Exhibit 10.8
CREDIT AGREEMENT
This Agreement, dated as of March 31, 1999, is among Prism Mortgage
Company, an Illinois corporation, Pacific Guarantee Mortgage Corporation, a
California corporation, Mortgage Market, Inc., an Oregon corporation,
PointSource Financial, L.L.C., an Illinois limited liability company,
Infiniti Mortgage, L.L.C., an Illinois limited liability company, the Lenders
and The First National Bank of Chicago, as Agent.
RECITALS
The revolving credit facility made available to the Borrower and the
Borrowing Subsidiaries pursuant to this Agreement shall be used for
residential mortgage loan origination and acquisition. The Borrower will
request Advances hereunder for its own use for the purposes set forth in the
preceding sentence, and the Borrower may request Advances on behalf of one or
more Borrowing Subsidiaries (which are co-borrowers hereunder along with
Borrower) for purposes of mortgage loan originations by such Borrowing
Subsidiaries. Accordingly, the Borrower and the Borrowing Subsidiaries shall
pledge certain of the Collateral securing the Loans made pursuant to this
Agreement and the Borrowing Subsidiaries shall be co-makers (with the
Borrower) of any Notes executed in connection herewith. The Borrower is
considering creating a holding company to acquire all of the stock of the
Borrower and thereafter making an initial public offering of a portion of the
stock in such holding company. In such event the Borrower may request that
this Agreement and the other Loan Documents be amended and restated in
substantially the same form but substituting the holding company for the
Borrower. In consideration of the foregoing and for other good and valuable
consideration, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Additional Required Mortgage Documents" means the instruments and
documents described in Schedule "B" to the Security Agreement.
"Advance" means a borrowing hereunder (or conversion or continuation
thereof) consisting of the aggregate amount of the several Loans made on the
same Borrowing Date (or date of conversion or continuation) by some or all of
the Lenders to the Borrower or a Borrowing Subsidiary of the same Type and,
in the case of Fixed Rate Advances, for the same Interest Period.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. A Person shall be deemed to control another Person if the
controlling Person owns, directly or indirectly, 10% or more of any class of
voting securities (or other ownership interests) of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the direction
of the management or policies of the controlled Person, whether through
ownership of stock, by contract or otherwise.
"Agent" means The First National Bank of Chicago in its capacity as
contractual representative of the Lenders pursuant to Article X, and not in
its individual capacity as a Lender, and any successor Agent appointed
pursuant to Article X.
"Aggregate Commitment" means, as of any date, the aggregate of the
Lenders' then-current Commitments under this Agreement, as reduced or
increased from time to time, but in no event shall the Aggregate Commitment
exceed $400,000,000 without the approval of the Borrower, the Agent and all
of the Lenders. The Aggregate Commitment as of the date hereof is
$250,000,000, as shown on Schedule "1".
"Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.
"Agreement Accounting Principles" means GAAP, applied in a manner
consistent with that used in preparing the financial statements referred to
in Section 5.4.
"Agreement to Pledge" means either a written pledge substantially in
the form of Exhibit "D" to this Agreement executed by the Borrower or a
Borrowing Subsidiary and delivered by facsimile to the Collateral Agent or an
electronic data transmission to the Collateral Agent, in either case
specifically identifying all Mortgage Loans with respect to which the
Required Mortgage Documents are not being delivered on or before the Pledge
Date of such Mortgage Loans.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Corporate Base Rate for such day and (ii) the
sum of Federal Funds Effective Rate for such day plus 1/2% per annum.
"Alternate Base Rate Advance" means an Advance which bears interest at
the Alternate Base Rate.
"Alternate Base Rate Loan" means a Loan which bears interest at the
Alternate Base Rate.
"AP Mortgage" means, on any date, any Mortgage Loan which has been
identified in an Agreement to Pledge and for which the Collateral Agent has
not received the Required Mortgage Documents for such Mortgage Loan by such
date.
"Approved Investor" means, as of any time with respect to any category
of Eligible Collateral, any of the institutions listed on Schedule "2"
attached hereto as an Approved Investor for such category of Eligible
Collateral, and any other institution approved in writing by the Agent (with
one Business Day's prior written notice to the Lenders of any such newly
approved investor), such approval not to be unreasonably withheld; PROVIDED
that any such institutions listed on Schedule "2" or previously approved by
the Agent may be eliminated as an Approved Investor (or as an Approved
Investor of a specific type) by prior written notice to the Borrower from the
Agent, which elimination notice shall be given only for reasonable cause or
at the election of the Required Lenders for reasonable cause, and in either
case any commitments issued by any such formerly-Approved Investor after such
elimination shall not constitute Approved Investor Commitments, but
commitments of such formerly-Approved Investor existing at the time of such
elimination shall continue to be Approved Investor Commitments.
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"Approved Investor Commitment" means a bona fide current, unused and
unexpired forward sale commitment, issued by an Approved Investor of the
required type, under which such Approved Investor agrees, prior to expiration
thereof, upon the satisfaction of certain terms and conditions therein, to
provide for the purchase of Mortgage Loans, the exchange of Securities for
Mortgage Loans or the purchase of Securities, each at a specified price,
which commitment is not subject to any term or condition which is not
customary in commitments of like nature or which, in the reasonably
anticipated course of events, cannot be fully complied with prior to the
expiration thereof.
"Approved MBS Custodian" is defined in Paragraph 7(b) of the Security
Agreement.
"Approved Program" means the program commonly known as DLJ Streamlined
Refinance Program and any other Approved Investor program approved in writing
by the Agent (with one Business Day's prior written notice to the Lenders of
any such newly approved program), such approval not to be unreasonably
withheld; PROVIDED that DLJ Streamlined Refinance Program and any such other
program may be eliminated as an Approved Program by prior written notice to
the Borrower from the Agent, which elimination notice shall be given only for
reasonable cause or at the election of the Required Lenders for reasonable
cause, but in either case any Pledged Mortgages which qualified under the
previously-Approved Program and which were pledged prior to the time of such
elimination shall continue to be deemed part of an Approved Program.
"Arranger" means First Chicago Capital Markets, Inc., a Delaware
corporation, and its successors, as lead arranger and sole bookrunner.
"Article" means an article of this Agreement unless another document
is specifically referenced.
"Assignment" means a duly executed assignment in blank or in favor of
the Collateral Agent for the benefit of the Lenders of a Mortgage, of the
indebtedness secured thereby, and of all documents and rights related to the
Mortgage Loan secured by such Mortgage in accordance with the requirements of
the Security Agreement.
"Authorized Officer" means any Senior Vice President or Vice President
of the Borrower, or any Person designated by any such Person, acting singly.
"Basic Eligibility Requirements" means the requirements that each of
the following statements is accurate and complete with respect to any Pledged
Item:
(i) The Pledgor is the legal and equitable owner and holder of
such Pledged Item and has full power and authority to pledge such Pledged
Item. Such Pledged Item has been duly and validly issued to the Pledgor;
each commitment of a Person to purchase Mortgage Loans and Securities
from the Borrower or the Pledgor (including Approved Investor
Commitments) has been duly and validly issued to the Borrower or the
Pledgor; and each Pledged Item constitutes Eligible Collateral, has been
duly and validly pledged to the Collateral Agent for the benefit of the
Lenders and is subject to no Lien other than the lien of the Security
Agreement in favor of the Collateral Agent for the benefit of the
Lenders.
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(ii) Each requirement of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit
opportunity or disclosure laws applicable to such Pledged Item has been
complied with.
(iii) If such Pledged Item is a Pledged Mortgage:
(1) it has been duly executed and delivered by the
parties thereto at a closing,
(2) it is valid and enforceable in accordance with its
terms, without defense or offset, subject to bankruptcy and
similar laws and other general restrictions on creditors' rights
and equitable principles (whether raised in an equity proceeding
or an action at law),
(3) the property covered by said Pledged Mortgage is
free and clear of all Liens except in favor of the Pledgor subject
only to (a) the Lien of current real property taxes and
assessments not yet due and payable; (b) covenants, conditions and
restrictions, rights of way, easements and other matters of the
public record, as of the date of recording, as are acceptable to
mortgage lending institutions generally and specifically referred
to in a lender's title insurance policy delivered to the
originator of said Pledged Mortgage and (i) referred to or
otherwise considered in the appraisal made for the originator of
said Pledged Mortgage or (ii) which do not materially adversely
affect the appraised value of such property as set forth in such
appraisal; and (c) other matters to which like properties are
commonly subject which do not materially interfere with the
benefits of the security intended to be provided by said Pledged
Mortgage or the use, enjoyment, value or marketability of the
related property (including liens junior to said Pledged
Mortgage); and (d) a first Lien (for Pledged Mortgages
constituting Non-Agency Mortgage Loans, HELOC Loans and Sub-Prime
Mortgage Loans only) to the extent permitted under the Borrowing
Base Sublimits,
(4) it has been correctly described in the Collateral
Transmittal submitted to the Collateral Agent in respect of said
Pledged Mortgage,
(5) it has been either (i) fully funded to or to the
order of the mortgagor (i.e by cleared check or draft or by wire
transfer which has been disbursed to or to the order of the
mortgagor) or (ii) funded directly from the Funding Account to an
escrow or closing agent by wire transfer, transmittal through the
"Automated Clearing House" or any similar private clearing house
for interbank transfers of funds or by check or draft,
(6) the Collateral Agent has in its possession (other
than with respect to Pledged Mortgages which are then the subject
of an Agreement to Pledge) all Required Mortgage Documents other
than those documents and instruments which are in the possession
of the Borrower or the Pledgor pursuant to a Trust Receipt or in
the possession of a Person to whom delivery was made pursuant to
an Investor Transmittal Letter,
(7) it has been or will be promptly duly recorded where
necessary and complies with all applicable state or local
recording, registration and filing laws and regulations,
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(8) there are no defenses, counterclaims or offsets of
any nature whatsoever with respect to said Pledged Mortgage or the
indebtedness evidenced and secured thereby or with respect to any
Required Mortgage Document and, other than the related Required
Mortgage Documents and Additional Required Mortgage Documents,
there are no instruments or documents evidencing, securing or
guaranteeing payment of the indebtedness constituting said Pledged
Mortgage,
(9) each Assignment (a) has been duly authorized by all
necessary corporate action by the Pledgor, has been duly executed
and delivered by the Pledgor and is the legal, valid and binding
obligation of the Pledgor enforceable in accordance with its
terms, subject to bankruptcy and similar laws and other general
restrictions on creditors' rights and equitable principles, and
(b) complies with all applicable laws including all applicable
recording, filing and registration laws and regulations and is
adequate and legally sufficient for the purpose intended to be
accomplished thereby, including, without limitation, the
assignment of the rights, powers and benefits of the Pledgor as
mortgagee,
(10) upon the recordation of each Assignment and assuming
the possession of the Required Mortgage Documents by the
Collateral Agent and filing of Uniform Commercial Code financing
statements in proper form in the applicable filing offices, the
Collateral Agent, for the benefit of the Lenders, will have a
valid and perfected first priority security interest in said
Pledged Mortgage and all proceeds, products and profits derived
therefrom, including, without limitation, all moneys, goods,
insurance proceeds and other tangible or intangible property
received upon liquidation thereof, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights generally and to
general principles of equity,
(11) the Pledgor has complied with all laws, rules and
regulations in respect of said Pledged Mortgage if it is insured
by FHA or guaranteed by VA and the related insurance or guarantee
is in full force and effect. Said Pledged Mortgage complies in
all respects with all applicable requirements for purchase under
the GNMA standard form of selling contract for FHA insured and VA
guaranteed loans and any supplement thereto then in effect,
(12) the Pledgor has received an appraisal on the
property underlying said Pledged Mortgage, which appraisal shall
be from a licensed appraiser and in conformity with the applicable
requirements of any Approved Investor Commitment to which said
Pledged Mortgage may be subject; provided that an appraisal need
not be obtained for any Pledged Mortgage if said Pledged Mortgage
meets all of the underwriting and other requirements of an
Approved Program which does not require that appraisals be
obtained with respect to Mortgages meeting the requirements of
such Approved Program,
(13) all fire and casualty policies covering the premises
encumbered by said Pledged Mortgage (a) name the Pledgor as the
insured under a standard mortgagee clause not less favorable in
coverage to the mortgagee than is customarily used in the state
where such premises is located, (b) are in full force and effect,
and (c) afford insurance against fire and such other risks as are
usually insured against in the broad form of extended
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coverage insurance from time to time available, as well as
insurance against flood hazards as required by FHA or VA, and
(14) it is not, unless it constitutes an Eligible HELOC
Loan, a revolving credit facility.
(iv) There shall be no material breach of the covenants
contained in Paragraph 12 of the Security Agreement and there shall be no
breach of any of the following covenants (the sole remedy for which shall
be the removal of the affected Pledged Item as Eligible Collateral):
(1) The Pledgor shall not (a) amend or modify, or waive
any of the terms and conditions of, or settle or compromise any
claim in respect of, such Pledged Item or any rights related to
any of the foregoing, if such amendment, modification or waiver
materially and adversely affects the Collateral Value of such
Pledged Item, or impairs the marketability of such Pledged Item or
(b) release any security or obligor, or, through any other
activity or inactivity, cause such Pledged Item which shall have
been eligible for purchase to become ineligible for purchase in
accordance with the Approved Investor Commitment related to such
Pledged Item.
(2) The Pledgor shall not sell, assign, transfer or
otherwise dispose of, or grant any option with respect to, or
pledge or otherwise encumber (except pursuant to the Security
Agreement), any of the Collateral or any interest therein, except
as provided in Section 8.3 with respect to releases of Pledged
Items.
(3) The Pledgor or the Borrower is the servicer for and
shall service all Pledged Mortgages pledged by the Pledgor in
accordance with the requirements of the Approved Investor
Commitments until the sale thereof. The Borrower or the Pledgor
shall service all Mortgage Loans which are the subject of Pledged
Securities for which Borrower or the Pledgor retains servicing
responsibility in accordance with the standard requirements of the
Federal Agency issuing or guaranteeing such Securities and all
applicable FHA and VA requirements.
(4) The Borrower shall hold all escrow funds collected
in respect of Pledged Items in trust, without commingling the same
with any other funds, and apply the same for the purposes for
which such funds were collected provided that such obligation with
respect to Pledged Mortgages shall not arise until 30 days after
the origination or acquisition of the applicable Mortgage Loan.
(5) Neither the Borrower nor any Borrowing Subsidiary
shall fail to observe and perform all of its respective
obligations in connection with each Approved Investor Commitment
related to any Pledged Mortgage or Pledged Security to the extent
that any such failure would permit the relevant Approved Investor
to terminate its Approved Investor Commitment or refuse to
purchase the Mortgages which it has committed to purchase
thereunder. Within forty-eight (48) hours after a request
therefor by the Agent, a copy of each Approved Investor Commitment
certified by the Borrower, or if requested by the Agent at any
time after a Default has occurred, the originals of such Approved
Investor Commitments, shall be delivered to the Agent.
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(6) The Borrower shall promptly notify the Agent and the
Collateral Agent if and when the Borrower or any Borrowing
Subsidiary receives any prepayment (which term excludes the
principal portion of scheduled monthly payments made on a Mortgage
Loan) arising from or relating to any Pledged Mortgage and hold
the same in trust, as security for the Lenders, until such
Mortgage Loan is removed from the Borrowing Base in accordance
with this Agreement or, if a Default has occurred and is
continuing, then immediately remit to the Agent such prepayments
(and all interest and earnings thereon or with respect thereto).
(7) The Borrower and each Borrowing Subsidiary shall do,
execute, acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered, all such other acts, instruments and
transfers (including, without limitation, Assignments) as the
Agent or the Collateral Agent may reasonably request from time to
time in order to create and maintain a perfected first priority
security interest in the Collateral in favor of the Collateral
Agent for the benefit of the Lenders and to create, maintain and
preserve the security and benefits intended to be afforded by this
Agreement and the Security Agreement, subject to no prior or equal
security interest, lien, charge or encumbrance, or agreement
purporting to grant to any Person a security interest in the
Collateral.
(8) The Borrower shall promptly notify the Agent and the
Collateral Agent of the occurrence of any event which would cause
any Eligible Collateral to become Ineligible Collateral.
"Borrower" means Prism Mortgage Company, an Illinois corporation, and its
successors and assigns.
"Borrowing Base" means, as of any date, subject to the Borrowing Base
Sublimits, the sum of the amounts determined by applying the following
percentages to the Collateral Values of the following categories of Eligible
Collateral, without duplication as any asset is converted from one category to
another, as described below (and the Borrower, by including any Pledged Item in
any computation of the Borrowing Base, and the Pledgor, shall be deemed to
represent and warrant to the Agent, the Collateral Agent and the Lenders that
such Pledged Item constitutes Eligible Collateral):
(i) ninety-nine percent (99%) of the Collateral Value of all
Gestation Collateral constituting Eligible Collateral;
(ii) ninety-eight percent (98%) of the Collateral Value of all
Eligible Conforming Mortgage Loans, Eligible Jumbo Mortgage Loans,
Eligible Non-Agency Mortgage Loans and Eligible Sub-Prime Mortgage Loans
not constituting Gestation Collateral; and
(iii) ninety-five percent (95%) of the Collateral Value of all
Eligible HELOC Loans not constituting Gestation Collateral.
In connection with the Borrowing Base, the Agent is hereby authorized by the
Lenders to grant temporary waivers of strict compliance by the Borrower with the
eligibility requirements regarding qualification of any Collateral as Eligible
Collateral or with the Lending Sublimits and Borrowing Base Sublimits when the
Agent deems it appropriate, in its sole discretion, (i) as to all matters other
than (x) those described in the
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definition "Basic Eligibility Requirements" (except that temporary waivers
may be granted for any of clauses (iii)(6), (12) or (13) of such definition)
and (y) those described in the definition of "Residential Mortgage Loan", if
the aggregate amount of deviation from strict compliance, based on the
Collateral Value so included in the Borrowing Base and the amount of excess
permitted over the Lending Sublimits or Borrowing Base Sublimits does not
exceed $5,000,000 at any time or (ii) as to any matter, up to any amount for
up to one (1) Business Day, if the satisfaction of such eligibility
requirements or sublimits cannot be independently determined because of
events beyond the reasonable control of the Borrower (i.e. natural disasters,
transmission failures, etc.), provided that, the Borrower certifies in
writing that all such eligibility requirements and sublimits are in fact
satisfied.
"Borrowing Base Certificate" means a certificate executed by the chief
financial officer or controller of the Borrower (or other employees of the
Borrower so authorized in writing, an original of which authorization shall
be delivered to the Agent, by the chief financial officer or controller)
substantially in the form attached hereto as Exhibit "F".
"Borrowing Base Sublimits" is defined in Section 2.1.2.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Borrowing Subsidiary" means any of Pacific Guarantee Mortgage
Corporation, Mortgage Market, Inc., Point Source Financial, L.L.C. and
Infiniti Mortgage, L.L.C., each of which is a Wholly-Owned Subsidiary of the
Borrower, and any other Wholly-Owned Subsidiaries of the Borrower which may
hereafter be approved by the Required Lenders, which approval shall not be
unreasonably withheld or delayed (provided that the Borrower, the then
existing Borrowing Subsidiaries and any such new Borrowing Subsidiary shall
execute such amendments or further documents as the Agent may require to
evidence the admission of and obligations of such new Borrowing Subsidiary).
"Business Day" means (i) with respect to any borrowing, payment or
rate selection of Eurodollar Advances, a day (other than a Saturday or
Sunday) on which banks generally are open in Chicago and New York for the
conduct of substantially all of their commercial lending activities and on
which dealings in United States dollars are carried on in the London
interbank market and (ii) for all other purposes, a day (other than a
Saturday or Sunday) on which banks generally are open in Chicago for the
conduct of substantially all of their commercial lending activities.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalent Investments" means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper
rated A-1 or better by S&P or P-1 or better by Xxxxx'x, (iii) demand deposit
accounts maintained in the ordinary course of business, (iv) money market
accounts
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maintained in the ordinary course of business, and (v) certificates of
deposit issued by and time deposits with commercial banks (whether domestic
or foreign) having capital and surplus in excess of $100,000,000; PROVIDED in
each case that the same provides for payment of both principal and interest
(and not principal alone or interest alone) and is not subject to any
contingency regarding the payment of principal or interest.
"Change in Control" means Xxxxx Xxxxxx, Xxxx Xxxxxx and/or Xxxxx
Xxxxxx shall cease to collectively own, free and clear of all Liens or other
encumbrances, more than 50% of the outstanding shares of voting stock of the
Borrower on a fully diluted basis; provided, however, that if ownership of
all of the shares of stock of the Borrower is transferred to a holding
company in connection with an initial public offering of the stock of such
holding company, then Change of Control shall mean that Xxxxx Xxxxxx, Xxxx
Xxxxxx and/or Xxxxx Xxxxxx shall cease to collectively own, free and clear of
all Liens or other encumbrances, more than 50% of the outstanding shares of
voting stock of such holding company on a fully diluted basis.
"Code" means the Internal Revenue Code of 1986, as amended, reformed
or otherwise modified from time to time.
"Collateral" means all right, title and interest of the Borrower and
the Borrowing Subsidiaries, as applicable, of every kind and nature, in and
to all of the following property, assets and rights of the Borrower and the
Borrowing Subsidiaries, as applicable, wherever located, whether now existing
or hereafter arising, and whether now or hereafter owned, or acquired by or
accruing or owing to the Borrower or any of the Borrowing Subsidiaries, as
applicable, and all proceeds and products thereof:
(i) all Pledged Mortgages and Pledged Securities, whether
Eligible Collateral or Ineligible Collateral, including all Required
Mortgage Documents related thereto;
(ii) any commitments or other agreements issued by any private
mortgage insurer or by the FHA or VA to insure or guarantee any Pledged
Mortgage;
(iii) all Approved Investor Commitments to purchase Pledged
Securities or Pledged Mortgages (or any Securities to be issued based on
such Pledged Mortgages) from the Borrower or a Borrowing Subsidiary;
(iv) any options to sell or purchase Securities, future
contracts, or any other interest rate protection products which directly
or indirectly protect the Borrower or a Borrowing Subsidiary against
reductions in value of such Pledged Mortgages or Pledged Securities due
to changes in mortgage interest rates;
(v) the Settlement Account and all uncollected deposits into
the Settlement Account, the Funding Account, and any Custodian Settlement
Accounts then in existence with Approved MBS Custodians, as described in
Paragraph 7(c) of the Security Agreement, and all uncollected deposits in
such accounts;
(vi) all property related to the foregoing, including without
limitation, the right to service Pledged Mortgages while owned by the
Borrower or a Borrowing Subsidiary, all accounts and general intangibles
of whatsoever kind so related and all documents or instruments delivered
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to the Collateral Agent in respect of any Pledged Item, including,
without limitation, the right to receive all insurance proceeds and
condemnation awards which may be payable in respect of the premises
encumbered by any Pledged Mortgage; and
(vii) all proceeds and products of any of the foregoing.
