay all costs of collection when incurred,
including, without limiting the generality of the foregoing, reasonable
attorneys' fees through appellate proceedings, and to perform and comply with
each of the covenants, conditions, provisions and agreements contained in every
instrument now evidencing or securing said indebtedness. If any suit or action
be instituted to enforce this Credit Note, the Company promises to pay, in
addition to the cost and disbursements otherwise allowed by law, such sum as the
court may adjudge reasonable attorneys' fees in such suit or action.
COLLECTION PERIODS: Any check, draft, money order or other
instrument given in payment of all or any portion hereof may be accepted by HSBC
and handled in collection in the customary manner, but the same shall not
constitute payment hereunder or diminish any rights of HSBC except to the extent
that actual cash proceeds of such instrument
-3-
are unconditionally received by HSBC; provided, however, that this Credit Note
shall not be in default as the result of normal collection periods on such
instruments.
LATE PAYMENT CHARGE: The Company promises to pay to HSBC promptly
upon the accrual thereof a late payment charge of 6% of the amount of any
installment payment not paid within ten days of receipt by the Company of the
xxxx for such payment.
INTEREST AFTER NONPAYMENT: If the principal of this Credit Note is
not paid when due, whether by acceleration or otherwise, all unpaid amounts
shall bear interest following said nonpayment at the rate of 5% per annum above
the otherwise applicable interest rate.
DEFAULTS: Upon the happening of an Event of Default (as defined in
the Credit Agreement), HSBC shall have all rights and remedies set forth in the
Credit Agreement.
The failure to exercise any of the rights and remedies set forth in
the Credit Agreement shall not constitute a waiver of the right to exercise the
same or any other option at any subsequent time in respect of the same event or
any other event. The acceptance by HSBC of any payment hereunder which is less
than payment in full of all amounts due and payable at the time of such payment
shall not constitute a waiver of the right to exercise any of the foregoing
rights and remedies at that time or at any subsequent time or nullify any prior
exercise of any such rights and remedies without the express consent of HSBC,
except as and to the extent otherwise provided by law.
WAIVERS: The Company, and any indorsers or guarantors hereof,
severally waive diligence, presentment, protest and demand and also notice of
protest, demand, dishonor and nonpayment of this Credit Note, and expressly
agree that this Credit Note, or any payment hereunder, may be extended from time
to time, and consent to the acceptance of further collateral, the release of any
collateral for this Credit Note, the release of any party primarily or
secondarily liable hereon, and that it will not be necessary for HSBC, in order
to enforce payment of this Credit Note, to first institute or exhaust HSBC's
remedies against the Company or any other party liable hereon or against any
collateral for this Credit Note. None of the foregoing shall affect the
liability of the Company and any indorsers or guarantors hereof. No extension of
time for the payment of this Credit Note, or any installment hereof, made by
agreement by HSBC with any person now or hereafter liable for the payment of
this Credit Note, shall affect the liability under this Credit Note of the
Company, even if the Company is not a party to such agreement; provided,
however, HSBC and the Company, by written agreement between them may affect the
liability of the Company.
TERMINOLOGY: If more than one party joins in the execution of this
Credit Note, the covenants and agreements herein contained shall be the joint
and several obligation of each and all of them and of their respective heirs,
executors, administrators, successor and
-4-
assigns, and relative words herein shall be read as if written in the plural
when appropriate. Any reference herein to HSBC shall be deemed to include and
apply to every subsequent holder of this Credit Note. Words of masculine or
neuter import shall be read as if written in the neuter or masculine or feminine
when appropriate.
CREDIT AGREEMENT: Reference is made to the Credit Agreement for
provisions as to mandatory principal repayments, collateral and acceleration.
APPLICABLE LAW: This Credit Note shall be governed by and construed
under the laws of the State of New York, whose laws the Company expressly elects
to apply to this Credit Note. The Company agrees that any action or proceeding
brought to enforce or arising out of this Credit Note may be commenced in the
New York Supreme Court for the County of Erie, or in the District Court of the
United States for the Western District of New York, and the Company waives
personal service of process and agrees that a summons and complaint commencing
an action or proceeding in any such court shall be properly served and shall
confer personal jurisdiction if served by registered mail to the Company, or as
otherwise provided by the laws of the State of New York or the United States.
WAIVER OF TRIAL BY JURY: The Company hereby knowingly, voluntarily,
unconditionally and irrevocably waives the right to a trial by jury in every
jurisdiction in any action, proceeding or counterclaim brought by or against the
Company, its successors or assigns, in respect of any matter arising out of this
Credit Note or any document given in connection with or to secure this Credit
Note, including without limitation any exercise of rights under this Credit Note
or any such document, any attempt to cancel, void, or rescind this Credit Note
or any such document, and any course of conduct or course of dealing in
connection therewith.
REPLACEMENT: This Note is executed in replacement of, but not in
payment or novation of, the Fourth Amended Credit Note of the Company to HSBC
dated as of January 10, 2005 in the original principal amount of $100,000,000
("Prior Note"). All collateral for the Prior Note shall hereafter secure payment
of this Credit Note.
THE NEW YORK MORTGAGE COMPANY LLC
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: President / CEO
NATIONAL CITY BANK OF KENTUCKY
AND
THE NEW YORK MORTGAGE COMPANY LLC
FIFTH AMENDED
CREDIT NOTE
Dated as of February 1, 2005
FIFTH AMENDED
CREDIT NOTE
$25,000,000.00 As of February 1, 2005
FOR VALUE RECEIVED, the undersigned, THE NEW YORK MORTGAGE COMPANY
LLC, a limited liability company organized under the laws of the State of New
York, whose address is 1301 Avenue of the Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "Company"), promises to pay to the order of NATIONAL CITY BANK
OF KENTUCKY, a national banking association, whose address is 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("National City") on or before June 29, 2005,
or such earlier date as is provided for in the Credit Agreement as hereinafter
defined ("Maturity Date"), in lawful money of the United States of America, the
principal sum of TWENTY-FIVE MILLION DOLLARS ($25,000,000.00), or the aggregate
unpaid principal amount of all advances by National City to the Company pursuant
to the Amended and Restated Credit and Security Agreement among National City,
HSBC Bank USA, National Association, successor by merger to HSBC Bank USA
("HSBC"), JPMorgan Chase Bank, N.A., HSBC as Agent, National City as
Documentation Agent, and the Company dated as of even date herewith, which
amended and restated a Credit and Security Agreement dated as of December 15,
2003, as amended pursuant to a First Amendment to Credit and Security Agreement
dated as of June 14, 2004, a Second Amendment to Credit and Security Agreement
dated as of June 30, 2004, a Third Amendment to Credit and Security Agreement
dated as of November 1, 2004, and Fourth Amendment to Credit and Security
Agreement dated as of January 10, 2005 (as such agreement may be amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"), plus interest thereon from the date hereof, as follows:
INTEREST: Except with respect to Repurchase Loans and Construction
Advances, interest shall accrue on the principal amount outstanding hereon at an
annual rate equal to the rate determined by the Agent to be the average rate per
annum offered on the London Interbank Offering Market for U.S. Dollar deposits
in the amount of this Fifth Amended Credit Note (the "Credit Note") or
applicable portion thereof and for a term of 30 days ("LIBOR") plus 100 basis
points (together, the "LIBOR-Based Rate"). Interest shall accrue on the
principal amount of Repurchase Advances outstanding hereon at an annual rate
equal to LIBOR plus 162.5 basis points ("Repurchase Loan Rate"). Interest shall
accrue on the principal amount of Construction Advances outstanding hereon at an
annual rate equal to LIBOR plus 125 basis points ("Construction Loan Rate"). The
LIBOR-Based Rate shall be adjusted at the end of each calendar month to the rate
equal to the LIBOR-Based Rate determined by reference to the then-current LIBOR.
