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Exhibit 10.23
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AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
HOMESIDE LENDING, INC.,
HONOLULU MORTGAGE COMPANY, INC.,
THE LENDERS PARTIES HERETO,
THE BALANCE LENDERS
PARTIES HERETO,
THE FIRST NATIONAL BANK OF BOSTON,
AS COLLATERAL AGENT,
NATIONSBANK OF TEXAS, N.A.,
AS SYNDICATION AGENT,
THE SENIOR MANAGING AGENT, MANAGING AGENTS AND CO-AGENTS
AND
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT
DATED AS OF JANUARY 31, 1997
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS........................................................................ 2
1.1 Defined Terms.................................................................... 2
1.2 Other Definitional Provisions.................................................... 29
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND CAF ADVANCE FACILITY........................... 30
2.1 Tranche A Loans; Tranche A CAF Advances.......................................... 30
2.2 Tranche B Loans; Tranche B CAF Advances.......................................... 31
2.3 Making, Assignment and Purchase of Balance-Based Loans........................... 33
2.4 Funding of Balance-Based Loans; Repayment........................................ 33
2.5 Procedure for Balance-Based Loan Borrowings...................................... 33
2.6 Types of Rate-Based Loans........................................................ 34
2.7 Procedure for Rate-Based Borrowings; Procedure for CAF Advance
Borrowings................................................................. 34
2.9 Swing Line Commitments........................................................... 39
2.10 Minimum Amounts and Maximum Number of Eurodollar Tranches....................... 42
2.11 Interest Rates and Payment Dates for Rate-Based Loans........................... 42
SECTION 3. ADDITIONAL PROVISIONS APPLICABLE TO THE LOANS...................................... 43
3.1 Repayment of Loans; Interest; Evidence of Debt................................... 43
3.2 Fees ........................................................................... 44
3.3 Optional Reductions of Commitments; Mandatory Reductions of
Commitments................................................................ 44
3.4 Optional and Mandatory Prepayments; Net Repayments............................... 45
3.5 Computation of Discounts, Interest and Fees...................................... 47
3.6 Pro Rata Treatment and Payments.................................................. 47
3.7 Inability to Determine Interest Rate............................................. 49
3.8 Illegality....................................................................... 50
3.9 Requirements of Law.............................................................. 51
3.10 Taxes........................................................................... 52
3.11 Indemnity....................................................................... 53
SECTION 4. BORROWING BASE AND ELIGIBLE COLLATERAL............................................. 54
4.1 Tranche A Borrowing Base......................................................... 54
4.2 Tranche B Borrowing Base......................................................... 55
4.3 Borrowing Base Definitions....................................................... 56
4.4 Waiver of Requirements; Xxxx-to-Market........................................... 72
SECTION 5. REPRESENTATIONS AND WARRANTIES..................................................... 73
5.1 Financial Condition.............................................................. 73
5.2 No Change........................................................................ 75
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5.3 Corporate Existence; Compliance with Law......................................... 75
5.4 Corporate Power; Authorization; Enforceable Obligations.......................... 76
5.5 No Legal Bar..................................................................... 76
5.6 No Material Litigation........................................................... 76
5.7 No Default....................................................................... 76
5.8 Ownership of Property; Liens..................................................... 76
5.9 Intellectual Property............................................................ 76
5.10 Taxes........................................................................... 77
5.11 Federal Regulations............................................................. 77
5.12 ERISA........................................................................... 77
5.13 Investment Company Act; Other Regulations....................................... 78
5.14 Subsidiaries.................................................................... 78
5.15 Purpose of Loans................................................................ 78
5.16 Environmental Matters........................................................... 78
5.17 Capitalization.................................................................. 79
5.18 Disclosure...................................................................... 79
SECTION 6. CONDITIONS PRECEDENT............................................................... 80
6.1 Conditions to Initial Loans...................................................... 80
6.2 Conditions to Each Loan.......................................................... 81
SECTION 7. AFFIRMATIVE COVENANTS.............................................................. 83
7.1 Financial Statements............................................................. 83
7.2 Certificates; Other Information.................................................. 83
7.3 Payment of Obligations........................................................... 85
7.4 Conduct of Business and Maintenance of Existence................................. 85
7.5 Maintenance of Property; Insurance; Risk Management.............................. 85
7.6 Inspection of Property; Books and Records; Discussions........................... 86
7.7 Notices.......................................................................... 86
7.8 Environmental Laws............................................................... 87
7.9 Further Assurances............................................................... 87
7.10 Security Events................................................................. 88
7.11 Additional Collateral........................................................... 88
7.12 Compliance With Other Loan Documents............................................ 89
7.13 Maintenance of Agency Status.................................................... 89
7.14 GNMA Acknowledgement Agreements................................................. 89
SECTION 8. NEGATIVE COVENANTS................................................................. 89
8.1 Financial Condition Covenants.................................................... 89
8.2 Limitation on Indebtedness....................................................... 90
8.3 Limitation on Liens.............................................................. 91
8.4 Limitation on Fundamental Changes................................................ 93
8.5 Limitation on Sale of Assets..................................................... 93
8.6 Limitation on Leases............................................................. 93
8.7 Limitation on Sales and Leasebacks............................................... 93
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8.8 Limitation on Recourse Servicing................................................. 94
8.9 Limitation on Restricted Payments................................................ 94
8.10 Limitation on Capital Expenditures.............................................. 95
8.11 Limitation on Investments, Loans and Advances................................... 95
8.12 Limitation on Optional Payments and Modifications of Certain
Instruments and Agreements................................................. 95
8.13 Limitation on Transactions with Affiliates...................................... 96
8.14 Limitation on Negative Pledge Clauses........................................... 96
8.15 Limitation on Lines of Business................................................. 96
8.16 Limitation on Changes in Fiscal Year............................................ 96
SECTION 9. EVENTS OF DEFAULT................................................................ 96
SECTION 10. THE ADMINISTRATIVE AGENT; THE COLLATERAL AGENT ...................................100
10.1 Appointment.....................................................................100
10.2 Delegation of Duties............................................................100
10.3 Exculpatory Provisions..........................................................100
10.4 Reliance by Administrative Agent................................................100
10.5 Notice of Default...............................................................101
10.6 Non-Reliance on Administrative Agent, Collateral Agent and Other Lenders........101
10.7 Indemnification.................................................................102
10.8 Administrative Agent and Collateral Agent in Its Individual Capacity............102
10.9 Successor Administrative Agent..................................................102
10.10 Successor Collateral Agent.....................................................103
10.11 Concerning the Collateral Agent and the Security Agreements....................103
SECTION 11. MISCELLANEOUS.....................................................................103
11.1 Amendments and Waivers..........................................................103
11.2 Notices.........................................................................104
11.3 No Waiver; Cumulative Remedies..................................................105
11.4 Survival of Representations and Warranties......................................105
11.5 Payment of Expenses and Taxes...................................................105
11.6 Successors and Assigns; Participations and Assignments..........................106
11.7 Adjustments; Set-off............................................................109
11.8 Balance Lenders.................................................................109
11.9 Release of Collateral Upon Occurrence of Positive Security Event................109
11.10 Authority of HomeSide on Behalf of HonoMo......................................110
11.11 Termination of HonoMo as Borrower..............................................110
11.12 Counterparts...................................................................110
11.13 Severability...................................................................110
11.14 Integration....................................................................111
11.15 GOVERNING LAW..................................................................111
11.16 Submission To Jurisdiction; Waivers............................................111
11.17 Acknowledgements...............................................................111
11.18 WAIVERS OF JURY TRIAL..........................................................112
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SCHEDULES PAGE
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Schedule I Names, Addresses and Commitments of Lenders
Schedule II Approved Investors
Schedule 5.1 Certain Contingent Liabilities
Schedule 5.4 Consents, Etc.
Schedule 5.6 Litigation
Schedule 5.14 Subsidiary Guarantors
Schedule 5.17 Capitalization
Schedule 8.2 Certain Existing Indebtedness
Schedule 8.3 Certain Existing Liens
Schedule 8.13 Certain Affiliate Transactions
EXHIBITS
Exhibit A-1 Form of Balance-Based Note
Exhibit A-2 Form of Rate-Based Note
Exhibit A-3 Form of Swing Line Note
Exhibit A-4 Form of CAF Advance Note
Exhibit B Form of Balance Lender Agreement
Exhibit C-1 Form of Holdings Guarantee
Exhibit C-2 Form of Subsidiaries Guarantee
Exhibit C-3 Form of BMC Guarantee
Exhibit C-4 Form of HomeSide Guarantee
Exhibit D-1 Form of HomeSide Security Agreement
Exhibit D-2 Form of BMC Security Agreement
Exhibit D-3 Form of HonoMo Security Agreement
Exhibit E-1 Form of Holdings Pledge Agreement
Exhibit E-2 Form of HomeSide Pledge Agreement
Exhibit E-3 Form of BMC Pledge Agreement
Exhibit F-1 Form of Borrowing Notice (ABR/Swing Line)
Exhibit F-2 Form of Borrowing Notice (Eurodollar/Balance-Based)/Conversion Notice
Exhibit F-3 Form of Payment Notice
Exhibit G Form of Closing Certificate
Exhibit H-1 Form of Legal Opinion of Xxxxxxx, Xxxx & Xxxxx, LLP
Exhibit H-2 Form of Legal Opinion of Xxxxxxxx, Xxxxxxx & Xxxxxxx, a Professional
Corporation
Exhibit H-3 Form of Legal Opinion of General Counsel of HomeSide
Exhibit H-4 Form of Legal Opinion of Holland & Knight
Exhibit H-5 Form of Legal Opinion of Hawaii Counsel
Exhibit I Form of Assignment and Acceptance
Exhibit J Form of Intercreditor Agreement
Exhibit K-1 Form of Holdings Second Lien Pledge Agreement
Exhibit K-2 Form of BMC Second Lien Pledge Agreement
Exhibit L Form of CAF Advance Request
Exhibit M Form of CAF Advance Offer
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Exhibit N Form of CAF Advance Confirmation
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of January 31,
1997, among (i) HOMESIDE LENDING, INC., a Florida corporation ("HOMESIDE"), (ii)
HONOLULU MORTGAGE COMPANY, INC., a Hawaii corporation ("HONOMO"; each of
HomeSide and HonoMo, a "BORROWER", and, collectively, the
"BORROWERS"), (iii) the several banks and other financial institutions from time
to time parties to this Agreement (collectively, the "LENDERS"), (iv) the
Lenders from time to time designated as Balance Lenders pursuant to subsection
11.8 (in such capacity, collectively, the "BALANCE LENDERS"), (v) THE FIRST
NATIONAL BANK OF BOSTON, as Collateral Agent (in such capacity, the "COLLATERAL
AGENT"), (vi) NATIONSBANK OF TEXAS, N.A., as Syndication Agent, (vii) the Senior
Managing Agent, Managing Agents and Co-Agents and (viii) THE CHASE MANHATTAN
BANK, as Administrative Agent (in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H:
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WHEREAS, pursuant to the Stock Purchase Agreement, dated as of
December 11, 1995, as amended by Amendment Xx. 0, xxxxx xx xx Xxxxx 00, 0000 (xx
amended from time to time, the "BBMC STOCK PURCHASE AGREEMENT"), between The
First National Bank of Boston ("BANK OF BOSTON") and HomeSide, Inc., a Delaware
corporation ("HOLDINGS"), Holdings acquired (as hereinafter defined, the "BBMC
ACQUISITION") 100% of the issued and outstanding capital stock of HomeSide on
March 15, 1996 (the "BBMC CLOSING DATE");
WHEREAS, pursuant to the Stock Purchase Agreement, dated as of
March 4, 1996, as amended by Amendment Xx. 0, xxxxx xx xx Xxx 00, 0000 (xx
amended from time to time, the "BMC STOCK PURCHASE AGREEMENT"), between Holdings
and Xxxxxxx Xxxxx, Inc. ("XXXXXXX"), on May 31, 1996 (the "BMC Closing Date")
(i) Holdings acquired (as hereinafter defined, the "BMC ACQUISITION") 100% of
the issued and outstanding capital stock of Xxxxxxx Mortgage Company, a Florida
corporation ("BMC") (now known as HomeSide Holdings, Inc.), (ii) BancPLUS
Financial Corp. ("BANCPLUS FINANCIAL"), a Texas corporation and a wholly owned
subsidiary of BMC, merged with and into its wholly owned subsidiary, BancPLUS
Mortgage Company ("BANCPLUS"), a Texas corporation and the corporate parent of
HonoMo, with BancPLUS being the surviving corporation, (iii) BancPLUS thereupon
merged with and into HomeSide, with HomeSide being the surviving corporation and
HonoMo ultimately becoming a second-tier wholly owned subsidiary of HomeSide,
and (iv) Holdings thereupon contributed all of the capital stock of HomeSide to
BMC, resulting in HomeSide becoming a wholly owned subsidiary of BMC;
WHEREAS, the BBMC Acquisition and the BMC Acquisition were
financed, in part, with proceeds of loans made under the Credit Agreement, dated
as of May 31, 1996 (as heretofore amended or otherwise modified, the "EXISTING
CREDIT AGREEMENT"), among the Borrowers, certain of the Lenders, the Collateral
Agent, the Administrative Agent (under its former name, Chemical Bank) and
others;
WHEREAS, in addition to providing financing for the BBMC
Acquisition and the BMC Acquisition, the Existing Credit Agreement provided
credit facilities to finance the
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Borrowers' origination and acquisition of residential mortgage loans and
mortgage servicing rights and their ongoing working capital and general
corporate needs;
WHEREAS, the Borrowers wish to amend and restate the Existing
Credit Agreement; and
WHEREAS, the Lenders are willing to amend and restate the
Existing Credit Agreement on and subject to the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises, the parties
hereto hereby agree that on the Closing Date the Existing Credit Agreement will
be amended and restated in its entirety as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes of this definition: "BASE CD
RATE" shall mean the sum of (a) the product of (i) the Three-Month
Secondary CD Rate and (ii) a fraction, the numerator of which is one
and the denominator of which is one minus the C/D Reserve Percentage
and (b) the C/D Assessment Rate; and "THREE-MONTH SECONDARY CD RATE"
shall mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or, if
such day shall not be a Business Day, the next preceding Business Day)
by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day), or, if such rate
shall not be so reported on such day or such next preceding Business
Day, the average of the secondary market quotations for three-month
certificates of deposit of major money center banks in New York City
received at approximately 10:00 A.M., New York City time, on such day
(or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Administrative Agent from three New York City
negotiable certificate of deposit dealers of recognized standing
selected by it. Any change in the ABR due to a change in the Prime
Rate, the Base C/D Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective day of such
change in the Prime Rate, the Base C/D Rate or the Federal Funds
Effective Rate, respectively.
"ABR LOANS": Rate-Based Loans bearing interest based upon the
ABR.
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"ACQUISITIONS": the collective reference to the BBMC
Acquisition and the BMC Acquisition.
"ADJUSTED CONSOLIDATED TANGIBLE NET WORTH": at any time, the
sum of (i) Consolidated Tangible Net Worth, plus (ii) the amount of
carryover basis in connection with the Acquisitions, plus (iii) the
Appraised Value of the Eligible Servicing Portfolio as set forth in the
Appraisal thereof delivered pursuant to subsection 7.2(h) setting forth
such Appraised Value as at such time.
"ADMINISTRATIVE AGENT": as defined in the Preamble to this
Agreement.
"AFFILIATE": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors
of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"Agency": FHLMC, FNMA or GNMA.
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"AGGREGATE AVAILABLE TRANCHE A COMMITMENTS": at any time, an
amount equal to the excess, if any, of (a) the aggregate Commitments
then in effect over (b) the aggregate principal amount of Loans then
outstanding.
"AGGREGATE AVAILABLE TRANCHE B COMMITMENTS": at any time, an
amount equal to the excess, if any, of (a) the aggregate Tranche B
Commitments then in effect over (b) the aggregate principal amount of
all Tranche B Loans, Tranche B Swing Line Loans and Tranche B CAF
Advances then outstanding.
"AGREEMENT": this Amended and Restated Credit Agreement, as
amended, supplemented or otherwise modified from time to time.
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"APPLICABLE MARGIN": (a) with respect to each day during each
Interest Period relating to Balance-Based Loans, a rate per annum based
on the Rating Level in effect on the date which is two Business Days
prior to the first day of such Interest Period and (b) with respect to
each day during each Interest Period relating to Rate-Based Loans, a
rate per annum based on the Rating Level in effect on such day, in each
case as set forth below:
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Applicable Margin Applicable Margin Applicable Margin
for Tranche A for Tranche B for Tranche B
Rating Level Loans Advance Loans Portfolio Loans
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Rating I .350% .350% .550%
Rating II .375% .375% .625%
Rating III .375% .375% .625%
Rating IV .450% .450% .750%
Rating V .600% .600% 1.00%
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"APPRAISAL": an appraisal report with respect to the Eligible
Servicing Portfolio by an independent appraiser acceptable to the
Administrative Agent.
"Assignee": as defined in subsection 11.6(c).
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"AVAILABLE COMMITMENT": at any time for any Lender, an amount
equal to the excess, if any, of (a) such Lender's Commitment then in
effect over (b) the aggregate outstanding principal amount of all
Committed Loans then owing to such Lender.
"BALANCE-BASED LOANS": the collective reference to
Balance-Based Tranche A Loans and Balance-Based Tranche B Loans.
"BALANCE-BASED TRANCHE A LOANS": as defined in subsection
2.1(a).
"BALANCE-BASED TRANCHE B LOANS": as defined in subsection
2.2(a).
"BALANCE LENDERS": as defined in the Preamble to this
Agreement.
"BALANCE LENDER AGREEMENT": each Balance Lender Agreement,
substantially in the form of Exhibit B, entered into by HomeSide and a
Balance Lender pursuant to subsection 11.8.
"BALANCE LENDER DISCOUNT": with respect to each Balance-Based
Loan, an amount determined by the Administrative Agent with respect to
such Balance-Based Loan such that, when the Principal Amount of such
Balance-Based Loan is repaid by the applicable Borrower on the last day
of the Interest Period with respect thereto, such Principal Amount will
be equivalent to the proceeds of such Balance-Based Loan (net of the
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Balance Lender Discount) plus interest on such net proceeds calculated
at a rate per annum equal to the Applicable Margin.
"BANCPLUS": as defined in the Preamble to this Agreement.
"BANCPLUS FINANCIAL": as defined in the Preamble to this
Agreement.
"XXXXXXX": as defined in the Preamble to this Agreement.
"BBMC ACQUISITION": the acquisition on March 15, 1996 of the
capital stock of HomeSide by Holdings pursuant to the BBMC Stock
Purchase Agreement, and the transactions related thereto.
"BBMC CLOSING DATE": as defined in the Preamble to this
Agreement.
"BBMC STOCK PURCHASE AGREEMENT": as defined in the Preamble to
this Agreement.
"BMC": as defined in the Preamble to this Agreement.
"BMC ACQUISITION": the acquisition on May 31, 1996 of the
capital stock of BMC by Holdings pursuant to the BMC Stock Purchase
Agreement, and the transactions related thereto.
"BMC CLOSING DATE": as defined in the Preamble to this
Agreement.
"BMC GUARANTEE": the BMC Guarantee to be executed and
delivered by BMC, substantially in the form of Exhibit C-3, as the same
may be amended, supplemented or otherwise modified from time to time.
"BMC PLEDGE AGREEMENT": the BMC Pledge Agreement to be
executed and delivered by BMC, substantially in the form of Exhibit
E-3, as the same may be amended, supplemented or otherwise modified
from time to time.
"BMC SECURITY AGREEMENT": the Security and Collateral Agency
Agreement to be executed and delivered by BMC, substantially in the
form of Exhibit D-2, as the same may be amended, supplemented or
otherwise modified from time to time.
"BMC STOCK PURCHASE AGREEMENT": as defined in the Preamble to
this Agreement.
"BOARD": the Board of Governors of the Federal Reserve System.
"BORROWER": as defined in the Preamble to this Agreement.
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"BORROWER SECURITY AGREEMENT": either of the HomeSide Security
Agreement and the HonoMo Security Agreement, as the context may
require.
"BORROWING BASE CERTIFICATE": either of (a) a Tranche A
Borrowing Base Certificate or (b) a Tranche B Borrowing Base
Certificate.
"BORROWING DATE": any Business Day specified in a notice
pursuant to subsection 2.5, 2.7 or 2.9 as a date on which a Borrower
requests the Lenders to make Loans hereunder.
"BUSINESS": as defined in subsection 5.16.
"BUSINESS DAY": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close; PROVIDED, that when such term is used to
describe a day on which a borrowing, payment or interest rate
determination is to be made in respect of a LIBO Rate CAF Advance, such
day shall also be a day on which dealings in foreign currencies and
exchange between banks may be carried on in London, England.
"CAF ADVANCE": each CAF advance made pursuant to subsection
2.1(c) or 2.2(d).
"CAF ADVANCE AVAILABILITY PERIOD": the period from and
including the Closing Date to and including the date which is 7 days
prior to the Termination Date.
"CAF ADVANCE CONFIRMATION": each confirmation by HomeSide of
its acceptance of CAF Advance Offers, which confirmation shall be
substantially in the form of Exhibit N (or in such other form as shall
be specified by the Administrative Agent from time to time) and shall
be delivered to the Administrative Agent by facsimile transmission.
"CAF ADVANCE INTEREST PAYMENT DATE": as to each CAF Advance,
each interest payment date specified by HomeSide for such CAF Advance
in the related CAF Advance Request.
"CAF ADVANCE MATURITY DATE": as to any CAF Advance, the date
specified by HomeSide as such in its acceptance of the related CAF
Advance Offer.
"CAF ADVANCE OFFER": each offer by a Lender to make CAF
Advances pursuant to a CAF Advance Request, which offer shall contain
the information specified in Exhibit M (or in such other form as shall
be specified by the Administrative Agent from time to time) and shall
be delivered to the Administrative Agent by telephone, immediately
confirmed by facsimile transmission.
"CAF ADVANCE REQUEST": each request by HomeSide for Lenders to
submit bids to make CAF Advances, which request shall contain the
information in respect of such
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requested CAF Advances specified in Exhibit L (or in such other form as
shall be specified by the Administrative Agent from time to time) and
shall be delivered to the Administrative Agent in writing, by
facsimile transmission, or by telephone, immediately confirmed by
facsimile transmission.
"CAPITAL STOCK": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
"CASH EQUIVALENTS": (a) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit and eurodollar time deposits with maturities of
one year or less from the date of acquisition and overnight bank
deposits of any Lender or of any commercial bank having capital and
surplus in excess of $500,000,000, (c) commercial paper of a domestic
issuer rated at least A-1 by S&P or P-1 by Xxxxx'x, (d) securities with
maturities of one year or less from the date of acquisition issued or
fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such
state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may
be) are rated at least A by S&P or A2 by Xxxxx'x, or (e) shares of
money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (d) of this
definition.
"C/D ASSESSMENT RATE": for any day as applied to any ABR Loan,
the annual assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund maintained by the Federal Deposit
Insurance Corporation (the "FDIC") classified as well-capitalized and
within supervisory subgroup "B" (or a comparable successor assessment
risk classification) within the meaning of 12 C.F.R. [section]327.4
(or any successor provision) to the FDIC (or any successor) for the
FDIC's (or such successor's) insuring time deposits at offices of such
institution in the United States.
"C/D RESERVE PERCENTAGE": for any day as applied to any ABR
Loan, that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board for determining the maximum
reserve requirement for a Depositary Institution (as defined in
Regulation D of the Board) in respect of new non-personal time deposits
in Dollars having a maturity of 30 days or more.
"CHANGE OF CONTROL": the occurrence of any of the events or
circumstances described in Section 9(k).
"CHASE": The Chase Manhattan Bank, a New York banking
corporation.
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"CLOSING DATE": the date, on or before February 28, 1997, on
which the conditions precedent set forth in subsection 6.1 shall be
satisfied.
"CODE": the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL": all assets of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"COLLATERAL AGENT": as defined in the Preamble to this
Agreement.
"COMMITMENT": as to any Lender, the collective reference to
such Lender's Tranche A Commitment and Tranche B Commitment.
"COMMITMENT FEE RATE": for each day during each quarterly
calculation period, a rate per annum based on the Rating Level in
effect on such day, as set forth below:
Commitment Fee
RATING LEVEL RATE
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Rating I .100%
Rating II .125%
Rating III .125%
Rating IV .175%
Rating V .250%
"COMMITMENT PERCENTAGE": as to any Lender at any time, the
percentage which such Lender's Commitment then constitutes of the
aggregate Commitments, or, at any time after the Commitments shall have
expired or terminated, the percentage which the aggregate Principal
Amount of such Lender's Loans then outstanding constitutes of the
aggregate Principal Amount of the Loans then outstanding (including,
with respect to each Lender other than a Swing Line Lender, such
Lender's participating interest in outstanding Swing Line Loans and
excluding, with respect to each Swing Line Lender, the aggregate amount
of participating interests held by other Lenders in such Swing Line
Lender's Swing Line Loans).
"COMMITMENT PERIOD": the period from and including the date
hereof to but not including the Termination Date or such earlier date
on which the Commitments shall terminate as provided herein.
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"COMMITTED LENDER DISCOUNT": with respect to each
Balance-Based Loan, an amount determined by the Administrative Agent
with respect to such Balance-Based Loan such that, when the Principal
Amount of such Balance-Based Loan is repaid by the applicable Borrower
on the last day of the Interest Period with respect thereto, such
Principal Amount will be equivalent to the proceeds of such
Balance-Based Loan (net of the Committed Lender Discount) plus interest
accrued during such Interest Period on such net proceeds calculated at
a rate per annum equal to (a) in the case of each Balance-Based Loan
other than any Balance-Based Loan made while a Substitute Basis Notice
is outstanding, the Eurodollar Rate plus the Applicable Margin in
respect of such Balance-Based Loan and the applicable Interest Period,
and (b) in the case of each Balance-Based Loan made while a Substitute
Basis Notice is outstanding, the Substitute Basis plus the Applicable
Margin.
"COMMITTED LOANS": all Loans other than CAF Advances.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, which is under common control with HomeSide within the
meaning of Section 4001 of ERISA or is part of a group which includes
HomeSide and which is treated as a single employer under Section 414 of
the Code.
"CONSOLIDATED CASH FLOW": for any period, Consolidated Net
Income for such period, PLUS (a) the sum of
(i) amortization for such period, including,
without limitation, amortization of mortgage servicing rights
(including Purchased Mortgage Servicing Rights, Excess
Servicing and Originated Mortgage Servicing Rights and
impairments thereto) and amortization of intangibles and
goodwill (to the extent deducted in determining such
Consolidated Net Income),
(ii) depreciation for such period,
(iii) any provision for income taxes or any
refunds during such period,
(iv) non-cash expense attributable to the
recordation of fees as a result of the application of SFAS No.
91 for such period,
(v) any increase in loan loss reserves,
including reserves for servicing losses on investor-owned
loans, for such period,
(vi) cash proceeds of the sale of mortgage
servicing rights for such period (to the extent not included
in determining such Consolidated Net Income),
(vii) the amount of increase in reserves for
such period in respect of the value of mortgage servicing
rights,
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(viii) the loss recorded for such period in
respect of Hedge Contracts,
(ix) cash realized during such period in
respect of Hedge Contracts (to the extent not included in
determining such Consolidated Net Income),
(x) charges attributable to restructuring and
transaction costs incurred (i) on the BBMC Closing Date and
within six months thereafter as a result of the BBMC
Acquisition and (ii) on the Closing Date and within six months
thereafter as a result of the BMC Acquisition, to the extent
of the amount thereof expensed for such period, and
(xi) non-cash charges attributable to loss on
the sale of Mortgage Loans (including any decrease in Excess
Servicing) for such period,
MINUS (b) the sum of
(i) the amount of Restricted Payments paid
during such period as cash dividends to Holdings to service
interest on the Holdings Notes payable during such period and
applied by Holdings thereto during such period (less the
amount of tax benefit resulting therefrom to the extent
applied to reduce cash taxes payable during such period),
(ii) non-cash revenue recorded in respect of
Originated Mortgage Servicing Rights for such period,
(iii) any taxes actually paid in cash during
such period,
(iv) any decrease in loan loss reserves,
including reserves for servicing losses on investor-owned
loans for such period,
(v) non-cash income attributable to the
recordation of fees as a result of the application of SFAS No.
91 for such period,
(vi) non-cash income attributable to gain on
the sale of Mortgage Loans (including any increase in Excess
Servicing) for such period,
(vii) amortization of negative goodwill for
such period (to the extent added in determining such
Consolidated Net Income),
(viii) the amount of decrease in reserves for
such period in respect of the value of mortgage servicing
rights,
(ix) the gain recorded for such period in
respect of Hedge Contracts and
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(x) cash paid during such period in respect of
Hedge Contracts other than the investment made (i) within one
month after the BBMC Closing Date in Hedge Contracts in
connection with the BBMC Acquisition (to the extent not
deducted in determining such Consolidated Net Income) and (ii)
prior to and within one month after the Closing Date in Hedge
Contracts in connection with the BMC Acquisition (to the
extent not deducted in determining such Consolidated Net
Income),
in each case without duplication and to the extent included in
determining such Consolidated Net Income, and giving effect to the
application of SFAS No. 122.
"CONSOLIDATED INTANGIBLES": at any time, all amounts included
in Consolidated Net Worth of HomeSide at such time which, in accordance
with GAAP, would be classified as intangible assets on a consolidated
balance sheet of HomeSide and its Subsidiaries, including, without
limitation, (a) goodwill (other than negative goodwill), including any
amounts (however designated on the balance sheet) representing the cost
of acquisitions in excess of underlying net tangible assets, and (b)
patents, trademarks, copyrights and other intangibles, but excluding
Purchased Mortgage Servicing Rights, Originated Mortgage Servicing
Rights and Excess Servicing.
"CONSOLIDATED INTEREST AND DIVIDEND EXPENSE": for any period,
the sum of Consolidated Interest Expense for such period plus the
amount of Restricted Payments paid during such period as cash dividends
to Holdings (other than to pay any make- whole or prepayment premium
payable on the Holdings Notes as described in clause (ii) to the
proviso to subsection 8.12 and other than to pay taxes payable by
Holdings as permitted under subsection 8.12) payable during such period
and applied by Holdings in respect of the Holdings Notes during such
period.
"CONSOLIDATED INTEREST EXPENSE": for any period, interest
expense of HomeSide and its Subsidiaries for such period (including,
without limitation, commitment fees payable on the unused portion of
credit facilities and letter of credit fees, but excluding (i) interest
expense attributable to the Tranche A Loans and any other financing of
Mortgage Loan inventory, (ii) interest expense on escrow accounts and
(iii) interest expense in respect of paid-in-full Mortgage Loans), on a
consolidated basis in accordance with GAAP, net of any amount received
by HomeSide from Bank of Boston Corporation or its Affiliates pursuant
to its or their agreement to reimburse certain costs as set forth in
Amendment No. 1 to the BBMC Stock Purchase Agreement.
"CONSOLIDATED LEASE EXPENSE": for any period, the aggregate
rental expenses of HomeSide and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP, payable in respect of such
period under leases (other than Financing Leases).
"CONSOLIDATED NET INCOME": for any period, the consolidated
net income (or deficit) of HomeSide and its Subsidiaries for such
period, determined in accordance with GAAP.
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"CONSOLIDATED NET WORTH": at any time, all amounts which
would, in conformity with GAAP, be included under shareholder's equity
on a consolidated balance sheet of HomeSide and its Subsidiaries as at
such time.
"CONSOLIDATED SERVICING-RELATED DEBT": at any time, the sum of
(i) the aggregate principal amount of the Tranche B Portfolio Loans
outstanding at such time and (ii) the aggregate principal amount
outstanding at such time of any other Indebtedness secured by servicing
rights to the extent permitted under subsections 8.2(j) and 8.3(k) and
the provisions of the Security Agreements.
"CONSOLIDATED TANGIBLE NET WORTH": at any date, the amount
(which may be a negative number) equal to (a) Consolidated Net Worth at
such date LESS (b) the sum of (i) Consolidated Intangibles at such
date, (ii) Purchased Mortgage Servicing Rights at such date, (iii)
Originated Mortgage Servicing Rights at such date and (iv) Excess
Servicing at such date.
"CONSOLIDATED TOTAL LIABILITIES": all liabilities of HomeSide
and its Subsidiaries on a consolidated basis, determined in accordance
with GAAP.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its property is bound.
"CONTINUING DIRECTORS": as defined in Section 9(k).
"DAILY FEDERAL FUNDS RATE": for any day, a fluctuating
interest rate per annum (rounded upward to the nearest 0.01%)
determined (which determination shall be conclusive and binding, absent
manifest error) by the Administrative Agent to be equal to the
overnight federal funds rate (based on the offered side of the market)
as reported on Telerate page 5 (funds source Xxxxxx Xxx Xxxxxx) at
10:00 a.m. (New York City time) on such date (or, if such date is not a
Business Day, on the preceding Business Day), or, if such rates are not
reported for any day, the average of the quotations at approximately
10:00 a.m. (New York City time) received by the Administrative Agent
from three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"DEFAULT": any of the events specified in Section 9, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"DOLLARS" and "$": dollars in lawful currency of the United
States of America.
"ENVIRONMENTAL LAWS": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority
or other Requirements of Law (including common law)
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regulating, relating to or imposing liability or standards of conduct
concerning protection of human health or the environment, as are now or
may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Board) maintained by a member bank of the Federal Reserve System.
