1
EXHIBIT 4.2
$200,000,000
SECOND AMENDED AND RESTATED
SECURED REVOLVING/TERM CREDIT AGREEMENT
Dated as of July 31, 1996
among
RESOURCE BANCSHARES MORTGAGE GROUP, INC.
THE BANKS LISTED ON THE SIGNATURE PAGES HEREOF
BANK ONE, TEXAS, NATIONAL ASSOCIATION
FIRST BANK NATIONAL ASSOCIATION
NATIONSBANK OF TEXAS, N.A.
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
as Co-Agents
and
THE BANK OF NEW YORK,
as Agent and Collateral Agent
2
TABLE OF CONTENTS
Page
----
ARTICLE 1
CREDIT FACILITY
1.01. Commitment to Lend ................................................ 2
(a) HFI Loans .................................................... 2
(b) HFS Loans .................................................... 2
(c) Receivables Loans ............................................ 2
(d) Type of Loans ............................................ 2
1.02. Manner of Borrowing ............................................... 2
1.03. Interest ......................................................... 4
(a) (i) Rates .................................................. 4
(ii) Balance Funded Rate .................................... 4
(iii) Post-Default Rate ...................................... 5
(b) Payment ...................................................... 5
(c) Determination of LIBOR Rate .................................. 6
(d) Interest Billing Statement .................................. 6
(e) Conversion and Continuation .................................. 6
(f) Maximum Interest Rate ........................................ 7
1.04. Repayment ......................................................... 8
1.05. Prepayments ....................................................... 8
(a) Optional Prepayments ........................................ 8
(b) Borrowing Base Mandatory Prepayments ........................ 9
(c) Servicing Rights Disposition Mandatory Prepayments .......... 9
(d) Application to Types of Loans ................................ 9
(e) Application to Installments ................................ 10
(f) Reborrowing ................................................ 10
1.06. Limitation on Types of Loans .................................... 10
1.07. Change in Commitments ........................................... 10
(a) Reduction of Commitments .................................. 10
(b) Increase in HFS Commitments ................................ 10
3
1.08. Fees ............................................................ 11
(a) Commitment Fees ............................................ 11
(b) Upfront Fees ............................................... 11
(c) Fees Non-Refundable ........................................ 12
1.09. Computation of Interest and Fees ................................ 12
1.10. Evidence of Indebtedness ........................................ 12
1.11. Payments by the Borrower ........................................ 12
(a) Time, Place and Manner ..................................... 12
(b) No Reductions .............................................. 13
(c) Authorization to Charge Accounts .......................... 13
(d) Extension of Payment Dates ................................ 13
1.12. Distribution of Payments by the Agent ........................... 13
1.13. Taxes ........................................................... 14
(a) Taxes Payable by the Borrower .............................. 14
(b) Taxes Payable by the Agent or any Bank .................... 15
(c) Credits and Deductions .................................... 15
(d) Exemption from U.S. Withholding and Backup
Withholding Taxes .......................................... 15
1.14. Pro Rata Treatment ............................................. 16
ARTICLE 2
CONDITIONS TO EFFECTIVENESS; LOANS
2.01. Conditions to Effectiveness ..................................... 17
2.02. Conditions to Each Loan ......................................... 19
ARTICLE 3
CERTAIN REPRESENTATIONS AND WARRANTIES
3.01. Security Interest ............................................... 21
3.02. Questionnaire ................................................... 21
ARTICLE 4
CERTAIN COVENANTS
4.01. Use of Proceeds ................................................. 21
(a) HFI Loans .................................................. 21
(b) HFS Loans .................................................. 21
(c) Receivables Loans .......................................... 21
4.02. Further Documents ............................................... 21
4
ARTICLE 5
INFORMATION
5.01. Serviced Mortgage Loan Report, Borrowing Base
Certificate and Appraisal ....................................... 22
(a) Reports .................................................... 22
(b) Notice of Defaults, Material Adverse Changes and
Other Matters .............................................. 22
5.02. Agent to Distribute ............................................. 23
ARTICLE 6
DEFAULT
6.01. Events of Default ............................................... 23
(a) Payments ................................................... 23
(b) Representations and Warranties ............................. 23
(c) Performance or Observance .................................. 23
(d) Payment of Other Indebtedness .............................. 24
(e) Other Contracts ............................................ 24
(f) Change in Business, etc. ................................... 25
(g) Bankruptcy ................................................. 25
(h) Judgments and Orders ....................................... 25
(i) Termination Events ......................................... 26
(j) Illegality and Invalidity .................................. 26
6.02. Remedies Upon Event of Default .................................. 26
ARTICLE 7
ADDITIONAL CREDIT FACILITY PROVISIONS
7.01. Mandatory Suspension and Conversion of LIBOR Rate Loans ......... 27
7.02. Regulatory Changes .............................................. 28
7.03. Capital Requirements ............................................ 29
7.04. Funding Losses .................................................. 29
7.05. Certain Determinations .......................................... 29
7.06. Change of Lending Office ........................................ 30
7.07. Removal of a Bank ............................................... 30
ARTICLE 8
5
THE AGENT
8.01. Appointment and Powers .......................................... 31
8.02. Limitation on Agent's Liability ................................. 31
8.03. Defaults ........................................................ 32
8.04. Rights as a Bank ................................................ 32
8.05. Indemnification ................................................. 32
8.06. Non Reliance on Agent and Other Banks ........................... 32
8.07. Execution of Security Agreement by Agent ........................ 33
8.08. Resignation of the Agent ........................................ 33
ARTICLE 9
MISCELLANEOUS
9.01. Notices and Deliveries .......................................... 33
(a) Notices and Materials Other than Collateral ................ 33
(i) Manner of Delivery ................................... 33
(ii) Addresses ............................................ 34
(iii) Effectiveness ........................................ 35
(iv) Reasonable Notice .................................... 36
(b) Collateral ................................................. 36
9.02. Expenses; Indemnification ....................................... 36
9.03. Amounts Payable Due Upon Request for Payment .................... 37
9.04. Remedies of the Essence ......................................... 38
9.05. Rights Cumulative ............................................... 38
9.06. Disclosures ..................................................... 38
9.07. Amendments; Waivers ............................................. 38
9.08. Set Off; Suspension of Payment and Performance .................. 39
9.09. Sharing of Recoveries ........................................... 39
9.10. Assignments and Participations .................................. 40
(a) Assignments ................................................ 40
(b) Participations ............................................. 41
9.11. GOVERNING LAW ................................................... 42
9.12. Judicial Proceedings; Waiver of Jury Trial ...................... 42
9.13. LIMITATION OF LIABILITY ......................................... 43
9.14. Severability of Provisions ...................................... 43
9.15. Counterparts .................................................... 43
9.16. Survival of Obligations ......................................... 43
9.17. Entire Agreement ................................................ 43
9.18. Successors and Assigns .......................................... 43
9.19. Registered Notes ................................................ 43
9.20. No Novation ..................................................... 44
6
SECOND AMENDED AND RESTATED
SECURED REVOLVING/TERM CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED SECURED REVOLVING/TERM CREDIT
AGREEMENT, dated as of July 31, 1996, among Resource Bancshares Mortgage Group,
Inc., a Delaware corporation, as Borrower, the Banks listed on the signature
pages hereof, Bank One, Texas, National Association, First Bank National
Association, NationsBank of Texas, N.A. and Texas Commerce Bank National
Association, as Co-Agents, and The Bank of New York, as Agent and Collateral
Agent.
WHEREAS, the Borrower, the Banks listed on the signature pages
thereof and The Bank of New York, as Agent and Collateral Agent thereunder were
parties to an Amended and Restated Secured Revolving/Term Credit Agreement,
dated as of September 29, 1995, which Amended and Restated Secured
Revolving/Term Credit Agreement was amended by Amendment Xx. 0, xxxxx xx xx
Xxxxx 00, 0000 (xx amended, the "Existing Revolving/Term Credit Agreement"); and
WHEREAS, the Borrower, the Banks listed on the signature pages
thereof and The Bank of New York, as Agent and Collateral Agent thereunder were
parties to a Receivables Secured Revolving Credit Agreement dated as of July
19, 1995, which Receivables Secured Revolving Credit Agreement was amended by
(i) Amendment No. 1 dated as of September 29, 1995 and (ii) Amendment No. 2
dated as of March 29, 1996 (as amended, the "Existing Receivables Secured
Credit Agreement"); and
WHEREAS, the parties hereto wish to amend and restate the
Existing Revolving/Term Credit Agreement and the Existing Receivables Secured
Credit Agreement;
NOW, THEREFORE, the Borrower, the Banks listed on the
signature pages hereof, The Bank of New York, as Agent and Collateral Agent and
Bank One, Texas, National Association, First Bank National Association,
NationsBank of Texas, N.A. and Texas Commerce Bank National Association, as
Co-Agents, agree that, upon the Effective Date, the Existing Revolving/Term
Credit
7
Agreement and Existing Receivables Secured Credit Agreement are hereby amended
and restated in their entirety as follows (with certain terms used herein being
defined in Article 10 and Annex B):
ARTICLE 1
CREDIT FACILITY
Section 1.01. Commitment to Lend. (a) HFI Loans. Upon the
terms and subject to the conditions of this Agreement, each Bank agrees to
make, from time to time during the period from the Effective Date through the
Termination Date, one or more HFI Loans to the Borrower, in an aggregate unpaid
principal amount, for all such HFI Loans including the HFI Loans then to be
made, not exceeding at any time the lesser of (i) such Bank's HFI Commitment at
such time and (ii) together with the aggregate unpaid principal amount of the
HFI Loans of the other Banks, the HFI Borrowing Base. The aggregate amount of
the HFI Commitments on the Effective Date is $80,000,000.
(b) HFS Loans. Upon the terms and subject to the conditions
of this Agreement, each Bank agrees to make, from time to time during the
period from the Effective Date through the Termination Date, one or more HFS
Loans to the Borrower, in an aggregate unpaid principal amount, for all such
HFS Loans including the HFS Loans then to be made, not exceeding at any time
the lesser of (i) such Bank's HFS Commitment at such time and (ii) together
with the aggregate unpaid principal amount of the HFS Loans of the other Banks,
the HFS Borrowing Base. The aggregate amount of the HFS Commitments on the
Effective Date is $70,000,000.
(c) Receivables Loans. Upon the terms and subject to the
conditions of this Agreement, each Bank agrees to make, from time to time
during the period from the Effective Date through the Termination Date, one or
more Receivables Loans to the Borrower, in an aggregate unpaid principal
amount, for all such Receivables Loans including the Receivables Loans then to
be made, not exceeding at any time the lesser of (i) such Bank's Receivables
Commitment at such time and (ii) together with the aggregate unpaid principal
amount of the Receivables Loans of the other Banks, the Receivables Borrowing
Base. The aggregate
-2-
8
amount of the Receivables Commitments on the Effective Date is $50,000,000.
(d) Type of Loans. Subject to Section 1.06 and the other
terms and conditions of this Agreement, the Loans may, at the option of the
Borrower, be made as, and from time to time continued as or converted into,
Base Rate, Federal Funds Rate or LIBOR Rate Loans of any permitted Type, or any
combination thereof.
Section 1.02. Manner of Borrowing. (a) The Borrower shall
give the Agent notice (which shall be irrevocable) no later than 12:00 noon
(New York time) on, in the case of Base Rate and Federal Funds Rate Loans, the
Business Day of, and, in the case of LIBOR Rate Loans, the third LIBOR Business
Day before, the requested date for the making of such Loans. Each such notice
shall be in the form of Schedule 1.02 and shall specify (i) the requested date
for the making of the requested Loans, which shall be, in the case of Base Rate
and Federal Funds Rate Loans, a Business Day and, in the case of LIBOR Rate
Loans, a LIBOR Business Day, (ii) the Kind or Kinds and Type or Types of Loans
requested and (iii) the amount of each such Loan, the aggregate of which
amounts for each Kind and Type of Loan requested by the Borrower shall be not
less than the lesser of $500,000 and the maximum amount of that Kind of Loan
that can then be borrowed by the Borrower hereunder. Upon receipt of any such
notice, the Agent shall promptly notify each Bank of the contents thereof and
of the amount, Kind and Type of each Loan to be made by such Bank on the
requested date specified therein.
(b) Not later than 1:00 p.m. (New York time) on each
requested date for the making of Loans, each Bank shall, if it has received the
notice from the Agent contemplated by Section 1.02(a) in a timely fashion, make
available to the Agent, in Dollars in funds immediately available to the Agent
at the Agent's Office, the Loans to be made by such Bank on such date. Any
Bank's failure to make any Loan to be made by it on the requested date therefor
shall not relieve any other Bank of its obligation to make any Loan to be made
by such other Bank on such date, but such other Bank shall not be liable for
such failure.
-3-
9
(c) Unless the Agent shall have received notice from a Bank
prior to 1:00 p.m. (New York time) on the requested date, if such Bank has
received the notice from the Agent contemplated by Section 1.02(a) in a timely
fashion, for the making of any Loans that such Bank will not make available to
the Agent the Loans requested to be made by such Bank on such date, the Agent
may assume that such Bank has made such Loans available to the Agent on such
date in accordance with Section 1.02(b) and the Agent in its sole discretion
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount on behalf of such Bank. If and to the extent such
Bank shall not have so made available to the Agent the Loans requested to be
made by such Bank on such date and the Agent shall have so made available to
the Borrower a corresponding amount on behalf of such Bank, such Bank shall, on
demand, pay to the Agent such corresponding amount together with interest
thereon, at the Federal Funds Rate, for each day from the date such amount
shall have been so made available by the Agent to the Borrower until the date
such amount shall have been repaid to the Agent. If such Bank does not pay
such corresponding amount promptly upon the Agent's demand therefor, the Agent
shall promptly notify the Borrower, and the Borrower shall immediately repay
such corresponding amount to the Agent together with accrued interest thereon
at the applicable rate or rates provided in Section 1.03(a).
(d) All Loans made available to the Agent in accordance with
Section 1.02(b) shall be disbursed by the Agent not later than 2:00 p.m. (New
York time) on the requested date therefor in Dollars in funds immediately
available to the Borrower by credit to an account maintained in the Borrower's
name at the Agent's Office or in such other manner as may have been specified
in the applicable notice and as shall be acceptable to the Agent.
Section 1.03. Interest. (a) (i) Rates. Each Loan shall
bear interest on the outstanding principal amount thereof until due at a rate
per annum equal to:
(A) so long as it is an HFI Loan that is (1) a LIBOR Loan, the
applicable Adjusted LIBOR Rate, subject to Section 1.03(a)(ii), plus
2.00% or (2) a Base Rate Loan, (aa) to the extent that it is Balance
Funded, 2.00%, and (bb) to the
-4-
10
extent that it is not Balance Funded, the Base Rate as then in effect
plus 0.875%;
(B) so long as it is an HFS Loan that is (1) a LIBOR Loan, the
applicable Adjusted LIBOR Rate, subject to Section 1.03(a)(ii), plus
1.50% or (2) a Federal Funds Rate Loan, (aa) to the extent that it is
Balance Funded, 1.625%, and (bb) to the extent that it is not Balance
Funded, the Federal Funds Rate as then in effect plus 1.625%; and
(C) so long as it is a Receivables Loan that is (1) a LIBOR
Loan, the applicable Adjusted LIBOR Rate, subject to Section
1.03(a)(ii), plus 1.25% or (2) a Federal Funds Rate Loan, (aa) to the
extent that it is Balance Funded, 1.375%, and (bb) to the extent that
it is not Balance Funded, the Federal Funds Rate as then in effect
plus 1.375%;
provided that so long as the Borrower's long term unsecured senior debt shall
be rated either (a) BBB- or better by Standard & Poor's Ratings Group or (b)
Baa3 or better by Xxxxx'x Investors Service, Inc., each Loan shall bear
interest on the outstanding principal amount thereof at the rate otherwise
applicable pursuant to this Section 1.03(a) less 0.25%.
(ii) Balance Funded Rate. Each Bank may offer to
the Borrower to have all or a portion of such Bank's LIBOR Rate Loans bear
interest at the Balance Funded Rate in lieu of the interest rate set forth in
Section 1.03(a)(i)(A)(1), 1.03(a)(i)(B)(1) or 1.03(a)(i)(C)(1) above, as the
case may be. Subject to the provisions of Section 7.01(a)(iii), such offer
shall be continuously effective from the time made until withdrawn by such Bank
upon at least five Business Days' prior written notice to the Borrower. The
Borrower may elect, by written notice to a Bank that has an offer outstanding
pursuant to the preceding sentence given no later than three Business Days
before the end of each calendar month, to have a portion (the "Balance-Funded
Amount") of the principal amount of the outstanding LIBOR Rate Loans of such
Bank during the next succeeding calendar month bear interest at the Balance
Funded Rate, and in such event the Borrower shall be deemed to have indicated
its intent to maintain or have maintained with such Bank (or with a financial
institution designated by such Bank and acceptable to the Borrower) during such
month Allocated Qualifying Balances in an amount not less than the Balance
Funded
-5-
11
Amount. The Bank and such Borrower will reach a separate agreement as to the
amount, if any, of costs of the type referred to in Section 7.04 that shall be
payable by the Borrower to such Bank. In the event that the Borrower elects to
have all or a portion of any Bank's LIBOR Rate Loans bear interest at the
Balance Funded Rate, such Bank and the Borrower shall reallocate and settle any
differences between the interest invoiced by the Agent for such month and the
interest due at the Balance Funded Rate. If the Qualifying Balances maintained
by the Borrower with such Bank (or with a financial institution designated as
set forth above) during such month are less than the Balance-Funded Amount, a
deficiency fee (a "Balance Deficiency Fee") shall be payable to such Bank by
the Borrower. The Balance Deficiency Fee for any month shall be calculated by
multiplying the amount by which the Balance-Funded Amount for such month
exceeds the average Qualifying Balances for such month (the "Balance
Deficiency"), to the extent such Balance Deficiency is applicable to HFI Loans,
by the Base Rate plus 0.875%, to the extent such Balance Deficiency is
applicable to HFS Loans, by the Federal Funds Rate plus 1.625% and, to the
extent such Balance Deficiency is applicable to Receivable Loans, by the
Federal Funds Rate plus 1.375%, and for this purpose, a Balance Deficiency
shall be deemed applicable, first, to Receivable Loans, second, to HFS Loans
and third, to HFI Loans. The Borrower shall pay any Balance Deficiency Fee to
such Bank within five Business Days after notice has been delivered by the
Bank. Each LIBOR Rate Loan that bears interest at a reduced rate pursuant to
this Section 1.03(a)(ii) shall continue to be classified as a LIBOR Rate Loan
for all purposes of this Agreement and the Notes except this Section
1.03(a)(ii) and Section 7.04. Qualifying Balances used for purposes of
determining whether Base Rate or Federal Funds Rate Loans are Balance Funded
Base Rate or Federal Funds Rate Loans pursuant to Section 1.03(a)(i) shall not
be considered Qualifying Balances for purposes of this Section 1.03(a)(ii) and
Qualifying Balances used for purposes of this Section 1.03(a)(ii) shall not be
considered Qualifying Balances of the Borrower for purposes of any other
Section.
(iii) Post-Default Rate. If all or any part of a
Loan or any other amount due and payable under the Loan Documents is not paid
when due (whether at maturity, by reason of notice of prepayment or
acceleration or otherwise), such unpaid amount shall, to the maximum extent
permitted by Applicable Law, bear interest for each day during the period from
the date such amount
-6-
12
became so due until it shall be paid in full (whether before or after judgment)
at a rate per annum equal to the applicable Post-Default Rate.
(b) Payment. Interest shall be payable by the Borrower (i)
in the case of Base Rate and Federal Funds Rate Loans, on the second Business
Day after receipt of the billing statement referred to in Section 1.03(d), (ii)
in the case of LIBOR Rate Loans, on the last day of each applicable Interest
Period (and, if an Interest Period is longer than one month, at intervals of
one month after the first day of such Interest Period) and (iii) in the case of
any Loan, when such Loan shall be due (whether at maturity, by reason of notice
of prepayment or acceleration or otherwise) or converted, but only to the
extent then accrued on the amount then so due or converted. Any interest
accruing at the Post-Default Rate shall be payable by the Borrower on demand.
(c) Determination of LIBOR Rate. The Agent, upon determining
the Adjusted LIBOR Rate for each Interest Period, shall promptly notify the
Borrower and the Banks thereof by telephone (confirmed in writing) or in
writing, and such determination by the Agent shall be conclusive and binding
absent manifest error.
(d) Interest Billing Statement. The Agent shall deliver to
the Borrower and each Bank an interest billing statement on or before the third
Business Day of each month, which interest billing statement shall set forth
the interest accrued with respect to Base Rate or Federal Funds Rate Loans from
and including the first day of the preceding month through the last day of such
month computed on the assumption that, during such month, none of such Bank's
Base Rate or Federal Funds Rate Loans bore interest at the Balance Funded Rate
and none of such Bank's LIBOR Rate Loans bore interest pursuant to Section
1.03(a)(ii) at the Balance Funded Rate; provided that any failure or delay in
delivering such interest billing statement or any inaccuracy therein shall not
affect the Borrower's obligation to pay interest in accordance with the terms
of this Agreement. In the event that all or any portion of a Bank's Loans bore
interest during any month at interest rates different from those assumed in the
Agent's billing statement for that month, such Bank and the Borrower shall
reallocate and settle any difference between the interest invoiced by the Agent
for such month and the actual
-7-
13
interest due for such month and the Borrower shall notify the Agent thereof.
(e) Conversion and Continuation. (i) All or any part of the
principal amount of Loans of any Type of any Kind may, on any Business Day, be
converted into any other Type or Types of the same Kind of Loans, except that
(A) LIBOR Rate Loans may be converted only on the last day of an applicable
Interest Period and (B) Base Rate or Federal Funds Rate Loans may be converted
into LIBOR Rate Loans only on a LIBOR Business Day. Notwithstanding any other
provisions in this Agreement a Loan of any Kind cannot be converted into a Loan
or Loans of a different Kind.
(ii) Base Rate and Federal Funds Rate Loans shall
continue as Base Rate or Federal Funds Rate Loans, as the case may be, unless
and until such Loans are converted into Loans of another Type. LIBOR Rate
Loans of any Type shall continue as Loans of such Type until the end of the
then current Interest Period therefor, at which time they shall be
automatically converted into Base Rate Loans unless the Borrower shall have
given the Agent notice in accordance with Section 1.03(e)(iv) requesting either
that such Loans continue as Loans of such Type for another Interest Period or
that such Loans be converted into Loans of another Type at the end of such
Interest Period.
(iii) Notwithstanding anything to the contrary
contained in Section 1.03(e)(i) or (ii), during a Default the Agent may notify
the Borrower that Loans may only be converted into or continued as Loans of
certain specified Types and, thereafter, until no Default shall continue to
exist, Loans may not be converted into or continued as Loans of any Type other
than one or more of such specified Types.
(iv) The Borrower shall give the Agent notice
(which shall be irrevocable) of each conversion of Loans or continuation of
LIBOR Rate Loans no later than 2:00 p.m. (New York time) on, in the case of a
conversion into Base Rate or Federal Funds Rate Loans, the Business Day, and,
in the case of a conversion into or continuation of LIBOR Rate Loans, the third
LIBOR Business Day, before the requested date of such conversion or
continuation. Each notice of conversion or continuation shall be in the form
of Schedule 1.03(e)(iv) and shall specify (A) the requested date of such
conversion or continuation, (B) the
-8-
14
amount, Kind and Type and, in the case of LIBOR Rate Loans, the last day of the
applicable Interest Period of the Loans to be converted or continued and (C)
the amount and Type or Types of Loans into which such Loans are to be converted
or as which such Loans are to be continued. Upon receipt of any such notice,
the Agent shall promptly notify each Bank of (x) the contents thereof, (y) the
amount, Kind and Type and, in the case of LIBOR Rate Loans, the last day of the
applicable Interest Period of each Loan to be converted or continued by such
Bank and (z) the amount and Type or Types of Loans into which such Loans are to
be converted or as which such Loans are to be continued.
(f) Maximum Interest Rate. Nothing contained in the Loan
Documents shall require the Borrower at any time to pay interest at a rate
exceeding the Maximum Permissible Rate. If interest payable by the Borrower on
any date would exceed the maximum amount permitted by the Maximum Permissible
Rate, such interest payment shall automatically be reduced to such maximum
permitted amount, and interest for any subsequent period, to the extent less
than the maximum amount permitted for such period by the Maximum Permissible
Rate, shall be increased by the unpaid amount of such reduction. Any interest
actually received for any period in excess of such maximum amount permitted for
such period shall be deemed to have been applied as a prepayment of the Loans.