The Repurchase Loan Rate shall be adjusted at the end of each calendar month to
the rate equal to the Repurchase Loan Rate determined by reference to the
then-current LIBOR. The Construction Loan Rate shall be adjusted at the end of
each calendar month to the rate equal to the Construction Loan Rate determined
by reference to the then-current LIBOR. Accrued interest shall be paid monthly
on the tenth business day of each month after the date
-2-
hereof. Interest shall be calculated on the basis of 1/360 of the annual
interest at the applicable rate on the outstanding principal balance for each
day such balance is outstanding, thus increasing the effective rate of interest,
and shall continue to accrue at such rate until the principal balance is paid in
full, regardless of whether the principal has become due by reason of default or
otherwise, except as otherwise provided herein.
MAXIMUM RATE OF INTEREST: It is intended that the rate of interest
hereon shall never exceed the maximum rate, if any, which may be legally charged
on the loan evidenced by this Credit Note ("Maximum Rate"), and if the
provisions for interest contained in this Credit Note would result in a rate
higher than the Maximum Rate, interest shall nevertheless be limited to the
Maximum Rate and any amounts which may be paid toward interest in excess of the
Maximum Rate shall be applied to the reduction of principal, or, at the option
of National City, returned to the Company.
DUE DATE: All indebtedness evidenced hereby not paid before the
Maturity Date shall be due and payable on the Maturity Date.
PLACE OF PAYMENT: All payments hereon shall be made, and all notices
to National City required or authorized hereby shall be given, as set forth in
the Credit Agreement.
PAYMENT AND EXPENSES OF COLLECTION: All amounts payable hereunder
are payable in lawful money of the United States. Payments received by the Agent
on behalf of National City after 2:00 p.m. Agent's local time shall be deemed to
be received on the next following business day. Notwithstanding the foregoing, a
payment will not be deemed to have been received unless by 2:00 p.m. Agent's
local time Agent shall have received a completed "Repayment Schedule" on Agent's
form, listing the Qualifying Mortgages (as defined in the Credit Agreement) to
which the payment pertains. The Company agrees to pay all costs of collection
when incurred, including, without limiting the generality of the foregoing,
reasonable attorneys' fees through appellate proceedings, and to perform and
comply with each of the covenants, conditions, provisions and agreements
contained in every instrument now evidencing or securing said indebtedness. If
any suit or action be instituted to enforce this Credit Note, the Company
promises to pay, in addition to the cost and disbursements otherwise allowed by
law, such sum as the court may adjudge reasonable attorneys' fees in such suit
or action.
COLLECTION PERIODS: Any check, draft, money order or other
instrument given in payment of all or any portion hereof may be accepted by
National City and handled in collection in the customary manner, but the same
shall not constitute payment hereunder or diminish any rights of National City
except to the extent that actual cash proceeds of such instrument are
unconditionally received by National City; provided, however, that this Credit
Note shall not be in default as the result of normal collection periods on such
instruments.
-3-
LATE PAYMENT CHARGE: The Company promises to pay to National City
promptly upon the accrual thereof a late payment charge of 6% of the amount of
any installment payment not paid within ten days of receipt by the Company of
the xxxx for such payment.
INTEREST AFTER NONPAYMENT: If the principal of this Credit Note is
not paid when due, whether by acceleration or otherwise, all unpaid amounts
shall bear interest following said nonpayment at the rate of 5% per annum above
the otherwise applicable interest rate.
DEFAULTS: Upon the happening of an Event of Default (as defined in
the Credit Agreement), National City shall have all rights and remedies set
forth in the Credit Agreement.
The failure to exercise any of the rights and remedies set forth in
the Credit Agreement shall not constitute a waiver of the right to exercise the
same or any other option at any subsequent time in respect of the same event or
any other event. The acceptance by National City of any payment hereunder which
is less than payment in full of all amounts due and payable at the time of such
payment shall not constitute a waiver of the right to exercise any of the
foregoing rights and remedies at that time or at any subsequent time or nullify
any prior exercise of any such rights and remedies without the express consent
of National City, except as and to the extent otherwise provided by law.
WAIVERS: The Company, and any indorsers or guarantors hereof,
severally waive diligence, presentment, protest and demand and also notice of
protest, demand, dishonor and nonpayment of this Credit Note, and expressly
agree that this Credit Note, or any payment hereunder, may be extended from time
to time, and consent to the acceptance of further collateral, the release of any
collateral for this Credit Note, the release of any party primarily or
secondarily liable hereon, and that it will not be necessary for National City,
in order to enforce payment of this Credit Note, to first institute or exhaust
National City's remedies against the Company or any other party liable hereon or
against any collateral for this Credit Note. None of the foregoing shall affect
the liability of the Company and any indorsers or guarantors hereof. No
extension of time for the payment of this Credit Note, or any installment
hereof, made by agreement by National City with any person now or hereafter
liable for the payment of this Credit Note, shall affect the liability under
this Credit Note of the Company, even if the Company is not a party to such
agreement; provided, however, National City and the Company, by written
agreement between them may affect the liability of the Company.
TERMINOLOGY: If more than one party joins in the execution of this
Credit Note, the covenants and agreements herein contained shall be the joint
and several obligation of each and all of them and of their respective heirs,
executors, administrators, successor and assigns, and relative words herein
shall be read as if written in the plural when appropriate. Any
-4-
reference herein to National City shall be deemed to include and apply to every
subsequent holder of this Credit Note. Words of masculine or neuter import shall
be read as if written in the neuter or masculine or feminine when appropriate.
CREDIT AGREEMENT: Reference is made to the Credit Agreement for
provisions as to mandatory principal repayments, collateral and acceleration.
APPLICABLE LAW: This Credit Note shall be governed by and construed
under the laws of the State of New York, whose laws the Company expressly elects
to apply to this Credit Note. The Company agrees that any action or proceeding
brought to enforce or arising out of this Credit Note may be commenced in the
New York Supreme Court for the County of Erie, or in the District Court of the
United States for the Western District of New York, and the Company waives
personal service of process and agrees that a summons and complaint commencing
an action or proceeding in any such court shall be properly served and shall
confer personal jurisdiction if served by registered mail to the Company, or as
otherwise provided by the laws of the State of New York or the United States.
