EXHIBIT 10.1
WAREHOUSE LOAN AND SECURITY AGREEMENT
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This Warehouse Loan and Security Agreement ("Agreement") is made and
entered into on this 30th day of May between EliteAgents, Inc., a New Jersey
Corporation with its principal place of business located at 00 Xxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxxxx, 00000 ("Borrower"), and The Provident Bank, an Ohio
banking corporation with its principal place of business located at Xxx Xxxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000 ("Provident").
WITNESSETH:
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WHEREAS, Borrower is engaged in the business of underwriting, processing,
originating, closing, funding, purchasing, servicing and selling mortgage loans
secured by first or second liens evidenced by mortgages on real property; and
WHEREAS, Borrower has requested and Provident has agreed to finance the
funding of mortgage loans by Borrower in connection with its origination thereof
subject to the terms, conditions and limitations set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises, the extension of credit
by Provident to Borrower, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Provident and Borrower agree
as follows:
1. DEFINITIONS. (a) When used in this Agreement, the following terms shall
have the following meanings and the terms defined elsewhere in this Agreement
shall have the meanings assigned to them (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Advance" shall mean any amount loaned by Provident to Borrower under this
Agreement.
"Affiliate" shall mean, in relation to any Person (in this definition
called "Affiliated Person"), any Person (i) which (directly or indirectly)
controls or is controlled by or is under common control with such Affiliated
Person; or (ii) which (directly or indirectly) owns or holds five percent (5%)
or more of any equity interest in Borrower; or (iii) five percent (5%) or more
of whose voting stock or other equity interest is directly or indirectly owned
or held by Borrower. For the purposes of this definition, the term "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession (directly or indirectly) of the power to direct or to cause the
direction of the management or the policies of such Person, whether through the
ownership of shares of any class in the capital or any other voting securities
of such Person or by contract or otherwise.
"Assignment of Mortgage" shall mean, with respect to any Mortgage, an
assignment of the Mortgage, notice of transfer or equivalent instrument, in
recordable form, sufficient under the laws of the jurisdiction in which the
related Mortgaged Property is located to reflect the assignment of the Mortgage.
"Business Day" shall mean a day other than Saturdays, Sundays, holidays or
other days on which the main office of Provident is not open for business.
"Cash Collateral Account" shall mean the demand deposit account comprising
a portion of the Collateral and established and maintained by Borrower with
Provident pursuant to Section 5(d).
"Change of Control" shall mean the time at which (i) any Person (including
a Person's Affiliates and associates) or group (as that term is understood under
Section 13(d) of the Securities Exchange Act of 1934 and the roles and
regulations there under), other than Management Shareholders and Affiliates
thereof (the "Control Group") or a group controlled by the Control Group, has
become the beneficial owner of a percentage (based on voting power, in the event
different classes of stock shall have different voting powers) of the voting
stock of Borrower equal to at least ten percent (10%), (ii) there shall be
consummated any consolidation or merger of Borrower pursuant to which Borrower's
common stock (or other capital stock) would be converted into cash, securities
or other property, other than a merger or consolidation of Borrower in which the
holders of such common stock (or such other capital stock) immediately prior to
the merger have the same proportionate ownership, directly or indirectly, of
common stock of the surviving corporation immediately after the merger as they
had of Borrower's common stock immediately prior to such merger, or (iii) all or
substantially all of Borrower's assets shall be sold, leased, conveyed or
otherwise disposed of as an entirety or substantially as an entirety to any
Person (including an Affiliate or associate of Borrower) in one or a series of
transactions.
"Closing Date" shall mean the date on which Borrower sells, transfers or
otherwise disposes of a Mortgage Loan funded and originated by Borrower with an
Advance made by Provident to Borrower under this Agreement.
"Collateral" shall have the meaning set forth in Section 5(a).
"Collections" shall mean, collectively, all Sale Proceeds, all Payment
Collections and all other collections and Proceeds on or in respect of the
Mortgage Loans.
"Cost and Fee Schedule" shall have the meaning set forth in Section 2(f).
"Credit File" shall mean, as to each Mortgage Loan, a copy of the Mortgage
and copies of all intervening assignments of mortgage, if any, with evidence of
recording thereon, showing a complete chain of title from the originator to
Borrower; the original attorney's opinion of title or the original policy of
title insurance, if not previously delivered to Provident; the originals of all
assumption, modification and extension agreements, if any; and all applications,
credit reports, salary or employment verifications, appraisals, surveys, other
underwriting and work papers, closing statements, HUD-1 settlement statements
and any addendums thereto, truth-in-lending disclosures, right of rescission
notices, payment histories, and all other closing documents and all other
agreements, reports, certificates, documents and instruments related thereto or
obtained or prepared in connection therewith and included or includable in
Borrower's mortgage file relating to such Mortgage Loan.
"Default Interest Rate" shall mean an annual rate of interest which shall
(to the extent permitted by applicable law) at all times be equal to four
percent (4%) above the Interest Rate.
"Demand For Payment" shall have the meaning set forth in Section 4(a).
"Document Custodian" shall mean Borrower, as custodian and bailee for
Provident, or any successor appointed by Provident at any time.
"Fees" shall have the meaning set forth in Section 2(f).
"Funding Date" shall mean the date on which an Advance is made by Provident
to Borrower under this Agreement.
"Initial Collateral Package" shall mean, as to each Mortgage Loan: (i) the
original Mortgage Note and the originals of all intervening endorsements, if
any, showing a complete chain of title from the originator of the Mortgage Loan
to Borrower, endorsed in blank (either on the Mortgage Note or a separate
allonge attached thereto); (ii)a certified copy of the original Mortgage and
copies of all intervening assignments of the Mortgage, if any; (iii) the
original Assignment of Mortgage in favor of Provident in recordable form for the
jurisdiction in which the Mortgaged Property is located; and (iv) the original
attorney's opinion of title or the original policy of title insurance (or if
such original policy of title insurance has not yet been received by Borrower, a
copy of such policy or a title insurance binder or commitment for the issuance
of such policy).