"EURODOLLAR BASE RATE": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the average (rounded
to the nearest whole multiple of 1/16 of 1%) of the respective rates
notified to the Administrative Agent by each of the Reference Lenders
as the rate at which such Reference Lender is offered Dollar deposits
at or about 10:00 A.M., New York City time, two Business Days prior to
the beginning of such Interest Period in the interbank eurodollar
market where the eurodollar and foreign currency and exchange
operations in respect of its Eurodollar Loans are then being conducted
for delivery on the first day of such Interest Period for the number of
days comprised therein.
"EURODOLLAR LOANS": Rate-Based Loans bearing interest based
upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan (other than any
Eurodollar Loan made while a Substitute Basis Notice is outstanding), a
rate per annum determined for such day in accordance with the following
formula (rounded upward to the nearest 1/100th of 1%):
EURODOLLAR BASE RATE
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EURODOLLAR TRANCHE": the collective reference to Eurodollar
Loans and Balance-Based Loans as to which all of the then current
Interest Periods begin on the same date and end on the same later date
(whether or not such Loans shall originally have been made on the same
day).
"EVENT OF DEFAULT": any of the events specified in Section 9,
PROVIDED that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
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"EXCESS SERVICING": at any date, the amount that would, in
conformity with GAAP, be classified as deferred excess servicing rights
on a consolidated balance sheet of HomeSide and its Subsidiaries at
such date.
"EXISTING CREDIT AGREEMENT": as defined in the Preamble to
this Agreement.
"FEDERAL FUNDS EFFECTIVE RATE": for any day, the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from
three federal funds brokers of recognized standing selected by it.
"FHLMC": the Federal Home Loan Mortgage Corporation and any
successor thereto.
"FINANCING LEASE": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of such
lessee.
"FIXED RATE CAF ADVANCE": any CAF Advance made pursuant to a
Fixed Rate CAF Advance Request.
"FIXED RATE CAF ADVANCE REQUEST": any CAF Advance Request
requesting the Lenders to offer to make CAF Advances at a fixed rate
(as opposed to a rate composed of the LIBO Rate plus (or minus) a
margin).
"FNMA": the Federal National Mortgage Association and any
successor thereto.
"FUNDING ACCOUNT": (i) with respect to HomeSide, the account
of HomeSide described in Section 6 of the HomeSide Security Agreement,
which will be maintained at the Payment Office as "Warehouse Funding
Account" - Account No. 230-204910, and into which all proceeds of Loans
to HomeSide will be deposited, all amounts made available to HomeSide
from the Settlement Accounts (as defined in the HomeSide Security
Agreement) will be deposited, and from which all Mortgage Loans
purchased or originated by HomeSide will be funded, and (ii) with
respect to HonoMo, either of the accounts of HonoMo described in
Section 6 of the HonoMo Security Agreement, which will be maintained
either (x) at the Payment Office as "Warehouse Funding Account" -
Account No. 304-207306 or (y) at the office of First Hawaiian National
Bank as "Warehouse Funding Account" - Account No. 00- 000-000, and into
which all proceeds of Loans to HonoMo will be deposited, all amounts
made available to HonoMo from the Settlement Accounts (as defined in
the HonoMo Security Agreement) will be deposited, and from which all
Mortgage Loans purchased or originated by HonoMo will be funded.
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"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time (subject to the
provisions of subsection 1.2(b)).
"GNMA": the Government National Mortgage Association and any
successor thereto.
"GOVERNMENTAL AUTHORITY": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING
PERSON"), without duplication, any obligation of (a) the guaranteeing
person or (b) another Person (including, without limitation, any bank
under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations
(the "PRIMARY OBLIGATIONS") of any other third Person (the "PRIMARY
OBLIGOR") in any manner, whether directly or indirectly, including,
without limitation, any obligation of the guaranteeing person, whether
or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities
or services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in
respect thereof; PROVIDED, HOWEVER, that the term Guarantee Obligation
shall not include endorsements of instruments for deposit or collection
in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is
made and (b) the maximum amount for which such guaranteeing person may
be liable pursuant to the terms of the instrument embodying such
Guarantee Obligation, unless such primary obligation and the maximum
amount for which such guaranteeing person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by HomeSide in good faith.
"GUARANTEES": the collective reference to the Subsidiaries
Guarantee, the BMC Guarantee, the Holdings Guarantee and the HomeSide
Guarantee.
"GUARANTOR": each of Holdings, BMC, HomeSide and the
Subsidiary Guarantors.
"HEDGE TERMINATION OBLIGATION": any termination amount or
other amount payable by HomeSide or any of its Subsidiaries upon the
early termination, by reason of
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the occurrence of a default or other termination event thereunder, of
any interest rate protection agreement, interest rate option, interest
rate cap or other interest rate hedge arrangement providing to HomeSide
or any of its Subsidiaries protection against changes in interest
rates.
"HEDGING AGREEMENT": any interest rate protection agreement,
interest rate option, interest rate cap or other interest rate hedge
arrangement entered into with a Lender by HomeSide or any of its
Subsidiaries providing to HomeSide or any of its Subsidiaries
protection against changes in interest rates.
"Holdings": as defined in the Preamble to this Agreement.
--------
"HOLDINGS GUARANTEE": the Amended and Restated Holdings
Guarantee to be executed and delivered by Holdings, substantially in
the form of Exhibit C-1, as the same may be amended, supplemented or
otherwise modified from time to time.
"HOLDINGS NOTES": the Senior Secured Second Priority Notes Due
2003 issued by Holdings under the Indenture in the aggregate principal
amount of $200,000,000.
"HOLDINGS PLEDGE AGREEMENT": the Amended and Restated Holdings
Pledge Agreement to be executed and delivered by Holdings,
substantially in the form of Exhibit E-1, as the same may be amended,
supplemented or otherwise modified from time to time.
"HOMESIDE GUARANTEE": the Amended and Restated HomeSide
Guarantee to be executed and delivered by HomeSide, substantially in
the form of Exhibit C-4, as the same may be amended, supplemented or
otherwise modified from time to time.
"HOMESIDE PLEDGE AGREEMENT": the Amended and Restated HomeSide
Pledge Agreement to be executed and delivered by HomeSide,
substantially in the form of Exhibit E-2, as the same may be amended,
supplemented or otherwise modified from time to time.
"HOMESIDE SECURITY AGREEMENT": the Amended and Restated
Security and Collateral Agency Agreement to be executed and delivered
by HomeSide, substantially in the form of Exhibit D-1, as the same may
be amended, supplemented or otherwise modified from time to time.
"HOMESIDE TRANCHE A BORROWING BASE": as defined in subsection
4.1.
"HOMESIDE TRANCHE B BORROWING BASE": as defined in subsection
4.2.
"HONOMO SECURITY AGREEMENT": the Amended and Restated Security
and Collateral Agency Agreement to be executed and delivered by HonoMo,
substantially in
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the form of Exhibit D-3, as the same may be amended, supplemented or
otherwise modified from time to time.
"HONOMO TRANCHE A BORROWING BASE": as defined in subsection
4.1.
"HONOMO TRANCHE B BORROWING BASE": as defined in subsection
4.2.
"HONOMO TRANCHE A SUBLIMIT": an amount equal to $100,000,000;
PROVIDED that, subject to compliance with the other provisions of this
Agreement, HomeSide may, by notice to the Administrative Agent, reduce
the amount of the HonoMo Tranche A Sublimit from time to time and, if
so reduced, increase such amount from time to time, so long as such
amount does not at any time exceed $100,000,000.
"HONOMO TRANCHE B SUBLIMIT": an amount equal to $25,000,000;
PROVIDED that, subject to compliance with the other provisions of this
Agreement, HomeSide may, by notice to the Administrative Agent, reduce
the amount of the HonoMo Tranche B Sublimit from time to time and, if
so reduced, increase such amount from time to time, so long as such
amount does not at any time exceed $25,000,000.
"INDENTURE": the Indenture, dated as of May 14, 1996, among
Holdings and The Bank of New York, as Trustee thereunder, pursuant to
which the Holdings Notes are issued.
"INDEBTEDNESS": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness of
such Person which is evidenced by a note, bond, debenture or similar
instrument, (c) all obligations of such Person under Financing Leases,
(d) all obligations of such Person in respect of acceptances issued or
created for the account of such Person, (e) all liabilities secured by
any Lien on any property owned by such Person even though such Person
has not assumed or otherwise become liable for the payment thereof and
(f) without duplication, all Guarantee Obligations; PROVIDED that
obligations under Hedge Contracts shall be excluded from this
definition of Indebtedness to the extent that they would otherwise be
included.
"INSOLVENCY": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
---------
"INTERCREDITOR AGREEMENT": the Intercreditor Agreement
executed and delivered by Holdings, BMC, the Administrative Agent and
The Bank of New York, as trustee under the Indenture, substantially in
the form of Exhibit J, as the same may be amended, supplemented or
otherwise modified from time to time.
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"INTEREST PAYMENT DATE": with respect to (a) any Eurodollar
Loan having an Interest Period of one, two or three months' duration,
the last day of such Interest Period, (b) any Eurodollar Loan having an
Interest Period of six months' duration, the first Business Day to
occur at least three months after the first day of such Interest Period
and the last day of such Interest Period, (c) any ABR Loan, the tenth
day following the last day of each calendar month (or, if such tenth
day is not a Business Day, the Business Day first preceding such tenth
day) while such ABR Loan is outstanding and the date of payment in full
of such ABR Loan, (d) any Swing Line Loan, the tenth day following the
last day of each calendar month (or, if such tenth day is not a
Business Day, the Business Day first preceding such tenth day) while
such Swing Line Loan is outstanding and the date of payment in full of
such Swing Line Loan and (e) any CAF Advance, each interest payment
date specified by HomeSide for such CAF Advance in the related CAF
Advance Request.
"INTEREST PERIOD": (a) with respect to each Balance-Based
Loan, the period commencing on the Borrowing Date with respect to such
Balance-Based Loan and ending one month thereafter; PROVIDED, that the
foregoing provisions of this paragraph (a) are subject to the
following:
(i) if any Interest Period would otherwise end
on a day that is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest
Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding
Business Day; and
(ii) any Interest Period that would otherwise
extend beyond the Termination Date shall end on the
Termination Date; and
(b) with respect to any Eurodollar Loan:
(i) initially, the period commencing on the
borrowing or conversion date, as the case may be, with respect
to such Loan and ending one, two, three or six months
thereafter, as selected by the applicable Borrower in its
notice of borrowing or notice of conversion, as the case may
be, given with respect thereto; and
(ii) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to
such Loan and ending one, two, three or six months thereafter,
as selected by the applicable Borrower by irrevocable notice
to the Administrative Agent not less than three Business Days
prior to the last day of the then current Interest Period with
respect thereto;
PROVIDED, that the foregoing provisions of this paragraph (b) are
subject to the following:
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(A) if any Interest Period would otherwise end on a
day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day;
(B) any Interest Period in respect of any such Loans
that would otherwise extend beyond the Termination Date shall
end on the Termination Date; and
(C) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month.
"IPO": the initial public offering of common stock of
Holdings.
"Lender": as defined in the Preamble to this Agreement.
------
"LETTER AGREEMENT": the Fee Letter, dated January 7, 1997,
among HomeSide, Chase and Chase Securities Inc. relating to the credit
facility made available pursuant to this Agreement.
"LIBO RATE": in respect of any LIBO Rate CAF Advance, the
London interbank offered rate for deposits in Dollars for the period
commencing on the date of such CAF Advance and ending on the CAF
Advance Maturity Date with respect thereto which appears on Telerate
Page 3750 as of 11:00 A.M., London time, two Business Days prior to the
beginning of such period.
"LIBO RATE CAF ADVANCE": any CAF Advance made pursuant to a
LIBO Rate CAF Advance Request.
"LIBO RATE CAF ADVANCE REQUEST": any CAF Advance Request
requesting the Lenders to offer to make CAF Advances at an interest
rate equal to the LIBO Rate plus (or minus) a margin.
"LIEN": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and
any Financing Lease having substantially the same economic effect as
any of the foregoing).
"LOAN": any loan (including any CAF Advance) made by any
Lender pursuant to this Agreement.
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"LOAN DOCUMENTS": this Agreement, any Notes, the Guarantees,
the Security Documents and the Intercreditor Agreement.
"LOAN PARTIES": HomeSide, HonoMo, BMC, Holdings and each
Subsidiary of HomeSide which is a party to a Loan Document.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a)
the business, operations, property or condition (financial or
otherwise) of Holdings, BMC, HomeSide and its Subsidiaries taken as a
whole or (b) the validity or enforceability of this Agreement or any of
the other Loan Documents or the rights or remedies of the
Administrative Agent, the Collateral Agent or the Lenders hereunder or
thereunder.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"MATURITY DATE": (a) with respect to each Balance-Based Loan,
the last day of the Interest Period applicable thereto, (b) with
respect to each Rate-Based Loan and Swing Line Loan, the Termination
Date and (c) with respect to each CAF Advance, the CAF Advance Maturity
Date with respect thereto.
"Moody's": Xxxxx'x Investors Service, Inc.
-------
"MTN DEDUCTION AMOUNT": at any time, the amount by which (a)
the aggregate principal amount of Permitted Medium Term Debt
outstanding at such time exceeds (b) the lesser of (i) 70% of the
Appraised Value of Ineligible Servicing (as defined below) at such time
(determined, for the purposes of this definition only, as if the
Ineligible Servicing constituted the Eligible Servicing Portfolio as
used in the definition of Appraised Value) and (ii) the 1.35% of the
aggregate unpaid principal balance of the underlying Mortgage Loans in
respect of the Ineligible Servicing at such time. For the purposes of
this definition only, "Ineligible Servicing" shall mean, at any time,
Non-Recourse Servicing Rights that would constitute Eligible Servicing
Portfolio but for failing to satisfy clause (b) of the definition
thereof.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NEGATIVE SECURITY EVENT": the occurrence of any of the
following events during a Positive Security Period, and the giving of
notice to HomeSide by the Administrative Agent that such event has
occurred and, in the case of clause (c), has been determined by the
Required Banks to constitute a Negative Security Event: (a) HomeSide's
unsecured long-term senior non credit-enhanced debt or, if HomeSide
does not have such debt to be rated, its public "counterparty rating"
issued for its unsecured senior obligations under
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financial contracts, is rated below BBB by S&P or below Baa2 by
Moody's, (b) HomeSide's long-term senior unsecured non-credit- enhanced
debt shall be unrated by both S&P and Moody's or (c) an Event of
Default shall occur and be continuing; for purposes of this Agreement,
(i) the effectiveness of a Negative Security Event shall continue from
the occurrence thereof pursuant to this definition until the occurrence
thereafter of a Positive Security Event.
"NEGATIVE SECURITY PERIOD": shall mean (i) each period
commencing upon the occurrence of a Negative Security Event and ending
upon the occurrence of a Positive Security Event and (ii) if an event
specified in either clause (a) or (b) of the definition of Negative
Security Event shall have occurred and is in effect on the Closing
Date, from the Closing Date until the first occurrence of a Positive
Security Event thereafter.
"NET CASH PROCEEDS": (a) in connection with any sale or
disposition, the cash proceeds (including any payments received by way
of deferred payment of principal pursuant to a note or installment
receivable or purchase price adjustment receivable or otherwise) of
such sale or disposition net of all reasonable legal fees, accountants'
fees, investment banking fees, brokerage commissions, survey costs,
title insurance premiums, required debt payments (other than pursuant
hereto), amounts required to be paid to any Person (other than either
Borrower) owning a legal or beneficial interest in the assets subject
to such sale or disposition, reasonable amounts to be provided by
HomeSide as a reserve, in accordance with GAAP, against any liabilities
associated with such sale or disposition and retained by HomeSide
(provided, that, if any amount of such reserve shall be released or
reversed, the amount of such release or reversal shall be "Net Cash
Proceeds"), and other customary fees and expenses in connection
therewith and net of taxes paid or payable as a result thereof and net
of purchase price adjustments which are in amounts ascertainable on the
date of such sale or disposition and which are reasonably expected to
be payable in connection therewith within 6 months of such date and (b)
in connection with any issuance of any equity or debt securities or
instruments or the incurrence of loans, the cash proceeds (including
any cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise) received from such issuance or
incurrence, net of all reasonable investment banking fees, legal fees,
accountants fees, underwriting discounts and commissions and other
customary fees and expenses in connection therewith, PROVIDED that
notwithstanding the foregoing, fees described in clauses (a) or (b)
above and payable to an Affiliate of HomeSide shall be deducted in
determining such Net Cash Proceeds only to the extent such fees satisfy
the provisions of subsection 8.13.
"Non-Excluded Taxes": as defined in subsection 3.10.
------------------
"Note": as defined in subsection 3.1(e).
----
"ORIGINATED MORTGAGE SERVICING RIGHTS": at any date, all
amounts which would, in conformity with GAAP, be capitalized as the
cost of acquiring mortgage servicing
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rights via loan origination activities on a consolidated balance sheet
of HomeSide and its Subsidiaries at such date.
"Participant": as defined in subsection 11.6(b).
-----------
"PAYMENT OFFICE": the office of the Administrative Agent, c/o
Chase Loan and Agency Services Group, located at Xxx Xxxxx Xxxxxxxxx
Xxxxx, Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA, or any successor thereto.
"PERMITTED COMMERCIAL PAPER": unsecured short-term commercial
paper issued by HomeSide with an original tenor of not greater than 360
days.
"PERMITTED MEDIUM TERM DEBT": unsecured medium-term notes
issued by HomeSide (i) having material covenants and events of default
that are no more restrictive than the corresponding terms of this
Agreement, taking into account customary differences in the nature of
certain covenants, it being agreed that such provisions no more
restrictive than the corresponding provisions of the Holdings Notes
will satisfy such requirement set forth above in this definition (as
certified by HomeSide in a certificate of a Responsible Officer thereof
and delivered to the Administrative Agent and the Lenders prior to the
issuance thereof), and (ii) otherwise complying with all applicable
provisions of this Agreement (including, without limitation, subsection
8.14).
"PERSON": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, limited liability company, Governmental Authority or other
entity of whatever nature.
"PLAN": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which HomeSide or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"PLEDGE AGREEMENTS": the collective reference to the Holdings
Pledge Agreement, the BMC Pledge Agreement and the HomeSide Pledge
Agreement.
"POSITIVE SECURITY EVENT": the occurrence of either of the
following events during a Negative Security Period, and the giving of
notice to HomeSide by the Administrative Agent that such event has
occurred and, in the case of clause (b), has been determined by the
Required Banks to constitute a Positive Security Event: (a) if such
Negative Security Period occurred as a result of an event described in
clause (a) or (b) of the definition of Negative Security Event,
HomeSide's unsecured long-term senior non credit-enhanced debt or, if
HomeSide does not have such debt to be rated, its public "counterparty
rating" issued for its unsecured senior obligations under financial
contracts,
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is rated at least BBB by S&P and at least Baa2 by Moody's or (b) if an
Event of Default gave rise to such Negative Security Event (and the
conditions in clause (a) are also satisfied), such Event of Default
shall no longer be continuing.
"POSITIVE SECURITY PERIOD": shall mean (i) each period
commencing upon the occurrence of a Positive Security Event and ending
upon the occurrence of a Negative Security Event and (ii) if the events
specified in clause (a) of the definition of Positive Security Event
shall have occurred and are in effect on the Closing Date, from the
Closing Date until the first occurrence of a Negative Security Event
thereafter.
"POST-DEFAULT RATE": (a) with respect to any Committed Loan, a
rate per annum equal to 2% above the rate otherwise applicable thereto
(which, in the case of a Balance-Based Loan, shall be the rate with
respect thereto set forth in clause (a) or (b), as applicable, of the
definition of "Committed Lender Discount"), and with respect to any
other amount payable hereunder, a rate per annum equal to 2% above the
ABR (plus the Applicable Margin for ABR Loans, if any, then in effect)
and (b) with respect to any CAF Advance, (i) from the date on which the
Post-Default Rate becomes applicable until the stated CAF Advance
Maturity Date of such CAF Advance, a rate per annum which is 2% above
the rate which would otherwise be applicable to such CAF Advance, and
(ii) for each day thereafter, a rate per annum which is 2% above the
ABR (plus the Applicable Margin for ABR Loans, if any, then in effect).
"Premises": as defined in subsection 5.16.
--------
"PRIME RATE": the rate of interest per annum publicly
announced from time to time by Chase as its prime rate in effect at its
principal office in New York City (the Prime Rate not being intended to
be the lowest rate of interest charged by Chase in connection with
extensions of credit to debtors).
"PRINCIPAL AMOUNT": (a) with respect to each Balance-Based
Loan, the principal amount thereof required to be repaid on the last
day of the Interest Period applicable thereto to the Lenders holding
such Balance-Based Loan, such principal amount being composed of the
actual amount of such Balance-Based Loan funded (or deemed funded
pursuant to subsection 3.4(f)) to the Borrowers on the Borrowing Date
with respect thereto, plus the Balance Lender Discount applicable
thereto, and (b) with respect to each Loan other than a Balance-Based
Loan, the actual amount of such Loan funded to the Borrowers on the
Borrowing Date with respect thereto. References herein to the
"principal amount" of any Loan shall refer to such Principal Amount in
respect thereof.
"PURCHASE COMMITMENT": (a) a mandatory delivery commitment
which obligates a Borrower to deliver a mortgage loan or a pool of
mortgage loans to a purchaser thereof for the amount and yield
specified therein, (b) an optional delivery commitment which grants a
Borrower an option to deliver a mortgage loan or a pool of mortgage
loans to a purchaser thereof, but upon delivery thereof by the
applicable Borrower to such purchaser, such purchaser is obligated to
acquire the delivered mortgage loans for the
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amount and yield specified therein or (c) to the extent not included in
the foregoing, any commitment pursuant to which a Borrower may deliver
mortgage-backed securities for sale.
"PURCHASED MORTGAGE SERVICING RIGHTS": at any date, all
amounts which would, in conformity with GAAP, be capitalized as the
cost of acquiring mortgage servicing rights via purchase transactions
on a consolidated balance sheet of HomeSide and its Subsidiaries at
such date.
"RATE-BASED LOANS": the collective reference to Rate-Based
Tranche A Loans and Rate-Based Tranche B Loans.
"Rate-Based Tranche A Loans": as defined in subsection 2.1(b).
--------------------------
"Rate-Based Tranche B Loans": as defined in subsection 2.2(b).
--------------------------
"Rating Agencies": collectively, S&P and Moody's.
---------------
"RATINGS": the rating in effect for HomeSide's long-term
senior unsecured, non credit-enhanced debt as announced by the
applicable Rating Agency, or, if HomeSide does not have such debt to be
rated, its public "counterparty rating" issued for its unsecured senior
obligations under financial contracts and then in effect. Ratings of
the Rating Agencies are sometimes referred to herein as the "S&P
Rating" and the "Xxxxx'x Rating", respectively.
"RATING LEVEL": the respective Ratings set forth below
opposite each of "Rating I", "Rating II", "Rating III", "Rating IV" and
"Rating V" below:
Rating I greater than or equal to A- by S&P AND A3 by
Xxxxx'x
Rating II equal to BBB+ by S&P and Baal by Xxxxx'x
---
Rating III equal to BBB by S&P and Baa2 by Xxxxx'x
---
Rating IV equal to BBB- by S&P and Baa3 by Xxxxx'x
---
Rating V equal to or less than BB+, or unrated, by S&P or
Ba1, or unrated, by Moody's
PROVIDED that in the event that at any time the Rating of one Rating
Agency differs from the Rating of the other Rating Agency then in
effect (i) by two increments or more, the applicable Rating Level shall
be that which would apply to a Rating one increment lower than the
higher of the Xxxxx'x Rating and the S&P Rating or (ii) by one
increment, the
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applicable Rating Level shall be that which would apply to the higher
of the Xxxxx'x Rating and the S&P Rating.
"REFERENCE LENDERS": Chase, NationsBank of Texas, N.A., and
Bankers Trust Company.
"REFUNDING BORROWING": a borrowing of Committed Loans which,
after application of the proceeds thereof and, with respect to
Balance-Based Loans, the assignment transactions contemplated by
subsection 2.3, results in no net increase in the Principal Amount of
Committed Loans owing to any Lender.
"register": as defined in subsection 11.6(d).
--------
"REGULATION U": Regulation U of the Board as in effect from
time to time.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .13, .14, .16, .18, .19 or
.20 of PBGC Reg. [section]2615.
"REQUIRED LENDERS": at any time, Lenders the Commitment
Percentages of which aggregate at least 51%.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or 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.
"RESPONSIBLE OFFICER": the chief executive officer or the
president of the applicable Borrower or, with respect to financial
matters, the chief financial officer of the applicable Borrower.
"restricted payments": as defined in subsection 8.9.
-------------------
"S&P": Standard & Poor's Ratings Services.
---
"SECOND LIEN PLEDGE AGREEMENTS": the collective reference to
(i) the Pledge Agreement, dated as of May 14, 1996, made by Holdings in
favor of The Bank of New York, as trustee under the Indenture, a copy
of which is attached hereto as Exhibit K-1, and (ii) the Pledge
Agreement, dated as of May 31, 1996, made by BMC in favor of The Bank
of New York, as trustee under the Indenture, a copy of which is
attached hereto as Exhibit K-2.
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"SECURITY AGREEMENTS": the collective reference to the
HomeSide Security Agreement, the HonoMo Security Agreement and the BMC
Security Agreement.
"SECURITY DOCUMENTS": the collective reference to the Security
Agreements, the Pledge Agreements and all other security documents
hereafter delivered to the Administrative Agent or the Collateral Agent
granting a Lien on any asset or assets of any Person to secure the
obligations and liabilities of the Borrowers hereunder and under any of
the other Loan Documents or to secure any Guarantee.
"SECURITY PERFECTION DATE": the date that the Administrative
Agent gives notice of the occurrence of a Negative Security Event or,
if HomeSide shall wish to cause the Security Perfection Date to occur
earlier, such earlier date.
"servicing advance portion": as defined in subsection 4.3.
-------------------------
"servicing portfolio portion": as defined in subsection 4.3.
---------------------------
"SFAS": Statements of Financial Accounting Standards as
adopted by the Financial Accounting Standards Board.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"sponsor": as defined in Section 9(k).
-------
"STOCKHOLDER AGREEMENT": the Amended and Restated Stockholder
Agreement, dated as of May 31, 1996, among the principal stockholders
of Holdings and entered into pursuant to the BMC Stock Purchase
Agreement.
"SUBSIDIARY": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of HomeSide.
"SUBSIDIARIES GUARANTEE": the Amended and Restated
Subsidiaries Guarantee to be executed and delivered by the Subsidiary
Guarantors, substantially in the form of Exhibit C-2, as the same may
be amended, supplemented or otherwise modified from time to time.
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27
"SUBSIDIARY GUARANTORS": the Subsidiaries listed on Schedule
5.14 and all Subsidiaries that are required to become parties to the
Subsidiaries Guarantee from time to time pursuant to subsection
7.11(b).
"SUBSTITUTE BASIS": an alternative basis for determining the
Eurodollar Rate because of the circumstances referred to in subsection
3.7, as determined as provided in subsection 3.7.
"Substitute Basis Notice": as defined in subsection 3.7.
-----------------------
"SWING LINE COMMITMENT": initially, the amount set forth on
Schedule I opposite each initial Swing Line Lender's name, and, in the
event that any additional Swing Line Lender is designated as described
in the definition of "Swing Line Lenders", the amount agreed upon by
HomeSide, the Administrative Agent and such Swing Line Lender.
"SWING LINE LENDERS": initially, Chase, and any other Lender
that the Administrative Agent, HomeSide and such Lender may from time
to time agree to designate as a Swing Line Lender.
"SWING LINE LOANS": the collective reference to the Tranche A
Swing Line Loans and the Tranche B Swing Line Loans.
"Termination Date": February 14, 2000.
----------------
"TRANCHE A BORROWING BASE": either or both of the HomeSide
Tranche A Borrowing Base and the HonoMo Tranche A Borrowing Base, as
the context may require.
"TRANCHE A BORROWING BASE CERTIFICATE": a certificate,
substantially in the form of Attachment 4-A to the Borrower Security
Agreements, duly executed by the Collateral Agent and delivered to the
Administrative Agent pursuant to this Agreement.
"TRANCHE A CAF ADVANCE": each CAF Advance made pursuant to
subsection 2.1(c).
"TRANCHE A COMMITMENT": as to any Lender, the amount set forth
opposite such Lender's name on Schedule I under the heading "Tranche A
Commitments", as such amount may be reduced from time to time in
accordance with the provisions of this Agreement.
"TRANCHE A COMMITMENT AMOUNT": at any time, the sum of the
aggregate Tranche A Commitments in effect at such time.
"TRANCHE A COMMITMENT PERCENTAGE": as to any Lender at any
time, the percentage which such Lender's Tranche A Commitment then
constitutes of the aggregate
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Tranche A Commitments (or, at any time after the Tranche A Commitments
shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Tranche A Loans and Tranche A CAF
Advances then outstanding constitutes of the aggregate principal amount
of the Tranche A Loans and Tranche A CAF Advances then outstanding).
"TRANCHE A LOANS": the collective reference to the Rate-Based
Tranche A Loans and Balance-Based Tranche A Loans.
"Tranche A Swing Line Loans": as defined in subsection 2.9(a).
--------------------------
"TRANCHE A SWING LINE RATE": for any day, a per annum rate
equal to the Daily Federal Funds Rate for such day, PLUS a margin of
.60%.
"Tranche B Advance Loans": as defined in subsection 2.2(c).
-----------------------
"TRANCHE B BORROWING BASE": either or both of the HomeSide
Tranche B Borrowing Base and the HonoMo Tranche B Borrowing Base, as
the context may require.
"TRANCHE B BORROWING BASE CERTIFICATE": a certificate,
substantially in the form of Attachment 4-B to the Borrower Security
Agreements, duly executed by the Collateral Agent and delivered to the
Administrative Agent pursuant to this Agreement.
"TRANCHE B CAF ADVANCE": each CAF Advance made pursuant to
subsection 2.2(d).
"TRANCHE B COMMITMENT": as to any Lender, the obligation of
such Lender to make Tranche B Loans to the Borrowers hereunder in an
aggregate principal amount at any one time outstanding not to exceed
the amount set forth opposite such Lender's name on Schedule I under
the heading "Tranche B Commitments", as such amount may be reduced from
time to time in accordance with the provisions of this Agreement.
"TRANCHE B COMMITMENT AMOUNT": at any time, the sum of the
aggregate Tranche B Commitments in effect at such time.
"TRANCHE B COMMITMENT PERCENTAGE": as to any Lender at any
time, the percentage which such Lender's Tranche B Commitment then
constitutes of the aggregate Tranche B Commitments (or, at any time
after the Tranche B Commitments shall have expired or terminated, the
percentage which the aggregate principal amount of such Lender's
Tranche B Loans and Tranche B CAF Advances then outstanding constitutes
of the aggregate principal amount of the Tranche B Loans and Tranche B
CAF Advances then outstanding).
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"TRANCHE B LOANS": the collective reference to the Rate-Based
Tranche B Loans and Balance-Based Tranche B Loans.
"Tranche B Portfolio Loans": as defined in subsection 2.2(c).
-------------------------
"TRANCHE B SWING LINE ADVANCE LOANS": as defined in subsection
2.9(a).
"Tranche B Swing Line Loans": as defined in subsection 2.9(a).
--------------------------
"TRANCHE B SWING LINE PORTFOLIO LOANS": as defined in
subsection 2.9(a).
"TRANCHE B SWING LINE RATE": for any day, a per annum rate
equal to (i) in the case of Tranche B Swing Line Advance Loans, a per
annum rate equal to the Daily Federal Funds Rate for such day, PLUS a
margin of .60%, and (ii) in the case of Tranche B Swing Line Portfolio
Loans, a per annum rate equal to the Daily Federal Funds Rate for such
day, PLUS the sum of (A) .60% PLUS (B) the difference between (x) the
Applicable Margin for Tranche A Loans at such time and (y) the
Applicable Margin for Tranche B Portfolio Loans at such time.
"Transferee": as defined in subsection 11.6(f).
----------
"TYPE": as to any Rate-Based Loan, its nature as an ABR Loan
or a Eurodollar Loan.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in any Notes or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in any Notes, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
HomeSide and its Subsidiaries not defined in subsection 1.1 and accounting terms
partly defined in subsection 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP, as defined in subsection 1.1;
PROVIDED, that in the event that there shall occur after the Closing Date any
change in the generally accepted accounting principles in the United States of
America and such change affects the method of calculating any of the factors
that go into any component of the financial covenants set forth in subsection
8.1, GAAP (as in effect prior to such change) shall continue to be used in the
determination thereof (and HomeSide shall prepare and deliver a reconciliation
satisfactory to the Administrative Agent in respect thereof) until the
Administrative Agent, the Required Lenders and HomeSide agree upon adjustments
to such covenants as reasonably required so that they are consistent with such
financial covenants made as of the date hereof, notwithstanding such change, and
the Administrative Agent, the Lenders and HomeSide hereby agree to make
reasonable efforts to reach agreement thereon in such event.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular
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30
provision of this Agreement, and Section, subsection, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) In addition to the terms defined in subsection 1.1, other
terms used herein are defined in Section 4.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND CAF ADVANCE FACILITY
2.1 TRANCHE A LOANS; TRANCHE A CAF ADVANCES. (a) During the
Commitment Period, subject to the terms and conditions hereof, each Balance
Lender severally agrees to make revolving credit loans (the "BALANCE-BASED
TRANCHE A LOANS") to each Borrower in the Principal Amount requested by such
Borrower in accordance with subsection 2.5, PROVIDED, that (i) a Balance Lender
shall not be obligated to make, and shall not make, a Balance-Based Tranche A
Loan to the extent that after giving effect to such Balance-Based Tranche A Loan
and the purchase thereof by the other Balance Lenders and Lenders pursuant to
subsection 2.3, (A) the aggregate outstanding Principal Amount of Tranche A
Loans and Tranche B Loans of any Lender would exceed the aggregate amount of
such Lender's Tranche A Commitment and Tranche B Commitment, (B) the aggregate
outstanding Principal Amount of all Loans would exceed the Tranche A Commitment
Amount plus the Tranche B Commitment Amount, (C) the aggregate outstanding
Principal Amount of all Tranche A Loans, Tranche A CAF Advances and Tranche A
Swing Line Loans made to HomeSide would exceed the HomeSide Tranche A Borrowing
Base, (D) the aggregate outstanding Principal Amount of all Tranche A Loans,
Tranche A CAF Advances and Tranche A Swing Line Loans made to HonoMo would
exceed the HonoMo Tranche A Borrowing Base or (E) the aggregate amount of all
Tranche A Loans, Tranche A CAF Advances and Tranche A Swing Line Loans made to
HonoMo would exceed the HonoMo Tranche A Sublimit, and (ii) a Balance Lender
shall not be obligated to make a Balance- Based Tranche A Loan to the extent of
the amount of the shortfall in funding by any other Lender resulting from such
Lender's failure to comply with its obligation pursuant to subsection 2.3 to
purchase its Tranche A Commitment Percentage of such Balance-Based Tranche A
Loan.