WAIVER OF TRIAL BY JURY: The Company hereby knowingly, voluntarily,
unconditionally and irrevocably waives the right to a trial by jury in every
jurisdiction in any action, proceeding or counterclaim brought by or against the
Company, its successors or assigns, in respect of any matter arising out of this
Credit Note or any document given in connection with or to secure this Credit
Note, including without limitation any exercise of rights under this Credit Note
or any such document, any attempt to cancel, void, or rescind this Credit Note
or any such document, and any course of conduct or course of dealing in
connection therewith.
REPLACEMENT: This Note is executed in replacement of, but not in
payment or novation of, the Fourth Amended Credit Note of the Company to
National City dated as of January 10, 2005 in the original principal amount of
$25,000,000 ("Prior Note"). All collateral for the Prior Note shall hereafter
secure payment of this Credit Note.
THE NEW YORK MORTGAGE COMPANY LLC
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President/CEO
--------------------------------------------------------------------------------
JPMORGAN CHASE BANK, N.A.
AND
THE NEW YORK MORTGAGE COMPANY LLC
CREDIT NOTE
Dated As of February 1, 2005
--------------------------------------------------------------------------------
CREDIT NOTE
$50,000,000.00 As of February 1, 2005
FOR VALUE RECEIVED, the undersigned, THE NEW YORK MORTGAGE COMPANY
LLC, a limited liability company organized under the laws of the State of New
York, whose address is 1301 Avenue of the Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "Company"), promises to pay to the order OF JPMORGAN CHASE BANK,
N.A., a national banking association, whose address is 000 Xxxxxx Xxxxxx, 0xx
Xxxxx Xxxxx, Xxxxxxx, Xxxxx 00000 ("Chase") on or before June 29, 2005, or such
earlier date as is provided for in the Credit Agreement as hereinafter defined
("Maturity Date"), in lawful money of the United States of America, the
principal sum OF FIFTY MILLION DOLLARS ($50,000,000.00), or the aggregate unpaid
principal amount of all advances by Chase to the Company pursuant to the Amended
and Restated Credit and Security Agreement among Chase, HSBC Bank USA, National
Association, successor by merger to HSBC Bank USA ("HSBC"), National City Bank
of Kentucky ("National City"), HSBC as Agent, National City as Documentation
Agent, and the Company dated as of even date herewith, which amended and
restated a Credit and Security Agreement dated as of December 15, 2003, as
amended pursuant to a First Amendment to Credit and Security Agreement dated as
of June 14, 2004, a Second Amendment to Credit and Security Agreement dated as
of June 30, 2004, and a Third Amendment to Credit and Security Agreement dated
as of November 1, 2004 and a Fourth Amendment to Credit and Security Agreement
dated as of January 10, 2005 (as such agreement may be amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
plus interest thereon from the date hereof, as follows:
INTEREST: Except with respect to Repurchase Loans and Construction
Advances, interest shall accrue on the principal amount outstanding hereon at an
annual rate equal to the rate determined by the Agent to be the average rate per
annum offered on the London Interbank Offering Market for U.S. Dollar deposits
in the amount of this Credit Note or applicable portion thereof and for a term
of 30 days ("LIBOR") plus 100 basis points (together, the "LIBOR-Based Rate").
Interest shall accrue on the principal amount of Repurchase Advances outstanding
hereon at an annual rate equal to LIBOR plus 162.5 basis points ("Repurchase
Loan Rate"). Interest shall accrue on the principal amount of Construction
Advances outstanding hereon at an annual rate equal to LIBOR plus 125 basis
points ("Construction Loan Rate"). The LIBOR-Based Rate shall be adjusted at the
end of each calendar month to the rate equal to the LIBOR-Based Rate determined
by reference to the then-current LIBOR. The Repurchase Loan Rate shall be
adjusted at the end of each calendar month to the rate equal to the Repurchase
Loan Rate determined by reference to the then-current LIBOR. The Construction
Loan Rate shall be adjusted at the end of each calendar month to the rate equal
to the Construction Loan Rate determined by reference to the then-current LIBOR.
Accrued interest shall be paid monthly on the tenth business day of each month
after the date
-2-
hereof. Interest shall be calculated on the basis of 1/360 of the annual
interest at the applicable rate on the outstanding principal balance for each
day such balance is outstanding, thus increasing the effective rate of interest,
and shall continue to accrue at such rate until the principal balance is paid in
full, regardless of whether the principal has become due by reason of default or
otherwise, except as otherwise provided herein.
MAXIMUM RATE OF INTEREST: It is intended that the rate of interest
hereon shall never exceed the maximum rate, if any, which may be legally charged
on the loan evidenced by this Credit Note ("Maximum Rate"), and if the
provisions for interest contained in this Credit Note would result in a rate
higher than the Maximum Rate, interest shall nevertheless be limited to the
Maximum Rate and any amounts which may be paid toward interest in excess of the
Maximum Rate shall be applied to the reduction of principal, or, at the option
of Chase, returned to the Company.
DUE DATE: All indebtedness evidenced hereby not paid before the
Maturity Date shall be due and payable on the Maturity Date.
PLACE OF PAYMENT: All payments hereon shall be made, and all notices
to Chase required or authorized hereby shall be given, as set forth in the
Credit Agreement.
PAYMENT AND EXPENSES OF COLLECTION: All amounts payable hereunder
are payable in lawful money of the United States. Payments received by the Agent
on behalf of Chase after 2:00 p.m. Agent's local time shall be deemed to be
received on the next following business day. Notwithstanding the foregoing, a
payment will not be deemed to have been received unless by 2:00 p.m. Agent's
local time Agent shall have received a completed "Repayment Schedule" on Agent's
form, listing the Qualifying Mortgages (as defined in the Credit Agreement) to
which the payment pertains. The Company agrees to pay all costs of collection
when incurred, including, without limiting the generality of the foregoing,
reasonable attorneys' fees through appellate proceedings, and to perform and
comply with each of the covenants, conditions, provisions and agreements
contained in every instrument now evidencing or securing said indebtedness. If
any suit or action be instituted to enforce this Credit Note, the Company
promises to pay, in addition to the cost and disbursements otherwise allowed by
law, such sum as the court may adjudge reasonable attorneys' fees in such suit
or action.
COLLECTION PERIODS: Any check, draft, money order or other
instrument given in payment of all or any portion hereof may be accepted by
Chase and handled in collection in the customary manner, but the same shall not
constitute payment hereunder or diminish any rights of Chase except to the
extent that actual cash proceeds of such instrument are unconditionally received
by Chase; provided, however, that this Credit Note shall not be in default as
the result of normal collection periods on such instruments.
-3-
LATE PAYMENT CHARGE: The Company promises to pay to Chase promptly
upon the accrual thereof a late payment charge of 6% of the amount of any
installment payment not paid within ten days of receipt by the Company of the
xxxx for such payment.
INTEREST AFTER NONPAYMENT: If the principal of this Credit Note is
not paid when due, whether by acceleration or otherwise, all unpaid amounts
shall bear interest following said nonpayment at the rate of 5% per annum above
the otherwise applicable interest rate.
DEFAULTS: Upon the happening of an Event of Default (as defined in
the Credit Agreement), Chase shall have all rights and remedies set forth in the
Credit Agreement.
The failure to exercise any of the rights and remedies set forth in
the Credit Agreement shall not constitute a waiver of the right to exercise the
same or any other option at any subsequent time in respect of the same event or
any other event. The acceptance by Chase of any payment hereunder which is less
than payment in full of all amounts due and payable at the time of such payment
shall not constitute a waiver of the right to exercise any of the foregoing
rights and remedies at that time or at any subsequent time or nullify any prior
exercise of any such rights and remedies without the express consent of Chase,
except as and to the extent otherwise provided by law.
WAIVERS: The Company, and any indorsers or guarantors hereof,
severally waive diligence, presentment, protest and demand and also notice of
protest, demand, dishonor and nonpayment of this Credit Note, and expressly
agree that this Credit Note, or any payment hereunder, may be extended from time
to time, and consent to the acceptance of further collateral, the release of any
collateral for this Credit Note, the release of any party primarily or
secondarily liable hereon, and that it will not be necessary for Chase, in order
to enforce payment of this Credit Note, to first institute or exhaust Chase's
remedies against the Company or any other party liable hereon or against any
collateral for this Credit Note. None of the foregoing shall affect the
liability of the Company and any indorsers or guarantors hereof. No extension of
time for the payment of this Credit Note, or any installment hereof, made by
agreement by Chase with any person now or hereafter liable for the payment of
this Credit Note, shall affect the liability under this Credit Note of the
Company, even if the Company is not a party to such agreement; provided,
however, Chase and the Company, by written agreement between them may affect the
liability of the Company.
TERMINOLOGY: If more than one party joins in the execution of this
Credit Note, the covenants and agreements herein contained shall be the joint
and several obligation of each and all of them and of their respective heirs,
executors, administrators, successor and assigns, and relative words herein
shall be read as if written in the plural when appropriate. Any reference herein
to Chase shall be deemed to include and apply to every subsequent holder of this
-4-
Credit Note. Words of masculine or neuter import shall be read as if written in
the neuter or masculine or feminine when appropriate.
CREDIT AGREEMENT: Reference is made to the Credit Agreement for
provisions as to mandatory principal repayments, collateral and acceleration.
APPLICABLE LAW: This Credit Note shall be governed by and construed
under the laws of the State of New York, whose laws the Company expressly elects
to apply to this Credit Note. The Company agrees that any action or proceeding
brought to enforce or arising out of this Credit Note may be commenced in the
New York Supreme Court for the County of Erie, or in the District Court of the
United States for the Western District of New York, and the Company waives
personal service of process and agrees that a summons and complaint commencing
an action or proceeding in any such court shall be properly served and shall
confer personal jurisdiction if served by registered mail to the Company, or as
otherwise provided by the laws of the State of New York or the United States.
WAIVER OF TRIAL BY JURY: The Company hereby knowingly, voluntarily,
unconditionally and irrevocably waives the right to a trial by jury in every
jurisdiction in any action, proceeding or counterclaim brought by or against the
Company, its successors or assigns, in respect of any matter arising out of this
Credit Note or any document given in connection with or to secure this Credit
Note, including without limitation any exercise of rights under this Credit Note
or any such document, any attempt to cancel, void, or rescind this Credit Note
or any such document, and any course of conduct or course of dealing in
connection therewith.
THE NEW YORK MORTGAGE COMPANY LLC
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President/CEO
--------------------------------------------------------------------------------
HSBC BANK USA, NATIONAL ASSOCIATION
AND
THE NEW YORK MORTGAGE COMPANY LLC
FIFTH AMENDED
SWINGLINE NOTE
Dated as of February 1, 2005
--------------------------------------------------------------------------------
FIFTH AMENDED
SWINGLINE NOTE
$15,000,000.00 As of February 1, 2005
FOR VALUE RECEIVED, the undersigned, THE NEW YORK MORTGAGE COMPANY
LLC, a limited liability company organized under the laws of the State of New
York, whose address is 1301 Avenue of the Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "Company"), promises to pay to the order of HSBC BANK USA,
NATIONAL ASSOCIATION, successor by merger to HSBC Bank USA, a bank organized
under the laws of the United States of America, with an office at c/o Mortgage
Warehouse Lending Department, Xxx XXXX Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxx Xxxx
00000 ("HSBC") on or before June 29, 2005, or such earlier date as is provided
for in the Credit Agreement as hereinafter defined ("Maturity Date"), in lawful
money of the United States of America, the principal sum of FIFTEEN MILLION
DOLLARS ($15,000,000.00), or the aggregate unpaid principal amount of all
advances by HSBC as Swingline Lender to the Company pursuant to the Amended and
Restated Credit and Security Agreement between HSBC, National City Bank of
Kentucky ("NCB"), JPMorgan Chase Bank, N.A., HSBC as Swingline Lender, HSBC as
Agent, and NCB as Documentation Agent, and the Company dated as of even date
herewith, which amended and restated a Credit and Security Agreement dated as of
December 15, 2003, as amended pursuant to a First Amendment to Credit and
Security Agreement dated as of June 14, 2004, a Second Amendment to Credit and
Security Agreement dated as of June 30, 2004, a Third Amendment to Credit and
Security Agreement dated as of November 1, 2004 and Fourth Amendment to Credit
and Security Agreement dated as of January 10, 2005 (as such agreement may be
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), plus interest thereon from the date hereof, as follows:
INTEREST: Except with respect to Repurchase Loans and Construction
Advances, interest shall accrue on the principal amount outstanding hereon at an
annual rate equal to the rate determined by HSBC to be the average rate per
annum offered on the London Interbank Offering Market for U.S. Dollar deposits
in the amount of this Fifth Amended Swingline Note (the "Swingline Note") or
applicable portion thereof and for a term of 30 days ("LIBOR") plus 100 basis
points (together, the "LIBOR-Based Rate"). Interest shall accrue on the
principal amount of Repurchase Advances outstanding hereon at an annual rate
equal to LIBOR plus 162.5 basis points ("Repurchase Loan Rate"). Interest shall
accrue on the principal amount of Construction Advances outstanding hereon at an
annual rate equal to LIBOR plus 125 basis points ("Construction Loan Rate"). The
LIBOR-Based Rate shall be adjusted at the end of each calendar month to the rate
equal to the LIBOR-Based Rate determined by reference to the then-current LIBOR.
The Repurchase Loan Rate shall be adjusted at the end of each calendar month to
the rate equal to the Repurchase Loan Rate determined by reference to the
then-current LIBOR. The Construction Loan Rate shall be adjusted at the end of
each calendar month to the rate equal to the Construction Loan Rate determined
by reference to the then-current LIBOR.
-2-
Accrued interest shall be paid monthly on the tenth business day of each month
after the date hereof. Interest shall be calculated on the basis of 1/360 of the
annual interest at the applicable rate on the outstanding principal balance for
each day such balance is outstanding, thus increasing the effective rate of
interest, and shall continue to accrue at such rate until the principal balance
is paid in full, regardless of whether the principal has become due by reason of
default or otherwise, except as otherwise provided herein.
MAXIMUM RATE OF INTEREST: It is intended that the rate of interest
hereon shall never exceed the maximum rate, if any, which may be legally charged
on the loan evidenced by this Swingline Note ("Maximum Rate"), and if the
provisions for interest contained in this Swingline Note would result in a rate
higher than the Maximum Rate, interest shall nevertheless be limited to the
Maximum Rate and any amounts which may be paid toward interest in excess of the
Maximum Rate shall be applied to the reduction of principal, or, at the option
of HSBC, returned to the Company.
DUE DATE: All indebtedness evidenced hereby not paid before the
Maturity Date shall be due and payable on the Maturity Date.
PLACE OF PAYMENT: All payments hereon shall be made, and all notices
to HSBC required or authorized hereby shall be given, as set forth in the Credit
Agreement.
PAYMENT AND EXPENSES OF COLLECTION: All amounts payable hereunder
are payable in lawful money of the United States. Payments received by HSBC
after 2:00 p.m. HSBC's local time shall be deemed to be received on the next
following business day. Notwithstanding the foregoing, a payment will not be
deemed to have been received unless by 2:00 p.m. HSBC's local time HSBC shall
have received a completed "Repayment Schedule" on HSBC's form, listing the
Qualifying Mortgages (as defined in the Credit Agreement) to which the payment
pertains. The Company agrees to pay all costs of collection when incurred,
including, without limiting the generality of the foregoing, reasonable
attorneys' fees through appellate proceedings, and to perform and comply with
each of the covenants, conditions, provisions and agreements contained in every
instrument now evidencing or securing said indebtedness. If any suit or action
be instituted to enforce this Swingline Note, the Company promises to pay, in
addition to the cost and disbursements otherwise allowed by law, such sum as the
court may adjudge reasonable attorneys' fees in such suit or action.
COLLECTION PERIODS: Any check, draft, money order or other
instrument given in payment of all or any portion hereof may be accepted by HSBC
and handled in collection in the customary manner, but the same shall not
constitute payment hereunder or diminish any rights of HSBC except to the extent
that actual cash proceeds of such instrument are unconditionally received by
HSBC; provided, however, that this Swingline Note shall not be in default as the
result of normal collection periods on such instruments.
-3-
LATE PAYMENT CHARGE: The Company promises to pay to HSBC promptly
upon the accrual thereof a late payment charge of 6% of the amount of any
installment payment not paid within ten days of receipt by the Company of the
xxxx for such payment.
INTEREST AFTER NONPAYMENT: If the principal of this Swingline Note
is not paid when due, whether by acceleration or otherwise, all unpaid amounts
shall bear interest following said nonpayment at the rate of 5% per annum above
the otherwise applicable interest rate.
DEFAULTS: Upon the happening of an Event of Default (as defined in
the Credit Agreement), HSBC shall have all rights and remedies set forth in the
Credit Agreement.
The failure to exercise any of the rights and remedies set forth in
the Credit Agreement shall not constitute a waiver of the right to exercise the
same or any other option at any subsequent time in respect of the same event or
any other event. The acceptance by HSBC of any payment hereunder which is less
than payment in full of all amounts due and payable at the time of such payment
shall not constitute a waiver of the right to exercise any of the foregoing
rights and remedies at that time or at any subsequent time or nullify any prior
exercise of any such rights and remedies without the express consent of HSBC,
except as and to the extent otherwise provided by law.
WAIVERS: The Company, and any indorsers or guarantors hereof,
severally waive diligence, presentment, protest and demand and also notice of
protest, demand, dishonor and nonpayment of this Swingline Note, and expressly
agree that this Swingline Note, or any payment hereunder, may be extended from
time to time, and consent to the acceptance of further collateral, the release
of any collateral for this Swingline Note, the release of any party primarily or
secondarily liable hereon, and that it will not be necessary for HSBC, in order
to enforce payment of this Swingline Note, to first institute or exhaust HSBC's
remedies against the Company or any other party liable hereon or against any
collateral for this Swingline Note. None of the foregoing shall affect the
liability of the Company and any indorsers or guarantors hereof. No extension of
time for the payment of this Swingline Note, or any installment hereof, made by
agreement by HSBC with any person now or hereafter liable for the payment of
this Swingline Note, shall affect the liability under this Swingline Note of the
Company, even if the Company is not a party to such agreement; provided,
however, HSBC and the Company, by written agreement between them may affect the
liability of the Company.
TERMINOLOGY: If more than one party joins in the execution of this
Swingline Note, the covenants and agreements herein contained shall be the joint
and several obligation of each and all of them and of their respective heirs,
executors, administrators, successor and assigns, and relative words herein
shall be read as if written in the plural when appropriate. Any
-4-
reference herein to HSBC shall be deemed to include and apply to every
subsequent holder of this Swingline Note. Words of masculine or neuter import
shall be read as if written in the neuter or masculine or feminine when
appropriate.
CREDIT AGREEMENT: Reference is made to the Credit Agreement for
provisions as to mandatory principal repayments, collateral and acceleration.
APPLICABLE LAW: This Swingline Note shall be governed by and
construed under the laws of the State of New York, whose laws the Company
expressly elects to apply to this Swingline Note. The Company agrees that any
action or proceeding brought to enforce or arising out of this Swingline Note
may be commenced in the New York Supreme Court for the County of Erie, or in the
District Court of the United States for the Western District of New York, and
the Company waives personal service of process and agrees that a summons and
complaint commencing an action or proceeding in any such court shall be properly
served and shall confer personal jurisdiction if served by registered mail to
the Company, or as otherwise provided by the laws of the State of New York or
the United States.
WAIVER OF TRIAL BY JURY: The Company hereby knowingly, voluntarily,
unconditionally and irrevocably waives the right to a trial by jury in every
jurisdiction in any action, proceeding or counterclaim brought by or against the
Company, its successors or assigns, in respect of any matter arising out of this
Swingline Note or any document given in connection with or to secure this
Swingline Note, including without limitation any exercise of rights under this
Swingline Note or any such document, any attempt to cancel, void, or rescind
this Swingline Note or any such document, and any course of conduct or course of
dealing in connection therewith.
REPLACEMENT. This Swingline Note is executed in replacement of, but
not in payment or novation of, the Fourth Amended Swingline Note of the Company
to HSBC dated as of January 10, 2005 in the original principal amount of
$12,000,000 ("Prior Note"). All Collateral for the Prior Note hereafter shall
secure payment of this Swingline Note.
THE NEW YORK MORTGAGE COMPANY LLC
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President/CEO
-5-
--------------------------------------------------------------------------------
HSBC BANK USA, NATIONAL ASSOCIATION,
NATIONAL CITY BANK OF KENTUCKY,
JPMORGAN CHASE BANK, N.A.
AND
HSBC BANK USA, NATIONAL ASSOCIATION, AS AGENT
AND
THE NEW YORK MORTGAGE COMPANY LLC
SECOND AMENDED GUARANTY
NEW YORK MORTGAGE TRUST INC.
Dated as of February 1, 2005
--------------------------------------------------------------------------------
SECOND AMENDED
GUARANTY
OF
NEW YORK MORTGAGE TRUST INC.
In consideration of any extension of credit whether heretofore or
hereafter made by HSBC BANK USA, NATIONAL ASSOCIATION, successor by merger to
HSBC Bank USA, a national banking association organized under the laws of the
United States of America ("HSBC"), NATIONAL CITY BANK OF KENTUCKY, a national
banking association, organized under the laws of the United States of America
("NCB"), JPMORGAN CHASE BANK, N.A. ("Chase" and together with HSBC and NCB,
"Banks") to THE NEW YORK MORTGAGE COMPANY LLC, a New York limited liability
company (the "Company"), the undersigned hereby guarantees to HSBC Bank USA,
National Association, successor by merger to HSBC Bank USA, as Agent for the
Banks pursuant to the Credit Agreement, as hereinafter defined ("Secured Party")
(a) the full and prompt payment to the Banks and Secured Party when due, whether
by acceleration or otherwise, of any and all indebtedness and other liabilities
of the Company to the Banks and Secured Party arising out of a Credit and
Security Agreement dated as of December 15, 2003, as amended pursuant to a First
Amendment to Credit and Security Agreement dated as of June 14, 2004, a Second
Amendment to Credit and Security Agreement dated as of June 30, 2004, and a
Third Amendment to Credit and Security Agreement dated November 1, 2004, as
amended and restated pursuant to an Amended and Restated Credit and Security
Agreement dated of even date herewith ("Credit Agreement") governing a mortgage
warehousing line of credit in the maximum principal amount of ONE HUNDRED FIFTY
MILLION DOLLARS ($150,000,000.00), whether now existing or hereafter incurred,
of every kind and character, direct or indirect, and whether such indebtedness
is from time to time reduced and thereafter increased, or entirely extinguished
and thereafter reincurred ("Indebtedness"), and (b) the full and complete
performance of all the Company's obligations and compliance with all the
Company's covenants set forth in the Credit Agreement. The undersigned further
agrees to pay all costs and expenses, including, without limitation, attorneys'
fees, at any time paid or incurred by the Banks and Secured Party in endeavoring
to collect the Indebtedness or any part thereof and in enforcing this Guaranty.
This Guaranty is, and is intended to be, a continuing guaranty of
the payment of the Indebtedness (irrespective of the aggregate amount thereof)
independent of and in addition to any other guaranty, indorsement or collateral
held by Secured Party therefor whether or not furnished by the undersigned. The
undersigned shall have no right of subrogation with respect to any payments made
by the undersigned hereunder until all of the Indebtedness is paid in full.
If any default shall be made in the payment of any Indebtedness, the
undersigned hereby agrees to pay the same to the extent above specified: (i)
without requiring protest or notice of nonpayment or notice of default to the
undersigned, to the Company, or to any other person; (ii) without proof of
demand; (iii) without requiring Secured Party to resort first to the
-2-
Company or to any other guaranty or any collateral which Secured Party may hold;
(iv) without requiring notice of acceptance hereof or assent hereto by Secured
Party; and (v) without requiring notice that any indebtedness has been incurred,
all of which the undersigned hereby waives.
The undersigned authorizes Secured Party, without notice or demand
and without releasing, impairing or affecting the undersigned's obligations
hereunder, from time to time: (i) to take from any party and hold collateral for
the payment of the Indebtedness or any part thereof, and to exchange, enforce or
release such collateral or any part thereof; (ii) to accept and hold any
indorsement or guaranty of payment of the Indebtedness or any part thereof and
to release or substitute any such indorser or guarantor, or any party who has
given any security interest in any collateral as security for the payment of the
Indebtedness or any part thereof, or any other party in any way obligated to pay
the Indebtedness or any part thereof; (iii) to direct the order or manner of the
disposition of any and all collateral and the enforcement of any and all
indorsements and guaranties relating to the Indebtedness or any part thereof as
Secured Party, in its sole discretion, may determine; and (iv) to determine how,
when and what application of payments and credits, if any, shall be made on the
Indebtedness or any part thereof, and to apply the same upon principal or
interest or the portion thereof, if any, in excess of the amount of this
Guaranty.
No delay or omission by Secured Party in exercising any right or
remedy hereunder shall operate as a waiver thereof or of any other right or
remedy, and no single or partial exercise thereof shall preclude any other or
further exercise thereof or the exercise of any other right or remedy. All
rights and remedies of Secured Party hereunder are cumulative.
This Guaranty is absolute and unconditional and shall not be
affected by any act or thing whatsoever, except as herein provided. No
modification or amendment of any provision of this Guaranty shall be effective
unless in writing and subscribed by a duly authorized officer of Secured Party.
This Guaranty shall be governed by and construed under the laws of
the State of New York, whose laws the undersigned expressly elects to apply to
this Guaranty. The undersigned agrees that any action or proceeding brought to
enforce or arising out of this Guaranty may be commenced in the New York Supreme
Court for the County of Erie, or in the District Court of the United States for
the Western District of New York, and the undersigned waives personal service of
process and agrees that a summons and complaint commencing an action or
proceeding in any such court shall be properly served and shall confer personal
jurisdiction if served by registered mail to the undersigned, or as otherwise
provided by the laws of the State of New York or the United States.
The undersigned hereby knowingly, voluntarily, unconditionally and
irrevocably waives the right to a trial by jury in every jurisdiction in any
action, proceeding or counterclaim
-3-
brought by or against the undersigned, its personal representatives, successors
or assigns, in respect of any matter arising out of this Guaranty or the
Indebtedness, including without limitation any exercise of rights hereunder, any
attempt to cancel, void, or rescind this Guaranty, and any course of conduct or
course of dealing in connection herewith.
Secured Party and the undersigned as used herein shall include the
estates, executors or administrators, or successors or assigns, of those
parties.
This Second Amended Guaranty amends the amended and restated
guaranty of New York Mortgage Trust Inc. to Agent, for the benefit of the Banks,
dated as of November 1, 2004.
IN WITNESS WHEREOF, this Guaranty has been signed by the undersigned
as of the 1st day of February, 2005.
Signature of Guarantor: Address:
NEW YORK MORTGAGE TRUST INC. 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman/Co-CEO
COMPANY GENERAL CERTIFICATE
FROM: THE NEW YORK MORTGAGE COMPANY LLC ("Company") and NEW YORK
MORTGAGE TRUST INC. ("NYMT")
TO: HSBC BANK USA, NATIONAL ASSOCIATION, as Agent ("Agent")
CLOSING DATE: As of February 1, 2005
The undersigned certifies that he is the Secretary of the Company and its
sole member, NYMT, and that, as such, the undersigned is authorized to execute
and deliver this certificate in the name and on behalf of the Company. The
undersigned further certifies that:
1. As of the Closing Date, the Company is in good standing in the State of
New York.