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"Interest Rate" shall mean an annual rate of interest which shall (to the
extent permitted by applicable law) at all times be equal to the One Month Libor
Rate plus the applicable margin determined by reference to the factors
applicable to such determination set forth in the Cost and Fee Schedule in
effect on an Interest Payment Date or Closing Date, as the case may be.
"Lien" shall mean any lien, mortgage, pledge, security interest, charge or
other encumbrance of any kind including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest.
"Loan Documents" shall mean this Agreement, the Security Documents, the
Policies and Procedures, the Cost and Fee Schedule and any other instrument,
certificate or document executed in connection with or pursuant to this
Agreement whether concurrently herewith or subsequent hereto.
"Losses" shall have the meaning set forth in Section 1l(b).
"Management Shareholders" shall mean those shareholders of Borrower who are
senior executive officers of Borrower on the date of this Agreement.
"Maturity Date" shall have the meaning set forth in Section 4(b).
"Mortgage" shall mean the mortgage, deed of trust or other instrument
creating a first or second Lien on an estate in fee simple interest in the
Mortgaged Property securing a Mortgage Loan.
"Mortgage Loan" shall mean any mortgage loan funded and originated by
Borrower with any Advance made by Provident to Borrower under this Agreement.
"Mortgage Loan Documents" shall mean, with respect to a Mortgage Loan, the
documents comprising the Initial Collateral Package and the Credit File for such
Mortgage Loan.
"Mortgage Note" shall mean, with respect to a Mortgage Loan, the original
note or other evidence of indebtedness pursuant to which the related Mortgagor
agrees to pay the indebtedness evidenced thereby and which is secured by the
related Mortgage.
"Mortgaged Property" shall mean the underlying real property, including all
improvements and additions thereon, securing a Mortgage Loan.
"Mortgagor" shall mean the obligor or obligors under a Mortgage Note.
"Other Obligations Secured Hereby" shall mean all of Borrower's debts,
obligations or liabilities of every kind, nature, class and description to
Provident (other than those under this Agreement and the other Loan Documents),
now due or to become due, direct or indirect, absolute or contingent, presently
existing or hereafter arising, joint or several, secured or unsecured, purchase
money or non-purchase money, related or unrelated, similar or dissimilar,
whether for payment or performance, regardless of how the same arise or by what
instrument, agreement or book account they may be evidenced, or whether
evidenced by any immanent, agreement or book account, including, without
limitation, all loans (including any loan by renewal or extension), and all
overdrafts, all guarantees, all bankers acceptances, all agreements, all letters
of credit issued by Provident for Borrower and the applications relating
thereto, all indebtedness of Borrower to Provident, all undertakings to take or
refrain from taking any action, and all indebtedness, liabilities and
obligations owing from Borrower to others which Provident may obtain by
purchase, negotiation, discount, assignment or otherwise.
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"Payment Collections" shall mean, collectively, all collections on the
Mortgage Loans attributed to the payment of the principal amount thereof,
accrued interest thereon or any fees, charges or other amounts payable there
under or in respect thereof.
"Person" shall mean an individual, a company, a limited liability company,
a corporation, an association, a partnership, a joint venture, an unincorporated
trade or business enterprise, a trust, an estate, or other legal entity or a
government (national, regional or local), court, arbitrator or any agency,
instrumentality or official of the foregoing.
"One Month Libor Rate" shall mean the rate of interest published from time
to time in the "Money Rates" column of The Wall Street Journal (Central Edition)
as the "one month libor rate" on the last business day of each month, if such
rate ceases to be so published, then such other rate as may be substituted by
Provident as the libor rate, which may be the rate of interest announced by
Provident from time to time as its libor rate. The One Month Libor Rate shall
change on the first business day of each month and be held for that calendar
month. The One Month Libor Rate on the last business day of the each month will
be held for that calendar month. The index will be set on each advance at
disbursement and held until settlement.
"Policies and Procedures" shall mean Provident's Policies and Procedures
for its Warehouse Division as of the date of this Agreement, as amended,
modified, restated or supplemented by Provident from time to time.
"Sale Proceeds" shall mean (i) any proceeds received or receivable by
Borrower with respect to or in respect of any sale, transfer or other
disposition of any Mortgage Loan and (ii) any proceeds received or receivable by
Borrower with respect to or in respect of any sale, transfer, disposition,
condemnation or casualty event and all other amounts from any disposition,
taking, damage or destruction of any Mortgaged Property acquired by Borrower
upon foreclosure (or deed in lieu of foreclosure) of any Mortgage Loan.
"Security Documents" shall have the meaning set forth in Section 5(b).
"Third Party Investor" shall mean any Person with whom Borrower has
contracted to sell any Mortgage Loan that has been funded and originated by
Borrower with any Advance made by Provident to Borrower under this Agreement.
Provident may itself be a Third Party Investor.
"UCC" shall mean the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of Ohio; provided, however, that in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection, or priority of Provident's security interest in any of the
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of Ohio, the term "UCC" shall mean the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such attachment, perfection, or priority and for
purposes of definitions related to such provisions.
(b) All terms defined in the UCC and used in Section 5 of this Agreement
shall have the meanings assigned to such terms in the UCC.
(c) Where appropriate, words importing the singular only shall include the
plural and vice versa.
2. ADVANCES.
(a) Subject to the terms and conditions hereof and the Policies and
Procedures, which are hereby incorporated herein by this reference, Provident
may elect, in its sole discretion, to make Advances to Borrower from time to
time in such amounts as Borrower may request. Nothing herein shall be deemed or
construed as a commitment by Provident to make any Advance hereunder and it is
expressly acknowledged and agreed by Borrower that the decision to make any
Advance hereunder is, and shall at all times be, wholly discretionary on the
part of Provident.