(b) During the Commitment Period, subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit loans
(the "RATE-BASED TRANCHE A LOANS") to each Borrower in the Principal Amount
requested by such Borrower in accordance with subsection 2.7(a); PROVIDED, that
a Lender shall not be obligated to make, and shall not make, a Rate-Based
Tranche A Loan to the extent that after giving effect to such Tranche A Loan,
(i) the aggregate outstanding Principal Amount of Tranche A Loans and Tranche B
Loans of any Lender would exceed the aggregate amount of such Lender's Tranche A
Commitment and Tranche B Commitment, (ii) the aggregate outstanding Principal
Amount of all Loans would exceed the Tranche A Commitment Amount plus the
Tranche B Commitment Amount, (iii) the
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31
aggregate outstanding Principal Amount of all Tranche A Loans, Tranche A CAF
Advances and Tranche A Swing Line Loans made to HomeSide would exceed the
HomeSide Tranche A Borrowing Base, (iv) the aggregate outstanding Principal
Amount of all Tranche A Loans, Tranche A CAF Advances and Tranche A Swing Line
Loans made to HonoMo would exceed the HonoMo Tranche A Borrowing Base or (vi)
the aggregate amount of all Tranche A Loans, Tranche A CAF Advances and Tranche
A Swing Line Loans made to HonoMo would exceed the HonoMo Tranche A Sublimit.
(c) During the CAF Advance Availability Period, subject to the
terms and conditions of this Agreement, each Borrower may borrow Tranche A CAF
Advances; PROVIDED, that no Tranche A CAF Advance shall be made to the extent
that after giving effect to such Tranche A CAF Advance (i) the aggregate
outstanding Principal Amount of all Loans would exceed the Tranche A Commitment
Amount plus the Tranche B Commitment Amount, (ii) the aggregate outstanding
Principal Amount of all Tranche A Loans, Tranche A CAF Advances and Tranche A
Swing Line Loans made to HomeSide would exceed the HomeSide Tranche A Borrowing
Base, (iii) the aggregate outstanding Principal Amount of all Tranche A Loans,
Tranche A CAF Advances and Tranche A Swing Line Loans made to HonoMo would
exceed the HonoMo Tranche A Borrowing Base or (iv) the aggregate amount of all
Tranche A Loans, Tranche A CAF Advances and Tranche A Swing Line Loans made to
HonoMo would exceed the HonoMo Tranche A Sublimit. Within the limits and on the
conditions hereinafter set forth with respect to Tranche A CAF Advances, each
Borrower thereof from time to time may borrow, repay and reborrow Tranche A CAF
Advances.
2.2 TRANCHE B LOANS; TRANCHE B CAF ADVANCES. (a) During the
Commitment Period, subject to the terms and conditions hereof, each Balance
Lender severally agrees to make revolving credit loans (the "BALANCE-BASED
TRANCHE B LOANS") to each Borrower in the Principal Amount requested by such
Borrower in accordance with subsection 2.5, PROVIDED, that (i) a Balance Lender
shall not be obligated to make, and shall not make, a Balance-Based Tranche B
Loan to the extent that after giving effect to such Balance-Based Tranche B Loan
and the purchase thereof by the other Balance Lenders and Lenders pursuant to
subsection 2.3, (A) the aggregate outstanding Principal Amount of Tranche B
Loans of any Lender would exceed such Lender's Tranche B Commitment, (B) the
aggregate outstanding principal amount of all Tranche B Loans, Tranche B CAF
Advances and Tranche B Swing Line Loans would exceed the Tranche B Commitment
Amount, (C) the aggregate outstanding Principal Amount of all Loans would exceed
the Tranche A Commitment Amount plus the Tranche B Commitment Amount, (D) the
aggregate outstanding Principal Amount of all Tranche B Advance Loans, Tranche B
CAF Advances and Tranche B Swing Line Advance Loans made to HomeSide would
exceed the Servicing Advance Portion of the HomeSide Tranche B Borrowing Base,
(E) the aggregate outstanding Principal Amount of all Tranche B Advance Loans,
Tranche B CAF Advances and Tranche B Swing Line Advance Loans made to HonoMo
would exceed the Servicing Advance Portion of the HonoMo Tranche B Borrowing
Base, (F) the aggregate outstanding Principal Amount of all Tranche B Portfolio
Loans and Tranche B Swing Line Portfolio Loans made to HomeSide would exceed the
Servicing Portfolio Portion of the HomeSide Tranche B Borrowing Base, (G) the
aggregate outstanding Principal Amount of all Tranche B Portfolio Loans and
Tranche B Swing Line Portfolio Loans made to HonoMo would exceed the Servicing
Portfolio
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Portion of the HonoMo Tranche B Borrowing Base or (H) the aggregate amount of
all Tranche B Loans, Tranche B CAF Advances and Tranche B Swing Line Loans made
to HonoMo would exceed the HonoMo Tranche B Sublimit, and (ii) a Balance Lender
shall not be obligated to make a Balance-Based Tranche B Loan to the extent of
the amount of the shortfall in funding by any other Lender resulting from such
Lender's failure to comply with its obligation pursuant to subsection 2.3 to
purchase its Tranche B Commitment Percentage of such Balance-Based Tranche B
Loan.
(b) During the Commitment Period, subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit loans
(the "RATE-BASED TRANCHE B LOANS") to each Borrower in the Principal Amount
requested by HomeSide in accordance with subsection 2.7; PROVIDED, that a Lender
shall not be obligated to make, and shall not make, a Rate-Based Tranche B Loan
to the extent that after giving effect to such Rate-Based Tranche B Loan, (i)
the aggregate outstanding Principal Amount of Tranche B Loans of any Lender
would exceed such Lender's Tranche B Commitment, (ii) the aggregate outstanding
principal amount of all Tranche B Loans, Tranche B CAF Advances and Tranche B
Swing Line Loans would exceed the Tranche B Commitment Amount, (iii) the
aggregate outstanding Principal Amount of all Loans would exceed the Tranche A
Commitment Amount plus the Tranche B Commitment Amount, (iv) the aggregate
outstanding Principal Amount of all Tranche B Advance Loans, Tranche B CAF
Advances and Tranche B Swing Line Advance Loans made to HomeSide would exceed
the Servicing Advance Portion of the HomeSide Tranche B Borrowing Base, (v) the
aggregate outstanding Principal Amount of all Tranche B Advance Loans, Tranche B
CAF Advances and Tranche B Swing Line Advance Loans made to HonoMo would exceed
the Servicing Advance Portion of the HonoMo Tranche B Borrowing Base, (vi) the
aggregate outstanding Principal Amount of all Tranche B Portfolio Loans and
Tranche B Swing Line Portfolio Loans made to HomeSide would exceed the Servicing
Portfolio Portion of the HomeSide Tranche B Borrowing Base, (vii) the aggregate
outstanding Principal Amount of all Tranche B Portfolio Loans and Tranche B
Swing Line Portfolio Loans made to HonoMo would exceed the Servicing Portfolio
Portion of the HonoMo Tranche B Borrowing Base, or (viii) the aggregate amount
of all Tranche B Loans, Tranche B CAF Advances and Tranche B Swing Line Loans
made to HonoMo would exceed the HonoMo Tranche B Sublimit.
(c) Tranche B Loans may be made as either (i) Tranche B Loans
based upon the Servicing Advance Portion of the applicable Borrower's Tranche B
Borrowing Base ("TRANCHE B ADVANCE LOANS") or (ii) Tranche B Loans based upon
the Servicing Portfolio Portion of the applicable Borrower's Tranche B Borrowing
Base ("TRANCHE B PORTFOLIO LOANS").
(d) During the CAF Advance Availability Period, subject to the
terms and conditions of this Agreement, each Borrower may borrow Tranche B CAF
Advances; PROVIDED, that no Tranche B CAF Advance shall be made to the extent
that after giving effect to such Tranche B CAF Advance (i) the aggregate
outstanding principal amount of all Tranche B Loans, Tranche B CAF Advances and
Tranche B Swing Line Loans would exceed the Tranche B Commitment Amount, (ii)
the aggregate outstanding Principal Amount of all Loans would exceed the Tranche
A Commitment Amount plus the Tranche B Commitment Amount, (iii) the aggregate
outstanding Principal Amount of all Tranche B Advance Loans, Tranche B CAF
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Advances and Tranche B Swing Line Advance Loans made to HomeSide would exceed
the Servicing Advance Portion of the HomeSide Tranche B Borrowing Base, (iv) the
aggregate outstanding Principal Amount of all Tranche B Advance Loans, Tranche B
CAF Advances and Tranche B Swing Line Advance Loans made to HonoMo would exceed
the Servicing Advance Portion of the HonoMo Tranche B Borrowing Base, (v) the
aggregate outstanding Principal Amount of all Tranche B Portfolio Loans and
Tranche B Swing Line Portfolio Loans made to HomeSide would exceed the Servicing
Portfolio Portion of the HomeSide Tranche B Borrowing Base, (vi) the aggregate
outstanding Principal Amount of all Tranche B Portfolio Loans and Tranche B
Swing Line Portfolio Loans made to HonoMo would exceed the Servicing Portfolio
Portion of the HonoMo Tranche B Borrowing Base or (vii) the aggregate amount of
all Tranche B Loans, Tranche B CAF Advances and Tranche B Swing Line Loans made
to HonoMo would exceed the HonoMo Tranche B Sublimit.
2.3 MAKING, ASSIGNMENT AND PURCHASE OF BALANCE-BASED LOANS.
(a) Simultaneously with the making of a Balance-Based Loan by a Balance Lender
on a Borrowing Date, such Balance Lender agrees to sell and assign, and does
hereby sell and assign, without recourse, to each other Lender (including each
other Balance Lender, if any, that is a Lender having a Tranche A Commitment, in
the case of Balance-Based Tranche A Loans, or a Tranche B Commitment, in the
case of Balance-Based Tranche B Loans ), and each such other Lender hereby
irrevocably agrees that it will purchase and acquire, such Lender's Tranche A
Commitment Percentage, in the case of Balance-Based Tranche A Loans, or Tranche
B Commitment Percentage, in the case of Balance-Based Tranche B Loans, of such
Balance-Based Loan, whereupon such amount so acquired by such Lender shall
constitute a Balance-Based Tranche A Loan or Balance-Based Tranche B Loan, as
the case may be, owing to such Lender. The purchase price to be paid by each
such Lender for the portion of each Balance-Based Loan assigned to it shall be
such Lender's Tranche A Commitment Percentage, in the case of Balance-Based
Tranche A Loans, or Tranche B Commitment Percentage, in the case of
Balance-Based Tranche B Loans, of the Principal Amount of such Balance-Based
Loan less the Committed Lender Discount applicable thereto.
(b) Each Borrower hereby acknowledges and consents to the
assignment of Balance-Based Loans by each Balance Lender to the other Lenders as
contemplated by this subsection 2.3. Each Borrower and the Administrative Agent
shall deem and treat each Lender as the creditor in respect of the portion of
each Balance-Based Loan assigned to it and as the payee of its Notes, if any, to
the same extent as if such Balance-Based Loan had originally been made by such
Lender directly to such Borrower.
2.4 FUNDING OF BALANCE-BASED LOANS; REPAYMENT. Each
Balance-Based Loan will be funded by the Balance Lenders to the applicable
Borrower net of the applicable Balance Lender Discount; accordingly, each
Balance-Based Loan shall bear no interest prior to the Maturity Date thereof.
Subject to subsection 3.4(f), each Borrower will pay, for the account of the
Lenders, at the Payment Office, the unpaid Principal Amount of each Balance-
Based Loan made to such Borrower on the Maturity Date applicable thereto.
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2.5 PROCEDURE FOR BALANCE-BASED LOAN BORROWINGS. (a) The
Borrowing Date in respect of each Balance-Based Loan shall be (i) with respect
to the initial Balance-Based Loans, the Closing Date (or such Business Day
thereafter as shall be selected by HomeSide and notice of which is received by
the Administrative Agent at least three Business Days prior thereto), and (ii)
thereafter, the last day of the Interest Period with respect to the then
outstanding Balance-Based Tranche A Loans, in the case of Balance-Based Tranche
A Loans, or the then outstanding Balance-Based Tranche B Loans, in the case of
Balance-Based Tranche B Loans. To request that Balance-Based Loans be made on
any Borrowing Date, HomeSide, for itself or on behalf of HonoMo, shall give
irrevocable notice of such borrowing, which notice must be received by the
Administrative Agent prior to 12:00 noon, New York City time, three Business
Days prior to such Borrowing Date. Each such notice of borrowing shall be given
by delivery in writing or by fax of a Borrowing Notice in the form set forth as
Exhibit F-2, including the information to be provided by the Collateral Agent as
set forth therein and including the respective Principal Amounts of
Balance-Based Loans to be made by each of the Balance Lenders on such Borrowing
Date and whether such Balance- Based Loans are requested to be made as Tranche A
Loans, Tranche B Advance Loans, Tranche B Portfolio Loans or a combination
thereof. Upon the receipt of any such Borrowing Notice, the Administrative Agent
shall promptly notify each Lender thereof. Each borrowing of Balance-Based
Tranche A Loans, or, in the event that HomeSide and HonoMo each make a borrowing
of Balance-Based Tranche A Loans on the same date, the combined amount of both
such borrowings, shall be in an amount equal to $25,000,000 or a whole multiple
of $5,000,000 in excess thereof (or if the Aggregate Available Tranche A
Commitments are less than $25,000,000 such lesser amount). Each borrowing of
Balance-Based Tranche B Loans, or, in the event that HomeSide and HonoMo each
make a borrowing of Balance-Based Tranche B Loans on the same date, the combined
amount of both such borrowings, shall be in an amount equal to $25,000,000 or a
whole multiple of $5,000,000 in excess thereof (or if the Aggregate Available
Tranche B Commitments are less than $25,000,000, such lesser amount). Subject to
subsection 3.4(f), and upon, and to the extent of, receipt by each Balance
Lender from the other Lenders of the amount required to be made available by
such Lenders pursuant to subsection 2.3(a), the Balance Lenders will make the
Principal Amount of Balance-Based Loans so made available by such Lenders, less
the Balance Lender Discount applicable thereto, available to the Administrative
Agent, for the account of such Borrower, at the Payment Office at 1:00 p.m., New
York City time, on the Borrowing Date requested by HomeSide in funds immediately
available to the Administrative Agent; and such proceeds will then be made
available to such Borrower by the Administrative Agent at the Payment Office by
crediting the applicable Funding Account, as directed by HomeSide, with the
amount made available to the Administrative Agent by the Balance Lenders in like
funds as received by the Administrative Agent.
(b) Subject to subsection 3.4(f), at or before 1:00 P.M., New
York City time, on each Borrowing Date in respect of Balance-Based Loans, each
Lender will make available to the Administrative Agent, for the respective
accounts of the Balance Lenders, at the Payment Office in immediately available
funds, an amount equal to the Principal Amount of the Balance-Based Loans being
purchased by such Lender from the Balance Lenders on such Borrowing Date, less
the applicable Committed Lender Discount.
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2.6 TYPES OF RATE-BASED LOANS. The Rate-Based Loans may from
time to time be (i) Eurodollar Loans, (ii) ABR Loans or (iii) a combination
thereof, as determined by the applicable Borrower and notified to the
Administrative Agent in accordance with subsections 2.7 and 2.8; PROVIDED, that
no Rate-Based Loan shall be made as a Eurodollar Loan after the day that is one
month prior to the Termination Date.
2.7 PROCEDURE FOR RATE-BASED BORROWINGS; PROCEDURE FOR CAF
ADVANCE BORROWINGS. (a) Each Borrower may borrow Rate-Based Loans during the
Commitment Period on any Business Day, PROVIDED, that HomeSide, for itself or on
behalf of HonoMo, shall give irrevocable notice thereof (which notice must be
received by the Administrative Agent prior to 12:00 noon, New York City time,
(i) three Business Days prior to the requested Borrowing Date, if all or any
part of the requested Rate-Based Loans are to be initially Eurodollar Loans, or
(ii) on the day of such requested Borrowing Date, otherwise). Each such notice
of borrowing shall be given in writing or by fax in the form of the Borrowing
Notice set forth as Exhibit F-1, including the information to be provided by the
Collateral Agent as set forth therein and including the requested Type, amount
and Interest Period, if any, thereof and whether such Rate-Based Loans are
requested to be made as Tranche A Loans, Tranche B Advance Loans, Tranche B
Portfolio Loans or a combination thereof. Each borrowing of Rate-Based Loans
under the Tranche A Commitment, or, in the event that HomeSide and HonoMo each
make a borrowing of Rate-Based Tranche A Loans on the same date with the same
Interest Periods, the combined amount of both such borrowings, shall be in an
amount equal to (A) in the case of ABR Loans, $15,000,000 or a whole multiple of
$5,000,000 in excess thereof (or, if the then undrawn amount of the Tranche A
Commitments is less than $15,000,000, such lesser amount) and (B) in the case of
Eurodollar Loans, $25,000,000 or a whole multiple of $5,000,000 in excess
thereof. Each borrowing of Rate-Based Loans under the Tranche B Commitment, or,
in the event that HomeSide and HonoMo each make a borrowing of Rate-Based
Tranche B Loans on the same date with the same Interest Period, the combined
amount of both such borrowings, shall be in an amount equal to (A) in the case
of ABR Loans, $15,000,000 or a whole multiple of $5,000,000 in excess thereof
(or, if the then undrawn amount of the Tranche B Commitments is less than
$15,000,000, such lesser amount) and (B) in the case of Eurodollar Loans,
$25,000,000 or a whole multiple of $5,000,000 in excess thereof. Upon receipt of
any such notice from HomeSide, the Administrative Agent shall promptly notify
each Lender thereof. Subject to subsection 3.4(f), each Lender will make the
amount of its pro rata share of each such borrowing available to the
Administrative Agent for the account of the applicable Borrower at the Payment
Office prior to 1:00 P.M., New York City time, on the Borrowing Date requested
by HomeSide in funds immediately available to the Administrative Agent, and such
proceeds will then be made available to such Borrower by the Administrative
Agent at the Payment Office by crediting the applicable Funding Account as
directed by HomeSide, with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent.
(b) If HomeSide wishes to request the Lenders to submit bids
to make CAF Advances to HomeSide or HonoMo on any Business Day, it shall deliver
a CAF Advance Request to the Administrative Agent, not later than 12:00 Noon,
New York City time, four Business Days prior to the proposed Borrowing Date (in
the case of a LIBO Rate CAF Advance
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Request), and not later than 10:00 A.M., New York City time, one Business Day
prior to the proposed Borrowing Date (in the case of a Fixed Rate CAF Advance
Request). Each CAF Advance Request in respect of any Borrowing Date may solicit
bids for CAF Advances on such Borrowing Date in an aggregate principal amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof and having
not more than three alternative CAF Advance Maturity Dates. The CAF Advance
Maturity Date for each CAF Advance shall be the date set forth therefor in the
relevant CAF Advance Request, which date shall be (i) not less than 7 days nor
more than 360 days after the Borrowing Date therefor, in the case of a Fixed
Rate CAF Advance, (ii) one, two, three, six or twelve months after the Borrowing
Date therefor, in the case of a LIBO Rate CAF Advance and (iii) not later than
the Termination Date, in the case of any CAF Advance. The Administrative Agent
shall notify each Lender promptly by facsimile transmission of the contents of
each CAF Advance Request received by the Administrative Agent.
(c) In the case of a LIBO Rate CAF Advance Request, upon
receipt of notice from the Administrative Agent of the contents of such CAF
Advance Request, each Lender may elect, in its sole discretion, to offer
irrevocably to make one or more CAF Advances at the applicable LIBO Rate plus
(or minus) a margin determined by such Lender in its sole discretion for each
such CAF Advance. Any such irrevocable offer shall be made by delivering a CAF
Advance Offer to the Administrative Agent, before 10:30 A.M., New York City
time, on the day that is three Business Days before the proposed Borrowing Date,
setting forth:
(i) the maximum amount of Tranche A CAF Advances or
Tranche B CAF Advances, as the case may be, for each CAF Advance
Maturity Date and the aggregate maximum amount of CAF Advances for all
CAF Advance Maturity Dates which such Lender would be willing to make
(which amounts may, subject to subsection 2.1(c) or 2.2(d), as the case
may be, exceed such Lender's Commitment); and
(ii) the margin above or below the applicable LIBO Rate
at which such Lender is willing to make each such CAF Advance.
The Administrative Agent shall advise HomeSide before 11:00 A.M., New York City
time, on the date which is three Business Days before the proposed Borrowing
Date of the contents of each such CAF Advance Offer received by it. If the
Administrative Agent, in its capacity as a Lender, shall elect, in its sole
discretion, to make any such CAF Advance Offer, it shall advise HomeSide of the
contents of its CAF Advance Offer before 10:15 A.M., New York City time, on the
date which is three Business Days before the proposed Borrowing Date.
(d) In the case of a Fixed Rate CAF Advance Request, upon
receipt of notice from the Administrative Agent of the contents of such CAF
Advance Request, each Lender may elect, in its sole discretion, to offer
irrevocably to make one or more CAF Advances at a rate of interest determined by
such Lender in its sole discretion for each such CAF Advance. Any such
irrevocable offer shall be made by delivering a CAF Advance Offer to the
Administrative Agent before 9:30 A.M., New York City time, on the proposed
Borrowing Date, setting forth:
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(i) the maximum amount of Tranche A CAF Advances or
Tranche B CAF Advances, as the case may be, for each CAF Advance
Maturity Date, and the aggregate maximum amount of CAF Advances for all
CAF Advance Maturity Dates, which such Lender would be willing to make
(which amounts may, subject to subsection 2.1(c) or 2.2(d), as the case
may be, exceed such Lender's Commitment); and
(ii) the rate of interest at which such Lender is willing
to make each such CAF Advance.
The Administrative Agent shall advise HomeSide before 10:00 A.M., New York City
time, on the proposed Borrowing Date of the contents of each such CAF Advance
Offer received by it. If the Administrative Agent, in its capacity as a Lender,
shall elect, in its sole discretion, to make any such CAF Advance Offer, it
shall advise HomeSide of the contents of its CAF Advance Offer before 9:15 A.M.
New York City time, on the proposed Borrowing Date.
(e) Before 11:30 A.M., New York City time, three Business Days
before the proposed Borrowing Date (in the case of CAF Advances requested by a
LIBO Rate CAF Advance Request) and before 10:30 A.M., New York City time, on the
proposed Borrowing Date (in the case of CAF Advances requested by a Fixed Rate
CAF Advance Request), HomeSide, in its absolute discretion, shall:
(i) cancel such CAF Advance Request by giving the
Administrative Agent telephone notice to that effect, or
(ii) by giving telephone notice to the Administrative
Agent (immediately confirmed by delivery to the Administrative Agent of
a CAF Advance Confirmation by facsimile transmission) (A) subject to
the provisions of subsection 2.7(f), accept one or more of the CAF
Advance Offers made by any Lender or Lenders pursuant to subsection
2.7(c) or subsection 2.7(d), as the case may be, and (B) reject any
remaining CAF Advance Offers made by Lenders pursuant to subsection
2.7(c) or subsection 2.7(d), as the case may be.
(f) HomeSide's acceptance of CAF Advances in response to any
CAF Advance Offers shall be subject to the following limitations:
(i) the amount of Tranche A CAF Advances or Tranche B
CAF Advances, as the case may be, accepted for each CAF Advance
Maturity Date specified by any Lender in its CAF Advance Offer shall
not exceed the maximum amount of Tranche A CAF Advances or Tranche B
CAF Advances, as the case may be, for such CAF Advance Maturity Date
specified in such CAF Advance Offer;
(ii) the aggregate amount of Tranche A CAF Advances or
Tranche B CAF Advances, as the case may be, accepted for all CAF
Advance Maturity Dates specified by any Lender in its CAF Advance Offer
shall not exceed the aggregate maximum amount
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of Tranche A CAF Advances or Tranche B CAF Advances, as the case may
be, specified in such CAF Advance Offer for all such CAF Advance
Maturity Dates;
(iii) HomeSide may not accept CAF Advance Offers for
Tranche A CAF Advances or Tranche B CAF Advances, as the case may be,
for any CAF Advance Maturity Date in an aggregate principal amount in
excess of the maximum principal amount requested in the related CAF
Advance Request; and
(iv) if HomeSide accepts any of such CAF Advance Offers,
it must accept CAF Advance Offers based solely upon pricing for each
relevant CAF Advance Maturity Date and upon no other criteria
whatsoever, and if two or more Lenders submit CAF Advance Offers for
any CAF Advance Maturity Date at identical pricing and HomeSide accepts
any of such CAF Advance Offers but does not wish to (or, by reason of
the limitations set forth in subsection 2.1(c) or 2.2(d) cannot) borrow
the total amount offered by such Lenders with such identical pricing,
HomeSide shall accept CAF Advance Offers from all of such Lenders in
amounts allocated among them PRO RATA according to the amounts offered
by such Lenders (with appropriate rounding, in the sole discretion of
HomeSide, to assure that each accepted CAF Advance is an integral
multiple of $1,000,000); PROVIDED that if the number of Lenders that
submit CAF Advance Offers for any CAF Advance Maturity Date at
identical pricing is such that, after HomeSide accepts such CAF Advance
Offers PRO RATA in accordance with the foregoing provisions of this
paragraph, the CAF Advance to be made by any such Lender would be less
than $5,000,000 principal amount, the number of such Lenders shall be
reduced by the Administrative Agent by lot until the CAF Advances to be
made by each such remaining Lender would be in a principal amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof.
(g) If HomeSide notifies the Administrative Agent that a CAF
Advance Request is cancelled pursuant to subsection 2.7(e)(i), the
Administrative Agent shall give prompt telephone notice thereof to the Lenders.
(h) If HomeSide accepts pursuant to subsection 2.7(e)(ii) one
or more of the CAF Advance Offers made by any Lender or Lenders, the
Administrative Agent promptly shall notify each Lender which has made such a CAF
Advance Offer of (i) the aggregate amount of such CAF Advances to be made on
such Borrowing Date for each CAF Advance Maturity Date and (ii) the acceptance
or rejection of any CAF Advance Offers to make such CAF Advances made by such
Lender. Before 12:00 Noon, New York City time, on the Borrowing Date specified
in the applicable CAF Advance Request, each Lender whose CAF Advance Offer has
been accepted shall make available to the Administrative Agent at the Payment
Office the amount of CAF Advances to be made by such Lender, in immediately
available funds. The Administrative Agent will make such funds available to
HomeSide as soon as practicable on such date at the Payment Office by crediting
the applicable Funding Account, as directed by HomeSide, with the amount made
available to the Administrative Agent by the Lenders in like funds as received
by the Administrative Agent. As soon as practicable after each Borrowing Date,
the Administrative
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Agent shall notify each Lender of the aggregate amount of CAF Advances advanced
on such Borrowing Date and the respective CAF Advance Maturity Dates thereof.
(i) A CAF Advance Request may request CAF Advance Offers for
CAF Advances to be made on not more than one Borrowing Date and to mature on not
more than three CAF Advance Maturity Dates. No CAF Advance Request may be
submitted earlier than five Business Days after submission of any other CAF
Advance Request.
2.8 CONVERSION AND CONTINUATION OPTIONS FOR RATE-BASED LOANS.
(a) HomeSide may elect from time to time to convert Eurodollar Loans made to it
or to HonoMo to ABR Loans by giving the Administrative Agent at least two
Business Days' prior irrevocable notice of such election, PROVIDED, that any
such conversion may only be made on the last day of an Interest Period with
respect to the Eurodollar Loans being converted. HomeSide may elect from time to
time to convert ABR Loans made to it or to HonoMo to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election. Each such notice shall be in writing or by fax in the form of
Exhibit F-2 and shall include the applicable information required as set forth
therein. Any such notice of conversion to Eurodollar Loans shall specify the
length of the initial Interest Period or Interest Periods therefor. Upon receipt
of any such notice the Administrative Agent shall promptly notify each Lender
thereof. All or any part of outstanding Eurodollar Loans or ABR Loans may be
converted as provided herein, PROVIDED, that (i) no ABR Loan may be converted
into a Eurodollar Loan when any Event of Default has occurred and is continuing
and the Administrative Agent or the Required Lenders have determined that such a
conversion is not appropriate, (ii) any such conversion may only be made if,
after giving effect thereto, subsection 2.10 shall not have been contravened and
(iii) no ABR Loan may be converted into a Eurodollar Loan after the date which
is one month prior to the Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by
HomeSide's giving three Business Days' notice to the Administrative Agent, in
accordance with the applicable provisions of the term "Interest Period" set
forth in subsection 1.1, of the length of the next Interest Period to be
applicable to such Eurodollar Loans, PROVIDED, that no Eurodollar Loan may be
continued as such (i) when any Event of Default has occurred and is continuing
and the Administrative Agent or the Required Lenders have determined that such a
continuation is not appropriate, (ii) if, after giving effect thereto,
subsection 2.10 would be contravened or (iii) after the date that is one month
prior to the Termination Date; and PROVIDED, FURTHER, that if HomeSide shall
fail to give any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso such Eurodollar
Loans shall be automatically converted to ABR Loans on the last day of such then
expiring Interest Period. Each such notice shall be in writing or by fax in the
form of Exhibit F-2 and shall include the applicable information required as set
forth therein. Upon receipt of any such notice the Administrative Agent shall
promptly notify each Lender thereof.
2.9 SWING LINE COMMITMENTS. (a) Subject to the terms and
conditions hereof, each Swing Line Lender severally agrees to make short-term
funding loans, which may be
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designated in the Borrowing Notice in the form of Exhibit F-1 in respect thereof
as (i) based on the Tranche A Borrowing Base of the applicable Borrower
("TRANCHE A SWING LINE LOANS"), (ii) based on the Servicing Advance Portion of
the applicable Borrower's Tranche B Borrowing Base ("TRANCHE B SWING LINE
ADVANCE LOANS"), and/or (iii) based on the Servicing Portfolio Portion of the
applicable Borrower's Tranche B Borrowing Base ("TRANCHE B SWING LINE PORTFOLIO
LOANS"; together with the Tranche B Swing Line Advance Loans, the "TRANCHE B
SWING LINE LOANS"), to each Borrower from time to time during the Commitment
Period in an aggregate principal amount at any one time outstanding not to
exceed such Swing Line Lender's Swing Line Commitment; PROVIDED, that no Swing
Line Loans may be made if, after giving effect thereto, (A) the aggregate
outstanding Principal Amount of all Loans would exceed the Tranche A Commitment
Amount plus the Tranche B Commitment Amount, (B) the aggregate outstanding
Principal Amount of Swing Line Loans of any Swing Line Lender would exceed such
Swing Line Lender's Swing Line Commitment, (C) the aggregate outstanding
principal amount of all Tranche B Loans, Tranche B CAF Advances and Tranche B
Swing Line Loans would exceed the Tranche B Commitment Amount, (D) the aggregate
outstanding Principal Amount of all Tranche A Loans, Tranche A CAF Advances and
Tranche A Swing Line Loans made to HomeSide would exceed the HomeSide Tranche A
Borrowing Base, (E) the aggregate outstanding Principal Amount of all Tranche A
Loans, Tranche A CAF Advances and Tranche A Swing Line Loans made to HonoMo
would exceed the HonoMo Tranche A Borrowing Base, (F) the aggregate outstanding
Principal Amount of all Tranche B Advance Loans, Tranche B CAF Advances and
Tranche B Swing Line Advance Loans made to HomeSide would exceed the Servicing
Advance Portion of the HomeSide Tranche B Borrowing Base, (G) the aggregate
outstanding Principal Amount of all Tranche B Advance Loans, Tranche B CAF
Advances and Tranche B Swing Line Advance Loans made to HonoMo would exceed the
Servicing Advance Portion of the HonoMo Tranche B Borrowing Base, (H) the
aggregate outstanding Principal Amount of all Tranche B Portfolio Loans and
Tranche B Swing Line Portfolio Loans made to HomeSide would exceed the Servicing
Portfolio Portion of the HomeSide Tranche B Borrowing Base, (I) the aggregate
outstanding Principal Amount of all Tranche B Portfolio Loans and Tranche B
Swing Line Portfolio Loans made to HonoMo would exceed the Servicing Portfolio
Portion of the HonoMo Tranche B Borrowing Base, (J) the aggregate outstanding
Principal Amount of all Tranche A Loans, Tranche A CAF Advances and Tranche A
Swing Line Loans made to HonoMo would exceed the HonoMo Tranche A Sublimit or
(K) the aggregate outstanding Principal Amount of all Tranche B Loans, Tranche B
CAF Advances and Tranche B Swing Line Loans made to HonoMo would exceed the
HonoMo Tranche B Sublimit.
