CREDIT AND SECURITY AGREEMENT
(SYNDICATED AGREEMENT)
BETWEEN
THE WMF GROUP, LTD,
a Delaware corporation
WMF WASHINGTON MORTGAGE CORP.,
a Delaware corporation
WMF/XXXXXXX, XXXXX ASSOCIATES LIMITED,
a Delaware corporation
WMF XXXXXXX LTD.,
a Michigan corporation
THE XXXXXX X.XXXXXX COMPANY,
a Texas corporation
THE XXXXXX X. XXXXXX COMPANY-ARIZONA,
an Arizona corporation
WMF CARBON MESA ADVISORS, INC.,
a Delaware corporation
AND
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
AND
CERTAIN OTHER LENDERS PARTY THERETO
Dated as of February 10, 1999
TABLE OF CONTENTS
PAGE
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1. DEFINITIONS 1
1.1 Defined Terms 1
1.2 Other Definitional Provisions 25
2. THE CREDIT 25
2.1 The Warehousing Credit Limit 25
2.2 Swingline Commitment. 29
2.3 Procedures for Obtaining Warehousing Advances 29
2.4 The Servicing Facility Commitment 32
2.5 Procedures for Obtaining Servicing Facility Advances 33
2.6 The Term Loan Commitment 35
2.7 Funding of Advances; Non-Receipt of Funds by the Credit Agent 35
2.8 Notes 36
2.9 Interest Payments 37
2.10 Principal Payments 39
2.11 Expiration of Commitments 44
2.12 Fees 44
2.13 Miscellaneous Charges 47
2.14 Illegality 47
2.15 Interest Limitation 48
2.16 Billing and Payment 48
3. COLLATERAL. 49
3.1 Appointment of Collateral Agent 49
3.2 Delivery of Collateral 49
3.3 Grant of Security Interest 49
3.4 Release of Security Interest in Collateral 52
3.5 Delivery of Additional Collateral or Mandatory Prepayment 55
3.6 Release of Collateral 55
3.7 Collection and Servicing Rights 56
3.8 Collection of Receivables 56
3.9 Return of Collateral at Maturity 57
4. CONDITIONS PRECEDENT 57
4.1 Initial Advances 57
4.2 Each Advance 60
4.3 New Subsidiary Borrowers 61
4.4 New Xxxxxx Xxx Special Program Agreements 63
5. REPRESENTATIONS 64
5.1 Organization; Good Standing; Subsidiaries 64
5.2 Authorization and Enforceability 64
5.3 Approvals 65
5.4 Financial Condition 65
5.5 Litigation 66
5.6 Compliance with Laws 66
5.7 Regulation U 66
5.8 Investment Company Act 66
5.9 Payment of Taxes 66
5.10 Agreements 67
5.11 Title to Properties 67
5.12 ERISA 67
5.13 Eligibility 68
5.14 Place of Business 68
5.15 Special Representations Concerning Warehousing Collateral 68
5.16 Servicing 71
5.17 Special Representations Concerning Servicing Collateral 72
5.18 No Adverse Selection 73
5.19 Year 2000 Compliance 73
6. AFFIRMATIVE COVENANTS 73
6.1 Payment of Notes 73
6.2 Financial Statements and Other Reports 74
6.3 Maintenance of Existence; Conduct of Business 76
6.4 Compliance with Applicable Laws 77
6.5 Inspection of Properties and Books 77
6.6 Notice 77
6.7 Payment of Debt, Taxes, etc 78
6.8 Insurance 79
6.9 Closing Instructions 79
6.10 Subordination of Certain Indebtedness 79
6.11 Other Loan Obligations 79
6.12 Use of Proceeds of Advances 80
6.13 Special Affirmative Covenants Concerning Collateral 80
6.14 Repayment of Debt to PNC Bank, N.A. 82
7. NEGATIVE COVENANTS 82
7.1 Contingent Liabilities 82
7.2 Sale or Pledge of Servicing Contracts 82
7.3 Merger; Sale of Assets; Acquisitions 83
7.4 Defferal of Subordinated Debt 83
7.5 Loss of Eligibility 83
7.6 Debt to Adjusted Tangible Net Worth Ratio 83
7.7 Non-Warehouse Debt to Adjusted Tangible Net Worth 83
7.8 Minimum Adjusted Tangible Net Worth 84
7.9 Liquidity 84
7.10 Maximum Pass-Throughs 84
7.11 Minimum Nonrecourse Servicing Portfolio 84
7.12 Debt Service Coverage Ratio 84
7.13 Minimum Income 84
7.14 Debt Limitation 84
7.15 Acquisition of Recourse Servicing Contracts 85
7.16 Transactions with Affiliates 85
7.17 Gestation Facilities 85
7.18 Restricted Payments 85
7.19 Special Negative Covenants Concerning Collateral 85
8. DEFAULTS; REMEDIES 86
8.1 Events of Default. 86
8.2 Remedies. 90
8.3 Application of Proceeds. 95
8.4 Credit Agent Appointed Attorney-in-Fact 97
8.5 Right of Setoff 98
8.6 Sharing of Payments 98
9. THE CREDIT AGENT. 99
9.1 Appointment. 99
9.2 Duties of Credit Agent. 99
9.3 Standard of Care. 99
9.4 Delegation of Duties 100
9.5 Exculpatory Provisions 100
9.6 Reliance by Credit Agent 100
9.7 Non-Reliance on Credit Agent or Other Lenders 101
9.8 Credit Agent in Individual Capacity 102
9.9 Successor Credit Agent. 102
9.10 Agreements Regarding Servicing Collateral and Acknowledgment
Agreements 102
10. NOTICES 103
11. REIMBURSEMENT OF EXPENSES; INDEMNITY 103
11.1 Reimbursement of Expenses and Indemnification by the Borrowers. 103
11.2 Indemnification by the Lenders. 104
12. FINANCIAL INFORMATION 105
13. MISCELLANEOUS 105
13.1 Terms Binding Upon Successors; Survival of Representations 105
13.2 Lenders in Individual Capacity 105
13.3 Participation and Assignments 106
13.4 Commitment Increases 107
13.5 Amendments 109
13.6 Operational Reviews 110
13.7 Governing Law 110
13.8 Relationship of the Parties 111
13.9 Severability 111
13.10 Counterparts 111
13.11 Consent to Credit References 111
13.12 Consent to Jurisdiction 112
13.13 Counterparts 112
13.14 Confidentiality of Information 112
13.15 WAIVER OF JURY TRIAL 113
13.16 Entire Agreement 113
EXHIBITS
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Exhibit A-1 Form of Warehousing Promissory Note
Exhibit A-2 Form of Sublimit Note
Exhibit A-3 Form of Swingline Promissory Note
Exhibit A-4 Form of Servicing Facility Promissory Note
Exhibit A-5 Form of Term Loan Promissory Note
Exhibit B (Intentionally Omitted)
Exhibit C-MF Request for Advance Against
Mortgage Loans
Exhibit C-P&I P&I and Liquidity Advance Request
Exhibit C-SER Servicing Facility Advance Request
Exhibit D-MF/CONV/DUS Procedures and Documentation for Warehousing
Conventional Multifamily, Health Care,
Commercial and Xxxxxx Mae DUS Mortgage Loans
Exhibit D-MF/FHA Procedures and Documentation for Warehousing
FHA Project Mortgage Loans and FHA
Construction Mortgage Loans
Exhibit D-MF/SFNMA Procedures and Documentation for Warehousing
Special Xxxxxx Xxx Loans
Exhibit E Schedule of Servicing Contracts
Exhibit F Subordination of Debt Agreement
Exhibit G Subsidiaries
Exhibit H Legal Opinion
Exhibit I-MF Officer's Certificate
Exhibit J Schedule of Other Credit Agreements
Exhibit K Funding Bank Agreement
Exhibit L Collateral Agency Agreement
Exhibit M Advance Certificate
Exhibit N Terms Applicable to Guaranteed Obligations
Exhibit O Borrower Addition Agreement
Exhibit P Schedule of Subsidiary Borrowers
Exhibit Q Schedule of Special Xxxxxx Mae Program
Agreements
Exhibit R Schedule of Borrowers' Agency Approvals
Exhibit S FHA Construction Loan to be Refinanced
Exhibit T Litigation
THIS CREDIT AND SECURITY AGREEMENT, dated as of February 10, 1999 by and
among THE WMF GROUP, LTD., a Delaware corporation ("WMF Group"), WMF WASHINGTON
MORTGAGE CORP., a Delaware corporation ("Washington"), WMF/XXXXXXX, XXXXX
ASSOCIATES LIMITED, a Delaware corporation ("Xxxxxxx"), WMF XXXXXXX, LTD., a
Michigan corporation ("Xxxxxxx"), THE XXXXXX X. XXXXXX COMPANY, a Texas
corporation ("Xxxxxx"), THE XXXXXX X. XXXXXX COMPANY-ARIZONA, an Arizona
corporation ("Xxxxxx-Arizona"), and WMF CARBON MESA ADVISORS, INC., a Delaware
corporation ("Carbon Mesa"; WMF Group, Washington, Huntoon, Proctor, Wilson,
Xxxxxx-Arizona and Carbon Mesa are hereinafter collectively referred to as the
"Borrowers"), having their principal office at 0000 Xxxxxx Xxxx Xxxx, Xxxxx 000,
Xxxxxx, XX 00000 and RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
("RFC"), BANK UNITED, a federal savings bank ("Bank United") and LASALLE
NATIONAL BANK, a national banking association ("LaSalle"; RFC, Bank United,
LaSalle and any Additional Lender that may at any time hereafter become party
hereto are hereafter referred to individually as a "Lender" and collectively as
the "Lenders"), and RFC as credit agent for the Lenders (in such capacity, the
"Credit Agent").
WHEREAS, the Borrowers and the Lenders desire to set forth herein the terms
and conditions upon which the Lenders shall provide financing to the Borrowers;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINITIONS.
1.1 Defined Terms. Capitalized terms defined below or elsewhere in
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this Agreement (including the Exhibits hereto) shall have the following
meanings:
"Acknowledgment Agreement" has the meaning set forth in Section 8.2(j)
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hereof.
"Additional Lender" means a Person admitted as a Lender under the
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Agreement by an amendment hereto.
"Adjusted Servicing Portfolio" means, for any Person, the Servicing
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Portfolio of such Person, but excluding the principal balance of Mortgage
Loans included in the Servicing Portfolio at such date, (a) which are past
due for principal or interest for sixty (60) days or more, (b) which are
Xxxxxx Xxx DUS Mortgage Loans or FHA co-insured Mortgage Loans, (c) which
are serviced pursuant to Servicing Contracts that may be terminated without
cause, (d) with respect to which such Person is obligated to repurchase or
indemnify the holder of the Mortgage Loans as a result of defaults on the
Mortgage Loans at any time during the term
of such Mortgage Loans, (e) for which the Servicing Contracts are not owned
by such Person free and clear of all Liens (other than in favor of the
Lenders), or (f) which are serviced by the Borrowers for others under
subservicing arrangements.
"Adjusted Tangible Net Worth" means with respect to any Person at any
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date, the Tangible Net Worth of such Person at such date, excluding
capitalized excess servicing fees and capitalized servicing rights, plus 1%
----
of the Adjusted Servicing Portfolio, and plus deferred taxes arising from
----
capitalized excess servicing fees and capitalized servicing rights.
"Advance" means a disbursement by the Lenders under the Commitments
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pursuant to Article 2 of this Agreement.
"Advance Certificate" has the meaning set forth in Section 2.2 hereof.
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"Advance Request" means a Servicing Facility Advance Request or a
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Warehousing Advance Request.
"Affiliate" has the meaning set forth in Rule 12b-2 of the General
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Rules and Regulations under the Exchange Act.
"Agency Security" means a Mortgage-backed Security issued or
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guaranteed by Xxxxxx Mae, Xxxxxxx Mac or Xxxxxx Mae.
"Agreement" means this Credit and Security Agreement (Syndicated
---------
Agreement), either as originally executed or as it may from time to time be
supplemented, modified or amended.
"Annual Debt Payments" means, as of the last day of any fiscal quarter
--------------------
of WMF Group and its Subsidiaries, the sum of (a) the aggregate amount of
scheduled principal payments required under this Agreement on the Term Loan
Advances in the 4 fiscal quarters following such date, (b) the aggregate
amount of scheduled principal payments on other Debt of WMF Group (and its
Subsidiaries, on a consolidated basis) in the 4 fiscal quarters following
such date, and (c) the amount of interest expense deducted in calculating
net income for the 4 fiscal quarters ending on such date incurred on Debt
of WMF Group (and its Subsidiaries, on a consolidated basis), other than
(i) the Warehousing Advances and (ii) other Debt secured by Multifamily
Mortgage Loans, Commercial Mortgage Loans and/or Mortgage-backed Securities
covered by Purchase Commitments issued by Investors, to the extent such
Debt
does not exceed the Committed Purchase Price of such Mortgage Loans.
"Appraisal" means a certificate of independent certified public
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accountants or independent financial consultants selected by the Borrowers
and reasonably satisfactory to the Credit Agent as to the Appraisal Value
of all of the Pledged Servicing Contracts or the Nonrecourse Servicing
Contracts acquired in any Servicing Acquisition, which shall evaluate such
Servicing Contracts based upon reasonably determined categories of the
Mortgage Loans contained therein and give effect to any subservicing
agreement to which any such Mortgage Loan is or will be subject, which
certificate shall be in form, substance and detail reasonably satisfactory
to the Credit Agent.
"Appraisal Value" means, at any date of determination, with respect to
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all of the Pledged Servicing Contracts or the Nonrecourse Servicing
Contracts acquired in any Servicing Acquisition, the fair market value of
the Borrowers' right to service Mortgage Loans pursuant to such Servicing
Contracts, calculated as a percentage of the unpaid principal amount of
each Mortgage Loan serviced pursuant thereto, as set forth in the most
recent Appraisal.
"Approved Custodian" means a pool custodian or other Person which is
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deemed acceptable to the Credit Agent from time to time in its sole
discretion to hold a Mortgage Loan for inclusion in a Mortgage Pool or to
hold a Mortgage Loan as agent for an Investor who has issued a Purchase
Commitment for such Mortgage Loan.
"Balance Deficiency Fee" has the meaning set forth in Section 2.9(f)
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hereof.
"Balance Funded Agreement" has the meaning set forth in Section 2.9(f)
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hereof.
"Balance Funded Portion" has the meaning set forth in Section 2.9(f)
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hereof.
"Balance Funded Rate" means, with respect to any Advance, the rate
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provided for in the applicable Balance Funded Agreement.
"Borrower Addition Agreement" means an agreement in the form of
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Exhibit O attached hereto, pursuant to which a wholly-owned Subsidiary of
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WMF Group becomes a Borrower hereunder.
"Borrowers" means WMF Group, Washington, Huntoon, Proctor, Wilson,
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Xxxxxx-Arizona, Carbon Mesa and any wholly-owned Subsidiaries of WMF Group
listed on Exhibit P hereto.
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"Business Day" means any day excluding Saturday or Sunday and
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excluding any day on which national banking associations are closed for
business.
"Calendar Quarter" shall mean the 3 month period beginning on any
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January 1, April 1, July 1 or October 1.
"Cash Collateral Account" means a demand deposit account maintained at
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the Funding Bank in the name of the Credit Agent for the benefit of the
Lenders, and designated for receipt of the proceeds of the sale or other
disposition of the Collateral.
"Closing Date" means February 11, 1999.
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"Collateral" means any property or assets in which the Credit Agent is
----------
granted a Lien to secure the Obligations, including the property and assets
of the Borrowers described in Section 3.3 hereof.
"Collateral Agency Agreement" means the agreement dated as of the date
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hereof between the Borrowers, the Credit Agent, and the Collateral Agent
substantially in the form of Exhibit L hereto, as the same may be amended
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or modified from time to time.
"Collateral Agent" means RFC, in its capacity as collateral agent for
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the Credit Agent under the Collateral Agency Agreement.
"Collateral Documents" has the meaning set forth in Section 2.3(a)
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hereof.
"Collateral Value" means (a) with respect to any Mortgage Loan as of
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the date of determination, the lesser of (i) the amount of any Advance made
against such Mortgage Loan under Section 2.1(c) hereof or (ii) the Fair
Market Value of such Mortgage Loan; (b) in the event Pledged Mortgages have
been exchanged for Agency Securities, the lesser of (i) the amount of any
Advances outstanding against the Mortgage Loans backing such Agency
Securities or (ii) the Fair Market Value of such Agency Securities; and (c)
with respect to cash, the amount of such cash.
"COMIT" means Commercial Mortgage Investment Trust, Inc., a Virginia
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corporation and an Affiliate of the Borrowers.
"Commercial Advance" means an Advance made against a Commercial
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Mortgage Loan.
"Commercial Mortgage Loan" means a Mortgage Loan secured by a Mortgage
------------------------
on a Commercial Property.
"Commercial Property" means improved commercial real property that is
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an income-producing property but is not a Multifamily Property or a Health
Care Facility.
"Commitment Fee" means the Warehousing Commitment Fee, the Term Loan
--------------
Commitment Fee, or the Servicing Facility Commitment Fee.
"Commitments" means, collectively, the Servicing Facility Commitments,
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the Term Loan Commitments and the Warehousing Commitments.
"Committed Purchase Price" means for a Mortgage Loan the product of
------------------------
the Mortgage Note Amount multiplied by (a) the price (expressed as a
percentage) as set forth in a Purchase Commitment for such Mortgage Loan or
(b) in the event such Mortgage Loan is to be used to back an Agency
Security, the price (expressed as a percentage) as set forth in a Purchase
Commitment for such Agency Security.
"Conventional Mortgage Loan" means a Multifamily Mortgage Loan or a
--------------------------
Health Care Mortgage Loan other than a Xxxxxx Xxx DUS Mortgage Loan, an FHA
Project Mortgage Loan, or an FHA Construction Mortgage Loan.
"Credit Agent" means RFC, in its capacity as credit agent for the
------------
Lenders hereunder, and any successor pursuant to Section 9.9 hereof.
"Debt" means, with respect to any Person, at any date (a) all
----
indebtedness or other obligations of such Person which, in accordance with
GAAP, would be included in determining total liabilities as shown on the
liabilities side of a balance sheet of such Person at such date; and (b)
all indebtedness or other obligations of such Person for borrowed money or
for the deferred purchase price of property or services; provided that for
purposes of this Agreement, there shall be excluded from Debt at any date
Xxxxxx Mae Loan Loss Reserves (to the extent included as a liability on
such Person's balance sheet), Subordinated Debt not due within one year of
such date, deferred taxes arising from capitalized excess servicing fees
and capitalized servicing rights and the deferred portion of any purchase
price payable with respect to a Servicing Acquisition to the extent payment
of said deferred portion by the Borrower is contingent upon the generation
of minimum levels of income to the Borrower by the seller.
"Debt Service Coverage Ratio" means, as of the last day of any fiscal
---------------------------
quarter of WMF Group and its Subsidiaries, the ratio of Funds From
Operations to Annual Debt Payments.
"Default" means the occurrence of any event or existence of any
-------
condition which, but for the giving of Notice, the lapse of time, or both,
would constitute an Event of Default.
"Default Rate" has the meaning set forth in Section 2.9(g) hereof.
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"Designated Bank" means any bank(s) designated from time to time by
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any Lender to receive Eligible Balances for the benefit of such Lender for
the purposes of Section 2.9(f) hereof.
"DUS Program" means Xxxxxx Mae's Delegated Underwriting and Servicing
-----------
Program.
"Eligible Balances" means funds of or maintained by the Borrowers and
-----------------
their Subsidiaries in accounts at a Lender or a Designated Bank, less
balances to support float, reserve requirements, and such other reductions
as may be imposed by governmental authorities or agreed between the
Borrowers and such Lender from time to time.
"Eligible Commercial Mortgage Loan" means a Commercial Mortgage Loan
---------------------------------
which, unless otherwise agreed by the Credit Agent in sole and absolute
discretion, satisfies each of the following conditions:
(a) it is a First Mortgage Loan;
(b) it is a Mortgage Loan as to which:
(1) the Mortgage Note is payable or endorsed to the order
of a Borrower;
(2) each of the Mortgage Note and Mortgage is a legal,
valid and binding obligation of the Borrower;
(3) the Mortgage Note is an "instrument" within the meaning
of Section 9-105 of the Uniform
Commercial Code of all applicable jurisdictions; and
(4) the Mortgage Note is denominated and payable only in
United States dollars;
(c) a Borrower owns such Mortgage Loan free and clear of any
Lien (other than the Lien created hereunder);
(d) neither such Mortgage Loan nor the related Collateral
Documents contravene in any material respect any law, rule or
regulation applicable thereto (including, without limitation, all
laws, rules and regulations relating to usury) if any such
contravention would impair the collectibility of such Mortgage Loan,
and no party to the related Collateral Documents is in violation of
any such law, rule or regulation (or procedures prescribed thereby) in
any material respect if such violation would impair the collectibility
of such Mortgage Loan or the performance by the Borrower or any
obligor of its obligations with respect thereto;
(e) the Mortgage Loan is not subject to any rights of setoff,
counterclaim or defense in favor of the Mortgage Borrower or any other
obligor thereon;
(f) such Mortgage Loan complies with all representations and
warranties set forth herein with respect thereto;
(g) such Mortgage Loan has been underwritten in accordance with
the Underwriting Guidelines;
(h) the principal amount of such Mortgage Loan does not exceed
Thirty Million Dollars ($30,000,000);
(i) the LTV of such Mortgage Loan does not exceed eighty percent
(80%);
(j) the projected Property Debt Service Coverage Ratio of the
related Mortgaged Property for the 12-month period beginning on the
anticipated closing date thereof shall be not less than 1.20 to 1.00;
(k) such Mortgage Loan is not a graduated payment Mortgage Loan,
does not have a shared appreciation or other contingent interest
feature, and provides for
periodic payments of all accrued interest thereon on at least a
monthly basis;
(l) such Mortgage Loan has a final maturity of not more than 20
years and provides for monthly payments of principal and interest
sufficient to repay the original principal amount of such Mortgage
Loan over a period of 30 years (subject to adjustment in accordance
with industry standards in the case of an adjustable rate Mortgage
Loan);
(m) the Commercial Property securing such Mortgage Loan is not a
marina, golf course, automobile dealership, funeral home or other type
of property specific to a particular business;
(n) if either (i) the principal amount of such Mortgage Loan
exceeds $25,000,000 or (ii) the owners or sponsors of the Mortgage
Borrower, or any Person owned or controlled by any of them, have
previously been debtors under the United States Bankruptcy Code or
defaulted on Debt, the Mortgage Borrower is a Single Purpose Entity;
and
(o) neither the Borrowers nor any of their Affiliates has any
ownership interest, right to acquire any ownership interest, or
equivalent economic interest in such Commercial Property or the
Mortgage Borrower.
"Eligible Mortgage Pool" means a Mortgage Pool for which (a) an
----------------------
Approved Custodian has issued its initial certification (on the basis of
which an Agency Security is to be issued), (b) there exists a Purchase
Commitment covering such Agency Security, and (c) such Agency Security will
be delivered to the Collateral Agent.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
-----
all rules and regulations promulgated thereunder, as amended from time to
time and any successor statute.
"Event of Default" means any of the conditions or events set forth in
----------------
Section 8.1 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
------------
from time to time, and any successor statute.
"Existing Agreement Servicing Advances" means all "Advances" other
-------------------------------------
than "Warehousing Advances" outstanding under the Existing Credit
Agreement.
"Existing Agreement Warehousing Advances" means all "Warehousing
---------------------------------------
Advances" outstanding under the Existing Credit Agreement.
"Existing Credit Agreement" means the Credit and Security Agreement
-------------------------
(Syndicated Agreement) dated as of December 5, 1997, as amended, between
WMF Group, Washington, Huntoon, Proctor, Wilson, Xxxxxx-Arizona and Carbon
Mesa, as borrowers, Residential Funding Corporation, Bank United and PNC
Bank, N.A., as lenders, and Residential Funding Corporation as credit agent
for the lenders.
"Fair Market Value" means at any time for a Mortgage Loan or the
-----------------
related Agency Security (if such Mortgage Loan is to be used to back an
Agency Security), (a) if such Mortgage Loan or the related Agency Security
is covered by a Purchase Commitment, the Committed Purchase Price, or (b)
otherwise, the market price for such Mortgage Loan or Agency Security,
determined by the Lender based on market data for similar Mortgage Loans or
Agency Securities and such other criteria as the Lender deems appropriate.
"Xxxxxx Mae" means Xxxxxx Xxx, a corporation created under the laws of
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the United States, and any successor thereto.
"Xxxxxx Mae DUS Mortgage Loan" means a Multifamily Mortgage Loan under
----------------------------
Xxxxxx Mae's DUS Program.
"Xxxxxx Mae Loan Loss Reserves" means reserves established by the
-----------------------------
Borrowers to absorb estimated future losses related to Xxxxxx Xxx DUS
Mortgage Loans sold by the Borrowers to Xxxxxx Mae.
"FHA" means the Federal Housing Administration and any successor
---
thereto.
"FHA Construction Mortgage Loan" means an FHA fully-insured Mortgage
------------------------------
Loan for the construction or substantial rehabilitation of a Multifamily
Property or a Health Care Facility.
"FHA Project Mortgage Loan" means an FHA fully insured Multifamily
-------------------------
Mortgage Loan or an FHA fully insured Health Care Mortgage Loan.
"Xxxxxxx Mac" means the Federal Home Loan Mortgage Corporation and any
-----------
successor thereto.
"FICA" means the Federal Insurance Contributions Act.
----
"FIRREA" means the Financial Institutions Reform, Recovery and
------
Enforcement Act of 1989, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"First Mortgage" means a Mortgage which constitutes a first Lien on
--------------
the property covered thereby.
"First Mortgage Loan" means a Mortgage Loan secured by a First
-------------------
Mortgage.
"Xxxxxxx Mac" means Xxxxxxx Mac, a corporation created under the laws
-----------
of the United States, and any successor thereto.
"Funding Bank" means The First National Bank of Chicago or any other
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bank designated from time to time by the Credit Agent.
"Funding Bank Agreement" means the letter agreement substantially in
----------------------
the form of Exhibit K-1 hereto, or the letter agreement substantially in
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the form of Exhibit K-2 hereto.
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"Funds From Operations" means, as of the last day of any fiscal
---------------------
quarter of WMF Group and its Subsidiaries, the sum of (a) the net income of
WMF Group (and its Subsidiaries on a consolidated basis) for the 4 fiscal
quarters ending on such date, plus (b) the amount of income tax expense
----
deducted in calculating such net income, minus (c) the amount of income
-----
taxes actually paid by WMF Group and its Subsidiaries during such 4 fiscal
quarters, plus (d) depreciation, amortization and other non-cash items
----
deducted in calculating such net income, minus (e) non-cash revenue
-----
included in calculating such net income, minus (f) the amount of dividends
-----
paid and other distributions made on the capital stock of WMF Group during
such 4 fiscal quarters, plus (g) the amount of interest expense deducted in
----
calculating net income for the 4 fiscal quarters ending on such date
incurred on Debt of WMF Group (and its Subsidiaries, on a consolidated
basis), other than (i) the Warehousing Advances, and (ii) other Debt
secured by Multifamily Mortgage Loans, Commercial Mortgage Loans and/or
Mortgage-backed Securities covered by Purchase Commitments
issued by Investors, to the extent such Debt does not exceed the Committed
Purchase Price of such Mortgage Loans.
"GAAP" means generally accepted accounting principles set forth in the
----
opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession, which are applicable to the circumstances as
of the date of determination.
"Gestation Agreement" means an agreement under which the Borrowers
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agree to sell or finance (a) a Pledged Mortgage prior to the date of
purchase by an Investor, or (b) a Mortgage Pool prior to the date the
Agency Security is issued.
"Xxxxxx Mae" means the Government National Mortgage Association, an
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agency of the United States government, and any successor thereto.
"Government Servicing Contracts" means Servicing Contracts (a)
------------------------------
pursuant to which the Borrowers service FHA Project Mortgage Loans or FHA
Construction Mortgage Loans or (b) between Xxxxxx Xxx or Xxxxxx Xxx and any
of the Borrowers.
"Health Care Facility" means a retirement service center, a board and
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care facility, an intermediate care facility, a nursing home or a hospital.
"Health Care Mortgage Loan" means a Mortgage Loan secured by a
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Mortgage on a Health Care Facility.
"Hedging Arrangements" means, with respect to any Person, any
--------------------
agreements or other arrangement (including, without limitation, interest
rate swap agreements, interest rate cap agreements and forward sale
agreements) entered into by such Person to protect itself against changes
in interest rates or the market value of assets.
"HUD" means the Department of Housing and Urban Development and any
---
successor thereto.
"HUD 241 Program" means federal loan insurance to finance
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improvements, additions and equipment to multifamily rental housing and
healthcare facilities pursuant to Section 241 of the National Housing Act,
12 U.S.C. (S)1715z-6.
"HUD 241 Mortgage Loans" means Mortgage Loans that are insured by HUD
----------------------
under the HUD 241 Program and committed for purchase by an Investor
pursuant to a Purchase Commitment.
"Indemnified Liabilities" has the meaning set forth in Article 11
-----------------------
hereof.
"Internal Revenue Code" means the Internal Revenue Code of 1986, or
---------------------
any subsequent federal income tax law or laws, as any of the foregoing have
been or may from time to time be amended.
"Investor" means Xxxxxx Mae, Xxxxxxx Mac or a financially responsible
--------
private institution which is deemed acceptable by the Credit Agent from
time to time in its sole discretion.
"Lender" has the meaning set forth in the first paragraph of this
------
Agreement.
"Letter of Credit" means a letter of credit issued by LaSalle for the
----------------
account of the Borrowers, for the benefit of Xxxxxx Mae with respect to
Xxxxxx Mae's Loan Loss Reserve requirement or for any other corporate
purpose of the Borrowers, except to the extent (a) LaSalle is holding
separate collateral for the Borrowers' reimbursement obligations in respect
thereof, or (b) after giving effect to the issuance of such Letter of
Credit either (i) the Servicing Secured Obligations would exceed sixty-five
percent (65%) of the Servicing Collateral Value or (ii) the sum of the
outstanding principal balance of the Servicing Facility Advances, the
amount available to be drawn under all Letters of Credit and the Letter of
Credit Obligations would exceed the Servicing Facility Credit Limit. No
letter of credit issued by LaSalle shall be a "Letter of Credit" hereunder
unless the Credit Agent receives, within 1 Business Day after such letter
of credit is issued, (A) a copy of such letter of credit, (B) a
confirmation from LaSalle that LaSalle is not holding any separate
collateral therefor, and (C) evidence satisfactory to the Credit Agent that
the requirements of clause (b) above have been satisfied.
"Letter of Credit Obligations" means the obligations of the Borrower
----------------------------
to reimburse LaSalle with respect to draws made under a Letter of Credit.
"LIBOR" means, for each calendar week, the rate of interest per annum
-----
which is equal to the arithmetic mean of the U.S. Dollar London Interbank
Offered Rates for one (1)
month periods of certain U.S. banks as of 11:00 a.m. London time on the
first Business Day of each week on which the London Interbank market is
open, as published by Bridge Information Services on its MoneyCenter
system. LIBOR shall be rounded, if necessary, to the next higher one
sixteenth of one percent (1/16)%. If such U.S. dollar LIBOR rates are not
so offered or published for any period, then during such period LIBOR shall
mean the London Interbank Offered Rate for one (1) month periods published
on the first Business Day of each week on which the London Interbank market
is open, in the Wall Street Journal in its regular column entitled "Money
-----
Rates."
-----
"Lien" means any lien, mortgage, deed of trust, pledge, security
----
interest, charge or 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).
"Liquid Assets" means, with respect to any Person at any date, the
-------------
following unrestricted and unencumbered assets owned by such Person on such
date: cash, funds on deposit in any bank located in the United States,
investment grade commercial paper, money market funds, marketable
securities, the excess, if any, of Mortgage Loans and Agency Securities
held for sale (valued in accordance with GAAP) over the outstanding
aggregate principal amount of notes or other debt instruments against which
such Mortgage Loans or Agency Securities are pledged as Collateral, and
amounts available to be borrowed under the Servicing Facility (after giving
effect to all applicable limitations set forth in Section 2.4(b) hereof)
and other liquidity facilities available to the Borrowers.
"Liquidity Advance" shall mean a Warehousing Advance used by the
-----------------
Borrowers to fund advances required to be made by the Borrowers as master
servicer of Mortgage-backed Securities (i) issued by Xxxxxx Mae or (ii)
backed by Commercial Mortgage Loans, provided such advance results in the
creation of a Receivable pursuant to the applicable Servicing Contract.
"Liquidity Rate" means a floating rate of interest equal to two
--------------
percent (2.00%) per annum over LIBOR. The Liquidity Rate shall be adjusted
on and as of the effective date of each weekly change in LIBOR. The Credit
Agent's determination of the Liquidity Rate as of any date of determination
shall be conclusive and binding, absent manifest error.
"Loan Documents" means this Agreement, the Notes, the Collateral
--------------
Agency Agreement, any agreement of the Borrowers relating to Subordinated
Debt, and each other document, instrument or agreement executed by the
Borrowers or any of their Subsidiaries in connection herewith or therewith,
as any of the same may be amended, restated, renewed or replaced from time
to time.
"Majority Lenders" means at any date the Lenders holding not less than
----------------
66.67% of the sum of the Term Loan Advances, the Servicing Facility Credit
Limit or, if the Servicing Facility Commitments have expired or been
terminated, the Servicing Facility Advances, and the Warehousing Credit
Limit or, if the Warehousing Commitments have expired or been terminated,
the Warehousing Advances. Notwithstanding the foregoing, if there are only
two (2) Lenders holding Commitments or Advances, the term "Majority
Lenders" shall, except for purposes of Sections 8.2(c) and 8.2(d),
including both such Lenders.
"Majority Servicing Facility Lenders" means at any date the Lenders
-----------------------------------
holding not less than 66.67% of the Servicing Facility Credit Limit or, if
the Servicing Facility Commitments have expired or been terminated, the
Servicing Facility Advances.
"Majority Term Loan Lenders" means at any date the Lenders holding not
--------------------------
less than 66.67% of the outstanding principal balance of the Term Loan
Advances.
"Majority Warehousing Lenders" means at any date the Lenders holding
----------------------------
not less than 66.67% of the Warehousing Credit Limit or, if the Warehousing
Commitments have expired or been terminated, the Warehousing Advances.
Notwithstanding the foregoing, if there are only two (2) Lenders holding
Warehousing Commitments or Warehousing Advances, the term "Majority
Warehousing Lenders" shall, except for purposes of Section 3.8, include
both such Lenders.
"Maturity Date" means, for any Advance, the Warehousing Maturity Date,
-------------
the Servicing Facility Maturity Date or the Term Loan Maturity Date, as
applicable.
"Margin Stock" has the meaning assigned to that term in Regulation U
------------
of the Board of Governors of the Federal Reserve System as in effect from
time to time.
"Maximum Servicing Facility Commitment" means, for any Lender at any
-------------------------------------
date, that dollar amount designated as such opposite such Lender's name on
the signature pages hereof,
as the same may be reduced pursuant to Section 2.10(o) hereof or amended
from time to time in accordance with this Agreement.
"Maximum Term Loan Commitment" means, for any Lender at any date, that
----------------------------
dollar amount designated as such opposite such Lender's name on the
signature pages hereof, as the same may be amended from time to time in
accordance with this Agreement.
"Maximum Warehousing Commitment" means, for any Lender at any date,
------------------------------
that dollar amount designated as such opposite such Lender's name on the
signature pages hereof, as the same may be amended from time to time in
accordance with this Agreement.
"Miscellaneous Charges" has the meaning set forth in Section 2.13
---------------------
hereof.
"Mortgage" means a mortgage or deed of trust on improved real
--------
property. A Mortgage may be a First Mortgage or a Second Mortgage.
"Mortgage-backed Securities" means securities that are secured or
--------------------------
otherwise backed by Mortgage Loans.
"Mortgage Borrower" means, with respect to a Mortgage Loan, the Person
-----------------
to which such Mortgage Loan is made.
"Mortgage Loan" means any loan evidenced by a Mortgage Note and
-------------
secured by a Mortgage. The term "Mortgage Loan" shall include First
Mortgage Loans and Second Mortgage Loans unless the context otherwise
requires, and shall include each Special Xxxxxx Xxx Loan.
"Mortgage Note" means a promissory note secured by one or more
-------------
Mortgages.
"Mortgage Note Amount" means, as of the date of determination, the
--------------------
then outstanding unpaid principal amount of a Mortgage Note (whether or not
an additional amount is available to be drawn thereunder).
"Mortgage Pool" means a pool of one or more Pledged Mortgages on the
-------------
basis of which there is to be issued a Mortgage-backed Security.
"Multiemployer Plan" means a "multiemployer plan" as defined in
------------------
Section 4001(a)(3) of ERISA which is maintained
for employees of the Borrowers or any Subsidiary of the Borrowers.
"Multifamily Mortgage Loan" means a Mortgage Loan secured by a
-------------------------
Mortgage on improved Multifamily Property.
"Multifamily Property" means real property containing or which will
--------------------
contain more than four (4) dwelling units.
"Net Aggregate Shortfall" means on any given date for which a
-----------------------
regularly scheduled pass-through payment is required to be made by the
Borrowers to an Investor or the holders of Mortgaged-backed Securities, the
excess of all (i) principal and interest payments due the Investor or
holders in such payment over (ii) all principal and interest received for
such monthly payment on the related Mortgage Loans.
"Net Proceeds" means, with respect to the Rights Offering, any other
------------
issuance of Debt of any Borrower or equity securities of WMF Group after
the Closing Date, or any sale of Servicing Contracts after the Closing
Date, the aggregate amount of the proceeds thereof, net of the actual cash
expenses paid by the Borrowers in connection therewith.
"New Borrower" has the meaning set forth in Section 4.3 hereof.
------------
"Nonrecourse Servicing Contract" means a Servicing Contract under
------------------------------
which the Borrowers are not obligated to repurchase or indemnify the holder
of Mortgage Loans as a result of a default on the Mortgage Loans occurring
more than six months after the date of such Mortgage Loan; provided, that
the Borrowers may be obligated to repurchase or indemnify the holder as a
result of a breach of any customary representation or warranty made in
connection with the non-recourse sale or servicing of such Mortgage Loans.
"Nonrecourse Servicing Portfolio" means, for any Person, the Adjusted
-------------------------------
Servicing Portfolio of such Person, but excluding the principal balance of
Mortgage Loans serviced pursuant to Servicing Contracts other than
Government Servicing Contracts included in the Adjusted Servicing Portfolio
at such date.
"Notes" has the meaning set forth in Section 2.8 hereof.
-----
"Notices" has the meaning set forth in Article 10 hereof.
-------
"Obligations" means any and all indebtedness, obligations and
-----------
liabilities of the Borrowers to the Lenders, the Credit Agent and the
Collateral Agent (whether now existing or hereafter arising, voluntary or
involuntary, whether or not jointly owed with others, direct or indirect,
absolute or contingent, liquidated or unliquidated, and whether or not from
time to time decreased or extinguished and later increased, created or
incurred), whether or not arising out of or related to the Loan Documents.
"Officer's Certificate" means a certificate executed on behalf of the
---------------------
Borrowers by the chief financial officer or the treasurer of WMF Group or
by such other officer as may be acceptable to the Credit Agent and
substantially in the form of Exhibit I-MF attached hereto.
------------
"Operating Account" means a demand deposit account maintained at the
-----------------
Funding Bank in the name of the Borrowers and designated for funding that
portion of each Mortgage Loan not funded by an Advance made against such
Mortgage Loan and for returning any excess payment from an Investor for a
Pledged Mortgage or Pledged Security.
"Ordinary Warehousing Rate" means a floating rate of interest which is
-------------------------
equal to one percent (1.00%) per annum over LIBOR. The Ordinary
Warehousing Rate will be adjusted as of the effective date of each weekly
change in LIBOR. The Credit Agent's determination of the Ordinary
Warehousing Rate as of any date of determination shall be conclusive and
binding, absent manifest error.
"Participant" has the meaning set forth in Section 13.3 hereof.
-----------
"Participation Certificate" means a participation certificate issued
-------------------------
by an Investor, a pool custodian satisfactory to the Lenders or the
Borrowers evidencing an undivided interest in a Pledged Mortgage or a
Mortgage Pool consisting of Pledged Mortgages.
"Percentage Share" means Servicing Facility Percentage Share, Term
----------------
Loan Percentage Share or Warehousing Percentage Share, as applicable.
"Person" means and includes natural persons, corporations, limited
------
liability companies, limited partnerships, general partnerships, joint
stock companies, joint ventures, associations, companies, trusts, banks,
trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies
and political subdivisions thereof.
"P&I Advance" means a Warehousing Advance used by the Borrowers to
-----------
make a regularly scheduled pass-through payment on Xxxxxx Mae Mortgage-
backed Securities for which the Borrowers have a Net Aggregate Shortfall.
"P&I Rate" means a floating rate of interest equal to one and one-half
--------
percent (1.50%) per annum over LIBOR. The P&I Rate shall be adjusted on
and as of the effective date of each weekly change in LIBOR. The Credit
Agent's determination of the P&I Rate as of any date of determination shall
be conclusive and binding, absent manifest error.
"Plans" has the meaning set forth in Section 5.12 hereof.
-----
"Pledged Mortgages" has the meaning set forth in Section 3.3(a)
-----------------
hereof.
"Pledged Securities" has the meaning set forth in Section 3.3(b)
------------------
hereof.
"Pledged Servicing Contracts" means all Servicing Contracts in which
---------------------------
the Credit Agent has a valid, perfected, first priority security interest
to secure the Obligations, whether hereunder or under any other Loan
Document.
"Projected Net Operating Income" means, with respect to any Commercial
------------------------------
Property securing a Commercial Mortgage Loan, the following amount
(determined for the 12 months following the date of the related Advance):
PNOI = PFOR - XX - XXX,
where "PNOI" means Projected Net Operating Income, "PFOR" means the
---- ----
projected amount of rent that would be paid by tenants of such related
property assuming (a) full occupancy thereof and (b) an average rental rate
equal to the lower of the actual current average rental rate for such
property or the current market rental rate for comparable properties, "VR"
--
means the projected amount of PFOR that will not be received as a result of
vacancies, assuming a vacancy rate equal to the greater of the actual
current vacancy rate for such property and the current market vacancy rate
for comparable properties, and rent concessions agreed to with existing
tenants, and "XXX" means the projected net
---
operating expenses (i.e., total expenses minus interest expense) for such
related property.
"Property" means a Multifamily Property, a Health Care Facility or
--------
other income-producing commercial property securing a Mortgage Loan.
"Property Debt Service Coverage Ratio" means, at any date of
------------------------------------
determination for any Commercial Property that secures a Mortgage Loan
pledged or to be pledged hereunder, the ratio of (a) the Projected Net
Operating Income of the Commercial Property, to (b) projected interest
expense and scheduled payments in respect of the Commercial Mortgage Loan
for the 12 months after such date of determination.
"Purchase Commitment" means a written commitment, in form and
-------------------
substance satisfactory to the Credit Agent, issued in favor of the
Borrowers by an Investor pursuant to which that Investor commits to
purchase Mortgage Loans or Agency Securities.
"Rating Agency" means a nationally recognized statistical rating
-------------
organization that rates securities backed by Mortgage Loans.
"Receivables" has the meaning set forth in Section 3.3(g) hereof.
-----------
"Regulation D" means Regulation D of the Board of Governors of the
------------
Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Release Amount" has the meaning set forth in Section 3.4(g), 3.4(h)
--------------
hereof.
"Restricted Payments" means, collectively, all dividends or other
-------------------
distributions of any nature (cash, securities, assets or otherwise), and
all payments, by virtue of redemption or otherwise, on any class of equity
securities (including, without limitation, warrants, options or rights
therefor) issued by WMF Group, whether such securities are now or may
hereafter be authorized or outstanding and any distribution in respect of
any of the foregoing, whether directly or indirectly.
"RFC" means Residential Funding Corporation, a Delaware corporation,
---
and any successor thereto.
"Rights Offering" means the rights to purchase common stock of WMF
---------------
Group for $5.00 per share distributed to the holders of shares of Common
Stock of WMF Group as of February 1, 1999, as described in the Prospectus
filed on December 31, 1998, as amended through February 5, 1999, filed with
the Securities and Exchange Commission.
"Second Mortgage" means a Mortgage which constitutes a second Lien on
---------------
the property covered thereby.
"Second Mortgage Loan" means a Mortgage Loan secured by a Second
--------------------
Mortgage.
"Secured Parties" has the meaning set forth in Section 3.1 hereof.
---------------
"Servicing Acquisition" means a transaction in which the Borrowers
---------------------
acquire (a) Nonrecourse Servicing Contracts with respect to Multifamily
Mortgage Loans, Health Care Mortgage Loans and/or Commercial Mortgage Loans
in a bulk purchase, (b) all of the issued and outstanding capital stock
(and, if applicable, securities convertible into or other rights to acquire
such capital stock) of a corporation (or equivalent interests in a limited
liability company, partnership or other entity) that owns, as its primary
asset, such Nonrecourse Servicing Contracts, or (c) all or substantially
all of the assets of such a corporation or other entity.
"Servicing Acquisition Documents" means, with respect to any Servicing
-------------------------------
Acquisition, the Servicing Purchase Agreement and all agreements,
documents, and instruments executed and delivered in connection therewith.
"Servicing Collateral" means (a) the Pledged Servicing Contracts, all
--------------------
Collateral described in Sections 3.1(e) and 3.1(f), all Collateral
described in Sections 3.1(g), 3.1(i), 3.1(j) and 3.1(k) hereof that
constitutes proceeds of, or is related to, such Collateral, and any other
property related to Pledged Servicing Contracts in which the Credit Agent
has a security interest to secure the Obligations.
"Servicing Collateral Value" means, as of the date of any
--------------------------
determination, with respect to any Servicing Contracts, the Appraisal Value
of such Servicing Contracts (adjusted to account for Servicing Contracts
sold or Mortgage Loans repaid since the date of the most recent Appraisal
in accordance with the methodology of such Appraisal); provided, that for
--------
purposes of calculating the Servicing Collateral Value, the following
Mortgage Loans shall be
excluded: (i) Mortgage Loans on which any payment is more than sixty (60)
days past due, (ii) Mortgage Loans in respect of which the borrowers have
commenced foreclosure proceedings, (iii) Mortgage Loans in respect of which
any obligor is the subject of a bankruptcy proceeding, (iv) Mortgage Loans
serviced pursuant to Servicing Contracts with Affiliates of the Borrowers,
including without limitation, WMFCC, or with special purpose entities
created by Affiliates in connection with the securitization of Mortgage
Loans; and (v) Servicing Contracts excluded in calculating the Adjusted
Servicing Portfolio, other than pursuant to clause (b) of the definition
thereof.
"Servicing Contract" means, with respect to any Person, the
------------------
arrangement, whether or not in writing, pursuant to which such Person has
the right to service Mortgage Loans.
"Servicing Facility Advance" means a disbursement by the Lenders under
--------------------------
the Servicing Facility Commitments pursuant to Section 2.4 of this
Agreement.
"Servicing Facility Advance Request" has the meaning set forth in
----------------------------------
Section 2.5 hereof.
"Servicing Facility Commitment" has the meaning set forth in Section
-----------------------------
2.4(a) hereof.
"Servicing Facility Commitment Fee" means a fee payable by the
---------------------------------
Borrowers in consideration of the Lenders' agreement to make their
respective Servicing Facility Advances hereunder. The amount of the
Servicing Facility Commitment Fee is set forth in Section 2.12(b) hereof.
"Servicing Facility Credit Limit" means at any date the sum of the
-------------------------------
Maximum Servicing Facility Commitments of the Lenders at such date, with
the initial Servicing Facility Credit Limit being Twenty-five Million
Dollars ($25,000,000).
"Servicing Facility Maturity Date" means the earliest of: (a) February
--------------------------------
10, 2002, as such date may be extended from time to time in writing by all
of the Lenders holding Servicing Facility Advances or a Servicing Facility
Commitment, and (b) the date the Servicing Facility Advances become due and
payable pursuant to Section 8.2 below.
"Servicing Facility Percentage Share" means, for any Lender at any
-----------------------------------
date, that percentage which such Lender's Maximum Servicing Facility
Commitment or, after the Servicing Facility Commitments have expired or
been
terminated, the aggregate outstanding principal balance of such Lender's
Servicing Facility Advances, bears to the Servicing Facility Credit Limit
or, after the Servicing Facility Commitments have expired or been
terminated, the aggregate outstanding principal balance of all Servicing
Facility Advances.
"Servicing Facility Promissory Note" means the promissory note
----------------------------------
evidencing the Borrowers' Obligations to any Lender with respect to
Servicing Facility Advances.
"Servicing Facility Rate" means a floating rate of interest per annum
-----------------------
equal to two and one-half percent (2.50%) per annum over LIBOR. The
Servicing Facility Rate shall be adjusted on and as of the effective date
of each weekly change in LIBOR. The Credit Agent's determination of the
Servicing Facility Rate as of any date of determination shall be conclusive
and binding, absent manifest error.
"Servicing Portfolio" means, as to any Person, the unpaid principal
-------------------
balance of Mortgage Loans whose Servicing Contracts are owned by such
Person.
"Servicing Purchase Agreement" means the principal agreement or
----------------------------
agreements pursuant to which the Borrowers make any Servicing Acquisition.
"Servicing Secured Advances" means P&I Advances, Liquidity Advances,
--------------------------
Term Loan Advances and Servicing Facility Advances.
"Servicing Secured Obligations" means the sum of the aggregate
-----------------------------
outstanding principal balance of all Servicing Secured Advances, the amount
available to be drawn under all outstanding Letters of Credit and the
Letter of Credit Obligations.
"Single Purpose Entity" means a corporation, limited liability company
---------------------
or limited partnership the organizational documents of which provide that
such Person (i) was formed or organized solely for the purpose of owning or
operating the Commercial Property securing a Commercial Mortgage Loan, (ii)
will not engage in any business other than the ownership, operating and
financing of such Commercial Property, (iii) will not own any assets other
than those related to such Commercial Property and its financing, (iv) will
not incur any liabilities other than the related Commercial Mortgage Loan
and other liabilities permitted thereunder, (v) will maintain its own
books, records and accounts separate and apart from those of any other
Person,
and (vi) will hold itself out as being a legal entity separate and distinct
from any other Person.
"Special Xxxxxx Mae Advance" means an Advance made to Washington
--------------------------
against Special Xxxxxx Xxx Loans.
"Special Xxxxxx Mae Loans" means advances made by Washington under any
------------------------
Special Xxxxxx Xxx Program Agreement and evidenced by one or more
promissory notes in the possession of (a) the Collateral Agent or (b)
Xxxxxx Mae, provided that Xxxxxx Xxx has entered into a bailee agreement
with the Credit Agent, in form and substance satisfactory to the Credit
Agent, with respect to the Credit Agent's security interest in Washington's
interest in such promissory note(s).
"Special Xxxxxx Mae Program Agreement" means any agreement between
------------------------------------
Washington and one or more borrowers and (if applicable) other obligors
described on Exhibit Q hereto (as such Exhibit Q may be amended in
--------- ---------
accordance with Section 4.4 hereof) pursuant to which Washington makes
Special Xxxxxx Xxx Loans to such borrowers secured by Mortgages on Multi-
family Properties, provided that Xxxxxx Mae has agreed, on terms
satisfactory to the Credit Agent, to issue a Mortgage-backed Security or
Securities in exchange for a one hundred percent (100%) participation in
each such Special Xxxxxx Xxx Loan.
"Statement Date" means the date of the most recent financial
--------------
statements of WMF Group and its Subsidiaries, on a consolidated basis,
delivered to the Lenders under the terms of this Agreement.
"Subordinated Debt" means (a) all indebtedness of the Borrowers for
-----------------
borrowed money which is effectively subordinated in right of payment to all
other present and future Obligations either (i) pursuant to a Subordination
of Debt Agreement in the form of Exhibit F hereto or (ii) otherwise on
---------
terms acceptable to the Majority Lenders, and (b) solely for purposes of
Section 7.4 hereof, all indebtedness of the Borrowers which is required to
be subordinated by Section 4.1(b) or Section 6.10 hereof.
"Subsidiary" means any corporation, association or other business
----------
entity in which more than fifty percent (50%) of the total voting power or
shares of stock entitled to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more of the other Subsidiaries of that
Person or a combination thereof.
"Swingline Advance" means Warehousing Advances made by the Swingline
-----------------
Lender under Section 2.2 hereof.
"Swingline Facility Amount" means the maximum amount of Swingline
-------------------------
Advances to be outstanding from time to time, not to exceed the lesser of
(i) Fifty Million Dollars ($50,000,000) or (ii) the then undisbursed
portion of the Warehousing Credit Limit.
"Swingline Lender" means RFC.
----------------
"Swingline Note" means the promissory note evidencing the Borrowers'
--------------
Obligation to the Swingline Lender with respect to Swingline Advances.
"Tangible Net Worth" means with respect to any Person at any date, the
------------------
excess of the total assets over total liabilities of such Person on such
date, each to be determined in accordance with GAAP consistent with those
applied in the preparation of the financial statements referred to in
Section 4.1(a)(7) hereof, plus Xxxxxx Mae Loan Loss Reserves and that
portion of Subordinated Debt not due within one year of such date, provided
that, for purposes of this Agreement, there shall be excluded from total
assets advances or loans to shareholders, officers, employees or
Affiliates, investments in Affiliates, assets pledged to secure any
liabilities not included in the Debt of such Person, intangible assets and
those other assets which would be deemed by HUD to be non-acceptable in
calculating adjusted net worth in accordance with its requirements in
effect as of such date, as such requirements appear in the "Audit Guide for
Audit of Approved Non-Supervised Mortgagees" and other assets deemed
unacceptable by the Credit Agent in its sole discretion.
"Term Loan Advance" means an Advance made on the Closing Date pursuant
-----------------
to Section 2.6 hereof.
"Term Loan Credit Limit" means the sum of the Maximum Term Loan
----------------------
Commitments of the Lenders, which shall be Twenty-five Million Dollars
($25,000,000).
"Term Loan Commitment Fee" means a fee payable by the Borrowers in
------------------------
consideration of the Lenders' making their respective Term Loan Advances
hereunder. The amount of the Term Loan Commitment Fee is set forth in
Section 2.12(d) hereof.
"Term Loan Maturity Date" means the earliest of: (a) the close of
-----------------------
business on February 10, 2004, as such date may
be extended from time to time in writing by all of the Lenders holding Term
Loan Advances, in their sole discretion, and (b) the date the Term Loan
Advances become due and payable pursuant to Section 8.2 below.
"Term Loan Percentage Share" means, for any Lender at any date, that
--------------------------
percentage which such Lenders Maximum Term Loan Commitment or, after the
Term Loan Advances have been made, the outstanding principal balance of
such Lender's Term Loan Advance bears to the Term Loan Credit Limit or,
after the Term Loan Advances have been made, the aggregate outstanding
principal balance of all Term Loan Advances.
"Term Loan Rate" means a floating rate of interest per annum equal to
--------------
three percent (3.00%) per annum over LIBOR. The Term Loan Rate shall be
adjusted on and as of the effective date of each weekly change in LIBOR.
The Credit Agent's determination of the Term Loan Rate as of any date of
determination shall be conclusive and binding, absent manifest error.
"Trust Receipt" means a trust receipt in a form approved by the Credit
-------------
Agent and pursuant to which the Collateral Agent may deliver any document
relating to the Collateral to the Borrowers for correction or completion.
"Underwriting Guidelines" means any underwriting guidelines adopted by
-----------------------
the sponsor of any program approved by the Credit Agent for Eligible
Commercial Mortgage Loans, as in effect from time to time, provided such
underwriting guidelines have been approved by, or conform to the standards
of, at least two Rating Agencies.
"VA" means the U.S. Department of Veterans Affairs and any successor
--
thereto.
"Warehousing Advance" shall mean a disbursement by the Lenders under
-------------------
the Warehousing Commitments pursuant to Section 2.1(a) of this Agreement or
a Swingline Advance.
"Warehousing Advance Request" has the meaning set forth in Section
---------------------------
2.3(a) hereof.
"Warehousing Collateral" means all of the Collateral other than the
----------------------
Servicing Collateral and the Receivables.
"Warehousing Commitment" has the meaning set forth in Section 2.1(a)
----------------------
hereof.
"Warehousing Commitment Fee" means a fee payable by the Borrowers in
--------------------------
consideration of the Lenders' issuance of their Warehousing Commitments.
The amount of the Warehousing Commitment Fee, if any, is set forth in
Section 2.12(a) hereof.
"Warehousing Credit Limit" means at any date the sum of the Maximum
------------------------
Warehousing Commitments of the Lenders at such date, with the initial
Warehousing Credit Limit being One Hundred Fifty Million Dollars
($150,000,000).
"Warehousing Maturity Date" shall mean the earlier of: (a) the close
-------------------------
of business on February 9, 2000, as such date may be extended from time to
time in writing by all of the Lenders holding Warehousing Advances or a
Warehousing Commitment, in their sole discretion, and (b) the date the
Warehousing Advances become due and payable pursuant to Section 8.2 below.
"Warehousing Percentage Share" means, for any Lender at any date, that
----------------------------
percentage which such Lender's Maximum Warehousing Commitment or, after the
Warehousing Commitments have expired or been terminated, the aggregate
outstanding principal balance of such Lender's Warehousing Advances, bears
to the Warehousing Credit Limit or, after the Warehousing Commitments have
expired or been terminated, the aggregate outstanding principal balance of
all Warehousing Advances.
"Warehousing Promissory Note" means the promissory note evidencing the
---------------------------
Borrowers' Obligations to any Lender with respect to Warehousing Advances
other than Swingline Advances.
"Wire Disbursement Account" means a demand deposit account maintained
-------------------------
at the Funding Bank in the name of the Credit Agent for the clearing of
wire transfers requested by the Borrowers to fund the closing of Pledged
Mortgages.
"WMFCC" means WMF Capital Corp., a Delaware corporation and a wholly-
-----
owned subsidiary of WMF Group.
"Year 2000 Problem" means the risk that computer applications may not
-----------------
be able to properly perform date-sensitive functions after December 31,
1999.
1.2 Other Definitional Provisions.
-----------------------------
1.2(a) Accounting terms not otherwise defined herein
shall have the meanings given the terms under GAAP.
1.2(b) Defined terms may be used in the singular or the
plural, as the context requires.
1.2(c) All references to time of day shall mean the then
applicable time in Chicago, Illinois, unless expressly provided to the
contrary.
2. THE CREDIT.
2.1 The Warehousing Credit Limit.
----------------------------
2.1(a) Subject to the terms and conditions of this
Agreement and provided no Default or Event of Default has occurred and
is continuing, the Lenders agree, severally, and not jointly, from
time to time during the period from the Closing Date, but not
including, the Warehousing Maturity Date, to make Warehousing Advances
to the Borrowers, pro rata in accordance with their respective
Warehousing Percentage Shares, provided the total aggregate principal
amount outstanding at any one time of all such Warehousing Advances
shall not exceed the Warehousing Credit Limit. The obligation of each
Lender to make Warehousing Advances up to its Maximum Warehousing
Commitment is hereafter referred to as such Lender's "Warehousing
Commitment." Within the Warehousing Credit Limit, the Borrowers may
borrow, repay and reborrow. On the Closing Date, the Borrowers shall
request, and the Lenders shall make, Warehousing Advances in an amount
equal to the aggregate outstanding principal balance of the Existing
Agreement Warehousing Advances, and such Warehousing Advances shall be
applied to pay such Existing Agreement Warehousing Advances in full.
All Warehousing Advances under this Agreement shall constitute a
single indebtedness, and all of the Collateral shall be security for
the Notes and for the performance of all the Obligations. Warehousing
Advances shall be made to any Borrower, as shall be requested by the
Borrowers, but each Warehousing Advance shall be deemed made to or for
the benefit of all of the Borrowers, and the Borrowers, jointly and
severally, shall be obligated to repay all Warehousing Advances made
hereunder. With respect to its obligation to repay Warehousing
Advances made to the other Borrowers, each Borrower agrees to the
terms set
forth in Exhibit N attached hereto and made a part hereof.
---------
2.1(b) Warehousing Advances shall be used by the Borrowers
solely for the purpose of funding the acquisition or origination of
Commercial Mortgage Loans, Health Care Mortgage Loans and Multifamily
Mortgage Loans, except (i) in the case of P&I Advances, which may be
used for the purpose of funding the Borrowers' obligations to make
principal or interest payments to the holders of Xxxxxx Xxx Mortgage-
backed Securities backed by Mortgage Loans serviced by the Borrowers
and for which the Borrowers have a Net Aggregate Shortfall, and (ii)
in the case of Liquidity Advances, which may be used for the purpose
of funding the Borrowers' obligation, as a master servicer of
Mortgage-backed Securities issued by Xxxxxx Mae or backed by
Commercial Mortgage Loans, provided such advance results in the
creation of a Receivable pursuant to the applicable Servicing
Contract. All Warehousing Advances shall be made at the request of
the Borrowers, in the manner hereinafter provided in Section 2.3, and
all Warehousing Advances, except P&I Advances and Liquidity Advances,
shall be made against the pledge of Mortgage Loans as Collateral
therefor. The following limitations on the use of the Warehousing
Advances shall be applicable:
(1) No Warehousing Advance shall be made against a Mortgage
Loan other than a Mortgage Loan secured by a Mortgage on real
property located in one of the states of the United States or the
District of Columbia.
(2) No Warehousing Advance shall be made to any Borrower
against Mortgage Loans other than Mortgage Loans of a type for
which such Borrower has been approved by the Credit Agent.
(3) No Warehousing Advance shall be made against a Mortgage
Loan which is not covered by a Purchase Commitment for either the
Mortgage Loan or the Agency Securities to be created on the basis
of such Mortgage Loan.
(4) No Warehousing Advance (other than Warehousing Advances
made on the Closing Date to refinance Existing Agreement
Warehousing Advances) shall be made against any Mortgage Loan
other than an FHA Construction
Mortgage Loan which was closed more than thirty (30) days prior
to the date of the requested Advance.
(5) Except for Warehousing Advances made against the
Mortgage Loans described on Exhibit S hereto, no Warehousing
---------
Advance shall be made against an FHA Construction Mortgage Loan
or a Special Xxxxxx Xxx Loan unless (a) no lender other than the
Lenders have made loans to the Borrowers against such FHA
Construction Mortgage Loan or loans made under the related
Special Xxxxxx Mae Program Agreement, (b) the Collateral Agent
has at one time had or will (as provided in Exhibit D-MF/FHA or
----------------
Exhibit D-MF/SFNMA, as applicable) obtain possession of the
------------------
related Mortgage Note and Collateral Documents, and (c) the
related Mortgage Note is in the possession of a Person other than
the Borrowers or an Affiliate of the Borrowers.
