FIFTH AMENDED AND RESTATED
CREDIT AGREEMENT
BY AND AMONG
NEW CENTURY MORTGAGE
CORPORATION,
NC CAPITAL CORPORATION,
THE LENDERS FROM TIME TO TIME
PARTY THERETO,
AND
U.S. BANK NATIONAL ASSOCIATION
DATED AS OF MAY 23, 2001
TABLE OF CONTENTS
SECTION I. DEFINITIONS AND ACCOUNTING TERMS....................................................1
1.01 Certain Defined Terms............................................................1
1.02 Accounting Terms................................................................14
1.03 Computation of Time Periods.....................................................15
1.04 Other Definitional Terms........................................................15
SECTION II. THE CREDIT FACILITIES.............................................................15
2.01 The Warehousing Facility and the Swingline Facility.............................15
2.02 Interest on the Note; Balances Deficiency Fees; Continuations and Conversions...20
2.03 Payments and Computations.......................................................22
2.04 Setoff..........................................................................22
2.05 Increased Capital Requirements..................................................23
2.06 Provisions Relating to Eurodollar Advances and Balance Funded Rate Advances.....23
SECTION III. REPRESENTATIONS AND WARRANTIES...................................................25
3.01 Formation; Powers; Good Standing; Subsidiaries; Agency Status...................25
3.02 Authorization; No Conflict; Governmental Consents; Binding Effect...............25
3.03 Financial Condition.............................................................26
3.04 Title to Property; Liens........................................................27
3.05 Litigation; Adverse Facts.......................................................27
3.06 Other Agreements; Performance...................................................27
3.07 Use of Proceeds.................................................................28
3.08 Taxes...........................................................................28
3.09 ERISA...........................................................................28
3.10 Governmental Regulation.........................................................28
3.11 Indebtedness....................................................................28
3.12 No Material Adverse Event.......................................................29
3.13 Licenses and Permits............................................................29
3.14 Guarantees......................................................................29
3.15 Accuracy and Completeness of Information........................................29
SECTION IV. COVENANTS OF THE BORROWERS........................................................29
4.01 Financial Statements and Other Reports..........................................29
4.02 Corporate Existence.............................................................33
4.03 Compliance with Laws, Taxes, etc................................................33
4.04 ERISA...........................................................................33
4.05 Assets and Insurance............................................................33
4.06 Inspection, Visitation, etc.....................................................34
4.07 Further Assurances..............................................................34
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4.08 Indebtedness....................................................................34
4.09 Liens...........................................................................35
4.10 Investments.....................................................................36
4.11 Guarantees......................................................................37
4.12 Restriction on Fundamental Changes..............................................37
4.13 Restricted Payments.............................................................38
4.14 Net Worth.......................................................................38
4.15 Minimum Liquidity...............................................................39
4.16 Leverage Ratio..................................................................39
4.17 Subsidiaries....................................................................39
4.18 Affiliate Transactions..........................................................39
4.19 Escrow Imbalances...............................................................39
4.20 Inconsistent Agreements.........................................................39
4.21 Closing Procedures..............................................................40
4.22 Underwriting....................................................................40
4.23 Independence of Covenants.......................................................40
SECTION V. CONDITIONS PRECEDENT...............................................................40
5.01 Conditions Precedent to Effectiveness...........................................40
5.02 Conditions Precedent to all Loans...............................................42
SECTION VI. EVENTS OF DEFAULT; REMEDIES.......................................................43
6.01 Events of Default...............................................................43
6.02 Remedies........................................................................45
SECTION VII. THE AGENT........................................................................45
7.01 Appointment and Authorization...................................................45
7.02 Note Holders....................................................................45
7.03 Consultation With Counsel.......................................................45
7.04 Documents.......................................................................46
7.05 Agent and Affiliates............................................................46
7.06 Action by Agent.................................................................46
7.07 Credit Analysis.................................................................46
7.08 Notices of Event of Default, etc................................................46
7.09 Indemnification.................................................................47
7.10 Payments........................................................................47
7.11 Sharing of Payments.............................................................48
7.12 Successor Agent.................................................................48
7.13 Inspection......................................................................49
7.14 Notice of New Investors.........................................................49
SECTION VIII. MISCELLANEOUS...................................................................49
8.01 Waiver..........................................................................49
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8.02 Notices.........................................................................49
8.03 Expenses; Indemnification.......................................................49
8.04 Confidentiality.................................................................50
8.05 Releases, Amendments, Waivers, Consents and Exercise of Remedies................50
8.06 Binding Effect; Assignments and Participations; Transferees; New Lenders;
Commitment Increases............................................................51
8.07 Governing Law and Construction..................................................52
8.08 Consent to Jurisdiction.........................................................52
8.09 Waiver of Jury Trial............................................................53
8.10 Survival of Agreement...........................................................53
8.11 Captions........................................................................53
8.12 Entire Agreement................................................................53
8.13 Counterparts....................................................................53
8.14 Borrowers Acknowledgments.......................................................53
8.15 Exiting Lenders.................................................................54
8.16 Amendments, Waivers and Modification Fees.......................................54
8.17 Joint and Several Obligations. ................................................54
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FIFTH AMENDED AND RESTATED
CREDIT AGREEMENT
FIFTH AMENDED and RESTATED CREDIT AGREEMENT dated as of May 23, 2001 by
and among NEW CENTURY MORTGAGE CORPORATION, a California corporation ("NCMC" or
"Borrower"), NC CAPITAL CORPORATION, a California corporation ("NCCC" or
"Borrower" and together with NCMC, the "Borrowers"), the lenders from time to
time party hereto (each a "Lender" and collectively, the "Lenders"), and U.S.
BANK NATIONAL ASSOCIATION, as agent for the Lenders (in such capacity, together
with any successor agents appointed hereunder, the "Agent").
WHEREAS, the Borrowers, the Existing Lenders, which include certain of the
Lenders, and the Agent are parties to that certain Fourth Amended and Restated
Credit Agreement dated as of May 26, 1999 (as amended, the "Existing Credit
Agreement") pursuant to which the Existing Lenders provided NCMC with a
revolving mortgage warehousing credit facility and USBNA (defined below)
provided NCMC with a swingline facility and working capital credit facility; and
WHEREAS, the Borrowers have requested that the Lenders and the Agent amend
certain provisions of and restate the Existing Credit Agreement, and that
certain of the Existing Lenders party to the Existing Credit Agreement cease to
be parties to the Agreement;
Accordingly, the parties hereto hereby agree as follows:
SECTION I. DEFINITIONS AND ACCOUNTING TERMS.
1.01 CERTAIN DEFINED TERMS. As used herein, the terms defined in the
introductory paragraphs hereof shall have the meanings given them therein and
the following terms shall have the following respective meanings (such terms to
be equally applicable to both the singular and plural forms of the terms
defined):
"ADJUSTED EURODOLLAR RATE": on any date of determination, the rate
(rounded upward, if necessary, to the next higher one hundredth of one
percent) determined by dividing the Eurodollar Rate for such date by 1.00
MINUS the Eurodollar Reserve Percentage.
"ADJUSTED LEVERAGE RATIO": on any date of determination, the ratio
of (a) Total Liabilities to (b) Adjusted Tangible Net Worth.
"ADJUSTED TANGIBLE NET WORTH": on any date of determination, the
Tangible Net Worth of NCFC MINUS 25% of the amount by which the book value
of Junior Securitization Interests included in calculating Tangible Net
Worth exceeds Indebtedness of the type described in Section 4.08(d).
"ADVANCE": (a) a Prime Rate Advance, (b) a Balance Funded Rate
Advance, or (c) a Eurodollar Advance.
"AFFILIATE": with respect to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with,
such Person, whether through the ownership of voting securities, by
contract or otherwise.
"AGREEMENT": this Fifth Amended and Restated Credit Agreement, as
amended, supplemented, restated or otherwise modified and in effect from
time to time.
"APPLICABLE MARGIN": with respect to:
(a) Prime Rate Advances, 0%; and
(b) Eurodollar Advances, 1.625%.
"BALANCE CALCULATION PERIOD": each calendar quarter after the
Effective Date to and including the later of the date on which the Notes
shall be paid in full or the Termination Date, except that the first
Balance Calculation Period shall commence on the Effective Date and the
last Balance Calculation Period shall end on the later of the date on
which the Notes shall have been paid in full or the Termination Date.
"BALANCE FUNDED RATE ADVANCE": an outstanding Loan that bears
interest as provided in Section 2.02(a)(i).
"BALANCES DEFICIENCY": as defined in Section 2.02(a)(i).
"BALANCES DEFICIENCY FEE": as defined in Section 2.02(a)(i).
"BALANCES SURPLUS": as defined in Section 2.02(a)(i).
"BORROWERS": NCMC and NCCC.
"BORROWING BASE": on any date of determination, an amount equal to
100% of the Warehousing Collateral Value of the Collateral, as determined
by the Agent from its records.
"BORROWING DATE": the Business Day specified by NCMC in a
Confirmation of Borrowing/Paydown/Conversion as the date on which it
requests the Lenders to make Warehousing Loans or USBNA to make a
Swingline Loan.
"BUSINESS DAY": any day of the year other than a Saturday, Sunday or
other day on which commercial banks in Minneapolis, Minnesota are required
or authorized to close.
"CASH": all cash and cash equivalents, as shown on a consolidated
balance sheet of any Borrower prepared in accordance with GAAP, including,
without limitation, all deposit accounts of such Borrower with any Lender
or any other financial institution.
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"CHANGE OF CONTROL": the occurrence, after the Signing Date, of any
of the following circumstances: (a) NCFC not owning, directly or
indirectly, all of the issued and outstanding capital stock of NCMC; or
(b) any Person, or two or more Persons acting in concert, other than the
Management Shareholders, acquiring beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended), directly or indirectly, of
securities of NCFC (or other securities convertible into such securities)
representing 35% or more of the combined voting power of all securities of
NCFC entitled to vote in the election of directors; (c) any Person, or two
or more Persons acting in concert, other than the Management Shareholders,
acquiring by contract or otherwise, or entering into a contract or
arrangement which upon consummation will result in its or their
acquisition of, control over securities of NCFC (or other securities
convertible into such securities) representing 35% or more of the combined
voting power of all securities of NCFC entitled to vote in the election of
directors; or (d) Xxxxxx Xxxx ceasing to be Chairman and Chief Executive
Officer of NCFC.
"CODE": the Internal Revenue Code of 1986, together with all
amendments from time to time thereto.
"COLLATERAL": as defined in the Pledge and Security Agreement, and
as defined in the Servicing Security Agreement.
"COLLATERAL ACCOUNT": account number 1731-0097-1378 of NCMC with
the Agent.
"COMMITMENT": as to any Lender, the obligation of such Lender to
make Loans pursuant to Section 2.01(a).
"COMMITMENT AMOUNT": as to any Lender, the amount set opposite such
Lender's name as its "Commitment" in Schedule 1.01(b), as the same may be
(i) reduced pursuant to Section 2.01(g), (ii) changed as the result of an
assignment pursuant to Section 8.06(a) or (iii) increased pursuant to
Section 8.06(b).
"COMPANY SECURITIZATION TRANSACTION": an issuance of Mortgage-backed
Securities by either Borrower, or by SBRC, Xxxxx Xxxxxx, or any other
registered broker-dealer acceptable to the Agent in its sole discretion,
or an Affiliate of any of them, on behalf of either Borrower, through a
trust or other entity created by either Borrower, SBRC, Xxxxx Xxxxxx or
any other registered broker-dealer acceptable to the Agent in its sole
discretion, which Mortgage-backed Securities are either secured (in whole
or in part) by Mortgage Loans originated or acquired by such Borrower or
evidence the entire beneficial ownership interest therein, and in
connection with which one or more Junior Securitization Interests are
issued to such Borrower or an Affiliate of such Borrower.
"COMPLIANCE/BORROWING BASE CERTIFICATE": a certificate in the form
of Exhibit A.
"CONFIRMATION OF BORROWING/PAYDOWN/CONVERSION": a confirmation in
the form of Exhibit B.
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"DAILY LEVERAGE RATIO": on any date of determination, the ratio of
(a) Total Liabilities of NCFC and its Subsidiaries on such date to (b)
Tangible Net Worth of NCFC and its Subsidiaries as of the last day of the
most recently completed month.
"EFFECTIVE DATE": the date on or after the Signing Date on which all
of the conditions precedent set forth in Section 5.01 shall have been
satisfied or waived in writing by the Lenders.
"EFFECTIVE DATE FEE PERCENTAGE": as defined in Section 2.01(j).
"ELIGIBLE SERVICING PORTFOLIO": on any date of determination, the
aggregate unpaid principal balance of all Mortgage Loans owned by Persons
other than NCMC that are serviced by NCMC pursuant to Eligible Servicing
Rights, excluding Servicing Rights that are subject to an executed and
delivered agreement to sell the same.
"ELIGIBLE SERVICING RIGHTS": all rights of NCMC held for its own
account (and not as nominee or subservicer), whether pursuant to a
Servicing Contract or otherwise, to service Mortgage Loans or Mortgage
Loan pools, other than rights to service Mortgage Loans:
(a) pursuant to Recourse Servicing Contracts;
(b) with respect to which any payment is more than 59 days
past due; or
(c) with respect to which any obligor is the subject of a
bankruptcy, debt arrangement or other proceeding under any
insolvency law.
"ERISA": the Employee Retirement Income Security Act of 1974,
together with all amendments from time to time thereto.
"ERISA AFFILIATE": any trade or business (whether or not
incorporated) that is a member of a group that is treated as a single
employer under Section 414 of the Code of which either Borrower is a
member.
"EURODOLLAR ADVANCE": an outstanding Warehousing Loan that bears
interest as provided in Section 2.02(a)(iii).
"EURODOLLAR RATE": on any date of determination, the average offered
rate for deposits in United States dollars having a maturity of thirty
(30) days (rounded upward, if necessary, to the nearest 1/16 of 1%) for
delivery of such deposits on the second Eurodollar Business Day after such
date of determination, which appears on the Telerate screen, page 3750, as
of 11:00 a.m., London time (or such other time as of which such rate
appears), on such date of determination, or the rate for such deposits
determined by the Agent at such time based on such other published service
of general application as shall be selected by the Agent for such purpose;
PROVIDED, that in lieu of determining the rate in the foregoing manner,
the Agent may determine the rate based on rates at which thirty (30) day
United States dollar deposits are offered to the entity which is the Agent
in
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the interbank Eurodollar market at such time for delivery in Immediately
Available Funds on the second Eurodollar Business Day after such date of
determination in an amount approximately equal to the Advance as made by
the entity which is the Agent to which such rate is to apply (rounded
upward, if necessary, to the nearest 1/16 of 1%). "Telerate screen, page
3750" means the display designated as such on the Telerate reporting
system operated by Telerate System Incorporated (or such other page as may
replace such page 3750 for the purpose of displaying London interbank
offered rates of major banks for U.S. Dollar deposits).
"EURODOLLAR RESERVE PERCENTAGE": on any date of determination, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member
bank of the Federal Reserve System, with deposits comparable in amount to
those held by USBNA, in respect of "Eurocurrency Liabilities" (or in
respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Eurodollar Rate Advances is
determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of a Bank to United States
residents).
"EVENT OF DEFAULT": as defined in Section 6.01.
"EXISTING LENDERS": USBNA, Guaranty Bank, formerly known as Guaranty
Federal Bank, F.S.B., The Chase Manhattan Bank, successor-by-merger to
Chase Bank of Texas, N.A., Residential Funding Corporation, Washington
Mutual Bank, FA, formerly known as Bank United, and Union Bank of
California, N.A.
"EXIT DATE": the Effective Date in the case of The Chase Manhattan
Bank, successor-by-merger to Chase Bank of Texas, N.A., and Union Bank of
California, N.A., and July 31, 2001, in the case of Washington Mutual
Bank, FA, formerly known as Bank United.
"EXITING LENDERS": The Chase Manhattan Bank, successor-by-merger to
Chase Bank of Texas, N.A., Union Bank of California, N.A. and, effective
July 31, 2001, Washington Mutual Bank, FA, formerly known as Bank United.
"EXISTING WAREHOUSING LOANS": as of the Exit Date, with respect to
The Chase Manhattan Bank, successor-by-merger to Chase Bank of Texas,
N.A., and Union Bank of California, N.A., the outstanding "Warehousing
Loans" (as such term is defined in the Existing Credit Agreement) made by
those Exiting Lenders under the Existing Credit Agreement; and, with
respect to Washington Mutual Bank, FA, formerly known as Bank United, the
outstanding Warehousing Loans made by that Exiting Lender under this
Agreement.
"XXXXXX XXX": Xxxxxx Xxx, a corporation created under the laws of
the United States, and any successor thereto.
"FAIR MARKET VALUE": as defined in Exhibit E.
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"FEDERAL FUNDS EFFECTIVE RATE": on any date of determination, the
weighted average of the quotations for such date for overnight federal
funds transactions received by the Agent from three (3) federal funds
brokers of recognized standing selected by the Agent; PROVIDED, that in
lieu of determining the rate in the foregoing manner, the Agent may
substitute the per annum rate for such transactions displayed on the
Telerate screen, page 120, at 10:00 A.M. (Minneapolis time) on such date
or, if such date is not a Business Day, the most recent Business Day, or
the equivalent rate determined by the Agent at such time based on such
other published service of general application as shall be selected by the
Agent for such purpose.
"FIXED RATE": as defined in Section 2.02(a)(i).
"FLOATING RATE ADVANCE": a Prime Rate Advance or a Eurodollar
Advance.
"XXXXXXX MAC": Xxxxxxx Mac, a corporation created under the laws of
the United States, and any successor thereto.
"GAAP": generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as may be approved
by a significant segment of the accounting profession, which are
applicable to the circumstances on any date of determination.
"XXXXXX MAE": the Government National Mortgage Association, an
agency of the United States government, and any successor thereto.
"GREENWICH": Greenwich Capital Financial Products, Inc.
"GUARANTEE": any obligation, contingent or otherwise, of any Person
guaranteeing or having the economic effect of guaranteeing any
Indebtedness of any other Person (the "Primary Obligor") in any manner,
whether directly or otherwise, (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any direct or
indirect security therefor, (b) to purchase property, securities, or
services for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness, (c) to maintain working capital, equity
capital, or other financial statement condition of the Primary Obligor so
as to enable the Primary Obligor to pay such Indebtedness or otherwise to
protect the owner thereof against loss in respect thereof, or (d) entered
into for the purpose of assuring in any manner the owner of such
Indebtedness of the payment of such Indebtedness or to protect such owner
against loss in respect thereof; PROVIDED, that the term "Guarantee" shall
not include endorsements for collection or deposit, in each case in the
ordinary course of business.
"GUARANTY": the Guaranty dated as of May 29, 1998 executed and
delivered in connection with the Existing Credit Agreement, as the same
may have been and may hereafter be amended, supplemented, reaffirmed or
restated from time to time.
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"HEDGING ARRANGEMENTS": any agreements or other arrangements
(including, without limitation, interest rate swap agreements, interest
rate cap agreements and forward sale agreements) entered into to protect
the Borrowers against changes in interest rates or in the value of any
assets of the Borrowers.
"IMMEDIATELY AVAILABLE FUNDS": funds with good value on the day and
in the city in which payment is received.
"INDEBTEDNESS": with respect to any Person at any time, without
duplication, all obligations of such Person which, in accordance with
GAAP, consistently applied, should be classified as liabilities on an
unconsolidated balance sheet of such Person, but in any event shall
include: (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (c) all obligations of such Person upon which
interest charges are customarily paid or accrued, (d) all obligations of
such Person under conditional sale or other title retention agreements
relating to property purchased by such Person, (e) all obligations of such
Person issued or assumed as the deferred purchase price of property or
services, but excluding accrued expenses and trade payables incurred and
paid in the ordinary course of business, (f) all obligations of others
secured by any Lien on property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (g) all
capitalized lease obligations of such Person, (h) all obligations of such
Person in respect of interest rate protection agreements, (i) all
obligations of any partnership or joint venture as to which such Person is
or may become personally liable, and (j) all Guarantees by such Person of
Indebtedness of others.
"INVESTMENT": with respect to any Person, any direct or indirect
purchase or other acquisition by that Person of, or a beneficial interest
in, stock or other securities of any other Person, or any direct or
indirect loan, advance (other than advances to employees for moving and
travel expenses, drawing accounts and similar expenditures in the ordinary
course of business) or capital contribution by that Person to any other
Person, including all Indebtedness and accounts receivable from that other
Person which are not current assets or did not arise from sales to that
other Person in the ordinary course of business.
"INVESTOR": any financially responsible Person in the business of
purchasing Mortgage Loans designated by the Borrowers and approved by the
Agent (which approval shall not be unreasonably withheld) with respect to
Mortgage Loans of a particular type; PROVIDED, that the Agent or the
Required Lenders may at any time, by written notice to the Borrowers,
reject any Investor designated by the Borrowers or designate any Investor
as no longer acceptable. Upon receipt of such written notice, the
Person(s) named in such notice to the Borrowers shall no longer be
considered Investors hereunder.
"JUNIOR SECURITIZATION INTERESTS": a Mortgage-backed Security
created in a Company Securitization Transaction that represents a
subordinated right to receive principal or interest payments on the
underlying Mortgage Loans (whether or not such subordination arises only
under particular circumstances).
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"LEVERAGE RATIO": on any date of determination, the ratio of (a)
Total Liabilities to (b) Tangible Net Worth.
"LIEN": any security interest, mortgage, pledge, lien, charge,
encumbrance, title retention agreement or analogous instrument, in, of, or
on any of the assets or properties, now owned or hereafter acquired, of
any Person, whether arising by agreement or operation of law.
"LOAN DOCUMENTS": this Agreement, the Notes, the Pledge and Security
Agreement, the Servicing Security Agreement, the Guaranty and all other
agreements, instruments, certificates and other documents executed and
delivered pursuant hereto or thereto or in connection herewith or
therewith, as the same may be supplemented, amended or otherwise modified
from time to time after the Signing Date.
"LOANS": Warehousing Loans and Swingline Loans.
"MANAGEMENT SHAREHOLDERS": Xxxxxx X. Xxxx, Xxxx X. Xxxxxxx, and
Xxxxxx X. Xxxxxxxxx.
"MATERIAL ADVERSE EVENT": any occurrence of whatsoever nature
(including, without limitation, any adverse determination in any
litigation, arbitration or governmental investigation or proceeding) which
materially adversely affects the present or reasonably foreseeable
prospective financial condition or operations of NCFC, NCMC or NCCC or
materially impairs the ability of NCFC, NCMC or NCCC to perform its
respective obligations under the Loan Documents.
"MORTGAGE": a mortgage or deed of trust on real property which has
been improved by a completed single family (I.E., one to four family
units) dwelling unit (I.E., a detached house, townhouse or condominium).
"MORTGAGE-BACKED SECURITY": a security (including, without
limitation, a participation certificate) that is an interest in a pool of
Mortgage Loans or is secured by such an interest.
"MORTGAGE BANKER'S FINANCIAL REPORTING FORM": Form Number 1002-1055
of the Xxxxxx Xxx Seller's Guide.
"MORTGAGE LOAN": a Mortgage Note and the related Mortgage.
"MORTGAGE NOTE": a promissory note which has a term not exceeding
thirty (30) years evidencing a loan or advance which is secured by a
Mortgage.
"MULTIEMPLOYER PLAN": a multiemployer plan, as such term is defined
in Section 4001 (a) (3) of ERISA, which is maintained (on the Closing
Date, within the five (5) years preceding the Closing Date, or at any time
after the Closing Date) for employees of either Borrower or any ERISA
Affiliate.
"NCCC": NC Capital Corporation, a California corporation.
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"NCFC": New Century Financial Corporation, a Delaware corporation.
"NCMC": New Century Mortgage Corporation, a California corporation.
"NCRC": NC Residual II Corporation.
"NET WORTH": with respect to any Person, on any date of
determination, the net worth of such Person as of such date, determined in
accordance with GAAP.
"NOTE": as defined in Section 2.01(e).
"OBLIGATIONS": all obligations of each of NCFC, NCMC and NCCC to
the Agent or any Lender now or hereafter existing under any Loan Document,
whether for principal, interest, fees, expenses, indemnification or
otherwise.
"XXXXX XXXXXX": Xxxxx Xxxxxx Real Estate Securities Inc.
"PBGC": the Pension Benefit Guaranty Corporation created by Section
4002(a) of ERISA or any governmental body succeeding to the functions
thereof.
"PERSON": any natural person, corporation, partnership, joint
venture, firm, association, limited liability company, trust,
unincorporated organization, government or governmental agency or
political subdivision or any other entity, whether acting in an
individual, fiduciary or other capacity.
"PLAN": each employee benefit plan (whether in existence on the
Closing Date or thereafter instituted), as such term is defined in Section
3 of ERISA, maintained for the benefit of employees, officers or directors
of either Borrower or of any ERISA Affiliate, other than a Multiemployer
Plan.
"PLEDGE AND SECURITY AGREEMENT": the Amended and Restated Pledge
and Security Agreement dated as of April 30, 2000, as the same may have
been and may hereafter be amended, supplemented, reaffirmed or restated
from time to time.