(b) Each Borrower may borrow under the Swing Line Commitments
during the Commitment Period on any Business Day, PROVIDED that HomeSide, for
itself or on behalf of HonoMo, shall give the Administrative Agent irrevocable
notice (which notice must be received by the Administrative Agent prior to 2:00
P.M., New York City time, on the requested Borrowing Date, specifying the amount
to be borrowed. Each borrowing under the Swing Line Commitments, or in the event
HomeSide and HonoMo make a borrowing of Swing Line Loans on the same day, the
combined amount of such Swing Line Loans, shall be in an amount equal to
$2,500,000 or a whole multiple of $1,000,000 in excess thereof. Each such notice
shall be in writing or by fax in the form of Exhibit F-1 and shall include the
information required as set forth therein, including the information to be
provided by the Collateral Agent as set forth
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therein. During the Commitment Period each Borrower may use the Swing Line
Commitments by borrowing, prepaying the Swing Line Loans in whole or in part,
and reborrowing, all in accordance with the terms and conditions hereof. Upon
receipt of any such notice from HomeSide, the Administrative Agent shall
promptly notify each Swing Line Lender thereof. Each Swing Line Lender will make
the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the applicable Borrower at the Payment
Office prior to 3:00 p.m., New York City time, on the Borrowing Date requested
by HomeSide in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the applicable Borrower by the
Administrative Agent at the Payment Office by crediting the applicable Funding
Account with the aggregate of the amounts made available to the Administrative
Agent by the Swing Line Lenders and in like funds as received by the
Administrative Agent.
(c) The Administrative Agent may at any time in its sole and
absolute discretion, and, with respect to each Swing Line Loan which has not
been repaid by the applicable Borrower in immediately available funds prior to
10:30 A.M., New York City time, on the Thursday (or if such day is not a
Business Day, the Business Day first preceding such day) first occurring after
the Borrowing Date with respect to such Swing Line Loan shall, on behalf of such
Borrower (which hereby irrevocably directs the Swing Line Lender to act on its
behalf) request prior to 12:00 Noon, New York City time, each Lender on such
Thursday (or such next preceding Business Day) after the Borrowing Date with
respect to such Swing Line Loan (i) to make a Tranche A Loan in an amount equal
to such Lender's Tranche A Commitment Percentage of the amount of each such
Swing Line Loan that is a Tranche A Swing Line Loan and (ii) to make a Tranche B
Loan in an amount equal to such Lender's Tranche B Commitment Percentage of the
amount of each such Swing Line Loan that is a Tranche B Swing Line Loan
(collectively, the "MATURING SWING LINE LOANS"). Unless any of the events
described in paragraph (f) of Section 9 shall have occurred (in which event the
procedures of paragraph (d) of this subsection 2.9 shall apply) each Lender
shall make the proceeds of its Tranche A Loan or Tranche B Loan, as the case may
be, available to the Administrative Agent for the account of the Swing Line
Lenders at the Payment Office prior to 2:00 P.M., New York City time, in funds
immediately available on the date such notice is given. The proceeds of such
Tranche A Loans or Tranche B Loans, as the case may be, shall be immediately
applied to repay the Maturing Swing Line Loan. Each Tranche A Loan or Tranche B
Loan made pursuant to this subsection 2.9(c) shall be an ABR Loan. Such Tranche
B Loans shall be Tranche B Advance Loans or Tranche B Portfolio Loans, as the
case may be, as determined by such type of the applicable Swing Line Loans
refunded thereby.
(d) If prior to the making of a Tranche A Loan or a Tranche B
Loan pursuant to paragraph (c) of this subsection 2.9 one of the events
described in paragraph (f) of Section 9 shall have occurred, each Lender will,
on the date such Tranche A Loan or Tranche B Loan was to have been made,
purchase an undivided participating interest in the Maturing Swing Line Loan
that was to have been refunded with the proceeds of such Tranche A Loan or such
Tranche B Loan, as the case may be, in an amount equal to its Tranche A
Commitment Percentage of such Maturing Swing Line Loan, in the case of such
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Tranche A Loan, or in an amount equal to its Tranche B Commitment Percentage of
such Maturing Swing Line Loan, in the case of such Tranche B Loan. Each Lender
will immediately transfer to the Administrative Agent, in immediately available
funds, the amount of its participation and upon receipt thereof (i) the
Administrative Agent will make such funds available to each Swing Line Lender
based pro rata on their respective portion of such Swing Line Loan and (ii) each
such Swing Line Lender will deliver to the Administrative Agent, and the
Administrative Agent will in turn promptly deliver to each such Lender, a Swing
Line Loan participation certificate dated the date of receipt of such funds and
in such amount.
(e) Whenever, at any time after the Administrative Agent has
received from any Lender such Lender's participating interest in a Maturing
Swing Line Loan, the Administrative Agent receives any payment on account
thereof, the Administrative Agent will distribute to such Lender its
participating interest in such amount (appropriately adjusted in the case of
interest payments, to reflect the period of time during which such Lender's
participating interest was outstanding and funded); PROVIDED, HOWEVER, that in
the event that such payment received by the Administrative Agent is required to
be returned, such Lender will return to the Administrative Agent any portion
thereof previously distributed by the Administrative Agent to it.
(f) Each Lender's obligation to purchase participating
interests pursuant to this subsection 2.9 shall be absolute and unconditional
and shall not be affected by any circumstance, including, without limitation,
(i) any set-off, counterclaim, recoupment, defense or other right which such
Lender or either Borrower may have against the Administrative Agent or any Swing
Line Lender, either Borrower or anyone else for any reason whatsoever; (ii) the
occurrence or continuance of an Event of Default; (iii) any adverse change in
the financial condition of either Borrower; (iv) any breach of this Agreement by
any Loan Party or any other Lender; or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.
2.10 MINIMUM AMOUNTS AND MAXIMUM NUMBER OF EURODOLLAR
TRANCHES. All borrowings, conversions and continuations of Eurodollar Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, after giving effect
thereto, there shall be no more than 20 Eurodollar Tranches outstanding at any
time.
2.11 INTEREST RATES AND PAYMENT DATES FOR RATE-BASED LOANS.
(a) Each Eurodollar Loan shall bear interest for each day during each Interest
Period with respect thereto at a rate per annum equal to the Eurodollar Rate
determined for such Interest Period plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus, with respect to any Tranche B Portfolio Loan that is an
ABR Loan outstanding when Rating V is in effect, a margin of .50%.
(c) Each Tranche A Swing Line Loan shall bear interest at a
rate per annum equal to the Tranche A Swing Line Rate, and each Tranche B Swing
Line Loan shall bear interest at a rate per annum equal to the applicable
Tranche B Swing Line Rate.
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(d) Each CAF Advance shall bear interest at the rate per annum
specified in the CAF Advance Offer accepted by HomeSide in connection with such
CAF Advance.
(e) If all or a portion of the Principal Amount of any Loan or
any interest payable thereon shall not be paid when due (whether at the stated
Maturity Date, by acceleration or otherwise), the outstanding Principal Amount
of the Loans shall bear interest at a rate per annum equal to the Post-Default
Rate, in each case from the date of such non-payment until such amount is paid
in full (as well after as before judgment). If any amount payable hereunder
other than the amounts set forth above shall not be paid when due, such amount
shall bear interest at a rate per annum equal to the Post-Default Rate until
paid in full.
(f) Interest shall be payable in arrears on each Interest
Payment Date, PROVIDED, that interest accruing pursuant to paragraph (e) of this
subsection shall be payable on demand and PROVIDED, FURTHER, that interest
accrued on ABR Loans for each day during each calendar month shall be payable on
the Interest Payment Date first following such calendar month.
SECTION 3. ADDITIONAL PROVISIONS APPLICABLE TO THE LOANS
3.1 REPAYMENT OF LOANS; INTEREST; EVIDENCE OF DEBT. (a) Each
Borrower hereby unconditionally promises to pay at the Payment Office for the
account of each Lender the then unpaid Principal Amount of each Loan of such
Lender made to such Borrower on the Maturity Date with respect thereto, or on
such earlier date on which the Loans become due and payable pursuant to Section
9. Each Borrower hereby further agrees to pay at the Payment Office interest on
the unpaid principal amount of the Loans made to it and from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in subsection 2.11.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of each Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent shall maintain the Register
pursuant to subsection 11.6(d), and a subaccount therein for each Lender, in
which shall be recorded (i) the Principal Amount of each Loan made hereunder and
each Interest Period applicable thereto and, in the case of Rate-Based Loans,
the Type thereof, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrowers to each Lender hereunder and
(iii) both the amount of any sum received by the Administrative Agent hereunder
from the Borrowers and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 3.1(b) shall, to the extent permitted
by applicable law, be PRIMA FACIE evidence of the existence and amounts of the
obligations of the Borrowers therein recorded; PROVIDED, HOWEVER, that the
failure of any Lender or the Administrative Agent to maintain the
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Register or any such account, or any error therein, shall not in any manner
affect the obligation of either Borrower to repay (with applicable interest) the
Loans in accordance with the terms of this Agreement.
(e) Each Borrower agrees that, upon the request to the
Administrative Agent by any Lender, such Borrower will execute and deliver to
such Lender a promissory note of such Borrower evidencing the Loans of such
Lender, substantially in the form of Exhibit A-1, in the case of Balance-Based
Loans, Exhibit A-2, in the case of Rate-Based Loans, Exhibit A-3, in the case of
Swing Line Loans and A-4, in the case of CAF Advances, with appropriate
insertions as to date and principal amount (each, a "NOTE").
3.2 FEES. (a) HomeSide shall pay to the Administrative Agent,
for the account of each Lender, quarterly in arrears, a commitment fee equal to
the product of (i) the Commitment Fee Rate multiplied by (ii) such Lender's
average daily Available Commitment, in each case for the quarterly period ended
on the last day of such quarterly payment date, payable on the last day of each
March, June, September and December and on the Termination Date or such earlier
date on which the Commitments shall terminate as provided herein. Payment of
commitment fees payable pursuant to this subsection 3.2(a) shall commence on
March 31, 1997.
(b) HomeSide shall pay to the Administrative Agent, for the
account of Chase, the fees in the amounts and on the dates previously set forth
in the Letter Agreement.
(c) HomeSide shall pay to the Collateral Agent the fees in the
amounts and on the dates agreed between HomeSide and the Collateral Agent from
time to time.
(d) HomeSide shall pay to the Administrative Agent fees for
its services hereunder in the amounts and on the dates agreed between HomeSide
and the Administrative Agent from time to time.
3.3 OPTIONAL REDUCTIONS OF COMMITMENTS; MANDATORY REDUCTIONS
OF COMMITMENTS. (a) HomeSide shall have the right to terminate or reduce the
unused portion of the Tranche A Commitments, the Tranche B Commitments or the
Swing Line Commitments at any time or from time to time upon not less than three
Business Days' prior notice to the Administrative Agent (which shall notify the
Lenders thereof as soon as practicable), which notice shall specify the
effective date thereof and the amount of any such reduction (which shall not be
less than $10,000,000 or a whole multiple of $5,000,000 in excess thereof) and
shall be irrevocable; PROVIDED, that no such termination or reduction shall be
permitted if, after giving effect thereto and to any prepayments of the Loans
made on the effective date thereof, (i) the aggregate Principal Amount of the
outstanding Tranche A Loans, Tranche A CAF Advances, Tranche B Loans and Tranche
B CAF Advances, plus the aggregate amount of the outstanding Swing Line Loans
and the unused portion of the Swing Line Commitments, would exceed the Tranche A
Commitment Amount plus the Tranche B Commitment Amount or (ii) the aggregate
Principal Amount of the outstanding Tranche B Loans, Tranche B CAF Advances and
Tranche B Swing Line Loans would exceed the Tranche B Commitments; and PROVIDED,
FURTHER, that after giving effect to any such reduction in the Tranche A
Commitments or the Tranche B
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Commitments, the proportion of the aggregate Tranche A Commitments in relation
to the aggregate Commitments shall not be less than the proportion of the
aggregate Tranche A Commitments on the Closing Date in relation to the aggregate
Commitments on the Closing Date.
(b) The Commitments once terminated or reduced may not be
reinstated. Termination of the Commitments shall terminate the obligation of (i)
the Balance Lenders to make Balance-Based Loans, (ii) the Lenders to purchase
Balanced-Based Loans, (iii) the Lenders to make Rate-Based Loans and (iv) the
Swing Line Lenders to make Swing Line Loans.
(c) Any prepayment of Tranche B Loans pursuant to subsection
3.4(c) shall be accompanied by a simultaneous and automatic reduction of the
Tranche B Commitments in an equal amount.
3.4 OPTIONAL AND MANDATORY PREPAYMENTS; NET REPAYMENTS. (a)
Subject to subsection 3.11, each Borrower shall have the right to prepay a
Committed Loan prior to the Maturity Date applicable thereto, without premium or
penalty, upon at least three Business Days' irrevocable notice to the
Administrative Agent with respect to Eurodollar Loans or Balance-Based Loans,
and, in the case of ABR Loans, notice prior to 12:00 noon (New York City time)
on the Business Day of such prepayment, specifying the date and amount of
prepayment and whether the prepayment is of Tranche A Loans, Tranche B Advance
Loans, Tranche B Portfolio Loans, Balance-Based Loans, Rate-Based Loans or, if
of a combination thereof, the amount allocable to each, and, with respect to
Rate-Based Loans, whether the prepayment is of Eurodollar Loans, ABR Loans or a
combination thereof, and, if of a combination thereof, the amount allocable to
each; PROVIDED, that any optional prepayment shall be in an amount not less than
$10,000,000 or a whole multiple of $5,000,000 in excess thereof (or, if the
outstanding principal amount of any Loan being so prepaid is less than
$10,000,000, such lesser amount). Swing Line Loans may be prepaid without
notice. A CAF Advance may be prepaid only with the consent of the Lender to
which such CAF Advance is owed.
(b) Each Borrower shall immediately prepay (i) Tranche A Loans
and/or Tranche A Swing Line Loans made to it to the extent that the aggregate
outstanding Principal Amount of the Tranche A Loans, Tranche A CAF Advances and
Tranche A Swing Line Loans made to it exceeds the amount of the HomeSide Tranche
A Borrowing Base, in the case of such Loans made to HomeSide, or the amount of
the HonoMo Tranche A Borrowing Base, in the case of such Loans made to HonoMo,
(ii) Tranche B Advance Loans and/or Tranche B Swing Line Advance Loans made to
it to the extent that the aggregate outstanding Principal Amount of the Tranche
B Advance Loans, Tranche B CAF Advances and the Tranche B Swing Line Advance
Loans made to it exceeds the amount of the Servicing Advance Portion of the
HomeSide Tranche B Borrowing Base, in the case of such Loans made to HomeSide,
or the amount of the Servicing Advance Portion of the HonoMo Tranche B Borrowing
Base, in the case of such Loans made to HonoMo, and (iii) Tranche B Portfolio
Loans and/or Tranche B Swing Line Portfolio Loans made to it, to the extent that
the aggregate outstanding Principal Amount of the Tranche B Portfolio Loans and
the Tranche B Swing Line Portfolio Loans made to it exceeds the amount of the
Servicing Portfolio Portion of the HomeSide Tranche B Borrowing Base, in the
case of such
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Loans made to HomeSide, or the amount of the Servicing Portfolio Portion of the
HonoMo Tranche B Borrowing Base, in the case of such Loans made to HonoMo, in
each case as set forth in any Borrowing Base Certificate delivered by such
Borrower hereunder, PROVIDED that in the case of clause (iii) above, if such
Borrower delivers to the Administrative Agent on the date of such required
prepayment of Tranche B Portfolio Loans a certificate setting forth, in
reasonable detail, the value and description of Hedge Contracts from which such
Borrower is then undertaking to realize cash proceeds, and the Administrative
Agent determines that the amount of such value to be so realized is equal to or
greater than the amount of such required prepayment, such required prepayment
shall be made as soon as practicable thereafter and in any event no later than
five Business Days after the date that such prepayment would be required but for
this proviso. Such prepayments shall be applied to the Loans in respect of which
such excess over the Borrowing Base component applicable thereto exists as
described in the preceding sentence (and ratably thereto, if applicable), FIRST,
to any outstanding ABR Loans, SECOND, to any outstanding Swing Line Loans,
THIRD, to any outstanding Eurodollar Loans and FOURTH, to any outstanding
Balance-Based Loans.
(c) If, subsequent to the Closing Date, HomeSide or Holdings
shall issue or incur any Indebtedness (other than Indebtedness permitted by
subsection 8.2), HomeSide shall apply an amount equal to the Net Cash Proceeds
thereof, on the date of the receipt of such Net Cash Proceeds, to the prepayment
of the Tranche B Loans, FIRST, to any outstanding ABR Loans, SECOND, to any
outstanding Swing Line Loans, THIRD, to any outstanding Eurodollar Loans and
FOURTH, to any outstanding Balance-Based Loans. This paragraph (c) does not
constitute permission for HomeSide or Holdings to incur any Indebtedness not
otherwise permitted by this Agreement and the Holdings Guarantee.
(d) If, subsequent to the Closing Date, Holdings or any
Subsidiary of Holdings shall receive any payment in respect of termination or
equivalent fees under its servicing agreements related to the Eligible Servicing
Portfolio, HonoMo, in the case of any such payment received by HonoMo, or
HomeSide, in the case of any such payment received by Holdings or any Subsidiary
of Holdings other than HonoMo, shall immediately apply an amount equal to the
Net Cash Proceeds thereof to the prepayment of the Loans made to it, FIRST, to
any outstanding Swing Line Loans, SECOND, to any outstanding Tranche B Loans
that are ABR Loans, THIRD, to any outstanding Tranche B Loans that are
Eurodollar Loans and FOURTH, to any outstanding Tranche B Loans that are
Balance-Based Loans.
(e) If Holdings shall consummate the IPO, an amount equal to
100% of the Net Cash Proceeds thereof shall be applied, on the date of receipt
thereof (or, in the case of the portion thereof to be applied to redeem the
Holdings Notes, on such later dates as shall satisfy the requirements applicable
to the redemption of the Holdings Notes with such proceeds), (i) to redeem the
maximum amount of the Holdings Notes that can be redeemed without premium (other
than such premium as is required under the Holdings Notes to effect a repurchase
thereunder with such Net Cash Proceeds of such IPO as contemplated therein)
thereunder under the terms thereof, but in any event not in excess of
$70,000,000 in aggregate principal amount thereof, and (ii) to the extent that
amount of such Net Cash Proceeds exceeds the amount that will be applied to
redemption of the Holdings Notes pursuant to the foregoing clause (i), to the
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prepayment of the Loans made to it, FIRST, to any outstanding Tranche B Loans
that are ABR Loans, SECOND, to any outstanding Swing Line Loans, THIRD, to any
outstanding Tranche B Loans that are Eurodollar Loans and FOURTH, to any
outstanding Tranche B Loans that are Balance-Based Loans. Pending application of
the Net Cash Proceeds of the IPO to the redemption of the Holdings Notes
pursuant to clause (i) of the preceding sentence, such Net Cash Proceeds may be
applied to repay other short-term Indebtedness of HomeSide.
(f) If any Lender makes or purchases a Loan on a day on which
a Borrower is to repay all or any part of any outstanding Loan made or purchased
by such Lender, such Lender shall apply the proceeds of the requested Loan to
make such repayment and only an amount equal to the difference (if any) between
the amount such Lender would have otherwise advanced pursuant to subsections 2.3
and 2.7 in the absence of any such repayment and the principal amount of the
Loan being repaid shall be made available by such Lender to the Administrative
Agent as provided in subsections 2.3 and 2.7 or remitted by such Borrower to the
Administrative Agent for the account of such Lender as provided in subsection
3.6.
(g) If any Balance-Based Loan shall be prepaid pursuant to
subsections 3.4(a) through (f), the amount required to prepay such Balance-Based
Loan shall be the net funded amount of such Balance-Based Loan actually advanced
by the Balance Lenders to the applicable Borrower on the relevant Borrowing
Date, together with accreted discount thereon calculated at the Applicable
Margin (based on a 360-day year) for the period commencing on the relevant
Borrowing Date and extending through the date immediately preceding the date of
the prepayment, plus all amounts payable pursuant to subsection 3.11 in
connection therewith. If any Rate-Based Loan or Swing Line Loan shall be prepaid
pursuant to subsection 3.4(a) through (f), the amount required to prepay such
Rate-Based Loans shall be the Principal Amount of such Rate-Based Loan, together
with accrued interest to such date and all amounts payable pursuant to
subsection 3.11 in connection therewith, PROVIDED that so long as no Default or
Event of Default has occurred and is continuing, interest accrued on any ABR
Loan prepaid pursuant to this subsection 3.4 shall be paid on the Interest
Payment Date in respect thereof first following such prepayment rather than on
the date of such prepayment.
3.5 COMPUTATION OF DISCOUNTS, INTEREST AND FEES. (a) Each
Balance Lender Discount and Committed Lender Discount shall be calculated on the
basis of a 360 day year for the actual days elapsed. Interest on ABR Loans
accruing at a rate per annum based upon the Prime Rate shall be calculated on
the basis of a 365 day year for the actual days elapsed; otherwise, all interest
on the Loans shall be calculated on the basis of a 360-day year for the actual
days elapsed. Commitment fees and any other amounts hereunder that are
calculated on a per annum basis shall be calculated on the basis of a 360 day
year for the actual days elapsed. The Administrative Agent shall notify the
Borrowers and the Lenders of each determination of a Eurodollar Rate on the date
of the determination thereof. Any change in the interest rate on a Loan
resulting from a change in the ABR or the Eurocurrency Reserve Requirements
shall become effective as of the opening of business on the day on which such
change in the ABR or the Eurocurrency Reserve Requirements, as the case may be,
is announced.
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(b) Each determination by the Administrative Agent of a
Balance Lender Discount, Committed Lender Discount, ABR, Eurodollar Rate, LIBO
Rate, Applicable Margin or Commitment Fee Rate pursuant to any provision of this
Agreement shall be conclusive and binding on the Borrowers and the Lenders, in
the absence of manifest error. The Administrative Agent shall, at the request of
HomeSide or any Lender, deliver to the Borrowers or such Lender a statement
showing the computations used by the Administrative Agent in determining any
discount, interest rate or fee rate.
3.6 PRO RATA TREATMENT AND PAYMENTS. (a) Each purchase by the
Lenders pursuant to subsection 2.3 of Balance-Based Loans under the Tranche A
Commitments or the Tranche B Commitments, as the case may be, each borrowing by
the Borrowers of Rate- Based Loans under the Tranche A Commitments or the
Tranche B Commitments, as the case may be, and any reduction of the Tranche A
Commitments or the Tranche B Commitments, as the case may be, shall be made pro
rata according to the respective Tranche A Commitment Percentages or the Tranche
B Commitment Percentages of the Lenders. Each payment by a Borrower on account
of any commitment fee under the Tranche A Commitments or the Tranche B
Commitments, as the case may be, shall be made pro rata according to the
respective Tranche A Commitment Percentages or the Tranche B Commitment
Percentages of the Lenders. Each payment (including each prepayment) by a
Borrower on account of principal of and interest on the Loans shall be made pro
rata according to the respective outstanding Principal Amounts of the Loans or
amounts of interest, as the case may be, then due and owing to the Lenders.
(b) All payments (including prepayments) to be made by a
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without set off or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof at the Payment
Office, for the account of the Lenders, in Dollars and in immediately available
funds. Each payment or prepayment of Loans shall be accompanied by (i) a payment
notice in writing or by fax in the form of Exhibit F-3 and shall include the
information required as set forth therein, including the information to be
provided by the Collateral Agent as set forth therein and (ii) a Tranche A
Borrowing Base Certificate, in the case of repayments of Tranche A Loans or
Tranche A Swing Line Loans or a Tranche B Borrowing Base Certificate, in the
case of repayments of Tranche B Loans or Tranche B Swing Line Loans, in each
case dated as of the close of business on the Business Day immediately preceding
such Borrowing Date or as of such Borrowing Date, duly completed by HomeSide,
the applicable Borrower and the Collateral Agent in the manner required by the
Borrower Security Agreements. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day, and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension. For the purposes of determining the
obligations of the Borrowers hereunder with respect thereto, any payment by
either Borrower received by the Administrative Agent after 12:00 noon on the due
date thereof shall be deemed to be received on the next succeeding Business Day.
(c) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a Borrowing Date that such Lender will not
make its share of such borrowing
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available to the Administrative Agent on such Borrowing Date, the Administrative
Agent may, in its sole discretion, assume that such Lender is making such amount
available to the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the applicable Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on such Borrowing Date, such Lender shall pay to the
Administrative Agent, on demand, such amount with interest thereon at a rate
equal to the Federal Funds Effective Rate for the period until such Lender makes
such amount immediately available to the Administrative Agent. A certificate of
the Administrative Agent submitted to any Lender with respect to any amounts
owing under this subsection shall be conclusive in the absence of manifest
error. If such Lender's share of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days of such Borrowing
Date, the Administrative Agent shall also be entitled, upon five Business Days'
notice, to recover such amount (less any amounts theretofore made available to
the Administrative Agent by such Lender in respect of such borrowing) with
interest thereon at the rate per annum applicable to ABR Loans hereunder, on
demand, from the applicable Borrower to which such amount was advanced.
(d) Unless the Administrative Agent shall have been notified
in writing by HomeSide prior to a date on which a payment of principal, interest
or fees is due from either Borrower hereunder that such Borrower will not make
such amount available to the Administrative Agent on such due date, the
Administrative Agent may, in its sole discretion, assume that such Borrower is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available a corresponding
amount to the Lenders entitled thereto. If such amount is not made available to
the Administrative Agent by the required time on the due date therefor, the
Administrative Agent shall notify each Lender of such failure, and each Lender
shall pay to the Administrative Agent, on demand, the portion of such amount
received by such Lender with interest thereon at a rate equal to the Federal
Funds Effective Rate for the period from the date of receipt of such amount by
such Lender until such Lender makes such amount immediately available to the
Administrative Agent. A certificate of the Administrative Agent submitted to any
Lender with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error.
3.7 INABILITY TO DETERMINE INTEREST RATE. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Required Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such
Interest Period,
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the Administrative Agent shall give telecopy or telephonic notice thereof (a
"SUBSTITUTE BASIS NOTICE") confirmed in writing, as soon as practicable, to
HomeSide and the Lenders at least one Business Day prior to the requested
Borrowing Date for such Loans. If such Substitute Basis Notice has been given,
HomeSide and the Administrative Agent (in consultation with the Balance Lenders
and the Lenders) shall promptly enter into good faith negotiations with a view
to agreeing upon a Substitute Basis to be used in lieu of the Eurodollar Rate,
including for the purpose of calculating the Committed Lender Discount in
connection with the making of Balance-Based Loans. If on or before the twentieth
day after the date of such Substitute Basis Notice HomeSide and the Balance
Lenders and the Lenders shall agree upon a Substitute Basis, such Substitute
Basis shall, until such Substitute Basis Notice is withdrawn, be applicable to
Eurodollar Loans and Committed Lender Discounts determined after the date of
such Substitute Basis Notice. If a Substitute Basis has not been agreed upon
within such twenty-day period, the Balance Lenders, with the concurrence of the
Required Lenders, shall determine and shall notify the Lenders and HomeSide
(through the Administrative Agent) of the rate basis upon which Eurodollar Loans
and the Committed Lender Discounts will be calculated (which rate basis shall
reflect the rate at which the Lenders are able to fund Eurodollar Loans and the
Balance-Based Loans) and such rate basis shall, until such Substitute Basis
Notice is withdrawn, be applicable to Eurodollar Loans and Committed Lender
Discounts determined after the date of such Substitute Basis Notice. In the
event that any Interest Period commences after the date of a Substitute Basis
Notice and before the date of determination of the Substitute Basis applicable
to such Interest Period as provided in the two preceding sentences, the
Administrative Agent shall preliminarily determine the Substitute Basis
applicable to such Interest Period in its discretion, with payments made at the
end of such Interest Period being appropriately adjusted to give effect to the
Substitute Basis finally determined as provided in the two preceding sentences.
(c) If a Substitute Basis Notice is issued and until it has
been withdrawn (x) any Rate-Based Loans thereafter requested to be made shall be
made as ABR Loans or as Loans the interest rate of which is based on the
Substitute Basis agreed to as set forth above, (y) any ABR Loans that were to
have been converted to Eurodollar Loans shall be continued as ABR Loans or
converted to Loans based on such Substitute Basis and (z) any outstanding
Eurodollar Loans to be continued as Eurodollar Loans shall be converted, on the
last day of the then current Interest Period, to ABR Loans or to Loans based on
such Substitute Basis.
(d) Each Substitute Basis Notice shall be withdrawn by the
Administrative Agent upon the determination by the Required Lenders that the
state of facts which was the basis for such notice no longer exists.
3.8 ILLEGALITY. Notwithstanding any other provision herein, if
the adoption of or any change in any Requirement of Law or in the interpretation
or application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be cancelled and (b) such
Lender's Loans then outstanding as Eurodollar Loans or Balance-Based Loans, if
any, shall be converted automatically to ABR Loans on the respective last days
of the then current Interest Periods with respect to such Loans or within such
earlier period as required
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by law. If any such conversion of a Eurodollar Loan occurs on a day which is not
the last day of the then current Interest Period with respect thereto, each
Borrower shall pay to such Lender such amounts, if any, as may be required
pursuant to subsection 3.11. To the extent that any Lender whose Commitment is
terminated pursuant to this subsection 3.8 would otherwise be obligated to
purchase Balance-Based Loans from the Balance Lenders, the Balance Lenders'
obligation to make such Balance-Based Loans shall be reduced.
3.9 REQUIREMENTS OF LAW. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note, any Eurodollar
Loan or any Balance-Based Loan made or purchased by it, or change the
basis of taxation of payments to such Lender in respect thereof (except
for Non-Excluded Taxes covered by subsection 3.10 and changes in the
rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate or the
Committed Lender Discount hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, purchasing,
converting into, continuing or maintaining Eurodollar Loans or Balance-Based
Loans or to reduce any amount receivable hereunder in respect thereof, then, in
any such case, the Borrower to which such Loans were made shall promptly pay
such Lender such additional amount or amounts as will compensate such Lender for
such increased cost or reduced amount receivable.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, HomeSide shall promptly pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction.
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(c) If any Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify HomeSide (with a
copy to the Administrative Agent) of the event by reason of which it has become
so entitled. A certificate as to any additional amounts payable pursuant to this
subsection submitted by such Lender to HomeSide (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
agreements in this subsection shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
3.10 TAXES. (a) All payments made by the Borrowers under this
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Administrative Agent or any Lender
as a result of a present or former connection between the Administrative Agent
or such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Administrative Agent or such
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any Note). If any such
non-excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("NON-EXCLUDED TAXES") are required to be withheld from any amounts
payable to the Administrative Agent or any Lender hereunder or under any Note,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, PROVIDED, HOWEVER, that the Borrowers shall not be required to
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof if such Lender fails to
comply with the requirements of paragraph (b) of this subsection. Whenever any
Non-Excluded Taxes are payable by either Borrower, as promptly as possible
thereafter HomeSide shall send to the Administrative Agent for its own account
or for the account of such Lender, as the case may be, a certified copy of an
original official receipt received by such Borrower showing payment thereof. If
such Borrower fails to pay any Non-Excluded Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent the required
receipts or other required documentary evidence, HomeSide shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure. The agreements in this subsection shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i) deliver to HomeSide and the Administrative Agent
(A) two duly completed copies of United States Internal Revenue Service
Form 1001 or 4224, or
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successor applicable form, as the case may be, and (B) an Internal
Revenue Service Form W-8 or W-9, or successor applicable form, as the
case may be;
(ii) deliver to HomeSide and the Administrative Agent
two further copies of any such form or certification on or before the
date that any such form or certification expires or becomes obsolete
and after the occurrence of any event requiring a change in the most
recent form previously delivered by it to HomeSide; and
(iii) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be requested by
HomeSide or the Administrative Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises HomeSide and the
Administrative Agent. Such Lender shall certify (i) in the case of a Form 1001
or 4224, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (ii) in
the case of a Form W-8 or W-9, that it is entitled to an exemption from United
States backup withholding tax. Each Person that shall become a Lender or a
Participant pursuant to subsection 11.6 shall, upon the effectiveness of the
related transfer, be required to provide all of the forms and statements
required pursuant to this subsection, provided that in the case of a Participant
such Participant shall furnish all such required forms and statements to the
Lender from which the related participation shall have been purchased.