(6) No Warehousing Advance shall be made against a
Mortgage Loan, other than a HUD 241 Mortgage Loan or a Xxxxxx Xxx
DUS Mortgage Loan, that is not a First Mortgage Loan.
(7) The aggregate amount of Warehousing Advances
outstanding at any one time against Second Mortgage Loans shall
not exceed Fifteen Million Dollars ($15,000,000).
(8) The aggregate amount of Warehousing Advances
outstanding at any one time against Commercial Mortgage Loans
shall not exceed Fifty Million Dollars ($50,000,000).
(9) The aggregate amount of P&I Advances outstanding
at any one time shall not exceed Five Million Dollars
($5,000,000).
(10) The aggregate amount of Liquidity Advances
outstanding at any one time shall not exceed Five Million Dollars
($5,000,000).
2.1(c) No Warehousing Advance shall exceed the following
amount applicable to the type of Collateral at the time it is pledged:
(1) A Warehousing Advance made against a Conventional
Mortgage Loan pledged hereunder that is committed for purchase by
Xxxxxx Mae or Xxxxxxx Mac or against a Xxxxxx Mae DUS Mortgage
Loan pledged hereunder, the lesser of (i) the Mortgage Note
Amount or (ii) the Committed Purchase Price.
(2) A Warehousing Advance made against a Conventional
Mortgage Loan pledged hereunder that is committed for purchase by
an Investor other than Xxxxxx Xxx or Xxxxxxx Mac, ninety-eight
percent (98%) of the lesser of (i) the Mortgage Note Amount or
(ii) the Committed Purchase Price.
(3) A Warehousing Advance made against an FHA Project
Mortgage Loan, an FHA Construction Mortgage Loan or a HUD 241
Mortgage Loan pledged hereunder, the lesser of (i) the Mortgage
Note Amount or (ii) the Committed Purchase Price.
(4) A Warehousing Advance made against a Commercial
Mortgage Loan pledged hereunder that is subject to a Purchase
Commitment, ninety-five percent (95%) of the lesser of (i) the
Mortgage Note Amount, or (ii) the Committed Purchase Price.
(5) A Warehousing Advance made against a Special Xxxxxx Mae
Loan pledged hereunder, the lesser of (i) the Mortgage Note
Amount or (ii) the Committed Purchase Price.
(6) A P&I Advance made hereunder or a Liquidity Advance
made hereunder to fund principal or interest payments under
Mortgage-backed Securities, ninety percent (90%) of the related
Net Aggregate Shortfall.
(7) A Liquidity Advance made hereunder, other than a
Liquidity Advance made to fund principal or interest payments
under Mortgage-backed Securities, ninety (90%) of the amount of
the Receivable that will be created by the related payment.
(8) No P&I Advance or Liquidity Advance shall be made
hereunder if, after giving effect to
such Advance, the aggregate outstanding principal balance of the
Servicing Secured Obligations would exceed sixty-five (65%) of
the Servicing Collateral Value.
2.2 Swingline Commitment. On the terms and subject to the
--------------------
conditions set forth herein, the Swingline Lender agrees that it may, from
time to time to, but not including, the Maturity Date, agree to make
Warehousing Advances requested by the Borrowers in amounts not to exceed
the Swingline Facility Amount. Such Swingline Advances shall be evidenced
by the Swingline Note. A Swingline Advance shall bear interest, from the
date of such Swingline Advance, until paid in full, at the Ordinary
Warehousing Rate. The Lenders hereby agree to purchase from the Swingline
Lender an undivided participation interest in all outstanding Swingline
Advances held by the Swingline Lender at any time in an amount equal to
each Lender's Warehousing Percentage Share of such Swingline Advances. The
Swingline Lender may at any time in its sole and absolute discretion (and
shall no less frequently than weekly and upon the acceleration of the
Obligations following an Event of Default) request the Lenders to make
Warehousing Advances (each in principal amounts equal to their Warehousing
Percentage Shares thereof) in the aggregate amount necessary to repay the
outstanding Swingline Advances, and each Lender absolutely and
unconditionally agrees to fund such Warehousing Advances, regardless of any
Default or Event of Default or other condition which would otherwise excuse
such Lender from funding Warehousing Advances; provided that no Lender
shall be required to make Warehousing Advances to repay Swingline Advances
which would cause such Lender's aggregate Warehousing Advances then
outstanding to exceed the amount of such Lender's Maximum Warehousing
Commitment. Each Lender's Warehousing Advances made pursuant to the
preceding sentence shall be delivered directly to the Swingline Lender in
immediately available funds at the office of the Credit Agent by 12:00 noon
on the day of the request therefor by the Swingline Lender if such request
is made on or before 11:00 a.m. or by 9:00 a.m. on the first (1st) Business
Day following such request therefor if such request is made after 11:00
a.m. and shall be promptly applied against the outstanding Swingline
Advances. At any time following the receipt of funds from all the Lenders,
and no less than weekly, the Credit Agent shall deliver to each Lender a
certificate in the form of Exhibit M attached hereto (the "Advance
---------
Certificate"), certified by the Credit Agent.
2.3 Procedures for Obtaining Warehousing Advances.
---------------------------------------------
2.3(a) The Borrowers may obtain Warehousing Advances
hereunder, subject to the satisfaction of the conditions set forth in
Sections 4.1 and 4.2 hereof, upon compliance with the procedures set
forth in this Section 2.3 and in the following described Exhibits,
attached hereto and made a part hereof including the delivery of all
documents listed in the following described Exhibits (the "Collateral
Documents") to the Collateral Agent, as applicable to the type of
Collateral being financed:
(1) Conventional Mortgage Loans, Xxxxxx Xxx DUS Mortgage
Loans and Commercial Mortgage Loans, as set forth in Exhibit D-
----------
MF/CONV/DUS hereto.
-----------
(2) FHA Project Mortgage Loans, FHA Construction Mortgage
Loans and HUD 241 Mortgage Loans, as set forth in Exhibit D-
----------
MF/FHA hereto.
------
(3) Special Xxxxxx Mae Loans, as set forth in Exhibit D-
---------
MF/SFNMA.
--------
Requests for Warehousing Advances shall be initiated by the
Borrowers by delivering to the Credit Agent, with a copy to the
Collateral Agent, no later than one (1) Business Day prior to any
Business Day that the Borrowers desire to borrow hereunder, a
completed and signed request for a Warehousing Advance (a "Warehousing
Advance Request") on the then current form approved by the Credit
Agent. The current forms in use by the Credit Agent are Exhibit C-MF
------------
for Warehousing Advances, other than P&I Advances and Liquidity
Advances, and Exhibit C-P&I for P&I Advances and Liquidity Advances.
-------------
The Credit Agent shall have the right, on not less than three (3)
Business Days' prior Notice to the Borrowers, to modify any of said
Exhibits to conform to current legal requirements or Collateral Agent
practices, and, as so modified, said Exhibits shall be deemed a part
hereof.
2.3(b) The Collateral Agent shall have one (1) Business Day
under ordinary circumstances to (i) examine the Collateral Documents
(ii) reject Collateral that does not meet the requirements of this
Agreement or, if applicable, the related Purchase Commitment and (iii)
verify the Warehousing Advance amount. Before the Credit Agent funds
any requested Warehousing Advance, the Credit Agent shall have
received from the Collateral Agent Notice (telephonic followed by
written notice) of the amount that may be advanced pursuant to Section
2.1(c).
2.3(c) The Borrowers shall hold in trust for the Lenders,
and the Borrowers shall deliver to the Collateral Agent promptly upon
request, or if the recorded Collateral Documents have not yet been
returned from the recording office, immediately upon receipt by the
Borrowers of such recorded Collateral Documents, and the Pledged
Mortgage is not being held by an Investor for purchase or has not been
redeemed from pledge, the following: (1) originals of the Collateral
Documents for which copies are required to be delivered to the
Collateral Agent pursuant to Exhibit D-MF/CONV/DUS, Exhibit D-MF/FHA
--------------------- ----------------
or Exhibit D-MF/SFNMA, (2) the original lender's ALTA Policy of Title
------------------
Insurance or an equivalent thereto, (3) the environmental assessment,
and (4) any other documents relating to a Pledged Mortgage which the
Collateral Agent may request including, without limitation,
certificates of casualty or hazard insurance, credit information on
the maker of each such Mortgage Note, and other documents of all kinds
which are customarily desired for inspection or transfer incidental to
the purchase of any Mortgage Loan by an Investor or the issuance of a
Mortgage-backed Security and any additional documents which are
customarily executed by the seller of a Mortgage Note to an Investor.
2.3(d) Neither the Credit Agent nor any Lender shall incur
any liability to the Borrowers in acting upon any telephonic notice
referred to in this Agreement which the Credit Agent or such Lender
believes in good faith to have been given by a duly authorized officer
or other Person authorized to borrow on behalf of the Borrowers or for
otherwise acting in good faith under this Section. Upon the funding
of Warehousing Advances by the Lenders in accordance with this
Agreement pursuant to any telephonic notice, the Borrowers shall have
effected borrowings hereunder. A Warehousing Advance Request shall be
irrevocable and the Borrowers shall be bound to accept a Warehousing
Advance in accordance herewith, if such Warehousing Advance Request is
not revoked prior to 10:00 a.m. on the date the Warehousing Advance is
to be disbursed.
2.3(e) To make an Advance, the Credit Agent shall cause the
Funding Bank to credit the Wire Disbursement Account upon compliance
by the Borrowers
with the terms of the Loan Documents. The Credit Agent shall determine
in its sole discretion the method by which Advances and other amounts
on deposit in the Wire Disbursement Account are disbursed by the
Funding Bank to or for the account of the Borrowers.
2.3(f) If, pursuant to the authorization given by the Borrowers
in the Funding Bank Agreement, for the purpose of financing a Mortgage
Loan against which a Warehousing Advance has been made in accordance
with a Warehousing Advance Request, the Credit Agent debits the
Borrowers' Operating Account at the Funding Bank to the extent
necessary to cover a wire to be initiated by the Credit Agent, and
such debit or direction results in an overdraft, the Swingline Lender
may make an additional Swingline Advance to fund such overdraft.
2.3(g) Upon an Event of Default, and without the necessity of
prior demand or notice from the Credit Agent, the Borrowers authorizes
the Credit Agent to cause the Funding Bank to charge the Borrowers'
account for any Obligations due and owing the Lenders.
2.4 The Servicing Facility Commitment.
---------------------------------
2.4(a) Subject to the terms and conditions of this
Agreement and provided no Default or Event of Default has occurred and
is continuing, the Lenders agree from time to time during the period
from the Closing Date, to, but not including, the Servicing Facility
Maturity Date, to make Servicing Facility Advances to the Borrowers,
provided the sum of (i) the total aggregate principal amount
outstanding at any one time of all such Servicing Facility Advances,
(ii) the amount available to be drawn under Letters of Credit, and
(iii) the Letter of Credit Obligations, shall not exceed the Servicing
Facility Credit Limit. The obligation of each Lender to make
Servicing Facility Advances hereunder up to its Maximum Servicing
Facility Commitment is hereinafter referred to as such Lender's
"Servicing Facility Commitment." Within the Servicing Facility Credit
Limit, the Borrowers may borrow, repay and reborrow. All Servicing
Facility Advances under this Agreement shall constitute a single
indebtedness, and all of the Collateral shall be security for the
Servicing Facility Promissory Notes and for the performance of all the
Obligations. Servicing Facility Advances shall be made to each
Borrower, as shall be requested by the Borrowers, but each Servicing
Facility Advance shall be deemed made to or for the benefit of
all of the Borrowers, and all of the Borrowers, jointly and severally,
shall be obligated to repay any Servicing Facility Advances made under
the Servicing Facility Commitments. With respect to its obligation to
repay Servicing Facility Advances made to the other Borrowers, each
Borrower agrees to the terms set forth in Exhibit N attached hereto
---------
and made a part hereof.
2.4(b) Servicing Facility Advances shall be used by the
Borrowers solely for the purpose of (i) financing a part of the cost
of a Servicing Acquisition; (ii) general working capital purposes;
(iii) meeting Xxxxxx Mae's Loan Loss Reserve requirements; or (iv)
other corporate needs. Each Servicing Facility Advance shall be made
at the request of the Borrowers, in the manner hereinafter provided in
Section 2.5 hereof. The following limitations on Servicing Facility
Advances shall be applicable:
(1) No Servicing Facility Advance shall be made if,
after giving effect thereto, (i) the aggregate outstanding
principal balance of all Servicing Facility Advances, the amount
available to be drawn under all Letters of Credit and the Letters
of Credit Obligations would exceed the Servicing Facility Credit
Limit, or (ii) the Servicing Secured Obligations would exceed
sixty-five percent (65%) of the Servicing Collateral Value.
(2) In calculating the Servicing Collateral Value
for purposes of the foregoing clause (i), no Servicing Contracts
being acquired in a Servicing Acquisition may be included unless
the Collateral Agent shall have reviewed the documents and
information described in Section 2.5(b) in connection with such
Servicing Acquisition, and the same shall be in all respects
satisfactory to the Collateral Agent.
2.5 Procedures for Obtaining Servicing Facility Advances.
----------------------------------------------------
2.5(a) The Borrowers may obtain Servicing Facility Advances
hereunder, subject to the satisfaction of the conditions set forth in
Sections 4.1 and 4.2 hereof, upon compliance with the procedures set
forth in this Section 2.5. Requests for Servicing Facility Advances
shall be initiated by the Borrowers delivering to the Credit Agent, no
later than two (2)
Business Day prior to any Business Day on which the Borrowers desire
to borrow hereunder, a completed and signed request for Servicing
Facility Advances (a "Servicing Facility Advance Request") on the then
current form approved by the Credit Agent. The current form in use by
the Credit Agent is Exhibit C-SA attached hereto and made a part
------------
hereof. The Credit Agent shall have the right, on not less than three
(3) Business Days' prior Notice to the Borrowers, to modify such
Exhibits to conform to current legal requirements or Credit Agent
practices, and, as so modified, said Exhibit shall be deemed a part
hereof.
2.5(b) If the Servicing Contracts being acquired in a Servicing
Acquisition will be included in calculating the Servicing Collateral
Value for purposes of Section 2.4(b)(1) hereof, the Borrowers shall
deliver the following documents, certificates and opinions related to
any Servicing Acquisition to the Credit Agent on or prior to the date
of any Servicing Facility Advance requested to finance such Servicing
Acquisition:
(1) the following documents with respect to the Nonrecourse
Servicing Contracts to be acquired in such Servicing Acquisition:
a counterpart of the Servicing Purchase Agreement and all other
Servicing Acquisition Documents, duly executed by each party
thereto;
(2) an Appraisal of the Nonrecourse Servicing Contracts to
be acquired in such Servicing Acquisition;
(3) evidence satisfactory to the Credit Agent that all
consents from and notices to Xxxxxx Mae, Xxxxxx Xxx, FHA, VA and
other governmental agencies or Investors required for the
Borrowers to assume the Servicing Contracts to be acquired and
continue its business after the closing of such Servicing
Acquisition, or for the Borrowers to acquire the Person to be
acquired and for such Person (or the Borrowers, if such Person is
to be merged with one of the Borrowers) to continue such Person's
business after the closing of such Servicing Acquisition, have
been obtained and given;
(4) evidence satisfactory to the Credit Agent that such
Servicing Facility Advances in
such Servicing Acquisition and any additional funds delivered
simultaneously to the sellers in such Servicing Acquisition will
be sufficient to pay the purchase price under such Servicing
Purchase Agreement in full;
(5) Such UCC Financing statements or amendments as the
Credit Agent, in its sole discretion, may request to perfect or
continue the perfection of its security interest;
(6) UCC, tax lien and judgment searches in the appropriate
public records for the seller(s) in such Servicing Acquisition
and any Person to be acquired in such Servicing Acquisition,
which shall not have disclosed the existence of any prior Lien on
the Servicing Contracts to be acquired by, or owned by the Person
to be acquired by, the Borrowers; and
(7) such further documents, instruments, opinions,
certificates and evidence as the Credit Agent may reasonably
request.
Before any Servicing Facility Advances to fund any Servicing
Acquisition are funded, the Collateral Agent shall have a reasonable
time to examine the documents delivered to it hereunder in connection
with the Servicing Acquisition to be funded, and may reject such of
them as are not reasonably satisfactory to the Collateral Agent.
2.5(c) To make Servicing Facility Advances to fund a
Servicing Acquisition, the Credit Agent shall cause the Funding Bank
to disburse the amount thereof to the seller(s) in the Servicing
Acquisition to be funded in accordance with the Servicing Facility
Advance Request, together with any other funds required to pay the
purchase price under such Servicing Purchase Agreement in full (other
than any portion thereof to be paid after the effective date of
transfer), upon compliance by the Borrowers with the terms of this
Agreement.
2.6 The Term Loan Commitment.
------------------------
Term Loan Advances shall be made on the Closing Date, without any
further action by the Borrowers, in an amount equal to the Term Loan Credit
Limit, and applied to repay the Existing Agreement Servicing Advances. No
Term Loan Advances shall be made after the Closing Date.
2.7 Funding of Advances; Non-Receipt of Funds by the Credit Agent.
-------------------------------------------------------------
Except to the extent any requested Warehousing Advances are to be funded as
Swingline Advances, the Credit Agent shall notify each Lender obligated to
make an Advance no later than 11:00 a.m. on the date of the requested
Advances of its receipt of the Advance Request and of its Percentage Share
of such Advances. To make an Advance, each Lender shall, except as
otherwise provided in Section 2.2, credit an account of the Credit Agent
with the Funding Bank prior to 12:00 noon on the date of such Advance, and
the Credit Agent shall make such Advance available to the Borrowers as
provided in this Agreement. If the Credit Agent receives notice from a
Lender that such Lender does not intend to make its Percentage Share of any
Advance, neither the Credit Agent nor any other Lender shall have any
obligation to fund such Lender's Percentage Share. Notwithstanding the
foregoing, unless a Lender notifies the Credit Agent by 12:00 noon on the
date of a proposed Advance that it does not intend to make its Percentage
Share of such Advance at such time and on such date available to the Credit
Agent, the Credit Agent may assume that such Lender will make such amount
available to the Credit Agent to be advanced to the Borrowers, and in
reliance on such assumption, the Credit Agent may, at its option, make a
corresponding amount available to the Borrowers.
2.7(a) If the Credit Agent makes such corresponding
amount available to the Borrowers and such amount is not made
available to the Credit Agent by such Lender by close of business on
the date of the Advance, such Lender shall pay such amount to the
Credit Agent upon demand plus interest to the date of payment at the
rate per annum equal to one percent (1%) per annum over the Federal
Funds Rate.
2.7(b) If such Lender fails to pay as provided herein,
the Borrowers shall pay such amount to the Credit Agent upon demand
plus interest (at the rate applicable to the Borrowers for such
Advance) to the date of repayment.
2.7(c) Nothing in this Subsection shall relieve any
Lender from its obligation to fund its Percentage Share of any
Advance, or prejudice any rights the Borrowers may have against any
Lender as a result of such Lender's failure to make its Percentage
Share of any Advance available to the Borrowers.
2.7(d) Any Lender failing to make an Advance when
required pursuant to this Agreement shall,
if no Default has occurred and is continuing, upon the request of the
Borrowers delivered to such Lender and the Credit Agent, assign,
pursuant to and in accordance with the provisions of Section 13.3
hereof, all of its rights and obligations under this Agreement and
under the Notes to an assignee selected by the Borrowers in
consideration for (i) the payment by such assignee to the assigning
Lender of the principal of, and interest accrued and unpaid to the
date of such assignment on, the Notes of such Lender, and (ii) the
payment by the Borrowers to the assigning Lender of any and all other
amounts owing to such Lender under any provision of this Agreement
accrued and unpaid to the date of such assignment. The processing and
recordation fee required under Section 13.3 hereof for such assignment
shall be paid by the Borrowers. Notwithstanding anything to the
contrary in this Section 2.7(d), in no event shall the replacement of
any Lender result in a decrease or reallocation of the aggregate
Commitments without the written consent of the Majority Lenders.
2.8 Notes.
-----
2.8(a) The Borrowers' Obligations in respect of Warehousing
Advances other than P&I Advances, Liquidity Advances and Swingline
Advances shall be evidenced by Warehousing Promissory Notes of the
Borrowers in favor of each Lender holding a Warehousing Commitment,
substantially in the form of Exhibit A-1 attached hereto. The
-----------
Borrowers' Obligations in respect of P&I Advances and Liquidity
Advances shall be evidenced by Sublimit Promissory Notes of the
Borrowers' in favor of each Lender holding a Warehousing Commitment,
substantially in the form of Exhibit A-2 attached hereto. The
-----------
Borrowers' Obligations in respect of Swingline Advances shall be
evidenced by a Swingline Note of the Borrowers in favor of the
Swingline Lender in the form of Exhibit A-3 attached hereto. The
-----------
Borrowers' Obligations in respect of the Servicing Facility Advances
shall be evidenced by Servicing Facility Promissory Notes of the
Borrowers in favor of each Lender holding a Servicing Facility
Commitment, substantially in the form of Exhibit A-4 attached hereto.
-----------
The Borrowers' Obligations in respect of the Term Loan Advances shall
be evidenced by Term Loan Promissory Notes of the Borrowers in favor
of each Lender, substantially in the form of Exhibit A-5 attached
-----------
hereto. The Warehousing Promissory Notes, Sublimit Promissory Notes,
Swingline Note, Servicing Facility Promissory Notes and Term Loan
Promissory
Notes are hereinafter collectively referred to as the "Notes." The
terms "Warehousing Promissory Note," "Sublimit Promissory Note,"
"Servicing Facility Promissory Note," "Term Loan Promissory Note,"
"Swingline Note", "Note" or "Notes" shall include all extensions,
renewals and modifications of the Notes and all substitutions
therefor. All terms and provisions of the Notes are hereby
incorporated herein.
2.8(b) Each Borrower, other than WMF Group, by its
execution and delivery of this Agreement or, in the case of a New
Borrower, a Borrower Addition Agreement, hereby (i) authorizes WMF
Group to execute and deliver, and appoints WMF Group as its true and
lawful attorney-in-fact for the purpose of executing and delivering,
Notes on its behalf, and (ii) agrees to be bound by, and obligated
pursuant to, each Note executed by WMF Group pursuant to this
Agreement or any amendment hereto. The foregoing appointment of WMF
Group is for the benefit of the Lenders and coupled with an interest,
and shall be irrevocable for as long as any Commitment remains
outstanding or any of the Obligations have not been irrevocably paid
and discharged in full.
2.9 Interest Payments.
-----------------
2.9(a) Except as provided in Section 2.9(f) or Section
2.9(g), the unpaid amount of each Warehousing Advance, other than a
P&I Advance and a Liquidity Advance, shall bear interest, from the
date of such Advance until paid in full, at the Ordinary Warehousing
Rate.
2.9(b) Except as provided in Section 2.9(f) or Section
2.9(g) hereof, the unpaid amount of each Term Loan Advance shall bear
interest, from the date of such Advance until paid in full, at the
Term Loan Rate.
2.9(c) Except as provided in Section 2.9(f) or Section
2.9(g) hereof, the unpaid amount of the Servicing Facility Advance
shall bear interest, from the date of such Advance until paid in full,
at the Servicing Facility Rate.
2.9(d) Except as provided in Section 2.9(f) or Section
2.9(g) hereof, the unpaid amount of each P&I Advance shall bear
interest, from the date of such Advance until paid in full, at the P&I
Rate.
2.9(e) Except as provided in Section 2.9(f) or Section
2.9(g) hereof, the unpaid amount of each Liquidity Advance shall bear
interest, from the date of such Advance until paid in full, at the
Liquidity Rate.
2.9(f) The Borrowers and any Lender may enter into an
agreement (the "Balance Funded Agreement") pursuant to which the
Borrowers agree to maintain Eligible Balances on deposit with such
Lender or a Designated Bank in consideration of the funding of all or
a portion of such Lender's Advances at a Balance Funded Rate. Prior
to the end of any calendar month, the Borrowers may give written
notice to any Lender with which it has a Balance Funded Agreement of
the Borrowers' election to have a portion (the "Balance Funded
Portion") of the principal amount of the Lender's Advances bear
interest at a Balance Funded Rate during the next succeeding calendar
month. In the event the Borrowers elect to have all or a portion of
any Lender's Advances bear interest at a Balance Funded Rate, such
Lender shall notify the Credit Agent no later than the first Business
Day of the next succeeding month of the Balance Funded Portion of such
Lender's Advances during such month and the Balance Funded Rate(s)
applicable thereto. If the Eligible Balances maintained by the
Borrowers with such Lender or Designated Bank during such month are
less than the Balance Funded Portion, such Lender may charge and
separately xxxx the Borrowers a deficiency fee (a "Balance Deficiency
Fee"), the amount of which shall be set forth in the Balance Funded
Agreement between the Borrowers and such Lender.
2.9(g) Upon Notice to the Borrowers, after the occurrence
and during the continuation of an Event of Default, the Credit Agent
may give Notice to the Borrowers that the unpaid amount of each
Advance shall bear interest, until paid in full, at a rate of interest
(the "Default Rate") equal to four percent (4%) per annum over the
applicable rate provided in the applicable subsection of this Section
2.9 or, if no rate is applicable, the highest rate then applicable to
any outstanding Advance.
2.9(h) If, for any reason, no interest is due on a
Warehousing Advance, the Borrowers agree to pay to the Swingline
Lender or the Lenders, as applicable, an administrative fee equal to
one (1) day of interest on such Advance at the rate of one and
one-half percent (1-1/2%) per annum. Administrative fees shall be due
and payable in the same manner as interest is due and payable
hereunder.
2.9(i) The floating rates of interest provided for in
this Section 2.9 will be adjusted as of the effective date of each
change in the applicable index. The Lender's determination of such
rates as of any date of determination shall be conclusive and binding,
absent manifest error.
2.9(j) All interest shall be computed on the basis of
a 360-day year for the actual number of days elapsed.
2.10 Principal Payments.
------------------
2.10(a) The outstanding principal amount of all
Warehousing Advances shall be payable in full on the Warehousing
Maturity Date.
2.10(b) The outstanding principal amount of all
Servicing Facility Advances shall be payable in full on the Servicing
Facility Maturity Date.
2.10(c) The principal amount of each Lender's Term Loan
Advance shall be payable in quarterly installments, due on the first
day of each Calendar Quarter beginning April 1, 1999, in an amount
equal to such Lender's Term Loan Percentage Share of Six Hundred
Twenty-Five Thousand Dollars ($625,000). The remaining principal
balance of the Term Loan Advances shall be payable on the Term Loan
Maturity Date.
2.10(d) The Borrowers shall have the right to prepay
the outstanding Advances in whole or in part, from time to time,
without premium or penalty. Amounts prepaid on Warehousing Advances
prior to the Warehousing Maturity Date and on Servicing Facility
Advances prior to the Servicing Facility Maturity Date may be
reborrowed, subject to the terms and conditions set forth in this
Agreement. All prepayments of the Term Loan Advances shall be applied
to the installments due thereon in the inverse order of their
maturities.
2.10(e) All payments of outstanding Advances from the
proceeds of the sale or other disposition of Pledged Mortgages and
Pledged Securities shall be paid directly by the Investor to the Cash
Collateral Account to be applied against any Obligations then due and
payable.
2.10(f) The Borrowers shall be obligated to pay to the
Credit Agent for the pro rata benefit of the Lenders, without the
necessity of prior demand or notice from the Credit Agent, and the
Borrowers authorize the Credit Agent to cause the Funding Bank to
charge the Borrowers' Operating Account for the amount of, any
outstanding Advance against a specific Pledged Mortgage upon the
earliest occurrence of any of the following events:
(1) For an FHA Construction Mortgage Loan,
ninety (90) days elapse from the date of each Advance made
against such Pledged Mortgage, and for any other Mortgage Loan
other than a Pledged Mortgage to be exchanged for a Xxxxxx Mae
Mortgage-backed Security, ninety (90) days elapse from the date
of the initial Advance made by the Credit Agent against such
Pledged Mortgage, whether or not such Pledged Mortgage is
included in an Eligible Mortgage Pool.
(2) For Mortgage Loans other than Xxxxxx Xxx
DUS Mortgage Loans to be exchanged for a Xxxxxx Mae Mortgage-
backed Security, forty-five (45) days elapse from the date the
Pledged Mortgage was delivered to an Investor or an Approved
custodian for examination and purchase, without the purchase
being made or the Eligible Mortgage Pool being initially
certified, or upon rejection of the Pledged Mortgage as
unsatisfactory by an Investor or an Approved Custodian.
(3) For a Xxxxxx Xxx DUS Mortgage Loan to be
exchanged for a Xxxxxx Mae Mortgage-backed Security, seventy-five
(75) days elapse from the date such Xxxxxx Xxx DUS Mortgage Loan
was delivered to Xxxxxx Mae for examination and the issuance of a
Pledged Security without the Pledged Security being issued, or
upon rejection of the Pledged Mortgages as unsatisfactory by
Xxxxxx Xxx.
(4) On the date an Advance was made and the
Pledged Mortgage which was to have been funded by such Advance is
not closed and funded.
(5) For a Conventional Multifamily Mortgage
Loan, Xxxxxx Mae DUS Mortgage Loan, FHA Project Mortgage Loan,
HUD 241 Mortgage Loan, FHA Construction Mortgage Loan,
Conventional Health Care Mortgage Loan, Commercial Mortgage Loan,
or Special Xxxxxx Xxx Loan, one (1) Business Day elapses from the
date an Advance was made against any Mortgage Loan, without
receipt of those Collateral Documents relating to such Mortgage
Loan required to be delivered on such date under Exhibit D-
---------
MF/CONV/DUS, Exhibit D-MF/FHA or Exhibit D-MF SFNMA, or such
----------- ---------------- ------------------
Collateral Documents, upon examination by the Lender, are found
not to be in compliance with the requirements of this Agreement
or the related Purchase Commitment.
(6) Ten (10) Business Days elapse from the date
a Collateral Document was delivered to the Borrowers for
correction or completion under a Trust Receipt, without being
returned to the Lender.
(7) Three (3) Business Days after the date on
which the Credit Agent notifies the Borrowers that a Pledged
Mortgage is determined to have been originated based on untrue,
incomplete or inaccurate information, whether or not the
Borrowers had knowledge of such misrepresentation or incorrect
information, or that a Pledged Mortgage is defaulted and has
remained in default for a period of sixty (60) days or more.
(8) For a Pledged Mortgage against which an
Advance was made on the basis of a Purchase Commitment, on the
mandatory delivery date of the related Purchase Commitment if the
specific Pledged Mortgage was not delivered under the Purchase
Commitment prior to such mandatory delivery date, or if the
Purchase Commitment is terminated.
(9) Payment of any Lien prior to a Second
Mortgage Loan is delinquent, and remains delinquent, for a period
of sixty (60) days or more.
(10) Upon sale, maturity or other disposition of the
Pledged Mortgage or, if a Pledged Mortgage is included in an
Eligible Mortgage Pool, upon sale or other disposition of the
related Agency Securities.
(11) On the date on which the Borrowers know, or have reason
to know, or receives notice from the Credit Agent, that one or
more of the representations and warranties set forth in Section
5.15 were inaccurate or incomplete in any material respect on any
date when made or deemed made.
(12) For a Warehousing Advance made to Washington against a
Special Xxxxxx Mae Loan, [30] days elapse from the date of the
initial Advance made by the Credit Agent without the Pledged
Security to be exchanged for a 100% participation in such Special
Xxxxxx Xxx Loan having been issued, or upon any determination by
Xxxxxx Mae not to purchase such 100% participation.
2.10(g) The outstanding amount of any Advance made
pursuant to Section 2.3(f) shall be payable in full within 1 Business
Day after the date of such Advance .
2.10(h) The Borrowers shall give Notice to the
Collateral Agent (telephonically, to be followed by written notice) of
the Pledged Mortgages or Pledged Securities for which proceeds have
been received. Upon receipt of such Notice, the Warehousing Advances
against such Pledged Mortgages or the Pledged Securities shall be
repaid and such Pledged Mortgages or Pledged Securities shall be
considered to have been redeemed from pledge. The Credit Agent is
entitled to rely upon the Borrowers' affirmation that deposits in the
Cash Collateral Account represent payment from Investors for the
purchase of Pledged Mortgages or Pledged Securities as specified by
the Borrowers. In the event that the payment from an Investor for the
purchase of Pledged Mortgages or Pledged Securities is less than the
outstanding Warehousing Advances against such Pledged Mortgages or the
Mortgage Loans backing Pledged Securities, the Credit Agent is
authorized to cause the Funding Bank to charge the Borrowers' account
for an amount equal to such deficiency. Provided no Default or Event
of Default exists, the Credit Agent shall return any excess payment
from an Investor for
Pledged Mortgages or Pledged Securities to the Borrowers.
2.10(i) In addition to the payments required pursuant to Section
2.9(g), the Borrowers shall be obligated to pay to the Credit Agent,
for the account of the Lenders, without the necessity of prior demand
or notice from the Credit Agent, and the Borrowers authorize the
Credit Agent to cause the Funding Bank to charge the Borrowers'
Operating Account, if the principal amount of any Pledged Mortgage is
prepaid in whole or in part while an Advance is outstanding against
such Pledged Mortgage, for the amount of such prepayment, to be
applied to such Advance.
2.10(j) For a period of not less than seven (7) consecutive days
in each calendar month, there shall be no P&I Advances outstanding;
and the Borrowers shall make such prepayments of the P&I Advances, and
shall refrain from requesting P&I Advances, as necessary to comply
with the foregoing requirement.
2.10(k) For a period of not less than seven (7) consecutive days
in each one hundred eighty (180) day period, there shall be no
Liquidity Advances outstanding; and the Borrowers shall make such
prepayments of the Liquidity Advances, and shall refrain from
requesting Liquidity Advances, as necessary to comply with the
foregoing requirement.
2.10(l) If at any time the aggregate outstanding principal
balance of all Servicing Secured Obligations exceeds sixty-five
percent (65%) of the Servicing Collateral Value, the Borrowers shall
prepay (i) first, the outstanding Servicing Facility Advances, (ii)
second, the outstanding P&I Advances and Liquidity Advances, and (iii)
third, the outstanding Term Loan Advances, in the amount of such
excess.
2.10(m) Prior to the occurrence of an Event of Default and
acceleration of all Warehousing Advances outstanding hereunder or
termination of the Warehousing Commitments hereunder, amounts received
by the Credit Agent as proceeds of the sale or other disposition of
Pledged Mortgages or Pledged Securities, including without limitation,
all such amounts from time to time deposited in the Cash Collateral
Account, shall be applied:
(1) in an amount equal to the Release Amount for
such Pledged Mortgages or the Mortgage Loans backing such
Pledged Securities, first, to the Swingline Advances until
the same have been repaid in full, and second, to the other
Warehousing Advances; and
(2) the balance, if any, to the Borrowers.
The application of funds allocated among the Lenders as set
forth above shall be deemed to constitute (1) repayment, in part or in
full, as applicable, of the Advances outstanding against the Pledged
Mortgages or Pledged Securities sold, and (ii) a refunding of an
amount of Swingline Advances equal to the portion of such proceeds
applied to Swingline Advances (other than any Swingline Advances made
against the Pledged Mortgages or Pledged Securities sold) as Advances
made by the Lenders pursuant to Section 2.1.
2.10(n) Following the occurrence of an Event of Default and
acceleration of any Obligations outstanding hereunder or termination
of the commitments of the Lenders to make Advances hereunder, all
amounts received by the Credit Agent on account of the Obligations
shall be disbursed by the Credit Agent in accordance with the
provisions of Section 8.3 hereof.
2.10(o) Upon the closing of the Rights Offering, the
Company shall repay the outstanding Servicing Facility Advances in an
amount equal to the sum of (i) the amount previously repaid to COMIT
on Subordinated Debt, as permitted by Section 7.4 hereof, plus (ii)
----
twenty-five percent (25%) of the amount by which the Net Proceeds of
the Rights Offering exceeds $20,000,000. Upon the closing of any
other issuance of Debt of any Borrower or equity securities of WMF
Group, or sale of any Servicing Contracts by any Borrower, the Company
shall repay the outstanding Servicing Facility Advances in an amount
equal to twenty-five percent (25%) of the Net Proceeds thereof.
2.11 Expiration of Commitments. Unless extended or terminated
-------------------------
earlier as permitted hereunder, the Warehousing Commitments shall expire of
their own term, and without the necessity of action by the Credit Agent or
any Lender, at the close of business on the Warehousing Maturity Date,the
Servicing Facility Commitments shall expire of their own term, and without
the necessity of action by the Credit Agent or any Lender, at the close of
business on the later to occur of the Servicing Facility Maturity Date, and
the Term Loan Facility Commitments shall expire of their own term, and
without the necessity of action by the Credit Agent or any Lender, at the
close of business on the Closing Date.
2.12 Fees. The Borrowers shall pay the following fees:
----
2.12(a) To each Lender, through the Credit Agent, a
Warehousing Commitment Fee in the amount of 1/8% per annum of the
amount of such Lender's Maximum Warehousing Commitment, which
Warehousing Commitment Fee shall be paid quarterly in advance and
shall be computed on the basis of a 365-day year and applied to the
actual number of days elapsed in each Calendar Quarter. On the Closing
Date, the Borrowers shall pay the prorated portion of the quarterly
Warehousing Commitment Fee due from the Closing Date to the last day
of the current Calendar Quarter. If any Lender increases its Maximum
Warehousing Commitment, or if an Additional Lender becomes a party
hereto, the Borrowers shall pay the Warehousing Commitment Fee on the
amount of such increase or the amount of such Additional Lender's
Maximum Warehousing Commitment from the effective date thereof to the
last day of the current Calendar Quarter. In all other cases, the
Borrowers shall make payments of the Warehousing Commitment Fee on the
1st day of each Calendar Quarter. If the Warehousing Maturity Date is
other than the last day of a Calendar Quarter, the Borrowers shall pay
the prorated portion of the Warehousing Commitment Fee due from the
beginning of the then current Calendar Quarter to and including the
Warehousing Maturity Date. The Borrowers shall not be entitled to a
reduction in the amount of the Warehousing Commitment Fee in the event
the amount of any Lender's Maximum Warehousing Commitment is reduced
at the request of the Borrowers, or in the event that any Lender's
Maximum Warehousing Commitment is terminated prior to its stated
expiration date as a result of an Event of Default hereunder. If the
commitments of the Lenders hereunder terminate prior to the
Warehousing Maturity Date, the unpaid balance of the Warehousing
Commitment Fee shall be due and payable in full on the date of such
termination.
2.12(b) To each Lender, through the Credit Agent, a
Servicing Facility Commitment Fee in
the amount of (i) one-fourth of one percent (1/4%) per annum of such
Lender's Percentage Share of the Servicing Facility Commitment, which
Servicing Facility Commitment Fee shall be payable quarterly in
advance until the Servicing Facility Maturity Date. Servicing Facility
Commitment Fees shall be computed on the basis of a 365-day year and
applied to the actual number of days elapsed in each Calendar Quarter.
On the Closing Date, the Borrowers shall pay the prorated portion of
the quarterly Servicing Facility Commitment Fee due from the Closing
Date to the last day of the current Calendar Quarter. In all other
cases, the Borrowers shall make quarterly payments of the Servicing
Facility Commitment Fee on the first (1st) day of each Calendar
Quarter. If the Servicing Facility Maturity Date is other than the
last day of a Calendar Quarter, the Borrowers shall pay the prorated
portion of the quarterly Servicing Facility Commitment Fee due from
the beginning of the then current Calendar Quarter to and including
the Servicing Facility Maturity Date, as applicable. The Borrowers
shall not be entitled to a reduction in the amount of the Servicing
Facility Commitment Fee in the event the amount of the Servicing
Facility Credit Limit is reduced at the request of the Borrowers, or
in the event that any Lender's Servicing Facility Commitment is
terminated prior to its stated expiration date as a result of an Event
of Default hereunder. If the Servicing Facility Commitments of the
Lenders hereunder terminate prior to the Servicing Facility Maturity
Date, the unpaid balance of the Servicing Facility Commitment Fee
shall be due and payable in full on the date of such termination.
2.12(c) If the Servicing Facility Commitment is at any time
reduced or terminated prior to the date set forth in clause (a) of the
definition of Servicing Facility Maturity Date at the request of the
Borrowers, the Borrowers shall pay to the Credit Agent, for the
account of the Lenders holding Servicing Facility Commitments, a fee
in the amount of one percent (1%) per annum (from the date of such
termination or reduction until the date set forth in clause (a) of the
definition of Servicing Facility Maturity Date herein) of the sum of
the Servicing Facility Commitments or, if less, the amount of such
reduction. The foregoing fee shall be due and payable on the
effective date of such reduction or termination.
2.12(d) To each Lender, through the Credit Agent, a Term
Loan Commitment Fee in the amount
of one-fourth of one percent (1/4%) per annum of (i) on the Closing
Date, such Lender's Maximum Term Loan Commitment, and (ii) thereafter,
the unpaid principal amount of such Lender's Term Loan Advance
outstanding on each annual anniversary of the Closing Date, which Term
Loan Commitment Fee shall be computed on the basis of a 365-day year
and applied to the actual number of days elapsed in each year. On the
Closing Date, the Borrowers shall pay the Term Loan Commitment Fee due
from the Closing Date to the day before the first annual anniversary
thereof. Thereafter, the Borrowers shall pay the Term Loan Commitment
Fee due for the following year, calculated as of each annual
anniversary date, on the first Business Day of each Calendar Quarter.
The Borrowers shall not be entitled to a refund of any portion of the
Term Loan Commitment Fee in the event the Term Loan Advances are
prepaid, either voluntarily by the Borrowers or as a result of an
Event of Default.
2.12(e) To LaSalle, for its own account, fees in respect of
each Letter of Credit in an amount not to exceed two percent (2.00%)
per annum.
2.12(f) To the Credit Agent, for its own account, such fees
as shall be separately agreed between the Borrowers and the Credit
Agent.
2.13 Miscellaneous Charges. In addition to all fees payable pursuant
---------------------
to Section 2.12 hereof, the Borrowers agree to reimburse the Credit Agent
for miscellaneous charges and expenses (collectively, "Miscellaneous
Charges") incurred by or on behalf of the Credit Agent in connection with
the handling and administration of Advances, and to reimburse the
Collateral Agent for Miscellaneous Charges incurred by or on behalf of the
Collateral Agent in connection with the handling and administration of the
Collateral. For the purposes hereof, Miscellaneous Charges shall include,
but not be limited to, costs for UCC, tax lien and judgment searches
conducted by the Credit Agent, filing fees, charges for wire transfers,
check processing charges, charges for security delivery fees, charges for
overnight delivery of Collateral, the Funding Bank's service charges and
Designated Bank Charges. Miscellaneous Charges are due when incurred, but
shall not be delinquent if paid within thirty (30) days after receipt of an
invoice or an account analysis statement from the Credit Agent or the
Collateral Agent, as the case may be.
2.14 Illegality. In the event that any Lender shall have determined
----------
(which determination shall be conclusive and binding absent manifest error)
at any time that the introduction of, or any change in, any applicable law,
rule, regulation, order or decree or in the interpretation or the
administration thereof by any Person charged with the interpretation or
administration thereof, or compliance by such Lender with any request or
directive (whether or not having the force of law) of any such Person,
shall make it unlawful or impossible for such Lender to charge interest at
the Balance Funded Rate based on the Borrowers' Eligible Balances as
contemplated by this Agreement, then such Lender shall forthwith give
Notice thereof to the Credit Agent and the Borrowers describing such
illegality in reasonable detail. Upon the giving of such Notice, the
obligation of such Lender to charge interest at the Balance Funded Rate
based on the Borrowers' Eligible Balances shall be immediately suspended
for the duration of such illegality, and with respect to Advances bearing
interest at the Balance Funded Rate, each such Advance of such Lender shall
bear interest at the applicable rate set forth in Section 2.9(a), (b), (c),
(d), (e) or (g). If and when such illegality ceases to exist, such Lender
shall notify the Credit Agent and the Borrowers thereof and such suspension
shall cease.
2.15 Interest Limitation. All agreements between the Borrowers and
-------------------
the Lenders are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of this Agreement
or the Notes or otherwise, shall the amount paid or agreed to be paid to
the Lenders for the use, forbearance, loaning or retention of the Advances
exceed the maximum permissible under applicable law. If from any
circumstances whatsoever, fulfillment of any provisions hereof, of the
Notes, or of any other document securing this Agreement at any time given
shall involve transcending the limit of validity prescribed by law, then,
the obligation to be fulfilled shall automatically be reduced to the limit
of such validity, and if from any circumstances the Lenders should ever
receive as interest an amount which would exceed the highest lawful rate of
interest, such amount which would be in excess of interest shall be applied
to the reduction of the principal balance secured by the Notes and not to
the payment of interest thereunder. This provision shall control every
other provision of all agreements between the Borrowers and Lenders and
shall also be binding upon and available to any subsequent holder of the
Notes.
2.16 Billing and Payment.
-------------------
2.16(a) The Credit Agent shall on or before the fifth (5th)
Business Day of each month deliver to the Borrowers xxxxxxxx for
interest due and payable for the immediately preceding month on
Advances. On or before the tenth (10th) Business Day of each month,
the Borrowers shall pay to the Credit Agent the full amount of
interest and fees billed for the immediately preceding month.
2.16(b) All payments made on account of the Obligations
shall be made by the Borrowers to the Credit Agent for distribution to
the Lenders, except for Balance Deficiency Fees, which shall be made
directly to the applicable Lender, fees payable to the Credit Agent
for its own account or for the account of the Collateral Agent, and
Letter of Credit fees payable to LaSalle. All payments made on
account of the Obligations shall be made without setoff or
counterclaim, free and clear of and without deduction for any taxes,
fees or other charges of any nature whatsoever imposed by any taxing
authority, and must be received by the Credit Agent by 12:00 noon on
the day of payment, it being expressly agreed and understood that if a
payment is received after 12:00 noon by the Credit Agent such payment
will be considered to have been made on the next succeeding Business
Day and interest thereon shall be payable by the Borrowers at the then
applicable rate during such extension. No principal payments
resulting from the sale of Pledged Mortgages or Pledged Securities
shall be deemed to have been received by the Credit Agent until the
Collateral Agent has also received the Notice required under Section
2.9(i) hereof. All payments shall be made in lawful money of the
United States of America in immediately available funds transferred
via wire to accounts designated by the Credit Agent from time to time.
If any payment required to be made by the Borrowers hereunder becomes
due and payable on a day other than a Business Day, the due date
thereof shall be extended to the next succeeding Business Day and
interest shall be payable on Advances so extended at the then
applicable rate during such extension.
2.16(c) All amounts received by Credit Agent on account of
the Obligations (except amounts received in respect of fees or
expenses payable hereunder to the Credit Agent or the Collateral Agent
for their own accounts or amounts payable to the Swingline Lender for
Swingline Advances) shall be disbursed to the Lenders by wire transfer
on the date
of receipt if received by the Credit Agent by the applicable deadlines
for payment thereof as specified in Section 2.16(b) hereof, or if
received later, by 12:00 noon on the next succeeding Business Day,
without any interest payable by the Credit Agent thereon.
3. COLLATERAL.
3.1 Appointment of Collateral Agent. Pursuant to the Collateral
-------------------------------
Agency Agreement, RFC has been appointed as Collateral Agent to act as
agent, bailee, and custodian for the exclusive benefit of itself, the
Lenders, the Credit Agent and LaSalle, as issuer of the Letters of Credit
(collectively, the "Secured Parties"), with respect to the Collateral.
3.2 Delivery of Collateral. As described in Section 2.3 hereof, and
----------------------
in the Collateral Agency Agreement, from time to time the Borrowers shall
deliver Collateral or cause Collateral to be delivered to the Collateral
Agent hereunder.
3.3 Grant of Security Interest. As security for the payment of the
--------------------------
Notes, for the payment of the Letter of Credit Obligations and for the
payment and performance of all of the other Obligations, the Borrowers
hereby assign and transfer to the Credit Agent, for the benefit of the
Secured Parties, all right, title and interest in and to, and grant a
security interest to the Credit Agent, for the benefit of the Secured
Parties, in, the following described property:
3.3(a) All Mortgage Loans, including all Mortgage Notes and
Mortgages evidencing or securing such Mortgage Loans, which from time
to time are delivered or caused to be delivered to the Collateral
Agent (including delivery to a third party on behalf of the Collateral
Agent), come into the possession, custody or control of any of the
Lenders, the Credit Agent or the Collateral Agent for the purpose of
assignment or pledge or in respect of which an Advance has been made
by the Lenders hereunder, and with respect to the Special Xxxxxx Xxx
Loans, the promissory notes evidencing the same and all of
Washington's right, title and interest in and to the Special Xxxxxx
Mae Program Agreements, and all promissory notes and other agreements,
documents and instruments executed and delivered pursuant thereto or
in connection therewith, or otherwise relating thereto and referenced
therein (the "Pledged Mortgages").
3.3(b) All Mortgage-backed Securities and Participation
Certificates which are from time to time created in whole or in part
on the basis of the Pledged Mortgages or are delivered or caused to be
delivered to, or are otherwise in the possession of the Collateral
Agent or its agent, bailee or custodian as assignee, or pledged to the
Collateral Agent, or for such purpose are registered by book-entry in
the name of, the Collateral Agent (including delivery to or
registration in the name of a third party on behalf of the Collateral
Agent, the Credit Agent or any Lender) hereunder or in respect of
which from time to time an Advance has been made by the Lenders
hereunder (the "Pledged Securities").
3.3(c) All commitments issued by the FHA to insure or
guarantee any Mortgage Loans included in the Pledged Mortgages; all
guaranties related to Pledged Securities; all Purchase Commitments
held by the Borrowers covering the Pledged Mortgages or the Pledged
Securities and all proceeds resulting from the sale thereof to
Investors pursuant thereto; and all personal property, contract
rights, servicing and servicing fees and income or other proceeds,
amounts and payments payable to the Borrowers as compensation or
reimbursement, accounts and general intangibles of whatsoever kind
relating to the Pledged Mortgages, the Pledged Securities, said FHA
commitments and the Purchase Commitments, and all other documents or
instruments relating to the Pledged Mortgages and the Pledged
Securities, including, without limitation, any interest of the
Borrowers in any fire, casualty or hazard insurance policies and any
awards made by any public body or decreed by any court of competent
jurisdiction for a taking or for degradation of value in any eminent
domain proceeding as the same relate to the Pledged Mortgages.
3.3(d) All Servicing Contracts now owned or hereafter
created or acquired by the Borrowers, other than Servicing Contracts
pursuant to which any Borrower Services Mortgage Loans for WMFCC.
3.3(e) All rights of the Borrowers to receive payments
under or by virtue of the Servicing Contracts described in Section
3.3(d) and the related Acknowledgment Agreements, whether as servicing
fees, servicing income, damages, amounts payable upon the
cancellation or termination of any such Servicing Contract, interests
on the foregoing, or otherwise.
3.3(f) Any agreement pursuant to which any Servicing Contract
described in Section 3.3(d) or the stock of any Person that owned (at
the time of acquisition or at any time thereafter) or owns any such
Servicing Contract was acquired or is sold by the Borrowers, and all
documents executed or delivered in connection with any such
acquisition or sale.
3.3(g) All accounts or general intangibles owned by the Company
for the payment of money against (i) FHA under an FHA mortgage
insurance policy insuring payment of, or any other Person under any
other agreement (including a Servicing Contract) relating to, all or
part of a defaulted Mortgage Loan repurchased by the Company from an
investor or out of a pool of Mortgage Loans serviced by the Company or
being serviced by the Company, (ii) obligors and their accounts,
Xxxxxx Xxx, Xxxxxxx Mac, Xxxxxx Xxx or any other investor under a
Servicing Contract covering, or out of the proceeds of any sale of or
foreclosure sale in respect of, any Mortgage Loan (A) repurchased by
the Company out of a pool of Mortgage Loans serviced by the Company,
or (B) being serviced by the Company, for the reimbursement of real
estate taxes or assessments, or casualty or liability insurance
premiums, paid by the Company in connection with Mortgage Loans, and
(iii) obligors and their accounts, or Xxxxxx Mae, Xxxxxxx Mac, Xxxxxx
Mae, or any other investor under or in respect of any Mortgage Loans
serviced by the Company for repayment of advances made by the Company
to cover shortages in principal and interest payments.
3.3(h) All right, title and interest of the Company in and
to any Hedging Arrangements entered into to protect the Company
against changes in the value of the Collateral, including, without
limitation, all rights to payment arising under such Hedging
Arrangements.
3.3(i) All right, title and interest of the Borrowers in
and to all escrow accounts, documents, instruments, files, surveys,
certificates, correspondence, appraisals, computer programs, tapes,
discs, cards, accounting records (including all information, records,
tapes, data, programs, discs and cards necessary or helpful in the
administration or servicing of the Collateral) and other information
and data of the Borrowers relating to the Collateral.
3.3(j) All now existing or hereafter acquired cash
delivered to or otherwise in the possession of the Credit Agent, the
Collateral Agent, any Lender or their agents, bailee or custodian or
designated on the books and records of the Borrowers as assigned and
pledged to the Credit Agent, including, without limitation, all cash
deposited in the Cash Collateral Account.
3.3(k) All cash and non-cash proceeds of the Collateral,
including all dividends, distributions and other rights in connection
with, and all additions to, modifications of and replacements for, the
Collateral, and all products and proceeds of the Collateral, together
with whatever is receivable or received when the Collateral or
proceeds thereof are sold, collected, exchanged or otherwise disposed
of, whether such disposition is voluntary or involuntary, including,
without limitation, all rights to payment with respect to any cause of
action affecting or relating to the Collateral or proceeds thereof.
The grant of the security interest under Sections 3.3(d) and 3.3(e)
above is subject and subordinate to the rights of Xxxxxx Xxx or Xxxxxx
Mae, as applicable, in and to any Servicing Contracts to which Xxxxxx
Mae or Xxxxxx Xxx is a party. The Lenders acknowledge that (i) each
Borrower is entitled to servicing income with respect to a given
Mortgage Pool only as long as such Borrower is an issuer in good
standing, (ii) upon either Borrower's loss of issuer status, the
Lenders' rights to servicing income related to the affected Mortgage
Pool(s) also terminate, and (iii) the pledge of rights to servicing
income conveys no rights (such as the right to become a substitute
servicer or issuer) that are not otherwise specifically provided for
in the applicable Xxxxxx Mae or Investor guide.
3.4 Release of Security Interest in Collateral.
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3.4(a) Pledged Mortgages shall be released from the Credit
Agent's security interest only against payment to the Credit Agent of
the Release Amount in connection with such Pledged Mortgages.
3.4(b) If Pledged Mortgages are to be transferred to a pool
custodian or to Xxxxxxx Mac or Xxxxxx Mae for inclusion in a Mortgage
Pool, the Credit Agent's security interest in such Pledged Mortgages
shall be released only against payment to the Credit Agent of the
Release Amount in connection with such Pledged Mortgages. If the
Credit Agent's security interest in the Pledged Mortgages comprising
the Mortgage Pool is not released prior to the issuance of the
Mortgage-backed Security or Participation Certificate, then the
Mortgage-backed Security or Participation Certificate, when issued,
shall be a Pledged Security. The Credit Agent's security interest
shall continue in such Pledged Mortgages and the Pledged Security.
The Credit Agent shall be entitled to possession of such Pledged
Security in the manner provided below.
3.4(c) If Pledged Mortgages are transferred to an Approved
Custodian and included in an Eligible Mortgage Pool, the Credit
Agent's security interest in the Pledged Mortgages comprising the
Eligible Mortgage Pool shall be released upon the issuance of the
Agency Security, which shall be a Pledged Security. The Credit
Agent's security interest in such Pledged Security shall be released
only against payment to the Credit Agent of the Release Amount in
connection with the Pledged Mortgages backing such Pledged Security.
The Credit Agent shall be entitled to possession of such Pledged
Security in the manner provided below.
3.4(d) The Collateral Agent shall have the exclusive right
to the possession of the Pledged Securities or, if the Pledged
Securities are issued in book-entry form or issued in certificated
form and delivered to a clearing corporation (as such term is defined
in the Uniform Commercial Code of Minnesota) or its nominee, the
Credit Agent shall have the right to have the Pledged Securities
registered in the name of a securities intermediary (as such term is
defined in the Uniform Commercial Code of Minnesota) in an account
containing only customer securities and credited to an account of the
Credit Agent, and the Credit Agent shall have the right to cause
delivery of the Pledged Securities to be made to the Investor or the
Pledged Securities credited to the account of the Investor or the
Investor's designee only against payment therefor. The Borrowers
acknowledge that the Credit Agent may enter into one or more standing
arrangements with other financial institutions with respect to Pledged
Securities issued in book entry form or issued in certificated form
and delivered to a clearing corporation, pursuant to which such
Pledged
Securities are registered in the name of such financial institution,
as agent or securities intermediary for the Credit Agent, and the
Borrowers agree upon request of the Lender, to execute and deliver to
such other financial institutions the Borrowers' written concurrence
in any such standing arrangements.
3.4(e) Prior to the occurrence of an Event of Default, the
Borrowers may redeem a Pledged Mortgage or Pledged Security from the
Credit Agent's security interest by notifying the Credit Agent of its
intention to redeem such Pledged Mortgage or Pledged Security from
pledge and either (a) paying, or causing an Investor to pay, to the
Credit Agent, for application to prepayment of the principal balance
of the Notes, the Release Amount in connection with such Pledged
Mortgage or Pledged Security, or (b) delivering substitute Collateral
which, in addition to being acceptable to the Collateral Agent in its
sole discretion will, when included with the Collateral, result in a
Collateral Value of all Warehousing Collateral held by the Collateral
Agent which is at least equal to the aggregate outstanding Warehousing
Advances (other than P&I Advances and Liquidity Advances).
3.4(f) Following the occurrence of a Default or Event of
Default, unless otherwise instructed by the Majority Lenders, the
Credit Agent may, with no liability to the Borrowers, the Secured
Parties or any Person, continue to release its security interest in
any Pledged Mortgage or Pledged Security against payment of the
Release Amount in connection with such Pledged Mortgage or Pledged
Security. Following the occurrence of a Default or Event of Default,
at the direction of all the Lenders and with no liability to
Borrowers, the Secured Parties or any Person, the Credit Agent shall
refuse to release its security interest in any item of Collateral and
shall instruct the Collateral Agent to cease the delivery of
Collateral to the Borrowers or any Person.
3.4(g) The Release Amount in connection with any Pledged
Mortgage shall be (i) prior to the occurrence of an Event of Default
and the receipt by the Credit Agent of instructions from the Majority
Lenders to exercise its remedies as provided in Section 8.2(c) hereof,
the principal amount of the Warehousing Advances made against such
Pledged Mortgage, and (ii) from and after the occurrence and
during the continuance of an Event of Default and receipt by the
Credit Agent of instructions from the Majority Lenders to exercise its
remedies as provided in Section 8.2(c) hereof, the Committed Purchase
Price of such Pledged Mortgage or, if there is no Purchase Commitment
therefor, the amount paid to the Credit Agent in a commercially
reasonable disposition thereof.
3.4(h) Servicing Contracts included in the Servicing
Collateral (but not the proceeds thereof) shall be released from the
Credit Agent's security interest in connection with any sale of such
Servicing Contracts permitted pursuant to Section 7.2 hereof.
3.5 Delivery of Additional Collateral or Mandatory Prepayment. At
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any time that the aggregate Collateral Value of the Pledged Mortgages and
Pledged Securities then pledged hereunder is less than the aggregate amount
of the Warehousing Advances then outstanding hereunder, the Credit Agent
may request, and the Borrowers shall within two (2) Business Days after
Notice by the Credit Agent (a) deliver to the Collateral Agent for pledge
hereunder additional Mortgage Loans and/or cash, with a Collateral Value
sufficient to cover the difference between the Collateral Value of the
Pledged Mortgages and Pledged Securities and the aggregate amount of
Warehousing Advances outstanding hereunder, and/or (b) repay the
Warehousing Advances in an amount sufficient to reduce the aggregate
balance thereof outstanding to or below the Collateral Value of the Pledged
Mortgages and Pledged Securities hereunder.
3.6 Release of Collateral.
---------------------
3.6(a) The Collateral Agent may deliver documents relating
to the Collateral to the Borrowers for correction or completion
pursuant to a Trust Receipt and Section 4.3 of the Collateral Agency
Agreement.
3.6(b) Prior to the occurrence of an Event of Default, upon
delivery by the Borrowers to the Collateral Agent of shipping
instructions pursuant to Exhibit D-MF/CONV/DUS, Exhibit D-MF/FHA or
--------------------- ----------------
Exhibit D-MF/SFNMA, the Collateral Agent will transmit Pledged
------------------
Mortgages or Pledged Securities and all related loan documents or pool
documents to the applicable Investor, Approved Custodian or other
party in accordance with Section 4.4 of the Collateral Agency
Agreement.
3.6(c) Upon receipt of Notice from the Borrowers under
Section 2.9(i) hereof, and repayment of the Release Amount with
respect to a Pledged Mortgage or a Mortgage Loan backing a Pledged
Security identified by the Borrowers, any Collateral Documents
relating to the redeemed Pledged Mortgage or Mortgage Loan backing a
Pledged Security which have not been delivered to an Investor or
Approved Custodian shall be released by the Collateral Agent to the
Borrowers.
3.7 Collection and Servicing Rights. So long as no Event of Default
-------------------------------
shall have occurred and be continuing, the Borrowers shall be entitled to
service and receive and collect directly all sums payable to the Borrowers
in respect of the Collateral other than proceeds of any Purchase Commitment
or proceeds of the sale of any Collateral. Following the occurrence of any
Event of Default, the Credit Agent or its designee shall thereafter be
entitled to service and receive and collect all sums payable to the
Borrowers in respect of the Collateral, and in such case (a) the Credit
Agent or its designee in its sole discretion may, in its own name, in the
name of the Borrowers or otherwise, demand, xxx for, collect or receive any
money or property at any time payable or receivable on account of or in
exchange for any of the Collateral, but shall be under no obligation to do
so, (b) the Borrowers shall, if the Credit Agent so requests, forthwith pay
to the Credit Agent at its office designated by Notice hereunder, all
amounts thereafter received by the Borrowers upon or in respect of any of
the Collateral, advising the Credit Agent as to the source of such funds,
and (c) all amounts so received and collected by the Credit Agent shall be
held by it in the Cash Collateral Account as part of the Collateral.