2. Attached hereto as Exhibit A is a true, correct and complete copy of
the Written Consent of Sole Member of the Company, and such Consent is in full
force and effect on and as of the Closing Date without revocation, modification
or amendment in any respect. No other or further action by or on behalf of the
Company or its member or managers, as appropriate, is necessary or appropriate
to authorize the execution, delivery and performance by the Company of the
Amended and Restated Credit and Security Agreement among the Company, HSBC Bank
USA, National Association ("HSBC"), National City Bank of Kentucky ("NCB"),
JPMorgan Chase Bank, N.A. ("Chase" and, together with HSBC, "Banks"), HSBC as
Swingline Lender, HSBC as Agent, and NCB as Documentation Agent, dated as of the
date hereof or any or all of the other agreements and documents required to be
executed and delivered by the Company in order to give effect to and consummate
the transactions contemplated therein. None of the foregoing is or will be in
contravention of any provision of the Company's Articles of Organization,
Operating Agreement, or any document or agreement to which the Company is a
party or which is binding on the Company.
3. Each officer of the Company authorized to execute documents on behalf
of the Company is indicated below, and the specimen signatures below are the
genuine signatures of such officers:
NAME TITLE SIGNATURE
Xxxxxx X. Xxxxxxx Chief Executive Office /s/ Xxxxxx X. Xxxxxxx
and President ------------------------
Xxxxxxx X. Xxxxx Executive Vice President, /s/ Xxxxxxx X. Xxxxx
Secretary and Treasurer ------------------------
Ref: CR/SBS Date: 01/28/2005 Shipping: 15.45
To: XXXXXXX X XXXXX Co: XXXXXXXX XXXXX L Special: 1.39
Ad: 3400 HSBC CENTER City: 0.00
St: NY Zip: 14203 Total: 16.84
Svcs: PRIORITY OVERNIGHT
TRCK: 0000 0000 0000
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate in the name and on behalf of the Company as its sole member on and
as of the Closing Date.
SOLE MEMBER:
NEW YORK MORTGAGE TRUST INC.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Secretary
Exhibit A
(Written Consent of Sole Member)
WRITTEN CONSENT OF
SOLE MEMBER
OF
THE NEW YORK MORTGAGE COMPANY, LLC
RESOLVED, that the undersigned, as sole member of THE NEW YORK
MORTGAGE COMPANY, LLC, a New York limited liability company ("Company"), hereby
designates the Chief Executive Officer and President and the Executive Vice
President, Secretary and Treasurer of the Company as designated officers (each a
"Designated Officer" and collectively, the "Designated Officers"), and each of
the Designated Officers be and is authorized on behalf of the Company to execute
and deliver to HSBC BANK USA, NATIONAL ASSOCIATION ("HSBC"), NATIONAL CITY BANK
OF KENTUCKY ("NCB"), JPMORGAN CHASE BANK, N.A. ("Chase" and, together with HSBC
and NCB, "Banks"), HSBC as Agent for the Banks, HSBC, as Swingline Lender and
NCB, as Documentation Agent, an Amended and Restated Credit and Security
Agreement ("Agreement") governing a residential mortgage warehousing line of
credit from the Banks to the Company in the principal amount of ONE HUNDRED
FIFTY MILLION AND 00/100 DOLLARS ($150,000,000.00);
RESOLVED, FURTHER, that the Designated Officers of the Company be
and each of them acting alone is hereby authorized on behalf of the Company to
execute and deliver to the Banks and Agent such other documents and do any and
all other acts necessary or appropriate to effectuate the purposes of these
resolutions, including, without limitation, to execute and deliver to the Banks
and Agent any subsequent amendments, extensions, or renewals of the Agreement
and any other agreement or instrument contemplated by the Agreement or by these
resolutions, which any of such Designated Officer deems necessary or
appropriate;
RESOLVED, FURTHER, that each of the foregoing documents mentioned in
these resolutions be in such form and content as the Designated Officers of the
Company executing same shall approve, his approval to be conclusively evidenced
by his execution thereof; and
[SIGNATURE PAGE FOLLOWS]
RESOLVED, FURTHER, that the undersigned has executed and delivered
this Written Consent of Sole Member on and as of the Closing Date for the
purposes of the foregoing resolutions.
SOLE MEMBER:
NEW YORK MORTGAGE TRUST, INC.
By: /s/ Xxxxxx X. Sohnall
---------------------------
By: Xxxxxx X. Sohnall
Its: Co-Chief Executive Officer
GUARANTOR GENERAL CERTIFICATE
FROM: The New York Mortgage Trust, Inc. ("Company")
TO: HSBC Bank USA, National Association, National City Bank of
Kentucky and JPMorgan Chase Bank, N.A. (collectively,
"Lenders")
CLOSING DATE: February 1, 2005 ("Closing Date")
The undersigned certifies that he is Co-Chief Executive Officer of
the Company and that, as such, the undersigned is authorized to execute and
deliver this certificate in the name and on behalf of the Company. The
undersigned further certifies that:
1. This Certificate is being delivered in Buffalo, New York on the
Closing Date in connection with the execution and delivery of a Second Amended
Guaranty from the Company to Lender dated as of the Closing Date ("Guaranty").
2. Attached hereto as Exhibit A is a certified copy of the Company's
Articles of Incorporation including any amendments thereto. The Articles of
Incorporation are in full force and effect on and as of the Closing Date without
further modification or amendment in any respect.
3. Attached hereto as Exhibit B is a true copy of the Company's
current By-Laws including any amendments thereto. The attached By-Laws are in
full force and effect on and as of the Closing Date without further modification
or amendment in any respect.
4. Attached hereto as Exhibit C is a Certificate of Good Standing
issued by the Secretary of State of the State of Maryland Department of
Assessments and Taxation. As of the Closing Date, the Company is in good
standing in the State of Maryland Department of Assessments and Taxation, does
not owe franchise tax, and no franchise tax reports or license or other fees are
due.
5. Each officer of the Company indicated below has been duly elected
and is at present qualified and acting in the office indicated opposite his
name, and the specimen signatures below are the genuine signatures of such
officers:
NAME TITLE SIGNATURE
Xxxxxx X. Xxxxxxx Co-Chief Executive Officer /s/ Xxxxxx X. Xxxxxxx
------------------------
Xxxxx X. Xxxx Co-Chief Executive Officer /s/ Xxxxx X. Xxxx
------------------------
Xxxxxxx X. Xxxxx Executive Vice President, /s/ Xxxxxxx X. Xxxxx
Chief Financial, Secretary and ------------------------
Treasurer
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate in the name and on behalf of the Company as of the Closing Date.
/s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Co-Chief Executive Officer
XXXXX X. XXXXXX
ATTORNEY AT LAW
0000 XXXXXX XX XXX XXXXXXXX, 7(TH) XXXXX
XXX XXXX, XXX XXXX 00000
(000) 000-0000
MEMBER OF NEW YORK, FAX (000) 000-0000
CONNECTICUT & FLORIDA BARS E-MAIL ADDRESS: XXXXXXX@XXXX.XXX
January 28, 2005
HSBC Bank USA, National Association
c/o Mortgage Warehouse Lending Department
Xxx XXXX Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Manager, Warehouse Lending
National City Bank of Kentucky
000 Xxxxx 0xx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxx, President
JPMorgan Chase Bank, N.A.
000 Xxxxxx Xxxxxx, 0xx Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Re: HSBC Bank USA, National Association, National City Bank of Kentucky and
JPMorgan Chase Bank, N.A. Warehousing Line of Credit to The New York
Mortgage Company LLC
Ladies and Gentlemen:
I am the Vice-President, Settlement Department Manager of The New York
Mortgage Company, LLC. I also act in the capacity of in-house counsel for The
New York Mortgage Company, LLC and New York Mortgage Trust, Inc.
I have acted as counsel to The New York Mortgage Company LLC, a limited
liability company organized under the laws of the State of New York (the
"Company") and as such have advised the Company in connection with a Credit and
Security Agreement between the Company, HSBC Bank USA, National Association
("HSBC"), National City Bank of Kentucky ("NCB"), HSBC as Agent, and NCB as
Documentation Agent (the "Original Parties"), dated as of December 15, 2003, as
amended by a First Amendment to Credit and Security Agreement dated as of June
14, 2004, a Second Amendment to Credit and Security Agreement dated as of June
30, 2004, a Third Amendment to Credit and Security Agreement dated as of
November 1, 2004, and a Fourth Amendment to Credit and Security Agreement dated
as of January 10, 2005, and further amended and restated pursuant to an Amended
and Restated Credit and Security Agreement dated the date hereof (the "Credit
Agreement") among the Original Parties and JPMorgan Chase Bank, N.A. ("Chase"
and collectively with HSBC and NCB, the "Banks"), the Credit Notes referred to
in the Credit Agreement ("Credit Notes") and the related documents to
January 28, 2005 Page 2 of 3
which the Company is a party and which are referred to in the Credit Agreement
("Related Documents"). I have also acted as counsel to New York Mortgage Trust,
Inc., a corporation organized under the laws of the State of Maryland
("Guarantor") and as such have advised the Guarantor in connection with a
Guaranty from the Guarantor dated as of August 26, 2004, as amended and
supplemented by a First Amended Guaranty from the Guarantor dated as of November
1, 2004 and a Second Amended and Restated Guaranty dated as of the date hereof,
guarantying the repayment of the Company's indebtedness when and as due, to the
Banks, and the performance of the obligations of the Company under the Credit
Agreement (the "Guaranty").
I have examined such matters of law, the aforementioned documents, the
organizational documents of the Company, the Articles of Incorporation and
By-laws of the Guarantor, and copies of such other agreements, documents and
statements of governmental officials and corporate officers and representatives
and have made such investigations as I have deemed relevant and necessary as the
basis for my opinion. In such examination I have assumed the genuineness of all
signatures (other than those of my clients) and the authenticity of all
documents submitted to me as originals and the conformity with originals of all
documents submitted to me as copies.
Based upon and subject to the foregoing, I am of the opinion that:
1. The Company is a limited liability company duly organized, validly
existing, and in good standing under the laws of the State of New York; has
powers to transact the business in which it is engaged; is duly licensed or
qualified and in good standing in each jurisdiction in which the conduct of
such business requires such licensing or such qualification; and has all
necessary power and authority to enter into and to execute, deliver and
perform the Credit Agreement, the Credit Notes, and the Related Documents,
all of which have been duly authorized by all proper and necessary corporate
action.
2. The Guarantor is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Maryland; has powers to transact
the business in which it is engaged; is duly licensed or qualified and in
good standing in each jurisdiction in which the conduct of such business
requires such licensing or such qualification; and has all necessary power
and authority to enter into and to execute, deliver and perform the Guaranty,
all of which have been duly authorized by all proper and necessary corporate
and shareholder action.
3. The execution, delivery and performance by the Company of all the terms
and provisions of the Credit Agreement, Credit Notes, and the Related
Documents are within the powers of the Company; have been duly authorized by
all proper and necessary company action, including without limitation valid
and proper consents of its members, and do not conflict with the Company's
organizational documents, or, to the best of my knowledge, any note,
indenture, contract or agreement to which either the Company is a party or by
which the Company is bound, or with any statute, rule, regulation, law
(whether statutory or decisional) binding upon the Company or affecting the
aforementioned documents.
4. The execution, delivery and performance by the Guarantor of all the
terms and provisions of the Guaranty are within the corporate powers of the
Guarantor; have been duly authorized by all proper and necessary corporate
and shareholder action, including without limitation valid and proper
consents of stockholders and directors, and do not conflict with the
Guarantor's Articles of Incorporation, By-laws, or, to the best of my
knowledge, any
January 28, 2005 Page 3 of 3
note, indenture, contract or agreement to which either the Guarantor is a
party or by which the Guarantor is bound, or with any statute, rule,
regulation, law (whether statutory or decisional) binding upon the Guarantor
or affecting the aforementioned documents.
5. All authorizations and approvals, notices and filings required for the
Company and the Guarantor, as applicable, to enter into the Credit Agreement,
Credit Notes, the Guaranty, and each of the other Related Documents and to
take all actions contemplated therein or in connection therewith, have been
obtained, copies thereof have been delivered to HSBC, and such authorizations
and approvals remain in full force and effect.
6. The Credit Agreement, the Credit Notes, the Related Documents, and the
Guaranty, when executed and delivered, will constitute the legal, valid and
binding obligations of the Company and the Guarantor, respectively,
enforceable in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy and insolvency laws
and laws effecting creditors' rights generally.
7. To the best of my knowledge, there are not any actions, suits,
proceedings (whether or not purportedly on behalf of the Company or the
Guarantor) or investigations pending or threatened against the Company or the
Guarantor or any basis therefor, which, if adversely determined, would, in
any case or in the aggregate, materially and adversely affect the property,
assets, financial condition or business of the Company or the Guarantor or
materially impair the right or ability of the Company or the Guarantor to
carry on their respective operations substantially as now conducted or
anticipated to be conducted in the future, or which question the validity of
the Credit Agreement, the Credit Notes, the Related Documents, the Guaranty
or any other documents required by the Credit Agreement, or any action taken
pursuant to any of the foregoing.
8. No consent, license, approval or authorization of, or registration,
declaration or filing with, any court, governmental body or authority or
other person or entity is required in connection with the valid execution,
delivery or performance of the Credit Agreement, the Credit Notes, the
Related Documents, and the Guaranty or other documents required by the Credit
Agreement or in connection with any of the transactions contemplated thereby.
9. I have no knowledge that any investigation of the Company's or the
Guarantor's tax liability by any state or federal agency or authority is
pending, threatened or expected.
very truly yours
/s/ Xxxxx X. Xxxxxx
---------------------------
Xxxxx X. Xxxxxx
cc: Xxxxxx Xxxxxxx
Xxxxxx X. Xxxxxx
Xxxxx Xxxx
Xxxxxxx Xxxxx