3.11 INDEMNITY. Each Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by such Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans, CAF Advances
or Balance-Based Loans after notice has been given requesting the same in
accordance with the provisions of this Agreement, (b) default by such Borrower
in making any prepayment after notice thereof has been given in accordance with
the provisions of this Agreement, (c) the making by such Borrower of a
prepayment or conversion of Eurodollar Loans or Balance-Based Loans on a day
which is not the last day of an Interest Period with respect thereto or (d) the
making by such Borrower of a prepayment of any CAF Advance on a day which is not
the CAF Advance Maturity Date applicable thereto. Such indemnification may
include an amount equal to the excess, if any, of (i) the amount of interest
which would have accrued (or, in the case of Balance-Based Loans, the amount of
the Committed Lender Discount) on the amount so prepaid or converted, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or conversion or of such failure to borrow, convert or continue to
the last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest (or, in the
case of Balance-Based Loans, the applicable Committed Lender Discount) for such
Loans provided for herein (excluding, however, the Applicable Margin included
therein, if any) over (ii) the amount of interest (as reasonably determined by
such Lender) which would have accrued to such Lender on
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such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. This covenant shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
SECTION 4. BORROWING BASE AND ELIGIBLE COLLATERAL
4.1 TRANCHE A BORROWING BASE. The "HOMESIDE TRANCHE A
BORROWING BASE" shall be, as of any date, the sum of the amounts determined by
applying the percentages set forth below to the respective values of assets of
HomeSide, and the "HONOMO TRANCHE A BORROWING BASE" shall be, as of any date,
the sum of the amounts determined by applying the percentages set forth below to
the respective values of assets of HonoMo, in each case described in
subparagraphs (a) through (d) below which are deemed Delivered hereunder as of
such date (without duplication in the event that any such asset is converted
from one category to another) subject to the sublimits set forth below and to
the other provisions hereof (terms used in this subsection 4.1 and not defined
in subsection 1.1 being defined in subsection 4.3):
(a) for Eligible First Mortgage Loans, 98% of the least of (i)
the current unpaid principal balance thereof, (ii) the acquisition cost
thereof (minus discount points and fees associated with yield), and
(iii) the Applicable Take-Out Price thereof multiplied by the current
unpaid principal balance thereof;
(b) for Eligible Second Mortgage Loans, 95% of the least of
(i) the current unpaid principal balance thereof, (ii) the acquisition
cost thereof (minus discount points and fees associated with yield),
and (iii) the Applicable Take-Out Price thereof multiplied by the
current unpaid principal amount thereof;
(c) for Eligible Mortgage-Backed Securities, 99% of the lesser
of (i) the face amount thereof, and (ii) the Applicable Take-Out Price
multiplied by the face amount thereof; and
(d) cash or Cash Equivalents pledged as Collateral in
accordance with the applicable Borrower Security Agreement and held in
the Settlement Accounts referred to in such Borrower Security
Agreement;
PROVIDED, that the HomeSide Tranche A Borrowing Base in effect on any date shall
be deemed reduced by the outstanding principal amount of Permitted Commercial
Paper on such date;
and FURTHER PROVIDED that, at any time, the maximum portion of either the
HomeSide Tranche A Borrowing Base or the HonoMo Tranche A Borrowing Base
attributable to the value of assets determined under subparagraphs (a) and (b)
above at such time shall be subject to the following sublimits:
(i) the portion of such Tranche A Borrowing Base
attributable to Eligible Wet Loans shall not, except during the first
two Business Days commencing on the first day
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of any Negative Security Period, exceed 30% of the Tranche A Commitment
Amount less the HonoMo Tranche A Sublimit at such time, in the case of
the HomeSide Tranche A Borrowing Base, or 30% of the HonoMo Tranche A
Sublimit at such time, in the case of the HonoMo Tranche A Borrowing
Base;
(ii) the portion of such Tranche A Borrowing Base
attributable to Eligible Mortgage Loans with respect to which the
related promissory notes (or related note modification agreements) are
dated earlier than 180 days prior to inclusion of such Eligible
Mortgage Loans in such Tranche A Borrowing Base shall not exceed 5% of
the Tranche A Commitment Amount less the HonoMo Tranche A Sublimit at
such time, in the case of the HomeSide Tranche A Borrowing Base, or 5%
of the HonoMo Tranche A Sublimit at such time, in the case of the
HonoMo Tranche A Borrowing Base, and no such Eligible Mortgage Loans
may be so included in such Tranche A Borrowing Base unless (A) they are
covered by and allocated to one or more specific Eligible Take-Out
Commitments and (B) the related promissory notes (or related note
modification agreements) are dated not earlier than 25 months prior to
inclusion of such Eligible Mortgage Loans in such Tranche A Borrowing
Base;
(iii) the portion of such Tranche A Borrowing Base
attributable to Eligible First Mortgage Loans having an original
principal balance in excess of $1,000,000 shall not exceed 5% of the
Tranche A Commitment Amount less the HonoMo Tranche A Sublimit at such
time, in the case of the HomeSide Tranche A Borrowing Base, or 5% of
the HonoMo Tranche A Sublimit at such time, in the case of the HonoMo
Tranche A Borrowing Base;
(iv) the portion of the Tranche A Borrowing Base
attributable to Eligible Second Mortgage Loans shall not exceed 10% of
the Tranche A Commitment Amount less the HonoMo Tranche A Sublimit at
such time, in the case of the HomeSide Tranche A Borrowing Base, or 10%
of the HonoMo Tranche A Sublimit at such time, in the case of the
HonoMo Tranche A Borrowing Base; and
(v) the portion of the Tranche A Borrowing Base
attributable to Nonconforming Mortgage Loans constituting Eligible
First Mortgage Loans shall not exceed 30% of the Tranche A Commitment
Amount less the HonoMo Tranche A Sublimit at such time, in the case of
the HomeSide Tranche A Borrowing Base, or 30% of the HonoMo Tranche A
Sublimit at such time, in the case of the HonoMo Tranche A Borrowing
Base;
and FURTHER PROVIDED that no Mortgage Loan purchased by a Borrower with the
proceeds of an Eligible Early Buyout Advance or Eligible Paid-in-Full Buyout
Advance shall be included in such Borrower's Tranche A Borrowing Base.
Each Tranche A Borrowing Base shall be determined by reference to the
most recent Tranche A Borrowing Base Certificate delivered by the Collateral
Agent to the Administrative Agent absent any error in such Tranche A Borrowing
Base Certificate as of the date delivered.
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4.2 TRANCHE B BORROWING BASE. The "HOMESIDE TRANCHE B
BORROWING BASE" shall be, as of any date, the sum of the amounts determined by
applying the percentages set forth below to the respective values of assets of
HomeSide, and the "HONOMO TRANCHE B BORROWING BASE" shall be, as of any date,
the sum of the amounts determined by applying the percentages set forth below to
the respective values of assets of HonoMo, in each case described in
subparagraphs (a) through (g) below which are deemed Delivered hereunder as of
such date (without duplication in the event any such asset is converted from one
category to another) subject to the sublimits set forth below and to the other
provisions hereof (terms used in this subsection 4.2 and not defined in
subsection 1.1 being defined in subsection 4.3):
(a) 90% of Eligible P&I Advance Receivables;
(b) 80% of Eligible T&I Advance Receivables;
(c) 85% of Eligible Early Buyout Advance Receivables;
(d) 85% of Eligible Foreclosure Advance Receivables;
(e) 85% of Eligible Default-Related Advance Receivables;
(f) 85% of Eligible Paid-in-Full Buyout Advance Receivables;
and
(g) the lesser of (i) 70% of (A) the Appraised Value of the
Eligible Servicing Portfolio MINUS (B) the MTN Deduction Amount at such
time and (ii) the remainder of (A) 1.35% of the aggregate unpaid
principal balance of the underlying Mortgage Loans in respect of the
Eligible Servicing Portfolio MINUS (B) the MTN Deduction Amount at such
time;
PROVIDED that, at any time, the maximum portion of either the HomeSide Tranche B
Borrowing Base or the HonoMo Tranche B Borrowing Base attributable to the value
of assets determined under subparagraphs (a), (b), (c), (d), (e) and (f) above
at such time shall not exceed 50% of the Tranche B Commitment Amount less the
HonoMo Tranche B Sublimit at such time, in the case of the HomeSide Tranche B
Borrowing Base, or 50% of the HonoMo Tranche B Sublimit at such time, in the
case of the HonoMo Tranche B Borrowing Base.
Each Tranche B Borrowing Base shall be determined by reference to the most
recent Tranche B Borrowing Base Certificate delivered by the Collateral Agent to
the Administrative Agent absent any error in such Tranche B Borrowing Base
Certificate as of the date delivered.
4.3 BORROWING BASE DEFINITIONS. As used in this Section 4 and
in the other provisions of this Agreement and the other Loan Documents, the
following terms shall have the following meanings, PROVIDED that (a) for the
purpose of the use of each such term in determining the HomeSide Tranche A
Borrowing Base or the HomeSide Tranche B Borrowing Base, (i) each reference to
the Borrower therein shall be deemed to refer to HomeSide, (ii) each reference
therein to the Borrower Security Agreement shall be deemed to refer to the
HomeSide Security
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Agreement, and (iii) each reference to the Tranche A Borrowing Base or the
Tranche B Borrowing Base therein shall refer to the HomeSide Tranche A Borrowing
Base or the HomeSide Tranche B Borrowing Base, respectively, and (b) for the
purpose of the use of each such term in determining the HonoMo Tranche A
Borrowing Base or the HonoMo Tranche B Borrowing Base, (i) each reference to the
Borrower therein shall be deemed to refer to HonoMo, (ii) each reference therein
to the Borrower Security Agreement shall be deemed to refer to the HonoMo
Security Agreement, and (iii) each reference to the Tranche A Borrowing Base or
the Tranche B Borrowing Base therein shall refer to the HonoMo Tranche A
Borrowing Base or the HonoMo Tranche B Borrowing Base, respectively:
"ACKNOWLEDGMENT AGREEMENTS": collectively, the FHLMC
Acknowledgment Agreement, the FNMA Acknowledgment Agreement, each
Approved Investor Acknowledgment Agreement and, in the event that the
Administrative Agent has determined that any such form is acceptable as
set forth in the definition of GNMA Acknowledgement Agreement, the GNMA
Acknowledgement Agreement.
"AGENCY GUIDES": collectively, the FHLMC Guide, the FNMA
Guide and the GNMA Guide.
"APPLICABLE TAKE-OUT PRICE": as of any date, (a) for each
Eligible Mortgage Loan included in the Tranche A Borrowing Base, the
weighted average net purchase price (expressed as a percentage) of the
Eligible Take-Out Commitments under which such Eligible Mortgage Loan
could be sold, and (b) for each Eligible Mortgage-Backed Security
included in the Tranche A Borrowing Base, the weighted average net
purchase price (expressed as a percentage) of the Eligible Take-Out
Commitments under which such Eligible Mortgage-Backed Security could be
sold (assuming the simultaneous shipment and sale by the Borrower of
all other Eligible Mortgage-Backed Securities). The weighted average
net purchase price of all Eligible Take-Out Commitments covering
Eligible Mortgage Loans or Eligible Mortgage- Backed Securities in the
Tranche A Borrowing Base shall be determined weekly pursuant to the
commitment status report delivered to the Administrative Agent pursuant
to subsection 7.2(j)(i) absent any error therein (or if such report has
not been delivered to the Administrative Agent as required by such
subsection 7.2(j), such other weighted average net purchase price as
the Administrative Agent shall determine until such report has been
delivered to the Administrative Agent). For purposes of determining the
Applicable Take-Out Price, each commitment status report shall become
effective on the first Business Day of the week immediately following
the week in which such commitment status report is delivered to the
Administrative Agent.
"APPRAISED VALUE": with respect to the Eligible Servicing
Portfolio at any time, the amount determined by an independent
appraiser acceptable to the Administrative Agent as set forth in the
most recent Appraisal delivered to the Administrative Agent pursuant to
subsection 7.2(h), until the next monthly determination described in
clause (ii) below or, if earlier, the delivery of the next succeeding
Appraisal, or (ii) in the case of any determination of Appraised Value
for the purposes hereof made on or after the first
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calendar month-end succeeding delivery of an Appraisal pursuant to
subsection 7.2(h) and prior to the next such delivery pursuant to
subsection 7.2(h), such value, determined as at the same day of each
calendar month occurring during such period (such day to be the first
day of such determination after the Closing Date) and ending most
recently prior to such determination, by applying the percentage value
shown in the most recent Appraisal thereof for each type of investor to
the then unpaid principal balance of the Eligible Servicing Portfolio
attributable to each such type of investor as determined in such recent
Appraisal, all as certified, in the case of determinations in
connection with any Borrowing Date, in the applicable worksheet
accompanying the related Borrowing Notice, and subject to the
discretion of the Administrative Agent to request an Appraisal pursuant
to subsection 7.2(h) to determine such Appraised Value, or (iii) in the
event that any Appraisal has not been delivered to the Administrative
Agent as required by such subsection 7.2(h), such other amount as the
Administrative Agent shall reasonably determine until such Appraisal
has been delivered in form and substance satisfactory to the
Administrative Agent, PROVIDED that in the event that at any time the
Borrower purchases any additional portfolio of servicing rights, the
Borrower may submit a certificate setting forth the adjustment to the
Appraised Value in respect thereof, determined as set forth in clause
(ii) above, and the Administrative Agent may either accept such
adjustment as set forth in such certificate, effective upon such
acceptance, or request an Appraisal to determine the adjustment to
Appraised Value in respect thereof. For purposes of determining the
Appraised Value of the Eligible Servicing Portfolio, (i) each Appraisal
shall become effective on the first Business Day upon which such
Appraisal has been both delivered to and accepted by the Administrative
Agent and shall continue to be effective until such delivery and
acceptance of a new Appraisal, and (ii) each adjustment to Appraised
Value pursuant clause (ii) above shall become effective upon the first
Business Day upon which the certificate described therein has been both
delivered to and accepted by the Administrative Agent and shall
continue to be effective until the earlier of such delivery and
acceptance of the next such monthly adjustment or such delivery and
acceptance of a new Appraisal, PROVIDED that, in the event that, after
delivery and before acceptance of any certificate with respect to any
such adjustment to Appraised Value pursuant to clause (ii), the
Administrative Agent requests a new Appraisal, the Appraised Value in
effect immediately prior to delivery of such certificate shall continue
in effect until the delivery and acceptance of such new Appraisal.
"APPROVED INVESTOR": FNMA, FHLMC, or an investor acceptable to
the Administrative Agent, which acceptable investors are listed (i) on
Schedule II, under the heading "Loan Sales", in the case of Approved
Investors for eligible Collateral under the Tranche A Borrowing Base,
or (ii) on Schedule II, under the heading "Servicing", in the case of
Approved Investors for eligible Collateral under the Tranche B
Borrowing Base, as such Schedule II is supplemented with additional
Persons which, at the request of the Borrower, the Administrative Agent
may, in its discretion, from time to time agree in writing to add
thereto, PROVIDED that by notice to the Borrower, the Administrative
Agent may in its discretion, based on its evaluation of the
creditworthiness or funding ability of any investor listed on Schedule
II, determine that such investor is no longer an Approved Investor,
effective as of the time of such notice to the Borrower (or such other
effective
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time as the Borrower and the Administrative Agent may agree upon) and
PROVIDED FURTHER, that no such determination by the Administrative
Agent that an investor is no longer an Approved Investor shall affect
the value of any assets then included in the Tranche A Borrowing Base
or the Tranche B Borrowing Base as determined in accordance with this
Section 4 unless, in the case of any such assets included in the
Tranche A Borrowing Base, the Administrative Agent determines that the
reasons for such investor no longer being an Approved Investor
materially impair such value of such assets, in which case the
Administrative Agent shall determine the appropriate value of such
asset in accordance with its ordinary practice.
"APPROVED INVESTOR ACKNOWLEDGMENT AGREEMENT": an agreement
pursuant to which an investor (other than FNMA, FHLMC or GNMA)
acknowledges the Lien of the Collateral Agent, for the benefit of the
Secured Parties, on Non-Recourse Servicing Rights relating to Mortgage
Loans sold to or securitized through such investor, in form and
substance satisfactory to the Administrative Agent.
"BMC SERVICING RIGHTS": Direct Servicing Rights owned by BMC
and retained by BMC after the Closing Date (i) with respect to which
all representations and warranties contained in the BMC Security
Agreement applicable thereto are true and correct, (ii) subject to the
Xxxxxxx Subservicing Agreement, dated as of May 31, 1996, between
HomeSide and BMC, as in effect on the Closing Date and (iii) the
aggregate unpaid principal balance of the related mortgage loans in
respect thereof does not exceed $1,225,000,000.
"BOOK-ENTRY MORTGAGE-BACKED SECURITY": a Mortgage-Backed
Security (a) that is not represented by a certificate (other than the
physical security issued to GNMA's nominee, MBSCC & Co., or any
successor thereto, representing a GNMA Mortgage- Backed Security) and
(b) the ownership and transfer of which are entered upon books
maintained for that purpose by a depositary.
"CONVENTIONAL MORTGAGE LOAN": a Mortgage Loan that is not
insured or guaranteed by the United States federal government or any
agency or instrumentality thereof.
"DELIVERED": (a) at any time from the date on which a Positive
Security Event has occurred until the occurrence of a Negative Security
Event, an asset to be included in the Tranche A Borrowing Base or
Tranche B Borrowing Base, as the case may be, shall be deemed
"DELIVERED" hereunder if (i) the representations and warranties
applicable thereto contained in the applicable Security Agreement
(other than those set forth in Section 8(a)(v) thereof) are true and
correct, and (ii) such asset has been described in a Borrowing Base
Certificate delivered to the Administrative Agent, and (b) at any other
time, an asset to be included in the Tranche A Borrowing Base or
Tranche B Borrowing Base, as the case may be, shall be deemed
"DELIVERED" hereunder if (i) the representations and warranties
applicable thereto contained in the applicable Security Agreement
(including, without limitation, those set forth in Section 8(a)(v)
thereof) are true and
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correct and (ii) such asset has been described in a Borrowing Base
Certificate delivered to the Administrative Agent.
"DIRECT SERVICING RIGHTS": the rights of the Borrower or, in
the case of the BMC Servicing Rights, BMC to service Mortgage Loans for
or on behalf of the owner or holder of such Mortgage Loans (including
investors in mortgage-backed securities backed by Mortgage Loans)
pursuant to a direct agreement between the Borrower or BMC, as the case
may be, and an Agency or such owner or holder. In furtherance and not
in limitation of the foregoing, subservicing rights (other than BMC
Servicing Rights to the extent set forth herein) shall not constitute
Direct Servicing Rights.
"ELIGIBLE DEFAULT-RELATED ADVANCE": an advance made by the
Borrower (which advance has not been repaid or reimbursed to the
Borrower) to inspect, protect, preserve or repair a Property subject to
a Mortgage Loan that is in default and which is serviced or, in the
case of the BMC Servicing Rights, subserviced, by the Borrower, or for
similar or related purposes, as required by the FNMA Guide, the FHLMC
Guide or other Approved Investor guidelines or as a prudent servicer
would reasonably deem appropriate, including, but not limited to,
necessary legal fees and costs expended for foreclosure, bankruptcy,
eviction or litigation actions as well as costs to obtain clear title.
"ELIGIBLE DEFAULT-RELATED ADVANCE RECEIVABLES": on any date,
the aggregate amount reasonably expected to be recovered by the
Borrower from the applicable mortgagors in respect of Eligible
Default-Related Advances outstanding as of such date if such mortgagors
reinstate, pay off or redeem the related Mortgage Loans or from the
FHA, the VA or the applicable Approved Investor, as the case may be,
upon liquidation of such Mortgage Loans (such amount not to exceed the
amount advanced by the Borrower under the related Eligible
Default-Related Advances), other than such receivables that have been
included in the Tranche B Borrowing Base for a period of more than 18
months (which period shall be extended to 3 years for receivables
relating to Mortgage Loans with respect to which the related mortgagor
is the subject of a bankruptcy proceeding).
"ELIGIBLE EARLY BUYOUT ADVANCE": an advance made by the
Borrower (which advance has not been repaid or reimbursed to the
Borrower) which does not yet qualify as an Eligible Foreclosure
Advance: to repurchase an FHA-insured or VA-guaranteed first priority
Mortgage Loan or a first priority Conventional Mortgage Loan which is
an Eligible Mortgage Loan (except for its failure to satisfy the
requirements of subsections (d) and (e) of the definition of the term
"Eligible Mortgage Loan", as a result of the default thereunder), in
each case (i) which has (A) a mortgagor who has voluntarily surrendered
to the Borrower possession of the Property securing such Mortgage Loan,
or (B) any payment 90 days or more past due and the Borrower has
reasonably determined that the reinstatement of such Mortgage Loan to a
current status is unlikely, (ii) which has been repurchased by the
Borrower out of a pool of Mortgage Loans underlying GNMA, FNMA or FHLMC
Mortgage-Backed Securities or issued by an Approved Investor, and (iii)
during any Negative Security Period (commencing two Business Days after
the first
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day of such Negative Security Event) with respect to which the Required
Documentation described in clauses 1 and 3 of ATTACHMENT 2 to the
Borrower Security Agreement has been delivered to the Collateral Agent
on or prior to the funding of a Tranche B Loan, the proceeds of which
are used to reimburse the Borrower for such advance.
"ELIGIBLE EARLY BUYOUT ADVANCE RECEIVABLES": on any date, the
aggregate amount receivable by the Borrower from the FHA, the VA or the
applicable Approved Investor, as the case may be, as of such date as
reimbursement of Eligible Early Buyout Advances (such amount not to
exceed the aggregate amount of principal and accrued interest due under
the related Mortgage Loans repurchased with the proceeds of such
Eligible Early Buyout Advances as of the date of repurchase of such
Mortgage Loans by the Borrower), other than such receivables (a) that
have been included in the Tranche B Borrowing Base for a period of more
than 18 months (which period shall be extended to 3 years for
receivables relating to Mortgage Loans with respect to which the
related mortgagor is the subject of a bankruptcy proceeding), (b)
created in connection with an Eligible Early Buyout Advance with
respect to a Mortgage Loan as to which Mortgage Loan notice or other
indication has been given by the FHA, the VA or the applicable Approved
Investor, as the case may be, challenging its obligation to pay the
full amount due in connection therewith, including such amount due on
any insurance or guaranty certificate issued or made in connection
therewith, or (c) created in connection with an Eligible Early Buyout
Advance with respect to a Mortgage Loan that has been reinstated,
redeemed or classified a "No-Bid" by the VA, PROVIDED that such
receivables described in this clause (c) shall not cease to be Eligible
Early Buyout Advance Receivables until the earlier to occur of (i) the
Borrower's obtaining knowledge of such reinstatement, redemption or
classification, and (ii) the 10th day following such reinstatement,
redemption or classification.
"ELIGIBLE FIRST MORTGAGE LOAN": an Eligible Mortgage Loan that
(a)(i) is either FHA-insured or VA-guaranteed or (ii) fully conforms to
all underwriting and other requirements of an Approved Investor and has
an original principal balance not exceeding $1,500,000 (provided that
Eligible Mortgage Loans that are covered by an Eligible Take-Out
Commitment from an Approved Investor may have an original principal
balance of up to $5,000,000), (b) is covered by one or more Eligible
Take- Out Commitments or by a Hedge Contract, PROVIDED that if such
Mortgage Loan has an original principal balance in excess of
$1,000,000, such Mortgage Loan must be covered by and allocated to one
or more specific Eligible Take-Out Commitments, (c) has not been
included in the Tranche A Borrowing Base for a period of more than 180
days, and (d) satisfies the requirements of clause (i) of paragraph (b)
of the definition of Eligible Mortgage Loan.
"ELIGIBLE FORECLOSURE ADVANCE": an advance made by the
Borrower (which advance has not been repaid or reimbursed to the
Borrower): to repurchase an FHA- insured or VA-guaranteed first
priority Mortgage Loan or a first priority Conventional Mortgage Loan
out of a pool of Mortgage Loans underlying GNMA, FNMA or FHLMC
Mortgage-Backed Securities or mortgage-backed securities issued by an
Approved Investor, in each case for which a foreclosure sale has been
completed or a deed in lieu of
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foreclosure has been executed and for which a claim against the FHA,
the VA or the applicable Approved Investor has been filed or is in
process.
"ELIGIBLE FORECLOSURE ADVANCE RECEIVABLES": on any date, the
aggregate amount receivable by the Borrower from the FHA, the VA, or
the applicable Approved Investor, as the case may be, as of such date
as reimbursement of Eligible Foreclosure Advances (such amount not to
exceed the aggregate amount of principal and accrued interest due with
respect to the related Mortgage Loans as of the date of repurchase of
such Mortgage Loans by the Borrower), other than such receivables (a)
that have been included in the Tranche B Borrowing Base for a period of
more than 18 months (which period shall be extended to 3 years for
receivables relating to Mortgage Loans with respect to which the
related mortgagor is the subject of a bankruptcy proceeding) or (b)
created in connection with an Eligible Foreclosure Advance with respect
to a Mortgage Loan as to which Mortgage Loan notice or other indication
has been given by the FHA, the VA or the applicable Approved Investor,
as the case may be, challenging its obligation to pay the full amount
due in connection therewith, including such amount due on any insurance
or guaranty certificate issued or made in connection therewith.
"ELIGIBLE MORTGAGE-BACKED SECURITY": a Mortgage-Backed
Security owned by the Borrower with respect to which each of the
following statements is true and correct:
(a) such Mortgage-Backed Security is a valid and
binding obligation of the Obligor thereon, is in full force
and effect and is enforceable in accordance with its terms;
(b) such Mortgage-Backed Security is free of any
default and from any rescission, cancellation or avoidance,
and all rights thereof, whether by operation of law or
otherwise;
(c) during any Negative Security Period, such
Mortgage-Backed Security has either been deposited with and is
held by the Collateral Agent or an agent, bailee and custodian
of the Collateral Agent under the Borrower Security Agreement
(or by a Person who has executed a custodial agreement
acceptable to the Administrative Agent and the Collateral
Agent), properly endorsed in blank for transfer or, if such
Mortgage-Backed Security is a Book- Entry Mortgage-Backed
Security, such Mortgage-Backed Security is the subject of a
Perfected Assignment;
(d) such Mortgage-Backed Security is free and clear
of all liens, encumbrances, charges, rights and interests of
any kind (other than Eligible Take-Out Commitments), except in
favor of the Collateral Agent, for the benefit of the Secured
Parties; and
(e) such Mortgage-Backed Security is covered by and
allocated to one or more specific Eligible Take-Out
Commitments.
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"ELIGIBLE MORTGAGE LOAN": a Mortgage Loan owned by the
Borrower with respect to which each of the following statements is true
and correct:
(a) such Mortgage Loan is a binding and valid
obligation of the Obligor thereon, is in full force and effect
and is enforceable in accordance with its terms;
(b) such Mortgage Loan is secured by (i) a first
priority mortgage (or deed of trust) on the Property
encumbered thereby, or (ii) a second priority mortgage (or
deed of trust) on the Property encumbered thereby;
(c) such Mortgage Loan is genuine in all respects as
appearing on its face or as represented in the books and
records of the Borrower, and all information set forth therein
is true and correct;
(d) such Mortgage Loan is free of any material
default (other than as permitted in subsection (e) below) of
any party thereto (including the Borrower), counterclaims,
offsets and defenses and from any rescission, cancellation or
avoidance, and all rights thereof, whether by operation of law
or otherwise;
(e) no payment under such Mortgage Loan is more than
thirty (30) days past due the payment due date set forth in
the underlying promissory note and mortgage (or deed of
trust);
(f) the underlying mortgage (or deed of trust) for
such Mortgage Loan and promissory note, together with any
related note modification agreement, contain the entire
agreement of the parties thereto with respect to the subject
matter thereof, have not been modified or amended in any
respect and such Mortgage Loan is free of concessions or
understandings with the Obligor thereon of any kind not
expressed in writing therein;
(g) such Mortgage Loan is in all respects in
accordance with all applicable laws and regulations governing
the same, including the federal Consumer Credit Protection 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 such Mortgage Loan have
been given and performed as required;
(h) all advance payments and other deposits on such
Mortgage Loan have been paid in cash, and no part of such sums
has been loaned, directly or indirectly, by the Borrower to
the Obligor thereon;
(i) such Mortgage Loan is free and clear of all
liens, encumbrances, charges, rights and interests of any kind
(other than Take-Out Commitments),
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except in favor of the Collateral Agent, for the benefit of
the Secured Parties, under the Borrower Security Agreement;
(j) the Property encumbered by such Mortgage Loan is
insured against loss or damage by fire and all other hazards
normally included within standard extended insurance coverage
(including flood plain insurance if such Property is located
in a federally designated flood plain) in accordance with the
provisions of such Mortgage Loan with the Borrower and its
assigns named as a loss payee thereon;
(k) the Property encumbered by such Mortgage Loan is
free and clear of all Liens other than Liens in favor of the
Borrower which have been assigned by the Borrower to the
Collateral Agent, for the benefit of the Secured Parties,
under the Borrower Security Agreement, except (A) in the case
of first priority Mortgage Loans, junior Liens permitted by
the Agency Guides or the underwriting criteria of other
Approved Investors for Mortgage Loans conforming to the
requirements of the applicable Agency Guide or Approved
Investor guidelines, (B) in the case of second priority
Mortgage Loans, a first priority Lien or junior Liens
permitted by the Agency Guides or the underwriting criteria of
other Approved Investors for Mortgage Loans conforming to the
requirements of the applicable Agency Guide or Approved
Investor guidelines, and (C) in the case of all Mortgage
Loans:
(i) Liens in respect of real property
taxes and assessments not yet due and payable;
(ii) covenants, conditions and
restrictions, rights of way, easements and other
matters of public record, as of the date of
recording, being acceptable to mortgage lending
institutions generally and specifically referred to
in a lender's title insurance policy delivered to the
originator of such Mortgage Loan and (A) referred to
or otherwise considered in the appraisal (if any)
made for the originator of such Mortgage Loan or (B)
that do not materially adversely affect the appraised
value of such Property as set forth in such appraisal
(if any);
(iii) other matters to which like
properties are commonly subject that do not
materially interfere with the benefits of the
security intended to be provided by such Mortgage
Loan or the use, enjoyment, value or marketability of
the related Property; and
(iv) subordinate financing and liens
that would be permitted title exceptions pursuant to
the applicable Agency Guide or the underwriting
criteria of other Approved Investors for Mortgage
Loans conforming to the requirements of the
applicable Agency Guide or Approved Investor
guidelines;
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(l) if the promissory note for such Mortgage Loan (or
any other documentation relating thereto) has been withdrawn
from the possession of the Collateral Agent on the terms and
subject to the conditions set forth in Section 6 of the
Borrower Security Agreement, (i) such note or other
documentation has been released to the Borrower in accordance
with Section 6(a) of the Borrower Security Agreement and such
release has occurred within the immediately preceding fourteen
(14) days, PROVIDED that if the aggregate value (determined in
accordance with subsection 4.1) of Mortgage Loans for which
such notes or other documentation have been released as
provided above exceeds 1% of the Tranche A Commitment Amount
less the HonoMo Tranche A Sublimit at such time, in the case
of the HomeSide Tranche A Borrowing Base, or of the HonoMo
Tranche A Sublimit, in the case of the HonoMo Tranche A
Borrowing Base, such excess shall be deducted from the Tranche
A Borrowing Base, (ii) the promissory note and any related
documentation for such Mortgage Loan has been shipped by the
Collateral Agent directly to an Approved Investor for purchase
in accordance with Section 6(b) of the Borrower Security
Agreement and such shipment has occurred within the
immediately preceding forty-five (45) days, or (iii) the
promissory note and any related documentation for such
Mortgage Loan has been shipped by the Collateral Agent to a
Certificating Custodian in accordance with Section 6(e) of the
Borrower Security Agreement and such shipment has occurred
within the immediately preceding ten (10) days if Section
6(e)(i) of the Borrower Security Agreement is applicable or
within the immediately preceding forty-five (45) days if
Section 6(e)(ii) of the Borrower Security Agreement is
applicable;
(m) with respect to first priority Conventional
Mortgage Loans, if the Loan-to-Value Ratio of such Mortgage
Loan exceeds eighty percent (80%), such Mortgage Loan is the
subject of a private mortgage insurance policy issued in favor
of the Borrower by an insurer approved by an Agency or by the
applicable Approved Investor;
(n) except as provided in clause (ii) of the first
proviso to subsection 4.1, the date of the promissory note (or
related note modification agreement) related to such Mortgage
Loan is no earlier than one hundred and eighty (180) days
prior to the date such Mortgage Loan was first included in the
Tranche A Borrowing Base;
(o) if such Mortgage Loan is FHA-insured or
VA-guaranteed, such insurance or guaranty is in full force and
effect (or there exists a binding commitment to issue such
insurance or guaranty subject to the satisfaction of customary
conditions);
(p) (i) the Collateral Agent (other than during the
first two Business Days of any Negative Security Period then
in effect) or, at any time other than during any Negative
Security Period, the applicable Borrower, shall have
received for such Mortgage Loan, prior to or simultaneously
with its inclusion in the
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Tranche A Borrowing Base, the Required Documentation for such
Mortgage Loan described on ATTACHMENT 2 to the Borrower
Security Agreement (PROVIDED that if the Collateral Agent (or
the applicable Borrower, at any time other than during a
Negative Security Period) fails to receive such Required
Documentation for such Mortgage Loan prior to or
simultaneously with its inclusion in the Tranche A Borrowing
Base, then (A) the Collateral Agent (or the Administrative
Agent, at any time other than during a Negative Security
Period) shall have received a Tranche A Borrowing Base
Addition Report in the form attached to the Borrower Security
Agreement as ATTACHMENT 1 relating to such Mortgage Loan prior
to or simultaneously with such Mortgage Loan's inclusion
therein; and (B) the Collateral Agent or, at any time other
than during any Negative Security Period, the applicable
Borrower, shall receive such Required Documentation within 10
days after such Mortgage Loan's inclusion in the Tranche A
Borrowing Base), (ii) the Borrower holds in trust for the
Secured Parties those items described on ATTACHMENT 2 to the
Borrower Security Agreement, and (iii) during any Negative
Security Period (other than the first two Business Days after
the commencement thereof), there has been delivered to the
Collateral Agent, if the Collateral Agent has so requested in
writing, the additional items described on ATTACHMENT 8 to the
Borrower Security Agreement;
(q) except for the existence of a commitment to sell
such Mortgage Loan on a servicing-released basis, such
Mortgage Loan is not subject to any servicing arrangement with
any Person other than HomeSide nor are any servicing rights
relating to such Mortgage Loan subject to any lien, claim,
interest or negative pledge in favor of any Person other than
as permitted hereunder;
(r) if an appraisal is required by the applicable
Approved Investor, the appraisal obtained by the Borrower in
connection with the origination of such Mortgage Loan
satisfies all appraisal requirements of such Approved
Investor; and
(s) the improvements on the Property encumbered by
such Mortgage Loan consist of a completed one- to four-family
residence (other than a mobile home or other temporary housing
facility).
"ELIGIBLE P&I ADVANCE": an advance of principal and interest
made by the Borrower (which advance has not been repaid or reimbursed
to the Borrower) pursuant to the Borrower's obligation to do so under a
servicing agreement or, in the case of the BMC Servicing Rights,
subservicing agreement, as the case may be, in respect of Non- Recourse
Servicing Rights with respect to the servicing of first priority
Mortgage Loans, which advance is reimbursable by the FHA, the VA or the
applicable Approved Investor, and which advance was made not more than
thirty (30) days prior to the date on which the determination of
whether such advance is an Eligible P&I Advance is made.
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"ELIGIBLE P&I ADVANCE RECEIVABLES": on any date, the aggregate
amount receivable by the Borrower from the FHA, the VA or the
applicable Approved Investor, as the case may be, as of such date as
reimbursement of Eligible P&I Advances (such amount not to exceed the
amount advanced by the Borrower under the related Eligible P&I
Advances), other than such receivables (a) created in connection with
an Eligible P&I Advance with respect to a Mortgage Loan as to which
Mortgage Loan notice or other indication has been given by the FHA or
the VA challenging its obligation to pay the full amount due on any
insurance or guaranty certificate, or (b) created in connection with an
Eligible P&I Advance with respect to a Mortgage Loan, which Eligible
P&I Advance is reimbursable by an Approved Investor and notice or other
indication has been given by such Approved Investor challenging its
obligation to pay the full amount due in connection with such Mortgage
Loan.
"ELIGIBLE PAID-IN-FULL BUYOUT ADVANCE": an advance made by the
Borrower (which advance has not been repaid or reimbursed to the
Borrower): (a) to repurchase an FHA-insured or VA-guaranteed first
priority Mortgage Loan or first priority Conventional Mortgage Loan
constituting an Eligible Mortgage Loan which has (i) a mortgagor who
has indicated intent to liquidate the Mortgage Loan through a payoff,
(ii) no delinquent payments over 30 days in the past 12 months and
(iii) a confirmed closing date through an authorized closing agent, (b)
during any Negative Security Period (commencing two Business Days after
the first day of such Negative Security Period), in respect of which
the Required Documentation described on ATTACHMENT 2 to the Borrower
Security Agreement has been delivered to the Collateral Agent as
required thereunder, and (c) which is fully reimbursable by the
applicable mortgagor or authorized closing agent.
"ELIGIBLE PAID-IN-FULL BUYOUT ADVANCE RECEIVABLES": on any
date, the aggregate amount receivable by the Borrower from the
applicable mortgagors or authorized closing agents as of such date as
reimbursement of Eligible Paid-in-Full Buyout Advances (such amount not
to exceed the aggregate amount of principal due as of such date under
the Mortgage Loans repurchased with the proceeds of such Eligible
Paid-in-Full Buyout Advances together with interest accruing to but not
including the confirmed closing date for the payoff of each such
Mortgage Loan), other than such receivables (a) that have been included
in the Tranche B Borrowing Base for a period of more than 60 days, or
(b) created in connection with an Eligible Paid-in-Full Buyout Advance
with respect to a Mortgage Loan as to which Mortgage Loan notice or
other indication has been given by the mortgagor thereof or closing
agent challenging its intent to pay the full amount due in connection
with such Mortgage Loan.
"ELIGIBLE SECOND MORTGAGE LOAN": an Eligible Mortgage Loan
that (a)(i) is either FHA-insured or VA-guaranteed, or (ii) fully
conforms to all underwriting and other requirements of an Approved
Investor and has an original principal balance not exceeding $300,000,
(b) is covered by one or more Eligible Take-Out Commitments or covered
by a Hedge Contract, PROVIDED that if such Mortgage Loan is a
Nonconforming Mortgage Loan, such Mortgage Loan must be covered by and
allocated to one or more specific
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Eligible Take-Out Commitments, (c) has not been included in the Tranche
A Borrowing Base for a period of more than 60 days, (d) has a
Loan-to-Value Ratio not greater than 95%, and (e) satisfies the
requirements of clause (ii) of paragraph (b) of the definition of
Eligible Mortgage Loan.
"ELIGIBLE SERVICING PORTFOLIO": Non-Recourse Servicing Rights
(a) for Mortgage Loans which are no more than 90 days delinquent,
whether underlying Mortgage-Backed Securities or held as whole loans,
(b) in respect of which Acknowledgment Agreements (as applicable
thereto pursuant to the definition of Acknowledgment Agreements) are in
full force and effect and have been delivered to the Collateral Agent
and the Administrative Agent, and (c) in respect of which true and
correct copies of the contracts or agreements relating to or from which
such Non-Recourse Servicing Rights arise, together with all amendments,
modifications and supplements thereto, have been delivered to the
Administrative Agent and are in form and substance satisfactory to the
Administrative Agent, if such Non-Recourse Servicing rights are for
Mortgage Loans other than those serviced for or on behalf of an Agency;
PROVIDED that in the case of any Acknowledgement Agreements referred to
in clause (b) above in effect immediately prior to the Closing Date
that the Administrative Agent determines should be re-executed or
confirmed, such Non- Recourse Servicing Rights shall not be deemed to
be ineligible solely by virtue of such requirement so long as such
re-execution or confirmation is accomplished within 30 days after the
Closing Date.
"ELIGIBLE SERVICING RECEIVABLES": collectively, Eligible
Default-Related Advance Receivables, Eligible Early Buyout Advance
Receivables, Eligible Foreclosure Advance Receivables, Eligible P&I
Advance Receivables, Eligible Paid-in- Full Buyout Advance Receivables,
and Eligible T&I Advance Receivables.
"ELIGIBLE TAKE-OUT COMMITMENT": a Take-Out Commitment with
respect to which each of the following statements is true and correct:
(a) the Borrower and the Eligible Mortgage Loans or
Eligible Mortgage-Backed Securities that are the subject of
such Take-Out Commitment are in full compliance therewith; and
(b) such Take-Out Commitment is in full force and
effect and pledged to the Collateral Agent, for the benefit of
the Secured Parties, under the Borrower Security Agreement.
"ELIGIBLE T&I ADVANCE": an advance made by the Borrower (which
advance has not been repaid or reimbursed to the Borrower) of tax and
insurance escrow amounts (a) required to be paid by the Borrower, as
servicer, or, in the case of the BMC Servicing Rights, subservicer,
under a first priority Mortgage Loan as a result of
an increase in the related taxes and/or insurance premiums owing by the
mortgagor, which increased amounts are to be recovered subsequently
from the mortgagor in accordance with the Real Estate Settlement
Procedures Act of 1974, as amended, or (b) required to be, but
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not, paid by the mortgagor under a first priority Mortgage Loan
serviced by the Borrower, which advance is made by the Borrower
pursuant to the Borrower's obligation to do so under a servicing
agreement or, in the case of the BMC Servicing Rights, subservicing
agreement, as the case may be, in respect of Non- Recourse Servicing
Rights and, in the case of each of clauses (a) and (b) above, eligible
for reimbursement by the FHA, the VA, or the applicable Approved
Investor.
"ELIGIBLE T&I ADVANCE RECEIVABLES": on any date, the aggregate
amount receivable by the Borrower from the applicable mortgagor, the
FHA, the VA or the applicable Approved Investor, as the case may be, as
of such date as reimbursement of Eligible T&I Advances (such amount not
to exceed the amount advanced by the Borrower under the related
Eligible T&I Advances), other than such receivables (a) that have been
included in the Tranche B Borrowing Base for a period of more than 18
months (which period shall be extended to 3 years for receivables
relating to Mortgage Loans with respect to which the related mortgagor
is the subject of a bankruptcy proceeding), (b) created in connection
with an Eligible T&I Advance with respect to a Mortgage Loan as to
which Mortgage Loan notice or other indication has been given by the
FHA or the VA challenging its obligation to pay the full amount due on
any insurance or guaranty certificate, or (c) created in connection
with an Eligible T&I Advance with respect to a Mortgage Loan, which
Eligible T&I Advance is reimbursable by an Approved Investor and notice
or other indication has been given by such Approved Investor
challenging its obligation to pay the full amount due in connection
with such Mortgage Loan.
"ELIGIBLE WET LOANS": the collective reference to Eligible Wet
First Loans and Eligible Wet Second Loans.
"ELIGIBLE WET FIRST LOAN": an Eligible First Mortgage Loan of
the type described in the proviso to clause (i) of paragraph (p) of the
definition of Eligible Mortgage Loan.
"ELIGIBLE WET SECOND LOAN": an Eligible Second Mortgage Loan
of the type described in the proviso to clause (i) of paragraph (p) of
the definition of Eligible Mortgage Loan.
"FHA": the United States Federal Housing Administration and
any successor thereto.
"FHLMC ACKNOWLEDGMENT AGREEMENT": an agreement pursuant to
which FHLMC acknowledges the Lien of the Collateral Agent, on behalf of
the Secured Parties, on Non-Recourse Servicing Rights relating to
Mortgage Loans sold to or securitized through FHLMC, in form and
substance as is customarily provided by FHLMC in agreements of its kind
on its date of execution (or any successor agreement thereto) and
acceptable to the Administrative Agent.
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"FHLMC GUIDE": the "Sellers' & Servicers' Guide" published by
FHLMC, as amended, modified or supplemented from time to time.
"FHLMC MORTGAGE-BACKED SECURITIES": any security (including a
participation certificate) issued by FHLMC that represents an interest
in a pool of Mortgage Loans.
"FNMA ACKNOWLEDGMENT AGREEMENT": an agreement pursuant to
which FNMA acknowledges the Lien of the Collateral Agent, on behalf of
the Secured Parties, on Non-Recourse Servicing Rights relating to
Mortgage Loans sold to or securitized through FNMA, in form and
substance as is customarily provided by FNMA in agreements of its kind
on its date of execution (or any successor agreement thereto) and
acceptable to the Administrative Agent.
"FNMA GUIDE": collectively, the "Selling Guide" and the
"Servicing Guide" published by FNMA, as amended, modified or
supplemented from time to time.
"FNMA MORTGAGE-BACKED SECURITIES": any security (including a
participation certificate) issued by FNMA that represents an interest
in a pool of Mortgage Loans.
"GNMA ACKNOWLEDGMENT AGREEMENT": at all times subsequent to
the date hereof that GNMA enters into such agreements and such
agreement is available to the Borrower and in a form acceptable to the
Administrative Agent, an agreement pursuant to which GNMA acknowledges
the Lien of the Collateral Agent, on behalf of the Secured Parties, on
Non-Recourse Servicing Rights relating to Mortgage Loans securitized
through GNMA.
"GNMA GUIDE": collectively, the "GNMA I Mortgage-Backed
Securities Guide" and the "GNMA II Mortgage-Backed Securities Guide"
published by the Department of Housing and Urban Development, as
amended, modified or supplemented from time to time.
"GNMA MORTGAGE-BACKED SECURITIES": any security (including a
participation certificate) guaranteed by GNMA that represents an
interest in a pool of Mortgage Loans.
"HEDGE CONTRACT": in respect of any Mortgage Loans,
Mortgage-Backed Securities or servicing rights for Mortgage Loans, a
contract to buy or sell an instrument on the futures market, cash
forward market, private investor whole-loan market or options market,
or an option or financial future purchased over the counter for future
delivery of such instrument, in respect of interest rate risks
associated with such Mortgage Loans, Mortgage-Backed Securities and
servicing rights.
"LOAN-TO-VALUE RATIO": for any Mortgage Loan, the percentage
represented by the sum of the initial principal amount of the first
and, if applicable, second priority Mortgage Loans outstanding in
respect of the Property encumbered thereby at the origination thereof
in relation to the lesser of (a) the appraised value of the Property
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encumbered thereby (as set forth in the appraisal, if any, delivered in
connection with the origination of such Mortgage Loan) and (b) the most
recent value assigned to such Property pursuant to the requirements of
the applicable Approved Investor.
"MORTGAGE LOAN": a one- to four-family residential real
estate-secured loan.
"MORTGAGE-BACKED SECURITIES": the collective reference to
FHLMC Mortgage- Backed Securities, FNMA Mortgage-Backed Securities and
GNMA Mortgage-Backed Securities.
"NONCONFORMING MORTGAGE LOAN": an Eligible First Mortgage Loan
or an Eligible Second Mortgage Loan that fully conforms to all
underwriting and other requirements of an Approved Investor other than
FNMA, FHLMC or GNMA.
"NON-RECOURSE SERVICING RIGHTS": Direct Servicing Rights owned
by the Borrower or, in respect of the BMC Servicing Rights, BMC,
relating to Mortgage Loans in respect of which the Borrower, as
servicer or, in the case of the BMC Servicing Rights, subservicer,
bears no general risk of payment default by the mortgagor thereunder,
PROVIDED that (i) servicing rights owned by the Borrower or, in the
case of the BMC Servicing Rights, BMC relating to Mortgage Loans
guaranteed by the VA shall constitute Non-Recourse Servicing Rights
notwithstanding the classification of such Mortgage Loans as "No Bids"
by the VA, and (ii) servicing rights owned by the Borrower or, in the
case of the BMC Servicing Rights, BMC, which would otherwise not
constitute Non-Recourse Servicing Rights shall constitute Non-Recourse
Servicing Rights to the extent that the Borrower, as servicer or
subservicer, in the case of the BMC Servicing Rights, is fully
indemnified by The First National Bank of Boston or Xxxxxxx against the
risk of payment default by the mortgagors under the related Mortgage
Loans in accordance with indemnification agreements in form and
substance satisfactory to the Administrative Agent.
"OBLIGOR": the Person or Persons obligated to pay the
indebtedness that is the subject of a Mortgage Loan or Mortgage-Backed
Security, including any guarantor of such indebtedness.
"PERFECTED ASSIGNMENT": with respect to any Book-Entry
Mortgage-Backed Security, such Book-Entry Mortgage-Backed Security has
been transferred to the Collateral Agent or any entity designated by
the Collateral Agent so that the Collateral Agent or such entity may
maintain such Book-Entry Mortgage-Backed Security as depositary in one
of its book-entry accounts with a Federal Reserve Bank or the
Participants Trust Company and a pledge to the Collateral Agent for the
benefit of the Secured Parties has been registered with the Collateral
Agent or such entity, or the Borrower has taken such other actions as
the Administrative Agent or the Collateral Agent may reasonably request
to perfect, protect and maintain the valid, perfected and first
priority security interest of the Collateral Agent, for the benefit of
the Secured Parties, in such Book-Entry Mortgage-Backed Security.
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"PROPERTY": the real property, including the improvements
thereon, and the personal property (tangible and intangible) that are
encumbered pursuant to a Mortgage Loan.
"REQUIRED DOCUMENTATION": in respect of any Mortgage Loan,
Mortgage-Backed Security or Eligible Servicing Receivable, the set of
instruments and documents applicable thereto described in the
applicable Security Agreement that is required to be delivered to the
Collateral Agent thereunder in connection with such Mortgage Loan,
Mortgage-Backed Security or Eligible Servicing Receivable, and such
other documents related thereto as the Collateral Agent or the
Administrative Agent may from time to time reasonably require.
"SECURED PARTIES": as defined in Section 1 of the each of the
Security Agreements.
"SERVICING ADVANCE PORTION": that portion of the Tranche B
Borrowing Base, determined under subsection 4.2, attributable to
clauses (a) through (f) of subsection 4.2.
"SERVICING PORTFOLIO PORTION": that portion of the Tranche B
Borrowing Base, determined under subsection 4.2, attributable to clause
(g) of subsection 4.2.
"TAKE-OUT COMMITMENT": with respect to any Eligible Mortgage
Loan or Eligible Mortgage-Backed Security included in the Tranche A
Borrowing Base, one or more BONA FIDE current, unfilled and unexpired
commitments of an Approved Investor, issued in favor of and owned by
the Borrower, under which such Approved Investor agrees to purchase, at
a specified price, an aggregate amount and type of (i) Mortgage Loans
which includes such Eligible Mortgage Loan or (ii) Mortgage-Backed
Securities which includes such Eligible Mortgage-Backed Securities.
"VA": the United States Veteran's Administration and any
successor thereto.
4.4 WAIVER OF REQUIREMENTS; XXXX-TO-MARKET. Notwithstanding
the provisions of subsections 4.1, 4.2 and 4.3, (a) the Administrative Agent is
hereby authorized by the Lenders to grant waivers, in its sole discretion, of
any of the requirements for eligibility regarding qualification of Mortgage
Loans, Mortgage-Backed Securities, Eligible Servicing Receivables and/or
Non-Recourse Servicing Rights for inclusion in either Tranche A Borrowing Base
or either Tranche B Borrowing Base, as applicable, PROVIDED that, at any time,
the aggregate value (as determined in accordance with this Section 4) of all
such Mortgage Loans, Mortgage-Backed Securities, Eligible Servicing Receivables
and/or Non-Recourse Servicing Rights accepted by the Administrative Agent as
eligible for inclusion in such Tranche A Borrowing Base or such Tranche B
Borrowing Base, as applicable, pursuant to such waivers shall not exceed
$50,000,000 in the aggregate, and (b) if a Default or Event of Default has
occurred and is continuing, the value of each Eligible Mortgage Loan or Eligible
Mortgage-Backed Security shall be equal to the applicable advance rate as set
forth in the applicable provision of subsection 4.1 multiplied by the product of
(i) the market price for 30-day mandatory future delivery of such Eligible
Mortgage Loan or Eligible Mortgage-Backed Security quoted by Telerate or, if not
so quoted, the average
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bid price quoted in writing to the Administrative Agent as of the computation
date in respect thereof by any two nationally recognized dealers reasonably
selected by the Administrative Agent who, at such time, are making a market in
similar Mortgage Loans or Mortgage-Backed Securities, as the case may be,
multiplied by (ii) the unpaid principal amount or face amount, respectively,
thereof.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans, each Borrower hereby represents and
warrants to the Administrative Agent and each Lender that:
5.1 FINANCIAL CONDITION. (a) The consolidated balance sheet of
HomeSide and its consolidated Subsidiaries as at December 31, 1995, and the
related consolidated statements of income and of cash flows for the fiscal year
ended on such date, reported on by Coopers & Xxxxxxx, LLP, copies of which have
heretofore been furnished to each Lender, are complete and correct and present
fairly the consolidated financial condition of HomeSide and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the fiscal year then ended. The
consolidated balance sheet of HomeSide and its consolidated Subsidiaries as at
March 15, 1996 and November 30, 1996, and the related consolidated statements of
income and of cash flows for the periods ended on such dates, certified by
Responsible Officer, copies of which have heretofore been furnished to each
Lender, are complete and correct and present fairly the consolidated financial
condition of HomeSide and its consolidated Subsidiaries as at such dates, and
the consolidated results of their operations and their consolidated cash flows
for the periods then ended (subject to normal year-end adjustments). All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by such accountants or Responsible Officer,
as the case may be, and as disclosed therein). Except for those items set forth
on Schedule 5.1, neither HomeSide nor any of its consolidated Subsidiaries had,
at the date of the most recent balance sheet referred to above, any material
Guarantee Obligation, material contingent liability or material liability for
taxes, or any material long-term lease or material unusual forward or long-term
commitment, including, without limitation, any interest rate or foreign currency
swap or exchange transaction, which is not reflected in the foregoing statements
or in the notes thereto. During the period from December 31, 1995 to and
including the date hereof there has been no sale, transfer or other disposition
by HomeSide or any of its consolidated Subsidiaries of any material part of its
business or property and no purchase or other acquisition of any business or
property (including any capital stock of any other Person) material in relation
to the consolidated financial condition of HomeSide and its consolidated
Subsidiaries at December 31, 1995, other than pursuant to and in accordance with
the BBMC Stock Purchase Agreement as in effect on the BBMC Closing Date and the
BMC Stock Purchase Agreement as in effect on the BMC Closing Date.
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(b) The consolidated balance sheet of BMC and its consolidated
Subsidiaries as at December 31, 1995, and the related consolidated statements of
income and of cash flows for the fiscal year ended on such date, reported on by
Xxxxxx Xxxxxxxx LLP, copies of which have heretofore been furnished to each
Lender, are complete and correct and present fairly the consolidated financial
condition of BMC and its consolidated Subsidiaries as at such date, and the
consolidated results of their operations and their consolidated cash flows for
the fiscal year then ended. The consolidated balance sheets of BMC and its
consolidated Subsidiaries as at March 31, 1996 and November 30, 1996, and the
related consolidated statements of income and of cash flows for the periods
ended, certified by a Responsible Officer, copies of which have heretofore been
furnished to each Lender, are complete and correct and present fairly the
consolidated financial condition of BMC and its consolidated Subsidiaries as at
such dates, and the consolidated results of their operations and their
consolidated cash flows for the periods then ended (subject to normal year-end
adjustments). All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by such accountants or
Responsible Officer, as the case may be, and as disclosed therein). Except for
those items set forth on Schedule 5.1, neither BMC nor any of its consolidated
Subsidiaries had, at the date of the most recent balance sheet referred to
above, any material Guarantee Obligation, material contingent liability or
material liability for taxes, or any material long-term lease or material
unusual forward or material long-term commitment, including, without limitation,
any interest rate or foreign currency swap or exchange transaction, which is not
reflected in the foregoing statements or in the notes thereto. During the period
from December 31, 1995 to and including the date hereof there has been no sale,
transfer or other disposition by BMC or any of its consolidated Subsidiaries of
any material part of its business or property and no purchase or other
acquisition of any business or property (including any capital stock of any
other Person) material in relation to the consolidated financial condition of
BMC and its consolidated Subsidiaries at December 31, 1995, other than pursuant
to and in accordance with the BBMC Stock Purchase Agreement as in effect on the
BBMC Closing Date and the BMC Stock Purchase Agreement as in effect on the BMC
Closing Date.
(c) The consolidated balance sheet of Holdings and its
Subsidiaries as at March 14, 1996, reported on by Xxxxxx Xxxxxxxx LLP, a copy of
which has heretofore been furnished to each Lender, is complete and correct and
presents fairly the consolidated financial condition of Holdings as at such
date. The consolidated balance sheet of Holdings and its consolidated
Subsidiaries as at November 30, 1996, and the related consolidated statements of
income and of cash flows for the period then ended, certified by Responsible
Officer, copies of which have heretofore been furnished to each Lender, are
complete and correct and present fairly the consolidated financial condition of
Holdings and its consolidated Subsidiaries as at such date, and the consolidated
results of their operations and their consolidated cash flows for the period
then ended (subject to normal year-end adjustments). All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by such accountants or Responsible Officer, as the
case may be, and as disclosed therein). Except for those items set forth on
Schedule 5.1, neither Holdings nor any of its consolidated Subsidiaries had, at
the date of the most recent balance sheet referred to above, any material
Guarantee Obligation, material
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contingent liability or material liability for taxes, or any material long-term
lease or material unusual forward or material long-term commitment, including,
without limitation, any interest rate or foreign currency swap or exchange
transaction, which is not reflected in the foregoing statements or in the notes
thereto. During the period from March 14, 1996 to and including the date hereof
there has been no sale, transfer or other disposition by Holdings or any of its
consolidated Subsidiaries of any material part of its business or property and
no purchase or other acquisition of any business or property (including any
capital stock of any other Person) material in relation to the consolidated
financial condition of Holdings and its consolidated Subsidiaries at March 14,
1996, other than pursuant to and in accordance with the BBMC Stock Purchase
Agreement as in effect on the BBMC Closing Date and the BMC Stock Purchase
Agreement as in effect on the BMC Closing Date and other than the agreement
entered into prior to the date hereof by HonoMo to dispose of all of the assets
of HonoMo.
5.2 NO CHANGE. (a) Since December 31, 1995 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect, and (b) except for the transactions effected pursuant
to the BBMC Stock Purchase Agreement and the BMC Stock Purchase Agreement,
during the period from December 31, 1995 to and including the date of this
Agreement no dividends or other distributions have been declared, paid or made
upon the Capital Stock of HomeSide nor has any of the Capital Stock of HomeSide
been redeemed, retired, purchased or otherwise acquired for value by HomeSide or
any of its Subsidiaries.
5.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of Holdings
and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except to the extent that the failure to be so
qualified or in good standing could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect, (d) in the case of BMC, such
Borrower and, to the extent necessary or desirable in the normal conduct of its
business, each Subsidiary, has valid current status and eligibility in good
standing under the regulations of the Agencies as an approved seller/servicer,
issuer/servicer or lender, as the case may be (including as a FNMA and FHLMC
approved Seller/Servicer, a GNMA approved Issuer/Servicer, a HUD Direct
Endorsement Lender, a VA approved lender and an FHA approved lender), (e) has
any other valid and current classification under the regulations of each of the
Agencies necessary or desirable in the normal conduct of its business and (f) is
in compliance with all Requirements of Law except to the extent that the failure
to comply therewith could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.
5.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each Loan Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and, in the
case of such Borrower, to borrow hereunder and has taken all necessary corporate
action to authorize the borrowings on the terms and conditions of this
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Agreement and any Notes and to authorize the execution, delivery and performance
of the Loan Documents to which it is a party. No consent or authorization of,
filing with, notice to or other act by or in respect of any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery, performance, validity or
enforceability of the Loan Documents to which such Loan Party is a party, except
as set forth on Schedule 5.4, all of which have been duly accomplished and are
valid and in full force and effect. Each Loan Document has been, and each other
Loan Document will be, duly executed and delivered on behalf of each Loan Party
that is a party thereto. This Agreement constitutes, and each other Loan
Document when executed and delivered by each Loan Party that is a party thereto
will constitute, a legal, valid and binding obligation of such Loan Party
enforceable against such Loan Party in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
5.5 NO LEGAL BAR. The execution, delivery and performance of
the Loan Documents, the borrowings hereunder and the use of the proceeds thereof
will not violate any Requirement of Law or Contractual Obligation (subject to
the receipt of any required consents under certain servicing contracts) of
Holdings or of any of its Subsidiaries and will not result in, or require, the
creation or imposition of any Lien on any of its or their respective properties
or revenues pursuant to any such Requirement of Law or Contractual Obligation.
5.6 NO MATERIAL LITIGATION. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of such Borrower, threatened by or against Holdings or any of
its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) except as set forth on
Schedule 5.6, which could reasonably be expected to have a Material Adverse
Effect.
5.7 NO DEFAULT. Neither Holdings nor any of its Subsidiaries
is in default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
5.8 OWNERSHIP OF PROPERTY; LIENS. Each of Holdings and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except as permitted by subsection 8.3.
5.9 INTELLECTUAL PROPERTY. Holdings and each of its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect (the
"INTELLECTUAL PROPERTY"). No claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such
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Intellectual Property, nor does such Borrower know of any valid basis for any
such claim. The use of such Intellectual Property by Holdings and its
Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
5.10 TAXES. Each of Holdings and its Subsidiaries has filed or
caused to be filed all tax returns which, to the knowledge of such Borrower, are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of Holdings or its Subsidiaries, as the case may be); and no tax Lien has
been filed, and, to the knowledge of such Borrower, no claim is being asserted,
with respect to any such tax, fee or other charge.
5.11 FEDERAL REGULATIONS. No part of the proceeds of any Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation G or Regulation
U of the Board as now and from time to time hereafter in effect. If requested by
any Lender or the Administrative Agent, HomeSide will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-1 or FR Form U-1 referred to in
said Regulation G or Regulation U, as the case may be.
5.12 ERISA. Neither a Reportable Event that reasonably could
result in the termination of a Plan (other than a standard termination) or which
could have a Material Adverse Effect nor an "accumulated funding deficiency"
(within the meaning of Section 412 of the Code or Section 302 of ERISA) has
occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Single Employer Plan,
and each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code. No termination of a Single Employer Plan has
occurred, (other than a standard termination) and no Lien in favor of the PBGC
or a Plan has arisen, during such five-year period. The present value of all
accrued benefits under each Single Employer Plan (based on those assumptions
used to fund such Plans) did not, as of the last annual valuation date prior to
the date on which this representation is made or deemed made, exceed the value
of the assets of such Plan allocable to such accrued benefits. Neither such
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan, and neither such Borrower nor any
Commonly Controlled Entity would become subject to any liability under ERISA if
such Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent.
5.13 INVESTMENT COMPANY ACT; OTHER REGULATIONS. Such Borrower
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.
Such Borrower is not subject to
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regulation under any Federal or State statute or regulation (other than
Regulation X of the Board) which limits its ability to incur the Loans.
5.14 SUBSIDIARIES. The Subsidiaries listed on Schedule 5.14
constitute all the Subsidiaries of Holdings at the date hereof.
5.15 PURPOSE OF LOANS. The proceeds of the Loans shall be used
by such Borrower (a) to finance the repayment of indebtedness of such Borrower
under the Existing Credit Agreement and (b) to finance the ongoing operations of
such Borrower, including the origination, acquisition and servicing of
residential mortgage loans, and other working capital and general corporate
needs of such Borrower, including making Restricted Payments permitted by
subsection 8.9.
5.16 ENVIRONMENTAL MATTERS. Except to the extent that all of
the following, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect:
(a) The facilities and properties owned, leased or operated by
Holdings or any of its Subsidiaries (the "PREMISES") do not contain,
and have not previously contained, any Materials of Environmental
Concern in amounts or concentrations which (i) constitute or
constituted a violation of, or (ii) could reasonably be expected to
give rise to liability under, any Environmental Law.
(b) The Premises and all operations at the Premises are in
compliance, and have in the last five years been in compliance, in all
material respects with all applicable Environmental Laws, and there is
no contamination at, under or about the Premises or violation of any
Environmental Law with respect to the Premises or the business operated
by Holdings or any of its Subsidiaries (the "BUSINESS") which could
interfere with the continued operation of the Premises.
(c) Neither Holdings nor any of its Subsidiaries has received
any notice of violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or compliance
with Environmental Laws with regard to any of the Premises or the
Business, nor does such Borrower have knowledge or reason to believe
that any such notice will be received or is being threatened.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Premises in violation of, or in a
manner or to a location which could reasonably be expected to give rise
to liability under, any Environmental Law, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of
at, on or under any of the Premises in violation of, or in a manner
that could reasonably be expected to give rise to liability under, any
applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of such Borrower, threatened,
under any Environmental Law to which Holdings or any Subsidiary is or
will be named as a party with respect to the
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Premises or the Business, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Premises or the Business.
(f) There has been no release or threat of release of
Materials of Environmental Concern at or from the Premises, or arising
from or related to the operations of Holdings or any Subsidiary in
connection with the Premises or otherwise in connection with the
Business, in violation of or in amounts or in a manner that could
reasonably give rise to liability under Environmental Laws.
5.17 CAPITALIZATION. Schedule 5.17 sets forth, as of the date
hereof, the number of authorized, issued and outstanding shares of each class of
Capital Stock of Holdings, the names and record owners of such shares (other
than management shareholders, whose shares are set forth therein in aggregate
opposite "Management"), the number of shares owned of record by each of such
owners, and the amount of the equity investment evidenced thereby on the Closing
Date. All of such shares are fully paid and duly and validly issued and
outstanding. Except as described on Schedule 5.17, there are no outstanding
subscriptions, options, warrants, calls, rights (including preemptive rights) or
any other agreements or commitments of any nature with respect to the Capital
Stock of Holdings or any of its Subsidiaries.
5.18 DISCLOSURE. The statements and information contained
herein, in any other Loan Document and in any of the information provided to the
Administrative Agent or the Lenders in writing (other than financial
projections) in connection with this Agreement, taken as a whole, do not contain
any untrue statement of any material fact, or omit to state a fact necessary in
order to make such statements or information not misleading in any material
respect, in each case in light of the circumstances under which such statements
were made or information provided as of the date so provided and subject to any
information subsequently provided in writing which amends, modifies or corrects
the information previously furnished. The financial projections contained in
Holdings' Updated Business Plan as of January 1997, furnished to the Lenders in
connection with this Agreement, have been prepared in good faith based upon
assumptions which were reasonable when such projections were made, it being
acknowledged that such projections are subject to the uncertainty inherent in
all projections of future results and that there can be no assurance that the
results set forth in such projections will in fact be realized. There is no fact
known to such Borrower, other than economic conditions generally, including
interest rate risk, that could reasonably be expected to have a Material Adverse
Effect that has not been expressly disclosed herein, in the other Loan Documents
or in such other documents, certificates and written statements furnished to the
Administrative Agent and the Lenders for use in connection with the transactions
contemplated hereby and by the other Loan Documents.
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SECTION 6. CONDITIONS PRECEDENT
6.1 CONDITIONS TO INITIAL LOANS. The agreement of each Lender
to make or purchase the initial Loan requested to be made or purchased by it is
subject to the satisfaction, immediately prior to or concurrently with the
making of such Loan on the Closing Date, of the following conditions precedent:
(a) LOAN DOCUMENTS. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly
authorized officer of each Borrower, with a counterpart for each
Lender, (ii) each Security Agreement, executed and delivered by a duly
authorized officer of each party thereto, with a counterpart or a
conformed copy for each Lender, (iii) each Pledge Agreement, executed
and delivered by a duly authorized officer of each party thereto, with
a counterpart or a conformed copy for each Lender, accompanied by all
stock certificates and related undated stock powers, executed in blank,
in respect of all Pledged Stock thereunder and (iv) each Guarantee,
executed and delivered by a duly authorized officer of each Guarantor
party thereto, with a counterpart or a conformed copy for each Lender.
(b) RELATED AGREEMENTS. The Administrative Agent shall have
received, with a copy for each Lender, true and correct copies,
certified as to authenticity by HomeSide, of (i) the Holdings Notes and
related documents and (ii) the Second Lien Pledge Agreements, executed
and delivered by Holdings and BMC, respectively, and such other
documents or instruments as may be reasonably requested by the
Administrative Agent.
(c) REPAYMENT OF EXISTING INDEBTEDNESS. The Administrative
Agent shall have received evidence satisfactory to it that,
simultaneously with the making of the initial Loans on the Closing
Date, each Borrower will have repaid in full its existing Indebtedness
under the Existing Credit Agreement.
(d) CLOSING CERTIFICATE. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each
Borrower, dated the Closing Date, substantially in the form of Exhibit
G, with appropriate insertions and attachments, satisfactory in form
and substance to the Administrative Agent, executed by the President or
any Vice President and the Secretary or any Assistant Secretary of such
Borrower.
(e) FEES. The Administrative Agent shall have received the
fees to be received on the Closing Date referred to in subsection 3.2.
(f) LEGAL OPINIONS. The Administrative Agent shall have
received, with a counterpart for each Lender, the following executed
legal opinions:
(i) the executed legal opinion of Xxxxxxx, Xxxx
& Xxxxx, LLP, counsel to HomeSide and the other Loan Parties,
substantially in the form of Exhibit H-1;
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(ii) the executed legal opinion of Xxxxxxxx,
Xxxxxxx & Xxxxxxx, a Professional Corporation, counsel to
Holdings, substantially in the form of Exhibit H-2;
(iii) the executed legal opinion of Xxxxxx
Xxxxxx, Esq., general counsel of HomeSide, substantially in
the form of Exhibit H-3;
(iv) the executed legal opinion of Holland &
Knight, special Florida counsel to the Borrowers,
substantially in the form of Exhibit H-4; and
(v) the executed legal opinion of special
Hawaii counsel to the Administrative Agent, substantially in
the form of Exhibit H-5.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
(g) ACTIONS IN RESPECT OF COLLATERAL. The Administrative Agent
shall have received:
(i) evidence in form and substance
satisfactory to the Administrative Agent that all filings,
recordings, registrations and other actions, including,
without limitation, the duly executed UCC financing
statements, necessary or, in the opinion of the Administrative
Agent, desirable to perfect the Liens created by the Security
Documents shall have been delivered to the Administrative
Agent to be held by it for filing in the event of the
occurrence of a Negative Security Event;
(ii) evidence satisfactory to the
Administrative Agent that all collateral accounts, settlement
accounts and custody accounts required to be established
pursuant to each of the Security Agreements have been
established; and
(iii) a duly executed copy of an Acknowledgment
Agreement with each relevant Agency (other than GNMA) or
Approved Investors covering all servicing rights included in
the Eligible Servicing Portfolio (subject to the proviso set
forth in the definition thereof).
6.2 CONDITIONS TO EACH LOAN. The agreement of each Lender to
make or purchase any Loan requested to be made or purchased by it on any
Borrowing Date (including, without limitation, its initial Loan) is subject to
the satisfaction of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. (i) In the case of any
Loans other than Loans constituting a Refunding Borrowing, each of the
representations and warranties made by either Borrower herein or in the
Borrowing Base Certificate relating to such Loans shall be true and
correct in all material respects on and as of such Borrowing
Date as if made on and as of such date and (ii) in the case of any
Loans constituting a Refunding Borrowing, each of the representations
and warranties made by either
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Borrower in subsections 5.3, 5.4, 5.5, 5.11, 5.13 and 5.15 and in the
Borrowing Base Certificate relating to such Loans shall be true and
correct in all material respects on and as of such Borrowing Date as if
made on and as of such date.
(b) NO DEFAULT. (i) In the case of Loans constituting a
Refunding Borrowing, no Event of Default shall have occurred and be
continuing on such Borrowing Date or after giving effect to the Loans
to be made on such Borrowing Date and the application of the proceeds
thereof and (ii) in the case of any other Loans, no Default or Event of
Default shall have occurred and be continuing on such Borrowing Date or
after giving effect to the Loans requested to be made on such Borrowing
Date and the application of the proceeds thereof.
(c) BORROWING BASE CERTIFICATE; BORROWING BASE AND OTHER
LIMITATIONS. In the case of a borrowing of Tranche A Loans, Tranche A
CAF Advances or Tranche A Swing Line Loans, the Administrative Agent
shall have received a Tranche A Borrowing Base Certificate for the
applicable Borrower, dated as of the close of business on the Business
Day immediately preceding such Borrowing Date or as of such Borrowing
Date, duly completed by the Collateral Agent in the manner required by
the Security Agreements. In the case of a borrowing of Tranche B Loans,
Tranche B CAF Advances or Tranche B Swing Line Loans, the
Administrative Agent shall have received a Tranche B Borrowing Base
Certificate for the applicable Borrower, dated as of the close of
business on the Business Day immediately preceding such Borrowing Date
or as of such Borrowing Date, duly completed by the Collateral Agent in
the manner required by the Security Agreements. In the case of each
Loan, the Administrative Agent shall have determined, based upon the
Tranche A Borrowing Base Certificate and/or Tranche B Borrowing Base
Certificate delivered in respect thereof that, after giving effect to
such Loan and the simultaneous application by the Administrative Agent
of the proceeds thereof, the limitations of subsections 2.1 and 2.2, as
applicable, will not be contravened.
(d) ADDITIONAL MATTERS. All corporate and other proceedings
and all documents, instruments and other legal matters in connection
with the transactions contemplated by this Agreement and the other Loan
Documents shall be satisfactory in form and substance to the
Administrative Agent, and the Administrative Agent shall have received
such other documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it
shall reasonably request.
Each borrowing by each Borrower hereunder shall constitute a representation and
warranty by both Borrowers as of the date thereof that the conditions contained
in this subsection have been satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
HomeSide hereby agrees that, so long as the Commitments remain
in effect or any amount is owing to any Lender or the Administrative Agent
hereunder or under any other Loan
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Document, HomeSide shall and (except in the case of delivery of financial
information, reports and notices) shall cause each of its Subsidiaries to:
7.1 Financial Statements. Furnish to each Lender:
--------------------
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of HomeSide or Holdings, as the case
may be, a copy of the consolidated balance sheet of HomeSide and its
consolidated Subsidiaries, and of Holdings and its consolidated
Subsidiaries, as at the end of such year and the related consolidated
statements of income and retained earnings and of cash flows for such
year, setting forth in each case in comparative form the figures for
the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope
of the audit, by Xxxxxx Xxxxxxxx LLP or other independent certified
public accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each
fiscal year of HomeSide or Holdings, as the case may be, the unaudited
consolidated balance sheet of HomeSide and its consolidated
Subsidiaries, and of Holdings and its consolidated Subsidiaries, as at
the end of such quarter and the related unaudited consolidated
statements of income and retained earnings and of cash flows of
HomeSide and its consolidated Subsidiaries, and of Holdings and its
consolidated Subsidiaries, for such quarter and the portion of the
fiscal year through the end of such quarter, setting forth in each case
in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or Responsible Officer, as the
case may be, and disclosed therein).
7.2 Certificates; Other Information. Furnish to each Lender:
-------------------------------
(a) concurrently with the delivery of the financial statements
referred to in subsection 7.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in
such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and (b), a certificate of a
Responsible Officer stating that, to the best of such Responsible
Officer's knowledge, during such period (i) no Subsidiary has been
formed or acquired (or, if any such Subsidiary has been formed or
acquired, HomeSide has complied with the requirements of subsection
7.11 with respect thereto), (ii) neither BMC nor any of its
Subsidiaries has changed its name, its principal place of business, its
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chief executive office or the location of any material item of tangible
Collateral without complying with the requirements of this Agreement
and the Security Documents with respect thereto and (iii) each Borrower
and each other Loan Party has observed or performed all of its
covenants and other agreements, and satisfied every condition,
contained in this Agreement and the other Loan Documents to be
observed, performed or satisfied by it, and that such Responsible
Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate, and containing calculations in
reasonable detail demonstrating compliance with the provisions of
subsections 8.1, 8.2, 8.6, 8.8, 8.9, 8.10 and 8.11;
(c) not later than the end of each fiscal year of HomeSide, a
copy of the projections by HomeSide of the operating budget and cash
flow budget of HomeSide and its Subsidiaries for the succeeding fiscal
year, such projections to be accompanied by a certificate of a
Responsible Officer to the effect that such projections have been
prepared on the basis of sound financial planning practice and that
such Responsible Officer has no reason to believe they are incorrect or
misleading in any material respect;
(d) within five days after the same are sent, copies of all
financial statements and reports which Holdings or HomeSide may make
to, or file with, the Securities and Exchange Commission or any
successor or analogous Governmental Authority;
(e) within three Business Days after the end of each calendar
month (in addition to the other dates required by the provisions of
this Agreement), the Tranche A Borrowing Base Certificate and Tranche B
Borrowing Base Certificate for each of HomeSide and HonoMo, delivered
by the Collateral Agent in respect of the last day of such month,
accompanied by a certificate of a Responsible Officer of each Borrower
certifying to the effect that the same are true and correct;
(f) concurrently with the delivery of any audits or similar
report by any Agency, copies of the same;
(g) not later than 30 days after the end of each fiscal
quarter of HomeSide, an origination report, in form and substance
satisfactory to the Administrative Agent;
(h) (i) not later than 30 days after the end of each fiscal
quarter of HomeSide, or, upon the request of the Administrative Agent,
as soon as practicable after such request, an Appraisal of the total
servicing portfolio of BMC and its Subsidiaries, including an Appraisal
of the Eligible Servicing Portfolio, together with a report by
HomeSide, in form and substance satisfactory to the Administrative
Agent, containing a break-down by investor and interest rate, and
containing a break-down of delinquencies by state and product, and (ii)
not later than 15 days after the end of each calendar month, a
certificate showing adjusted Appraised Value as at the end of such
month as described in clause (ii) of the definition thereof, certified
by a Responsible Officer of each Borrower and including, in detail
satisfactory to the Administrative Agent, the calculation and basis for
such determination;
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(i) not later than 30 days after the end of each fiscal
quarter of HomeSide, a report by HomeSide, in form and substance
satisfactory to the Administrative Agent, specifying nonaccrual loans
and other real estate owned; and
(j) (i) within three Business Days after the end of each
calendar week, a report, in form and substance satisfactory to the
Administrative Agent, setting forth the weighted average net purchase
price of all Take-Out Commitments covering Eligible Mortgage Loans or
Eligible Mortgage-Backed Securities, and (ii) within three Business
Days after the end of each calendar month, a report, in form and
substance satisfactory to the Administrative Agent, setting forth the
weighted average net purchase price of all Take-Out Commitments
covering Eligible Mortgage Loans or Eligible Mortgage- Backed
Securities, PROVIDED that the reports described in clause (i) above
shall be required to be delivered only to the Administrative Agent; and
(k) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
7.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of HomeSide or its Subsidiaries, as the case may be.
7.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. (a)
Continue to engage in businesses in which HomeSide and its Subsidiaries are
engaged on the date of this Agreement and such other businesses generally
related to residential mortgage banking as HomeSide and its Subsidiaries may
enter into in accordance with subsection 8.15, and, except as permitted under
subsection 8.4, preserve, renew and keep in full force and effect its corporate
existence and take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business; (b)
preserve and maintain its and BMC's and such Subsidiary's status and eligibility
as an approved seller and servicer, as applicable; (c) preserve and maintain any
other classification under the regulations of each of the Agencies necessary or
desirable in the normal conduct of BMC's, HomeSide's or such Subsidiary's
businesses; and (d) comply with all Contractual Obligations and Requirements of
Law except to the extent that failure to comply therewith could not, in the
aggregate, be reasonably expected to have a Material Adverse Effect.
7.5 MAINTENANCE OF PROPERTY; INSURANCE; RISK MANAGEMENT. Keep
all property useful and necessary in its business in good working order and
condition; maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and against at least such
risks (but including in any event public liability, product liability and
business interruption) as are usually insured against in the same general area
by companies engaged in the same or a similar business; furnish to each Lender,
upon written request, full information as to the insurance carried; and maintain
a risk management policy with respect to its portfolio of mortgage loans and
servicing rights designed to reduce fluctuations in the value of its servicing
portfolio due to interest rate movements.
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7.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
Keep proper books of records 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 permit
representatives of any Lender to 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 and to discuss the business,
operations, properties and financial and other condition of HomeSide and its
Subsidiaries with officers and employees of HomeSide and its Subsidiaries and
with its independent certified public accountants, PROVIDED that such visits by
Lenders shall be coordinated through the Administrative Agent and, when no Event
of Default has occurred and is continuing, shall be arranged upon reasonable
prior notice during normal working hours and with reasonable efforts to minimize
disruption of the normal conduct of business of HomeSide and its Subsidiaries.
7.7 NOTICES. Promptly give notice to the Administrative Agent
and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of BMC or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between BMC or
any of its Subsidiaries and any Governmental Authority, which in either
case, if not cured or if adversely determined, as the case may be,
could reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting BMC or any of its
Subsidiaries in which the amount involved is $1,000,000 or more and not
covered by insurance or in which injunctive or similar relief is
sought;
(d) the following events, as soon as possible and in any event
within 30 days after HomeSide knows or has reason to know thereof: (i)
the occurrence or expected occurrence of any Reportable Event with
respect to any Plan, a failure to make any required contribution to a
Plan, the creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of,
any Multiemployer Plan or (ii) the institution of proceedings or the
taking of any other action by the PBGC or HomeSide or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the terminating, Reorganization or Insolvency of,
any Plan (other than a standard termination); and
(e) any change in the business, operations, property,
condition (financial or otherwise) of BMC and its Subsidiaries taken as
a whole that has had or has a reasonable likelihood of having a
Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action HomeSide proposes to take with respect thereto.
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7.8 ENVIRONMENTAL LAWS. (a) Comply with, and ensure compliance
by all tenants and subtenants, if any, with, all applicable Environmental Laws
and obtain and comply in all material respects with and maintain, and ensure
that all tenants and subtenants obtain and comply in all material respects with
and maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws except to the extent that
failure to do so could not be reasonably expected to have a Material Adverse
Effect.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings could not be
reasonably expected to have a Material Adverse Effect.
(c) Defend, indemnify and hold harmless the Administrative
Agent and the Lenders, and their respective employees, agents, officers and
directors, from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
violation of, noncompliance with or liability under any Environmental Laws
applicable to the operations of HomeSide or the Premises, or any orders,
requirements or demands of Governmental Authorities related thereto, including,
without limitation, attorney's and consultant's fees, investigation and
laboratory fees, response costs, court costs and litigation expenses, except to
the extent that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor.
Notwithstanding anything in this Agreement to the contrary, this indemnity shall
continue in full force and effect regardless of the termination of this
Agreement.
7.9 FURTHER ASSURANCES. Upon the request of the Administrative
Agent, promptly perform or cause to be performed any and all acts and execute or
cause to be executed any and all documents (including, without limitation,
financing statements and continuation statements) for filing under the
provisions of the Uniform Commercial Code or any other Requirement of Law which
are necessary or advisable to maintain in favor of the Administrative Agent or
Collateral Agent, as applicable, for the benefit of the Lenders, Liens on the
Collateral that are duly perfected in accordance with all applicable
Requirements of Law (to the extent such Liens are required to be perfected
pursuant to the terms hereof).
7.10 SECURITY EVENTS. (a) If a Negative Security Event occurs
during a Positive Security Period, as promptly as practicable after the
occurrence of such Negative Security Event, and in any event on or before the
Security Perfection Date in respect thereof, take or cause to be taken the
following actions:
(i) take all actions required (including, where
required, physical delivery to the Collateral Agent of Mortgage-Backed
Securities and Required Documentation in respect of Eligible Mortgage
Loans, filing of UCC financing statements and execution
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and delivery of Acknowledgment Agreements, to the extent such actions
have not already been taken) to cause Collateral to be Delivered under
the Security Agreements;
(ii) deliver to the Administrative Agent, with a
counterpart for each Lender, executed legal opinions of such counsel to
HomeSide and its Subsidiaries as shall be reasonably acceptable to the
Administrative Agent confirming, as of a date not more than thirty days
prior to such Security Perfection Date, the opinions rendered on the
Closing Date by such respective counsel in respect of the creation,
perfection and priority of the Collateral Agent's security interest in
the Collateral, with such changes therein as the Administrative Agent
shall reasonably approve or reasonably request;
and thereafter from time to time promptly take or cause to be taken all such
further actions as shall be requested by the Collateral Agent in order to ensure
that the provisions of the Security Agreements are satisfied and the
representations and warranties therein with respect to the Collateral are true
and correct.
7.11 ADDITIONAL COLLATERAL. (a) With respect to any assets
acquired after the Closing Date by BMC or any of its Subsidiaries that are
intended to be subject to the Lien created by any of the Security Documents but
which are not so subject, at any time other than during the a Positive Security
Period, promptly (and in any event within 30 days after the acquisition
thereof): (i) execute and deliver to the Administrative Agent such amendments to
the relevant Security Documents or such other documents as the Administrative
Agent shall deem necessary or advisable to grant to the Administrative Agent,
for the benefit of the Secured Parties, a Lien on such assets, (ii) take all
actions necessary or advisable to cause such Lien to be duly perfected in
accordance with all applicable Requirements of Law, including, without
limitation, the filing of financing statements in such jurisdictions as may be
requested by the Administrative Agent, and (iii) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described in clauses (i) and (ii) immediately preceding,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(b) With respect to any Person that, subsequent to the Closing
Date, becomes a Subsidiary, promptly upon the request of the Administrative
Agent: (i) cause such new Subsidiary to become a party to the Subsidiary
Guarantee pursuant to documentation which is in form and substance satisfactory
to the Administrative Agent, (ii) cause the capital stock of such Subsidiary to
be pledged under the HomeSide Pledge Agreement pursuant to documentation
satisfactory to the Administrative Agent (including acknowledgment thereof by
such Subsidiary) and (iii) if requested by the Administrative Agent, deliver to
the Administrative Agent legal opinions relating to the matters described in
clause (i) immediately preceding, which opinions shall be in form and substance,
and from counsel, reasonably satisfactory to the Administrative Agent.
7.12 COMPLIANCE WITH OTHER LOAN DOCUMENTS. Cause each other
Loan Party to comply with all its obligations under each Loan Document to which
such Loan Party is a party.
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7.13 MAINTENANCE OF AGENCY STATUS. In the case of each
Borrower and, to the extent necessary or desirable in the normal conduct of its
business, BMC and each Subsidiary, maintain at all times its status as a FNMA
and FHMLC approved Seller/Servicer, a GNMA approved Issuer/Servicer, a HUD
Direct Endorsement Lender, a VA-approved Lender and an FHA approved lender in
good standing.
7.14 GNMA ACKNOWLEDGEMENT AGREEMENTS. If an Acknowledgement
Agreement from GNMA becomes generally available in a form that the
Administrative Agent determines is acceptable, use its best efforts to obtain
and deliver such applicable Acknowledgement Agreements from GNMA relating to the
Mortgage Loans serviced on behalf of GNMA included in the Eligible Servicing
Portfolio as the Administrative Agent may from time to time request.
SECTION 8. NEGATIVE COVENANTS
HomeSide hereby agrees that, so long as the Commitments remain
in effect or any amount is owing to any Lender or the Administrative Agent
hereunder or under any other Loan Document, HomeSide shall not, and (except with
respect to subsection 8.1) shall not permit any of its Subsidiaries to, directly
or indirectly:
8.1 Financial Condition Covenants.
-----------------------------
(a) MAINTENANCE OF ADJUSTED CONSOLIDATED TANGIBLE NET WORTH.
Permit Adjusted Consolidated Tangible Net Worth at any date to be less
than an amount equal to the sum of (i) an amount equal to 80% of
Adjusted Consolidated Tangible Net Worth as at the Closing Date PLUS
(ii) an amount equal to 50% of the excess of (A) the aggregate amount
of net proceeds received during the period from the Closing Date
through such date by Holdings from the issuance of Capital Stock other
than to Sponsors over (B) the amount thereof applied to prepay or
redeem the Holdings Notes PLUS (iii) an amount equal to 80% of the sum
of Consolidated Net Income for each fiscal quarter for which
Consolidated Net Income is positive during the period from the Closing
Date through the last day of the most recently ended fiscal quarter of
HomeSide LESS (iv) the amount of Restricted Payments actually made by
HomeSide as permitted under subsection 8.9 during the period from the
Closing Date through such date (to the extent such Restricted Payments
were not deducted in determining such Adjusted Consolidated Tangible
Net Worth).
(b) LEVERAGE RATIO. Permit the ratio of Consolidated Total
Liabilities to Adjusted Consolidated Tangible Net Worth to exceed (i)
7.75:1.0 at any time during the period from the Closing Date through
and including August 31, 1997, (ii) 7.5:1.0 at any time during the
period from September 1, 1997 through and including November 30, 1998
or (iii) 7.0:1.0 at any time thereafter.
(c) SERVICING-RELATED DEBT RATIO. Permit the ratio of
Consolidated Servicing- Related Debt to Adjusted Consolidated Tangible
Net Worth to exceed (i) 2.0:1.0 at any
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time during the period from the Closing Date through and including
August 31, 1997, (ii) 1.75:1.0 at any time during the period from and
including September 1, 1997 through and including August 31, 1998 or
(iii) 1.5:1.0 at any time thereafter.
(d) CASH FLOW COVERAGE RATIO. Permit (i) for the period of
three consecutive fiscal quarters of HomeSide ending on February 28,
1997, or (ii) for any period of four consecutive fiscal quarters of
HomeSide ending thereafter, the ratio of (A) the sum of (1)
Consolidated Cash Flow for such period plus (2) Consolidated Interest
and Dividend Expense for such period to (B) Consolidated Interest and
Dividend Expense for such period to be less than 3.0:1.0.
8.2 LIMITATION ON INDEBTEDNESS. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of the Borrowers under this Agreement;
(b) Indebtedness of HomeSide to any Subsidiary Guarantor and
of any Subsidiary to HomeSide or any other Subsidiary Guarantor;
(c) Indebtedness outstanding on the date hereof and listed on
Schedule 8.2 and any refinancings, refundings, renewals or extensions
thereof, PROVIDED that the principal amount of any such Indebtedness so
refinanced, refunded, renewed or extended shall not exceed the
principal amount of such Indebtedness immediately prior to the time of
such refinancing, refunding, renewal or extension;
(d) Indebtedness related to the maintenance of balances with
the holder of such Indebtedness arising under a line of credit (i)
which has a term not in excess of one year, (ii) which is secured by
Cash Equivalents having an aggregate value not materially in excess of
the outstanding amount under such line of credit and (iii) with respect
to which the net interest expense thereon (after giving effect to
compensating balances) is not in excess of the interest income earned
on the collateral securing such line of credit;
(e) repurchase agreements (including "gestation" repo
transactions) entered into in the ordinary course of HomeSide's or
HonoMo's mortgage banking business and relating to mortgage loans and
Mortgage-Backed Securities;
(f) obligations under Take-Out Commitments;
(g) intra-day overdrafts on dealer clearance accounts arising
in connection with trade settlements for Mortgage-Backed Securities;
(h) obligations of HomeSide or its Subsidiaries under Hedge
Contracts;
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(i) obligations of HomeSide under the BBMC Stock Purchase
Agreement as in effect on the BBMC Closing Date and the BMC Stock
Purchase Agreement as in effect on the BMC Closing Date;
(j) Indebtedness of HomeSide or HonoMo secured by servicing
rights, related receivables or Mortgage Loans that do not meet the
requirements for inclusion in the Eligible Servicing Portfolio and do
not constitute Collateral under the Security Agreements, in an
aggregate principal amount not to exceed $100,000,000 at any time
outstanding;
(k) Indebtedness constituting obligations under Hedging
Agreements entered into by HomeSide in the ordinary course of business;
(l) letters of credit issued for the benefit of GNMA in
connection with final pool certifications;
(m) Indebtedness that constitutes Permitted Commercial Paper
or Permitted Medium Term Debt; and
(n) additional Indebtedness of HomeSide, including in respect
of performance bonds and letters of credit (other than letters of
credit issued pursuant to the foregoing clause (k) of this subsection
8.2), not exceeding $35,000,000 in aggregate principal amount at any
one time outstanding.
8.3 LIMITATION ON LIENS. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:
(a) Liens for taxes, assessments and other governmental
impositions not yet due or which are being contested in good faith by
appropriate proceedings; PROVIDED, that adequate reserves with respect
thereto are maintained on the books of HomeSide or its Subsidiaries, as
the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business and securing obligations which are not overdue for a period of
more than 60 days or which are being contested in good faith by
appropriate proceedings; PROVIDED that adequate reserves with respect
thereto are maintained on the books of HomeSide or its Subsidiaries, as
the case may be, in accordance with GAAP;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
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(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of HomeSide or such
Subsidiary;
(f) Liens of landlords, arising solely by operation of law and
which are not avoidable as a matter of law, on fixtures and moveable
property located on premises leased in the ordinary course of business;
PROVIDED, that the rental payments secured thereby are not yet due;
(g) Liens (not otherwise permitted hereunder) which secure
obligations incidental to repurchase contracts ordinary in the mortgage
banking businesses of HomeSide and its Subsidiaries;
(h) Liens (not otherwise permitted hereunder) which secure
obligations (as to HomeSide and all Subsidiaries) incidental to forward
delivery contracts ordinary in the mortgage banking businesses of
HomeSide and its Subsidiaries;
(i) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any Lien
referred to in the foregoing clauses; PROVIDED, that the principal
amount of Indebtedness secured thereby shall not exceed the principal
amount of Indebtedness so secured immediately prior to the time of such
extension, renewal or replacement, and that such extension, renewal, or
replacement Lien shall be limited to all or a part of the property
which secured the Lien so extended, renewed or replaced (plus
improvements on such property);
(j) Liens created by the Security Documents;
(k) Liens securing Indebtedness permitted under subsection
8.2(j) as described therein;
(l) Liens securing Hedging Agreements, so long as any such
Lien does not cover any type of asset that could be included as
Collateral under the Security Documents;
(m) Liens in existence on the Closing Date described on
Schedule 8.3; and
(n) Liens on Cash Equivalents securing lines of credit
permitted under subsection 8.2(d) to the extent described therein;
PROVIDED, that none of the foregoing permitted Liens shall encumber assets
Delivered as Collateral or otherwise included in the Tranche A Borrowing Base or
the Tranche B Borrowing Base other than Liens permitted by the foregoing clause
(j).
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8.4 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Subsidiary of HomeSide may be merged or consolidated
with or into HomeSide (PROVIDED that HomeSide shall be the continuing
or surviving corporation) or with or into any one or more wholly owned
Subsidiary Guarantor (PROVIDED that the wholly owned Subsidiary or
Subsidiaries shall be the continuing or surviving corporation);
(b) any wholly owned Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to HomeSide or any other wholly owned
Subsidiary Guarantor;
(c) HomeSide may dissolve any Subsidiary that is inactive and
holds minimal assets and the continued existence of which is of no
value to HomeSide, any other Loan Party or the interests of the
Lenders; and
(d) HonoMo or all or substantially all of the assets of HonoMo
may be sold in accordance with subsection 11.11.
8.5 LIMITATION ON SALE OF ASSETS. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, other than in the ordinary course of business,
or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary's
Capital Stock to any Person other than HomeSide or any wholly owned Subsidiary,
except as permitted by subsection 8.4(b) and except that HonoMo or all or
substantially all of the assets of HonoMo may be sold in accordance with
subsection 11.11.
8.6 LIMITATION ON LEASES. Permit Consolidated Lease Expense for
any fiscal year of HomeSide to exceed $7,500,000, plus, if HomeSide consummates
a sale and leaseback transaction in respect of its principal place of business,
an additional $3,000,000.
8.7 LIMITATION ON SALES AND LEASEBACKS. Enter into any
arrangement with any Person providing for the leasing by HomeSide or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by HomeSide or such Subsidiary to such Person or to any other Person
to whom funds have been or are to be advanced by such Person on the security of
such property or rental obligations of HomeSide or such Subsidiary, other than
any such arrangement with respect to the real property described on Schedule
8.3.
8.8 LIMITATION ON RECOURSE SERVICING. Permit the aggregate
outstanding face amount of mortgage loans in respect of which BMC, HomeSide or
any of its Subsidiaries holds servicing rights other than Non-Recourse Servicing
Rights to exceed $1,000,000,000.
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8.9 LIMITATION ON RESTRICTED PAYMENTS. Declare or pay any
dividend (other than dividends payable solely in common stock of HomeSide) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of Capital Stock of HomeSide or any
warrants or options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of BMC, HomeSide or
any Subsidiary (such declarations, payments, setting apart, purchases,
redemptions, defeasances, retirements, acquisitions and distributions being
herein called "RESTRICTED PAYMENTS"), except that, (a) so long as no Event of
Default has occurred and is continuing, (i) HomeSide may declare and pay cash
dividends to BMC (which BMC may, in accordance with the BMC Guarantee, declare
and pay as cash dividends to Holdings) in an amount equal to the actual taxes
paid in cash by Holdings, such dividends to be paid substantially concurrently
with the payment of such taxes by Holdings and to be returned to HomeSide to the
extent not applied by Holdings thereto (PROVIDED that notwithstanding the
existence of an Event of Default, HomeSide shall not be prohibited by the terms
of this subsection from paying taxes due and payable in respect of HomeSide and
its consolidated Subsidiaries), (ii) HomeSide may declare and pay cash dividends
to BMC (which BMC may, in accordance with the BMC Guarantee, declare and pay as
cash dividends to Holdings) to allow Holdings to redeem Capital Stock of
Holdings held by directors and employees pursuant to employment arrangements of
HomeSide, in an aggregate annual amount not to exceed $2,000,000, (iii) HomeSide
may declare and pay cash dividends to BMC (which BMC may, in accordance with the
BMC Guarantee, declare and pay as cash dividends to Holdings) to allow Holdings
to redeem redeemable Capital Stock issued in connection with the BBMC
Acquisition and listed on Schedule 5.17 in an amount not to exceed $7,500,000 in
the aggregate after the Closing Date, and (iv) HomeSide may declare and pay cash
dividends to BMC (which BMC may, in accordance with the BMC Guarantee, declare
and pay as cash dividends to Holdings) in an amount not to exceed $75,000 in the
aggregate in each fiscal year of HomeSide, to allow Holdings to pay fees and
expenses incurred in the administration of its ordinary and normal activities
and (b) so long as no Blockage Notice (as defined below) is in effect, HomeSide
may declare and pay cash dividends to BMC (which BMC may, in accordance with the
BMC Guarantee, declare and pay as cash dividends to Holdings) in an amount equal
to the actual interest payable in cash by Holdings on the Holdings Notes, such
dividends to be paid concurrently with the payment of such interest by Holdings
and to be returned to HomeSide to the extent not applied by Holdings thereto.
For the purposes hereof a "BLOCKAGE NOTICE" shall be a notice designated as such
by the Administrative Agent to the agent or trustee of the Holdings Notes
stating that a Default or Event of Default has occurred and is continuing; each
Blockage Notice shall continue to be in effect for the period from the date of
such notice to the earlier to occur of the cure or waiver of the Default or
Event of Default that was the basis for such Blockage Notice or the date which
is 180 days after the date of such notice; PROVIDED that only one Blockage
Notice may be delivered hereunder during each period of 365 days.
8.10 LIMITATION ON CAPITAL EXPENDITURES. Make or commit to
make (by way of the acquisition of securities of a Person or otherwise) any
expenditure in respect of the purchase or other acquisition of fixed or capital
assets (excluding (i) any such asset acquired in connection with normal
replacement and maintenance programs properly charged to current operations,
(ii)
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purchases of Mortgage Loans, mortgage servicing rights, Hedge Contracts and
Mortgage-Backed Securities and (iii) expenditures made with insurance proceeds
received in respect of losses of plant, property and equipment to the extent
applied to the purchase of replacement or similar assets within one year after
receipt thereof) except for expenditures in the ordinary course of business not
exceeding, in the aggregate for HomeSide and its Subsidiaries, $15,000,000
during any fiscal year of HomeSide, PROVIDED, that the amount of such capital
expenditures permitted to be made in any fiscal year of HomeSide shall be
increased by the excess of $15,000,000 over the amount of capital expenditures
actually made in such immediately preceding fiscal year.
8.11 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in, any Person,
except:
(a) investments made in the ordinary course of HomeSide's
business, including investments in Mortgage Loans, Mortgage-Backed
Securities, mortgage servicing rights and Hedge Contracts;
(b) investments in Cash Equivalents;
(c) loans and advances to employees of HomeSide and its
Subsidiaries in an aggregate amount not to exceed $2,500,000 at any
time outstanding;
(d) loans permitted under subsection 8.2(b); and
(e) additional investments in Persons other than Holdings or
any Subsidiary of Holdings which is not a Subsidiary of HomeSide, in an
aggregate amount not to exceed $30,000,000 at any time outstanding.
8.12 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF
CERTAIN INSTRUMENTS AND AGREEMENTS. (a) Make or permit any optional payment or
prepayment on or redemption or purchase of any Indebtedness under the Holdings
Notes or (b) amend, modify or change, or consent or agree to any amendment,
modification or change to any of the terms of (i) any such Indebtedness (other
than any such amendment, modification or change which would extend the maturity
or reduce the amount of any payment of principal thereof or which would reduce
the rate or extend the date for payment of interest thereon) or (ii) any of the
material terms of the BBMC Stock Purchase Agreement, the Stockholder Agreement
or the BMC Stock Purchase Agreement, in each case as in effect on the Closing
Date; PROVIDED that notwithstanding the provisions of clause (a) above, so long
as no Event of Default exists or is continuing, Holdings may redeem or repay a
portion of the principal amount of the Holdings Notes, and pay any make-whole or
prepayment premium required under the Holdings Notes to be paid in respect of
such redemption or prepayment, with the proceeds of the issuance by Holdings of
Capital Stock, in an aggregate principal amount of such Holdings Notes not to
exceed $70,000,000.
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8.13 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Except for
the agreements listed on Schedule 8.13, enter into any transaction, including,
without limitation, any purchase, sale, lease or exchange of property or the
rendering of any service, with any Affiliate unless such transaction is (a)
otherwise permitted under this Agreement, (b) in the ordinary course of
HomeSide's or such Subsidiary's business and (c) upon fair and reasonable terms
no less favorable to HomeSide or such Subsidiary, as the case may be, than it
would obtain in a comparable arm's length transaction with a Person which is not
an Affiliate.
8.14 LIMITATION ON NEGATIVE PLEDGE CLAUSES. Enter into with
any Person any agreement, other than the Loan Documents, which prohibits or
limits the ability of HomeSide or any of its Subsidiaries to create, incur,
assume or suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired.
8.15 LIMITATION ON LINES OF BUSINESS. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
HomeSide and its Subsidiaries are engaged on the date of this Agreement and
businesses generally related to residential mortgage banking.
8.16 LIMITATION ON CHANGES IN FISCAL YEAR. Permit the fiscal
year of HomeSide to end on a day other than the last day of February.
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) Either Borrower shall fail to pay any principal of any
Loan when due in accordance with the terms thereof or hereof; or either
Borrower shall fail to pay any interest on any Loan, or any other
amount payable hereunder, within five days after any such interest, any
fees or other amount becomes due in accordance with the terms thereof
or hereof; or
(b) Any representation or warranty made or deemed made by
either Borrower or any other Loan Party herein or in any other Loan
Document or which is contained in any certificate, document or
financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document shall
prove to have been incorrect in any material respect on or as of the
date made or deemed made, and the facts or circumstances in respect of
which such representation or warranty was incorrect have not changed to
make such representation or warranty correct within 30 days after it
was made or deemed made; or
(c) HomeSide or any other Loan Party shall default in the
observance or performance of any agreement contained in subsection 7.10
or Section 8 (other than subsection 8.3), in subsection 8.3 (other than
as provided in clause (i) of paragraph (d) of
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this Section), in Section 14 of either Borrower Security Agreement or
in Section 7 of the BMC Security Agreement; or
(d) HomeSide or any other Loan Party shall default in the
observance or performance of (i) any agreement contained in subsection
8.3 to the extent that the Lien giving rise to such default is not a
Lien on Collateral and does not secure Indebtedness in an aggregate
amount in excess of $5,000,000 or (ii) any other agreement contained in
this Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section), and any such default
described in clause (i) or (ii) of this paragraph (d) shall continue
unremedied for a period of 30 days; or
(e) Holdings or any of its Subsidiaries shall (i) default in
any payment of principal of or interest on any Indebtedness (other than
the Loans) or in the payment of any Guarantee Obligation or Hedge
Termination Obligation, beyond the period of grace (not to exceed 30
days), if any, provided in the instrument or agreement under which such
Indebtedness, Guarantee Obligation or Hedge Termination Obligation was
created; or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness, Guarantee
Obligation or Hedge Termination Obligation or contained in any
instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness or Hedge Termination Obligation
or beneficiary or beneficiaries of such Guarantee Obligation (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such
Guarantee Obligation or Hedge Termination Obligation to become payable;
PROVIDED, HOWEVER, that no Default or Event of Default shall exist
under this paragraph unless the aggregate amount of Indebtedness,
Guarantee Obligations and/or Hedge Termination Obligations in respect
of which any default or other event or condition referred to in this
paragraph shall have occurred shall be equal to at least $15,000,000;
or
(f) (i) Holdings or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its assets, or Holdings or any
of its Subsidiaries shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against Holdings or any
of its Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against Holdings or any of its Subsidiaries
any case, proceeding or other action seeking
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issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) Holdings or any of its Subsidiaries
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) Holdings or any of its Subsidiaries
shall generally not, or shall be unable to, or shall admit in writing
its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of HomeSide or any Commonly Controlled
Entity, (iii) 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 commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) HomeSide or any Commonly Controlled
Entity shall, or in the reasonable opinion of the Required Lenders is
likely to, incur any liability in connection with a withdrawal from, or
the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any
other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any,
could reasonably be expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
BMC, HomeSide or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance) of $12,000,000 or
more, and such judgments or decrees, to the extent in excess of such
amount, shall not have been vacated, discharged, stayed or bonded
pending appeal within 60 days from the entry thereof; or
(i) Except to the extent that during the existence of a
Positive Security Event the Liens thereunder may be released in
accordance with the terms thereof, (i) any of the Security Documents
shall cease, for any reason, to be in full force and effect, or
HomeSide or any other Loan Party which is a party to any of the
Security Documents shall so assert or (ii) the Lien created by any of
the Security Documents shall cease to be enforceable and of the same
effect and priority purported to be created thereby; or
(j) Any Guarantee shall cease, for any reason, to be in full
force and effect or any Guarantor shall so assert; or
(k) (i) Holdings shall cease to own 100% of the Capital Stock
of BMC, or (ii) BMC shall cease to own 100% of the Capital Stock of
HomeSide, or (iii) the ownership
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interest (after giving effect to the IPO) of any of (A) Xxxxxx X. Xxx
Company and/or Madison Dearborn Capital Partners, L.P., and their
respective Affiliates, (B) Bank of Boston Corporation and/or its
Affiliates and (C) Xxxxxxx and/or its Affiliates (individually, a
"SPONSOR" and collectively, the "SPONSORS") in Holdings shall be
reduced by more than 20% (x) prior to July 27, 1997 as a result of a
sale by such Sponsor of the outstanding capital stock of Holdings held
by such Sponsor or (y) on or after July 27, 1997 if at the time of such
sale an Event of Default is continuing, or (iv) the Sponsors shall
cease to own shares representing at least 51% of the aggregate ordinary
voting power represented by the issued and outstanding Capital Stock of
Holdings on a fully diluted basis, or (v) any Person or group of
Persons acquires, directly or indirectly, beneficially or of record,
shares representing at least 20% of the aggregate ordinary voting power
represented by the issued and outstanding Capital Stock of Holdings on
a fully diluted basis (other than the Sponsors and an additional
partner designated by the Sponsors and approved by the board of
directors of Holdings), or (vi) Continuing Directors shall cease at any
time to constitute a majority of the board of directors of Holdings (as
used herein, "Continuing Directors" shall mean, collectively, (A) all
members of the board of directors of Holdings on the Closing Date and
(B) all members of the board of directors of Holdings who assume office
after the Closing Date and whose nomination for election by Holdings'
shareholders was approved by a majority of the Continuing Directors (or
as approved pursuant to the applicable terms of the Stockholder
Agreement);
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to either
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following actions may
be taken: (i) with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to HomeSide declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and (ii) with the consent
of the Required Lenders, the Administrative Agent may, or upon the request of
the Required Lenders, the Administrative Agent shall, by notice to HomeSide,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement to be due and payable forthwith, whereupon
the same shall immediately become due and payable. Except as expressly provided
above in this Section, presentment, demand, protest and all other notices of any
kind are hereby expressly waived.
SECTION 10. THE ADMINISTRATIVE AGENT; THE COLLATERAL AGENT
10.1 APPOINTMENT. Each Lender hereby irrevocably designates
and appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents and the Collateral Agent as the agent of
such Lender under the Loan Documents to which it is
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a party, and each such Lender irrevocably authorizes the Administrative Agent
and the Collateral Agent, in such capacities, to execute and deliver the Loan
Documents to which it is a party and to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to the Administrative
Agent or the Collateral Agent, as the case may be, by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, neither the Administrative Agent nor the Collateral
Agent shall have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against the Administrative Agent or the Collateral Agent.
10.2 DELEGATION OF DUTIES. Each of the Administrative Agent
and the Collateral Agent may execute any of its duties under this Agreement and
the other Loan Documents to which it is a party by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Neither the Administrative Agent nor the
Collateral Agent shall be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.
10.3 EXCULPATORY PROVISIONS. None of the Administrative Agent,
the Collateral Agent or any of their respective officers, directors, employees,
agents, attorneys-in-fact or Affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Loan Document to which it is a party
(except for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by either Borrower or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of either Borrower to perform its obligations
hereunder or thereunder. Neither the Administrative Agent nor the Collateral
Agent shall be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of either Borrower.
10.4 RELIANCE BY ADMINISTRATIVE AGENT AND COLLATERAL AGENT.
Each of the Administrative Agent and the Collateral Agent shall be entitled to
rely, and shall be fully protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to HomeSide), independent accountants and other
experts selected by the Administrative Agent. The Administrative Agent may deem
and treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. Each of the Administrative Agent and the
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Collateral Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, to the extent
required by this Agreement, all of the Lenders) as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Each of the Administrative Agent and the
Collateral Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders (or, to the extent required by
this Agreement, all of the Lenders), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
10.5 NOTICE OF DEFAULT. Neither the Administrative Agent nor
the Collateral Agent shall be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless it has received
notice from a Lender or HomeSide referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or, to
the extent required by this Agreement, all of the Lenders); PROVIDED that unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
10.6 NON-RELIANCE ON ADMINISTRATIVE AGENT, COLLATERAL AGENT
AND OTHER LENDERS. Each Lender expressly acknowledges that neither the
Administrative Agent nor the Collateral Agent nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representations or warranties to it and that no act by the Administrative
Agent or the Collateral Agent hereafter taken, including any review of the
affairs of either Borrower, shall be deemed to constitute any representation or
warranty by the Administrative Agent or the Collateral Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or the Collateral Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of
either Borrower and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or the Collateral Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of either Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent or the Collateral Agent hereunder, the Administrative Agent
and the Collateral Agent shall not have any duty or responsibility to provide
any Lender
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with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
either Borrower which may come into the possession of the Administrative Agent
or the Collateral Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
10.7 INDEMNIFICATION. The Lenders agree to indemnify each of
the Administrative Agent and the Collateral Agent in its capacity as such (to
the extent not reimbursed by the Borrowers and without limiting the obligation
of the Borrowers to do so), ratably according to their respective Commitment
Percentages in effect on the date on which indemnification is sought, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against the Administrative Agent or the Collateral Agent in any way relating to
or arising out of the Commitments, this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Administrative Agent or the Collateral Agent under or in connection with
any of the foregoing; PROVIDED that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
gross negligence or willful misconduct of the Administrative Agent or the
Collateral Agent, as the case may be. The agreements in this subsection shall
survive the payment of the Loans and all other amounts payable hereunder.
10.8 ADMINISTRATIVE AGENT AND COLLATERAL AGENT IN ITS
INDIVIDUAL CAPACITY. The Administrative Agent and the Collateral Agent and their
respective affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Borrowers as though such Person were not
the Collateral Agent or the Administrative Agent hereunder, as the case may be,
and under the other Loan Documents. With respect to the Loans made by it, the
Administrative Agent and the Collateral Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not the Administrative Agent or the
Collateral Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent and the Collateral Agent in their individual capacity.
10.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent
may resign as Administrative Agent upon 10 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent shall
succeed to the rights, powers and duties of the Administrative Agent hereunder.
Effective upon such appointment and approval, the term "Administrative Agent"
shall mean such successor agent, and the former Administrative Agent's rights,
powers and duties as Administrative Agent shall be terminated, without any other
or further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 10 shall inure to its benefit as to any actions taken or omitted to
be
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taken by it while it was Administrative Agent under this Agreement and the other
Loan Documents.
10.10 SUCCESSOR COLLATERAL AGENT. The Collateral Agent may
resign or be removed as Collateral Agent, and a successor Collateral Agent may
be appointed, in accordance with Section 12 of the Borrower Security Agreements
and Section 5 of the BMC Security Agreement. After any retiring Collateral
Agent's resignation or removal as Collateral Agent, the provisions of this
Section 10 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Collateral Agent under this Agreement and the other
Loan Documents.
10.11 CONCERNING THE COLLATERAL AGENT AND THE SECURITY
AGREEMENTS. The Collateral Agent shall perform the functions specifically set
forth for it in the Security Agreements, and, in performing such functions,
shall follow the directions of the Administrative Agent (given at the direction
of, or with the consent of, the Required Lenders or all the Lenders, as the case
may be, as prescribed by subsection 11.1). The Lenders hereby instruct the
Collateral Agent and Administrative Agent to execute and deliver the Security
Agreements on behalf of the Lenders. HomeSide shall compensate the Collateral
Agent for its services as such as from time to time agreed by HomeSide and the
Collateral Agent.
SECTION 11. MISCELLANEOUS
11.1 AMENDMENTS AND WAIVERS. Neither this Agreement nor any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. The Required Lenders may, or, with the written consent of the
Required Lenders, the Administrative Agent may, from time to time, (a) enter
into with HomeSide and HonoMo written amendments, supplements or modifications
hereto and to the other Loan Documents for the purpose of adding any provisions
to this Agreement or the other Loan Documents or changing in any manner the
rights of the Lenders or of the Borrowers hereunder or thereunder or (b) waive,
on such terms and conditions as the Required Lenders or the Administrative
Agent, as the case may be, may specify in such instrument, any of the
requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; PROVIDED, HOWEVER, that no such waiver
and no such amendment, supplement or modification shall (i) reduce the amount or
extend the scheduled date of maturity of any Loan or of any installment thereof,
or reduce the stated rate of any interest or fee payable hereunder or extend the
scheduled date of any payment thereof or increase the aggregate amount or extend
the expiration date of any Lender's Commitments, in each case without the
consent of each Lender affected thereby, or (ii) amend, modify or waive any
provision of this subsection or reduce the percentage specified in the
definition of Required Lenders, or consent to the assignment or transfer by
either Borrower of any of its rights and obligations under this Agreement and
the other Loan Documents, or release any of the Guarantees or (except as
contemplated by the Security Agreements) any portion of the Collateral, or
increase the percentage figures representing the advance rates set forth in
clauses (a) through (d) of subsection 4.1 or clauses (a) through (g) of
subsection 4.2, or amend the definition of "Negative Security Event" or
"Positive Security Event" to change the language set forth in such
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definition that expressly specifies the events that constitute a Negative
Security Event or a Positive Security Event, as the case may be, in each case
without the written consent of all the Lenders, or (iii) amend, modify or waive
any provision of Section 10 relating to the Administrative Agent or the
Collateral Agent without the written consent of the then Administrative Agent or
Collateral Agent, as the case may be; PROVIDED, FURTHER that, notwithstanding
the foregoing, in the event of any sale of HonoMo and the satisfaction of the
conditions set forth in subsection 11.11, the Administrative Agent will release
HonoMo from its obligations under the Subsidiaries Guarantee and will release
the stock of HonoMo from the lien of the HomeSide Pledge Agreement. Any such
waiver and any such amendment, supplement or modification shall apply equally to
each of the Lenders and shall be binding upon the Borrowers, the Lenders, the
Administrative Agent, the Collateral Agent and all future holders of the Loans.
In the case of any waiver, the Borrowers, the Lenders, the Administrative Agent
and the Collateral Agent shall be restored to their former positions and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereon.
11.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows in the case of the Borrowers, the Administrative Agent and the
Collateral Agent and as set forth in Schedule I in the case of the other parties
hereto, or to such other address as may be hereafter notified by the respective
parties hereto:
The Borrowers: HomeSide Lending, Inc.
0000 Xxxxxxxxxx Xxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxx X. Xxxxxxx
Fax: 000-000-0000
with a copy to: Xxxxx Xxxxxx, Esq.
Xxxxxxxx, Wheel r & Xxxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: 000-000-0000
The Administrative Agent: The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx S hwabe
Fax: 000-000-0000
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with a copy to: Chase Loan and Agency Services Group
One Chase Xxxxxxxxx Xxxxx
Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Fax: 000-000-0000
The Collateral Agent: The First National Bank of Boston
000 Xxxxxxx Xxxxxx
Mail Stop: 01-1B-06
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxx, Senior Manager
Fax: 000-000-0000
PROVIDED that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received, and any notices to or upon
the Collateral Agent pursuant to the Security Agreements shall be given as
provided therein.
11.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
11.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans hereunder.
11.5 PAYMENT OF EXPENSES AND TAXES. HomeSide agrees (a) to pay
or reimburse each of the Administrative Agent and the Collateral Agent for all
its reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent, (b) to pay or reimburse each Lender, the Administrative
Agent and the Collateral Agent for all its reasonable costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the other Loan Documents and any such other documents,
including, without limitation, the fees and disbursements of counsel to each
Lender and of counsel to the Administrative Agent and the Collateral Agent (c)
to pay, and indemnify and hold harmless each Lender, the Administrative Agent
and the Collateral Agent from, any and all recording and filing fees and any and
all liabilities with respect to, or
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resulting from any delay in paying, stamp, excise and other taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, and indemnify and hold harmless each
Lender and each of the Administrative Agent, the Collateral Agent, the
Syndication Agent and the Documentation Agent (each, an "indemnified person")
from and against, any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement or the other Loan Documents or
the use of the proceeds of the Loans (including, without limitation, in
connection with the Acquisitions) and any such other documents, including,
without limitation, any of the foregoing relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of HomeSide, any of its Subsidiaries or any of the Premises (all the
foregoing in this clause (d), collectively, the "indemnified liabilities"),
PROVIDED that HomeSide shall have no obligation hereunder to any indemnified
person with respect to indemnified liabilities arising from the gross negligence
or willful misconduct of such indemnified person. The agreements in this
subsection shall survive repayment of the Loans and all other amounts payable
hereunder.
11.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrowers, the Lenders, the Administrative Agent, the Collateral Agent and their
respective successors and assigns, except that neither Borrower may assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
lending business and in accordance with applicable law, at any time sell to one
or more banks or other entities ("PARTICIPANTS") participating interests in any
Loan owing to such Lender, any Commitment of such Lender or any other interest
of such Lender hereunder and under the other Loan Documents. In the event of any
such sale by a Lender of a participating interest to a Participant, such
Lender's obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Loan for
all purposes under this Agreement and the other Loan Documents, and the
Borrowers and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. No Lender shall
be entitled to create in favor of any Participant, in the participation
agreement pursuant to which such Participant's participating interest shall be
created or otherwise, any right to vote on, consent to or approve any matter
relating to this Agreement or any other Loan Document except for those specified
in clause (i) of the proviso to subsection 11.1. Each Borrower agrees that if
amounts outstanding under this Agreement are due or unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall, to the maximum extent permitted by applicable
law, be deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its
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participating interest were owing directly to it as a Lender under this
Agreement, PROVIDED that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in subsection 11.7(a) as fully as if it were a
Lender hereunder. Each Borrower also agrees that each Participant shall be
entitled to the benefits of subsections 3.9, 3.10 and 3.11 with respect to its
participation in the Commitments and the Loans outstanding from time to time as
if it were a Lender; PROVIDED that, in the case of subsection 3.10, such
Participant shall have complied with the requirements of said subsection and
PROVIDED, FURTHER, that no Participant shall be entitled to receive any greater
amount pursuant to any such subsection than the transferor Lender would have
been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender may, in the ordinary course of its commercial
lending business and in accordance with applicable law, at any time and from
time to time assign to any Lender or any affiliate thereof or, with the consent
of HomeSide and the Administrative Agent (which in each case shall not be
unreasonably withheld), to an additional bank or financial institution (an
"ASSIGNEE") all or any part of its rights and obligations under this Agreement
and the other Loan Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit I, executed by such Assignee, such
assigning Lender (and, in the case of an Assignee that is not then a Lender or
an affiliate thereof, by HomeSide and the Administrative Agent) and delivered to
the Administrative Agent for its acceptance and recording in the Register,
PROVIDED that, in the case of any such assignment to an additional bank or
financial institution, the sum of the aggregate principal amount of the Loans
and the aggregate amount of the unused Commitments being assigned and, if such
assignment is of less than all of the rights and obligations of the assigning
Lender, the sum of the aggregate principal amount of the Loans and the aggregate
amount of the unused Commitments remaining with the assigning Lender are each
not less than $10,000,000 (or such lesser amount as may be agreed to by HomeSide
and the Administrative Agent), and PROVIDED, FURTHER, that no assignment may be
made by any Lender that does not include pro-rata Tranche A Commitments, Tranche
B Commitments, Tranche A Loans and Tranche B Loans in the same relative
proportions as those of the amounts of such Commitments and Loans held by such
Lender immediately prior to giving effect to such assignment and PROVIDED,
FURTHER, that any such assignment that would otherwise include an interest in a
Balance-Based Loan may only become effective on the last day of the Interest
Period applicable thereto. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with a Commitment as set forth therein,
and (y) the assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such assigning Lender shall cease to be a party hereto; it being understood that
any indemnification in this Agreement in favor of such Lender that by its terms
survives termination of this Agreement shall continue to inure to the benefit of
such Lender). Notwithstanding any provision of this paragraph (c) and paragraph
(e) of this subsection, the consent of HomeSide
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shall not be required for any assignment which occurs at any time when any of
the events described in Section 9(f) shall have occurred and be continuing.
(d) The Administrative Agent, on behalf of each of the
Borrowers, shall maintain at the address of the Administrative Agent referred to
in subsection 11.2 a copy of each Assignment and Acceptance delivered to it and
a register (the "REGISTER") for the recordation of the names and addresses of
the Lenders and the Commitments of, and principal amounts of the Loans owing to,
each Lender from time to time. The entries in the Register shall be conclusive,
in the absence of manifest error, and the Borrowers, the Administrative Agent
and the Lenders may (and, in the case of any Loan or other obligation hereunder
not evidenced by a Note, shall) treat each Person whose name is recorded in the
Register as the owner of a Loan or other obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Loan or other
obligation hereunder not evidenced by a Note shall be effective only upon
appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by HomeSide or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender or an affiliate thereof, by HomeSide and the Administrative
Agent) together with payment to the Administrative Agent of a registration and
processing fee of $3,500, the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to the Lenders and HomeSide.
(f) Each Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "TRANSFEREE") and any prospective Transferee
any and all financial information in such Lender's possession concerning such
Borrower and its Affiliates which has been delivered to such Lender by or on
behalf of such Borrower pursuant to this Agreement or which has been delivered
to such Lender by or on behalf of such Borrower in connection with such Lender's
credit evaluation of such Borrower and its Affiliates prior to becoming a party
to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
11.7 ADJUSTMENTS; SET-OFF. (a) If any Lender (a "BENEFITTED
LENDER") shall at any time receive any payment of all or part of its Loans then
due and owing, or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in subsection 9(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect
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of such other Lender's Loans then due and owing, or interest thereon, such
benefitted Lender shall purchase for cash from the other Lenders a participating
interest in such portion of each such other Loans or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefitted Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
PROVIDED, HOWEVER, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to
either Borrower, any such notice being expressly waived by each Borrower to the
extent permitted by applicable law, upon any amount becoming due and payable by
either Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of either Borrower. Each Lender
agrees promptly to notify HomeSide and the Administrative Agent after any such
set-off and application made by such Lender, PROVIDED that the failure to give
such notice shall not affect the validity of such set-off and application.
11.8 BALANCE LENDERS. Prior to the date of this Agreement,
HomeSide has designated the Lenders that will be the Balance Lenders initially,
and will cause each such Balance Lender to enter into a Balance Lender Agreement
with HomeSide on or before the Closing Date. From time to time after the Closing
Date, any Lender may, upon the request of HomeSide, agree to become a Balance
Lender. In order to become a Balance Lender, a Lender shall enter into a Balance
Lender Agreement with HomeSide, and HomeSide and such Lender shall give the
Administrative Agent notice thereof; such Lender shall be permitted to make
Balance-Based Loans as a Balance Lender on any Borrowing Date that is at least
ten days after receipt by the Administrative Agent of such notice.
11.9 RELEASE OF COLLATERAL UPON OCCURRENCE OF POSITIVE
SECURITY EVENT. Upon the occurrence of a Positive Security Event, the
Administrative Agent will, at the request of HomeSide, direct the Collateral
Agent to take, and the Collateral Agent will take, at the expense of the
Borrowers, all necessary actions to release its security interest in all
Collateral, and any Collateral subject to such security interests, in accordance
with the Security Agreements (other than stock pledged pursuant to the Pledge
Agreements).
11.10 AUTHORITY OF HOMESIDE ON BEHALF OF HONOMO. HonoMo hereby
authorizes HomeSide to take any action hereunder and under each Loan Document to
which HonoMo is a party on its behalf, including delivery of Borrowing Notices,
Payment Notices and Conversion Notices under Section 2 and execution and
delivery of amendments and waivers to any Loan Document, appoints HomeSide its
attorney-in-fact for all purposes hereunder, and hereby ratifies all actions
taken by HomeSide in such capacity. HonoMo and HomeSide agree that the
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Administrative Agent, the Collateral Agent and the Lenders shall be entitled to
rely on any instruction, notice or other action by HomeSide on behalf of HonoMo
as if such instruction, notice or other action were given or taken by HonoMo.
HonoMo agrees that any notice affecting it or applicable to it or its Loans
hereunder given to HomeSide shall be deemed to be notice effective for the
purposes thereof to HonoMo.
11.11 TERMINATION OF HONOMO AS BORROWER. With 10 days prior
written notice by HomeSide to the Administrative Agent, the rights and
obligations of HonoMo as a Borrower hereunder may be terminated, after the
effectiveness of which no Loans will be made to HonoMo, no assets of HonoMo will
be included in any Borrowing Base, and the HonoMo Tranche A Sublimit and the
HonoMo Tranche B Sublimit will each be deemed to be zero, PROVIDED that (i) in
order for such termination to be effective, no Loans, interest, fees, expenses
or other obligations owing or payable by HonoMo may be outstanding or payable,
and no Default or Event of Default shall have occurred and be continuing or
result from giving effect thereto, (ii) HonoMo will execute and deliver such
instruments and documents requested by the Administrative Agent in connection
therewith, and (iii) all obligations and liabilities of HonoMo under subsection
11.6 shall survive such termination and remain in full force and effect. Upon
such effectiveness in connection with any sale by HomeSide of HonoMo, the
Collateral Agent and the Administrative Agent, respectively, will take, at the
request of HomeSide and at the expense of HomeSide and HonoMo, all necessary
actions to release its security interest in all Collateral under the HonoMo
Security Agreement and the Collateral under the HomeSide Pledge Agreement
representing stock issued by HonoMo, and HonoMo will automatically be released
from its obligations under the Subsidiary Guarantee, PROVIDED that at the time
of such effectiveness and release, the consolidated total assets of HonoMo and
its Subsidiaries represent less than 5% of the consolidated total assets of
HomeSide and its Subsidiaries, in each case determined in accordance with GAAP.
11.12 COUNTERPARTS. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be lodged with HomeSide
and the Administrative Agent.
11.13 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.14 INTEGRATION. This Agreement and the other Loan Documents
represent the entire agreement of the Borrowers, the Administrative Agent and
the Lenders with respect to the subject matter hereof and thereof, and there are
no promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof or thereof not expressly
set forth or referred to herein or in the other Loan Documents.
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11.15 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
11.16 SUBMISSION TO JURISDICTION; WAIVERS. Each Borrower
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to HomeSide at its address set forth in subsection 11.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or
consequential damages.
11.17 ACKNOWLEDGEMENTS. Each Borrower hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent, the Collateral Agent nor
any Lender has any fiduciary relationship with or duty to either
Borrower arising out of or in connection with this Agreement or any of
the other Loan Documents, and the relationship between Administrative
Agent, the Collateral Agent and the Lenders, on the one hand, and the
Borrowers, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
118
112
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrowers and the
Lenders.
11.18 WAIVERS OF JURY TRIAL. THE BORROWERS, THE ADMINISTRATIVE
AGENT, THE COLLATERAL AGENT AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
119
113
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
HOMESIDE LENDING, INC.
By:
------------------------------------------
Title:
HONOLULU MORTGAGE COMPANY, INC.
By:
------------------------------------------
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Lender
By:
------------------------------------------
Title:
THE FIRST NATIONAL BANK OF BOSTON,
as Collateral Agent
By:
------------------------------------------
Title:
NATIONSBANK OF TEXAS, N.A., as
Syndication Agent and as a Lender
By:
------------------------------------------
Title:
120
114
XXXXXX GUARANTY TRUST COMPANY OF
NEW YORK, as Senior Managing Agent and as a
Lender
By:
------------------------------------------
Title: Vice President
121
115
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Managing Agent
and as a Lender
By:
------------------------------------------
Title:
122
116
CANADIAN IMPERIAL BANK OF
COMMERCE, as a Managing Agent and as a
Lender
By:
------------------------------------------
Title:
123
117
CREDIT LYONNAIS, NEW YORK BRANCH, as
a Managing Agent and as a Lender
By:
------------------------------------------
Title:
124
000
XXXXX XXXX XX XXXXXXXXXXX, XXX
XXXX BRANCH, as a Managing Agent and
as a Lender
By:
------------------------------------------
Title:
By:
------------------------------------------
Title:
125
119
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, as a Managing Agent
and as a Lender
By:
------------------------------------------
Title:
By:
------------------------------------------
Title:
126
000
XXX XXXX XX XXX XXXX, as a Managing
Agent and as a Lender
By:
------------------------------------------
Title:
127
121
BANKERS TRUST COMPANY, as a Co-Agent
and as a Lender
By:
------------------------------------------
Title:
128
122
BANQUE NATIONALE DE PARIS, as a
Co-Agent and as a Lender
By:
------------------------------------------
Title:
By:
------------------------------------------
Title:
129
123
MELLON BANK, N.A., as a Co-Agent
and as a Lender
By:
------------------------------------------
Title:
130
124
COMMERZBANK AKTIENGESELLSCHAFT,
ATLANTA AGENCY, as Co-Agent and as a
Lender
By:
------------------------------------------
Title:
By:
------------------------------------------
Title:
131
125
FLEET BANK, N.A., as a Co-Agent and
as a Lender
By:
------------------------------------------
Title:
132
126
THE NATIONAL BANK OF KUWAIT
By:
------------------------------------------
Title:
133
000
XXXXX XXXXX XXXXXXXX XXXX XX XXXXX
XXXXXXXX
By:
------------------------------------------
Title:
134
128
THE FUJI BANK, LIMITED, NEW YORK
BRANCH
By:
------------------------------------------
Title:
135
129
BANK OF TOKYO - MITSUBISHI TRUST
COMPANY
By:
------------------------------------------
Title:
136
130
THE SUMITOMO BANK, LIMITED
By:
------------------------------------------
Title:
137
131
SUNTRUST BANK, INC.
By:
------------------------------------------
Title:
138
132
THE TOYO TRUST & BANKING CO., LTD.
By:
------------------------------------------
Title:
139
133
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, ATLANTA AGENCY
By:
------------------------------------------
Title:
140
134
PNC BANK KENTUCKY, INC.
By:
------------------------------------------
Title:
141
135
THE SAKURA BANK, LIMITED
ATLANTA AGENCY
By:
------------------------------------------
Title:
142
136
COMPASS BANK
By:
------------------------------------------
Title:
143
137
BANQUE PARIBAS
By:
------------------------------------------
Title:
By:
------------------------------------------
Title:
144
138
COMERICA BANK
By:
------------------------------------------
Title:
145
139
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR
By:
------------------------------------------
Title:
By:
------------------------------------------
Title:
146
140
THE DAI-ICHI KANGYO BANK, LIMITED
ATLANTA AGENCY
By:
------------------------------------------
Title:
147
141
DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK,
CAYMAN ISLAND BRANCH
By:
------------------------------------------
Title:
By:
------------------------------------------
Title:
148
142
THE FIRST NATIONAL BANK OF CHICAGO
By:
------------------------------------------
Title:
149
143
LTCB TRUST COMPANY
By:
------------------------------------------
Title:
150
000
XXXXXXXX XXXX XXXX XX XXXXXXXX
By:
------------------------------------------
Title:
151
145
KREDIETBANK N.V., GRAND CAYMAN
BRANCH
By:
------------------------------------------
Title:
152
146
THE SANWA BANK, LIMITED, ATLANTA
AGENCY
By:
------------------------------------------
Title:
153
147
THE TOKAI BANK, LIMITED
ATLANTA AGENCY
By:
------------------------------------------
Title:
154
148
THE YASUDA TRUST AND BANKING
COMPANY, LIMITED, NEW YORK BRANCH
By:
------------------------------------------
Title:
155
149
FIRST TRUST BANK
By:
------------------------------------------
Title:
156
150
BANCA MONTE DEI PASCHI DI SIENA
SPA
By:
------------------------------------------
Title:
By:
------------------------------------------
Title:
157
151
ALLIED IRISH BANK
By:
------------------------------------------
Title:
158
152
PT. BANK NEGARA INDONESIA (PERSERO),
TBK.
By:
------------------------------------------
Title:
159
153
GUARANTY FEDERAL
By:
------------------------------------------
Title:
160
154
CAISSE NATIONALE DE CREDIT AGRICOLE
By:
------------------------------------------
Title:
161
155
THE SUMITOMO TRUST AND BANKING CO.
LTD., LOS ANGELES AGENCY
By:
------------------------------------------
Title:
