AMENDED AND RESTATED
MORTGAGE LOAN WAREHOUSING AGREEMENT
THIS AMENDED AND RESTATED MORTGAGE LOAN WAREHOUSING AGREEMENT (the
"Agreement") is made and dated as of November , 1997 by and between SUMMIT
BANK, a New Jersey banking corporation ("Lender"), and MORTGAGE PLUS EQUITY &
LOAN CORPORATION a New York corporation, (the "Company").
RECITALS
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A. Company and Lender (formerly known as United Jersey Bank,
successor by merger to Summit Bank) entered into a Mortgage Loan Warehousing
Agreement dated July 15, 1993 (the "1993 Warehousing Agreement") which set forth
the terms and conditions of a mortgage warehousing credit facility by Lender to
Company.
B. Company and Lender have agreed to amend the terms and conditions
of, and to extend the term of, the mortgage warehousing credit facility by
Lender to Company.
C. Company and Lender have agreed to amend, and to restate as so
amended, the 1993 Warehousing Agreement, so as to set forth the terms and
conditions of the amended and extended credit facility.
NOW THEREFORE, in consideration of these premises Company and
Lender adopt the foregoing recitals and amend and restate as amended the 1993
Warehousing Agreement to read in its entirety as follows:
1. Mortgage Warehousing Line of Credit
(a) Credit Limit. On the terms and subject to the conditions set forth
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herein, Lender agrees that it shall, from time to time to the Maturity Date (as
that term and capitalized terms not otherwise defined herein are defined in
Paragraph 9 below), make loans (the "Loans" or a "Loan") to the Company in
principal amounts not to exceed, in the aggregate at any time outstanding, the
lesser of:
(i) the Credit Limit; or
(ii) the Collateral Value of the Borrowing Base.
(b) Procedure for Request and Making of Loans. The Company shall, at least
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one (1) business day prior to each proposed funding date, deliver a Loan Advance
Request as per Exhibit 1 and accompanying required documents to Lender as per
Exhibit 2. The proceeds of the Loan must be used by the Company to fund the
Mortgage Loan. The proceeds shall be disbursed by Lender by issuing its check,
or by wire transfer as per the Loan Advance Delivery Instructions (Exhibit 3),
for the net amount necessary to close the Mortgage Loan, (to the extent that the
amount of such Loan and available balances in the funding account are sufficient
to at least equal said net amount) made payable to the Closing Representative
and the Obligors. Lender shall forward same directly to the Closing
Representative accompanied by a Closing Representative Instruction and
Certification Letter, in substantially the form of Exhibit 4 annexed hereto. In
the event the Loan proceeds are less than the net amount necessary to close the
Mortgage Loan, the Lender shall debit the difference from available balances in
the Company's funding account.
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(c) Book Account. The obligation of the Company to repay the Loans
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shall be evidenced by an account maintained by Lender on its books. Not more
frequently than once each month, Lender may deliver a statement of account to
the Company setting forth the unpaid balance of Loans outstanding hereunder,
which statement shall be deemed to be an account stated and conclusively correct
and accepted by the Company unless the Company notifies Lender in writing of a
statement of exceptions within ten (10) business days following delivery of such
statement to the Company.
(d) Interest. Interest on the Loans is due and payable on the first
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(1st) day of each month hereafter up to and including the Maturity Date. The
Company shall pay to Lender interest on Loans outstanding hereunder from the
date disbursed to but not including the date of payment in the amount billed to
the Company by Lender calculated on the principal amount of Loans outstanding
hereunder during the monthly interest computation period at the Interest Rate.
If payment is not received by Lender on or before the fifteenth (15th) day of
the month (or if the 15th is a Saturday, Sunday or holiday, the next succeeding
business day), a Late Fee equal to a per annum rate of four (4%) percent above
the Prime Rate shall be assessed on the delinquent interest from the sixteenth
(16th) day of the month (or if the 16th is a Saturday, Sunday or holiday, the
next succeeding business day), to but not including the date of payment in the
amount billed to Company by Lender. The foregoing shall not be construed as
allowing any cure or grace period with regard to nonpayment of interest when
due.
(e) Principal. All Loans hereunder, with interest accrued and unpaid
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thereon, shall be payable in full on the earlier of:
(i) the Maturity Date,
(ii) the expiration of the permissible warehouse period from
the date of such Loan,
(iii) the date of the sale of any Mortgage Loan under a
Commitment or otherwise,
(iv) the expiration date of the Commitment to which the
subject Mortgage Loan was to be sold under,
(v) the failure of the issuer of the subject Commitment to
purchase the subject Mortgage Loan,
(vi) the subject Mortgage Loan ceases to be an Eligible
Mortgage Loan; or
(vii) as otherwise set forth herein or in any other Loan
Document;
unless otherwise expressly extended or renewed in writing by Lender. Borrower
may at any time prepay outstanding principal under the Loans, in whole or in
part, without payment of any prepayment penalty or premium, and such prepaid
sums shall thereafter be available to be reborrowed by Borrower under the terms
and conditions of this Agreement.
(f) Borrowing Base: Conformity: Xxxx-to-Market Requirement. In
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support of its obligation to repay Loans hereunder, the Company shall cause to
be maintained with Lender, or with a custodian acceptable to Lender for the
account of Lender under the Security Agreement, a Borrowing Base consisting of
Eligible Collateral with a Collateral Value not less than, at any date, the
aggregate principal amount of Loans outstanding hereunder at such date. In
addition to all other
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payment obligations of the Company hereunder, the Company shall pay to Lender:
(i) The amount by which the aggregate principal amount of
Loans outstanding thereunder exceeds the Collateral Value of the Borrowing Base;
and
(ii) The amount by which the aggregate principal amount of
Loans outstanding hereunder exceeds the sum of the Fair Market Value of the
Borrowing Base.
Notwithstanding the foregoing, if, but only if, there shall not have occurred
and be continuing an Event of Default or Potential Default hereunder, the
Company may, in the alternative to making the payments required by subparagraphs
(f)(1) and (f)(2) above and subject to the provisions of the Security Agreement,
deliver to Lender additional Eligible Collateral such that the Borrowing Base,
as so increased, shall be in conformity with the requirements hereof.
(g) Nature and Place of Payments. All payments made on account of
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the Obligations shall be made a lawful money of the United States of America in
immediately available funds. If any payments required to be made by Company
hereunder becomes due and payable on a day other than a business day, the due
date thereof shall be extended to the next succeeding business day unless such
next succeeding business day falls in the next succeeding month in which case
such payment shall be made on the next preceding business day and interest
thereon shall be payable at the then applicable rate during such alteration.
Payments required to be made hereunder shall be made to the Contact Office of
Lender or such other office as Lender shall from time to time designate.
(h) Post Maturity Interest. Any Obligations not paid when due
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(whether at the stated Maturity Date, upon acceleration or otherwise) shall bear
interest from the date due until paid in full at a per annum rate equal to four
percent (4%) above the Interest Rate.
(i) Fees. The Company shall pay promptly to Lender the Required Fees
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when due.
(j) Computation. All computations of interest and fees payable
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hereunder shall be based upon a year of 360 days for the actual number of days
elaped.
