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EXHIBIT 10.12 MORTGAGE LOAN WAREHOUSING AGREEMENT
THIS MORTGAGE LOAN WAREHOUSING AGREEMENT (the "Agreement") is made as
of the _____ day of _________, 1994, by and between CAROLINA INVESTORS, INC., a
________ corporation (the "Company") and FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, a national banking corporation (the "Lender").
STATEMENT OF PURPOSE
The Company has requested the Lender to extend to the Company a
mortgage warehousing line of credit, and the Lender has agreed to do so on the
terms and subject to the conditions set forth herein. All capitalized terms
not otherwise defined herein are defined in Paragraph 10 hereof.
Now, therefore, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
1. Credit Facility.
1(a) Lending Limit. Subject to the conditions set forth
herein, the Lender agrees that it shall from time to time up to and including
the Business Day immediately preceding the Maturity Date, advance loans (the
"Loans" or a "Loan") to the Company in amounts not to exceed, in the aggregate
at any one time outstanding (determined after giving effect to the other
transactions contemplated by the Loan Request pursuant to which said Loan was
requested), the lesser of:
(1) The Credit Limit; and
(2) The Collateral Value of the Borrowing Base.
1(b) Interest Rate. All Loans shall bear interest at the
Applicable Corporate Base Rate.
1(c) Payment of Interest. The Company shall pay to the
Lender interest on Loans outstanding hereunder from the date disbursed to but
not including the date of payment. Interest on Loans shall be payable monthly,
in arrears, as provided in Paragraph 2(d) below.
2. Miscellaneous Lending Provisions.
2(a) Use of Proceeds. The proceeds of all Loans shall be
used by the Company for the purpose of originating and acquiring Mortgage Loans
and for other general corporate purposes in the ordinary course of the
Company's business.
2(b) Request For Loans; Making of Loans. If the Company
desires to borrow a Loan hereunder, the Company shall make a Loan Request to
the Lender no later than 10:00 a.m. (Charlotte, North Carolina time) on the
proposed funding date. The Lender shall make available the proposed Loan by
crediting the amount thereof in immediately available same day
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funds to the Funding Account no later than 4:00 p.m. (Charlotte, North Carolina
time) on such date.
2(c) Note. The obligation of the Company to repay the
Loans shall be evidenced by a note payable to the order of the Lender in the
form attached hereto as Exhibit A (the "Note").
2(d) Interest and Fee Billing and Payment. The Lender
shall, on or before the fifth Business Day of each month, deliver to the
Company an interest and fee billing for the immediately preceding month, which
billing shall set forth interest accrued and payable on Loans and fees payable
hereunder for such month and which billing shall be payable no later than the
second Business Day following receipt thereof by the Company. In the
alternative, the Lender may debit the Company's account(s) maintained with the
Lender for the amount of such accrued interest and fees payable. The Lender
shall send the Company a detailed accounting of the amount of interest and fees
so debited.
2(e) Repayment of Principal. Subject to the prepayment
requirements of Paragraph 2(j) below and the required application of proceeds
from the sale or other disposition of Mortgage Loans as provided in the
Security Agreement, the Company shall pay the principal amount of all Loans on
the Maturity Date.
2(f) Borrowing Base Conformity.
(1) The Company shall cause to be maintained with
the Lender a Borrowing Base such that the Collateral Value of the
Borrowing Base is not less than, at any date, the sum of the aggregate
dollar amount of outstanding Loans.
(2) The Company shall prepay Loans to the Lender,
upon telephonic or facsimile demand by the Lender, on any day in the
amount by which the aggregate principal amount of outstanding Loans
exceeds the Collateral Value of the Borrowing Base, said prepayment to
be made on the date on which demand is made by the Lender if made
prior to 4:00 p.m. (Charlotte, North Carolina time) or, if made later
than 4:00 p.m. (Charlotte, North Carolina time), before 9:00 a.m.
(Charlotte, North Carolina time) on the next Business Day.
(3) If at such time as the Company shall be
required to prepay Loans under this Paragraph 2(f) there shall not
have occurred and be continuing an Event of Default or Potential
Default hereunder, in lieu of prepaying the Loans as required, the
Company may deliver to the Lender additional Eligible Mortgage Loans
such that the Collateral Value of the Borrowing Base, after giving
effect to the inclusion of such Eligible Mortgage Loans in the
Borrowing Base, shall be in compliance with the requirements of
subparagraphs (1) and (2) above.
2(g) Nature and Place of Payments. All payments made on
account of the Obligations shall be made to the Lender and the Lender is hereby
irrevocably authorized to debit the Settlement Account on account thereof. All
payments made on account of the Obligations shall be made without setoff or
counterclaim in lawful money of the United States of America in immediately
available same day funds, free and clear of and without deduction for any
taxes,
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fees or other charges of any nature whatsoever imposed by any taxing authority
and if received by the Lender by 4:00 p.m. (Charlotte, North Carolina time)
such payment will be credited on the Business Day received. If a payment is
received after 4:00 p.m. (Charlotte, North Carolina time) by the Lender, such
payment will be credited on the next succeeding Business Day and interest
thereon shall be payable at the then applicable rate until credited. If any
payment required to be made by the Company 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 thereon shall be payable at the then
applicable rate during such extension.
2(h) Post-Maturity Interest. Any Obligations not paid
when due (whether at stated maturity, upon acceleration or otherwise) shall
bear interest from the date due until paid in full at a per annum rate equal to
two percent (2%) above the interest rate otherwise applicable thereto, or, if
such Obligations do not otherwise bear interest, two percent (2%) above the
Applicable Corporate Base Rate.
2(i) Computations. All computations of interest and fees
payable hereunder shall be based upon a year of 360 days for the actual number
of days elapsed.
2(j) Prepayments.
(1) The Company may voluntarily prepay Loans
hereunder in whole or in part at any time.
(2) Loans hereunder are subject to mandatory
prepayment pursuant to Paragraph 2(f) above and, in addition, by
application of proceeds of the sale or other disposition of Collateral
as provided in the Security Agreement.
2(k) Allocation of Payments Received.
(1) Prior to the occurrence of an Event of
Default and acceleration of all Loans outstanding hereunder or
termination of the commitment of the Lender to advance Loans
hereunder, all amounts received by the Lender shall be applied against
the outstanding Obligations.
(2) Following the occurrence of an Event of
Default and acceleration of all Loans outstanding hereunder or
termination of the commitment of the Lender to advance Loans
hereunder, all amounts received by the Lender on account of the
Obligations shall be applied by the Lender as follows:
(i) First, to the payment of reasonable
costs and expenses incurred by the Lender in the
enforcement of its rights under the Credit Documents,
including, without limitation, all costs and expenses
of collection, attorneys' fees, court costs and
foreclosure expenses;
(ii) Second, to the Lender to be applied
against the Obligations until the Obligations shall
have been paid in full; and
(iii) Third, to such Persons as may be
legally entitled thereto.
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2(l) Fees. The Company shall pay the following fees to
the Lender:
(1) Such closing fees as are agreed to in writing
by the Company and the Lender, said fees to be payable on or before the date of
making the first Loan hereunder.
(2) A commitment fee, such fee to be computed on
a per annum basis payable in monthly installments, in arrears, on the
applicable dates specified in Paragraph 2(d) hereof, each such installment to
be in an amount equal to the product of: (i) the average daily amount by which
the Credit Limit exceeds the amount of Loans outstanding, multiplied by (ii)
0.25%, divided by (iii) 12.
3. Security Agreement; Guaranties; Additional Documents.
3(a) Security Agreement and Financing Statements. On or
before the date hereof, the Company shall execute and deliver to the Lender:
(1) a security agreement in the form of that attached hereto as Exhibit B (the
"Security Agreement"), pursuant to which the Company shall pledge, assign and
grant to the Lender a perfected, first priority security interest in and lien
upon the Collateral, and (2) such UCC financing statements as the Lender may
request.
3(b) Guaranties. On or before the date hereof, the
Company shall cause to be executed and delivered to the Lender by each of the
Guarantors a continuing guaranty substantially in the form of that attached
hereto as Exhibit C (collectively, the "Guaranties").
3(c) Further Documents. The Company agrees to execute and
deliver and to cause to be executed and delivered to the Lender from time to
time such confirmatory and supplementary security agreements, financing
statements and other documents, instruments and agreements as the Lender may
reasonably request, which are in the Lender's judgment necessary or desirable
to obtain for the Lender the benefit of the Credit Documents and the
Collateral.
4. Conditions to Making of Loans.
4(a) First Loan. As conditions precedent to the Lender's
obligation to make the first Loan hereunder:
(1) The Company shall have delivered, or shall
have caused to be delivered, to the Lender, in form and substance
satisfactory to the Lender and its counsel, each of the following:
(i) A duly executed copy of this
Agreement;
(ii) A duly executed copy of the Security
Agreement and of each of the Guaranties;
(iii) A duly executed copy of the Note;
(iv) Duly executed copies of all
financing statements and other documents, instruments
and agreements, properly executed, deemed
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necessary or appropriate by the Lender, in its
reasonable discretion, to obtain for the Lender a
perfected, first priority security interest in and
lien upon the Collateral;
(v) Such credit applications, financial
statements, authorizations and such information
concerning the Company or either of the Guarantors or
the business, operations and conditions (financial
and otherwise) of the Company or either of the
Guarantors as the Lender may reasonably request;
(vi) Certified copies of resolutions of
the Board of Directors of each of the Company and the
Guarantors approving the execution and delivery of
the Credit Documents to which such Person is a party,
the performance of the Obligations and any other
obligations thereunder and the consummation of the
transactions contemplated thereby;
(vii) A certificate of the Secretary or an
Assistant Secretary of each of the Company and the
Guarantors certifying the names and true signatures
of the officers of such Person authorized to execute
and deliver the Credit Documents to which such Person
is a party;
(viii) A copy of the Articles of
Incorporation of each of the Company and the
Guarantors, certified by the respective Secretary or
an Assistant Secretary of such Person as of the date
of this Agreement as being accurate and complete;
(ix) A copy of the Bylaws of each of the
Company and the Guarantors, certified by the
respective Secretary or an Assistant Secretary of
such Person as of the date of this Agreement as being
accurate and complete;
(x) A certificate (A) of the Secretary
of State of the State of South Carolina, certifying
as of a recent date that the Company is in good
standing; (B) of the Secretary of State of South
Carolina, certifying as of a recent date that EFI is
in good standing; and (C) of the Secretary of State
of the State of South Carolina, certifying as of a
recent date that EGI is in good standing;
(xi) An opinion of counsel for the
Company and the Guarantors substantially in the form
of Exhibit D attached hereto and covering such other
matters as the Lender may reasonably request;
(xii) Evidence satisfactory to the Lender
that each of the Funding Account and the Settlement
Account has been opened;
(xiii) A duly completed Borrowing Base
Schedule dated as of the date of the first Loan
hereunder and certified by the Company to be true in
all respects; and
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(xiv) A Covenant Compliance Certificate
demonstrating in detail satisfactory to the Lender
that the Company is in compliance with the covenants
set forth in Paragraphs 7(j), 7(k), 7(l), 7(m), 7(n),
7(o), 7(p), 7(q), 7(r), 7(s), 7(t) and 7(u) below.
(2) All acts and conditions (including, without
limitation, the obtaining of any necessary regulatory approvals and
the making of any required filings, recordings or registrations)
required to be done and performed and to have happened precedent to
the execution, delivery and performance of the Credit Documents and to
constitute the same legal, valid and binding obligations, enforceable
in accordance with their respective terms, shall have been done and
performed and shall have happened in due and strict compliance with
all applicable laws.
(3) All documentation, including, without
limitation, documentation for corporate and legal proceedings in
connection with the transactions contemplated by the Credit Documents
shall be satisfactory in form and substance to the Lender and its
counsel.
(4) All fees required to be paid on or before the
date hereof pursuant to Paragraph 2(l) above shall have been paid
prior to (or will be paid concurrently with) the making of the first
Loan hereunder.
4(b) Ongoing Loans. As conditions precedent to the
Lender's obligation to make any Loan hereunder, including the first Loan, at
and as of the date of advance thereof;
(1) There shall have been delivered to the Lender
a Loan Request therefor;
(2) The representations and warranties of the
Company contained in the Credit Documents shall be accurate and
complete in all respects as if made on and as of the date of such
advance, conversion or continuance;
(3) There shall not have occurred an Event of
Default or Potential Default;
(4) Following the funding of the requested Loan,
the aggregate principal amount of Loans outstanding will not exceed
the lesser of: (i) the Credit Limit and (ii) the Collateral Value of
the Borrowing Base;
(5) There shall not have occurred any material
adverse change in the financial condition, assets, nature of assets,
operations or prospects of the Company from that represented in this
Agreement, the other Credit Documents, or the documents or information
furnished to the Lender in connection herewith or therewith; and
(6) The Required Documents for the Mortgage
Loan(s) being funded therewith shall have been received by the Lender.
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By making a Loan Request to the Lender hereunder, the Company shall be deemed
to have represented and warranted the accuracy and completeness of the
statements set forth in subparagraphs (b)(2) through (b)(6) above.
5. Representations and Warranties of the Company.
The Company represents and warrants to the Lender that:
5(a) Financial Condition. The consolidated financial
statements, dated the Statement Date and the Interim Date, copies of which have
been furnished to the Lender, are complete and correct and have been prepared
to present fairly, in accordance with GAAP, the financial condition of the
Company and its Subsidiaries at such dates and the results of the operations
and changes in financial position of the Company and its Subsidiaries for the
fiscal periods then ended.
5(b) No Change. As of the date hereof, there has been no
material adverse change in the business, operations, assets or financial or
other condition of the Company or its Subsidiaries from that shown on the
consolidated financial statements dated as of the Interim Date referred to in
Paragraph 5(a) above.
5(c) Corporate Existence; Compliance with Law. The
Company: (1) is duly organized, validly existing and in good standing as a
corporation under the laws of the State of South Carolina and is qualified to
do business in each jurisdiction where its ownership of property or conduct of
business requires such qualification and where failure to qualify could have a
material adverse effect on the Company or its property or business or on the
ability of the Company to pay or perform the Obligations, (2) has the corporate
power and authority and the legal right to own and operate its property and to
conduct business in the manner in which it does and proposes so to do, and (3)
is in compliance with all Requirements of Law and Contractual Obligations
including, without limitation, the federal Consumer Credit Protection Act, the
federal Real Estate Settlement Procedures Act, the federal Equal Credit
Opportunity Act, the federal Truth-in-Lending Act, and the regulations
promulgated thereunder, the failure to comply with which could have a material
adverse effect on the business, operations, assets or financial or other
condition of the Company or on the Collateral or the Collateral Value of the
Borrowing Base.
5(d) Corporate Power; Authorization; Enforceable
Obligations. The Company has the corporate power and authority and the legal
right to execute, deliver and perform the Credit Documents and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Credit Documents. The Credit Documents have been duly executed and
delivered on behalf of the Company and constitute legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their respective terms, subject to the effect of applicable bankruptcy and
other similar laws affecting the rights of creditors generally and the effect
of equitable principles whether applied in an action at law or a suit in
equity.
5(e) No Legal Bar. The execution, delivery and
performance of the Credit Documents, the borrowing hereunder and the use of the
proceeds thereof, will not violate any Requirement of Law or any Contractual
Obligation of the Company the violation of which could
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have a material adverse effect on the business, operations, assets or financial
or other condition of the Company or on the Collateral or the Collateral Value
of the Borrowing Base or create or result in the creation of any Lien (except
the Lien created by the Security Agreement) on any assets of the Company.
5(f) No Material Litigation. Except as disclosed on
Exhibit E hereto, no litigation, investigation or proceeding of or before any
court, arbitrator or Governmental Authority is pending or, to the knowledge of
the Company, threatened by or against the Company or against any of its
properties or revenues which is likely to be adversely determined and which, if
adversely determined, is likely to have a material adverse effect on the
business, operations, property or financial or other condition of the Company
or on the Collateral or the Collateral Value of the Borrowing Base.
5(g) Taxes. To the best of the Company's knowledge, all
tax returns that are required to be filed by or on behalf of the Company have
been filed and all taxes shown to be due and payable on said returns or on any
assessments made against the Company or any of its property (other than taxes
which are being contested in good faith by appropriate proceedings and as to
which the Company has established adequate reserves in conformity with GAAP)
have been paid and taxes which unknown to the Company were not paid.
5(h) Investment Company Act. The Company is not an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
5(i) Federal Reserve Board Regulations. The Company is
not engaged and will not engage, principally or as one of its important
activities, in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" within the respective meanings of such terms
under Regulation U. No part of the proceeds of any Loan issued hereunder will
be used, directly or indirectly, for "purchasing" or "carrying" "margin stock"
as so defined or for any purpose which violates, or which would be inconsistent
with, the provisions of the Regulations of the Board of Governors of the
Federal Reserve System.
5(j) ERISA. The Company and each of its ERISA Affiliates
are in compliance in all respects with the requirements of ERISA and no
Reportable Event has occurred under any Plan maintained by the Company or any
of its ERISA Affiliates which is likely to result in the termination of such
Plan for purposes of Title IV of ERISA.
5(k) Assets. The Company has good and marketable title to
all property and assets reflected in the financial statements referred to in
Paragraph 5(a) above, except property and assets sold or otherwise disposed of
in the ordinary course of business subsequent to the respective dates thereof.
The Company has no outstanding Liens on any of its properties or assets and
there are no security agreements to which the Company is a party, nor any title
retention agreements, whether in the form of leases or otherwise, of any
personal property except as permitted under Paragraph 7(a) below.
5(l) Securities Acts. The Company has not issued any
unregistered securities in violation of the registration requirements of
Paragraph 5 of the Securities Act of 1933, as amended, or any other law, and is
not violating any rule, regulation or requirement under the
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Securities Act of 1933, as amended, or the Securities and Exchange Act of 1934,
as amended. The Company is not required to qualify an indenture under the
Trust Indenture Act of 1939, as amended, in connection with its execution and
delivery of the Note.
5(m) Consents, etc. No consent, approval, authorization
of, or registration, declaration or filing with, any Governmental Authority is
required on the part of the Company in connection with the execution and
delivery of the Credit Documents (other than filings to perfect the security
interests granted by it) or the performance of or compliance with the terms,
provisions and conditions hereof or thereof.
5(n) No Other Warehousing Indebtedness. After the funding
of the first Loan hereunder, the Company will have no other mortgage
warehousing Indebtedness other than that shown on Exhibit I attached hereto,
and such mortgage warehousing Indebtedness shown on Exhibit I attached hereto,
together with the Indebtedness evidenced by this Agreement, shall constitute
the sole mortgage warehousing Indebtedness of the Company.
5(o) Ownership. Schedule II attached hereto and
incorporated herein by reference lists all of the shareholders of Company as of
the effective date of this Agreement.
5(p) Subsidiaries. As of the effective date of this
Agreement, the Company has the following two (2) Subsidiaries: (i) Premier
Financial Services, Inc., a __________ corporation, and (ii) The Loan Pro$,
Inc., a ___________ corporation. As of the effective date of this Agreement,
the Company is the sole shareholder of Premier Financial Services, Inc. and
owns eighty percent (80%) of the outstanding capital stock of The Loan Pro$,
Inc.
5(q) Investor Obligations. No consent, approval,
authorization of, or registration, declaration or filing with, any Governmental
Authority, other than those consents, approvals or authorizations already
received, and those registrations, declarations and filings already made, are
required on the part of the Company in connection with its issuance of Investor
Obligations. The Company is authorized and eligible to issue Investor
Obligations.
6. Affirmative Covenants. The Company hereby covenants and
agrees with the Lender that, as long as any Obligations remain unpaid or the
Lender has any obligation to make Loans hereunder, the Company shall:
6(a) Financial Statements. Furnish or cause to be
furnished to the Lender:
(1) Within ninety (90) days after the last day of
each fiscal year of the Company, consolidated statements of income and
cash flows for such year and consolidated balance sheets as of the end
of such year of the Company and its Subsidiaries, presented fairly in
accordance with GAAP and accompanied by an unqualified report of a
firm of independent certified public accountants acceptable to the
Lender and including therewith a copy of any management letter from
such certified public accountants;
(2) Within thirty (30) days after the last day of
each calendar month, consolidated statements of income for such month
and consolidated balance sheets as of the end of such month of the
Company and its Subsidiaries accompanied in each case by
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a Covenant Compliance Certificate of the appropriate officer
of the Company, stating that such financial statements are
prepared fairly in accordance with GAAP and demonstrating in
detail satisfactory to the Lender compliance with the
financial covenants set forth in Paragraphs 7(j), 7(k), 7(l),
7(m), 7(n), 7(o), 7(p), 7(q), 7(r), 7(s), 7(t), and 7(u) below
as of and at the end of such month.
6(b) Certificates; Reports; Other Information. Furnish or
cause to be furnished to the Lender:
(1) Within fifteen (15) days after the last day
of each calendar month, a Monthly Operating Report;
(2) No less frequently than monthly, within ten
(10) days after the last day of each calendar month unless
otherwise requested in writing by the Lender and more
frequently at Lender's request, a report for such month
showing, for all Eligible Mortgage Loans included in the
Borrowing Base during such month, (i) the current unpaid
principal balance of such Eligible Mortgage Loans, and (ii)
the payment status of such Eligible Mortgage Loans, including
information regarding 30, 60 and 90 day delinquencies of such
Eligible Mortgage Loans.
(3) Promptly, such additional financial and other
information, including, without limitation, financial
statements of the Company, and information regarding the
Collateral as the Lender may from time to time reasonably
request;
(4) Promptly, and in any event within five (5)
business days after received, sent or filed
by the Company, (i) copies of any and all forms, reports,
supplements or other documents of any kind filed by the
Company, any Subsidiary of the Company or by either Guarantor
with the Securities Commission of the State of South Carolina;
and (ii) copies of all correspondence between the Securities
Commission of the State of South Carolina and any of the
Company, any Subsidiary of the Company or either Guarantor;
and
(5) Promptly, and in any event within five (5)
business days after filed by the Company, copies of any and
all forms, reports, supplements or other documents of any kind
filed by the Company or by either Guarantor with the
Securities and Exchange Commission.
6(c) Payment of Indebtedness. Pay or otherwise satisfy at or
before maturity or before it becomes delinquent or accelerated, as the case may
be, all its Indebtedness (including taxes), except Indebtedness being contested
in good faith by appropriate proceedings and for which provision is made to the
satisfaction of the Lender for the payment thereof in the event the Company is
found to be obligated to pay such Indebtedness and which Indebtedness is
thereupon promptly paid by the Company.
6(d) Maintenance of Existence and Properties. Maintain
its corporate existence and obtain and maintain all rights, privileges,
licenses, approvals, franchises, properties and assets necessary or desirable
in the normal conduct of its business, including but not limited to
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all approvals with respect to the Securities and Exchange Commission or the
Securities Commission of the State of South Carolina, and comply with all
Contractual Obligations and Requirements of Law (including, without limitation,
any Requirements of Law under or in connection with ERISA, the federal Consumer
Credit Protection Act, the federal Real Estate Settlement Procedures Act, the
federal Equal Credit Opportunity Act, the federal Truth-in-Lending Act, and any
regulations promulgated thereunder), except where the failure to so comply is
not likely to have a material adverse effect on the business, operations,
assets or financial or other condition of the Company or on the Collateral or
the Collateral Value of the Borrowing Base.
6(e) Inspection of Property; Books and Records; Audits.
(1) Keep proper books of record and account in
which full, true and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all dealings and transactions in
relation to its business and activities; and
(2) Permit: (i) representatives of the Lender to
(A) visit and inspect any of its properties and examine and make
abstracts from any of its books and records at any reasonable time and
as often as may reasonably be desired by the Lender (but, prior to the
occurrence of an Event of Default, only upon not less than two
Business Days' prior notice), and (B) discuss the business,
operations, properties and financial and other condition of the
Company with officers and employees of the Company, and with its
independent certified public accountants, and (ii) representatives of
the Lender to conduct periodic operational audits of the Company's
business and operations.
6(f) Notices. Promptly give written notice to the Lender of:
(1) The occurrence of any Potential Default or
Event of Default known to responsible management personnel of the
Company and the proposed method of cure thereof;
(2) Any litigation or proceeding affecting the
Company or the Collateral which could have a material adverse effect
on the Collateral, the Collateral Value of the Borrowing Base or the
business, operations, property, or financial or other condition of the
Company;
(3) A material adverse change known to
responsible management personnel of the Company in the business,
operations, property or financial or other condition of the Company;
and
(4) Any changes in the following senior
management positions of the Company: President, Chief Executive
Officer, Chief Financial Officer, or any Executive Vice President.
6(g) Expenses. Pay all reasonable out-of-pocket costs and
expenses (including fees and disbursements of legal counsel) of the Lender:
(1) incident to the preparation and negotiation of the Credit Documents,
including with respect to or in connection with any waiver
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or amendment thereof or thereto, (2) associated with any periodic audits
conducted pursuant to Paragraph 6(e)(2)(ii) above, and (3) incident to the
enforcement of payment of the Obligations, whether by judicial proceedings or
otherwise, including, without limitation, in connection with bankruptcy,
insolvency, liquidations reorganization moratorium or other similar proceedings
involving the Company or a "workout" of the Obligations. The obligations of
the Company under this Paragraph 6(g) shall be effective and enforceable
whether or not any Loan is advanced by the Lender hereunder and shall survive
payment of all other Obligations.
6(h) Credit Documents. Comply with and observe all terms
and conditions of the Credit Documents.
6(i) Insurance. Obtain and maintain insurance with
responsible companies in such amounts and against such risks as are usually
carried by corporations engaged in similar businesses similarly situated,
including, without limitation, errors and omissions coverage in form and
substance acceptable to Lender, and will use best efforts to obtain an
insurance policy containing fidelity coverage, and furnish the Lender on
request full information as to all such insurance, and to provide within five
(5) days after receipt, certificates or other documents evidencing the renewal
of each such policy.