"PRIME RATE": on any date of determination thereof, the rate per
annum which is most recently publicly announced by USBNA as its "prime
rate," which may be a rate at, above or below that which USBNA lends to
other Persons.
"PRIME RATE ADVANCE": an outstanding Loan that bears interest as
provided in Section 2.02(a)(ii).
"PROHIBITED TRANSACTION": as defined in Section 4975 of the Code and
Section 406 of ERISA.
"PRO RATA SHARE": with respect to each Lender, in each case
expressed as a percentage:
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(a) as such term pertains to such Lender's obligation to make
Warehousing Loans, including its obligation to refinance any
outstanding Swingline Loans, the fraction which the amount of its
Commitment Amount is to the aggregate amount of all the Commitment
Amounts,
(b) as such term pertains to such Lender's right to receive
payment of interest on and Balances Deficiency Fees with respect to
its outstanding Warehousing Loans, the fraction which the
outstanding amount of interest and Balances Deficiency Fees payable
to it on or with respect to the outstanding principal balance of
such Lender's Warehousing Loans is to the aggregate outstanding
amount of interest and Balances Deficiency Fees payable on or with
respect to the aggregate unpaid principal balance of all Warehousing
Loans,
(c) as such term pertains to such Lender's right to receive
payment of principal of its outstanding Warehousing Loans, the
fraction which the amount of the unpaid principal balance of its
Warehousing Loans is to the aggregate unpaid principal balance of
all outstanding Warehousing Loans,
(d) as such term pertains to such Lender's right to receive
facility fees under Section 2.01(h), the fraction which such
Lender's Commitment Amount is to the sum of all Commitment Amounts,
and
(e) as such term pertains to such Lender's obligations under
Section 7.09, and for all other purposes, the fraction which the sum
of such Lender's Commitment Amount, or, if its Commitment has
terminated, the unpaid principal balance of its Warehousing Loans,
is to the sum of the Commitment Amounts of all of the Lenders or, if
the Commitments have terminated, the unpaid principal balance of all
of the Warehousing Loans.
"QUARTERLY AVERAGE LEVERAGE RATIO": for each three (3) month period
ending on March 31, June 30, September 30 or December 31 of any year
during the term of this Agreement, the ratio of (a) the average daily
amount of Total Liabilities of NCFC and its Subsidiaries outstanding
during such three (3) month period to (b) the average of the Tangible Net
Worth of NCFC and its Subsidiaries at the end of each month during such
three (3) month period.
"RECOURSE SERVICING CONTRACT": a Servicing Contract under which
either Borrower is obligated to repurchase or indemnify the holder of any
Mortgage Loans as a result of defaults on such Mortgage Loans at any time
during the term of such Mortgage Loans (other than those Servicing
Contracts that are customarily recognized in the trade as non-recourse but
that may contain repurchase or indemnification obligations related to
breaches of usual and customary representations and warranties made by
such Borrower in connection with the sale and servicing of the Mortgage
Loans serviced thereunder and usual and customary provisions for the
advance of principal and interest on Mortgage-backed Securities by such
Borrower).
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"REGULATION D": Regulation D (or any substitute regulations) of the
Board of Governors of the Federal Reserve System (or any successor
thereto), together with all amendments from time to time thereto.
"REGULATORY CHANGE": any change after the Signing Date in United
States federal, state or foreign laws or regulations or the adoption or
making after such date of any interpretations, directives or requests
applying to a class of banks including any Lender under any United States
federal, state or foreign laws or regulations (whether or not having the
force of law) by any court or governmental or monetary authority charged
with the interpretation or administration thereof.
"REO": real property acquired by either Borrower as a result of the
foreclosure of a Mortgage Loan.
"REO SUB": New Century REO Corp., a California corporation.
"REPORTABLE EVENT": a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such Section, with respect to a
Plan, excluding, however, such events as to which the PBGC by regulation
has waived the requirement of Section 4043(a) of ERISA that it be notified
within thirty (30) days of the occurrence of such event; PROVIDED, that a
failure to meet the minimum funding standard of Section 412 of the Code
and of Section 302 of ERISA shall be a Reportable Event regardless of the
issuance of any waiver in accordance with Section 412(d) of the Code.
"REQUIRED LENDERS": at any time of determination, Lenders whose Pro
Rata Shares (as defined under clause (e) of the definition of such term)
aggregate at least 66.67%; PROVIDED, that if there is more than one
Lender, the "Required Lenders" shall not consist of fewer than two
Lenders.
"RESERVE-ADJUSTED BALANCES": for any Balance Calculation Period, an
amount obtained by multiplying (a) the average net daily collected
non-interest-bearing balances of the Borrowers on deposit with any Lender
during such Balance Calculation Period over and above the balances
required to compensate such Lender for services provided by such Lender
for said Balance Calculation Period, reductions in the interest payable on
Indebtedness (other than the Loans) outstanding to such Lender and
assessments payable with respect to such balances by such Lender to the
Federal Deposit Insurance Corporation (or any successor thereto) for such
Corporation's insuring of time deposits in United States dollars
maintained at such Lender for such Balance Calculation Period by (b) a
percentage equal to 100%, MINUS the average daily Reserve Percentage in
effect for said Balance Calculation Period. For purposes of the foregoing,
"RESERVE PERCENTAGE" shall mean, on any date of determination, the
percentage as prescribed by Regulation D for determining the highest
maximum reserve requirement (including, without limitation, any marginal,
emergency, supplemental, special or other reserve) that the applicable
Lender determines it is required to maintain on such date in respect of
deposits of the type maintained with such Lender in the applicable Balance
Calculation Period.
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"RESIDUAL FINANCE SUBSIDIARIES": (a) NC Residual Corporation, a
Delaware corporation, as long as it is a wholly-owned Subsidiary of NCMC
and does not amend its Certificate of Incorporation as in effect on March
20, 1998, and (b) any other wholly-owned Subsidiary of NCMC or NCCC that,
pursuant to its Articles or Certificate of Incorporation, has a purpose
limited to the ownership of Junior Securitization Interests, the
establishment of one or more securitization trusts, issuing securities
backed by such Junior Securitization Interests, otherwise financing such
Junior Securitization Interests, and lawful activities incidental to and
necessary and convenient to the foregoing.
"RESIDUAL FINANCING AGREEMENTS": collectively, the Global Master
Repurchase Agreement dated as of March 29, 2001 by and between Xxxxxxx
Xxxxx Barney, Inc., as Agent for Salomon Brothers International, Inc., and
NCCC, as amended, supplemented, restated or otherwise modified and in
effect from time to time, (ii) the Global Master Repurchase Agreement
dated as of March 29, 2001 by and between Xxxxxxx Xxxxx Xxxxxx, Inc., as
Agent for Salomon Brothers International, Inc., and NCRC, as amended,
supplemented, restated or otherwise modified and in effect from time to
time, (iii) the Master Loan and Security Agreement dated as of July 20,
1999 by and among NCMC, NCCC and Xxxxx Xxxxxx, as amended, supplemented,
restated or otherwise modified and in effect from time to time, (iv) the
Residual Financing Facility Agreement dated as of June 23, 1999 by and
between NCCC and Greenwich, as amended, supplemented, restated or
otherwise modified and in effect from time to time, and (v) any similar
agreements pursuant to which "Residual Financing" (as defined in the
Residual Security Agreement) is hereafter provided to any Borrower or any
Subsidiary of any Borrower.
"RESIDUAL SECURITY AGREEMENT": the Amended and Restated Security
Agreement dated as of April 30, 2000 by and among NCCC, NCRC and U.S. Bank
National Association, as collateral agent for (i) the Lenders (as defined
therein), (ii) U.S. Bancorp Leasing & Financial, successor in interest to
FBS Business Finance Corp. (the "Lessor"), as Lessor under any present or
future leases of equipment by the Lessor, as lessor, to NCMC or NCFC, as
lessee, or as lender under any present or future loan by the Lessor, as
lender, to NCMC or NCFC, as borrower, secured by equipment and (iii) the
Subordinated Noteholder (as defined therein).
"RESTRICTED PAYMENTS": with respect to any Person, collectively, all
dividends or other distributions of any nature (cash, securities, assets
or otherwise), and all payments, by virtue of redemption or otherwise, on
any class of equity securities (including, without limitation, warrants,
options or rights therefor) issued by such Person, whether such securities
are now or may hereafter be authorized or outstanding and any distribution
in respect of any of the foregoing, whether directly or indirectly.
"RISK RATING": as defined in Exhibit E.
"SALOMON REO AGREEMENT": the Master Loan and Security Agreement
dated as of April 1, 2000 by and between the Borrowers and SBRC, as the
same may be amended, supplemented, restated or otherwise modified in
accordance with this Agreement and in effect from time to time.
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"SBRC": Salomon Brothers Realty Corp., a Delaware corporation.
"SERVICING CONTRACT": a contract or agreement purchased by NCMC or
entered into by NCMC for its own account (and not as nominee or
subservicer), whether now existing or hereafter purchased or entered into,
pursuant to which NCMC services Mortgage Loans or Mortgage Loan pools for
Persons other than itself or the other Borrower.
"SERVICING RIGHTS": any and all rights of NCMC held for its own
account (and not as nominee or subservicer), whether pursuant to a
Servicing Contract or otherwise, to service Mortgage Loans or Mortgage
Loan pools for Persons other than itself or the other Borrower, including,
without limitation, (i) all rights to collect payments due and enforce the
rights of the mortgagee under any Mortgage Loans, (ii) all rights to
receive compensation and termination fees under any Servicing Contract and
(iii) all rights to receive the proceeds from any sale or other transfer
of NCMC's interest in any Servicing Contract.
"SERVICING SECURITY AGREEMENT": the Amended and Restated Servicing
Security Agreement dated as of April 30, 2000, as the same may have been
and may hereafter be amended, supplemented, reaffirmed or restated from
time to time.
"SIGNING DATE": the Business Day on which counterparts of this
Agreement, duly executed by the Borrowers and the Lenders, have been
delivered to the Agent.
"SUBORDINATED DEBT": any Indebtedness of the Borrowers, now existing
or hereafter created, incurred or arising, which is subordinated in right
of payment to the payment of the Obligations in a manner and to an extent
that the Required Lenders have approved in writing prior to the creation
of such Indebtedness.
"SUBSIDIARY": with respect to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other
Persons performing similar functions are at the time owned directly or
indirectly by such Person.
"SWINGLINE COMMITMENT": the discretionary revolving credit facility
provided by USBNA to the Borrowers described in Section 2.01(b).
"SWINGLINE LOAN": a loan made by USBNA to the Borrowers pursuant to
Section 2.01(b).
"TAKE-OUT COMMITMENT": as defined in Exhibit E.
"TANGIBLE NET WORTH": on any date of determination, the consolidated
Net Worth of NCFC, NCMC or NCCC, as applicable, and its respective
Subsidiaries, MINUS the consolidated book value of all assets of NCFC,
NCMC or NCCC, as applicable, and its respective Subsidiaries (to the
extent reflected as an asset in the balance sheet of NCFC, NCMC or NCCC,
as applicable, or any such Subsidiary at such date) which are treated as
intangibles under GAAP, including, without limitation, such items as
deferred financing
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expenses, net leasehold improvements, good will, trademarks, trade names,
service marks, copyrights, patents, licenses and unamortized debt discount
and expense; PROVIDED, that Junior Securitization Interests shall not be
treated as intangibles for purposes of this definition.
"TERMINATION DATE": the earliest of (a) May 22, 2002, (b) the date
on which the Commitments are terminated or reduced to zero pursuant to
Section 2.01(g), or (c) the date on which the Commitments are terminated
pursuant to Section 6.02.
"TOTAL LIABILITIES": on any date of determination, the amount, on a
consolidated basis, of the liabilities of NCFC, NCMC or NCCC, as
applicable, and its respective Subsidiaries, determined in accordance with
GAAP, MINUS Subordinated Debt.
"TRANSFEREES": as defined in Section 8.06.
"TRANSFERRED INTEREST": as defined in Section 8.06.
"UNDERWRITING GUIDELINES": NCMC's underwriting guidelines as in
effect on the Signing Date, a copy of which is attached hereto as Schedule
1.01 (a), as the same may be modified from time to time in accordance with
this Agreement.
"UNMATURED EVENT OF DEFAULT": any event which with the lapse of
time, with notice to the Borrowers or with both would constitute an Event
of Default.
"USBNA": U.S. Bank National Association, in its individual capacity.
"WAREHOUSING COLLATERAL VALUE": on any date of determination, with
respect to the Collateral or any portion thereof, as determined by the
Agent in accordance with the provisions of Exhibit E.
"WAREHOUSING LOAN": a loan made by the Lenders to the Borrowers
pursuant to Section 2.01(a).
1.02 ACCOUNTING TERMS. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP. To the extent
any change in GAAP affects any computation or determination required to be made
pursuant to this Agreement, such computation or determination shall be made as
if such change in GAAP had not occurred unless the Borrowers and the Lenders
agree in writing on an adjustment to such computation or determination to
account for such change in GAAP.
1.03 COMPUTATION OF TIME PERIODS. In this Agreement, in the computation of
a period of time from a specified date to a later specified date, unless
otherwise stated the word "from" means "from and including" and the word "to" or
"until" each means "to but excluding".
1.04 OTHER DEFINITIONAL TERMS. 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 provision of this
Agreement, and section, schedule, exhibit and like
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references are to this Agreement unless otherwise specified. Unless the context
in which used herein otherwise clearly requires, "or" has the inclusive meaning
represented by the phrase "and/or".
SECTION II. THE CREDIT FACILITIES.
2.01 THE WAREHOUSING FACILITY AND THE SWINGLINE FACILITY.
(a) WAREHOUSING CREDIT COMMITMENT. Upon the terms and subject to the
conditions of this Agreement, during the period beginning on the Effective
Date and ending on the Termination Date, each Lender agrees, severally but
not jointly, to lend (and after repayment, to relend) to NCMC, at such
times and in such amounts as NCMC shall request, up to an aggregate
principal amount at any time outstanding equal to such Lender's Commitment
Amount, subject to the following limitations:
(i) the aggregate principal amount of Warehousing Loans and
Swingline Loans at any time outstanding shall not exceed the sum of
the Commitment Amounts of all the Lenders; and
(ii) the aggregate principal amount of Warehousing Loans and
Swingline Loans at any time outstanding shall not exceed the
Borrowing Base, as determined by the Agent from its records.
No Lender shall be obligated to make Warehousing Loans if, after giving
effect thereto, either of the foregoing limitations would be exceeded. The
failure of any one or more of the Lenders to make a Warehousing Loan in
accordance with its Commitment shall not relieve the other Lenders of
their several obligations hereunder, but no Lender shall be liable with
respect to the obligation of any other Lender hereunder or be obligated in
any event to make Warehousing Loans which, together with its Pro Rata
Share of outstanding Swingline Loans, would exceed its Commitment Amount.
(b) DISCRETIONARY SWINGLINE COMMITMENT. Upon the terms and subject
to the conditions of this Agreement, until the Termination Date, USBNA, in
its sole discretion, may lend to NCMC loans (each such loan, a "Swingline
Loan") at such times and in such amounts as NCMC shall request, up to an
aggregate principal amount at any time outstanding equal to the amount by
which USBNA's Commitment Amount exceeds the principal amount outstanding
under USBNA's Note; PROVIDED, that USBNA will not make a Swingline Loan if
(i) after giving effect thereto, either of the limitations set forth in
Section 2.01(a) would be exceeded or (ii) USBNA has received written
notice from NCMC or any Lender that one or more of the conditions
precedent set forth in Section 5 for the making of a Warehousing Loan have
not been satisfied.
(c) MANNER OF BORROWING. NCMC shall give the Agent telephonic notice
of each request for Warehousing Loans not later than 1:00 P.M.
(Minneapolis time) on the requested Borrowing Date, and each request for
Swingline Loans not later than 3:30 p.m. (Minneapolis time) on the
requested Borrowing Date. On the Effective Date, NCMC shall be deemed to
have requested Warehousing Loans in an amount equal to the outstanding
principal balance of all Existing Warehousing Loans, and such Warehousing
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Loans shall be used to refund such Existing Warehousing Loans. Each
request for Warehousing Loans or Swingline Loans shall specify the
aggregate amount of Warehousing Loans or Swingline Loans, as the case may
be, requested and whether such Loans to be made by each Lender are to be
funded as Balance Funded Rate Advances, Prime Rate Advances or Eurodollar
Advances; PROVIDED, that any portion of a Loan not so designated shall be
funded as a Eurodollar Advance. NCMC shall, not later than the following
Business Day, confirm any such request by delivering to the Agent a duly
completed and executed Confirmation of Borrowing/Paydown/Conversion. The
Agent shall notify each Lender by not later than 2:00 P.M. (Minneapolis
time) on the date it receives such request of each request for Warehousing
Loans received from NCMC, of such Lender's Pro Rata Share of the
Warehousing Loans requested and whether such Lender's Warehousing Loans
are to be funded as Balance Funded Rate Advances, Prime Rate Advances or
Eurodollar Advances. Each Lender shall deposit into the Collateral Account
in Immediately Available Funds by not later than 3:00 P.M. (Minneapolis
time) on the Borrowing Date the total amount of the Warehousing Loans to
be made by such Lender. On the Borrowing Date of requested Swingline
Loans, USBNA may deposit into the Collateral Account in Immediately
Available Funds by not later than 4:00 p.m. (Minneapolis time) on the
requested Borrowing Date the amount of the requested Swingline Loans.
Unless the Agent shall have received notice from a Lender prior to 3:00
P.M. (Minneapolis time) on any Borrowing Date that such Lender will not
make available to the Agent the Warehousing Loans to be made by such
Lender on such date, the Agent may assume that such Lender has made such
Warehousing Loan available to the Agent on such date and the Agent in its
sole discretion may, in reliance upon such assumption, make available to
NCMC on suc h date a corresponding amount on behalf of such Lender. If a
Lender shall not have timely given such a notice, and to the extent such
Lender shall not have so made available to the Agent the Warehousing Loans
to be made by such Lender on such date and the Agent shall have so made
available to NCMC a corresponding amount on behalf of such Lender, such
Lender shall, on demand, pay to the Agent such corresponding amount
together with interest thereon, at the Federal Funds Effective Rate, for
each day from the date such amount shall have been so made available by
the Agent to NCMC until the date such amount shall have been repaid to the
Agent. If such Lender does not pay such corresponding amount promptly upon
the Agent's demand therefor, the Agent shall promptly notify the Borrowers
and the Borrowers shall immediately repay such corresponding amount to the
Agent together with accrued interest thereon at the applicable rate or
rates provided in Section 2.04. Each request for Warehousing Loans or
Swingline Loans shall be deemed to be a representation by NCMC that (i) no
Event of Default or Unmatured Event of Default has occurred or will exist
upon the making of the requested Warehousing Loans or Swingline Loans and
(ii) the representations and warranties contained in Section 3 hereof, in
Section 5 of the Pledge and Security Agreement, in Section 4 of the
Servicing Security Agreement, and in Section 15 of the Guaranty are true
and correct with the same force and effect as if made on and as of the
date of such request.
(d) Refinancing of Swingline Loans.
(i) PERMITTED REFINANCINGS OF SWINGLINE LOANS. USBNA, at any
time in its sole and absolute discretion, may, upon notice given to
each other Lender
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by not later than 2:00 P.M. (Minneapolis time) on any Business Day,
request that each Lender (including USBNA) make a Warehousing Loan
in an amount equal to its Pro Rata Share of a portion of the
aggregate unpaid principal amount of any outstanding Swingline Loans
for the purpose of refinancing such Swingline Loans. Such
Warehousing Loans shall be made as Eurodollar Advances, unless NCMC
specifies otherwise.
(ii) MANDATORY REFINANCINGS OF SWINGLINE LOANS. Not later than
2:00 P.M. (Minneapolis time) at least on a weekly basis, USBNA will
notify each other Lender of the aggregate amount of Swingline Loans
which are then outstanding and the amount of Warehousing Loans
required to be made by each Lender (including USBNA) to refinance
such outstanding Swingline Loans (which shall be in the amount of
each Lender's Pro Rata Share of such outstanding Swingline Loans).
Such Warehousing Loans shall be made as Eurodollar Advances, unless
NCMC specifies otherwise.
(iii) LENDERS' OBLIGATION TO FUND REFINANCINGS OF SWINGLINE
LOANS. Upon the giving of notice by USBNA under Section 2.01(d)(i)
or 2.01(d)(ii), each Lender (including USBNA) shall make a
Warehousing Loan in an amount equal to its Pro Rata Share of the
aggregate principal amount of Swingline Loans to be refinanced, and
provide proceeds of such Warehousing Loans, in Immediately Available
Funds, by not later than 3:00 P.M. (Minneapolis time) on the date
such notice was received; PROVIDED, HOWEVER, that a Lender shall not
be obligated to make any such Warehousing Loan unless (A) USBNA
believed in good faith that all conditions to making the subject
Swingline Loan were satisfied at the time such Swingline Loan was
made, or (B) if the conditions to such Swingline Loan were not
satisfied, such Lender had actual knowledge, by receipt of the
statements furnished to it pursuant to Section 4.01 or otherwise,
that any such condition had not been satisfied and failed to notify
USBNA in a writing received by USBNA prior to the time it made such
Swingline Loan that USBNA was not authorized to make a Swingline
Loan until such condition had been satisfied, or USBNA was obligated
to give notice of the occurrence of an Event of Default or an
Unmatured Event of Default to the Lenders pursuant to Section 7.08
and failed to do so, or (C) any conditions to the making of such
Swingline Loan that were not satisfied had been waived in writing by
the Required Lenders prior to or at the time such Swingline Loan was
made. The proceeds of Warehousing Loans made pursuant to the
preceding sentence shall be paid to USBNA (and not to NCMC) and
applied to the payment of principal of the outstanding Swingline
Loans, and the Borrowers authorize the Agent to charge the
Collateral Account or any other account (other than escrow or
custodial accounts) maintained by either Borrower with the Agent (up
to the amount available therein) in order to immediately pay USBNA
the principal amount of such Swingline Loans to the extent
Warehousing Loans made by the Lenders are not sufficient to repay in
full the principal of the outstanding Swingline Loans requested or
required to be refinanced. Upon the making of a Warehousing Loan by
a Lender pursuant to this Section 2.01(d)(iii), the amount so funded
shall become due under such Lender's Note and the outstanding
principal amount of the Swingline Loans shall be correspondingly
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reduced. If any portion of any Warehousing Loan made by the Lenders
pursuant to this Section 2.01(d)(iii) should be recovered by or on
behalf of any Borrower from USBNA in bankruptcy or otherwise, the
loss of the amount so recovered shall be ratably shared among all
the Lenders in the manner contemplated by Section 7.11. Each
Lender's obligation to make Warehousing Loans referred to in this
Section 2.01(d) shall, subject to the proviso to the first sentence
of this Section 2.01(d)(iii), be absolute and unconditional and
shall not be affected by any circumstance, including, without
limitation, (1) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against USBNA, the Borrowers
or anyone else for any reason whatsoever; (2) the occurrence or
continuance of a Default or an Event of Default; (3) any adverse
change in the condition (financial or otherwise) of either Borrower
or the Guarantor; (4) any breach of this Agreement by either
Borrower, the Agent or any Lender; or (5) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing; PROVIDED, that in no event shall a Lender be obligated to
make a Warehousing Loan if, after giving effect thereto, the
outstanding principal balance of such Lender's Note would exceed its
Commitment Amount.
(e) NOTES. Warehousing Loans made by each Lender shall be evidenced
by the Borrowers' promissory note in the form of Exhibit F (each, together
with any promissory note subsequently executed and delivered by the
Borrowers to evidence any Lender's Loans, a "Note"), which shall be made
payable to the order of such Lender in an amount equal to such Lender's
Commitment Amount, shall be dated the Effective Date and shall mature on
the Termination Date. USBNA's Note shall also evidence the Swingline Loans
made by it hereunder. The aggregate amount of the Warehousing Loans made
by a Lender and, in the case of USBNA, Swingline Loans, less all
repayments of principal thereof shall be the principal amount owing and
unpaid on such Lender's Note. The principal amount of each Loan made by a
Lender and all principal payments and prepayments thereof may be noted by
such Lender on a schedule attached to its Note and shall be entered by
such Lender on its ledgers and computer records. The failure of any Lender
to make such notations or entries shall not affect the principal amount
owing and unpaid on its Note. The entries made by a Lender on its ledgers
and computer records and any notations made by a Lender on any such
schedule annexed to its Note shall be presumed to be accurate until the
contrary is established.
(f) PAYMENT AND PREPAYMENT OF WAREHOUSING LOANS AND SWINGLINE LOANS.
The Borrowers shall pay the principal of the Warehousing Loans and
Swingline Loans as follows:
(i) MANDATORY PAYMENTS. The entire unpaid principal balance of
each Lender's Note shall be due and payable on the Termination Date.
(ii) MANDATORY PREPAYMENTS. If, at any time, the aggregate
principal amount of all Loans outstanding exceeds the Borrowing
Base, the Borrowers shall immediately either (A) pledge additional
Mortgage Loans with a Warehousing Collateral Value not less than the
amount of such excess to the Agent for the benefit of the Lenders
pursuant to the Pledge and Security
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Agreement, or (B) make principal prepayments of the Notes in an
aggregate amount equal to the amount of such excess, which amount
shall be paid to the Agent and distributed (y) first, to USBNA as a
prepayment on the outstanding principal balance of any Swingline
Loans and (z) after repayment in full of any Swingline Loans, to the
Lenders ratably on the basis of each Lender's Pro Rata Share. In
addition, all Swingline Loans shall also be prepayable on demand
therefor by USBNA.
(iii) OPTIONAL PREPAYMENTS. The Borrowers shall have the right
to prepay, without penalty, the outstanding principal balance of the
Notes in whole or in part at any time and from time to time, each
such principal prepayment to be paid to the Agent and distributed
(A) first, to USBNA as a prepayment on the outstanding principal
balance of any Swingline Loans and (B) after repayment in full of
any Swingline Loans, to the Lenders ratably on the basis of each
Lender's Pro Rata Share.
(iv) CONFIRMATION. NCMC shall promptly send the Agent a
Confirmation of Borrowing/Paydown/Conversion confirming any payment
or prepayment of principal made on the Notes.
(g) TERMINATION AND REDUCTION OF THE COMMITMENTS.
(i) NCMC may, at any time, upon not less than thirty (30)
days' prior written notice to the Agent, a copy of which shall be
promptly provided by the Agent to each Lender, reduce the aggregate
Commitment Amounts, with any such reduction in a minimum amount of
$10,000,000, or, if more, in an integral multiple of $5,000,000 in
excess thereof; PROVIDED, that NCMC may not reduce the aggregate
Commitment Amounts below the aggregate principal amount of
outstanding Loans. NCMC may, upon not less than thirty (30) days'
prior written notice to the Agent, a copy of which shall be promptly
provided by the Agent to each Lender, terminate the Commitments in
their entirety. Upon termination of the Commitments pursuant to this
Section 2.01(g), the Borrowers shall pay to the Agent the aggregate
amount of all outstanding Loans, all accrued and unpaid interest
thereon, any unpaid fees accrued to the date of such termination and
all other unpaid obligations of the Borrowers to the Lenders in
respect of their Commitments hereunder.
(ii) Notwithstanding the foregoing, any termination of the
Commitments pursuant to Section 6.02 shall supersede any notice of
termination or reduction under this Section 2.01(g). Once the
Commitments have been terminated or reduced, they may not be
reinstated.
(h) FACILITY FEES. The Borrowers shall pay each Lender a facility
fee on the average daily amount of such Lender's Commitment Amount,
whether used or unused, payable monthly in arrears on the fifth Business
Day of each month in an amount equal to one-quarter of one percent (0.25%)
per annum.
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(i) USE OF PROCEEDS. Except as otherwise provided in Section 2.01(d)
with respect to refinancing Swingline Loans, the proceeds of the Swingline
Loans and the Warehousing Loans shall be used to make, originate or
acquire Mortgage Loans, to finance Mortgage Loans previously made,
originated or acquired or, in the case of Warehousing Loans made on the
Effective Date, to repay in full the Existing Warehousing Loans.
(j) COMMITMENT FEES. The Borrowers shall pay to each Lender on the
Effective Date in consideration of its Commitment a commitment fee in an
amount equal to the product of such Lender's Commitment Amount multiplied
by the applicable percentage set forth on Schedule 2.01(j) as such
Lender's "Effective Date Fee Percentage."
2.02 INTEREST ON THE NOTE; BALANCES DEFICIENCY FEES; CONTINUATIONS AND
CONVERSIONS.
(a) INTEREST RATES; BALANCES DEFICIENCY FEES. The Borrowers will pay
each Lender monthly in arrears on the third Business Day of each month
interest on the unpaid principal balance of each Advance of such Lender
from time to time outstanding as follows:
(i) with respect to Balance Funded Rate Advances, at the per
annum rate of 1.625% (the "Fixed Rate"); PROVIDED, that if for any
Balance Calculation Period the average daily Reserve-Adjusted
Balances maintained by the Borrowers with any Lender are less than
an amount equal to the average daily aggregate unpaid principal
balance of the Balance Funded Rate Advances owed to such Lender
during such Balance Calculation Period (such deficiency being herein
referred to as the "Balances Deficiency"), the Borrowers will pay
such Lender a fee (the "Balances Deficiency Fee") for said Balance
Calculation Period on the Balances Deficiency at a per annum rate
equal to 1.625% below the average daily Prime Rate in effect during
said Balance Calculation Period; and PROVIDED FURTHER, that if for
any Balance Calculation Period the weighted average Reserve-Adjusted
Balances maintained by the Borrowers with any Lender exceed the
weighted average daily aggregate unpaid principal balance of the
Balance Funded Rate Advances owed to such Lender during such Balance
Calculation Period (such excess being herein referred to as the
"Balances Surplus"), then such Balances Surplus, or, if the
Borrowers and such Lender shall so agree, the charges reduction
benefit for such Balances Surplus (as determined by such Lender),
may be carried forward and applied to succeeding Balance Calculation
Periods (but not to any Balance Calculation Period occurring in any
subsequent calendar year);
(ii) with respect to Prime Rate Advances, the Prime Rate PLUS
the Applicable Margin, as adjusted automatically on and as of the
effective date of any change in the Prime Rate;
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(iii) with respect to Eurodollar Advances, the Adjusted
Eurodollar Rate PLUS the Applicable Margin, as adjusted
automatically on and as of the effective date of any change in the
Adjusted Eurodollar Rate; and
(iv) with respect to any Obligations not paid when due (A)
consisting of Balance Funded Rate Advances, a rate per annum equal
to the Fixed Rate PLUS 2.0%, and (B) consisting of other
Obligations, a rate per annum equal to the Prime Rate PLUS the
Applicable Margin PLUS 2.0% for the period from the date such
Obligations were due until the same are paid.
(b) PAYMENT OF INTEREST AND FEES. The Agent shall use its best
efforts to provide the Borrowers with a statement for interest on the
Notes, the facility fees with respect to the Commitments and the
collateral handling fees with respect to Mortgage Loans pledged under the
Pledge and Security Agreement, in each case accrued through the last day
of each calendar month, on or before the third Business Day of the next
succeeding calendar month, but shall have no liability to the Borrowers
for its failure to do so. Interest on the Notes, facility fees and
collateral handling fees accrued through the last day of each calendar
month shall be due and payable on the second Business Day after the date
the Borrowers receive such statement from the Agent; PROVIDED, that
interest payable at the rates provided for in Section 2.02(a)(iv) shall be
payable on demand. Any Balances Deficiency Fee payable hereunder shall be
due and payable quarterly after each Balance Calculation Period within two
(2) Business Days after receipt by the Borrowers from any Lender of a
statement therefor (a copy of which shall be provided to the Agent)
containing the calculations made to determine such Balances Deficiency
Fee, which statement shall be conclusive absent manifest error.
(c) DESIGNATION AND CONVERSIONS OF OUTSTANDING ADVANCES. Subject to
the terms and conditions of this Agreement, NCMC shall designate, on any
Borrowing Date, all or portions of the Warehousing Loans or Swingline
Loans to be made on such Borrowing Date as one or more Balance Funded Rate
Advances, Prime Rate Advances or Eurodollar Advances. Any portion of an
outstanding Loan not designated as a Balance Funded Rate Advance or a
Prime Rate Advance shall be funded as a Eurodollar Advance. Thereafter,
subject to the terms and conditions of this Agreement, NCMC shall have the
option to convert all or any portion of any outstanding Advance consisting
of Warehousing Loans or Swingline Loans into Advances of another type
(i.e., Balance Funded Rate Advances, Prime Rate Advances or Eurodollar
Advances); PROVIDED, HOWEVER, that (i) no Advance may be requested as or
converted into a Eurodollar Advance or, without the written consent of the
Lender to which it is owed (a copy of which shall be provided to the
Agent), a Balance Funded Rate Advance if an Event of Default or Unmatured
Event of Default has occurred and is continuing on the proposed date of
conversion, and (ii) no Advance owed to any Lender may be requested as or
converted into a Balance Funded Rate Advance without the prior consent of
such Lender, which shall be confirmed to the Agent in writing by such
Lender, if the Reserve-Adjusted Balances maintained by the Borrowers at
such Lender are less than the aggregate amount of Balance Funded Rate
Advances owed to such Lender, after giving effect to such conversion. NCMC
shall provide the Agent with telephonic notice of each proposed conversion
not later than 1:00 P.M. (Minneapolis time) on the date of any conversion,
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which notice shall set forth the proposed date therefor. Each such notice
shall specify (A) the amount to be converted, and (B) the date for the
conversion. Any notice given by NCMC under this Section 2.02(c) shall be
irrevocable. NCMC shall promptly confirm any such proposed conversion by
delivering to the Agent a duly completed and executed Confirmation of
Borrowing/Paydown/Conversion. The Agent shall notify each Lender affected
by such proposed conversion by not later than 2:00 P.M. (Minneapolis time)
on the date it receives such notice of the Advances of such Lender being
converted and the types of Advances into which such Advances are being
converted.
(d) AGENT'S FEES. The Borrowers shall pay to the Agent fees in
accordance with the terms of a letter dated May 23, 2001 as the same may
be amended, supplemented, restated or replaced from time to time.
2.03 PAYMENTS AND COMPUTATIONS.
(a) PAYMENTS. All payments and prepayments by the Borrowers of
principal of and interest on each Note and all fees, expenses and other
obligations under this Agreement shall be made in Immediately Available
Funds to the Agent not later than 2:00 p.m. (Minneapolis time) on the
dates called for under this Agreement, at the main office of the Agent in
Minneapolis. Funds received after such hour shall be deemed to have been
received by the Agent on the next Business Day. The Borrowers irrevocably
authorize the Agent to charge the Collateral Account or any other account
of either Borrower (other than escrow or custodial accounts) maintained
with the Agent in an amount equal to any such payment or permitted
prepayment of principal, interest, fees, expenses and other Obligations
then due and payable by the Borrowers to the Lenders or the Agent under
this Agreement and the other Loan Documents, as the case may be.
(b) COMPUTATIONS. Balances Deficiency Fees, facility fees and
interest on each Note shall be computed on the basis of actual days
elapsed and a year of 360 days.
2.04 SETOFF. Whenever an Event of Default shall have occurred and be
continuing, the Borrowers hereby irrevocably authorize each Lender to set off
the Obligations owed to such Lender against all deposits and credits of the
Borrowers with, and any and all claims of the Borrowers against, such Lender,
excluding deposits of the Borrowers with such Lender which the Borrowers hold in
escrow or in trust for the benefit of third parties, whether or not the
Obligations owed to such Lender, or any part thereof, shall be then due. No
Lender shall, except as otherwise set forth in the Loan Documents, have any
right to set off the Obligations owed to such Lender against any such deposits
or credits except during the continuance of an Event of Default.
2.05 INCREASED CAPITAL REQUIREMENTS. In the event that, as a result of any
Regulatory Change, compliance by any Lender with any applicable law or
governmental rule, requirement, regulation, guideline or order (whether or not
having the force of law) regarding capital adequacy has the effect of reducing
the rate of return on such Lender's capital as a consequence of such Lender's
Commitment or amounts outstanding under such Lender's Note to a level
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below that which such Lender would have achieved but for such compliance (taking
into consideration such Lender's policies with respect to capital adequacy),
then from time to time the Borrowers shall pay to such Lender, within thirty
(30) days after written demand by such Lender, such additional amount or amounts
as will compensate such Lender for such reduction; PROVIDED, that the Borrowers
shall not be obligated to pay any such additional amount (a) unless such Lender
shall first have notified the Borrowers in writing that it intends to seek such
compensation pursuant to this Section 2.05, or (b) to the extent such additional
amount is attributable to the period ending 91 days prior to the date of the
first such notice with respect to such Regulatory Change (the "Excluded
Period"), except to the extent any amount is attributable to the Excluded Period
as a result of the retroactive application of the applicable Regulatory Change.
A certificate, which shall be conclusive absent manifest error, as to the amount
of any such reduction (including calculations in reasonable detail showing how
such Lender computed such reduction and a statement that such Lender has not
allocated to its Commitment or amounts outstanding under its Note a
proportionately greater amount of such reduction than is attributable to each of
its other commitments to lend or to each of its other outstanding credit
extensions that are affected similarly by such compliance by such Lender,
whether or not such Lender allocates any portion of such reduction to such other
commitments or credit extensions) shall be furnished promptly by such Lender to
the Borrowers.
2.06 PROVISIONS RELATING TO EURODOLLAR ADVANCES AND BALANCE FUNDED RATE
ADVANCES.
(a) INTEREST RATE NOT ASCERTAINABLE, ETC. If, on the date for
determining the Adjusted Eurodollar Rate in respect of any Eurodollar
Advance, any Lender determines (which determination shall be conclusive
and binding absent manifest error) that the Adjusted Eurodollar Rate will
not adequately and fairly reflect the cost to such Lender of funding such
Eurodollar Advance, then such Lender shall notify the Agent, and the Agent
shall notify the Borrowers, of such determination, whereupon the
obligation of such Lender to make, or to convert any Advances to,
Eurodollar Advances shall be suspended until such Lender notifies the
Agent, and the Agent notifies the Borrowers, that the circumstances giving
rise to such suspension no longer exist. Outstanding Eurodollar Advances
owed to such Lender shall thereupon automatically be converted to Prime
Rate Advances.
(b) INCREASED COST. If, after the date hereof, any Regulatory Change
or compliance with any request or directive (whether or not having the
force of law) of any governmental authority, central bank or comparable
agency:
(i) shall subject any Lender to any tax, duty or other charge
with respect to Balance Funded Rate Advances or Eurodollar Advances,
its Note, or its obligation to make Balance Funded Rate Advances or
Eurodollar Advances, or shall change the basis of taxation of
payment to such Lender of the principal of or interest on Balance
Funded Rate Advances or Eurodollar Advances or any other amounts due
under this Agreement in respect of Balance Funded Rate Advances or
Eurodollar Advances or its obligation to make Balance Funded Rate
Advances or Eurodollar Advances (except for changes in the rate of
tax on the overall net income of such Lender imposed by the laws of
the United States or any jurisdiction in which such Lender's
principal office is located); or
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(ii) shall impose, modify or deem applicable any reserve,
special deposit, capital requirement or similar requirement
(including, without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but excluding any
such requirement to the extent included in calculating the Adjusted
Eurodollar Rate) against assets of, deposits with or for the account
of, or credit extended by, any Lender or shall impose on any Lender
or on the interbank Eurodollar market any other condition affecting
Balance Funded Rate Advances or Eurodollar Advances, such Lender's
Note, or its obligation to make Balance Funded Rate Advances or
Eurodollar Advances;
and the result of any of the foregoing is to increase the cost to such Lender of
making or maintaining any Balance Funded Rate Advance or Eurodollar Advance, or
to reduce the amount of any sum received or receivable by such Lender under this
Agreement or under its Note, then, within thirty (30) days after written demand
by such Lender, the Borrowers shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such increased cost or reduction;
PROVIDED, that the Borrowers shall not be obligated to pay any such additional
amount (i) unless such Lender shall first have notified the Borrowers in writing
that it intends to seek such compensation pursuant to this Section 2.06(b), or
(ii) to the extent such additional amount is attributable to the period ending
91 days prior to the date of the first such notice with respect to such
Regulatory Change (the "Excluded Period"), except to the extent any amount is
attributable to the Excluded Period as a result of the retroactive application
of the applicable Regulatory Change. A certificate of any Lender claiming
compensation under this Section 2.06(b), setting forth the additional amount or
amounts to be paid to it hereunder and stating in reasonable detail the basis
for the charge and the method of computation, shall be conclusive absent
manifest error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods. Failure on the part of any Lender to demand
compensation for any increased costs or reduction in amounts received or
receivable with respect to any period shall not constitute a waiver of such
Lender's rights to demand compensation for any increased costs or reduction in
amounts received or receivable in any subsequent period.
(c) ILLEGALITY. If, after the date of this Agreement, the adoption of, or
any change in, any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for such Lender to make, maintain
or fund Balance Funded Rate Advances or Eurodollar Advances, such Lender shall
notify the Borrowers and the Agent, whereupon the obligation of such Lender to
make or convert Advances into Balance Funded Rate Advances or Eurodollar
Advances, shall be suspended until such Lender notifies the Borrowers and the
Agent that the circumstances giving rise to such suspension no longer exist. If
any Lender determines that it may not lawfully continue to maintain any Balance
Funded Rate Advances or Eurodollar Advances, all of the affected Advances shall
be automatically converted to Prime Rate Advances as of the date of such
Lender's notice.
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SECTION III. REPRESENTATIONS AND WARRANTIES. In order to induce the
Lenders to enter into this Agreement and to make and maintain the Loans
hereunder, each of the Borrowers make the following representations and
warranties to the Lenders with respect to such Borrower and its affiliates and
subsidiaries, where applicable, effective on and as of the Signing Date, the
Effective Date and each Borrowing Date:
3.01 FORMATION; POWERS; GOOD STANDING; SUBSIDIARIES; AGENCY STATUS.
(a) FORMATION AND POWERS. NCFC is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, NCMC is a corporation duly organized, validly existing and in
good standing under the laws of the State of California, NCCC is a
corporation duly organized, validly existing and in good standing under
the laws of the State of California, and each of NCFC, NCMC and NCCC has
all requisite corporate power and authority to own and operate its
properties, to carry on its business as now conducted and proposed to be
conducted, to enter into and perform each Loan Document to which it is or
will be a party and to carry out the transactions contemplated thereby.
(b) GOOD STANDING. Each of NCFC, NCMC and NCCC is in good standing
wherever necessary to carry on its business and operations, except in
jurisdictions in which the failure to be in good standing would not
preclude it from enforcing its rights with respect to any material asset
or expose it to any material liability.
(c) SUBSIDIARIES, JOINT VENTURES AND PARTNERSHIPS. As of the Signing
Date, neither NCFC, NCMC nor NCCC has any Subsidiaries other than those
listed on Schedule 3.01. Neither NCFC, NCMC, NCCC nor any of their
Subsidiaries is a member of any joint venture or partnership other than a
strategic alliance with Persons in which the Borrowers have made
Investments of the types permitted pursuant to Sections 4.10(i) and
4.10(j).
3.02 AUTHORIZATION; NO CONFLICT; GOVERNMENTAL CONSENTS; BINDING EFFECT.
(a) AUTHORIZATION OF BORROWING. The execution, delivery and
performance by each of NCFC, NCMC and NCCC of each Loan Document to which
it is or will become a party, the carrying out of the transactions
contemplated thereby, and the issuance, delivery and payment of the Notes
have been duly authorized by all necessary corporate action by each of
them.
(b) NO CONFLICT. The execution, delivery and performance by each of
NCFC, NCMC and NCCC of each Loan Document to which it is or will be a
party, the carrying out of the transactions contemplated thereby, and the
issuance, delivery and payment of the Notes do not and will not (i)
violate any provision of law applicable to it, its articles or certificate
of incorporation or bylaws or any order, judgment or decree of any court
or other agency of government binding on it, (ii) conflict with, result in
a breach of or constitute (with due notice or lapse of time or both) a
default under any of its contractual obligations, (iii) result in or
require the creation or imposition of any Lien, charge or encumbrance of
any nature whatsoever upon any of its properties or assets except the
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Liens granted to the Agent for the benefit of the Lenders under the Pledge
and Security Agreement or (iv) require any approval of shareholders or any
approval or consent of any Person under any of its contractual obligations
other than approvals or consents which have been obtained.
(c) GOVERNMENTAL CONSENTS. The execution, delivery and performance
by each of NCFC, NCMC and NCCC of, and the validity and enforceability of,
each Loan Document to which it is or will be a party, the carrying out of
the transactions contemplated thereby, and the issuance, delivery and
payment of the Notes do not and will not require any registration with,
consent or approval of, or notice to, or other action of, with or by, any
Federal, state or other governmental authority or regulatory body or other
Person except those that have been obtained. Any registration with,
consent or approval of or other action by any federal, state or other
governmental authority or regulatory body or other Person which has been
obtained and has been disclosed in writing to the Lenders shall remain in
effect and shall not be modified except as may be approved in writing by
the Agent, which approval shall not be unreasonably withheld.
(d) BINDING OBLIGATIONS. Each of the Loan Documents to which it is a
party is, and each of the Loan Documents to which it will be a party will
be, the legally valid and binding obligations of each of NCFC, NCMC and
NCCC, and each of the Loan Documents has been or will be duly executed,
and is or will be enforceable against it in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles
relating to or limiting creditors' rights generally.
3.03 FINANCIAL CONDITION. NCFC has heretofore delivered to the Lenders its
audited consolidated balance sheet as at December 31, 2000, its unaudited
consolidated balance sheet as at March 31, 2001, and the related audited and
unaudited, as the case may be, statements of income, shareholders' equity and
cash flow for the periods then ended. NCMC has heretofore delivered to the
Lenders its audited consolidated balance sheet as at December 31, 2000, its
unaudited consolidated balance sheet as at March 31, 2001, and the related
audited and unaudited, as the case may be, statements of income, shareholder's
equity and cash flow for the periods then ended. Such financial statements have
been prepared in accordance with GAAP and fairly present the consolidated
financial condition of NCFC and NCMC as of the dates indicated and the results
of their operations and cash flow for the periods indicated. As of the Signing
Date, neither NCFC nor NCMC has any material contingent obligation, contingent
liability or liability for taxes, long-term lease or unusual forward or
long-term commitment, which is not reflected in the foregoing financial
statements or in the notes thereto.
3.04 TITLE TO PROPERTY; LIENS. NCFC and NCMC each has good, sufficient and
legal title to all the properties and assets reflected in the balance sheets
dated as at March 31, 2001 referred to in Section 3.03 and all assets held by
NCFC and NCMC on the Signing Date but acquired subsequent to the date of such
balance sheet, except for assets disposed of in the ordinary course of business.
All such properties and assets are free and clear of Liens, except as permitted
hereunder. The grants of security interests pursuant to the Pledge and Security
Agreement and the Servicing Security Agreement create valid security interests
in the property subject thereto and the Liens on the Collateral created by the
Pledge and Security Agreement and
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the Servicing Security Agreement will be first priority Liens thereon, free and
clear of any other Liens except as permitted hereunder.
3.05 LITIGATION; ADVERSE FACTS. Except as set forth in Schedule 3.05,
there is no action, suit, proceeding or arbitration at law or in equity or
before or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
pending or, to the knowledge of NCFC, NCMC, NCCC or any of their Subsidiaries,
threatened against or affecting NCFC, NCMC or NCCC or any of their respective
properties that would, if decided in a manner adverse to it, result in any
material adverse change in its business, operations, properties, assets or
condition (financial or otherwise) or would materially adversely affect its
ability to perform its obligations under each Loan Document to which it is or
will be a party, and there is no basis known to it for any action, suit or
proceeding which would have such an effect. None of NCFC, NCMC or NCCC is (a) in
violation of any applicable law if such violation materially adversely affects
or may materially adversely affect its business, operations, properties, assets
or condition (financial or otherwise) or (b) subject to or in violation of any
final judgment, writ, injunction, decree, rule or regulation of any court or
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which could have a
material adverse effect on its business, operations, properties, assets or
condition (financial or otherwise). There is no action, suit, proceeding or
investigation pending or, to the knowledge of NCFC, NCMC or NCCC, threatened
against or affecting NCFC, NCMC or NCCC, whic h questions the validity or the
enforceability of any Loan Document.
3.06 OTHER AGREEMENTS; PERFORMANCE.
(a) AGREEMENTS. None of NCFC, NCMC or NCCC is a party to or subject
to any contractual obligation or charter or other internal restriction
materially adversely affecting its business, operations, properties,
assets or condition (financial or otherwise).
(b) PERFORMANCE. None of NCFC, NCMC or NCCC is in default in the
performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its material contractual
obligations, and no condition exists which, with the giving of notice or
the lapse of time or both, would constitute such a default, except where
the consequences, direct or indirect, of such default or defaults, if any,
would not have a material adverse effect on its business, properties,
assets, operations or condition (financial or otherwise). To the best
knowledge of NCFC, NCMC and NCCC, the other parties to any of the
contractual obligations of NCFC, NCMC or NCCC are not in default
thereunder, except where the consequences, direct or indirect, of such
default or defaults, if any, would not have a material adverse effect on
its business, operations, properties, assets or condition (financial or
otherwise).
3.07 USE OF PROCEEDS. All proceeds of the Loans will be used only in
accordance with Section 2.01(i). No part of the proceeds of the Loans will be
used by the Borrowers to purchase or carry any margin stock (as such term is
defined in Regulation U of the Board of Governors of the Federal Reserve System
(or any successor thereto)) or to extend credit to any other Person for the
purpose of purchasing or carrying any margin stock.
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3.08 TAXES. Each of NCFC, NCMC and NCCC has filed all tax returns required
to be filed by it, and has paid all taxes and assessments payable by it which
have become due, other than those not yet delinquent and except for those
contested in good faith by appropriate proceedings for which adequate reserves
in conformity with GAAP have been provided. No material tax Liens have been
filed and, to their knowledge, no material claims or assessments are being
asserted or will be asserted with respect to any such taxes or other charges.
3.09 ERISA. Each Plan is in substantial compliance with all applicable
requirements of ERISA and the Code and with all material applicable rulings and
regulations issued under the provisions of ERISA and the Code setting forth
those requirements. No Reportable Event has occurred and is continuing with
respect to any Plan. All of the minimum funding standards applicable to such
Plans have been satisfied and there exists no event or condition which would
reasonably be expected to result in the institution of proceedings to terminate
any Plan under Section 4042 of ERISA. With respect to each Plan subject to Title
IV of ERISA, as of the most recent valuation date for such Plan, the present
value (determined on the basis of reasonable assumptions employed by the
independent actuary for such Plan and previously furnished in writing to the
Lenders) of such Plan's projected benefit obligations did not exceed the fair
market value of such Plan's assets. Neither the Borrowers nor any ERISA
Affiliate are required to make contributions to any Multiemployer Plan.
3.10 GOVERNMENTAL REGULATION. None of NCFC, NCMC, NCCC nor any of their
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce Act, the Investment
Company Act of 1940 or any federal or state statute or regulation limiting its
ability to incur Indebtedness for money borrowed.
3.11 INDEBTEDNESS. As of the Signing Date, none of NCFC, NCMC, NCCC nor
any of their Subsidiaries has any Indebtedness outstanding except the
Indebtedness permitted pursuant to Section 4.08.
3.12 NO MATERIAL ADVERSE EVENT. Since December 31, 2000, neither the
business, operations, properties, assets nor condition (financial or otherwise)
of NCFC, NCMC or NCCC or their Subsidiaries have been affected in any material
adverse way as the result of any Material Adverse Event, including, without
limitation, fire, explosion, accident, act of God, strike, lockout, flood,
drought, storm, earthquake, or combination of workmen or other labor
disturbance, riot, activity of armed forces or of the public enemy, embargo or
nationalization, condemnation, requisition or taking of property, or
cancellation or modification of contracts, by any domestic or foreign government
or any instrumentality or agency thereof.
3.13 LICENSES AND PERMITS. Each of NCFC, NCMC, NCCC and their Subsidiaries
has all federal, state and local licenses and permits required to be maintained
in connection with and material to the current operation of its businesses, and
all such licenses and permits are valid and fully effective.
3.14 GUARANTEES. As of the Signing Date, none of NCFC, NCMC, NCCC nor any
of their Subsidiaries has made, or is liable in respect of, any Guarantee, other
than the Guaranty and Guarantees permitted pursuant to Section 4.11.
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3.15 ACCURACY AND COMPLETENESS OF INFORMATION. No representation or
warranty of NCFC, NCMC, NCCC or any of their Subsidiaries contained in this
Agreement or the other Loan Documents, no representation or warranty contained
in any other document, certificate or written statement furnished to the Agent
or any Lender by NCFC, NCMC, NCCC or any of their Subsidiaries for use in
connection with the transactions contemplated by the Loan Documents and no
representation or warranty contained in any other document, certificate or
written statement furnished to the Agent or any Lender by or on behalf of any
other Person for use in connection with the transactions contemplated by the
Loan Documents, contains any untrue statement of a material fact or omits to
state a material fact (known to it in the case of any document not furnished by
it) necessary in order to make the statements contained herein or therein not
materially misleading. There is no fact known to NCFC, NCMC or NCCC (other than
matters of a general economic nature) which materially adversely affects the
business, operations, property, assets or condition (financial or otherwise) of
NCFC, NCMC, NCCC or their Subsidiaries which has not been disclosed herein or in
such other documents, certificates and statements furnished to the Agent or any
Lender for use in connection with the transactions contemplated hereby.
SECTION IV. COVENANTS OF THE BORROWERS. So long as the Commitments are in
effect and thereafter so long as any Obligation shall remain unpaid, the
Borrowers covenant that, unless the Lenders shall otherwise consent in writing,
they will perform and will cause NCFC and its affiliates and subsidiaries, where
applicable, to perform all of the covenants set forth in this Section 4.
4.01 FINANCIAL STATEMENTS AND OTHER REPORTS. NCFC, NCMC and NCCC will each
maintain, and cause its Subsidiaries to maintain, a system of accounting
established and administered in accordance with sound business practices such as
to permit the preparation of financial statements in accordance with GAAP and
furnish or cause to be furnished to each Lender:
(a) as soon as available and in any event within thirty (30) days
after the end of each calendar month, a copy of the unaudited financial
statements of NCFC (on a consolidated and a consolidating basis) and NCMC
as at the end of such month, consisting of at least a balance sheet and
the related statements of income, shareholders' equity and cash flow of
NCFC and NCMC for such month and from the beginning of the then current
fiscal year of NCFC and NCMC to the end of such month, setting forth in
each case in comparative form the figures for the corresponding date or
period of the previous fiscal year, all in reasonable detail, and
certified by the chief financial officer of NCFC as being complete and
correct in all material respects and fairly presenting NCFC's and NCMC's
financial condition, results of operations and cash flows, subject to
changes resulting from normal year-end adjustments;
(b) as soon as available and in any event within ninety (90) days
after the end of each fiscal year, financial statements of NCFC (on a
consolidated and a consolidating basis) and NCMC, consisting of at least a
balance sheet as at the end of such fiscal year and the related statement
of income, shareholders' equity and cash flow for such fiscal year of NCFC
and NCMC, setting forth in each case in comparative form the corresponding
figures as of the end of and for the previous fiscal year, all in
reasonable
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detail, accompanied by a report thereon of the accounting firm of KPMG LLC
or other independent certified public accountants selected by NCFC and
reasonably satisfactory to the Agent, which report shall be unqualified
and shall state that such financial statements present fairly the
financial condition of NCFC and NCMC as at the date indicated and the
results of their operations for the periods indicated in conformity with
GAAP applied on a basis consistent with prior fiscal years (except as
otherwise required by GAAP and stated therein) and that the examination of
such accountants in connection with such consolidated financial statements
has been made in accordance with generally accepted auditing standards,
accompanied by a letter from such accounting firm addressed to the Lenders
acknowledging that the Lenders are extending credit in reliance on such
statements and authorizing such reliance, and also by any management
letters to NCFC and NCMC or their respective board of directors furnished
by such accounting firm in connection with its audit of NCFC's and NCMC's
consolidated financial statements;
(c) with the financial statements furnished pursuant to Section
4.01(a) for each calendar month:
(i) a certificate signed by the chief financial officer of
NCFC and a certificate signed by the chief financial officer of
NCMC, each stating that to the best of the respective chief
financial officer's knowledge, after due inquiry, there exists no
Event of Default or Unmatured Event of Default, or, if such Event of
Default or Unmatured Event of Default exists, stating the nature
thereof, the period of existence thereof, and what action NCFC or
NCMC proposes to take with respect thereto;
(ii) a properly completed Compliance/Borrowing Base
Certificate as of the end of such month;
(iii) a servicing/delinquency report showing with respect to
the Eligible Servicing Portfolio: the number of Mortgage Notes
(including Mortgage Notes backing Mortgage-backed Securities)
included therein, the total outstanding principal amount thereof,
Investor type, weighted average coupon, delinquency status and
foreclosure experience; and
(iv) such additional information concerning the Eligible
Servicing Portfolio and such selective detail by segments and
categories thereof as may from time to time be reasonably requested
by any Lender.
(d) within five (5) calendar days after the end of each (i) semi-
monthly period (for the purposes of this paragraph (d)), with respect to
the Agent, and (ii) month, with respect to all the Lenders, an
inventory/pipeline position report showing with respect to each Take-Out
Commitment: the type, Investor type, expiration date, price, interest rate
and/or required yield, the original amount or aggregate amount thereof and
the portions thereof that have been utilized and the portions thereof that
remain available, future contracts, hedged positions, repurchase
agreements and profit and loss, indicating the number of Mortgage Notes
owned by the Borrowers, the aggregate principal balance thereof and the
warehouse and pipeline balances (for purposes of this clause (d),
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"inventory" means Mortgage Notes owned by the Borrowers which have been
fully funded or with respect to which the Borrowers have paid the full
purchase price and "pipeline" means the Mortgage Notes (or applications
for Mortgages) as to which the Borrowers have made either firm or floating
price quotes to purchase or fund but which have not been purchased or
funded by the Borrowers), together with copies of any new Take-Out
Commitments issued to or entered into by the Borrowers during such week or
month, as the case may be;
(e) within five (5) Business Days after any officer of any Borrower
has knowledge of their occurrence, notice of each of the following events:
(i) the commencement of any action, suit, proceeding or
arbitration against NCFC or any Subsidiary of NCFC, or any material
development in any action, suit, proceeding or arbitration pending
or threatened against NCFC or any such Subsidiary, (A) in which the
aggregate uninsured amount claimed is more than $500,000, (B) which
would, if decided in a manner adverse to NCFC or such Subsidiary,
constitute a Material Adverse Event or (C) which relates to this
Agreement or any document executed pursuant hereto or any
transaction financed or to be financed in whole or in part directly
or indirectly with the proceeds of the Loans made pursuant hereto;
(ii) any Event of Default or Unmatured Event of Default and
what actions, if any, the Borrowers are taking or contemplate taking
in regard thereto;
(iii) any notice from any Investor that it intends to put
either Borrower on probation or that it will cease purchasing
Mortgage Loans from such Borrower or that it will cease permitting
such Borrower to service Mortgage Notes owned, sold or guaranteed by
it;
(iv) the occurrence of any default (however denominated)
under, the termination of, or the receipt by the Borrowers of a
notice of non-renewal of, any credit, gestation repurchase or other
financing facility of NCFC, NCMC or NCCC (A) with SBRC or any
similar counterparty reasonably satisfactory to the Agent or (B)
under which there is Indebtedness or other obligations in an amount
in excess of $100,000 outstanding; and
(v) notice of any other Material Adverse Event, including any
material adverse development which occurs in any litigation,
arbitration or governmental investigation or proceeding previously
disclosed by the Borrowers to the Lenders;
(f) within ten (10) Business Days following each Company
Securitization Transaction or other issuance of Mortgage-backed Securities
by NCFC or any Subsidiary, a copy of the due diligence report prepared in
connection with such issuance by KPMG LLC or other independent certified
public accountants selected by NCFC or such Subsidiary and reasonably
satisfactory to the Agent;
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(g) prior to the end of each fiscal year, final annual budgets,
forecasts and pro-forma cash flow projections developed by NCFC, NCMC and
NCCC for their next succeeding fiscal year;
(h) as soon as available and in any event within thirty (30) days
after the end of each fiscal quarter of the Borrowers, management reports
containing such information with respect to each Junior Securitization
Interest owned by either Borrower or an Affiliate of either Borrower, and
the related Company Securitization Transaction, as the Agent may request,
including, without limitation, information concerning reserve account
balances, cash receipts, prepayment and credit loss experience, REO
inventory status and loss projections, and relevant gain on sale
assumptions;
(i) as soon as available, copies of all financial statements,
reports and returns sent to NCFC's stockholders and copies of all regular,
periodic, or special reports which NCFC, NCMC or NCCC are or may be
required to file with any governmental department, bureau, commission or
agency or which NCFC, NCMC or NCCC send to their respective stockholders;
(j) simultaneously with any request to the Agent to approve a new
Investor, notice of the identity of such Investor, and promptly upon the
request of any Lender, additional information concerning any such proposed
Investor; and
(k) from time to time, such other information regarding the
business, operations, affairs and financial condition of NCFC, NCMC or
NCCC as any Lender may reasonably request.
4.02 CORPORATE EXISTENCE. NCFC, NCMC and NCCC will each (a) maintain its
corporate existence in good standing under the laws of the jurisdiction of its
incorporation and (b) its right to carry on its business and operations in each
jurisdiction in which the character of the properties owned or leased by it or
the business conducted by it makes such qualification necessary and the failure
to be in good standing would preclude NCFC, NCMC or NCCC from enforcing its
rights with respect to any material assets or expose NCFC, NCMC or NCCC to any
material liability.
4.03 COMPLIANCE WITH LAWS, TAXES, ETC. NCFC, NCMC and NCCC will each
comply in all material respects with all applicable laws, rules, regulations and
orders (including without limitation Regulations T, U and X of the Board of
Governors of the Federal Reserve System), the failure to be in compliance with
which would have a materially adverse effect on the financial condition of NCFC,
NCMC or NCCC. Such compliance shall include, without limitation, paying before
the same become delinquent all taxes, assessments and governmental charges
imposed upon it or upon its property except to the extent contested in good
faith by appropriate proceedings and for which any reserves required by GAAP
have been established. In the event NCFC, NCMC or NCCC fails to satisfy its
obligations under this Section 4.03 as to taxes, assessments and governmental
charges, the Lenders may but are not obligated to satisfy such obligations in
whole or in part and any payments made and expenses incurred in doing so shall
constitute Obligations, shall bear interest at the rate set forth in Section
2.02(a)(iv) from the date incurred and shall be paid or reimbursed by the
Borrowers on demand.
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4.04 ERISA. NCFC, NCMC and NCCC will each maintain, and cause each ERISA
Affiliate to maintain, each Plan in compliance with all material applicable
requirements of ERISA and of the Code and with all applicable rulings and
regulations issued under the provisions of ERISA and of the Code and will not
and not permit any of the ERISA Affiliates to (a) engage in any transaction in
connection with which any Borrower or any of the ERISA Affiliates would be
subject to either a civil penalty assessed pursuant to Section 502(i) of ERISA
or a tax imposed by Section 4975 of the Code, in each case in an amount
exceeding $10,000, or (b) fail to make full payment when due of all amounts
which, under the provisions of any Plan, NCFC, NCMC, NCCC or any ERISA Affiliate
is required to pay as contributions thereto, or permit to exist any accumulated
funding deficiency (as such term is defined in Section 302 of ERISA and Section
412 of the Code), whether or not waived with respect to any Plan in an aggregate
amount exceeding $10,000. NCFC, NCMC and NCCC will not permit, and will not
allow any ERISA Affiliate to permit, any event to occur or condition to exist
which would permit any Plan to terminate under any circumstances which would
cause the Lien provided for in Section 4068 of ERISA to attach to any assets of
NCFC, NCMC, NCCC or any Subsidiary of the Borrowers; and NCFC, NCMC and NCCC
will not permit, as of the most recent valuation date for any Plan subject to
Title IV of ERISA, the present value (determined on the basis of reasonable
assumptions employed by the independent actuary for such Plan and previously
furnished in writing to the Lenders) of such Plan's projected benefit
obligations to exceed the fair market value of such Plan's assets. NCFC, NCMC
and NCCC will not, and will not permit any ERISA Affiliate to, become a party to
any Multiemployer Plan.
4.05 ASSETS AND INSURANCE. NCFC, NCMC and NCCC will each maintain in full
force and effect (a) an adequate errors and omissions insurance policy, (b) such
other insurance coverage by financially sound and respectable insurers, on all
properties of a character usually insured by organizations engaged in the same
or similar business (including, without limitation, all real property covered by
Mortgages to the extent normally required by prudent mortgagees) against loss or
damage of a kind customarily insured against by such organizations, (c) adequate
public liability insurance against tort claims which may be asserted against
NCFC, NCMC or NCCC and (d) a mortgage bankers blanket bond insurance policy in
at least the amount customarily maintained by organizations engaged in the same
or similar business and under similar circumstances as NCFC, NCMC or NCCC.
4.06 INSPECTION, VISITATION, ETC. NCFC, NCMC and NCCC will each permit,
and will cause its Subsidiaries to permit, any Person designated by any Lender
in writing, at such Lender's expense, to visit and inspect any of the
properties, corporate books and financial records of NCFC, NCMC, NCCC or such
Subsidiaries and discuss its affairs and finances with the principal officers of
NCFC, NCMC, NCCC or such Subsidiaries and their independent public accountants,
all at such times as any such Lender shall reasonably request.
4.07 FURTHER ASSURANCES. NCFC, NCMC and NCCC will each take all such
further actions and execute all such further documents and instruments as the
Agent may at any time reasonably determine in its sole discretion to be
necessary or advisable to further carry out and consummate the transactions
contemplated by the Loan Documents and to perfect or protect the Liens granted
to the Agent for the benefit of the Lenders under any Loan Document.
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4.08 INDEBTEDNESS. NCFC, NCMC and NCCC will not, and will not permit any
of their Subsidiaries to, directly or indirectly, create, incur, assume,
guarantee, or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness, except:
(a) the Obligations;
(b) current liabilities not more than ninety (90) days overdue,
unless contested in good faith by appropriate proceedings and any reserves
required by GAAP have been established, incurred by NCFC, NCMC or NCCC in
the ordinary course of business otherwise than for money borrowed;
(c) Indebtedness incurred to finance the purchase of equipment and
secured solely by Liens on such equipment, in an aggregate amount not to
exceed $10,000,000;
(d) Indebtedness incurred to finance Junior Securitization Interests
which Indebtedness is secured only by such Junior Securitization
Interests, PROVIDED, that such Indebtedness does not exceed 50% of the
value of such Junior Securitization Interests determined in accordance
with GAAP;
(e) intercompany Indebtedness of NCFC to NCMC or NCCC in an
aggregate amount not to exceed $1,000,000;
(f) intercompany Indebtedness of NCMC or NCCC to NCFC incurred in
the ordinary course of business;
(g) obligations under gestation repurchase agreements or similar
arrangements of the type described in Section 4.09(f);
(h) Subordinated Debt;
(i) Indebtedness incurred by NCMC or NCCC in connection with the
Salomon REO Agreement in an aggregate amount not to exceed $3,000,000; and
(j) intercompany Indebtedness between NCMC and NCCC incurred in the
ordinary course of business.
4.09 LIENS. NCFC, NCMC and NCCC will not, and will not permit any of their
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien with respect to any property now owned or hereafter acquired by
NCFC, NCMC or NCCC, or any income or profits therefrom, except:
(a) the security interests granted to the Agent for the benefit of
the Lenders, U.S. Bancorp Leasing & Financial, successor in interest to
FBS Business Finance Corp. (with respect to obligations described in
Section 4.08(c)) and USBNA (with respect to obligations described in
Section 4.08(h)) under the Loan Documents;
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(b) Liens in connection with deposits or pledges to secure payment
of workers' compensation, unemployment insurance, old age pensions or
other social security obligations, in the ordinary course of business of
NCFC, NCMC or NCCC;
(c) Liens for taxes, fees, assessments and governmental charges not
delinquent or which are being contested in good faith by appropriate
proceedings and for which appropriate reserves have been established in
accordance with GAAP;
(d) encumbrances consisting of zoning regulations, easements, rights
of way, survey exceptions and other similar restrictions on the use of
real property and minor irregularities in title thereto which do not
materially impair their use in the operation of its business;
(e) Liens on equipment arising under any capitalized lease
obligation or other purchase money Liens on equipment acquired after the
Signing Date to secure Indebtedness permitted pursuant to Section 4.08(c);
(f) Liens incurred in connection with gestation repurchase
agreements or similar arrangements, including, without limitation, (i)
arrangements under which NCFC or its Subsidiaries are required to
repurchase Mortgage-backed Securities or Mortgage Loans from any Lender or
other counterparty reasonably satisfactory to the Agent, or (ii) credit
facilities structured as loan and security agreements; PROVIDED, that (x)
such gestation repurchase agreements or similar arrangements are not used
to fund Wet Mortgage Loans, and (y) such gestation repurchase agreements
or similar arrangements are entered into in the ordinary course of
business in contemplation of the subsequent non-recourse sale of such
Mortgage-backed Securities or Mortgage Loans;
(g) Liens on Junior Securitization Interests which secure
Indebtedness permitted by Section 4.08(d);
(h) Liens arising under Hedging Arrangements;
(i) a pledge of the stock of REO Sub to SBRC pursuant to the Salomon
REO Agreement; and
(j) a pledge of the stock of NC Residual II Corporation to Financial
Securities Assurance Corporation.
4.10 INVESTMENTS. NCFC, NCMC and NCCC will not, and will not permit any of
their Subsidiaries to, directly or indirectly, make or own any Investment,
except Investments in:
(a) marketable direct obligations issued or unconditionally
guaranteed by the United States Government or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within one year from the date of acquisition thereof;
(b) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any
public instrumentality
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thereof maturing within one year from the date of acquisition thereof and,
at the time of acquisition, having the highest rating obtainable from
either Standard & Poor's Ratings Group, a division of McGraw Hill, Inc.,
or Xxxxx'x Investors Service, Inc.;
(c) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having the highest
rating obtainable from either Standard & Poor's Ratings Group, a division
of McGraw Hill, Inc., or Xxxxx'x Investors Service, Inc.;
(d) in the case of NCFC, other consumer debt obligations originated
or acquired by NCFC in the ordinary course of NCFC's business, in the case
of NCMC, Mortgage Loans originated or acquired by NCMC in the ordinary
course of NCMC's business, and in the case of NCCC, Mortgage Loans
acquired from NCMC in the ordinary course of NCCC's business;
(e) certificates of deposits or bankers acceptances issued by any of
the Lenders or any other commercial bank organized under the laws of the
United States or any State thereof and having a combined capital and
surplus of at least $500,000,000, or by United States offices of foreign
banks having the highest rating obtainable from a nationally recognized
rating agency, in each case maturing within one year from the date of
acquisition thereof;
(f) Investments in mutual funds that invest substantially all of
their assets in Investments of the types described in subsections (a),
(b), (c) and (e) of this Section 4.10;
(g) the capital stock of any Subsidiary (subject to the limitations
set forth in Sections 4.12 and 4.17);
(h) in the case of NCMC and NCCC, loans to NCFC in an aggregate
amount not to exceed $1,000,000;
(i) direct equity investments made by either Borrower, to the extent
no Event of Default or Unmatured Event of Default has occurred and is
continuing, or would occur as a result thereof, in or loans to Persons in
the mortgage origination business, in an aggregate amount not to exceed
$2,500,000;
(j) Investments made or to be made by NCMC, in an amount not to
exceed $1,250,000 in the aggregate, and a guaranty made by NCFC, pursuant
to a Strategic Alliance Agreement by and among NCMC, Qualified Financial
Services, Inc., a Colorado corporation, Qualified Financial Services,
Inc., a California corporation, Xxxxx Xxxxx, an individual, and Xxxxx V.V.
Thais, an individual;
(k) Investments arising under Hedging Arrangements;
(l) in the case of NCFC, loans to NCMC and NCCC; and
(m) intercompany Indebtedness between NCMC and NCCC incurred in the
ordinary course of business.
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4.11 GUARANTEES. NCFC, NCMC and NCCC will not, and will not permit any of
their Subsidiaries to, directly or indirectly, create or become or be liable
with respect to any Guarantee, other than:
(a) the Guaranty;
(b) Guarantees by NCFC of Indebtedness of the Borrowers secured by
liens described in Section 4.09(e), in an amount not to exceed $7,500,000;
(c) Guarantees by NCFC of NCMC's and NCCC's obligations relating to
(i) Indebtedness permitted by Sections 4.08(d) and 4.08(g), or (ii) the
Strategic Alliance Agreement described in Section 4.10(j); and
(d) Guarantees by NCMC of the obligations of NCCC or Residual
Finance Subsidiaries in respect of Indebtedness permitted by Sections
4.08(d) and 4.08(g).
4.12 RESTRICTION ON FUNDAMENTAL CHANGES. NCFC, NCMC and NCCC will not, and
will not permit any of their Subsidiaries to, engage in any business activities
or operations substantially different from or unrelated to those in which NCFC,
NCMC and NCCC were engaged on the Signing Date, enter into any transaction of
merger or consolidation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, transfer or otherwise
dispose of, in one transaction or a series of transactions, any of its assets,
whether now owned or hereafter acquired, or acquire by purchase or otherwise all
or substantially all the business or property of, or stock or other evidence of
beneficial ownership of, any Person, except:
(a) NCFC, NCMC or NCCC may sell or otherwise dispose of property in
the ordinary course of business, provided such sales do not include all or
substantially all of the assets of NCFC, NCMC or NCCC;
(b) NCFC and its Subsidiaries other than NCMC may engage in any
business involving the origination, acquisition, servicing or sale of
consumer Indebtedness;
(c) the Borrowers may transfer REO with a book value not to exceed
$6,000,000 at any time to REO Sub, provided that the Agent's security
interest, if any, for the benefit of the Lenders in the related Mortgage
Loan has been released in accordance with the Pledge and Security
Agreement and no Eligible Servicing Receivables (as defined in Exhibit E)
relating thereto are included in the Borrowing Base; and
(d) NCMC may transfer to NCCC (i) Mortgage Loans, PROVIDED, that
such Mortgage Loans are subject to the security interest created under the
Pledge and Security Agreement prior to such transfer, but will be released
from such security interest, and the Warehousing Loans will be repaid with
the proceeds of Indebtedness incurred by NCCC of the type described in
Section 4.08(g), simultaneously with such transfer, (ii) Junior
Securitization Interests, and (iii) fixed assets used in the operation of
NCCC.
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4.13 RESTRICTED PAYMENTS. NCFC and NCMC will not make any Restricted
Payments, other than (a) dividends paid by NCFC on its Series 1998A Convertible
Preferred Stock and its Series 1999A Convertible Preferred Stock in an aggregate
amount not to exceed $3,000,000 per annum, and (b) dividends paid by NCMC to
NCFC to enable NCFC to pay such dividends in an amount not to exceed $3,000,000
per annum; PROVIDED, that in each case both before and after giving effect to
such dividends, NCFC and NCMC are in compliance with the covenants set forth in
Section 4 of this Agreement and no Event of Default or Unmatured Event of
Default has occurred and is continuing.
4.14 NET WORTH. NCFC will at all times during each fiscal year maintain
Tangible Net Worth of not less than (a) the greater of (i) $130,000,000 or (ii)
eighty-five percent (85%) of the Tangible Net Worth at the end of its most
recently completed fiscal year (or, in the case of the Tangible Net Worth at the
end of any fiscal year, its prior fiscal year) PLUS (b) ninety percent (90%) of
capital contributions made during such fiscal year PLUS (c) fifty percent (50%)
of positive year-to-date net income. NCMC will at all times during each fiscal
year maintain Tangible Net Worth of not less than (a) the greater of (i)
$85,000,000 or (ii) eighty-five percent (85%) of the Tangible Net Worth at the
end of its most recently completed fiscal year (or, in the case of the Tangible
Net Worth at the end of any fiscal year, its prior fiscal year) PLUS (b) ninety
percent (90%) of capital contributions made during such fiscal year PLUS (c)
fifty percent (50%) of positive year-to-date net income. NCCC will at all times
during each fiscal year maintain Tangible Net Worth of not less than $1.00.
4.15 MINIMUM LIQUIDITY. NCMC will not permit the sum of (a) Cash PLUS (b)
the lesser of the Borrowing Base and the sum of the Commitment Amounts MINUS, in
either case, the outstanding principal balance of all Loans, PLUS (c) the lesser
of eighty percent (80%) of the receivables related to the sale or transfer of
NCMC's or NCCC's interest in any Servicing Contract or $5,000,000, to (i) be
less than $10,000,000 as of the end of any month or (ii) remain less than
$10,000,000 for more than ten (10) calendar days after giving effect to any
mandatory prepayment of principal (or the equivalent) under any Residual
Financing Agreement.
4.16 LEVERAGE RATIO. NCFC will not permit (i) the Quarterly Average
Leverage Ratio for any period of measurement to be greater than 10.0 to 1.0,
(ii) the Daily Leverage Ratio on any date to be greater than 15.0 to 1.0, or
(iii) the Adjusted Leverage Ratio as of the last day of each fiscal quarter to
be greater than 12.0 to 1.0. NCMC will not permit the Leverage Ratio of NCMC to
be greater than 8.0 to 1.0 as of the last day of each fiscal quarter of NCMC.
4.17 SUBSIDIARIES. (a) NCFC will not create or acquire any Subsidiaries
other than (i) NCMC, (ii) the Subsidiaries listed on Schedule 3.01 hereto, (iii)
Residual Finance Subsidiaries, and (iv) Subsidiaries engaged solely in any
business involving the origination, acquisition, servicing and sale of consumer
obligations, and (b) the Borrowers will not create or acquire any Subsidiaries
other than (i) the Subsidiaries listed on Schedule 3.01 hereto, (ii) Residual
Finance Subsidiaries, and (iii) Subsidiaries acquired as a result of Investments
permitted pursuant to Section 4.10(j).
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4.18 AFFILIATE TRANSACTIONS. NCFC, NCMC and NCCC will not, and will not
permit any of their Subsidiaries to, enter into any transaction with an
Affiliate of NCFC, NCMC or NCCC, except:
(a) transactions in the ordinary course of business on terms no less
favorable to NCFC, NCMC or NCCC than those that would be obtained in an
arm's-length transaction;
(b) Indebtedness described in Sections 4.08(e) and 4.08(j);
(c) guaranties of Indebtedness described in Section 4.11;
(d) transfers of assets by NCMC to NCCC and REO Sub as described in
Sections 4.12(c) and 4.12(d); and
(e) transfers by NCMC and NCCC of Junior Securitization Interests to
Residual Finance Subsidiaries.
4.19 ESCROW IMBALANCES. The Borrowers will, no later than five (5)
Business Days after learning (from any source) of any material imbalance in any
escrow account, fully and completely correct and eliminate such imbalance.
4.20 INCONSISTENT AGREEMENTS. NCFC, NCMC and NCCC will not, and will not
permit any of their Subsidiaries to, directly or indirectly, enter into any
agreement containing any provision which would be violated or breached by any
extension of credit to the Borrowers hereunder or by the performance by NCFC,
NCMC or NCCC of their respective obligations hereunder or under any other Loan
Document.
4.21 CLOSING PROCEDURES. NCMC will provide closing instructions to each
Closing Agent (as defined in the Pledge and Security Agreement) which (a)
require, in connection with Mortgage Loans tablefunded by NCMC, that (i) the
Mortgage Note evidencing each such Mortgage Loan shall be endorsed to NCMC, (ii)
the assignment of the applicable Mortgage to NCMC shall be recorded
simultaneously with but separate from the related Mortgage and (iii) the
Mortgage Note evidencing each such Mortgage Loan and other related loan
documents shall be delivered to NCMC promptly upon the closing of such Mortgage
Loan, and (b) in the case of Mortgage Loans funded by a wire transfer of funds
from the Wet Funding Wire Clearing Account (as defined in the Pledge and
Security Agreement) in accordance with Section 4.01(b)(ii) of the Pledge and
Security Agreement, contain a statement substantially in the form set forth in
Exhibit H. NCMC shall review for accuracy and completeness each Mortgage Note,
Mortgage, assignment and other document evidencing or securing each Mortgage
Loan originated or purchased by NCMC.
4.22 UNDERWRITING. All Mortgage Loans pledged to the Agent, for the
benefit of the Lenders, pursuant to the Pledge and Security Agreement will
conform with, and will be assigned a Risk Rating in accordance with, the
Underwriting Guidelines. NCMC shall not make any material change in the
Underwriting Guidelines and shall review the Underwriting Guidelines
periodically to confirm that they are being complied with in all material
respects and are adequate to meet NCMC's business objectives.
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4.23 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of an Event of Default or Unmatured Event of Default if such
action is taken or condition exists.
SECTION V. CONDITIONS PRECEDENT.
5.01 CONDITIONS PRECEDENT TO EFFECTIVENESS. The several obligations of the
Lenders to make the initial Warehousing Loans and the effectiveness of this
Agreement are subject to the satisfaction on or before the Effective Date of
each and every one of the following conditions:
(a) The following documents, certificates and opinion, each in form
and substance satisfactory to the Lenders and their counsel, shall have
been delivered to the Agent:
(i) the Notes, duly executed by the Borrowers;
(ii) a reaffirmation of the Pledge and Security Agreement,
substantially in the form of Exhibit C hereto, duly executed by the
Borrowers;
(iii) a reaffirmation of the Servicing Security Agreement,
substantially in the form of Exhibit D hereto, duly executed by the
Borrowers;
(iv) a reaffirmation of the Guaranty, substantially in the
form of Exhibit G hereto, duly executed by NCFC;
(v) completed responses to requests for information or other
evidence satisfactory to the Agent that the financing statements and
other instruments delivered to the Agent pursuant to the Existing
Credit Agreement have been filed in all appropriate filing offices
and that such filed financing statements perfect a first priority
security interest in favor of the Agent for the benefit of the
Lenders in the property described therein;
(vi) copies of the resolutions of the Boards of Directors of
NCFC, NCMC and NCCC certified by the respective Secretary or
Assistant Secretary of each of them, authorizing the execution,
delivery and performance of each Loan Document to which it is or
will be a party and the other matters contemplated hereby;
(vii) a certificate signed by the Secretary or an Assistant
Secretary of each of NCFC, NCMC and NCCC certifying (A) as to the
names, incumbency and true signatures of the respective persons
authorized to execute and deliver each Loan Document to which it is
or will be a party and any other instrument or agreement hereunder
and under any other Loan Documents and (B) that the Agent and the
Lenders may conclusively rely on such certificate until the Agent
shall have received a further certification of its Secretary or an
Assistant
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Secretary canceling or amending such certificate and submitting the
names, incumbency and signatures of the officers named in such
further certificate;
(viii) copies of the Articles or Certificate of Incorporation
of each of NCFC, NCMC and NCCC with all amendments thereto,
certified by the appropriate governmental official of the
jurisdiction of its respective incorporation;
(ix) certificates of good standing for each of NCFC, NCMC and
NCCC in the jurisdiction of its incorporation and certificates of
good standing for the Borrowers in each of the jurisdictions in
which the Borrowers are required to be qualified to do business,
certified by the appropriate governmental officials as of a date not
more than 45 days prior to the Closing Date;
(x) a certificate of the Secretary or an Assistant Secretary
of each of NCFC, NCMC and NCCC certifying to true and correct copies
of its respective bylaws, as amended to the Effective Date;
(xi) the favorable written opinions of Xxxxxxxx Xxxxxxxxxxx,
counsel to NCFC, NCMC and NCCC, addressed to the Lenders, as to the
matters and effect set forth in Exhibit I;
(xii) a certificate of the Secretary or Assistant Secretary of
each Borrower in the form set forth as Exhibit J;
(xiii) financing statements and other instruments required by
the Agent to create and perfect the security interests granted under
the Pledge and Security Agreement and Servicing Security Agreement;
and
(xiv) an Acknowledgment of Exiting Lender, substantially in
the form of Exhibit K-1 hereto, duly executed by each Exiting Lender
other than Washington Mutual Bank, FA, formerly known as Bank
United, and an Acknowledgment of Exiting Lender, substantially in
the form of Exhibit K-2 hereto, duly executed by Washington Mutual
Bank, FA, formerly known as Bank United.
(b) The fees required to be paid pursuant to Section 2.01(j) shall
have been paid.
(c) The requirements of Section 5.02 shall have been satisfied.
5.02 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of each Lender to
make each Loan (including the initial Loan) is subject to the satisfaction of
each and every of the following additional conditions:
(a) the Agent shall have received a timely and properly completed
notice under Section 2.01(c);
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(b) there shall not have been any Regulatory Change after the
Signing Date which would render the transactions contemplated hereby
unlawful or which would impose a cost on or increase the cost to such
Lender for making or maintaining its Loans or which would reduce any
amount payable to such Lender under this Agreement or its Note or Notes;
(c) no Event of Default or Unmatured Event of Default shall have
occurred and be continuing or will exist upon making the requested Loan;
(d) all the representations and warranties set forth in Section 3 of
this Agreement, in Section 5 of the Pledge and Security Agreement, in
Section 4 of the Servicing Security Agreement and in Section 15 of the
Guaranty shall be true and correct in all material respects as though made
on and as of the applicable Borrowing Date;
(e) no material adverse change in, or development likely to have a
material adverse effect on, the business, operations, properties, assets
or condition (financial or otherwise) of NCFC, NCMC or NCCC shall have
occurred and no occurrence or event which is likely to have a material
adverse effect on the rights and remedies of the Lenders or the ability of
NCFC, NCMC or NCCC to perform its respective obligations to the Lenders
shall have occurred;
(f) the delivery to the Agent of such other documents and opinions
of counsel, including such documents as may be necessary or desirable to
perfect or maintain the priority of any Lien granted or intended to be
granted hereunder or otherwise and including favorable written opinions of
counsel with respect thereto, as the Agent may reasonably request; and
(g) the requested Loan is permitted under Section 2.01.
SECTION VI. EVENTS OF DEFAULT; REMEDIES.
6.01 EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute an Event of Default:
(a) the Borrowers shall fail to make when due, whether by
acceleration of maturity or otherwise, any payment of principal of any
Note, or shall fail to pay within five (5) calendar days after the same
becomes due, whether by acceleration of maturity or
otherwise, any payment of interest on any Note or any fee or other amount
required to be paid to the Agent or any Lender pursuant to this Agreement
or any other Loan Document; or
(b) any representation or warranty made or deemed made by the
Borrowers in this Agreement or by NCFC, NCMC or NCCC in any other Loan
Documents or in any certificate, statement, report or document furnished
to the Agent or the Lenders pursuant to or in connection with any Loan
Document shall be untrue or misleading in any material respect on the date
as of which the facts set forth are stated or certified or deemed stated
or certified; or
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(c) the Borrowers shall fail to comply with any agreement, covenant,
condition, provision or term contained in the Pledge and Security
Agreement, in the Servicing Security Agreement or in Section 4.02(a),
4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.20, 4.21 or
4.22, or shall fail to comply with any agreement, covenant, condition,
provision or term contained in Section 4.02(b) or 4.04 and such failure
shall not be remedied within ten (10) calendar days after an executive
officer of any Borrower shall have become aware of such failure to comply;
or
(d) NCFC, NCMC, NCCC or NCRC shall fail to comply with any other
agreement, covenant, condition, provision or term contained in this
Agreement or any other Loan Document then in effect (other than those
hereinabove set forth in this Section 6.01) and such failure to comply is
not remedied within thirty (30) days after the earliest of (i) the date
the Agent has given the Borrowers written notice of the occurrence
thereof, (ii) the date the Borrowers give notice of such failure to the
Agent or (iii) the date the Borrowers should have given such notice of
such failure to the Agent pursuant to Section 4.01(e)(ii); or
(e) any creditor or representative of any creditor of NCFC, NCMC or
NCCC shall become entitled to declare any Indebtedness in the amount of
$250,000 or more owing on any bond, debenture, note or other evidence of
Indebtedness for borrowed money to be due and payable prior to its
expressed maturity, whether or not such Indebtedness is actually declared
to be immediately due and payable, or any such Indebtedness becomes due
and payable prior to its expressed maturity by reason of any default by
NCFC, NCMC or NCCC in the performance or observance of any obligation or
condition and such default shall not have been effectively waived or shall
not have been cured within any grace period allowed therefor or any such
Indebtedness shall have become due by its terms and shall not have been
promptly paid or extended; or
(f) NCFC, NCMC or NCCC shall become insolvent or shall generally
not, or shall admit in writing its inability to, pay its debts as they
mature or shall apply for, shall consent to, or shall acquiesce in the
appointment of a custodian, trustee or receiver of NCFC, NCMC or NCCC or
for a substantial part of the property thereof or, in the absence of such
application, consent or acquiescence, a custodian, trustee or receiver
shall be appointed for NCFC, NCMC or NCCC or for a substantial part of the
property thereof and shall not be discharged within sixty (60) days, or
NCFC, NCMC or NCCC shall make an assignment for the benefit of creditors;
or
(g) any bankruptcy, reorganization, debt arrangement or other
proceeding under any bankruptcy or insolvency law shall be instituted by
or against NCFC, NCMC or NCCC, and, if instituted against NCFC, NCMC or
NCCC, shall have been consented to or acquiesced in by NCFC, NCMC or NCCC,
or shall remain undismissed for sixty (60) days, or an order for relief
shall have been entered against NCFC, NCMC or NCCC; or
(h) any dissolution or liquidation proceeding shall be instituted by
or against NCFC, NCMC or NCCC and, if instituted against NCFC, NCMC or
NCCC, shall be
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consented to or acquiesced in by NCFC, NCMC or NCCC or shall remain
undismissed for sixty (60) days; or
(i) a judgment or judgments for the payment of money in excess of
the sum of $500,000 in the aggregate shall be rendered against NCFC, NCMC
or NCCC and either (i) the judgment creditor executes on such judgment or
(ii) such judgment remains unpaid or undischarged for more than sixty
(60) days from the date of entry thereof or such longer period during
which execution of such judgment shall be stayed during an appeal from
such judgment; or
(j) any execution or attachment shall be issued whereby any
substantial part of the property of NCFC, NCMC, NCCC or any of their
Subsidiaries shall be taken or attempted to be taken and the same shall
not have been vacated or stayed within thirty (30) days after the issuance
thereof; or
(k) the Pledge and Security Agreement, the Servicing Security
Agreement, the Residual Security Agreement or the Guaranty shall, at any
time, cease to be in full force and effect or shall be judicially declared
null and void, or the validity or enforceability thereof shall be
contested by NCFC, NCMC, NCCC or any of their Subsidiaries, or the Agent
for the benefit of the Lenders shall cease to have a valid and perfected
security interest having the priority contemplated under the Pledge and
Security Agreement, the Servicing Security Agreement or the Residual
Security Agreement in any part of the Collateral described therein, other
than by action or inaction of the Agent, unless the Borrowers shall,
within two (2) Business Days after the earlier of the date they receive
notice of any such cessation under the Pledge and Security Agreement from
the Agent or the date an officer of any Borrower has knowledge thereof,
repay the outstanding Loans in an amount sufficient to reduce the
aggregate outstanding principal balance of the Loans to the aggregate
Warehousing Collateral Value of the Collateral; or
(l) a Change of Control shall occur.
6.02 REMEDIES. If (a) any Event of Default described in Section 6.01(f),
(g) or (h) shall occur, the Commitments shall automatically terminate and the
Obligations shall automatically become immediately due and payable, and
thereafter the Required Lenders may direct the Agent to attempt to enforce its
rights under any one or more of the Loan Documents; or (b) any other Event of
Default shall occur and be continuing, then, the Required Lenders may do any or
all of the following: (i) declare the Commitments terminated, whereupon the
Commitments shall be terminated, (ii) declare the Obligations to be forthwith
due and payable, whereupon the Obligations shall immediately become due and
payable, in each case without presentment, demand, protest or other notice of
any kind, all of which are hereby expressly waived, anything in this Agreement
or in any other Loan Document to the contrary notwithstanding, and (iii) direct
the Agent to attempt to enforce its rights under any one or more of the Loan
Documents.
SECTION VII. THE AGENT.
7.01 APPOINTMENT AND AUTHORIZATION. Each Lender appoints and authorizes
the Agent to take such actions as agent on its behalf and to exercise such
powers under this Agreement and
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the other Loan Documents as are delegated to the Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto. Neither
the Agent nor any of its directors, officers or employees shall be liable for
any action taken or omitted to be taken by it or them under or in connection
with this Agreement or the other Loan Documents, WHETHER OR NOT AMOUNTING TO
SIMPLE NEGLIGENCE, except for its or their own gross negligence or willful
misconduct; PROVIDED, HOWEVER, that the Agent shall be protected in acting or
refraining from acting upon the instruction of the requisite Lenders under
Section 8.05; and PROVIDED FURTHER, that the Agent shall not be required to take
any action that exposes it to personal liability or is contrary to any Loan
Document or applicable law. The Agent shall act as an independent contractor in
performing its obligations as the Agent hereunder and under the other Loan
Documents and nothing herein contained shall be deemed to create a fiduciary
relationship among or between the Agent, the Borrowers or the Lenders.
7.02 NOTE HOLDERS. The Agent may treat the payee of any Note as the holder
thereof until written notice of transfer shall have been filed with it signed by
such payee.
7.03 CONSULTATION WITH COUNSEL. The Agent may consult with legal counsel
selected by it and shall not be liable for any action taken or suffered in good
faith by it in accordance with the advice of such counsel.
7.04 DOCUMENTS. The Agent shall not be under a duty to examine into or
pass upon the validity, effectiveness, genuineness or value of the Notes, the
other Loan Documents or any other instrument or document furnished pursuant
thereto or thereunder. The Agent makes no representation or warranty to any
Lender, nor shall the Agent be responsible for any representations, warranties
or statements made in connection with this Agreement or any other Loan Document.
The Agent shall be entitled to assume that this Agreement and the other Loan
Documents are valid, effective and genuine and what they purport to be. The
Agent (a) shall execute and deliver the Pledge and Security Agreement, whereupon
each provision thereof which is contemplated to be binding upon the Lenders
shall be binding upon the Lenders and each of them; and (b) shall not waive,
amend or otherwise modify any provision of the Pledge and Security Agreement
without the written consent of the Lenders required pursuant to Section 8.05.
7.05 AGENT AND AFFILIATES. With respect to its Commitments and the Loans
made by it in its capacity as a Lender, the entity that is the Agent shall have
the same rights and powers under this Agreement and the other Loan Documents as
any other Lender and may exercise the same as though it were not the Agent, and
the entity that is the Agent and its Affiliates may accept deposits from, lend
money to and generally engage in any kind of business with the Borrowers or any
Subsidiary as if it were not the Agent.
7.06 ACTION BY AGENT. The Agent shall be entitled to use its discretion
with respect to exercising or refraining from exercising any rights which may be
vested in it by, or with respect to taking or refraining from taking any action
or actions which it may be able to take under or in respect of, this Agreement
and the other Loan Documents. The Agent shall incur no liability under or in
respect of this Agreement or any of the other Loan Documents by acting upon any
notice, consent, certificate, warranty or other paper or instrument believed by
it to be genuine or authentic or to be signed by the proper party or parties, or
with respect to anything which it may
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do or refrain from doing in the reasonable exercise of its judgment, or which
may seem to it to be necessary or desirable in the premises. The Agent may
employ agents and attorneys-in-fact in carrying out its responsibilities under
the Loan Documents, and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact as long as the Agent was
not grossly negligent in selecting or directing such agents or attorneys-in-
fact, EVEN IF SUCH SELECTION AMOUNTED TO SIMPLE NEGLIGENCE.
7.07 CREDIT ANALYSIS. Each Lender has made, and shall continue to make,
its own independent investigation or evaluation of the business, operations,
property, assets and condition (financial and otherwise) of the Borrowers in
connection with its Commitments and Loans and has made its own appraisal of the
creditworthiness of the Borrowers. Except as explicitly provided herein, the
Agent has no duty or responsibility, either initially or on a continuing basis,
to provide any Lender with any credit or other information with respect to such
business, operations, property, assets, condition or creditworthiness, whether
such information comes into its possession on or before the first Event of
Default or at any time thereafter.
7.08 NOTICES OF EVENT OF DEFAULT, ETC. In the event that any Lender shall
have acquired actual knowledge of any Event of Default or Unmatured Event of
Default, other than as a result of its receipt of financial statements delivered
to it pursuant to Section 4.01, such Lender shall promptly give notice thereof
to the Agent. The Agent shall, promptly upon receipt of any such notice provide
a copy thereof to the other Lenders. Upon receipt from any Lender of a request
that the Agent give notice to the Borrowers of the occurrence of an Event of
Default or Unmatured Event of Default under Section 6, the Agent shall promptly
forward such request to the other Lenders and will take such action and assert
such rights under this Agreement and the other Loan Documents as the requisite
Lenders under Section 8.05 Shall Direct in writing.
7.09 INDEMNIFICATION. Each Lender agrees to indemnify the Agent (to the
extent not reimbursed by the Borrowers), ratably according to its Pro Rata Share
(determined under clause (e) of the definition thereof), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of this Agreement or the other Loan Documents
or any action taken or omitted by the Agent under this Agreement or the other
Loan Documents, WHETHER OR NOT THE AGENT'S SIMPLE NEGLIGENCE CAUSES THE SAME IN
WHOLE OR IN PART; PROVIDED, that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse the Agent promptly upon demand for its Pro Rata Share
(determined under clause (e) of the definition thereof) of any out-of-pocket
expenses (including counsel fees) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
and the other Loan Documents, to the extent that the Agent is not reimbursed for
such expenses by the Borrowers, WHETHER OR NOT SUCH OUT-OF-POCKET EXPENSES
RESULTED, IN WHOLE OR IN PART, FROM THE AGENT'S SIMPLE NEGLIGENCE; PROVIDED,
that no Lender shall be liable for any portion of any such expenses resulting
from the Agent's gross negligence or willful misconduct.
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7.10 PAYMENTS. All payments of principal of the Notes and all other funds
received by the Agent in respect of any payments made by the Borrowers pursuant
to this Agreement, the Notes or the other Loan Documents, other than payments
under Sections 2.05 and 2.06, and subject to the effect of Section 7.11, shall
be distributed forthwith by the Agent (in like currency and funds) to the
Lenders on the date received or deemed received pursuant to Section 2.03(a), in
accordance with Sections 2.02(b) in the case of payments of interest and
Balances Deficiency Fees, and ratably according to each Lender's Pro Rata Share
in the case of any other payment received by the Agent. If the Agent does not
make any such distribution (or provide Federal Reserve Bank reference numbers
for the wire transfer of the amount thereof) on the date any such payment is
received or deemed received pursuant to Section 2.03(a), the Agent will pay
interest to each Lender entitled to receive a portion of such distribution on
the amount distributable to it at the Federal Funds Effective Rate from such
date until the date such distribution is made, such interest to be payable with
such distribution. Notwithstanding any of the foregoing or any other provision
of this Agreement, upon and after the occurrence of an Event of Default or
Unmatured Event of Default, (a) all proceeds received by the Agent from the sale
or other disposition of the Collateral shall be applied in accordance with
Section 17 of the Pledge and Security Agreement or Section 5 of the Servicing
Security Agreement, as applicable, and (b) all payments made by the Guarantor to
the Agent under the Guaranty shall be applied in the same order of priority as
is set forth in Section 17 of the Pledge and Security Agreement.
7.11 SHARING OF PAYMENTS. Other than as provided in Section 7.10, if any
Lender shall receive and retain any payment during the continuance of an Event
of Default or Unmatured Event of Default, whether by setoff, application of
deposit balance or security, or otherwise, in respect of the Obligations in
excess of such Lender's Pro Rata Share of all payments of the Obligations, then
such Lender shall purchase from the other Lenders for cash and at face value and
without recourse, such participation in the Obligations held by them as shall be
necessary to cause such excess payment to be shared ratably as aforesaid with
each of them; PROVIDED, that if such excess payment or part thereof is
thereafter recovered from such purchasing Lender, the related purchases from the
other Lenders shall be rescinded ratably and the purchase price restored as to
the portion of such excess payment so recovered, but without interest. Each
Lender agrees to exercise any and all rights of setoff, counterclaim or bankers'
lien first fully against the Obligations, and only then to any other
indebtedness of the Borrowers to such Lender.
7.12 SUCCESSOR AGENT. The Agent may resign at any time by giving ten (10)
calendar days written notice thereof to the Lenders and the Borrowers. The
Required Lenders may remove the Agent at any time with or without cause by
notifying the Agent and the Borrowers in writing. In addition, the Lenders with
an aggregate Pro Rata Share (determined under clause (a) of the definition
thereof) of 66 2/3% may at any time, if such Lenders determine, in the
reasonable exercise of their judgment, that the Agent is not handling the
Collateral in accordance with accepted industry practices, appoint a custodian
to perform the Agent's responsibilities under the Pledge and Security Agreement
and, with respect to the Collateral and the determination of the Borrowing Base,
hereunder. Upon any such resignation or removal, the Required Lenders or, in the
case of a removal pursuant to the preceding sentence, the removing Lenders shall
have the right to appoint a successor Agent, which successor Agent shall (unless
an Event of Default has then occurred and is continuing) be reasonably
acceptable to the Borrowers. Upon any determination by the Lenders under the
second preceding sentence to appoint a
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custodian, the Lenders making such determination shall have the right to appoint
a custodian, which custodian shall (unless an Event of Default has then occurred
and is continuing) be reasonably acceptable to the Borrowers. If no successor
Agent shall have been so appointed and shall have accepted such appointment
within thirty (30) days after the retiring Agent's giving of notice of its
resignation or the removal of the Agent, then the retiring Agent may, on behalf
of the Lenders, appoint an Agent or custodian which shall be a Lender or a
commercial bank organized under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$100,000,000 and which shall (unless an Event of Default has occurred and is
continuing) be reasonably acceptable to the Borrowers. Any such resignation or
removal shall be effective upon the appointment of a successor Agent. Upon the
acceptance of any appointment as the Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations, under this Agreement
and the other Loan Documents. After any retiring Agent's resignation or removal
hereunder as the Agent, the provisions of this Section 7 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was acting
as the Agent under this Agreement and any other Loan Document.
7.13 INSPECTION. The Lenders and their agents, accountants, attorneys and
auditors will be permitted during normal business hours at any time and from
time to time upon reasonable notice to examine (to the extent permitted by
applicable law) the files, documents, records and other papers in the possession
or under the control of the Agent relating to any or all Collateral and to make
copies thereof. Any such examination will be at the cost and expense of the
Lender conducting such examination.
7.14 NOTICE OF NEW INVESTORS. The Agent shall use reasonable efforts to
provide prompt notice to each Lender (which notice may be telephonic) of its
approval of any new Investor after May 23, 2001; PROVIDED, HOWEVER, that the
Agent shall have no liability to any Lender or other Person for its failure to
provide the notice described in this Section 7.14.
SECTION VIII. MISCELLANEOUS.
8.01 WAIVER. No failure on the part of the Agent or the Lenders to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under this Agreement or any other Loan Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege under this Agreement or any other Loan Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies provided herein and in the other Loan
Documents are cumulative and not exclusive of any remedies provided by law.
8.02 NOTICES. Except as otherwise specifically provided for herein, all
notices and other communications provided for herein shall be in writing
(including teletransmission communication) and, unless otherwise required herein
or by law, shall be teletransmitted, mailed or delivered to the intended
recipient at the "Address for Notices" specified below its name on the signature
pages hereof; or, as to any party, at such other address as shall be designated
by such party in a notice to the other parties in accordance with this Section
8.02. All notices and other communications hereunder shall be effective when
transmitted by telex or telecopier,
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delivered or, in the case of a mailed notice or notice sent by overnight
courier, upon receipt thereof as conclusively evidenced by the signed receipt
therefor, in each case given or addressed as aforesaid except that notices to
the Agent under the provisions of Section 2 shall not be effective until
received by the Agent.
8.03 EXPENSES; INDEMNIFICATION. The Borrowers agree to pay on demand: (a)
the reasonable fees and expenses of Xxxxxx & Xxxxxxx LLP, special counsel to the
Agent in connection with the negotiation, preparation, approval, execution and
delivery of the Loan Documents, (b) the reasonable fees and expenses of counsel
for the Agent in connection with any amendment, modification or waiver of any of
the terms of any Loan Document and (c) all reasonable costs and expenses of the
Agent and each Lender (including reasonable counsel's fees) in connection with
the enforcement (whether through negotiations, legal proceedings or otherwise)
of this Agreement, the Notes and the other Loan Documents. The Borrowers hereby
agree to indemnify the Lenders and their directors, officers, agents and
employees from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them arising out of
or by reason of any investigation, litigation or other proceedings related to
any use made or proposed to be made by the Borrowers of the proceeds of the
Loans or the operation of the Borrowers' business, including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceedings, WHETHER
OR NOT SUCH OUT-OF-POCKET EXPENSES RESULTED, IN WHOLE OR IN PART, FROM THE
AGENT'S OR ANY LENDER'S SIMPLE NEGLIGENCE (but excluding, for all purposes under
this Section 8.03, any such losses, liabilities, claims, damages or expenses
incurred by reason of the gross negligence or willful misconduct of the Person
to be indemnified).
8.04 CONFIDENTIALITY. The Agent and each Lender shall use reasonable
efforts to assure that information about NCFC, NCMC, NCCC and their respective
operations, affairs and financial condition, not generally disclosed to the
public or to trade and other creditors, which is furnished to the Agent or such
Lender, as the case may be, pursuant to the provisions hereof is used only for
the purposes of this Agreement and any other relationship between the Lenders
and NCFC, NCMC and NCCC and shall not be divulged to any Person other than the
Agent, the Lenders, their respective Affiliates and their respective officers,
directors, employees and agents, except: (a) to their attorneys and accountants,
(b) in connection with the enforcement of the rights of the Agent and the
Lenders hereunder and under the other Loan Documents or otherwise in connection
with applicable litigation, (c) in connection with assignments and
participations and the solicitation of prospective assignees and participants
referred to in the immediately preceding Section, and (d) as may otherwise be
required or requested by any regulatory authority having jurisdiction over the
Agent or any Lender or by any applicable law, rule, regulation or judicial
process, the opinion of the applicable Lender's counsel concerning the making of
such disclosure to be binding on the parties hereto. Neither the Agent nor any
Lender shall incur any liability to NCFC, NCMC or NCCC by reason of any
disclosure permitted by this Section 8.04.
8.05 RELEASES, AMENDMENTS, WAIVERS, CONSENTS AND EXERCISE OF REMEDIES.
Except as otherwise provided in this Section 8.05, any provision of this
Agreement or any other Loan Document may be amended or modified only by an
instrument or instruments in writing signed by the Required Lenders and the
Borrowers. Any amendment, waiver or consent reducing any
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principal of, or the amount of or rate of interest on or fees with respect to
the Loans or the Commitments, postponing any date fixed for the payment of any
principal of, interest on or fees with respect to the Loans or Commitments,
extending the Termination Date, releasing or subordinating any of the Collateral
(except as provided in the Pledge and Security Agreement or the Servicing
Security Agreement, as applicable), releasing the Guaranty, amending the
definition of "Pro Rata Share," "Required Lenders," "Borrowing Base" or
"Warehousing Collateral Value," or amending Section 2.01, this Section 8.05 or
any other provision hereof specifically requiring the consent or approval or
satisfaction of all of the Lenders, may only be made by an instrument or
instruments in writing signed by all of the Lenders and the Borrowers. In
addition to the foregoing requirements, (a) no amendment, waiver or consent
shall, unless in writing and signed by the Agent in addition to the requisite
Lenders indicated above to take such action, affect the rights or duties of the
Agent under this Agreement or any Loan Document, and (b) no amendment may
increase any Lender's Commitment unless it is in writing and signed by such
Lender. No waiver of any provision of this Agreement or any other Loan Document
or consent to any departure by the Borrowers therefrom shall in any event be
effective unless the same shall be in writing and signed or consented to in
writing by the requisite Lenders indicated above and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given.
8.06 BINDING EFFECT; ASSIGNMENTS AND PARTICIPATIONS; TRANSFEREES; NEW
LENDERS; COMMITMENT INCREASES. (a) This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrowers may not assign their rights or obligations
hereunder, under the Notes or under any other Loan Document without the prior
written consent of all of the Lenders. Each Lender may (i) grant participations
in any portion of its Note and its Commitment; and (ii) with the prior written
consent of the Agent (except in the case of an assignment by any Lender to an
Affiliate of such Lender or to another Lender), which consent shall not be
unreasonably withheld, sell, assign, transfer or otherwise dispose of any
portion of its Commitment (with a proportionate share of its outstanding Loans)
or, if its Commitment has terminated, its outstanding Loans (each such grant of
a participation or interest so sold, assigned, transferred or disposed of being
herein called a "Transferred Interest") to (y) banks chartered under the laws of
the United States or any State thereof or (z) insurance companies, other lenders
or mutual funds ("Transferees"). Upon any assignment and delegation as
contemplated in clause (ii) of the preceding sentence, (A) the Agent shall
revise Schedule 1.01(b) to reflect such assignment and delegation and distribute
such revised Schedule 1.01(b) to the Borrowers and the Lenders, (B) the
Borrowers shall, at the request of either the assignor or assignee Lenders,
execute and deliver new Notes to the assignor Lender (if it retains a Commitment
following such assignment) and the assignee Lender, in the principal amount of
their respective Commitments, and (C) the assignor Lender shall pay to the Agent
an assignment fee in the amount of $2,500. In addition, each Lender may pledge
any portion of its Note for security purposes to any Federal Reserve Bank. If a
Lender makes any assignment to a Transferee, then such Transferee, to the extent
of such assignment (unless otherwise provided therein), shall become a "Lender"
hereunder and shall have all the rights and obligations of the Lenders
hereunder, and the transferring Lender shall be released from its duties and
obligations under this Agreement to the extent of such assignment. Without in
any way limiting the rights of Transferees hereunder, the Borrowers agree that
each Transferee shall be entitled to the benefits of Sections 2.05 and 2.06 to
the extent of its Transferred Interest as if it were a "Lender" holding a
Commitment in an amount equal to such Transferred Interest, and that
-50-
each Transferee may exercise any and all rights of banker's lien, setoff and
counterclaim available pursuant to law with respect to its Transferred Interest
as fully as if such Transferee were a direct lender to the Borrowers.
Notwithstanding the sale by a Lender of any participation hereunder, (i) no
participant shall be deemed to be or have the rights and obligations of a Lender
hereunder except as provided in the preceding sentence and (ii) no Lender shall,
in connection with selling any such participation, condition such Lender's
rights in connection with consenting to amendments or granting waivers
concerning any matter under any Loan Document upon obtaining the consent of such
participant other than on matters relating to (A) any reduction in the amount of
any principal of, or the amount of or rate of interest on, any Note or Loan in
which such participation is sold, (B) any postponement of the date fixed for any
payment of principal of or interest on any Note or Loan, or the termination of
any Commitment, in which such participation is sold, or (C) the release or
subordination of any material portion of any collateral other than pursuant to
the terms of any Loan Document.
(b) From time to time, the Borrowers may agree, with the prior written
consent of the Agent, to (i) permit a Lender to increase its Commitment Amount,
or (ii) add a bank chartered under the laws of the United States or any State
thereof, an insurance company, another lender or a mutual fund (a "New Bank") as
a "Lender" under this Agreement with a Commitment, for the purpose of increasing
the aggregate amount of the Commitments; PROVIDED, that upon giving effect to
any such new Commitment, the Commitment Amount of the New Bank shall not be less
than $10,000,000; and PROVIDED FURTHER, that the aggregate Commitment Amounts,
after giving effect to any such increase, shall not exceed $400,000,000. The
Borrowers and each Lender increasing its Commitment Amount or New Bank shall
agree on the date as of which the increased Commitment Amount or the New Bank's
Commitment Amount shall become effective, and each New Bank shall execute and
deliver an instrument in the form prescribed by the Agent to evidence its
agreement to be bound by this Agreement and the other Loan Documents. Upon the
effective date of an increase in any Lender's Commitment Amount or inclusion of
a New Bank as a "Lender" under this Agreement, the Agent shall deliver to the
Company and each of the Lenders a revised Schedule 1.01(b) reflecting the
revised aggregate Commitment Amounts and the Borrowers shall execute and deliver
to the Lender increasing its Commitment Amount or the New Bank a Note.
8.07 GOVERNING LAW AND CONSTRUCTION. THE VALIDITY, CONSTRUCTION AND
ENFORCEABILITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO
CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE
UNITED STATES APPLICABLE TO NATIONAL BANKS. Whenever possible, each provision of
this Agreement and the other Loan Documents and any other statement, instrument
or transaction contemplated hereby or thereby or relating hereto or thereto
shall be interpreted in such manner as to be effective and valid under such
applicable law, but, if any provision of this Agreement, the other Loan
Documents or any other statement, instrument or transaction contemplated hereby
or thereby or relating hereto or thereto shall be held to be prohibited or
invalid under such applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Agreement, the other Loan
Documents or any other statement, instrument or transaction contemplated hereby
or thereby or relating hereto or thereto.
-51-
8.08 CONSENT TO JURISDICTION. AT THE OPTION OF THE AGENT, THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA
STATE COURT SITTING IN HENNEPIN COUNTY, MINNESOTA; AND THE BORROWERS CONSENT TO
THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVE ANY ARGUMENT THAT VENUE
IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE BORROWERS COMMENCE ANY ACTION
IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING
DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT, THE
AGENT AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE
JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.
8.09 WAIVER OF JURY TRIAL. THE BORROWERS, THE AGENT AND EACH LENDER
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
8.10 SURVIVAL OF AGREEMENT. All representations, warranties, covenants
and agreement made by NCFC, NCMC or NCCC herein or in the other Loan Documents
and in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement or any other Loan Document shall be deemed to
have been relied upon by the Lenders and shall survive the making of the Loans
by the Lenders and the execution and delivery to the Agent by NCFC, NCMC and
NCCC of the Loan Documents, regardless of any investigation made by or on behalf
of the Lenders, and shall continue in full force and effect as long as any
Obligation is outstanding and unpaid and so long as the Commitments have not
been terminated; PROVIDED, HOWEVER, that the obligations of the Borrowers under
Sections 2.05, 2.06 and 8.03 shall survive payment in full of the Obligations
and the termination of the Commitments.
8.11 CAPTIONS. The captions or headings herein and any table of contents
hereto are for convenience only and in no way define, limit or describe the
scope or intent of any provision of this Agreement.
8.12 ENTIRE AGREEMENT. This Agreement and the other Loan Documents
embody the entire agreement and understanding between the Borrowers, the Agent
and the Lenders with respect to the subject matter hereof and thereof. This
Agreement supersedes all prior agreements and understandings relating to the
subject matter hereof. Nothing contained in this Agreement or in any other Loan
Document, expressed or implied, is intended to confer upon any Persons other
than the parties hereto any rights, remedies, obligations or liabilities
hereunder or thereunder.
8.13 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
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8.14 BORROWERS ACKNOWLEDGMENTS. The Borrowers hereby acknowledge that (a)
they have been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents, (b) neither the Agent nor any
Lender has any fiduciary relationship to either Borrower, the relationship being
solely that of debtor and creditor, (c) no joint venture exists between the
Borrowers, the Agent or any Lender, and (d) neither the Agent nor any Lender
undertakes any responsibility to the Borrowers to review or inform the Borrowers
of any matter in connection with any phase of the business or operations of the
Borrowers and the Borrowers shall rely entirely upon their own judgment with
respect to their business, and any review, inspection or supervision of, or
information supplied to, the Borrowers by the Lenders is for the protection of
the Lenders and neither the Borrowers nor any third party are entitled to rely
thereon.
8.15 EXITING LENDERS. On the applicable Exit Date, the aggregate unpaid
principal amount of the Existing Warehousing Loans made by each Exiting Lender
under the Existing Credit Agreement and related Note issued to such Exiting
Lender thereunder or, in the case of Washington Mutual Bank, FA, formerly known
as Bank United, under this Agreement and the Note issued hereunder to such
Exiting Lender, together with all interest, facility fees provided for by
Section 2.01(h) of the Existing Credit Agreement or, in the case of Washington
Mutual Bank, FA, formerly known as Bank United, Section 2.01(h) hereof, and
other amounts, if any, payable to such Exiting Lender thereunder or hereunder as
of the Exit Date (as to any Exiting Lender, its "Payoff Amount"), shall be
repaid in full from the proceeds of Warehousing Loans made by the Lenders and
other funds provided by the Borrowers, and the commitments of the Exiting
Lenders under the Existing Credit Agreement or hereunder, as the case may be,
shall terminate. The Borrowers shall give the Agent notice pursuant to Section
2.01(c) with respect to such Existing Warehousing Loans. The Agent shall
distribute to each Exiting Lender by not later than 3:00 P.M. (Minneapolis time)
on the Exit Date out of the proceeds of the Warehousing Loans made for such
purpose, the amount required to pay such Exiting Lender's Payoff Amount in full,
whereupon: (a) such Exiting Lender shall no longer be a party to the Existing
Credit Agreement or this Agreement, as the case may be (except to the extent
provided in Section 8.10 thereof with respect to the survival of certain
provisions, which shall remain in effect as to the Exiting Lenders); and (b)
such Exiting Lenders shall not be deemed to be a "Lender" for any purpose
hereunder.
8.16 AMENDMENTS, WAIVERS AND MODIFICATION FEES. The Borrowers agree to pay
to the Agent for the account of each Lender which provides its written consent
to an amendment, waiver or other modification of the Loan Documents on or before
the date such amendment, waiver or other modification becomes effective as a
result of the written approval thereof by the requisite number of Lenders
required by the Loan Documents, a processing fee of $1,500, said fee to be
payable promptly following such effective date; PROVIDED, HOWEVER, that such fee
shall not apply to the first two such amendments, waivers or other modifications
hereunder during any continuous one year period (calculated from the date of
this Agreement).
8.17 JOINT AND SEVERAL OBLIGATIONS. Each Borrower shall be jointly and
severally liable for the Obligations arising in connection with Loans made to it
and the Obligations arising in connection with Loans made to the other Borrower;
PROVIDED, HOWEVER, that if it is at any time determined that either Borrower is
liable as a guarantor (and not as a co-obligor or co-borrower) with respect to
such Obligations arising in connection with Loans made to the other Borrower
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(the "Guaranteed Obligations"), each Borrower hereby agrees to the terms set
forth on Exhibit L hereto with respect to the Guaranteed Obligations.
-54-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
NEW CENTURY MORTGAGE CORPORATION
By /s/ Xxxxxxx Xxxxxxxx
----------------------------------------
Its EVP/COO
----------------------------------------
ADDRESS FOR NOTICES:
Attn: Xxxx X. Xxxxxxx
00000 Xxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Telephone Number: (000) 000-0000
Telecopier Number: (000) 000-0000
NC CAPITAL CORPORATION
By /s/ Xxxxxxx Xxxxxxxx
----------------------------------------
Its President
----------------------------------------
ADDRESS FOR NOTICES:
Attn: Xxxx X. Xxxxxxx
00000 Xxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Telephone Number: (000) 000-0000
Telecopier Number: (000) 000-0000
S-1
U.S. BANK NATIONAL ASSOCIATION
By /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Its Senior Vice President
----------------------------------------
ADDRESS FOR NOTICES:
Attn: Xxxxx X. Xxxxxxx
Mortgage Banking Services Division
Mail Station MPFP 0508
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Telephone Number: (000) 000-0000
Telecopier Number: (000) 000-0000
GUARANTY BANK
By /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Its Senior Vice President
----------------------------------------
ADDRESS FOR NOTICES:
Attn: Xxxxxxx X. Xxxxxxx
0000 Xxxxxxx Xxx.
Xxxxxx, Xxxxx 00000
Telephone Number: (000) 000-0000
Telecopier Number: (000) 000-0000
RESIDENTIAL FUNDING CORPORATION
By /s/ Xxxx Xxxx
----------------------------------------
Its Director
----------------------------------------
ADDRESS FOR NOTICES:
Attn: Xxxx Xxxx
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Telephone Number: (000) 000-0000
Telecopier Number: (000) 000-0000
S-2
WASHINGTON MUTUAL BANK, FA
By /s/ Xxxxxxxx Xxxxxx
----------------------------------------
Its Vice President - Regional Manager
----------------------------------------
ADDRESS FOR NOTICES:
Attn: Xxxxxxxx Xxxxxx
00000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Telephone Number: (000) 000-0000
Telecopier Number: (000) 000-0000
CDC MORTGAGE CAPITAL INC.
By /s/ Xxxx Xxxxxxx
----------------------------------------
Its XXXX XXXXXXX
----------------------------------------
MANAGING DIRECTOR
By /s/ Xxxxxxx Xxxxxxx
----------------------------------------
Its Xxxxxxx Xxxxxxx
----------------------------------------
Director
ADDRESS FOR NOTICES:
Attn: Xxxxxxx Xxxxxxx
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone Number: (000) 000-0000
Telecopier Number: (000) 000-0000
Attn: General Counsel
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone Number: (000) 000-0000
Telecopier Number: (000) 000-0000
S-3
EXHIBITS
A Form of Compliance/Borrowing Base Certificate
B Form of Confirmation of Borrowing/Paydown/Conversion
C Reaffirmation of Pledge and Security Agreement
D Reaffirmation of Servicing Security Agreement
E Formula for Determining Warehousing Collateral Value
F Form of Note
G Reaffirmation of Guaranty
H Closing Agent Instructions
I Matters to be Covered by Opinion of Counsel to the Company and NCFC at
closing
J Operational Certificate
K Acknowledgement of Exiting Lenders
L Terms of Guaranteed Obligations
SCHEDULES
1.01(a) Underwriting Guidelines
1.01(b) Commitment Amounts
2.01(j) Effective Date Fee Percentages
3.01 Subsidiaries
3.05 Litigation
4.09 Existing Liens
SCHEDULE 1.01(a)
UNDERWRITING GUIDELINES
See Attached
SCHEDULE 1.01(b)
LENDER COMMITMENTS
Lender Commitment
------ ----------
U.S. Bank National Association $75,000,000
Guaranty Bank $65,000,000
Residential Funding Corporation $65,000,000
CDC Mortgage Capital Inc. $35,000,000
Washington Mutual Bank, FA $25,000,000*
* Effective July 31, 2001, the Commitment of Washington Mutual Bank, FA
shall be reduced to $0.
SCHEDULE 2.01(j)
EFFECTIVE DATE FEE PERCENTAGES
Original Commitment Amount Effective Date Fee Percentage
-------------------------- -----------------------------
$65,000,000 or greater 0.15%
$45,000,000 or greater but less
than $65,000,000 0.10%
$25,000,000 or greater but less
than $45,000,000 0.05%
Less than $25,000,000 0.00%
SCHEDULE 3.01
SUBSIDIARIES
Name State or Other Jurisdiction of Incorporation
---- --------------------------------------------
New Century Mortgage Corporation California
(also doing business as NCMC
Mortgage Corporation)
NC Capital Corporation California
New Century R.E.O. Corp. California
NC Residual Corporation Delaware
NC Residual II Corporation Delaware
New Century Mortgage Securities, Inc. Delaware
Worth Funding Incorporated California
PWF Corporation California
(also doing business as Primewest
Funding and Western Capital Mortgage)
Anyloan Financial Corporation Delaware
xxxxxxx.xxx California
NC Insurance Services, Inc. Louisiana
SCHEDULE 3.05
LITIGATION
[Omitted]
-i-
SCHEDULE 4.09
EXISTING LIENS
See attached.
-i-
EXHIBIT A TO
FIFTH AMENDED AND
RESTATED CREDIT AGREEMENT
FORM OF
COMPLIANCE/BORROWING BASE CERTIFICATE
U.S. Bank National Association Guaranty Bank
Attention: Mortgage Banking Services Attention:_________________
Division 0000 Xxxxxxx Xxxxxx
000 Xxxxxx Xxxxxx Xxxxx Xxxxxx, Xxxxx 00000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Residential Funding Corporation Washington Mutual Bank, FA
Attention:______________________ Attention:_________________
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000 17821 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000 Xxxxxx, Xxxxxxxxxx 00000
CDC Mortgage Capital Inc.
Attention:______________________
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
We submit this certificate to you in accordance with the terms of
Section 4.01(c)(ii) of the Fifth Amended and Restated Credit Agreement dated as
of May 23, 2001 (as the same may be amended, supplemented or restated from time
to time, the "Credit Agreement") by and among New Century Mortgage Corporation,
NC Capital Corporation, the lenders party thereto (the "Lenders") and U.S. Bank
National Association, as agent for the Lenders (in such capacity, the "Agent").
Each capitalized term used herein and not defined herein has the same meaning
ascribed to such term in the Credit Agreement or in Exhibit E thereto.
The undersigned hereby certifies the following as of the close of
business on _________ ___, 200__:
A-1
1. The Borrowing Base was calculated as follows:
--------------------------------------------
WAREHOUSING COLLATERAL VALUE
(a) Eligible Mortgage Loans $ _________
(b) Aged Mortgage Loans $ _________
Eligible Mortgage Loans and Aged
Mortgage Loans consisting of "C" Mortgages $ _________
Eligible Mortgage Loans and Aged
Mortgage Loans consisting of "C-" Mortgages $ _________
Eligible Mortgage Loans and Aged Mortgage
Loans with an original principal balance in
excess of $275,000 $ _________
Eligible Mortgage Loans and Aged Mortgage
Loans with an original principal balance from
$500,000 to $750,000 $ _________
Eligible Mortgage Loans and Aged Mortgage
Loans with an original principal balance from
$750,001 to $1,000,000 $ _________
LESS:
----
(c) Pledged Mortgage Loans with No Collateral Value $ _________
180 days or more since origination or
acquisition $ _________
90 days or more in warehouse (other than Aged
Mortgage Loans) $ _________
120 days or more in warehouse (Aged
Mortgage Loans) $ _________
Promissory Note and/or Collateral Documents
not returned or purchased by an Investor (45 days) $ _________
Collateral Document not returned (21 days) $ _________
In default (one full reporting period) $ _________
A-2
Requested documents not delivered
(5 Business Days) $ _________
Promissory Note and/or Collateral Documents
not delivered (wet funding loans; 7 Business Days) $ _________
Wet funding loans in excess of applicable sublimit $ _________
Wet funding loans not closed $ _________
Aged Mortgage Loans in excess of
applicable sublimit $ _________
Mortgages with an original principal balance
in Excess of $275,000 in excess of applicable
sublimit $ _________
Mortgages with an original principal balance
from $500,000 to $750,000 in excess of
applicable sublimit $ _________
Mortgages with an original principal balance
from $750,001 to $1,000,000 in excess of
applicable sublimit $ _________
Second Mortgages in excess of applicable sublimit $ _________
Mortgages with a risk rating of "C" in excess
of applicable sublimit $ _________
Mortgages with a risk rating of "C-" in excess
of applicable sublimit $ _________
Not marketable $ _________
Agent does not have perfected, first priority
security interest $ _________
Risk rating lower than C- $ _________
Other ineligible $ _________
A-3
(d) Total Eligible Mortgage Loans ((a) - (b) - (c), to the
extent applicable to Eligible Mortgage Loans, rather
than Aged Mortgage Loans) $ _________
(e) Lesser of: (i) Unpaid principal balance less
1% of original principal balance or
(ii) purchase price under the
Take-Out Commitment to which
each Mortgage Loan has been assigned
or, if a Mortgage Loan has not been
so assigned, the weighted average
purchase price for Mortgage Loans
under the Take-Out Commitments to
which the Mortgage Loan has been
pre-approved for delivery, less in
each case 2% _________%
(f) Total (d) x (e) $ _________
(g) Total Aged Mortgage Loans ((b) - (c), to the extent applicable
to Aged Mortgage Loans, rather than Eligible Mortgage Loans,
not to exceed $5,000,000
in any event) $ _________
(h) Lesser of: (i) Unpaid principal balance, less
any discount points paid, less
10% of original principal balance or
(ii) purchase price under the
Take-Out Commitment to which
each Mortgage Loan has been assigned
or, if a Mortgage Loan has not been
so assigned, the weighted average
purchase price for Mortgage Loans
under the Take-Out Commitments to
which the Mortgage Loan has been
pre-approved for delivery, less in
each case 10% _________%
(i) Total (g) x (h) $ _________
(j) Total (f) + (i) $ _________
PLUS:
----
(k) Other Assets $ _________
TOTAL WAREHOUSING BORROWING BASE $ _________
A-4
2. LEVERAGE RATIO REQUIREMENTS OF SECTION 4.16:
-------------------------------------------
(a) NCFC Quarterly Average Leverage Ratio
(i) Maximum ratio permitted by Section 4.16
for any period of measurement: 10.0 to 1.0
(ii) The ratio of Total Liabilities to Tangible Net
Worth at the end of each month:
Total Liabilities (average daily
amount outstanding during the
quarter) $ _________
TO
Tangible Net Worth (average of
Tangible Net Worth at the end of
each month during the quarter) $ _________= ____ to 1.0
(b) NCFC Daily Leverage Ratio
(i) Maximum ratio permitted by Section 4.16
on any date: 15.0 to 1.0
(ii) The ratio of Total Liabilities to Tangible Net
Worth:
Total Liabilities (highest day during
month) $ _________
TO
Tangible Net Worth at the end of
preceding month $ _________= ____ to 1.0
(c) NCFC Adjusted Leverage Ratio
(i) Maximum ratio permitted by Section 4.16
as of the last day of each fiscal quarter: 12.0 to 1.0
(ii) The ratio of Total Liabilities to Adjusted
Tangible Net Worth:
Total Liabilities at such date $ _________
A-5
TO
Adjusted Tangible Net Worth
at such date $ _________= ____ to 1.0
(d) NCMC Leverage Ratio
(i) Maximum ratio permitted by Section 4.16
as of the last day of each fiscal quarter: 8.0 to 1.0
(ii) The ratio of Total Liabilities to Tangible Net
Worth at such date:
Total Liabilities at such date $ _________
TO
Tangible Net Worth at such date $ _________= ____ to 1.0
3. NET WORTH REQUIREMENTS OF SECTION 4.14:
(a) Minimum Tangible Net Worth of NCFC required by Section 4.14: Greater of--
(i) $130,000,000; or
(ii) 85% of Tangible Net Worth
at prior fiscal year end $ _________
PLUS
90% of capital contributions made
during such fiscal year $ _________
PLUS
50% of positive year-to-date
net income $ _________
Total $ _________
(b) Tangible Net Worth at the end of the most recently concluded fiscal month:
(i) Net Worth of NCFC at
such date: $ _________
A-6
LESS
(ii) Intangible assets at such date
consisting of:
Goodwill $ _________
Other Intangibles $ _________
Total $ _________
(c) Minimum Tangible Net Worth of NCMC required by Section 4.14: Greater of--
(i) $85,000,000; or
(ii) 85% of Tangible Net Worth
at prior fiscal year end $ _________
PLUS
90% of capital contributions made
during such fiscal year $ _________
PLUS
50% of positive year-to-date
net income $ _________
Total $ _________
(d) Tangible Net Worth at the end of the most recently concluded fiscal month:
(i) Net Worth of NCMC at
such date $ _________
LESS
(ii) Intangible assets at such date
consisting of:
Goodwill $ _________
Other Intangibles $ _________
A-7
Total $ _________
4. MINIMUM LIQUIDITY UNDER SECTION 4.15:
(a) Cash, plus (i) the lesser of the Borrowing Base or the
aggregate Commitment Amounts less, in either case, the
outstanding principal balance of all Loans ("Available
Borrowings") and (ii) the lesser of 80% of outstanding
servicing-sale receivables or $5,000,000 ("Servicing
Receivables"), in each case as of the
most recently concluded fiscal month: $10,000,000
(b) Cash on hand as of such date $ _________
Available Borrowings as of such date $ _________
Servicing Receivables as of such date $ _________
Total $ _________
A-8
5. (a) The undersigned is the duly elected chief financial officer of NCMC;
(b) The undersigned has reviewed the terms of the Credit Agreement and has
made, or has caused to be made under the supervision of the
undersigned, a detailed review of the transactions and conditions of
NCMC during the accounting period covered by this Certificate; and
(c) These examinations did not disclose, and the undersigned has no
knowledge, whether arising out of such examinations or otherwise, of
the existence of any condition or event that constitutes an Event of
Default or an Unmatured Event of Default during or at the end of the
accounting period covered by this Certificate, except as described in
a separate attachment to this Certificate, the exceptions listing, in
detail, the nature of the condition or event, the period during which
it has existed and the action that NCMC has taken, is taking, or
proposes to take with respect to each such condition or event.
6. Attached hereto is a schedule of the Pledged Mortgage Loans (as defined in
the Pledge and Security Agreement) that have no Warehousing Collateral
Value at the date hereof.
Dated: ____________, 200__ NEW CENTURY MORTGAGE CORPORATION
By ______________________________________
Its _____________________________________
A-9
EXHIBIT B TO
FIFTH AMENDED AND
RESTATED CREDIT AGREEMENT
FORM OF
CONFIRMATION OF
BORROWING/PAYDOWN/CONVERSION
[On Company Letterhead]
[Date]
U.S. Bank National Association,
as Agent
Attention: Mortgage Banking Services Division
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: Confirmation of Borrowing/Paydown/Conversion
Ladies and Gentlemen:
Reference is made to the Fifth Amended and Restated Credit Agreement dated
as of May 23, 2001 (as the same may be amended, supplemented or restated from
time to time, the "Credit Agreement"), by and among New Century Mortgage
Corporation ("NCMC" or "Borrower"), NC Capital Corporation ("NCCC" or "Borrower"
and together with NCMC, the "Borrowers") the lenders party thereto (the
"Lenders") and U.S. Bank National Association ("USBNA") as agent for the Lenders
(in such capacity, the "Agent"). Each capitalized term used herein shall have
the meaning ascribed to such term in the Credit Agreement.
NCMC and the undersigned hereby confirm and certify to the Agent as
follows:
1. The undersigned is authorized to submit this Confirmation of Borrowing/
Paydown/Conversion on behalf of NCMC.
2. On _________________, 200__, NCMC (a) requested the Lenders to make
Warehousing Loans in the aggregate principal amount of $__________, (b)
requested USBNA to make a Swingline Loan in the aggregate principal amount of
$__________, (c) made principal payments on outstanding Warehousing Loans in the
aggregate amount of $__________, or (d) converted outstanding Advances to
outstanding Advances of another type,* as follows: Warehousing Credit
----------
* For purposes of this Certificate, Advances being converted shall be
described as principal payments, and the new Advances into which such
Advances are being converted shall be described as new Advances.
B-1
Warhousing Credit
-----------------
Balance-
Reference Rate Eurodollar Rate Funded Rate
-------------- --------------- -----------
New Advance
------------ ------------- -------------
Principal Payment
------------ ------------- -------------
Net Amount Outstanding
============ ============= =============
Interest Rate ______% ______% ______%
3. In connection with any requested Warehousing Loans or Swingline Loans,
please disburse $__________ as follows [include wire instructions]:
4. In connection with any requested Warehousing Loans or Swingline Loans:
(a) no Event of Default or Unmatured Event of Default has occurred or will exist
upon the making of any such Warehousing Loans or Swingline Loans; (b) the
representations and warranties contained in Section 3 of the Credit Agreement,
in Section 5 of the Pledge and Security Agreement, in Section 4 of the Servicing
Security Agreement and in Section 15 of the Guaranty are true and correct in all
material respects with the same force and effect as if made on and as of the
date hereof; and (c) after giving effect to the Warehousing Loans or Swingline
Loans requested herein, the sum of the outstanding principal balance under the
Notes shall not exceed the Borrowing Base.
Very truly yours,
NEW CENTURY MORTGAGE CORPORATION
By ______________________________________
Its _____________________________________
B-2
EXHIBIT C TO
FIFTH AMENDED AND
RESTATED CREDIT AGREEMENT
NEW CENTURY MORTGAGE CORPORATION
REAFFIRMATION OF PLEDGE AND SECURITY AGREEMENT
Reference is made to the Amended and Restated Pledge and Security
Agreement dated as of April 30, 2000 (as the same has been and may in the future
be amended, supplemented or restated from time to time, the "Pledge and Security
Agreement"), made and given by the undersigned to secure the Obligations, Lease
Obligations and Letter of Credit Obligations (as defined in the Prior Credit
Agreement and Pledge and Security Agreement) of New Century Mortgage Corporation
("NCMC"), NC Capital Corporation ("NCCC") or New Century Financial Corporation
("NCFC") in connection with the Fourth Amended and Restated Credit Agreement
dated as of May 26, 1999 (as amended, the "Prior Credit Agreement") by and among
NCMC, NCCC, the lenders party thereto (the "Lenders") and U.S. Bank National
Association, a national banking association, as agent for the Lenders (in such
capacity, the "Agent").
The undersigned hereby (a) agrees that the obligations of the
undersigned under the Fifth Amended and Restated Credit Agreement dated as of
May 23, 2001 (the "New Credit Agreement") constitute "Obligations" within the
meaning of the Pledge and Security Agreement and (b) agrees and reaffirms that
the collateral pledged pursuant to the Pledge and Security Agreement ("Pledged
Collateral") secures, among other things, the undersigned's obligations and
duties under the New Credit Agreement, as the same may be amended from time to
time, and the obligations of the undersigned under the Pledge and Security
Agreement. The undersigned further reaffirms that all of the terms, covenants
and conditions of the Pledge and Security Agreement remain in full force and
effect.
Dated: May 23, 2001 NEW CENTURY MORTGAGE CORPORATION
By ______________________________________
Its _____________________________________
C-1
EXHIBIT D TO
FIFTH AMENDED AND
RESTATED CREDIT AGREEMENT
NEW CENTURY MORTGAGE CORPORATION
REAFFIRMATION OF SERVICING SECURITY AGREEMENT
Reference is made to the Amended and Restated Servicing Security
Agreement dated as of April 30, 2000 (as the same has been and may in the future
be amended, supplemented or restated from time to time, the "Servicing Security
Agreement"), made and given by the undersigned to secure the Obligations, Lease
Obligations and Letter of Credit Obligations (as defined in the Prior Credit
Agreement and Servicing Security Agreement) of New Century Mortgage Corporation
("NCMC"), NC Capital Corporation ("NCCC") or New Century Financial Corporation
("NCFC") in connection with the Fourth Amended and Restated Credit Agreement
dated as of May 26, 1999 (as amended, the "Prior Credit Agreement") by and among
NCMC, NCCC, the lenders party thereto (the "Lenders") and U.S. Bank National
Association, a national banking association, as agent for the Lenders (in such
capacity, the "Agent").
The undersigned hereby (a) agrees that the obligations of the
undersigned under the Fifth Amended and Restated Credit Agreement dated as of
May 23, 2001 (the "New Credit Agreement") constitute "Obligations" within the
meaning of the Servicing Security Agreement and (b) agrees and reaffirms that
the collateral pledged pursuant to the Servicing Security Agreement ("Pledged
Collateral") secures, among other things, the undersigned's obligations and
duties under the New Credit Agreement, as the same may be amended from time to
time, and the obligations of the undersigned under the Servicing Security
Agreement. The undersigned further reaffirms that all of the terms, covenants
and conditions of the Servicing Security Agreement remain in full force and
effect.
Dated: May 23, 2001 NEW CENTURY MORTGAGE CORPORATION
By ______________________________________
Its _____________________________________
D-1
EXHIBIT E TO
FIFTH AMENDED AND
RESTATED CREDIT AGREEMENT
FORMULA FOR DETERMINING
WAREHOUSING COLLATERAL VALUE
"WAREHOUSING COLLATERAL VALUE": on any date of determination as it
pertains to the following described types or kinds of assets which constitute
Warehousing Collateral:
(1) A Mortgage Loan the entire interest in which is owned by any
Borrower and which is an Eligible Mortgage Loan covering a completed residential
property; PROVIDED, that such Mortgage Loan has been pre-approved for purchase
under a Take-Out Commitment and the aggregate available amount of such Take-Out
Commitment is not less than the aggregate outstanding principal amount of
Mortgage Loans pre-approved for delivery thereunder; and PROVIDED FURTHER, that
at the time such Mortgage Loan was pledged under the Pledge and Security
Agreement not more than 180 days had elapsed from the date such Mortgage Loan
was closed: the least of (i) the purchase price under the Take-Out Commitment to
which such Mortgage Loan has been assigned or, if such Mortgage Loan has not
been so assigned, the weighted average purchase price for Mortgage Loans under
Take-Out Commitments under which such Mortgage Loan has been pre-approved for
delivery, MINUS two percent (2%) of the original principal balance, (ii) the
unpaid principal amount of such Mortgage Loan, MINUS one percent (1%) of the
original principal balance, or (iii) at the election of the Agent or pursuant to
directions to the Agent from the Required Lenders, the Fair Market Value of such
Mortgage Loan, MINUS two percent (2%) of the original principal balance.
(2) A Mortgage Loan the entire interest in which is owned by the
Borrower and which is an Aged Mortgage Loan covering a completed residential
property; PROVIDED, that such Mortgage Loan is subject to or eligible for
delivery under a Take-Out Commitment and the aggregate principal amount of such
Take-Out Commitments which has not previously been used is not less than the
aggregate outstanding principal amount of Mortgage Loans subject thereto or
eligible for delivery thereunder, and PROVIDED FURTHER, that at the time such
Mortgage Loan was pledged under the Pledge and Security Agreement not more than
180 days had elapsed from the date such Mortgage Loan was closed: the least of
(i) the purchase price under the Take-Out Commitment to which such Mortgage Loan
has been assigned or, if such Mortgage Loan has not been so assigned, the
weighted average purchase price for Mortgage Loans under Take-Out Commitments
under which such Mortgage Loan has been pre-approved for delivery, LESS ten
percent (10%) of the original principal balance, (ii) the unpaid principal
amount of such Mortgage Loan, LESS any discount points paid in connection with
such Mortgage Loan, and LESS ten percent (10%) of the original principal
balance, or (iii) at the election of the Agent, the Fair Market Value of such
Mortgage Loan, LESS ten percent (10%) of the original principal balance.
E-1
(3) Such other assets of the Borrowers as the Borrowers shall offer to
the Required Lenders and as the Required Lenders shall accept in their sole
discretion as Warehousing Collateral: the amount of Warehousing Collateral Value
which the Required Lenders in their sole discretion assign thereto.
Notwithstanding the foregoing:
(i) the maximum aggregate Warehousing Collateral Value of all Mortgage
Loans which have been closed and funded under Agreements to Pledge, and with
respect to which the Agent has not received the instruments and documents
described in paragraph 2 of the related Collateral Identification Letters, shall
be not more than (a) during each Month-End Period, sixty percent (60%) of the
aggregate Commitment Amounts and (b) at all other times, thirty-five percent
(35%) of the aggregate Commitment Amounts;
(ii) the maximum aggregate Warehousing Collateral Value of Mortgage
Loans with original principal balances greater than $275,000 shall not exceed
thirty-five percent (35%) of the aggregate Commitment Amounts;
(iii) the maximum aggregate Warehousing Collateral Value of Mortgage
Loans with original principal balances of $500,000 or greater but less than
$750,000 shall not exceed twenty percent (20%) of the aggregate Commitment
Amounts;
(iv) the maximum aggregate Warehousing Collateral Value of Mortgage
Loans with original principal balances of $750,000 or greater shall not exceed
ten percent (10%) of the aggregate Commitment Amounts;
(v) the maximum aggregate Warehousing Collateral Value of a single
Mortgage Loan shall not exceed $1,000,000;
(vi) the maximum aggregate Warehousing Collateral Value of all Mortgage
Loans with a Risk Rating of C shall not exceed fifteen percent (15%) of the
aggregate Commitment Amounts;
(vii) the maximum aggregate Warehousing Collateral Value of all
Mortgage Loans with a Risk Rating of C- shall not exceed ten percent (10%) of
the aggregate Commitment Amounts;
(viii) the maximum aggregate Warehousing Collateral Value of all
Mortgage Loans secured by Second Mortgages shall not exceed ten percent (10%) of
the aggregate Commitment Amounts; and
(ix) the maximum aggregate Warehousing Collateral Value of all Aged
Mortgage Loans shall not exceed $5,000,000.
A Mortgage Loan, or Mortgage-backed Security issued in consideration of
a Mortgage Loan, will be considered as having no Warehousing Collateral Value
if, as to any such Mortgage Loan, any of the following events occur:
E-2
(a) more than ninety (90) days, in the case of an Eligible Mortgage
Loan other than an Aged Mortgage Loan, elapse from the date on which the
Mortgage Note and other documents relating to such Mortgage Loan were delivered
to the Agent in accordance with Sections 4.01 and 4.02 of the Pledge and
Security Agreement;
(b) more than one hundred twenty (120) days, in the case of an Aged
Mortgage Loan, elapse from the date on which the Mortgage Note and other
documents relating to such Mortgage Loan were delivered to the Agent in
accordance with Sections 4.01 and 4.02 of the Pledge and Security Agreement;
(c) twenty-one (21) or more days elapse from the date a document
relating to such Mortgage Loan was delivered to the Borrowers for correction in
accordance with Section 10.01 of the Pledge and Security Agreement and such
document has not been returned to the Agent;
(d) forty-five (45) or more days elapse from the date such Mortgage
Loan was delivered to an Investor pursuant to Section 10.02 of the Pledge and
Security Agreement for examination and purchase under a Take-Out Commitment and
such Mortgage Loan has not been returned to the Agent;
(e) more than one payment on such Mortgage Loan is delinquent, as
reported on any Compliance/Borrowing Base Certificate delivered to each Lender
pursuant to Section 4.01(c)(ii) of the Credit Agreement, such Mortgage Loan has
been rescinded, canceled or avoided, or such Mortgage Loan is subject to any
rights of rescission, cancellation or avoidance or to any counterclaims, offsets
or defenses, whether by operation of law or otherwise;
(f) the Borrowers fail to deliver any document relating to such
Mortgage Loan within five (5) Business Days after being requested to do so by
the Agent pursuant to Section 4.03 of the Pledge and Security Agreement;
(g) such Mortgage Loan was listed on a Loan Detail Listing delivered to
the Agent with an Agreement to Pledge and a Collateral Identification Letter,
and such Mortgage Loan shall not have closed on or before the close of business
on the Business Day on which such Loan Detail Listing was delivered;
(h) such Mortgage Loan was closed and funded with the proceeds of a
Warehousing Loan under an Agreement to Pledge and the Borrowers fail to deliver
to the Agent, with respect to such Mortgage Loan, within seven (7) Business Days
after the date of such Agreement to Pledge, the documents referred to in Section
4.02 of the Pledge and Security Agreement;
(i) the Agent, for the benefit of the Lenders, does not have a
perfected, first priority security interest in such Mortgage Loan;
(j) the Agent notifies the Borrowers that in its reasonable opinion
such Mortgage Loan is not marketable and will not be given Warehousing
Collateral Value;
E-3
(k) such Mortgage Loan has a Risk Rating lower than C-; or
(l) such Mortgage Loan was closed and funded more than one hundred
eighty (180) days prior to the date the Mortgage Note and other documents
relating to such Mortgage Loan were delivered to the Agent in accordance with
Sections 4.01 and 4.02 of the Pledge and Security Agreement.
As used in the foregoing definition of Warehousing Collateral Value and
all defined terms used therein and in the following defined terms, all terms
defined in the Credit Agreement are used as therein defined and, in addition,
the following terms shall have the following respective meanings:
"AGED MORTGAGE LOAN": an Eligible Mortgage Loan that has not been
released from the Agent's security interest within 90 days after the date on
which the Eligible Mortgage Loan was delivered or deemed delivered to the Agent
pursuant to Sections 4.01 and 4.02 of the Pledge and Security Agreement.
"AGREEMENT TO PLEDGE": as defined in the Pledge and Security Agreement.
"APPRAISED VALUE": with respect to an interest in real estate, the then
current fair market value thereof as of a recent date, as determined in
accordance with accepted methods of appraising by a qualified appraiser who is a
member of the American Institute of Real Estate Appraisers or other group of
professional appraisers.
"APPROVED SECOND MORTGAGE INVESTOR": an Investor that has been approved
in writing by the Agent for the purchase of Mortgage Loans secured by Second
Mortgages.
"COLLATERAL IDENTIFICATION LETTER": as defined in the Pledge and
Security Agreement.
"ELIGIBLE MORTGAGE LOAN": a closed-end Mortgage Loan secured by a First
Mortgage or a Second Mortgage on improved real estate in an original principal
amount not in excess of (a) in the case of Mortgage Loans secured by First
Mortgages, 80% of the Appraised Value of such real estate, and (b) in the case
of Mortgage Loans secured by Second Mortgages, 80% of the Appraised Value of
such real estate MINUS the amount of the Mortgage Loan secured by the First
Mortgage thereon, unless either (i) the amount of such Mortgage Loan in excess
of the maximum set forth above is insured, or is subject to a commitment to be
insured, by an insurer approved by the Agent, or (ii) such Mortgage Loan (A) has
a Loan-to-Value Ratio of not more than 100%, (B) in the case of Mortgage Loans
secured by a First Mortgage, satisfies the underwriting guidelines or other
applicable standards of the Investor referenced in clause (C) below for a Risk
Rating of at least "C-", or in the case of Mortgage Loans secured by a Second
Mortgage, is underwritten in accordance with the applicable Underwriting
Guidelines, (C) in the case of a Mortgage Loan secured by a Second Mortgage, has
been pre-approved by an Approved Second Mortgage Investor for purchase under a
Take-Out Commitment, (D) in the case of a Mortgage Loan secured by a Second
Mortgage, is originated or acquired pursuant to a program
E-4
offered by such Approved Second Mortgage Investor and (E) has an original
principal amount of not more than $1,000,000.
"FAIR MARKET VALUE": on any date of determination with respect to any
Mortgage Loan, the bid price quoted in writing to the Agent as of the
computation date by two nationally recognized dealers selected by the Agent who
at the time are making a market in similar Mortgage Loans, multiplied, in any
case, by the outstanding principal amount thereof.
"FIRST MORTGAGE": a Mortgage which is subject to no prior or superior
mortgage liens.
"LOAN DETAIL LISTING": as defined in the Pledge and Security Agreement.
"LOAN-TO-VALUE RATIO": with respect to a Mortgage Loan secured by a
Mortgage on improved real estate, the ratio (expressed as a percentage) which
(a) the sum of the original principal amount of such Mortgage Loan PLUS the
original principal amount of the Mortgage Loan that is secured by prior
Mortgages on such real estate, if any, bears to (b) the Appraised Value of such
real estate.
"MONTH-END PERIOD": the period beginning on the third to the last
Business Day of each month and ending on the fifth Business Day of the following
month.
"RISK RATING": the risk rating of a Mortgage Loan, determined using the
Underwriting Guidelines or other applicable standards of the Investor to which
such Mortgage Loan is to be sold by any Borrower under a Take-Out Commitment
previously issued to such Borrower by such Investor; PROVIDED, that such
underwriting guidelines or other applicable standards comply with industry
standards in the sole judgment of the Agent.
"SECOND MORTGAGE": a Mortgage which is subject to one prior or superior
Mortgage.
"TAKE-OUT COMMITMENT": a current, written commitment issued to any
Borrower by an Investor to purchase Mortgage Loans, at a definite price or
yield, within a specified time period.
E-5
EXHIBIT F TO
FIFTH AMENDED AND
RESTATED CREDIT AGREEMENT
FORM OF PROMISSORY NOTE
(Warehousing Note)
May 23, 2001
$ _______________ Minneapolis, Minnesota
FOR VALUE RECEIVED, each of NEW CENTURY MORTGAGE CORPORATION, a
California corporation ("NCMC") and NC CAPITAL CORPORATION, a California
corporation ("NCCC" and together with NCMC, the "Borrowers"), hereby promises to
pay to the order of ______________________ (the "Lender") at the main office of
the Agent in Minneapolis, Minnesota, in lawful money of the United States of
America in Immediately Available Funds, the principal sum of ___ MILLION AND
NO/100 DOLLARS ($ __________) or the aggregate unpaid principal amount of all
Warehousing Loans [and Swingline Loans] made by the Lender pursuant to the
Credit Agreement described below, whichever is less, and to pay interest in like
funds from the date hereof on the unpaid balance thereof at the rates per annum
and at such times as are specified in the Credit Agreement. Interest (computed
on the basis of actual days elapsed and a year of 360 days) shall be payable at
said office at the times specified in the Credit Agreement.
Principal hereof shall be payable in the amounts and at the times set
forth in the Credit Agreement.
This note is one of the Warehousing Notes referred to in the Fifth
Amended and Restated Credit Agreement dated as of May 23, 2001 (as the same may
be amended, modified or restated from time to time, the "Credit Agreement"), by
and among the Borrowers, the Lender, the other lenders party thereto and U.S.
Bank National Association, as agent for the Lenders (in such capacity, the
"Agent"). Unless otherwise defined herein, capitalized terms used herein shall
have the meanings given to such terms in the Credit Agreement and in the
Exhibits thereto. This note is subject to certain mandatory and voluntary
prepayments and its maturity is subject to acceleration, in each case upon the
terms provided in the Credit Agreement.
The Borrowers hereby waive diligence, presentment, demand, protest, and
notice (except such notice as is required under the Loan Documents) of any kind
whatsoever. The nonexercise by the Lender of any of its rights hereunder or
under the other Loan Documents in any particular instance shall not constitute a
waiver thereof in any subsequent instance.
This note is entitled to the benefit of the Guaranty, the Pledge and
Security Agreement, the Servicing Security Agreement and the other Loan
Documents.
F-1
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. In the event of
default hereunder, the Borrowers agree to pay all costs and expenses of
collection, including but not limited to reasonable attorneys' fees.
[Notwithstanding the foregoing paragraphs and all other provisions of
this note and the Credit Agreement, none of the terms and provisions of this
note or the Credit Agreement shall ever be construed to create a contract to pay
to the Lender, for the use, forbearance or detention of money, interest in
excess of the maximum amount of interest permitted to be charged by the Lender
to the Borrowers under applicable state or federal law from time to time in
effect, and the Borrowers shall never be required to pay interest in excess of
such maximum amount. If, for any reason, interest is paid hereon in excess of
such maximum amount (whether as a result of the payment of this note prior to
its maturity or otherwise), then promptly upon any determination that such
excess has been paid the Lender will, at its option, either refund such excess
to the Borrowers or apply such excess to the principal owing hereunder. All
interest paid shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full period of the Borrowers'
credit relationship with the Lender until payment in full of the principal
(including the period of any renewal or extension) so that the interest for such
full period shall not exceed the maximum rate of interest permitted by
applicable law.]
NEW CENTURY MORTGAGE CORPORATION
By ______________________________________
Its _____________________________________
NC CAPITAL CORPORATION
By ______________________________________
Its _____________________________________
F-2
EXHIBIT G TO
FIFTH AMENDED AND
RESTATED CREDIT AGREEMENT
NEW CENTURY FINANCIAL CORPORATION
REAFFIRMATION OF GUARANTY
Reference is made to Guaranty dated as of May 29, 1998 (the
"Guaranty"), made and given by the undersigned to secure the Guarantied
Obligations (as defined in the Guaranty) of New Century Mortgage Corporation
("NCMC") to the Lenders in connection with the Third Amended and Restated Credit
Agreement dated as of May 29, 1998 (the "Prior Credit Agreement"), by and
between NCMC, the lenders party thereto (the "Lenders") and U.S. Bank National
Association, a national banking association, as agent for the Lenders (in such
capacity, the "Agent").
The undersigned hereby (a) consents to the terms of the Fifth Amended
and Restated Credit Agreement dated as of May 23, 2001 (as the same may be
amended, supplemented or restated from time to time, the "New Credit Agreement")
and to the execution and delivery of the New Credit Agreement by NCMC and NC
Capital Corporation ("NCCC" and together with NCMC, the "Borrowers"); and (b)
agrees that the obligations of the Borrowers under the New Credit Agreement
constitute "Guarantied Obligations" within the meaning of the Guaranty. The
undersigned further agrees and reaffirms that such Guarantied Obligations are
guaranteed by the undersigned in accordance with the terms and conditions of the
Guaranty, and that all of the terms, covenants and conditions of the Guaranty
remain in full force and effect.
Dated: May 23, 2001 NEW CENTURY FINANCIAL CORPORATION
By _____________________________________
Its ____________________________________
G-1
EXHIBIT H TO
FIFTH AMENDED AND
RESTATED CREDIT AGREEMENT
STATEMENT TO BE INCLUDED IN CLOSING INSTRUCTIONS
TO CLOSING AGENTS FOR WET FUNDED LOANS
"You are hereby notified that U.S. Bank National Association,
as agent for certain lenders (in such capacity, the "Agent"), has a security
interest in the deed of trust or mortgage note, the deed of trust or mortgage
and all other supporting documents for the above-referenced loan. Unless the
Agent otherwise instructs you, (i) if the mortgage loan is not funded within one
business day after your receipt of funds from the Agent, said funds are to be
returned by you to: U.S. Bank National Association, Minneapolis, Minnesota, ABA
No. 0000-0000-0 for credit to our Collateral Account No. 1731-0097-1378, and
(ii) all loan documents are to be returned to us by the second business day
after settlement."
H-1
EXHIBIT I TO
FIFTH AMENDED AND
RESTATED CREDIT AGREEMENT
MATTERS TO BE COVERED BY
THE OPINION OF COUNSEL TO NCFC, NCMC AND NCCC
The opinions of Xxxxxxxx Xxxxxxxxxxx, counsel to NCFC, NCMC and NCCC,
which are called for by Section 5.01(a)(xi) of the Fifth Amended and Restated
Credit Agreement, shall be satisfactory in form and substance to the Agent and
shall cover the matters set forth below, subject to such assumptions, exceptions
and qualifications as may be acceptable to the Agent and counsel to the Agent:
1. Each of NCFC, NCMC and NCCC (collectively, the "Transaction Parties"
and each, individually, a "Transaction Party") has been duly incorporated, is a
validly existing corporation and is in good standing under the laws of its
respective jurisdiction of incorporation, and has the requisite corporate power
to own its respective properties and to conduct its respective businesses as
currently conducted by it. Each of NCMC and NCCC is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
in which the character of the business conducted by it or the location of the
properties owned or leased by it make such qualification necessary, except in
jurisdictions in which failure to be in good standing will not preclude it from
enforcing its rights with respect to any material asset or expose it to any
material liability.
2. The execution, delivery and performance by each Transaction Party of
each Loan Document to which it is a party and the consummation of the
transactions contemplated thereby are within the corporate powers of such
Transaction Party, have been duly authorized by all necessary corporate action
and do not, and the consummation of the transactions contemplated thereby and
compliance by each Transaction Party with the applicable provisions thereof will
not, conflict with, constitute a default under or violate (a) any of the terms,
conditions or provisions of its Articles or Certificate of Incorporation or
bylaws, (b) any of the terms, conditions or provisions of any document,
agreement or other instrument which is known to me to which it is a party or by
which it is bound, (c) any judgment, writ, injunction, decree, order or ruling
of any court or governmental authority binding on it and known to me, or (d) any
statute, rule or regulation of any governmental authority binding on it.
3. Each Loan Document to which any Transaction Party is a party has
been duly executed and delivered by such Transaction Party and is the legal,
valid and binding obligation of such Transaction Party enforceable against such
Transaction Party in accordance with its terms, subject to limitations as to
enforceability which might result from general equitable principles or
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws affecting creditors' rights generally.
4. No consent, approval, waiver, license or authorization or other
action by or filing with any governmental authority is required in connection
with the execution, delivery and performance by any Transaction Party of any
Loan Document to which it is a party, the validity
I-1
or enforceability of any Loan Document or the consummation of the transactions
contemplated thereby except for those which have already been obtained and are
in full force and effect.
5. The Pledge and Security Agreement creates a valid security interest
in the Collateral described in Section 2 thereof, which security interest will,
after giving effect to the reaffirmation thereof executed and delivered in
connection with the Credit Agreement, secure the Obligations. The financing
statements filed under the Pledge and Security Agreement are in appropriate form
for filing with the offices identified thereon. Such financing statements
perfect the security interest granted to the Agent, for the benefit of the
Lenders, pursuant to the Pledge and Security Agreement to the extent such
security interest may be perfected by filing financing statements under the
Uniform Commercial Code.
6. There has been created under the Pledge and Security Agreement a
valid security interest in the Pledged Mortgage Loans (as defined therein).
Assuming delivery to, and the continued possession by, the Agent of the Mortgage
Notes relating to the Pledged Mortgage Loans, said security interests shall be
perfected. The laws of certain jurisdictions may require the recordation of an
assignment of each Mortgage in order to perfect a security interest in the
Mortgage (as opposed to the Mortgage Note secured thereby). If the Agent does
not record its assignment of the Mortgages in such jurisdictions, I express no
opinion as to the Agent's perfected security interest in such Mortgages (as
opposed to the Mortgage Notes secured thereby).
7. The Servicing Security Agreement creates a valid security interest
in the Collateral described in Section 2 thereof, which security interest will,
after giving effect to the reaffirmation thereof executed and delivered in
connection with the Credit Agreement, secure the Obligations. The financing
statements filed under the Servicing Security Agreement are in appropriate form
for filing with the offices identified thereon. Such financing statements
perfect the security interest granted to the Agent, for the benefit of the
Lenders, pursuant to the Servicing Security Agreement to the extent such
security interest may be perfected by filing financing statements under the
Uniform Commercial Code.
8. To the best knowledge of such counsel, there are no actions, suits
or proceedings pending or threatened against or affecting any Transaction Party
or any of its properties before any court or arbitrator, or any governmental
department, board, agency or other instrumentality which (i) challenge the
legality, validity or enforceability of any Loan Document, or (ii) if determined
adversely to such Transaction Party, would have a material adverse effect on the
business, operations, property or condition (financial or otherwise) of any
Transaction Party or on the ability of any Transaction Party to perform its
obligations under the Loan Documents.
I-2
EXHIBIT J TO
FIFTH AMENDED AND
RESTATED CREDIT AGREEMENT
FORM OF CERTIFICATE CONCERNING
BORROWER'S AUTHORIZED EMPLOYEES
I, ________________________, am the duly elected Secretary of
_________________ _________________, a California corporation (the "Borrower"),
and do hereby certify that the following officers and employees of the Borrower
are authorized to take the following action on behalf of the Borrower:
PERSONNEL AUTHORIZED TO SIGN (a) INSTRUMENTS OR
(b) COLLATERAL CERTIFICATES, REPORTS AND DIRECTIONS AS TO
SHIPMENT OF COLLATERAL TO INVESTORS UNDER
CREDIT AGREEMENT AND PLEDGE AND SECURITY AGREEMENT
Telephone Number
NAME TITLE SIGNATURE (WITH AREA CODE)
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PERSONNEL AUTHORIZED TO TELEPHONE INSTRUCTIONS
TO AGENT UNDER CREDIT AGREEMENT AND
PLEDGE AND SECURITY AGREEMENT
Telephone Number
NAME TITLE SIGNATURE (WITH AREA CODE)
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J-1
PERSONNEL AUTHORIZED TO AMEND SCHEDULES ANNEXED
TO ANY OF THE ITEMS SET FORTH IN (b) ABOVE
Telephone Number
NAME TITLE SIGNATURE (WITH AREA CODE)
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SEND ADVICES AND MAIL TO:
ATTN: __________________________
IN WITNESS WHEREOF I have hereunder set my hand and the seal
of the Borrower this ____ day of ______________, 200__.
________________________________________
Title ___________________________________
J-2
EXHIBIT K-1 TO
FIFTH AMENDED AND
RESTATED CREDIT AGREEMENT
ACKNOWLEDGMENT BY EXITING LENDER
Subject to its receipt of payment in full in cash of its Payoff Amount
on the Effective Date, the undersigned (the "Exiting Lender"), hereby
acknowledges and consents to the execution and delivery by the Lenders of the
Fifth Amended and Restated Credit Agreement dated as of May 23, 2001, by and
among New Century Mortgage Corporation, a California corporation ("NCMC"), NC
Capital Corporation, a California corporation ("NCCC" and together with NCMC,
the "Borrowers"), the lenders from time to time a party thereto (the "Lenders"),
and U.S. Bank National Association, as agent for the Lenders (in such capacity,
the "Agent") and hereby agrees that (i) it shall no longer be a party to the
Existing Credit Agreement except to the extent provided in Section 8.15 thereof
and (ii) upon the Exiting Lender's receipt of payment in full of its Payoff
Amount in accordance with Section 8.15 of said Fifth Amended and Restated Credit
Agreement, it will, as soon thereafter as administratively feasible (but not to
exceed 30 days), return to the Borrowers the Note issued by the Borrowers to the
Exiting Lender pursuant to the Existing Credit Agreement marked "paid" or
language to similar effect. Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed thereto in said Fifth Amended and
Restated Credit Agreement.
EXITING LENDER
By ________________________________
Its _______________________________
K - 1 - 1
EXHIBIT K-2 TO
FIFTH AMENDED AND
RESTATED CREDIT AGREEMENT
ACKNOWLEDGMENT BY EXITING LENDER
Reference is made to Fifth Amended and Restated Credit Agreement dated
as of May 23, 2001, by and among New Century Mortgage Corporation, a California
corporation ("NCMC"), NC Capital Corporation, a California corporation ("NCCC"
and together with NCMC, the "Borrowers"), the undersigned and the other lenders
from time to time a party thereto (the "Lenders"), and U.S. Bank National
Association, as agent for the Lenders (in such capacity, the "Agent") (the
"Credit Agreement"). Subject to its receipt of payment in full in cash of its
Payoff Amount on the Exit Date, the undersigned (the "Exiting Lender"), agrees
that (i) it shall no longer be a party to the Credit Agreement except to the
extent provided in Section 8.15 thereof and (ii) upon the Exiting Lender's
receipt of payment in full of its Payoff Amount in accordance with Section 8.15
of said Credit Agreement, it will, as soon thereafter as administratively
feasible (but not to exceed 30 days), return to the Borrowers the Note issued by
the Borrowers to the Exiting Lender pursuant to the Credit Agreement marked
"paid" or language to similar effect. Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed thereto in said Fifth Amended
and Restated Credit Agreement.
EXITING LENDER
By ________________________________
Its _______________________________
K - 2 - 1
EXHIBIT L TO
FIFTH AMENDED AND
RESTATED CREDIT AGREEMENT
TERMS OF GUARANTEED OBLIGATIONS
Each Borrower hereby agrees to the following terms with respect to
Loans made by the Lenders to the other Borrower and interest thereon under the
Fifth Amended and Restated Credit Agreement dated as of May 23, 2001 (as the
same may be amended, supplemented or restated from time to time, the "Credit
Agreement"):
1. Each Borrower irrevocably, unconditionally and absolutely guarantees
to the Lenders the due and prompt payment, and not just the collectibility, of
the principal of, and interest, fees and late charges and all other
indebtedness, if any, on the Loans made to the other Borrower when due, whether
at maturity, by acceleration or otherwise all at the times and places and at the
rates described in, and otherwise according to the terms of the Notes and the
Credit Agreement, whether now existing or hereafter created or arising.
2. Each Borrower further hereby irrevocably, unconditionally and
absolutely guarantees to the Lenders the due and prompt performance by the other
Borrower of all duties, agreements and obligations of the other Borrower
contained in the Notes and the Credit Agreement, and the due and prompt payment
of all costs and expenses incurred, including, without limitation, attorneys'
fees, court costs and all other litigation expenses (including but not limited
to expert witness fees, exhibit preparation, and courier, postage, communication
and document copying expenses), in enforcing the payment and performance of the
Notes and the Credit Agreement from the other Borrower (the payment and
performance of the items set forth in Paragraphs 1 and 2 of this Exhibit L are
collectively referred to as the "Other Borrower Debt").
3. In the event any Borrower shall at any time fail to pay the Lenders
any Other Borrower Debt owed by such Borrower when due, whether by acceleration
or otherwise, the other Borrower promises to pay such amount to the Lenders
forthwith, together with all collection costs and expenses, including, without
limitation, attorneys' fees, court costs and all other litigation expenses
(including but not limited to expert witness fees, exhibit preparation, and
courier, postage, communication and document copying expenses).
4. Each Borrower does hereby (a) agree to any modifications of any
terms or conditions of any Other Borrower Debt and/or to any extensions or
renewals of time of payment or performance by the other Borrower; (b) agree that
it shall not be necessary for the Lenders to resort to legal remedies against
the other Borrower, or to take any action against any other Person obligated (an
"Obligor") on or against any collateral for payment or performance of the Other
Borrower Debt before proceeding against such Borrower; (c) agree that no release
of the other Borrower or any other guarantor or Obligor, or of any collateral,
for the Other Borrower Debt, whether by operation of law or by any act of the
Agent or the Lenders (or any of them), with or without notice to such Borrower,
shall release such Borrower; and (d) waive
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presentment, notice of acceptance, notice of demand, dishonor, notice of
dishonor, protest, and notice of protest and waive, to the extent permitted by
law, all benefit of valuation, appraisement, and exemptions under the laws of
the State of Minnesota or any other state or territory of the United States.
5. The obligations of each Borrower for the Other Borrower Debt shall
be primary, absolute, irrevocable and unconditional, and shall remain in full
force and effect without regard to, and shall not be impaired or affected by:
(a) the genuineness, validity, regularity or enforceability of, or any amendment
or change in the Credit Agreement or the Note, or any change in or extension of
the manner, place or terms of payment of, all or any portion of the Other
Borrower Debt; (b) the taking or failure to take any action to enforce the
Credit Agreement or the Notes, or the exercise or failure to exercise any
remedy, power or privilege contained therein or available at law or otherwise,
or the waiver by the Lenders of any provisions of the Credit Agreement or the
Notes; (c) any impairment, modification, change, release or limitation in any
manner of the liability of the other Borrower or its estate in bankruptcy, or of
any remedy for the enforcement of the other Borrower's liability, resulting from
the operation of any present or future provision of the bankruptcy laws or any
other statute or regulation, or the dissolution, bankruptcy, insolvency, or
reorganization of the other Borrower; (d) the merger or consolidation of the
other Borrower, or any sale or transfer by the other Borrower of all or part of
its assets or property; (e) any claim such Borrower may have against the other
Borrower or any other Obligor, including any claim of contribution; (f) the
release, in whole or in part, of any other guarantor (if more than one), the
other Borrower or any other Obligor; (g) any other action or circumstance which
(with or without notice to or knowledge of such Borrower) might in any manner or
to any extent vary the risks of such Borrower or otherwise constitute a legal or
equitable discharge or defense, it being understood and agreed by each Borrower
that its obligations for the Other Borrower Debt shall not be discharged except
by the full payment and performance of the Other Borrower Debt.
6. The Lenders shall have the right to determine how, when and what
application of payments and credits, if any, whether derived from either
Borrower or from any other source, shall be made on the Obligations and any
other indebtedness owed by either Borrower and/or any other Obligor to the
Lenders.
7. The obligations of each Borrower hereunder shall continue to be
effective, or be automatically reinstated, as the case may be, if at any time
the performance or the payment, as the case may be, in whole or in part, of any
of the Other Borrower Debt is rescinded or must otherwise be restored or
returned by the Lenders (or any of them) (as a preference, fraudulent conveyance
or otherwise) upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of either Borrower or any other person or upon or as a result of
the appointment of a custodian, receiver, trustee or other officer with similar
powers with respect to either Borrower or any other Person, or any substantial
part of its property, or otherwise, all as though such payments had not been
made. If an Event of Default shall at any time have occurred and be continuing
or shall exist and declaration of default or acceleration under or with respect
to the Other Borrower Debt shall at such time be prevented by reason of the
pendency against either Borrower or any other Person of a case or proceeding
under a bankruptcy or insolvency law, each Borrower agrees that its obligations
for the Other Borrower Debt shall be deemed to have
L-2
been declared in default or accelerated with the same effect as if such
obligations had been declared in default and accelerated in accordance with
their respective terms and each Borrower shall forthwith perform or pay, as the
case may be, as required hereunder in accordance with the terms hereunder
without further notice or demand.
8. Each Borrower hereby irrevocably waives any claim or other rights
that it may now or hereafter acquire against the other Borrower that arises from
the existence, payment, performance or enforcement of such Borrower's
obligations for the Other Borrower Debt, including any right of subrogation,
reimbursement, exoneration or indemnification, any right to participate in any
claim or remedy of the Lenders against the other Borrower or any collateral that
the Lenders now have or hereafter acquire, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law, including the
right to take or receive from the other Borrower directly or indirectly, in cash
or other property or by set-off or in any manner, payment or security on account
of such claim or other rights. If any amount shall be paid to either Borrower in
violation of the preceding sentence and the Other Borrower Debt shall not have
been paid and performed in full, such amount shall be deemed to have been paid
to such Borrower for the benefit of, and held in trust for, the Lenders and
shall forthwith be paid to the Lenders to be credited and applied to the Other
Borrower Debt, whether matured or unmatured. Notwithstanding the blanket waiver
of subrogation rights as set forth above, each Borrower hereby specifically
acknowledges that any subrogation rights which it may have against the other
Borrower or any collateral that the Lenders now have or hereafter acquire may be
destroyed by a nonjudicial foreclosure of the collateral. This may give such
Borrower a defense to a deficiency judgment against it. Such Borrower hereby
irrevocably waives such defense. Each Borrower acknowledges that it will receive
direct and indirect benefits from the arrangements contemplated by the Agreement
and the Notes and that the waivers set forth in this Section are knowingly made
in contemplation of such benefits.
9. No postponement or delay on the part of the Lenders (or any of them)
in the enforcement of any right with respect to the Obligations of either
Borrower, including, without limitation, the Other Borrower Debt, shall
constitute a waiver of such right and all rights of the Lenders hereunder shall
be cumulative and not alternative and shall be in addition to any other rights
granted to the Lenders in any other agreement or by law.
10. Any indebtedness of either Borrower now or hereafter held by the
other Borrower is hereby subordinated to the indebtedness of the Borrowers to
the Lenders, and such indebtedness of either Borrower to the other Borrower
shall, if any of the Lenders so requests, be collected, enforced and received by
the Borrower to which it is owed as trustee for the Lenders and be paid over to
the Lenders on account of the indebtedness of the other Borrower to the Lenders.
L-3