2. Security; Guaranties: Additional Documents.
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(a) Security Agreement. As collateral security for the
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Obligations, the Company shall execute and deliver the Lender the Security
Agreement, pursuant to which the Company shall pledge, assign, and grant to
Lender a first priority security interest in and lien upon the Collateral.
(b) Guaranties, etc. As additional support for the Obligations, the
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Company agrees to execute and deliver or cause to be executed and delivered to
Lender such guaranties and such additional security agreements as Lender may
request, as set forth more particularly from time to time in the Commitment
Letter the "Additional Collateral Documents").
(c) Further Documents. The Company agrees to execute and deliver or
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to cause to be executed and delivered to Lender from time to time such
confirmatory or supplementary security agreements, financial statements, or
other documents, instruments or agreements as Lender may, in its sole
discretion, request, which are in Lender's judgment necessary or appropriate to
obtain for Lender the benefit of the Collateral and the Additional Collateral
Documents.
3. Conditions to Making a Loan.
(a) First Loan. As conditions precedent to Lender's obligation to
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make the first Loan hereunder:
(1) The Company shall have delivered or shall have had delivered to Lender, in
form and substance satisfactory to Lender, each of the following:
(i) A duly executed copy of the Commitment Letter:
(ii) A duly executed copy of this Agreement;
(iii) A duly executed copy of the Security Agreement;
(iv) A duly executed master promissory note evidencing the
Loans;
(v) Duly executed copies of the Additional Collateral Documents
and all other security agreements, financial statements, and other documents,
instruments, and agreements, properly executed, deemed necessary or appropriate
by Lender, in its sole discretion, to create on favor of Lender a perfected
first security interest in and lien upon the Collateral; and
(vi) Such credit applications, financial statements, corporate
borrowing resolutions and authorizations and such information concerning the
Company, any Guarantors, of its or their business, operation, and conditions
(financial and otherwise) as Lender may request.
(2) All acts, conditions, and things (including without limitation, the
obtaining of any necessary regulatory approvals and the making of any required
filings, recording or registrations) required to be done and performed and to
have happened precedent to the execution, delivery, and performance of the Loan
Documents and to constitute the same legal, valid and binding obligations
enforceable in accordance with their respective terms shall have been done and
performed and shall have happened in due and strict compliance with all
applicable laws.
(3) All documentation in connection with the transactions contemplated by
the Loan hereunder, including, without limitation, documentation for corporate
and legal proceedings shall be satisfactory in form and substance to Lender and
its counsel.
(b) All Loans. As conditions precedent to Lender's obligation to make
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any Loan hereunder, including the first Loan, the Company shall have delivered
a Loan Request and any required documents to Lender, and; at and as of the date
of funding thereof:
(i) The representations and warranties of the Company contained in
the Loan Documents shall be true and complete in all material respects on and as
of the date of such Loan as it is made on such date;
(ii) There shall not have occurred an Event of Default or Potential
Default; and
(iii) Following the funding of the requested Loan, the aggregate
Loans outstanding hereunder shall not exceed the limitation of Paragraph (1)(a)
above.
(iv) Litigation. No suit, action, investigation, inquiry or other
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proceeding by any governmental authority or other Person or any other legal or
administrative proceeding shall be pending or threatened which:
(a) questions the validity or legality of the transactions contemplated
by this Agreement, or
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(b) seeks damages in connection therewith and which, in the reasonable
judgment of the Lender,
(i) involves a significant risk of a preliminary of permanent injunction
or other order by a state or federal court which would prevent, or require
rescission of, the transactions contemplated by this Agreement, or
(2) in the case of any action or proceeding which seeks monetary damages
involves a significant risk of resulting in substantial financial liability to
the Company, the Guarantor and/or the Lender.
By requesting Lender to make any Loan hereunder, the Company shall be deemed
to have represented and warranted the truthfulness and completeness as of the
date of such request of the statements set forth in subparagraphs (b)(i) through
(b)(iv) above.
4. Representations and Warranties of the Company. As an inducement to Lender to
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enter into this Agreement and to make Loans as provided herein, the Company
represents and warrants to Lender that:
(a) Financial Condition. The financial statements of the Company,
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respectively dated the Statement Date and the Interim Date, copies of which have
heretofore been furnished to Lender, are complete and correct and present fairly
the consolidated and consolidating financial condition of the Company and its
consolidated subsidiaries at such dates and the consolidated and consolidating
results of their operations and changes in financial position for the fiscal
periods then ended. All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP and do
not contain any material misstatement of fact or omit to state any facts
necessary to make the statements contained therein not misleading. Neither the
Company nor any of its consolidated Subsidiaries have any material contingent
obligation, contengent liability, or liability for taxes, long-term lease, or
unusual forward or long-term commitment which is material and which is not
reflected in such financial statements, including the notes related thereto.
(b) No Change. Since the Statement Date and the Interim Date, there has
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been no material adverse change in the business, operations, assets, or
financial or other condition of the Company or Guarantors or of the Company and
its consolidated Subsidiaries taken as a whole.
(c) Corporate Existence: Compliance With Law. The Company and each
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Subsidiary:
(i) Is duly organized, valid existing, and in good standing as a
corporation under the laws of the state of its incorporation and each
jurisdiction in which its ownership of property or conduct of business requires
such qualification;
(ii) Has the corporate power and authority and the legal right to own
and operate its property and to conducts its business in the manner in which it
does and proposes so to do; and
(iii) Is in compliance with all Requirements of Law.
(d) Corporate Power: Authorization: Enforceable Obligations. The Company
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and each corporate Guarantor, if any, has the corporate power and authority and
the legal right to make, deliver, and perform the Loan Documents and to borrow
hereunder and has taken all necessary corporate action to authorize such
borrowing on the terms and conditions of the Agreement and to
authorize the execution, delivery, and performance of the Loan Documents. The
Loan Documents have each been duly executed and delivered on behalf of the
Company and each corporate Guarantor, if any, and constitute legal, valid, and
binding obligations of the Company and each Guarantor, if any, enforceable
against the Company in accordance with their respective terms.
(e) No Legal Bar. The execution, delivery, and performance of the Loan
Documents, the borrowing hereunder, and the use of the proceeds thereof, will
not violate any Requirement of Law or any Contractual Obligation of the Company
or any Guarantor.
(f) No Material Litigation. Except as disclosed by the Company to Lender
in writing prior to the date of the Commitment Letter, no litigation,
investigation, or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of the Company, threatened by or
against the Company or any of its Subsidiaries or any Guarantor or against
any of the Company's or any such Subsidiary's or any Guarantor properties or
revenues which, if adversely determined, could have a material adverse effect on
the business, operations, property, or financial or other condition of the
Company or any Subsidiary or any Guarantor.
(g) Taxes. The Company and each Subsidiary and each Guarantor have filed
or caused to be filed all tax returns that are required to be filed and have
paid all taxes shown to be due and payable on said returns or on any
assessments made against them or any of their property.