6(j) Investor Obligations. The Company shall obtain all
consents, approvals and authorizations of, and shall make all registrations,
declarations and filings with, any Governmental Authority which are required on
the part of the Company in connection with its issuance of Investor
Obligations. The Company shall at all times remain authorized and eligible to
issue Investor Obligations.
7. Negative Covenants. The Company hereby agrees that, as long
as any Obligations remain unpaid or the Lender has any obligation to make Loans
hereunder, the Company shall not at any time, directly or indirectly:
7(a) Liens. Create, incur, assume or suffer to exist, any
Lien upon the Collateral except as contemplated by the Security Agreement, or
create, incur, assume or suffer to exist any Lien upon any of its other
property and assets (including servicing rights) except:
(1) Liens for current taxes, assessments or other
governmental charges which are not delinquent or which remain payable
without penalty, or the validity of which are contested in good faith
by appropriate proceedings upon stay of execution of the enforcement
thereof, provided the Company shall have set aside on its books and
shall maintain adequate reserves for the payment of same in conformity
with GAAP;
(2) Liens, deposits or pledges made to secure
statutory obligations, surety or appeal bonds, or bonds for the
release of attachments or for stay of execution, or to secure the
performance of bids, tenders, contracts (other than for the payment of
borrowed money), leases or for purposes of like general nature in the
ordinary course of the Company's business;
(3) Purchase money security interests for
property (except Mortgage Loans) hereafter acquired, conditional sale
agreements, or other title retention
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agreements, with respect to property hereafter acquired; provided,
however, that no such security interest or agreement shall affect any
servicing rights or extend to any property other than the property
acquired; and
(4) Liens securing Permitted Secured Debt.
7(b) Indebtedness. Create, incur, assume or suffer to
exist, or otherwise become or be liable in respect of any Indebtedness except:
(1) The Obligations;
(2) Investor Obligations;
(3) Indebtedness reflected in the financial
statements referred to in Paragraph 5(a) above;
(4) Trade debt incurred in the ordinary course of
business, paid within thirty (30) days after the same has become due
and payable or which is being contested in good faith, provided
provision is made to the satisfaction of the Lender for the eventual
payment thereof in the event it is found that such contested trade
debt is payable by the Company;
(5) Indebtedness secured by Liens permitted under
Paragraph 7(a) above; and
(6) Permitted Other Debt.
7(c) Consolidation and Merger; Change of Business.
Liquidate or dissolve or enter into any consolidation, merger, partnership,
joint venture, syndicate or other combination or make any change in the nature
of its business as a mortgage banker as presently conducted.
7(d) Acquisitions. Without the prior consent of the
Lender (which consent shall not be unreasonably withheld), purchase or acquire
or incur liability for the purchase or acquisition of any or all of the assets
or business of any Person, other than in the normal course of business as
currently conducted.
7(e) Transfer of Stock. Permit the acquisition, purchase,
redemption, retirement, transfer or issuance of any shares of its capital stock
now or hereafter outstanding which would result in EFI owning less than one
hundred percent (100%) of its outstanding capital stock.
7(f) Subsidiaries. Without the prior consent of the
Lender (which consent shall not be unreasonably withheld), organize any
Subsidiary other than those in existence as of the effective date of this
Agreement, or sell any Subsidiary in existence as of the effective date of this
Agreement.
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7(g) Investments; Advances; Guaranties. Make or commit to
make any advance, loan or extension of credit (other than Mortgage Loans made
in the ordinary course of the Company's business) or capital contribution to,
or purchase any stocks, bonds, notes, debentures or other securities of, or
make any other investment in, or guaranty the indebtedness or other obligations
of, any Person, in excess of the level permitted in Paragraph 7(o) below.
7(h) Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of any of the assets of the Company or its Subsidiaries
(other than obsolete or worn out property), whether now owned or hereafter
acquired, other than in the ordinary course of business as currently conducted
and at fair market value (it being expressly agreed and understood that the
sale or other disposition of Mortgage Loans with or without servicing released
and of mortgage servicing rights is in the ordinary course of business).
7(i) Dividends. Without the prior consent of the Lender
(which consent shall not be unreasonably withheld), during any fiscal quarter,
declare and pay any dividends, or return any capital, to its shareholders or
authorize or make any other distribution, payment or delivery of property or
cash to its shareholders as such, or redeem, retire, purchase or otherwise
acquire, directly or indirectly, for a consideration, any shares of any class
of its capital stock now or hereafter outstanding (or any option or warrants
issued by it for or with respect to its capital stock), or set aside any funds
for any of the foregoing purposes; provided, however, that the Company shall
make no dividend or distribution under this Paragraph 7(i) if, at the time of
or after giving effect to such dividend or distribution, an Event of Default
shall have occurred and be continuing.
7(j) Liabilities to Tangible Net Worth Ratio. Permit its
ratio at any date of Total Liabilities to Tangible Net Worth to be more than
35.0:1.0.
7(k) Minimum Tangible Net Worth. Permit its Tangible Net
Worth as of the last day of any month to be less than $2,750,000.00.
7(l) Liabilities to Book Net Worth Ratio. Permit its
ratio at any date of Total Liabilities to Book Net Worth to be more than
20.0:1.0.
7(m) Minimum Book Net Worth. Permit its Book Net Worth as
of the last day of any month to be less than $5,000,000.00.
7(n) Minimum Cash and Cash Equivalents. Permit the amount
of Cash and Cash Equivalents as of the last day of any fiscal quarter to be
less than $500,000.00.
7(o) Maximum Affiliate Receivables. Permit the amount of
Affiliate Receivables to exceed an amount equal to (i) $21,000,000.00, less
(ii) one hundred percent (100%) of all Affiliate Receivables owed to the
Company by any Affiliate of the Company at the time of the sale of such
Affiliate.
7(p) Non-Performing Assets to Mortgage Loans Ratio.
Permit its ratio at any date of the outstanding principal balance of all
Mortgage Loans owned by the Company to Non-Performing Assets, each calculated
as of such date, to be less than 5.0:1.0.
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7(q) Non-Performing Assets to Book Net Worth Ratio.
Permit its ratio at any date of Non-Performing Assets as of such date to Book
Net Worth to be more than 1.75:1.0.
7(r) Non-Performing Assets to Tangible Net Worth Ratio.
Permit its ratio at any date of Non- Performing Assets as of such date to
Tangible Net Worth to be more than 3.0:1.0.
7(s) Delinquency Ratio. Permit its ratio of all Mortgage
Loans owned by the Company to Mortgage Loans with respect to which any payment
of principal or interest is more than thirty (30) days past due the payment due
date set forth in the underlying loan documents to be less than 5.0:1.0.
7(t) Interest Coverage. Permit, as of the last day of any
month, the amount of interest actually received by the Company during such
month with respect to Mortgage Loans owned by the Company to be less than the
amount of interest expense incurred by the Company during such month with
respect to (i) Investor Obligations, (ii) the Obligations, and (iii) any other
Indebtedness of the Company to financial institutions with respect to term
loans or revolving credit facilities under which the Company is a borrower.
7(u) Cash Basis EBITDA to Interest Expense Ratio. Permit
its ratio, as of the last day of any month, of Cash Basis EBITDA for such
month, to the amount of interest expense incurred by the Company during such
month with respect to (i) Investor Obligations, (ii) Obligations and (iii) any
other Indebtedness of the Company owed to financial institutions with respect
to term loans or revolving credit facilities under which the Company is a
borrower, to be less than 1:15:1.0.
8. Events of Default. Upon the occurrence of any of the
following events (an "Event of Default"):
8(a) The Company shall fail to pay principal or interest on
any Loan or any fee payable pursuant to Paragraph 2(l) above or any amount
payable pursuant to Paragraph 2(f)(2) above when due; or
8(b) Any representation or warranty made or deemed made by
the Company or either of the Guarantors in any Credit Document or in connection
with any Credit Document shall be inaccurate or incomplete in any respect on or
as of the date made or deemed made; or
8(c) The Company shall fail to maintain its corporate
existence or shall default in the observance or performance of any covenant or
agreement contained in Paragraph 7 above or in the Security Agreement;
provided, however, that the failure of the Company to perform any covenant
contained in Paragraphs 7(j) through 7(u), inclusive, above, shall not
constitute an Event of Default hereunder unless such failure has continued
uncured for thirty (30) days; or
8(d) The Company shall fail to observe or perform any other
term or provision contained in the Credit Documents and such failure shall
continue for thirty (30) days after the Company has received notice of such
failure; or
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8(e) The Company shall default in any payment of principal of
or interest on any Indebtedness or in any payment of principal or of interest
with respect to the Investor Obligations or Indebtedness owed by the Company to
any financial institution, or any other event shall occur, the effect of which
is to permit such Indebtedness to be declared or otherwise to become due prior
to its stated maturity; or
8(f) (1) The Company or either of the Guarantors shall
commence any case, proceeding or other action (i) relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to the Company or either of the Guarantors, or
seeking to adjudicate the Company or either of the Guarantors a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to the
Company or either of the Guarantors or the debts of any of them, or (ii)
seeking appointment of a receiver, trustee, custodian or other similar official
for the Company or for all or any substantial part of the Company's assets, or
the Company or either of the Guarantors shall make a general assignment for the
benefit of its or their creditors; or (2) there shall be commenced against the
Company or either of the Guarantors any case, proceeding or other action of a
nature referred to in clause (1) above which (i) results in the entry of an
order for relief or any such adjudication or appointment, or (ii) remains
undismissed, undischarged or unbonded for a period of sixty (60) days; or (3)
there shall be commenced against the Company or either of the Guarantors any
case, proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or substantially all of the
assets of any of them which results in the entry of an order for any such
relief which shall not have been vacated, discharged, stayed, satisfied or
bonded pending appeal within sixty (60) days from the entry thereof; or (4) the
Company or either of the Guarantors shall take any action in furtherance of, or
indicating its or their consent to, approval of, or acquiescence in (other than
in connection with a final settlement), any of the acts set forth in clauses
(1), (2) or (3) above; or (5) the Company or either of the Guarantors shall
generally not, or shall be unable to, or shall admit in writing its or their
inability to pay its or their debts as they become due; or
8(g) (1) The Company or any of its ERISA Affiliates shall
engage in any "prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Code) involving any Plan, (2) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall
exist with respect to any Plan, (3) a Reportable Event shall occur with respect
to, or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or institution of proceedings is, in the reasonable
opinion of the Lender, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, and, in the case of a Reportable Event, the
continuance of such Reportable Event unremedied for ten days after notice of
such Reportable Event pursuant to Section 4043(a), (c) or (d) of ERISA is given
or the continuance of such proceedings for ten days after commencement thereof,
as the case may be, (4) any Single Employer Plan shall terminate for purposes
of Title IV of ERISA, (5) any withdrawal liability to a Multiemployer Plan
shall be incurred by the Company or any of its ERISA Affiliates or (6) any
other event or condition shall occur or exist; and in each case in clauses (1)
through (6) above, such event or condition, together with all other such events
or conditions, if any, is likely to subject the Company or any of its
respective ERISA Affiliates to any tax, penalty or other liabilities in the
aggregate material in relation to the business,
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operations, property or financial or other condition of the Company or any of
its ERISA Affiliates; or
8(h) One or more judgments or decrees shall be entered
against the Company and all such judgments or decrees shall not have been
vacated, discharged, stayed, satisfied or bonded pending appeal within sixty
(60) days from the entry thereof; or
8(i) Either of the Guarantors shall fail to observe or
perform any term or provision of the Guaranty to which such Guarantor is a
party or shall attempt to rescind or revoke such Guaranty, with respect to
future transactions or otherwise; or
8(j) Any acquisition, purchase, redemption, retirement,
transfer or issuance of the Company's capital stock shall occur in violation of
Paragraph 7(e) above; or
8(k) Any acquisition, purchase, redemption, retirement,
transfer or issuance of the capital stock of EFI shall occur which would result
in EGI failing to own at least eighty percent (80%) of the outstanding capital
stock of EFI; or
8(l) The principal amount of the Investor Obligations
shall decline by more than twenty percent (20%) during any month;
THEN:
(1) Automatically upon the occurrence of an Event
of Default under Paragraph 8(f) above; and
(2) In all other cases, at the option of the
Lender,
the Lender's obligation to make Loans hereunder shall terminate and the
principal balance of outstanding Loans and interest accrued but unpaid thereon
shall become immediately due and payable, without demand upon or presentment to
the Company, which are expressly waived by the Company.
9. Miscellaneous Provisions.
9(a) Assignment. The Company may not assign its rights or
obligations under this Agreement without the prior written consent of the
Lender. The Lender shall not assign its rights and obligations under this
Agreement to any other party not a party to this Agreement as of the date
hereof; provided, however, that the Lender may at any time pledge or assign all
or any portion of the Lender's rights under this Agreement and the other Credit
Documents to a Federal Reserve Bank. Subject to the foregoing, all provisions
contained in this Agreement or any document or agreement referred to herein or
relating hereto shall inure to the benefit of the Lender, its successors and
assigns, and shall be binding upon the Company, its successors and assigns.
9(b) Amendment. Neither this Agreement nor any of the other
Credit Documents may be amended or terms or provisions hereof or thereof waived
unless such amendment or
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waiver is in writing and signed by the Lender and the Company. It is expressly
agreed and understood that the failure by the Lender to elect to accelerate
amounts outstanding hereunder or to terminate the obligation of the Lender to
make Loans hereunder shall not constitute an amendment or waiver of any term or
provision of this Agreement.
9(c) Cumulative Rights; No Waiver. The rights, powers and
remedies of the Lender under the Credit Documents are cumulative and in
addition to all rights, powers and remedies provided under any and all
agreements among the Company and the Lender relating hereto, at law, in equity
or otherwise. Any delay or failure by the Lender to exercise any right, power
or remedy shall not constitute a waiver thereof by the Lender, and no single or
partial exercise by the Lender of any right, power or remedy shall preclude
other or further exercise thereof or any exercise of any other rights, powers
or remedies.
9(d) Entire Agreement. This Agreement and the documents and
agreements referred to herein embody the entire agreement and understanding
between the parties hereto and supersede all prior agreements and
understandings relating to the subject matter hereof and thereof.
9(e) Survival. All representations, warranties, covenants
and agreements on the part of the Company and the Guarantors contained in the
Credit Documents shall survive the termination of this Agreement and shall be
effective until the Obligations are paid and performed in full or longer as
expressly provided herein.
9(f) Notices. All notices given by any party to the others
under the Credit Documents shall be in writing unless otherwise provided for
herein, delivered personally or by depositing the same in the United States
mail, registered, with postage prepaid, addressed to the party at the address
set forth on Schedule I attached hereto. Any party may change the address to
which notices are to be sent by notice of such change to each other party given
as provided herein. Such notices shall be effective on the date received or,
if mailed, on the third Business Day following the date mailed.
9(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina.
9(h) Sub-Participation by Lender. The Lender may at any time
sell to one or more financial institutions (each of such financial institutions
being herein called a "Participant") participating interests in any of the
Obligations held by the Lender and its commitments hereunder; provided,
however, that: (1) no participation contemplated by this Paragraph 9(h) shall
relieve the Lender from its obligations hereunder or under any other Credit
Document; (2) the Lender shall remain solely responsible for the performance of
such obligations; and (3) the Company shall continue to deal solely and
directly with the Lender in connection with the Lender's rights and obligations
under the Credit Documents.
9(i) Counterparts. This Agreement and the other Credit
Documents may be executed in any number of counterparts, all of which together
shall constitute one agreement.
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9(j) Exculpatory Provisions. The Lender shall be liable to
the Company for any action taken or omitted to be taken by the Lender under or
in connection with the Credit Documents or with respect to the Collateral only
to the extent of actual damages suffered by the Company as a result of such
action or inaction and only to the extent that such action or inaction is not
taken or omitted at the Company's direction.
9(k) Indemnification. The Company agrees to indemnify,
defend and hold harmless the Lender from and against any and all claims,
obligations, penalties, actions, suits, judgments, costs, disbursements,
losses, liabilities and damages (including, without limitation, attorneys'
fees) of any kind whatsoever which may at any time be imposed on, assessed
against or incurred by the Lender in any way relating to or arising out of the
Credit Documents or any documents contemplated by or referred to therein or the
transactions contemplated thereby or any action taken or omitted to be taken by
the Lender in connection with the foregoing; provided, the Company shall not be
liable for any portion of any such claims, obligations, etc., arising out of or
resulting from the negligence, gross negligence or willful misconduct of the
Lender or its employees. The indemnification obligations of the Company under
this Paragraph 9(k) shall survive termination of this Agreement and payment in
full of the Obligations.
10. Definitions. For purposes of this Agreement, the terms set
forth below shall have the following meanings:
"Additional Required Documents" shall mean for any Mortgage Loan those
items described on Exhibit F attached hereto.
"Affiliate" shall mean, as to any Person, any other Person directly or
indirectly controlling, controlled by or under direct or indirect common
control with, such Person. "Control" as used herein means the power to direct
the management and policies of such Person.
"Affiliate Receivables" shall mean that amount reflected on the
consolidated balance sheet of the Company and its Subsidiaries as due to the
Company from Affiliates of the Company (and as determined in accordance with
GAAP).
"Agreement" shall mean this Agreement, as the same may be amended,
extended or replaced from time to time.
"Applicable Corporate Base Rate" shall mean, at any time, the
Corporate Base Rate at such time plus zero percent (0.00%) per annum.
"Book Net Worth" shall mean the excess of total assets of the Company
and its Subsidiaries over Total Liabilities of the Company and its Subsidiaries
determined in accordance with GAAP.
"Borrowing Base" shall mean at any date all Eligible Mortgage Loans
delivered to and held by the Lender or otherwise identified as Collateral under
the Security Agreement as collateral security for the Obligations.
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"Borrowing Base Schedule" shall mean a schedule prepared by the Lender
and certified to by the Company in the form of that attached hereto as Exhibit
G.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banks in Charlotte, North Carolina are authorized or obligated to
close their regular banking business.
"Capitalized Lease Obligations" of any Person shall mean the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Cash and Cash Equivalents" shall mean (i) negotiable currency and
coins of the United States held by the Company or its Subsidiaries, (ii)
balances in non-restricted bank deposit accounts maintained by or for the
benefit of the Company or its Subsidiaries which are freely accessible by the
Company or its Subsidiaries, (iii) securities held by or for the benefit of the
Company or its Subsidiaries which are issued or directly and fully guaranteed
or insured by the United States or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is pledged in
support thereof) having maturities of not more than six (6) months from the
date of acquisition, (iv) time deposits and certificates of deposit of any
commercial bank incorporated in the United States of recognized standing having
capital and surplus in excess of $500,000,000 held by or for the benefit of the
Company or its Subsidiaries with maturities of not more than six months from
the date of acquisition by the Company or its Subsidiaries, (v) investments of
the Company or its Subsidiaries in money market funds substantially all the
assets of which are comprised of securities of the types described in clauses
(iii) or (iv) above, and (vi) amounts available to be borrowed by the Company
under, and pursuant to the terms and provisions governing, any revolving lines
of credit made available to the Company.
"Cash Basis EBITDA" shall mean, for any period and without
duplication, the sum of the following for the Company and its Subsidiaries: (a)
net income (or loss) after taxes for such period, plus (b) to the extent
reflected in net income (or loss) after taxes for such period, the aggregate
for such period of (i) interest expense on all Indebtedness of the Company and
its Subsidiaries, (ii) provision for income taxes, (iii) depreciation and
amortization expense, and (iv) any other non-cash expenses; minus (c) to the
extent reflected in net income (or loss) after taxes for such period, the
aggregate for such period of (i) extraordinary gains (or plus any extraordinary
losses) for such period, (ii) all amounts which reflect increases in equity
accounts or asset values (whether due to write-ups or otherwise) which are not
directly related to cash investments; (iii) dividends or other distributions to
the Company or its Subsidiaries which have been declared or allocated but which
have not yet been paid to the Company or its Subsidiaries or which have been
paid in some form other than cash (e.g. stock dividends); and (iv) any other
non-cash revenues. For the purposes of this definition, "net income (or loss)"
shall mean net income (or loss) as calculated in accordance with GAAP.
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"Change of Control" shall mean if the persons who are directors of the
Company as of the date hereof (together with those who subsequently become
directors of the Company and whose election, or nomination for election by the
Company's stockholders, is approved by the vote of at least three-quarters of
the directors who were either directors as of the date hereof or directors
elected or nominated to succeed them as herein provided), shall cease to
constitute a majority of the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral" shall have the meaning given such term in the Security
Agreement.
"Collateral Value of the Borrowing Base" shall mean at any date the
sum of the Unit Collateral Values of all Eligible Mortgage Loans included in
the Borrowing Base at such date (including Eligible Mortgage Loans shipped to a
permanent investor for purchase pending delivery of the sales proceeds thereof
to the Settlement Account).
"Commonly Controlled Entity" of a Person shall mean a Person, whether
or not incorporated, which is under common control with such Person within the
meaning of Section 414(c) of the Internal Revenue Code.
"Company" shall have the meaning given such term in the introductory
paragraph hereof.
"Contact Office" shall mean the office of the Lender at One First
Union Center, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000.
"Contractual Obligation" as to any Person shall mean any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Corporate Base Rate" shall mean a rate per annum equal to the rate
announced from time to time by the Lender to be its "Prime Rate" as such "Prime
Rate" may change from time to time, said changes to occur on the first date the
"Prime Rate" changes; it being understood that the "Prime Rate" is the rate
announced by the Lender from time to time as its "Prime Rate" and is not
necessarily the lowest interest rate charged by the Lender to its customers.
"Covenant Compliance Certificate" shall mean a certificate in the form
of Exhibit H attached hereto.
"Credit Documents" shall mean this Agreement, the Security Agreement,
the Guaranties, the Note and each other document, instrument and agreement
executed by the Company or the Guarantors in connection herewith, as any of the
same may be amended, extended or replaced from time to time.
"Credit Limit" shall mean $10,000,000.00.
"EFI" shall mean Emergent Financial, Inc., a South Carolina
corporation.
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"EGI" shall mean Emergent Group, Inc., a South Carolina corporation.
"Eligible Mortgage Loan" shall mean a Mortgage Loan with respect to
which each of the following statements shall be accurate and complete (and the
Company by confirming the inclusion of such Mortgage Loan in any computation of
the Collateral Value of the Borrowing Base shall be deemed to so represent and
warrant to the Lender at and as of the date of such computation):
(a) Said Mortgage Loan is a binding and valid obligation
of the Obligor thereon, in full force and effect and enforceable in accordance
with its terms.
(b) Said Mortgage Loan is genuine in all respects as
appearing on its face and as represented in the books and records of the
Company and all information set forth therein is true and correct.
(c) Said Mortgage Loan is free of any default of any
party thereto (including the Company), other than as expressly permitted
pursuant to subparagraph (d) below, counterclaims, offsets and defenses and
from any rescission, cancellation or avoidance, whether by operation of law or
otherwise.
(d) No payment under said Mortgage Loan is more than
sixty (60) days past due the payment due date set forth in the underlying
promissory note and deed of trust (or mortgage).
(e) Said Mortgage Loan contains the entire agreement of
the parties thereto with respect to the subject matter thereof, has not been
modified or amended in any respect and is free of concessions or understandings
with the Obligor thereon of any kind not expressed in writing therein.
(f) Said Mortgage Loan is in all respects as required by
and in accordance with all applicable laws and regulations governing the same,
including, without limitation, the federal Consumer Credit Protection Act, the
federal Real Estate Settlement Procedures Act, the federal Equal Credit
Opportunity Act, the federal Truth-in-Lending Act, and the regulations
promulgated thereunder and all applicable usury laws and restrictions, and all
notices, disclosures and other statements or information required by law or
regulation to be given, and any other act required by law or regulation to be
performed, in connection with said Mortgage Loan have been given and performed
as required.
(g) All advance payments and other deposits on said
Mortgage Loan have been paid in cash, and no part of said sums has been loaned,
directly or indirectly, by the Company to the Obligor and there have been no
prepayments on account of said Mortgage Loan, and said Mortgage Loan has been
fully advanced.
(h) At all times said Mortgage Loan will be free and
clear of all Liens, except in favor of the Lender.
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(i) The Property covered by said Mortgage Loan is insured
against loss or damage by fire and all other hazards normally included within
standard extended coverage in accordance with the provisions of said Mortgage
Loan with the Company named as a loss payee thereon.
(j) The Property covered by said Mortgage Loan is free
and clear of all Liens except of the Company subject only to (1) the Lien of
current real property taxes and assessments not yet due and payable; (2)
covenants, conditions and restrictions, rights of way, easements and other
matters of the public record, as of the date of recording, as are acceptable to
mortgage lending institutions generally and specifically referred to in a
lender's title insurance policy delivered to the originator of the Mortgage
Loan and (i) referred to or otherwise considered in the appraisal made for the
originator of the Mortgage Loan or (ii) which do not materially adversely
affect the appraised value of the Property as set forth in such appraisal; (3)
other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage Loan or the use, enjoyment, value or marketability of the
related Property; and (4) Liens subordinate in priority to the Lien in favor of
the Company.
(k) If said Mortgage Loan has been withdrawn from the
possession of the Lender and:
(1) If said Mortgage Loan was withdrawn by the
Company for purposes of correcting clerical or other nonsubstantive
documentation problems pursuant to a trust receipt, as permitted under
Paragraph 6 of the Security Agreement, the Unit Collateral Value of
said Mortgage Loan when added to the Unit Collateral Value of other
Mortgage Loans included in the calculation of the Collateral Value of
the Borrowing Base the promissory notes for which have been similarly
withdrawn by the Company does not exceed $500,000, and the promissory
note and other documents relating to said Mortgage Loan are returned
to the Lender within ten (10) calendar days from the date of
withdrawal; and
(2) If said Mortgage Loan was shipped by the
Lender directly to a permanent investor for purchase, the full
purchase price therefor has been received by the Lender (or said
Mortgage Loan has been returned to the Lender) within thirty (30) days
from the date of shipment by the Lender.