3.8 Collection of Receivables.
-------------------------
3.8(a) From and after the occurrence of an Event of
Default, whether or not such Event of Default shall have been cured or
waived for other purposes, the Credit Agent may, and at the direction
of the Majority Warehousing Lenders shall, require the Company to, and
thereupon the Company shall, require that all payments in respect of
Receivables (i) if made by check or other payment item, be made to a
post office box under the exclusive control of the Credit Agent or its
designees (the "Lock Box"), and (ii) if made by wire transfer or other
method of inter-bank funds transfer, be made by transfer to a deposit
account at a bank acceptable to the Credit Agent (the "Lock Box Bank")
under the exclusive control of the
Credit Agent (the "Lock Box Account"). The Company may not modify or
revoke any such requirement or modify any agreement relating to the
Lock Box or the Lock Box Account without the consent of the Credit
Agent. The Credit Agent or its designee shall cause all checks or
payment items received in the Lock Box to be deposited into the Lock
Box Account.
3.8(b) Following the occurrence and during the continuance
of an Event of Default, the Credit Agent may hold all amounts on
deposit in the Lock Box Account as Collateral for the Obligations,
withdraw all amounts on deposit in the Lock Box Account and apply such
amounts to the Obligations as provided in Section 8.3 below or, with
the consent of the Majority Warehousing Lenders, deposit such amounts
into the Operating Account. Prior to the occurrence of an Event of
Default, or after all Events of Default that have occurred have been
cured or waived in accordance with this Agreement, the Credit Agent
shall transfer all amounts deposited into the Lock Box Account into
the Operating Account.
3.9 Return of Collateral at Maturity. If (a) the Commitments shall
--------------------------------
have expired or been terminated, (b) no Advances, interest or other
Obligations shall be outstanding and unpaid, and (c) no Letters of Credit
remain outstanding and no Letter of Credit Obligations remain unpaid, the
Credit Agent shall release its security interest and the Collateral Agent
shall deliver all Collateral in its possession to the Borrowers at the
Borrowers' expense. The receipt of the Borrowers for any Collateral
released or delivered to the Borrowers pursuant to any provision of this
Agreement shall be a complete and full acquittance for the Collateral so
returned, and the Secured Parties shall thereafter be discharged from any
liability or responsibility therefor.
4. CONDITIONS PRECEDENT.
4.1 Initial Advances. The obligation of the Lenders to make the
----------------
initial Advance under this Agreement is subject to the satisfaction, in the
sole discretion of the Credit Agent, on or before the date thereof, of the
following conditions precedent:
4.1(a) The Credit Agent shall have received the following,
all of which must be satisfactory in form and content to the Credit
Agent, in its sole discretion:
(1) This Agreement duly executed by all
parties hereto.
(2) The Notes duly executed by the
Borrowers.
(3) The Collateral Agency Agreement duly
executed by all parties thereto.
(4) The Borrowers' articles of incorporation
as certified by the Secretary of State of the State of each
Borrowers' incorporation, bylaws certified by the corporate
secretary of each Borrower, or a Certificate of each of the
Borrowers stating that there have been no change in either its
articles of incorporation or bylaws since those delivered in
connection with the Existing Credit Agreement, and certificates
of good standing dated no less recently than thirty (30) days
prior to the date of this Agreement for each Borrower.
(5) A resolution of the board of directors
of each of the Borrowers, certified as of the date of this
Agreement by each of the Borrowers' corporate secretary,
authorizing the execution, delivery and performance of this
Agreement and the other Loan Documents, and all other instruments
or documents to be delivered by the Borrowers pursuant to this
Agreement.
(6) A certificate of the Borrowers'
corporate secretary as to the incumbency and authenticity of the
signatures of the officers of the Borrowers executing this
Agreement and the other Loan Documents and each Advance Request
and all other instruments or documents to be delivered pursuant
hereto (the Credit Agent being entitled to rely thereon until a
new such certificate has been furnished to the Credit Agent).
(7) A favorable written opinion of counsel
to the Borrowers, dated as of the date of this Agreement and
substantially in the form of Exhibit H attached hereto, addressed
---------
to the Credit Agent and the Lenders.
(8) With respect to each Special Xxxxxx Mae
Program Agreement described on Exhibit Q hereto, to the extent
---------
not previously delivered pursuant to the Existing Credit
Agreement, (i) an executed copy of such Special Xxxxxx Xxx
Program Agreement, (ii) executed copies of the promissory note(s)
evidencing the Special Xxxxxx Mae Loans made thereunder, (iii) an
executed copy of the Xxxxxx Xxx Special Pool Purchase Contract
relating thereto, and (iv) an executed original of a bailee
agreement with respect to any of the promissory notes described
in clause (ii) above that have been delivered to Xxxxxx Mae, in
form and substance satisfactory to the Credit Agent.
(9) Uniform Commercial Code, tax lien and
judgment searches of the appropriate public records in the
jurisdictions where each Borrower has an office, which search
shall not have disclosed the existence of any prior Lien on the
Collateral other than in favor of the Credit Agent or as
permitted hereunder.
(10) Executed financing statements or
amendments to financing statements previously filed against the
Borrowers, in recordable form covering the Collateral and ready
for filing in all jurisdictions required by the Credit Agent.
(11) Copies of the certificates, documents or
other written instruments which evidence the Borrowers'
eligibility described in Section 5.13 hereof, all in form and
substance satisfactory to the Credit Agent.
(12) Copies of the Borrowers' errors and
omissions insurance policy or mortgage impairment insurance
policy and blanket bond coverage policy, or certificates in lieu
of policies, all in form and content satisfactory to the Credit
Agent, showing compliance by the Borrowers as of the date of this
Agreement with the related provisions of Section 6.8 hereof.
(13) Evidence that all accounts necessary
into which Advances will be funded have been established at the
Funding Bank
and receipt of a fully executed Funding Bank Agreement.
4.1(b) All directors, officers and shareholders of the
Borrowers, all Affiliates of the Borrowers or of any Subsidiary of the
Borrowers, to whom or to any of whom the Borrowers shall be indebted
as of the date of this Agreement, which indebtedness has a term of
more than one (1) year or is in excess of Five Hundred Thousand
Dollars ($500,000) shall have subordinated such indebtedness to the
Obligations, by executing a Subordination of Debt Agreement, in the
form of Exhibit F hereto; and the Credit Agent shall have received an
---------
executed copy of any such Subordination of Debt Agreement, certified
by the corporate secretary of the Borrowers to be true and complete
and in full force and effect as of the date of the Advance.
4.1(c) After giving effect to the application of all
Advances made on the Closing Date, all of the Borrowers' "Obligations"
(as defined in the Existing Credit Agreement) shall have been repaid
in full and the Credit Agent shall have received satisfactory evidence
thereof.
4.2 Each Advance. The obligation of the Lenders to make the initial
------------
and each subsequent Advance under this Agreement is subject to the
satisfaction, in the sole discretion of the Credit Agent, as of the date of
each such Advance, of the following additional conditions precedent:
4.2(a) The Borrowers shall have delivered to the
Credit Agent the original Advance Request, and the Borrowers shall
have delivered to the Collateral Agent a copy of the Advance Request,
and the Collateral Documents, called for under, and shall have
satisfied the procedures set forth in, Section 2.3 hereof and the
applicable Exhibits hereto described in that Section, according to the
type of the requested Advance. All items delivered to the Credit Agent
or the Collateral Agent, as the case may be, shall be satisfactory to
the Credit Agent or the Collateral Agent, in form and content, and the
Credit Agent or the Collateral Agent, as the case may be, may reject
such of them as do not meet the requirements of this Agreement or of
the related Purchase Commitment.
4.2(b) The Collateral Agent shall have given
telephonic notice to the Credit Agent of the
Mortgage Loans against which Advances may be made, followed by a Loans
Warehoused Report as provided for and defined in the Collateral Agency
Agreement.
4.2(c) The Credit Agent shall have received evidence
satisfactory to it as to the making and/or continuation of any book
entry or the due filing and recording in all appropriate offices of
all financing statements and other instruments as may be necessary to
perfect the security interest of the Credit Agent in the Collateral
under the Uniform Commercial Code or other applicable law.
4.2(d) The representations and warranties of the
Borrowers contained in Article 5 hereof shall be accurate and complete
in all material respects as if made on and as of the date of each
Advance.
4.2(e) The Borrowers shall have performed all
agreements to be performed by them hereunder, and after giving effect
to the requested Advance, there shall exist no Default or Event of
Default hereunder.
4.2(f) The Borrowers shall not have incurred any
material liabilities, direct or contingent, other than in the ordinary
course of its business, since the Statement Date.
4.2(g) The Credit Agent shall have received from
counsel for the Borrowers, if requested by the Credit Agent in its
sole discretion, an updated opinion, in form and substance
satisfactory to the Credit Agent, addressed to the Credit Agent and
the Lenders and dated as of the date of such Advance, covering such of
the matters as the Credit Agent may reasonably request.
Delivery of an Advance Request by the Borrowers shall be deemed a
representation by the Borrowers that all conditions set forth in this
Section 4.2 shall have been satisfied as of the date of such Advance.
4.3 New Subsidiary Borrowers. WMF Group may, at any time, amend
------------------------
Exhibit P to add any direct or indirect Subsidiary of WMF Group as a
---------
Borrower hereunder (provided, that the addition of such Subsidiary as a
Borrower would not result in a breach of Section 8.1(n) hereof); provided,
that the effectiveness of any such amendment to Exhibit P, and of
---------
the addition of any such direct or indirect Subsidiary of WMF Group as a
Borrower hereunder, shall be subject to the following conditions precedent:
4.3(a) The Credit Agent shall have received the
following, all of which must be in form and content satisfactory to
the Credit Agent, in its sole discretion:
(1) A Borrower Addition Agreement, duly executed
by WMF Group (on behalf of the Borrowers) and the wholly-owned
Subsidiary to be added as a Borrower hereunder (the "New
Borrower").
(2) Certified copies of the New Borrower's
articles of incorporation and bylaws or other organizational
documents, and certificates of good standing dated no less
recently than thirty (30) days prior to the date of the Borrower
Addition Agreement.
(3) A copy of resolutions of the board of
directors or other governing authority of the New Borrower,
certified as of the date of the Borrower Addition Agreement by
its corporate secretary (or the equivalent), authorizing the
execution, delivery and performance of the Borrower Addition
Agreement (and thereby the assumption of the Obligations under
the Loan Documents) and all other instruments or documents to be
delivered by the New Borrower pursuant to this Agreement and the
Borrower Addition Agreement (including, without limitation, the
Notes contemplated pursuant to Section 4.3(b)).
(4) A certificate of the corporate secretary (or
the equivalent) of the New Borrower, as to the incumbency and
authenticity of the signatures of the officers of the New
Borrower executing the Borrower Addition Agreement, and all other
instruments or documents to be delivered by such New Borrower
pursuant to the Borrower Addition Agreement and this Agreement
(the Credit Agent being entitled to rely thereon until a new such
certificate has been furnished to the Credit Agent).
(5) A tax, lien and judgment search of the
appropriate public records for the
New Borrower in the States where its chief executive office is
located, including a search of Uniform Commercial Code financing
statements, which search shall not have disclosed the existence
of any prior Lien on the Collateral other than in favor of the
Credit Agent, for the benefit of the Secured Parties, or as
permitted hereunder.
(6) Executed financing statements in recordable
form naming the New Borrower as debtor, covering the Collateral
and ready for filing in all jurisdictions required by the Credit
Agent.
(7) Copies of the certificates, documents or
other written instruments which evidence the New Borrower's
status as a mortgagee, seller, servicer or issuer with HUD,
Xxxxxx Xxx and the applicable Investors all in form and substance
satisfactory to the Lender.
(8) Copies of the New Borrower's errors and
omissions insurance policy or mortgage impairment insurance
policy and blanket bond coverage policy, or certificates in lieu
of such policies or naming the new Borrower as an insured under
the existing Borrowers' policies, all in form and content
satisfactory to the Credit Agent, showing compliance by the New
Borrower as of the date of the Borrower Addition Agreement with
the related provisions of Section 6.8 hereof.
(9) Funding Bank Agreements in the forms attached
to this Agreement, executed by the New Borrower.
4.3(b) The representations and warranties of the
Borrowers contained in Article 5 hereof shall be accurate and complete
in all material respects as if made on and as of the date of, and
after giving effect to, the Borrower Addition Agreement.
4.3(c) The Borrowers shall have performed all agreements
to be performed by them hereunder, and after giving effect to the
addition of the New Borrower hereunder, there shall exist no Default
or Event of Default hereunder.
4.3(d) The Borrowers shall not have incurred any material
liabilities, direct or contingent, other than in the ordinary course
of their business, since the Statement Date.
4.3(e) If requested by the Credit Agent, the Lenders
shall have received from counsel for the Borrowers an updated opinion,
in form and substance satisfactory to the Credit Agent, addressed to
the Credit Agent and the Lenders and dated as of the date of the
Borrower Addition Agreement, covering such of the matters set forth
on Exhibit H hereto as the Credit Agent may reasonably request.
---------
Each of the Borrowers (including, without limitation, any Borrower that
becomes a party hereto pursuant to a Borrower Addition Agreement) hereby
authorizes WMF Group, on behalf of the Borrowers, to execute and deliver
Borrower Addition Agreements on behalf of all of the Borrowers.
4.4 New Xxxxxx Mae Special Program Agreements. Washington may, at
-----------------------------------------
any time with the prior written consent of the Credit Agent, amend Exhibit
-------
Q to add any Special Xxxxxx Xxx Program Agreement thereto; provided, that
-
the effectiveness of any such amendment to Exhibit Q, and the obligation of
---------
the Lenders to make Warehousing Advances against Special Xxxxxx Mae Loans
made thereunder, shall be subject to the following conditions precedent:
4.4(a) The representations and warranties of the Borrowers
contained in Article 5 hereof shall be accurate and complete in all
material respects as if made on and as of the date of, and after
giving effect to, the amendment to Exhibit Q hereto.
---------
4.4(b) The Borrowers shall have performed all agreements to
be performed by them hereunder, and there shall exist no Default or
Event of Default hereunder.
4.4(c) The Borrowers shall not have incurred any material
liabilities, direct or contingent, other than in the ordinary course
of their business, since the Statement Date.
4.4(d) If requested by any Lender holding a Warehousing
Commitment, the Lenders shall have received from counsel for the
Borrowers an updated opinion, in form and substance satisfactory to
the Credit Agent, addressed to the Credit Agent and the
Lenders and dated the date of the amendment to Exhibit Q hereto,
---------
covering such matters relating to the Special Xxxxxx Xxx Program
Agreement and related documents as any Lender may reasonably request.
The Credit Agent shall promptly notify the other Lenders holding
Warehousing Commitments of any such amendment to Exhibit Q.
---------
5. REPRESENTATIONS AND WARRANTIES.
The Borrowers hereby represent and warrant to the Lenders, as of the
date of this Agreement and as of the date of each Advance Request and the
making of each Advance, that:
5.1 Organization; Good Standing; Subsidiaries. Each of the Borrowers
-----------------------------------------
and each Subsidiary of the Borrowers is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its incorporation, has the full legal power and authority to own its
property and to carry on its business as currently conducted and is duly
qualified as a foreign corporation to do business and is in good standing
in each jurisdiction in which the transaction of its business makes such
qualification necessary, except in jurisdictions, if any, where a failure
to be in good standing has no material adverse effect on the business,
operations, assets or financial condition of the Borrowers or any such
Subsidiary. For the purposes hereof, good standing shall include
qualification for any and all licenses and payment of any and all taxes
required in the jurisdiction of its incorporation and in each jurisdiction
in which the Borrowers, transacts business. The Borrowers have no
Subsidiaries except as set forth on Exhibit G hereto. Exhibit G sets forth
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with respect to each such Subsidiary, its name, address, place of
incorporation, each state in which it is qualified as a foreign
corporation, and the percentage ownership of its capital stock by the
Borrowers.
5.2 Authorization and Enforceability. The Borrowers have the power
--------------------------------
and authority to execute, deliver and perform this Agreement, the Notes and
all other Loan Documents to which the Borrowers are a party and to make the
borrowings hereunder. The execution, delivery and performance by the
Borrowers of this Agreement, the Notes and all other Loan Documents to
which the Borrowers are a party and the making of the borrowings hereunder
and thereunder, have been duly and validly authorized by all necessary
corporate action on the part of the Borrowers (none of which actions has
been
modified or rescinded, and all of which actions are in full force and
effect) and do not and will not conflict with or violate any provision of
law, of any judgments binding upon the Borrowers, or of the articles of
incorporation or by-laws of the Borrowers, conflict with or result in a
breach of or constitute a default or require any consent under, or result
in the creation of any Lien upon any property or assets of the Borrowers
other than the Lien on the Collateral granted hereunder, or result in or
require the acceleration of any indebtedness of the Borrowers pursuant to
any agreement, instrument or indenture to which the Borrowers are a party
or by which the Borrowers or their property may be bound or affected. This
Agreement, the Notes, the Collateral Agency Agreement and all other Loan
Documents contemplated hereby or thereby constitute legal, valid, and
binding obligations of the Borrowers, enforceable in accordance with their
respective terms, except as limited by bankruptcy, insolvency or other such
laws affecting the enforcement of creditors' rights generally and general
principles of equity.
5.3 Approvals. The execution and delivery of this Agreement, the
---------
Notes and all other Loan Documents and the performance of the Borrowers'
obligations hereunder and thereunder and validity and enforceability hereof
and thereof do not require any license, consent, approval or other action
of any state or federal agency or governmental or regulatory authority
other than those which have been obtained and remain in full force and
effect.
5.4 Financial Condition. The balance sheet of WMF Group and its
-------------------
Subsidiaries, on a consolidated basis, as of the Statement Date, and the
related statements of income and changes in stockholders' equity for the
fiscal period ended on the Statement Date, heretofore furnished to each
Lender, fairly present the financial condition of WMF Group and its
Subsidiaries as of the Statement Date and the results of its operations for
the fiscal period ended on the Statement Date. The Borrowers had, on the
Statement Date, no known material liabilities, direct or indirect, fixed or
contingent, matured or unmatured, or liabilities for taxes, long-term
leases or unusual forward or long-term commitments not disclosed by, or
reserved against in, said balance sheet and related statements, and at the
present time there are no material unrealized or anticipated losses from
any loans, advances or other commitments of the Borrowers except as
heretofore disclosed to the Lenders in writing. Said financial statements
were prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved. Since the Statement Date, there has been
no
material adverse change in the business, operations, assets or financial
condition of the Borrowers (and their Subsidiaries), nor are the Borrowers
aware of any state of facts which (with or without notice or lapse of time
or both) would or could result in any such material adverse change.
5.5 Litigation. Except as set forth on Exhibit T hereto, there are
---------- ---------
no actions, claims, suits or proceedings pending or, to the knowledge of
the Borrowers, threatened or reasonably anticipated against or affecting
the Borrowers or any Subsidiary of the Borrowers in any court or before any
arbitrator or before any government commission, board, bureau or other
administrative agency which, if adversely determined, may reasonably be
expected to result in any material and adverse change in the business,
operations, assets or financial condition of the Borrowers as a whole, or
which would affect the validity or enforceability of this Agreement, the
Notes or any other Loan Document.
5.6 Compliance with Laws. None of the Borrowers and none of their
--------------------
Subsidiaries is in violation of any provision of any law, or of any
judgment, award, rule, regulation, order, decree, writ or injunction of any
court or public regulatory body or authority which might have a material
adverse effect on the business, operations, assets or financial condition
of the Borrowers and their Subsidiaries as a whole or which would affect
the validity or enforceability of this Agreement, the Notes or any other
Loan Document.
5.7 Regulation U. The Borrowers are not engaged principally, or as
------------
one of their important activities, in the business of extending credit for
the purpose of purchasing or carrying Margin Stock, and no part of the
proceeds of any Advances made hereunder will be used to purchase or carry
any Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock.
5.8 Investment Company Act. None of the Borrowers is an "investment
----------------------
company" or controlled by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
5.9 Payment of Taxes. The Borrowers and each of their Subsidiaries
----------------
have filed or caused to be filed all federal, state and local income,
excise, property and other tax returns with respect to the operations of
the Borrowers and their Subsidiaries which are required to be filed, all
such returns are true and correct, and the Borrowers and each of
their Subsidiaries have paid or caused to be paid all taxes as shown on
such returns or on any assessment, including, but not limited to, all FICA
payments and withholding taxes, if appropriate, to the extent that such
taxes have become due. The amounts reserved as a liability for income and
other taxes payable in the financial statements described in Section 5.4
hereof are sufficient pursuant to GAAP for payment of all unpaid federal,
state and local income, excise, property and other taxes, whether or not
disputed, of the Borrowers and their Subsidiaries accrued for or applicable
to the period and on the dates of such financial statements and all years
and periods prior thereto and for which either Borrower or any of their
Subsidiaries may be liable in their own right or as transferee of the
assets of, or as successor to, any other Person. No tax Liens have been
filed and no material claims are being asserted with respect to any such
taxes, fees or charges.
5.10 Agreements. None of the Borrowers and none of their
----------
Subsidiaries, except WMFCC, is a party to any agreement, instrument or
indenture or subject to any restriction materially and adversely affecting
its business, operations, assets or financial condition, except as
disclosed in the financial statements described in Section 5.4 hereof.
None of the Borrowers and none of their Subsidiaries, except WMFCC, is in
default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement,
instrument, or indenture which default could have a material adverse effect
on the business, operations, properties or financial condition of the
Borrowers and their Subsidiaries as a whole. No holder of any indebtedness
of any of the Borrowers or any of their Subsidiaries has given notice of
any asserted default thereunder, and no liquidation or dissolution of any
of the Borrowers or of any of their Subsidiaries, and no receivership,
insolvency, bankruptcy, reorganization or other similar proceedings
relative to any of the Borrowers, any of their Subsidiaries or any of their
properties, is pending or threatened.
5.11 Title to Properties. Each of the Borrowers and each Subsidiary
-------------------
of the Borrowers has good, valid, insurable (in the case of real property)
and marketable title to all of its properties and assets (whether real or
personal, tangible or intangible) reflected on the financial statements
described in Section 5.4 hereof, except for such properties and assets as
have been disposed of since the date of such financial statements as no
longer used or useful in the conduct of its business or as have been
disposed of in the ordinary course of business, and all such
properties and assets are free and clear of all Liens except as disclosed
in such financial statements.
5.12 ERISA. All plans ("Plans") of a type described in Section 3(3)
-----
of ERISA in respect of which any of the Borrowers or any Subsidiary of the
Borrowers is an "Employer," as defined in Section 3(5) of ERISA, are in
substantial compliance with ERISA, and none of such Plans is insolvent or
in reorganization, has an accumulated or waived funding deficiency within
the meaning of Section 412 of the Internal Revenue Code, and none of the
Borrowers and none of their Subsidiaries has incurred any material
liability (including any material contingent liability) to or on account of
any such Plan pursuant to Sections 4062, 4063, 4064, 4201 or 4204 of ERISA;
and no proceedings have been instituted to terminate any such Plan, and no
condition exists which presents a material risk to any of the Borrowers or
any of their Subsidiaries of incurring a liability to or on account of any
such Plan pursuant to any of the foregoing Sections of ERISA. No Plan or
trust forming a part thereof has been terminated since September 1, 1974.
5.13 Eligibility. The Borrowers are approved and qualified and in
-----------
good standing as a lender or seller/servicer, as set forth in Exhibit R
---------
attached hereto, and meet all requirements applicable to its status as
such.
5.14 Place of Business. The chief executive office and principal
-----------------
place of business of WMF Group and Washington is 0000 Xxxxxx Xxxx Xxxx,
Xxxxx 000, Xxxxxx, Xxxxxxxx 00000. The chief executive office and
principal place of business of Xxxxxxx is 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxx
Xxxxxx 00000. The chief executive office and principal place of business
of Xxxxxxx is 0000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx, Xxxxxxxx
00000. The principal place of business of Xxxxxx is 00 Xxxxx Xxxxxx Xxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000. The principal place of business of
Xxxxxx-Arizona is 0000 X. 00xx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000.
The principal place of business of Carbon Mesa is 00000 Xxxxxxxx Xxxxxxxxx,
Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000.
5.15 Special Representations Concerning Warehousing Collateral. The
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Borrowers hereby represent and warrant to the Lenders, as of the date of
this Agreement and as of the date of each Advance Request and the making of
each Advance, that:
5.15(a) The applicable Borrower is the legal and equitable
owner and holder, free and clear of all Liens (other than Liens
granted hereunder), of the Pledged Mortgages and the Pledged
Securities. All Pledged Mortgages, Pledged Securities and Purchase
Commitments have been duly authorized and validly issued to the
Borrowers, and all of the foregoing items of Collateral comply with
all of the requirements of this Agreement, and have been and will
continue to be validly pledged or assigned to the Credit Agent,
subject to no other Liens.
5.15(b) Each Borrower has, and will continue to have, the
full right, power and authority to pledge the Collateral pledged and
to be pledged by it hereunder.
5.15(c) Any Mortgage Loan and any related document included
in the Pledged Mortgages (1) has been duly executed and delivered by
the parties thereto at a closing held not more than thirty (30) days
prior to the date of the initial Warehousing Advance Request for such
Mortgage Loan, except with respect to a Warehousing Advance Request
for a Special Xxxxxx Mae Advance or the Warehousing Advance Request
made for Warehousing Advances to refinance Existing Agreement
Warehousing Advances, (2) has been made in compliance with all
applicable requirements of the Real Estate Settlement Procedures Act,
Equal Credit Opportunity Act, the federal Truth-In-Lending Act and all
other applicable laws and regulations, (3) is and will continue to be
valid and enforceable in accordance with its terms, without defense or
offset, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, receivership, moratorium or
other laws affecting the enforcement of creditors' rights and by
general principles of equity (regardless of whether such enforcement
is considered in a proceeding at law or in equity), (4) has not been
modified or amended except in writing, which writing is part of the
Collateral Documents, nor any requirements thereof waived, (5) has
been evaluated or appraised in accordance with Title XI of FIRREA and
industry standards, and (6) complies and will continue to comply with
the terms of this Agreement and the related Purchase Commitment.
Except for FHA Construction Mortgage Loans and Special Xxxxxx Xxx
Loans, each Mortgage Loan has been fully advanced in the face amount
thereof. Each First Mortgage is a first Lien on the premises
described therein and each Second Mortgage
is a second Lien on the premises described therein, and has or will
have a title insurance policy, in American Land Title Association form
or equivalent thereof, from a recognized title insurance company,
insuring the priority of the Lien of the Mortgage and meeting the
usual requirements of Investors purchasing such Mortgage Loans. Each
premises securing a Pledged Mortgage is free and clear of all tax
liens and assessments (except for Liens for taxes and assessments not
yet delinquent or accruing interest or penalties).
5.15(d) No default has occurred and is continuing for more
than sixty (60) days under any Mortgage Loan included in the Pledged
Mortgages without the Advance against such Pledged Mortgage having
been repaid in accordance with Section 2.10(f)(7) hereof; provided,
however, that, with respect to Pledged Mortgages which have already
been pledged as Collateral hereunder, if any default has occurred, the
Borrowers will promptly notify the Credit Agent.
5.15(e) The Borrowers have complied and will continue to
comply with all laws, rules and regulations in respect of the FHA
insurance of each Mortgage Loan included in the Pledged Mortgages
designated by the Borrowers as an FHA insured Mortgage Loan, and such
insurance is and will continue to be in full force and effect.
5.15(f) Each premises securing a Pledged Mortgage is
insured by an "all-risks" or "fire and extended perils" insurance
policy issued by an insurer satisfactory to the Lender, and all such
insurance policies (1) name and will continue to name the applicable
Borrower and its successors and assigns as the insured under a
standard mortgagee clause, (2) are and will continue to be in full
force and effect, and (3) afford and will continue to afford insurance
against fire and such other risks as are usually insured against in
the broad form of extended coverage insurance from time to time
available.
5.15(g) Pledged Mortgages secured by premises located in a
special flood hazard area designated as such by the Director of the
Federal Emergency Management Agency are and shall continue to be
covered by special flood insurance under the National Flood Insurance
Program. Pledged Mortgages that are Commercial Mortgage Loans have
insurance covering earthquake risk from an insurer and on terms and
conditions satisfying the requirements of Standard
& Poor's Ratings Service for inclusion in a Commercial Mortgage-backed
Security.
5.15(h) Each FHA insured Mortgage Loan pledged hereunder
meets all applicable governmental requirements for such insurance.
Each Pledged Mortgage against which an Advance is made on the basis of
a Purchase Commitment meets all requirements of such Purchase
Commitment. The Borrowers shall assure that Pledged Mortgages which
are intended to be used in the formation of Mortgage-backed Securities
or asset-backed securities shall comply or, prior to the formation of
any such Mortgage-backed Security or asset-backed securities, shall
comply with the requirements of the governmental instrumentality,
department or agency issuing or guaranteeing such Mortgage-backed
Security or at least one Investor that purchases similar Mortgage
Loans for securitization and two Rating Agencies.
5.15(i) For Pledged Mortgages which will be used to back
Xxxxxx Xxx Mortgage-backed Securities, the applicable Borrower has
received from Xxxxxx Mae a Confirmation Notice or Confirmation Notices
for Request Additional Commitment Authority and for Request Pool
Numbers, and there remains available thereunder a commitment on the
part of Xxxxxx Xxx sufficient to permit the issuance of Xxxxxx Mae
Mortgage-backed Securities in an amount at least equal to the amount
of such Pledged Mortgages designated by the Borrowers as the Mortgage
Loans to be used to back such Xxxxxx Xxx Mortgage-backed Securities;
each such Confirmation Notice is in full force and effect; each of
such Pledged Mortgages has been assigned by the Borrowers to one of
such Pool Numbers and a portion of the available Xxxxxx Mae Commitment
has been allocated thereto by the Borrowers, in an amount at least
equal to such Pledged Mortgages; and each such assignment and
allocation has been reflected in the books and records of the
Borrowers.
5.15(j) At the time of any Advance to Washington against a
Special Xxxxxx Xxx Loan, (i) the related Special Xxxxxx Mae Program
Agreement and the promissory note(s) evidencing such Special Xxxxxx
Mae Loan are in full force and effect and constitute the legal, valid
and binding obligations of the parties thereto, enforceable against
such parties in accordance with their terms, (ii) all of the Mortgages
and pledges of Mortgage Notes securing such Special Xxxxxx Xxx Loans
under the related Special Xxxxxx Mae Program Agreement are in full
force and effect, constitute the legal, valid and binding obligations
of the parties thereto, enforceable against such parties in accordance
with their terms, and, in the case of Mortgages, constitute valid,
perfected first priority Liens on the underlying property, subject
only to Liens specified as exceptions in the original title insurance
policy related thereto and Liens in favor of Washington in connection
with the same Special Xxxxxx Xxx Program Agreement, and in the case of
pledges of Mortgage Notes, constitute a valid, perfected first
priority Lien on such Mortgage Notes, which is in turn secured by
valid, perfected, first priority Liens on the underlying property,
subject only to Liens specified in the original file policy related
thereto; and (iii) such Special Xxxxxx Mae Loan is or was made, and
each of Washington and the borrower(s) and other obligor(s) is, in
compliance with all terms of the related Special Xxxxxx Xxx Program
Agreement and the FNMA Special Pool Purchase Contract related thereto.