(h) Investment Company Act. The Company is not an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
(i) Subsidiaries. The company has delivered to Lender an accurate and
complete list of all existing Subsidiaries of the Company, their respective
jurisdictions of incorporation, the percentage of their capital stock owned by
the Company or other Subsidiaries; all of the issued and outstanding shares of
capital stock of the Subsidiaries have been duly authorized and issued and are
fully paid and nonassessable.
(j) Federal Reserve Board Regulations. Neither the Company nor any of
its Subsidiaries is engaged or will engage, principally or as one of its
important activities, in the business of extending credit for the purpose of
"purchasing" or "carrying" or any "margin stock" within the respective meanings
of such terms under Federal Reserve Board Regulation U. No part of the proceeds
of any Loan issued hereunder will be used for "purchasing" or "carrying" "margin
stock" as so defined or for any purpose which violates, or which would be
inconsistent with, the provisions of the regulations of the Board of Governors
of the Federal Reserve System.
(k) ERISA. The Company and each Subsidiary are in compliance in all
material respects with the requirements of ERISA and no Reportable Event has
occurred under any Plan maintained by the Company or any Subsidiary.
5. Affirmative Covenants. The Company hereby covenants and agrees with
Lender that, as long as any Obligations remain unpaid or Lender has any
obligation to make Loans hereunder, the Company shall:
(a) Financial Statements. Furnish to lender:
(i) Within ninety (90) days after the last day of each fiscal
year, financial statements (consolidated and consolidating) showing the
financial position and results of operations of the Company and its Subsidiaries
for the year ended on such date, audited by a firm
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of independent certified public accountants of nationally recognized standing
acceptable to Lender, together with a balance sheet and statement of income
(consolidated and consolidating) which has been subjected to the audit
procedures applied in the examination of Company's consolidated financial
statements. Such financial statements shall be prepared in conformity with GAAP
consistently applied, present fairly the financial position of the Company and
its Subsidiaries and the results of their operations as of the end of such
period and for the period then ended, and conform to the requirements of HUD
Handbook 1G 4000.3 REV, as amended from time to time, which financial statements
shall be accompanied by an unqualified report of independent certified public
accountants acceptable to Lender; and
(ii) Within forty-five (45) days after the last day of each of the
Company's four (4) fiscal quarters, consolidated and consolidating financial
statements showing the consolidated and consolidating financial position and
results of operations of the Company and its Subsidiaries as of and for the
period from the beginning of the current fiscal year to such date, together with
a certificate executed by the principal financial officer or principal
accounting officer or treasurer of Company certifying that, to the best of his
knowledge, such financial statements were prepared in conformity with GAAP
consistently applied (subject to year-end audit adjustments) and present fairly
the financial position of the Company and its Subsidiaries, and the results of
operations as of the end of such period and for the period then ended.
(b) Certificates: Reports; Other Information. Furnish or cause to be
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furnished to Lender:
(i) Simultaneously with the quarterly reports under 5(a)(ii)
above a Compliance Certificate in the form of Exhibit 5 annexed hereto;
(ii) No later than the tenth business day of each calendar month
and at such other times as Lender may reasonably request, a Borrowing Base
Certificate in the form of Exhibit 6 as of the last day of the immediately
preceding calendar month; and
(iii) Promptly, such additional financial and other information,
including, without limitation, financial statements of Guarantors, as Lender may
from time to time reasonably request.
(c) Payment of Indebtedness. Pay, discharge, or otherwise satisfy at or
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before maturity or before they become delinquent, defaulted, or accelerated, as
the case may be, all its Indebtedness, except Indebtedness being contested in
good faith and by appropriate proceedings and for which provision is made to the
satisfaction of Lender for the payment thereof in the event the Company is found
to be obligated to pay such Indebtedness and which Indebtedness is thereupon
promptly paid by the Company.
(d) Maintenance of Existence. Maintain all rights, privileges, licenses,
approvals, and franchises necessary or desirable in the normal conduct of its
business, and comply with all Contractual Obligations and Requirements of Law.
(e) Inspection of Property; Books and Records. Discussions. Keep proper
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books of record and account in which full, accurate, and complete entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of Lender to visit and inspect any of its properties and examine
and make abstracts from any of its books and records at any time and as often as
may reasonably be desired, and to discuss the business, operations, properties,
and financial and other condition of the Company and its Subsidiaries, with its
independent certified public accountants and with the Guarantors and any other
parties.
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(f) Notices. Promptly give notice to Lender of:
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(i) The occurrence of any Potential Default or Event of
Default;
(ii) Any litigation or proceeding against or affecting the
Company, any Subsidiary or Guarantor, or the Collateral, in excess of $25,000.00
or which could have a material adverse affect on the Collateral or the business,
operations, property, or financial or other condition of the Company or any
Subsidiary or Guarantor, and
(iii) A material adverse change in the business, operations,
property, or financial or other condition of the Company or any Subsidiary or
Guarantor.
(g) Expenses. Pay all reasonable out-of-pocket expenses of Lender
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(including fees and disbursements of counsel) incident to the transactions
contemplated by the Loan Documents including, but not limited to, any amendments
to or waivers of the provisions of the Loan Documents, the protection of the
rights of Lender under the Loan Documents, the enforcement of payment of the
Obligations, whether by judicial proceedings or otherwise, including, without
limitation, in connection with bankruptcy, insolvency liquidation,
reorganization, moratorium, or other proceedings involving the Company, and the
reasonable fees and disbursements of counsel to Lender in connection with the
preparation of the Loan Documents. The obligations of the Company under this
Paragraph 5(g) shall survive payment of the Obligations.
(h) Loan Documents. Comply with and observe all terms and
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conditions of the Loan Documents.
6. Negative Covenants. The Company hereby agrees that, as long as any
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Obligations remain unpaid or Lender has any obligations to make Loans hereunder,
the Company shall not, directly or indirectly:
(a) Liens. Create, incur, assume, or suffer to exist, any Lien upon
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the Collateral or, except as disclosed to and approved by Lender in writing,
upon any servicing rights of the Company or its rights to payment on account
thereof.
(b) Fundamental Changes. Change the essential nature of its
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business from that conducted on the date of this Agreement, or enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up,
or dissolve itself (or suffer any liquidation or dissolution), convey, sell,
lease, assign, transfer, or otherwise dispose of, in one transaction or a series
of transactions, all or substantially all of its business or assets or acquire
by purchase or otherwise all the business or assets of, or stock or other
evidences of beneficial ownership of, any Person, make any change in its present
method of conducting business, or make any change in its existing management
structure.
(c) Sale of Assets. Convey, sell, lease, assign, transfer, or
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otherwise dispose of any of its assets (other than obsolete or worn out
property), whether now owned or hereafter acquired, other than in the ordinary
course of business as presently conducted; provided, however, that in no event
shall the Company sell, transfer, or otherwise dispose of any part of its
servicing portfolio without the prior written consent of Lender if the amount so
sold, when aggregated with all such transactions within the preceding twelve
(12) month period, equals twenty-five percent (25%) or more in dollar amount of
the Company's remaining servicing portfolio.