"Collateral Agent" means BANK ONE, Texas, N.A. in its capacity as
contractual representative of the Lenders pursuant to Article X and the Security
Agreement, and any successor Collateral Agent appointed in accordance with the
terms of the Security Agreement.
"Collateral Agent Review Procedure" means the required review steps set
forth in Exhibit "1" to the Security Agreement.
"Collateral Transmittal" means a transmittal from the Borrower or a
Borrowing Subsidiary to the Collateral Agent in electronic form (or, at any time
when transmission in electronic form is not practicable, in written form) of the
following information for the following submissions or special treatment of
different types of Collateral: (i) the information described on Exhibit "C" for
each AP Mortgage covered by any Agreement to Pledge, (ii) the information
described on Exhibit "C" (other than the entry thereon for "AP Status Code" and
the entry indicating whether an AP Mortgage is to be funded by check (including
check number) or wire transfer) for each Pledged Mortgage not covered by an
Agreement to Pledge, (iii) the information described on Exhibit 3 to the
Security Agreement for each Pledged Mortgage to be treated as a Gestation
Mortgage Loan, and (iv) such other information as may be reasonably required
from time to time by the Collateral Agent for any Pledged Security.
"Collateral Value" means, with respect to each asset included in
Eligible Collateral on any given day, a value determined as follows:
(i) Each Security shall be valued at the purchase price
committed to under the Approved Investor Commitment which covers such
Security or, if so reasonably required by the Agent from time to time,
the market value of such Security as of any date of determination
thereof, as conclusively determined in good faith by the Agent;
(ii) Each Pledged Mortgage other than a HELOC Loan shall
be valued at the lowest of (A) the unpaid principal balance of such
Pledged Mortgage on its Pledge Date, or (B) the net acquisition cost
(including any discounts and excluding any servicing released premium) of
such Pledged Mortgage, if acquired by the Borrower, or (C) the weighted
average reflected as a percentage (expressed as a percentage of par and
not to exceed 100%) of the unfilled purchase price (net of commitment
fees) of all Approved Investor Commitments which could cover such Pledged
Mortgage applied to the unpaid principal balance of such Pledged Mortgage
on its Pledge Date, or (D) if requested by the Required Lenders, the
then-current market value of such Pledged Mortgage as reasonably
determined by the Agent (in cooperation with the Collateral Agent). The
values described in (A) and (B) of the preceding sentence shall be as
determined by the Borrower as of the Pledge Date of the applicable
Pledged Mortgage and reported to the Collateral Agent, and the value in
(C) of the preceding sentence shall be as determined by the Borrower as
of the Pledge Date of the applicable Pledged Mortgage and on or before
the first Business Day of each month thereafter and reported to the
Collateral Agent; and
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(iii) Each HELOC Loan shall be valued at (1) the lowest of
(A) the unpaid outstanding principal balance, as of the Pledge Date, of
such HELOC Loan (which excludes any fundings made to the mortgagor
thereunder after such Pledge Date), less any principal payments made with
respect to such HELOC Loan after its acquisition date, or (B) the net
acquisition cost (including any discounts and excluding any servicing
released premium) for such HELOC Loan, if acquired by the Pledgor, less
any principal payments made with respect to such HELOC Loan after its
acquisition date, or (C) the weighted average reflected as a percentage
(expressed as a percentage of par and not to exceed 100%) of the unfilled
purchase price (net of commitment fees) of all Approved Investor
Commitments which could cover such HELOC Loan applied to the then current
outstanding principal balance of such HELOC Loan, less any principal
payments made with respect to such HELOC Loan after the most recent
calculation of the weighted average purchase price, or (D) if requested
by the Required Lenders, the then-current market value of such HELOC Loan
as reasonably determined by the Agent (in cooperation with the Collateral
Agent). The values described in (A) and (B) of the preceding sentence
shall be as determined by the Borrower as of the Pledge Date of the
applicable Pledged Mortgage and reported to the Collateral Agent (subject
to reductions due to principal payments as described in (A) and (B)), and
the value in (C) of the preceding sentence shall be as determined by the
Borrower as of the Pledge Date of the applicable Pledged Mortgage and on
or before the first Business Day of each month thereafter and reported to
the Collateral Agent (subject to reductions due to principal payments as
described in (C)).
"Commitment" means, for each Lender, the sum of such Lender's Primary
Commitment and Swingline Commitment, if any.
"Commitment Percentage" means, for each Lender as of any date, the
percentage of the Aggregate Commitment represented by such Lender's Commitment,
as it may be amended from time to time, which initially shall be as set forth on
Schedule "1".
"Conforming Mortgage Loan" means a first priority Residential Mortgage
Loan which (i) either is insured by the FHA or guaranteed by the VA or which
fully conforms to all underwriting and other requirements for sale to FNMA,
FHLMC or GNMA and (ii) if said Mortgage Loan has a loan-to-value-ratio which is
greater than eighty percent (80%), and is not subject to a commitment by the VA
or FHA to guarantee or insure repayment thereof, said Mortgage Loan is covered
by a policy of private mortgage insurance acceptable to FNMA and the Agent.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement or take-or-pay contract.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"Conversion/Continuation Notice" is defined in Section 2.9.
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"Corporate Base Rate" means a rate per annum equal to the corporate
base rate of interest announced by First Chicago from time to time, changing
when and as said corporate base rate changes.
"Coverage Requirement" means, as of any date, the sum of the aggregate
unpaid principal amount of Loans then outstanding under this Agreement.
"Custodian Settlement Accounts" is defined in the Security Agreement.
"Default" means an event described in Article VII.
"Effective Date" is defined in Section 4.1.
"Eligible Collateral" means, as of any date, all Eligible Conforming
Mortgage Loans, Eligible HELOC Loans, Eligible Jumbo Mortgage Loans, Eligible
Non-Agency Mortgage Loans, Eligible Sub-Prime Mortgage Loans and Eligible
Securities.
"Eligible Conforming Mortgage Loan" means an Eligible Mortgage Loan
which: (i) is a Conforming Mortgage Loan; (ii) is subject to an Approved
Investor Commitment; (iii) has been included in Collateral for 180 days or
less since the Pledge Date of such Mortgage Loan; and (iv) has been
originated less than 120 days prior to its Pledge Date.
"Eligible HELOC Loan" means an Eligible Mortgage Loan which: (i) is a
HELOC Loan; (ii) is a first or second priority Residential Mortgage Loan;
(iii) has a maximum line of credit limit of $100,000; (iv) is subject to an
Approved Investor Commitment pursuant to which the right to service such
Mortgage Loan is to be purchased along with the purchase of such Mortgage
Loan (i.e. it is to be sold on a "servicing released" basis); (v) fully
conforms to all underwriting and other requirements for sale to an Approved
Investor issuing an Approved Investor Commitment; (vi) has a loan-to-value
ratio (on a combined basis with the first priority Mortgage Loan in the case
of second priority Pledged Mortgages) not in excess of ninety-five percent
(95%); (vii) has a FICO score of no less than 620; (viii) has been included
in Collateral for 60 days or less since the Pledge Date of such Mortgage
Loan; and (ix) has been originated less than 60 days prior to its Pledge Date.
"Eligible Jumbo Mortgage Loan" means an Eligible Mortgage Loan which:
(i) is a Jumbo Mortgage Loan; (ii) is subject to an Approved Investor
Commitment; (iii) has been included in Collateral for 180 days or less since
the Pledge Date of such Mortgage Loan; and (iv) has been originated less than
120 days prior to its Pledge Date.
"Eligible Mortgage Loan" means any Pledged Mortgage:
(i) which meets the Basic Eligibility Requirements;
(ii) which has no monthly installment of principal and/or
interest which is more than 30 days past due;
(iii) for which, if it is an AP Mortgage:
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(1) the Borrower expects such AP Mortgage to close and
become a valid lien securing actual indebtedness by funding to the
order of the mortgagor thereunder, has not learned of any
information to the contrary and has not received any returned
proceeds of such AP Mortgage from the escrow or closing agent for
such Pledged Mortgage;
(2) the Collateral Agent has received or will receive
the Required Mortgage Documents within seven (7) Business Days
after the date of the related Agreement to Pledge; provided that,
so long as no Default or Unmatured Default is continuing, if (but
only if) a FNMA ASAP Tri-Party Agreement has been executed and is
in effect, the Borrower may sell AP Mortgages to (and deliver the
related Required Mortgage Documents directly to) FNMA so long as
the related sale proceeds (i) will be deposited in the Settlement
Account within seven (7) Business Days after the date of the
related Agreement to Pledge, and (ii) will be no less than the
Collateral Value of the applicable sold AP Mortgages;
(3) the Collateral Value attributable to all AP
Mortgages included in any category of the Borrowing Base does not
exceed forty-five percent (45%) of the Aggregate Commitment during
the first and last seven days in any calendar month, and
(4) the Collateral Value attributable to all AP
Mortgages included in any category of the Borrowing Base does not
exceed thirty-five percent (35%) of the Aggregate Commitment for
any day other than the first and last seven days of any calendar
month;
(iv) which, if subject to an Investor Transmittal Letter or
Trust Receipt and if said Pledged Mortgage was:
(1) withdrawn by the Borrower or any Borrowing
Subsidiary for purposes of correcting clerical or other
non-substantive documentation problems: (i) the promissory
note and other documents relating to said Pledged Mortgage were
returned to the Collateral Agent within fifteen (15) calendar
days from the date of withdrawal, (ii) said Pledged Mortgage
was released to the Borrower or any Borrowing Subsidiary
pursuant to a Trust Receipt and (iii) the Collateral Value of
said Pledged Mortgage when added to the Collateral Value of all
other Pledged Mortgages which have been similarly released to
the Borrower or any Borrowing Subsidiary does not exceed the
lesser of $5,000,000 or two and one-half percent (2.5%) of the
Aggregate Commitment;
(2) shipped by the Collateral Agent directly to an
Approved Investor for purchase pursuant to an Investor Transmittal
Letter which is a "Whole Loan Sale Transmittal Letter" in
substantially the form of Exhibit "4" to the Security Agreement,
the full purchase price therefor has been received by the
Collateral Agent (or said Pledged Mortgage has been returned to
the Collateral Agent) within forty-five (45) days from the date of
shipment by the Collateral Agent; and
(3) shipped by the Collateral Agent directly to a
custodian for purposes of formation of a pool supporting a
Security, such Security is issued and sold and the purchase price
therefor has been received by the Collateral Agent (or said
Pledged
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Mortgage has been returned to the Collateral Agent) within
forty-five (45) days from the date of shipment by the
Collateral Agent; and
(v) which has not been previously included in the Borrowing
Base, then shipped to an investor and returned, for whatever reason, to
the Collateral Agent (provided that the Agent may waive the requirement
of this clause (v) if the Borrower explains to Agent the reason such
Pledged Mortgage was returned and demonstrates to Agent's satisfaction
that such Pledged Mortgage continues to satisfy all eligibility
requirements hereunder).
"Eligible Non-Agency Mortgage Loan" means an Eligible Mortgage Loan
which: (i) is not a Conforming Mortgage Loan or a Jumbo Mortgage Loan; (ii)
is a first or second priority Residential Mortgage Loan; (iii) has an
original principal balance not in excess of $1,000,000; (iv) is subject to an
Approved Investor Commitment pursuant to which the right to service such
Mortgage Loan is to be purchased along with the purchase of such Mortgage
Loan (i.e. it is to be sold on a "servicing released" basis); (v) fully
conforms to all underwriting and other requirements for sale to an Approved
Investor issuing an Approved Investor Commitment; (vi) has a FICO score of no
less than 620; (vii) has a loan-to-value ratio (on a combined basis with the
first priority Mortgage Loan in the case of second priority Pledged
Mortgages) not in excess of ninety-five percent (95%); (viii) has been
included in Collateral for 120 days or less since the Pledge Date of such
Mortgage Loan; and (ix) has been originated less than 60 days prior to its
Pledge Date.
"Eligible Security" means any Pledged Security: (i) which is covered
by an Approved Investor Commitment; and (ii) for which the Collateral Agent
shall have received such evidence as may be required under the Security
Agreement to confirm the existence of the security interest in favor of the
Collateral Agent for the benefit of the Lenders in such Pledged Security.
"Eligible Sub-Prime Mortgage Loan" means an Eligible Mortgage Loan
which: (i) would not otherwise be includable in the Borrowing Base because
either (1) it is none of an Eligible Conforming Mortgage Loan, Eligible HELOC
Loan, Eligible Jumbo Mortgage Loan or Eligible Non-Agency Mortgage Loan or
(2) the Borrowing Base Sublimits listed in clauses (i) through (vii) of
Section 2.1.2 would otherwise limit its inclusion; (ii) is a first or second
priority Residential Mortgage Loan; (iii) has an original principal balance
not in excess of $250,000; (iv) is subject to an Approved Investor Commitment
pursuant to which the right to service such Mortgage Loan is to be purchased
along with the purchase of such Mortgage Loan (i.e. it is to be sold on a
"servicing released" basis); (v) fully conforms to all underwriting and other
requirements for sale to an Approved Investor issuing an Approved Investor
Commitment; (vi) has a loan-to-value ratio (on a combined basis with the
first priority Mortgage Loan in the case of second priority Pledged
Mortgages) not in excess of ninety-five percent (95%); (vii) has been
included in Collateral for 90 days or less since the Pledge Date of such
Mortgage Loan; and (viii) has been originated less than 60 days prior to its
Pledge Date.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating
to (i) the protection of the environment, (ii) the effect of the environment
on human health, (iii) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water
or land, or (iv) the manufacture, processing, distribution, use, treatment,
storage, disposal,
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transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of l974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which bears interest at a
Eurodollar Rate.
"Eurodollar Base Rate" means the rate determined by the Agent to be
the rate at which First Chicago offers to place deposits in U.S. dollars with
first-class banks in the London interbank market at approximately 11 a.m.
(London time) two Business Days prior to the first day of the applicable
Interest Period, in the approximate amount of $1,000,000 and having a
maturity approximately equal to such Interest Period.
"Eurodollar Loan" means a Loan which bears interest at a Eurodollar
Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance, the sum
of (i) the quotient of (a) the Eurodollar Base Rate applicable to such
Interest Period, divided by (b) one minus the Reserve Requirement (expressed
as a decimal) applicable to such Interest Period, plus (ii) one percent
(1.0%) per annum. The Eurodollar Rate shall be rounded to the next higher
multiple of 1/16 of 1% if the rate is not such a multiple.
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Agent, taxes imposed on its overall net income,
and franchise taxes imposed on it, by (i) the jurisdiction under the laws of
which such Lender or the Agent is incorporated or organized or (ii) the
jurisdiction in which the Agent's or such Lender's principal executive office
or such Lender's applicable Lending Installation is located.
"Existing Warehouse Facilities" means the credit facilities (other
than the facility created pursuant to this Agreement) in existence on the
date hereof maintained by the Borrower and/or one or more Borrowing
Subsidiaries for the purpose of originating or purchasing (and secured by)
Mortgage Loans or Securities.
"Facility Fee Rate" means one-eighth of one percent (0.125%) per annum.
"Federal Agency" means FHLMC, FNMA, GNMA, FHA or VA.
"Federal Funds Effective Rate" means, for any day, an interest rate
per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published for such day (or, if such day
is not a Business Day, for the immediately preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations at
approximately 10 a.m. (Chicago time) on such day on such transactions
received by the Agent from three Federal funds brokers of recognized standing
selected by the Agent in its sole discretion.
"Federal Funds Funding Rate" means, with respect to any Fed Funds Loan
for any day, the rate per annum equal to the consensus (or if no consensus
exists, the arithmetic average) of the rates at which
-15-
reserves are offered by first-class banks to other first-class banks (at
approximately 10:00 a.m. (Chicago time)) on such day (or if such day is not a
Business Day, on the immediately preceding Business Day) on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, based on quotes received by the Agent from three
federal funds brokers of recognized standing selected by the Agent in its
sole discretion.
"Federal Funds Rate" means, for any day, an interest rate per annum
equal to the Federal Funds Funding Rate for such day plus one and one-eighth
percent (1.125%) per annum.
"Fed Funds Advance" means an Advance which bears interest at the
Federal Funds Rate.
"Fed Funds Loan" means any Loan which bears interest at the Federal
Funds Rate.
"Fees" is defined in Section 2.7.
"FHA" means the Federal Housing Administration or any other agency,
corporation or instrumentality of the United States to which the powers and
duties of the Federal Housing Administration have been transferred.
"FHA-Approved Mortgagee" means an institution that is approved by the
FHA to act as a servicer and mortgagee of record with respect to a Mortgage
Loan insured by the FHA.
"FHLMC" means the Federal Home Loan Mortgage Corporation or any other
agency, corporation or instrumentality of the United States to which the
powers and duties of the Federal Home Loan Mortgage Corporation have been
transferred.
"FHLMC-Approved Lender" means an institution that is approved by the
FHLMC to act as a lender in connection with the origination of any Mortgage
Loan purchased by the FHLMC.
"FHLMC Security" means a security representing an undivided fractional
interest in a pool of Mortgage Loans, which security is issued and guaranteed
as to full and timely payment of interest and full collection of principal by
FHLMC.
"FICO" means the "delinquency predictor" model established by Fair
Xxxxx Co. and shown on a credit report prepared by Equifax, TRW or Trans
Union.
"First Chicago" means The First National Bank of Chicago in its
individual capacity, and its successors.
"Fixed Rate" means the Eurodollar Rate.
"Fixed Rate Advance" means an Advance which bears interest at a Fixed
Rate.
"Fixed Rate Loan" means a Loan which bears interest at a Fixed Rate.
-16-
"FNMA" means the Federal National Mortgage Association or any other
agency, corporation or instrumentality of the United States to which the
powers and duties of the Federal National Mortgage Association have been
transferred.
"FNMA-Approved Lender" means an institution that is approved by FNMA
to act as a lender in connection with the origination of any Mortgage Loan
purchased by FNMA.
"FNMA ASAP Tri-Party Agreement" means an agreement by and among the
Borrower and the Borrowing Subsidiaries, FNMA and the Collateral Agent
pursuant to which the parties thereto agree that the proceeds of all AP
Mortgages sold by the Borrower or any Borrowing Subsidiary to FNMA shall be
wired directly to the Settlement Account.
"FNMA Security" means a security representing an undivided fractional
interest in a pool of Mortgage Loans, which security is issued and guaranteed
as to full and timely payment of principal and interest by FNMA.
"Funding Account" is defined in Section 8.4.
"GAAP" means generally accepted accounting principles as in effect
from time to time, consistently applied.
"GAAP Carrying Value" means, with respect to any asset of the
Borrower, the value at which such asset is carried on the books of the
Borrower in accordance with GAAP after excluding capitalized items. Any
changes in the methodology used for adjusting such book value shall be
subject to the prior approval of the Agent.
"Gestation Collateral" means that portion of the Collateral which
consists of Gestation Mortgage Loans and Securities issued in exchange for
Gestation Mortgage Loans.
"Gestation Mortgage Loans" means, as of any date, any Pledged
Mortgages which the Borrower has identified as fully qualified for initial
certification for the purpose of creating a pool of Mortgage Loans to support
the issuance of a Security and with respect to which the Borrower has
requested that the Collateral Agent either (i) acting in its capacity as pool
custodian, initially certify for inclusion in such a pool or (ii) acting in
its capacity as Collateral Agent, ship to a Federal Agency to obtain initial
certification by such Federal Agency for inclusion in such a pool.
"GNMA" means the Government National Mortgage Association or any other
agency, corporation or instrumentality of the United States as to which the
powers and duties of the Governmental National Mortgage Association have been
transferred.
"GNMA Security" means a security representing an undivided fractional
interest in a pool of Mortgage Loans, which security is issued by the
Borrower and guaranteed as to full and timely payment of principal and
interest by GNMA without regard as to whether the Borrower collects any
payments on such Mortgage Loans.
"HELOC Loan" means a "home equity" line of credit secured by a first
or second priority Mortgage on a Single Family Residence.
-17-
"Ineligible Collateral" means any Pledged Item that does not at the
time constitute Eligible Collateral.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary
course of such Person's business payable on terms customary in the trade),
(iii) obligations, whether or not assumed, secured by Liens or payable out of
the proceeds or production from property now or hereafter owned or acquired
by such Person, (iv) obligations which are evidenced by notes, acceptances,
or other instruments, (v) Capitalized Lease Obligations, (vi) Contingent
Obligations, (vii) obligations (contingent or otherwise) in respect of
Letters of Credit, (viii) obligations in respect of Sale and Leaseback
Transactions, (ix) Operating Lease Obligations, (x) Net Xxxx-to-Market
Exposure of Rate Hedging Agreements, and (xi) any other obligation for
borrowed money or other financial accommodation which in accordance with
Agreement Accounting Principles would be shown as a liability on a
consolidated balance sheet of such Person.
"Interest Period" means, with respect to a Eurodollar Advance, a
period of one, two or three months commencing on a Business Day, all as
selected by the Borrower pursuant to this Agreement. An Interest Period of
one, two or three months shall end on the day which corresponds numerically
to such date one, two or three months thereafter, provided, however, that if
there is no such numerically corresponding day in such next, second or third
succeeding month, such Interest Period shall end on the last Business Day of
such next, second or third succeeding month. If an Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period
shall end on the next succeeding Business Day, provided, however, that if
said next succeeding Business Day falls in a new calendar month, such
Interest Period shall end on the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in
the trade) or contribution of capital by such Person; any stocks, bonds,
mutual funds, partnership interests, notes, debentures or other securities
owned by such Person; any deposit accounts and certificates of deposit owned
by such Person; and any structured notes, derivative financial instruments
and other similar instruments or contracts owned by such Person.
"Investor Transmittal Letter" means either a "Whole Loan Sale
Transmittal Letter" or a "Warehouse-Related MBS Transmittal Letter"
substantially in the form of Exhibits "4" and "5", respectively, to the
Security Agreement.
"Jumbo Mortgage Loan" means a Conforming Mortgage Loan except for
size, but which has an original principal balance of not more than $1,000,000.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent,
the office, branch, subsidiary or affiliate of such Lender or the Agent
listed on the signature pages hereto or on a Schedule hereto or otherwise
selected by such Lender or the Agent pursuant to Section 2.19.