5.16 Servicing. Attached hereto as Exhibit E is a true and complete
--------- ---------
list of the Borrowers' Servicing Portfolio. All of the Borrowers'
Servicing Contracts are in full force and effect and, except as otherwise
indicated, are unencumbered by Liens. No default or event which, with
notice or lapse of time or both, would become a default, exists under any
such Servicing Contract.
5.17 Special Representations Concerning Servicing Collateral. The
-------------------------------------------------------
Borrowers hereby represent and warrant to the Lenders, as of the Closing
Date and as of the date of each Servicing Facility Advance Request or
Warehousing Advance Request for a P&I Advance or a Liquidity Advance, and
the making of each such Advance, that:
5.17(a) A Borrower is the legal and equitable owners and
holders, free and clear of all Liens (other than Liens granted
hereunder), of each Pledged Servicing Contract, and the Pledged
Servicing Contracts have been and will continue to be validly pledged
or assigned to the Credit Agent, subject to no other Liens.
5.17(b) The Borrower that owns each Pledged Servicing Contracts
has, and will continue to have, the full right, power and authority to
pledge such Pledged
Servicing Contract, subject to the rights of Xxxxxx Mae, Xxxxxx Xxx or
any applicable Investor.
5.17(c) All of the servicing rights under the Servicing
Contracts included in the calculation of Servicing Collateral Value
constitute direct, primary servicing rights.
5.17(d) Each Pledged Servicing Contract is in full force
and effect, each Pledged Servicing Contract is legal, valid and
enforceable in accordance with its terms and no default or event
which, with notice or lapse of time or both, would become a default,
exists under any Pledged Servicing Contract.
5.17(e) Each right to the payment of money under the
Pledged Servicing Contracts is genuine and enforceable in accordance
with its terms against the parties obligated to pay the same
("Obligor"), except as limited by bankruptcy, insolvency, moratorium
or other similar laws affecting the enforcement of creditors' rights
generally and general principles of equity, which terms have not been
modified or waived in any material respect or to any material extent.
5.17(f) To the best of the Borrowers' knowledge, the amount
represented by the Borrowers to the Credit Agent as owing by an
Obligor under each Mortgage Loan being serviced under a Pledged
Servicing Contract is the correct amount actually and unconditionally
owing by such Obligor.
5.17(g) To the best of the Borrowers' knowledge, no Obligor
has any defense, set off, claim or counterclaim against the Borrowers
or any Subsidiary of the Borrowers which can be asserted against the
Credit Agent or the Lenders, whether in any proceeding to enforce the
Credit Agent's security interest in the related Pledged Servicing
Contracts or otherwise.
5.17(h) The Borrowers have not sold, assigned or otherwise
transferred any rights associated with the Mortgage Loans being
serviced under any Pledged Servicing Contract, including, without
limitation, any rights to place escrow deposits with respect thereto.
5.17(i) Except for Acknowledgment Agreements, no consent of
any Obligor or any other
Person is required for the grant of a security interest in favor of
the Credit Agent, for the benefit of the Secured Parties, in any of
the Servicing Collateral including, without limitation, the Pledged
Servicing Contracts, or any computer software being utilized by the
Borrowers pursuant to license, lease or otherwise, other than consents
which have been obtained, nor will any consent need to be obtained
upon the occurrence of an Event of Default for the Credit Agent to
exercise its rights with respect to any of the Servicing Collateral
except as set forth in the Acknowledgment Agreements.
5.18 No Adverse Selection. The Borrowers have not selected the
--------------------
Collateral in a manner so as to affect adversely the Lenders' interests.
5.19 Year 2000 Compliance. The Borrowers have conducted a
--------------------
comprehensive review and assessment of the Borrowers' computer applications
and made inquiry of the Borrowers' key suppliers, vendors, customers, and
Investors with respect to the Year 2000 Problem and, based on that review
and inquiry, the Borrowers do not believe the Year 2000 Problem will result
in a material adverse change in the Borrowers' business condition
(financial or otherwise), operations, properties or prospects, or ability
to pay the Obligations.
6. AFFIRMATIVE COVENANTS.
The Borrowers hereby covenant and agree with the Lenders that, so long
as any of the Commitments are outstanding or there remain any Obligations to be
paid or performed under this Agreement or under any other Loan Document, the
Borrowers shall:
6.1 Payment of Notes. Punctually pay or cause to be paid all
----------------
Obligations payable hereunder and under the Notes in accordance with the
terms hereof and thereof.
6.2 Financial Statements and Other Reports. Deliver to each Lender:
--------------------------------------
6.2(a) As soon as available and in any event within forty-
five (45) days after the end of each month, statements of income and
changes in stockholders' equity of WMF Group and its Subsidiaries on a
consolidated basis for the immediately preceding month and for the
period from the beginning of the fiscal year to the end of such month,
and the related balance sheet as of the end of the immediately
preceding month, all in reasonable detail and certified as to the
fairness of presentation by the chief financial officer of WMF Group,
subject, however, to year-end audit adjustments.
6.2(b) As soon as available and in any event within ninety
(90) days after the close of each fiscal year of WMF Group, statements
of income, changes in stockholders' equity and cash flow of WMF Group
and its Subsidiaries on a consolidated basis for such year, and the
related balance sheet as of the end of such year (setting forth in
comparative form the corresponding figures for the preceding fiscal
year), all in reasonable detail and accompanied by an opinion (which
opinion shall not be qualified due to possible failure to take all
appropriate steps to successfully address the Year 2000 Problem) in
form and substance satisfactory to the Lenders and prepared by
independent certified public accountants of recognized standing
selected by WMF Group and reasonably satisfactory to the Lenders as to
said financial statements and a certificate signed by the chief
financial officer of WMF Group stating that said financial statements
fairly present the financial condition and results of operations of
WMF Group and its Subsidiaries as of the end of, and for, such fiscal
year.
6.2(c) Together with each delivery of financial statements
required in Section 6.2(a) for the last month of any fiscal quarter,
and each delivery of financial statements required in Section 6.2(b),
an Officer's Certificate substantially in the form of Exhibit I-MF
------------
hereto: (1) setting forth in reasonable detail all calculations
necessary to show that the Borrowers are in compliance with the
requirements of Sections 7.6, 7.7, 7.8, 7.9, 7.10, 7.11, 7.12, 7.13,
7.14 and 7.16 hereof as of the end of such month or year (or, if the
Borrowers are not in compliance, showing the extent of non-compliance
and specifying the period of non-compliance and what actions the
Borrowers have taken, are taking or propose to take with respect
thereto); (2) certifying that the Borrowers were, as of the end of the
period, in compliance and in good standing with applicable HUD, Xxxxxx
Mae, or Investor net worth requirements; (3) certifying that the
representation set forth in Section 5.19 hereof is true and correct as
of the date of such certificate or, if such representation is not true
and correct as of such date, specifying the nature of the problem and
what action the Borrowers have taken, is taking or proposes
to take with respect thereto; and (4) stating that the signers have
reviewed the terms of this Agreement and have made, or caused to be
made under their supervision, a review in reasonable detail of the
transactions and conditions of the Borrowers and their Subsidiaries
during the accounting period covered by such financial statements and
that such review has not disclosed the existence during or at the end
of such accounting period, and that the signers do not have knowledge
of the existence as of the date of the Officer's Certificate, of any
Default or Event of Default or if any Default or Event of Default
existed or exists, specifying the nature and period of the existence
thereof and what action the Borrowers have taken, are taking and
propose to take with respect thereto.
6.2(d) As soon as available and in any event within forty-
five (45) days after the end of each month, a consolidated report (the
"Servicing Portfolio Report") as of the end of the month detailing, as
to all Mortgage Loans the servicing rights to which are owned by the
Borrowers (specified by investor type, recourse and non-recourse)
regardless of whether such Mortgage Loans are Pledged Mortgages and
which report shall indicate Mortgage Loans which (A) are current and
in good standing, (B) are more than 30, 60 or 90 days past due,
respectively, (C) are the subject of pending bankruptcy or foreclosure
proceedings, (D) are excluded in calculating the Adjusted Servicing
Portfolio for any of the reasons listed in clauses (a) - (f) of the
definition thereof, or (E) have been converted (through foreclosure or
other proceedings in lieu thereof) by the Borrowers into real estate
owned by the Borrowers.
6.2(e) As soon as available and in any event within forty-
five (45) days after the end of each fiscal quarter of the Borrowers,
a consolidated report (the "Loan Production Report") as of the end of
the fiscal quarter, presenting the total dollar volume and the number
of Mortgage Loans originated or purchased during the fiscal year,
specified by property type and loan type or Investor (e.g. FHA, Xxxxxx
Mae, Xxxxxx Xxx, Xxxxxxx Mac, etc.)
6.2(f) Reports in respect of the Pledged Mortgages, Pledged
Securities and Pledged Servicing Contracts, in such detail and at such
times as any Lender in its discretion may reasonably request at any
time or from time to time.
6.2(g) As of the last day of June and December of each year
(to be delivered with the financial statements required under Sections
6.2(a) and (b), respectively, as of such dates), and at any time at
the request of the Credit Agent, an Appraisal of the Pledged Servicing
Contracts; if the Borrowers shall at any time fail to obtain an
Appraisal required by this Section 6.2(g), the Credit Agent may obtain
such Appraisal, and the Borrowers shall reimburse the Credit Agent for
its costs and expenses incurred in connection therewith.
6.2(h) As soon as available and in any event within forty-
five (45) days after the end of each Calendar Quarter, a valuation of
the Pledged Servicing Contracts prepared by the Borrowers using the
methodology used in the most recent Appraisal thereof.
6.2(i) Copies of all regular or periodic financial and
other reports, if any, which the Borrowers shall file with the
Securities and Exchange Commission or any governmental agency
successor thereto and copies of any audits completed by HUD, Xxxxxx
Mae, Xxxxxx Xxx or Xxxxxxx Mac. Copies of the Mortgage Bankers'
Financial Reporting Forms (Xxxxxxx Mac Form 1055/Xxxxxx Xxx Form 1002)
which the Borrowers shall have filed with Xxxxxx Mae or Xxxxxxx Mac,
in such detail and at such times as any Lender may reasonably request.
6.2(j) From time to time, with reasonable promptness, such
further information regarding the business, operations, properties or
financial condition of the Borrowers as any Lender may reasonably
request.
6.3 Maintenance of Existence; Conduct of Business. Preserve and
---------------------------------------------
maintain their corporate existence in good standing and all of its rights,
privileges, licenses and franchises necessary or desirable in the normal
conduct of their business, including, without limitation, their eligibility
as lender, seller/servicer and issuer described under Section 5.13 hereof
or in any Borrower Addition Agreement; conduct their businesses in an
orderly and efficient manner; maintain a net worth of acceptable assets as
required for maintaining each Borrower's eligibility as lender,
seller/servicer and issuer described under Section 5.13 hereof or in any
Borrower Addition Agreement; and make no change in the nature or character
of their businesses or
engage in any business in which they were not engaged on the date of this
Agreement or, in the case of any New Borrower acquired by the Borrowers in
a Servicing Acquisition, on the date the Borrowers' acquisition of such New
Borrower was approved by the Lenders hereunder. Notwithstanding anything in
this Agreement to the contrary, it shall not be deemed a change in the
nature or character of their businesses for any of the Borrowers, directly
or indirectly through any existing or prospective Subsidiary, to engage as
a principal in (i) mortgage loan securitizations in the primary and
secondary markets, (ii) mortgage asset management, and (iii) services with
respect to mortgage banking generally, with respect to the financing,
managing and sale of real property, and with respect to collateralized
mortgage obligations.
6.4 Compliance with Applicable Laws. Comply with the requirements of
-------------------------------
all applicable laws, rules, regulations and orders of any governmental
authority, a breach of which could materially adversely affect their
business, operations, assets, or financial condition, except where
contested in good faith and by appropriate proceedings.
6.5 Inspection of Properties and Books. Permit authorized
----------------------------------
representatives of the Credit Agent, the Collateral Agent, any Lender or
any Participant to discuss the business, operations, assets and financial
condition of the Borrowers and their Subsidiaries with their officers and
employees and to examine their books of account and make copies or extracts
thereof, all at such reasonable times as the Credit Agent, the Collateral
Agent, any Lender or any Participant may request; provided, that prior to
the occurrence of a Default or an Event of Default, the Borrowers shall
have no obligation to permit any such visitation or examination on less
than two (2) Business Days notice from the Credit Agent, the Collateral
Agent, any Lender or any Participant. The Borrowers will provide their
accountants with a copy of this Agreement promptly after the execution
hereof and will instruct its accountants to answer candidly any and all
questions that the officers of the Credit Agent, the Collateral Agent, any
Lender or any Participant or any authorized representative of the Credit
Agent, the Collateral Agent, any Lender or any Participant may address to
them in reference to the financial condition or affairs of the Borrowers
and their Subsidiaries. The Borrowers may have their representatives in
attendance at any meetings between the officers or other representatives of
the Credit Agent, the Collateral Agent, any Lender or any Participant and
the Borrowers' accountants held in accordance with this authorization.
6.6 Notice. Give Notice to the Credit Agent, promptly after the
------
Borrowers have actual or constructive notice thereof, of (a) any action,
suit or proceeding instituted by or against any Borrower or any of their
Subsidiaries in any federal or state court or before any commission or
other regulatory body (federal, state or local, domestic or foreign) which
action, suit or proceeding has at issue in excess of Five Hundred Thousand
Dollars ($500,000), or any such proceedings threatened against any Borrower
or any of their Subsidiaries in a writing containing the details thereof
that the Borrowers reasonably determine is likely to be instituted unless
settled, (b) the filing, recording or assessment of any federal, state or
local tax Lien against any Borrower, any of their Subsidiaries or any of
their assets, (c) the occurrence of any Event of Default hereunder or the
occurrence of any Default and continuation thereof for five (5) days, (d)
the suspension, revocation or termination of any Borrower's eligibility, in
any respect, as approved lender, seller/servicer or issuer as described
under Section 5.13 hereof or in any Borrower Addition Agreement, (e) the
transfer, loss or termination (other than termination resulting from
repayment of one or more Mortgage Loan in whole) of any Servicing Contract
to which any Borrower or any of their Subsidiaries is a party, or which is
held for the benefit of any Borrower or any of their Subsidiaries, and the
reason for such transfer, loss or termination, if known to any Borrower, if
the unpaid principal balance of the Mortgage Loans serviced pursuant to all
such Servicing Contracts transferred, lost or terminated since the date of
the most recent appraisal or valuation delivered pursuant to Section 6.2(g)
or 6.2(h) hereof exceeds five percent (5%) of the Servicing Portfolio as of
the date of such appraisal or valuation, and (f) any other action, event or
condition of any nature which may lead to or result in a material adverse
effect upon the business, operations, assets, or financial condition of the
Borrowers and their Subsidiaries or which, with or without notice or lapse
of time or both, would constitute a default under any other agreement,
instrument or indenture to which any Borrower or any of their Subsidiaries
is a party or to which any Borrower or any of their Subsidiaries, their
properties, or assets may be subject.
6.7 Payment of Debt, Taxes, etc. Pay and perform all obligations and
---------------------------
indebtedness of any Borrower, and cause to be paid and performed all
obligations and indebtedness of their Subsidiaries, except WMFCC, promptly
and in accordance with the terms thereof and pay and discharge or cause to
be
paid and discharged promptly all taxes, assessments and governmental
charges or levies imposed upon any Borrower or any of their Subsidiaries,
except WMFCC, or upon their respective income, receipts or properties
before the same shall become past due, as well as all lawful claims for
labor, materials and supplies or otherwise which, if unpaid, might become a
Lien or charge upon such properties or any part thereof; provided, however,
that any Borrower and any of their Subsidiaries shall not be required to
pay taxes, assessments or governmental charges or levies or claims for
labor, materials or supplies for which the Borrowers or their Subsidiaries
shall have obtained an adequate bond or adequate insurance or which are
being contested in good faith and by proper proceedings which are being
reasonably and diligently pursued and for which proper reserves have been
created.
6.8 Insurance. Maintain (a) errors and omissions insurance or
---------
mortgage impairment insurance and blanket bond coverage, with such
companies and in such amounts as satisfy prevailing requirements applicable
to a lender, seller/servicer and issuer described under Section 5.13
hereof, and (b) liability insurance and fire and other hazard insurance on
its properties, with responsible insurance companies approved by the Credit
Agent, in such amounts and against such risks as is customarily carried by
similar businesses operating in the same vicinity; and within thirty (30)
days after Notice from the Credit Agent, obtain such additional insurance
as the Credit Agent shall reasonably require, all at the sole expense of
the Borrowers. Copies of such policies shall be furnished to the Credit
Agent without charge upon request of the Credit Agent.
6.9 Closing Instructions. Indemnify and hold the Secured Parties
--------------------
harmless from and against any loss, including reasonable attorneys' fees
and costs, attributable to the failure of a title insurance company, agent
or approved attorney to comply with the disbursement or instruction letter
or letters of the Borrowers relating to any Mortgage Loan. The Collateral
Agent shall have the right to pre-approve the closing instructions of the
Borrowers to the title insurance company, agent or attorney in any case
where the Mortgage Loan to be created at settlement is intended to be
pledged as Collateral pursuant hereto.
6.10 Subordination of Certain Indebtedness. Cause any indebtedness
-------------------------------------
of any Borrower incurred after the date of this Agreement to any
shareholder, director or officer of any
Borrower, or to any Affiliate of any Borrower or of any Subsidiary of any
Borrower, which indebtedness has a term of more than one (1) year or is in
excess of Five Hundred Thousand Dollars ($500,000), to be subordinated to
all Obligations by the execution of a Subordination of Debt Agreement in
the form of Exhibit F hereto and deliver to the Credit Agent an executed
---------
copy of said Agreement, certified by the corporate secretary of the
applicable Borrower to be true and complete and in full force and effect.
6.11 Other Loan Obligations. Perform all material obligations under
----------------------
the terms of each loan agreement, note, mortgage, security agreement or
debt instrument by which any Borrower is bound or to which any of their
property is subject, and promptly notify the Credit Agent in writing of a
declared default under or the termination, cancellation, reduction or
nonrenewal of any of its other lines of credit or agreements with any other
lender. Exhibit J hereto is a true and complete list of all such lines of
---------
credit or agreements as of the date hereof and the Borrowers hereby agree
to give the Credit Agent at least thirty (30) days Notice before entering
into any additional lines of credit or agreements.
6.12 Use of Proceeds of Advances. Use the proceeds of each Advance
---------------------------
solely for the purpose set forth in Section 2.1(b), Section 2.4(b) or
Section 2.6 for Advances of that type.
6.13 Special Affirmative Covenants Concerning Collateral.
---------------------------------------------------
6.13(a) Warrant and defend the right, title and interest of
the Secured Parties in and to the Collateral against the claims and
demands of all Persons whomsoever.
6.13(b) Service or cause to be serviced all Mortgage Loans
in accordance with the standard requirements of the issuers of
Purchase Commitments covering the same, all applicable HUD, Xxxxxx Mae
and Xxxxxxx Mac requirements and, with respect to Mortgage Loans not
intended for sale to Xxxxxx Mae or Xxxxxxx Mac or to back a Xxxxxx Mae
Mortgage-backed Security, the Rating Agencies, including without
limitation taking all actions necessary to enforce the obligations of
the obligors under such Mortgage Loans. The Borrowers shall service
or cause to be serviced all Mortgage Loans backing Pledged Securities
in accordance with applicable
governmental requirements and requirements of issuers of Purchase
Commitments covering the same. The Borrowers shall hold all escrow
funds collected in respect of Pledged Mortgages, Mortgage Loans
backing Pledged Securities and Mortgage Loans serviced pursuant to
Pledged Servicing Contracts in trust, without commingling the same
with non-custodial funds, and apply the same for the purposes for
which such funds were collected.
6.13(c) Execute and deliver to the Credit Agent such
Uniform Commercial Code financing statements with respect to the
Collateral as the Credit Agent may request. The Borrowers shall also
execute and deliver to the Credit Agent and obtain the execution and
delivery by Xxxxxx Xxx, Xxxxxx Xxx and/or other Investors
Acknowledgment Agreements in the forms from time to time promulgated
by Xxxxxx Mae, Xxxxxx Xxx and/or other Investors, as applicable, and
acceptable to the Credit Agent, with respect to the Pledged Servicing
Contracts. The Borrowers shall also execute and deliver to the Credit
Agent such further instruments of sale, pledge or assignment or
transfer, and such powers of attorney, as may be reasonably requested
by the Credit Agent, and shall do and perform all matters and things
necessary or desirable to be done or observed, for the purpose of
effectively creating, maintaining and preserving the security and
benefits intended to be afforded the Secured Parties under this
Agreement and the other Loan Documents. The Credit Agent shall have
all the rights and remedies of a secured party under the Uniform
Commercial Code of Minnesota or any other applicable law in addition
to all rights provided for herein and in the other Loan Documents.
6.13(d) Notify the Collateral Agent within two (2) Business
Days of any default under, or of the termination of, any Purchase
Commitment relating to any Pledged Mortgage, Eligible Mortgage Pool or
Pledged Security.
6.13(e) Promptly comply in all respects with the terms and
conditions of all Purchase Commitments, and all extensions, renewals
and modifications or substitutions thereof or thereto. The Borrowers
will cause to be delivered to the Investor the Pledged Mortgages and
Pledged Securities to be sold under each Purchase Commitment not later
than three (3)
Business Days prior to the mandatory delivery date thereof.
6.13(f) Maintain, at their principal office or in a
regional office approved by the Credit Agent, or in the office of a
computer service bureau engaged by the Borrowers and approved by the
Credit Agent, and, upon request, shall make available to the
Collateral Agent, the originals, or copies in any case where the
originals have been delivered to the Collateral Agent or to an
Investor, of its Mortgage Notes and Mortgages included in Pledged
Mortgages, Mortgage-backed Securities delivered to the Collateral
Agent as Pledged Securities, Purchase Commitments, and all related
Mortgage Loan documents and instruments, and all files, surveys,
certificates, correspondence, appraisals, computer programs, tapes,
discs, cards, accounting records and other information and data
relating to the Collateral.
6.13(g) Promptly provide the Credit Agent with copies of
any amendment, supplement, restatement or other modification of any
Special Xxxxxx Xxx Program Agreement, the promissory note(s)
evidencing the Special Xxxxxx Mae Loans made thereunder, or the Xxxxxx
Mae Special Pool Purchase Contract related thereto.
6.14 Repayment of Debt to PNC Bank, N.A. The Borrowers will, on or
-----------------------------------
before March 27, 1999, repay in full all of their outstanding Debt to PNC
Bank, N.A., terminate all outstanding lending commitments from PNC Bank,
N.A., and obtain the release of all Liens on their assets in favor of PNC
Bank, N.A. (including, without limitation, the termination of any financing
statements filed to perfect those Liens).
7. NEGATIVE COVENANTS.
The Borrowers hereby covenant and agree with the Lenders that, so long
as the commitments of the Lenders are outstanding or there remain any
Obligations to be paid or performed, the Borrowers shall not, either directly or
indirectly, without the prior written consent of all the Lenders:
7.1 Contingent Liabilities. Assume, guarantee, endorse, or otherwise
----------------------
become contingently liable for the obligation of any Person, except another
Borrower, and except by endorsement of negotiable instruments for deposit
or collection in the ordinary course of business, for liability for
breaches of representations and warranties
made by any Borrower in connection with the sale of Mortgage Loans in the
ordinary course of business, provided such representations and warranties
are typical of non-recourse sales of similar Mortgage Loans, for liability
as a result of sales of Mortgage Loans to RFC pursuant to the Master
Purchase Agreement (Bridge Mortgage Loans) dated as of September 22, 1997
by and between Washington, Xxxxxxx and Xxxxxxx, as sellers, and RFC, as
purchaser, and for liability as a result of the sale of Xxxxxx Mae DUS
Mortgage Loans with recourse in the ordinary course of the Borrowers'
businesses.
7.2 Sale or Pledge of Servicing Contracts. Sell, pledge or grant a
-------------------------------------
security interest in any existing or future Servicing Contracts of any
Borrower or acquired in any Servicing Acquisition other than to the Credit
Agent for the benefit of the Secured Parties, or omit to take any action
required to keep all such Servicing Contracts in full force and effect;
provided, however, that if no Default or Event of Default has occurred and
is continuing, (a) servicing on individual Mortgage Loans may be sold
concurrently with and incidental to the sale of such Mortgage Loans (with
servicing released) in the ordinary course of the Borrowers' business, and
(b) Servicing Contracts may be sold by the Borrowers or any Subsidiary of
the Borrowers in the ordinary course of business as long as (i) after
giving effect to any such sale, the requirements of Section 7.11 will be
satisfied, and (ii) after giving effect to any prepayments of Servicing
Facility Advances made with the proceeds of such sale, no further
prepayments will be required pursuant to Section 2.10(l) hereof.
7.3 Merger; Sale of Assets; Acquisitions. Liquidate, dissolve,
------------------------------------
consolidate or merge or sell any substantial part of its assets, or acquire
any substantial part of the assets of another, other than acquisition of
(a) Nonrecourse Servicing Contracts acquired in the ordinary course of the
Borrowers' business, and (b) the stock or assets of a Person engaged
principally in the mortgage banking business and acquired in a Servicing
Acquisition. For purposes of this Section 7.3, "mortgage banking business"
shall mean business activities relating to (i) mortgage loan
securitizations in the primary and secondary markets, (ii) mortgage asset
management, and (iii) services with respect to the financing, managing and
sale of real property, and with respect to collateralized mortgage
obligations.
7.4 Deferral of Subordinated Debt. Except for the repayment of
-----------------------------
Subordinated Debt owed to COMIT in an amount not to exceed $4,000,000
(principal, accrued interest and other amounts) on or before the date the
Rights Offering
closes, pay in advance of the stated maturity thereof any Subordinated Debt
of the Borrowers or, if a Default or Event of Default hereunder shall have
occurred, make any payment of any kind thereafter on such Subordinated
Debt, until all Obligations have been paid and performed in full and any
applicable preference period has expired.
7.5 Loss of Eligibility. Take any action that would cause any
-------------------
Borrower to lose all or any part of its status as an eligible lender,
seller/servicer and issuer as described under Section 5.13 hereof or in any
Borrower Addition Agreement.
7.6 Debt to Adjusted Tangible Net Worth Ratio. Permit the ratio of
-----------------------------------------
Debt (excluding, for this purpose only, Debt arising under the Hedging
Arrangements, to the extent of assets arising under the same Hedging
Arrangements) to Adjusted Tangible Net Worth of WMF Group (and its
Subsidiaries, on a consolidated basis) at any time to exceed 15 to 1.
7.7 Non-Warehouse Debt to Adjusted Tangible Net Worth. Permit the
-------------------------------------------------
ratio of Debt (excluding, for this purpose only, (a) Debt arising under
Hedging Arrangements, to the extent of assets arising under the same
Hedging Arrangements, (b) Warehousing Advances, and (c) other Debt secured
by Multifamily Mortgage Loans, Commercial Mortgage Loans and/or Mortgage-
backed Securities covered by Purchase Commitments issued by Investors, to
the extent such Debt does not exceed the Committed Purchase Price of such
Mortgage Loans) to Adjusted Tangible Net Worth of WMF Group (and its
Subsidiaries, on a consolidated basis) at any time to exceed 1.25 to 1.
7.8 Minimum Adjusted Tangible Net Worth. Permit Adjusted Tangible
-----------------------------------
Net Worth of WMF Group (and its Subsidiaries, on a consolidated basis) at
any time (a) from the Closing Date to and including June 30, 1999, to be
less than Thirty-Five Million Dollars ($35,000,000); and (b) thereafter, to
be less than Fifty Million Dollars ($50,000,000).
7.9 Liquidity. Permit the Liquid Assets of WMF Group (and its
---------
Subsidiaries, on a consolidated basis) at any time to be less than the
greater of (a) twenty-five percent (25%) of Tangible Net Worth or (b) Five
Million Dollars ($5,000,000).
7.10 Maximum Pass-Throughs. Permit the ratio (expressed as a
---------------------
percentage) of (a) the aggregate cumulative
outstanding amount of advances to or on behalf of defaulting mortgagors
paid or required to have been paid by the Borrowers and their Subsidiaries
on Mortgage Loans and Mortgage-backed Securities to (b) Tangible Net Worth
of WMF Group (and its Subsidiaries, on a consolidated basis) at any time to
exceed forty percent (40%).
7.11 Minimum Nonrecourse Servicing Portfolio. Permit the Nonrecourse
---------------------------------------
Servicing Portfolio of the Borrowers to be less than Five Billion Dollars
($5,000,000,000).
7.12 Debt Service Coverage Ratio. Permit the Debt Service Coverage
---------------------------
Ratio, measured as of the last day of any fiscal quarter ending on or after
September 30, 1999, to be less than 1.50 to 1.00.
7.13 Minimum Income. Permit the net income of WMF Group (and its
--------------
Subsidiaries, on a consolidated basis, excluding, for measurement periods
ending on or before March 31, 2000, WMFCC) for any period of four (4)
consecutive fiscal quarters, to be less than One Dollar ($1).
7.14 Debt Limitation. Permit Debt (excluding, for this purpose only,
---------------
(a) Debt arising under Hedging Arrangements, to the extent of assets under
the same Hedging Arrangements, (b) Warehousing Advances, (c) other Debt
secured by Multifamily Mortgage Loans, Commercial Mortgage Loans or
Mortgage-backed Securities covered by Purchase Commitments issued by
Investors, to the extent such Debt does not exceed the Committed Purchase
Price of such Mortgage Loans, (d) Subordinated Debt, and (e) Debt of
Subsidiaries of WMF Group that are not Borrowers, provided such Debt is not
guaranteed by, secured by the assets of, or otherwise supported by, any
Borrower) of WMF Group (and its Subsidiaries, on a consolidated basis) to
exceed One Hundred Million Dollars ($100,000,000).
7.15 Acquisition of Recourse Servicing Contracts. Acquire or enter
-------------------------------------------
into, or permit any Subsidiary to acquire or enter into, Servicing
Contracts under which any Borrower or Subsidiary is obligated to repurchase
or indemnify the holder of the Mortgage Loans as a result of defaults on
the Mortgage Loans at any time during the term of such Mortgage Loans
(other than those Servicing Contracts that are customarily recognized in
the trade as non-recourse but that may contain repurchase or
indemnification obligations related to breaches of usual and customary
representations and warranties made in connection with the non-recourse
sale and servicing of the Mortgage Loans serviced thereunder).
7.16 Transactions with Affiliates. Directly or indirectly (a) make
----------------------------
any loan, advance, extension of credit or capital contribution to any of
its Affiliates, (b) transfer, sell, pledge, assign or otherwise dispose of
any of its assets to or on behalf of such Affiliates, (c) merge or
consolidate with or purchase or acquire assets from such Affiliates, or (d)
pay management fees to or on behalf of such Affiliates; provided, that
nothing in this Section 7.16 shall restrict transactions between the
Borrowers. Provided that no Default or Event of Default has occurred or is
continuing at the time any transfer or investment is made, this Section
7.16 does not prohibit investments by WMF Group in an aggregate amount not
to exceed Ten Million Dollars ($10,000,000) in COMIT.
7.17 Gestation Facilities. Directly or indirectly sell or finance
--------------------
Pledged Mortgages under any Gestation Agreements.
7.18 Restricted Payments. Make any Restricted Payment if, either
-------------------
before or after giving effect thereto, a Default or Event of Default will
have occurred and be continuing.
7.19 Special Negative Covenants Concerning Collateral.
------------------------------------------------
7.19(a) The Borrowers shall not amend or modify, or waive
any of the terms and conditions of, or settle or compromise any claim
in respect of, any Pledged Mortgages or Pledged Securities.
7.19(b) The Borrowers shall not sell, assign, transfer or
otherwise dispose of, or grant any option with respect to, or pledge
or otherwise encumber (except pursuant to this Agreement or as
permitted herein), any of the Collateral or any interest therein.
7.19(c) The Borrowers shall not make any compromise,
adjustment or settlement in respect of any of the Collateral or accept
other than cash in payment or liquidation of the Collateral.
7.19(d) At any time that a Special Xxxxxx Xxx Advance is
outstanding against any Special Xxxxxx Mae Loan, Washington shall not
amend, supplement, restate or otherwise modify the related Special
Xxxxxx Xxx Program Agreement, the promissory note(s) evidencing such
Special Xxxxxx Mae Loans or the Xxxxxx Xxx Special Pool Purchase
Contract related thereto.
8. DEFAULTS; REMEDIES.
8.1 Events of Default. The occurrence of any of the following
-----------------
conditions or events shall be an event of default ("Event of Default"):
8.1(a) Failure to pay the principal of any Advance when
due, whether at stated maturity, by acceleration, or otherwise; or
failure to pay any installment of interest on any Advance or any other
amount due under this Agreement within ten (10) days after the due
date; or failure to pay, within any applicable grace period, the
principal or interest on any other indebtedness of the Borrowers due
the Lenders; or
8.1(b) Failure of any Borrower or any of their
Subsidiaries, except WMFCC, to pay, or any default in the payment of
any principal or interest on, any other indebtedness or contingent
obligations in an aggregate amount of One Million Dollars ($1,000,000)
or more within any period of grace provided; breach or default with
respect to any other material term of any other indebtedness or of any
loan agreement, mortgage, indenture or other agreement relating
thereto, if the effect of such breach or default is to cause, or to
permit the holder or holders thereof (or a trustee on behalf of such
holder or holders) to cause, indebtedness of any Borrower or any of
their Subsidiaries, except WMFCC, in the aggregate amount of One
Million Dollars ($1,000,000) or more to become or be declared due
prior to its stated maturity (upon the giving or receiving of notice,
lapse of time, both, or otherwise); or
8.1(c) Failure of the Borrowers to perform or comply with
any term or condition applicable to them contained in Sections 6.3,
6.12, 6.13 and 6.14, or in any Section of Article 7 of this Agreement;
provided, however, that no Event of Default shall be deemed to occur
as a result of a breach of Section 6.13 or Section 7.19 hereof
relating to particular Pledged Mortgages if the Borrowers deliver to
the Lender the Release Amount for each Pledged Mortgage affected by
such breach within one (1) Business Day after the earliest of (i)
receipt by the Borrowers of Notice from the Lender of such breach,
(ii) receipt by the Lender of Notice from the Borrowers of such
breach, or (iii) the date the Borrowers should have notified the
Lender of such breach pursuant to Section 6.6(c) hereof; or
8.1(d) (1) Any of the Borrowers' representations or
warranties made or deemed made herein or in any other Loan Document
shall be inaccurate or incomplete in any material respect on the date
as of which made or deemed made, or (2) any of the Borrowers'
representations or warranties made or deemed made in any statement or
certificate at any time given by any Borrower in writing pursuant
hereto or thereto shall be inaccurate or incomplete in any material
respect on the date as of which made or deemed made and, if such
inaccuracy or incompleteness was unintentional, the same has not been
cured within ten (10) days after (i) receipt by the Borrowers of
Notice thereof from the Credit Agent, (ii) receipt by the Credit Agent
of Notice thereof from the Borrowers, or (iii) the date the Borrowers
should have notified the Credit Agent thereof pursuant to Section
6.6(c); or
8.1(e) The Borrowers shall default in the performance of or
compliance with any term contained in this Agreement or any other Loan
Document other than those referred to above in Subsections 8.1(a),
8.1(c) or 8.1(d) and such default shall not have been remedied or
waived within thirty (30) days after the earliest of (i) receipt by
the Borrowers of Notice from the Credit Agent of such default, (ii)
receipt by the Credit Agent of Notice from the Borrowers of such
default, or (iii) the date the Borrowers should have notified the
Credit Agent of such default pursuant to Section 6.6(c); or
8.1(f) (1) A court having jurisdiction shall enter a decree
or order for relief in respect of any Borrower or any of their
Subsidiaries in an involuntary case under any applicable bankruptcy,
insolvency or other similar law in respect of any Borrower or any of
their Subsidiaries now or hereafter in effect, which decree or order
is not stayed; any Borrower or any of their Subsidiaries shall consent
to the entry of any such decree or order; or a filing of a voluntary
case under any applicable bankruptcy, insolvency or other similar law
in respect of any Borrower or any of their Subsidiaries has occurred;
or any other similar relief shall be granted under any applicable
federal or state law; or (2) the filing of an involuntary case in
respect of any Borrower or any of their Subsidiaries under any
applicable bankruptcy, insolvency or other similar law; or a decree or
order of a court having jurisdiction for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian
or other officer having similar powers over any Borrower or any of
their Subsidiaries, or over all or a substantial part of their
respective property, shall have been entered; or the involuntary
appointment of an interim or permanent receiver, trustee or other
custodian of any Borrower or any of their Subsidiaries for all or a
substantial part of their respective property; or the issuance of a
warrant of attachment, execution or similar process against any
substantial part of the property of any Borrower or any of their
Subsidiaries, and the continuance of any such events in Subsection (2)
above for sixty (60) days unless dismissed, bonded off or discharged;
or
8.1(g) Any Borrower or any of their Subsidiaries shall
consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its
property; the making by any Borrower or any of their Subsidiaries of
any assignment for the benefit of creditors; or the inability or
failure of any Borrower or any of their Subsidiaries other than WMFCC,
or the admission by any Borrower or any of their Subsidiaries other
than WMFCC in writing of its inability, to pay its debts as such debts
become due; or
8.1(h) Failure of any Borrower or any of their Subsidiaries
to perform any contractual obligations which it may have to repurchase
Mortgage Loans if such obligations in the aggregate exceed One Million
Dollars ($1,000,000); or
8.1(i) Any money judgment, writ or warrant of attachment,
or similar process involving in any case an amount in excess of Five
Hundred Thousand Dollars ($500,000) shall be entered or filed against
any Borrower, any of their Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed
for a period of thirty (30) days or in any event later than five (5)
days prior to the date of any proposed sale thereunder; or
8.1(j) Any order, judgment or decree shall be entered
against any Borrower decreeing the dissolution or split up of any
Borrower and such order shall remain undischarged or unstayed for a
period in excess of twenty (20) days; or
8.1(k) Any Plan maintained by any Borrower or any of their
Subsidiaries shall be
terminated within the meaning of Title IV of ERISA or a trustee shall
be appointed by an appropriate United States district court to
administer any Plan, or the Pension Benefit Guaranty Corporation (or
any successor thereto) shall institute proceedings to terminate any
Plan or to appoint a trustee to administer any Plan if as of the date
thereof such Borrower's or Subsidiary's liability (after giving effect
to the tax consequences thereof) to the Pension Benefit Guaranty
Corporation (or any successor thereto) for unfunded guaranteed vested
benefits under the Plan exceeds the then current value of assets
accumulated in such Plan by more than Twenty-Five Thousand Dollars
($25,000) (or in the case of a termination involving any Borrower or
any of their Subsidiaries as a "substantial employer" (as defined in
Section 4001(a)(2) of ERISA) the withdrawing employer's proportionate
share of such excess shall exceed such amount); or
8.1(l) Any Borrower or any of their Subsidiaries as
employer under a Multiemployer Plan shall have made a complete or
partial withdrawal from such Multiemployer Plan and the plan sponsor
of such Multiemployer Plan shall have notified such withdrawing
employer that such employer has incurred a withdrawal liability in an
annual amount exceeding Twenty-Five Thousand Dollars ($25,000); or
8.1(m) Any Borrower or any of their Subsidiaries shall
purport to disavow its obligations hereunder or under any other Loan
Document, or shall contest the validity or enforceability hereof or
thereof; or the Credit Agent's security interest on any portion of
the Collateral shall become unenforceable or otherwise impaired;
provided that, subject to the Majority Lenders' approval, no Event of
Default shall occur as a result of such impairment if all Advances
made against any such Collateral shall be paid in full within ten
(10) days of the date of such impairment; or
8.1(n) WMF Group shall cease to own, directly or
indirectly, at least 51% of each class of the capital stock of any
other Borrower or any Subsidiary that has granted a Lien to secure the
Obligations; or
8.1(o) The Rights Offering shall not have closed, or WMF
Group shall not have received at
least $20,000,000 in Net Proceeds therefrom, on or before May 31,
1999; or
8.1(p) A material adverse change occurs, or is
reasonably likely to occur, in the business condition (financial or
otherwise), operations, properties or prospects of the Borrowers, or
in the ability of the Borrowers to repay their Obligations; or
8.1(q) Any Lien for any taxes, assessments or other
governmental charges (i) is filed against the Borrowers or any of
their properties, or is otherwise enforced against the Borrowers or
any portion of their Collateral, or (ii) obtains priority that is
equal or greater than the priority of the Lender's security interest
in any of the Collateral; or
8.1(r) The Warehousing Maturity Date shall occur.
8.2 Remedies.
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8.2(a) If a Lender shall have knowledge of a Default
or an Event of Default, it shall forthwith give Notice thereof to the
Credit Agent. If the Credit Agent shall have knowledge of a Default or
an Event of Default, it shall forthwith give Notice thereof to each
Lender and to the Borrowers. The Credit Agent shall not be deemed to
have knowledge or Notice of the occurrence of a Default or an Event of
Default unless the Credit Agent has received Notice thereof from a
Lender or the Borrowers .
8.2(b) Upon the occurrence of any Event of Default
described in Sections 8.1(f) or 8.1(g) with respect to any Borrower,
the Commitment shall automatically be terminated and all unpaid
principal amounts of and accrued interest on the Notes and all other
Obligations shall automatically become due and payable, without
presentment, demand or other requirements of any kind, all of which
are hereby expressly waived by the Borrowers.
8.2(c) Upon the occurrence of any Event of Default,
other than those described in Sections 8.1(f) and 8.1(g) with respect
to any Borrower, the Majority Lenders may, by Notice to the Borrowers,
terminate the Commitments and/or declare all Obligations to be
immediately due and payable,
whereupon the same shall forthwith become due and payable, together
with all accrued interest thereon, and the obligation of the Lenders
to make any Advances shall thereupon terminate.
8.2(d) Upon the occurrence of any Event of Default,
the Credit Agent, on behalf of the Secured Parties, may also do any of
the following:
(1) Foreclose upon or otherwise enforce its
security interest in and Lien on the Collateral to secure all
payments and performance of the Obligations in any manner
permitted by law or provided for hereunder.
(2) Notify all obligors in respect of
Collateral that the Collateral has been assigned to the Credit
Agent, for the benefit of the Secured Parties, and that all
payments thereon are to be made directly to the Credit Agent or
such other party as may be designated by the Credit Agent;
settle, compromise, or release, in whole or in part, any amounts
owing on the Collateral, any such obligor or any Investor or any
portion of the Collateral, on terms acceptable to the Credit
Agent; enforce payment and prosecute any action or proceeding
with respect to any and all Collateral; and where any such
Collateral is in default, foreclose on and enforce security
interests in such Collateral by any available judicial procedure
or without judicial process and sell property acquired as a
result of any such foreclosure.
(3) Act, or contract with a third party to
act, as servicer or subservicer of each item of Collateral
requiring servicing and perform all obligations required in
connection with the Pledged Mortgages, the Pledged Securities,
the Pledged Servicing Contracts and related Purchase Commitments,
such third party's fees to be paid by the Borrowers.
(4) Require the Borrowers to assemble the
Collateral and/or books and records relating thereto and make
such available to the Credit Agent at a place to be designated by
the Credit Agent.
(5) Enter onto property where any Collateral
or books and records relating
thereto are located and take possession thereof with or without
judicial process; and obtain access to the Borrowers' data
processing equipment, computer hardware and software relating to
the Collateral and to use all of the foregoing and the
information contained therein in any manner the Credit Agent
deems necessary for the purpose of effectuating its rights under
this Agreement and any other Loan Document.
(6) Prior to the disposition of the
Collateral, prepare it for disposition in any manner and to the
extent the Credit Agent deems appropriate.
(7) Exercise all rights and remedies of a
secured creditor under the Uniform Commercial Code of Minnesota
or other applicable law, including, but not limited to, selling
or otherwise disposing of the Collateral, or any part thereof, at
one or more public or private sales, whether or not such
Collateral is present at the place of sale, for cash or credit or
future delivery, on such terms and in such manner as the Credit
Agent may determine, including, without limitation, sale pursuant
to any applicable Purchase Commitment. If notice is required
under such applicable law, the Credit Agent will give the
Borrowers not less than ten (10) days' notice of any such public
sale or of the date after which any private sale may be held. The
Borrowers agree that ten (10) days' notice shall be reasonable
notice. The Credit Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or
place to which the same may be so adjourned. In case of any sale
of all or any part of the Collateral on credit or for future
delivery, the Collateral so sold may be retained by the Credit
Agent until the selling price is paid by the purchaser thereof,
but the Credit Agent shall not incur any liability in case of the
failure of such purchaser to take up and pay for the Collateral
so sold and, in case of any such failure, such Collateral may
again be sold upon like notice. The Credit Agent may, however,
instead of exercising the power of sale herein conferred upon it,
proceed by a suit or suits at law or in equity
to collect all amounts due upon the Collateral or to foreclose
the pledge and sell the Collateral or any portion thereof under a
judgment or decree of a court or courts of competent
jurisdiction, or both.
(8) Proceed against the Borrowers on the
Notes.
The Credit Agent shall follow the instructions of the
Majority Lenders in exercising or not exercising its rights under this
Section 8.2(d), but (i) the Credit Agent shall have no obligation to
take or not to take any action which it believes may expose it to any
liability, and (ii) the Credit Agent may, but shall be under no
obligation to, await instructions from the Majority Lenders before
exercising or not exercising its rights under this Section 8.2(d).
8.2(e) Neither the Credit Agent nor any other Secured
Party shall incur any liability as a result of the sale or other
disposition of the Collateral, or any part thereof, at any public or
private sale or disposition. The Borrowers hereby waive (to the extent
permitted by law) any claims it may have against the Credit Agent and
the other Secured Parties arising by reason of the fact that the price
at which the Collateral may have been sold at such private sale was
less than the price which might have been obtained at a public sale or
was less than the aggregate amount of the outstanding Advances and the
unpaid interest accrued thereon, even if the Credit Agent accepts the
first offer received and does not offer the Collateral to more than
one offeree, provided such sale was commercially reasonable in all
other respects. Any sale of Collateral pursuant to the terms of a
Purchase Commitment, or any other disposition of Collateral arranged
by any Borrower, whether before or after the occurrence of an Event of
Default, shall be deemed to have been made in a commercially
reasonable manner.
8.2(f) The Borrowers acknowledge that Mortgage Loans
and Mortgage-backed Securities are collateral of a type which is
customarily sold on a recognized market. The Borrowers waive any right
they may have to prior notice of the sale of any Pledged Mortgage or
Pledged Security, and agrees that any
Lender may purchase any Pledged Mortgages or Pledged Securities at a
private sale of such Collateral.
8.2(g) The Borrowers specifically waive and release
(to the extent permitted by law) any equity or right of redemption,
all rights of redemption, stay or appraisal which the Borrowers have
or may have under any rule of law or statute now existing or hereafter
adopted, and any right to require the Credit Agent or any of the
Secured Parties to (1) proceed against any Person, (2) proceed against
or exhaust any of the Collateral or pursue their rights and remedies
as against the Collateral in any particular order, or (3) pursue any
other remedy in their power. The Credit Agent shall not be required to
take any steps necessary to preserve any rights of the Borrowers
against holders of mortgages prior to the Lien of any Mortgage
included in the Collateral or to preserve rights against prior
parties.
8.2(h) The Credit Agent and/or the Lenders may, but
shall not be obligated to, advance any sums or do any act or thing
necessary to uphold and enforce the Lien and priority of, or the
security intended to be afforded by, any Mortgage included in the
Collateral, including, without limitation, payment of delinquent taxes
or assessments and insurance premiums. All advances, charges, costs
and expenses, including reasonable attorneys' fees and disbursements,
incurred or paid by the Credit Agent or any Lender in exercising any
right, power or remedy conferred by this Agreement, or in the
enforcement hereof, together with interest thereon at the Default Rate
from the time of payment until repaid, shall become a part of the
principal balance outstanding hereunder and under the Notes.
8.2(i) No failure on the part of the Credit Agent or
any other Secured Party to exercise, and no delay in exercising, any
right, power or remedy provided hereunder, at law or in equity shall
operate as a waiver thereof; nor shall any single or partial exercise
by the Credit Agent or any other Secured Party of any right, power or
remedy provided hereunder, at law or in equity preclude any other or
further exercise thereof or the exercise of any other right, power or
remedy. Without intending to limit the foregoing, all defenses based
on the statute of limitations are hereby waived by the Borrowers to
the extent permitted by law.
The remedies herein provided are cumulative and are not exclusive of
any remedies provided at law or in equity.
8.2(j) The Borrowers acknowledge that the Borrowers
and the Credit Agent may from time to time hereafter enter into,
agreements ("Acknowledgment Agreements") with Xxxxxx Xxx, Xxxxxx Xxx
or any other Investor in order to obtain the consent of Xxxxxx Mae,
Xxxxxx Xxx or such other Investor to the assignment of and security
interest granted in the Pledged Servicing Contracts. The Borrowers
further acknowledge that the Acknowledgment Agreements may contain
certain provisions concerning the enforcement by the Credit Agent of
its security interest, for the benefit of the Secured Parties, in the
Servicing Contracts subject thereto. The Borrowers agree that the
disposition of their rights in any Pledged Servicing Contract pursuant
to the terms of the applicable Acknowledgment Agreement shall be
deemed commercially reasonable within the meaning of Section 9-504(3)
of the Uniform Commercial Code of Minnesota. The Borrowers hereby
waive any claims they might otherwise have against the Credit Agent or
the other Secured Parties as a result of the Credit Agent's compliance
with the terms of any Acknowledgment Agreement.
8.2(k) The Credit Agent is hereby granted a license or
other right to use, without charge, the Borrowers' computer programs,
other programs, labels, patents, copyrights, rights of use of any
name, trade secrets, trade names, trademarks, service marks and
advertising matter, or any property of a similar nature, as it
pertains to the Collateral, in advertising for sale and selling any
Collateral, and the Borrowers' rights under all licenses and all other
agreements related to the foregoing shall insure to the Credit Agent's
benefit until the Obligations and the Letter of Credit Obligations are
paid in full and no Letters of Credit are outstanding.
8.3 Application of Proceeds. The proceeds of any sale, disposition
-----------------------
or other enforcement of the Credit Agent's security interest in all or any
part of the Collateral shall be applied by the Credit Agent as follows:
8.3(a) In the case of the proceeds of the Warehousing
Collateral and Receivables:
First, to the payment of the costs and expenses of
-----
such sale or enforcement, including reasonable compensation to the
Credit Agent's and Collateral Agent's agents and counsel, and all
expenses, liabilities and advances made or incurred by or on behalf of
the Credit Agent and Collateral Agent in connection therewith;
Second, to the payment of the costs and expenses of
------
such sale or enforcement, including reasonable compensation to the
Lenders' agents and counsel, and all expenses, liabilities and
advances made or incurred by or on behalf of any Lender in connection
therewith;
Third, to the Swingline Lender, in an amount equal
-----
to the amount of accrued interest, or accrued fees charged in lieu of
interest pursuant to a Balance Funded Agreement, owed to the Swingline
Lender in respect of Swingline Advances, until paid in full;
Fourth, to the Swingline Lenders until the principal
------
amount of all Swingline Advances outstanding are paid in full;
Fifth, to the Lenders holding Warehousing Advances,
-----
pro rata in accordance with the amount of accrued interest, or accrued
fees charged in lieu of interest pursuant to a Balance Funded
Agreement, owed to each of them in respect to Warehousing Advances,
until such interest and fees are paid in full;
Sixth, to the Lenders holding Warehousing Advances,
-----
pro rata in accordance with their respective Warehousing Percentage
Shares, until the principal amounts of all Warehousing Advances
outstanding are paid in full;
Seventh, to the Lenders holding Warehousing Advances,
-------
pro rata in accordance with their respective Warehousing Percentage
Shares, until all fees and other Obligations accrued by or due each
Lender, the Credit Agent and the Collateral Agent are paid in full;
Eighth, to the Lenders, for application to the
------
Obligations owed to each of them in respect of the Servicing Facility
Advances and the Term Loan
Advances, as set forth in clauses Third and Fourth of Section 8.2(b)
----- ------
hereof;
Ninth, to LaSalle, for application to the Letter of
-----
Credit Obligations and to hold as separate collateral for any future
Letter of Credit Obligations, in the amount notified by LaSalle to the
Credit Agent;
Tenth, to the remaining Obligations; and
-----
Finally, to the payment to the Borrowers, or to their
-------
successors or assigns, or as a court of competent jurisdiction may
direct, of any surplus then remaining from such proceeds.
8.3(b) In the case of the proceeds of the Servicing
Collateral:
First, to the payment of the costs and expenses of
-----
such sale or enforcement, including reasonable compensation to the
Credit Agent's and Collateral Agent's agents and counsel, and all
expenses, liabilities and advances made or incurred by or on behalf of
the Credit Agent and Collateral Agent in connection therewith;
Second, to the payment of the costs and expenses of
------
such sale or enforcement, including reasonable compensation to the
Lenders' agents and counsel, and all expenses, liabilities and
advances made or incurred by or on behalf of any Lender in connection
therewith;
Third, to the Lenders holding Servicing Facility
-----
Advances and/or Term Loan Advances, pro rata in accordance with the
amount of accrued interest, or accrued fees charged in lieu of
interest pursuant to a Balance Funded Agreement, owed to each of them
in respect of Term Loan Advances and Servicing Facility Advances,
until such interest and fees are paid in full;
Fourth, to the Lenders holding Servicing Facility
------
Advances and/or Term Loan Advances, pro rata in accordance with their
respective Servicing Facility Percentage Shares and Term Loan
Servicing Facility Percentage Shares and Term Loan Percentage Shares,
until the principal amount of all Term Loan Advances
and Servicing Facility Advances outstanding are paid in full;
Fifth, to the Lenders holding Servicing Facility
-----
Advances and/or Term Loan Advances, pro rata in accordance with their
respective Percentage Shares, until all fees and other Obligations
accrued by or due each Lender, the Credit Agent and the Collateral
Agent are paid in full;
Sixth, to LaSalle, for application to the Letter of
-----
Credit Obligations and to hold as separate collateral for any future
Letter of Credit Obligations, in the amount notified by LaSalle to the
Credit Agent;
Seventh, to the Lenders, for application to the
-------
Obligations owed to each of them in respect of Warehousing Advances,
as set forth in clauses Third, Fourth, Fifth and Sixth of Section
----- ------ ----- -----
8.3(a) hereof;
Eighth, to the remaining Obligations; and
------
Finally, to the payment to the Borrowers, or to their
-------
successors or assigns, or as a court of competent jurisdiction may
direct, of any surplus then remaining from such proceeds.
8.3(c) If the proceeds of any such sale, disposition
or other enforcement are insufficient to cover the costs and expenses
of such sale, as aforesaid, and the payment in full of all
Obligations, the Borrowers shall remain liable for any deficiency.
8.4 Credit Agent Appointed Attorney-in-Fact. The Credit Agent is
---------------------------------------
hereby appointed the attorney-in-fact of the Borrowers, with full power of
substitution, for the purpose of carrying out the provisions hereof and
taking any action and executing any instruments which the Credit Agent may
deem necessary or advisable to accomplish the purposes hereof, which
appointment as attorney-in-fact is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing, the Credit
Agent shall have the right and power to give notices of its security
interest in the Collateral to any Person, either in the name of the
Borrowers or in its own name, to endorse all Pledged Mortgages or Pledged
Securities payable to the order of the Borrowers, to change or cause to be
changed the book-entry registration or name of subscriber or Investor on
any
Pledged Security, or to receive, endorse and collect all checks made
payable to the order of either Borrower representing any payment on account
of the principal of or interest on, or the proceeds of sale of, any of the
Pledged Mortgages or Pledged Securities and to give full discharge for the
same. Except to the extent the Credit Agent is granted the power to take
any action covered by the foregoing power of attorney prior to the
occurrence of an Event of Default under the Loan Documents, the Lenders
agree that the Credit Agent shall not exercise the foregoing power of
attorney prior to the occurrence of an Event of Default.
8.5 Right of Setoff. The Borrowers hereby grant to the Credit Agent,
---------------
to each Lender and to any assignee or Participant of any Lender a right of
setoff, to secure the repayment of the Obligations and (in the case of
LaSalle) the Letter of Credit Obligations, upon any and all monies,
securities, or other property of the Borrowers, and the proceeds thereof,
now or hereafter held or received by or in transit to such Person, from or
for the account of the Borrowers, whether for safekeeping, custody, pledge,
transmission, collection or otherwise, and all deposits (general or
special, time or demand, provisional or final) and credits of the Borrowers
and any and all claims of the Borrowers against such Person at any time
existing. Upon the occurrence and during the continuance of any Event of
Default, the Credit Agent, each Lender and any assignee or Participant of
any Lender is hereby authorized, at any time and from time to time, without
notice, to setoff and to appropriate or apply any and all items hereinabove
described against and on account of the Obligations and (in the case of
LaSalle) the Letter of Credit Obligations, irrespective of whether or not
the Lenders shall have made any demand hereunder and whether or not said
Obligations or Letter of Credit Obligations shall have matured.
8.6 Sharing of Payments. If upon the occurrence of an Event of
-------------------
Default and acceleration of the Obligations any Lender shall hold or
receive and retain any payment, whether by setoff, application of deposit
balance or security, or otherwise, in respect of the Obligations, then such
Lender shall purchase from the other Lenders for cash and at face value and
without recourse, such participation in the Obligations held by them as
shall be necessary to cause such payment to be shared with each of them as
provided in Section 8.3 hereof; provided, that if such payment or part
thereof is thereafter recovered from such purchasing Lender, the related
purchases from the other Lenders shall be rescinded ratably and the
purchase price restored as to the portion of such excess payment so
recovered, but without
interest thereon unless the purchasing Lender is required to pay interest
on such amounts to the Person recovering such payment, in which case with
interest thereon, computed at the same rate, and on the same basis, as the
interest that the purchasing Lender is required to pay. If any Lender
receives a payment from the Borrowers not in respect of the Obligations,
but relating to another relationship of such Lender and the Borrowers, such
Lender may apply the payment first to the indebtedness arising out of the
other relationship and then against the Obligations as provided for above.
9. THE CREDIT AGENT.
9.1 Appointment. Each Lender hereby irrevocably designates and
-----------
appoints the Credit Agent as the agent of such Lender under the Loan
Documents and each such Lender hereby irrevocably authorizes the Credit
Agent to take such action on its behalf under the provisions of the Loan
Documents and to exercise such powers and perform such duties as are
expressly delegated to the Credit Agent by the terms of the Loan Documents,
together with such other powers as are reasonably incidental thereto. The
Credit Agent hereby accepts such appointment and agrees to act in
accordance with this Agreement.
9.2 Duties of Credit Agent. The provisions of the Loan Documents set
----------------------
forth the exclusive duties of the Credit Agent and no implied duties or
obligations shall be read into the Loan Documents against the Credit Agent.
The Credit Agent shall not be bound in any way by any agreement or contract
other than the Loan Documents and any other agreement to which it is a
party.
9.3 Standard of Care. The Credit Agent shall act in accordance with
----------------
customary standards for those engaged as agents of commercial loan
transactions in similar capacities. Without limiting the generality of the
foregoing:
9.3(a) The Credit Agent shall not be required to ascertain or
inquire as to the performance or observance of any of the conditions
or agreements to be performed or observed by any other party, except
as specifically provided in the Loan Documents. The Credit Agent
disclaims any responsibility for the validity or accuracy of the
recitals to this Agreement and any representations and warranties
contained herein, unless specifically identified as recitals,
representations or warranties of the Credit Agent.
9.3(b) The Credit Agent shall have no responsibility for
ascertaining the value, collectibility, insurability, enforceability,
effectiveness or suitability of any Collateral, the title of any party
therein, the validity or adequacy of the security afforded thereby, or
the validity of this Agreement (except as to Credit Agent's authority
to enter into this Agreement and to perform its obligations
hereunder).
9.3(c) No provision of this Agreement shall require the Credit
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if, in its sole judgment, it
shall believe that repayment of such funds or adequate indemnity
against such risk or liability is not assured to it.
9.3(d) The Credit Agent is not responsible for preparing or
filing any reports or returns relating to federal, state or local
income taxes with respect to this Agreement, other than for the Credit
Agent's compensation or for reimbursement of expenses.
9.4 Delegation of Duties. The Credit Agent may execute any of its
--------------------
duties under the Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters
pertaining to such duties. The Credit Agent shall not be responsible for
the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care.
9.5 Exculpatory Provisions. Neither the Credit Agent nor any of its
----------------------
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (a) liable for any action taken or omitted to be taken
by it or such Person under or in connection with the Loan Documents (except
for its or such Person's own gross negligence or willful misconduct), or
(b) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrowers or any
officer thereof contained in the Loan Documents or in any certificate,
report, statement or other document referred to or provided for in, or
received by the Credit Agent under or in connection with, the Loan
Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of the Loan Documents or for any failure of
the Borrowers to perform their obligations under any Loan Document. The
Credit Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, the
Loan Documents or to inspect the properties, books or records of the
Borrowers or any of their Subsidiaries.
9.6 Reliance by Credit Agent. The Credit Agent shall be entitled to
------------------------
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certification, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation reasonably believed by it to be correct and to
have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation,
counsel to the Borrowers), independent accountants and other experts
selected by the Credit Agent. The Credit Agent may deem and treat the
payee of any Note as the owner thereof for all purposes. As to the
Lenders: (a) the Credit Agent shall be fully justified in failing or
refusing to take any action under the Loan Documents unless it shall first
receive such advice or concurrence of the Majority Lenders or all of the
Lenders, as appropriate, and/or it shall first be indemnified to its
satisfaction by the Lenders ratably in accordance with their respective
Percentage Shares against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any action (except
for liabilities and expenses resulting from the Credit Agent's gross
negligence or willful misconduct), and (b) the Credit Agent shall in all
cases be fully protected in acting, or in refraining from acting, under the
Loan Documents in accordance with a request of the Majority Lenders or all
of the Lenders, as appropriate, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders.
9.7 Non-Reliance on Credit Agent or Other Lenders. Each Lender
---------------------------------------------
expressly acknowledges that neither the Credit Agent nor any of its
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to such Lender and
that no act by the Credit Agent hereafter taken, including any review of
the affairs of the Borrowers, shall be deemed to constitute any
representation or warranty by the Credit Agent to any Lender. Each Lender
represents to the Credit Agent that it has, independently and without
reliance upon the Credit Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and
creditworthiness of the Borrowers and made its own decision to enter into
and make Advances under the Credit Agreement. Each Lender also represents
that it will, independently and without reliance upon the Credit Agent or
any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under the Credit
Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrowers. Except for notices,
reports and other documents expressly required to be furnished to the
Lenders by the Credit Agent hereunder, the Credit Agent shall have no duty
or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, financial or
other condition or creditworthiness of the Borrowers or any Subsidiary
which may come into the possession of the Credit Agent or any of its
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
9.8 Credit Agent in Individual Capacity. The Credit Agent may make
-----------------------------------
loans to, accept deposits from and generally engage in any kind of business
with the Borrowers as though the Credit Agent was not the Credit Agent
hereunder. With respect to the Advances made or renewed by it and any Note
issued to it, the Credit Agent shall have the same rights and powers under
the Loan Documents as any Lender and may exercise the same as though it
were not the Credit Agent, and the terms "Lender" and "Lenders" shall
include the Credit Agent in its individual capacity.
9.9 Successor Credit Agent. The Credit Agent may resign as such at
----------------------
any time upon giving thirty (30) days Notice to the Borrowers and the
Lenders. The Credit Agent may be removed immediately with cause or at any
time upon thirty (30) days Notice from the Majority Lenders to the Credit
Agent and the Borrowers. Upon Notice of such resignation or removal, the
Majority Lenders may appoint a successor Credit Agent (which successor
Credit Agent, assuming that no Default or Event of Default exists, shall be
reasonably acceptable to the Borrowers). The date on which the Borrowers,
the Collateral Agent and Lenders have received Notice from such successor
of its acceptance of appointment as the Credit Agent shall constitute the
effective date of resignation or removal of the resigning or removed the
Credit Agent. If no successor Credit Agent shall have been so appointed by
the Majority Lenders, and shall have accepted such appointment within the
allotted time period, then, upon five (5) days' Notice to the
Borrowers, the resigned or removed Credit Agent may, on behalf of the
Lenders, appoint a successor. Upon the effective date of resignation or
removal of the resigning or removed Credit Agent, such successor will
thereupon succeed to and become vested with all the rights, powers,
privileges, and duties of the resigning or removed Credit Agent, but the
resigning or removed Credit Agent shall not be discharged from any
liability as a result of its or its directors', officers', agents', or
employees' gross negligence or willful misconduct in the performance of its
duties and obligations under this Agreement prior to the effective date of
its resignation or removal. Upon the effective date of its resignation or
removal, the Credit Agent shall assign all of its right, title and security
interest in and to all Collateral to its successor, without recourse,
warranty or representation, express or implied.
9.10 Agreements Regarding Servicing Collateral and Acknowledgment
------------------------------------------------------------
Agreements. Each Lender (including each Lender becoming a party hereto as
----------
an Additional Lender pursuant to Section 13.4) hereby agrees (a) to benefit
under this Agreement with respect to the Servicing Collateral and under
each Acknowledgment Agreement exclusively by and through the Credit Agent,
(b) to authorize the Credit Agent or its agent to act exclusively for such
Lender with respect to the Acknowledgment Agreements and persons (other
than the Borrowers) party thereto, and (c) that all terms of the
Acknowledgment Agreements shall be binding on such Lender as if it had
executed the same. The provisions of clause (c) of the preceding sentence
shall not be effective with respect to any Acknowledgment Agreement, other
than Acknowledgment Agreements in the forms promulgated by Xxxxxx Xxx and
Xxxxxxx Mac as of the date of this Agreement, unless the Credit Agent's
execution and delivery of such Acknowledgment Agreement is consented to by
all of the Lenders.
10. NOTICES.
All notices, demands, consents, requests and other communications
required or permitted to be given or made hereunder (collectively,
"Notices") shall, except as otherwise expressly provided hereunder, be in
writing and shall be delivered in person or telecopied, or mailed, first
class or delivered by overnight courier, return receipt requested, postage
prepaid, addressed to the respective party hereto at its address set forth
opposite the name of such party on the signature pages of this Agreement
or, as to any such party, at such other address as may be designated by it
in a Notice to the other. All Notices
shall be conclusively deemed to have been properly given or made when duly
delivered, in person, by telecopy or by overnight courier, or if mailed, on
the date of receipt as noted on the return receipt.
11. REIMBURSEMENT OF EXPENSES; INDEMNITY.
11.1 Reimbursement of Expenses and Indemnification by the Borrowers.
--------------------------------------------------------------
The Borrowers shall: (a) pay a documentation production fee of Five
Thousand Dollars ($5,000) to the Credit Agent in connection with the
preparation and negotiation of this Agreement; (b) pay all reasonable out-
of-pocket costs and expenses of the Credit Agent and the Collateral Agent,
including, without limitation, reasonable fees and disbursements of counsel
(including the fees and service charges of Xxxxxx & Xxxxxxx LLP, special
counsel to the Credit Agent, and allocated costs of internal counsel), in
connection with the preparation, negotiation, amendment, enforcement and
administration of this Agreement, the Notes, and other Loan Documents and
the making and repayment of the Advances and the payment of interest
thereon; (c) indemnify, pay, and hold harmless the Lenders and any holder
of the Notes from and against, any and all present and future stamp,
documentary and other similar taxes with respect to the foregoing matters
and save the Lenders and the holder or holders of the Notes harmless from
and against any and all liabilities with respect to or resulting from any
delay or omission to pay such taxes; (d) indemnify, pay and hold harmless
the Credit Agent, the Collateral Agent and each Lender and any of their
respective officers, directors, employees or agents and any subsequent
holder of the Notes (collectively called the "Indemnitees") from and
against any and all liabilities, obligations, losses, damages, penalties,
judgments, suits, and reasonable costs, expenses and disbursements of any
kind or nature whatsoever (including without limitation, the reasonable
fees and disbursements of counsel of the Indemnitees (including allocated
costs of internal counsel) in connection with any investigative,
administrative or judicial proceeding, whether or not such Indemnitees
shall be designated a party thereto) which may be imposed upon, incurred by
or asserted against such Indemnitees in any manner relating to or arising
out of this Agreement, the Notes, or any other Loan Document or any of the
transactions contemplated hereby or thereby (the "Indemnified
Liabilities"); provided, however, that the Borrowers shall have no
obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities arising from any action or inaction by the Borrowers explicitly
directed by the Credit Agent or by any Lender in writing, or
the gross negligence or willful misconduct of such Indemnitee. To the
extent that the undertaking to indemnify, pay and hold harmless as set
forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrowers shall contribute the
maximum portion which it is permitted to pay and satisfy under applicable
law, to the payment and satisfaction of all Indemnified Liabilities
incurred by the Indemnitees or any of them. The agreement of the Borrowers
contained in this Subsection (d) shall survive the expiration or
termination of this Agreement and the payment in full of the Notes.
Reasonable attorneys' fees and disbursements incurred in enforcing, or on
appeal from, a judgment pursuant hereto shall be recoverable separately
from and in addition to any other amount included in such judgment, and
this clause is intended to be severable from the other provisions of this
Agreement and to survive and not be merged into such judgment. As to
Subsection (d), each Indemnitee shall use its best efforts to give
Borrowers' notice of any such investigative, administrative or judicial
proceeding, and the Borrowers shall have the right to consult in the
defense of or the negotiation relating to any such matter at Borrowers'
expense.
11.2 Indemnification by the Lenders. The Lenders agree to indemnify
------------------------------
each of the Credit Agent and the Collateral Agent in its respective
capacity as such (to the extent not reimbursed by the Borrowers, and
without limiting the obligation of the Borrowers to do so), ratably
according to the respective amounts of their Percentage Shares, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including without limitation at any time
following the payment of the Obligations) be imposed on, incurred by or
asserted against the Credit Agent or the Collateral Agent in any way
relating to or arising out of the Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Credit
Agent or the Collateral Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
the Credit Agent's or the Collateral Agent's gross negligence or willful
misconduct. The agreements in this Section shall survive the payment of
the Obligations and the termination of this Agreement. Attorneys' fees and
disbursements incurred in enforcing, or on appeal from, a
judgment pursuant hereto shall be recoverable separately from and in
addition to any other amount included in such judgment, and this clause is
intended to be severable from the other provisions of this Agreement and to
survive and not be merged into such judgment.
12. FINANCIAL INFORMATION.
All financial statements and reports furnished to the Credit Agent or
the Lenders hereunder shall be prepared in accordance with GAAP, applied on
a basis consistent with that applied in preparing the financial statements
as at the end of and for the last fiscal year ended (except to the extent
otherwise required to conform to good accounting practice).
13. MISCELLANEOUS.
13.1 Terms Binding Upon Successors; Survival of Representations. The
----------------------------------------------------------
terms and provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and
assigns. All representations, warranties, covenants and agreements herein
contained on the part of the Borrowers shall survive the making of any
Advance and the execution of the Notes, and shall be effective so long as
any Lender's commitment is outstanding hereunder or there remain any
Obligations to be paid or performed.
13.2 Lenders in Individual Capacity. The Lenders and their
------------------------------
Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the Borrowers or any Subsidiary of the Borrowers
regardless of the capacity of the Lenders hereunder. The Lenders may
disclose to the other Lenders information regarding other relationships
which they may have with the Borrowers and the Borrowers hereby consent to
these disclosures.
13.3 Participation and Assignments. This Agreement and the
-----------------------------
Obligations of the Borrowers may not be assigned by the Borrowers. Any
Lender may, subject to the limitations set forth below, assign or transfer,
in whole or in part, this Agreement and the other Loan Documents and
further may sell participations in all or any part of its Advances or
Maximum Commitment or any other interest in the Obligations or any of its
obligations hereunder to another Person, in which event: (a) in the case
of an assignment, upon consent of the Credit Agent and, with respect to any
assignment made except after the occurrence and during the continuance of
an Event of Default, the Borrowers (which consent of the
Borrowers shall not be unreasonably withheld), the assignee shall have, to
the extent of such assignment (unless otherwise provided thereby), the same
rights and benefits as it would have if it were a "Lender" hereunder, and,
if the assignee has expressly assumed, for the benefit of the Borrowers,
such Lender's obligations hereunder, such Lender shall be relieved of its
obligations hereunder to the extent of such assignment and assumption,
provided that the Credit Agent shall have no obligation to consent to there
being more than a total of ten (10) Lenders (a Participant is not a
Lender); and (b) in the case of a participation, the participating Person's
(a "Participant") rights against the Lender from whom it has purchased such
participation in respect of such participation are those set forth in the
agreement executed by such Lender in favor of the Participant relating
thereto. In the case of any sale of a participation by any Lender, such
Lender shall remain solely responsible to the other parties hereto for the
performance of such Lender's obligations under the Loan Documents, whether
or not such Lender shall remain the holder of any Note, such Lender shall
retain all voting rights with respect to such Note, the Advances hereunder
and the Lender's Maximum Commitment, and the Borrowers, the Credit Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under the
Loan Documents. Each such Participant shall enter into an agreement with
the Participating Lender under which such Participant agrees (a) to the
benefit under this Agreement with respect to the Servicing Collateral and
under the Acknowledgment Agreements exclusively by and through the Credit
Agent, (b) to authorize the Credit Agent or its agent to act exclusively
for such Participant with respect to the Acknowledgment Agreements and the
parties thereto (other than the Borrowers), and (c) that all terms of the
Acknowledgment Agreements shall be binding upon such Participant as if it
had executed the same. Nothing contained herein shall in any manner or to
any extent affect the right of any Lender to assign its Note and its right
to receive and retain payments on its Note provided such Lender remains
primarily and directly liable pursuant to the terms and conditions of this
Agreement to keep, observe and perform all of its obligations under this
Agreement, and all such assignments shall be treated, considered and
administered as a sale of a participation and not as an assignment and
shall be subject to and governed by the provisions of this Section.
Notwithstanding the other provisions of this Section 13.3, (a) no Lender
shall assign or transfer its Warehousing Advances or Maximum Warehousing
Commitment if the portion of such Lender's Maximum Warehousing Commitment
held by it
(after giving effect to all such assignments) would be less than Fifteen
Million Dollars ($15,000,000), or if the Maximum Warehousing Commitment or,
if the Warehousing Commitments have expired or been terminated, Warehousing
Advances of the assignee Lender would be less than Fifteen Million Dollars
($15,000,000), and (b) no Lender may assign or transfer its Servicing
Facility Advances, Maximum Servicing Facility Commitment, Term Loan
Advances or Maximum Term Loan Commitment if the portion of the sum of such
Lender's Maximum Servicing Facility Commitment or, if the Servicing
Facility Commitments have expired or been terminated, Servicing Facility
Advances, and Maximum Term Loan Commitment, or, after the Term Loan
Advances have been made, Term Loan Advances held by it (after giving effect
to all such assignments) would be less than Ten Million Dollars
($10,000,000) or if the sum of such amounts of the assignee Lender would be
less than Ten Million Dollars ($10,000,000). On the closing date of any
assignment by any Lender of any portion of its Commitments or Advances,
such Lender shall pay to the Credit Agent an assignment fee in the amount
of Two Thousand Five Hundred Dollars ($2,500). Any Lender may furnish any
information concerning the Borrowers in the possession of such Lender from
time to time to Affiliates of such Lender and to assignees and Participants
(including prospective assignees and Participants) and the Borrowers hereby
consent to the provision of such information.
13.4 Commitment Increases.
--------------------
13.4(a) At any time and from time to time after the Closing
Date, the Warehousing Credit Limit may be increased, either
temporarily or permanently, by either an Additional Lender
establishing a Maximum Commitment or by one or more then existing
Lender ("Increase Lender") increasing its Maximum Warehousing
Commitment (each such increase by either means, a "Commitment
Increase"); provided that no Commitment Increase shall become
effective unless and until (i) the Borrowers, the Credit Agent and the
Additional Lender or the Increase Lender shall have executed and
delivered an amendment with respect to such Commitment Increase, and
(ii) if, after giving effect thereto, the Warehousing Credit Limit
would exceed Three Hundred Thousand Dollars ($300,000,000), such
Commitment Increase shall have been consented to by each of the other
Lenders holding Warehousing Commitments. Prior to the effective date
("Effective Date") of any Commitment Increase, the Borrowers shall
issue a promissory note to the Additional Lender, or against surrender
of its existing Note to an Increase
Lender, in the amount of such Lender's Maximum Warehousing Commitment
after giving effect to such Commitment Increase. Such new promissory
note or notes shall constitute a "Warehousing Note" or "Warehousing
Notes" for the purposes of the Loan Documents.
13.4(b) On the Effective Date of any such Commitment
Increase, if such Commitment Increase is permanent, the Credit Agent
shall recompute the Warehousing Percentage Share for each Lender based
on the new Warehousing Credit Limit which results from the Commitment
Increase, and within two (2) Business Days, the Credit Agent shall
request Warehousing Advances from or shall direct prepayments to each
Lender so that the total amount of all then outstanding Warehousing
Advances are shared pro rata with each Lender. In the case of a
temporary Commitment Increase, notwithstanding anything to the
contrary set forth in this Agreement:
(1) Warehousing Advances during the period
of such temporary Commitment Increase (the "Temporary Increase
Period") shall be made by the Lenders holding Warehousing
Commitments (i) ratably, based on (A) their respective Maximum
Warehousing Commitments, without giving effect to such temporary
Commitment Increase, until such amounts are fully advanced, and
(ii) thereafter, by the Additional Lender(s) or Increase
Lender(s) only, up to the amount of its or their Maximum
Warehousing Commitment(s); and
(2) As long as the maturity of the
Warehousing Commitments has not been accelerated pursuant to
Section 8.2 of the Agreement, payments received by the Credit
Agent in respect of the principal amount of Warehousing Advances
outstanding shall be applied first, to Warehousing Advances made
by the Additional Lender(s) or the Increase Lender(s) to the
extent the outstanding principal balance thereof exceeds the
permanent Maximum Warehousing Commitment of such Lender(s), and
thereafter, to the remaining Warehousing Advances outstanding,
ratably among the Lenders holding Warehousing Commitments.
On the date any temporary Commitment Increase expires, the amount by which
the outstanding principal balance of
Warehousing Advances exceeds the Warehousing Credit Limit (as reduced by
the expiration of the temporary increase) shall be due and payable to the
Additional Lender(s) or Increase Lender(s).
13.5 Amendments.
----------
13.5(a) This Agreement may not be amended or terms or
provisions hereof waived unless such amendment or waiver is in writing
and signed by the Majority Lenders, the Credit Agent and the
Borrowers; provided, however, that (i) without the prior written
consent of one hundred percent (100%) of the Lenders, no amendment or
waiver shall: (1) reduce the principal of, or rate of interest or
fees on, the Advances or any Lender's Maximum Servicing Facility
Commitment or Maximum Warehousing Commitment, (2) except as provided
in Section 13.4 hereof, modify the Warehousing Credit Limit, the
Servicing Facility Credit Limit or the Term Loan Credit Limit, (3)
except as expressly contemplated by Sections 13.3 and 13.4 hereof,
modify any Lender's Percentage Share of the Warehousing Credit Limit,
Term Loan Credit Limit or Servicing Facility Credit Limit, (4) modify
the definition of "Majority Lenders," "Majority Warehousing Lenders,"
"Majority Servicing Facility Lenders" or "Majority Term Loan Lenders,"
(5) modify any of the provisions of this Agreement relating to the
sharing of payments or proceeds of Collateral among the Lenders, (6)
modify Section 11.1(c) or Section 11.1(d) hereof, (7) amend any of the
definitions related to the foregoing provisions, or (8) release any of
the Servicing Collateral except in connection with a sale of Servicing
Contracts permitted pursuant to Section 7.2 of the Agreement, or (9)
amend this Section; (ii) without the prior written consent of the
Lenders holding one hundred percent (100%) of Servicing Facility
Commitments or, if the Servicing Facility Commitments have expired or
been terminated, the Servicing Facility Advances, (1) change the
amount or time for payment of any Servicing Facility Advance or amount
payable in respect thereof or any Servicing Facility Commitment or (2)
amend any of the definitions relating to the foregoing provisions;
(iii) without the prior written consent of the Lenders holding one
hundred percent (100%) of the Term Loan Commitments or, after the Term
Loans have been made, the Term Loan Advances, (1) change the amount of
time for payment of any Term Loan Advances or installment thereof, or
(2) amend any of the definitions relating to the foregoing
provisions; or (iv) without the prior written consent of the Lenders
holding one hundred percent (100%) of the Warehousing Commitments or,
if the Warehousing Commitments have expired or been terminated, the
Warehousing Advances, (1) change the amount or time for payment of any
Warehousing Advance or amount payable in respect thereof or any
Warehousing Commitment, (2) release any of the Warehousing Collateral
except in connection with the sale of Pledged Mortgages or Pledged
Securities in the ordinary course of business or (3) amend any of the
definitions related to the foregoing. It is expressly agreed and
understood that the failure by the Majority Lenders to elect to
accelerate amounts outstanding hereunder or to terminate the
obligation of the Lenders to make Advances hereunder shall not
constitute an amendment or waiver of any term or provision of this
Agreement.
13.5(b) The Borrowers hereby agree that they shall,
upon requesting any amendment of this Agreement or any other Loan
Document or any waiver of any material term or provision of this
Agreement or any other Loan Document (except an extension of the
Maturity Date), pay at the time of such request a modification fee (1)
to the Credit Agent in a minimum amount of One Thousand Dollars
($1,000) or such greater amount as may be specified in the Amendment
or waiver, and (2) to each Lender (except any Lender which becomes
party to the Agreement by virtue of such amendment) in a minimum
amount of Five Hundred Dollars ($500) or such greater amount as may be
specified in the Amendment or waiver. The payment of such modification
fees shall be in addition to and shall not limit the Borrowers'
reimbursement obligations pursuant to Article 11 hereof, and any other
fee or charge imposed by the Credit Agent or the Lenders as a
condition to any amendment.
13.6 Operational Reviews. From time to time upon request, the
-------------------
Borrowers shall permit the Credit Agent, any Lender or their representative
access to its premises and records for the purpose of conducting a review
of the Borrowers' general mortgage business methods, policies, and
procedures, auditing loan files and reviewing financial and operational
aspects of the Borrowers' business.
13.7 Governing Law. This Agreement and the other Loan Documents
-------------
shall be governed by the laws of the State of Minnesota, without reference
to its principles of conflicts of laws.
13.8 Relationship of the Parties. This Agreement provides for the
---------------------------
making of Advances by the Lenders, in their capacities as lenders, to the
Borrowers, in their capacity as borrowers, and for the payment of interest
and repayment of principal by the Borrowers to the Lenders, and for the
payment of certain fees by the Borrowers to the Lenders, the Credit Agent
and the Collateral Agent. The relationship between the Secured Parties and
the Borrowers is limited to that of creditor/secured party, on the one
hand, and debtor, on the other hand. The provisions herein for compliance
with financial covenants and delivery of financial statements are intended
solely for the benefit of the Secured Parties to protect their interests in
assuring payments of interest and repayment of principal and payment of
certain fees, and nothing contained in this Agreement shall be construed as
permitting or obligating any Secured Party to act as a financial or
business advisor or consultant to the Borrowers, as permitting or
obligating any Secured Party to control the Borrowers or to conduct the
Borrowers' operations, as creating any fiduciary obligation on the part of
the Lenders to the Borrowers, or as creating any joint venture, agency, or
other relationship between or among any parties hereto other than as
explicitly and specifically stated in this Agreement. The Borrowers
acknowledge that they have had the opportunity to obtain the advice of
experienced counsel of its own choosing in connection with the negotiation
and execution of this Agreement and to obtain the advice of such counsel
with respect to all matters contained herein. The Borrowers further
acknowledge that they are experienced with respect to financial and credit
matters and has made their own independent decisions to apply to the
Lenders for credit and to execute and deliver this Agreement.
13.9 Severability. If any provision of this Agreement shall be
------------
declared to be illegal or unenforceable in any respect, such illegal or
unenforceable provision shall be and become absolutely null and void and of
no force and effect as though such provision were not in fact set forth
herein, but all other covenants, terms, conditions and provisions hereof
shall nevertheless continue to be valid and enforceable.
13.10 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute but one and the same instrument.
13.11 Consent to Credit References. The Borrowers hereby consent to
----------------------------
the disclosure of information regarding the Borrowers and their
relationships with the Lenders to Persons making credit inquiries to the
Lenders. This consent is revocable by the Borrowers at any time upon
Notice to the Lenders as provided in Section 10 hereof.
13.12 Consent to Jurisdiction. The Borrowers, the Credit Agent and
-----------------------
each of the Lenders hereby agree that any action or proceeding under the
Loan Documents, the Notes or any document delivered pursuant hereto may be
commenced against it in any court of competent jurisdiction within the
State of Minnesota, by service of process by first class registered or
certified mail, return receipt requested, addressed to such Person at its
address last designated under the Notices provisions herein. The
Borrowers, the Credit Agent and each of the Lenders agree that any such
suit, action or proceeding arising out of or relating to this Agreement or
any other such document may be instituted in the Hennepin County, State
District Court or in the United States District Court for the District of
Minnesota at the option of the Credit Agent; and the Borrowers, the Credit
Agent and each of the Lenders hereby waive any objection to the
jurisdiction or venue of any such court with respect to, or the convenience
of any court as a forum for, any such suit, action or proceeding. Nothing
herein shall affect the right of the Credit Agent or any Lender to
accomplish service of process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Borrowers in
any other jurisdiction or court.
13.13 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute but one and the same instrument.
13.14 Confidentiality of Information. The Lenders shall use their
------------------------------
usual and customary efforts (as applied to public companies) to assure that
information about the Borrowers and their operations, affairs and financial
condition not generally disclosed to the public or to trade and other
creditors that is furnished to the Lenders pursuant to the provisions
hereof is used only for the purposes of this Agreement and any other
relationship between the Lenders and the Borrowers, and shall not be
divulged to any Person other than the Lenders, their Affiliates and their
respective officers, directors, employees and agents, except: (a) to their
attorneys and accountants, (b) in connection with the enforcement of the
rights of the Credit Agent, the Collateral Agent and the Lenders hereunder
and under the other Loan Documents or
otherwise in connection with litigation involving the Borrowers, (c) in
connection with assignments and participations and the solicitation of
prospective assignees and participants referred to in Section 13.3 hereof,
provided that the assignee, participant or prospective assignee or
participant agrees to be bound by the terms of this Section 13.14 and (d)
as may otherwise be required or requested by any applicable law, rule,
regulation or judicial process, the opinion of the applicable Lender's
counsel concerning the making of such disclosure to be binding on the
parties hereto. The Lenders shall not incur any liability to the Borrowers
by reason of any disclosure permitted by this Section 13.14.
13.15 WAIVER OF JURY TRIAL. THE BORROWERS, THE CREDIT AGENT AND EACH
--------------------
OF THE LENDERS HEREBY (a) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY
OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (b) WAIVES ANY RIGHT TO TRIAL
BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN,
KNOWINGLY AND VOLUNTARILY, BY THE BORROWERS, THE CREDIT AGENT AND EACH OF
THE LENDERS, AND THIS WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH
INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT OF A JURY TRIAL WOULD
OTHERWISE ACCRUE. THE CREDIT AGENT, THE LENDERS AND THE BORROWERS ARE
HEREBY AUTHORIZED AND REQUESTED TO SUBMIT THIS AGREEMENT TO ANY COURT
HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES HERETO, SO AS
TO SERVE AS CONCLUSIVE EVIDENCE OF THE FOREGOING WAIVER OF THE RIGHT TO
JURY TRIAL. FURTHER, THE CREDIT AGENT, THE BORROWERS AND EACH OF THE
LENDERS HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF ANY OF THEM,
RESPECTIVELY, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO ANY OF THE
UNDERSIGNED THAT THE CREDIT AGENT, THE BORROWERS OR ANY OF THE LENDERS WILL
NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
13.16 Entire Agreement. This Agreement, the Notes and the other Loan
----------------
Documents represent the final agreement among the parties hereto and
thereto with respect to the subject matter hereof and thereof, and may not
be contradicted by evidence of prior or contemporaneous oral agreements
among such parties. There are no oral agreements among the parties with
respect to the subject matter hereof and thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
BORROWERS:
THE WMF GROUP, LTD.,
a Delaware corporation
By:____________________
Its:___________________
WMF WASHINGTON MORTGAGE CORP.,
a Delaware corporation
By:____________________
Its:___________________
WMF/XXXXXXX, XXXXX ASSOCIATES
LIMITED, a Delaware corporation
By:____________________
Its:___________________
WMF XXXXXXX, LTD., a Michigan
By:____________________
Its:___________________
THE XXXXXX X. XXXXXX COMPANY,
a Texas corporation
By:____________________
Its:___________________
THE XXXXXX X. XXXXXX COMPANY-ARIZONA,
an Arizona corporation
By:____________________
Its:___________________
WMF CARBON MESA ADVISORS, INC.
a Delaware corporation
By:____________________
Its:___________________
Notice Address:
The WMF Group, Ltd.
0000 Xxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, CFO
Telecopier No.: (000) 000-0000
STATE OF _______________ )
) ss
COUNTY OF ______________ )
On _________________, 1999, before me, a Notary Public, personally appeared
________________________________, the of THE WMF GROUP, LTD., a Delaware
corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
______________________________
Notary Public
(SEAL) My Commission Expires:
STATE OF _______________ )
) ss
COUNTY OF ______________ )
On _________________, 1999, before me, a Notary Public, personally appeared
__________________________________________________, the of WMF WASHINGTON
MORTGAGE CORP., a Delaware corporation, personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person whose name is subscribed
to the within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
______________________________
Notary Public
(SEAL) My Commission Expires:
STATE OF _______________ )
) ss
COUNTY OF ______________ )
On _________________, 1999, before me, a Notary Public, personally appeared
_____________________________________________________, the of WMF/XXXXXXX, XXXXX
ASSOCIATES LIMITED, a Delaware corporation, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.
WITNESS my hand and official seal.
______________________________
Notary Public
(SEAL) My Commission Expires:
STATE OF _______________ )
) ss
COUNTY OF ______________ )
On _________________, 1999, before me, a Notary Public, personally appeared
_______________________________________________, the of WMF XXXXXXX, LTD., a
Michigan corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
______________________________
Notary Public
(SEAL) My Commission Expires:
STATE OF _______________ )
)ss
COUNTY OF ______________ )
On _________________, 1999, before me, a Notary Public, personally appeared
____________________________________________________, the of THE XXXXXX X.
XXXXXX COMPANY, a Texas corporation, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
______________________________
Notary Public
(SEAL) My Commission Expires:
STATE OF _______________ )
) ss
COUNTY OF ______________ )
On _________________, 1999, before me, a Notary Public, personally appeared
_______________________________________________, the of THE XXXXXX X. XXXXXX
COMPANY-ARIZONA, an Arizona corporation, personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person whose name is subscribed
to the within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
______________________________
Notary Public
(SEAL) My Commission Expires:
STATE OF _______________ )
) ss
COUNTY OF ______________ )
On _________________, 1999, before me, a Notary Public, personally appeared
_________________________________________________, the of WMF CARBON MESA
ADVISORS, INC., a Delaware corporation, personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person whose name is subscribed
to the within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by
his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
______________________________
Notary Public
(SEAL) My Commission Expire:
CREDIT AGENT:
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:______________
Its: Director
Notice Address:
0000 Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx, Managing
Telecopier No.: (000) 000-0000
LENDERS:
Maximum Warehousing RESIDENTIAL FUNDING CORPORATION,
Commitment: $115,500,000 a Delaware corporation
By:______________
Maximum Servicing Facility Its: Director
Commitment: $ 7,500,000
Notice Address:
Maximum Term Loan 0000 Xxxxxxxxxx Xxxx
Commitment: $ 7,500,000 Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx, Managing
Telecopier No.: (000) 000-0000
STATE OF _______________ )
) ss
COUNTY OF ______________ )
On _________________, _____ before me, a Notary Public, personally appeared
_____________________________________________, the Director of RESIDENTIAL
FUNDING CORPORATION, a Delaware corporation, personally known to me (or proved
to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
______________________________
Notary Public
(SEAL) My Commission Expires:
Maximum Warehousing BANK UNITED
Commitment: $34,500,000 a federal savings bank
By:_________________
Maximum Servicing Facility Its:________________
Commitment: $ 5,000,000
Notice Address:
0000 Xxxxxx Xxxxxxxx Xx., Xxxxx 0000
Maximum Term Loan Xxxxxx, XX 00000
Commitment: $ 5,000,000 Attention: Xxxxx X. Xxxxxx
Regional Director
Telecopier No.: (000) 000-0000
STATE OF _______________ )
) ss
COUNTY OF ______________ )
On _________________, _____ before me, a Notary Public, personally appeared
________________________________________________, the of BANK UNITED, a federal
savings bank, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
______________________________
Notary Public
(SEAL) My Commission Expires:
Maximum Warehousing LASALLE NATIONAL BANK
Commitment: $0 a federal savings bank
By:_______________
Maximum Servicing Facility Its:______________
Commitment: $12,500,000
Notice Address:
000 X. XxXxxxx, Xxxxx 000
Maximum Term Loan Xxxxxxx, XX 00000
Commitment: $12,500,000 Attention: Xxxx Xxx
Telecopier No.: (000) 000-0000
STATE OF _______________ )
) ss
COUNTY OF ______________ )
On _________________, _____ before me, a Notary Public, personally appeared
____________________________________________, the of LASALLE NATIONAL BANK, a
federal savings bank, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
______________________________
Notary Public
(SEAL) My Commission Expires:
