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FORWARD COMMITMENT
LOAN AND OFFSET AGREEMENT
THIS FORWARD COMMITMENT LOAN AND OFFSET AGREEMENT made this 12th day of
November, 1996, by and between [***], a Delaware corporation, with its principal
address at [***] ("Lender") and Credit Depot Corporation, a Georgia
corporation, with its principal address at Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxxx, XX 00000 ("Borrower").
RECITALS
Lender wishes to lend, and Borrower wishes to borrow, subject to the terms
and conditions contained herein, the Advances (as hereinafter defined), which
will be repaid by the Borrower in accordance with the terms of this Agreement.
The parties hereto anticipate that the Advances will be repaid from amounts
which will be earned by Borrower and payable by Lender in connection with
Section 4 Forward Commitment hereof and as set forth in Section 5.(I) Premium
as Earned in the Purchase and Sale Agreement dated as of the twenty-sixth day
of March, 1996, among Lender, Borrower and Norwest Bank Minnesota, National
Association, as trustee ("Premium Agreement").
PROVISIONS
NOW, THEREFORE, in consideration of the Forward Commitment and of the
premises and of the covenants and agreements hereinafter contained, the parties
hereto agree as follows:
1. DEFINITIONS.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Advance: Each monthly advance by Lender to Borrower on a Closing Date
will be calculated based upon the difference between (a) the weighted
average coupon rate of the principal amount of the Mortgage Loans sold to
Lender by Borrower pursuant to Section 4 hereof during the prior calendar
month and (b) the Par WAC. The Advance will equal the sum of (i) the
principal amount of the Mortgage Loans sold during the preceding month,
times [***] for the first point of the difference between (a) and (b), and
(ii) the principal amount of the Mortgage Loans sold during the preceding
month times the product of (c) divided by (d) where (c) is equal to (a) -
(b) - [***] and (d) is equal to [***]. In any event, the Advance shall
not exceed [***] percent [***] in the aggregate of the principal amount of
such Mortgage Loans purchased during the preceding month.
Advance Settlement Sheet: A statement provided by Lender to Borrower, and
signed by Borrower, on the first Business Day of a calendar month, setting
forth, for the preceding calendar month, the Mortgage Loans sold by
Borrower to Lender, the current interest rate, and the amount of the
Advances made to date, including the Advance to be made on that date. The
Borrower shall execute and telecopy the Advance Settlement Sheet before
the Lender is obligated to make an Advance pursuant to Section 2.1 hereof
on that date. The original executed Advance Settlement Sheet shall be
sent to Lender by overnight mail.
Agreement: This Loan and Offset Agreement, including all exhibits and
schedules attached and incorporated by reference herein or delivered
pursuant hereto, and as the same may be amended and supplemented from time
to time.
Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked by an * and [ ], have been
separately filed with the Commission.
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As-Earned Settlement Sheet: A statement provided by Lender to Borrower,
on the fifteenth day of a calendar month setting forth, for the preceding
calendar month, the Mortgage Loans sold by Borrower to Lender, the
anticipated premiums "as-earned" under the Premium Agreement for the
Mortgage Loans purchased by Lender month to date, losses month to date,
the Advances made month to date, the principal and interest payments made
month to date, the principal and interest payments that will be made from
the Lender's Payment Obligation, and the amount of the Lender's Payment
Obligation that will be paid to Borrower by Lender.
Borrower's Note: The promissory note(s) of Borrower in the form set forth
in Exhibit A hereto.
Business Day: Any day that is not a Saturday, Sunday or other day on
which commercial banking institutions in the City of New York are
authorized or obligated by law to be closed.
Closing Date: The first Business Day of a calendar month on which Lender
will make an Advance.
Commitment Penalty: As set forth in Section 4 herein and in any WAC
Forward Commitment Agreement signed by Borrower and Lender.
Essential Mortgage File Documents: As to each Mortgage Loan, the
original of the Note, endorsed in blank, a true and certified copy of the
Mortgage, an original executable assignment of Mortgage, title insurance
policy including endorsements or "marked-up" title commitment, Related
Assets and the additional documents as described in the Premium Agreement
incorporated herein by reference.
Event of Default: Any event of default set forth in Section 7.1 hereof.
Forward Commitment: Borrower's agreement, as set forth in Section 4
hereof, to sell Mortgage Loans to Lender.
Forward Commitment Settlement Date: The first Business Day following
Lender's agreement to purchase not less than $1,000,000 of Mortgage Loans.
Interest Repayment Date: The 15th day of the calendar month following the
month in which there is a Closing Date and continuing thereafter on the
same day of each month until paid in full.
Lender Payment Obligation: The amounts owed by Lender to Borrower
pursuant to Section 5.(i) of the Premium Agreement, with respect to the
Mortgage Loans sold the Lender under the respective WAC Forward Commitment
Agreement(s). For purposes of calculating the Lender Payment Obligation,
the calculations contained in Exhibits C and D of the Premium Agreement
shall be used. The Lender Payment Obligation will be affected from time
to time, by prepayment rates and delinquency rates of the Mortgage Loans,
and therefore for purposes of valuing the Lender Payment Obligation from
time to time, the Lender's absolute discretion shall control so long as it
is made in good faith.
LIBOR: The rate of interest is the one (1) month London Interbank Offered
Rate as published in The Wall Street Journal.