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"Lending Sublimits" is defined in Section 2.1.1.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Leverage Ratio" means the ratio of Total Liabilities to Tangible Net
Worth.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, encumbrance or preference, priority or other
security agreement of any kind or nature whatsoever (including, without
limitation, the interest of a vendor or lessor under any conditional sale,
Capitalized Lease or other title retention agreement).
"Loan" means, with respect to a Lender, such Lender's loan made
pursuant to Article II (or any conversion or continuation thereof).
"Loan Documents" means this Agreement, any Notes issued pursuant to
Section 2.15, the Security Agreement, the mandate letter agreement among the
Borrower, the Agent and the Arranger dated January 22, 1999, and the other
documents and agreements contemplated hereby and executed by the Borrower or
any Borrowing Subsidiary or any other Person in favor of the Agent, the
Collateral Agent or any Lender.
"Material Adverse Effect" means a material adverse effect on (i) the
business, financial condition or results of operations of the Borrower and
its Subsidiaries taken as a whole, (ii) the ability of the Borrower or any
Borrowing Subsidiary to perform its obligations under the Loan Documents, or
(iii) the validity or enforceability of any of the Loan Documents or the
rights or remedies of the Agent or the Lenders thereunder.
"Material Subsidiary" means each Borrowing Subsidiary and each other
Subsidiary of the Borrower which (i) represents more than 5% of the
consolidated assets of the Borrower and its Subsidiaries as would be shown in
the consolidated financial statements of the Borrower and its Subsidiaries as
at the beginning of the twelve-month period ending with the month in which
such determination is made, or (ii) is responsible for more than 5% of the
consolidated net sales or of the consolidated net income of the Borrower and
its Subsidiaries as reflected in the financial statements referred to in
clause (i) above.
"Moody's" means Xxxxx'x Investors Service, Inc. or any successor to
its business.
"Mortgage" means a mortgage, deed of trust, security deed or similar
instrument purporting to create a first or second lien or similar interest in
real estate and improvements thereon.
"Mortgage Loan" means a loan of money evidenced by a Mortgage Note and
secured by a Mortgage.
"Mortgage Note" means a note evidencing the indebtedness secured by a
Mortgage.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
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"Net Xxxx-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all
unrealized profits of such Person arising from Rate Hedging Agreements.
"Unrealized losses" means the fair market value of the cost to such Person of
replacing a Rate Hedging Agreement as of the date of determination (assuming
such Rate Hedging Agreement were to be terminated as of that date), and
"unrealized profits" means the fair market value of the gain to such Person
of replacing a Rate Hedging Agreement as of the date of determination
(assuming such Rate Hedging Agreement were to be terminated as of that date).
"Net Worth" means, as of any date of determination thereof, the net
worth of the Borrower and its Subsidiaries on a consolidated basis as
determined in accordance with Agreement Accounting Principles.
"Non-Agency and HELOC Premium Balance" means, for any day, the amount
(if any) by which (i) the aggregate principal balance of all Loans
outstanding on such day exceeds (ii) that portion of the Borrowing Base on
such date attributable to (collectively) Eligible Conforming Mortgage Loans,
Eligible Jumbo Mortgage Loans and Eligible Sub-Prime Mortgage Loans.
"Note" means any promissory note issued at the request of a Lender
pursuant to Section 2.15 evidencing amounts that may be advanced from time to
time under this Agreement in substantially the form of Exhibit "A" attached
hereto, including any amendment, modification, renewal or replacement of any
such promissory note.
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower or any
Borrowing Subsidiary to the Lenders or to any Lender, the Agent, the
Collateral Agent or any indemnified party arising under the Loan Documents.
"Operating Lease" of a Person means any lease of Property (other than
a Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of
the lessor) of one year or more.
"Operating Lease Obligations" means, as at any date of determination,
the amount obtained by aggregating the present values, determined in the case
of each particular Operating Lease by applying a discount rate (which
discount rate shall equal the discount rate which would be applied under
Agreement Accounting Principles if such Operating Lease were a Capitalized
Lease) from the date on which each fixed lease payment is due under such
Operating Lease to such date of determination, of all fixed lease payments
due under all Operating Leases of the Borrower and its Subsidiaries.
"Other Taxes" is defined in Section 3.5(ii).
"Overnight Transaction Loan Effective Rate" means, as of any day, a
fluctuating rate of interest per annum determined by the Agent as its
overnight transaction loan rate for such day.
-20-
"Overnight Transaction Loan Rate" means, with respect to a Swingline
Advance, a rate equal to the sum of (i) the Overnight Transaction Loan
Effective Rate plus (ii) one and one-quarter percent (1.25%) per annum.
"Oversize Jumbo Loans" means a Jumbo Mortgage Loan which has an
original principal balance in excess of $650,000.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the first Business Day of each calendar month.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, limited liability company, enterprise, trust or
other entity or organization, or any government or political subdivision or
any agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Code as to which the Borrower or any member of the Controlled
Group may have any liability.
"Pledge Date" means the date on which a Pledged Item is first
delivered in pledge to the Collateral Agent for the benefit of the Lenders or
is otherwise made subject to a security interest in favor of the Collateral
Agent for the benefit of the Lenders, provided that the date of delivery of a
Mortgage Loan covered by an Agreement to Pledge shall be deemed to be the
date of delivery of such Agreement to Pledge even after subsequent delivery
of the related Required Mortgage Documents.
"Pledged Item" means any Pledged Mortgage or Pledged Security.
"Pledged Mortgages" means all Mortgage Loans that are from time to
time delivered (or, in the case of AP Mortgages, are committed to be
delivered) to the Collateral Agent for the benefit of the Lenders pursuant to
this Agreement and the Security Agreement.
"Pledged Securities" means all Securities that are from time to time
pledged to the Collateral Agent for the benefit of the Lenders pursuant to
this Agreement and the Security Agreement.
"Pledgor" means, with respect to any Pledged Item, the Borrower or the
applicable Borrowing Subsidiary which owns such Pledged Item.
"Post-Default Swingline Advance" means any Swingline Advance made at a
time when the Swingline Lender has actual knowledge that a Default or
Unmatured Default which has not been waived exists or would exist upon the
making of such Swingline Advance; provided that any such Swingline Advance
shall cease to be a Post-Default Swingline Advance at such time, if any, as
the Lenders waive or accept cure of the applicable Default or Unmatured
Default.
"Primary Advance" means a Eurodollar Advance, a Fed Funds Advance or
an Alternate Base Rate Advance.
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"Primary Commitment" means, for each Lender, the obligation of such
Lender to make Loans not exceeding the amount set forth as its "Primary
Commitment" (which equals its Commitment MINUS its Swingline Commitment, if
any) on Schedule "1" attached hereto or as set forth in any Notice of
Assignment relating to any assignment that has become effective pursuant to
Section 12.3.2, as such amount may be modified from time to time pursuant to
the terms hereof.
"Primary Commitment Percentage" means, for each Lender as of any date,
the quotient of (a) such Lender's Primary Commitment divided by (b) the
aggregate Primary Commitments (which equals the Aggregate Commitment MINUS
the Swingline Commitment), which Primary Commitment Percentage shall
initially be as set forth on Schedule "1" attached hereto, as it may be
amended from time to time.
"Primary Loan" means a Loan consisting of a portion of a Primary
Advance.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets
owned, leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Rate Hedging Agreement" means an agreement, device or arrangement
providing for payments which are related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements,
forward currency exchange agreements, interest rate floor, cap or collar
protection agreements, forward rate currency or interest rate options, puts
and warrants.
"Rate Hedging Obligations" of a Person means any and all obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions
and modifications thereof and substitutions therefor), under (i) any and all
Rate Hedging Agreements, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Hedging Agreement.
"Recourse Servicing" means any servicing rights under a Servicing
Agreement which obligates the Borrower or any Borrowing Subsidiary either to
repurchase Mortgage Loans upon default by the borrower thereunder or to
indemnify any party having an interest in such Mortgage Loans against any
loss arising from such a default for reasons other than (i) a breach of any
representations or warranties regarding the condition of such Mortgage Loans
at origination which were made by the Borrower or any Borrowing Subsidiary as
originator of such Mortgage Loans, or (ii) the default in payment by the
mortgagor with respect to the first payment due after the date on which the
applicable Mortgage Loan was sold.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors
relating to the extension of credit by banks for the purpose of purchasing or
carrying margin stocks applicable to member banks of the Federal Reserve
System.
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"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a
Plan, excluding, however, such events as to which the PBGC by regulation
waived the requirement of Section 4043(a) of ERISA that it be notified within
30 days of the occurrence of such event, provided, however, that a failure to
meet the minimum funding standard of Section 412 of the Code and of Section
302 of ERISA shall be a Reportable Event regardless of the issuance of any
such waiver of the notice requirement in accordance with either Section
4043(a) of ERISA or Section 412(d) of the Code.
"Reports" is defined in Section 10.14.
"Required Lenders" means Lenders in the aggregate having at least 51%
of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 51% of the aggregate
unpaid principal amount of the outstanding Advances.
"Required Mortgage Documents" means the instruments and documents
described in Schedule "A" to the Security Agreement, as applicable to a
particular Mortgage Loan, which are required to be delivered to the
Collateral Agent.
"Reserve Requirement" means, with respect to the Eurodollar Rate
applicable to an Interest Period, the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves) which is
imposed under Regulation D on eurocurrency liabilities.
"Residential Mortgage Loan" means a Mortgage Loan secured by a
Mortgage on a Single Family Residence.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor to its business.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Security" means any FHLMC Security, FNMA Security or GNMA Security.
"Security Agreement" means the Security and Collateral Agency
Agreement as of even date herewith, substantially in the form of Exhibit "G"
attached hereto, by and among the Borrower, the Borrowing Subsidiaries, the
Agent, and the Collateral Agent, pursuant to which a security interest is
created in favor of the Collateral Agent for the Lenders under this Agreement
in certain Collateral to be pledged pursuant to this Agreement, as the same
may, from time to time, be further supplemented, modified or amended.
"Servicing Agreement" means a written contract of the Borrower with
another Person to act on behalf of such other Person to, among other things,
receive payments in respect of Mortgage Loans and to service Mortgage Loans,
whether or not such Mortgage Loans are Pledged Mortgages.
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"Settlement Account" is defined in Section 8.4.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Single Family Residence" means a one to four family dwelling unit,
which may be a condominium unit but which shall not be a mobile home,
manufactured housing or a dwelling unit in a cooperative apartment building.
"Subordinated Indebtedness" means the Indebtedness of Pacific
Guarantee Mortgage Corporation described on Exhibit K hereto and any other
Indebtedness which the Required Lenders may hereafter approve as qualifying
as Subordinated Indebtedness, the payment of which in either case shall be
subordinated to the payment of the Obligations pursuant to subordination
agreements in the form attached hereto as Exhibit L.
"Sub-Prime Premium Balance" means, for any day, the amount (if any) by
which (i) the aggregate principal balance of all Loans outstanding on such
day exceeds (ii) that portion of the Borrowing Base on such date attributable
to (collectively) Eligible Conforming Mortgage Loans, Eligible HELOC Loans,
Eligible Jumbo Mortgage Loans and Eligible Non-Agency Mortgage Loans.
"Subservicing Agreement" means a Servicing Agreement between the
Borrower or any Borrowing Subsidiary and a Person which does not own the
Mortgage Loans being serviced thereunder but only has servicing or other
non-ownership rights with respect thereto, pursuant to which the Borrower or
any Borrowing Subsidiary subservices Mortgage Loans for others.
"Subsidiary" of a Person means (i) any corporation more than 50% of
the outstanding securities having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one
or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization more than 50% of
the ownership interests having ordinary voting power of which shall at the
time be so owned or controlled. Unless otherwise expressly provided, all
references herein to a "Subsidiary" shall mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which (i) represents more than 20% of
the consolidated assets of the Borrower and its Subsidiaries as would be
shown in the consolidated financial statements of the Borrower and its
Subsidiaries as at the beginning of the twelve-month period ending with the
month in which such determination is made, or (ii) is responsible for more
than 20% of the consolidated net sales or of the consolidated net income of
the Borrower and its Subsidiaries as reflected in the financial statements
referred to in clause (i) above.
"Swingline Advances" means an Advance made by the Swingline Lender
under the special availability provisions described in Section 2.4 bearing
interest at the Overnight Transaction Loan Rate (except that Swingline
Advances made pursuant to Section 2.4.2 and Swingline Advances requested
after 4:00 p.m. shall bear interest at the Alternate Base Rate).
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"Swingline Commitment" means the obligation of First Chicago to make
Swingline Loans not exceeding the amount set forth as its "Swingline
Commitment" on Schedule "1" hereto, as such amount may be modified from time
to time pursuant to the terms hereof.
"Swingline Lender" means First Chicago.
"Swingline Loan" means a Loan consisting of a Swingline Advance.
"Tangible Net Worth" means Net Worth, PLUS the principal balance of
the Subordinated Indebtedness, LESS the sum of the following (without
duplication): (a) any assets of the Borrower and its consolidated
Subsidiaries which would be treated as intangibles under Agreement Accounting
Principles including, without limitation, any write-up of assets (other than
in connection with acquisitions of new Subsidiaries or assets), good-will,
research and development costs, trade-marks, trade names, copyrights, patents
and unamortized debt discount and expenses and (b) loans or other extensions
of credit to Affiliates of the Borrower or to officers or employees of the
Borrower or of any of its Affiliates (but only to the extent such loans or
extensions of credit are accounted for in the computation of Net Worth and
not offset by corresponding liabilities pursuant to consolidation in such
computation of Net Worth) other than (i) Mortgage Loans made to such Persons
in the ordinary course of business and (ii) the Subordinated Indebtedness.
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any liabilities with
respect to the foregoing, but excluding Excluded Taxes.
"Termination Date" means March 29, 2000 or any earlier date on which
the Aggregate Commitment is reduced to zero or otherwise terminated pursuant
to the terms hereof.
"Total Liabilities" means the total liabilities of the Borrower and
its Subsidiaries, all as determined on a consolidated basis, in accordance
with Agreement Accounting Principles, EXCLUDING the Subordinated Indebtedness.
"Transferee" is defined in Section 12.5.
"Trust Receipt" means a trust receipt substantially in the form of
Exhibit "2" to the Security Agreement.
"Type" means, with respect to any Advance, its nature as an Alternate
Base Rate Advance, Eurodollar Advance, Fed Funds Advance or Swingline
Advance.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
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"VA" means the Veterans Administration or any other agency,
corporation or instrumentality of the United States as to which the powers
and duties of the Veterans Administration have been transferred.
"VA-Approved Lender" means an institution that is approved by the VA
to act as a lender in connection with the origination of any Mortgage Loan
guaranteed by the VA.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more
Wholly-Owned Subsidiaries of such Person, or by such Person and one or more
Wholly-Owned Subsidiaries of such Person, or (ii) any partnership, limited
liability company, association, joint venture or similar business
organization 100% of the ownership interests having ordinary voting power of
which shall at the time be so owned or controlled.
"Year 2000 Issues" means anticipated costs, problems and uncertainties
associated with the inability of certain computer applications to effectively
handle data including dates on and after January 1, 2000, as such inability
materially affects the business, operations and financial condition of the
Borrower and its Subsidiaries and of the Borrower's and its Subsidiaries'
material customers, suppliers and vendors.
"Year 2000 Program" is defined in Section 5.19.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. COMMITMENT, SUBLIMITS AND TYPES OF ADVANCES.
2.1.1. COMMITMENT AND LENDING SUBLIMITS. From and including
the date of this Agreement and prior to the Termination Date, each Lender
severally agrees, on the terms and conditions set forth in this Agreement
(including the lending sublimits (the "Lending Sublimits") set forth below),
to make Loans to the Borrower and the Borrowing Subsidiaries from time to
time; provided that, on any date, after giving effect to such Loans and all
other Loans that the Borrower (on behalf of itself or any Borrowing
Subsidiary) has requested be made on such date under this Agreement:
(1) the aggregate principal balance then outstanding of Loans
then held by such Lender shall not exceed the amount of such Lender's
then-current Commitment;
(2) the aggregate principal balance then outstanding of all
Primary Loans then held by such Lender shall not exceed the amount of
such Lender's Primary Commitment;
(3) subject to Section 2.4.2, the aggregate principal balance
of all outstanding Swingline Loans held by the Swingline Lender on such
date shall not exceed the Swingline Lender's Swingline Commitment;
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(4) the aggregate principal balance of all outstanding Advances
under this Agreement on such date shall not exceed the Aggregate
Commitment; and
(5) the Coverage Requirement, on such date, shall not exceed
the lesser of the Aggregate Commitment or the then-current Borrowing
Base.
Subject to the terms of this Agreement, the Borrower and the Borrowing
Subsidiaries may borrow, repay and reborrow at any time prior to the
Termination Date. The Commitments to lend hereunder shall expire on the
Termination Date.
2.1.2. BORROWING BASE SUBLIMITS. The maximum amount that can
be credited toward the Borrowing Base from certain types of Collateral shall
be limited (the "Borrowing Base Sublimits") so that the Borrowing Base value
attributable to:
(i) all Jumbo Mortgage Loans shall not exceed thirty-five
percent (35%) of the Aggregate Commitment;
(ii) Oversize Jumbo Loans shall not exceed five percent (5%) of
the Aggregate Commitment;
(iii) Eligible Non-Agency Mortgage Loans shall not exceed ten
percent (10%) of the Aggregate Commitment;
(iv) Eligible Non-Agency Mortgage Loans having original
principal balances in excess of $650,000 shall not exceed
two and one-half percent (2.5%) of the Aggregate
Commitment;
(v) Eligible Non-Agency Mortgage Loans having FICO scores less
than 650 shall not exceed two and one-half percent (2.5%)
of the Aggregate Commitment;
(vi) Eligible Non-Agency Mortgage Loans, Eligible HELOC Loans
and Eligible Sub-Prime Mortgage Loans which are not first
priority Mortgage Loans shall not collectively exceed five
percent (5%) of the Aggregate Commitment;
(vii) Eligible HELOC Loans shall not exceed two percent (2%) of
the Aggregate Commitment; and
(viii) Eligible Sub-Prime Mortgage Loans shall not exceed five
percent (5%) of the Aggregate Commitment.
2.1.3. TYPES OF ADVANCES. Each Advance hereunder shall consist
of one or more Primary Advances or Swingline Advances requested by the
Borrower in accordance with Sections 2.8 and 2.9. Primary Advances shall be
available as provided in Section 2.2 and Swingline Advances shall be
available as provided in Section 2.4.
2.2. PRIMARY ADVANCES. Subject to the terms and conditions herein
(including the Lending Sublimits) the Borrower may request Primary Advances
from the Lenders on a pro rata basis in accordance
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with each Lender's Primary Commitment Percentage. Primary Advances shall
accrue interest at the Eurodollar Rate, the Federal Funds Rate or the
Alternate Base Rate, as selected by the Borrower in accordance with Sections
2.8 and 2.9.
2.3. INTENTIONALLY OMITTED.
2.4 SWINGLINE ADVANCES.
2.4.1 GENERAL. Subject to the terms and conditions herein
(including the Lending Sublimits), the Borrower may request Swingline
Advances from the Swingline Lender. On any Borrowing Date each Swingline
Advance requested by the Borrower shall be funded to the Borrower by the
Swingline Lender in such amounts as designated in the Borrowing Notice.
2.4.2 SWINGLINE ADVANCES TO PAY AMOUNTS DUE TO SWINGLINE
LENDERS. If any amounts are advanced by the Swingline Lender to cover checks
or wire transfers from any accounts of the Borrower or any Borrowing
Subsidiary maintained with the Swingline Lender when there are insufficient
funds in such accounts to cover the applicable check or wire transfer and
sufficient funds are not deposited in the applicable account before the close
of business on the day on which the applicable check or wire transfer request
is honored, then the Borrower shall be deemed to have requested, and the
Swingline Lender may (but shall not be obligated to) elect to make, a
Swingline Advance at the Alternate Base Rate to pay such overdraft amount
(even if such a Swingline Advance would cause the aggregate amount of all
outstanding Swingline Advances to exceed the Swingline Commitment); PROVIDED
HOWEVER, that (i) the Swingline Lender shall not make any such Swingline
Advance to the extent such Advance would cause (x) the Coverage Requirement
to exceed the Borrowing Base or (y) the aggregate principal balance of all
outstanding Advances under this Agreement to exceed the Aggregate Commitment,
and (ii) the reallocations of any such Swingline Advances among the Lenders
shall be as set forth in Section 2.6.
2.5. INTENTIONALLY OMITTED.
2.6. REALLOCATION. At the request of the Swingline Lender at any
time, and at the request of any Lender given during the continuance of a
Default, all Advances shall be reallocated among all Lenders in accordance
with each Lender's Commitment Percentage, and all Swingline Advances shall be
deemed Alternate Base Rate Advances upon such reallocation. Each Lender
holding less than its Commitment Percentage of all Advances shall immediately
purchase for cash and at face value such participations in the Notes and
Loans held by other Lenders, and make such other adjustments, as may be
needed to cause each Lender to hold its Commitment Percentage of the
Advances. No Lender shall be required to so purchase such participations to
the extent that such purchase would cause such Lender's share of the
aggregate unpaid principal amount of all Loans then outstanding under this
Agreement to exceed its Commitment hereunder. Notwithstanding anything to the
contrary contained in this Agreement, after any such reallocation has
occurred following the occurrence and during the continuance of a Default
(but not upon a reallocation made at the election of the Swingline Lender
absent any Default): (i) the Swingline Commitment shall be zero and (ii) all
future Advances, if any, shall be made as Alternate Base Rate Advances.
Notwithstanding the provisions of this Section, Post-Default Swingline
Advances shall not be reallocated among the Lenders but shall be held solely
by the Swingline Lender. In no event shall the Swingline Lender be obligated
to make any Post-Default Swingline Advances.
2.7. FEES. The Borrower shall pay the following fees (the "Fees"):
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2.7.1. UP-FRONT FEES. The up-front fees payable to the Lenders
on the Effective Date pursuant to the terms of the offer letter dated
February 8, 1999 from the Arranger to prospective Lenders.
2.7.2. FACILITY FEES. A facility fee based on the Aggregate
Commitment from time to time from and after the date hereof, calculated at
the Facility Fee Rate, expressed as a per diem rate on the actual Aggregate
Commitment for each day during the preceding full or partial calendar
quarter, payable (without duplication) in arrears, on the first Business Day
of each calendar quarter, upon each reduction in or termination of the
Aggregate Commitment and on the Termination Date. This fee shall be paid to
the Agent and allocated among the Lenders on a pro rata basis in accordance
with their respective Commitments during the applicable period.
2.7.3. COLLATERAL PREMIUM FEES.
(1) For each day on which a Non-Agency and HELOC Premium
Balance exists, a fee ("Non-Agency Premium Fee") to the Lenders in an
amount equal to (A) 0.125% multiplied by (B) such Non-Agency and HELOC
Premium Balance and divided by (C) 360, which Non-Agency Premium Fee
shall be allocated among the Lenders pro-rata in proportion to their
respective outstanding Loans on such day.
(2) For each day on which a Sub-Prime Premium Balance
exists, a fee ("Sub-Prime Premium Fee") to the Lenders in an amount equal
to (A) 0.25% multiplied by (B) such Sub-Prime Premium Balance and divided
by (C) 360, which Sub-Prime Premium Fee shall be allocated among the
Lenders pro-rata in proportion to their respective outstanding Loans on
such day.
(3) Notwithstanding the fact that the Non-Agency Premium
Fee and the Sub-Prime Premium Fee shall be calculated and accrued daily,
such Fees shall be payable in arrears on each Payment Date and on the
Termination Date.
2.7.4. LEVERAGE PREMIUM FEE. A leverage premium fee based on
the outstanding Loans from time to time, calculated at the Leverage Premium
Fee Rate (as defined below in this Section), on the actual outstanding Loans
for each day during the preceding full or partial calendar month, payable in
arrears on each Payment Date and on the Termination Date. This fee shall be
paid to the Agent and allocated among the Lenders on a pro rata basis in
proportion to their respective outstanding Loans during the applicable
period. "Leverage Premium Fee Rate" shall mean 0.125% per annum for each
month for which the Leverage Ratio exceeds 10.0 to 1.0 as of the last day of
the prior month (e.g. the Leverage Premium Fee Rate for March, 1999 shall be
based on the Leverage Ratio as of the last day of February, 1999); provided
that (i) the Leverage Premium Fee Rate shall be increased to 0.25% per annum
for each month through and including August, 1999 for which the Leverage
Ratio exceeds 12.0 to 1.0 as of the last day of the prior month, and (ii) if
the Leverage Ratio exceeds 12.0 to 1.0 as of the last day of August, 1999,
then the Leverage Premium Fee Rate for the period from September 1, 1999
through September 30, 1999 shall equal 0.25% per annum (and shall equal
0.125% per annum for the remainder of September, 1999).
2.7.5. AMENDMENT FEE. An amendment fee of $2,500 to each
Lender for each amendment to this Agreement other than (i) the first
amendment hereto made at the request of the Borrower, or (ii) any amendment
hereto made solely at the request of the Agent or one or more Lenders.
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2.7.6. AGENT FEES. Any fees payable to the Agent pursuant to
the Borrower's prior letter agreement with the Agent dated January 22, 1999.
2.7.7. COLLATERAL AGENT FEES. Any fees payable to the
Collateral Agent for its services rendered pursuant to the Security Agreement
as agreed to by the Borrower and charged by the Collateral Agent from time to
time.
2.8. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW
ADVANCES. The Borrower shall select the Type of Advance and, in the case of
each Fixed Rate Advance, the Interest Period applicable to each Advance from
time to time. The Borrower shall give the Agent irrevocable notice (a
"Borrowing Notice") not later than (i) 11:00 a.m. (Chicago time) on the
Borrowing Date of each Alternate Base Rate Advance or Fed Funds Advance, (ii)
4:45 p.m. (Chicago time) on the proposed Borrowing Date for each Swingline
Advance (provided that Swingline Advances requested after 4:00 shall bear
interest at the Alternate Base Rate rather than at the Overnight Transaction
Loan Rate), and (iii) 11:00 a.m. (Chicago time) at least three Business Days
before the Borrowing Date for each Eurodollar Advance, specifying:
(a) the Borrowing Date, which shall be a Business Day, of such
Advance,
(b) the aggregate amount of such Advance, which shall (1) not be less
than $3,500,000 for all Advances other than Swingline Advances,
and (2) not be less than $100,000 for Swingline Advances,
(c) the Type of Advance selected,
(d) in the case of each Eurodollar Advance, the Interest Period
applicable thereto, and
(e) if the Advance request is on behalf of a Borrowing Subsidiary, the
identity of applicable Borrowing Subsidiary.
All Advances shall be requested by the Borrower, and each of the Borrowing
Subsidiaries irrevocably authorizes (i) the Borrower to request Advances on
its behalf and (ii) the Agent to honor requests for Advances made by the
Borrower. Not later than noon (Chicago time) on each Borrowing Date, with
respect to all Advances other than Swingline Advances, each Lender shall make
available its Loan or Loans comprising such Advance, in funds immediately
available in Chicago to the Agent at its address specified pursuant to
Article XIII; provided that Swingline Advances may be made available at any
time up to the close of business. The Agent will make the funds so received
from the Lenders available to the Borrower at the Agent's aforesaid address.
2.9. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES. An
Alternate Base Rate Advance shall continue as an Alternate Base Rate Advance
unless and until such Alternate Base Rate Advance is converted into another
Type of Advance (other than a Swingline Advance). A Fed Funds Advance shall
continue as a Fed Funds Advance unless and until (a) such Advance is
converted into a different Type of Advance (other than a Swingline Advance)
in accordance with the terms hereof or (b) the Borrower or a Borrowing
Subsidiary has paid any such Fed Funds Advance prior to 11:00 a.m. (Chicago
time) on any Business Day. A Swingline Advance shall continue as a Swingline
Advance unless and until the Borrower has paid any such Swingline Advance
prior to 4:00 p.m. (Chicago time) on any Business Day. Each Eurodollar
Advance shall continue as a Eurodollar Advance until the end of the then
applicable Interest
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Period therefor, at which time such Eurodollar Advance shall be automatically
converted into an Alternate Base Rate Advance unless the Borrower shall have
given the Agent a Conversion/Continuation Notice requesting that, at the end
of such Interest Period, such Eurodollar Advance either continue as a
Eurodollar Advance for the same or another Interest Period or be converted
into an Advance of another Type (other than a Swingline Advance). Swingline
Advances may be repaid out of new Advances hereunder but may not be converted
to a different Type of Advance. The Borrower may elect from time to time to
convert all or any part of an Advance of any Type (other than a Swingline
Advance) into any other Type or Types of Advances (other than a Swingline
Advance); provided that any conversion of any Eurodollar Advance shall be
made on, and only on, the last day of the Interest Period applicable thereto.
The Borrower shall give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of an Alternate Base
Rate Advance or Fed Funds Advance or conversion or continuation of a
Eurodollar Advance not later than (i) 11:00 a.m. (Chicago time) on the date
of the requested conversion, in the case of a conversion into an Alternate
Base Rate Advance or Fed Funds Advance or (ii) 11:00 a.m. (Chicago time) at
least three Business Days prior to the date of the requested conversion into
or continuation of a Eurodollar Advance, specifying:
(i) the requested date which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount (which meets the minimums set forth in
Section 2.8(b)) and Type of the Advance which is to be converted
or continued, and
(iii) the amount and Type(s) of Advance(s) into which such Advance is to
be converted or continued and, in the case of a conversion into or
continuation of a Eurodollar Advance, the duration of the Interest
Period applicable thereto.
2.10. REDUCTIONS TO AGGREGATE COMMITMENT. The Borrower may from time
to time permanently reduce the Aggregate Commitment in whole, or in part
ratably among the Lenders in integral multiples of $10,000,000, upon at least
ten (10) Business Days' written notice to the Agent, which notice shall
specify the amount of any such reduction. On or before the effective date of
any such reduction, the Borrower shall, if necessary, repay sufficient Loans
to prevent the remaining outstanding Loans hereunder, after giving effect to
such permanent reduction, from exceeding the Lending Sublimits. Upon any
reduction of the Aggregate Commitment, upon the election of the Swingline
Lender, the reduction in such Lender's Commitment may be allocated either
solely to such Lender's Primary Commitment or in part to its Primary
Commitment and in part to its Swingline Commitment on a pro rata basis.
2.11. PRINCIPAL PAYMENTS.
2.11.1. OPTIONAL PRINCIPAL PAYMENTS. The Borrower or any
Borrowing Subsidiary may from time to time pay, without penalty or premium,
all outstanding Alternate Base Rate Advances or, in integral multiples of
$100,000, any portion of the outstanding Alternate Base Rate Advances, upon
prior written notice to the Agent. The Borrower or any Borrowing Subsidiary
may from time to time pay, subject to the payment of any funding
indemnification amounts required by Section 3.4 but without penalty or
premium, all outstanding Eurodollar Advances or, in integral multiples of
$100,000, any portion of the outstanding Eurodollar Advances, upon three
Business Days' prior written notice to the Agent. Fed Funds Advances and
Swingline Advances may be paid on any Business Day provided that the Borrower
or any Borrowing Subsidiary has given the Agent written notice of such
repayment on the date of such intended payment by (i) 11:00 a.m. (Chicago
time) for Fed Funds Advances and (ii) 4:00 p.m. (Chicago time) for
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Swingline Advances. All optional principal payments shall be applied to the
Type of Advance designated by the Borrower or any Borrowing Subsidiary when
making such payment, provided that any payments received during the
continuance of a Default and after the provisions of Section 2.6 have been
invoked and are in continued effect shall be applied on a pro rata basis to
all Advances then outstanding. Payments so allocated to an Advance shall be
distributed to the Lenders holding the Loans comprising such Advance on a pro
rata basis in accordance with the respective unpaid principal balances of
such Loans.
2.11.2. REQUIRED PAYMENTS RELATED TO BORROWING BASE. On any
date that the Coverage Requirement is in excess of the then-current Borrowing
Base, the Borrower shall, prior to the close of business on such date, either
deliver sufficient Eligible Collateral to eliminate such excess and/or make a
mandatory payment to the Agent for the benefit of the Lenders in the amount
of such excess. Any such payment shall be allocated as directed by the
Borrower unless a Default then exists and Section 2.6 has been invoked in
which case such payment shall be allocated in accordance with the Lenders'
respective outstanding Loans and in conjunction with the procedures described
in Section 2.6, with such payments applied first to accrued interest and
thereafter to principal.
2.11.3. SETTLEMENT ACCOUNT PAYMENTS. Upon the sale of any
Pledged Item (or repayment of any principal of any HELOC Loan constituting a
Pledged Item (a "Pledged HELOC Loan")), the Borrower shall give the Agent
documentation identifying the Pledged Item sold (or the Pledged HELOC Loan
being fully or partially repaid), the purchaser thereof and the related net
sales proceeds (or net principal repayment on a Pledged HELOC Loan) in a
manner sufficient to allow the Agent to match each Settlement Account deposit
("Sale Deposit") with the applicable Pledged Item sold (or HELOC Loan
repaid). Prior to the occurrence of a Default, upon the Agent's receipt of
the documentation described in the preceding sentence with respect to any
Pledged Item and the receipt of the related Sale Deposit in the Settlement
Account, an amount equal to the lesser of such Sale Deposit and the
Collateral Value of the related Pledged Item shall be applied to then
outstanding Loans in the order and in the amounts directed by Borrower or,
absent such direction, in the following order: (i) first, to Swingline Loans
(other than those constituting Post-Default Swingline Advances) until paid in
full, (ii) second, to Fed Funds Loans until paid in full, (iii) third, to
Alternate Base Rate Loans until paid in full, (iv) fourth, to Eurodollar
Loans (and with respect to Eurodollar Loans only, to interest thereon) until
paid in full, and (v) fifth, to Post-Default Swingline Advances until paid in
full. With respect to Eurodollar Loans, such amounts (1) shall be applied to
such Loans in the order in which their Interest Periods expire (i.e. the
Eurodollar Loans first maturing shall be the first repaid), and (2) shall be
applied to interest on Loans which have been repaid before being applied to
principal of Loans having a different Interest Period. The applications
described in the preceding sentence shall occur on the Business Day on which
the Sale Deposit is received in the Settlement Account if both the Sale
Deposit and the related required documentation are received by noon (Chicago
time) and shall occur on the next succeeding Business Day after both have
been received if either the Sale Deposit or the documentation is received
after noon. Prior to the occurrence of a Default, the Borrower may withdraw
or otherwise direct the application of any portion of the Sale Deposit for a
particular Pledged Item which remains in the Settlement Account after the
applications described above so long as (after accounting for any such
withdrawal or application) the Borrowing Base exceeds the Coverage
Requirement. Any such disbursement shall be made within one Business Day
after the later of Borrower's request or Agent's receipt of the applicable
Sale Deposit. During the continuance of a Default, any amounts held or
deposited in the Settlement Account may be withdrawn by the Agent and shall
be applied to the Obligations in accordance with Section 8.8.
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2.11.4. FINAL PAYMENT ON TERMINATION DATE. Any outstanding
Advances and all other unpaid Obligations, unless required to be paid earlier
pursuant to the terms hereof, shall be paid in full by the Borrower on the
Termination Date.
2.12. CHANGES IN INTEREST RATE, ETC. Each Alternate Base Rate
Advance shall bear interest on the outstanding principal amount thereof, for
each day from and including the date such Advance is made or is converted
from another Type of Advance into an Alternate Base Rate Advance pursuant to
Section 2.9 to but excluding the date it is paid or is converted into another
Type of Advance pursuant to Section 2.9 hereof, at a rate per annum equal to
the Alternate Base Rate for such day. Changes in the rate of interest on
that portion of any Advance maintained as an Alternate Base Rate Advance will
take effect simultaneously with each change in the Alternate Base Rate. The
interest rate on each Swingline Advance or Fed Funds Advance shall be
recalculated daily for each day that such Swingline Advance or Fed Funds
Advance is continued under Section 2.9. Each Eurodollar Advance shall bear
interest on the outstanding principal amount thereof from and including the
first day of the Interest Period applicable thereto to (but not including)
the last day of such Interest Period at the interest rate determined as
applicable to such Eurodollar Advance. No more than seven (7) Interest
Periods may be in effect at one time, and no Interest Period may end after
the Termination Date.
2.13. RATES APPLICABLE AFTER DEFAULT. Notwithstanding anything to
the contrary contained in Section 2.8 or 2.9, during the continuance of a
Default or Unmatured Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 9.1 requiring
unanimous consent of the Lenders to reductions in interest rates), declare
that no Advance may be made as, converted into or continued as a Fixed Rate
Advance. During the continuance of a Default the Required Lenders may, at
their option, by notice to the Borrower (which notice may be revoked at the
option of the Required Lenders notwithstanding any provision of Section 9.1
requiring unanimous consent of the Lenders to reductions in interest rates),
declare that (i) each Eurodollar Advance (unless such Advances have been
reallocated pursuant to Section 2.6) shall bear interest for the remainder of
the applicable Interest Period at the rate otherwise applicable to such
Interest Period plus 2% per annum and (ii) each Advance (other than those
under clause (i) above) shall bear interest at a rate per annum equal to the
Alternate Base Rate plus 2% per annum; provided that, during the continuance
of a Default under Section 7.6 or 7.7, the interest rates set forth in
clauses (i) and (ii) above shall be applicable to all Advances without any
election or action on the part of the Agent or any Lender.
2.14. METHOD OF PAYMENT. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, on the date when due by (i) noon
(Chicago time) with respect to all Advances other than Swingline Advances,
and (ii) 4:00 p.m. (Chicago time) with respect to Swingline Advances, and all
such payments shall be applied in accordance with Section 2.11.1.
Notwithstanding the foregoing, if the Borrower fails to give the Agent notice
of repayment of a Fed Funds Advance before 11:00 a.m. (Chicago time) on the
Business Day that the Borrower or any Borrowing Subsidiary intends to repay
such Fed Funds Advance, any payment of such Fed Funds Advance received by the
Agent on such Business Day shall be deemed to have been received by the Agent
at the opening of business on the following Business Day. Each payment
delivered to the Agent for the account of any Lender shall be delivered
promptly by the Agent to such Lender in the same type of funds that the Agent
received at its address specified pursuant to Article XIII or at any Lending
Installation specified in a notice received by the Agent from such Lender.
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The Agent is hereby authorized to charge the account of the Borrower and any
Borrowing Subsidiary maintained with First Chicago for each payment of
principal, interest and fees as it becomes due hereunder (and such charges
shall be reflected in the Borrower's monthly account statement).
2.15. NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS. (i) Each Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower and the Borrowing Subsidiaries to
such Lender resulting from each Loan made by such Lender from time to time,
including the amounts of principal and interest payable and paid to such
Lender from time to time hereunder.
(ii) The Agent shall also maintain accounts in which it will record
(a) the amount of each Loan made hereunder, the Type thereof and the Interest
Period with respect thereto, (b) the amount of any principal or interest due
and payable or to become due and payable from the Borrower or any Borrowing
Subsidiary to each Lender hereunder and (c) the amount of any sum received by
the Agent hereunder from the Borrower or any Borrowing Subsidiary and each
Lender's share thereof.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall, absent manifest error, be PRIMA FACIE
evidence of the existence and amounts of the Obligations therein recorded;
PROVIDED, HOWEVER, that the failure of the Agent or any Lender to maintain
such accounts or any error therein shall not in any manner affect the
obligations of the Borrower or the Borrowing Subsidiaries to repay the
Obligations in accordance with their terms. In the event of a conflict
between the accounts maintained pursuant to paragraphs (i) and (ii) above,
the entries made in the account maintained pursuant to paragraph (ii) shall,
absent manifest error, be conclusive.
(iv) Any Lender may request that its Loans be evidenced by a Note.
In such event, the Borrower and the Borrowing Subsidiaries shall prepare,
execute and deliver to such Lender a Note payable to the order of such
Lender. Thereafter, the Loans evidenced by such Note and interest thereon
shall at all times (including after any assignment pursuant to Section 12.3)
be represented by one or more Notes payable to the order of the payee named
therein or any assignee pursuant to Section 12.3, except to the extent that
any such Lender or assignee subsequently returns any such Note for
cancellation and requests that such Loans once again be evidenced as
described in paragraphs (i) and (ii) above.
2.16. TELEPHONIC NOTICES. The Borrower and each Borrowing Subsidiary
hereby authorize the Lenders and the Agent to extend, convert or continue
Advances, to effect selections of Types of Advances and to transfer funds
based on telephonic notices made by any person or persons the Agent or any
Lender in good faith believes to be acting on behalf of the Borrower, it
being understood that the foregoing authorization is specifically intended to
allow Borrowing Notices and Conversion/Continuation Notices to be given
telephonically. The Borrower agrees to deliver promptly to the Agent a
written confirmation, if such confirmation is requested by the Agent or any
Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall
govern absent manifest error.
2.17. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS. Interest
accrued on each Advance other than a Eurodollar Advance shall be payable on
each Payment Date, commencing with the first such date to occur after the
date hereof and at maturity. Interest accrued on each Eurodollar Advance
shall be payable on the last day of its applicable Interest Period, on any
date on which such Eurodollar Advance is prepaid, whether by acceleration or
otherwise, and at maturity. Interest and Fees shall be calculated for
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actual days elapsed on the basis of a 360-day year. Interest shall be
payable for the day an Advance is made but not for the day of any payment on
the amount paid if payment is received at the place of payment prior to the
time required for payment as set forth in Section 2.14. If any payment of
principal of or interest on an Advance shall become due on a day which is not
a Business Day, such payment shall be made on the next succeeding Business
Day and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
2.18. NOTIFICATION BY THE AGENT. Promptly after receipt thereof, the
Agent will notify each Lender of the contents of each Aggregate Commitment
reduction notice, Borrowing Notice, Conversion/Continuation Notice, and
repayment notice received by it hereunder. Promptly upon determination
thereof, the Agent will notify each Lender and the Borrower of the interest
rate applicable to each Eurodollar Advance. When any Fed Funds Advances or
Alternate Base Rate Advances are outstanding or have been requested, the
Agent will give each Lender and the Borrower prompt notice of each change in
such rates.
2.19. LENDING INSTALLATIONS. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to
any such Lending Installation and the Loans and any Notes shall be deemed
held by each Lender for the benefit of such Lending Installation. Each
Lender may, by written notice to the Agent and the Borrower in accordance
with Article XIII, designate replacement or additional Lending Installations
through which Loans will be made by it and for whose account Loan payments
are to be made.
2.20. NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Borrower or any
Borrowing Subsidiary or a Lender, as the case may be, notifies the Agent
prior to the date on which it is scheduled to make payment to the Agent of
(i) in the case of a Lender, the proceeds of a Loan or Advance or (ii) in the
case of the Borrower or any Borrowing Subsidiary, a payment of principal,
interest or Fees to the Agent for the account of the Lenders, that it does
not intend to make such payment, the Agent may assume that such payment has
been made. The Agent may, but shall not be obligated to, make the amount of
such payment available to the intended recipient in reliance upon such
assumption. If such Lender or the Borrower or any Borrowing Subsidiary, as
the case may be, has not in fact made such payment to the Agent, the
recipient of such payment shall, on demand by the Agent, repay to the Agent
the amount so made available together with interest thereon in respect of
each day during the period commencing on the date such amount was so made
available by the Agent until the date the Agent recovers such amount at a
rate per annum equal to (i) in the case of payment due from a Lender, the
Federal Funds Effective Rate for such day for the first three days and,
thereafter, at the interest rate applicable to the relevant Loan, or (ii) in
the case of payment due from the Borrower or any Borrowing Subsidiary, the
interest rate applicable to the relevant Loan.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1. YIELD PROTECTION. If, on or after the date of this Agreement,
the adoption of or any change in any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether
or not having the force of law), or any change in the interpretation or
administration thereof by any governmental or quasi-governmental authority,
central bank or comparable agency charged with the
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interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(i) subjects any Lender or any applicable Lending Installation to any
Taxes or changes the basis of taxation of payments (other than
with respect to Excluded Taxes) to any Lender in respect of its
Fixed Rate Loans, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended
by, any Lender or any applicable Lending Installation (other than
reserves and assessments taken into account in determining the
interest rate applicable to Fixed Rate Advances), or
(iii) imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation of
making, funding or maintaining its Fixed Rate Loans or to reduce
any amount receivable by any Lender or any applicable Lending
Installation in connection with its Fixed Rate Loans, or requires
any Lender or any applicable Lending Installation to make any
payment calculated by reference to the amount of its Fixed Rate
Loans held or interest received by it, by an amount deemed
material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender
or applicable Lending Installation of making or maintaining its Fixed Rate
Loans or Commitment or to reduce the return received by such Lender or
applicable Lending Installation in connection with such Fixed Rate Loans or
Commitment, then, within 15 days of demand by such Lender, the Borrower shall
pay such Lender such additional amount or amounts as will compensate such
Lender for such increased cost or reduction in an amount received.
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender
determines the amount of capital required or expected to be maintained by
such Lender, any Lending Installation of such Lender or any corporation
controlling such Lender is increased as a result of a Change, then, within 15
days of demand by such Lender, the Borrower shall pay such Lender the amount
necessary to compensate for any shortfall in the rate of return on the
portion of such increased capital which such Lender determines is
attributable to this Agreement, its Loans or its obligation to make Loans
hereunder (after taking into account such Lender's policies as to capital
adequacy). "Change" means (i) any change after the date of this Agreement in
the Risk-Based Capital Guidelines or (ii) any adoption of or change in any
other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of
law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or any Lending
Installation or any corporation controlling any Lender. "Risk-Based Capital
Guidelines" means (i) the risk-based capital guidelines in effect in the
United States on the date of this Agreement, including transition rules, and
(ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of
the Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted
prior to the date of this Agreement.
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3.3. AVAILABILITY OF TYPES OF ADVANCES. If any Lender determines
that maintenance of its Fixed Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation, or directive, whether or
not having the force of law, or if the Required Lenders determine that (i)
deposits of a type and maturity appropriate to match fund Fixed Rate Advances
or Fed Funds Advances are not available or (ii) the interest rate applicable
to a Type of Advance does not accurately reflect the cost of making or
maintaining such Advance, then the Agent shall suspend the availability of
the affected Type of Advance and require any Advances of the affected Type to
be repaid or converted to Alternate Base Rate Advances, subject to the
payment of any funding indemnification amounts required by Section 3.4.
3.4. FUNDING INDEMNIFICATION. If any payment or conversion of a
Fixed Rate Advance occurs on a date which is not the last day of the
applicable Interest Period, whether because of acceleration, prepayment
(including pursuant to Settlement Account applications pursuant to Section
2.11.3) or otherwise, or a Fixed Rate Advance is not made, continued or
converted on the date specified by the Borrower for any reason other than
default by the Lenders, the Borrower will indemnify each Lender for any loss
or cost incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain such Fixed Rate Advance.
3.5. TAXES. (i) All payments by the Borrower or any Borrowing
Subsidiary to or for the account of any Lender or the Agent hereunder or
under any Note shall be made free and clear of and without deduction for any
and all Taxes. If the Borrower or any Borrowing Subsidiary shall be required
by law to deduct any Taxes from or in respect of any sum payable hereunder to
any Lender or the Agent, (a) the sum payable shall be increased as necessary
so that after making all required deductions (including deductions applicable
to additional sums payable under this Section 3.5) such Lender or the Agent
(as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (b) the Borrower or applicable
Borrowing Subsidiary shall make such deductions, (c) the Borrower or
applicable Borrowing Subsidiary shall pay the full amount deducted to the
relevant authority in accordance with applicable law and (d) the Borrower or
applicable Borrowing Subsidiary shall furnish to the Agent the original copy
of a receipt evidencing payment thereof within 30 days after such payment is
made.
(ii) In addition, the Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies (other than Excluded Taxes) which arise from any
payment made hereunder or under any Note or from the execution or delivery
of, or otherwise with respect to, this Agreement or any Note ("Other Taxes").
(iii) The Borrower hereby agrees to indemnify the Agent and each
Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 3.5) paid by the Agent or such Lender and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
Payments due under this indemnification shall be made within 30 days of the
date the Agent or such Lender makes demand therefor pursuant to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof (each a "Non-U.S. Lender") agrees
that it will, not less than ten Business Days after the date of this
Agreement, (i) deliver to each of the Borrower and the Agent two duly
completed copies of United States Internal Revenue Service Form 1001 or 4224,
certifying in either case that such Lender is entitled to receive payments
under this Agreement without deduction or withholding of any United States
federal
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income taxes, and (ii) deliver to each of the Borrower and the Agent a United
States Internal Revenue Service Form W-8 or W-9, as the case may be, and
certify that it is entitled to an exemption from United States backup
withholding tax. Each Non-U.S. Lender further undertakes to deliver to each
of the Borrower and the Agent (x) renewals or additional copies of such form
(or any successor form) on or before the date that such form expires or
becomes obsolete, and (y) after the occurrence of any event requiring a
change in the most recent forms so delivered by it, such additional forms or
amendments thereto as may be reasonably requested by the Borrower or the
Agent. All forms or amendments described in the preceding sentence shall
certify that such Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes,
UNLESS an event (including without limitation any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which
would prevent such Lender from duly completing and delivering any such form
or amendment with respect to it and such Lender advises the Borrower and the
Agent that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to
provide the Borrower with an appropriate form pursuant to clause (iv), above
(unless such failure is due to a change in treaty, law or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, occurring subsequent to the date on which a form originally was
required to be provided), such Non-U.S. Lender shall not be entitled to
indemnification under this Section 3.5 with respect to Taxes imposed by the
United States; PROVIDED that, should a Non-U.S. Lender which is otherwise
exempt from or subject to a reduced rate of withholding tax become subject to
Taxes because of its failure to deliver a form required under clause (iv),
above, the Borrower shall take such steps as such Non-U.S. Lender shall
reasonably request to assist such Non-U.S. Lender to recover such Taxes.
(vi) Any Non-U.S. Lender that is entitled to an exemption from or
reduction of withholding tax with respect to payments under this Agreement or
any Note pursuant to the law of any relevant jurisdiction or any treaty shall
deliver to the Borrower (with a copy to the Agent), at the time or times
prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political
subdivision thereof asserts a claim that the Agent did not properly withhold
tax from amounts paid to or for the account of any Non-U.S. Lender (because
the appropriate form was not delivered or properly completed, because such
Lender failed to notify the Agent of a change in circumstances which rendered
its exemption from withholding ineffective, or for any other reason), such
Lender shall indemnify the Agent fully for all amounts paid, directly or
indirectly, by the Agent as tax, withholding therefor, or otherwise,
including penalties and interest, and including taxes imposed by any
jurisdiction on amounts payable to the Agent under this subsection, together
with all costs and expenses related thereto (including attorneys fees and
time charges of attorneys for the Agent, which attorneys may be employees of
the Agent). The obligations of the Lenders under this Section 3.5(vii) shall
survive the payment of the Obligations and termination of this Agreement.
3.6. LENDER STATEMENTS; SURVIVAL OF INDEMNITY. If, with respect to
any Lender, circumstances arise which would result in an increase in the
liability of the Borrower to such Lender under Sections 3.1, 3.2 or 3.5 or
would result in the unavailability of a Type of Advance under Section 3.3,
then such Lender shall notify the Agent thereof and such Lender shall, in
consultation with the Agent and the Borrower and
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to the extent it can do so without materially disadvantaging itself, take
such reasonable steps as may reasonably be open to such Lender to mitigate
the effects of such circumstances (including designating an alternate Lending
Installation with respect to its Fixed Rate Loans). If and so long as a
Lender has been unable to take, or has not taken, steps reasonably acceptable
to the Borrower to mitigate the effect of such circumstances, then (so long
as no Default is continuing) at the Borrower's request such Lender shall
assign all of its rights and obligations hereunder to another Person
nominated by the Borrower with the approval of the Agent and willing to
participate in this facility in place of such Lender; provided that such
Person satisfies all of the requirements of this Agreement including, but not
limited to, providing the forms required by Sections 3.5(iv) and 12.3. The
Borrower shall pay the assignment fee due to the Agent under Section 12.3.2
in the event of any assignment made at the Borrower's request pursuant to the
terms of this Section. Notwithstanding any such assignment, the obligations
of the Borrower under Sections 3.1, 3.2, 3.5 and 9.7 shall survive any such
assignment and shall be enforceable by such assigning Lender. Each Lender
shall deliver a written statement of such Lender to the Borrower (with a copy
to the Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or
3.5. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and shall be
final, conclusive and binding on the Borrower in the absence of manifest
error. Determination of amounts payable under such Sections in connection
with a Fixed Rate Loan shall be calculated as though each Lender funded its
Fixed Rate Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the
Eurodollar Rate applicable to such Loan, whether in fact that is the case or
not. Unless otherwise provided herein, the amount specified in the written
statement of any Lender shall be payable within 15 days of demand after
receipt by the Borrower of such written statement. The obligations of the
Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the
Obligations and termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. EFFECTIVENESS. This Agreement shall not be effective and no
Lender shall be required to make the initial Advance hereunder until a date
(the "Effective Date") upon which the Borrower has furnished or caused to be
furnished to the Agent (with sufficient copies for the Lenders) the following:
(i) Copies of the articles of incorporation or articles of
organization, as applicable, of the Borrower and each Borrowing
Subsidiary, together with all amendments, and a certificate of
good standing or analogous certificate of status in its State of
formation and (if different from its State of formation) in the
State in which its principal place of business is located, each
certified by the appropriate governmental officer.
(ii) Copies, certified by the Secretary or Assistant Secretary of the
Borrower and each Borrowing Subsidiary, of its by-laws or
operating agreement and of its Board of Directors' or Members'
resolutions (and resolutions of other bodies, if any are deemed
necessary by counsel for any Lender) authorizing the execution,
delivery and performance of the Loan Documents.
(iii) An incumbency certificate, executed by the Secretary or Assistant
Secretary of the Borrower and each Borrowing Subsidiary, which
shall identify by name and title and bear
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the signature of the officers of the Borrower and each
Borrowing Subsidiary authorized to sign the Loan Documents and
to make borrowings hereunder, upon which certificate the Agent
and the Lenders shall be entitled to rely until informed of any
change in writing by the Borrower.
(iv) A certificate, signed by the chief financial officer or controller
of the Borrower, (x) stating that on the initial Borrowing Date no
Default or Unmatured Default has occurred and is continuing, and
(y) showing the calculations necessary to determine that all of
the financial covenants set forth in this Agreement were satisfied
as of January 1, 1999 and as of February 28, 1999.
(v) Written opinions of the Borrower's in-house and outside counsel,
addressed to the Agent and the Lenders in substantially the form
of Exhibits "B-1" and "B-2" hereto.
(vi) Any Notes requested by a Lender pursuant to Section 2.15 payable
to the order of each such requesting Lender.
(vii) A fully executed Security Agreement, together with such executed
UCC-1 financing statements as the Agent may reasonably request.
(viii) Written money transfer instructions, in substantially the form of
Exhibit "J" hereto, addressed to the Agent and signed by an
Authorized Officer, together with such other related money
transfer authorizations as the Agent may have reasonably
requested.
(ix) Payment of all Fees due and payable on or before the Effective
Date.
(x) Establishment of the Settlement Account.
(xi) Information satisfactory to the Agent regarding the Borrower's
Year 2000 Program.
(xii) Such other documents as any Lender or its counsel may have
reasonably requested in writing.
4.2. EACH ADVANCE. The Lenders shall not be required to make any
Advance (other than an Advance that, after giving effect thereto and to the
application of the proceeds thereof, does not increase the aggregate amount of
outstanding Advances), unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V and in
the other Loan Documents are true and correct as of such Borrowing
Date except to the extent any such representation or warranty is
stated to relate solely to an earlier date, in which case such
representation or warranty shall be true and correct on and as of
such earlier date.
(iii) All legal matters incident to the making of such Advance shall be
satisfactory to the Lenders and their counsel.
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Each Borrowing Notice with respect to each Advance shall constitute a
representation and warranty by the Borrower and each Borrowing Subsidiary
that, after giving effect to the amount of the Advance being requested, (a)
the conditions contained in Sections 4.2(i) and (ii) have been satisfied, (b)
the then current Borrowing Base is equal to or greater than the Coverage
Requirement, (c) any principal amount of any HELOC Loan which has repaid
since the Pledge Date thereof has been deducted in calculating the
then-current Borrowing Base, and (d) no Lending Sublimit has been exceeded.
Any Lender may, if such Lender reasonably suspects that a Default or
Unmatured Default may exist or would exist upon the funding of any requested
Advance, require a duly completed compliance certificate in substantially the
form of Exhibit "E" hereto as a condition to making an Advance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower and each Borrowing Subsidiary represents and warrants to
the Lenders that:
5.1. EXISTENCE AND STANDING. Each of the Borrower and each of its
Subsidiaries is a corporation duly incorporated (or a limited liability
company duly organized, as applicable), validly existing and in good standing
under the laws of its jurisdiction of formation and has all requisite
authority to own or lease its Property and to conduct its business in each
jurisdiction in which its business is conducted if failure to have such
authority could reasonably be expected to result in a Material Adverse Effect.
5.2. AUTHORIZATION AND VALIDITY. Each of the Borrower and each
Borrowing Subsidiary has the power and authority and legal right to execute
and deliver the Loan Documents to which it is a party, to consummate the
transactions therein contemplated and to perform its obligations thereunder.
The execution and delivery by the Borrower and each Borrowing Subsidiary of
the Loan Documents to which it is a party, the consummation of the
transactions therein contemplated and the performance of its obligations
thereunder have been duly authorized by proper proceedings, and the Loan
Documents constitute legal, valid and binding obligations of the Borrower and
each Borrowing Subsidiary enforceable against the Borrower and each Borrowing
Subsidiary in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally.
5.3. NO CONFLICT; GOVERNMENT CONSENT. Neither the execution and
delivery by the Borrower and the Borrowing Subsidiaries of the Loan
Documents, nor the consummation of the transactions therein contemplated, nor
compliance with the provisions thereof will violate any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on the
Borrower or any of its Subsidiaries or the Borrower's or any Subsidiary's
organizational documents or any material provision of any indenture,
instrument or agreement to which the Borrower or any of its Subsidiaries is a
party or is subject, or by which it, or its Property, is bound, or conflict
with or constitute a default thereunder, or result in the creation or
imposition of any Lien in, of or on any of the Property of the Borrower or a
Subsidiary pursuant to the terms of any such indenture, instrument or
agreement. No order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, or
other action in respect of any governmental or public body or authority, or
any subdivision thereof, is required to authorize, or is required in
connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, or the consummation of the
transactions contemplated in, any of the Loan Documents (other than filings
to perfect the Liens granted pursuant to the Security Agreement).
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5.4. FINANCIAL STATEMENTS. The December 31, 1997 and the December
31, 1998 consolidated financial statements of the Borrower and its
Subsidiaries heretofore delivered to the Lenders were prepared in accordance
with GAAP in effect on the date such statements were prepared and fairly
present the consolidated financial condition and operations of the Borrower
and its Subsidiaries at such date and the consolidated results of their
operations for the period then ended.
5.5. MATERIAL ADVERSE CHANGE. Since December 31, 1998, there has
been no change in the business, financial condition or results of operations
of the Borrower and its Subsidiaries which could have a Material Adverse
Effect.
5.6. TAXES. The Borrower and its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any of its Subsidiaries, except such
taxes, if any, as are being contested in good faith by appropriate
proceedings and as to which adequate reserves have been provided in
accordance with Agreement Accounting Principles and as to which no Lien
exists. No tax liens have been filed and no claims are being asserted with
respect to any such taxes. The charges, accruals and reserves on the books of
the Borrower and its Subsidiaries in respect of any taxes or other
governmental charges are adequate in accordance with GAAP. If the Borrower
or any of its Subsidiaries is a limited liability company, each such limited
liability company qualifies for partnership tax treatment under United States
federal tax law.
5.7. LITIGATION AND CONTINGENT OBLIGATIONS. Except as set forth on
Schedule "5" hereto, there is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or, to the knowledge of any of
their officers, threatened against or affecting the Borrower or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect or which seeks to prevent, enjoin or delay the making of the Loans or
Advances. Other than any liability incident to such litigation, arbitration
or proceedings, the Borrower has no material contingent obligations not
provided for or disclosed in the financial statements referred to in Section
5.4.
5.8. SUBSIDIARIES. Schedule "3" hereto contains an accurate list of
all Subsidiaries of the Borrower as of the date of this Agreement, setting
forth their respective jurisdictions of organization and the percentage of
their respective capital stock or other ownership interests owned by the
Borrower or other Subsidiaries. All of the issued and outstanding shares of
capital stock or other ownership interests of such Subsidiaries have been (to
the extent such concepts are relevant with respect to such ownership
interests) duly authorized and issued and are fully paid and non-assessable.
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans
do not in the aggregate exceed $500,000. Neither the Borrower nor any other
member of the Controlled Group has incurred, or is reasonably expected to
incur, any withdrawal liability to Multiemployer Plans. Each Plan complies
in all material respects with all applicable requirements of law and
regulations, no Reportable Event has occurred with respect to any Plan,
neither the Borrower nor any other member of the Controlled Group has
withdrawn from any Plan or initiated steps to do so, and no steps have been
taken to reorganize or terminate any Plan.
5.10. ACCURACY OF INFORMATION. No information, exhibit or report
furnished by the Borrower or any of its Subsidiaries to the Agent or to any
Lender in connection with the negotiation of, or compliance with, or pursuant
to, the Loan Documents contained any material misstatement of fact or
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omitted to state a material fact or any fact necessary to make the statements
contained therein not misleading.
5.11. REGULATION U. Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder.
5.12. MATERIAL AGREEMENTS. Neither the Borrower nor any Subsidiary
is a party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in (i) any agreement to which it is a party, which
default could have a Material Adverse Effect, or (ii) any agreement or
instrument evidencing or governing Indebtedness in excess of $500,000.
5.13. COMPLIANCE WITH LAWS. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property to the extent
failure to so comply could reasonably be expected to have a Material Adverse
Effect.
5.14. OWNERSHIP OF PROPERTIES. Except as set forth on Schedule "4"
hereto, on the date of this Agreement, the Borrower and its Subsidiaries will
have good title, free of all Liens other than those permitted by Section
6.13, to all of the Property and assets reflected in the financial statements
provided to the Agent and the Lenders as owned by the Borrower and its
Subsidiaries.
5.15. PLAN ASSETS; PROHIBITED TRANSACTIONS. The Borrower is not an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R. Section
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of
Section 4975 of the Code); and neither the execution of this Agreement nor
the making of Loans hereunder gives rise to a prohibited transaction within
the meaning of Section 406 of ERISA or Section 4975 of the Code.
5.16. INVESTMENT COMPANY ACT. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of
1940, as amended.
5.17. PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower nor
any Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
5.18. GNMA, FHA, VA, FNMA, AND FHLMC ELIGIBILITY. Each of the
Borrower and each Borrowing Subsidiary is: (i) an FHA-Approved Mortgagee in
good standing, a VA-Approved Lender, a FHLMC-Approved Lender and a
FNMA-Approved Lender and meets all eligible requirements of law and
governmental regulation so as to be eligible to originate, purchase, hold and
service Mortgage Loans insured by FHA or supporting any Security; (ii) an
approved seller and servicer in good standing of Mortgage Loans to each
Federal Agency; and (iii) an approved issuer and servicer in good standing of
Securities for FHLMC, FNMA and GNMA and meets all FHLMC, FNMA and GNMA
requirements,
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requirements of law and governmental regulations so as to be able to issue
Securities and to originate and service the Mortgage Loans that secure such
Securities.
5.19. YEAR 2000 COMPLIANCE. The Borrower has made a full and
complete assessment of the Year 2000 Issues and has a realistic and
achievable program for remediating the Year 2000 Issues on a timely basis
(the "Year 2000 Program"). Based on such assessment and on the Year 2000
Program the Borrower does not reasonably anticipate that Year 2000 Issues
will have a Material Adverse Effect.
5.20. SUBORDINATED INDEBTEDNESS. The Obligations constitute senior
indebtedness which is entitled to the benefits of the subordination
provisions of the Subordinated Indebtedness, including the subordination
provisions set forth in the applicable subordination agreements entered into
among the Agent, Pacific Guarantee Mortgage Corporation and the applicable
subordinated lenders.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. FINANCIAL REPORTING. The Borrower will maintain, for itself
and each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Lenders:
(i) Within 90 days after the close of each of its fiscal years, an
unqualified audit report certified by independent certified public
accountants, reasonably acceptable to the Required Lenders,
prepared in accordance with Agreement Accounting Principles on a
consolidated basis for itself and the Subsidiaries, including a
balance sheet as of the end of such period and related profit and
loss and changes in shareholders' equity statements, accompanied
by any management letter prepared by said accountants.
(ii) Within 30 days after the end of each month which is not the last
month of a fiscal quarter, and within 45 days after the close of
the first three quarterly periods of each of its fiscal years, for
itself and the Subsidiaries, consolidated and consolidating
unaudited balance sheets as at the close of each such period and
consolidated and consolidating profit and loss statements (showing
a breakout of servicing sales gains attributed to servicing
originated in prior periods), and a changes in shareholders'
equity statement for the period from the beginning of such fiscal
year to the end of such period, all certified (subject to normal
year-end adjustments) as to fairness of presentation by its chief
financial officer, controller or assistant controller.
(iii) Together with the financial statements required under Sections
6.1(i) and (ii), a compliance certificate in substantially the
form of Exhibit "E" hereto signed by its chief financial officer,
controller or assistant controller showing the calculations
necessary to determine compliance with this Agreement and that no
Default or Unmatured Default exists, or if any Default or
Unmatured Default exists, stating the nature and status thereof.
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(iv) As soon as available but in any event within twenty (20) days
after the end of each month, a certificate executed by the chief
financial officer or controller of the Borrower (or other
employees of the Borrower so authorized in writing, an original of
which authorization shall be delivered to the Agent, by the chief
financial officer or controller) setting forth the Leverage Ratio
as of last day of the preceding month, along with such supporting
documentation as the Agent may request relating to the calculation
of the Leverage Ratio.
(v) As soon as available but in any event within thirty (30) days
after the end of each month, a production report, a pipeline
report and a commitment report for such month reasonably
satisfactory to the Agent.
(vi) Within 45 days after the close of each quarterly period of each of
its fiscal years, for itself and the Subsidiaries, a statement of
cash flows for the period from the beginning of such fiscal year
to the end of such period, certified as to fairness of
presentation by its chief financial officer, controller or
assistant controller.
(vii) As soon as available and in any event within ten (10) days after
the end of each calendar month (and within three Business Days
after any request therefor by the Agent, which requests shall be
made only when the Agent reasonably determines such a delivery is
necessary), a Borrowing Base Certificate (which shall include the
Borrower's reconciliation of any discrepancies from the Collateral
Agent's reports on the status of Eligible Collateral at the end of
such month (or the end of the Business Day prior to the date of
the request, if requested by the Agent as set forth above)). An
authorized officer of each Borrowing Subsidiary shall certify as
to the accuracy of each Borrowing Base Certificate with respect to
Collateral reflected therein which is owned by such Borrowing
Subsidiary.