Section 1.04. Repayment. (a) (i) The HFS Loans and the
Receivables Loans outstanding at 5:00 p.m. (New York time) on the Termination
Date shall mature and become due and payable, and shall be repaid by the
Borrower, at such time, and (ii) subject to Section 1.04(b), the HFI Loans
outstanding at 5:00 p.m. (New York time) on the Termination Date shall mature
and become due and payable, and shall be repaid by the Borrower, in sixteen
(16) consecutive quarterly installments, payable on Installment Payment Dates
commencing with October 20, 1997. Each such installment shall be in an amount
equal to 6.25% of the HFI Loans outstanding at 5:00 p.m. (New York time) on the
Termination Date, except that, in any event, the final installment shall be in
an amount equal to the amount of the HFI Loans then outstanding.
(b) If at 5:00 p.m. (New York time) on the Termination Date
(i) any Loan Document Representation and Warranty shall not be true and correct
in all material respects at and as of such time, (ii) a Default or a Borrowing
Base Deficiency with respect
-9-
15
to the HFI Loans shall have occurred and be continuing or (iii) any Bank shall
not have received such materials as it may have requested pursuant to Section
1(f) of Annex E hereto, the HFI Loans outstanding at such time shall mature and
become due and payable, and shall be repaid by the Borrower in full at such
time.
(c) Amounts repaid pursuant to Section 1.04(a) shall be
applied first to repay Base Rate Loans, second to repay Federal Funds Rate
Loans and then to repay LIBOR Rate Loans in the order that the Interest Periods
for such Loans end with Loans with Interest Periods having the earliest
maturities being paid first.
Section 1.05. Prepayments. (a) Optional Prepayments. The
Borrower may, at any time and from time to time, prepay the Loans in whole or
in part, without premium or penalty (but subject to Section 7.04), except that
any partial prepayment shall be in an aggregate principal amount of any Kind of
Loan of at least $1,000,000 or any integral multiple of $1,000,000 in excess
thereof. The Borrower shall give the Agent notice of each prepayment pursuant
to this Section 1.05(a) no later than 12:00 noon (New York time) on, in the
case of a prepayment of Base Rate or Federal Funds Rate Loans, the Business
Day, and, in the case of a prepayment of LIBOR Rate Loans, the third LIBOR
Business Day, before the date of such prepayment. Each such notice of
prepayment shall be in the form of Schedule 1.05(a) and shall specify (i) the
date such prepayment is to be made and (ii) the amount, Kind and Type and, in
the case of LIBOR Rate Loans, the last day of the applicable Interest Period of
the Loans to be prepaid. Upon receipt of any such notice, the Agent shall
promptly notify each Bank of the contents thereof and the amount, Kind and Type
and, in the case of LIBOR Rate Loans, the last day of the applicable Interest
Period of each Loan of such Bank to be prepaid. Amounts to be prepaid pursuant
to this Section 1.05(a) shall irrevocably be due and payable on the date
specified in the applicable notice of prepayment, together with interest
thereon as provided in Section 1.03(b).
(b) Borrowing Base Mandatory Prepayments. If at any time a
Borrowing Base Deficiency exists for any reason, including but not limited to
the sale of any HFI Borrowing Base Servicing Rights, HFS Borrowing Base
Servicing Rights or Borrowing Base Receivables, as the case may be, included in
any then current
-10-
16
Borrowing Base, the Borrower shall, upon demand by the Agent on any Business
Day, on that day, prepay the Loans with respect to which such Borrowing Base
Deficiency exists in an amount not less than the amount of the Borrowing Base
Deficiency. The Borrower shall give the Agent notice of any Borrowing Base
Deficiency no later than 1:00 p.m. (New York time) on the date thereof.
(c) Servicing Rights Disposition Mandatory Prepayments. In
the event of any sale of any Servicing Rights that constitute Collateral by
virtue of clause (a)(i) or (ii) of the definition of Servicing Rights
Collateral and that are HFI Borrowing Base Servicing Rights or HFS Borrowing
Base Servicing Rights, the Borrower shall, if the Loan to Value Percentage,
after such sale, would be more than fifty percent (50%), within one Business
Day of the receipt by the Borrower of the Net Cash Proceeds, if any, of such
disposition (i) prepay the Loans in an amount equal to one hundred percent
(100%) of such Net Cash Proceeds or (ii) add as Collateral such Net Cash
Proceeds, but only for a period of six months from the date of such sale, at
the end of which period, unless such Net Cash Proceeds have been used for the
acquisition of Servicing Rights, Loans in the amount of such Net Cash Proceeds
shall be repaid. Net Cash Proceeds to be held as Collateral shall be credited
to such account (with such account to be interest bearing at rates acceptable
to the Collateral Agent and to the extent consistent with Applicable Law) as
the Collateral Agent shall specify, which account will be subject to the sole
dominion and control of the Collateral Agent.
The Borrower shall give the Agent notice of each required
prepayment pursuant to this Section 1.05(c) no later than 1:00 p.m. (New York
time) on the date thereof.
(d) Application to Types of Loans. Amounts prepaid pursuant
to Section 1.05(b) and (c) shall be applied first to prepay Base Rate Loans,
second to prepay Federal Funds Rate Loans, and then to prepay LIBOR Rate Loans
in the order that the Interest Periods for such Loans end with Loans with
Interest Periods having the earliest maturities being paid first. Amounts to
be prepaid pursuant to Section 1.05(b) and (c) shall be paid on the day or
within the time period specified therefor, whether or not such payment would
require a prepayment of LIBOR Rate Loans prior to the last day of an applicable
Interest Period or would result in losses, costs or expenses compensable under
Section 7.04 and, for purposes of Section 1.11(c) and Section
-11-
17
6.01(a), shall be deemed to be "due" on the day specified for such payment or
on the last day of the period within which such payment is required to be made.
(e) Application to Installments. All prepayments of HFI
Loans made (or deemed to have been made pursuant to Section 1.03(f) hereof)
subsequent to the Termination Date shall be applied, if such prepayments were
made pursuant to Section 1.05(a), to such installments of the HFI Loans as the
Borrower may specify and, if such prepayments were made pursuant to Section
1.05(b) or (c), to installments of the HFI Loans in the inverse order of their
maturity.
(f) Reborrowing. Amounts of HFI Loans prepaid subsequent to
the Termination Date may not be reborrowed.
Section 1.06. Limitation on Types of Loans. Notwithstanding
anything to the contrary contained in this Agreement, the Borrower shall
borrow, prepay, convert and continue Loans in a manner such that (a) the
aggregate principal amount of LIBOR Rate Loans of the same Kind and Type and
having the same Interest Period shall at all times be not less than $1,000,000,
(b) there shall not be, at any one time, more than four Interest Periods in
effect with respect to LIBOR Rate Loans of all Types of any Kind of Loan and
(c) no scheduled payment of LIBOR Rate Loans will have to be made prior to the
last day of an applicable Interest Period in order to repay the Loans in the
amounts and (subject to Section 1.11(d)) on the dates specified in Section 1.04.
Section 1.07. Change in Commitments. (a) Reduction of
Commitments. The Borrower may reduce the Commitments by giving the Agent
notice (which shall be irrevocable) thereof no later than 10:00 a.m. (New York
time) on a Business Day which is not less than 30 days before the requested
date of such reduction, except that, (i) partial reduction of the Commitments
shall be in an aggregate amount not less than $1,000,000 or any integral
multiple of $1,000,000 in excess thereof and (ii) no reduction may reduce the
Commitments to an amount less than the aggregate amount of the applicable Kind
of Loans outstanding. Upon receipt of any such notice, the Agent shall
promptly notify each Bank of the contents thereof and the amount to which such
Bank's Commitment is to be reduced.
-12-
18
(b) Increase in HFS Commitments. At any time and from time
to time after the Effective Date, the aggregate amount of the HFS Commitments
may be increased either by new banks (each, a "New Commitment Bank")
establishing HFS Commitments or by one or more then existing Banks increasing
their HFS Commitments (each such increase by either means, a "Commitment
Increase", and each such new bank or existing Bank increasing its HFS
Commitment, an "Additional Commitment Bank"). No Commitment Increase shall
become effective unless and until (i) the Borrower, the Agent and the
Additional Commitment Bank shall have executed and delivered an agreement
substantially in the form of Exhibit B (a "Commitment Increase Supplement")
with respect to such Commitment Increase, which agreement the Agent may decline
to execute and deliver if it does not wish to consent to such Commitment
Increase, and (ii) if, after giving effect thereto, the aggregate amount of the
HFS Commitments would exceed $100,000,000, such Commitment Increase shall have
been consented to by each of the other Banks. Promptly after the effective
date of any such Commitment Increase Supplement, the Agent shall determine and
notify the Additional Commitment Bank and each other Bank of the amounts of HSF
Loans the Additional Commitment Bank must purchase and the other Banks must
sell (with the purchase prices of such sales to be determined in accordance
with Exhibit C hereto) so that, after giving effect to such purchases and
sales, the amounts of HSF Loans of each Type of each Bank (including the
Additional Commitment Bank) shall be proportional to its HSF Commitment. Upon
payment of such purchase price, each other Bank shall be deemed to have sold to
such Additional Commitment Bank, and such Additional Commitment Bank shall be
deemed to have purchased from each other Bank, on the terms set forth in
Exhibit C hereto, such amount of such other Bank's HSF Loans. Upon the
effectiveness of any Commitment Increase, the Borrower shall issue a Note to
each Additional Commitment Bank that is not a Bank.
Section 1.08. Fees.
(a) Commitment Fees. The Borrower shall pay to the Agent for
the account of each Bank a commitment fee (i) on the daily unused amount of
such Bank's HFI Commitment for each day from the Effective Date through the
Termination Date at a rate per annum of 0.25%, and (ii) on the daily unused
amount of such Bank's HFS Commitment and Receivables Commitment for each day
from the Effective Date through the Termination Date at a rate
-13-
19
per annum of 0.20%, in each case payable in arrears, on the first Business Day
of each calendar quarter, on the Termination Date and on the date of any
reduction of any such Commitment.
(b) Upfront Fees. The Borrower shall pay to the Agent for
the account of each Bank on the Effective Date an upfront fee in an amount
equal to such Bank's aggregate Commitments multiplied by the applicable
percentage set forth below, such percentage to be determined, except as
provided below, on the basis of the amount of such Bank's original subscription
as set forth in such Bank's original commitment letter submitted to the Agent:
Original Subscription Amount Percentage
---------------------------- ----------
Greater than or equal
to $7,500,000 but less
than $12,500,000 0.05%
Greater than or equal
to $12,500,000 but
less than $20,000,000 0.10%
Greater than or equal
to $20,000,000 0.15%
(c) Fees Non-Refundable. Subject to Section 1.03(f), if
applicable, none of the fees payable under this Section 1.08 shall be
refundable in whole or in part under any circumstances.
Section 1.09. Computation of Interest and Fees. Interest,
other than at the Maximum Permissible Rate, and the commitment fees shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed. Interest for any period shall be calculated from and including
the first day thereof to but excluding the last day thereof. Interest at the
Maximum Permissible Rate shall be computed on the basis of a year of 365 or 366
days, as the case may be.
Section 1.10. Evidence of Indebtedness. Each Bank's Loans
and the Borrower's obligation to repay such Loans with interest in accordance
with the terms of this Agreement shall be evidenced by this Agreement, the
records of such Bank and a single Note payable to the order of such Bank which,
subject to
-14-
20
Section 9.19, may be a Registered Note. The records of each Bank shall be
prima facie evidence of such Bank's Loans and accrued interest thereon and of
all payments made in respect thereof.
Section 1.11. Payments by the Borrower. (a) Time, Place and
Manner. All payments due to the Agent under the Loan Documents shall be made
to the Agent at the Agent's Office or to such other Person or at such other
address as the Agent may designate by notice to the Borrower and as shall be
reasonably acceptable to the Borrower. All payments due to any Bank under the
Loan Documents shall, in the case of payments on account of principal of or
interest on the Loans or fees, be made to the Agent at the Agent's Office and,
in the case of all other payments, be made directly to such Bank at its
Domestic Lending Office or at such other address, within the United States of
America, as such Bank may designate by notice to the Borrower and as shall be
reasonably acceptable to the Borrower. All payments due to any Bank under the
Loan Documents, whether made to the Agent or directly to such Bank, shall be
made for the account of, in the case of payments in respect of LIBOR Rate
Loans, such Bank's LIBOR Lending Office and, in the case of all other payments,
such Bank's Domestic Lending Office. All payments due to the Collateral Agent
under the Loan Documents shall be made to the Collateral Agent at the
Collateral Agent's Office. A payment shall not be deemed to have been made on
any day unless such payment has been received by the required Person, at the
required place of payment, in Dollars in funds immediately available to such
Person at such place, no later than 1:00 p.m. (New York time) on such day.
(b) No Reductions. All payments due to the Agent, the
Collateral Agent or any Bank under the Loan Documents, and all other terms,
conditions, covenants and agreements to be observed and performed by the
Borrower thereunder, shall be made, observed or performed by the Borrower
without any reduction or deduction whatsoever, including any reduction or
deduction for any set-off, recoupment, counterclaim (whether sounding in tort,
contract or otherwise) or Tax, except for any withholding or deduction for
Taxes required to be withheld or deducted under Applicable Law.
(c) Authorization to Charge Accounts. The Borrower hereby
authorizes the Agent, the Collateral Agent and each Bank, if and to the extent
any amount payable by the Borrower under the Loan Documents (whether payable to
such Person or to any other
-15-
21
Person that is the Agent, the Collateral Agent or a Bank) is not otherwise paid
when due, to charge such amount against any or all of the accounts of the
Borrower with such Person or any of its Affiliates (whether maintained at a
branch or office located within or without the United States), with the
Borrower remaining liable for any deficiency.
(d) Extension of Payment Dates. Whenever any payment to the
Agent, the Collateral Agent or any Bank under the Loan Documents would
otherwise be due (except by reason of acceleration) on a day that is not a
Business Day, or, in the case of payments of the principal of LIBOR Rate Loans,
a LIBOR Business Day, such payment shall instead be due on the next succeeding
Business or LIBOR Business Day, as the case may be, unless, in the case of a
payment of the principal of LIBOR Rate Loans, such extension would cause
payment to be due in the next succeeding calendar month, in which case such due
date shall be advanced to the next preceding LIBOR Business Day. If the date
any payment under the Loan Documents is due is extended (whether by operation
of any Loan Document, Applicable Law or otherwise), such payment shall bear
interest for such extended time at the rate of interest applicable hereunder.
Section 1.12. Distribution of Payments by the Agent. (a)
The Agent shall promptly distribute to each Bank its ratable share of each
payment received by the Agent under the Loan Documents for the account of the
Banks by credit to an account of such Bank at the Agent's Office or by wire
transfer to an account of such Bank at an office of any other commercial bank
located in the United States. Each such distribution of any such payment shall
be made on (i) the same day as such payment is received by the Agent, if such
payment is received by the Agent by 1:00 p.m. (New York time) on any day, and
(ii) the first Business Day after such payment is received by the Agent, if
such payment is received by the Agent after 1:00 p.m. (New York time) on any
day. If any such distribution of any such payment is not made by the Agent on
the scheduled date, the Agent shall, on demand, pay interest thereon, for each
day until paid, at the Federal Funds Rate.
(b) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks under the
Loan Documents that the Borrower will not make such payment in full, the Agent
may assume that the Borrower has
-16-
22
made such payment in full to the Agent on such date and the Agent in its sole
discretion may, in reliance upon such assumption, cause to be distributed to
each Bank on such due date a corresponding amount with respect to the amount
then due such Bank. If and to the extent the Borrower shall not have so made
such payment in full to the Agent and the Agent shall have so distributed to
any Bank a corresponding amount, such Bank shall, on demand, repay to the Agent
the amount so distributed together with interest thereon, at the Federal Funds
Rate, for each day from the date such amount is distributed to such Bank until
the date such Bank repays such amount to the Agent.
Section 1.13. Taxes. (a) Taxes Payable by the Borrower. If
under Applicable Law, any Tax is required to be withheld or deducted by the
Borrower from, or is otherwise payable by the Borrower in connection with, any
payment to the Agent or any Bank under the Loan Documents, the Borrower (i)
shall (A) if so required, withhold or deduct the amount of such Tax from such
payment and, in any case, pay such Tax to the appropriate taxing authority in
accordance with Applicable Law and (B) indemnify the Agent and such Bank in
accordance with the provisions of Section 9.02(a) against its failure so to do
and (ii) shall, subject to Section 1.13(d)(ii), pay to the Agent or such Bank,
as applicable, such additional amounts as may be necessary so that the net
amount received by the Agent or such Bank with respect to such payment, after
withholding or deducting all Taxes required to be withheld or deducted by the
Borrower, is equal to the full amount payable under the Loan Documents. If any
Tax is withheld or deducted by the Borrower from, or is otherwise payable by
the Borrower in connection with, any payment payable to the Agent or any Bank
under the Loan Documents, the Borrower shall, promptly after the date of such
payment, furnish to the Agent or such Bank, as applicable, the original or a
certified copy of a receipt for such Tax from the applicable taxing authority.
If any payment due to the Agent or any Bank under the Loan Documents is or is
expected to be made without withholding or deducting therefrom, or otherwise
paying in connection therewith, any Tax payable by the Borrower to any taxing
authority, the Borrower shall, within 30 days after any request from the Agent
or such Bank, as applicable, furnish to the Agent or such Bank a certificate
from such taxing authority, or an opinion of counsel acceptable to the Agent or
such Bank, in either case stating that no Tax payable to such taxing authority
was or is, as the case may be, required to be withheld or
-17-
23
deducted from, or otherwise paid by the Borrower in connection with, such
payment.
(b) Taxes Payable by the Agent or any Bank. The Borrower
shall, promptly upon request by the Agent or any Bank for the payment thereof,
but subject to Section 1.13(d)(ii), pay to the Agent or such Bank, as the case
may be, (i) all Taxes (other than Bank Taxes) payable by the Agent or such
Bank, as the case may be, with respect to any payment due to the Agent or such
Bank under the Loan Documents and (ii) all Taxes (including Bank Taxes) payable
by the Agent or such Bank as a result of payments made by the Borrower (whether
made to a taxing authority or to the Agent or such Bank) pursuant to this
Section 1.13(b).
(c) Credits and Deductions. If the Agent or any Bank is, in
its sole opinion, able to apply for any credit, deduction or other reduction in
Bank Taxes by reason of any payment made by the Borrower under Section 1.13 (a)
or (b), the Agent or such Bank, as the case may be, shall use reasonable
efforts to obtain such credit, deduction or other reduction and, upon receipt
thereof, will pay to the Borrower such amount, not exceeding the increased
amount paid by the Borrower, as is equal to the net after-tax value to the
Agent or such Bank, in its sole opinion, of such part of such credit, deduction
or other reduction as it considers to be allocable to such payment by the
Borrower, having regard to all of the Agent's or such Bank's dealings giving
rise to similar credits, deductions or other reductions in relation to the same
tax period and to the cost of obtaining the same; provided, however, that (i)
the Agent or such Bank, as the case may be, shall not be obligated to disclose
to the Borrower any information regarding its tax affairs or computations and
(ii) nothing in this Section 1.13(c) shall interfere with the right of the
Agent or such Bank to arrange its tax affairs as it deems appropriate.
(d) Exemption from U.S. Withholding and Backup Withholding
Taxes. (i) There shall be submitted to the Borrower and the Agent, (A) on or
before the first date that interest or fees are payable to such Bank under the
Loan Documents, (1) if at the time the same are applicable, (aa) by each Bank
that is not a United States Person, two duly completed and signed copies of
Internal Revenue Service Form 1001 or 4224, in either case entitling such Bank
to a complete exemption from withholding of any United States federal income
taxes on all amounts to be
-18-
24
received by such Bank under the Loan Documents, or (bb) by each Bank that is a
Non-US Bank, (x) a duly completed Internal Revenue Service Form W-8 and (y) a
certification in the form of Schedule 1.13(d) that such Bank is a Non-US Bank
or (2) if at the time any of the foregoing are inapplicable, duly completed and
signed copies of such form, if any, as entitles such Bank to exemption from
withholding of United States federal income taxes to the maximum extent to
which such Bank is then entitled under Applicable Law, and (B) from time to
time thereafter, prior to the expiration or obsolescence of any previously
delivered form or upon any previously delivered form becoming inaccurate or
inapplicable, such further duly completed and signed copies of such form, if
any, as entitles such Bank to exemption from withholding of United States
federal income taxes to the maximum extent to which such Bank is then entitled
under Applicable Law. Each Bank shall promptly notify the Borrower and the
Agent if (aa) it is required to withdraw or cancel any form or certificate
previously submitted by it or any such form or certificate has otherwise become
ineffective or inaccurate or (bb) payments to it are or will be subject to
withholding of United States federal income taxes to a greater extent than the
extent to which payments to it were previously subject. Upon the request of
the Borrower or the Agent, each Bank that is a United States Person shall from
time to time submit to the Borrower and the Agent a certificate to the effect
that it is such a United States Person and a duly completed Internal Revenue
Service Form W-9.
(ii) Notwithstanding anything to the contrary contained
herein, the Borrower shall not be required to pay any additional amount in
respect of withholding of United States federal income taxes pursuant to this
Section 1.13 to any Bank (A) except to the extent such Taxes are required to be
withheld as a result of (1) in the case of a Person that is a Bank on the
Effective Date, a Regulatory Change Enacted after the Effective Date and (2) in
the case of a Person that becomes a Bank after the Effective Date, a Regulatory
Change Enacted after such Person becomes a Bank, or (B) to the extent such
withholding is required because such Bank has failed (1) to submit any form or
certificate that it is entitled to so submit under Applicable Law or, (2) in
the case of a Bank that is a Non-US Bank, to cause its Notes to be issued as
Registered Notes or (C) in the case of a Person that becomes a Bank after the
Effective Date, except to the extent such additional amount would have been
payable had such Person not become a Bank.
-19-
25
Section 1.14. Pro Rata Treatment. Notwithstanding anything
to the contrary contained herein and except to the extent otherwise provided
herein, (a) Loans of each Kind and Type to be made on any day shall be made by
the Banks pro rata in accordance with their respective Commitments, (b) Loans
of the Banks shall be converted and continued pro rata in accordance with their
respective amounts of Loans of the Type and, in the case of LIBOR Rate Loans,
having the Interest Period being so converted or continued, (c) each reduction
in the Commitments shall be made pro rata in accordance with the respective
amounts thereof and (d) each payment, including repayment and prepayment, of
the principal of or interest on the Loans or of fees shall be made for the
account of the Banks pro rata in accordance with the respective amounts thereof
then due and payable.
ARTICLE 2
CONDITIONS TO EFFECTIVENESS; LOANS
Section 2.01. Conditions to Effectiveness. This Agreement
shall not become effective until the date each of the following conditions has
been fulfilled:
(a) the Agent shall have received each of the following, in
form and substance and, in the case of the materials referred to in clauses
(i), (ii), (iii), and (vii), certified in a manner satisfactory to the Agent:
(i) a certificate of the Secretary or an
Assistant Secretary of the Borrower, dated the requested date for the
making of such Loan, substantially in the form of Schedule 2.01(a)(i),
to which shall be attached copies of the resolutions and by-laws
referred to in such certificate;
(ii) a copy of the certificate or articles of
incorporation of the Borrower, certified, as of a recent date, by the
Secretary of State or other appropriate official of the Borrower's
jurisdiction of incorporation;
(iii) a good standing certificate with respect to
the Borrower, issued as of a recent date by the Secretary of
-20-
26
State or other appropriate official of the Borrower's jurisdiction of
incorporation;
(iv) an opinion of counsel for the Borrower, dated
the requested date for the making of such Loan, in the form of
Schedule 2.01(a)(iv), with such changes as the Agent shall approve;
(v) an opinion of counsel for the Agent, dated
the requested date for the making of such Loan, in the form of
Schedule 2.01(a)(v), with such changes as the Agent shall approve;
(vi) a certificate in the form of Schedule
2.01(a)(vi), with such changes as the Agent shall approve;
(vii) a copy of each Governmental Approval and
other consent or approval listed on Schedule Annex C-3;
(viii) a certificate of the vice chairman or chief
financial officer of the Borrower, dated the Effective Date, in the
form of Schedule Annex E-1(c);
(ix) a duly executed Note for each Bank;
(x) a duly executed copy of the Security
Agreement;
(xi) either (A) such duly executed UCC-1 or UCC-3
financing statements and other documents as the Agent may request, the
filing or recordation of which is necessary or appropriate in the
Agent's determination to create or perfect a security interest in the
Collateral under Applicable Law, or (B) evidence of the filing or
recordation of the same in such offices as the Agent shall have
specified;
(xii) such instruments and other documents as the
Agent may request, the possession of which is necessary or appropriate
in the Agent's determination to create or perfect a security interest
in the Collateral under Applicable Law;
-21-
27
(xiii) an appraisal, in a form and substance and as
of a date satisfactory to the Agent, of the HFI Borrowing Base
Servicing Rights, the HFS Borrowing Base Servicing Rights and the
Hedge Contracts, prepared by an appraiser or appraisers satisfactory
to the Agent;
(xv) five duly executed, undated copies of the
FNMA Power of Attorney; and
(xv) such additional materials as any Bank may
have requested pursuant to Section 1(f) of Annex E;
(b) all fees payable on or prior to the requested date of
such Loan pursuant to Section 1.08, and all amounts payable pursuant to Section
9.02 for which invoices have been delivered to the Borrower on or prior to such
date, shall have been paid in full or arrangements satisfactory to the Agent
shall have been made to cause them to be paid in full concurrently with the
disbursement of the proceeds of the Loan to be made on such date;
(c) all acts and conditions (including the obtaining of any
necessary Governmental Approvals and the making of any required filings,
recordings or registrations) required to be done and performed and to have
happened precedent to the execution, delivery and performance of the Loan
Documents and to constitute the same legal, valid and binding obligations,
enforceable in accordance with their respective terms, shall have been done and
performed and shall have happened in due and strict compliance with all
Applicable Law or if any of such have not been done, performed or happened,
such has been expressly disclosed to the Agent and waived by all of the Banks
in writing;
(d) the Borrower shall have borrowed and repaid the Loans in
amounts such that the Loans (and the Types thereof) shall be pro rata in
accordance with Section 1.14; and
(e) all other amounts owing pursuant to the Existing
Revolving/Term Credit Agreement and Existing Receivables Credit Agreement to
the Agent, Co-Agents, Collateral Agent or any Bank (in each case as such term
is defined in the Existing Revolving/Term Credit Agreement or Existing
Receivables Credit Agreement) shall have been paid in full or arrangements
satisfactory to the Agent shall have been made to cause them to
-22-
28
be paid in full concurrently with the disbursement of the proceeds of the Loans
to be made on such date.
Upon the satisfaction of each of the conditions set forth in
this Article 2, (i) each Bank that is a "Bank" as defined in the Existing
Revolving/Term Credit Agreement shall return to the Borrower the promissory
notes issued to such Bank under the Existing Revolving/Term Credit Agreement
and (ii) each Bank that is a "Bank" as defined in the Existing Receivables
Secured Credit Agreement shall return to the Borrower the promissory notes
issued to such Bank under the Existing Receivables Secured Credit Agreement.
Each note so required to be returned to the Borrower shall be stamped
"superseded" and such return shall not constitute a novation.
Section 2.02. Conditions to Each Loan. The obligation of
each Bank to make each Loan requested to be made by it, including its initial
Loan, is subject to the fulfillment of the following conditions:
(a) the Agent shall have received a notice of borrowing with
respect to such Loan complying with the requirements of Section 1.02;
(b) the Agent shall have received a Borrowing Base
Certificate or Certificates applicable to the Kind or Kinds of Loans requested
to be made, dated the date of the requested date for the making of such Loan or
Loans;
(c) if such Loan is an HFS Loan (i) the Agent shall have
received copies of each Approved Purchase and Sale Agreement and (ii) the Agent
and the Co-Agents shall have approved each Approved Purchase and Sale
Agreement, Servicing Rights under which constitute Eligible Servicing Rights;
(d) if such Loan is a Receivables Loan (i) the Agent shall
have received copies of each Designated Purchase and Sale Agreement and of each
Purchase Obligor agreement contemplated by clause (d)(i) of the definition of
Eligible Receivables not previously delivered to it, and of each Confirmation
of Sale of Servicing Rights thereunder not previously delivered to it and (ii)
the Required Banks shall have approved each Designated Purchase and Sale
Agreement, Receivables under which constitute Eligible Receivables;
-23-
29
(e) each Loan Document Representation and Warranty shall be
true and correct at and as of the time such Loan is to be made, both with and
without giving effect to such Loan and all other Loans to be made at such time
and to the application of the proceeds thereof;
(f) no Default shall have occurred and be continuing at the
time such Loan is to be made or would result from the making of such Loan and
all other Loans to be made at such time or from the application of the proceeds
thereof;
(g) such Loan will not contravene any Applicable Law
applicable to such Bank; and
(h) following the funding of the requested Loan and of all
other Loans then requested to be made, the aggregate principal amount of Loans
outstanding hereunder shall not:
(i) exceed the limitations set forth in Section 1.01 and no
Borrowing Base Deficiency would exist; and
(ii) if such Loan is an HFI Loan, exceed an amount equal to
the lesser of:
(A) 1.2% of the principal amount of the Mortgage
Loans subject to HFI Borrowing Base Servicing Rights; and
(B) 66-2/3% of the sum of (1) in the case of HFI
Servicing Rights being acquired with the proceeds of such
Loan, the lesser of (x) the acquisition price of such HFI
Servicing Rights and (y) the principal amount of the Mortgage
Loans subject to such HFI Servicing Rights multiplied by the
applicable Fair Market Percentage and (2) in the case of all
other HFI Servicing Rights, the principal amount of the
Mortgage Loans subject to such HFI Servicing Rights multiplied
by the then current applicable Fair Market Percentage.
The Borrower shall be deemed to have made a representation and
warranty as of the time of the making of the requested Loans that the
conditions specified in clauses (e), (f) and (g) above have been fulfilled as
of such time.
-24-
30
The Agent shall, upon request of any Bank, provide such Bank
with any material the Agent shall have received pursuant to this Section 2.02.
ARTICLE 3
CERTAIN REPRESENTATIONS AND WARRANTIES
In order to induce each Bank, the Agent and the Collateral
Agent to enter into this Agreement and to make each Loan requested to be made
by it, the Borrower makes the representations and warranties contained in Annex
C and hereby further represents and warrants as follows:
Section 3.01. Security Interest. The Security Interest
constitutes and will constitute a perfected security interest in the
Collateral, and the Collateral is not and will not be subject to any other
Liens except as permitted by Section 6 of Annex D.
Section 3.02. Questionnaire. As of the Effective Date, and
except as otherwise specified in writing to the Agent prior to the Effective
Date, the Questionnaire is complete and correct in all respects.
ARTICLE 4
CERTAIN COVENANTS
From the Effective Date and until the Repayment Date, the
Borrower agrees to comply with the covenants contained in Annex D and hereby
further agrees:
Section 4.01. Use of Proceeds. (a) HFI Loans. The proceeds
of all HFI Loans shall be used by the Borrower solely for financing the
Borrower's acquisition or carrying of HFI Servicing Rights and to refinance the
Indebtedness of the Borrower under the Existing Revolving/Term Credit
Agreement.
(b) HFS Loans. The proceeds of all HFS Loans shall be used
by the Borrower solely for financing the Borrower's
-25-
31
acquisition or carrying of Servicing Rights constituting HFS Borrowing Base
Servicing Rights and to refinance the Indebtedness of the Borrower under the
Existing Revolving/Term Credit Agreement.
(c) Receivables Loans. The proceeds of all Receivables Loans
shall be used by the Borrower for financing the Borrower's acquisition or
carrying of Servicing Rights to be sold pursuant to Designated Purchase and
Sale Agreements and to refinance the Indebtedness of the Borrower under the
Existing Receivables Secured Credit Agreement.
Notwithstanding the foregoing, none of the proceeds of any of
the Loans shall be used to purchase or carry, or to reduce or retire or
refinance any credit incurred to purchase or carry, any margin stock (within
the meaning of Regulations U and X of the Board of Governors of the Federal
Reserve System) or, knowingly, to extend credit to others for the purpose of
purchasing or carrying any margin stock.
Section 4.02. Further Documents. Execute and deliver or
cause to be executed and delivered to the Agent or the Collateral Agent on
behalf of the Banks from time to time such confirmatory or supplementary
security agreements, financing statements, reaffirmations and consents and such
other documents, instruments or agreements as the Agent may reasonably request,
which are in the Agent's reasonable judgment necessary or desirable to obtain
for the Agent on behalf of the Banks the benefit of the Loan Documents and the
Collateral.
ARTICLE 5
INFORMATION
From the Effective Date and until the Repayment Date, the
Borrower shall furnish to the Agent the Information required by Annex E and in
addition shall furnish to the Agent:
Section 5.01 Serviced Mortgage Loan Report, Borrowing Base
Certificate and Appraisal. (a) Reports. As soon as available and in any
event no later than 15 Business Days after the end of each month (with respect
to the reports referred to in clauses (i) and (ii) below), 30 days after the
end of each
-26-
32
calendar quarter (with respect to the reports referred to in clauses (iii) and
(iv) below) and at such other times as the Agent or the Required Banks may
reasonably request:
(i) a Serviced Mortgage Loan Report, in the form
and containing the information required by Schedule 5.01(a)(i),
prepared by the Borrower, dated as of the last day of each month and,
if the Agent or the Required Banks shall have reasonably requested, as
of such other reasonably requested date;
(ii) a Borrowing Base Certificate, together with a
report on the Borrower's Servicing Portfolio from the Person preparing
the appraisal referred to in Section 5.01(a)(iii) or such other Person
as shall be reasonably acceptable to the Agent;
(iii) a Servicing Rights Appraisal Report in form
and substance satisfactory to the Agent of the (x) Eligible Servicing
Rights and (y) Servicing Rights, prepared by a third-party appraiser
satisfactory to the Agent; and
(iv) a Hedge Contract Appraisal Report, in form and
substance acceptable to the Agent, of the value of Hedge Contracts.
(b) Notice of Defaults, Material Adverse Changes and Other
Matters. Prompt notice of:
(i) any Default, and
(ii) the failure of any Collateral included in any
Borrowing Base (as calculated in the most recently delivered Borrowing
Base Certificate) to comply at any time with the applicable criteria
of eligibility.
Section 5.02. Agent to Distribute. The Agent shall promptly
distribute to each of the Banks copies of the materials delivered to it by the
Borrower pursuant to Annex E or Section 5.01. In addition, with the delivery
of the materials delivered in accordance with Section 1(d) of Annex E, the
Agent shall deliver to each Bank the most recent Borrowing Base Certificate
received by it on such date.
-27-
33
ARTICLE 6
DEFAULT
Section 6.01. Events of Default. Each of the following shall
constitute an Event of Default, whatever the reason for such event and whether
it shall be voluntary or involuntary, or within or without the control of the
Borrower or any Subsidiary, or be effected by operation of law or pursuant to
any judgment or order of any court or any order, rule or regulation of any
governmental or nongovernmental body:
(a) Payments. Any payment of principal of or interest on any
of the Loans or the Notes or of fees shall not be made when and as due (whether
at maturity, by reason of notice of repayment or acceleration or otherwise) and
in accordance with the terms of this Agreement and the Notes;
(b) Representations and Warranties. Any Loan Document
Representation and Warranty shall at any time prove to have been incorrect or
misleading in any material respect when made;
(c) Performance or Observance. (i) The Borrower shall
default in the performance or observance of:
(A) any term, covenant, condition or
agreement contained in Section 4.01 or Section 5.01(b)(i) or in the
following Sections of Annex D: Section 1(a) (insofar as such Section
requires the preservation of the corporate existence of the Borrower),
Sections 1(e), 3 or 4 (but only if the Indebtedness incurred in
violation of Section 4 exceeds, in the aggregate for any measuring
period, $250,000), Section 5 (but only if the Liabilities Guaranteed
in violation of Section 5 exceed, in the aggregate for any measuring
period, $100,000), Section 6 (but only if the Liabilities secured by
Liens incurred in violation of Section 6 exceed, in the aggregate for
any measuring period, $250,000), Sections 7, 8 or 9 (but only if the
Investments made in violation of Section 9 exceed, in the aggregate
for any measuring period, $250,000), Section 10 (but only if the
assets disposed of in violation of Section 10 exceed, in the aggregate
for any measuring period, $250,000), Section 11 (but only if the
transactions with Affiliates effected in
-28-
34
violation of Section 11, exceed, in the aggregate for any measuring
period, $250,000), Sections 14 through 18, and for this purpose, a
"measuring period" means any period of 12 consecutive months ending on
an anniversary date of the Effective Date; or
(B) any term, covenant, condition or
agreement contained in this Agreement or in Annex D and Annex E (other
than a term, covenant, condition or agreement a default in the
performance or observance of which is elsewhere in this Section
specifically dealt with) and, if capable of being remedied, such
default shall continue unremedied for a period of 30 days; or
(ii) the Borrower shall default in the performance
or observance of:
(A) any term, covenant, condition or
agreement contained in Section 1(b), Section 9(a), Section 10(a)
through (e), Section 10(j) or Section 10(l) of the Security Agreement;
or
(B) any term, covenant, condition or
agreement contained in any Loan Document (other than any term,
covenant, condition or agreement a default in the performance or
observance of which is elsewhere in this Section specifically dealt
with) and, if capable of being remedied, such default shall continue
unremedied for a period of 15 days after notice shall have been given
by the Agent to the Borrower requiring that such default be cured;
(d) Payment of Other Indebtedness. (i) The Borrower shall
fail to pay, in accordance with its terms and when due and payable, any of the
principal of or interest on any Indebtedness having a principal amount of
$500,000 or more (other than the Loans), (ii) the maturity of any such
Indebtedness shall, in whole or in part, have been accelerated, or any such
Indebtedness shall, in whole or in part, have been required to be repaid prior
to the stated maturity thereof, in accordance with the provisions of any
Contract evidencing, providing for the creation of or concerning such
Indebtedness, or (iii) (A) any event shall have occurred and be continuing that
permits (or, with the passage of time or the giving of notice or both, would
permit) any holder or holders of such Indebtedness, any trustee or agent acting
on
-29-
35
behalf of such holder or holders or any other Person so to accelerate such
maturity or require any such repayment and (B) if the Contract evidencing,
providing for the creation of or concerning such Indebtedness provides for a
cure period for such event, such event shall not be cured prior to the end of
such cure period or such shorter period of time as the Agent may specify;
(e) Other Contracts. A default shall be continuing under any
Contract (other than a Contract relating to Indebtedness to which clause (d) of
this Section 6.01 is applicable) binding upon the Borrower, except a default
that, together with all other such defaults, has not had and does not have a
significant possibility of having a Materially Adverse Effect on (i) the
Borrower, (ii) any Loan Document or (iii) the Collateral;
(f) Change in Business, etc. Since December 31, 1995, any
change in the business, assets, Liabilities, financial condition, results of
operations or business prospects of the Borrower or any Subsidiary shall have
occurred, or any event shall have occurred or failed to occur, that has had or
that has a significant possibility of having either alone or in conjunction
with all other such changes, events and failures, a Materially Adverse Effect
on (A) the Borrower, (B) any Loan Document or (C) the Collateral.
(g) Bankruptcy. (i) The Borrower or any Subsidiary shall
(A) commence a voluntary case under the Federal bankruptcy laws (as now or
hereafter in effect), (B) file a petition seeking to take advantage of any
other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition or adjustment of Debts, (C) consent
to or fail to contest in a timely and appropriate manner any petition filed
against it in an involuntary case under such bankruptcy laws or other laws, (D)
apply for, or consent to, or fail to contest in a timely and appropriate
manner, the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or the like of itself or of a substantial part
of its assets, domestic or foreign, (E) admit in writing its inability to pay,
or generally not be paying, its Debts (other than those that are the subject of
bona fide disputes) as they become due, (F) make a general assignment for the
benefit of creditors, or (G) take any
-30-
36
corporate action for the purpose of effecting any of the foregoing;
(ii) (A) A case or other proceeding shall be
commenced against the Borrower or any Subsidiary seeking (1) relief under the
Federal bankruptcy laws (as now or hereafter in effect) or under any other
laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization,
winding up or composition or adjustment of debts, or (2) the appointment of a
trustee, receiver, custodian, liquidator or the like of the Borrower or any
Subsidiary, or of all or any substantial part of the assets, domestic or
foreign, of the Borrower or any Subsidiary, and such case or proceeding shall
continue undismissed and unstayed for a period of 60 days, or (B) an order
granting the relief requested in such case or proceeding against the Borrower
or any Subsidiary (including an order for relief under such Federal bankruptcy
laws) shall be entered;
(h) Judgments and Orders. A judgment or order shall be
entered against the Borrower or any Subsidiary by any court, and (i) in the
case of a judgment or order for the payment of money, either (A) such judgment
or order shall continue undischarged and unstayed for a period of 20 days in
which the aggregate amount of all such judgments and orders exceeds $200,000 or
(B) enforcement proceedings shall have been commenced upon such judgment or
order and (ii) in the case of any judgment or order for other than the payment
of money, such judgment or order could, in the reasonable judgment of the
Required Banks, together with all other such judgments or orders, have a
significant possibility of having a Materially Adverse Effect on the Borrower;
(i) Termination Events. (i) Any Termination Event shall
occur with respect to any Benefit Plan of the Borrower, any Subsidiary or any
of their respective ERISA Affiliates, (ii) any Accumulated Funding Deficiency,
whether or not waived, shall exist with respect to any such Benefit Plan, (iii)
any Person shall engage in any Prohibited Transaction involving any such
Benefit Plan, (iv) the Borrower, any Subsidiary or any of their respective
ERISA Affiliates shall be in "default" (as defined in ERISA Section 4219(c)(5))
with respect to payments owing to any such Benefit Plan that is a Multiemployer
Benefit Plan as a result of such Person's complete or partial withdrawal (as
described in ERISA Section 4203 or 4205) therefrom, (v) the
-31-
37
Borrower, any Subsidiary or any of their respective ERISA Affiliates shall fail
to pay when due an amount that is payable by it to the PBGC or to any such
Benefit Plan under Title IV of ERISA, (vi) a proceeding shall be instituted by
a fiduciary of any such Benefit Plan against the Borrower, any Subsidiary or
any of their respective ERISA Affiliates to enforce ERISA Section 515 and such
proceeding shall not have been dismissed within 30 days thereafter, or (vii)
any other event or condition shall occur or exist with respect to any such
Benefit Plan, except that no event or condition referred to in clauses (i)
through (vii) shall constitute an Event of Default if it, together with all
other such events or conditions at the time existing, has not subjected, and in
the reasonable determination of the Required Banks will not subject, the
Borrower or any Subsidiary to any Liability that, alone or in the aggregate
with all such Liabilities for all such Persons, exceeds $250,000;
(j) Illegality and Invalidity. The Borrower or any of its
Affiliates asserts, or the Borrower or any of its Affiliates or any other
Person institutes any proceedings seeking to establish, that (i) any provision
of the Loan Documents is invalid, not binding or unenforceable or (ii) the
Security Interest is not a valid and perfected first priority security interest
in the Collateral subject only to Permitted Liens.
Section 6.02. Remedies Upon Event of Default. During the
continuance of any Event of Default (other than one specified in Section
6.01(g)) and in every such event, the Agent, if so directed by the Required
Banks, upon notice to the Borrower, shall do either or both of the following:
(a) declare, in whole or, from time to time, in part, the principal of and
interest on the Loans and the Notes and all other amounts owing under the Loan
Documents to be, and the Loans and the Notes and all such other amounts shall
thereupon and to that extent become, due and payable and (b) terminate, in
whole or, from time to time, in part, the Commitments. Upon the occurrence of
an Event of Default specified in Section 6.01(g), automatically and without any
notice to the Borrower, (a) the principal of and interest on the Loans and the
Notes and all other amounts owing under the Loan Documents shall be due and
payable and (b) the Commitments shall terminate. Presentment, demand, protest
or notice of any kind (other than the notice provided for in the first sentence
of this Section 6.02) are hereby expressly waived.
-32-
38
ARTICLE 7
ADDITIONAL CREDIT FACILITY PROVISIONS
Section 7.01. Mandatory Suspension and Conversion of LIBOR
Rate Loans. (a) A Bank's obligations to make, continue or convert into LIBOR
Rate Loans of any Type shall be suspended, all such Bank's outstanding Loans of
that Type shall be converted on the last day of their applicable Interest
Periods (or, if earlier, in the case of clause (iii) below, on the last day
such Bank may lawfully continue to maintain Loans of that Type or, in the case
of clause (iv) below, on the day determined by such Bank to be the last
Business Day before the effective date of the applicable restriction) into, and
all pending requests for the making or continuation of or conversion into Loans
of such Type by such Bank shall be deemed requests for, Base Rate or Federal
Funds Rate Loans, if:
(i) on or prior to the determination of an
interest rate for a LIBOR Rate Loan of that Type for any Interest
Period, the Agent determines that for any reason appropriate
information is not available to it for purposes of determining the
Adjusted LIBOR Rate for such Interest Period;
(ii) on or prior to the first day of any Interest
Period for a LIBOR Rate Loan of that Type, the Required Banks
determine that the Adjusted LIBOR Rate as determined by the Agent for
such Interest Period would not accurately reflect the cost to such
Banks of making, continuing or converting into LIBOR Rate Loans of
such Type for such Interest Period;
(iii) at any time such Bank determines that any
Regulatory Change Enacted after the Effective Date makes it unlawful
for such Bank or its applicable Lending Office to make, continue or
convert into any LIBOR Rate Loan of that Type, or to comply with its
obligations hereunder in respect thereof or to charge interest based
on Qualifying Balances; or
(iv) such Bank determines that, by reason of any
Regulatory Change Enacted after the Effective Date, such
-33-
39
Bank or its applicable Lending Office is restricted, directly or
indirectly, in the amount that it may hold of (A) a category of
liabilities that includes deposits by reference to which, or on the
basis of which, the interest rate applicable to LIBOR Rate Loans of
that Type is directly or indirectly determined or (B) the category of
assets that includes LIBOR Rate Loans of that Type.
(b) If, as a result of this Section 7.01, any Loan of any
Bank that would otherwise be made or maintained as or converted into a LIBOR
Rate Loan of any Type for any Interest Period is instead made or maintained as
or converted into a Base Rate or Federal Funds Rate Loan, then, unless the
corresponding Loan of each of the other Banks is also to be made or maintained
as or converted into a Base Rate or Federal Funds Rate Loan, such Loan shall be
treated as being a LIBOR Rate Loan of such Type for such Interest Period for
all purposes of this Agreement (including the timing, application and proration
among the Banks of interest payments, conversions and repayments) except for
the calculation of the interest rate borne by such Loan. The Agent shall
promptly notify the Borrower and each Bank of the existence or occurrence of
any condition or circumstance specified in clause (a)(i) above, and each Bank
shall promptly notify the Borrower and the Agent of the existence or occurrence
of any condition or circumstance specified in Sections 7.01(a)(ii), (iii) and
(iv) applicable to such Bank's Loans, but the failure by the Agent or such Bank
to give any such notice shall not affect such Bank's rights hereunder.
Section 7.02. Regulatory Changes. If in the determination of
any Bank (a) any Regulatory Change Enacted after the Effective Date shall
directly or indirectly (i) reduce the amount of any sum received or receivable
by such Bank with respect to any Loan or the return to be earned by such Bank
on any Loan, (ii) impose a cost on such Bank or any Affiliate of such Bank that
is attributable to the making or maintaining of, or such Bank's Commitment to
make, any Loan, (iii) require such Bank or any Affiliate of such Bank to make
any payment on or calculated by reference to the gross amount of any amount
received by such Bank under any Loan Document or (iv) reduce, or have the
effect of reducing, the rate of return on any capital of such Bank or any
Affiliate of such Bank that such Bank or such Affiliate is required to maintain
on account of any Loan or such Bank's Commitment to make any Loan and (b) such
reduction,
-34-
40
increased cost or payment shall not be fully compensated for by an adjustment
in the applicable rates of interest payable under the Loan Documents, then the
Borrower shall pay to such Bank such additional amounts as such Bank determines
will, together with any adjustment in the applicable rates of interest payable
hereunder, fully compensate for such reduction, increased cost or payment.
Such additional amounts shall be payable, in the case of those applicable to
prior periods, within 15 days after request by such Bank for such payment and,
in the case of those applicable to future periods, on the dates specified, or
determined in accordance with a method specified, by such Bank. Each Bank will
promptly notify the Borrower of any determination made by it referred to in
clauses (a) and (b) above, but the failure to give such notice shall not affect
such Bank's right to compensation.
Section 7.03. Capital Requirements. If, in the determination
of any Bank, such Bank or any Affiliate of such Bank is required, under
Applicable Law, interpretations, directives, requests and guidelines (whether
or not having the force of law), to maintain capital on account of any Loan or
such Bank's Commitment to make any Loan, then, upon request by such Bank, the
Borrower shall from time to time thereafter pay to such Bank such additional
amounts as such Bank determines will fully compensate for any reduction in the
rate of return on the capital that such Bank or such Affiliate is so required
to maintain on account of such Loan or Commitment suffered as a result of such
capital requirement. Such additional amounts shall be payable, in the case of
those applicable to prior periods, within 15 days after request by such Bank
for such payment and, in the case of those relating to future periods, on the
dates specified, or determined in accordance with a method specified, by such
Bank.