Maximum Advance Amount: The outstanding amount of Advances provided to
Borrower hereunder which shall not exceed [***] percent (***) of the
principal amount of Mortgage Loans sold to Lender under the Forward
Commitment, not to exceed $[***] in the aggregate.
Mortgage. The Note, bond, deed of trust, Mortgage, mortgage warranty,
extension agreement, assumption of indebtedness, assignment and any other
documents constituting the basic instruments for real estate security on
the real property owned by the mortgagor in the state in which the subject
property is located.
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The information above marked by an * and [ ] has been omitted pursuant to a
request for confidential treatment. The omitted portion has been separately
filed with the Commission.
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Mortgage Loans: Fixed rate, first or second lien, one-to-four family,
performing loans and the Note, the related Mortgage and the Related Assets
which are collectively identified as the Mortgage Loans.
Note: The original Note or bond or other evidence of indebtedness
evidencing the indebtedness of the Mortgage under the Mortgage Loan.
Par WAC: The average of the three and five year U.S. Treasury (four year
interpolated) plus [***] as of each Forward Commitment Settlement Date.
Principal Repayment Date: The 15th day of the calendar month following
the month in which a WAC Forward Commitment Agreement expires and
continuing thereafter on the same day of each month until paid in full.
Related Assets: Any and all documents, instruments, collateral agreements
and assignments and endorsements for all documents, instruments and
collateral agreements, referred to in the Notes and/or mortgages or
related thereto, including, without limitation, current insurance policies
(private mortgage insurance, if applicable; flood insurance, if
applicable; hazard insurance; title insurance and other applicable
insurance policies) covering the Subject Property or relating to the Notes
and all files, books, papers, ledger cards, reports and records including,
without limitation, loan applications, Borrower financial statements,
separate assignment of rents, if any, credit reports and appraisals,
relating to the Loans. In all cases, the Related Assets shall be the
original documents.
Settlement Date: Each date of repayment of an Advance to Lender by
Borrower pursuant to this Agreement; provided however, the last Settlement
Date shall be no later than thirty-six (36) months from the date of the
last Advance.
Term: This Agreement shall have an initial term of twelve (12) months;
which initial term may be renewed for an additional period of time as
agreed in writing between Lender and Borrower.
Underwriting Guidelines of Borrower: Borrower's Underwriting Guidelines,
which are attached as Exhibit B to the Premium Agreement, as may be
amended from time to time with Lender's prior written approval, which are
also incorporated herein by reference.
WAC Forward Commitment Agreement: As set forth in Exhibit B hereto.
2. ADVANCES
2.1 Subject to the Borrower's reimbursement obligations set forth in
Section 6 hereof, and subject to receipt by telecopy of the Advance Settlement
Sheet executed by Borrower, Lender hereby agrees to make Advances to Borrower on
the first business day of each calendar month, and Borrower hereby agrees to
borrow Advances from Lender, in accordance with the terms of the Borrower's Note
and this Agreement; provided, however, that the outstanding amount of Advances
provided to Borrower hereunder shall not exceed the Maximum Advance Amount
except as set forth in Section 2.3 hereof.
2.2 Lender shall make Advances to Borrower on each Closing Date. All
payments of Advances shall be made by wire transfer to immediately available
funds to the Borrower by 7 P.M. Central Time.
2.3 Subject to Borrower's continuing performance of its obligations
contained in this Agreement, and upon expiration of the initial term hereof,
Lender and Borrower may agree in a writing signed by both parties to increase or
decrease the Maximum Advance Amount for any renewal term agreed to between
Lender and Borrower. Any such increase or decrease agreed to by the parties
hereto shall be subject to the terms and conditions of this Agreement.
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request for confidential treatment. The omitted portion has been separately
filed with the Commission.
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3. CONDITIONS PRECEDENT TO ADVANCES.
The Lender's obligation to make Advances hereunder shall be subject to the
fulfillment of the following conditions precedent:
(a) Delivery of Borrower's Note. Borrower shall have delivered to Lender
Borrower's Note on the date of this Agreement.
(b) Premium as Earned. Borrower shall have furnished to Lender a copy,
certified by an appropriate officer of Borrower, of the resolution of the
Board of Directors of Borrower's authorizing the execution and delivery of
Borrower's Notes to Lender and borrowing of Advances as herein provided
for an the execution, delivery and performance of this Agreement by
Borrower.
(d) Representation and Warranties. The representations and warranties
contained in Section 5 hereof shall be true and correct as of the date of
this Agreement and on each Closing Date.
(e) Designation of Authorized Officers. The Borrower shall have delivered
to Lender an officer's certificate, attested to by the Secretary of the
Borrower stating the names and showing the facsimile signatures of the
officers of Borrower authorized to execute and deliver this Agreement,
Borrower's Note and any other instrument, document or certificate executed
in connection herewith.
(f) Legal Matters. All other instruments and legal and corporate
proceedings in connection with the transactions contemplated by this
Agreement shall be satisfactory in form and substance to Lender and
counsel to Lender and Borrower, and Lender shall have received copies of
all documents which it may have reasonably requested in connection
herewith.
4. FORWARD COMMITMENT.
4.1 Commitment Amount. Borrower hereby agrees to offer for sale to Lender
an aggregate principal amount of $125,000,000 ("Commitment Amount") of Mortgage
Loans within twelve (12) months ("Commitment Period") from the date of this
Agreement, subject to the terms and conditions contained in the Premium
Agreement. Borrower shall sign and provide to Lender the WAC Forward Commitment
Agreement each time Borrower offers to sell a portion of the Commitment Amount
to Lender hereunder which WAC Forward Commitment Agreement shall meet the
following minimum amounts for the time periods identified: $10,000,000 for a 90
day period, $7,500,000 for a 60 day period, and $5,000,000 for a 30 day period.
The Borrower's obligations under Section 4.1 and under any WAC Forward
Commitment Agreement shall terminate if the Lender refuses to purchase from
Borrower, an aggregate of [***] of Mortgage Loans that conform to the
Underwriting Guidelines of Borrower.
4.2 Closings. Borrower shall submit Mortgage Loans daily to Lender.
Lender shall have no obligation to purchase any Mortgage Loans and may refuse to
purchase any Mortgage Loan for any reason whatsoever. In the event Lender
chooses to purchase the Mortgage Loans, the settlement date(s) during the
Commitment Period shall be the Forward Commitment Settlement Date. Time is of
the essence. Lender and Borrower agree that the price paid for the Mortgage
Loans shall be the difference between the Note rate on the Mortgage Loans and
Par WAC as set forth in the WAC Forward Commitment Agreement for the Mortgage
Loans purchased on the related Forward Commitment Settlement Date. The premium
will be paid to Borrower "as earned" per the terms of the Premium Agreement as
modified hereby. Borrower shall not be eligible for any other bonus program
offered by Lender during the Commitment Period. The Note rate on any Mortgage
Loan sold to Lender shall not be less than the Par WAC.
4.3 Commitment Penalty. IF FOR ANY REASON BORROWER FAILS TO DELIVER AT
LEAST NINETY-FIVE PERCENT (95%) OF THE COMMITMENT AMOUNT TO LENDER WITHIN THE
COMMITMENT PERIOD, BORROWER SHALL BE OBLIGATED TO PAY TO LENDER, WITHIN TEN (10)
CALENDAR DAYS OF THE LAST DAY OF THE COMMITMENT PERIOD, A COMMITMENT PENALTY,
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The information above marked by an * and [ ] has been omitted pursuant to a
request for confidential treatment. The omitted portion has been separately
filed with the Commission.
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AS SET FORTH BELOW, SUCH SUM BEING AGREED BY BORROWER AND LENDER AS LIQUIDATED
DAMAGES. THE PARTIES AGREE THAT LENDER'S ACTUAL DAMAGES IN THE EVENT OF
BORROWER'S FAILURE TO DELIVER THE COMMITMENT AMOUNT, WOULD BE DIFFICULT TO
ASCERTAIN, AND THE COMMITMENT PENALTY IS REASONABLE AS LIQUIDATED DAMAGES. THIS
PROVISION SHALL NOT BE DEEMED TO LIMIT LENDER'S RIGHT TO OTHER REMEDIES PROVIDED
HEREIN OR IN THE AGREEMENT WITH RESPECT TO OTHER COVENANTS, REPRESENTATIONS AND
WARRANTIES OF BORROWER. THE COMMITMENT PENALTY SHALL BE DETERMINED BASED UPON
THE PERCENTAGE OF THE COMMITMENT THAT THE BORROWER ACHIEVES. THE COMMITMENT
PENALTY WILL BE CALCULATED BY ADDING THE FOLLOWING COMMITMENT FEE TO THE PAR WAC
FOR THE MORTGAGE LOANS THAT THE LENDER PURCHASED AND THE COMMITMENT PENALTY WILL
EQUAL THE DIFFERENCE BETWEEN THE ADJUSTED PRICE FOR THE MORTGAGE LOANS AND THE
PRICE THE LENDER ACTUALLY PAID.
COMMITMENT AMOUNT: COMMITMENT FEE:
-------------------- ------------------------
0 -50.00% [***] BASIS POINTS
50.01-75.00% [***] BASIS POINTS
75.01-95.00% [***] BASIS POINTS
Lender and Borrower agree that Borrower shall be given credit for purposes of
calculating the Commitment Amount, for the Mortgage Loans that conform to the
Underwriting Guidelines of Borrower that are offered by Borrower and are not
purchased by Lender.
5. REPRESENTATIONS AND WARRANTIES.
5.1 Representations and Warranties of the Borrower - General. It is
understood and agreed by Borrower and Lender that as a material inducement to
Lender to enter into this Agreement and make Advances, Borrower hereby
represents and warrants to Lender as follows:
(a) The Borrower is an organization as set forth in the introductory
paragraph of this Agreement and is duly organized, validly existing and in
good standing under the laws of the state of its incorporation, and is
duly qualified as a foreign corporation in all jurisdictions wherein the
character of the property owned or leased or the nature of the business
transacted by it makes qualification as a foreign corporation necessary.
(b) The execution and delivery of the Agreement by Borrower and the
performance by Borrower of the obligations to be performed by it hereunder
have been duly authorized by all necessary corporation or other similar
action. Prior to the first Settlement Date, the Borrower shall deliver to
the Lender certified copies of the relevant corporate or similar
resolutions and a good standing certificate for the state of its
incorporation and, as requested by Lender, for each state in which
Borrower is registered to do business. It is within Lender's discretion
to periodically request good standing certificates for all states in which
Borrower is registered to do business.
(c) The execution and delivery of this Agreement by Borrower and the
performance by Borrower of the obligations to be performed by it hereunder
do not, and will not, violate any provision of any law, rule, regulation,
order, write, judgment, injunction, decree, determination or award
presently in effect having applicability to Borrower or to the charter or
bylaws of the Borrower. All parties which have had any interest in the
Mortgage Loans, whether as mortgagee, assignee (other than Lender or
assignee of Lender) or pledgee are (or during the period in which they
held and disposed of such interest, were) in compliance with all
applicable licensing requirements of the federal, state and local
governments wherein the Subject Property is located.
(d) The execution and delivery of this Agreement by Borrower and the
performance by Borrower of the obligations to be performed by it hereunder
do not and will not result in a breach of or constitute a
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The information above marked by an * and [ ] has been omitted pursuant to a
request for confidential treatment. The omitted portion has been separately
filed with the Commission.
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default under any indenture or loan or credit agreement or any other
agreement, lease or instrument to which Borrower is a party or by which
it or its properties may be bound or affected.
(e) This Agreement constitutes, when duly executed and delivered by
Borrower, a legal, valid and binding obligation of Borrower, enforceable
against Borrower according to its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or similar laws affecting creditors' rights in general,
including equitable remedies.
(f) There are no actions, suits or proceedings pending or, to the
knowledge of Borrower, threatened against or affecting Borrower or the
properties of Borrower before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
which, if determined adversely to Borrower, would have a material adverse
effect on the financial condition, properties or operations of Borrower.
Any consent by Lender to make Advances pursuant to this Agreement shall
automatically terminate if: (i) a decree or order of a court or agency
supervisory authority having jurisdiction for the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities, bankruptcy proceeding or any
similar proceedings, or for winding up or liquidation of its affairs,
shall have been entered against Borrower and such decree or order shall
have remained in force undischarged or unstated for a period of 60 days;
or (ii) Borrower shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities, bankruptcy or similar proceedings
relating to Borrower or relating to all or substantially all of its
property; or (iii) Borrower shall admit in writing its inability to pay
its debts as they become due, file a petition to take advantage of any
applicable insolvency, reorganization or bankruptcy statute, make an
assignment for the benefit of its creditors, or voluntarily suspend
payments of its obligations.
5.2 Representations and Warranties of the Borrower as to Each Loan. It is
understood and agreed by Borrower and Lender that as a material inducement to
Lender to enter into this Agreement and make Advances, the Borrower hereby
reaffirms the representations and warranties in Section 9 of the Premium
Agreement to the Lender as of each Forward Commitment Settlement Date with
respect to each Mortgage Loan delivered to Lender.
5.3 Survival. To induce Lender to provide Advances, Borrower makes the
representations and warranties set forth herein, each and all of which shall:
(i) survive the execution and delivery of this Agreement and the making of any
Advance by Lender, (ii) inure to the benefit of Lender, and (iii) be deemed to
have been relied upon in making Advances hereunder by Lender regardless in each
case of any investigation of review Lender may have or shall hereafter make.
6. REPAYMENT OF ADVANCES.
6.1 Repayment. Borrower shall repay Lender for the Advances made,
together with interest, as shown on the As-Earned Settlement Sheet. The Lender
may, at its absolute discretion, and from time to time, apply all or part of the
Lender Payment Obligation, toward the Borrower's obligations hereunder. Each
Advance will be fully paid within thirty-six (36) months of the date of the
Advance and this obligation shall survive the termination of this Agreement
and/or the Premium Agreement. The Lender shall establish from time to time, the
amount of the Borrower's monthly payment obligation based upon the amount of the
unpaid Lender Payment Obligation. Borrower shall have the right to prepay the
Advances, without penalty or premium, upon one week's prior written notice to
Lender. In addition, the Borrower shall have the right at any time, and from
time to time, to direct the Lender to offset the Lender Payment Obligation
against the amounts owned by Borrower hereunder.
6.2 Interest on Advances. Subject to Section 6.3 hereof, Borrower shall
pay to Lender on each Interest Repayment Date interest on all Advances
outstanding during the prior month at LIBOR for each day of the prior month plus
[***] basis points.
6.3 Failure to Repay Advances; Loan Balances.
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request for confidential treatment. The omitted portion has been separately
filed with the Commission.
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(a) In the event Borrower fails to pay the Lender any amount due
hereunder, the interest payable in accordance with Section 6.2 to Lender
on the amount of all such delinquent payments shall instead be calculated
at LIBOR, plus [***] basis points, for the period for which interest is
being calculated starting with the date of Lender's demand to the date of
repayment.
(b) If Lender determines that on a Principal Repayment Date and/or an
Interest Repayment Date the amounts due Lender exceed [***] percent (***)
of the amounts of the Lender Payment Obligation with respect to the
Mortgage Loans sold to Lender pursuant to a WAC Forward Commitment
Agreement (calculated by Lender in good faith and in its absolute
discretion) then Borrower shall reimburse Lender, within two (2) days of
Lender's demand, the excess.
6.4 Computation of Interest. Interest on Advances shall be computed on
the basis of a 360-day year and the actual number of days elapsed in the period
during which it accrues. In computing the interest on any Advances, the date of
making the Advance shall be included and the date of repayment shall be
excluded; provided, that if an Advance is repaid on the same day on which it is
made, one day's interest shall be paid on the Advance.
6.5 Lender's Payment Obligation. The Borrower agrees that the Lender can
satisfy the Lender's Payment Obligation, with the written consent of the
Borrower, once the Lender's Payment Obligation is reduced to [***] percent (***)
or less than its highest levels. The Lender shall provide the Borrower with
notice of its election pursuant to the provisions of this section and shall
provide the Borrower with a description of the present value of the obligation
taking anticipated prepayment speeds and delinquency ratios into account. If
the Borrower and the Lender can arrive at a mutually acceptable understanding
with respect to these terms, the Lender can discharge the Lender's Payment
Obligation by paying the Borrower the amount upon which the parties agree.
7. EVENTS OF DEFAULT.
7.1 Event of Default. The occurrence and continuation of any of the
following conditions or events shall constitute an "Event of Default" hereunder:
(a) Failure to Make Payments When Due. Failure by Borrower to pay any
amount due hereunder when due and the continuance of the default for five
Business days following the giving of notice thereof by Lender; or
(b) Default in Other Agreements. Failure of Borrower to pay or any
default in the payment of any principal or of interest on any other
indebtedness or in the payment of any contingent obligation beyond any
period of grace provided or breach or default with respect to any other
material term or any evidence of any other indebtedness or of any loan
agreement, mortgage, indenture or other agreement relating thereto, if the
effect of such failure, default or breach is to cause, or to permit the
holder or holders of that indebtedness (or a trustee on behalf of such
holder or holders) to cause, indebtedness of Borrower in the aggregate
amount of [***] or more to become or be declared due prior to its stated
maturity (upon the giving or receiving of notice, lapse of time, both, or
otherwise); or
(c) Breach of Warranty. Any of Borrower's representations or warranties
made herein or in any statement or certificate at any time given by
Borrower in writing pursuant hereto or in connection herewith shall be
false in any material respect on the date as of which made and the
representation or warranty shall remain false for five days following the
giving of notice thereof by the Lender, provided, however, that any
representation or warranty regarding a Mortgage Loan that is contained in
the Premium Agreement that is subject to a buy-back shall not be
considered a breach of a warranty from purposes of this Agreement, if the
Borrower satisfies its buy-back obligation in accordance with the terms
of the Premium Agreement, or
(d) Other Defaults. Borrower shall default in the performance of or
compliance with any term contained in this Agreement, other than those
referred to in Paragraphs (a) or (c) above, and any WAC
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request for confidential treatment. The omitted portion has been separately
filed with the Commission.
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Forward Commitment Agreement, and such default shall not have been
remedied or waived within fifteen days after receipt by Borrower of
notice from Lender, which notice shall be sent to Borrower of such
default; or
(e) Involuntary Bankruptcy; Appointment of Receiver; etc. Either,
(I) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of Borrower in an involuntary case
under applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, which decree or order is not stayed; or (ii) any
other similar relief shall be granted under any applicable federal or
state law, or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, trustee,
custodian or other officer having similar powers over Borrower or over
all or a substantial part of its property, or the issuance of a
warrant of attachment, execution or similar process against any
substantial part of the property of Borrower, and the continuance of
any such events in clause (ii) for 45 days unless dismissed, bonded or
discharged; or
(f) Voluntary Bankruptcy; Appointment of Receiver, etc. Borrower
shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or shall
consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its
property; the making by Borrower of any assignment for the benefit of
creditors; or the inability or failure of Borrower, or the admission
of Borrower in writing of its inability to pay its debts as such debts
become due, or the Board of Directors of Borrower (or any committee
thereof) adopts any resolution or otherwise authorizes action to
approve any the foregoing; or
(g) Judgments and Attachments. Any money judgment, writ or
warrant of attachment, or similar process involving in any case an
amount in excess of $[***] shall be entered or filed against Borrower
or its assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of 30 days or in any event later than five days
prior to the date of any proposed sale thereunder; or
(h) Dissolution; Liquidation. Any order, judgment or decree shall
be entered against Borrower decreeing its dissolution or liquidation
and such order shall remain undischarged or unstayed for a period in
excess of [***] days.
7.2 Remedies.
(a) Upon the occurrence and continuation of any Event of Default,
the unpaid principal amount of and accrued interest on any Borrower's
Note from Borrower to Lender, together with all other sums due
hereunder, shall automatically become due and payable, without
presentment, demand or other requirements of any kind, all of which
are hereby expressly waived by Borrower, and the obligation of Lender
to make Advances shall thereupon terminate.
(b) Upon the occurrence of any Event of Default, Lender may
exercise any and all rights and remedies of Lender as it shall deem
appropriate at law, in equity, or otherwise.
(c) All remedies are cumulative. Any failure on the part of
Lender to exercise or any delay in exercising any right hereunder
shall not operate as a waiver thereof, nor shall any single or partial
exercise by Lender of any right hereunder preclude any other exercise
thereof or the exercise of any other right.
7.3 Application of Proceeds. Any money collected by Lender
pursuant to this Agreement (whether upon voluntary payment, prepayment, offset
or otherwise) shall be promptly applied as follows unless otherwise required by
provisions of applicable law:
(a) First, to the payment of all expenses incurred by Lender under
this Agreement in enforcing its rights hereunder, including all costs
and expenses of collection, attorneys' fees, court costs and
foreclosure expenses.
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request for confidential treatment.
The omitted portion has been separately filed with the Commission.
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(b) Next, to the payment of accrued interest on Advances to the
extent amounts are due thereon.
(c) Next, to the payment of all principal on Advances to the
extent amounts are due thereon.
(d) Next, to Borrower.
8. INDEMNIFICATION.
8.1 (a) Borrower hereby agrees to protect, indemnify, defend
and hold harmless Lender, its subsidiaries and affiliates and assignees, and
all of their agents, employees, officers and directors, (collectively the
"Lender Indemnitees") from and against any and, all liabilities, costs,
expenses, judgments, damages, losses, claims, demands, offsets, defenses,
counterclaims, actions, or proceedings, by whomsoever asserted, arising from,
connected with, or resulting from any breach by Borrower of any covenant,
representation, or warranty contained herein or of any other term of this
Agreement or any act of Borrower or omission by Borrower where Borrower has a
duty to act; provided, however, that Borrower's obligation to indemnify
pursuant to this section shall not extend to any liability arising from the
gross negligence or willful misconduct of any Lender Indemnitee.
(b) If any legal proceeding shall be instituted, or any
claim asserted in respect of which a Lender Indemnitee may seek indemnification
from Borrower, the Borrower shall have the right, at its option and at its own
expense, to be represented by counsel of its choice and to defend against,
negotiate, settle, or otherwise deal with such proceeding or claim.
8.2 (a) Lender hereby agrees to protect, indemnify, defend
and hold harmless Borrower, its subsidiaries and affiliates and assignees, and
all of their agents, employees, officers and directors, (collectively the
"Borrower Indemnitees") from and against any and, all liabilities, costs,
expenses, judgments, damages, losses, claims, demands, offsets, defenses,
counterclaims, actions, or proceedings, by whomsoever asserted, arising from,
connected with, or resulting from any breach by Lender of any covenant,
representation, or warranty contained herein or of any other term of this
Agreement or any act of Lender or omission by Lender where Lender has a duty to
act; provided, however, that Lender's obligation to indemnify pursuant to this
section shall not extend to any liability arising from the negligence or
willful misconduct of any Borrower Indemnitee.
(b) If any legal proceeding shall be instituted, or any
claim asserted in respect of which a Borrower Indemnitee may seek
indemnification from Lender, the Lender shall have the right, at its option and
at its own expense, to be represented by counsel of its choice and to defend
against, negotiate, settle, or otherwise deal with such proceeding or claim.
9. NOTICES.
All notices or other communications provided for herein shall be in
writing and shall be deemed to have been given or made when sent by overnight
mail or certified mail, return receipt requested, postage prepaid, or, in the
case of telegraphic notice, when delivered to the telegraph company, addressed
as set forth below or to such other address as may be hereafter designated in
writing by the respected parties hereto. In addition, any notices or other
communications may be accomplished by a facsimile transmission at the fax
numbers set forth below. Any facsimile transmissions shall promptly be
confirmed to the other party in writing and by mail in accordance with the
provisions above.
Lender: [***]
[***]
[***]
[***]
Fax: [***]
9
The information above marked by an * and [ ] has been omitted
pursuant to a request for confidential treatment.
The omitted portion has been separately filed with the Commission.
10
Borrower: Credit Depot Corporation
Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Xx.
Fax: (000) 000-0000
10. RIGHTS OFFSET.
Lender is hereby granted the absolute right to offset all sums owed by
Lender to Borrower (including the Lender Payment Obligations) against the
amounts owed by Borrower to Lender under the Borrower's Note or under this
Agreement. This right of offset shall be absolute and unconditional and may be
exercised at any time and from time to time by Lender. The Lender need not
provide Borrower with any notice of its election to offset and Lender's rights
hereunder shall not be restricted or conditioned. Borrower acknowledges that
Lender is granted this right of offset in lieu of a lien on the Lender Payment
Obligations.
11. ACCESS TO BORROWER DOCUMENTS AND INFORMATION.
Borrower shall deliver to Lender its annual (audited) and quarterly
(unaudited) Financial Statements within five (5) days of their availability.
Borrower shall provide to Lender and its appointed agents access to
documentation and information regarding the Collateral and the Borrower as
Lender may request, including, but not limited to, the Mortgage Loans and any
and all accounting records and financial statements of Borrower, such access
being afforded without charge upon reasonable request and during normal
business hours at the offices of the Borrower designated by it.
12. TERMINATION.
(a) Lender may terminate its obligations under this Agreement:
(i) upon completion of the initial Term, or any renewal Term agreed to by the
parties, and (ii) immediately upon written notice delivered to Borrower in the
event of any breach of any of the representations, warranties, covenants or
agreements of Borrower set forth in this Agreement or any other agreements, if
any, between Borrower and Lender.
(b) In the event of termination, all outstanding Advances under
the Borrower's Note and this Agreement shall become immediately due and
payable.
13. MISCELLANEOUS PROVISIONS.
13.1 Representation of Servicer and Lender. If any of the Mortgage
Loans are presently serviced by any third party, Borrower shall obtain and
deliver on the Closing Date a representation and warranty to Lender from each
such servicer that, as of the Closing Date, there are not taxes, ground rents,
water charges, sewer rents, assessments payable in future installments, or
other outstanding charges affecting the lien of any Mortgage or Mortgaged
Property, which amounts are being escrowed and which are due and payable. If
requested by the Lender, each such servicer shall submit proof of the foregoing
representation and warranty.
13.2 Costs and Expenses. Except as explicitly provided herein,
Borrower and Lender shall each fulfill its obligations pursuant hereto at its
own cost and expense.
13.3 Agency; Joint Venture. Neither this Agreement nor any action
taken pursuant hereto shall make either party an agent or representative of the
other or be deemed to create a joint venture between Borrower and Lender.
13.4 Complete Agreement; Modification; Sale or Assignment. This
Agreement constitutes the complete agreement between Borrower and Lender with
respect to the subject matter hereof and may not be
10
The information above marked by an * and [ ] has been omitted
pursuant to a request for confidential treatment.
The omitted portion has been separately filed with the Commission.
11
modified, altered, or amended except by a writing signed by Borrower and
Lender. Neither party hereto may sell, assign, or transfer any of its rights
or obligations pursuant hereto except with the written consent of the other
party, except that either party may assign this Agreement to an affiliate.
Nothing herein shall in any way limit Lender's right to assign the Borrower's
Note to any other person or entity. If there is any inconsistency between the
terms hereof and the terms contained in the Premium Agreement, the terms of
this Agreement shall control and the Premium Agreement shall be modified
accordingly.
13.5 No Waiver. No undertaking, agreement, covenant,
representation or warranty of Borrower contained herein shall be deemed to have
been waived by Lender, unless such waiver is by an instrument in writing signed
by Lender. Any such waiver by Lender shall not be deemed to be waiver of any
other undertaking, agreement, covenant, representation or warranty. Lender's
failure, at any time, to require strict performance of any provision hereof
shall not waive, affect or diminish any right of Lender thereafter to demand
strict compliance therewith or performance thereof.
13.6 Parties. This Agreement shall be binding upon, and inure to
the benefit of, the successors and permitted assigns of Borrower and Lender.
13.7 Governing Law. This Agreement shall, in all respects, be
governed by, and construed in accordance with, the laws of the State of New
York applicable to contracts made and performed in such state without regard to
the conflict of laws provisions of such jurisdiction and the laws of the United
States of America.
13.8 Severability; Section Headings. Any invalidity of any
provision of Borrower's Note or this Agreement shall not affect the validity of
any other provision hereof. The section headings contained herein shall be
without substantive meaning and shall not be deemed to be a part of this
Agreement.
13.9 Construction. Wherever from the context it appears
appropriate, each term stated in either the singular or plural shall include
the singular and plural, and pronouns stated in the masculine, feminine, or
neuter gender shall include the masculine, feminine, and the neuter. The words
"herein," "hereof," "hereto," "hereby," and other words of similar import shall
be deemed to refer to this Agreement as a whole and not to any particular
section, subsection, or clause of this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the parties intending to be legally bound hereby, as of the date
first written above.
BY: [***]
Name: [***]
Title: [***]
CREDIT DEPOT CORPORATION
BY: [***]
Name: [***]
Title: [***]
11
The information above marked by an * and [ ] has been omitted
pursuant to a request for confidential treatment.
The omitted portion has been separately filed with the Commission.
12
EXHIBIT A
(Form of Promissory Note)
$6,250,000 November 12, 1996
FOR VALUE RECEIVED, Credit Depot Corporation, a Georgia corporation, having
its principal place of business at Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxx, XX
00000 ("Borrower"), hereby promises to pay to the order of [***] ("Payee") on
or before November 12, 2000, the lesser of the principal sum of six million,
two hundred fifty thousand and no/100 Dollars ($6,250,000), or the unpaid
principal amount of all Advances made by Payee to Borrower under the terms of
that certain Forward Commitment Loan and Offset Agreement dated as of November
12, 1996, between Borrower and Payee (the "Agreement"), together with interest
on the unpaid balance thereof from the date hereof until paid at the rates and
at the times which shall be determined in accordance with the provisions of the
Agreement.
This Note is issued pursuant to and entitled to the benefits of the Agreement
to which reference is hereby made for a more complete statement of the terms
and conditions under which the Advances evidenced hereby are made and are to be
repaid. Capitalized terms used herein without definition shall have the
meanings set forth in the Agreement.
All payments of principal and interest in respect of this Note shall be made
in lawful money of the United States of American in immediately available funds
at the office of Payee located at [***] or at such other place as shall be
designated in writing for such purpose in accordance with the terms of the
Agreement. Until notified in writing of the transfer of this Note, Borrower
shall be entitled to deem Payee or such person who has been so identified by
the transferor in writing to Borrower as the holder of this Note, as the owner
and holder of this Note. Each of Payee and any subsequent holder of this Note
agrees that before disposing of this Note or any part hereof it will make a
notation hereon of all principal payments previously made hereunder and of the
date to which interest hereon has been paid; provided, however, that the
failure to make a notation of any payment made on this Note shall not limit or
otherwise affect the obligation of Borrower hereunder with respect to payments
of principal of or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day which is
not a Business Day, such payment shall be made on the next succeeding Business
Day and such extension of time shall be included in the computation of the
payment of interest on this Note.
This Note has been executed and delivered by Borrower in accordance with the
terms of the Agreement and is entitled to the benefits of the offset rights
created by the Agreement and is otherwise governed thereby.
The Agreement and this Note shall be governed by, and shall be construed and
enforced in accordance with, the laws of the State of New York.
Upon occurrence of an Event of Default, the unpaid balance of the principal
amount of this Note may become, or may be declared to be, due and payable in
the manner, upon the conditions and with the effect provided in the Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Agreement.
No reference herein to the Agreement and no provision of this Note or the
Agreement shall alter or impair the obligation of Borrower, which is absolute
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.
Borrower promises to pay all costs and expenses, including reasonable
attorneys' fees, incurred in the collection and enforcement of this Note.
Borrower and endorsers of this Note hereby consent to renewals and extensions
of time.
Credit Depot Corporation
By:_____________________________
Name:
Title:
12
The information above marked by an * and [ ] has been omitted
pursuant to a request for confidential treatment.
The omitted portion has been separately filed with the Commission.
13
EXHIBIT B
November 12, 1996
CREDIT DEPOT CORPORATION (CDC)
WAC FORWARD COMMITMENT AGREEMENT
Reference is made to that Purchase and Sale Agreement among [***] as Sponsor,
Norwest Bank Minnesota, National Association as Trustee, and Credit Depot
Corporation (CDC) as Seller ("Premium Agreement") dated March 26, 1996, and the
Forward Commitment Loan and Offset Agreement dated as of November 12, 1996,
between Sponsor as Lender and Seller as Borrower ("Agreement"). Seller hereby
agrees to offer for sale to Sponsor an aggregate principal amount of
$__________ of the Commitment Amount of Loans within ____ DAYS from the date
hereof, subject to the terms and conditions contained in the Premium Agreement
and the Agreement, which terms and conditions are incorporated herein. All
capitalized terms not otherwise defined herein shall have the meanings set
forth in either the Premium Agreement or the Agreement.
1. Loans. the Loans must be fixed rate, first or second lien, one-to-four
family, performing Loans complying with the following: (A) MAXIMUM OF [***] OF
LOAN VOLUME CAN HAVE AN LTV OF 85.01% TO 90%. (B) MAXIMUM OF [***] OF LOAN
VOLUME CAN BE NIQ OR ALT DOCUMENTATION. (C) MAXIMUM OF [***] OF LOAN VOLUME CAN
BE DOUBLEWIDE. Seller agrees to submit to Sponsor all Loans originated by
Seller during the Commitment Period. In the event of any conflict between this
letter, the Premium Agreement, and the Agreement the terms of this letter shall
be controlling.
2. Closings. Seller shall submit Loans daily to Sponsor. Sponsor shall have
no obligation to purchase any Loan(s) and may refuse to purchase any Loan for
any reason whatsoever. In the event Sponsor chooses to purchase the Loans, the
Loans will be pooled by Sponsor into amounts of not less than $1,000,000
(principal amount) of Loans (each a "Pool"). The settlement date will be the
first business day following Sponsor's agreement to purchase a Pool (each a
"Forward Commitment Settlement Date"). Time is of the essence. Sponsor and
Seller agree that the price paid for the Loans shall be determined from a WCA
PRICE OF ____% on the Loans purchased on the related Forward Commitment
Settlement Date. The premium will be paid to Seller as earned per the terms of
the Premium Agreement. Seller shall not be eligible for any other bonus
program offered by Sponsor during the Commitment Period. The note rate on any
loan sold to Sponsor shall not be less than the above stated WAC price.
3. Commitment Penalty. IF FOR ANY REASON SELLER FAILS TO DELIVER AT LEAST
NINETY-FIVE PERCENT (95%) OF THE COMMITMENT AMOUNT TO SPONSOR WITHIN THE
COMMITMENT PERIOD, SELLER SHALL BE OBLIGATED TO PAY TO SPONSOR WITHIN TEN (10)
CALENDAR DAYS OF THE FINAL COMMITMENT PERIOD SETTLEMENT DATE A COMMITMENT FEE
BASED UPON THE LENGTH OF THE COMMITMENT PERIOD, SUCH SUM BEING AGREED BY SELLER
AND SPONSOR AS LIQUIDATED DAMAGES. THE PARTIES AGREE THAT SPONSOR'S ACTUAL
DAMAGES IN THE EVENT OF SELLER'S FAILURE TO DELIVER THE COMMITMENT AMOUNT,
WOULD BE DIFFICULT TO ASCERTAIN, AND THE COMMITMENT FEE IS REASONABLE AS
LIQUIDATED DAMAGES. THIS PROVISION SHALL NOT BE DEEMED TO LIMIT SPONSOR'S
RIGHT TO OTHER REMEDIES PROVIDED HEREIN OR IN THE AGREEMENT WITH RESPECT TO
OTHER COVENANTS, REPRESENTATIONS AND WARRANTIES OF SELLER.
13
The information above marked by an * and [ ] has been omitted
pursuant to a request for confidential treatment.
The omitted portion has been separately filed with the Commission.
14
Commitment Penalties:
30 day period [***] (of original commitment amount)
45 day period [***] (of original commitment amount)
60 day period [***] (of original commitment amount)
75 day period [***] (of original commitment amount)
90 day period [***] (of original commitment amount)
4. Confidentiality. Seller and Sponsor agree that, without the prior written
consent of the other party, that neither it nor its directors, officers,
employees, affiliates, or agents will knowingly disclose to any individual or
entity the terms, conditions, or other facts of this letter, including the
status thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the day and year first above written.
[***] as Sponsor
By:__________________________
[***]
Authorized Signer
CREDIT DEPOT CORPORATION as Seller
By:__________________________________
Name:
Title:
14
The information above marked by an * and [ ] has been omitted
pursuant to a request for confidential treatment.
The omitted portion has been separately filed with the Commission.