(viii) Within ten (10) Business Days of receipt thereof by the Borrower
or any of its Subsidiaries, copies of all compliance and audit
reports received from any of FNMA, FHLMC or GNMA; within five (5)
Business Days of submission thereof by the Borrower or any of its
Subsidiaries, copies of all responses to any requests from any of
FNMA, FHLMC or GNMA in connection with audit reports; and promptly
upon receipt, a copy of any notice from (i) any Federal Agency to
the effect that it is or is contemplating withdrawing its approval
of the Borrower or any of its Subsidiaries as a FHA-Approved
Mortgagee, FHLMC-Approved Lender, FNMA-Approved Lender or
VA-Approved Lender or as an approved seller and servicer for FNMA,
FHLMC or GNMA or (ii) any private mortgage insurer which insures
any of the Collateral to the effect that it is contemplating
withdrawing its approval of the Borrower or any of its
Subsidiaries as an approved originator of insured Mortgage Loans.
(ix) Within 270 days after the close of each fiscal year, a statement
of the Unfunded Liabilities of each Single Employer Plan,
certified as correct by an actuary enrolled under ERISA.
(x) Promptly, and in any event within 10 days after the Borrower knows
that any Reportable Event has occurred with respect to any Plan, a
statement, signed by the chief financial officer or controller of
the Borrower, describing said Reportable Event and the action
which the Borrower proposes to take with respect thereto.
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(xi) Promptly, and in any event within 10 days after receipt by the
Borrower, a copy of (a) any notice or claim to the effect that the
Borrower or any of its Subsidiaries is or may be liable to any
Person as a result of the release by the Borrower, any of its
Subsidiaries, or any other Person of any toxic or hazardous waste
or substance into the environment, and (b) any notice alleging any
violation of any federal, state or local environmental, health or
safety law or regulation by the Borrower or any of its
Subsidiaries, which, in either case, could have a Material Adverse
Effect.
(xii) Promptly, and in any event within 10 days after the furnishing
thereof to the shareholders of the Borrower, copies of all
financial statements, reports and proxy statements so furnished.
(xiii) Promptly, and in any event within 10 days after the filing
thereof, copies of all registration statements and annual,
quarterly, monthly or other regular reports which the Borrower or
any of its Subsidiaries files with the Securities and Exchange
Commission.
(xiv) On or before the first Business Day of each calendar month, the
weighted average purchase price for each type of Eligible
Collateral as of the last day of the preceding calendar month and
showing the basis for the calculation thereof in detail reasonably
satisfactory to the Agent.
(xv) Promptly, and in any event within 10 days after receipt of notice
by the Borrower, a description of any litigation, arbitration,
governmental investigation, proceeding or inquiry commenced
against or, to the knowledge of any of their officers, threatened
against or affecting the Borrower or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect or
which seeks to prevent, enjoin or delay the making of the Loans or
Advances.
(xvi) Such other information (including non-financial information) as
the Agent or any Lender may from time to time reasonably request.
6.2. USE OF PROCEEDS. The Borrower will, and will cause each
Subsidiary to, only use the proceeds of the Advances for the purposes
described in the recitals hereto, to pay interest, Fees, expenses and other
Obligations, to pay Indebtedness of the Borrower existing on the date hereof,
and to repay outstanding Advances. The Borrower will not, nor will it permit
any Subsidiary to, use any of the proceeds of the Advances to purchase or
carry any "margin stock" (as defined in Regulation U).
6.3. NOTICE OF DEFAULT. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of the occurrence
of any Default or Unmatured Default and of any other development, financial
or otherwise, (including, without limitation, developments with respect to
Year 2000 Issues), which could have a Material Adverse Effect, which notice
shall describe the actions being taken with respect thereto.
6.4. CONDUCT OF BUSINESS. The Borrower will, and will cause each
Material Subsidiary to, carry on and conduct its business in substantially
the same manner and in substantially the same fields of enterprise as it is
presently conducted (and related fields and such other fields as may be
permitted in connection with Investments permitted under Section 6.12) and to
do all things necessary to remain duly
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incorporated or organized, validly existing and (to the extent such concept
applies to such entity) in good standing as a domestic corporation,
partnership or limited liability company in its jurisdiction of incorporation
or organization, as the case may be, and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted.
The Borrower and each Borrowing Subsidiary will adhere in all material
respects to customary practices and standards in the industry insofar as
adherence to such practices and standards would require the Borrower and each
Borrowing Subsidiary to cause obligors whose indebtedness is secured by
Pledged Mortgages to comply with their obligations under such Pledged
Mortgages with respect to the real estate securing such indebtedness,
including without limitation, the payment of all taxes and insurance premiums
related thereto and maintenance of such real estate in compliance with all
laws.
6.5. TAXES. The Borrower will, and will cause each Subsidiary to,
timely file complete and correct United States federal and applicable
foreign, state and local tax returns required by law and pay when due all
taxes, assessments and governmental charges and levies upon it or its income,
profits or Property, except those which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves have been
set aside in accordance with Agreement Accounting Principles. At any time
that the Borrower or any of its Subsidiaries is organized as a limited
liability company, each such limited liability company will qualify for
partnership tax treatment under United States federal tax law.
6.6. INSURANCE. The Borrower will, and will cause each Subsidiary
to, maintain with financially sound and reputable insurance companies
insurance on all their Property in such amounts and covering such risks as is
consistent with sound business practice, and the Borrower will furnish to any
Lender upon request full information as to the insurance carried. The
Borrower will at all times, upon request of the Agent, furnish to the Agent
copies of its, and each of its Subsidiaries', current Mortgage Bankers
Blanket Bond and of its, and each of its Subsidiaries', insurance policies
containing errors and omissions coverage or mortgage impairment coverage, and
such Bonds and policies, to the extent possible, shall each provide that it
is not cancelable without thirty (30) days prior written notice to the Agent.
6.7. COMPLIANCE WITH LAWS. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject to the
extent non-compliance could reasonably be expected to result in a Material
Adverse Effect.
6.8. MAINTENANCE OF PROPERTIES. The Borrower will, and will cause
each Subsidiary to, do all things necessary to maintain, preserve, protect
and keep its Property in good repair, working order and condition, and make
all necessary and proper repairs, renewals and replacements so that its
business carried on in connection therewith may be properly conducted at all
times to the extent failure to do so could reasonably be expected to result
in a Material Adverse Effect.
6.9. INSPECTION. The Borrower will, and will cause each Subsidiary
to, permit the Agent, the Collateral Agent and the Lenders, by their
respective representatives and agents, to inspect any of the Property,
corporate books and financial records of the Borrower and each Subsidiary, to
examine and make copies of the books of accounts and other financial records
of the Borrower and each Subsidiary, and to discuss the affairs, finances and
accounts of the Borrower and each Subsidiary with, and to be advised as to
the same by, their respective officers upon reasonable prior notice at such
reasonable times and intervals as the Agent, the Collateral Agent or any
Lender may designate.
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6.10. MERGER. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other Person, except
that (i) a Subsidiary may merge into the Borrower or a Wholly-Owned
Subsidiary, and (ii) so long as such a merger does not result in a Change in
Control or otherwise violate any provision of this Agreement, the Borrower or
any Subsidiary may merge with another Person so long as the Borrower or the
applicable Subsidiary is the surviving entity.
6.11. SALE OF ASSETS. The Borrower will not sell any of its
interests in any of its Subsidiaries, and the Borrower will not, nor will it
permit any Subsidiary to, lease, sell or otherwise dispose of its Property,
to any other Person, except:
(i) Sales of Mortgage Loans and Securities in the ordinary course of
business.
(ii) Leases, sales or other dispositions of its Property that, together
with all other Property of the Borrower and its Subsidiaries
previously leased, sold or disposed of (other than Mortgage Loans
and Securities in the ordinary course of business) as permitted by
this Section during the twelve-month period ending with the month
in which any such lease, sale or other disposition occurs, do not
constitute a Substantial Portion of the Property of the Borrower
and its Subsidiaries.
6.12. INVESTMENTS AND ACQUISITIONS. The Borrower will not, nor will
it permit any Subsidiary to, make or suffer to exist any Investments
(including, without limitation, loans and advances to, and other Investments
in, Subsidiaries), or commitments therefor, or to create any Subsidiary or to
become or remain a partner in any partnership or joint venture, except:
(i) Cash Equivalent Investments.
(ii) Existing Investments in Subsidiaries and other Investments in
existence on the date hereof and described in Schedule "5" hereto.
(iii) Investments in the ordinary course of the Borrower's mortgage
banking business to purchase: (a) Mortgage Loans, collateralized
mortgage obligations and Securities (and in connection with
commitments to purchase the same); (b) servicing rights and
mortgage servicing contracts of another Person engaged in
mortgage-related businesses; and (c) real estate acquired by
foreclosure.
(iv) Investments in the ordinary course of the Borrower's mortgage
banking business to enter into Rate Hedging Agreements.
(v) Investments in the Borrowing Subsidiaries and in new Subsidiaries
in which the Borrower shall own at least 80% of the equity
interests and which are engaged primarily in the mortgage banking
business.
(vi) Other Investments in an aggregate amount (as to Borrower and all
Subsidiaries) not at any time exceeding ten percent (10%) of
Tangible Net Worth.
6.13. LIENS. The Borrower will not, nor will it permit any Material
Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the
Property of the Borrower or any of its Subsidiaries, except:
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(i) Liens for taxes, assessments or governmental charges or levies on
its Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings and for which adequate
reserves in accordance with generally accepted principles of
accounting shall have been set aside on its books.
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary
course of business which secure payment of obligations not more
than 60 days past due or which are being contested in good faith
by appropriate proceedings and for which adequate reserves shall
have been set aside on its books.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or
other social security or retirement benefits, or similar
legislation.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar
character and which do not in any material way affect the
marketability of the same or interfere with the use thereof in the
business of the Borrower or the Subsidiaries.
(v) Liens existing on the date hereof and described in Schedule "4"
hereto.
(vi) Liens in favor of the Agent and the Collateral Agent, for the
benefit of the Lenders, granted pursuant to the Security
Agreement.
(vii) Liens incidental to the conduct of the Borrower's or its
Subsidiaries' mortgage-related businesses or the ownership of
their property or arising out of transactions entered in the
ordinary course of their mortgage-related businesses which do not
secure Indebtedness and do not, in the aggregate, materially
detract from the value of their properties in the aggregate or
materially impair the use thereof in the ordinary course of their
businesses.
(viii) Subject to the requirements of Section 6.16, Liens on Mortgage
Loans and Securities owned by the Borrower or its Subsidiaries
(other than Mortgage Loans or Securities constituting Collateral)
to secure Indebtedness incurred from sources other than the
Lenders for the purpose of originating or purchasing such Mortgage
Loans or Securities.
(ix) Liens upon real and/or tangible personal property, which property
was acquired after December 31, 1998 (by purchase, construction or
otherwise) by the Borrower or its Subsidiaries, each of which
Liens either (A) existed on such property before the time of its
acquisition and was not created in anticipation thereof at the
request or direction of the Borrower, or (B) was created solely
for the purpose of securing debt representing, or incurred to
finance, refinance or refund, the cost (including the cost of
construction) of the respective property; PROVIDED, that no such
Lien shall extend to or cover any property of the Borrower or such
Subsidiary other than the respective property so acquired and
improvements thereon.
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(x) Liens of landlords, arising solely by operation of law and which
are not avoidable as a matter of law, on fixtures and moveable
property located on premises leased in the ordinary course of
business, PROVIDED, that the rental payments secured thereby are
not yet due.
(xi) Liens (not otherwise permitted hereunder) which secure obligations
not exceeding (as to the Borrower and all Subsidiaries) $1,000,000
in an aggregate principal amount at any one time outstanding.
6.14. AFFILIATES. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary than the Borrower or such Subsidiary would
obtain in a comparable arms-length transaction.
6.15. FINANCIAL COVENANTS.
6.15.1. LEVERAGE RATIO. The Borrower will not permit the
Leverage Ratio to exceed (i) 15.0 to 1.0 at any time prior to September
30, 1999, or (ii) 12.0 to 1.0 at any time thereafter.
6.15.2. NET WORTH. The Borrower will not, at any time, permit
Tangible Net Worth to be less than (i) $13,000,000, plus (ii) the sum of
the Applicable Equity Retention Amounts (as defined below) for each
Equity Infusion (as defined below), plus (iii) seventy-five percent (75%)
of the sum of the Borrower's positive net income (determined in
accordance with Agreement Accounting Principles) earned after December
31, 1998, less (iv) an amount equal to the dividends paid to the
Borrower's shareholders with respect to fiscal quarters ending after
December 31, 1998 solely for purposes of providing the Borrower's
shareholders with dividends in an amount sufficient to allow them to pay
their state and federal income taxes on all taxable income allocated to
them as shareholders of the Borrower for such periods, provided that
Borrower was a corporation qualifying under subchapter S of the Code at
the time of such dividends. The "Applicable Equity Retention Amount"
shall mean (1) with respect to any Equity Infusion made at any time at
which the Leverage Ratio is (after accounting for the receipt of such
Equity Infusion) less than or equal to 12.0 to 1.0, fifty percent (50%)
of the amount of such Equity Infusion, and (2) with respect to any Equity
Infusion made at any time at which the Leverage Ratio is (after
accounting for the receipt of such Equity Infusion) more than 12.0 to
1.0, seventy-five percent (75%) of the amount of such Equity Infusion.
"Equity Infusion" shall mean the sum of the net proceeds of any sale or
issuance of the Borrower's stock by the Borrower and any other equity
contributions made to the capital of the Borrower after December 31,
1998.
6.16. COMPLIANCE WITH SECURITY AGREEMENT. The Borrower will not fail
to perform in any material respect any of its obligations under the Security
Agreement. The Borrower will direct the Collateral Agent to ship Collateral
only to Approved Investors or otherwise consistent with the provisions of the
Loan Documents. The Borrower will not enter into or remain a party to, or
allow any of its Subsidiaries to enter into or remain a party to, any other
similar security agreements for Mortgage Loans not included in Collateral
with any Person other than the Collateral Agent; provided that the Borrower
and
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the Borrowing Subsidiaries may remain parties to the security agreements
securing the Existing Warehouse Facilities until the date which is sixty days
after the first Advance made under this Agreement.
6.17. RECOURSE SERVICING. Neither the Borrower nor any Borrowing
Subsidiary will at any time have any Recourse Servicing.
6.18. FEDERAL AGENCY APPROVALS. The Borrower and each Borrowing
Subsidiary (i) will maintain its status as a FHA-Approved Mortgagee, remain
eligible to obtain VA guaranties of Mortgage Loans and remain approved by
each Federal Agency as a seller/servicer and (ii) will not permit any Federal
Agency to withdraw its approval of the Borrower or any Borrowing Subsidiary.
6.19. APPROVED INVESTOR COMMITMENTS. The Borrower and the Borrowing
Subsidiaries shall maintain Approved Investor Commitments which cover all
Pledged Mortgages and Pledged Securities and each shall perform all of their
respective obligations in connection with such Approved Investor Commitments.
6.20. NEGATIVE PLEDGES. Neither the Borrower nor any Borrowing
Subsidiary shall enter into any agreement pursuant to which it agrees (i) not
to xxxxx x xxxx to third parties unless such provision allows for the lien of
the Agent, the Collateral Agent and the Lenders contemplated under the Loan
Documents or (ii) to grant another creditor a pari passu security interest in
and to the Collateral when a security interest is granted to the Agent, the
Collateral Agent and the Lenders pursuant to the Loan Documents.
6.21. YEAR 2000. The Borrower shall take and shall cause each of its
Subsidiaries to take all such actions as are reasonably necessary to
successfully implement the Year 2000 Program and to assure that Year 2000
Issues could not reasonably be expected to have a Material Adverse Effect.
At the request of the Agent, the Borrower shall provide a description of the
Year 2000 Program, together with any updates or progress reports with respect
thereto.
6.22. BORROWING SUBSIDIARY DEBT. No Borrowing Subsidiary shall incur
any Indebtedness other than (i) the Loans, (ii) subject to the terms of
Section 6.25, the Indebtedness existing on the date hereof and described on
Schedule "4" hereto, and (iii) other Indebtedness, OTHER THAN Indebtedness
for borrowed money, not to exceed $100,000 with respect to any individual
Borrowing Subsidiary.
6.23. FUNDING OF BORROWING SUBSIDIARY PLEDGED MORTGAGES. The
Borrower and each Borrowing Subsidiary agrees that each Pledged Mortgage
pledged by a Borrowing Subsidiary shall be funded with funds distributed to
such Borrowing Subsidiary by the Borrower (either from the proceeds of an
Advance or from other funds distributed to such Borrowing Subsidiary by the
Borrower), so that in all cases each Borrowing Subsidiary shall have received
reasonably equivalent value for the pledge of its Pledged Items.
6.24. SUBORDINATED INDEBTEDNESS. Pacific Guarantee Mortgage
Corporation will not (i) directly or indirectly voluntarily prepay, defease,
purchase, redeem, retire or otherwise acquire any Subordinated Indebtedness
unless no Default or Unmatured Default exists or would exist after giving
effect to the applicable prepayment, defeasance, purchase, redemption,
retirement or other acquisition, or (ii) make or permit any amendment or
modification to the notes or any other agreements evidencing or governing any
Subordinated Indebtedness.
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6.25. EXISTING WAREHOUSE FACILITIES. From and after the date of the
initial Advance hereunder, neither the Borrower nor any Borrowing Subsidiary
shall make any further borrowings under the Existing Warehouse Facilities.
The Borrower and the Borrowing Subsidiaries shall pay in full all amounts
then outstanding under the Existing Warehouse Facilities, and shall terminate
the Existing Warehouse Facilities, on or before the date which is sixty days
after the first Advance made under this Agreement. Promptly following the
termination of the Existing Warehouse Facilities, the Borrower shall provide
the Agent with evidence of such termination along with executed termination
statements for the existing UCC financing statements filed in connection with
the Existing Warehouse Facilities.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Lenders or the Agent
under or in connection with this Agreement, any other Loan Documents, any
Loan, or any certificate or information delivered in connection with this
Agreement or any other Loan Document shall be materially false on the date as
of which made or deemed made (it being understood that if any of the
representations and warranties made pursuant to the definition of "Borrowing
Base" are not true and correct as of any date with respect to any Pledged
Item, such Pledged Item shall be removed from Eligible Collateral as the sole
remedy for such failure).
7.2. Nonpayment of principal of any Loan when due (including but not
limited to payments required pursuant to Section 2.11.2), or nonpayment of
interest upon any Loan or of any Fee or other obligations under any of the
Loan Documents within five days after the same becomes due.
7.3. The breach by the Borrower or any Borrowing Subsidiary of any
of the terms or provisions of Section 6.2, 6.10, 6.11, 6.15, 6.17, 6.18 or
6.20.
7.4. The breach by the Borrower or any Borrowing Subsidiary (other
than a breach which constitutes a Default under any other Section of this
Article VII) of any of the terms or provisions of this Agreement which is not
remedied within thirty (30) days after the earlier to occur of (i) receipt of
written notice from the Agent or any Lender of such breach or (ii) the date
that the Borrower obtains knowledge of such breach.
7.5. Failure of the Borrower or any of its Material Subsidiaries to
pay when due any Indebtedness aggregating in excess of $2,000,000 ("Material
Indebtedness"); or the default by the Borrower or any of its Subsidiaries in
the performance of any term, provision or condition contained in any
agreement under which any such Material Indebtedness was created or is
governed, or any other event shall occur or condition exist, the effect of
which is to cause, or to permit the holder or holders of such Material
Indebtedness to cause, such Material Indebtedness to become due prior to its
stated maturity; or any Material Indebtedness of the Borrower or any of its
Subsidiaries shall be declared to be due and payable or required to be
prepaid or repurchased (other than by a regularly scheduled payment) prior to
the stated maturity thereof; or the Borrower or any of its Material
Subsidiaries shall not pay, or shall admit in writing its inability to pay,
its debts generally as they become due.
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7.6. The Borrower or any of its Material Subsidiaries shall (i) have
an order for relief entered with respect to it under the Federal bankruptcy
laws as now or hereafter in effect, (ii) make an assignment for the benefit
of creditors, (iii) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or
similar official for it or any Substantial Portion of its Property, (iv)
institute any proceeding seeking an order for relief under the Federal
bankruptcy laws as now or hereafter in effect or seeking to adjudicate it a
bankrupt or insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief
of debtors or fail to file an answer or other pleading denying, or consent to
or acquiesce in, the material allegations of any such proceeding filed
against it, (v) take any corporate action to authorize or effect any of the
foregoing actions set forth in this Section 7.6 or (vi) fail to contest in
good faith any appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Borrower or
any of its Material Subsidiaries, a receiver, trustee, examiner, liquidator
or similar official shall be appointed for the Borrower or any of its
Material Subsidiaries or any Substantial Portion of its Property, or a
proceeding described in Section 7.6(iv) shall be instituted against the
Borrower or any of its Material Subsidiaries and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a
period of 60 consecutive days.
7.8. Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of all or any
portion of the Property of the Borrower and its Subsidiaries which, when
taken together with all other Property of the Borrower and its Subsidiaries
so condemned, seized, appropriated, or taken custody or control of, during
the twelve-month period ending with the month in which any such action
occurs, constitutes a Substantial Portion.
7.9. The Borrower or any of its Subsidiaries shall fail within 30
days to pay, bond or otherwise discharge one or more (i) judgments or orders
for the payment of money in excess of $1,000,000 in the aggregate, or (ii)
nonmonetary judgments or orders which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, which
judgments, in any case, is/are not stayed on appeal or otherwise being
appropriately contested in good faith.
7.10. Any Change in Control shall occur.
7.11. The occurrence of any "default", as defined in any Loan
Document (other than this Agreement) or the breach of any of the terms or
provisions of any Loan Document (other than this Agreement), which default or
breach continues beyond any period of grace therein provided.
7.12. The Security Agreement shall for any reason fail to create a
valid and perfected first priority security interest in any material portion
of the collateral purported to be covered thereby, except as permitted by the
terms of the Security Agreement, or the Security Agreement shall fail to
remain in full force or effect or any action shall be taken to discontinue or
to assert the invalidity or unenforceability of the Security Agreement, or
the Borrower or any Borrowing Subsidiary shall fail to comply with any of the
terms or provisions of the Security Agreement.
7.13. The Unfunded Liabilities of all Single Employer Plans shall
exceed in the aggregate $1,000,000 or any Reportable Event shall occur in
connection with any Plan.
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7.14. The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that it has
incurred withdrawal liability to such Multiemployer Plan in an amount which,
when aggregated with all other amounts required to be paid to Multiemployer
Plans by the Borrower or any other member of the Controlled Group as
withdrawal liability (determined as of the date of such notification),
exceeds $1,000,000 or requires payments exceeding $250,000 per annum.
7.15. The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of the Borrower and the other
members of the Controlled Group (taken as a whole) to all Multiemployer Plans
which are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such Multiemployer Plan immediately preceding
the plan year in which the reorganization or termination occurs by an amount
exceeding $250,000.
7.16. The Borrower or any of its Subsidiaries shall be the subject of
any proceeding or investigation pertaining to the release by the Borrower or
any of its Subsidiaries, or any other Person of any toxic or hazardous waste
or substance into the environment, or any violation of any federal, state or
local environmental, health or safety law or regulation, which, in either
case, could have a Material Adverse Effect.
7.17. The representations and warranties set forth in "Section 5.15
Plan Assets; Prohibited Transactions" shall at any time not be true and
correct.
ARTICLE VIII
COLLATERAL, ACCELERATION AND OTHER REMEDIES
8.1. SECURITY AND COLLATERAL AGENCY AGREEMENT. Pursuant to the
Security Agreement, a security interest in and a continuing lien upon the
Collateral has been created in favor of the Collateral Agent for the benefit
of the Lenders.
8.2. AP MORTGAGES. Each of the Borrower and each Borrowing
Subsidiary agrees that while it is in possession of any Required Mortgage
Documents for an AP Mortgage, it will hold the same in trust and as agent and
bailee for the Collateral Agent and the Lenders, without authority to make
any other disposition thereof, or of the proceeds thereof, except as may be
otherwise permitted in writing by the Collateral Agent. The Borrower assumes
the responsibility for loss or destruction of any such Required Mortgage
Documents until the same are delivered to the Collateral Agent.
8.3. RELEASE OF COLLATERAL. Upon the request of the Borrower
delivered from time to time to the Agent and the Collateral Agent in
connection with the proposed sale of any Collateral, the Agent shall promptly
authorize the Collateral Agent to release Collateral specified in such notice
from the lien of the Security Agreement, if, but only if, (i) at the time of
such release no Default shall have occurred and then be continuing, (ii) the
Borrowing Base, after giving effect to such release, is at least equal to the
Coverage Requirement or any payment under Section 2.11 which may be required
as a result of such release has been made, and (iii) the release of such
Collateral will not create a violation of any Lending Sublimit or Borrowing
Base Sublimit.
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8.4. SETTLEMENT ACCOUNT AND FUNDING ACCOUNT. There is hereby
established with the Agent, for the benefit of the Lenders, a "cash
collateral" account of the Borrower, Account #19-16319 ("Settlement
Account"), into which shall be deposited all cash proceeds from the sale of
any Pledged Item. Only the Agent shall have access to the Settlement
Account. All amounts in the Settlement Account shall be applied as described
in Section 2.11.3. There is also hereby established with the Agent, for the
benefit of the Lenders, a second "cash collateral" account of the Borrower,
Account #10-00090 ("Funding Account"), from which all AP Mortgages shall be
funded (either by check drawn on such Funding Account or by wire transfer
from such Funding Account). Only the Agent and (for purposes of authorizing
wire transfers) the Collateral Agent shall have access to the Funding Account.
8.5. TERMINATION. If all Commitments under this Agreement shall
have expired or been terminated pursuant to the express terms hereof and no
Obligations shall be outstanding, the Agent shall promptly deliver or cause
to be delivered all cash standing to the credit of the Settlement Account and
Pledged Items to the Borrower. The receipt by the Borrower of any cash in
the Settlement Account and of all Pledged Items returned or delivered to the
Borrower pursuant to any provision of this Agreement, together with UCC-3
termination statements executed by the Agent, shall be a complete and full
acquittance for the Pledged Items so delivered.
8.6. ACCELERATION. If any Default described in Section 7.6 or 7.7
occurs, the obligations of the Lenders to make Loans hereunder shall
automatically terminate and the Obligations shall immediately become due and
payable without presentment, demand, protest or notice of any kind, all of
which the Borrower and each Borrowing Subsidiary hereby waive, and without
any election or action on the part of the Agent or any Lender. If any other
Default exists, the Required Lenders (or the Agent with the consent of the
Required Lenders) may upon written notice to the Borrower (which may be
delivered by concurrent facsimile) (i) terminate or suspend the obligations
of the Lenders to make Loans hereunder and they shall, upon notice to the
Borrower, terminate or be suspended, and/or (ii) declare the Obligations to
be due and payable, whereupon the Obligations shall become immediately due
and payable, without presentment, demand, protest or notice of any kind, all
of which the Borrower and each Borrowing Subsidiary hereby expressly waive.
If, within thirty (30) days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 7.6 or 7.7) and before any judgment or decree for the payment of the
Obligations due shall have been obtained or entered, the Required Lenders (in
their sole discretion) shall so direct, the Agent shall, by notice to the
Borrower, rescind and annul such acceleration and/or termination.
8.7. OTHER REMEDIES.
(i) Unless a Default shall have occurred and then be
continuing, the Borrower shall be entitled to receive and collect
directly all sums payable to the Borrower in respect of the Collateral
except proceeds from the sale thereof.
(ii) During the continuance of a Default, the Agent and the
Collateral Agent, on behalf of the Lenders, shall be entitled to all the
rights and remedies hereunder and in the Security Agreement, subject to
the limitations and requirements of Paragraph 16 thereof, and all other
rights or remedies at law or in equity existing or conferred upon the
Lenders by other jurisdictions or other applicable law.
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(iii) Following the occurrence and during the continuance of a
Default or an Unmatured Default, no Lender shall be obligated to fund any
Loan hereunder.
(iv) Following the occurrence and during the continuance of a
Default, each of the Borrower and each Borrowing Subsidiary agrees that
the Borrower, each Borrowing Subsidiary and the Agent shall, if the Agent
shall request, implement certain procedures with respect to the
Borrower's and each Borrowing Subsidiary's funding of AP Mortgages, all
at the Borrower's sole expense. Such procedures may include, but are not
limited to: (i) reducing the advance rate against AP Mortgages for
purposes of determining the Collateral Value component of the Borrowing
Base; (ii) requiring the closing agents for such AP Mortgages to enter
into escrow or other agreements regarding the monies used to fund such AP
Mortgages; and (iii) requiring the Borrower and each Borrowing Subsidiary
to provide the Agent and the Lenders with such information regarding the
funding of such AP Mortgages as the Agent may reasonably request. The
Borrower and each Borrowing Subsidiary, at its expense, shall from time
to time execute and deliver to the Agent or the Collateral Agent all such
assignments, certificates, supplemental documents, and financing
statements, and shall do all other acts or things, as the Agent may
reasonably request in order to more fully implement such procedures.
(v) Each of the Borrower and each Borrowing Subsidiary waives,
to the extent permitted by law, any right to require the Agent or any
Lender 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.
(vi) The Agent on behalf of the Lenders 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 Pledged Item, including, without limitation, payment of
delinquent taxes or assessments and insurance premiums. The Borrower and
each Borrowing Subsidiary shall provide any and all information
reasonably required by the Agent to administer this Agreement or collect
on the Collateral. All advances, charges, costs and expenses, including
reasonable attorneys fees, incurred or paid by the Agent in exercising
any right, power or remedy conferred by this Agreement, or in the
enforcement hereof (or by any Lender acting on instruction of the
Required Lenders in the enforcement hereof), together with interest
thereon at the rate per annum of 2% plus the Alternate Base Rate from the
time of payment until repaid, shall become a part of the Obligations.
(vii) Following the occurrence of a Default and the acceleration
of the Obligations the Agent shall be entitled to receive and collect all
sums payable to the Borrower or any Borrowing Subsidiary in respect of
the Collateral and (a) the Agent, at the request of the Required Lenders
and upon notice to the Borrower, may in its own name or in the name of
the Borrower or any Borrowing Subsidiary 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, (b)
the Borrower and each Borrowing Subsidiary shall receive and hold in
trust for the Lenders any amounts thereafter received by the Borrower or
any Borrowing Subsidiary upon or in respect of any of the Collateral,
advising the Agent as to the source of such funds and, if the Agent so
requests at the direction of the Required Lenders, forthwith paying such
amounts to the Agent, and (c) any and all amounts so received and
collected by the Agent either directly or from the Borrower shall be
deposited in the Settlement Account.
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8.8. APPLICATION OF PROCEEDS. After a Default and acceleration of
the Obligations, the proceeds of any sale or enforcement of all or any part
of the Collateral pursuant to the Security Agreement and the balance of any
moneys in the Settlement Account shall be applied by the Agent:
FIRST, to the payment of all costs and expenses of such sale or
enforcement, including reasonable compensation to the Agent's agents and
counsel, and all expenses, liabilities and advances made or incurred by
the Agent or any Lender acting on instructions of the Required Lenders in
connection therewith;
SECOND, to the payment of all costs and expenses incurred by the
Collateral Agent under the Security Agreement;
THIRD, to the payment of all Fees and the outstanding principal
balance of, and all accrued and unpaid interest on, all Loans under this
Agreement, ratably according to the amount so due to each Lender until
such amounts are paid in full;
FOURTH, to the extent proceeds remain after application under the
preceding subparagraphs, to the payment of all remaining Obligations
until such amounts are paid in full; and
FIFTH, to the payment to the Borrower, or to its successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
The Agent shall have absolute discretion as to the time of application
of any such proceeds, moneys or balances in accordance with this Agreement.
If the proceeds of any such sale are insufficient to cover the costs and
expenses of such sale, as aforesaid, and the payment in full of the
Obligations, the Borrower and the Borrowing Subsidiaries shall remain liable
for any deficiency.
8.9. PRESERVATION OF RIGHTS. No delay or omission of the Lenders or
the Agent to exercise any right under the Loan Documents shall impair such
right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Loan notwithstanding the existence of a Default
or Unmatured Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude any other or further exercise thereof or the exercise of any other
right, and no waiver, amendment or other variation of the terms, conditions
or provisions of the Loan Documents whatsoever shall be valid unless in
writing signed by the Lenders required pursuant to Section 9.1, and then only
to the extent in such writing specifically set forth. All remedies contained
in the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid
in full.
8.10. LIMITATION ON RECOURSE TO BORROWING SUBSIDIARIES. Each
Borrowing Subsidiary and the Borrower shall be jointly and severally liable
for the payment of the Obligations; provided, however, that recourse to any
particular Borrowing Subsidiary hereunder shall be limited to the greater of
(i) such Borrowing Subsidiary's interest in the Collateral pledged by such
Borrowing Subsidiary, or (ii) the maximum amount not subject (but for the
provisions of this Section) to avoidance under Title 11 of the United States
Code, as the same may be amended from time to time, or any analogous
applicable state law. Each Borrowing Subsidiary's liability hereunder shall
in no way be affected, impaired, reduced or released by any of the following
(any or all of which may be done or omitted by Lenders in their sole
discretion),
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namely, any compromise, settlement, surrender, release, discharge or
extension with respect to the Obligations or with respect to any Collateral,
or any other disposition of, or substitution for, or indulgence with respect
to, or failure, neglect or omission to realize upon, or to enforce or
exercise any liens or rights of appropriation or other rights with respect
to, any Obligations or any security or collateral therefor or any claims
against any person or persons primarily or secondarily liable thereon
(including the Borrower or any other Borrowing Subsidiary). Each Borrowing
Subsidiary hereby waives any and all defenses to which it might be entitled
as a guarantor in the event such Borrowing Subsidiary is deemed to be a
guarantor of the Obligations rather than a co-borrower.
ARTICLE IX
AMENDMENTS; WAIVERS; GENERAL PROVISIONS
9.1. AMENDMENTS AND WAIVERS. Other than (a) Commitment increases
pursuant to Section 12.4 (which may be accomplished solely by the Borrower,
the Agent and the subject Lender) and (b) temporary waivers of Collateral
eligibility permitted pursuant to the definition of "Borrowing Base" (which
may be accomplished solely by the Agent), the Required Lenders (or the Agent
with the consent in writing of the Required Lenders) and the Borrower and the
Borrowing Subsidiaries may enter into agreements supplemental hereto for the
purpose of admitting new Borrowing Subsidiaries, adding or modifying any
provisions to the Loan Documents, changing in any manner the rights of the
Lenders or the Borrower or the Borrowing Subsidiaries hereunder, or waiving
any Default hereunder; provided, however, that no such supplemental agreement
shall, without the consent of each Lender directly or indirectly affected
thereby:
(i) Extend the final maturity of any Loan or forgive all or any
portion of the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon or fees.
(ii) Reduce the percentage specified in the definition of Required
Lenders.
(iii) Extend the Termination Date, or reduce the amount of or extend the
payment date for the mandatory payments required under Section
2.11, or increase the amount of the Aggregate Commitment or of the
Commitment of any Lender hereunder (other than in accordance with
Section 12.4).
(iv) Amend this Section 9.1.
(v) Release any guarantor of any Obligation or, except as provided
herein or in the Security Agreement, release any Collateral.
(vi) Amend the definition of "Borrowing Base", "Collateral Value",
"Eligible Conforming Mortgage Loan", "Eligible HELOC Loan",
"Eligible Jumbo Mortgage Loan", "Eligible Non-Agency Mortgage
Loan", "Eligible Sub-Prime Mortgage Loan" or "Eligible Security".
(vii) Permit the Borrower or any Borrowing Subsidiary to assign its
rights under this Agreement or amend or waive any restriction on
the Borrower's or any Borrowing Subsidiary's ability to assign its
rights or obligations under any of the Loan Documents.
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(viii) Amend or waive any Lending Sublimits or Borrowing Base Sublimits
(other than the waivers expressly permitted pursuant to the
definition of Borrowing Base).
(ix) Amend or waive any provision herein regarding the indemnification
of the Agent, the Collateral Agent or any Lender.
(x) Amend or waive any provision herein regarding the allocation among
the Lenders of any payments or proceeds received by the Agent
hereunder.
(xi) Amend or waive any provision herein which, by its terms, requires
the consent, approval or satisfaction of all Lenders.
No amendment of any provision of this Agreement relating to the Agent or the
Collateral Agent shall be effective without the written consent of the Agent
or the Collateral Agent, as the case may be. In addition, the consent of the
Collateral Agent shall be required for the effectiveness of any amendment
referred to in Section 9.1 (iv), (v), (vi), (viii) and/or (ix) above. The
Agent may waive payment of the fee required under Section 12.3.2 without
obtaining the consent of any other party to this Agreement.
9.2. SURVIVAL OF REPRESENTATIONS. All representations and
warranties of the Borrower and/or the Borrowing Subsidiaries contained in
this Agreement shall survive the making of the Loans herein contemplated.
9.3. GOVERNMENTAL REGULATION. Anything contained in this Agreement
to the contrary notwithstanding, no Lender shall be obligated to extend
credit to the Borrower in violation of any limitation or prohibition provided
by any applicable statute or regulation.
9.4. HEADINGS. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any
of the provisions of the Loan Documents.
9.5. ENTIRE AGREEMENT. The Loan Documents embody the entire
agreement and understanding among the Borrower, the Borrowing Subsidiaries,
the Agent, the Collateral Agent and the Lenders and supersede all prior
agreements and understandings among the Borrower, the Borrowing Subsidiaries,
the Agent and the Lenders relating to the subject matter thereof, other than
the fee letter described in Section 2.7.6 and any other agreement entered
into in connection with the fees described in Section 2.7.7.
9.6. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The
respective obligations of the Lenders hereunder are several and not joint and
no Lender shall be the partner or agent of any other (except to the extent to
which the Agent is authorized to act as such). The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender
from any of its obligations hereunder. This Agreement shall not be construed
so as to confer any right or benefit upon any Person other than the parties
to this Agreement and their respective successors and assigns, PROVIDED,
HOWEVER, that the parties hereto expressly agree that the Arranger shall
enjoy the benefits of the provisions of Sections 9.7, 9.8 and 10.11 to the
extent specifically set forth therein and shall have the right to enforce
such provisions on its own behalf and in its own name to the same extent as
if it were a party to this Agreement.
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9.7. EXPENSES; INDEMNIFICATION. (i) The Borrower shall reimburse
the Agent, the Arranger and the Collateral Agent for any actual costs and
out-of-pocket expenses (including reasonable attorneys' fees and time charges
of attorneys for the Agent, the Arranger and the Collateral Agent, which
attorneys may be employees of the Agent, the Arranger or the Collateral
Agent) paid or incurred by the Agent, the Arranger or the Collateral Agent in
connection with the preparation, negotiation, execution, delivery,
syndication, review, amendment, modification, and administration of the Loan
Documents. The Borrower also agrees to reimburse the Agent, the Arranger,
the Collateral Agent and the Lenders for any actual costs and out-of-pocket
expenses (including reasonable attorneys' fees and time charges of attorneys
for the Agent, the Arranger, the Collateral Agent and the Lenders, which
attorneys may be employees of the Agent, the Arranger, the Collateral Agent
or the Lenders) paid or incurred by the Agent, the Arranger, the Collateral
Agent or any Lender in connection with the collection and enforcement of the
Loan Documents.
(ii) The Borrower hereby further agrees to indemnify the Agent, the
Arranger, the Collateral Agent and each Lender, its directors, officers and
employees against all losses, claims, damages, penalties, judgments,
liabilities and expenses (including, without limitation, all expenses of
litigation or preparation therefor whether or not the Agent, the Arranger,
the Collateral Agent or any Lender is a party thereto) which any of them may
pay or incur arising out of or relating to this Agreement, the other Loan
Documents, the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any Loan hereunder
except to the extent that they are determined in a final and non-appealable
judgment by a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of the party seeking indemnification.
(iii) The obligations of the Borrower under this Section shall
survive the termination of this Agreement.
9.8. NONLIABILITY OF LENDERS. The relationship between the Borrower
and the Borrowing Subsidiaries on the one hand and the Lenders, the Agent and
the Collateral Agent on the other hand shall be solely that of borrower and
lender. Neither the Agent, the Arranger, the Collateral Agent nor any Lender
shall have any fiduciary responsibilities to the Borrower or any Borrowing
Subsidiary. Neither the Agent, the Arranger, the Collateral Agent nor any
Lender undertakes any responsibility to the Borrower or any Borrowing
Subsidiary to review or inform the Borrower or any Borrowing Subsidiary of
any matter in connection with any phase of the Borrower's or any Borrowing
Subsidiary's business or operations. Each of the Borrower and each Borrowing
Subsidiary agrees that neither the Agent, the Arranger, the Collateral Agent
nor any Lender shall have liability to the Borrower or any Borrowing
Subsidiary (whether sounding in tort, contract or otherwise) for losses
suffered by the Borrower or any Borrowing Subsidiary in connection with,
arising out of, or in any way related to, the transactions contemplated and
the relationship established by the Loan Documents, or any act, omission or
event occurring in connection therewith, unless it is determined in a final
and non-appealable judgment by a court of competent jurisdiction that such
losses resulted from the gross negligence or willful misconduct of the party
from which recovery is sought. Neither the Agent, the Arranger, the
Collateral Agent nor any Lender shall have any liability with respect to, and
each of the Borrower and each Borrowing Subsidiary hereby waives, releases
and agrees not to xxx for any special, indirect or consequential damages
suffered by the Borrower or any Borrowing Subsidiary in connection with,
arising out of, or in any way related to the Loan Documents or the
transactions contemplated thereby.
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9.9. SEVERABILITY OF PROVISIONS. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are
declared to be severable.
9.10. NUMBERS OF DOCUMENTS. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
9.11. ACCOUNTING. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement
Accounting Principles.
9.12. CONFIDENTIALITY. Each Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement
in confidence, except for disclosure (i) to its Affiliates and to other
Lenders and their respective Affiliates, (ii) to legal counsel, accountants,
and other professional advisors to such Lender or to a Transferee, (iii) to
regulatory officials, (iv) to any Person as required by law, regulation, or
legal process, (v) to any Person in connection with any legal proceeding to
which such Lender is a party, (vi) to such Lender's direct or indirect
contractual counterparties in swap agreements or to legal counsel,
accountants and other professional advisors to such counterparties, and (vii)
permitted by Section 12.5.
9.13. NONRELIANCE. Each Lender hereby represents that it is not
relying on or looking to any margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) for the repayment of the
Loans provided for herein.
ARTICLE X
THE AGENT AND THE COLLATERAL AGENT
10.1. APPOINTMENT; NATURE OF RELATIONSHIP. The First National Bank
of Chicago is hereby appointed by each of the Lenders as its contractual
representative hereunder and under each other Loan Document, and each of the
Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. BANK ONE, Texas, N.A. is hereby
appointed by each of the Lenders as its contractual representative hereunder
and under the Security Agreement, and each of the Lenders irrevocably
authorizes the Collateral Agent to act as the contractual representative of
such Lender with the rights and duties expressly set forth herein and in the
Security Agreement. The Agent and the Collateral Agent are hereby authorized
to enter into the Security Agreement on behalf of the Lenders and all
obligations of the Lenders thereunder shall be binding upon each Lender as if
such Lender had executed the Security Agreement. FOR PURPOSES OF THIS
ARTICLE X (OTHER THAN SECTION 10.12), EACH REFERENCE TO THE TERM "AGENT"
SHALL BE DEEMED TO BE A COLLECTIVE REFERENCE TO THE AGENT AND THE COLLATERAL
AGENT. The Agent agrees to act as such contractual representative upon the
express conditions contained in this Article X. Notwithstanding the use of
the defined terms "Agent" and "Collateral Agent" throughout this Agreement,
it is expressly understood and agreed that the Agent shall have not have any
fiduciary responsibilities to any Lender by reason of this Agreement or any
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other Loan Document and that the Agent is merely acting as the representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (i) does not hereby assume any
fiduciary duties to any of the Lenders, (ii) is a "representative" of the
Lenders within the meaning of Section 9-105 of the Uniform Commercial Code
and (iii) is acting as an independent contractor, the rights and duties of
which are limited to those expressly set forth in this Agreement and the
other Loan Documents. Each of the Lenders hereby agrees to assert no claim
against the Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Lender hereby waives.
10.2. POWERS. The Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the
terms of each thereof, together with such powers as are reasonably incidental
thereto. The Agent shall have no implied duties to the Lenders, or any
obligation to the Lenders to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the Agent.
10.3. GENERAL IMMUNITY. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, any Borrowing
Subsidiary, the Lenders or any Lender for any action taken or omitted to be
taken by it or them hereunder or under any other Loan Document or in
connection herewith or therewith except to the extent such action or inaction
is determined in a final non-appealable judgment by a court of competent
jurisdiction to have arisen from the gross negligence or willful misconduct
of such Person.
10.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. Neither the Agent
nor any of its directors, officers, agents or employees shall be responsible
for or have any duty to ascertain, inquire into, or verify (i) any statement,
warranty or representation made in connection with any Loan Document or any
borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information
directly to each Lender; (iii) the satisfaction of any condition specified in
Article IV, except receipt of items required to be delivered solely to the
Agent; (iv) the existence or possible existence of any Default or Unmatured
Default; (v) the value, sufficiency, creation, perfection or priority of any
Lien on any collateral security; or (vii) the financial condition of the
Borrower or any guarantor of any of the Obligations or of any of the
Borrower's or any such guarantor's respective Subsidiaries. The Agent shall
have no duty to disclose to the Lenders information that is not required to
be furnished by the Borrower to the Agent at such time, but is voluntarily
furnished by the Borrower to the Agent (either in its capacity as Agent or in
its individual capacity).
10.5. ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document in accordance with written instructions
signed by the Required Lenders (or, to the extent required by Section 9.1,
all of the Lenders), and such instructions and any action taken or failure to
act pursuant thereto shall be binding on all of the Lenders. The Lenders
hereby acknowledge that the Agent shall be under no duty to take any
discretionary action permitted to be taken by it pursuant to the provisions
of this Agreement or any other Loan Document unless it shall be requested in
writing to do so by the Required Lenders. The Agent shall be fully justified
in failing or refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the
Lenders pro rata against any and all liability, cost and expense (except any
liability, cost or expense resulting from the Agent's gross negligence or
willful misconduct) that it may incur by reason of taking or continuing to
take any such action.
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10.6. EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice
of counsel concerning the contractual arrangement between the Agent and the
Lenders and all matters pertaining to the Agent's duties hereunder and under
any other Loan Document.
10.7. RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document reasonably believed by it to be
genuine and correct and to have been signed or sent by the proper person or
persons, and, in respect of legal matters, upon the opinion of counsel
selected by the Agent, which counsel may be employees of the Agent.
10.8. AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders agree
to reimburse and indemnify the Agent ratably in proportion to their
respective Commitments (or, if the Commitments have been terminated, in
proportion to their Commitments immediately prior to such termination) (i)
for any amounts not reimbursed by the Borrower for which the Agent is
entitled to reimbursement by the Borrower under the Loan Documents, (ii) for
any other expenses incurred by the Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents (including, without limitation, for any
expenses incurred by the Agent in connection with any dispute between the
Agent and any Lender or between two or more of the Lenders) and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever
which may be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby
(including, without limitation, for any such amounts incurred by or asserted
against the Agent in connection with any dispute between the Agent and any
Lender or between two or more of the Lenders), or the enforcement of any of
the terms of the Loan Documents or of any such other documents, provided that
(i) no Lender shall be liable for any of the foregoing to the extent any of
the foregoing is found in a final non-appealable judgment by a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of the Agent and (ii) any indemnification required pursuant to
Section 3.5(vii) shall, notwithstanding the provisions of this Section 10.8,
be paid by the relevant Lender in accordance with the provisions thereof.
The obligations of the Lenders under this Section 10.8 shall survive payment
of the Obligations and termination of this Agreement.
10.9. NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender or the
Borrower referring to this Agreement describing such Default or Unmatured
Default and stating that such notice is a "notice of default". In the event
that the Agent receives such a notice, the Agent shall give prompt notice
thereof to the Lenders.
10.10. RIGHTS AS A LENDER. In the event the entity which is the Agent
is a Lender, the entity which is the Agent shall have the same rights and
powers hereunder and under any other Loan Document with respect to its
Commitment and its Loans as any Lender and may exercise the same as though it
were not the Agent, and the term "Lender" or "Lenders" shall, at any time
when the entity which is the Agent is a Lender, unless the context otherwise
indicates, include the Agent in its individual capacity. The entity
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which is the Agent and its Affiliates may accept deposits from, lend money
to, and generally engage in any kind of trust, debt, equity or other
transaction, in addition to those contemplated by this Agreement or any other
Loan Document, with the Borrower or any of its Subsidiaries in which the
Borrower or such Subsidiary is not restricted hereby from engaging with any
other Person. The entity which is the Agent, in its individual capacity, is
not obligated to remain a Lender.
10.11. LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrower and
such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement and the other
Loan Documents. Each Lender also acknowledges that it will, independently
and without reliance upon the Agent, the Arranger or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking
action under this Agreement and the other Loan Documents.
10.12. SUCCESSOR AGENT. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to
be effective upon the appointment of a successor Agent or, if no successor
Agent has been appointed, forty-five days after the retiring Agent gives
notice of its intention to resign. First Chicago agrees that it shall resign
as Agent upon the request of the Borrower given at any time that both (i) no
Default exists, and (ii) First Chicago's Commitment is less than the lesser
of $25,000,000 or 10% of the Aggregate Commitment. In addition, if (x) the
Agent fails to perform its obligations under this Agreement in any material
manner and fails to correct its performance within thirty days after written
notice given by not less than the Required Lenders, or (y) the Commitment of
the entity which is the Agent is less than the lesser of $25,000,000 or 10%
of the Aggregate Commitment, then the Agent may be removed upon thirty days
written notice given by not less than the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint,
on behalf of the Lenders, a successor Agent. If no successor Agent shall have
been so appointed by the Required Lenders by the removal date in the case of
removal or within thirty days after the resigning Agent's giving notice of
its intention to resign in the case of resignation, then the resigning or
removed Agent may appoint, on behalf of the Lenders, a successor Agent.
Notwithstanding the previous sentence, the Agent may at any time without the
consent of the Borrower or any Lender, appoint any of its Affiliates which is
a commercial bank having capital and retained earnings of at least
$100,000,000 as a successor Agent hereunder. If the Agent has resigned or
been removed and no successor Agent has been appointed, the Lenders may
perform all the duties of the Agent hereunder and the Borrower shall make all
payments in respect of the Obligations to the applicable Lender and for all
other purposes shall deal directly with the Lenders. No successor Agent
shall be deemed to be appointed hereunder until such successor Agent has
accepted the appointment. Any such successor Agent shall be a commercial
bank having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning Agent. Upon the
effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder
and under the Loan Documents. After the effectiveness of the resignation or
removal of an Agent, the provisions of this Article X shall continue in
effect for the benefit of such Agent in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder and
under the other Loan Documents. In the event that there is a successor to
the Agent by merger, or the Agent assigns its duties and obligations to an
Affiliate pursuant to this Section 10.12, then the term "Corporate Base Rate"
as used in this Agreement shall mean the prime rate, base rate or other
analogous rate of the new Agent.
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10.13. DELEGATION TO AFFILIATES. The Borrower and the Lenders agree
that the Agent may delegate any of its duties under this Agreement to any of
its Affiliates. Any such Affiliate (and such Affiliate's directors,
officers, agents and employees) which performs duties in connection with this
Agreement shall be entitled to the same benefits of the indemnification,
waiver and other protective provisions to which the Agent is entitled under
Articles IX and X.
10.14. REPORTS. Each of the Borrower and each Borrowing Subsidiary
acknowledges that from time to time First Chicago may prepare and may
distribute to the Lenders (but shall have no obligation or duty to prepare or
to distribute to the Lenders) certain audit reports (the "Reports")
pertaining to the Borrower's or any Borrowing Subsidiary's assets for
internal use by First Chicago from information furnished to it by or on
behalf of the Borrower or any Borrowing Subsidiary, after First Chicago has
exercised its rights of inspection pursuant to this Agreement. The Lenders
agree that (i) First Chicago has no duty to send its field auditors to the
Borrower or any Borrowing Subsidiary or to prepare and/or distribute a copy
of any internally prepared reports (including the Reports) to any Lender;
(ii) First Chicago makes no representation or warranty, express or implied,
as to the completeness or accuracy of the Reports or any of the information
contained therein, that First Chicago may in its sole discretion provide to
the Lenders, and First Chicago is not responsible for any statement made
therein; (iii) First Chicago undertakes no obligation to update, correct or
supplement the Reports; (iv) neither First Chicago nor any of its employees,
officers, directors or agents shall be liable to any Lender or any other
Person receiving a copy of the Reports for any inaccuracy or omission
contained in or relating thereto, even if said inaccuracy or omission is the
result of gross negligence; (v) the information in the Reports is
confidential and may not be disclosed to any Person (including the Borrower),
in whole or in part, other than as permitted by Section 9.12. Further, each
Lender agrees to indemnify First Chicago, its directors, officers, agents and
employees against all losses, claims, damages, penalties, judgments,
liabilities and expenses, as incurred, (including, without limitation, all
expenses of litigation and preparation therefor whether or not First Chicago
is a party thereto) which any of them may pay or incur arising out of such
Lender's receipt or use of any Report.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. SETOFF. In addition to, and without limitation of, any rights
of the Lenders under applicable law, if the Borrower becomes insolvent,
however evidenced, or any Default occurs, any and all deposits (including all
account balances, whether provisional or final and whether or not collected
or available) and any other Indebtedness at any time held or owing by any
Lender or any Affiliate of any Lender to or for the credit or account of the
Borrower or any Borrowing Subsidiary may be offset and applied toward the
payment of the Obligations owing to such Lender, whether or not the
Obligations, or any part hereof, shall then be due.
11.2. RATABLE PAYMENTS. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Loans (other than payments
received pursuant to Sections 3.1, 3.2, 3.4, 3.5 or 3.6 or Article XII) in a
greater proportion than that received by any other Lender, such Lender
agrees, promptly upon demand, to purchase a portion of the Loans held by the
other Lenders so that after such purchase each Lender will hold its ratable
proportion of Loans. If any Lender, whether in connection with setoff or
amounts which might be subject to setoff or otherwise, receives collateral or
other protection for its
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Obligations or such amounts which may be subject to setoff, such Lender
agrees, promptly upon demand, to take such action necessary such that all
Lenders share in the benefits of such collateral ratably in proportion to
their Loans. In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made.
11.3. CUSTODIAL ACCOUNTS. The Borrower and each Borrowing Subsidiary
agrees that funds received and held by it as custodian for FNMA, GNMA or
other mortgage pools which are deposited into accounts with any Lender shall
be clearly identified as custodial accounts, and each Lender agrees that each
provision of the foregoing subsections of this Article XI shall not apply to
such custodial accounts. Neither the Borrower nor any Borrowing Subsidiary
shall deposit any of its general funds in any custodial accounts or otherwise
commingle funds in any custodial accounts.
ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS; COMMITMENT INCREASES
12.1. SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower, the
Borrowing Subsidiaries and the Lenders and their respective successors and
assigns, except that (i) neither the Borrower nor any Borrowing Subsidiary
shall have the right to assign its rights or obligations under the Loan
Documents without the consent of all of the Lenders and (ii) any assignment
by any Lender must be made in compliance with Section 12.3. Notwithstanding
clause (ii) of this Section, any Lender may at any time, without the consent
of the Borrower, any Borrowing Subsidiary or the Agent, assign all or any
portion of its rights under this Agreement and any Note to a Federal Reserve
Bank; provided, however, that no such assignment to a Federal Reserve Bank
shall release the transferor Lender from its obligations hereunder. The
Agent may treat the Person which made any Loan or which holds any Note as the
owner thereof for all purposes hereof unless and until such Person complies
with Section 12.3 in the case of an assignment thereof or, in the case of any
other transfer, a written notice of the transfer is filed with the Agent.
Any assignee or transferee of the rights to any Loans or any Note agrees by
acceptance of such transfer or assignment to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Loan (whether or not a Note has
been issued in evidence thereof), shall be conclusive and binding on any
subsequent holder, transferee or assignee of the rights to such Loan.
12.2. PARTICIPATIONS.
12.2.1. PERMITTED PARTICIPANTS; EFFECT. Any Lender may, in
the ordinary course of its business and in accordance with applicable law, at
any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held by
such Lender, any Commitment of such Lender or any other interest of such
Lender under the Loan Documents. In the event of any such sale by a Lender
of participating interests to a Participant, such Lender's obligations under
the Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the owner of its Loans and the holder
of any Note issued to it in evidence thereof for all purposes under the Loan
Documents, all amounts payable by the Borrower or any Borrowing Subsidiary
under this Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrower, each
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Borrowing Subsidiary, the other Lenders and the Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights
and obligations under the Loan Documents.
12.2.2. VOTING RIGHTS. Each Lender shall retain the sole
right to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than any
amendment, modification or waiver with respect to any Loan or Commitment in
which such Participant has an interest which forgives principal, interest or
fees or reduces the interest rate or fees payable with respect to any such
Loan or Commitment, extends the Termination Date, postpones any date fixed
for any regularly-scheduled payment of principal of, or interest or fees on,
any such Loan or Commitment, releases any guarantor of any such Loan or
releases all or substantially all of the Collateral (other than as expressly
permitted pursuant to the Loan Documents).
12.2.3. BENEFIT OF SETOFF. The Borrower and each Borrowing
Subsidiary agrees that each Participant shall be deemed to have the right of
setoff provided in Section 11.1 in respect of its participating interest in
amounts owing under the Loan Documents to the same extent as if the amount of
its participating interest were owing directly to it as a Lender under the
Loan Documents, provided that each Lender shall retain the right of setoff
provided in Section 11.1 with respect to the amount of participating
interests sold to each Participant. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of setoff provided
in Section 11.1, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 11.2 as if each Participant were a Lender.
12.3. ASSIGNMENTS.
12.3.1. PERMITTED ASSIGNMENTS. Any Lender may, in the
ordinary course of its business and in accordance with applicable law, at any
time assign to one or more banks or other entities ("Purchasers") all or any
part of its rights and obligations under the Loan Documents. Such assignment
shall be substantially in the form of Exhibit "H" hereto or in such other
form as may be agreed to by the parties thereto. The consent of the Borrower
and the Agent shall be required prior to an assignment becoming effective
with respect to a Purchaser which is not a Lender or an Affiliate thereof;
provided, however, that if a Default has occurred and is continuing, the
consent of the Borrower shall not be required. Such consent shall not be
unreasonably withheld or delayed. Each such assignment shall be in an amount
such that, following such assignment, the assignee shall have a Commitment
not less than $10,000,000 and, unless the assigning Lender is assigning its
entire Commitment, the assigning Lender shall have a Commitment not less than
$10,000,000.
12.3.2. EFFECT; EFFECTIVE DATE. Upon (i) delivery to the
Agent of a notice of assignment, substantially in the form attached as Annex
"I" to Exhibit "H" hereto (a "Notice of Assignment"), together with any
consents required by Section 12.3.1, and (ii) payment of a $3,500 fee to the
Agent for processing such assignment, such assignment shall become effective
on the effective date specified in such Notice of Assignment. The Notice of
Assignment shall contain a representation by the Purchaser to the effect that
none of the consideration used to make the purchase of the Commitment and
Loans under the applicable assignment agreement are "plan assets" as defined
under ERISA and that the rights and interests of the Purchaser in and under
the Loan Documents will not be "plan assets" under ERISA. On and after the
effective date of such assignment, such Purchaser shall for all purposes be a
Lender party to this Agreement and any other Loan Document executed by or on
behalf of the Lenders and shall have all the rights and obligations of a
Lender under the Loan Documents, to the same extent as if it were an original
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party hereto, and no further consent or action by the Borrower, the Lenders
or the Agent shall be required to release the transferor Lender with respect
to the percentage of the Aggregate Commitment and Loans assigned to such
Purchaser. Upon the consummation of any assignment to a Purchaser pursuant to
this Section 12.3.2, the transferor Lender, the Agent and the Borrower and
the Borrowing Subsidiaries shall, if the transferor Lender or the Purchaser
desires that its Loans be evidenced by a Note, make appropriate arrangements
so that a new Note or, as appropriate a replacement Note is issued to such
transferor Lender and a new Note or, as appropriate, a replacement Note, is
issued to such Purchaser, in each case in principal amounts reflecting their
respective Commitments, as adjusted pursuant to such assignment. In
addition, within a reasonable time after the effective date of any
assignment, the Agent shall, and is hereby authorized and directed to, revise
Schedule "1" reflecting the revised commitments and percentages of each of
the Lenders and shall distribute such revised Schedule "1" to each of the
Lenders and the Borrower, whereupon such revised Schedule shall replace the
old Schedule and become part of this Agreement.
12.4 COMMITMENT INCREASES.
12.4.1. INCREASES TO AGGREGATE COMMITMENT. The Borrower shall
have the right to increase the Aggregate Commitment by obtaining additional
Commitments, either from one or more of the Lenders or another lending
institution provided that (A) the Agent has approved the identity of any such
new Lender, such approval not to be unreasonably withheld, (B) any such new
Lender assumes all of the rights and obligations of a "Lender" hereunder, and
(C) the procedure described in Section 12.4.2 has been complied with,
provided further that the Aggregate Commitment shall not at any time exceed
$400,000,000 without the approval of the Agent and all of the Lenders.
12.4.2. PROCEDURE FOR INCREASES AND ADDITION OF NEW LENDERS.
This Agreement permits certain increases in a Lender's Commitment and the
admission of new Lenders providing new Commitments, neither of which require
any consents or approvals from the other Lenders. Any amendment hereto for
such an increase or addition shall be in the form attached hereto as Exhibit
"I" and shall only require the written signatures of the Agent, the Borrower,
the Borrowing Subsidiaries and the Lender(s) being added or increasing their
Commitment, subject only to the approval of all Lenders if any such increase
would cause the Aggregate Commitment to exceed $400,000,000. In addition,
within a reasonable time after the effective date of any increase, the Agent
shall, and is hereby authorized and directed to, revise Schedule "1"
reflecting such increase and shall distribute such revised Schedule to each
of the Lenders and the Borrower, whereupon such revised Schedule shall
replace the old Schedule and become part of this Agreement.
12.5. DISSEMINATION OF INFORMATION. The Borrower and each Borrowing
Subsidiary authorizes each Lender to disclose to any Participant or Purchaser
or any other Person acquiring an interest in the Loan Documents by operation
of law (each a "Transferee") and any prospective Transferee any and all
information in such Lender's possession concerning the creditworthiness of
the Borrower and its Subsidiaries; provided that each Transferee and
prospective Transferee agrees to be bound by the provisions of Section 9.12
of this Agreement.
12.6. TAX TREATMENT. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the
transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the provisions of Section
3.5(iv).
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ARTICLE XIII
NOTICES
13.1. NOTICES. Except as otherwise permitted by Section 2.16 with
respect to borrowing notices, all notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, facsimile
transmission or similar writing) and shall be given to such party: (a) in the
case of the Borrower or any Borrowing Subsidiary, at the address of the
Borrower or facsimile number for the Borrower set forth below its signature
on the signature pages hereof, (b) in the case of the Agent or any Lender, at
its address or facsimile number set forth on the signature pages hereof, (c)
in the case of the Collateral Agent, at its address or facsimile number set
forth on the signature pages of the Security Agreement or (d) in the case of
any party, such other address or facsimile number as such party may hereafter
specify for the purpose by notice to the Agent and the Borrower. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (ii) if given by mail,
72 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means,
when delivered at the address specified in this Section; provided that
notices to the Agent under Article II shall not be effective until received.
13.2. CHANGE OF ADDRESS. The Borrower, any Borrowing Subsidiary, the
Agent and any Lender may each change the address for service of notice upon
it by a notice in writing to the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Borrowing Subsidiaries, the Agent and the Lenders and each party has notified
the Agent by facsimile transmission or telephone, that it has taken such
action.
ARTICLE XV
CHOICE OF LAW, CONSENT TO JURISDICTION, WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING
A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2. CONSENT TO JURISDICTION. EACH OF THE BORROWER AND EACH
BORROWING SUBSIDIARY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN
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CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN
DOCUMENTS, AND EACH OF THE BORROWER AND EACH BORROWING SUBSIDIARY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY
LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER OR ANY BORROWING SUBSIDIARY
IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE
BORROWER OR ANY BORROWING SUBSIDIARY AGAINST THE AGENT OR ANY AFFILIATE OF
THE AGENT INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING
OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY
IN A COURT IN CHICAGO, ILLINOIS.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, EACH BORROWING SUBSIDIARY,
THE AGENT AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
{REST OF PAGE INTENTIONALLY LEFT BLANK}
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IN WITNESS WHEREOF, the Borrower, the Borrowing Subsidiaries, the
Lenders and the Agent have executed this Agreement as of the date first above
written.
PRISM MORTGAGE COMPANY, an Illinois
corporation
By: ______________________
Xxxxx X. Xxxxxx, Secretary
Prism Center
000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxx
PACIFIC GUARANTEE MORTGAGE
CORPORATION, a California corporation
By: ______________________
Xxxxx X. Xxxxxx, Secretary
000 Xxxxx Xxxxxxxxx, Xxxxx X
Xxxxx Xxxxxxxx, Xxxxxxxxxx
MORTGAGE MARKET, INC., an Oregon
corporation
By: _______________________
Xxxxx X. Xxxxxx, Secretary
0 Xxxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxx 00000
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POINTSOURCE FINANCIAL, L.L.C., an
Illinois limited liability company
By: Prism Mortgage Company, its Manager
By: _________________________
Xxxxx X. Xxxxxx, Secretary
Prism Center
000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000
INFINITI MORTGAGE, L.L.C., an
Illinois limited liability company
By: Prism Mortgage Company, its Manager
By: __________________________
Xxxxx X. Xxxxxx, Secretary
Prism Center
000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000
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THE FIRST NATIONAL BANK OF CHICAGO,
INDIVIDUALLY AND AS AGENT
By: ____________________________
Print Name: ____________________
Title: _________________________
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
THE BANK OF NEW YORK
By: _____________________________
Print Name: _____________________
Title: __________________________
Xxx Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxxx Dominus
COMERICA BANK
By: _____________________________
Print Name: _____________________
Title: __________________________
000 Xxxxxxxx Xxxxxx
XX 0000
Xxxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxx Xxxxxxx
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FIRST UNION NATIONAL BANK
By: _____________________________
Print Name: _____________________
Title: __________________________
000 X. Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxx
GUARANTY FEDERAL BANK, F.S.B.
By: _____________________________
Print Name: _____________________
Title: __________________________
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
HIBERNIA NATIONAL BANK
By: _____________________________
Print Name: _____________________
Title: __________________________
000 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxxxx Xxxxxxx
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LASALLE NATIONAL BANK
By: _____________________________
Print Name: _____________________
Title: __________________________
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxxx
MERCANTILE BANK
By: _____________________________
Print Name: _____________________
Title: __________________________
0000 X. 00xx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx Xxxxxx
U.S. BANK NATIONAL ASSOCIATION
By: _____________________________
Print Name: _____________________
Title: __________________________
U.S. Bank Place
000 Xxxxxx Xxxxxx Xxxxx
XXXX0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
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