Section 7.04. Funding Losses. The Borrower shall pay to each
Bank, upon request, such amount or amounts as such Bank determines are
necessary to compensate it for any loss, cost or expense incurred by it as a
result of (a) any payment, repayment or conversion of a LIBOR Rate Loan on a
date other than the last day of an Interest Period for such LIBOR Rate Loan or
(b) a LIBOR Rate Loan for any reason not being made or converted, or any
payment of principal thereof or interest thereon not being made, on the date
therefor determined in accordance with the applicable provisions of this
Agreement. At the election of such Bank, and without limiting the generality
of the foregoing, but without
-35-
41
duplication, such compensation on account of losses may include an amount equal
to the excess of (i) the interest that would have been received from the
Borrower under this Agreement on any amounts to be reemployed during an
Interest Period or its remaining portion over (ii) the interest component of
the return that such Bank determines it could have obtained had it placed such
amount on deposit in the interbank Dollar market selected by it for a period
equal to such Interest Period or its remaining portion.
Section 7.05. Certain Determinations. In making the
determinations contemplated by Sections 7.01, 7.02, 7.03, and 7.04, each Bank
may make such estimates, assumptions, allocations and the like that such Bank
in good faith determines to be appropriate, and such Bank's selection thereof
in accordance with this Section 7.05, and the determinations made by such Bank
on the basis thereof, shall be final, binding and conclusive upon the Borrower,
except, in the case of such determinations, for manifest errors in computation
or transmission. Each Bank shall furnish to the Borrower upon request a
certificate outlining in reasonable detail the computation of any amounts
claimed by it under Sections 7.01, 7.02, 7.03 and 7.04 and the assumptions
underlying such computations.
Section 7.06. Change of Lending Office. If an event occurs
with respect to a Lending Office of any Bank that obligates the Borrower to pay
any amount under Section 1.13, makes operable the provisions of clause (a)(iii)
or (iv) or clause (b) of Section 7.01, or entitles such Bank to make a claim
under Section 7.02 or 7.03, such Bank shall, if requested by the Borrower, use
reasonable efforts to designate another Lending Office or Offices the
designation of which will reduce the amount the Borrower is so obligated to
pay, eliminate such operability or reduce the amount such Bank is so entitled
to claim, provided that such designation would not, in the sole and absolute
discretion of such Bank, be disadvantageous to such Bank in any manner or
contrary to such Bank's policies. Each Bank may at any time and from time to
time change any Lending Office and shall give notice of any such change to the
Agent and the Borrower. Except in the case of a change in Lending Offices made
at the request of the Borrower, the designation of a new Lending Office by any
Bank shall not obligate the Borrower to pay any amount to such Bank under
Section 1.13, make operable the provisions of clause (a)(iii) or (iv) or clause
(b) of Section 7.01, or entitle
-36-
42
such Bank to make a claim under Section 7.02 or 7.03 if such obligation, the
operability of such clause or such claim results solely from such designation
and not from a subsequent Regulatory Change Enacted thereafter.
Section 7.07. Removal of a Bank. If a Bank makes a
determination under Section 7.01(a)(iii) or (iv) or asserts a claim under
Sections 1.13, 7.02 or 7.03 and the Required Banks shall not have made similar
determinations or filed similar claims (whether or not in differing amounts) in
respect of the same event that was the basis for the determination or claims of
such Bank, and so long as no Default exists, the Agent, the Borrower and such
Bank agree, if requested by the Borrower, to attempt to locate a Person that
will accept the assignment of the Loans, the Commitment, and the other rights
and obligations hereunder of such Bank and if such Person is located and is
acceptable to the Agent, such Bank agrees to assign its interest in its Loans,
Commitment and other rights and obligations hereunder to such Person in
accordance with Section 9.10, but only upon payment to it of an amount equal to
the unpaid principal amount of its Loans, together with interest thereon and
fees accrued to the date of payment and all other amounts then due and payable
to it hereunder. If no such Person is found, and so long as no Default exists,
the Borrower may elect to cancel the Commitments of such Bank and pay to such
Bank all such amounts. If Loans to be so assigned or paid include LIBOR Rate
Loans, the assignment or payment thereof shall occur on the last day of the
then current Interest Period.
ARTICLE 8
THE AGENT
Section 8.01. Appointment and Powers. Each Bank hereby
irrevocably appoints and authorizes The Bank of New York, and The Bank of New
York hereby agrees, to act as the (a) agent for such Bank hereunder with such
powers as are delegated to the Agent by the terms of the Loan Documents,
together with such other powers as are reasonably incidental thereto and (b)
the collateral agent and representative (within the meaning of Section 9-105(m)
of the Uniform Commercial Code) for such Bank under the Security Agreement with
such powers as are delegated to the Collateral Agent by the terms of the Loan
Documents together
-37-
43
with such other powers as are reasonably incidental thereto. The Agent's
duties shall be purely ministerial and it shall have no duties or
responsibilities except those expressly set forth in the Loan Documents. The
Agent shall not be required under any circumstances to take any action that, in
its judgment, (a) is contrary to any provision of the Loan Documents or
Applicable Law or (b) would expose it to any Liability or expense against which
it has not been indemnified to its satisfaction. The Agent shall not, by
reason of its serving as the Agent, be a trustee or other fiduciary for any
Bank.
Section 8.02. Limitation on Agent's Liability. Neither the
Agent nor any of its directors, officers, employees or agents shall be liable
or responsible for any action taken or omitted to be taken by it or them under
or in connection with the Loan Documents, except for its or their own gross
negligence, willful misconduct or knowing violations of law. The Agent shall
not be responsible to any Bank for (a) any recitals, statements,
representations or warranties contained in the Loan Documents or in any
certificate or other document referred to or provided for in, or received by
any of the Banks under, the Loan Documents, (b) the validity, effectiveness or
enforceability of the Loan Documents or any such certificate or other document,
(c) the value or sufficiency of the Collateral or (d) any failure by the
Borrower to perform any of its obligations under the Loan Documents. The Agent
shall be entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telex, telecopier, telegram or cable)
believed by it to be genuine and correct and to have been signed or given by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by the Agent.
As to any matters not expressly provided for by the Loan Documents, the Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under the Loan Documents in accordance with instructions signed by the Required
Banks or all Banks as may be so required, and such instructions of the Required
Banks and any action taken or failure to act pursuant thereto shall be binding
on all of the Banks.
Section 8.03. Defaults. The Agent shall not be deemed to
have knowledge of the occurrence of a Default (other than the non-payment to it
of principal of or interest on Loans or fees) unless the Agent has received
notice from a Bank or the Borrower
-38-
44
specifying such Default and stating that such notice is a "Notice of Default".
In the event that the Agent receives such a notice of the occurrence of a
Default, it shall give prompt notice thereof to the Banks. In the event of any
Default, the Agent shall, in addition to taking either or both of the actions
referred to in clauses (a) and (b) of the first sentence of Section 6.02 if so
directed by the Required Banks and if such Default constitutes an Event of
Default, take such other action with respect to such Default as shall be
reasonably directed by the Required Banks. Unless and until the Agent shall
have received such directions, in the event of any Default, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default as it shall deem advisable in the best
interests of the Banks.
Section 8.04. Rights as a Bank. The Person acting as the
Agent that is also a Bank shall, in its capacity as a Bank, have the same
rights and powers under the Loan Documents as any other Bank and may exercise
the same as though it were not acting as the Agent, and the term "Bank" or
"Banks" shall include such Person in its individual capacity. The Person
acting as the Agent and its Affiliates may (without having to account therefor
to any Bank) accept deposits from, lend money to and generally engage in any
kind of banking, trust or other business with the Borrower and its Affiliates
as if it were not acting as the Agent, and such Person and its Affiliates may
accept fees and other consideration from the Borrower and its Affiliates for
services in connection with the Loan Documents or otherwise without having to
account for the same to the Banks.
Section 8.05. Indemnification. The Banks agree to indemnify
the Agent and each Co-Agent (to the extent not reimbursed by the Borrower
hereunder), ratably on the basis of their respective Commitments, for any and
all Liabilities, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against the Agent or such Co-Agent (including the
costs and expenses that the Borrower is obligated to pay hereunder) in any way
relating to or arising out of the Loan Documents or any other documents
contemplated thereby or referred to therein or the transactions contemplated
thereby or the enforcement of any of the terms thereof or of any such other
documents, provided that no Bank shall be liable for any of the foregoing to
the extent they arise from gross
-39-
45
negligence, willful misconduct or knowing violations of law by the Agent or
such Co-Agent.
Section 8.06. Non-Reliance on Agent and Other Banks. Each
Bank agrees that it has made and will continue to make, independently and
without reliance on the Agent or any other Bank, and based on such documents
and information as it deems appropriate, its own credit analysis of the
Borrower, its own evaluation of the Collateral and its own decision to enter
into the Loan Documents and to take or refrain from taking any action in
connection therewith. Except for notices, reports and other documents and
information expressly required to be furnished to the Banks by the Agent under
the Loan Documents, the Agent shall not have any obligation to provide any Bank
with any information concerning the business, status or condition of the
Borrower or any Subsidiary, the Loan Documents or the Collateral that may come
into the possession of the Agent or any of its Affiliates.
Section 8.07. Execution of Security Agreement by Agent. Each
Bank hereby authorizes the Agent to execute, deliver and perform, in the name
of and on behalf of such Bank, the Security Agreement.
Section 8.08. Resignation of the Agent. The Agent may at any
time give notice of its resignation to the Banks and the Borrower which shall
be effective upon the earlier of (a) the date a successor Agent shall have
accepted its appointment as Agent, and (b) the 30th day after the giving of
such notice. Upon receipt of any such notice of resignation, the Required
Banks may, with the approval of the Borrower which approval shall not be
unreasonably withheld, appoint a successor Agent. If no successor Agent shall
have been so appointed and have accepted such appointment within 30 days after
the retiring Agent's giving of notice of resignation, then the Borrower may
appoint a successor Agent which shall be one of the Banks other than the Bank
that is the resigning Agent. Upon the acceptance by any Person of its
appointment as a successor Agent, (a) such Person shall thereupon succeed to
and become vested with all the rights, powers, privileges and future duties and
obligations of the retiring Agent and the retiring Agent shall be discharged
from its future duties and obligations as Agent under the Loan Documents and
(b) the retiring Agent shall promptly transfer all Collateral within its
possession or control to the possession or control of the successor Agent and
shall execute and deliver such
-40-
46
notices, instructions and assignments as may be necessary or desirable to
transfer the rights of the Agent with respect to the Collateral to the
successor Agent. After any retiring Agent's resignation as Agent, the
provisions of this Article 8 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting
as the Agent.
ARTICLE 9
MISCELLANEOUS
Section 9.01. Notices and Deliveries. (a) Notices and
Materials Other than Collateral. (i) Manner of Delivery. All notices,
communications and materials (including all Information) to be given or
delivered pursuant to the Loan Documents shall, except in those cases where
giving notice by telephone is expressly permitted, be given or delivered in
writing (which shall include telex and telecopy transmissions). Notices under
Sections 1.02, 1.03(e), 1.05, 1.07 and 6.02 may be by telephone, promptly
confirmed in writing. In the event of a discrepancy between any telephonic
notice and any written confirmation thereof, such written confirmation shall be
deemed the effective notice.
(ii) Addresses. Except as otherwise provided in the
Security Agreement, all notices, communications and materials to be given or
delivered pursuant to the Loan Documents shall be given or delivered at the
following respective addresses and telex, telecopier and telephone numbers and
to the attention of the following individuals or departments:
(A) if to the Borrower, to it at:
Resource Bancshares Mortgage Group, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
Chief Financial Officer
-41-
47
with a copy to:
Xxxxx X. Xxxxxxx, Xx.
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(B) if to the Agent or the Collateral Agent,
to it at:
The Bank of New York
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxx X. Dominus
Vice President
with a copy to:
Xxxxxxx Xxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(C) if to any Bank, to it at the address or telex,
telecopier or telephone number and to the attention
of the individual or department, set forth below such
Bank's name under the heading "Notice Address" on
Annex A or, in the case of a Bank that becomes a Bank
pursuant to an assignment, set forth under the
heading "Notice Address" in the Notice of Assignment
given to the Borrower and the Agent with respect to
such assignment;
or at such other address or telex, telecopier or telephone number or to the
attention of such other individual or department as the party to which such
information pertains may hereafter specify for the purpose in a notice
specifically captioned "Notice of Change of Address" given to (x) if the party
to which such information pertains is the Borrower, the Agent and each Bank,
(y) if the party to which such information pertains is the Agent,
-42-
48
the Borrower and each Bank and (z) if the party to which such information
pertains is a Bank, the Borrower and the Agent.
(iii) Effectiveness. Each notice and communication
and any material to be given or delivered pursuant to the Loan Documents shall
be deemed so given or delivered (A) if sent by registered or certified mail,
postage prepaid, return receipt requested, on the third Business Day after such
notice, communication or material, addressed as above provided, is delivered to
a United States post office and a receipt therefor is issued thereby, (B) if
sent by any other means of physical delivery, when such notice, communication
or material is delivered to the appropriate address as above provided, (C) if
sent by telex, when such notice, communication or material is transmitted to
the appropriate number determined as above provided in this Section 9.01 and
the appropriate answer-back is received, (D) if sent by telecopier, when such
notice, communication or material is transmitted to the appropriate telecopier
number as above provided and is received at such number and (E) if given by
telephone, when communicated to the individual or any member of the department
specified as the individual or department to whose attention notices,
communications and materials are to be given or delivered, or, in the case of
notice by the Agent to the Borrower under Section 6.02 given by telephone as
above provided, if any individual or any member of the department to whose
attention notices, communications and materials are to be given or delivered is
unavailable at the time, to any other officer of the Borrower, except that (x)
notices of a change of address, telex, telecopier or telephone number or
individual or department to whose attention notices, communications and
materials are to be given or delivered shall not be deemed given until received
and (y) notices, communications and materials to be given or delivered to the
Agent or any Bank pursuant to Sections 1.02, 1.03(e), 1.05, 1.07 and 1.12(b)
and Annex E shall not be deemed given or delivered until received by the
officer (or such officer's designated substitute) of the Agent or such Bank to
whose attention, at the time in question, notices hereunder are to be given.
(iv) Reasonable Notice. Any requirement under
Applicable Law of reasonable notice by the Agent or the Banks to the Borrower
of any event in connection with, or in any way related to, the Loan Documents
or the exercise by the Agent or
-43-
49
the Banks of any of their rights thereunder shall be met if notice of such
event is given to the Borrower in the manner prescribed above at least 10 days
before (A) the date of such event or (B) the date after which such event will
occur.
(b) Collateral. All Collateral shall be delivered in
accordance with the provisions of the Security Agreement.
Section 9.02. Expenses; Indemnification. Whether or not any
Loans are made hereunder, the Borrower shall:
(a) pay or reimburse the Agent and each Bank for all transfer,
documentary, stamp and similar taxes, and all recording and filing fees and
taxes, payable in connection with, arising out of, or in any way related to,
the execution, delivery and performance of the Loan Documents or the making of
the Loans;
(b) pay or reimburse the Agent for all out-of-pocket costs and
expenses (including reasonable fees and disbursements of legal counsel,
appraisers, accountants and other experts employed or retained by the Agent)
incurred by the Agent in connection with, arising out of, or in any way related
to (i) the negotiation, preparation, syndication, execution and delivery of (A)
the Loan Documents and (B) whether or not executed, any waiver, amendment or
consent thereunder or thereto, (ii) the administration of and any operations
under the Loan Documents, (iii) consulting with respect to any matter in any
way arising out of, related to, or connected with, the Loan Documents,
including (A) the protection or preservation of the Collateral, (B) the
protection, preservation, exercise or enforcement of any of the rights of the
Agent, the Collateral Agent or the Banks in, under or related to the Collateral
or the Loan Documents or (C) the performance of any of the obligations of the
Agent, the Collateral Agent or the Banks under or related to the Loan
Documents, (iv) protecting or preserving the Collateral or (v) protecting,
preserving, exercising or enforcing any of the rights of the Agent, the
Collateral Agent or the Banks in, under or related to the Collateral or the
Loan Documents, including defending the Security Interest as a valid,
perfected, first priority security interest in the Collateral subject only to
Permitted Liens;
(c) pay or reimburse each Bank for all out-of-pocket costs and
expenses (including reasonable fees and disbursements
-44-
50
of legal counsel and other experts employed or retained by such Person)
incurred by such Person in connection with, arising out of, or in any way
related to, (i) consulting during a Default with respect to (A) the protection,
preservation, exercise or enforcement of any of its rights in, under or related
to the Collateral or the Loan Documents or (B) the performance of any of its
obligations under or related to the Loan Documents or (ii) protecting,
preserving, exercising or enforcing during a Default any of its rights in,
under or related to the Collateral or the Loan Documents;
(d) indemnify and hold each Indemnified Person harmless from
and against all losses (including judgments, penalties and fines) suffered, and
pay or reimburse each Indemnified Person for all costs and expenses (including
fees and disbursements of legal counsel and other experts employed or retained
by such Indemnified Person) incurred, by such Indemnified Person in connection
with, arising out of, or in any way related to any Default by the Borrower in
the performance or observance of any term, covenant, condition or agreement
contained in the Loan Documents; and
(e) indemnify and hold each Indemnified Person harmless from
and against all losses (including judgments, penalties and fines) suffered, and
pay or reimburse each Indemnified Person for all out-of-pocket costs and
expenses (including reasonable fees and disbursements of legal counsel and
other experts employed or retained by such Indemnified Person) incurred, by
such Indemnified Person in connection with, arising out of, or in any way
related to (i) any Loan Document Related Claim (whether asserted by such
Indemnified Person or the Borrower or any other Person), including the
prosecution or defense thereof and any litigation or proceeding with respect
thereto (whether or not, in the case of any such litigation or proceeding, such
Indemnified Person is a party thereto), or (ii) any investigation, governmental
or otherwise, arising out of, related to, or in any way connected with, the
Loan Documents or the relationships established thereunder, except that the
foregoing indemnity shall not be applicable to any loss suffered by any
Indemnified Person to the extent such loss is determined by a judgment of a
court that is binding on the Borrower and such Indemnified Person, final and
not subject to review on appeal, to be the result of acts or omissions on the
part of such Indemnified Person constituting (w) gross negligence, (x) willful
misconduct, (y)
-45-
51
knowing violations of law or (z) in the case of claims by the Borrower against
such Indemnified Person, such Indemnified Person's failure to observe any other
standard applicable to it under any of the other provisions of the Loan
Documents or, but only to the extent not waivable thereunder, Applicable Law.
Section 9.03. Amounts Payable Due Upon Request for Payment.
All amounts payable by the Borrower under Section 9.02 and under the other
provisions of the Loan Documents shall, except as otherwise expressly provided,
be immediately due upon request for the payment thereof.
Section 9.04. Remedies of the Essence. The various rights
and remedies of the Agent, the Collateral Agent, the Co-Agents and the Banks
under the Loan Documents are of the essence of those agreements, and the Agent,
the Collateral Agent, the Co-Agents and the Banks shall be entitled to obtain a
decree requiring specific performance of each such right and remedy.
Section 9.05. Rights Cumulative. Each of the rights and
remedies of the Agent, the Collateral Agent, the Co-Agents and the Banks under
the Loan Documents shall be in addition to all of their other rights and
remedies under the Loan Documents and Applicable Law, and nothing in the Loan
Documents shall be construed as limiting any such rights or remedies.
Section 9.06. Disclosures. The Agent, the Collateral Agent,
the Co-Agents and the Banks may disclose to, and exchange and discuss with, any
other Person (the Agent, the Collateral Agent, the Co-Agents, the Banks and
each such other Person being hereby authorized to do so) any information
concerning the Collateral or the Borrower or any Subsidiary (whether received
by the Agent, the Collateral Agent, the Co-Agents, the Banks or such other
Person in connection with or pursuant to the Loan Documents or otherwise) for
the purpose of (a) complying with Applicable Law or any legal proceedings, (b)
protecting or preserving the Collateral, (c) protecting, preserving, exercising
or enforcing any of their rights in, under or related to the Collateral or the
Loan Documents, (d) performing any of their obligations under or related to the
Loan Documents or (e) consulting with respect to any of the foregoing matters,
provided that, except for disclosures and exchanges contemplated by clause (a),
the Person to whom any information that is not public information is
-46-
52
disclosed to or exchanged with agrees to treat such information as confidential
information.
Section 9.07. Amendments; Waivers. Any term, covenant,
agreement or condition of the Loan Documents may be amended, and any right
under the Loan Documents may be waived, if, but only if, such amendment or
waiver is in writing and is signed by (a) the Required Banks and, if the rights
and duties of the Agent or the Collateral Agent are affected thereby, by the
Agent or the Collateral Agent, as the case may be, and (b) in the case of an
amendment, by the Borrower; provided, however, that no amendment or waiver
shall be effective, unless in writing and signed by each Bank affected thereby,
to the extent it (i) changes the amount of such Bank's Commitment, (ii) reduces
the principal of or the rate of interest on such Bank's Loans or Notes or the
fees payable to such Bank hereunder, (iii) postpones any date fixed for any
payment of principal of or interest on such Bank's Loans or Notes or the fees
payable to such Bank hereunder, (iv) except as expressly provided in the
Security Agreement, releases any portion of the Collateral from the Security
Interest, (v) amends the definitions of the "Collateral", "Eligible Servicing
Rights" or "Required Banks" or the definition of any defined term used in any
of the foregoing definitions or (vi) amends Section 1.13, Section 1.14, Article
2, Article 7, Section 9.02, Section 9.09, Section 9.10(a), this Section 9.07,
any other provision of this Agreement requiring the consent or other action of
all or a specified percentage of the Banks or Section 3 of the Security
Agreement. Unless otherwise specified in such waiver, a waiver of any right
under the Loan Documents shall be effective only in the specific instance and
for the specific purpose for which given. No election not to exercise, failure
to exercise or delay in exercising any right, nor any course of dealing or
performance, shall operate as a waiver of any right of the Agent or any Bank
under the Loan Documents or Applicable Law, nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or
the exercise of any other right of the Agent, the Collateral Agent or any Bank
under the Loan Documents or Applicable Law.
Each waiver or amendment given pursuant to this Section 9.07
shall be effective only in the specific instance and for the specific purpose
given.
-47-
53
Section 9.08. Set-Off; Suspension of Payment and Performance.
The Agent, the Collateral Agent and each Bank is hereby authorized by the
Borrower, at any time and from time to time, without notice, (a) during any
Event of Default, to set-off against, and to appropriate and apply to the
payment of, the Liabilities of the Borrower under the Loan Documents (whether
owing to such Person or to any other Person that is the Agent, the Collateral
Agent or a Bank and whether matured or unmatured, fixed or contingent or
liquidated or unliquidated) any and all Liabilities owing by such Person or any
of its Affiliates to the Borrower (whether payable in Dollars or any other
currency, whether matured or unmatured and, in the case of Liabilities that are
deposits, whether general or special, time or demand and however evidenced and
whether maintained at a branch or office located within or without the United
States) and (b) during any Default, to suspend the payment and performance of
such Liabilities owing by such Person or its Affiliates and, in the case of
Liabilities that are deposits, to return as unpaid for insufficient funds any
and all checks and other items drawn against such deposits.
Section 9.09. Sharing of Recoveries. Each Bank agrees that,
if, for any reason, including as a result of (a) the exercise of any right of
counterclaim, set-off, banker's lien or similar right (including its right
under Section 1.11(c)), (b) its claim in any applicable bankruptcy, insolvency
or other similar law being deemed secured by a Debt owed by it to the Borrower,
including a claim deemed secured under Section 506 of the Bankruptcy Code, or
(c) the allocation of payments by the Agent or the Borrower in a manner
contrary to the provisions of Section 1.14, such Bank shall receive payment of
a proportion of the aggregate amount due and payable to it hereunder as
principal of or interest on the Loans or fees that is greater than the
proportion received by any other Bank in respect of the aggregate of such
amounts due and payable to such other Bank hereunder, then the Bank receiving
such proportionately greater payment shall purchase participations (which it
shall be deemed to have done simultaneously upon the receipt of such payment)
in the rights of the other Banks hereunder so that all such recoveries with
respect to such amounts due and payable hereunder (net of costs of collection)
shall be pro rata; provided that if all or part of such proportionately greater
payment received by the purchasing Bank is thereafter recovered by or on behalf
of the Borrower from such Bank, such purchases shall be rescinded and
-48-
54
the purchase prices paid for such participations shall be returned to such Bank
to the extent of such recovery, but without interest (unless the purchasing
Bank is required to pay interest on the amount recovered to the Person
recovering such amount, in which case the selling Bank shall be required to pay
interest at a like rate). The Borrower expressly consents to the foregoing
arrangements and agrees that any holder of a participation in any rights
hereunder so purchased or acquired pursuant to this Section 9.09 shall, with
respect to such participation, be entitled to all of the rights of a Bank under
Sections 7.02, 7.04, 9.02 and 9.08 (subject to any condition imposed on a Bank
hereunder with respect thereto) and may exercise any and all rights of set-off
with respect to such participation as fully as though the Borrower were
directly indebted to the holder of such participation for Loans in the amount
of such participation.