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(b) In order to obtain Advances, Borrower shall comply with the
requirements set forth in this Agreement and the Policies and Procedures and
shall furnish Provident with such requests and all other documents Provident may
request or require at any time in connection with any Advance. In addition, the
following conditions precedent, unless waived in whole or in part by Provident,
shall be satisfied before Provident makes any Advance hereunder: (i) Provident,
in its sole discretion, shall have approved the underwriting of the Mortgage
Loans to be funded with any Advance; (ii) Borrower shall have provided Provident
with an insured closing letter, evidence of a current errors and omissions
insurance policy with limits of at least $1,000,000, an executed closing agent
agreement and wiring instructions for each closing agent used by Borrower to
close the Mortgage Loans funded with any Advance, each of which shall be
acceptable to Provident in its sole discretion; (iii) Borrower shall have
furnished Provident with an executed, recordable Power of Attorney covering the
items set forth in Section 5(e) hereof for each state in which Borrower does
business; and (iv) Provident, or its agent, bailee or designee, shall have
received the Initial Collateral Package for each of the Mortgage Loans funded
with any Advance. Each request for an Advance by Borrower shall constitute a
certification that each of the representations and warranties made by Borrower
to Provident in this Agreement or the other Loan Document shall be true and
correct in all material respects on and as of the date when made and shall, for
all purposes of this Agreement, be deemed to be repeated on and as of each date
an Advance is made by Provident to Borrower hereunder and shall be true and
correct in all material respects on and as of each of such date, except as
affected by the consummation of the transactions contemplated by this Agreement
and the other Loan Documents, and Borrower shall have performed, complied with
and observed all of its covenants and agreements contained in this Agreement and
the other Loan Documents on and as of each date an Advance is made by Provident
to Borrower hereunder.
(c) Advances hereunder will be made by Provident on behalf of Borrower to
third parties in connection with the funding of the Mortgage Loans
originated by Borrower. All matters relating to the funding of any
Mortgage Loan hereunder shall be acceptable to Provident in its sole
discretion.
(d) Borrower represents, warrants and covenants to Provident that all
proceeds of all Advances shall be used by it solely to fund Mortgage
Loans originated by Borrower in the ordinary course of its business
and for no other use or purpose.
(e) Advances for the funding of any Mortgage Loan originated by Borrower
shall not exceed one hundred percent (100%) of the original principal
amount of such Mortgage Loan.
(f) In connection with each Advance, Borrower agrees to pay Provident the
transaction fees charged by Provident with respect to the Mortgage
Loans funded and originated with such Advance ("Fees"). The amounts of
Fees payable by Borrower in connection with any Advance shall be
determined by reference to the Cost and Fee Schedule in effect on the
Funding Date of such Advance (the "Cost and Fee Schedule"). The Cost
and Fee Schedule in effect on the date of this Agreement is attached
hereto as Schedule A. Any Cost and Fee Schedule shall remain in effect
until a new Cost and Fee Schedule is delivered to Borrower in
accordance with the requirements of Section 11 (f).
3. INTEREST PAYABLE ON ADVANCES. Borrower promises to pay to Provident
interest in arrears on the unpaid amount of each Advance made by Provident to
Borrower pursuant to this Agreement and on the unpaid amount of any interest not
paid when due at a variable rate of interest per annum equal at all times to the
Interest Rate. Interest shall be calculated on the daily-unpaid amount of each
Advance from its Funding Date. Interest with respect to each Advance hereunder
shall be payable: (i) commencing on the date that is sixty-one (61) days after
the Funding Date of the Advance and continuing on the same day of each
consecutive month thereafter; and (ii) on its Maturity Date. Payments of
interest shall be due and payable as set forth above until payment in full of
all Advances. All interest under this Agreement shall be calculated on the basis
of a year consisting of 360 days (comprised of twelve 30 day months) and paid
for actual days elapsed.
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4. TERMINATION; MANDATORY REPAYMENTS OF ADVANCES PRIOR TO TERMINATION
(a) Provident may, at any time, for any reason and without prior notice,
terminate this Agreement and demand that Borrower pay the aggregate
unpaid amount of all Advances made by Provident to Borrower pursuant
to this Agreement, all accrued and unpaid interest thereon as well as
all Fees, charges and other amounts payable hereunder and under the
Loan Documents ("Demand For Payment").
Following a Demand for Payment, the aggregate unpaid amount of all
Advances made by Provident to Borrower pursuant to this Agreement, together with
all accrued and unpaid interest thereon as well as all Fees, charges and other
amounts payable hereunder and under the other Loan Documents shall be
immediately due and payable in full and no future or additional Advances will be
made by Provident to Borrower hereunder.
(b) Prior to termination of this Agreement as provided for above, Borrower
shall repay to Provident the unpaid amount of each Advance made by
Provident to Borrower hereunder, all accrued and unpaid interest
thereon and all Fees, charges and other amounts payable hereunder, on
the earlier to occur of: (i) the Closing Date on which Borrower sells
or otherwise disposes of the Mortgage Loan(s) funded and originated
with the Advance whether by sale to a Third Party Investor or
otherwise; or (ii) on or before the applicable number of days after
its Funding Date set forth in the Cost and Fee Schedule under the
heading entitled "Days Allowed for Purchase by Third Party Investor"
(the earlier to occur of (i) or (ii) being referred to herein as the
"Maturity Date").
5. GRANT OF SECURITY INTEREST.
(a) To secure the prompt payment of the Advances, interest and all other
amounts payable hereunder and under the other Loan Documents and the due and
punctual performance and observance by Borrower of all of its other covenants,
obligations and liabilities under this Agreement and the other Loan Documents
and also to secure all of the Other Obligations Secured Hereby, Borrower hereby
grants to Provident a security interest in and to, and hereby pledges and
collaterally assigns to Provident, all of its rights, title, interest and claims
in, to and under all of the following property, wherever located, whether now or
hereafter owned, held or acquired, or hereafter existing or arising
(collectively, the "Collateral"):
(i) all Mortgage Loans;
(ii) all Mortgage Loan Documents including, without limitation, all
Mortgage Notes, Mortgages and Assignments of Mortgages
relating to the Mortgage Loans;
(iii) all rights to service or subservice the Mortgage Loans;
(iv) all certificates, notes and other securities of any kind
whatsoever, residual or otherwise, issued to Borrower or now
or hereafter owned, held or acquired by Borrower in connection
with or related to any mortgage loan securitization or any
asset-back transaction involving the Mortgage Loans;
(v) all of Borrower's rights under contracts or agreements to
which Borrower is party (but none of its covenants,
obligations or liabilities there under) in connection with the
Mortgage Loans, including all contracts or agreements with all
Third Party Investors and all attorney's opinions of title and
title insurance policies;
(vi) the Cash Collateral Account and all funds in the Cash
Collateral Account; and
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(vii) all Proceeds of any and all of the foregoing Collateral in
whatever form, including but not limited to, all payments made
by Mortgagors to Borrower in connection with the Mortgage
Loans and all premiums paid to Borrower by Third Party
Investors in connection with the sales of the Mortgage Loans.
(b) Borrower shall take all actions necessary or appropriate under all
applicable laws, or as requested by Provident, to perfect, maintain and
preserve, and to continue as perfected, Provident's first lien and security
interest in the Collateral. Borrower shall pay all costs of preparing,
recording and filing UCC Financing Statements (and any continuation or
termination statements with respect thereto) and any other documents,
rifles, statements, assignments or the like reasonably required to create,
maintain, preserve or perfect the liens or security interests granted under
the Loan Documents, together with costs and expenses of any lien or UCC
searches required by Provident in connection with the making of any
Advance. At Provident's request, Borrower shall execute and deliver to
Provident at any time and from time to time hereafter, all supplemental
documentation that Provident may reasonably request to perfect, maintain,
preserve or continue the security interest and liens in the Collateral
granted Provident hereby and under any of the other Loan Documents
(collectively, the "Security Documents"), in form and substance acceptable
to Lender, and pay the costs of preparing and recording or filing of the
same. Borrower agrees that a carbon, photographic, or other reproduction of
this Agreement or of a financing statement is sufficient as a financing
statement. Borrower shall promptly notify Provident concerning any changes
in its name, identity or structure, concerning any changes in the
address(es) of its chief executive office or other places of business or
concerning any changes in its trade name(s) or name(s) under which it does
business.
(c) The Document Custodian shall maintain possession of each Credit File
and the Mortgage Loan Documents comprising each Credit File (other than the
Initial Collateral Package) for each Mortgage Loan. Promptly after
Provident's request therefore, Borrower, at its expense, shall cause the
Credit Files held by the Document Custodian to be delivered to Provident or
its agent, bailee or other designee.
(d) Borrower shall, at all times, maintain the Cash Collateral Account with
Provident. Borrower shall deposit or cause to be deposited all Collections
into the Cash Collateral Account when and as Collections are received or
receivable by Borrower. Withdrawals may be made from the Cash Collateral
Account by Borrower in accordance with the Policies and Procedures.
Provident is hereby authorized to withdraw funds from the Cash Collateral
Account from time to time, either before or after Provident's Demand for
Payment, and to apply such withdrawals to the payment of the Advances,
accrued and unpaid interest thereon and Fees, charges and other amounts
payable hereunder or under the other Loan Documents.
(e) Borrower hereby makes, constitutes and appoints Provident (by any of
its officers, employees or agents), its true and lawful agent and
attorney-in-fact and hereby gives and grants to Provident full power and
authority to do and perform each and every act whatsoever requisite,
necessary and proper (i) to endorse the related Mortgage Note to the Third
Party Investor that purchases any Mortgage Loan; (ii) to endorse any
original Mortgage Note to Provident or the purchaser thereof should
Borrower default in its obligations hereunder; (iii) to prepare, execute
and record on behalf of Borrower any Assignment of Mortgage; (iv) at the
sole option of Provident, to prosecute, in Borrower's or Provident's name,
any and all claims or causes of action collaterally assigned to Provident
hereunder; and (v) to do and perform every act necessary to place Provident
in position to enforce the payment of any Mortgage Loan.
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6. BORROWER'S REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants to Provident as follows as of the date hereof and as of each Funding
Date:
(a) Borrower is and shall at all times be, duly organized, validly
existing and in good standing under the laws of the State set forth in the
first paragraph of this Agreement and has, and shall at all times have,
full power and authority and legal right to engage in and carry on
Borrower's business as now being conducted, to undertake the borrowings
contemplated hereby and to execute and deliver each of the Loan Documents.
Borrower is qualified and licensed in each jurisdiction wherein the nature
or conduct of its business make such qualification necessary or advisable.
Borrower is currently qualified and licensed in good standing in each such
jurisdiction. Borrower's name as set forth in the caption of this Agreement
and as set forth on the signature page of this Agreement is Borrower's
correct individual, partnership or corporate name, as the case may be.
(b) Borrower has full power and authority and legal right to enter
into this Agreement and each of the other Loan Documents, and to perform,
observe and comply with all of its agreements and obligations under each of
such documents, including without limitation, the making by Borrower of the
borrowings contemplated hereby and the granting by Borrower of the security
interest in the Collateral pursuant to Section 5.
(c) The execution and delivery by Borrower of this Agreement and the
other Loan Documents, the performance by Borrower of all of its agreements
and obligations hereunder and thereunder and the making by Borrower of the
borrowings contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of Borrower and do not and will not
constitute a breach, violation or event of default (or an event which would
become an event of default with the lapse of time or notice or both) under
any judgment, decree, note, agreement, indenture or other instrument to
which Borrower is a party or otherwise subject.
(d) Borrower owns or possesses all rights, licenses, permits,
franchises and the like necessary for the conduct of its business as
presently conducted and proposed to be conducted. All of the foregoing
rights, licenses permits and franchises are in full force and effect, and
Borrower is in compliance with all of the foregoing. No event has occurred
which permits, or after notice or lapse of time or both would permit, the
revocation or termination of any such right, license, permit or franchise,
or affects the rights of Borrower there under.
(e) The balance sheets, statements of income and other financial
statements previously delivered to Provident present fairly the financial
condition and results of operations of Borrower as of the dates thereof and for
the fiscal periods then ended. There are no material liabilities or obligations,
secured and unsecured (whether accrued, absolute or actual, contingent or
otherwise), which were not reflected in the balance sheets of Borrower as of the
dates thereof.
(f) No changes have occurred in the assets, liabilities or financial
condition of Borrower from those reflected on the most recent balance sheet
delivered to Provident (the "Current Balance Sheet") which, individually or in
the aggregate, have been adverse. Since the date of the Current Balance Sheet,
there has been no adverse development in the business or in the operations or
prospects of Borrower.
(g) Borrower is the sole owner of and has good arid marketable title
to the Collateral, free and clear of all Liens and encumbrances whatsoever,
except for the security interest granted by Borrower pursuant to Section5. All
information furnished to Provident concerning the Collateral is and will be
complete, accurate and correct in all respects when furnished.
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7. COVENANTS REGARDING THE BORROWER. Borrower covenants and agrees with
Provident as follows:
(a) Borrower shall deliver to Provident as soon as available and, in any
event, within thirty (30) days after the end of each calendar quarter, quarterly
unaudited financial statements of Borrower and within seventy-five (75) days
after the end of each fiscal year of Borrower, annual financial statements of
Borrower which, in each case, shall include a balance sheet, statement of
income, statement of changes in financial position and notes to financial
statements. Provident reserves the right to require Borrower to deliver audited
annual financial statements.
Such financial statements shall be certified by the chief executive officer
of Borrower to the effect that such financial statements reflect, in his opinion
and in the opinion of senior management of Borrower, all adjustments necessary
to present fairly the financial position of Borrower as at the end of such
quarter or year, as the case may be, and the results of its operations for the
period then ended.
(b) Borrower shall deliver to Provident all information Provident may
reasonably request at any time and from time to time concerning its business,
financial condition, results of operations, the Mortgage Loans financed
hereunder or the other Collateral.
(c) Borrower covenants to keep the Credit File for each of the Mortgage
Loans financed hereunder at all times at Borrower's business premises or at such
other location or locations as Provident may approve in writing. Borrower
further covenants to deliver the Credit File(s) to Provident upon demand by
Provident, which demand may be made in Provident's sole and absolute discretion.
(d) Borrower shall pay or cause to be paid all taxes, assessments and other
governmental charges imposed upon its properties or assets or in respect of any
of its franchises, business, income or profits before any penalty or interest
accrues thereon, and all claims (including, without limitation, claims for
labor, services, materials and supplies) for sums which have become due and
payable and which by law have or might become due and payable and which by law
have or might become a lien or charge upon any of its properties or assets,
provided that (unless any material item of property would be lost, forfeited or
materially damaged as a result thereof) no such charge or claim need be paid if
the amount, applicability or validity thereof is currently being contested in
good faith and if such reserve or other appropriate provision, if any, as shall
be required by generally accepted accounting principles shall have been made
therefore.
(e) At any time or times during Borrower's usual business hours, Borrower
shall permit Provident (by any of its officers, employees or agents) to enter
upon Borrower's business premises for any of the following reasons: (i) to
inspect the Collateral and any books or records related thereto (including
making copies of and extracts therefrom), (ii) to verify the amount, quality,
quantity, value or condition of, or any other matter relating to, the
Collateral, (iii) to examine all of the other books and records of Borrower
(including making copies of and extracts therefrom), including those relating to
its tax records, payroll records and insurance records, and (iv) to discuss the
business, financial condition or results of operations with any of Borrower's
officers, employees, agents or accountants. Borrower covenants to pay Provident
a reasonable audit fee and reimburse Provident for its out-of-pocket expenses
for all inspections, audits and examinations conducted by Provident other than
regular monthly audits.
(f) Borrower covenants to comply with all federal, state and local laws,
rules, regulations and orders applicable to it and its business.
(g) Borrower agrees to notify Provident in writing within fifteen (15)
calendar days of any proposed Change of Control or any proposed, or completed,
change in the executive management of Borrower, including, but not limited to,
any management change in the office of president, or any change in the
management of Borrower's underwriting department. Borrower further agrees to
notify Provident in writing at least thirty (30) days in advance of any change
in the location of its principal place of business or of any proposed change in
the name of Borrower or the opening or closing of any office.
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(h) Borrower shall not at any time create, assume, incur or permit to
exist, any Lien or other encumbrance in respect of any of the Collateral.
(i) Borrower agrees to give Provident prompt notice of any
development, financial or otherwise, which would materially adversely
affect its business, properties or affairs or the ability of Borrower to
perform its obligations under this Agreement.
8. COVENANTS REGARDING THE MORTGAGE LOANS. Borrower further covenants and
agrees with Provident as follows with respect to each Mortgage Loan to be
financed by Provident hereunder.
(a) As of its Funding Date, the Initial Collateral Package and Credit
File relating to the Mortgage Loan shall contain each of the documents and
instruments specified herein to be included therein.
(b) The related Mortgage shall be a valid and enforceable first or
second Lien of record on the Mortgaged Property subject, in the case of any
second Mortgage Loan, only to a first Lien on such Mortgaged Property and
subject in all cases to the exceptions to title set forth in the title insurance
policy or attorney's opinion of title with respect to the related Mortgage Loan,
which exceptions shall be acceptable to Provident.
(c) Borrower shall hold good, marketable and indefeasible title to, and
be the sole owner and holder of, the Mortgage Loan subject to no Liens or rights
of others.
(d) The Mortgage Loan shall not be subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor shall the
operation of any of the terms of the Mortgage Note or Mortgage, or the exercise
of any right there under, render either the Mortgage Note or the Mortgage
unenforceable in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, and no such
right of rescission, set-off, counterclaim or defense shall have been asserted
with respect thereto.
(e) The Mortgage Loan shall comply with, and shall at all times be
serviced in compliance with, in all material respects, applicable state and
federal laws and regulations, including, without limitation, usury, equal credit
opportunity, consumer credit, truth-in-lending and disclosure laws.
(f) With respect to the Mortgage Loan, either (i) a lender's title
insurance policy, issued in standard American Land Title Association or
California Land Title Association form, or other form acceptable in the
particular jurisdiction, by a title insurance company authorized to transact
business in the state in which the related Mortgaged Property is situated,
together with a condominium endorsement, if applicable, in an amount at least
equal to the original principal balance of such Mortgage Loan insuring the
mortgagee's interest under the related Mortgage Loan as the holder of a valid
first or second mortgage Lien of record on the Mortgaged Property described in
the Mortgage, subject only to the exceptions of the character referred to in
subsection (b) above, shall be valid and in full force and effect on the Funding
Date of the origination of such Mortgage Loan or (ii) an attorney's opinion of
title shall be prepared in connection with the origination of such Mortgage
Loan. Such mortgage title insurance policy or attorney's opinion of title shall
be issued in favor of Borrower and its successors and assigns. Borrower shall,
by act or omission, not have done anything that would impair the coverage of
such mortgage title insurance policy or attorney's opinion of title.
(g) The Mortgage Note and the related Mortgage shall have been duly and
properly executed, constitute the legal, valid and binding obligation of the
related Mortgagor and shall be enforceable in accordance with their respective
terms, except only as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
considered in a proceeding or action in equity or at law), and all parties to
the Mortgage Loan shall have had full legal capacity to execute all Mortgage
Loan Documents and to convey the estate therein purported to be conveyed.
(h) The terms of the Mortgage Note and the Mortgage shall not have been
or be impaired, altered or modified in any material respect, except by a written
instrument which shall have been recorded or is in the process of being
recorded, if necessary, to protect the interests of Borrower therein. The
original Mortgage shall be recorded, and all subsequent assignments of the
original Mortgage shall be recorded in the appropriate jurisdictions wherein
such recordation is necessary to perfect the Lien thereof as against creditors
of Borrower.
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(i) No instrument of release or waiver shall have been executed in
connection with the Mortgage Loan, and no Mortgagor shall have been released
there from, in whole or in part.
(j) The proceeds of the Mortgage Loan shall have been fully disbursed,
and there shall be no obligation on the part of Borrower to make any future
advances there under. All costs, fees and expenses incurred in making or closing
or recording of the Mortgage Loan shall have been paid in full.
(k) The Mortgage Note shall not be secured by any collateral, pledged
account or other security except the lien of the corresponding Mortgage.
(1) There shall be no obligation on the part of Borrower or any other
Person to make payments in respect of the Mortgage Loan in addition to those to
be made by the Mortgagor.
(m) All parties which have had any interest in the Mortgage Loan,
whether as originator, mortgagee, assignee, pledgee, servicer or otherwise, are
(or, during the period in which they held and disposed of such interest, were)
(1) in compliance with any and all applicable licensing requirements of the laws
of the state wherein the Mortgaged Property is located, and (2)(A) organized
under the laws of such state, or (B) qualified to do business in such state, or
(C) federal savings and loan associations or national banks having principal
offices in such state, or (D) not doing business in such state so as to require
qualification or licensing.
(n) The Mortgage shall contain customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security,
including, (i) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial or non-judicial foreclosure.
(o) To the best of Borrower's knowledge, there shall not exist any
circumstances or conditions with respect to the Mortgage Loan, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that could be
reasonably expected to materially adversely affect the value or marketability of
the Mortgage Loan.
(p) Each of the documents and instruments included in the Credit File
shall have been duly executed and in due and proper form and each such document
or instrument shall be in a form generally acceptable to prudent institutional
mortgage lenders that regularly originate or purchase mortgage loans.
(q) The Borrower shall be in possession of the complete Credit File and
there shall be no custodial agreements in effect adversely affecting the right
or ability of Borrower to make the document deliveries required hereby.
(r) The Mortgage property shall not be damaged by fire, wind or other
cause or loss and there shall not be any condemnation proceedings pending. To
the best knowledge of Borrower, no improvement on any Mortgage property is in
violation of any applicable zoning law or regulation.
(s) All signatures, names and addresses, amounts and other statements
of fact, including descriptions of the property, appearing on the credit
application and other related documents relating to each Mortgage Loan shall be
true and correct and the Mortgagors named thereon will be, as of the date of
each such document upon which signatures appear, of majority age, and will have
the legal capacity to enter into the Mortgage.
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(t) Borrower will have reviewed all of the Mortgage Loan Documents, and
all the related documents thereto, and will make such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein and throughout this Agreement.
(u) Each Mortgage Loan which Borrower warrants is insured by a private
mortgage insurance company shall be so insured.
9. SALES OF MORTGAGE LOANS AND OTHER COLLATERAL. Until Provident shall have
made a Demand for Payment, Borrower shall be entitled to sell the Mortgage Loans
financed hereunder and the other Collateral in the ordinary course of Borrower's
business, but nothing herein shall be deemed to waive or release Provident's
security interest in any Proceeds of any Collateral. Upon the sale of any
Mortgage Loan financed hereunder, Borrower shall pay to Provident on its Closing
Date, the unpaid amount of the Advance with respect to such Mortgage Loan, all
accrued and unpaid interest thereon through and including such Closing Date and
all Fees, charges and other amounts payable hereunder. The sales of Mortgage
Loans to Third Party Investors shall be handled in accordance with the
requirements set forth in the Policies and Procedures. In addition, Borrower
agrees that Provident shall have the right, in its sole discretion, to (i)
impose additional requirements regarding the delivery of Mortgage Loan Documents
to any Third Party Investor; and (ii) return wire transfers received in
connection with the sale of any Mortgage Loan to the originating bank if such
wire transfer does not comply with the Policies and Procedures.
10. REMEDIES.
(a) After a Demand for Payment shall have been made by Provident, all
amounts owed to Provident hereunder shall thereupon be immediately due and
payable and no additional or future Advances will be made by Provident to
Borrower hereunder.
(b) From and after any Demand For Payment, Provident shall, in
addition to its other rights and remedies under applicable law, have the rights
and remedies of a secured party under the Uniform Commercial Code with respect
to the Collateral and all other security pursuant to any other Security
Documents between Provident and Borrower. In addition, Provident or its agents
or representatives may take possession of the Collateral and sell the same. For
such purpose, Provident may enter upon the premises where the Collateral shall
be located and remove the same to such other place as Provident shall determine.
Borrower shall immediately, upon Provident's demand, make the Credit Files
available to Provident at Provident's place of business.
(c) Any such taking of possession by Provident shall not affect
Provident's right, which hereby is confirmed, to retain all payments made prior
thereto by Borrower, and in the event of such taking of possession, Provident
may sell the Collateral at a public or private sale or any other commercially
reasonable manner permitted by law. The proceeds of any such sale or other
disposition shall be applied first to the actual and reasonable costs of such
sale, then to the actual and reasonable costs of retaking possession and storage
of such Collateral and then to the satisfaction of the unpaid balance of the
Advances. In the event the proceeds of any such sale are not sufficient to pay
such expenses and to satisfy all amounts due by acceleration or otherwise with
respect to all Advances made pursuant hereto, Borrower shall pay to Provident
any deficiency existing. Provident will give Borrower reasonable notice of the
time and place of any public sale of the Collateral or of the time after which
any private sales or other intended disposition thereof is to be made. Borrower
agrees that the requirement of reasonable notice shall be met if such notice is
mailed, postage prepaid, to the address of the Borrower listed in Section 1 l(f)
at least 10 days prior to the time of such sale or disposition. Borrower further
agrees and acknowledges that: (i) the Collateral is customarily sold in a
recognized market; (ii) Borrower regularly sells and Provident regularly
purchases mortgage loans similar to the Collateral; and (iii) Provident may be
the purchaser of the Collateral either in a public or private sale.
(d) From and after any Demand For Payment, Borrower shall pay, in addition
to interest on funds actually advanced, all costs incurred by Provident in
enforcing Provident's rights hereunder, including those incurred in bankruptcy
12
proceedings, expenses of locating the Collateral, all costs and expenses
actually incurred by Provident in connection with examination, preservation and
protection of the Collateral, examination of the Borrower's books and records
otherwise in connection with the financing pursuant hereto and reasonable
attorney's fees and legal expenses.
(e) If any payment of interest under Section 3 or principal or interest
under Section 4 is not paid when due whether by demand or otherwise, the unpaid
amount of all Advances and all accrued and unpaid interest thereon as well as
any other charges and other amounts due Provident hereunder or under any Loan
Document shall bear interest, at Provident's option, at the Default Interest
Rate from the date on which such late payment shall have first become due and
payable to Provident. Interest will continue to accrue until the obligations in
respect of the payment are discharged (whether before or after judgment).
(f) The rights and remedies of Provident hereunder shall be cumulative and
shall be in addition to every other right or remedy available to Provident under
applicable law.
11. GENERAL PROVISIONS.
(a) Borrower absolutely and unconditionally agrees to pay to Provident upon
demand by Provident at any time and as often as the occasion therefor may
require, whether or not all or any of the transactions contemplated by any of
the Loan Documents are ultimately consummated (i) all reasonable out-of-pocket
costs and expenses which shall at any time be incurred or sustained by Provident
or any of its directors, officers, employees or agents as a consequence of, on
account of, in relation to or any way in connection with the preparation,
negotiation, execution and delivery of the Loan Documents and the perfection and
continuation of the rights of Provident in connection with the Advances, as well
as the preparation, negotiation, execution, or delivery or in connection with
the amendment or modification of any of the Loan Documents or as a consequence
of, on account of, in relation to or any way in connection with the granting by
Provident of any consents, approvals or waivers under any of the Loan Documents
including, but not limited to, reasonable attorneys' fees and disbursements; and
(ii) all reasonable out-of-pocket costs and expenses which shall be incurred or
sustained by Provident or any of its directors, officers, employees or agents as
a consequence of, on account of, in relation to or any way in connection with
the exercise, protection or enforcement (whether or not suit is instituted) of
any of its rights, remedies, powers or privileges under any of the Loan
Documents or in connection with any litigation, proceeding or dispute in any
respect related to any of the Loan Documents (including, but not limited to, all
of the reasonable fees and disbursements of consultants, legal advisers,
accountants, experts and agents for Provident, the reasonable travel and living
expenses away from home of employees, consultants, experts or agents of
Provident, and the reasonable fees of agents, consultants and experts not in the
full-time employ of Provident for services rendered on behalf of Provident).
(b) Borrower shall absolutely and unconditionally indemnify and hold
harmless Provident against any and all claims, demands, suits, actions, causes
of action, damages, losses, settlement payments, obligations, costs, expenses
(including, but not limited to, attorney's fees and other legal costs and
expenses) and all other liabilities whatsoever ("Losses") which shall at any
time or times be incurred or sustained by Provident or by any of its
shareholders, directors, officers, employees, subsidiaries, Affiliates or agents
on account of, or in relation to, or in any way in connection with, any of the
arrangements or transactions contemplated by, associated with or ancillary to
this Agreement or any of the other Loan Documents, whether or not all or any of
the transactions contemplated by, associated with or ancillary to this Agreement
or any of such Loan Documents are ultimately consummated, including, but not
limited to, Losses arising from or in connection with, or related to, any of the
Mortgage Loans financed hereunder, whether arising from the underwriting,
processing, origination, closing, funding, purchase, servicing or sale of any
such Mortgage Loans.