(l) The outstanding principal balance of such Mortgage
Loan is not less than $40,000 and does not exceed $350,000.
(m) The improvements on the Property consist of a
completed one-to-four unit single family residence, including but not limited
to a condominium, planned unit development or townhouse but excluding in any
event a co-op or a mobile home.
(n) There has been delivered to the Lender the Required
Documents for said Mortgage Loan.
23
24
(o) Said Mortgage Loan is not subject to any servicing
arrangement with any Person other than the Company nor are any servicing rights
relating to said Mortgage Loan subject to any Lien, claim, interest or negative
pledge in favor of any Person other than as permitted hereunder.
(p) Said Mortgage Loan was originated after January 1,
1993.
(q) Said Mortgage Loan has not previously been included
in the Borrowing Base, then shipped to an investor and returned, for whatever
reason, to the Lender.
(r) The Company obtained an appraisal in connection with
the origination of said Mortgage Loan as would satisfy all appraisal
requirements for said Mortgage Loan if such had been originated by a federally
insured depositary institution.
(s) Said Mortgage Loan is secured by a first priority
mortgage or deed of trust on the Property covered thereby.
(t) Said Mortgage Loan is not a revolving credit
facility;
(u) The proceeds of said Mortgage Loan were used by the
Obligor thereon to purchase the Property and improvements thereon covered
thereby or to refinance a previous loan secured by the Property and
improvements thereon covered thereby, and were not used by the Obligor thereon
to construct the improvements on the Property covered thereby.
(v) No real property taxes or insurance payments due and
payable with respect to the Property covered by said Mortgage Loan are past due
the payment due date thereof.
(w) The original principal balance of said Mortgage Loan
is not greater than eighty-five percent (85%) of the fair market value of the
Property covered by such Mortgage Loan, as shown on the appraisal delivered to
Lender as a Required Document in connection with such Mortgage Loan.
Provided, however, that notwithstanding the compliance of any Mortgage Loan
delivered to Lender with the requirements set forth in subparagraphs (a)
through (w) above, Lender shall have the right to exclude such Mortgage Loan as
an "Eligible Mortgage Loan" hereunder by reason of Lender's reasonable concerns
regarding the appraisal of the Property covered thereby, the credit history or
employment stability of the Obligor thereon, the market value of the Mortgage
Loan or of the Property covered thereby, or the enforceability of any
agreement, document or instrument securing such Mortgage Loan.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may from time to time be supplemented or amended.
"ERISA Affiliate" shall mean, with respect to any Person, any trade or
business (whether or not incorporated) that is a member of the group of which
such Person is a member and which is treated as a single employer under Section
414 of the Internal Revenue Code of 1986, as amended, and the rules and
regulations thereunder in effect from time to time.
24
25
"Event of Default" shall have the meaning set forth in Paragraph 8
above.
"Funding Account" shall mean Account No. _____________ maintained in
Lender's name alone with the Lender at the Contact Office.
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time.
"Governmental Authority" shall mean any nation or governments any
state or other political subdivision thereof, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranties" shall have the meaning given such term in Paragraph 3(b)
above, as both or either of such instruments may be amended, extended or
replaced from time to time, and "Guaranty" shall mean either of such
instruments, as the context requires.
"Guarantors" shall mean, collectively, EFI and EGI, and "Guarantor"
shall mean either of the foregoing Persons, as the context requires.
"Indebtedness" of any Person shall mean all items of indebtedness
which, in accordance with GAAP and practices thereof, would be included in
determining liabilities as shown on the liability side of a statement of
condition of such Person as of the date as of which indebtedness is to be
determined, including: without limitation, all obligations for money borrowed
and Capitalized Lease Obligations, and shall also include all indebtedness and
liabilities of others assumed or guaranteed by such Person or in respect of
which such Person is secondarily or contingently liable (other than by
endorsement of instruments in the course of collection) whether by reason of
any agreement to acquire such indebtedness or to supply or advance sums or
otherwise.
"Interim Date" shall mean September 30, 1994.
"Investor Obligations" shall mean the obligations of the Company, if
any, to pay principal and interest to those Persons who have established
deposit or time deposit accounts with the Company or who are the holders of
certificates of deposit issued by the Company, which obligations shall be
evidenced by promissory notes made payable by the Company to the order of such
Persons.
"Lender" shall have the meaning given such term in the introductory
paragraph hereof.
"Lien" shall mean any security interest, mortgage, pledge, lien, claim
on property, charge or encumbrance (including any conditional sale or other
title retention agreement), any lease in the nature thereof, and the filing of
or agreement to give any financing statement under the Uniform Commercial Code
of any jurisdiction.
"Loan" shall have the meaning given such term in Paragraph 1(a) above.
25
26
"Loan Request" shall mean a request for a Loan conveyed to the Lender
from a duly authorized officer of the Company substantially in the form of that
attached hereto as Exhibit L, with such request to be confirmed in writing upon
the request of the Lender.
"Maturity Date" shall mean the earlier of: (a) March 31, 1995, as
such date may be extended from time to time in writing by the Lender, in its
sole discretion, and (b) the date the Lender terminates its obligation to make
further Loans hereunder pursuant to Paragraph 8 above.
"Monthly Operating Report" shall mean a report substantially in the
form of that attached hereto as Exhibit K.
"Mortgage Loan" shall mean a residential real estate secured loan,
including, without limitation: (a) a promissory note, any reformation thereof
and related deed of trust (or mortgage) and security agreement; (b) all
guaranties and insurance policies, including, without limitation, all mortgage
and title insurance policies and all fire and extended coverage insurance
policies and rights of the Company to return premiums or payments with respect
thereto; and (c) all right, title and interest of the Company in the Property
covered by said deed of trust (or mortgage).
"Multiemployer Plan" shall mean, as to the Company or any of its ERISA
Affiliates, a Plan of such Person which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Non-Performing Assets" shall mean, as to the Company, (i) the
outstanding principal balance of all Mortgage Loans owned by the Company which
are classified as "non-accruing" or "non-performing" on the most recent Monthly
Operating Report delivered by the Company to the Lender or which are in the
process of foreclosure, and (ii) the amount shown on the most recent
consolidated balance sheet of the Company and its Subsidiaries as the value of
all real property owned by the Company or its Subsidiaries other than any real
property on which the offices of the Company or its Subsidiaries are located.
"Note" shall mean have the meaning given such term in Paragraph 2(c)
hereof.
"Obligations" shall mean any and all debts, obligations and
liabilities of the Company to the Lender (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), arising out of or related to the Credit Documents.
"Obligor" shall mean the Person or Persons obligated to pay the
Indebtedness which is the subject of a Mortgage Loan.
"Participant" shall have the meaning given such term in Paragraph 9(h)
above.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.
26
27
"Permitted Other Debt" shall mean that Indebtedness described as
"Permitted Other Debt" on Exhibit I attached hereto.
"Permitted Secured Debt" shall mean that Indebtedness which is the
subject of a Lien and described as "Permitted Secured Debt" on Exhibit I
attached hereto.
"Person" shall mean any corporation, natural person, firm, joint
venture, partnerships, trust, unincorporated organization or Governmental
Authority.
"Plan" shall mean, as the Company or any of its ERISA Affiliates, any
pension plan that is covered by Title IV of ERISA and in respect of which such
Person or a Commonly Controlled Entity of such Person is an "employer" as
defined in Section 3(5) of ERISA.
"Potential Default" shall mean an event which but for the lapse of
time or the giving of notice, or both, would constitute an Event of Default.
"Proceeds" shall mean whatever is receivable or received when
Collateral or proceeds are sold, collected, exchanged or otherwise disposed of,
whether such disposition is voluntary or involuntary, and includes, without
limitation, all rights to payment, including return premiums, with respect to
any insurance relating thereto.
"Property" shall mean the real property, including the improvements
thereon, and the personal property (tangible and intangible) which are
encumbered pursuant to a Mortgage Loan.
"Reportable Event" shall mean a reportable event as defined in Title
IV of ERISA, except actions of general applicability by the Secretary of Labor
under Section 110 of ERISA.
"Required Documents" shall mean for any Mortgage Loan those items
described on Exhibit J attached hereto.
"Requirements of Law" shall mean, as to any Person, the Articles or
Certificate of Incorporation and Bylaws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or a final
and binding determination of an arbitrator or a determination of a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
"Security Agreement" shall have the meaning given such term in
Paragraph 3(a) above, as the same may be amended, extended or replaced from
time to time.
"Settlement Account" shall mean Account No. _____________ maintained
in the name of the Lender at the Contact Office.
"Single Employer Plan" shall mean, as to the Company or any of its
ERISA Affiliates, any Plan of such Person which is not a Multiemployer Plan.
"Statement Date" shall mean December 31, 1993.
27
28
"Subsidiary" shall mean any corporation, partnership or joint venture
more than fifty percent (50%) of the stock or other ownership interest of which
having by the terms thereof ordinary voting power to elect the board of
directors, managers or trustees of such corporation, partnership or joint
venture (irrespective of whether or not at the time stock of any other class or
classes of such corporation, partnership or joint venture shall have or might
have voting power by reason of the happening of any contingency) shall, at the
time as of which any determination is being made, be owned, either directly or
through Subsidiaries.
"Tangible Net Worth" shall mean at any date:
(a) Book Net Worth, minus
(b) The sum of all assets of the Company and its
Subsidiaries which would be classified as intangible assets under GAAP,
including, without limitation, purchased and capitalized value of servicing
rights, excess servicing fees, goodwill (whether representing the excess cost
over book value of assets acquired or otherwise), patents, trademarks, trade
names, copyrights, franchises and deferred charges (including, without
limitation, unamortized debt discount and expense, organization costs and
research and product development costs).
"Total Liabilities" shall mean total liabilities of the Company and
its Subsidiaries determined in accordance with GAAP.
"Unit Collateral Value" shall mean at any time, with respect to each
Eligible Mortgage Loan included in the Borrowing Base, seventy-five percent
(75%) of the unpaid principal balance thereof at such time.
28
29
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and sealed as of the day and year first above written.
CAROLINA INVESTORS, INC.,
[CORPORATE SEAL] a South Carolina corporation
ATTEST:
By By
------------------------ ---------------------------------
Name Name
---------------------- -------------------------------
Title Title
--------------------- ------------------------------
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, a national banking association
[CORPORATE SEAL]
ATTEST:
By By
------------------------ ---------------------------------
Name Name
---------------------- -------------------------------
Title Title
--------------------- ------------------------------
EMERGENT FINANCIAL, INC., a South Carolina
corporation, as a Guarantor
[CORPORATE SEAL]
ATTEST:
By By
------------------------ ---------------------------------
Name Name
---------------------- -------------------------------
Title Title
--------------------- ------------------------------
EMERGENT GROUP, INC., a South Carolina
corporation, as a Guarantor
[CORPORATE SEAL]
ATTEST:
By By
------------------------ ---------------------------------
Name Name
---------------------- -------------------------------
Title Title
--------------------- ------------------------------
29
30
LIST OF SCHEDULES AND EXHIBITS
Schedule I Schedule of Addresses
Schedule II Shareholders of Company
Exhibit A Form of Promissory Note
Exhibit B Form of Security and Collateral Agency Agreement
Exhibit C Form of Guaranty
Exhibit D Form of Legal Opinion of Counsel for the Company and the
Guarantors
Exhibit E Litigation Schedule
Exhibit F Schedule of Additional Required Documents
Exhibit G Form of Borrowing Base Schedule
Exhibit H Form of Covenant Compliance Certificate
Exhibit I Schedule of Permitted Other Debt (Including Permitted Secured
Debt)
Exhibit J Schedule of Required Documents
Exhibit K Form of Monthly Operating Report
Exhibit L Form of Loan Request
30
31
SCHEDULE I
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF ____________, 1994
BY AND BETWEEN CAROLINA INVESTORS, INC. AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
SCHEDULE OF ADDRESSES
BORROWER:
Carolina Investors, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention:
-------------------
BANK:
First Union National Bank of North Carolina
Xxx Xxxxx Xxxxx Xxxxxx, XXXX-0, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Mr. R. Xxxxxx Xxxx
GUARANTORS:
Emergent Financial, Inc.
---------------------------------------------------
---------------------------------------------------
Attention:
-------------------------------
Emergent Group, Inc.
---------------------------------------------------
---------------------------------------------------
Attention:
-------------------------------
31
32
SCHEDULE II
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF _____________, 1994
BY AND BETWEEN CAROLINA INVESTORS, INC. AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
SHAREHOLDERS OF COMPANY
COMMON VOTING STOCK
Shareholder Number of Shares
----------- ----------------
------------------------------------------- -----------------
------------------------------------------- -----------------
TOTAL NUMBER OF SHARES
-----------------
PREFERRED STOCK
Shareholder Number of Shares
----------- ----------------
------------------------------------------- -----------------
TOTAL NUMBER OF SHARES
-----------------
32
33
EXHIBIT A
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF __________, 1994
BY AND BETWEEN CAROLINA INVESTORS, INC. AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
FORM OF PROMISSORY NOTE
33
34
EXHIBIT B
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF ___________, 1994
BY AND BETWEEN CAROLINA INVESTORS, INC. AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
FORM OF SECURITY AGREEMENT
34
35
EXHIBIT C
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF _________, 1994
BY AND BETWEEN CAROLINA INVESTORS, INC. AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
FORM OF GUARANTY
35
36
EXHIBIT D
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF __________, 1994
BY AND BETWEEN CAROLINA INVESTORS, INC. AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
FORM OF LEGAL OPINION OF COUNSEL
FOR COMPANY AND GUARANTORS
36
37
EXHIBIT E
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF ___________, 1994
BY AND BETWEEN CAROLINA INVESTORS, INC. AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
LITIGATION SCHEDULE
37
38
EXHIBIT F
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF ___________, 1994
BY AND BETWEEN CAROLINA INVESTORS, INC. AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
SCHEDULE OF ADDITIONAL REQUIRED DOCUMENTS
1. Original disclosure statements complying with Regulation Z
("Truth in Lending") of the Board of Governors of the Federal Reserve System
and all agreements relating thereto;
2. Original Equal Credit Opportunity Act notice and additional
disclosure statements or agreements relating thereto;
3. Survey of the Property covered by the Mortgage Loan, including
a determination of whether or not such Property falls into a flood zone as
identified by a HUD identified flood map;
4. Written statement signed by the attorney, title company or
closing agent responsible for supervising the closing of the Mortgage Loan that
such person or entity closed the Mortgage Loan in accordance with any closing
instructions received by such person or entity;
5. A casualty insurance policy on the property subject to the
Mortgage Loan covering fire, hazard and extended coverage, and if applicable,
flood and earthquake insurance, all in amounts not less than the principal
amount of the promissory note relating to the Mortgage Loan (or the maximum
amount issuable for flood insurance) which insurance has been endorsed to
provide for payment thereof to the Company, as mortgagee, together with written
notice to the mortgagor of the fact, if true, that mortgagor's property lies
within a flood zone; and
6. Original executed application by the Obligor on such Mortgage
Loan for such Mortgage Loan;
7. Original or copy of credit bureau report on the Obligor on
such Mortgage Loan;
8. Original HUD-1 settlement statement duly executed by the
Obligor on such Mortgage Loan; and
9. Such other documents as the Lender may reasonably request from
time to time, including but not limited to verification of employment of the
Obligor on such Mortgage Loan, verification of deposit by such Obligor (if
applicable), and any inspection reports performed with respect to such Obligor
or the Property covered by such Mortgage Loan.
38
39
EXHIBIT G
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF ___________, 1994
BY AND BETWEEN CAROLINA INVESTORS, INC. AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
FORM OF BORROWING BASE SCHEDULE
This Borrowing Base Schedule is furnished pursuant to the Mortgage
Loan Warehousing Agreement dated as of ___________, 1994, as amended from time
to time, among the Company and the Lender (the "Agreement"). Unless otherwise
defined herein, the terms used in this Borrowing Base Schedule have the
meanings ascribed thereto in the Agreement.
A. Aggregate Unit Collateral Values of
Eligible Mortgage Loans in
Borrowing Base as of previous
Borrowing Base Schedule delivered
by the Company $
------------
B. Aggregate Unit Collateral Values of
Eligible Mortgage Loans submitted
for inclusion in Borrowing Base
since previous Borrowing Base
Schedule delivered by the Company $
------------
C. Sum of (A plus B) $
------------
D. Aggregate Unit Collateral Values of
Eligible Mortgage Loans previously
released by the Lender under trust
receipts for which the full purchase
price has been received by the Lender
since previous Borrowing Base Schedule
delivered by the Company $
------------
E. Amount by which Aggregate Unit Collateral
Values of Eligible Mortgage Loans
withdrawn from the possession of the
Lender under a trust receipt and not
returned to the Lender exceeds $500,000 $
------------
F. Aggregate Unit Collateral Values of Eligible
Mortgage Loans withdrawn from the
possession of the Lender under a trust
receipt more than 10 days prior to the date
39
40
of this schedule and not returned to
the Lender $
-----------
G. Aggregate Unit Collateral Values of
Eligible Mortgage Loans withdrawn from
the possession of the Lender and shipped
to an investor for purchase more than
30 days prior to the date of this schedule
and not returned to the Lender or for which
the full purchase price has not been
received by the Lender $
-----------
H. Sum of (D plus E plus F plus G) $
-----------
I. Adjusted Collateral Value of the
Borrowing Base (C minus H) $
-----------
J. Aggregate principal amount of Loans
outstanding $
-----------
K. Borrowing Base availability (I minus J;
must equal or exceed zero) $
-----------
The undersigned hereby certifies that, as of the date hereof:
(1) I am the duly elected _______________ of the Company;
(2) The above schedule accurately states the Collateral Value of the Borrowing Base and the aggregate principal
amount of Loans outstanding;
(3) All Mortgage Loans included in the Borrowing Base as Eligible Mortgage Loans comply in all respects with the
requirements of the definition of "Eligible Mortgage Loan"; and
(4) I have no knowledge of the existence of any condition or event which constitutes an Event of Default under the
Agreement.
Certified on behalf of the undersigned this _____ day of _________, 19___.
CAROLINA INVESTORS, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
40
41
EXHIBIT H
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF ___________, 1994
BY AND BETWEEN CAROLINA INVESTORS, INC. AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
FORM OF COVENANT COMPLIANCE CERTIFICATE
TO: First Union National Bank of North Carolina
This is the Covenant Compliance Certificate referred to in Section
6(a)(2) of the Mortgage Loan Warehousing Agreement dated as of ______, 1994, by
and between the Company and the Lender (the "Agreement," with capitalized terms
not otherwise defined herein having the same meanings assigned such terms in
the Agreement). Attached hereto are the financial statements of the
undersigned as of ______________ __, 19__ prepared by the Company. This
Covenant Compliance Certificate and the attached financial statements are
furnished for the purpose of procuring credit, and shall be substituted
therefor.
I hereby certify that (i) I have carefully read the attached financial
statements, (ii) the attached financial statements are complete, true and
correct statements to the best of my knowledge and belief, (iii) the attached
financial statements were prepared in conformity with GAAP applied on a basis
consistent with that of the preceding year, subject to year-end audit
adjustments, and (iv) the attached financial statements fairly present the
financial position of the Company and the results of its operations as of
_________________, 19___ and for the period then ended.
I also hereby certify that, as of the date hereof, (i) each and every
covenant of the Company contained in the Agreement has been performed and
observed (except for covenants made in connection with Mortgage Loans, it being
the intention of the parties to the Agreement that the violation or breach of
any such covenant in respect of any Mortgage Loan regarding the qualification
of such Mortgage Loan as an "Eligible Mortgage Loan" under the Agreement shall
not constitute an Event of Default, provided that such Mortgage Loan is
excluded from the calculation of the Borrowing Base) and (ii) no Event of
Default or Potential Default has occurred under the Agreement.
Attached are calculations of the financial ratios set forth in
Sections 7(j), 7(k), 7(l), 7(m), 7(n), 7(o), 7(p) 7(q), 7(r), 7(s), 7(t) and
7(u) of the Agreement as of the date hereof, which calculations are hereby
certified to be complete, true and correct calculations of the financial ratios
contained in such sections.
41
42
Certified on behalf of the undersigned this ____ day of ______________, 19__.
CAROLINA INVESTORS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
42
43
EXHIBIT I
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF ___________, 1994
BY AND BETWEEN CAROLINA INVESTORS, INC. AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
SCHEDULE OF PERMITTED OTHER DEBT
(INCLUDING PERMITTED SECURED DEBT)
43
44
EXHIBIT J
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF ___________, 1994
BY AND BETWEEN CAROLINA INVESTORS, INC. AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
SCHEDULE OF REQUIRED DOCUMENTS
1. An original written Loan Request, signed by an officer of the
Company who is authorized to make such request;
2. An original fully completed Delivery Certificate (as defined
in the Security Agreement);
3. The original executed promissory note relating to the Mortgage
Loan (properly endorsed or assigned to the Company if purchased by the
Company), which promissory note shall be duly endorsed in blank and assigned in
blank without recourse by the Company;
4. The original executed mortgage or deed of trust relating to
the Mortgage Loan;
5. An original executed and recordable but unrecorded assignment
of the mortgage or deed of trust relating to the Mortgage Loan (unless the
Lender determines that under applicable State law the assignment should be
recorded in order to adequately protect its interest, in which case the
assignment shall be recorded by the Company and a certified true copy thereof
shall be provided to the Lender), together with the original or a duly
certified copy of a proper assignment or assignments of the mortgage or deed of
trust from the original holder through any subsequent transferees to the
Company, duly recorded if local requirements in the jurisdiction in which the
Property is located required the recordation of such assignment or assignments;
6. An original (or a certified copy of a) mortgagee title
insurance policy issued by a nationally recognized title insurance company
acceptable to the Lender, together with any attachments and customary
endorsements thereto, which insures that the mortgage or deed of trust securing
the promissory note relating to the Mortgage Loan is a valid and enforceable
first lien on the Property covered by the mortgage Loan with no prior liens or
encumbrances);
7. A copy of the first two pages of an appraisal of the Property
covered by the Mortgage Loan by an appraiser acceptable to the Lender in its
sole and absolute discretion, which appraisal demonstrates that the principal
amount of the promissory note relating to such Mortgage Loan is not greater
than the lesser of (i) eighty-five percent (85%) of the fair market appraisal
of such Property or (ii) the purchase price paid by the Obligor on such
Mortgage Loan for the Property, provided that such purchase occurred
simultaneously with the closing of the Mortgage Loan; and
8. Satisfactory evidence of compliance with the requirements of
such other laws as may, from time to time, become applicable to the Mortgage
Loan.
44
45
EXHIBIT K
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF ___________, 1994
BY AND BETWEEN CAROLINA INVESTORS, INC. AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
MONTHLY OPERATING REPORT
45
46
EXHIBIT L
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF ___________, 1994
BY AND BETWEEN CAROLINA INVESTORS, INC. AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
LOAN REQUEST
46
47
PROMISSORY NOTE
_________ __, 1994
FOR VALUE RECEIVED, CAROLINA INVESTORS, INC., a South Carolina
corporation (the "Company"), hereby unconditionally promises to pay to the
order of FIRST UNION NATIONAL BANK OF NORTH CAROLINA, a national banking
association (the "Lender"), at its office located at Xxx Xxxxx Xxxxx Xxxxxx,
XXXX-0, XX-00, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, in
lawful money of the United States and in immediately available funds, on the
dates required under that certain Mortgage Loan Warehousing Agreement dated as
of _______ ___, 1994 by and between the Company and the Lender (as the same may
be amended, extended or replaced from time to time, the "Agreement" and with
the capitalized terms not otherwise defined herein used with the meanings given
such terms in the Agreement), the principal amount of each Loan made under the
Agreement.
The Company further agrees to pay interest in like money and funds at
the office of the Lender referred to above, on the unpaid principal balance
hereof from the date advanced until paid in full on the dates and at the
applicable rates set forth in the Agreement. The holder of this Note is hereby
authorized to record the date and amount of each Loan, the date and amount of
each payment of principal and interest, and applicable interest rates and other
information with respect thereto, on the schedules annexed to and constituting
a part of this Note (or by any analogous method the holder hereof may elect
consistent with its customary practices) and any such recordation shall, absent
manifest error, constitute prima facie evidence of the accuracy of the
information so recorded; provided, however, that the failure to make a notation
of the inaccuracy of any notation shall not limit or otherwise affect the
obligations of the Company under the Credit Documents.
This Note is the Note referred to in, and is entitled to all the
benefits of, the Agreement. Reference is hereby made to the Agreement and to
the Security Agreement for rights and obligations of payment and prepayment,
collateral security, Events of Default and the rights of acceleration of the
maturity hereof upon the occurrence of an Event of Default.
This Note shall be governed by, and construed in accordance with, the
laws of the State of North Carolina, and is being executed and sealed by the
duly authorized officers of the Company as of the day and year first above
written.
CAROLINA INVESTORS, INC., a
South Carolina corporation
[CORPORATE SEAL]
ATTEST: By:
---------------------------------
Name:
-------------------------------
By: Title:
----------------------- ------------------------------
Name:
---------------------
Title:
--------------------
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SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Security Agreement") is made and dated
as of the ____ day of __________, 1994, by and among CAROLINA INVESTORS, INC.,
a South Carolina corporation (the "Company"), in favor of FIRST UNION NATIONAL
BANK OF NORTH CAROLINA, a national banking association (the "Lender").
RECITALS
A. Pursuant to that certain Mortgage Loan Warehousing Agreement
dated as of _________ __, 1994 by and between the Company and the Lender (as
same may be amended, extended or replaced from time to time, the "Warehousing
Agreement", and with capitalized terms not otherwise defined herein used with
the same meanings as in the Warehousing Agreement), the Lender has agreed to
extend credit to the Company on the terms and subject to the conditions set
forth therein.
B. As a condition precedent to the effectiveness of the
Warehousing Agreement, the Company is required to execute and deliver to the
Lender this Security Agreement.
NOW, THEREFORE, in consideration of the above Recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
9. Delivery of Collateral. The Company shall deliver to the
Lender, or cause to be delivered to the Lender, that portion of the Collateral
Consisting of Mortgage Loans to be included in the computation of the
Collateral Value of the Borrowing Base. Delivery of Collateral consisting of
Mortgage Loans shall be effected by delivery of the Required Documents
therefor. The Lender's responsibility to review such Collateral is limited to
the review steps described on Exhibit 1 hereto, said review of Collateral
delivered on any Business Day to be completed before the opening of business of
the Lender on the next succeeding Business Day; provided, however, that in the
event the Company delivers Collateral to the Lender on any Business Day in an
amount which exceeds the Lender's reasonable capacity to review such Collateral
before the opening of business of the Lender on the next succeeding Business
Day, the Lender shall not be obligated to review such Collateral before the
opening of business of the Lender on the next succeeding Business Day but shall
use its best efforts to do so. No Collateral will be included in the
computation of the Collateral Value of the Borrowing Base until the Lender's
review thereof has been completed pursuant to this Paragraph 1 and Paragraph 4
below. All Mortgage Loans at any time delivered to the Lender hereunder shall
be held by the Lender in a fire resistant vault, drawer or other suitable
depositary maintained and controlled solely by the Lender, conspicuously marked
to show the interests of the Lender therein and not commingled with any other
assets or property of, or held by, the Lender. The Lender is not, and shall
not at any time in the future be, subject, with respect to the Collateral, in
any manner or to any extent, to the direction or control of the Company except
as expressly permitted hereunder or under the other Credit Documents. Under no
circumstances will the Lender deliver possession of the Collateral to the
Company except in accordance with the express terms of this Security Agreement.
10. Grant of Security Interest. The Company hereby pledges,
assigns and grants to the Lender, a first perfected security interest in the
property described in Paragraph 3 below (collectively and severally, the
"Collateral"), to secure payment and performance of the Obligations.
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11. Collateral. The Collateral shall consist of all now existing
and hereafter arising right, title and interest of the Company in, under and to
each of the following:
(a) All Mortgage Loans now owned or hereafter acquired or
originated by the Company, including, without limitation, the promissory notes
or other instruments or agreements evidencing the indebtedness of Obligors
thereon, all mortgages, deeds to secure debt, trust deeds and security
agreements related thereto, all rights to payment thereunder, all rights in the
Properties securing payment of the indebtedness of the Obligors thereon, all
rights under documents related thereto, such as guaranties and insurance
policies (issued by governmental agencies or otherwise), including, without
limitation, mortgage and title insurance policies, fire and extended coverage
insurance policies (including the right to any return premiums), and all rights
in cash deposits consisting of impounds, insurance premiums or other funds held
on account thereof;
(b) All rights of the Company (but not its obligations)
under any agreements to sell such Collateral, now existing or hereafter
arising, covering any part of the foregoing Collateral, all rights to deliver
Mortgage Loans to investors and other purchasers pursuant thereto and all
proceeds resulting from the disposition of such Collateral pursuant thereto;
(c) All now existing and hereafter arising rights to
service, administer and collect Mortgage Loans (it being acknowledged and
agreed that prior to the occurrence of an Event of Default and acceleration of
the Obligations, the security interest in such servicing rights granted
hereunder shall be automatically terminated without need for further action
upon the sale, transfer or other disposition of the related Mortgage Loan in
accordance with the provisions of the Credit Documents), and all rights to the
payment of money on account of such servicing, administration and collection
activities;
(d) All now existing and hereafter arising accounts,
contract rights and general intangibles constituting or relating to any of the
foregoing Collateral;
(e) All now existing and hereafter acquired files,
documents, instruments, surveys, certificates, correspondence, appraisals,
computer programs, tapes, discs, cards, accounting records and other books,
records, information and data of the Company relating to the foregoing
Collateral (including all information, records, data, programs, tapes, discs,
and cards necessary or helpful in the administration or servicing of the
foregoing Collateral);
(f) The Funding Account, the Settlement Account and any
and all funds at any time held in any such accounts; and
(g) All products and Proceeds of the foregoing
Collateral.
12. Lender's Review of Collateral. Each delivery of Mortgage
Loans to the Lender shall be accompanied by a certificate substantially in the
form attached as Exhibit 6 hereto (the "Delivery Certificate"). Upon any
receipt of Required Documents for any Mortgage Loan, the Lender shall review
the same and verify that:
(a) All Required Documents relating to such item of
Collateral appear regular on their face and are in the Lender's possession; and
(b) The statements set forth on Exhibit 1 hereto are
accurate and complete in all respects.
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Such verification for Collateral delivered shall be set forth in the schedule
referred to in Paragraph 5(b) below. If the Lender notes any exception in the
review described in subparagraph (a) or (b) above or questions, in its
reasonable discretion, the genuineness, regularity, propriety, or accuracy of
any item of Collateral, the Lender shall so note in the next such schedule
delivered. In the event that the Company had been requested to deliver the
Additional Required Documents with respect to any Mortgage Loan, the Lender
shall review and verify such Additional Required Documents consistent with the
obligations of the Lender above.
13. Collateral Value Determination.
(a) No later than 1:00 p.m. (Charlotte, North Carolina
time) on each Business Day (i) on which any Collateral is delivered to the
Lender by the Company, or (ii) on which any Collateral is released by the
Lender pursuant to Paragraph 6 below, the Lender shall compute the Collateral
Value of the Borrowing Base (a "Collateral Value Determination") as of 1:00
p.m. on such Business Day and make a notation thereof.
(b) No later than 1:00 p.m. (Charlotte, North Carolina
time) on each Business Day, the Lender shall prepare and deliver to the Company
via facsimile a schedule showing the composition of the Borrowing Base, on a
per- Mortgage Loan basis, as of such time. The Company shall certify as to the
accuracy of such schedule and shall return such schedule, with such
certification attached, to the Lender via facsimile no later than 2:00 p.m.
(Charlotte, North Carolina time) on each such Business Day.
14. Handling of Collateral; Settlement Account.
(a) Prior to the occurrence of an Event of Default, from
time to time, the Lender may release documentation relating to Mortgage Loans
to the Company against a trust receipt executed by the Company in the form of
Exhibit 2 hereto. The Company and the Lender will comply with the trust
receipt procedures specified on Exhibit 3 hereto. The Company hereby
represents and warrants that any request by the Company for release of
Collateral under this subparagraph 6(a) shall be solely for the purposes of
correcting clerical or other non-substantial documentation problems in
preparation of returning such Collateral to the Lender for ultimate sale or
exchange and that the Company has requested such release in compliance with all
terms and conditions of such release set forth herein and in the Warehousing
Agreement, including, without limitation, subparagraph (k)(1) of the definition
of Eligible Mortgage Loan.
(b) Prior to the occurrence of an Event of Default, upon
delivery by the Company to the Lender of a shipping request in the form of that
attached hereto as Exhibit 4, the Lender will transmit Mortgage Loans held by
it as directed by the Company to an investor in connection with the sale
thereof, such transmittal to be under cover of a transmittal letter in the form
of that attached hereto as Exhibit 5 (or such other form as may be required
under any government program pursuant to which the relevant Mortgage Loans are
being shipped).
In no event shall the Lender have any obligation to obtain written
acknowledgement of receipt from the addressee of any transmittal letter or
other communication sent by the Lender hereunder.
(c) All amounts payable on account of the sale of
Mortgage Loans (including, but not limited to a sale pursuant to a repurchase
agreement) will be instructed to be paid directly by the purchaser to the
Settlement Account. Pursuant to Paragraph 2 above the Company has granted a
security interest in and lien upon the Settlement Account and in any and all
amounts at any time held therein to the Lender as collateral security for the
Obligations. The Lender shall hold such security interest in and lien upon the
accounts referred to in Paragraph 3(f) above and all funds at any time held
therein for its
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benefit with all rights of a secured party under the Uniform Commercial Code of
all relevant jurisdictions.
(d) Prior to the occurrence of an Event of Default, the
Lender shall take such steps as it may be reasonably directed from time to time
by the Company in writing which are not inconsistent with the provisions of
this Security Agreement and the other Credit Documents and which the Company
deems necessary to enable the Company to perform and comply with agreements for
the sale or other disposition in whole or in part of Mortgage Loans.
(e) Prior to the occurrence of an Event of Default and
acceleration of the Obligations and if, but only if, such action is not
inconsistent with the express provisions of this Security Agreement and the
other Credit Documents and would not create an Event of Default or Potential
Default, the Company may, in connection with its residential mortgage banking
business: originate, acquire and service Mortgage Loans; receive payments on
Mortgage Loans from the Obligors thereon and impounds and fees in connection
therewith; retain, use and apply fees and payments made on account of the
Mortgage Loans by the Obligors thereunder; disburse from impound accounts; in
the ordinary course of the Company's business, create, use, destroy and
transfer records, files and other items described in Paragraph 3(e) above; sell
or otherwise dispose of Mortgage Loans not included in the computation of the
Collateral Value of the Borrowing Base, with or without servicing rights;
pledge Mortgage Loans to the extent permitted under the Credit Documents; sell
servicing rights; and enter into, exercise rights under, perform, modify, waive
and cancel any agreements for the sale or other disposition of Mortgage Loans.
(f) Following the occurrence of an Event of Default, the
Lender shall not, and shall incur no liability to the Company or any other
Person for refusing, in its sole discretion, to, deliver any item of Collateral
to the Company or any other Person (other than under existing agreements for
sale of such Collateral).
15. Costs and Expenses. The Lender shall notify the Company of
all extraordinary costs and expenses (including, without limitation, expenses
of legal counsel to the Lender) of the Lender directly relating to the Lender's
performance of this Security Agreement, and such extraordinary costs and
expenses shall be paid promptly by the Company or, if already paid by the
Lender, the Company promptly shall reimburse the Lender therefor.
16. Representations and Warranties. The Company hereby represents
and warrants that: (a) the Company is the sole owner of the Collateral (or, in
the case of after-acquired Collateral, at the time the Company acquires rights
in the Collateral, will be the sole owner thereof); (b) except for security
interests in favor of the Lender, no Person has (or, in the case of
after-acquired Collateral, at the time the Company acquires rights therein,
will have) any right, title, claim or interest (by way of Lien or otherwise)
in, against or to the Collateral and, in any event, the Lender has a perfected,
first priority security interest thereon; (c) all information heretofore,
herein or hereafter supplied to the Lender by or on behalf of the Company with
respect to the Collateral is or will be accurate and complete; and (d) each
Mortgage Loan is, at all dates when it is submitted by Company for inclusion in
the computation of the Collateral Value of the Borrowing Base, an Eligible
Mortgage Loan.
17. Covenants of the Company. The Company hereby agrees: (a) to
procure, execute and deliver from time to time any endorsements, assignments,
financing statements and other writings deemed necessary or appropriate by the
Lender to perfect, maintain and protect its security interest hereunder and the
priority thereof and to deliver promptly to the Lender all originals of
Collateral or Proceeds consisting of chattel paper or instruments; (b) not to
surrender or lose possession of (other than to the Lender), sell, encumber, or
otherwise dispose of or transfer, any Collateral or right or interest therein
other than
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shipment of Mortgage Loans under agreements for the sale thereof and as
otherwise permitted under Paragraph 6 above; (c) at all times to account fully
for and promptly to deliver to the Lender, in the form received, all Collateral
or Proceeds received, endorsed to the Lender as appropriate and accompanied by
such assignments and powers, duly executed, as the Lender shall request, and
until so delivered all Collateral and Proceeds shall be held in trust for the
Lender, separate from all other property of the Company and identified as the
property of the Lender; (d) at any reasonable time, upon demand by the Lender,
to exhibit to and allow inspection by the Lender (or Persons designated by the
Lender) of the Collateral and the records concerning the Collateral; (e) to
keep the records concerning the Collateral at the location(s) set forth in
Paragraph 16 below and not to remove the records from such location(s) without
the prior written consent of the Lender; (f) at the request of the Lender, to
place on each of its records pertaining to the Collateral a legend, in form and
content satisfactory to the Lender, indicating that such Collateral has been
assigned to the Lender; (g) not to modify, compromise, extend, rescind or
cancel any deed of trust, mortgage, note or other document, instrument or
agreement connected with any Mortgage Loan pledged under this Security
Agreement or any document relating thereto or connected therewith or consent to
a postponement of strict compliance on the part of any party thereto with any
term or provision thereof; (h) to keep the Collateral insured against loss,
damage, theft, and other risks customarily covered by insurance, and such other
risks as the Lender may request; (i) to do all acts that a prudent investor
would deem necessary or desirable to maintain, preserve and protect the
Collateral; (j) not knowingly to use or permit any Collateral to be used
unlawfully or in violation of any provision of this Security Agreement or any
applicable statute, regulation or ordinance or any policy of insurance covering
the Collateral; (k) to pay (or require to be paid) prior to their becoming
delinquent all taxes, assessments, insurance premiums, charges, encumbrances,
and liens now or hereafter imposed upon or affecting any Collateral; (l) to
notify the Lender before any such change shall occur of any change in the
Company's name, identity or structure through merger, consolidation or
otherwise; (m) to appear in and defend, at the Company's cost and expense, any
action or proceeding which may affect its title to or the Lender's interest in
the Collateral; (n) to keep accurate and complete records of the Collateral and
to provide the Lender with such records and such reports and information
relating to the Collateral as the Lender may request from time to time; and (o)
to comply with all laws, regulations and ordinances relating to the possession,
operation, maintenance and control of the Collateral.
18. Collection of Collateral Payments.
(a) The Company shall, at its sole cost and expense,
endeavor to obtain payment, when due and payable, of all sums due or to become
due with respect to any Collateral (each such payment being referred to as a
"Collateral Payment"), including, without limitation, the taking of such action
with respect thereto as the Lender may request, or, in the absence of such
request, as the Company may reasonably deem advisable; provided, however, that
the Company shall not, without the prior written consent of the Lender, grant
or agree to any rebate, refund, compromise or extension with respect to any
Collateral Payment or accept any prepayment on account thereof. Upon the
request of the Lender following the occurrence of an Event of Default (and
subject to the requirements of applicable law), the Company will notify and
direct any party who is or might become obligated to make any Collateral
Payment, to make payment thereof to the Lender (or to the Company in care of
the Lender) at such address as the Lender may designate. The Company will
reimburse the Lender promptly upon demand for all out-of-pocket costs and
expenses, including reasonable attorneys' fees and litigation expenses,
incurred by the Lender in seeking to collect any Collateral Payment.
(b) If there shall occur an Event of Default, upon the
request of the Lender the Company will transmit and deliver to the Lender,
forthwith upon receipt and in the form received, all cash, checks, drafts and
other instruments for the payment of money (properly endorsed where required so
that such items may be collected by the Lender) which may be received by the
Company at any time as payment on account of any Collateral Payment and if such
request shall be made, until delivery to the
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Lender, such items will be held in trust for the Lender and will not be comming
led by the Company with any of its other funds or property. Thereafter, the
Lender is hereby authorized and empowered to endorse the name of the Company
on any check, draft or other instrument for the payment of money received by the
Lender on account of any Collateral Payment if the Lender believes such
endorsement is necessary or desirable for purposes of collection.
(c) The Company hereby agrees to indemnify, defend and
save harmless the Lender and its agents, officers, employees and
representatives from and against all reasonable liabilities and expenses on
account of any adverse claim asserted against the Lender relating to any moneys
received by the Lender on account of any Collateral Payment (other than as a
direct result of the negligence, gross negligence or willful misconduct of the
Lender or its employees) and such obligation of the Company shall continue in
effect after and notwithstanding the discharge of the Obligations and the
release of the security interest granted in Paragraph 2 above.
19. Authorized Action by Lender. The Company hereby irrevocably
appoints the Lender as its attorney-in- fact to do (but the Lender shall not be
obligated to and shall incur no liability to the Company or any third party for
failure so to do) at any time and from time to time following the occurrence of
an Event of Default, any act which the Company is obligated by this Security
Agreement to do, and to exercise such rights and powers as the Company might
exercise with respect to the Collateral, including, without limitation, the
right to (a) collect by legal proceedings or otherwise and endorse, receive and
receipt for all dividends, interest, payments, proceeds and other sums and
property now or hereafter payable on or on account of the Collateral; (b) enter
into any extension, reorganization, deposit, merger, consolidation or other
agreement pertaining to, or deposit, surrender, accept, hold or apply other
property in exchange for the Collateral; (c) insure, process and preserve the
Collateral; (d) transfer the Collateral to the Lender's own or its nominee's
name; and (e) make any compromise or settlement, and take any other action it
deems advisable with respect to the Collateral. Notwithstanding anything
contained herein, in no event shall the Lender be required to make any
presentment, demand or protest, or give any notice and the Lender need not take
any action to preserve any rights against any prior party or any other person
in connection with the Obligations or with respect to the Collateral.
20. Default and Remedies. Upon the occurrence of an Event of
Default and following the acceleration of the Obligations, the Lender shall
have the right to, without notice to or demand upon the Company: (a) foreclose
or otherwise enforce the Lender's security interest in the Collateral in any
manner permitted by law or provided for hereunder; (b) sell or otherwise
dispose 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 and without assumption of any credit risk, on such
terms and in such manner as the Lender may determine; (c) require the Company
to assemble the Collateral or books and records relating thereto and make such
available to the Lender at a place to be designated by the Lender; (d) enter
onto property where any Collateral or books and records relating thereto are
located and take possession thereof with or without judicial process; and (e)
prior to the disposition of the Collateral, prepare it for disposition in any
manner and to the extent the Lender deems appropriate. Upon any sale or other
disposition pursuant to this Security Agreement, the Lender shall have the
right to deliver, assign and transfer to the purchaser thereof the Collateral
or portion thereof so sold or disposed of and all proceeds thereof shall be
applied to the Obligations. Each purchaser at any such sale or other
disposition shall hold the Collateral free from any claim or right of whatever
kind, including any equity or right of redemption of the Company, and the
Company specifically waives (to the extent permitted by law) all rights of
redemption, stay or appraisal which it has or may have under any rule of law or
statute now existing or hereafter adopted.
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21. Binding Upon Successors. All rights of the Lender under this
Security Agreement shall inure to the benefit of its successors and assigns,
and all obligations of the Company shall bind its successors and assigns.
22. Entire Agreement; Severability. This Security Agreement
contains the entire security agreement with respect to the Collateral between
the Lender and the Company. All waivers by the Company provided for in this
Security Agreement have been specifically negotiated by the parties with full
cognizance and understanding of their rights. If any of the provisions of this
Security Agreement shall be held invalid or unenforceable, this Security
Agreement shall be construed as if not containing such provisions, and the
rights and obligations of the parties hereto shall be construed and enforced
accordingly.
23. Choice of Law. This Security Agreement shall be construed in
accordance with and governed by the laws of the State of North Carolina and,
where applicable and except as otherwise defined herein, terms used herein
shall have the meanings given them in the Uniform Commercial Code as in effect
from time to time in the State of North Carolina.
24. Place of Business; Records. The Company represents and
warrants that its chief place of business is at 000 Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxx Xxxxxxxx 00000, and that its books and records concerning the Collateral
are kept at its chief place of business.
25. Notice. Any written notice, consent or other communication
provided for in this Security Agreement shall be delivered or sent as provided
in the Warehousing Agreement.
EXECUTED and sealed the day and year first above written.
CAROLINA INVESTORS, INC.,
a South Carolina corporation
[CORPORATE SEAL]
ATTEST:
By: By:
------------------------------ -----------------------------
Name: Name:
---------------------------- ---------------------------
Title: Title:
--------------------------- --------------------------
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, a national
banking association
[CORPORATE SEAL]
ATTEST:
By: By:
------------------------------ -----------------------------
Name: Name:
---------------------------- ---------------------------
Title: Title:
--------------------------- --------------------------
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SCHEDULE OF EXHIBITS
TO
SECURITY AGREEMENT
EXHIBIT DOCUMENT
------- --------
1 Required Review Steps
2 Form of Trust Receipt
3 Trust Receipt Procedures
4 Form of Shipping Request
5 Form of Whole Loan Sale Transmittal Letter
6 Form of Delivery Certificate
56
EXHIBIT 1
TO SECURITY
AGREEMENT
REQUIRED REVIEW STEPS
1. All submitted documents, including the report attached to the Delivery
Certificate, are consistent as to borrower name, loan face amount,
loan type and the Company's loan number.
2. The note and mortgage/deed of trust each bears an original signature
or signatures which appear to be those of the person or persons named
as the maker and mortgagor/trustor, or, in the case of a certified
copy of the mortgage/deed of trust, such copy bears what appears to be
a reproduction of such signature or signatures.
3. Except for (a) the endorsement to the Company of the note in the event
such loan was purchased by the Company and (b) the endorsement in
blank of the note by the Company, neither the note, the mortgage/deed
of trust, nor the assignment(s) of the mortgage/deed of trust contain
any irregular writings which appear on their face to affect the
validity of any such endorsement or to restrict the enforceability of
the document on which they appear.
4. The note is endorsed in blank and such endorsement bears an original
signature of an authorized officer of the Company, based on the
current list of such officers supplied by the Company.
5. The assignment of the mortgage/deed of trust bears an original
signature of an authorized officer of the Company, based on the
current list of such officers supplied by the Company.
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EXHIBIT 2
TO SECURITY AGREEMENT
FORM OF TRUST RECEIPT
Date: ___________, 19__
The undersigned, CAROLINA INVESTORS, INC., a South Carolina
corporation (the "Company"), acknowledges receipt from FIRST UNION NATIONAL
BANK OF NORTH CAROLINA (the "Lender") pursuant to the Security Agreement (as
those terms and capitalized terms not otherwise defined herein are defined in
that certain Mortgage Loan Warehousing Agreement dated as of ______________,
1994, among the Lender and the Company), or from its duly appointed agent, of
the following described documentation for the identified Mortgage Loans (the
"Collateral Documents"), possession of which is herewith entrusted to the
Company solely for the purpose of correcting documentary defects relating
thereto:
Loan Document
Borrower Name Loan Number Note Amount Delivered -------------
------------- ----------- ----------- ---------
It is hereby acknowledged that a security interest pursuant to the
Uniform Commercial Code as in effect in the State of North Carolina in the
Collateral hereinabove described and in the Proceeds of said Collateral has
been granted to the Lender pursuant to the Security Agreement.
The Company hereby represents and warrants that the Unit Collateral
Value of the Mortgage Loans for which the Collateral Documents are requested to
be released hereunder when added to the Unit Collateral Value of all other
Mortgage Loans included in the computation of the Collateral Value of the
Borrowing Base the Collateral Documents for which have been similarly released
does not exceed $500,000.
In consideration of the aforesaid delivery by the Lender (or by its
duly appointed agent), the Company hereby agrees to hold said Collateral
Documents in trust for the Lender as provided under and in accordance with all
provisions of the Security Agreement and to return said Collateral Documents to
the Lender no later than the close of business on the tenth calendar day
following the date hereof or, if such day is not a Business Day, on the
immediately succeeding Business Day.
CAROLINA INVESTORS, INC., a
South Carolina corporation
By:
-------------------------
Name:
-----------------------
Title:
----------------------
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EXHIBIT 3
TO SECURITY AGREEMENT
TRUST RECEIPT PROCEDURES
The Company and Lender will adhere to the following procedures with respect to
trust receipts:
The Lender will maintain all original trust receipts in a vault,
drawer or other suitable depositary with a one hour fire rating
maintained and controlled solely by the Lender.
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EXHIBIT 4
TO SECURITY AGREEMENT
FORM OF SHIPPING REQUEST
(For Whole Loan Deliveries)
Date:
----------------
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention:
---------------------
---------------------
This letter is to serve as authorization for you to endorse and ship the
following loans:
Loan Number Borrower Name Note Amount
to the following address under a commitment or agreement of sale (the
"Commitment") from an investor as follows:
NAME:
ADDRESS:
ATTENTION:
Please endorse the notes as follows:
Please ship the loan documents either by ___________________ or by such other
courier service as we have designated to you as "approved." The courier shall
act as an independent contractor bailee acting solely on your behalf as Lender,
as defined in that certain Mortgage Loan Warehousing Agreement dated as of
__________, 1994, as the same may be amended, extended or replaced from time to
time, but we acknowledge and agree that you are not responsible for any delays
in shipment or any other actions or inactions of the courier; however, because
the Commitment expires on ______________, 199_, we ask that you deliver the
loan documents to the courier no later than _________________, 199_.
Please have the courier xxxx us by using our acct #____________. If you should
have any questions, or should feel the need for additional documentation,
please do not hesitate to call _________________
CAROLINA INVESTORS, INC., a
South Carolina corporation
By:
-------------------------
Name:
-----------------------
Title:
----------------------
60
EXHIBIT 5
TO SECURITY AGREEMENT
(INVESTOR)
FORM OF WHOLE LOAN SALE TRANSMITTAL LETTER
[LETTERHEAD OF LENDER]
__________ __, 1994
Dear [Investor]:
Enclosed is(are) _____ original promissory note(s) in the original
principal amount of $_________________ ("Notes") evidencing the Mortgage Loans
described on the attached SCHEDULE A, along with other related documents
(collectively, "Collateral"). A security interest in the Collateral has been
granted to First Union National Bank of North Carolina ("FUNB") by Carolina
Investors, Inc. ("Seller").
All Collateral now or hereafter delivered to you is to be held by you
as a bailee for the benefit of FUNB, and subject to FUNB's direction and
control. By taking possession of Collateral, you agree to the terms of
bailments as set forth in this letter.
***WIRE INSTRUCTIONS***
Payments for all notes accepted for purchase are to be wire
transferred to FIRST UNION NATIONAL BANK OF NORTH CAROLINA (ABA #000000000) at
Xxx Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000-0000, for the account of Carolina
Investors, Inc. (Acct. #20-0000020585). Please reference the Mortgagor(s)'
name on the wire instructions.
Upon FUNB's receipt of such proceeds, FUNB's security interest in the
Collateral shall terminate without further action. The Collateral has not been
assigned or transferred by FUNB to any other party and FUNB has not recorded
any security interests therein.
Notes which are not accepted for purchase, together with all other
related documents, should be returned, within 30 days after the date of this
letter to: First Union National Bank of North Carolina, Xxx Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxx, XX 00000-0000, Attention: Xxx Xxxxxx, Corporate Banking
Group Loan Operations, CORP-2, TW-18.
Please do not honor any communications from Seller relating to any
Collateral or payment without the written consent of FUNB, or until FUNB has
received proceeds of the sale of such Note(s).
61
Do not deliver any Collateral or payment to any third party without the written
consent of FUNB. If you have any questions, please feel free to call.
Very truly yours,
First Union National Bank of North Carolina
By:
--------------------------------
Xxxxxx X. Xxxxxx
Vice President
Specialized Industries/Mortgage Banking
(000) 000-0000
***UPON RECEIPT***
NOTE: By accepting the mortgage loan(s) delivered to you with this letter, you
consent to be the custodian, agent and bailee for the lenders on the terms
described in this letter. The above-signed, as collateral agent, requests that
you acknowledge receipt of the enclosed mortgage loan(s) and this letter by
signing and returning the enclosed copy of this letter and attached SCHEDULE A
to the above-signed; however, your failure to do so does not nullify such
consent.
---------------------------- --------------------
Agreed and Accepted by Date
authorized representative
of [Investor]
62
EXHIBIT 6
TO SECURITY AGREEMENT
FORM OF DELIVERY CERTIFICATE
63
EXHIBIT A
TO
UCC-1 FINANCING STATEMENT
LISTING
CAROLINA INVESTORS, INC. AS DEBTOR
AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA AS SECURED PARTY
All now existing and hereafter arising right, title and interest of
the Debtor in, under and to each of the following:
(a) All Mortgage Loans now owned or hereafter acquired or
originated by the Debtor, including, without limitation, the promissory notes
or other instruments or agreements evidencing the indebtedness of obligors
thereon, all mortgages, deeds to secure debt, trust deeds and security
agreements related thereto, all rights to payment thereunder, all rights in the
real property securing payment of the indebtedness of the obligors thereon, all
rights under documents related thereto, such as guaranties and insurance
policies (issued by governmental agencies or otherwise), including, without
limitation, mortgage and title insurance policies, fire and extended coverage
insurance policies (including the right to any return premiums), and all rights
in cash deposits consisting of impounds, insurance premiums or other funds held
on account thereof;
(b) All rights of the Debtor (but not its obligations)
under any agreements to sell such Collateral, now existing or hereafter
arising, covering any part of the foregoing Collateral, all rights to deliver
Mortgage Loans to investors and other purchasers pursuant thereto and all
proceeds resulting from the disposition of such Collateral pursuant thereto;
(c) All now existing and hereafter arising rights to
service, administer and collect Mortgage Loans (it being acknowledged and
agreed that prior to the occurrence of an Event of Default under the Credit
Agreement (as hereinafter defined) and acceleration of the Obligations, the
security interest in such servicing rights granted hereunder shall be
automatically terminated without need for further action upon the sale,
transfer or other disposition of the related Mortgage Loan in accordance with
the provisions of the Credit Agreement and the documents, instruments and
agreements executed in connection therewith), and all rights to the payment of
money on account of such servicing, administration and collection activities;
(d) All now existing and hereafter arising accounts,
contract rights and general intangibles constituting or relating to any of the
foregoing Collateral;
(e) All now existing and hereafter acquired files,
documents, instruments, surveys, certificates, correspondence, appraisals,
computer programs, tapes, discs, cards, accounting records and other books,
records, information and data of the Debtor relating to the foregoing
Collateral (including all information, records, data, programs, tapes, discs,
and cards necessary or helpful in the administration or servicing of the
foregoing Collateral);
(f) The Funding Account, the Settlement Account and any
and all funds at any time held in any such accounts; and
(g) All products and Proceeds of the foregoing Collateral.
All capitalized terms used and not defined herein shall have the
meanings attributed to such terms in that certain Mortgage Loan Warehousing
Agreement between the Debtor and the Secured Party dated
64
as of ______________, 1994 as the same may be amended, modified, restated,
replaced or supplemented from time to time (the "Credit Agreement").
65
GUARANTY
THIS GUARANTY (the "Guaranty") is made and dated as of the _____ day of
__________, 1994 by EMERGENT FINANCIAL, INC., a South Carolina corporation
("Guarantor").
RECITALS
A. Pursuant to that certain Mortgage Loan Warehousing Agreement dated as
of __________ ____, 1994 between CAROLINA INVESTORS, INC., a South Carolina
corporation (the "Company") and FIRST UNION NATIONAL BANK OF NORTH CAROLINA
(the "Lender") (as amended, extended and replaced from time to time, the
"Warehousing Agreement," and with capitalized terms not otherwise defined
herein used with the same meanings as in the Warehousing Agreement) the Lender
has agreed to extend credit to the Company on the terms and subject to the
conditions set forth therein.
B. As a condition precedent to the effectiveness of the Credit
Documents, Guarantor is required to execute and deliver to the Lender this
Guaranty.
C. Guarantor is the owner of one hundred percent (100%) of the
outstanding capital voting stock of the Company and thus will derive material
benefit from the extension of credit by the Lender to the Company pursuant to
the Warehousing Agreement.
NOW, THEREFORE, in consideration of the above Recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Guarantor hereby agrees as follows:
AGREEMENT
1. Guarantor hereby irrevocably and unconditionally guarantees, jointly
and severally, the payment when due, upon maturity, acceleration or otherwise,
of the Obligations, whether heretofore, now, or hereafter made, incurred or
created, whether voluntary or involuntary and however arising, absolute or
contingent, liquidated or unliquidated, determined or undetermined, whether or
not such Obligations are from time to time reduced or extinguished and
thereafter increased or incurred, whether or not the Company may be liable
individually or jointly with others, whether or not recovery upon such
Obligations may be or hereafter become barred by any statute of limitations,
and whether or not such Obligations may be or hereafter become otherwise
invalid or unenforceable. This Guaranty is a guaranty of payment and not of
collection.
2. Guarantor irrevocably and unconditionally guarantees, jointly and
severally, the payment of the Obligations whether or not due or payable by the
Company upon: (a) the dissolution, insolvency or business failure of, or any
assignment for benefit of creditors by, or commencement of any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceedings by
or against, the Company or Guarantor, or (b) the appointment of a receiver for,
or the attachment, restraint of or making or levying of any order of court or
legal process affecting, the property of the Company or Guarantor, and
unconditionally promises to pay such Obligations to the Lender, or order, on
demand, in lawful money of the United States.
3. The liability of Guarantor hereunder is exclusive and independent of
any security for or other guaranty of the Obligations, whether executed by
Guarantor or by any other party, and the liability of Guarantor hereunder is
not affected or impaired by (a) any direction of application of payment by the
Company or by any other party, or (b) any other guaranty, undertaking or
maximum liability of Guarantor or of any other party as to the Obligations, or
(c) any payment on or in reduction of any such
66
other guaranty or undertaking, or (d) any revocation or release of any
obligations of any other guarantor of the Obligations, or (e) any dissolution
of, termination of, or increase, decrease or change in the personnel of,
Guarantor, or (f) any payment made to the Lender on the Obligations which any
of such Persons repay to the Company pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
Guarantor waives any right to the deferral or modification of Guarantor's
obligations hereunder by reason of any such proceeding.
4. The obligations of Guarantor hereunder are independent of the
Obligations of the Company, and a separate action or actions may be brought and
prosecuted against Guarantor whether or not action is brought against the
Company and whether or not the Company is joined in any such action or actions.
Any payment by the Company or other circumstance which operates to toll any
statute of limitations as to the Company shall operate to toll the statute of
limitations as to Guarantor.
5. Guarantor authorizes the Lender (whether or not after termination of
this Guaranty), without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing
its liability hereunder, from time to time to (a) renew, compromise, extend,
increase, accelerate or otherwise change the time for payment of, or otherwise
change the terms of, the Obligations or any part thereof, including increase or
decrease of the rate of interest thereon; (b) take and hold security for the
payment of this Guaranty or the Obligations and exchange, enforce, waive and
release any such security; (c) apply such security and direct the order or
manner of sale thereof as the Lender in its discretion may determine; and (d)
release or substitute any one or more endorsers, guarantors, the Company or
other obligors. The Lender may without notice to or the further consent of
Company or Guarantor assign this Guaranty in whole or in part to any person
acquiring an interest in the Obligations.
6. It is not necessary for the Lender to inquire into the capacity or
power of the Company or the officers acting or purporting to act on its behalf,
and the Obligations made or created in reliance upon the professed exercise of
such powers shall be guaranteed hereunder.
7. Guarantor waives any right to require the Lender to (a) proceed
against the Company or any other party; (b) proceed against or exhaust any
security held from the Company; or (c) pursue any other remedy in its power
whatsoever. To this end, and without limiting the generality of the foregoing,
Guarantor expressly waives any rights Guarantor might otherwise have had under
the provisions of North Carolina General Statutes Section Section 26-7 et
seq.. The Lender, may, at its election, foreclose on any security held for the
Obligations by one or more judicial or nonjudicial sales, or exercise any other
right or remedy it may have against the Company, or any security, without
affecting or impairing in any way the liability of Guarantor hereunder except
to the extent the Obligations have been paid. Guarantor waives any defense
arising out of any such election, even though such election operates to impair
or extinguish any right of reimbursement or subrogation or other right or
remedy of Guarantor against the Company or any security. Guarantor hereby
waives any claim or other rights which Guarantor may now have or may hereafter
acquire against the Company or any other guarantor of all or any of the
Obligations that arise from the existence or performance of Guarantor's
obligations under this Guaranty or any other of the Credit Documents (as such
claims and rights being referred to as the "Guarantor's Conditional Rights"),
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, or indemnification, or any right to participate in
any claim or remedy which the Lender has against the Company or any collateral
which the Lender now has or hereafter acquires for the Obligations, whether or
not such claim, remedy or right arises in equity or under contract, statute or
common law, by any payment made hereunder or otherwise, including, without
limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or setoff or in any other manner, payment
or security on account of such claim or other rights. If, notwithstanding the
foregoing provisions, any amount shall be paid to Guarantor on account of
Guarantor's Conditional Rights and
67
either (a) such amount is paid to Guarantor at any time when the Obligations
shall not have been paid or performed in full, or (b) regardless of when such
amount is paid to Guarantor, any payment made by the Company to the Lender is
at any time determined to be a preferential payment, then such amount paid to
Guarantor shall be deemed to be held in trust for the benefit of the Lender and
shall forthwith be paid to the Lender to be credited and applied upon the
Obligations, whether matured or unmatured, in such order and manner as the
Lender shall determine. To the extent that any of the provisions of this
Paragraph shall not be enforceable, Guarantor agrees that until such time as
the Obligations have been paid and performed in full and the period of time has
expired during which any payment made by the Company or Guarantor to the Lender
may be determined to be a preferential payment, Guarantor's Conditional Rights
to the extent not validly waived shall be subordinate to the Lender's right to
full payment and performance of the Obligations and Guarantor shall not seek to
enforce the Guarantor's Conditional Rights during such period. Guarantor
waives all presentments, demands for performance, protests and notices,
including, without limitation, notices of nonperformance, notices of protest,
notices of dishonor, notices of acceptance of this Guaranty, and notices of the
existence, creation or incurring of new or additional Obligations. Guarantor
assumes all responsibility for being and keeping itself informed of the
Company's financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Obligations and the nature, scope
and extent of the risks which Guarantor assumes and incurs hereunder, and
agrees that the Lender shall have no duty to advise Guarantor of information
known to it regarding such circumstances or risks.
8. In addition to the Obligations, Guarantor agrees to pay reasonable
attorneys' fees and all other costs and expenses incurred by the Lender in
enforcing this Guaranty in any action or proceeding arising out of, or relating
to, this Guaranty. This Guaranty and the liability and obligations of
Guarantor hereunder are binding upon Guarantor and its successors and assigns,
and this Guaranty inures to the benefit of and is enforceable by the Lender and
its successors, transferees, and assigns.
9. No right or power of the Lender hereunder shall be deemed to have
been waived by any act or conduct on the part of the Lender, or by any neglect
to exercise such right or power, or by any delay in so doing; and every right
or power shall continue in full force and effect until specifically waived or
released by an instrument in writing executed by the Lender.
10. Guarantor agrees to execute any and all further documents,
instruments and agreements as the Lender from time to time reasonably requests
to evidence Guarantor's obligations hereunder.
11. Guarantor hereby represents and warrants and agrees that:
(a) Guarantor: (1) is duly organized, validly existing and in good
standing as a corporation under the laws of the State of South Carolina
and is in good standing as a foreign corporation in each jurisdiction
where its ownership of property or conduct of business requires such
qualification and where failure to so be in good standing could have a
material adverse effect on the property or business of Guarantor or on
Guarantor's ability to pay or perform the Obligations or its obligations
hereunder, (2) has the corporate power and authority and the legal right
to own and operate its property and to conduct business in the manner in
which it does and proposes to do so, (3) is in compliance with all
Requirements of Law and Contractual Obligations to the extent that failure
to so comply could have a material adverse effect on Guarantor or Company
or either of their property or business or on the ability of the Company
to pay or perform the Obligations or the ability of Guarantor to pay or
perform Guarantor's obligations hereunder, and (4) has reviewed and
approved the Credit Documents.
68
(b) Guarantor has the corporate power and authority and the legal
right to execute, deliver and perform the Credit Documents to which
Guarantor is a party and has taken all necessary corporate action to
authorize the execution, delivery and performance of this Guaranty. The
Credit Documents to which Guarantor is a party have been duly executed and
delivered on behalf of Guarantor and constitute legal, valid and binding
obligations of Guarantor enforceable against Guarantor in accordance with
their respective terms, subject to the effect of applicable bankruptcy and
other similar laws affecting the rights of creditors generally and the
effect of equitable principles whether applied in an action at law or a
suit in equity.
(c) The execution, delivery and performance by Guarantor of the
Credit Documents to which Guarantor is a party will not violate any
Requirement of Law or any Contractual Obligation of Guarantor to the
extent that failure to comply could have a material adverse effect on
Guarantor or its property or business or on the ability to pay or perform
the Obligations or its obligations hereunder.
(d) Except as disclosed on Exhibit 1 hereto, no litigation,
investigation or proceeding of or before any court, arbitrator or
Governmental Authority is pending or, to the knowledge of Guarantor,
threatened by or against Guarantor or any of its Subsidiaries or against
any of such Person's properties or revenues which is likely to be
adversely determined and which, if adversely determined, is likely to have
a material adverse effect on the business, operations, property or
financial or other condition of Guarantor or the Company or on Guarantor
and its Consolidated Subsidiaries taken as a whole or on the Collateral or
the Collateral Value of the Borrowing Base.
(e) Each of Guarantor, the Company and each of Guarantor's
Consolidated Subsidiaries has filed or caused to be filed all tax returns
that are required to be filed and have paid all taxes shown to be due and
payable on said returns or on any assessments made against any of them or
any of the property of any of them other than taxes which are being
contested in good faith by appropriate proceedings and as to which
Guarantor, the Company or such Subsidiary has established adequate
reserves in conformity with GAAP.
(f) Guarantor is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(g) Guarantor owns, and at all times hereafter will own, one hundred
percent (100%) of the issued and outstanding capital voting stock of the
Company. Guarantor will not pledge, assign, hypothecate, encumber or
otherwise grant a security interest in any of the capital voting stock of
Company. All of the issued and outstanding shares of capital voting stock
of the Company have been duly authorized and issued and are fully paid and
non-assessable.
(h) Neither the Guarantor nor the Company, nor any of the
Subsidiaries of either Guarantor or the Company, is engaged or will
engage, principally or as one of its important activities, in the business
of extending credit for the purpose of "purchasing" or "carrying" any
"margin stock" within the respective meanings of such terms under
Regulation U. No part of the proceeds of any Loan made under the
Warehousing Agreement will be used, directly or indirectly, for
"purchasing" or "carrying" "margin stock" as so defined or for any purpose
which violates, or which would be inconsistent
69
with, the applicable provisions of the Regulations of the Board of
Governors of the Federal Reserve System.
(i) Guarantor and each of its ERISA Affiliates, if any, are in
compliance in all respects with the requirements of ERISA and no
Reportable Event has occurred under any Plan maintained by the Company or
any of its ERISA Affiliates which is likely to result in the termination
of such Plan for purposes of Title IV of ERISA.
(j) Guarantor has not issued any unregistered securities in
violation of the registration requirements of Section 5 of the Securities
Act of 1933, as amended, or any other existing applicable law, and is in
compliance, in all material respects, with all existing applicable rules,
regulations and requirements under the Securities Act of 1933, as amended,
or the Securities and Exchange Act of 1934, as amended.
(k) No consent, approval, authorization of, or registration,
declaration or filing with, any Governmental Authority is required on the
part of Guarantor in connection with the execution and delivery of the
Credit Documents to which Guarantor is a party or the performance of or
compliance with the terms, provisions and conditions hereof or thereof.
(l) Guarantor shall not permit the acquisition, purchase,
redemption, retirement, transfer or issuance of any shares of its capital
stock now or hereafter outstanding which would result in Emergent Group,
Inc. owning less than eighty percent (80%) of Guarantor's outstanding
capital stock.
12. This Guaranty shall be deemed to be made under and shall be governed
by the laws of the State of North Carolina.
13. If any of the provisions of this Guaranty shall contravene or be held
invalid under the laws of any jurisdiction, this Guaranty shall be construed as
if not containing those provisions and the rights and obligations of the
parties hereto shall be construed and enforced accordingly.
Executed and sealed as of the day and year first above written.
EMERGENT FINANCIAL, INC., a South Carolina
corporation
[CORPORATE SEAL] By:
------------------------------
Name:
------------------------------
Attest: Title:
------------------------------
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
70
GUARANTY
THIS GUARANTY (the "Guaranty") is made and dated as of the _____ day of
__________, 1994 by EMERGENT GROUP, INC., a South Carolina corporation
("Guarantor").
RECITALS
A. Pursuant to that certain Mortgage Loan Warehousing Agreement dated as
of __________ ____, 1994 between CAROLINA INVESTORS, INC., a South Carolina
corporation (the "Company") and FIRST UNION NATIONAL BANK OF NORTH CAROLINA
(the "Lender") (as amended, extended and replaced from time to time, the
"Warehousing Agreement," and with capitalized terms not otherwise defined
herein used with the same meanings as in the Warehousing Agreement) the Lender
has agreed to extend credit to the Company on the terms and subject to the
conditions set forth therein.
B. As a condition precedent to the effectiveness of the Credit
Documents, Guarantor is required to execute and deliver to the Lender this
Guaranty.
C. Guarantor is the owner of one hundred percent (100%) of the
outstanding capital voting stock of Emergent Financial, Inc., a South Carolina
corporation ("EFI"), which in turn is the owner of one hundred percent (100%)
of the outstanding capital voting stock of the Company, and thus Guarantor will
derive material benefit from the extension of credit by the Lender to the
Company pursuant to the Warehousing Agreement.
NOW, THEREFORE, in consideration of the above Recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Guarantor hereby agrees as follows:
AGREEMENT
1. Guarantor hereby irrevocably and unconditionally guarantees, jointly
and severally, the payment when due, upon maturity, acceleration or otherwise,
of the Obligations, whether heretofore, now, or hereafter made, incurred or
created, whether voluntary or involuntary and however arising, absolute or
contingent, liquidated or unliquidated, determined or undetermined, whether or
not such Obligations are from time to time reduced or extinguished and
thereafter increased or incurred, whether or not the Company may be liable
individually or jointly with others, whether or not recovery upon such
Obligations may be or hereafter become barred by any statute of limitations,
and whether or not such Obligations may be or hereafter become otherwise
invalid or unenforceable. This Guaranty is a guaranty of payment and not of
collection.
2. Guarantor irrevocably and unconditionally guarantees, jointly and
severally, the payment of the Obligations whether or not due or payable by the
Company upon: (a) the dissolution, insolvency or business failure of, or any
assignment for benefit of creditors by, or commencement of any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceedings by
or against, the Company or Guarantor, or (b) the appointment of a receiver for,
or the attachment, restraint of or making or levying of any order of court or
legal process affecting, the property of the Company or Guarantor, and
unconditionally promises to pay such Obligations to the Lender, or order, on
demand, in lawful money of the United States.
3. The liability of Guarantor hereunder is exclusive and independent of
any security for or other guaranty of the Obligations, whether executed by
Guarantor or by any other party, and the liability of Guarantor hereunder is
not affected or impaired by (a) any direction of application of payment by the
Company or by any other party, or (b) any other guaranty, undertaking or
maximum liability of Guarantor or of any other party as to the Obligations, or
(c) any payment on or in reduction of any such
71
other guaranty or undertaking, or (d) any revocation or release of any
obligations of any other guarantor of the Obligations, or (e) any dissolution
of, termination of, or increase, decrease or change in the personnel of,
Guarantor, or (f) any payment made to the Lender on the Obligations which any
of such Persons repay to the Company pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
Guarantor waives any right to the deferral or modification of Guarantor's
obligations hereunder by reason of any such proceeding.
4. The obligations of Guarantor hereunder are independent of the
Obligations of the Company, and a separate action or actions may be brought and
prosecuted against Guarantor whether or not action is brought against the
Company and whether or not the Company is joined in any such action or actions.
Any payment by the Company or other circumstance which operates to toll any
statute of limitations as to the Company shall operate to toll the statute of
limitations as to Guarantor.
5. Guarantor authorizes the Lender (whether or not after termination of
this Guaranty), without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing
its liability hereunder, from time to time to (a) renew, compromise, extend,
increase, accelerate or otherwise change the time for payment of, or otherwise
change the terms of, the Obligations or any part thereof, including increase or
decrease of the rate of interest thereon; (b) take and hold security for the
payment of this Guaranty or the Obligations and exchange, enforce, waive and
release any such security; (c) apply such security and direct the order or
manner of sale thereof as the Lender in its discretion may determine; and (d)
release or substitute any one or more endorsers, guarantors, the Company or
other obligors. The Lender may without notice to or the further consent of
Company or Guarantor assign this Guaranty in whole or in part to any person
acquiring an interest in the Obligations.
6. It is not necessary for the Lender to inquire into the capacity or
power of the Company or the officers acting or purporting to act on its behalf,
and the Obligations made or created in reliance upon the professed exercise of
such powers shall be guaranteed hereunder.
7. Guarantor waives any right to require the Lender to (a) proceed
against the Company or any other party; (b) proceed against or exhaust any
security held from the Company; or (c) pursue any other remedy in its power
whatsoever. To this end, and without limiting the generality of the foregoing,
Guarantor expressly waives any rights Guarantor might otherwise have had under
the provisions of North Carolina General Statutes Section Section 26-7 et
seq.. The Lender, may, at its election, foreclose on any security held for the
Obligations by one or more judicial or nonjudicial sales, or exercise any other
right or remedy it may have against the Company, or any security, without
affecting or impairing in any way the liability of Guarantor hereunder except
to the extent the Obligations have been paid. Guarantor waives any defense
arising out of any such election, even though such election operates to impair
or extinguish any right of reimbursement or subrogation or other right or
remedy of Guarantor against the Company or any security. Guarantor hereby
waives any claim or other rights which Guarantor may now have or may hereafter
acquire against the Company or any other guarantor of all or any of the
Obligations that arise from the existence or performance of Guarantor's
obligations under this Guaranty or any other of the Credit Documents (as such
claims and rights being referred to as the "Guarantor's Conditional Rights"),
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, or indemnification, or any right to participate in
any claim or remedy which the Lender has against the Company or any collateral
which the Lender now has or hereafter acquires for the Obligations, whether or
not such claim, remedy or right arises in equity or under contract, statute or
common law, by any payment made hereunder or otherwise, including, without
limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or setoff or in any other manner, payment
or security on account of such claim or other rights. If, notwithstanding the
foregoing provisions, any amount shall be paid to Guarantor on account of
Guarantor's Conditional Rights and
72
either (a) such amount is paid to Guarantor at any time when the Obligations
shall not have been paid or performed in full, or (b) regardless of when such
amount is paid to Guarantor, any payment made by the Company to the Lender is
at any time determined to be a preferential payment, then such amount paid to
Guarantor shall be deemed to be held in trust for the benefit of the Lender and
shall forthwith be paid to the Lender to be credited and applied upon the
Obligations, whether matured or unmatured, in such order and manner as the
Lender shall determine. To the extent that any of the provisions of this
Paragraph shall not be enforceable, Guarantor agrees that until such time as
the Obligations have been paid and performed in full and the period of time has
expired during which any payment made by the Company or Guarantor to the Lender
may be determined to be a preferential payment, Guarantor's Conditional Rights
to the extent not validly waived shall be subordinate to the Lender's right to
full payment and performance of the Obligations and Guarantor shall not seek to
enforce the Guarantor's Conditional Rights during such period. Guarantor
waives all presentments, demands for performance, protests and notices,
including, without limitation, notices of nonperformance, notices of protest,
notices of dishonor, notices of acceptance of this Guaranty, and notices of the
existence, creation or incurring of new or additional Obligations. Guarantor
assumes all responsibility for being and keeping itself informed of the
Company's financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Obligations and the nature, scope
and extent of the risks which Guarantor assumes and incurs hereunder, and
agrees that the Lender shall have no duty to advise Guarantor of information
known to it regarding such circumstances or risks.
8. In addition to the Obligations, Guarantor agrees to pay reasonable
attorneys' fees and all other costs and expenses incurred by the Lender in
enforcing this Guaranty in any action or proceeding arising out of, or relating
to, this Guaranty. This Guaranty and the liability and obligations of
Guarantor hereunder are binding upon Guarantor and its successors and assigns,
and this Guaranty inures to the benefit of and is enforceable by the Lender and
its successors, transferees, and assigns.
9. No right or power of the Lender hereunder shall be deemed to have
been waived by any act or conduct on the part of the Lender, or by any neglect
to exercise such right or power, or by any delay in so doing; and every right
or power shall continue in full force and effect until specifically waived or
released by an instrument in writing executed by the Lender.
10. Guarantor agrees to execute any and all further documents,
instruments and agreements as the Lender from time to time reasonably requests
to evidence Guarantor's obligations hereunder.
11. Guarantor hereby represents and warrants and agrees that:
(a) Guarantor: (1) is duly organized, validly existing and in good
standing as a corporation under the laws of the State of South Carolina
and is in good standing as a foreign corporation in each jurisdiction
where its ownership of property or conduct of business requires such
qualification and where failure to so be in good standing could have a
material adverse effect on the property or business of Guarantor or on
Guarantor's ability to pay or perform the Obligations or its obligations
hereunder, (2) has the corporate power and authority and the legal right
to own and operate its property and to conduct business in the manner in
which it does and proposes to do so, (3) is in compliance with all
Requirements of Law and Contractual Obligations to the extent that failure
to so comply could have a material adverse effect on Guarantor or Company
or either of their property or business or on the ability of the Company
to pay or perform the Obligations or the ability of Guarantor to pay or
perform Guarantor's obligations hereunder, and (4) has reviewed and
approved the Credit Documents.
73
(b) Guarantor has the corporate power and authority and the legal
right to execute, deliver and perform the Credit Documents to which
Guarantor is a party and has taken all necessary corporate action to
authorize the execution, delivery and performance of this Guaranty. The
Credit Documents to which Guarantor is a party have been duly executed and
delivered on behalf of Guarantor and constitute legal, valid and binding
obligations of Guarantor enforceable against Guarantor in accordance with
their respective terms, subject to the effect of applicable bankruptcy and
other similar laws affecting the rights of creditors generally and the
effect of equitable principles whether applied in an action at law or a
suit in equity.
(c) The execution, delivery and performance by Guarantor of the
Credit Documents to which Guarantor is a party will not violate any
Requirement of Law or any Contractual Obligation of Guarantor to the
extent that failure to comply could have a material adverse effect on
Guarantor or its property or business or on the ability to pay or perform
the Obligations or its obligations hereunder.
(d) Except as disclosed on Exhibit 1 hereto, no litigation,
investigation or proceeding of or before any court, arbitrator or
Governmental Authority is pending or, to the knowledge of Guarantor,
threatened by or against Guarantor or any of its Subsidiaries or against
any of such Person's properties or revenues which is likely to be
adversely determined and which, if adversely determined, is likely to have
a material adverse effect on the business, operations, property or
financial or other condition of Guarantor or the Company or on Guarantor
and its Consolidated Subsidiaries taken as a whole or on the Collateral or
the Collateral Value of the Borrowing Base.
(e) Each of Guarantor, the Company and each of Guarantor's
Consolidated Subsidiaries has filed or caused to be filed all tax returns
that are required to be filed and have paid all taxes shown to be due and
payable on said returns or on any assessments made against any of them or
any of the property of any of them other than taxes which are being
contested in good faith by appropriate proceedings and as to which
Guarantor, the Company or such Subsidiary has established adequate
reserves in conformity with GAAP.
(f) Guarantor is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(g) As of the date hereof, Guarantor owns one hundred percent (100%)
of the issued and outstanding capital voting stock of EFI. At all times
hereafter, Guarantor will own at least eighty percent (80%) of the issued
and outstanding capital voting stock of EFI. Guarantor will not pledge,
assign, hypothecate, encumber or otherwise grant a security interest in
any of the capital voting stock of EFI which it owns or in which it has a
beneficial interest. All of the issued and outstanding shares of capital
voting stock of EFI have been duly authorized and issued and are fully
paid and non-assessable.
(h) Neither the Guarantor nor the Company, nor any of the
Subsidiaries of either Guarantor or the Company, is engaged or will
engage, principally or as one of its important activities, in the business
of extending credit for the purpose of "purchasing" or "carrying" any
"margin
74
stock" within the respective meanings of such terms under Regulation U.
No part of the proceeds of any Loan made under the Warehousing Agreement
will be used, directly or indirectly, for "purchasing" or "carrying"
"margin stock" as so defined or for any purpose which violates, or which
would be inconsistent with, the applicable provisions of the Regulations
of the Board of Governors of the Federal Reserve System.
(i) Guarantor and each of its ERISA Affiliates, if any, are in
compliance in all respects with the requirements of ERISA and no
Reportable Event has occurred under any Plan maintained by the Company or
any of its ERISA Affiliates which is likely to result in the termination
of such Plan for purposes of Title IV of ERISA.
(j) Guarantor has not issued any unregistered securities in
violation of the registration requirements of Section 5 of the Securities
Act of 1933, as amended, or any other existing applicable law, and is in
compliance, in all material respects, with all existing applicable rules,
regulations and requirements under the Securities Act of 1933, as amended,
or the Securities and Exchange Act of 1934, as amended.
(k) No consent, approval, authorization of, or registration,
declaration or filing with, any Governmental Authority is required on the
part of Guarantor in connection with the execution and delivery of the
Credit Documents to which Guarantor is a party or the performance of or
compliance with the terms, provisions and conditions hereof or thereof.
12. This Guaranty shall be deemed to be made under and shall be governed
by the laws of the State of North Carolina.
13. If any of the provisions of this Guaranty shall contravene or be held
invalid under the laws of any jurisdiction, this Guaranty shall be construed as
if not containing those provisions and the rights and obligations of the
parties hereto shall be construed and enforced accordingly.
Executed and sealed as of the day and year first above written.
EMERGENT GROUP, INC., a South Carolina
corporation
[CORPORATE SEAL] By:
------------------------------
Name:
------------------------------
Attest: Title:
------------------------------
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
75
March 31, 0000
Xxxxx Xxxxx Xxxxxxxx Xxxx
xx Xxxxx Xxxxxxxx
One First Union Center, 19th floor
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Mr. R. Xxxxxx Xxxx
Re: Mortgage Loan Warehousing Agreement dated as of November 22,
1994 between Carolina Investors, Inc. and First Union
National Bank of North Carolina (the "Warehousing Agreement")
Ladies and Gentlemen:
This letter will serve as a request by Carolina Investors, Inc. that the
Warehousing Agreement be amended as follows:
1. AMENDMENTS TO WAREHOUSING AGREEMENT:
a. The definition of the term "Maturity Date" contained in Section
10 of the Warehousing Agreement shall be amended by deleting the date
"March 31, 1995" from subsection (a) thereof and inserting the date "April
30, 1995" in lieu thereof.
b. The Warehousing Agreement and all schedules thereto, as well as
all other Credit Documents (as defined therein), shall be amended or
modified as necessary to effect the amendment set forth in subsection a.
above.
Except as specifically amended herein, the Warehousing Agreement and the
Credit Documents (as defined therein) shall remain in full force and effect.
Emergent Financial Corporation and Emergent Group, Inc., as Guarantors
under, and as defined in, the Warehousing Agreement, join in the execution and
delivery of this letter to acknowledge and consent to the terms hereof and
hereby reaffirm their obligations under the Guaranties (as defined in the
Warehousing Agreement).
76
Firs Union National Bank of North Carolina
March 31, 1995
Upon the execution of this letter by First Union National Bank of
North Carolina, the above amendments shall become effective as of the date
hereof.
Very truly yours,
CAROLINA INVESTORS, INC.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
GUARANTORS:
EMERGENT FINANCIAL CORPORATION
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
EMERGENT GROUP, INC.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
ACKNOWLEDGED AND AGREED TO AS OF
THE DATE SET FORTH ABOVE:
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
00
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
FIRST AMENDMENT TO SECURITY AGREEMENT
THIS FIRST AMENDMENT TO SECURITY AGREEMENT dated as of
___________________, 1995 (this "Amendment") is made by and among CAROLINA
INVESTORS, INC., a South Carolina corporation (the "Company") and FIRST UNION
NATIONAL BANK OF NORTH CAROLINA, a national banking association (the "Lender").
STATEMENT OF PURPOSE
WHEREAS, pursuant to that certain Mortgage Loan Warehousing Agreement
dated as of November 22, 1994 between the Company and the Lender (as the same
has been and may be amended, extended or replaced from time to time, the
"Credit Agreement"), the Lender has agreed to extend credit to the Company on
the terms and subject to the conditions set forth therein; and
WHEREAS, both of the parties hereto are parties to a Security Agreement
dated as of November 22, 1994 (the "Security Agreement"), which Security
Agreement was executed in connection with the Credit Agreement; and
WHEREAS, the parties hereto wish to amend the Security Agreement to
provide for the modification of various terms and covenants thereof;
NOW, THEREFORE, in consideration of the premises and agreements contained
herein, and for good and valuable consideration, the receipt and sufficiency of
which are acknowledged by the parties hereto, the parties hereto hereby agree
as follows:
1. All capitalized terms used herein and not otherwise defined shall
have the respective meanings which such terms have under the Security
Agreement.
2. Paragraph 2 of the Security Agreement is hereby amended by adding the
phrase "and the Guaranteed Obligations" to the end of the sentence contained in
such paragraph.
3. Paragraph 3(c) of the Security Agreement is hereby amended by adding
the phrase "or the Guaranteed Obligations" directly following the word
"Obligations" contained in such paragraph.
4. Paragraph 6(c) of the Security Agreement is hereby amended by adding
the phrase "and the Guaranteed Obligations" directly following the word
"Obligations" contained in the second sentence thereof.
5. Paragraph 6(e) of the Security Agreement is hereby amended by adding
the phrase "or the Guaranteed Obligations" directly following the word
"Obligations" contained in such paragraph.
6. Paragraph 10(c) of the Security Agreement is hereby amended by adding
the phrase "and the Guaranteed Obligations" directly following the word
"Obligations" contained in such paragraph.
7. Paragraph 11 of the Security Agreement is hereby amended by adding
the phrase "or the Guaranteed Obligations" directly following the word
"Obligations" contained in the second sentence thereof.
78
First Union National Bank of North Carolina
March 31, 1995
8. Paragraph 12 of the Security Agreement is hereby amended by adding
the phrase "or the Guaranteed Obligations" directly following the word
"Obligations" contained in the first sentence thereof.
9. Paragraph 12 of the Security Agreement is hereby amended by adding
the phrase "or the Guaranteed Obligations, in the Lender's sole discretion"
directly following the word "Obligations" contained in the second sentence
thereof.
10. Exhibit 2 to the Security Agreement is hereby amended by deleting the
amount "$500,000" contained in the third paragraph thereof and substituting the
amount "$250,000" in lieu thereof.
11. This Amendment shall become effective as of the date hereof.
12. This Amendment is limited and, except as set forth herein, shall not
constitute a modification, acceptance or waiver of any other provision of the
Security Agreement, or any other document or instrument entered into in
connection therewith.
13. This Amendment may be executed in any number of counterparts by the
different parties hereto on separate counterparts, each of which counterparts
when executed and delivered shall be an original, but all of which together
shall constitute one and the same instrument. A complete set of counterparts
shall be lodged with the Company and the Lender.
14. This Amendment and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by the laws of the
State of North Carolina.
15. From and after the date hereof, all references in the Security
Agreement, and any other document or instrument entered into in connection
therewith, to the Security Agreement shall be deemed to be references to the
Security Agreement as amended hereby.
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Amendment to be duly executed and delivered as of the date first above
written.
CAROLINA INVESTORS, INC., a South
Carolina corporation
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, a national banking
association
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
00
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
EXHIBIT A
TO
UCC-1 FINANCING STATEMENT
LISTING
CAROLINA INVESTORS, INC. AS DEBTOR
AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA AS SECURED PARTY
All now existing and hereafter arising right, title and interest of the
Debtor in, under and to each of the following:
(1) All Mortgage Loans now owned or hereafter acquired or originated
by the Debtor, including, without limitation, the promissory notes or other
instruments or agreements evidencing the indebtedness of obligors thereon, all
mortgages, deeds to secure debt, trust deeds and security agreements related
thereto, all rights to payment thereunder, all rights in the real property
securing payment of the indebtedness of the obligors thereon, all rights under
documents related thereto, such as guaranties and insurance policies (issued by
governmental agencies or otherwise), including, without limitation, mortgage
and title insurance policies, fire and extended coverage insurance policies
(including the right to any return premiums), and all rights in cash deposits
consisting of impounds, insurance premiums or other funds held on account
thereof;
(2) All rights of the Debtor (but not its obligations) under any
agreements to sell such Collateral, now existing or hereafter arising, covering
any part of the foregoing Collateral, all rights to deliver Mortgage Loans to
investors and other purchasers pursuant thereto and all proceeds resulting from
the disposition of such Collateral pursuant thereto;
(3) All now existing and hereafter arising rights to service,
administer and collect Mortgage Loans (it being acknowledged and agreed that
prior to the occurrence of an Event of Default under the Credit Agreement (as
hereinafter defined) and acceleration of the Obligations or the Guaranteed
Obligations, the security interest in such servicing rights granted hereunder
shall be automatically terminated without need for further action upon the
sale, transfer or other disposition of the related Mortgage Loan in accordance
with the provisions of the Credit Agreement and the documents, instruments and
agreements executed in connection therewith), and all rights to the payment of
money on account of such servicing, administration and collection activities;
(4) All now existing and hereafter arising accounts, contract rights
and general intangibles constituting or relating to any of the foregoing
Collateral;
(5) All now existing and hereafter acquired files, documents,
instruments, surveys, certificates, correspondence, appraisals, computer
programs, tapes, discs, cards, accounting records and other books, records,
information and data of the Debtor relating to the foregoing Collateral
(including all information, records, data, programs, tapes, discs, and cards
necessary or helpful in the administration or servicing of the foregoing
Collateral);
(6) The Funding Account, the Settlement Account and any and all
funds at any time held in any such accounts; and
(7) All products and Proceeds of the foregoing Collateral.
80
First Union National Bank of North Carolina
March 31, 1995
All capitalized terms used and not defined herein shall have the meanings
attributed to such terms in that certain Mortgage Loan Warehousing Agreement
between the Debtor and the Secured Party dated as of November 22, 1994 as the
same may be amended, modified, restated, replaced or supplemented from time to
time (the "Credit Agreement").
81
First Union National Bank of North Carolina
March 31, 1995
REAFFIRMATION OF GUARANTY
TO: First Union National Bank
of North Carolina
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx,
XXXX-00, XX-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
THIS REAFFIRMATION OF GUARANTY (this "Reaffirmation"), dated as of
____________________, 1995, is made by EMERGENT FINANCIAL CORPORATION, a South
Carolina corporation ("Guarantor"), in favor of the "Lender" (as defined below)
and is executed pursuant to the terms of that certain Third Amendment to
Mortgage Loan Warehousing Agreement of even date herewith (the "Amendment")
among Carolina Investors, Inc. ("Borrower") the Guarantor, Emergent Group,
Inc., Emergent Mortgage Corp. and First Union National Bank of North Carolina
("Lender") which Amendment amends that certain Mortgage Loan Warehousing
Agreement dated as of November 22, 1994 among the Borrower, the Guarantors
(other than Emergent Mortgage Corp.) and Lender, as previously amended by that
certain letter agreement dated as of March 31, 1995 among the Borrower, the
Guarantors (other than Emergent Mortgage Corp.) and the Lender and by that
certain Second Amendment to Mortgage Loan Warehousing Agreement dated as of
April 30, 1995 among the Borrower, the Guarantors (other than Emergent Mortgage
Corp.) and the Lender (as so amended, the "Warehousing Agreement").
Capitalized terms used in this Reaffirmation and not otherwise defined herein
shall have the meanings set forth in the Warehousing Agreement, as amended by
the Amendment.
Pursuant to the terms and conditions of the Warehousing Agreement,
Guarantor executed a Guaranty dated as of November 22, 1994 in favor of the
Lender, pursuant to which Guarantor agreed to guaranty the payment of the
Obligations of Borrower to Lender.
Lender has agreed to amend the Warehousing Agreement as set forth in the
Amendment.
A specific condition to the willingness of the Lender to enter into the
Amendment and to continue to make available to Borrower the credit facilities
provided for in the Warehousing Agreement, as so amended, is the reaffirmation
of the terms of the Guaranty. Guarantor owns directly or indirectly 100% of
the stock of the Borrower and thus will benefit from the continued availability
to Borrower of the credit facilities provided for in the Warehousing Agreement.
To induce the Lender to modify the terms of the Warehousing Agreement
pursuant to the Amendment and to continue to make available to Borrower the
credit facilities provided for the Warehousing Agreement, as so amended, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Guarantor hereby reaffirms its obligations under the
Guaranty and agrees that the Guaranty shall remain in full force and effect
with respect to the Obligations.
00
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
IN WITNESS WHEREOF, the undersigned has executed this Reaffirmation
under seal as of the date and year first written above.
GUARANTOR
EMERGENT FINANCIAL CORPORATION,
[CORPORATE SEAL] a South Carolina corporation
ATTEST:
By:
------------------------- ----------------------------------
Secretary President
00
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
REAFFIRMATION OF GUARANTY
TO: First Union National Bank of North Carolina
One First Union Center; 000 Xxxxx Xxxxxxx Xxxxxx,
XXXX-00, XX-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
THIS REAFFIRMATION OF GUARANTY (this "Reaffirmation"), dated as of
__________________, 1995, is made by EMERGENT GROUP, INC., a South Carolina
corporation ("Guarantor"), in favor of the "Lender" (as defined below) and is
executed pursuant to the terms of that certain Third Amendment to Mortgage Loan
Warehousing Agreement of even date herewith (the "Amendment") among Carolina
Investors, Inc. ("Borrower") the Guarantor, Emergent Financial Corporation,
Emergent Mortgage Corp. and First Union National Bank of North Carolina
("Lender") which Amendment amends that certain Mortgage Loan Warehousing
Agreement dated as of November 22, 1994 among the Borrower, the Guarantors
(other than Emergent Mortgage Corp.) and Lender, as previously amended by that
certain letter agreement dated as of March 31, 1995 among the Borrower, the
Guarantors (other than Emergent Mortgage Corp.) and the Lender and by that
certain Second Amendment to Mortgage Loan Warehousing Agreement dated as of
April 30, 1995 among the Borrower the Guarantors (other than Emergent Mortgage
Corp.) and the Lender (as so amended, the "Warehousing Agreement").
Capitalized terms used in this Reaffirmation and not otherwise defined herein
shall have the meanings set forth in the Warehousing Agreement, as amended by
the Amendment.
Pursuant to the terms and conditions of the Warehousing Agreement,
Guarantor executed a Guaranty dated as of November 22, 1994 in favor of the
Lender, pursuant to which Guarantor agreed to guaranty the payment of the
Obligations of Borrower to Lender.
Lender has agreed to amend the Warehousing Agreement as set forth in the
Amendment.
A specific condition to the willingness of the Lender to enter into the
Amendment and to continue to make available to Borrower the credit facilities
provided for in the Warehousing Agreement, as so amended, is the reaffirmation
of the terms of the Guaranty. Guarantor owns directly or indirectly 100% of
the stock of the Borrower and thus will benefit from the continued availability
to Borrower of the credit facilities provided for in the Warehousing Agreement.
To induce the Lender to modify the terms of the Warehousing Agreement
pursuant to the Amendment and to continue to make available to Borrower the
credit facilities provided for the Warehousing Agreement, as so amended, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Guarantor hereby reaffirms its obligations under the
Guaranty and agrees that the Guaranty shall remain in full force and effect
with respect to the Obligations.
00
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
IN WITNESS WHEREOF, the undersigned has executed this Reaffirmation
under seal as of the date and year first written above.
GUARANTOR
EMERGENT GROUP, INC.,
[CORPORATE SEAL] a South Carolina corporation
ATTEST:
By:
------------------------------- ------------------------------
Secretary President
85
First Union National Bank of North Carolina
March 31, 1995
GUARANTY
THIS GUARANTY (the "Guaranty") is made and dated as of the _____ day of
__________, 1995 by Emergent Mortgage Corp., a South Carolina corporation
("Guarantor").
RECITALS
A. Pursuant to that certain Mortgage Loan Warehousing Agreement dated as
of ___________, 1995 between Guarantor and FIRST UNION NATIONAL BANK OF NORTH
CAROLINA (the "Lender") (as amended, extended and replaced from time to time,
the "EMC Warehousing Agreement") the Lender has agreed to extend credit to
Guarantor on the terms and subject to the conditions set forth therein.
B. Pursuant to that certain Mortgage Loan Warehousing Agreement dated as
of November 22, 1994 between CAROLINA INVESTORS, INC., a South Carolina
corporation (the "Company") and the Lender (as amended, extended and replaced
form time to time, the "Warehousing Agreement," and with capitalized terms not
otherwise defined herein used with the same meanings as in the Warehousing
Agreement) the Lender has extended credit to the Company on the terms and
subject to the conditions set forth therein.
C. As a condition precedent to the continued availability of credit to
the Company under the Warehousing Agreement, and as a condition precedent to
the effectiveness of the EMC Warehousing Agreement and the extension to
Guarantor of the credit facility referred to therein, Guarantor is required to
execute and deliver to the Lender this Guaranty.
D. Both one hundred percent (100%) of the outstanding capital voting
stock of the Company and one hundred percent (100%) of the outstanding capital
voting stock of the Guarantor are owned by Emergent Financial Corporation and
thus Guarantor will derive material benefit both from the continued extension
of credit by the Lender to the Company pursuant to the Warehousing Agreement
and from the extension of credit by the Lender to the Guarantor pursuant to the
EMC Warehousing Agreement.
NOW, THEREFORE, in consideration of the above Recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Guarantor hereby agrees as follows:
AGREEMENT
1. Guarantor hereby irrevocably and unconditionally guarantees, jointly
and severally, the payment when due, upon maturity, acceleration or otherwise,
of the Obligations, whether heretofore, now, or hereafter made, incurred or
created, whether voluntary or involuntary and however arising, absolute or
contingent, liquidated or unliquidated, determined or undetermined, whether or
not such Obligations are from time to time reduced or extinguished and
thereafter increased or incurred, whether or not the Company may be liable
individually or jointly with others, whether or not recovery upon such
Obligations may be or hereafter become barred by any statute of limitations,
and whether or not such Obligations may be or hereafter become otherwise
invalid or unenforceable. This Guaranty is a guaranty of payment and not of
collection.
86
First Union National Bank of North Carolina
March 31, 1995
2. Guarantor irrevocably and unconditionally guarantees, jointly and
severally, the payment of the Obligations whether or not due or payable by the
Company upon: (a) the dissolution, insolvency or business failure of, or any
assignment for benefit of creditors by, or commencement of any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceedings by
or against, the Company or Guarantor, or (b) the appointment of a receiver for,
or the attachment, restraint of or making or levying of any order of court or
legal process affecting, the property of the Company or Guarantor, and
unconditionally promises to pay such Obligations to the Lender, or order, on
demand, in lawful money of the United States.
3. The liability of Guarantor hereunder is exclusive and independent of
any security for or other guaranty of the Obligations, whether executed by
Guarantor or by any other party, and the liability of Guarantor hereunder is
not affected or impaired by (a) any direction of application of payment by the
Company or by any other party, or (b) any other guaranty, undertaking or
maximum liability of Guarantor or of any other party as to the Obligations, or
(c) any payment on or in reduction of any such other guaranty or undertaking,
or (d) any revocation or release of any obligations of any other guarantor of
the Obligations, or (e) any dissolution of, termination of, or increase,
decrease or change in the personnel of, Guarantor, or (f) any payment made to
the Lender on the Obligations which any of such Persons repay to the Company
pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and Guarantor waives any right to
the deferral or modification of Guarantor's obligations hereunder by reason of
any such proceeding.
4. The obligations of Guarantor hereunder are independent of the
Obligations of the Company, and a separate action or actions may be brought and
prosecuted against Guarantor whether or not action is brought against the
Company and whether or not the Company is joined in any such action or actions.
Any payment by the Company or other circumstance which operates to toll any
statute of limitations as to the Company shall operate to toll the statute of
limitations as to Guarantor.
5. Guarantor authorizes the Lender (whether or not after termination of
this Guaranty), without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing
its liability hereunder, from time to time to (a) renew, compromise, extend,
increase, accelerate or otherwise change the time for payment of, or otherwise
change the terms of, the Obligations or any part thereof, including increase or
decrease of the rate of interest thereon; (b) take and hold security for the
payment of this Guaranty or the Obligations and exchange, enforce, waive and
release any such security; (c) apply such security and direct the order or
manner of sale thereof as the Lender in its discretion may determine; and (d)
release or substitute any one or more endorsers, guarantors, the Company or
other obligors. The Lender may without notice to or the further consent of
Company or Guarantor assign this Guaranty in whole or in part to any person
acquiring an interest in the Obligations.
6. It is not necessary for the Lender to inquire into the capacity or
power of the Company or the officers acting or purporting to act on its behalf,
and the Obligations made or created in reliance upon the professed exercise of
such powers shall be guaranteed hereunder.
7. Guarantor waives any right to require the Lender to (a) proceed
against the Company or any other party; (b) proceed against or exhaust any
security held from the Company; or (c) pursue any other remedy in its power
whatsoever. To this end, and without limiting the generality of the foregoing,
Guarantor expressly waives any rights Guarantor might otherwise have had under
the provisions of North Carolina General Statutes Section Section 26-7 et
seq.. The Lender, may, at its election, foreclose on any security
87
First Union National Bank of North Carolina
March 31, 1995
held for the Obligations by one or more judicial or nonjudicial sales, or
exercise any other right or remedy it may have against the Company, or any
security, without affecting or impairing in any way the liability of Guarantor
hereunder except to the extent the Obligations have been paid. Guarantor
waives any defense arising out of any such election, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of Guarantor against the Company or any security.