Section 9.10. Assignments and Participations. (a)
Assignments. (i) The Borrower may not assign any of its rights or obligations
under the Loan Documents without the prior written consent of the Agent, the
Collateral Agent and each Bank, and no assignment of any such obligation shall
release the Borrower therefrom unless the Agent, the Collateral Agent and each
Bank shall have consented to such release in a writing specifically referring
to the obligation from which the Borrower is to be released.
(ii) Each Bank may from time to time assign any or
all of its rights and future obligations under the Loan Documents to one or
more Persons; provided that, except in the case of the grant of a security
interest to a Federal Reserve Bank (which may be made without condition or
restriction), (A) no such assignment shall be effective unless (1) (aa) the
assignment is consented to by the Borrower and the Agent (which consent shall
not be unreasonably withheld), and (bb) the Agent shall have been paid by the
assignee, for its own account, an administrative fee for processing such
assignment in the amount of $2,000, and (2) a Notice of Assignment with respect
to the assignment, duly executed by the assignor and the assignee, shall have
been given to the Borrower and the Agent, (B) no such assignment shall reduce
the assignor Bank's aggregate Commitment to (1) if such Bank's original
aggregate Commitment is equal to or greater than $10,000,000, less than
$10,000,000 and (2) if such Bank's original aggregate Commitment is equal to or
less than $10,000,000, less than 50% of its original aggregate
-49-
55
Commitment, (C) in the case of an assignment of a Registered Note, such
Registered Note shall have been surrendered for registration of assignment duly
endorsed by (or accompanied by a written instrument of assignment duly executed
by) the Registered Holder and such assignment shall have been recorded on the
Registers, and (D) any assignment shall include a pro rata portion of the HFS
Commitment, the HFI Commitment, the Receivables Commitment, the HFS Loans, the
HFI Loans and the Receivables Loans of the assignor, unless otherwise consented
to by the Borrower (such consent not to be unreasonably withheld), except that
subclauses (A)(1) and (B) of this Section 9.10(a)(ii) shall not apply to an
assignment by an assignor Bank to its Affiliates. Upon any effective
assignment, the assignee shall be obligated to perform the obligations so
assigned and shall have all of the rights of a Bank; provided, however, that no
assignee shall be entitled to any amounts that would otherwise be payable to it
with respect to its assignment under Section 1.13 or 7.02 unless (x) such
amounts are payable in respect of Regulatory Changes Enacted after the date the
applicable assignment agreement was executed or (y) such amounts would have
been payable to the Bank that made such assignment if such assignment had not
been made. In the event of any effective assignment by a Bank, the Borrower
shall, against (except in the case of a partial assignment) receipt of the
existing Notes of the assignor Bank, issue new Notes to the assignee Bank and
the assignor Bank appropriately reflecting such assignment.
(b) Participations. Each Bank may from time to time sell or
otherwise grant participations in any or all of its rights and obligations
under the Loan Documents without the consent of the Borrower, the Agent, the
Collateral Agent or any other Bank. In the event of any such grant by a Bank
of a participation, such Bank's obligations under the Loan Documents to the
other parties thereto shall remain unchanged, such Bank shall remain solely
responsible for the performance thereof, and the Borrower, the Agent, the
Collateral Agent and the other Banks may continue to deal solely and directly
with such Bank in connection with such Bank's rights and obligations
thereunder. The Bank may not grant to any holder of a participation the right
to require such Bank to take or omit to take any action under the Loan
Documents, except that a Bank may grant to any such holder the right to require
such holder's consent to (i) reduce the principal of or the rate of interest on
such Bank's Loans or the fees payable to such Bank hereunder, (ii) postpone any
date fixed
-50-
56
for any payment of principal of or interest on such Bank's Loans or the fees
payable to such Bank hereunder, (iii) permit the Borrower to assign any of its
obligations under the Loan Documents to any other Person or (iv) release any
Collateral from the Security Interest except as required or contemplated by the
Loan Documents. Each holder of a participation in any rights hereunder shall,
with respect to such participation, but only to the extent the applicable
participation agreement so provides, be entitled to all of the rights of a Bank
under Sections 1.13, 7.02, 7.03, 7.05, and 9.02(d) and (e) (subject to any
conditions imposed on a Bank hereunder with respect thereto, including delivery
of the forms and certificates required under Section 1.13(d)) and may exercise
any and all rights of set-off with respect to such participation as fully as
though the Borrower were directly indebted to the holder of such participation
for Loans in the amount of such participation; provided, however, that no
holder of a participation shall be entitled to any amounts that would otherwise
be payable to it with respect to its participation under Section 1.13 or 7.02
unless (x) such amounts are payable in respect of Regulatory Changes Enacted
that are enacted, adopted or issued after the date the applicable participation
agreement was executed or (y) such amounts would have been payable to the Bank
that granted such participation if such participation had not been granted.
Section 9.11. GOVERNING LAW. THE RIGHTS AND DUTIES OF THE
BORROWER, THE AGENT, THE CO-AGENTS AND THE BANKS UNDER THIS AGREEMENT AND THE
NOTES (INCLUDING MATTERS RELATING TO THE MAXIMUM PERMISSIBLE RATE) SHALL,
PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
Section 9.12. Judicial Proceedings; Waiver of Jury Trial.
Any judicial proceeding brought against the Borrower with respect to any Loan
Document Related Claim may be brought in any court of competent jurisdiction in
the City of New York, and, by execution and delivery of this Agreement, the
Borrower (a) accepts, generally and unconditionally, the nonexclusive
jurisdiction of such courts and any related appellate court and irrevocably
agrees to be bound by any judgment rendered thereby in connection with any Loan
Document Related Claim and (b) irrevocably waives any objection it may now or
hereafter have as to the venue of any such proceeding brought in such a court
or that such a court is an inconvenient forum. The Borrower hereby
-51-
57
waives personal service of process and consents that service of process upon it
may be made by certified or registered mail, return receipt requested, at its
address specified or determined in accordance with the provisions of Section
9.01(a)(ii), and service so made shall be deemed completed on the fifth
Business Day after such service is deposited in the mail. Nothing herein shall
affect the right of the Agent, the Collateral Agent, any Bank or any other
Indemnified Person to serve process in any other manner permitted by law or
shall limit the right of the Agent, the Collateral Agent, any Bank or any other
Indemnified Person to bring proceedings against the Borrower in the courts of
any other jurisdiction. Any judicial proceeding by the Borrower against the
Agent, the Collateral Agent or any Bank involving any Loan Document Related
Claim shall be brought only in a court located in the City and State of New
York and each Bank (a) accepts, generally and unconditionally, the jurisdiction
of such courts and any related appellate court and irrevocably agrees to be
bound by any judgment rendered thereby in connection with any Loan Document
Related Claim and (b) irrevocably waives any objection it may now or hereafter
have as to the venue of any such proceeding brought in such a court or that
such court is an inconvenient forum. THE BORROWER, THE AGENT, THE COLLATERAL
AGENT, EACH CO-AGENT AND EACH BANK HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING ANY LOAN DOCUMENT RELATED CLAIM.
Section 9.13. LIMITATION OF LIABILITY. NEITHER THE BORROWER,
THE AGENT, THE COLLATERAL AGENT, THE CO-AGENTS, THE BANKS NOR ANY OTHER
INDEMNIFIED PERSON SHALL HAVE ANY LIABILITY WITH RESPECT TO, AND EACH SUCH
PERSON HEREBY WAIVES, RELEASES AND AGREES NOT TO XXX EACH OTHER SUCH PERSON
FOR, ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES SUFFERED BY SUCH PERSON IN
CONNECTION WITH ANY LOAN DOCUMENT RELATED CLAIM.
Section 9.14. Severability of Provisions. Any provision of
the Loan Documents that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
thereof or affecting the validity or enforceability of such provision in any
other jurisdiction. To the extent permitted by Applicable Law, the Borrower
hereby waives any provision of Applicable Law that renders any provision of the
Loan Documents prohibited or unenforceable in any respect.
-52-
58
Section 9.15. Counterparts. Each Loan Document may be signed
in any number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto were upon the same instrument.
Section 9.16. Survival of Obligations. Except as otherwise
expressly provided therein, the rights and obligations of the Borrower, the
Agent, the Collateral Agent, the Co-Agents, the Banks and the other Indemnified
Persons under the Loan Documents shall survive the Repayment Date and the
termination of the Security Interest.
Section 9.17. Entire Agreement. This Agreement, the Notes
and the other Loan Documents embody the entire agreement among the Borrower,
the Agent and Collateral Agent, the Co-Agents and the Banks relating to the
subject matter thereof and supersede all prior agreements, representations and
understandings, if any, relating to the subject matter hereof.
Section 9.18. Successors and Assigns. All of the provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
Section 9.19. Registered Notes. A Bank that is a Non-US Bank
and that has complied with Section 1.13(d)(i)(A) may have its Notes issued as
Registered Notes, and for this purpose the Borrower shall cause to be
maintained a Register. Once issued, Registered Notes may not be exchanged for
Notes that are not Registered Notes and the ownership of Registered Notes, and
of the Loans evidenced thereby, may be transferred only in accordance with the
provisions of Section 9.10(a)(ii)(C).
Section 9.20. No Novation. The parties hereto hereby
specifically agree that no novation, or release of the Security Interest, is
intended by the execution and delivery of this Agreement and the other Loan
Documents executed and delivered in connection herewith.
-53-
59
ARTICLE 10
DEFINITIONS
Section 10.01. Defined Terms. For the purposes of this
Agreement:
"Agreement" means this Second Amended and Restated Secured
Revolving/Term Credit Agreement, including all schedules, annexes and exhibits
hereto.
"Allocated Qualifying Balances" means, with respect to any
Bank, the daily amount of Qualifying Balances held by such Bank on a calendar
day (or determined on such other basis as such Bank and the Borrower may agree)
allocated to the Loans of such Bank, taking into account any carryforwards of
surplus Allocated Qualifying Balances from any previous day or period, and
which balances are not included in determining "Allocated Qualifying Balances"
under any other credit arrangements between such Bank and the Borrower, as
agreed between such Bank and the Borrower. Qualifying Balances allocated to a
Loan for purposes of determining whether such Loan is Balance Funded shall not
be considered Qualifying Balances for purposes of determining whether any other
Loan is Balance Funded.
"Approved Hedge Contract" means a Hedge Contract entered into
between the Borrower and a counterparty acceptable to the Agent.
"Approved Purchase and Sale Agreement" means, at any time, a
Purchase and Sale Agreement with respect to which each of the following
statements is true and correct at such time:
(a) a true and correct copy of such Purchase and Sale
Agreement shall have been delivered to the Agent not less than (i) if
(A) notice of the identity of the proposed Purchase Obligor and drafts
of the proposed Purchase and Sale Agreement have been given to the
Banks not less than five Business Days prior to the inclusion of any
HFS Borrowing Base Servicing Rights arising under Servicing Contracts
designated for sale thereunder in the HFS Borrowing Base and (B) the
execution copy of such Purchase and Sale Agreement does not, in the
judgment of the Agent, differ substantially from the drafts thereof
previously
-54-
60
delivered to the Banks, one Business Day, or (ii) in all other cases,
five Business Days, prior to the inclusion of any such HFS Borrowing
Base Servicing Rights in the HFS Borrowing Base;
(b) the terms of such Purchase and Sale Agreement are, and
the Purchase Obligor under such Purchase and Sale Agreement is,
acceptable to the Agent and Co-Agents;
(c) the obligation of such Purchase Obligor to purchase
Servicing Contracts thereunder is the valid, legally enforceable
obligation of such Purchase Obligor with respect thereto and not
subject to any present, or contingent, and no facts exist that are the
basis for any future, offset or counterclaim or other defense or
dispute on the part of such Purchase Obligor, other than any offset or
counterclaim or other defense contemplated in such Purchase and Sale
Agreement;
(d) such Purchase Obligor (i) is not insolvent or the
subject of any bankruptcy or insolvency proceedings of any kind or of
any other proceeding or action, threatened or pending, that might have
a Materially Adverse Effect on its business or (ii) has not made an
assignment for the benefit of creditors or consented to or suffered
the appointment of a receiver, trustee, liquidator, custodian or the
like for it or for a significant portion of its assets or affairs;
(e) such Purchase Obligor with respect thereto is not
located outside of the United States (excluding for this purpose the
Commonwealth of Puerto Rico);
(f) the Borrower has observed and complied with all laws
of the jurisdiction in which such Purchase Obligor on such Purchase
and Sale Agreement is located that, if not observed and complied with,
would deny to the Borrower access to the courts of such jurisdiction;
(g) the Purchase Price of Servicing Contracts under such
Purchase and Sale Agreement is for a set amount in Dollars, not
subject to reduction or deduction of any kind, including any reduction
or deduction for any set-off, recoupment, counterclaim (whether
arising in tort, contract
-55-
61
or otherwise) or Tax, except for any such arising under the applicable
Purchase and Sale Agreement; and
(h) no covenant, representation or warranty applicable to
such Purchase and Sale Agreement under any of the Loan Documents has
been breached or is inaccurate in any respect.
"Average Purchase Price Percentage" means, on any date, the
average of the Purchase Price Percentages on that date.
"Balance Deficiency Fee" shall have the meaning ascribed to
that term in Section 1.03(a)(ii).
"Balance Funded" means as applied to the Base Rate or Federal
Funds Rate Loans of a Bank on any day (or for such other period as the Borrower
and such Bank may agree), the aggregate principal amount of such Loans not in
excess of such Bank's Allocated Qualifying Balances on such day (or for such
period).
"Balance Funded Amount" shall have the meaning ascribed to
that term in Section 1.03(a)(ii).
"Balance Funded Rate" means the rate specified in Section
1.03(a)(i)(A)(2), 1.03(a)(i)(B)(2) or 1.03(a)(i)(C)(2), as the case may be.
The Balance Funded Rate shall be computed on a daily basis unless the Borrower
and any Bank agree to compute the Balance Funded Rate applicable to such Bank's
Loans on a basis other than a daily basis.
"Bank" means (a) The Bank of New York and the Co-Agents, in
their respective capacities as Banks, and each Person listed on the signature
pages hereof following the Co-Agents and (b) any Person that becomes, after the
Effective Date, a Bank pursuant to the provisions of Section 1.07(b) or Section
9.10(a), including as a result of the Borrower's election under Section 7.07.
"Bank Account" means a deposit account designated by the Agent
as a deposit account into which a Purchase Obligor is to make payments with
respect to Receivables.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (a) the Prime Rate in effect on such day and (b)
-56-
62
the sum of the Federal Funds Rate in effect on such day plus 1/2%.
"Base Rate Loan" means any Loan the interest on which is, or
is to be, as the context may require, computed on the basis of the Base Rate.
"Borrower" or "RBMG" means Resource Bancshares Mortgage Group,
Inc., a Delaware corporation.
"Borrowing Base" means the HFI Borrowing Base, the HFS
Borrowing Base or the Receivables Borrowing Base, as the context may require.
"Borrowing Base Certificate" means a HFI Borrowing Base
Certificate, a HFS Borrowing Base Certificate and a Receivables Borrowing Base
Certificate.
"Borrowing Base Deficiency" means, at any time, the amount by
which the aggregate unpaid principal amount of Loans of any Kind outstanding at
such time exceeds the applicable Borrowing Base at such time.
"Borrowing Base Receivable" means, at any time, an Eligible
Receivable with respect to which each of the following statements is true and
correct at such time:
(a) the amount of such Eligible Receivable has been reduced
by all Deductions known to the Borrower at such time;
(b) such Eligible Receivable is subject to the Security
Interest and to no other Liens; and
(c) the Security Interest is perfected as to such Eligible
Receivable.
"Collateral" has the meaning ascribed to that term in the
Security Agreement.
"Collateral Agent" means The Bank of New York, in its capacity
as collateral agent under and as defined in the Security Agreement, and any
successor pursuant to Section 7 of the Security Agreement.
-57-
63
"Collateral Obligation" means a Liability constituting part of
the Collateral and includes any such constituting or arising under any
Receivable.
"Commitment" means, as to any Bank, such Bank's HFI
Commitment, HFS Commitment or Receivables Commitment, or, as the context may
require, all such Commitments of such Bank.
"Confirmation of Sale" has the meaning ascribed to that term
in the definition of "Designated Purchase and Sale Agreement."
"Deduction" means, at any time, the amount by which a
Receivable may, at such time, under the terms of the applicable Designated
Purchase and Sale Agreement, be reduced, whether such reduction is by way of
deduction, set-off, credit or otherwise and includes all deductions for tax
servicing fees, late document fees and transfer fees, but excludes any
applicable Holdback.
"Designated Purchase and Sale Agreement" has the meaning
ascribed to that term in the Security Agreement.
"Eligible Receivable" means, at any time, a Receivable with
respect to which each of the following statements is true and correct at such
time:
(a) such Receivable represents the purchase price payable to
the Borrower under a Designated Purchase and Sale Agreement;
(b) a true and correct copy of such Purchase and Sale
Agreement shall have been delivered to the Agent not less than (i) if
(A) notice of the identity of the proposed Purchase Obligor and drafts
of the proposed Purchase and Sale Agreement have been given to the
Banks not less than five Business Days prior to the inclusion of such
Receivable in the Receivables Borrowing Base and (B) the execution
copy of such Purchase and Sale Agreement does not, in the judgment of
the Agent, differ substantially from the drafts thereof previously
delivered to the Banks, one Business Day, or (ii) in all other cases,
five Business Days, prior to the inclusion of such Receivable in the
Receivables Borrowing Base;
-58-
64
(c) the terms of such Purchase and Sale Agreement are, and
such Purchase and Sale Agreement is with a Purchase Obligor,
acceptable to the Co-Agents;
(d) (i) there shall be in full force and effect an agreement
in writing, in the form of Schedule 10.01(a), between the Purchase
Obligor with respect to such Receivable, the Borrower and the Agent
under which such Purchase Obligor shall agree to pay all amounts
payable by it in respect of Receivables that relate to such Purchase
and Sale Agreement to such Bank Accounts as the Agent may specify from
time to time, without any reduction or deduction whatsoever, including
any reduction or deduction for any set-off, recoupment, counterclaim
(whether sounding in tort, contract or otherwise) or Tax, except for
any such arising under the applicable Purchase and Sale Agreement, and
(ii) no payment in respect of such Receivable shall have been paid by
such Purchase Obligor otherwise than to such a Bank Account without
the prior written consent of the Agent;
(e) such Receivable represents a complete bona fide
transaction that requires no further act under any circumstances on
the part of the Borrower, other than those contemplated in the
applicable Designated Purchase and Sale Agreement, to make such
Receivable payable by the Purchase Obligor;
(f) such Receivable is the valid, legally enforceable
obligation of the Purchase Obligor with respect thereto and not
subject to any present or contingent, and no facts exist that are the
basis for any future, offset or counterclaim or other defense or
dispute on the part of such Purchase Obligor, other than any offset or
counterclaim or other defense contemplated in the applicable
Designated Purchase and Sale Agreement;
(g) such Receivable is payable in full, excluding any
Holdback, not later than 190 days after the initial sale of the
Servicing Contract giving rise thereto;
(h) such Receivable shall not (i) be unpaid more than 15
days from its due date as determined under the applicable Designated
Purchase and Sale Agreement or (ii) be payable by
-59-
65
a Purchase Obligor more than eighty percent (80%) of whose Receivables
have remained unpaid for more than 15 days from their originally
scheduled dates of payment;
(i) such Receivable is not evidenced by chattel paper or
an instrument of any kind;
(j) the Purchase Obligor with respect to such Receivable
(i) is not insolvent or the subject of any bankruptcy or insolvency
proceedings of any kind or of any other proceeding or action,
threatened or pending, that might have a Materially Adverse Effect on
the business of such account debtor or (ii) has not made an assignment
for the benefit of creditors or consented to or suffered the
appointment of a receiver, trustee, liquidator, custodian or the like
for it or for a significant portion of its assets or affairs;
(k) the Purchase Obligor with respect to such Receivable
is not located outside of the United States (excluding for this
purpose the Commonwealth of Puerto Rico);
(l) the Borrower has observed and complied with all laws
of the jurisdiction in which the Purchase Obligor with respect to such
Receivable is located that, if not observed and complied with, would
deny to the Borrower access to the courts of such jurisdiction;
(m) such Receivable does not arise out of any sale to a
Subsidiary or Affiliate of the Borrower or with a governmental body,
entity or agency;
(n) such Receivable is not subject to any provision
prohibiting its assignment or requiring notice of or consent to such
assignment;
(o) such Receivable is payable in freely transferable
Dollars; and
(p) no covenant, representation or warranty applicable to
such Receivable under any of the Loan Documents has been breached or
is inaccurate in any respect.
-60-
66
"Eligible Servicing Rights" means, at any time, Servicing
Rights with respect to which each of the following statements is true and
correct at such time:
(a) such Servicing Rights arise under a Servicing Contract
that is a Servicing Contract under which the servicing obligations are
being performed by the Borrower or a sub-agent of the Borrower;
(b) such Servicing Rights arise under a Servicing
Contract that is not a Recourse Servicing Contract;
(c) (i) in the case of Servicing Rights at any time
constituting HFI Borrowing Base Servicing Rights or HFS Borrowing Base
Servicing Rights, the Mortgage Loans subject to such Servicing Rights
are, if at all, no more than 30 days past due (other than those that
are in the process of foreclosure and those the Obligor under which is
in bankruptcy) and (ii) the Mortgage Loans that are subject to such
Servicing Rights are not in the process of foreclosure nor are the
Obligors thereunder in bankruptcy;
(d) such Servicing Rights arise under a Servicing
Contract that (i) is in full force and effect and (ii) is a Servicing
Contract under which (A) the Borrower is not in default, (B) there
exists no fact or circumstance that would entitle the other party
thereto to terminate such Servicing Contract for cause and (C) the
obligations of the other party thereto are not subject to any
reduction or deduction whatsoever, including a reduction or deduction
for setoff, recoupment or counterclaim;
(e) the grant of the Security Interest by the Borrower
in such Servicing Rights in accordance with the terms of the Security
Agreement does not violate (i) the terms of the Servicing Contract
under which such Servicing Rights arise or (ii) any Applicable Law so
as, in either case, to permit the termination of such Servicing Rights
or such Servicing Contract;
(f) any such Servicing Rights which arise under a
Servicing Contract that is between the Borrower and FNMA, FHLMC or
GNMA are the subject of an appropriate and effective Acknowledgment
Agreement; and
-61-
67
(g) any such Servicing Rights which arise under a Servicing
Contract that is between the Borrower and any Person other than FNMA,
FHLMC or GNMA (i) are the subject of an appropriate and effective
acknowledgment agreement substantially in the same form and to the
same effect as an Acknowledgment Agreement referred to in subsection
(f) above and (ii) do not constitute more than 10% of all Eligible
Servicing Rights.
"Event of Default" means any of the events specified in
Section 6.01.
"Existing Receivables Secured Credit Agreement" has the
meaning ascribed to that term in the preamble to this Agreement.
"Existing Revolving/Term Credit Agreement" has the meaning
ascribed to that term in the preamble to this Agreement.
"Fair Market Percentage" means on any date the aggregate
market value, expressed as a percentage of the unpaid principal balance of all
Mortgage Loans subject thereto, of (i) the HFI Servicing Rights as set forth in
the most recent appraisal delivered pursuant to Section 5.01(a)(iii) and (ii)
the Approved Hedge Contracts as set forth in the most recent appraisal
delivered pursuant to Section 5.01(a)(iv) less the unamortized cost of such
Approved Hedge Contracts, or, with respect to HFI Servicing Rights acquired
during a calendar quarter with proceeds of Loans, but only until the delivery
of the next appraisal pursuant to Section 5.01(a)(iii), an appraisal delivered
contemporaneously with the acquisition of such HFI Servicing Rights, so long as
such appraisal was performed no more than 30 days prior to the date of such
acquisition, is in form and substance satisfactory to the Agent and was
prepared by an appraiser satisfactory to the Agent; provided that if an
appraisal is not delivered as required by Section 5.01(a)(iii) or 5.01(a)(iv),
the "Fair Market Percentage" shall mean such market value (expressed as a
percentage as aforesaid) as the Agent shall establish until such time as an
appraisal is delivered in accordance with Section 5.01(a)(iii) or 5.01(a)(iv).
As used herein, if more than one market value is listed on the relevant
appraisal, "market value" shall mean the value listed as the "most likely"
value on such appraisal or, if no such value is set
-62-
68
forth on such appraisal, the midpoint of the range of market values set forth
therein.
"Hedge Contract" means a Contract hedging the Borrower against
declines in the value of Servicing Rights under Servicing Contracts, including
declines resulting from prepayment of Mortgage Loans serviced thereunder.
"Hedge Contract Appraisal Report" means a written statement as
to the market value of Hedge Contracts.
"HFI Borrowing Base" means at any time the product of (a) the
aggregate unpaid principal balance at such time of the Mortgage Loans subject
to HFI Borrowing Base Servicing Rights at such time multiplied by (b) the
lesser of (i) one and two-tenths percent (1.2%) and (ii) sixty-six and
two-thirds percent (66-2/3%) of the then current Fair Market Percentage.
"HFI Borrowing Base Certificate" means a certificate in the
form of Schedule 2.02(b)-1.
"HFI Borrowing Base Servicing Rights" means, at any time,
Eligible Servicing Rights with respect to which each of the following
statements is true and correct at such time:
(a) such Servicing Rights are subject to the Security
Interest and to no other Liens;
(b) the Security Interest is perfected as to such Servicing
Rights; and
(c) such Servicing Rights are HFI Servicing Rights.
"HFI Commitment" of any Bank means (a) the amount set forth
opposite such Bank's name under the heading "HFI Commitment" on Annex A or, in
the case of a Bank that becomes a Bank pursuant to an assignment, the amount of
the assignor's HFI Commitment assigned to such Bank, in either case, as the
same may be reduced from time to time pursuant to Section 1.07, cancelled
pursuant to Section 7.07 or increased or reduced from time to time pursuant to
assignments in accordance with Section 9.10(a), or (b) as the context may
require, the obligation of such Bank to make HFI Loans in an aggregate unpaid
principal amount not exceeding such amount.
-63-
69
"HFI Loan" means an amount advanced by a Bank pursuant to
Section 1.01(a).
"HFI Servicing Rights" means Servicing Rights other than those
constituting HFS Borrowing Base Servicing Rights.
"HFS Borrowing Base" means, at any time, the product of (a)
the aggregate unpaid principal balance at such time of the Mortgage Loans
subject to HFS Borrowing Base Servicing Rights at such time multiplied by (b)
eighty percent (80%) of the then Average Purchase Price Percentage.
"HFS Borrowing Base Certificate" means a certificate in the
form of Schedule 2.02(b)-2.
"HFS Borrowing Base Servicing Rights" means, at any time,
Eligible Servicing Rights with respect to which each of the following
statements is true and correct at such time:
(a) such Servicing Rights are subject to the Security
Interest and to no other Liens;
(b) the Security Interest is perfected as to such
Servicing Rights; and
(c) such Servicing Rights arise under a Servicing
Contract designated for sale by the Borrower pursuant to an Approved
Purchase and Sale Agreement no later than 180 days after the date that
such Servicing Rights are first included in the HFS Borrowing Base.
"HFS Commitment" of any Bank means (a) the amount set forth
opposite such Bank's name under the heading "HFS Commitment" on Annex A or, in
the case of a Bank that becomes a Bank pursuant to an assignment, the amount of
the assignor's HFS Commitment assigned to such Bank, in either case, as the
same may be increased or reduced from time to time pursuant to Section 1.07,
cancelled pursuant to Section 7.07 or increased or reduced from time to time
pursuant to assignments in accordance with Section 9.10(a), or (b) as the
context may require, the obligation of such Bank to make HFS Loans in an
aggregate unpaid principal amount not exceeding such amount.
-64-
70
"HFS Loan" means an amount advanced by a Bank pursuant to
Section 1.01(b).
"Holdback" means, in the case of each Designated Purchase and
Sale Agreement, a deferred part of the purchase price designated a "Holdback"
by the Agent and Co-Agents.
"Installment Payment Date" means the 20th day of January,
April, July and October of each year.
"Interest Period" means a period commencing, in the case of
the first Interest Period applicable to a LIBOR Rate Loan, on the date of the
making of, or conversion into, such Loan, and, in the case of each subsequent,
successive Interest Period applicable thereto, on the last day of the
immediately preceding Interest Period, and ending, depending on the Type of
Loan, on the same day or date, as the case may be, in the next week or in the
first, second, third or sixth calendar month thereafter, except that (i) any
Interest Period that would otherwise end on a day that is not a LIBOR Business
Day shall be extended to the next succeeding LIBOR Business Day unless such
LIBOR Business Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding LIBOR Business Day and (ii) any Interest
Period that begins on the last LIBOR Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the calendar month
in which such Interest Period ends) shall end on the last LIBOR Business Day of
a calendar month.
"Kind" means, with respect to Loans, any of the following,
each of which shall be deemed to be a different "Kind" of Loan: (a) HFI Loans,
(b) HFS Loans and (c) Receivables Loans.
"Loan" means an HFI Loan, HFS Loan or a Receivables Loan.
"Loan Document Representation and Warranty" means any
"Representation and Warranty" as defined in any Loan Document and any other
representation or warranty made or deemed made under any Loan Document.
"Loan to Value Percentage" means, at any time, with respect to
Loans of any Kind, the aggregate principal amount of
-65-
71
the Loans of such Kind expressed as a percentage of the applicable Borrowing
Base at such time.
"Net Cash Proceeds" means, with respect to the disposition of
any asset, (a) the gross cash proceeds of each disposition (including principal
payments in respect of any notes or other instruments received as consideration
for such disposition) less (b) all documented Taxes and expenses payable by the
Borrower and its Subsidiaries in connection with such disposition, including
income taxes payable as a consequence of such disposition.
"Note" means any promissory note in the form of Exhibit A and
includes such a Note that is a Registered Note.
"Purchase and Sale Agreement" means an agreement for the sale
of one or more Servicing Contracts by the Borrower.
"Purchase Obligor" means a (a) with respect to Receivables
Loans or the security therefor, any Person obligated on, bound to, or subject
to, a Collateral Obligation and (b) with respect to HFS Loans or the security
therefor, any Person obligated to pay the Purchase Price for Servicing
Contracts under an Approved Purchase and Sale Agreement.
"Purchase Price" means, with respect to any HFS Borrowing Base
Servicing Rights, the purchase price payable to the Borrower for the Servicing
Contracts under which such Servicing Rights arise, pursuant to the applicable
Approved Purchase and Sale Agreement.
"Purchase Price Percentage" means, on any date, with respect
to an Approved Purchase and Sale Agreement, the Purchase Price, expressed as a
percentage of the unpaid principal balance of all Mortgage Loans to which the
Servicing Contracts under such Approved Purchase and Sale Agreement relate.
"Receivables" of any Person has the meaning ascribed to such
term in the Security Agreement.
"Receivables Borrowing Base" means at any time the product of
(a) the aggregate unpaid principal balance at such time of the Borrowing Base
Receivables, less all Holdbacks, multiplied by (b) ninety percent (90%).
-66-
72
"Receivables Borrowing Base Certificate" means a certificate
in the form of Schedule 2.02(b)-3.
"Receivables Commitment" of any Bank means (a) the amount set
forth opposite such Bank's name under the heading "Receivables Commitment" on
Annex A or, in the case of a Bank that becomes a Bank pursuant to an
assignment, the amount of the assignor's Receivables Commitment assigned to
such Bank, in either case, as the same may be reduced from time to time
pursuant to Section 1.07, cancelled pursuant to Section 7.07 or increased or
reduced from time to time pursuant to assignments in accordance with Section
9.10(a), or (b) as the context may require, the obligation of such Bank to make
Receivables Loans in an aggregate unpaid principal amount not exceeding such
amount.
"Receivables Loan" means an amount advanced by a Bank pursuant
to Section 1.01(c).
"Recourse Servicing Contract" means a Servicing Contract under
which Borrower bears part or all of the risk of late payment or non-payment of
(a) principal of or interest on a Mortgage Loan being serviced thereunder, or
(b) any required tax or insurance escrow deposit, including the Borrower's
obligations under a "with recourse sale" to FHLMC, under a "regular service
option sale" to FNMA and under any similar sale to any other Person, but
excluding the Borrower's obligations in respect of VA guaranteed Mortgage Loans.
"Required Principal Payments" means, for any fiscal quarter,
the aggregate of the principal amounts of the Loans required in accordance with
the terms of Section 1.04(a) to be repaid by the Borrower during such fiscal
quarter.
"Security Agreement" means the Second Amended and Restated
Revolving/Term Security and Collateral Agency Agreement, dated as of July 31,
1996, among the Borrower and The Bank of New York, as Collateral Agent and
Secured Party.
"Serviced Mortgage Loan Report" means a report in the form of
Schedule 5.01(a)(i).
"Servicing Rights Appraisal Report" means a written statement
as to the market value of Servicing Rights.
-67-
73
"Servicing Rights Collateral" has the meaning ascribed to such
term in the Security Agreement.
"Termination Date" means the date which is 364 days after the
Effective Date.
"Type" means, with respect to any Kind of Loans, any of the
following, each of which shall be deemed to be a different "Type" of Loan:
Base Rate Loans; Federal Funds Rate Loans; LIBOR Rate Loans having a one-week
Interest Period; LIBOR Rate Loans having a one-month Interest Period; LIBOR
Rate Loans having a two-month Interest Period; LIBOR Rate Loans for a
three-month Interest Period; and LIBOR Rate Loans for a six-month Interest
Period. Any LIBOR Rate Loan having an Interest Period that differs from the
duration specified for a Type of LIBOR Rate Loan listed above solely as a
result of the operation of clauses (i) and (ii) of the definition of "Interest
Period" shall be deemed to be a Loan of such above-listed Type notwithstanding
such difference in duration of Interest Periods.
Section 10.02. Other Interpretive Provisions. (a) Except as
otherwise specified herein, all references herein (i) to any Person shall be
deemed to include such Person's successors and assigns, (ii) to any Applicable
Law defined or referred to herein shall be deemed references to such Applicable
Law or any successor Applicable Law as the same may have been or may be amended
or supplemented from time to time and (iii) to any Loan Document or Contract
defined or referred to herein shall be deemed references to such Loan Document
or Contract (and, in the case of any Note or any other instrument, any
instrument issued in substitution therefor) as the terms thereof may have been
or may be amended, supplemented, waived or otherwise modified from time to time.
(b) When used in this Agreement, the words "herein", "hereof"
and "hereunder" and words of similar import shall refer to this Agreement as a
whole and not to any provision of this Agreement, and the words "Article",
"Section", "Annex", "Schedule" and "Exhibit" shall refer to Articles and
Sections of, and Annexes, Schedules and Exhibits to, this Agreement unless
otherwise specified.
-68-
74
(c) Whenever the context so requires, the neuter gender
includes the masculine or feminine, the masculine gender includes the feminine,
and the singular number includes the plural, and vice versa.
(d) Any item or list of items set forth following the word
"including", "include" or "includes" is set forth only for the purpose of
indicating that, regardless of whatever other items are in the category in
which such item or items are "included", such item or items are in such
category, and shall not be construed as indicating that the items in the
category in which such item or items are "included" are limited to such items
or to items similar to such items.
(e) Each authorization in favor of the Agent, the Co-Agents,
the Banks or any other Person granted by or pursuant to this Agreement shall be
deemed to be irrevocable and coupled with an interest.
(f) Except as otherwise specified herein, all references
herein to the Agent, any Bank or the Borrower shall be deemed to refer to such
Person however designated in Loan Documents, so that (i) a reference to rights
or duties of the Agent under the Loan Documents shall be deemed to include the
rights or duties of such Person as the Secured Party under the Security
Agreement, (ii) a reference to costs incurred by a Bank in connection with the
Loan Documents shall be deemed to include costs incurred by such Person or as a
Principal under the Security Agreement and (iii) a reference to the obligations
of the Borrower under the Loan Documents shall be deemed to include the
obligations of such Person as the Pledgor under the Security Agreement.
Section 10.03. Accounting Matters. Unless otherwise
specified herein, all accounting determinations hereunder and all computations
utilized by the Borrower in complying with the covenants contained herein shall
be made, all accounting terms used herein shall be interpreted, and all
financial statements required to be delivered under Annex E shall be prepared,
in accordance with Generally Accepted Accounting Principles, except, in the
case of such financial statements, for departures from Generally Accepted
Accounting Principles that may from time to time be described in the
certificate or report accompanying such financial statements in accordance with
Section 1(c) of Annex E.
-69-
75
Section 10.04. Representations and Warranties. All
Representations and Warranties shall be deemed made (a) in the case of any
Representation and Warranty contained in this Agreement at the time of its
initial execution and delivery, at and as of the Effective Date, (b) in the
case of any Representation and Warranty contained in this Agreement or any
other document at the time any Loan is made, at and as of such time and (c) in
the case of any particular Representation and Warranty, wherever contained, at
such other time or times as such Representation and Warranty is made or deemed
made in accordance with the provisions of this Agreement or the document
pursuant to, under or in connection with which such Representation and Warranty
is made or deemed made.
Section 10.05. Captions. Captions to Articles, Sections and
subsections of, and Annexes, Schedules and Exhibits to, this Agreement are
included for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or in any way affect the meaning or
construction of any provision of this Agreement.
Section 10.06. Interpretation of Related Documents. Except
as otherwise specified therein, the terms and provisions in the Notes,
certificates, opinions and other documents delivered in connection herewith
shall be interpreted in accordance with the provisions of this Article 10 and
Annex B.
-70-
76
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers all as of the
Effective Date.
RESOURCE BANCSHARES MORTGAGE
GROUP, INC.
By
-------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Agent, Collateral Agent and a Bank
By
-------------------------------------
Name: Xxxxxxxx X. Dominus
Title: Vice President
BANK ONE, TEXAS,
NATIONAL ASSOCIATION,
as Co-Agent and a Bank
By
-------------------------------------
Name:
Title:
FIRST BANK NATIONAL ASSOCIATION,
as Co-Agent and a Bank
By
-------------------------------------
77
ANNEX B
DEFINITIONS
Section 1. Defined Terms. For the purposes of this Agreement:
"Accumulated Funding Deficiency" has the meaning ascribed to
that term in Section 302 of ERISA.
"Acknowledgment Agreement" means an acknowledgment agreement,
in the then current form, between the Borrower, the Collateral Agent (as
defined in the Second Amended and Restated Revolving/Term Credit Agreement),
and either FNMA, FHLMC or GNMA, as appropriate.
"Additional Commitment Bank" has the meaning ascribed thereto
in Section 1.07(b) of this Agreement.
"Adjusted LIBOR Rate" means, for any Interest Period, a rate
per annum (rounded upward, if necessary, to the next higher 1/16 of 1%) equal
to the rate obtained by dividing (a) the LIBOR Rate for such Interest Period by
(b) a percentage equal to 1 minus the Reserve Requirement in effect from time
to time during such Interest Period.
"Adjusted Net Worth" means, at any time, an amount equal to
(a) Net Worth minus (b) mortgage servicing rights minus (c) capitalized excess
servicing fees minus (d) all intangible items including unamortized debt
discount and expense, unamortized deferred charges, goodwill, organizational
and research and development expense plus (e) 90% of the appraised value of the
Servicing Rights of RBMG (determined on the basis of the most recent
appraisal), plus (f) 90% of the appraised value of Hedge Contracts (determined
on the basis of the most recent appraisal).
"Affiliate" means, with respect to a Person, any other Person
that, directly or indirectly through one or more intermediaries, controls, or
is controlled by, or is under common
78
control with, such first Person; unless otherwise specified, "Affiliate" means
an Affiliate of RBMG.
"Agent" means The Bank of New York, as agent for the Banks
under this Agreement, and any successor Agent appointed pursuant to Section
8.08.
"Agent's Office" means the address of the Agent specified in
or determined in accordance with the provisions of Section 9.01(a)(ii).
"Applicable Law" means, anything in Section 9.11 to the
contrary notwithstanding, (a) all applicable common law and principles of
equity and (b) all applicable provisions of all (i) constitutions, statutes,
rules, regulations and orders of governmental bodies, (ii) Governmental
Approvals and (iii) orders, decisions, judgments and decrees of all courts
(whether at law or in equity or admiralty) and arbitrators.
"Bank Tax" means any income or franchise tax imposed upon (a)
any Bank by any jurisdiction (or political subdivision thereof) in which such
Bank or any of its Lending Offices is located, (b) the Agent by the
jurisdiction (or political subdivision thereof) in which the Agent's Office is
located or (c) the Collateral Agent by any jurisdiction (or political
subdivision thereof) in which the Collateral Agent's Office is located.
"Base Financial Statements" means the most recent, audited,
consolidated balance sheet of RBMG and the Consolidated Subsidiaries referred
to in Schedule Annex E-2(a) and the related statements of income, retained
earnings and, as applicable, changes in financial position or cash flows for
the fiscal year ended with the date of such balance sheet.
"Benefit Plan" of any Person, means, at any time, any employee
benefit plan (including a Multiemployer Benefit Plan), the funding requirements
of which (under Section 302 of ERISA or Section 412 of the Code) are, or at any
time within six years immediately preceding the time in question were, in whole
or in part, the responsibility of such Person.
-2-
79
"Business Day" means any day other than a Saturday, Sunday or
other day on which banks in New York or Chicago are authorized to close.
"Capital Security" means, with respect to any Person, (a) any
share of capital stock of such Person or (b) any security convertible into, or
any option, warrant or other right to acquire, any share of capital stock of
such Person.
"Cash Flow" means, for any fiscal quarter, an amount equal to
Net Income for that fiscal quarter plus all depreciation, amortization,
deferred taxes and other non-cash charges and the net change in the deferred
valuation account comprised of non-cash adjustments to the cost of servicing
resulting from the application of FAS 122.
"Co-Agents" means Bank One, Texas, National Association, First
Bank National Association, NationsBank of Texas, N.A. and Texas Commerce Bank
National Association.
"Code" means the Internal Revenue Code of 1986.
"Collateral Agent's Office" means the address of the
Collateral Agent specified in or determined in accordance with the provisions
of Section 9.01(a)(ii).
"Commitment Increase" has the meaning ascribed thereto in
Section 1.07(b).
"Commitment Increase Supplement" has the meaning ascribed
thereto in Section 1.07(b).
"Consolidated Subsidiary" means, with respect to any Person at
any time, any Subsidiary or other Person the accounts of which would be
consolidated with those of such first Person in its consolidated financial
statements as of such time; unless otherwise specified, "Consolidated
Subsidiary" means a Consolidated Subsidiary of RBMG.
"Contract" means (a) any agreement (whether bi-lateral or
uni-lateral or executory or non-executory and whether a Person entitled to
rights thereunder is so entitled directly or as a third-party beneficiary),
including an indenture, lease or
-3-
80
license, (b) any deed or other instrument of conveyance, (c) any certificate of
incorporation or charter and (d) any by-law.
"Coop Loan" has the meaning ascribed to that term in the
Second Amended and Restated Secured Mortgage Warehousing Credit Agreement.
"Debt" means any Liability that constitutes "debt" or "Debt"
under section 101(11) of the Bankruptcy Code or under the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any analogous Applicable
Law.
"Default" means any condition or event that constitutes an
Event of Default or that with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Dollars" and the sign "$" mean lawful money of the United
States of America.
"Domestic Lending Office" of any Bank means (a) the branch or
office of such Bank set forth below such Bank's name under the heading
"Domestic Lending Office" on Annex A or, in the case of a Bank that becomes a
Bank pursuant to Section 1.07 or to an assignment, the branch or office of such
Bank set forth under the heading "Domestic Lending Office" in the Commitment
Increase Supplement or the Notice of Assignment, as the case may be, given to
RBMG and the Agent with respect to such assignment or (b) such other branch or
office of such Bank designated by such Bank from time to time as the branch or
office at which its Base Rate or Federal Funds Rate Loans, as the case may be,
are to be made or maintained.
"Effective Date" means the date set forth as such on the last
signature page hereof, which date is the date each of the conditions contained
in Section 2.01 hereto was fulfilled and, accordingly, this Agreement became
effective and the Banks first became committed to make the Loans and other
extensions of credit contemplated by this Agreement.
"Enacted", as applied to a Regulatory Change, means the date
Regulatory Change first becomes effective or is implemented or first required
or expected to be complied with, whether the
-4-
81
same is (a) the result of an enactment by a government or any agency or
political subdivision thereof, a determination of a court or regulatory
authority, or otherwise or (b) enacted, adopted, issued or proposed before or
after the Effective Date.
"ERISA" means the Employee Retirement Income Security Act of
1974.
"ERISA Affiliate" means, with respect to any Person, any other
Person, including a Subsidiary or other Affiliate of such first Person, that is
a member of any group of organizations within the meaning of Code Sections
414(b), (c), (m) or (o) of which such first Person is a member.
"Event of Default" means any of the events specified in
Section 6.01.
"Existing Guaranty" means (a) any Guaranty outstanding on the
Syndicated Credit Agreement Effective Date, to the extent set forth on Schedule
Annex D-5, and (b) any Guaranty that constitutes a renewal, extension or
replacement of an Existing Guaranty, but only if (i) at the time such Guaranty
is entered into and immediately after giving effect thereto, no Default would
exist, (ii) such Guaranty is binding only on the obligor or obligors under the
Guaranty so renewed, extended or replaced, (iii) the principal amount of the
obligations Guaranteed by such Guaranty does not exceed the principal amount of
the obligations Guaranteed by the Guaranty so renewed, extended or replaced and
(iv) the obligations Guaranteed by such Guaranty bear interest at a rate per
annum not exceeding the rate borne by the obligations Guaranteed by the
Guaranty so renewed, extended or replaced except for any increase that is
commercially reasonable at the time of such increase.
"Federal Funds Rate" means, for any day, the weighted average
of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business
Day) by the Federal Reserve Bank of New York or, if such rate is not so
published for any day that is a Business Day, the average of quotations for
such day or such transactions received by The Bank of New York
-5-
82
from three Federal funds brokers of recognized standing selected by such bank.
"Federal Funds Rate Loan" means any Loan the interest on which
is, or is to be, as the context may require, computed on the basis of the
Federal Funds Rate.
"FHA" means the Federal Housing Administration.
"FHA Notice of Assignment" means a Notice of Assignment in the
form of Exhibit D to the Second Amended and Restated Secured Mortgage
Warehousing Revolving Credit Agreement.
"FHLMC" means the Federal Home Loan Mortgage Corporation.
"FNMA" means the Federal National Mortgage Association.
"Foreclosure Advance" means either (a) a P&I Advance or a T&I
Advance made in respect of a Mortgage Loan which is in foreclosure or (b) a
Repurchase Foreclosure Advance.
"General Intangible" means a general intangible as that term
is defined in the Uniform Commercial Code.
"Generally Accepted Accounting Principles" means generally
accepted accounting principles as in effect on December 31, 1995, in the United
States of America.
"GNMA" means the Government National Mortgage Association.
"Governmental Approval" means any authorization, consent,
approval, license or exemption of, registration or filing with, or report or
notice to, any governmental unit.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
-6-
83
"Guaranty" of any Person means any obligation, contingent or
otherwise, of such Person (a) to pay any Liability of any other Person or to
otherwise protect, or having the practical effect of protecting, the holder of
any such Liability against loss (whether such obligation arises by virtue of
such Person being a partner of a partnership or participant in a joint venture
or by agreement to pay, to keep well, to purchase assets, goods, securities or
services or to take or pay, or otherwise) or (b) incurred in connection with
the issuance by a third Person of a Guaranty of any Liability of any other
Person (whether such obligation arises by agreement to reimburse or indemnify
such third Person or otherwise). The word "Guarantee" when used as a verb has
the correlative meaning.
"HUD" means the Department of Housing and Urban Development.
"IMI" has the meaning ascribed to that term in the Second
Amended and Restated Secured Mortgage Warehousing Credit Agreement.
"IMI Loan" has the meaning ascribed to that term in the Second
Amended and Restated Secured Mortgage Warehousing Credit Agreement.
"Indebtedness" of any Person means (in each case, whether such
obligation is with full or limited recourse) (a) any obligation of such Person
for borrowed money, (b) any obligation of such Person evidenced by a bond,
debenture, note or other similar instrument, (c) any obligation of such Person
to pay the deferred purchase price of property or services, except a trade
account payable that arises in the ordinary course of business but only if and
so long as the same is payable on customary trade terms, (d) any obligation of
such Person as lessee under a capital lease, (e) any Mandatorily Redeemable
Stock of such Person owned by any Person other than such Person (the amount of
such Mandatorily Redeemable Stock to be determined for this purpose as the
higher of the liquidation preference of and the amount payable upon redemption
or purchase of such Mandatorily Redeemable Stock), (f) any obligation of such
Person to purchase securities or other property that arises out of or in
connection with the sale of the same or substantially similar securities or
property, (g) any non-contingent obligation of such Person
-7-
84
to reimburse any other Person in respect of amounts paid under a letter of
credit or other Guaranty issued by such other Person to the extent that such
reimbursement obligation remains outstanding after it becomes non-contingent,
(h) any Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
a Lien on any asset of such Person and (i) any Indebtedness of others
Guaranteed by such person.
"Indebtedness-Free Subsidiary" means any wholly owned
Subsidiary that has no Indebtedness other than the Indebtedness outstanding
under a Syndicated Credit Agreement and Indebtedness owing to RBMG or another
Indebtedness-Free Subsidiary.
"Indemnified Person" means any Person that is, or at any time
was, the Agent, a Co-Agent, a Bank, an Affiliate of the Agent, the Co-Agent or
a Bank or a director, officer, employee or agent of any such Person.
"Information" means data, certificates, reports, statements
(including financial statements), opinions of counsel, documents and other
information.
"Intellectual Property" means (a) (i) patents and patent
rights, (ii) trademarks, trademark rights, trade names, trade name rights,
corporate names, business names, trade styles, service marks, logos and general
intangibles of like nature and (iii) copyrights, in each case whether
registered, unregistered or under pending registration and, in the case of any
such that are registered or under pending registration, whether registered or
under pending registration under the laws of the United States or any other
country, (b) reissues, continuations, continuations-in-part and extensions of
any Intellectual Property referred to in clause (a), and (c) rights relating to
any Intellectual Property referred to in clause (a) or (b), including rights
under applications (whether pending under the laws of the United States or any
other country) or licenses relating thereto.
"Investment" of any Person means (a) any Capital Security,
evidence of Indebtedness or other security or instrument issued by any other
Person, (b) any loan, advance or extension of credit to, or any contribution to
the capital of,
-8-
85
any other Person and (c) any other investment in any other Person.
"Lending Office" of any Bank means the Domestic Lending Office
or the LIBOR Lending Office of such Bank.
"Liability" of any Person means (in each case, whether with
full or limited recourse) any Indebtedness, liability, obligation, covenant or
duty of or binding upon, or any term or condition to be observed by or binding
upon, such Person or any of its assets, of any kind, nature or description,
direct or indirect, absolute or contingent, due or not due, contractual or
tortious, liquidated or unliquidated, whether arising under Contract,
Applicable Law, or otherwise, whether now existing or hereafter arising, and
whether for the payment of money or the performance or non-performance of any
act.
"LIBOR Business Day" means any Business Day on which dealings
in Dollar deposits are carried on in the London interbank market and on which
commercial banks are open for domestic and international business (including
dealing in Dollar deposits) in London, England.
"LIBOR Lending Office" of any Bank means (a) the branch or
office of such Bank set forth below such Bank's name under the heading "LIBOR
Lending Office" on Annex A or, in the case of a Bank that becomes a Bank
pursuant to Section 1.07 or an assignment, the branch or office of such Bank
set forth under the heading "LIBOR Lending Office" in the Commitment Increase
Supplement or the Notice of Assignment, as the case may be, given to RBMG and
the Agent with respect to such assignment or (b) such other branch or office of
such Bank designated by such Bank from time to time as the branch or office at
which its LIBOR Rate Loans are to be made or maintained.
"LIBOR Rate" means, for any Interest Period, the rate per
annum (rounded upward, if necessary, to the next higher 1/16 of 1%) determined
by The Bank of New York to be the rate at which it offered or would have
offered to place with first-class banks in the London interbank market deposits
in Dollars in amounts comparable to the LIBOR Rate Loan of The Bank of New York
to which such Interest Period applies, for a period equal to such
-9-
86
Interest Period, at 11:00 a.m. (London time) on the second LIBOR Business Day
before the first day of such Interest Period.
"LIBOR Rate Loan" means any Loan the interest on which is, or
is to be, as the context may require, computed on the basis of the Adjusted
LIBOR Rate.
"Lien" means, with respect to any property or asset (or any
income or profits therefrom) of any Person (in each case whether the same is
consensual or nonconsensual or arises by Contract, operation of law, legal
process or otherwise) (a) any mortgage, lien, pledge, attachment, levy or other
security interest of any kind thereupon or in respect thereof or (b) any other
arrangement, express or implied, under which the same is pledged, transferred,
sequestered or otherwise identified so as to subject the same to, or make the
same available for, the payment or performance of any Liability in priority to
the payment of the ordinary, unsecured Liabilities of such Person. For the
purposes of this Agreement, a Person shall be deemed to own subject to a Lien
any asset that it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"Loan Document Related Claim" means any claim (whether civil,
criminal or administrative and whether arising under Applicable Law, including
any "environmental" or similar law, under Contract or otherwise) in any way
arising out of, related to, or connected with, the Loan Documents, the
relationships established thereunder or any actions or conduct thereunder or
with respect thereto, whether such claim arises or is asserted before or after
the Effective Date or before or after the Repayment Date.
"Loan Documents" means (a) this Agreement, the Notes, and the
Security Agreement and (b) all other agreements, documents, including Borrowing
Base Certificates, and instruments relating to, arising out of, or in any way
connected with (i) any agreement, document or instrument referred to in clause
(a), (ii) any other agreement, document or instrument referred to in this clause
(b) or (iii) any of the transactions contemplated by any agreement, document or
instrument referred to in clause (a) or in this clause (b).
-10-
87
"Mandatorily Redeemable Stock" means, with respect to any
Person, any share of such Person's capital stock to the extent that it is (a)
redeemable, payable or required to be purchased or otherwise retired or
extinguished, or convertible into any Indebtedness or other Liability of such
Person, (i) at a fixed or determinable date, whether by operation of a sinking
fund or otherwise, (ii) at the option of any Person other than such Person or
(iii) upon the occurrence of a condition not solely within the control of such
Person, such as a redemption required to be made out of future earnings or (b)
convertible into Mandatorily Redeemable Stock.
"Materially Adverse Effect" means, (a) with respect to any
Person, any materially adverse effect on such Person's business, assets,
Liabilities, financial condition, results of operations or business prospects,
(b) with respect to any Loan Document, any adverse effect, WHETHER OR NOT
MATERIAL, on the binding nature, validity or enforceability thereof as an
obligation of a Borrower and (c) with respect to Collateral, a materially
adverse effect on the value of a category of such Collateral or its utility in
a Borrower's business or an adverse effect, WHETHER OR NOT MATERIAL, on the
validity, perfection, priority or enforceability of the Security Interest
therein.
"Maximum Permissible Rate" means, with respect to interest
payable on any amount, the rate of interest on such amount that, if exceeded,
could, under Applicable Law, result in (a) civil or criminal penalties being
imposed on the payee or (b) the payee's being unable to enforce payment of (or,
if collected, to retain) all or any part of such amount or the interest payable
thereon.
"Money Market Investment" means (a) any security issued or
directly and fully guaranteed or insured by the United States government or any
agency or instrumentality thereof having a remaining maturity of not more than
one year, (b) any certificate of deposit, eurodollar time deposit and bankers'
acceptance with remaining maturity of not more than six months, any overnight
bank deposit, and any demand deposit account, in each case with any Bank or
with any United States commercial bank having capital and surplus in excess of
$500,000,000 and rated B or better by Thomson Bankwatch Inc. or (c) any
repurchase obligation with a
-11-
88
term of not more than seven days for underlying securities of the types
described in clauses (a) and (b) above entered into with any financial
institution meeting the qualifications specified in clause (b) above, and (d)
any commercial paper issued by any Bank or the parent corporation of any Bank
and any other commercial paper rated A-1 by Standard & Poor's Corporation or
Prime-1 by Xxxxx'x Investors Service, Inc. and in any case having a remaining
maturity of not more than six months.
"Mortgage Loan" means Indebtedness (which is such by virtue of
clause (a) of the definition thereof) of an Obligor that is secured by
residential real estate, including such Indebtedness that constitutes a Coop
Loan.
"Mortgage-Backed Security" means a security (including a
participation certificate) that is (a) guaranteed by GNMA that represents
interests in a pool of loans that (i) are secured by mortgages, deeds of trust
or other instruments creating a Lien on property which is improved by a
completed single family dwelling (one-to-four family unit) or (ii) are Coop
Loans or (b) issued by FNMA, FHLMC or other Persons that represents interests
in such a pool.
"Multiemployer Benefit Plan" means any Benefit Plan that is a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"Net Income" means, for any period, the amount of net income
of RBMG for such period (taken as a cumulative whole), determined in accordance
with Generally Accepted Accounting Principles.
"Net Worth" means, at any date, the stockholders' equity of
RBMG at such date, determined in accordance with Generally Accepted Accounting
Principles.
"New Commitment Bank" has the meaning ascribed thereto in
Section 1.07(b).
"Non-US Bank" means a Person that is not a United States
Person and that is not described in Section 881(C)(3) of the Code.
-12-
89
"Notice of Assignment" means any notice to the Borrower and
the Agent with respect to an assignment pursuant to Section 9.10(a) in the form
of Schedule 9.10(a).
"Obligor" means the Person or Persons obligated to pay the
Indebtedness which is the subject of a Mortgage Loan, including any guarantor
of such indebtedness.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Guaranty" means (a) any Guaranty that is an
endorsement of a check for collection in the ordinary course of business, (b)
any Guaranty (made in the ordinary course of business and consisting only of
customary selling warranties required under selling contracts with Approved
Investors) of the obligations of mortgagors with respect to Mortgage Loans sold
by RBMG, except that RBMG's obligations under a "with recourse" sale to FHLMC,
under a "regular" servicing option sale to FNMA, or under any similar sale to
any other Person, shall not constitute a Permitted Guaranty and (c) the
Guaranty by RBMG under Section 9.22 of the Second Amended and Restated Mortgage
Warehousing Revolving Credit Agreement.
"Permitted Lien" means (a) with respect to any asset that does
not constitute Collateral, (i) any Lien arising in the ordinary course of
business and that secures a Liability that does not constitute Indebtedness and
at the time is not required to be paid in accordance with Section 1(d) of Annex
D and, if such Lien arises in connection with legal proceedings, the execution
or other enforcement thereof is not unstayed for more than 20 days; (ii) any
Lien securing Indebtedness to which Section 4 of Annex D is not applicable;
(iii) any Lien securing Hedge Contracts, but only if such Hedge Contracts are
entered into in the ordinary course of business; and (iv) Liens incidental to
the conduct of the mortgage banking business of RBMG or the ownership of its
properties or arising out of transactions entered into in the ordinary course
of such business which do not secure Indebtedness and do not, in the aggregate,
materially detract from the value of its properties in the aggregate or
materially impair the use thereof in the ordinary course of such business; and
(b) with respect to any asset that constitutes Collateral, the Syndicated
Credit Agreement Security Interests.
-13-
90
"Person" means any individual, sole proprietorship,
corporation, partnership, trust, unincorporated organization, mutual company,
joint stock company, estate, union, employee organization, government or any
agency or political subdivision thereof or, for the purpose of the definition
of "ERISA Affiliate", any trade or business.
"Post-Default Rate" means, for any day, the rate otherwise
applicable under Section 1.03(a)(i) or (ii) for such day plus 2% or, if no rate
would otherwise be applicable under Section 1.03(a)(i) or (ii), the sum of 2%
and the higher of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Rate in effect on such day.
"Prime Rate" means the prime commercial lending rate of The
Bank of New York, as publicly announced to be in effect from time to time. The
Prime Rate shall be adjusted automatically, without notice, on the effective
date of any change in such prime commercial lending rate. The Prime Rate is
not necessarily The Bank of New York's lowest rate of interest.
"Principals" means all Persons that are, or at any time were,
the Secured Party, an Agent, a Co-Agent, a Bank or any other Indemnified
Person.
"Prohibited Transaction" means any transaction that is
prohibited under Code Section 4975 or ERISA Section 406 and not exempt under
Code Section 4975 or ERISA Section 408.
"Property" means the real property, including the improvements
thereon, and the personal property (tangible and intangible) which purport to
secure a Mortgage Loan.
"Qualifying Balances" means, with respect to any Bank, those
free collected balances maintained in non-interest bearing accounts (whether
or not such accounts are trust accounts) in the Borrower's name with such Bank
or with a financial institution designated by such Bank and acceptable to the
Borrower (after deducting for purposes of calculating such balances FDIC
insurance premiums, float and balances required by such Bank under its normal
practices to compensate such Bank for the
-14-
91
maintenance of such accounts and taking into consideration any reserve
requirements applicable to such accounts).
"Questionnaire" means the Questionnaire in the form attached
to the Security Agreement as Exhibit A delivered by a Borrower to the Agent and
the Collateral Agent in connection with this Agreement.
"RBMG" means Resource Bancshares Mortgage Group, Inc.
"Register" means a register kept at the Agent's office by the
Agent on behalf of RBMG, at no extra charge to RBMG, on which the Agent records
the names of the Registered holders of Registered Notes.
"Registered Holder" means the Person in whose name a
Registered Note is registered.
"Registered Note" means a Note the name of the holder of which
has been recorded on the Register. The registration of a Note shall constitute
the registration of the Loan evidenced thereby.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System.
"Regulation X" means Regulation X of the Board of Governors of
the Federal Reserve System.
"Regulatory Change" means any Applicable Law, interpretation,
directive, request or guideline (whether or not having the force of law), or
any change therein or in the administration or enforcement thereof, that is
Enacted or is implemented or first required or expected to be complied with
after the Syndicated Credit Agreement Effective Date, including any such that
imposes, increases or modifies any Tax, reserve requirement, insurance charge,
special deposit requirement, assessment or capital adequacy requirement, but
excluding any such that imposes, increases or modifies any Bank Tax.
-15-
92
"Repayment Date" means the later of (a) the termination of the
Commitments (whether as a result of the occurrence of the Termination Date,
reduction to zero pursuant to Section 1.07 or termination pursuant to Section
6.02) and (b) the payment in full of the Loans and all other amounts payable or
accrued hereunder.
"Reportable Event" means, with respect to any Benefit Plan of
any Person, (a) the occurrence of any of the events set forth in ERISA Section
4043(c), other than an event as to which the requirement of 30 days' notice, or
the penalty for failure to provide such notice, has been waived by the PBGC,
(b) the existence of conditions sufficient to require advance notice to the
PBGC pursuant to ERISA Section 4043(b), (c) the occurrence of any of the events
set forth in ERISA Sections 4062(e) or 4063(a) or the regulations thereunder,
(d) any event requiring such Person or any of its ERISA Affiliates to provide
security to such Benefit Plan under Code Section 401(a)(29) or (e) any failure
to make a payment required by Code Section 412(m) with respect to such Benefit
Plan.
"Representation and Warranty" means any representation or
warranty made pursuant to or under (a) Section 2.02, Article 3, or any other
provision of this Agreement, (b) Annex C or Annex E or (c) any amendment to, or
waiver of rights under, this Agreement, or either such Annex, WHETHER OR NOT,
IN THE CASE OF ANY REPRESENTATION OR WARRANTY REFERRED TO IN CLAUSE (a), (b) OR
(c) OF THIS DEFINITION (EXCEPT, IN EACH CASE, TO THE EXTENT OTHERWISE EXPRESSLY
PROVIDED), THE INFORMATION THAT IS THE SUBJECT MATTER THEREOF IS WITHIN THE
KNOWLEDGE OF RBMG.
"Repurchase Foreclosure Advance" has the meaning ascribed to
such term in Section 10.01.
"Required Banks" means Banks having more than 66-2/3% of the
aggregate amount of, when an Event of Default does not exist, the Commitments,
and during an Event of Default, the Loans outstanding.
"Required Principal Payments" means, for any fiscal quarter,
the aggregate of the principal amounts of the Loans (as defined in the Second
Amended and Restated Revolving/Term Credit Agreement) required in accordance
with the terms of Section
-16-
93
1.04(a) of the Second Amended and Restated Revolving/Term Credit Agreement to
be repaid by RBMG during such fiscal quarter.
"Reserve Requirement" means, at any time, the then current
maximum rate for which reserves (including any marginal, supplemental or
emergency reserve) are required to be maintained under Regulation D by member
banks of the Federal Reserve System in New York City with deposits exceeding
five billion Dollars against "Eurocurrency liabilities", as that term is used
in Regulation D. The Adjusted LIBOR Rate shall be adjusted automatically on
and as of the effective date of any change in the Reserve Requirement.
"Restricted Payment" means (a) any dividends or other
distribution on account of any shares of RBMG's capital stock (other than
dividends payable solely in shares of any of its capital stock) or (b) any
payment on account of any purchase, redemption, retirement, exchange or
conversion of any of RBMG's Capital Securities, including purchases of
Mandatory Redeemable Stock of RBMG pursuant to RBMG's employee stock purchase
plan.
"Second Amended and Restated Revolving/Term Credit Agreement"
means the Second Amended and Restated Secured Revolving/Term Credit Agreement,
dated as of July 31, 1996, among RBMG, the Agent and Collateral Agent, the
Co-Agents and the Banks party thereto.
"Second Amended and Restated Secured Mortgage Warehousing
Revolving Credit Agreement" means the Second Amended and Restated Secured
Mortgage Warehousing Revolving Credit Agreement, dated as of July 31, 1996,
among Resources Bancshares Mortgage Group, Inc., IMI, the Banks listed on the
signature pages thereof and The Bank of New York, as Agent, and the Co-Agents.
"Secured Approved Correspondent Revolving Credit Agreement"
means a Secured Approved Correspondent Revolving Credit Agreement among RBMG,
the lenders party thereto, and the Bank of New York as Agent providing for
Indebtedness in an initial aggregate principal amount of $20,000,000 which may
be increased to $40,000,000.
-17-
94
"Security Interest" means the Liens created, or purported to
be created, by the Loan Documents.
"Serviced Mortgage Loan" means a Mortgage Loan the Servicing
Rights with respect to which constitute part of the Servicing Portfolio.
"Servicing Contract" means a written agreement between an
investor and a Person acting as servicer (or in the case of a sub-servicing
arrangement, between the Person acting as servicer and the master servicer)
providing for the servicing of Mortgage Loans, including pools of Mortgage
Loans underlying Mortgage-Backed Securities, and includes all manuals, guides
and Applicable Laws incorporated by reference in or otherwise governing the
terms of the relationship of such investor and the Person acting as servicer
thereunder. Unless otherwise specified, "Servicing Contract" means a Servicing
Contract under which RBMG or a sub-agent of RBMG is the Person acting as
servicer.
"Servicing Portfolio" means at any time the aggregate
outstanding principal balance of the Mortgage Loans the Servicing Rights with
respect to which make up the entire portfolio of Servicing Rights owned by
RBMG, excluding the Servicing Rights with respect to which RBMG has "full
recourse" obligations at that time.
"Servicing Rights" means (a) all rights under a Servicing
Contract of the Person acting (directly or through a sub-agent) as servicer
thereunder, including all rights to compensation, payment and reimbursement,
(b) all rights of such Person to termination fees payable in respect of such
Servicing Contract, and (c) all proceeds of any sale, assignment or other
disposition of such Person's interest in such Servicing Contract. Unless
otherwise specified, "Servicing Rights" means Servicing Rights of RBMG.
"Subordinated Indebtedness" means Indebtedness of a Borrower
that is subordinate in right of payment to the Liabilities of a Borrower under
the Loan Documents to which it is a party, pursuant to subordination provisions
the terms and conditions of which are acceptable to the Required Banks.
-18-
95
"Subsidiary" means, with respect to any Person, any other
Person (a) securities of which having ordinary voting power to elect a majority
of the board of directors (or other persons having similar functions) or (b)
other ownership interests of which ordinarily constituting a majority voting
interest, are at the time, directly or indirectly, owned or controlled by such
first Person, or by one or more of its Subsidiaries, or by such first Person
and one or more of its Subsidiaries; unless otherwise specified, "Subsidiary"
means a Subsidiary of RBMG.
"Syndicated Credit Agreements" means the Second Amended and
Restated Secured Mortgage Warehousing Revolving Credit Agreement, the Second
Amended and Restated Secured Revolving/Term Credit Agreement and the Secured
Approved Correspondent Revolving Credit Agreement.
"Syndicated Credit Agreement Effective Date" means the
earliest of (a) the "Effective Date" as that term is defined in Second Amended
and Restated Secured Mortgage Warehousing Revolving Credit Agreement, (b) the
"Effective Date" as that term is defined in the Second Amended and Restated
Revolving/Term Credit Agreement and (c) the "Agreement Date" as that term is
defined in the Secured Approved Correspondent Revolving Credit Agreement.
"Syndicated Credit Agreement Security Interest" has the
meaning ascribed to the term "Security Interest" in each of the Syndicated
Credit Agreements.
"Tax" means any Federal, State or foreign tax, assessment or
other governmental charge or levy (including any withholding tax) upon a Person
or upon its assets, revenues, income or profits.
"Termination Event" means, with respect to any Benefit Plan,
(a) any Reportable Event with respect to such Benefit Plan, (b) the termination
of such Benefit Plan, or the filing of a notice of intent to terminate such
Benefit Plan, or the treatment of any amendment to such Benefit Plan as a
termination under ERISA Section 4041(c), (c) the institution of proceedings to
terminate such Benefit Plan under ERISA Section 4042 or (d) the appointment of
a trustee to administer such Benefit Plan under ERISA Section 4042.
-19-
96
"Total Liabilities" means, at any time, all of RBMG's
Liabilities to the extent reflected, or required in accordance with Generally
Accepted Accounting Principles to be reflected, on a balance sheet of RBMG,
including obligations in respect of whole loan gestation financing agreements
which either do not have initial pool certification or are not with "assignment
of trade," but excluding gestation and repurchase financing agreements with
respect to initially certified pools and whole loan gestation financing
agreements which have "assignment of trade."
"Unfunded Benefit Liabilities" means, with respect to any
Benefit Plan at any time, the amount of unfunded benefit liabilities of such
Benefit Plan at such time as determined under ERISA Section 4001(a)(18).
"Uniform Commercial Code" means the Uniform Commercial Code as
in effect from time to time in the State of New York.
"United States Person" means a corporation, partnership or
other entity created, organized or incorporated under the laws of the United
States of America or a State thereof (including the District of Columbia).
"VA" means the Veterans Administration.
"VA Notice of Assignment" means a Notice of Assignment in the
form of Exhibit E to the Second Amended and Restated Secured Mortgage
Warehousing Revolving Credit Agreement.
"Wholly Owned Subsidiary" means, with respect to any Person,
any Subsidiary of such Person all of the Capital Securities and all other
ownership interests and rights to acquire ownership interests of which (except
directors' qualifying shares) are, directly or indirectly, owned or controlled
by such Person or one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more of such Subsidiaries; unless otherwise specified,
"Wholly Owned Subsidiary" means a Wholly Owned Subsidiary of RBMG.
-20-
97
ANNEX C
CERTAIN REPRESENTATIONS AND WARRANTIES
RBMG represents and warrants as follows:
1. Organization; Power; Qualification. RBMG and each Subsidiary
are corporations duly organized, validly existing and in good standing under
the laws of their respective jurisdictions of incorporation, have the corporate
power and authority to own their respective properties and to carry on their
respective businesses as now being and hereafter proposed to be conducted and
are duly qualified and in good standing as foreign corporations, and are
authorized to do business, in all jurisdictions in which the character of their
respective properties or the nature of their respective businesses requires
such qualification or authorization, except for qualifications and
authorizations the lack of which, singly or in the aggregate, has not had and
does not have a significant possibility of having a Materially Adverse Effect
on (a) RBMG or (b) the Collateral.
2. Subsidiaries. On the Syndicated Credit Agreement Effective
Date, RBMG has no Subsidiaries other than IMI.
3. Authorization; Enforceability; Required Consents; Absence of
Conflicts. Each of RBMG and IMI has the power, and has taken all necessary
action (including, if a corporation, any necessary stockholder action) to
authorize it to execute, deliver and perform in accordance with their
respective terms the Loan Documents to which it is a party and to borrow
hereunder in the unused amount of the Commitments available to it. This
Agreement has been, and each of the other Loan Documents when delivered will
have been, duly executed and delivered by RBMG and is, or when so delivered
will be, a legal, valid and binding obligation of RBMG or IMI, as the case may
be, enforceable against RBMG or IMI, as the case may be, in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally. The execution, delivery and
performance in accordance with their respective terms by RBMG and IMI of the
Loan Documents to which it is a
98
party, and each borrowing hereunder, whether or not in the amount of the unused
Commitments, do not and (absent any change in any Applicable Law or applicable
Contract) will not (a) require any Governmental Approval or any other consent
or approval, including any consent or approval of any Subsidiary or any consent
or approval of the stockholders of RBMG or any Subsidiary, other than
Governmental Approvals and other consents and approvals that have been
obtained, are final and not subject to review on appeal or to collateral
attack, are in full force and effect and, in the case of any such required
under any Applicable Law or Contract as in effect on the Effective Date, are
listed on Schedule Annex C-3, or (b) violate, conflict with, result in a breach
of, constitute a default under, or result in or require the creation of any
Lien (other than the Security Interest) upon any assets of RBMG or any
Subsidiary under, (i) any Contract to which RBMG or any Subsidiary is a party
or by which RBMG or any Subsidiary or any of their respective properties may be
bound or (ii) any Applicable Law.
4. Taxes. RBMG and each Subsidiary have (a) filed all Tax
returns required to have been filed by it under Applicable Law, (b) paid all
Taxes that are shown on such returns as being due and payable by it or have
been assessed against it, except for Taxes the failure to have paid which does
not contravene Section 1(d) of Annex D and (c) to the extent required by
Generally Accepted Accounting Principles, reserved against all Taxes that are
payable by it but are not yet due or that are due and payable by it or have
been assessed against it but have not yet been paid.
5. Litigation. Except as set forth on Schedule Annex C-5, there
are not, in any court or before any arbitrator of any kind or before or by any
governmental or non-governmental body, any actions, suits or proceedings
pending or threatened (nor, to the knowledge of RBMG and its Subsidiaries is
there any basis therefor) against or in any other way relating to or affecting
(a) RBMG or any of its Subsidiaries or any of their respective businesses or
properties, (b) any Loan Document or (c) the Collateral, except actions, suits
or proceedings that (x) do not, singly or in the aggregate, have a significant
possibility (taking into account the likelihood of an adverse determination) of
having a Materially Adverse Effect on RBMG and (y) if adversely determined,
would not, singly or in the aggregate, have
-2-
99
a Materially Adverse Effect on any Loan Document or the Collateral.
6. Burdensome Provisions. Neither RBMG nor any Subsidiary is a
party to or bound by any Contract or Applicable Law, except those compliance
with which does not and will not have a significant possibility of having a
Materially Adverse Effect on (a) RBMG, (b) any Loan Document or (c) the
Collateral.
7. No Adverse Change or Event. Since December 31, 1995, no
change in the business, assets, Liabilities, financial condition, results of
operations or business prospects of RBMG or any Subsidiary has occurred, and no
event has occurred or failed to occur, that has had or that has a significant
possibility of having, either alone or in conjunction with all other such
changes, events and failures, a Materially Adverse Effect on (a) RBMG, (b) any
Loan Document or (c) the Collateral. RBMG acknowledges that such an adverse
change may have occurred, and such an event may have occurred or failed to
occur, at any particular time notwithstanding the fact that at such time no
Default (other than an Event of Default specified in Section 6.01(f) of any of
the Agreement) shall have occurred and be continuing.
8. Additional Adverse Facts. Except for facts and circumstances
disclosed on Schedule Annex C-5 or Schedule Annex C-8 or in the notes to the
financial statements referred to in Section 2(a) of Annex E, no fact or
circumstance is known to RBMG or IMI, as of the Syndicated Credit Agreement
Effective Date, that, either alone or in conjunction with all other such facts
and circumstances, has had or has a significant possibility of having (so far
as RBMG can foresee) a Materially Adverse Effect on (a) RBMG, (b) any Loan
Document or (c) the Collateral. If a fact or circumstance disclosed on such
Schedules or in such notes should in the future have a Materially Adverse
Effect on (x) RBMG, (y) any Loan Document or (z) the Collateral, such
Materially Adverse Effect shall be a change or event subject to Section 7
notwithstanding such disclosure.
9. Agency Approvals. RBMG is, and is in good standing as, an
FNMA- and FHLMC-approved Seller/Servicer, a GNMA-approved Issuer/Servicer, a
HUD Direct Endorsement Lender and a VA-approved lender.
-3-
100
ANNEX D
CERTAIN COVENANTS
A. Affirmative Covenants.
RBMG shall and, in the case of Sections 1 and 2, shall cause
each Subsidiary to:
10. Preservation of Existence and Properties, Scope of Business,
Compliance with Law, Payment of Taxes and Claims, Preservation of
Enforceability. (a) Preserve and maintain its corporate existence and all of
its other franchises, licenses, rights and privileges, (b) preserve, protect
and obtain all Intellectual Property, and preserve and maintain in good repair,
working order and condition all other properties, required for the conduct of
its business, (c) comply with Applicable Law, (d) pay or discharge when due all
Taxes and all Liabilities that might become a Lien on any of its properties and
(e) take all action and obtain all consents and Governmental Approvals required
so that its obligations under the Syndicated Credit Agreement Loan Documents
will at all times be legal, valid and binding and enforceable in accordance
with their respective terms, except that this Section 1 (other than clauses
(a), in so far as it requires RBMG to preserve its corporate existence, and
(e)) shall not apply in any circumstance (i) where noncompliance, together with
all other noncompliances with this Section 1, does not have a significant
possibility of having a Materially Adverse Effect on (A) RBMG, (B) any Loan
Document or (C) the Collateral or (ii) where noncompliance is being contested
in good faith and by appropriate proceedings diligently conducted and
appropriate reserves against the possibility that compliance will be required
have been established in accordance with Generally Accepted Accounting
Principles.
11. Insurance. Maintain or cause to be maintained with
financially sound and reputable insurers, insurance with respect to its
properties and business against loss or damage of the kinds customarily insured
against by reputable companies in the same or similar businesses, such
insurance to be of such types and in such amounts (with such deductible
amounts) as is customary for such companies under similar circumstances,
including errors and omissions coverage and fidelity coverage in
101
form and substance acceptable under FNMA and FHLMC guidelines, and furnish the
Agent on request full information as to all such insurance.
12. Maintain Eligibility as Servicer. Maintain its eligibility
and be in good standing as a FNMA- and FHLMC-approved Seller/Servicer, a
GNMA-approved Issuer/Servicer, a HUD Direct Endorsement Lender and a
VA-approved lender.
B. Negative Covenants.
RBMG shall not, and shall not permit any Subsidiary to,
directly or indirectly:
13. Indebtedness. Have any Indebtedness, at any time, except that
this Section 4 shall not apply to:
In the case of RBMG:
(a) Indebtedness outstanding under the Syndicated Credit
Agreements;
(b) repurchase and gestation financing, but only if and so
long as (i) such financing is with investment banks that have been
approved in writing by the Agent, such approval not to be unreasonably
withheld, and (ii) the aggregate principal amount of such financing
outstanding at the end of, and the average principal amount of all
such financing outstanding during, each calendar month is reported to
the Agent no later than the fifteenth Business Day following the end
of such month;
(c) daylight overdrafts;
(d) other Indebtedness in an aggregate principal amount
outstanding at any time not in excess of $150,000,000; and
In the case of IMI: the IMI Loans.
14. Guaranties. Be obligated, at any time, in respect of any
Guaranty, except that this Section 5 shall not apply, in the
-2-
102
case of RBMG, to (a) Existing Guaranties, (b) Permitted Guaranties and (c) the
Guaranty of the IMI Loans.
15. Liens. Permit to exist, at any time, any Lien upon any of
their respective properties or assets of any character, whether now owned or
hereafter acquired, or upon any income or profits therefrom, except that this
Section 6 shall not apply to Permitted Liens.
16. Restricted Payments. Make or declare or otherwise become
obligated to make any Restricted Payment, except that this Section 7 shall not
apply to (a) any Restricted Payment consisting of the repurchase of shares of
RBMG's Capital Securities in an aggregate amount, for all such repurchases
under this clause (a) after the Syndicated Credit Agreement Effective Date, not
in excess of $10,000,000, and (b) any Restricted Payment in any fiscal year of
RBMG ending after the Syndicated Credit Agreement Effective Date the amount of
which, together with the amounts of all Restricted Payments under this clause
(b) that RBMG and its Subsidiaries have made or declared or otherwise become
obligated to make during such fiscal year would not exceed 50% of Net Income
for such fiscal year, but only if, in the case of any Restricted Payment,
whether under clause (a) or (b), at the time of the making thereof, and
immediately after giving effect thereto, a Default would not exist. This
Section 7 shall not prohibit the payment of a dividend that constitutes a
Restricted Payment if such Restricted Payment is made within 45 days of the
declaration thereof and such Restricted Payment was permitted under this
Section 7 at the time of its declaration.
17. Merger or Consolidation. Merge or consolidate with any
Person, except that, if after giving effect thereto no Default would exist,
this Section 8 shall not apply to (a) any merger or consolidation of RBMG with
any one or more Persons, provided that RBMG shall be the continuing Person, and
(b) any merger or consolidation of any Subsidiary with any one or more other
Subsidiaries, provided that the continuing Person shall, after giving effect to
such merger or consolidation, be an Indebtedness-Free Subsidiary.
18. Investments. Make or acquire any Investment or have any
Investment outstanding, except that this Section 9 shall not
-3-
103
apply to (a) Money Market Investments, (b) extensions of credit in the ordinary
course of business, including Mortgage Loans and Mortgage-Backed Securities
made or purchased, (c) Hedge Contracts, (d) loans to any Person for use by such
Person to acquire or originate Mortgage Loans and servicing rights, provided
that such loans are secured by Mortgage Loans, servicing rights or
Mortgage-Backed Securities and are made in the ordinary course of business, (e)
loans to the Resource Bancshares Mortgage Group, Inc. Employee Stock Ownership
Plan in an aggregate principal amount not in excess of $20,000,000 at any time
outstanding, (f) Investments in IMI in an aggregate amount not in excess of
$2,500,000 at any time outstanding, and (g) Investments to which Section 10 is
not applicable by virtue of clause (b) thereof.
19. Disposition and Acquisition of Assets. (a) Sell, lease,
assign, license, transfer or otherwise dispose of any asset or any interest
therein, except that this Section 10 shall not apply to (i) any disposition of
any asset or any interest therein in the ordinary course of business (it being
expressly understood that, in the ordinary course of its business, RBMG and
IMI sell Mortgage-Backed Securities, Mortgage Loans with or without servicing
released and Servicing Rights), (ii) any disposition of any obsolete or retired
property not used or useful in the business of RBMG or such Subsidiary and
(iii) any transaction to which any of the other provisions of this Annex D
(other than Section 11) is by its express terms inapplicable.
(b) Purchase or acquire (including by way of merger or
consolidation) any asset or any interest therein, including but not limited to
Capital Securities, of any Person other than (i) acquisitions in the ordinary
course of business and (ii) other acquisitions so long as the aggregate
purchase price (exclusive of shares of the capital stock of RBMG, other than
Mandatorily Redeemable Stock) of any such acquisition or group of related
acquisitions does not exceed $20,000,000.
20. Transactions with Affiliates. Effect any transaction with any
Affiliate on a basis less favorable than would at the time be obtainable for a
comparable transaction in an arms-length dealing with an unrelated third party,
provided that this Section 11 shall not apply to transactions by RBMG with IMI
to the extent such transaction is no less favorable to RBMG than
-4-
104
would be obtainable for a comparable transaction in an arms-length dealing with
an unrelated third party.
21. Change of Business. Engage, significantly, in any type of
business that is not or is not related to the mortgage banking and lending
business and the servicing of mortgage loans.
C. Financial Tests.
RBMG shall not:
22. Minimum Net Worth. Permit its Net Worth at any time to be
less than an amount equal to (a) $130,000,000 plus (b) 100% of the sum of the
positive Net Incomes of RBMG for each of the fiscal quarters of RBMG ending
after the Syndicated Credit Agreement Effective Date plus (c) contributions
(other than contributions in the form of subordinated indebtedness) to the
capital of RBMG made after the Syndicated Credit Agreement Effective Date minus
(d) Restricted Payments permitted under Section 7 made or declared by RBMG, or
with respect to which RBMG otherwise became obligated, after the Syndicated
Credit Agreement Effective Date.
23. Total Liabilities to Adjusted Net Worth. Permit the ratio of
its Total Liabilities to its Adjusted Net Worth at any time to be greater than
8.0 to 1.0.
24. 30 Days Past Due and Foreclosed Serviced Mortgage Loans.
Permit, at any time, the sum of (a) the aggregate principal amount, at that
time, of Serviced Mortgage Loans any payments on which are more than 30 days
past due, and (b) the aggregate principal amount, at that time, of Serviced
Mortgage Loans which are being foreclosed to be more than 5% of the outstanding
principal amount, at that time, of all Serviced Mortgage Loans.
25. 90 Days Past Due and Foreclosed Serviced Mortgage Loans.
Permit, at any time, the sum of (a) the aggregate principal amount, at that
time, of Serviced Mortgage Loans any payments on which are more than 90 days
past due, and (b) the aggregate principal amount, at that time, of Serviced
Mortgage Loans which are being foreclosed to be more than 2% of the
-5-
105
outstanding principal amount, at that time, of all Serviced Mortgage Loans.
26. Balance of Servicing Portfolio. Permit at any time the
principal balance of all Serviced Mortgage Loans to be less than $4,000,000,000
at any time.
27. Cash Flow to Required Principal Payments. Permit the ratio at
the end of any fiscal quarter of its Cash Flow for that fiscal quarter plus its
Cash Flow for the immediately preceding fiscal quarter to its Required
Principal Payments during the next two succeeding fiscal quarters to be less
than 1.3 to 1.0.
-6-
106
ANNEX E
INFORMATION
Section 1. Information to Be Furnished. From the Effective
Date and until the Repayment Date, RBMG shall furnish to the Agent:
(a) Quarterly Financial Statements. As soon as available and
in any event within 45 days after the close of each quarterly accounting period
of RBMG, commencing with the quarterly period ending June 30, 1996,
consolidated and, if requested by the Agent, consolidating balance sheets of
RBMG and the Consolidated Subsidiaries as at the end of such quarterly period
and the related consolidated and, if requested by the Agent, consolidating
statements of income, retained earnings and cash flows of RBMG and the
Consolidated Subsidiaries for such quarterly period and for the elapsed portion
of the fiscal year ended with the last day of such quarterly period, setting
forth in each case in comparative form the figures for the corresponding
periods of the previous fiscal year.
(b) Year-End Financial Statements; Accountants' Certificates.
As soon as available and in any event within 90 days after the end of each
fiscal year of RBMG, commencing with the fiscal year ending December 31, 1996:
(i) consolidated and, if requested by the Agent,
consolidating balance sheets of RBMG and the Consolidated Subsidiaries
as at the end of such fiscal year and the related consolidated and
consolidating statements of income, retained earnings and cash flows
of RBMG and the Consolidated Subsidiaries for such fiscal year,
setting forth in comparative form the figures as at the end of and for
the previous fiscal year;
(ii) an unqualified audit report of Price Waterhouse,
or other independent certified public accountants of recognized
standing satisfactory to the Required Banks, on such of the financial
statements referred
107
to in clause (i) as are consolidated financial statements; and
(iii) a certificate of such accountants addressed
to the Board of Directors of RBMG and in form and substance
satisfactory to the Required Banks stating that they have caused the
Agreement to be reviewed and that, in making the examination necessary
for their report on such consolidated financial statements, nothing
came to their attention that caused them to believe that, as of the
date of such financial statements, RBMG was not in compliance with the
covenants contained in Sections 7, 9, 13, 14, 15, 16, 17 and 18 of
Annex D.
(c) Officer's Certificate as to Financial Statements and
Defaults. At the time that financial statements are furnished pursuant to
Section (a) or (b), a certificate of the vice chairman or chief financial
officer of RBMG in the form of Schedule Annex E-1(c).
(d) Monthly Statements. As soon as available and in any
event no later than 15 Business Days after the end of each month and at such
other times as the Agent or the Required Banks may reasonably request, a
balance sheet and income statement at and as of the last day of each month and,
in the case of each income statement, for the year-to-date, in each case in a
form acceptable to the Agent, together with a certificate of the vice chairman
or chief financial officer of RBMG setting forth the calculation for
determining compliance with Sections 13 through 18 of Annex D in the same
detail as set forth in the certificate required to be delivered quarterly in
the form of Schedule Annex E-1(c).
(e) Audit Reports. Promptly after receipt thereof by RBMG,
unless prohibited by Applicable Law, copies of each HUD Single Family Audit
Report and FNMA and FHLMC audit reports on RBMG and its operations.
(f) Other Information. Promptly, such additional financial
and other information, including financial statements of RBMG and, if
available, any Approved Investor (other than FNMA or FHLMC), and such
information regarding the Collateral as any Bank, through the Agent, may from
time to time reasonably
-2-
108
request, including such information as is reasonably necessary for any Bank to
grant participations of its interests in Loans hereunder or to enable another
financial institution to become a signatory hereto. The Agent shall promptly
deliver to each Bank a copy of all notices, reports and other materials
furnished to it by RBMG pursuant to this Section 1.
(g) Reports and Filings. (i) Promptly upon receipt thereof,
copies of all reports relating to the business, as a whole, assets,
Liabilities, financial condition, results of operation, or business or
financial prospects of RBMG or any of its Subsidiaries, if any, submitted to
RBMG or any Subsidiary, or the Board of Directors of RBMG or any Subsidiary, by
its independent certified public accountants, including any management letter
and (ii) as soon as practicable, copies of all such financial statements and
reports as RBMG or any Subsidiary shall send to its stockholders and of all
registration statements and all regular or periodic reports that RBMG or any
Subsidiary shall file, or may be required to file, with the Securities and
Exchange Commission or any successor commission.
(h) Requested Information. From time to time and promptly
upon request of any Bank, such Information regarding the Loan Documents, the
Loans or the business, assets, Liabilities, financial condition, results of
operations or business prospects of RBMG or any Subsidiaries as such Bank may
reasonably request, in each case in form and substance and certified in a
manner satisfactory to the requesting Bank.
(i) Notice of Defaults, Material Adverse Changes and Other
Matters. Prompt notice of:
(i) the threatening or commencement of, or the
occurrence or nonoccurrence of any change or event relating to, any
action, suit or proceeding that would cause the Representation and
Warranty contained in Section 5 of Annex C to be incorrect if made at
such time,
(ii) the occurrence or nonoccurrence of any change
or event that would cause the Representation and Warranty contained in
Section 7 of Annex C to be incorrect if made at such time,
-3-
109
(iii) any change in the rating given by any
nationally recognized rating agency to any securities issued by RBMG,
(iv) any event or condition referred to in clauses
(a) through (g) of Section 6.01 of the Agreement whether or not such
event or condition shall constitute an Event of Default,
(v) any amendment of the certificate of
incorporation or by-laws of RBMG or IMI,
(vi) any change in the name of any Subsidiary, its
jurisdiction of incorporation, the percentages of the various classes
of its Capital Securities owned by RBMG or another Subsidiary or its
status as a Consolidated or non-Consolidated Subsidiary, and
(vii) the formation of each Subsidiary.
(j) Regulatory Reports and Information. (i) Promptly upon
receipt thereof, copies of all reports relating to RBMG, including the GNMA
"Issuer Feedback Report" and "Expert Rating" report and any similar reports of
FNMA and FHLMC, (ii) promptly after the occurrence thereof, notice of (1) any
loss by RBMG of its status as an issuer in good standing of Mortgage Backed
Securities, including its status as a GNMA issuer, (2) the assignment of RBMG
to a special watch group, including an assignment by GNMA of RBMG to its Issuer
Assistance Group, (3) any suspension or restriction to review of any GNMA
commitments for RBMG, (4) receipt of any notice of intent to default or the
entry into a supervisory agreement, including any such with GNMA, (iii)
promptly after receipt thereof, copies of all correspondence and all notices
relating to any of the foregoing and (iv) prompt notice of any other adverse
development that is or could be prejudicial to RBMG's continued status as an
FNMA and FHLMC-approved Seller/Servicer, a GNMA-approved Issuer/Servicer, an
HUD Direct Endorsement Lender and a VA-approved lender.
(k) Within 30 days after the end of each calendar quarter,
(a) a written appraisal in form and substance satisfactory to the Agent as to
the market value of the Servicing Rights, prepared by a third-party appraiser
satisfactory to the
-4-
110
Agent and (b) a written appraisal, in form and substance acceptable to the
Agent, of the value of Hedge Contracts.
Section 2. Accuracy of Financial Statements and Information.
(a) Historical Financial Statements. RBMG hereby represents
and warrants that (i) Schedule Annex E-2(a) sets forth a complete and correct
list of the financial statements submitted by RBMG to the Banks in order to
induce them to execute and deliver the Agreement, (ii) such financial
statements present fairly, in accordance with Generally Accepted Accounting
Principles, the financial position of RBMG as at their respective dates and the
results of operations, retained earnings and, as applicable, changes in
financial position or cash flows of RBMG for the respective periods to which
such statements relate, and (iii) except as disclosed or reflected in such
financial statements, as of March 31, 1996, RBMG had no Liability, contingent
or otherwise, or any unrealized or anticipated loss, that, singly or in the
aggregate, has had or has a significant possibility of having a Materially
Adverse Effect on RBMG.
(b) Future Financial Statements. The financial statements
delivered pursuant to Section 1(a), (b) or (d) of this Annex E shall present
fairly, in accordance with Generally Accepted Accounting Principles (except for
changes therein or departures therefrom that are described in the certificate
or report accompanying such statements), the consolidated and, if applicable,
consolidating financial position of RBMG and the Consolidated Subsidiaries as
at their respective dates and the consolidated and, if applicable,
consolidating results of operations, retained earnings and cash flows of RBMG
and such Subsidiaries for the respective periods to which such statements
relate, and the furnishing of the same to the Banks shall constitute a
Representation and Warranty by RBMG made on the date the same are furnished to
such Banks to that effect and to the further effect that, except as disclosed
or reflected in such financial statements, as at the respective dates thereof,
neither RBMG nor any Subsidiary had any Liability, contingent or otherwise, or
any unrealized or anticipated loss, that, singly or in the aggregate, has had
or has a significant possibility of having a Materially Adverse Effect on RBMG.
-5-
111
(c) Historical Information. RBMG hereby represents and
warrants that all Information furnished to the Agent or the Banks by or on
behalf of RBMG prior to the Syndicated Credit Agreement Effective Date in
connection with or pursuant to the Loan Documents and the relationships
established thereunder, at the time the same was so furnished, but in the case
of Information dated as of a prior date, as of such date, (A) in the case of
any Information prepared in the ordinary course of business, was complete and
correct in all material respects and in the light of the purpose for which it
was prepared, and, in the case of any Information the preparation of which was
requested by any Bank, was complete and correct in all material respects to the
extent necessary to give such Bank true and accurate knowledge of the subject
matter thereof, (B) did not contain any untrue statement of a material fact,
and (C) did not omit to state a material fact necessary in order to make the
statements contained therein not misleading in the light of the circumstances
under which they were made.
(d) Future Information. All Information furnished to the
Agent or the Banks by or on behalf of RBMG on or after the Syndicated Credit
Agreement Effective Date in connection with or pursuant to any of the Loan
Documents or in connection with or pursuant to any amendment or modification
of, or waiver of rights under, any of the Loan Documents, shall, at the time
the same is so furnished, but in the case of Information dated as of a prior
date, as of such date, (i) in the case of any Information prepared in the
ordinary course of business, be complete and correct in all material respects
and in the light of the purpose for which it was prepared, and, in the case of
any Information required by the terms of any of the Loan Documents or the
preparation of which was requested by any Bank, be complete and correct to the
extent necessary to give such Bank true and accurate knowledge of the subject
matter thereof, (ii) not contain any untrue statement of a material fact, and
(iii) not omit to state a material fact necessary in order to make the
statements contained therein not misleading in the light of the circumstances
under which they were made, and the furnishing of the same to the Agent or any
Bank shall constitute a Representation and Warranty by RBMG made on the date
the same are so furnished to the effect specified in clauses (i), (ii) and
(iii).
-6-
112
Section 3. Additional Covenants Relating to Disclosure. From
the Syndicated Credit Agreement Effective Date and until the Repayment Date,
RBMG shall and shall cause each Subsidiary to:
(a) Accounting Methods and Financial Records. Maintain a
system of accounting, and keep such books, records and accounts (which shall be
true and complete in all material respects), as may be required or necessary to
permit (i) the preparation of financial statements required to be delivered
pursuant to Section 1(a), (b) or (d) of this Annex E and (ii) the determination
of the compliance of RBMG with the terms of the Loan Documents.
(b) Fiscal Year. Maintain the same opening and closing dates
for each fiscal year as for the fiscal year reflected in the Base Financial
Statements or, if the opening and closing dates for the fiscal year reflected
in the Base Financial Statements were determined pursuant to a formula,
determine the opening and closing dates for each fiscal year pursuant to the
same formula.
(c) Visits, Inspections and Discussions. (i) Permit each
Bank, from time to time, as often as may be reasonably requested, during normal
business hours, to (A) visit any of its premises or property, (B) inspect, and
verify the amount, character and condition of, any of its property, (C) review
and make extracts from its books and records, including management letters
prepared by its independent certified public accountants, and (D) discuss with
it, its principal officers, independent certified public accountants,
suppliers, customers, debtors and other creditors its business, assets,
Liabilities, financial condition, results of operation and business prospects
and (ii) in the case of Persons, premises, property, books and records, not
within its immediate control, use all reasonable efforts to cause each such
Person, permit representatives (whether or not officers or employees) of any of
the Required Banks, from time to time, as often as may be reasonably requested,
during normal business hours, to (A) visit premises or property of others on
which any of its property or books and records (or books and records of others
relating to it) are located, (B) inspect and verify the amount, character and
condition of, any of its property not within its immediate control, (C) review
and make
-7-
113
extracts from books and records of others relating to it, and (D) discuss with
other Persons (including their principal officers) its business, assets,
Liabilities, financial condition, results of operation and business prospects.
-8-