(d) Dividends Etc. Declare or pay any dividends, purchase, redeem,
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or otherwise
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acquire for value any of its capital stock now or hereafter outstanding, or make
any distribution of assets to its stockholders as such, or permit any of its
Subsidiaries to purchase or otherwise acquire for value of stock of the Company,
except that the Company may:
(i) Declare and deliver dividends and distributions payable in
common stock of the Company, and
(ii) Purchase or otherwise acquire shares of its capital stock with
the proceeds received from the issue of new shares of its capital stock.
(iii) Declare or pay cash dividends to its stockholders and purchase or
otherwise acquire shares of its own outstanding capital stock for cash solely
out of net income of the Company, computed on a cumulative consolidated basis,
provided that the payment of any such dividend will not result in violation of
e, f, or g below.
(e) Adjusted Net Worth. Permit the Company's Adjusted net Worth to be less
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than the Minimum Permitted Adjusted Net Worth at any time.
(f) Tangible Net Worth. Permit the Company's Tangible Net Worth to be less
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than the Minimum Permitted Tangible Net Worth at any time.
(g) Debt to Adjusted Net Worth. Permit the ratio of the Company's
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consolidated Debt to its Adjusted Net Worth to exceed the Permitted Debt to
Adjusted Net Worth Ratio at any time.
7. Event of Default. Upon the occurrence and continuance of any of the
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following events (an "Event of Default"):
(a) The Company or any Guarantor shall fail to pay any of the Obligations on
the date when due; or
(b) Any representation or warranty made by the Company or any Guarantor in
any Loan Document or in connection with any Loan Document shall be inaccurate or
incomplete in any respect on or as of the date made; or
(c) The Company or any Guarantor or any Subsidiary shall default in the
observance or performance of any agreement contained in Paragraph 5(a) or (e) or
6 above or under the Security Agreement or any other Loan Document; or
(d) The Company or any Subsidiary shall default in the observance or
performance of any other agreement contained in this Agreement and such default
shall continue unremedied for a period of ten (10) days; or
(e) The Company or any Subsidiary or any Guarantor shall default in any
payment of principal of or interest on any Indebtedness or any other event
shall occur, the effect of which is to allow the hereof to cause the maturity of
such Indebtedness to be accelerated prior to its stated maturity; or
(f) [1] The Company or any Subsidiary or any Guarantor shall commence any
case, proceeding or other action;
(i) Under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, or relief of
debtors, seeking to have an order
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for relief entered with respect to it, or seeking to adjudicate it insolvent, or
seeking reorganization, arrangement, adjustment, winding up, liquidation,
dissolution, composition, or other relief in respect to it or its debts; or
(ii) Seeking appointment of a receiver, trustee, custodian, or other
similar official for it or for all or any substantial part of its assets; or
[2] The Company or any Subsidiary or any Guarantor shall make a general
assignment for the benefit or its creditors; or
[3] There shall be commenced against the Company or any Subsidiary or
any Guarantor any case, proceeding, or other action of a nature referred to in
clause [1] above which:
(i) Results in the entry of an order for relief or any such adjudication
or appointment; or
(ii) Remains undismissed, undischarged, or unbonded for a period of
sixty (60) days.
[4] There shall be commenced against the Company or any Subsidiary or
any Guarantor any case, proceeding, or other action seeking similar issuance of
a warranty of attachment, execution, distraint, or similar process against all
or any substantial part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within sixty (60) days from the entry thereof; or
[5] The Company or any Subsidiary or any Guarantor shall take any action
in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause [1], [2], [3], or [4] above; or
[6] The Company or any Subsidiary or any Guarantor shall generally not,
or shall be unable to, or shall admit in writing its inability to, pay its debts
as they become due.
(g) [1] Any person shall engage in any "prohibited transaction" (as defined
in Section 406 of ERISA or Section 4975 of the Internal Revenue Code) involving
any Plan.
[2] Any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan;
[3] A Reportable Event shall occur with respect to, or proceedings
shall commence to have a trustee appointed, or a trustee shall be appointed, to
administer or terminate, any Single Employer Plan, which Reportable Event or
institution of proceedings is, in the reasonable opinion of Lender, likely to
result in the termination of such Plan for purposes of Title IV of ERISA, and,
in the case of a Reportable Event, the continuance of such Reportable Event
unremedied for ten (10) days after notice of such Reportable Event pursuant to
Section 4043(a), (c) or (d) of ERISA is given or the continuance of such
proceedings for ten (10) days after commencement thereof, as the case may be;
[4] Any Single Employer Plan shall terminate for purposes of Title
IV of ERISA;
[5] Any withdrawal liability to a Multiemployer Plan shall be incurred
by the Company or any Commonly Controlled Entity; or
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[6] Any other event or condition shall occur or exist; and in
each case in clauses [1] through [6] above, such event or condition, together
with all other such events or conditions, if any, could subject the Company or
any Subsidiary to any tax, penalty, or other liabilities in the aggregate
material in relation to the business, operations, property, or financial or
other condition of the Company or any Subsidiary.
(h) One or more judgments or decrees shall be entered against the
Company or any Subsidiary involving claims not paid or not fully covered by
insurance and all such judgments or decrees shall not have been vacated,
discharged, or stayed or bonded pending appeal within thirty (30) days from
entry thereof; or
(i) Any of the Guarantors shall fail to perform any of its obligations
under its guaranty of the Obligations or shall notify Lender of its intention to
rescind, modify, terminate, or revoke its guaranty with respect to future
transactions or otherwise;
THEN, automatically upon the occurrence of an Event of Default under Paragraph
7(f) above, and, in all other cases, at the option of Lender, the principal
balance of outstanding Loans and interest accrued but unpaid thereon shall
become immediately due and payable and Lender may exercise any other remedies
under the Uniform Commercial Code or other applicable law, or any other Loan
Document, including but not limited to proceeding to enforce its right by suit
in equity, action at law or other appropriate proceeding, whether for payment or
the specific performance of the covenants or agreements contained in this
Agreement or any other Loan Documents.
8. Miscellaneous Provisions.
------------------------
(a) Assignment. The Company may not assign its rights or obligations
----------
under this Agreement without the prior written consent of Lender. Lender may,
at any time, from time to time, sell or assign all or any part of the Loan or
Loans made under this Agreement. All provisions contained in this Agreement or
any document or agreement referred to herein or relating hereto shall inure to
the benefit of Lender, its successors and assigns, and shall be binding upon the
Company, its successors, and assigns.
(b) Disclosure. The Company consents and agrees that Lender may
----------
disclose to any other financial institution and to any prospective or actual
successors or assigns financial statements, Loan Requests, credit reports,
credit ratings, and any and all other information in the possession of or
available to Lender relating to the Company and that Lender shall not be liable
to Company for any error, omission, or inaccuracy in any of the foregoing.
Company agrees to hold Lender harmless and to defend and indemnity Lender
against any claims by or liabilities to Company or to any such financial
institution or successor or assign of Lender arising out of or related to any
disclosure by Lender related to Company and/or breach by Company of any
representation or warranty, affirmative covenant, negative covenant, or other
Event of Default or Potential Default, or other breach by Company of this
Agreement or any related agreement.
(c) Amendment. This Agreement may not be amended or in any manner
---------
modified by an oral agreement, whether or not such oral agreement is supported
by a new consideration. This Agreement may not be amended or in any manner
modified unless such amendment or modification is in writing and signed by
Lender and the Company. This Agreement, The Security Agreement, and all related
agreements are for the sole benefit of Lender and Company and may be amended,
modified, or canceled at any time or from time to time without consultation or
consent of any other entity.
(d) Cumulative Rights; No waiver. The rights, powers, and remedies of
-----------------
Lender hereunder
11
are cumulative and in addition to all rights, powers, and remedies provided
under any and all agreements between the Company and Lender relating hereto, at
law, in equity, or otherwise. Any delay or failure by Lender to exercise any
right, power, or remedy shall not constitue a waiver thereof by Lender, and no
single or partial exercise by Lender of any right, power, or remedy shall
preclude other or further exercise thereof or any exercise of any other rights,
powers, or remedies.
(e) Entire Agreement. This Agreement and the documents and agreements
----------------
referred to herein embody the entire agreement and understanding between the
parties hereto and supersede all prior agreements and understandings relating
to the subject matter hereof and thereof.
(f) Survival. All representations, warranties, covenants, and agreements
--------
herein contained on the part of the Company shall survive the termination of
this Agreement and shall be effective until Obligations are paid and performed
in full or longer as expressly provided herein.
(g) Notices. All notices given by either party to the other shall be
-------
in writing, delivered personally, or by depositing the same in the United States
mail, certified, with postage prepaid, addressed to the party at the address set
forth in the Commitment Letter. Either party may change the address to which
notices are to be sent by notice of such change to the other party given as
provided herein.
(h) Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of New Jersey.
9. Definitions. For purposes of this Agreement, the terms as set forth below
-----------
shall have the following meanings:
"Acceptable Jurisdiction" shall have the meaning set forth in the Commitment
Letter.
"Adjusted Net Worth" shall mean at any date the sum of:
(a) Tangible Net Worth plus subordinated notes payable to stockholders,
plus;
(b) One percent (1.00%) of the aggregate outstanding principal balance
of the Company's FNMA, FHLMC AND GNMA mortgage loan servicing portfolio and one
half of one percent (.50%) of the Company's private investor Mortgage Loan
servicing portfolio (internally generated or acquired by purchase), less the sum
of;
(c) Any amounts included in Tangible Net worth (however designated on
the Consolidated Balance Sheet of the Company) allocated to the purchase of the
Company's servicing portfolio or any part thereof, or any amounts (however
designated on such balance sheet) attributable to the capitalization of
servicing fees in excess of the cost of servicing.
(d) Any amounts relating to non-mortgage banking items included in
Tangible Net Worth (however designated on the Consolidated balance sheet of the
Company) which the Lender may exclude in its sole discretion.
"Agreement" shall mean this Agreement, as the same may be amended, extended, or
replaced from time to time, including the Commitment Letter.
"Available Deposits" shall mean those net collected balances in the Company's
noninterest-bearing accounts maintained with Lender, (computed after deduction
of amounts required to compensate Lender for services rendered and deduction of
amounts required by Lender to be maintained on
12
deposit as reserves, determined in accordance with Lender's standard system of
analysis for similar accounts).
"Borrowing Base" shall mean at any date all Eligible Collateral delivered and
held by Lender or any custodian appointed by Lender in writing as collateral
security for the obligations.
"Borrowing Base Certificate" shall mean a certificate in form and substance
acceptable to lender.
"Closing Representative" means the attorney, title company or other entity which
will close any proposed Mortgage Loan.
"Collateral" shall have the meaning set forth in the Security Agreement.
"Collateral Value of the Borrowing Base" shall have the meaning set forth in the
Commitment Letter.
"Commitment Letter" shall mean any letter of most recent date from time to time
addressed to the Company and duly executed by Lender and the Company referencing
this Agreement and setting forth the specifics of certain terms and provisions
thereof, including without limitation a letter dated _______________, 1997.
"Commonly Controlled Entity" of a Person shall mean a Person, whether or not
incorporated, which is under common control with such Person within the meaning
of Section 414(c) of the Internal Revenue Code.
"Compliance Certificate" shall mean a report in form and substance acceptable to
Lender.
"Contact Office" shall mean that office of Lender set forth in the Commitment
Letter.
"Contractual Obligation" as to any Person shall mean any provision of any
security issued by such Person or of any agreement, instrument, or undertaking
to which such Person is a party or by which it or any of its property is bound.
"Credit Limit" shall mean the aggregate amount of credit agreed to be made
available by the Lender to the Company, from time to time, to and including the
Maturity Date, as set forth in the Commitment Letter.
"Debt" of any Person shall mean:
(a) Indebtedness for borrowed money or for the deferred purchase price of
property or services in respect of which such Person is liable, contingently, or
otherwise, as obligor, guarantor or otherwise, or in respect of which such
Person otherwise assures a creditor against loss; and
(b) Obligations under leases, which shall have been or should be, in
accordance with generally accepted accounting principles, recorded as capital
leases in respect to which obligations such Person is liable, contingently or
otherwise, as obligor, guarantor, or otherwise, or in respect of which
obligations such Person or entity otherwise assures a creditor against loss; and
(c) Unfunded vested benefits under each Plan maintained for employees of
such Person.
"Eligible Collateral" shall mean all Eligible Mortgage Loans and all other
Collateral meeting the requirements of "Types of Eligible Collateral" set forth
in the Commitment Letter, and, in each
13
case, as to which there shall have been delivered to Lender or its custodian
those items set forth in Exhibit "A" attached hereto. In determining the
eligibility of any Collateral Lender may require delivery to it of satisfactory
opinions of counsel relating to local laws of the jurisdiction to which the
Collateral is related.
Notwithstanding anything contained in this Agreement, Lender in its sold
discretion may reject any Collateral as ineligible under this Agreement when
presented by the Company for inclusion in the Borrowing Base. Any of the
requirements for eligibility may be waived by Lender; provided, however, that
any Collateral which is initially acceptable as Eligible collateral and which
subsequently fails to meet any of the foregoing requirements or representations
hereof shall forthwith cease to be eligible Collateral.
"Eligible Mortgage Loan" shall mean a Mortgage Loan with respect to which each
of the following statements shall be accurate and complete (and the Company by
including such Mortgage Loan in any computation of the Borrowing Base shall be
deemed to so represent and warrant to Lender at and as of the date of such
computation);
(a) Said Mortgage Loan is a binding and valid obligation of the Obligor
thereon, in full force and effect and enforceable in accordance with its term;
(b) Said Mortgage Loan is genuine, in all respects as appearing on its
fact or as represented in the books and records of the Company, and all
information set forth therein is true and correct;
(c) Said Mortgage Loan is free of:
(i) default of any party thereto (including the Company);
(ii) counterclaims, offsets and defenses and from;
(iii) any rescission, cancellation or avoidance, and all right
thereof, whether by operation of law or otherwise; or
(iv) any assertion by the Obligor that he has aright of
defense, set-off, counterclaim, rescission, cancellation or avoidance;
(d) No payment under said Mortgage Loan is more than thirty (30) days
past due the payment due date set forth in the underlying promissory note and
deed of trust (or mortgage);
(e) Said Mortgage Loan contains the entire agreement of the parties
thereto with respect to the subject matter thereof, has not been modified or
amended in any material respect and is free of concessions or understandings
with the Obligor thereon of any kind not expressed in writing therein;
(f) Said Mortgage Loan is in all respects as required by and in
accordance with all applicable laws and regulations governing the same,
including without limitation, the Federal Consumer Credit Protection Act and the
regulations promulgated thereunder and all applicable usury laws and
restrictions, and all notices, disclosures, and other statements or information
required by law or regulation to be given, and any other act required by law or
regulation to be performed, in connection with said Mortgage Loan have been
given and performed as required;
(g) All advance payments and other deposits on said Mortgage Loan have
been paid in full, and not part of said sums have been loaned, directly or
indirectly, by the Company to the Obligor,
14
and other than as disclosed to Lender in writing there have been no prepayments
on said Mortgage Loan;
(h) At all times said Mortgage Loan (with the exception of the Property)
will be free and clear of all liens, encumbrances, charges, rights, and
interests of any kind, except in favor of Lender;
(i) The Property covered by said Mortgage Loan is insured against loss
or damage by fire, flood (if applicable) and all other hazards normally included
within standard extended coverage in accordance with the provisions of said
Mortgage Loan with the Company named as mortgagee thereon;
(j) The Property covered by said Mortgage Loan is free and clear of all
liens, encumbrances, charges, rights, and interests of any kind except of the
Company (which has assigned any and all such liens, encumbrances, charges,
rights, and interests to Lender) or disclosed in a title policy, or preliminary
title report delivered to Lender concurrently with the delivery of the Mortgage
Loan or otherwise proved by Lender in writing;
(k) The Property covered by said Mortgage Loan is located in an
Acceptable Jurisdiction;
(l) If said Mortgage Loan has been withdrawn by the Company on terms and
subject to conditions set forth in the Security Agreement, said unit has not
been withdrawn for a time period in excess of the time permitted by the
Security Agreement;
(m) Said Mortgage Loan is covered by a Take-Out Commitment which is in
full force and effect and is in full compliance therewith;
(n) The date of the promissory note is no earlier than seven (7) days
prior to the date said Mortgage Loan is first included in the Borrowing Base;
(o) Said Mortgage Loan has not been included in the Borrowing Base for
a period of time in excess of the Permissible Warehouse Period;
(p) Said Mortgage Loan conforms in all respects to the description of
"Types of Eligible Collateral" set forth in the Commitment Letter; and
(q) In the event the Mortgage Loan is a Residential Mortgage Loan, and
the Loan-to-Value Ratio of said Mortgage Loan exceeds eighty percent (80%), said
Mortgage Loan is the subject of a mortgage guaranty insurance policy in favor of
the Company covering not less than the difference between the original principal
of the underlying promissory note and the Loan-to-Value ratio of said Mortgage
Loan.
"Event of Default" shall have the meaning set forth in Paragraph 7 above.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as the
same may from time to time be supplemented or amended.
"Fair Market Value of the Borrowing Base" shall mean at any date the aggregate
fair market value of Eligible Collateral at such date, determined by Lender in
its reasonable discretion.
"FHA" shall mean the Federal Housing Administration and any successor agency.
15
"FHLMC" shall mean the Federal Home Loan Mortgage Corporation and any successor
agency.
"FNMA" shall mean the Federal National Mortgage Association and any successor
agency.
"Funding Account" shall mean the deposit account of the Company described in the
Commitment Letter maintained in the Company's name alone at the Contact Office
of Lender.
"GAAP" shall mean generally accepted accounting principles in the United
States of America in effect from time to time as determined by the AICPA.
"GNMA" shall mean the Government National Mortgage Association and any successor
agency.
"Guarantors" shall mean guarantors of the Obligations described more
particularly in the Commitment Letter or any other party who guarantees the
Obligations.
"Indebtedness" of any Person shall mean all items of indebtedness which, in
accordance with generally accepted accounting principles and practices, would
be included in determining liabilities as shown on the liability side of a
balance sheet of such Person as of the date as of which indebtedness is to be
determined, including, without limitation, all obligations for money borrowed
and capitalized lease obligations, and shall also include all indebtedness and
liabilities of others assumed or guaranteed by such Person or in respect of
which such Person is secondarily or contingently liable (other than by
endorsement of instruments in the course of collection) whether by reason of
any agreement to acquire such indebtedness or to supply or advance sums or
otherwise.
"Interest Rate" shall mean the interest rate accruing on the Obligations prior
to the maturity thereof, as set forth in the Commitment Letter.
"Interim Date" shall have the meaning set forth in the Commitment Letter.
"Lien" shall mean any security interest, mortgage, pledge, lien, claim, charge,
or encumbrance (including any conditional sale or other title retention
agreement), any lease in the nature thereof, and the filing of or agreement to
give any financing statement under the Uniform Commercial Code of any
jurisdiction.
"Loan Documents" shall mean this Agreement, the Commitment Letter, the Security
Agreement, the Additional Collateral Documents, and any other documents,
instrument, or agreement executed by the Company for time in connection
herewith or therewith.
"Loan Request Form" shall mean a request in form and substance acceptable to
Lender.
"Loan-to-Value Ratio" shall mean: With respect to any residential Mortgage
Loan, the ratio of the aggregate indebtedness secured by such Property
(including the indebtedness represented by such Residential Mortgage Loan) to
the appraised fair market value of the subject Property at the date the loan
represented by such Residential Mortgage Loan was made.
"Maturity Date" shall mean the date set forth in the Commitment Letter (as such
date may be expressly extended from time to time in writing by Lender).
16
"Minimum Permitted Adjusted Net Worth" shall have the meaning set forth in the
Commitment Letter
"Minimum Permitted Tangible Net Worth" shall have the meaning set forth in the
Commitment Letter.
"Mortgage Loan" shall mean a real estate secured loan, made by the Company to an
Obligor or acquired by the Company, including without limitation:
(a) A promissory note and related deed of trust and/or security agreements;
(or mortgage)
(b) All guaranties and insurance policies, including, without limitation,
all mortgage and title insurance policies and all fire and extended coverage
insurance policies and rights of the Company to return premiums or payments with
respect thereto;
(c) All right, title, and interest of the Company in the Property covered
by said deed of trust (or mortgage); and
(d) The Take-Out Commitment related thereto.
"Multiemployer Plan" as to any Person shall mean a Plan of such Person which is
a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"Obligations" shall mean any and all debts, obligations and liabilities of the
Company to Lender (whether now existing or hereafter arising, voluntary or
involuntary, whether or not jointly owed with others, direct or indirect,
absolute or contingent, liquidated or unliquidated, and whether or not from time
to time decreased or extinguished and later increased, created, or incurred),
arising out of or related to the Loan Documents or any other present or future
document or agreement to or held by Lender whether or not related to the Loans.
"Obligor" shall mean the individual or individuals obligated to pay the
indebtedness which is the subject of a Mortgage Loan.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Permissible Warehouse Period" shall mean for any item of Eligible Collateral
the earlier of the period of time set forth in the Commitment Letter or upon the
expiration of the applicable Take-Out Commitment.
"Permitted Debt-to-Tangible-Net-Worth Ratio" shall have the meaning set forth in
the Commitment Letter.
"Person" shall mean any corporation, natural person, firm, joint venture,
partnership, trust, unincorporated organization, government, or any department
or agency of any government.
"Plan" shall mean as to any Person, any pension plan that is covered by Title IV
of ERISA and in respect of which such Person is an "employer" as defined in
Section 3(5) of ERISA.
"Potential Default" shall mean an event which but for the lapse of time or the
giving of notice, or both, would constitute an Event of Default.
17
"Prime Rate" shall mean the rate announced by Lender as its prime rate for Loans
to its Commercial Borrowers, as the same is in effect from time to time.
"Proceeds" shall mean whatever is receivable or received when Collateral or
proceeds is sold, collected, exchanged, or otherwise disposed of, whether such
disposition is voluntary or involuntary, and includes, without limitation, all
rights to payment, including return premiums, with respect to any insurance
relating thereto.
"Property" shall mean the real property, including the improvements thereon, and
the personal property (tangible and intangible), which are encumbered as
collateral security for a Mortgage Loan.
"Reportable Event" shall mean a reportable event as defined in Title IV of
ERISA, except actions of general applicability by the Secretary of Labor under
Section 110 of ERISA.
"Required Fees" shall have the meaning set forth in the Commitment Letter.
"Requirements of Law" shall mean as to any Person the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule, or regulation, or a final and binding
determination of an arbitrator or a determination or a court or other
Governmental Authority, in each case applicable to or finding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Residential Mortgage Loan" shall mean a Mortgage Loan, the proceeds of which
were advanced to enable the Obligor (or its predecessor if the Mortgage Loan has
been assumed by the present Obligor) to acquire a 1-4 unit family residence.
"Security Agreement" shall mean a security agreement in form and substance
acceptable to Lender.
"Single Employer Plan" shall mean as to any Person or Plan of such Person which
is not a Multiemployer Plan.
"Statement Date" shall have the meaning set forth in the Commitment Letter.
"Subsidiary" shall mean any corporation more than fifty percent (50%) of the
stock of which have by the terms thereof ordinary voting power to elect the
board of directors, managers or trustees of the corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any continency) shall, at the time as of which any determination is being made,
be owned by the Company, either directly or through Subsidiaries.
"Take-Out Commitment" with respect to any Collateral shall mean a bona fide
current, unused, and unexpired commitment made by FNMA, FHLMC, or a financial
institutional or an investment banker acceptable to lender, under which said
Person agrees, prior to or on the expiration thereof, upon the satisfaction of
certain terms and conditions therein, to acquire such Collateral, which
commitment is not subject to any term or condition which is not customary in
commitments of like nature or which, in the reasonably anticipated course of
events, cannot be fully complied with prior to the expiration thereof.
"Tangible Net Worth" shall mean the sum of the amounts set forth on the
consolidated balance sheet of the Company, prepared in accordance with GAAP as:
18
(a) The par or stated value of all outstanding common stock;
(b) Paid-in capital and retained earnings, less the sum of;
(i) Goodwill, including any amounts (however designated on such
balance sheet) representing the cost of acquisitions of subsidiaries in excess
of underlying tangible assets;
(ii) Patents, trademarks, copyrights, leasehold improvement not
recoverable at the expiration of a lease, and deferred charges (including, but
not limited to unamortized debt discount and expense, organizational expenses);
and
(iii) Loans receivable by Company from parents, affiliates,
subsidiaries, or Commonly Controlled Entities, or officers, directors, and
holders of stock in parents, affiliates or subsidiaries or other Commonly
Controlled Entities.
"VA" shall mean the Veterans Administration and any successor agency.
10. WAIVER OF TRIAL BY JURY. COMPANY WAIVES TRIAL BY JURY IN ANY LITIGATION
-----------------------
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first above written.
COMPANY: MORTGAGE PLUS EQUITY & LOAN CORPORATION
a New York corporation
By:
---------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
LENDER: SUMMIT BANK
By:
---------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
19
EXHIBIT 1
LOAN ADVANCE REQUEST
Company:
Street:
City/State:
To: Summit Bank
We hereby request that you advance $ for the loan described below.
--------
This loan advance request is submitted pursuant to the Mortgage Loan Warehouse
Agreement between Summit Bank and the Company. Please forward the proceeds as
per the enclosed Closing Proceeds Delivery Instructions.
Originator Loan Number --------------------
Mortgagor -------------------- Co-Mortgagor---------------------------
Property Address:---------------------------------
City/State/Zip ---------------------------------
County ---------------------------------
Loan Description: Type of Program
FIXED ------------ ARM ------------ BALLOON ------------- JUMBO ----------
OTHER-------------
Note Amount -------------- NOTE RATE -----------------------------
Note Date -------------- NOTE TERM YRS.-------------------------
The Take-Out Purchaser Is:
Name
-----------------------------
Commitment No.
-----------------------------
Commitment Price/Yield
-----------------------------
Commitment Expires
-----------------------------
20
The following documents are enclosed: Please check
Summit Initial Loan Advance Request Form; ------------
Closing Loan Proceeds Delivery Instructions; ------------
Copy Investor Commitment or Trade Sheet; ------------
Executed Assignment of Mortgage to Summit Bank; ------------
Copy Preliminary Title Report; ------------
Copy of Closing Agent Protection Letter; ------------
Copy of Originators Closing Instructions to Closing Agent; ------------
Copy Application (Original Signed); ------------
Form of Mortgage Note; ------------
Form of Mortgage or Deed of Trust; ------------
PMI Certificate and/or Flood Insurance (if applicable) ------------
We represent and warrant that we hold in our files the original of all documents
of which copies are enclosed herewith.
Company:
Authorized Signer
--------------------------
Name and Title
--------------------------
Date:
--------------------------
--------------------------------------------------------------------------------
FOR SUMMIT BANK USE ONLY
ADVANCE AMOUNT: SUMMIT REF #:
------------------------ ---------------------------
APPROVED FOR FUNDING: DATE:
--------------------------------------
EXHIBIT 2 Required Documents
First mortgage "wet" fundings required an initial package including:
-Loan advance request form;
-Closing proceeds delivery instructions;
-Copies of the unsigned note and mortgage;
-Fully executed original assignment in recordable form;
-Copy of the Take-Out Commitment;
-Attorney's closing instructions;
-Signed hand-written loan application;
-Closing agent protection letter;
-Copy preliminary title binder;
-Copies of the PMI Certification and flood insurance where applicable.
We must receive the following within two business days of funding including:
-Original note;
-Certified true copy of the mortgage and applicable riders;
-Copy of the signed HUD 1;
-Original executed Closing Representative Instruction and Certification Letter.
22
EXHIBIT 3
LOAN ADVANCE DELIVERY INSTRUCTIONS
Date:
To: Summit Bank
We hereby request that you deliver $ , on , for the closing of the
-------- -----
mortgage loan. We hereby authorize you to debit our account Summit Bank
# for any difference between the Loan Advance and the amount requested.
-------
Indicate form of payment:
Cashiers check: --------------------------------
Please issue your cashier's check in the amount indicated above drawn to:
Closing Representative: --------------------------------
and/or
Mortgagor: --------------------------------
Attention: --------------------------------
Street: --------------------------------
City, State, Zip Code: --------------------------------
Telephone: -----------------Fax:-----------
Wire Transfer: --------------------------------
Please wire transfer the amount indicated above to:
Closing Representative: --------------------------------
Account Number: --------------------------------
Bank: --------------------------------
Street: --------------------------------
23
City, State, Zip Code: ________________________________
ABA # & Telegraphic Abbr: ________________________________
Attention & Phone Number: ________________________________
Re: Mortgagors Name: ________________________________
Telephone: _________________ Fax:__________
Company: _______________________
Authorized Signer ______________
Name & Title ___________________
Date: __________________________
24
EXHIBIT 4
SUMMIT BANK
CLOSING REPRESENTATIVE INSTRUCTIONS AND CERTIFICATION LETTER
Date: date
To Closing Agent: name, title
company
address
city/state/zip
Real Property Purchaser: name
address
city/state/zip
mortgage amt:$___________
Mortgage Banker: company
address
city/state/zip
Dear Sir or Madam:
We herewith deliver to you our Cashier's Check #________ in the amount of
$___________, which you are hereby authorized to disburse provided only that
prior thereto or concurrently therewith you shall have:
1. Signed this letter acknowledging receipt and agreement to act in
accordance with the terms hereof and have faxed the executed letter to Summit
Bank-Mortgage Banking Finance Group # 908/709-6405;
2. Recorded or cause to be recorded a deed in favor of the real
property purchaser above named;
3. Obtained a duly executed and delivered original note, payable to the
mortgage banker in the sum stated above;
4. Recorded or cause to be recorded a duly executed mortgage or deed
of trust securing the note described in 3;
5. Within 30 days of closing, obtained or issued a policy of title
insurance in the usual and ordinary form insuring the purchaser, the mortgagee
and the assignee of the mortgagee that the mortgage or deed of trust is a valid
first lien on the real property, prior to all other liens and encumbrances
except current taxes not yet due or payable;
6. Obtained a certificate or other appropriate evidence of insurance of
the improvements on said real property against loss by fire, vandalism or
malicious mischief, naming as beneficiaries the owner, mortgagee and assignee of
the mortgagee as their interests may appear.
7. Have complied with the mortgage bankers closing instructions,
provided that they are not contrary to anything contained therein.
25
By endorsing and depositing our check you represent, warrant and certify that
the original note, item 3, is the sole original note, that it has been duly
executed and delivered by the makers thereof, that no duplicate original
notes have been executed or delivered.
Upon closing of the Mortgage Loan you must immediately deliver by overnight
courier the original note, item 3, a certified true copy of the Mortgage, copy
of executed HUD 1 and this original executed letter to:
SUMMIT BANK
MORTGAGE BANKING FINANCE GROUP
000 XXXXXX XXXXXX
XXXXXXXX, XXX XXXXXX 00000
Upon written instruction of Summit Bank or if the Mortgage Loan does not close
for any reason, return the Cashier's Check by overnight courier to the above
address.
All costs of closing and recordation are to be paid by the purchaser of mortgage
banker. These escrow instructions may be modified only in writing duly signed
on behalf of Summit Bank. The Summit Bank reserves the right to amend, modify or
withdraw these closing instructions at any time until the Mortgage Loan closes.
Summit Bank
By: ____________________________
Name: Xxxxxx Xxxxxxx
Title: Vice President
Received and agreed to on this day _________________, 19_____
By: ____________________________
Name:
Title:
26
EXHIBIT 5
COMPLIANCE CERTIFICATE
Reference is made to that certain Mortgage Loan Warehousing Agreement (the
"Agreement"), dated [[date]] between the undersigned (the "Company") and Summit
Bank (the "Lender"). All terms used in this Report, which are defined in the
Agreement, shall have the same meaning herein as in the Agreement. The
information on this Report is as of the last day of the Company's fiscal quarter
ending [[date]].
A. Common Stock $-------------------
B. Paid in Capital $-------------------
C. Retained Earnings $-------------------
D. 1.00% of FNMA,
FHLMC, & GNMA Servicing Portfolio
& .50% of Private Investor Servicing $-------------------
E. TOTAL A, B, C, D $-------------------
F. Intangible Assets* $-------------------
G. Balance Sheet Items**
Attributable to Servicing Portfolio $-------------------
H. TOTAL F, G
I. Adjusted Net Worth: E minus H $-------------------
J. Tangible Net Worth A+B+C minus F $-------------------
K. Debt $-------------------
L. Leverage Ratio - K+I to 1.0
-------------------
*Including Goodwill, Loans to Officers, etc. (as defined in the Agreement).
**Including Unamortized Cost to Purchase Servicing, Capitalized Servicing,
Premiums, etc. (as defined in the Agreement).
CERTIFICATION
To the best of the knowledge and belief (after reasonable investigation) of the
officer of the Company executing this Report, the above information and
computations are accurate and complete in all respects, and there exist no event
of default or potential event of default.
27
IN WITNESS WHEREOF, the Company has caused this Compliance Certificate to be
executed and delivered by its duly authorized Chief Financial Officer,
Treasurer, or Vice President - Finance this (date)
(company)
a (state) corporation
By:
---------------------------------------
Name:
Title:
28
EXHIBIT 6
BORROWING BASE CERTIFICATE
To: Summit Bank
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Date:
ATTENTION: Xxxxxx Xxxxxxx
Reference is made to the Mortgage Loan Warehousing Agreement (the "Agreement")
dated as of (date) (including any amendments thereto) between the undersigned
("Borrower") and Summit Bank ("Lender"). All terms used in this Certificate,
which are defined in the Agreement shall have the same meaning herein as in the
Agreement.
1. Mortgage Loans Held By Summit Bank As Security Collateral. As of the date
hereof, the aggregate principal amount of Mortgage Loans held by Summit Bank as
security collateral is $_____________________.
2. Borrowing Outstanding At Summit Bank. As of the date hereof, the borrowing
outstanding at Summit Bank is $_______________________.
3. Collateral Value of the Borrowing Base. As of the date hereof, the Collateral
Value of the Borrowing Base is $__________ based on Take-Out Commitments
previously provided to Lender or as shown on the attached listing.
4. Borrowing Outstanding At Other Institutions. As of the date hereof, the
borrowings outstanding at other institutions is $________________.
5. Certification. To the best of the knowledge and belief (after reasonable
investigation) of the officer of the Borrower executing this Certificate:
(a) The above information and computations are accurate and complete, and
(b) As of the date hereof:
(1) All representations and warranties of the Borrower set forth in the
Agreement are accurate and complete, and
(2) There does not exist a Potential Default or an Event of Default under the
Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Borrowing Base Certificate to
be executed and delivered by its Responsible Officer this _______ date of
_________, 199_.
(Company)
a [state} corporation
By:_____________________________
Name:
Title:
29