Guarantor hereby waives any claim or other rights which Guarantor may now have
or may hereafter acquire against the Company or any other guarantor of all or
any of the Obligations that arise from the existence or performance of
Guarantor's obligations under this Guaranty or any other of the Credit
Documents (as such claims and rights being referred to as the "Guarantor's
Conditional Rights"), including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, or indemnification, or any right to
participate in any claim or remedy which the Lender has against the Company or
any collateral which the Lender now has or hereafter acquires for the
Obligations, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, by any payment made hereunder or
otherwise, including, without limitation, the right to take or receive from the
Company, directly or indirectly, in cash or other property or setoff or in any
other manner, payment or security on account of such claim or other rights.
If, notwithstanding the foregoing provisions, any amount shall be paid to
Guarantor on account of Guarantor's Conditional Rights and either (a) such
amount is paid to Guarantor at any time when the Obligations shall not have
been paid or performed in full, or (b) regardless of when such amount is paid
to Guarantor, any payment made by the Company to the Lender is at any time
determined to be a preferential payment, then such amount paid to Guarantor
shall be deemed to be held in trust for the benefit of the Lender and shall
forthwith be paid to the Lender to be credited and applied upon the
Obligations, whether matured or unmatured, in such order and manner as the
Lender shall determine. To the extent that any of the provisions of this
Paragraph shall not be enforceable, Guarantor agrees that until such time as
the Obligations have been paid and performed in full and the period of time has
expired during which any payment made by the Company or Guarantor to the Lender
may be determined to be a preferential payment, Guarantor's Conditional Rights
to the extent not validly waived shall be subordinate to the Lender's right to
full payment and performance of the Obligations and Guarantor shall not seek to
enforce the Guarantor's Conditional Rights during such period. Guarantor
waives all presentments, demands for performance, protests and notices,
including, without limitation, notices of nonperformance, notices of protest,
notices of dishonor, notices of acceptance of this Guaranty, and notices of the
existence, creation or incurring of new or additional Obligations. Guarantor
assumes all responsibility for being and keeping itself informed of the
Company's financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Obligations and the nature, scope
and extent of the risks which Guarantor assumes and incurs hereunder, and
agrees that the Lender shall have no duty to advise Guarantor of information
known to it regarding such circumstances or risks.
8. In addition to the Obligations, Guarantor agrees to pay reasonable
attorneys' fees and all other costs and expenses incurred by the Lender in
enforcing this Guaranty in any action or proceeding arising out of, or relating
to, this Guaranty. This Guaranty and the liability and obligations of
Guarantor hereunder are binding upon Guarantor and its successors and assigns,
and this Guaranty inures to the benefit of and is enforceable by the Lender and
its successors, transferees, and assigns.
9. No right or power of the Lender hereunder shall be deemed to have
been waived by any act or conduct on the part of the Lender, or by any neglect
to exercise such right or power, or by any delay in so doing; and every right
or power shall continue in full force and effect until specifically waived or
released by an instrument in writing executed by the Lender.
88
First Union National Bank of North Carolina
March 31, 1995
10. Guarantor agrees to execute any and all further documents,
instruments and agreements as the Lender from time to time reasonably requests
to evidence Guarantor's obligations hereunder.
11. Guarantor hereby represents and warrants and agrees that:
(a) Guarantor: (1) is duly organized, validly existing and in good
standing as a corporation under the laws of the State of South Carolina
and is in good standing as a foreign corporation in each jurisdiction
where its ownership of property or conduct of business requires such
qualification and where failure to so be in good standing could have a
material adverse effect on the property or business of Guarantor or on
Guarantor's ability to pay or perform the Obligations or its obligations
hereunder, (2) has the corporate power and authority and the legal right
to own and operate its property and to conduct business in the manner in
which it does and proposes to do so, (3) is in compliance with all
Requirements of Law and Contractual Obligations to the extent that failure
to so comply could have a material adverse effect on Guarantor or Company
or either of their property or business or on the ability of the Company
to pay or perform the Obligations or the ability of Guarantor to pay or
perform Guarantor's obligations hereunder, and (4) has reviewed and
approved the Credit Documents.
(b) Guarantor has the corporate power and authority and the legal
right to execute, deliver and perform the Credit Documents to which
Guarantor is a party and has taken all necessary corporate action to
authorize the execution, delivery and performance of this Guaranty. The
Credit Documents to which Guarantor is a party have been duly executed and
delivered on behalf of Guarantor and constitute legal, valid and binding
obligations of Guarantor enforceable against Guarantor in accordance with
their respective terms, subject to the effect of applicable bankruptcy and
other similar laws affecting the rights of creditors generally and the
effect of equitable principles whether applied in an action at law or a
suit in equity.
(c) The execution, delivery and performance by Guarantor of the
Credit Documents to which Guarantor is a party will not violate any
Requirement of Law or any Contractual Obligation of Guarantor to the
extent that failure to comply could have a material adverse effect on
Guarantor or its property or business or on the ability to pay or perform
the Obligations or its obligations hereunder.
(d) Except as disclosed on Exhibit 1 hereto, no litigation,
investigation or proceeding of or before any court, arbitrator or
Governmental Authority is pending or, to the knowledge of Guarantor,
threatened by or against Guarantor or any of its Subsidiaries or against
any of such Person's properties or revenues which is likely to be
adversely determined and which, if adversely determined, is likely to have
a material adverse effect on the business, operations, property or
financial or other condition of Guarantor or the Company or on Guarantor
and its Consolidated Subsidiaries taken as a whole or on the Collateral or
the Collateral Value of the Borrowing Base.
(e) Each of Guarantor, the Company and each of Guarantor's
Consolidated Subsidiaries has filed or caused to be filed all tax returns
that are required to be filed and have paid all taxes shown to be due and
payable on said returns or on any assessments made against any of them or
any of the property of any of them other than taxes which
89
First Union National Bank of North Carolina
March 31, 1995
are being contested in good faith by appropriate proceedings and as to
which Guarantor, the Company or such Subsidiary has established adequate
reserves in conformity with GAAP.
(f) Guarantor is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(g) Neither the Guarantor nor the Company, nor any of the
Subsidiaries of either Guarantor or the Company, is engaged or will
engage, principally or as one of its important activities, in the business
of extending credit for the purpose of "purchasing" or "carrying" any
"margin stock" within the respective meanings of such terms under
Regulation U. No part of the proceeds of any Loan made under the
Warehousing Agreement will be used, directly or indirectly, for
"purchasing" or "carrying" "margin stock" as so defined or for any purpose
which violates, or which would be inconsistent with, the applicable
provisions of the Regulations of the Board of Governors of the Federal
Reserve System.
(h) Guarantor and each of its ERISA Affiliates, if any, are in
compliance in all respects with the requirements of ERISA and no
Reportable Event has occurred under any Plan maintained by the Company or
any of its ERISA Affiliates which is likely to result in the termination
of such Plan for purposes of Title IV of ERISA.
(i) Guarantor has not issued any unregistered securities in
violation of the registration requirements of Section 5 of the Securities
Act of 1933, as amended, or any other existing applicable law, and is in
compliance, in all material respects, with all existing applicable rules,
regulations and requirements under the Securities Act of 1933, as amended,
or the Securities and Exchange Act of 1934, as amended.
(j) No consent, approval, authorization of, or registration,
declaration or filing with, any Governmental Authority is required on the
part of Guarantor in connection with the execution and delivery of the
Credit Documents to which Guarantor is a party or the performance of or
compliance with the terms, provisions and conditions hereof or thereof.
(k) Guarantor shall not permit the acquisition, purchase,
redemption, retirement, transfer or issuance of any shares of its capital
stock now or hereafter outstanding which would result in Emergent
Financial Corporation owning less than one hundred percent (100%) of
Guarantor's outstanding capital stock.
12. This Guaranty shall be deemed to be made under and shall be governed
by the laws of the State of North Carolina.
13. If any of the provisions of this Guaranty shall contravene or be held
invalid under the laws of any jurisdiction, this Guaranty shall be construed as
if not containing those provisions and the rights and obligations of the
parties hereto shall be construed and enforced accordingly.
90
First Union National Bank of North Carolina
March 31, 1995
Executed and sealed as of the day and year first above written.
Emergent Mortgage Corp., a South Carolina
corporation
[CORPORATE SEAL] By:
------------------------------
Name:
------------------------------
Attest: Title:
------------------------------
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
00
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
SECOND AMENDMENT TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
SECOND AMENDMENT TO MORTGAGE LOAN WAREHOUSING AGREEMENT (the "Amendment"),
dated as of April 30, 1995, among CAROLINA INVESTORS, INC. ("Borrower")
EMERGENT FINANCIAL CORPORATION and EMERGENT GROUP, INC. (each, jointly and
severally, a "Guarantor" and, collectively, the "Guarantors"), and FIRST UNION
NATIONAL BANK OF NORTH CAROLINA ("Lender").
W I T N E S S E T H:
WHEREAS, the Borrower and the Lender are parties to a Mortgage Loan
Warehousing Agreement dated as of November 22, 1994, as previously amended by
that certain letter agreement dated as of March 31, 1995 (as so amended, the
"Agreement"); and
WHEREAS, the parties hereto wish to amend the Agreement as set forth
below; and
WHEREAS, subject to and upon the terms and conditions herein set forth,
the Lender is willing to continue to make available to the Borrower the credit
facilities provided for in the Agreement; and
WHEREAS, a specific condition to the willingness of the Lender to continue
to make available to the Borrower the credit facilities provided for in the
Agreement, is the reaffirmation by each of the Guarantors of the Guaranty to
which such Guarantor is a party; and
WHEREAS, each of the Guarantors will derive a material benefit from the
continued availability to the Borrower of the credit facilities provided for in
the Agreement and is therefore willing to reaffirm the Guaranty to which such
Guarantor is a party;
NOW, THEREFORE, in consideration of the premises and agreements contained
herein, the parties hereto hereby agree as follows:
6. All capitalized terms used herein and not otherwise defined shall
have the respective meanings provided to such terms in the Agreement, as
amended hereby.
7. Amendments to the Agreement.
a. Section 2(l)(2) of the Agreement is hereby deleted in its entirety
and replaced with the following:
"(2) A commitment fee, such fee to be computed on a per annum basis
payable in monthly installments, in arrears, on the applicable dates
specified in Paragraph 2(d) hereof, each such installment to be in an
amount equal to the product of: (i) the average daily amount by which the
Credit Limit exceeds the amount of Loans outstanding, multiplied by (ii)
0.125%, divided by (iii) 12."
b. The following phrase is hereby added to the end of Section 7(g) of
the Agreement immediately prior to the period at the end thereof:
92
First Union National Bank of North Carolina
March 31, 1995
"; provided, however, that the Company shall be permitted to guaranty
any indebtedness or other obligations of the following two (2)
Subsidiaries of the Company: (i) Premier Financial Services, Inc., and
(ii) The Loan Pro$, Inc. which may be incurred in the normal course of
such Subsidiaries' business, so long as the Company or Emergent Financial
Corporation remains the sole shareholder of Premier Financial Services,
Inc. and continues to own at least eighty percent (80%) of the outstanding
capital stock of The Loan Pro$, Inc.
c. Section 7(o) of the Agreement is hereby deleted in its entirety and
replaced with the following:
"7(o) Maximum Affiliate Receivables. Permit the amount of Affiliate
Receivables to exceed an amount equal to (i)(A) from the date hereof
through and including June 29, 1995, $21,000,000, (B) from June 30, 1995
through and including December 30, 1995, $15,000,000 and (c) on December
31, 1995 and thereafter, $10,000,000; less (ii) one hundred percent (100%)
of all Affiliate Receivables owed to the Company by any Affiliate of the
Company at the time of the sale of such Affiliate; provided, however, that
in the event that the Company requests that the Lender waive any amount
contained in subsection (i) hereof, the Lender shall not unreasonably
withhold its consent to such waiver, provided that such waiver is in an
amount and for a time period reasonably acceptable to the Lender in its
sole discretion."
d. The definition of the term "Credit Limit" contained in Section 10 of
the Agreement is hereby amended by deleting the amount "$10,000,000" therefrom
and inserting the amount "$20,000,000" in lieu thereof.
e. Subparagraph (j) in the definition of the term "Eligible Mortgage
Loan" contained in Section 10 of the Agreement is hereby amended by adding the
following phrase immediately prior to the period at the end thereof:
"; and (5) in the case of second priority Mortgage Loans, one (1) lien
superior in priority to the Lien in favor of the Company"
f. Subparagraph (l) in the definition of the term "Eligible Mortgage
Loan" contained in Section 10 of the Agreement is hereby deleted in its
entirety and replaced with the following:
"(l) The outstanding principal balance of such Mortgage Loan is not
less than $40,000 and does not exceed $350,000; provided, however, that
the outstanding principal balance of any Mortgage Loan may be less than
$40,000 so long as (i) the outstanding principal balance of such Mortgage
Loan is not less than $20,000, and (ii) the Unit Collateral Value of such
Mortgage Loan, when added to the Unit Collateral Values of all other
Mortgage Loans with respect to which the outstanding principal balance is
less than $40,000, shall not exceed $5,000,000."
g. Subparagraph (m) in the definition of the term "Eligible Mortgage
Loan" contained in Section 10 of the Agreement is hereby deleted in its
entirety and replaced with the following:
93
First Union National Bank of North Carolina
March 31, 1995
"(m) The Property shall be improved, such improvements to
consist of a completed one-to-four unit owner-occupied single family
residence, including, but not limited to, a condominium, planned unit
development or townhouse but excluding in any event a co-op or mobile
home."
h. Subparagraph (p) in the definition of the term "Eligible Mortgage
Loan" contained in Section 10 of the Agreement is hereby deleted in its
entirety and replaced with the following:
"(p) Said Mortgage Loan was originated after January 1, 1991."
i. Subparagraph (s) in the definition of the term "Eligible Mortgage
Loan" contained in Section 10 of the Agreement is hereby deleted in its
entirety and replaced with the following:
"(s) Said Mortgage Loan is secured by a first or second priority
mortgage or deed of trust on the Property covered thereby."
j. Subparagraph (w) in the definition of the term "Eligible Mortgage
Loan" contained in Section 10 of the Agreement is hereby deleted in its
entirety and replaced with the following:
"(w)(i) The original principal balance of said Mortgage Loan is not
greater than eighty-five percent (85%) of the fair market value of the
Property covered by such Mortgage Loan, as shown on the appraisal
delivered to Lender as a Required Document in connection with such
Mortgage Loan; and (ii) the aggregate original principal balances of all
Mortgage Loans delivered to the Lender as Eligible Mortgage Loans is not
greater than eighty percent (80%) of the aggregate fair market value of
all the Properties covered by such Mortgage Loans, as shown on the
appraisals delivered to Lender as Required Documents in connection with
such Mortgage Loans."
k. The definition of the term "Maturity Date" contained in Section 10 of
the Agreement is hereby amended by deleting the date "April 30, 1995" from
subsection (a) thereof and inserting the date "March 30, 1996" in lieu thereof.
l. The definition of the term "Unit Collateral Value" contained in
Section 10 of the Agreement is hereby deleted in its entirety and replaced with
the following:
"'Unit Collateral Value' shall mean at any time, with respect to each
Eligible Mortgage Loan included in the Borrowing Base, eighty percent
(80%) of the unpaid principal balance thereof at such time."
m. Exhibit G to the Agreement is hereby deleted in its entirety and the
form of Exhibit G attached as ANNEX II hereto is substituted in lieu thereof.
n. Exhibit J to the Agreement is hereby deleted in its entirety and the
form of Exhibit J attached as ANNEX III hereto is substituted in lieu thereof.
8. This Amendment shall become effective as of the date hereof, provided
that the Agent shall have received the following items:
94
First Union National Bank of North Carolina
March 31, 1995
(A) A copy of this Amendment executed by the Borrower, by each of
the Guarantors and the Lender (whether such party shall have
signed the same or different copies);
(B) A Reaffirmation of Guaranty (the "Reaffirmation") executed by each of
the Guarantors in favor of the Lender, each such Reaffirmation to be
substantially in the form of ANNEX I hereto; and
(C) Resolutions of the Borrower and of each of the Guarantors authorizing
the execution of this Amendment and, in the case of each of the
Guarantors, the Reaffirmation to which such Guarantor is a party.
9. The Borrower hereby represents and warrants that as of the effective
date hereof, there exists no Default or Event of Default under the Agreement
and the Borrower has no claim or cause of action against the Lender arising out
of or relating in any way to the Agreement (as amended hereby) or the other
Credit Documents, and the Borrower hereby waives and releases any and all
claims or causes of action which the Borrower may have as of the effective date
hereof against the Lender arising out of or relating in any way to the
Agreement (as amended hereby) or the other Credit Documents.
10. This Amendment is limited and, except as set forth herein, shall not
constitute a modification, acceptance or waiver of any provision of the
Agreement, or any other document or instrument entered into in connection
therewith.
11. This Amendment may be executed in any number of counterparts by the
different parties hereto on separate counterparts, each of which counterparts
when executed and delivered shall be an original, but all of which together
shall constitute one and the same instrument. A complete set of counterparts
shall be lodged with each of the Borrower and the Lender.
12. This Amendment and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by the laws of the
State of North Carolina.
13. From and after the date hereof, all references in the Agreement, and
any other document or instrument entered into in connection therewith, to the
Agreement shall be deemed to be references to the Agreement as amended hereby.
14. The Guarantors join in the execution and delivery of this Amendment
to acknowledge and consent to the terms hereof and hereby reaffirm their
obligations under the Guaranties.
15. THE LENDER, THE GUARANTORS AND THE BORROWER EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AMENDMENT AND
ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY RELATING HERETO OR THERETO. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE LENDER TO ENTER INTO THIS AMENDMENT.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
95
First Union National Bank of North Carolina
March 31, 1995
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and sealed as of the day and year first above written.
CAROLINA INVESTORS, INC.,
[CORPORATE SEAL] a South Carolina corporation
ATTEST:
By: By:
-------------------------- -----------------------------
Name: Name:
-------------------------- -----------------------------
Title: Title:
-------------------------- -----------------------------
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, a national banking association
[CORPORATE SEAL]
ATTEST:
By: By:
-------------------------- -----------------------------
Name: Name:
-------------------------- -----------------------------
Title: Title:
-------------------------- -----------------------------
EMERGENT FINANCIAL CORPORATION, a South
Carolina corporation, as a Guarantor
[CORPORATE SEAL]
ATTEST:
By: By:
-------------------------- -----------------------------
Name: Name:
-------------------------- -----------------------------
Title: Title:
-------------------------- -----------------------------
EMERGENT GROUP, INC., a South Carolina
corporation, as a Guarantor
[CORPORATE SEAL]
ATTEST:
By: By:
-------------------------- -----------------------------
Name: Name:
-------------------------- -----------------------------
Title: Title:
-------------------------- -----------------------------
00
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
ANNEX I
REAFFIRMATION OF GUARANTY
97
First Union National Bank of North Carolina
March 31, 1995
ANNEX II
EXHIBIT G
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF NOVEMBER 22, 1994
BY AND BETWEEN CAROLINA INVESTORS, INC. AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
FORM OF BORROWING BASE SCHEDULE
This Borrowing Base Schedule is furnished pursuant to the Mortgage Loan
Warehousing Agreement dated as of November 22, 1994, as amended from time to
time, among the Company and the Lender (the "Agreement"). Unless otherwise
defined herein, the terms used in this Borrowing Base Schedule have the
meanings ascribed thereto in the Agreement.
A. Aggregate Unit Collateral Values of
Eligible Mortgage Loans in
Borrowing Base as of previous
Borrowing Base Schedule delivered
by the Company $
------------
B. Aggregate Unit Collateral Values of
Eligible Mortgage Loans submitted
for inclusion in Borrowing Base
since previous Borrowing Base
Schedule delivered by the Company $
------------
C. Sum of (A plus B) $
------------
D. Aggregate Unit Collateral Values of
Eligible Mortgage Loans previously
released by the Lender under trust
receipts for which the full purchase
price has been received by the Lender
since previous Borrowing Base Schedule
delivered by the Company $
------------
E. Amount by which Aggregate Unit Collateral
Values of Eligible Mortgage Loans
withdrawn from the possession of the
Lender under a trust receipt and not
returned to the Lender exceeds $500,000 $
------------
98
First Union National Bank of North Carolina
March 31, 1995
F. Aggregate Unit Collateral Values of Eligible
Mortgage Loans withdrawn from the
possession of the Lender under a trust
receipt more than 10 days prior to the date
of this schedule and not returned to
the Lender $
-----------
G. Aggregate Unit Collateral Values of
Eligible Mortgage Loans withdrawn from
the possession of the Lender and shipped
to an investor for purchase more than
30 days prior to the date of this schedule
and not returned to the Lender or for which
the full purchase price has not been
received by the Lender $
-----------
H. Aggregate Unit Collateral Value of
Eligible Mortgage Loans for which
the original recorded mortgage has not
been delivered to the Lender within 150
days of inclusion in the Borrowing Base $
-----------
I. Amount by which the Unit Collateral Values
of all Mortgage Loans with respect to which
the outstanding principal balance is less
than $40,000 exceeds $5,000,000 $
-----------
J. Sum of (D plus E plus F plus G plus H
plus I) $
-----------
K. Adjusted Collateral Value of the
Borrowing Base (C minus J) $
-----------
L. Aggregate principal amount of Loans
outstanding $
-----------
M. Borrowing Base availability (K minus L;
must equal or exceed zero) $
-----------
The undersigned hereby certifies that, as of the date hereof:
(1) I am the duly elected _______________ of the Company;
(2) The above schedule accurately states the Collateral Value of the Borrowing
Base and the aggregate principal amount of Loans outstanding;
(3) All Mortgage Loans included in the Borrowing Base as Eligible Mortgage
Loans comply in all respects with the requirements of the definition of
"Eligible Mortgage Loan"; and
00
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
(4) I have no knowledge of the existence of any condition or event
which constitutes an Event of Default under the Agreement.
Certified on behalf of the undersigned this _____ day of _________,
19___.
CAROLINA INVESTORS, INC.
By:
---------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
000
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
ANNEX III
EXHIBIT J
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF NOVEMBER 22, 1994
BY AND BETWEEN CAROLINA INVESTORS, INC. AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
SCHEDULE OF REQUIRED DOCUMENTS
1. An original written Loan Request, signed by an officer of the Company
who is authorized to make such request;
2. An original fully completed Delivery Certificate (as defined in the
Security Agreement);
3. The original executed promissory note relating to the Mortgage Loan
(properly endorsed or assigned to the Company if purchased by the Company),
which promissory note shall be duly endorsed in blank and assigned in blank
without recourse by the Company;
4. The original executed mortgage or deed of trust relating to the
Mortgage Loan duly recorded in the appropriate jurisdiction; provided, however,
that a certified copy of the executed mortgage or deed of trust relating to the
Mortgage Loan may be delivered to the Lender in lieu of the original recorded
deed of trust or mortgage until such time as the original recorded mortgage or
deed of trust is received from the recording jurisdiction and submitted to the
Lender, provided further that such original recorded deed of trust or mortgage
must be delivered to the Lender within one hundred fifty (150) days following
the inclusion of the Mortgage Loan in the Borrowing Base;
5. An original executed and recordable but unrecorded assignment of the
mortgage or deed of trust relating to the Mortgage Loan (unless the Lender
determines that under applicable State law the assignment should be recorded in
order to adequately protect its interest, in which case the assignment shall be
recorded by the Company and a certified true copy thereof shall be provided to
the Lender), together with the original or a duly certified copy of a proper
assignment or assignments of the mortgage or deed of trust from the original
holder through any subsequent transferees to the Company, duly recorded if
local requirements in the jurisdiction in which the Property is located
required the recordation of such assignment or assignments;
6. An original (or a certified copy of a) mortgagee title insurance
policy issued by a nationally recognized title insurance company acceptable to
the Lender, together with any attachments and customary endorsements thereto,
which insures that the mortgage or deed of trust securing the promissory note
relating to the Mortgage Loan is a valid and enforceable first or second lien
on the Property covered by the Mortgage Loan);
7. A copy of the first two pages of an appraisal of the Property covered
by the Mortgage Loan by an appraiser acceptable to the Lender in its sole and
absolute discretion, which appraisal demonstrates that the principal amount of
the promissory note relating to such Mortgage Loan is not greater than the
lesser of (i) eighty-five percent (85%) of the fair market appraisal of such
Property or (ii) the purchase price paid by the Obligor on such Mortgage Loan
for the Property, provided that such purchase occurred simultaneously with the
closing of the Mortgage Loan; and
000
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
8. Satisfactory evidence of compliance with the requirements of
such other laws as may, from time to time, become applicable to the Mortgage
Loan.
000
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
REAFFIRMATION OF GUARANTY
TO: First Union National Bank of North Carolina
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx,
XXXX-00, XX-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
THIS REAFFIRMATION OF GUARANTY (this "Reaffirmation"), dated as of April
30, 1995, is made by EMERGENT FINANCIAL CORPORATION, a South Carolina
corporation ("Guarantor"), in favor of the "Lender" (as defined below) and is
executed pursuant to the terms of that certain Second Amendment to Mortgage
Loan Warehousing Agreement of even date herewith (the "Amendment") among
Carolina Investors, Inc. ("Borrower") the Guarantor, Emergent Group, Inc. and
First Union National Bank of North Carolina ("Lender") which Amendment amends
that certain Mortgage Loan Warehousing Agreement dated as of November 22, 1994
among the Borrower, the Guarantors and Lender, as previously amended by that
certain letter agreement dated as of March 31, 1995 among the Borrower, the
Guarantors and the Lender (as so amended, the "Warehousing Agreement").
Capitalized terms used in this Reaffirmation and not otherwise defined herein
shall have the meanings set forth in the Warehousing Agreement, as amended by
the Amendment.
Pursuant to the terms and conditions of the Warehousing Agreement,
Guarantor executed a Guaranty dated as of November 22, 1994 in favor of the
Lender, pursuant to which Guarantor agreed to guaranty the payment of the
Obligations of Borrower to Lender.
Lender has agreed to amend the Warehousing Agreement as set forth in the
Amendment.
A specific condition to the willingness of the Lender to enter into the
Amendment and to continue to make available to Borrower the credit facilities
provided for in the Warehousing Agreement, as so amended, is the reaffirmation
of the terms of the Guaranty. Guarantor owns directly or indirectly 100% of
the stock of the Borrower and thus will benefit from the continued availability
to Borrower of the credit facilities provided for in the Warehousing Agreement.
To induce the Lender to modify the terms of the Warehousing Agreement
pursuant to the Amendment and to continue to make available to Borrower the
credit facilities provided for the Warehousing Agreement, as so amended, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Guarantor hereby reaffirms its obligations under the
Guaranty and agrees that the Guaranty shall remain in full force and effect
with respect to the Obligations.
000
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
IN WITNESS WHEREOF, the undersigned has executed this Reaffirmation
under seal as of the date and year first written above.
GUARANTOR
EMERGENT FINANCIAL CORPORATION,
[CORPORATE SEAL] a South Carolina corporation
ATTEST:
By:
----------------------------- ---------------------------
Secretary President
000
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
REAFFIRMATION OF GUARANTY
TO: First Union National Bank of North Carolina
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx,
XXXX-00, XX-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
THIS REAFFIRMATION OF GUARANTY (this "Reaffirmation"), dated as of April
30, 1995, is made by EMERGENT GROUP, INC., a South Carolina corporation
("Guarantor"), in favor of the "Lender" (as defined below) and is executed
pursuant to the terms of that certain Second Amendment to Mortgage Loan
Warehousing Agreement of even date herewith (the "Amendment") among Carolina
Investors, Inc. ("Borrower") the Guarantor, Emergent Financial Corporation and
First Union National Bank of North Carolina ("Lender") which Amendment amends
that certain Mortgage Loan Warehousing Agreement dated as of November 22, 1994
among the Borrower, the Guarantors and Lender, as previously amended by that
certain letter agreement dated as of March 31, 1995 among the Borrower, the
Guarantors and the Lender (as so amended, the "Warehousing Agreement").
Capitalized terms used in this Reaffirmation and not otherwise defined herein
shall have the meanings set forth in the Warehousing Agreement, as amended by
the Amendment.
Pursuant to the terms and conditions of the Warehousing Agreement,
Guarantor executed a Guaranty dated as of November 22, 1994 in favor of the
Lender, pursuant to which Guarantor agreed to guaranty the payment of the
Obligations of Borrower to Lender.
Lender has agreed to amend the Warehousing Agreement as set forth in the
Amendment.
A specific condition to the willingness of the Lender to enter into the
Amendment and to continue to make available to Borrower the credit facilities
provided for in the Warehousing Agreement, as so amended, is the reaffirmation
of the terms of the Guaranty. Guarantor owns directly or indirectly 100% of
the stock of the Borrower and thus will benefit from the continued availability
to Borrower of the credit facilities provided for in the Warehousing Agreement.
To induce the Lender to modify the terms of the Warehousing Agreement
pursuant to the Amendment and to continue to make available to Borrower the
credit facilities provided for the Warehousing Agreement, as so amended, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Guarantor hereby reaffirms its obligations under the
Guaranty and agrees that the Guaranty shall remain in full force and effect
with respect to the Obligations.
000
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
IN WITNESS WHEREOF, the undersigned has executed this Reaffirmation under
seal as of the date and year first written above.
GUARANTOR
EMERGENT GROUP, INC.,
[CORPORATE SEAL] a South Carolina corporation
ATTEST:
By:
----------------------------- ---------------------------------
Secretary President
000
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
THIRD AMENDMENT TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
THIRD AMENDMENT TO MORTGAGE LOAN WAREHOUSING AGREEMENT (the "Amendment"),
dated as of ___________, 1995, among CAROLINA INVESTORS, INC. ("Borrower"),
EMERGENT FINANCIAL CORPORATION, EMERGENT GROUP, INC. and EMERGENT MORTGAGE
CORP. (each, jointly and severally, a "Guarantor" and, collectively, the
"Guarantors"), and FIRST UNION NATIONAL BANK OF NORTH CAROLINA ("Lender").
W I T N E S S E T H:
WHEREAS, the Borrower and the Lender are parties to a Mortgage Loan
Warehousing Agreement dated as of November 22, 1994, as previously amended by
that certain letter agreement dated as of March 31, 1995 and by that certain
Second Amendment to Mortgage Loan Warehousing Agreement dated as of April 30,
1995 (as so amended, the "Agreement"); and
WHEREAS, the parties hereto wish to amend the Agreement as set forth
below; and
WHEREAS, subject to and upon the terms and conditions herein set forth,
the Lender is willing to continue to make available to the Borrower the credit
facilities provided for in the Agreement; and
WHEREAS, a specific condition to the willingness of the Lender to continue
to make available to the Borrower the credit facilities provided for in the
Agreement, is the reaffirmation by each of Emergent Financial Corporation and
Emergent Group, Inc. of the Guaranty to which such Guarantor is a party and the
guaranty by Emergent Mortgage Corporation of the Obligations; and
WHEREAS, each of the Guarantors will derive a material benefit from the
continued availability to the Borrower of the credit facilities provided for in
the Agreement and therefore each of Emergent Financial Corporation and Emergent
Group, Inc. is willing to reaffirm the Guaranty to which such Guarantor is a
party and Emergent Mortgage Corporation is willing to enter into a guaranty of
the Obligations;
NOW, THEREFORE, in consideration of the premises and agreements contained
herein, the parties hereto hereby agree as follows:
9. All capitalized terms used herein and not otherwise defined shall
have the respective meanings provided to such terms in the Agreement, as
amended hereby.
10. Amendments to the Agreement.
a. Section 1(a)(1) of the Agreement is hereby deleted in its entirety
and replaced with the following:
"(1) The difference of (A) the Credit Limit and (B) the principal
amount outstanding under the EMC Facility;"
b. Section 2(b) of the Agreement is hereby amended by deleting the time
"10:00 a.m." contained therein and substituting the time "12:00 p.m." in lieu
thereof.
000
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
c. Section 2(l)(2) of the Agreement is hereby deleted in its entirety
and replaced with the following:
"(2) A commitment fee, such fee to be computed on a per annum basis
payable in monthly installments, in arrears, on the applicable dates
specified in Paragraph 2(d) hereof, each such installment to be in an
amount equal to the product of: (i) the average daily amount by which the
Credit Limit exceeds the sum of (A) the amount of Loans outstanding and
(B) the principal amount outstanding under the EMC Facility, multiplied by
(ii) 0.125%, divided by (iii) 12."
d. Section 3(a) of the Agreement is hereby deleted in its entirety and
replaced with the following:
"3(a) Security Agreement and Financing Statements. On or before
the date hereof, the Company shall execute and deliver to the Lender: (1)
a security agreement in the form of that attached hereto as Exhibit B (the
"Security Agreement"), pursuant to which the Company shall pledge, assign
and grant to the Lender a perfected, first priority security interest in
and lien upon the Collateral as security for the Obligations and the
Guaranteed Obligations, and (2) such UCC financing statements as the
Lender may request."
e. Section 3(b) of the Agreement is hereby deleted in its entirety and
replaced with the following:
"3(b) Parent Guaranties. On or before the date hereof, the
Company shall cause to be executed and delivered to the Lender by each of
the Parent Guarantors a continuing guaranty substantially in the form of
that attached hereto as Exhibit C-1 (collectively, the "Parent
Guaranties")."
f. The existing Section 3(c) to the Agreement is hereby changed to
Section 3(d) and a new Section 3(c) is hereby added to the Agreement as
follows:
"3(c) Affiliate Guaranty. Upon request of the Lender, the
Company shall cause to be executed and delivered to the Lender by EMC a
continuing guaranty substantially in the form of that attached hereto as
Exhibit C-2 (the "Affiliate Guaranty")."
g. Section 5(p) of the Agreement is hereby deleted in its entirety and
replaced with the following:
"5(p) Subsidiaries. The Company has no Subsidiaries."
h. Section 6(a)(2) of the Agreement is hereby amended by deleting the
phrase "7(k), 7(l), 7(m), 7(n), 7(o), 7(p), 7(q), 7(r), 7(s), 7(t), and 7(u)"
therefrom and substituting the phrase "7(k) through 7(u), inclusive," in lieu
thereof.
i. Section 6(a)(2) of the Agreement is hereby amended by adding the
following phrase immediately preceding the period at the end thereof:
000
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
"and further stating that no default or event of default exists under
any credit or financing agreement to which any Affiliate of the Company is
a party".
j. Section 6(a)(4) and 6(a)(5) of the Agreement are hereby amended by
deleting the phrase "either Guarantor" in each instance in which it appears
therein and substituting the phrase "any Guarantor" therefor in each instance.
k. A new Section 6(b)(6) is hereby added to the Agreement as follows:
"(6) Promptly, and in any event within five (5) business days after
the Company receives notice thereof, notice of the occurrence of any
default or event of default under any credit or financing agreement to
which any Affiliate of the Company is a party.
l. Section 7(f) of the Agreement is hereby deleted in its entirety and
replaced with the following:
"7(f) Subsidiaries. Without the prior consent of the Lender
(which consent shall not be unreasonably withheld), organize any
Subsidiary."
m. Section 7(g) of the Agreement is hereby deleted in its entirety and
replaced with the following:
"7(g) Investments; Advances; Guaranties. Make or commit to make
any advance, loan or extension of credit (other than Mortgage Loans made
in the ordinary course of the Company's business) or capital contribution
to, or purchase any stocks, bonds, notes, debenture or other securities
of, or make any other investment in, or guaranty the indebtedness or
obligations of any other Person, in excess of the level permitted in
Paragraph 7(o) below; provided, however, that (i) the Company shall be
permitted to guaranty the indebtedness or other obligations of the
following two (2) Affiliates of the Company: (A) Premier Financial
Services, Inc., and (B) The Loan Pro$, Inc., which may be incurred in the
normal course of such Affiliates' business, so long as Emergent Financial
Corporation remains the sole shareholder of Premier Financial Services,
Inc. and continues to own at least eighty percent (80%) of the outstanding
capital stock of The Loan Pro$, Inc., (ii) the Company shall be permitted
to guaranty any indebtedness of EMC to the Lender under the EMC Facility
pursuant to the Company Guaranty, and (iii) the Company shall be permitted
to make advances to EMC."
n. Section 7(i) of the Agreement is hereby deleted in its entirety and
the following paragraph is substituted in lieu thereof:
"7(i) Dividends. Without the prior consent of the Lender (which
consent shall not be unreasonably withheld), during any period consisting
of four (4) consecutive fiscal quarters, declare and pay any dividends, or
return any capital, to its shareholders or authorize or make any other
distribution, payment or delivery of property or cash to its shareholders
as such, or redeem, retire, purchase or otherwise acquire, directly or
indirectly, for a consideration, any shares of any class of its capital
stock now or hereafter outstanding (or any option or warrants issued by it
for or with respect to its capital stock), or set aside any funds for any
of the foregoing purposes, in excess of fifty
109
First Union National Bank of North Carolina
March 31, 1995
percent (50%) of the Company's net income as determined in accordance with
GAAP in effect as of the most recent quarter end for such four (4)
consecutive fiscal quarters; provided, however, that the Company shall
make no dividend or distribution under this Paragraph 7(i) if, at the time
of or after giving effect to such dividend or distribution, an Event of
Default shall have occurred and be continuing."
o. Section 7(k) of the Agreement is hereby amended by deleting the
amount "$2,750,000.00" contained therein and substituting the amount
"$4,000,000.00" therefor.
p. Section 7(m) of the Agreement is hereby amended by deleting the
amount "$5,000,000.00" contained therein and substituting the amount
"$6,500,000.00" therefor.
q. Section 7(o) of the Agreement is hereby deleted in its entirety and
the following paragraph is substituted in lieu thereof:
"7(o) Maximum Affiliate Receivables. Permit the amount of
Affiliate Receivables at any time to exceed the lesser of (i) an amount
equal to $25,000,000 less one hundred percent (100%) of all Affiliate
Receivables owed to the Company by any Affiliate of the Company at the
time of the sale of such Affiliate; or (ii) Book Net Worth plus twenty
percent (20%) of Investor Obligations."
r. Section 7(p) of the Agreement is hereby deleted in its entirety.
s. Section 7(q) of the Agreement is hereby amended by deleting the ratio
"1.75:1.0" contained therein and substituting the amount "1.25:1.0" therefor.
t. Section 7(r) of the Agreement is hereby amended by deleting the ratio
"3.0:1.0" contained therein and substituting the amount "1.75:1.0" therefor.
u. Section 7(s) of the Agreement is hereby deleted in its entirety and
substituting the following paragraph in lieu thereof:
"7(s) Delinquency Ratio. Permit the ratio of (i) all Mortgage Loans
owned by the Company and all mortgage loans owned by EMC, collectively, to
(ii) all Mortgage Loans owned by the Company and all mortgage loans owned
by EMC, in each case with respect to which any payment of principal or
interest is more than thirty (30) days past due the payment due date set
forth in the underlying loan documents, collectively, to be less than
5.0:1.0."
v. Section 7(t) of the Agreement is hereby deleted in its entirety.
w. Section 8(b) of the Agreement is hereby amended by deleting the
phrase "either of the Guarantors" contained therein and substituting the phrase
"any of the Guarantors" in lieu thereof.
x. Section 8(f) of the Agreement is hereby amended by deleting the
phrase "either of the Guarantors" in each instance in which it is contained
therein and substituting the phrase "any of the Guarantors" in lieu thereof in
each instance.
000
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
y. Section 8(i) of the Agreement is hereby amended by deleting the
phrase "Either of the Guarantors" contained therein and substituting the phrase
"Any of the Guarantors" in lieu thereof in each instance.
z. The following paragraphs are hereby added as new Paragraphs 8(m) and
8(n) to the Agreement:
"8(m) An Event of Default shall occur under the EMC Facility; or
"8(n) A default or event of default shall occur under any credit or
financing agreement to which any Affiliate of the Company is a party, any
applicable cure period provided for in such credit or financing agreement
shall have lapsed, and such default or event of default shall have
continued uncured for thirty (30) days following the lapse of such cure
period, if any (provided, however, that notwithstanding the foregoing, the
occurrence of a payment default under any such credit or financing
agreement shall constitute an automatic and immediate Event of Default
hereunder).
aa. The following definitions are hereby added to Section 10 of the
Agreement as new definitions:
"`Affiliate Guaranty' shall have the meaning given such term in
Paragraph 3(c) above, as such instrument may be amended, extended or
replaced from time to time."
"`Company Guaranty' shall mean that certain Guaranty of even date
herewith executed and delivered by the Company to the Lender, pursuant to
which the Company shall guaranty the payment and performance of the
Guaranteed Obligations."
"`EMC' shall mean Emergent Mortgage Corporation, a South Carolina
corporation."
"`EMC Facility' shall mean that certain revolving credit facility
extended by the Lender to EMC pursuant to the terms of that certain
Mortgage Loan Warehousing Agreement dated as of __________________, 1995
between EMC and the Lender and any and all agreements, documents and
instruments executed in connection therewith, as any of such items may be
amended, extended or replaced from time to time."
"`Guaranteed Obligations' shall mean any and all debts, obligations,
and liabilities of EMC to the Lender (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), arising out of or
related to the EMC Facility or any of the agreements, documents and
instruments executed in connection therewith."
"`Parent Guaranties' shall have the meaning given such term in
Paragraph 3(b) above, as both or either of such instruments may be
amended, extended or replaced from time to time, and "Parent Guaranty"
shall mean either of such instruments, as the context requires."
000
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
"`Parent Guarantors' shall mean, collectively, EFI and EGI, and
"Parent Guarantor" shall mean either of the foregoing Persons, as the
context requires."
bb. The definition of "Affiliate Receivables" contained in Section 10 of
the Agreement is hereby deleted in its entirety and the following definition is
hereby substituted in lieu thereof:
"`Affiliate Receivables' shall mean that amount reflected on the
consolidated balance sheet of the Company and its Subsidiaries as due to
the Company from Affiliates of the Company other than EMC (and as
determined in accordance with GAAP)."
cc. The definition of "Borrowing Base" contained in Section 10 of the
Agreement is hereby amended by adding the phrase "and the Guaranteed
Obligations" to the end thereof.
dd. The definition of "Eligible Mortgage Loan" contained in Section 10 of
the Agreement is hereby amended by deleting the amount "$500,000" contained in
subsection (k)(1) thereof and substituting the amount "$250,000" in lieu
thereof.
ee. The definition of "Eligible Mortgage Loan" contained in Section 10 of
the Agreement is hereby amended by deleting subsection (l) thereof in its
entirety and substituting the following in lieu thereof:
"(l) The outstanding principal balance of such Mortgage Loan is not
less than $40,000 and does not exceed $350,000; provided, however, that
the outstanding principal balance of any Mortgage Loan may be less than
$40,000 so long as (i) the outstanding principal balance of such Mortgage
Loan is not less than $20,000, and (ii) the Unit Collateral Value of such
Mortgage Loan, when added to (A) the Unit Collateral Value of all other
Mortgage Loans with respect to which the outstanding principal balance is
less than $40,000, and (B) the "Unit Collateral Value" of all mortgage
loans delivered to the Lender as "Eligible Mortgage Loans" under the EMC
Facility with respect to which the outstanding principal balance is less
than $40,000, shall not exceed $5,000,000."
ff. The definition of "Eligible Mortgage Loan" contained in Section 10 of
the Agreement is hereby amended by deleting subsection (w) thereof in its
entirety and substituting the following in lieu thereof:
"(w) (i) The original principal balance of said Mortgage Loan is not
greater than eighty-five percent (85%) of the fair market value of the
Property covered by such Mortgage Loan, as shown on the appraisal
delivered to Lender as a Required Document in connection with such
Mortgage Loan; and (ii) the aggregate principal balance of (A) all
Mortgage Loans delivered to the Lender as Eligible Mortgage Loans plus (B)
all mortgage loans delivered to the Lender as "Eligible Mortgage Loans"
under the EMC Facility, is not greater than eighty percent (80%) of the
aggregate fair market value of (X) all the Properties covered by such
Mortgage Loans, as shown on the appraisals delivered to Lender as Required
Documents in connection with such Mortgage Loans, plus (Y) all the real
property covered by those mortgage loans delivered to the Lender as
"Eligible Mortgage Loans" under the EMC Facility, as shown on the
appraisals delivered to Lender delivered in connection therewith."
000
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
gg. The definition of "Guaranties" contained in Section 10 of the
Agreement is hereby deleted in its entirety and the following definition is
substituted in lieu thereof:
"`Guaranties' shall mean, collectively, the Parent Guaranties and the
Affiliate Guaranty, and "Guaranty" shall mean any of such instruments, as
the context requires."
hh. The definition of "Guarantors" contained in Section 10 of the
Agreement is hereby deleted in its entirety and the following definition is
substituted in lieu thereof:
"`Guarantors' shall mean, collectively, the Parent Guaranties and
EMC, and "Guarantor" shall mean any of the foregoing Persons, as the
context requires."
ii. The definition of "Monthly Operating Report" contained in Section 10
of the Agreement is hereby deleted in its entirety and the following definition
is substituted in lieu thereof:
"'Monthly Operating Report'" shall mean a report with respect to the
Company and EMC, collectively, substantially in the form of that attached
hereto as Exhibit K."
jj. The definition of "Non-Performing Assets" contained in Section 10 of
the Agreement is hereby deleted in its entirety and the following definition is
substituted in lieu thereof:
"'Non-Performing Assets' shall mean, as to the Company and EMC,
collectively, (i) the outstanding principal balance of all Mortgage Loans
owned by the Company, and the outstanding principal balance of all
mortgage loans owned by EMC, which are classified as "non-accruing" or
"non- performing" on the most recent Monthly Operating Report delivered by
either the Company or EMC to the Lender on which are in the process of
foreclosure, and (ii) the amount shown on the most recent consolidated
balance sheet of the Company and its Subsidiaries as the value of all real
property owned by the Company or its Subsidiaries other than any real
property on which the offices of the Company or its Subsidiaries are
located, and (iii) the amount shown on the most recent balance sheet of
EMC as the value of all real property owned by EMC other than any real
property on which the offices of EMC are located."
kk. Schedule I to the Agreement is hereby amended by adding the following
name and address thereto as an additional Guarantor:
"Emergent Mortgage Corporation
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx"
ll. Exhibit C to the Agreement is hereby changed to Exhibit C-1 of the
Agreement and a new Exhibit C-2 is hereby added to the Agreement in the form
attached as ANNEX I hereto.
mm. Exhibit G to the Agreement is hereby amended by deleting the amount
"$500,000" contained in Section E thereof and substituting the amount
"$250,000" in lieu thereof.
000
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
nn. Exhibit G to the Agreement is hereby amended by deleting Section I
thereof in its entirety and substituting the following paragraph in lieu
thereof:
"I. Amount by which the sum of (i)
the Unit Collateral Value of all
Mortgage Loans with respect to
which the outstanding principal
balance is less than $40,000,
plus (ii) the "Unit Collateral
Value" of all mortgage loans
delivered to the Lender as
"Eligible Mortgage Loans" under
the EMC Facility with respect
to which the outstanding principal
balance is less than $40,000,
exceeds $5,000,000
$_________"
oo. Exhibit H to the Agreement is hereby amended by deleting the phrase
"7(k), 7(l), 7(m), 7(n), 7(o), 7(p), 7(q), 7(r), 7(s), 7(t), and 7(u)" from the
fourth paragraph thereof and substituting the phrase "7(k) through 7(u),
inclusive," in lieu thereof.
pp. Exhibit H to the Agreement is hereby amended by adding the following
phrase to the end of the third paragraph thereof, immediately preceding the
period at the end thereof:
", and (iii) no default or event of default exists under any credit
or financing agreement to which any Affiliate of the Company is a party"
11. This Amendment shall become effective as of the date hereof, provided
that the Agent shall have received the following items:
(A) A copy of this Amendment executed by the Borrower, by each of the
Guarantors and the Lender (whether such parties shall have signed the
same or different copies);
(B) The Affiliate Guaranty executed by EMC in favor of the Lender;
(C) A Reaffirmation of Guaranty (the "Reaffirmation") executed by each of
Emergent Financial Corporation and Emergent Group, Inc. in favor of
the Lender;
(D) A copy of the First Amendment to Security Agreement executed by the
Borrower and the Lender (whether such parties shall have signed the
same or different copies) in form and substance satisfactory to the
Lender;
(E) Such UCC-3 Financial Statement amendments listing the Borrower as
debtor and the Lender as secured party as may be requested by the
Lender; and
(F) Resolutions of the Borrower and of each of the Guarantors authorizing
(i) the execution of this Amendment, (ii) in the case of Emergent
Financial Corporation and Emergent Group, Inc., the Reaffirmation to
which such Guarantor is a party, and (iii) in the case of EMC, the
Guaranty to which EMC is a party.
000
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
12. The Borrower hereby represents and warrants that as of the effective
date hereof, there exists no Default or Event of Default under the Agreement
and the Borrower has no claim or cause of action against the Lender arising out
of or relating in any way to the Agreement (as amended hereby) or the other
Credit Documents, and the Borrower hereby waives and releases any and all
claims or causes of action which the Borrower may have as of the effective date
hereof against the Lender arising out of or relating in any way to the
Agreement (as amended hereby) or the other Credit Documents.
13. This Amendment is limited and, except as set forth herein, shall not
constitute a modification, acceptance or waiver of any provision of the
Agreement, or any other document or instrument entered into in connection
therewith.
14. This Amendment may be executed in any number of counterparts by the
different parties hereto on separate counterparts, each of which counterparts
when executed and delivered shall be an original, but all of which together
shall constitute one and the same instrument. A complete set of counterparts
shall be lodged with each of the Borrower and the Lender.
15. This Amendment and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by the laws of the
State of North Carolina.
16. From and after the date hereof, all references in the Agreement, and
any other document or instrument entered into in connection therewith, to the
Agreement shall be deemed to be references to the Agreement as amended hereby.
17. The Guarantors join in the execution and delivery of this Amendment
to acknowledge and consent to the terms hereof and hereby reaffirm their
obligations under the Guaranties.
18. THE LENDER, THE GUARANTORS AND THE BORROWER EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AMENDMENT AND
ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY RELATING HERETO OR THERETO. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE LENDER TO ENTER INTO THIS AMENDMENT.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
000
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and sealed as of the day and year first above written.
CAROLINA INVESTORS, INC.,
[CORPORATE SEAL] a South Carolina corporation
ATTEST:
By: By:
-------------------------- ---------------------------
Name: Name:
-------------------------- ---------------------------
Title: Title:
-------------------------- ---------------------------
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, a national banking association
[CORPORATE SEAL]
ATTEST:
By: By:
-------------------------- ---------------------------
Name: Name:
-------------------------- ---------------------------
Title: Title:
-------------------------- ---------------------------
EMERGENT FINANCIAL CORPORATION, a South
Carolina corporation, as a Guarantor
[CORPORATE SEAL]
ATTEST:
By: By:
-------------------------- ---------------------------
Name: Name:
-------------------------- ---------------------------
Title: Title:
-------------------------- ---------------------------
EMERGENT GROUP, INC., a South Carolina
corporation, as a Guarantor
[CORPORATE SEAL]
ATTEST:
By: By:
-------------------------- ---------------------------
Name: Name:
-------------------------- ---------------------------
Title: Title:
-------------------------- ---------------------------
EMERGENT MORTGAGE CORP., a South
Carolina corporation, as a Guarantor
[CORPORATE SEAL]
ATTEST:
By: By:
-------------------------- ---------------------------
Name: Name:
-------------------------- ---------------------------
Title: Title:
-------------------------- ---------------------------
000
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
March 31, 1995
ANNEX I