(c) No amendment, supplement, modification, termination, waiver, consent to
departure or alteration of the terms hereof or any of the other Loan Documents
shall be binding or effective unless the same is in writing, dated subsequent to
the date hereof, and duly executed by Borrower and Provident, and then such
amendment, modification or waiver shall be effective only in the specific
instance and for the specific purpose for which given.
13
(d) All agreements, representations, obligations and warranties made herein
shall survive the execution and delivery of this Agreement, the making of any
Advance hereunder, the execution and delivery of any of the other Loan Documents
and payment in full of the Advances.
(e) This Agreement (including the Exhibits and Schedules hereto) and the
other Loan Documents (including the Security Documents) and any documents,
certificates and instruments referred to herein or delivered by the parties in
connection herewith constitute the entire agreement between the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and verbal, between the parties with respect to the
subject matter of this Agreement and are not intended to confer upon any Person
other than the parties any rights or remedies.
(f) All notices and other communications pursuant to this Agreement and
under any of the other Loan Documents shall be in writing, either delivered in
hand or sent by first-class mail, registered or certified, return receipt
requested, or sent by telecopier or facsimile transmission, addressed as
follows:
If to Borrower, at:
EliteAgents, Inc
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx, Executive Vice President
Fax Number: (000) 000-0000
If to Provident, at:
The Provident Bank
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxxxx X. Xxxxx, Vice President
Mail Stop: 265D
Fax Number: (000) 000-0000
or, as to each party, at such other address as shall be designated by
such party in a written notice to the other party complying as to
delivery with the terms of this Section 11. Any notice or other
communication pursuant to this Agreement or any other Loan Document
shall be deemed to have been duly given or made and to have become
effective when delivered in hand to the party to which it is directed,
or, if sent by first-class mail or by telecopier or facsimile
transmission, and properly addressed (i) when received by the
addressee; or (ii) if sent by first class mail, on the third (3rd)
Business Day following the day of the mailing thereof (unless actually
received earlier).
(g) No delay or failure of Provident in exercising any right, power, remedy
or privilege hereunder or under any of the other Loan Documents on any occasion
shall affect such right, power, remedy or privilege or be construed as a waiver
or any requirement of this Agreement; nor shall any single or partial exercise
thereof or ally abandonment or discontinuance of steps to enforce such a right,
power or privilege be prejudicial to any subsequent exercise of such right,
power or privilege. Provident's acceptance or approval of any request, payment,
document or instrument pertaining to any Advance made pursuant hereto shall not
constitute any representation or warranty, express or implied, by Provident as
to the validity or sufficiency of any such request, payment, document or
instrument. The rights and remedies of Provident hereunder are cumulative and
not exclusive. All remedies herein provided shall be in addition to and not in
substitution for any remedies otherwise available to Provident. Any waiver,
permit, consent or condition hereof, must be in writing and shall be effective
only to the extent set forth in such writing.
14
(h) This Agreement shall be binding upon and inure to the benefit of
Borrower and Provident and their respective successors and assigns, except that
Borrower may not assign or transfer any of its rights or obligations hereunder
to any Person or Persons without the express prior written consent of Provident.
If more than one Borrower shall sign this Agreement, the liability of each
hereunder shall be joint and several.
(i) This Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio.
(j) It is hereby stipulated and agreed that TIME IS OF THE ESSENCE hereon
and shall be of the essence as to each of the other Loan Documents.
(k) Any provision contained in any document which 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 of such document or affecting the validity or
enforceability of such provision in any other jurisdiction.
(1) This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed and
deliver shall be deemed to be an original and all of which taken together shall
constitute but one and the same Agreement.
12. WAIVER OF JURY TRIAL; JURISDICTION AND VENUE.
(a) AS A SPECIFICALLY BARGAINED INDUCEMENT FOR PROVIDENT TO
EXTEND CREDIT TO BORROWER, AND AFTER HAVING THE OPPORTUNITY
TO CONSULT COUNSEL, BORROWER AND, IF MORE THAN ONE, EACH OF
THEM HEREBY EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN
ANY LAWSUIT OR PROCEEDING RELATING TO THIS AGREEMENT OR
ARISING IN ANY WAY FROM ITS OBLIGATIONS HEREUNDER.
(b) BORROWER AND, IF MORE THAN ONE, EACH OF THEM HEREBY
DESIGNATES ALL COURTS OF RECORD SITTING IN XXXXXXXX COUNTY,
OHIO AND HAVING JURISDICTION OVER THE SUBJECT MATTER, STATE
AND FEDERAL, AS FORUMS WHERE ANY ACTION, SUIT OR PROCEEDING
IN RESPECT OF OR ARISING FROM OR OUT OF THIS AGREEMENT, ITS
MAKING, VALIDITY, PERFORMANCE, INTERPRETATION OR ENFORCEMENT
MAY BE LITIGATED AS TO ALL PARTIES, THEIR SUCCESSORS AND
ASSIGNS, AND BY THE FOREGOING DESIGNATION BORROWER AND, IF
MORE THAN ONE, EACH OF THEM HEREBY CONSENTS TO THE
JURISDICTION AND VENUE OF SUCH COURTS. BORROWER WAIVES ANY
AND ALL RIGHTS UNDER THE LAWS OF ANY OTHER STATE TO OBJECT
TO JURISDICTION WITHIN THE STATE OF OHIO FOR THE PURPOSES OF
LITIGATION TO ENFORCE THE OBLIGATIONS UNDER THIS AGREEMENT.
14
IN WITNESS WHEREOF, the undersigned have caused this Warehouse Loan and
Security Agreement to be signed by their duly authorized signatories on and as
of the date first above written.
ELITEAGENTS, INC.
BY: /s/
-----------------------------
Xxxxx X. Xxxxx
Executive Vice President
THE PROVIDENT BANK
BY: /s/
-----------------------------
