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EXHIBIT 10.5 REVISED AND RESTATED AGREEMENT
THIS REVISED AND RESTATED AGREEMENT is entered into by and between
Carolina Investors, Inc. ("CII") and [ NAME ] and its subsidiary,
[ NAME ] (collectively "[NAME]").
RECITALS
1. The parties wish to revise and restate their Agreement
entered into in June of 1994.
2. [NAME] is in the business of making home equity loans and
providing credit underwriting to residents of [CONFIDENTIAL PORTION DELETED],
and such other states as the parties may agree to from time to time, secured
by first and second residential mortgages.
3. CII is willing to provide funds with which certain loans
originated by [NAME] ("Qualified Mortgages") may be closed and funded, with
each such loan to be immediately assigned to CII at closing, in consideration
of the funds so advanced by CII.
4. CII will attempt to package and sell blocks of Qualified
Mortgages except as set forth herein. [CONFIDENTIAL PORTION DELETED]
AGREEMENT
1. Funding of Loans. From time to time during the term of this
Agreement, [NAME] will submit Loan Approval Information and Funding Requests to
CII substantially in the form of the attached Exhibits A1 and A2 with respect
to Qualified Mortgages. Each such Funding Request will be submitted not less
than two (2) days prior to the proposed closing date or funding date, whichever
applies, of such Qualified Mortgage and CII will promptly advise [NAME] of its
approval or disapproval, which shall be within CII's sole discretion, of each
such Funding Request.
a. For purposes of this Agreement, the term "Qualified Mortgage"
means a first or second mortgage home loan which is made by
[NAME] and closed by [NAME]'s attorney in compliance with all
applicable federal, state and local statutes, rules and
regulations and which meets the underwriting criteria of this
Agreement set forth on Exhibit B, as such underwriting
criteria may be modified from time to time by the parties.
CII shall be entitled to audit [NAME]'s credit underwriting
standards and practices on a quarterly basis upon fifteen
(15) day prior written notice.
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b. Upon CII's approval of a Funding Request for a Qualified
Mortgage, [NAME] shall retain an approved attorney, listed on
the attached Exhibit C (such list of approved attorneys may
be amended and supplemented from time to time by mutual
agreement of the parties) to close such Qualified Mortgage
and shall direct such attorney as follows:
(i) [CONFIDENTIAL PORTION DELETED]
(ii) [CONFIDENTIAL PORTION DELETED]
(iii) [CONFIDENTIAL PORTION DELETED]
(iv) [CONFIDENTIAL PORTION DELETED]
(v) [CONFIDENTIAL PORTION DELETED]
(vi) [CONFIDENTIAL PORTION DELETED]
2. Sale of Loans. CII will package blocks of Qualified
Mortgages and sell them to institutional buyers on a monthly basis.
[CONFIDENTIAL PORTION DELETED]
a. [CONFIDENTIAL PORTION DELETED]
b. [CONFIDENTIAL PORTION DELETED]
c. [CONFIDENTIAL PORTION DELETED]
d. [CONFIDENTIAL PORTION DELETED]
2.1 Unsold Blocks of Qualified Mortgages. In the event that CII
chooses not to sell a block of Qualified Mortgages pursuant to 2. above, but
instead wishes to hold such block as part of its own portfolio, then
[CONFIDENTIAL PORTION DELETED]
a. [CONFIDENTIAL PORTION DELETED]
2.2 Certain [CONFIDENTIAL PORTION DELETED] Loans. (a) CII shall
purchase from [NAME] all "Logical To Book" loans, as defined below, at the
closing of each such loan. The purchase price of each such loan shall
[CONFIDENTIAL PORTION DELETED]
[CONFIDENTIAL PORTION DELETED]
b. During the time CII holds each such loan, the parties agree
that:
(i) [CONFIDENTIAL PORTION DELETED]
(ii) [CONFIDENTIAL PORTION DELETED]
c. CII's obligation to buy and [NAME]'s obligation to sell such
[CONFIDENTIAL PORTION DELETED] loans hereunder shall continue
for a term of one year and shall continue thereafter unless
terminated by either party by thirty (30) day prior written
notice to the other.
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d. As used herein, the term "Logical To Book" loan shall mean a
second mortgage residential loan which meets all of the
following criteria:
(i) First lien on a residential property (including
mobile homes) with a 50% loan-to-value or less;
(ii) Given by [NAME] in connection with the first mortgage
to which such loan is subordinate, which first
mortgage loan meets the definition of Qualified
Mortgage hereunder made and is sold to CII hereunder;
(iii) First or second mortgages made for sole purpose of
renovating or completing property so that a loan can
be made and sold;
(iv) Secured by second mortgage on borrower's principal
residence, which is a permanent structure and not a
mobile home;
(v) First Mortgage loan and associated [CONFIDENTIAL
PORTION DELETED] loan are both current and not in
default;
(vi) [CONFIDENTIAL PORTION DELETED]
3. Representations and Warranties.
a. CII hereby represents and warrants as follows:
(i) CII is a corporation duly organized, validly existing
and in good standing under the laws of South Carolina
and is qualified to do business in each other
jurisdiction in which such qualification is required
or where CII maintains an office or does substantial
business.
(ii) All corporate actions required to be taken by or on
behalf of CII to authorize its execution of this
Agreement and the performance of its obligations
hereunder have been fully and properly taken. The
execution and consummation of this Agreement and the
transactions contemplated hereby do not and will not
violate any corporate charter, bylaw, contract,
indenture, agreement, covenant or understanding by
which CII is bound or to which is a party, or any
applicable law or regulation; or require the consent
of any governmental authority (unless such consent
has been obtained).
(iii) CII is in compliance with all applicable laws and
regulations. There are no actions, suits or
proceedings pending, or, to the knowledge of CII,
threatened against CII in any court or before any
administrative or regulatory agency the adverse
outcome of which CII would have a material adverse
effect on the assets and business of CII.
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b. [NAME] hereby represents and warrants as follows:
(i) [ NAME ] is a corporation duly organized,
validly existing and in good standing under the laws
of [CONFIDENTIAL PORTION DELETED]and is qualified to
do business in [CONFIDENTIAL PORTION DELETED] and in
each other jurisdiction in which such qualification
is required or where it maintains an office or does
substantial business. [ NAME ] is a
corporation duly organized, validly existing and in
good standing under the laws of [CONFIDENTIAL PORTION
DELETED] and is qualified to do business in
[CONFIDENTIAL PORTION DELETED] and in each other
jurisdiction in which such qualification is required.
(ii) [NAME] possesses all necessary licenses and meets all
other legal requirements to lend funds giving rise to
Qualified Mortgages and to sell Qualified Mortgages
to CII.
(iii) All corporate actions required to be taken by or on
behalf of [NAME] to authorize its execution of this
Agreement and the performance of its obligations
hereunder have been fully and properly taken. The
execution and consummation of this Agreement and the
Qualified Mortgages contemplated hereby do not and
will not violate any corporate charter, bylaw,
contract, indenture, agreement, covenant or
understanding by which [NAME] is bound or to which is
a party, or any applicable law or regulation; or
require the consent of any governmental authority
(unless such consent has been obtained).
(iv) [NAME] is in compliance with all applicable laws and
regulations. There are no actions, suits or
proceedings pending, or, to the knowledge of [NAME],
threatened against [NAME] in any court or before any
administrative or regulatory agency the adverse
outcome of which [NAME] would have a material
adverse effect on the assets and business of [NAME].
(v) No fee or other charges shall be made by [NAME] with
respect to any loan hereunder except for fees which
are reasonable and customary in the locality for the
services provided and which are imposed in full
compliance with all applicable federal, state and
local laws and regulations.
(vi) [CONFIDENTIAL PORTION DELETED]
(vii) [CONFIDENTIAL PORTION DELETED]
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(viii) During the term of this Agreement, [NAME] shall not
[CONFIDENTIAL PORTION DELETED]
(c) Representations and warranties with respect to Qualified
Mortgages. At the time of transfer and conveyance of each
Qualified Mortgage to CII, [NAME] hereby represents and
warrants to CII (which representations and warranties shall
survive the purchase and shall continue in full force and
effect until such Qualified Mortgages are paid in full) with
respect to each such Qualified Mortgage, as follows:
(i) [NAME] is the sole and lawful owner of the Qualified
Mortgage and CII will receive good and marketable
title thereto free and clear of any and all liens,
encumbrances, claims and rights of any party
whatsoever.
(ii) No previous transfer or assignment of the Qualified
Mortgage will be effective and no other party has any
option of first refusal or other arrangement to
acquire, directly or indirectly, the Qualified
Mortgage.
(iii) All Qualified Mortgage Loan Documents (i) conform to
all applicable laws and regulations; (ii) are true,
valid, genuine and complete in all respects; (iii)
are enforceable against borrower in accordance with
their terms; and (iv) are subject to no defense,
claim or disability, counterclaim, offset or pending
bankruptcy. No defense, claim, disability,
counterclaim, or offset as described above will arise
against CII by virtue of the sale of the Qualified
Mortgage or assignment of the Qualified Mortgage
Documents under this Agreement. No suit, foreclosure
or any other legal action or preceding has been
brought by [NAME] in accordance with its handling of
the Qualified Mortgages.
(iv) All Qualified Mortgage Loan Documents are completed
in compliance with all applicable laws and
regulations, and all computations made with respect
to any Qualified Mortgages are accurate.
(v) Each action taken by [NAME] with respect to the
Qualified Mortgage and each Note, loan application,
agreement, form, letter, notice, statement, or other
materials used by [NAME] in connection with the
origination, servicing and sale of each such
Qualified Mortgage, complies in all material respects
with all applicable laws and regulations, including
without limitation: the Consumer Credit Protection
Act and Regulation Z under Title I thereof; laws
respecting obtaining and/or using credit reports and
other information concerning individuals (including,
without limitation, the Fair Credit Reporting Act);
the Equal Credit Opportunity Act and Regulation B
thereunder; laws relating to unfair, deceptive, or
unconscionable acts and practices; laws governing the
sale of insurance
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(including, without limitation, credit life
insurance); federal laws and regulations relating to
such Qualified Mortgages (including without
limitation, the Real Estate Settlement Practices Act,
as amended); the Flood Disaster Protection Act; and
all applicable federal, state and local statutes,
regulations, ordinances, and administrative rulings.
(vi) There is due and owing on the Qualified Mortgage the
amount represented by [NAME] to be due thereon.
(vii) With respect to each Qualified Mortgage which is a
deed of trust, a trustee, duly qualified under
applicable law to serve as such, has been properly
designated, serving and named in such deed of trust.
Except in connection with a trustee's sale after
default by the obligor, no fees or expenses are
payable by [NAME] to the trustee under any deed of
trust.
(viii) The Qualified Mortgage has not arisen from a renewal
granted for the purpose of concealing from CII a
delinquency, and no collateral purporting to secure
the Note has been repossessed or disposed of or
foreclosed against by [NAME]. No officer, director,
partner, employee or agent of [NAME] (or of any
assignor of the Qualified Mortgage or of any broker
referring the Borrower under the Qualified Mortgage),
nor the [NAME] has received any direct or indirect
benefit, fee, commission or other consideration or
value from any Borrower or from anyone else in
connection with the Qualified Mortgage (other than as
disclosed to CII in writing); nor has any such person
made, directly or indirectly, any payment on the Note
or on any of its officers, directors, partners,
employees or agents has made any agreement with any
Borrower providing for any variation of the interest
rate, schedules of payment or other terms and
conditions of the Note; and neither [NAME] or any of
its officers, directors, partners, employees or
agents has received a request for approval of, or
notice of any proposed assumption, loss draft or
payoff of, the Qualified Mortgage.
(ix) A lender's title insurance policy regarding each
Qualified Mortgage became effective as of the
origination of such Qualified Mortgage, is, and shall
be, valid and is, and shall remain, in full force and
effect; such title insurance shows whether any prior
lien secures an open-end obligation requiring future
advances; any such insurance policy has been issued
by a title insurer qualified to do business in the
state in which the real property subject to a
Qualified Mortgage is located, insuring the priority
of the lien of the loan in the original principal
amount of such loan, which policy is in the then
current American Land Title Association or a state
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land title association form customarily used in the
state in which the insured property is located.
(x) The real property under each Qualified Mortgage is
insured, under standard homeowner's hazard and
casualty insurance policies, with appropriate
mortgagee clauses, for an amount equal to the loan
amount or more.
(xi) All real estate appraisals made in connection with
each Qualified Mortgage shall have been performed in
accordance with industry standards in the appraising
industry in the area where the appraised property is
located. Any disputes regarding appraisal accuracy
shall be submitted to an impartial appraiser,
appointed by CII, whose judgment shall be
determinative as to the accuracy of any appraisal.
(xii) There shall be no homestead or other exemption
available to the obligor of any Qualified Mortgage
which would interfere with the right to sell at a
trustee's sale or the right to foreclosure.
(xiii) There shall be no holder in due course claim or any
claim against any third party available to the
obligor of any Qualified Mortgage which would
interfere with the Mortgagee's right to enforce the
Qualified Mortgage, to sell at a trustee's sale, or
the right to foreclosure.
(xiv) [NAME] shall be responsible for the misfeasance,
malfeasance or fraudulent acts of its employees or
agents.
(xv) The Qualified Mortgage is secured by a valid and
subsisting first or second priority lien or security
interest on the property as reflected in the Loan
Documents, and such lien or security interest in or
on Borrower's real and personal property
collateralizing the Note (including fixtures) is
valid and has been properly filed, recorded (or
received by the title insurance company for
recording) or otherwise perfected in accordance with
applicable law; and the Qualified Mortgage is insured
by a mortgage title insurance policy (or commitment
for same, the conditions having been satisfied).
(xvi) Each of the above representations and warranties (a)
applies to any and all Qualified Mortgages sold to
CII hereunder; (b) is for the benefit of CII and each
of its successors and assigns; (c) continues in full
force and effect for so long as the Note remains
outstanding and for such time as CII is subject to
any risk of loss or liability as to any Qualified
Mortgage purchased from [NAME] hereunder; (d) is in
addition to any other specific warranties contained
elsewhere herein; and (e) is made by [NAME] on
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its behalf and on the behalf of any third party
originator of any Qualified Mortgage which may be
sold hereunder in accordance with Section 2.
4. Limited Power of Attorney.
a. [NAME] hereby makes, constitutes and appoints CII, its
successors and assigns, as [NAME]'s true and lawful
attorneys, with full power substitution in name of [NAME] or
otherwise, whether in relation to real, personal, tangible or
intangible property, to do any and all of the following:
(i) To xxxx, demand, xxx for, receive, collect, sign,
endorse, assign or comprise any and all notes,
checks, money orders or monies due on any Qualified
Mortgages sold to CII, and to receive, sign, endorse,
or assign any orders, certificates, insurance
policies and all benefits under any other instruments
or documents as may from time to time be necessary or
appropriate to accomplish the sales and transfers
provided for by this Agreement;
(ii) To complete, execute and record any assignment or
other document, including financing statements
covering any such collateral;
(iii) To exercise or perform any act, power or duty that
[NAME] has or would have in connection with the
Qualified Mortgages purchased by CII, or which are
reasonable in order to protect CII's interest in the
collateral securing said Qualified Mortgage.
b. [NAME] agrees that the foregoing powers are coupled with an
interest and are irrevocable notwithstanding [NAME]'s
dissolution, merger, consolidation or other corporate
reorganization or structural change or any other reason
whatsoever.
c. [NAME] will, at CII's reasonable request from time to time,
execute one or more appropriate separate instruments
evidencing the powers granted CII in this Section, in form
suitable for recordation.
5. Opinion of Counsel; Certified Resolutions.
a. Prior to the time that CII first purchases any Qualified
Mortgages from [NAME] under this Agreement, [NAME] shall
provide to CII an Opinion of Counsel to [NAME], in form and
substance satisfactory to CII, stating that as of the date of
such Opinion:
(i) [NAME] (a) is a corporation duly organized, validly
existing, and in good standing under the laws of the
state of its incorporation or organization; (b) has
the requisite power and authority and the legal right
to conduct its
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business as now and heretofore conducted; (c) has all
necessary licenses, permits, consents or approvals
from or by, has made all necessary filings with, and
has given all necessary notices to, all governmental
authorities having jurisdiction, to the extent
required to conduct its business as now conducted in
all locations where it conducts business, and to the
extent necessary to assure the enforceability of each
Note and Mortgage in any location in which any
mortgaged property is located; and (d) is in
compliance with its certificate of incorporation and
bylaws or other governing documents.
(ii) The execution, delivery and performance of this
Agreement and all instruments and documents delivered
or to be delivered by [NAME] pursuant to this
Agreement, and the origination and sale by [NAME] of
each Qualified Mortgage hereunder (a) are within
[NAME]'s corporate power and authority; (b) have been
duly authorized by all necessary or proper corporate
action; (c) are not in contravention of any provision
of [NAME]'s certificate of incorporation or bylaws;
(d) will not violate any law or regulation or any
order or decree of any court or governmental
authority; (e) will not conflict with or result in
the breach of, or constitute a default with respect
to, any agreement or other instrument to which [NAME]
is a party or by which [NAME] of any of its property
is bound; and (f) do not require any filing or
registration with, or the consent or approval of, any
governmental authority or any other person which has
not been made or obtained previously.
(iii) This Agreement has been duly executed and delivered
by [NAME], and is a valid, legal and binding
obligation of [NAME] enforceable in accordance with
its terms except as such enforcement may be limited
by bankruptcy, insolvency, reorganization,
receivership, moratorium or other laws relating to or
affecting the rights of creditors generally, and by
general principles of equity (regardless of whether
such enforcement is considered in a proceeding in
equity or at law).
(iv) No action, claim, or proceeding is now pending or, to
the knowledge of counsel, threatened against [NAME]
at law, in equity or otherwise, before any court,
board, commission, agency or instrumentality of any
federal, state, or local government or of any agency
or subdivision thereof or before any arbitrator or
panel of arbitrators which, if adversely determined,
(a) would result in a liability of [NAME] in an
amount greater than $10,000, (b) questions the
validity of any Note or Security Instrument, or (c)
could, wither individually or in the aggregate,
result in any material adverse change in the
business, operations, property or financial or other
condition of [NAME].
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b. Certified copies of any resolution or document of consent of
the board of directors or other appropriate governing body of
[NAME] authorizing the execution of this Agreement and the
performance of its obligations hereunder, and evidencing the
authority of the executing officer(s) to execute this
Agreement and all other documents, instruments and
certificates related hereto and to the transactions
contemplated hereunder.
6. Meetings and Financial Statement. The principal officers of
CII and [NAME] agree to meet on a quarterly or more frequent basis to discuss
all information pertinent to this Agreement, its implementation and
continuation. Each party will provide the other with copies of its quarterly
financial statements, including balance sheet, income statement and statement
of changes in financial position, all within 30 days of the close of each
fiscal quarter.
7. Term of Agreement; Damages For [ ] Termination or
Breach.
a. The term of this Agreement shall be [CONFIDENTIAL PORTION
DELETED]
b. If either party causes a [______] Termination of this
Agreement, as defined below or fails to cure a material
breach of its obligations hereunder within 30 days after
written demand by the other party, then the other party (the
"Injured Party") shall be entitled to [CONFIDENTIAL PORTION
DELETED]
c. A [______] Termination shall include any termination other
than:
(i) Termination by mutual written agreement of the
parties;
(ii) Termination by CII in the event that [CONFIDENTIAL
PORTION DELETED]
(iii) Termination by [CONFIDENTIAL PORTION DELETED]
8. Notices. Any notice or demand which is required or permitted
to be given by a provision of this Agreement shall be deemed to have been
sufficiently given if either served personally or sent by prepaid first class,
registered or certified mail, addressed to the party at its address set forth
below:
Buyer: { NAME }
Carolina Investors, Inc.
000 Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxx, XX 00000
Seller: [__________________]
[ CONFIDENTIAL ]
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[ PORTION DELETED ]
[__________________]
Either party may change its address by written notice to the other.
9. Entire Agreement. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and there
are no representations, inducements or other provisions other than those
expressed in writing herein. All changes, additions or deletions hereto must
be made in writing and signed by each of the parties hereto.
10. No Agency. This Agreement and transactions entered into
pursuant hereto shall not create between the parties a relationship agency,
legal representation, joint venture, partnership or employment, and the parties
agree that neither party is in any way authorized to make any contract,
agreement, warranty or representation, or to create any obligations, express or
implied, on behalf of the others.
11. Survival of Provisions. All of the covenants, agreements,
representations and warranties made herein by the parties hereto shall survive
and continue in effect after the termination of the Agreement or the
consummation of the transactions contemplated hereby. This Agreement may be
executed in counterparts, all of which, taken together, shall constitute one
and the same instrument.
12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of South Carolina and any
applicable federal laws. In event of litigation, parties irrevocably designate
venue as Xxxxxxx County, South Carolina.
Carolina Investors, Inc.
By:______________________________
_____________________________, CEO
Attest:
________________________
Secretary
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[ NAME ]
------------------
By:
-------------------------------
-------------------------------
(Title)
Attest: (Corporate Seal)
------------------------------
Secretary
{ NAME }
--------------------------------
By:
-------------------------------
-------------------------------
(Title)
Attest: (Corporate Seal)
------------------------------
Secretary
Direct & Beneficial Owners of [NAME]
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EXHIBITS
A1. Loan Approval Information
A2. Funding Request
B. Underwriting Criteria
C. Approved Attorneys
D. Loan Documentation
E. Closing Attorney Certificate
F. Assignment of Qualified Mortgage
G. Owners of [NAME]
